Garmin, Ltd. raised its earnings guidance for the year after reporting third-quarter results that slightly topped expectations. Sales jumped 12 percent, led by 30 percent growth in its Fitness segment and 20 percent in its Marine segment. The Outdoor segment declined 5 percent.

Highlights for the third quarter 2025 include:

  • Record consolidated revenue of approximately $1.8 billion, a 12 percent increase compared to the prior year quarter. Analysts’ consensus target had been $1.79 billion.
  • Gross and operating margins of 59.1 percent and 25.8 percent, respectively.
  • Record operating income of $457 million, a 4 percent increase compared to the prior year quarter.
  • GAAP EPS of $2.08 and pro forma EPS of $1.99, representing flat pro forma EPS compared to the prior year quarter. Analysts’ consensus target had been $1.98.

Cliff Pemble, president and chief executive officer, said, “We achieved another quarter of strong financial results with growth in both consolidated revenue and operating income, and we experienced strong double-digit revenue growth in three business segments reflecting the strength of our unique, diversified business model. Looking ahead, we are well-positioned for the holiday selling season with a strong lineup of innovative products.”

Segment Performance

  • Fitness: Revenue from the fitness segment increased 30 percent in the third quarter, driven by advanced wearables. Gross and operating margins were 60 percent and 32 percent, respectively, resulting in $194 million of operating income. During the quarter, Garmin launched the Edge 550 and Edge 850 cycling computers, bringing new coaching plans and cycling metrics to the Edge lineup; the Bounce 2 smartwatch for kids, offering voice calling, messaging and geofencing alerts; and the Venu 4 smartwatch with a metal design, a built-in flashlight, and new health and wellness features. Garmin also announced a collaboration with King’s College London, as the exclusive smartwatch provider for the EMBRACE program of research, to study the health of women and their partners during and after pregnancy, with emphasis on detecting and managing potentially dangerous conditions, including gestational diabetes and hypertension.
  • Outdoor: Revenue from the outdoor segment decreased 5 percent in the third quarter, primarily due to consumer auto and adventure watch product categories, as Garmin compared against strong prior-year product launch cycles. Gross and operating margins were 66 percent and 34 percent, respectively, resulting in $170 million of operating income. During the quarter, Garmin launched the Fēnix 8 Pro series, its first smartwatch with inReach satellite and cellular connectivity, offering a range of on-device communication options, including voice, text, tracking, and SOS, using the Garmin Response Center for on- and off-grid use. The company also launched the Fēnix 8 Pro MicroLED, the first smartwatch to feature a high-resolution MicroLED display for enhanced brightness and readability. Garmin also entered a new market with the launch of its Blaze equine wellness system, designed to help horse owners, riders, and trainers monitor a horse’s health and fitness. Also during the quarter, the company launched new products across its outdoor markets, including the GPSMAP H1 connected handheld, the Instinct Crossover hybrid smartwatch, the Descent S1 smart buoy, and the X30 large-format dive computer.
  • Aviation: Revenue from the aviation segment increased 18 percent in the third quarter, with growth in both the OEM and aftermarket product categories. Gross and operating margins were 75 percent and 25 percent, respectively, resulting in $61 million of operating income. During the quarter, Garmin certified a retrofit integrated cockpit system for the Cessna Citation CJ1. Also during the quarter, the company certified Autoland and Autothrottle capability for retrofit installation in select Beechcraft King Air 350 aircraft and announced additional certifications for its GFC 600 autopilot, bringing the performance and safety-enhancing benefits of its flight control technology to more aircraft models.
  • Marine: Revenue from the marine segment increased 20 percent in the third quarter with growth across multiple categories. Gross and operating margins were 56 percent and 19 percent, respectively, resulting in $49 million of operating income. During the quarter, Garmin launched the Force Current, a hands-free kayak propulsion system, and it expanded the Force Kraken trolling motor lineup, which now includes a model with a 110-inch driveshaft for large fishing boats. Garmin also launched the EchoMap Ultra 2 chartplotter with a 16-inch display.
  • Auto OEM: Revenue from the auto OEM segment decreased 2 percent during the third quarter as certain legacy programs approached end-of-life and were partially offset by growth in its most recent BMW domain controller program. Gross margin was 15 percent, and Garmin recorded an operating loss of $17 million in the quarter. During the quarter, Garmin shipped the three millionth BMW domain controller.

Additional Financial Information
Total operating expenses in the third quarter were $590 million, a 15 percent increase over the prior year. Research and development and selling, general and administrative expenses increased 15 percent and 14 percent, respectively. The main driver was personnel-related costs.

The effective tax rate in the third quarter was 21.2 percent. This compares with 17.9 percent in the prior-year quarter. The increase was primarily due to U.S. tax legislation enacted during the quarter. That led to a year-to-date adjustment from a decrease in expected U.S. tax deductions and credits.

In the third quarter of 2025, Garmin generated operating cash flows of $486 million. Free cash flow was $425 million. The company paid a quarterly dividend of approximately $173 million and repurchased $36 million of shares within the quarter. About $107 million remains as of September 27, 2025, in the $300 million share repurchase program authorized through December 2026. Garmin ended the quarter with cash and marketable securities of approximately $3.9 billion.

2025 Fiscal Year Guidance
Based on performance in the first three quarters of 2025 and recent trends, Garmin slightly raised its full-year 2025 EPS guidance. It now anticipates revenue of approximately $7.1 billion and pro forma EPS of $8.15. This is based on gross margin of 58.5 percent, operating margin of 25.2 percent, and a pro forma effective tax rate of 17.5 percent. Previous guidance called for revenue of approximately $7.1 billion and pro forma EPS of $8.00. Previous margins were gross margin of 58.5 percent, operating margin of 24.8 percent, and a full-year tax rate of 17.5 percent.

Image courtesy Garmin