Zebra Technologies Corp.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 12 February 2026: press release. Guidance figures: 9 new. The quarter’s numbers.

Read the filing

Key takeaways

• Fourth-quarter net sales rose 10.6%: Net sales were $1,475 million, up 10.6% from $1,334 million, and full-year net sales were $5,396 million, up 8.3%. Source
• Quarterly net income and EPS declined: Net income was $70 million, or $1.39 per diluted share, down 57.1% and 55.7% year over year. Non-GAAP diluted EPS rose 8.3% to $4.33; non-GAAP measures exclude certain significant items. Source
• Full-year non-GAAP EPS rose 17.2%: Full-year non-GAAP diluted EPS was $15.84, up 17.2%, while reported full-year diluted EPS was $8.18, against $10.18 in 2024. Source
• Operating expenses rose on exit charges: Reported operating expenses rose to $559 million from $423 million, primarily due to exit and restructuring charges. Source
• GAAP gross margin fell on services and software: GAAP gross margin was 47.3% against 48.6%, down 130 basis points; management attributed the decrease mainly to lower services and software margin. Source
• Adjusted EBITDA margin held at 22.1%: Adjusted EBITDA rose 10.5% to $326 million; the margin was flat at 22.1% on improved operating expense leverage, and the full-year margin was 21.7% against 21.0%. Source
• Free cash flow of $831 million: Free cash flow for 2025 was $831 million, against $954 million in 2024, after capital expenditures of $86 million. Source
• $303 million repurchased toward $500 million: Share repurchases of $303 million were made toward the previously announced $500 million 12-month commitment; full-year repurchases under the existing authorization were $587 million. Source

“We delivered a strong finish to the year as our team continued to advance the strategic priorities that strengthen Zebra’s leadership in digitizing and automating workflows,”

Bill Burns, Chief Executive Officer, Zebra Technologies

Guidance

What changed from last quarter

• New guidance: First-quarter 2026 expectations given for sales growth, adjusted EBITDA margin and non-GAAP diluted EPS. Source
• New guidance: Full-year 2026 expectations given for sales growth, adjusted EBITDA margin, non-GAAP diluted EPS and free cash flow. Source
• New: Reportable segments changed to Connected Frontline and Asset Visibility & Automation, effective with the fourth quarter of 2025.
• New: Previously announced plan to exit the robotics business is reflected in exit and restructuring charges. Source
• New: Elo Touch and Photoneo acquired for $1,365 million during 2025. Source
• New: Board approved a new $1 billion repurchase authorization, augmenting the prior $1 billion authorization. Source

Results and growth drivers

• Fourth-quarter net sales rose 10.6%: Net sales were $1,475 million, up 10.6% from $1,334 million, and full-year net sales were $5,396 million, up 8.3%. Source
• Quarterly net income and EPS declined: Net income was $70 million, or $1.39 per diluted share, down 57.1% and 55.7% year over year. Non-GAAP diluted EPS rose 8.3% to $4.33; non-GAAP measures exclude certain significant items. Source
• Full-year non-GAAP EPS rose 17.2%: Full-year non-GAAP diluted EPS was $15.84, up 17.2%, while reported full-year diluted EPS was $8.18, against $10.18 in 2024. Source
• Backlog and pipeline entering 2026: Management described its backlog and pipeline entering 2026 and cited momentum from the Elo Touch acquisition and a sharper focus on highest-growth areas. Source

Segments and organic growth

• Connected Frontline sales rose 17.6%: CF net sales were $854 million, up 17.6%; acquisitions contributed 13.2 points of that increase, per the reconciliation. Source
• Asset Visibility & Automation rose 2.1%: AVA net sales were $621 million, up 2.1%, with acquisitions adding 0.7 points. Source
• Consolidated organic growth was 2.5%: Consolidated organic net sales grew 2.5% in the quarter, with CF up 3.6% and AVA up 1.3%; full-year organic growth was 6.2%. Source

“Zebra is well positioned to deliver innovative solutions for our customers and long-term shareholder value.”

Bill Burns, Chief Executive Officer, Zebra Technologies

Strategy, acquisitions and portfolio

• Elo Touch acquisition momentum cited: Management referred to Elo Touch as a recent acquisition in its October 2025 release and cited it as a driver of its connected frontline vision.
• Segment operating income excludes share-based compensation: CF and AVA segment results will exclude share-based compensation from segment operating income, for both GAAP and non-GAAP reporting.
• Robotics business exit previously announced: Exit and restructuring charges in the quarter reflect the previously announced plan to exit the robotics business. Source

Operating expenses and restructuring

• Operating expenses rose on exit charges: Reported operating expenses rose to $559 million from $423 million, primarily due to exit and restructuring charges. Source
• Adjusted operating expenses rose to $404 million: Adjusted operating expenses, which exclude non-GAAP items, were $404 million against $373 million in the prior-year quarter. Source
• Exit and restructuring charges of $76 million: The company recorded $76 million of exit and restructuring costs for actions it described as increasing focus and productivity. Source
• Intangible amortization rose year over year: Amortization of intangible assets was $40 million in the quarter against $24 million, and $114 million for the year against $104 million. Source

Margins and profitability

• GAAP gross margin fell on services and software: GAAP gross margin was 47.3% against 48.6%, down 130 basis points; management attributed the decrease mainly to lower services and software margin. Source
• Adjusted gross margin down 50 basis points: Adjusted gross margin was 48.2% against 48.7%; for the full year it was 48.5% against 48.6%. Source
• Adjusted EBITDA margin held at 22.1%: Adjusted EBITDA rose 10.5% to $326 million; the margin was flat at 22.1% on improved operating expense leverage, and the full-year margin was 21.7% against 21.0%. Source

Cash flow and balance sheet

• Free cash flow of $831 million: Free cash flow for 2025 was $831 million, against $954 million in 2024, after capital expenditures of $86 million. Source
• Cash and total debt at year-end: Cash was $125 million against total debt of $2,511 million; net debt payments for the year were $328 million. Source
• Operating cash flow lower than prior year: Net cash from operating activities was $917 million for 2025, compared with $1,013 million in 2024. Source

Capital returns and buybacks

• $303 million repurchased toward $500 million: Share repurchases of $303 million were made toward the previously announced $500 million 12-month commitment; full-year repurchases under the existing authorization were $587 million. Source
• New $1 billion repurchase authorization: The Board of Directors authorized a further $1 billion of common stock repurchases, augmenting the prior $1 billion authorization. Source
• Treasury shares increased during 2025: Treasury stock was 22,558,911 shares at December 31, 2025, up from 20,645,798 a year earlier. Source

Coming up, as management said on 12 February 2026

• Repurchases under new authorization: The Board authorized $1 billion of further common stock repurchases, so buybacks may continue under that authorization. Source

Earlier plans management reported on

• Not stated: Repurchases of $303 million made toward the previously announced commitment, as reported in the release. Source
• Not stated: Management referred back to the previously announced plan to exit the robotics business, reflected in charges for the quarter. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.