Garmin (NYSE:GRMN) reported record fourth-quarter and full-year 2025 results, citing strong, broad-based demand across its diversified portfolio and improved operating leverage. Management also issued 2026 guidance calling for continued growth, while acknowledging industry-wide memory cost pressure and persistent tariff-related cost headwinds.
Fourth-quarter results set new milestones
Chief Executive Officer Cliff Pemble said consolidated fourth-quarter revenue rose 17% year-over-year to more than $2.1 billion, marking a new fourth-quarter record and the company’s first quarter above $2 billion. Gross margin was 59.2%, comparable to the prior year, while operating margin expanded 60 basis points to 28.9%.
Chief Financial Officer Doug Boessen added that fourth-quarter GAAP EPS was $2.73 and noted operating expenses increased about $80 million, or 14%, driven by higher research and development (personnel-related) and increased SG&A from advertising and personnel-related expenses. By segment in the quarter, Garmin posted double-digit growth in three of five segments, led by fitness up 42%, marine up 18%, and aviation up 16%.
Geographically, the Americas grew 21% and exceeded $1 billion in quarterly revenue for the first time, while EMEA grew 14% and APAC grew 8%.
Full-year 2025: revenue and operating income records across segments
For full-year 2025, Pemble said Garmin delivered record consolidated revenue, record operating income, and record revenue in each business segment. Consolidated revenue increased 15% to $7.25 billion, “up nearly $1 billion over 2024,” he said. Gross margin was 58.7%, which management characterized as a notable result given “generationally high tariff structures” that took effect early in the year.
Operating margin expanded 60 basis points to 25.9%, resulting in record operating income of nearly $1.9 billion, up 18% year-over-year. Boessen reported full-year revenue of $7.246 billion, GAAP EPS of $8.59, and pro forma EPS of $8.56, up 16% year-over-year.
By geography for 2025, Boessen said EMEA grew 18%, the Americas grew 40%, and APAC grew 12%.
Segment highlights: fitness leads, auto OEM remains loss-making
Management emphasized fitness as a key growth driver. Pemble said 2025 fitness revenue increased 33% to $2.36 billion, surpassing $2 billion for the first time, driven by wearables and supported by market share gains and market growth. Fitness gross margin was 60% (up 130 basis points), and operating income rose 50% to $726 million, with operating margin expanding to 31%.
In Q&A, Pemble said wearables growth in 2025 was “heavily” volume-driven, with only a minor impact from average selling price, and he added Garmin is still seeing that most new customers are “new to Garmin.” He also discussed a collaboration with TrueMed that enables customers to use HSA/FSA funds for qualifying purchases on Garmin’s website, calling it “quickly” one of Garmin’s significant outlets.
Outdoor revenue increased 5% in 2025 to $2.05 billion, also topping $2 billion for the first time, driven primarily by adventure watches and a full year of contributions from the fÄ“nix 8 series. Pemble said outdoor gross and operating margins were 66% and 34%, respectively, with operating income of $690 million. He said Garmin expects outdoor growth to accelerate in 2026, supported by a “significant number of new product introductions,” with stronger performance anticipated in the back half of the year due to launch timing, while declining to comment on specific product launch schedules.
Aviation revenue increased 13% to $987 million in 2025, with growth in OEM and aftermarket. Pemble said the segment expanded margins, reporting gross margin of 75% and operating margin of 26%, with operating income up 22% to $257 million. He highlighted military modernization wins using commercial off-the-shelf cockpit systems, including the selection of the G5000H cockpit system for the Brazilian Air Force UH-60 Black Hawk program. Pemble also described an incident on Dec. 20, 2025, when a customer used Autoland for the first time to return an aircraft safely to the ground following rapid depressurization, which he said demonstrated improved safety margins.
Marine revenue increased 10% to $1.18 billion, led by chartplotters. Pemble said marine gross margin was 55% with operating margin of 21%, producing operating income of $251 million. He pointed to product introductions including the GPSMAP 9000xsv lineup and Garmin Onboard, a wireless man-overboard and engine cutoff system that won the 2025 DAME Design Award in the Safety and Security category. Looking ahead, management expects 2026 marine growth to be consistent with 2025, citing improving market conditions.
Auto OEM revenue increased 9% to $665 million in 2025, driven by domain controllers, but gross margin was 17% and the segment posted an operating loss of $49 million. Pemble said Garmin’s next domain controller program is with Mercedes-Benz, with limited contributions expected in late 2026 and “significant volumes ramping up in 2027.” For 2026, Garmin expects auto OEM revenue to decline as BMW domain controller volumes peak and certain legacy programs approach end-of-life, while operating losses are expected to narrow as R&D resources are shifted to accelerate product roadmaps in other segments.
Capital returns: higher dividend proposal and new repurchase authorization
Garmin said it plans to seek shareholder approval for an annual dividend of $4.20 per share, a 17% increase from the current $3.60 annual dividend. Boessen said the proposal would increase the quarterly payment to $1.05 per share beginning with the June 2026 payment.
The company’s board also approved a $500 million share repurchase program effective through December 2028, replacing the remainder of the previous $300 million authorization. Boessen said Garmin purchased $181 million of shares during 2025 and paid approximately $664 million in dividends.
2026 outlook: growth expected amid memory and tariff pressures
Garmin guided for 2026 revenue of approximately $7.9 billion, up about 9%, and Pemble said the company expects operating income to exceed $2 billion for the first time. Boessen projected gross margin of about 58.5% (down about 20 basis points) due to higher product costs partially offset by favorable segment mix, and operating margin of approximately 25.5%.
On supply chain conditions, Pemble said guidance incorporates what the company knows about memory component cost pressures and the broader environment. He emphasized Garmin’s vertically integrated model, efforts to improve bill-of-material efficiency, supplier relationships, and the company’s use of inventory as a “business tool,” including intentionally increasing inventory levels of certain components and products to meet long-term demand.
Garmin also discussed tariffs in Q&A, with Pemble saying the company was assuming conditions “stay pretty much as it is with regard to tariffs,” while noting that changes could alter cost structure and that there are “puts and takes,” including memory constraints.
For earnings, Boessen guided to pro forma EPS of approximately $9.35, up about 9% year-over-year, with a 2026 pro forma effective tax rate expected to be 16%.
On cash generation and investment, Boessen said Garmin ended the quarter with about $4.1 billion in cash and marketable securities and generated free cash flow of $430 million in the fourth quarter and about $1.4 billion for full-year 2025. For 2026, the company expects free cash flow of about $1.4 billion and capital expenditures of roughly $400 million, with the increase tied primarily to a new manufacturing facility in Thailand expected to be operational in early 2027.
About Garmin (NYSE:GRMN)
Garmin Ltd. is a technology company best known for designing and manufacturing navigation, communication and information devices that leverage global positioning system (GPS) technology. The company serves a diverse set of markets including consumer fitness and wearables, automotive navigation, aviation avionics, marine electronics and outdoor handheld devices. Garmin’s products combine hardware, mapping and software services to deliver location-aware solutions for personal, recreational and professional uses.
Garmin’s product lineup includes wearable fitness and multisport watches (Forerunner, Fenix, Venu), cycling computers and accessories (Edge, Varia), handheld and handheld-mounted GPS devices for outdoor activities, automotive and portable navigation units, marine chartplotters and fishfinders, and certified avionics for fixed- and rotary-wing aircraft.
