Zebra Technologies Q3 sales rise 22.3% to $1.61B
Fourth-quarter sales growth is expected at 10% to 14%, while full-year free cash flow is expected to be at least $1 billion.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Zebra Technologies Corporation reported third-quarter 2026 net sales of $1.614 billion, up 22.3% year over year, and net income of $164 million, up 62.4%. Diluted earnings per share were $3.43 versus $1.97. Non-GAAP diluted EPS was $4.95, up 27.6%, while adjusted EBITDA was $349 million, up 22.5%, with its margin unchanged at 21.6%.
Gross margin declined to 45.7% from 48.0%; Zebra attributed this primarily to increased memory component costs and business mix, partly offset by favorable foreign currency. As of October 3, 2026, cash and cash equivalents were $182 million and total debt was $2.578 billion. For the first nine months of 2026, operating cash flow was $711 million, free cash flow was $661 million, and share repurchases were $643 million.
Zebra raised its full-year outlook. For the fourth quarter, it expects sales growth of 10% to 14% versus the prior year, adjusted EBITDA margin of approximately 22%, and non-GAAP diluted EPS of $5.00 to $5.40. Full-year free cash flow is expected to be at least $1 billion.
3 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter net sales rose 22.3% to $1.614 billion.
- Moderate pointThird-quarter net income increased 62.4% to $164 million.
- Moderate pointAdjusted EBITDA increased 22.5% to $349 million.
Negative
- None.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Net sales: $1.614 billion
Net income: $164 million
Gross margin: 45.7%
+5 more
8 metrics
Net sales
$1.614 billion
Third quarter 2026; up 22.3% year over year
Net income
$164 million
Third quarter 2026; up 62.4% year over year
Gross margin
45.7%
Third quarter 2026; 48.0% in the prior-year quarter, down 230 basis points
Diluted earnings per share
$3.43
Third quarter 2026; $1.97 in the prior-year quarter
Adjusted EBITDA
$349 million
Third quarter 2026; up 22.5% year over year
Fourth-quarter sales growth outlook
10% to 14%
Expected compared with the prior year
Fourth-quarter non-GAAP diluted EPS outlook
$5.00 to $5.40
Fourth-quarter 2026 outlook
Full-year free cash flow outlook
At least $1 billion
Full-year 2026 outlook
Key Terms
Adjusted EBITDA, organic net sales growth, free cash flow, adjusted effective tax rate
4 terms
Adjusted EBITDA financial
"Adjusted EBITDA increased year-over-year to $349 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
organic net sales growth financial
"Consolidated organic net sales increased 11.3% year-over-year"
Organic net sales growth measures how much a company’s core revenue rose from its existing operations, excluding effects from buying or selling businesses and from changes in currency values. Investors use it to see whether customers are actually buying more or paying higher prices — like checking growth from the same orchard year-to-year rather than counting fruit from newly added orchards — which helps assess true demand and underlying business health.
free cash flow financial
"Free Cash Flow for the full year is expected to be at least $1 billion"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
adjusted effective tax rate financial
"assumes an adjusted effective tax rate of approximately 19%"
The adjusted effective tax rate is the percentage of a company’s pre-tax income that it would normally pay in taxes after removing one-time or unusual items, giving a clearer view of its ongoing tax burden. Like clearing away exceptional expenses to see your regular monthly bill, this adjusted rate helps investors compare companies, forecast future profits and cash flow, and value a business without one-off swings distorting the picture.
Earnings Snapshot
Net sales: $1.614 billion · Guidance included
Third quarter 2026 ended October 3, 2026
Net sales
$1.614 billion
Up 22.3% year over year
Net income
$164 million
Up 62.4% year over year
Diluted earnings per share
$3.43
Up 74.1% year over year
Non-GAAP diluted earnings per share
$4.95
Up 27.6% year over year
Adjusted EBITDA
$349 million
Up 22.5% year over year
Gross margin
45.7%
Down 230 basis points year over year
Guidance
For the fourth quarter, sales growth is expected to be 10% to 14% versus the prior year, including approximately 150 basis points of favorable foreign-currency impact; adjusted EBITDA margin is expected to be approximately 22%; non-GAAP diluted EPS is expected to be $5.00 to $5.40, assuming an adjusted effective tax rate of approximately 19%. Full-year free cash flow is expected to be at least $1 billion.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were ZBRA's Q3 2026 sales and earnings?
