Slide 1: Q2 2023 Earnings
Q2 2023 Earnings August 2, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with s
Slide 3: Business Update
Business Update Cliff Pemble President and CEO
Slide 4: Consolidated results
Consolidated Revenue Operating income Operating margin Q2 2023 $1.32B $284M 21.5% 6% y/y growth 3% y/y decline BUSINESS INSIGHTS • Solid second quarter revenue performance • Revenue growth in three of five segments demonstrating the importance of a diversified business model • Updated revenue guidan
Slide 5: Fitness
Fitness Revenue Operating income Operating margin Q2 2023 $335M $54M 16% 23% y/y growth SEGMENT INSIGHTS • Revenue growth across all product categories • Launched Edge 540 and Edge 840 cycling computers offering dynamic performance insights, solar charging, and advanced mapping • 2023 revenue growth
Slide 6: Outdoor
Outdoor Revenue Operating income Operating margin Q2 2023 $448M $138M 31% 3% y/y decline SEGMENT INSIGHTS • Revenue growth in adventure watches more than offset by declines in multiple product categories • Launched fēnix 7 Pro Series, epix Pro Series, and Approach S70 • 2023 revenue estimate: Flat
Slide 7: Aviation
Aviation Revenue Operating income Operating margin Q2 2023 $217M $63M 29% 6% y/y growth SEGMENT INSIGHTS • Revenue growth driven by OEM product categories • Announced pending certification for the first retrofit Autoland and Autothrottle systems in select King Air models • Smart Glide was recently s
Slide 8: Marine
Marine Revenue Operating income Operating margin Q2 2023 $216M $46M 21% 11% y/y decline SEGMENT INSIGHTS • Revenue decline primarily due to timing of promotions impacting chartplotter product lines • Launched the Force Kraken, the most powerful trolling motor on the market • Market is facing headwin
Slide 9: Auto OEM
Auto OEM Revenue Operating income Operating margin Q2 2023 $105M ($18M) (17%) 77% y/y growth SEGMENT INSIGHTS • Revenue growth driven by increased shipments of domain controllers • Received approval to begin production of a new domain controller for instrument clusters • 2023 revenue growth estimate
Slide 10: Financial Update
Financial Update Doug Boessen CFO and Treasurer
Slide 11: Income Statement Q2
Income Statement Q2 (in millions) Q2 2023 Q2 2022 Y/Y Net sales $1,321 $1,241 6% Gross profit 759 729 4% Margin % 57.5% 58.7% (120 bps) Operating expenses 475 436 9% Operating income $284 $293 (3%) Margin % 21.5% 23.6% (210 bps) GAAP EPS $1.50 $1.33 13% Pro Forma EPS $1.45 $1.44 1%
Slide 12: Revenue Q2
Revenue Q2 (in millions) Q2 2023 Q2 2022 Change Fitness $335 $272 23% Outdoor 448 462 (3%) Aviation 217 205 6% Marine 216 243 (11%) Auto OEM 105 59 77% Total $1,321 $1,241 6% (in millions) Q2 2023 Q2 2022 Change Americas $642 $646 (1%) EMEA 458 413 11% APAC 221 182 22% Total $1,321 $1,241 6%
Slide 13: Operating Expenses
Operating Expenses R&D SG&A Advertising $250 $224 $225 $202 $204 $200 $191 $175 $150 (in millions) $125 $100 $75 $50 $43 $46 $25 $0 Q2 2022 Q2 2023
Slide 14: Other Financial Items Q2 2023
Other Financial Items Q2 2023 Balance Sheet Cash Flow Taxes Cash and marketable securities Free Cash Flow Effective Tax Rate $2.78B $221M 8.9% Accounts receivable Capital Expenditures $717M $53M Inventory Dividends Paid $1.40B $140M Share Repurchases $26M
Slide 15: Guidance
Guidance 2023 Revenue $5.05B Gross margin 57.2% Operating margin 20.0% Tax rate 8.5% EPS $5.15 All amounts and %s are approximate.
Slide 16: Garmin
A GARMIN.
Slide 17: Appendix
Appendix August 2, 2023
Slide 18: Change in reportable segments
Change in reportable segments The Company announced an organization realignment in January 2023, which combined the consumer auto operating segment with the outdoor operating segment. As a result, the Company’s operating segments, which also represent our reportable segments, are fitness, outdoor, a
Slide 19: Non-GAAP Financial Information
Non-GAAP Financial Information To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share
Slide 20: Pro forma net income (earnings) per share
Pro forma net income (earnings) per share Management believes that net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure in order to permit a consistent comparison of the Company’s perf
Slide 21: Free cash flow
Free cash flow Management believes that free cash flow is an important liquidity measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flows less capital expenditures for property and equipment. Management believes th
Slide 22: Forward-looking financial measures
Forward-looking financial measures The forward-looking financial measures in our 2023 guidance do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items and any other impacts that may be identified as pro forma adjustments in calculatin