Zebra Technologies (ZBRA) Q1 2026 earnings summary

Executive summary

• Achieved strong Q1 2026 results with net sales of $1,495 million, up 14.3% year-over-year, and broad-based growth across all segments and regions, driven by robust demand and successful integration of acquisitions.

• Non-GAAP diluted EPS grew 18.2% to $4.75, with net income of $135 million and diluted EPS of $2.72.

• Increased full-year 2026 outlook based on continued business momentum, operational execution, and market leadership in automation and intelligent operations.

• Integrated portfolio of hardware, software, and services, with strategic focus on profitable growth, innovation, and financial strength.

• Completed sale of robotics automation business for $20 million, resulting in a $5 million net gain.

Financial highlights

• Adjusted EBITDA grew 18.8% to $347 million (23.2% margin), with adjusted gross margin up 80 bps to 50.4%.

• Gross margin improved to 49.6%, with operating income up 10.3% to $215 million.

• Free cash flow for Q1 was $163 million, up $5 million year-over-year.

• $300 million in share repurchases in Q1, with an additional $200 million in Q2 to date.

• Net debt to adjusted EBITDA ratio stood at 2.1x; total debt was $2.66 billion.

Outlook and guidance

• Full-year 2026 sales growth forecasted at 10%–14%, with adjusted EBITDA margin around 22% and non-GAAP EPS of $18.30–$18.70.

• Q2 2026 sales growth expected between 14% and 17%, with adjusted EBITDA margin slightly above 21% and non-GAAP EPS of $4.20–$4.50.

• Full-year free cash flow anticipated to exceed $900 million, with a conversion rate of about 100%.

• Management expects to complete restructuring actions by H2 2026, targeting $35 million in annualized pre-tax cost savings.

• No recoveries from invalidated IEEPA tariffs recognized yet; $75 million in potential refunds remain uncertain.