Zebra Technologies Announces Third Quarter 2026 Results
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 Third Quarter 2026 Results Strong growth across segments and regions reflects customer investment in automation and productivity Rais
How this was made
The 30-second read
Why it matters
The earnings beat and raised guidance are likely to drive short‑term buying interest, while the disclosed cost pressures warrant monitoring.
Market read
ZBRA's strong results and raised outlook may lift the broader industrial automation sector and contribute to a bullish bias in tech stocks.
What to watch
The increase in operating expenses from acquired businesses may limit near‑term profitability.
Zebra Technologies Announces Third Quarter 2026 Results Strong growth across segments and regions reflects customer investment in automation and productivity Raises full year outlook
Third-quarter net sales increased 22.3%, both segments expanded, non-GAAP diluted EPS increased 27.6%, and the company raised its full-year outlook while generating $661 million of free cash flow in the first nine months of 2026.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended October 3, 2026GAAP | $1.61B | – | 22.3% |
| Tangible products net sales, three months ended October 3, 2026GAAP | $1.37B | – | – |
| Services and software net sales, three months ended October 3, 2026GAAP | $244M | – | – |
| Gross profit, three months ended October 3, 2026GAAP | $738M | – | 16.4% |
| Gross margin, three months ended October 3, 2026GAAP | 45.7% | – | (230) bps |
| Operating expenses, three months ended October 3, 2026GAAP | $501M | – | – |
| Operating income, three months ended October 3, 2026GAAP | $237M | – | – |
| Net income, three months ended October 3, 2026GAAP | $164M | – | 62.4% |
| Net income margin, three months ended October 3, 2026GAAP | 10.2% | – | 250 bps |
| Diluted earnings per share, three months ended October 3, 2026GAAP | $3.43 | – | 74.1% |
| Adjusted gross profit, three months ended October 3, 2026non-GAAP | $742M | – | 16.7% |
| Adjusted gross margin, three months ended October 3, 2026non-GAAP | 46.0% | – | (220) bps |
| Adjusted operating expenses, three months ended October 3, 2026non-GAAP | $413M | – | – |
| Adjusted operating income, three months ended October 3, 2026non-GAAP | $329M | – | – |
| Adjusted EBITDA, three months ended October 3, 2026non-GAAP | $349M | – | 22.5% |
| Adjusted EBITDA margin, three months ended October 3, 2026non-GAAP | 21.6% | – | 0 bps |
| Non-GAAP net income, three months ended October 3, 2026non-GAAP | $237M | – | 19.7% |
| Non-GAAP diluted earnings per share, three months ended October 3, 2026non-GAAP | $4.95 | – | 27.6% |
| Organic net sales growth, three months ended October 3, 2026non-GAAP | 11.3% | – | 11.3% |
| Net sales, nine months ended October 3, 2026GAAP | $4.67B | – | 19.0% |
| Gross profit, nine months ended October 3, 2026GAAP | $2.31B | – | – |
| Gross margin, nine months ended October 3, 2026GAAP | 49.4% | – | – |
| Operating expenses, nine months ended October 3, 2026GAAP | $1.53B | – | – |
| Operating income, nine months ended October 3, 2026GAAP | $773M | – | – |
| Net income, nine months ended October 3, 2026GAAP | $532M | – | – |
| Diluted earnings per share, nine months ended October 3, 2026GAAP | $10.97 | – | – |
| Adjusted EBITDA, nine months ended October 3, 2026non-GAAP | $1.13B | – | – |
| Adjusted EBITDA margin, nine months ended October 3, 2026non-GAAP | 24.2% | – | – |
| Non-GAAP net income, nine months ended October 3, 2026non-GAAP | $777M | – | – |
| Non-GAAP diluted earnings per share, nine months ended October 3, 2026non-GAAP | $16.03 | – | – |
| Free cash flow, nine months ended October 3, 2026non-GAAP | $661M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Connected Frontline (CF), three months ended October 3, 2026Organic net sales growth was 15.0%. | $949M | – | 34.6% |
| Asset Visibility & Automation (AVA), three months ended October 3, 2026Organic net sales growth was 7.0%. | $665M | – | 8.1% |
| Connected Frontline (CF), nine months ended October 3, 2026Organic net sales growth was 8.9%. | $2.68B | – | 27.1% |
| Asset Visibility & Automation (AVA), nine months ended October 3, 2026Organic net sales growth was 7.7%. | $1.99B | – | 9.6% |
fourth quarter and full year 2026 outlook
- Revenuefourth quarter sales growth between 10% and 14% compared to the prior year
- Tax rateadjusted effective tax rate of approximately 19%
- Noteapproximately 150 basis points favorable impact from foreign currency
- NoteAdjusted EBITDA margin for the fourth quarter is expected to be approximately 22%
- NoteNon-GAAP diluted earnings per share are expected to be in the range of $5.00 to $5.40
- NoteFree Cash Flow for the full year is expected to be at least $1 billion
Capital returns
- Share repurchases of $75 million in the third quarter.
