Zebra Technologies Corporation (NASDAQ:ZBRA) Q1 2024 Earnings Call Transcript

Nathan Winters: Yes. As we mentioned, obviously, the volume leverage or the margin expansion in the second half is highly correlated with the increased volume along with — coupled with the restructuring actions we took throughout last year. And really, for us, the target was to get back to above 20% as the baseline so that we can grow and scale from there. And I think still too early to tell in terms of what exactly that framework looks like. I’d say historically, we’ve going to look at 30% incremental decrementals in a normal quarter, quarter in, quarter out. Fundamentally, the business hasn’t changed in terms of what you would expect. Over time, we’d expect that to be a little bit greater as we scale some of these new emerging markets like machine vision or software that have inherently higher gross margin.

But I think that’s probably the best way to think about it now until the dust settles and we get to some normalcy both from a year-on-year as well as a sequential perspective.

Operator: Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Burns for any closing remarks.

Bill Burns: Yes. I’d like to thank our employees and partners for the stronger-than-expected start to the year and positioning Zebra to return to growth in the second half of the year. We look forward to seeing analysts and investors at our Innovation Day in 2 weeks. Have a great day, everyone. Thank you.

Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.