Motorola Solutions Delivers 8% Revenue Gain, Expands Margins Amid Tariff Pressures

Motorola Solutions (NYSE: MSI) delivered a robust third quarter performance with revenue of $3.01 billion — an 8% year-over-year increase — while expanding operating margins by 80 basis points despite facing $70-80 million in tariff headwinds. The company's security-focused portfolio demonstrated continued momentum across mission-critical networks, video security, and command center solutions, with Software and Services growing 11% year-over-year.

In an earnings conference call, Chairman and CEO Gregory Brown emphasized the strength of customer demand: "What was clear from these discussions, we have the right solutions at the right time to address the evolving challenges that our customers are facing," referencing engagement at the Army's AUSA Conference and the International Association of Chiefs of Police conference.

Record backlog positions company for growth

The company ended Q3 with record backlog of $14.6 billion, up $467 million year-over-year, with Software and Services backlog reaching an all-time record of $11 billion. Brown highlighted the momentum: "We ended the quarter with our highest Q3 ending backlog ever...that is increasingly driven by our Command Center and video solutions."

Following strong Q3 results, Motorola raised its full-year EPS guidance to $15.09-$15.15, up from previous guidance of $14.88-$14.98, and expects Q4 revenue growth of approximately 11%.

Silvus acquisition expands defense security capabilities

The integration of Silvus Technologies, acquired for $4.4 billion in August, exceeded initial expectations. The company raised its full-year Silvus revenue outlook from $475 million to $500 million and expects 20% growth in 2026, with EPS contribution of $0.30-$0.40, up from the original $0.20 estimate.

Brown expressed enthusiasm about the strategic fit: "We're the market leader in mission-critical voice through TETRA and P25. Now we're the leader in mission-critical data as defined by high-speed, low latency mobile ad hoc networking." He emphasized that Silvus opens "new market in defense, new market in autonomous, new market in drone infrastructure."

Executive Vice President and COO John Molloy detailed Silvus's positioning in emerging defense technology: "There's around 120 domestic drone manufacturers right now, and we're on almost all of those platforms." The company is also "a key part of the architecture" for the Army's next-generation command and control programs.

Notable Q3 Silvus wins included a $10 million order for a NATO country and strong international performance, with Brown noting: "The growth is primarily international that we see with Silvus, not necessarily Fed."

Video security and command center solutions accelerate

Video security emerged as a significant growth driver, with cloud-based solutions showing particular strength. Brown noted that while overall video revenue grew 7% in Q3, "Avigilon Alta, the cloud video solution, is growing over 4x faster in Q3 than the 7%," with order growth for cloud video exceeding even that accelerated pace.

The company secured international video security wins including a $14 million mobile video order for New York State Park Police and a $10 million order for Bulgaria's Ministry of Interior. Molloy emphasized expanding European presence: "Bulgaria represents the 18th European country where we will be deploying our mobile video solutions."

Command center solutions demonstrated robust 16% growth in Q3, driven by what CFO Jason Winkler described as "APX NEXT applications...exceeding our expectations," along with "additional strength in the control room or 911 international parts of our business."

A fundamental shift is occurring in how security agencies approach infrastructure. Molloy noted: "The days of infrastructure as a stand-alone investment no longer exists. It's infrastructure and managed services because...you have to think about your cyber threat surface. And we've seen our cybersecurity services up 22%."

AI-powered security assistant shows early traction

The company's SVX body-worn security assistant demonstrated strong early adoption with 70 police departments purchasing the device since its July launch — double initial expectations. Molloy described SVX as "not a body-worn camera...it's an AI assistant."

Executive Vice President and CTO Mahesh Saptharishi highlighted specific AI capabilities: "We've had over 1,000 customers who have actively adopted and are using Assist for DEMS," the digital evidence management system. AI-driven redaction capabilities reduce information sharing time "by over 80%" while assisted narrative features "reduce not just the report writing time, but the cycle time that it takes to revise narrative by over 50%."

Real-time translation capabilities integrated with SVX are proving valuable, with Saptharishi sharing an example where an officer responding to a domestic disturbance "was able to actually leverage real-time translation to mitigate that situation."

Infrastructure modernization cycle begins

Motorola is at the beginning of a multi-year infrastructure upgrade cycle for land mobile radio systems. The company secured three major orders for its new D-Series infrastructure platform in Q3: $110 million from Colorado, $84 million from Tennessee, and $82 million from a U.S. state/local customer.

These awards represent the first major infrastructure upgrade in approximately 12 years. Brown emphasized the long-term nature: "These orders...are large multiyear deployment orders...this next-generation infrastructure upgrade is a multiyear journey with multiyear orders with multiyear deployments. That's a good thing. It speaks to the durability of LMR."

Strong financial position and outlook

Motorola achieved record Q3 operating cash flow of $799 million, up $40 million year-over-year. The company ended the quarter with approximately $900 million in cash and expects to generate $2.75 billion in operating cash flow for the full year—marking the third consecutive year of double-digit growth.

Despite a prolonged government shutdown affecting some federal agency business, Winkler noted: "The vast majority of our public safety business serves state and local customers who are unaffected by the federal shutdown."

For 2026, Brown indicated expectations for "another year of strong revenue growth and earnings growth," with preliminary revenue expectations around $12.6 billion, continued operating margin expansion despite first-half tariff headwinds, and continued operating cash flow growth.

Brown concluded by emphasizing market durability: "We got the right set of solutions that are highly critical for our safety and security customers, both in the U.S. and abroad. Customer funding environment globally for safety and security remains strong."

*This article was created with the help of generative AI tools and edited by our content team for clarity and accuracy.