Core Insights - Thailand's Board of Investment (BOI) has approved Garmin's investment of 3 billion THB to establish a factory in Chonburi, producing GPS smartwatches and smart GPS navigation devices for vehicles and vessels [1] - This factory will be Garmin's first in ASEAN and is expected to commence production in 2026, with products aimed for local sales and exports [1] - The factory will utilize modern assembly lines and advanced technologies, including sensors for real-time heart rate and blood oxygen level measurement, as well as motion trackers for distance measurement, reinforcing Thailand's position as a manufacturing hub for smart electronic devices in ASEAN [1]

Core Insights - Garmin has been awarded five CES 2026 Innovation Awards for its innovative technology across various categories, highlighting its commitment to redefining consumer technology [1][2][3] Product Innovations - The award-winning products include: - **fnix 8 Pro - MicroLED**: Recognized in the Fashion Tech category, it features the world's first MicroLED display and inReach technology for satellite and LTE connectivity [3][4] - **Venu 4**: Awarded in the Digital Health category, this smartwatch includes features for health status and lifestyle logging to help users track health trends [4] - **Forerunner 970**: A premium GPS running and triathlon smartwatch recognized in the Sports & Fitness category, it boasts a bright AMOLED display and advanced training features [4] - **Blaze Equine Wellness System**: This product, designed for horses, provides real-time health insights and data, earning recognition in the Pet & Animal Tech category [4] - **Descent S1 Buoy**: A revolutionary buoy that enhances diver communication and safety, recognized in the Sports & Fitness category [5] Event Information - CES 2026 will take place from January 6-9 in Las Vegas, where Garmin will showcase its award-winning products at booth 3453 in the LVCC West Hall [5]

Core Insights - Garmin's shares fell by 15% following the release of third-quarter earnings, which showed a 12% sales growth but flat earnings per share (EPS) [1] - Despite raising its full-year EPS guidance from $8 to $8.15, the results did not meet analysts' expectations, leading to the stock decline [1][2] - The company's price-to-earnings ratio increased from 15 in 2022 to 32 prior to the earnings report, indicating high market expectations that were not met in Q3 [2] Financial Performance - Garmin reported a 12% increase in sales for the third quarter, but earnings per share remained flat [1] - The company has raised its full-year EPS guidance from $8 to $8.15, reflecting a positive outlook despite the recent earnings miss [1] - Garmin has nearly $4 billion in cash and minimal debt, with a dividend growth of 8% over the last five years, utilizing only 41% of its total net income for dividend payments [4] Business Segments and Diversification - Garmin operates in five distinct business segments: fitness, outdoor, aviation, marine, and auto OEM, providing operational diversification and growth options [3] - The company has seen its sales growth reaccelerate over the last two years, although it slightly missed revenue expectations in the latest earnings report [7] Investment Potential - With a current price-to-earnings ratio of 26, Garmin is considered an attractive option for dividend growth investors [5] - The company has generated five times the total returns of the S&P 500 since 2000, indicating strong long-term performance potential [5]

Core Insights - The article emphasizes the importance of taking proactive steps towards career advancement by suggesting individuals start their own businesses instead of waiting for promotions that may not materialize [1]. Group 1 - The quote from Sallie Krawcheck encourages a shift in mindset from hoping for external validation to creating personal opportunities [1].

Core Insights - Garmin Ltd. reported third-quarter 2025 pro forma earnings of $1.99 per share, exceeding the Zacks Consensus Estimate by 0.5%, but the earnings remained flat year-over-year [1] - Net sales reached $1.77 billion, missing the Zacks Consensus Estimate by 1.1%, yet showing a 12% increase from the same quarter last year, driven by strong performance in the Fitness, Aviation, and Marine segments [1] Segment Performance - **Outdoor Segment (28.1% of Net Sales)**: Generated sales of $497.6 million, down 5% year-over-year due to weak consumer auto and adventure watch sales, with an operating income of $170 million and a 34% operating margin [2] - **Fitness Segment (33.9%)**: Recorded sales of $601 million, reflecting a 30% year-over-year increase, driven by strong demand for advanced wearables, with an operating income of $194 million and a 32% operating margin [3] - **Aviation Segment (13.6%)**: Achieved sales of $240.4 million, up 18% year-over-year, supported by strength in OEM and aftermarket products, with an operating income of $61 million and a 25% margin [4] - **Marine Segment (15.1%)**: Posted sales of $267 million, up 20% year-over-year, with an operating income of $49 million and a 19% margin [4] - **Auto OEM Segment (9.3%)**: Sales reached $164.8 million, down 2% year-over-year, with an operating loss of $17 million and a gross margin of 15% [5] Financial Results - Gross profit increased by 10% year-over-year to $1.05 billion, while gross margin contracted by 90 basis points to 59.1% [6] - Operating expenses rose by 15% year-over-year to $590 million, with operating income increasing by 4% to $456.8 million, and operating margin contracting by 180 basis points to 25.8% [6] Balance Sheet & Cash Flow - As of September 27, 2025, Garmin held $2.54 billion in cash and marketable securities, a slight decrease from $2.59 billion in the previous quarter [7] - Generated operating cash flow of $486 million and free cash flow of $425 million in the third quarter, with total operating and free cash flows for the first three quarters of 2025 at $1.08 billion and $933.3 million, respectively [7] Guidance Update - Garmin raised its 2025 pro forma EPS guidance to $8.15 from $8.0, reflecting confidence in continued margin strength, while projecting revenues for 2025 at $7.1 billion, unchanged from previous guidance [9][10] - The company anticipates a gross margin of 58.5% and an operating margin of 25.2% for 2025, an increase from the previous guidance of 24.8% [11]

