Item 1. Financial Statements

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Item 1. Financial Statements

Condensed Consolidated Statements of Operations (Unaudited)


(In millions, except per share amounts)	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net sales from products	$	1,533	$	1,563	$	2,980	$	2,968
Net sales from services	1,232		1,065		2,313		2,049
Net sales	2,765		2,628		5,293		5,017
Costs of products sales	646		653		1,220		1,252
Costs of services sales	706		636		1,360		1,234
Costs of sales	1,352		1,289		2,580		2,486
Gross margin	1,413		1,339		2,713		2,531
Selling, general and administrative expenses	450		430		886		827
Research and development expenditures	231		220		464		437
Other charges	40		45		89		104
Operating earnings	692		644		1,274		1,163
Other income (expense):
Interest expense, net	(55)		(69)		(106)		(113)

Other, net	43		5		59		(560)
Total other expense	(12)		(64)		(47)		(673)
Net earnings before income taxes	680		580		1,227		490
Income tax expense	165		135		280		83
Net earnings	515		445		947		407
Less: Earnings attributable to non-controlling interests	2		2		4		3
Net earnings attributable to Motorola Solutions, Inc.	$	513	$	443	$	943	$	404
Earnings per common share:
Basic	$	3.08	$	2.65	$	5.65	$	2.43
Diluted	$	3.04	$	2.60	$	5.57	$	2.37
Weighted average common shares outstanding:
Basic	166.8		166.9		166.8		166.5
Diluted	168.8		170.3		169.4		170.3

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended				Six Months Ended
(In millions)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net earnings	$	515	$	445	$	947	$	407

Foreign currency translation adjustments	77		(3)		118		(27)
Derivative instruments	—		—		—		4

Defined benefit plans	11		7		9		14
Total other comprehensive income (loss), net of tax	88		4		127		(9)
Comprehensive income	603		449		1,074		398
Less: Earnings attributable to non-controlling interests	2		2		4		3
Comprehensive income attributable to Motorola Solutions, Inc. common shareholders	$	601	$	447	$	1,070	$	395

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Balance Sheets (Unaudited)


(In millions, except par value)	June 28, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	3,206	$	2,102
Accounts receivable, net	1,852		1,952
Contract assets	1,380		1,230
Inventories, net	861		766

Other current assets	415		429

Total current assets	7,714		6,479
Property, plant and equipment, net	1,070		1,022
Operating lease assets	590		529
Investments	180		135
Deferred income taxes	1,230		1,280
Goodwill	3,840		3,526
Intangible assets, net	1,361		1,249
Other assets	427		375

Total assets	$	16,412	$	14,595
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	70	$	322
Accounts payable	913		1,018
Contract liabilities	2,016		2,072
Accrued liabilities	1,465		1,643

Total current liabilities	4,464		5,055
Long-term debt	7,661		5,675
Operating lease liabilities	472		427
Other liabilities	1,831		1,719

Stockholders’ Equity
Preferred stock, $100 par value: 0.5 shares authorized; none issued and outstanding	—		—
Common stock, $0.01 par value:	2		2
Authorized shares: 600.0
Issued shares: 6/28/25—168.3; 12/31/24—168.6
Outstanding shares: 6/28/25—166.6; 12/31/24—167.1
Additional paid-in capital	2,043		1,940
Retained earnings	2,335		2,300
Accumulated other comprehensive loss	(2,412)		(2,539)
Total Motorola Solutions, Inc. stockholders’ equity	1,968		1,703
Non-controlling interests	16		16
Total stockholders’ equity	1,984		1,719
Total liabilities and stockholders’ equity	$	16,412	$	14,595

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)



(In millions)	Shares	Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-controlling Interests
Balance as of December 31, 2024	168.6	$	1,942	$	(2,539)	$	2,300	$	16
Net earnings						430		2
Other comprehensive income				39
Issuance of common stock and stock options exercised	0.7	(90)
Share repurchase program	(0.7)					(325)
Share-based compensation expenses		66
Dividends declared $1.09 per share						(182)

Balance as of March 29, 2025	168.6	$	1,918	$	(2,500)	$	2,223	$	18
Net earnings						513		2
Other comprehensive income				88
Issuance of common stock and stock options exercised	0.3	53
Share repurchase program	(0.6)					(219)
Share-based compensation expenses		74
Dividends declared $1.09 per share						(182)
Dividends paid to non-controlling interest on subsidiary common stock								(4)
Balance as of June 28, 2025	168.3	$	2,045	$	(2,412)	$	2,335	$	16


(In millions)	Shares	Common Stock and Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Non-controlling Interests
Balance as of December 31, 2023	167.4	$	1,624	$	(2,540)	$	1,640	$	15
Net earnings (loss)						(39)		1
Other comprehensive loss				(13)
Issuance of common stock and stock options exercised	1.0	(5)
Share repurchase program	(0.1)					(39)
Share-based compensation expenses		56
Dividends declared $0.98 per share						(163)

Balance as of March 30, 2024	168.3	$	1,675	$	(2,553)	$	1,399	$	16
Net earnings						443		2
Other comprehensive income				4
Issuance of common stock and stock options exercised	0.1	6
Share repurchase program	(0.2)					(71)
Share-based compensation expenses		63
Dividends declared $0.98 per share						(164)
Dividends paid to non-controlling interest on subsidiary common stock								(3)
Balance as of June 29, 2024	168.2	$	1,744	$	(2,549)	$	1,607	$	15

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Six Months Ended
(In millions)	June 28, 2025		June 29, 2024
Operating


Net earnings	$	947	$	407


Adjustments to reconcile Net earnings to Net cash provided by operating activities:
Depreciation and amortization	167		166

Non-cash other charges (income)	(5)		15

Share-based compensation expenses	140		119

Loss from the extinguishment of Silver Lake Convertible Debt	—		585

Changes in assets and liabilities, net of effects of acquisitions, dispositions, and foreign currency translation adjustments:
Accounts receivable	129		(57)
Inventories	(84)		29
Other current assets and contract assets	(122)		(183)
Accounts payable, accrued liabilities and contract liabilities	(455)		(331)
Other assets and liabilities	49		(18)
Deferred income taxes	17		(170)
Net cash provided by operating activities	783		562
Investing
Acquisitions and investments, net	(464)		(42)
Proceeds from sales of investments and businesses, net	12		38
Capital expenditures	(85)		(114)

Net cash used for investing activities	(537)		(118)
Financing
Net proceeds from issuance of debt	1,983		1,288
Repayments of debt	(252)		(1,593)


Revolving credit facility renewal fees	(5)		—
Issuances of common stock, net of tax	(37)		1
Purchases of common stock	(543)		(110)

Payments of dividends	(364)		(326)
Payments of dividends to non-controlling interests	(4)		(3)

Net cash provided by (used for) financing activities	778		(743)






Effect of exchange rate changes on total cash and cash equivalents	80		(25)
Net increase (decrease) in total cash and cash equivalents	1,104		(324)
Cash and cash equivalents, beginning of period	2,102		1,705
Cash and cash equivalents, end of period	$	3,206	$	1,381
Supplemental Cash Flow Information
Cash paid during the period for:
Interest paid	$	135	$	107
Income and withholding taxes, net of refunds	$	315	$	350

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).


