Garmin Ltd

Record Q3 performance (broad strength) with margin leverage - Revenue: up 12% YoY to ~$1.186B - Gross margin: 63.3% (+20 bps YoY), helped by favorable mix, lower product costs, and tariff refunds (~$33M) - Operating income / margin: up 34% YoY to $612M; operating margin 30.8% (+100 bps) - EPS: GAAP $2.80, pro forma $2.76 (+39% pro forma EPS) - What’s good: strong operating leverage; mix and cost actions offset a tough macro component environment.

Full-year 2026 guidance raised; Q4 seasonality viewed positively - Updated revenue forecast: $8.15B (raised +$100M vs prior; +12% YoY) - Gross margin: ~61% (assumes higher raw material costs, especially memory) - Operating margin: ~29% (raised +200 bps vs prior) - Tax rate / EPS: tax 16.5% (unchanged); pro forma EPS $10.80 (raised +$0.80) - What’s good: management expects a record year of double-digit growth in both revenue and profit, supported by momentum into Q4 holiday season. - Channel/inventory note: retailer registrations outpaced sell-through, implying some mild channel destocking, but management still sees strong demand/pull and plans are strong for holiday replenishment.

Segment performance highlights + product launch momentum - Fitness: revenue +16% YoY to $694M (Q3 record); operating income $231M; margins expanded (63% gross / 33% op). Launched CIRQL Smart Ring—initial demand very strong; next-gen Edge cycling computers announced. - Outdoor: revenue +20% to $597M; operating income $233M; launched Fenix 9 / Fenix 9 Pro (including titanium case and larger AMOLED) and new navigator displays—expects continued Q4 growth. - Aviation: revenue +5% to $253M; operating income $66M. Milestones: G1000 integrated retrofits >1,000 systems; Autoland >2.5k aircraft; also updates to Garmin Pilot. - Marine: revenue +16% to $310M; operating income $94M. LiveScope Plus launch cited as key; margin expansion partly from tariff refund. - Auto OEM: revenue -20% to $132M, driven by domain controller decline; operating loss narrowed to $12M; expects Q4 YoY decline consistent with domain-controller ramp-down; next Mercedes program expected to drive 2027 growth. - Opportunity: strong innovation pipeline across most categories; Connect Plus adoption cited as outperforming broader segment growth and renewals/commitments after free periods are strong.