Motorola Solutions, Inc.
For the period ended Apr 4, 2026. Filed May 7, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 4, 2026 · Filed May 7, 2026
MSI$514.51-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2025-10-30.
0000068505-25-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-04; filed 2026-05-07.
0000068505-26-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 115 current paragraphs.
43 unchanged; 48 reworded; 23 added; 85 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 23 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
We have invested across these three technologies organically and through acquisitions to evolve our land mobile radio ("LMR") focus and expand our ecosystem of safety and security products and services. Across all three technologies, we offer AI-powered capabilities and software solutions, services such as cybersecurity subscription services and managed and support services.
Current report
First Quarter Financial Results
Current report
•Net sales were $2.7 billion in the first quarter of 2026 compared to $2.5 billion in the first quarter of 2025.
Current report
•Operating earnings were $525 million in the first quarter of 2026 compared to $582 million in the first quarter of 2025.
Current report
•Operating cash flow decreased $59 million to $451 million in the first quarter of 2026 compared to $510 million in the first quarter of 2025.
Current report
On February 20, 2026, a U.S. Supreme Court ruling invalidated tariffs imposed under IEEPA; however, the ruling did not address potential refunds. Following the ruling, the Court of International Trade (“CIT”) ordered U.S. Customs and Border Protection (“CBP”) to facilitate refunds for all affected importers. On April 20, 2026, CBP launched Phase 1 of the Consolidated Administration and Processing of Entries (“CAPE”) system to facilitate these refunds. As of April 4, 2026, we had not recognized an asset related to any potential refund given the potential uncertainty in receiving refunds. We plan to continue to evaluate new information as it becomes available, and recognize the refund when recovery is probable.
Current report
•an increase in the Products and Systems Integration segment, inclusive of $181 million of revenue from acquisitions, driven by an increase in Video partially offset by a decrease in MCN; and
Current report
•inclusive of $60 million from favorable currency rates.
Current report
•a 27% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center; and
Current report
•the North America region was flat, inclusive of revenue from acquisitions, driven by an increase in Video and Command Center, partially offset by a decrease in MCN.
Current report
The 1% increase in the Products and Systems Integration segment was driven by the following:
Current report
•$40 million, or 17%, growth in Video, driven by the North America and International regions;
Current report
•inclusive of $30 million from favorable currency rates.
Current report
The 18% increase in the Software and Services segment was driven by the following:
Current report
•inclusive of $30 million from favorable currency rates.
Current report
•a 3.5% decrease in gross margin as a percentage of net sales in the Products and Systems Integration segment, inclusive of acquisitions, primarily driven by unfavorable mix and supply chain costs; partially offset by
Current report
R&D expenditures increased $19 million, or 8%, in the first quarter of 2026 compared to the first quarter of 2025, primarily driven by higher expenditures associated with acquired businesses in both the Products and Systems Integration and Software and Services segments. Products and Systems Integration R&D expenditures increased $10 million, or 7% and Software and Services R&D expenditures increased $9 million, or 10%. R&D expenditures were 9.3% of net sales in the first quarter of 2026 and 9.2% of net sales in the first quarter of 2025.
Current report
Other Charges
Current report
•a $75 million contingent earnout charge related to the Silvus acquisition in the first quarter of 2026 that did not occur in the first quarter of 2025; and
Current report
•a $40 million gain on Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets recognized in the first quarter of 2026 compared to $10 million of gains on Hytera litigation in the first quarter of 2025.
Current report
•a $139 million decrease in the Products and Systems Integration segment, primarily driven by the Silvus contingent earnout charge, unfavorable mix, an increase in intangible amortization expense, higher expenses associated with acquired businesses, and higher supply chain costs, partially offset by a gain on the Hytera litigation, improved operating leverage, and lower expenses related to legal matters, including Hytera-related expenses; partially offset by
Current report
The effective tax rate for the three months ended April 4, 2026 of 17% was lower than the effective tax rate for the three months ended March 29, 2025 of 21%, primarily due to higher excess tax benefits of share-based compensation and an increased deduction for foreign-derived deduction-eligible income (formerly known as foreign-derived intangible income).
