second quarter 2026
Filed Jul 29, 2026Garmin announces second quarter 2026 results; Company reports record second quarter operating results and raises full year guidance
Record revenue and operating income, double-digit consolidated sales growth, broad margin expansion, 29% pro forma diluted EPS growth, strong cash generation, and raised full-year revenue and EPS guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $ 2,022,092 | – | 11% |
| Gross profitGAAP | 1,262,022 | – | 18% |
| Gross marginGAAP | 62.4 % | – | – |
| Total operating expenseGAAP | 646,514 | – | – |
| Operating incomeGAAP | 615,508 | – | 30% |
| Operating income marginGAAP | 30.4 % | – | – |
| GAAP diluted EPSGAAP | $ 2.80 | – | 35% |
| Pro forma diluted EPSnon-GAAP | $ 2.81 | – | 29% |
| Research and development expenseGAAP | 303,940 | – | – |
| Selling, general and administrative expensesGAAP | 342,574 | – | – |
| Interest incomeGAAP | 38,173 | – | – |
| Foreign currency lossesGAAP | (2,492 ) | – | – |
| Other expenseGAAP | (128 ) | – | – |
| Total other income (expense)GAAP | 35,553 | – | – |
| Operating cash flowsGAAP | $404 million | – | – |
| Free cash flownon-GAAP | $276 million | – | – |
| 26-Weeks Ended Net salesGAAP | $ 3,775,582 | – | 13% |
| 26-Weeks Ended Gross profitGAAP | 2,304,310 | – | 18% |
| 26-Weeks Ended Gross marginGAAP | 61.0 % | – | – |
| 26-Weeks Ended Operating incomeGAAP | 1,047,173 | – | 30% |
| 26-Weeks Ended Operating income marginGAAP | 27.7 % | – | – |
| 26-Weeks Ended GAAP diluted EPSGAAP | $ 4.89 | – | 29% |
| 26-Weeks Ended Pro forma diluted EPSnon-GAAP | $ 4.89 | – | 29% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| FitnessGrowth across all product categories, led by strong demand for advanced wearables. | 756,823 | – | 25% |
| OutdoorDecline primarily due to the consumer auto and adventure watch product categories. | 482,740 | – | (2)% |
| AviationGrowth in both the OEM and aftermarket product categories. | 268,749 | – | 8% |
| MarineBroad-based growth across multiple categories. | 341,369 | – | 14% |
| Auto OEMGrowth primarily due to domain controllers. | 172,411 | – | 1% |
Fiscal Year 2026 outlook
- Revenueapproximately $8.05 billion
- Gross margin59.7%
- Tax rate16.5%
- NotePro forma EPS of $10.00
- Noteoperating margin of 27.0%
Capital returns
- Paid a quarterly dividend of $202 million.
- Repurchased $43 million of the Company’s shares within the quarter.
- Approximately $448 million remained as of June 27, 2026 in the $500 million share repurchase program authorized through December 2028.
- Garmin shareholders approved a cash dividend in the total amount of $4.20 per share, payable in four equal installments.
- The next dividend installment is $1.05 per share, with a payment date of September 25, 2026 and a record date of September 11, 2026.
- The Board currently anticipates dividend installments of $1.05 per share on December 24, 2026 and March 26, 2027.
What drove it
- Consolidated gross margin expanded 360 basis points to 62.4%, with higher margins across all segments.
- The consolidated gross-margin increase was primarily attributable to favorable product mix within certain segments and approximately $21 million in refunds of previously paid tariffs.
- Fitness growth was led by strong demand for advanced wearables.
- Aviation grew in both OEM and aftermarket product categories.
- Marine delivered broad-based growth across multiple categories.
- Auto OEM operating income improved to $3 million from an operating loss in the prior-year period, driven by improved gross profit and lower research and development expenses.
- Garmin completed the strategic acquisition of TrainingPeaks and TrainHeroic.
Concerns
- Outdoor revenue decreased 2% primarily due to the consumer auto and adventure watch product categories.
- Auto OEM revenue increased 1%, primarily due to domain controllers.
- Total operating expenses increased 9%, while research and development expenses increased 10% and selling, general and administrative expenses increased 8%, driven primarily by personnel related costs.
- The effective tax rate was 16.8%, compared to 16.5% in the prior-year quarter, primarily due to income mix by jurisdiction.
