Motorola Solutions Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Timothy Long - Barclays Bank - Analyst : Thank you. Yes, two, if I could. Greg, you talked about kind of sustainability of growth into 2026. Curious if you can dig into that a little bit more maintaining this last few years has been kind of high single-digit growth rate. Obviously, you are adding Silvus which is a little inorganic. But can you just give us a sense of what you're seeing as the real puts and takes and what could keep this growth rate above where it had been historically, kind of in line with the last few years. That would be helpful. And then the second one, SVX has been out for a little while. If you could just maybe give us a little sense on how that's doing? And related to it, if you could kind of update us on what you're seeing from software and applications on the APX NEXT, so kind of a little bit on the the newer products and technologies that are out and how they're doing? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2025 / 9:00PM, MSI.N - Q3 2025 Motorola Solutions Inc Earnings Call

Question: Timothy Long - Barclays Bank - Analyst : Thank you guys.

Question: Timothy Long - Barclays Bank - Analyst : Okay. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2025 / 9:00PM, MSI.N - Q3 2025 Motorola Solutions Inc Earnings Call

Question: Tomer Zilberman - BofA Securities - Analyst : Hey guys, If I do some back of the envelope calculations using your commentary from last quarter that Silvus would be about $185 million this year and the reported acquisition-related revenues from this quarter. I get that the core business grew about 5% this quarter, and I think guiding to 8% next quarter. I guess the question is a two-parter. One, how is Silvus faring versus the 20% growth outline you gave us? And is there anything embedded in the core growth maybe in terms that gives you pause as it relates to the government shutdown as we look into next quarter and 2026?

Question: Tomer Zilberman - BofA Securities - Analyst : Thanks. And maybe just following up on is there anything that might give you pause in any of your segments as it relates to the government shutdown?

Question: Tomer Zilberman - BofA Securities - Analyst : Great. Thank you so much.

Question: Joseph Cardoso - JPMorgan Chase & Co - Analyst : Hey, good afternoon, everyone. Thanks for the questions here. Maybe just for the first one, pretty big product order or backlog number this quarter. Is there any way you can contextualize or give us a little bit of color on the contribution from Silvus and whether you're actually starting to see any of [OBBBA] funding tailwinds there just yet? And then maybe just as a second part to that, given we're already at the mid 3s that you provided last quarter, any updated thoughts on how you're thinking about product backlog exiting the year? And then I have a follow-up.

Question: Joseph Cardoso - JPMorgan Chase & Co - Analyst : Got it. Super helpful color there. And then maybe as a follow-up, as we think about the various growth drivers that you're highlighting, particularly on the product side of the portfolio. It seems like there's a lot of irons in the fire here. Many parts of the portfolio are doing well and are expected to do well going into next year. As we think about that evolving product mix, how should we think about the implications to product margins from a high level? Not asking you to guide next year, but just trying to think about as we think -- try to contemplate all these different moving parts across the portfolio. How should we be thinking about the gross margin trajectory here, particularly as it relates to the product portion of the portfolio? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2025 / 9:00PM, MSI.N - Q3 2025 Motorola Solutions Inc Earnings Call

Question: Joseph Cardoso - JPMorgan Chase & Co - Analyst : No, got it, guys. Thanks for all the color. I appreciate it.

Question: Andrew Spinola - UBS Investment Bank - Analyst : I wanted to follow up on the comments you just made about the tariffs in the second half and the ability to still raise margins. I think this is going to be about your third year in a row with incremental margins at the operating line of over 40%. And you made the comment that mix is helping and I don't know. Is that -- are you making the comment that it's a temporary shift in mix because I'm getting a sense that there's a longer-term shift obviously to more software and APX NEXT apps. A number of things you've highlighted. So I'm trying to understand, it seems like there's something fundamentally changing in the business. You're outperforming the tariffs and still raising margins. So I'm just wondering if we can think about the 40% incremental margin as where the business can deliver going forward from here?

Question: Andrew Spinola - UBS Investment Bank - Analyst : Thanks. The only other thing --

Question: Andrew Spinola - UBS Investment Bank - Analyst : Got it. And just one follow-up. You've talked about the new introduction on the infrastructure side of the -- into the ASTRO platform. I was just wondering, given if I'm not wrong, the upgrade cycle there is very long, possibly 10, 20 years. And I'm just wondering if with your client base knowing that, that upgrade was coming, did that create somewhat of a pause on the infrastructure side prior to the release? And are we going to see a little bit of pent-up demand on infrastructure with that new product in the market? Thank you.

Question: Andrew Spinola - UBS Investment Bank - Analyst : Got it. Appreciate the color. Thank you.

Question: George Notter - Wolfe Research - Analyst : Hey guys, thanks very much. I appreciate it. I want to just dig into the SVX a bit more. Any anecdotes or data that you can give us in terms of just traction with customers turning on the body camera functionality or AI assist or the reporting pieces. I know you have, I think you said 70 or 80 customers. So I'm just curious how many of those are kind of moving beyond just SVX as I speak for this, Mike. Thanks.

