Garmin Ltd. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenue for the 13 weeks ended September 26, 2026, reached a record $1.986 billion, a 12% increase year-over-year (YoY); for the 39 weeks ended September 26, 2026, revenue was $5.762 billion, a 13% increase YoY.
• Gross margin expanded to 63.3% in Q3 2026 from 59.1% in the prior year quarter, driven by favorable segment mix, lower product costs, and approximately $33 million in tariff refunds.
• Operating income hit a record $611.6 million in Q3 2026, a 34% increase YoY; for the 39 weeks, operating income was $1.659 billion, a 31% increase YoY.
• Operating margin was 30.8% in Q3 2026 compared to 25.8% in the prior year quarter.
• GAAP diluted EPS was $2.80 in Q3 2026 (35% increase YoY); pro forma diluted EPS was $2.76 (39% increase YoY).
• Operating cash flow for Q3 2026 was $394 million; free cash flow was $293 million.
• The effective tax rate for Q3 2026 was 18.1%, down from 21.2% in the prior year quarter.
• Cash and marketable securities totaled approximately $4.1 billion at the end of the quarter.

Guidance and Future Outlook:

• Garmin raised full-year 2026 guidance based on strong first three quarters and momentum entering the holiday season.
• New full-year 2026 revenue guidance is approximately $8.15 billion.
• New full-year 2026 pro forma EPS guidance is $10.80.
• Updated full-year 2026 guidance assumes a gross margin of 61.0%, an operating margin of 29.0%, and a full-year tax rate of 16.5%.

Business Segments and Product Lines:

• Fitness: Revenue increased 16% YoY to $694.3 million in Q3; launched the CIRQA Smart Band and next-generation Edge cycling computers (Edge 1060 and Edge Explore 3).
• Outdoor: Revenue increased 20% YoY to $597.3 million in Q3; launched the fēnix 9 and fēnix 9 Pro series with titanium cases and AMOLED screens, plus Garmin Drive GPS navigators.
• Aviation: Revenue increased 5% YoY to $252.7 million in Q3; unveiled the G2000 PRIME flight deck, certified an all-glass retrofit for the Cessna CitationJet, and certified Garmin Autoland on PC-12 Pro and e1000 aircraft.
• Marine: Revenue increased 16% YoY to $309.9 million in Q3; launched LiveScope 2, GMI 40 instrument display, SmartDrive actuator, and JL Audio A60 head unit series.
• Auto OEM: Revenue decreased 20% YoY to $131.9 million in Q3, primarily due to domain controllers; recorded an operating loss of $12 million with a 16% gross margin.
• Garmin received 2026 Manufacturer of the Year from the National Marine Electronics Association for the 12th consecutive year and six Product of Excellence awards.
• The company delivered its 1,000th G1000 integrated flight deck retrofit for King Air aircraft.
• More than 2,500 aircraft are now equipped with the Garmin Autoland system.

Market and Competitive Landscape:

• Americas net sales grew 15% YoY in Q3 to $913.1 million.
• EMEA net sales grew 12% YoY in Q3 to $778.0 million.
• APAC net sales grew 4% YoY in Q3 to $295.0 million.

Risks and Challenges:

• The Auto OEM segment faced a 20% revenue decline due to domain controllers.
• Forward-looking statements note risks related to foreign currency exchange rates, tariffs, potential discrete tax items, and market uncertainties detailed in the Form 10-K.

Management Commentary and Tone:

• CEO Cliff Pemble stated the company achieved "another quarter of record operating results driven by strength across markets and product categories, with meaningful contributions from recently launched products."
• Management highlighted "strong operational execution resulting in record consolidated gross margin and impressive operating profit leverage."
• The tone was confident, citing momentum entering the "important holiday selling season" as the basis for raising full-year guidance.

Other Key Points:

• Garmin paid a quarterly dividend of $202 million in Q3 2026.
• The company repurchased $41 million of shares in Q3, leaving approximately $407 million remaining under the $500 million share repurchase program authorized through December 2028.
• The Board of Directors set December 24, 2026, as the payment date for the next dividend installment of $1.05 per share.
• Share repurchases and dividends totaled $717.3 million in cash used in financing activities for the 39 weeks ended September 26, 2026.
• Net payments for acquisitions were $320.6 million for the 39 weeks ended September 26, 2026.