I have to read this disclosure first.
Okay.
All right, for important disclosures, please see the Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm Meta Marshall. I cover the networking and cybersecurity space here at Morgan Stanley. We're delighted to have Zebra Technologies' Bill Burns, CEO. Thanks so much for being here today.
Thank you.
Maybe you can just level set with describing the pain points you address for customers and just how that is continuing to evolve.
Yeah. I'd say that, you know, Zebra's, you know, foundation of what we do is really around, you know, intelligent automations for our customers, right? How do they continue to automate in their environments and become more effective and more efficient each and every day? We talk about the business in really two strategic pillars. One is asset visibility and automation, and the other is the connected front line. I think both of those play a critical role in asset visibility, digitizing and automating the environments in which our customers are in. Giving inventory a digital voice, knowing where workers are at any point in time, knowing where inventory is, knowing where things are across the supply chain, always all the way from point of manufacturing through point of sale.
Getting visibility across the supply chain. The other is connecting workers. Mobile devices, tablets, software associated with that to direct workers on tasks to be done inside the environment. When I look at areas like automation and even as automation and decision-making and analytics, it becomes stronger around AI for the front line, you need to have asset visibility first.
Mm-hmm.
Visibility of your assets to feed the AI models, you need connectivity to workers to be able to go implement and drive the outcomes in your business. You know, from our perspective, we would talk about seeing the portfolio in everyday life, right? You would see us in point of sale inside retail. You would see us as devices used for delivery for parcels inside parcel delivery or transportation logistics. You would see our solutions in hospitals to track, you know, patients around hospital wristbands or information into electronic medical records. You know, anything to track and trace or get visibility into the environment or to be able to have a worker go to complete a task within the environment.
Our markets today are transportation logistics, retail, e-commerce, manufacturing, warehousing, healthcare and government are our largest customer segments today. In all of those, we'd expect broad-based growth across the portfolio and broad-based growth across the vertical markets, you know, in 2026, you know, and beyond. There's been variations to that, both geography and different segments and verticals, as we saw in 2024 and 2025, but it's all kind of coming together for 2026, where we're seeing broad-based growth across our portfolio, both in both of our pillars and across vertical markets and geographies.
Okay. Got it. That's a super helpful overview. You know, you mentioned a number, you know, manufacturing, retail, a lot of sectors that have had kind of a chaotic past couple of years, given macro and tariffs. Just against that backdrop, is what customers are asking you for changing?
Yeah. I would say that, you know, it's been different, as you said across-
Yeah.
... the different vertical markets, right? I think that 2025 was a tougher year from a trade environment perspective. I think that customers, many of our customers trying to figure out what the impact was on their business. Ultimately, you know, retailers, some of the tariffs hadn't flown through, you know, flowed through their business until, you know, third quarter of the year, for instance, right? They were still concerned most of the year. Transportation logistics, we saw less shipments from, you know, China, for instance-
Yeah.
... from Asia and, you know, impacting parcel delivery. It was a challenging year, I would say, customer-wise. I'd say despite that, you know, in 2025, they pretty much played their game, meaning that they had a plan around technology rollout. They rolled out that technology. We had 6% growth, 17% EPS growth during the year. It was in a total different seasonality than we've-
Yeah.
... seen in the past. Our customers were asking us for basically the same things. How do I get visibility in my assets? How do I become more effective and more efficient in our business? What are the things I need to do to position myself for AI in the front line? That's probably the newest piece of it.
Yeah.
Most of the other areas were, I need to play my game. I need to be more effective and efficient. I have more demand than resources I can hire, so ultimately, I'm gonna deploy more automation, but I'm also gonna deploy more technology, you know, from you, Zebra. I think that, you know, what was different in 2025 is that we didn't see the year-end spending that we would have seen in prior years. The seasonality we typically see, which grows into fourth quarter, is typically our largest quarter. We had, you know, lowest level of growth, even though we had 6% for the year, organic growth. We didn't see that uptick in large orders at year-end. We're spending early-
Mm-hmm.
... which I think is a factor of just customers being a little more conservative, right?
Yeah.
You know, just overall, you know, and just timing of projects more than anything else. We entered 2026 with strong backlog, strong opportunities. We feel good about the business for 2026 and the guide we put out. Our customers are asking for predominantly the same things.
Yeah.
Continue to work with us and be a strategic partner on the rollout of technology. I think what's new is how does AI play a role in the front line of business and Physical AI, and what does it mean-
Mm-hmm.
