Zebra Technologies (ZBRA) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached $1,308 million, up 11.9% year-over-year, exceeding outlook with broad-based growth across all product categories, verticals, and regions.

• Adjusted EBITDA margin rose to 22.3%, up 240 basis points year-over-year, driven by improved business mix and volume leverage.

• Non-GAAP diluted EPS increased 41.5% to $4.02, reflecting strong demand recovery and operating leverage.

• Demand remained robust through April, supported by strong retail year-end spending and positive customer sentiment.

• The company advanced its portfolio and supply chain diversification, positioning for digitization and automation trends.

Financial highlights

• Net sales grew 11.9% year-over-year to $1,308 million; adjusted gross margin improved 150 basis points to 49.6%.

• Adjusted EBITDA was $292 million, margin at 22.3%, up 240 basis points year-over-year.

• Non-GAAP diluted EPS was $4.02, up 41.5% year-over-year and above guidance.

• Free cash flow for Q1 was $158 million; cash and cash equivalents at $879 million.

• $125 million in share repurchases and $62 million for the Photoneo acquisition in Q1.

Outlook and guidance

• Q2 2025 sales growth expected between 4% and 7%, with adjusted EBITDA margin around 19% and non-GAAP EPS of $3.00–$3.50.

• Full-year 2025 sales growth guidance maintained at 3%–7%, adjusted EBITDA margin expected between 20% and 21%, and non-GAAP EPS of $13.75–$14.75.

• Full-year free cash flow projected to exceed $700 million, with conversion above 90%.

• Guidance includes approximately $70 million in U.S. import tariff expenses, net of mitigating actions.