Garmin Announces 2021 Second Quarter Results

Schaffhausen, Switzerland – Garmin® Ltd. (NASDAQ: GRMN), today announced results for the second quarter ended June 26, 2021.

Highlights for second quarter 2021 include:

  • Total revenue of $1.33 billion, a 53% increase over the prior year quarter with double-digit growth in all segments
  • Gross margin of 58.8% compared to 59.3% in the prior year quarter
  • Operating margin improved to 28.0% compared to 21.7% in the prior year quarter
  • Operating income of $371 million, a 97% increase over the prior year quarter
  • GAAP EPS was $1.64 and pro forma EPS(1) was $1.68, representing 85% growth in pro forma EPS over the prior year quarter
  • Garmin Autoland was awarded the 2020 Robert J. Collier Trophy, which recognizes the greatest achievements in aeronautics or astronautics in America
  • Expanded our family of health and fitness smartwatches with the launch of Venu 2 and Venu 2S
  • Launched Descent Mk2S, our smallest watch-style dive computer

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

“Strong demand for active lifestyle products continued, and we experienced solid recovery within our aviation and auto segments resulting in record revenue and profits in the second quarter,” said Cliff Pemble, President and CEO of Garmin. “We are very pleased with the results we have delivered thus far, giving us confidence to raise our full year 2021 revenue and EPS guidance.”

Outdoor:

Revenue from the outdoor segment grew 57% in the second quarter with growth across all categories led by strong demand for adventure watches. Gross margin and operating margin were 64% and 38%, respectively, resulting in 81% operating income growth. During the quarter, we launched Descent Mk2S, a stylish smartwatch featuring multiple dive modes, multisport training and smart features. We also debuted our children’s book, “Women of Adventure: Being Brave in a Big World,” featuring six stories from our Women of Adventure series. The book captures the traits that make each woman unique while touching on the science behind her sport or passion, to encourage readers to explore the world and find ways to be brave every day.

Marine:

Revenue from the marine segment grew 66% in the second quarter with growth across multiple categories, led by strong demand for our chartplotters. Gross margin and operating margin were 58% and 34%, respectively, resulting in 106% operating income growth. During the quarter, we announced the integration of our displays on Mercury-powered boats which can receive engine performance data via Mercury’s new SmartCraft Connect gateway, which enables monitoring of up to four engines simultaneously. We launched the MSC 10 marine satellite compass, a GPS-based navigation tool with multi-band GNSS and a fully integrated attitude and heading reference system for a smooth and accurate GPS-derived heading and position on the water. Also, with the assistance of our innovative marine electronics, Hank Cherry, a Garmin sponsored angler, won the Bassmaster Classic.

Additional Financial Information:

Total operating expenses in the second quarter were $410 million, a 25% increase over the prior year. Research and development increased by 21%, primarily due to engineering personnel costs across all segments. Selling, general and administrative expenses increased 26%, driven primarily by personnel related expenses and information technology costs. Advertising increased 47% driven primarily by higher spend in the fitness and outdoor segments.

The effective tax rate in the second quarter of 2021 was 14.8%.

In the second quarter of 2021, we generated approximately $120 million of free cash flow(1) and paid a quarterly dividend of approximately

About Garmin Ltd.

Garmin, the Garmin logo, the Garmin delta, Approach and G3000 are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Enduro, Lily, Rally and Tread are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved.