Zebra Technologies (ZBRA) 31 Oct 232023 Q3 Earnings call transcript

Company Profile

Participants

Michael Steele	executive
William Burns	executive
Nathan Winters	executive
Brad Hewitt	analyst
Thomas Moll	analyst
Damian Karas	analyst
Joachim Heel	executive
Keith Housum	analyst
Joseph Giordano	analyst
Meta Marshall	analyst
Andrew Buscaglia	analyst
Robert Mason	analyst
Brian Drab	analyst

Call transcript

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Operator

Good day, and welcome to the Third Quarter 2023 Zebra Technologies Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

And I would now like to turn the conference over to Mike Steele, Vice President, Investor Relations. Please go ahead.

Michael Steele

Good morning, and welcome to Zebra's Third Quarter Conference Call. simulcast there website year. for being will investors.zebra.com is archived be at presentation on at our and This least one

forward-looking our and on are based refer you differ statements and factors we Our and discussed the assumptions in materially, current and subject filings. Actual uncertainties. expectations risks to results SEC could to are

this business performance. our call, we as describe we During will measures reference non-GAAP financial

press the You can slide of release. find today's in end reconciliations presentation earnings at and the

Bill our third acquired advancing making references will on detail Bill a QX Financial following with indicated, are sales the will this performance begin progress and we actions Burns, conclude on Chief otherwise our Throughout quarter are This include Asset and presentation, financials months Nathan our will year-over-year on provide our taking. to constant Bill with Nathan from outlook. exclude our are unless our vision. presentation and XX Enterprise remarks acquisition. each discuss Winters, results businesses Officer. Chief Intelligence basis prepared then and currency Executive from results recently the additional will for we Officer;

remarks, Chief will us Revenue we Heel, the join questions. Joe take Officer, your Following as prepared our

turn Bill. Slide it let's I over as hand Now to X to

William Burns

you Thank thank Mike. you, Good morning, for us. joining and

sales elongated our deleveraging As expense and resulted performance cycles. sales softness decline with markets was third end This in quarter a across expected, impacted by impacting our broad-based in profitability. significant

drive improve our shift recover. our the will cost and rationalize we resources to and markets demand to have our We the environment, as discussing today progress end sales well profitability as spend time results and our structure as growth go-to-market made

basis QX XX% the prior XX% of of decrease from adjusted by been as about which we spending point decline. saw $X.XX, customers share year. our which their $XXX and year For XXX have a and levels, continued XX.X% of reducing across million, X/X demand sales and the and distributors diluted all non-GAAP We markets late per in decline a broad-based realized throughout earnings end from a our EBITDA exacerbated margin behavior cautious decrease our demonstrated prior quarter, the for of dynamics QX sales of softening QX, accounted inventory more These regions.

our of has product aggressively complete as by holding We reminder, channel a and been slowed, recovered down will reset end-user cost believe has inventory capital As times distribution driving working has have lead this demand increased. year-end. largely

Although product were and across we spots all services categories, software quarter. the bright declines experienced in

potentially sequential implemented, all see restructuring summarize net we we profitability. to savings a end demand now cost yield from expectation are our These X, now $XX to markets. previous our As cost million. On increase we the Slide actions million, of which expected of QX, trends is annualized an $XXX expect across significant enter drivers improvement of in actions

X the Our volume, our which of X/X largest underperforming economy. has than services significantly sales economy end the to are been more goods markets, representing indexed

a challenging retail logistics e-commerce navigating and capacity during many of demand environment primary each the end pandemic. weakest declined, While and customers markets out and was absorbing built transportation as in are our

labor expectations As we and the to track patients. trace from expect visibility, you are supply see slide, softness, demand chain investment in and despite our term, on solutions there several themes shoppers drive long the current and including mandates real-time that increased resource over constraints, and

that savings. In for annualized long-term of are to are restructuring impacts million actions early success. the review like to I'd the we demand and implemented environment and $XXX and QX taking position the X. QX, Slide cost of mitigate operating ourselves net the to late we soft Turning of address actions driving most

cases that capture machine resources along are vision. with automate sectors, to and solutions new government and digitize our Japan, the and including We markets, leverage manufacturing use to reallocating RFID in underpenetrated growth environments, potential to and accelerate including of

We renegotiating free and component cash inventories. metric. drive with flow working our conversion supply And down a manufacturers as plan, to contract our long-term long-term agreements added incentive are we also part of

the of improve our shift we cost actions our resources drive implemented have and growth markets and expect recover. profitability end We the to sales as go-to-market

structure While a we a we behavior. we XXXX. believe seeing cost and respect continue managing with recovery year remain our to in the take peak of and to market cash of to customer through cautious agile uncertain we signs seeing remain destocking are demand Therefore, the planning first the through environment, flow. remainder approach disciplined distributor on are an leveling We'll of activity, our and trends we this of half and not based of

to turn and now to Nathan results fourth will QX discuss review quarter the call outlook. financial over our our I

