Motorola dominates the public safety communications market with approximately 75% of sales coming from police departments, fire departments, and 911 call centers – it’s roughly ten times larger than its closest rival. The company benefits from sticky customer relationships and ongoing upgrade cycles.
The company also benefits from secular growth trends including increasing public safety spending, AI integration into communications systems, and the ongoing modernization of emergency response infrastructure.
The stock trades at 30.4 times the company’s forward earnings forecast, which seems high until you consider the strength of the company’s wide economic moat built through decades of mission-critical relationships as well as high switching costs.
MOTOROLA SOLUTIONS INC. (New York symbol MSI; www.motorolasolutions.com) makes communications equipment such as two-way radios for police and fire vehicles, as well as high-definition surveillance systems.
The company gets 60% of its revenue from selling hardware, and 40% from software and services. Its biggest single market is the U.S. at 69% of revenue, followed by the U.K. (5%) and Canada (4%). Other countries supplied the remaining 22%.
The company continues to win new contracts. For example, four U.K. fire and rescue services, which together operate 77 fire stations, will now use Motorola’s Control Room Solution software to improve their response times to fires and other emergencies.
Deals like this are part of Motorola’s plan to expand its services operations. That gives it recurring revenue streams and cuts its reliance on selling hardware.
Thanks to partly to acquisitions, Motorola’s revenue rose 45.9%, from $7.41 billion in 2020 to $10.82 billion in 2024. Earnings before unusual items also jumped 76.6%, from $1.34 billion in 2020 to $2.37 billion in 2024. Due to fewer shares outstanding, per-share earnings rose at
a faster rate of 80.0%, from $7.96 to $13.84.
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In addition to acquisitions, Motorola fuels its growth with investments in new products. Its research costs rose 6.9%, to $917 million (or 8.5% of revenue) in 2024 from $858 million (or 8.6% of revenue) in 2023.
In the three months ended June 28. 2025, Motorola’s revenue rose 5.2%, to $2.77 billion from $2.63 billion. Excluding one-time items, earnings rose 7.9%, to $818 million, or $3.57 a share, from $758 million, or $3.24.
The company’s strong balance sheet will let it keep investing in its businesses. It currently holds cash of $3.2 billion, while its long-term debt of $7.7 billion is a low 10% of its market cap.
Motorola expands capabilities with savvy acquisitions
Meanwhile, Motorola tends to fuel its growth with acquisitions. However, it cuts the risk of this strategy by focusing on smaller firms that enhance its technology and market share.
For example, it recently paid an undisclosed sum for Theatro Labs, Inc. Based in Richardson, Texas, this firm makes software that uses artificial intelligence tools to let workers in retail stores use conversational language to assist customers, and check inventory and pricing. The system also makes it easier for workers to discreetly alert management and security teams when they feel unsafe.
Motorola also recently acquired Silvus Technologies, Inc. Based in California, that firm makes specialized communications equipment for military and law enforcement clients. Its products make it easier for users to transmit data in harsh conditions and areas without cellphone towers.
The company paid $4.4 billion. Depending on future performance, it may have to pay an additional $600 million in 2027 and 2028.
Silvus will add $475 million to Motorola’s annual revenue of $11.65 billion. The purchase will also help lift its earnings in 2025 by 8% to $14.96 a share. The stock trades at a high, but still reasonable, 30.4 times that forecast. The $4.36 dividend yields 1.0%.
Recommendation in Wall Street Stock Forecaster: Motorola Solutions Inc. is a buy.
