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, Aviation, and Marine segments and strong contributions from wearables and new product launches.

• Operating income reached $432 million, up 30% year-over-year, with operating margin expanding to 24.6%.

• Gross margin expanded to 59.4%, driven by favorable foreign currency impacts.

• Pro forma EPS was $2.08, up 29% year-over-year; GAAP EPS was $2.09.

• Growth was broad-based across all geographic regions, led by APAC (25%), EMEA (15%), and Americas (10%).

Financial highlights

• Net income for the quarter was $405.1 million, up from $332.8 million year-over-year.

• Free cash flow reached $469 million, with operating cash flow at $536 million and $4.3 billion in cash and marketable securities.

• Operating expenses rose 11% year-over-year, mainly from higher personnel costs in R&D and SG&A.

• Capital expenditures were $67 million, $27 million higher than the prior year.

• Diluted EPS was $2.09, up from $1.72 year-over-year.

Outlook and guidance

• Fiscal year 2026 guidance maintained at $7.9 billion in revenue and pro forma EPS of $9.35.

• Fitness segment expected to be the strongest contributor to consolidated growth in 2026.

• Outdoor segment performance in Q2 expected to be similar to Q1, with stronger growth 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 starting in 2027.

• Margin pressures from higher input costs expected to be muted in 2026, with more impact likely in 2027.