Motorola Solutions, Inc 10-Q for FY2026 Q3
Motorola Solutions, Inc. (MSI)
10-Q
2026-11-04
For: 2026-10-03
View Original
Added on
November 04, 2026
About this 10-Q
Motorola Solutions, Inc filed this 10-Q on November 4, 2026, covering the quarter ended October 3, 2026 (FY2026 Q3).
Headline figures
Quarter ended October 3, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.38B
- up 12.2% from $3.01B a year earlier
- Net income
- $512M
- down 8.9% from net income of $562M a year earlier
- Diluted EPS
- $3.06
- down 8.1% from $3.33 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 October 3, 2026
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 October 30, 2026 was 165,333,940 .
TABLE OF CONTENTS | |||||||||||
For the Quarter Ended October 3, 2026 | |||||||||||
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)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions, except per share amounts) | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||
| 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 | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||
| Net earnings | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of tax (Note 4): | |||||||||||||||||||||||
| 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) | October 3, 2026 | December 31, 2025 | |||||||||
| 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 | |||||||||||
| Short-term borrowings | $ | $ | |||||||||
| 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: 10/3/26— | |||||||||||
Outstanding shares: 10/3/26— | |||||||||||
| 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, 2025 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ||||||||||||||||||||||||||||
| Issuance of common stock and stock options exercised | ( | ||||||||||||||||||||||||||||
| Share repurchase program | ( | ( | |||||||||||||||||||||||||||
| Share-based compensation expenses | |||||||||||||||||||||||||||||
Dividends declared $ | ( | ||||||||||||||||||||||||||||
| Balance as of April 4, 2026 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ||||||||||||||||||||||||||||
| 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 July 4, 2026 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| 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 October 3, 2026 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
4
| (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 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
| Net earnings | |||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ||||||||||||||||||||||||||||
| 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 September 27, 2025 | $ | $ | ( | $ | $ | ||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
5
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Operating | |||||||||||
| Net earnings | $ | $ | |||||||||
| Adjustments to reconcile Net earnings to Net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Contingent earnout adjustment | |||||||||||
| Non-cash other charges (income) | ( | ||||||||||
| Share-based compensation expenses | |||||||||||
| 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 | ( | ( | |||||||||
| Proceeds from sales of property, plant and equipment | |||||||||||
| Net cash used for investing activities | ( | ( | |||||||||
| Financing | |||||||||||
| Net proceeds from issuance of debt | |||||||||||
| Net proceeds from short-term borrowings | |||||||||||
| Repayments of short-term 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 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).
6
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 | ||||||||
7
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except as noted)
1.Basis of Presentation
The condensed consolidated financial statements as of October 3, 2026 and for the three and nine months ended October 3, 2026 and September 27, 2025 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. and its controlled subsidiaries (“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, 2025 (the "Form 10-K"). The results of operations for the three and nine months ended October 3, 2026 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 through two segments: “Products and Systems Integration” and “Software and Services.” Within these segments, the Company reports net sales across three principal product lines:
•Mission Critical Networks ("MCN"): Infrastructure, mobile ad-hoc network ("MANET") technology, devices (two-way radio and broadband, including both for public safety and professional and commercial radio ("PCR")), counter-unmanned aircraft systems (“C-UAS”), software and artificial intelligence ("AI")-powered capabilities. MCN includes installation and integration, backed by managed and support services, to help assure mission-critical communications availability, security and resiliency;
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, video monitoring, software and AI-powered analytics that enable visibility of events and focus attention on what's important, to inform faster and more accurate decisions and actions; and
•Command Center: Command center solutions, software applications and AI-powered capabilities, that unify voice and data from public safety agencies, enterprises and the community, enabling a broad informational view of operations and incidents while helping to accelerate workflows and improve the accuracy, speed and trust of decisions.
Recent Announcements
On March 26, 2026, the Company entered into a definitive agreement to acquire the land mobile radio networks services business from Bell Mobility, the wireless subsidiary of Bell Canada and BCE Inc., for $675 million Canadian dollars, subject to customary adjustments and a deferred net working capital settlement. The land mobile radio networks services business provides secure, resilient and highly reliable LMR communications for customers across Canada. The acquisition is expected to be completed in the first half of 2027.
Recent Acquisitions
On August 28, 2026, the Company acquired DeepNeuronic for $29 million, net of cash acquired. DeepNeuronic provides AI software that turns live camera feeds into real-time operational insights. The Company issued restricted stock at a fair value of $9 million to certain key employees that will be expensed over a service period of three years . The acquisition enhances the Company's video security portfolio by integrating advanced AI capabilities into its video offerings. This business is part of the Software and Services segment.
On August 20, 2026, the Company acquired D-Fend for $1.3 billion, net of cash acquired. D-Fend provides advanced counter-drone technology. The Company issued restricted stock at a fair value of $76 million to certain key employees that will be expensed over a service period of three years . The acquisition strengthens the Company's ability to provide public safety and enterprise customers with access to advanced C-UAS designed to safely neutralize rogue drone threats. This business is part of both the Products and Systems Integration segment and the Software and Services segment.
On March 24, 2026, the Company acquired Hyper for $23 million, net of cash acquired. Hyper provides conversational, agentic AI designed to reduce the burden on understaffed public safety answering points ("PSAPs") by handling non-emergency calls. The Company issued restricted stock at a fair value of $2 million to certain key employees that will be expensed over a service period of two years . The acquisition expands the Company's use of agentic AI across its Command Center portfolio and mission-critical AI, Assist. This business is part of the Software and Services segment.
8
On March 11, 2026, the Company acquired Exacom, a provider of cloud-native voice and multimedia recording and logging solutions for mission-critical communications for $67 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of two years . The acquisition enhances the Company's public safety ecosystem by consolidating call logs, recording 911 audio and radio traffic into a cloud-based solution to unify voice and video across the incident lifecycle. This business is part of the Software and Services segment.
On November 18, 2025, the Company acquired Blue Eye, a provider of AI-powered enterprise remote video monitoring ("RVM") services for $79 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of two years . The acquisition enhances the Company's video security portfolio, serving a wide range of enterprises with real-time intelligence to help reduce loss and damage, mitigate risk and boost profitability. This business is part of the Software and Services segment.
On August 6, 2025, the Company acquired Silvus from Silvus Technologies Group LLC (the "Seller"). Silvus designs and develops software-defined high-speed 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. The purchase price of $4.4 billion consisted of cash payments of $4.4 billion, net of cash acquired and customary purchase price adjustments, and contingent earnout consideration that had an estimated fair value as of the acquisition date of $38 million. Under the terms of the transaction, the Seller will have the potential to earn the contingent earnout consideration upon the achievement of certain financial targets of up to $600 million in total, comprised 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 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 paid in shares of common stock. This business is part of both the Products and Systems Integration segment and the Software and Services segment.
On March 6, 2025, the Company acquired Theatro, a maker of AI and voice-powered communication and digital workflow software for frontline workers for $174 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 its 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 $240 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.
Recent Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2025-06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" to modernize the accounting for internal-use software costs. The ASU is effective for fiscal years beginning after December 15, 2027 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 financial statements and disclosures.
In November 2024, the FASB issued 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.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" to introduce a practical expedient in the estimation of expected credit losses for current accounts receivable and current contract assets. The ASU is effective for fiscal years beginning after December 15, 2025 and interim periods within annual reporting periods beginning after December 15, 2025, with early adoption permitted. The Company has elected the practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset, which did not have a material impact to the Company's current expected credit losses.
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. The Company adopted ASU No. 2023-09 for the year ended December 31, 2025 and applied the retrospective transition method. As the provisions of ASU 2023-09 relate primarily to annual disclosure requirements, the adoption has no impact on "Part 1 - Financial Information" of this Form 10-Q.
9
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 nine months ended October 3, 2026 and September 27, 2025, 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 | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| (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: | |||||||||||||||||||||||||||||||||||
| Mission Critical Networks (MCN) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Video | |||||||||||||||||||||||||||||||||||
| Command Center | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Customer Types: | |||||||||||||||||||||||||||||||||||
| Direct | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Indirect | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| (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: | |||||||||||||||||||||||||||||||||||
| Mission Critical Networks (MCN) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Video | |||||||||||||||||||||||||||||||||||
| Command Center | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Customer Types: | |||||||||||||||||||||||||||||||||||
| Direct | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Indirect | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
10
Timing of Revenue Recognition
The Company recognizes revenue in a pattern that reflects the transfer of control of promised goods or services to customers in the amount of consideration to which the Company expects to be entitled in exchange for goods or services.
For the Products and Systems Integration segment, revenue was recognized at a point in time for 79 % and 71 % of net sales for the three months ended October 3, 2026 and September 27, 2025, respectively. For the nine months ended October 3, 2026 and September 27, 2025, revenue was recognized at a point in time for 77 % and 73 % of net sales, respectively. For all periods presented, the remaining segment net sales were recognized over time.
For the Software and Services segment, revenue was recognized over time for 80 82
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. Remaining performance obligations are equal to disclosed backlog, except within our Software and Services contracts where multi-year contract terms 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. The transaction value associated with remaining performance obligations which were not yet satisfied as of October 3, 2026 was $10.0 billion, of which $4.4 billion is expected to be recognized in the next twelve months . The remaining amounts will generally be satisfied over time as systems are implemented and services are performed.
Contract Balances
| (In millions) | October 3, 2026 | December 31, 2025 | |||||||||||||||||||||
| 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 is less than a year.
Revenue recognized during the three months ended October 3, 2026 which was previously included in Contract liabilities as of July 4, 2026 was $708 million, compared to $637 million of revenue recognized during the three months ended September 27, 2025 which was previously included in Contract liabilities as of June 28, 2025. Revenue recognized during the nine months ended October 3, 2026 which was previously included in Contract liabilities as of December 31, 2025 was $1.5 billion, compared to $1.2 billion recognized during the nine months ended September 27, 2025 which was previously included in Contract liabilities as of December 31, 2024. Revenue of $13 million was reversed during the three months ended October 3, 2026 related to performance obligations satisfied, or partially satisfied, in previous periods, compared to $7 million recognized for the three months ended September 27, 2025, primarily driven by changes in the estimates of progress on system contracts. Revenue of $15 million was reversed during the nine months ended October 3, 2026 related to performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $7 million reversed for the nine months ended September 27, 2025.
