MSI · Q2 2026 Earnings

Bullish

Motorola Solutions

Reported August 5, 2026

30-second summary

Motorola printed Q2 revenue of $3.133B (+13% YoY, +4.4% above the $3.0B consensus) and non-GAAP EPS of $4.41 — clearing the prior $3.82–$3.88 guide by $0.53 at the high end and consensus by 14.5%. Management raised FY2026 revenue to ~$12.975B (from $12.8B) and non-GAAP EPS to $17.62–$17.72 (midpoint +$0.74 vs. prior), but the forward guide is where the tension sits: Q3 is guided to ~8% YoY growth against a $3.01B Q3-2025 base — implying ~$3.25B — a 5-point deceleration from the Q2 print despite "record Q2 orders" and $15.6B backlog. The setup is a beat-and-raise executed cleanly, with a Q3 guide that will read as either seasonal normalization or the top of the acceleration curve.

Headline numbers

EPS

Q2 FY2026

$4.41

+14.5% vs est.

Revenue

Q2 FY2026

$3.13B

+13.0% YoY

+4.4% vs est.

Gross margin

Q2 FY2026

53.6%

Free cash flow

Q2 FY2026

$0.41B

Operating margin

Q2 FY2026

25.8%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$3.13B	$2.77B	+13.3%	$2.71B	+15.4%
EPS	$4.41	$3.57	+23.5%	$3.37	+30.9%
Gross margin	53.6%	51.1%	+250bps	50.2%	+340bps
Operating margin	25.8%	25.0%	+80bps	19.3%	+650bps
Free cash flow	$0.41B	$0.22B	+84.8%	$0.39B	+6.4%

Guidance

Company significantly raised full-year FY2026 revenue and EPS guidance following record Q2 results that beat both revenue growth and EPS expectations by large margins, with Q2 non-GAAP EPS of $4.41 crushing prior guidance of $3.82–$3.88.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	approximately 8.5% YoY	13% YoY	+4.5 pts above guide	Beat
EPS (non-GAAP)	Q2 FY2026	$3.82–$3.88	$4.41	+$0.53 above high end of guide	Beat

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	approximately 8% YoY	approximately 8% YoY
EPS (non-GAAP)	Q3 FY2026	$4.39–$4.44	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	$12.8 billion	$12.975 billion	+$0.175 billion	Raised
EPS (non-GAAP)	FY2026	$16.87–$16.99	$17.62–$17.72	+$0.75–$0.85 (midpoint +$0.80)	Raised

Reaffirmed unchanged this quarter: Non-GAAP effective tax rate (between 22% and 22.5%), Fully diluted shares (approximately 168 million)

Product revenue

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Products and Systems Integration	$1.908B	$1.653B	+15.4%
Software and Services	$1.225B	$1.112B	+10.2%

Management tone

Q3-25 Silvus upsize and 2026 anchoring → Q4-25 demand-durability defense and Assist productization → Q1-26 backlog inflection and AI-as-fabric → Q2-26 execution delivery and Q3 normalization.

The four-quarter arc has moved from thesis-setting to execution proof. Two quarters ago the H2 acceleration was aspirational; last quarter management flagged backlog inflecting against their own prior downside expectation; this quarter P&SI printed +15% YoY with margin snapping back 660bps QoQ. The prepared-remarks framing — "record Q2 revenue, earnings and backlog" driving "very strong momentum into the second half" — is the language of a management team that no longer feels it needs to defend the thesis. The absence of a transcript limits the tone read, but the guide raise (FY EPS +$0.74 midpoint) is the actual signal: a $0.74 raise on a $16.93 base is a 4.4% mid-year revision, larger than the entire cumulative raise over the prior three quarters combined.

The one hedge worth flagging is a new phrase in the press release: "The company expects inventory levels to remain elevated as it mitigates this dynamic supply chain environment." This language did not appear last quarter, when management had shifted from "watching carefully the timing impact" (Q3-25) to forward-order commitments (Q4-25). The re-emergence of supply-chain framing — even in mitigating posture — introduces a working-capital variable that wasn't there in Q1's commentary and may partially explain why Q3 is guided to ~8% growth rather than tracking Q2's +13%.

