Q4 2025 Zebra Technologies Corp Earnings Call Transcript
Key Points
- Zebra Technologies Corp (ZBRA) delivered fourth quarter results above their outlook, driven by strong execution and positive demand trends.
- The company achieved a 10.6% increase in sales for the fourth quarter, with an adjusted EBITDA margin of 22.1% and non-GAAP diluted earnings per share of $4.33, which was 8% higher than the prior year.
- Zebra Technologies Corp (ZBRA) generated more than $800 million of free cash flow for the full year and closed on accretive acquisitions, demonstrating strong financial performance.
- The company expanded its connected frontline portfolio and customer base through strategic acquisitions, such as Elo Touch and Photo Neo, enhancing its market leadership.
- Zebra Technologies Corp (ZBRA) returned significant value to shareholders with more than $300 million of repurchases in Q4 and nearly $600 million for the full year, with an additional $1 billion authorization for share repurchases.
- Adjusted gross margin declined by 50 basis points to 48.2%, primarily due to lower services and software margins.
- Sales in North America declined by 1% as the company cycled large order activity from the prior year, partly offset by solid run rate demand.
- The company recognized $76 million of restructuring charges related to the exit of its robotics business and productivity initiatives.
- Zebra Technologies Corp (ZBRA) is facing industry-wide price increases for memory components beginning in Q2, which could pose a headwind to gross margins.
- The company experienced higher repair costs due to the aging installed base, impacting service and software margins.
Good day, and welcome to the Fourth Quarter and Full Year 2025 Zebra Technologies Earnings Conference Call. (Operator Instructions)
Please note, this event is being recorded. I would now like to turn the conference over to Mr. Mike Steele, Vice President of Investor Relations. Please go ahead.
Good morning, and welcome to Zebra's fourth quarter earnings conference call. This presentation is being simulcast on our website at investors.zebra.com and will be archived there for at least one year. Our forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties.
Actual results could differ materially, and we refer you to the factors discussed in our SEC filings. During this call, we will reference non-GAAP financial measures as we describe our business performance with reconciliations shown at the end of this slide presentation and in our earnings press release.
Throughout this presentation, unless
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