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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.01pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
-0.01pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
weakening+4
weakened+2
disclosed+2
defects+1
terminated+1
Positive rising
gain+4
gains+3
greater+3
effective+1
innovative+1
MD&A (Item 7)
20,387 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations focuses on and is intended to clarify the results of our operations, certain changes in our financial position, liquidity, capital structure and business developments during the fiscal years ended December 27, 2025 and December 28, 2024 and a year-to-year comparison of these two fiscal years. This discussion should be read in conjunction with, and is qualified by reference to, the other related information including, but not limited to, the audited consolidated financial statements (including the notes thereto), the description of our business, all as set forth in this Form 10-K, as well as the risk factors discussed above in Item 1A. Discussion regarding our results of operations for the fiscal year ended December 30, 2023 and a year-to-year comparison between the fiscal years ended December 28, 2024 and December 30, 2023 can be found in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024.
As previously noted, the discussion set forth below, as well as other portions of this Form 10-K, contain statements concerning potential future events. Readers can identify these forward-looking statements by their use of such verbs as “expects,” “anticipates,” “believes”, or similar verbs or conjugations of such verbs. If any of our assumptions on which the statements are based prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of factors including, but not limited to, those discussed above in Item 1A. Readers are strongly to consider those factors when evaluating any such forward-looking statement. Except as may be required by law, we do not undertake to update any forward-looking statements in this Form 10-K.
Garmin’s fiscal year is based on a 52- or 53-week period ending on the last Saturday of the calendar year. Fiscal years 2025, 2024, and 2023 each contained 52 weeks. Unless otherwise stated, all years and dates refer to the Company’s fiscal year and fiscal periods. Unless the context otherwise requires, references in this document to “we”, “us”, “our”, “the Company” and similar terms refer to Garmin Ltd. and its subsidiaries.
Unless otherwise indicated, dollar amounts set forth in the tables are in thousands, except per share data.
Overview
The Company is a leading worldwide producer of innovative products, many of which feature Global Positioning System (GPS) navigation, services and applications that are designed for people who live an active lifestyle. Garmin is organized in the five operating segments of fitness, outdoor, aviation, marine, and auto OEM, which represent the primary markets served by the Company. These operating segments also represent our reportable segments. The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker (CODM), allocates resources and assesses performance of each operating segment individually.
Critical Accounting Estimates
General
Our discussion and analysis of financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The presentation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to customer sales programs and incentives, product returns, bad debts, inventories, investments, goodwill, intangible assets, income taxes, warranty obligations, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Refer to Note 1 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements for our significant accounting policies related to our critical accounting estimates.
Uncertain Tax Positions
The Company recognizes liabilities associated with uncertain income tax positions, including those related to the application of transfer pricing rules to certain intercompany transactions, based on our estimate of whether, and the extent to which, additional taxes will be due. The Company recognizes the tax benefits from an uncertain tax position only if payment of those amounts ultimately proves to be not required or it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest amount of benefit that is more likely than not to be realized upon ultimate settlement.
Assessing uncertain tax positions requires significant judgment, including the evaluation of unique facts and circumstances and the interpretation of laws and regulations, especially the assessment of pricing analyses that may produce various ranges of outcomes. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements.
Accounting Terms and Characteristics
Net Sales
Our net sales are primarily generated through retail partners, a dealer and distributor network, installation and repair shops, original equipment manufacturers (OEMs), our online webshop (garmin.com), subscriptions for connected services, and our own retail stores. Refer to the Revenue Recognition discussion in Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for additional information regarding our revenue recognition policies.
Certain arrangements with OEM customers are entered into at the beginning of an aircraft, boat, or vehicle life cycle with the intent to fulfill customer purchasing requirements for the entire production life, although there are generally no firm volume commitments, and sales are therefore generated on an order-by-order basis. Orders from dealer and distributor customers for Garmin’s consumer products are typically subject to certain fulfillment requirements and placed with short lead times. As a result, we do not believe backlog information is material to the understanding of our business.
Net sales are subject to seasonal fluctuation. Typically, sales of our consumer products are highest in the fourth quarter due to increased demand during the holiday buying season, and many marine products experience increased demand in the first and second quarters in advance of the summer boating season. Sales of our consumer products are also influenced by the timing of the release of new products. Our aviation and auto OEM products do not experience much seasonal variation but are more influenced by the timing of aircraft certifications, regulatory mandates, auto program manufacturing, and the release of new products when the initial demand is typically the strongest.
Cost of Goods Sold and Gross Profit
Raw materials are our most significant component of cost of goods sold. Our existing practice of performing the design and manufacture of the majority of our products in-house has enabled us to source components from different suppliers and, where possible, to redesign our products to leverage lower-cost or more readily available components.
We believe that our flexible production model allows our factories to experience relatively low costs of manufacturing. In general, products manufactured in Taiwan have been our highest volume products. Our manufacturing labor costs historically have been lower in Taiwan than in most other locations.
Shipping and handling costs associated with the transportation and delivery of our products are included in cost of goods sold. Such costs fluctuate due to a number of factors, including freight market pricing and the mix of modes of transportation we utilize.
Sales price variability, including that which is associated with foreign currency fluctuations, has had and can be expected to have an effect on our gross profit. Our consolidated gross margin, representing gross profit as a percentage of net sales, is also dependent on segment mix and product mix within each segment.
Research and Development
The majority of our research and development costs represent engineering personnel costs, costs of test equipment and components used in product and prototype development, and outside product development costs.
