Motorola Solutions, Inc.

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 nine months ended October 3, 2026 and September 27, 2025, consistent with the information reviewed by the Company's chief operating decision maker for evaluating the financial performance of the Company's reportable segments:

Timing of Revenue Recognition

The Company recognizes revenue in a pattern that reflects the transfer of control of promised goods or services to customers in the amount of consideration to which the Company expects to be entitled in exchange for goods or services.

For the Products and Systems Integration segment, revenue was recognized at a point in time for 79% and 71% of net sales for the three months ended October 3, 2026 and September 27, 2025, respectively. For the nine months ended October 3, 2026 and September 27, 2025, revenue was recognized at a point in time for 77% and 73% of net sales, respectively. For all periods presented, the remaining segment net sales were recognized over time.

For the Software and Services segment, revenue was recognized over time for 80% and 82% of net sales for each of the three and nine months ended October 3, 2026 and September 27, 2025, respectively. For all periods presented, the remaining segment net sales were recognized at a point in time.

Remaining Performance Obligations

Remaining performance obligations represent the revenue that is expected to be recognized in future periods related to performance obligations that are unsatisfied, or partially unsatisfied, as of the end of a period. Remaining performance obligations are equal to disclosed backlog, except within our Software and Services contracts where multi-year contract terms may be limited by the customer's ability to terminate for convenience. Where termination for convenience exists in the Company's service contracts, its disclosure of the remaining performance obligations that are unsatisfied assumes the contract term is limited until renewal. The transaction value associated with remaining performance obligations which were not yet satisfied as of October 3, 2026 was $10.0 billion, of which $4.4 billion is expected to be recognized in the next twelve months. The remaining amounts will generally be satisfied over time as systems are implemented and services are performed.

Contract Balances

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 is less than a year.

Revenue recognized during the three months ended October 3, 2026 which was previously included in Contract liabilities as of July 4, 2026 was $708 million, compared to $637 million of revenue recognized during the three months ended September 27, 2025 which was previously included in Contract liabilities as of June 28, 2025. Revenue recognized during the nine months ended October 3, 2026 which was previously included in Contract liabilities as of December 31, 2025 was $1.5 billion, compared to $1.2 billion recognized during the nine months ended September 27, 2025 which was previously included in Contract liabilities as of December 31, 2024. Revenue of $13 million was reversed during the three months ended October 3, 2026 related to performance obligations satisfied, or partially satisfied, in previous periods, compared to $7 million recognized for the three months ended September 27, 2025, primarily driven by changes in the estimates of progress on system contracts. Revenue of $15 million was reversed during the nine months ended October 3, 2026 related to performance obligations satisfied, or partially satisfied, in previous periods, primarily driven by changes in the estimates of progress on system contracts, compared to $7 million reversed for the nine months ended September 27, 2025.

There wereno material expected credit losses recorded on contract assets during each of the three and nine months ended October 3, 2026 and September 27, 2025.

Contract Cost Balances

Contract cost assets include incremental costs to obtain a contract, primarily related to the Company's sales incentive plans, and certain costs to fulfill contracts. Contract cost assets are amortized into expense over a period that follows the passage of control to the customer over time. Incremental costs to obtain a contract with the Company's sales incentive plans are accounted for under a portfolio approach, with amortization ranging fromone toseven years to approximate the recognition of revenues over time. Where incremental costs to obtain a contract will be recognized in one year or less, the Company applies a practical expedient around expensing amounts as incurred. Amortization of contract cost assets was $14 million and $41 million for the three and nine months ended October 3, 2026, respectively, and $13 million and $39 million for the three and nine months ended September 27, 2025, respectively.