ZBRA · Q1 2026 Earnings

Bullish

Zebra Technologies

Reported May 12, 2026

30-second summary

Revenue grew 14.3% YoY to $1.50B with adjusted EBITDA margin of 23.2% and non-GAAP EPS of $4.75 — well above the $4.05–$4.35 guide. FY2026 revenue growth raised to 10–14% (+1pt at both ends) and non-GAAP EPS midpoint lifted to $18.50 from $18.00, but the FY ~22% EBITDA margin was reaffirmed despite Q1 printing 23.2% — management is flowing the Q1 beat through to revenue and EPS but explicitly not to full-year margin, which signals the Q2 memory headwind and below-trend H2 margin assumption flagged last quarter remain firmly in place.

Headline numbers

EPS

Q1 FY2026

$4.75

Revenue

Q1 FY2026

$1.50B

+14.3% YoY

Gross margin

Q1 FY2026

49.6%

Free cash flow

Q1 FY2026

$0.16B

Operating margin

Q1 FY2026

14.4%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$1.50B	+14.3%	$1.48B	+1.4%
EPS	$4.75	—	$4.33	+9.7%
Gross margin	49.6%	—	47.3%	+230bps
Operating margin	14.4%	—	9.4%	+500bps
Free cash flow	$0.16B	—	—	—

Guidance

Strong Q1 beat across EPS and margins drives full-year EPS and revenue growth guidance raises, with elevated confidence into Q2.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
EPS (non-GAAP)	Q1 FY2026	$4.05 to $4.35	$4.75	+$0.40 to $0.70 above guide	Beat
Revenue growth YoY	Q1 FY2026	11% to 15%	14.3%	+0 to +3pts above midpoint, in-line with range	Beat
Adjusted EBITDA margin	Q1 FY2026	21% to 22%	23.2%	+1.2 to +2.2pts above guide	Beat

New guidance

Metric	Period	Guide	YoY
Adjusted effective tax rate	FY2026	approximately 19%	—
EPS (non-GAAP)	Q2 FY2026	$4.20 to $4.50	—
Revenue growth YoY	Q2 FY2026	14% to 17%	+8.5-13.2%
Adjusted EBITDA margin	Q2 FY2026	slightly higher than 21%	—
Adjusted effective tax rate	Q2 FY2026	approximately 19%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
EPS (non-GAAP)	FY2026	$17.70 to $18.30	$18.30 to $18.70	+$0.00 to +$0.40 (high end raised by $0.40)	Raised
Revenue growth YoY	FY2026	9% to 13%	10% to 14%	+1pt low end, +1pt high end	Raised

Reaffirmed unchanged this quarter: Adjusted EBITDA margin (approximately 22%), Free Cash Flow (greater than $900 million)

Product revenue

Q1 FY2026

Segment	Q1 FY2026	YoY
Connected Frontline (CF)	$0.825B	+20.6%
Asset Visibility & Automation (AVA)	$0.67B	+7.4%
Connected Frontline Organic Growth	3.8%	—
Asset Visibility & Automation Organic Growth	4.8%	—
Tangible Products Revenue	$1,231 million	—

Management tone

Customer-capex resilience (Q2) → ELO TAM expansion (Q3) → Portfolio refocus + memory headwind mitigation (Q4) → Demand durability + Physical AI positioning (Q1)

No transcript was available for this release; tone analysis is limited to press-release language.

The framing has shifted from "mitigation" to "momentum." Last quarter the lead narrative was managing a ~2pt memory cost headwind; this quarter the CEO opens with "strong first quarter results demonstrate the durability of demand for our innovative technology" and "continued momentum into the second quarter, supporting our increased outlook for the full year." That tonal pivot is earned by the EPS beat ($4.75 vs $4.35 high end) and the AVA organic inflection, but it co-exists with a reaffirmed FY EBITDA margin — management is willing to raise revenue and EPS conviction but not margin conviction, which is the more honest tell.