	INDEX FOR NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		Page No.
Note 1	Basis of Presentation	7
Note 2	Revenue from Contracts with Customers	9
Note 3	Leases	11
Note 4	Other Financial Data	12
Note 5	Debt and Credit Facilities	17
Note 6	Risk Management	18
Note 7	Income Taxes	20
Note 8	Retirement and Other Employee Benefits	21
Note 9	Share-Based Compensation Plans	21
Note 10	Fair Value Measurements	22
Note 11	Sales of Receivables	22
Note 12	Commitments and Contingencies	23
Note 13	Segment Information	24
Note 14	Reorganization of Business	25
Note 15	Intangible Assets and Goodwill	26

Notes to Condensed Consolidated Financial Statements (Unaudited)

(Dollars in millions, except as noted)

**1.**Basis of Presentation

The condensed consolidated financial statements as of June 28, 2025 and for the three and six months ended June 28, 2025 and June 29, 2024 include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Income, Statements of Stockholders' Equity, and Statements of Cash Flows of Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) for all periods presented.

The Company operates on a 52-week fiscal year, with each fiscal year ending on December 31. With respect to each fiscal quarter, the Company operates on a 13-week fiscal quarter, with all fiscal quarters ending on a Saturday.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2024 (the "Form 10-K"). The results of operations for the three and six months ended June 28, 2025 are not necessarily indicative of the operating results to be expected for the full year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Business Overview

The Company manages the business organizationally through two segments: “Products and Systems Integration” and “Software and Services". Within these segments the Company has three principal product lines in which the Company reports net sales: Land Mobile Radio Communications (“LMR” or “LMR Communications”), Video Security and Access Control ("Video"), and Command Center.

LMR Communications: Infrastructure, devices (two-way radio and broadband, including both for public safety and professional and commercial radio (PCR)) and software that enable communications, inclusive of installation and integration, backed by services, to assure availability, security and resiliency.
Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, software and artificial intelligence (AI)-powered analytics that help enable visibility and bring attention to what’s important.
Command Center: Command center solutions and software applications that unify voice, video and data analytics from public safety agencies, enterprises and the community to create a broad informational view to help simplify workflows and improve the accuracy and speed of decisions.

Subsequent to the quarter end, with the acquisition of Silvus Technologies Holdings Inc. (“Silvus”), the Company will now report net sales from its principal product lines by combining the former LMR Communications and newly acquired Silvus under the new technology name Mission Critical Networks (MCN).

Recent Acquisitions

On May 27, 2025, the Company entered into a purchase and sale agreement with Silvus Technologies Group LLC ("Seller") to acquire Silvus Technologies Holdings Inc. (“Silvus”), which subsequent to the quarter end closed on August 6, 2025, for $4.4 billion in upfront consideration, comprising $4.38 billion in cash, subject to customary adjustments for cash, net working capital, transaction expenses and indebtedness, and $20 million in restricted stock to certain employee equity holders. Additionally, under the terms of the transaction, the Seller will have the potential to earn earnout consideration following the achievement of certain financial targets of up to $150 million for the annual period from July 5, 2026 through July 3, 2027 and up to $450 million for the annual period from July 4, 2027 through July 1, 2028 (with the potential to earn a catch-up earnout consideration based on performance in the annual period from July 4, 2027 through July 1, 2028 if the maximum earnout for the annual period from July 5, 2026 through July 3, 2027 is not earned). The earnout consideration, if any, will be made in shares of common stock. Silvus designs and develops software-defined high-speed mobile ad-hoc network (MANET) technology that enables highly secure data, video and voice communications without the need for fixed infrastructure. This acquisition brings mobile ad-hoc network expertise and new applications to the Company's public safety and enterprise portfolio. This business will be part of both the Products and Systems Integration segment and the Software and Services segment.

On July 1, 2024, the Company acquired Noggin, a global provider of critical event management ("CEM") software for $92 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $19 million to certain key employees that will be expensed over a service period of three years. This acquisition enhances the Company's portfolio by adding operational resilience and CEM capabilities, which help enterprises and critical infrastructure anticipate, prepare for and efficiently respond to incidents. The business is part of the Software and Services segment.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2024-03, "Disaggregation of Income Statement Expenses" (DISE), to enhance disclosures relating to key income statement expense topics. This was subsequently amended by ASU No. 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date," which clarified the effective dates. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is still evaluating the complete impact of the adoption of this ASU on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which expands disclosures in an entity's income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company anticipates that it will have additional disclosures regarding cash taxes and the income tax rate reconciliation once it adopts this ASU.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The Company adopted ASU No. 2023-07 for the year ended December 31, 2024 and applied the required retrospective transition method. Refer to Note 13, "Segment Information" in this "Part 1 — Financial Information" of this Form 10-Q for the related disclosures.

2. Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes the disaggregation of the Company's revenue by segment, region, major products and services and customer type for the three and six months ended June 28, 2025 and June 29, 2024, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:


	Three Months Ended
	June 28, 2025						June 29, 2024
(In millions)	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Regions:
North America	$	1,251	$	776	$	2,027	$	1,245	$	672	$	1,917
International	402		336		738		413		298		711
	$	1,653	$	1,112	$	2,765	$	1,658	$	970	$	2,628

Major Products and Services:
LMR Communications	$	1,356	$	649	$	2,005	$	1,363	$	578	$	1,941
Video	297		226		523		295		181		476
Command Center	—		237		237		—		211		211
	$	1,653	$	1,112	$	2,765	$	1,658	$	970	$	2,628

Customer Types:
Direct	$	1,030	$	1,016	2,046		$	1,000	$	880	$	1,880
Indirect	623		96		719		658		90		748
	$	1,653	$	1,112	$	2,765	$	1,658	$	970	$	2,628


	Six Months Ended
	June 28, 2025						June 29, 2024
(In millions)	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Regions:
North America	$	2,429	$	1,450	$	3,879	$	2,328	$	1,282	$	3,610
International	770		644		1,414		821		586		1,407
	$	3,199	$	2,094	$	5,293	$	3,149	$	1,868	$	5,017

Major Products and Services:
LMR Communications	$	2,671	$	1,235	$	3,906	$	2,620	$	1,144	$	3,764
Video	528		436		964		529		345		874
Command Center	—		423		423		—		379		379
	$	3,199	$	2,094	$	5,293	$	3,149	$	1,868	$	5,017

Customer Types:
Direct	$	2,046	$	1,923	$	3,969	$	1,861	$	1,701	$	3,562
Indirect	1,153		171		1,324		1,288		167		1,455
	$	3,199	$	2,094	$	5,293	$	3,149	$	1,868	$	5,017

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. The transaction value associated with remaining performance obligations which were not yet satisfied as of June 28, 2025 was $8.8 billion. A total of $3.4 billion was from Products and Systems Integration performance obligations that were not yet satisfied as of June 28, 2025, of which $1.9 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented. Remaining performance obligations from the Products and Systems Integration segment are equal to disclosed backlog for the segment. A total of $5.4 billion was from Software and Services performance obligations that were not yet satisfied as of June 28, 2025. The determination of Software and Services performance obligations that are not satisfied takes into account a contract term that 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. As a result, remaining performance obligations from the Software and Services segment may be less than disclosed backlog in the Software and Services segment due to multi-year service contracts with termination for convenience clauses. The Company expects to recognize $1.8 billion from unsatisfied Software and Services performance obligations over the next twelve months, with the remaining performance obligations generally to be recognized over time as services are performed and software is implemented.

