NASDAQ$ZBRA

Zebra Technologies Corp. · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Announced third-quarter 2022 results, impacted by supply chain challenges and deferred customer projects.

Zebra Technologies reported net sales of $1,378 million, a 4.0% year-over-year decrease. Net income was $170 million, with a non-GAAP diluted EPS of $4.12, a 9.5% year-over-year decrease. The company is taking a cautious approach to Q4 sales outlook and expense management due to softening demand and elongated sales cycles.

  • Net sales decreased by 4.0% year-over-year to $1,378 million.
  • Net income decreased to $170 million, with diluted earnings per share of $3.26.
  • Non-GAAP diluted EPS decreased by 9.5% year-over-year to $4.12.
  • Adjusted EBITDA decreased by 6.7% year-over-year to $291 million.

Headline financials

Total Revenue

$1.38B

Previous: $1.44B-4.0%
EPS (adj)

$4.12

Previous: $4.55-9.5%
Gross Margin

45.6%

Previous: 45.0%+1.3%
Adjusted EBITDA

$291M

Previous: $312M-6.7%
Adjusted EBITDA Margin

21.1%

Previous: 21.7%-2.8%
Net Income Margin

12.3%

Previous: 13.9%-11.5%
Capital Expenditures

-$51M

Previous: -$38M-34.2%
Free Cash Flow

$119M

Previous: $161M-26.1%
Net Income

$170M

Previous: $199M-14.6%
Operating Income

$202M

Previous: $237M-14.8%
Gross Profit

$628M

Previous: $646M-2.8%
Cash & Equivalents

$81M

Previous: $307M-73.6%
Total Assets

$7.45B

Previous: $5.87B+27.0%
Stock-Based Comp

$28M

Previous: $20M+40.0%

Revenue & EPS history

Zebra · Revenue · Quarterly

$1.38B

Q3 2022-4%vs Q3 2021
Beat estimate in 9 of 13 quarters(69%)
ActualEstimate

Revenue by segment

Zebra · $1.38B total across 2 segments · Q3 2022

  • Connected Frontline (CF)
    $963M-8.3%
  • Asset Visibility & Automation
    $415M+7.5%

Forward guidance

The company expects fourth quarter 2022 adjusted net sales to change (2)% to 1% from the prior year period. Adjusted EBITDA margin for the fourth quarter of 2022 is expected to be approximately 22-23%. Non-GAAP earnings per diluted share are expected to be in the range of $4.50 to $4.80.

Tailwinds

  • Expects fourth quarter 2022 adjusted net sales to change (2)% to 1% from the prior year period.
  • Includes an approximately 2 point additive impact from recently acquired businesses.
  • Adjusted EBITDA margin for the fourth quarter of 2022 is expected to be approximately 22-23%.
  • Non-GAAP earnings per diluted share are expected to be in the range of $4.50 to $4.80.
  • Assumes an adjusted effective tax rate of approximately 17-18%.

Headwinds

  • Expects an approximately 4 point negative impact from foreign currency translation.
  • Free cash flow is now expected to be at least $400 million, reflecting lower profitability and elevated inventory.
  • Includes the anticipated $135 million of previously announced settlement payments.
  • Unable to provide a reconciliation for non-GAAP estimates on a forward-looking basis.
  • Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

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 2022

Historical avgQ3 2022

+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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