ZBRA

It has been about a month since the last earnings report for Zebra Technologies (ZBRA). Shares have lost about 4.9% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Zebra due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Zebra Technologies reported second-quarter 2026 adjusted earnings of $6.35 per share, which beat the Zacks Consensus Estimate of $4.35 by 46%. The bottom line increased 75.9% from $3.61 per share reported in the year-ago quarter.Total revenues of $1.56 billion surpassed the consensus estimate of $1.50 billion by 3.9%. The top line increased 20.4% year over year, supported by broad-based growth across segments and regions. Consolidated organic net sales increased 9.2% year over year. Acquisitions contributed 8.7% to reported sales growth, while favorable foreign currency translation contributed 2.5%. Effective from the fourth quarter of 2025, the company started reporting under two segments, namely Connected Frontline and Asset Visibility & Automation.Revenues from the Connected Frontline segment rose 25.9% year over year to $903 million. Organic net sales increased 7.5%. The Zacks Consensus Estimate was pegged at $839 million.The Asset Visibility & Automation segment’s revenues totaled $654 million, up 13.5% year over year. Organic net sales increased 11.4%. The Zacks Consensus Estimate was pegged at $662 million. In the second quarter of 2026, Zebra Technologies’ cost of sales totaled $732 million, up 8.1% year over year. Total operating expenses increased 16.4% year over year to $504 million.The company reported net income of $233 million compared with $112 million in the year-ago quarter. Adjusted net income increased to $305 million from $186 million reported in the prior-year quarter. Zebra Technologies had cash and cash equivalents of $157 million at the end of the second quarter of 2026. Total debt amounted to $2.78 billion, while the net debt-to-adjusted EBITDA ratio was 1.9. In the first six months of 2026, Zebra Technologies generated net cash of $387 million from operating activities compared with $325 million in the year-ago period. The company incurred capital expenditures of $26 million in the same time frame. Free cash flow amounted to $361 million compared with $288 million in the prior-year period. For the third quarter of 2026, Zebra Technologies expects net sales growth in the band of 17-20% year over year. The guidance includes an approximately 10.5-percentage-point favorable impact from acquisitions and foreign currency.Adjusted EBITDA margin is anticipated to be approximately 22% in the third quarter. Adjusted earnings per share are expected to be in the band of $4.70-$4.90.For 2026, it raised its financial outlook. The company now expects adjusted earnings to be $20.75-$21.25 per share. Adjusted EBITDA margin is anticipated to be in the band of 23.5-24.0% for the year. The company currently expects net sales growth of 14-16% year over year. It expects free cash flow to be at least $1 billion. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 10.65% due to these changes. Currently, Zebra has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Zebra has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Zebra’s second quarter results were driven by broad-based demand across its retail, manufacturing, and healthcare markets, as well as improved memory supply that allowed the company to meet more customer orders. According to CEO Bill Burns, “Customers are investing to digitize and automate frontline operations and our integrated portfolio is central to their progress.” The company also benefited from strong contributions from the recently acquired Elo Touch business and the realization of tariff recoveries, supporting both top-line growth and margin expansion. Is now the time to buy ZBRA? Find out in our full research report (it’s free). Revenue: $1.56 billion vs analyst estimates of $1.50 billion (20.4% year-on-year growth, 3.9% beat) Adjusted EPS: $6.35 vs analyst estimates of $4.38 (45.1% beat) Adjusted EBITDA: $431 million vs analyst estimates of $320.8 million (27.7% margin, 34.4% beat) Revenue Guidance for Q3 CY2026 is $1.56 billion at the midpoint, above analyst estimates of $1.50 billion Management raised its full-year Adjusted EPS guidance to $21 at the midpoint, a 13.5% increase Operating Margin: 20.6%, up from 14.2% in the same quarter last year Organic Revenue rose 9.2% year on year (beat) Market Capitalization: $17.89 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is 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. Keith Housum (Northcoast Research) asked about the outlook for large Transportation & Logistics deployments in 2027. CEO Bill Burns said Zebra has a robust multi-year pipeline, especially in last-mile delivery, with new mobile devices featuring RFID and AI providing competitive advantages. Thomas Moll (Stephens) inquired about memory supply constraints impacting guidance. Burns and CFO Nathan Winters explained that demand exceeds supply, but continued supplier diversification and proactive sourcing give confidence in meeting future needs. Quinn Fredrickson (Baird) sought more detail on memory cost visibility and how supply contracts impact future pricing. Winters responded that supplier transparency and three-month pricing cycles support planning, with ongoing actions to offset volatility through price increases and productivity. Meta Marshall (Morgan Stanley) asked about the integration and revenue synergies from the Elo Touch acquisition, and healthcare traction. Burns stated that joint selling, expanded geographies, and new healthcare use cases are driving early wins and pipeline growth. Guy Drummond Hardwick (Barclays) questioned the pace and sustainability of pricing actions to offset memory cost headwinds. Winters highlighted proactive deal quoting and broad-based price realization, particularly in mobile computing, as key factors supporting profitability. In the quarters ahead, the StockStory team will be monitoring (1) Zebra’s ability to secure and diversify memory supply to meet growing customer demand, (2) the continued expansion and integration of AI-powered and RFID-enabled devices across new customer segments, and (3) execution on cross-selling opportunities resulting from the Elo Touch acquisition. Ongoing progress in machine vision and healthcare will also serve as important indicators of sustained momentum. Zebra currently trades at $377.76, up from $291.64 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Zebra Technologies (ZBRA) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company. Analysts' growing optimism on the earnings prospects of this producer of printers for bar codes, plastic cards and, radio-frequency identification tags is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Consensus earnings estimates for the next quarter and full year have moved considerably higher for Zebra Technologies, as there has been strong agreement among the covering analysts in raising estimates. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: For the current quarter, the company is expected to earn $4.81 per share, which is a change of +24.0% from the year-ago reported number. The Zacks Consensus Estimate for Zebra has increased 10.65% over the last 30 days, as three estimates have gone higher compared to no negative revisions. For the full year, the company is expected to earn $20.31 per share, representing a year-over-year change of +28.2%. There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, four estimates have moved up for Zebra versus no negative revisions. This has pushed the consensus estimate 13.35% higher. Thanks to promising estimate revisions, Zebra currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Zebra because of its solid estimate revisions, as evident from the stock's 47.3% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:30 a.m. ET Vice President of Investor Relations - Michael Steele Chief Executive Officer - William Burns Chief Financial Officer - Nathan Winters Operator: Good day, and welcome to the Second Quarter 2026 Zebra Technologies Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mike Steele, Vice President of Investor Relations. Please go ahead. Michael Steele: Good morning, and welcome to Zebra's second quarter earnings conference call. This presentation is being simulcast on our website at investors.zebra.com and will be archived there for at least 1 year. Our forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially, and we refer you to the risk factors discussed in our SEC filings. During this call, we will reference non-GAAP financial measures as we describe business performance with reconciliations shown at the end of the slide presentation and in our earnings press release. Throughout this presentation, unless otherwise indicated, our references to sales performance are year-on-year on a constant currency basis and exclude results from business acquisitions and dispositions for 12 months. This presentation will include prepared remarks from Bill Burns, our Chief Executive Officer; and Nathan Winters, our Chief Financial Officer. Bill will begin with perspectives on our second quarter results, our value proposition and strategic priorities. Nathan will then provide additional detail on our financial results and discuss our outlook, followed by Bill's closing remarks. Then Bill and Nathan will take your questions. Now let's turn to Slide 3 as I hand it over to Bill. William Burns: Thank you, Mike. Good morning, everyone, and thank you for joining us. There are 3 key points I'd like to focus on today. First, our team executed well, driving record results with broad-based growth and significantly increased profitability. This strong performance, together with the continued momentum we are seeing across our business, supports our meaningful raise to the full year outlook. Second, our results reflect Zebra's unique value proposition. Customers are investing to digitize and automate frontline operations and our integrated portfolio is central to their progress. Zebra's AI-powered solutions are helping customers globally to improve outcomes to enhance productivity, visibility and real-time decision-making. Third, we are executing on our clear strategy to create long-term shareholder value by driving sustainable growth, building on our industry leadership and track record of innovation and enhancing our financial strength and flexibility. With that, let's turn to our second quarter results. Turning to Slide 4. We delivered results exceeding our outlook driven by our team's execution and positive demand trends across our portfolio. We had strong performance across all segments and regions with double-digit growth in our retail, manufacturing and healthcare end markets. Elo Touch contributed strong profitable growth with robust customer interest in our combined portfolio of solutions as we drive synergies with the acquisition. For the quarter, we generated sales of more than $1.5 billion, growing more than 20% or 9% on an organic basis from the prior year. An adjusted EBITDA margin of 27.7%, including the benefit of $73 million of tariff recovery and non-GAAP diluted earnings per share of $6.35 and a 76% increase over the prior year. Excluding the benefits of tariff recovery, we expanded adjusted EBITDA margin by 2 points, driven by better-than-expected gross margins as well as operating expense leverage, benefiting from our productivity initiatives. These results demonstrate both the durability of demand for our solutions and our ability to convert this demand into profitable growth. Our strong performance and financial position also supports our disciplined approach to capital allocation. We repurchased more than $560 million of shares in the first half of the year, following more than $300 million in the fourth quarter. This elevated level of capital return reflects our conviction in Zebra and our long-term value creation opportunity. Our business momentum and progress navigating the memory supply environment gives us confidence in raising our outlook for the full year. Moving to Slide 5. I want to share some additional details on our key end markets. In Retail, e-commerce and convenience stores were bright spots, driven by consumers' elevated expectations for faster delivery and expanded fulfillment options. Our recently acquired Elo Touch business delivered strong growth, benefiting from self-service trends. We are also encouraged by customer interest in our Zebra Frontline AI suite and new devices that can best deliver these solutions. In Transportation & Logistics, sales were flat on a strong prior year compare with relative outperformance in third-party logistics and warehousing. Our AI software solutions and recently launched portfolio of AI-optimized mobile computers has positioned us well with industry-leading companies who recognize Zebra's ability to bring increased productivity and service levels to their operations. As we look ahead to 2027, we have a robust multiyear pipeline of large deployments. In Manufacturing, our strong double-digit growth was driven by continued macro improvement and our customers' need for increased visibility across their operations. Electronics and pharmaceuticals were particularly strong in the quarter. Machine vision has also outperformed as our team has been executing well on growth initiatives as we invest in the business. Healthcare was our highest growth end market in Q2. We realized particularly strong performance in mobile computing as customers equip more caregivers with enterprise-grade solutions. We're excited about our opportunity to improve the patient care journey. Now turning to Slide 6. We continue to build on Zebra's