Zebra Technologies 10-Q 2025-06-28

Filed 2025-08-05. 8 sections, 142K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2025

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number: 000-19406

Zebra Technologies Corporation

(Exact name of registrant as specified in its charter)

Delaware36-2675536
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

3 Overlook Point, Lincolnshire, IL 60069

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (847) 634-6700

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of exchange on which registered
Class A Common Stock, par value $.01 per shareZBRAThe NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 29, 2025, there were 50,845,151 shares of Class A Common Stock, $.01 par value, outstanding.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

QUARTER ENDED JUNE 28, 2025

TABLE OF CONTENTS

PAGE
PART I - FINANCIAL INFORMATION3
Item 1.Consolidated Financial Statements3
Consolidated Balance Sheets as of June 28, 2025 (unaudited) and December 31, 20243
Consolidated Statements of Operations (unaudited) for the three and six months ended June 28, 2025 and June 29, 20244
Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 28, 2025 and June 29, 20245
Consolidated Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 28, 2025 and June 29, 20246
Consolidated Statements of Cash Flows (unaudited) for the six months ended June 28, 2025 and June 29, 20248
Notes to Consolidated Financial Statements (unaudited)8
Note 1: Description of Business and Basis of Presentation9
Note 2: Significant Accounting Policies9
Note 3: Revenues10
Note 4: Inventories11
Note 5: Business Acquisitions11
Note 6: Investments11
Note 7: Fair Value Measurements11
Note 8: Derivative Instruments13
Note 9: Long-Term Debt15
Note 10: Leases16
Note 11: Accrued Liabilities, Commitments and Contingencies17
Note 12: Income Taxes17
Note 13: Earnings Per Share18
Note 14: Accumulated Other Comprehensive (Loss) Income18
Note 15: Accounts Receivable Factoring19
Note 16: Segment Information & Geographic Data19
Note 17: Subsequent Events20
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations21
Overview21
Results of Operations22
Results of Operations by Segment24
Liquidity and Capital Resources26
Significant Customers28
Safe Harbor29
New Accounting Pronouncements29
Non-GAAP Measures30
Item 3.Quantitative and Qualitative Disclosures About Market Risk30
Item 4.Controls and Procedures30
PART II - OTHER INFORMATION31
Item 1.Legal Proceedings31
Item 1A.Risk Factors31
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds31
Item 5.Other Information31
Item 6.Exhibits32
Signatures33

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

June 28, 2025December 31, 2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents$872$901
Accounts receivable, net of allowances for doubtful accounts of $1 each as of June 28, 2025 and December 31, 2024634692
Inventories, net686693
Income tax receivable5020
Prepaid expenses and other current assets92134
Total Current assets2,3342,440
Property, plant and equipment, net314305
Right-of-use lease assets165167
Goodwill3,9313,891
Other intangibles, net400422
Deferred income taxes565512
Other long-term assets229231
Total Assets$7,938$7,968
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt$44$79
Accounts payable569633
Accrued liabilities469503
Deferred revenue457453
Income taxes payable5536
Total Current liabilities1,5941,704
Long-term debt2,1282,092
Long-term lease liabilities152155
Deferred income taxes5857
Long-term deferred revenue315304
Other long-term liabilities7470
Total Liabilities4,3214,382
Stockholders’ Equity:
Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued——
Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares11
Additional paid-in capital733669
Treasury stock at cost, 21,315,596 and 20,645,798 shares as of June 28, 2025 and December 31, 2024, respectively(2,147)(1,900)
Retained earnings5,1084,860
Accumulated other comprehensive loss(78)(44)
Total Stockholders’ Equity3,6173,586
Total Liabilities and Stockholders’ Equity$7,938$7,968

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share data)

(Unaudited)

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024June 28, 2025June 29, 2024
Net sales:
Tangible products$1,055$983$2,117$1,912
Services and software238234484480
Total Net sales1,2931,2172,6012,392
Cost of sales:
Tangible products5535151,0951,013
Services and software124113245227
Total Cost of sales6776281,3401,240
Gross profit6165891,2611,152
Operating expenses:
Selling and marketing158150319298
Research and development144146295284
General and administrative10297213178
Amortization of intangible assets25254951
Acquisition and integration costs4172
Exit and restructuring costs—3—13
Total Operating expenses433422883826
Operating income183167378326
Other (loss) income, net:
Foreign exchange (loss) gain(11)—(16)3
Interest expense, net(25)(23)(48)(40)
Other expense, net(9)(8)(11)(11)
Total Other expense, net(45)(31)(75)(48)
Income before income tax138136303278
Income tax expense26235550
Net income$112$113$248$228
Basic earnings per share$2.20$2.19$4.85$4.43
Diluted earnings per share$2.19$2.17$4.81$4.40

