Zebra Technologies (ZBRA) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: The setup favors a beat — consensus sits at or below the midpoint of management’s own Q2 guidance, memory cost headwinds were well-telegraphed, and the company entered the quarter with a strong backlog; the primary swing factor is whether memory supply held at the assumed first-half run-rate and whether gross margin can hold above the guided “slightly above 21%” EBITDA floor.

Zebra heads into its Q2 2026 print with one of the cleaner setups in the group: management guided to 14–17% total sales growth (3.5–6.5% organic) and Non-GAAP EPS of $4.20–$4.50, and consensus at $4.37 sits essentially at the midpoint, leaving room for a beat if memory supply tracked the assumed first-half run-rate and deal mix remained favorable. The bar on revenue is similarly modest — consensus of ~$1.50B is only marginally above the low end of guidance, and management explicitly noted that “unconstrained demand pushes us to the higher end of our outlook range,” suggesting the volume ceiling is supply-driven, not demand-driven. Gross margin is the key watch item: Q1 delivered a multiyear-high adjusted gross margin of 50.4%, but management guided for ~1.5 points of sequential EBITDA margin compression in Q2 as memory costs step up, implying an adjusted EBITDA margin of “slightly above 21%” versus 23.2% in Q1. The stock has recovered ~21% from its Q1 earnings close of $241.79 to ~$293.82 at July 31, outperforming XLI (+3.1%) and the S&P 500 (+1.2%) over the same period, suggesting the market has already priced in a solid print; the wildcard is whether management raises full-year EPS guidance again — the current range of $18.30–$18.70 implies a meaningful H2 step-up, and any upward revision or commentary on memory supply improving into H2 could be the incremental catalyst.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus sits at or below the midpoint of management’s own Q2 guidance on every major KPI, making the bar achievable; Non-GAAP EPS ($4.37 consensus vs. $4.35 guidance midpoint) and organic revenue growth (~5.1% consensus vs. 5.0% guidance midpoint) are the two biggest swing factors, with gross/EBITDA margin the secondary read on memory cost execution.

Table 1 — Q2 2026 Current-Quarter Snapshot

Sources: Visible Alpha Consensus and Actuals Data (Revenue, EPS – Diluted – Operating, Organic Revenue Growth, Gross Margin – Operating, EBITDA – Operating); Q1 2026 Earnings Release (May 12, 2026); Q1 2026 Earnings Call Transcript (May 12, 2026). Guidance midpoints derived from stated ranges. Consensus vs. guidance delta calculated by author from VA consensus and stated guidance ranges.

Table 2 — Beat / Miss History (Last 8 Quarters, Top 2 KPIs)

KPI 1: Revenue ($M)

KPI 2: Non-GAAP Diluted EPS ($)

Pattern: ZBRA has beaten revenue consensus in all 8 of the last 8 quarters, with beats ranging from +0.2% to +3.0%; EPS beats have been more variable in magnitude (0% to +13.2%) but consistent in direction — 7 beats and 1 in-line over the same window — suggesting the bar is consistently set conservatively, though the Q4 2025 in-line print is a reminder that the cushion can compress when memory costs step up.

Source: Visible Alpha Consensus and Actuals Data (Revenue; EPS – Diluted – Operating).

3. Guidance & Commentary Evolution

Key Takeaway: Management’s tone has been consistently constructive since the Q1 2026 print — no formal guidance revisions have been issued post-earnings, but the Q1 call language was notably bullish (“unconstrained demand pushes us to the higher end of our outlook range”), and the company has continued executing accelerated buybacks, signaling confidence in the setup.

No formal guidance revisions have been issued since the Q1 2026 earnings call on May 12, 2026. Management’s tone on the call was notably constructive: CEO Bill Burns stated that “the momentum has continued into Q2 across the business” and that “unconstrained demand pushes us to the higher end of our outlook range,” while CFO Nathan Winters expressed confidence in “our ability to support customer demand while delivering consistent performance in a dynamic environment.” The company also disclosed $500M of share repurchases year-to-date through early May (including $200M already executed in Q2), well ahead of prior pacing, which management cited as reflecting an attractive valuation — an implicit signal of confidence in the earnings trajectory.