We are committed to increasing the level of innovative design and development of new products as we strive to expand our ability to serve our existing consumer and aviation markets as well as new auto OEM programs and new markets for active lifestyle products.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses consist primarily of:
advertising costs associated primarily with media advertising, cooperative advertising with our retail partners, point of sale displays, and sponsorships;
information technology costs;
salaries for sales, marketing and product support personnel;
salaries and related costs for executives and administrative personnel;
marketing, and other brand building costs;
finance and legal costs;
human resource costs;
travel and related costs; and
occupancy and other overhead costs.
Results of Operations
As previously announced, beginning in the first quarter of fiscal 2024, the Company changed the presentation of operating expense to include advertising expense within selling, general and administrative expenses on the Company’s consolidated statements of income, which management believes to be a more meaningful presentation. The Company continued this presentation of operating expense in the current period. Results for the 52-week period ended December 30, 2023 were recast to conform to this presentation. This change had no effect on the Company’s consolidated operating or net income.
The following table sets forth our results of operations as a percentage of net sales during the periods shown (the table may not foot due to rounding):
52-Weeks Ended
52-Weeks Ended
52-Weeks Ended
December 27, 2025
December 28, 2024
December 30, 2023
Net sales
Cost of goods sold
Gross profit
Operating expenses:
Research and development
Selling, general and administrative
Total operating expenses
Operating income
Other income (expense), net
Income before income taxes
Income tax provision (benefit)
Net income
The table below sets forth the results of operations through operating income (loss) for each of our five reportable segments. Operating income (loss) represents net sales less costs of goods sold and operating expenses. Net sales are directly attributed to each segment. Most costs of goods sold and the majority of operating expenses are also directly attributed to each segment, while certain other costs of goods sold and operating expenses are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the expenses being allocated. For each line item in the table below, the total of the reportable segments’ amounts equals the amount in the accompanying consolidated statements of income.
52-Weeks Ended December 27, 2025
Fitness
Outdoor
Aviation
Marine
Auto OEM
Net sales
Cost of goods sold
Gross profit
Total operating expenses
Operating income (loss)
52-Weeks Ended December 28, 2024
Fitness
Outdoor
Aviation
Marine
Auto OEM
Net sales
Cost of goods sold
Gross profit
Total operating expenses
Operating income (loss)
52-Weeks Ended December 30, 2023
Fitness
Outdoor
Aviation
Marine
Auto OEM
Net sales
Cost of goods sold
Gross profit
Total operating expenses
Operating income (loss)
Net Sales
Net Sales
52-Weeks Ended December 27, 2025
Year-over-Year Change
52-Weeks Ended December 28, 2024
Year-over-Year Change
52-Weeks Ended December 30, 2023
Fitness
Percentage of Total Net Sales
Outdoor
Percentage of Total Net Sales
Aviation
Percentage of Total Net Sales
Marine
Percentage of Total Net Sales
Auto OEM
Percentage of Total Net Sales
Total
Net sales increased 15% in fiscal year 2025 when compared to the year-ago period. Total unit sales increased approximately 11% to 20.7 million units in 2025 from 18.6 million units in 2024. The increase in net sales differs from the increase in total unit sales primarily due to shifts in segment and product mix. Fitness revenue was the largest portion of our revenue mix at 33% in 2025, while outdoor was the largest portion of our revenue mix in 2024 at 31%.
The increase in fitness revenue was primarily driven by strong demand for wearables. Outdoor revenue increased primarily due to sales growth in adventure watches. The increase in aviation revenue was driven by sales growth in OEM and aftermarket product categories. The increase in marine revenue was driven by sales growth across multiple product categories, led by chartplotters. Auto OEM revenue increased primarily due to sales growth in domain controllers.
Gross Profit
Gross Profit
52-Weeks Ended December 27, 2025
Year-over-Year Change
52-Weeks Ended December 28, 2024
Year-over-Year Change
52-Weeks Ended December 30, 2023
Fitness
Percentage of Segment Net Sales
Outdoor
Percentage of Segment Net Sales
Aviation
Percentage of Segment Net Sales
Marine
Percentage of Segment Net Sales
Auto OEM
Percentage of Segment Net Sales
Total
Percentage of Total Net Sales
Gross profit dollars in fiscal year 2025 increased 15%, primarily due to the increase in net sales compared to the year-ago period as described above. Consolidated gross margin was flat when compared to the year-ago period.
The fitness gross margin increase of 130 basis points compared to the year-ago period was primarily attributable favorable product mix. Gross margin remained relatively flat within the outdoor, aviation, marine, and auto OEM segments when compared to the year-ago period.
Operating Expense
Operating Expense
52-Weeks Ended December 27, 2025
Year-over-Year Change
52-Weeks Ended December 28, 2024
Year-over-Year Change
52-Weeks Ended December 30, 2023
Research and development expense
Percentage of Total Net Sales
Selling, general, and administrative expenses
Percentage of Total Net Sales
Total
Percentage of Total Net Sales
Total operating expense increased 13% in absolute dollars and was relatively flat as a percent of revenue in fiscal year 2025 compared to fiscal year 2024. Operating expense, as a percent of segment net sales, decreased in the fitness and aviation segments by 220 basis points and 170 basis points, respectively, when compared to the year-ago period due to increased sales and greater leverage of expenses. Operating expense, as a percent of segment net sales, increased in the outdoor segment by 140 basis points over the year-ago period, as the year-over-year increase of operating expense was greater than that of net sales. Operating expense, as a percent of segment net sales, was relatively flat in the marine and auto OEM segments when compared to the year-ago period.
