Item 1. Consolidated Financial Statements

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

			September 27, 2025						December 31, 2024
			(Unaudited)
Assets
Current assets:
Cash and cash equivalents			$	1,053					$	901
Accounts receivable, net of allowances for doubtful accounts of $1 each as of September 27, 2025 and December 31, 2024			655						692
Inventories, net			663						693
Income tax receivable			106						20
Prepaid expenses and other current assets			99						134
Total Current assets			2,576						2,440
Property, plant and equipment, net			327						305
Right-of-use lease assets			165						167
Goodwill			3,931						3,891
Other intangibles, net			376						422
Deferred income taxes			475						512
Other long-term assets			217						231
Total Assets			$	8,067					$	7,968
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt			$	66					$	79
Accounts payable			533						633
Accrued liabilities			497						503
Deferred revenue			456						453
Income taxes payable			51						36
Total Current liabilities			1,603						1,704
Long-term debt			2,107						2,092
Long-term lease liabilities			151						155
Deferred income taxes			65						57
Long-term deferred revenue			318						304
Other long-term liabilities			76						70
Total Liabilities			4,320						4,382
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 shares			1						1
Additional paid-in capital			781						669
Treasury stock at cost, 21,414,382 and 20,645,798 shares as of September 27, 2025 and December 31, 2024, respectively			(2,181)						(1,900)
Retained earnings			5,209						4,860
Accumulated other comprehensive loss			(63)						(44)
Total Stockholders’ Equity			3,747						3,586
Total Liabilities and Stockholders’ Equity			$	8,067					$	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 Ended												Nine Months Ended
			September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
Net sales:
Tangible products			$	1,081					$	1,019					$	3,198					$	2,931
Services and software			239						236						723						716
Total Net sales			1,320						1,255						3,921						3,647
Cost of sales:
Tangible products			557						526						1,652						1,539
Services and software			129						116						374						343
Total Cost of sales			686						642						2,026						1,882
Gross profit			634						613						1,895						1,765
Operating expenses:
Selling and marketing			159						151						478						449
Research and development			146						141						441						425
General and administrative			111						96						324						274
Amortization of intangible assets			25						29						74						80
Acquisition and integration costs			10						1						17						3
Exit and restructuring costs			—						4						—						17
Total Operating expenses			451						422						1,334						1,248
Operating income			183						191						561						517
Other income (loss), net:
Foreign exchange gain (loss)			1						(9)						(15)						(6)
Interest expense, net			(23)						(31)						(71)						(71)
Other expense, net			(2)						(2)						(13)						(13)
Total Other expense, net			(24)						(42)						(99)						(90)
Income before income tax			159						149						462						427
Income tax expense			58						12						113						62
Net income			$	101					$	137					$	349					$	365
Basic earnings per share			$	1.98					$	2.65					$	6.83					$	7.09
Diluted earnings per share			$	1.97					$	2.64					$	6.78					$	7.04

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

			Three Months Ended												Nine Months Ended
			September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
Net income			$	101					$	137					$	349					$	365
Other comprehensive income, net of tax:
Changes in unrealized gains (losses) on sales hedging			18						(16)						(43)						(6)
Foreign currency translation adjustment			(3)						9						24						1
Comprehensive income			$	116					$	130					$	330					$	360

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except share data)

(Unaudited)