unique competitive positioning as the foundation for intelligent operations. Our solutions capture data at the front line, turn that data into insights and enable customers to take action in real time. AI strengthens this ongoing process by enabling faster decision-making, greater automation and continuous workflow improvement. Benefits include increased productivity and better experiences for frontline workers as well as consumers. We are deeply embedded in our customers' workflows and understand how work gets done on the frontline. This allows us to serve as trusted partners to our customers and to co-innovate with them to digitize, automate and deploy AI. With our integrated portfolio, we meet customers where they are today in their automation journey while also continuing to expand our value as their operations evolve. Turning to Slide 7. Our results reflect the progress we are making in executing on our 3 strategic priorities. On our first priority, long-term profitable growth, we continue to see meaningful opportunity across both our segments, supported by a large and diverse market and a long runway for adoption in many of the environments we serve. We believe both Connected Frontline and Asset Visibility & Automation have a 5% to 7% organic sales growth profile over a cycle and are confident in our ability to deliver. Penetration remains low across the markets we serve, highlighting the opportunity in front of us. For example, based on third-party research, nearly 3/4 of warehouses globally are in early stages of their automation journey. Our growth prospects are augmented by investments in RFID, machine vision and AI that enhance our differentiation and expand our relevance with customers. We're also driving efficiency initiatives in our business to enhance profitability, which include operating expense leverage through cost discipline, including our previously announced restructuring actions that were substantially completed in the second quarter, accelerating software development by deploying new AI tools, enhancing our go-to-market model to improve market coverage and efficiency. We also continue to make progress on our second priority, building on our market leadership by advancing innovation. We are seeing early traction in our new line of enterprise mobile computers and wearables that embed RFID and optimized AI processing capabilities as well as new RFID and 3D machine vision solutions. Finally, our strong earnings and cash flow generation continue to enhance our financial strength and flexibility. We are executing on a balanced capital allocation strategy, prioritizing investments in our business that elevate our portfolio of solutions, while consistently returning capital to shareholders. Let me wrap up before I hand over to Nate. We have significant runway for growth with our clear and differentiated value proposition, supported by trends in automation, digitization and AI across a $35 billion served market. Our broad portfolio of integrated hardware and software solutions enables us to deliver value across the entire workflow, not just a single use case, creating a meaningful competitive advantage. Our industry leadership puts us in a unique position to be the supplier of choice of AI for the frontline. And we have a resilient financial model with strong margins and cash generation, supported by disciplined capital allocation that drives long-term shareholder value. I will now turn the call over to Nathan to review our Q2 financial results, progress in navigating memory supply and our improved 2026 outlook. Nathan Winters: Thank you, Bill. Let's start with the P&L on Slide 10. In Q2, total company sales increased 20.4% or 9.2% on an organic basis. We exceeded the high end of our guidance range, primarily due to our ability to secure increased memory supply as well as continued momentum across the business and favorable pricing. Our Connected Frontline segment grew nearly 26% including the recent Elo acquisition or 7.5% on an organic basis, led by mobile computing. Our Asset Visibility & Automation segment grew 11.4%, led by printing and machine vision. We realized solid performance across all our regions. North America sales increased 9%, led by our retail, manufacturing and healthcare end markets. EMEA sales grew 7% with broad-based growth across Europe, partially offset by continued softness in the Middle East. Asia Pacific sales increased 13%, led by China, Korea and Southeast Asia, and Latin America sales grew 15%, led by Mexico and Brazil. Adjusted gross margin improved 540 basis points to 53.3% largely due to the $73 million IEEPA tariff recovery that was not included in our outlook as well as favorable foreign currency exchange. Additionally, we fully mitigated a $20 million increase in memory costs through strong price realization. Gross margin outperformance, along with a 170 basis point improvement in operating expense leverage enabled us to expand adjusted EBITDA margin by 7.1 points to 27.7%. Non-GAAP diluted earnings per share were $6.35, a 76% year-over-year increase, significantly exceeding the high end of our outlook. Turning now to the balance sheet and cash flow on Slide 11. Year-to-date, we generated $361 million of free cash flow, ending the second quarter with a modest debt leverage ratio of 1.9x and $925 million of credit capacity. We've been deploying capital consistent with our allocation priorities, repurchasing $568 million of stock in the first half of the year. Turning to Slide 12. Our team has a track record of managing through disruptions by being proactive, maintaining close supplier partnerships and using our scale to create flexibility in the supply chain. We are successfully navigating the current memory cost and supply environment and have line of sight to what we need to support our outlook. Suppliers are delivering on their commitments, enabling our strong sales growth. We continue to work proactively across multiple fronts, including direct supplier co-planning, alternative sourcing options and transitions to higher density memory components where capacity is expected to increase into 2027. Additionally, the component pricing trajectory for the year is tracking in line with our expectations. Our cost position remains favorable relative to spot market rates given our direct supplier relationships. Looking ahead, we are committed to protecting profitability by taking additional price and other operational actions as necessary. Let's now turn to our outlook. We've entered the quarter with a strong backlog and pipeline that supports our sales growth guidance range of 17% to 20% including approximately 10.5 points of contribution from business acquisitions and favorable FX. Our third quarter adjusted EBITDA margin is expected to be approximately 22% and non-GAAP diluted earnings per share are expected to be in the range of $4.70 and $4.90. For the full year, we expect sales growth between 14% and 16% reflecting a 3-point increase at the midpoint from our prior outlook. Our guide factors in year-to-date outperformance, momentum across the business, including manufacturing and machine vision, previously announced price increases related to memory and an 8-point favorable impact from acquisitions and FX. Our full year adjusted EBITDA margin is now expected to be between 23.5% and 24%. And non-GAAP diluted earnings per share is expected to be between $20.75 and $21.25. Our full year guide continues to reflect full mitigation of the approximately $120 million memory cost headwind. We've been driving this through targeted price increases and other direct memory initiatives as well as net savings from our restructuring actions, volume leverage and FX favorability. Free cash flow for the year is now expected to be at least $1 billion, which reflects a conversion rate of approximately 100%. We are continuing to optimize our working capital levels, balanced with our supply chain resilience objectives. Please reference additional modeling assumptions on Slide 13. With that, I will turn the call back to Bill. William Burns: Thank you, Nathan. Before we turn to your questions, let me leave you with 3 key takeaways from the quarter. We delivered record quarterly results and are confident in our increased outlook for the full year. Customers are leveraging Zebra's AI-powered portfolio solutions to improve productivity, visibility and decision-making, and we remain focused on driving long-term profitable growth and shareholder value. I will now turn the call back to Mike. Michael Steele: Thanks, Bill. We'll now open the call to Q&A. [Operator Instructions] Operator: [Operator Instructions] Our first question comes from Keith Housum from Northcoast Research. Keith Housum: Congratulations on a great quarter. Bill, as we're kind of thinking about the rest of the year into 2027. Now the past 2 quarters, this quarter and last quarter, you referenced some successful deployments expected in 2027 in the T&L segment. Can you give us a little bit more color on that? Again, I'm [ not asking for you to give some ] guidance, but it sounds like your confidence in 2027 is growing based on some of the bookings that you have for that? Just any color you can provide on that would be great. William Burns: Yes, Keith, I would say that the excellent results certainly in the quarter overall with great execution by the team. So I'll start there. When we look at the vertical markets, clearly saw the T&L cycling difficult comparison last year, just high compares. But still saw solid performance across that vertical market with growth across third-party logistics and warehousing in this segment. So we feel good about Transportation & Logistics and the investments they're making in technology despite the compare from a year ago. I'd say that, as you referenced, really a robust multiyear pipeline of large deployments coming across T&L really focused on last-mile delivery and our customers and our differentiation coming from our new mobile devices, which add RFID and AI capabilities to those devices are clearly giving us a competitive advantage in the market. The deployment of RFID continues across Transportation & Logistics as we see that investment continuing. And I'd say that they're focused really on worker productivity, how do they drive operational efficiency, how do they increase visibility of parcels across their network. But we see over -- starting in '27, a strong pipeline of opportunities for refreshes within Transportation & Logistics, and we continue those conversations with customers and are ever confident in that happening. Keith Housum: Great. I appreciate that. And then you made some positive commentary in terms of machine vision this quarter. Any color you can comment on in terms of the progress that you've made over the past year, 1.5 years in that and how you're thinking about that for the rest of the year? William Burns: Yes. I think just like T&L, we saw strength in manufacturing. So the -- while T&L has been a strong segment, manufacturing continues strength as well. So we're seeing the drive, again, for increased visibility across the supply chain, electronics and pharmaceuticals, certainly a strength in the quarter in manufacturing. And then that driving really outperformance in machine vision with the team executing well within machine vision. Really, we've aligned our business unit, our go-to-market teams to really focus on specific opportunities within manufacturing. We've talked about our increased focus on manufacturing over the last couple of quarters. And that alignment with our regional sales teams is really driving our value proposition into the marketplace, which is resonating with not just our sales teams, but our partners and our customers as well. We continue to enhance the portfolio of solutions and machine vision, and we're seeing an excitement by the team and then strong growth. I mean there's lots of examples using AI for optical character recognition, for instance, in places like outside of manufacturing, logistics and inside of manufacturing, things like food and beverage. So there's lots of examples of places where we're focused and we're winning. We've seen strong performance from Photoneo, so acquisition in the space to continue to enhance our offerings, both organically and inorganically in machine vision. So we like this space. We're seeing growth across the business in manufacturing. We're seeing it diversifying the business and our team's focus is playing out as we'd expected, driving growth for us. Operator: The next question comes from Tommy Moll from Stephens. Thomas Moll: Bill, it sounds like in second quarter, part of the reason you've exceeded the top line expectation was the memory supply was a little better than expected. So my question is to what extent is your guidance for 3Q and the second half still constrained by that memory supply? And to what extent do you have visibility into 2027 on that improving? William Burns: Yes, I'll start and then maybe hand over to Nathan. I would say that memory continues to be a dynamic and challenging environment. I'd say that our teams executed really well, both through the first half of the year and especially in the second quarter here to work closely with our suppliers to secure the memory we needed to get above the top end of our guide. We had told you that our demand was at that level and that really it was being gated by memory constraints. We're confident in mitigating the memory challenges to achieve our second half outlook. So demand signals and the demand we're seeing from our customers is above what we're guiding to, and there is still constraints out there, but the team has done an amazing job of really secure memory. And