Motorola Solutions MSI · USD

Information by Segment and Geographic RegionThe Company conducts its business globally and manages it through the following two segments:Products and Systems Integration: The Products and Systems Integration segment offers an extensive portfolio of infrastructure, devices, accessories, and the implementation and integration of such systems, devices and applications. Within MCN, the Company is a global leader in the two-way radio category, including the Company’s Project 25 (P25), Terrestrial Trunked Radio (TETRA), Digital Mobile Radio (DMR), as well as other professional and commercial radio (“PCR”) solutions. The Company provides LTE solutions for public safety, government, including defense, and enterprise users, including devices that operate in both low-band and mid-band frequencies. Additionally, through the Company's MANET and High Frequency (HF) and Very High Frequency (VHF) communications technologies, it supports defense, government and disaster relief agency customers that require dynamic, mobile and tactical point-to-point voice and data communications in remote or contested environments without the need for fixed infrastructure. The Company's Video technology includes network video management infrastructure, fixed security, certain mobile video equipment and access control solutions. The primary customers of the Products and Systems Integration segment are government, including defense, public safety and enterprise customers who operate private communications systems and video security solutions and typically manage a mobile workforce. In 2025, the segment’s net sales were $7.3 billion, representing 62% of the Company's consolidated net sales.Software and Services: The Software and Services segment provides a broad range of solution offerings for government, public safety and enterprise customers. Software includes public safety and enterprise Command Center, unified communications applications, certain mobile video equipment, and video software solutions, delivered both on-premise and “as-a-service.” Services includes a continuum of service offerings beginning with repair, technical support and maintenance. More advanced technologies include monitoring, software updates and cybersecurity services. Managed services range from partial to full operation of customer-owned or Motorola Solutions-owned communications systems. In 2025, the segment’s net sales were $4.4 billion, representing 38% of the Company's consolidated net sales.

Revenue from Contracts with CustomersDisaggregation of RevenueFollowing the acquisition of Silvus Technologies Holdings Inc. (“Silvus”) in August 2025, we renamed our "Land Mobile Radio Communications" technology to MCN. We combined our legacy Land Mobile Radio portfolio with the newly acquired Silvus and now report net sales under MCN. This name change does not require any financial information to be reclassified from previous periods.The following table summarizes the disaggregation of our revenue by segment, geography, major product and service type and customer type for the years ended December 31, 2025, 2024 and 2023, consistent with the information reviewed by our chief operating decision maker, the chief executive officer, for evaluating the financial performance of reportable segments:Years Ended202520242023(in millions)Products and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotalProducts and Systems IntegrationSoftware and ServicesTotalRegionsNorth America$5,318 $3,044 $8,362 $5,097 $2,723 $7,820 $4,507 $2,425 $6,932 International1,935 1,385 3,320 1,786 1,211 2,997 1,735 1,311 3,046 $7,253 $4,429 $11,682 $6,883 $3,934 $10,817 $6,242 $3,736 $9,978 Major Products and ServicesMission Critical Networks (MCN)$6,066 $2,581 $8,647 $5,739 $2,361 $8,100 $5,127 $2,399 $7,526 Video1,187 933 2,120 1,144 776 1,920 1,115 611 1,726 Command Center— 915 915 — 797 797 — 726 726 $7,253 $4,429 $11,682 $6,883 $3,934 $10,817 $6,242 $3,736 $9,978 Customer TypeDirect$4,618 $4,037 $8,655 $4,238 $3,586 $7,824 $3,619 $3,396 $7,015 Indirect2,635 392 3,027 2,645 348 2,993 2,623 340 2,963 $7,253 $4,429 $11,682 $6,883 $3,934 $10,817 $6,242 $3,736 $9,978 Remaining Performance Obligations Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. Remaining performance obligations are equal to disclosed backlog, except within our Software and Services contracts where multi-year contract terms may be limited by the customer's ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal.

