Zebra Technologies (ZBRA) investor relations material

Executive summary

• Record Q3 sales of $1.614B, up 22.3% YoY with 11.3% organic growth; broad-based demand, Elo Touch and improved memory supply supported results.

• FY2026 sales growth outlook increased to ~17%; investment in automation, frontline devices and AI supports expectations for 2027 growth at the high end of the long-term range.

Financial highlights

• Non-GAAP diluted EPS was $4.95, up 27.6% YoY; GAAP diluted EPS was $3.43 versus $1.97, and net income was $164M versus $101M.

• Adjusted EBITDA rose 22.5% to $349M; adjusted EBITDA margin was flat YoY at 21.6%.

• GAAP operating income increased 29.5% to $237M; operating expenses were $501M versus $451M, partly reflecting acquired-business costs and intangible amortization.

• GAAP gross profit was $738M and gross margin was 45.7%, down 230 bps; adjusted gross margin was 46.0%, down 220 bps, primarily from memory costs and mix, partly offset by favorable FX.

Outlook and guidance

• Q4 sales growth guidance is 10%–14%, including ~150 bps from favorable FX; adjusted EBITDA margin is expected at ~22%, with non-GAAP diluted EPS of $5.00–$5.40.

• FY2026 sales growth is expected at ~17%, including ~8 points from acquisitions and FX; non-GAAP diluted EPS guidance is $21.20 and adjusted EBITDA margin guidance is ~23.5%.

• FY2026 free cash flow is expected to be at least $1B; memory-cost headwinds of ~$145M are expected to be fully mitigated through pricing, restructuring savings, volume leverage and FX.

• 2027 growth is expected at the high end of the long-term range, with Q4 profitability as a baseline; detailed 2027 financial guidance has not been set.

• FY2026 capex guidance is $75M–$80M; non-GAAP tax rate guidance is ~19%.