ZBRA – Mind Over Memory

Research evidence excerpt

ZBRA – Mind Over Memory

d the higher costs into its FY’26 guide, with multiple levers to offset / mitigate the impact.

RFID, Machine Vision, and AI: ZBRA continues to invest in RFID, machine vision, and AI. In machine vision, ZBRA saw strong

DD% y/y growth in 1Q, marking an inflection point that management expects to continue across the full year (with broad-based

momentum across T&L, Manufacturing, and E-Commerce). RFID sales declined in 1Q on a tough comp but management

expects growth for the FY, citing a strong pipeline of opportunities across the supply chain (including in Retail, parcel tracking in

T&L, QSR, and healthcare). In AI, ZBRA continues to roll out its Frontline AI suite (Enablers, Blueprint, and Companion) and

noted it won an on-device parcel proof-of-delivery deployment with a global logistics customer.

FCF / Leverage / Capital Allocation: ZBRA generated $163M in FCF in 1Q’26, $5M higher y/y. ZBRA repurchased $300M of

stock in 1Q’26 and an additional $200M in 2Q to date, implying YTD share repurchases to $500M through early May (already

above the prior ~$450M FY guide). ZBRA’s guidance assumes an additional $100M of buyback for the year (implying ~$600M

total) although management indicated flexibility to allocate the full FY FCF to repurchase if valuation remains attractive. Net debt

to adjusted EBITDA was 2.1x at quarter end, within ZBRA’s target range of 1.5x–2.5x.

Segment Results

Connected Frontline (CF): CF sales were $825M, up 20.6% y/y, with organic sales up 3.8% y/y led by mobile computing, with

FX a 2.1% tailwind and acquisitions/divestitures (including Elo) contributing 14.7% to growth ($101M). Management noted Elo

was in line with expectations and the company continues to see ongoing progress on both revenue and cost synergies (recall