Zebra Technologies (ZBRA) Citi’s 2026 Global TMT Conference summary

Technology and automation trends

• Physical AI and intelligent automation are seen as multi-year growth drivers, with real-time asset visibility and workflow automation central to value creation.

• Machine vision, RFID, and mobile computing are prioritized technologies, with recent acquisitions like Elo and Photoneo enhancing capabilities.

• AI-enabled devices and software are driving customer upgrades to premium products, embedding advanced features like RFID and optical character recognition.

• Customers are at varying stages of automation adoption, with modular, flexible solutions in high demand for quick ROI.

• The company exited the robotics business to focus on differentiated, high-growth areas.

Customer adoption and market positioning

• Strong demand is observed across retail, e-commerce, and fulfillment, with double-digit growth in these segments.

• AI and automation are helping customers improve efficiency, with solutions tailored for both highly automated and minimally automated environments.

• The company’s broad portfolio allows it to serve customers at all stages of their automation journey, differentiating from competitors.

• Pricing power is increasing as customers seek advanced AI features, making premium devices more attractive.

• Large refresh cycles, especially in T&L, present significant growth and margin opportunities over the next few years.

Capital deployment and financial strategy

• Capital deployment balances organic R&D (over 9% of sales), targeted M&A, and shareholder returns, with recent focus on buybacks due to stock price dislocation.

• Recent acquisitions (Elo and Photoneo) have added scale and unique capabilities, supporting growth in machine vision and self-service solutions.

• The company maintains a capital-light model, targeting mid-20s EBITDA margins long-term, with annual EBITDA rate expansion of 0.5 points.

• Margin expansion is driven by scaling infrastructure and shifting to higher-margin solutions like machine vision, software, and AI.

• Pricing actions on memory have been proactive, with early bidding and direct supplier relationships mitigating cost headwinds.