SEC Filings

Garmin Raises 2026 Outlook To About $8.15 Billion In Sales After Record Quarter

Operating income climbed 34% to $612 million, while the auto OEM business fell 20% and posted a $12 million operating loss.

Garmin, which makes GPS-enabled fitness, outdoor, aviation, marine and automotive devices, reported record third-quarter revenue of $1.99 billion, up 12% from a year earlier, and raised its 2026 forecast, the company said Wednesday in an 8-K filing. Operating income hit $612 million, up 34%.

Margins widen, tariff refunds help

Pro forma earnings per share, which exclude currency gains and losses, were $2.76, up 39%. Earnings under standard accounting were $2.80 a share, up 35%.

Gross margin widened to 63.3% from 59.1%. The company credited favorable product mix, lower product costs and about $33 million in refunds of previously paid tariffs. Operating margin reached 30.8%, from 25.8%.

The effective tax rate fell to 18.1% from 21.2%, which Garmin attributed to expected U.S. deductions under tax legislation enacted in 2025 that took effect in 2026.

Outdoor leads growth, auto OEM shrinks

Outdoor was the fastest-growing business, with sales up 20% on adventure watches. Fitness, the largest segment at $694 million, rose 16% on demand for wearables. Marine also gained 16%, led by sonar, and aviation rose 5%, driven by sales to aircraft makers.

Auto OEM, which sells products built into vehicles by automakers, fell 20% mainly because of domain controllers. The segment lost $12 million at the operating line.

CEO Cliff Pemble credited "strength across markets and product categories, with meaningful contributions from recently launched products."

Guidance up, cash flow down

Garmin now expects 2026 revenue of about $8.15 billion and pro forma earnings of $10.80 a share, based on a 29.0% operating margin, 61.0% gross margin and a 16.5% tax rate.

Free cash flow fell to $293 million from $425 million a year earlier, as capital spending rose to $101 million. The company ended the quarter with about $4.1 billion in cash and marketable securities.

Garmin repurchased $41 million of stock, leaving about $407 million in its $500 million buyback program, which runs through December 2028.

The next $1.05-a-share dividend installment is payable December 24 to holders of record on December 11; the earnings call began at 10:30 a.m. Eastern Wednesday.