Zebra Technologies Announces 4Q, Full-Year 2023 Results

Zebra Technologies Corporation announced results for the fourth quarter and full year ended Dec. 31, 2023.

“As expected, our fourth quarter results continued to be impacted by broad-based softness across our end markets and distributor destocking. We realized sequential improvement in sales, profitability and free cash flow through demand improvement, restructuring actions and inventory management initiatives,” said Bill Burns, CEO of Zebra Technologies.

“Entering 2024, distributor inventories are aligned with the current demand environment,” Burns added. “Although we are seeing some improvement in order activity, we are not yet seeing signs of a broad market recovery. We continue to be well positioned to address our customers’ biggest challenges and return to growth in 2024.”

Net sales were $1,009 million in the fourth quarter of 2023 compared to $1,503 million in the prior year. Net sales in the Enterprise Visibility & Mobility (EVM) segment were $663 million in the fourth quarter of 2023 compared to $986 million in the prior year. Asset Intelligence & Tracking (AIT) segment net sales were $346 million in the fourth quarter of 2023 compared to $517 million in the prior year.

Consolidated organic net sales for the fourth quarter decreased 33.1%. Fourth-quarter year-over-year organic net sales decreased by 32.7% in the EVM segment and decreased by 33.6% in the AIT segment.

Fourth-quarter 2023 gross profit was $448 million compared to $685 million in the prior year. Gross margin decreased to 44.4% for the fourth quarter of 2023 compared to 45.6% in the prior year. Adjusted gross margin was 44.6% in the fourth quarter of 2023, compared to 45.6% in the prior year.

Net income for the fourth quarter of 2023 was $17 million, or $0.31 per diluted share, compared to net income of $186 million, or $3.57 per diluted share, in the prior year.
Adjusted EBITDA for the fourth quarter of 2023 decreased to $155 million, or 15.4% of adjusted net sales, compared to $338 million, or 22.5% of adjusted net sales, in the prior year due to lower gross profit and higher operating expense as a percentage of revenue.

As of Dec. 31, 2023, the company had cash and cash equivalents of $137 million and total debt of $2,226 million.

First Quarter 2024

The company expects net sales to decline between 17% and 20% compared to the first quarter of 2023. This expectation includes an approximately 50 basis point favorable impact from foreign currency translation.

Adjusted EBITDA margin for the first quarter of 2024 is expected to be approximately 18%. Non-GAAP diluted earnings per share are expected to be in the range of $2.30 to $2.60. This assumes an adjusted effective tax rate of approximately 16%.

Full Year 2024

The company expects net sales to be in the range of a 1% decline and 3% growth compared to 2023. This expectation assumes a negligible impact from foreign currency translation. Adjusted EBITDA margin is expected to be approximately 19%. Free cash flow is expected to be at least $550 million inclusive of the final $45 million payment from the previously announced settlement.