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024June 28, 2025June 29, 2024
Net income$112$113$248$228
Other comprehensive income, net of tax:
Changes in unrealized (losses) gains on sales hedging(33)1(61)10

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global leader in the Automatic Identification and Data Capture (“AIDC”) industry. The AIDC market consists of mobile computing, data capture, radio frequency identification devices (“RFID”), barcode printing, and other workflow automation offerings. The Company’s offerings are proven to help our customers and end-users digitize and automate their workflows to achieve their critical business objectives, including improved productivity and operational efficiency, optimized regulatory compliance, and better customer experiences.

We design, manufacture, and sell a broad range of AIDC offerings, including: mobile computers, barcode scanners and imagers, RFID readers, specialty printers for barcode labeling and personal identification, real-time location systems (“RTLS”), related accessories and supplies, such as labels and other consumables, and related software applications. We also provide machine vision and robotics automation solutions; a full range of services, including maintenance, technical support, repair, managed and professional services; as well as cloud-based software subscriptions. End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries within North America; Europe, Middle East, and Africa (“EMEA”); Asia Pacific; and Latin America.

We continue to advance our Enterprise Asset Intelligence (“EAI”) vision: every asset and front-line worker visible, connected, and fully optimized. Through continual innovation, we have expanded beyond the traditional AIDC market to transform activities such as factory production, packages moving through a supply chain, retail shopping, the hospital patient journey and first responders addressing public safety and emergency situations. Data from enterprise assets, including status, condition, location, utilization, and preferences, is analyzed in the cloud to provide prioritized actionable insights. As a result, our offerings enable enterprises to “sense, analyze, and act” more effectively to optimize their activities.

The Company’s operations consist of two reportable segments that provide complementary offerings to our customers: Asset Intelligence & Tracking (“AIT”) and Enterprise Visibility & Mobility (“EVM”).

*•*The AIT segment is an industry leader in barcode printing and asset tracking technologies. Its major product lines include barcode and card printers, RFID and RTLS offerings, and supplies, including temperature-monitoring labels, and services.

*•*The EVM segment is an industry leader in automatic information and data capture offerings. Its major product lines include mobile computing, data capture, fixed industrial scanning and machine vision, services, and workflow optimization solutions. Our workflow optimization solutions include cloud-based software subscriptions, retail solutions, and robotic automation solutions.

We are a market leader in our core businesses, which are generally considered to be comprised of our mobile computing and data capture offerings, printing and supplies offerings, as well as support and repair services. We continue to focus on growth opportunities within adjacent and expansion markets by scaling and integrating our recent business acquisitions.

Second Quarter 2025 Financial Summary and Other Recent Developments

  • Net sales were $1,293 million in the current quarter compared to $1,217 million in the prior year second quarter.

  • Operating income was $183 million in the current quarter compared to $167 million in the prior year second quarter.

  • Net income was $112 million, or $2.19 per diluted share in the current quarter, compared to net income of $113 million, or $2.17 per diluted share in the prior year second quarter.

  • We repurchased $250 million of common shares year to date, including $125 million in the second quarter.

Largely consistent with the first quarter of this year, both of our segments benefited from improved demand trends that began in the second half of last year. Developments in the trade policies of the U.S. and other countries, including China, negatively impacted our second quarter operating results. The impacts, including the amount and timing of proposed tariffs, remain complex and rapidly evolving and are expected to negatively impact our operating results in the second half of 2025 as well, based on facts as we understand them today. We have partially mitigated, and expect to continue to further mitigate, the impacts of these trade policies through a combination of diversifying our product sourcing footprint, targeted list price increases, and product portfolio optimization.

