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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2025
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

| For the transition period from to

Commission File Number: 000-19406
Zebra Technologies Corporation
(Exact name of registrant as specified in its charter)

Delaware | 36-2675536
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)

3 Overlook Point, Lincolnshire, IL 60069
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (847) 634-6700
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of exchange on which registered
Class A Common Stock, par value $.01 per share |  | ZBRA |  | The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | ☒ | Accelerated filer | ☐
| Non-accelerated filer | ☐ | Smaller reporting company | ☐
|  |  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 22, 2025, there were 50,854,327 shares of Class A Common Stock, $.01 par value, outstanding.

Table of Contents
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
QUARTER ENDED MARCH 29, 2025
TABLE OF CONTENTS

|  | PAGE
PART I - FINANCIAL INFORMATION | 3
Item 1. | Consolidated Financial Statements | 3
| Consolidated Balance Sheets as of March 29, 2025 (unaudited) and December 31, 2024 | 3
| Consolidated Statements of Operations (unaudited) for the three months ended March 29, 2025 and March 30, 2024 | 4
| Consolidated Statements of Comprehensive Income (unaudited) for the three months ended March 29, 2025 and March 30, 2024 | 5
| Consolidated Statements of Stockholders’ Equity (unaudited) for the three months ended March 29, 2025 and March 30, 2024 | 6
| Consolidated Statements of Cash Flows (unaudited) for the three months ended March 29, 2025 and March 30, 2024 | 7
| Notes to Consolidated Financial Statements (unaudited) | 7
| Note 1: Description of Business and Basis of Presentation | 8
| Note 2: Significant Accounting Policies | 8
| Note 3: Revenues | 8
| Note 4: Inventories | 9
| Note 5: Business Acquisitions | 9
| Note 6: Investments | 10
| Note 7: Fair Value Measurements | 10
| Note 8: Derivative Instruments | 11
| Note 9: Long-Term Debt | 13
| Note 10: Leases | 14
| Note 11: Accrued Liabilities, Commitments and Contingencies | 15
| Note 12: Share-Based Compensation | 15
| Note 13: Income Taxes | 17
| Note 14: Earnings Per Share | 17
| Note 15: Accumulated Other Comprehensive (Loss) Income | 17
| Note 16: Accounts Receivable Factoring | 18
| Note 17: Segment Information & Geographic Data | 19
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20
| Overview | 20
| Results of Operations | 21
| Results of Operations by Segment | 23
| Liquidity and Capital Resources | 25
| Significant Customers | 27
| Safe Harbor | 27
| New Accounting Pronouncements | 28
| Non-GAAP Measures | 28
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 28
Item 4. | Controls and Procedures | 28
Item 5. | Other Information | 32
PART II - OTHER INFORMATION | 30
Item 1. | Legal Proceedings | 30
Item 1A. | Risk Factors | 31
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32
Item 6. | Exhibits | 33
Signatures | 34

2

Table of Contents
PART I - FINANCIAL INFORMATION

Item 1. | Consolidated Financial Statements

ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)

| March 29, 2025 |  | December 31, 2024
| (Unaudited) |  |
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 879 |  |  | $ | 901 |
Accounts receivable, net of allowances for doubtful accounts of $1 each as of March 29, 2025 and December 31, 2024 | 617 |  |  | 692 |
Inventories, net | 681 |  |  | 693 |
Income tax receivable | 20 |  |  | 20 |
Prepaid expenses and other current assets | 94 |  |  | 134 |
Total Current assets | 2,291 |  |  | 2,440 |
Property, plant and equipment, net | 309 |  |  | 305 |
Right-of-use lease assets | 165 |  |  | 167 |
Goodwill | 3,927 |  |  | 3,891 |
Other intangibles, net | 423 |  |  | 422 |
Deferred income taxes | 545 |  |  | 512 |
Other long-term assets | 239 |  |  | 231 |
Total Assets | $ | 7,899 |  |  | $ | 7,968 |
Liabilities and Stockholders’ Equity |  |  |
Current liabilities: |  |  |
Current portion of long-term debt | $ | 69 |  |  | $ | 79 |
Accounts payable | 559 |  |  | 633 |
Accrued liabilities | 411 |  |  | 503 |
Deferred revenue | 464 |  |  | 453 |
Income taxes payable | 78 |  |  | 36 |
Total Current liabilities | 1,581 |  |  | 1,704 |
Long-term debt | 2,103 |  |  | 2,092 |
Long-term lease liabilities | 153 |  |  | 155 |
Deferred income taxes | 57 |  |  | 57 |
Long-term deferred revenue | 309 |  |  | 304 |
Other long-term liabilities | 70 |  |  | 70 |
Total Liabilities | 4,273 |  |  | 4,382 |
Stockholders’ Equity: |  |  |
Preferred stock, $.01 par value; authorized 10,000,000 shares; none issued | — |  |  | — |
Class A common stock, $.01 par value; authorized 150,000,000 shares; issued 72,151,857 shares | 1 |  |  | 1 |
Additional paid-in capital | 719 |  |  | 669 |
Treasury stock at cost, 21,013,606 and 20,645,798 shares as of March 29, 2025 and December 31, 2024, respectively | (2,025) |  |  | (1,900) |
Retained earnings | 4,996 |  |  | 4,860 |
Accumulated other comprehensive loss | (65) |  |  | (44) |
Total Stockholders’ Equity | 3,626 |  |  | 3,586 |
Total Liabilities and Stockholders’ Equity | $ | 7,899 |  |  | $ | 7,968 |

See accompanying Notes to Consolidated Financial Statements.
3

Table of Contents
ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share data)
(Unaudited)

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  |  |  |
Net sales: |  |  |  |  |  |  |
Tangible products | $ | 1,062 |  |  | $ | 929 |  |  |  |  |
Services and software | 246 |  |  | 246 |  |  |  |  |
Total Net sales | 1,308 |  |  | 1,175 |  |  |  |  |
Cost of sales: |  |  |  |  |  |  |
Tangible products | 542 |  |  | 498 |  |  |  |  |
Services and software | 121 |  |  | 114 |  |  |  |  |
Total Cost of sales | 663 |  |  | 612 |  |  |  |  |
Gross profit | 645 |  |  | 563 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |
Selling and marketing | 161 |  |  | 148 |  |  |  |  |
Research and development | 151 |  |  | 138 |  |  |  |  |
General and administrative | 111 |  |  | 81 |  |  |  |  |
Amortization of intangible assets | 24 |  |  | 26 |  |  |  |  |
Acquisition and integration costs | 3 |  |  | 1 |  |  |  |  |
Exit and restructuring costs | — |  |  | 10 |  |  |  |  |
Total Operating expenses | 450 |  |  | 404 |  |  |  |  |
Operating income | 195 |  |  | 159 |  |  |  |  |
Other (loss) income, net: |  |  |  |  |  |  |
Foreign exchange (loss) gain | (5) |  |  | 3 |  |  |  |  |
Interest expense, net | (23) |  |  | (17) |  |  |  |  |
Other expense, net | (2) |  |  | (3) |  |  |  |  |
Total Other expense, net | (30) |  |  | (17) |  |  |  |  |
Income before income tax | 165 |  |  | 142 |  |  |  |  |
Income tax expense | 29 |  |  | 27 |  |  |  |  |
Net income | $ | 136 |  |  | $ | 115 |  |  |  |  |
Basic earnings per share | $ | 2.64 |  |  | $ | 2.24 |  |  |  |  |
Diluted earnings per share | $ | 2.62 |  |  | $ | 2.23 |  |  |  |  |

See accompanying Notes to Consolidated Financial Statements.
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  |  |  |
Net income | $ | 136 |  |  | $ | 115 |  |  |  |  |
Other comprehensive income, net of tax: |  |  |  |  |  |  |
Changes in unrealized gains (losses) on sales hedging | (28) |  |  | 9 |  |  |  |  |
Foreign currency translation adjustment | 7 |  |  | (5) |  |  |  |  |
Comprehensive income | $ | 115 |  |  | $ | 119 |  |  |  |  |

See accompanying Notes to Consolidated Financial Statements.
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except share data)
(Unaudited)

|  | Class A Common Stock Shares |  | Class A Common Stock Value |  | Additional Paid-in Capital |  | Treasury Stock |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Total
Balance at December 31, 2024 |  | 51,506,059 |  |  | $ | 1 |  |  | $ | 669 |  |  | $ | (1,900) |  |  | $ | 4,860 |  |  | $ | (44) |  |  | $ | 3,586 |
Net share issuances and tax withholding payments related to share-based compensation plans |  | 6,550 |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |  |  | (1) |
Share-based compensation |  | — |  |  | — |  |  | 51 |  |  | — |  |  | — |  |  | — |  |  | 51 |
Repurchase of common stock |  | (374,358) |  |  | — |  |  | — |  |  | (125) |  |  | — |  |  | — |  |  | (125) |
Net income |  | — |  |  | — |  |  | — |  |  | — |  |  | 136 |  |  | — |  |  | 136 |
Changes in unrealized gains and losses on sales hedging (net of income taxes) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (28) |  |  | (28) |
Foreign currency translation adjustment |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | 7 |
Balance at March 29, 2025 |  | 51,138,251 |  |  | $ | 1 |  |  | $ | 719 |  |  | $ | (2,025) |  |  | $ | 4,996 |  |  | $ | (65) |  |  | $ | 3,626 |

|  | Class A Common Stock Shares |  | Class A Common Stock Value |  | Additional Paid-in Capital |  | Treasury Stock |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Total
Balance at December 31, 2023 |  | 51,378,862 |  |  | $ | 1 |  |  | $ | 615 |  |  | $ | (1,858) |  |  | $ | 4,332 |  |  | $ | (54) |  |  | $ | 3,036 |
Net share issuances and tax withholding payments related to share-based compensation plans |  | 21,106 |  |  | — |  |  | (3) |  |  | — |  |  | — |  |  | — |  |  | (3) |
Share-based compensation |  | — |  |  | — |  |  | 17 |  |  | — |  |  | — |  |  | — |  |  | 17 |
Net income |  | — |  |  | — |  |  | — |  |  | — |  |  | 115 |  |  | — |  |  | 115 |
Changes in unrealized gains and losses on sales hedging (net of income taxes) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9 |  |  | 9 |
Foreign currency translation adjustment |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5) |  |  | (5) |
Balance at March 30, 2024 |  | 51,399,968 |  |  | $ | 1 |  |  | $ | 629 |  |  | $ | (1,858) |  |  | $ | 4,447 |  |  | $ | (50) |  |  | $ | 3,169 |

Certain prior period amounts have been reclassified to conform with the current period presentation.
See accompanying Notes to Consolidated Financial Statements.
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

| Three Months Ended
| March 29, 2025 |  | March 30, 2024
Cash flows from operating activities: |  |  |
Net income | $ | 136 |  |  | $ | 115 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 41 |  |  | 43 |
Share-based compensation | 51 |  |  | 17 |
Deferred income taxes | (23) |  |  | (21) |
Unrealized gain on forward interest rate swaps | — |  |  | (20) |
Other, net | 1 |  |  | 1 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable, net | 84 |  |  | (80) |
Inventories, net | 15 |  |  | 98 |
Other assets | 3 |  |  | (9) |
Accounts payable | (76) |  |  | 13 |
Accrued liabilities | (110) |  |  | (28) |
Deferred revenue | 16 |  |  | (9) |
Income taxes | 42 |  |  | 43 |
Settlement liability | — |  |  | (45) |
Cash receipts on forward interest rate swaps | — |  |  | 7 |
Other operating activities | (2) |  |  | — |
Net cash provided by operating activities | 178 |  |  | 125 |
Cash flows from investing activities: |  |  |
Acquisition of businesses | (62) |  |  | — |
Purchases of property, plant and equipment | (20) |  |  | (14) |
Proceeds from sale of short-term investments | — |  |  | 3 |
Net cash used in investing activities | (82) |  |  | (11) |
Cash flows from financing activities: |  |  |
Payments of debt | — |  |  | (284) |
Proceeds from issuance of debt | — |  |  | 151 |
Payments for repurchases of common stock | (125) |  |  | — |
Net payments related to share-based compensation plans | (1) |  |  | (3) |
Change in unremitted cash collections from servicing factored receivables | 2 |  |  | 9 |
Other financing activities | 5 |  |  | 3 |
Net cash used in financing activities | (119) |  |  | (124) |
Effect of exchange rate changes on cash and cash equivalents, including restricted cash | 1 |  |  | (1) |
Net decrease in cash and cash equivalents, including restricted cash | (22) |  |  | (11) |
Cash and cash equivalents, including restricted cash, at beginning of period | 901 |  |  | 138 |
Cash and cash equivalents, including restricted cash, at end of period | $ | 879 |  |  | $ | 127 |
Less restricted cash, included in Prepaid expenses and other current assets | — |  |  | — |
Cash and cash equivalents at end of period | $ | 879 |  |  | $ | 127 |
Supplemental disclosures of cash flow information: |  |  |
Income taxes paid | $ | 9 |  |  | $ | 3 |
Interest paid inclusive of forward interest rate swaps | $ | 16 |  |  | $ | 30 |

Certain prior period amounts included in Net cash provided by operating activities have been reclassified to conform with the current period presentation.
See accompanying Notes to Consolidated Financial Statements.
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ZEBRA TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 Description of Business and Basis of Presentation
Zebra Technologies Corporation and its subsidiaries (“Zebra” or the “Company”) is a global leader providing innovative Enterprise Asset Intelligence (“EAI”) products, services, and software solutions (“offerings”) in the automatic identification and data capture industry. We design, manufacture, and sell a broad range of offerings, including cloud-based software subscriptions, that capture and move data. We also provide a full range of services, including maintenance, technical support, repair, managed and professional services. End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries. We provide our offerings globally through a direct sales force and an extensive network of channel partners.
Management prepared these unaudited interim consolidated financial statements according to the rules and regulations of the Securities and Exchange Commission for interim financial information and notes. As permitted under Article 10 of Regulation S-X and the instructions of Form 10-Q, these consolidated financial statements do not include all the information and notes required by United States Generally Accepted Accounting Principles (“GAAP”) for complete financial statements, although management believes that the disclosures made are adequate to make the information not misleading. These interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
In the opinion of the Company, these interim financial statements include all adjustments (of a normal, recurring nature) necessary to fairly present its Consolidated Balance Sheet as of March 29, 2025, the Consolidated Statements of Operations, Comprehensive Income, Stockholders’ Equity, and Cash Flows for the three months ended March 29, 2025 and March 30, 2024. These results, however, are not necessarily indicative of the results expected for the full fiscal year ending December 31, 2025.
Note 2 Significant Accounting Policies
For a discussion of our significant accounting policies, see Note 2, Significant Accounting Policies within Part II, Item 8 “Financial Statements and Supplementary Data” in the Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2024.
Note 3 Revenues
The Company recognizes revenue to depict the transfer of goods, solutions or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods, solutions or services.
Revenues for tangible products are generally recognized upon shipment, whereas revenues for services and solution offerings are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met. Revenues for software are recognized either upon delivery or over time using a time-based method, depending on how control is transferred to the customer. In cases where a bundle of products, services, solutions and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control.
Disaggregation of Revenue
The following table presents our Net sales disaggregated by product category for each of our segments (in millions):

| Three Months Ended
| March 29, 2025 |  | March 30, 2024
Segment | Tangible Products |  | Services and Software |  | Total |  | Tangible Products |  | Services and Software |  | Total
AIT | $ | 432 |  |  | $ | 30 |  |  | $ | 462 |  |  | $ | 365 |  |  | $ | 27 |  |  | $ | 392 |
EVM | 630 |  |  | 216 |  |  | 846 |  |  | 564 |  |  | 219 |  |  | 783 |
Total | $ | 1,062 |  |  | $ | 246 |  |  | $ | 1,308 |  |  | $ | 929 |  |  | $ | 246 |  |  | $ | 1,175 |

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In addition, refer to Note 17, Segment Information & Geographic Data for Net sales to customers by geographic region.
Performance Obligations
The Company’s remaining performance obligations relate to services and software solutions. The aggregated transaction price allocated to remaining performance obligations for arrangements with an original term exceeding one year was $1.18 billion and $1.19 billion, inclusive of deferred revenue, as of March 29, 2025 and December 31, 2024, respectively. On average, remaining performance obligations as of March 29, 2025 and December 31, 2024 are expected to be recognized over a period of approximately two years.
Contract Balances
Progress on satisfying performance obligations under contracts with customers related to billed revenues is reflected on the Consolidated Balance Sheets in Accounts receivable, net. Progress on satisfying performance obligations under contracts with customers related to unbilled revenues (“contract assets”) is reflected on the Consolidated Balance Sheets as Prepaid expenses and other current assets for revenues expected to be billed within the next twelve months, and Other long-term assets for revenues expected to be billed thereafter. The total contract asset balances were $9 million and $11 million as of March 29, 2025 and December 31, 2024, respectively. These contract assets result from timing differences between billing and satisfying performance obligations, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations. Contract assets are evaluated for impairment, and no impairment losses have been recognized during the three months ended March 29, 2025 and March 30, 2024, respectively.
Deferred revenue on the Consolidated Balance Sheets consists of payments and billings in advance of our performance. The combined short-term and long-term deferred revenue balances were $773 million and $757 million as of March 29, 2025 and December 31, 2024, respectively. During the three months ended March 29, 2025, the Company recognized $141 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2024. During the three months ended March 30, 2024, the Company recognized $146 million in revenue, which was previously included in the beginning balance of deferred revenue as of December 31, 2023.
Note 4 Inventories
The categories of Inventories, net are as follows (in millions):

| March 29, 2025 |  | December 31, 2024
Raw materials (1) | $ | 250 |  |  | $ | 248 |
Work in process | 3 |  |  | 4 |
Finished goods | 428 |  |  | 441 |
Total Inventories, net | $ | 681 |  |  | $ | 693 |

