Timing correction: Zebra is scheduled to report second-quarter 2026 results on Tuesday, August 4, 2026, at 8:30 a.m. ET—i.e., today, not tomorrow. This preview is based on information available ahead of the release.
Zebra enters 2Q with substantial operating momentum. In 1Q26, revenue rose 14.3% year over year to $1.495 billion, including 4.3% organic growth, while non-GAAP EPS grew 18% to $4.75. Management characterized demand as broad-based across regions and both operating segments, with particular strength in manufacturing, mobile computing, printing, machine vision, retail/e-commerce, and healthcare.
The key complication is that reported growth overstates the underlying organic cadence: acquisitions—principally Elo Touch—and FX accounted for a large portion of the 1Q growth. That distinction matters for 2Q, where the central debate is likely to be whether Zebra can sustain mid-single-digit organic growth while absorbing higher memory costs and navigating supply constraints.
The stock has already reflected a good deal of optimism. ZBRA closed at $291.68 on August 3, up roughly 34% since May 11 and nearly 11% since June 30. A simple in-line quarter may therefore be insufficient; investors will likely focus most on the quality of demand, margins, and the durability of the full-year outlook.
| Metric | Company outlook | Implied comparison |
|---|---|---|
| Revenue growth | +14% to +17% YoY | Implies approximately $1.474B–$1.513B of revenue, based on 2Q25 revenue of $1.293B. |
| Organic and underlying growth | Roughly 3.5%–6.5% implied | Reported guide includes about 10.5 points from acquisitions and favorable FX |
| Adjusted EBITDA margin | Slightly above 21% | Down sequentially from the unusually strong 23.2% in 1Q |
| Non-GAAP diluted EPS | $4.20–$4.50 | Up approximately 16%–25% YoY versus 2Q25 non-GAAP EPS of $3.61. |
| Adjusted tax rate | ~19% | Important modeling input |
| Full-year non-GAAP EPS | $18.30–$18.70 | Raised after 1Q |
| Full-year FCF | More than $900M | Management targets roughly 100% conversion |
Important framing: Zebra’s 2Q revenue midpoint of about $1.49 billion is essentially flat sequentially versus 1Q’s $1.495 billion, despite normal seasonal progression. That puts a premium on margins and on evidence that the company’s demand pipeline is being constrained by component availability rather than weakening end-market demand.
The cleanest positive signal in 1Q was broad demand rather than a single-product or single-region spike:
For 2Q, investors should look for confirmation that this breadth continued. In particular:
What would disappoint: organic growth below the implied range, a notable slowing in mobile computing or printing, or evidence that constrained memory supply is reducing shipments rather than merely limiting upside.
Zebra’s margin story is unusually important this quarter. In 1Q, adjusted EBITDA margin reached 23.2%, helped by favorable mix, FX, productivity actions, and operating leverage. But management explicitly guided 2Q EBITDA margin to slightly above 21%.
The expected sequential decline is not necessarily a sign of weaker execution. Zebra explained that:
This makes the report a test of two claims:
Zebra’s advantages include direct supplier relationships, alternative sourcing, engineering transitions toward higher-density memory products, and targeted price increases. Yet the risk is clear: if allocation worsens, component costs rise beyond expected contractual escalators, or price realization lags cost inflation, margins could become the principal downside surprise.
What to watch: adjusted gross margin, 2Q adjusted EBITDA margin versus the “slightly above 21%” guide, and any change in management’s assessment of the second-half memory environment.
Elo Touch is a major driver of reported growth in 2026. In 1Q, Elo accounted for most of Connected Frontline’s gap between reported 20.6% growth and organic 3.8% growth.
The acquisition appears to be tracking to plan:
For investors, the issue is less whether Elo helps reported revenue—it clearly does—and more whether integration supports earnings quality. Positive indicators would include stable or improving CF margins, new cross-sell wins, and management confidence in synergy realization. Conversely, incremental integration costs, weaker-than-expected Elo growth, or pressure on the CF margin profile would raise concern that the acquisition is diluting returns.
After 1Q, Zebra raised its 2026 outlook to:
The full-year revenue guide includes roughly 7 points of benefit from acquisitions and FX, implying an underlying organic-growth profile of roughly low- to mid-single digits. Management said unconstrained demand would support results near the high end of its range, with memory availability being the principal limiting factor.
That puts the likely post-earnings stock reaction hierarchy as follows:
A maintained full-year guide might be adequate if accompanied by convincing commentary that supply remains secure and demand is pressing toward the high end. A raise would be more meaningful if it reflects genuine organic-demand strength rather than only FX, price, or acquisition effects.
Management repurchased $300 million of stock in 1Q and another $200 million early in 2Q, demonstrating confidence in both cash flow and valuation. The company said its current EPS outlook assumes an additional $100 million of repurchases, while leaving open the possibility of allocating more of annual free cash flow to buybacks.
The trade-off is that the company had $2.66 billion of total debt at the end of 1Q, with some incremental revolver and receivables-financing borrowings used to support repurchases. Management cited leverage of approximately 2.1x and $1.1 billion of credit capacity, which appears manageable, but investors should monitor whether continued repurchases reduce flexibility if the component environment or macro demand deteriorates.
Zebra’s 2Q report is primarily a quality-of-growth and margin-execution event. The company has already shown that demand is resilient and broad-based, while Elo, FX, and buybacks provide meaningful support to reported growth and EPS. The higher hurdle is proving that organic growth can remain solid, machine vision can sustain its apparent inflection, and memory inflation can be absorbed without damaging the full-year margin framework.
Bull case: Organic growth trends toward the high end of the implied range; manufacturing and machine vision remain strong; EBITDA margin exceeds the “slightly above 21%” target; memory supply visibility improves; and full-year guidance is reiterated or raised.
Bear case: Reported growth is heavily acquisition/FX driven while organic demand slows; memory constraints limit shipments or price recovery; margin lands at or below guidance; or management becomes more cautious on second-half supply, tariffs, or large-project conversion.