There were no
Contract Cost Balances
| (In millions) | October 3, 2026 | December 31, 2025 | |||||||||||||||||||||
| Current contract cost assets | $ | $ | |||||||||||||||||||||
| Non-current contract cost assets | |||||||||||||||||||||||
Contract cost assets include incremental costs to obtain a contract, primarily related to the Company's sales incentive plans, and certain costs to fulfill contracts. Contract cost assets are amortized into expense over a period that follows the passage of control to the customer over time. Incremental costs to obtain a contract with the Company's sales incentive plans are accounted for under a portfolio approach, with amortization ranging from to seven years to approximate the recognition of revenues over time. Where incremental costs to obtain a contract will be recognized in one year or less, the Company applies a practical expedient around expensing amounts as incurred. Amortization of contract cost assets was $14 million and $41 million for the three and nine months ended October 3, 2026, respectively, and $13 million and $39 million for the three and nine months ended September 27, 2025, respectively.
11
3. Leases
Components of Lease Expense
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||
| Lease expense: | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Short-term lease cost | |||||||||||||||||||||||
| Variable cost | |||||||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
| Net lease expense from operating leases | $ | $ | $ | $ | |||||||||||||||||||
Lease Assets and Liabilities
| (In millions) | Statement Line Classification | October 3, 2026 | December 31, 2025 | |||||||||||||||||||||||
| Right-of-use lease assets | Operating lease assets | $ | $ | |||||||||||||||||||||||
| Accrued liabilities | ||||||||||||||||||||||||||
| Operating lease liabilities | Operating lease liabilities | |||||||||||||||||||||||||
Other Information Related to Leases
| Nine Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||||||||
| Supplemental cash flow information: | |||||||||||||||||
| Net cash used for operating activities related to operating leases | $ | $ | |||||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | |||||||||||||||||
During the nine months ended October 3, 2026, assets obtained in exchange for lease liabilities were primarily driven by new and renewed real estate leases.
| October 3, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease terms (years) | |||||||||||
| Weighted average discount rate: | % | % | |||||||||
Future Lease Payments
| October 3, 2026 | |||||||||||||||||
| (In millions) | Operating Leases | ||||||||||||||||
| Remainder of 2026 | $ | ||||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| 2030 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| Total lease payments | |||||||||||||||||
| Less: interest | |||||||||||||||||
| Present value of lease liabilities | $ | ||||||||||||||||
12
4. Other Financial Data
Statements of Operations Information
Other Charges
Other charges included in Operating earnings consist of the following:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Other charges (income): | |||||||||||||||||||||||
| Intangibles amortization (Note 15) | $ | $ | $ | $ | |||||||||||||||||||
| Contingent earnout adjustment (Note 10) | |||||||||||||||||||||||
| Acquisition-related transaction fees | |||||||||||||||||||||||
| Reorganization of business (Note 14) | |||||||||||||||||||||||
| Legal settlements | |||||||||||||||||||||||
| Operating lease asset impairments | |||||||||||||||||||||||
| Fixed asset impairments | |||||||||||||||||||||||
| Gain on Hytera litigation | ( | ( | ( | ( | |||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
During the nine months ended October 3, 2026, the Company recorded charges of $178 million to increase the fair value of the contingent earnout consideration related to the Silvus acquisition. Refer to "Note 10: Fair Value Measurements," in this "Part I — Financial Information" of this Form 10-Q for more information.
During the nine months ended October 3, 2026 and September 27, 2025, the Company recognized gains on the Hytera litigation of $73 million and $94 million, respectively, 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 I — Financial Information" of this Form 10-Q for more information.
Other Income (Expense)
Interest expense, net, and Other, net, both included in Other income (expense), consist of the following:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
Interest, net: | |||||||||||||||||||||||
| Interest expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Interest income | |||||||||||||||||||||||
| $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Other, net: | |||||||||||||||||||||||
| Net periodic pension and postretirement benefit (Note 8) | $ | $ | $ | $ | |||||||||||||||||||
| Investment impairments | ( | ( | |||||||||||||||||||||
| Foreign currency gain (loss) | ( | ( | |||||||||||||||||||||
| Gain (loss) on derivative instruments (Note 6) | ( | ( | ( | ||||||||||||||||||||
| Fair value adjustments to equity investments | ( | ( | |||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
13
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 | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
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, share-based awards with an antidilutive impact were excluded.
The antidilutive impact of 0.3 million and 0.5 million share-based awards for the three and nine months ended October 3, 2026, respectively, and 0.2
In connection with the acquisition of Silvus, the Seller will have the potential to earn contingent earnout consideration upon the achievement of certain financial targets payable in shares of common stock of up to $600 million in total, comprised 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 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 estimated fair value of the total contingent earnout consideration was $214 million as of October 3, 2026. The shares required to settle the contingent earnout consideration will only be reflected within diluted earnings per share when and if the earnout financial targets have been achieved, in each of the two respective periods.
Balance Sheet Information
Accounts Receivable, Net
Accounts receivable, net, consists of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||
| Accounts receivable | $ | $ | |||||||||
| Less allowance for credit losses | ( | ( | |||||||||
| $ | $ | ||||||||||
Inventories, Net
Inventories, net, consist of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Work-in-process and production materials | |||||||||||
| Less inventory reserves | ( | ( | |||||||||
| $ | $ | ||||||||||
14
Other Current Assets
Other current assets consist of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||
| 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:
| October 3, 2026 | December 31, 2025 | ||||||||||
| Land | $ | $ | |||||||||
| Leasehold improvements | |||||||||||
| Machinery and equipment | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
Depreciation expense was $53 million and $49 million for the three months ended October 3, 2026 and September 27, 2025, respectively. Depreciation expense for the nine months ended October 3, 2026 and September 27, 2025 was $159 million and $140 million, respectively.
Investments
Investments consist of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Common stock | $ | $ | |||||||||||||||||||||
| Strategic investments | |||||||||||||||||||||||
| Company-owned life insurance policies | |||||||||||||||||||||||
| Equity method investments | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
On July 1, 2026, the Company paid $100 million for a strategic investment in equity securities of BRINC Drones, Inc. (“BRINC”). BRINC is a leader in public safety drone technology. Strategic investments do not have readily determinable fair values and are carried at cost; adjustments resulting from observable price changes in orderly transactions for similar securities of the same issuer are recorded in Other, net within Other income (expense). During the nine months ended October 3, 2026, the Company recorded gains of $12 million related to net adjustments from observable price changes associated with BRINC.
Other Assets
| October 3, 2026 | December 31, 2025 | ||||||||||
| Defined benefit plan assets (Note 8) | $ | $ | |||||||||
| Non-current contract cost assets (Note 2) | |||||||||||
| Non-current long-term receivables (Note 11) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
15
Accounts Payable
The Company utilizes a supplier finance program which provides its 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 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 $61 million and $34 million as of October 3, 2026 and December 31, 2025, respectively. Supplier finance program obligations are classified as Accounts payable within the Condensed Consolidated Balance Sheets.
Accrued Liabilities
Accrued liabilities consist of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||
| Compensation | $ | $ | |||||||||
| Tax liabilities (Note 7) | |||||||||||
| Dividend payable | |||||||||||
| Trade liabilities | |||||||||||
| Operating lease liabilities (Note 3) | |||||||||||
| Customer reserves | |||||||||||
| External interest liabilities | |||||||||||
| Contingent earnout consideration (Note 10) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Other Liabilities
Other liabilities consist of the following:
| October 3, 2026 | December 31, 2025 | ||||||||||
| 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 | |||||||||||
| Contingent earnout consideration (Note 10) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Stockholders’ Equity
Share Repurchase Program: During the three and nine months ended October 3, 2026, the Company repurchased approximately 0.2 million and 1.3 million shares at an average price of $457.07 and $426.48 per share for an aggregate amount of $94 million and $538 million, respectively.
Payment of Dividends: During the three months ended October 3, 2026 and September 27, 2025, the Company paid $200 million and $182 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $201 million in cash dividends to holders of its common stock. During the nine months ended October 3, 2026 and September 27, 2025, the Company paid $602 million and $546 million, respectively, in cash dividends to holders of its common stock.
16
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 nine months ended October 3, 2026 and September 27, 2025:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Foreign Currency Translation Adjustments: | |||||||||||||||||||||||
| Balance at beginning of period | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassification adjustment | ( | ( | |||||||||||||||||||||
| Reclassification adjustment into Net earnings | ( | ( | $ | ( | $ | ( | |||||||||||||||||
| 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 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
17
5. Debt and Credit Facilities
| October 3, 2026 | December 31, 2025 | ||||||||||
| $ | $ | ||||||||||
Term loan due 2028 | |||||||||||
Commercial papers | |||||||||||
| Adjustments for unamortized gains on interest rate swap terminations | ( | ( | |||||||||
| Less: current portion | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
On August 17, 2026, the Company issued $350 million of 4.85 % senior notes due 2029 and $600 million of 5.65 % senior notes due 2036. The Company received net proceeds of approximately $942 million after debt issuance costs and discounts. The proceeds from the issuance of these notes were used to fund a portion of the acquisition of D-Fend.
