third quarter 2026
Filed Oct 28, 2026Garmin announces third quarter 2026 results: record third quarter operating results and raises full year guidance
Third-quarter net sales increased 12%, operating income increased 34%, gross margin expanded to 63.3%, pro forma diluted EPS increased 39%, and the company raised full-year 2026 guidance.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, 13-Weeks Ended September 26, 2026GAAP | $1.99B | – | 12% |
| Net sales, 39-Weeks Ended September 26, 2026GAAP | $5.76B | – | 13% |
| Cost of goods sold, 13-Weeks Ended September 26, 2026GAAP | 728.3M | – | – |
| Gross profit, 13-Weeks Ended September 26, 2026GAAP | 1.26B | – | 20% |
| Gross margin, 13-Weeks Ended September 26, 2026GAAP | 63.3% | – | expanded 420 basis points |
| Gross profit, 39-Weeks Ended September 26, 2026GAAP | 3.56B | – | 19% |
| Gross margin, 39-Weeks Ended September 26, 2026GAAP | 61.8% | – | – |
| Research and development expense, 13-Weeks Ended September 26, 2026GAAP | 312.9M | – | 9% |
| Selling, general and administrative expenses, 13-Weeks Ended September 26, 2026GAAP | 333.2M | – | 10% |
| Total operating expense, 13-Weeks Ended September 26, 2026GAAP | 646.1M | – | 10% |
| Total operating expense, 39-Weeks Ended September 26, 2026GAAP | 1.90B | – | – |
| Operating income, 13-Weeks Ended September 26, 2026GAAP | 611.6M | – | 34% |
| Operating income margin, 13-Weeks Ended September 26, 2026GAAP | 30.8% | – | – |
| Operating income, 39-Weeks Ended September 26, 2026GAAP | 1.66B | – | 31% |
| Operating income margin, 39-Weeks Ended September 26, 2026GAAP | 28.8% | – | – |
| Interest income, 13-Weeks Ended September 26, 2026GAAP | 36.36M | – | – |
| Foreign currency gains, 13-Weeks Ended September 26, 2026GAAP | 9.79M | – | – |
| Total other income (expense), 13-Weeks Ended September 26, 2026GAAP | 49.47M | – | – |
| Income before income taxes, 13-Weeks Ended September 26, 2026GAAP | 661.1M | – | – |
| Income tax provision, 13-Weeks Ended September 26, 2026GAAP | 119.5M | – | – |
| Effective tax rate, 13-Weeks Ended September 26, 2026GAAP | 18.1% | – | – |
| Net income, 13-Weeks Ended September 26, 2026GAAP | $541.7M | – | – |
| Net income, 39-Weeks Ended September 26, 2026GAAP | $1.49B | – | – |
| GAAP basic EPS, 13-Weeks Ended September 26, 2026GAAP | $2.81 | – | – |
| GAAP diluted EPS, 13-Weeks Ended September 26, 2026GAAP | $2.80 | – | 35% |
| GAAP basic EPS, 39-Weeks Ended September 26, 2026GAAP | $7.72 | – | – |
| GAAP diluted EPS, 39-Weeks Ended September 26, 2026GAAP | $7.69 | – | 31% |
| Pro forma net income, 13-Weeks Ended September 26, 2026non-GAAP | $533.6M | – | – |
| Pro forma diluted EPS, 13-Weeks Ended September 26, 2026non-GAAP | $2.76 | – | 39% |
| Pro forma net income, 39-Weeks Ended September 26, 2026non-GAAP | $1.48B | – | – |
| Pro forma diluted EPS, 39-Weeks Ended September 26, 2026non-GAAP | $7.65 | – | 33% |
| Net cash provided by operating activities, 13-Weeks Ended September 26, 2026GAAP | $393.9M | – | – |
| Free cash flow, 13-Weeks Ended September 26, 2026non-GAAP | $293.3M | – | – |
| Net cash provided by operating activities, 39-Weeks Ended September 26, 2026GAAP | $1.33B | – | – |
| Purchases of property and equipment, 39-Weeks Ended September 26, 2026GAAP | −295.0M | – | – |
| Free cash flow, 39-Weeks Ended September 26, 2026non-GAAP | $1.04B | – | – |
| Americas net sales, 13-Weeks Ended September 26, 2026GAAP | 913.1M | – | 15% |
| EMEA net sales, 13-Weeks Ended September 26, 2026GAAP | 778.0M | – | 12% |
| APAC net sales, 13-Weeks Ended September 26, 2026GAAP | 295.0M | – | 4% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Fitness, 13-Weeks Ended September 26, 2026Growth led by strong demand for wearables. | $694.3M | – | 16% |
| Outdoor, 13-Weeks Ended September 26, 2026Growth primarily driven by adventure watches. | $597.3M | – | 20% |
| Aviation, 13-Weeks Ended September 26, 2026Growth primarily driven by OEM product categories. | $252.7M | – | 5% |
| Marine, 13-Weeks Ended September 26, 2026Broad-based growth across multiple categories, led by the sonar product category. | $309.9M | – | 16% |