The Q3 guide itself is the tone shift no one will discuss in the headline. Q3 FY2026 at ~8% YoY on a $3.01B base implies ~$3.25B — a 5-point deceleration from Q2's +13% actual, with a $4.415 midpoint EPS below the Q2 $4.41 print. On a beat this large, most acceleration-story managements would step up the Q3 marker; Motorola did not. Read charitably, the Q3 guide bakes in the same conservative bias that Q1 and Q2 beat by 4–5% on revenue and 14%+ on EPS. Read strictly, it says the +13% Q2 print was partly compare-driven and normalized run-rate growth is closer to 8%.

Answers to last quarter's watch list

Q2 revenue clearing the ~8.5% YoY guide. Q2 revenue grew 13% YoY to $3.133B, clearing the 8.5% guide by 4.5 points and beating $3.0B consensus by 4.4%. The bridge quarter cleared the bar decisively, derisking the FY $12.975B raise.

Resolved positively

Organic growth turning positive ex-Silvus. Organic revenue growth came in at +5%, reversing the -1% Q1 print — an 8-point sequential swing. This is the strongest organic signal in the four-quarter series and materially reduces the "growth is all Silvus" risk that hung over Q1.

Resolved positively

P&SI segment margin trajectory from 24.8%. P&SI non-GAAP segment margin came in at 31.4%, up 660bps QoQ from Q1's 24.8%. The opex-leverage path to the FY +100bps operating margin guide is fully validated by a single quarter's move.

Resolved positively

Silvus quarterly revenue or run-rate disclosure. A discrete Q2 Silvus dollar figure was not broken out on the press release. Absent transcript color, the ~$375M H1 run-rate test cannot be verified from the print.

Continue monitoring

Assist dollar attach or revenue disclosure. No dollar attach or Assist-specific revenue figure was disclosed in the press release.

Continue monitoring

Backlog holding above $15.7B exiting Q2. Backlog closed Q2 at $15.6B — essentially flat sequentially and +11% YoY. This lands as a plateau rather than a peak, but it did not step higher, which slightly softens the Q1 inflection narrative. Status: Resolved positively (held the line)

What to watch into next quarter

Q3 revenue clearing the ~8% YoY guide (~$3.25B). The Q3 guide is a 5-point deceleration from Q2's +13% actual. Watch whether the print clears $3.25B — anything below reopens whether Q2 was a peak or a run-rate.

Whether Q3 forces a fourth FY raise. The Q2 beat drove a $175M FY revenue raise and a $0.74 EPS midpoint raise. A Q3 EPS beat above $4.44 with revenue clearing ~$3.30B would compound into a fourth consecutive FY raise; anything at or below the $4.415 midpoint likely locks the current $17.67 FY EPS midpoint.

P&SI segment margin holding above 30% into Q3. The 660bps QoQ recovery to 31.4% is the linchpin of the FY operating margin story. A step-down back toward the mid-20s would invalidate the opex-leverage thesis and pressure FY EPS.

The "elevated inventory levels" language becoming concrete. New supply-chain hedging language re-entered the press release this quarter after being absent in Q1. Watch whether Q3 quantifies the working-capital impact or whether FCF conversion diverges from OCF.

Silvus dollar disclosure or organic-ex-Silvus decomposition. Organic +5% is the cleanest positive signal in the series, but a discrete Silvus figure is still absent. A Q3 disclosure — even backed into via segment commentary — would let the market properly separate the two engines.

S&S growth reaccelerating above +11%. The deceleration from +18% (Q1) to +10% (Q2) is the largest quarter-over-quarter step-down in the four-quarter series. Watch whether Q3 stabilizes at 10–11% or continues stepping down toward the high single digits.

Sources

Motorola Solutions Q2 2026 press release, filed with SEC: https://www.sec.gov/Archives/edgar/data/68505/000006850526000027/msiq22026pressrelease.htm

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