# ZEBRA TECHNOLOGIES CORP (ZBRA)

Informational only - not investment advice.

CIK: 0000877212
SIC: 3560 General Industrial Machinery & Equipment
SIC breadcrumb: [Manufacturing](/division/D/) > [Industrial And Commercial Machinery And Computer Equipment](/major-group/35/) > [SIC 3560 General Industrial Machinery & Equipment](/industry/3560/)
Latest 10-K filed: 2026-02-12
SEC page: https://www.sec.gov/edgar/browse/?CIK=877212
Filing source: https://www.sec.gov/Archives/edgar/data/877212/000162828026007668/zbra-20251231.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 5396000000 | USD | 2025 | 2026-02-12 |
| Net income | 419000000 | USD | 2025 | 2026-02-12 |
| Assets | 8502000000 | USD | 2025 | 2026-02-12 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000877212.json. Derived margins are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 3,574,000,000 | 3,722,000,000 | 4,218,000,000 | 4,485,000,000 | 4,448,000,000 | 5,627,000,000 | 5,781,000,000 | 4,584,000,000 | 4,981,000,000 | 5,396,000,000 |
| Net income | -137,000,000 | 17,000,000 | 421,000,000 | 544,000,000 | 504,000,000 | 837,000,000 | 463,000,000 | 296,000,000 | 528,000,000 | 419,000,000 |
| Operating income | 80,000,000 | 322,000,000 | 610,000,000 | 692,000,000 | 651,000,000 | 979,000,000 | 529,000,000 | 481,000,000 | 742,000,000 | 700,000,000 |
| Gross profit | 1,642,000,000 | 1,710,000,000 | 1,981,000,000 | 2,100,000,000 | 2,003,000,000 | 2,628,000,000 | 2,624,000,000 | 2,123,000,000 | 2,413,000,000 | 2,593,000,000 |
| Diluted EPS | -2.65 | 0.32 | 7.76 | 9.97 | 9.35 | 15.52 | 8.80 | 5.72 | 10.18 | 8.18 |
| Assets | 4,632,000,000 | 4,275,000,000 | 4,339,000,000 | 4,711,000,000 | 5,375,000,000 | 6,215,000,000 | 7,529,000,000 | 7,306,000,000 | 7,968,000,000 | 8,502,000,000 |
| Liabilities | 3,840,000,000 | 3,441,000,000 | 3,004,000,000 | 2,872,000,000 | 3,231,000,000 | 3,231,000,000 | 4,796,000,000 | 4,270,000,000 | 4,382,000,000 | 4,914,000,000 |
| Stockholders' equity | 792,000,000 | 834,000,000 | 1,335,000,000 | 1,839,000,000 | 2,144,000,000 | 2,984,000,000 | 2,733,000,000 | 3,036,000,000 | 3,586,000,000 | 3,588,000,000 |
| Cash and cash equivalents | 156,000,000 | 62,000,000 | 44,000,000 | 30,000,000 | 168,000,000 | 332,000,000 | 105,000,000 | 137,000,000 | 901,000,000 | 125,000,000 |
| Net margin | -3.83% | 0.46% | 9.98% | 12.13% | 11.33% | 14.87% | 8.01% | 6.46% | 10.60% | 7.77% |
| Operating margin | 2.24% | 8.65% | 14.46% | 15.43% | 14.64% | 17.40% | 9.15% | 10.49% | 14.90% | 12.97% |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance

## Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization.
Confidence: high

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section generally discusses fiscal 2025 and 2024 items and year-over-year comparisons between 2025 and 2024. Discussions of 2023 items and year-over-year comparisons between 2024 and 2023 are not included herein, other than within the Results of Operations by Segment which reflects the changes made to our segment reporting made in 2025. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for that discussion.

Overview

The Company is a global leader in the Automatic Identification and Data Capture (“AIDC”) industry, ensuring frontline operations everywhere are digitized, automated and intelligent. The AIDC market consists of mobile computing, data capture, radio frequency identification devices (“RFID”), thermal barcode printing, and other workflow automation offerings. Effective in the fourth quarter of 2025, we realigned our reportable segments from the former Enterprise Visibility & Mobility (EVM) and Asset Intelligence & Tracking (AIT) segments to two new segments: Connected Frontline (“CF”) and Asset Visibility and Automation (“AVA”). Our CF and AVA segment results will also exclude share-based compensation expense from the measurement of segment operating income. Refer to Part I, Item 1 of this document for additional information.