Commitments and ContingenciesPurchase ObligationsDuring the normal course of business, in order to manage manufacturing lead times and help ensure adequate component supply, the Company enters into agreements with contract manufacturers and suppliers that either allow it to procure inventory based upon criteria as defined by the Company or establish the parameters defining the Company’s requirements. In addition, we have entered into software license agreements which are firm commitments and are not cancellable. As of December 31, 2025, the Company had entered into firm, non-cancelable, and unconditional commitments under such arrangements through 2033. The Company expects to make total payments of $771 million under these arrangements as follows: $250 million in 2026, $197 million in 2027, $127 million in 2028, $108 million in 2029, $46 million in 2030 and $43 million thereafter.Legal MattersHytera Civil LitigationIn 2017, the Company filed a complaint against Hytera Communications Corporation Limited of Shenzhen, China; Hytera America, Inc.; and Hytera Communications America (West), Inc. (collectively, "Hytera"), in the U.S. District Court for Northern District of Illinois (the "District Court"), alleging trade secret theft and copyright infringement, and seeking injunctive relief. In 2020, a jury decided in the Company's favor and awarded the Company $543.7 million, plus $51.1 million in pre-judgment interest and $2.6 million in costs, as well as $34.2 million in attorneys' fees. Subsequently, the District Court ordered Hytera to pay the Company a forward-looking reasonable royalty on products ("I-Series") that use the Company’s stolen trade secrets, setting royalty rates for Hytera's sale of relevant products from July 1, 2019 forward. In 2024, amounts paid into escrow of approximately $61 million were released to the Company and recorded as a gain within Other charges within the Consolidated Statement of Operations. Hytera made quarterly de minimis royalty payments related to the I-Series products directly to the Company in 2025. Following the initial District Court judgment in the Company's favor, both parties appealed to the U.S. Court of Appeals for the Seventh Circuit (the "Court of Appeals"). On July 2, 2024, the Court of Appeals affirmed the District Court's award of $407.4 million in damages under the Defend Trade Secrets Act, directed the District Court to recalculate and reduce its award of $136.

Debt and Credit FacilitiesDebt December 31202520247.5% debentures due 2025$— $252 6.5% debentures due 2025— 70 364 day term loan749 — 4.6% senior notes due 2028698 696 Term loan due 2028748 — 6.5% debentures due 202824 24 5.0% senior notes due 2029397 396 4.6% senior notes due 2029802 802 2.3% senior notes due 2030896 895 4.85% senior notes due 2030595 — 2.75% senior notes due 2031847 846 5.2% senior notes due 2032496 — 5.6% senior notes due 2032597 596 5.4% senior notes due 2034894 893 5.55% senior notes due 2035892 — 6.625% senior notes due 203738 38 5.5% senior notes due 2044397 397 5.22% debentures due 209793 93 9,163 5,998 Adjustments for unamortized gains on interest rate swap terminations(1)(1)Less: current portion(749)(322)Long-term debt$8,413 $5,675 During the year ended December 31, 2025, the Company repaid the $252 million aggregate principal amount of the 7.5% debentures due 2025 and $70 million aggregate principal amount of the 6.5% debentures due 2025. Furthermore, during the year ended December 31, 2025 the Company borrowed and repaid $179 million of short-term borrowings, including commercial paper which had a weighted-average interest rate of 4.29%.On June 16, 2025, the Company issued $600 million of 4.85% senior notes due 2030, $500 million of 5.2% senior notes due 2032 and $900 million of 5.55% senior notes due 2035. The Company recognized net proceeds of approximately $2.0 billion after debt issuance costs and discounts. The proceeds from these notes were used to fund a portion of the acquisition of Silvus.On August 6, 2025, the Company borrowed $1.5 billion of senior delayed draw term loan facilities comprised of a $750 million 364-day facility and a $750 million three-year facility ("term loan due 2028") to fund a portion of the acquisition of Silvus. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 364-Day Term Loan Credit Agreement and Three-Year Term Loan Credit Agreement, each entered into on July 21, 2025. The Company was in compliance with its financial covenants as of December 31, 2025. During the year ended December 31, 2025, the weighted average interest rate of the 364-day facility and the term loan due 2028 was 5.10% and 5.25%, respectively. As of December 31, 2025, $749 million of the 364-day term loan was presented as short-term borrowings within the Company's Consolidated Balance Sheets.