Research and development expense increased 13% in absolute dollars and remained relatively flat as a percent of revenue compared to the year-ago period. The absolute dollar increase was primarily due to higher engineering personnel-related expenses.
Selling, general and administrative expense increased 13% in absolute dollars and remained relatively flat as a percent of revenue when compared to the year-ago period. The absolute dollar increase was primarily due to higher personnel-related expenses and advertising.
Operating Income
Operating Income (Loss)
52-Weeks Ended December 27, 2025
Year-over-Year Change
52-Weeks Ended December 28, 2024
Year-over-Year Change
52-Weeks Ended December 30, 2023
Fitness
Percentage of Segment Net Sales
Outdoor
Percentage of Segment Net Sales
Aviation
Percentage of Segment Net Sales
Marine
Percentage of Segment Net Sales
Auto OEM
Percentage of Segment Net Sales
Total
Percentage of Total Net Sales
NM - Represents that the percentage change is not meaningful.
Total operating income increased 18% in absolute dollars and remained relatively flat as a percent of revenue in fiscal year 2025 compared to fiscal year 2024. The improved operating income dollar performance in fitness, aviation, and marine was partially offset by decreases in outdoor and auto OEM.
Other Income (Expense)
Other Income (Expense)
52-Weeks Ended December 27, 2025
52-Weeks Ended December 28, 2024
52-Weeks Ended December 30, 2023
Interest income
Foreign currency gains (losses)
Other income
Total
The average interest rate return on cash and investments during the 52-weeks ended December 27, 2025 was 3.3%, and remained relatively flat compared to 3.3% during the 52-weeks ended December 28, 2024. Interest income increased primarily due to higher balances of cash and investments.
Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar. The Taiwan Dollar is the functional currency of Garmin Corporation, the Euro is the functional currency of several subsidiaries, and the U.S. Dollar is the functional currency of Garmin (Europe) Ltd., although some transactions and balances are denominated in British Pounds. Other notable currency exposures include the Australian Dollar, Polish Zloty, and Swiss Franc. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash, receivables and payables held in a currency other than the functional currency at a given legal entity.
The $7.8 million currency gain recognized in fiscal 2025 was primarily due to the U.S. Dollar weakeningagainst the Euro and Polish Zloty, partially offset by the U.S. Dollar weakeningagainst the Swiss Franc and Taiwan Dollar. During this period, the U.S. Dollar weakened 12.9% against the Euro and 14.3% against the Polish Zloty, resulting in gains of $49.2 million and $8.1 million, respectively, partially offset by the U.S. Dollar weakening 14.1% against the Swiss Franc and 4.6% against the Taiwan Dollar, resulting in losses of $36.9 million and $16.8 million, respectively. The remaining net currency gain of $4.2 million was related to the impacts of other currencies, each of which was individually immaterial.
The $20.6 million currency loss recognized in fiscal 2024 was primarily due to the U.S. Dollar strengtheningagainst the Euro, Polish Zloty, and Australian Dollar, partially offset by the U.S. Dollar strengtheningagainst the Taiwan Dollar. During this period, the U.S. Dollar strengthened 5.5% against the Euro, 4.1% against the Polish Zloty, and 8.9% against the Australian Dollar, resulting in losses of $27.1 million, $11.3 million, and $8.7 million, respectively, partially offset by the U.S. Dollar strengthening 6.5% against the Taiwan Dollar, resulting in a gain of $36.4 million. The remaining net currency loss of $9.9 million was related to the impacts of other currencies, each of which was individually immaterial.
Income Tax Provision (Benefit)
52-Weeks Ended December 27, 2025
52-Weeks Ended December 28, 2024
52-Weeks Ended December 30, 2023
Income before income taxes
Income tax provision (benefit)
Effective tax rate
The Company recorded income tax expense of $350.6 million, an effective tax rate of 17.4%, for the fiscal year ended December 27, 2025. The Company recorded income tax expense of $284.0 million, an effective tax rate of 16.7%, for the fiscal year ended December 28, 2024. The increase in effective tax rate when compared to the year-ago period was primarily driven by the U.S. tax legislation enacted in 2025, which, among other things, changed capitalization requirements of certain research and development costs, resulting in a decrease of certain U.S. tax deductions and credits. Certain provisions of the U.S. tax legislation enacted in 2025 become effective in 2026, which the Company anticipates will increase certain U.S. tax deductions and result in a lower effective tax rate in 2026 as compared to 2025.
Global taxing standards continue to evolve as a result of the Organization for Economic Co-Operation and Development (OECD) recommendations aimed at preventing perceived base erosion and profit shifting (BEPS) by multinational corporations, including the establishment of a global minimum tax rate of 15% under the “Pillar Two” framework. Many countries in which Garmin operates have implemented, or are in the process of implementing, global minimum tax legislation. Additionally, the Swiss canton of Schaffhausen passed legislation in 2023 that increased the cantonal corporate tax rate in 2024, resulting in a combined federal and cantonal statutory tax rate of approximately 15% in Switzerland.
Partially to respond to changes to global tax standards, we initiated an intercompany transaction in 2020 which migrates ownership of certain intellectual property from Switzerland to the United States, which is the Company’s primary location for research, development and executive management. At the end of this migration, a higher percentage of income will be recognized in the U.S. Due to the subjectivity inherent in transfer pricing associated with this intercompany transaction, we have obtained advanced pricing agreements with the relevant jurisdictions.
Net Income
As a result of the various factors noted above net income increased 18% to $1,663.9 million from $1,411.4 million in the prior year.
