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, driven by growth in both Products/SI and Software/Services segments.

• GAAP EPS was $2.53; non-GAAP EPS rose 13% to $3.18 year-over-year, reversing a prior-year loss.

• Operating cash flow reached $510M, up $128M year-over-year; free cash flow was $473M, up $137M.

• Completed acquisitions of RapidDeploy and Theatro for $414M, expanding software offerings.

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

Financial highlights

• Q1 revenue grew 6% year-over-year to $2.53B, surpassing guidance; North America up 9%, international down 3% due to FX and Ukraine.

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

• Gross margin improved to 51.4% from 49.9% year-over-year.

• Backlog ended at $14.1B, down 2% year-over-year, with segment mix shifts.

• Share repurchases totaled $325M in Q1; $182M in dividends paid.

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 guidance reaffirmed at 5.5%, with non-GAAP EPS between $14.64 and $14.74.

• Full-year outlook assumes $40M FX headwinds, up to $100M in tariff-related costs, and a non-GAAP tax rate of ~23%.

• Management anticipates substantial mitigation of increased material and component costs from tariffs.

• No material changes to risk factors or forward-looking statements since the last annual report.