Contract Balances


(In millions)	June 28, 2025		December 31, 2024
Accounts receivable, net	$	1,852	$	1,952
Contract assets	1,380		1,230
Contract liabilities	2,016		2,072
Non-current contract liabilities	616		496

Payment terms on system contracts are typically tied to implementation milestones associated with progress on contracts, while revenue recognition is over time based on a cost-to-cost method of measuring performance. The Company may recognize a Contract asset or Contract liability, depending on whether revenue has been recognized in excess of billings or billings in excess of revenue. Services contracts are typically billed in advance, generating Contract liabilities until the Company has performed the services. The Company does not record a financing component to contracts when it expects, at contract inception, that the period between the transfer of a promised good or service and related payment terms are less than a year.

Revenue recognized during the three months ended June 28, 2025 which was previously included in Contract liabilities as of March 29, 2025 was $663 million, compared to $553 million of revenue recognized during the three months ended June 29, 2024 which was previously included in Contract liabilities as of March 30, 2024. Revenue recognized during the six months ended June 28, 2025 which was previously included in Contract liabilities as of December 31, 2024 was $886 million, compared to $908 million recognized during the six months ended June 29, 2024 which was previously included in Contract liabilities as of December 31, 2023. Revenue of $5 million was recognized during the three months ended June 28, 2025 related to performance obligations satisfied, or partially satisfied, in previous periods, compared to $11 million of reversals for the three months ended June 29, 2024, primarily driven by changes in the estimates of progress on system contracts. Revenue of $6 million was reversed during the six months ended June 28, 2025 related to revenue recognized for performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $18 million of reversals for the six months ended June 29, 2024.

There were no material expected credit losses recorded on contract assets during each of the three and six months ended June 28, 2025 and June 29, 2024.

Contract Cost Balances


(In millions)	June 28, 2025		December 31, 2024
Current contract cost assets	$	69	$	70
Non-current contract cost assets	130		141

Amortization of contract cost assets was $13 million and $26 million for the three and six months ended June 28, 2025, respectively, and $12 million and $25 million for the three and six months ended June 29, 2024, respectively.

3. Leases

Components of Lease Expense


	Three Months Ended				Six Months Ended
(in millions)	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Lease expense:
Operating lease cost	$	38	$	34	$	75	$	69

Variable cost	16		11		28		22
Sublease income	(2)		(1)		(3)		(3)
Net lease expense from operating leases	$	52	$	44	$	100	$	88

Lease Assets and Liabilities


(in millions)	Statement Line Classification	June 28, 2025		December 31, 2024
Right-of-use lease assets	Operating lease assets	$	590	$	529
Current lease liabilities	Accrued liabilities	129		127
Operating lease liabilities	Operating lease liabilities	472		427

Other Information Related to Leases


	Six Months Ended
(in millions)	June 28, 2025		June 29, 2024

Supplemental cash flow information:
Net cash used for operating activities related to operating leases	$	88	$	88

Right-of-use assets obtained in exchange for lease liabilities	58		91


	June 28, 2025		December 31, 2024

Weighted average remaining lease terms (years)	6		5
Weighted average discount rate:	4.14	%	3.97	%

Future Lease Payments


	June 28, 2025
(in millions)	Operating Leases
Remainder of 2025	$	58
2026	144
2027	142
2028	115
2029	85
Thereafter	135
Total lease payments	679
Less: interest	78
Present value of lease liabilities	$	601

4. Other Financial Data

Statements of Operations Information

Other Charges

Other charges included in Operating earnings consist of the following:


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Other charges (income):
Intangibles amortization (Note 15)	$	39	$	36	$	76	$	76

Reorganization of business (Note 14)	8		4		20		11
Operating lease asset impairments	—		1		—		4
Acquisition-related transaction fees	2		4		8		7

Legal settlements	1		—		5		6

Gain on Hytera litigation	(10)		—		(20)		—

	$	40	$	45	$	89	$	104

During the six months ended June 28, 2025, the Company recognized a gain on the Hytera litigation of $20 million for amounts recovered through legal proceedings due to theft of the Company's trade secrets. Refer to "Hytera Civil Litigation" within "Note 12: Commitments and Contingencies" in this "Part 1 — Financial Information" of this Form 10-Q.

Other Income (Expense)

Interest expense, net, and Other, net, both included in Other income (expense), consist of the following:


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Interest, net:
Interest expense	$	(71)	$	(87)	$	(140)	$	(149)
Interest income	16		18		34		36
	$	(55)	$	(69)	$	(106)	$	(113)
Other, net:
Net periodic pension and postretirement benefit (Note 8)	$	30	$	31	$	61	$	63


Loss from the extinguishment of Silver Lake Convertible Debt	—		—		—		(585)
Investment impairments	—		—		—		(3)
Foreign currency gain (loss)	(42)		3		(62)		4
Gain (loss) on derivative instruments (Note 6)	34		(5)		48		(15)

Fair value adjustments to equity investments	18		(11)		13		(13)
Assessments on uncertain tax positions	—		(11)		—		(11)
Other	3		(2)		(1)		—
	$	43	$	5	$	59	$	(560)

Earnings Per Common Share

Basic and diluted earnings per common share from net earnings attributable to Motorola Solutions, Inc. are computed as follows:


	Amounts attributable to Motorola Solutions, Inc. common stockholders
	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Basic earnings per common share:
Earnings	$	513	$	443	$	943	$	404
Weighted average common shares outstanding	166.8		166.9		166.8		166.5
Per share amount	$	3.08	$	2.65	$	5.65	$	2.43
Diluted earnings per common share:
Earnings	$	513	$	443	$	943	$	404
Weighted average common shares outstanding	166.8		166.9		166.8		166.5
Add effect of dilutive securities:
Share-based awards	2.0		3.4		2.6		3.8

Diluted weighted average common shares outstanding	168.8		170.3		169.4		170.3
Per share amount	$	3.04	$	2.60	$	5.57	$	2.37

In the computation of diluted earnings per common share for the three months ended June 28, 2025, the assumed exercise of 0.1 million options and 0.1 million awards subject to performance conditions, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.

