Group 1 - The "Trump Tariff Losers" index increased by 0.85%, reaching 84.49 points [1] - Zebra Technologies saw a rise of 5.16%, while Five Below increased by 3.12% [1] - Gap and Coach also experienced gains, with increases of 1.35% and 1.13% respectively [1] Group 2 - Dollar Tree rose by 0.9%, indicating a positive performance among some retailers [1] - Best Buy declined by 1.19%, and Harley-Davidson fell by 1.24%, showing mixed results in the sector [1]

Financial Data and Key Metrics Changes - In Q1 2025, Zebra Technologies reported sales exceeding $1,300,000,000, representing a 12% increase compared to the prior year [7] - Adjusted EBITDA margin was 22.3%, a 240 basis point increase year-over-year [7][12] - Non-GAAP diluted earnings per share were $4.2, a 42% increase from the previous year [7][12] - Adjusted gross margin increased by 150 basis points to 49.6% due to favorable business mix and volume leverage [11] Business Line Data and Key Metrics Changes - Asset Intelligence and Tracking segment sales increased by 18% [10] - Enterprise Visibility and Mobility segment sales grew by 9% [10] - Strong sales growth was observed across all major product categories and regions, with double-digit growth in most vertical end markets [7][10] Market Data and Key Metrics Changes - North America sales grew by 7%, with notable strength in data capture, print, and RFID [11] - EMEA sales increased by 18%, particularly strong in Northern Europe [11] - Asia Pacific sales rose by 13%, led by Australia and New Zealand [11] - Latin America sales grew by 18%, with significant strength in Mexico [11] Company Strategy and Development Direction - The company is focused on returning to profitable growth, extending market leadership, and advancing its portfolio of solutions [5] - Zebra Technologies is diversifying its supply chain beyond China and maintaining a capital-light business model to remain agile [5][14] - The company continues to invest approximately 10% of sales in research and development to enhance its innovative solutions [22] Management's Comments on Operating Environment and Future Outlook - Management noted that demand remained strong into Q2 2025, supported by robust retail year-end spending [6][31] - The company is cautious about the global trade environment and its potential impact on customer behavior, but has not observed significant changes in purchasing behavior to date [32][76] - The anticipated impact from U.S. import tariffs is estimated to be $70,000,000 for the full year, which is $50,000,000 higher than prior guidance [20] Other Important Information - Zebra Technologies generated $158,000,000 of free cash flow in Q1 2025 [12] - The company repurchased $125,000,000 of stock in Q1 and an additional $75,000,000 in April [13] - The acquisition of Photo Neo, a leading 3D machine vision company, is expected to contribute approximately 30 basis points to Zebra's overall sales growth in 2025 [13] Q&A Session Summary Question: Demand picture and changes throughout the quarter - Management indicated that demand remained strong through April, supported by strong retail spending from the previous year [31][32] Question: Actions regarding tariffs and manufacturing footprint - Management discussed ongoing assessments of the manufacturing footprint and strategies to mitigate tariff impacts, including diversifying supply chains and adjusting production locations [32] Question: Manufacturing end market performance - Manufacturing showed high single-digit growth but lagged behind other verticals, with management noting ongoing improvements [38] Question: Pricing increases and realization - Management expressed confidence in the ability to implement price increases effectively, aligning with competitive actions in the market [70][72] Question: Visibility into demand and customer behavior - Management noted improved visibility into demand but highlighted ongoing uncertainty related to tariffs affecting customer sentiment [76] Question: Tariff impacts and mitigation strategies - Management confirmed that the anticipated tariff impact for the year is $70,000,000, with ongoing efforts to mitigate this through various strategies [20][114]

