Q4 2025 Motorola Solutions Inc Earnings Call Transcript
Key Points
- Motorola Solutions Inc (MSI) reported record revenue, operating earnings, and operating margins for Q4 2025, with a 26% increase in orders and a record backlog of $15.7 billion.
- The company achieved its fifth consecutive year of double-digit EPS growth, with full-year revenue increasing by 8% and EPS by 11%.
- MSI generated record operating cash flow of $2.8 billion, up 19% year-over-year, marking the third consecutive year of double-digit cash flow growth.
- The company successfully integrated acquisitions, contributing $188 million in Q4 revenue, and expanded its product and services portfolio, including the launch of AI-powered Assist Suites.
- MSI's Software and Services segment saw a 15% revenue increase in Q4, driven by growth in all three technologies, and the company expects continued strong demand in 2026.
- Higher tariffs and increased expenses from acquisitions led to a rise in operating expenses, with Q4 OpEx up $48 million compared to the previous year.
- The effective tax rate increased to 23.6% in Q4 from 22% a year ago, driven by lower benefits from share-based compensation.
- Despite strong performance, MSI faces challenges from higher interest expenses and a higher tax rate, which partially offset EPS growth.
- The company anticipates a $60 million tariff headwind in the first half of 2026, impacting operating margins.
- MSI's product backlog is expected to decline in Q1 2026 due to normal seasonality, although it is projected to increase by year-end.
Good afternoon, and thank you for holding. Welcome to the Motorola Solutions fourth-quarter 2025 earnings conference call. Today's call is being recorded. If you have any objections, please disconnect at this time. The presentation material and additional financial tables are posted on the Motorola Solutions Investor Relations website.
In addition, a webcast replay of this call will be available on our website within 3 hours after the conclusion of this call. The website address is www.motorolasolutions.com/investor. (Operator Instructions).
I would now like to introduce Mr. Tim Yocum, Vice President of Investor Relations. Mr. Yocum, you may begin your conference.
Good afternoon. Welcome to our 2025 fourth-quarter earnings call. With me today are Greg Brown, Chairman and CEO; Jason Winkler, Executive Vice President and CFO; Jack Molloy, Executive Vice President and COO; and Mahesh
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