ZEBRA TECHNOLOGIES CORP (ZBRA): Results of Operations and Financial Condition
ZEBRA TECHNOLOGIES CORP (ZBRA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Zebra Technologies Corporation 3 Overlook Point Lincolnshire, IL 60069 USA +1 847 634 6700 www.zebra.com Zebra Technologies Announces Second Quarter 2026 Results Delivers record performance with broad-based growth across segments and regions Raises full year outlook
How this was made
The 30-second read
Why it matters
Traders can update valuation and positioning based on the new guidance ranges for sales growth, adjusted EBITDA margin, non-GAAP EPS, and free cash flow, plus the reported profitability and cash flow in Q2.
Market read
A same-day earnings and guidance disclosure with explicit numeric ranges and a free-cash-flow target is a direct catalyst for repricing.
What to watch
IEEPA tariff recoveries contributed to gross margin; if those recoveries normalize, future gross margin and EBITDA margin could face headwinds versus the guided ranges.
Zebra Technologies Announces Second Quarter 2026 Results Delivers record performance with broad-based growth across segments and regions Raises full year outlook
Net sales increased 20.4%, both segments posted organic net sales growth, and GAAP and non-GAAP profitability expanded materially. The company raised its full-year outlook and reported substantial first-half free cash flow and share repurchases.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $1,557 million | – | 20.4% |
| Gross profitGAAP | $825 million | – | 33.9% |
| Gross marginGAAP | 53.0% | – | 540 bps |
| Operating expensesGAAP | $504 million | – | – |
| Net incomeGAAP | $233 million | – | 108.0% |
| Net income marginGAAP | 15.0% | – | 630 bps |
| Net income per diluted shareGAAP | $4.85 | – | 121.5% |
| Adjusted net salesnon-GAAP | $1,557 million | – | 20.4% |
| Organic net sales growthnon-GAAP | 9.2% | – | – |
| Adjusted gross profitnon-GAAP | $830 million | – | 34.1% |
| Adjusted gross marginnon-GAAP | 53.3% | – | 540 bps |
| Adjusted operating expensesnon-GAAP | $419 million | – | – |
| Adjusted EBITDAnon-GAAP | $431 million | – | 61.4% |
| Adjusted EBITDA marginnon-GAAP | 27.7% | – | 710 bps |
| Non-GAAP net incomenon-GAAP | $305 million | – | 64.0% |
| Non-GAAP earnings per diluted sharenon-GAAP | $6.35 | – | 75.9% |
| IEEPA tariff recoveriesother | $73 million | – | – |
| IEEPA tariff recoveries received in the quarterother | $14 million | – | – |
| Net cash provided by operating activitiesGAAP | $387 million | – | – |
| Capital expendituresother | $26 million | – | – |
| Free cash flownon-GAAP | $361 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Connected Frontline (CF)Consolidated organic net sales increased 9.2% year-over-year, with a 7.5% increase in the CF segment. | $903 million | – | 7.5% |
| Asset Visibility & Automation (AVA)Consolidated organic net sales increased 9.2% year-over-year, with an 11.4% increase in the AVA segment. | $654 million | – | 11.4% |
Third Quarter 2026; Full Year 2026 outlook
- RevenueThird quarter sales growth between 17% and 20% compared to the prior year; full year sales growth between 14% and 16% compared to the prior year.
- Tax rateapproximately 19%
- NoteThird quarter sales growth expectation includes approximately 10.5 points of favorable impact from business acquisitions, dispositions and foreign currency.
- NoteAdjusted EBITDA margin for the third quarter is expected to be approximately 22%.
- NoteNon-GAAP diluted earnings per share for the third quarter is expected to be in the range of $4.70 to $4.90.
- NoteFull year sales growth expectation includes approximately 8 points of favorable impact from business acquisitions, dispositions and foreign currency.
- NoteAdjusted EBITDA margin for the full year is expected to be between 23.5% and 24.0%.
- NoteNon-GAAP diluted earnings per share for the full year is expected to be in the range of $20.75 to $21.25.
- NoteFree Cash Flow for the full year is expected to be greater than $1 billion.
Capital returns
- Share repurchases of $268 million.
- For the first six months of 2026, the Company also made share repurchases of $568 million.
- Returning more than $560 million to shareholders in the first half of the year through disciplined share repurchases.
What drove it
- Broad-based demand for Zebra's solutions and execution on growth and profitability priorities.
- Consolidated organic net sales increased 9.2% year-over-year.
- Gross margin increased primarily due to IEEPA tariff recoveries and favorable foreign currency exchange.
- The full-year outlook reflects strong demand momentum and progress on productivity and memory supply.
- Third-quarter and full-year sales-growth expectations include favorable impacts from business acquisitions, dispositions and foreign currency.
Concerns
- Operating expenses increased primarily due to expenses associated with acquired businesses including amortization of intangible assets.
- Total debt was $2,776 million as of July 4, 2026.
- Only $14 million of the $73 million in recorded IEEPA tariff recoveries was received in the quarter.
- The company cited potential adverse effects from customer acceptance, competition, supply availability, manufacturing and operating costs, debt, interest rates, foreign exchange rates, customs duties and trade policies.
What to watch
- Third-quarter sales growth between 17% and 20% compared to the prior year.
- Third-quarter adjusted EBITDA margin expected to be approximately 22%.
- Third-quarter non-GAAP diluted earnings per share expected to be in the range of $4.70 to $4.90.
