Motorola Solutions, Inc 10-Q for FY2025 Q2
Motorola Solutions, Inc. (MSI)
10-Q
2025-08-07
For: 2025-06-28
View Original
Added on
April 03, 2026
About this 10-Q
Motorola Solutions, Inc filed this 10-Q on August 7, 2025, covering the quarter ended June 28, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 28, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.77B
- up 5.2% from $2.63B a year earlier
- Net income
- $513M
- up 15.8% from net income of $443M a year earlier
- Diluted EPS
- $3.04
- up 16.9% from $2.60 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
Form 10-Q
____________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 28, 2025
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 1-7221
___________________________________________
(Exact Name of Registrant as Specified in Its Charter)
____________________________________________
| (State of Incorporation) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices, Zip Code)
(847 ) 576-5000
(Registrant’s Telephone Number, Including Area Code)
Not applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||||||||
| $0.01 | Par Value | |||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer” “accelerated filer” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of the registrant's Common Stock, $0.01 par value per share, outstanding as of August 1, 2025 was 166,603,894 .
| TABLE OF CONTENTS | |||||||||||
For the Quarter Ended June 28, 2025 | |||||||||||
PART I. FINANCIAL INFORMATION | Page No. | ||||||||||
| Item 1. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
PART II. OTHER INFORMATION | |||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited)
| (In millions, except per share amounts) | Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Net sales from products | $ | $ | $ | $ | |||||||||||||||||||
| Net sales from services | |||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||
| Costs of products sales | |||||||||||||||||||||||
| Costs of services sales | |||||||||||||||||||||||
| Costs of sales | |||||||||||||||||||||||
| Gross margin | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Research and development expenditures | |||||||||||||||||||||||
| Other charges | |||||||||||||||||||||||
| Operating earnings | |||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Other, net | ( | ||||||||||||||||||||||
| Total other expense | ( | ( | ( | ( | |||||||||||||||||||
| Net earnings before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||
| Less: Earnings attributable to non-controlling interests | |||||||||||||||||||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
1
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | |||||||||||||||||||
| Net earnings | $ | $ | $ | $ | |||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
| Derivative instruments | |||||||||||||||||||||||
| Defined benefit plans | |||||||||||||||||||||||
| Total other comprehensive income (loss), net of tax | ( | ||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Less: Earnings attributable to non-controlling interests | |||||||||||||||||||||||
| Comprehensive income attributable to Motorola Solutions, Inc. common shareholders | $ | $ | $ | $ | |||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
2
Condensed Consolidated Balance Sheets (Unaudited)
| (In millions, except par value) | June 28, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Contract assets | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Operating lease assets | |||||||||||
| Investments | |||||||||||
| Deferred income taxes | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Contract liabilities | |||||||||||
| Accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Stockholders’ Equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Authorized shares: | |||||||||||
Issued shares: 6/28/25— | |||||||||||
Outstanding shares: 6/28/25— | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total Motorola Solutions, Inc. stockholders’ equity | |||||||||||
| Non-controlling interests | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
3
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
| (In millions) | Shares | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interests | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||
| Issuance of common stock and stock options exercised | ( | ||||||||||||||||||||||||||||
| Share repurchase program | ( | ( | |||||||||||||||||||||||||||
| Share-based compensation expenses | |||||||||||||||||||||||||||||
Dividends declared $ | ( | ||||||||||||||||||||||||||||
| Balance as of March 29, 2025 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||
| Issuance of common stock and stock options exercised | |||||||||||||||||||||||||||||
| Share repurchase program | ( | ( | |||||||||||||||||||||||||||
| Share-based compensation expenses | |||||||||||||||||||||||||||||
Dividends declared $ | ( | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interest on subsidiary common stock | ( | ||||||||||||||||||||||||||||
| Balance as of June 28, 2025 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| (In millions) | Shares | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interests | ||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings (loss) | ( | ||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ||||||||||||||||||||||||||||
| Issuance of common stock and stock options exercised | ( | ||||||||||||||||||||||||||||
| Share repurchase program | ( | ( | |||||||||||||||||||||||||||
| Share-based compensation expenses | |||||||||||||||||||||||||||||
Dividends declared $ | ( | ||||||||||||||||||||||||||||
| Balance as of March 30, 2024 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||
| Issuance of common stock and stock options exercised | |||||||||||||||||||||||||||||
| Share repurchase program | ( | ( | |||||||||||||||||||||||||||
| Share-based compensation expenses | |||||||||||||||||||||||||||||
Dividends declared $ | ( | ||||||||||||||||||||||||||||
| Dividends paid to non-controlling interest on subsidiary common stock | ( | ||||||||||||||||||||||||||||
| Balance as of June 29, 2024 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
4
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Operating | |||||||||||
| Net earnings | $ | $ | |||||||||
| Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Non-cash other charges (income) | ( | ||||||||||
| Share-based compensation expenses | |||||||||||
| Loss from the extinguishment of Silver Lake Convertible Debt | |||||||||||
| Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventories | ( | ||||||||||
| Other current assets and contract assets | ( | ( | |||||||||
| Accounts payable, accrued liabilities and contract liabilities | ( | ( | |||||||||
| Other assets and liabilities | ( | ||||||||||
| Deferred income taxes | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing | |||||||||||
| Acquisitions and investments, net | ( | ( | |||||||||
| Proceeds from sales of investments and businesses, net | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Net cash used for investing activities | ( | ( | |||||||||
| Financing | |||||||||||
| Net proceeds from issuance of debt | |||||||||||
| Repayments of debt | ( | ( | |||||||||
| Revolving credit facility renewal fees | ( | ||||||||||
| Issuances of common stock, net of tax | ( | ||||||||||
| Purchases of common stock | ( | ( | |||||||||
| Payments of dividends | ( | ( | |||||||||
| Payments of dividends to non-controlling interests | ( | ( | |||||||||
| Net cash provided by (used for) financing activities | ( | ||||||||||
| Effect of exchange rate changes on total cash and cash equivalents | ( | ||||||||||
| Net increase (decrease) in total cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
| Supplemental Cash Flow Information | |||||||||||
| Cash paid during the period for: | |||||||||||
| Interest paid | $ | $ | |||||||||
| Income and withholding taxes, net of refunds | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
5
| INDEX FOR NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | ||||||||
| Page No. | ||||||||
| Note 1 | ||||||||
| Note 2 | ||||||||
| Note 3 | ||||||||
| Note 4 | ||||||||
| Note 5 | ||||||||
| Note 6 | ||||||||
| Note 7 | ||||||||
| Note 8 | ||||||||
| Note 9 | ||||||||
| Note 10 | ||||||||
| Note 11 | ||||||||
| Note 12 | ||||||||
| Note 13 | ||||||||
| Note 14 | ||||||||
| Note 15 | ||||||||
6
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except as noted)
1.Basis of Presentation
The condensed consolidated financial statements as of June 28, 2025 and for the three and six months ended June 28, 2025 and June 29, 2024 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented.
The Company operates on a 52-week fiscal year, with each fiscal year ending on December 31. With respect to each fiscal quarter, the Company operates on a 13-week fiscal quarter, with all fiscal quarters ending on a Saturday.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2024 (the "Form 10-K"). The results of operations for the three and six months ended June 28, 2025 are not necessarily indicative of the operating results to be expected for the full year.
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Business Overview
The Company manages the business organizationally through two segments: “Products and Systems Integration” and “Software and Services". Within these segments the Company has three principal product lines in which the Company reports net sales: Land Mobile Radio Communications (“LMR” or “LMR Communications”), Video Security and Access Control ("Video"), and Command Center.
•LMR Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and professional and commercial radio (PCR)) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, software and artificial intelligence (AI)-powered analytics that help enable visibility and bring attention to what’s important.
•Command Center: Command center solutions and software applications that unify voice, video and data analytics from public safety agencies, enterprises and the community to create a broad informational view to help simplify workflows and improve the accuracy and speed of decisions.
Subsequent to the quarter end, with the acquisition of Silvus Technologies Holdings Inc. (“Silvus”), the Company will now report net sales from its principal product lines by combining the former LMR Communications and newly acquired Silvus under the new technology name Mission Critical Networks (MCN).
Recent Acquisitions
On May 27, 2025, the Company entered into a purchase and sale agreement with Silvus Technologies Group LLC ("Seller") to acquire Silvus Technologies Holdings Inc. (“Silvus”), which subsequent to the quarter end closed on August 6, 2025, for $4.4 billion in upfront consideration, comprising $4.38 billion in cash, subject to customary adjustments for cash, net working capital, transaction expenses and indebtedness, and $20 million in restricted stock to certain employee equity holders. Additionally, under the terms of the transaction, the Seller will have the potential to earn earnout consideration following the achievement of certain financial targets of up to $150 million for the annual period from July 5, 2026 through July 3, 2027 and up to $450 million for the annual period from July 4, 2027 through July 1, 2028 (with the potential to earn a catch-up earnout consideration based on performance in the annual period from July 4, 2027 through July 1, 2028 if the maximum earnout for the annual period from July 5, 2026 through July 3, 2027 is not earned). The earnout consideration, if any, will be made in shares of common stock. Silvus designs and develops software-defined high-speed mobile ad-hoc network (MANET) technology that enables highly secure data, video and voice communications without the need for fixed infrastructure. This acquisition brings mobile ad-hoc network expertise and new applications to the Company's public safety and enterprise portfolio. This business will be part of both the Products and Systems Integration segment and the Software and Services segment.
7
On March 6, 2025, the Company acquired Theatro, a maker of AI and voice-powered communication and digital workflow software for frontline workers for $173 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $5 million to certain key employees that will be expensed over a service period of three years . The acquisition enhances the Company's portfolio of enterprise technologies by integrating Theatro's AI voice assistant in the Company's complementary workflows across our portfolio, including body cameras, fixed video, panic buttons and radios. This business is part of the Software and Services segment.
On February 21, 2025, the Company acquired RapidDeploy, a provider of cloud-native 911 solutions for public safety for $241 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $6 million to certain key employees that will be expensed over a service period of two years . The acquisition complements the Company's Command Center portfolio of 911 solutions. This business is part of the Software and Services segment.
On October 29, 2024, the Company acquired 3tc Software, a provider of control room software solutions for $23 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $4 million to certain key employees that will be expensed over a service period of one year . The acquisition expands the Company's critical experience and innovation focused on advancing computer-aided dispatch ("CAD") for the U.K.'s public safety agencies. This business is part of the Software and Services segment.
On July 1, 2024, the Company acquired Noggin, a global provider of critical event management ("CEM") software for $92 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $19 million to certain key employees that will be expensed over a service period of three years . This acquisition enhances the Company's portfolio by adding operational resilience and CEM capabilities, which help enterprises and critical infrastructure anticipate, prepare for and efficiently respond to incidents. The business is part of the Software and Services segment.
On July 1, 2024, the Company acquired a company that provides vehicle location and management solutions for $132 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $3 million to certain key employees that will be expensed over a service period of three years . The acquisition expands the Company's video solutions within the Software and Services segment.
On February 13, 2024, the Company acquired Silent Sentinel, a provider of specialized, long-range cameras, for $37 million, net of cash acquired. This acquisition complements the Company's portfolio of fixed video cameras, expanding its footprint with government and critical infrastructure customers, and strengthens the Company's position as a global leader in end-to-end video security solutions. The business is part of the Products and Systems Integration segment.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2024-03, "Disaggregation of Income Statement Expenses" (DISE), to enhance disclosures relating to key income statement expense topics. This was subsequently amended by ASU No. 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date," which clarified the effective dates. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its disclosures.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which expands disclosures in an entity's income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company anticipates that it will have additional disclosures regarding cash taxes and the income tax rate reconciliation once it adopts this ASU.
