Third-quarter 2026 earnings call, November 4, 2026: record $16.6 billion backlog, third guidance raise of the year
Motorola Solutions used its third-quarter call to offer something it normally holds back until February: a first look at 2027. CEO Greg Brown said the company expects revenue "approximately in the ZIP Code of $14.25 billion," which implies roughly 9% growth on the new 2026 guide of about $13.05 billion. He also said organic growth should be stronger in 2027 than in 2026 and that operating margins should expand again. That margin claim comes with an explicit warning on component costs, which makes it the more consequential half of the message.
Memory Costs Are the Main Risk to the 2027 Margin Story
Brown said direct memory component spend was about $50 million in 2025 and has risen to roughly $150 million this year. "It wouldn't surprise us if memory costs could very well double, 2027 over 2026," he said, while maintaining that the company would still deliver operating leverage. The mitigation list is familiar: accelerating inventory purchases, working with suppliers to secure continuity of supply, and what Brown called "surgical price increases," though he stressed the company wants to remain competitive on price.
CFO Jason Winkler said the roughly $100 million year-over-year increase in memory cost this year is weighted to the second half, as lower-cost inventory worked through the system and market prices rose. Q3 and Q4 therefore carry more of the burden than the first half did. A tariff item also flatters 2026. Winkler noted that the IEEPA tariff refund booked in Q2, worth about $75 million, helped offset memory in the first half and will not recur next year. That makes 2027 margin expansion a harder target than 2026 and leaves less cushion if memory pricing moves against the company. Still, Q3 non-GAAP operating margin rose 200 basis points to 32.5%, and full-year expansion is now guided to 190 basis points, up from 170. Winkler attributed that to price adjustments passed through to customers and favorable mix.
Silvus Heads to More Than $900 Million, With 30% Growth Guided for Next Year
Silvus, the mesh radio business acquired last year, is now on pace for "a little more than $900 million" in 2026, up from the $850 million the company had guided last quarter. Winkler confirmed that analyst estimates of nearly $300 million in Q3 were directionally correct, and he called the business nonlinear. Brown said Silvus should grow about 30% in 2027, which implies roughly $1.2 billion, and that the company expects to keep taking share. He added that Silvus has "performed above the business case."
Management gave several reasons. COO Jack Molloy said the sales force has doubled, with the business expanding beyond its early Ukraine-driven international base into NATO and the Indo-Pacific. In the U.S., Brown said Silvus is now in testing with the Army, Marine Corps, Air Force and Navy. Management also pointed to the company's spectrum-dominance software and to the battlefield validation of its low-probability-of-intercept, jam-resistant links. Pricing has held. "We haven't seen any degradation at all. Our price points continue to hold and appreciate," Brown said. On maritime, he said Silvus is specified on multiple Saronic unmanned surface vessels and is powering those vessels in the Gulf.
Capacity had been the constraint. Lead times, which at one point reached 20 to 22 weeks, are now 12 to 14 weeks depending on the line. Management said it has lost no business as a result. Los Angeles capacity has been doubled, and a Culver City line producing the lower-cost "LC" mesh radio gives Silvus a way into attritable-drone programs such as drone dominance. LC deliberately omits some of the higher-end software features. The Salt Lake City facility, announced about 60 days ago, begins contributing in 2027. Brown was explicit that the company is prioritizing contested-environment performance over the low end of the market.
D-Fend Adds Counter-Drone Capability, Accretive Next Year
Motorola closed the D-Fend acquisition for $1.3 billion net of cash acquired. D-Fend adds drone detection and cyber-takeover mitigation to the mission-critical networks portfolio. Revenue is expected to be about $185 million on a full-calendar-year basis, of which Motorola will book roughly $45 million in the stub period this year. Brown guided to 40% to 50% growth in 2027, slower than the roughly 50% historical rate Winkler cited. Winkler said the deal will be accretive to margins next year. Most of the $211 million of acquisition-driven revenue growth in Q3 was Silvus, because D-Fend contributed only briefly.
