| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| **North America** ($ million) | **725**  **[0000877212-23-000055_zbra-20230401.htm:18]**  | **642**  **[0000877212-23-000125_zbra-20230701.htm:22]**  | **517**  **[0000877212-23-000143_zbra-20230930.htm:21]**  | N/A | **612**  **[0000877212-24-000063_zbra-20240330.htm:17]**  | **599**  **[0000877212-24-000151_zbra-20240629.htm:19]**  | **628**  **[0000877212-24-000164_zbra-20240928.htm:19]**  |
| **EMEA** ($ million) | **443**  **[0000877212-23-000055_zbra-20230401.htm:18]**  | **374**  **[0000877212-23-000125_zbra-20230701.htm:22]**  | **269**  **[0000877212-23-000143_zbra-20230930.htm:21]**  | N/A | **380**  **[0000877212-24-000063_zbra-20240330.htm:17]**  | **419**  **[0000877212-24-000151_zbra-20240629.htm:19]**  | **405**  **[0000877212-24-000164_zbra-20240928.htm:19]**  |
| **Asia-Pacific** ($ million) | **154**  **[0000877212-23-000055_zbra-20230401.htm:18]**  | **122**  **[0000877212-23-000125_zbra-20230701.htm:22]**  | **106**  **[0000877212-23-000143_zbra-20230930.htm:21]**  | N/A | **112**  **[0000877212-24-000063_zbra-20240330.htm:17]**  | **118**  **[0000877212-24-000151_zbra-20240629.htm:19]**  | **132**  **[0000877212-24-000164_zbra-20240928.htm:19]**  |
| **Latin America** ($ million) | **83**  **[0000877212-23-000055_zbra-20230401.htm:18]**  | **76**  **[0000877212-23-000125_zbra-20230701.htm:22]**  | **64**  **[0000877212-23-000143_zbra-20230930.htm:21]**  | N/A | **71**  **[0000877212-24-000063_zbra-20240330.htm:17]**  | **81**  **[0000877212-24-000151_zbra-20240629.htm:19]**  | **90**  **[0000877212-24-000164_zbra-20240928.htm:19]**  |

e17525aa59b2a311072f5f6002946813fd6651496c4caba577038d877d3b48a1

Percentage of global employee base impacted by productivity programs (percentage)

Remaining performance obligations for arrangements with an original term exceeding one year (USD billions)

Total net cost savings realized from productivity programs (USD millions)

Net cost savings realized from productivity programs in the first nine months of 2024 (USD millions)

95b7d8160a4745a7b8533facd3b3943712e0b9bf9b3f55a6c1cb9880d90d6d64

Zebra Technologies Corporation is a global leader in the Automatic Identification and Data Capture (AIDC) industry, providing Enterprise Asset Intelligence (EAI) solutions. The company offers a wide range of products, including mobile computing devices, barcode scanners and imagers, RFID readers, specialty printers for barcode labeling and personal identification, real-time location systems (RTLS), and related software applications **[0000877212-24-000164_zbra-20240928.htm:21]** **[0000877212-24-000029_zbra-20231231.htm:45]** **[0000877212-24-000029_zbra-20231231.htm:4]** **[0000877212-24-000164_zbra-20240928.htm:7]**. Additionally, Zebra Technologies provides machine vision and robotics automation solutions, along with comprehensive services such as maintenance, technical support, repair, managed and professional services, and cloud-based software subscriptions **[0000877212-24-000164_zbra-20240928.htm:21]** **[0000877212-24-000029_zbra-20231231.htm:45]** **[0000877212-24-000029_zbra-20231231.htm:4]** **[0000877212-24-000164_zbra-20240928.htm:7]**.

1. **Enterprise Visibility & Mobility (EVM)** - Specializes in automatic information and data capture solutions, including mobile computing and data capture technologies.
2. **Asset Intelligence & Tracking (AIT)** - Focuses on barcode printing and asset tracking technologies, including RFID and real-time location systems (RTLS) offerings.

2aeb2d2ffdc7d6532610fabc115b75ab53b20c01c91b8e37dacb4c26e1def7cb

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD]

Earnings Per Share (EPS) - Diluted [USD]

140b1ae8fed60b8c011c8758f45a79d9559ee71a4b2e1331be0122cdefe577fe

| Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **EVM Segment Total**    | 1,022  **[0000877212-23-000023_zbraex991123122.htm:1]**  | 914  **[0000877212-23-000055_zbra-20230401.htm:18]**  | 755  **[0000877212-23-000125_zbra-20230701.htm:31]**  | 632  **[0000877212-23-000143_zbra-20230930.htm:8]**  | 663  **[0000877212-24-000026_zbraex991123123.htm:1]**  | 783  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 820  **[0000877212-24-000149_zbraex99120240629.htm:1]**  | 845  **[0000877212-24-000162_zbraex99120240928.htm:1]**  |
| **EVM Tangible Products**| N/A     | N/A     | 554  **[0000877212-23-000125_zbra-20230701.htm:31]**  | 434  **[0000877212-23-000143_zbra-20230930.htm:8]**  | N/A     | 564  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 615  **[0000877212-24-000151_zbra-20240629.htm:6]**  | 637  **[0000877212-24-000164_zbra-20240928.htm:8]**  |
| **EVM Services & Software** | N/A  | N/A     | 201  **[0000877212-23-000125_zbra-20230701.htm:31]**  | 198  **[0000877212-23-000143_zbra-20230930.htm:8]**  | N/A     | 219  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 205  **[0000877212-24-000151_zbra-20240629.htm:6]**  | 208  **[0000877212-24-000164_zbra-20240928.htm:8]**  |
| **AIT Segment Total**    | 481  **[0000877212-23-000023_zbraex991123122.htm:1]**  | 491  **[0000877212-23-000055_zbra-20230401.htm:18]**  | 459  **[0000877212-23-000125_zbra-20230701.htm:30]**  | 324  **[0000877212-23-000143_zbra-20230930.htm:8]**  | 346  **[0000877212-24-000026_zbraex991123123.htm:1]**  | 392  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 397  **[0000877212-24-000149_zbraex99120240629.htm:1]**  | 410  **[0000877212-24-000162_zbraex99120240928.htm:1]**  |
| **AIT Tangible Products**| N/A     | N/A     | 432  **[0000877212-23-000125_zbra-20230701.htm:30]**  | 295  **[0000877212-23-000143_zbra-20230930.htm:8]**  | N/A     | 365  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 368  **[0000877212-24-000151_zbra-20240629.htm:6]**  | 382  **[0000877212-24-000164_zbra-20240928.htm:8]**  |
| **AIT Services & Software** | N/A  | N/A     | 27  **[0000877212-23-000125_zbra-20230701.htm:30]**  | 29  **[0000877212-23-000143_zbra-20230930.htm:8]**  | N/A     | 27  **[0000877212-24-000061_zbraex99120240330.htm:1]**  | 29  **[0000877212-24-000151_zbra-20240629.htm:6]**  | 28  **[0000877212-24-000164_zbra-20240928.htm:8]**  |
| **Total Net Sales**      | 1,503  **[0000877212-23-000023_zbraex991123122.htm:1]**  | 1,405  **[0000877212-23-000055_zbra-20230401.htm:18]**  | 1,214  **[0000877212-23-000125_zbra-20230701.htm:7]**  | 956  **[0000877212-23-000143_zbra-20230930.htm:8]**  | 1,009  **[0000877212-24-000026_zbraex991123123.htm:1]**  | N/A     | 1,217  **[0000877212-24-000149_zbraex99120240629.htm:1]**  | 1,255  **[0000877212-24-000162_zbraex99120240928.htm:1]**  |

