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FY2026 Q1
Raised
Zebra Technologies Corporation earnings call
Buzzberg read
Raised full-year sales growth guidance to 10-14%
Zebra reported a strong Q1 with an EPS beat, driven by broad-based demand, particularly in manufacturing and machine vision. Management raised full-year revenue and EPS guidance, expressing confidence in mitigating the memory cost headwind through pricing and supply chain actions. The tone was optimistic, highlighting confidence in navigating the current supply environment. Q1 revenue grew ~14% (4.3% organic) to $1.5B, with EPS of $4.75, an 18% increase year-over-year.
Buzzberg read Raised full-year sales growth guidance to 10-14% Zebra reported a strong Q1 with an EPS beat, driven by broad-based demand, particularly in manufacturing and machine vision. Management raised full-year revenue and EPS guidance, expressing confidence in mitigating the memory cost headwind through pricing and supply chain actions. The tone was optimistic, highlighting confidence in navigating the current supply environment. Q1 revenue grew ~14% (4.3% organic) to $1.5B, with EPS of $4.75, an 18% increase year-over-year. Read full analysisCollapse analysis
Zebra reported a strong Q1 with an EPS beat, driven by broad-based demand, particularly in manufacturing and machine vision. Management raised full-year revenue and EPS guidance, expressing confidence in mitigating the memory cost headwind through pricing and supply chain actions. The tone was optimistic, highlighting confidence in navigating the current supply environment. Q1 revenue grew ~14% (4.3% organic) to $1.5B, with EPS of $4.75, an 18% increase year-over-year.
- Adjusted gross margin expanded 80 bps to a record 50.4%, driven by productivity initiatives and favorable mix.
- Full-year revenue growth guidance raised to 10-14% (from ~9-13% prior), and EPS raised to $18.30-$18.70.
- Management says it has 'line of sight' to fully mitigate the ~2-point memory margin headwind for the year.
ASSET_VISIBILITY_AND_AUT Revenue growth4.8%Reported
CONNECTED_FRONTLINE Revenue growth3.8%Reported
Revenue$1.495B+1% QoQ
EPS$4.75+10% QoQ
6 grounded callouts
What matters now
The highest-signal changes from the call.
Supply
Memory cost headwind fully mitigated for the year
Demand
Machine vision sees inflection with double-digit growth
Show 3 more callouts
Buybacks
Share repurchases accelerated to $500 million year-to-date
AI
Introduced new frontline AI proof of delivery capability
Demand
No demand pull-forward observed from price increases
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| ASSET_VISIBILITY_AND_AUT Revenue growth | 4.8% | Reported |
| CONNECTED_FRONTLINE Revenue growth | 3.8% | Reported |
| Revenue | $1.495B | +1% QoQ |
| EPS | $4.75 | +10% QoQ |
| Gross margin | 49.63% | Reported |
| Operating margin | 14.38% | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q2 | $4.20–$4.50 | $4.35 | Guided |
| EPS | FY2026 | $18.30–$18.70 | $18.50 | Raised |
| Free cash flow | FY2026 | $0.9B | $0.9B | Guided |
| Revenue | FY2026 | 10%–14% | 12% | Raised |
AI, capex & demand read
Management read
Confident
Management expressed confidence in navigating memory supply challenges, raised full-year guidance, and highlighted strong demand momentum and successful mitigation strategies.
Management AI read
Management emphasized their unique position as 'the supplier choice of AI for the frontline,' with AI adoption seen as a net positive across their portfolio. They highlighted new AI-driven products like the picture proof of delivery solution and a suite of AI agents for the frontline, while also using AI internally to boost productivity.
all 8 named companies below
Companiesreturns since call
Partners
Partners
Bill Burns
Qualcomm is named as a key ecosystem partner for Zebra's solutions and supply chain.
Evidence
“whether it's our relationship with Qualcomm or Google or the memory suppliers in this case most recently”
Competitors
Competitors
Nathan Winters
No change seen in the pipeline due to the pending Brady/Honeywell transaction, indicating competitive dynamics are stable for now.
Evidence
“we haven't seen any changes related to the second half. As Bill mentioned earlier, the project funnel remains strong”
Supply chain
Supply chain
Nathan Winters
Despite the memory shortage and cost inflation, management has 'line of sight' to fully mitigate the 2-point margin headwind for the year, with the cost trajectory in line with prior guidance and less severe than spot market rates. — This suggests memory suppliers are prioritizing long-term direct customers over spot-market buyers, potentially shielding Zebra and similar partners from the worst of the price spike.
Evidence
“we purchase the vast majority of our memory direct, which has been favorable to the spot market rates that a lot of folks have visibility to”
Supply chain
Nathan Winters
Freight costs, which have risen 20-30% across various lanes, are actually a manageable cost headwind as they represent less than 2% of revenue and have been incorporated into the 2026 guidance. — This indicates freight price increases are being passed through or absorbed without a significant impact on margins, showing pricing power in the supply chain despite logistics cost inflation.
Evidence
“transportation or freight costs are less than 2% of revenue. So you know, right now it's in a range that we can manage and use other levers to offset.”
External signals
Supply-chain alpha · 5returns since call
Despite the memory shortage and cost inflation, management has 'line of sight' to fully mitigate the 2-point margin headwind for the year, with the cost trajectory in line with prior guidance and less severe than spot market rates.
Zebra's Q1 margin outperformance was driven by strength in asset visibility (printing, scanning, machine vision) and manufacturing, areas that did NOT have a price increase, not by the price hike that was expected to impact memory costs.
Evidence
“the upside to our guidance to the high end was driven by asset visibility and the strength in manufacturing, which did not have the price increase”
Zebra saw no pull-forward in demand due to their announced price increases, indicating that customers in this market are not hoarding units ahead of price hikes, which is atypical for a hardware company.
Evidence
“We saw no real pull forward of demand across our customers related to memory or price increases”
Freight costs, which have risen 20-30% across various lanes, are actually a manageable cost headwind as they represent less than 2% of revenue and have been incorporated into the 2026 guidance.
Memory costs are expected to increase sequentially in Q2, a step-up that will temporarily weigh on margins before being offset by price realization later in the year.
Evidence
“you see the step up in, you know, the cost profile from Q1 to Q2, just as we, you know, work through our inventory position coming into the year”
Methodology & coverage
Management-only analysis. All 8 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.