[Management View]
Motorola Solutions reported record fiscal Q2 2025 revenue of $2.93 billion, driven by a 15% increase in software and services revenue. The company highlighted major new multiyear contracts, particularly in LMR, and the integration of Silvis, which is expected to be accretive to EPS by at least $0.20 in 2026. Strategic guidance was raised across revenue, non-GAAP EPS, and operating cash flow for fiscal 2025.

[Outlook]
The company raised its full-year 2025 outlook, now forecasting $11.65 billion in revenue (7.7% growth), non-GAAP EPS of $14.88-$14.98, and operating cash flow of $2.75 billion (up 15%). The integration of Silvis is expected to contribute $185 million in revenue in the 2025 stub period and at least $0.20 accretion to EPS in 2026.

[Financial Performance]
- Revenue: $2.93 billion, up 5% YoY
- Non-GAAP operating margin: 29.6%, up 80 basis points
- GAAP EPS: $3.04; Non-GAAP EPS: $3.57, up 10% YoY
- Operating cash flow: $272 million, up $92 million YoY
- Backlog: $14.1 billion, up $150 million YoY

[Q&A Highlights]
Question 1: Greg, can you talk about the growth in product orders and the momentum towards the year-end backlog target, especially with Silvis now included?
Answer: We feel very good about the mid-threes product backlog target, even better than in May. The strong Q2 orders were driven by LMR device refresh, LMR infrastructure, and fixed video orders. Silvis was not included in the initial target, but it adds to our confidence.

Question 2: How do you view the opportunities from the recent bill passed in the U.S. and similar programs in Europe, especially with Silvis under your belt?
Answer: We expect Silvis to grow about 20% in 2026. The bill provides significant funding for defense, border security, and technology refreshes, which benefits us. We anticipate some funding to kick in early Q4 this year.

Question 3: Can you elaborate on why Silvis was acquired and its potential impact on public safety and defense tech?
Answer: Silvis is a market leader in mobile ad hoc networks, providing high-speed, infrastructure-less communications. It complements our LMR and video businesses and offers opportunities in defense, border security, and public safety. We see it as both a new market and complementary to our existing offerings.

Question 4: What is the potential impact of the new base station on growth, and is there pent-up demand?
Answer: The new D series base station offers better capacity, coverage, and energy efficiency. We have already secured significant wins and expect a multi-year growth horizon. It also drives new service opportunities.

Question 5: How does the backlog composition compare to revenue disaggregation?
Answer: Most of the backlog within SNS comes from LMR due to long-term contracts. The size of LMR includes both products and services, making it a significant contributor to the backlog.

Question 6: Can you discuss the early momentum of SCX and the video business growth?
Answer: SCX orders are outpacing expectations, and it is tied to APEX NEXT, driving more applications and recurring revenue. The video business growth is driven by the cloud platform Alta, with strong international performance.

Question 7: How is the software transition impacting revenue growth, and what is the update on APEX NEXT adoption?
Answer: Cloud adoption within video is on path, with orders greater than sales. APEX NEXT saw double-digit order growth in Q2, with a high attachment rate for application services.

Question 8: What were the tariff headwinds in the quarter, and what is the durability of the operating margin levers?
Answer: Tariff impact is estimated at $80 million for the year, with most in the second half. Operating margin expansion was driven by higher SNS sales and improved leverage.

Question 9: How do you view the unmanned systems market and Silvis's role in it?
Answer: The TAM for unmanned systems is about $3 billion and growing. Silvis provides resilient communication for drones and integrates with our drone strategy, including detection and forensics.

Question 10: What is the sales motion for Silvis, and how are you integrating it with your existing teams?
Answer: Silvis had a direct sales motion focused in the U.S. We are expanding resources globally and leveraging our Government Affairs Arm for lobbying. We aim to integrate Silvis into our strategic sales efforts.

[Sentiment Analysis]
The tone of the analysts was positive, with a focus on the strategic acquisition of Silvis and its potential impact. Management was confident and optimistic about the company's growth prospects and the integration of Silvis.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-------------------------|---------------|---------------|-------------|
| Revenue | $2.93 billion | $2.79 billion | +5% |
| Non-GAAP Operating Margin| 29.6% | 28.8% | +80 bps |
| GAAP EPS | $3.04 | $2.60 | +17% |
| Non-GAAP EPS | $3.57 | $3.24 | +10% |
| Operating Cash Flow | $272 million | $180 million | +51% |
| Backlog | $14.1 billion | $13.95 billion| +1% |

[Risks and Concerns]
- Tariff impact estimated at $80 million for the year, with most in the second half.
- Integration risks associated with the Silvis acquisition.
- Potential delays in funding from recent U.S. and European programs.

[Final Takeaway]
Motorola Solutions delivered a strong Q2 2025 performance, with record revenue and EPS driven by robust order activity and high demand for software and services. The strategic acquisition of Silvis enhances the company's capabilities in mission-critical networks and unmanned systems, providing new growth opportunities. Management's confidence is reflected in the raised full-year guidance, despite potential tariff headwinds and integration challenges. Investors should monitor the integration of Silvis and the impact of new funding programs on future growth.