Core Viewpoint - Garmin reported strong third-quarter earnings with a 12% year-over-year revenue increase, but the stock fell by 9.1% due to lower-than-expected growth compared to previous quarters and high investor expectations [1][2][7]. Financial Performance - Revenue increased by 12% year-over-year, with the fitness segment seeing a significant 30% growth [2]. - The company generated $425 million in free cash flow and paid out $173 million in dividends, ending the quarter with approximately $3.9 billion in cash and equivalents [4]. Market Reaction - Despite strong earnings and an increase in profit guidance for the year, the stock's decline reflects investor disappointment over the slower revenue growth compared to a 20% increase in Q2 [2][7]. - Garmin's forward price-to-earnings (P/E) ratio reached a three-year high of about 32, indicating that the stock may have been overvalued prior to the correction [3]. Investment Opportunity - The current drop in stock price is viewed as a potential buying opportunity for investors, given the company's solid financial position and growth prospects [5].

Financial Data and Key Metrics Changes - Consolidated revenue increased 12% to nearly $1.8 billion, setting a new third-quarter record, despite a strong comparison from last year when revenue increased over 24% [4] - Gross margin was 59.1%, a 90 basis point decrease from the prior quarter, while operating margin was 25.8%, a 180 basis point decrease compared to the prior quarter [15] - Operating income reached $457 million, up 4% year-over-year, with pro forma EPS of $1.99 and GAAP EPS of $2.08 [4][15] Business Segment Data and Key Metrics Changes - **Fitness Segment**: Revenue increased 30% to $601 million, with gross and operating margins at 60% and 32% respectively, resulting in operating income of $194 million [6][7] - **Outdoor Segment**: Revenue decreased 5% to $498 million, with gross and operating margins at 66% and 34% respectively, resulting in operating income of $170 million [8][10] - **Aviation Segment**: Revenue increased 18% to $240 million, with gross and operating margins at 75% and 25% respectively, resulting in operating income of $61 million [11] - **Marine Segment**: Revenue increased 20% to $267 million, with gross and operating margins at 56% and 19% respectively, resulting in operating income of $49 million [12][14] - **Auto OEM Segment**: Revenue decreased 2% to $165 million, with a gross margin of 15% leading to an operating loss of $17 million [14] Market Data and Key Metrics Changes - By geography, double-digit growth was achieved in all three regions: 14% in APAC, 13% in EMEA, and 10% in Americas [16] - Inventory increased year-over-year to approximately $1.9 billion, reflecting a strategy to increase inventory of high-demand product lines [17] Company Strategy and Development Direction - The company is focused on maintaining a diversified business model and anticipates delivering another record year of double-digit growth in revenue, operating income, and EPS [4][6] - New product launches, such as the Edge 550 and Edge 850 cycling computers, and the Bounce 2 smartwatch for kids, are part of the strategy to drive growth in the fitness segment [7][8] - The company is also expanding its presence in the equine wellness market with the Blaze Equine Wellness System [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue of $7.1 billion and raised full-year EPS guidance to $8.15, reflecting strong year-to-date performance [5][18] - The outdoor segment's revenue outlook was revised down due to the late launch of the fnix 8 Pro and high expectations following the previous year's successful product launches [20][21] - Management noted that the overall market for wearables remains strong, with opportunities for growth in both fitness and outdoor segments [29] Other Important Information - The effective tax rate increased to 21.2% due to new U.S. tax legislation affecting R&D cost capitalization [17][18] - Free cash flow for the third quarter was $425 million, with expectations of approximately $1.3 billion for the full year [17] Q&A Session Summary Question: What are the main drivers behind the downward revision to outdoor guidance? - Management indicated that the fnix 8 Pro's late launch and high expectations from previous product releases contributed to the revision [20][21] Question: Can you elaborate on the drivers behind the implied gross margin guide for Q4? - Management noted that higher product costs, tariffs, and warranty accruals impacted gross margins, while Q4 is typically more promotional [22][23][24] Question: How does the company view the cycle for fitness and outdoor segments? - Management sees ongoing opportunities for growth rather than cyclical ups and downs, emphasizing market share gains and product innovation [28][29] Question: What is the outlook for the auto OEM segment as legacy programs wind down? - Management expects revenue pressure in 2026 due to the end of life for certain programs, but anticipates new programs to come online in the latter half of 2026 [41] Question: What is driving the growth in the aviation segment? - Both OEM and aftermarket categories are performing strongly, with a long backlog in OEM and resilient consumer behavior in the aftermarket [42] Question: How is the company managing through the tariff situation? - Management stated that the tariff situation is stable, and they have made necessary short-term adjustments while focusing on long-term optimizations [70]