d3989633862622ef5e0e0242cd227cc89b89cbedba3980b5150232e9af1ab84c

16f4cb4388bb15b036b2ce050881f41413e3121eeceb61a5e359922f2b5b654d

1. Given the macroeconomic uncertainty and higher interest rates raising hurdles for M&A, how do you plan to achieve your growth targets if acquisition opportunities are limited, and are you concerned that delaying M&A could hinder your strategic objectives?
2. With customers continuing to scrutinize their budgets and large deal activity not returning to historic levels, how confident are you in achieving your raised sales growth guidance, and what specific factors give you confidence in a second-half rebound?
3. As some customers consider trading down to lower-tier devices affecting pricing and margins, are you experiencing any margin erosion in specific segments, and how are you mitigating these risks amid competitive pressures?
4. Your cautious approach to inventory management has led you to supply distributors with less product than requested; could this risk missing potential sales if demand picks up faster than expected, and how are you balancing this with the need to prevent overstocking?
5. Considering the modest increase in shipping rates and cost inflation, to what extent could rising logistics costs impact your margins in the second half, and what strategies do you have in place to offset these cost pressures?

3e192a96fde9e64dd2b021ad71bf29bda6290fc412d11acf4b34e8e5ec81f98e

72ba9b0936a719a0751b5bc003201f36219a3ea9e3575fd6273631aa2a50369d

- Datalogic: Competitor in mobile computing and data capture.
- Honeywell: Competitor in mobile computing, data capture, and barcode and card printing.
- Panasonic: Competitor in mobile computing.
- Newland: Competitor in data capture.
- Impinj: Competitor in data capture and RFID and RTLS offerings.
- Cognex: Competitor in fixed industrial scanning and machine vision.
- SICK: Competitor in fixed industrial scanning and machine vision.
- Keyence: Competitor in fixed industrial scanning and machine vision.
- Fargo Electronics (a unit of HID Global): Competitor in barcode and card printing.
- Sato: Competitor in barcode and card printing.
- Toshiba TEC: Competitor in barcode and card printing.
- TSC: Competitor in barcode and card printing.
- Brother: Competitor in barcode and card printing.
- Dymo: Competitor in barcode and card printing.
- Chainway: Competitor in RFID and RTLS offerings.
- Alien: Competitor in RFID and RTLS offerings.
- Rodinbell: Competitor in RFID and RTLS offerings.
- JADAK: Competitor in RFID and RTLS offerings.
- Ubisense: Competitor in RFID and RTLS offerings.
- Invengo: Competitor in RFID and RTLS offerings.

6f02d226549bed92cf6e54570ad94738ecb878d7ad137c3a4ef4571a7049df52

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  - **Q3 Sales Growth**: Expected to be between **25% and 28%** compared to the prior year  **[ZBRA_3394987_2]** .
  - **Q3 Adjusted EBITDA Margin**: Expected to be between **20% and 21%**  **[ZBRA_3394987_2]** .
  - **Q3 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$3 to $3.30**  **[ZBRA_3394987_2]** .
  - **FY 2024 Sales Growth**: Expected to be between **4% and 7%**  **[ZBRA_3394987_3]** .
  - **FY 2024 Adjusted EBITDA Margin**: Expected to be in the range of **20% to 21%**  **[ZBRA_3394987_3]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  - **Q3 Sales Growth**: Expected to be between **25% and 28%** compared to the prior year  **[ZBRA_3394987_2]** .
  - **Q3 Adjusted EBITDA Margin**: Expected to be between **20% and 21%**  **[ZBRA_3394987_2]** .
  - **Q3 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$3 to $3.30**  **[ZBRA_3394987_2]** .
  - **FY 2024 Sales Growth**: Expected to be between **4% and 7%**  **[ZBRA_3394987_3]** .
  - **FY 2024 Adjusted EBITDA Margin**: Expected to be in the range of **20% to 21%**  **[ZBRA_3394987_3]** .
  - **FY 2024 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$12.30 to $12.90**  **[ZBRA_3394987_3]** .
  - **FY 2024 Free Cash Flow**: Expected to be at least **$700 million**  **[ZBRA_3394987_3]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024 and FY 2024
- **Guidance**:
  - **Q2 Sales**: Expected to decrease between **1% and 5%** compared to the prior year  **[ZBRA_3381494_2]** .
  - **Q2 Adjusted EBITDA Margin**: Expected to be slightly above **19%**  **[ZBRA_3381494_2]** .
  - **Q2 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$2.60 to $2.90**  **[ZBRA_3381494_2]** .
  - **FY 2024 Sales Growth**: Expected to be between **1% and 5%**  **[ZBRA_3381494_2]** .
  - **FY 2024 Adjusted EBITDA Margin**: Expected to be approximately **20%**  **[ZBRA_3381494_2]** .
  - **FY 2024 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$11.25 to $12.25**  **[ZBRA_3381494_2]** .
  - **FY 2024 Free Cash Flow**: Expected to be at least **$600 million**, including a **$45 million** settlement payment  **[ZBRA_3381494_2]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  - **Q1 2024 Sales**: Expected to decrease between **17% and 20%** compared to the prior year  **[ZBRA_3373508_2]** .
  - **Q1 2024 Adjusted EBITDA Margin**: Expected to be approximately **18%**  **[ZBRA_3373508_2]** .
  - **Q1 2024 Non-GAAP Diluted Earnings Per Share**: Expected to be in the range of **$2.30 to $2.60**  **[ZBRA_3373508_2]** .
  - **FY 2024 Sales**: Expected to be in the range of a **1% decline to 3% growth**  **[ZBRA_3373508_2]** .
  - **FY 2024 Adjusted EBITDA Margin**: Expected to be approximately **19%**, with an improvement to **20%** in the second half of the year  **[ZBRA_3373508_3]** **[ZBRA_3373508_12]** .
  - **FY 2024 Free Cash Flow**: Expected to be at least **$550 million**, including a **$45 million** settlement payment  **[ZBRA_3373508_3]** .
  - **Cost Savings**: An expanded cost reduction plan expected to deliver **$120 million** of net annualized operating savings, with **$60 million** of incremental benefit expected in 2024  **[ZBRA_3373508_16]** .

