Press release·03/02/2025 18:51:27

Zebra Technologies Reports Strong Financial Performance in 2024

Zebra Technologies, a leading provider of enterprise asset intelligence solutions, has reported impressive financial results for the year ended December 31, 2024. The company’s strong performance was driven by growth in its Enterprise Visibility & Mobility (EVM) segment, which offset a slight decline in the Asset Intelligence & Tracking (AIT) segment.

Consolidated Financial Results

In 2024, Zebra’s total net sales increased by 8.7% to $4,981 million, compared to $4,584 million in the prior year. This growth was primarily due to a 13.7% increase in EVM segment sales, which offset a 0.2% decline in AIT segment sales. Excluding the effects of foreign currency changes and acquisitions, the company’s consolidated organic net sales increased by 8.1%.

Gross margin improved to 48.4% in 2024, up from 46.3% in the previous year. This increase was mainly due to volume leverage, higher service and software margins, lower freight rates, and lower inventory-related charges.

Operating expenses increased to $1,671 million, or 33.5% of net sales, compared to $1,642 million, or 35.8% of net sales, in the prior year. The increase was primarily driven by higher incentive compensation, partially offset by lower exit and restructuring costs and incremental savings from the company’s restructuring actions.

Operating income for the year was $742 million, a 54.3% increase from the $481 million reported in 2023. This improvement was due to the higher gross profit, partially offset by the increase in operating expenses.

Net income increased by 78.4% to $618 million, compared to $346 million in the prior year. This was primarily due to the higher operating income, as well as lower interest expense and a higher effective tax rate.

Diluted earnings per share increased to $10.18, up from $5.72 in the previous year, reflecting the growth in net income.

Segment Performance

The company’s two reportable segments, AIT and EVM, showed divergent performance in 2024.

Asset Intelligence & Tracking (AIT) Segment The AIT segment’s net sales decreased slightly by 0.2% to $1,647 million, primarily due to lower sales of printing products and supplies, partially offset by higher sales of RFID products and favorable foreign currency changes. Excluding the impact of foreign currency, AIT’s organic net sales declined by 0.9%.

Gross margin in the AIT segment increased to 48.1%, up from 47.7% in the prior year, mainly due to favorable foreign currency changes, partially offset by higher inventory-related charges. Operating income for the AIT segment decreased by 3.2% to $335 million, due to the higher operating expenses, which were partially offset by the higher gross profit.

Enterprise Visibility & Mobility (EVM) Segment The EVM segment’s net sales increased by 13.7% to $3,334 million, driven by higher sales of mobile computing products and services and software, partially offset by lower sales of data capture products. Excluding the impacts of foreign currency changes and acquisitions, EVM’s organic net sales grew by 13.2%.

Gross margin in the EVM segment improved to 48.6%, up from 45.6% in the previous year, primarily due to volume leverage, favorable business mix, higher service and software margins, lower inventory-related charges, and lower freight rates. Operating income for the EVM segment increased by 55.7% to $534 million, reflecting the higher gross profit, partially offset by the increase in operating expenses.

Liquidity and Capital Resources

Zebra’s cash and cash equivalents balance increased by $763 million to $901 million as of December 31, 2024, primarily due to $1,013 million in cash provided by operating activities. This was partially offset by $190 million in cash used in financing activities, mainly for net debt repayments.

The company’s total debt decreased from $2,226 million as of December 31, 2023, to $2,183 million as of December 31, 2024. This reduction was primarily due to net repayments of the company’s Term Loan A and Revolving Credit Facility, partially offset by the issuance of $500 million in Senior Notes.

Zebra’s management believes that the company’s existing capital resources, including available borrowing capacity and funds generated from operations, are sufficient to meet anticipated capital requirements and service its indebtedness.

Outlook and Future Considerations

Zebra’s strong financial performance in 2024 demonstrates the company’s ability to navigate market challenges and capitalize on growth opportunities. The company’s focus on innovation, operational efficiency, and strategic investments in its EVM segment have been key drivers of its success.

Looking ahead, Zebra will need to continue to monitor and adapt to evolving market conditions, including potential changes in customer demand, supply chain disruptions, and macroeconomic factors. The company’s ability to maintain its competitive edge, expand its product and service offerings, and effectively manage its costs will be crucial in determining its future performance.

Additionally, Zebra’s management will need to carefully manage the company’s liquidity and capital structure to ensure financial flexibility and support its growth initiatives. This may include decisions around debt refinancing, share repurchases, and strategic acquisitions or investments.

Overall, Zebra’s 2024 financial results highlight the company’s resilience and its potential for continued success in the enterprise asset intelligence market. By leveraging its technological expertise, strong customer relationships, and operational discipline, Zebra is well-positioned to navigate the challenges and capitalize on the opportunities that lie ahead.

Key Takeaways:

• Zebra Technologies reported strong financial performance in 2024, with an 8.7% increase in total net sales and a 54.3% increase in operating income.
• The company’s EVM segment was the primary driver of growth, with a 13.7% increase in net sales, while the AIT segment experienced a slight decline.
• Gross margin improved to 48.4%, reflecting operational efficiencies and favorable business mix.
• Zebra’s cash position strengthened, with $901 million in cash and cash equivalents as of December 31, 2024, and the company reduced its total debt.
• Looking ahead, Zebra will need to continue to adapt to market conditions, manage its costs, and maintain its financial flexibility to support future growth and success.