Zebra ended Q2 with results that met Wall Street’s revenue expectations, but the market reacted negatively, reflecting investor concern over strategic and macro challenges. Management highlighted strong growth in North America, Latin America, and Asia Pacific, with notable traction in mobile computing, scanning, and RFID segments. CEO William Burns cited robust demand in transportation and logistics as well as retail and e-commerce, but acknowledged ongoing softness in European markets and lingering uncertainties tied to global trade policy. CFO Nathan Winters pointed to higher U.S. import tariffs compared to last year, resulting in a slight year-over-year margin impact.
Is now the time to buy ZBRA? Find out in our full research report (it’s free).
Zebra (ZBRA) Q2 CY2025 Highlights:
- Revenue: $1.29 billion vs analyst estimates of $1.29 billion (6.2% year-on-year growth, in line)
- Adjusted EPS: $3.61 vs analyst estimates of $3.33 (8.4% beat)
- Adjusted EBITDA: $267 million vs analyst estimates of $249.3 million (20.6% margin, 7.1% beat)
- Revenue Guidance for Q3 CY2025 is $1.31 billion at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $15.50 at the midpoint, a 8.8% increase
- Operating Margin: 14.2%, in line with the same quarter last year
- Organic Revenue rose 6.3% year on year vs analyst estimates of 6.1% growth (16.8 basis point beat)
- Market Capitalization: $16.68 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Zebra’s Q2 Earnings Call
- Joseph Giordano (TD Cowen) asked how the Elo acquisition complements Zebra’s core business and about areas of customer overlap. CEO William Burns explained that Elo brings a portfolio of customer-facing solutions and expands Zebra’s addressable market, particularly in quick-serve restaurants and healthcare, with limited product overlap.
- Damian Karas (UBS) inquired about Elo’s business cyclicality and competitive landscape. Burns noted Elo’s more balanced demand cycle and fragmented competition, adding that Zebra’s global reach should boost Elo’s international growth.
- Thomas Moll (Stephens) questioned assumptions about large deal conversions and the outlook for year-end spending. Burns described Zebra’s full-year outlook as “balanced” given backlog, pipeline, and ongoing customer caution, especially in Europe.
- Andrew Buscaglia (BNP Paribas) probed the impact and mitigation of tariffs, as well as market share opportunities from competitor repositioning. CFO Nathan Winters outlined ongoing supply chain and pricing strategies, while Burns asserted Zebra’s strong competitive positioning due to portfolio breadth and customer relationships.
- Meta Marshall (Morgan Stanley) asked about the effectiveness of price increases to offset tariffs and potential volume impacts. Winters reported that pricing actions have generally held, with some volume trade-offs, and highlighted the need for continued mitigation efforts as tariff policy evolves.
Catalysts in Upcoming Quarters
In the quarters ahead, our team will monitor (1) progress on integrating Elo and realizing planned synergy targets, (2) the effectiveness of ongoing tariff mitigation strategies and the potential impact of future trade policy changes, and (3) trends in customer spending across key verticals such as retail, logistics, and healthcare—especially in Europe, where softness persists. Product innovation and expansion into new end markets will also be critical signposts for sustained growth.
Zebra currently trades at $326.95, down from $342.32 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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