In the computation of diluted earnings per common share for the six months ended June 28, 2025, the assumed exercise of 0.1 million options and 0.1 million awards subject to performance conditions, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.

In the computation of diluted earnings per common share for the three months ended June 29, 2024, the assumed exercise of 0.3 million options, inclusive of 0.2 million options subject to market based contingent option agreements, were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.

In the computation of diluted earnings per common share for the six months ended June 29, 2024, a total of 0.5 million shares related to the 1.75% senior convertible notes issued to Silver Lake Partners ("Silver Lake Convertible Debt") were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive. In addition, the assumed exercise of 0.3 million options, inclusive of 0.2 million options subject to market based contingent option agreements were excluded from the computation of diluted earnings per common share because their inclusion would have been antidilutive.

Balance Sheet Information

Accounts Receivable, Net

Accounts receivable, net, consists of the following:


	June 28, 2025		December 31, 2024
Accounts receivable	$	1,927	$	2,035
Less allowance for credit losses	(75)		(83)
	$	1,852	$	1,952

Inventories, Net

Inventories, net, consist of the following:


	June 28, 2025		December 31, 2024
Finished goods	$	442	$	396
Work-in-process and production materials	544		498
	986		894
Less inventory reserves	(125)		(128)
	$	861	$	766

Other Current Assets

Other current assets consist of the following:


	June 28, 2025		December 31, 2024
Current contract cost assets (Note 2)	$	69	$	70
Contractor receivables	34		44
Tax-related deposits	38		54
Other	274		261
	$	415	$	429

Property, Plant and Equipment, Net

Property, plant and equipment, net, consist of the following:


	June 28, 2025		December 31, 2024
Land	$	5	$	5
Leasehold improvements	458		441
Machinery and equipment	2,447		2,243
	2,910		2,689
Less accumulated depreciation	(1,840)		(1,667)
	$	1,070	$	1,022

Depreciation expense was $47 million for both the three months ended June 28, 2025 and June 29, 2024. Depreciation expense for the six months ended June 28, 2025 and June 29, 2024 was $91 million and $90 million, respectively.

Investments

Investments consist of the following:


	June 28, 2025		December 31, 2024





Common stock	$	36	$	23
Strategic investments	57		26
Company-owned life insurance policies	77		75
Equity method investments	10		11

	$	180	$	135

Other Assets

Other assets consist of the following:


	June 28, 2025		December 31, 2024
Defined benefit plan assets	$	201	$	162
Non-current contract cost assets (Note 2)	130		141
Other	96		72
	$	427	$	375

Accounts Payable

The Company utilizes a supplier finance program which provides our suppliers the ability to accelerate payment on the Company's invoices beyond the stated payment terms. Under the terms of this program, the Company agrees to pay an intermediary the stated amount of confirmed invoices on the stated maturity dates of the invoices, and the supplier is able to negotiate earlier payment terms with the intermediary. The Company or the intermediary may terminate their agreement at any time upon 60 days' notice. The Company does not provide any forms of guarantees under this arrangement. Supplier participation in the program is solely at the supplier's discretion, and the participating suppliers negotiate their arrangements directly with the intermediary. The Company has no economic interest in a supplier's decision to participate in the program, and their participation has no bearing on our payment terms or amounts due. The stated invoice payment terms range from 75 to 120 days from the invoice date and are considered commercially reasonable.

The Company's outstanding amounts related to the suppliers participating in this program was $38 million as of both June 28, 2025 and December 31, 2024. Supplier finance program obligations are classified as Accounts payable within the Condensed Consolidated Balance Sheets.

Accrued Liabilities

Accrued liabilities consist of the following:


	June 28, 2025		December 31, 2024
Compensation	$	304	$	406
Tax liabilities	161		217
Dividend payable	182		182
Trade liabilities	168		160
Operating lease liabilities (Note 3)	129		127
Customer reserves	90		97
Other	431		454
	$	1,465	$	1,643

Other Liabilities

Other liabilities consist of the following:


	June 28, 2025		December 31, 2024
Defined benefit plans (Note 8)	$	739	$	768

Non-current contract liabilities (Note 2)	616		496
Unrecognized tax benefits (Note 7)	38		39
Deferred income taxes (Note 7)	91		87
Environmental reserve	119		119
Deferred compensation	99		89
Other	129		121
	$	1,831	$	1,719

Stockholders’ Equity

Share Repurchase Program: During the three and six months ended June 28, 2025, the Company repurchased approximately 0.6 million and 1.3 million shares at an average price of $414.42 and $427.74 per share for an aggregate amount of $218 million and $543 million, respectively.

Payment of Dividends: During the three months ended June 28, 2025 and June 29, 2024, the Company paid $182 million and $163 million, respectively, in cash dividends to holders of its common stock. Subsequent to the quarter, the Company paid an additional $182 million in cash dividends to holders of its common stock. During the six months ended June 28, 2025 and June 29, 2024, the Company paid $364 million and $326 million, respectively, in cash dividends to holders of its common stock.

Accumulated Other Comprehensive Loss

The following table displays the changes in Accumulated other comprehensive loss, including amounts reclassified into income, and the affected line items in the Condensed Consolidated Statements of Operations during the three and six months ended June 28, 2025 and June 29, 2024:


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Foreign Currency Translation Adjustments:
Balance at beginning of period	$	(505)	$	(506)	$	(546)	$	(482)
Other comprehensive income (loss) before reclassification adjustment	75		(2)		113		(29)
Tax benefit (expense)	2		(1)		5		2
Other comprehensive income (loss), net of tax	77		(3)		118		(27)

Balance at end of period	$	(428)	$	(509)	$	(428)	$	(509)










Derivative Instruments:
Balance at beginning of period	$	(7)	$	(8)	$	(7)	$	(12)
Other comprehensive income before reclassification adjustment	—		—		—		4

Other comprehensive income before reclassification adjustment, net of tax	—		—		—		4



Other comprehensive income, net of tax	—		—		$	—	$	4
Balance at end of period	$	(7)	$	(8)	$	(7)	$	(8)
Defined Benefit Plans:
Balance at beginning of period	$	(1,988)	$	(2,039)	$	(1,986)	$	(2,046)
Other comprehensive income (loss) before reclassification adjustment	4		—		(8)		—
Tax expense (benefit)	(1)		—		2		—
Other comprehensive income (loss) before reclassification adjustment, net of tax	3		—		(6)		—
Reclassification adjustment - Actuarial net losses into Other income (Note 8)	9		8		18		17
Reclassification adjustment - Prior service benefits into Other income (Note 8)	—		1		—		1

