01—Abstract
Summary
Summary of the 10-Q filed April 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Garmin Ltd. reported a strong first quarter for fiscal year 2026, with net sales increasing by 14% year-over-year to $1.75 billiona.
This growth was primarily driven by a significant surge in the Fitness segment, up 42%, and solid performance in Aviation and Marine. Net income saw a substantial increase of 22% to $405.1 millionb, resulting in diluted earnings per share of $2.09, up from $1.72 in the prior year.
The company also demonstrated robust operational efficiency, with operating income growing by 30% and consolidated gross margin improving to 59%. The company maintains a healthy liquidity position with approximately $4.3 billionc in cash, cash equivalents, and marketable securities, supporting ongoing investments in R&D and capital expenditures, alongside returning capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Net sales increased by 14% to $1.75 billion in Q1 2026 compared to Q1 2025.
- Net income rose by 22% to $405.1 million, with diluted EPS growing to $2.09.
- The Fitness segment was a standout performer, with net sales up 42% year-over-year.
- Consolidated gross margin improved by 180 basis points to 59%, driven by favorable foreign currency impacts and product mix.
- Operating income increased by 30% to $431.7 million, reflecting strong sales growth and operational leverage.
- The company repurchased shares valued at $9,000 under its new $500 million repurchase program initiated in February 2026.
- Garmin ended the quarter with $2.29 billion in cash and cash equivalents, and $4.3 billion in total cash, cash equivalents, and marketable securities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Garmin Ltd kept $0.23.
- Revenue$1.75B100.0%
- Cost of revenue−$711.2M40.6%
- Gross profit$1.04B59.4%
- Operating costs−$610.6M34.8%
- Operating income$431.7M24.6%
- Interest, other & tax−$26.6M1.5%
- Net income$405.1M23.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 29, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.75B$1.54B | +14.2% |
| Cost of Revenue | $711.20M$650.55M | +9.3% |
| Gross Profit | $1.04B$884.54M | +17.8% |
| R&D Expenses | $295.82M$268.12M | +10.3% |
| SG&A Expenses | $314.81M$283.60M | +11.0% |
| Operating Expenses | $610.62M$551.72M | +10.7% |
| Operating Income | $431.67M$332.82M | +29.7% |
| Net Income | $405.08M$332.77M | +21.7% |
| EPS (Basic) | $2.10$1.73 | +21.4% |
| EPS (Diluted) | $2.09$1.72 | +21.5% |
| Shares Outstanding (Basic) | 192.67M192.54M | +0.1% |
| Shares Outstanding (Diluted) | 193.56M193.72M | −0.1% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in the first quarter of 2026?
The primary driver of revenue growth was the Fitness segment, which saw a 42% increase in net sales, largely due to strong demand for advanced wearables. The Aviation and Marine segments also contributed positively with 18% and 11% growth, respectively.
How did foreign currency fluctuations impact Garmin's results?
Foreign currency movements had a mixed but overall positive impact. The U.S. dollar strengthened against the Taiwan Dollar and Swiss Franc, contributing to foreign currency gains. While the U.S. dollar strengthened against the Euro, leading to a loss, the net effect on foreign currency gains for the quarter was positive, contributing to improved gross margins.
What is Garmin's approach to capital allocation and shareholder returns?
Garmin primarily uses cash flow from operations to fund capital expenditures, working capital, dividends, share repurchases, and potential acquisitions. The company returned capital to shareholders through dividend payments and initiated a new $500 million share repurchase program in February 2026, under which it repurchased $9,000 of its shares by the end of the quarter.
How is Garmin managing its inventory levels?
Inventories increased from $1.77 billion at the end of fiscal year 2025 to $1.85 billion at the end of the first quarter of 2026. While raw materials and finished goods saw increases, work-in-process decreased slightly. The company's inventory purchase obligations were $1.12 billion, with $862.5 million payable within 12 months, indicating continued investment in securing necessary components.
06—Continue