... in my environment, and how do I get the most out of it?
Yeah. Okay. Do you think that that discussion you're having is different across retail or transportation and logistics or manufacturing, kind of your biggest customer bases today, just which of those do you see the biggest opportunity in?
Yeah. It's a, it's a little different and nuanced across each. I think we see broad-based growth, but I think if you look at retail, they're really looking at things like RFID throughout the environment. How do they get better control ultimately of their inventories across, you know, their stores, and how do they continue to address e-commerce as well as buy online pickup in store and leveraging those stores, you know, in this on-demand economy of everybody wanting everything, you know, almost immediately? I think that we're also seeing inside retail the move to self-service, right? The acquisition we did in Elo is really a move to do more at point of sale and then, you know, customer self-service and medium networks and others inside the store, so we have opportunity there.
I'd say in transportation logistics, it's really about getting back to parcel growth, right? I think that in their case, they're continuing to invest. I think we've got larger refresh cycles coming. Those large T&L customers refreshed those devices back in the spike we saw in COVID coming out of 2020 into 2021 and 2022. Now come 2027, 2028, 2029, over the next couple of years, they'll be refreshing those devices. We're beginning to have those conversations with them now about the refresh of those devices for their delivery, you know, vehicles and workers. I'd say in manufacturing's been growing in 2025, but lagging a growth rate of the other vertical markets, and now we're seeing that growth rate catch up. Healthcare, we had a good year in healthcare, and healthcare continues to grow and be a strong vertical for us.
New emerging vertical is really government, so more around inventory management that's been woefully behind inside, you know, government and moving right to solutions like RFID, you know, in that environment. We've seen opportunities there. Different, focused areas, but still around how do I get visibility to my assets, and how do I get more connected workers to be more productive in my environment and serve my customer better? I think that's the theme across all of them that resonates.
Got it. you know, you just mentioned kind of guiding to better expectations for 2026 coming out of the Q4 call. Just how have you been able to judge this health of the environment with... against what is probably less visibility from your customers? Just, you know, you mentioned kind of on the T&L side starting to think about this refresh of the COVID devices, but just how does that refresh opportunity play into that visibility that you have?
Yeah, I wouldn't say we have any less visibility. I think that the visibility's been, you know, okay throughout 2025, but I think it's been, again, customers moving ahead with the projects that they've had planned for the year, and just not in the fourth quarter, as I said, we didn't see this larger order uptick in year-end spend. The seasonality growth profile was almost reverse to what we normally see, right? We usually see the strongest growth in Q4, and we saw the slowest growth of the year. We entered the year with a strong pipeline, strong backlog, strong conversation with the customers. I think that one element was missing in fourth quarter, but the conversations hadn't changed throughout the year, and I think that's why we feel good when we take the Elo acquisition and our organic growth rate for 2026.
We think that, you know, customers will continue to buy and move forward. We've seen that, you know, to date in first quarter, and we feel good about, you know, our guide overall and the visibility we have, the conversations we're having. There's no one saying to us, you know, the largest trade show of the year in National Retail Federation Show. We've spent the first two months of the year spending time with our partners, our partner channel conferences around the world, and our customers, and partners feel good about the year. They feel good coming in. They feel good about the spending happening, and the conversations they're having with their customers.
Got it. you know, you've done a number of software acquisitions over time, and having continued to be at the forefront of kind of the R&D within the sector, just how do you think that this positions you best to gain share, you know, within your customer base?
Yeah. I think we continue to invest organically first, right? And you see us do this a lot, is that we'll invest in it organically in a solution and then do something in the acquisition space. For instance, you know, the machine vision market is broken up into fixed industrial scanning and, the machine vision or the inspection market. We, you know, invested organically first in fixed industrial scanning and then did some acquisitions in the machine vision space and blended the two together. I think the same thing, we released our first kiosk into the market and then acquired the Elo, you know, assets. Organic growth and organic investment in R&D is where we focus first and foremost, and then, you know, using capital and acquisitions that make a lot of sense. The...
What we liked about the Elo acquisition was the idea that it really allowed us to add to our connected frontline pillar.
Mm-hmm
beyond mobile devices and the software that goes along with that. There's clearly a move to self-service, and we saw that as an opportunity. We saw others kind of exiting the point-of-sale, hardware market, which created an opportunity for us. We see an opportunity with Elo to take their product lines around the world globally. Their primary markets are North America, some in Europe, but not nearly the reach we have. We see synergies and an opportunity to continue to create, what looks a lot like us.
