Jason J. Winkler
Executive Vice President and Chief Financial Officer at Motorola Solutions
Thank you, Greg. Revenue for the quarter grew 9% and was above our guidance with growth in both segments, both regions and all three technologies. Acquisitions added $36 million during the quarter, while FX headwinds were $4 million. GAAP operating earnings were $711 million or 25.5% of sales, up from 25% in the year ago quarter. Non-GAAP operating earnings were $830 million, up 12% from the year ago quarter and non-GAAP operating margin was 29.7%, up 70 basis points, driven by higher sales, favorable mix and lower direct material costs, partially offset by the Airwave charge control, higher expenses related to investments in video and higher employee incentives. GAAP earnings per share was $3.29, up from $2.70 in the year ago quarter. Non-GAAP EPS was $3.74, up 17% from $3.19 last year. The growth in EPS was driven by higher sales, favorable mix and a lower effective tax rate. opex in Q3 was $617 million, up $66 million versus last year, primarily due to continued investments in video and higher employee incentives. Turning to our cash flow. Q3 operating cash flow was $759 million, up $45 million versus last year, and free cash flow was $702 million, up $53 million. The increase in year-over-year cash flow was primarily driven by higher earnings. For the full year, we are again raising our operating cash flow guide. We now expect full year operating cash flow of approximately $2.3 billion, up from our previous guide of $2.25 billion. Capital allocation in Q3 included $164 million in cash dividends, $31 million in share repurchases and $57 million in capex. Additionally, we closed and funded 2 acquisitions that we announced on our previous earnings call for $223 million, settled $313 million of 4% senior notes that were due within the quarter, and subsequent to quarter end, we acquired 3TC, an international provider of command center software solutions for $22 million. Moving to our segment results. In the Products and SI segment, sales were up 11% versus last year, driven primarily by growth in LMR. Revenue from acquisitions in the quarter was $11 million, while FX headwinds were $1 million.
Operating earnings were $522 million or 29.3% of sales, up from 26.1% in the prior year, driven by higher sales, favorable mix and lower direct material costs. Some notable Q3 wins and achievements in this segment include an $88 million P25 system and device order for a customer in North Africa, a $31 million P25 system for a US state local customer, a $31 million P25 system for a county in Wisconsin, a $25 million P25 system expansion order for Tennessee's statewide network, a $23 million P25 device order for a US federal customer and a $4 million fixed video order or a US federal customer. In Software and Services revenue was up 7% compared to last year. And when excluding the UK home office revenue grew 13% with growth in all three technologies. Revenue from acquisitions was $25 million in the quarter and FX headwinds were $3 million. Operating earnings in this segment were $308 million or 30.6% of sales, down from 34% last year due to the impact of the Airwave charge control. Some notable Q3 highlights in the segment of S&S include a $30 million command center order for the state of Utah, an $18 million mobile video for Sao Paulo State Government in Brazil and a $24 million command center order for Maricopa County Sheriff's Office, which is a significant win, highlighting the demand for our new recurring license model. The solution purchase included our CAD and Records platform as well as numerous cloud-connected capabilities, including the Rave suite. We also were awarded 3 large LMR contract renewals during the quarter, $191 million from the US Navy, over $100 million for South Carolina statewide network and $84 million for the federal law enforcement agency. Less than $30 million of these $375 million of contracts is in our Q3 ending backlog with the remainder to be recorded ratably over the term of the contracts. Looking at regional results.
Next, North America Q3 revenue was $2 billion, up 13% on growth in all three technologies. International Q3 revenue was $783 million, up 1% versus last year, driven by growth in all three technologies offset by the UK home office revenue reduction. Excluding the UK. Home Office, our international revenue grew high single digits. Moving to our backlog. Ending backlog for Q3 was $14.1 billion, down $178 million or 1% versus last year due to strong LMR shipments and revenue recognition for the UK Home Office, partially offset by multiyear software and service agreements and favorable FX. Sequentially, backlog was up $135 million or 1%, driven by strong growth in multiyear service and software contracts in North America and favorable FX, partially offset by strong LMR shipments and revenue recognition for the UK Home Office. In the Products and SI segment, backlog decreased $712 million versus last year and $151 million sequentially, driven by strong LMR shipments. In Software and Services backlog increased $534 million compared to last year and $286 million sequentially, driven by strong demand for multiyear software and services contracts, favorable FX, partially offset by revenue recognition for the UK Home Office. Turning next to our outlook. For the full year, we now expect revenue growth of 8.25%, up from our prior guidance of approximately 8% and we expect non-GAAP earnings per share between $13.63 and $13.68 per share, up from our prior guidance of $13.22 per share to $13.30 per share. This full year outlook assumes a weighted average diluted share count of approximately 171 million shares and an effective tax rate of approximately 22.5%.
Additionally, we now expect full year opex of approximately $2.4 billion, driven by higher employee incentives aligned to our performance, increased legal spend inclusive of the CMA appeal process and acquisitions. And finally, before turning the call back to Greg, I would like to share a couple of insights on our segments. The strong demand we're seeing for our technologies and our performance is reflected in both of our segments. In Products and SI, the improved supply chain environment has helped us expand margins while normalizing supplier lead times have enabled us to improve our customer delivery times. And in S&S, we've grown double digits year-to-date, excluding the impact of the UK Home Office, which began in August of last year. In LMR, our customers continue to choose us as a trusted partner to invest in their networks through long-term multiyear agreements. And in Video and Command Center, cloud solutions continue to grow at a faster pace than on-prem and the investments we've made in the portfolio position us well for this to continue. Finally, our strong cash generation liquidity profile, together with a net debt to EBITDA ratio of 1.4, gives us significant flexibility in our capital allocation strategy.
I'll now turn the call back over to Greg.