Zebra(US:ZBRA)2025-10-28 11:53Financial Performance - Net sales for Q3 2025 were $1,320 million, a year-over-year increase of 5.2% from $1,255 million in Q3 2024[4] - Net income for Q3 2025 was $101 million, down 26.3% from $137 million in Q3 2024, resulting in a net income per diluted share of $1.97[7] - Adjusted EBITDA for Q3 2025 increased to $285 million, representing a 6.3% year-over-year growth from $268 million in Q3 2024[8] - Total net sales for the three months ended September 27, 2025, reached $1,320 million, a 5.2% increase compared to $1,255 million for the same period in 2024[27] - Operating income for the three months ended September 27, 2025, was $183 million, compared to $191 million for the same period in 2024, indicating a slight decrease[27] - Net income for the nine months ended September 27, 2025, was $349 million, down from $365 million in the same period of 2024[29] - Reported net sales for the three months ended September 27, 2025, were $1,320 million, an increase from $1,255 million for the same period in 2024, representing a growth of 5.2%[34] - Non-GAAP net income for the three months ended September 27, 2025, was $198 million, up from $181 million in the same period of 2024, indicating a growth of 9.4%[37] Segment Performance - The Enterprise Visibility & Mobility segment reported net sales of $865 million, while the Asset Intelligence & Tracking segment reported $455 million, reflecting increases of 2.0% and 10.6% respectively[5] - Consolidated organic net sales growth for the three months ended September 27, 2025, was 4.8% after adjustments for foreign currency translations and acquisitions[31] - Gross profit for the nine months ended September 27, 2025, was $1,895 million, up from $1,765 million in the same period of 2024, reflecting a strong performance[27] - Adjusted gross profit for the nine months ended September 27, 2025, was $1,904 million, compared to $1,772 million for the same period in 2024, reflecting an increase of 7.4%[34] Cash Flow and Debt - Free cash flow for the full year 2025 is expected to exceed $800 million, with an additional $500 million in share repurchases planned over the next 12 months[13] - The company had cash and cash equivalents of $1,053 million and total debt of $2,183 million as of September 27, 2025[10] - Cash and cash equivalents at the end of the period were $1,053 million, an increase from $901 million at the beginning of the period[29] - Free cash flow for the nine months ended September 27, 2025, was $504 million, down from $666 million for the same period in 2024, a decrease of 24.3%[42] Expenses and Margins - Adjusted gross margin for Q3 2025 was 48.2%, down from 49.1% in Q3 2024, primarily due to U.S. import tariff expenses[5] - Operating expenses increased to $451 million in Q3 2025, up from $422 million in the prior year, mainly due to higher stock-based compensation[6] - Research and development expenses for the three months ended September 27, 2025, were $146 million, up from $141 million in the same period of 2024, reflecting continued investment in innovation[27] - Adjusted gross margin for the three months ended September 27, 2025, was 50.8%, compared to 49.1% for the same period in 2024, indicating an improvement[34] - Basic earnings per share (GAAP) for the three months ended September 27, 2025, were $1.98, down from $2.65 in the same period of 2024, a decrease of 25.3%[37] Future Outlook - The company expects Q4 2025 sales growth between 8% and 11%, including approximately 850 basis points of favorable impact from acquisitions and foreign currency translation[11] - Non-GAAP diluted earnings per share for Q4 2025 are projected to be in the range of $4.20 to $4.40, assuming an adjusted effective tax rate of approximately 18%[12] - The company plans to change its reportable segments to Connected Frontline (CF) and Asset Visibility & Automation (AVA) starting in the fourth quarter, aligning with its operational strategy[44] - Future outlook includes continued investment in new segments such as Connected Frontline and Asset Visibility & Automation[47] Acquisitions - The company acquired businesses for $62 million during the nine months ended September 27, 2025, indicating ongoing market expansion efforts[29]