Strategic Performance Drivers

• Consolidated revenue grew 14% to a record $1.75 billion, primarily driven by robust demand for advanced wearables and double-digit growth in three of five segments.

• Fitness segment performance was characterized by 42% revenue growth, which management attributed to higher unit volumes and meaningful market share gains in the wearable category.

• Aviation growth of 18% was supported by both OEM and aftermarket categories, with aircraft manufacturers maintaining high backlogs despite slow delivery cadences.

• Marine segment growth of 11% was bolstered by strong deliveries to boat builders and positive reception of new sonar technologies, though margins were pressured by higher tariff costs.

• Management noted that the consumer base for Garmin products remains resilient, as customers prioritize personal health, wellness, and active lifestyles despite broader economic whiplash.

• Operating margin expansion to 24.6% was aided by favorable foreign currency impacts and effective leverage of operating expenses across the business.

Outlook and Strategic Assumptions

• Full-year 2026 guidance remains unchanged despite a strong Q1, as management maintains a cautious stance given that the first quarter is seasonally the lowest.

• Outdoor segment performance is expected to be similar in Q2 before accelerating in the second half of the year due to the timing of planned product launches.

• Auto OEM revenue is projected to decrease in 2026 as the BMW program reaches peak volumes, with significant growth anticipated to resume in 2027 via the Mercedes-Benz program.

• Management expects higher component input costs to be well-controlled in 2026 due to existing safety stocks, but anticipates these headwinds will become more visible in 2027.

• The company plans to launch approximately 100 new products in 2026, including entries into entirely new categories to drive long-term revenue growth.

Operational Risks and Structural Factors

• Tariff impacts resulted in year-over-year margin compression in the Marine segment; the company has not yet recorded any receivables for potential tariff refunds.

• Inventory levels increased to $1.9 billion as a strategic 'business tool' to maintain safety stocks of critical components under pricing pressure.

• Geopolitical uncertainty and rising oil prices are identified as potential headwinds that could cause 'hesitancy' in the Marine and Aviation markets.

• The Auto OEM segment is expected to remain unprofitable on a GAAP basis for the full year 2026 during its current program transition phase.