(1) Raw material inventories primarily consist of product components as well as supplies used in repair operations.
Note 5 Business Acquisitions
Photoneo
On February 28, 2025, the Company acquired Photoneo, a leading developer and manufacturer of 3D machine vision offerings. The Company’s cash purchase consideration of $62 million was primarily allocated to technology-related intangible assets of $17 million, customer relationship assets of $6 million, and goodwill of $34 million. The technology-related intangible assets and customer relationship assets both have estimated useful lives of 7 years. The Company utilized estimated fair values as of the acquisition date to allocate the purchase consideration to the identifiable net assets acquired based on estimates and assumptions, as well as customary valuation techniques. While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date.
The goodwill, which will be deductible for tax purposes, has been allocated to the EVM segment and principally relates to the expansion of our machine vision offerings across several industries.
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Note 6 Investments
The carrying value of the Company’s long-term investments, which are included in Other long-term assets on the Consolidated Balance Sheets, was $110 million as of both March 29, 2025 and December 31, 2024.
The Company did not make any payments for the purchase of long-term investments during the three months ended March 29, 2025 or March 30, 2024. Net gains and losses related to the Company’s long-term investments are included within Other expense, net on the Consolidated Statements of Operations. No net gains or losses were recorded during the three months ended March 29, 2025 or March 30, 2024.
Note 7 Fair Value Measurements
Financial assets and liabilities are measured using inputs from three levels of the fair value hierarchy in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels:
•Level 1: Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs (e.g. U.S. Treasuries and money market funds).
•Level 2: Observable prices that are based on inputs not quoted in active markets but corroborated by market data.
•Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs. In addition, the Company considers counterparty credit risk in the assessment of fair value.
The Company’s financial assets and liabilities carried at fair value as of March 29, 2025, are classified below (in millions):

| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Investments related to the deferred compensation plan | $ | 42 |  |  | $ | — |  |  | $ | — |  |  | $ | 42 |
Total Assets at fair value | $ | 42 |  |  | $ | — |  |  | $ | — |  |  | $ | 42 |
Liabilities: |  |  |  |  |  |  |
Foreign exchange contracts (1) | $ | 7 |  |  | $ | 8 |  |  | $ | — |  |  | $ | 15 |
Liabilities related to the deferred compensation plan | 42 |  |  | — |  |  | — |  |  | 42 |
Total Liabilities at fair value | $ | 49 |  |  | $ | 8 |  |  | $ | — |  |  | $ | 57 |

The Company’s financial assets and liabilities carried at fair value as of December 31, 2024, are classified below (in millions):

| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets: |  |  |  |  |  |  |
Foreign exchange contracts (1) | $ | 1 |  |  | $ | 30 |  |  | $ | — |  |  | $ | 31 |
Investments related to the deferred compensation plan | 41 |  |  | — |  |  | — |  |  | 41 |
Total Assets at fair value | $ | 42 |  |  | $ | 30 |  |  | $ | — |  |  | $ | 72 |
Liabilities: |  |  |  |  |  |  |
Liabilities related to the deferred compensation plan | $ | 41 |  |  | $ | — |  |  | $ | — |  |  | $ | 41 |
Total Liabilities at fair value | $ | 41 |  |  | $ | — |  |  | $ | — |  |  | $ | 41 |

(1)The fair value of the foreign exchange contracts is calculated as follows:
•Fair value of forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points.
•Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period-end (Level 2). If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1).
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Note 8 Derivative Instruments
In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. The Company does not hold or issue derivatives for trading or speculative purposes.
In accordance with ASC 815, the Company recognizes derivative instruments as either assets or liabilities on the Consolidated Balance Sheets and measures them at fair value. The following table presents the fair value of its derivative instruments (in millions):

| Asset (Liability)
|  |  | Fair Values as of
| Balance Sheets Classification |  | March 29, 2025 |  | December 31, 2024
Derivative instruments designated as hedges: |  |  |  |  |
Foreign exchange contracts | Prepaid expenses and other current assets |  | $ | — |  |  | $ | 30 |
Foreign exchange contracts | Accrued liabilities |  | (8) |  |  | — |
Total derivative instruments designated as hedges |  |  | $ | (8) |  |  | $ | 30 |
Derivative instruments not designated as hedges: |  |  |  |  |
Foreign exchange contracts | Prepaid expenses and other current assets |  | $ | — |  |  | $ | 1 |
Foreign exchange contracts | Accrued liabilities |  | (7) |  |  | — |
Total derivative instruments not designated as hedges |  |  | $ | (7) |  |  | $ | 1 |
Total net derivative (liability) asset |  |  | $ | (15) |  |  | $ | 31 |

The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions):

| Gains (Losses) Recognized in Income
|  |  | Three Months Ended |  |
| Statements of Operations Classification |  | March 29, 2025 |  | March 30, 2024 |  |  |  |
Derivative instruments not designated as hedges: |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Foreign exchange (loss) gain |  | $ | (8) |  |  | $ | 1 |  |  |  |  |
Forward interest rate swaps | Interest expense, net |  | — |  |  | 20 |  |  |  |  |
Total net (loss) gain recognized in income |  |  | $ | (8) |  |  | $ | 21 |  |  |  |  |

Activities related to derivative instruments are reflected within Net cash provided by operating activities on the Consolidated Statements of Cash Flows.
Interest Rate Risk Management
The Company is exposed to market risk associated with interest rate payments on its borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facilities, which bear interest at variable rates plus applicable margins. The Company manages its exposure to changes in interest rates by issuing both fixed and variable rate borrowings as well as periodically utilizing interest rate swaps to economically hedge interest rate exposure based on current and projected market conditions.
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Credit and Market Risk Management
Financial instruments, including derivatives, expose the Company to counterparty credit risk of nonperformance and to market risk related to currency exchange rate and interest rate fluctuations. The Company manages its exposure to counterparty credit risk by establishing minimum credit standards, diversifying its counterparties, and monitoring its concentrations of credit. The Company’s counterparties are commercial banks with expertise in derivative financial instruments. The Company evaluates the impact of market risk on the fair value and cash flows of its derivative and other financial instruments by considering reasonably possible changes in interest rates and currency exchange rates. The Company continually monitors the creditworthiness of the customers to which it grants credit terms in the normal course of business. The terms and conditions of the Company’s credit policies are designed to mitigate concentrations of credit risk.
The Company’s master netting and other similar arrangements with the respective counterparties allow for net settlement under certain conditions, which are designed to reduce credit risk by permitting net settlement with the same counterparty. We present the assets and liabilities of our derivative financial instruments, for which we have net settlement agreements in place, on a net basis on the Consolidated Balance Sheets. If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions would not have been significant as of March 29, 2025 or December 31, 2024.
Foreign Currency Exchange Risk Management
The Company conducts business on a multinational basis in a variety of foreign currencies. Exposure to market risk for changes in foreign currency exchange rates arises primarily from Euro-denominated external revenues, cross-border financing activities between subsidiaries, and foreign currency denominated monetary assets and liabilities. The Company manages its objective of preserving the economic value of non-functional currency denominated cash flows by initially hedging transaction exposures with natural offsets and, once these opportunities have been exhausted, through foreign exchange forward and option contracts, as deemed appropriate.
The Company manages the exchange rate risk of anticipated Euro-denominated sales using forward contracts, which typically mature within twelve months of execution. The Company designates these derivative contracts as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated other comprehensive income (loss) (“AOCI”) on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized. The realized gain or loss is then recorded as an adjustment to Net sales on the Consolidated Statements of Operations. Realized amounts reclassified to Net sales were $9 million and $1 million of gains for the three months ended March 29, 2025 and March 30, 2024, respectively. As of March 29, 2025 and December 31, 2024, the notional amounts of the Company’s foreign exchange cash flow hedges were €742 million and €592 million, respectively. The Company has reviewed its cash flow hedges for effectiveness and determined that they are highly effective.
The Company uses forward contracts, which are not designated as hedging instruments, to manage its exposures related to net assets denominated in foreign currencies. These forward contracts typically mature within one month after execution. Monetary gains and losses on these forward contracts are recorded in income and are generally offset by the transaction gains and losses related to their net asset positions. The notional values and the net fair values of these outstanding contracts were as follows (in millions):

| March 29, 2025 |  | December 31, 2024
Notional balance of outstanding contracts: |  |  |
British Pound/U.S. Dollar | £ | 16 |  |  | £ | 5 |
Euro/U.S. Dollar | € | 178 |  |  | € | 146 |
Euro/Czech Koruna | € | 14 |  |  | € | 16 |
Japanese Yen/U.S. Dollar | ¥ | 173 |  |  | ¥ | 360 |
Singapore Dollar/U.S. Dollar | S$ | 22 |  |  | S$ | 23 |
Mexican Peso/U.S. Dollar | Mex$ | 204 |  |  | Mex$ | 142 |
Polish Zloty/U.S. Dollar | zł | 74 |  |  | zł | 53 |
Net fair value of assets of outstanding contracts | $ | 7 |  |  | $ | 1 |

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Note 9 Long-Term Debt
The following table shows the carrying value of the Company’s debt (in millions):

| March 29, 2025 |  | December 31, 2024
Term Loan A | $ | 1,575 |  |  | $ | 1,575 |
Senior Notes | 500 |  |  | 500 |
Receivables Financing Facilities | 108 |  |  | 108 |
Total debt | $ | 2,183 |  |  | $ | 2,183 |
Less: Debt issuance costs | (9) |  |  | (9) |
Less: Unamortized discounts | (2) |  |  | (3) |
Less: Current portion of debt | (69) |  |  | (79) |
Total long-term debt | $ | 2,103 |  |  | $ | 2,092 |