Financial Data and Key Metrics Changes - Consolidated revenue increased 12% to nearly $1.8 billion, setting a new third-quarter record, despite a strong comparison from last year when revenue increased over 24% [4] - Gross margin was 59.1%, a 90 basis point decrease from the prior quarter, primarily due to higher product costs [15] - Operating income reached $457 million, up 4% year-over-year, with a pro forma EPS of $1.99 and GAAP EPS of $2.08 [4][15] Business Segment Data and Key Metrics Changes - **Fitness Segment**: Revenue increased 30% to $601 million, driven by strong demand for advanced wearables, with gross and operating margins at 60% and 32% respectively [6][7] - **Outdoor Segment**: Revenue decreased 5% to $498 million, impacted by the anniversary of the Diesel Series launch and the Phoenix 8 launch, with gross and operating margins at 66% and 34% respectively [8][10] - **Aviation Segment**: Revenue increased 18% to $240 million, with gross and operating margins at 75% and 25% respectively [11] - **Marine Segment**: Revenue increased 20% to $267 million, with gross and operating margins expanding to 56% and 19% respectively [12][13] - **Auto OEM Segment**: Revenue decreased 2% to $165 million, with a gross margin of 15% negatively impacted by increased warranty costs, resulting in an operating loss of $17 million [14] Market Data and Key Metrics Changes - By geography, double-digit growth was achieved in all three regions: 14% in APAC, 13% in EMEA, and 10% in the Americas [16] Company Strategy and Development Direction - The company is focused on maintaining a diversified business model and anticipates delivering another record year of double-digit growth in revenue, operating income, and EPS [4][6] - The launch of new products, such as the Blaze Equine Wellness System and the Phoenix 8 Pro, reflects the company's strategy to innovate and capture market share in various segments [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue of $7.1 billion and raised full-year EPS guidance to $8.15, reflecting strong year-to-date performance [5][18] - The company is managing through tariff impacts and is focused on optimizing its supply chain structure [70] Other Important Information - The effective tax rate increased to 21.2% due to new U.S. tax legislation affecting R&D cost capitalization [17] - Free cash flow for the third quarter was $425 million, with full-year expectations of approximately $1.3 billion [17] Q&A Session Summary Question: Downward revision to outdoor guidance - Management noted that the Phoenix 8 Pro launched late in Q3, impacting expectations, and acknowledged that previous expectations may have been too high [20][21] Question: Drivers behind gross margin guide for Q4 - Management indicated that higher product costs, tariffs, and warranty accruals impacted gross margins, with Q4 being a more promotional period [22][23][24] Question: Cycle for fitness and outdoor segments - Management views the market as an ongoing opportunity for growth rather than a cyclical pattern, emphasizing strong product lines [28][29] Question: Channel inventory health - Management stated that channel inventory is healthy and lean, ready for Q4, with strong sell-out trends [36] Question: Growth in auto segment - Management anticipates revenue pressure in 2026 due to end-of-life programs but expects new programs to come online in the latter half of 2026 [41] Question: Drivers of growth in aviation segment - Both OEM and aftermarket segments are performing strongly, benefiting from a long backlog and resilient consumer behavior [42] Question: Accrued warranty costs in auto segment - Management clarified that accrued warranty costs were an isolated issue and that long-term margin targets remain unchanged [60][61] Question: Component supply environment - Management acknowledged impacts from the semiconductor market but believes it will benefit customers in the long term [62] Question: Marine segment guidance - Management noted that the end market is stabilizing, with positive consumer interest and market share gains [68]