						Class A Common Stock Shares						Class A Common Stock Value						Additional Paid-in Capital						Treasury Stock						Retained Earnings						Accumulated Other Comprehensive Loss						Total
Balance at December 31, 2024						51,506,059						$	1					$	669					$	(1,900)					$	4,860					$	(44)					$	3,586
Net share issuances and tax withholding payments related to share-based compensation plans						6,550						—						(1)						—						—						—						(1)
Share-based compensation						—						—						51						—						—						—						51
Repurchase of common stock						(374,358)						—						—						(125)						—						—						(125)
Net income						—						—						—						—						136						—						136
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						(28)						(28)
Foreign currency translation adjustment						—						—						—						—						—						7						7
Balance at March 29, 2025						51,138,251						$	1					$	719					$	(2,025)					$	4,996					$	(65)					$	3,626
Net share issuances and tax withholding payments related to share-based compensation plans						172,677						—						(18)						3						—						—						(15)
Share-based compensation						—						—						32						—						—						—						32
Repurchase of common stock						(474,667)						—						—						(125)						—						—						(125)
Net income						—						—						—						—						112						—						112
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						(33)						(33)
Foreign currency translation adjustment						—						—						—						—						—						20						20
Balance at June 28, 2025						50,836,261						$	1					$	733					$	(2,147)					$	5,108					$	(78)					$	3,617
Net share issuances and tax withholding payments related to share-based compensation plans						13,078						—						1						—						—						—						1
Share-based compensation						—						—						47						—						—						—						47
Repurchase of common stock						(111,864)						—						—						(34)						—						—						(34)
Net income						—						—						—						—						101						—						101
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						18						18
Foreign currency translation adjustment						—						—						—						—						—						(3)						(3)
Balance at September 27, 2025						50,737,475						$	1					$	781					$	(2,181)					$	5,209					$	(63)					$	3,747

						Class A Common Stock Shares						Class A Common Stock Value						Additional Paid-in Capital						Treasury Stock						Retained Earnings						Accumulated Other Comprehensive Loss						Total
Balance at December 31, 2023						51,378,862						$	1					$	615					$	(1,858)					$	4,332					$	(54)					$	3,036
Net share issuances and tax withholding payments related to share-based compensation plans						21,106						—						(3)						—						—						—						(3)
Share-based compensation						—						—						17						—						—						—						17
Net income						—						—						—						—						115						—						115
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						9						9
Foreign currency translation adjustment						—						—						—						—						—						(5)						(5)
Balance at March 30, 2024						51,399,968						$	1					$	629					$	(1,858)					$	4,447					$	(50)					$	3,169
Net share issuances and tax withholding payments related to share-based compensation plans						170,023						—						(27)						3						—						—						(24)
Share-based compensation						—						—						31						—						—						—						31
Net income						—						—						—						—						113						—						113
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						1						1
Foreign currency translation adjustment						—						—						—						—						—						(3)						(3)
Balance at June 29, 2024						51,569,991						$	1					$	633					$	(1,855)					$	4,560					$	(52)					$	3,287
Net share issuances and tax withholding payments related to share-based compensation plans						22,369						—						—						—						—						—						—
Share-based compensation						—						—						20						—						—						—						20
Repurchase of common stock						(50,304)						—						—						(16)						—						—						(16)
Net loss						—						—						—						—						137						—						137
Changes in unrealized gains and losses on sales hedging (net of income taxes)						—						—						—						—						—						(16)						(16)
Foreign currency translation adjustment						—						—						—						—						—						9						9
Balance at September 28, 2024						51,542,056						$	1					$	653					$	(1,871)					$	4,697					$	(59)					$	3,421

Certain prior period amounts have been reclassified to conform with the current period presentation.

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

			Nine Months Ended
			September 27, 2025						September 28, 2024
Cash flows from operating activities:
Net income			$	349					$	365
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			126						130
Share-based compensation			130						68
Deferred income taxes			61						(62)
Unrealized gain on forward interest rate swaps			—						(31)
Other, net			13						12
Changes in operating assets and liabilities:
Accounts receivable, net			57						(120)
Inventories, net			30						161
Other assets			16						5
Accounts payable			(115)						79
Accrued liabilities			(49)						68
Deferred revenue			16						(34)
Income taxes			(71)						25
Settlement liability			—						(45)
Cash receipts on forward interest rate swaps			—						86
Other operating activities			(3)						—
Net cash provided by operating activities			560						707
Cash flows from investing activities:
Acquisition of businesses			(62)						—
Purchases of property, plant and equipment			(56)						(41)
Proceeds from sale of short-term investments			—						2
Proceeds from sale of long-term investments			1						—
Purchases of long-term investments			(4)						(3)
Net cash used in investing activities			(121)						(42)
Cash flows from financing activities:
Payment of debt issuance costs, extinguishment costs and discounts			—						(9)
Payments of debt			—						(694)
Proceeds from issuance of debt			—						651
Payments for repurchases of common stock			(284)						(16)
Net payments related to share-based compensation plans			(15)						(27)
Change in unremitted cash collections from servicing factored receivables			9						(35)
Other financing activities			4						3
Net cash used in financing activities			(286)						(127)
Effect of exchange rate changes on cash and cash equivalents			(1)						—
Net increase in cash and cash equivalents			152						538
Cash and cash equivalents at beginning of period			901						138
Cash and cash equivalents at end of period			$	1,053					$	676
Supplemental disclosures of cash flow information:
Income taxes paid			$	124					$	90
Interest paid, net of forward interest rate swaps			$	79					$	3