CTO Mahesh Saptharishi described how the company plans to integrate it. D-Fend is going into the Aware real-time crime center platform, and APX NEXT radios can detect drones and feed that data to Aware operators. D-Fend then supplies the mitigation step. "Mission-critical networks is not just a communications platform, it's actually a sensing platform as well," he said. Brown distinguished the technology from jamming, calling cyber takeover "much more than just jamming mitigation."
The $1.3 billion price is large against $185 million of revenue, and the strategic case rests on cross-selling into Motorola's government base. Management said its focus now is integration, though it will keep screening deals. Separately, the Bell Canada LMR network services acquisition, previously expected to close in Q4, has slipped to Q1 or Q2 2027 pending customer and regulatory approvals.
Orders Up Over 20%, Backlog at $16.6 Billion, and Political Risk Dismissed
Q3 revenue grew 12%, with record revenue in both segments. Products and SI rose 12% and Software and Services rose 13%. Non-GAAP EPS was $4.69, up 16%. Orders grew more than 20%. Product orders were up 25%, mostly LMR with some Silvus. Ending backlog reached $16.6 billion, up $1 billion sequentially and $2.1 billion, or 14%, year over year. Full-year revenue guidance rose to about $13.05 billion from $12.975 billion, and non-GAAP EPS guidance rose to $17.94 to $17.99 from $17.62 to $17.72. Q4 guidance is for roughly 13% growth and EPS of $5.47 to $5.52. Full-year operating cash flow expectations increased by $50 million to $3.05 billion. The board also approved a $2 billion increase to the buyback authorization, though Q3 repurchases were only $94 million.
Management was unusually direct about the midterm elections, held the day before the call. Brown acknowledged a "blue wave or blue tsunami" but said the company is "a bit indifferent to the political ebb and flow," noting that public safety funding has held up under administrations of both parties. Molloy said state and local customers are the majority of government revenue, supported by diversified funding from sales tax, real estate tax and 911 fees across roughly 1,300 P25 networks. He said a 20-year analysis showed better-than-expected growth even in years when the House flipped. Brown said DHS is funded through 2029. He also added a caution: "We got to execute. We got to run through the tape on Q4."
One analyst questioned why the full-year revenue raise of about $75 million was smaller than the roughly $95 million of added Silvus and D-Fend contribution, given the Q3 beat. Brown called the guide "prudent" and pointed to what is built into it, namely the company's strongest Q4 ever and strong double-digit LMR growth. Management did not say whether any revenue was pulled forward into Q3.
LMR Refresh Is Early, and AI Is Becoming the Glue for the Ecosystem
On the land mobile radio cycle, Brown said the company is "very much in the early stages of a multiyear refresh" of infrastructure, with timing varying by the age of each system. Three of the largest statewide networks, in Tennessee, Michigan and Colorado, have signed new agreements over the last four quarters, and those deals carry long-term service and cyber contracts that add to margin. On devices, there are about 2 million U.S. first responders, and the company expects 300,000 users of recurring APX NEXT-linked applications by the end of 2026. These are reported in Command Center software. The $96 million APX and SVX order in Q3 shows the device refresh reaching federal customers.
Saptharishi said customers are taking the premium Assist AI tier on "almost 100%" of workflow applications. The AI is embedded rather than sold as a separate product, and its main selling point is that it links 911, CAD and consoles to radios and cameras, with incident summaries pushed to APX NEXT devices. The SVX speaker microphone also captures audio that a standalone body camera would miss, which improves the accuracy of AI-generated reports. Brown said about 200 agencies have ordered SVX, and about a third of them use the DEMS evidence management system. The $139 million, 10-year Louisiana award covers five customers. Three started with the V700 camera and all are expected to migrate to SVX over the contract term. Internationally, the V500 camera integrates with TETRA radios, and Saptharishi said future SVX generations are being designed with TETRA and DIMETRA networks in mind, not only P25.
Management declined to say whether LMR growth will run above its historical 1% to 3% range next year, saying segment detail will come in February. For now, the 2027 outlook looks well supported by backlog and by Silvus, though it depends on memory costs staying manageable.