Zebra reported third-quarter net sales of $1.614 billion, up 22.3% year over year, and net income of $164 million, up 62.4%. Diluted EPS was $3.43, compared with $1.97 a year earlier.
What is ZBRA's Q4 2026 outlook?
Zebra expects fourth-quarter sales growth of 10% to 14% compared with the prior year, including approximately 150 basis points of favorable foreign-currency impact. It expects adjusted EBITDA margin of approximately 22% and non-GAAP diluted EPS of $5.00 to $5.40, assuming an adjusted effective tax rate of approximately 19%.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 3, 2026
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code: 847 -634-6700
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Conditions. | |||||||||||||
The information contained in this Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On November 3, 2026 , we announced our results of operations and financial position as of and for the third quarter ended October 3, 2026. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. | |||||||||||||
(d) Exhibits.
| Exhibit Number | Description of Exhibits | ||||
99.1 | Registrant’s Press Release dated | ||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ZEBRA TECHNOLOGIES CORPORATION | ||||||||||||||||||||
| Date: | November 3, 2026 | By: | /s/ Cristen Kogl | |||||||||||||||||
| Cristen Kogl | ||||||||||||||||||||
Chief Legal Officer, General Counsel & Corporate Secretary | ||||||||||||||||||||
EXHIBIT INDEX
| Exhibit Number | Description of Exhibits | ||||
| 99.1 | Registrant’s Press Release dated November 3, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL) | ||||
Exhibit 99.1
 | Zebra Technologies Corporation | ||||
3 Overlook Point Lincolnshire, IL 60069 USA +1 847 634 6700 www.zebra.com | |||||
Zebra Technologies Announces Third Quarter 2026 Results
Strong growth across segments and regions reflects customer investment in automation and productivity
Raises full year outlook
Lincolnshire, Ill., November 3, 2026 — Zebra Technologies Corporation (NASDAQ: ZBRA), a global leader in digitizing and automating workflows to deliver intelligent operations, today announced results for the third quarter ended October 3, 2026.
Third-Quarter Financial Highlights
•Net sales of $1,614 million; year-over-year increase of 22.3%
•Net income of $164 million and net income per diluted share of $3.43
•Non-GAAP diluted EPS increased year-over-year to $4.95
•Adjusted EBITDA increased year-over-year to $349 million
•Share repurchases of $75 million
“We delivered another record quarter underpinned by strong execution and broad-based demand trends with Elo Touch contributing to our double-digit growth as customers prioritize automating their frontline operations. Our efforts to strengthen memory supply, implement pricing actions and capture operating leverage enabled us to support our growth while maintaining adjusted EBITDA margin year-over-year," said Bill Burns, Chief Executive Officer of Zebra Technologies. "These results reinforce our confidence in the durability of demand and the strength of our business model as we execute on our strategy to drive profitable growth."
"We are putting our strong cash generation and balance sheet to work, investing in growth while returning capital to shareholders," said Nathan Winters, Chief Financial Officer of Zebra Technologies. "We repurchased more than $640 million of shares through the first nine months of the year, reflecting our confidence in Zebra's long-term opportunity and our commitment to disciplined capital allocation."
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| $ in millions, except per share amounts | 3Q26 | 3Q25 | Change | ||||||||
| Select reported measures: | |||||||||||
| Net sales | $ | 1,614 | $ | 1,320 | 22.3 | % | |||||
| Gross profit | 738 | 634 | 16.4 | % | |||||||
| Gross margin | 45.7 | % | 48.0 | % | (230) bps | ||||||
| Net income | 164 | 101 | 62.4 | % | |||||||
| Net income margin | 10.2 | % | 7.7 | % | 250 bps | ||||||
| Net income per diluted share | $ | 3.43 | $ | 1.97 | 74.1 | % | |||||
| Select Non-GAAP measures: | |||||||||||
| Adjusted net sales | $ | 1,614 | $ | 1,320 | 22.3 | % | |||||
| Organic net sales growth | 11.3 | % | |||||||||
| Adjusted gross profit | 742 | 636 | 16.7 | % | |||||||
| Adjusted gross margin | 46.0 | % | 48.2 | % | (220) bps | ||||||
| Adjusted EBITDA | 349 | 285 | 22.5 | % | |||||||
| Adjusted EBITDA margin | 21.6 | % | 21.6 | % | 0 bps | ||||||
| Non-GAAP net income | $ | 237 | $ | 198 | 19.7 | % | |||||
| Non-GAAP earnings per diluted share | $ | 4.95 | $ | 3.88 | 27.6 | % | |||||
Third Quarter 2026 Performance
Net sales were $1,614 million compared to $1,320 million in the prior year. Net sales in the Connected Frontline ("CF") segment were $949 million compared to $705 million in the prior year. Asset Visibility & Automation ("AVA") segment net sales were $665 million compared to $615 million in the prior year. Consolidated organic net sales increased 11.3% year-over-year, with a 15.0% increase in the CF segment and a 7.0% increase in the AVA segment.
