Zebra Technologies Reports 2Q 2022 Results

Zebra Technologies announced results for the second quarter ended July 2, 2022.

Net sales were $1,468 million in the second quarter of 2022 compared to $1,377 million in the second quarter of 2021. Net sales in the Enterprise Visibility & Mobility (EVM) segment were $1,022 million in the second quarter of 2022 compared with $966 million in the second quarter of 2021.

Asset Intelligence & Tracking (AIT) segment net sales were $446 million in the second quarter of 2022 compared to $414 million in the prior year period. Consolidated organic net sales for the second quarter increased 6.9%. Second-quarter year-over-year organic net sales increased by 5.6% in the EVM segment and increased by 9.7% in the AIT segment.

“Our team delivered solid second quarter results, executing well in a challenging macro environment. Sales growth was near the high end of our expectations, and we were able to deliver adjusted earnings per share growth over the prior year, despite continued elevated supply chain costs and foreign currency exchange headwinds,” said Anders Gustafsson, CEO of Zebra Technologies.

“We have a strong order backlog and robust pipeline of business that supports solid growth in the second half of 2022,” added Gustafsson. “For the full year, we are maintaining our sales outlook and adjusting EBITDA margin to the low end of our previous outlook to reflect the impact of the stronger US dollar and the recent Matrox Imaging acquisition. Although supply chain costs remain elevated, we continue to drive improvement through the actions we are taking. We are excited about the early traction we are seeing in our expansion markets which elevate Zebra’s customer value proposition.”

Second quarter 2022 gross profit was $674 million compared to $658 million in the prior year period. Gross margin decreased to 45.9% for the second quarter of 2022 compared to 47.8% in the prior year period. The decrease was primarily due to higher premium supply chain costs and China import tariff recoveries in the prior year period. Adjusted gross margin was 46% in the second quarter of 2022 compared to 48% in the prior year period.

Adjusted EBITDA for the second quarter of 2022 decreased to $321 million, or 21.9% of adjusted net sales, compared to $325 million, or 23.6% of adjusted net sales for the second quarter of 2021 due to lower gross margin partially offset by adjusted operating expense leverage.

For the first six months of 2022, the company generated $154 million of operating cash flow and made capital expenditures of $31 million, resulting in free cash flow of $123 million. The company also acquired Matrox for $875 million, made $605 million of share repurchases under its existing authorization, and had net debt proceeds of $1,175 million.