As of March 29, 2025, the future maturities of debt are as follows (in millions):

2025 (9 months remaining) |  | $ | 69 |
2026 |  | 71 |
2027 |  | 1,543 |
2028 |  | — |
2029 |  | — |
Thereafter |  | 500 |
Total future maturities of debt |  | $ | 2,183 |

All borrowings as of March 29, 2025 were denominated in U.S. Dollars.
The estimated fair value of the Company’s debt approximated $2.2 billion as of both March 29, 2025 and December 31, 2024, respectively. These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and do not represent the settlement value of these liabilities to the Company. The fair value of debt will continue to vary each period based on a number of factors, including fluctuations in market interest rates as well as changes to the Company’s credit ratings.
Term Loan A
The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in the first quarter of 2026 and the majority due upon maturity in 2027. The Company has and may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. As of March 29, 2025, the Term Loan A interest rate was 5.42%. Interest payments are made monthly and are subject to variable rates plus an applicable margin.
Senior Notes
In the second quarter of 2024, the Company completed a private offering of $500 million senior unsecured notes (the “Senior Notes”) with a 6.5% fixed interest rate. The Senior Notes mature on June 1, 2032, and interest is payable semi-annually in arrears in June and December of each year. The Company may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.
The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of Zebra’s existing and future subsidiaries. The Senior Notes contain covenants that, among other things, limit the ability of Zebra to: (i) grant or incur liens; (ii) have its subsidiaries guarantee debt without becoming guarantors; and (iii) merge or consolidate with another company or sell all or substantially all of its assets.
Revolving Credit Facility
The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit. As of March 29, 2025, the Company had letters of credit totaling $10 million, which reduced funds available for borrowings under the Revolving Credit Facility from $1,500 million to $1,490 million. As of March 29, 2025, the Revolving Credit Facility had an average interest rate of 5.42%. Upon borrowing, interest payments are made monthly and are subject to variable rates plus an applicable margin. The Revolving Credit Facility matures on May 25, 2027.
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Receivables Financing Facility
As of March 29, 2025, the Company has a Receivables Financing Facility with a borrowing limit of up to $180 million. As collateral, the Company pledges perfected first-priority security interests in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under this facility as secured borrowings. The receivables financing facility matures on March 19, 2027.
As of March 29, 2025, the Company’s Consolidated Balance Sheets included $549 million of gross receivables that were pledged under the facility. As of March 29, 2025, $108 million had been borrowed, of which $47 million was classified as current. Borrowings under the facility bear interest at a variable rate plus an applicable margin. As of March 29, 2025, the facility had an average interest rate of 5.37%. Interest is paid monthly on these borrowings.
The Company’s borrowings described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels.
As of March 29, 2025, the Company was in compliance with all debt covenants.
Note 10 Leases
During the three months ended March 29, 2025, the Company recorded $4 million of right-of-use (“ROU”) assets obtained in exchange for lease obligations primarily related to the extension of existing leases.
Future minimum lease payments under non-cancellable leases as of March 29, 2025 were as follows (in millions):

2025 (9 months remaining) |  | $ | 36 |
2026 |  | 42 |
2027 |  | 34 |
2028 |  | 31 |
2029 |  | 26 |
Thereafter |  | 60 |
Total future minimum lease payments |  | $ | 229 |
Less: Interest |  | (40) |
Present value of lease liabilities |  | $ | 189 |
Reported as of March 29, 2025: |  |
Current portion of lease liabilities |  | $ | 36 |
Long-term lease liabilities |  | 153 |
Present value of lease liabilities |  | $ | 189 |

The current portion of lease liabilities is included within Accrued liabilities on the Consolidated Balance Sheets.
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Note 11 Accrued Liabilities, Commitments and Contingencies
Accrued Liabilities
The components of Accrued liabilities are as follows (in millions):

| March 29, 2025 |  | December 31, 2024
Incentive compensation | $ | 72 |  |  | $ | 174 |
Payroll and benefits | 72 |  |  | 76 |
Unremitted cash collections due to banks on factored accounts receivable | 53 |  |  | 51 |
Customer rebates | 48 |  |  | 56 |
Current portion of lease liabilities | 36 |  |  | 36 |
Warranty | 27 |  |  | 26 |
Interest payable | 18 |  |  | 3 |
Freight and duty | 16 |  |  | 12 |
Other | 69 |  |  | 69 |
Accrued liabilities | $ | 411 |  |  | $ | 503 |

Warranties
The following table is a summary of the Company’s warranty obligations (in millions):

| Three Months Ended
| March 29, 2025 |  | March 30, 2024
Balance at the beginning of the period | $ | 26 |  |  | $ | 27 |
Warranty expense | 8 |  |  | 7 |
Warranties fulfilled | (7) |  |  | (7) |
Balance at the end of the period | $ | 27 |  |  | $ | 27 |

Contingencies
The Company is subject to a variety of investigations, claims, suits, and other legal proceedings that arise from time to time in the ordinary course of business, including but not limited to, intellectual property, employment, tort, and breach of contract matters. The Company currently believes that the outcomes of such proceedings, individually and in the aggregate, will not have a material adverse impact on its business, cash flows, financial position, or results of operations. Any legal proceedings are subject to inherent uncertainties, and the Company’s view of these matters and their potential effects may change in the future. The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated.
Note 12 Share-Based Compensation
The Company issues share-based compensation awards under the Zebra Technologies 2018 Long-Term Incentive Plan (“2018 Plan”), approved by shareholders in 2018, which superseded and replaced all prior share-based incentive plans. Outstanding awards issued prior to the 2018 Plan are governed by the provisions of those plans until such awards have been exercised, forfeited, cancelled, expired, or otherwise terminated in accordance with their terms. Awards available under the 2018 Plan include stock-settled awards, including stock-settled restricted stock units, stock-settled performance stock units, restricted stock awards, performance share awards, stock appreciation rights, incentive stock options, and non-qualified stock options. Awards available under the 2018 Plan also include cash-settled awards, including cash-settled stock appreciation rights, cash-settled restricted stock units, and cash-settled performance stock units.
The Company uses treasury shares as its source for issuing shares under the share-based compensation programs. As of March 29, 2025, the Company had 1,424,590 shares of Class A Common stock remaining available to be issued under the 2018 Plan.
The compensation expense from the Company’s share-based compensation plans and associated income tax benefit, excluding the effects of excess tax benefits or shortfalls, are included in the Consolidated Statements of Operations as follows (in millions):
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| Three Months Ended |  |
Compensation costs and related income tax benefit | March 29, 2025 |  | March 30, 2024 |  |  |  |
Cost of sales | $ | 4 |  |  | $ | 2 |  |  |  |  |
Selling and marketing | 10 |  |  | 5 |  |  |  |  |
Research and development | 17 |  |  | 6 |  |  |  |  |
General and administration | 22 |  |  | 8 |  |  |  |  |
Total compensation expense | $ | 53 |  |  | $ | 21 |  |  |  |  |
Income tax benefit | $ | 9 |  |  | $ | 3 |  |  |  |  |

As of March 29, 2025, the total unearned compensation cost related to the Company’s share-based compensation plans was $190 million, which will be recognized over the weighted average remaining service period of approximately 1.7 years.
The majority of the Company’s share-based compensation awards are issued as part of its employee and non-employee director incentive program each fiscal year. Beginning in 2025, the annual employee equity incentive awards were granted in the first quarter. The non-employee director equity awards will continue to be granted in the second quarter. The Company also issues awards associated with business acquisitions and other off-cycle events. The majority of the Company’s share-based compensation is comprised of stock-settled awards.
The compensation cost of awards is expensed over each award’s service period, which is generally subject to certain employment conditions. The Company’s 2025 award agreement provisions resulted in increased recognition of compensation cost as compared to previous awards.
Stock-settled awards
The Company’s awards are typically time-vested with stock-settled RSUs vesting ratably in three annual installments and stock-settled PSUs vesting at the end of the three-year period. Upon vesting, stock-settled RSUs and PSUs convert to shares of Class A Common Stock that are released to participants.
Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of units granted, net of estimated forfeitures. The expected attainment of the performance goals for the stock-settled PSUs is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary.
A summary of the Company’s restricted and performance stock-settled awards for the three months ended March 29, 2025 is as follows:

| RSUs |  | PSUs |  |  |  |  |
| Units |  | Weighted-Average Grant Date Fair Value |  | Units |  | Weighted-Average Grant Date Fair Value |  |  |  |  |  |  |  |  |
Outstanding at beginning of period | 482,067 |  |  | $ | 295.39 |  |  | 241,946 |  |  | $ | 304.44 |  |  |  |  |  |  |  |  |  |
Granted | 255,307 |  |  | 307.02 |  |  | 97,861 |  |  | 306.84 |  |  |  |  |  |  |  |  |  |
Released | (5,646) |  |  | 300.29 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |
Forfeited | (7,405) |  |  | 287.04 |  |  | (1,420) |  |  | 304.51 |  |  |  |  |  |  |  |  |  |
Outstanding at end of period | 724,323 |  |  | $ | 299.53 |  |  | 338,387 |  |  | $ | 305.18 |  |  |  |  |  |  |  |  |  |