Liquidity and Capital Resources
We primarily use cash flow from operations, and expect that future cash requirements may be used, to fund our capital expenditures, support our working capital requirements, pay dividends, fund share repurchases, and fund strategic acquisitions. We believe that our existing cash balances and cash flow from operations will be sufficient to meet our short- and long-term projected working capital needs, capital expenditures, and other cash requirements.
Cash, Cash Equivalents, and Marketable Securities
As of December 27, 2025, we had approximately $4.1 billion of cash, cash equivalents and marketable securities. Management invests idle or surplus cash in accordance with the Company’s investment policy, which has been approved by Garmin’s Board of Directors. The investment policy’s primary objectives are to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. Garmin’s average interest rate returns on cash and investments during fiscal 2025 and 2024 were 3.3% and 3.3%, respectively. The fair value of our securities varies from period to period due to changes in interest rates, in the performance of the underlying collateral, and in the credit performance of the underlying issuer, among other factors. See Note 4 – Marketable Securities in the Notes to the Consolidated Financial Statements for additional information regarding marketable securities.
Cash Flows
Cash provided by operating activities totaled $1,633.4 million for fiscal 2025, compared to $1,432.5 million for fiscal 2024. The increase was primarily due to an increase in cash received from customers primarily driven by higher net sales, partially offset by increases in cash paid for cost of goods sold and operating expenses in fiscal 2025 when compared to fiscal 2024.
Cash used in investing activities totaled $645.2 million for fiscal 2025, compared to $393.3 million for fiscal 2024. The increase was primarily due to an increase in cash used for acquisitions and an increase in purchases of property and equipment in fiscal 2025 compared to fiscal 2024.
Cash used in financing activities totaled $844.1 million for fiscal 2025, compared to $626.9 million for fiscal 2024. This increase was primarily due to higher purchases of treasury shares under the share repurchase plan, higher cash dividend payments, and an increase in the purchase of treasury shares related to equity awards in fiscal 2025 compared to fiscal 2024.
Uses of Cash
Operating Leases
The Company has lease arrangements for certain real estate properties, vehicles, and equipment. Leased real estate properties are typically used for office space, distribution, data centers, and retail. As of December 27, 2025, the Company had fixed lease payment obligations of $235.5 million, with $43.5 million payable within 12 months.
Inventory Purchase Obligations
The Company obtains various raw materials and components for its products from a variety of third party suppliers. The Company’s inventory purchase obligations are primarily noncancelable commitments. As of December 27, 2025, the Company had inventory purchase obligations of $1,030.6 million, with $801.7 million payable within 12 months.
Other Purchase Obligations
The Company’s other purchase obligations primarily consist of noncancelable commitments for indirect purchases in connection with conducting our business. As of December 27, 2025, the Company had other purchase obligations of $526.0 million, with $276.0 million payable within 12 months.
Other Uses of Cash
Net cash outlays for income taxes exceeded income tax expense in each of the 2024 and 2023 fiscal years, partially due to the provisions of the 2017 United States Tax Cuts and Jobs Act, which required us to capitalize certain research and development costs and amortize those costs on our U.S. tax returns over a period of five or fifteen years, depending on where the associated costs were incurred. Net cash outlays for income taxes were less than income tax expense in 2025, partially due to the provisions included in the U.S. tax legislation enacted in 2025 which, among other things, changed capitalization requirements of certain research and development costs. Due to the timing of tax payments, we expect net cash outlays for income taxes in fiscal 2026 to exceed income tax expense in fiscal 2026, and to increase as compared to fiscal 2025.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk
Market Sensitivity
We have market risk primarily in connection with the pricing of our products and services, the purchase of raw materials, and the cost of shipping and handling. We strive to offset pricing declines for certain products through obtaining reductions in raw materials costs and the introduction of new products.
Inflation
Our business has at times been impacted by increasing costs. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.
Foreign Currency Exchange Rate Risk
The operation of Garmin’s subsidiaries in international markets results in exposure to movements in currency exchange rates. We have experienced significant impacts to our financial results due to the strengthening and weakening of the U.S. Dollar. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations. The Company has not historically hedged its foreign currency exchange rate risks with financial instruments.
The currencies that have historically created a majority of the Company’s exchange rate exposure include the Taiwan Dollar, Euro, and Polish Zloty. Garmin Corporation, headquartered in Xizhi, Taiwan, uses the local currency as the functional currency. The Company translates all assets and liabilities at year-end exchange rates and income and expense accounts at rates prevailing during the year. In order to minimize the effect of the currency exchange fluctuations on our net assets, we have elected to retain most of our Taiwan subsidiary’s cash and investments denominated in U.S. Dollars.
Most European subsidiaries use the Euro as the functional currency. The functional currency of our largest European subsidiary, Garmin (Europe) Ltd., is the U.S. Dollar, although some transactions occur in British Pound Sterling or Euros. The functional currency of Garmin Wroclaw, a subsidiary headquartered in Poland that manufactures certain auto OEM products, is the Polish Zloty. Foreign currency gains or losses have been realized historically related to the movements of those currencies relative to the U.S. Dollar.
During fiscal year 2025, the Company incurred a net foreign currency gain of $7.8 million. The U.S. Dollar weakenedagainst the Euro and Polish Zloty, partially offset by the U.S. Dollar weakeningagainst the Swiss Franc and Taiwan Dollar. During fiscal 2025, the U.S. Dollar weakened 12.9% against the Euro and 14.3% against the Polish Zloty, resulting in gains of $49.2 million and $8.1 million, respectively, partially offset by the U.S. Dollar weakening 14.1% against the Swiss Franc and 4.6% against the Taiwan Dollar, resulting in losses of $36.9 million and $16.8 million, respectively. The remaining net currency gain of $4.2 million was related to the impacts of other currencies, each of which was individually immaterial. These and other currency moves during fiscal year 2025 also resulted in a currency translation adjustment of $136.0 million within accumulated other comprehensive income (loss).