Gross profit was $738 million compared to $634 million in the prior year. Gross margin decreased to 45.7% compared to 48.0% in the prior year primarily due to increased memory component costs and business mix partially offset by favorable foreign currency. Adjusted gross margin was 46.0% compared to 48.2% in the prior year.
Operating expenses increased to $501 million from $451 million in the prior year primarily due to expenses associated with acquired businesses including amortization of intangible assets. Adjusted operating expenses increased to $413 million from $368 million in the prior year.
Net income was $164 million, or $3.43 per diluted share, compared to net income of $101 million, or $1.97 per diluted share, in the prior year. Non-GAAP net income increased to $237 million or $4.95 per diluted share, compared to $198 million, or $3.88 per diluted share for the prior year.
Adjusted EBITDA increased to $349 million, or 21.6% of adjusted net sales, compared to $285 million, or 21.6% of adjusted net sales in the prior year.
Balance Sheet and Cash Flow
As of October 3, 2026, the Company had cash and cash equivalents of $182 million and total debt of $2,578 million.
For the first nine months of 2026, net cash provided by operating activities was $711 million and the Company invested $50 million in capital expenditures, resulting in free cash flow of $661 million. The Company also made share repurchases of $643 million.
Outlook
Mr. Burns added, "We remain confident in the growth drivers supporting our business, and our ability to capture the opportunity ahead. We are driving operating productivity as we scale to meet the strong demand we are seeing for
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our solutions. Together, these efforts support our increased full-year outlook and position us well for sustainable profitable growth as we continue to benefit from trends in automation and Physical AI."
The Company expects fourth quarter sales growth between 10% and 14% compared to the prior year. This expectation includes approximately 150 basis points favorable impact from foreign currency.
Adjusted EBITDA margin for the fourth quarter is expected to be approximately 22%. Non-GAAP diluted earnings per share are expected to be in the range of $5.00 to $5.40. This assumes an adjusted effective tax rate of approximately 19%.
Free Cash Flow for the full year is expected to be at least $1 billion.
The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of the most directly comparable forward-looking GAAP financial measure as discussed under the "Forward-Looking Statements" caption below. This would include items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
Conference Call Notification
Investors are invited to listen to a live webcast of Zebra’s conference call regarding the Company’s financial results. The conference call will be held today at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). To view the webcast, visit the investor relations section of the Company’s website at investors.zebra.com. The earnings presentation is available on the Company's website at the following link: Zebra's 3Q 2026 Earnings Presentation.
Who is Zebra Technologies?
Zebra (NASDAQ: ZBRA) provides the foundation for intelligent operations with an award-winning portfolio of connected frontline, asset visibility and automation solutions which empower our customers to deploy AI on the frontline. Organizations globally across retail, manufacturing, transportation, logistics, healthcare, and other industries rely on us to deliver outcomes today while driving innovation for what’s next. Together with our partners, we create new ways of working that improve productivity and empower organizations to be better every day. Learn more at www.zebra.com.
Follow Zebra on our Blog, LinkedIn, Facebook, X, Instagram and YouTube.
Forward-Looking Statements
This press release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements regarding the company’s outlook. Actual results may differ from those expressed or implied in the company’s forward-looking statements. These statements represent estimates only as of the date they were made. Zebra undertakes no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this release.
