NASDAQ$ZBRA

Zebra Technologies Corp. · Q3 2020 earnings

Q3 2020 earnings · · Investor relations

Briefing

Announced third-quarter results with sales, EBITDA margin, and EPS exceeding outlook.

Zebra Technologies reported a slight increase in net sales, but experienced decreases in net income, EPS, and adjusted EBITDA. The company saw strong demand from large strategic customers and recovery through the channel.

  • Third-quarter net sales increased 0.2% year-over-year to $1,132 million.
  • Net income decreased 14.7% year-over-year to $116 million.
  • Non-GAAP diluted EPS decreased 4.7% year-over-year to $3.27.
  • Adjusted EBITDA decreased 10.5% year-over-year to $230 million.

Headline financials

Total Revenue

$1.13B

Previous: $1.13B+0.2%
EPS (adj)

$3.27

Previous: $3.43-4.7%
Gross Margin

43.6%

Previous: 47.3%-7.8%
Adjusted EBITDA

$230M

Previous: $257M-10.5%
Adjusted EBITDA Margin

20.3%

Previous: 22.7%-10.6%
Net Income Margin

10.2%

Previous: 12.0%-15.0%
Capital Expenditures

-$49M

Previous: -$44M-11.4%
Free Cash Flow

$67M

Previous: $92M-27.2%
Net Income

$116M

Previous: $136M-14.7%
Operating Income

$150M

Previous: $185M-18.9%
Gross Profit

$493M

Previous: $535M-7.9%
Cash & Equivalents

$39M

Previous: $33M+18.2%
Total Assets

$5.25B

Previous: $4.71B+11.4%
Stock-Based Comp

$13M

Previous: $12M+8.3%

Revenue & EPS history

Zebra · Revenue · Quarterly

$1.13B

Q3 2020+0.2%vs Q3 2019
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Revenue by segment

Zebra · $1.13B total across 2 segments · Q3 2020

  • Connected Frontline (CF)
    $788M+4.1%
  • Asset Visibility & Automation
    $346M-7.2%

Forward guidance

The company expects adjusted net sales to increase 3% to 7% and adjusted EBITDA margin to be in the range of 21% to 22% for Q4 2020.

Tailwinds

  • Adjusted net sales are expected to increase 3% to 7% from Q4 2019.
  • Includes an approximately 150 basis point additive impact from the Reflexis acquisition.
  • Adjusted EBITDA margin is expected to be in the range of 21% to 22%.
  • Non-GAAP earnings per diluted share are expected to be in the range of $3.70 to $3.90.
  • Free cash flow is expected to be at least $650 million for the full year 2020, which is higher than full-year 2019.

Headwinds

  • Customers continue to navigate through a challenging macro environment.
  • Expects adjusted net sales and adjusted EBITDA margin to be lower than last year.
  • Includes approximately $9 million of premium freight expense.
  • Assumes an adjusted effective tax rate of approximately 16%.
  • One-time pre-tax charges of up to $20 million plus up to $10 million of capital expenditures related to sourcing diversification.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q3 2020

Historical avgQ3 2020

+0.3%

Avg return

Earnings day

+2.2%

Avg return

5 days after

+2.4%

Avg return

30 days after

53%

36 / 68 earnings

Positive

+17.9%

Q4 2017

Best reaction

-21.7%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.6%+19.7%+0.5%
Q4 2025+8.6%+3.3%-19.7%
Q3 2025-11.7%-13.3%-19.3%
Q1 2025+5.2%+5.1%+20.1%
Q4 2024-8.4%-6.2%-21.0%
Q3 2024+5.6%+5.8%+11.6%
Q2 2024+4.8%-3.8%+2.1%
Q1 2024+3.0%+3.2%+5.5%
Q4 2023+8.9%+7.5%+13.0%
Q3 2023-5.6%+2.2%+13.0%
Q2 2023-21.7%-18.4%-10.7%
Q1 2023-10.1%-4.7%-7.4%
Q4 2022-1.4%-6.1%-11.7%
Q3 2022-16.7%-18.6%-5.1%
Q2 2022-8.9%-7.5%-13.6%
Q1 2022-3.1%-9.7%-8.6%
Q4 2021-12.7%-14.0%-23.7%
Q3 2021+6.6%+12.0%+10.0%
Q2 2021+1.6%+2.1%+6.8%
Q1 2021+0.7%+2.0%+5.6%
Q4 2020+11.8%+13.7%+10.6%
Q3 2020+12.3%+18.2%+27.1%
Q2 2020+0.2%+2.7%+1.4%
Q1 2020+10.9%+2.1%+16.5%
Q4 2019-5.2%-6.1%-27.0%
Q3 2019+7.2%+6.8%+14.5%
Q2 2019+11.3%+5.0%+10.1%
Q1 2019-9.6%-9.0%-25.2%
Q4 2018+8.6%+8.3%+14.9%
Q3 2018+7.3%+8.0%+2.7%
Q2 2018+10.7%+13.4%+17.5%
Q1 2018+8.8%+13.2%+15.0%
Q4 2017+17.9%+16.6%+13.3%
Q3 2017-7.9%-9.8%-7.0%
Q2 2017+6.8%+6.4%+3.6%
Q1 2017+2.3%+3.1%+11.7%
Q4 2016+8.4%+5.8%+1.2%
Q3 2016+9.2%+12.3%+27.5%
Q2 2016+11.8%+15.1%+17.6%
Q1 2016-17.8%
Q4 2015-15.0%
Q3 2015-9.3%
Q2 2015-20.4%
Q1 2015+15.5%
Q4 2014-3.5%
Q3 2014-1.1%
Q2 2014-8.1%
Q1 2014+3.5%
Q4 2013+15.3%
Q3 2013+6.3%
Q2 2013-1.3%
Q1 2013+0.3%
Q4 2012+3.5%
Q3 2012+3.5%
Q2 2012-2.0%
Q1 2012+0.7%
Q4 2011+1.9%
Q3 2011-1.5%
Q2 2011-11.6%
Q1 2010-1.0%
Q4 2010-1.0%
Q1 2011+0.1%
Q4 2008-0.3%
Q3 2010-1.1%
Q3 2009-1.1%
Q2 2009-0.0%
Q2 2010-0.0%
Q4 2009-0.0%

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