ZBRA · Zebra Technologies Corporation

Zebra delivered a robust first-quarter 2026 performance, with net sales rising 14.3% year-over-year to $1,495 million—driven by organic growth of 4.3% and contributions from acquisitions and favorable foreign currency. Segment-level strength was broad-based: Connected Frontline (CF) sales grew 20.6% YoY to $825 million (3.8% organic), and Asset Visibility & Automation (AVA) rose 7.4% to $670 million (4.8% organic). Gross margin expanded 30 bps to 49.6% (GAAP), supported by favorable FX, improved product mix, and productivity gains; adjusted gross margin rose further to 50.4%. While GAAP net income dipped marginally to $135 million ($2.72 EPS), Non-GAAP net income surged 13.0% to $235 million ($4.75 EPS), reflecting disciplined cost management and higher adjusted EBITDA ($347M, +18.8% YoY, 23.2% margin). Management attributed the outperformance to durable demand in manufacturing, synergies from the Elo Touch acquisition, and continued leadership in frontline digitization. Critically, Zebra raised its full-year 2026 outlook across all key metrics—sales growth now guided at 10–14% (up from prior range), Non-GAAP EPS at $18.30–$18.70, and free cash flow above $900 million—underscoring confidence in sustained execution amid e-commerce, automation, and Physical AI tailwinds. The $300 million in Q1 share repurchases—repeated from Q4 2025—demonstrates strong balance sheet flexibility (cash: $114M; debt: $2,660M) and reinforces capital return discipline. Forward-looking guidance for Q2 includes 14–17% sales growth (with ~10.5 pts from M&A/FX) and Non-GAAP EPS of $4.20–$4.50, indicating continued momentum into the second half.