Current report
•$200 million repayment of short-term debt driven by the repayment of our 364-day term loan in the first quarter of 2026 which did not occur in the first quarter of 2025.
Removed paragraphs (85)
Previous report
Third Quarter Financial Results
Previous report
•Net sales were $3.0 billion in the third quarter of 2025 compared to $2.8 billion in the third quarter of 2024.
Previous report
•Operating earnings were $770 million in the third quarter of 2025 compared to $711 million in the third quarter of 2024.
Previous report
•Operating cash flow increased $260 million to $1.6 billion in the first nine months of 2025 compared to $1.3 billion in the first nine months of 2024.
Previous report
We continue to see demand for our products and services supported by a multitude of funding sources. In July 2025, the “One Big Beautiful Bill Act” (“OBBB”) was enacted into law by the President of the United States, which provided a number of changes, including funding over the next four years for border security, national security and other opportunities. We expect OBBB to provide an additional source of funding to our federal government customers over the four-year period available through OBBB.
Previous report
As of October 1, 2025 the U.S. government entered into a shutdown, which, as of October 30, 2025, is still ongoing. A prolonged shutdown may impact our ability to ship and fulfill contracts for certain federal government customers, which may negatively impact our results of operations.
Previous report
•an increase in the Products and Systems Integration segment, inclusive of $111 million of revenue from acquisitions, driven by an increase in MCN and Video;
Previous report
•inclusive of $21 million from favorable currency rates.
Previous report
•a 13% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center.
Previous report
The 6% increase in the Products and Systems Integration segment was driven by the following:
Previous report
•$106 million, or 7%, growth in MCN, inclusive of revenue from acquisitions, driven by the International and North America regions;
Previous report
•$7 million, or 2%, growth in Video, driven by the North America and International regions; and
Previous report
•inclusive of $11 million from favorable currency rates.
Previous report
The 11% increase in the Software and Services segment was driven by the following:
Previous report
•$47 million, or 8%, growth in MCN, inclusive of revenue from acquisitions, driven by the International and North America regions;
Previous report
•$27 million, or 13%, growth in Video, driven by the International and North America regions; and
Previous report
•inclusive of $10 million from favorable currency rates.
Previous report
•a 1.3% increase in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, primarily driven by higher sales; partially offset by
Previous report
•a 0.2% decrease in gross margin as a percentage of net sales in the Products and Systems Integration segment, inclusive of acquisitions, primarily driven by higher tariffs.
Previous report
SG&A expenses increased 10% in the third quarter of 2025 compared to the third quarter of 2024 primarily driven by:
Previous report
•a $38 million, or 11%, increase in Products and Systems Integration SG&A expenses primarily due to higher employee incentive costs, including share-based compensation, and higher expenses associated with acquired businesses; and
Previous report
•an $8 million, or 9%, increase in Software and Services SG&A expenses primarily due to higher expenses associated with acquired businesses and higher employee incentive costs.
Previous report
SG&A expenses were 16.1% of net sales in the third quarter of 2025 compared to 15.7% of net sales in the third quarter of 2024.
Previous report
R&D expenditures increased $3 million, or 1%, in the third quarter of 2025 compared to the third quarter of 2024 primarily driven by higher expenses associated with acquired businesses. R&D expenditures were 7.9% of net sales in the third quarter of 2025 and 8.4% of net sales in the third quarter of 2024.
Previous report
•$55 million of acquisition related transaction fees, primarily related to the acquisition of Silvus, in the third quarter of 2025 compared to $4 million of acquisition related transaction fees in the third quarter of 2024;
Previous report
•$12 million of reorganization of business expenses in the third quarter of 2025 compared to $5 million of reorganization of business expenses in the third quarter of 2024; partially offset by
Previous report
•$74 million of gains on the Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets in the third quarter of 2025 that did not occur in the third quarter of 2024.