Very robust hardware platform, well-respected in the industry, knowing it's a world-class, married with software that creates a competitive mode around it, which is we do with Mobility DNA and our software that allows their devices to be deployed in a customer environment, in an enterprise environment in an easy way, and to be able to monitor and control those devices in that environment. That's what they offer. A lot of crossover in distribution and customers overall, but lots of places we can take it into geographies or customers where we have a strong-
Mm-hmm.
...base today. We've talked about $25 million in synergies. We're about $10 million now identified from a cost perspective, but the big opportunity there is really around revenue synergies.
Okay.
Is how do we drive more revenue around the world?
I mean-I think you've traditionally been known as kind of having more within kind of back-of-counter or warehouse. Just what was it about now kind of, you know, you mentioned the, you know, maybe some of the point-of-sale market kind of becoming more of an opportunity, but just how do you see that frontline opportunity emerging?
Yeah. I think that, you know, we're in both. I think it's one of the things we actually did like about them is that if we think about our position in retail, it is in front-of-store retail with associates. It's in kind of back of store. It's back into distribution centers, right? We have multiple applications that we could provide within the retail environment across flatbed scanning or scanning products or mobile devices, you know, augmenting forklifts with, you know-
Yeah.
...devices and others. There's lots of opportunity. Elo is the same way. If you take Quick Service is a good example, where recently they won some opportunities in, you know, winning the customer-facing kiosk within quick service restaurants. They also have an opportunity for point of sale and demand lanes and payment. They also have an opportunity where touch screens are increasingly being used in kitchen environments or production and manufacturing. There's multiple opportunities, not just one within the customer base. Inside retail, it's manned lanes, it's self-service, it's media within the environment.
I think we like the idea that they can expand the portfolio beyond one use case into multiple, and that where we're the mobile device provider and they're not providing compute for point of sale, or they're not providing devices for self-serve or media within the retailer, we can go in and have those conversations and talk about joining up our software platforms together to give a single control mechanism for our customers across that entire footprint of Android devices. What you're seeing in their environment, just like we've moved to Android, really an increased need for Android, you know, both Windows and Android, but a move to Android, especially in a lot of these screens.
Okay. Then just on the revenue cross-sell opportunity, just how do you see that emerging kind of over, you know, either from a sales cycle or just from a, you know, red teaming on figuring-
Yeah.
... out kind of who are those target opportunities?
Yeah. We, you know, as you do in a normal sales cycle, you've identified opportunities around the globe with our sales team to say, "Hey, these are the target customers we think-
Yeah.
... have the largest opportunities." You know, you can look at some of the customers that we do a lot of business with today together and say, "What is the potential?" It's easy to figure out what the potential could be based on number of stores, how much they're selling today, and then you say, "That could be across other retailers," for instance, or Quick Service or others. The second is geography. We've picked a couple of geographies. Australia is an example where they're the supplier in one of the largest do it yourself retailers. It's well respected in Australia, but they don't have a full channel in Australia. They're not across all segments in Australia, where we've got a strong sales team and strong relationships.
We've picked that as the geography, one of the first geographies, and we picked others as well to say, "Hey, let's go in a measured way. We've got to sign up distribution. Our channel partners get to the end customers. You know, test those markets out and begin to win new opportunities." It's both places we have relationships today where we can bring them in, geographies where we have teams, and then we can augment those teams locally to say, "Hey, with a couple of experts, we can leverage our relationships, kind of overlay sales teams in those geographies to be able to get quick wins initially and then grow our business from there.
Got it. you know, maybe as we started 2025 and we were having this tariff discussion, you know, you were maybe a little bit more cautious just on elasticity of demand as you had to raise prices from tariffs. Just as you think about memory pricing, you know, just how did, you know, how did you end up seeing the elasticity of demand with some of those tariff price increases? How do you see the elasticity of demand with potential memory pricing?
Yeah. I think we're probably no different than many other companies today. We do a lot of work around pricing. That may be a bit different 'cause we do tier two distribution, and we make sure the channel margin's right at our distributors and our partners and then the end user customer. We spend a lot of time understanding our competition and where pricing's at. I think we do a lot of work there. I think what's not different than us and a lot of other, you know, companies is ultimately the tariffs were widespread and so is the memory issue ultimately. Our customers realize that this is just a structural change in the cost of-
Yeah.
