Motorola Solutions (MSI) reported net income of $512 million in the third quarter of 2026, versus $562 million in the same period a year earlier. Earnings per share (EPS) were $3.06, down 8% from $3.33 in 3Q25. The GAAP operating margin fell to 23.0%, from 25.6%, mainly due to an increase in the contingent payment (earnout) for the Silvus acquisition, driven by the business's strong performance.
Revenue was $3.4 billion ($3,376 million), up 12%. The Products and Systems Integration segment grew 12% to $2.1 billion, and Software and Services advanced 13% to $1.3 billion. GAAP operating income was $777 million, up 1%.
Adjusted EPS (non-GAAP, which excludes items such as stock-based compensation, amortization of intangibles and other items the company considers non-recurring) was $4.69, up 16%. Adjusted operating income totaled $1.1 billion ($1,096 million), with a margin of 32.5%. The backlog reached $16.6 billion, up 14%, described by the company as a record.
Free cash flow was $589 million, versus $733 million a year earlier, due to higher tax and interest payments. During the quarter, the company paid $200 million in dividends, repurchased $94 million in shares and announced a $2 billion increase in its buyback authorization. It also completed the acquisition of D-Fend Solutions, an anti-drone technology company, for $1.3 billion, net of cash acquired, financed mainly with $950 million in new long-term senior notes.
For 4Q26, the company projects revenue growth of about 13% and adjusted EPS between $5.47 and $5.52. For 2026, it raised its revenue guidance to about $13.05 billion, from $12.975 billion, and its adjusted EPS guidance to between $17.94 and $17.99, from $17.62 to $17.72. The operating cash flow target rose to $3.05 billion.