Recently Adopted Accounting Pronouncements
8
2. Revenue from Contracts with Customers
Disaggregation of Revenue
The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and six months ended June 28, 2025 and June 29, 2024, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
| Regions: | |||||||||||||||||||||||||||||||||||
| North America | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Major Products and Services: | |||||||||||||||||||||||||||||||||||
| LMR Communications | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Video | |||||||||||||||||||||||||||||||||||
| Command Center | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Customer Types: | |||||||||||||||||||||||||||||||||||
| Direct | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Indirect | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
| Regions: | |||||||||||||||||||||||||||||||||||
| North America | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Major Products and Services: | |||||||||||||||||||||||||||||||||||
| LMR Communications | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Video | |||||||||||||||||||||||||||||||||||
| Command Center | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Customer Types: | |||||||||||||||||||||||||||||||||||
| Direct | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Indirect | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
9
Remaining Performance Obligations
Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. The transaction value associated with remaining performance obligations which were not yet satisfied as of June 28, 2025 was $8.8 billion. A total of $3.4 billion was from Products and Systems Integration performance obligations that were not yet satisfied as of June 28, 2025, of which $1.9 billion is expected to be recognized in the next twelve months . The remaining amounts will generally be satisfied over time as systems are implemented. Remaining performance obligations from the Products and Systems Integration segment are equal to disclosed backlog for the segment. A total of $5.4 billion was from Software and Services performance obligations that were not yet satisfied as of June 28, 2025. The determination of Software and Services performance obligations that are not satisfied takes into account a contract term that may be limited by the customer’s ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. As a result, remaining performance obligations from the Software and Services segment may be less than disclosed backlog in the Software and Services segment due to multi-year service contracts with termination for convenience clauses. The Company expects to recognize $1.8 billion from unsatisfied Software and Services performance obligations over the next twelve months , with the remaining performance obligations generally to be recognized over time as services are performed and software is implemented.
Contract Balances
| (In millions) | June 28, 2025 | December 31, 2024 | |||||||||||||||||||||
| Accounts receivable, net | $ | $ | |||||||||||||||||||||
| Contract assets | |||||||||||||||||||||||
| Contract liabilities | |||||||||||||||||||||||
| Non-current contract liabilities | |||||||||||||||||||||||
Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a Contract asset or Contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year.
Revenue recognized during the three months ended June 28, 2025 which was previously included in Contract liabilities as of March 29, 2025 was $663 million, compared to $553 million of revenue recognized during the three months ended June 29, 2024 which was previously included in Contract liabilities as of March 30, 2024. Revenue recognized during the six months ended June 28, 2025 which was previously included in Contract liabilities as of December 31, 2024 was $886 million, compared to $908 million recognized during the six months ended June 29, 2024 which was previously included in Contract liabilities as of December 31, 2023. Revenue of $5 million was recognized during the three months ended June 28, 2025 related to performance obligations satisfied, or partially satisfied, in previous periods, compared to $11 million of reversals for the three months ended June 29, 2024, primarily driven by changes in the estimates of progress on system contracts. Revenue of $6 million was reversed during the six months ended June 28, 2025 related to revenue recognized for performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $18 million of reversals for the six months ended June 29, 2024.
There were no
Contract Cost Balances
| (In millions) | June 28, 2025 | December 31, 2024 | |||||||||||||||||||||
| Current contract cost assets | $ | $ | |||||||||||||||||||||
| Non-current contract cost assets | |||||||||||||||||||||||
Amortization of contract cost assets was $13 million and $26 million for the three and six months ended June 28, 2025, respectively, and $12 million and $25 million for the three and six months ended June 29, 2024, respectively.
10
3. Leases
Components of Lease Expense
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions) | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | |||||||||||||||||||
| Lease expense: | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Variable cost | |||||||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Net lease expense from operating leases | $ | $ | $ | $ | |||||||||||||||||||
Lease Assets and Liabilities
| (in millions) | Statement Line Classification | June 28, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Right-of-use lease assets | Operating lease assets | $ | $ | |||||||||||||||||||||||
| Accrued liabilities | ||||||||||||||||||||||||||
| Operating lease liabilities | Operating lease liabilities | |||||||||||||||||||||||||
Other Information Related to Leases
| Six Months Ended | |||||||||||||||||
| (in millions) | June 28, 2025 | June 29, 2024 | |||||||||||||||
| Supplemental cash flow information: | |||||||||||||||||
| Net cash used for operating activities related to operating leases | $ | $ | |||||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | |||||||||||||||||
| June 28, 2025 | December 31, 2024 | ||||||||||
| Weighted average remaining lease terms (years) | |||||||||||
| Weighted average discount rate: | % | % | |||||||||
Future Lease Payments
| June 28, 2025 | |||||||||||||||||
| (in millions) | Operating Leases | ||||||||||||||||
| Remainder of 2025 | $ | ||||||||||||||||
| 2026 | |||||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| Total lease payments | |||||||||||||||||
| Less: interest | |||||||||||||||||
| Present value of lease liabilities | $ | ||||||||||||||||
11
4. Other Financial Data
Statements of Operations Information
Other Charges
Other charges included in Operating earnings consist of the following:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Other charges (income): | |||||||||||||||||||||||
| Intangibles amortization (Note 15) | $ | $ | $ | $ | |||||||||||||||||||
| Reorganization of business (Note 14) | |||||||||||||||||||||||
| Operating lease asset impairments | |||||||||||||||||||||||
| Acquisition-related transaction fees | |||||||||||||||||||||||
| Legal settlements | |||||||||||||||||||||||
| Gain on Hytera litigation | ( | ( | |||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
During the six months ended June 28, 2025, the Company recognized a gain on the Hytera litigation of $20 million for amounts recovered through legal proceedings due to theft of the Company's trade secrets. Refer to "Hytera Civil Litigation" within "Note 12: Commitments and Contingencies" in this "Part 1 — Financial Information" of this Form 10-Q.
Other Income (Expense)
Interest expense, net, and Other, net, both included in Other income (expense), consist of the following:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
Interest, net: | |||||||||||||||||||||||
| Interest expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Interest income | |||||||||||||||||||||||
| $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other, net: | |||||||||||||||||||||||
| Net periodic pension and postretirement benefit (Note 8) | $ | $ | $ | $ | |||||||||||||||||||
| Loss from the extinguishment of Silver Lake Convertible Debt | ( | ||||||||||||||||||||||
| Investment impairments | ( | ||||||||||||||||||||||
| Foreign currency gain (loss) | ( | ( | |||||||||||||||||||||
| Gain (loss) on derivative instruments (Note 6) | ( | ( | |||||||||||||||||||||
| Fair value adjustments to equity investments | ( | ( | |||||||||||||||||||||
| Assessments on uncertain tax positions | ( | ( | |||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||
| $ | $ | $ | $ | ( | |||||||||||||||||||
12
Earnings Per Common Share
Basic and diluted earnings per common share from net earnings attributable to Motorola Solutions, Inc. are computed as follows:
| Amounts attributable to Motorola Solutions, Inc. common stockholders | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
Basic earnings per common share: | |||||||||||||||||||||||
| Earnings | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Per share amount | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||||
| Earnings | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||
| Add effect of dilutive securities: | |||||||||||||||||||||||
| Share-based awards | |||||||||||||||||||||||
| Diluted weighted average common shares outstanding | |||||||||||||||||||||||
| Per share amount | $ | $ | $ | $ | |||||||||||||||||||
In the computation of diluted earnings per common share for the three months ended June 28, 2025, the assumed exercise of 0.1 million options and 0.1 million awards subject to performance conditions, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.
In the computation of diluted earnings per common share for the six months ended June 28, 2025, the assumed exercise of 0.1 million options and 0.1 million awards subject to performance conditions, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.
In the computation of diluted earnings per common share for the three months ended June 29, 2024, the assumed exercise of 0.3 million options, inclusive of 0.2 million options subject to market based contingent option agreements, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.
In the computation of diluted earnings per common share for the six months ended June 29, 2024, a total of 0.5 million shares related to the 1.75 % senior convertible notes issued to Silver Lake Partners ("Silver Lake Convertible Debt") were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. In addition, the assumed exercise of 0.3 million options, inclusive of 0.2 million options subject to market based contingent option agreements were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.
Balance Sheet Information
Accounts Receivable, Net
Accounts receivable, net, consists of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Accounts receivable | $ | $ | |||||||||
| Less allowance for credit losses | ( | ( | |||||||||
| $ | $ | ||||||||||
Inventories, Net
Inventories, net, consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Work-in-process and production materials | |||||||||||
| Less inventory reserves | ( | ( | |||||||||
| $ | $ | ||||||||||
13
Other Current Assets
Other current assets consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Current contract cost assets (Note 2) | $ | $ | |||||||||
| Contractor receivables | |||||||||||
| Tax-related deposits | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Property, Plant and Equipment, Net
Property, plant and equipment, net, consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Land | $ | $ | |||||||||
| Leasehold improvements | |||||||||||
| Machinery and equipment | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
Depreciation expense was $47 million for both the three months ended June 28, 2025 and June 29, 2024. Depreciation expense for the six months ended June 28, 2025 and June 29, 2024 was $91 million and $90 million, respectively.
Investments
Investments consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Common stock | $ | $ | |||||||||||||||||||||
| Strategic investments | |||||||||||||||||||||||
| Company-owned life insurance policies | |||||||||||||||||||||||
| Equity method investments | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
Other Assets
| June 28, 2025 | December 31, 2024 | ||||||||||
| Defined benefit plan assets | $ | $ | |||||||||
| Non-current contract cost assets (Note 2) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
14
Accounts Payable
The Company utilizes a supplier finance program which provides our suppliers the ability to accelerate payment on the Company's invoices beyond the stated payment terms. Under the terms of this program, the Company agrees to pay an intermediary the stated amount of confirmed invoices on the stated maturity dates of the invoices, and the supplier is able to negotiate earlier payment terms with the intermediary. The Company or the intermediary may terminate their agreement at any time upon 60 days' notice. The Company does not provide any forms of guarantees under this arrangement. Supplier participation in the program is solely at the supplier's discretion, and the participating suppliers negotiate their arrangements directly with the intermediary. The Company has no economic interest in a supplier's decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The stated invoice payment terms range from 75 to 120 days from the invoice date and are considered commercially reasonable.
The Company's outstanding amounts related to the suppliers participating in this program was $38
Accrued Liabilities
Accrued liabilities consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Compensation | $ | $ | |||||||||
| Tax liabilities | |||||||||||
| Dividend payable | |||||||||||
| Trade liabilities | |||||||||||
| Operating lease liabilities (Note 3) | |||||||||||
| Customer reserves | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Other Liabilities
Other liabilities consist of the following:
| June 28, 2025 | December 31, 2024 | ||||||||||
| Defined benefit plans (Note 8) | $ | $ | |||||||||
| Non-current contract liabilities (Note 2) | |||||||||||
| Unrecognized tax benefits (Note 7) | |||||||||||
| Deferred income taxes (Note 7) | |||||||||||
| Environmental reserve | |||||||||||
| Deferred compensation | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Stockholders’ Equity
Share Repurchase Program: During the three and six months ended June 28, 2025, the Company repurchased approximately 0.6 million and 1.3 million shares at an average price of $414.42 and $427.74 per share for an aggregate amount of $218 million and $543 million, respectively.