Results of Operations

Consolidated Results of Operations

(amounts in millions, except percentages)

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024$ Change% ChangeJune 28, 2025June 29, 2024$ Change% Change
Net sales:
Tangible products$1,055$983$727.3%$2,117$1,912$20510.7%
Services and software23823441.7%48448040.8%
Total Net sales1,2931,217766.2%2,6012,3922098.7%
Gross profit616589274.6%1,2611,1521099.5%
Gross margin47.6%48.4%(80) bps48.5%48.2%30 bps
Operating expenses433422112.6%883826576.9%
Operating income$183$167$169.6%$378$326$5216.0%

Net sales to customers by geographic region were as follows (amounts in millions, except percentages):

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024$ Change% ChangeJune 28, 2025June 29, 2024$ Change% Change
North America$647$599$488.0%$1,303$1,211$927.6%
EMEA415419(4)(1.0)%858799597.4%
Asia-Pacific1411182319.5%2662303615.7%
Latin America9081911.1%1741522214.5%
Total Net sales$1,293$1,217$766.2%$2,601$2,392$2098.7%

Operating expenses are summarized below (amounts in millions, except percentages):

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024As a % of Net salesJune 28, 2025June 29, 2024As a % of Net sales
2025202420252024
Selling and marketing$158$15012.2%12.3%$319$29812.3%12.5%
Research and development14414611.1%12.0%29528411.3%11.9%
General and administrative102977.9%8.0%2131788.2%7.4%
Amortization of intangible assets2525NMNM4951NMNM
Acquisition and integration costs41NMNM72NMNM
Exit and restructuring costs—3NMNM—13NMNM
Total Operating expenses$433$42233.5%34.7%$883$82633.9%34.5%

Consolidated Organic Net sales growth:

Three Months EndedSix Months Ended
June 28, 2025June 28, 2025
Reported GAAP Consolidated Net sales growth6.2%8.7%
Adjustments:
Impact of foreign currency translations (1)0.3%0.4%
Impact of acquisitions (2)(0.2)%(0.1)%
Consolidated Organic Net sales growth (3)6.3%9.0%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)For purposes of computing Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.

(3)Consolidated Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

Second quarter 2025 compared to Second quarter 2024

Total Net sales increased by $76 million or 6.2% compared to the prior year quarter, reflecting growth in both of our segments. Our overall sales growth reflects improved demand trends that began in the middle of 2024 and continued in the North America, Asia-Pacific, and Latin America regions in the second quarter. Excluding the effects of currency changes and acquisitions, Consolidated Organic Net sales increased by 6.3%.

Gross margin decreased to 47.6% for the current quarter compared to 48.4% for the prior year, primarily due to unfavorable impacts of tariffs, net of mitigating actions*.* As compared to the prior year quarter, Gross margin was higher in our AIT segment and lower in our EVM segment.

Operating expenses for the quarters ended June 28, 2025 and June 29, 2024 were $433 million and $422 million, or 33.5% and 34.7% of Net sales, respectively. Current year Operating expenses were higher than the prior year quarter primarily due to increased employee and employee-related costs, as well as the unfavorable effects of foreign currency exchange rates.

Operating income was $183 million for the current quarter compared to $167 million in the prior year quarter. The increase was due to higher Gross profit, partially offset by higher Operating expenses.

Net income was slightly lower compared to the prior year quarter primarily due to higher Other expense, net partially offset by higher Operating income, as described above. The increase in Other expense, net was primarily due to foreign exchange losses in the current quarter.

The Company’s effective tax rates for the three months ended June 28, 2025 and June 29, 2024 were 18.8% and 16.9%, respectively. The increase in the effective tax rate year over year was primarily due to reduced benefits from share-based compensation deductions.

Diluted earnings per share increased to $2.19 as compared to $2.17 in the prior year quarter driven by the Company’s share repurchase program which reduced the number of shares outstanding.

Year to date 2025 compared to Year to date 2024

Total Net sales increased by $209 million or 8.7% compared to the prior year period, reflecting growth in both of our segments associated with improved demand trends that began in the middle of 2024. Excluding the effects of currency changes and acquisitions, Consolidated Organic Net sales increased by 9.0%.

Gross margin increased to 48.5% for the current year compared to 48.2% for the prior year period, primarily due to favorable business mix and volume leverage, largely offset by unfavorable impacts of tariffs, net. As compared to the prior year period, Gross margin was higher in our AIT segment and lower in our EVM segment.

Operating expenses for the six months ended June 28, 2025 and June 29, 2024 were $883 million and $826 million, or 33.9% and 34.5% of Net sales, respectively. Current year Operating expenses were higher than the prior year period primarily due to increased employee and employee-related costs, including higher incentive compensation resulting from changes in share-based compensation eligibility provisions. These increases were partially offset by lower Exit and restructuring costs.