Previous report
•a $12 million increase in the Products and Systems Integration segment, primarily driven by higher sales, improved operating leverage, and a $74 million gain on the Hytera litigation for amounts recovered through legal proceedings due to the theft of our trade secrets, partially offset by an increase in acquisition related transaction fees related to the Silvus acquisition, higher intangible amortization expense, higher employee incentive costs, including share-based compensation, higher expenses associated with acquired businesses, and higher tariffs.
Previous report
The $1 million decrease in Other, net in the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by:
Previous report
The effective tax rate for the three months ended September 27, 2025 of 22% was higher than the effective tax rate for the three months ended September 28, 2024 of 19%, primarily due to non-deductible transaction costs related to the acquisition of Silvus, favorable U.S. return-to-provision adjustments from implementing a business initiative in 2024, and tax benefits recognized upon settlement of audits with taxing authorities in foreign jurisdictions in 2024, partially offset by higher excess tax benefits of share-based compensation in 2025.
Previous report
Results of Operations—Nine months ended September 27, 2025 compared to Nine months ended September 28, 2024
Previous report
Net Sales
Previous report
The Products and Systems Integration segment's net sales represented 61% of our net sales in the first nine months of 2025 and 63% in the first nine months of 2024. Net sales from the Software and Services segment represented 39% of our net sales in the first nine months of 2025 and 37% in the first nine months of 2024.
Previous report
Net sales increased $496 million, or 6%, in the first nine months of 2025 compared to the first nine months of 2024. The $334 million, or 12%, increase in net sales within the Software and Services segment was driven by an increase of 11% in the North America region and an increase of 12% in the International region. The $162 million, or 3%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 4% in the North America region and an increase of $4 million in the International region. Net sales includes:
Previous report
•an increase in the Software and Services segment, inclusive of $83 million of revenue from acquisitions, driven by an increase in MCN, Video and Command Center;
Previous report
•an increase in the Products and Systems Integration segment, inclusive of $111 million of revenue from acquisitions, driven by an increase in MCN and Video; and
Previous report
•inclusive of $5 million from favorable currency rates.
Previous report
Regional results include:
Previous report
•a 7% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center; and
Previous report
•a 5% increase in the International region, inclusive of revenue from acquisitions, driven by an increase in MCN, Video and Command Center.
Showing the first 40 of 85 passages. Open the source sections for the rest.
Reworded paragraphs (48)
Previous wording
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of Motorola Solutions, Inc. (“Motorola Solutions,” the “Company,” “we,” “our,” or “us”) for the three and nine months ended September 27, 2025 and September 28, 2024, as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2024 (the "Form 10-K").
Current wording
This commentary should be read in conjunction with the condensed consolidated financial statements and related notes thereto of Motorola Solutions, Inc. (“Motorola Solutions,” the “Company,” “we,” “our,” or “us”) for the three months ended April 4, 2026 and March 29, 2025, as well as our consolidated financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Form 10-K").