Payment of Dividends: During the three months ended June 28, 2025 and June 29, 2024, the Company paid $182 million and $163 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $182 million in cash dividends to holders of its common stock. During the six months ended June 28, 2025 and June 29, 2024, the Company paid $364 million and $326 million, respectively, in cash dividends to holders of its common stock.
15
Accumulated Other Comprehensive Loss
The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and six months ended June 28, 2025 and June 29, 2024:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Foreign Currency Translation Adjustments: | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassification adjustment | ( | ( | |||||||||||||||||||||
| Tax benefit (expense) | ( | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
| Balance at end of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Derivative Instruments: | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income before reclassification adjustment | |||||||||||||||||||||||
| Other comprehensive income before reclassification adjustment, net of tax | |||||||||||||||||||||||
| Other comprehensive income, net of tax | $ | $ | |||||||||||||||||||||
| Balance at end of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Defined Benefit Plans: | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassification adjustment | ( | ||||||||||||||||||||||
| Tax expense (benefit) | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassification adjustment, net of tax | ( | ||||||||||||||||||||||
| Reclassification adjustment - Actuarial net losses into Other income (Note 8) | |||||||||||||||||||||||
| Reclassification adjustment - Prior service benefits into Other income (Note 8) | |||||||||||||||||||||||
| Tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Reclassification adjustments into Net earnings, net of tax | |||||||||||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||||||||
| Balance at end of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Total Accumulated other comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
16
5. Debt and Credit Facilities
| June 28, 2025 | December 31, 2024 | ||||||||||
| $ | $ | ||||||||||
| Adjustments for unamortized gains on interest rate swap terminations | ( | ( | |||||||||
| Less: current portion | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
On June 16, 2025, the Company issued $600 million of 4.85 % senior notes due 2030 (“2030 Notes”), $500 million of 5.2 % senior notes due 2032 (“2032 Notes”) and $900 million of 5.55 % senior notes due 2035 (“2035 Notes”). The Company recognized net proceeds of approximately $2.0 billion after debt issuance costs and discounts. The proceeds from these notes were used to fund a portion of the acquisition of Silvus.
On May 27, 2025, the Company obtained financing commitments for $2.5 billion of senior unsecured delayed draw term loan facilities, comprised of a $1.75 billion 364-day facility and a $750 million three year facility. Upon issuance of 2030 Notes, 2032 Notes, and 2035 Notes, the financing commitments under the 364-day facility were reduced to $750 million. Subsequent to the quarter, on July 21, 2025 the Company entered into credit agreements for a $750 million 364-day delayed draw term loan and a $750 million three year delayed draw term loan, and on August 6, 2025 the Company borrowed $750 million under the 364-day delayed draw term loan and $750 million under the three year delayed draw term loan to fund a portion of the acquisition of Silvus.
During the three months ended June 28, 2025, the Company repaid the $252 million aggregate principal amount of the 7.5 % senior notes due 2025.
As of June 28, 2025, $70 million of 6.5 % debentures due 2025, which mature in September 2025, were presented as the Current portion of long-term debt within the Company's Condensed Consolidated Balance Sheets, as the debentures mature within the next twelve months.
On April 25, 2025, the Company entered into a $2.25 billion syndicated, unsecured revolving credit facility maturing in April 2030 which can be used for general corporate purposes and letters of credit (the "2025 Motorola Solutions Credit Agreement"), which replaced the Company's $2.25 billion 2021 Motorola Solutions Credit Agreement scheduled to mature in March 2026. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the Secured Overnight Financing Rate (SOFR), at the Company's option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2025 Motorola Solutions Credit Agreement. The Company was in compliance with its financial covenants as of June 28, 2025.
The Company has an unsecured commercial paper program, backed by the 2025 Motorola Solutions Credit Agreement, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. The notes are issued at a zero-coupon rate and are issued at a discount which reflects the interest component. At maturity, the notes are paid back in full including the interest component. The notes are not redeemable prior to maturity. As of June 28, 2025 the Company had no outstanding debt under the commercial paper program. Subsequent to the quarter, the Company utilized its commercial paper program as a source of short-term liquidity to partially fund the acquisition of Silvus.
17
6. Risk Management
Foreign Currency Risk
The Company had outstanding foreign exchange contracts with notional amounts totaling $1.3 billion and $1.0 billion for the periods ended June 28, 2025 and December 31, 2024, respectively. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.
The following table shows the five
| Notional Amount | |||||||||||
| Net Buy (Sell) by Currency | June 28, 2025 | December 31, 2024 | |||||||||
| British pound | $ | $ | |||||||||
| Euro | |||||||||||
| Australian dollar | ( | ( | |||||||||
| Canadian dollar | |||||||||||
| Chinese renminbi | ( | ( | |||||||||
Counterparty Risk
The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of June 28, 2025, all of the counterparties had investment grade credit ratings. As of June 28, 2025, the Company had $10 million of exposure to aggregate credit risk with all counterparties.
Derivative Financial Instruments
The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of June 28, 2025 and December 31, 2024:
| Fair Values of Derivative Instruments | |||||||||||
| June 28, 2025 | Other Current Assets | Accrued Liabilities | |||||||||
| Derivatives designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Derivatives not designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | |||||||||||
| Equity swap contracts | |||||||||||
| Total derivatives | $ | $ | |||||||||
| Fair Values of Derivative Instruments | |||||||||||
| December 31, 2024 | Other Current Assets | Accrued Liabilities | |||||||||
| Derivatives designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Derivatives not designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | |||||||||||
| Equity swap contracts | |||||||||||
| Total derivatives | $ | $ | |||||||||
18
The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended June 28, 2025 and June 29, 2024:
| Financial Statement Location | Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| Derivatives | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||
| Foreign exchange contracts | Accumulated other comprehensive income (loss) | $ | ( | $ | $ | ( | $ | |||||||||||||||||||
| Amortized hedge income | Other income (expense) | |||||||||||||||||||||||||
| Treasury rate lock | Accumulated other comprehensive income (loss) | |||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||
| Foreign exchange contracts | Other income (expense) | $ | $ | ( | $ | $ | ( | |||||||||||||||||||
| Equity swap contracts | Selling, general and administrative expenses | |||||||||||||||||||||||||
Net Investment Hedges
The Company uses foreign exchange forward and option contracts to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investments in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of Foreign currency translation adjustments within Other comprehensive income to offset a portion of the change in translated value of the net investments being hedged, until the investments are sold or liquidated. As of June 28, 2025, the Company had €160 million of net investment hedges in certain Euro functional subsidiaries and £50 million of net investment hedges in a British pound functional subsidiary.
The Company excludes the difference between the spot rate and the forward rate of the forward contracts and initial time value of the options from its assessment of hedge effectiveness. The effect of the forward points recognized in forward contracts and the initial time value of the option contracts are amortized on a straight-line basis and recognized through interest expense within Other income (expense) in the Condensed Consolidated Statement of Operations.
Equity Swap Contracts
The Company uses equity swap contracts which serve as economic hedges against volatility within the equity markets, impacting the Company's deferred compensation plan obligations. These contracts are not designated as hedges for accounting purposes. Unrealized gains and losses on these contracts are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The notional amount of these contracts as of June 28, 2025 was $20 million.
Treasury Rate Lock
In 2023, the Company entered into treasury rate agreements which locked in the interest rate for $200 million in future debt issuances. The treasury rate lock agreements were designated and qualified as cash flow hedges. During the six months ended June 29, 2024, the Company issued $900 million of 5.4 % senior notes due 2034 (the "2034 notes"). The treasury rate lock agreements were terminated upon the issuance of the 2034 notes for a net settlement loss of $8 million. The accumulated loss recorded in Accumulated other comprehensive income (loss) will be reclassified to interest expense on a straight-line basis over the ten year term of the 2034 notes.
19
7. Income Taxes
At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.
The following table provides details of income taxes:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Net earnings before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Effective tax rate | % | % | % | % | |||||||||||||||||||
The effective tax rate for the three months ended June 28, 2025 of 24 % was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 28, 2025 of 23 % was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation.
The effective tax rate for the three months ended June 29, 2024 of 23 % was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by the tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions and excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 29, 2024 of 17 % was lower than the U.S. federal statutory tax rate of 21% primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return, and excess tax benefits of share-based compensation, offset by the non-tax deductible loss on the extinguishment of the Silver Lake Convertible Debt in the first quarter of 2024 and state tax expense.
The effective tax rate for the three months ended June 28, 2025 of 24 % was higher than the effective tax rate for the three months ended June 29, 2024 of 23 %, primarily due to tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024 and lower excess tax benefits of share-based compensation in 2025. The effective tax rate for the six months ended June 28, 2025 of 23 % was higher than the effective tax rate for the six months ended June 29, 2024 of 17 %, primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024, offset by the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024.
Subsequent to quarter end, on July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law, introducing a broad range of changes to the U.S. corporate income tax framework. The legislation includes business provisions that may impact the Company's tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. The Company is currently evaluating the potential effects of these changes on its financial statements, inclusive of its income tax provision, income tax payable, and deferred tax asset balances. Due to the timing of the bill's enactment, the financial impact of this legislation is not reflected in this quarter's results. The Company will recognize the effects of this legislation in accordance with the enactment and effective dates of the applicable provisions.
20
8. Retirement and Other Employee Benefits
Pension and Postretirement Health Care Benefits Plans
The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows:
| U.S. Pension Benefit Plans | Non-U.S. Pension Benefit Plans | Postretirement Health Care Benefits Plan | |||||||||||||||||||||||||||||||||
| Three Months Ended | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | |||||||||||||||||||||||||||||
| Interest cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of: | |||||||||||||||||||||||||||||||||||
| Unrecognized net loss | |||||||||||||||||||||||||||||||||||
| Unrecognized prior service cost | |||||||||||||||||||||||||||||||||||
| Net periodic pension cost (benefits) | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
| U.S. Pension Benefit Plans | Non-U.S. Pension Benefit Plans | Postretirement Health Care Benefits Plan | |||||||||||||||||||||||||||||||||
| Six Months Ended | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | |||||||||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of: | |||||||||||||||||||||||||||||||||||
| Unrecognized net loss | |||||||||||||||||||||||||||||||||||
| Unrecognized prior service cost (benefit) | ( | ( | |||||||||||||||||||||||||||||||||
| Net periodic pension cost (benefits) | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||
9. Share-Based Compensation Plans
Compensation expense for the Company’s share-based plans was as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Share-based compensation expense included in: | |||||||||||||||||||||||
| Costs of sales | $ | $ | $ | $ | |||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Research and development expenditures | |||||||||||||||||||||||
| Share-based compensation expense included in Operating earnings | |||||||||||||||||||||||
| Tax benefit | ( | ( | ( | ( | |||||||||||||||||||
| Share-based compensation expense, net of tax | $ | $ | $ | $ | |||||||||||||||||||
| Decrease in basic earnings per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Decrease in diluted earnings per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
During the six months ended June 28, 2025, the Company granted 0.5 million RSUs, 0.1 million performance stock units (PSUs) and 0.04 million market stock units (MSUs) with an aggregate grant-date fair value of $186 million, $24 million and $17 million, respectively, and 0.1 million stock options and 0.1 million performance options (POs) with an aggregate grant-date fair value of $8 million and $17 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years .
