Zebra Technologies Corporation

Good day and welcome to the second quarter 2024 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 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 second 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 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 performance are year-on-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 second quarter results. Nathan will then provide additional detail on the financials and discuss our third quarter and revised full year outlook. Bill will conclude with progress on advancing our strategic priorities. 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. Our teams executed well in the second quarter, delivering sales and earnings results above the high end of our outcome. For the quarter, we realized sales of $1.2 billion, approximately flat to the prior year, and adjusted even a margin of 20.5%, a 70 basis point decrease, and non-GAAP diluted earnings per share of $3.18, a 3% decrease from the prior year. As we discussed in our last earnings call, during the first quarter, we began to see modest recovery in retail and e-commerce. In the second quarter, we saw signs of momentum across other end markets, including healthcare, where we realized double-digit growth. Mobile computing returned to growth across each of our vertical end markets, led by healthcare and retail. The growth in mobile computing was offset by declines across our other major product categories, where year-on-year comparisons are more challenging, and we were in earlier stages of recovery. Services and software saw modest growth in the quarter. While we are encouraged by early momentum and demand, we continue to see cautious spending behavior from our customers on large deployments, which have not yet returned to historical levels. Another highlight was our sequential improvement in profitability due to improved gross margin and the benefits of restructuring actions. Our plan to deliver $120 million of net annualized operating savings is on track and substantially complete. Given our second quarter performance, progress in our COTS actions, and early signs of momentum and demand, we are raising our full year outlook for sales and profitability. I will now turn the call over to Nathan to review our Q2 financial results and discuss our revised 2024 outlook.