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FY2026 Q2
Raised
Garmin Ltd. earnings call
Buzzberg read
Raised full-year 2026 guidance to $8.05B revenue and $10 proforma EPS.
Garmin delivered a record-breaking Q2 2026 with revenue of $2.02B (+11% YoY), driven by strong fitness wearable demand and robust margins, leading to a further raise in full-year guidance. The call highlighted strong performance in the aviation and marine segments, while auto OEM faces a temporary decline ahead of the Mercedes-Benz program launch. Fitness segment delivered standout performance (+25% YoY) on demand for advanced wearables, leading to a raised full-year guidance.
Buzzberg read Raised full-year 2026 guidance to $8.05B revenue and $10 proforma EPS. Garmin delivered a record-breaking Q2 2026 with revenue of $2.02B (+11% YoY), driven by strong fitness wearable demand and robust margins, leading to a further raise in full-year guidance. The call highlighted strong performance in the aviation and marine segments, while auto OEM faces a temporary decline ahead of the Mercedes-Benz program launch. Fitness segment delivered standout performance (+25% YoY) on demand for advanced wearables, leading to a raised full-year guidance. Read full analysisCollapse analysis
Garmin delivered a record-breaking Q2 2026 with revenue of $2.02B (+11% YoY), driven by strong fitness wearable demand and robust margins, leading to a further raise in full-year guidance. The call highlighted strong performance in the aviation and marine segments, while auto OEM faces a temporary decline ahead of the Mercedes-Benz program launch. Fitness segment delivered standout performance (+25% YoY) on demand for advanced wearables, leading to a raised full-year guidance.
- Management raised full-year 2026 revenue guidance to $8.05B, up from $7.9B, and EPS to $10.00, up from $9.35.
- Gross margin improved to 62.4%, boosted by a $21M tariff refund and favorable product mix; guidance assumes headwinds from higher memory costs in 2H26.
- Auto OEM segment will decline in 2H26 and return to operating loss, but is expected to return to growth in 2027 with the launch of a major Mercedes-Benz program.
AUTO_OEM Revenue$0.172BReported
AVIATION Revenue$0.269BReported
FITNESS Revenue$0.757BReported
MARINE Revenue$0.341BReported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Demand
Circa smartband demand exceeded expectations, backorders being chased.
Margins
Margins face memory cost headwind in second half.
Show 3 more callouts
Auto OEM
Auto OEM to decline and return to operating loss before Mercedes launch.
Capex
Thailand facility capex at highest intensity, on track.
Products
New AXIS cockpit displays set new standard and strong reception.
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| AUTO_OEM Revenue | $0.172B | Reported |
| AVIATION Revenue | $0.269B | Reported |
| FITNESS Revenue | $0.757B | Reported |
| MARINE Revenue | $0.341B | Reported |
| OUTDOOR Revenue | $0.483B | Reported |
| Revenue | $2.0221B | +15% QoQ |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | $0.55B | $0.55B | Guided |
| EPS | FY2026 | $10.00 | $10.00 | Raised |
| Free cash flow | FY2026 | $1.4B | $1.4B | Guided |
| Gross margin | FY2026 | 59.7% | 59.7% | Raised |
| Operating margin | FY2026 | 27% | 27% | Raised |
| Revenue | FY2026 | $8.05B | $8.05B | Raised |
AI, capex & demand read
Management read
Bullish
Management expressed strong confidence, highlighted record-breaking results, raised full-year guidance, and detailed robust demand and successful product launches.
Management AI read
Management highlighted the launch of the Circa smartband, which offers wellness and fitness insights without a subscription, while noting that users can add Connect+ for AI features and other benefits. The company emphasized its rich out-of-the-box features as a differentiator compared to competitors, and hinted at future product roadmap expansion.
Investment and capacity
Capital expenditures for Q2 2026 were $128 million, up $82 million year-over-year, with full-year capex expected to be approximately $550 million. The company is in the most intense part of capital expenditures to support the Thailand facility, which will provide additional manufacturing options and diversification.
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Customers
Customers
Clif Pemble
While largely praise, this signals continued strong demand and co-development with Embraer, supporting Garmin's aviation growth outlook.
Evidence
“For the 11th consecutive year, we were named Best Supplier of the Year by Embraer, who recognized us for outstanding performance as a supplier of electrical and electronic systems for their Phenom business jets.”
Customers
Clif Pemble
Management explicitly plans for the auto OEM segment to hit an air pocket in 2H26 before a major Mercedes-Benz program launch in early 2027, indicating a specific capex/development cycle for the auto OEM.
Evidence
“we are expecting revenue to decline and the return to an operating loss in the back half of 2026, leading up to the launch of our next major program with Mercedes-Benz in 2027.”
Customers
Clif Pemble
Garmin's auto OEM business is past the peak of BMW volumes, which will drive a decline in that segment in 2H26.
Evidence
“We do expect back half revenue to decline versus 2025 as we've reached the peak of our BMW volumes.”
Supply chain
Supply chain
Doug Boessen
Despite global memory cost inflation, Garmin has been insulated so far due to strategic inventory, but expects costs to hit in 2H26, narrowing margin expansion. — Signals that the memory cost spike is real but will be offset by consumption of cheap inventory for ~3-6 months, warning of a potential inventory re-stocking spike for component suppliers in 2H26.
Evidence
“Your day results have not been significantly impacted by higher memory costs. However, we do expect higher memory costs impact the second half, which has been factored into our full year gross margin guidance.”
External signals
Supply-chain alpha · 3returns since call
The launch of the 'Circus Smartband' (likely a typo for 'Circa Smartband') sold out immediately, pushing ship times to 5-8 weeks, which is demand-led and shows a new market opportunity.
Evidence
“I noticed on the website, on your website it seems that the product sold out and now the ship wait times five to eight weeks... the actual result, once we announced the product, was very strong ahead of our expectations.”
Garmin is in its peak capital expenditure phase for its new Thailand manufacturing facility, shifting management focus toward production diversification. This is visible in a $82M YoY increase in quarterly capex and has not yet been fully reflected in margins.
Evidence
“We expect full year 2026 free cash flow to be approximately $1.4 billion, with capital expenditures of approximately $550 million.”
Despite global memory cost inflation, Garmin has been insulated so far due to strategic inventory, but expects costs to hit in 2H26, narrowing margin expansion.
Methodology & coverage
Management-only analysis. All 5 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.