I'll let Nate take you through the details, but they're doing a lot to make sure that we can deliver for our customers, not just in second quarter, but through the second half of the year and into 2027. Nathan Winters: Yes. Tommy, just to add a few things. We talked about this before in terms of the different mitigation strategies and actions that teams are taking and we do expect, as Bill mentioned, a modest increase in memory in the second half, but the team is really working hard to meet the unconstrained demand, which, again, is near the high end of our guidance range. The work we're doing with the direct supplier co-planning is really paying out, working on the supply pipeline, not just for the next 3 to 6, but actually in the next 18 months. And then a lot of work with our product teams on qualifying new suppliers, new different chip types. We're working with 10 different new suppliers and the goal is to have 5 to 7 qualified suppliers for each of our primary memory types. So I think all those actions we're taking gives us confidence that we'll be able to continue to secure the volume we need to support our customers into 2027 and the growth that's required. Thomas Moll: Nathan, a follow-up for you on the share repurchase activity, pretty robust through the first half. What can you tell us about any plans to continue to deploy capital there in second half of this year? Nathan Winters: Just start with the overall capital allocation, we ended the quarter at 1.9x debt leverage, strong cash flow expected for the year at $1 billion. The balance sheet is in great shape. As we mentioned on the call, we repurchased $568 million through the second quarter, but we've continued to be active here in the early part of the third quarter, given what we believe is still an attractive stock valuation. Our full year EPS guide assumes that we'll do an additional $150 million of share repurchase in the back half, so call it, $700 million for the year. I think we plan to take a bit more of a balanced approach here in the second half to maintain some flexibility. But again, have the option to continue to purchase more if we think it's -- the stock still remains at an attractive price. Operator: Our next question comes from Quinn Fredrickson from Baird. Quinn Fredrickson: Just on memory, you talked about supply. I'm wondering when you might get visibility into next year's component costs from your key suppliers? I know you're on contract, not spot pricing. So when do you typically get some visibility into memory costs for next year? Nathan Winters: I'll take that. One, from a cost, I think just to start with this year, the market pricing is in line with our prior guide. So as we kind of laid out the year in the guidance, the pricing and the price increases that we have planned at the beginning of the year are largely playing out as expected. And as you would expect, there's quite a variability across the different memory types, and the direct purchasing with those memory suppliers is really playing -- is a really big benefit in terms of avoiding the spot market as much as we can. We typically get pricing at the beginning of 3 months in advance or every 3 months. But I'd say, up to this point, our key suppliers have been pretty transparent around where they expect the price to go out into the future, while it's not set. So I think the team has a pretty good handle on not only what we expect for the next 3 to 6 months, but where that trajectory is expected to be as we go out into 2027. And that's where we're going to continue to monitor. And I'd say our commitment just like it was this year is to continue to take the necessary actions to mitigate that exposure in the P&L whether that's through our own increased pricing actions or other productivity initiatives to offset and continue to ensure we expand margins as we go into '27. Quinn Fredrickson: And then you gave guidance for third quarter and the full year here. So it looks like organic growth for fourth quarter is implied in about the 8% range. Can you just discuss how you think about what's embedded around year-end customer budget flush or large deals at this stage based on your conversations with customers? Nathan Winters: Yes. So if you look -- again, we have a robust pipeline here as we go into the second half. So I think the conversations have continued to be productive similar to what they are in prior years. We don't typically get that full indication until we get to later part of the third quarter and early part of the fourth quarter. So we feel good about the position we have for the fourth quarter in terms of the overall pipeline. And today, somewhat Q4 is capped by just on the memory supply we expect or have confidence in achieving here in the fourth quarter. So again, but the team is actively working to secure that pipeline, get the visibility we need back to the supply chain team, so we can work with our suppliers to meet that demand, which, again, we were able to do here in the second quarter. Operator: Our next question comes from Andrew Buscaglia from BNP Paribas. Andrew Buscaglia: I wanted to check on -- your sales have just picked up nicely in Q2. But your Q3 guidance implies some slight deceleration. I mean, still very strong, but wondering what's informing that guidance. And then similarly for Q3 margins, you had a nice -- exceeded expectations by quite a bit, even ex tariff refunds, but then your Q3 margins imply a slight step down. So I'm just wondering if there's something going on with mix or timing of demand -- or timing of orders coming through? Or how would you characterize that? Nathan Winters: I'd maybe just start with the kind of the overall outlook. I think we have obviously confidence in the guide given the first half performance. A lot of the back half is still somewhat predicated around the memory capacity that we expect. So to a certain degree, the growth rates are somewhat based on just prior year compares and where we expect the supply to play out and gives us confidence in that guide. So if you look at the Q3 sales guide of 17% to 20%, 8% organic at the midpoint, which includes about 2 points of pricing. Again, we feel great about that ramp and the trajectory and the underlying demand supporting the business. And I think on the -- from an EBITDA rate perspective, if you look at the step down from Q2 to Q3, obviously, a primary driver that is removing the IEEPA refunds here in the Q2 results. And there's about 1 point degradation coming from higher memory costs. So we do expect memory costs to increase as we go from Q2 to Q3. We were able to fully mitigate the memory step-up in the second quarter with our own pricing actions, but we do anticipate a slight degradation as we go into the third quarter, which was always planned out as part of our implied guide at the beginning of the year. So operationally, excluding memory, it's somewhat in line sequentially in a similar level of mix as we go from the second to third quarter. Andrew Buscaglia: Okay. Got it. And you raised prices this year, obviously, to help mitigate things. I think you indicated you can raise prices again if you want to. I guess, what gives you that confidence? And how quickly can you implement it? And what would you need to see if you had to move forward with further price increases? William Burns: Yes, I'd say, Andrew, we'd prefer not to raise price. That's our -- certainly our strong preference. But we've had to do that based on the significant increase in memory. We believe that and have confidence that if we need to, we can see that pricing flow through, and we've been able to demonstrate that both in our business and in the Elo acquisition as well on both sides. So our preference is not to raise price. But as we need to do that as memory pricing continues to increase, we'll do that just like other suppliers have had to do. So I think that our preference is not, but that's kind of where things are at across the industry. There's just no way not to raise price given the significant increase in memory pricing today. Operator: The next question comes from Joe Giordano from TD Cowen. Joseph Giordano: Look, I know we've talked about this a lot. I just want to be very clear, like -- and correct me if I'm wrong and how I was thinking about it. But last quarter, I think you characterized the revenue guidance at the high end as kind of unachievable in light of current memory availability at that time. Now here you raised the high end. Like is the high end of your revenue guidance achievable in the current memory availability framework? William Burns: Yes. I'd say, Joe, that I think that the position we took in Q2 is the same that we've taken for Q3 and the full year guide, which is the demand signals today from our customers and the investments they're making across each of our vertical markets and across each of our regions really leads us to the high end of our outlook for Q3 and for the full year. And the midpoint of that outlook factors in the potential supply constraints associated with memory that we're seeing. So I think it's the same approach we had in Q2. We've now taken for Q3 and full year. The team executed very well, delivering for our customers in Q2, which has got us to the -- above the high end of our range. But in second half, we're continuing to see a challenging and dynamic environment around memory. So the prudent thing for us to do is to -- the demand signals take us at the high end, but our guide is really at the midpoint of our guide that really factors in the potential supply constraints that we'd expect to see in second half. Nathan Winters: But obviously, both were significant steps up from where we were last quarter, both in -- which I think is a response to what we see as the underlying demand and the great work the team is doing to secure additional supply. So I think both -- as Bill mentioned, that's playing out in the guidance. But I think the positive note is that both were substantially higher than we were 3 months ago by the great work from the team. Joseph Giordano: Is an LTA available to you guys if you wanted to pursue that? Nathan Winters: We've had discussions regarding supply agreements with various of our memory suppliers. But our priority up to this point has really been on qualifying new suppliers and memory types, along with working on that visibility, both here in the short and long term, and that's been playing out. So while those discussions are ongoing, we don't think it's limiting us or preventing us from achieving it. And if those were necessary to obtain increased supply, we absolutely would, but hasn't been necessary to this point. Operator: The next question comes from Piyush Avasthy from Citi. Piyush Avasthy: Just following up on like some of the other questions asked on the guidance raise. I mean you are raising the organic growth expectations for the full year for 2026. Like can you provide some clarity on how we should be thinking about the 2 segments, like Connected Frontline has some memory constraints, so I understand that. But AVA had a really strong quarter, not sure if there's like any one-time item to call out there, but do you expect like AVA should lead that growth? Or do you think like CF could more meaningfully contribute as we progress through the year? William Burns: Yes, I think we see strong growth across both the segments. So Asset Visibility & Automation really focused on insights into assets within our customers. So think of inventory as an example in retail. So print, data capture, machine vision, RFID are all part of that portfolio of solutions. We, in Q2, saw strong growth in print, again, driven by strength in manufacturing, for example. But we also had strong growth rates in volume and run rate for data capture solutions. Our supplies business continues to be strong. Strong quarter, a very strong quarter in machine vision and RFID deployments continue. So I think strength in Asset Visibility certainly -- & Automation segment, but also Connected Frontline. So I think that we're clearly seeing that our customers are deploying more devices in the hands of more frontline workers to really improve productivity, drive collaboration, how do they enhance their interaction associates have with the customers on the frontline. And that segment, of course, is mobile computing, but also our Elo segment fits into that software and our AI solutions, and we're seeing mobile computing, next generation of those devices, adding AI capabilities and RFID, next-generation wearables, devices optimized with the processing power necessary to deploy AI, both our AI suite and deployments our customers are looking to make. Elo, we had a strong performance in the second quarter and expect that to continue in the second half year with momentum with the Elo acquisition with the 2 sales teams working closely together and positioning those solutions across our customer base. So I'd say you expect growth in both segments in the second half of the year and feel good about the demand across -- we're seeing across the portfolio, across the regions, across the different vertical markets, truly broad-based growth. Piyush Avasthy: Very helpful. And I think like I get the point that it's very broad-based, but it seems like EMEA has been a bit of a laggard. I mean there was decent growth this quarter. But like -- and you mentioned like Middle East impact there. But can you elaborate on the underlying demand environment across like different business verticals in the EMEA region specifically? And as you think of like 2026, like based on the conversations with your customers there, like how do you think like Europe would contribute to the organic sales growth