Garmin reported record second-quarter 2026 results on July 29, with operating income climbing 30 percent even as revenue grew 11 percent, an outperformance that helped drive the company’s decision to raise its full-year guidance and makes margin, not volume, the real story of the quarter.
The 360-basis-point gain in gross margin came from favorable product mix and roughly $21 million (€18m) in refunds of previously paid tariffs, Garmin said. Total operating expense rose 9 percent to $647 million, with R&D up 10 percent and SG&A up 8 percent, both on higher personnel costs. Costs grew slower than gross profit – that gap is what pushed operating margin up.
| Garmin Ltd. — Income statement | |||
| Q2, 13 weeks ended June 27 (€ millions) | |||
| 2026 | 2025 | Change | |
| Net sales | 1,776 | 1,594 | 11.4% |
| Cost of goods sold | 668 | 657 | 1.7% |
| Gross profit | 1,108 | 937 | 18.3% |
| Gross margin | 62.4% | 58.8% | +360bps |
| Research and development | 267 | 243 | 9.9% |
| Selling, general and administrative | 301 | 279 | 7.7% |
| Operating income | 541 | 415 | 30.3% |
| Operating margin | 30.4% | 26.0% | +440bps |
| Total other income | 31 | 7 | 347.1% |
| Income before income taxes | 572 | 422 | 35.5% |
| Income tax provision | 96 | 70 | 37.1% |
| Net income | 476 | 352 | 35.2% |
| Diluted EPS (GAAP) | €2.46 | €1.82 | 35.2% |
Source: Garmin Ltd. second-quarter 2026 earnings release, July 29, 2026. Figures converted from USD at $1 = €0.8783 (July 29, 2026 rate). All figures in € millions unless stated.
Fitness drives Garmin’s Q2 growth
Fitness was the standout: net sales rose 25 percent in the quarter to $756.8 million (€664.7m) and 32 percent over 26 weeks to $1.30 billion (€1.15bn). Garmin credits growth across all product categories, led by demand for advanced wearables, and the segment posted the highest operating income of any business line at $277 million. Outdoor was the one segment to shrink, down 2 percent on weaker consumer auto and adventure-watch sales. Auto OEM flipped to a $3 million operating profit from a loss a year earlier, helped by domain-controller demand and lower R&D spending. Aviation grew 8 percent; Marine grew 14 percent.
| Garmin Ltd. — Net sales by segment | |||
| Q2, 13 weeks ended June 27 (€ millions) | |||
| 2026 | 2025 | Change | |
| Fitness | 665 | 532 | 25.0% |
| Outdoor | 424 | 431 | -1.6% |
| Aviation | 236 | 219 | 7.8% |
| Marine | 300 | 263 | 14.1% |
| Auto OEM | 151 | 149 | 1.3% |
| Total net sales | 1,776 | 1,594 | 11.4% |
| Garmin Ltd. — Operating income by segment | |||
| Q2, 13 weeks ended June 27 (€ millions) | |||
| 2026 | 2025 | Change | |
| Fitness | 243 | 174 | 40.2% |
| Outdoor | 144 | 139 | 3.6% |
| Aviation | 63 | 56 | 13.8% |
| Marine | 88 | 55 | 58.7% |
| Auto OEM | 3 | -8 | – |
| Total operating income | 541 | 415 | 30.3% |
Source: Garmin Ltd. second-quarter 2026 earnings release, July 29, 2026. Figures converted from USD at $1 = €0.8783 (July 29, 2026 rate). All figures in € millions unless stated.
Two moves that will shape Garmin’s future business
The release flags two recent moves that point to a broader repositioning: the July 21 launch of the screen free, subscription free CIRQA smart band and the completed acquisition of training platforms TrainingPeaks and TrainHeroic from Peaksware Holdings.
CIRQA puts Garmin in direct competition with Whoop’s subscription only model, offering similar always on health tracking for a one time $199.99 payment rather than a recurring fee. TrainingPeaks and TrainHeroic move in the opposite direction, bringing roughly 120 employees and a paying base of coaches and endurance athletes into Garmin’s ecosystem and adding a structured, recurring revenue coaching relationship that a hardware only sale does not generate.
Do the two moves contradict each other, or are they part of a broader expansion strategy? We go deeper on both and how to read them together in the latest installment of our column “The Playbook.”