28868a79832c119efa35800582f0f43c8903ede0ce2b2dbd5ff332c7588c2802

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

dde0ec773520a9e0c37af0a28a8716499d57550ab26c0162855b3204661d7812

North America

EMEA

Asia-Pacific

Latin America

- United States

- Germany

- United Kingdom

- Singapore

- Other Countries

Total Revenue

e495637c6acb708e870e59e4ac362e7fbe4c7644d52fc527b811411ce49d5e9a

| Name                  | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                                   |
|-----------------------|--------------------------------------------------------------------------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| William J. Burns      | Chief Executive Officer                                                  | March 1, 2023      | William J. Burns was named CEO of Zebra Technologies effective March 1, 2023. He has over 30 years of experience in the technology sector and joined Zebra in 2015. Prior to becoming CEO, he served as Chief Product & Solutions Officer  **[0001558370-24-004333_zbra-20240509xdef14a.htm:31]** **[0001308179-23-000459_lzbra2023_def14a.htm:24]** .                                                                                                           |
| Robert J. Armstrong   | Chief Marketing Officer                                                  | March 2023         | Robert J. Armstrong was appointed as CMO of Zebra Technologies in March 2023. He previously served as Senior Vice President of Integrated Marketing & Channels at Zebra  **[0001558370-24-004333_zbra-20240509xdef14a.htm:83]** **[0001308179-23-000459_lzbra2023_def14a.htm:72]** .                                                                                                                                                                             |
| Michael Cho           | Chief Strategy Officer                                                   | February 2013      | Michael Cho joined Zebra Technologies in 2010 and has served as Chief Strategy Officer since February 2013. He previously held roles as Vice President of Strategy and Vice President of Corporate Development  **[0001558370-24-004333_zbra-20240509xdef14a.htm:83]** **[0001308179-23-000459_lzbra2023_def14a.htm:73]** .                                                                                                                                      |
| Tamara D. Froese      | Chief Supply Chain Officer                                               | November 2022      | Tamara D. Froese was appointed as Chief Supply Chain Officer at Zebra Technologies in November 2022. She joined Zebra in 2020 and has extensive experience in supply chain management  **[0001558370-24-004333_zbra-20240509xdef14a.htm:83]** **[0001308179-23-000459_lzbra2023_def14a.htm:73]** .                                                                                                                                                               |
| Richard E. Hudson     | Chief Revenue Officer                                                    | November 2023      | Richard E. Hudson was named Chief Revenue Officer of Zebra Technologies in November 2023. He previously served as Senior Vice President and General Manager for EMEA starting in 2017  **[0001558370-24-004333_zbra-20240509xdef14a.htm:83]** **[0001558370-24-004333_zbra-20240509xdef14a.htm:16]** .                                                                                                                                                               |
| Cristen L. Kogl       | Chief Legal Officer, General Counsel & Corporate Secretary               | September 2018     | Cristen L. Kogl joined Zebra Technologies in 2015 and has served as Chief Legal Officer, General Counsel & Corporate Secretary since September 2018  **[0001558370-24-004333_zbra-20240509xdef14a.htm:84]** **[0001308179-23-000459_lzbra2023_def14a.htm:73]** .                                                                                                                                                                                                 |
| Colleen M. O’Sullivan | Senior Vice President, Chief Accounting Officer                          | 2016               | Colleen M. O’Sullivan joined Zebra Technologies in 2016 as Chief Accounting Officer. She previously held various positions, including Senior Vice President and CFO at Career Education Corporation  **[0001558370-24-004333_zbra-20240509xdef14a.htm:84]** **[0001308179-23-000459_lzbra2023_def14a.htm:74]** .                                                                                                                                                |
| Jeffrey F. Schmitz    | Chief People Officer                                                     | March 2023         | Jeffrey F. Schmitz is the Chief People Officer at Zebra Technologies. He joined Zebra in 2016 as Chief Marketing Officer and was named Chief People Officer in March 2023  **[0001558370-24-004333_zbra-20240509xdef14a.htm:84]** .                                                                                                                                                                              |
| Joseph R. White       | Chief Product & Solutions Officer                                        | March 2023         | Joseph R. White is the Chief Product & Solutions Officer at Zebra Technologies. He joined Zebra when Matrics Technologies was acquired by Zebra and became Chief Product & Solutions Officer in March 2023  **[0001558370-24-004333_zbra-20240509xdef14a.htm:85]** **[0001308179-23-000459_lzbra2023_def14a.htm:74]** **[0001558370-24-004333_zbra-20240509xdef14a.htm:16]** .                                                                                                                                      |
| Nathan A. Winters     | Chief Financial Officer                                                  | January 2021       | Nathan A. Winters was appointed as CFO of Zebra Technologies in January 2021. He initially served as Acting CFO from August 2020 through January 2021  **[0001558370-24-004333_zbra-20240509xdef14a.htm:85]** **[0001308179-23-000459_lzbra2023_def14a.htm:74]** .                                                                                                                                                                                               |
| Ken Miller            | Board of Directors, Audit Committee (expected start date if elected)     | Future Date: 2024  | Kenneth B. Miller is a nominee for the Board of Directors at Zebra Technologies, specifically as a Class I director. He is currently the Executive Vice President and CFO of Juniper Networks. He was nominated to stand for election at Zebra's 2024 Annual Meeting  **[0001558370-24-004333_zbra-20240509xdef14a.htm:30]** **[0001558370-24-004333_zbra-20240509xdef14a.htm:25]** **[0000877212-24-000058_zebradefa14a.htm:2]** .                                                                            |

09da00dd64caef7f86cbd51a80c4f133b188650eb554c57a6dceb3ab3f4d7d82

| Program Details            | Program 1                  | Program 2                  |
|----------------------------|----------------------------|----------------------------|
| Approval Date              | July 30, 2019  **[0000877212-24-000164_zbra-20240928.htm:29]**           | May 17, 2022  **[0000877212-24-000164_zbra-20240928.htm:29]** **[0000877212-24-000164_zbra-20240928.htm:38]**         |
| End Date/Duration          | Completed in Q4 2022  **[0000877212-24-000164_zbra-20240928.htm:29]**    | No stated expiration date  **[0000877212-24-000164_zbra-20240928.htm:29]** **[0000877212-24-000164_zbra-20240928.htm:38]**  |
| Total additional amount    | $1 billion  **[0000877212-24-000164_zbra-20240928.htm:29]**              | $1 billion  **[0000877212-24-000164_zbra-20240928.htm:29]** **[0000877212-24-000164_zbra-20240928.htm:38]**           |
| Remaining authorization    | $0  **[0000877212-24-000164_zbra-20240928.htm:29]**                      | **$877 million**  **[0000877212-24-000164_zbra-20240928.htm:29]** **[0000877212-24-000164_zbra-20240928.htm:38]**     |
| Details                    | Completed  **[0000877212-24-000164_zbra-20240928.htm:29]**               | Active, subject to market conditions  **[0000877212-24-000164_zbra-20240928.htm:29]** **[0000877212-24-000164_zbra-20240928.htm:38]**  |

