Garmin Ltd. has recently released its 10-Q report, providing a detailed look at the company's financial performance for the third quarter of 2025. The company, founded in 1989 and based in Switzerland, operates in five segments: fitness, outdoor, aviation, marine, and auto OEM. It designs, develops, manufactures, and distributes a diverse range of GPS-enabled products and other navigation, communications, sensor-based, and information products for these markets.
In the third quarter of 2025, Garmin reported a 12% increase in net sales, reaching $1,770,901 compared to $1,586,022 in the same period in 2024. The fitness segment contributed the largest portion of revenue at 34%, driven by strong demand for advanced wearables. Aviation revenue also saw significant growth, increasing by 18%, primarily due to sales growth in OEM and aftermarket product categories. However, the outdoor segment experienced a 5% decrease in net sales, mainly due to consumer auto and adventure watch product categories comparing against strong prior-year product launch cycles.
The company's gross profit for the 13-week period ended September 27, 2025, increased by 10% to $1,046,487 compared to $951,599 in the same period in 2024. Despite the increase in gross profit dollars, the consolidated gross margin as a percentage of net sales decreased by 90 basis points, primarily due to higher product costs. Notably, the fitness, aviation, and marine segments maintained relatively flat gross margin percentages, while the outdoor gross margin percentage decreased by 190 basis points due to higher product costs.
Operating expenses for the third quarter of 2025 increased by 15% in absolute dollars, remaining relatively flat as a percentage of revenue compared to the year-ago quarter. The company reported a 4% increase in total operating income, reaching $456,803 for the 13-week period ended September 27, 2025. However, the outdoor and auto OEM segments experienced decreases in operating income, while the fitness, aviation, and marine segments saw improvements.
Garmin's net income for the 13-week period ended September 27, 2025, was $401.6 million, a slight increase from $399.1 million for the same period in 2024. The company's effective tax rate for the third quarter of 2025 was 21.2%, compared to 17.9% in the third quarter of 2024, primarily driven by U.S. tax legislation enacted during the current quarter.
For the 39-week period ended September 27, 2025, Garmin reported a 14% increase in net sales, reaching $5,120,564 compared to $4,474,342 in the same period in 2024. The fitness segment contributed the largest portion of revenue at 31%, driven by strong demand for advanced wearables. Similarly, the outdoor, aviation, marine, and auto OEM segments all experienced revenue growth during this period.
The market has reacted to these announcements by moving the company's shares -1.32% to a price of $248.09. For more information, read the company's full 10-Q submission here.
