Zebra Reports 22.3% Sales Growth in Third Quarter

The Tip Desk · November 3, 2026 · 3 min read

Third-quarter sales reached $1.61 billion, up 22.3% from a year earlier, as organic growth accelerated to 11.3%.

Zebra Technologies Corporation (ZBRA) reported third-quarter net sales of $1,614 million, up 22.3% from a year earlier, as organic growth accelerated for a second consecutive quarter.

The digitizing and automation company said the year-over-year sales increase followed 20.4% growth in the second quarter and 14.3% in the first. Organic net sales rose 11.3%, after 9.2% in the second quarter and 4.3% in the first.

Connected Frontline, the larger of the two reportable segments, was the main driver. CF net sales were $949 million, with organic growth of 15.0%, after 7.5% in the second quarter and 3.8% in the first. Asset Visibility & Automation net sales were $665 million, with organic growth of 7.0%.

Chief Executive Officer Bill Burns said the quarter was a record underpinned by execution and broad-based demand, with Elo Touch contributing to double-digit growth as customers prioritized automating frontline operations.

Gross margin moved the other way. GAAP gross margin was 45.7%, down from 48.0% a year earlier, after expanding to 53.0% in the second quarter. The company said the year-over-year decline was primarily due to increased memory component costs and business mix, partially offset by favorable foreign currency. Adjusted gross margin was 46.0%.

Adjusted EBITDA was $349 million, or 21.6% of adjusted net sales, matching the 21.6% margin a year earlier. GAAP net income was $164 million, or $3.43 a share, versus $101 million, or $1.97 a share, a year earlier. Non-GAAP diluted earnings were $4.95 a share, compared with $3.88.

Operating expenses were $501 million, up from $451 million a year earlier, primarily due to expenses associated with acquired businesses including amortization of intangible assets. Adjusted operating expenses were $413 million.

Burns said efforts to strengthen memory supply, implement pricing actions and capture operating leverage enabled the company to support growth while maintaining adjusted EBITDA margin year-over-year.

For the fourth quarter, Zebra expects sales growth of 10% to 14% versus the prior year, including about 150 basis points of favorable foreign currency. Adjusted EBITDA margin is expected to be approximately 22%. Non-GAAP diluted earnings are expected in a range of $5.00 to $5.40, assuming an adjusted effective tax rate of approximately 19%. Full-year free cash flow is expected to be at least $1 billion.

Cash and cash equivalents were $182 million as of October 3, 2026, and total debt was $2,578 million. For the first nine months of 2026, net cash provided by operating activities was $711 million and capital expenditures were $50 million, producing free cash flow of $661 million.

The company repurchased $75 million of shares in the third quarter, after $268 million in the second quarter and $300 million in the first. Through the first nine months it repurchased $643 million of shares. Chief Financial Officer Nathan Winters said the company is putting strong cash generation and the balance sheet to work, investing in growth while returning capital to shareholders.