Motorola Solutions, Inc. MSI reported relatively healthy first-quarter 2026 results, with both top and bottom lines beating the Zacks Consensus Estimate.
The company reported a 7% year-over-year increase in revenues, driven by strong demand for its software, video security and mission-critical network (MCN) solutions. Record orders and a strong backlog position reflect healthy demand across public safety and security markets.
Net Income
On a GAAP basis, the company reported a net income of $366 million or $2.18 per share compared with $430 million or $2.53 per share in the prior-year quarter. The year-over-year decrease in GAAP earnings was primarily due to higher costs and operating expenses.
Non-GAAP net income was $566 million or $3.37 per share compared with $540 million or $3.18 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 12 cents.
Motorola Solutions, Inc. Price, Consensus and EPS Surprise
Motorola Solutions, Inc. price-consensus-eps-surprise-chart | Motorola Solutions, Inc. Quote
Revenues
Net sales in the quarter rose to $2.71 billion from $2.53 billion in the year-ago quarter, backed by solid growth in the Software and Services segment and strong orders across the portfolio. The top line beat the consensus estimate of $2.7 billion.
Net sales from North America totaled $1.86 billion, up from $1.85 billion in the year-ago quarter. International revenues increased to $857 million from the prior-year quarter’s tally of $676 million.
Segmental Performance
Net sales from Products and Systems Integration increased to $1.56 billion from $1.55 billion. The segment’s backlog rose $255 million to $3.9 billion, primarily due to strong demand in Video and MCN.
Net sales from Software and Services were up 18% to $1.16 billion. The segment’s backlog increased $1.3 billion to $11.8 billion, led by strong demand across command center, MCN and video security services and favorable foreign currency impacts.
Other Quarterly Details
Non-GAAP operating earnings were up to $781 million from $716 million, with respective margins 28.8% and 28.3%. The company ended the first quarter with a record backlog of $15.7 billion, up $1.6 billion year over year, driven by record orders.
Non-GAAP operating earnings for Products and Systems Integration decreased to $386 million from $434 million for a margin of 24.8%, down from 28.1%. Non-GAAP operating earnings for Software and Services were $395 million, up from $282 million, for a non-GAAP operating margin of 34.2%, up from 28.7%.
Cash Flow and Liquidity
Motorola generated $451 million in cash from operating activities in the reported quarter compared with $510 million a year ago. Free cash flow in the first quarter was $389 million. The company repurchased $118 million worth of stock during the quarter. As of April 4, 2026, MSI had $886 million of cash and cash equivalents with $8.42 billion of long-term debt.
Outlook
For second-quarter 2026, Motorola expects non-GAAP earnings per share in the range of $3.82 to $3.88 on year-over-year revenue growth of approximately 8.5%. Non-GAAP tax rate is expected to be around 23%.
For 2026, Motorola currently expects non-GAAP earnings in the range of $16.87-$16.99 per share on revenues of approximately $12.8 billion compared with earlier expected figures.
Zacks Rank
Motorola currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Keysight Technologies, Inc. KEYS is scheduled to release second-quarter fiscal 2026 earnings on May 19. The Zacks Consensus Estimate for earnings is pegged at $2.33 per share, suggesting growth of 37.06% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 17.45%. The company delivered an average earnings surprise of 4.58% in the last four reported quarters.
Workday, Inc. WDAY is set to release first-quarter fiscal 2027 earnings on May 21. The Zacks Consensus Estimate for earnings is pegged at $2.49 per share, implying growth of 11.7% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 20.16%. The company delivered an average earnings surprise of 8.53% in the last four reported quarters.
Analog Devices, Inc. ADI is set to release second-quarter fiscal 2026 earnings on May 20. The Zacks Consensus Estimate for earnings is pegged at $2.88 per share, implying growth of 55.7% from the year-ago reported figure.
Analog Devices has a long-term earnings growth expectation of 21.89%. The company delivered an average earnings surprise of 6.11% in the last four reported quarters.
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This article originally published on Zacks Investment Research (zacks.com).