See accompanying Notes to Consolidated Financial Statements.

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 Description of Business and Basis of Presentation

Zebra Technologies Corporation and its subsidiaries (“Zebra” or the “Company”) is a global leader providing innovative Enterprise Asset Intelligence (“EAI”) products, services, and software solutions (“offerings”) in the automatic identification and data capture industry. We design, manufacture, and sell a broad range of offerings, including cloud-based software subscriptions, that capture and move data. We also provide a full range of services, including maintenance, technical support, repair, managed and professional services. End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries. We provide our offerings globally through a direct sales force and an extensive network of channel partners.

Management prepared these unaudited interim consolidated financial statements according to the rules and regulations of the Securities and Exchange Commission for interim financial information and notes. As permitted under Article 10 of Regulation S-X and the instructions of Form 10-Q, these consolidated financial statements do not include all the information and notes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements, although management believes that the disclosures made are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

In the opinion of the Company, these interim financial statements include all adjustments (of a normal, recurring nature) necessary to fairly present its Consolidated Balance Sheet as of September 27, 2025, the Consolidated Statements of Operations, Comprehensive Income and Stockholders’ Equity for the three and nine months ended September 27, 2025 and September 28, 2024, and the Consolidated Statements of Cash Flows for the nine months ended September 27, 2025 and September 28, 2024. These results, however, are not necessarily indicative of the results expected for the full fiscal year ending December 31, 2025.

Note 2 Significant Accounting Policies

For a discussion of our significant accounting policies, see Note 2, Significant Accounting Policies within Part II, Item 8 “Financial Statements and Supplementary Data” in the Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.

Note 3 Revenues

The Company recognizes revenue to depict the transfer of goods, services, or software solutions to a customer at an amount that reflects the consideration which it expects to receive.

Revenues for tangible products are generally recognized upon shipment, whereas revenues for services are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or over time using a time-based method, depending on how control is transferred to the customer. In cases where a bundle of products, services, and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control.

Disaggregation of Revenue

The following table presents our Net sales disaggregated by product category for each of our segments (in millions):

			Three Months Ended
			September 27, 2025																		September 28, 2024
Segment			Tangible Products						Services and Software						Total						Tangible Products						Services and Software						Total
AIT			$	424					$	31					$	455					$	382					$	28					$	410
EVM			657						208						865						637						208						845
Total			$	1,081					$	239					$	1,320					$	1,019					$	236					$	1,255
			Nine Months Ended
			September 27, 2025																		September 28, 2024
Segment			Tangible Products						Services and Software						Total						Tangible Products						Services and Software						Total
AIT			$	1,244					$	91					$	1,335					$	1,115					$	84					$	1,199
EVM			1,954						632						2,586						1,816						632						2,448
Total			$	3,198					$	723					$	3,921					$	2,931					$	716					$	3,647

In addition, refer to Note 16, Segment Information & Geographic Data for Net sales to customers by geographic region.

Performance Obligations

The Company’s remaining performance obligations relate to services and software solutions. The aggregated transaction price allocated to remaining performance obligations for arrangements with an original term exceeding one year was $1.16 billion and $1.19 billion, inclusive of deferred revenue, as of September 27, 2025 and December 31, 2024, respectively. On average, remaining performance obligations as of September 27, 2025 and December 31, 2024 are expected to be recognized over a period of approximately two years.