Operating income was $378 million for the current year compared to $326 million in the prior year period. The increase was due to higher Gross profit, partially offset by higher Operating expenses.

Net income increased compared to the prior year period primarily due to higher Operating income, as described above, partly offset by higher Other expense, net. The increase in Other expense, net was primarily due to non-recurring interest rate swap gains in the prior year.

The Company’s effective tax rates for the six months ended June 28, 2025 and June 29, 2024 were 18.2% and 18.0%, respectively. The increase in the effective tax rate was primarily due to higher U.S. tax credits and tax benefits related to foreign earnings subject to U.S. taxation, partly offset by reduced benefits from share-based compensation deductions.

Diluted earnings per share increased to $4.81 as compared to $4.40 in the prior year period primarily due to higher Net income.

Results of Operations by Segment

The following commentary should be read in conjunction with the financial results of each reportable business segment as detailed in Note 16, Segment Information & Geographic Data in the Notes to Consolidated Financial Statements. To the extent applicable, segment operating income excludes business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, as well as certain other non-recurring costs.

Asset Intelligence & Tracking Segment (“AIT”)

(amounts in millions, except percentages)

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024$ Change% ChangeJune 28, 2025June 29, 2024$ Change% Change
Net sales:
Tangible products$388$368$205.4%$820$733$8711.9%
Services and software302913.4%605647.1%
Total Net sales418397215.3%8807899111.5%
Gross profit203187168.6%4393716818.3%
Gross margin48.6%47.1%150 bps49.9%47.0%290 bps
Operating expenses12011465.3%2562223415.3%
Operating income$83$73$1013.7%$183$149$3422.8%

AIT Organic Net sales growth:

Three Months EndedSix Months Ended
June 28, 2025June 28, 2025
AIT Reported GAAP Net sales growth5.3%11.5%
Adjustments:
Impact of foreign currency translations (1)0.5%0.5%
AIT Organic Net sales growth (2)5.8%12.0%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by

translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)AIT Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

Second quarter 2025 compared to Second quarter 2024

Total Net sales for AIT increased $21 million or 5.3% compared to the prior year, primarily due to higher sales of printing and RFID products. Excluding the impact of foreign currency changes, AIT Organic Net sales increased by 5.8%.

Gross margin increased to 48.6% in the current year compared to 47.1% for the prior year, primarily due to favorable business mix and volume leverage along with lower inventory related charges, partly offset by unfavorable impacts of tariffs, net.

Operating income increased 13.7% in the current year compared to the prior year due to higher Gross profit, partly offset by higher Operating expenses.

Year to date 2025 compared to Year to date 2024

Total Net sales for AIT increased $91 million or 11.5% compared to the prior year, primarily due to higher sales of printing and RFID products. Excluding the impact of foreign currency changes, AIT Organic Net sales increased by 12.0%.

Gross margin increased to 49.9% in the current year compared to 47.0% for the prior year, primarily due favorable business mix and volume leverage along with lower inventory related charges, partly offset by unfavorable impacts of tariffs, net.

Operating income increased 22.8% in the current year compared to the prior year due to higher Gross profit, partly offset by higher Operating expenses.

Enterprise Visibility & Mobility Segment (“EVM”)

(amounts in millions, except percentages)

Three Months EndedSix Months Ended
June 28, 2025June 29, 2024$ Change% ChangeJune 28, 2025June 29, 2024$ Change% Change
Net sales:
Tangible products$667$615$528.5%$1,297$1,179$11810.0%
Services and software20820531.5%424424——%
Total Net sales875820556.7%1,7211,6031187.4%
Gross profit413402112.7%822781415.2%
Gross margin47.2%49.0%(180) bps47.8%48.7%(90) bps
Operating expenses28427951.8%571538336.1%
Operating income$129$123$64.9%$251$243$83.3%

EVM Organic Net sales growth:

Three Months EndedSix Months Ended
June 28, 2025June 28, 2025
EVM Reported GAAP Net sales growth6.7%7.4%
Adjustments:
Impact of foreign currency translations (1)0.1%0.3%
Impact of acquisitions (2)(0.3)%(0.2)%
EVM Organic Net sales growth (3)6.5%7.5%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by

translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)For purposes of computing EVM Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.

