Company reports record first quarter operating results and maintains full year EPS guidance
SCHAFFHAUSEN, Switzerland, April 30, 2025 -- Garmin® Ltd. (NYSE: GRMN), today announced results for the first quarter ended March 29, 2025.
Highlights for first quarter 2025 include:
- Record consolidated revenue of $1.54 billion, an 11% increase compared to the prior year quarter
- Gross margin of 57.6% compared to 58.1%, in the prior year quarter
- Operating margin expanded to 21.7% from 21.6%, in the prior year quarter
- Record operating income of $333 million, a 12% increase compared to the prior year quarter
- GAAP EPS of $1.72 and pro forma EPS(1) of $1.61, representing 13% growth in pro forma EPS over the prior year quarter
- Named one of the Top 10 Most Trustworthy Companies in America, within our industry, by Newsweek
- Recognized as an exceptional aviation OEM and marine supplier, winning multiple awards during the quarter
- Announced the G3000® PRIME integrated flight deck was selected by Pilatus for its new PC-12 PRO aircraft and PC-7 MKX military training aircraft
- Published our 2024 Garmin inReach® SOS Report, highlighting the important role served by inReach devices in remote communications and emergency response coordination around the globe
(In thousands, except per share information) | 13-Weeks Ended | |||||||||||
March 29, | March 30, | YoY | ||||||||||
2025 | 2024 | Change | ||||||||||
Net sales | $ | 1,535,099 | $ | 1,381,649 | 11 % | |||||||
Fitness | 384,722 | 342,892 | 12 % | |||||||||
Outdoor | 438,496 | 366,193 | 20 % | |||||||||
Aviation | 223,114 | 216,855 | 3 % | |||||||||
Marine | 319,438 | 326,736 | (2) % | |||||||||
Auto OEM | 169,329 | 128,973 | 31 % | |||||||||
Gross profit | 884,545 | 802,139 | 10 | % | ||||||||
Gross margin % | 57.6 | % | 58.1 | % | ||||||||
Operating Income | 332,824 | 298,410 | 12 | % | ||||||||
Operating income % | 21.7 | % | 21.6 | % | ||||||||
GAAP diluted EPS | $ | 1.72 | $ | 1.43 | 20 | % | ||||||
Pro forma diluted EPS(1) | $ | 1.61 | $ | 1.42 | 13 | % | ||||||
(1) See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma diluted EPS |
Executive Overview from Cliff Pemble, President and Chief Executive Officer:
"We delivered another quarter of outstanding financial results which we attribute to our strong lineup of highly differentiated products that customers desire. While recent developments in global trade have created an atmosphere of uncertainty for many companies, we remain optimistic because of the resilience and flexibility our vertically integrated and highly diversified business model offers. We are very pleased with our results so far, and we look forward to the opportunities ahead as the year continues to unfold." - Cliff Pemble, President and Chief Executive Officer of Garmin Ltd.
Fitness:
Revenue from the fitness segment increased 12% in the first quarter with growth led by strong demand for advanced wearables. Gross and operating margins were 57% and 20%, respectively, resulting in $78 million of operating income. During the quarter, we announced Garmin Connect+, a premium plan offering personalized insights driven by artificial intelligence, enhanced live tracking, and exclusive achievement badges. Garmin Connect+ will elevate users' health and fitness knowledge with personalized Active Intelligence insights powered by AI. Also during the quarter, we were recognized as one of the Most Innovative Fitness and Wellness Companies of 2025 by Athletech News. We also recently announced the vívoactive® 6, our newest health and fitness smartwatch with an even brighter AMOLED display that includes more than 80 preloaded sports apps and provides access to Garmin Coach running and strength training plans.
Outdoor:
Revenue from the outdoor segment increased 20% in the first quarter primarily due to growth in adventure watches. Gross and operating margins were 64% and 29%, respectively, resulting in $129 million of operating income. During the quarter, we launched several wearables, including Instinct® 3, Descent™ G2, tactix® 8 and Approach® S44 and Approach S50. Each wearable is purpose built to allow our customers to participate in the activities that further their passions. Also during the quarter, we launched the new Montana® handheld GPS series with optional SOS satellite communication capabilities, and the new Approach G20, the first GPS golf handheld with unlimited battery life in sunny conditions.
