Zebra Technologies Corporation

Good day and welcome to the first quarter 2024 Zetra Technologies Earnings Conference Call. All participants will be in the 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, this event is being recorded. I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead.

Good morning and welcome to Zebra's first quarter earnings 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, and we refer you to the factors discussed on 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 performance are year-over-year and on a constant currency basis. This presentation will include prepared remarks from Bill Burns, our chief executive officer, and Nathan Winters, our chief financial officer. Bill will begin with a discussion of our first quarter results and strategic actions. Nathan will then provide additional detail on the financials and discuss our second quarter and full year outlook. Bill will conclude with progress on advancing our vision. Following the prepared remarks, Bill and Nathan will take your questions. Now let's turn to slide four as I hand it over to Bill.

Thank you, Mike. Good morning and thank you for joining us. As expected, our first quarter performance was impacted by continued broad-based softness across our end markets and regions, which we began to experience in the second quarter of last year, resulting in a double-digit decline in sales and profitability. However, we are beginning to see a modest recovery in demand as we saw sequential improvement from the fourth quarter. We are particularly encouraged by the better than expected large order activity, which drove the upside for the quarter. That said, we are not yet seeing a broad-based recovery, and as a result, we continue to take an agile approach to navigating the current environment. We also delivered another quarter of sequential improvement in profitability as a result of our restructuring actions and improved gross margin. Services and software were a bright spot in the quarter with improved sales and profitability, helping to offset the year-on-year sales declines across all product categories. For the quarter, we realized sales of $1.2 billion, a 16.8 percent decline from the prior year, and adjusted EBITDA margin of 19.9 percent, a 150 basis point decrease. and non-GAAP diluted earnings per share of $2.84, a 28% decrease from the prior year. We are pleased with the progress we have made on our previously announced actions to improve profitability and drive sales growth as our end markets recover. Our restructuring plans to deliver $120 million of net annualized operating savings is on track to be completed mid-year. On the supply front, we made substantial improvement in our working capital driven by our renegotiation of long-term supply commitments and ongoing work to draw down component inventories with our contract manufacturers. We have also driven both tactical and strategic sales initiatives, including reallocation of resources to accelerate growth. Given the progress on our actions, we are raising our full-year outlook for sales, margin, and free cash flow. I will now turn the call over to Nathan to review our Q1 financial results and discuss our revised 2024 outlook.