Garmin's Q3 Earnings Beat Estimates, Revenues Increase Y/Y

Garmin Ltd. (GRMN) reported third-quarter 2025 pro forma earnings of $1.99 per share, which beat the Zacks Consensus Estimate by 0.5%. However, the bottom line remained flat on a year-over-year basis.

Net sales were $1.77 billion, which missed the Zacks Consensus Estimate by 1.1%. Nonetheless, the figure increased 12% from the year-ago quarter.

GRMN’s year-over-year growth in the top line was attributed to solid momentum across the Fitness, Aviation and Marine segments.

Garmin Ltd. Price, Consensus and EPS Surprise

Garmin Ltd. price-consensus-eps-surprise-chart | Garmin Ltd. Quote

Garmin’s Segmental Details

Outdoor (28.1% of Net Sales): The segment generated sales of $497.6 million in the reported quarter, down 5% year over year, due to weak sales in consumer auto and adventure watches. Operating income was $170 million, with a 34% operating margin. Our model estimate for the Outdoor segment was pegged at $559.9 million.

Fitness (33.9%): The segment recorded sales of $601 million, reflecting a 30% year-over-year increase, led by robust demand for advanced wearables. Operating income was $194 million, with a 32% operating margin. Our model estimate for the Fitness segment was pegged at $585 million.

Aviation (13.6%): The segment achieved sales of $240.4 million, up 18% year over year, fueled by strength in OEM and aftermarket product categories. Operating income came in at $61 million, with a 25% margin. Our model estimate for the Aviation segment was pegged at $213.5 million.

Marine (15.1%): Garmin posted sales of $267 million, up 20% year over year. Operating income was $49 million, resulting in a 19% margin. Our model estimate for the Marine segment was pegged at $229.6 million.

Auto OEM (9.3%): Sales reached $164.8 million, down 2% year over year. The segment posted an operating loss of $17 million, with a gross margin of 15%. Our model estimate for the Auto OEM segment was pegged at $178.7 million.

Garmin’s Operating Results

Gross profit grew 10% year over year to $1.05 billion in the third quarter. Garmin’s gross margin contracted 90 basis points year over year to 59.1%.

GRMN’s operating expenses of $590 million jumped 15% from the prior-year quarter.

Operating income rose 4% year over year to $456.8 million, while the operating margin contracted 180 basis points to 25.8%.

Balance Sheet & Cash Flow of GRMN

As of Sept. 27, 2025, Garmin held $2.54 billion in cash and marketable securities, down from $2.59 billion in the previous quarter.

During the third quarter, the company generated operating and free cash flows of $486 million and $425 million, respectively. In the first three quarters of 2025, Garmin generated operating and free cash flows of $1.08 billion and $933.3 million, respectively.

Garmin Updates Guidance for 2025

Revenues for 2025 are projected at $7.1 billion, unchanged from its previous guidance. The Zacks Consensus Estimate for the same is pegged at $7.15 billion, indicating a year-over-year increase of 13.6%.

Garmin now anticipates pro forma EPS to be $8.15, up from the earlier projection of $8.0. The Zacks Consensus Estimate for the same is pegged at $8.09, calling for a year-over-year jump of 9.5%.

However, it still expects a gross margin of 58.5%. The operating margin for 2025 is projected at 25.2%, up from the previous guidance of 24.8%. The pro forma effective tax rate forecast has remained unchanged at 17.5%.

GRMN’s Zacks Rank and Other Stocks to Consider

Currently, GRMN carries a Zacks Rank #2 (Buy).

Impinj (PI), Credo Technology Group (CRDO) and Amphenol (APH) are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj, Credo Technology Group and Amphenol each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Impinj’s full-year 2025 earnings is pegged at $1.98 per share, revised upward by 4 cents over the past 30 days and suggests a year-over-year decline of 6.2%. Impinj shares have soared 46.2% year to date.

The Zacks Consensus Estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by a cent over the past 30 days to $2.04 per share, calling for an increase of 191.4% year over year. Credo Technology Group shares have rallied 155.2% year to date.

The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings has been revised upward to $3.22 per share from $3.03 per share over the past seven days, implying 70.4% year-over-year growth. Amphenol shares have risen 101.2% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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