On August 6, 2025, the Company borrowed $1.5 billion of senior delayed draw term loan facilities comprised of a $750 million 364 -day facility (the “2025 364-day facility”) and a $750 million -year facility ("term loan due 2028") to fund a portion of the acquisition of Silvus. On January 30, 2026, the Company repaid $200 million of the $750 million 2025 364 -day facility, reducing the outstanding principal balance to $550 million. On June 26, 2026, the Company exercised its option under the 364 -Day Term Loan Credit Agreement to extend the maturity of $250 million of the outstanding principal amount by year. On August 5, 2026, upon maturity of the 2025 364 -day facility, the Company repaid $300 million of the outstanding principal amount, with the remaining $250 million of the outstanding principal amount scheduled to mature in August 2027. Separately, on August 17, 2026, the Company borrowed $300 million under a new 364 -day term loan facility. The Company has the option to extend the maturity of up to $150 million of the outstanding principal amount of this new facility by year. The Company must comply with certain customary covenants with respect to each of the term loan facilities, including a maximum leverage ratio (as defined in each of the related credit agreements). The Company was in compliance with its financial covenants under these facilities as of October 3, 2026. During the three months ended October 3, 2026, the combined weighted average interest rate of both of the 364 -day facilities was 4.74 %, and the weighted average interest rate of the term loan due 2028 was 4.92 %.
The Company has an unsecured commercial paper program, backed by the 2025 Motorola Solutions Credit Agreement (as defined below), 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 October 3, 2026, the Company had $200 million outstanding debt under the commercial paper program, which had a weighted-average interest rate of 4.04 % during the three months ended October 3, 2026.
18
As of October 3, 2026, the Company had 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"). 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 October 3, 2026.
6. Risk Management
Foreign Currency Risk
The Company had outstanding foreign exchange contracts with notional amounts totaling $1.4 billion and $1.6 billion for the periods ended October 3, 2026 and December 31, 2025, 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 | October 3, 2026 | December 31, 2025 | |||||||||
| British Pound | $ | $ | |||||||||
| Euro | |||||||||||
| Canadian dollar | |||||||||||
| Australian dollar | ( | ( | |||||||||
| Danish krone | |||||||||||
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 October 3, 2026, all of the counterparties had investment grade credit ratings. As of October 3, 2026, the Company had $8 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 October 3, 2026 and December 31, 2025:
| Fair Values of Derivative Instruments | |||||||||||
| October 3, 2026 | Other Current Assets | Accrued Liabilities | |||||||||
| Derivatives designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Derivatives not designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Total derivatives | $ | $ | |||||||||
| Fair Values of Derivative Instruments | |||||||||||
| December 31, 2025 | Other Current Assets | Accrued Liabilities | |||||||||
| Derivatives designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Derivatives not designated as hedging instruments: | |||||||||||
| Foreign exchange contracts | $ | $ | |||||||||
| Total derivatives | $ | $ | |||||||||
19
The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and nine months ended October 3, 2026 and September 27, 2025:
| Financial Statement Location | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| Derivatives | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||
| Foreign exchange contracts | Accumulated other comprehensive income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||||
| Amortized hedge income | Other income (expense) | |||||||||||||||||||||||||
| Treasury rate lock settlement | 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 October 3, 2026, the Company had €175 million of net investment hedges in certain Euro functional subsidiaries.
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 October 3, 2026 was $24 million.
Treasury Rate Lock
In 2026, the Company entered into treasury rate agreements to protect against unfavorable interest rate changes relating to $300 million in future debt issuances. The treasury rate agreements are designated and qualified as cash flow hedges. The treasury rate agreements were terminated during the three months ended October 3, 2026, upon the Company's issuance of $600 million of 5.65 % senior notes due 2036, for a net settlement gain of $3 million. The accumulated gain recorded in Accumulated Other Comprehensive Income will be reclassified to Interest expense, net on a straight-line basis over the 10 -year term of such senior notes.
20
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 | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net earnings before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Effective tax rate | % | % | % | % | |||||||||||||||||||
The effective tax rates for the three and nine months ended October 3, 2026 of 24 % and 23 %, respectively, were higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation and the deduction for foreign-derived deduction-eligible income.
The effective tax rates for the three and nine months ended September 27, 2025 of 22 % and 23 %, respectively, were higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, partially offset by excess tax benefits of share-based compensation.
The effective tax rate for the three months ended October 3, 2026 of 24 % was higher than the effective tax rate for the three months ended September 27, 2025 of 22 %, primarily due to lower excess tax benefits of share-based compensation, partially offset by an increased deduction for foreign-derived deduction-eligible income. The effective tax rate for the nine months ended October 3, 2026 of 23 % was equal to the effective tax rate for the nine months ended September 27, 2025, primarily due to an increased deduction for foreign-derived deduction-eligible income, offset by lower excess tax benefits of share-based compensation.
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 impact the Company's tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. Certain provisions of this legislation were effective for the 2025 fiscal year, whereas other provisions became effective starting in 2026. For the nine months ended October 3, 2026, the impact of the enacted legislation on the Company's tax position was not material. The Company will continue to assess the ongoing impact of this legislation as further guidance is made available.
21
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 | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||
| Interest cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of: | |||||||||||||||||||||||||||||||||||
| Unrecognized net loss | |||||||||||||||||||||||||||||||||||
| Unrecognized prior service cost (benefit) | ( | ( | |||||||||||||||||||||||||||||||||
| Net periodic pension benefits | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||
| U.S. Pension Benefit Plans | Non-U.S. Pension Benefit Plans | Postretirement Health Care Benefits Plan | |||||||||||||||||||||||||||||||||
| Nine Months Ended | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | |||||||||||||||||||||||||||||
| 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 | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| 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 nine months ended October 3, 2026, the Company granted 0.5 million restricted stock units (RSUs), 0.1 million performance stock units (PSUs) and 0.04 million market stock units (MSUs) with an aggregate grant-date fair value of $244 million, $40 million and $20 million, respectively, and 0.2 million stock options and 0.1 million performance options (POs) with an aggregate grant-date fair value of $48 million and $20 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years .
22
The Company has various defined contribution plans, in which all eligible employees may participate. In the U.S., the Motorola Solutions 401(k) Plan (the "401(k) Plan") is a contributory plan. Matching contributions are based upon the amount of the employees’ contributions. Beginning January 1, 2026, the Company's matching contribution under the 401(k) Plan was made in Company common stock. During the three and nine months ended October 3, 2026, the Company issued 0.03 million and 0.09 million shares of common stock with an aggregate grant-date fair value of $12 million and $39 million, respectively, to fund the 401(k) Plan Company matching contribution.
10. Fair Value Measurements
The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of October 3, 2026 and December 31, 2025 were as follows:
| October 3, 2026 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | — | $ | ||||||||||||||||||
| Common stock and equivalents | |||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent earnout consideration (Note 15) | $ | $ | $ | $ | |||||||||||||||||||
| Foreign exchange derivative contracts | — | ||||||||||||||||||||||
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Foreign exchange derivative contracts | $ | $ | $ | — | $ | ||||||||||||||||||
| Common stock and equivalents | — | ||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent earnout consideration (Note 15) | $ | $ | $ | $ | |||||||||||||||||||
| Foreign exchange derivative contracts | — | ||||||||||||||||||||||
At October 3, 2026 and December 31, 2025, the Company had $412 million and $735 million, 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 debt as of October 3, 2026 was $9.7 billion. The fair value of debt as of December 31, 2025 was $9.2 billion.
In connection with the acquisition of Silvus, the Seller will have the potential to earn contingent earnout consideration upon the achievement of certain financial targets. Refer to Note 15, “Intangible Assets and Goodwill” in this “Part 1 – Financial Information” of this Form 10-Q for more information regarding the details of the contingent earnout consideration. The Company determines the fair value of the contingent earnout consideration liability using a Monte Carlo simulation model, which requires the use of Level 3 inputs, such as projected future net sales, gross margin and cash flows. At the acquisition date, the Company recorded a contingent liability of approximately $38 million, related to the estimated fair value of the contingent earnout consideration, which was included in the purchase price. As of October 3, 2026, the fair value of the contingent earnout consideration was estimated to be $214 million, resulting in charges of $87 million and $178 million recorded within Other Charges in the Company's Consolidated Statement of Operations during the three and nine months ended October 3, 2026, respectively. These non-cash charges are attributable to the Company's updated expectations regarding the achievement of the previously noted financial targets.
All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.
23
11. Sales of Receivables
Sales of Receivables
The following table summarizes the proceeds received from sales of long-term receivables for the three and nine months ended October 3, 2026 and September 27, 2025:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Accounts receivable sales proceeds | $ | $ | $ | $ | |||||||||||||||||||
| Long-term receivables sales proceeds | |||||||||||||||||||||||
| Total proceeds from receivable sales | $ | $ | $ | $ | |||||||||||||||||||
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, ultimately resulting in an award to the Company of $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.
In 2024, after both parties appealed to the U.S. Court of Appeals for the Seventh Circuit (the "Court of Appeals"), the Court of Appeals, among other items, affirmed the District Court's award of $407.4 million in damages under the Defend Trade Secrets Act, and directed the District Court to recalculate and reduce its award of $136.3 million in copyright infringement damages, which remains subject to ruling by the District Court. As of October 3, 2026, as a result of this civil litigation and 2020 bankruptcy proceedings by Hytera America, Inc. and Hytera Communications America (West), Inc., Hytera had paid $245 million against this award, $73 million of which was paid in the first nine months of 2026. These payments were recorded as a gain within Other charges within the Consolidated Statement of Operations.
Further, in 2022, the District Court ordered Hytera to pay the Company a forward-looking reasonable royalty on Hytera’s products (“I-Series”) that use the Company’s stolen trade secrets, applicable to I-Series products sold from July 1, 2019 forward. In 2024, the Company received royalties of $61 million related to the I-Series products, which was recorded as a gain within Other charges within the Consolidated Statement of Operations. Beginning in 2025, a favorable ruling in a related legal proceeding in the District Court (which Hytera has subsequently appealed to the Court of Appeals) also ordered Hytera to pay the Company for Hytera’s continued use of the Company’s trade secrets and copyrighted source code in Hytera’s currently shipping products (“H-Series”), and Hytera has subsequently reported to the Company approximately $116 million in royalties subject to the Court's order. While several aspects of the court proceedings related to the H-Series are subject to appeal, the Company continues to seek collection of the amounts owed by Hytera through the ongoing legal process.
