tapebrief
GRMN · Q3 2025

GRMN · Q4 2025 Earnings

Cautious

Garmin

Reported February 18, 2026

30-second summary

Garmin closed 2025 with a $2.13B Q4 (+17% YoY) and full-year revenue of $7.25B (+15%), beating the prior FY revenue guide by $146M and the EPS guide by $0.41. The FY26 setup is where the story turns: management guides revenue +9% to $7.9B, EPS +9.2% to $9.35, and — critically — operating margin DOWN 40bps to 25.5% despite the lower 16.0% tax rate doing the heavy lifting on EPS. After two years of margin-led upside, the company is telling you to expect margin give-back in 2026.

Headline numbers

EPS

Q4 FY2025

$2.79

Revenue

Q4 FY2025

$2.13B

+17.0% YoY

Gross margin

Q4 FY2025

59.2%

Free cash flow

Q4 FY2025

$0.43B

Operating margin

Q4 FY2025

28.9%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$2.13B+17.0%$1.77B+20.1%
EPS$2.79—$1.99+40.2%
Gross margin59.2%—59.1%+10bps
Operating margin28.9%—25.8%+310bps
Free cash flow$0.43B—$0.42B+1.2%

Guidance

Company beat FY2025 guidance across revenue and earnings, with EPS upside of 5%; FY2026 guidance reflects 9% revenue growth and 9.2% EPS growth, though operating margin faces slight headwinds and effective tax rate improves significantly.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueFY2025$7.10 billion$7.246 billion+$0.146 billion above guideBeat
EPS (non-GAAP)FY2025$8.15$8.56+$0.41 above guideBeat
Gross MarginFY202558.5%58.7%+20 bps above guideBeat
Operating MarginFY202525.2%25.9%+70 bps above guideBeat
Pro forma Effective Tax RateFY202517.5%Not explicitly disclosed for FY2025—Beat

New guidance

MetricPeriodGuideYoY
RevenueFY2026$7.9 billion+9.0% YoY
EPS (non-GAAP)FY2026$9.35+9.2% YoY
Gross MarginFY202658.5%—
Operating MarginFY202625.5%—
Pro forma Effective Tax RateFY202616.0%—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
Fitness$0.766B+42.0%
Outdoor$0.628B—
Aviation$0.274B+16.0%
Marine$0.297B+18.0%
Auto OEM$0.16B-3.0%

Platform metrics

Q4 FY2025
SegmentQ4 FY2025
Units Shipped20+ million (full year 2025)

Profitability

Q4 FY2025
SegmentQ4 FY2025
Fitness Segment Operating Margin34%
Outdoor Segment Operating Margin37%
Aviation Segment Operating Margin31%
Marine Segment Operating Margin18%
Fitness Segment Gross Margin59%
Outdoor Segment Gross Margin66%
Aviation Segment Gross Margin76%

Other KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
Americas$1.035B+21.0%
EMEA$0.803B+14.0%
APAC$0.288B+8.0%

Management tone

No transcript was available for Q4, so multi-quarter tone arc work is limited to written commentary. The cross-quarter arc: Q2-25 "exceeded our expectations" → Q3-25 "updating our full year 2025 guidance" → Q4-25 "many exciting new product launches" + "market diversification." The 2025 cadence ran from surprise to measured to forward-looking; the Q4 framing is the most product-cycle dependent of the three, which fits a year in which the easy comps and margin upside have already been monetized.

What the FY26 guide tells you that the press-release prose doesn't: management is preparing investors for normalization. +9% revenue is roughly half of FY25's +15%, gross margin is guided down to where the FY25 guide started (not where it ended), and the EPS line only holds together because of a tax benefit. This is the first FY initial guide in the coverage window that telegraphs deceleration on every operating line.

Answers to last quarter's watch list

Outdoor recovery or confirmation of decline — Q4 came in at 0% YoY (vs. -5% in Q3). Operating margin held at 37%, the highest of any segment. The bleed stopped but growth didn't return; treat this as stabilization at flat, not a recovery.
Continue monitoring
Implied Q4 revenue — Q4 printed $2.125B vs. the implied ~$1.98B from the held FY $7.10B guide. The $146M FY beat is essentially all Q4 outperformance.
Resolved positively
Auto OEM operating loss trajectory — Revenue worsened to -3% YoY (from -2%); Q4 segment operating margin was not disclosed in the extraction, and the company didn't signal any strategic review on the print.
Continue monitoring
Fitness margin stability — Segment op margin recovered to 34% in Q4 (vs. 32% Q3) on +42% growth. The compression worry was premature.
Resolved positively
EMEA decel — Americas +21%, EMEA +14%, APAC +8% in Q4. EMEA stabilized at the Q3 +13–14% level; Americas overtook it. Q2's +25% looks like the anomaly.
Resolved negatively

What to watch into next quarter

Whether Q1-26 commentary frames the 25.5% FY operating margin guide as a floor or as the base case. A "we set the bar conservatively" framing would be a positive tell; a reiteration with no upside language would confirm the deceleration story.

Fitness comp risk — Q1-25 was the segment's pre-acceleration baseline. Q1-26 print will tell you whether +42% Q4 was peak product cycle or a sustainable run-rate. Watch for any number below +20%.

Outdoor crossing back into growth — three consecutive flat-to-negative prints would force a structural-multiple conversation. Q1-26 needs to clear at least +3% to keep that conversation off the table.

Auto OEM disclosure — segment operating margin was not disclosed for Q4. If Q1-26 also omits it, treat that as an active signal rather than a reporting choice.

Tax-rate sensitivity — the 150bps tax benefit carries FY26 EPS. Any commentary suggesting the 16.0% rate is policy-dependent (vs. structural) would put the $9.35 number at risk.

Sources

  1. Garmin Q4 2025 / FY 2025 press release: https://www.sec.gov/Archives/edgar/data/1121788/000119312526056025/grmn-ex99_1.htm
  2. Tapebrief GRMN Q3-2025 brief (prior-quarter context)
  3. Tapebrief GRMN Q2-2025 brief (multi-quarter trajectory)

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