construct? William Burns: Yes. I mean EMEA was slightly behind the other regions. And I think if you go back a couple of quarters ago, EMEA growth was a bit challenged, but I think some of that was tougher compares from the prior year. We're seeing resilient demand across Europe. Obviously, as you said, softness in the Middle East, right, is the geopolitical challenges there. Relative strength, I'd say, in retail, manufacturing, healthcare across EMEA, double-digit growth in machine vision, our supplies business, RFID, print, mobile computing. So I think we're seeing strong growth, it was 7% for the quarter. And I think that slightly below the other regions of North America. And then certainly, we saw a lot of strength in Asia Pac and Latin America. But I don't think we have any concerns about EMEA. We feel good about what they're seeing. And it's been pretty resilient given all the things happening across the European market. Operator: The next question comes from Meta Marshall from Morgan Stanley. Meta Marshall: A couple of questions for me. Just in terms of -- on Elo, just where do you feel like you've got -- clearly, the business is continuing to do quite well. But just in terms of kind of revenue synergies or selling into the base, where are you in terms of kind of exploiting some of those natural overlap? And then maybe on the healthcare side, you noted very strong kind of traction there over the last quarter. Just trying to get a sense of are those new customers? Are those new project types? Just where is that kind of traction coming from? William Burns: I'll start with Elo. I would say that excited about certainly the performance and the workaround integration as you mentioned, it really reaffirms our conviction that the acquisition of Elo and the combined capabilities between our 2 portfolios that really gives us another dimension on the frontline, which is really the focus areas there are modernizing point of sale, certainly continuing to streamline self-service and then the payment portfolio at Elo. So I think we saw growth above our expectations in Q2, strong pipeline of opportunities driven by our sales teams working closely together and growing that commercial pipeline, but also progress we're making on synergies, about $10 million identified so far. But the real synergies come, as you pointed out, around the commercial side of things. We're expanding into new geographies that Elo didn't have a presence in before. We've got named accounts across the globe in which we're focused on joint selling efforts, and those are beginning to pay off with strong pipeline of opportunities, early wins and continuing to position the entire broad portfolio. I'd say in healthcare, highest growth vertical in the quarter, and you see this repeatedly from time to time here in healthcare, strong performance in mobile computing. So we're clearly seeing the equipping of more caregivers with enterprise-grade solutions. It's really around staff communication and collaboration, enhancing patient safety around operational efficiency in the healthcare base. We've seen clinical mobility. We've seen urgent care locations driving the business, track and trace opportunities across healthcare and getting better visibility into what inventory they have. We also see Elo opportunities in healthcare. So we've taken the Elo products and solutions, an area they really weren't a primary focus for them into the HIMSS trade show earlier this year and really looking at self-service applications, both for things like patient check-in or visitor check-in. But more opportunities in healthcare for Elo as well. So I think that healthcare continues to be a strong vertical for us, new customers and existing customers and new use cases and certainly more devices in the hands of more clinical workers overall. Operator: The next question comes from Guy Hardwick from Barclays. Guy Drummond Hardwick: Great results, guys. So Nathan, so I think if you go back 3 months ago, you said that the $120 million of memory headwinds would be half offset by price, so maybe $50 million, $60 million realized over the 3 quarters. It looks like you've already realized $20 million. I think you said in the Q3 guidance, there's going to be 2 points of price. So that suggests perhaps another $30 million. So can you tell us what's happening in pricing? Is pricing being realized more quickly than you realized? Was there some mix effect? Or has there been some other price increases that perhaps have not been announced, which are benefiting results? Nathan Winters: Yes. No, Guy, that's exactly right. So out of the $120 million of gross headwinds, we had previously communicated $60 million expected benefit from pricing. We've increased that now to $90 million primarily due to the strength we saw in the second quarter. And I think that's a real credit to the team. One thing we did differently this time versus other price increases, while the price increase went into effect in the later part of March, we were proactively looking at deals and quoting opportunities at the higher price going back to the beginning of the year as we saw the price increase. So I think that proactively getting those projects that were in the pipeline for the second quarter and embedding the incremental pricing ahead of the actual price increase in the announcement was a big driver. And I think the team has been super focused on it, a big credit to the sales team and our product teams for driving it. But that obviously gives us confidence here as we go to the back half of the year to deliver on what we need for the back half and substantially -- and continue to increase that as we go into the fourth quarter and into '27 to fully mitigate the exposure. Guy Drummond Hardwick: Okay. And in EMC, what do you think kind of just in EMC, what sort of price increases are you realizing? Nathan Winters: Yes, it's pretty well split. I mean, EMC takes a little bit longer just given the types of deals and the project base. But the vast majority of the price increase we announced in the second quarter was for our mobile computing portfolio. But we've seen nice strong realization in print and other parts of the portfolio. So we're seeing it pretty broad-based. But I'd say the mobile computing made up probably about half of the price increase here in the second quarter, and we'd expect that to increase as we go to the back half of the year. Operator: The next question comes from Trevor Sahr from William Blair. Trevor Sahr: This is Trevor on for Brian. Just one for me. I was wondering if you could give a little bit more detail on the memory tech and the signals from customers -- sorry, suppliers and how they're investing for that new memory tech in 2027. And are customers asking for your products to be upgraded to this new memory tech for '27? Nathan Winters: Yes. So if you look, we've done a lot of work within the portfolio. I mean the vast majority of our products are on the low-power LPDDR5, which is where the primary memory type that a lot of the capacity is moving to. So I think that puts us in a nice position of our portfolio being where capacity is moving towards and we're obviously working with each one of our suppliers as they move to the next-generation memory type within that band as well as qualifying new suppliers. The work with our commercial teams and our customers is really around, again, do they need 6, 8, 12, 16 gig memory? And what's the right memory for the use cases that they have, the applications? Obviously, what their future use of the device is going to be over the next 2 to 3 years as they're making those decisions? But also there's a big price difference between those different types that we will to make sure our customers are aware of as well as capacity is different across each one of those. So I'd say it's a very active dialogue with the customers around their needs, the timing of when they need the product and then what's available. So it's quite an extensive amount of coordination across the groups. But I think the team is doing a great job of working that between the sales team, the business units and our supply chain team to get the right product to our customers that meet their long-term needs with the best possible outcome, both from a timing and pricing perspective. Operator: And the next question comes from [ Patrick Muth ] from Needham. Unknown Analyst: This is [ Patrick Muth ] on for Jim Ricchiuti at Needham. I was curious about the RFID growth in the quarter and if you guys are still expecting that double-digit growth for the full year as opposed to OpEx investments in RFID? And then secondly, is there any more color that you guys can share on gross margins and OpEx in the second half of the year? William Burns: Yes, Patrick, I'll start and then hand over to Nathan. Strong pipeline of opportunities with RFID as we continue to see investments across the supply chain, so retail, transportation, logistics, manufacturing, government as well. So we're expecting growth for the full year despite second quarter being flat, that's really primarily just timing on projects. Again, no concerns on our part about the growth of RFID. I think we're seeing the continued opportunities beyond retail apparel into broader merchandise parcel within transportation, logistics, fresh food in grocery, quick-serve restaurants, healthcare, government applications. So broad use cases of RFID really going to drive that growth for full year, just again not concerned about second quarter really at all. It's all project timing. Track and trace across the supply chain continues to be a focus for our customers. Zebra has the broadest set of solutions inside RFID today. So whether it's fixed or handheld reading, our printers today printing RFID labels, we're really excited about our new line of mobile devices and wearables that have integrated near-field RFID reading capabilities associated with them, embedded in those devices that we're seeing a lot of interest from our customers that are pulling RFID for those devices. So we're excited about RFID and the expanded opportunity it represents. And again, full year growth definitely expected from the RFID portfolio. Nathan Winters: Yes. If you look at the back half margin as well as OpEx assumptions, the Q3 guide around approximately 22%, as I mentioned earlier, it was a slight step down from the Q2 results, excluding IEEPA refund of about 1 point, reflecting the higher memory costs, and we'd expect a similar margin profile as we go into the fourth quarter that's embedded in the guidance. I'd say, a lot of work on the OpEx line. We'll get about 1 point of scaling for the year, driven on the higher volume, but also we took significant restructuring throughout the first half of the year, which we completed here exiting the second quarter, which is allowing us to not only rightsize the portfolio, but absorb some of the higher healthcare costs and those types of things, while we continue to invest in our new AI solutions as well as expanded market coverage in our go-to-market team. So we'd expect that scaling to continue here as we go through the back half of the year and into 2027 in OpEx. Operator: And our last question comes from Amit Mehrotra from UBS. Pratap Singh: This is Pratap on for Amit Mehrotra. So my first question is on the full year guide. If we take out pricing, volume growth seems to be around mid-single-digit range. Now as we think beyond this year, do you think that rate is sustainable and can even improve into the next year? Like I know this is a bit too early to provide any outlook for 2027, but can you help me with any framework around this like which parts of the portfolio can accelerate versus which can slow down? Nathan Winters: Yes. If you look at our full year sales guide of 14% to 16%, 15% at the midpoint, that's organic growth of 7 points, which includes 2 points of price, and some of that pricing will roll over into 2027 just given the timing of the announcements, where acquisitions and FX make up 8 points -- the remaining 8 points of the delta. Look, I think as Bill mentioned earlier, we're excited about the long-term opportunities for the company. And while we're not guiding for '27, I think if you look at the underlying demand of the business, the pipeline, we have a project in the innovation, we feel confident that we'll be able to continue to meet the growing demand for our customers. And I'd say there's no reason to -- as we look at the long-term growth of 5% to 7 % that would be not somewhere within that range as we move forward out of '27, but into 2027. But a lot of that depends on, again, the timing of the pipeline along with looking at the memory capacity as we enter '27. Pratap Singh: And just on a follow-up on this, like if I look at the quarter, organic sales growth was like 9%, which is very strong. But was memory still a constraint for you in the quarter? Like in other words, like do you think sales growth could have been even higher in the second quarter and full year guide if memory is under constraint? William Burns: Yes, I think what we were saying before is that the demand certainly is strong from our customers and the momentum continues across each of our vertical markets. And across both Asset Visibility and the Connected Frontline segments. Our outlook is -- demand would represent kind of the high end of our outlook for Q3 and the full year and we're factoring in supply constraints into that, that takes us down to about the midpoint of our guide, which is the same that we did in our guide for Q2. We were able to secure additional memory supply, which pushed us above the top end of our range for Q2. But we clearly are seeing strong demand for our solutions, and we're factoring in the potential constraints of memory into our guide for Q3 and for full year. Operator: This concludes our question-and-answer session. I'd like to turn the conference back over to Bill Burns for any closing remarks. William Burns: Yes, I'd like to wrap up by thanking our employees, our partners and our suppliers for their support in delivering record results in Q2. We are making excellent progress on our 2026 priorities, and we're excited about the opportunities ahead of us. Have a great day, everyone. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Zebra Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Zebra Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Zebra Technologies. The Motley Fool has a disclosure policy. Zebra (ZBRA) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