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. At Hytera's sentencing on March 5, 2026, which included Hytera’s sentencing to years of probation, the District Court found that Hytera caused the Company to lose $214 million in profits, but that this restitution amount was offset in full by payments previously made by Hytera towards the civil judgment. As a condition of Hytera’s probation, the District Court ordered Hytera to pay the Company $100 million in 2026 towards the civil judgment and $100 million for each succeeding year until the civil judgment is paid in full. The District Court also fined Hytera $50 million, to be paid to the U.S. government after the Company's civil judgment is fully paid. The Company has appealed the District Court’s sentencing order.
Commitments
24
13. Segment Information
Significant Segment Expenses
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| 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 | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| 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 | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Products and Systems Integration | $ | $ | $ | $ | |||||||||||||||||||
| Software and Services | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Depreciation Expense by Segment
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Products and Systems Integration | $ | $ | $ | $ | |||||||||||||||||||
| Software and Services | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
25
14. Reorganization of Business
2026 Charges
During the three months ended October 3, 2026, the Company recorded net reorganization of business charges of $12 million, including $10 million of charges in Other charges and $2 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $12 million were charges of $13 million related to employee separation costs, partially offset by $1 million of reversals for employee separation accruals no longer needed.
During the nine months ended October 3, 2026, the Company recorded net reorganization of business charges of $42 million, including $30 million of charges in Other charges and $12 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $42 million were charges of $46 million related to employee separation costs, partially offset by $4 million of reversals for employee separation accruals no longer needed.
The following table displays the net charges incurred by segment:
| October 3, 2026 | Three Months Ended | Nine Months Ended | |||||||||
| Products and Systems Integration | $ | $ | |||||||||
| Software and Services | |||||||||||
| $ | $ | ||||||||||
Reorganization of Businesses Accruals
| January 1, 2026 | Additional Charges | Adjustments | Amount Used | October 3, 2026 | |||||||||||||||||||||||||
| Employee separation costs | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
Employee Separation Costs
At January 1, 2026, the Company had an accrual of $24 million for employee separation costs. The 2026 additional charges of $46 million represent severance costs for approximately 725 employees. The adjustment of $4 million reflects reversals for accruals no longer needed. The $41 million used reflects cash payments to severed employees. The remaining accrual of $25 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at October 3, 2026, is expected to be paid, primarily within one year, to approximately 650 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.
2025 Charges
During the three months ended September 27, 2025, the Company recorded net reorganization of business charges of $14 million, consisting of $12 million of charges in Other charges and $2 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 nine months ended September 27, 2025, the Company recorded net reorganization of business charges of $45 million, consisting of $33 million of charges in Other charges and $12 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $45 million were charges of $46 million related to employee separation costs and $2 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:
| September 27, 2025 | Three Months Ended | Nine Months Ended | |||||||||
| Products and Systems Integration | $ | $ | |||||||||
| Software and Services | |||||||||||
| $ | $ | ||||||||||
26
15. Intangible Assets and Goodwill
Silvus Acquisition
On August 6, 2025, the Company acquired Silvus from the Seller. Silvus designs and develops software-defined high-speed 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. The purchase price of $4.4 billion consisted of cash payments of $4.4 billion, net of cash acquired and customary purchase price adjustments, and contingent earnout consideration that had an estimated fair value as of the acquisition date of $38 million.
Under the terms of the transaction, the Seller will have the potential to earn contingent earnout consideration upon the achievement of certain financial targets of up to $600 million in total, comprised 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 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 contingent earnout consideration, if any, will be paid in shares of common stock. The Company valued the contingent earnout consideration using a Monte Carlo methodology which resulted in the Company recognizing $38 million in purchase consideration at the date of close in Other liabilities on the Company’s Condensed Consolidated Balance Sheet. Contingent earnout consideration will continue to be valued at fair value until settled. Changes to the fair value of the contingent earnout consideration will be recorded as a component of operating income within Other income, net in the Company's Consolidated Statement of Operations. For further information, refer to "Note 10: Fair Value Measurements" in this "Part I — Financial Information" of this Form 10-Q.
The Company recognized goodwill of $3.0 billion which was allocated primarily to the Products and Systems Integration segment. In addition, the Company recognized $1.9 billion of intangible assets and $411 million of net liabilities, inclusive of $454 million of deferred tax liabilities and $43 million of net tangible assets. Goodwill represents the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized including future customer relationships, new technology and the assembled workforce. The goodwill is not deductible for tax purposes.
The identifiable intangible assets were each classified primarily as one asset as follows: $135 million of trade names, $820 million of customer relationships and $920 million of developed technology which will be amortized over a period of , and years, respectively. The fair values of all intangible assets were estimated using the income approach. Customer relationships were valued under the excess earnings method, which assumes that the value of intangible assets is equal to the present value of the incremental after-tax cash flows attributable specifically to the intangible assets. Developed technology and trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them. The Company applies significant judgment in determining the estimates and assumptions used to estimate the fair values of the intangible assets, including the forecasted revenue growth rates, customer attrition rate, and discount rate for customer relationships and the forecasted revenue growth rates, royalty rate, and discount rate for developed technology.
This business is part of both the Products and Systems Integration segment and the Software and Services segment. The purchase accounting was completed as of the third quarter of 2026.
D-Fend Acquisition
On August 20, 2026, the Company acquired D-Fend for $1.3 billion, net of cash acquired. D-Fend provides advanced counter-drone technology. The Company issued restricted stock at a fair value of $76 million to certain key employees that will be expensed over a service period of three years . The acquisition strengthens the Company's ability to provide public safety and enterprise customers with access to advanced C-UAS designed to safely neutralize rogue drone threats. Additionally, in connection with this acquisition, the Company granted substitute stock option equity awards with a fair value of $50 million, of which $4 million attributable to pre-combination vesting was allocated to the purchase price consideration. The remaining fair value is attributable to post-combination vesting and will be recognized as compensation expense during the post-combination period. The Company recognized $759 million of goodwill, $645 million of identifiable intangible assets and $68 million of net liabilities. The goodwill is not deductible for tax purposes.
The identifiable intangible assets were classified as $20 million of trade names, $317 million of customer relationships and $308 million of developed technology and will be amortized over a period of , and twelve years , respectively. The fair values of all intangible assets were estimated using the income approach. Customer relationships were valued under the excess earnings method, which assumes that the value of intangible assets is equal to the present value of the incremental after-tax cash flows attributable specifically to the intangible assets. Developed technology and trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them. The Company applies significant judgment in determining the estimates and assumptions used to estimate the fair values of the intangible assets, including the forecasted revenue growth rates, customer attrition rate, and discount rate for customer relationships and the forecasted revenue growth rates, royalty rate, and discount rate for developed technology.
This business is part of both the Products and Systems Integration segment and 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.
27
Other Acquisitions
On August 28, 2026, the Company acquired DeepNeuronic for $29 million, net of cash acquired. DeepNeuronic provides AI software that turns live camera feeds into real-time operational insights. The Company issued restricted stock at a fair value of $9 million to certain key employees that will be expensed over a service period of three years . The acquisition enhances the Company's video security portfolio by integrating advanced AI capabilities into its video offerings. The Company recognized $28 million of goodwill, $2 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 $2 million of developed technology that will be amortized over a period of 10 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, intangible assets, net liabilities and goodwill may be subject to change.
On March 24, 2026, the Company acquired Hyper for $23 million, net of cash acquired. Hyper provides conversational, agentic AI designed to reduce the burden on understaffed PSAPs by handling non-emergency calls. The Company issued restricted stock at a fair value of $2 million to certain key employees that will be expensed over a service period of two years . The acquisition expands the Company's use of agentic AI across its Command Center portfolio and mission-critical AI, Assist. The Company recognized $22 million of goodwill, $2 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 $2 million of developed technology that will be amortized over a period of 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, intangible assets, net liabilities and goodwill may be subject to change.
On March 11, 2026, the Company acquired Exacom, a provider of cloud-native voice and multimedia recording and logging solutions for mission-critical communications for $67 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of two years . The acquisition enhances the Company's public safety ecosystem by consolidating call logs, recording 911 audio and radio traffic into a cloud-based solution to unify voice and video across the incident lifecycle. The Company recognized $47 million of goodwill, $34 million of identifiable intangible assets and $14 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $19 million of customer relationships and $14 million of developed technology and will be amortized over a period of , and 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 November 18, 2025, the Company acquired Blue Eye, a provider of AI-powered enterprise RVM services for $79 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $1 million to certain key employees that will be expensed over a service period of two years . The acquisition enhances the Company's video security portfolio, serving a wide range of enterprises with real-time intelligence to help reduce loss and damage, mitigate risk and boost profitability. The Company recognized $55 million of goodwill and $24 million of identifiable intangible assets. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $9 million of customer relationships and $15 million of developed technology and will be amortized over a period of and years, respectively. This 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 March 6, 2025, the Company acquired Theatro, a maker of AI and voice-powered communication and digital workflow software for frontline workers for $174 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 its portfolio, including body cameras, fixed video, panic buttons and radios. The Company recognized $117 million of goodwill, $48 million of identifiable intangible assets and $9 million of net assets. 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 years, respectively. The business is part of the Software and Services segment. The purchase accounting was completed as of the first quarter of 2026.
On February 21, 2025, the Company acquired RapidDeploy, a provider of cloud-native 911 solutions for public safety for $240 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 $132 million of goodwill, $117 million of identifiable intangible assets, and $9 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 years, respectively. The business is part of the Software and Services segment. The purchase accounting was completed as of the first quarter of 2026.
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Intangible Assets
| October 3, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||
| Developed technology | $ | $ | $ | $ | |||||||||||||||||||
| Customer-related | |||||||||||||||||||||||
| Trade name | |||||||||||||||||||||||
| Other intangibles | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Amortization expense on intangible assets was $97 million and $282 million for the three and nine months ended October 3, 2026, respectively. Amortization expense on intangible assets was $66 million and $142 million for the three and nine months ended September 27, 2025, respectively. The increase in amortization expense period over period is primarily related to amortization of the intangible assets associated with the Silvus acquisition. As of October 3, 2026, annual amortization expense is estimated to be $379 million in 2026, $392 million in 2027, $390 million in 2028, $379 million in 2029, $375 million in 2030 and $370 million in 2031.
