Zebra Technologies has $2.58 billion of debt against $182 million of cash, with $1.95 billion due May 2027

On November 3, Nathan Winters, chief financial officer of Zebra Technologies·−1.63% — Zebra Technologies, down 1.63 percent as of its last quote, buried a date in the third-quarter earnings call↗: "later this month we plan to refinance our credit facility, which is supposed to mature in May of 2027" ¹.

Zebra makes the barcode scanners and handheld computers that warehouses and hospitals run on, and it had just reported a record quarter and raised its outlook ². The shares fell about 9% to $329.50 anyway ³; the memory bill behind that drop was covered here on November 4↗. What nobody wrote up is the balance sheet under the quarter.

The bill comes due in May 2027

Zebra closed the quarter with $2,578 million of debt and $182 million of cash ²⁴. Its Term Loan A and revolver, $1,954 million combined, mature on May 25, 2027, and the filing says the company will refinance them this quarter↗ and meet debt payments from cash on hand and operations until the deal closes ². As the maturity came within twelve months, $1.9 billion of debt moved into the current column, to $2,077 million from $141 million at the end of December ².

The buyback slowed and no one said why

Zebra generated $661 million of free cash flow in the first nine months and spent $643 million of it on 2,697,227 of its own shares ². Only $75 million of that, 229,206 shares, landed in the third quarter, against $568 million in the first two ². A filing records 1,593,819 shares for $385.31 million repurchased↗ under the February 12 authorization ⁵, so the program is funded and only the pace changed. On the call, management took a question on capital allocation and never mentioned the slowdown ¹.

Cash generation did not become cash

Free cash flow rose to $661 million from $504 million a year earlier ², yet cash ended at $182 million, down from $1.05 billion ⁴, with inventory up to $851 million from $729 million at year-end ⁶.

The pressure behind those balances is the AI buildout: industry DRAM revenue jumped 369% year over year to nearly $200 billion last quarter↗, and "buyers are now competing for supply rather than negotiating on price," says Counterpoint Research ⁷. Zebra's own share of that scarcity is the $145 million of extra memory cost it expects this year, company figures say ¹.

The bulls call the debt modest

The MarketBeat note on the sell-off↗ told investors to expect Zebra to "sustain the aggressive pace" of buybacks and called the debt "modestly high", fixable by "diverting free cash flow from buybacks for a short period" ⁸. Management backs the shrug with leverage of 1.6 times, more than $1 billion of credit capacity and full-year free cash flow guided to at least $1 billion ¹.

Sixteen analysts average a $415.25 target against a $322.02 close on November 6 ⁹; since the print, Truist·+0.14% — Truist, up 0.14 percent as of its last quote sits at Hold and $375, TD Cowen at Buy and $450 ⁹¹⁰. The comfort assumes the roll is routine: the filing calls its timing and terms subject to debt-market conditions ², and the diversion the note prescribed is the one the quarter already shows.

The rate comes first

The facility prices this quarter ², and its rate will set 2027's interest expense. Tight pricing with the buyback back at its old pace would keep compounding earnings that a nearly 7% smaller share count already helped ⁸. Wide pricing with repurchases stuck near $75 million a quarter makes the last quarter's 28% adjusted EPS growth harder to repeat ¹. The filing and the transcript are linked below. When the facility prices, it will say whose cash this is.