The second-quarter earnings season has produced several standout performers. That said, the biggest winners haven't simply topped Wall Street's estimates—they've delivered blowout results while reinforcing confidence in their long-term growth outlooks. Whether fueled by improving end-market demand, expanding margins, or stronger guidance, Caterpillar (CAT), Mercury General (MCY), and Zebra Technologies (ZBRA) each posted impressive quarterly results this week that could warrant a closer look from investors seeking quality additions to their portfolios. Caterpillar delivered one of the strongest earnings reports of the quarter, crushing Wall Street's expectations as demand remained robust across its end markets. The construction and mining equipment giant reported adjusted earnings of $8.17 per share, topping analyst expectations of $6.25 by nearly 31% and soaring 73% from Q2 EPS of $4.72 a year ago. Revenue surged 24% year over year to $20.54 billion, also well ahead of consensus estimates of $19.31 billion. Perhaps even more encouraging was Caterpillar's record $72 billion backlog, highlighting sustained demand across construction, energy and AI-related infrastructure projects. Management also raised its full-year sales outlook to mid-to-high teens growth, reflecting confidence in continued business momentum. The combination of accelerating growth, improving guidance and a sizable earnings beat reinforces Caterpillar's position as one of the industrial sector's premier long-term investments. Image Source: Zacks Investment Research Mercury General continued its remarkable turnaround with another outstanding quarterly performance. The property and casualty insurer posted Q2 adjusted EPS of $3.52, which spiked from earnings of $2.67 per share in the prior year quarter and crushed expectations of $1.80 by 95%. This came as Q2 sales increased 14% YoY to $1.67 billion, easily surpassing estimates of $1.58 billion. Mercury benefited from stronger underwriting results, favorable pricing trends, and disciplined expense management. Higher premium revenue and improving profitability demonstrated that Mercury’s pricing actions continue to gain traction while claims trends remain manageable. With the company also benefiting from higher investment income generated by elevated interest rates, Mercury appears well positioned to sustain its operational improvement and has posted a very impressive average EPS surprise of 70.21% in its last four quarterly reports. Image Source: Zacks Investment Research Zebra Technologies also delivered a standout quarter as enterprise demand for automation and data-capture solutions remained strong. The leading provider of enterprise asset intelligence solutions reported Q2 adjusted earnings of $6.35 per share, crushing analyst expectations of $4.35 by nearly 46% and surging 76% from EPS of $3.61 in the prior year period. Revenue reached $1.55 billion, up 20% YoY and ahead of Q2 consensus estimates of $1.49 billion. Management also significantly increased its full-year outlook, now expecting 14%-16% revenue growth and adjusted EPS of $20.75-$21.25 (+30% growth), with both figures being well ahead of its prior guidance. Image Source: Zacks Investment Research Strong execution across Zebra’s enterprise visibility, warehouse automation and mobile computing businesses drove the much better-than-expected results and guidance, prompting investors to send ZBRA shares sharply higher following the report. With businesses continuing to invest in automation and supply chain efficiency, Zebra appears well positioned to capitalize on long-term secular growth trends. Image Source: Zacks Investment Research Strong earnings surprises often serve as catalysts for higher EPS estimates and improving investor sentiment, with Caterpillar, Mercury General and Zebra Technologies each demonstrating why they're worth watching following their second-quarter results. Beyond delivering impressive earnings beats, all three companies reinforced confidence in their underlying businesses through strong operational execution and favorable outlooks. For investors seeking portfolio-worthy stocks with solid momentum and improving fundamentals, these names stand out as compelling candidates. Notably, Caterpillar and Zebra Technologies could eventually join Mercury General in receiving a buy rating should analysts continue raising their earnings estimates following these strong quarterly reports. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Caterpillar Inc. (CAT) : Free Stock Analysis Report Mercury General Corporation (MCY) : Free Stock Analysis Report Zebra Technologies Corporation (ZBRA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Zebra Technologies (ZBRA) is perhaps best known for barcode scanners and label printers. Its latest results tell a much bigger story. The technology company delivered one of earnings season’s most dramatic surprises, reporting adjusted earnings of $6.35 per share, nearly 46% above Wall Street’s $4.36 forecast. Revenue reached $1.56 billion, exceeding expectations by roughly $60 million. “These results demonstrate both the durability of demand for our solutions and our ability to convert this demand into profitable growth,” said Zebra CEO Bill Burns on the earnings call. Investors reacted fast. Shares of Zebra soared more than 26%, sending the stock near its 52-week high and market value exceeding $17 billion. For stockholders, the quarter is relevant for more than the headline beat. Zebra is benefiting as companies spend heavily to automate warehouses, track inventory, and give ordinary workers smarter devices. There was enough demand that management upped its full-year projection, although shortages of memory components continue to limit the number of products the company can supply. That produces a lot of unique investment setups. Zebra’s demand seems to be stronger than what its forecast implies. But following the stock’s rapid rise, buyers must decide if the company’s improving growth and profitability warrant a much higher price, particularly as supply constraints and rising component costs remain unresolved. Zebra revenue rose 20.4% in the second quarter from a year ago, including acquisitions and currency effects. Organic revenue, which excludes such effects, climbed 9.2%. Growth was broad-based and not dependent on any one product. Connected Frontline grew about 26% on a reported basis, driven by mobile computers and the recently acquired Elo Touch company. Asset Visibility and Automation sales grew 11.4%, driven by demand for printing systems and machine vision technologies. North America increased 9%, while Asia-Pacific and Latin America rose 13% and 15%, respectively. Europe, the Middle East, and Africa grew 7%, despite ongoing weakness in the Middle East. Hospitals’ equipping of additional caregivers with enterprise-grade mobile devices made health care Zebra’s fastest-growing end market. Manufacturing also grew at double-digit rates on the back of demand from the electronics and pharmaceutical sectors. Those statistics underscore why Zebra is so important, even beyond the scanners that customers see at grocery and retail checkouts. The company’s technologies enable firms to track goods, inspect production lines, manage warehouse inventories, and provide workers with real-time information. The company says that more than 80% of the Fortune 500 use Zebra’s technology. Related: Palantir CEO escalates Microsoft’s AI warning Even more of a surprise was the profitability. Adjusted gross margin increased 5.4 percentage points to 53.3%, and adjusted EBITDA margin was 27.7%. That improvement came from a one-off $73 million tariff recovery and will not be repeated to the same extent. But margins excluding the rebound still expanded by almost two percentage points, Zebra added. Pricing also mitigated a $20 million increase in management memory expenses. This information is crucial for investors, as component inflation sometimes forces hardware companies to make a choice between lower margins or higher pricing for customers. Zebra hiked prices in time to protect profitability without derailing demand. The business now forecasts price adjustments to recoup some $90 million of its expected $120 million memory cost headwind, versus a prior forecast of $60 million. Zebra boosted its full-year sales growth outlook to 14% to 16%, up three percentage points at the midpoint. It now expects adjusted earnings of $20.75 to $21.25 per share and adjusted EBITDA margin between 23.5% and 24%. Free cash flow should reach at least $1 billion. More AI: Nvidia just made a move Wall Street wasn’t ready for Microsoft just took sides in AI policy fight OpenAI just disclosed something genuinely alarming The company predicts revenue growth of 17% to 20% in the third quarter, with adjusted earnings projected between $4.70 and $4.90 per share. Those targets will likely still underestimate client demand. Demand signs would support outcomes at the high end of Zebra’s guidance, Burns said. Management adjusted the outlook closer to the middle, saying memory component shortages could limit shipments. The scarcity hits the mobile computers, wearables, and other gadgets Zebra offers to retailers, manufacturers, logistics organizations, and health care providers. Management said it is working with 10 new suppliers and plans to qualify five to seven sources for each main type of memory. Executives admitted the climate remained difficult, but the company now has a better view on suppliers for the next 18 months. This distinction is important. Zebra has no trouble finding customers, so it’s trying to obtain enough parts to meet demand. Those supply constraints may mean delayed rather than destroyed revenue, which could be beneficial for shareholders. It also brings risk: protracted shortages could shift purchases to later times, stifle growth, and force more price hikes. Zebra’s earnings beat was more than a post-pandemic hardware comeback. The company is marketing its scanners, mobile computers, radio-frequency identification goods, and machine-vision systems as the physical layer that connects artificial intelligence to labor on the front lines. It’s a less sexy aspect of the AI boom than big language models or data-center processors. It may also be easier to monetize for enterprises. Retailers use Zebra technology to track inventory, operate self-checkout stations, and enhance fulfillment. A delivery business can provide drivers with gadgets to track items and optimize routes. A factory can use machine vision to find faults that human inspectors may not see. The world's warehouses are still in the early phases of automation, with approximately three-quarters of them, Burns said, giving Zebra a lengthy runway in a served industry it estimates at $35 billion. The business also sees a pipeline of major transportation and logistics deployments coming up in 2027, notably in last-mile deliveries. Customers are interested in products that integrate mobile computing, RFID, and local AI processing. Memory supply: Better availability could allow Zebra to ship more products and move results toward the top of its guidance. Pricing: Further increases may protect margins but could eventually test customer demand. Organic growth: Investors should separate underlying expansion from acquisitions and favorable currency movements. Machine vision and RFID: Sustained adoption would broaden Zebra beyond its traditional printing and scanning businesses. Margins: Third-quarter profitability is expected to decline as the tariff recovery disappears and memory costs increase. Valuation: The post-earnings rally raised the price investors must pay for the company’s improving outlook. Zebra has enough financial flexibility to keep investing. During the first half, the company earned $361 million of free cash flow and closed the quarter with a 1.9-times debt-leverage ratio and $925 million of available credit. It also bought back $568 million of its stock and expects another $150 million in buybacks in the second half. It’s not the balance sheet that matters; it's the execution. Zebra needs to keep locking down memory, pass the costs down without losing customers, and turn strong demand into shipping goods. The strong stock surge suggests investors will need such performance to persist. Still, the quarter changed how investors should view the company. Zebra is more than a mature barcode equipment maker. It’s becoming a key provider to enterprises automating warehouses, hospitals, manufacturing, and delivery networks. The market paid attention after earnings. The next test is whether Zebra can turn demand it can’t yet completely service into growth that investors can continue to witness. Related: Zebra Tech Jumps on Strong Earnings and Outlook This story was originally published by TheStreet on Aug 5, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.