Contract Balances

Progress on satisfying performance obligations under contracts with customers related to billed revenues is reflected on the Consolidated Balance Sheets in Accounts receivable, net. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $9 million and $11 million as of September 27, 2025 and December 31, 2024, respectively. These contract assets result from timing differences between billing and satisfying performance obligations, inclusive of any impacts from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment, and no impairment losses have been recognized during the three and nine months ended September 27, 2025 and September 28, 2024, respectively.

Deferred revenue on the Consolidated Balance Sheets consists of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $774 million and $757 million as of September 27, 2025 and December 31, 2024, respectively. During the three and nine months ended September 27, 2025, the Company recognized $101 million and $359 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2024. During the three and nine months ended September 28, 2024, the Company recognized $107 million and $374 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2023.

Note 4 Inventories

The categories of Inventories, net are as follows (in millions):

			September 27, 2025						December 31, 2024
Raw materials (1)			$	224					$	248
Work in process			2						4
Finished goods			437						441
Total Inventories, net			$	663					$	693

(1) Raw material inventories primarily consist of product components as well as supplies used in repair operations.

Note 5 Business Acquisitions

Photoneo

On February 28, 2025, the Company acquired Photoneo, a leading developer and manufacturer of 3D machine vision offerings. The Company’s cash purchase consideration of $62 million was primarily allocated to technology-related intangible assets of $17 million, customer relationship assets of $6 million, and goodwill of $34 million. The technology-related intangible assets and customer relationship assets both have estimated useful lives of 7 years. The Company finalized the purchase price allocation in the third quarter with no significant measurement period adjustments recorded. The goodwill, which will be deductible for tax purposes, has been allocated to the EVM segment and principally relates to the expansion of our machine vision offerings across several industries.

Note 6 Investments

A rollforward of the Company’s long-term investments is as follows (in millions):

			Nine Months Ended
			September 27, 2025						September 28, 2024
Balance at the beginning of the period			$	110					$	113
Impairment losses			(11)						(6)
Purchases of long-term investments			4						3
Proceeds from sale of long-term investments			(1)						—
Balance at the end of the period			$	102					$	110

The Company recognized impairment losses of $1 million for the three months ended September 27, 2025 and no impairment losses for the three months ended September 28, 2024.

The carrying value of the Company’s long-term investments are included in Other long-term assets on the Consolidated Balance Sheets. Net gains and losses are included within Other expense, net on the Consolidated Statements of Operations.

Note 7 Fair Value Measurements

Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels:

• Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (e.g. U.S. Treasuries and money market funds).

• Level 2: Observable prices that are based on inputs not quoted in active markets but corroborated by market data.

• Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs. In addition, the Company considers counterparty credit risk in the assessment of fair value.

The Company’s financial assets and liabilities carried at fair value as of September 27, 2025, are classified below (in millions):

			Level 1						Level 2						Level 3						Total
Assets:
Investments related to the deferred compensation plan			$	46					$	—					$	—					$	46
Total Assets at fair value			$	46					$	—					$	—					$	46
Liabilities:
Foreign exchange contracts (1)			$	1					$	27					$	—					$	28
Liabilities related to the deferred compensation plan			46						—						—						46
Total Liabilities at fair value			$	47					$	27					$	—					$	74

The Company’s financial assets and liabilities carried at fair value as of December 31, 2024, are classified below (in millions):

			Level 1						Level 2						Level 3						Total
Assets:
Foreign exchange contracts (1)			$	1					$	30					$	—					$	31
Investments related to the deferred compensation plan			41						—						—						41
Total Assets at fair value			$	42					$	30					$	—					$	72
Liabilities:
Liabilities related to the deferred compensation plan			$	41					$	—					$	—					$	41
Total Liabilities at fair value			$	41					$	—					$	—					$	41

(1)The fair value of the foreign exchange contracts is calculated as follows:

• Fair value of forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points (Level 2).

• Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points unless the hedge has matured but not settled at period-end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1).

Note 8 Derivative Instruments

In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company commonly uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. The Company does not hold or issue derivatives for trading or speculative purposes.