Stock Appreciation Rights (“SARs”)
SARs were previously granted primarily as part of the Company’s annual share-based compensation incentive program. Beginning in 2021, the Company no longer included SARs in its annual share-based compensation award issuances. As of March 29, 2025, there were 214,243 outstanding SARs, all of which were exercisable with a weighted-average remaining contractual life of 1 year.
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Cash-settled awards
The Company also issues cash-settled share-based compensation awards, including cash-settled restricted stock units and cash-settled performance stock units that are classified as liability awards and typically have a vesting period of three years. Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of share-equivalents granted, net of forfeitures. The fair value for all cash-settled awards and the expected attainment of the performance goals for the cash-settled performance stock units is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary. Cash settlement is based on the fair value of share equivalents at the time of vesting, which was not significant for the three months ended March 29, 2025 or March 30, 2024. Share-equivalents issued under these programs totaled 52,395 and 273 during the three months ended March 29, 2025 and March 30, 2024, respectively.
Employee Stock Purchase Plan
Eligible Zebra employees may purchase common stock at 95% of the fair market value at the date of purchase pursuant to the Zebra Technologies Corporation 2020 Employee Stock Purchase Plan (“2020 ESPP”). Employees may make purchases by cash or payroll deductions up to certain limits. The aggregate number of shares that may be purchased under the 2020 ESPP is 1,500,000 shares. As of March 29, 2025, 1,304,693 shares remained available for future purchase.
Note 13 Income Taxes
The Company’s effective tax rate for the three months ended March 29, 2025 and March 30, 2024 was 17.6% and 19.0%, respectively. In the current period and prior period, the variance from the 21% federal statutory rate was primarily attributable to the tax benefit related to foreign earnings subject to U.S. taxation and the generation of U.S. tax credits.
Note 14 Earnings Per Share
Basic net earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of diluted common shares outstanding. Diluted common shares outstanding is computed using the Treasury Stock method and, in periods of income, reflects the additional shares that would be outstanding if dilutive share-based compensation awards were converted into common shares during the period.
Earnings per share (in millions, except share data):

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  |  |  |
Basic: |  |  |  |  |  |  |
Net income | $ | 136 |  |  | $ | 115 |  |  |  |  |
Weighted-average shares outstanding | 51,365,011 |  |  | 51,387,570 |  |  |  |  |
Basic earnings per share | $ | 2.64 |  |  | $ | 2.24 |  |  |  |  |
Diluted: |  |  |  |  |  |  |
Net income | $ | 136 |  |  | $ | 115 |  |  |  |  |
Weighted-average shares outstanding | 51,365,011 |  |  | 51,387,570 |  |  |  |  |
Dilutive shares | 441,539 |  |  | 402,931 |  |  |  |  |
Diluted weighted-average shares outstanding | 51,806,550 |  |  | 51,790,501 |  |  |  |  |
Diluted earnings per share | $ | 2.62 |  |  | $ | 2.23 |  |  |  |  |

Anti-dilutive share-based compensation awards are excluded from diluted earnings per share calculations. There were 52,843 and 18,095 shares that were anti-dilutive for the three months ended March 29, 2025 and March 30, 2024, respectively.
Note 15 Accumulated Other Comprehensive (Loss) Income
Stockholders’ equity includes certain items classified as AOCI, including:
•Unrealized gain (loss) on sales hedging which relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales. These hedges are designated as cash flow hedges, and the Company
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defers income statement recognition of gains and losses until the hedged transaction occurs. See Note 8, Derivative Instruments for more details.
•Foreign currency translation adjustments which relates to the Company’s non-U.S. subsidiary companies that have designated a functional currency other than the U.S. Dollar. The Company translates the subsidiary functional currency financial statements to U.S. Dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of AOCI.
The changes in each component of AOCI during the three months ended March 29, 2025 and March 30, 2024 were as follows (in millions):

|  | Unrealized gain (loss) on sales hedging |  |  |  | Foreign currency translation adjustments |  | Total
Balance at December 31, 2023 |  | $ | (5) |  |  |  |  | $ | (49) |  |  | $ | (54) |
Other comprehensive income (loss) before reclassifications |  | 13 |  |  |  |  | (5) |  |  | 8 |
Amounts reclassified from AOCI(1) |  | (1) |  |  |  |  | — |  |  | (1) |
Tax effect |  | (3) |  |  |  |  | — |  |  | (3) |
Other comprehensive income (loss), net of tax |  | 9 |  |  |  |  | (5) |  |  | 4 |
Balance at March 30, 2024 |  | $ | 4 |  |  |  |  | $ | (54) |  |  | $ | (50) |
Balance at December 31, 2024 |  | $ | 22 |  |  |  |  | $ | (66) |  |  | $ | (44) |
Other comprehensive income (loss) before reclassifications |  | (28) |  |  |  |  | 7 |  |  | (21) |
Amounts reclassified from AOCI(1) |  | (9) |  |  |  |  | — |  |  | (9) |
Tax effect |  | 9 |  |  |  |  | — |  |  | 9 |
Other comprehensive income (loss), net of tax |  | (28) |  |  |  |  | 7 |  |  | (21) |
Balance at March 29, 2025 |  | $ | (6) |  |  |  |  | $ | (59) |  |  | $ | (65) |

(1) See Note 8, Derivative Instruments regarding the timing of reclassifications to operating results.
Note 16 Accounts Receivable Factoring
The Company has a Receivables Factoring arrangement, pursuant to which certain receivables originated from the EMEA and Asia-Pacific regions up to a maximum of €75 million are sold to a bank without recourse in exchange for cash. Such transfers are accounted for as sales and the related receivables are removed from the Company’s balance sheet. The Company does not maintain any beneficial interest in the receivables sold. The Company services the receivables on behalf of the bank, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in Cash flows from operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in Cash flows from financing activities on the Consolidated Statements of Cash Flows.
During the three months ended March 29, 2025 and March 30, 2024, the Company received cash proceeds of $119 million and $346 million, respectively, from the sales of accounts receivables under its factoring arrangement. As of both March 29, 2025 and December 31, 2024, there were a total of $28 million of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets.
As servicer of sold receivables, the Company had $53 million and $51 million of obligations that were not yet remitted to the bank as of March 29, 2025 and December 31, 2024, respectively. These obligations are included within Accrued liabilities on the Consolidated Balance Sheets, with changes in such obligations reflected within Cash flows from financing activities on the Consolidated Statements of Cash Flows.
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Note 17 Segment Information & Geographic Data
The Company’s operations consist of two reportable segments that provide complementary offerings to our customers: Asset Intelligence & Tracking (“AIT”), which includes barcode and card printing, RFID and RTLS offerings, supplies, and services; and Enterprise Visibility & Mobility (“EVM”), which includes mobile computing, data capture, fixed industrial scanning and machine vision, services, and workflow optimization solutions. The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments. The CODM reviews adjusted operating income to assess segment profitability primarily during the Company’s annual budget and forecasting process. The CODM assesses the profitability of each segment relative to its long-term growth objectives in evaluating resource allocation priorities. Segment assets are not reviewed by the Company’s CODM and therefore are not disclosed below.
Financial information by segment is presented as follows (in millions):

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  |  |  |
Net sales: |  |  |  |  |  |  |
AIT | $ | 462 |  |  | $ | 392 |  |  |  |  |
EVM | 846 |  |  | 783 |  |  |  |  |
Total Net sales | $ | 1,308 |  |  | $ | 1,175 |  |  |  |  |
Cost of sales: |  |  |  |  |  |  |
AIT | $ | 226 |  |  | $ | 208 |  |  |  |  |
EVM | 437 |  |  | 404 |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |
AIT (1) | $ | 136 |  |  | $ | 108 |  |  |  |  |
EVM (1) | 287 |  |  | 259 |  |  |  |  |
Operating income: |  |  |  |  |  |  |
AIT (2) | $ | 100 |  |  | $ | 76 |  |  |  |  |
EVM (2) | 122 |  |  | 120 |  |  |  |  |
Total segment operating income | 222 |  |  | 196 |  |  |  |  |
Corporate (3) | (27) |  |  | (37) |  |  |  |  |
Total Operating income | $ | 195 |  |  | $ | 159 |  |  |  |  |

(1)AIT and EVM segment operating expenses include Selling and marketing, Research and development, and General and administrative expenses, excluding the amounts classified within Corporate.
(2)AIT and EVM segment operating income includes depreciation and share-based compensation expense. The depreciation and share-based compensation expense amounts are proportionate to each segment’s Net sales.
(3)To the extent applicable, amounts included in Corporate consist of Amortization of intangible assets, Acquisition and integration costs, Exit and restructuring costs, as well as certain other non-recurring costs (impairment of goodwill and other intangibles, and business acquisition purchase accounting adjustments).
Information regarding the Company’s operations by geographic area is contained in the following tables. Net sales amounts are attributed to geographic area based on customer location.
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Net sales by region were as follows (in millions):