Source: Q1 2026 Earnings Release and Earnings Call Transcript (May 12, 2026); Visible Alpha Consensus and Actuals Data.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates for Q2 2026 and FY2026 have been broadly stable-to-rising since the Q1 print, tracking management’s raised guidance; the ~$0.02 gap between consensus EPS ($4.37) and the guidance midpoint ($4.35) is negligible, suggesting the street has fully digested the Q1 raise with no meaningful divergence — a clean setup with limited estimate-revision risk in either direction.

Estimates have been remarkably stable since the Q1 2026 print, with virtually no revision in either direction across all key KPIs for both Q2 and the full year. This stability reflects a well-anchored consensus that has fully absorbed management’s raised guidance, with no incremental data points (no 8-K, no conference appearances, no pre-announcement) to shift the needle. The slight positive gap between consensus and guidance midpoints on organic growth and EPS is a modest cushion, not a divergence — the risk is symmetric around the guidance range rather than skewed to the downside.

Source: Visible Alpha Consensus and Actuals Data (as-of dates May 19, 2026 and August 3, 2026); Q1 2026 Earnings Call Transcript (May 12, 2026).

5. Stock Performance

Key Takeaway: ZBRA has rallied ~21% since the Q1 2026 earnings close, driven almost entirely by multiple re-rating (EV/EBITDA expanded from ~9.8x to ~11.7x) rather than estimate revisions, which were flat; the stock has meaningfully outperformed both XLI and the S&P 500 over the period, suggesting sentiment has improved but the multiple is no longer cheap heading into the print.

Since the Q1 2026 earnings close on May 12, 2026 ($241.79), ZBRA has appreciated to $293.82 at July 31, 2026 (+21.5%), significantly outperforming XLI (+3.1%) and the S&P 500 (+1.2%) over the same window. The performance decomposition is instructive: NTM EV/EBITDA expanded from approximately 9.8x (3-month horizon start) to 11.7x currently, accounting for the bulk of the price move, while consensus estimates were essentially flat. This is a multiple-driven rally, not an earnings-revision story — which means the stock is more vulnerable to a guidance miss or a tone shift on memory supply than it would be if the move had been estimate-driven. The stock briefly dipped to ~$216 on June 10 (likely on broader market weakness and sector rotation) before recovering sharply, with the most recent leg higher coinciding with the July 28 close ($284.40), possibly reflecting pre-earnings positioning. At ~14.8x NTM P/E and ~11.7x NTM EV/EBITDA, ZBRA is trading at a meaningful discount to its 12-month-ago multiple (21.1x P/E, 15.9x EV/EBITDA) but has recovered from the trough, leaving the valuation setup as neutral-to-slightly-stretched relative to the near-term earnings risk.

Stock Price Performance — ZBRA vs. XLI vs. S&P 500 (Indexed, Since Q1 2026 Earnings)

Note: Indexed to 100 at May 12, 2026 close ($241.79 ZBRA / $174.35 XLI / $738.18 SPY). Key event: Jun 10 trough (~$216.79 ZBRA) on broad market weakness; Jul 28 acceleration ($284.40) on pre-earnings positioning. Sector ETF: XLI (Industrial Select Sector SPDR) selected as the most relevant sub-sector proxy for ZBRA’s industrial automation and enterprise technology exposure.

Source: Stock Price Data (Yahoo Finance).

Valuation Snapshot (NTM Multiples, as of August 3, 2026)

Source: Stock Performance Decomposition Data (Implied platform, NTM consensus multiples).

6. Material News & Developments

Key Takeaway: The most important development since Q1 earnings is Honeywell’s accelerated divestiture of its Productivity Solutions & Services and Warehouse & Workflow Solutions businesses (closing early August, ~2 months ahead of schedule), which removes ZBRA’s most direct competitor from the market and is a structural positive for pricing and share; the memory supply constraint remains the primary operational watch item.

