Zebra(US:ZBRA)2026-02-17 14:02Summary of Zebra Technologies Conference Call Company Overview - Company: Zebra Technologies (NasdaqGS: ZBRA) - Event: Citi's 2026 Global Industrial Tech and Mobility Conference - Date: February 17, 2026 Key Industry Insights - Zebra Technologies operates at the intersection of automation, digitization, on-demand economy, and AI, focusing on enhancing efficiency and productivity for customers across various sectors [3][4] - The company reported a 6% organic growth in 2025 and anticipates continued momentum into 2026, despite a conservative organic growth guidance of approximately 4% for 2026, which is below the long-term average of 5%-7% [4][5] Financial Performance - 2025 Highlights: - 6% organic growth - 17% EPS growth - Strong free cash flow [3][5] - 2026 Guidance: - Organic growth expected to be around 4% - Pricing actions from the previous year contributed approximately 0.5 points to growth [6][7] Market Segments and Growth Drivers - Manufacturing: - Experienced high single-digit growth in Q4 2025, indicating a recovery in demand [5][9] - Investments in e-commerce and inside sales capabilities are aimed at small and mid-sized manufacturers [9][10] - Healthcare, Retail, and E-commerce: - These sectors are showing relative strength and are expected to contribute positively to growth in 2026 [8][9] - Transportation and Logistics (TNL): - Slight decline in Q4 2025, but long-term opportunities exist due to AI capabilities enhancing delivery processes [13][15] AI and Technology Integration - Zebra is positioning itself as a leading AI provider for frontline workers, integrating AI across its portfolio to enhance asset visibility and operational efficiency [17][18] - The company is developing an AI suite of products aimed at improving productivity and collaboration among frontline workers [18][19] - AI is seen as a differentiating factor in customer investment decisions, with ongoing efforts to ensure that AI applications are tailored to specific customer needs [24][25] Challenges and Risks - Lingering uncertainties include inflation, interest rates, and consumer behavior, which could impact growth [6][8] - The company is cautious about the potential disruption from new AI entrants and the need for flexibility in automation solutions [24][27] Cost Management and R&D - Zebra aims for a 50 basis points annualized margin expansion, driven by operating leverage and productivity initiatives [30][31] - The exit from the robotics business is expected to reduce R&D expenses by $20 million annually, allowing for a focus on higher-growth areas like RFID, machine vision, and AI [32][33] Strategic Acquisitions and Portfolio Management - The acquisition of Elo is expected to create synergies and enhance the product offering, with confirmed synergies of $10 million already identified [62][64] - The company is focused on M&A opportunities that align with its existing portfolio and drive growth in automation technologies [71][72] Emerging Trends - The need for automation and digitization remains critical as companies seek to enhance productivity and adapt to changing consumer behaviors [74][75] - There is a significant opportunity in connecting frontline workers digitally, as 50% of them are still not digitally connected [27][28] Conclusion Zebra Technologies is navigating a complex landscape with a focus on leveraging AI and automation to drive growth across various sectors. While facing challenges such as inflation and competition, the company is strategically positioned to capitalize on emerging trends and enhance its product offerings through targeted investments and acquisitions.