In accordance with ASC 815, the Company recognizes derivative instruments as either assets or liabilities on the Consolidated Balance Sheets and measures them at fair value. The following table presents the fair value of its derivative instruments (in millions):

			Asset (Liability)
									Fair Values as of
			Balance Sheets Classification						September 27, 2025						December 31, 2024
Derivative instruments designated as hedges:
Foreign exchange contracts			Prepaid expenses and other current assets						$	—					$	30
Foreign exchange contracts			Accrued liabilities						(27)						—
Total derivative instruments designated as hedges									$	(27)					$	30
Derivative instruments not designated as hedges:
Foreign exchange contracts			Prepaid expenses and other current assets						$	—					$	1
Foreign exchange contracts			Accrued liabilities						(1)						—
Total derivative instruments not designated as hedges									$	(1)					$	1
Total net derivative (liability) asset									$	(28)					$	31

The following table presents the net (losses) gains from changes in fair values of derivatives that are not designated as hedges (in millions):

			(Losses) Gains Recognized in Income
									Three Months Ended												Nine Months Ended
			Statements of Operations Classification						September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
Derivative instruments not designated as hedges:
Foreign exchange contracts			Foreign exchange gain (loss)						$	(1)					$	(7)					$	(24)					$	(5)
Forward interest rate swaps			Interest expense, net						—						—						—						31
Total net (loss) gain recognized in income									$	(1)					$	(7)					$	(24)					$	26

Activities related to derivative instruments are reflected within Net cash provided by operating activities on the Consolidated Statements of Cash Flows.

Interest Rate Risk Management

The Company is exposed to market risk associated with interest rate payments on its borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facilities, which bear interest at variable rates plus applicable margins. The Company manages its exposure to changes in interest rates by issuing both fixed and variable rate borrowings as well as periodically utilizing interest rate swaps to economically hedge interest rate exposure based on current and projected market conditions. The Company had no active interest rate swap agreements during the nine months ended September 27, 2025.

Credit and Market Risk Management

Financial instruments, including derivatives, expose the Company to counterparty credit risk of nonperformance and to market risk related to currency exchange rate and interest rate fluctuations. The Company manages its exposure to counterparty credit risk by establishing minimum credit standards, diversifying its counterparties, and monitoring its concentrations of credit. The Company’s counterparties are commercial banks with expertise in derivative financial instruments. The Company evaluates the impact of market risk on the fair value and cash flows of its derivative and other financial instruments by considering reasonably possible changes in interest rates and currency exchange rates. The Company continually monitors the creditworthiness of the customers to which it grants credit terms in the normal course of business. The terms and conditions of the Company’s credit policies are designed to mitigate concentrations of credit risk.

The Company’s master netting and other similar arrangements with the respective counterparties allow for net settlement under certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. We present the assets and liabilities of our derivative financial instruments, for which we have net settlement agreements in place, on a net basis on the Consolidated Balance Sheets. If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions would not have been significantly different as of September 27, 2025 or December 31, 2024.

Foreign Currency Exchange Risk Management

The Company conducts business on a multinational basis in a variety of foreign currencies. Exposure to market risk for changes in foreign currency exchange rates arises primarily from Euro-denominated external revenues, cross-border financing activities between subsidiaries, and foreign currency denominated monetary assets and liabilities. The Company manages its objective of preserving the economic value of non-functional currency denominated cash flows by initially hedging transaction exposures with natural offsets and, once these opportunities have been exhausted, through foreign exchange forward and option contracts, as deemed appropriate.

The Company manages the exchange rate risk of anticipated Euro-denominated sales using forward contracts, which typically mature within twelve months of execution. The Company designates these derivative contracts as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated other comprehensive income (loss) (“AOCI”) on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized. The realized gain or loss is then recorded as an adjustment to Net sales on the Consolidated Statements of Operations. Realized amounts reclassified to Net sales were $20 million and $2 million of losses for the three months ended September 27, 2025 and September 28, 2024, respectively. Realized amounts reclassified to Net sales were $24 million of losses and $4 million of gains for the nine months ended September 27, 2025 and September 28, 2024, respectively. As of September 27, 2025 and December 31, 2024, the notional amounts of the Company’s foreign exchange cash flow hedges were €591 million and €592 million, respectively. The Company has reviewed its cash flow hedges for effectiveness and determined that they are highly effective.