08ddc592d2f5502582baa53a5c45413d5de4d61b128f056d809e85442737a068

Asset Intelligence & Tracking

- Tangible Products

- Services and Software

Enterprise Visibility & Mobility

Legacy Zebra Segment

Enterprise Segment

- Hardware

- Supplies

- Service and Software

- Shipping and Handling

7776e7f60b631ea62c7afd7aae2b96f1ab3708d28ffdbdd9b20e960d1aa6b291

**Quarterly guidance for Q3 2024:**
- **Q3 Sales Growth**: 25%–28%  **[ZBRA_3394987_2]**  (no change from prior guidance 25%–28%  **[ZBRA_3394987_2]** )  
- **Q3 Adjusted EBITDA Margin**: 20%–21%  **[ZBRA_3394987_2]**  (no change from prior guidance 20%–21%  **[ZBRA_3394987_2]** )  
- **Q3 Non-GAAP Diluted EPS**: $3–$3.30  **[ZBRA_3394987_2]**  (no change from prior guidance $3–$3.30  **[ZBRA_3394987_2]** )  

**Annual guidance for FY 2024:**
- **FY 2024 Sales Growth**: 4%–7%  **[ZBRA_3394987_3]**  (no change from prior guidance 4%–7%  **[ZBRA_3394987_3]** )  
- **FY 2024 Adjusted EBITDA Margin**: 20%–21%  **[ZBRA_3394987_3]**  (no change from prior guidance 20%–21%  **[ZBRA_3394987_3]** )  

61b762911a585cf8653effd452e1162c939674c26b314c4a445d68e65f167c9f

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2005  **[0000877212-24-000029_zbra-20231231.htm:59]**    | Present  | Current auditor   |

49bbc064349f9d83619b8a733badee37ae286f75c65031c0ab08797528d5093a

dc311105a3a623237c24cc533f2490f97718737e185af1029deb7ccc43c1ed11

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $1,255 million (+31% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:25]**   
- Asset Intelligence & Tracking: $410 million (+27% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:8]**   
- Enterprise Visibility & Mobility: $845 million (+34% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:8]**   
- North America: $628 million (+21% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:25]** ,  
  EMEA: $405 million (**+51% YoY**)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:25]** ,  
  Asia-Pacific: $132 million (+25% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:25]** ,  
  Latin America: $90 million (+41% YoY)  **[0000877212-24-000164_zbra-20240928.htm:19]** **[0000877212-23-000143_zbra-20230930.htm:25]**   
- Operating Income: $191 million (vs. -$12 million in Q3 2023)  **[0000877212-24-000164_zbra-20240928.htm:2]** **[0000877212-23-000143_zbra-20230930.htm:2]** **[0000877212-23-000143_zbra-20230930.htm:25]** **[0000877212-23-000143_zbra-20230930.htm:21]**   
- Net Income: $137 million (vs. -$15 million in Q3 2023)  **[0000877212-24-000164_zbra-20240928.htm:2]** **[0000877212-23-000143_zbra-20230930.htm:2]** **[0000877212-23-000143_zbra-20230930.htm:25]** **[0000877212-23-000143_zbra-20230930.htm:6]** **[0000877212-23-000143_zbra-20230930.htm:3]**   

41ad6da69eb208f69bc996cbf0ae4ff31132510f01e298aa3027cfadc28d5dc2

439dc54ec7ff4751fed9852a8fec56b47f119bc6638ffad92081774a7574ea26

- **Macroeconomic uncertainty and higher interest rates are causing Zebra to be cautious with acquisitions**, leading to higher hurdles for potential investments, which may limit growth opportunities.  **[ZBRA_3394987_27]**
- **Customers are scrutinizing budgets and delaying large deployments due to economic uncertainty**, potentially pushing significant projects into 2025 and impacting near-term revenue growth.  **[ZBRA_3394987_9]**
- **Zebra is carefully managing inventory levels amid concerns about demand**, limiting the supply of products to distributors despite their requests for more, which could constrain sales growth.  **[ZBRA_3394987_11]**

97d73d6a62711650d33d7fb9f885525a0e91f36bcc406bbf3cad30b22e6ecbde

- **Pent-up customer demand due to delayed upgrades** is expected to drive future sales growth, as customers can no longer postpone refreshing their aging equipment. Management stated that customers have been "sweating some of their assets longer than they normally would. They can only do that so long," indicating an upcoming need for upgrades.  **[ZBRA_3362967_8]** **[ZBRA_3362967_19]** **[ZBRA_3362967_10]**
- **Significant growth opportunities in manufacturing and healthcare markets** are anticipated by leveraging Zebra's advanced solutions like machine vision, robotics, and healthcare-specific products. These less penetrated markets are a focus for future growth as the company reallocates resources to capture their potential.  **[ZBRA_3362967_16]**
- **Implementation of $100 million in annualized cost savings** positions Zebra to improve profitability and return to previous levels. Management expressed confidence, stating "we would expect to get back to the levels that we've had in the past, and there's no reason why we wouldn't," aided by cost reductions and expected demand recovery.  **[ZBRA_3362967_22]** **[ZBRA_3362967_15]**

dda82684a03d32b54b09f95a6be557de8cdd2d42e86988aaa5619cc5fa936fd3

| Year  | Amount Due (Millions) | Debt Type                  | Interest Rate (%) | % of Total Debt                                                                 |
|-------|------------------------|----------------------------|-------------------|---------------------------------------------------------------------------------|
| 2024  | 89                    | Current Portion of Term Loan A | 6.60            | 4.1% = (89 / 2183) * 100 **[0000877212-24-000164_zbra-20240928.htm:2]** **[0000877212-24-000164_zbra-20240928.htm:27]**                                       |
| 2026  | N/A                   | Term Loan A (Quarterly Installments Begin) | 6.60 | N/A                                                                             |
| 2027  | Majority of Term Loan A | Term Loan A               | 6.60            | N/A                                                                             |
| 2027  | N/A                   | Receivables Financing Facility | 5.89          | N/A                                                                             |
| 2027  | N/A                   | Revolving Credit Facility | 6.19            | N/A                                                                             |
| 2032  | 500                   | Senior Notes              | 6.50            | 22.9% = (500 / 2183) * 100 **[0000877212-24-000164_zbra-20240928.htm:2]** **[0000877212-24-000164_zbra-20240928.htm:27]**                                     |

f0aabf4c111b09c3005b62eef5a74c63641d327d2d8162da0ccdc2df1ad1a025

- Zebra is seeing **demand stabilize** and **modest improvement in large order activity**, particularly in **mobile computing** and **retail**, indicating the beginning of a recovery.  **[ZBRA_3381494_7]**
- The company is targeting an **adjusted EBITDA margin above 20%** as a baseline and expects margin expansion driven by increased volume and **restructuring actions**, with potential for greater margins as they scale higher-margin products in emerging markets like **machine vision** and **software**.  **[ZBRA_3381494_26]**
- Zebra has a **large installed base** that will need to be **refreshed**, and **mobile computing** is beginning to recover, especially in **retail**, with an expectation that other segments and regions will follow, leading to future growth opportunities.  **[ZBRA_3381494_17]**