Interested in Zebra Technologies Corporation? Here are five stocks we like better. Record Q2 performance: Sales rose 20.4% year over year to more than $1.5 billion, while adjusted EBITDA margin reached 27.7% and non-GAAP EPS increased 76% to $6.35. Growth was broad-based across retail, manufacturing, healthcare and most regions. Supply constraints remain: Memory-component availability continues to limit some sales opportunities, though Zebra has secured enough supply for its updated outlook and is diversifying suppliers. The company offset higher memory costs through pricing and benefited from a $73 million tariff recovery. Outlook raised: Zebra now expects full-year sales growth of 14%–16%, adjusted EBITDA margin of 23.5%–24% and non-GAAP EPS of $20.75–$21.25, alongside at least $1 billion in free cash flow. Brady Corp Wires Up a Massive AI-Powered Breakout Zebra Technologies (NASDAQ:ZBRA) reported record second-quarter results, with sales growth across its major segments and regions, stronger profitability and a higher full-year outlook. Management said demand for the company’s portfolio of frontline automation, data capture, mobile computing, RFID, machine vision and AI-enabled solutions remained broad-based, although memory-component availability continued to constrain some potential sales. Second-quarter sales exceeded $1.5 billion, up 20.4% from a year earlier, or 9.2% on an organic constant-currency basis. Adjusted EBITDA margin reached 27.7%, while non-GAAP diluted earnings per share rose 76% year over year to $6.35. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control MarketBeat Week in Review – 05/11 - 05/15 CEO Bill Burns said the company’s results reflected “broad-based growth and significantly increased profitability,” as customers continue investing in digitization and automation of frontline operations. He said Zebra’s integrated hardware and software portfolio is intended to help customers improve productivity, visibility and real-time decision-making. Zebra said retail, manufacturing and healthcare each posted double-digit growth during the quarter. In retail, e-commerce and convenience-store activity benefited from demand for faster delivery and expanded fulfillment options. The recently acquired Elo Touch business also delivered strong growth, supported by self-service trends and customer interest in the combined offering. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Reading the Stripes: Is The Industrial Recession Over? Transportation and logistics sales were flat against a strong prior-year comparison, though Zebra reported relative strength in third-party logistics and warehousing. Burns said the company has a “robust multi-year pipeline” of large transportation and logistics deployments expected to begin in 2027, particularly involving last-mile delivery, RFID and AI-capable mobile devices. Manufacturing posted strong double-digit growth, led by electronics and pharmaceutical customers seeking increased operational visibility. Machine vision also outperformed as Zebra aligned its business and go-to-market teams around targeted manufacturing opportunities. Burns cited applications including AI-based optical character recognition in manufacturing, logistics, food and beverage operations. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Healthcare was Zebra’s fastest-growing end market in the quarter. The company said mobile computing demand was particularly strong as healthcare providers equipped more caregivers with enterprise-grade devices designed for communication, collaboration, patient safety and operational efficiency. North America sales rose 9%, led by retail, manufacturing and healthcare. EMEA sales increased 7%, with broad-based European growth partly offset by Middle East softness. Asia-Pacific sales grew 13%, led by China, Korea and Southeast Asia. Latin America sales rose 15%, driven by Mexico and Brazil. CFO Nathan Winters said second-quarter performance exceeded the high end of Zebra’s guidance, aided by increased memory supply, continued commercial momentum and favorable pricing. Connected Frontline sales grew nearly 26%, including the Elo acquisition, or 7.5% organically. Asset Visibility & Automation sales increased 11.4%, led by printing and machine vision. Adjusted gross margin improved 540 basis points to 53.3%. The result included a $73 million recovery of tariffs under the International Emergency Economic Powers Act that had not been included in the company’s outlook, as well as favorable foreign exchange. Zebra also said it fully offset a $20 million increase in memory costs during the quarter through price realization. Excluding the tariff recovery, Burns said adjusted EBITDA margin expanded by about two percentage points, supported by better-than-expected gross margins, productivity efforts and operating-expense leverage. Winters said the company improved operating-expense leverage by 170 basis points, helping adjusted EBITDA margin rise 7.1 percentage points year over year. Management said Zebra has secured sufficient memory supply to support its updated outlook but continues to operate in a dynamic supply environment. Winters said suppliers have been meeting commitments and the company has visibility into the components needed to support its forecasts. Zebra is using direct supplier co-planning, alternative sourcing and transitions to higher-density memory components. The company is working with 10 potential new suppliers and aims to qualify five to seven suppliers for each primary memory type, Winters said. He added that the company’s product portfolio is largely based on low-power LPDDR5 memory, an area where capacity is expected to expand into 2027. While customer demand signals point toward the high end of Zebra’s guidance ranges, management said its outlook assumes potential memory-related supply constraints. Burns said the company would take additional pricing or operational actions if necessary to protect profitability, though he said management would prefer not to raise prices further. Zebra raised its full-year sales growth forecast to 14% to 16%, representing a three-percentage-point increase at the midpoint of its previous outlook. The forecast includes an estimated eight percentage points of contribution from acquisitions and foreign exchange, while organic growth guidance includes the effects of previously announced memory-related price increases. The company now expects full-year adjusted EBITDA margin of 23.5% to 24% and non-GAAP diluted EPS of $20.75 to $21.25. Free cash flow is expected to be at least $1 billion, representing approximately 100% conversion. For the third quarter, Zebra forecast sales growth of 17% to 20%, including approximately 10.5 percentage points from acquisitions and favorable foreign exchange. Adjusted EBITDA margin is expected to be about 22%, and non-GAAP diluted EPS is projected between $4.70 and $4.90. Zebra generated $361 million in year-to-date free cash flow and ended the quarter with a debt leverage ratio of 1.9 times and $925 million of credit capacity. The company repurchased $568 million of stock in the first half and said its full-year EPS outlook assumes an additional $150 million of repurchases in the second half. Zebra Technologies Corporation is a global technology company specializing in marking, tracking and computer printing solutions. The company produces a wide range of hardware and software products designed to enable real-time visibility of assets, inventory and personnel across diverse industries. Its offerings help businesses automate data capture and streamline operations in environments such as retail, healthcare, manufacturing, transportation and logistics. The company's product portfolio includes barcode and RFID printers, mobile computing devices, barcode scanners, RFID readers and related supplies such as labels and tags. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Zebra Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: Sales exceeded $1.5 billion, growing more than 20% (or 9% on an organic basis) year-over-year. Adjusted EBITDA Margin: 27.7%, including the benefit of $73 million of tariff recovery. Non-GAAP Diluted EPS: $6.35, a 76% increase over the prior year. Segment Performance (Connected Frontline): Grew nearly 26% including the Elo acquisition, or 7.5% on an organic basis. Segment Performance (Asset Visibility & Automation): Grew 11.4%, led by printing and machine vision. Regional Sales Growth: North America up 9%, EMEA up 7%, Asia Pacific up 13%, and Latin America up 15%. Adjusted Gross Margin: Improved 540 basis points to 53.3%. Free Cash Flow: Generated $361 million year-to-date. Share Repurchases: Repurchased $568 million of stock in the first half of the year. Full-Year Outlook: Expects sales growth between 14% and 16%, adjusted EBITDA margin between 23.5% and 24%, and non-GAAP diluted EPS between $20.75 and $21.25. Warning! GuruFocus has detected 7 Warning Signs with ZBRA. Is ZBRA fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record Q2 results with sales exceeding $1.5 billion, growing over 20% year-over-year, and non-GAAP EPS of $6.35, a 76% increase. Strong performance across all segments and regions, with double-digit growth in retail, manufacturing, and healthcare end markets. Adjusted EBITDA margin expanded by 7.1 points to 27.7%, driven by better-than-expected gross margins and operating expense leverage. Successfully mitigated a $20 million increase in memory costs through strong price realization, and raised full-year outlook due to confidence in navigating memory supply. Robust capital allocation with $568 million in share repurchases in the first half, and free cash flow expected to be at least $1 billion for the year. Early traction in new AI-optimized mobile computers, wearables with RFID, and machine vision solutions, enhancing competitive positioning. Elo Touch acquisition contributing strong profitable growth with robust customer interest and identified $10 million in synergies. Memory supply remains a challenging and dynamic environment, with demand signals exceeding supply, potentially capping growth. Q3 adjusted EBITDA margin expected to decline to approximately 22%, partly due to higher memory costs and removal of tariff recovery benefits. Transportation & Logistics sales were flat due to strong prior-year comparisons, with softness in the Middle East impacting EMEA growth. Full-year guidance factors in potential supply constraints, with the midpoint reflecting possible memory limitations despite strong demand. Memory cost headwind of approximately $120 million for the year requires continued price increases, which may impact customer relationships. Q4 growth is somewhat capped by expected memory supply, and the company is still working to secure additional supply for the second half. RFID growth was flat in Q2 due to project timing, though full-year growth is still expected. Q: Can you provide more color on the successful deployments expected in 2027 in the T&L segment, and does your confidence in 2027 bookings continue to grow?A: Bill Burns (CEO): We