Motorola Solutions (MSI) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 sales of $2.53B, up 6% year-over-year, with record operating earnings and cash flow across all segments and technologies.

• GAAP EPS was $2.53; non-GAAP EPS rose 13% to $3.18 year-over-year.

• Operating cash flow reached $510M, up $128M from the prior year.

• Closed acquisitions of RapidDeploy and Theatro for $414M, expanding cloud-native and AI-powered software offerings.

• Launched SVX and Assist, innovative AI-driven public safety technologies and converged devices.

Financial highlights

• Q1 revenue grew 6% year-over-year to $2.53B, exceeding guidance, with all three technologies contributing to growth.

• GAAP operating earnings were $582M (23% margin), up from 21.7% last year; non-GAAP operating earnings were $716M, up 12% year-over-year.

• Non-GAAP operating margin rose 160 bps to 28.3%, driven by higher sales, favorable mix, and lower material costs.

• Free cash flow was $473M, up $137M year-over-year.

• North America revenue grew 9% to $1.9B; international revenue declined 3% due to FX and lower Ukraine LMR revenue.

Outlook and guidance

• Q2 2025 revenue growth expected at ~4%, with non-GAAP EPS guidance of $3.32–$3.37.

• Full-year 2025 revenue growth projected at 5.5%, with non-GAAP EPS of $14.64–$14.74.

• Full-year outlook assumes $40M FX headwinds, 170M average shares, and ~23% effective tax rate.

• Double-digit operating cash flow growth expected for the year, targeting ~$2.7B.

• Management expects increased material costs from global tariffs but anticipates substantial mitigation.