Zebra Technologies Corp (ZBRA) · Nov 3, 2026 · Earnings

Zebra earnings beat as memory costs squeeze gross margin

Beat — Non-GAAP EPS $4.95 vs ~$4.89 consensus; sales $1.614B vs ~$1.57B

Zebra Technologies’ Q3 earnings beat revenue and EPS expectations, while memory costs pressured gross margin and Q4 EPS guidance landed near consensus.

Zebra is expanding its connected-frontline and asset-automation platform as customers digitize operations and adopt frontline AI; its prior-quarter outlook already called for strong growth, productivity gains, and improved memory supply. This filing confirms the demand story is working, but also shows that component inflation is taking more of the benefit than the headline growth suggests.

The quarter cleared expectations, but only modestly. Non-GAAP EPS of $4.95 exceeded the published consensus of about $4.89, while revenue of $1.614 billion topped roughly $1.57 billion. The underlying growth was broad: organic sales rose 11.3%, with Connected Frontline up 15.0% organically and Asset Visibility & Automation up 7.0%. 〔0〕

Metric3Q263Q25Consensus / guide
Revenue (Financial Highlights)$1,614M (+22.3%)$1,320M~$1,570M
Non-GAAP diluted EPS (Financial Highlights)$4.95 (+27.6%)$3.88~$4.89
Organic sales growth (Financial Highlights)11.3%——
Adjusted gross margin (Financial Highlights)46.0% (-220 bps)48.2%—
Adjusted EBITDA margin (Financial Highlights)21.6%21.6%—
Q4 non-GAAP diluted EPS (Outlook)$5.00–$5.40—~$5.21

The quality of the beat is mixed because gross-margin pressure returned. Adjusted gross margin fell 220 basis points year over year to 46.0%, with the company specifically citing higher memory-component costs and mix. 〔1〕 Pricing actions and operating leverage held adjusted EBITDA margin flat at 21.6%, preventing the cost pressure from flowing fully through to earnings, but there was no margin expansion in the quarter.

The forward signal is steady rather than another major upgrade. Fourth-quarter adjusted EBITDA margin is expected to be approximately 22%, and non-GAAP EPS guidance of $5.00–$5.40 centers near the published consensus of about $5.21. Management says the full-year outlook was increased, but the filing does not provide the revised full-year sales or EPS range, so the magnitude of that upgrade cannot be assessed from this release alone. 〔2〕

Cash generation continues to support aggressive capital returns. Nine-month operating cash flow reached $711 million and free cash flow was $661 million, while repurchases totaled $643 million. That strengthens per-share results and shareholder returns, but it is a supporting feature of the story—not the main reason this quarter beat expectations.

Bottom line: Zebra’s growth engine is delivering ahead of expectations, but memory inflation is absorbing the margin upside and the Q4 outlook is essentially in line. This is a modestly constructive quarter, not a change in the company’s trajectory.

What to watch next

Q4 earnings report, early February 2027

Original filing on SEC EDGAR

Zebra earnings beat as memory costs squeeze gross margin | ZBRA Stock News
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