Amortized intangible assets were comprised of the following by segment:
| October 3, 2026 | December 31, 2025 | ||||||||||||||||||||||
| 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, 2026 to October 3, 2026:
| Products and Systems Integration | Software and Services | Total | |||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ||||||||||||||
| Goodwill acquired | |||||||||||||||||
| Purchase accounting adjustments | ( | ||||||||||||||||
| Foreign currency | ( | ||||||||||||||||
| Balance as of October 3, 2026 | $ | $ | $ | ||||||||||||||
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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 nine months ended October 3, 2026 and September 27, 2025, 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, 2025 (the "Form 10-K").
Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q for the quarter ended October 3, 2026 (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 under the following headings: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the impact of changes in the global trade environment, the dynamic supply chain environment and the memory market on our business, and our actions in response thereto (including with respect to inventory levels); (b) the impact of acquisitions on our business; (c) our plans to assess the impact of changes to tax law on our business; (d) the return of capital to shareholders through dividends and/or repurchasing shares; (e) future payments, charges, and use of accruals associated with our reorganization of business programs and employee separation costs; (f) our ability to repatriate funds; (g) the liquidity of our investments; (h) our ability to access the capital markets; (i) our use of proceeds from the issuance of notes under our unsecured commercial paper program; (j) adequacy of internal resources to generate adequate amounts of cash to meet expected working capital, capital expenditure and cash requirements; and (k) future cash flows generated from operations, and future uses of cash, investments and debt facilities; and (2) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency risk; and (b) future hedging activity and expectations of the Company.
Executive Overview
Business Overview
The Company manages the business through two segments: “Products and Systems Integration” and “Software and Services.” Within these segments, the Company reports net sales across three principal product lines:
•MCN: Infrastructure, mobile ad-hoc network ("MANET") technology, devices (two-way radio and broadband, including both for public safety and professional and commercial radio ("PCR")), counter-unmanned aircraft systems (“C-UAS”), software and artificial intelligence ("AI")-powered capabilities. MCN includes installation and integration, backed by managed and support services, to help assure mission-critical communications availability, security and resiliency;
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, video monitoring, software and AI-powered analytics that enable visibility of events and focus attention on what's important, to inform faster and more accurate decisions and actions; and
•Command Center: Command center solutions, software applications and AI-powered capabilities, that unify voice and data from public safety agencies, enterprises and the community, enabling a broad informational view of operations and incidents while helping to accelerate workflows and improve the accuracy, speed and trust of decisions.
We have invested across these three technologies organically and through acquisitions to evolve our land mobile radio ("LMR") focus and expand our ecosystem of safety and security products and services. Across all three technologies, we offer AI-powered capabilities and software solutions, services such as cybersecurity subscription services and managed and support services.
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Third Quarter Financial Results
•Net sales were $3.4 billion in the third quarter of 2026 compared to $3.0 billion in the third quarter of 2025.
•Operating earnings were $777 million in the third quarter of 2026 compared to $770 million in the third quarter of 2025.
•Net earnings attributable to Motorola Solutions, Inc. was $512 million, or $3.06 per diluted common share, in the third quarter of 2026, compared to $562 million, or $3.33 per diluted common share, in the third quarter of 2025.
•Operating cash flow increased $1 million in the first nine months of 2026 compared to the first nine months of 2025, totaling $1.6 billion in both periods.
•We repurchased $538 million of common stock and paid $602 million in dividends in the first nine months of 2026.
Recent Events
Macroeconomic Environment Update
The global trade landscape continues to shift rapidly, including evolving tariffs and import/export regulations, such as restrictions around rare earth minerals, trade barriers and trade disputes.
On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). On April 20, 2026, the U.S. Customs and Border Protection launched a system to process IEEPA tariff refund claims. Following the implementation of this system, we have determined that the recovery of a portion of these refunds is now probable. Accordingly, during the nine months ended October 3, 2026, we recognized a favorable adjustment of approximately $70 million recorded within Cost of sales in our Condensed Consolidated Statements of Operations.
In addition, we are experiencing higher costs for memory in our products which is a result of substantial demand in the market driven by AI. 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 are actively managing our inventory and continue to work with our global supply base to mitigate our exposure to elevated volatility and uncertainty from these rising memory costs, as well as global tariffs and import/export regulations that have developed, and which may continue to develop, to ensure supply continues at levels necessary to meet our current customer demand. We expect inventory levels to remain elevated as we mitigate this dynamic supply chain environment. The current environment has led to increased costs on materials and components, for which we continue to develop mitigation actions going forward.
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Recent Acquisitions
| Segment(s) | Technology | Acquisition | Description | Purchase Price | Date of Acquisition | ||||||||||||
| Software and Services | Video Security and Access Control | DeepNeuronic | Provider of AI software that turns live camera feeds into real-time operational insights. | $29 million and share-based compensation of $9 million | August 28, 2026 | ||||||||||||
| Products and Systems Integration & Software and Services | Mission Critical Networks | D-Fend | Provider of advanced counter-drone technology. | $1.3 billion and share-based compensation of $76 million | August 20, 2026 | ||||||||||||
| Software and Services | Command Center | Hyper | Provider of conversational, agentic AI designed to reduce the burden on understaffed public safety answering points (PSAPs) by handling non-emergency calls. | $23 million and share-based compensation of $2 million | March 24, 2026 | ||||||||||||
| Software and Services | Command Center | Exacom | Provider of cloud-native voice and multimedia recording and logging solutions for mission-critical communications. | $67 million and share-based compensation of $1 million | March 11, 2026 | ||||||||||||
| Software and Services | Video Security and Access Control | Blue Eye | Provider of AI-powered enterprise remote video monitoring ("RVM") services. | $79 million and share-based compensation of $1 million | November 18, 2025 | ||||||||||||
| Products and Systems Integration & Software and Services | Mission Critical Networks | Silvus Technologies | Designer and developer of software-defined high-speed MANET technology. | $4.4 billion and share-based compensation of $20 million | August 6, 2025 | ||||||||||||
| Software and Services | Command Center | Theatro | Creator of AI and voice-powered communication and digital workflow software for frontline workers. | $174 million and share-based compensation of $5 million | March 6, 2025 | ||||||||||||
| Software and Services | Command Center | RapidDeploy | Provider of cloud-native 911 solutions. | $240 million and share-based compensation of $6 million | February 21, 2025 | ||||||||||||
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Results of Operations
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | October 3, 2026 | % of Sales* | September 27, 2025 | % of Sales* | October 3, 2026 | % of Sales* | September 27, 2025 | % of Sales* | |||||||||||||||||||||||||||||||||||||||
| Net sales from products | $ | 1,999 | $ | 1,751 | $ | 5,298 | $ | 4,731 | |||||||||||||||||||||||||||||||||||||||
| Net sales from services | 1,377 | 1,258 | 3,925 | 3,571 | |||||||||||||||||||||||||||||||||||||||||||
| Net sales | 3,376 | 3,009 | 9,223 | 8,302 | |||||||||||||||||||||||||||||||||||||||||||
| Costs of products sales | 800 | 40.0 | % | 728 | 41.6 | % | 2,130 | 40.2 | % | 1,948 | 41.2 | % | |||||||||||||||||||||||||||||||||||
| Costs of services sales | 808 | 58.7 | % | 727 | 57.8 | % | 2,285 | 58.2 | % | 2,087 | 58.4 | % | |||||||||||||||||||||||||||||||||||
| Costs of sales | 1,608 | 1,455 | 4,415 | 4,035 | |||||||||||||||||||||||||||||||||||||||||||
| Gross margin | 1,768 | 52.4 | % | 1,554 | 51.6 | % | 4,808 | 52.1 | % | 4,267 | 51.4 | % | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 504 | 14.9 | % | 485 | 16.1 | % | 1,439 | 15.6 | % | 1,371 | 16.5 | % | |||||||||||||||||||||||||||||||||||
| Research and development expenditures | 276 | 8.2 | % | 237 | 7.9 | % | 788 | 8.5 | % | 700 | 8.4 | % | |||||||||||||||||||||||||||||||||||
| Other charges | 211 | 6.3 | % | 62 | 2.1 | % | 470 | 5.1 | % | 152 | 1.8 | % | |||||||||||||||||||||||||||||||||||
| Operating earnings | 777 | 23.0 | % | 770 | 25.6 | % | 2,111 | 22.9 | % | 2,044 | 24.6 | % | |||||||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (107) | (3.2) | % | (86) | (2.9) | % | (315) | (3.4) | % | (192) | (2.3) | % | |||||||||||||||||||||||||||||||||||
| Other, net | 8 | 0.2 | % | 41 | 1.4 | % | 64 | 0.7 | % | 100 | 1.2 | % | |||||||||||||||||||||||||||||||||||
| Total other expense | (99) | (2.9) | % | (45) | (1.5) | % | (251) | (2.7) | % | (92) | (1.1) | % | |||||||||||||||||||||||||||||||||||
| Net earnings before income taxes | 678 | 20.1 | % | 725 | 24.1 | % | 1,860 | 20.2 | % | 1,952 | 23.5 | % | |||||||||||||||||||||||||||||||||||
| Income tax expense | 164 | 4.9 | % | 161 | 5.4 | % | 420 | 4.6 | % | 442 | 5.3 | % | |||||||||||||||||||||||||||||||||||
| Net earnings | 514 | 15.2 | % | 564 | 18.7 | % | 1,440 | 15.6 | % | 1,510 | 18.2 | % | |||||||||||||||||||||||||||||||||||
| Less: Earnings attributable to non-controlling interests | 2 | 0.1 | % | 2 | 0.1 | % | 5 | 0.1 | % | 5 | 0.1 | % | |||||||||||||||||||||||||||||||||||
| Net earnings attributable to Motorola Solutions, Inc. | $ | 512 | 15.2 | % | $ | 562 | 18.7 | % | $ | 1,435 | 15.6 | % | $ | 1,505 | 18.1 | % | |||||||||||||||||||||||||||||||
| Earnings per diluted common share | $ | 3.06 | $ | 3.33 | $ | 8.57 | $ | 8.89 | |||||||||||||||||||||||||||||||||||||||
* Percentages may not add due to rounding
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Results of Operations—Three months ended October 3, 2026 compared to three months ended September 27, 2025
The results of operations for the third quarter of 2026 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 | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
| Net sales by region: | |||||||||||||||||||||||||||||||||||
| North America | $ | 1,469 | $ | 860 | $ | 2,329 | $ | 1,360 | $ | 761 | $ | 2,121 | |||||||||||||||||||||||
| International | 649 | 398 | 1,047 | 537 | 351 | 888 | |||||||||||||||||||||||||||||
| $ | 2,118 | $ | 1,258 | $ | 3,376 | $ | 1,897 | $ | 1,112 | $ | 3,009 | ||||||||||||||||||||||||
Net sales by major products and services: | |||||||||||||||||||||||||||||||||||
| Mission Critical Networks (MCN) | $ | 1,784 | $ | 727 | $ | 2,511 | $ | 1,598 | $ | 643 | $ | 2,241 | |||||||||||||||||||||||
| Video | 334 | 260 | 594 | 299 | 235 | 534 | |||||||||||||||||||||||||||||
| Command Center | — | 271 | 271 | — | 234 | 234 | |||||||||||||||||||||||||||||
| $ | 2,118 | $ | 1,258 | $ | 3,376 | $ | 1,897 | $ | 1,112 | $ | 3,009 | ||||||||||||||||||||||||
| Operating earnings | $ | 446 | $ | 331 | $ | 777 | $ | 458 | $ | 312 | $ | 770 | |||||||||||||||||||||||
| Operating margins | 21.1 | % | 26.3 | % | 23.0 | % | 24.1 | % | 28.1 | % | 25.6 | % | |||||||||||||||||||||||
Net Sales
The Products and Systems Integration segment’s net sales represented 63% of our net sales in the third quarter of each of 2026 and 2025. The Software and Services segment’s net sales represented 37% of our net sales in the third quarter of each of 2026 and 2025.