30d5af4e1b0d1ce2f27e5be98e922bf10e35ad331ef38dbf257fd762efd1307d

- **Zebra Technologies achieved a gross margin of 48.6% in Q2 2024, the highest in three years**, benefiting from strength in run rate and mid-tier activity, indicating strong profitability.  **[ZBRA_3394987_7]**
- **Mobile computing returned to double-digit growth**, being the first segment to decline and the first to recover, showing early signs of demand recovery and potential for continued momentum.  **[ZBRA_3394987_9]**
- The company maintains a strong competitive position, with no significant changes in the competitive environment, and is well-positioned to **gain market share** as customers refresh their devices, particularly with upgrades anticipated in 2025.  **[ZBRA_3394987_21]** **[ZBRA_3394987_10]**

d1b73f3de143589b2d63bb2061df3a2f88ff4b64dd84c68ac36ba574e82f2c12

1. **Guidance and Demand Trends**  
   **Q:** How do you see demand progressing through the year?  
   **A:** We are cautious about the demand environment, expecting modest sequential improvement as we move through the second half of 2024. Our Q1 guide is down **17% to 20%** sequentially but improves from Q4 as we are not assuming any additional distributor destocking. The full-year guide's **1%** growth at the midpoint is entirely driven by the 2023 destocking, with the market flat or slightly down in Q2 and slightly up in the second half. Given the lack of visibility and firm commitments in the pipeline, we believe this is appropriate.  **[ZBRA_3373508_8]** 

2. **Long-term Growth Outlook**  
   **Q:** Is there any change to your long-term 5%-7% growth guidance?  
   **A:** No, we remain confident in our long-term growth rate of **5% to 7%** over the cycle. Current sales declines are due to a cyclical bottom accentuated by the pandemic. We believe the secular trends to digitize and automate customer operations remain intact, and we are well-positioned to continue being the market leader and to take share as markets recover.  **[ZBRA_3373508_15]** 

3. **Margin Outlook**  
   **Q:** Can you discuss your margin guidance and any pressures?  
   **A:** For the full year, our EBITDA margin guidance is **19%**, increasing to **20%** in the second half and heading into 2025. This is about **1 point higher** than 2023, driven by favorable pricing, lower premium supply chain costs, and some volume leverage. The restructuring benefits of approximately **$60 million** are offset by increased incentive compensation costs. We expect modest sequential improvements in gross margin throughout the year, primarily driven by these factors.  **[ZBRA_3373508_12]** **[ZBRA_3373508_17]** **[ZBRA_3373508_18]** 

4. **Backlog and Destocking**  
   **Q:** Can you update us on destocking and backlog trends?  
   **A:** In Q4, we experienced about **$20 million to $25 million** more incremental destocking than originally guided, but this was offset by higher demand, allowing us to come in above our guidance midpoint. We believe destocking is largely behind us, setting us up well for 2024. Our backlog has improved sequentially entering Q1, driven by uptick in year-end spend, particularly retail-related orders, bringing us back to pre-pandemic levels.  **[ZBRA_3373508_10]** **[ZBRA_3373508_7]** 

5. **Share Gains and Opportunities**  
   **Q:** Where do you see opportunities for share gains?  
   **A:** We see significant opportunities across our vertical markets. Retail is likely returning first, with customers showing optimism and engaging with our modern store initiatives. In transportation and logistics, we help customers address labor constraints and supply chain visibility, with opportunities in technologies like RFID. Manufacturing is an area where we are less penetrated, and we are offering new solutions in machine vision and robotic automation. Additionally, healthcare presents opportunities to automate workflows and connect assets, patients, and staff.  **[ZBRA_3373508_9]** 

6. **Software and Services Growth**  
   **Q:** What are your expectations for software and services growth?  
   **A:** Software and services are recurring revenue streams that have outperformed our broader product portfolio. We are seeing strong attach rates on mobile devices and have introduced our Work Cloud software, combining multiple assets to enhance productivity in retail through communication, collaboration, task management, and demand planning. We are also focusing on improving margins and profitability in these areas, and we expect continued growth in 2024.  **[ZBRA_3373508_16]** 

7. **Supply Commitments and One-time Charges**  
   **Q:** What's the status of your long-term supply commitments and the $10 million expense?  
   **A:** The **$10 million** expense was a one-time charge in Q4, associated with canceling and deferring purchase commitments from a 2021 contract with one supplier. This action is behind us, with no structural changes to our costs moving forward. We have made significant progress, with a **75% decrease** in some long-term purchase commitments, and are focusing on managing components with our Tier 1 manufacturers to optimize inventory and flexibility.  **[ZBRA_3373508_13]** 

8. **Underpenetrated Markets**  
   **Q:** How are you approaching opportunities in underpenetrated markets like Japan and government?  
   **A:** We see significant opportunities in markets where we have lower shares. In Japan, we have won contracts with the largest postal carrier and retailer, and we're engaging with major system integrators and cellular carriers. We've adjusted our channel strategy and hired a new sales leader to focus on expanding beyond retail and postal. In the U.S. government sector, we have a new sales leader refocusing on government opportunities, including public safety, by building our partner community and expanding our reach.  **[ZBRA_3373508_20]** 

9. **RFID and Machine Vision Opportunities**  
   **Q:** What do you expect from RFID and machine vision technologies in 2024?  
   **A:** We continue to see strong interest in RFID across many verticals, expanding beyond retail apparel into track and trace, supply chains, parcel tracking, baggage tracking, manufacturing, and healthcare. We have the broadest RFID solution set and have experienced strong double-digit growth in RFID, including in 2023. In machine vision, we focus on manufacturing (automotive, food and beverage) and transportation logistics (warehouse and distribution). With our acquisitions of Matrox and Adaptive Vision, we offer a broad, differentiated solution, combining hardware and software to enable easy automation upgrades for our customers. We believe both RFID and machine vision represent tremendous opportunities for growth.  **[ZBRA_3373508_21]** 

10. **Strategies to Stimulate Demand**  
    **Q:** Are you implementing strategies to stimulate new product demand amid customers sweating assets?  
    **A:** Yes, we are working closely with customers who are using devices longer than normal to encourage upgrades. Drivers for upgrades include technology transitions like 4G to 5G, faster WiFi (WiFi 6), and OS upgrades, as older devices eventually lose support for new Android releases and security patches. We're also expanding use cases by adding functionalities like facial recognition, integrated RFID, and showcasing future capabilities like generative AI on devices. Additionally, we are offering combined software and hardware solutions as a service, such as wearable devices with task management and collaboration tools, providing an OpEx-based recurring revenue model that can be more appealing in the current environment.  **[ZBRA_3373508_19]** 