We assessed the Company’s exposure to movements in currency exchange rates by performing a sensitivity analysis of adverse changes in exchange rates and the corresponding impact to our results of operations. Based on monetary assets and liabilities denominated in currencies other than respective functional currencies as of December 27, 2025 and December 28, 2024, hypothetical and reasonably possible adverse changes of 10% for the Taiwan Dollar, Euro, Polish Zloty, and Australian Dollar would have resulted in an adverse impact on income before income taxes of approximately $135 million and $100 million, respectively.
Interest Rate Risk
We have no outstanding long-term debt as of December 27, 2025 and otherwise have no meaningful debt-related interest rate risk.
We are exposed to interest rate risk in connection with our investments in marketable securities. As interest rates change, the unrealized gains and losses associated with our available-for-sale debt securities will fluctuate accordingly.
The primary objectives of the Company’s investment policy are to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. The Company does not intend to sell securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell such investments before recovery of their amortized costs bases, which may be at maturity. As of December 27, 2025 and December 28, 2024, the Company had not recognized an allowance for credit losses on any securities in an unrealized loss position.
We assessed the Company’s exposure to interest rate risk by performing a sensitivity analysis of a parallel shift in the yield curve and the corresponding impact to the Company’s portfolio of marketable securities. Based on balance sheet positions as of December 27, 2025 and December 28, 2024, the hypothetical and reasonably possible 100 basis point increases in interest rates across all securities would have resulted in declines in portfolio fair market value of approximately $41 million and $30 million at December 27, 2025 and December 28, 2024, respectively. Such losses would only be realized if the Company sold the investments prior to maturity.
Item 8. Financial Statemen ts and Supplementary Data
CONSOLIDATED FINANCIAL STATEMENTS
Garmin Ltd. and Subsidiaries
Years Ended December 27, 2025, December 28, 2024, and December 30, 2023
Contents
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42 )
Consolidated Statements of Income for the Years Ended December 27, 2025, December 28, 2024, a nd December 30, 2023
Consolidated Statements of Comprehensive Income for the Years Ended December 27, 2025, December 28, 2024, and December 30, 2023
Consolidated Balance Sheets at December 27, 2025 and December 28, 2024
Consolidated Statements of Cash Flows for the Years Ended December 27, 2025, December 28, 2024, and December 30, 2023
Consolidated Statements of Stockholders’ Equity for the Years Ended December 27, 2025, December 28, 2024, and December 30, 2023
Notes to Consolidated Financial Statements
Report of Independent Regist ered Public Accounting Firm
To the Shareholders and the Board of Directors of Garmin Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Garmin Ltd. and subsidiaries (the Company) as of December 27, 2025, and December 28, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 27, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 27, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 18, 2026 , expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
Measurement of Uncertain Tax Positions
Description of the Matter
The Company accounts for income taxes in accordance with ASC 740, Income Taxes . The Company operates in a multinational tax environment and is subject to a multitude of tax laws, regulations, and guidelines. Some transactions and the related impact to the income tax provision are judgmental, particularly related to the application of transfer pricing rules to certain intercompany transactions.
Auditing the tax positions related to the application of transfer pricing rules and tax laws to certain intercompany transactions was complex and measurement of the uncertain tax positions required judgment. Certain tax positions carry unique facts and circumstances that must be evaluated considering the functions performed by certain Company legal entities in each jurisdiction and the measurement of the uncertain tax position is based on the interpretation of laws, regulations, tax case law and rulings, and other factors.
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls relating to the application of transfer pricing rules and tax laws to certain intercompany transactions and the related recognition and measurement of uncertain tax positions.
Our audit procedures included, among others, involving our tax professionals to assist in testing the Company’s recognition and measurement of uncertain tax positions related to the application of transfer pricing rules to certain intercompany transactions, including evaluating the assumptions and data in the Company’s transfer pricing analyses. We also read the Company’s correspondence with the relevant tax authorities (if any), evaluated the Company’s interpretation of the application of global or local tax law to certain intercompany transactions, and assessed relevant third-party advice obtained by the Company. In addition, we used our knowledge of international and local income tax laws to evaluate the Company’s accounting conclusions for these uncertain tax positions.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1990.
Kansas City, Missouri
February 18, 2026
Garmin Ltd. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share information)
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Net sales
Cost of goods sold
Gross profit
Research and development expense
Selling, general and administrative expenses
Total operating expense
Operating income
Other income (expense):
Interest income
Foreign currency gains (losses)
Other income
Total other income (expense)
Income before income taxes
Income tax provision (benefit):
Current
Deferred
Total income tax provision (benefit)
Net income
Basic net income per share
Diluted net income per share
See accompanying notes.
Garmin Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands)
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Net income
Foreign currency translation adjustment
Change in fair value of available-for-sale marketable securities, net of deferred taxes
Comprehensive income
See accompanying notes.