Nathan Winters

Thank you, Bill.

the net excluding start with Slide X. P&L XX.X%, impact In FX. decreased sales Let's of and on QX, the XX.X%

and Tracking rates. XX.X% declined Enterprise sales a saw XX.X% On with renewal sales computing. declines in Intelligence by decreased software Our We we and growth America, attach and Visibility with sales drove Asset positive our weakness segment XX%. across North pronounced across segment and In primarily declined double-digit driven note, strong Mobility service mobile and printing. regions.

declined sales with the declines EMEA XX% region. broad-based across

decreased from XX.X%, sales Pacific Adjusted deleveraging gross partially to offset basis XX% XXX volumes, primarily decreased by sales favorable by supply Southeast lower to Asia, due XX%, expense points China and driven driven chain by costs. Asia Latin and premium margin sales decreased America Mexico.

as are these As of mitigated, including we earnings chain slide longer fully presentation. costs part our a supply no been have

implemented expense basis early and drive XXX Note of savings delevered plans as that sales. were percent expenses the a previously QX the QX. operating bulk late of to Adjusted restructuring in points operating announced

basis contributed adjusted lower Third year-over-year earnings diluted XX% deleveraging. was share tax $X.XX, decrease was expense a XXX offset a the EBITDA driven Non-GAAP per point Increased rate. XX.X%, a by decrease. interest margin decline quarter by expense to

sheet now balance flow and X. Turning Slide on cash to the

higher impact more due of settlement quarterly costs. year payments, Greater all lower EBITDA of a challenging lower months For the working our capital at adjusted ended of X by use taxes net as providing ratio, $XXX to of primarily range free to million on facility to due payments the $XX we X.Xx the and of including payments. is unfavorable and capacity We and partially top million offset previously of for inventory period, leverage the XXXX, announced end the to debt first negative of actions higher which cash of approximately environment. below a flow restructuring billion cash target and X.Xx incentive net which interest credit ample flexibility earnings, was quarter prior revolving was $X navigate had compensation of

turn our Let's outlook. to now

out on a destocking sequential channel seeing stabilize we basis As activity of the moderate as quarter, enter and are the velocity expected. fourth we sales

declines sales across are QX with XX% to major Our year. the assumes accounting compared between and expected destocking distributor to for outlook categories, decline. X/X product This our approximately of XX% sales decline prior the double-digit

That the backlog XXXX. not a our QX first to look half to we as guide. said, are We compelling pipeline with seeing signs of of the and necessary support in are market recovery we

adjusted actions. we the by We by deleveraging driven sales anticipate EBITDA restructuring the volumes, expense expect partially XX%, anticipated our be margin approximately cost deleveraging, mitigated of to Despite QX expense benefits lower from cycle $XX prior costs range to $X.XX the million $X.XX. of year-on-year chain to of gross we premium be expected improvement margin in is diluted year in EPS as period. Non-GAAP supply

midpoint, prior favorable expected XX% at and an an outlook of year margin QX is approximately XX%. of sales our to which full approximately to the basis decline Our XX points EBITDA guide translates

free to year. full our positive expect XXXX the of for cash We negative half and flow be second for the

shown in sheet rightsizing be focused on on continue Please and Slide on cycle. a over balance modeling inventory We assumptions driving additional our XX. cash conversion to XXX% reference

will to we With Intelligence the discuss I that, our to call Asset turn Bill Enterprise are vision. how advancing

William Burns

Thank you, Nathan.

operations, we from near to the digitize are well our term, remain trends and customers' are automate sales secular and benefit positioned solutions While pressured workflows. that essential our to

as are in by more Asset focused insights and real productivity. workflows proven software by including navigating labor to as operational premier effectively the compelling provider near need improve our tasks utilizing time, analytics. vision address of and solutions, our empower customers the transforming on capabilities execute by through learning challenges, machine driven intelligence, to Zebra constant effectively portfolio. We scarcity artificial change Enterprise prescriptive such complex Intelligence workforce By our solutions advanced can a with We their advancing Zebra's elevating

advance software suite retail of associates, variety a collaboration, equips user intelligence. offerings. launches This solution our our that and and optimization, several which inventory almost we solution, with address innovate enterprise logistics workers Pay continue our across functions; software of and At payment Workcloud product workforce conference, Zebra and solutions, which X includes Zebra our hospitality employees accepts We portfolio, anywhere. point-of-sale unveiled critical enterprise to including device demand mobile options our annual optimization, the customer