Net sales increased $367 million, or 12%, in the third quarter of 2026 compared to the third quarter of 2025. The $221 million, or 12%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 21% in the International region and an increase of 8% in the North America region. The $146 million, or 13%, increase in net sales within the Software and Services segment was driven by an increase of 13% in both the North America and International regions. Net sales includes:
•an increase in the Products and Systems Integration segment, inclusive of $169 million of revenue from acquisitions, driven by an increase in MCN and Video;
•an increase in the Software and Services segment, inclusive of $42 million of revenue from acquisitions, driven by an increase in MCN, Command Center and Video; and
•inclusive of $11 million from favorable currency rates.
Regional results include:
•a 10% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center; and
•a 18% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center.
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Products and Systems Integration
The 12% increase in the Products and Systems Integration segment was driven by the following:
•$186 million, or 12%, growth in MCN, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$35 million, or 12%, growth in Video, driven by the International and North America regions; and
•inclusive of $7 million from favorable currency rates.
Software and Services
The 13% increase in the Software and Services segment was driven by the following:
•$84 million, or 13%, growth in MCN, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$37 million, or 16%, growth in Command Center, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$25 million, or 11%, growth in Video, inclusive of revenue from acquisitions, driven by the North America region and partially offset by the International region; and
•inclusive of $4 million from favorable currency rates.
Gross Margin
| Three Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
| Gross margin from Products and Systems Integration | $ | 1,159 | $ | 1,019 | 14 | % | |||||||||||
| Gross margin from Software and Services | 609 | 535 | 14 | % | |||||||||||||
| Gross margin | $ | 1,768 | $ | 1,554 | 14 | % | |||||||||||
Gross margin was 52.4% of net sales in the third quarter of 2026 compared to 51.6% in the third quarter of 2025. The primary drivers of this increase in gross margin as a percentage of net sales were:
•a 1.0% increase in gross margin as a percentage of net sales in the Products and Systems Integration segment, inclusive of acquisitions, primarily driven by higher sales, including favorable mix, partially offset by higher supply chain costs.
•a 0.3% increase in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, primarily driven by higher sales, including favorable mix.
Selling, General and Administrative ("SG&A") Expenses
| Three Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
| SG&A expenses from Products and Systems Integration | $ | 396 | $ | 384 | 3 | % | |||||||||||
| SG&A expenses from Software and Services | 108 | 101 | 7 | % | |||||||||||||
| SG&A expenses | $ | 504 | $ | 485 | 4 | % | |||||||||||
SG&A expenses increased 4% in the third quarter of 2026 compared to the third quarter of 2025 primarily driven by:
•a $12 million, or 3%, increase in Products and Systems Integration SG&A expenses primarily due to higher expenses associated with acquired businesses, partially offset by lower expenses related to legal matters, including Hytera-related expenses; and
•a $7 million, or 7%, increase in Software and Services SG&A expenses primarily due to higher expenses associated with acquired businesses.
SG&A expenses were 14.9% of net sales in the third quarter of 2026 compared to 16.1% of net sales in the third quarter of 2025.
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Research and Development ("R&D") Expenditures
| Three Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
| R&D expenditures from Products and Systems Integration | $ | 165 | $ | 146 | 13 | % | |||||||||||
| R&D expenditures from Software and Services | 111 | 91 | 22 | % | |||||||||||||
| R&D expenditures | $ | 276 | $ | 237 | 16 | % | |||||||||||
R&D expenditures increased 16% in the third quarter of 2026 compared to the third quarter of 2025 primarily driven by:
•a $20 million, or 22%, increase in Software and Services R&D expenditures primarily due to investments in Video, higher expenses associated with acquired businesses, and higher employee incentive costs, including share-based compensation; and
•a $19 million, or 13%, increase in Products and Systems Integration R&D expenditures primarily due to higher expenses associated with acquired businesses and higher employee incentive costs, including share-based compensation.
R&D expenditures were 8.2% of net sales in the third quarter of 2026 compared to 7.9% of net sales in the third quarter of 2025.
Other Charges
| Three Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Other charges from Products and Systems Integration | $ | 152 | $ | 31 | |||||||
| Other charges from Software and Services | 59 | 31 | |||||||||
| Other charges | $ | 211 | $ | 62 | |||||||
Other charges increased $149 million in the third quarter of 2026 compared to the third quarter of 2025. The increase was primarily driven by:
•an $87 million contingent earnout charge related to the Silvus acquisition in the third quarter of 2026 that did not occur in the third quarter of 2025;
•a $13 million gain on Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets recognized in the third quarter of 2026 compared to $74 million of gains on Hytera litigation in the third quarter of 2025; and
•$97 million of intangible amortization expense in the third quarter of 2026 compared to $66 million of intangible amortization expense in the third quarter of 2025; partially offset by
•$29 million of acquisition related transaction fees in the third quarter of 2026 compared to $55 million of acquisition related transaction fees in the third quarter of 2025, primarily related to the acquisition of Silvus.
Operating Earnings
| Three Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Operating earnings from Products and Systems Integration | $ | 446 | $ | 458 | |||||||
| Operating earnings from Software and Services | 331 | 312 | |||||||||
| Operating earnings | $ | 777 | $ | 770 | |||||||
Operating earnings increased $7 million, or 1%, in the third quarter of 2026 compared to the third quarter of 2025. The increase in Operating earnings was due to:
•a $19 million increase in the Software and Services segment, primarily driven by higher sales, including favorable mix, partially offset by higher expenses associated with acquired businesses and an increase in intangible amortization expense; partially offset by
•a $12 million decrease in the Products and Systems Integration segment, primarily driven by a contingent earnout charge related to the Silvus acquisition, lower gains recognized from ongoing Hytera litigation recoveries, and higher supply chain costs, partially offset by higher sales, including favorable mix.
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Interest Expense, net
| Three Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Interest expense, net | $ | (107) | $ | (86) | |||||||
The $21 million increase in Interest expense, net in the third quarter of 2026 compared to the third quarter of 2025 was primarily driven by higher outstanding debt and lower interest income.
Other, net
| Three Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Other, net | $ | 8 | $ | 41 | |||||||
The $33 million decrease in Other, net in the third quarter of 2026 compared to the third quarter of 2025 was primarily driven by:
•a $9 million loss on fair value adjustments to equity investments in the third quarter of 2026 compared to a $8 million gain on fair value adjustments to equity investments in the third quarter of 2025;
•a $4 million loss on foreign currency in the third quarter of 2026 compared to a $4 million gain on foreign currency in the third quarter of 2025; and
•$25 million of net periodic pension and postretirement benefit in the third quarter of 2026 compared to $31 million of net periodic pension and postretirement benefit in the third quarter of 2025.
Effective Tax Rate
| Three Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Income tax expense | $ | 164 | $ | 161 | |||||||
The effective tax rate for the three months ended October 3, 2026 of 24% was higher than the effective tax rate for the three months ended September 27, 2025 of 22%, primarily due to lower excess tax benefits of share-based compensation, partially offset by an increased deduction for foreign-derived deduction-eligible income.
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 impact our tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. Certain provisions of this legislation were effective for the 2025 fiscal year, whereas other provisions became effective starting in 2026. For the three months ended October 3, 2026, the impact of the enacted legislation on our tax position was not material. We plan to continue to assess the ongoing impact of this legislation as further guidance is made available.