•The CF segment is focused on unifying teams, customers, and AI agents to deliver enhanced frontline experiences. This segment brings together solutions that empower frontline workers with the information and tools they need to make smarter decisions and improve customer service. Principal product categories include mobile computing, point of sale solutions, self-service kiosks and interactive touchscreen displays, workflow optimization software solutions, and related services.

•The AVA segment provides solutions that track critical assets and automate workflows to provide the real-time, data-driven insights necessary to optimize supply chains, manufacturing, and logistics. The principal product categories include thermal barcode printing and related supplies and sensors, data capture, fixed industrial scanning, machine vision, RFID, real-time location systems (RTLS), and related services.

2025 Financial Summary and Other Recent Developments

•Net sales were $5,396 million in the current year compared to $4,981 million in the prior year.

•Operating income was $700 million in the current year compared to $742 million in the prior year.

•Net income was $419 million, or $8.18 per diluted share in the current year, compared to Net income of $528 million, or $10.18 per diluted share in the prior year.

•We repurchased $587 million of common shares, including $303 million in the fourth quarter.

Exit & Restructuring Actions:

In the fourth quarter of 2025, we announced our intention to dispose of or exit our robotics automation solutions business in an effort to better align resources with our strategic priorities. In relation to this decision, we incurred approximately $55 million in one-time costs in the fourth quarter, principally consisting of long-lived asset impairments of $45 million, including an intangible asset impairment of $34 million, a right-of-use lease asset impairment of $8 million, and property, plant and equipment impairment of $3 million. The other one-time costs consisted of employee severance and working capital-related charges. These one-time costs are classified as Exit and restructuring on the Consolidated Statement of Operations. Additional costs may be incurred in 2026, as we complete the divestiture of this business.

In the fourth quarter of 2025, the Company committed to certain organizational changes designed to generate cost efficiencies while better aligning our organizational structure with the Company’s long-term growth strategy (collectively referred to as the “2025 Productivity Plan”). The total cost under the 2025 Productivity Plan, which is expected to be substantially completed in 2026 and will primarily consist of employee severance costs, is estimated to be approximately $35- 40 million, including $21 million recognized in the fourth quarter of 2025. The costs of these actions are classified within Exit and restructuring on the Consolidated Statements of Operations.

We expect annualized pre-tax operating costs savings of at least $20 million from these actions, net of re-investment into advancing the Company’s AI product portfolio, reorganizing our sales force, and absorbing increased employee-related costs.

Acquisitions:

On September 30, 2025, the Company acquired Elo Holdings, Inc. (“Elo”) for $1,303 million in cash, net of cash on hand. Elo is an innovator of solutions that engage customers, enhance self-service, and accelerate automation across a wide range of end

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markets. The Elo acquisition expands our portfolio of self-service and consumer-facing workflow offerings. The operating results of Elo are included in the CF segment.

On February 28, 2025, the Company acquired Photoneo for approximately $62 million in cash. Photoneo is a leading developer and manufacturer of 3D machine vision offerings. The Photoneo acquisition complements and expands our machine vision offerings across several industries. The operating results of Photoneo are included in the AVA segment.

See Note 5, Business Acquisitions in the Notes to Consolidated Financial Statements for additional details.

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Results of Operations: Year Ended 2025 versus 2024 and Year Ended 2024 versus 2023

Consolidated Results of Operations

(amounts in millions, except percentages)

Year Ended December 31,

Percent

Change 2025 vs 2024

Percent

Change 2024 vs 2023

2025

2024

2023

Net sales:

Tangible products

$

4,418 

$

4,016 

$

3,665 

10.0 

%

9.6 

%

Services and software

978 

965 

919 

1.3 

%

5.0 

%

Total Net sales

5,396 

4,981 

4,584 

8.3 

%

8.7 

%

Gross profit

2,593 

2,413 

2,123 

7.5 

%

13.7 

%

Gross margin

48.1 

%

48.4 

%

46.3 

%

(30) bps

210 bps

Operating expenses

1,893 

1,671 

1,642 

13.3 

%

1.8 

%

Operating income

$

700 

$

742 

$

481 

(5.7)