The "Physical AI" positioning is new. The Q4 release leaned on "AI blueprints" and "Zebra Companion" as product names; this quarter management elevates the framing to "e-commerce, automation and Physical AI trends accelerate, we are well positioned to drive profitable growth." Physical AI is industry terminology (NVIDIA, Symbotic, etc.) — adopting it explicitly maps Zebra's machine vision and RFID portfolio onto a category narrative that commands higher multiples. Whether this is shelf-positioning or operating reality depends on AVA organic sustaining above 5% through H2.

The robotics exit, which was the loudest portfolio signal last quarter, is absent from this quarter's release language entirely. No restructuring update, no charges quantified, no revenue-runoff framing. Either the exit was clean and finished, or the costs were absorbed in Q1 without disclosure — the press release does not say.

Answers to last quarter's watch list

Q1 FY2026 organic growth — recovery thesis vs sub-2% downside. Total organic growth came in at 4.3%, with CF at +3.8% and AVA at +4.8%. Comfortably above the sub-2% danger zone and at the high end of the "low-to-mid single digits" thesis. AVA's acceleration from +1.3% in Q4 to +4.8% is the standout — the machine vision/RFID inflection management promised for 2026 is showing up early.

Resolved positively

Q2 FY2026 memory cost step-up and mitigation evidence. The Q2 EBITDA margin guide of "slightly higher than 21%" — at least 220bps below the Q1 23.2% print — is the first concrete quantification of where the memory headwind lands. The FY ~22% reaffirmation despite the Q1 beat says management still expects the headwind to bite as forecast. No explicit gross-margin bridge or pricing-action update in the release.

Continue monitoring

Machine vision Q1 print — return to growth promised for 2026. AVA organic +4.8% vs Q4's +1.3% — the inflection arrived. The press release does not break out machine vision specifically within AVA, but the segment acceleration is meaningful enough to confirm the FY guide leg.

Resolved positively

ELO synergy progress against $25M year-three EBITDA target. No explicit dollar disclosure on synergies in the press release. ELO is contributing the bulk of CF's reported-vs-organic gap (~$140M of run-rate Q1 revenue) but the synergy target was not refreshed.

Continue monitoring

Robotics exit cost and timing disclosure. Not addressed in the press release. No restructuring charges quantified, no revenue runoff disclosed.

Not resolved

Repurchase pace post-front-load. Q1 repurchases of $300M bring the cumulative spend against the $500M 12-month authorization to $603M (Q4 $303M + Q1 $300M) — the program is fully spent or upsized inside two of the twelve months. Either signals high capital-allocation confidence or means the buyback pause is imminent; the release does not clarify which.

Continue monitoring

What to watch into next quarter

Q2 EBITDA margin landing at the "slightly higher than 21%" guide vs surprising to the upside — the latter would invalidate the FY ~22% reaffirmation logic and force a mid-year margin raise; the former confirms memory cost mitigation is on schedule but no faster.

AVA organic sustaining above 4% — Q1's +4.8% needs to hold for the FY guide leg to be credible; deceleration back toward Q4's +1.3% range would unwind the recovery thesis a quarter after it landed.

Q2 organic revenue growth implied by the 14–17% reported guide — with ELO still in the M&A bucket, organic at low-to-mid single digits is the baseline; anything above 5% would suggest the core inflection extends beyond AVA.

Explicit memory cost gross-margin disclosure — management has committed to full mitigation; Q2 is the first quarter the headwind hits, so any quantification of the gross margin walk would either confirm or break the FY EBITDA reaffirmation.

ELO synergy quantification — three quarters post-close with no refreshed $25M target update, the absence is itself a signal; explicit disclosure on the Q2 call would build credibility for the flat FY margin.

Repurchase posture — whether a new authorization is announced (signaling continued capital-allocation confidence) or buybacks pause (signaling ELO debt prioritization).

Sources

Zebra Technologies Q1 2026 press release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/877212/000162828026033877/zbraex99120260404.htm
Tapebrief Q4 FY2025 ZBRA brief (prior guide and watch list baseline).
Tapebrief Q3 FY2025 ZBRA brief (segment recast and ELO framing baseline).
Tapebrief Q2 FY2025 ZBRA brief (tariff and ELO acquisition baseline).

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