ZBRA earnings analysis
What we found in ZBRA's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Zebra delivered a strong Q2, with revenue up 20.4% year over year to $1.557 billion, GAAP diluted EPS up to $4.85 from $2.19, and gross margin up 540 basis points to 53.0%. Both segments grew, with AVA producing 11.4% organic growth and CF delivering 7.5%, while six-month free cash flow reached $361 million. The principal offsets are a material but partly one-time $73 million tariff-refund benefit and elevated debt of $2.776 billion ahead of a planned second-half 2026 refinancing.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to $1.557B
- Q2 net sales rose $264 million, or 20.4%, year over year to $1.557 billion; this also represents a $57 million, or 3.8%, increase from $1.500 billion in Q1 2026. Organic sales increased 9.2%.
- Profit and EPS rose sharply
- GAAP diluted EPS more than doubled to $4.85 from $2.19 in Q2 2025, while operating income increased $138 million, or 75.4%, to $321 million. Operating margin expanded to 20.6% from 14.2% in the prior-year quarter.
- Gross margin expanded 540 bps
- Gross margin expanded 540 basis points year over year to 53.0% from 47.6%, aided by a $73 million pretax expected IEEPA-tariff refund benefit and foreign currency. The company said it fully mitigated increased memory costs through price realization.
- Connected Frontline posted 25.9% growth
- Connected Frontline revenue grew $186 million, or 25.9%, to $903 million, led by Elo Touch, mobile-computer sales, and foreign currency; segment operating income increased 54.2% to $219 million.
- AVA delivered strongest organic growth
- AVA revenue increased $78 million, or 13.5%, to $654 million, with 11.4% organic growth driven by printing and machine-vision products. AVA operating income rose 79.4% to $192 million and gross margin rose 770 basis points to 56.3%.
- Cash generation and capex efficiency improved
- Six-month operating cash flow increased $62 million to $387 million and free cash flow increased $73 million to $361 million. Capital expenditures were $26 million, equal to 1.7% of six-month sales of $3.052 billion.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Debt rose while funding buybacks
- Total debt increased $265 million from $2.511 billion at December 31, 2025 to $2.776 billion at July 4, 2026. The company increased revolving-credit and receivables-facility borrowings to fund $568 million of year-to-date share repurchases.
- Large refinancing required in 2026
- The Term Loan A and Revolving Credit Facility, which together include $2.275 billion classified as current debt, mature May 25, 2027. Management intends to refinance the Credit Facility in the second half of 2026, with timing and terms subject to debt-market conditions.
- Margin benefited from $73M tariff recovery
- The 53.0% gross margin included a $73 million pretax benefit from expected refunds of previously paid IEEPA import tariffs, of which only $14 million cash was received during Q2. This benefit may not recur and collection of the remaining expected refund remains pending.
- Restructuring cash obligations remain
- The company recorded an additional $8 million of severance and related costs in Q2 under the 2025 Productivity Plan, bringing cumulative one-time charges to $37 million. Most remaining obligations are expected to be paid in the second half of 2026.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.85
- Gross margin
- 53.0%
- Operating margin
- 20.6%
- Segment
- Connected Frontline revenue: $903 million, up 25.9% year over year; organic growth 7.5%.
- Segment
- Asset Visibility & Automation revenue: $654 million, up 13.5% year over year; organic growth 11.4%.
What they said about what is next.
The 10-Q refers to the company's full-year 2026 financial outlook but does not provide quantitative outlook ranges in the filing; quantitative guidance was deferred to the earnings release/call.
The filing reads better than the one before it.
What came before.
- 10-Q · May 12, 2026
- Zebra Technologies reported a strong first quarter in 2026, exceeding revenue and EPS expectations with net sales of $1.495 billion and a diluted EPS of $2.72. This performance marks a 14.3% increase in revenue compared…
- 10-K · February 12, 2026
- Zebra describes a strategy of expanding beyond traditional AIDC into end-to-end frontline solutions, using acquisitions and a re-segmentation (Connected Frontline and Asset Visibility & Automation) to accelerate…
- 10-Q · October 28, 2025
- Zebra reported Q3 2025 net sales of $1,320 million and GAAP diluted EPS of $1.97. Revenue was up year-over-year and both segments expanded, but gross margin compressed slightly versus the prior-year quarter and…
- 10-Q · August 5, 2025
- Zebra reported Q2 net sales of $1,293 million, up $76 million (+6.3%) versus the prior-year quarter, with gross profit of $616 million (gross margin 47.6%). Operating income rose to $183 million and diluted EPS was…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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