These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include customer acceptance of Zebra’s offerings and competitors' offerings, and the potential effects of emerging technologies and changes in customer requirements. The effect of global market conditions, and the availability of credit and capital markets volatility may have adverse effects on Zebra, its suppliers and its customers. In addition, natural disasters, man-made disasters, public health issues (including pandemics), and cybersecurity incidents may have negative effects on Zebra's business and results of operations. Zebra's ability to purchase sufficient materials, parts, and components, and ability to provide services, software and products to meet customer demand could negatively impact Zebra's results of operations and customer relationships. Profits and profitability will be affected by Zebra’s ability to control manufacturing and operating costs. Because of its debt, interest rates and financial market conditions may also have an adverse impact on results.
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Foreign exchange rates, customs duties and trade policies may have an adverse effect on financial results because of the global nature of Zebra's business. The impacts of changes in foreign and domestic governmental policies, regulations, or laws, as well as the outcome of litigation or tax matters in which Zebra may be involved are other factors that could adversely affect Zebra's business and results of operations. The success of integrating acquisitions could also adversely affect profitability, reported results and the company’s competitive position in its industry. These and other factors could have an adverse effect on Zebra’s sales, gross profit margins and results of operations and increase the volatility of Zebra's financial results. When used in this release and documents referenced, the words “anticipate,” “believe,” “outlook,” and “expect” and similar expressions, as they relate to the Company or its management, are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Descriptions of certain risks, uncertainties and other factors that could adversely affect the Company’s future operations and results can be found in Zebra’s filings with the Securities and Exchange Commission, including the Company’s most recent Form 10-K and Form 10-Q.
Use of Non-GAAP Financial Information
This press release contains certain Non-GAAP financial measures, consisting of “Adjusted EBITDA,” “Adjusted EBITDA margin,” “adjusted gross margin,” “adjusted gross profit,” “adjusted net sales,” “adjusted operating expenses,” “adjusted operating income,” “EBITDA,” “free cash flow,” “non-GAAP diluted earnings per share,” “non-GAAP earnings per share,” “non-GAAP net income,” “organic net sales,” and “organic net sales growth.” Management presents these measures to focus on the on-going operations and believes it is useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The company believes it is useful to present non-GAAP financial measures, which exclude certain significant items, as a means to understand the performance of its ongoing operations and how management views the business. Please see the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables and accompanying disclosures at the end of this press release for more detailed information regarding non-GAAP financial measures herein, including the items reflected in adjusted net earnings calculations. These measures, however, should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
The company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis (including the information under “Outlook” above) where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred, are out of the company’s control and/or cannot be reasonably predicted, and that would impact diluted net earnings per share, the most directly comparable forward-looking GAAP financial measure. For the same reasons, the company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.
As a global company, Zebra's operating results reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which the company transacts change in value over time compared to the U.S. dollar; accordingly, the company presents certain organic growth financial information, which includes impacts of foreign currency translation, to provide a framework to assess how the company’s businesses performed excluding the impact of foreign currency exchange rate fluctuations. Foreign currency impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. dollar. This impact is calculated by translating current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods. The company believes these measures should be considered a supplement to and not in lieu of the company’s performance measures calculated in accordance with GAAP.
| Contacts | ||||||||
| Investors | Media | |||||||
| Michael Steele, CFA, IRC | Therese Van Ryne | |||||||
| Vice President, Investor Relations | Senior Director, External Communications | |||||||
| Phone: + 1 847 518 6432 | Phone: + 1 847 370 2317 | |||||||
| InvestorRelations@zebra.com | therese.vanryne@zebra.com | |||||||
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The Zebra wordmark and logo are trademarks of Zebra Technologies Corp., registered in many jurisdictions worldwide. ©2026 Zebra Technologies Corp. and/or its affiliates. You may quote this release with attribution.