| Auto OEM, 13-Weeks Ended September 26, 2026Revenue decreased primarily due to domain controllers. | $131.9M | – | (20)% |
| Fitness, 39-Weeks Ended September 26, 2026No driver stated for the 39-week period. | $2.00B | – | 26% |
| Outdoor, 39-Weeks Ended September 26, 2026No driver stated for the 39-week period. | $1.50B | – | 5% |
| Aviation, 39-Weeks Ended September 26, 2026No driver stated for the 39-week period. | $785.2M | – | 10% |
| Marine, 39-Weeks Ended September 26, 2026No driver stated for the 39-week period. | $1.01B | – | 14% |
| Auto OEM, 39-Weeks Ended September 26, 2026No driver stated for the 39-week period. | $474.6M | – | (6)% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal Year 2026 outlook
- Revenueapproximately $8.15 billion
- Gross margin61.0%
- Tax rate16.5%
- NotePro forma EPS of $10.80
- NoteOperating margin of 29.0%
Capital returns
- Paid a quarterly dividend of $202 million in the third quarter of 2026.
- Repurchased $41 million of the Company’s shares within the third quarter of 2026.
- Approximately $407 million remained as of September 26, 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 December 24, 2026 and record date of December 11, 2026.
- The remaining quarterly dividend installment is listed as $1.05 per share, with a dividend date of March 26, 2027 and record date of March 12, 2027.
- Dividends, 39-Weeks Ended September 26, 2026: (578,474) (In thousands), compared with (490,919) (In thousands).
- Purchase of treasury shares under share repurchase plan, 39-Weeks Ended September 26, 2026: (123,206) (In thousands), compared with (130,149) (In thousands).
What drove it
- Consolidated gross margin increased primarily because of favorable segment mix, lower product cost, and approximately $33 million in refunds of previously paid tariffs.
- Higher margins across all segments supported the 420-basis-point increase in consolidated third-quarter gross margin.
- Fitness growth was led by strong demand for wearables, while outdoor growth was primarily driven by adventure watches.
- Marine growth was broad-based across multiple categories and led by the sonar product category.
- Aviation revenue growth was primarily driven by OEM product categories.
- Americas, EMEA and APAC third-quarter net sales increased 15%, 12% and 4%, respectively.
Concerns
- Auto OEM revenue decreased 20% during the third quarter primarily due to domain controllers, and the segment recorded an operating loss of $12 million.
- Third-quarter operating cash flow was $393,855 (In thousands), compared with $485,616 (In thousands), while free cash flow was $293,268 (In thousands), compared with $425,133 (In thousands).
- Inventories increased to $2,251,741 (In thousands) as of September 26, 2026 from $1,772,257 (In thousands) as of December 27, 2025.
- The forward-looking measures do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items, and other potential pro forma adjustments.
What to watch
- Execution during the important holiday selling season cited by management.
- Whether the raised Fiscal Year 2026 outlook of approximately $8.15 billion in revenue and pro forma EPS of $10.80 is achieved.
- Sustainability of favorable segment mix, lower product cost and tariff refunds that supported third-quarter gross margin.
- The Auto OEM segment following its 20% third-quarter revenue decline and $12 million operating loss.
- Inventory levels, which were $2,251,741 (In thousands) as of September 26, 2026.
- The remaining approximately $407 million authorization in the share repurchase program.
Balance sheet and cash flow
- Cash and cash equivalents were $2,039,779 (In thousands) as of September 26, 2026, compared with $2,278,646 (In thousands) as of December 27, 2025.
- Marketable securities were $299,693 (In thousands) current and $1,727,086 (In thousands) noncurrent as of September 26, 2026.
- The company ended the quarter with cash and marketable securities of approximately $4.1 billion.
- Inventories were $2,251,741 (In thousands) as of September 26, 2026, compared with $1,772,257 (In thousands) as of December 27, 2025.