• Aug 4, 2026 — Q2 2026 Earnings Release (today). Zebra scheduled to report Q2 2026 results at 8:30 a.m. ET with a conference call to follow. Announced July 7, 2026.
• Jul 23, 2026 — Honeywell Technologies (HON) Q2 2026 Earnings: PSS & WWS Divestiture Accelerated. Honeywell confirmed the expected close of its Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) divestitures to Brady Corp. by early August 2026, approximately two months ahead of the original H2 2026 schedule. These businesses — mobile computers, barcode scanners, and printing — are ZBRA’s most direct competitive overlap. Management noted “strong backlog conversion in the warehouse business” in Q2, suggesting healthy end-market demand. Implication: Structural positive for ZBRA — removes the most direct competitor from the market, reduces pricing pressure, and may create channel disruption that benefits Zebra’s sales force in H2 2026 and 2027.
• May 12, 2026 — Q1 2026 Beat & FY2026 Guidance Raise. ZBRA reported Q1 revenue of $1,495M (+14.3% YoY) and Non-GAAP EPS of $4.75, well above consensus of $4.24. Full-year 2026 Non-GAAP EPS guidance raised to $18.30–$18.70 (from prior range), with organic growth guidance raised to +3% to +7%. Machine vision confirmed inflection with strong double-digit growth. Adjusted gross margin reached a multiyear high of 50.4%. Implication: Set a high bar for Q2 on gross margin; memory cost step-up in Q2 is the key sequential headwind to watch.
• May 12, 2026 — Accelerated Share Repurchase Activity. Company disclosed $500M of share repurchases year-to-date through early May ($300M in Q1, $200M in Q2 to date), well ahead of prior pacing. Full-year EPS guide assumes an additional $100M of buybacks. Implication: Management signaling strong conviction in valuation; buyback pace is a meaningful EPS tailwind and reflects balance sheet confidence.
• May 12, 2026 — Memory Supply Constraint Flagged as Primary Risk. Management guided for a ~2-point gross margin headwind from memory costs for the full year, with Q2 representing the “inflection point” for the sequential step-up (~1.5 pts of sequential EBITDA margin decline). Mitigation strategies include direct supplier co-planning, alternative sourcing, and price increases implemented in Q1 still flowing through in Q2. Implication: Q2 gross margin is the most important number in the print — any upside vs. the “slightly above 21%” EBITDA margin guide would be a positive surprise.
• Jun 29, 2026 — Honeywell Finalizes Aerospace Spin-Off. Honeywell completed the spin-off of its aerospace business, becoming Honeywell Technologies as a “pure play automation company.” This restructuring accelerated the timeline for the PSS/WWS divestiture to Brady Corp. Implication: Confirms the competitive landscape shift is structural, not temporary.
• Jul 7, 2026 — ZBRA Announces Q2 2026 Earnings Date. Zebra confirmed August 4, 2026 as the Q2 2026 reporting date, with a conference call at 7:30 a.m. CT / 8:30 a.m. ET. No incremental guidance or business update was provided.

7. Peer Commentaries — Current-Quarter Read-Through

Key Takeaway: Peer commentary from the last 60 days is broadly constructive for ZBRA’s Q2 setup — Honeywell’s warehouse business saw “strong backlog conversion” in Q2 and raised its H2 organic growth outlook, while SPS Commerce reported no macro headwinds from retail/supply chain customers and highlighted accelerating AI-driven automation investment; both reads support ZBRA’s demand narrative heading into the print.

Methodology: Only commentary disclosed in the last 60 days (on or after June 4, 2026) that explicitly addresses the peer’s forward current reporting quarter (Q2 2026 or Q3 2026) or the remainder of FY2026 is included below. Retrospective prior-quarter-only remarks are excluded. Direct read-through applies where the peer’s business directly overlaps with ZBRA’s end markets or product categories; indirect read-through applies where the overlap is thematic or macro-level.

7A. Honeywell Technologies (HON) — Q2 2026 Earnings (July 23, 2026)

Read-Through Type: Direct (warehouse automation, industrial sensing) and Indirect (broader industrial demand, pricing/inflation).

Comparability Caveat: Honeywell’s Productivity Solutions & Services (PSS) and Warehouse & Workflow Solutions (WWS) businesses — the most direct ZBRA comparables (mobile computers, barcode scanners, printing, warehouse automation) — are being divested to Brady Corp. and expected to close by early August 2026. Honeywell’s updated FY2026 guidance incorporates the removal of these businesses (~$400M revenue reduction), so forward commentary from Honeywell Technologies reflects a portfolio without these segments. Any direct read-through from Honeywell’s forward guidance to ZBRA’s core business should be treated with caution; the Q2 retrospective commentary on the warehouse business is the most directly relevant data point.