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
| October 3, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 182 | $ | 125 | |||||||
Accounts receivable, net of allowances for doubtful accounts of $1 million each as of October 3, 2026 and December 31, 2025 | 1,025 | 801 | |||||||||
| Inventories, net | 851 | 729 | |||||||||
| Income tax receivable | 76 | 31 | |||||||||
| Prepaid expenses and other current assets | 141 | 110 | |||||||||
| Total Current assets | 2,275 | 1,796 | |||||||||
| Property, plant and equipment, net | 348 | 353 | |||||||||
| Right-of-use lease assets | 180 | 166 | |||||||||
| Goodwill | 4,698 | 4,727 | |||||||||
| Other intangibles, net | 687 | 809 | |||||||||
| Deferred income taxes | 393 | 414 | |||||||||
| Other long-term assets | 239 | 237 | |||||||||
| Total Assets | $ | 8,820 | $ | 8,502 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | 2,077 | $ | 141 | |||||||
| Accounts payable | 896 | 695 | |||||||||
| Accrued liabilities | 553 | 558 | |||||||||
| Deferred revenue | 438 | 446 | |||||||||
| Income taxes payable | 47 | 12 | |||||||||
| Total Current liabilities | 4,011 | 1,852 | |||||||||
| Long-term debt | 494 | 2,361 | |||||||||
| Long-term lease liabilities | 167 | 157 | |||||||||
| Deferred income taxes | 27 | 32 | |||||||||
| Long-term deferred revenue | 414 | 396 | |||||||||
| Other long-term liabilities | 139 | 116 | |||||||||
| Total Liabilities | 5,252 | 4,914 | |||||||||
| Stockholders’ Equity: | |||||||||||
| Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued | — | — | |||||||||
| Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares | 1 | 1 | |||||||||
| Additional paid-in capital | 926 | 814 | |||||||||
| Treasury stock at cost, 24,975,690 and 22,558,911 shares as of October 3, 2026 and December 31, 2025, respectively | (3,131) | (2,488) | |||||||||
| Retained earnings | 5,811 | 5,279 | |||||||||
| Accumulated other comprehensive loss | (39) | (18) | |||||||||
| Total Stockholders’ Equity | 3,568 | 3,588 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 8,820 | $ | 8,502 | |||||||
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Tangible products | $ | 1,370 | $ | 1,081 | $ | 3,917 | $ | 3,198 | |||||||||||||||
| Services and software | 244 | 239 | 749 | 723 | |||||||||||||||||||
| Total Net sales | 1,614 | 1,320 | 4,666 | 3,921 | |||||||||||||||||||
| Cost of sales: | |||||||||||||||||||||||
| Tangible products | 745 | 557 | 1,983 | 1,652 | |||||||||||||||||||
| Services and software | 131 | 129 | 378 | 374 | |||||||||||||||||||
| Total Cost of sales | 876 | 686 | 2,361 | 2,026 | |||||||||||||||||||
| Gross profit | 738 | 634 | 2,305 | 1,895 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling and marketing | 183 | 159 | 556 | 478 | |||||||||||||||||||
| Research and development | 158 | 146 | 482 | 441 | |||||||||||||||||||
| General and administrative | 122 | 111 | 363 | 324 | |||||||||||||||||||
| Amortization of intangible assets | 37 | 25 | 111 | 74 | |||||||||||||||||||
| Acquisition and integration costs | 1 | 10 | 4 | 17 | |||||||||||||||||||
| Exit and restructuring costs | — | — | 16 | — | |||||||||||||||||||
| Total Operating expenses | 501 | 451 | 1,532 | 1,334 | |||||||||||||||||||
| Operating income | 237 | 183 | 773 | 561 | |||||||||||||||||||
| Other (loss) income, net: | |||||||||||||||||||||||
| Foreign exchange (loss) gain | (3) | 1 | (5) | (15) | |||||||||||||||||||
| Interest expense, net | (35) | (23) | (107) | (71) | |||||||||||||||||||
| Other expense, net | (1) | (2) | (11) | (13) | |||||||||||||||||||
| Total Other expense, net | (39) | (24) | (123) | (99) | |||||||||||||||||||
| Income before income tax | 198 | 159 | 650 | 462 | |||||||||||||||||||
| Income tax expense | 34 | 58 | 118 | 113 | |||||||||||||||||||
| Net income | $ | 164 | $ | 101 | $ | 532 | $ | 349 | |||||||||||||||
| Basic earnings per share | $ | 3.47 | $ | 1.98 | $ | 11.08 | $ | 6.83 | |||||||||||||||