%

54.3 

%

Net sales to customers by geographic region were as follows (amounts in millions, except percentages):

Year Ended December 31,

Percent

Change 2025 vs 2024

Percent

Change 2024 vs 2023

2025

2024

2023

North America

$

2,695 

$

2,492 

$

2,353 

8.1 

%

5.9 

%

EMEA

1,724 

1,635 

1,433 

5.4 

%

14.1 

%

Asia-Pacific

613 

526 

513 

16.5 

%

2.5 

%

Latin America

364 

328 

285 

11.0 

%

15.1 

%

Total Net sales

$

5,396 

$

4,981 

$

4,584 

8.3 

%

8.7 

%

Operating expenses are summarized below (amounts in millions, except percentages):

Year Ended December 31,

As a Percentage of Net sales

2025

2024

2023

2025

2024

2023

Selling and marketing

$

653 

$

600 

$

581 

12.1 

%

12.0 

%

12.7 

%

Research and development

593 

563 

519 

11.0 

%

11.3 

%

11.3 

%

General and administrative

433 

381 

334 

8.0 

%

7.6 

%

7.3 

%

Amortization of intangible assets

114 

104 

104 

NM

NM

NM

Acquisition and integration costs

24 

6 

6 

NM

NM

NM

Exit and restructuring costs

76 

17 

98 

NM

NM

NM

Total Operating expenses

$

1,893 

$

1,671 

$

1,642 

35.1 

%

33.5 

%

35.8 

%

Consolidated Organic Net sales growth:

Year Ended December 31,

2025

2024

Reported GAAP Consolidated Net sales growth

8.3 

%

8.7 

%

Adjustments:

Impact of foreign currency translations (1)

— 

%

(0.6)

%

Impact of acquisitions (2)

(2.1)

%

— 

%

Consolidated Organic Net sales growth (3)

6.2 

%

8.1 

%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

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(2)For purposes of computing Organic Net sales growth, amounts directly attributable to business acquisitions are excluded for twelve months following their respective acquisitions.

(3)Consolidated Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

2025 compared to 2024

Total Net sales increased $415 million or 8.3% compared to the prior year reflecting growth in both our AVA and CF segments associated with improved demand trends that began in the middle of 2024, along with contributions from our recent Elo and Photoneo acquisitions. Excluding the effects of foreign currency changes and acquisitions, Consolidated Organic Net sales increased by 6.2%.

Gross margin decreased to 48.1% for the current year compared to 48.4% in the prior year. The decrease was primarily due to unfavorable impacts of tariffs, net of mitigating actions, along with lower services and software margins, largely offset by volume leverage favorability. Gross margin was higher in AVA and declined in CF. As we exited 2025, the unfavorable impacts of existing import tariffs have been fully mitigated.

Operating expenses for the years ended December 31, 2025 and 2024 were $1,893 million and $1,671 million, or 35.1% and 33.5% of Net sales, respectively. Current year Operating expenses were higher than the prior year primarily due to higher employee and employee-related costs, the inclusion of operating expenses and higher acquisition and integration costs associated with recently acquired companies, and higher exit and restructuring costs primarily driven by the planned divestiture of our robotics automation solutions business. The higher employee and employee-related costs in the current year include higher share-based compensation costs, primarily driven by changes made in the current year to the timing of the annual grant and eligibility provisions as well as improved expected attainment associated with performance-based awards.

Operating income was $700 million for the current year compared to $742 million for the prior year. The decrease was due to higher Operating expenses, partly offset by higher Gross profit.

Total other expense, net, increased primarily due to non-recurring interest rate swap gains in the prior year and foreign exchange transaction losses in the current year, partly offset by lower net interest costs associated with the Company’s borrowings driven by rate favorability and higher interest income on cash equivalents in the current year.

The Company’s effective tax rates for the years ended December 31, 2025 and December 31, 2024 were 25.2% and 16.9%, respectively. The increase in the effective tax rate compared to the prior year was primarily due to increased taxes related to foreign earnings subject to U.S. taxation as a result of 2025 U.S tax legislation, lower share-based compensation deductions, increased reserves for uncertain tax positions, and U.S. state income taxes, partly offset by the generation of U.S. and Canadian tax credits and the release of certain Canadian valuation allowance reserves.

