Zebra Technologies Reports 11.3% Revenue Growth to $1.308 Billion in Q1 2025

Zebra Technologies Corporation reported a notable increase in its financial performance for the first quarter of 2025, with net sales reaching $1.308 billion, up 11.3% from $1.175 billion in the same period last year. The growth was driven primarily by a 14.3% increase in tangible product sales, which amounted to $1.062 billion, while service and software sales remained stable at $246 million. The company's gross profit also saw an increase, rising to $645.6 million, resulting in a gross margin of 49.3%, compared to 47.9% in the prior year. Operating income improved to $195.2 million, a 22.6% increase from $159 million in the previous year, contributing to a net income of $136 million, or $2.62 per diluted share, compared to $115 million, or $2.23 per diluted share, in the prior year.

In terms of operational developments, Zebra Technologies experienced growth across its two reportable segments: Asset Intelligence & Tracking (AIT) and Enterprise Visibility & Mobility (EVM). The AIT segment reported net sales of $462 million, a 17.9% increase from $392 million, while the EVM segment saw a more modest growth of 8.0%, with sales reaching $846 million compared to $783 million. The company also expanded its geographic reach, with North America contributing $656 million, EMEA $443 million, Asia-Pacific $125 million, and Latin America $84 million in net sales. The overall customer base and engagement metrics reflected a positive trend, indicating a strong demand for Zebra's offerings.

Strategically, Zebra Technologies made a significant acquisition during the quarter, purchasing Photoneo, a developer of 3D machine vision technology, for $62 million. This acquisition is expected to enhance Zebra's capabilities in the machine vision sector and is included in the EVM segment's results. The company also repurchased $125 million worth of its common stock during the quarter, part of an ongoing share repurchase program authorized by its Board of Directors.

The financial outlook for Zebra Technologies remains cautiously optimistic, despite potential challenges posed by evolving trade policies and tariffs. The company anticipates that it can mitigate these impacts through diversifying its product sourcing and optimizing its product portfolio. Management expects continued demand growth in both segments, supported by ongoing investments in innovation and operational efficiency. The effective tax rate for the quarter was reported at 17.6%, down from 19.0% in the previous year, contributing to the improved net income figures.

Overall, Zebra Technologies' first-quarter results reflect a solid performance driven by increased sales, strategic acquisitions, and effective cost management, positioning the company for continued growth in the competitive automatic identification and data capture market.