AI Takeaway
Zebra Technologies delivered strong Q2 2026 revenue growth of 14.3% to $1.495B, but net income was nearly flat at $135M (-0.7% YoY) as higher debt and financing costs offset operational gains, while a significant $300M share buyback drove cash down 87% to $114M.
Revenue
$1.5B
++14.30% YoY
EPS (Basic)
$2.74
++3.79% YoY
Gross Margin
49.6%
++0.32% YoY
Operating Income
$215M
++10.26% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Zebra Technologies grew revenue 14.3% year-over-year to $1.495B in Q2 2026, up from $1.308B in Q2 2025, reflecting a meaningful recovery in demand for its enterprise mobile computing, data capture, and printing solutions after a prior-year inventory correction cycle.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Gross profit rose 15.0% to $742M, with gross margin improving modestly to 49.6% from 49.3% in the prior year, suggesting Zebra maintained pricing discipline and managed cost of revenue (up 13.6% to $753M) effectively relative to revenue growth.
Source: Source: 10-Q Income Statement (XBRL Financial Data)
Operating income grew 10.3% to $215M, but operating margin contracted slightly to 14.4% from 14.9%, as R&D spending increased 9.3% to $165M, reflecting continued investment in next-generation enterprise technology platforms.
Source: Source: 10-Q Income Statement & Key Ratios (XBRL Financial Data)
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Upgrade to unlockCash and equivalents fell sharply by 87% year-over-year to $114M, while current liabilities stand at $1.763B, resulting in a current ratio of 0.96 — below the 1.0 threshold that typically signals adequate short-term liquidity. This leaves Zebra with limited buffer against unexpected operational disruptions or economic downturns.
Source: Source: 10-Q Balance Sheet (XBRL Financial Data)
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Upgrade to unlockReported EPS of $4.75 versus the $4.33 analyst consensus — a +9.6% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.5B | $1.31B | +14.30% |
Cost of Revenue | $753M | $663M | +13.57% |
Gross Profit | $742M | $645M | +15.04% |
Operating Income | $215M | $195M | +10.26% |
Net Income | $135M | $136M | -0.74% |
EPS (Basic) | $2.74 | $2.64 | +3.79% |
EPS (Diluted) | $2.72 | $2.62 | +3.82% |
R&D Expense | $165M | $151M | +9.27% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $8.33B | $7.9B | +5.48% |
Current Assets | $1.7B | $2.29B | -26.01% |
Total Liabilities | $4.86B | $4.27B | +13.78% |
Current Liabilities | $1.76B | $1.58B | +11.51% |
Stockholders' Equity | $3.47B | $3.63B | -4.30% |
Cash & Equivalents | $114M | $879M | -87.03% |
Long-Term Debt | $2.66B | $2.18B | +21.85% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $176M | $178M | -1.12% |
Investing Cash Flow | $-2M | $-82M | +97.56% |
Financing Cash Flow | $-185M | $-119M | -55.46% |
Share Buybacks | $300M | $125M | +140.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 49.6% | 49.3% | +0.32% |
Operating Margin | 14.4% | 14.9% | -0.53% |
Net Margin | 9.0% | — | — |
ROE | 3.9% | — | — |
ROA | 1.6% | — | — |
Current Ratio | $0.961 | — | — |
Debt to Equity | $1.401 | — | — |
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Zebra Technologies reported Q2 2026 revenue of $1.495B, up 14.3% year-over-year, with diluted EPS of $2.72, up 3.8%. However, net income was nearly flat at $135M (-0.7% YoY) as rising interest costs on higher debt offset strong top-line growth.
Zebra's cash and equivalents fell 87% year-over-year to just $114M, primarily because the company spent $300M on share buybacks — a 140% increase from the $125M repurchased in Q2 2025. This aggressive capital return program significantly reduced the company's liquidity cushion.
The most pressing risks include a current ratio below 1.0 (0.96), indicating current liabilities exceed current assets, and long-term debt that grew 21.9% to $2.66B, pushing the debt-to-equity ratio to 1.40. These factors limit Zebra's financial flexibility and increase sensitivity to interest rate changes.
Gross margin improved slightly to 49.6% from 49.3%, but operating margin contracted to 14.4% from 14.9% as R&D spending rose 9.3% to $165M. Net margin came in at 9.0%, well below operating margin, reflecting the drag from higher interest expenses on growing long-term debt.
Zebra's operational performance is strong with $1.495B in revenue and $176M in operating cash flow, but its balance sheet shows stress: cash is down to $114M, long-term debt stands at $2.66B, and the current ratio is below 1.0 at 0.96. The company's ability to sustain its buyback program and service its debt will depend on continued revenue growth momentum.