Garmin Ltd. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
December 27, 2025
December 28, 2024
Assets
Current assets:
Cash and cash equivalents
Marketable securities
Accounts receivable, less allowance for doubtful accounts of $ 9,191 in 2025 and
Inventories
Deferred costs
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Noncurrent marketable securities
Deferred income tax assets
Noncurrent deferred costs
Goodwill
Other intangible assets, net
Other noncurrent assets
Total assets
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Salaries and benefits payable
Accrued warranty costs
Accrued sales program costs
Other accrued expenses
Deferred revenue
Income taxes payable
Dividend payable
Total current liabilities
Deferred income tax liabilities
Noncurrent income taxes payable
Noncurrent deferred revenue
Noncurrent operating lease liabilities
Other noncurrent liabilities
Stockholders’ equity:
Common shares, $ 0.10 par value ( 194,901 and 194,901 shares authorized and
issued; 192,620 and 192,468 shares outstanding)
Additional paid-in capital
Treasury shares ( 2,281 and 2,433 shares)
Retained earnings
Accumulated other comprehensive income (loss)
Total stockholders’ equity
Total liabilities and stockholders’ equity
See accompanying notes.
Garmin Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Operating Activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation
Amortization
Loss (gain) on sale or disposal of property and equipment
Unrealized foreign currency (gains) losses
Deferred income taxes
Stock compensation expense
Realized losses on marketable securities
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net of allowance for doubtful accounts
Inventories
Other current and noncurrent assets
Accounts payable
Other current and noncurrent liabilities
Deferred revenue
Deferred costs
Income taxes
Net cash provided by operating activities
Investing activities:
Purchases of property and equipment
Purchase of marketable securities
Redemption of marketable securities
Acquisitions, net of cash acquired
Other investing activities, net
Net cash used in investing activities
Financing activities:
Dividends
Proceeds from issuance of treasury shares related to equity awards
Purchase of treasury shares related to equity awards
Purchase of treasury shares under share repurchase plan
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of year
Cash, cash equivalents, and restricted cash at end of year
See accompanying notes.
Garmin Ltd. and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(In thousands)
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Supplemental disclosure of non-cash investing and financing activities
Decrease in accrued capital expenditures related to purchases of property and equipment
Change in marketable securities related to unrealized appreciation
Fair value of assets acquired
Fair value of liabilities assumed
Less: cash acquired
Cash paid for acquisitions, net of cash acquired
See accompanying notes.
Garmin Ltd. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(In thousands)
Common
Shares
Additional
Paid-In
Capital
Treasury
Shares
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Balance at December 31, 2022
Net income
Translation adjustment
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $ 11,060
Comprehensive income
Dividends
Issuance of treasury shares related to equity awards
Stock compensation
Purchase of treasury shares related to equity awards
Purchase of treasury shares under share repurchase plan, including any associated excise tax
Cancellation of treasury shares
Share capital currency change
Balance at December 30, 2023
Net income
Translation adjustment
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $ 7,573
Comprehensive income
Dividends
Issuance of treasury shares related to equity awards
Stock compensation
Purchase of treasury shares related to equity awards
Purchase of treasury shares under share repurchase plan, including any associated excise tax
Cancellation of treasury shares
Balance at December 28, 2024
Net income
Translation adjustment
Adjustment related to unrealized gains (losses) on available-for-sale securities net of income tax effects of $ 10,685
Comprehensive income
Dividends
Issuance of treasury shares related to equity awards
Stock compensation
Purchase of treasury shares related to equity awards
Purchase of treasury shares under share repurchase plan, including any associated excise tax
Balance at December 27, 2025
See accompanying notes.
Garmin Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands, except share and per share information)
December 27, 2025 and December 28, 2024
1. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
Garmin Ltd. and its subsidiaries (collectively, the Company or Garmin) design, develop, manufacture, market, and distribute a diverse family of Global Positioning System (GPS)-enabled products and other navigation, communications, sensor-based and information products and services. Garmin Corporation is primarily responsible for manufacturing and distribution of many products to other subsidiaries of the Company and, to a lesser extent, new product development and sales and marketing of the Company’s products in Asia, which is part of the Company’s Asia Pacific and Australian Continent (APAC) region. Garmin International, Inc. (Garmin International) is primarily responsible for sales and marketing of products in the Company’s Americas region, which includes North America and South America, and for most of the Company’s research and new product development. Garmin International also manufactures products for the Company’s aviation and auto OEM segments. Garmin (Europe) Ltd. is primarily responsible for sales and marketing of the Company’s products in Europe, the Middle East and Africa (EMEA), with many of these sales made to other Company-owned distributors in the EMEA region.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The accompanying consolidated financial statements reflect the accounts of Garmin Ltd. and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated.
Changes in Classification and Allocation
As previously disclosed, beginning in the first quarter of fiscal 2024, the Company changed the presentation of operating expense to include advertising expense within selling, general and administrative expenses on the Company’s consolidated statements of income, which management believes to be a more meaningful presentation. The Company continued this presentation of operating expense in the current period. Results for the 52-week period ended December 30, 2023 were recast to conform to this presentation. This change had no effect on the Company’s consolidated operating or net income.
Fiscal Year
The Company’s fiscal year is based on a 52- or 53-week period ending on the last Saturday of the calendar year. Due to the fact that there are not exactly 52 weeks in a calendar year, the Company will have a fiscal year comprising 53 weeks in certain fiscal years, as determined by when the last Saturday of the calendar year occurs.
In those resulting fiscal years that have 53 weeks, the Company will record an extra week of sales, costs, and related financial activity. Therefore, the financial results of those 53-week fiscal years, and the associated 14-week fourth quarters, will not be entirely comparable to the prior and subsequent 52-week fiscal years and the associated 13-week quarters. Fiscal years 2025, 2024, and 2023 each included 52 weeks .
