MSI · Earnings call · 2026Q2T · Full report

Operating Margin Drivers

Motorola Solutions, Inc. · 2026-08-05 · Importance 55 · Surprise 66 · No source text

GAAP operating earnings were $809 million, or 25.8% of sales, compared with 25.0% in the year-ago quarter. Non-GAAP operating earnings exceeded $1 billion, and non-GAAP operating margin increased 330 basis points to 32.9%. The improvement reflected higher sales, operating leverage and a $60 million IEEPA tariff-refund benefit, while margins expanded 140 basis points excluding the refunds. Products and Systems Integration operating margin increased 470 basis points to 31.4%, and Software and Services margin increased to 35.3% from 33.8%.

Key facts

• Non-GAAP operating earnings in Q2 were just over $1 billion, up 26% from the year-ago quarter.
• For full-year operating margins, they now expect approximately 170 basis points of expansion, up from 100 basis points previously.
• Products and SI operating earnings for Q2 were $599 million or 31.4% of sales, up 470 basis points from 26.7% the prior year.
• Software and Services operating earnings were $433 million or 35.3% of sales, up from 33.8% last year.
• GAAP operating earnings for Q2 were $809 million, representing 25.8% of sales.
• They still expect gross margins to be comparable to last year as improved tariff outlook offsets increased memory cost expectations.
• Non-GAAP EPS in Q2 was $4.41, up $0.84 or 24% from $3.57 last year.
• Non-GAAP operating margin for Q2 was 32.9%, up 330 basis points year-over-year.

Impact estimates