The Company uses forward contracts, which are not designated as hedging instruments, to manage its exposures related to net assets denominated in foreign currencies. These forward contracts typically mature within one month after execution. Monetary gains and losses on these forward contracts are recorded in income and are generally offset by the transaction gains and losses related to their net asset positions. The notional values and the net fair values of these outstanding contracts were as follows (in millions):

			September 27, 2025						December 31, 2024
Notional balance of outstanding contracts:
British Pound/U.S. Dollar			£	3					£	5
Euro/U.S. Dollar			€	85					€	146
Euro/Czech Koruna			€	13					€	16
Japanese Yen/U.S. Dollar			¥	439					¥	360
Singapore Dollar/U.S. Dollar			S$	11					S$	23
Mexican Peso/U.S. Dollar			Mex$	254					Mex$	142
Polish Zloty/U.S. Dollar			zł	55					zł	53
Net fair value of (liabilities) assets of outstanding contracts			$	(1)					$	1

Note 9 Long-Term Debt

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

			September 27, 2025						December 31, 2024
Term Loan A			$	1,575					$	1,575
Senior Notes			500						500
Receivables Financing Facility			108						108
Total debt			$	2,183					$	2,183
Less: Debt issuance costs			(8)						(9)
Less: Unamortized discounts			(2)						(3)
Less: Current portion of debt			(66)						(79)
Total long-term debt			$	2,107					$	2,092

As of September 27, 2025, the future maturities of debt are as follows (in millions):

2025 (3 months remaining)						$	—
2026						88
2027						1,595
2028						—
2029						—
Thereafter						500
Total future maturities of debt						$	2,183

All borrowings as of September 27, 2025 were denominated in U.S. Dollars.

The estimated fair value of the Company’s debt approximated $2.2 billion as of both September 27, 2025 and December 31, 2024. These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and do not represent the settlement value of these liabilities to the Company. The fair value of debt will continue to vary each period based on a number of factors, including fluctuations in market interest rates as well as changes to the Company’s credit ratings.

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 on May 25, 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 September 27, 2025, the Term Loan A interest rate was 5.42%. 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 September 27, 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 September 27, 2025 and December 31, 2024, 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 September 27, 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 September 27, 2025, the Company’s Consolidated Balance Sheets included $715 million of gross receivables that were pledged under the facility. As of September 27, 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 September 27, 2025, the facility had an average interest rate of 5.21%. 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.

As of September 27, 2025, the Company was in compliance with all debt covenants.

Note 10 Leases

During the nine months ended September 27, 2025, the Company recorded $20 million of right-of-use (“ROU”) assets obtained in exchange for lease obligations primarily related to extensions of existing leases and the commencement of new warehouse and office facility leases.

Future minimum lease payments under non-cancellable leases as of September 27, 2025 were as follows (in millions):

2025 (3 months remaining)						$	12
2026						46
2027						38
2028						35
2029						29
Thereafter						66
Total future minimum lease payments						$	226
Less: Interest						(39)
Present value of lease liabilities						$	187
Reported as of September 27, 2025:
Current portion of lease liabilities						$	36
Long-term lease liabilities						151
Present value of lease liabilities						$	187

The current portion of lease liabilities is included within Accrued liabilities on the Consolidated Balance Sheets.

Note 11 Accrued Liabilities, Commitments and Contingencies

Accrued Liabilities

The components of Accrued liabilities are as follows (in millions):

			September 27, 2025						December 31, 2024
Incentive compensation			$	116					$	174
Payroll and benefits			71						76
Unremitted cash collections due to banks on factored accounts receivable			60						51
Customer rebates			54						56
Current portion of lease liabilities			36						36
Warranty			30						26
Foreign exchange contracts			28						—
Freight and duty			23						12
Other			79						72
Accrued liabilities			$	497					$	503

Warranties

The following table is a summary of the Company’s warranty obligations (in millions):

			Nine Months Ended
			September 27, 2025						September 28, 2024
Balance at the beginning of the period			$	26					$	27
Warranty expense			29						19
Warranties fulfilled			(25)						(20)
Balance at the end of the period			$	30					$	26

Contingencies

The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future. The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated.

