Zebra Q3 Beats; Margins Fall, Guidance Strong

Zebra Technologies reported Q3 revenue of $1.32 billion, up about 5% year‑over‑year, and adjusted EPS of $3.88 (roughly an 11% increase), beating expectations. Results were driven by strength in its Asset Intelligence & Tracking and Enterprise Visibility & Mobility units and steady demand for barcode scanners and mobile computers. For Q4 the company guided sales growth of about 8–11% year‑over‑year (around $1.46 billion) and adjusted EPS of $4.20–$4.40 (midpoint ≈ $4.30), above Street forecasts. Management cited benefits from diversified manufacturing (China, Vietnam, Malaysia, Mexico), lower‑than‑expected tariffs, recent acquisitions (Elo, Photoneo), partnerships including Salesforce Retail Cloud POS, and announced a $500 million share repurchase program. Financials showed net income declined to $101 million from $137 million a year earlier, operating and free‑cash‑flow margins weakened, cash was roughly $1.05 billion and long‑term debt about $2.11 billion. Investors reacted unevenly—shares dipped in some sessions and rose in others—reflecting optimism on the outlook but lingering concerns about execution and the company’s shift from hardware toward higher‑margin software and services.