language to further customers driving ways a collaboration into the Qualcomm, is handheld experience and without is with create connectivity gains. working and our new us which and partners cloud. and competitive computing computers business model our and unique to single suite worker empowering This large for differentiates customer-specific It with demonstrated requiring it tailored the mobile coupled the software AI mobile penetration market The application. enable to will integrate opportunity. tablets generative In a additional Zebra platform priorities of by differentiator, expands frontline productivity we user

business value elevate confident road our proposition. that customer innovation to the are continue our across We map will

to optimize on-demand XX, our the see As technology Slide can you on customers leverage workflows economy. for

and shoppers wins and I vision provider enterprises increase patients. selected like previously recent to some machine Zebra's our to empower to manufacturing the serve component for recently customers, would A better inspection of automate a by manual parts. productivity Our process engraved solutions team. highlight global technology collaboration and solution

and waste to high relationship opportunities forward We material exploring quality reducing ensures false this solution look our with customer. Our to errors. traceability, expensive expand and

printers time walks hospital. large and is up accuracy, customer-facing software assignments mobile staff critical large medical added Zebra's more improve computers and to effectiveness selected store inspections frequent on-site and our management A supply reducing assets equipment, marketing throughout spend Workcloud cycle solutions chain productivity task drives inventory promotion RFID improve mobile significantly A frees tracking technology retail using to North caregivers and retailer A American pharmacy of on in counts. satisfaction accelerating and store their to focus Optimizing updates. the refreshed accountability to and the our task customer stores system communication across streamlining health chain and in care efficiency the computers, activities. large RFID enable searching by real-time Europe for

review, their competitive demonstrated the for During needs. most cost-effective the Zebra solution

to Lastly, subscription-based Zebra the long-term system. collaboration drives displacing solution This In business in Asian add mobile to legacy benefits while connectivity associated our communication our a retailer store Zebra's conviction their large and closing, computers. decided software remains unchanged. phone

is automate and workflows. trends digitize we over positioned benefit to term, to spend near long secular customer well the While we are believe term, pressured from

position us our portfolio continue for as of innovative back will while will We I hand on profitable elevate to growth our well recover. to markets through now customers position actions end solutions, Mike. executing our it to with

Michael Steele

you that Thanks, open as and to question one to Bill. follow-up possible. the get of can now We'll we to ask call as limit you We that many one yourself so Q&A.

Operator

Brad [Operator Instructions] Our Research. question first Wolfe from Hewitt comes from

Brad Hewitt

thoughts about for You be then but growth second I being able long-term be some overall was would to half growth for X% outlook on helpful? little and any if relative bit would of XXXX, preliminarily the XXXX you the comps more thoughts and think the on is we talked that guys course, provide about setup in to So of growth should algorithm? first a the wondering challenging kind preliminary to half, X% how the

Nathan Winters

what we perspective, of of leveling our we're signs Thanks, a yet overall of not at said, with Brad. QX And the demand our high demand challenging in peak end the QX, we're customers' And environment. really in market seeing I I'd guess finished distributor trends of outlook but today. recovery on from seeing based we seeing as start destocking, and we're behavior. a

with declined along verticals in saw it sizes, but of all large customers we most region all enterprises. was So really pronounced in QX

of remain quarter. not half There 'XX, first to software recovery time. spots into were really, guiding the the to we look is very going the yet of we're cautious certainly examples ahead compares the as this and 'XX we challenging have the for seeing that we're seeing bright very at idea year say compelling us. not are remainder and in of we're -- we're of some Services really But I'd and that.

the moment, say demand 'XX see we're that of remainder that year, would to that in I'd challenging going the for the cautious. and remain still So we environment

Brad Hewitt

QX? if maybe then expect from perspective as you And helpful. what in That's in looked Okay. sequentially about to how could QX and bookings talk bookings a as like you bookings what saw look well you

Nathan Winters

good were recovery overall. bookings to then to yet, again, and to we've we -- signs say from that demand we be not our as seeing trajectory that enter would but But we've quite QX again, the about that, challenging bookings QX, feel I able during got guide perspective, for velocity expected feel with QX. going the QX on our into guide for order got of deliver as

Operator

question next comes our from And Moll Stephens. Tommy from

Thomas Moll

in it's the of tell to topic. on at of refresh to installed heard where when having I acceleration would that that's you circle described less is have comments, the think maybe velocity some end that you if is, that part lot discretionary wanted sell-through and you'll think there your customer? your base just two, could I that, us on useful just of product sell-through the when you spend as an you And I One, a correct. that stabilized. and approaching make given And life, expect of to cycles the sure back velocity, prepared a some point, about

