Garmin | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 2.022 B

Revenue: As of FY2026 Q2, the actual value is USD 2.022 B, beating the estimate of USD 1.936 B.

EPS: As of FY2026 Q2, the actual value is USD 2.8, beating the estimate of USD 2.2375.

EBIT: As of FY2026 Q2, the actual value is USD 612.89 M.

Garmin Ltd. reported record consolidated revenue of approximately $2.02 billion for the second quarter ended June 27, 2026, an 11% increase compared to the prior year quarter. Gross margin expanded to 62.4%, and operating margin reached 30.4% in the second quarter. The company achieved record operating income of $615.5 million, a 30% increase year-over-year.

Segment Revenue (13-Weeks Ended June 27, 2026)

• Fitness: Revenue increased 25% to $756.8 million, driven by strong demand for advanced wearables.
• Outdoor: Revenue decreased by 2% to $482.7 million, primarily due to consumer auto and adventure watch product categories.
• Aviation: Revenue grew 8% to $268.7 million, with growth in both OEM and aftermarket product categories.
• Marine: Revenue rose 14% to $341.4 million, reflecting broad-based growth across multiple categories.
• Auto OEM: Revenue increased 1% to $172.4 million, mainly attributed to domain controllers.

Segment Operating Income (13-Weeks Ended June 27, 2026)

• Fitness: Operating income was $277.0 million, with gross and operating margins of 64% and 37% respectively.
• Outdoor: Operating income was $163.6 million, with gross and operating margins of 69% and 34% respectively.
• Aviation: Operating income was $72.2 million, with gross and operating margins of 75% and 27% respectively.
• Marine: Operating income was $99.8 million, with gross and operating margins of 61% and 29% respectively.
• Auto OEM: Operating income improved to $2.9 million, compared to an operating loss in the prior-year period.

Consolidated Operational Metrics

• Gross Profit: Consolidated gross profit for Q2 2026 was $1,262.0 million, an 18% increase from $1,067.0 million in Q2 2025. The consolidated gross margin expanded 360 basis points to 62.4%, primarily due to favorable product mix and approximately $21 million in refunds of previously paid tariffs.
• Operating Income: Consolidated operating income was $615.5 million in Q2 2026, up from $472.3 million in Q2 2025.
• Total Operating Expenses: Total operating expenses in Q2 2026 were $647 million, a 9% increase over the prior year, driven by a 10% increase in research and development and an 8% increase in selling, general and administrative expenses, mainly due to personnel costs.
• Net Income: GAAP net income for Q2 2026 was $541.9 million, compared to $400.8 million in Q2 2025.
• Effective Tax Rate: The effective tax rate in Q2 2026 was 16.8%, slightly up from 16.5% in Q2 2025, primarily due to income mix by jurisdiction.

Cash Flow and Liquidity (13-Weeks Ended June 27, 2026)

• Operating Cash Flow: Garmin Ltd. generated $403.6 million in operating cash flows.
• Free Cash Flow: Free cash flow was $275.8 million.
• Dividends and Share Repurchases: The company paid a quarterly dividend of $202 million and repurchased $43 million of its shares.
• Cash and Marketable Securities: Garmin Ltd. ended the quarter with approximately $4.4 billion in cash and marketable securities.

Unique Operational Highlights

• Garmin Ltd. completed the strategic acquisition of TrainingPeaks® and TrainHeroic®, leading training platforms for athletes and coaches.
• The company unveiled AXISTM, a new family of highly scalable flight displays, and announced CIRQATM Smart Band, its first screenless smart band with health and wellness features.
• New product launches included the Forerunner® 70 and Forerunner 170 GPS running smartwatches, the Approach® Z10 laser rangefinder, the D2TM Mach 2 Pro aviator smartwatch, Garmin SignalTM VHF marine radios, and the next generation LiveScopeTM 2 sonar.
• For the 11th consecutive year, Garmin Ltd. was named Best Supplier of the Year by Embraer.

Fiscal Year 2026 Guidance

Garmin Ltd. raised its full year 2026 guidance based on strong first-half performance and a positive outlook. The company now anticipates revenue of approximately $8.05 billion and pro forma EPS of $10.00. This guidance is based on an expected gross margin of 59.7%, an operating margin of 27.0%, and a full year tax rate of 16.5%.