Garmin Ltd. · NYSE:GRMN
Garmin — Q3 2024 Earnings Presentation
22 slides from Garmin's earnings presentation, Oct 30, 2024
Slide 1: Q3 2024 Earnings
Q3 2024 Earnings October 30, 2024
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 and business insights
Consolidated Revenue Operating income Operating margin Q3 2024 $1.59B $437M 27.6% 24% y/y growth 62% y/y growth BUSINESS INSIGHTS • Record third quarter consolidated revenue and revenue for each segment • Gross and operating margins expanded, resulting in record third quarter operating income • Pro
Slide 5: Fitness segment results
Fitness Revenue Operating income Operating margin Q3 2024 $464M $148M 32% 31% y/y growth 98% y/y growth SEGMENT INSIGHTS • Growth across all product categories, led by strong demand for our wearables • Outstanding operating results, nearly doubling last year’s operating profit • Garmin Health celebr
Slide 6: Outdoor segment results
Outdoor Revenue Operating income Operating margin Q3 2024 $527M $209M 40% 21% y/y growth 53% y/y growth SEGMENT INSIGHTS • Revenue growth primarily driven by adventure watches • Launched the highly anticipated fēnix 8 and Enduro 3 • Launched inReach Messenger Plus with photo and voice messaging • Up
Slide 7: Aviation segment results
Aviation Revenue Operating income Operating margin Q3 2024 $205M $44M 22% 3% y/y growth 10% y/y decline SEGMENT INSIGHTS • Revenue growth in aftermarket product categories • Recently announced the G3000 PRIME next generation integrated flight deck • Introduced Runway Occupancy Awareness technology t
Slide 8: Marine segment results
Marine Revenue Operating income Operating margin Q3 2024 $222M $38M 17% 22% y/y growth 59% y/y growth SEGMENT INSIGHTS • Revenue growth primarily driven by the acquisition of JL Audio; organic growth of 7%, ahead of industry trends • Awarded Manufacturer of the Year by NMEA and Most Innovative Marin
Slide 9: Auto OEM segment results
Auto OEM Revenue Operating income Operating margin Q3 2024 $169M ($1M) (1%) 53% y/y growth SEGMENT INSIGHTS • Growth driven by increased shipments of domain controllers • Successfully launched domain controllers across all remaining BMW Group car lines • Expecting softness across OEM global landscap
Slide 10: Financial Update
Financial Update Doug Boessen CFO and Treasurer
Slide 11: Income Statement Q3
Income Statement Q3 (in millions) Q3 2024 Q3 2023 Y/Y Net sales $1,586 $1,278 24% Gross profit 952 729 31% Margin % 60.0% 57.0% 300 bps Operating expenses 514 458 12% Operating income $437 $270 62% Margin % 27.6% 21.2% 640 bps GAAP EPS $2.07 $1.34 54% Pro Forma EPS $1.99 $1.41 41%
Slide 12: Revenue Q3
Revenue Q3 (in millions) Q3 2024 Q3 2023 Change Fitness $464 $353 31% Outdoor 527 434 21% Aviation 205 198 3% Marine 222 182 22% Auto OEM 169 110 53% Total $1,586 $1,278 24% (in millions) Q3 2024 Q3 2023 Change Americas $724 $628 15% EMEA 613 439 40% APAC 249 210 18% Total $1,586 $1,278 24%
Slide 13: Operating Expenses
Operating Expenses R&D SG&A $300 $275 $265 $249 $250 $237 $222 $225 $200 $175 (in millions) $150 $125 $100 $75 $50 $25 $0 Q3 2024 Q3 2023 * SG&A includes Advertising Expense. See Appendix for additional information.
Slide 14: Other Financial Items Q3 2024
Other Financial Items Q3 2024 Balance Sheet Cash Flow Taxes Cash and Marketable Securities Free Cash Flow Pro Forma $3.53B $219M Effective Tax Rate Accounts Receivable Capital Expenditures 17.9% $922M $39M Inventory Dividends Paid $1.51B $144M Share Repurchases $20M
Slide 15: Guidance
Guidance 2024 Revenue $6.12B Gross margin 58.5% Operating margin 24.0% Tax rate 16.5% EPS $6.85 All amounts and %s are approximate.
Slide 16: Garmin
A GARMIN.
Slide 17: Appendix
Appendix October 30, 2024
Slide 18: 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 19: Non-GAAP Financial Information: Pro forma effective tax rate
Non-GAAP Financial Information Pro forma effective tax rate The Company’s income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes the effective tax rate and income
Slide 20: Non-GAAP Financial Information: Pro forma net income per share
Non-GAAP Financial Information 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 c
Slide 21: Non-GAAP Financial Information: Free cash flow
Non-GAAP Financial Information 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 eq
Slide 22: Forward-looking financial measures
Forward-looking financial measures The forward-looking financial measures in our 2024 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