21
10. Fair Value Measurements
The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of June 28, 2025 and December 31, 2024 were as follows:
| June 28, 2025 | Level 1 | Level 2 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | ||||||||||||||||||||
| Equity swap contracts | |||||||||||||||||||||||
| Common stock | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | ||||||||||||||||||||
| December 31, 2024 | Level 1 | Level 2 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | ||||||||||||||||||||
| Common stock | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | ||||||||||||||||||||
| Equity swap contracts | |||||||||||||||||||||||
The Company had no
At June 28, 2025 and December 31, 2024, the Company had $1.5 billion and $1.2 billion, respectively, of investments in money market government and U.S. treasury funds classified (Level 1) as Cash and cash equivalents in its Condensed Consolidated Balance Sheets. The money market funds had quoted market prices that are equivalent to par.
Using quoted market prices and market interest rates, the fair value of the Company's long-term debt as of June 28, 2025 was $7.6 billion. The fair value of long-term debt at December 31, 2024 was $5.8 billion.
All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.
11. Sales of Receivables
Sales of Receivables
The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended June 28, 2025 and June 29, 2024:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Long-term receivables sales proceeds | |||||||||||||||||||||||
22
12. Commitments and Contingencies
Legal Matters
Hytera Civil Litigation
In 2017, the Company filed a complaint against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, "Hytera"), in the U.S. District Court for the Northern District of Illinois (the "District Court"), alleging trade secret theft and copyright infringement, and seeking injunctive relief. In 2020, a jury decided in the Company's favor and awarded the Company $543.7 million, plus $51.1 million in pre-judgment interest and $2.6 million in costs, as well as $34.2 million in attorneys' fees.
Subsequently, the District Court ordered Hytera to pay the Company a forward-looking reasonable royalty on products that use the Company’s stolen trade secrets, setting royalty rates for Hytera's sale of relevant products from July 1, 2019 forward. The District Court then ordered Hytera to make royalty payments into a third-party escrow, while it reviewed Hytera's motion to modify the royalty order, which the District Court eventually denied. Hytera refused to make all of its royalty payments. The Company filed a motion to hold Hytera in civil contempt for failing to make every royalty payment, which the District Court granted in 2023. As a result, on September 1, 2023, Hytera made a payment of $56 million into the third-party escrow, in addition to subsequent de minimis quarterly royalty payments between October 2022 and November 2024. The aggregate amount paid into escrow of approximately $61 million was released to the Company on November 26, 2024 and was recorded as a gain within Other charges within the Consolidated Statement of Operations.
Following the initial District Court judgment in the Company's favor, both parties appealed to the U.S. Court of Appeals for the Seventh Circuit (the "Court of Appeals"). On July 2, 2024, the Court of Appeals affirmed the District Court's award of $407.4 million in damages under the Defend Trade Secrets Act, directed the District Court to recalculate and reduce its award of $136.3 million in copyright infringement damages, and instructed the District Court to reconsider its denial of the Company's request for an injunction. In all other respects, the Court of Appeals affirmed the judgment of the District Court. On October 4, 2024, the Court of Appeals denied Hytera's motion for rehearing. The case was remanded to the District Court for further action per the Court of Appeals' decision. On January 2, 2025, Hytera filed a petition for writ of certiorari with the Supreme Court of the United States, which was subsequently denied on February 24, 2025. The issues of copyright recalculation and injunction are currently briefed. The District Court is seeking to schedule a hearing on these issues for sometime later in 2025.
On March 4, 2025, Hytera made a partial payment toward the judgment of approximately $10 million, and an additional payment of approximately $10 million on April 25, 2025. Both payments were recorded as a gain within Other charges within the Consolidated Statement of Operations. Subsequent to quarter end, the Company received additional payments of approximately $41 million. The Company continues to seek collection of the judgment through the ongoing legal process.
In 2024, the parties engaged in competing litigation in the District Court and a court in China related to the possible continued use by Hytera of the Company’s trade secrets in Hytera’s currently shipping products. On April 2, 2024, the District Court held Hytera in civil contempt, and issued a worldwide sales injunction of certain Hytera products and a daily fine for Hytera's failure to withdraw its competing litigation in China. On April 16, 2024, the Court of Appeals granted Hytera's motion for an emergency stay of the contempt sanctions, pending its review of the District Court's various orders related to the competing litigation and contempt sanctions. The District Court held hearings in August 2024, concerning whether Hytera's currently shipping products continue to misuse the Company's trade secrets and copyrighted source code. The issue is currently under consideration by the District Court.
Hytera Criminal Litigation
On January 13, 2025, Hytera pleaded guilty to one federal felony count of conspiracy to steal the Company's trade secrets in a criminal action brought by the U.S. Department of Justice against Hytera and several of its employees in the District Court. Hytera's sentencing has been scheduled for November 24th and 25th, 2025. Pursuant to the plea agreement, Hytera's sentence may include a fine to be paid to the government and restitution to be paid to the Company in the amount to be determined by the District Court.
23
13. Segment Information
Significant Segment Expenses
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | ||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross margin | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development expenditures | |||||||||||||||||||||||||||||||||||||||||||||||
| Other charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Total other expense | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | ||||||||||||||||||||||||||||||||||||||||||
| Net Sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Cost of Sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross Margin | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development expenditures | |||||||||||||||||||||||||||||||||||||||||||||||
| Other charges | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Total other expense | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Capital Expenditures by Segment
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Products and Systems Integration | $ | $ | $ | ||||||||||||||||||||
| Software and Services | |||||||||||||||||||||||
| $ | $ | $ | |||||||||||||||||||||
Depreciation Expense by Segment
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Products and Systems Integration | $ | $ | $ | $ | |||||||||||||||||||
| Software and Services | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
24
14. Reorganization of Business
2025 Charges
During the three months ended June 28, 2025, the Company recorded net reorganization of business charges of $14 million, including $8 million of charges in Other charges and $6 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $13 million related to employee separation costs and $1 million related to exit costs.
During the six months ended June 28, 2025, the Company recorded net reorganization of business charges of $31 million, including $20 million of charges in Other charges and $11 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $31 million were charges of $33 million related to employee separation costs and $1 million related to exit costs, partially offset by $3 million of reversals for employee separation accruals no longer needed.
The following table displays the net charges incurred by segment:
| June 28, 2025 | Three Months Ended | Six Months Ended | |||||||||
| Products and Systems Integration | $ | $ | |||||||||
| Software and Services | |||||||||||
| $ | $ | ||||||||||
Reorganization of Businesses Accruals
| January 1, 2025 | Additional Charges | Adjustments | Amount Used | June 28, 2025 | |||||||||||||||||||||||||
| Employee separation costs | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
| Exit costs | ( | ||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Exit Costs
At January 1, 2025, the Company had an accrual of $1 million for exit costs, related to the Company's exit of the Emergency Service Network contract with the U.K. Home Office. The $1 million of exit costs are recorded in Accrued liabilities in the Company's Condensed Consolidated Balance Sheets at June 28, 2025, and are expected to be paid within one year.
Employee Separation Costs
At January 1, 2025, the Company had an accrual of $27 million for employee separation costs. The 2025 additional charges of $33 million represent severance costs for approximately 470 employees. The adjustment of $3 million reflects reversals for accruals no longer needed. The $33 million used reflects cash payments to severed employees. The remaining accrual of $24 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at June 28, 2025, is expected to be paid, primarily within one year, to approximately 670 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.
2024 Charges
During the three months ended June 29, 2024, the Company recorded net reorganization of business charges of $4 million, including $4 million of charges in Other charges in the Company's Condensed Consolidated Statements of Operations. Included in the $4 million were charges of $10 million related to employee separation costs, partially offset by $2 million of reversals for employee separation accruals and $4 million of reversals for exit cost accruals that are no longer needed.
During the six months ended June 29, 2024, the Company recorded net reorganization of business charges of $14 million, including $11 million of charges in Other charges and $3 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $22 million related to employee separation costs, partially offset by $4 million of reversals for exit cost accruals no longer needed and $4 million of reversals for employee separation accruals no longer needed.
The following table displays the net charges incurred by segment:
| June 29, 2024 | Three Months Ended | Six Months Ended | |||||||||
| Products and Systems Integration | $ | $ | |||||||||
| Software and Services | ( | ||||||||||
| $ | $ | ||||||||||
25
15. Intangible Assets and Goodwill
On March 6, 2025, the Company acquired Theatro, a maker of AI and voice-powered communication and digital workflow software for frontline workers for $173 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value price of $5 million to certain key employees that will be expensed over a service period of three years . The acquisition enhances the Company's portfolio of enterprise technologies by integrating Theatro's AI voice assistant in the Company's complementary workflows across our portfolio, including body cameras, fixed video, panic buttons and radios. The Company recognized $132 million of goodwill, $48 million of identifiable intangible assets and $7 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $15 million of customer relationships and $32 million of developed technology and will be amortized over a period of , and eleven year s , respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, intangible assets, net liabilities and goodwill may be subject to change.
On February 21, 2025, the Company acquired RapidDeploy, a provider of cloud-native 911 solutions for public safety for $241 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $6 million to certain key employees that will be expensed over a service period of two years . The acquisition complements the Company's Command Center portfolio of 911 solutions. The Company recognized $156 million of goodwill, $117 million of identifiable intangible assets, and $32 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $6 million of trade names, $36 million of customer relationships and $75 million of developed technology and will be amortized over a period of , and eighteen years , respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, intangible assets, net liabilities and goodwill may be subject to change.
On October 29, 2024, the Company acquired 3tc Software, a provider of control room software solutions for $23 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $4 million to certain key employees that will be expensed over a service period of one year . The acquisition expands the Company's critical experience and innovation focused on advancing CAD for the U.K.'s public safety agencies. The Company recognized $15 million of goodwill, $11 million of identifiable intangible assets, and $3 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as $11 million of developed technology and will be amortized over a period of seven years . The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net liabilities and goodwill may be subject to change.
On July 1, 2024, the Company acquired Noggin, a global provider of CEM software for $92 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $19 million to certain key employees that will be expensed over a service period of three years . This acquisition enhances the Company's portfolio by adding operational resilience and CEM capabilities, which help enterprises and critical infrastructure anticipate, prepare for and efficiently respond to incidents. The Company recognized $50 million of goodwill, $53 million of identifiable intangible assets, and $11 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $7 million of customer relationships and $45 million of developed technology and will be amortized over a period of , and thirteen years , respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net liabilities and goodwill may be subject to change.
On July 1, 2024, the Company acquired a company that provides vehicle location and management solutions for $132 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $3 million to certain key employees that will be expensed over a service period of three years . The Company recognized $62 million of goodwill, $65 million of identifiable intangible assets and $5 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $11 million of trade names, $51 million of customer relationships and $3 million of developed technology and will be amortized over a period of , and six years , respectively. The acquisition expands the Company's video solutions within the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net assets and goodwill may be subject to change.
On February 13, 2024, the Company acquired Silent Sentinel, a provider of specialized, long-range cameras, for $37 million, net of cash acquired. This acquisition complements the Company's portfolio of fixed video cameras, expanding its footprint with government and critical infrastructure customers, and strengthens the Company's position as a global leader in end-to-end video security solutions. The Company recognized $16 million of goodwill, $22 million of identifiable intangible assets and $1 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $10 million of customer relationships and $11 million of developed technology and will be amortized over a period of , and ten years , respectively. The business is a part of the Products and Systems Integration segment. The purchase accounting was completed as of the first quarter of 2025.