Income TaxesThe Company adopted ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" under the retrospective transition method for the year ended December 31, 2025; as a result, amounts disclosed throughout this footnote have been revised for the years ended December 31, 2024 and December 31, 2023.Components of Income Tax ExpenseComponents of earnings before income taxes are as follows:Years ended December 31202520242023United States$2,130 $1,741 $1,791 Foreign682 231 355 $2,812 $1,972 $2,146 Components of income tax expenses are as follows:Years ended December 31202520242023Current income tax expenseUnited States Federal$259 $410 $253 Foreign183 62 141 States (U.S.)116 133 70 Total current income tax expense$558 $605 $464 Deferred income tax expense (benefit)United States Federal$101 $(207)$(24)Foreign7 23 (17)States (U.S.)(14)(31)9 Total deferred income tax expense (benefit)$94 $(215)$(32)Total income tax expense$652 $390 $432 Differences between income tax expense computed at the U.S. federal statutory tax rate of 21% and income tax expense as reflected in the Consolidated Statements of Operations are as follows:Years ended December 31202520242023U.S. Federal Statutory Tax Rate$591 21.0 %$414 21.0 %$450 21.0 %State and Local Income Taxes, Net of Federal Income tax effect (1)80 2.8 %81 4.1 %62 2.9 %Foreign Tax EffectsOther foreign jurisdictions40 1.4 %24 1.2 %40 1.9 %Effect of Cross-Border Tax LawsForeign-derived intangible income(14)(0.5)%(99)(5.0)%(38)(1.8)%Other6 0.2 %(1)(0.1)%7 0.3 %Tax CreditsForeign tax credit(24)(0.8)%(113)(5.7)%(26)(1.2)%Research & development credit(17)(0.6)%(22)(1.1)%(19)(0.9)%Changes in Valuation Allowances— — %2 0.1 %(16)(0.7)%Nontaxable or Nondeductible ItemsExcess tax benefits on share-based payments(38)(1.4)%(35)(1.8)%(29)(1.4)%Extinguishment of Silver Lake convertible debt— — %124 6.3 %— — %Other24 0.8 %17 0.8 %5 0.2 %Changes in Unrecognized Tax Benefits3 0.1 %(6)(0.3)%(3)(0.1)%Other Adjustments1 — %4 0.2 %(1)(0.1)%Effective Tax Rate$652 23.2 %$390 19.8 %$432 20.1 %(1) The States that contribute to the majority (greater than 50%) of the tax effect in this category include Illinois, California, New York, Florida, New Jersey, and Pennsylvania for all years, as well as Virginia for 2025.*Percentages may not add due to rounding.The effective tax rate for 2025 was higher than the current U.S. federal statutory rate of 21% primarily due to 2025 estimated U.S.

Share-Based Compensation and Other Incentive PlansThe Company grants options to acquire shares of common stock to certain employees. Each option granted has an exercise price of no less than 100% of the fair market value of the common stock on the date of the grant. The awards have a contractual life of five to ten years and vest over two to three years. In conjunction with a change in control, stock options assumed or replaced with comparable stock options only become exercisable if the holder is also involuntarily terminated (for a reason other than cause) or resigns for good reason within 24 months of a change in control.Restricted stock grants consist of shares or the rights to shares of the Company’s common stock which are awarded to certain employees. The grants are restricted in such that they are subject to vesting conditions; however, restricted stock holders have voting rights, and the rights to earn dividends on unvested shares.Restricted stock unit (“RSU”) grants consist of shares or the rights to shares of the Company’s common stock which are awarded to certain employees and non-employee directors. The grants are restricted such that they are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the employee. In conjunction with a change in control, shares of RSUs assumed or replaced with comparable shares of RSUs will only have the restrictions lapse if the holder is also involuntarily terminated (for a reason other than cause) or resigns for good reason within 24 months of a change in control.Performance-based stock options (“performance options”) and market stock units ("MSUs") have been granted to certain Company executive officers, and performance stocks units ("PSUs") have been granted to executives participating in the Long Range Incentive Plan ("LRIP"), including Company executive officers. Performance options have a three-year performance period and are granted as a target number of units subject to adjustment based on company performance. Each performance option granted has an exercise price of no less than 100% of the fair market value of the common stock on the date of the grant. The awards have a contractual life of ten years.

