Motorola Solutions Q2 Earnings: Higher Profit, Revenue Amid Tariff Risks

Motorola Solutions reported higher profit and revenue in Q2, citing efforts to mitigate tariff risks with its global supply base. The company's performance exceeded analyst expectations, with revenue up 1% YoY to $2.1bn and net income up 15% to $480m. Motorola Solutions continues to navigate the impact of tariffs on its business, but remains confident in its long-term growth prospects.

Motorola Solutions Inc. (MSI) reported robust financial results for the second quarter of 2025, surpassing analyst expectations. The company’s revenue increased by 1% year-over-year (YoY) to $2.1 billion, while net income surged 15% to $480 million. This performance was driven by efforts to mitigate tariff risks through a diversified global supply base and strategic investments.

Key highlights of the quarter include a 10% increase in earnings per share (EPS) to $3.57, surpassing the forecasted $3.35. Revenue reached $2.77 billion, exceeding the expected $2.73 billion. The company’s stock price rose 0.67% in after-hours trading and continued to increase by 1.1% in premarket sessions, reaching $450. According to InvestingPro, the stock currently trades at a P/E ratio of 36.2x, indicating a premium valuation compared to its historical average [1].

Motorola Solutions’ strong performance was driven by a 15% growth in its software and services division. The company also expanded its operating margins by 80 basis points, leading to record Q2 operating earnings and strong operating cash flow growth. The acquisition of Silvis, a technology leader in the unmanned systems market, is anticipated to significantly impact future growth, with the sector expected to double in size over the next four years.

The company’s full-year revenue guidance was raised to $11.65 billion, representing a 7.7% growth, and the full-year non-GAAP EPS guidance was increased to a range of $14.88 to $14.98. For Q3, sales growth is anticipated to be around 7%, with contributions from the Silvis acquisition expected to add $185 million during the stub period.

CEO Greg Brown highlighted the strategic importance of the Silvis acquisition, stating, "We’re acquiring a technology leader in a rapidly growing industry." Chief Technology Officer Mahesh Saptarishi emphasized innovation with the launch of new products, noting, "We’re creating a new category here. This is a body worn assistant versus a body worn camera."

Risks and challenges include potential tariff impacts, estimated at $80 million, market saturation in established segments, and macroeconomic pressures that could affect state and local budgets. Integration challenges associated with the Silvis acquisition were also mentioned.

During the earnings call, analysts focused on the Silvis acquisition’s implications and Motorola’s expansion into international markets. Questions also addressed the company’s strategy for leveraging spectrum-based drone communications and the positive outlook on state and local budgets for FY2026.

References:
[1] https://au.investing.com/news/transcripts/earnings-call-transcript-motorola-solutions-exceeds-q2-2025-forecasts-stock-rises-93CH-3968415