Zebra Technologies (ZBRA) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales reached $1,255 million, up 31.3% year-over-year, with both segments contributing to growth and broad-based demand recovery.

• Adjusted EBITDA margin was 21.4%, up 980 basis points, and non-GAAP diluted EPS was $3.49, a 301.1% increase year-over-year.

• Net income was $137 million, reversing a net loss in Q3 2023; free cash flow for the first nine months was $666 million.

• Completed restructuring actions are expected to deliver $120 million in annualized net expense savings, with $110 million realized to date.

• Performance was driven by strong demand recovery, cost discipline, and successful restructuring.

Financial highlights

• Gross margin improved to 48.8%–49.1%, up over 430 basis points year-over-year, with adjusted gross profit at $616 million.

• Operating expenses decreased to $422 million, mainly due to restructuring savings.

• Free cash flow for the first nine months was $666 million, with $707 million net cash from operations.

• Cash and cash equivalents stood at $676 million, with total debt of $2.18 billion as of September 28, 2024.

• Net debt to adjusted EBITDA was 1.6x, within target range.

Outlook and guidance

• Q4 2024 sales growth expected between 28% and 31% year-over-year, with adjusted EBITDA margin near 22% and non-GAAP EPS of $3.80–$4.00.

• Full-year 2024 sales growth projected at 8%, adjusted EBITDA margin about 21%, and non-GAAP diluted EPS of $13.30–$13.50.

• Free cash flow for the year expected to be at least $850 million.

• Management expects continued improvement in demand into Q4 2024.