Tax expense	(1)		(2)		(3)		(4)
Reclassification adjustments into Net earnings, net of tax	8		7		15		14
Other comprehensive income, net of tax	11		7		9		14
Balance at end of period	$	(1,977)	$	(2,032)	$	(1,977)	$	(2,032)
Total Accumulated other comprehensive loss	$	(2,412)	$	(2,549)	$	(2,412)	$	(2,549)

5. Debt and Credit Facilities


	June 28, 2025		December 31, 2024




7.5% debentures due 2025	$	—	$	252
6.5% debentures due 2025	70		70
4.6% senior notes due 2028	697		696
6.5% debentures due 2028	24		24
5.0% senior notes due 2029	397		396
4.6% senior notes due 2029	802		802
2.3% senior notes due 2030	896		895
4.85% senior notes due 2030	595		—
2.75% senior notes due 2031	846		846
5.2% senior notes due 2032	496		—
5.6% senior notes due 2032	596		596
5.4% senior notes due 2034	893		893
5.55% senior notes due 2035	892		—
6.625% senior notes due 2037	38		38
5.5% senior notes due 2044	397		397
5.22% debentures due 2097	93		93
	7,732		5,998
Adjustments for unamortized gains on interest rate swap terminations	(1)		(1)
Less: current portion	(70)		(322)
Long-term debt	$	7,661	$	5,675

On June 16, 2025, the Company issued $600 million of 4.85% senior notes due 2030 (“2030 Notes”), $500 million of 5.2% senior notes due 2032 (“2032 Notes”) and $900 million of 5.55% senior notes due 2035 (“2035 Notes”). 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 May 27, 2025, the Company obtained financing commitments for $2.5 billion of senior unsecured delayed draw term loan facilities, comprised of a $1.75 billion 364-day facility and a $750 million three year facility. Upon issuance of 2030 Notes, 2032 Notes, and 2035 Notes, the financing commitments under the 364-day facility were reduced to $750 million. Subsequent to the quarter, on July 21, 2025 the Company entered into credit agreements for a $750 million 364-day delayed draw term loan and a $750 million three year delayed draw term loan, and on August 6, 2025 the Company borrowed $750 million under the 364-day delayed draw term loan and $750 million under the three year delayed draw term loan to fund a portion of the acquisition of Silvus.

During the three months ended June 28, 2025, the Company repaid the $252 million aggregate principal amount of the 7.5% senior notes due 2025.

As of June 28, 2025, $70 million of 6.5% debentures due 2025, which mature in September 2025, were presented as the Current portion of long-term debt within the Company's Condensed Consolidated Balance Sheets, as the debentures mature within the next twelve months.

On April 25, 2025, the Company entered into a $2.25 billion syndicated, unsecured revolving credit facility maturing in April 2030 which can be used for general corporate purposes and letters of credit (the "2025 Motorola Solutions Credit Agreement"), which replaced the Company's $2.25 billion 2021 Motorola Solutions Credit Agreement scheduled to mature in March 2026. Borrowings under the facility bear interest at the prime rate plus the applicable margin, or at a spread above the Secured Overnight Financing Rate (SOFR), at the Company's option. An annual facility fee is payable on the undrawn amount of the credit line. The interest rate and facility fee are subject to adjustment if the Company's credit rating changes. The Company must comply with certain customary covenants including a maximum leverage ratio, as defined in the 2025 Motorola Solutions Credit Agreement. The Company was in compliance with its financial covenants as of June 28, 2025.

The Company has an unsecured commercial paper program, backed by the 2025 Motorola Solutions Credit Agreement, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $2.2 billion outstanding at any one time. Proceeds from the issuances of the notes are expected to be used for general corporate purposes. The notes are issued at a zero-coupon rate and are issued at a discount which reflects the interest component. At maturity, the notes are paid back in full including the interest component. The notes are not redeemable prior to maturity. As of June 28, 2025 the Company had no outstanding debt under the commercial paper program. Subsequent to the quarter, the Company utilized its commercial paper program as a source of short-term liquidity to partially fund the acquisition of Silvus.

6. Risk Management

Foreign Currency Risk

The Company had outstanding foreign exchange contracts with notional amounts totaling $1.3 billion and $1.0 billion for the periods ended June 28, 2025 and December 31, 2024, respectively. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.

The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of June 28, 2025, and the corresponding positions as of December 31, 2024:


	Notional Amount
Net Buy (Sell) by Currency	June 28, 2025		December 31, 2024
British pound	$	212	$	124
Euro	167		150
Australian dollar	(145)		(136)
Canadian dollar	93		70
Chinese renminbi	(45)		(48)

Counterparty Risk

The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of June 28, 2025, all of the counterparties had investment grade credit ratings. As of June 28, 2025, the Company had $10 million of exposure to aggregate credit risk with all counterparties.

Derivative Financial Instruments

The following tables summarize the fair values and locations in the Condensed Consolidated Balance Sheets of all derivative financial instruments held by the Company as of June 28, 2025 and December 31, 2024:


	Fair Values of Derivative Instruments
June 28, 2025	Other Current Assets		Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	—	$	20

Derivatives not designated as hedging instruments:
Foreign exchange contracts	9		1
Equity swap contracts	1		—
Total derivatives	$	10	$	21


	Fair Values of Derivative Instruments
December 31, 2024	Other Current Assets		Accrued Liabilities
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	7	$	—

Derivatives not designated as hedging instruments:
Foreign exchange contracts	3		9
Equity swap contracts	—		1
Total derivatives	$	10	$	10

The following table summarizes the effect of derivatives on the Company's condensed consolidated financial statements for the three and six months ended June 28, 2025 and June 29, 2024:


	Financial Statement Location	Three Months Ended						Six Months Ended
Derivatives	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts	Accumulated other comprehensive income (loss)	$	(17)		$	2		$	(23)		$	6
Amortized hedge income	Other income (expense)	2			—			3			1
Treasury rate lock	Accumulated other comprehensive income (loss)	—			—			—			4

Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other income (expense)	$	34		$	(5)		$	48		$	(15)
Equity swap contracts	Selling, general and administrative expenses	2			1			1			2

Net Investment Hedges

The Company uses foreign exchange forward and option contracts to hedge against the effect of the British pound and the Euro exchange rate fluctuations against the U.S. dollar on a portion of its net investments in certain European operations. The Company recognizes changes in the fair value of the net investment hedges as a component of Foreign currency translation adjustments within Other comprehensive income to offset a portion of the change in translated value of the net investments being hedged, until the investments are sold or liquidated. As of June 28, 2025, the Company had €160 million of net investment hedges in certain Euro functional subsidiaries and £50 million of net investment hedges in a British pound functional subsidiary.

The Company excludes the difference between the spot rate and the forward rate of the forward contracts and initial time value of the options from its assessment of hedge effectiveness. The effect of the forward points recognized in forward contracts and the initial time value of the option contracts are amortized on a straight-line basis and recognized through interest expense within Other income (expense) in the Condensed Consolidated Statement of Operations.

