What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-12 compared with 2025-02-13 · 322 added, 279 removed, 836 unchanged (42% of the section changed)

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

Accounting for Income Taxes

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of Elo Holdings, Inc.

- Valuation of Developed Technology and Customer Relationships

Description of the Matter As discussed in Note 5 to the consolidated financial statements, on September 30, 2025, the Company completed the acquisition of Elo Holdings, Inc.

(“Elo”) for total consideration of $1,303 million.

The acquisition was accounted for as a business combination, which requires, among other things, the assets acquired and the liabilities assumed to be recognized at fair value as of the acquisition date.

The Company recognized approximately $277 million of developed technology and $206 million of customer relationships intangible assets related to the Elo acquisition.

Auditing management’s accounting for the Elo acquisition required complex auditor judgment due to the significant estimation in determining the fair value of the developed technology and customer relationships intangible assets acquired.

The significant estimation was primarily due to the judgmental nature of the inputs to the valuation model, as well as the sensitivity of the assumptions to the fair value.

The significant assumptions used to estimate the fair value of the developed technology intangible asset included the forecasted revenue and related growth rate, EBITDA margin and discount rate and for the customer relationships intangible asset included the forecasted revenue and related growth rate, customer attrition rate and discount rate.

These significant assumptions are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our

Audit We obtained an understanding of the Company’s process for evaluating the valuation of acquired developed technology and customer relationships intangible assets.

We tested the design and operating effectiveness of the Company's controls over the estimation process supporting the measurement and recognition of the developed technology and customer relationships intangible assets.

To test the fair value of the developed technology and customer relationships intangible assets, our audit procedures included, among others, assessing the valuation methodologies, testing the significant assumptions described above and testing the completeness and accuracy of the underlying data used by the Company.

For example, we compared the significant assumptions to historical and current industry, market and economic trends where relevant.

We assessed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the developed technology and customer relationships intangible assets resulting from changes in the assumptions.

We also involved our valuation specialists to assist in evaluating the valuation methodology and certain significant assumptions such as the discount rate used in the fair value estimate.

Accounting for Uncertain Tax Positions

Description of the Matter As discussed in Note 16 of the financial statements, the Company earns a significant amount of its operating income across multiple jurisdictions.

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Auditing the application of taxation legislation to the Company’s business operations and structure is inherently complex and requires judgment.

These factors impact the Company’s evaluation and estimation of uncertain tax positions.

These factors impact the evaluation and estimation of certain of the Company’s uncertain tax positions.

How We Addressed the Matter in Our

Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s identification of and accounting for the tax impact of significant changes in the business.

This included controls over the Company’s tax technical assessment of cross-jurisdictional transactions.

Our audit procedures included, among others, involving our tax professionals in the significant operating jurisdictions to test the Company’s tax provision and the application of significant tax laws to cross-jurisdictional transactions.

We evaluated the Company’s transfer pricing used in intercompany transactions to assess whether there was alignment with the Company’s operations.

We assessed the completeness of significant tax matters identified and the adequacy of the accounting for any potential uncertainty.

Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the identification of and accounting for those uncertain tax positions.

This included controls over the Company’s tax technical assessment of the related cross-jurisdictional transactions and developments impacting the recognition and measurement of those uncertain tax positions.

Our audit procedures included, among others, involving our tax professionals to test the implications of developments impacting the recognition and measurement of certain of the Company’s uncertain tax positions, such as correspondence with tax authorities, tax law changes and changes in the business.

We tested the completeness and accuracy of the underlying data and calculations used in the measurement of those uncertain tax positions.

We also assessed the completeness of significant tax matters identified related to those uncertain tax positions and the adequacy of the accounting for any potential uncertainty.

/s/ Ernst & Young LLP

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Cash and cash equivalents $ 125 $ 901

Accounts receivable, net of allowances for doubtful accounts of $ 1 million each as of December 31, 2024 and 2023, respectively

Accounts receivable, net of allowances for doubtful accounts of $ 1 million each as of December 31, 2025 and 2024

Inventories, net 729 693

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General and administrative 433 381 334

Settlement and related costs — — 372

Amortization of intangible assets 114 104 104

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Operating income 700 742 481

Other income (loss), net:

Foreign exchange gain (loss) 5 ( 2 ) ( 3 )

Interest (expense) income, net ( 98 ) ( 133 ) 23

Other (loss) income, net:

Foreign exchange (loss) gain ( 18 ) 5 ( 2 )

Interest expense, net ( 108 ) ( 98 ) ( 133 )

Other expense, net ( 14 ) ( 14 ) ( 12 )

Total Other (expense) income, net ( 107 ) ( 147 ) 15

Total Other expense, net ( 140 ) ( 107 ) ( 147 )

Income before income tax 560 635 334

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Net income $ 419 $ 528 $ 296

Other comprehensive income (loss), net of tax:

Changes in unrealized gains (losses) on sales hedging 27 6 ( 29 )

Other comprehensive income, net of tax:

Changes in unrealized (losses) gains on sales hedging ( 26 ) 27 6

Foreign currency translation adjustment 52 ( 17 ) 6

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Repurchase of common stock ( 2,138,127 ) — — ( 587 ) — — ( 587 )

Excise tax on share repurchases — — — ( 5 ) — — ( 5 )

Net income — — — — 419 — 419

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Balance at December 31, 2025 49,592,946 $ 1 $ 814 $ ( 2,488 ) $ 5,279 $ ( 18 ) $ 3,588

Certain prior period amounts have been reclassified to conform with the current period presentation.

See accompanying Notes to Consolidated Financial Statements.

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Depreciation and amortization 185 172 176

Share-based compensation 89 55 88

Impairment of goodwill, intangibles and other assets 45 — —

Equity-settled share-based compensation 163 89 55

Deferred income taxes 21 ( 94 ) ( 36 )

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Settlement liability — ( 45 ) ( 180 )

Cash receipts (payments) on forward interest rate swaps 86 26 ( 6 )

Cash receipts on forward interest rate swaps — 86 26

Other operating activities 3 ( 1 ) 9

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Proceeds from sale (purchases) of short-term investments — 5 ( 4 )

Proceeds from the sale of long-term investments 1 — —

Purchases of long-term investments ( 5 ) ( 3 ) ( 1 )

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Effect of exchange rate changes on cash and cash equivalents, including restricted cash 1 ( 3 ) —

Net increase (decrease) in cash and cash equivalents, including restricted cash 763 21 ( 227 )

Net (decrease) increase in cash and cash equivalents, including restricted cash ( 776 ) 763 21

Cash and cash equivalents, including restricted cash, at beginning of period 901 138 117

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Income taxes paid $ 134 $ 124 $ 252

Interest paid inclusive of forward interest rate swaps $ 55 $ 111 $ 58

Certain prior period amounts included in Net cash provided by (used in) operating activities have been reclassified to conform with the current period presentation.

Interest paid, net of forward interest rate swaps $ 129 $ 55 $ 111

See accompanying Notes to Consolidated Financial Statements.

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Note 1 Description of Business and Basis of Presentation

Zebra Technologies Corporation and its subsidiaries (“Zebra” or the “Company”) is a global leader providing innovative Enterprise Asset Intelligence (“EAI”) offerings in the automatic identification and data capture offerings industry.

Zebra Technologies Corporation and its subsidiaries (“Zebra” or the “Company”) is a global leader focused on digitizing and automating operations and improving enterprise workflows on the frontline in the automatic identification and data capture offerings industry.

We design, manufacture, and sell a broad range of offerings, including cloud-based software subscriptions, that capture and move data.

We also provide a full range of services, including maintenance, technical support, repair, managed and professional services.

End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, public sector, and other industries.

End-users of our offerings include those in retail and e-commerce, manufacturing, transportation and logistics, healthcare, hospitality, public sector, and other industries.

We provide our offerings globally through a direct sales force and an extensive network of channel partners.

Effective in the fourth quarter, the Company’s reportable segments changed to Connected Frontline (“CF”) and Asset Visibility & Automation (“AVA”).

This change aligns with how we are operating our business to advance our strategy and the level of detailed financial information reviewed by our chief operating decision-maker going forward.

Also effective in the fourth quarter, our segment results exclude share-based compensation expense from the measurement of segment operating income.

Historical segment results have been recasted to conform with the current period presentation.

These changes did not have an impact on our results of operations, cash flows, or financial condition.

Refer to Part I, Item 1 of this document for additional information about our operating segments.

Note 2 Significant Accounting Policies

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Accounts Receivable

Accounts receivable consist primarily of amounts due to us from our customers, net of variable consideration and an allowance for doubtful accounts, in the normal course of business.

Accounts receivable consist primarily of amounts due to us from our customers, net of variable consideration and an allowance for doubtful accounts.

Collateral on trade accounts receivable is generally not required.

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Accounts are written off against the allowance account when they are determined to be no longer collectible.

Inventories are stated at the lower of a moving-average cost (which approximates cost on a first-in, first-out basis) and net realizable value.