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Results of Operations—Nine months ended October 3, 2026 compared to Nine months ended September 27, 2025
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| (In millions) | Products and Systems Integration | Software and Services | Total | Products and Systems Integration | Software and Services | Total | |||||||||||||||||||||||||||||
Net sales by region: | |||||||||||||||||||||||||||||||||||
| North America | $ | 3,895 | $ | 2,501 | $ | 6,396 | $ | 3,789 | $ | 2,211 | $ | 6,000 | |||||||||||||||||||||||
| International | 1,691 | 1,136 | 2,827 | 1,306 | 996 | 2,302 | |||||||||||||||||||||||||||||
| $ | 5,586 | $ | 3,637 | $ | 9,223 | $ | 5,095 | $ | 3,207 | $ | 8,302 | ||||||||||||||||||||||||
| Net sales by major products and services: | |||||||||||||||||||||||||||||||||||
| Mission Critical Networks (MCN) | $ | 4,639 | $ | 2,120 | $ | 6,759 | $ | 4,269 | $ | 1,878 | $ | 6,147 | |||||||||||||||||||||||
| Video | 947 | 740 | 1,687 | 826 | 672 | 1,498 | |||||||||||||||||||||||||||||
| Command Center | — | 777 | 777 | — | 657 | 657 | |||||||||||||||||||||||||||||
| $ | 5,586 | $ | 3,637 | $ | 9,223 | $ | 5,095 | $ | 3,207 | $ | 8,302 | ||||||||||||||||||||||||
| Operating earnings | $ | 1,112 | $ | 999 | $ | 2,111 | $ | 1,173 | $ | 871 | $ | 2,044 | |||||||||||||||||||||||
| Operating margins | 19.9 | % | 27.5 | % | 22.9 | % | 23.0 | % | 27.2 | % | 24.6 | % | |||||||||||||||||||||||
Net Sales
The Products and Systems Integration segment's net sales represented 61% of our net sales in the first nine months of each of 2026 and 2025. Net sales from the Software and Services segment represented 39% of our net sales in the first nine months of each of 2026 and 2025.
Net sales increased $921 million, or 11%, in the first nine months of 2026 compared to the first nine months of 2025. The $491 million, or 10%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 29% in the International region and an increase of 3% in the North America region. The $430 million, or 13%, 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 14% in the International region. Net sales includes:
•an increase in the Products and Systems Integration segment, inclusive of $562 million of revenue from acquisitions, driven by an increase in MCN and Video;
•an increase in the Software and Services segment, inclusive of $112 million of revenue from acquisitions, driven by an increase in MCN, Command Center and Video; and
•inclusive of $105 million from favorable currency rates.
Regional results include:
•a 23% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center; and
•a 7% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center.
Products and Systems Integration
The 10% increase in the Products and Systems Integration segment was driven by the following:
•$370 million, or 9% growth in MCN, inclusive of revenue from acquisitions, driven by the International and North America regions;
•$121 million, or 15% growth in Video, driven by the North America and International regions; and
•inclusive of $56 million from favorable currency rates.
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Software and Services
The 13% increase in the Software and Services segment was driven by the following:
•$242 million, or 13% growth in MCN, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$120 million, or 18% growth in Command Center, inclusive of revenue from acquisitions, driven by the North America and International regions;
•$68 million, or 10% growth in Video, inclusive of revenue from acquisitions, driven by the North America and International regions; and
•inclusive of $49 million from favorable currency rates.
Gross Margin
| Nine Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
Gross margin from Products and Systems Integration | $ | 3,032 | $ | 2,746 | 10 | % | |||||||||||
Gross margin from Software and Services | 1,776 | 1,521 | 17 | % | |||||||||||||
| Gross margin | $ | 4,808 | $ | 4,267 | 13 | % | |||||||||||
Gross margin was 52.1% of net sales in the first nine months of 2026 compared to 51.4% in the first nine months of 2025. 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 Products and Systems Integration segment, inclusive of acquisitions, primarily driven by higher sales, including favorable mix, and IEEPA tariff refunds, partially offset by higher supply chain costs; and
•a 1.4% increase in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, primarily driven by higher sales, including favorable mix.
Selling, General and Administrative ("SG&A") Expenses
| Nine Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
SG&A expenses from Products and Systems Integration | $ | 1,126 | $ | 1,079 | 4 | % | |||||||||||
SG&A expenses from Software and Services | 313 | 292 | 7 | % | |||||||||||||
SG&A expenses | $ | 1,439 | $ | 1,371 | 5 | % | |||||||||||
SG&A expenses increased 5% in the first nine months of 2026 compared to the first nine months of 2025 primarily driven by:
•a $47 million, or 4%, increase in Products and Systems Integration SG&A expenses primarily due to higher expenses associated with acquired businesses and higher employee incentive costs, including share-based compensation, partially offset by lower expenses related to legal matters, including Hytera-related expenses; and
•a $21 million, or 7%, increase in Software and Services SG&A expenses primarily due to higher expenses associated with acquired businesses and higher employee incentive costs, including share-based compensation, partially offset by lower expenses related to legal matters.
SG&A expenses were 15.6% of net sales in the first nine months of 2026 compared to 16.5% of net sales in the first nine months of 2025.
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Research and Development ("R&D") Expenditures
| Nine Months Ended | |||||||||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | % Change | ||||||||||||||
R&D expenditures from Products and Systems Integration | $ | 470 | $ | 430 | 9 | % | |||||||||||
R&D expenditures from Software and Services | 318 | 270 | 18 | % | |||||||||||||
R&D expenditures | $ | 788 | $ | 700 | 13 | % | |||||||||||
R&D expenditures increased 13% in the first nine months of 2026 compared to the first nine months of 2025 primarily driven by:
•a $48 million, or 18%, increase in Software and Services R&D expenditures primarily due to investments in Video, higher expenses associated with acquired businesses, and higher employee incentive costs, including share-based compensation; and
•a $40 million, or 9%, increase in Products and Systems Integration R&D expenditures primarily due to higher expenses associated with acquired businesses and higher employee incentive costs, including share-based compensation.
R&D expenditures were 8.5% of net sales in the first nine months of 2026 compared to 8.4% of net sales in the first nine months of 2025.
Other Charges
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
Other charges from Products and Systems Integration | $ | 324 | $ | 64 | |||||||
Other charges from Software and Services | 146 | 88 | |||||||||
| Other charges | $ | 470 | $ | 152 | |||||||
Other charges increased by $318 million in the first nine months of 2026 compared to the first nine months of 2025. The increase was driven primarily by:
•$178 million of contingent earnout charges related to the Silvus acquisition in the first nine months of 2026 that did not occur in the first nine months of 2025;
•$282 million of intangible amortization expense in the first nine months of 2026 compared to $142 million of intangible amortization expense in the first nine months of 2025, an increase primarily due to amortization of intangible assets from the acquisition of Silvus; and
•$73 million of gains on the Hytera litigation for the amounts recovered through legal proceedings due to the theft of our trade secrets in the first nine months of 2026 compared to $94 million of gains on Hytera litigation in the first nine months of 2025; partially offset by
•$42 million of acquisition related transaction fees in the first nine months of 2026 compared to $63 million of acquisition related transaction fees in the first nine months of 2025.
Operating Earnings
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Operating earnings from Products and Systems Integration | $ | 1,112 | $ | 1,173 | |||||||
| Operating earnings from Software and Services | 999 | 871 | |||||||||
| Operating earnings | $ | 2,111 | $ | 2,044 | |||||||
Operating earnings increased $67 million, or 3%, in the first nine months of 2026 compared to the first nine months of 2025. The increase in Operating earnings was due to:
•a $128 million increase in the Software and Services segment, primarily driven by higher sales, including favorable mix and improved operating leverage, partially offset by higher employee incentive costs, including share-based compensation, higher expenses associated with acquired businesses, and an increase in intangible amortization expense; partially offset by
•a $61 million decrease in the Products and Systems Integration segment, primarily driven by contingent earnout charges related to the Silvus acquisition, an increase in intangible amortization expense, higher supply chain costs, and higher expenses associated with acquired businesses, partially offset by higher sales including favorable mix, IEEPA tariff refunds, and lower expenses related to legal matters, including Hytera-related expenses.
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Interest Expense, net
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Interest expense, net | $ | (315) | $ | (192) | |||||||
The $123 million increase in Interest expense, net in the first nine months of 2026 compared to the first nine months of 2025 was primarily driven by higher outstanding debt.
Other, net
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Other, net | $ | 64 | $ | 100 | |||||||
The $36 million decrease in Other, net in the first nine months of 2026 compared to the first nine months of 2025 was primarily driven by:
•a $47 million loss on derivative instruments in the first nine months of 2026 compared to a $41 million gain on derivative instruments in the first nine months of 2025;
•a $1 million loss on fair value adjustments to equity investments in the first nine months of 2026 compared to a $21 million gain on fair value adjustments to equity investments in the first nine months of 2025; and
•$76 million of net periodic pension and postretirement benefit in the first nine months of 2026 compared to $92 million of net periodic pension and postretirement benefit in the first nine months of 2025; partially offset by
•a $31 million gain on foreign currency in the first nine months of 2026 compared to a $57 million loss on foreign currency in the first nine months of 2025.
Effective Tax Rate
| Nine Months Ended | |||||||||||
| (In millions) | October 3, 2026 | September 27, 2025 | |||||||||
| Income tax expense | $ | 420 | $ | 442 | |||||||
The effective tax rate for the nine months ended October 3, 2026 of 23% was equal to the effective tax rate for the nine months ended September 27, 2025, primarily due to an increased deduction for foreign-derived deduction-eligible income, offset by lower excess tax benefits of share-based compensation.
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 impact our tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. Certain provisions of this legislation were effective for the 2025 fiscal year, whereas other provisions became effective starting in 2026. For the nine months ended October 3, 2026, the impact of the enacted legislation on our tax position was not material. We plan to continue to assess the ongoing impact of this legislation as further guidance is made available.
Reorganization of Business
During the third quarter of 2026, we recorded net reorganization of business charges of $12 million, including $10 million of charges recorded within Other charges and $2 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations related to employee separation costs. Included in the $12 million were charges of $13 million related to employee separation costs, partially offset by $1 million of reversals for employee separation accruals no longer needed.
During the first nine months of 2026, we recorded net reorganization of business charges of $42 million, including $30 million of charges recorded within Other charges and $12 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations. Included in the $42 million were charges of $46 million related to employee separation costs, partially offset by $4 million of reversals for employee separation accruals no longer needed.