Core Viewpoint - Zebra Technologies Corporation (ZBRA) reported strong first-quarter 2025 results, with adjusted earnings per share of $4.02, exceeding estimates and showing a significant year-over-year increase of 41.5% from $2.84 [1][2] Financial Performance - Total revenues reached $1.31 billion, surpassing the consensus estimate of $1.28 billion, and reflecting an 11.3% year-over-year growth driven by the Enterprise Visibility & Mobility and Asset Intelligence & Tracking segments [2] - The Asset Intelligence & Tracking segment saw revenues rise by 17.9% year over year to $462 million, exceeding the consensus estimate of $434 million, with organic net sales increasing by 18.4% [2] - The Enterprise Visibility & Mobility segment reported revenues of $846 million, an 8.1% increase year over year, though slightly below the consensus estimate of $852 million, with organic net sales up by 8.6% [3] Margin and Cost Analysis - Cost of sales for the first quarter totaled $663 million, an increase of 8.3% year over year, while total operating expenses rose by 11.4% to $450 million [4] - Net income for the quarter was $136 million, compared to $115 million in the same period last year [4] Balance Sheet and Cash Flow - At the end of the first quarter, cash and cash equivalents stood at $879 million, down from $901 million at the end of December 2024, while long-term debt increased slightly to $2.1 billion [5] - The company generated net cash of $178 million from operating activities, up from $125 million in the previous year, with free cash flow amounting to $158 million compared to $111 million a year ago [6] Guidance - For the second quarter of 2025, ZBRA expects net sales to grow between 4-7% year over year, with an anticipated adjusted EBITDA margin of approximately 19% and adjusted earnings per share projected in the range of $3.00-$3.50 [7] - For the full year 2025, the adjusted earnings outlook has been revised to a range of $13.75-$14.75 per share, with net sales expected to increase by 3-7% year over year and free cash flow projected to be at least $700 million [8]

Financial Performance - Zebra Technologies reported Q1 2025 sales of $1,308 million, reflecting 11.9% organic net sales growth[10] - The adjusted EBITDA margin increased by 240bps to 22.3%[10] - Non-GAAP diluted EPS increased by 41.5% to $4.02[10] - Free cash flow for Q1 2025 was $158 million, $47 million higher year-over-year[18] Segment and Regional Growth - Asset Intelligence & Tracking segment organic net sales grew by 18.4%[16] - Enterprise Visibility & Mobility segment organic net sales grew by 8.6%[16] - EMEA region experienced organic net sales growth of 18%[16] - Latin America region experienced organic net sales growth of 18%[16] Outlook and Tariffs - The company expects sales growth between 4% and 7% for Q2 2025[24] - The company expects sales growth between 3% and 7% for FY25[24] - The company anticipates approximately $70 million gross profit impact for FY25 due to U S import tariffs[20] - The company anticipates $25-30 million gross profit net impact from import tariffs for 2Q25[20]

Financial Data and Key Metrics Changes - In Q1 2025, Zebra Technologies reported sales exceeding $1.3 billion, representing a 12% increase year-over-year [7][10] - Adjusted EBITDA margin was 22.3%, an increase of 240 basis points compared to the previous year [7][12] - Non-GAAP diluted earnings per share were $4.2, a 42% increase year-over-year [7][12] Business Line Data and Key Metrics Changes - Asset Intelligence and Tracking segment sales increased by 18% [10] - Enterprise Visibility and Mobility segment sales grew by 9% [10] - Strong sales growth was observed across all major product categories and regions, with double-digit growth in most vertical end markets [7][10] Market Data and Key Metrics Changes - North America sales grew by 7%, with notable strength in data capture, print, and RFID [11] - EMEA sales increased by 18%, particularly strong in Northern Europe [11] - Asia Pacific sales rose by 13%, led by Australia and New Zealand, while Latin America sales grew by 18%, especially in Mexico [11] Company Strategy and Development Direction - The company is focused on returning to profitable growth and expanding its market leadership through innovative solutions [5][21] - Zebra Technologies is diversifying its supply chain beyond China and maintaining a capital-light business model to remain agile [5][14] - The company continues to invest approximately 10% of its sales in research and development to enhance its portfolio [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that demand remained strong into Q2 2025, supported by robust retail year-end spending [6][31] - Despite macroeconomic uncertainties, the company is well-positioned to benefit from trends in digitization and automation [5][21] - Management expressed caution regarding the impact of tariffs on profitability, projecting a gross profit impact of $70 million for the full year 2025 [16][20] Other Important Information - Zebra Technologies generated $158 million in free cash flow in Q1 2025 and ended the quarter with a net debt to adjusted EBITDA leverage ratio of 1.2 [12][14] - The company repurchased $125 million of stock in Q1 and an additional $75 million in April [13][14] - The acquisition of Photo Neo for $62 million is expected to contribute approximately 30 basis points to overall sales growth in 2025 [13] Q&A Session Summary Question: Demand trends throughout the quarter - Management indicated that demand remained strong through April, with customers maintaining positive capital budgets and project momentum despite global trade uncertainties [31][32] Question: Mitigation actions regarding tariffs - Management discussed ongoing assessments of the manufacturing footprint and strategies to mitigate tariff impacts, including shifting production out of China and pricing adjustments [33][34] Question: Manufacturing end market performance - Management acknowledged that while manufacturing growth was lagging compared to other verticals, it still showed high single-digit growth [38] Question: Pricing increases and realization - Management expressed confidence in the ability to implement price increases effectively, noting that competitive pricing considerations were taken into account [70][72] Question: Visibility into demand - Management stated that visibility into demand has improved, but uncertainty regarding tariffs remains a significant concern for customers [75][76] Question: Regional performance differences - Management clarified that EMEA's strong growth was influenced by favorable prior year comparisons, while North America experienced solid growth across most end markets [94][95]

