Zebra Technologies Raises 2026 Guidance Amid AI-Driven Growth and Cost Management

Zebra Technologies (ZBRA) raised its full-year 2026 guidance for earnings per share (EPS) and EBITDA by half a point, following a robust second-quarter performance. The company also increased its price realization target from $60 million to $90 million, offsetting $120 million in memory cost pressures with $90 million in pricing adjustments. Over the past three quarters, Zebra repurchased approximately $900 million of shares, generating $1 billion in cash flow over the last 12 to 18 months while maintaining debt leverage below 2x. The company’s annual top-line growth is projected between 5% and 7%, with EBITDA margins targeting the mid-20s over time. Recent 12-month EBITDA stood at $1.18 billion, with a gross profit margin of 49.58% and a return on equity of 15%. In 2027, R&D spending is expected to reach around 9% of sales, reflecting a strategic push toward AI integration across its product lines. Zebra exited its robotics business in 2025 to redirect capital toward higher-margin segments like machine vision and self-service solutions, including acquisitions such as Elo, Photoneo, and Matrox. The company’s memory chip strategy now relies on direct vendor relationships, reducing reliance on spot-market purchases and aiming to expand product options to five or more per line by early 2027. A price increase effective March 2026—announced earlier in the year—has bolstered revenue growth, particularly in retail and e-commerce, where double-digit Q2 gains persist. Warehouse automation remains a key growth driver, with 75% of facilities still underutilized, though labor costs have risen at 2% to 3% annually. AI is central to Zebra’s expansion, enabling device-level APIs for third-party applications, packaged features like optical character recognition for last-mile delivery, and internal tools for R&D, customer support, and marketing. The company’s focus on AI-driven productivity is underpinned by a 10% to 15% share of revenue from mobile computers in warehouse environments, with broader automation capacity expected to grow at high single-digit rates over the next few years.