Zebra Gallops on Q3 Numbers

Zebra Technologies Corp (NASDAQ:ZBRA) saw its shares soar first thing Tuesday, on reporting financial numbers from its third quarter.

The company said Q3 non-GAAP net sales growth of 26.6% year-on-year to $1.44 billion, beating the consensus of $1.40 billion. Consolidated organic net sales for the third quarter increased 23.2%.

Tangible products' net sales grew 27.6% Y/Y to $1.24 billion. Services and software revenue rose 22.5% Y/Y to $196 million.

Net sales in the Enterprise Visibility & Mobility (EVM) rose 32.1% Y/Y to $1.05 billion. Asset Intelligence & Tracking (AIT) segment net sales grew 13.9% Y/Y to $386 million.

News sources say the company’s non-GAAP gross margin expanded 130 bps to 45.1% from a favorable business mix and higher service and software margin. The non-GAAP EBITDA margin expanded 140 bps to 21.7%.

Non-GAAP EPS of $4.55 beat the consensus of $4.06.

Zebra generated $836 million of operating cash flow for the nine months ended October 2. Zebra held $307 million in cash and equivalents.

"We entered the fourth quarter with a strong order backlog and robust pipeline of business which supports our strong sales outlook despite extended lead times for certain products," according to CEO Anders Gustafsson.

Zebra sees Q4 net sales to increase 8% - 12%, representing $1.42 billion - $1.47 billion, above the consensus of $1.41 billion. It sees Q4 Non-GAAP EPS of $4.20-$4.50, above the consensus of $4.17.

ZBRA shares traded higher by $25.90, or 4.8%, at $568.49 early Tuesday.