Forward-Looking Commentary (Q2 2026 Earnings Call, July 23, 2026)

• Warehouse demand in Q2 (direct): Honeywell’s Industrial Automation segment reported “strong backlog conversion in the warehouse business” in Q2 2026. While this is a retrospective Q2 comment, it confirms healthy end-market demand in the warehouse vertical heading into the period when ZBRA is reporting. Read-through: Positive for ZBRA’s warehouse/logistics revenue line in Q2.
• Industrial Automation orders (direct/indirect): For the remaining Industrial Automation business (post-divestiture), orders grew 11% YoY in Q2, with sensing and industrial measurement orders up over 20%. Management guided for “continued momentum in industrial automation in the second half of 2026,” driven by “resilient short cycle demand for industrial measurement and sensing, continued growth in Europe and China, and strengthening Americas demand.” Read-through: Indirect positive for ZBRA’s machine vision and sensing portfolio; geographic demand breadth (Europe, China, Americas) aligns with ZBRA’s multi-regional growth narrative.
• Organic growth guidance raised (indirect): Honeywell raised its full-year organic sales growth outlook to 3–4% (from 2–3%), with H2 expected to grow 4–6% (from 3–5%). Book-to-bill was 1.1x and ending backlog was up 9%. CEO Vimal Kapoor noted “every business printed double-digit short-cycle orders in Q2, which gives us a lot of confidence in Q3 and Q4.” Read-through: Indirect positive — broad-based industrial demand acceleration in H2 supports ZBRA’s own H2 growth assumptions.
• Pricing and memory/inflation (direct): CFO Mike Stepniak noted that H2 pricing is expected to be “around 4%” to cover “stubborn” inflation in “electronics memory, copper, and labor.” This is a direct confirmation that memory cost inflation is a sector-wide phenomenon, not ZBRA-specific. Read-through: Validates ZBRA’s memory cost narrative; also suggests the pricing environment supports ZBRA’s own price increase actions.
• Software/ARR monetization (indirect): Honeywell guided for ~15% ARR growth in 2026 from AI-based software offerings on its Forge platform, growing from ~$900M to just over $1B. Management articulated a strategy of “growing and monetizing the installed base through outcome-based services, software, and new product innovation.” Read-through: Indirect positive — confirms the broader industrial automation sector is successfully monetizing software/AI on top of hardware, validating ZBRA’s own Companion/AI agent strategy.

7B. SPS Commerce (SPSC) — Q2 2026 Earnings (July 30, 2026)

Read-Through Type: Indirect (retail supply chain demand, warehouse/logistics technology investment, AI-driven automation trends).

Comparability Caveat: SPS Commerce is a supply chain network software company — it does not sell hardware and does not directly compete with ZBRA. The read-through is thematic: SPS Commerce’s customer base (major retailers, manufacturers, distributors, logistics providers) overlaps significantly with ZBRA’s end markets, making SPS’s commentary on retail/supply chain demand and technology investment a useful leading indicator for ZBRA’s enterprise demand environment.

Forward-Looking Commentary (Q2 2026 Earnings Call, July 30, 2026)

• No macro headwinds from retail/supply chain customers (indirect): CEO Chad Collins stated “no substantial headwinds” from customers regarding the macro environment. The “tougher 2025” conditions on the supplier side (tariff-related contract right-sizing) are “dissipating as expected.” Tariff uncertainty and fuel prices are “not coming up in our engagement with customers right now.” Read-through: Indirect positive for ZBRA — retail and supply chain customers are not pulling back on technology investment, supporting ZBRA’s demand narrative across retail, T&L, and manufacturing verticals.
• Improving momentum into H2 2026 (indirect): CFO Joe Guck highlighted “improvements across our customer base” and stated the company is “in a much better position going into Q4 and the momentum we’re seeing there than we were a year ago.” The pipeline for retail enablement programs is “strong,” with programs expected to contribute in H2. Read-through: Indirect positive — improving retail customer activity in H2 supports ZBRA’s own H2 growth assumptions, particularly in the retail vertical.
• AI-driven automation investment accelerating (indirect): SPS Commerce launched “MAX,” an agentic AI capability embedded in its supply chain network, which has already delivered “hundreds of thousands of dollars in savings to individual customers in just three months.” The company is expanding MAX to all Fulfillment customers in Q3 2026 and expects to begin selling AI agents by late Q4 2026. Management cited “no other company can match the unique combination of AI capabilities, 25 years of proprietary data, deep domain expertise, and expansive network access.” Read-through: Indirect positive for ZBRA’s AI monetization thesis — confirms that supply chain customers are actively adopting and paying for AI-driven automation tools, validating ZBRA’s Companion agent strategy and the hardware upgrade cycle it drives.
• FY2026 guidance maintained at 5–6% revenue growth (indirect): SPS Commerce guided FY2026 revenue of $788–$793M (+5–6% YoY), with core business growing high single digits and Adjusted EBITDA margin expanding ~300 bps to 34%. Q3 2026 revenue guided to $196–$198M. Read-through: Neutral — SPS’s own growth is modest and supply chain software is a different demand driver than ZBRA’s hardware/software, but the maintained guidance signals no deterioration in the retail/supply chain technology spending environment.
• ERP market softness at medium-to-large end (indirect, mild negative): Management noted the ERP market has been “a little bit slower in 2025 and so far this year, especially at the medium-to-large end.” This could signal some caution in large enterprise technology spending cycles. Read-through: Mild indirect caution for ZBRA’s large enterprise project business, though ZBRA’s own commentary has not flagged this as a concern.

