Q2 2025 Performance - Zebra Technologies delivered better-than-expected results, driven by demand recovery, lower U S import tariff expenses, operating leverage, and strong execution[8, 11] - Net sales reached $1293 million, reflecting a 6 3% organic net sales growth, with strong performance in North America, Asia Pacific, and Latin America[11, 15] - Adjusted EBITDA margin increased by 10bps to 20 6%, despite a 70bps decline in adjusted gross margin primarily due to U S import tariffs[11, 15] - Non-GAAP diluted EPS increased by 13 5% to $3 61[11, 15] Regional and Segment Performance - North America experienced an 8% organic net sales growth, while Asia Pacific grew by 20% and Latin America by 11%[17] - EMEA saw a (1)% decline in regional organic net sales growth[17] - Asset Intelligence & Tracking segment grew by 5 8%, and Enterprise Visibility & Mobility grew by 6 5%[17] Financial Position and Outlook - The company has a strong liquidity position with $872 million in cash and cash equivalents and a $1 5 billion revolving credit facility capacity[19] - Free cash flow was $288 million year-to-date, $101 million lower year-over-year due to higher incentive compensation payments and timing of inventory purchases[19] - The company expects approximately $30 million gross profit net impact for FY25 from U S import tariffs, improved from $70 million as of prior guidance[20] - The full-year outlook for sales growth is between 5% and 7%, with an adjusted EBITDA margin between 21% and 22%, and non-GAAP diluted EPS between $15 25 and $15 75[22]

Financial Performance - Net sales for Q2 2025 were $1,293 million, a year-over-year increase of 6.2% from $1,217 million in Q2 2024[3] - Gross profit for Q2 2025 was $616 million, compared to $589 million in the prior year, with a gross margin of 47.6%, down from 48.4%[5] - Net income for Q2 2025 was $112 million, or $2.19 per diluted share, compared to $113 million, or $2.17 per diluted share, in the prior year[7] - Non-GAAP net income increased to $186 million for Q2 2025, or $3.61 per diluted share, compared to $165 million, or $3.18 per diluted share, for the prior year[7] - Adjusted EBITDA for Q2 2025 was $267 million, representing an adjusted EBITDA margin of 20.6%, compared to $250 million and 20.5% in the prior year[8] - Operating income for the three months ended June 28, 2025, was $183 million, compared to $167 million for the same period in 2024, indicating a 9.6% year-over-year growth[29] - Net income for the six months ended June 28, 2025, was $248 million, an increase from $228 million in the same period of 2024, representing a 8.8% growth[31] - Basic GAAP earnings per share for the three months ended June 28, 2025, was $2.20, compared to $2.19 for the same period in 2024, a marginal increase of 0.5%[39] Sales Growth - The company expects Q3 2025 sales growth between 2% and 6%, including a favorable impact of approximately 30 basis points from the Photoneo acquisition[10] - Full year 2025 sales growth is now expected to be between 5% and 7%, including approximately 50 basis points of favorability from the Photoneo acquisition and foreign currency translation[12] - Total net sales for the three months ended June 28, 2025, reached $1,293 million, a 6.2% increase compared to $1,217 million for the same period in 2024[29] - Consolidated organic net sales growth for the six months ended June 28, 2025, was 9.0%, compared to 8.7% for the same period in 2024[33] - Reported net sales for the three months ended June 28, 2025, were $1,293 million, an increase from $1,217 million for the same period in 2024, representing a growth of 6.2%[36] Profitability Metrics - Adjusted EBITDA margin for the full year is expected to be between 21% and 22%, including an impact of approximately $30 million in U.S. import tariff expense[13] - Adjusted gross profit for the six months ended June 28, 2025, was $1,268 million, compared to $1,156 million for the same period in 2024, reflecting a year-over-year increase of 9.7%[36] - Adjusted EBITDA for the six months ended June 28, 2025, reached $559 million, compared to $484 million for the same period in 2024, marking a 15.5% increase[42] - Adjusted gross margin for the six months ended June 28, 2025, was 48.8%, compared to 48.3% in the same period last year, indicating a slight improvement[36] Cash Flow and Assets - Free cash flow for the full year 2025 is now expected to exceed $800 million[14] - Free cash flow for the six months ended June 28, 2025, was $288 million, down from $389 million in the same period last year, a decrease of 26%[44] - Cash and cash equivalents at the end of the period on June 28, 2025, were $872 million, a decrease from $901 million at the beginning of the period[31] - The company experienced a net cash provided by operating activities of $325 million for the six months ended June 28, 2025, down from $413 million in the same period last year[44] Liabilities and Acquisitions - Total liabilities as of June 28, 2025, were $4,321 million, a slight decrease from $4,382 million as of December 31, 2024[27] - The company announced an agreement to acquire Elo Touch Solutions, Inc. for $1.3 billion, expected to close in 2025[15] - The company incurred $62 million in acquisition costs during the six months ended June 28, 2025[31] - Total current assets as of June 28, 2025, were $2,334 million, down from $2,440 million as of December 31, 2024[27]