- Accounts receivable, net were $1,137,167 (In thousands) as of September 26, 2026, compared with $1,253,015 (In thousands) as of December 27, 2025.
- Total assets were $11,993,783 (In thousands) as of September 26, 2026, compared with $10,993,669 (In thousands) as of December 27, 2025.
- Total current liabilities were $2,128,252 (In thousands) as of September 26, 2026, compared with $1,720,071 (In thousands) as of December 27, 2025.
- Total stockholders’ equity was $9,549,526 (In thousands) as of September 26, 2026, compared with $8,972,564 (In thousands) as of December 27, 2025.
- Net cash used in investing activities, 39-Weeks Ended September 26, 2026: (841,341) (In thousands), compared with (513,828) (In thousands).
- Net cash used in financing activities, 39-Weeks Ended September 26, 2026: (717,324) (In thousands), compared with (625,479) (In thousands).
- Net decrease in cash, cash equivalents, and restricted cash, 39-Weeks Ended September 26, 2026: (238,836) (In thousands), compared with (6,608) (In thousands).
Analysis
Garmin reported record third-quarter net sales of $1,986,076 (In thousands), up 12% from $1,770,901 (In thousands). Growth extended across four of five segments, led by outdoor at 20%, with fitness and marine each increasing 16%. Fitness demand was led by wearables, outdoor growth was driven primarily by adventure watches, aviation benefited primarily from OEM product categories, and marine growth was led by sonar. Auto OEM was the exception, with revenue declining 20% primarily due to domain controllers.
Profitability increased faster than revenue. Gross profit rose 20% to 1,257,768 (In thousands), while gross margin expanded to 63.3% from 59.1%. Garmin attributed the consolidated gross-margin increase to favorable segment mix, lower product cost and approximately $33 million in refunds of previously paid tariffs. Operating income increased 34% to 611,648 (In thousands), and operating margin increased to 30.8% from 25.8%, despite total operating expense increasing 10% to 646,120 (In thousands).
GAAP net income was $541,661 (In thousands), compared with $401,615 (In thousands), while GAAP diluted EPS was $2.80 versus $2.08. Pro forma diluted EPS increased 39% to $2.76 from $1.99. The third-quarter effective tax rate declined to 18.1% from 21.2%; the company attributed the decrease primarily to increased expected U.S. deductions from provisions of U.S. tax legislation enacted in 2025 that became effective in 2026. Segment operating income was $231 million in fitness, $233 million in outdoor, $66 million in aviation and $94 million in marine, while Auto OEM recorded an operating loss of $12 million.
Cash generation was lower year over year in the quarter, with operating cash flow of $393,855 (In thousands) and free cash flow of $293,268 (In thousands), compared with $485,616 (In thousands) and $425,133 (In thousands), respectively. Garmin paid a quarterly dividend of $202 million and repurchased $41 million of shares, while retaining approximately $407 million in its authorized repurchase program. The company ended the quarter with approximately $4.1 billion of cash and marketable securities, although inventories rose to $2,251,741 (In thousands).
Management raised Fiscal Year 2026 guidance to approximately $8.15 billion of revenue and pro forma EPS of $10.80. The outlook assumes gross margin of 61.0%, operating margin of 29.0% and a full-year tax rate of 16.5%. The raised outlook follows 39-week net sales growth of 13% to $5,761,658 (In thousands), operating income growth of 31% to $1,658,821 (In thousands), and pro forma diluted EPS growth of 33% to $7.65.
Management, verbatim
We achieved another quarter of record operating results driven by strength across markets and product categories, with meaningful contributions from recently launched products. Our results were further enhanced by strong operational execution resulting in record consolidated gross margin and impressive operating profit leverage. We are raising our 2026 outlook based on the results we have achieved so far and the momentum we are experiencing as we enter the important holiday selling season.
Cliff Pemble, President and Chief Executive Officer of Garmin Ltd.
Not in the filing
stated, not guessed- Previous outlook was not provided; therefore, prior guidance figures and comparisons are unavailable.
- Prior-quarter values and sequential changes for reported operating metrics were not provided.
- Fiscal Year 2026 guidance for operating expenses was not provided.
- Debt balances were not reported in the condensed consolidated balance sheet.
- Third-quarter segment gross profit and operating income prior-year comparisons were reported in tables but segment margin prior-year values were not separately stated in the narrative.
- Fiscal Year 2026 guidance by segment revenue growth rate was referenced in forward-looking statements but not provided in the reported guidance section.
AlphAI 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.