| Diluted earnings per share | $ | 3.43 | $ | 1.97 | $ | 10.97 | $ | 6.78 | |||||||||||||||
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Nine Months Ended | |||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 532 | $ | 349 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 170 | 126 | |||||||||
| Losses on long-term investments | 15 | 11 | |||||||||
| Share-based compensation | 136 | 130 | |||||||||
| Deferred income taxes | 6 | 61 | |||||||||
| Gain on sale of business | (5) | — | |||||||||
| Other, net | 1 | 2 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | (229) | 57 | |||||||||
| Inventories, net | (125) | 30 | |||||||||
| Other assets | (21) | 16 | |||||||||
| Accounts payable | 194 | (115) | |||||||||
| Accrued liabilities | 17 | (49) | |||||||||
| Deferred revenue | 9 | 16 | |||||||||
| Income taxes | 8 | (71) | |||||||||
| Other operating activities | 3 | (3) | |||||||||
| Net cash provided by operating activities | 711 | 560 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Acquisition of business | — | (62) | |||||||||
| Proceeds from the sale of business | 9 | — | |||||||||
| Purchases of property, plant and equipment | (50) | (56) | |||||||||
| Proceeds from sale of long-term investments | 1 | 1 | |||||||||
| Purchases of long-term investments | — | (4) | |||||||||
| Other investing activities | 1 | — | |||||||||
| Net cash used in investing activities | (39) | (121) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payments of debt | (138) | — | |||||||||
| Proceeds from issuance of debt | 205 | — | |||||||||
| Payments for repurchases of common stock | (643) | (284) | |||||||||
| Net payments related to share-based compensation plans | (20) | (15) | |||||||||
| Change in unremitted cash collections from servicing factored receivables | (21) | 9 | |||||||||
| Other financing activities | — | 4 | |||||||||
| Net cash used in financing activities | (617) | (286) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 2 | (1) | |||||||||
| Net increase in cash and cash equivalents | 57 | 152 | |||||||||
| Cash and cash equivalents at beginning of period | 125 | 901 | |||||||||
| Cash and cash equivalents at end of period | $ | 182 | $ | 1,053 | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Income taxes paid | $ | 118 | $ | 124 | |||||||
| Interest paid | $ | 99 | $ | 79 | |||||||
Certain prior period amounts included in Net cash provided by operating activities have been reclassified to conform with the current period presentation.
-8-
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF ORGANIC NET SALES GROWTH
(Unaudited)
| Three Months Ended | |||||||||||||||||
| October 3, 2026 | |||||||||||||||||
| CF | AVA | Consolidated | |||||||||||||||
| Consolidated Reported GAAP Net sales growth | 34.6 | % | 8.1 | % | 22.3 | % | |||||||||||
| Adjustments: | |||||||||||||||||
Impact of foreign currency translations (1) | (2.4) | % | (1.3) | % | (2.1) | % | |||||||||||
Impact of acquisitions and dispositions (2) | (17.2) | % | 0.2 | % | (8.9) | % | |||||||||||
| Consolidated Organic Net sales growth | 15.0 | % | 7.0 | % | 11.3 | % | |||||||||||
| Nine Months Ended | |||||||||||||||||
| October 3, 2026 | |||||||||||||||||
| CF | AVA | Consolidated | |||||||||||||||
| Reported GAAP Consolidated Net sales growth | 27.1 | % | 9.6 | % | 19.0 | % | |||||||||||
| Adjustments: | |||||||||||||||||
Impact of foreign currency translations (1) | (2.3) | % | (1.9) | % | (2.2) | % | |||||||||||
Impact of acquisitions and dispositions (2) | (15.9) | % | — | % | (8.5) | % | |||||||||||
| Consolidated Organic Net sales growth | 8.9 | % | 7.7 | % | 8.3 | % | |||||||||||
(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.
(2)For purposes of computing Organic Net sales growth, amounts attributable to business acquisitions or dispositions are excluded for twelve months following or preceding the respective acquisition or disposition, respectively.