Manufactured inventory cost includes materials, labor, and manufacturing overhead.

Inventories are stated at the lower of cost and net realizable value.

Cost is generally determined based on moving-average cost (which approximates cost on a first-in, first-out basis).

Manufactured inventory costs include materials, labor, and manufacturing overhead.

Purchased inventory cost also includes internal purchasing overhead costs.

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Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation.

Depreciation is computed primarily using the straight-line method over the estimated useful lives of the various classes of property, plant and equipment, which are thirty

years for buildings and range from three to ten years for all other asset categories.

Property, plant and equipment is stated at cost net of accumulated depreciation.

Depreciation is computed primarily using the straight-line method over the estimated useful lives of the various classes of property, plant and equipment, which are thirty years for buildings and range from three to ten years for all other asset categories.

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or ten years .

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The initial measurement of ROU assets and lease liabilities is based on the present value of future lease payments over the lease term as of the commencement date.

In determining future lease payments, the Company has elected not to separate lease and non-lease components.

In determining future lease payments, the Company has elected to not separate lease and non-lease components.

As the Company’s lease arrangements do not provide an implicit interest rate, we apply the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of future lease payments.

Relevant information used in determining the Company’s incremental borrowing rate includes the duration of the lease, the transaction currency of the lease, and the Company’s credit risk relative to risk-free market rates.

The Company’s ROU assets also include any initial direct costs incurred and exclude lease incentives.

The Company’s ROU assets are measured including any initial direct costs incurred, net of lease incentives.

The Company’s lease agreements do not contain any significant residual value guarantees or restrictive covenants.

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The Company accounts for income taxes under the liability method in accordance with Accounting Standards Codification (“ASC”) 740 Topic, Income Taxes .

Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes.

Accordingly, deferred income taxes are provided for the future tax consequences attributable to differences between the carrying amount of assets and liabilities for financial reporting and income tax purposes.

Deferred tax assets and liabilities are measured using tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

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If the carrying value of a reporting unit exceeds its estimated fair value, goodwill would be considered to be impaired and reduced to its implied fair value.

We estimate the fair value of reporting units by using a weighted combination of the income and market approaches.

We estimate the fair value of reporting units using a weighted combination of the income and market approaches.

The income approach requires management to estimate projected future operating and cash flow results, economic projections, and discount rates.

The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry group.

We most recently performed our annual goodwill impairment testing in the fourth quarter of 2024 which did not result in any impairment.

See Note 6, Goodwill and Other Intangibles for additional information.

The market approach estimates fair value using comparable marketplace fair value data from a comparable industry group.

As discussed in Note 1, Description of Business and Basis of Presentation , the Company changed its operating segments effective beginning in the fourth quarter of 2025.

The Company completed its annual goodwill impairment testing in the fourth quarter of 2025 and, also completed testing both immediately before and after its segment change, none of which resulted in an

impairment of goodwill.

See Note 6, Goodwill and Other Intangibles for additional information related to the allocation of goodwill to the new operating segments.

Other Intangible Assets

Other intangible assets consist primarily of technology and patent rights, customer and other relationships, and trade names.

Other intangible assets consist primarily of technology and patent rights, customer relationships, and trade names.

These assets, which are generally acquired through business combinations, are recorded at fair value upon acquisition and amortized on a straight-line basis over the asset’s useful life which typically ranges from two to eleven years .

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Our service offerings include repair and maintenance service contracts, as well as professional services such as installation, integration and provisioning that typically occur in the early stages of a project.

The average life of repair and maintenance service contracts is approximately three years.

The average life of an initial repair and maintenance service contract is approximately three years.

One year renewals are available thereafter.

Professional service arrangements range in duration from a day to several weeks or months.

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Thermal printheads are warrantied from six months to one year , depending on the product, and battery-based products, such as location tags, are covered by a 90-day warranty.

Point-of-sale solutions, self-serve kiosks, and interactive touchscreen displays are warrantied from 18 months to five years , depending on the product.

A provision for warranty expense is adjusted quarterly based on historical and expected warranty experience.

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In accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”) , we recognize derivative instruments and hedging activities as either assets or liabilities on the Consolidated Balance Sheets and measure them at fair value.

Accounting for the

gains and losses on our derivatives resulting from changes in fair value is dependent on the use of the derivative and whether it is designated and qualifies for hedge accounting.

Accounting for the gains and losses on our derivatives resulting from changes in fair value is dependent on the use of the derivative and whether it is designated and qualifies for hedge accounting.

The Company utilizes foreign currency forwards to hedge certain foreign currency exposures.

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The Company has share-based compensation plans and an employee stock purchase plan under which shares of Class A Common Stock are available for future grant and purchase.

The Company recognizes compensation costs over the vesting period of awards, which is typically three years , net of estimated forfeitures.

The Company recognizes compensation costs over the required service period of awards, which is typically three years ;

subject to certain employment conditions.

These costs are recognized net of estimated forfeitures.

Compensation costs associated with awards with graded vesting terms are recognized on a straight-line basis.

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Dollars using the period-end exchange rate, and statement of earnings items are translated using the average exchange rate for the period.

The resulting translation gains or losses are recorded in Stockholders’ equity as a cumulative translation adjustment, which is a component of AOCI within the Consolidated Balance Sheets.

The resulting translation gains or losses are recorded in Stockholders’ equity as a cumulative translation adjustment, which is a component of accumulated comprehensive loss (“AOCI”) within the Consolidated Balance Sheets.

We account for acquired businesses using the acquisition method of accounting which requires that the purchase price be allocated to the identifiable assets acquired and liabilities assumed, generally measured at their estimated fair values.

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In the current year, the Company adopted Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires retrospective disclosure of significant segment expenses and other segment items on an annual and interim basis.

Additionally, it requires disclosure of the title and position of the Chief Operating Decision Maker (“CODM”).

This ASU did not have an impact on our results of operations, cash flows, or financial condition.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires an annual tabular effective tax rate reconciliation disclosure including information for specified categories and jurisdiction levels, as well as disclosure of income taxes paid, net of refunds received, disaggregated by federal, state/local, and significant foreign jurisdiction.

This ASU will be effective for the Company’s fiscal December 31, 2025 year-end, with early adoption permitted.

We are assessing the impact of this guidance on our disclosures;

it will not have an impact on our results of operations, cash flows, or financial condition.

This ASU was applied retrospectively and did not have an impact on our results of operations, cash flows, or financial condition.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain categories of expenses that are included within expense captions presented on the Consolidated Statements of Operations on an annual and interim basis.

This ASU will be effective for the Company’s fiscal

December 31, 2027 year-end and interim periods thereafter, with early adoption permitted.

This ASU will be effective for the Company’s fiscal December 31, 2027 year-end and interim periods thereafter, with early adoption permitted.

We are assessing the impact of this guidance on our disclosures;

it will not have an impact on our results of operations, cash flows, or financial condition.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to assume that current conditions as of the balance sheet date will remain unchanged while estimating the expected credit losses on accounts receivables and contract assets.

This ASU will be effective for the Company beginning in 2026.

We have assessed the impact of this ASU and do not expect it to have a significant impact to the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which amends the criteria for capitalizing internal-use software development costs.

This ASU will be effective for the Company beginning in 2028, with early adoption permitted.

While we are currently assessing the impact of this ASU, we do not expect it to have a significant impact to the Company’s consolidated financial statements.

Note 3 Revenues

The Company recognizes revenue to depict the transfer of goods, solutions or services to a customer at an amount that reflects the consideration which it expects to receive for providing those goods, solutions or services.

The Company recognizes revenue to depict the transfer of goods, services or software solutions to a customer at an amount that reflects the consideration which it expects to receive.

To determine total expected consideration, the Company estimates elements of variable consideration, which primarily include product rights of return, rebates, and other incentives.

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Revenues, inclusive of variable consideration, are recognized to the extent it is probable that a significant reversal in cumulative revenues recognized will not occur in future periods.

We enter into contracts that may include combinations of tangible products, services, solutions and software offerings, which are generally capable of being distinct and accounted for as separate performance obligations.

We enter into contracts that may include combinations of tangible products, services, and software solutions, which are generally capable of being distinct and accounted for as separate performance obligations.

We evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract has more than one performance obligation.

This evaluation requires judgment, and the decision to combine a group of contracts or separate the combined or single contract into multiple distinct performance obligations may impact the amount of revenue recorded in a reporting period.

We deem performance obligations to be distinct if the customer can benefit from the product or service on its own or together with readily available resources (“capable of being distinct”) and if the transfer of products, solutions or services is separately identifiable from other promises in the contract (“distinct within the context of the contract”).

We deem performance obligations to be distinct if the customer can benefit from the product or service on its own or together with readily available resources (“capable of being distinct”) and if the transfer of products, services, or software solutions is separately identifiable from other promises in the contract (“distinct within the context of the contract”).

For contract arrangements that include multiple performance obligations, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices for each performance obligation.

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and 3) whether the Company’s performance does not create an asset with an alternative use to the Company, while the Company has an enforceable right to payment for its performance completed to date.