Nathan Winters

fourth leveling and perspective, while I color impact Tom, the more think, level maybe on biggest less we in demand And the will compelling 'XX, that believe QX used been we're little seeing add what be said us not QX that seeing has right? first into signs we're we've see to QX. to a again, by guiding And yet, you've behind so out use very uncertainty recovery QX, out. and trends across question, I in world can't those And as year-end. the don't for environment. of we a see to we're that again, see them the then and customers destocking word grow seen continue of do therefore, solutions kind from that e-commerce, and as we're deployments cases quarter said, cancel They seeing transportation guide of as capacity forever. We're across continue not our They And will into logistics across customer half 'XX, challenging first compares. aAnd and we within But resume use we our our macro customers the that excess products to to retail they look projects. push as the they our around and abate. seeing

seen this not downturns last typically, for years. they quarters, Zebra similar So in where we've

do cycling and time So to year. we at destocking go we half And see as we through that easier second very that our seeing compares we in the half moment, would would restocking progression. some were 'XX the be at the the for year, remain the clearly through visibility due the while that -- second challenging this really of

that's So moment. I how think at we'd it see the

Thomas Moll

the expect of on days XX my up theme, year. the it in code speaking, the point? your your something some up to among follow just relating behind at that, below period on like that where question given channel for that is to you visibility time a And that broadly sounds any be you by level," have or ZIP typical where of the view end channel, end just could And or partners of destocking most do there hand is conservatism idea that you this be And If you there. remain is sit to "normal the will there today? we

Nathan Winters

this Tom, is Nathan.

bit global said, of X region. that inventory, said, by average the see around we you and we can type from on varies variation As XX quite which, days a is on measure but on days as and a channel -- you based again, months, product hand, the

and higher of despite quarter. And on inventory So balances than we say, still the we again, decreased normal the range better days said, it's as throughout not so the the consistent the in those I'd slightly decreases. in did QX, relative -- globally. we QX, than end hand

what work will they the support operating here to, continue expect distributors with within fourth throughout And products closely they of in we fourth to exit to inventory do but try terms why lower normal quarter, to their to on we get we that's distributors do very that's the levels. expect need And the quarter our markets. with our where something

again, year, year. as the it we next move be destocking the enter we we into needs kind And as to be expect to forward so where of

Operator

Karas a to move question from we TBS. And Damian from

Damian Karas

mean, So about based not as you're demand you here beat seeing your But a to seeing that recovery. mentioned about on Bill think do you markets order the customer that take diverse your XXXX, I early conversations, based horse on on and signs of first and your it it's environment patterns, that get I the what not you thinking going dead of but in think to play would demand that? to inflection to see that drive see of customers? where set various you And

William Burns

strengthening we'd uncertainty has that is built resume environment. their certainly their now And And Yes. economy. will and seen levels pandemic. out we've the around accelerated as environment of of where pandemic capacity more some What overall being And T&L see say normalized capacity deployments overall, in customers e-commerce, demand and goods-based economy and that they during the have capacity more base the good is within to used -- built is the to that's abates. significant that the than our I'd a that entire we've through excess across be levels used macroeconomic

Joe, it anything. demand then And and we to broader midsize we're overall, from large see if I across I customers, what the first want we'd that when first is add you challenging industry, seeing the that follow. first, there, say saw rate would so know, run a we'd expect likely the expect would customers from to large environment, we first. that where return area demand where don't

Joachim Heel

little on a point. just Maybe that Yes. bit

phase, customers. the to of priority some given had we some During supply-constrained larger our

market and this we're volume declines the seeing capacity at steepest And the a So large into of that the where the point. that's that's where went. amount went

we customers again. those would where staying first also large the signs begin close recovery very I would of would are where those expect So customers. And we see that, that's purchasing to

exactly with we're the with fit those and new we're you them that reaching they're will plans on will need can points as XXXX, with product in their coming sweat them As seeing And life on they budgets, longer, we to budgets. working doing know into And are assets they up refresh. we're where their working we're when cycle that. them imagine, going

where perhaps first. I would that's look So

Damian Karas

like about gears really are further That's And could Curious volume maybe it. if a seeing? those quarter third of the gross the we on what switch look from about kind based should Got just gross the thinking the is about how here, margin? talk helpful. or there margins. how normalized downside levels then you and And from we baseline think new you're

Nathan Winters

Yes, Damian.

mitigated. for was So on maybe driver X that in a favorability deleveraging the down to chain we context of did as gross if see margin, obviously, XX.X%. are look just decline by entirely Volume QX about costs premium you year-on-year point those now supply major

a several our as actions that So pricing impact software as the over the nice X-point we've was we're margins. years from service and favorable continued well and to strengthen taken traction seeing last