-9-
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP GROSS MARGIN AND OPERATING INCOME
($ In millions)
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| CF | AVA | Consolidated | CF | AVA | Consolidated | ||||||||||||||||||||||||||||||
| GAAP | |||||||||||||||||||||||||||||||||||
| Reported Net sales | $ | 949 | $ | 665 | $ | 1,614 | $ | 705 | $ | 615 | $ | 1,320 | |||||||||||||||||||||||
Reported Gross profit (1) | 410 | 332 | 738 | 324 | 312 | 634 | |||||||||||||||||||||||||||||
| Gross Margin | 43.2 | % | 49.9 | % | 45.7 | % | 46.0 | % | 50.7 | % | 48.0 | % | |||||||||||||||||||||||
Operating Income (2) | 171 | 158 | 237 | 132 | 136 | 183 | |||||||||||||||||||||||||||||
| Non-GAAP | |||||||||||||||||||||||||||||||||||
| Adjusted Net sales | $ | 949 | $ | 665 | $ | 1,614 | $ | 705 | $ | 615 | $ | 1,320 | |||||||||||||||||||||||
Adjusted Gross profit (1) | 410 | 332 | 742 | 324 | 312 | 636 | |||||||||||||||||||||||||||||
| Adjusted Gross Margin | 43.2 | % | 49.9 | % | 46.0 | % | 46.0 | % | 50.7 | % | 48.2 | % | |||||||||||||||||||||||
Adjusted Operating Income (2) | 171 | 158 | 329 | 132 | 136 | 268 | |||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||||||||||||||||||||||||||
| CF | AVA | Consolidated | CF | AVA | Consolidated | ||||||||||||||||||||||||||||||
| GAAP | |||||||||||||||||||||||||||||||||||
| Reported Net sales | $ | 2,677 | $ | 1,989 | $ | 4,666 | $ | 2,106 | $ | 1,815 | $ | 3,921 | |||||||||||||||||||||||
Reported Gross profit (1) | 1,277 | 1,048 | 2,305 | 996 | 908 | 1,895 | |||||||||||||||||||||||||||||
| Gross Margin | 47.7 | % | 52.7 | % | 49.4 | % | 47.3 | % | 50.0 | % | 48.3 | % | |||||||||||||||||||||||
Operating Income (2) | 559 | 509 | 773 | 414 | 378 | 561 | |||||||||||||||||||||||||||||
| Non-GAAP | |||||||||||||||||||||||||||||||||||
| Adjusted Net sales | $ | 2,677 | $ | 1,989 | $ | 4,666 | $ | 2,106 | $ | 1,815 | $ | 3,921 | |||||||||||||||||||||||
Adjusted Gross profit (1) | 1,277 | 1,048 | 2,325 | 996 | 908 | 1,904 | |||||||||||||||||||||||||||||
| Adjusted Gross Margin | 47.7 | % | 52.7 | % | 49.8 | % | 47.3 | % | 50.0 | % | 48.6 | % | |||||||||||||||||||||||
Adjusted Operating Income (2) | 559 | 509 | 1,068 | 414 | 378 | 792 | |||||||||||||||||||||||||||||
(1)Segment and Adjusted Gross profit excludes share-based compensation expense and business acquisition purchase accounting adjustments.
(2)Segment and Non-GAAP Operating income excludes share-based compensation expense, business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, exit and restructuring costs, as well as certain other non-recurring costs (impairment of goodwill and other intangible assets).
-10-
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
($ In millions, except share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| GAAP Net income | $ | 164 | $ | 101 | $ | 532 | $ | 349 | |||||||||||||||
Adjustments to Cost of sales(1) | |||||||||||||||||||||||
| Purchase accounting adjustments | — | — | 5 | — | |||||||||||||||||||
| Share-based compensation | 4 | 2 | 15 | 9 | |||||||||||||||||||
| Total adjustments to Cost of sales | 4 | 2 | 20 | 9 | |||||||||||||||||||
Adjustments to Operating expenses(1) | |||||||||||||||||||||||
| Amortization of intangible assets | 37 | 25 | 111 | 74 | |||||||||||||||||||
| Acquisition and integration costs | 1 | 10 | 4 | 17 | |||||||||||||||||||
| Share-based compensation | 50 | 48 | 144 | 131 | |||||||||||||||||||
| Exit and restructuring costs | — | — | 16 | — | |||||||||||||||||||
| Total adjustments to Operating expenses | 88 | 83 | 275 | 222 | |||||||||||||||||||
Adjustments to Other expense, net(1) | |||||||||||||||||||||||
| Amortization of debt issuance costs and discounts | 1 | 1 | 3 | 2 | |||||||||||||||||||
| Losses on long-term investments | — | 1 | 15 | 11 | |||||||||||||||||||
| Foreign exchange loss | 3 | (1) | 5 | 15 | |||||||||||||||||||
