Zebra Technologies Corporation

Good day and welcome to the first quarter 2022 Zebra Technologies earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, today's event is being recorded. I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead, sir.

Good morning and welcome to Zebra's first quarter conference call. This presentation is being simulcast on our website at investors.zebra.com and will be archived there for at least one year. Our forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially due to factors discussed in our SEC filings. During this call, we will reference non-GAAP financial measures as we describe our business performance. You can find reconciliations at the end of this slide presentation and in today's earnings press release. Throughout this presentation, unless otherwise indicated, our references to sales growth are year over year on a constant currency basis and exclude results from recently acquired businesses for the 12 months following each acquisition. This presentation will include prepared remarks from Anders Gustafsson, our Chief Executive Officer, and Nathan Winters, our Chief Financial Officer. Anders will begin with our first quarter results. Then Nathan will provide additional detail on the financials and discuss our revised 2022 outlook. Anders will conclude with progress made on advancing our enterprise asset intelligence vision. Following the prepared remarks, Joe Heal, our Chief Revenue Officer, will join us as we take your questions. Now let's turn to slide four as I hand it over to Anders.

Thank you, Mike. Good morning, everyone, and thank you for joining us. Our team delivered solid first quarter results in an exceptionally challenging macro environment. For the quarter, we realized adjusted net sales growth of greater than 5%, an adjusted EBITDA margin of 19.9%, a 540 basis point decrease, and non-GAAP diluted earnings per share of $4.01, a 16% decrease from the prior year. Customer demand remains strong for our solutions that digitize and automate workflows. We realized sales growth across all four regions supported by exceptional strength in mobile computing with particularly strong growth in Asia Pacific and Latin America. Our teams have continued to manage supply chain constraints as we navigate significant global macro uncertainty, including COVID-19 lockdowns across Asia. We were able to secure more supply in mobile computing and scanning than we originally anticipated, which more than offset the impact of suspending shipments to Russia in early March. However, we were unable to fully satisfy customer demand, particularly for our printing product. Supply chain costs were greater than our expectations and significantly weighed on gross margin, which was partially offset by higher service and software margin. Operating expenses as a percentage of revenue increased due to acquisitions in our expansion markets and resuming in-person events. Overall, we are pleased that our first quarter sales and earnings performance exceeded the high end of our guidance ranges despite extreme supply chain challenges, including transitory costs that were higher than our expectations. With that, I will now turn the call over to Nathan to review our Q1 financial results in more detail and discuss our revised 2022 outlook.