feel good about transportation and logistics despite difficult comparisons from last year, with growth across third-party logistics and warehousing. We have a robust multiyear pipeline of large deployments focused on last-mile delivery. Our differentiation comes from new mobile devices that add RFID and AI capabilities, giving us a competitive advantage. Starting in 2027, we see a strong pipeline of opportunities for refreshes within transportation and logistics, and we are increasingly confident in those conversations with customers. Q: To what extent is your guidance for Q3 and the second half still constrained by memory supply, and what visibility do you have into 2027 on that improving?A: Bill Burns (CEO) and Nathan Winters (CFO): Memory remains a dynamic and challenging environment, but our teams executed well to secure supply and exceed the top end of our Q2 guidance. Demand signals from customers are above what we are guiding to, and there are still constraints. We are working on direct supplier co-planning for the next 18 months, qualifying 10 new suppliers with a goal of having 5-7 qualified suppliers for each primary memory type. These actions give us confidence to secure volume needed to support customers into 2027. Q: Can you provide clarity on how we should think about the two segments (Connected Frontline and Asset Visibility & Automation) for the rest of the year, and which should lead growth?A: Nathan Winters (CFO): We see strong growth across both segments. Asset Visibility and Automation (AVA) saw strong growth in print, data capture, machine vision, and RFID deployments. Connected Frontline (CF) is seeing customers deploy more devices to frontline workers, with next-generation devices adding AI capabilities and RFID. Elo Touch had a strong Q2 and we expect that to continue with joint selling efforts. We expect growth in both segments in the second half, with truly broad-based growth across the portfolio, regions, and vertical markets. Q: On the memory cost headwind, it looks like pricing is being realized more quickly than expected. Can you tell us what's happening with pricing realization?A: Nathan Winters (CFO): Out of the $120 million gross memory headwind, we previously communicated $60 million expected benefit from pricing, but we've increased that to $90 million primarily due to strength in Q2. We proactively quoted deals at higher prices going back to the beginning of the year, even before the official price increase in late March. This proactive approach on pipeline projects was a big driver. The team's focus gives us confidence to deliver on the back half and fully mitigate exposure into 2027. Q: Is the high end of your revenue guidance achievable in the current memory availability framework, and are long-term agreements (LTAs) available to you?A: Bill Burns (CEO) and Nathan Winters (CFO): Demand signals lead us to the high end of our outlook for Q3 and the full year, but the midpoint factors in potential supply constraints from memory. We were able to secure additional supply in Q2, pushing us above the top end. We've had discussions regarding supply agreements with memory suppliers, but our priority has been qualifying new suppliers and memory types. While discussions are ongoing, LTAs haven't been necessary to achieve our goals, but we would pursue them if needed to obtain increased supply. Q: On the Elo Touch acquisition, where are you in terms of exploiting revenue synergies, and where is the strong healthcare traction coming from?A: Nathan Winters (CFO): Elo Touch performance reaffirms our conviction in the acquisition, with growth above expectations in Q2 and a strong pipeline driven by joint selling efforts. We've identified about $10 million in synergies so far, with real synergies coming from expanding into new geographies and named accounts. In healthcare, our highest growth vertical, we're seeing strong mobile computing performance as more caregivers are equipped with enterprise-grade solutions. We're also taking Elo products into healthcare for self-service applications like patient check-in, expanding opportunities in this vertical. Q: Can you elaborate on the underlying demand environment across different business verticals in the EMEA region specifically?A: Nathan Winters (CFO): EMEA is slightly behind other regions, partly due to tougher compares from the prior year and softness in the Middle East from geopolitical challenges. However, we're seeing resilient demand across Europe with double-digit growth in machine vision, supplies, RFID, print, and mobile computing. We saw 7% growth for the quarter, with relative strength in retail, manufacturing, and healthcare. We have no concerns about EMEA and feel good about what they're seeing given the resilience despite conditions in the European market. Q: On RFID growth, are you still expecting double-digit growth for the full year, and can you share more color on gross margins and OpEx in the second half?A: Bill Burns (CEO) and Nathan Winters (CFO): We expect RFID growth for the full year despite Q2 being flat, which is primarily project timing. We're seeing opportunities beyond retail apparel into broader merchandise, parcel, fresh food, and healthcare. For margins, Q3 guidance reflects a slight step down from Q2 excluding IPA refunds, with about 1 point degradation from higher memory costs. We'll get about 1 point of OpEx scaling for the year driven by higher volume and restructuring actions completed in Q2, while continuing to invest in new AI solutions and go-to-market coverage. Q: On the full-year guide, if we take out pricing, volume growth seems to be around mid-single digits. Is that sustainable and can it improve into next year?A: Nathan Winters (CFO): Our full-year sales guide of 14%-16% includes organic growth of 7 points, which includes 2 points of price, with acquisitions and FX making up the remaining 8 points. While not guiding for 2027, we're excited about long-term opportunities. We feel confident we can continue to meet growing customer demand, and there's no reason we wouldn't be within our long-term growth range of 5%-7% as we move into 2027, though that depends on pipeline timing and memory capacity entering the year. Q: Was memory still a constraint in Q2, and would sales growth have been even higher if memory were unconstrained?A: Nathan Winters (CFO): For the complete transcript of the earnings call, please refer to the full earnings call transcript.

The S&P 500 Index ($SPX) (SPY) today is up +0.73%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +1.03%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +2.00%.  September E-mini S&P futures (ESU26) are up +0.72%, and September E-mini Nasdaq futures (NQU26) are up +1.94%. Stock indices are moving higher today, with the S&P 500 and Dow Jones Industrials posting record highs and the Nasdaq 100 posting a 2.5-week high.  Strength in technology stocks is leading the broader market higher on some better-than-expected earnings results.  Palantir Technologies is up more than +21% after reporting stronger-than-expected Q2 revenue and raising its full-year revenue forecast.  Also, Zebra Technologies is up more than +18% after reporting better-than-expected Q2 EPS and raising its full-year EPS forecast.  In addition, Caterpillar is up more than +10% after reporting Q2 adjusted EPS that was well above the consensus. General Motors vs. Ford: 1 Auto Giant Is Winning the EV Race 1 Japanese Company Just Waved a Red Flag for Micron Stock. How to Play It Here. Billionaire Ken Griffin Just Saved Situational Awareness, But Here’s What a Rescue Call From Citadel Really Sounds Like — ‘I… Heard the Grim Reaper’s Scythe’ Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! Weaker crude oil prices are also supportive of stocks.  Crude prices gave up an overnight advance and turned sharply lower after Qatar said a potential agreement to revive talks between the US and Iran has been drafted.  Crude prices temporarily rose more than +1% in overnight trade after President Trump threatened fresh air strikes against Iran if it doesn’t soon open the Strait of Hormuz. The US June trade deficit was -$73.3 billion, slightly larger than expectations of -$73.0 billion and a negative factor for Q2 GDP. Sep WTI crude oil prices (CLU26) are down more than -3% today at a 3-week low after a Qatari spokesman said a proposed resolution “is being circulated between the US and Iran,” cautioning that a deal has not yet been reached.  President Trump has threatened Iran with renewed air strikes and stressed that his latest offer of talks is Iran’s “last chance” as he demanded full reopening of the Strait of Hormuz.  A diplomatic resolution is hanging on talks between Oman and Iran to get more ships moving through the strait, but Iran continues to insist on its authority over the waterway.  Also, the key Saudi export port of Yanbu in the Red Sea had its busiest day on Monday since Houthi rebels began attacking shipping in the region, as more ships transited through the Bab el-Mandeb chokepoint. The outlook for strong Q2 earnings is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2.  So far, earnings results have been positive, with 86% of the 322 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data. The markets are discounting a 59% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16. Overseas stock markets are higher today.  The Euro Stoxx 50 rose to a new all-time high and is up +0.78%.  China's Shanghai Composite closed up +0.33%.  Japan's Nikkei-225 Stock Average closed up +0.32%. Interest Rates September 10-year T-notes (ZNU6) today are up +8 ticks.  The 10-year T-note yield is down -3.7 bp to 4.639%.  T-notes recovered from overnight losses and pushed higher today after crude oil prices turned lower.  WTI crude oil is down more than -3% today at a 3-week low, lowering inflation expectations. Gains in T-notes are limited as strength in stocks today has reduced safe-haven demand for T-notes. European government bond yields are moving lower today.  The 10-year German bund yield is down -4.7 bp to 3.105%.  The 10-year UK gilt yield fell to a 3-week low of 4.913% and is down -3.8 bp to 4.915%. Markets are discounting an 85% chance of a +25 bp ECB rate hike at its next policy meeting on September 10. US Stock Movers Chipmakers and AI-infrastructure stocks are rallying today, boosting the overall market.  The Philadelphia Stock Exchange Semiconductor Index ($SOX) is up more than +5% at a 1-week high.  Marvel Technology (MRVL) is up more than +12%, and ARM Holdings (ARM) is up more than +11%.  Also, Sandisk (SNDK) is up more than +8%, and Intel (INTC) is up more than +6%.  In addition, Advanced Micro Devices (AMD), Applied Materials (AMAT), Micron Technology (MU), and Lam Research (LRCX) are up more than +5%, and Broadcom (AVGO), Microchip Technology (MCHP), and Qualcomm (QCOM) are up more than +4%. Energy stocks and service providers are under pressure today, with WTI crude oil down more than -3% at a 3-week low.  APA Corp (APA) and Diamondback Energy (FANG) are down more than -3%, and Chevron (CVX), ExxonMobil Holdings (XOM), and Devon Energy (DVN) are down more than -2%.  