Zebra Technologies Corporation

Good day and welcome to the third 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 third 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 the discussion of our third quarter results. Nathan will then provide additional detail on the financials and discuss our fourth 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 third quarter. delivering sales and earnings results above the high end of our outlook. For the quarter, we realized sales of almost $1.3 billion, a 31% increase compared to the prior year, and adjusted even a margin of 21.4%, a 980 basis point increase. Non-GAAP diluted earnings per share of $3.49, which was four times the prior year, and delivered strong free cash flow. As we discussed in our last earnings call, During the second quarter, we began to see early signs of recovery across our end markets with mobile computing returning to growth. In the third quarter, we were encouraged to see the recovery broaden with data capture and printing also returning to growth. We realized double-digit growth across all our primary end markets and broad-based growth to customers of all sizes as we began to cycle significant destocking activity in the second half of last year. We are seeing indications of customer spend generally improving in the second half, including expectations for higher year-end spending in North America and EMEA across most end markets. That said, the manufacturing sector is still lagging as the goods economy continues to recover. Additionally, as we look ahead to 2025, visibility remains limited regarding the timing of large deployments. Another highlight was our improved profitability, primarily due to improved gross margin driven by volume leverage and business mix. With the recent consolidation of our North American distribution centers into a single Chicago area facility, we have successfully completed our restructuring actions to deliver $120 million of net annualized operating savings. Given our third quarter performance, improved momentum in demand recovery, and our focus on profitable growth, we are raising our full-year outlook for sales, profitability, and free cash flow. I will now turn the call over to Nathan to review our Q3 financial results and discuss our revised 2024 outlook.