Previous wording
Statements in this Quarterly Report on Form 10-Q for the quarter ended September 27, 2025 (this “Form 10-Q”) which are not historical in nature are forward-looking statements within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “aims,” “estimates” and similar expressions. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this Form 10-Q. Some of these risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of the Form 10-K, and those described elsewhere in our other SEC filings. Forward-looking statements include, but are not limited to, statements included in: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the impact of changes in the global trade environment, volatility in the global supply chain and our expected ability to mitigate increased costs related thereto; (b) the impact of the "One Big Beautiful Bill Act" on our business and our government customers; (c) the impact of a prolonged U.S. government shutdown to our business; (d) the impact of acquisitions on our business; (e) our plans to assess the impact of changes to tax law on our business; (f) the return of capital to shareholders through dividends and/or repurchasing shares; (g) future payments, charges, and use of accruals associated with our reorganization of business programs and employee separation costs; (h) expected payments of exit costs related to our exit of Emergency Services Network ("ESN") contract with the U.K. Home Office; (i) our ability and cost to repatriate funds; (j) the liquidity of our investments; (k) our ability and cost to access the capital markets; (l) our ability to borrow and the use of proceeds of and amount available under our credit facilities; (m) adequacy of internal resources to generate adequate amount of cash to meet expected working capital, capital expenditure and cash requirements; (n) future cash flows generated from operations, and future uses of such cash; and (o) the impact of the adoption of accounting pronouncements on our financial results; (2) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency risk; and (b) future hedging activity and expectations of the Company; and (3) “Legal Proceedings,” about the ultimate disposition of legal matters and timing. We undertake no obligation to publicl…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Statements in this Quarterly Report on Form 10-Q for the quarter ended April 4, 2026 (this “Form 10-Q”) which are not historical in nature are forward-looking statements within the meaning of applicable federal securities law. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and generally include words such as “believes,” “expects,” “intends,” “aims,” “estimates” and similar expressions. We can give no assurance that any future results or events discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this Form 10-Q. Some of these risks and uncertainties include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of the Form 10-K, and those described elsewhere in our other SEC filings. Forward-looking statements include, but are not limited to, statements under the following headings: (1) “Management's Discussion and Analysis of Financial Condition and Results of Operations,” about: (a) the impact of the U.S. Supreme Court ruling that invalidated tariffs imposed under the International Emergency Economic Powers Act on our business, and our actions in response thereto; (b) the impact of changes in the global trade environment, the dynamic supply chain environment and the memory market on our business, and our actions in response thereto; (c) the impact of acquisitions on our business; (d) our plans to assess the impact of changes to tax law on our business; (e) the return of capital to shareholders through dividends and/or repurchasing shares; (f) future payments, charges, and use of accruals associated with our reorganization of business programs and employee separation costs; (g) our ability to repatriate funds; (h) the liquidity of our investments; (i) our ability to access the capital markets; (j) our use of proceeds from the issuance of notes under our unsecured commercial paper program; (k) adequacy of internal resources to generate adequate amounts of cash to meet expected working capital, capital expenditure and cash requirements; and (l) future cash flows generated from operations, and future uses of cash, investments and debt facilities; and (2) “Quantitative and Qualitative Disclosures about Market Risk,” about: (a) the impact of foreign currency risk; and (b) future hedging activity and expectations of the Company.
Previous wording
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: Mission Critical Networks ("MCN"), Video Security and Access Control ("Video") and Command Center. With the acquisition of Silvus Technologies Holdings Inc. (“Silvus”) in August 2025, the Company will now report net sales from its principal product lines by combining the former Land Mobile Radio Communications and newly acquired Silvus under the new technology name Mission Critical Networks. This name change does not require any financial information to be reclassified from previous periods.
Current wording
The Company manages the business through two segments: “Products and Systems Integration” and “Software and Services.” Within these segments, the Company reports net sales across three principal product lines:
Previous wording
•MCN: Infrastructure, mobile ad-hoc network technology ("MANET"), devices (two-way radio and broadband, including both for public safety and professional and commercial radio (PCR)) and software inclusive of installation and integration, and backed by managed and support services to help assure mission-critical communications availability, security and resiliency.
Current wording
•MCN: Infrastructure, mobile ad-hoc network ("MANET") technology, devices (two-way radio and broadband, including both for public safety and professional and commercial radio ("PCR")), software and artificial intelligence ("AI")-powered capabilities. MCN includes installation and integration, backed by managed and support services, to help assure mission-critical communications availability, security and resiliency;
Previous wording
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, software and artificial intelligence ("AI")-powered analytics that help enable visibility to what's happening and bring attention to what’s important to help inform decisions and actions.
Current wording
•Video: Cameras (fixed, body-worn, in-vehicle), access control, sensors, infrastructure, video management, video monitoring, software and AI-powered analytics that enable visibility of events and focus attention on what's important, to inform faster and more accurate decisions and actions; and
Previous wording
•Command Center: Command center solutions and software applications, including AI-powered analytics, that unify voice, video, and data from public safety agencies, enterprises and the community, enabling a broad informational view of operations and incidents to help accelerate workflows and improve the accuracy and speed of decisions.