Financial Performance - Net sales for Q1 2025 were $1,308 million, an increase of 11.3% year-over-year from $1,175 million in Q1 2024[5] - Gross profit for Q1 2025 was $645 million, up 14.6% from $563 million in Q1 2024, with a gross margin of 49.3%[6] - Net income for Q1 2025 was $136 million, or $2.62 per diluted share, representing an 18.3% increase from $115 million, or $2.23 per diluted share, in Q1 2024[8] - Non-GAAP net income increased to $208 million for Q1 2025, or $4.02 per diluted share, compared to $147 million, or $2.84 per diluted share, in the prior year[8] - Adjusted EBITDA for Q1 2025 was $292 million, a 24.8% increase from $234 million in Q1 2024, with an adjusted EBITDA margin of 22.3%[9] - Total net sales for the three months ended March 29, 2025, increased to $1,308 million, a 11.3% growth compared to $1,175 million for the same period in 2024[28] - Gross profit for the same period rose to $645 million, up from $563 million, reflecting a gross margin of 49.3%[28] - Net income for the three months ended March 29, 2025, was $136 million, compared to $115 million in the prior year, resulting in a basic earnings per share of $2.64[28][36] - The adjusted gross margin improved to 49.6% from 48.1% year-over-year[34] - Adjusted EBITDA for Q1 2025 reached $292 million, compared to $234 million in Q1 2024, reflecting a 24.8% growth[40] - Adjusted EBITDA margin improved to 22.3% in Q1 2025, up from 19.9% in Q1 2024[40] Future Outlook - The company expects Q2 2025 sales growth between 4% and 7% compared to the prior year[11] - Full year 2025 sales growth is maintained at 3% to 7% compared to the prior year[13] - Adjusted EBITDA margin for the full year is expected to be between 20% and 21%, including approximately $70 million in U.S. import tariff expenses[14] - Free cash flow for the full year 2025 is expected to exceed $700 million[15] Cash Flow and Investments - Cash and cash equivalents at the end of the period were $879 million, down from $901 million at the beginning of the period[30] - The company invested $62 million in acquisitions during the three months ended March 29, 2025[30] - Free cash flow for Q1 2025 was $158 million, significantly higher than $111 million in Q1 2024, marking a 42.3% increase[42] - Net cash provided by operating activities increased to $178 million in Q1 2025, compared to $125 million in Q1 2024, a rise of 42.4%[42] Expenses and Liabilities - Research and development expenses increased to $151 million, compared to $138 million in the same period last year[28] - Total current liabilities decreased to $1,581 million from $1,704 million, primarily due to a reduction in accounts payable and accrued liabilities[28] - Total liabilities decreased to $4,273 million from $4,382 million, indicating a stronger balance sheet position[28] - Total adjustments to operating expenses in Q1 2025 amounted to $52 million, compared to $30 million in Q1 2024, indicating a 73.3% increase[40] - Share-based compensation in operating expenses rose to $49 million in Q1 2025 from $19 million in Q1 2024, a substantial increase of 157.9%[40] - Total other expenses increased to $30 million in Q1 2025, up from $17 million in Q1 2024, representing a 76.5% rise[40] - Income tax expense for Q1 2025 was $29 million, compared to $27 million in Q1 2024, a 7.4% increase[40] - Depreciation and amortization expenses remained relatively stable, with depreciation at $17 million and amortization at $24 million in Q1 2025[40] Share Repurchase - The company repurchased $125 million in shares during the first quarter of 2025[4] Organic Growth - The company reported an organic net sales growth of 11.9% after adjusting for foreign currency translations and acquisitions[32]

