Zebra(ZBRA) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported adjusted net sales growth of 28% year-over-year, with 25% growth on an organic basis [9][12] - Adjusted EBITDA margin improved by 620 basis points to 25.3% compared to the prior year [9][17] - Non-GAAP diluted earnings per share reached $4.79, a 79% increase from the previous year [9][17] - Free cash flow generated in Q1 was $214 million, an increase of $119 million year-over-year [18] Business Line Data and Key Metrics Changes - The Asset Intelligence & Tracking segment, including printing and supplies, grew by 21.4% [13] - The Enterprise Visibility & Mobility segment saw sales increase by 26.8%, driven by strong growth in enterprise mobile computing [13] - Double-digit growth was observed in services and software, as well as in RFID solutions [14] Market Data and Key Metrics Changes - North America sales increased by 28%, with strong growth across mobile computing, printing, services, and supplies [15] - EMEA sales rose by 22%, with solid growth across all sub-regions [15] - APAC returned to growth with a 19% increase, led by strength in China, Australia, New Zealand, and India [15] - Latin America experienced a 31% sales increase, returning to growth in all sub-regions [15] Company Strategy and Development Direction - The company is focused on advancing its Enterprise Asset Intelligence vision, leveraging its product portfolio to help customers digitize and automate operations [25][26] - There is a strong emphasis on integrating Reflexis' workforce management solutions with existing software applications to optimize frontline worker experiences [28] - The launch of the ZSB Series printer targets the small business market, entering a $400 million market with recurring revenue potential [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in growth prospects due to strong demand across all business dimensions and a robust sales pipeline [19][20] - The company raised its full-year 2021 adjusted net sales growth outlook to between 18% and 22% [22] - Management acknowledged supply chain constraints but maintained confidence in achieving the sales outlook [78] Other Important Information - The company is experiencing logistical bottlenecks and semiconductor shortages, which have led to increased freight costs [75][78] - There are no imminent plans for broad price increases despite supply chain challenges [79] Q&A Session Summary Question: Is the current order strength reflective of underlying demand or pent-up demand? - Management indicated that while there is some pent-up demand, strong secular trends are driving broad-based demand across all regions and verticals [47][48] Question: Which geography or end market has improved the most? - North America was highlighted as particularly strong, with double-digit growth across all product categories [55][56] Question: What are the anticipated headwinds for the full year? - Management identified logistical bottlenecks and semiconductor shortages as key challenges but expressed confidence in the sales outlook [74][78] Question: How is the competitive environment perceived? - Management is confident in their competitive positioning, noting that they have gained market share during the pandemic [128]