... you know, memory today, ultimately they accept that. I think we saw with tariffs, as we've raised prices, we're certainly very thoughtful about where we raise price, how we raise it, what product areas, how we do it across the portfolio of good, better, best, lower cost devices, more expensive devices. We saw that really no impact on-
Mm-hmm.
... demand, and we really don't see it in memory as well. We ultimately expect that we'll see about half the pricing increase in 2026, and we'll cover the other half of the cost of tariff, which we say is about two-point impact in gross margin. We'll cover the other through productivity savings and other OpEx savings across the business.
Mm-hmm.
We'll cover the full 2% across the business. You can't cover the full percent of it in pricing in one year because we have pricing out there. We're raising pricing in first quarter, so we have time frames we gotta give notice on, and then you gotta see time to come through. We expect about half to come through in 2026 in pricing, and then the full coverage-
Mm-hmm.
... for 2027 will come out in the actual pricing. Then the other OpEx savings ultimately will go to the bottom line in 2027. They would've been, you know, increased EBITDA in 2026, unfortunately, we're gonna have to apply them to offset some of the memory 'cause you just won't get all the pricing come through.
Okay.
We feel pretty good about, you know, that pricing coming through and the volume staying there. Our customers aren't making a decision to not buy the next generation mobile device in their environment because it's $50 more expensive. It's just not.
Yeah.
It does-
Okay.
It's not the factor.
Okay. Got it. I know it's still early days and obviously a lot of fluidity, just recent Supreme Court ruling on tariffs, just is it changing how you or your customers are thinking about kind of tariff mitigation efforts?
Yeah. At this point, I think we have confidence about memory supply and the things we're doing around memory and pricing and others, as we went through this exercise before, right?
We went through supply chain challenges, certainly during COVID. Both our supply chain team and an engineering team, I think that's very similar to what's happening in memory today, where we're, you know, securing supply, placing orders early across the suppliers, making sure we have those commitment suppliers. We've raised price before, just like we did in tariffs. We're doing the same thing in memory. The teams have a great job of realizing those price increases. The recent tariff court ruling is actually a positive for us, so it's a tailwind. The rates are a bit lower than what we're paying today. We've moved our supply chain from, you know, about 80% from China into the U.S. to about 20%. We are shipping, you know, electronic manufacturing from-
...is really not in the U.S., so it's not an option for us. We're shipping from Vietnam, Malaysia, you know, Mexico into the U.S. Those Southeast Asia countries are in the 20s today, you know, 20-plus-ish% cost of tariff. Now if it's 10% or 15%, that's actually a positive for us. Ultimately, if the rebates happen across tariffs, that'll also be a positive from a cash flow perspective. I think this is positive news. Now we'll see what plays out, right?
Yeah.
I think at this point, less and less of our customers are talking about tariffs. I think they wanna put it behind them, and I think the new topic's been memory.
Yeah.
And I think that, you know, we've solved that as well.
Okay. I mean, you mentioned inventory. Just are there memory swaps? Like, just what other actions other than just kind of, you know, getting your hands on-
Yeah. Yeah.
... supply and inventory?
Yeah. it's we're using three different suppliers, you know, across the ones, the likely ones that everybody knows. We've had long-standing relationships with them. We've been working very closely with them since this issue was raised. you know, one example beyond just securing supply and making sure we have our orders in and they know what our demand is, there's probably two other things we're doing. One is we've been taking their lead on qualifying new memory that ultimately will be produced in higher quantities, you know, starting kinda second quarter and through 2027. Qualifying new memory that ultimately will have better capacity availability-
Mm-hmm.
... and new memory they're bringing online that they're going to go focus on. We've been working with Qualcomm and ourselves and others to make sure we qualify that in the timeframe that they ask us. We've also been placing orders in the timeframe they've asked. Tell us you're, you know, closely working with them, saying, "Here's our demand signal. Here's what we need from you."
Yeah.
We've also been working with our partners and our customers to say, "Let's get the right SKUs forecasted for your environment." Because if you need X amount of memory in this product, I don't wanna go build a different product and turn out not have the product for you. The worst thing I can do is, in the scarcity of memory, build product that ultimately you don't wanna buy.
Right.
We're making sure that we understand really working closely with our customers and partners to make sure we've got a forecast down to the SKU level that ultimately says, "I'm gonna have the supply you need when you need it." I think that's given an opportunity to have these earlier conversations about-
Yeah.
