Zebra Technologies Q3 Sales Jump 22.3% to $1.61 Billion; Adjusted EPS Rises 27.6% to $4.95 as It Raises Outlook
Zebra Technologies raised its full-year outlook on Tuesday after third-quarter sales jumped 22.3% to a record $1.61 billion and adjusted earnings climbed 27.6% to $4.95 per share, helped by its Elo Touch business and demand for automation.
Net income rose 62.4% to $164 million, or $3.43 per diluted share, from $101 million, or $1.97, a year earlier, according to the earnings release the company filed with an 8-K. Non-GAAP net income increased 19.7% to $237 million.
"We delivered another record quarter underpinned by strong execution and broad-based demand trends with Elo Touch contributing to our double-digit growth as customers prioritize automating their frontline operations," CEO Bill Burns said in the release.
Organic growth in both segments
Stripping out currency and acquisitions, organic net sales rose 11.3%, the company said.
The Connected Frontline segment led the way. Its sales climbed 34.6% to $949 million from $705 million, with organic growth of 15.0%. Asset Visibility & Automation sales rose 8.1% to $665 million, with 7.0% organic growth.
Memory costs pinch margins
Gross margin narrowed to 45.7% from 48.0%, which Zebra attributed primarily to higher memory component costs and business mix, partly offset by favorable foreign currency. Adjusted gross margin slipped to 46.0% from 48.2%.
Even so, adjusted EBITDA rose 22.5% to $349 million, holding its margin flat at 21.6%. Burns credited efforts "to strengthen memory supply, implement pricing actions and capture operating leverage."
Operating expenses rose to $501 million from $451 million, mainly because of costs tied to acquired businesses, including amortization of intangible assets.
Outlook
Zebra said it raised its full-year outlook. For the fourth quarter, it expects sales to grow 10% to 14% from a year earlier, including an estimated 150 basis points of favorable currency impact, the company said.
It forecast fourth-quarter non-GAAP earnings of $5.00 to $5.40 per diluted share and an adjusted EBITDA margin estimated at 22%, the company said. It expects full-year free cash flow of at least $1 billion.
Buybacks
Zebra repurchased $75 million of stock in the quarter and $643 million through the first nine months of 2026. Free cash flow for the nine months was $661 million.
"We are putting our strong cash generation and balance sheet to work, investing in growth while returning capital to shareholders," CFO Nathan Winters said.
The company ended the quarter with $182 million in cash and total debt of $2,578 million.
By the numbers
- Net sales: $1,614 million, up 22.3%
- Organic sales growth: 11.3%
- GAAP EPS: $3.43, up 74.1%
- Non-GAAP EPS: $4.95, up 27.6%
- Q4 non-GAAP EPS outlook: $5.00 to $5.40
- Nine-month buybacks: $643 million
Sources
- Zebra Technologies Form 8-K with third-quarter 2026 earnings release, filed Nov. 3, 2026 (accession 0001628280-26-069148)
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