Net income decreased 20.6% compared to the prior year due to lower Operating income, higher non-operating expenses, and higher income taxes, as described above.

Results of Operations by Segment

The following commentary should be read in conjunction with the financial results of each reportable business segment as detailed in Note 20, Segment Information & Geographic Data in the Notes to Consolidated Financial Statements. To the extent applicable, Share-based Compensation, Amortization of intangible assets, Acquisition and integration costs, Exit and restructuring costs, as well as certain other non-recurring costs (impairment of goodwill and other intangible assets, and business acquisition purchase accounting adjustments) are excluded from segment results.

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Table of Contents

Connected Frontline (“CF”)

(amounts in millions, except percentages)

Year Ended December 31,

Percent

Change 2025 vs 2024

Percent

Change 2024 vs 2023

2025

2024

2023

Net sales:

Tangible products

$

2,156 

$

1,916 

$

1,522 

12.5 

%

25.9 

%

Services and software

804 

798 

758 

0.8 

%

5.3 

%

Total Net sales

2,960 

2,714 

2,280 

9.1 

%

19.0 

%

Gross profit

1,396 

1,334 

1,031 

4.6 

%

29.4 

%

Gross margin

47.2 

%

49.2 

%

45.2 

%

(200) bps

400 bps

Operating expenses

811 

775 

703 

4.6 

%

10.2 

%

Operating income

$

585 

$

559 

$

328 

4.7 

%

70.4 

%

CF Organic Net sales growth:

Year Ended December 31,

2025

2024

CF Reported GAAP Net sales growth

9.1 

%

19.0 

%

Adjustments:

Impact of foreign currency translations (1)

— 

%

(0.5)

%

Impact of acquisition (2)

(3.5)

%

— 

%

CF Organic Net sales growth (3)

5.6 

%

18.5 

%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)For purposes of computing Organic Net sales growth, amounts directly attributable to the acquisition of Elo are excluded for twelve months following the September 30, 2025 acquisition date.

(3) CF Organic Net sales growth is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

2025 compared to 2024

Total Net sales for CF increased $246 million, or 9.1%, compared to the prior year primarily due to higher sales of mobile computing products and the net sales of Elo. CF Organic Net sales increased by 5.6%.

Gross margin decreased to 47.2% in the current year compared to 49.2% in the prior year primarily due to unfavorable impacts of tariffs, net of mitigating actions, and lower services and software margins, partly offset by volume leverage favorability.

Operating income increased 4.7% in the current year compared to the prior year due to higher Gross profit, partly offset by higher Operating expenses. The inclusion of Elo’s results of operations also contributed to the higher Gross profit and Operating expenses.

2024 compared to 2023

Total Net sales for CF increased $434 million, or 19.0%, compared to 2023 primarily due to higher sales of mobile computing products, favorable foreign currency changes, as well as higher services and software sales. CF Organic Net sales increased by 18.5%.

Gross margin increased to 49.2% in 2024 compared to 45.2% in 2023 primarily due to volume leverage, favorable business mix, higher service and software margins, lower freight rates, and lower inventory-related charges.

Operating income increased 70.4% in 2024 compared to 2023 due to higher Gross profit, partly offset by higher Operating expenses.

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Table of Contents

Asset Visibility & Automation (“AVA”)

(amounts in millions, except percentages)

Year Ended December 31,

Percent

Change 2025 vs 2024

Percent

Change 2024 vs 2023

2025

2024

2023

Net sales:

Tangible products

$

2,262 

$

2,100 

$

2,143 

7.7 

%

(2.0)

%

Services and software

174 

167 

161 

4.2 

%

3.7 

%

Total Net sales

2,436 

2,267 

2,304 

7.5 

%

(1.6)

%

Gross profit

1,219 

1,088 

1,098 

12.0 

%

(0.9)

%

Gross margin

50.0 

%

48.0 

%

47.7 

%

200 bps

30 bps

Operating expenses

705 

668 

671 

5.5 

%

(0.4)