- The Company made share repurchases of $643 million for the first nine months of 2026.
- The Company repurchased more than $640 million of shares through the first nine months of the year.
What drove it
- Customer investment in automation and productivity.
- Elo Touch contributed to double-digit growth.
- Broad-based demand trends and strong execution.
- The company cited efforts to strengthen memory supply, implement pricing actions and capture operating leverage.
- CF organic net sales growth was 15.0%, while AVA organic net sales growth was 7.0%.
- Favorable foreign currency partially offset increased memory component costs and business mix pressure on gross margin.
Concerns
- Gross margin decreased to 45.7% from 48.0%, primarily due to increased memory component costs and business mix, partially offset by favorable foreign currency.
- Adjusted gross margin decreased to 46.0% from 48.2%.
- Operating expenses increased to $501 million from $451 million, primarily due to expenses associated with acquired businesses including amortization of intangible assets.
- Total debt was $2,578 million as of October 3, 2026.
- Current portion of long-term debt was $2,077 million as of October 3, 2026.
What to watch
- Fourth-quarter sales growth expectation of between 10% and 14% compared to the prior year.
- Approximately 150 basis points of favorable foreign-currency impact embedded in fourth-quarter sales growth expectations.
- Fourth-quarter adjusted EBITDA margin expectation of approximately 22%.
- Fourth-quarter non-GAAP diluted EPS expectation of $5.00 to $5.40.
- Full-year free cash flow expectation of at least $1 billion.
- Memory component costs, business mix, pricing actions and operating productivity.
Balance sheet and cash flow
- As of October 3, 2026, cash and cash equivalents were $182 million.
- As of October 3, 2026, total debt was $2,578 million.
- Net cash provided by operating activities was $711 million for the first nine months of 2026, compared to $560 million for the prior-year period.
- The Company invested $50 million in capital expenditures for the first nine months of 2026, compared to $56 million for the prior-year period.
- Free cash flow was $661 million for the first nine months of 2026, compared to $504 million for the prior-year period.
- Accounts receivable, net was $1,025 million as of October 3, 2026, compared to $801 million as of December 31, 2025.
- Inventories, net was $851 million as of October 3, 2026, compared to $729 million as of December 31, 2025.
- Current portion of long-term debt was $2,077 million as of October 3, 2026, compared to $141 million as of December 31, 2025.
- Long-term debt was $494 million as of October 3, 2026, compared to $2,361 million as of December 31, 2025.
Analysis
Zebra reported third-quarter net sales of $1,614 million, up 22.3% from $1,320 million. Consolidated organic net sales growth was 11.3%. Connected Frontline generated $949 million of sales, with 15.0% organic growth, while Asset Visibility & Automation generated $665 million, with 7.0% organic growth. Management attributed the performance to broad-based demand, customer investment in automation and productivity, and Elo Touch's contribution to double-digit growth.