Also, Occidental Petroleum (OXY) and ConocoPhillips (COP) are down more than -1%. Ameresco (AMRC) is up more than +29% after raising its full-year adjusted EPS forecast to $1.15 to $1.35 from a previous estimate of $1.06 to $1.28, stronger than the consensus of $1.10. Zebra Technologies (ZBRA) is up more than +21% to lead gainers in the S&P 500 after reporting Q2 adjusted EPS of $6.35, well above the consensus of $4.37, and raising its full-year adjusted EPS estimate to $20.75 to $21.25 from a previous forecast of $$18.30 to $18.70. Palantir Technologies (PLTR) is up more than +20% to lead gainers in the Nasdaq 100 after reporting Q2 revenue of $1.94 billion, better than the consensus of $1.81 billion, and raising its full-year revenue estimate to $8.15 to $8.16 billion from a previous estimate of $7.65 billion to $7.66 billion. Caterpillar (CAT) is up more than +10% to lead gainers in the Dow Jones Industrials after reporting Q2 adjusted EPS of $8.17, well above the consensus of $6.17. Advanced Energy Industries (AEIS) is up more than +10% after reporting Q2 sales of $574 million, better than the consensus of $542.7 million. Broadridge Financial Solutions (BR) is up more than +10% after reporting Q4 revenue of $2.22 billion, stronger than the consensus of $2.17 billion. Bruker Corp. (BRKR) is down more than -16% after reporting Q2 revenue of $838.5 million, weaker than the consensus of $853.6 million. Aptiv Plc (APTV) is down more than -14% to lead losers in the S&P 500 after reporting Q2 net sales of $3.30 billion, weaker than the consensus of $3.32 billion, and cutting its full-year net sales forecast to $12.60 billion to $12.80 billion from a previous forecast of $12.80 billion to $13.20 billion. Powell Industries (POWL) is down more than -7% after reporting Q3 EPS of $1.42, weaker than the consensus of $1.45. Duolingo (DUOL) is down more than -4% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $93. Coca-Cola Europacific Partners Plc (CCEP) is down more than -4% to lead losers in the Nasdaq 100 after reporting Q2 revenue of 5.72 billion euros, right on the consensus. Nike (NKE) is down more than -2% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $40. Earnings Reports (8/4/2026) Advanced Micro Devices Inc (AMD), AMETEK Inc (AME), Amgen Inc (AMGN), Apollo Global Management Inc (APO), Aptiv PLC (APTV), Archer-Daniels-Midland Co (ADM), Arista Networks Inc (ANET), Assurant Inc (AIZ), Ball Corp (BALL), Booking Holdings Inc (BKNG), Broadridge Financial Solutions (BR), Caterpillar Inc (CAT), Cummins Inc (CMI), DaVita Inc (DVA), Devon Energy Corp (DVN), Duke Energy Corp (DUK), DuPont de Nemours Inc (DD), Emerson Electric Co (EMR), EOG Resources Inc (EOG), Expeditors International of Washingtom (EXPD), Fidelity National Information (FIS), Gartner Inc (IT), Gilead Sciences Inc (GILD), Healthpeak Properties Inc (DOC), Henry Schein Inc (HSIC), IDEXX Laboratories Inc (IDXX), International Flavors & Fragrances (IFF), Jacobs Solutions Inc (J), Kimberly-Clark Corp (KMB), Kimco Realty Corp (KIM), Leidos Holdings Inc (LDOS), Marathon Petroleum Corp (MPC), McDonald's Corp (MCD), Merck & Co Inc (MRK), Mosaic Co/The (MOS), NRG Energy Inc (NRG), Paramount Skydance Corp (PSKY), Pfizer Inc (PFE), Pinnacle West Capital Corp (PNW), Prudential Financial Inc (PRU), Public Service Enterprise Group (PEG), Qnity Electronics Inc (Q), Revvity Inc (RVTY), Rockwell Automation Inc (ROK), Sysco Corp (SYY), TransDigm Group Inc (TDG), Waters Corp (WAT), WW Grainger Inc (GWW), Wynn Resorts Ltd (WYNN), Zebra Technologies Corp (ZBRA). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Record quarterly results were driven by broad-based growth across all segments and regions, particularly in retail, manufacturing, and healthcare end markets. Performance attribution is credited to strong execution in securing increased memory supply and favorable pricing realization to offset component cost headwinds. The retail segment benefited from e-commerce fulfillment trends and self-service adoption, while healthcare saw record growth as providers equip more caregivers with enterprise-grade mobile solutions. Manufacturing growth was fueled by a macro recovery and a strategic focus on machine vision and asset visibility solutions in electronics and pharmaceuticals. The Elo Touch acquisition is delivering strong profitable growth, with management identifying $10 million in synergies and expanding the portfolio into new geographies and use cases like point-of-sale and self-service. Management emphasized that AI is now central to their value proposition, with AI-powered solutions enhancing productivity and real-time decision-making for frontline workers. Operational efficiency was bolstered by the substantial completion of previously announced restructuring actions, contributing to significant operating expense leverage. The full-year 2026 sales growth outlook was raised to 14%-16%, factoring in year-to-date outperformance and continued momentum in manufacturing and machine vision. Guidance assumes the full mitigation of a $120 million memory cost headwind through targeted price increases, restructuring savings, and volume leverage. Management maintains a robust multi-year pipeline for large-scale deployments in Transportation & Logistics starting in 2027, focused on last-mile delivery and RFID integration. The outlook remains partially constrained by memory supply; while demand signals support the high end of guidance, the midpoint reflects potential supply chain volatility. Free cash flow for the full year is expected to be at least $1 billion, supported by optimized working capital and a 100% conversion rate target. A $73 million IEEPA tariff recovery significantly boosted Q2 adjusted EBITDA margins but is excluded from forward-looking margin expectations. Memory supply remains a dynamic risk; management is qualifying 10 new suppliers and transitioning to higher-density components to ensure long-term resilience into 2027. Geopolitical challenges in the Middle East continue to cause regional softness, partially offsetting broader growth in the EMEA region. The company executed $568 million in share repurchases in the first half, signaling strong conviction in long-term value despite current market volatility. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed a robust pipeline for 2027 driven by refresh cycles in last-mile delivery and increased RFID adoption for parcel visibility. New mobile devices with integrated AI and RFID capabilities are providing a distinct competitive advantage in securing these multi-year contracts. Zebra increased its expected pricing benefit from $60 million to $90 million for the year due to proactive quoting and strong realization in mobile computing. While management prefers not to raise prices, they expressed confidence in their ability to take further action if memory costs continue to escalate. Machine vision is outperforming due to a reorganized go-to-market team focused on specific manufacturing use cases like optical character recognition. The integration of Photoneo has enhanced the portfolio, allowing Zebra to capture more complex automation opportunities in food, beverage, and electronics. Current demand signals actually track toward the high end of the raised guidance, but the company is maintaining a prudent midpoint to account for supply uncertainty. The team is working on 18-month supply pipelines and qualifying 5-7 suppliers for each primary memory type to move toward an unconstrained environment.

Zebra Technologies (NASDAQ:ZBRA) posted record second-quarter performance driven by broad-based growth across its business and increased its full-year guidance as demand for automation and AI solutions remained strong. Zebra Technologies (NASDAQ:ZBRA) delivered record second-quarter results, with revenue rising 20.4% year over year to $1.56 billion. Both business segments posted growth, reflecting broad customer demand for connected frontline and automation solutions. Profitability improved significantly, with adjusted EBITDA margin expanding to 27.7% and non-GAAP EPS climbing to $6.35. Management raised its full-year 2026 outlook, pointing to continued sales growth, higher earnings, and more than $1 billion in expected free cash flow. Strong cash generation supported continued capital returns, with $568 million of share repurchases completed during the first half of 2026. Zebra Technologies (NASDAQ:ZBRA) reported record financial results for the second quarter of 2026, highlighting continued demand for its enterprise automation and digital workflow solutions. Revenue increased 20.4% year over year to $1.557 billion, while net income more than doubled to $233 million. Diluted earnings per share reached $4.85, and non-GAAP diluted EPS rose 75.9% to $6.35. Growth was broad-based across both operating segments. Connected Frontline revenue increased to $903 million from $717 million a year earlier, while Asset Visibility & Automation revenue climbed to $654 million from $576 million. Organic revenue grew 9.2%, including 7.5% growth in Connected Frontline and 11.4% growth in Asset Visibility & Automation. Margins also strengthened during the quarter. Gross margin expanded to 53.0% from 47.6%, while adjusted EBITDA increased 61.4% to $431 million, representing a 27.7% margin. The company said results benefited in part from IEEPA tariff recoveries and favorable foreign exchange movements. Zebra also continued returning capital to shareholders, repurchasing $268 million of stock during the quarter and $568 million during the first six months of 2026. The combination of double-digit revenue growth, expanding margins, and a higher full-year outlook suggests Zebra continues to benefit from customer investment in automation, asset tracking, and AI-enabled operational technologies. Management’s decision to raise guidance may reinforce confidence that current demand trends are extending beyond a single quarter. Continued strength across both major operating segments also suggests growth is being supported by multiple end markets rather than a single business line. The company’s cash generation provides additional flexibility to fund acquisitions, invest in product development, and continue share repurchases. At the same time, investors may continue monitoring whether margin performance remains at current levels as tariff recoveries and currency benefits evolve. Investors will be watching Zebra’s third-quarter execution against its updated outlook, which calls for revenue growth of 17% to 20%, adjusted EBITDA margin of approximately 22%, and non-GAAP EPS between $4.70 and $4.90. For the full year, management expects revenue growth of 14% to 16%, adjusted EBITDA margin between 23.5% and 24.0%, non-GAAP EPS of $20.75 to $21.25, and free cash flow exceeding $1 billion. Investors will also monitor demand trends for enterprise automation and AI solutions, as well as the contribution from acquisitions and ongoing capital allocation through share repurchases. Zebra Technologies Corporation stock price