Core Insights - Garmin Ltd. reported second-quarter 2025 pro forma earnings of $2.17 per share, exceeding the Zacks Consensus Estimate by 10.7%, and showing a 37% year-over-year improvement [1] - Net sales reached $1.81 billion, surpassing the Zacks Consensus Estimate by 4.4%, and increased by 20% compared to the same quarter last year [1] - The growth in net sales was driven by strong performance across the Outdoor, Fitness, Aviation, Marine, and Auto OEM segments [1] Segment Performance - **Outdoor Segment**: Contributed 27% of net sales with $490.4 million, an 11% year-over-year increase, primarily due to strong adventure watch sales. Operating income was $158 million with a 32% margin [2] - **Fitness Segment**: Accounted for 33.4% of sales, generating $605.4 million, reflecting a 41% year-over-year increase driven by demand for advanced wearables. Operating income was $198 million with a 33% margin [3] - **Aviation Segment**: Made up 13.7% of sales with $249.4 million, a 14% year-over-year increase, supported by OEM and aftermarket products. Operating income was $63 million with a 25% margin [4] - **Marine Segment**: Contributed 16.5% of sales at $299.3 million, up 10% year-over-year, led by chartplotters. Operating income was $63 million with a 21% margin [5] - **Auto OEM Segment**: Generated $170.2 million in sales, marking a 16% year-over-year increase, but reported an operating loss of $10 million with a 6% gross margin [6] Financial Overview - Gross profit increased by 24% year-over-year to $1.07 billion, with a gross margin improvement of 150 basis points to 58.8% [7] - Operating expenses rose 14% year-over-year to $595 million, while operating income increased by 38% to $472.3 million, with an operating margin expansion of 330 basis points to 26% [7] - As of June 28, 2025, Garmin held $2.59 billion in cash and marketable securities, down from $2.67 billion in the previous quarter [8] Guidance Update - Garmin raised its 2025 revenue guidance to $7.1 billion from $6.85 billion, indicating an 8.7% year-over-year increase [10] - Pro forma EPS guidance was increased to $8.00 from $7.80, reflecting a 7.9% year-over-year increase [11] - The company expects a gross margin of 58.5% and an operating margin of 24.8% for 2025, with an effective tax rate forecast raised to 17.5% [11]

Core Insights - Garmin Ltd. reported first-quarter 2025 pro forma earnings of $1.61 per share, missing the Zacks Consensus Estimate by 2.41%, but showing a year-over-year improvement of 13.4% [1] - Net sales were $1.54 billion, which also missed the Zacks Consensus Estimate by 2%, yet increased by 11.1% compared to the same quarter last year [1][2] Segment Performance - **Outdoor Segment**: Contributed 28.6% of net sales with $438.5 million, up 20% year-over-year, driven by strong adventure watch sales, and an operating income of $128.8 million with a 29% margin [3] - **Fitness Segment**: Accounted for 25.1% of sales at $384.7 million, reflecting a 12% year-over-year increase, supported by demand for advanced wearables, with an operating income of $77.7 million and a 20% margin [3] - **Aviation Segment**: Generated $223.1 million in sales, a 3% increase year-over-year, with an operating income of $48.4 million and a 22% margin [4] - **Marine Segment**: Sales were $319.4 million, down 2% year-over-year due to promotional timing, with an operating income of $86.9 million and a 27% margin [4] - **Auto OEM Segment**: Achieved $169.3 million in sales, a 31% year-over-year increase, but reported an operating loss of $8.9 million with an 18% gross margin [5] Financial Metrics - Garmin's gross margin for Q1 2025 was 57.6%, a decrease of 50 basis points, while operating expenses grew by 10% to $552 million [6] - Operating income rose to $333 million, a 12% year-over-year increase, with a slight expansion in operating margin to 21.7% [6] - As of March 29, 2025, Garmin held $2.67 billion in cash and marketable securities, an increase from $2.5 billion in the previous quarter [7] - Operating cash flow for Q1 2025 was $420.8 million, with free cash flow at $380.7 million [7] Guidance and Outlook - Garmin expects fiscal 2025 revenues to reach $6.85 billion, an increase from previous guidance of $6.80 billion, while the Zacks Consensus Estimate indicates a year-over-year decline of 13.4% [8] - The company anticipates pro forma EPS of $7.80, with the Zacks Consensus Estimate at $1.65, suggesting a year-over-year decline of 16.2% [8] - Expected gross margin for 2025 is 58.5%, with an operating margin of 24.8% and a pro forma effective tax rate of 16.5% [9]