Zebra Technologies Corporation

Good day and welcome to the first quarter 2025 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 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 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 on a constant currency basis and exclude results from recently acquired businesses for 12 months. 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. Nathan will then provide additional detail and discuss our 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 first quarter, delivering results above our outlook. As we and our customers navigate through an unpredictable environment, I want to begin by highlighting a few points before we cover our results in greater detail. We have made significant progress over the past 18 months in returning to profitable growth, extending our market leadership, and advancing our portfolio of solutions. While there is macroeconomic uncertainty, our first quarter results were strong and the demand environment has remained positive into the second quarter. We are well equipped to navigate the current landscape. Our solutions are critical in any economic environment and we continue to expand our market reach and opportunity. We have made substantial progress diversifying our supply chain beyond China over the past several years and we have a capital light business model which enables us to remain agile. We have a track record of preserving key investments in our business to accelerate long-term growth in challenging times while protecting profitability and remain well positioned to benefit from secular trends that digitize and automate workflows with our portfolio of innovative solutions. Now turning to Q1 results. As we discussed in our last earnings call, Strong retail year-end project spending carried over into January. Demand in the quarter remained strong, driving sales growth above our guidance range. For the quarter, we realized sales exceeding $1.3 billion, a 12% increase compared to the prior year. An adjusted EBITDA margin of 22.3%, a 240 basis point increase. And non-GAAP diluted earnings per share of $4.02, which was 42% higher than the prior year. We realized strong broad-based growth across all major product categories and regions. We also saw double-digit growth across most of our vertical end markets with high single-digit growth in manufacturing. From a profitability perspective, we achieved the highest quarterly gross margin in more than a decade and significant operating leverage resulting in strong improvement in profitability. As we enter the second quarter, we continue to see solid demand and the businesses continue to perform well. However, we remain agile to changes in this dynamic environment and continue to take actions to mitigate tariffs. I will now turn the call over to Nathan to review our Q1 financial results, tariff considerations, and outlook.