26
Intangible Assets
| June 28, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
| Developed technology | $ | $ | $ | $ | |||||||||||||||||||
| Customer-related | |||||||||||||||||||||||
| Other intangibles | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Amortization expense on intangible assets was $39 million and $76 million for the three and six months ended June 28, 2025, respectively. Amortization expense on intangible assets was $36 million and $76 million for the three and six months ended June 29, 2024, respectively. As of June 28, 2025, annual amortization expense is estimated to be $154 million in 2025, $148 million in 2026, $138 million in 2027, $137 million in 2028, $125 million in 2029 and $122 million in 2030.
Amortized intangible assets were comprised of the following by segment:
| June 28, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
| Products and Systems Integration | $ | $ | $ | $ | |||||||||||||||||||
| Software and Services | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Goodwill
The Company performed its annual assessment of goodwill for impairment as of the last day of the third quarter. The following table displays a roll-forward of the carrying amount of goodwill by segment from January 1, 2025 to June 28, 2025:
| Products and Systems Integration | Software and Services | Total | |||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | ||||||||||||||
| Goodwill acquired | |||||||||||||||||
| Purchase accounting adjustments | ( | ( | |||||||||||||||
| Foreign currency | |||||||||||||||||
| Balance as of June 28, 2025 | $ | $ | $ | ||||||||||||||
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of Motorola Solutions, Inc. (“Motorola Solutions,” the “Company,” “we,” “our,” or “us”) for the three and six months ended June 28, 2025 and June 29, 2024, as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "Form 10-K").
Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q for the quarter ended June 28, 2025 (this “Form 10-Q”) which are not historical in nature are forward-looking statements within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “aims,” “estimates” and similar expressions. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this Form 10-Q. Some of these risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of the Form 10-K, and those described elsewhere in our other SEC filings. Forward-looking statements include, but are not limited to, statements included in: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the impact of global tariffs and volatility in the global supply chain and our expected ability to mitigate increased costs related thereto; (b) the impact of acquisitions and other investments on our business; (c) the impact of existing and future laws, regulations, international treaties and industry standards relating to climate change and other environmental and social impacts on our business; (d) market growth, demand, spending and resulting opportunities; (e) industry growth and demand, including opportunities resulting from such growth; (f) expected impacts to operating leverage; (g) the growth of sales opportunities in our Products and Systems Integration and Software and Services segments; (h) the return of capital to shareholders through dividends and/or repurchasing shares; (i) the impact and success of our business strategy and portfolio; (j) future payments, charges, and use of accruals associated with our reorganization of business programs and employee separation costs; (k) our ability and cost to repatriate funds; (l) the liquidity of our investments; (m) our ability and cost to access the capital markets; (n) our ability to borrow and the amount available under our credit facilities; (o) adequacy of internal resources to fund expected working capital, capital expenditure and cash requirements; (p) expected payments pursuant to commitments under agreements and other obligations in the short-term and long-term; (q) the ability to meet minimum purchase obligations (r) the impact of contractual damage claims exceeding the underlying contract value; (s) our ability to sell accounts receivable and the terms and amounts of such sales; (t) the outcome and effect of ongoing legal proceedings; (u) requests for vendor financing; and (v) the impact of the adoption of accounting pronouncements on our financial results; (2) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency risk; (b) future hedging activity and expectations of the Company; and (3) “Legal Proceedings,” about the ultimate disposition of legal matters and timing. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except as legally required.
Executive Overview
Business Overview
The Company manages the business organizationally through two segments: “Products and Systems Integration” and “Software and Services." Within these segments the Company has three principal product lines in which the Company reports net sales: Land Mobile Radio Communications (“LMR” or “LMR Communications”), Video Security and Access Control ("Video") and Command Center.
•LMR Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and professional and commercial radio (PCR)) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, software and artificial intelligence (AI)-powered analytics that help enable visibility and bring attention to what’s important.
•Command Center: Command center solutions and software applications that unify voice, video, data and analytics from public safety agencies, enterprises and the community to create a broad informational view to help simplify workflows and improve the accuracy and speed of decisions.
Subsequent to the quarter end, with the acquisition of Silvus Technologies Holdings Inc. (“Silvus”), we will now report net sales from our principal product lines by combining the former LMR Communications and newly acquired Silvus under the new technology name Mission Critical Networks (MCN).
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Second Quarter Financial Results
•Net sales were $2.8 billion in the second quarter of 2025 compared to $2.6 billion in the second quarter of 2024.
•Operating earnings were $692 million in the second quarter of 2025 compared to $644 million in the second quarter of 2024.
•Net earnings attributable to Motorola Solutions, Inc. was $513 million, or $3.04 per diluted common share, in the second quarter of 2025, compared to $443 million, or $2.60 per diluted common share, in the second quarter of 2024.
•Operating cash flow increased $221 million to $783 million in the first half of 2025 compared to $562 million in the first half of 2024.
•We repurchased $543 million of common stock and paid $364 million in dividends in the first half of 2025.
Recent Events
Macroeconomic Environment Update
The current global tariff environment is complex and evolving. In early 2025, the United States initiated a series of trade actions which imposed new tariffs and increased existing tariffs on goods imported from various countries, contributing to a global trade landscape subject to evolving tariffs, import/export regulations, trade barriers and trade disputes. As a result, we continue to observe elevated volatility and uncertainty around the global supply chain.
We engage with global suppliers across a diverse network of locations around the world. We continue to work with our global supply base to mitigate our exposure to the risks to global reciprocal (and sectoral) tariffs that have developed, and which may continue to develop, in order to ensure supply continues at levels in order to meet our current customer demand. As a result of the dynamic environment, we expect increased costs on materials and components in 2025, which we currently expect to substantially mitigate.
Recent Acquisitions
On May 27, 2025, we entered into a purchase and sale agreement with Silvus Technologies Group LLC ("Seller") to acquire Silvus Technologies Holdings Inc. (“Silvus”), which subsequent to the quarter end closed on August 6, 2025, for $4.4 billion in upfront consideration, comprising $4.38 billion in cash, subject to customary adjustments for cash, net working capital, transaction expenses and indebtedness, and $20 million in restricted stock to certain employee equity holders. Additionally, under the terms of the transaction, the Seller will have the potential to earn earnout consideration following the achievement of certain financial targets of up to $150 million for the annual period from July 5, 2026 through July 3, 2027 and up to $450 million for the annual period from July 4, 2027 through July 1, 2028 (with the potential to earn a catch-up earnout consideration based on performance in the annual period from July 4, 2027 through July 1, 2028 if the maximum earnout for the annual period from July 5, 2026 through July 3, 2027 is not earned). The earnout consideration, if any, will be made in shares of common stock. Silvus designs and develops software-defined high-speed mobile ad-hoc network (MANET) technology that enables highly secure data, video and voice communications without the need for fixed infrastructure. This acquisition brings mobile ad-hoc network expertise and new applications to the Company's public safety and enterprise portfolio. This business will be part of both the Products and Systems Integration segment and the Software and Services segment.
| Segment | Technology | Acquisition | Description | Purchase Price | Date of Acquisition | ||||||||||||
| Software and Services | Command Center | Theatro | Creator of AI and voice-powered communication and digital workflow software for frontline workers. | $173 million and share-based compensation of $5 million | March 6, 2025 | ||||||||||||
| Software and Services | Command Center | RapidDeploy | Provider of cloud-native 911 solutions. | $241 million and share-based compensation of $6 million | February 21, 2025 | ||||||||||||
| Software and Services | Command Center | 3tc Software | Provider of control room software solutions. | $23 million and share-based compensation of $4 million | October 29, 2024 | ||||||||||||
| Software and Services | Command Center | Noggin | Provider of cloud-based business continuity planning, operational resilience and critical event management software. | $92 million and share-based compensation of $19 million | July 1, 2024 | ||||||||||||
| Software and Services | Video Security and Access Control | Unnamed vehicle location and management solutions business | Provider of vehicle location and management solutions. | $132 million and share-based compensation of $3 million | July 1, 2024 | ||||||||||||
| Products and Systems Integration | Video Security and Access Control | Silent Sentinel | Provider of specialized, long-range cameras. | $37 million | February 13, 2024 | ||||||||||||
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Results of Operations
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | June 28, 2025 | % of Sales* | June 29, 2024 | % of Sales* | June 28, 2025 | % of Sales* | June 29, 2024 | % of Sales* | |||||||||||||||||||||||||||||||||||||||
| Net sales from products | $ | 1,533 | $ | 1,563 | $ | 2,980 | $ | 2,968 | |||||||||||||||||||||||||||||||||||||||
| Net sales from services | 1,232 | 1,065 | 2,313 | 2,049 | |||||||||||||||||||||||||||||||||||||||||||
| Net sales | 2,765 | 2,628 | 5,293 | 5,017 | |||||||||||||||||||||||||||||||||||||||||||
| Costs of products sales | 646 | 42.1 | % | 653 | 41.8 | % | 1,220 | 40.9 | % | 1,252 | 42.2 | % | |||||||||||||||||||||||||||||||||||
| Costs of services sales | 706 | 57.3 | % | 636 | 59.7 | % | 1,360 | 58.8 | % | 1,234 | 60.2 | % | |||||||||||||||||||||||||||||||||||
| Costs of sales | 1,352 | 1,289 | 2,580 | 2,486 | |||||||||||||||||||||||||||||||||||||||||||
| Gross margin | 1,413 | 51.1 | % | 1,339 | 51.0 | % | 2,713 | 51.3 | % | 2,531 | 50.4 | % | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 450 | 16.3 | % | 430 | 16.4 | % | 886 | 16.7 | % | 827 | 16.5 | % | |||||||||||||||||||||||||||||||||||
| Research and development expenditures | 231 | 8.4 | % | 220 | 8.4 | % | 464 | 8.8 | % | 437 | 8.7 | % | |||||||||||||||||||||||||||||||||||
| Other charges | 40 | 1.4 | % | 45 | 1.7 | % | 89 | 1.7 | % | 104 | 2.1 | % | |||||||||||||||||||||||||||||||||||
| Operating earnings | 692 | 25.0 | % | 644 | 24.5 | % | 1,274 | 24.1 | % | 1,163 | 23.2 | % | |||||||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (55) | (2.0) | % | (69) | (2.6) | % | (106) | (2.0) | % | (113) | (2.3) | % | |||||||||||||||||||||||||||||||||||
| Other, net | 43 | 1.6 | % | 5 | 0.2 | % | 59 | 1.1 | % | (560) | (11.2) | % | |||||||||||||||||||||||||||||||||||
| Total other expense | (12) | (0.4) | % | (64) | (2.4) | % | (47) | (0.9) | % | (673) | (13.4) | % | |||||||||||||||||||||||||||||||||||
| Net earnings before income taxes | 680 | 24.6 | % | 580 | 22.1 | % | 1,227 | 23.2 | % | 490 | 9.8 | % | |||||||||||||||||||||||||||||||||||
| Income tax expense | 165 | 6.0 | % | 135 | 5.1 | % | 280 | 5.3 | % | 83 | 1.7 | % | |||||||||||||||||||||||||||||||||||
| Net earnings | 515 | 18.6 | % | 445 | 16.9 | % | 947 | 17.9 | % | 407 | 8.1 | % | |||||||||||||||||||||||||||||||||||
| Less: Earnings attributable to non-controlling interests | 2 | 0.1 | % | 2 | 0.1 | % | 4 | 0.1 | % | 3 | 0.1 | % | |||||||||||||||||||||||||||||||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 513 | 18.6 | % | $ | 443 | 16.8 | % | $ | 943 | 17.8 | % | $ | 404 | 8.0 | % | |||||||||||||||||||||||||||||||
| Earnings per diluted common share | $ | 3.04 | $ | 2.60 | $ | 5.57 | $ | 2.37 | |||||||||||||||||||||||||||||||||||||||
* Percentages may not add due to rounding
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Results of Operations—Three months ended June 28, 2025 compared to three months ended June 29, 2024
The results of operations for the second quarter of 2025 are not necessarily indicative of the operating results to be expected for the full year. Historically, we have experienced higher revenues in the fourth quarter as compared to the rest of the quarters of our fiscal year as a result of the purchasing patterns of our customers.