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  |  |  |
North America | $ | 656 |  |  | $ | 612 |  |  |  |  |
EMEA | 443 |  |  | 380 |  |  |  |  |
Asia-Pacific | 125 |  |  | 112 |  |  |  |  |
Latin America | 84 |  |  | 71 |  |  |  |  |
Total Net sales | $ | 1,308 |  |  | $ | 1,175 |  |  |  |  |

Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview
We are a global leader in the Automatic Identification and Data Capture (“AIDC”) industry. The AIDC market consists of mobile computing, data capture, radio frequency identification devices (“RFID”), barcode printing, and other workflow automation offerings. The Company’s offerings are proven to help our customers and end-users digitize and automate their workflows to achieve their critical business objectives, including improved productivity and operational efficiency, optimized regulatory compliance, and better customer experiences.
We design, manufacture, and sell a broad range of AIDC offerings, including: mobile computers, barcode scanners and imagers, RFID readers, specialty printers for barcode labeling and personal identification, real-time location systems (“RTLS”), related accessories and supplies, such as labels and other consumables, and related software applications. We also provide machine vision and robotics automation solutions; a full range of services, including maintenance, technical support, repair, managed and professional services; as well as cloud-based software subscriptions. End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries within North America; Europe, Middle East, and Africa (“EMEA”); Asia Pacific; and Latin America.
We continue to advance our Enterprise Asset Intelligence (“EAI”) vision: every asset and front-line worker visible, connected, and fully optimized. Through continual innovation, we have expanded beyond the traditional AIDC market to transform activities such as factory production, packages moving through a supply chain, retail shopping, the hospital patient journey and first responders addressing public safety and emergency situations. Data from enterprise assets, including status, condition, location, utilization, and preferences, is analyzed in the cloud to provide prioritized actionable insights. As a result, our offerings enable enterprises to “sense, analyze, and act” more effectively to optimize their activities.
The Company’s operations consist of two reportable segments that provide complementary offerings to our customers: Asset Intelligence & Tracking (“AIT”) and Enterprise Visibility & Mobility (“EVM”).
•The AIT segment is an industry leader in barcode printing and asset tracking technologies. Its major product lines include barcode and card printers, RFID and RTLS offerings, and supplies, including temperature-monitoring labels, and services.
•The EVM segment is an industry leader in automatic information and data capture offerings. Its major product lines include mobile computing, data capture, fixed industrial scanning and machine vision, services, and workflow optimization solutions. Our workflow optimization solutions include cloud-based software subscriptions, retail solutions, and robotic automation solutions.
We are a market leader in our core businesses, which are generally considered to be comprised of our mobile computing and data capture offerings, printing and supplies offerings, as well as support and repair services. We continue to focus on growth opportunities within adjacent and expansion markets by scaling and integrating our recent business acquisitions.
First Quarter 2025 Financial Summary and Other Recent Developments
•Net sales were $1,308 million in the current quarter compared to $1,175 million in the prior year.
•Operating income was $195 million in the current quarter compared to $159 million in the prior year.
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•Net income was $136 million, or $2.62 per diluted share in the current quarter, compared to net income of $115 million, or $2.23 per diluted share in the prior year.
•Net cash provided by operating activities was $178 million in the current quarter compared to $125 million in the prior year.
•We repurchased $125 million of common shares in the current year.
In the first quarter, both of our segments benefited from the continuation of improving demand trends that began in the second half of last year. Recent developments in the trade policies of the U.S. and other countries, including China, are complex and rapidly evolving. The impacts, including the amount and timing of proposed tariffs, remain fluid and are expected to negatively impact our 2025 operating results based on facts as we understand them today. We expect to partially mitigate those impacts through a combination of diversifying our product sourcing footprint, targeted list price increases, and product portfolio optimization.
On February 28, 2025, the Company acquired Photoneo, a leading developer and manufacturer of 3D machine vision offerings, for $62 million in cash. The acquisition complements and expands our machine vision offerings across several industries. The operating results of Photoneo are included in the EVM segment.
Results of Operations
Consolidated Results of Operations
(amounts in millions, except percentages)

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  | $ Change |  | % Change |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible products | $ | 1,062 |  |  | $ | 929 |  |  | $ | 133 |  |  | 14.3 | % |  |  |  |  |  |  |  |
Services and software | 246 |  |  | 246 |  |  | — |  |  | — | % |  |  |  |  |  |  |  |
Total Net sales | 1,308 |  |  | 1,175 |  |  | 133 |  |  | 11.3 | % |  |  |  |  |  |  |  |
Gross profit | 645 |  |  | 563 |  |  | 82 |  |  | 14.6 | % |  |  |  |  |  |  |  |
Gross margin | 49.3 | % |  | 47.9 | % |  |  |  | 140 bps |  |  |  |  |  |  |  |
Operating expenses | 450 |  |  | 404 |  |  | 46 |  |  | 11.4 | % |  |  |  |  |  |  |  |
Operating income | $ | 195 |  |  | $ | 159 |  |  | $ | 36 |  |  | 22.6 | % |  |  |  |  |  |  |  |

Net sales to customers by geographic region were as follows (amounts in millions, except percentages):

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  | $ Change |  | % Change |  |  |  |  |  |  |  |
North America | $ | 656 |  |  | $ | 612 |  |  | $ | 44 |  |  | 7.2 | % |  |  |  |  |  |  |  |
EMEA | 443 |  |  | 380 |  |  | 63 |  |  | 16.6 | % |  |  |  |  |  |  |  |
Asia-Pacific | 125 |  |  | 112 |  |  | 13 |  |  | 11.6 | % |  |  |  |  |  |  |  |
Latin America | 84 |  |  | 71 |  |  | 13 |  |  | 18.3 | % |  |  |  |  |  |  |  |
Total Net sales | $ | 1,308 |  |  | $ | 1,175 |  |  | $ | 133 |  |  | 11.3 | % |  |  |  |  |  |  |  |

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Operating expenses are summarized below (amounts in millions, except percentages):

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  | As a % of Net sales |  |  |  |  |  |
|  | 2025 |  | 2024 |  |  |  |  |  |
Selling and marketing | $ | 161 |  |  | $ | 148 |  |  | 12.3 | % |  | 12.6 | % |  |  |  |  |  |  |  |
Research and development | 151 |  |  | 138 |  |  | 11.5 | % |  | 11.7 | % |  |  |  |  |  |  |  |
General and administrative | 111 |  |  | 81 |  |  | 8.5 | % |  | 6.9 | % |  |  |  |  |  |  |  |
Amortization of intangible assets | 24 |  |  | 26 |  |  | NM |  | NM |  |  |  |  |  |  |  |
Acquisition and integration costs | 3 |  |  | 1 |  |  | NM |  | NM |  |  |  |  |  |  |  |
Exit and restructuring costs | — |  |  | 10 |  |  | NM |  | NM |  |  |  |  |  |  |  |
Total Operating expenses | $ | 450 |  |  | $ | 404 |  |  | 34.4 | % |  | 34.4 | % |  |  |  |  |  |  |  |

Consolidated Organic Net sales growth:

| Three Months Ended |  |
| March 29, 2025 |  |
Reported GAAP Consolidated Net sales growth | 11.3 | % |  |
Adjustments: |  |  |
Impact of foreign currency translations (1) | 0.7 | % |  |
Impact of acquisitions (2) | (0.1) | % |  |
Consolidated Organic Net sales growth (3) | 11.9 | % |  |

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.
(2)For purposes of computing Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.
(3)Consolidated Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.
First quarter 2025 compared to first quarter 2024
Total Net sales increased by $133 million or 11.3% compared to the prior year, reflecting growth in both of our segments associated with the continuation of improving demand trends that began in the middle of 2024. Excluding the effects of currency changes and acquisitions, Consolidated Organic Net sales increased by 11.9%.
Gross margin increased to 49.3% for the current year compared to 47.9% for the prior year. As compared to the prior year, Gross margin was higher in our AIT segment and slightly lower in our EVM segment.
Operating expenses for the quarters ended March 29, 2025 and March 30, 2024 were $450 million and $404 million, or 34.4% of Net sales in both periods. Current year Operating expenses were higher than the prior year primarily due to higher incentive compensation resulting from changes in share-based compensation eligibility provisions and the annual grant date, as well as increased investments in the business. These increases were partially offset by lower Exit and restructuring costs.
Operating income was $195 million for the current year compared to $159 million in the prior year. The increase was due to higher Gross profit, partially offset by higher Operating expenses.
Net income increased compared to the prior year primarily due to higher Operating income, as described above, partially offset by higher Other expense, net. The increase in Other expense, net was primarily due to non-recurring interest rate swap gains in the prior year and unfavorable changes in Foreign exchange (loss) gain in the current year.
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The Company’s effective tax rates for the three months ended March 29, 2025 and March 30, 2024 were 17.6% and 19.0%, respectively. The change in the effective tax rates year over year was primarily due to higher U.S. tax credits and tax benefits related to foreign earnings subject to U.S. taxation in the current year.
Diluted earnings per share increased to $2.62 as compared to $2.23 in the prior year due to higher Net income.
Results of Operations by Segment
The following commentary should be read in conjunction with the financial results of each reportable business segment as detailed in Note 17, Segment Information & Geographic Data in the Notes to Consolidated Financial Statements. To the extent applicable, segment operating income excludes business acquisition purchase accounting adjustments, amortization of intangible assets, acquisition and integration costs, impairment of goodwill and other intangibles, exit and restructuring costs, as well as certain other non-recurring costs.
Asset Intelligence & Tracking Segment (“AIT”)
(amounts in millions, except percentages)