11. **Interest Expense and Refinancing Opportunities**  
    **Q:** Are you considering refinancing to reduce interest expense?  
    **A:** We feel good about our current debt position and cost of borrowing, which includes all crediting and banking fees. We are always looking at opportunities to refinance if it makes sense given the environment, but currently, we don't feel at a disadvantage relative to our debt cost position.  **[ZBRA_3373508_10]** 

12. **R&D Expense Outlook**  
    **Q:** How should we think about R&D expense cadence through the year?  
    **A:** The sequential decline from Q3 to Q4 was due to cost actions and timing. We expect R&D expenses to increase slightly in 2024 as we reset compensation plans, including incentive compensation. Typically, the first half is more front-end loaded due to project timing, while Q4 is lighter due to holidays. We anticipate a similar trajectory throughout the year with a potential uptick from resetting comp plans.  **[ZBRA_3373508_22]** 

13. **Shipping Issues Impact**  
    **Q:** Are overseas shipping issues impacting your business?  
    **A:** We are monitoring escalating tensions in the Red Sea, which primarily impact our printing business into EMEA shipped via ocean through the Suez Canal. Most of our products are shipped by air or ocean to the U.S. West Coast. Currently, we expect a modest impact on extended lead times in EMEA and a negligible impact on margins in Q1. We have mitigation plans in place pending further escalation.  **[ZBRA_3373508_14]** 

14. **Capital Deployment Priorities**  
    **Q:** With improving free cash flow, what are your capital deployment priorities?  
    **A:** We are prioritizing debt paydown of our variable rate debt in the short term, as we ended the quarter at **2.5x** debt leverage, the high end of our target range. We expect the debt leverage ratio to increase slightly in the first half due to profitability comparisons but decline in the second half. As always, we will reassess capital deployment opportunities, including share buybacks or M&A, as the year progresses.  **[ZBRA_3373508_22]** 

15. **Additional Cost Savings Potential**  
    **Q:** Is there more room to take out R&D expenses after Q1?  
    **A:** The decline in R&D expenses from Q3 to Q4 was due to cost actions already taken. While we expect expenses to increase slightly in 2024 due to resetting compensation plans, we anticipate a similar trajectory through the year. We have not indicated additional cost reductions in R&D beyond what has been planned.  **[ZBRA_3373508_22]** 

08c1a1c7da336320a71fa163385b2f05e0e38dc0293a84a7444fc5b1f192ca9b

3c18e4fb094f2c2ffb86f91a5a4cda399d5c84b6144935a38508e0a91ee30402

- **Continued Weak Demand with No Signs of Broad Market Recovery**: Management noted that they are not seeing any signs of a broad market recovery and remain cautious in their planning due to lack of visibility and firm commitments from customers.  **[ZBRA_3373508_11]**
- **Customers Extending the Use of Existing Equipment ("Sweating Assets")**: Customers are postponing upgrades and prolonging the use of their current devices, impacting Zebra's sales as they delay new purchases and deployments.  **[ZBRA_3373508_18]**
- **Reduced Expectations for Large Deployments**: The company has pulled back on previous assumptions of securing large mega deployments in the second half of the year, indicating potential challenges in driving significant sales growth from major projects.  **[ZBRA_3373508_11]**

3afe3f9f4b92f9acb4d0ffddb8e5511886073babad1a70737b44f01723ac2691

1. **Large Project Activity**  
   **Q:** What's needed to revive large projects? Guidance upside?  
   **A:** Management observed early signs of recovery in Q1, especially in retail and e-commerce, with better-than-expected sales in Q2.  **[ZBRA_3394987_5]**  However, large deal activity remains well below historic levels due to customer caution amid market uncertainty.  **[ZBRA_3394987_5]**  Customers are spreading large deployments into midsized or smaller deals over longer periods.  **[ZBRA_3394987_5]**  The pipeline remains strong, but more momentum in large orders is needed for a broader recovery.  **[ZBRA_3394987_5]** 

2. **EVM Margin Improvement**  
   **Q:** Why were EVM margins better than expected?  
   **A:** EVM gross margins reached **48.6%**, the highest in three years.  **[ZBRA_3394987_7]**  This improvement was driven by strength in run-rate and mid-tier business, positively impacting margins in the EVM segment.  **[ZBRA_3394987_7]**  Continued strength in services and software margins, heavily weighted towards EVM, also contributed.  **[ZBRA_3394987_7]**  Additionally, fully rolling over premium supply chain costs boosted margins.  **[ZBRA_3394987_7]** 

3. **EBITDA Margin Outlook**  
   **Q:** Why not see better pull-through in H2 margins with top-line growth?  
   **A:** The EBITDA margin guidance for Q3 is **20%-21%**, up year-over-year due to volume leverage of nearly 9 points.  **[ZBRA_3394987_8]**  However, a similar deal and business mix from Q2 to Q3 results in a similar margin profile.  **[ZBRA_3394987_8]**  Incremental benefits from restructuring actions realized in Q2 are not expected to repeat.  **[ZBRA_3394987_8]**  A modest uptick is implied in the Q4 guidance from incremental volume.  **[ZBRA_3394987_8]** 

4. **Device Upgrade Cycle**  
   **Q:** Are device upgrades expected, given aging installed base from COVID sales?  
   **A:** Customers have been utilizing capacity built during the pandemic, leading to excess capacity as the economy slowed.  **[ZBRA_3394987_13]**  As this capacity is absorbed, early signs indicate customers are beginning to purchase again.  **[ZBRA_3394987_13]**  There is a solid pipeline for mobile computing refreshes and new use cases.  **[ZBRA_3394987_13]**  Management is confident that as the macro environment improves, customers will upgrade devices, resulting in an uptick in large orders.  **[ZBRA_3394987_13]** 

5. **Emerging Businesses Outlook**  
   **Q:** Update on RFID, Matrox, Fetch trends and growth outlook?  
   **A:** RFID faced challenges in Q2 due to tough comparisons from large opportunities a year ago but is expected to return to growth in H2 with a strong backlog and pipeline across retail, transportation, logistics, and manufacturing.  **[ZBRA_3394987_12]**  Machine vision is currently challenged, with the Matrox acquisition affected by exposure to the struggling semiconductor equipment market.  **[ZBRA_3394987_12]**  However, diversification into automotive and logistics is progressing well.  **[ZBRA_3394987_12]**  Early wins in combining software assets with mobile devices, particularly in wearables, are promising.  **[ZBRA_3394987_12]** 

6. **Channel Inventory Levels**  
   **Q:** Are you providing distributors more products as they request?  
   **A:** Global channel inventory levels remain normalized in days on hand.  **[ZBRA_3394987_11]**  While some partners request more inventory, the company collaborates closely to ensure appropriate levels that support end-users without getting ahead amid uncertainty.  **[ZBRA_3394987_11]**  This approach balances inventory across regions.  **[ZBRA_3394987_11]** 