Current wording
•Command Center: Command center solutions, software applications and AI-powered capabilities, that unify voice and data from public safety agencies, enterprises and the community, enabling a broad informational view of operations and incidents while helping to accelerate workflows and improve the accuracy, speed and trust of decisions.
Previous wording
•Net earnings attributable to Motorola Solutions, Inc. was $562 million, or $3.33 per diluted common share, in the third quarter of 2025, compared to $562 million, or $3.29 per diluted common share, in the third quarter of 2024.
Current wording
•Net earnings attributable to Motorola Solutions, Inc. was $366 million, or $2.18 per diluted common share, in the first quarter of 2026, compared to $430 million, or $2.53 per diluted common share, in the first quarter of 2025.
Previous wording
•We repurchased $664 million of common stock and paid $546 million in dividends in the first nine months of 2025.
Current wording
•We repurchased $118 million of common stock and paid $201 million in dividends in the first quarter of 2026.
Previous wording
The current global trade environment is complex and evolving. In early 2025, the U.S. initiated a series of trade actions which imposed new tariffs and increased existing tariffs on goods imported from various countries, contributing to a global trade landscape subject to evolving tariffs, import/export regulations, including restrictions around rare earth minerals, trade barriers and trade disputes. As a result, we continue to observe elevated volatility and uncertainty around the global supply chain.
Current wording
Since February 2025, the U.S. has initiated a series of trade actions which imposed new tariffs and increased existing tariffs on goods imported from various countries, including tariffs levied under the International Emergency Economic Powers Act (“IEEPA”), contributing to a global trade landscape subject to evolving tariffs, import/export regulations, including restrictions around rare earth minerals, trade barriers and trade disputes.
Previous wording
We engage with global suppliers across a diverse network of locations around the world. We continue to work with our global supply base to mitigate our exposure to the risks to global reciprocal (and sectoral) tariffs and import/export regulations that have developed, and which may continue to develop, in order to ensure supply continues at levels in order to meet our current customer demand. As a result of the dynamic tariff environment, we have experienced increased costs on materials and components, which we have substantially mitigated during the year and for which we expect to continue to develop mitigation actions going forward.
Current wording
In addition, we are experiencing higher costs for memory in our products which is a result of substantial demand in the market driven by AI. As a result, we continue to observe elevated volatility and uncertainty around the global supply chain. We engage with global suppliers across a diverse network of locations around the world. We continue to work with our global supply base to mitigate our exposure to the risks from global reciprocal (and sectoral) tariffs, rising memory costs, and import/export regulations that have developed, and which may continue to develop, to ensure supply continues at levels necessary to meet our current customer demand. As a result of the dynamic supply chain environment, we have experienced increased costs on materials and components, for which we continue to develop mitigation actions going forward.
Previous wording
The results of operations for the third quarter of 2025 are not necessarily indicative of the operating results to be expected for the full year. Historically, we have experienced higher revenues in the fourth quarter as compared to the rest of the quarters of our fiscal year as a result of the purchasing patterns of our customers.
Current wording
The results of operations for the first quarter of 2026 are not necessarily indicative of the operating results to be expected for the full year. Historically, we have experienced higher revenues in the fourth quarter as compared to the rest of the quarters of our fiscal year as a result of the purchasing patterns of our customers.
Previous wording
The Products and Systems Integration segment’s net sales represented 63% of our net sales in the third quarter of 2025 and 64% in the third quarter of 2024. The Software and Services segment’s net sales represented 37% of our net sales in the third quarter of 2025 and 36% in the third quarter of 2024.
Current wording
The Products and Systems Integration segment’s net sales represented 57% of our net sales in the first quarter of 2026 and 61% in the first quarter of 2025. The Software and Services segment’s net sales represented 43% of our net sales in the first quarter of 2026 and 39% in the first quarter of 2025.
