Highlights

  • Second quarter 2026 net sales were $1,557 million, and net income was $233 million, or $4.85 per diluted share.
  • Operating income was $321 million, and the quarter included a $73 million pretax benefit from expected refunds of previously paid import tariffs.
  • Zebra repurchased $568 million of common shares in the first six months of 2026, including $268 million in the second quarter.
  • Total debt was $2,776 million, and the Term Loan A and Revolving Credit Facility mature May 25, 2027.

Zebra Technologies Corporation (NASDAQ: ZBRA) shares were trading at USD 381.06 on October 27, 2026, down 0.80%, with a relative volume at time of 2.03. The company recognized a tariff refund benefit and reported its 2025 Productivity Plan actions largely complete in the second quarter, filed its Form 10-Q for the quarter ended July 4, 2026 on August 4, 2026, and raised its full-year outlook on an August 11, 2026 earnings call.

Zebra is incorporated in Delaware and has its principal executive offices in Lincolnshire, Illinois. It designs, manufactures and sells automatic identification and data capture products, including mobile computers, barcode scanners, RFID readers and specialty printers, along with related software and services. It reports two segments, Connected Frontline and Asset Visibility & Automation. End-users include retail, manufacturing, transportation and logistics, and healthcare organizations.

Second Quarter Results

For the quarter ended July 4, 2026, net sales were $1,557 million, compared with $1,293 million in the prior year second quarter. The company said the 20.4% growth reflected improved demand in all regions and that organic net sales growth, a non-GAAP measure, was 9.2%.

Gross profit was $825 million, and gross margin was 53.0%, compared with 47.6%. The company cited IEEPA tariff recoveries and foreign currency, and said it fully mitigated increased memory costs through price realization. Operating expenses were $504 million, compared with $433 million. Operating income was $321 million, compared with $183 million.

Net income was $233 million, or $4.85 per diluted share, compared with $112 million, or $2.19. For the six months, net sales were $3,052 million, and net income was $368 million, or $7.54 per diluted share.

Connected Frontline net sales were $903 million, compared with $717 million, and operating income was $219 million. Asset Visibility & Automation net sales were $654 million, compared with $576 million, and operating income was $192 million.

Tariff Refund and Restructuring

On February 20, 2026, the U.S. Supreme Court invalidated certain import tariffs enacted in 2025 under the International Emergency Economic Powers Act. Zebra is seeking a refund of approximately $73 million of previously paid tariffs and recognized the expected refunds within cost of sales. It received $14 million in cash in the second quarter.

The company completed most actions under its 2025 Productivity Plan and recorded an additional $8 million of severance and related costs. Cumulative one-time charges were $37 million, and it expects net annualized pre-tax cost savings of approximately $35 million.

Cash Flow, Debt and Capital Return

Net cash provided by operating activities for the six months was $387 million, compared with $325 million, and non-GAAP free cash flow was $361 million. Cash and cash equivalents were $157 million at July 4, 2026.

Total debt was $2,776 million, compared with $2,511 million, including Term Loan A of $1,531 million and a Revolving Credit Facility of $565 million. The current portion of debt was $2,275 million. The company said the Term Loan A and Revolving Credit Facility mature on May 25, 2027, that it intends to refinance the Credit Facility in the second half of 2026, subject to market conditions.

In the second quarter, it repurchased 1,173,993 shares for approximately $268 million. In the six months, it repurchased 2,468,021 shares for $568 million, and it increased borrowings under its revolving credit and receivables financing facilities to fund repurchases.

Outlook

On the call, management raised its full-year 2026 outlook. It expects net sales growth of 14% to 16%, an adjusted EBITDA margin of 23.5% to 24%, and non-GAAP diluted earnings per share of $20.75 to $21.25. It expects free cash flow of at least $1 billion. For the third quarter, it expects net sales growth of 17% to 20%, an adjusted EBITDA margin of approximately 22% and non-GAAP diluted earnings per share of $4.70 to $4.90. Management said the outlook reflects full mitigation of an approximately $120 million memory cost headwind.