...opportunities from our partners with our customers. We don't see them buying ahead. I think just the realization the prices have gone up, but more the idea that they know if they want supply, it's in their best interest to give early visibility to our partners. I think those two things are the biggest.
Okay. Got it. You know, RFID, you mentioned earlier, it's been a source of strength in the recent years. I've been around long enough to go through many RFID hype cycles.
Yeah.
You know, why do you think that now is the time that we are finally starting to see it? Are there other ways you can kinda increase participation in this market?
Yeah. I think that the RFID has been, you know, solid, you know, strong double-digit growth, right, over the last couple of years. I think the excitement everyone has about RFID is really the number of items being tagged, right? The number of ICs and tags being put on items at the point of manufacturer, which is really where it needs to be happened to be effective and efficient, right?
Mm-hmm.
The majority of tags have to, you know, start there. I think that we're seeing increased usage of tags and technology that allow to use tags on almost anything today. The evolution of tags, the evolution of the cost of tags, and the number of things being a source tag. I think you're also seeing adoption much broader than retail. I think while you're still seeing categories increased across retail and many retailers still in a journey of adopting RFID, plenty of opportunities there. I think some other markets that were kind of never thought to be an opportunity. Transportation logistics, literally, you know, someone like UPS, you know, tagging every parcel through their network with, you know, RFID. You're seeing other T&L providers, you know, follow.
I think that's a, an opportunity through the supply chain, moving back from retail into parcels, not just individual manufactured goods. I think you're seeing grocery, which no one thought was ever really an opportunity with low margin. You know, you're not gonna tag items inside grocery. Now, the realization that RFID gives you much more than just visibility of inventory. It allows you to track freshness. It allows you to track things like bakery, where I need to bake new items for that day. Ultimately, what count do I have left on the shelf? Quick cycle counting allows you to prevent, you know, waste ultimately by marking down goods faster. I think at the outside of the grocery store where you have perishable higher margin goods, you're seeing more value. I think that the applications are growing.
You're never probably gonna tag a can of beans, right, in a retail store. you know, bread and milk and bakery and others that have higher margin and you get-
Yeah.
... higher return on investment we're seeing happen. I think the use cases continue to multiply, and they're growing throughout the entire supply chain. I think that you're gonna see this ubiquity continue to grow. I think, you know, what we're doing is working closely with, you know, folks like Impinj and Avery, and the leaders in the market for ICs and tags to make sure that all together we're going to customers saying, "We can make this deployment easy for you as the three largest suppliers in the marketplace." Us, the world's leader in readers. You know, Impinj from a chip perspective, and then Avery from a tag perspective, to make sure we're there to support our customers and the use case associated with it.
I think there's also an opportunity looking forward for Zebra to move up the stack from a software perspective. We're adding capabilities to our software layer today above our mobile devices that are, you know, ingest RFID technology. I think there's an opportunity to bring together multiple applications in a software layer that beyond just locates, but also through the application layer. I think there's some new opportunities there for us. Our latest mobile devices all have RFID functionality, reading functionality into them. Short-range RFID, think of applications like, I wanna find a parcel in a truck when I'm doing parcel delivery. I wanna find a piece of inventory when picking. We think that also drives higher ASPs of our mobile devices, you know, from a selling price perspective.
Also along with AI and the idea of faster memory, more processing power, RFID is another reason from a technology perspective to upgrade those devices in your environment.
Got it. You haven't seen New York before, a grocery store before. A store. We might be inventorying cans of beans, but. All right. You know, another question that we get frequently, is just about kind of risk of labor loss to warehousing and how Zebra would be positioned here. You know, how do you answer that question, which I'm sure you also get from investors? Kind of what do you think that the discussion about robots or physical AI, you know, misses kind of about what you're seeing?
Yeah, I mean, we think automation and AI, you know, physical AI or AI at the frontline of business are both advantageous to Zebra, right? As I said before, you've got to have visibility to your assets to automate within your environment. And, you know, whether it's the, you know, printing an RFID label, whether it's printing a barcode label, whether it's scanning an item, whether it's using reading an RFID tag, the idea of having asset visibility and digitizing the environment is the only real way to automate.
Mm-hmm.
When I think of automation, I think of analytics. Sensing what's happening in the environment, you know, where is the inventory? Where is the pallet? Where is something? I can go analyze to take the next best action in my business. The analytics have gotten stronger with AI or automations continue to do things like take steps out of the picking process within e-commerce picking.
