Motorola Solutions MSI Q3 2026: Record Backlog and Raised Guidance

Motorola Solutions reported adjusted earnings per share of $4.69 for the third quarter of 2026, beating expectations against a consensus estimate of $4.44. Revenue came in at $3.38 billion, also beating expectations and growing 12.2% compared to the same quarter a year earlier. It was the sixth consecutive quarter in which the company cleared the Wall Street EPS bar.

The beat was broad-based across both reporting segments. Products and Systems Integration generated $2.12 billion in revenue, up 12%, while Software and Services contributed $1.26 billion, up 13%. Acquisitions accounted for $211 million of the revenue gain, with organic revenue climbing 5%. Non-GAAP operating margin expanded 200 basis points to 32.5%, driven by higher sales volume and operating leverage.

The backlog reached $16.6 billion, up 14% year over year, a record anchored by a string of large contract wins in the quarter, including a Federal Bureau of Prisons order for P25 systems and devices, a ten-year order for the State of Louisiana, and a command-and-dispatch deal with the Los Angeles Police Department. Record Q3 orders were logged across all three of the company's technology pillars.

Management responded to the demand picture by raising its full-year guidance again. Full-year revenue is now expected at approximately $13.05 billion, up from prior guidance of $12.975 billion, and full-year non-GAAP EPS guidance was lifted to $17.94 to $17.99 from a prior range of $17.62 to $17.72. Operating cash flow expectations for the full year were raised to $3.05 billion.

For Q4 2026, the company guided for revenue growth of approximately 13% year over year and non-GAAP EPS of $5.47 to $5.52. CEO Greg Brown described demand as "exceptionally strong" and noted the company was raising both its revenue and cash flow expectations as a direct result. The company also announced a $2 billion increase to its share repurchase authorization and repurchased $94 million of common stock during the quarter at an average price of $457.07.

Investors will want to monitor a few risk factors management flagged alongside the strong results. Inventory is expected to stay elevated as the company navigates rising memory costs tied to AI demand, evolving tariffs, rare earth mineral restrictions, and broader supply chain volatility. Higher interest expense from acquisition-related debt, including $950 million in new senior notes issued to fund the $1.3 billion D-Fend Solutions acquisition, also weighed on GAAP net income and cash flow metrics in the quarter.