ZEBRA TECHNOLOGIES CORP

The following commentary should be read in conjunction with the financial results of each reportable business segment as detailed in Note 18, Segment Information & Geographic Data in the Notes to Consolidated Financial Statements. To the extent applicable, segment operating income excludes Share-based Compensation, 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 intangible assets, and business acquisition purchase accounting adjustments).

Connected Frontline Segment (“CF”)

CF Organic Net sales growth:

(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 the acquisition of Elo Touch are excluded for twelve months following the September 30, 2025 acquisition date.

(3)CF Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

Total Net sales for CF increased $186 million or 25.9% compared to the prior year, primarily due to the inclusion of Elo Touch, higher sales of mobile computers, and favorable impact of foreign currency. Excluding the impact of foreign currency and the acquisition of Elo Touch, CF Organic Net sales increased by 7.5%.

Gross margin increased to 51.2% in the current year compared to 47.3% for the prior year quarter, primarily due to favorable impacts of IEEPA tariff recoveries and foreign currency, partially offset by unfavorable business mix.

Operating income increased 54.2% in the current year compared to the prior year.

Total Net sales for CF increased $327 million or 23.3% compared to the prior year, primarily due to the inclusion of Elo Touch, higher sales of mobile computers, and favorable impact of foreign currency. Excluding the impact of foreign currency and the acquisition of Elo Touch, CF Organic Net sales increased by 5.7%.

Gross margin increased to 50.2% in the current year compared to 48.0% for the prior year, primarily due to favorable impacts of IEEPA tariff recoveries and foreign currency, partially offset by unfavorable business mix.

Operating income increased 37.6% in the current year compared to the prior year.

Asset Visibility & Automation Segment (“AVA”)

AVA Organic Net sales growth:

(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 AVA Organic Net sales growth, amounts directly attributable to the acquisition of Photoneo and the disposition of the robotics automation business are excluded for twelve months following or preceding the respective acquisition or disposition, respectively.

(3)AVA Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

Total Net sales for AVA increased $78 million or 13.5% compared to the prior year, primarily due to higher sales of printing and machine vision products and favorable impact of foreign currency. Excluding the impacts of foreign currency and acquisitions and dispositions, AVA Organic Net sales increased by 11.4%.

Gross margin increased to 56.3% in the current year compared to 48.6% for the prior year, primarily due to favorable impacts of IEEPA tariff recoveries, business mix, and foreign currency.

Operating income for the current year increased by 79.4% compared to the prior year.

Total Net sales for AVA increased $124 million or 10.3% compared to the prior year, primarily due to higher sales of printing and machine vision products and favorable impact of foreign currency. Excluding the impacts of foreign currency and acquisitions and dispositions, AVA Organic Net sales increased by 8.0%.

Gross margin increased to 54.1% in the current year compared to 49.7% for the prior year, primarily due to favorable impacts of IEEPA tariff recoveries, business mix, and foreign currency.

Operating income for the current year increased by 45.0% compared to the prior year.