Record Q1 Revenue and Top-Line Growth
Revenue was a record for Q1, up 7% year-over-year. The company raised full-year revenue guidance to approximately $12.8 billion (from $12.7 billion). Q2 sales growth is expected at ~8.5%.
Motorola Solutions
· MSI
May 7th, 2026
Summary
- Earnings Call Date:
- 2026-05-07
- Change Since:
- -7.25%
- Next Earnings Date:
- 2026-07-30
Earnings Call Sentiment
PositiveThe call conveyed strong commercial momentum: record revenue, robust 38% order growth, an 11% YoY backlog increase to $15.7B, double-digit growth in key software and Command Center/video technologies, and raised full-year top-line and EPS guidance. Those positives were balanced against near-term liquidity and cost pressures: GAAP earnings were hit by a $75M noncash Silvus earnout charge, operating and free cash flow declined vs. the prior year due to higher inventory and interest, and the company faces supply-chain headwinds (tariffs ~$60M and memory costs more than doubling). Management communicated confidence in execution, margin expansion of ~100 bps, and strategic M&A that expand recurring services. On balance, the highlights and forward guidance outweigh the lowlights given record orders/backlog, strong segment performance, and raised guidance.
Company Guidance
The company raised its outlook, guiding Q2 revenue growth of approximately 8.5% with non‑GAAP EPS of $3.82–$3.88 (assuming ~168 million diluted shares and an effective tax rate of ~23%); for the full year it now expects revenue of about $12.8 billion (up from $12.7B) and non‑GAAP EPS of $16.87–$16.99 (up from $16.70–$16.85), assuming ~168 million diluted shares, an effective tax rate of ~22.5% and ~$100 million of favorable FX, and it continues to expect roughly $3.0 billion of operating cash flow. Management also increased its Silvus revenue outlook to about $750 million (up $75M), now targets Products & SI growth of 8–9% and Mission Critical Networks growth of 8–9% (each up from 7–8%), expects to expand company operating margins by ~100 basis points for the year, and called out ~$60 million of tariff headwinds (mainly H1) and that direct memory spend will be a little more than double 2025’s ~$50 million level.
Software & Services Outperformance
Software and Services revenue grew 18% year-over-year, with the segment delivering operating earnings of $395 million and a margin of 34.2% (up from 28.7% prior year). This segment was a major driver of overall growth.
Strong Command Center and Video Momentum
Command Center revenue grew 27% and Video grew ~16% (Video called out as 16% in Q1 commentary). Management highlighted broad-based wins, cloud adoption (Alta), and AI Assist adoption as drivers.
Record Orders and Backlog
Q1 orders grew 38% year-over-year, producing a record Q1 ending backlog of $15.7 billion, up 11% versus a year ago. Backlog increases were especially strong in Software & Services (up $1.3 billion YoY).
Non-GAAP Profitability and EPS Growth
Non-GAAP operating earnings were $781 million, up 9% year-over-year, with a non-GAAP operating margin of 28.8% (up 50 basis points). Non-GAAP EPS was $3.37, up 6% from $3.18 last year. Full-year non-GAAP EPS guidance was raised to $16.87–$16.99 (from $16.70–$16.85).
Silvus Performance and Raised Expectations
Silvus continued to exceed expectations; management raised Silvus full-year revenue expectation to $750 million (up $75 million). The Silvus earnout was increased, reflecting stronger performance, and expected payout was disclosed as just over $100 million.
Strategic Acquisitions and M&A Activity
Closed acquisitions of Exacom and Hyper (integrating 911 audio and agentic AI into offerings) and announced intent to acquire Bell Canada’s LMR network services business (expected to bring ~ $100 million of recurring managed services revenue).
Balance Sheet and Capital Allocation
Q1 cash generation included operating cash flow of $451 million and free cash flow of $389 million. Capital allocation in Q1 included $201 million dividends, $118 million share repurchases and $62 million of CapEx. The company repaid $200 million of term loans (outstanding term loan balance $1.3 billion).
Guidance on Margin Expansion and Cash Flow
Despite supply challenges, the company reiterated a target to expand operating margins by ~100 basis points for the full year and expects approximately $3 billion of operating cash flow for the full year.
Operator
Good afternoon, and thank you for holding. Welcome to the Motorola Solutions First Quarter 2026 Earnings Conference Call. Today's call is being recorded. If you have any objections, please disconnect at this time. The presentation material and additional financial tables are posted on the Motorola Solutions' Investor Relations website. In addition, a webcast replay of this call will be available on our website within 3 hours after the conclusion of this call. This website address is www.motorolasolutions.com/investors. [Operator Instructions] I would now like to introduce Mr.
Brian Piotrowski, Vice President of Investor Relations. Mr. Piotrowski, you may begin your conference.
Brian Piotrowski
Good afternoon. Welcome to our 2026 first quarter earnings call. With me today are Greg Brown, Chairman and CEO; Jason Winkler, Executive Vice President and CFO; Jack Molloy, Executive Vice President and COO; and Mahesh Saptharishi, Executive Vice President and CTO. Greg and Jason will review our results along with commentary, and Jack and Mahesh will join for Q&A. We have posted an earnings presentation and news release at motorolasolutions.com/investors. These materials include GAAP to non-GAAP reconciliations for your reference. During the call, we reference non-GAAP financial results, including those in our outlook, unless otherwise noted. A number of forward-looking statements will be made during this presentation and during the Q&A portion of the call.
These statements are based on current expectations and assumptions that are subject to a variety of risks and uncertainties. Actual results could...
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