• Revenue: Sales greater than $1.3 billion, a 32% increase compared to the prior year.
• Adjusted EBITDA Margin: 22.1%, a 670 basis point increase versus the prior year.
• Non-GAAP Diluted Earnings Per Share: $4, a 134% year-over-year increase.
• Free Cash Flow: $954 million for the full year.
• Enterprise Visibility & Mobility Segment Sales: Increased 33%.
• Asset Intelligence and Tracking Segment Sales: Grew 29%.
• North America Sales Growth: 36% increase.
• EMEA Sales Growth: 24% increase.
• Asia Pacific Sales Growth: 30% increase.
• Latin America Sales Growth: 40% increase.
• Adjusted Gross Margin: Increased 410 basis points to 48.7%.
• Adjusted Operating Expenses as a Percent of Sales: Improved by 290 basis points.
• Net Debt to Adjusted EBITDA Leverage Ratio: 1.2 times.
• Share Repurchase: $47 million for the full year.
• 2025 First Quarter Sales Growth Guidance: 8% to 11%.
• 2025 First Quarter Adjusted EBITDA Margin: Expected to be approximately 21%.
• 2025 First Quarter Non-GAAP Diluted Earnings Per Share: Expected to be in the range of $3.50 to $3.70.
• 2025 Full Year Sales Growth Expectation: Between 3% and 7%.
• 2025 Full Year Adjusted EBITDA Margin Expectation: Between 21% and 22%.
• 2025 Full Year Non-GAAP Diluted Earnings Per Share Expectation: $41.75 to $15.25.
• 2025 Free Cash Flow Expectation: At least $750 million.

• Warning! GuruFocus has detected 6 Warning Signs with ZBRA.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Zebra Technologies Corp (NASDAQ:ZBRA) reported a 32% year-over-year increase in sales for Q4, surpassing $1.3 billion.
• The company achieved an adjusted EBITDA margin of 22.1%, marking a 670 basis point increase from the previous year.
• Non-GAAP diluted earnings per share more than doubled from the prior year, reaching $4.
• Zebra Technologies Corp (NASDAQ:ZBRA) experienced strong double-digit sales growth across all regions, with notable strength in North America and Latin America.
• The company has made significant progress in diversifying its supply chain, reducing its reliance on China and mitigating tariff impacts.

Negative Points

• The manufacturing sector continues to lag in demand recovery compared to other end markets.
• Zebra Technologies Corp (NASDAQ:ZBRA) remains cautious in its 2025 outlook due to uncertainties in the global trade and macroeconomic environment.
• The company anticipates a $20 million impact on gross profit in 2025 due to new tariffs from China and Mexico.
• Visibility beyond Q1 2025 is lower than usual, with customers still finalizing budgets amid market uncertainties.
• The strong US dollar poses a headwind, impacting sales growth due to unfavorable foreign exchange rates.

Q & A Highlights

Q: What larger project activity did Zebra Technologies see in Q4, and how does it factor into the Q1 guidance? A: William Burns, CEO, noted that Q4 saw stronger-than-expected year-end spending from retail customers, with larger projects contributing to the results. This broader growth across all major categories and regions, along with easier comparisons from last year, supported the Q1 guidance.

Q: How is Zebra Technologies planning to address the impact of tariffs, and what are the strategies for mitigation? A: Nathan Winters, CFO, explained that Zebra has a dedicated team to monitor tariff changes and design mitigation strategies. The company plans to announce price increases as part of its response to the tariffs, which is already factored into the current guidance.

Q: What assumptions are being made about large deals in Zebra's full-year sales outlook, given the lower visibility beyond Q1? A: William Burns, CEO, stated that while Zebra has a solid backlog, the visibility beyond Q1 is lower due to market uncertainties. Customers are staging deployments over longer periods, and the strong US dollar is a headwind. The company expects steady mid-single-digit organic growth for the year.

Q: How are inventory levels with key channel partners, and what is the outlook for sell-through and sell-in balance? A: Nathan Winters, CFO, indicated that inventory levels are balanced, with days on hand in the channel being in a good place. The company feels confident about the overall inventory position as they enter the year.

Q: What is Zebra Technologies' perspective on AI, and how does it see AI impacting its business? A: William Burns, CEO, views AI as an opportunity to empower frontline workers. Zebra collects data at the frontline, which feeds AI models. The company uses traditional AI across its solutions and is developing generative AI capabilities, such as the Zebra companion, to enhance its mobile computing portfolio. AI is expected to drive premium hardware sales, market share gains, and additional software revenue.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.