Garmin(US:GRMN)2025-10-29 11:00Financial Performance - Record consolidated revenue of approximately $1.77 billion, a 12% increase compared to the prior year quarter[4] - Operating income reached $456.8 million, a 4% increase year-over-year, with an operating margin of 25.8%[5] - Fitness segment revenue increased by 30% to $601 million, driven by strong demand for advanced wearables[7] - Aviation segment revenue grew by 18% to $240 million, with significant growth in both OEM and aftermarket product categories[9] - Marine segment revenue increased by 20% to $267 million, with new product launches contributing to growth[10] - Auto OEM segment revenue decreased by 2% to $164 million, impacted by legacy programs nearing end-of-life[11] - Net sales for the 13 weeks ended September 27, 2025, reached $1,770,901, a 12% increase from $1,586,022 in the same period last year[31] - Gross profit for the 39 weeks ended September 27, 2025, was $2,998,043, compared to $2,616,630 for the same period in 2024, reflecting a significant increase[29] - Operating income for the 39 weeks ended September 27, 2025, was $1,261,922, up from $1,077,913 in the prior year, indicating strong operational performance[29] - Net income for the 39 weeks ended September 27, 2025, was $1,135,206, a 16% increase from $975,703 in the same period last year[27] - The company reported a diluted net income per share of $5.87 for the 39 weeks ended September 27, 2025, compared to $5.06 in the previous year[27] - GAAP net income for the 13 weeks ended September 27, 2025, was $401,615,000, compared to $399,111,000 for the same period in 2024, reflecting a slight increase[36] - Pro forma net income for the 39 weeks ended September 27, 2025, was $1,117,441,000, up from $962,809,000 in 2024, indicating a year-over-year growth of approximately 16.1%[36] Cash Flow and Expenses - Total operating expenses rose by 15% to $590 million, primarily due to increased personnel-related costs[12] - The company generated operating cash flows of $486 million and free cash flow of $425 million in the third quarter[14] - Free cash flow for the 39 weeks ended September 27, 2025, was $933,301,000, compared to $839,712,000 for the same period in 2024, representing an increase of about 11.1%[39] - Management believes free cash flow is a crucial liquidity measure, defined as operating cash flows less capital expenditures for property and equipment[38] Guidance and Dividends - Full year 2025 revenue guidance updated to approximately $7.10 billion, with pro forma EPS expected to be $8.15[15] - The Board of Directors approved a cash dividend of $0.90 per share, with the next payment date set for December 26, 2025[16] Regional Performance - The Americas region generated net sales of $795,624 for the 13 weeks ended September 27, 2025, a 10% increase year-over-year[31] - The EMEA region saw a 13% increase in net sales to $692,557 for the 13 weeks ended September 27, 2025, compared to the same period last year[31] Assets and Financial Position - Total assets increased to $10,522,878 as of September 27, 2025, from $9,630,527 at the end of 2024, indicating growth in the company's financial position[25] - Cash and cash equivalents at the end of the period were $2,073,546, slightly down from $2,080,154 at the beginning of the period[27] Research and Development - Research and development expenses increased to $831,247 for the 39 weeks ended September 27, 2025, compared to $734,848 in 2024, highlighting a focus on innovation[27] Tax and Currency Impact - The company's effective tax rates for the 13 weeks ended September 27, 2025, were 21.2% and 17.9% for the 39 weeks, reflecting the tax effect of foreign currency gains[37] - There were no discrete tax items identified in the first three quarters of 2025 and 2024, which is important for consistent comparison[34] - The estimated impact of foreign currency gains and losses on diluted net income per share was $0.10 for the 39-week period ended September 27, 2025[42] - The company is unable to estimate the future net effect of foreign currency exchange gains and losses on a forward-looking basis due to high variability[42] - Management's forward-looking financial measures for 2025 include economic assumptions such as foreign currency exchange rates and tariffs, which can change rapidly[40]