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Zebra
🇺🇸 NASDAQ:ZBRA
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•
Mar 28, 2020

Zebra Q1 2020 Earnings Report

Zebra Technologies' performance declined due to COVID-19 related supply chain disruptions and reduced demand in China.

Key Takeaways

Zebra Technologies reported a decrease in net sales and profitability for Q1 2020 due to COVID-19 impacts. Net sales decreased by 1.3% year-over-year to $1,052 million, and net income decreased by 22.6% to $89 million. The company experienced supply chain disruptions and weaker demand in China, but took steps to manufacture and supply mission-critical products.

Net sales decreased by 1.3% year-over-year to $1,052 million.

Net income decreased by 22.6% year-over-year to $89 million.

Non-GAAP diluted EPS decreased by 8.6% year-over-year to $2.67.

Adjusted EBITDA decreased by 10.7% year-over-year to $201 million.

Total Revenue
$1.05B
Previous year: $1.07B
-1.3%
EPS
$2.67
Previous year: $2.92
-8.6%
Gross Margin
45%
Adjusted EBITDA
$201M
Adjusted EBITDA Margin
19.1%
Gross Profit
$473M
Previous year: $501M
-5.6%
Cash and Equivalents
$24M
Previous year: $61M
-60.7%
Free Cash Flow
$95M
Previous year: $27M
+251.9%
Total Assets
$4.54B
Previous year: $4.58B
-0.8%

Zebra

Zebra

Zebra Revenue by Segment

Forward Guidance

The company expects second-quarter 2020 net sales to decrease approximately 11% to 17% from the second quarter of 2019 due to an anticipated recessionary global environment from COVID-19. Adjusted EBITDA margin for the second quarter of 2020 is expected to be approximately 18% to 19%. Non-GAAP earnings per diluted share are expected to be in the range of $2.10 to $2.50.

Challenges Ahead

  • Second-quarter 2020 net sales are expected to decrease approximately 11% to 17% from the second quarter of 2019 due to an anticipated recessionary global environment from COVID-19.
  • This expectation includes an approximately 50 basis point additive impact from recently acquired businesses, and an approximately 1 percentage point negative impact from foreign currency translation.
  • Adjusted EBITDA margin for the second quarter of 2020 is expected to be approximately 18% to 19%, which includes approximately $5 million net incremental cost of sales attributable to tariffs, and approximately $9 million of expenses (primarily expedited freight) to mitigate COVID-19 disruption.
  • Given the extremely low visibility of COVID-19 impacts beyond the second quarter, the company is withdrawing its prior full-year 2020 financial outlook.
  • The company expects net sales, adjusted EBITDA margin, and free cash flow to be lower than last year, which we are addressing through cost actions to enhance profitability and cash flow.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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