| Gain on sale of business | — | — | (5) | — | |||||||||||||||||||
| Other adjustments to Other expense, net | — | — | (3) | — | |||||||||||||||||||
| Total adjustments to Other expense, net | 4 | 1 | 15 | 28 | |||||||||||||||||||
Income tax effect of adjustments(2) | |||||||||||||||||||||||
| Reported income tax expense | 34 | 58 | 118 | 113 | |||||||||||||||||||
| Adjusted income tax | (57) | (47) | (183) | (129) | |||||||||||||||||||
| Total adjustments to income tax | (23) | 11 | (65) | (16) | |||||||||||||||||||
| Total adjustments | 73 | 97 | 245 | 243 | |||||||||||||||||||
| Non-GAAP Net income | $ | 237 | $ | 198 | $ | 777 | $ | 592 | |||||||||||||||
| GAAP earnings per share | |||||||||||||||||||||||
| Basic | $ | 3.47 | $ | 1.98 | $ | 11.08 | $ | 6.83 | |||||||||||||||
| Diluted | $ | 3.43 | $ | 1.97 | $ | 10.97 | $ | 6.78 | |||||||||||||||
| Non-GAAP earnings per share | |||||||||||||||||||||||
| Basic | $ | 5.01 | $ | 3.90 | $ | 16.18 | $ | 11.59 | |||||||||||||||
| Diluted | $ | 4.95 | $ | 3.88 | $ | 16.03 | $ | 11.51 | |||||||||||||||
| Basic weighted average shares outstanding | 47,277,714 | 50,800,552 | 48,027,688 | 51,044,563 | |||||||||||||||||||
| Diluted weighted average and equivalent shares outstanding | 47,813,188 | 51,171,119 | 48,480,549 | 51,429,532 | |||||||||||||||||||
(1)Presented on a pre-tax basis.
(2)Represents adjustments to GAAP income tax expense commensurate with pre-tax non-GAAP adjustments (including the resulting impacts to U.S. BEAT/GILTI provisions), as well as adjustments to exclude the impacts of certain discrete income tax items and incorporate the anticipated annualized effects of current year tax planning.
-11-
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
GAAP to NON-GAAP RECONCILIATION TO EBITDA
($ In millions)
(Unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| October 3, 2026 | September 27, 2025 | October 3, 2026 | September 27, 2025 | ||||||||||||||||||||
| GAAP Net income | $ | 164 | $ | 101 | $ | 532 | $ | 349 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation (excluding exit and restructuring) | 20 | 17 | 59 | 52 | |||||||||||||||||||
| Amortization of intangible assets | 37 | 25 | 111 | 74 | |||||||||||||||||||
| Total Other expense, net | 39 | 24 | 123 | 99 | |||||||||||||||||||
| Income tax expense | 34 | 58 | 118 | 113 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 294 | 225 | 943 | 687 | |||||||||||||||||||
| Adjustments to Cost of sales | |||||||||||||||||||||||
| Purchase accounting adjustments | — | — | 5 | — | |||||||||||||||||||
| Share-based compensation | 4 | 2 | 15 | 9 | |||||||||||||||||||
| Total adjustments to Cost of sales | 4 | 2 | 20 | 9 | |||||||||||||||||||
| Adjustments to Operating expenses | |||||||||||||||||||||||
| Acquisition and integration costs | 1 | 10 | 4 | 17 | |||||||||||||||||||
| Share-based compensation | 50 | 48 | 144 | 131 | |||||||||||||||||||
| Exit and restructuring costs | — | — | 16 | — | |||||||||||||||||||
| Total adjustments to Operating expenses | 51 | 58 | 164 | 148 | |||||||||||||||||||
| Total adjustments to EBITDA | 55 | 60 | 184 | 157 | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 349 | $ | 285 | $ | 1,127 | $ | 844 | |||||||||||||||
| Adjusted EBITDA margin (Non-GAAP) | 21.6 | % | 21.6 | % | 24.2 | % | 21.5 | % | |||||||||||||||
FREE CASH FLOW
| Nine Months Ended | |||||||||||
| October 3, 2026 | September 27, 2025 | ||||||||||
| Net cash provided by operating activities | $ | 711 | $ | 560 | |||||||
| Less: Purchases of property, plant and equipment | (50) | (56) | |||||||||
Free cash flow (Non-GAAP)(1) | $ | 661 | $ | 504 | |||||||
(1) Free cash flow, a non-GAAP measure, is defined as Net cash provided by (used in) operating activities in a period minus purchases of property, plant and equipment (capital expenditures) made in that period.
-12-