Revenues for tangible products are generally recognized upon shipment, whereas revenues for services and solution offerings are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met.

Revenues for tangible products are generally recognized upon shipment, whereas revenues for services are generally recognized over time by using an output or time-based method, assuming all other criteria for revenue recognition have been met.

Revenues for software are recognized either upon delivery or over time using a time-based method, depending on how control is transferred to the customer.

In cases where a bundle of products, services, solutions and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control.

In cases where a bundle of products, services, and/or software are delivered to the customer, judgment is required to select the method of progress which best reflects the transfer of control.

Disaggregation of Revenue

The following table presents our Net sales disaggregated by product category for each of our segments, AIT and EVM, for the years ended December 31, 2024, 2023 and 2022 (in millions):

The following table presents our Net sales disaggregated by product category for each of our segments, CF and AVA, for the years ended December 31, 2025, 2024 and 2023 (in millions):

Year Ended December 31, 2025

Segment Tangible Products Services and Software Total

AIT $ 1,532 $ 115 $ 1,647

EVM 2,484 850 3,334

CF $ 2,156 $ 804 $ 2,960

AVA 2,262 174 2,436

Total $ 4,418 $ 978 $ 5,396

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Segment Tangible Products Services and Software Total

AIT $ 1,537 $ 114 $ 1,651

EVM 2,128 805 2,933

CF $ 1,916 $ 798 $ 2,714

AVA 2,100 167 2,267

Total $ 4,016 $ 965 $ 4,981

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Segment Tangible Products Services and Software Total

AIT $ 1,728 $ 109 $ 1,837

EVM 3,187 757 3,944

CF $ 1,522 $ 758 $ 2,280

AVA 2,143 161 2,304

Total $ 3,665 $ 919 $ 4,584

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The total contract asset balances were $ 12 million and $ 11 million as of December 31, 2025 and 2024, respectively.

These contract assets result from timing differences between billing and satisfying performance obligations, as well as the impact from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations.

These contract assets result from timing differences between billing and satisfying performance obligations, inclusive of any impacts from the allocation of the transaction price among performance obligations for contracts that include multiple performance obligations.

Contract assets are evaluated for impairment, and no impairment losses have been recognized during the years ended December 31, 2025, 2024 and 2023, respectively.

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The Company recognized $ 441 million, $ 455 million and $ 432 million in revenue that was previously included in the beginning balance of deferred revenue during the years ended December 31, 2025, 2024 and 2023, respectively.

Our payment terms vary by the type and location of our customer and the products, solutions or services offered.

Our payment terms vary by the type and location of our customer and the products, services, or software solutions offered.

The time between invoicing and when payment is due is not significant.

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Amortization expense, which is recorded in Selling and marketing expense on the Consolidated Statements of Operations, was $ 30 million, $ 29 million and $ 26 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Incremental costs of obtaining a contract are expensed as incurred if the amortization period would otherwise be one year or less.

Incremental costs of obtaining a contract are expensed as incurred if the amortization period would be less than one year.

Note 4 Inventories

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Note 5 Business Acquisitions

On June 3, 2022, the Company acquired Matrox Electronic Systems Ltd.

(“Matrox”), a developer of advanced machine vision components and software.

Through its acquisition of Matrox, the Company significantly expanded its machine vision products and software offerings.

On September 30, 2025, the Company acquired all of the equity interests in Elo Holdings, Inc.

(“Elo”), an innovator of solutions that engage customers, enhance self-service, and accelerate automation across a wide range of end markets.

Through its acquisition, the Company expanded its portfolio of self-service and consumer-facing workflow offerings.

The acquisition was accounted for under the acquisition method of accounting for business combinations.

The Company’s final purchase consideration was $ 881 million comprised of cash paid, net of Matrox’s cash on-hand.

The Company utilized estimated fair values as of the acquisition date to allocate the total purchase consideration to the identifiable assets acquired and liabilities assumed.

The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for customer relationships as well as the relief from royalty method for technology and patent intangible assets.

The purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):

The Company’s purchase consideration was $ 1,303 million comprised of cash paid, net of Elo’s cash on-hand.

The Company utilized estimated fair values as of the acquisition date to allocate the purchase consideration to the identifiable assets acquired and liabilities assumed.

The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for technology, the distributor method for customer relationships and the relief from royalty method for trade names.

While we believe these estimates provide a reasonable basis to record the net assets acquired, the purchase price allocation is considered preliminary and subject to adjustment during the measurement period, which is up to one year from the acquisition date.

The primary fair value estimates still considered preliminary as of December 31, 2025 include intangible assets and income tax-related items.

The preliminary purchase price allocation to assets acquired and liabilities assumed was as follows (in millions):

Identifiable intangible assets $ 501

Accounts receivable 59

Other assets acquired 41

Deferred tax liabilities ( 62 )

Accounts payable ( 48 )

Other liabilities assumed ( 60 )

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Total purchase price $ 1,303

The $ 639 million of goodwill, which is non-deductible for tax purposes, has been allocated to the EVM segment and principally relates to the planned global expansion and integration of Matrox into the Company’s machine vision offerings.

The $ 776 million of goodwill, which is non-deductible for tax purposes, has been allocated to the CF segment and principally relates to the planned global expansion and integration of Elo into the Company’s self-service and consumer-facing workflow offerings.

The purchase price allocation to identifiable intangible assets acquired was as follows:

Fair Value (in millions) Useful Life (in years)

Customer and other relationships $ 232 11

Technology and patents 63 7

Trade names 2 2

Technology $ 277 7

Customer relationships 206 10

Trade name 18 3

Total identifiable intangible assets $ 501

The operating results have been included in the Company’s Consolidated Balance Sheets and Statements of Operations beginning on the acquisition date.

The Company has not included unaudited pro forma results for the year preceding the acquisition, as doing so would not yield materially different results.

Since the September 30, 2025 acquisition, Elo contributed approximately $ 96 million of Zebra’s consolidated net sales.

The unaudited pro forma net sales of Zebra, assuming that the Elo acquisition was completed on January 1, 2024, were $ 5,711 million and $ 5,350 million during the fiscal years ended December 31, 2025 and 2024, respectively.

Such unaudited pro forma financial information may not be indicative of the results that would have been obtained had the Elo acquisition actually occurred at the beginning of 2024, nor is it intended to be a projection of future results.

On February 28, 2025, the Company acquired all of the equity interests in Photoneo, a leading developer and manufacturer of 3D machine vision offerings.

The acquisition was accounted for under the acquisition method of accounting for business combinations.

The Company’s cash purchase consideration of $ 62 million was primarily allocated to technology-related intangible assets of $ 17 million, customer relationship assets of $ 6 million, and goodwill of $ 34 million.

The technology-related intangible assets and customer relationship assets each have estimated useful lives of 7 years.

The Company utilized estimated fair values as of the acquisition date to allocate the total purchase consideration to the identifiable assets acquired and liabilities assumed.

The fair value of the net assets acquired was based on several estimates and assumptions, as well as customary valuation techniques, primarily the excess earnings method for technology and the distributor method for customer relationships.

The $ 34 million of goodwill, which is deductible for tax purposes, has been allocated to the AVA segment and principally relates to the expansion of our machine vision offerings across several industries.

Acquisition and integration costs

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These costs are included within Acquisition and integration costs on the Consolidated Statements of Operations and are primarily related to third-party transaction and advisory fees, and integration activities associated with our business acquisitions .

On December 27, 2024, the Company entered into a definitive agreement to acquire Photoneo, a leading developer and manufacturer of 3D machine vision solutions.

The purchase price of approximately € 60 million is expected to be funded with cash on hand.

The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2025.

The acquired business will become part of the EVM segment.

Note 6 Goodwill and Other Intangibles

Changes in the net carrying value of goodwill by segment were as follows (in millions):

AIT EVM Total

Goodwill as of December 31, 2024 $ 2,085 $ 1,806 $ 3,891

Elo acquisition 776 — 776

Photoneo acquisition — 34 34

Foreign exchange impact 3 23 26

Goodwill as of December 31, 2025 $ 2,864 $ 1,863 $ 4,727

See Note 5, Business Acquisitions for further details related to the Company’s acquisitions and purchase price allocation adjustments.

The Company’s goodwill balance consists of four reporting units.

The Company completed its annual goodwill impairment testing during the fourth quarter of 2024 utilizing a quantitative approach.

The estimated fair value of each reporting unit exceeded its carrying value by at least 150 %.

As discussed in Note 1, Description of Business and Basis of Presentation , the Company changed its operating segments effective in the fourth quarter of 2025.

Existing goodwill was reallocated to the new reporting units on a relative fair value basis.

No events occurred during the fiscal years ended 2025, 2024 or 2023 that indicated it was more likely than not that our goodwill was impaired.

See Note 5, Business Acquisitions for further details related to the Company’s acquisitions and purchase price allocations.

