Enterprise data capture company Zebra Technologies (NASDAQ: ZBRA) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 14.3% year on year to $1.50 billion. Its non-GAAP profit of $4.75 per share was 11.9% above analysts’ consensus estimates.

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“Our strong first quarter results demonstrate the durability of demand for our innovative technology, with organic growth across our segments and regions, led by strength in our manufacturing end market. Elo Touch also contributed solid profitable growth as we begin to drive synergies," said Bill Burns, Chief Executive Officer of Zebra Technologies.

Company Overview

Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $5.58 billion in revenue over the past 12 months, Zebra is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s challenging to maintain high growth rates when you’ve already captured a large portion of the addressable market. For Zebra to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.

As you can see below, Zebra’s 3.3% annualized revenue growth over the last five years was tepid. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Zebra’s annualized revenue growth of 13.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, Zebra reported year-on-year revenue growth of 14.3%, and its $1.50 billion of revenue exceeded Wall Street’s estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is commendable and indicates the market sees success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Zebra’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 19.5% over the last five years. This profitability was elite for a business services business thanks to its efficient cost structure and economies of scale.

Looking at the trend in its profitability, Zebra’s adjusted operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Zebra generated an adjusted operating margin profit margin of 18.3%, down 2.8 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Zebra’s weak 2.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Zebra’s two-year annual EPS growth of 37.9% was fantastic and topped its 13.2% two-year revenue growth.

Diving into the nuances of Zebra’s earnings can give us a better understanding of its performance. A two-year view shows that Zebra has repurchased its stock, shrinking its share count by 4.2%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q1, Zebra reported adjusted EPS of $4.75, up from $4.02 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Zebra’s full-year EPS of $16.57 to grow 11.2%.

Key Takeaways from Zebra’s Q1 Results

It was good to see Zebra beat analysts’ EPS expectations this quarter. We were also glad its full-year EPS guidance outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 14.2% to $247.80 immediately following the results.

Indeed, Zebra had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).