LeasesThe Company leases certain office, factory and warehouse space, land and other equipment under various operating leases.Components of Lease Expense(in millions)December 31, 2025December 31, 2024December 31, 2023Lease expense:Operating lease cost$146 $140 $140 Short-term lease cost2 1 1 Variable cost47 47 36 Sublease income(6)(5)(5)Net lease expense from operating leases$189 $183 $172 Operating Lease Assets and Liabilities(in millions)Statement Line ClassificationDecember 31, 2025December 31, 2024Right-of-use lease assetsOperating lease assets$581 $529 Current lease liabilitiesAccrued liabilities133 127 Operating lease liabilitiesOperating lease liabilities471 427 Other Information Related to Leases(in millions)December 31, 2025December 31, 2024December 31, 2023Supplemental cash flow information:Net cash used for operating activities related to operating leases$156 $152 $147 Right-of-use assets obtained in exchange for lease liabilities$143 $150 $98 During the year ended December 31, 2025, assets obtained in exchange for lease liabilities were primarily driven by new and renewed real estate leases. During the year ended December 31, 2024, the Company recorded $80 million of assets obtained in exchange for lease liabilities due to an assumption that it is reasonably certain that renewal options will be extended on its radio tower site leases operated within the Airwave radio network, consistent with the Home Office's notice of contract extension for the Airwave service through December 31, 2029. During the year ended December 31, 2023, the Company included $66 million of additional leases due to renewals of three large managed service contracts due to an assumption that it is reasonably certain that renewal options will be extended on the associated radio tower site leases.December 31, 2025December 31, 2024Weighted average remaining lease terms (years)55Weighted average discount rate4.21 %3.

We assess, identify and manage material risks from cybersecurity threats through various protective policies, procedures and processes, including through: (1) the monitoring responsibilities of our cybersecurity program; (2) our information security policies and standards, including our global incident response procedure; (3) our audit services department’s annual enterprise risk management (“ERM”) assessment; (4) our third-party cybersecurity risk assessment program; and (5) cybersecurity insurance.Designed to maintain the confidentiality, integrity and availability of customer and internal company information, our cybersecurity program focuses on protecting our enterprise information systems and the secure development and deployment of our products. We monitor for critical vulnerabilities and threat actor activity, and work to create a unified view to prioritize protecting our critical infrastructure (including potential impacts to key third-party service providers to the Company). The cybersecurity program, which is led by our Vice President of Cybersecurity & Information Technology Infrastructure, holds regular meetings to review ongoing internal information security operations, including by reviewing the Company's information security policies, controls, investigations, and responses. We assess the effectiveness of our cybersecurity program using self-assessments and independent third-party analyses, and evaluate our program using frameworks such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. In addition to these independent third-party analyses, third-parties also provide services to support our cybersecurity in several ways, such as through penetration testing and commercial information security threat sharing networks, and by assisting with tabletop exercises and certain monitoring activities.We have designed and implemented a global incident response procedure, which helps enable us to quickly detect, respond to, and recover from third-party malicious attacks and potential security incidents. This procedure includes formal steps to review incidents and implement improvements, including steps to involve the Vice President of Cybersecurity & Information Technology Infrastructure, as appropriate. In addition, we have other specific information security policies and standards, organized to align with various NIST frameworks, which we use to manage our cybersecurity risks.