Previous wording
Net sales increased $219 million, or 8%, in the third quarter of 2025 compared to the third quarter of 2024. The $113 million, or 6% increase in net sales within the Products and Systems Integration segment was driven by an increase of 12% in the International region and an increase of 4% in the North America region. The $106 million, or 11%, increase in net sales within the Software and Services segment was driven by an increase of 8% in the North America region and an increase of 16% in the International region. Net sales includes:
Current wording
Net sales increased $186 million, or 7%, in the first quarter of 2026 compared to the first quarter of 2025. The $173 million, or 18%, increase in net sales within the Software and Services segment was driven by an increase of 18% in both the North America and International regions. The $13 million, or 1%, increase in net sales within the Products and Systems Integration segment was driven by an increase of 35% in the International region, partially offset by a decrease of 10% in the North America region. Net sales includes:
Previous wording
•an increase in the Software and Services segment, inclusive of $12 million of revenue from acquisitions, driven by an increase in MCN, Command Center and Video; and
Current wording
•an increase in the Software and Services segment, inclusive of $38 million of revenue from acquisitions, driven by an increase in MCN, Command Center and Video;
Previous wording
•$5 million, or 1% growth in Video, driven by the North America region, partially offset by International region; and
Current wording
•$27 million, or 2%, decrease in MCN, inclusive of revenue from acquisitions, driven by the North America region, partially offset by the International region; and
Previous wording
•$32 million, or 16%, growth in Command Center, inclusive of revenue from acquisitions, driven by the North America and International regions;
Current wording
•$50 million, or 27%, growth in Command Center, inclusive of revenue from acquisitions, driven by the North America and International regions;
Previous wording
•$119 million, or 22% growth in Video, inclusive of revenue from acquisitions, driven by the North America and International regions;
Current wording
•$29 million, or 14%, growth in Video, inclusive of revenue from acquisitions, driven by the North America and International regions; and
Previous wording
Gross margin was 51.6% of net sales in the third quarter of 2025 compared to 51.4% in the third quarter of 2024. The primary drivers of this increase in gross margin as a percentage of net sales were:
Current wording
Gross margin was 50.2% of net sales in the first quarter of 2026 compared to 51.4% in the first quarter of 2025. The primary drivers of this decrease in gross margin as a percentage of net sales were:
Previous wording
•a 1.0% increase in gross margin as a percentage of net sales in the Products and Systems Integration segment, inclusive of acquisitions, primarily driven by higher sales, favorable mix and lower direct material costs, despite higher tariffs; and
Current wording
•a 2.6% increase in gross margin as a percentage of net sales in the Software and Services segment, inclusive of acquisitions, primarily driven by higher sales, favorable mix, and improved operating leverage.
Previous wording
The 3% increase in the Products and Systems Integration segment was driven by the following:
Current wording
SG&A expenses increased 1% in the first quarter of 2026 compared to the first quarter of 2025 primarily driven by a $3 million, or 3%, increase in Software and Services SG&A expenses related to higher expenses associated with acquired businesses. SG&A expenses were 16.2% of net sales in the first quarter of 2026 compared to 17.2% of net sales in the first quarter of 2025.
Previous wording
Other charges increased $13 million in the third quarter of 2025 compared to the third quarter of 2024. The increase was primarily driven by:
Current wording
Other charges increased $97 million in the first quarter of 2026 compared to the first quarter of 2025. The increase was primarily driven by:
Previous wording
•$66 million of intangible amortization expense in the third quarter of 2025 compared to $38 million of intangible amortization expense in the third quarter of 2024; and
Current wording
•$90 million of intangible amortization expense in the first quarter of 2026 compared to $37 million of intangible amortization expense in the first quarter of 2025; partially offset by
Previous wording
Operating earnings increased $59 million, or 8%, in the third quarter of 2025 compared to the third quarter of 2024. The increase in Operating earnings was due to:
Current wording
Operating earnings decreased $57 million, or 10%, in the first quarter of 2026 compared to the first quarter of 2025. The decrease in Operating earnings was due to:
Previous wording
•a $47 million increase in the Software and Services segment, primarily driven by higher sales and improved operating leverage, partially offset by higher expenses associated with acquired businesses and higher employee incentive costs, including share-based compensation; and
Current wording
•a $82 million increase in the Software and Services segment, primarily driven by higher sales, including favorable mix, and improved operating leverage, partially offset by higher expenses associated with acquired businesses.
