Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Motorola Solutions’ second quarter of fiscal 2026 was defined by double-digit revenue growth across all major product lines, amplified by contributions from its acquisition-driven expansion of the safety and security ecosystem. A $60 million favorable adjustment from recovered IEEPA tariff refunds provided a temporary boost to cost of sales and margins. While operating earnings rose 17%, higher interest expense, up $48 million due to debt funding the Silvus acquisition, and a sharp increase in intangible amortization limited net income growth. The results demonstrate strong demand execution but also highlight the near-term financial drag from large-scale acquisitions and a shifting trade environment.
Revenue
$3.13B
+13.31% YoY
EPS (Diluted)
$3.33
+9.54% YoY
Gross Margin
53.6%
+2.5 pts YoY
Operating Income
$809M
+16.91% YoY
Source: SEC XBRL
Motorola Solutions (MSI) reported Q2 FY2026 revenue of $3.13B, up 13.3% year over year. Operating margin was 25.8%, up 0.8 points from 25.0% a year earlier. MSI's fiscal Q2 FY2026 corresponds to calendar Q3 2026.
Last 4 quarters: 4 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Mar 2026 | 3.37 | 3.28 | Beat +2.8% |
| Dec 2025 | 4.59 | 4.39 | Beat +4.6% |
| Sep 2025 | 4.06 | 3.89 | Beat +4.4% |
| Jun 2025 | 3.57 | 3.38 | Beat +5.5% |
2 reported segments · SEC XBRL
Segment revenue totals $3.13B, which is the $3.13B of consolidated revenue on the income statement. The profit column adds up to the consolidated figure as well.
Profit above is reported as operating income, the measure MSI itself discloses in this filing. Each company chooses its own measure here, so these margins are not comparable with another company's.
Compiled by AI from 10-Q Item 2 of this filing
Net sales included $210 million from acquisitions in the Products and Systems Integration segment and $33 million in Software and Services, driven primarily by the Silvus Technologies deal, along with growth in MCN, Video, and Command Center.
Source: 10-Q Item 2 MD&A
Following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs, the company recognized a $60 million favorable adjustment in cost of sales, contributing to gross margin expansion in the quarter.
Source: 10-Q Item 2 MD&A
Other charges surged to $113 million from $40 million, largely due to $95 million in intangible amortization expense (vs. $39 million prior) and a $16 million contingent earnout charge related to the Silvus acquisition, partially offset by a $20 million gain from Hytera litigation recoveries.
Source: 10-Q Item 2 MD&A
Interest expense, net increased to $103 million from $55 million a year ago, reflecting higher outstanding debt used to fund acquisitions, particularly the $1.5 billion term loan and senior notes for Silvus.
Source: 10-Q Item 2 MD&A
Year-to-date operating cash flow improved $137 million to $920 million, but cash and equivalents fell from $3.2 billion to $710 million, as the company repaid debt, repurchased shares, and paid dividends while investing in inventory.
Source: 10-Q Item 2 MD&A
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Total debt reached $9.0 billion at quarter-end, and net interest expense jumped to $103 million in Q2, up from $55 million a year ago. The higher leverage, largely from acquisition financing, increases vulnerability to earnings pressure if rates remain elevated or operating performance weakens.
Source: 10-Q Balance Sheet (XBRL) and 10-Q Item 2 MD&A
Cash and equivalents plunged to $710 million from $3.2 billion, and the current ratio stands at only 1.10, reflecting heightened short-term obligations. This limited liquidity buffer could constrain operational flexibility or force additional borrowing.
Source: 10-Q Balance Sheet (XBRL)
Intangible amortization expense surged to $95 million in Q2, and a $16 million contingent earnout charge was recorded. These non-cash costs, combined with higher acquisition-related expenses, compressed operating margins, especially in the Products segment, where operating margin fell 3.2 percentage points on a year-to-date basis.
Source: 10-Q Income Statement (XBRL) and 10-Q Item 2 MD&A
Management cited 'elevated volatility and uncertainty around the global supply chain' and higher direct material costs, particularly for memory due to AI-driven demand. These factors could continue to pressure product margins and elevate inventory levels.
Source: 10-Q Item 2 MD&A
The company faces ongoing risks from shifting global trade policies, including tariffs and import/export restrictions, which have already led to disruptions. While a one-time IEEPA refund boosted results, future tariff actions could harm cost structures and competitiveness.
Source: 10-Q Item 2 MD&A
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 3.13 $B | 2.77 $B | +13.31% |
Cost of Revenue $B | 1.46 $B | 1.35 $B | +7.62% |
Gross Profit $B | 1.68 $B | 1.41 $B | +18.75% |
Operating Income $M | 809.00 $M | 692.00 $M | +16.91% |
Net Income $M | 557.00 $M | 513.00 $M | +8.58% |
EPS (Basic) $ | 3.36 $ | 3.08 $ | +9.09% |
EPS (Diluted) $ | 3.33 $ | 3.04 $ | +9.54% |
R&D Expense $M | 260.00 $M | 231.00 $M | +12.55% |
SG&A Expense $M | 496.00 $M | 450.00 $M | +10.22% |
Answers draw on this SEC filing and the data on this page
MSI reported Q1 FY2026 revenue growth of 7.4% to $2.71B, but profitability declined sharply with net income falling 14.9% to $366M as higher costs, increased debt from a major acquisition, and margin compression weighed on results.
MSI delivered strong FY2025 results with revenue growing 8.0% to $11.68B and net income surging 36.6% to $2.15B, while significantly expanding its balance sheet through a $8.41B long-term debt load tied to heavy investing activity.
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