Piyush Avasthy

Burns said EMEA grew 7%, slightly behind North America but with resilient demand across Europe, offset by Middle East softness tied to geopolitical challenges. He cited relative strength in retail, manufacturing, and healthcare and double-digit machine vision growth, along with strength in supplies, RFID, print, and mobile computing. Prior EMEA softness reflected tougher compares, and management has no concerns about the region given its resilience.

Burns expects strong growth in both segments in the second half. Asset Visibility & Automation (print, data capture, machine vision, RFID) saw strong print growth on manufacturing strength plus strong data capture, supplies, and a very strong machine vision quarter with continued RFID deployments. Connected Frontline benefits from customers putting more devices in the hands of more frontline workers, next-generation mobile computing adding AI and RFID, new wearables, and Elo momentum, with truly broad-based demand across regions and verticals.

Burns confirmed broad internal AI adoption across software development, sales/marketing, supply chain forecasting, and customer service. Employees encouraged to leverage available AI tools. Believes AI will drive efficiency and margin improvement. Notes the biggest opportunity is external, what Zebra provides to customers, but internal productivity gains also contribute to profitability.

Winters attributed service margin pressure to higher repair costs from aging installed base, though Q4 improved from Q3. Expects margins to level off and be flat YoY in 2026. Software platform unification nearing completion which will lower support costs and improve margins in H2 2026 and beyond.

Burns said North America Q4 decline was purely cycling tough large-order comps in T&L and retail. SMB strength encouraging. Pipeline healthy across all product areas and verticals. EMEA returned to growth at +4% led by North/Central Europe. APAC +13% led by Japan and India. Latin America strong and broad-based with Brazil and Mexico outperforming.

Burns outlined two AI opportunities: premium hardware upgrades (mobile + wearables) and software (AI agents and suite). Active pilots showing significant customer value. First AI revenues expected in 2026, scaling in 2027+. Both hardware refresh and software subscription create revenue opportunities.

Burns acknowledged near-term caution and uneven demand across EMEA, Canada, and manufacturing. Said solutions remain fundamental and AI represents a longer-term opportunity. Positioned for sustainable profitable growth into next year but provided no specifics.

Burns said every customer is on a different refresh schedule. COVID-era device base has grown and will eventually be upgraded. Refreshes include even more devices due to device-for-all trend. Not guiding to 2026 but expects accelerated refresh cycle over next several years.

Burns noted retail/e-commerce strength driven by mobility and RFID. T&L recovery normalized with postal wins and new RFID applications in rail. Machine vision focused on inspection in manufacturing and T&L. Manufacturing remains challenging including EV. Did not specifically quantify mobile robots.

Burns confirmed manufacturing grew high single digits but still lags other verticals growing double digits. Retail, e-commerce, T&L, and healthcare all outpacing manufacturing.

Burns said production moves take 12-18 months. Zebra bears little CapEx, most goes to manufacturing partners paid through BOM over time. Current actions completing within Q2.

Burns noted strength in Northern Europe and competitive wins in European retail mobile computing. China (~3% of revenue) stabilized with modest growth; real strength from Australia, NZ, India.

Burns acknowledged the opportunity in manufacturing automation but kept the answer high-level, noting manufacturing is lagging near-term while presenting a longer-term growth story.

Bill said growth is well above the ~1.8% IPI backdrop, driven by broad-based commercial excellence and innovation, not pull-forward.

Anurag guided to normal seasonality with second-half acceleration and EPS growing $0.30, split evenly between Q3 and Q4.