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FY2026 Q2
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Zebra Technologies Corporation earnings call
Buzzberg read
Strong demand but memory constraints temper guidance
Zebra Technologies delivered a record quarter, exceeding guidance due to its ability to mitigate memory supply constraints and raise prices. Management raised full-year guidance, reflecting strong demand but noting that memory remains a key variable for growth. Record Q2 results with 9.2% organic growth, exceeding the high end of guidance, driven by strength in manufacturing, healthcare, and pricing power around memory costs.
Buzzberg read Strong demand but memory constraints temper guidance Zebra Technologies delivered a record quarter, exceeding guidance due to its ability to mitigate memory supply constraints and raise prices. Management raised full-year guidance, reflecting strong demand but noting that memory remains a key variable for growth. Record Q2 results with 9.2% organic growth, exceeding the high end of guidance, driven by strength in manufacturing, healthcare, and pricing power around memory costs. Read full analysisCollapse analysis
Zebra Technologies delivered a record quarter, exceeding guidance due to its ability to mitigate memory supply constraints and raise prices. Management raised full-year guidance, reflecting strong demand but noting that memory remains a key variable for growth. Record Q2 results with 9.2% organic growth, exceeding the high end of guidance, driven by strength in manufacturing, healthcare, and pricing power around memory costs.
- Management raised full-year sales growth to 14-16% and EPS to $20.75-$21.25.
- Memory remains a key variable; demand is at high end, but guidance is based on moderate supply constraints.
- Management significantly increased pricing expectations to $90 million to offset the $120 million memory cost headwind.
ASSET_VISIBILITY Revenue growth11.4%Reported
CONNECTED_FRONTLINE Revenue growth7.5%Reported
Revenue$1.557B+4% QoQ
EPS$6.35+34% QoQ
6 grounded callouts
What matters now
The highest-signal changes from the call.
Pricing
Price increases raised to $90 million for memory mitigation
Demand
Robust multi-year T&L deployment pipeline into 2027
Show 3 more callouts
AI
AI-driven devices and wearables gaining traction
Demand
Machine vision outperforming due to manufacturing strength
Capital Allocation
Strong share buyback momentum with continued activity
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| ASSET_VISIBILITY Revenue growth | 11.4% | Reported |
| CONNECTED_FRONTLINE Revenue growth | 7.5% | Reported |
| Revenue | $1.557B | +4% QoQ |
| EPS | $6.35 | +34% QoQ |
| Gross margin | 52.99% | Reported |
| Operating margin | 20.62% | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $20.75–$21.25 | $21.00 | Raised |
| EPS | FY2026 Q3 | $4.70–$4.90 | $4.80 | Maintained |
| Free cash flow | FY2026 | $1B | $1B | Maintained |
| Gross margin | FY2026 | $0 | $0 | Raised |
AI, capex & demand read
Management read
Confident
Management expressed confidence in the business momentum, raised full-year guidance, and highlighted record results and strong demand, while acknowledging but managing the memory supply challenges.
Management AI read
Management highlighted AI as a key differentiator, with customers leveraging Zebra's AI-powered solutions to improve productivity, visibility, and real-time decision-making. They noted early traction in AI-optimized mobile computers and wearables, and positioned Zebra as the supplier of choice for AI on the frontline.
Investment and capacity
The transcript does not discuss capital expenditure or infrastructure investment in detail, aside from a general commitment to investing in the business to elevate portfolio solutions and returning capital to shareholders.
all 3 named companies below
Companiesreturns since call
Supply chain
Supply chain
Nathan Winters
Zebra's Q2 results exceeded guidance because it was able to secure more memory supply than expected, but its guidance for Q3 and Q4 is still based on the potential for continued supply constraints, not on the strong demand signals. — Memory availability, not end-demand, is the primary variable capping Zebra's sales growth in the near term, indicating the DRAM market remains supply-constrained.
Evidence
“Our guide is really at the midpoint of our guide that really factors in the potential supply constraints that we'd expect to see in second half.”
External signals
Supply-chain alpha · 3returns since call
Zebra's Q2 results exceeded guidance because it was able to secure more memory supply than expected, but its guidance for Q3 and Q4 is still based on the potential for continued supply constraints, not on the strong demand signals.
Zebra was executing price increases on deals before its official announcement, allowing it to realize price benefits in Q2 ahead of schedule and increasing its expected full-year pricing mitigation from memory costs to $90 million from a prior $60 million.
Evidence
“We had previously communicated $60 million expected benefit from pricing. We've increased that now to $90, primarily due to the strength we saw in the second quarter.”
Zebra is qualifying 10 new memory suppliers to get 5-7 qualified suppliers for each primary memory type, suggesting significant volatility in the memory supply chain.
Evidence
“We're working with 10 different new suppliers, and the goal is to have five to seven qualified suppliers for each of our primary memory types.”
Methodology & coverage
Management-only analysis. All 3 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.