- Full-year sales growth between 14% and 16% compared to the prior year.
- Full-year adjusted EBITDA margin expected to be between 23.5% and 24.0%.
- Full-year Free Cash Flow expected to be greater than $1 billion.
- The contribution from business acquisitions, dispositions and foreign currency to expected sales growth.
Balance sheet and cash flow
- As of July 4, 2026, cash and cash equivalents were $157 million.
- As of July 4, 2026, total debt was $2,776 million.
- For the first six months of 2026, net cash provided by operating activities was $387 million.
- For the first six months of 2026, the Company invested $26 million in capital expenditures.
- For the first six months of 2026, free cash flow was $361 million.
Analysis
Zebra reported a strong second quarter ended July 4, 2026, with GAAP net sales of $1,557 million, up 20.4% from $1,293 million. Consolidated organic net sales growth was 9.2%, indicating that reported growth also reflected acquisition, disposition and foreign-currency effects. Both operating segments contributed: Connected Frontline reported $903 million of net sales and 7.5% organic net sales growth, while Asset Visibility & Automation reported $654 million and 11.4% organic net sales growth.
Profitability expanded substantially. GAAP gross margin increased to 53.0% from 47.6%, primarily due to IEEPA tariff recoveries and favorable foreign currency exchange. Adjusted EBITDA increased to $431 million from $267 million, and adjusted EBITDA margin rose to 27.7% from 20.6%. GAAP net income was $233 million, or $4.85 per diluted share, versus $112 million, or $2.19 per diluted share. Non-GAAP net income was $305 million and non-GAAP diluted EPS was $6.35.
The company recorded $73 million of IEEPA tariff recoveries, of which $14 million was received in the quarter. This item was identified as a primary contributor to the GAAP gross-margin increase and is an important consideration in assessing the composition of the quarter's margin expansion. Operating expenses increased to $504 million from $433 million, primarily because of acquired-business expenses including intangible-asset amortization, while adjusted operating expenses increased to $419 million from $370 million.
Cash generation and capital allocation remained active in the first half. Net cash provided by operating activities was $387 million, capital expenditures were $26 million, and free cash flow was $361 million. The company made $568 million of share repurchases in the first six months of 2026. At July 4, 2026, cash and cash equivalents were $157 million and total debt was $2,776 million.
Management raised its full-year outlook. It expects full-year sales growth between 14% and 16%, adjusted EBITDA margin between 23.5% and 24.0%, non-GAAP diluted EPS of $20.75 to $21.25, and free cash flow greater than $1 billion. The third-quarter outlook calls for sales growth between 17% and 20%, approximately 22% adjusted EBITDA margin, and non-GAAP diluted EPS of $4.70 to $4.90. Management attributes the increased outlook to demand momentum, productivity progress and memory supply, while the sales outlook also includes stated favorable impacts from acquisitions, dispositions and foreign currency.
Management, verbatim
Our record results reflect broad-based demand for our innovative solutions and excellent execution on our growth and profitability priorities. We delivered for our customers by leveraging our long-standing supplier relationships to support our growth,
Bill Burns, Chief Executive Officer of Zebra Technologies
Our strong balance sheet and cash flow continue to provide significant financial flexibility, enabling us to invest for growth while returning more than $560 million to shareholders in the first half of the year through disciplined share repurchases,
Nathan Winters, Chief Financial Officer of Zebra Technologies
Strong demand momentum and progress on productivity and memory supply supports our significantly increased outlook for the full year. We are focused on driving sustainable growth across our business with our innovative portfolio of solutions, as we continue to benefit from trends in automation and Physical AI.
Bill Burns
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported financial metrics.
- GAAP operating income.
- Adjusted operating income.
- GAAP and non-GAAP effective tax rates for the reported quarter.
- Diluted weighted-average share count.
- Quarterly operating cash flow, capital expenditures and free cash flow.
- Prior-year cash, debt, operating cash flow, capital expenditures and free cash flow comparisons.
- Dividend declaration or payment details.
- Prior outlook figures needed to compare reported results with prior guidance.
- Geographic revenue metrics.
- Segment GAAP net-sales growth percentages.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Zebra Technologies’ SEC Form 8-K (Item 2.02) releasing Q2 2026 results and providing Q3 and full-year 2026 guidance.
Ticker impact
Zebra reported Q2 2026 net sales of $1,557M (+20.4% YoY) and raised full-year outlook, including EPS $20.75 to $21.25 and FCF > $1B.
Likely positive near-term bias as traders re-rate growth and margin trajectory; watch for sensitivity to the outlook assumptions (acquisitions, FX, tariff recoveries).
The filing includes specific quarterly and full-year guidance ranges (sales growth, adjusted EBITDA margin, and non-GAAP EPS) alongside record Q2 profitability metrics and cash flow/FCF expectations.
Market effects
Supports the broader industrial automation and enterprise digitization demand narrative, potentially improving sentiment toward workflow automation peers.
Limited direct regional read-through in the text beyond foreign currency impacts and global segment growth.
Tariff recoveries and FX are explicitly cited, which can influence how global supply-chain and pricing dynamics are modeled for similar hardware/software workflow vendors.
Counterpoint
Guidance upside may be partly driven by acquisitions/dispositions and foreign currency, so organic demand durability and margin quality could be less strong than headline growth suggests.
Key entities
- issuerZebra Technologies Corporation
Reports Q2 2026 results and raises full-year 2026 outlook, including Q3 sales growth and EPS guidance.
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