%

Operating income

$

514 

$

420 

$

427 

22.4 

%

(1.6)

%

AVA Organic Net sales growth (decline):

Year Ended December 31,

2025

2024

AVA Reported GAAP Net sales growth (decline)

7.5 

%

(1.6)

%

Adjustments:

Impact of foreign currency translations (1)

— 

%

(0.6)

%

Impact of acquisition (2)

(0.5)

%

— 

%

AVA Organic Net sales growth (decline) (3)

7.0 

%

(2.2)

%

(1)Operating results reported in U.S. Dollars are affected by foreign currency exchange rate fluctuations. Foreign currency translation impact represents the difference in results that are attributable to fluctuations in the currency exchange rates used to convert the results for businesses where the functional currency is not the U.S. Dollar. This impact is calculated by translating the current period results at the currency exchange rates used in the comparable prior year period as well as removing realized cash flow hedge gains and losses from both the current and prior year periods.

(2)For purposes of computing AVA Organic Net sales growth (decline), amounts directly attributable to the acquisition of Photoneo are excluded for twelve months following the February 28, 2025 acquisition date.

(3)AVA Organic Net sales growth (decline) is a non-GAAP financial measure. See the Non-GAAP Measures section at the end of this item.

2025 compared to 2024

Total Net sales for AVA increased $169 million, or 7.5%, compared to the prior year primarily due to higher sales of printing products, as well as higher sales of RFID, supplies and sensors, and data capture products. AVA Organic Net sales increased by 7.0%.

Gross margin increased to 50.0% in the current year compared to 48.0% for the prior year primarily due to primarily due to favorable business mix, lower inventory related charges, and volume leverage favorability.

Operating income for the current year increased 22.4% compared to the prior year due to higher Gross profit partially offset by higher Operating expenses.

2024 compared to 2023

Total Net sales for AVA decreased $37 million, or 1.6%, compared to 2023 primarily due to lower sales of data capture and printing products, partly offset by favorable foreign currency changes and higher sales of services and software and RFID products. AVA Organic Net sales decreased by 2.2%.

Gross margin increased to 48.0% in 2024 compared to 47.7% in the previous year primarily due to favorable business mix, partly offset by higher inventory related charges.

Operating income decreased by 1.6% in 2024 compared to 2023 due to lower Gross profit, partly offset by lower Operating expenses.

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Table of Contents

Liquidity and Capital Resources

The primary factors that influence our liquidity include the amount and timing of cash collections from our customers, cash payments to our suppliers, capital expenditures, acquisitions, and share repurchases. Management believes that our existing capital resources, inclusive of available borrowing capacity on debt and other financing facilities and funds generated from operations, are sufficient to meet anticipated capital requirements and service our indebtedness. The following table summarizes our cash flow activities for the years indicated (in millions):

Year Ended December 31,

$ Change 2025 vs 2024

$ Change 2024 vs 2023

2025

2024

2023

Cash flow provided by (used in):

Operating activities

$

917 

$

1,013 

$

(4)

$

(96)

$

1,017 

Investing activities

(1,455)

(57)

(92)

(1,398)

35 

Financing activities

(239)

(190)

117 

(49)

(307)

Effect of exchange rates on cash balances

1 

(3)

— 

4 

(3)

Net (decrease) increase in cash and cash equivalents, including restricted cash

$

(776)

$

763 

$

21 

$

(1,539)

$

742 

Cash flow provided by (used in):

Operating activities

$

917 

$

1,013 

$

(4)

$

(96)

$

1,017 

Less: Purchases of property, plant and equipment

(86)

(59)

(87)

(27)

28 

Free cash flow (Non-GAAP) (1)

$

831 

$

954 

$

(91)

$

(123)

$

1,045 

(1)Free cash flow, a non-GAAP measure, is defined as Net cash provided by (used in) operating activities in a period minus purchases of property, plant and equipment (capital expenditures) made in that period.

2025 vs. 2024

The change in our cash and cash equivalents balance during the current year was primarily due to the following:

•$96 million decrease in net operating cash inflows primarily due to larger reductions in inventory in the prior year, higher employee incentive compensation payments in the current year, and cash receipts from the settlements of terminated interest rate swap agreements in the prior year. These items were partly offset by favorable timing of customer collections.