9. Key Risks & Questions for the Call

Key Risks

• Memory supply shortfall in Q2 or H2. Management guided Q2 EBITDA margin at “slightly above 21%”, implying ~1.5 pts of sequential compression from memory cost step-up. If memory supply came in below the assumed first-half run-rate, or if component pricing tracked above prior guidance, gross margin could disappoint. This is the single largest quantitative risk to the print.
• Gross margin miss on deal mix. Q1’s record 50.4% adjusted gross margin was driven by favorable deal mix (strength in asset visibility and manufacturing, which did not carry the memory price increase). If Q2 mix shifted toward more memory-intensive products, the gross margin headwind could be larger than guided.
• Tariff regime change in H2. Management guided for no material tariff impact on FY2026, assuming IEEPA rates are replaced by Section 301 or similar in H2. If Section 232 semiconductor tariffs are implemented with broader scope than expected, the mitigation math could change. Management has explicitly flagged insufficient detail to quantify this risk.
• EMEA demand softness. EMEA has been the most volatile region for ZBRA, cycling from weakness through 2025 to recovery in Q4 2025 and Q1 2026. Any re-softening in EMEA could weigh on the organic growth number.
• T&L refresh cycle timing risk. Management has guided for large T&L refresh cycles to begin contributing meaningfully in 2027, with RFP and piloting activity accelerating. Any delay in customer decision-making or budget approval could push this tailwind further out.
• Multiple compression on guidance miss. The stock has re-rated from ~9.8x to ~11.7x NTM EV/EBITDA since Q1 earnings, driven by sentiment rather than estimate revisions. A guidance miss or tone shift on memory supply could reverse this multiple expansion quickly, given the stock’s 12-month history of sharp de-rating (from 15.9x to 9.8x).
• Elo Touch integration execution. Elo is expected to grow mid-single digits in 2026 and is beginning to drive synergies. Any integration friction or revenue shortfall from Elo could weigh on the Connected Frontline segment.

Key Questions for the Call

1. Memory supply in Q2 and H2: Did memory supply in Q2 track the assumed first-half run-rate? Has the H2 allocation assumption changed? Is there any indication of supply improvement that could allow the company to reach the top end of the FY2026 guidance range?
2. Gross margin trajectory: How did Q2 adjusted gross margin compare to the Q1 multiyear high of 50.4%? Was the ~1.5 pt sequential EBITDA margin compression from memory costs in line with guidance, or did deal mix provide any offset?
3. Full-year guidance revision: Is management raising, maintaining, or narrowing the FY2026 EPS range of $18.30–$18.70? What are the key assumptions for H2 organic growth, memory cost, and buyback activity?
4. Honeywell PSS/WWS divestiture impact: Has the accelerated close of Honeywell’s PSS and WWS businesses to Brady Corp. created any incremental pipeline or channel opportunity for ZBRA? Are there any early signs of customer or partner transitions?
5. T&L refresh cycle update: Has the RFP and piloting activity in T&L continued to accelerate? Is the 2027 step-change in T&L-driven growth still on track, and are there any early orders or commitments that de-risk the timeline?
6. AI monetization progress: How many customers are now live on Zebra Companion? Is the company on track for first AI revenues in 2026? What is the attach rate of AI software to premium hardware refreshes?
7. Tariff and Section 232 update: Has there been any regulatory clarity on Section 232 semiconductor tariffs since the Q1 call? Has the company’s tariff mitigation assumption for H2 changed?
8. Capital allocation: Has the company continued buybacks at the Q1/early Q2 pace? Is the $100M additional buyback assumption in the FY2026 EPS guide still the right number, or has the pace accelerated further?