We use the following U.S. GAAP key financial performance measures to manage our business on a consolidated basis and by reporting segment, and to monitor and assess our results of operations:
•Net sales: a measure of our revenue for the current period.
•Operating earnings: a measure of our earnings from operations, before non-operating expenses and income taxes.
•Operating margins: a measure of our operating earnings as a percentage of total net sales.
Considered together, we believe these measures are strong indicators of our overall performance and our ability to create shareholder value. A discussion of our results of operations and financial condition follows.
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
| Net sales by region: | |||||||||||||||||||||||||||||||||||
| North America | $ | 1,251 | $ | 776 | $ | 2,027 | $ | 1,245 | $ | 672 | $ | 1,917 | |||||||||||||||||||||||
| International | 402 | 336 | 738 | 413 | 298 | 711 | |||||||||||||||||||||||||||||
| $ | 1,653 | $ | 1,112 | $ | 2,765 | $ | 1,658 | $ | 970 | $ | 2,628 | ||||||||||||||||||||||||
Net sales by major products and services: | |||||||||||||||||||||||||||||||||||
| LMR Communications | $ | 1,356 | $ | 649 | $ | 2,005 | $ | 1,363 | $ | 578 | $ | 1,941 | |||||||||||||||||||||||
| Video | 297 | 226 | 523 | 295 | 181 | 476 | |||||||||||||||||||||||||||||
| Command Center | — | 237 | 237 | — | 211 | 211 | |||||||||||||||||||||||||||||
| $ | 1,653 | $ | 1,112 | $ | 2,765 | $ | 1,658 | $ | 970 | $ | 2,628 | ||||||||||||||||||||||||
| Operating earnings | $ | 363 | $ | 329 | $ | 692 | $ | 379 | $ | 265 | $ | 644 | |||||||||||||||||||||||
| Operating margins | 22.0 | % | 29.6 | % | 25.0 | % | 22.9 | % | 27.3 | % | 24.5 | % | |||||||||||||||||||||||
Net Sales
The Products and Systems Integration segment’s net sales represented 60% of our net sales in the second quarter of 2025 and 63% in the second quarter of 2024. The Software and Services segment’s net sales represented 40% of our net sales in the second quarter of 2025 and 37% in the second quarter of 2024.
Net sales increased $137 million, or 5%, in the second quarter of 2025 compared to the second quarter of 2024. The $142 million, or 15%, increase in net sales within the Software and Services segment was driven by an increase of 15% in the North America region and an increase of 13% in the International region. The $5 million decrease in net sales within the Products and Systems Integration segment was driven by a decrease of $11 million, or 3%, in the International region, partially offset by a $6 million increase in the North America region. Net sales includes:
•an increase in the Software and Services segment, inclusive of $39 million of revenue from acquisitions, driven by an increase in LMR services, Video and Command Center;
•the Products and Systems Integration segment was flat, driven by a decrease in LMR, partially offset by an increase in Video; and
•inclusive of $9 million from favorable currency rates.
Regional results include:
•a 6% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in Video, LMR and Command Center; and
•a 4% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in LMR.
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Products and Systems Integration
The Products and Systems Integration segment was flat driven by the following:
•$7 million, or 1%, decrease in LMR, driven by both the the International and North America regions; partially offset by
•$2 million, or 1%, growth in Video, driven by the North America region, partially offset by the International region; and
•inclusive of $4 million from favorable currency rates.
Software and Services
The 15% increase in the Software and Services segment was driven by the following:
•$71 million, or 12%, growth in LMR services, driven by the North America and International regions;
•$45 million, or 25%, growth in Video, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$26 million, or 12%, growth in Command Center, inclusive of revenue from acquisitions, driven by the North America region; and
•inclusive of $5 million from favorable currency rates.
Gross Margin
| Three Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
| Gross margin from Products and Systems Integration | $ | 876 | $ | 874 | — | % | |||||||||||
| Gross margin from Software and Services | 537 | 465 | 15 | % | |||||||||||||
| Gross margin | $ | 1,413 | $ | 1,339 | 6 | % | |||||||||||
Gross margin was 51.1% of net sales in the second quarter of 2025 compared to 51.0% in the second quarter of 2024. The primary drivers of this increase in gross margin as a percentage of net sales were:
•a 0.4% increase in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, primarily driven by higher sales partially offset by acquisitions; and
•a 0.3% increase in gross margin as a percentage of net sales in the Products and Systems Integration segment, primarily driven by lower direct material costs, despite higher tariffs.
Selling, General and Administrative ("SG&A") Expenses
| Three Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
| SG&A expenses from Products and Systems Integration | $ | 355 | $ | 342 | 4 | % | |||||||||||
| SG&A expenses from Software and Services | 95 | 88 | 8 | % | |||||||||||||
| SG&A expenses | $ | 450 | $ | 430 | 5 | % | |||||||||||
SG&A expenses increased 5% in the second quarter of 2025 compared to the second quarter of 2024 primarily driven by:
•a $13 million, or 4%, increase in Products and Systems Integration SG&A expenses primarily due to higher employee incentive costs, including share based compensation and investments in video; and
•a $7 million, or 8%, increase in Software and Services SG&A expenses primarily due to higher expenses associated with acquired businesses.
SG&A expenses were 16.3% of net sales in the second quarter of 2025 compared to 16.4% of net sales in the second quarter of 2024.
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Research and Development ("R&D") Expenditures
| Three Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
| R&D expenditures from Products and Systems Integration | $ | 143 | $ | 140 | 2 | % | |||||||||||
| R&D expenditures from Software and Services | 88 | 80 | 10 | % | |||||||||||||
| R&D expenditures | $ | 231 | $ | 220 | 5 | % | |||||||||||
R&D expenditures increased $11 million, or 5%, in the second quarter of 2025 compared to the second quarter of 2024 primarily driven by higher employee incentive costs, including investments in video and share based compensation, and higher expenses associated with acquired businesses. R&D expenditures were 8.4% of net sales in both the second quarter of 2025 and in the second quarter of 2024.
Other Charges
| Three Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Other charges from Products and Systems Integration | $ | 15 | $ | 13 | |||||||
| Other charges from Software and Services | 25 | 32 | |||||||||
| Other charges | $ | 40 | $ | 45 | |||||||
Other charges decreased $5 million in the second quarter of 2025 compared to the second quarter of 2024. The decrease was primarily driven by:
•$10 million of gains on the Hytera litigation for the amounts recovered through legal proceedings due to theft of our trade secrets in the second quarter of 2025 that did not occur in the second quarter of 2024; and
•$2 million of acquisition related transaction fees in the second quarter of 2025 compared to $4 million of acquisition related transaction fees in the second quarter of 2024; partially offset by
•$39 million of intangible amortization expense in the second quarter of 2025 compared to $36 million of intangible amortization expense in the second quarter of 2024; and
•$8 million of reorganization of business expenses in the second quarter of 2025 compared to $4 million of reorganization of business expenses in the second quarter of 2024.
Operating Earnings
| Three Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Operating earnings from Products and Systems Integration | $ | 363 | $ | 379 | |||||||
| Operating earnings from Software and Services | 329 | 265 | |||||||||
| Operating earnings | $ | 692 | $ | 644 | |||||||
Operating earnings increased $48 million, or 7%, in the second quarter of 2025 compared to the second quarter of 2024. The increase in Operating earnings was due to:
•a $64 million increase in the Software and Services segment, primarily driven by higher sales and improved operating leverage, partially offset by higher expenses associated with acquired businesses and higher employee incentive costs, including investments in video and share based compensation; partially offset by
•a $16 million decrease in the Products and Systems Integration segment, primarily driven by decreased sales, higher employee incentive costs, including share based compensation and investments in video, and higher intangible amortization expenses, partially offset by lower direct material costs, despite higher tariffs, and a gain on the Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets.
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Interest Expense, net
| Three Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Interest expense, net | $ | (55) | $ | (69) | |||||||
The $14 million decrease in Interest expense, net in the second quarter of 2025 compared to the second quarter of 2024 was primarily driven by interest accruals related to audits with tax authorities in foreign jurisdictions in 2024.
Other, net
| Three Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Other, net | $ | 43 | $ | 5 | |||||||
The $38 million increase in Other, net in the second quarter of 2025 compared to the second quarter of 2024 was primarily driven by:
•a $34 million gain on derivatives in the second quarter of 2025 compared to a $5 million loss on derivatives in the second quarter of 2024;
•an $18 million gain on fair value adjustments to equity investments in the second quarter of 2025 compared to a $11 million loss on fair value adjustments to equity investments in the second quarter of 2024; and
•an $11 million loss on assessments of uncertain tax positions in the second quarter of 2024 that did not occur in the second quarter of 2025; partially offset by
•a $42 million loss on foreign currency in the second quarter of 2025 compared to a $3 million gain on foreign currency in the second quarter of 2024.
Effective Tax Rate
| Three Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Income tax expense | $ | 165 | $ | 135 | |||||||
Income tax expense increased by $30 million in the second quarter of 2025 compared to the second quarter of 2024, resulting in an effective tax rate of 24%. Our effective tax rate for the three months ended June 28, 2025 of 24% was higher than the effective tax rate for the three months ended June 29, 2024 of 23%, primarily due to tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024 and lower excess tax benefits of share-based compensation in 2025.
Subsequent to quarter end, on July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law and included tax cut extensions and modifications to the international tax framework and corporate income tax deductions. We are currently evaluating the potential effects of these changes on our financial statements, inclusive of our income tax provision, income tax payable, and deferred tax asset balances. We will recognize the effects of this legislation in accordance with the enactment and effective dates of the applicable provisions.
