Garmin Q3 2026 Revenue Rises 12%, Full-Year Outlook Raised

Garmin Ltd. (NYSE: GRMN) reported record third-quarter revenue and operating income as growth in its Outdoor, Fitness and Marine businesses outweighed a decline in Auto OEM sales. The company also raised its 2026 outlook and now expects approximately $8.15 billion in revenue and pro forma earnings per share of $10.80.

Revenue for the quarter ended September 26 rose 12% year over year to $1.99 billion from $1.77 billion. Gross profit increased 20% to $1.26 billion, while gross margin expanded 420 basis points to 63.3%.

Operating expenses rose 10% to $646 million, including research and development spending of $313 million and selling, general and administrative expenses of $333 million. Because gross profit grew faster than expenses, operating income climbed 34% to $612 million and operating margin widened 500 basis points to 30.8%.

GAAP diluted earnings per share increased 35% to $2.80. Pro forma diluted EPS, which excludes foreign-currency gains or losses and related tax effects, rose 39% to a record $2.76. GAAP net income was $541.7 million, compared with $401.6 million a year earlier.

Outdoor and Fitness Lead Growth

Outdoor was Garmin’s fastest-growing segment during the quarter. Revenue advanced 20% to $597 million, led by demand for adventure watches. Operating income increased 37% to $233 million, producing a 39% operating margin. Product activity included the launch of the fenix 9 and fenix 9 Pro watches, as well as new Garmin Drive GPS navigators.

Fitness revenue rose 16% to $694 million, with the company citing strong demand for wearables. Segment operating income increased 19% to $231 million, and operating margin was 33%. Garmin launched the screenless CIRQA Smart Band during the period and recently announced a new generation of Edge cycling computers.

Marine revenue also grew 16%, reaching $310 million, as sonar products led the increase. Operating income surged 90% to $94 million, representing a 30% margin. The segment introduced the next-generation LiveScope 2 and expanded its sailboat and audio product lineups.

Aviation revenue increased 5% to $253 million, driven by original-equipment-manufacturer product categories. Operating income rose 8% to $66 million, with a 26% operating margin. Garmin launched the G2000 PRIME for piston aircraft, announced certification of an all-glass retrofit cockpit for the original Cessna CitationJet and expanded SmartCharts coverage to Canada and Mexico.

Auto OEM remained the only segment reporting lower sales. Revenue declined 20% to $132 million, primarily because of domain controllers. The segment recorded a $12 million operating loss, equivalent to a negative 9% margin, though Garmin said the loss narrowed due to lower operating expenses. The company continues to work toward launching its Mercedes-Benz domain controller program.

Geographically, revenue increased across all reported regions. Sales in the Americas rose 15% to $913 million, EMEA revenue grew 12% to $778 million, and Asia-Pacific sales increased 4% to $295 million.

2026 Outlook and Cash Flow

Garmin’s updated 2026 guidance calls for approximately $8.15 billion in revenue, a 61% gross margin and a 29% operating margin. The company expects a 16.5% tax rate and pro forma EPS of about $10.80. The forward-looking guidance excludes potential foreign-currency gains and losses, discrete tax items and other possible pro forma adjustments that cannot be reasonably estimated.

Third-quarter free cash flow was $293.3 million, down from $425.1 million in the prior-year quarter. Net cash provided by operating activities declined to $393.9 million from $485.6 million, while capital expenditures increased to $100.6 million from $60.5 million. Garmin paid $202 million in dividends and repurchased $41 million of shares during the quarter. Cash and marketable securities totaled $4.10 billion.

Management cautioned that actual results could differ materially from its projections. Identified uncertainties include foreign-exchange movements, tariffs and other global trade effects, expenses, pricing, product launches and tax items. Garmin also noted that non-operating currency gains and losses remain difficult to forecast because of their variability and limited visibility.