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FY2026 Q1
Improving
Garmin Ltd. earnings call
Buzzberg read
Fitness segment grew 42% with broad-based demand
Garmin reported a strong Q1 2026 with revenue up 14% to $1.75B, led by fitness segment growth of 42%. Management maintained full-year guidance despite the strong start and discussed significant program ramps with Mercedes-Benz, offsetting the BMW wind-down. They also noted that component cost inflation is expected to be muted in 2026 due to safety stock but will hit in 2027. Consolidated revenue grew 14% to a record $1.75B, with fitness up 42%, aviation up 18%, and marine up 11%.
Buzzberg read Fitness segment grew 42% with broad-based demand Garmin reported a strong Q1 2026 with revenue up 14% to $1.75B, led by fitness segment growth of 42%. Management maintained full-year guidance despite the strong start and discussed significant program ramps with Mercedes-Benz, offsetting the BMW wind-down. They also noted that component cost inflation is expected to be muted in 2026 due to safety stock but will hit in 2027. Consolidated revenue grew 14% to a record $1.75B, with fitness up 42%, aviation up 18%, and marine up 11%. Read full analysisCollapse analysis
Garmin reported a strong Q1 2026 with revenue up 14% to $1.75B, led by fitness segment growth of 42%. Management maintained full-year guidance despite the strong start and discussed significant program ramps with Mercedes-Benz, offsetting the BMW wind-down. They also noted that component cost inflation is expected to be muted in 2026 due to safety stock but will hit in 2027. Consolidated revenue grew 14% to a record $1.75B, with fitness up 42%, aviation up 18%, and marine up 11%.
- Gross margin expanded 180 bps to 59.4%; operating margin expanded 290 bps to 24.6%.
- Auto OEM revenue was flat, but the BMW program is ramping down while the Mercedes-Benz program is expected to drive significant growth starting in 2027.
- Garmin has built substantial safety stock to mitigate 2026 component cost inflation, but expects the impact to manifest in 2027.
AVIATION Revenue$264MReported
FITNESS Revenue$547MReported
MARINE Revenue$355MReported
OUTDOOR Revenue$418MReported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Supply
Component cost pressure expected to hit more in 2027
Margins
Tariff refunds not yet recorded as benefit
Show 3 more callouts
Guidance
Auto OEM revenue to decline in 2026 ahead of Mercedes ramp
Margins
Marine margin compression due to higher tariff costs
Guidance
Mercedes program to drive growth starting 2027
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| AVIATION Revenue | $264M | Reported |
| FITNESS Revenue | $547M | Reported |
| MARINE Revenue | $355M | Reported |
| OUTDOOR Revenue | $418M | Reported |
| Revenue | $1.7535B | -17% QoQ |
| EPS | $2.08 | -25% QoQ |
AI, capex & demand read
Management read
Confident
Management expressed satisfaction with strong Q1 results and optimism about new product launches and long-term growth, despite acknowledging geopolitical uncertainties.
Management AI read
AI is not explicitly discussed, but management mentions expanding on-device messaging with WhatsApp integration and subscription-based services like Garmin Connect Plus as areas of enhanced focus.
Investment and capacity
Capital expenditures for Q1 2026 were $67 million, approximately $27 million higher than the prior year quarter, reflecting increased investment.
all 2 named companies below
Companiesreturns since call
Customers
Customers
Cliff Pemble
Mercedes-Benz is a major growth catalyst; the new program is more complex with higher ASPs and expected to drive significant revenue growth starting in 2027.
Evidence
“We continue to achieve important milestones leading up to the launch of our next large scale program with Mercedes-Benz. which we anticipate will drive significant growth starting in 2027 and beyond.”
Customers
Cliff Pemble
BMW's program is at peak volumes and ramping down, which will drag on Garmin's Auto OEM segment revenue in 2026.
Evidence
“As a reminder, we expect AutoEM revenue to decrease in 2026 as the BMW program has reached peak volumes and as certain legacy programs approach end of life.”
External signals
Supply-chain alpha · 1returns since call
Garmin has substantial safety stock of components under pricing pressure, expecting the impact of higher input costs to be muted in 2026 but to appear in 2027.
Evidence
“We do have significant safety stock. of some components that are under pricing pressure. So I would expect that 2026 is still going to be somewhat muted and we'll start to see some effect in 2027.”
Methodology & coverage
Management-only analysis. All 2 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.