Zebra Technologies (ZBRA) Q4 2024 earnings summary

Executive summary

• Q4 2024 net sales reached $1,334 million, up 32.2% year-over-year, with adjusted EBITDA margin of 22.1% and non-GAAP EPS of $4.00, more than double the prior year, driven by strong North American retail demand and broad-based recovery.

• Double-digit growth achieved across all major product categories, verticals, and regions, with operating leverage driving significant margin expansion and robust free cash flow.

• Entering 2025 with a solid order backlog, but maintaining a cautious outlook due to macroeconomic, geopolitical, and trade uncertainties.

• Net income for Q4 was $163 million, a year-over-year increase of 858.8%; diluted EPS rose 912.9% to $3.14.

• Full-year 2024 net sales were $4,981 million, up 8.7% from 2023; net income was $528 million, up 78.4%.

Financial highlights

• Q4 total sales grew 32.2% year-over-year to $1,334 million, with double-digit growth across all regions: North America +36%, EMEA +24%, Asia-Pacific +30%, Latin America +40%.

• Adjusted gross margin rose 410 bps to 48.7%; adjusted operating expenses as a percent of sales improved by 290 bps.

• Adjusted EBITDA margin reached 22.1%, up 670 bps year-over-year; adjusted EBITDA grew 90.3% to $295 million.

• Free cash flow for FY24 was $954 million, with 136% free cash flow conversion and net debt to adjusted EBITDA leverage ratio at 1.2x.

• Cash and cash equivalents at year-end were $901 million; total debt stood at $2,183 million.

Outlook and guidance

• Q1 2025 sales growth guidance of 8%-11%, with a 1-point FX headwind; adjusted EBITDA margin expected at ~21%, and non-GAAP EPS of $3.50-$3.70.

• Full-year 2025 sales growth expected between 3%-7%, including a 130 bps FX headwind; adjusted EBITDA margin of 21%-22%, and non-GAAP EPS of $14.75-$15.25.

• Free cash flow for 2025 expected to be at least $750 million, with >90% conversion.

• Tariffs from China and Mexico expected to impact gross profit by ~$20 million in 2025, peaking in Q2, with mitigation efforts underway.

• Guidance excludes impact from pending Photoneo acquisition, expected to close in Q1 2025.