Zebra Technologies (ZBRA) Q4 2025 earnings summary

Executive summary

• Fourth quarter results exceeded outlook, with Q4 2025 net sales of $1,475 million, up 10.6% year-over-year, and 2.5% organic net sales growth, driven by strong execution and demand, especially in Asia-Pacific and Latin America.

• Adjusted EBITDA margin was 22.1% in Q4 2025, with non-GAAP diluted EPS up 8.3% to $4.33.

• Full-year 2025 sales grew 8.3% to $5,396 million, with over 6% sales growth and 17% non-GAAP EPS growth, generating $831 million in free cash flow.

• Portfolio expanded through Elo Touch and Photoneo acquisitions, while exiting robotics to focus on higher-growth areas like RFID, machine vision, and AI-powered solutions.

• Nearly $600 million returned to shareholders via repurchases, with an additional $1 billion buyback authorization.

Financial highlights

• Q4 2025 sales reached $1,475 million, up 10.6% year-over-year (2.5% organic), with adjusted EBITDA of $326 million and margin of 22.1%.

• Adjusted gross margin for Q4 2025 was 48.2%, down 50 bps year-over-year due to lower services and software margins.

• Full-year free cash flow was $831 million, with a 102% conversion rate.

• Asia-Pacific sales grew 13%, Latin America 8%, EMEA 4%, while North America declined 1%.

• Q4 2025 net income was $70 million, down 57.1% year-over-year, while non-GAAP net income rose 5.3% to $219 million.

Outlook and guidance

• Q1 2026 sales growth guidance is 11%-15%, with about 10 points from acquisitions and FX.

• Q1 2026 adjusted EBITDA margin expected at 21%-22%; non-GAAP EPS between $4.05-$4.35.

• Full-year 2026 sales growth expected at 9%-13%, with 7 points from acquisitions and FX.

• Full-year 2026 adjusted EBITDA margin expected at ~22%; non-GAAP EPS between $17.70-$18.30; free cash flow at least $900 million.

• Capital expenditures for FY 2026 expected at $85M-$95M; depreciation and amortization guidance at $75M-$85M and $145M-$155M, respectively.