GRMN earnings analysis
What we found in GRMN's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Garmin delivered a strong Q2, with revenue of $2.022 billion rising 11% year over year and operating income growing 30% to $615.5 million. Gross margin expanded 360 basis points to 62.4% and operating margin expanded 440 basis points to 30.4%, supported by product mix, operating leverage and approximately $21 million of tariff refunds. Fitness, Marine and Aviation growth outweighed a modest Outdoor decline, while first-half operating cash flow increased to $939.5 million. The filing does not provide updated quantitative guidance, and management flags chip-supply costs, foreign exchange and changing trade policies as uncertainties.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue accelerated to $2.022B
- Q2 revenue rose 11% year over year to $2.022 billion from $1.815 billion, and also increased 15.3% from Q1 2026 revenue of $1.754 billion. Unit sales grew approximately 9% to 5.686 million units.
- Gross margin expanded 360 bps
- Gross profit increased 18% to $1.262 billion, producing a 62.4% gross margin versus 58.8% a year ago, a 360-basis-point expansion. Favorable mix and approximately $21 million of tariff refunds, including about $14 million in Marine, supported the increase.
- Operating leverage drove profit growth
- Operating income rose 30% to $615.5 million from $472.3 million; operating margin reached 30.4%, up 440 basis points year over year and 580 basis points from Q1 2026's 24.6%. Net income grew $141.1 million to $541.9 million.
- Fitness and Marine led segment gains
- Fitness was the principal growth engine, with revenue up $151.4 million to $756.8 million, led by advanced wearables. Marine grew $42.1 million to $341.4 million, while Aviation added $19.4 million to $268.7 million.
- Cash generation and liquidity strengthened
- First-half operating cash flow increased to $939.5 million from $594.0 million. Garmin held approximately $4.4 billion of cash, cash equivalents and marketable securities at June 27, 2026.
- Expense growth trailed sales growth
- Operating expenses increased 9% to $646.5 million, below the 11% revenue increase, lowering opex by 80 basis points as a percentage of revenue. R&D rose 10% to $303.9 million, principally from engineering personnel costs.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Outdoor demand remains soft
- Outdoor revenue declined $7.6 million to $482.7 million from $490.4 million, driven by declines in consumer auto and adventure watches. Its operating expense rate rose 100 basis points year over year as revenue fell and expenses increased.
- Margin tailwind may not be recurring
- Management says recent memory-chip supply constraints have increased operating complexity and costs and may adversely affect future gross margin. Q2's 62.4% gross margin included a favorable approximately $21 million tariff-refund benefit, which may not recur.
- Large inventory and purchase commitments
- Near-term purchase commitments are substantial: inventory purchase obligations were $1.534 billion, including $1.170 billion due within 12 months, and other purchase obligations were $540.4 million, including $277.9 million due within 12 months.
- No formal risk-factor updates
- The filing reports no material changes to risk factors during the 26-week period ended June 27, 2026 versus the December 27, 2025 10-K. Nevertheless, Q2 recorded a $2.5 million foreign-currency loss, versus a $23.5 million loss a year earlier.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 62.4%
- Operating margin
- 30.4%
- Segment
- Fitness: $756.823 million revenue, versus $605.425 million in Q2 2025 (+25.0%)
- Segment
- Outdoor: $482.740 million, versus $490.357 million (-1.6%)
- Segment
- Aviation: $268.749 million, versus $249.366 million (+7.8%)
- Segment
- Marine: $341.369 million, versus $299.262 million (+14.1%)
- Segment
- Auto OEM: $172.411 million, versus $170.154 million (+1.3%)
What they said about what is next.
The 10-Q does not provide quantitative FY 2026 revenue or EPS guidance; outlook appears deferred to the earnings release/call. Management states that existing cash and operating cash flow are expected to fund projected working-capital needs, capital expenditures and other cash requirements.
The filing reads better than the one before it.
What came before.
- 10-Q · April 29, 2026
- Garmin Ltd. reported a strong Q1 2026 with revenue reaching $1.75 billion, a 14% increase year-over-year, and a dilutive EPS of $2.09, outperforming expectations by $0.25. The fitness segment led growth with a…
- 10-Q · October 29, 2025
- Garmin reported Q3 net sales of $1,770,901,000 and diluted EPS of $2.08. Revenue rose year‑over‑year (Q3 2024 net sales $1,586,022,000) and gross profit increased to $1,046,487,000, while operating margin compressed to…
- 10-Q · April 30, 2025
- Garmin reported Q1 net sales of $1,535,099 (in thousands), up from $1,381,649 (in thousands) year-over-year, with operating income of $332,824 (in thousands) and diluted EPS of $1.72. Operating cash flow was $420,788…
- 10-K · February 19, 2025
- Garmin’s 10-K emphasizes a multi-market product strategy (fitness, outdoor, aviation, marine, auto OEM), heavy R&D and a long history (over 300 million products delivered since inception, including more than 18 million…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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