So increases, margins we to distribution to our volumes cost taken look so next those if with with inflation, rebalancing offset year. now actions really we the that can manufacturing component again, gross pricing cost and into go as start our we've capacity focus see recover margins lower underlying to is we on at the the declining, freight

to watermark declines giving given volume us second we making that as the reset market flexibility while grow half is at low look So the the here to the sharp as and recovers. just I the think we capacity -- sure

Operator

a Housum question Northcoast now Keith have from Research. We from

Keith Housum

obviously do goods? purchases, component have levels. finished -- inventory where purchase bit you're focus your Zebra's more And more or have a you compared historical still cost it perhaps that this little is which OEMs not parts, to minimum penalties guys the agreements making you own If Is are levels, minimum you high to you're on going incur? second then if is, to with will component

Nathan Winters

we stayed don't we'd expect we own relatively just at inventory We a expected, on material so flat as second the quarter. and to as Keith, around expect change to were where our our And components exit end manufacturers. the said component balances of increase see inventory, to as that is the Tier our we are X -- you as primary year. be before stated, from the all at where consigned

really that challenges out inventory as times are year, commitments these X.X where back at greater issues and ago purchase were made we well to the So a year. the lead peak years chain as than the going peak demand on a supply

really absorbing inbound demand as those So decrease. components our

our phenomenal I those think done team reduce the purchase job commitments. of has all partners a to working with

looked down at of outstanding commitments, If since We've of balance year. beginning the since the we've beginning finished those good the the you cut purchase in driven our half year.

the we're you in although So making traction, headline numbers. see it don't

around So getting suppliers demand those to in we stability our really the components. signal can that it's now, rightsize so inbound

last right don't question, manufacturers our a we overhead. a purchase penalty in their Tier If tiering structure. not I'd of But that the you terms they making with within agreement to at capacity our price penalties. se per it's -- to cost volume has have we a, sure it say, have have cover minimum their your to certain there's X work Obviously, that purchase different just on volumes,

Keith Housum

should to where your be Because, down? Okay. If level we next some cash could think thumb And XXXX, under have free on that a inventory as that. of flow follow positive forward look you'll assume gets do that level? course, rule optimal worked of like up you year there or is I as we'd

Nathan Winters

Yes.

achieve historical back you would is past we I turns would million that reduction over the for and get question. you -- if -- about of the and $XXX say, couple So years, how us you base to, quickly we normalized our back said if some the levels. go look a say, When can to account at M&A of

manufacturers. million of of go some we our that entirely inventory But in would stability at again, or on, into the components depends And reduction as demand year. some consigned be that $XXX next

Operator

We'll take a TD question now Joe from Giordano Cowen. from

Joseph Giordano

more near-term higher, I've We've you kind had into bit a of into huge bigger what ask dynamics from potentially the I'll automation of shift like term, of guys? here. dug is kind lot a have share a of about make what as picture if in Like questions for questions. percentage a mean scans? having fixed of you So and being done mean the longer goes couple of happens scanners of kind does over quite get So of scans that these what by more mobile fixed mounted computers. a big person you And humans for time RFID-type down? you then instead

William Burns

Yes, and such making I and fixed a say as readers. mobile new printing the machine portfolio, RFID to we're we would just both do RFID that investments as the both across printing scanning, as play industrial vision including see devices, need areas tabletop handled exactly for handheld scanning/machine that. well as fixed vision, We

we've portfolio across that's So continue digitize and automate customers why base broad a their to our environments. got as the

technology are fixed makes holding type scanning. than RFID along their you very scanning hand someone machine hands industrial or more vision where something Ultimately, marry with similar -- but barcode imager a hand-scanner. places in things, RFID there sense a does

addition RFID think vision printers got business, handheld to have we we closely RFID we've we machine mobile. portfolio readers RFID the scanning way across same tabletop see portfolio readers and our the So really and just as in RFID of scanning where industrial fixed is handheld, fixed and versus fixed

invested as and well both. in more think but more both our to attractive fixed So represent in us for machine is why automation that to we're vision continue for we're infrastructure, of RFID fixed important we And going is our think markets that seeing environments. And I business, an that reason. very mobility as that's be aspect

Joachim Heel

this Heel, add. -- is Joe I'll And Joe

an more from a the hardware to handheld I need, that as is for just will think the and for accessories. they because reader, they our will customers in opportunity solutions us this software today to need buy add customers in value might additional also example, than both us specifically other areas, particular,

do important environment, you if vision it is business, that. don't machine provide the in we our to the about component, which, today But when by a that so provide very machine comes vision software handheld large, and scanner. we a part of think And

So it's for for additional at to for a us value also great customers, opportunity create but Zebra. us

