Zebra Technologies Corp - Class A
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +3.07%.
Did ZBRA Beat Earnings? Q2 2025 Results
Zebra Technologies delivered a stronger-than-expected second quarter, posting non-GAAP diluted EPS of $3.61 against a consensus estimate of $3.33, a beat of 8.44%, as the enterprise technology company demonstrated resilient demand and better-than-feared tariff impacts. Revenue climbed 6.2% year-over-year to $1.29 billion, edging just past the $1.29 billion consensus, with the larger Enterprise Visibility and Mobility segment contributing $875 million and Asset Intelligence and Tracking adding $418 million. The key driver behind the earnings strength was disciplined cost management, which held adjusted operating expenses lower as a percentage of sales and pushed non-GAAP net income up 12.7% to $186 million, even as roughly $10 million in net U.S. import tariff costs compressed GAAP gross margin to 47.6%. Management followed the results with a raised full-year outlook, lifting 2025 sales growth guidance to 5% to 7% and non-GAAP diluted EPS guidance to $15.25 to $15.75, while also announcing a $1.30 billion agreement to acquire Elo Touch Solutions, signaling a meaningful strategic push into self-service and customer engagement markets. Shares have faced pressure in recent sessions, trading well below their 52-week high heading into the report.
- Solid demand across both EVM and AIT segments
- Excellent operational execution
- Lower-than-expected U.S. import tariff impacts
- Organic net sales growth of 6.3% year-over-year
- Lower adjusted operating expenses as a percentage of sales
“Solid demand, excellent execution by our team and lower-than-expected tariffs enabled us to deliver second quarter results that exceeded our expectations. We are raising both our sales and profitability outlook for the full year, given our solid first half results and expectation for second half growth. Looking ahead, we are focused on driving shareholder value and advancing our industry leadership with our innovative solutions that digitize and automate our customers' workflows.”
Zebra Technologies CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2025, Zebra expects sales growth between 2% and 6% year-over-year, including approximately 30 basis points favorable impact from the Photoneo acquisition and net neutral foreign currency impact. Q3 adjusted EBITDA margin is expected to be approximately 21%, including approximately $10 million in U.S. import tariff expense net of mitigating actions. Non-GAAP diluted EPS is expected in the range of $3.60 to $3.80. For full year 2025, the company raised its sales growth outlook to between 5% and 7% (including approximately 50 basis points of combined favorability from Photoneo and FX), adjusted EBITDA margin of 21% to 22% (including approximately $30 million in net tariff expense), non-GAAP diluted EPS of $15.25 to $15.75, and free cash flow greater than $800 million. The Elo Touch Solutions acquisition ($1.3 billion, expected to close in 2025) is excluded from the outlook.
ZBRA YoY Financials
ZBRA Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.