ZEBRA TECHNOLOGIES CORP
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
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FY2025 · Filed Feb 12, 2026
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Zebra Technologies Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Zebra Technologies Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 12, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Acquisition of Elo Holdings, Inc. - Valuation of Developed Technology and Customer Relationships
| Description of the Matter | As discussed in Note 5 to the consolidated financial statements, on September 30, 2025, the Company completed the acquisition of Elo Holdings, Inc. (“Elo”) for total consideration of $1,303 million. The acquisition was accounted for as a business combination, which requires, among other things, the assets acquired and the liabilities assumed to be recognized at fair value as of the acquisition date. The Company recognized approximately $277 million of developed technology and $206 million of customer relationships intangible assets related to the Elo acquisition. Auditing management’s accounting for the Elo acquisition required complex auditor judgment due to the significant estimation in determining the fair value of the developed technology and customer relationships intangible assets acquired. The significant estimation was primarily due to the judgmental nature of the inputs to the valuation model, as well as the sensitivity of the assumptions to the fair value. The significant assumptions used to estimate the fair value of the developed technology intangible asset included the forecasted revenue and related growth rate, EBITDA margin and discount rate and for the customer relationships intangible asset included the forecasted revenue and related growth rate, customer attrition rate and discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions. |
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| How We Addressed the Matter in OurAudit | We obtained an understanding of the Company’s process for evaluating the valuation of acquired developed technology and customer relationships intangible assets. We tested the design and operating effectiveness of the Company's controls over the estimation process supporting the measurement and recognition of the developed technology and customer relationships intangible assets. To test the fair value of the developed technology and customer relationships intangible assets, our audit procedures included, among others, assessing the valuation methodologies, testing the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company. For example, we compared the significant assumptions to historical and current industry, market and economic trends where relevant. We assessed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the developed technology and customer relationships intangible assets resulting from changes in the assumptions. We also involved our valuation specialists to assist in evaluating the valuation methodology and certain significant assumptions such as the discount rate used in the fair value estimate. |
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Accounting for Uncertain Tax Positions
| Description of the Matter | As discussed in Note 16 of the financial statements, the Company earns a significant amount of its operating income across multiple jurisdictions. As the Company operates in a multinational tax environment and incurs income tax obligations in a number of jurisdictions, complexities and uncertainties can arise in the application of complex tax regulations to the Company’s multinational operations.Auditing the application of taxation legislation to the Company’s business operations and structure is inherently complex and requires judgment. These factors impact the evaluation and estimation of certain of the Company’s uncertain tax positions. |
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| How We Addressed the Matter in OurAudit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification of and accounting for those uncertain tax positions. This included controls over the Company’s tax technical assessment of the related cross-jurisdictional transactions and developments impacting the recognition and measurement of those uncertain tax positions.Our audit procedures included, among others, involving our tax professionals to test the implications of developments impacting the recognition and measurement of certain of the Company’s uncertain tax positions, such as correspondence with tax authorities, tax law changes and changes in the business. We tested the completeness and accuracy of the underlying data and calculations used in the measurement of those uncertain tax positions. We also assessed the completeness of significant tax matters identified related to those uncertain tax positions and the adequacy of the accounting for any potential uncertainty. |
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/s/Ernst & Young LLP
We have served as the Company’s auditor since 2005.
Chicago, Illinois
February 12, 2026
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