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Results of Operations—Six months ended June 28, 2025 compared to Six months ended June 29, 2024
| Six Months Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
Net sales by region: | |||||||||||||||||||||||||||||||||||
| North America | $ | 2,429 | $ | 1,450 | $ | 3,879 | $ | 2,328 | $ | 1,282 | $ | 3,610 | |||||||||||||||||||||||
| International | 770 | 644 | 1,414 | 821 | 586 | 1,407 | |||||||||||||||||||||||||||||
| $ | 3,199 | $ | 2,094 | $ | 5,293 | $ | 3,149 | $ | 1,868 | $ | 5,017 | ||||||||||||||||||||||||
| Net sales by major products and services: | |||||||||||||||||||||||||||||||||||
| LMR Communications | $ | 2,671 | $ | 1,235 | $ | 3,906 | $ | 2,620 | $ | 1,144 | $ | 3,764 | |||||||||||||||||||||||
| Video | 528 | 436 | 964 | 529 | 345 | 874 | |||||||||||||||||||||||||||||
| Command Center | — | 423 | 423 | — | 379 | 379 | |||||||||||||||||||||||||||||
| $ | 3,199 | $ | 2,094 | $ | 5,293 | $ | 3,149 | $ | 1,868 | $ | 5,017 | ||||||||||||||||||||||||
| Operating earnings | $ | 715 | $ | 559 | $ | 1,274 | $ | 689 | $ | 474 | $ | 1,163 | |||||||||||||||||||||||
| Operating margins | 22.4 | % | 26.7 | % | 24.1 | % | 21.9 | % | 25.4 | % | 23.2 | % | |||||||||||||||||||||||
Net Sales
The Products and Systems Integration segment's net sales represented 60% of our net sales in the first half of 2025 and 63% in the first half of 2024. Net sales from the Software and Services segment represented 40% of our net sales in the first half of 2025 and 37% in the first half of 2024.
Net sales increased $276 million, or 6%, in the first half of 2025 compared to the first half of 2024. The $226 million, or 12%, increase in net sales within the Software and Services segment was driven by an increase of 13% in the North America region, and an increase of 10% in the International region. The $50 million, or 2%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 4% in the North America region, partially offset by a decrease of 6% in the International region. Net sales includes:
•an increase in Software and Services, inclusive of $71 million of revenue from acquisitions, driven by an increase in Video, LMR services and Command Center;
•an increase in the Products and Systems Integration segment, driven by an increase in LMR; and
•inclusive of $17 million from unfavorable currency rates.
Regional results include:
•a 7% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in LMR, Video and Command Center; and
•the International region was flat, inclusive of revenue from acquisitions, driven by an increase in Command Center and Video, partially offset by LMR.
Products and Systems Integration
The 2% increase in the Products and Systems Integration segment was driven by the following:
•$51 million, or 2% growth in LMR, driven by the North America region, partially offset by the International region; partially offset by
•$1 million decrease in Video, driven by the International region, partially offset by North America region; and
•inclusive of $11 million from unfavorable currency rates.
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Software and Services
The 12% increase in the Software and Services segment was driven by the following:
•$91 million, or 26% growth in Video, inclusive of revenue from acquisitions, driven by both the North America and International regions;
•$91 million, or 8% growth in LMR services, driven by both the North America and International regions;
•$44 million, or 12% growth in Command Center, inclusive of revenue from acquisitions, driven by both the North America and International regions; and
•inclusive of $6 million from unfavorable currency rates.
Gross Margin
| Six Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
Gross margin from Products and Systems Integration | $ | 1,728 | $ | 1,649 | 5 | % | |||||||||||
Gross margin from Software and Services | 985 | 882 | 12 | % | |||||||||||||
| Gross margin | $ | 2,713 | $ | 2,531 | 7 | % | |||||||||||
Gross margin was 51.3% of net sales in the first half of 2025 compared to 50.4% in the first half of 2024. The primary drivers of this increase in gross margin as a percentage of net sales were:
•a 1.6% increase in gross margin as a percentage of net sales in the Products and Systems Integration segment, primarily driven by favorable mix and lower direct material costs, despite higher tariffs; partially offset by
•a 0.2% decrease in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, driven by higher expenses associated with acquired businesses.
Selling, General and Administrative ("SG&A") Expenses
| Six Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
SG&A expenses from Products and Systems Integration | $ | 696 | $ | 654 | 6 | % | |||||||||||
SG&A expenses from Software and Services | 190 | 173 | 10 | % | |||||||||||||
SG&A expenses | $ | 886 | $ | 827 | 7 | % | |||||||||||
SG&A expenses increased 7% in the first half of 2025 compared to the first half of 2024 primarily driven by:
•a $42 million, or 6%, increase in Products and Systems Integration SG&A expenses primarily due to higher employee incentive costs, including share based compensation and investments in video, and higher expenses related to legal matters, including Hytera related legal expenses; and
•a $17 million, or 10%, increase in Software and Services SG&A expenses primarily due to higher expenses associated with acquired businesses.
SG&A expenses were 16.7% of net sales in the first half of 2025 compared to 16.5% of net sales in the first half of 2024.
Research and Development ("R&D") Expenditures
| Six Months Ended | |||||||||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | % Change | ||||||||||||||
R&D expenditures from Products and Systems Integration | $ | 285 | $ | 276 | 3 | % | |||||||||||
R&D expenditures from Software and Services | 179 | 161 | 11 | % | |||||||||||||
R&D expenditures | $ | 464 | $ | 437 | 6 | % | |||||||||||
R&D expenditures increased 6% in the first half of 2025 compared to the first half of 2024 primarily driven by:
•an $18 million, or 11%, increase in Software and Services R&D expenditures primarily due to higher employee incentive costs, including investments in video and share based compensation, and higher expenses associated with acquired businesses; and
•a $9 million, or 3%, increase in Products and Systems Integration R&D expenditures primarily due to higher employee incentive costs, including investments in video.
R&D expenditures were 8.8% of net sales in the first half of 2025 compared to 8.7% of net sales in the first half of 2024.
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Other Charges
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
Other charges from Products and Systems Integration | $ | 32 | $ | 30 | |||||||
Other charges from Software and Services | 57 | 74 | |||||||||
| Other charges | $ | 89 | $ | 104 | |||||||
Other charges decreased by $15 million in the first half of 2025 compared to the first half of 2024. The decrease was driven primarily by:
•$20 million of gains on the Hytera litigation for the amounts recovered through legal proceedings due to theft of our trade secrets in the first half of 2025 that did not occur in the first half of 2024; and
•$4 million of operating lease asset impairments in the first half of 2024 that did not occur in the first half of 2025; partially offset by
•$20 million of reorganization of business expense in the first half of 2025 compared to $11 million in the first half of 2024.
Operating Earnings
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Operating earnings from Products and Systems Integration | $ | 715 | $ | 689 | |||||||
| Operating earnings from Software and Services | 559 | 474 | |||||||||
| Operating earnings | $ | 1,274 | $ | 1,163 | |||||||
Operating earnings increased $111 million, or 10%, in the first half of 2025 compared to the first half of 2024. The increase in Operating earnings was due to:
•an $85 million increase in the Software and Services segment, primarily driven by higher sales and a reduction of intangible amortization expenses, partially offset by higher expenses associated with acquired businesses, higher employee incentive costs, including investments in video and share based compensation, and increased reorganization expenses; and
•a $26 million increase in the Products and Systems Integration segment, primarily driven by higher sales, a gain on the Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets, favorable mix, and lower direct material costs, despite higher tariffs, partially offset by higher employee incentive costs, including share based compensation and investments in video, higher expenses related to legal matters, including Hytera related legal expenses, and increased intangible amortization expenses.
Interest Expense, net
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Interest expense, net | $ | (106) | $ | (113) | |||||||
The $7 million decrease in Interest expense, net in the first half of 2025 compared to the first half of 2024 was primarily driven by interest accruals related to audits with tax authorities in foreign jurisdictions in 2024.
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Other, net
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Other, net | $ | 59 | $ | (560) | |||||||
The $619 million increase in Other, net in the first half of 2025 compared to the first half of 2024 was primarily driven by:
•a $585 million loss from the extinguishment of the $1.0 billion of 1.75% senior convertible notes issued to Silver Lake Partners and scheduled to mature in September 2024 (the "Silver Lake Convertible Debt") which was recognized in the first half of 2024;
•a $48 million gain on derivative instruments in the first half of 2025 compared to a $15 million loss on derivative instruments in the first half of 2024;
•a $13 million gain on fair value adjustments to equity investments in the first half of 2025 compared to a $13 million loss on fair value adjustments to equity investments in the first half of 2024; and
•an $11 million loss on assessments of uncertain tax positions in the first half of 2024 that did not occur in the first half of 2025; partially offset by
•a $62 million loss on foreign currency in the first half of 2025 compared to a $4 million gain on foreign currency in the first half of 2024.
Effective Tax Rate
| Six Months Ended | |||||||||||
| (In millions) | June 28, 2025 | June 29, 2024 | |||||||||
| Income tax expense | $ | 280 | $ | 83 | |||||||
Income tax expense increased by $197 million in the first half of 2025 compared to the first half of 2024, resulting in an effective tax rate of 23%. Our effective tax rate of 23% for the six months ended June 28, 2025 was higher than the effective tax rate for the six months ended June 29, 2024 of 17%, primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024, offset by the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024.
Subsequent to quarter end, on July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law and included tax cut extensions and modifications to the international tax framework and corporate income tax deductions. We are currently evaluating the potential effects of these changes on our financial statements, inclusive of our income tax provision, income tax payable, and deferred tax asset balances. We will recognize the effects of this legislation in accordance with the enactment and effective dates of the applicable provisions.
Reorganization of Business
During the second quarter of 2025, we recorded net reorganization of business charges of $14 million, consisting of $8 million of charges in Other charges and $6 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $13 million related to employee separation costs and $1 million related to exit costs.
During the first half of 2025, we recorded net reorganization of business charges of $31 million, including $20 million of charges recorded within Other charges and $11 million of charges in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $31 million were charges of $33 million related to employee separation costs and $1 million related to exit costs, partially offset by $3 million of reversals for employee separation accruals no longer needed.
During the second quarter of 2024, we recorded net reorganization of business charges of $4 million, including $4 million of charges recorded in Other charges in our Condensed Consolidated Statements of Operations. Included in the $4 million were charges of $10 million related to employee separation costs, partially offset by $2 million of reversals for employee separation accruals and $4 million of reversals for exit costs that are no longer needed.
During the first half of 2024, we recorded net reorganization of business charges of $14 million, including $11 million of charges recorded within Other charges and $3 million of charges in Costs of sales in our Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $22 million related to employee separation costs, partially offset by $4 million of reversals for exit accruals no longer needed and $4 million of reversals for employee separation accruals no longer needed.
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The following table displays the net charges incurred by segment:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Products and Systems Integration | $ | 10 | $ | 6 | $ | 22 | $ | 14 | |||||||||||||||
| Software and Services | 4 | (2) | 9 | — | |||||||||||||||||||
| $ | 14 | $ | 4 | $ | 31 | $ | 14 | ||||||||||||||||
Cash payments for employee severance in connection with the reorganization of business plans were $33 million in the first half of 2025 and $17 million in the first half of 2024. The reorganization of business accrual at June 28, 2025 was $24 million related to employee separation costs that are expected to be paid primarily within one year.
At January 1, 2025, we had an accrual of $1 million for exit costs related to our exit of the ESN contract with the U.K. Home Office. The $1 million of exit costs are recorded in Accrued liabilities in our Condensed Consolidated Balance Sheets at June 28, 2025, and are expected to be paid within one year.
Liquidity and Capital Resources
| Six Months Ended | |||||||||||
| June 28, 2025 | June 29, 2024 | ||||||||||
| Cash flows provided by (used for): | |||||||||||
| Operating activities | $ | 783 | $ | 562 | |||||||
| Investing activities | (537) | (118) | |||||||||
| Financing activities | 778 | (743) | |||||||||
| Effect of exchange rates on cash and cash equivalents | 80 | (25) | |||||||||
Decrease in cash and cash equivalents | $ | 1,104 | $ | (324) | |||||||
Cash and Cash Equivalents
At June 28, 2025, $2.8 billion of the $3.2 billion cash and cash equivalents balance was held in the U.S. and $367 million was held in other countries.