7. **Large Deal Timing**  
   **Q:** Are customer budgets set for this year? When does focus shift to 2025?  
   **A:** Customers continue to scrutinize budgets due to economic uncertainty, affecting large deployments in the second half.  **[ZBRA_3394987_9]**  Visibility into year-end spending is limited, and there's reluctance to proceed with projects.  **[ZBRA_3394987_9]**  Management expects stabilization and increased confidence as macro factors improve into 2025.  **[ZBRA_3394987_9]** 

8. **Competitive Landscape**  
   **Q:** Any changes in competition for large deals?  
   **A:** The competitive environment remains largely unchanged, with Zebra maintaining market share.  **[ZBRA_3394987_10]**  The lack of large deals is attributed to market conditions, not increased competition.  **[ZBRA_3394987_10]**  The company is confident in its market position and continues to win in the marketplace.  **[ZBRA_3394987_10]** 

9. **Shipping Cost Inflation**  
   **Q:** Experiencing cost inflation from higher shipping rates? What's in guidance?  
   **A:** There has been a modest increase in shipping rates due to issues like the Red Sea situation and stronger demand, particularly in ocean freight.  **[ZBRA_3394987_6]**  The incremental costs are modest and included in the full-year guidance.  **[ZBRA_3394987_6]**  The company is taking actions to mitigate impacts, such as leveraging different air modes and improving transit times.  **[ZBRA_3394987_6]** 

85ff1dfeafedaa9b6af45278030a0b52969b37e067273b72ebf4a784317e05d5

1. **Second Half Guidance**  
   **Q:** What's driving your second half sales outlook?  
   **A:** Nathan Winters explained that the second half outlook is based on current order velocity and they are not assuming any mega deployments due to a lack of firm customer commitments.  **[ZBRA_3381494_8]**  They expect **Q3 to look similar to Q2**, which resembles Q1 in run rate and trajectory.  **[ZBRA_3381494_6]** **[ZBRA_3381494_8]**  Growth in the second half is primarily driven by lapping prior destocking activity rather than a significant uptick in large deals.  **[ZBRA_3381494_7]** **[ZBRA_3381494_8]** 

2. **Recovery in Key Markets**  
   **Q:** Are you seeing recovery in manufacturing and T&L?  
   **A:** William Burns stated they are **not yet seeing recovery** in manufacturing and transportation and logistics (T&L).  **[ZBRA_3381494_21]**  T&L customers are still absorbing capacity built during the pandemic and optimizing operations.  **[ZBRA_3381494_21]**  Manufacturing is impacted by broader market uncertainty, but they view it as a longer-term opportunity.  **[ZBRA_3381494_21]** **[ZBRA_3381494_9]** 

3. **Margins and Cost Actions**  
   **Q:** Why is adjusted EBITDA margin guidance lower for Q2?  
   **A:** Nathan Winters explained that the **Q2 adjusted EBITDA margin is guided slightly above 19%**, down from **19.9% in Q1**, entirely due to seasonality in their retail software business.  **[ZBRA_3381494_10]**  They expect margins to **uptick through the year** as cost actions take effect and seasonal spending decreases.  **[ZBRA_3381494_19]** **[ZBRA_3381494_26]** 

4. **Pipeline and Visibility**  
   **Q:** How does your pipeline visibility compare to six months ago?  
   **A:** William Burns noted that while they've seen modest improvement in large order activity, particularly in mobile computing and retail, **visibility remains uncertain** due to early-stage deals and cautious customer spending.  **[ZBRA_3381494_13]**  Nathan Winters added that deals are in earlier stages of the funnel than preferred at this point in the year.  **[ZBRA_3381494_13]** 

5. **Capital Allocation Plans**  
   **Q:** Any plans for buybacks or M&A given improving cash flow?  
   **A:** Nathan Winters indicated they plan to prioritize **debt paydown** with their **$600 million** of free cash flow, but will reassess buybacks as the year progresses, particularly in the second half.  **[ZBRA_3381494_18]** **[ZBRA_3381494_25]**  William Burns stated that their **M&A philosophy remains the same**, focusing on adjacent and synergistic assets, but there's a higher bar given the current macro environment and debt leverage.  **[ZBRA_3381494_20]** 

6. **Asia-Pacific Performance**  
   **Q:** What's impacting your performance in China?  
   **A:** William Burns explained that Asia-Pacific underperformed due to **declines in China**, which is expected to have a **longer recovery**.  **[ZBRA_3381494_9]**  They are encouraged by bright spots in retail and larger orders in Australia and New Zealand, and see opportunities outside China in Southeast Asia and India.  **[ZBRA_3381494_9]** 

7. **RFID Business Trends**  
   **Q:** How is your RFID business performing?  
   **A:** William Burns highlighted that **RFID is a growing opportunity** across multiple verticals beyond retail apparel, including track and trace, parcel tracking in T&L, and manufacturing.  **[ZBRA_3381494_16]**  They've seen **strong growth** across their RFID portfolio over the past few years and hold the **broadest set of RFID solutions** in the market.  **[ZBRA_3381494_16]** 

8. **Channel Inventory Levels**  
   **Q:** Are channel inventories normalized?  
   **A:** Nathan Winters stated that global channel inventories are **normalized to support current demand** and are within expected ranges.  **[ZBRA_3381494_12]**  There are no meaningful impacts expected from changes in distribution inventory levels in the quarter or full-year guidance.  **[ZBRA_3381494_12]** 

9. **Healthcare Market Progress**  
   **Q:** How is your healthcare market progressing?  
   **A:** William Burns mentioned that healthcare is impacted by tighter budgets and margins, but they continue to drive **productivity solutions** that enhance efficiency.  **[ZBRA_3381494_23]**  They see **home healthcare as an opportunity** and are optimistic about customer engagement, though they want to see more orders materialize.  **[ZBRA_3381494_23]** 

10. **Mobile Computing Refresh Cycle**  
    **Q:** When do you expect the refresh cycle in mobile computing?  
    **A:** William Burns noted that the mobile computing **refresh cycle is beginning**, first in retail and e-commerce.  **[ZBRA_3381494_17]**  Customers have started to absorb capacity and are initiating projects, but deployments are **more measured**.  **[ZBRA_3381494_17]**  They expect a **measured overall recovery**, with refresh cycles varying by customer.  **[ZBRA_3381494_17]** 

b9ef953896361956df57164180ac644240934185403b4c38d9b7170f48c8bd99

1. **Demand Outlook for 2025**  
   **Q:** Are large orders returning in 2025?  
   **A:** Management is optimistic that the recovery will continue into **2025** based on the strong second half of **2024**, but they have limited visibility into large deployments. They expect seasonality to return but note that demand remains uneven across sectors, with manufacturing still lagging.  **[ZBRA_3404329_11]** 

2. **Margin Outlook into 2025**  
   **Q:** Can margins remain at current levels in 2025?  
   **A:** While gross margins reached over **49%** recently, sustaining this level into **2025** depends on the mix of large deals. They benefited from lower large deal volume and operational efficiencies, but higher future large deal volumes could pressure margins.  **[ZBRA_3404329_7]** 