Question: George Notter - Wolfe Research - Analyst : Great. Super. Thank you.

Question: Adam Tindle - Raymond James & Associates, Inc. - Analyst : Okay, thanks. I'm going to start off with a little bit more of a challenging question for you, Greg. I know that you're up for the challenge and then a more big picture question. But just near term, if I look at Q3 here from an operational standpoint, obviously, I see EPS upside, but it's mainly below the line items on interest expense. If I look at the operating income line, it was kind of more in line, let's call it. So I wonder if you could just kind of assess the quarter and the moving parts on the operating line for this quarter. And I ask that in light of your comments on expecting to improve margins from here next year. I guess what gives you the confidence based on what you're seeing here in Q3?

Question: Adam Tindle - Raymond James & Associates, Inc. - Analyst : Got it. Super helpful. And helpful color on Q1, Q2 as we shape our models, I think we'll try to keep that in mind. Just as a follow-up, Greg, I would love it if you could maybe just take a little bit of time to reflect on early learnings from Silvus now that you have the deal closed and kind of gotten to look further under the covers. A lot of us compare this to the potential for Avigilon and a lot of similarities there. But I wonder if you can maybe just talk about early learnings, similarities and differences, maybe some prior acquisitions like Avigilon in biggest areas that could surprise us when we look back at this. Thanks.

Question: Adam Tindle - Raymond James & Associates, Inc. - Analyst : Very helpful. Thank you.

Question: Keith Housum - Northcoast Research Partners - Analyst : Great, good afternoon, guys. Sticking along the lines of the Silvus acquisition. Jack, can you remind us like what's the breakout between like your international versus domestic business? And what's military versus like state and local? And is the opportunity -- I'm sure the opportunities in both, but how much is the Silvus product used in the local market today? .

Question: Keith Housum - Northcoast Research Partners - Analyst : Great. I appreciate that. Switching gears a little bit over the command center side, great growth of 16%. Perhaps could you unpack a little bit there about where was the success greatest which is a command center where are you guys getting the best traction right now?

Question: James Fish - Piper Sandler & Co. - Analyst : Hey guys, thanks for the question here. Just going back on SVX. Understand the penetration that you're seeing already. But can you just talk to the competitive nature now that you've got that in the market for a full quarter. Are you seeing any change in aggressiveness from competitors on the pricing side given some of the technology that you guys have embedded with SVX?

Question: Jyhhaw Liu Evercore - ISI Institutional Equities - Analyst : This is Irvin Liu on for Amit. I have one and a follow-up. I realize that it's been less than a quarter since you have closed on Silvus, but can you talk about your long-term potential as it relates to developing Silvus specific software and solutions. And does your 20% Silvus growth outlook for next year embed any S&S revenue?

Question: Jyhhaw Liu Evercore - ISI Institutional Equities - Analyst : Got it. And then for my follow-up, you mentioned that your expectations for APX NEXT installed base reaching 300,000 by next year. But can you confirm whether or not this uptick is an acceleration relative to what you have seen historically in prior LMR product cycles? And just given that a lot of your expanded capabilities related to SVX, AI and VFR are relying on the connectivity provided by APX NEXT. Do you see potential for the percentage of your installed base using flagship devices expanding over time?

Question: Meta Marshall - Morgan Stanley - Analyst : Great, thanks. I Appreciate the question. I guess just two quick questions for me. On the OBAAA or OBBA impact. Just any impact that you guys are foreseeing to your tax rate just as you guys have looked at it. And then second, just as you look to mitigate some of the tariffs, is that largely being done through pricing? Or just kind of how are you rejiggering manufacturing to accommodate tariffs? Thanks.

Question: Meta Marshall - Morgan Stanley - Analyst : Great, thank you.

Question: Benjamin Bollin - Cleveland Research Company - Analyst : Thanks. Good evening, everyone. Jack, could you talk a little bit about the sales motion with Silvus. How does that look versus other technologies in the portfolio? Specifically, I'm trying to understand the duration, just how similar or different the process is and your overall visibility? And then I had a follow-up as it ties into backlog and how that develops over time. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2025 / 9:00PM, MSI.N - Q3 2025 Motorola Solutions Inc Earnings Call

Question: Benjamin Bollin - Cleveland Research Company - Analyst : That's great. And can you -- I think I heard it earlier, but how much is still this contributing to backlog? Or how does that develop as a backlog contributor over time?

Question: Louie Dipalma - William Blair & Company L.L.C. - Analyst : Greg, Jason, Jack, and Mahesh. Good afternoon.

Question: Louie Dipalma - William Blair & Company L.L.C. - Analyst : Great. We picked up that AeroVironment is using the Silvus Stream caster radio for their new Switchblade 400 loitering missile. You guys discussed, billed this in terms of how it's well positioned for 20% growth next year. I was wondering how do you view Silvus as positioned for more like longer-term like major Army programs such as the next-generation command and control and the soldier borne Command Center that [Anduril] is prototyping right now.

Question: Louie Dipalma - William Blair & Company L.L.C. - Analyst : Fantastic. It seems as though you're involved in all of these big projects.