Slide 1: Q3 2023 Earnings
Q3 2023 Earnings November 1, 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 Q3 results
Consolidated Revenue Operating income Operating margin Q3 2023 $1.28B $270M 21.2% 12% y/y growth 13% y/y growth BUSINESS INSIGHTS • Record third quarter revenue performance • Double-digit revenue and operating income growth • Updated revenue guidance ~$5.150B
Slide 5: Fitness segment results
Fitness Revenue Operating income Operating margin Q3 2023 $353M $75M 21% 26% y/y growth SEGMENT INSIGHTS • Record segment revenue with growth across all product categories • Launched Venu 3 and vívoactive 5 • ECG availability expanded to additional wearables • 2023 revenue growth estimate: +20%
Slide 6: Outdoor segment results
Outdoor Revenue Operating income Operating margin Q3 2023 $434M $136M 31% 7% y/y growth SEGMENT INSIGHTS • Record segment revenue with growth across multiple product categories • Launched tactix 7 AMOLED Edition • Recently announced the MARQ Carbon collection • 2023 revenue estimate: -5%
Slide 7: Aviation segment results
Aviation Revenue Operating income Operating margin Q3 2023 $198M $49M 25% 5% y/y growth SEGMENT INSIGHTS • Revenue growth driven by OEM product categories • Named #1 in avionics product support by AIN • Announced a long-term agreement to provide G3000 integrated flight deck to BETA Technologies for
Slide 8: Marine segment results
Marine Revenue Operating income Operating margin Q3 2023 $182M $24M 13% 7% y/y decline SEGMENT INSIGHTS • Revenue decline across multiple product categories partially offset by JL Audio • Launched the GPSMAP 9000 Series • Awarded Manufacturer of the Year by NMEA • Closed on acquisition of JL Audio •
Slide 9: Auto OEM segment results
Auto OEM Revenue Operating income Operating margin Q3 2023 $110M ($14M) (12%) 59% y/y growth SEGMENT INSIGHTS • Record segment revenue with growth primarily driven by increased shipments of domain controllers • BMW domain controller business continues to ramp • Growth in infotainment revenue • 2023
Slide 10: Financial Update
Financial Update Doug Boessen CFO and Treasurer
Slide 11: Income Statement Q3
Income Statement Q3 (in millions) Q3 2023 Q3 2022 Y/Y Net sales $1,278 $1,140 12% Gross profit 729 670 9% Margin % 57.0% 58.8% (180 bps) Operating expenses 458 431 6% Operating income $270 $239 13% Margin % 21.2% 21.0% 20 bps GAAP EPS $1.34 $1.09 23% Pro Forma EPS $1.41 $1.24 14%
Slide 12: Revenue Q3
Revenue Q3 (in millions) Q3 2023 Q3 2022 Change Fitness $353 $280 26% Outdoor 434 407 7% Aviation 198 188 5% Marine 182 197 (7%) Auto OEM 110 69 59% Total $1,278 $1,140 12% (in millions) Q3 2023 Q3 2022 Change Americas $628 $563 12% EMEA 439 383 15% APAC 210 194 8% Total $1,278 $1,140 12%
Slide 13: Operating Expenses
Operating Expenses R&D SG&A Advertising $250 $225 $222 $209 $201 $200 $190 $175 $150 (in millions) $125 $100 $75 $50 $33 $35 $25 $0 Q3 2022 Q3 2023
Slide 14: Other Financial Items Q3 2023
Other Financial Items Q3 2023 Balance Sheet Cash Flow Taxes Cash and marketable securities Free Cash Flow Pro Forma $2.78B $312M Effective Tax Rate Accounts receivable Capital Expenditures 7.2% $721M $46M Inventory Dividends Paid $1.44B $140M Share Repurchases $9M
Slide 15: Guidance
Guidance 2023 Revenue $5.150B Gross margin 56.7% Operating margin 19.8% Pro forma Tax rate 8.5% Pro forma EPS $5.25 All amounts and %s are approximate.
Slide 16: Garmin
A GARMIN.
Slide 17: Appendix
Appendix November 1, 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 effective tax rate
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 disclosure of the effective tax rate and income tax provision bef
Slide 21: 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 22: 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 23: Forward-looking financial measures
Forward-looking financial measures The forward-looking financial measures in our 2023 guidance provided above 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 adjustment