Note 12 Income Taxes

The Company’s effective tax rate for the three and nine months ended September 27, 2025 was 36.5% and 24.5%, respectively, compared to 8.1% and 14.5% for the three and nine months ended September 28, 2024. In the current period, the variance from the 21% federal statutory rate was primarily attributable to taxes related to foreign earnings subject to U.S. taxation as a result of recently enacted U.S. tax legislation and U.S. state income taxes, partly offset by the generation of U.S. tax credits and the release of Canadian valuation allowance reserves. In the prior period, the variance from the 21% federal statutory rate was primarily attributable to the generation of U.S. tax credits and the tax benefit related to foreign earnings subject to U.S. taxation, partly offset by U.S. state income taxes.

Note 13 Earnings Per Share

Basic net earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of diluted common shares outstanding. Diluted common shares outstanding is computed using the Treasury Stock method and, in periods of income, reflects the additional shares that would be outstanding if dilutive share-based compensation awards were converted into common shares during the period.

Earnings per share (in millions, except share data):

			Three Months Ended												Nine Months Ended
			September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
Basic:
Net income			$	101					$	137					$	349					$	365
Weighted-average shares outstanding			50,800,552						51,567,216						51,044,563						51,480,812
Basic earnings per share			$	1.98					$	2.65					$	6.83					$	7.09
Diluted:
Net income			$	101					$	137					$	349					$	365
Weighted-average shares outstanding			50,800,552						51,567,216						51,044,563						51,480,812
Dilutive shares			370,567						350,839						384,969						364,760
Diluted weighted-average shares outstanding			51,171,119						51,918,055						51,429,532						51,845,572
Diluted earnings per share			$	1.97					$	2.64					$	6.78					$	7.04

Anti-dilutive share-based compensation awards are excluded from diluted earnings per share calculations. There were 1,473 and 84,605 shares that were anti-dilutive for the three and nine months ended September 27, 2025, respectively. There were 1,621 and 61,240 shares that were anti-dilutive for the three and nine months ended September 28, 2024, respectively.

Note 14 Accumulated Other Comprehensive (Loss) Income

Stockholders’ equity includes certain items classified as AOCI, including:

• Unrealized gain (loss) on sales hedging which relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales. These hedges are designated as cash flow hedges, and the Company defers income statement recognition of gains and losses until the hedged transaction occurs. See Note 8, Derivative Instruments for more details.

• Foreign currency translation adjustments which relates to the Company’s non-U.S. subsidiary companies that have designated a functional currency other than the U.S. Dollar. The Company translates the subsidiary functional currency financial statements to U.S. Dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of AOCI.

The changes in each component of AOCI during the nine months ended September 27, 2025 and September 28, 2024 were as follows (in millions):

						Unrealized gain (loss) on sales hedging												Foreign currency translation adjustments						Total
Balance at December 31, 2023						$	(5)											$	(49)					$	(54)
Other comprehensive income (loss) before reclassifications						(3)												1						(2)
Amounts reclassified from AOCI(1)						(4)												—						(4)
Tax effect						1												—						1
Other comprehensive income (loss), net of tax						(6)												1						(5)
Balance at September 28, 2024						$	(11)											$	(48)					$	(59)
Balance at December 31, 2024						$	22											$	(66)					$	(44)
Other comprehensive income (loss) before reclassifications						(81)												24						(57)
Amounts reclassified from AOCI(1)						24												—						24
Tax effect						14												—						14
Other comprehensive income (loss), net of tax						(43)												24						(19)
Balance at September 27, 2025						$	(21)											$	(42)					$	(63)

(1) See Note 8, Derivative Instruments regarding the timing of reclassifications to operating results.

Note 15 Accounts Receivable 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 €150 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.

During the nine months ended September 27, 2025 and September 28, 2024, the Company received cash proceeds of $374 million and $816 million, respectively, from the sales of accounts receivables under its factoring arrangement. As of both September 27, 2025 and December 31, 2024, there were a total of $28 million of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets.

