Zebra Technologies’ first quarter results were met with a significant positive market reaction, reflecting both solid operational execution and robust demand across its business lines. Management attributed the strong performance to broad-based growth in both the Connected Frontline and Asset Visibility and Automation segments, with particular strength in manufacturing and machine vision. CEO Bill Burns emphasized that the company’s integrated hardware, software, and services portfolio continues to deepen its role within customer operations, enabling productivity gains and workflow automation. Management also credited gross margin expansion to ongoing productivity initiatives, favorable business mix, and effective cost management, while acknowledging continued monitoring of memory supply dynamics.
Is now the time to buy ZBRA? Find out in our full research report (it’s free for active Edge members).
Zebra (ZBRA) Q1 CY2026 Highlights:
- Revenue: $1.50 billion vs analyst estimates of $1.48 billion (14.3% year-on-year growth, 1.1% beat)
- Adjusted EPS: $4.75 vs analyst estimates of $4.25 (11.9% beat)
- Adjusted EBITDA: $347 million vs analyst estimates of $318.4 million (23.2% margin, 9% beat)
- Revenue Guidance for Q2 CY2026 is $1.49 billion at the midpoint, above analyst estimates of $1.47 billion
- Management raised its full-year Adjusted EPS guidance to $18.50 at the midpoint, a 2.8% increase
- Operating Margin: 14.4%, in line with the same quarter last year
- Market Capitalization: $12.39 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Zebra’s Q1 Earnings Call
- Andrew Buscaglia (BNP Paribas) pressed management on memory supply visibility and mitigation strategies. CEO Bill Burns and CFO Nathan Winters explained proactive supplier negotiations and transitions to alternative memory types, stating they have “line of sight” to necessary supply for the year.
- Thomas Moll (Stephens) asked about sequential margin trends and drivers behind Q1 outperformance. Winters attributed margin strength to productivity initiatives, favorable deal mix, and manufacturing vertical growth, but cautioned that higher memory costs would pressure margins in Q2.
- Amit Malhotra (UBS) inquired about Elo Touch integration and synergy realization. Burns highlighted early wins in new markets, ongoing integration efforts, and expected mid-single-digit growth for Elo in 2026, with both revenue and cost synergies progressing as planned.
- Meta Marshall (Morgan Stanley) explored demand trends in manufacturing and the impact of freight costs. Burns described broad-based growth across sub-verticals, with visibility and automation driving investment, while Winters noted that freight inflation has been incorporated into guidance and remains manageable.
- Joseph Giordano (TD Cowen) questioned long-term demand in the face of increasing automation and robotics. Burns responded that automation trends are a tailwind, with Zebra’s solutions enabling both labor productivity and data collection for AI, and emphasized that growing warehouse footprints and supply chain digitization support continued demand.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will be watching (1) Zebra’s ability to maintain margin resilience as memory and freight costs fluctuate, (2) progress in the integration and commercial expansion of Elo Touch solutions, and (3) the pace of adoption for new AI-powered products and machine vision offerings. Execution on supply chain management and continued customer momentum in key verticals will also be critical to sustaining growth.
Zebra currently trades at $261.40, up from $216.96 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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