"We delivered another quarter of impressive financial results as our highly differentiated and innovative products resonate with customers, and we successfully leveraged growth opportunities across market segments and geographies. We are raising our 2024 outlook based on the results we have achieved so far and the momentum we are experiencing as we enter the important holiday selling season." - Cliff Pemble, President and Chief Executive Officer of Garmin Ltd.

Fitness:

Revenue from the fitness segment increased 31% in the third quarter with growth across all categories led by strong demand for wearables. Gross and operating margins were 61% and 32%, respectively, resulting in $148 million of operating income. During the quarter, we hosted our annual Garmin Health Summit to recognize innovative digital health solutions utilizing Garmin products, and to celebrate the 10^th anniversary of Garmin Health.  Also, during the quarter we announced updates to Garmin Coach, adding training plans for cyclists in addition to the existing training plans for runners, making it easier to prepare for an event, pursue a personal milestone or improve overall fitness.

Outdoor:

Revenue from the outdoor segment increased 21% in the third quarter primarily due to growth in adventure watches. Gross and operating margins were 68% and 40%, respectively, resulting in $209 million of operating income. During the quarter, we launched both the highly anticipated fēnix 8 series, adding brilliant AMOLED displays, cutting edge features, a built-in speaker, microphone, and an LED flashlight, and the Enduro 3, a lightweight ultraperformance GPS smartwatch purpose-built for ultra-endurance athletes with up to 320 hours of battery life in GPS mode with solar charging. We also launched the inReach^® Messenger Plus, our first satellite communicator with photo and voice messaging in addition to two-way texting, location sharing and SOS capabilities, expanding our customers' ability to stay in touch beyond cell service.

Aviation:

Revenue from the aviation segment increased 3% in the third quarter with growth driven by aftermarket product categories. Gross and operating margins were 75% and 22%, respectively, resulting in $44 million of operating income. During the quarter, we announced Runway Occupancy Awareness, which uses ADS-B information to help reduce the risk of runway incursions and provide added confidence to pilots navigating busy and complex airports. Garmin is the first to bring this new safety feature to market. We also recently unveiled our new G3000^® PRIME, which redefines the integrated flight deck experience with sleek, intuitive, all-touchscreen displays and a highly flexible open architecture system that seamlessly adapts to serve a broad and dynamic market.

Marine:

Revenue from the marine segment increased 22% in the third quarter primarily driven by the acquisition of JL Audio^®. Gross and operating margins were 55% and 17%, respectively, resulting in $38 million of operating income. During the quarter, we announced several new products to enhance our customers' time on the water, including Fusion Apollo^TM marine speaker and subwoofer series, the GC^TM 245/55 marine cameras, and the GPSMAP^® 9500 black box system. We recently announced the acquisition of Lumishore, a leader in marine LED lighting as we continue to focus on providing seamless integration throughout the boat.

Auto OEM:

Revenue from the auto OEM segment increased 53% during the third quarter primarily driven by growth in domain controllers. Gross margin was 20% and the operating loss narrowed to $1 million as efficiencies improved with higher sales volumes. During the quarter, we successfully launched the Garmin-designed domain controllers across all remaining BMW Group car lines.

Additional Financial Information:

Total operating expenses in the third quarter were $514 million, a 12% increase over the prior year. Both research and development and selling, general and administrative expenses increased 12% driven primarily by personnel related costs.

The effective tax rate in the third quarter was 17.9% compared to the effective tax rate of 8.0% and the pro forma effective tax rate⁽¹⁾ of 7.2% in the prior year quarter. The increase in the current quarter effective tax rate is primarily due to the increase in the combined federal and cantonal Switzerland statutory tax rate in response to global minimum tax requirements.  

In the third quarter of 2024, we generated operating cash flows of $258 million and free cash flow⁽¹⁾ of $219 million. We paid a quarterly dividend of approximately $144 million and repurchased $20 million of the Company's shares within the quarter, leaving approximately $270 million remaining as of September 28, 2024 in the share repurchase program authorized through December 2026. We ended the quarter with cash and marketable securities of approximately $3.5 billion.      

2024 Fiscal Year Guidance:

Based on our performance in the first three quarters of 2024, we are adjusting our full year guidance. We now anticipate revenue of approximately $6.12 billion and pro forma EPS of $6.85 based on gross margin of 58.5%, operating margin of 24.0% and a full year effective tax rate of 16.5% (see attached discussion on Forward-looking Financial Measures).

Dividend Recommendation:

The board of directors has established December 27, 2024, as the payment date for the next dividend installment of $0.75 per share with a record date of December 13, 2024. At the 2024 annual shareholders' meeting, Garmin shareholders, in accordance with Swiss corporate law, approved a cash dividend in the total amount of $3.00 per share, payable in four equal installments on dates to be determined by the board in its discretion. The first and second payments were made on June 28, 2024 and September 27, 2024. The board currently anticipates the scheduling of the remaining quarterly dividend installments as follows:

Webcast Information/Forward-Looking Statements:

The information for Garmin Ltd.'s earnings call is as follows:

An archive of the live webcast will be available until October 29, 2025 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.