As servicer of sold receivables, the Company had $60 million and $51 million of obligations that were not yet remitted to the bank as of September 27, 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.

Note 16 Segment Information & Geographic Data

The Company’s operations consist of two reportable segments that provide complementary offerings to our customers: Asset Intelligence & Tracking (“AIT”), which includes barcode and card printing, RFID and RTLS offerings, supplies, and services; and Enterprise Visibility & Mobility (“EVM”), which includes mobile computing, data capture, fixed industrial scanning and machine vision, services, and workflow optimization solutions. The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments. The CODM reviews adjusted operating income to assess segment profitability primarily during the Company’s annual budget and forecasting process. The CODM assesses the profitability of each segment relative to its long-term growth objectives in evaluating resource allocation priorities. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below.

Financial information by segment is presented as follows (in millions):

			Three Months Ended												Nine Months Ended
			September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
Net sales:
AIT			$	455					$	410					$	1,335					$	1,199
EVM			865						845						2,586						2,448
Total Net sales			$	1,320					$	1,255					$	3,921					$	3,647
Cost of sales:
AIT			$	225					$	211					$	666					$	629
EVM			461						431						1,360						1,253
Operating expenses:
AIT (1)			$	127					$	116					$	383					$	338
EVM (1)			289						272						860						810
Operating income:
AIT (2)			$	103					$	83					$	286					$	232
EVM (2)			115						142						366						385
Total segment operating income			218						225						652						617
Corporate (3)			(35)						(34)						(91)						(100)
Total Operating income			$	183					$	191					$	561					$	517

(1)AIT and EVM segment operating expenses include Selling and marketing, Research and development, and General and administrative expenses, excluding the amounts classified within Corporate.

(2)AIT and EVM segment operating income includes depreciation and share-based compensation expense. The depreciation and share-based compensation expense amounts are proportionate to each segment’s Net sales.

(3)To the extent applicable, amounts included in Corporate consist of Amortization of intangible assets, Acquisition and integration costs, Exit and restructuring costs, as well as certain other non-recurring costs (impairment of goodwill and other intangibles, and business acquisition purchase accounting adjustments).

Information regarding the Company’s operations by geographic area is contained in the following tables. Net sales amounts are attributed to geographic area based on customer location.

Net sales by region were as follows (in millions):

			Three Months Ended												Nine Months Ended
			September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
North America			$	666					$	628					$	1,969					$	1,839
EMEA			394						405						1,252						1,204
Asia-Pacific			163						132						429						362
Latin America			97						90						271						242
Total Net sales			$	1,320					$	1,255					$	3,921					$	3,647

Note 17 Subsequent Events

Segments

Effective with the fourth quarter, the Company’s reportable segments will be changed to Connected Frontline (“CF”) and Asset Visibility & Automation (“AVA”). The CF segment will consist of our mobile computing products, and related services and software-based offerings that were formerly part of our EVM segment. The AVA segment will consist of our barcode and card printing products and related supplies and sensors, RFID and RTLS offerings, and related services that collectively represented our former AIT segment, as well as our data capture, machine vision, and robotics automation offerings and related services that were formerly part of our EVM segment. This change aligns with how we are operating our business to advance our strategy and the level of detailed financial information reviewed by our chief operating decision-maker going forward. Our CF and AVA results will also exclude share-based compensation expense from the measurement of segment operating income. These changes will not have an impact on our Consolidated Financial Statements.

Elo

On September 30, 2025, the Company acquired Elo Holdings, Inc., the sole stockholder of Elo Touch Solutions, Inc. (collectively, “Elo”), an innovator of solutions that engage customers, enhance self-service, and accelerate automation across a wide range of end markets. Through its acquisition of Elo, the Company expanded its portfolio of self-service and consumer-facing workflow offerings.

The acquisition will be accounted for in the fourth quarter under the acquisition method of accounting for business combinations. The Company’s purchase consideration, which remains subject to standard net working capital adjustments, was approximately $1.3 billion and was comprised of cash paid, net of Elo’s cash on hand.

As part of this business combination, we expect to recognize goodwill that will be non-deductible for tax purposes. The Elo business will be part of the CF segment.