•$1,398 million increase in net investing cash outflows primarily due to the acquisitions of Elo and Photoneo and higher capital expenditures in the current year.

•$49 million increase in net financing cash outflows primarily due to higher share repurchases in the year, partly offset by borrowings to help fund the acquisition of Elo in the fourth quarter as well as the timing of transactions associated with servicing factored receivables.

•Free cash flow remains strong, with the decline compared to the prior year due to lower operating cash inflows and higher capital expenditures, as described above.

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Company Debt

The following table shows the carrying value of the Company’s debt (in millions):

December 31,

2025

2024

Term Loan A

$

1,575 

$

1,575 

Senior Notes

500 

500 

Revolving Credit Facility

275 

— 

Receivables Financing Facility

161 

108 

Total debt

$

2,511 

$

2,183 

Less: Unamortized debt issuance costs

(8)

(9)

Less: Unamortized discounts

(2)

(3)

Less: Current portion of debt

(141)

(79)

Total long-term debt

$

2,361 

$

2,092 

In the fourth quarter of 2025, we increased our borrowings under the Revolving Credit Facility to help fund the acquisition of Elo. See Note 12, Long-Term Debt in the Notes to Consolidated Financial Statements for further details related to the Company’s debt instruments.

Share Repurchases

During the year ended December 31, 2025, the Company repurchased 2,138,127 shares of common stock for approximately $587 million. Subsequent to the year ended December 31, 2025, the Company repurchased 401,649 shares of common stock for approximately $100 million through February 5, 2026. Additionally, on February 4, 2026, the Company’s Board of Directors authorized additional share repurchases of up to $1 billion. The level of the Company’s repurchases depends on a number of factors, including its financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors its management may deem relevant. The timing, volume, and nature of repurchases are also subject to market conditions, applicable securities laws and other factors and may be amended, suspended or discontinued at any time.

Future Cash Requirements

We believe that our Cash and cash equivalents, which totaled $125 million as of December 31, 2025, along with anticipated cash generation from operations and available borrowing capacity on debt and other financing facilities, will be sufficient to fund the Company’s cash requirements during the next 12 months and thereafter based on our current business plans.

Included in the Company’s Cash and cash equivalents are amounts held by foreign subsidiaries, which was $39 million and $52 million as of December 31, 2025 and 2024, respectively. We do not expect that Cash and cash equivalents held by foreign subsidiaries will need to be repatriated to fund the Company’s U.S. operations based on current cash requirements.

Our cash requirements during the next 12 months and thereafter include payments to satisfy the following obligations:

•Purchase obligations — The Company has a limited number of multi-year purchase commitments, primarily related to semiconductors and cloud services, which contain minimum purchase requirements and are non-cancellable. As of December 31, 2025, these multi-year commitments were approximately $101 million. This amount excludes routine purchase orders for goods and services, as well as amounts already reflected within Current liabilities on the Consolidated Balance Sheet. See Note 14, Accrued Liabilities, Commitments and Contingencies in the Notes to Consolidated Financial Statements for additional details.

•Debt obligations — We expect to make total payments of approximately $275 million associated with the Company’s debt facilities in 2026. This expected use of cash is based on the Company’s current borrowings and applicable interest rates and margins as of December 31, 2025, and includes principal and interest payments. In the ordinary course of business, the Company may decide to borrow additional amounts or repay principal earlier than contractually owed, which would affect future cash payments. See Note 12, Long-Term Debt in the Notes to Consolidated Financial Statements for further details related to the Company’s debt facilities.

•Leases obligations — We lease various manufacturing and repair facilities, distribution centers, research facilities, sales and administrative offices, equipment, and vehicles. As of December 31, 2025, the Company’s fixed lease commitments totaled $234 million, of which $49 million is payable in 2026. See Note 13, Leases in the Notes to Consolidated Financial Statements for further details related to the Company’s lease arrangements.

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In addition to the expected cash requirements described above, we may use cash to fund strategic acquisitions, investments, or repurchase common stock under our share repurchase program. In October 2025, we announced our commitment to repurchase $500 million of shares over the following twelve months, of which $403 million had already been repurchased as of February 5, 2026.