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  | $ Change |  | % Change |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible products | $ | 432 |  |  | $ | 365 |  |  | $ | 67 |  |  | 18.4 | % |  |  |  |  |  |  |  |
Services and software | 30 |  |  | 27 |  |  | 3 |  |  | 11.1 | % |  |  |  |  |  |  |  |
Total Net sales | 462 |  |  | 392 |  |  | 70 |  |  | 17.9 | % |  |  |  |  |  |  |  |
Gross profit | 236 |  |  | 184 |  |  | 52 |  |  | 28.3 | % |  |  |  |  |  |  |  |
Gross margin | 51.1 | % |  | 46.9 | % |  |  |  | 420 bps |  |  |  |  |  |  |  |
Operating expenses | 136 |  |  | 108 |  |  | 28 |  |  | 25.9 | % |  |  |  |  |  |  |  |
Operating income | $ | 100 |  |  | $ | 76 |  |  | $ | 24 |  |  | 31.6 | % |  |  |  |  |  |  |  |

AIT Organic Net sales growth:

| Three Months Ended |  |
| March 29, 2025 |  |
AIT Reported GAAP Net sales growth | 17.9 | % |  |
Adjustments: |  |  |
Impact of foreign currency translations (1) | 0.5 | % |  |
AIT Organic Net sales growth (2) | 18.4 | % |  |

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.
(2)AIT Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.
First quarter 2025 compared to first quarter 2024
Total Net sales for AIT increased $70 million or 17.9% compared to the prior year, primarily due to higher sales of printing products and RFID products. Excluding the impact of foreign currency changes, AIT Organic Net sales increased by 18.4%.
Gross margin increased to 51.1% in the current year compared to 46.9% for the prior year, primarily due to favorable business mix and volume leverage.
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Operating income increased 31.6% in the current year compared to the prior year due to higher Gross profit, partially offset by higher Operating expenses.
Enterprise Visibility & Mobility Segment (“EVM”)
(amounts in millions, except percentages)

| Three Months Ended |  |
| March 29, 2025 |  | March 30, 2024 |  | $ Change |  | % Change |  |  |  |  |  |  |  |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tangible products | $ | 630 |  |  | $ | 564 |  |  | $ | 66 |  |  | 11.7 | % |  |  |  |  |  |  |  |
Services and software | 216 |  |  | 219 |  |  | (3) |  |  | (1.4) | % |  |  |  |  |  |  |  |
Total Net sales | 846 |  |  | 783 |  |  | 63 |  |  | 8.0 | % |  |  |  |  |  |  |  |
Gross profit | 409 |  |  | 379 |  |  | 30 |  |  | 7.9 | % |  |  |  |  |  |  |  |
Gross margin | 48.3 | % |  | 48.4 | % |  |  |  | (10) bps |  |  |  |  |  |  |  |
Operating expenses | 287 |  |  | 259 |  |  | 28 |  |  | 10.8 | % |  |  |  |  |  |  |  |
Operating income | $ | 122 |  |  | $ | 120 |  |  | $ | 2 |  |  | 1.7 | % |  |  |  |  |  |  |  |

EVM Organic Net sales growth:

| Three Months Ended |  |
| March 29, 2025 |  |
EVM Reported GAAP Net sales growth | 8.0 | % |  |
Adjustments: |  |  |
Impact of foreign currency translations (1) | 0.7 | % |  |
Impact of acquisitions (2) | (0.1) | % |  |
EVM Organic Net sales growth (3) | 8.6 | % |  |

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.
(2)For purposes of computing EVM Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.
(3)EVM Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.
First quarter 2025 compared to first quarter 2024
Total Net sales for EVM increased $63 million or 8.0% compared to the prior year, primarily due to higher sales of mobile computing and data capture products. Excluding the impacts of foreign currency changes and acquisitions, EVM Organic Net sales increased by 8.6%.
Gross margin decreased slightly to 48.3% in the current year compared to 48.4% for the prior year, primarily due to unfavorable business mix, and lower services and software margins, partially offset by volume leverage.
Operating income for the current year increased by 1.7% compared to the prior year due to higher Gross profit, largely offset by higher Operating expenses.
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Liquidity and Capital Resources
The primary factors that influence our liquidity include the amount and timing of cash collections from our customers, cash payments to our suppliers, capital expenditures, acquisitions, and share repurchases. Management believes that our existing capital resources, inclusive of available borrowing capacity on debt and other financing facilities and funds generated from operations, are sufficient to meet anticipated capital requirements and service our indebtedness. The following table summarizes our cash flow activities for the periods indicated (in millions):

| Three Months Ended |  |
Cash flow provided by (used in): | March 29, 2025 |  | March 30, 2024 |  | $ Change |  |
Operating activities | $ | 178 |  |  | $ | 125 |  |  | $ | 53 |  |  |
Investing activities | (82) |  |  | (11) |  |  | (71) |  |  |
Financing activities | (119) |  |  | (124) |  |  | 5 |  |  |
Effect of exchange rates on cash balances | 1 |  |  | (1) |  |  | 2 |  |  |
Net change in cash and cash equivalents, including restricted cash | $ | (22) |  |  | $ | (11) |  |  | $ | (11) |  |  |

The change in our cash and cash equivalents balance during the three months ended March 29, 2025 compared to the prior year is primarily due to the following:
•$53 million change in operating activities primarily due to improved overall profitability and favorable timing of customer collections in the current year as well as the final settlement payment in the prior year. These items were partially offset by the timing of inventory purchases and higher employee incentive compensation payments in the current year as well as larger inventory reductions in the prior year.
•$71 million change in investing activities primarily due to cash payments for the acquisition of Photoneo in the current year.
•$5 million change in financing activities primarily due to share repurchases in the current year, partially offset by $133 million of net debt repayments in the prior year.
Company Debt
The following table shows the carrying value of the Company’s debt (in millions):

| March 29, 2025 |  | December 31, 2024
Term Loan A | $ | 1,575 |  |  | $ | 1,575 |
Senior Notes | 500 |  |  | 500 |
Receivables Financing Facilities | 108 |  |  | 108 |
Total debt | $ | 2,183 |  |  | $ | 2,183 |
Less: Debt issuance costs | (9) |  |  | (9) |
Less: Unamortized discounts | (2) |  |  | (3) |
Less: Current portion of debt | (69) |  |  | (79) |
Total long-term debt | $ | 2,103 |  |  | $ | 2,092 |

Term Loan A
The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in the first quarter of 2026 and the majority due upon maturity in 2027. The Company has and may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions. As of March 29, 2025, the Term Loan A interest rate was 5.42%. Interest payments are made monthly and are subject to variable rates plus an applicable margin.
Senior Notes
In the second quarter of 2024, the Company completed a private offering of $500 million senior unsecured notes (the “Senior Notes”) with a 6.5% fixed interest rate. The Senior Notes mature on June 1, 2032, and interest is payable semi-annually in
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arrears in June and December of each year. The Company may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.
The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of Zebra’s existing and future subsidiaries. The Senior Notes contain covenants that, among other things, limit the ability of Zebra to: (i) grant or incur liens; (ii) have its subsidiaries guarantee debt without becoming guarantors; and (iii) merge or consolidate with another company or sell all or substantially all of its assets.
Revolving Credit Facility
The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit. As of March 29, 2025, the Company had letters of credit totaling $10 million, which reduced funds available for borrowings under the Revolving Credit Facility from $1,500 million to $1,490 million. As of March 29, 2025, the Revolving Credit Facility had an average interest rate of 5.42%. Upon borrowing, interest payments are made monthly and are subject to variable rates plus an applicable margin. The Revolving Credit Facility matures on May 25, 2027.
Receivables Financing Facility
As of March 29, 2025, the Company has a Receivables Financing Facility with a borrowing limit of up to $180 million. As collateral, the Company pledges perfected first-priority security interests in its U.S. domestically originated accounts receivable. The Company has accounted for transactions under this facility as secured borrowings. The receivables financing facility matures on March 19, 2027.
As of March 29, 2025, the Company’s Consolidated Balance Sheets included $549 million of gross receivables that were pledged under the facility. As of March 29, 2025, $108 million had been borrowed, of which $47 million was classified as current. Borrowings under the facility bear interest at a variable rate plus an applicable margin. As of March 29, 2025, the facility had an average interest rate of 5.37%. Interest is paid monthly on these borrowings.
The Company’s borrowings described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels.
Receivables Factoring
The Company has a Receivables Factoring arrangement, pursuant to which certain receivables originated from the EMEA and Asia-Pacific regions up to a maximum of €75 million are sold to a bank without recourse in exchange for cash. Such transfers are accounted for as sales and the related receivables are removed from the Company’s balance sheet. The Company does not maintain any beneficial interest in the receivables sold. The Company services the receivables on behalf of the bank, but otherwise maintains no significant continuing involvement with respect to the receivables. Sale proceeds that are representative of the fair value of factored receivables, less a factoring fee, are reflected in Cash flows from operating activities on the Consolidated Statements of Cash Flows, while sale proceeds in excess of the fair value of factored receivables are reflected in Cash flows from financing activities on the Consolidated Statements of Cash Flows.
As of both March 29, 2025 and December 31, 2024, there were a total of $28 million of uncollected receivables that had been sold and removed from the Company’s Consolidated Balance Sheets.
As servicer of sold receivables, the Company had $53 million and $51 million of obligations that were not yet remitted to the bank as of March 29, 2025 and December 31, 2024, respectively. These obligations are included within Accrued liabilities on the Consolidated Balance Sheets, with changes in such obligations reflected within Cash flows from financing activities on the Consolidated Statements of Cash Flows.
See Note 16, Accounts Receivable Factoring in the Notes to Consolidated Financial Statements for further details.
Share Repurchases
On May 17, 2022, the Company announced that its Board of Directors authorized a share repurchase program for up to $1 billion of its outstanding shares of common stock. The authorized share repurchase program does not have a stated expiration date. The level of the Company’s repurchases depends on a number of factors, including its financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors its management may deem relevant. The timing, volume, and nature of repurchases are subject to market conditions, applicable securities laws and other factors and may be amended, suspended or discontinued at any time. Repurchases may be affected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.
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During the first three months of 2025, the Company repurchased 374,358 shares of common stock for approximately $125 million. As of March 29, 2025, the Company has cumulatively repurchased 913,932 shares of common stock for approximately $279 million, resulting in a remaining amount of share repurchases authorized under the plans of $721 million. Subsequent to the quarter ended March 29, 2025, the Company has repurchased 303,293 shares of common stock for approximately $75 million through April 22, 2025.
Significant Customers
End-users of our offerings are diversified across a wide variety of industries. We have three customers, who are distributors of the Company’s offerings, that individually accounted for more than 10% of our Net sales for the periods presented. In the aggregate, the approximate percentage of our segment and Company total Net sales was as follows:

| Three Months Ended
| March 29, 2025 |  | March 30, 2024
| AIT |  | EVM |  | Total |  | AIT |  | EVM |  | Total
Significant customers as a % of Net sales | 20 | % |  | 36 | % |  | 56 | % |  | 16 | % |  | 36 | % |  | 52 | %

These customers accounted for 51% of accounts receivable as of March 29, 2025. No other customer accounted for more than 10% of total Net sales during the period ended March 29, 2025.
Safe Harbor
Forward-looking statements contained in this filing are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995 and are highly dependent upon a variety of important factors, which could cause actual results to differ materially from those expressed or implied in such forward-looking statements. When used in this document and documents referenced, the words “anticipate,” “believe,” “intend,” “estimate,” “will,” and “expect” and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements but are not the exclusive means of identifying these statements. The forward-looking statements include, but are not limited to, the Company’s financial outlook for full year of 2025. These forward-looking statements are based on current expectations, forecasts and assumptions, and are subject to the risks and uncertainties inherent in the Company’s industry, market conditions, general domestic and international economic conditions, and other factors. These factors include:
•Market acceptance of the Company’s products, services, and software solutions and competitors’ offerings and the potential effects of emerging technologies and changes in customer requirements,
•The effect of global market conditions, including the North America; EMEA; Latin America; and Asia-Pacific regions in which we do business,
•The impact of changes in foreign exchange rates, customs duties and trade policies due to the global nature of Zebra’s business,
•Our ability to control manufacturing and operating costs,
•Risks related to the manufacturing of the Company’s products and conducting business operations in non-U.S. countries, including the risk of depending on key suppliers who are also in non-U.S. countries,
•The Company’s ability to purchase sufficient materials, parts, and components, our ability to provide services, software, and products to meet customer demand, particularly in light of global economic conditions,
•The availability of credit and the volatility of capital markets, which may affect our suppliers, customers, and ourselves,
•Success of integrating acquisitions,
•Our ability to attract, retain, develop, and motivate key personnel,
•Interest rate and financial market conditions,
•Access to cash and cash equivalents held outside the U.S.,
•The effect of natural disasters, man-made disasters, public health issues (including pandemics), and cybersecurity incidents on our business, our customers or our contracted third parties,
•The impact of changes in foreign and domestic governmental policies, laws, or regulations,
•The outcome of litigation in which the Company may be involved, particularly litigation or claims related to infringement of third-party intellectual property rights, and
•The outcome of any future tax matters or tax law changes.
We encourage readers of this report to review Part II, Item 1A, “Risk Factors” in this report for further discussion of issues that could affect the Company’s future results. We undertake no obligation, other than as may be required by law, to publicly update
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or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason after the date of this report.
New Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as, disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction. This ASU will be effective for the Company’s fiscal December 31, 2025 year-end. We are assessing the impact of this guidance on our disclosures; it will not have an impact on our results of operations, cash flows, or financial condition.
In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain categories of expenses that are included within expense captions presented on the Consolidated Statements of Operations on an annual and interim basis. This ASU will be effective for the Company’s fiscal December 31, 2027 year-end and interim periods thereafter, with early adoption permitted. We are assessing the impact of this guidance on our disclosures; it will not have an impact on our results of operations, cash flows, or financial condition.
Non-GAAP Measures
The Company has provided reconciliations of the supplemental non-GAAP financial measures, as defined under the rules of the Securities and Exchange Commission, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP.
These supplemental non-GAAP financial measures – Consolidated Organic Net sales growth, AIT Organic Net sales growth, and EVM Organic Net sales growth – are presented because our management evaluates our financial results both including and excluding the effects of business acquisitions and foreign currency translation, as applicable. Management believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of our business from period to period and trends in our historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with the GAAP financial measures presented.

Item 3. | Quantitative and Qualitative Disclosures About Market Risk

There were no material changes in the Company’s market risk during the quarter ended March 29, 2025. For additional information on market risk, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report on Form 10-K for the year ended December 31, 2024.

Item 4. | Controls and Procedures

Management’s Report on Disclosure Controls
Our management is responsible for establishing and maintaining adequate disclosure controls as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management assessed the effectiveness of our disclosure controls as of March 29, 2025. Based on this assessment and those criteria, our management believes that, as of March 29, 2025, our disclosure controls were effective.
Changes in Internal Control over Financial Reporting
During the quarter ended March 29, 2025, there have been no changes in our internal controls that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
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Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Zebra have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART II - OTHER INFORMATION

Item 1. | Legal Proceedings

See Note 11, Accrued Liabilities, Commitments and Contingencies in the Notes to Consolidated Financial Statements included in this report.
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Item 1A. | Risk Factors

In addition to the other information included in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2024, and the factors identified under “Safe Harbor” in Part I, Item 2 of this Quarterly Report on Form 10-Q, which could materially affect our business, financial condition, cash flows, or results of operations. The risks described in the Annual Report are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently considers immaterial also may materially adversely affect its business, financial condition, and/or operating results. There have been no material changes to the risk factors included in our Annual Report for the year ended December 31, 2024.
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to repurchases of the Company’s common stock for the three months ended March 29, 2025:

Period |  | Total Number of Shares Purchased |  | Average Price Paid per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |  | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1)
January 1, 2025 - January 25, 2025 |  | 72,212 |  |  | $ | 386.68 |  |  | 72,212 |  |  | $ | 818 |
January 26, 2025 - February 22, 2025 |  | 118,565 |  |  | 354.88 |  |  | 118,565 |  |  | 776 |
February 23, 2025 - March 29, 2025 |  | 183,581 |  |  | 299.60 |  |  | 183,581 |  |  | 721 |
Total |  | 374,358 |  |  | $ | 333.90 |  |  | 374,358 |  |  | $ | 721 |

(1)On May 17, 2022, the Company announced that its Board of Directors authorized a share repurchase program for up to $1 billion of its outstanding shares of common stock. Repurchases may be affected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. As of March 29, 2025, the Company has cumulatively repurchased 913,932 shares of common stock for approximately $279 million, resulting in a remaining amount of share repurchases authorized under the May 2022 program of $721 million.

Item 5. | Other Information

The Company’s Securities Transactions and Confidentiality Policy governs the purchase, sale, and/or other dispositions of the Company's securities by directors, officers and employees, and is designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company. None of our directors or executive officers had in effect, adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the first quarter of 2025.
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Item 6. | Exhibits

10.1 | Form of 2025 performance-vested restricted stock unit agreement for all employees (including the CEO)
10.2 | Form of 2025 time-vested restricted stock unit agreement for all employees (including the CEO)
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101 | The following financial information from Zebra Technologies Corporation Quarterly Report on Form 10-Q, for the quarter ended March 29, 2025, formatted in Inline XBRL: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements. The instance document does not appear in the interactive data file because Inline XBRL tags are embedded in the iXBRL document.
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 formatted in Inline XBRL (included in Exhibit 101).

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

| ZEBRA TECHNOLOGIES CORPORATION
Date: April 29, 2025 | By: |  | /s/ William J. Burns
|  |  | William J. Burns
|  |  | Chief Executive Officer
Date: April 29, 2025 | By: |  | /s/ Nathan Winters
|  |  | Nathan Winters
|  |  | Chief Financial Officer

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