Financial Data and Key Metrics Changes - Consolidated revenue increased 12% to nearly $1.8 billion, setting a new third-quarter record, with operating income of $457 million, up 4% year-over-year [4][14] - Pro forma EPS increased to $1.99, with full-year EPS guidance raised to $8.15, reflecting an increase of $0.15 over prior guidance [5][17] - Gross margin was 59.1%, a 90 basis point decrease from the prior quarter, while operating margin was 25.8%, a 180 basis point decrease compared to the prior quarter [14][16] Business Segment Performance - **Fitness Segment**: Revenue increased 30% to $601 million, with gross and operating margins of 60% and 32% respectively, resulting in operating income of $194 million [5][6] - **Outdoor Segment**: Revenue decreased 5% to $498 million, with gross and operating margins of 66% and 34% respectively, resulting in operating income of $170 million [8][10] - **Aviation Segment**: Revenue increased 18% to $240 million, with gross and operating margins of 75% and 25% respectively, resulting in operating income of $61 million [11] - **Marine Segment**: Revenue increased 20% to $267 million, with gross and operating margins of 56% and 19% respectively, resulting in operating income of $49 million [12][13] - **Auto OEM Segment**: Revenue decreased 2% to $165 million, with a gross margin of 15, resulting in an operating loss of $17 million [14] Market Data and Key Metrics Changes - Double-digit growth was achieved in all three regions: APAC (14%), EMEA (13%), and Americas (10%) [15] - Inventory increased year-over-year to approximately $1.9 billion, reflecting a strategy to increase inventory of high-demand product lines [16] Company Strategy and Industry Competition - The company is focused on maintaining a diversified business model and leveraging product innovation to capture market share in the wearables market [28] - The launch of new products, such as the Blaze Equine Wellness System, indicates a strategy to enter underserved markets [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another record year of double-digit growth in revenue, operating income, and EPS, driven by strong demand entering the holiday season [5][4] - The company acknowledged challenges in the outdoor segment due to product release cycles but remains optimistic about long-term growth [10][21] Other Important Information - The effective tax rate increased to 21.2% due to new U.S. tax legislation affecting R&D cost capitalization [17] - Free cash flow for the third quarter was $425 million, with expectations of approximately $1.3 billion for the full year [16] Q&A Session Summary Question: What are the main drivers behind the downward revision to outdoor guidance? - Management noted that the Phoenix 8 Pro launched late in Q3, impacting its performance, and acknowledged that expectations may have been too high initially [19][21] Question: Can you elaborate on the implied gross margin guide for Q4? - Management indicated that higher product costs, tariffs, and warranty accruals impacted gross margins, with Q4 being a more promotional period [22][24] Question: How does the company view the cycle for fitness and outdoor segments? - Management sees ongoing opportunities for growth rather than cyclical ups and downs, emphasizing strong market share potential [27][28] Question: What is the health of channel inventory? - Management reported that channel inventory is healthy, with strong sell-out trends in preparation for Q4 [35] Question: What are the expectations for auto OEM growth going into next year? - Management anticipates revenue pressure in 2026 as legacy programs wind down, but expects new programs to come online in the latter half of 2026 [38] Question: What is driving growth in the fitness business? - Growth is attributed to strong consumer behavior and new user registrations across various fitness products [41][42] Question: What is the outlook for the marine segment? - Management noted a stabilized end market with positive consumer interest and market share gains in various categories [56]

Financial Performance - Garmin achieved record third quarter consolidated revenue and operating income[6] - Consolidated revenue reached $1.77 billion, a 12% year-over-year increase[5] - Operating income was $457 million, a 4% year-over-year increase[5] - GAAP EPS was $2.08, a $0.01 increase year-over-year[17] Segment Performance - Fitness segment revenue grew by 30% year-over-year to $601 million, with an operating income of $194 million and a 32% operating margin[7] - Aviation segment revenue increased by 18% year-over-year to $240 million, with an operating income of $61 million and a 25% operating margin[11] - Marine segment revenue grew by 20% year-over-year to $267 million, with an operating income of $49 million and a 19% operating margin[14] - Outdoor segment revenue declined by 5% year-over-year to $498 million, with an operating income of $170 million and a 34% operating margin[9, 10] - Auto OEM segment revenue declined by 2% year-over-year to $165 million, with an operating loss of $17 million and a (10%) operating margin[15] Financial Position - Cash and marketable securities totaled $3.92 billion[22] - Accounts receivable was $956 million[22] - Inventory was $1.89 billion[22] - Free cash flow was $425 million[22] Guidance - The company is raising 2025 EPS guidance[6] - Revenue guidance for 2025 is $7.1 billion[23]