Mm-hmm.
It hasn't eliminated the need for a worker to be connected or someone to use a scanner to actually scan the individual item. It's taken things like steps out of the workflow, right?
Yeah.
I think that when you go to connected frontline worker, you say workers need to be connected. If I go back to automation, about 25% of warehouses around the world have any automation at all.
Mm-hmm.
Connected frontline workers, there's about 50% of workers today are actually connected. The opportunity is bigger to automate and use any type of automation, including barcode scanning in, you know, warehouses around the world and to connect those other 50% of workers than will ever be replaced by automation.
Mm-hmm.
The majority of automation today is being used to really keep up. I can't hire the number of resources I really need, and I need productivity in my business to be able to meet the demands of my customer in speed as well as cost to be able to go do that. Even the largest e-commerce supplier in the world continues to grow the number of devices they have from us, despite having extreme levels of automation, right?
Yeah.
They're probably the most automated, you know, in the world on e-commerce picking, but the number of devices they buy from us continues to grow.
Yeah. Okay. Got it. You know, the Fetch acquisition maybe didn't give you quite the expansion and capabilities you were looking for on robotics. Is there any other ways, which you think about kind of participating in that market?
Yeah. I think that, you know, that market didn't mature the way we expected it to mature, and others did as well. I think there was a, you know, a lot of growth expectations of, you know, the AMR market that didn't really play out. I think that, you know, overall, there's multiple ways we participate. One is we've shifted our focus to other areas. You know, RFID, our machine vision, you know, we expect growth in our machine vision portfolio in 2026. We see opportunities in AI. We just saw better opportunities for that use of R&D spending and resources across the business in leadership time and others. We still participate in a couple of ways.
One is our machine vision solutions, including our Photoneo acquisition, you know, are leveraged inside robotic solutions to be able to direct robots and others. We have venture investments inside multiple robotic companies that ultimately we keep an eye on and figure out, you know, and close to and figure out what's really happening in that market. We just didn't see the profitability evolving in that space to a level that made a lot of sense for us.
Got it. you know, you mentioned healthcare as kind of an emerging opportunity. Just where are you seeing, you know, I think thought about patient tagging-
Yeah, yeah.
... or prescription tagging, but just like, how is that market evolving?
Yeah. I would say that, you know, our healthcare team would say, the barcode is the unsung hero of healthcare, right? Because if you really think about it, barcode reading inside healthcare drives the entire healthcare system, right?
Yeah.
Whether it's tracking a patient with a wristband, you talked about whether it's a, you know, a label on a vial to be tested, whether it's putting information into an electronic medical records for track and trace, right? We're seeing the evolution of continued need for track and trace ever more so inside the environment. electronic medical records we take for granted here in the U.S., but in places like Ireland, there's only two hospital systems that have electronic medical records.
Yeah.
Around the world, there's a tremendous opportunity for healthcare to become what it is here in the U.S. around tracking and tracing and medical records for individuals. We see RFID, additional use cases there as things like confined inventory or tracking things like, you know, IV pumps or other medical equipment in the hospital. Every hospital system, you know, every hospital across the street has a rental location where they're renting things like IV pumps and others because they can't find the ones they have.
Yeah.
That's a lot of savings if you can go track what's happening in the environment, just from a medical tools perspective. I think that this opportunity continues to grow, but I think the biggest piece of it is tablets and mobile devices. I think scanning is just fundamental to what they do, and our printing portfolio continues to grow in healthcare.
Got it. Maybe just last question for you. Just how are you thinking about kind of capital allocation priorities?
Yeah. I think that, you know, at the moment, we're buying our stock back at the valuation levels that we're spending. We've committed to about 50% of our free cash flow this year just at the, you know, price levels our stock is at today, and we'll spend a lot of that free cash flow in the first half of the year. Here is our plan. From an acquisition perspective, we're focused on integrating Elo and getting the synergies, you know, across that. We continue to be inquisitive beyond organic investment in R&D, which we see as our primary focus of investment from a new product and solutions portfolio.
We're still inquisitive in the marketplace around assets that would make sense to us, to own from an R&D perspective and give us faster time to market and open into new market areas. For the moment, we're focused on, you know, buying our stock back and integrating Elo.
Got it. All right. Well, Bill, thanks so much for being here today.
Yeah, thank you.