Zebra Technologies (ZBRA) investor relations material

Market trends and customer insights

• Customers across all segments are prioritizing investments in technology to drive efficiency, productivity, and asset visibility, with a focus on intelligent operations and enhanced customer experiences.

• Momentum is strong entering 2026, with 6% organic growth and 17% EPS growth in 2025, and continued investment from customers despite macro uncertainties.

• Manufacturing returned to growth in Q4, with high single-digit increases, and RFID and machine vision are seeing continued momentum.

• Pricing actions contributed about 0.5 points to growth, with further price increases recently announced but not yet included in guidance.

• End markets like healthcare, manufacturing, retail, and e-commerce are expected to contribute to growth, with manufacturing showing signs of recovery and transportation/logistics building a pipeline for multi-year deployments.

Technology and innovation strategy

• AI is being integrated across the portfolio, enabling asset visibility, workflow automation, and frontline worker productivity through enablers, blueprints, and companion suite offerings.

• AI-driven solutions are tailored to customer needs, such as proof of delivery automation in logistics and customized retail applications.

• The company leverages its large install base and customer relationships to maintain a competitive edge as AI adoption accelerates.

• There is significant opportunity in automating and digitizing warehouses and retail, as most remain only partially automated and many frontline workers are not yet digitally connected.

• Portfolio breadth, including rugged mobile devices and wearables, supports a unified software experience across roles and devices.

Financial performance and margin management

• Operating leverage is supported by a variable cost structure, common ERP, and a unified distribution network, with ongoing productivity initiatives.

• Exiting the robotics business will reduce R&D expenses by $20 million annually, lowering R&D as a percent of revenue to 9%-9.5%.

• AI tools are being used internally to drive software development productivity and efficiency.

• Investments in RFID, machine vision, and AI are prioritized within the current R&D envelope, with RFID adoption accelerating due to improved economics and ecosystem collaboration.

• Memory pricing is a headwind, but supply chain actions and pricing increases are expected to fully mitigate the impact by year-end.