Share-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

The Company issues share-based compensation awards under the Zebra Technologies 2018 Long-Term Incentive Plan (“2018 Plan”), approved by shareholders in 2018, which superseded and replaced all prior share-based incentive plans. Outstanding awards issued prior to the 2018 Plan are governed by the provisions of those plans until such awards have been exercised, forfeited, cancelled, expired, or otherwise terminated in accordance with their terms. Awards available under the 2018 Plan include stock-settled awards, including stock-settled restricted stock units, stock-settled performance stock units, restricted stock awards, performance share awards, stock appreciation rights, incentive stock options, and non-qualified stock options. 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.

The Company uses treasury shares as its source for issuing shares under the share-based compensation programs. As of December 31, 2025, the Company had 1,279,139 shares of Class A Common Stock remaining available to be issued under the 2018 Plan.

The compensation expense from the Company’s share-based compensation plans and associated income tax benefit, excluding the effects of excess tax benefits or shortfalls, are included in the Consolidated Statements of Operations as follows (in millions):


	Year Ended December 31,
Compensation costs and related income tax benefit	2025		2024		2023
Cost of sales	$	12	$	9	$	6
Selling and marketing	36		27		16
Research and development	51		36		25
General and administration	76		38		19
Total compensation expense	$	175	$	110	$	66
Income tax benefit	$	29	$	18	$	13

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

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.

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
	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
Granted	360,927	292.50		98,404	306.77
Released	(221,552)	298.86		(65,647)	362.95
Forfeited	(17,643)	296.72		(2,379)	292.45
Outstanding at end of year	603,799	$	292.35	272,324	$	291.28


	Year Ended December 31, 2024
	RSUs			PSUs
	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
Granted	277,390	309.99		88,029	309.05
Released	(210,972)	322.67		(35,597)	482.42
Forfeited	(21,730)	293.83		(6,418)	304.52
Outstanding at end of year	482,067	$	295.39	241,946	$	304.44


	Year Ended December 31, 2023
	RSUs			PSUs
	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
Granted	336,168	260.31		104,620	258.57
Released	(95,837)	412.47		(64)	482.42
Forfeited	(45,684)	332.66		(14,552)	313.74
Outstanding at end of year	437,379	$	299.19	195,932	$	334.59

Stock Appreciation Rights (“SARs”)

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. 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 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 $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

Eligible Zebra employees may purchase common stock at 95% of the fair market value at the date of purchase pursuant to the Zebra Technologies Corporation 2020 Employee Stock Purchase Plan (“2020 ESPP”). Employees may make purchases by cash or payroll deductions up to certain limits. The aggregate number of shares that may be purchased under the 2020 ESPP is 1,500,000 shares. As of December 31, 2025, 1,261,305 shares remained available for future purchase.