(3)EVM Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

Second quarter 2025 compared to Second quarter 2024

Total Net sales for EVM increased $55 million or 6.7% compared to the prior year, primarily due to higher sales of mobile computing products. Excluding the impacts of foreign currency changes and acquisitions, EVM Organic Net sales increased by 6.5%.

Gross margin decreased to 47.2% in the current year compared to 49.0% for the prior year, primarily due to unfavorable impacts of tariffs, net, and lower services and software margins.

Operating income for the current year increased by 4.9% compared to the prior year due to higher Gross profit, partly offset by higher Operating expenses.

Year to date 2025 compared to Year to date 2024

Total Net sales for EVM increased $118 million or 7.4% compared to the prior year, primarily due to higher sales of mobile computing and data capture products. Excluding the impacts of foreign currency changes and acquisitions, EVM Organic Net sales increased by 7.5%.

Gross margin decreased to 47.8% in the current year compared to 48.7% for the prior year, primarily due to unfavorable impacts of tariffs, net, and lower services and software margins, partly offset by volume leverage.

Operating income for the current year increased by 3.3% compared to the prior year due to higher Gross profit, largely offset by higher Operating expenses.

Liquidity and Capital Resources

The primary factors that influence our liquidity include the amount and timing of cash collections from our customers, cash payments to our suppliers, capital expenditures, acquisitions, and share repurchases. Management believes that our existing capital resources, inclusive of available borrowing capacity on debt and other financing facilities and funds generated from operations, are sufficient to meet anticipated capital requirements and service our indebtedness. The following table summarizes our cash flow activities for the periods indicated (in millions):

Six Months Ended
Cash flow provided by (used in):June 28, 2025June 29, 2024$ Change
Operating activities$325$413$(88)
Investing activities(99)(25)(74)
Financing activities(257)(115)(142)
Effect of exchange rates on cash balances2—2
Net change in cash and cash equivalents, including restricted cash$(29)$273$(302)

The change in our cash and cash equivalents balance during the six months ended June 28, 2025 compared to the prior year was primarily due to the following:

  • $88 million decrease in net operating cash inflows primarily due to higher employee incentive compensation and income tax payments in the current year and cash receipts from the settlements of terminated interest rate swap agreements and larger reductions in inventory in the prior year. These items were partly offset by favorable timing of customer collections.

  • $74 million increase in net investing cash outflows primarily due to cash payments for the acquisition of Photoneo and higher capital expenditures.

  • $142 million increase in net financing cash outflows primarily due to share repurchases in the current year, partially offset by net debt repayments in the prior year.

Company Debt

The following table shows the carrying value of the Company’s debt (in millions):

June 28, 2025December 31, 2024
Term Loan A$1,575$1,575
Senior Notes500500
Receivables Financing Facility108108
Total debt$2,183$2,183
Less: Debt issuance costs(9)(9)
Less: Unamortized discounts(2)(3)
Less: Current portion of debt(44)(79)
Total long-term debt$2,128$2,092

Term Loan A

The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in the first quarter of 2026 and the majority due upon maturity in 2027. The Company has made and may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. As of June 28, 2025, the Term Loan A interest rate was 5.43%. Interest payments are made monthly and are subject to variable rates plus an applicable margin.

Senior Notes

In the second quarter of 2024, the Company completed a private offering of $500 million senior unsecured notes (the “Senior Notes”) with a 6.5% fixed interest rate. The Senior Notes mature on June 1, 2032, and interest is payable semi-annually in arrears in June and December of each year. The Company has the option to or could be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.

The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of Zebra’s existing and future subsidiaries. The Senior Notes contain covenants that, among other things, limit the ability of Zebra to: (i) grant or incur liens; (ii) have its subsidiaries guarantee debt without becoming guarantors; and (iii) merge or consolidate with another company or sell all or substantially all of its assets.

Revolving Credit Facility

The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit. As of June 28, 2025, the Company had letters of credit totaling $10 million, which reduced funds available for borrowings under the Revolving Credit Facility from $1,500 million to $1,490 million. As of June 28, 2025, there were no borrowings under the Revolving Credit Facility. Upon borrowing, interest payments are made monthly and are subject to variable rates plus an applicable margin. The Revolving Credit Facility matures on May 25, 2027.

