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October 30, 2025 • 4 min read
Garmin, a household name for anyone who tracks their runs, sails the seas, or flies the skies, just released its financial results for the third quarter of 2025. These regulatory filings, like the 10-Q filed with the SEC, provide a deep dive into a company's performance, revealing the engine behind the numbers. Let's unpack Garmin's latest report to see how the company is navigating the current economic environment.
For the 13-week period ending September 27, 2025, Garmin reported a strong top-line performance. Net sales climbed 12% to $1.77 billion, up from $1.59 billion in the same quarter last year. However, the story gets more nuanced as we move down the income statement. While sales were up, net income remained nearly flat at $401.6 million, a slight increase from $399.1 million a year ago.
This suggests that while Garmin is selling more, it's also spending more to do so. The company's gross margin—the percentage of revenue left after accounting for the cost of goods sold—dipped slightly from 60% to 59%. Furthermore, operating income, a key measure of profitability from core business operations, grew by a modest 4% to $456.8 million, causing the operating margin to tighten from 28% to 26%.
The following flow diagram provides a clear visualization of how Garmin's quarterly revenue is distributed across its various costs and expenses, ultimately leading to its net income.
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A closer look at Garmin's five business segments reveals a significant shift in its revenue drivers.
Fitness on the Rise: The standout performer was the Fitness segment, which includes popular wearables like smartwatches and fitness trackers. Revenue skyrocketed by 30% to $601 million, making it Garmin's largest segment for the quarter. The company credits this remarkable growth to "strong demand for advanced wearables."
Outdoor Takes a Breather: In contrast, the Outdoor segment, traditionally a powerhouse with its adventure watches and handheld GPS devices, saw revenue decline by 5% to $497.6 million. The filing notes this was primarily due to a difficult comparison against a period of strong product launches last year. This dip caused the segment's operating income to fall by 19%.
Aviation and Marine Soar: The Aviation and Marine segments delivered impressive results, with revenues growing 18% and 20%, respectively. Both segments also saw their operating profits jump by over 30%, indicating strong demand and healthy margins in these specialized markets.
Auto OEM's Bumpy Road: The Auto OEM segment, which provides integrated electronics to car manufacturers, saw revenue dip 2%. More significantly, its operating loss widened to $16.7 million from just $1.3 million in the prior year, as legacy programs near their end.
The pressure on Garmin's profit margins can be traced to rising expenses across the board. Total operating expenses jumped 15% to $589.7 million, outpacing the 12% growth in revenue.
A significant portion of this increase comes from a 15% rise in Research and Development (R&D) spending, which reached $286.5 million. This reflects Garmin's continued investment in engineering and product innovation—a critical component of its long-term strategy in the competitive tech hardware space. Selling, general, and administrative expenses also rose by 14%, driven mainly by higher personnel costs.
Garmin's third-quarter results paint a picture of a company in transition. The explosive growth in the Fitness segment is a clear bright spot, successfully offsetting the temporary slowdown in the Outdoor division. This pivot highlights the company's ability to adapt to changing consumer demands. However, the challenge ahead will be to manage the rising costs associated with innovation and growth to prevent further margin erosion. Investors will be watching closely to see if the momentum in wearables can continue and if the Outdoor segment can return to its former strength in the coming quarters.
Last updated: October 30, 2025