How much of the quarter's growth came from the underlying business versus acquisitions and one-time items?

Reported sales grew 13%, but organic revenue grew 5%. Acquisitions added $243 million and foreign currency added $35 million. The $60 million IEEPA tariff refund was recorded in cost of sales and contributed about 190 basis points to operating margin, so GAAP and non-GAAP margins were flattered by a non-recurring benefit.

Why is non-GAAP EPS growing much faster than GAAP EPS?

Non-GAAP EPS excludes about $1.08 per share of items in Q2, including share-based compensation ($0.61), intangible amortization ($0.56, up sharply after acquisitions), a contingent earnout adjustment ($0.10), and Hytera-related gains. Because intangible amortization rose from $39 million to $95 million, the gap between GAAP and non-GAAP results widened materially.

What is the outlook for the rest of 2026?

Full-year revenue guidance is about $12.975 billion, up from $12.8 billion, and non-GAAP EPS guidance is $17.62-$17.72, up from $16.87-$16.99. For Q3, the company expects roughly 8% revenue growth and non-GAAP EPS of $4.39-$4.44. Guidance assumes about 168 million diluted shares and a non-GAAP tax rate of 22-22.5% for the full year. The company did not reconcile non-GAAP guidance to GAAP.

What are the main risks to watch after this report?

The filing highlights rising memory costs driven by AI demand, global tariff and export-control volatility, and elevated inventory levels that the company expects to remain high. Interest expense more than doubled to $103 million, and cash declined to $710 million. Hytera has reported about $116 million in royalties owed under a court order, but collection remains subject to ongoing litigation and appeals.

How significant is the D-Fend acquisition?

The $1.5 billion D-Fend acquisition is a definitive agreement announced with these results, and the filing does not yet detail its financial contribution, closing timing, or financing. Given the company's roughly $9 billion in debt and about $710 million in cash at quarter-end, investors should look for financing details and expected accretion or integration costs in subsequent filings and on the earnings call.

MSI 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.

Motorola Solutions reported strong second-quarter 2026 results, with sales of $3.13 billion^a, up 13% year over year.

Organic revenue grew a more modest 5% to $2.89 billion^b, as acquisitions contributed $243 million and foreign currency added $35 million. GAAP EPS rose 10% to $3.33, and non-GAAP EPS rose 24% to $4.41. Both figures include a $60 million pre-tax benefit ($0.25 per share) from IEEPA tariff refunds, which the company recognized as a one-time item within cost of sales.

Gross margin expanded to 53.6% from 51.1%, and operating cash flow nearly doubled to $469 million, lifting free cash flow to $414 million^c. Record Q2 backlog reached $15.6 billion, up 11%, which supports visibility into the second half. Management raised its full-year 2026 outlook.

Revenue guidance rose to approximately $12.975 billion^d from $12.8 billion, and non-GAAP EPS guidance rose to $17.62 to $17.72 from $16.87 to $16.99. The third-quarter outlook calls for roughly 8% revenue growth and non-GAAP EPS of $4.39 to $4.44. The company also agreed to acquire D-Fend Solutions, a counter-drone technology provider, for $1.5 billion.

Investors should weigh the one-time tariff refund benefit and the non-GAAP adjustments, which excluded roughly $1.08 per share of items in the quarter. Rising AI-driven memory costs and higher inventory ($1.33 billion, up from $983 million at year-end) are the main operational risks flagged. Interest expense more than doubled to $103 million from $55 million, reflecting higher debt levels, and total debt stood at about $9.0 billion at quarter-end.

Cash fell to $710 million. Capital returns remained significant, with $326 million in share repurchases and $201 million in dividends during the quarter.

02—Key points

Key Highlights

Q2 2026 sales of $3,133 million, up 13% year over year; organic revenue up 5% after $243 million from acquisitions
GAAP EPS of $3.33 (up 10%) and non-GAAP EPS of $4.41 (up 24%), both including a $0.25 per share one-time IEEPA tariff refund benefit
Operating cash flow of $469 million (vs. $272 million) and free cash flow of $414 million (vs. $224 million)
Record Q2 backlog of $15.6 billion, up 11%, with Software and Services backlog up $1.2 billion
Full-year 2026 guidance raised: revenue to about $12.975 billion and non-GAAP EPS to $17.62-$17.72
Agreement to acquire D-Fend Solutions for $1.5 billion, expanding into counter-drone technology
Risks flagged: rising AI-driven memory costs, elevated inventory ($1.33 billion), and interest expense that doubled to $103 million

03—Questions

Frequently Asked Questions

How much of the quarter's growth came from the underlying business versus acquisitions and one-time items?
Reported sales grew 13%, but organic revenue grew 5%. Acquisitions added $243 million and foreign currency added $35 million. The $60 million IEEPA tariff refund was recorded in cost of sales and contributed about 190 basis points to operating margin, so GAAP and non-GAAP margins were flattered by a non-recurring benefit.
Why is non-GAAP EPS growing much faster than GAAP EPS?
Non-GAAP EPS excludes about $1.08 per share of items in Q2, including share-based compensation ($0.61), intangible amortization ($0.56, up sharply after acquisitions), a contingent earnout adjustment ($0.10), and Hytera-related gains. Because intangible amortization rose from $39 million to $95 million, the gap between GAAP and non-GAAP results widened materially.
What is the outlook for the rest of 2026?
Full-year revenue guidance is about $12.975 billion, up from $12.8 billion, and non-GAAP EPS guidance is $17.62-$17.72, up from $16.87-$16.99. For Q3, the company expects roughly 8% revenue growth and non-GAAP EPS of $4.39-$4.44. Guidance assumes about 168 million diluted shares and a non-GAAP tax rate of 22-22.5% for the full year. The company did not reconcile non-GAAP guidance to GAAP.
What are the main risks to watch after this report?
The filing highlights rising memory costs driven by AI demand, global tariff and export-control volatility, and elevated inventory levels that the company expects to remain high. Interest expense more than doubled to $103 million, and cash declined to $710 million. Hytera has reported about $116 million in royalties owed under a court order, but collection remains subject to ongoing litigation and appeals.
How significant is the D-Fend acquisition?
The $1.5 billion D-Fend acquisition is a definitive agreement announced with these results, and the filing does not yet detail its financial contribution, closing timing, or financing. Given the company's roughly $9 billion in debt and about $710 million in cash at quarter-end, investors should look for financing details and expected accretion or integration costs in subsequent filings and on the earnings call.

04—Continue

← View all 8-K filings