Joseph Giordano

but weakness want very not about good away. true destock in improving, -- the just on yet getting the we talked the That was one a answer. I trends of are more some is

point, come was we were that, years? do obviously you margins as $XX.X, So assume think of some very supply to $XX.X at strong, somewhat doing revenue we back do of when maybe your earnings, you to some to what but categorize of those pressured XXXX, I which do I guys chain, had you're from So out XXXX, deliver. the how and

what what in get be market that end my that levels like you would that need think to you -- place be back So kind nearly of don't would to do guess dynamics earnings is need market to it to -- like high? because revenues

William Burns

would we I continued overall, to margin that recover think expect in see markets progression as our overall.

the So buy to as in be the the a have to and costs, why very think right? the lot cautious that past, progress the several that to throughout spending we supply get profitability There's capacity. back we last to see thoughtful pieces that as think out X levels I saw I chain around we XXXX in challenges, had and by building in moving of over last reason over no we we've increased and significant been including So demand challenges back driven tariffs, levels I years, we've But returning we're years that the expect of pandemic levels prior, customers to continuing to been. there's and to as to would we going we of begin our say our be that more demand get had to continue the normal would we again wouldn't. continue

XXXX. in cost of returns. business the We of to along add out with also demand taking are $XXX million annual that And will profitability

it. So we see see back to can't we levels. and how reason to progress, get continue there's no past we why profitability That's to

Operator

Stanley. take And Morgan Marshall question a Meta from we will from now

Meta Marshall

Maybe has couple questions health The been couple of the over market of a for care a of me. years. kind of past strength source

maybe step-up there's than kind goods the second noted manufacturing being you. And kind market a that Just if of of a less strong kind then That's the commentary any for pretty consumer related investments in the about maybe market. already in wondering you of market question, others?

into is of or some bringing machine of vision kind robotics there? guess, kind that that are market, you of I of that areas a So of the kind think unexploited combination what just are --

William Burns

they health our care, but a so and would would vertical been markets, overall, market. trends same less say less our but seeing broader has that health I market, our declines care still fastest-growing impacted say, -- smallest. other at the in manufacturing the than past, I overall, in are the

As opportunity look role productivity, our environment enhance automating play to care. a RFID, health clearly, scanning, health full all printing, care the for that continues and patient computing, of across improve within portfolio within breadth digitizing assets to an creates solutions mobile safety, workflows

new across opportunities for health also all like care We're remain us. announcing tablets health in care things or home telehealth, opportunities for

customers that environment -- robotic think already, assembly the for automation to said you overall. of strength care we So Intuit, meet health overall. of strong we're more manufacturing, so that and planning to very good I'd specific products more in best market it within of demands manufacturing than logistics to develop CPG with a machine and care our transport all or and the of I marketplace for And really the we've demand lot tied base our a their market, continue is got network, -- the kind customers, vision, we in health us line. the manufacturing like more say, on leverage give with while distribution

certain areas, for to see less on more sales print resources the are we solutions. manufacturing primarily So penetrated we're recruit continue instance, others, we Zebra could that that to We in in because do more we've and on but shifted partners floor, an look to and as product for area manufacturing new than area. in where our focus there

clearly we and care So opportunities us grow forward. health to manufacturing moving see both for as

Operator

will from Andrew question PNB Buscaglia We take Paribas. a from

Andrew Buscaglia

Yes.

customer drives what to these new potentially. I I you think about range if give trending for maybe if kind aligned of how -- distributor restocking guess the talk In psychology just restocking? like, were shelves? a what wondering restock of So of of the to the don't that you are there of know to restock talking year? things terms them next year. event slope how it could confidence do the ask And the to with scenarios those what I'm you to 'XX, but view with with distributors end guidance guess cadence trying providing more I occur like, the you of you into is is starting that their I'm is

Joachim Heel

Yes.

I that, address So Andrew. of some can

in demand lot business, Over and few which of both agreeing them the we've gotten particular, tighter course to they objectives distributors have has ensure quarters, have with And we that the cost in changed. capital a increasing volatile, So they understanding very last their the relatively right? the on their of using targets to in in set that's led destocking. has to our their stay calling for been sync what aggressive business. targets those And and that demand then inventory adjusted as we're inventory down, come has match have that,

that We of that in they sales heavily. our seeing about generate to working think is if in very are have you force reverse, majority our course, improvements out, we, now which with partners. occur what start the our sales of demand has working with So together to

that them sales-out demand. So with we're to generate working

them see them, tick to in those confident they good as follow clear we to that inventory the soon well As or those. of to as understanding will up as for have days with a incentives that we're they pretty outstanding now targets in again, that achieve and visibility really reach lockstep stocking DIO place with

that generating demand the We and follow. think it. will really it's inventory So seeing just