Previous wording
The $28 million increase in Interest expense, net in the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by higher outstanding debt, partially offset by higher interest income.
Current wording
The $53 million increase in Interest expense, net in the first quarter of 2026 compared to the first quarter of 2025 was primarily driven by higher outstanding debt.
Previous wording
The $619 million increase in Other, net in the first nine months of 2025 compared to the first nine months of 2024 was primarily driven by:
Current wording
The $4 million increase in Other, net in the first quarter of 2026 compared to the first quarter of 2025 was primarily driven by:
Previous wording
•a $4 million gain on foreign currency in the third quarter of 2025 compared to a $26 million loss on foreign currency in the third quarter of 2024; partially offset by
Current wording
•a $25 million gain on foreign currency in the first quarter of 2026 compared to a $20 million loss on foreign currency in the first quarter of 2025; partially offset by
Previous wording
•a $6 million loss on derivatives in the third quarter of 2025 compared to a $22 million gain on derivatives in the third quarter of 2024.
Current wording
•a $27 million loss on derivatives in the first quarter of 2026 compared to a $13 million gain on derivatives in the first quarter of 2025.
Previous wording
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 impact our tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. We have evaluated the effects of these changes on our income tax provision, income tax payable, and deferred tax asset balances, which are reflected in this quarter's results. As of the three months ended September 27, 2025, the 2025 impact of the enacted legislation on our tax position was not material. We will continue to recognize the effects of the legislation in accordance with the effective dates of the applicable provisions, and plan to continue to assess the ongoing impact of this legislation as further guidance is made available.
Current wording
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 impact our tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. Certain provisions of this legislation were effective for the 2025 fiscal year, whereas other provisions became effective starting in 2026. For the three months ended April 4, 2026, the impact of the enacted legislation on our tax position was not material. We plan to continue to assess the ongoing impact of this legislation as further guidance is made available.
Previous wording
During the third quarter of 2025, we recorded net reorganization of business charges of $14 million, consisting of $12 million of charges in Other charges and $2 million of charges in Cost of sales in our 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.
Current wording
During the first quarter of 2026, we recorded net reorganization of business charges of $15 million, consisting of $10 million of charges in Other charges and $5 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations related to employee separation costs.
Previous wording
During the third quarter of 2024, we recorded net reorganization of business charges of $7 million, including $5 million of charges recorded within Other charges and $2 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations. Included in the $7 million were charges of $8 million related to employee separation costs, partially offset by $1 million of reversals for employee separation accruals that are no longer needed.
Current wording
During the first quarter of 2025, we recorded net reorganization of business charges of $17 million, including $12 million of charges recorded within Other charges and $5 million of charges in Cost of sales in our Condensed Consolidated Statements of Operations. Included in the $17 million were charges of $19 million related to employee separation costs, partially offset by $2 million of reversals for employee separation accruals that are no longer needed.
Previous wording
Cash payments for employee severance in connection with the reorganization of business plans were $48 million in the first nine months of 2025 and $27 million in the first nine months of 2024. The reorganization of business accrual at September 27, 2025 was $22 million related to employee separation costs that are expected to be paid primarily within one year.
Current wording
Cash payments for employee severance in connection with the reorganization of business plans were $12 million in the first quarter of 2026 and $14 million in the first quarter of 2025. The reorganization of business accrual at April 4, 2026 was $27 million related to employee separation costs that are expected to be paid primarily within one year.