Other Intangibles, net

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Gross Carrying Amount Accumulated

Amortization Net Gross Carrying Amount Accumulated

Amortization Net

Amortization & Impairment Net Gross Carrying Amount Accumulated

Amortization & Impairment Net

Amortized intangible assets

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Total $ 2,412 $ ( 1,603 ) $ 809 $ 1,871 $ ( 1,449 ) $ 422

Amortization expense was $ 104 million, $ 104 million and $ 136 million for fiscal years ended 2024, 2023 and 2022, respectively.

Amortization expense was $ 114 million, $ 104 million and $ 104 million for years ended December 31, 2025, 2024 and 2023, respectively.

In relation to the Company’s decision to dispose of or exit its robotics automation solutions business, we recognized an impairment loss of $ 34 million on our technology and patent-related intangible assets during the year ended December 31, 2025.

See Note 9, Exit and Restructuring Costs for additional information.

Estimated future intangible asset amortization expense is as follows (in millions):

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Note 8 Investments

The carrying value of the Company’s long-term investments was $ 110 million and $ 113 million as of December 31, 2024 and 2023, respectively, which are included in Other long-term assets on the Consolidated Balances Sheets.

The Company paid $ 3 million, $ 1 million and $ 12 million for the purchases of long-term investments during the years ended December 31, 2024, 2023 and 2022, respectively.

Net gains and losses related to the Company’s long-term investments are included within Other expense, net on the Consolidated Statements of Operations.

The Company recognized net losses of $ 6 million during the year ended December 31, 2024.

Net gains and losses were no t significant for the years ended December 31, 2023 and 2022.

A rollforward of the Company’s long-term investments is as follows (in millions):

Year Ended December 31,

2025 2024 2023

Balance at the beginning of the period $ 110 $ 113 $ 113

Loss on long-term investments ( 11 ) ( 6 ) ( 1 )

Purchases of long-term investments 5 3 1

Proceeds from sale of long-term investments ( 1 ) — —

Balance at the end of the period $ 103 $ 110 $ 113

The carrying value of the Company’s long-term investments are included in Other long-term assets on the Consolidated Balance Sheets.

Net gains and losses are included within Other expense, net on the Consolidated Statements of Operations.

Note 9 Exit and Restructuring Costs

Total charges associated with the 2022 Productivity Plan, which was completed in the third quarter of 2024, and the U.S.

voluntary retirement plan, which was completed in 2023, were $ 127 million, including $ 17 million, $ 98 million and $ 12 million for the years ended December 31, 2024, 2023 and 2022 respectively.

The costs of these plans are classified within Exit and restructuring on the Consolidated Statements of Operations.

The Company’s remaining payment obligations of $ 4 million, are reflected within Accrued liabilities on the Consolidated Balance Sheets.

The rollforward of the liability associated with Exit and restructuring activities is:

Balance as of December 31, 2023 $ 22

Exit and restructuring charges 17

In the fourth quarter of 2025, the Company decided to dispose of or exit its robotics automation solutions business in an effort to better align resources with its strategic priorities.

In relation to this decision, the Company incurred approximately $ 55 million in total one-time costs during the year ended December 31, 2025, principally consisting of long-lived asset impairments of $ 45 million, including an intangible asset impairment of $ 34 million, an ROU 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 charges.

In the fourth quarter of 2025, the Company committed to organizational design changes intended to better meet its strategic objectives and improve cost efficiency (referred to as the “2025 Productivity Plan”), principally within the Europe, Middle East, and Africa (“EMEA”) and North America regions.

Exit and restructuring charges associated with the 2025 Productivity Plan, which primarily consisted of employee severance and benefits, were $ 21 million during the year ended December 31, 2025.

The one-time costs associated with the planned disposal or exit of our robotics automation solutions business and the 2025 Productivity Plan are classified within Exit and restructuring on the Consolidated Statements of Operations.

The Company’s outstanding payment obligations of $ 23 million associated with the above actions are reflected within Accrued liabilities on the Consolidated Balance Sheets.

A rollforward of the liability associated with the Company’s Exit and restructuring activities is as follows (in millions):

Year Ended December 31,

2025 2024 2023

Balance as of the beginning of the year $ 4 $ 22 $ 9

Exit and restructuring charges, excluding long-lived asset impairments and working capital charges 27 17 98

Non-cash utilization — ( 3 ) ( 13 )

Cash payments ( 8 ) ( 32 ) ( 72 )

Balance as of December 31, 2024 $ 4

The Company incurred Exit and restructuring costs, under previously announced programs of $ 2 million for the year ended December 31, 2022.

Balance as of the end of the year $ 23 $ 4 $ 22

Exit and restructuring costs incurred during the years ended December 31, 2024 and 2023 related to the Company’s 2022 Productivity Plan and 2023 voluntary retirement plan.

Note 10 Fair Value Measurements

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels:

ASC Topic 820 established a fair

value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into the following three broad levels:

Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

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Level 1 Level 2 Level 3 Total

Foreign exchange contracts (1)

$ 1 $ 30 $ — $ 31

Investments related to the deferred compensation plan $ 48 $ — $ — $ 48

Total Assets at fair value $ 48 $ — $ — $ 48

Foreign exchange contracts (1)

$ 2 $ 5 $ — $ 7

Liabilities related to the deferred compensation plan 48 — — 48

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Level 1 Level 2 Level 3 Total

Forward interest rate swap contracts (2)

Foreign exchange contracts (1)

$ 1 $ 30 $ — $ 31

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Total Assets at fair value $ 42 $ 30 $ — $ 72

Foreign exchange contracts (1)

$ 1 $ 6 $ — $ 7

Forward interest rate swap contracts (2)

Liabilities related to the deferred compensation plan 41 — — 41

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(1) The fair value of the foreign exchange contracts is calculated as follows:

• Fair value of forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points.

• Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points unless the hedge has been traded but not settled at period-end (Level 2).

If this is the case, the fair value is calculated at the rate at which the hedge is being settled (Level 1).

(2) The fair value of forward interest rate swaps is based upon a valuation model that uses relevant observable market inputs at the quoted intervals, such as forward yield curves, and is adjusted for the Company’s credit risk and the interest rate swap terms.

• Fair value of forward contracts associated with forecasted sales hedges is calculated using the period-end exchange rate adjusted for current forward points (Level 2).

• Fair value of hedges against net assets denominated in foreign currencies is calculated at the period-end exchange rate adjusted for current forward points (Level 2).

Except, if the hedge has matured but not yet settled as of period end, then the fair value is calculated at the amount at which the hedge is being settled (Level 1).

Note 11 Derivative Instruments

In the normal course of business, the Company is exposed to global market risks, including the effects of changes in foreign currency exchange rates and interest rates.

The Company uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The Company commonly uses derivative instruments to manage its exposure to such risks and may elect to designate certain derivatives as hedging instruments under ASC 815.

The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions.

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Foreign exchange contracts Prepaid expenses and other current assets $ — $ 1

Forward interest rate swaps Prepaid expenses and other current assets — 34

Forward interest rate swaps Other long-term assets — 49

Foreign exchange contracts Accrued liabilities ( 2 ) —

Forward interest rate swaps Accrued liabilities — ( 12 )

Forward interest rate swaps Other long-term liabilities — ( 16 )

Total derivative instruments not designated as hedges $ ( 2 ) $ 1

Total net derivative asset $ 31 $ 48

Total net derivative (liability) asset $ ( 7 ) $ 31

The following table presents the net gains (losses) from changes in fair values of derivatives that are not designated as hedges (in millions):

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Derivative instruments not designated as hedges:

Foreign exchange contracts Foreign exchange gain (loss) $ 4 $ ( 4 ) $ 2

Forward interest rate swaps Interest (expense) income, net 31 9 83

Total net gain recognized in income $ 35 $ 5 $ 85

Foreign exchange contracts Foreign exchange (loss) gain $ ( 24 ) $ 4 $ ( 4 )

Forward interest rate swaps Interest expense, net — 31 9

Total net (loss) gain recognized in income $ ( 24 ) $ 35 $ 5

Activities related to derivative instruments are reflected within Net cash provided by (used in) operating activities on the Consolidated Statements of Cash Flows.

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We present the assets and liabilities of our derivative financial instruments, for which we have net settlement agreements in place, on a net basis on the Consolidated Balance Sheets.

If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions would have not been significant as of December 31, 2024 and December 31, 2023, respectively.

If the derivative financial instruments had been presented gross on the Consolidated Balance Sheets, the asset and liability positions would not have been significantly different as of December 31, 2025 or December 31, 2024.

Foreign Currency Exchange Risk Management

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The Company designates these derivative contracts as cash flow hedges.

Unrealized gains and losses on these contracts are deferred in Accumulated other comprehensive income (loss) (“AOCI”) on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized.

Unrealized gains and losses on these contracts are deferred in AOCI on the Consolidated Balance Sheets until the contract is settled and the hedged sale is realized.

The realized gain or loss is then recorded as an adjustment to Net sales on the Consolidated Statements of Operations.