Core Viewpoint - Zebra Technologies Corporation (ZBRA) is expected to report first-quarter 2025 results on April 29, with revenue estimates of $1.28 billion, reflecting a 9% growth year-over-year, and adjusted earnings of $3.60 per share, indicating a 26.8% increase from the previous year [1]. Revenue Estimates - The consensus estimate for the Enterprise Visibility & Mobility segment's revenues is $852 million, representing an 8.8% increase from the year-ago figure [3]. - The Asset Intelligence and Tracking segment is projected to generate revenues of $434 million, indicating a 10.7% growth compared to the previous year [4]. Earnings Performance - Zebra Technologies has a strong earnings surprise history, outperforming consensus estimates in the last four quarters with an average surprise of 9.3% [2]. - The earnings estimate has remained stable over the past 60 days, suggesting consistent analyst expectations [2]. Challenges - Despite strong demand in various markets, Zebra Technologies faces challenges from high costs and expenses, including labor shortages and increased raw material costs, which are expected to negatively impact the bottom line [5]. - The company's operations are also affected by foreign exchange headwinds, particularly due to a stronger U.S. dollar impacting overseas business [6]. Earnings Prediction - The current Earnings ESP for Zebra Technologies is 0.00%, indicating no expected earnings beat, as both the Zacks Consensus Estimate and the Most Accurate Estimate are at $3.60 [8]. - The company holds a Zacks Rank of 4 (Sell), which further diminishes the likelihood of an earnings surprise this quarter [8].

Core Insights - Intelligent Product Solutions (IPS) has joined Zebra Technologies' PartnerConnect program as a Registered Alliance Partner, focusing on software solutions development and systems integration [1][2][3] - The partnership provides IPS with access to Zebra's innovative portfolio, training, and marketing benefits, enhancing collaboration opportunities within the Zebra ecosystem [2][3] Company Overview - IPS is a subsidiary of Forward Industries (NASDAQ: FORD) and specializes in product design and engineering, particularly in MedTech and wearable technology [4] - The company serves leading brands in consumer electronics and medical devices, including Neuvotion, Google, Verizon, and Zebra Technologies [4]

Core Viewpoint - Zebra Technologies Corporation (ZBRA) is facing significant challenges due to rising costs, high debt levels, and foreign exchange issues [1][5][6][8]. Group 1: Financial Performance - ZBRA's cost of sales increased by 22.3% year over year in Q4 2024, primarily due to high raw material costs [5]. - Selling and administrative expenses rose by 11% year over year, contributing to the overall increase in costs [5]. - The company's long-term debt reached $2.09 billion at the end of Q4 2024, with a compound annual growth rate (CAGR) of 18.9% over the past five years [6]. - Interest expenses in Q4 were notably high at $98 million [6]. Group 2: Debt Management - In Q2 2024, ZBRA completed a $500 million offering of senior notes due June 1, 2032, with a fixed interest rate of 6.5% [7]. - While this offering may assist in reducing some loan obligations, it is expected to increase the overall debt balance [7]. Group 3: Market Exposure and Risks - ZBRA operates in various regions, including North America, EMEA, Asia-Pacific, and Latin America, which exposes the company to geopolitical risks [8]. - Ongoing conflicts, such as those between Russia & Ukraine and Israel & Iran, may adversely affect business operations [8]. - A stronger U.S. dollar could negatively impact ZBRA's performance in overseas markets [8].

Acquisition Overview - Zebra Technologies Corporation (ZBRA) has recently completed the acquisition of Photoneo, a leader in the 3D machine vision solutions industry [1] - Photoneo, based in Slovakia, specializes in robotic vision and intelligence solutions, known for its high-resolution 3D cameras [2] Strategic Rationale - The acquisition aligns with Zebra Technologies' strategy to enhance its business and product portfolio [3] - By integrating its advanced sensors and AI-based image processing with Photoneo's technology, ZBRA aims to improve its 3D machine vision solutions [3][4] Market Position and Financials - Zebra Technologies has a market capitalization of $15.7 billion and currently holds a Zacks Rank of 5 (Strong Sell) [5] - The company has faced challenges due to high costs, with a 22.3% year-over-year increase in cost of sales in Q4 2024 [5] - As of the end of 2024, ZBRA's long-term debt stood at $2.09 billion, with cash and cash equivalents of $901 million [6] Stock Performance - ZBRA's shares have declined by 20.9% over the past month, compared to an 18.8% decline in the Manufacturing - Thermal Products industry [7] - The Zacks Consensus Estimate for ZBRA's 2025 earnings has decreased by 4.1% to $15.30 per share in the last 30 days [7]