Tommy Maul

Tommy Maul inquired about the anticipated 2-point gross margin headwind from memory components starting in Q2, seeking clarification on its progression and the specific initiatives Zebra Technologies plans to implement for mitigation. He also followed up on the company's share repurchase strategy, asking if the recent aggressive pace would continue given the new authorization.

Answer

CFO Nathan Winters confirmed the 2-point gross margin headwind, detailing mitigation strategies including global price increases effective in March, supplier collaboration, alternative memory sources, and transitioning to higher-density memory. He explained that about half the headwind would be offset by other business efficiencies (robotics exit, lower tariffs, FX favorability) and the other half by pricing benefits and other actions. Regarding share repurchases, Nathan Winters stated that Zebra plans to repurchase around 50% of its full-year free cash flow of $900 million, primarily in the first half, indicating continued aggressive market activity.