Realized amounts reclassified to Net sales were $ 11 million of gains for the year ended December 31, 2024, $ 15 million of losses for the year ended December 31, 2023 and $ 87 million of gains for the year ended December 31, 2022.

Realized amounts reclassified to Net sales were $ 39 million of losses for the year ended December 31, 2025, $ 11 million of gains for the year ended December 31, 2024 and $ 15 million of losses for the year ended December 31, 2023.

As of December 31, 2025 and 2024, the notional amounts of the Company’s foreign exchange cash flow hedges were € 582 million and € 592 million, respectively.

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Dollar zł 71 zł 53

Net fair value of assets (liabilities) of outstanding contracts $ 1 $ ( 1 )

Net fair value of (liabilities) assets of outstanding contracts $ ( 2 ) $ 1

Interest Rate Risk Management

The Company is exposed to market risk associated with interest rate payments on its borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facilities, which bear interest at variable rates plus applicable margins.

The Company manages its exposure to changes in interest rates by issuing both fixed and variable rate borrowings as well as periodically utilizing interest rate swaps to economically hedge interest rate exp osure based on current and projected market conditions.

In the second quarter of 2024, the Company terminated all of its interest rate swap agreements, none of which were designated as hedges, resulting in a $ 77 million cash receipt that is classified within Cash flows from operating activities on the Consolidated Statements of Cash Flows.

The Company is exposed to market risk associated with interest rate payments on its borrowings under a term loan (“Term Loan A”), Revolving Credit Facility, and Receivables Financing Facility, which bear interest at variable rates plus applicable margins.

The Company manages its exposure to changes in interest rates on variable rate borrowings by periodically utilizing interest rate swaps to economically hedge interest rate exp osure based on current and projected market conditions.

The Company had no active interest rate swap agreements during the year ended December 31, 2025.

In 2024, the Company terminated all of its interest rate swap agreements, none of which were designated as hedges, resulting in a $ 77 million cash receipt that is classified within Cash flows from operating activities on the Consolidated Statements of Cash Flows.

Total cash receipts for the fiscal year ended 2024 were $ 86 million.

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Revolving Credit Facility 275 —

Receivables Financing Facilities 108 129

Receivables Financing Facility 161 108

Total debt $ 2,511 $ 2,183

Debt issuance costs ( 9 ) ( 2 )

Unamortized debt issuance costs ( 8 ) ( 9 )

Unamortized discounts ( 2 ) ( 3 )

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All borrowings as of December 31, 2025 were denominated in U.S.

The estimated fair value of the Company’s debt approximated $ 2.2 billion as of both December 31, 2024 and 2023, respectively.

The estimated fair value of the Company’s debt approximated $ 2.5 billion and $ 2.2 billion as of December 31, 2025 and 2024, respectively.

These fair value amounts, developed based on inputs classified as Level 2 within the fair value hierarchy, represent the estimated value at which the Company’s lenders could trade its debt within the financial markets and do not represent the settlement value of these liabilities to the Company.

The fair value of debt will continue to vary each period based on a number of factors, including fluctuations in market interest rates as well as changes to the Company’s credit ratings.

The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in the second quarter of 2026 and the majority due upon maturity in 2027.

The Company has and may make prepayments in whole or in part, without premium or penalty;

and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.

The principal on Term Loan A is due in quarterly installments, with the next quarterly installment due in the first quarter of 2026 and the majority due upon maturity on May 25, 2027.

The Company has made and may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.

As of December 31, 2025, the Term Loan A interest rate was 4.97 %.

Interest payments are made monthly and are subject to variable rates plus an applicable margin.

In the second quarter of 2024, the Company completed a private offering of $ 500 million senior unsecured notes (the “Senior Notes”) with a 6.5 % fixed interest rate.

The net proceeds of the issuance, after deducting debt issuance costs which were deferred, were approximately $ 492 million.

The Senior Notes mature on June 1, 2032, and interest is payable semi-annually in arrears in June and December of each year, commencing on December 1, 2024.

The Company may make prepayments in whole or in part, without premium or penalty, and would be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.

The Company’s senior unsecured notes (the “Senior Notes”) have a 6.5 % fixed interest rate.

The Senior Notes mature on June 1, 2032, and interest is payable semi-annually in arrears in June and December of each year.

The Company has the option to or could be required to prepay certain outstanding amounts in the event of certain circumstances or transactions.

The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by certain of Zebra’s existing and future subsidiaries.

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The Company has a Revolving Credit Facility that is available for working capital and other general business purposes, including letters of credit.

As of December 31, 2024, the Company had letters of credit totaling $ 10 million, which reduced funds available for borrowings under the Revolving Credit Facility from $ 1,500 million to $ 1,490 million.

As of December 31, 2025, the Company had letters of credit totaling $ 10 million, which reduced remaining funds available for borrowings under the Revolving Credit Facility to $ 1,215 million.

As of December 31, 2025, the Revolving Credit Facility had an average interest rate of 4.79 %.

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The Company has accounted for transactions under this facility as secured borrowings.

During the first quarter of 2024, the Company amended this facility to extend the maturity to March 19, 2027 but otherwise did not substantially change the terms of the facility.

As of December 31, 2024, the Company’s Consolidated Balance Sheets included $ 638 million of gross receivables that were pledged under the facility.

The receivables financing facility matures on March 19, 2027.

As of December 31, 2025, the Company’s Consolidated Balance Sheets included $ 738 million of gross trade receivables that were pledged under the facility.

As of December 31, 2025, $ 161 million had been borrowed, of which $ 53 million was classified as current.

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The Company’s borrowings described above include terms and conditions that limit the incurrence of additional borrowings and require that certain financial ratios be maintained at designated levels.

The Company periodically uses interest rate swaps to manage the interest rate risk associated with its debt.

See Note 11, Derivative Instruments for further information.

As of December 31, 2025, the Company was in compliance with all debt covenants.

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Net non-cash increases to ROU assets and lease liabilities $ 28 $ 37 $ 54

ROU asset impairments

Variable lease expenses incurred were not included in the measurement of the Company’s ROU assets and lease liabilities.

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Cash payments for leases are included within Net cash provided by (used in) operating activities on the Consolidated Statements of Cash Flows.

ROU assets obtained in exchange for lease obligations include new lease arrangements entered into by the Company as well as contract modifications that extend lease terms and/or provide us additional rights, changes in assessments that render it reasonably certain that lease renewal options will be exercised based on facts and circumstances that arose during the period, as well as lease arrangements obtained through acquisitions.

Reductions of the Company’s ROU assets and lease liabilities generally relate to modifications to lease agreements that result in a reduction to future minimum lease payments, as well as changes in assessments that render it no longer reasonably certain that lease renewal options will be exercised based on facts and circumstances that arose during the period.

The Company’s reduction of ROU assets and lease liabilities during 2024, 2023 and 2022 were not significant.

The weighted average remaining term of the Company’s leases was approximately 6 years each as of December 31, 2024, 2023 and 2022.

The weighted average discount rate used to measure the ROU assets and lease liabilities was approximately 6 % as of both December 31, 2024 and December 31, 2023, respectively, and 5 % as of December 31, 2022.

ROU assets obtained in exchange for lease obligations include new lease arrangements entered into by the Company, contract modifications that extend lease terms and/or provide us additional rights, changes in assessments that render it reasonably certain that lease renewal options will be exercised based on facts and circumstances that arose during the period, as well as lease arrangements obtained through acquisitions.

Reductions of the Company’s ROU assets and lease liabilities generally relate to contract modifications to lease agreements that result in a reduction to future minimum lease payments, as well as changes in assessments that render it no longer reasonably certain that lease renewal options will be exercised based on facts and circumstances that arose during the period.

In relation to the Company’s decision to dispose of or exit its robotics automation solutions business, we recognized an impairment loss of $ 8 million on an ROU asset during the year ended December 31, 2025.

See Note 9, Exit and Restructuring Costs for additional information related to the financial statement impacts of these actions.

The weighted average remaining term of the Company’s leases was approximately 5 years as of December 31, 2025 and 6 years each as of December 31, 2024 and 2023.

The weighted average discount rate used to measure the ROU assets and lease liabilities was approximately 6 % each as of December 31, 2025, 2024 and 2023.

Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows (in millions):

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Incentive compensation $ 150 $ 174

Unremitted cash collections due to banks on factored accounts receivable 84 51

Payroll and benefits 75 76

Customer rebates 63 56

Unremitted cash collections due to banks on factored accounts receivable 51 112

Current portion of lease liabilities 38 36

Warranty 26 27

Current portion of warranty liabilities 28 26

Freight and duty 26 12

Exit and restructuring 23 4

Settlement — 45

Accrued liabilities $ 558 $ 503

The following table is a summary of the Company’s accrued warranty obligations (in millions):

The following table is a summary of the Company’s warranty obligations (in millions):

Year Ended December 31,

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Balance at the beginning of the year $ 26 $ 27 $ 26

Acquisitions 2 — —

Warranty expense 39 28 29

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Balance at the end of the year $ 34 $ 26 $ 27

The current and long-term portions of our warranty obligations, detailed in the table above, are included on the Consolidated Balance Sheets within Accrued liabilities and Other long-term liabilities, respectively.