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Foreign Currency
Many Garmin Ltd. subsidiaries utilize a currency other than the United States Dollar (USD) as their functional currency. As required by Accounting Standards Codification (ASC) Topic 830, Foreign Currency Matters , the financial statements of these subsidiaries for all periods presented have been translated into USD, the functional currency of Garmin Ltd., and the reporting currency herein, for purposes of consolidation at rates prevailing during the year for sales, costs, and expenses and at end-of-year rates for all assets and liabilities. The effect of this translation is recorded in a separate component of stockholders’ equity. Cumulative currency translation adjustments of $ 19,103 and $ ( 116,866 ) as of December 27, 2025 and December 28, 2024, respectively, have been included in accumulated other comprehensive income (loss) in the accompanying consolidated balance sheets.
Transactions in foreign currencies are recorded at the approximate rate of exchange at the transaction date. Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date. The majority of the Company’s consolidated foreign currency gain or loss is typically driven by the significant cash, receivables, and payables held in a currency other than the functional currency at a given legal entity. Net foreign currency gains recorded in results of operations were $ 7,847 for the year ended December 27, 2025, net foreign currency losses recorded in results of operations were $ 20,599 for the year ended December 28, 2024, and net foreign currency gains recorded in results of operations were $ 26,434 for the year ended December 30, 2023. The gain in fiscal 2025 was primarily due to the U.S. Dollar weakeningagainst the Euro and Polish Zloty, partially offset by the U.S. Dollar weakeningagainst the Swiss Franc and Taiwan Dollar. The loss in fiscal 2024 was primarily due to the U.S. Dollar strengtheningagainst the Euro, Polish Zloty and Australian Dollar, partially offset by the U.S. Dollar strengtheningagainst the Taiwan Dollar. The gain in fiscal 2023 was primarily due to the U.S. Dollar weakeningagainst the Polish Zloty and Euro, partially offset by the U.S. Dollar weakening at times during the year against the Taiwan Dollar.
Garmin Corporation, one of the Company’s principal subsidiaries, is located in Taiwan. The Taiwan Foreign Exchange Control Statute (the Statute), and regulations thereunder, provides that all foreign exchange transactions must be executed by banks designated to handle such business by the Ministry of Finance of Taiwan and by the Central Bank of the Republic of China (Taiwan), also referred to as the CBC. Current regulations favor trade-related foreign exchange transactions, so the Statute does not impose any significant restrictions on import or export activities involving foreign currencies in Taiwan. Non-trade related currency exchanges exceeding $50 million, or its equivalent, in a calendar year require approval of the CBC.
Revenue Recognition
The Company recognizes revenue upon the transfer of control of promised products or services to the customer in an amount that depicts the consideration to which the Company expects to be entitled for the related products or services. For the large majority of the Company’s sales, transfer of control occurs once product has shipped and title and risk of loss have transferred to the customer.
The Company offers certain tangible products with ongoing services promised over a period of time. When such services have been identified as both capable of being distinct and separately identifiable from the related tangible product, the associated revenue allocated to such services is recognized over time. These ongoing services primarily consist of the Company’s contractual promises to provide map update services to customers that use its navigation products. The Company generally does not offer specified or unspecified upgrade rights to its customers in connection with software sales.
The Company allocates revenue to all performance obligations associated with tangible products containing separately identifiable ongoing services based on the respective performance obligations’ relative standalone selling prices (SSP), with the amounts allocated to ongoing services deferred and recognized over the contractual service period or estimated life of the product.
Additionally, the Company has offered certain other products and services with ongoing performance obligations for which the associated revenue is recognized over the contractual service period (typically ranging from 1 month to 3 years ), including aviation database and other service subscriptions, incremental navigation and communication service subscriptions, premium content subscriptions delivered through mobile applications, and extended warranties.
The Company records revenue net of sales tax or value-added tax and variable consideration such as trade discounts and customer returns. Payment is due typically within 90 days or less of shipment of product or upon the initiation of a service or subscription period. The Company records estimated reductions to revenue in the form of variable consideration for returns and customer sales programs including rebates, price protection, promotions, and other volume-based incentives. Cooperative advertising incentives payable to dealers and distributors are recorded as reductions of revenue unless the Company obtains proof of a distinct advertising service, in which case the incentive is recorded as advertising expense. The reductions to revenue are based on estimates and judgments using historical experience and expectation of future conditions, if not otherwise determinable.
Shipping and Handling Costs
Shipping and handling activities are typically performed before the customer obtains control of the good, and the related costs are expensed at the approximate time of sale. Shipping and handling costs are included in cost of goods sold in the accompanying consolidated statements of income.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising expense amounted to approximately $ 228,543 , $ 191,585 , and $ 173,109 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023 , respectively, and is included within selling, general and administrative expenses in the accompanying consolidated statements of income.
Software Development Costs
ASC Topic 985-20, Software – Costs of Software to Be Sold, Leased, or Marketed , requires companies to expense software development costs as they incur them until technological feasibility has been established, at which time those costs are subject to capitalization until the product is available for general release to customers. Costs incurred by the Company subsequent to achievement of technological feasibility are generally not significant, as the time elapsed from working model to release is typically short. As required by ASC Topic 730, Research and Development , costs incurred to enhance the Company’ s existing products or after the general release of the service using the product are expensed in the period they are incurred and included in research and development costs in the accompanying consolidated statements of income.
Accounting for Stock Compensation
The Company currently sponsors three employee stock compensation plans. ASC Topic 718, Compensation – Stock Compensation , requires the measurement and recognition of compensation expenses for all share-based payment awards made to employees and directors, including employee stock options and restricted stock units, based on estimated fair values.
