Zebra Technologies Stock Earnings Reports

Zebra delivered a solid Q3 2025: revenue of ~$1.3B (+5% YoY organic), adjusted EBITDA margin of 21.6% (↑20 bps), and non-GAAP EPS of $3.88 (↑11% YoY). Regional performance was strong in Asia Pacific, Latin America and North America; EMEA was modestly down. Product strengths included printing, mobile computing and RFID (double-digit growth). Software and recurring revenue grew modestly. Gross margin was pressured (~-90 bps) primarily from U.S. import tariffs, but operating expense leverage improved (~-110 bps as % of sales). Cash flow remains robust ($504M YTD free cash flow), cash on hand >$1B, modest leverage and $1.5B credit capacity. Management closed Photoneo earlier and completed the Elo Touch acquisition; Elo adds self-service/point-of-sale capabilities and is modeled at ~$100M revenue in Q4. Zebra announced a $500M share-repurchase commitment over the next 12 months. Tariff impact for FY2025 is now estimated at ~$24M gross profit impact after mitigation (≈$6M net in Q4); management expects to substantially mitigate tariffs entering 2026 via pricing, supply-chain shifts and product rationalization. New reporting segments (Connected Frontline; Asset Visibility & Automation) align to a >$35B served market and 5–7% organic growth profile over a cycle. Management is emphasizing AI for the frontline (Zebra companion, pilots in retail and T&L) with initial revenue potential starting in 2026 and wider ramp in 2027+. Q4 guide: sales growth 8–11% (includes ~850 bps from Elo/Photoneo & FX), adjusted EBITDA margin ~22%, non-GAAP EPS $4.20–$4.40, implying ~8% full-year growth and ~21.5% full-year adjusted EBITDA margin. Key investor takeaways: durable balance sheet and cash generation, active capital return (buyback), product-led growth (RFID, mobile), strategic inorganic expansion (Elo, Photoneo) to broaden addressable market, ongoing tariff headwinds being mitigated, and early AI initiatives that could drive longer-term hardware and software upside.