Garmin (GRMN) Q1 2026 earnings summary

Executive summary

• Achieved record first quarter revenue of $1.75 billion, up 14% year-over-year, with double-digit growth in Fitness (42%), Aviation (18%), and Marine (11%) segments, and record operating income of $432 million, up 30% year-over-year.

• Gross margin expanded to 59.4% and operating margin to 24.6%, resulting in record operating income and strong profitability.

• GAAP EPS was $2.09 and pro forma EPS was $2.08, a 29% increase in pro forma EPS year-over-year.

• Net income rose 22% to $405 million, driven by growth in fitness, aviation, and marine segments.

• Strong performance attributed to a diversified business model, robust product lineup, and resilient consumer demand.

Financial highlights

• Revenue grew 14% year-over-year to $1.753 billion, with double-digit growth in Fitness, Aviation, and Marine; net income was $405 million, and gross margin expanded by 180 basis points to 59.4%.

• Operating income rose 30% to $432 million; operating margin improved by 290 basis points to 24.6%.

• GAAP EPS was $2.09; pro forma EPS was $2.08, both up year-over-year.

• Free cash flow for the quarter was $469 million, with operating cash flow at $536 million; cash and marketable securities totaled $4.3 billion.

• Operating expenses increased 11% year-over-year, mainly due to higher personnel costs.

Outlook and guidance

• Fiscal year 2026 guidance maintained at $7.9 billion in revenue and pro forma EPS of $9.35, with updates to be provided as the year progresses.

• Fitness expected to be the strongest contributor to 2026 consolidated growth; Outdoor segment performance in Q2 expected to be similar to Q1, with stronger performance anticipated in the second half due to product launches.

• Auto OEM revenue expected to decrease in 2026 due to BMW program ramp-down, with significant growth anticipated from Mercedes-Benz program starting in 2027.

• Board recommends a $4.20 per share annual dividend, payable in four quarterly installments.

• Management expects existing cash balances and operating cash flow to be sufficient for short- and long-term needs.