What to watch
- Execution against raised Fiscal Year 2026 guidance for revenue of approximately $8.05 billion and pro forma EPS of $10.00.
- Whether Fitness demand for advanced wearables remains strong following the Forerunner 70, Forerunner 170, and CIRQA Smart Band launches.
- The trajectory of Outdoor revenue following the second-quarter decline in consumer auto and adventure watch product categories.
- Margin effects from favorable product mix and approximately $21 million in refunds of previously paid tariffs.
- Integration of the TrainingPeaks and TrainHeroic acquisition.
- Progress in Auto OEM following revenue growth of 1% and a return to operating income of $3 million.
Balance sheet and cash flow
- Generated operating cash flows of $404 million in the second quarter of 2026.
- Generated free cash flow of $276 million in the second quarter of 2026.
- Ended the quarter with cash and marketable securities of approximately $4.4 billion.
Analysis
Garmin reported record second-quarter net sales of $ 2,022,092, up 11%, and record operating income of 615,508, up 30%. Gross profit increased 18% to 1,262,022, while gross margin expanded to 62.4 % from 58.8 %. Operating income margin rose to 30.4 % from 26.0 %. GAAP diluted EPS was $ 2.80, and pro forma diluted EPS was $ 2.81, up 29%.
Revenue growth was led by Fitness, where revenue rose 25% to 756,823 on growth across all product categories led by advanced wearables. Marine revenue increased 14% to 341,369 with broad-based category growth, and Aviation revenue rose 8% to 268,749 across both OEM and aftermarket products. Outdoor was the exception, with revenue down (2)% to 482,740, primarily due to consumer auto and adventure watch categories. Auto OEM revenue increased 1% to 172,411, primarily due to domain controllers.
Margin performance was broad based. Garmin said consolidated gross margin expanded 360 basis points because of favorable product mix within certain segments and approximately $21 million in refunds of previously paid tariffs. Every segment reported higher gross-margin characteristics in the commentary, including 64% in Fitness, 69% in Outdoor, 75% in Aviation, and 61% in Marine. Total operating expense was 646,514 compared with 594,717, while operating income grew faster than sales and expenses.
Cash generation supported both shareholder returns and balance-sheet capacity. Garmin generated operating cash flows of $404 million and free cash flow of $276 million, paid a quarterly dividend of $202 million, and repurchased $43 million of shares. It ended the quarter with cash and marketable securities of approximately $4.4 billion and approximately $448 million remaining under its share repurchase program. Garmin also completed the acquisition of TrainingPeaks and TrainHeroic.
Management raised Fiscal Year 2026 guidance to revenue of approximately $8.05 billion and pro forma EPS of $10.00, based on gross margin of 59.7%, operating margin of 27.0%, and a full year tax rate of 16.5%. The principal reported operating watchpoints are the Outdoor revenue decline, modest Auto OEM revenue growth, operating-expense growth driven primarily by personnel-related costs, and the role of tariff refunds and favorable mix in second-quarter margin expansion.
Management, verbatim
We delivered another quarter of outstanding financial results with double-digit revenue growth and robust margin expansion, which resulted in record revenue and operating income. Each business segment contributed to these impressive results. Our performance in the first half of 2026 was very strong giving us confidence to raise our full year 2026 consolidated revenue and EPS guidance.
Cliff Pemble, President and Chief Executive Officer of Garmin Ltd.
Not in the filing
stated, not guessed- GAAP net income for the second quarter and 26-Weeks Ended periods is not present in the supplied filing text.
- Income before taxes, income tax expense, and net income lines are truncated in the supplied filing text.
- GAAP diluted share count and pro forma diluted share count are not present in the supplied filing text.
- Debt balance is not reported in the supplied filing text.
- Cash and marketable securities prior-year and prior-quarter comparisons are not reported in the supplied filing text.
- Operating cash flow and free cash flow prior-year and prior-quarter comparisons are not reported in the supplied filing text.
- Prior-quarter comparisons for revenue, segments, margins, operating income, and EPS are not reported in the supplied filing text.
- Prior Fiscal Year 2026 outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Fiscal Year 2026 operating-expense guidance is not reported.
- Segment gross-profit, gross-margin, operating-income, and operating-margin prior-year comparison figures are not reported on their respective segment lines in the supplied filing text.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.