We also expect to spend approximately $85 million to $95 million on capital expenditures in 2026.

Critical Accounting Estimates

Management prepared the consolidated financial statements of the Company under accounting principles generally accepted in the U.S. The application of these principles requires the use of estimates which affect the amounts reported in our consolidated financial statements. While we believe that our estimates are reasonable based upon available information, actual results could differ substantially from those estimates. Note 2, Significant Accounting Policies in the Notes to Consolidated Financial Statements provides additional discussion of these items along with other significant accounting policies of the Company. The accounting estimates described below have been identified by Management as those that are most significant to our financial statements.

Income Taxes

We estimate a provision or benefit for income taxes and amounts to be settled or recovered in several tax jurisdictions globally. Our estimates are complex and involve significant judgments and interpretations of regulations. Resolution of income tax treatments in individual jurisdictions may not be known for several years after completion of a given year. We are also required to evaluate the realizability of our deferred tax assets on an ongoing basis, which requires estimation of our ability to generate future taxable income. In particular, our income tax provision or benefit is dependent on our ability to forecast future taxable income in the U.S., U.K., Singapore, and other jurisdictions. Significant judgments included in our forecasts include projecting future sales volumes and pricing, costs to manufacture and procure products and to deliver offerings, among other factors. Our estimate of the current year income tax provision includes the impact of the 2025 U.S. tax legislation.

Acquisitions

We account for acquired businesses using the acquisition method of accounting. This method requires that the purchase price be allocated to the identifiable assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the identifiable assets acquired and liabilities assumed is recorded as goodwill. The estimates used to determine the fair values of long-lived intangible assets can be complex and require judgment. We generally value intangible assets using income-based valuation methodologies, such as the excess earnings method, which require critical estimates that include, but are not limited to, future expected cash flows from revenues and the determination of discount rates.

Goodwill Impairment

Our goodwill impairment testing includes a comparison of the estimated fair value of each of our reporting units to its carrying value. Fair value determinations require judgment and can be sensitive to changes in underlying assumptions, estimates, as well as market factors. We estimate the fair value of reporting units using both income and market-based valuation approaches. Estimating the fair value of reporting units requires that we make assumptions and estimates including projections of revenue and income growth rates as well as cash flows; capital investments; competitive and customer trends; appropriate peer group selection; market-based discount rates and other market factors. Our annual impairment testing, most recently completed in the fourth quarter of 2025 both immediately before and after the Company’s segment and reporting unit change, continues to indicate that the fair values of each of our reporting units exceed their respective carrying values.

Revenue Recognition

We recognize revenues when we transfer control of promised offerings to our customers in an amount that reflects the consideration we expect to receive. The consideration that we expect to receive is estimated by reflecting reductions to our transaction price for product returns, rebates, and other incentives. These estimates are developed using the expected value that the Company anticipates receiving and are based on recent trends observed in similar transactions. Additionally, some of our contracts with customers contain multiple performance obligations, including various hardware, software, and/or services. For such contracts that contain multiple performance obligations, we allocate the estimated total transaction price to each performance obligation based on relative standalone selling prices (“SSP”). The determination of SSP is established at a regional level. SSP is based on observable prices in recent standalone transactions for the same or similar offerings, to the extent available, which is often applicable to tangible products and software licenses. Alternatively, in the absence of recent observable prices, the Company generally applies the expected cost-plus margin approach to professional services, repair and maintenance services, and solution offerings. There were no changes to our estimation processes for consideration received or SSP that materially affected revenues during the year.

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New Accounting Pronouncements

See Note 2, Significant Accounting Policies in the Notes to Consolidated Financial Statements regarding recent accounting pronouncements.

Non-GAAP Measures

The Company has provided reconciliations of the supplemental non-GAAP financial measures, as defined under the rules of the Securities and Exchange Commission, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP.

These supplemental non-GAAP financial measures – Consolidated Organic Net sales growth, CF Organic Net sales growth, AVA Organic Net sales growth (decline), and Free cash flow – are presented because our management evaluates our financial results both including and excluding the effects of business acquisitions and foreign currency translation, as applicable. Management believes that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of our business from period to period and trends in our historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with the GAAP financial measures presented.

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