Core Viewpoint - Zebra Technologies Corporation (ZBRA) is expected to report second-quarter 2025 results on August 5, with projected revenues of $1.28 billion, reflecting a 5% year-over-year growth, and adjusted earnings of $3.31 per share, indicating a 4.1% increase from the previous year [1][9]. Revenue Estimates - The Zacks Consensus Estimate for revenues is $1.28 billion, which indicates a growth of 5% from the year-ago quarter's figure [1]. - The Enterprise Visibility & Mobility segment is expected to generate revenues of $853 million, reflecting a 4% increase from the previous year [3]. - The Asset Intelligence and Tracking segment's revenues are projected to be $430 million, indicating an 8.3% growth from the year-ago number [4]. Earnings Performance - The consensus estimate for adjusted earnings has remained stable over the past 60 days, with an impressive earnings surprise history, outperforming the consensus estimate in each of the last four quarters, averaging an 8.4% surprise [2]. - In the last reported quarter, Zebra Technologies delivered an earnings surprise of 11.7% [2]. Segment Performance Drivers - The Enterprise Visibility & Mobility segment's performance is driven by strong demand for mobile computing products and data capture solutions, along with increased sales of services and software due to retail software wins [3]. - The Asset Intelligence and Tracking segment is expected to benefit from solid demand for printing solutions and RFID products [4]. Strategic Acquisitions - Zebra Technologies is focused on acquisitions to expand its product offerings and customer base, such as the acquisition of Photoneo in March 2025, enhancing its portfolio in 3D machine vision solutions [5]. Cost and Currency Challenges - The company's performance has been negatively impacted by high costs and expenses, with increased raw material costs expected to affect the bottom line [6]. - A stronger U.S. dollar is likely to have hurt Zebra Technologies' overseas business due to its extensive geographic presence [6]. Earnings Prediction Model - The current model does not predict an earnings beat for ZBRA, as the Earnings ESP is 0.00%, with both the Zacks Consensus Estimate and the Most Accurate Estimate at $3.31 [7][8]. Zacks Rank - Zebra Technologies currently holds a Zacks Rank of 3, indicating a hold position [10].

Group 1 - Zebra Technologies (NASDAQ: ZBRA) is a well-known company in the B2B sector, yet it lacks excitement in the stock market [1] - The company operates in a niche market that is not widely covered by analysts, indicating potential for contrarian investment opportunities [1] - The current market sentiment towards Zebra Technologies is lukewarm, despite its established presence and recognition in the industry [1]

Core Insights - Zebra Technologies Corporation (ZBRA) is positioned to benefit from strong performance across its business segments, operational excellence, and strategic acquisitions, focusing on growth opportunities and long-term market positioning [1] Business Performance - The Enterprise Visibility & Mobility segment has seen an 8.1% year-over-year revenue increase in Q1 2025, driven by higher sales of mobile computing and data capture solutions, along with increased service and software sales [2] - The Asset Intelligence & Tracking segment experienced an 18.4% year-over-year sales increase in Q1 2025, supported by solid demand for printing solutions and RFID products [3] - For Q2 2025, the company anticipates net sales growth of 4-7% compared to the same quarter last year, reflecting overall business strength [3] Acquisition Strategy - Zebra Technologies acquired Photoneo in March 2025, enhancing its 3D machine vision solutions by integrating Photoneo's technology with its existing capabilities [4] - The acquisition of Matrox Imaging in June 2022 has allowed Zebra to strengthen its fixed industrial scanning and machine vision portfolio [5] Stock Performance and Shareholder Returns - ZBRA's stock has increased by 44.6% over the past three months, outperforming the industry average growth of 42% [8] - The company has repurchased shares worth $125 million in Q1 2025, compared to $47 million in Q1 2024, with a remaining buyback capacity of $721 million from a $1 billion program authorized in May 2022 [9] - Free cash flow for Q1 2025 reached $158 million, marking a 42.3% year-over-year increase, supporting shareholder-friendly policies [9] Earnings Estimates - The Zacks Consensus Estimate for ZBRA's 2025 earnings is $14.51 per share, reflecting a 7.3% year-over-year increase, while the estimate for 2026 earnings is $16.41 per share, indicating a 13.1% increase from the previous year [10]

Group 1 - The "Trump Tariff Losers" index decreased by 0.20% on June 30, closing at 98.34 points, with a cumulative increase of 3.86% in June [1] - In the first half of the year, component stocks such as Coach, Hasbro, and Dollar Tree saw increases ranging from 32.16% to 35.59%, while 3M and Mattel increased by at least 11.22% [2] - Companies like Best Buy, Zebra Technologies, Harley-Davidson, FND, FBIN, and Polaris experienced declines of at least 19.67%, with AEO, Carter's, CRI, Newell NWL, and Dex Outdoor dropping by at least 41.16% [2] Group 2 - Helen of Troy (HELE) saw a significant decline of 52.57%, while the energy storage company Fluence Energy dropped by 57.75% [2]

Group 1 - The article discusses the positions of various analysts and their affiliations with specific stocks, particularly highlighting Zebra Technologies [1] - It mentions that The Motley Fool has positions in and recommends Zebra Technologies, indicating a positive outlook on the company [1] - The article also notes that one analyst has short positions on Zebra Technologies, suggesting a mixed sentiment among analysts regarding the stock [1]