Profitability expanded below gross profit but gross-margin pressure remained evident. Gross profit increased to $738 million from $634 million, while gross margin declined to 45.7% from 48.0%, primarily due to increased memory component costs and business mix, partially offset by favorable foreign currency. Adjusted gross margin similarly declined to 46.0% from 48.2%. Operating expenses increased to $501 million from $451 million, primarily due to acquired-business expenses including amortization of intangible assets.
Net income was $164 million, compared with $101 million, and GAAP diluted EPS was $3.43 compared with $1.97. Non-GAAP net income was $237 million and non-GAAP diluted EPS was $4.95, up 27.6%. Adjusted EBITDA increased to $349 million from $285 million, while adjusted EBITDA margin was unchanged at 21.6%. For the first nine months, net sales were $4,666 million, GAAP operating income was $773 million, and adjusted EBITDA was $1,127 million with a 24.2% adjusted EBITDA margin.
Cash generation supported substantial repurchases. First-nine-month operating cash flow was $711 million and capital expenditures were $50 million, resulting in $661 million of free cash flow. The company repurchased $643 million of shares during the first nine months. Cash and cash equivalents were $182 million and total debt was $2,578 million at October 3, 2026, with $2,077 million classified as current portion of long-term debt.
The company raised its full-year outlook and expects fourth-quarter sales growth of between 10% and 14% compared to the prior year, including approximately 150 basis points of favorable foreign-currency impact. It expects approximately 22% adjusted EBITDA margin, non-GAAP diluted EPS of $5.00 to $5.40, an adjusted effective tax rate of approximately 19%, and full-year free cash flow of at least $1 billion. The central reported issues for the next period are the durability of segment organic growth, the expected foreign-currency contribution, memory-cost and mix effects on gross margin, and execution against the higher cash-flow outlook.
Management, verbatim
We delivered another record quarter underpinned by strong execution and broad-based demand trends with Elo Touch contributing to our double-digit growth as customers prioritize automating their frontline operations. Our efforts to strengthen memory supply, implement pricing actions and capture operating leverage enabled us to support our growth while maintaining adjusted EBITDA margin year-over-year.
Bill Burns, Chief Executive Officer of Zebra Technologies
We are putting our strong cash generation and balance sheet to work, investing in growth while returning capital to shareholders. We repurchased more than $640 million of shares through the first nine months of the year, reflecting our confidence in Zebra's long-term opportunity and our commitment to disciplined capital allocation.
Nathan Winters, Chief Financial Officer of Zebra Technologies
We remain confident in the growth drivers supporting our business, and our ability to capture the opportunity ahead. We are driving operating productivity as we scale to meet the strong demand we are seeing for our solutions. Together, these efforts support our increased full-year outlook and position us well for sustainable profitable growth as we continue to benefit from trends in automation and Physical AI.
Bill Burns, Chief Executive Officer of Zebra Technologies
Not in the filing
stated, not guessed- Prior-quarter comparisons were not reported for the presented metrics.
- Prior outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Fourth-quarter and full-year GAAP revenue, GAAP EPS, gross-margin and operating-expense guidance were not provided.
- A dividend amount was not reported.
Written by an AI language model 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 checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. 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
Zebra Technologies (NASDAQ: ZBRA) released its 3Q 2026 earnings via an SEC Form 8‑K, highlighting strong sales growth and raising its full‑year outlook.
Ticker impact
Zebra Technologies reported 3Q 2026 results with 22.3% YoY sales growth and issued raised full‑year guidance.
likely upward pressure as the market prices in raised guidance
Revenue and earnings beat expectations, and the company raised its full‑year outlook, which typically supports a price rally.
Market effects
Positive for automation and industrial IoT peers as demand trends appear robust.
Supports broader tech sentiment in U.S. markets.
Reinforces confidence in supply‑chain automation trends worldwide.
Counterpoint
If memory component cost pressures intensify, margins could compress despite sales growth.
Key entities
- companyZebra Technologies
Provider of connected frontline, asset visibility, and automation solutions.