Andrew Buscaglia

one X transportation you and areas. dynamics driving and the you Is key one I seeing those guess, out. difference is biggest parse Very other, stronger any the trends is logistics, than likely the versus clear. e-commerce your you? for than come back are more difference the okay. could retail and guess X other? in Yes, I markets, And what to demand faster that Yes,

Nathan Winters

online up and say, and when brick-and-mortar or pick in you store Andrew, Yes, would I together, consider tied versus they're buy especially pretty retail. coupled e-commerce tightly

e-commerce think logistics logistics built case, really providers had across out And network together everything in capacity So out both tied e-commerce and and I I'd going the be have are because to delivery. say, from and there. capacity parcel significant COVID, levels they logistics did, now trans able and built pre-COVID that reset which to demands to of others their to of meet during networks, kind grow around transportation their

moderating overall. And I you've think seen across e-commerce demand

So tied together. those I think X are

think brick-and-mortar think goods that's the tied to retail, more I really of I think in-store, economy.

So goods versus relatively service-based economy, still challenged. is which

really much I'd overall those is excess little So be more in goods back. come about up an in hand, brick-and-mortar say, economy-focused. we by going talked recovery difference retail, I -- recovery a logistics bit this The to e-commerce and to wouldn't more transportation X. from signs those hand positive and from perspective see a economic and for using markets or driven tied capacity

Joachim Heel

of could you store is, And vision. by that slight workers front. connected haven't through additional and deferred don't phase pausing this some for budgets. been where current going their overlap, significantly and yet improve the which and can that retail course, that Retailers itching realized of they're you one what's is That's of they opportunity the And that been store on have the and been having retail the area productivity see store. all area had of a one as there's collaborating. scrutinizing in part vision we the they spending Maybe time, the the a of have

they be because improvements. do in that from improvement it, that have peers of productivity some seen particular, really But that. to a had there, time they do hear that done the their all believe and there's I have retailers to big want those they

will of spending demand part the that of still there on is out retailers part I'm have. with convinced our will additional companies create don't an and transportation way, stores that So and that it come

Operator

Baird. next from our Mason from comes And question Rob

Robert Mason

at installed Would maybe thoughts about to replacement your as normal probe or stake look below average not an think wanted into ground it year? I'm into would the base we and level at get how midyear be just curious, age put average again next cycles, your 'XX a as of the midyear just I 'XX. your But you average, above average?

William Burns

requiring Rob, Yes, would XX% that talked is be they it I assets guiding I'd their applications do we're color we're what you of average, What some same. so say, want before. not than and would they long. memory, as longer normally is the we would. only security sweating perspective, to faster from others. Devices that, see use our guess, that more I we've on today so They say again, more customers speeds, OSes a to processor said get older, can seeing moving forward, about

a of them they Could them for time. amount go way, time, over reasons upgrade yes. and our then those eventually, and for sweat devices there's ahead of But to upgrade. certain kind So that comes they

We're think cycles. we half, in I while little thing I we're of second So changing would refresh of understand make this with away. nothing that cycle half say moves visibility there. our working sure customers to second to remember going cycle to and And are average closely life demand that I the the is the very year, in compares there's biggest think easier their destocking

sweating and the think So assets. in service number devices I refreshes say, that's there, I customer out would of today, of average positive. length average But

Joachim Heel

same pushouts as entire same the we of support I'll Maybe were were in QX about QX, QX, the what QX that. as in which had that tripled. was give in points in And X they pushouts One in data year the the we almost the to XXXX. you had is

that are the should now that our So be maintain happening refreshes being lot there's a of state pushed average out there. can you see all of demand those life out, and to

average so of said they our going And some to buy of what refresh a we devices. likely at And those times that couple it, point, have already, and will is that's is and sorry up. point, to the repeat state some at life

Robert Mason

the that. of a I more jointly, markets, resources. growth hoping And color to more there's performing maybe also thought you there. I'm heard underpenetrated and traditional one accelerating I opening some some remarks. of a go around I your are mentioned in underpenetrated relative those shift And right I was Understood. That's a you go-to-market talked good your back could color. Bill, how to in wanted if put to earlier connection now you And just markets markets? little these just about in of curious comments