Equity Swap Contracts

The Company uses equity swap contracts which serve as economic hedges against volatility within the equity markets, impacting the Company's deferred compensation plan obligations. These contracts are not designated as hedges for accounting purposes. Unrealized gains and losses on these contracts are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The notional amount of these contracts as of June 28, 2025 was $20 million.

Treasury Rate Lock

In 2023, the Company entered into treasury rate agreements which locked in the interest rate for $200 million in future debt issuances. The treasury rate lock agreements were designated and qualified as cash flow hedges. During the six months ended June 29, 2024, the Company issued $900 million of 5.4% senior notes due 2034 (the "2034 notes"). The treasury rate lock agreements were terminated upon the issuance of the 2034 notes for a net settlement loss of $8 million. The accumulated loss recorded in Accumulated other comprehensive income (loss) will be reclassified to interest expense on a straight-line basis over the ten year term of the 2034 notes.

7. Income Taxes

At the end of each interim reporting period, the Company makes an estimate of its annual effective income tax rate. Tax expense in interim periods is calculated at the estimated annual effective tax rate plus or minus the tax effects of items of income and expense that are discrete to the period. The estimate used in providing for income taxes on a year-to-date basis may change in subsequent interim periods.

The following table provides details of income taxes:


	Three Months Ended						Six Months Ended
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
Net earnings before income taxes	$	680		$	580		$	1,227		$	490
Income tax expense	165			135			280			83
Effective tax rate	24		%	23		%	23		%	17		%

The effective tax rate for the three months ended June 28, 2025 of 24% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 28, 2025 of 23% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by excess tax benefits of share-based compensation.

The effective tax rate for the three months ended June 29, 2024 of 23% was higher than the U.S. federal statutory tax rate of 21% primarily due to state tax expense, offset by the tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions and excess tax benefits of share-based compensation. The effective tax rate for the six months ended June 29, 2024 of 17% was lower than the U.S. federal statutory tax rate of 21% primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return, and excess tax benefits of share-based compensation, offset by the non-tax deductible loss on the extinguishment of the Silver Lake Convertible Debt in the first quarter of 2024 and state tax expense.

The effective tax rate for the three months ended June 28, 2025 of 24% was higher than the effective tax rate for the three months ended June 29, 2024 of 23%, primarily due to tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024 and lower excess tax benefits of share-based compensation in 2025. The effective tax rate for the six months ended June 28, 2025 of 23% was higher than the effective tax rate for the six months ended June 29, 2024 of 17%, primarily due to the tax benefit recognized upon the Company's decision to implement a business initiative in 2024 which allowed for additional utilization of foreign tax credit carryforwards and a higher foreign derived intangible income deduction on its 2023 U.S. tax return and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024, offset by the non-tax deductible loss on the extinguishment of Silver Lake Convertible Debt in 2024.

Subsequent to quarter end, on July 4, 2025, the "One Big Beautiful Bill Act" was enacted into law, introducing a broad range of changes to the U.S. corporate income tax framework. The legislation includes business provisions that may impact the Company's tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. The Company is currently evaluating the potential effects of these changes on its financial statements, inclusive of its income tax provision, income tax payable, and deferred tax asset balances. Due to the timing of the bill's enactment, the financial impact of this legislation is not reflected in this quarter's results. The Company will recognize the effects of this legislation in accordance with the enactment and effective dates of the applicable provisions.

8. Retirement and Other Employee Benefits

Pension and Postretirement Health Care Benefits Plans

The net periodic benefits for Pension and Postretirement Health Care Benefits Plans were as follows:


	U.S. Pension Benefit Plans				Non-U.S. Pension Benefit Plans				Postretirement Health Care Benefits Plan
Three Months Ended	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024

Interest cost	$	50	$	47	$	14	$	14	$	2	$	2
Expected return on plan assets	(76)		(74)		(26)		(26)		(3)		(3)
Amortization of:
Unrecognized net loss	6		6		1		1		2		1
Unrecognized prior service cost	—		—		—		—		—		1

Net periodic pension cost (benefits)	$	(20)	$	(21)	$	(11)	$	(11)	$	1	$	1


	U.S. Pension Benefit Plans				Non-U.S. Pension Benefit Plans				Postretirement Health Care Benefits Plan
Six Months Ended	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024

Interest cost	100		94		28		28		3		3
Expected return on plan assets	(152)		(149)		(52)		(51)		(6)		(6)
Amortization of:
Unrecognized net loss	12		12		3		3		3		2
Unrecognized prior service cost (benefit)	—		—		(1)		(1)		1		2

Net periodic pension cost (benefits)	$	(40)	$	(43)	$	(22)	$	(21)	$	1	$	1

9. Share-Based Compensation Plans

Compensation expense for the Company’s share-based plans was as follows:


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Share-based compensation expense included in:
Costs of sales	$	14	$	12	$	28	$	24
Selling, general and administrative expenses	40		35		75		64
Research and development expenditures	20		16		37		31
Share-based compensation expense included in Operating earnings	74		63		140		119
Tax benefit	(15)		(13)		(29)		(24)
Share-based compensation expense, net of tax	$	59	$	50	$	111	$	95
Decrease in basic earnings per share	$	(0.35)	$	(0.30)	$	(0.67)	$	(0.57)
Decrease in diluted earnings per share	$	(0.35)	$	(0.29)	$	(0.66)	$	(0.56)

During the six months ended June 28, 2025, the Company granted 0.5 million RSUs, 0.1 million performance stock units (PSUs) and 0.04 million market stock units (MSUs) with an aggregate grant-date fair value of $186 million, $24 million and $17 million, respectively, and 0.1 million stock options and 0.1 million performance options (POs) with an aggregate grant-date fair value of $8 million and $17 million, respectively. The share-based compensation expense will generally be recognized over the vesting period of three years.

10. Fair Value Measurements

The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of June 28, 2025 and December 31, 2024 were as follows:


June 28, 2025	Level 1		Level 2		Total
Assets:
Foreign exchange derivative contracts	$	—	$	9	$	9



Equity swap contracts	1		—		1
Common stock	36		—		36
Liabilities:
Foreign exchange derivative contracts	$	—	$	21	$	21


December 31, 2024	Level 1		Level 2		Total
Assets:
Foreign exchange derivative contracts	$	—	$	10	$	10





Common stock	23		—		23
Liabilities:
Foreign exchange derivative contracts	$	—	$	9	$	9

Equity swap contracts	1		—		1

The Company had no foreign exchange derivative contracts, equity swap contracts or common stock investments in Level 3 holdings as of June 28, 2025 or December 31, 2024.

At June 28, 2025 and December 31, 2024, the Company had $1.5 billion and $1.2 billion, respectively, of investments in money market government and U.S. treasury funds classified (Level 1) as Cash and cash equivalents in its Condensed Consolidated Balance Sheets. The money market funds had quoted market prices that are equivalent to par.