Receivables Financing Facility

As of June 28, 2025, the Company has a Receivables Financing Facility with a borrowing limit of up to $180 million. As collateral, the Company pledges perfected first-priority security interests in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under this facility as secured borrowings. The receivables financing facility matures on March 19, 2027.

As of June 28, 2025, the Company’s Consolidated Balance Sheets included $678 million of gross receivables that were pledged under the facility. As of June 28, 2025, $108 million had been borrowed and was classified as non-current. Borrowings under the facility bear interest at a variable rate plus an applicable margin. As of June 28, 2025, the facility had an average interest rate of 5.38%. Interest is paid monthly on these borrowings.

The Company’s borrowings described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels.

Receivables Factoring

The Company has a Receivables Factoring arrangement, pursuant to which certain receivables originated from the EMEA and Asia-Pacific regions up to a maximum of €75 million are sold to a bank without recourse in exchange for cash. Such transfers are accounted for as sales and the related receivables are removed from the Company’s balance sheet. The Company does not maintain any beneficial interest in the receivables sold. The Company services the receivables on behalf of the bank, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in Cash flows from operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in Cash flows from financing activities on the Consolidated Statements of Cash Flows.

As of June 28, 2025 and December 31, 2024, there were a total of $30 million and $28 million, respectively, of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets.

As servicer of sold receivables, the Company had $58 million and $51 million of obligations that were not yet remitted to the bank as of June 28, 2025 and December 31, 2024, respectively. These obligations are included within Accrued liabilities on the Consolidated Balance Sheets, with changes in such obligations reflected within Cash flows from financing activities on the Consolidated Statements of Cash Flows.

See Note 15, Accounts Receivable Factoring in the Notes to Consolidated Financial Statements for further details.

Share Repurchases

On May 17, 2022, the Company announced that its Board of Directors authorized a share repurchase program for up to $1 billion of its outstanding shares of common stock. The authorized share repurchase program does not have a stated expiration date. The level of the Company’s repurchases depends on a number of factors, including its financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors its management may deem relevant. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws and other factors and may be amended, suspended or discontinued at any time. Repurchases may be effected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.

During the first six months of 2025, the Company repurchased 849,025 shares of common stock for approximately $250 million. As of June 28, 2025, the Company has cumulatively repurchased 1,388,599 shares of common stock for approximately $404 million, resulting in a remaining amount of share repurchases authorized under the May 2022 program of $596 million.

Significant Customers

End-users of our offerings are diversified across a wide variety of industries. We have three customers, who are distributors of the Company’s offerings, that individually accounted for more than 10% of our Net sales for the periods presented. In the aggregate, the approximate percentage of our segment and Company total Net sales attributable to these customers was as follows:

Six Months Ended
June 28, 2025June 29, 2024
AITEVMTotalAITEVMTotal
Significant customers as a % of Net sales19%41%60%18%37%55%

These customers accounted for 58% of accounts receivable as of June 28, 2025. No other customer accounted for more than 10% of total Net sales during the period ended June 28, 2025.

Safe Harbor

Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors, which could cause actual results to differ materially from those expressed or implied in such forward-looking statements. When used in this document and documents referenced, the words “anticipate,” “believe,” “intend,” “estimate,” “will,” and “expect” and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements but are not the exclusive means of identifying these statements. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. The forward-looking statements include, but are not limited to, the Company’s financial outlook for full year of 2025. These forward-looking statements are based on current expectations, forecasts and assumptions, and are subject to the risks and uncertainties inherent in the Company’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include:

  • Market acceptance of the Company’s products, services, and software solutions and competitors’ offerings and the potential effects of emerging technologies and changes in customer requirements,

  • The effect of global market conditions, including the North America; EMEA; Latin America; and Asia-Pacific regions in which we do business,

  • The impact of changes in foreign exchange rates, customs duties and trade policies due to the global nature of Zebra’s business,

  • Our ability to control manufacturing and operating costs,

  • Risks related to the manufacturing of the Company’s products and conducting business operations in non-U.S. countries, including the risk of depending on key suppliers who are also in non-U.S. countries,

  • The Company’s ability to purchase sufficient materials, parts, and components, our ability to provide services, software, and products to meet customer demand, particularly in light of global economic conditions,

  • The availability of credit and the volatility of capital markets, which may affect our suppliers, customers, and ourselves,

  • Success of integrating acquisitions,

  • Our ability to attract, retain, develop, and motivate key personnel,

  • Interest rate and financial market conditions,

  • Access to cash and cash equivalents held outside the U.S.,

  • The effect of natural disasters, man-made disasters, public health issues (including pandemics), and cybersecurity incidents on our business, our customers or our contracted third parties,

  • The impact of changes in foreign and domestic governmental policies, laws, or regulations,

  • The outcome of litigation in which the Company may be involved, particularly litigation or claims related to infringement of third-party intellectual property rights, and

  • The outcome of any future tax matters or tax law changes.

