Financial Data and Key Metrics Changes - For Q3 2025, Zebra Technologies reported sales of $1.3 billion, a 5% increase year-on-year, with an adjusted EBITDA margin of 21.6%, reflecting a 20 basis point improvement, and non-GAAP diluted earnings per share of $3.88, which is 11% higher than the previous year [4][6][10] - The company anticipates Q4 sales growth between 8% and 11%, with adjusted EBITDA margin expected to be approximately 22% and non-GAAP diluted earnings per share projected in the range of $4.20-$4.40 [10][19] Business Line Data and Key Metrics Changes - The enterprise visibility and mobility segment grew 2%, primarily driven by mobile computing, while the asset intelligence and tracking segment grew 11%, led by RFID and printing [7][8] - The software and recurring revenue business saw modest growth during the quarter [7] Market Data and Key Metrics Changes - North America sales increased by 6%, with double-digit growth in mobile computing and RFID, although there was weakness in Canada [8] - Asia Pacific sales surged by 23%, driven by strong performance in Australia, New Zealand, and India [8] - Latin America experienced an 8% sales increase, while EMEA sales declined by 3%, with mixed performance across the region [8] Company Strategy and Development Direction - Zebra Technologies is focused on digitizing and automating workflows, leveraging its portfolio of innovative solutions, including hardware, software, and services [11][12] - The company is excited about growth opportunities from its recent acquisition of Elo Touch Solutions, which enhances its capabilities in self-service and point-of-sale solutions [17][19] - The company plans to report under two new segments: connected frontline and asset visibility and automation, aligning with its strategic priorities [7][12] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is solid growth across most business areas, customers are navigating an uncertain macro environment, leading to uneven demand across geographies and vertical markets [6][34] - The company remains optimistic about long-term growth opportunities, particularly in AI and automation, which are expected to drive demand for its solutions [19][34] Other Important Information - Zebra Technologies has committed $500 million to share repurchases over the next 12 months, reflecting confidence in long-term shareholder value [6][8] - The company has successfully navigated supply chain challenges, including tariffs, and expects to mitigate the impact of U.S. import tariffs entering 2026 [9][10] Q&A Session Summary Question: Demand trends and Q4 guidance - Management indicated that Q3 demand was strong, with solid growth across regions, but noted that Q4 guidance implies a deceleration in organic growth due to tough comparisons [24][25] Question: EVM segment growth - Management highlighted strong growth in mobile computing but noted a decline in data capture, impacting overall EVM performance [27][28] Question: 2026 outlook and demand across verticals - Management acknowledged cautious customer sentiment and uneven demand across different environments, but expressed confidence in sustainable growth driven by AI opportunities [34][35] Question: Large project funnel and customer conversations - Management reported consistent demand trajectory and ongoing capital spending from customers, despite some caution due to macro uncertainties [41][43] Question: RFID growth and future visibility - Management confirmed strong double-digit growth in RFID and ongoing opportunities across various verticals, including retail and logistics [55][56] Question: AI opportunities and hardware refresh cycles - Management discussed the potential for higher-end devices and the importance of AI in driving future growth, with expected revenues from AI solutions starting in 2026 [60][62] Question: Elo acquisition impact - Management confirmed that Elo is expected to contribute $100 million in Q4, aligning with previous growth expectations, and highlighted ongoing operational synergies [72][73] Question: Pricing actions related to tariffs - Management noted that pricing actions have not significantly impacted demand and are in line with industry trends [76] Question: OBBBA tax impact - Management expects a reduction in cash taxes due to the new tax bill, with an anticipated cash benefit of over $200 million in the next two years [78]

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]

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]