Using quoted market prices and market interest rates, the fair value of the Company's long-term debt as of June 28, 2025 was $7.6 billion. The fair value of long-term debt at December 31, 2024 was $5.8 billion.

All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.

11. Sales of Receivables

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended June 28, 2025 and June 29, 2024:


	Three Months Ended		Six Months Ended
	June 28, 2025	June 29, 2024	June 28, 2025	June 29, 2024


Long-term receivables sales proceeds	89	17	113	27

At June 28, 2025, the Company had retained servicing obligations for $845 million of long-term receivables, compared to $794 million at December 31, 2024. Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables. The Company had outstanding commitments to provide long-term financing to third parties totaling $171 million at June 28, 2025, compared to $105 million at December 31, 2024.

12. Commitments and Contingencies

Legal Matters

Hytera Civil Litigation

In 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 the 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 that use the Company’s stolen trade secrets, setting royalty rates for Hytera's sale of relevant products from July 1, 2019 forward. The District Court then ordered Hytera to make royalty payments into a third-party escrow, while it reviewed Hytera's motion to modify the royalty order, which the District Court eventually denied. Hytera refused to make all of its royalty payments. The Company filed a motion to hold Hytera in civil contempt for failing to make every royalty payment, which the District Court granted in 2023. As a result, on September 1, 2023, Hytera made a payment of $56 million into the third-party escrow, in addition to subsequent de minimis quarterly royalty payments between October 2022 and November 2024. The aggregate amount paid into escrow of approximately $61 million was released to the Company on November 26, 2024 and was recorded as a gain within Other charges within the Consolidated Statement of Operations.

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 $136.3 million in copyright infringement damages, and instructed the District Court to reconsider its denial of the Company's request for an injunction. In all other respects, the Court of Appeals affirmed the judgment of the District Court. On October 4, 2024, the Court of Appeals denied Hytera's motion for rehearing. The case was remanded to the District Court for further action per the Court of Appeals' decision. On January 2, 2025, Hytera filed a petition for writ of certiorari with the Supreme Court of the United States, which was subsequently denied on February 24, 2025. The issues of copyright recalculation and injunction are currently briefed. The District Court is seeking to schedule a hearing on these issues for sometime later in 2025.

On March 4, 2025, Hytera made a partial payment toward the judgment of approximately $10 million, and an additional payment of approximately $10 million on April 25, 2025. Both payments were recorded as a gain within Other charges within the Consolidated Statement of Operations. Subsequent to quarter end, the Company received additional payments of approximately $41 million. The Company continues to seek collection of the judgment through the ongoing legal process.

In 2024, the parties engaged in competing litigation in the District Court and a court in China related to the possible continued use by Hytera of the Company’s trade secrets in Hytera’s currently shipping products. On April 2, 2024, the District Court held Hytera in civil contempt, and issued a worldwide sales injunction of certain Hytera products and a daily fine for Hytera's failure to withdraw its competing litigation in China. On April 16, 2024, the Court of Appeals granted Hytera's motion for an emergency stay of the contempt sanctions, pending its review of the District Court's various orders related to the competing litigation and contempt sanctions. The District Court held hearings in August 2024, concerning whether Hytera's currently shipping products continue to misuse the Company's trade secrets and copyrighted source code. The issue is currently under consideration by the District Court.

Hytera Criminal Litigation

On January 13, 2025, Hytera pleaded guilty to one federal felony count of conspiracy to steal the Company's trade secrets in a criminal action brought by the U.S. Department of Justice against Hytera and several of its employees in the District Court. Hytera's sentencing has been scheduled for November 24th and 25th, 2025. Pursuant to the plea agreement, Hytera's sentence may include a fine to be paid to the government and restitution to be paid to the Company in the amount to be determined by the District Court.

13. Segment Information

Significant Segment Expenses


	Three Months Ended
	June 28, 2025						June 29, 2024
	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Net sales	$	1,653	$	1,112	$	2,765	$	1,658	$	970	$	2,628
Cost of sales	777		575		1,352		784		505		1,289
Gross margin	876		537		1,413		874		465		1,339
Selling, general and administrative expenses	355		95		450		342		88		430
Research and development expenditures	143		88		231		140		80		220
Other charges	15		25		40		13		32		45
Operating earnings	$	363	$	329	$	692	$	379	$	265	$	644
Total other expense					(12)						(64)
Earnings before income taxes					$	680					$	580


	Six Months Ended
	June 28, 2025						June 29, 2024
	Products and Systems Integration		Software and Services		Total		Products and Systems Integration		Software and Services		Total
Net Sales	$	3,199	$	2,094	$	5,293	$	3,149	$	1,868	$	5,017
Cost of Sales	1,471		1,109		2,580		1,500		986		2,486
Gross Margin	1,728		985		2,713		1,649		882		2,531
Selling, general and administrative expenses	696		190		886		654		173		827
Research and development expenditures	285		179		464		276		161		437
Other charges	32		57		89		30		74		104
Operating earnings	$	715	$	559	$	1,274	$	689	$	474	$	1,163
Total other expense					(47)						(673)
Earnings before income taxes					$	1,227					$	490

Capital Expenditures by Segment


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025	June 29, 2024
Products and Systems Integration	$	23	$	23	38	$	40
Software and Services	25		45		47	74
	$	48	$	68	85	$	114

Depreciation Expense by Segment


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Products and Systems Integration	$	23	$	22	$	44	$	43
Software and Services	24		25		47		47
	$	47	$	47	$	91	$	90

14. Reorganization of Business

2025 Charges

During the three months ended June 28, 2025, the Company recorded net reorganization of business charges of $14 million, including $8 million of charges in Other charges and $6 million of charges in Cost of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $13 million related to employee separation costs and $1 million related to exit costs.

During the six months ended June 28, 2025, the Company recorded net reorganization of business charges of $31 million, including $20 million of charges in Other charges and $11 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $31 million were charges of $33 million related to employee separation costs and $1 million related to exit costs, partially offset by $3 million of reversals for employee separation accruals no longer needed.

The following table displays the net charges incurred by segment:



June 28, 2025	Three Months Ended		Six Months Ended

Products and Systems Integration	$	10	$	22
Software and Services	4		9
	$	14	$	31

Reorganization of Businesses Accruals


	January 1, 2025		Additional Charges		Adjustments		Amount Used		June 28, 2025
Employee separation costs	$	27	$	33	$	(3)	$	(33)	$	24
Exit costs	1		1		—		(1)		1
	$	28	$	34	$	(3)	$	(34)	$	25

Exit Costs

At January 1, 2025, the Company had an accrual of $1 million for exit costs, related to the Company's exit of the Emergency Service Network contract with the U.K. Home Office. The $1 million of exit costs are recorded in Accrued liabilities in the Company's Condensed Consolidated Balance Sheets at June 28, 2025, and are expected to be paid within one year.

