Consolidated Revenue: Increased by 20% year-over-year to $1.38 billion, setting a new first-quarter record.
Gross and Operating Margins: Expanded to 58.1% (gross) and 21.6% (operating), respectively.
Operating Income: Reached a record first quarter of $298 million, up 51% year-over-year.
Pro forma EPS: Grew by 39% from the previous year to $1.42.
Business Segment (Revenue): Increased by 40% to $343 million.
Outdoor Segment (Revenue): Increased by 11% to $366 million.
Aviation Segment (Revenue): Increased by 2% to $217 million.
Marine Segment (Revenue): Increased by 17% to $327 million, with a 3% increase excluding JL Audio.
Auto OEM Segment (Revenue): Increased by 58% to $129 million but recorded an operating loss of $16 million.
Future Guidance
Guidance Update: The company is not updating its guidance issued in February despite the strong Q1 results, due to Q1 typically being the lowest seasonal quarter.
Inventory Expectations: Inventory levels are expected to increase by year-end to align with sales demand.
Free Cash Flow and CapEx: No update provided for the full year; free cash flow for Q1 was $402 million with capital expenditures at $33 million.
Trends, Market Conditions, Sentiment
Product Mix Impact on Margins: Improved product mix within segments, especially with new product introductions leading to higher gross margins.
Seasonality and Product Releases: Timing of new product releases influences quarterly comparisons and expectations for the remainder of the year.
Channel Inventories: Viewed as healthy and clean, with strong sell-through rates and unit volume growth overshadowing any mix down trends.
Auto OEM Growth: Significant growth driven by increased domain controller shipments to BMW and new business in digital instrument clusters for two-wheel vehicles and full infotainment systems for an industrial truck maker.
Consumer Confidence: There’s no significant evidence of consumer mix down among Garmin’s customer base, suggesting resilience in higher-end product demand.
Notable Quotes
”Consolidated revenue increased 20% to $1.38 billion, a new first-quarter record with 4 segments delivering double-digit growth."
"We’re off to a great start, and we’re very pleased with these results."
"We’re not updating the guidance we previously issued in February."
"Our products are unique, highly differentiated compared to a lot of products that are on the market."
"Overall, we do have a sizable amount of awarded business that’s ahead of us."
"Our customer base are in groups that are probably less affected by the overall sentiment that you hear broadly about."
"We haven’t seen a lot of evidence of mixing down that we could point to with confidence.”