During the third quarter of 2025, we recorded net reorganization of business charges of $14 million, including $12 million of charges recorded within Other charges and $2 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 nine months of 2025, we recorded net reorganization of business charges of $45 million, including $33 million of charges recorded within Other charges and $12 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations. Included in the $45 million were charges of $46 million related to employee separation costs and $2 million related to exit costs, partially offset by $3 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 | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Products and Systems Integration | $ | 9 | $ | 9 | $ | 30 | $ | 31 | |||||||||||||||
| Software and Services | 3 | 5 | 12 | 14 | |||||||||||||||||||
| $ | 12 | $ | 14 | $ | 42 | $ | 45 | ||||||||||||||||
Cash payments for employee severance in connection with the reorganization of business plans were $41 million in the first nine months of 2026 and $48 million in the first nine months of 2025. The reorganization of business accrual at October 3, 2026 was $25 million related to employee separation costs that are expected to be paid primarily within one year.
Liquidity and Capital Resources
| Nine Months Ended | |||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||
| Cash flows provided by (used for): | |||||||||||
| Operating activities | $ | 1,582 | $ | 1,581 | |||||||
| Investing activities | (1,768) | (4,972) | |||||||||
| Financing activities | (163) | 2,111 | |||||||||
| Effect of exchange rates on cash and cash equivalents | (42) | 72 | |||||||||
Decrease in cash and cash equivalents | $ | (391) | $ | (1,208) | |||||||
Cash and Cash Equivalents
At October 3, 2026, $490 million of the $774 million cash and cash equivalents balance was held in the U.S. and $284 million was held in other countries.
Operating Activities
Cash flows provided by operating activities increased by $1 million in the first nine months of 2026 compared to the first nine months of 2025, totaling $1.6 billion in both periods, driven primarily by:
•Expanded operating earnings of $67 million driven by an increase in net sales and gross profit, inclusive of higher non-cash charges of $445 million which included contingent earnout charges related to the Silvus acquisition, depreciation and intangible asset amortization expense and share-based compensation expense; partially offset by
•An increase in cash paid for income and withholding taxes, net of refunds, of $61 million, primarily driven by higher cash tax payments on our U.S. federal income tax return;
•An increase of $164 million in cash paid for interest driven by elevated levels of outstanding debt issued in connection with the funding of the Silvus acquisition in 2025;
•An increase of $50 million in cash paid for employee contributions into the employee stock purchase plan due to timing of the settlement window; and
•An increase in cash used for working capital, primarily due to higher investments in inventory of $396 million to provide operational flexibility to respond to customer demand and mitigate production risks associated with supply chain volatility, partially offset by improved collections of trade receivables and favorable billing terms across our contract assets and contract liabilities, which contributed $320 million year over year.
Investing Activities
The decrease in cash flows used for investing activities in the first nine months of 2026 compared to the first nine months of 2025 was due to a $3.2 billion decrease in cash used for acquisitions and investments, primarily reflecting the acquisition of D-Fend for $1.3 billion in 2026 compared to the acquisition of Silvus for $4.4 billion in 2025.
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Financing Activities
The increase in cash flows used for financing activities in the first nine months of 2026 compared to the cash flows provided by financing activities in the first nine months of 2025 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):
•$1.8 billion decrease in net proceeds from the issuance of debt in the first nine months of 2026 driven by the issuance of our 4.85% senior notes due 2029 and 5.65% senior notes due 2036 compared to the issuance of debt in the first nine months of 2025 driven by the issuance of our 4.85% senior notes due 2030, 5.2% senior notes due 2032, 5.55% senior notes due 2035, and term loan due 2028 (defined below);
•$423 million decrease in net proceeds from short-term borrowings, including commercial paper, in the first nine months of 2026 compared to the first nine months of 2025;
•$178 million increase in the repayment of short-term debt driven by the partial repayment of our 2025 364-day facility in the first nine months of 2026 compared to the repayment of our 7.5% debentures and 6.5% debentures in the first nine months of 2025; and
•$56 million increase in the payment of dividends in the first nine months of 2026 compared to the first nine months of 2025; partially offset by
•$121 million decrease in cash used for the purchase of common stock in the first nine months of 2026 compared to the first nine months of 2025; and
•$48 million increase in cash provided by the issuance of common stock in the first nine months of 2026 compared to the first nine months of 2025.
Sales of Receivables
The following table summarizes the proceeds received from sales of long-term customer financing receivables for the three and nine months ended October 3, 2026 and September 27, 2025:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Accounts receivable sales proceeds | $ | — | $ | 19 | $ | 35 | $ | 19 | |||||||||||||||
| Long-term receivables sales proceeds | 76 | 58 | 181 | 171 | |||||||||||||||||||
| Total proceeds from receivable sales | $ | 76 | $ | 77 | $ | 216 | $ | 190 | |||||||||||||||
Debt
We had outstanding debt of $10.1 billion at October 3, 2026, of which $750 million was current. We had outstanding debt of $9.2 billion at December 31, 2025, of which $749 million was current.
On August 17, 2026, we issued $350 million of 4.85% senior notes due 2029 and $600 million of 5.65% senior notes due 2036. We received net proceeds of approximately $942 million after debt issuance costs and discounts. The proceeds from the issuance of these notes were used to fund a portion of the acquisition of D-Fend.
On August 6, 2025, we borrowed $1.5 billion of senior delayed draw term loan facilities comprised of a $750 million 364-day facility (the “2025 364-day facility”) and a $750 million three-year facility ("term loan due 2028") to fund a portion of the acquisition of Silvus. On January 30, 2026, we repaid $200 million of the $750 million 2025 364-day facility, reducing the outstanding principal balance to $550 million. On June 26, 2026, we exercised our option under the 364-Day Term Loan Credit Agreement to extend the maturity of $250 million of the outstanding principal amount by one year. On August 5, 2026, upon maturity of the 2025 364-day facility, we repaid $300 million of the outstanding principal amount, with the remaining $250 million of the outstanding principal amount scheduled to mature in August 2027. Separately, on August 17, 2026, we borrowed $300 million under a new 364-day term loan facility. We have the option to extend the maturity of up to $150 million of the outstanding principal amount of this new facility by one year. We must comply with certain customary covenants with respect to each of the term loan facilities, including a maximum leverage ratio (as defined in each of the related credit agreements). We were in compliance with our financial covenants under these facilities as of October 3, 2026. During the three months ended October 3, 2026, the combined weighted average interest rate of both of the 364-day facilities was 4.74%, and the weighted average interest rate of the term loan due 2028 was 4.92%.
We have an unsecured commercial paper program, backed by the 2025 Motorola Solutions Credit Agreement (as defined below), 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. 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 October 3, 2026, we had $200 million outstanding debt under the commercial paper program, which had a weighted-average interest rate of 4.04% during the three months ended October 3, 2026.
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We have 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"). 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 October 3, 2026.
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
Through a series of actions, including approval in September 2026 to increase the authorized amount by $2.0 billion, the Board of Directors has authorized an aggregate share repurchase amount of up to $20.0 billion of our outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. During the three and nine months ended October 3, 2026, we repurchased approximately 0.2 million and 1.3 million shares at an average price of $457.07 and $426.48 per share for an aggregate amount of $94 million and $538 million, respectively, excluding transaction costs and excise tax. As of October 3, 2026, we had used approximately $17.5 billion of the share repurchase authority to repurchase shares, leaving $2.5 billion of authority available for future repurchases.
Dividends
During the three and nine months ended October 3, 2026, we paid $200 million and $602 million, respectively, in cash dividends to holders of our common stock. Subsequent to the end of the quarter, we paid an additional $201 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.
Long-Term Customer Financing Commitments
We had outstanding commitments to provide long-term financing to third parties totaling $350 million at October 3, 2026, compared to $179 million at December 31, 2025.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” and "Recently Adopted 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 nine months ended October 3, 2026. 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.
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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 October 3, 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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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.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On August 28, 2026, the Company issued 18,872 shares of common stock in connection with the acquisition of DeepNeuronic to certain former shareholders of DeepNeuronic. The stock was issued for an aggregate grant date fair value of $9 million that will be expensed over an average service period of three years.
On August 20, 2026, the Company issued 168,674 shares of common stock in connection with the acquisition of D-Fend to certain former shareholders of D-Fend. The stock was issued for an aggregate grant date fair value of $76 million that will be expensed over an average service period of three 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 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 October 3, 2026.
| 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) | |||||||||||||||||||
| 7/2/2026 to 7/30/2026 | 21,857 | $ | 406.41 | 21,857 | $ | 630,178,562 | |||||||||||||||||
| 7/31/2026 to 8/27/2026 | 11,568 | $ | 486.32 | 11,568 | $ | 624,552,848 | |||||||||||||||||
| 8/28/2026 to 10/1/2026 | 173,215 | $ | 461.50 | 173,215 | $ | 2,544,613,528 | |||||||||||||||||
| Total | 206,640 | $ | 457.07 | 206,640 | |||||||||||||||||||
(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 October 3, 2026.
(2)As originally announced on July 28, 2011, and subsequently amended, including a $2.0 billion increase approved by the Board of Directors during the third quarter of 2026, the Board of Directors has authorized the Company to repurchase an aggregate amount of up to $20.0 billion of its outstanding shares of common stock (the “share repurchase program”). The share repurchase program does not have an expiration date. As of October 3, 2026, the Company had used approximately $17.5 billion to repurchase shares, leaving $2.5 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 October 3, 2026, no director or officer of the Company adopted terminated
47
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. ©2026 Motorola Solutions, Inc. All rights reserved. | |||||
48
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) | |||||||||||
November 4, 2026
49
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: November 4, 2026
| /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: November 4, 2026
| /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 October 3, 2026 (the “Quarterly Report”), which this statement accompanies fully complies with the requirements of Section 13(a) or Section 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: November 4, 2026
| /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 October 3, 2026 (the “Quarterly Report”), which this statement accompanies fully complies with the requirements of Section 13(a) or Section 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: November 4, 2026
| /s/ JASON J. WINKLER | |||||
| Jason J. Winkler | |||||
| Executive Vice President and Chief Financial Officer | |||||
| Motorola Solutions, Inc. | |||||