William Burns

It but less a is is good other that say, manufacturing impacted, than less about would example that. has That of talked I the earlier down in been significantly opportunity we've call. markets. Yes. year-on-year, an still

leveraging well. and I resources is other And we're won an area as largest to past, opportunities retailer we is that Japan recently, think Japan within opportunity business government. Japan larger but area us to and another that a in we've wins Japan. the remains Government focus investing business partners most those on a we're there grow postal there's additional the haven't more and markets. in of had there lot our within do for large within

customers' talked digitizing RFID from industrial bit I and want around at an environments. formats machine perspective, which Tablet that area to mobile times, is is another automating and good larger computing a people vision and and and as think fixed a about also an us. vision screen product we and opportunity inspection, RFID creates closely scanning around example for machine automation of but adjacent

and as XXXX. started that enter across do perspective to And in these. QX, resources well We've perspective. already regions continue both tactically, a it's reallocating as a technology we're as to areas market we that we'll So address and

customers, us the it. we're address how the think growth see most current others not deploying we markets underpenetrated where to shift that's continue we today, we the important see we're close side resources and it's really to opportunities stay agile, we cost in are faster short-term the only for recovering opportunities. to on see places things, are resources attractive longer-term and be that of or but our and our to but But Some that also that

Operator

William Blair. take Brian from a now Drab question from We will

Brian Drab

an Is potentially? here you're business of year-end -- and acquired there going just purchase at you've is you of You price. answered, the the Okay. and that into my that kind some looking give XXx talk at about other how terms have bit averaged of doing? risk Fetch there the obviously, Matrox in to can spent update XXXX? recently any is money assets Fetch like Can quite a you Most just and that And been in of of this XXXX made other on in impairment questions point. and as you X acquisitions sales of

Michael Steele

and I that Reflexis around some No, area. is with our software, and can Intuit analytics the think in of acquisitions did -- we starting we prescriptive maybe it segment largest

and collaboration, announced associate that our within hands planning, on We enabling for portfolio combining communication, retail well as around our earlier, and a into for taking what leveraging the in about customers. and Joe at idea resonating recent our with and a the software, mobile demand seems of the the management, suite retail. through that workforce really This that associates user a we've Workcloud event everyone continue device associate single to plays focus task around devices talked of management, be idea retail, products application, customer to into retail this in solutions it

fragmented in logistics our So to across automate, idea within earlier focus million to we fixed drive the software the $XXX-plus the part devices in but organizations. I scanning, see manufacturing. productivity, of about mobile also putting is our improve with us quality vision, We've an their devices there hands marrying The overall. of and to to market market retail idea ways associates. look and retail assets to of more talked would being that continue both of attractive, call, important say, they to the industrial machine

seeing, in machine scale certainly, and business, think semiconductors others weighted and distribution. heavily beverage, semiconductor could cyclical are attractive challenge of acquired food was and objective knew scanning offerings not towards the is markets. include machine new inside diversify there when I the in only the our the term They asset warehouse where semiconductor to to weakness into vision, we that automotive, we is but vision industrial fixed to outside as the Matrox short same in

automation for smallest, still in in robotics our those machine we're scale representing X say, about nascent we're diversification vision. I would the excited really across share would I focused warehouse and perspective, gains focus there and market and all predominantly. that driving us, Fetch is it's that in are automation area. So areas or say, opportunities

manufacturing, varying First in for instance, B that's us. to line again, of replenishment, transport, transport side but is from also goods goods for general, in sizes, of about talked inside goods playing moving that market just we A attractive an

The is e-commerce. other market

those our term. where longer picking, being using e-commerce of used humans working orders think are us cobots for today within opportunity an automation additional and robotics an So workers is interesting productivity to devices together by adding and and pick environment

it's overall. of don't opportunities smallest concerns. find the any for issues We Zebra We as attractive segment. really see impairment or X growth these there the opportunities So or long-term

the some term. challenged And are in short

vision As is and of the machine long-term prospects I vision machine said, scanning a but example have good very fixed us. semiconductors, we of with attractive the that market industrial to remain

Operator

has question. I'm Ken KeyBanc a Markets Newman sorry. Capital from

Jim to Company. from Let's Needham Ricchiuti go &

Unknown Analyst

but [Indiscernible] just had one on for Jim. addressed, me. been Most that of have from maybe I the questions

particular For is the $XX that of area targeted incremental savings, one in million a or areas? any just deepening broad existing the across

Nathan Winters

throughout roles the -- is to roles come as where the one and certain backfill what have that had scrutinizing particular and as just well broad-based, the it. plans, quarter just the we've that through Not along, spend drove again third any we scrutinized with open as just plans area, worked really fourth retirement in

in based So say, broad line the we're company. the with and again, would actions driving I fairly for that

Operator

conference turn to Please And go our like would closing the to over session. Burns remarks. for concludes back Mr. this question-and-answer ahead. any I

William Burns

success. Thank you. you. to I'd like customers, our Have employees partners and Thank their long-term to a dedication for good our thank and support day, everybody.

Operator

Goodbye.

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