Operating Activities
The increase in cash flows provided by operating activities from the first half of 2024 to the first half of 2025 was driven primarily by higher earnings, net of non-cash charges, and improved working capital.
Investing Activities
The increase in cash flows used for investing activities in the first half of 2025 compared to the first half of 2024 was primarily due to an increase in cash used for acquisitions and investments.
Financing Activities
The increase in cash flows provided by financing activities in the first half of 2025 compared to the cash flows used for financing activities in the first half of 2024 was primarily driven by (see also further discussion in the "Debt," "Share Repurchase Program" and "Dividends" sections below in this Part I, Item 2 of this Form 10-Q):
•$1.3 billion decrease in repayment of debt driven by the 7.5% senior notes repaid in the first half of 2025 compared to the repurchase of Silver Lake Convertible Debt in the first half of 2024; and
•$695 million increase in net proceeds from the issuance of debt in the first half of 2025 driven by the issuance of our 4.85% senior notes due 2030 ("2030 Notes"), 5.2% senior notes due 2032 ("2032 Notes") and our 5.55% senior notes due 2035 ("2035 Notes") compared to the the issuance of debt in the first half of 2024 driven by the issuance of our 5.0% senior notes due 2029 and 5.4% senior notes due 2034; partially offset by
•$433 million increase in share repurchases in the first half of 2025 compared to the first half of 2024;
•$38 million increase in the payment of dividends in the first half of 2025 compared to the first half of 2024; and
•$38 million increase in cash used for the issuance of common stock primarily driven by an increase in tax withholdings and a decrease in net proceeds from our employee stock option and employee stock purchase plans in the first half of 2025 compared to the first half of 2024.
39
Sales of Receivables
The following table summarizes the proceeds received from sales of accounts receivable and long-term customer financing receivables for the three and six months ended June 28, 2025 and June 29, 2024:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | June 28, 2025 | June 29, 2024 | ||||||||||||||||||||
| Long-term receivables sales proceeds | $ | 89 | $ | 17 | 113 | 27 | |||||||||||||||||
Debt
We had outstanding debt of $7.7 billion at June 28, 2025, of which $70 million was current. We had outstanding debt of $6.0 billion at December 31, 2024, of which $322 million was current.
On June 16, 2025, we issued $600 million of 4.85% senior notes due 2030 (“2030 Notes”), $500 million of 5.2% senior notes due 2032 (“2032 Notes”), $900 million of 5.55% senior notes due 2035 (“2035 Notes”). We recognized net proceeds of approximately $2.0 billion after debt issuance costs and discounts. The proceeds from these notes were used to fund a portion of the acquisition of Silvus.
On May 27, 2025, we obtained financing commitments for $2.5 billion of senior unsecured delayed draw term loan facilities, comprised of $1.75 billion 364-day facility and a $750 million three year facility. Upon issuance of 2030 Notes, 2032 Notes, and 2035 Notes, the financing commitments under the 364-day facility were reduced to $750 million. Subsequent to the quarter, on July 21, 2025 we entered into credit agreements for a 750 million 364-day delayed draw term loan and a $750 million three year delayed draw term loan, and on August 6, 2025 we borrowed $750 million under the 364-day delayed draw term loan and $750 million under the three year delayed draw term loan to fund a portion of the acquisition of Silvus.
On April 25, 2025, we entered into a $2.25 billion syndicated, unsecured revolving credit facility scheduled to mature in April 2030 which can be used for general corporate purposes and letters of credit (the "2025 Motorola Solutions Credit Agreement"), which replaced our $2.25 billion 2021 Motorola Solutions Credit Agreement scheduled to mature in March 2026. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the Secured Overnight Financing Rate (SOFR), at our option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if our credit rating changes. We must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2025 Motorola Solutions Credit Agreement. We were in compliance with our financial covenants as of June 28, 2025.
We have an unsecured commercial paper program, backed by the 2025 Motorola Solutions Credit Agreement, under which we may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. As of June 28, 2025 we had no outstanding debt under the commercial paper program. Subsequent to the quarter, we utilized our commercial paper program as a source of short-term liquidity to partially fund the acquisition of Silvus.
We have investment grade ratings on our senior unsecured long-term debt. We continue to believe that we will be able to maintain sufficient access to the capital markets in the next twelve months and the foreseeable future.
Share Repurchase Program
During the three and six months ended June 28, 2025, we repurchased approximately 0.6 million and 1.3 million shares at an average price of $414.42 and $427.74 per share for an aggregate amount of $218 million and $543 million, excluding transaction costs and excise tax. As of June 28, 2025, we had used approximately $16.3 billion of the share repurchase authority to repurchase shares, leaving $1.7 billion of authority available for future repurchases.
Dividends
During the second quarter of 2025 we paid $182 million in cash dividends to holders of our common stock. Subsequent to the quarter, we paid an additional $182 million in cash dividends to holders of our common stock.
Adequate Internal Funding Resources
We believe that we have adequate internal resources available to generate adequate amounts of cash to meet our expected working capital, capital expenditure and cash requirements for the next twelve months and the foreseeable future, as supported by the level of cash and cash equivalents in the U.S., the ability to repatriate funds from foreign jurisdictions, cash provided by operations, as well as liquidity provided by our commercial paper program backed by the 2025 Motorola Solutions Credit Agreement.
We do not anticipate a material decrease to net future cash flows generated from operations. We expect to use our available cash, investments, and debt facilities to support and invest in our business. This includes investing in our existing products and technologies, seeking new acquisition opportunities related to our strategic growth initiatives and returning cash to shareholders through common stock cash dividend payments (subject to the discretion of our Board of Directors) and share repurchases. Subsequent to the quarter, we used a portion of our cash and cash equivalents on hand to partially fund the acquisition of Silvus.
40
Subsequent to entering into a purchase and sale agreement with Silvus, our corporate credit ratings were reaffirmed by the major rating agencies. Fitch Ratings and S&P Global Ratings reaffirmed our BBB ratings, and Moody's Investors Service reaffirmed our Baa2 rating.
Long-Term Customer Financing Commitments
We had outstanding commitments to provide long-term financing to third parties totaling $171 million at June 28, 2025, compared to $105 million at December 31, 2024.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” in Note 1, “Basis of Presentation” to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our interest rate risk or foreign currency risk during the six months ended June 28, 2025. For a discussion of our exposure to interest rate risk and foreign currency risk, refer to our disclosures set forth in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of the Form 10-K.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Form 10-Q (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to Motorola Solutions, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to Motorola Solutions’ management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 28, 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
41
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
In addition to the matter referenced below, the Company is subject to legal proceedings and claims that have not been fully resolved and which have arisen in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations. However, an unfavorable resolution could have a material adverse effect on the Company's condensed consolidated financial position, liquidity, or results of operations in the periods in which the matters are ultimately resolved, or in the periods in which more information is obtained that changes management's opinion of the ultimate disposition.
Refer to the description of "Hytera Civil Litigation" in Note 12, “Commitments and Contingencies,” to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for information regarding our legal proceedings.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in the Form 10-K.
42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On April 30, 2025, the Company issued 2,294 shares of common stock in connection with the acquisition of InVisit to certain former shareholders of InVisit. The stock was issued for an aggregate grant fair value of $1 million that will be expensed over an average service period of 2 years.
The foregoing transactions did not involve any underwriters, any underwriting discounts or commissions, or any public offerings. The shares with respect to the transactions were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, in a privately negotiated transactions not involving any public offerings or solicitations.
Issuer Purchases of Equity Securities
The following table provides information with respect to acquisitions by the Company of shares of its common stock during the quarter ended June 28, 2025.
| Period | (a) Total Number of Shares Purchased | (b) Average Price Paid per Share (1) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Program (2) | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program(2) | |||||||||||||||||||
| 3/28/2025 to 4/24/2025 | 160,882 | $ | 419.82 | 160,882 | $ | 1,844,734,317 | |||||||||||||||||
| 4/25/2025 to 5/22/2025 | 221,865 | $ | 412.24 | 221,865 | $ | 1,753,272,214 | |||||||||||||||||
| 5/23/2025 to 6/26/2025 | 143,293 | $ | 411.72 | 143,293 | $ | 1,694,276,089 | |||||||||||||||||
| Total | 526,040 | $ | 414.42 | 526,040 | |||||||||||||||||||
(1)Average price paid per share of common stock repurchased excludes commissions paid to brokers and excise tax. As of January 1, 2023, the Company's share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act of 2022. The amount of excise tax incurred is included in the Company's Condensed Consolidated Statement of Stockholders' Equity for the quarter ended June 28, 2025.
(2)As originally announced on July 28, 2011, and subsequently amended, the Board of Directors has authorized the Company to repurchase an aggregate amount of up to $18.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. As of June 28, 2025, the Company had used approximately $16.3 billion to repurchase shares, leaving $1.7 billion of authority available for future repurchases.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the three months ended June 28, 2025, no director or officer of the Company adopted terminated
43
Item 6. Exhibits
| Exhibit No. | Exhibit | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Scheme Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
___________________________________
| * | Filed herewith | ||||
| ** | Furnished herewith | ||||
MOTOROLA, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license. All other trademarks are the property of their respective owners. ©2025 Motorola Solutions, Inc. All rights reserved. | |||||
44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MOTOROLA SOLUTIONS, INC. | |||||||||||
| By: | /S/ KATHERINE MAHER | ||||||||||
Katherine Maher Corporate Vice President and Chief Accounting Officer (Principal Accounting Officer & Duly Authorized Officer) | |||||||||||
August 7, 2025
45
Exhibit 31.1
CERTIFICATION
I, Gregory Q. Brown, Chairman and Chief Executive Officer, Motorola Solutions, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Motorola Solutions, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 7, 2025
| /s/ GREGORY Q. BROWN | |||||
| Gregory Q. Brown | |||||
| Chairman and Chief Executive Officer | |||||
| Motorola Solutions, Inc. | |||||
Exhibit 31.2
CERTIFICATION
I, Jason J. Winkler, Executive Vice President and Chief Financial Officer, Motorola Solutions, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Motorola Solutions, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 7, 2025
| /s/ JASON J. WINKLER | |||||
| Jason J. Winkler | |||||
| Executive Vice President and Chief Financial Officer | |||||
| Motorola Solutions, Inc. | |||||
Exhibit 32.1
CERTIFICATION
I, Gregory Q. Brown, Chairman and Chief Executive Officer, Motorola Solutions, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that, to my knowledge:
(1)the quarterly report on Form 10-Q for the period ended June 28, 2025 (the “Quarterly Report”), which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Motorola Solutions, Inc.
This certificate is being furnished solely for purposes of Section 906.
Dated: August 7, 2025
| /s/ GREGORY Q. BROWN | |||||
| Gregory Q. Brown | |||||
| Chairman and Chief Executive Officer | |||||
| Motorola Solutions, Inc. | |||||
Exhibit 32.2
CERTIFICATION
I, Jason J. Winkler, Executive Vice President and Chief Financial Officer, Motorola Solutions, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that, to my knowledge:
(1)the quarterly report on Form 10-Q for the period ended June 28, 2025 (the “Quarterly Report”), which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of Motorola Solutions, Inc.
This certificate is being furnished solely for purposes of Section 906.
Dated: August 7, 2025
| /s/ JASON J. WINKLER | |||||
| Jason J. Winkler | |||||
| Executive Vice President and Chief Financial Officer | |||||
| Motorola Solutions, Inc. | |||||