Schaffhausen – October 29, 2026 -- Garmin Ltd. (NYSE: GRMN) posted record third-quarter operating income of $612 million, up 34% year on year, and raised its full-year 2026 guidance after revenue rose 12% to a record $1.99 billion.
Margins expand 420 basis points as tariff refunds add $33 million
Consolidated gross margin reached 63.3%, up 420 basis points, with higher margins in every segment. Garmin attributed the gain to favorable segment mix, lower product costs and about $33 million in refunds of previously paid tariffs. Operating margin was 30.8%. Pro forma EPS rose 39% to $2.76, while GAAP EPS was $2.80.
Operating expenses grew 10% to $646 million. R&D rose 9% on personnel costs, and SG&A rose 10% on personnel and advertising. The effective tax rate fell to 18.1% from 21.2%, which Garmin linked to higher expected U.S. deductions under tax legislation enacted in 2025 that took effect in 2026.
Outdoor revenue climbs 20% on adventure watches while auto OEM falls 20%
Segment results:
- Outdoor: revenue up 20%, led by adventure watches; operating income $233 million at a 39% operating margin.
- Fitness: revenue up 16% on wearables demand; operating income $231 million at a 33% operating margin.
- Marine: revenue up 16%, led by sonar; operating income $94 million.
- Aviation: revenue up 5%, driven by OEM categories; operating income $66 million.
- Auto OEM: revenue down 20% on lower domain controller sales; gross margin 16% and an operating loss of $12 million.
New products supported the quarter. Garmin launched the fēnix 9 and fēnix 9 Pro series, the CIRQA Smart Band, and LiveScope 2 sonar. In aviation, it unveiled the G2000 PRIME and said more than 2,500 aircraft are now equipped with its Autoland system. It also reported delivering its 1,000th G1000 retrofit for King Air aircraft.
Full-year guidance now targets $8.15 billion revenue and $10.80 pro forma EPS
Garmin now expects 2026 revenue of about $8.15 billion and pro forma EPS of $10.80. The forecast assumes a 61.0% gross margin, a 29.0% operating margin and a 16.5% full-year tax rate. CEO Cliff Pemble said the increase reflects results so far and momentum heading into the holiday selling season.
Cash returns total $243 million in the quarter, with $4.1 billion in reserves
Operating cash flow was $394 million and free cash flow was $293 million. Garmin paid $202 million in dividends and repurchased $41 million of shares, leaving about $407 million under its $500 million buyback program, which runs through December 2028. Cash and marketable securities stood at about $4.1 billion.
The next dividend installment of $1.05 per share is payable December 24, 2026, to holders of record on December 11, 2026. It is part of the $4.20 annual dividend approved by shareholders.