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…
Earnings analysis · 10-Q
GRMN earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
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…
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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.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
What stood out
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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.
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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.
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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.
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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.
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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.
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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.
What to watch
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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.
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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.
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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.
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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.
Management's outlook
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.
Earlier filings 4
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 itself. Analysis can contain errors; check the source document for full context.