Aviation:
Revenue from the aviation segment increased 3% in the first quarter with growth primarily driven by the OEM product categories. Gross and operating margins were 75% and 22%, respectively, resulting in $48 million of operating income. During the quarter, we announced that the G3000 PRIME integrated flight deck was selected by Pilatus for its new PC-12 PRO aircraft, with deliveries anticipated to begin in the second half of 2025, and PC-7 MKX military training aircraft. Also during the quarter, we introduced GCO™ 14, our first carbon monoxide detector for aircraft. This remote-mount sensor allows pilots to monitor CO levels and receive alerts, adding a layer of situational awareness in the cockpit. We were also named Supplier of the Year by Cirrus Aircraft, reflecting our commitment to create the best products and provide outstanding service to our customers.
Marine:
Revenue from the marine segment decreased 2% in the first quarter primarily due to the timing of promotions, which contributed to lower revenue from multiple product categories in the quarter. Gross and operating margins were 58% and 27%, respectively, resulting in $87 million of operating income. During the quarter, we launched the Force® Pro trolling motor, with multi-band GPS for improved control, reverse thrust capabilities and a built-in sonar transducer. Also during the quarter, we were named 2025 Supplier of the Year for the second consecutive year by Independent Boat Builders, Inc. (IBBI), for providing outstanding service, support and dedication to its owner network.
Auto OEM:
Revenue from the auto OEM segment increased 31% during the first quarter primarily driven by growth in domain controllers. Gross margin was 18% and we recorded an operating loss of $9 million in the quarter. During the quarter, Honda introduced the 2025 Gold Wing motorcycle which includes a Garmin infotainment system.
Additional Financial Information:
Total operating expenses in the first quarter were $552 million, a 10% increase over the prior year. Research and development and selling, general and administrative expenses increased 11% and 9%, respectively, driven primarily by personnel related costs.
The effective tax rate in the first quarter was 14.5% compared to the effective tax rate of 15.6% in the prior year quarter. The decrease in the current quarter is primarily due to increased tax benefits from stock-based compensation.
In the first quarter of 2025, we generated operating cash flows of $421 million and free cash flow(1) of $381 million. We paid a quarterly dividend of approximately $145 million and repurchased $27 million of the Company's shares within the quarter, leaving approximately $210 million remaining as of March 29, 2025 in the share repurchase program authorized through December 2026. We ended the quarter with cash and marketable securities of approximately $3.9 billion.
(1) | See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma effective tax rate and free cash flow. |
2025 Fiscal Year Guidance:
Based upon our first quarter results and our assessment of the current global trade environment, we are updating our full year 2025 expectations for revenue to approximately $6.85 billion and maintaining our pro forma EPS of $7.80 based on gross margin of 58.5%, operating margin of 24.8% and a full year tax rate of 16.5% (see attached discussion on Forward-looking Financial Measures).
Dividend Recommendation:
As announced in February, the Board will recommend to the shareholders for approval at the annual meeting to be held on June 6, 2025, a cash dividend in the total amount of $3.60 per share payable in four equal quarterly installments.
Webcast Information/Forward-Looking Statements:
The information for Garmin Ltd.'s earnings call is as follows:
When: | Wednesday, April 30, 2025, 10:30 a.m. Eastern |
Where: | Join a live stream of the call at the following link |
An archive of the live webcast will be available until April 29, 2026 on the Garmin website at www.garmin.com. To access the replay, click on the Investors link and click over to the Events Calendar page.
This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as "anticipates," "would," "may," "expects," "estimates," "plans," "intends," "projects," and other words or phrases with similar meanings. Any statements regarding the Company's expected fiscal 2025 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company's expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, global trade related impacts, potential future acquisitions, share repurchase programs, currency movements, expenses, pricing, new product launches, market reach, statements relating to possible future dividends, and the Company's plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors and uncertainties affecting Garmin, including, but not limited to, the risk factors that are described in the Annual Report on Form 10-K for the year ended December 28, 2024 and the Quarterly Report on Form 10-Q for the quarter ended March 29, 2025 filed by Garmin with the Securities and Exchange Commission (Commission file number 001-41118). A copy of Garmin's 2024 Form 10-K and the Q1 2025 Form 10-Q can be downloaded from https://www.garmin.com/en-US/investors/sec/. All information provided in this release and in the attachments is as of March 29, 2025. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.
This release and the attachments contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the Company's use of these measures are included in the attachments.
Garmin, the Garmin logo, the Garmin delta, Approach, Force, G3000, inReach, Instinct, Montana, tactix, and vívoactive are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Descent and GCO are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.
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