Motorola Solutions (MSI) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $3.1 billion, up 13% year-over-year, with strong growth in both Products and Systems Integration (+15%) and Software and Services (+10%), and robust demand across all technologies.

• GAAP EPS rose 10% to $3.33; non-GAAP EPS increased 24% to $4.41, reflecting higher operating leverage and a $60 million IEEPA refund benefit.

• Operating cash flow reached $469 million in Q2, up $197 million year-over-year, and backlog hit a record $15.6 billion, up 11%.

• Announced definitive agreement to acquire D-Fend Solutions for $1.5 billion, expanding counter-drone capabilities.

• Growth was supported by recent acquisitions, favorable currency rates, and strong demand for APX NEXT, D-Series, and Silvus products.

Financial highlights

• Q2 2026 revenue grew 13% year-over-year to $3.1 billion, with $243 million from acquisitions and $35 million from FX tailwinds.

• GAAP operating earnings were $809 million (25.8% margin), non-GAAP operating earnings were $1.03 billion (32.9% margin, up 330 bps), and net earnings attributable to shareholders were $557 million.

• Free cash flow was $414 million, up $190 million year-over-year, driven by higher earnings and lower tax payments.

• Q2 capital allocation included $326 million in share repurchases, $201 million in dividends, and $55 million in CapEx.

• Gross margin improved to 53.6% from 51.1% year-over-year.

Outlook and guidance

• Q3 2026 revenue growth expected at ~8%, with non-GAAP EPS guidance of $4.39–$4.44.

• Full-year 2026 revenue guidance raised to ~$12.975 billion (from $12.8B), and non-GAAP EPS to $17.62–$17.72 (from $16.87–$16.99).

• Double-digit growth expected for both segments and all three technologies for the full year.

• Operating margin expansion for the year now expected at 170 basis points (up from 100 bps prior).

• Effective tax rate for the year projected between 22% and 22.5%.