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.

Commitments under these multi-year contracts, which exclude routine purchase orders for goods and services, are as follows (in millions):

We record a liability for non-cancellable purchase commitments for quantities in excess of our forecasted demand consistent with the assessment of net realizable value of our inventory, which is included within Current liabilities on the Consolidated Balance Sheets.

There was no liability for these purchase commitments as of December 31, 2024 and an $ 11 million liability as of December 31, 2023.

We record a liability for non-cancellable purchase commitments for quantities in excess of our forecasted demand consistent with the assessment of net realizable value of our inventory.

There was no liability for these purchase commitments as of December 31, 2025 or 2024.

Contingencies

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The Company records a liability for contingencies when a loss is deemed to be probable and the loss can be reasonably estimated.

During the second quarter of 2022, the Company entered into a License and Settlement Agreement (“Settlement”) to resolve certain patent-related litigation.

The payment terms under the Settlement consisted of 8 quarterly payments of $ 45 million that began in the second quarter of 2022.

The final quarterly payment was paid in the first quarter of 2024.

Note 15 Share-Based Compensation

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Awards available under the 2018 Plan also include cash-settled awards, including cash-settled stock appreciation rights, cash-settled restricted stock units, and cash-settled performance stock units.

No awards remain available for future grants under previous plans.

The Company uses treasury shares as its source for issuing shares under the share-based compensation programs.

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Income tax benefit $ 29 $ 18 $ 13

As of December 31, 2024, total unearned compensation cost related to the Company’s share-based compensation plans was $ 127 million, which will be recognized over the weighted average remaining service period of approximately 1.4 years.

The majority of the Company’s share-based compensation awards are generally issued as part of its employee and non-employee director incentive program during the second quarter of each fiscal year.

The Company also issues awards associated with business acquisitions or other off-cycle events.

As of December 31, 2025, the total unearned compensation cost related to the Company’s share-based compensation plans was $ 138 million, which will be recognized over the weighted average remaining service period of approximately 1.4 years.

The majority of the Company’s share-based compensation awards are issued as part of its employee and non-employee director incentive program each fiscal year.

Beginning in 2025, the annual employee equity incentive awards were granted in the first quarter.

The non-employee director equity awards will continue to be granted in the second quarter.

The Company also issues awards associated with recently acquired companies and other off-cycle events.

The majority of the Company’s share-based compensation is comprised of stock-settled awards.

The Company’s 2025 award agreement provisions resulted in accelerated recognition of compensation cost in the year of award as compared to previous awards.

Stock-settled awards

Beginning in 2021, the Company began issuing stock-settled restricted stock units (“stock-settled RSUs”) and stock-settled performance share units (“stock-settled PSUs”) for the majority of its share-based compensation awards.

Prior to 2021, the Company primarily awarded restricted stock awards (“RSAs”) and performance share awards (“PSAs”).

The Company’s awards are typically time-vested with stock-settled RSUs and RSAs vesting ratably in three annual installments and stock-settled PSUs and PSAs vesting at the end of the three-year period.

No RSAs or PSAs were issued to employees in the current year.

Vesting for each participant is subject to restrictions, such as continuous employment, except in certain cases as set forth in each stock agreement.

The Company’s awards are typically time-vested with stock-settled RSUs vesting ratably in three annual installments and stock-settled PSUs vesting at the end of the three-year period.

Upon vesting, stock-settled RSUs and PSUs convert to shares of Class A Common Stock that are released to participants.

RSAs and PSAs are considered participating securities, and as such, are included as part of the Company’s Class A Common Stock outstanding at the time of grant.

Compensation cost for the stock-settled RSUs, stock-settled PSUs, RSAs, and PSAs is expensed over each participant’s required service period.

Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of units or awards granted, net of estimated forfeitures.

The expected attainment of the performance goals for the stock-settled PSUs and PSAs is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary.

The Company issues RSAs to non-employee directors.

The number of shares granted to each non-employee director is determined by dividing the value of the annual grant by the price of a share of the Company’s Class A Common Stock.

New directors in any fiscal year earn a prorated amount.

During fiscal 2024, there were 6,264 shares granted to non-employee directors compared to 6,640 and 5,686 during fiscal 2023 and 2022, respectively.

The shares vest immediately upon grant.

Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of units granted, net of estimated forfeitures.

The expected attainment of the performance goals for the stock-settled PSUs is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary.

A summary of the Company’s restricted and performance stock-settled awards for the years ended December 31, 2025, 2024 and 2023 is as follows:

Year Ended December 31, 2025

RSUs PSUs RSAs

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value

Outstanding at beginning of year 482,067 $ 295.39 241,946 $ 304.44

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Year Ended December 31, 2024

RSUs PSUs RSAs PSAs

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value

Outstanding at beginning of year 437,379 $ 299.19 195,932 $ 334.59

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Year Ended December 31, 2023

RSUs PSUs RSAs PSAs

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value

Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value

Outstanding at beginning of year 242,732 $ 404.19 105,928 $ 406.89

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Stock Appreciation Rights (“SARs”)

SARs were previously granted primarily as part of the Company’s annual share-based compensation incentive program.

SARs were previously granted as part of the Company’s annual share-based compensation incentive program.

Beginning in 2021, the Company no longer included SARs in its annual share-based compensation award issuances.

A summary of the Company’s SARs is as follows:

2024 2023 2022

SARs Weighted-Average Grant Date Exercise Price SARs Weighted-Average Grant Date Exercise Price SARs Weighted-Average Grant Date Exercise Price

Outstanding at beginning of year 398,838 $ 124.96 443,476 $ 122.67 474,151 $ 121.05

Granted — — — — — —

Exercised ( 178,203 ) 103.05 ( 42,957 ) 99.39 ( 28,659 ) 88.35

Forfeited — — ( 976 ) 244.15 ( 1,987 ) 229.46

Expired ( 2 ) 86.80 ( 705 ) 78.54 ( 29 ) 205.12

Outstanding at end of year 220,633 $ 142.57 398,838 $ 124.96 443,476 $ 122.67

Exercisable at end of year 220,633 $ 142.57 385,305 $ 120.35 400,351 $ 110.14

The following table summarizes information about SARs outstanding as of December 31, 2024:

Outstanding Exercisable

Aggregate intrinsic value (in millions) $ 54 $ 54

Weighted-average remaining contractual life (in years) 1.3 1.3

The intrinsic value of SARs exercised during fiscal 2024, 2023 and 2022 was $ 39 million, $ 8 million and $ 8 million, respectively.

The total fair value of SARs that vested during fiscal 2024, 2023 and 2022 was $ 1 million, $ 2 million and $ 3 million, respectively.

The intrinsic value of remaining outstanding and exercisable SARs were $ 16 million and $ 54 million as of December 31, 2025,and 2024, respectively.

The weighted-average remaining contractual life of SARs was less than 1 year as of December 31, 2025, with all of remaining SARs expiring by 2027.

Cash-settled awards

The Company also issues cash-settled share-based compensation awards, including cash-settled restricted stock units and cash-settled performance stock units that are classified as liability awards.

These awards are expensed over the vesting period of the related award, which is typically three years .

The Company also issues cash-settled share-based compensation awards, including cash-settled restricted stock units and cash-settled performance stock units that are classified as liability awards and typically have a vesting period of three years .

Compensation cost is calculated as the fair market value of the Company’s Class A Common Stock on the grant date multiplied by the number of share-equivalents granted, net of forfeitures.

The fair value for all cash-settled awards and the expected attainment of the performance goals for the cash-settled performance stock units is reviewed at the end of each reporting period, with adjustments recorded to compensation expense in the Consolidated Statements of Operations, as necessary.

Cash settlement is based on the fair value of share equivalents at the time of vesting, which was $ 13 million, $ 9 million and $ 5 million in 2024, 2023 and 2022, respectively.

Share-equivalents issued under these programs totaled 59,266 , 45,460 and 66,923 in fiscal 2024, 2023 and 2022, respectively.

Cash settlement is based on the fair value of share equivalents at the time of vesting, which was $ 14 million, $ 13 million and $ 9 million during the years ended December 31, 2025, 2024 and 2023, respectively.

Share-equivalents issued under these programs totaled 79,663 , 59,266 and 45,460 during the years ended December 31, 2025, 2024 and 2023, respectively.