We encourage readers of this report to review Part II, Item 1A, “Risk Factors” in this report for further discussion of issues that could affect the Company’s future results. We undertake no obligation, other than as may be required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason after the date of this report.

New Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction. This ASU will be effective for the Company’s fiscal December 31, 2025 year-end. We are assessing the impact of this guidance on our disclosures; it will not have an impact on our results of operations, cash flows, or financial condition.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain categories of expenses that are included within expense captions presented on the Consolidated Statements of Operations on an annual and interim basis. This ASU will be effective for the Company’s fiscal December 31, 2027 year-end and interim periods thereafter, with early adoption permitted. We are assessing the impact of this guidance on our disclosures; it will not have an impact on our results of operations, cash flows, or financial condition.

Non-GAAP Measures

The Company has provided reconciliations of the supplemental non-GAAP financial measures, as defined under the rules of the Securities and Exchange Commission, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP.

These supplemental non-GAAP financial measures – Consolidated Organic Net sales growth, AIT Organic Net sales growth, and EVM Organic Net sales growth – are presented because our management evaluates our financial results both including and excluding the effects of business acquisitions and foreign currency translation, as applicable. Management believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of our business from period to period and trends in our historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with the GAAP financial measures presented.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in the Company’s market risk during the quarter ended June 28, 2025. For additional information on market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report on Form 10-K for the year ended December 31, 2024.

Item 4. Controls and Procedures

Management’s Report on Disclosure Controls

Our management is responsible for establishing and maintaining adequate disclosure controls as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management assessed the effectiveness of our disclosure controls as of June 28, 2025. Based on this assessment and those criteria, our management believes that, as of June 28, 2025, our disclosure controls were effective.

Changes in Internal Control over Financial Reporting

During the quarter ended June 28, 2025, there have been no changes in our internal controls that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Zebra have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See Note 11, Accrued Liabilities, Commitments and Contingencies in the Notes to Consolidated Financial Statements included in this report.

Item 1A. Risk Factors

In addition to the other information included in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2024, and the factors identified under “Safe Harbor” in Part I, Item 2 of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition, cash flows, or results of operations. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently considers immaterial also may materially adversely affect its business, financial condition, and/or operating results. There have been no material changes to the risk factors included in our Annual Report for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to repurchases of the Company’s common stock for the three months ended June 28, 2025:

PeriodTotal Number of Shares PurchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1)
March 30, 2025 - April 26, 2025303,293$247.28303,293$646
April 27, 2025 - May 24, 202583,472291.3183,472622
May 25, 2025 - June 28, 202587,902292.1987,902596
Total474,667$263.34474,667$596

(1)On May 17, 2022, the Company announced that its Board of Directors authorized a share repurchase program for up to $1 billion of its outstanding shares of common stock. Repurchases may be effected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. As of June 28, 2025, the Company has cumulatively repurchased 1,388,599 shares of common stock for approximately $404 million, resulting in a remaining amount of share repurchases authorized under the May 2022 program of $596 million.

Item 5. Other Information

The Company’s Securities Transactions and Confidentiality Policy governs the purchase, sale, and/or other dispositions of the Company's securities by directors, officers and employees, and is designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. None of our directors or executive officers had in effect, adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended June 28, 2025.

Item 6. Exhibits

31.1Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101The following financial information from Zebra Technologies Corporation Quarterly Report on Form 10-Q, for the quarter ended June 28, 2025, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the interactive data file because Inline XBRL tags are embedded in the iXBRL document.
104The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2025 formatted in Inline XBRL (included in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ZEBRA TECHNOLOGIES CORPORATION
Date: August 5, 2025By:/s/ William J. Burns
William J. Burns
Chief Executive Officer
Date: August 5, 2025By:/s/ Nathan Winters
Nathan Winters
Chief Financial Officer