Motorola Solutions, Inc. Q4 FY2025 earnings call

• Q4 was an exceptional quarter with record revenue, operating earnings, and margins; orders grew 26% and backlog reached $15.7 billion. • Full year 2025 results were outstanding with 8% revenue growth, 11% EPS growth, and record operating cash flow. • Segment results: Products and SI and Software and Services had strong performances in Q4 and full year. • Regional results: North America and International showed growth. • Backlog was at an all-time high. • Key highlights included the launch of Assist Suites, success of SVX, FedRAMP approval, and significant capital allocation

Products and SI: Q4 sales up 11% versus last year, with 11% growth in MCN and 12% in video. Revenue from acquisitions was $151 million, while FX was $20 million favorable. Operating earnings were $667 million, or 30.9% of sales, up from 30.5% in the year prior. Full year Products and SI revenue was $7.3 billion, up 5% from the prior year. Software and Services: Q4 revenue was up 15% driven by growth in all three technologies. Revenue from acquisitions was $37 million, while FX was $10 million favorable. Q4 operating earnings in the segment were $419 million, and operating margins were 34.3%, up from 30.3% last year. Full year Software and Services revenue was $4.4 billion, up 13% compared to last year. North America Q4 revenue was $2.4 billion, up 7%, and $8.4 billion for the full year, also up 7%. International Q4 revenue was $1 billion, up 26% versus last year with strong double-digit growth in both segments and all three technologies. For the full year, international revenue was $3.3 billion, up 11% with growth in both segments and double-digit growth in all three technologies. Ending backlog for Q4 was an all-time record of $15.7 billion, up $1 billion versus last year and up $1.2 billion sequentially

• Q1 sales expected to be up between 6%-7%, non-GAAP EPS between $3.20 and $3.25 per share. • Full year 2026 revenue expected to be approximately $12.7 billion and non-GAAP EPS between $16.70 and $16.85 per share. • Anticipate strong cash conversion in 2026 with expectations of approximately $3 billion in operating cash flow. • Segment growth expectations: Software and Services revenue growth 10%-11%, Products and SI 7%-8%; video growth 10%-11%, Command Center 15% growth, MCN growth 7%-8% with acceleration in the second half

Q: Update on Silvus, including whether there would be an upward bias to growth given unmanned vehicles and thoughts on federal TAM going forward.

A: Silvus is performing well, expecting Silvus revenue of $675 million in 2026 which is higher than previous expectations; APEX Next and SVX have good traction, and FedRAMP approval widens the addressable market for federal.

Q: Margin outlook for 2026, including puts and takes from tariffs and memory costs.

A: Plan for 100 basis points of operating margin expansion, including managing tariffs and costs.

Q: Backlog into 2026, specifically product backlog direction.

A: Expect product backlog to be up versus 2025, with Q1 likely to decline seasonally but order performance and pipeline provide confidence.

Q: Cadence of Assist Suites new product introductions.

A: Similar cadence to 2025, with more personas and features to be added.

Q: Silvus public safety and commercial opportunities and whether they are incremental to the TAM.

A: Silvus has opportunities in defense, borders, state and local police (with spectrum considerations), and unmanned systems, which are incremental to TAM.

Q: Memory, tariffs impact, and strongest businesses heading into 2026.

A: Memory costs are managed, and all businesses including Products and SI, Software and Services are strong.

Q: AI Assist early adoption and customer use of multiple AI plans.

A: Early adoption of AI Assist, customers can have flexibility with solutions, and our value prop is compelling.

Q: LMR services penetration, growth drivers.

A: Cyber and 24/7 monitoring have room to grow, growth drivers include AI-driven automation in cybersecurity and new hardware refresh with services uplift.

Q: LMR growth acceleration and backlog impact.

A: Consistency of demand, FedRAMP approval widens the addressable market, and backlog impact is more significant in Q1.

Q: Backlog behavior related to past price changes and World Cup impact.

A: No residual effect from past price changes, and the World Cup has opportunities with federal and local funding.

Q: Silvus guidance raise source and video demand.

A: Guidance raise is from international and unmanned systems, and video demand is driven by AI-driven analytics and safety/compliance use cases