Key Takeaways:
Zebra Technologies Corp. (NASDAQ: ZBRA) shares surged as much as 19.5% after the company reported first-quarter revenue and profit that beat analyst estimates and raised its full-year guidance.
"The results reflected positive demand trends across our portfolio and strong execution by Zebra’s team," Chief Executive Officer Bill Burns said, pointing to particular strength in manufacturing end markets and momentum in its recently acquired Elo Touch business.
For the quarter ended March 2026, Zebra reported revenue of $1.5 billion, a 14.3% increase year-over-year, which beat the Zacks Consensus Estimate by 1.52%. The company posted adjusted earnings of $4.75 per share, surpassing consensus estimates of $4.21 by nearly 13% and marking an 18% increase from the prior-year quarter.
Looking ahead, Zebra boosted its full-year 2026 sales growth forecast to a range of 10% to 14% and lifted its non-GAAP EPS outlook to between $18.30 and $18.70, well above the prior consensus of approximately $17.95. The company expects to generate at least $900 million in free cash flow for the year. For the second quarter, Zebra guided for sales growth of 14% to 17% and non-GAAP EPS between $4.20 and $4.50.
The strong outlook comes despite headwinds from memory supply constraints. Management noted it expects to mitigate a two-point margin impact through a combination of price increases, cost savings, and other supply actions. The company's Connected Frontline segment grew 20.6%, including the Elo Touch acquisition, while the Asset Visibility and Automation segment saw a 4.8% increase, led by Machine Vision.
The company has been active in returning capital to shareholders, repurchasing $500 million in stock year-to-date. Management stated it has the flexibility to allocate all of its free cash flow to buybacks if conditions remain attractive.
The raised guidance signals management's confidence that strong demand in automation and manufacturing will continue. Investors will watch the second-quarter results closely to see if the company's pricing actions are successfully offsetting the margin pressure from higher memory costs.
This article is for informational purposes only and does not constitute investment advice.