Employee Separation Costs

At January 1, 2025, the Company had an accrual of $27 million for employee separation costs. The 2025 additional charges of $33 million represent severance costs for approximately 470 employees. The adjustment of $3 million reflects reversals for accruals no longer needed. The $33 million used reflects cash payments to severed employees. The remaining accrual of $24 million, which is included in Accrued liabilities in the Company’s Condensed Consolidated Balance Sheets at June 28, 2025, is expected to be paid, primarily within one year, to approximately 670 employees, who have either been severed or have been notified of their severance and have begun or will begin receiving payments.

2024 Charges

During the three months ended June 29, 2024, the Company recorded net reorganization of business charges of $4 million, including $4 million of charges in Other charges in the Company's Condensed Consolidated Statements of Operations. Included in the $4 million were charges of $10 million related to employee separation costs, partially offset by $2 million of reversals for employee separation accruals and $4 million of reversals for exit cost accruals that are no longer needed.

During the six months ended June 29, 2024, the Company recorded net reorganization of business charges of $14 million, including $11 million of charges in Other charges and $3 million of charges in Costs of sales in the Company's Condensed Consolidated Statements of Operations. Included in the $14 million were charges of $22 million related to employee separation costs, partially offset by $4 million of reversals for exit cost accruals no longer needed and $4 million of reversals for employee separation accruals no longer needed.

The following table displays the net charges incurred by segment:


June 29, 2024	Three Months Ended		Six Months Ended

Products and Systems Integration	$	6	$	14
Software and Services	(2)		—
	$	4	$	14

15. Intangible Assets and Goodwill

On March 6, 2025, the Company acquired Theatro, a maker of AI and voice-powered communication and digital workflow software for frontline workers for $173 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value price of $5 million to certain key employees that will be expensed over a service period of three years. The acquisition enhances the Company's portfolio of enterprise technologies by integrating Theatro's AI voice assistant in the Company's complementary workflows across our portfolio, including body cameras, fixed video, panic buttons and radios. The Company recognized $132 million of goodwill, $48 million of identifiable intangible assets and $7 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $15 million of customer relationships and $32 million of developed technology and will be amortized over a period of three, nineteen and eleven years, respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, intangible assets, net liabilities and goodwill may be subject to change.

On February 21, 2025, the Company acquired RapidDeploy, a provider of cloud-native 911 solutions for public safety for $241 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $6 million to certain key employees that will be expensed over a service period of two years. The acquisition complements the Company's Command Center portfolio of 911 solutions. The Company recognized $156 million of goodwill, $117 million of identifiable intangible assets, and $32 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $6 million of trade names, $36 million of customer relationships and $75 million of developed technology and will be amortized over a period of nine, nineteen and eighteen years, respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, intangible assets, net liabilities and goodwill may be subject to change.

On October 29, 2024, the Company acquired 3tc Software, a provider of control room software solutions for $23 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $4 million to certain key employees that will be expensed over a service period of one year. The acquisition expands the Company's critical experience and innovation focused on advancing CAD for the U.K.'s public safety agencies. The Company recognized $15 million of goodwill, $11 million of identifiable intangible assets, and $3 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible asset was classified as $11 million of developed technology and will be amortized over a period of seven years. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net liabilities and goodwill may be subject to change.

On July 1, 2024, the Company acquired Noggin, a global provider of CEM software for $92 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $19 million to certain key employees that will be expensed over a service period of three years. This acquisition enhances the Company's portfolio by adding operational resilience and CEM capabilities, which help enterprises and critical infrastructure anticipate, prepare for and efficiently respond to incidents. The Company recognized $50 million of goodwill, $53 million of identifiable intangible assets, and $11 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $7 million of customer relationships and $45 million of developed technology and will be amortized over a period of three, fifteen and thirteen years, respectively. The business is part of the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net liabilities and goodwill may be subject to change.

On July 1, 2024, the Company acquired a company that provides vehicle location and management solutions for $132 million, net of cash acquired. In addition, the Company issued restricted stock at a fair value of $3 million to certain key employees that will be expensed over a service period of three years. The Company recognized $62 million of goodwill, $65 million of identifiable intangible assets and $5 million of net assets. The goodwill is deductible for tax purposes. The identifiable intangible assets were classified as $11 million of trade names, $51 million of customer relationships and $3 million of developed technology and will be amortized over a period of nine, eighteen and six years, respectively. The acquisition expands the Company's video solutions within the Software and Services segment. The purchase accounting is not yet complete and as such, the final allocation among income tax accounts, net assets and goodwill may be subject to change.

On February 13, 2024, the Company acquired Silent Sentinel, a provider of specialized, long-range cameras, for $37 million, net of cash acquired. This acquisition complements the Company's portfolio of fixed video cameras, expanding its footprint with government and critical infrastructure customers, and strengthens the Company's position as a global leader in end-to-end video security solutions. The Company recognized $16 million of goodwill, $22 million of identifiable intangible assets and $1 million of net liabilities. The goodwill is not deductible for tax purposes. The identifiable intangible assets were classified as $1 million of trade names, $10 million of customer relationships and $11 million of developed technology and will be amortized over a period of two, fourteen and ten years, respectively. The business is a part of the Products and Systems Integration segment. The purchase accounting was completed as of the first quarter of 2025.

Intangible Assets

Amortized intangible assets were comprised of the following:


	June 28, 2025				December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Developed technology	$	1,351	$	584	$	1,226	$	535
Customer-related	1,735		1,186		1,609		1,093
Other intangibles	128		83		118		76
	$	3,214	$	1,853	$	2,953	$	1,704

Amortization expense on intangible assets was $39 million and $76 million for the three and six months ended June 28, 2025, respectively. Amortization expense on intangible assets was $36 million and $76 million for the three and six months ended June 29, 2024, respectively. As of June 28, 2025, annual amortization expense is estimated to be $154 million in 2025, $148 million in 2026, $138 million in 2027, $137 million in 2028, $125 million in 2029 and $122 million in 2030.

Amortized intangible assets were comprised of the following by segment:


	June 28, 2025				December 31, 2024
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Products and Systems Integration	$	1,019	$	446	$	1,017	$	409
Software and Services	2,195		1,407		1,936		1,295
	$	3,214	$	1,853	$	2,953	$	1,704

Goodwill

The Company performed its annual assessment of goodwill for impairment as of the last day of the third quarter. The following table displays a roll-forward of the carrying amount of goodwill by segment from January 1, 2025 to June 28, 2025:


	Products and Systems Integration		Software and Services		Total
Balance as of January 1, 2025	$	1,573	$	1,953	$	3,526



Goodwill acquired	—		288		288
Purchase accounting adjustments	—		(3)		(3)
Foreign currency	3		26		29
Balance as of June 28, 2025	$	1,576	$	2,264	$	3,840

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