Zebra Beats Big on Memory Maneuvering, Raises Outlook

Zebra Technologies delivered a blockbuster second quarter that underscored its ability to turn a supply-chain crisis into a competitive weapon. Sales grew 20% (9% organic), adjusted EBITDA margin expanded 7.1 points to 27.7%, and non-GAAP EPS jumped 76% to $6.35. Crucially, management raised full-year guidance for the second consecutive quarter, lifting organic growth expectations to 7 points at the midpoint and EPS to a $20.75–$21.25 range. The stock has responded in kind, rallying 66% over the past 90 days. As CEO Bill Burns put it, “Our team executed well, driving record results with broad-based growth and significantly increased profitability.” — William Burns, Chief Executive Officer · 2026-08-04

Memory: From Headwind to Tailwind

The story hinges on memory. As CFO Nathan Winters noted, “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.” — Nathan Winters, Chief Financial Officer · 2026-08-04 He added, “We fully mitigated a $20 million increase in memory costs through strong price realization.” — Nathan Winters, Chief Financial Officer · 2026-08-04 The company is pursuing multiple fronts—direct supplier co-planning, qualifying new suppliers, and shifting to higher-density memory types. They now expect $90 million of price mitigation against a $120 million gross headwind, up from a prior $60 million estimate.

This is not a one-off miracle. The prior quarter, management had already signaled confidence. “We're confident in our ability to mitigate the memory challenges and to achieve both our second quarter and full year guide.” — William Burns, Chief Executive Officer · 2026-05-12 That guide now points to a 14–16% top-line increase for the year, with acquisitions and FX adding 8 points. The behind-the-scenes work is visible in the numbers: “We recently announced price increases globally over the past week. They will be effective in March.” — Nathan Andrew Winters, Chief Financial Officer · 2026-02-12 That pricing discipline is now flowing through.

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.

AI and the Frontline

Beyond memory, the company is leaning into AI as a structural growth driver. CEO Bill Burns described Zebra as the "supplier of choice for AI for the frontline" with new AI-optimized mobile computers and wearables also embedding RFID. The Elo acquisition is adding self-service and point-of-sale capabilities, expanding the addressable market. The company now frames its opportunity as a 5–7% organic growth profile, buoyed by RFID, machine vision, and AI-enabled devices.

The underlying demand story is broad-based, retail, manufacturing, and healthcare all growing double digits, with healthcare the fastest. Sales teams are executing well, and the robust multiyear pipeline of large deployments in transportation & logistics gives confidence into 2027.

The Tape Confirms the Story

ZBRA's recent Total Revenue is running at a record clip, and the 90-day price tape shows a clean uptrend, up 66% with minimal drawdown. While the tariff refund (IEEPA refund) provided a one-time tailwind in the quarter, the operating leverage and pricing power are durable. With leverage at 1.9x and free cash flow expected to exceed $1 billion, the company has ample room to continue its aggressive buyback.

In a market that has been jittery about memory inflation, Zebra has turned the narrative on its head—by locking in supply and pricing power before peers could react. That's the kind of execution that warrants a premium multiple.