Core Insights - Zebra Technologies Corporation (ZBRA) has underperformed in operational performance, leading to a Zacks Rank of 5 (Strong Sell) with a stock loss of 3.2% over the past year, consistent with industry trends [1] Rising Costs - ZBRA experienced an 8.3% year-over-year increase in the cost of sales in Q1 2025, primarily due to high raw material costs [4] - Selling and marketing expenses also rose by 8.8% year-over-year, indicating escalating operational costs that may negatively impact profitability in the future [4] High Debt Level - The company's long-term debt has grown at a CAGR of 18.9% over the past five years, reaching $2.10 billion by the end of Q1 2025, a slight increase from $2.09 billion at the end of 2024 [5] - Interest expenses surged by 35.3% year-over-year in Q1, totaling $23 million, raising concerns about the sustainability of its financial structure [5][8] - ZBRA completed a $500 million senior notes offering with a fixed interest rate of 6.5%, which, while aimed at reducing term loan obligations, will add to the existing debt burden [6] Forex Woes - The company operates in multiple regions, exposing it to geopolitical risks, including conflicts in Russia & Ukraine and tensions in U.S.-China relations, which could adversely affect business operations [7] - A stronger U.S. dollar poses additional challenges, potentially impacting ZBRA's performance in overseas markets [7][8]

Core Insights - Zebra Technologies Corporation (ZBRA) has launched the EM45 Enterprise Mobile, an Android-based handheld mobile computer designed for various industries [1][7] - The device supports multiple user profiles and features an AI-capable Qualcomm processor, enhancing its functionality for professional and personal use [2][7] - The EM45 is equipped with a high-capacity battery that provides up to 25 hours of uninterrupted power, aimed at improving productivity for frontline workers [3] Product Features - The EM45 Enterprise Mobile includes one-touch push-to-talk communication and three actionable buttons for quick barcode scanning and emergency alerts [2] - It is designed for retail, logistics, and healthcare sectors, facilitating tasks such as reading digital wallets, scanning products, accepting payments, and tracking [4][7] - The device features a 50MP camera for capturing clear photos and videos, as well as scanning barcodes efficiently [4] Financial Performance - Zebra Technologies is experiencing increased sales in mobile computing and data capture solutions, particularly within the Enterprise Visibility & Mobility segment [5] - Higher sales of RFID products are positively impacting the Asset Intelligence & Tracking segment, although the company faces challenges from increased costs and foreign currency headwinds [5] - ZBRA's stock has declined by 25.1% year-to-date, aligning with industry trends, and currently holds a Zacks Rank of 4 (Sell) [6]

Summary of Zebra Technologies (ZBRA) FY Conference Call - June 04, 2025 Company Overview - **Company**: Zebra Technologies - **Industry**: Industrial technology, focusing on barcode printers, mobile computers, RFID, robotics, and machine vision [3][6] Core Points and Arguments - **Investment Opportunity**: Zebra is integral to customers' digitization and automation efforts, enhancing efficiency and workflow automation [6][7] - **Market Leadership**: Zebra is the market leader in barcode scanning and mobile computing, with a strong portfolio that includes machine vision, retail software, and ruggedized tablets [7][9] - **Financial Performance**: - Revenue in 2024 was over $3 billion for enterprise visibility and mobility, and over $1.5 billion for asset tracking [9] - Experienced growth of 20% in 2021 and sustained growth in 2022, with a recovery to 8% growth in 2024 after a pause in 2023 [11][12] - Generated over $1 billion in cash over the last four quarters, with the highest gross margin in ten years [13] - **Vertical Markets**: - Retail: Focus on enhancing customer experience and optimizing inventory [14] - Transportation and Logistics (T&L): Emphasis on productivity and visibility [15] - Manufacturing: Lagging recovery but opportunities exist for market share expansion [16] - Healthcare: Solutions aimed at improving workflows and productivity [17] Additional Important Content - **R&D Investment**: Zebra invests about 10% of sales in R&D, focusing on emerging technologies and maintaining leadership in core markets [19][20] - **M&A Strategy**: Active in expanding into adjacent markets through M&A, ensuring integration into core operations [21] - **Market Trends**: The company is positioned to benefit from megatrends such as the on-demand economy and intelligent automation [22] - **Financial Framework**: Focus on profitable growth, disciplined financial management, and capital allocation strategies [24][26] - **Supply Chain Diversification**: Reduced reliance on China from 85% to less than 50%, with plans to further diversify [40][41] - **Pricing Strategy**: Implemented a 10% price increase in April, expected to contribute approximately $50 million in revenue for the year [44][45] - **RFID Growth**: RFID business approaching $200 million, experiencing double-digit growth, driven by improved chip costs and ROI [51][53] Conclusion - Zebra Technologies is well-positioned for continued growth, leveraging its strong market position, innovative solutions, and strategic investments in technology and supply chain diversification. The company aims for 5-7% growth over the cycle, with a focus on margin expansion and maintaining a robust cash flow profile [22][23][27]