3. **Visibility into Large Deployments**  
   **Q:** How far ahead do you see large orders?  
   **A:** They typically have about **6 months** of visibility into large projects as customers plan ahead, but current macro uncertainties are affecting timing and visibility of large deployments.  **[ZBRA_3404329_10]** 

4. **Impact of Potential Tariffs**  
   **Q:** How are you preparing for potential tariffs?  
   **A:** Management is actively planning for potential tariffs by diversifying their supply chain and working on mitigation strategies. About **50%** of finished goods production is now outside China, but moving the component supply chain remains complex.  **[ZBRA_3404329_15]** ,  **[ZBRA_3404329_19]** 

5. **Capital Allocation Plans**  
   **Q:** Will you make acquisitions or repurchase shares?  
   **A:** With a leverage ratio of **1.6x**, they are comfortable resuming share repurchases and considering acquisitions that align with their strategic vision, emphasizing a disciplined approach due to higher interest rates and market uncertainty.  **[ZBRA_3404329_21]** 

6. **Geographic Performance**  
   **Q:** What's driving growth in EMEA and Latin America?  
   **A:** Strong performance in **EMEA** and **Latin America** was partly due to easier comparisons from a weak prior year but also driven by strength in Northern Europe, Mexico, and Brazil, despite challenges in manufacturing sectors like Germany.  **[ZBRA_3404329_12]** 

7. **Machine Vision Business Update**  
   **Q:** Is the machine vision business improving?  
   **A:** The machine vision business declined due to weakness in manufacturing, especially in electric vehicles and semiconductors. However, they saw stabilization in semiconductors and growth in software, remaining optimistic about long-term prospects as they diversify beyond semiconductors.  **[ZBRA_3404329_9]** 

8. **Healthcare Business Strength**  
   **Q:** What's driving growth in healthcare?  
   **A:** Growth in healthcare is driven by new customers and expansion within existing accounts. They are seeing strong performance across all product categories as providers invest in productivity, safety, and digital information collection. Healthcare has been their fastest-growing market over the last two quarters.  **[ZBRA_3404329_13]** 

9. **RFID Growth Opportunities**  
   **Q:** Do you anticipate new RFID opportunities in grocery?  
   **A:** They are excited about new RFID applications in grocery, like tracking fresh goods. Strong growth opportunities are anticipated across retail, transportation, logistics, and manufacturing as RFID adoption increases beyond apparel.  **[ZBRA_3404329_18]** 

10. **Competitive Dynamics**  
    **Q:** Have you changed promotional practices?  
    **A:** There has been no meaningful change in their promotional practices or the competitive landscape. They continue to leverage strong customer relationships and a differentiated portfolio to win in the market without increased discounting.  **[ZBRA_3404329_16]** 

11. **AI-Enabled Devices**  
    **Q:** Are you closer to commercializing AI mobile computers?  
    **A:** Progress is being made on AI-enabled enterprise mobile computers, with advancements to be showcased early next year. A commercial offering is expected likely in **2025**, focusing on applications like digital assistants running on devices without cloud connectivity.  **[ZBRA_3404329_22]** 

12. **Seasonality and Revenue Expectations**  
    **Q:** Should we expect moderate increases quarterly next year?  
    **A:** They expect more historical seasonality to return in **2025**, with some large deployments occurring in Q4 **2024**, anticipating typical seasonal patterns rather than steady quarterly increases next year.  **[ZBRA_3404329_20]** 

13. **Data Capture and Printing Momentum**  
    **Q:** Is momentum building in data capture and printing?  
    **A:** Broad-based growth is seen in data capture solutions across all categories and regions. Printing is also growing, especially in mobile printing and new opportunities like eco-friendly linerless printing, with strength expected to continue into **2025**.  **[ZBRA_3404329_17]** 

14. **Demand Recovery Timing in Q3**  
    **Q:** Did you see incremental demand pickup recently?  
    **A:** The conversion of their pipeline picked up in the latter part of Q3 and early Q4, leading to increased confidence and an upward revision of their full-year guidance as customer commitments came through.  **[ZBRA_3404329_14]** 

15. **Q4 EBITDA Margin Outlook**  
    **Q:** How should we think about Q4 EBITDA margins?  
    **A:** Despite expected sequential revenue growth, they anticipate a slight sequential decline in gross margin due to higher large deal volumes, which typically have lower margins. The mix change affects the Q4 EBITDA margin outlook.  **[ZBRA_3404329_23]** 

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- **Lack of Signs of Market Recovery with Demand Remaining Weak**: Management stated that they are "**not seeing compelling signs of recovery yet**" and that customers are pushing out projects, indicating ongoing demand softness into the first half of 2024.  **[ZBRA_3362967_7]** ,  **[ZBRA_3362967_8]**
- **Elevated Inventory Levels Expected to Persist**: The company acknowledged that inventory balances "**stayed relatively flat**" compared to the second quarter and they "**don't expect to see a material change**" by year-end, suggesting continued working capital challenges.  **[ZBRA_3362967_13]**
- **Increased Cost Savings Measures Indicate Operational Challenges**: Zebra increased its net annualized operating savings target to "**$100 million**" from a previous target of $85 million, with savings being "**broad-based**," implying further cost-cutting across the company due to the challenging environment.  **[ZBRA_3362967_22]**

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- Zebra Technologies expects to maintain its long-term annual growth rate of **5-7%**, as secular trends to digitize and automate environments remain strong, and the company is well-positioned to be a market leader and continue to take share as markets recover.  **[ZBRA_3373508_14]**
- The company is capitalizing on new opportunities in underpenetrated markets like **Japan and government sectors**, having secured wins with the **largest postal carrier** and **largest retailer** in Japan, and is refocusing efforts to expand in these areas.  **[ZBRA_3373508_19]**
- **Strong growth in RFID and machine vision technologies**, with RFID experiencing **double-digit growth** over the past few years including **2023**, and expansion into new verticals beyond retail, presenting significant market opportunities.  **[ZBRA_3373508_20]**

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- The **mid-tier and run-rate business segments have not yet seen a recovery**, with continued softness and limited visibility, indicating a **slower overall recovery**.  **[ZBRA_3381494_24]** ,  **[ZBRA_3381494_15]**
- The **recovery in China is expected to be prolonged**, and the region continues to face challenges, impacting growth prospects in the **Asia-Pacific region**.  **[ZBRA_3381494_9]**
- **Customers are cautious**, initiating only initial phases of projects rather than full deployments, leading to **delayed recovery and hesitant spending** in sectors beyond retail.  **[ZBRA_3381494_11]** ,  **[ZBRA_3381494_13]**

ad38fe6848b3d6a15ed8d6f911aa45be418243cf04a79ea28e3495af1da9d173

Zebra Technologies Corp (ZBRA)

Financials