Previous wording
At September 27, 2025, $645 million of the $894 million cash and cash equivalents balance was held in the U.S. and $249 million was held in other countries.
Current wording
At April 4, 2026, $570 million of the $886 million cash and cash equivalents balance was held in the U.S. and $316 million was held in other countries.
Previous wording
The increase in cash flows provided by operating activities from the first nine months of 2024 to the first nine months of 2025 was driven primarily by higher earnings, net of non-cash charges.
Current wording
The decrease in cash flows provided by operating activities from the first quarter of 2025 to the first quarter of 2026 was driven primarily by increased investments in inventory and higher interest and tax payments in the first quarter of 2026 compared to the first quarter of 2025, partially offset by higher earnings, net of non-cash charges.
Previous wording
The increase in cash flows used for investing activities in the first nine months of 2025 compared to the first nine months of 2024 was primarily due to the $4.4 billion in cash used in the acquisition of Silvus.
Current wording
The decrease in cash flows used for investing activities in the first quarter of 2026 compared to the first quarter of 2025 was primarily due to a $326 million decrease in cash used for acquisitions and investments.
Previous wording
The increase in cash flows provided by financing activities in the first nine months of 2025 compared to the cash flows used for financing activities in the first nine months of 2024 was primarily driven by (see also further discussion in the "Debt," "Share Repurchase Program" and "Dividends" sections below in this Part I, Item 2 of this Form 10-Q):
Current wording
The decrease in cash flows used for financing activities in the first quarter of 2026 compared to the cash flows used for financing activities in the first quarter of 2025 was primarily driven by (see also further discussion in the "Debt," "Share Repurchase Program" and "Dividends" sections below in this Part I, Item 2 of this Form 10-Q):
Previous wording
•$523 million increase in share repurchases in the first nine months of 2025 compared to the first nine months of 2024;
Current wording
•$207 million decrease in share repurchases in the first quarter of 2026 compared to the first quarter of 2025; and
Previous wording
•$22 million increase in cash used for the issuance of common stock primarily driven by an increase in tax withholdings in the first nine months of 2025 compared to the first nine months of 2024.
Current wording
•$84 million decrease in cash used for the issuance of common stock, net of tax, in the first quarter of 2026 compared to the first quarter of 2025; partially offset by
Previous wording
•$56 million increase in the payment of dividends in the first nine months of 2025 compared to the first nine months of 2024; and
Current wording
•$19 million increase in the payment of dividends in the first quarter of 2026 compared to the first quarter of 2025; and
Previous wording
The following table summarizes the proceeds received from sales of accounts receivable and long-term customer financing receivables for the three and nine months ended September 27, 2025 and September 28, 2024:
Current wording
The following table summarizes the proceeds received from sales of long-term customer financing receivables for the three months ended April 4, 2026 and March 29, 2025:
Showing the first 40 of 48 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•$94 million, or 16%, growth in MCN, inclusive of revenue from acquisitions, driven by the North America and International regions;
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•a 6% increase in the North America region, inclusive of revenue from acquisitions, driven by an increase in MCN, Command Center and Video; and
Previous report — wording carried elsewhere
•$76 million, or 13% growth in Command Center, inclusive of revenue from acquisitions, driven by the North America and International regions; and
Previous report — wording carried elsewhere
Selling, General and Administrative ("SG&A") Expenses
Previous report — wording carried elsewhere
Research and Development ("R&D") Expenditures
Previous report — wording carried elsewhere
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 impact our tax position, including tax cut extensions and modifications to the international tax framework and corporate income tax deductions. We have evaluated the effects of these changes on our income tax provision, income tax payable, and deferred tax asset balances, which are reflected in this quarter's results. As of September 27, 2025, the 2025 impact of the enacted legislation on our tax position was not material. We will continue to recognize the effects of the legislation in accordance with the effective dates of the applicable provisions, and plan to continue to assess the ongoing impact of this legislation as further guidance is made available.