Employee Stock Purchase Plan

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Note 16 Income Taxes

The geographical sources of income (loss) before income taxes were as follows (in millions):

The geographical sources of income before income taxes were as follows (in millions)

Year Ended December 31,

2025 2024 2023

$ 486 $ 167 $ ( 69 )

Domestic $ 360 $ 486 $ 167

Foreign 200 149 167

Total $ 560 $ 635 $ 334

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2025 2024 2023

Federal $ 129 $ 2 $ 141

State 27 8 22

Foreign 45 63 126

Total current $ 201 $ 73 $ 289

Federal ( 83 ) ( 5 ) ( 168 )

Federal (national) $ 81 $ 46 $ ( 3 )

State 16 17 1

Foreign 44 44 40

Total deferred $ ( 94 ) $ ( 35 ) $ ( 208 )

Total $ 141 $ 107 $ 38

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A reconciliation of the U.S.

federal statutory income tax rate to our actual income tax rate is provided below:

federal statutory income tax rate to our actual income tax rate is provided below (in millions):

Year Ended December 31,

2025 2024 2023

Provision computed at statutory rate 21.0 % 21.0 % 21.0 %

Remeasurement of deferred taxes 2.9 ( 2.4 ) ( 0.4 )

Change in valuation allowance ( 2.9 ) 2.3 0.1

impact of Enterprise acquisition 0.1 0.3 0.4

Change in contingent income tax reserves 0.5 0.4 ( 0.3 )

Foreign earnings subject to U.S.

taxation ( 6.0 ) ( 5.3 ) ( 3.5 )

Foreign rate differential 0.6 ( 0.1 ) ( 3.4 )

State income tax, net of federal tax benefit 1.6 0.5 ( 0.5 )

Tax credits ( 2.2 ) ( 5.5 ) ( 3.1 )

Equity compensation deductions — 0.4 ( 0.1 )

Return to provision and other true ups 0.4 ( 1.8 ) 1.5

Settlements with tax authorities ( 0.2 ) 0.3 2.0

Permanent differences and other 1.1 1.3 1.2

Provision for income taxes 16.9 % 11.4 % 14.9 %

Amount Percent Amount Percent Amount Percent

Federal Statutory Tax Rate $ 118 21.0 % $ 133 21.0 % $ 70 21.0 %

State and Local Income Taxes, net of federal income tax effect (1)

12 2.2 16 2.5 1 0.2

Foreign Tax Effects

Statutory tax rate difference between Singapore and United States ( 1 ) ( 0.3 ) ( 1 ) ( 0.2 ) ( 4 ) ( 1.1 )

Other — — 1 0.1 — —

Changes in valuation allowance ( 21 ) ( 3.8 ) ( 5 ) ( 0.8 ) 5 1.4

Other — — 3 0.4 ( 7 ) ( 2.1 )

Effect of Changes in Tax Laws or Rates Enacted in the Current Period — — 15 2.3 — —

Changes in valuation allowance — — ( 13 ) ( 2.1 ) — 0.1

Other — — ( 1 ) ( 0.2 ) — —

Other Foreign Jurisdictions 9 1.6 — 0.1 — —

Effect of Cross-border Tax Laws 1 0.1 ( 37 ) ( 5.8 ) ( 18 ) ( 5.4 )

Federal Tax Credits

Research and development tax credits ( 10 ) ( 1.8 ) ( 14 ) ( 2.2 ) ( 19 ) ( 5.7 )

Nontaxable or nondeductible U.S.

Federal Items

Officers' Comp §162(m) & Share-based Comp 19 3.4 8 1.3 8 2.4

Other 7 1.2 1 0.2 1 0.3

Changes in Unrecognized Tax Benefits 8 1.5 3 0.5 1 0.3

Other Adjustments

Other ( 1 ) 0.1 ( 2 ) ( 0.2 ) — —

Effective Tax Rate $ 141 25.2 % $ 107 16.9 % $ 38 11.4 %

(1) State taxes in Kentucky and Illinois made up the majority (greater than 50%) of the tax effect in this category (2023-2025)

For the year ended December 31, 2025, the Company’s effective tax rate was higher than the federal statutory rate of 21% due primarily to expense related to foreign earnings subject to U.S.

taxation as a result of 2025 U.S tax legislation, taxes related to impacts of U.S.

share-based compensation, increased reserves for uncertain tax positions, and U.S.

state income taxes, partly offset by the generation of U.S.

tax credits and the release of certain Canadian valuation allowance reserves.

For the year ended December 31, 2024, the Company’s effective tax rate was lower than the federal statutory rate of 21% primarily due to the tax benefit related to foreign earnings subject to U.S.

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taxation, remeasurements of deferred taxes, and the generation of tax credits.

For the year ended December 31, 2022, the Company’s effective tax rate was lower than the federal statutory rate of 21% due to lower tax rates in foreign jurisdictions, the generation of tax credits and the favorable impacts of foreign earnings subject to U.S.

The Organization for Economic Co-Operation and Development (OECD) has implemented a global minimum tax framework of 15% for companies with annual revenues greater than €750 million, referred to as Pillar 2.

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will enact legislation to adopt Pillar 2.

As a result of the Company’s operational footprint, Management has assessed the jurisdictions where legislation is enacted and applicable Transitional Safe Harbor provisions, and has determined an immaterial impact on the Company’s financial results.

As a result of the Company’s operational footprint, Management has assessed the jurisdictions where legislation is enacted and applicable Transitional Safe Harbor provisions, and has accrued an immaterial impact on the Company’s financial results.

The Company earns a significant amount of its operating income outside of the U.S.

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and Singapore.

In Singapore, the Company previously benefited from an incentivized corporate income tax rate from the Singapore

Economic Development Board of 10.5% and a full exemption from withholding taxes.

In Singapore, the Company previously benefited from an incentivized corporate income tax rate from the Singapore Economic Development Board of 10.5% and a full exemption from withholding taxes.

Without these benefits, the corporate tax rate in Singapore is 17% and the withholding tax rate is 10%.

The Company decided to forgo a renewal of this benefit beyond 2023;

therefore the 2024 tax rate is computed using the standard corporate rate of 17%.

therefore the 2024 and 2025 tax rate is computed using the standard corporate rate of 17%.

Under current U.S.

Foreign Tax Credit rules, any withholding taxes paid are creditable for U.S.

Tax Credit rules, any withholding taxes paid are creditable for U.S.

tax purposes, negating any impact of the increased withholding rate.

Income taxes paid, net of refunds received, were as follows (in millions):

Year Ended December 31,

2025 2024 2023

Federal Taxes $ 65 $ 76 $ 130

State and Local Taxes

Illinois 1 9 5

Kentucky 8 11 3

Other States 7 10 8

Foreign Taxes

United Kingdom 8 — 74

Singapore 17 3 16

Other Foreign 28 15 16

Total $ 134 $ 124 $ 252

Tax effects of temporary differences that resulted in deferred tax assets and liabilities are as follows (in millions):

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Net deferred tax assets $ 382 $ 455

For tax years beginning in 2022, the Tax Cuts and Jobs Act of 2017 imposed a requirement that all R&D expenses be capitalized and amortized for U.S.

tax purposes.

The effect of this new provision is an increase of approximately $ 74 million and $ 100 million to deferred tax assets for the years ended December 31, 2024 and 2023, respectively, with corresponding increases to the current tax liabilities.

For tax years beginning in 2025, the One Big Beautiful Bill Act of 2025 allows taxpayers to immediately deduct domestic research and experimental expenditures paid or incurred in all tax years beginning after December 31, 2024.

Furthermore, taxpayers are permitted to elect to accelerate the remaining deductions of the previously capitalized domestic expenditures over a one- or two-year period in lieu of the amortization otherwise to be recognized.

The Company is taking the position to accelerate the previously capitalized expenditures in 2025 and to also make the election of I.R.C.

59(e) to capitalize the current year’s domestic expenditures and amortize over 10 years.

The Company’s valuation allowance consists of certain net operating loss (“NOL”) and credit carryforwards for which the Company believes it is more likely than not that a tax benefit will not be realized.

With respect to all other deferred tax assets, the Company believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize a tax benefit.

The Company’s valuation allowance decreased by $ 18 million from 2023, primarily due to the impact of remeasuring deferred taxes resulting from a reduction in a statutory tax rate which becomes effective in 2025.

The Company’s valuation allowance decreased by $ 21 million from 2024, primarily due to the release of certain Canadian valuation allowance reserves.

As of December 31, 2025, the Company had approximately $ 380 million (tax effected) of “NOLs” and $ 43 million of credit carryforwards.

Approximately $ 161 million of NOLs will expire beginning in 2025 through 2044, and $ 29 million of credits will expire beginning in 2025 through 2045, with the remaining amounts of NOLs and credit carryforwards having no expiration dates.

The Company is subject to the GILTI, BEAT and FDII provisions, for which we recorded an income tax benefit of $ 38 million, $ 16 million and $ 19 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company is subject to the GILTI, BEAT and FDII provisions for which we recorded an income tax expense of $ 1 million for the year ended December 31, 2025, and an income tax benefit of $ 38 million and $ 16 million for the years ended December 31, 2024 and 2023, respectively.

These impacts are included in the calculation of the Company’s effective tax rate.

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It is not practicable to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings.

Unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

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Additions for tax positions related to the current year 14 14

Additions for tax positions related to prior years — —

Settlements for tax positions — —

Lapse of statutes ( 1 ) ( 1 )

Balance at end of year $ 43 $ 30

As of December 31, 2024 and December 31, 2023, there were $ 13 million and $ 9 million of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate.

As of December 31, 2025 and December 31, 2024, there were $ 21 million and $ 13 million, respectively, of unrecognized tax benefits that, if recognized, would affect the annual effective tax rate.

Additionally, fiscal years 2009 through 2024 remain open to examination by multiple foreign and U.S.

state taxing jurisdictions.

Amounts associated with positions the Company expects to be settled within the next twelve months are classified as current assets or current liabilities on the Consolidated Balance Sheets.

As of December 31, 2025, no significant uncertain tax positions are expected to be settled within the next twelve months.

Due to uncertainties in any tax audit or litigation outcome, the Company’s estimates of the ultimate settlements of uncertain tax positions may change and the actual tax benefits may differ significantly from estimates.

The Company did not recognize any net tax benefits associated with interest and penalties related to income tax matters during the year ended December 31, 2024.

The Company recognized a net tax benefit of less than $ 1 million associated with interest and penalties related to income tax matters during the years ended December 31, 2023 and 2022.

The expense or benefit associated with interest and penalties is reflected within Income tax expense on the Consolidated Statements of Operations.

The Company has included $ 4 million of estimated interest and penalty obligations within Other long-term liabilities on the Consolidated Balance Sheets each as of December 31, 2024 and 2023, respectively.

The Company did not recognize expense or benefit associated with interest and penalties related to income tax matters during the years ended December 31, 2025 and 2024.

The Company has included $ 4 million of estimated interest and penalty obligations within Other long-term liabilities on the Consolidated Balance Sheets each as of December 31, 2025 and 2024.

Note 17 Earnings Per Share

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Stockholders’ equity includes certain items classified as AOCI, including:

• Unrealized gain (loss) on sales hedging relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales.

• Unrealized gain (loss) on sales hedging which relates to derivative instruments used to hedge the exposure related to currency exchange rates for forecasted Euro sales.

These hedges are designated as cash flow hedges, and the Company defers income statement recognition of gains and losses until the hedged transaction occurs.

See Note 11, Derivative Instruments for more details.

• Foreign currency translation adjustments relate to the Company’s non-U.S.

• Foreign currency translation adjustments which relates to the Company’s non-U.S.

subsidiary companies that have designated a functional currency other than the U.S.

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Balance at December 31, 2022 $ ( 11 ) $ ( 55 ) $ ( 66 )

Other comprehensive income (loss) before reclassifications 50 ( 8 ) 42

Amounts reclassified from AOCI (1)

( 87 ) — ( 87 )

Tax effect 8 — 8

Other comprehensive (loss), net of tax ( 29 ) ( 8 ) ( 37 )

Balance at December 31, 2022 ( 11 ) ( 55 ) ( 66 )

Other comprehensive (loss) income before reclassifications ( 7 ) 6 ( 1 )

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Balance at December 31, 2024 22 ( 66 ) ( 44 )

Other comprehensive (loss) income before reclassifications ( 74 ) 52 ( 22 )

Amounts reclassified from AOCI (1)

Tax effect 9 — 9

Other comprehensive income (loss), net of tax ( 26 ) 52 26

Balance at December 31, 2025 $ ( 4 ) $ ( 14 ) $ ( 18 )

(1) See Note 11, Derivative Instruments regarding the timing of reclassifications to operating results.

Note 19 Accounts Receivable Factoring

The Company has a Receivables Factoring arrangement, pursuant to which certain receivables originated from the EMEA and Asia-Pacific regions up to a maximum of € 75 million, as amended, are sold to a bank without recourse in exchange for cash.

The Company has a Receivables Factoring arrangement, pursuant to which certain receivables originated from the EMEA and Asia-Pacific regions up to a maximum of € 150 million are sold to a bank without recourse in exchange for cash.

Transactions under the Receivables Factoring arrangement are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets , with the sold receivables removed from the Company’s balance sheet.

The Company does not maintain any beneficial interest in the receivables sold.

The bank’s purchase of eligible receivables is subject to a maximum amount of uncollected receivables.

The Company services the receivables on behalf of the bank, but otherwise maintains no significant continuing involvement with respect to the receivables.

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Segment results

Our operations consist of two reportable segments that provide complementary offerings to our customers:

Asset Intelligence & Tracking (“AIT”), which includes barcode and card printing, RFID and RTLS offerings, supplies, and services;

and Enterprise Visibility & Mobility (“EVM”), which includes mobile computing, data capture, fixed industrial scanning and machine vision, services, and workflow optimization solutions.

Effective in the fourth quarter of 2025, we realigned our reportable segments from the former EVM and AIT segments to two new segments:

The CF segment consists of our mobile computing products, and related services and software-based offerings that were formerly part of our EVM segment.

The AVA segment consists of our barcode and card printing products and related supplies and sensors, RFID and RTLS offerings, and related services that collectively represented our former AIT segment, as well as our data capture, and machine vision offerings and related services that were formerly part of our EVM segment.

This change aligns with how we are operating our business to advance our strategy and the level of detailed financial information reviewed by our chief operating decision-maker going forward.

Also effective in the fourth quarter of 2025, share-based compensation expense is excluded from the measurement of segment operating results.

Historical segment results have been recasted to confirm with current period presentation.

As previously discussed, the results of operations for Elo and Photoneo are included in the CF and AVA segments, respectively.

The reportable segments have been identified based on the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among the Company’s segments.

The CODM reviews adjusted operating income to assess segment profitability primarily during the Company’s annual budget and forecasting process.

The CODM reviews operating income to assess segment profitability monthly as well as part of the Company’s budget and forecasting process.

The CODM assesses the profitability of each segment relative to its long-term growth objectives in evaluating resource allocation priorities.

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2025 2024 2023

AIT $ 1,647 $ 1,651 $ 1,837

EVM 3,334 2,933 3,944

CF $ 2,960 $ 2,714 $ 2,280

AVA 2,436 2,267 2,304

Total Net sales $ 5,396 $ 4,981 $ 4,584

Cost of sales:

AIT 854 864 1,042

EVM 1,714 1,597 2,115

CF $ 1,564 $ 1,380 $ 1,249

AVA 1,217 1,179 1,206

Corporate (3)

Total Cost of sales $ 2,803 $ 2,568 $ 2,461

Operating expenses:

$ 811 $ 775 $ 703

Corporate (3)

Total Operating expenses $ 1,893 $ 1,671 $ 1,642

Operating income:

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Total Operating income $ 700 $ 742 $ 481

(1) AIT and EVM segment operating expenses include Selling and marketing, Research and development, and General and administrative expenses, excluding the amounts classified within Corporate.

(2) AIT and EVM segment operating income includes depreciation and share-based compensation expense.

The depreciation and share-based compensation expense amounts are proportionate to each segment’s Net sales.

(3) To the extent applicable, amounts included in Corporate consist of Amortization of intangible assets, Acquisition and integration costs, Exit and restructuring costs, as well as certain other non-recurring costs (such as the Settlement costs in 2022, impairment of goodwill and other intangibles, and business acquisition purchase accounting adjustments).

(1) CF and AVA segment operating expenses include Selling and marketing, Research and development, and General and administrative expenses, excluding the amounts classified within Corporate.

(2) CF and AVA segment operating income includes depreciation expense proportionate to each segment’s Net sales.

(3) To the extent applicable, amounts included in Corporate consist of 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).

Sales to significant customers

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2025 2024 2023

AIT EVM Total AIT EVM Total AIT EVM Total

CF AVA Total CF AVA Total CF AVA Total

Customer A 16 % 13 % 29 % 11 % 10 % 21 % 8 % 10 % 18 %

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Total Net sales $ 5,396 $ 4,981 $ 4,584

(1) Certain current year and prior period net sales have been recast to appropriately reflect customer location, with no impact to Zebra’s consolidated net sales.

and Germany were the only countries that accounted for more than 10% of the Company’s net sales in 2025, 2024 and 2023.

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Total Net sales $ 5,396 $ 4,981 $ 4,584

(1) Certain prior period net sales transactions have been recast to appropriately reflect customer location, with no impact to Zebra’s consolidated net sales.

Geographic data for long-lived assets is as follows (in millions):

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Total long-lived assets $ 519 $ 472 $ 478

Long-lived assets are defined by the Company as property, plant and equipment and ROU assets.

For the purpose of this disclosure, long-lived assets are defined by the Company as property, plant and equipment and ROU assets.

Primarily all of the Company’s long-lived assets in the North America region are located in the U.S.

Note 21 Subsequent Event

On February 4, 2026, the Company’s Board of Directors authorized additional share repurchases of up to $ 1 billion of outstanding shares of common stock.

This share repurchase authorization is in addition to, and does not supersede, the existing share repurchase authorization made in 2022.

Like the Company’s existing share repurchase authorization, repurchases may be effected from time to time through open market purchases, including pursuant to a pre-set trading plan meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data