Zebra Technologies (ZBRA) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 results with net sales of $1,557 million, up 20.4% year-over-year, and broad-based growth across all segments and regions, driven by strong demand for digitization, automation, and AI-powered solutions.

• Non-GAAP diluted EPS rose to $6.35, a 75.9% increase, with net income more than doubling to $233 million ($4.85 per share).

• Raised full-year outlook for sales, profitability, and cash flow, supported by continued business momentum and robust multi-year pipeline, especially in transportation & logistics, manufacturing, and healthcare.

• AI-powered solutions and the Elo Touch acquisition are driving synergies and enhancing the value proposition in digitizing and automating frontline operations.

• Strategic priorities focus on sustainable growth, innovation, disciplined capital allocation, and financial flexibility to drive long-term shareholder value.

Financial highlights

• Q2 net sales reached $1,557 million, up 20.4% year-over-year, with organic growth of 9.2%.

• Adjusted EBITDA margin was 27.7%, including a $73 million IEEPA tariff recovery; adjusted EBITDA increased to $431 million.

• Adjusted gross margin expanded 540 basis points to 53.3%; gross margin improved to 53.0%.

• Free cash flow year-to-date was $361 million, with full-year projection of at least $1 billion.

• Share repurchases totaled $568 million in H1 2026, with $268 million in Q2.

Outlook and guidance

• Full-year 2026 sales growth expected between 14%-16%, with adjusted EBITDA margin guided to 23.5%-24% and non-GAAP diluted EPS of $20.75-$21.25.

• Free cash flow for the year projected at least $1 billion, with ~100% conversion rate.

• Q3 sales growth guidance of 17%-20% (about 8% organic at midpoint); adjusted EBITDA margin expected at ~22%.

• Non-GAAP diluted EPS forecasted at $4.70–$4.90 for Q3.

• Management expects continued growth, supported by strong demand and ongoing cost efficiency initiatives.