The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as stock compensation expense over the requisite service period in the Company’s consolidated statements of income.
As stock compensation expense recognized in the accompanying consolidated statements of income is based on awards ultimately expected to vest, it is net of estimated and actual forfeitures. Accounting guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on historical experience.
Excess tax benefits or deficiencies from stock compensation are recognized in the income tax provision and recorded as discrete tax items in the period in which they occur. Excess income tax benefits from stock compensation arrangements are classified as a cash flow from operations.
Stock compensation plans are discussed in more detail in Note 10 – Employee Stock Compensation and Savings Plans of the Notes to Consolidated Financial Statements.
Research and Development
Research and development costs, which are typically expensed as incurred, amounted to approximately $ 1,126,231 , $ 993,601 , and $ 904,696 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023 , respectively.
Preproduction Costs Related to Long-Term Supply Arrangements
Preproduction design and development costs related to long-term supply arrangements are expensed as incurred, and classified as research and development, unless the customer has provided a contractual guarantee for reimbursement of such costs. Contractually reimbursable costs are capitalized as incurred in the consolidated balance sheets within prepaid expenses and other current assets if reimbursement is expected to be received within one year, or within other noncurrent assets if expected to be received beyond one year. Such capitalized costs were approximately $ 18,190 and $ 18,071 as of December 27, 2025 and December 28, 2024 , respectively.
Income Taxes
The Company accounts for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes . The liability method provides that deferred tax assets and liabilities are recorded based on the difference between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes as measured based on the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company accounts for uncertainty in income taxes in accordance with ASC Topic 740. The Company recognizes liabilities based on its estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves not to be required, the reversal of the liabilities results in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the Company’s estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.
Income taxes are discussed in more detail in Note 5 – Income Taxes of the Notes to Consolidated Financial Statements.
Earnings Per Share
Basic earnings per share amounts are computed based on the weighted-average number of common shares outstanding. For purposes of diluted earnings per share, the number of shares that would be issued from the exercise of dilutive share-based compensation awards has been reduced by the number of shares that could have been purchased from the proceeds of the exercise or release at the average market price of the Company’s shares during the period the awards were outstanding. See Note 3 – Earnings Per Share of the Notes to Consolidated Financial Statements for additional information.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include cash on hand, operating accounts, money market funds, deposits readily convertible to known amounts of cash, and securities with maturities of three months or less when purchased. The carrying amount of cash and cash equivalents approximates fair value, given the short maturity of those instruments. Restricted cash is reported within other noncurrent assets on the accompanying consolidated balance sheets. See Note 7 – Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information on restricted cash.
The total of the cash and cash equivalents balance and the restricted cash reported within other noncurrent assets on the consolidated balance sheets is equal to the total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows.
Marketable Securities
Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date.
All of the Company’s marketable securities were considered available-for-sale at December 27, 2025. Available-for-sale securities are stated at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. At December 27, 2025, cumulative unrealized net gains of $ 1,542 were reported in accumulated other comprehensive income (loss), net of related taxes. At December 28, 2024, cumulative unrealized losses of $ 30,372 were reported in accumulated other comprehensive income (loss), net of related taxes.
The Company recognizes impairments relating to credit losses of available-for-sale securities through an allowance for credit losses and other income (expense) on the Company’s consolidated statements of income. Impairment not relating to credit losses is recorded in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets.
Testing for impairment of investments requires management judgment. The identification of potentially impaired investments, the determination of their fair value, and the assessment of whether any decline in value is related to credit losses are the primary elements of the assessment that require judgment. The discovery of new information and the passage of time can change these judgments. Revisions of impairment judgments are made when new information becomes known, and any resulting impairment adjustments are made at that time. The economic environment and volatility of securities markets increase the difficulty of assessing investment impairment.
In making this assessment management evaluates the extent to which the fair value is less than the amortized cost basis, any change in credit rating of the security, adverse conditions specifically related to the security, failure of the issuer to make scheduled payments, and other relevant factors affecting the security. If it is determined that a credit loss exists, the amount of the credit loss is determined by comparing the present value of the expected future cash flows for the security to the amortized cost basis of the security, limited by the amount the fair value is less than the amortized cost basis.
The amortized cost of debt securities classified as available-for-sale is adjusted for amortization of premiums and accretion of discounts to maturity, or in the case of mortgage-backed securities, over the estimated life of the security. Such amortization and realized gains/losses are recorded within interest income and other income (expense), respectively, on the Company’s consolidated statements of income. The cost of securities sold is based on the specific identification method.
Marketable securities are discussed in more detail in Note 4 – Marketable Securities of the Notes to Consolidated Financial Statements.
Fair Value of Financial Instruments
As required by ASC Topic 825, Financial Instruments , the following summarizes required information about the fair value of certain financial instruments for which it is currently practicable to estimate such value. None of the financial instruments are held or issued for trading purposes. The carrying amounts and fair values of the Company’s financial instruments are as follows:
December 27, 2025
December 28, 2024
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Cash and cash equivalents
Marketable securities
For certain of the Company’s other financial instruments, including accounts receivable, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities.
Trade Accounts Receivable
The Company sells its products to retailers, dealers, distributors, OEMs, and other customers and grants credit to certain customers based on its evaluation of customers' financial condition. Generally, the Company does not require security when trade credit is granted to customers. The Company’ s trade accounts receivable are carried at net realizable value, typically are collected within 90 days, and do not bear interest. Certain customers are allowed extended terms consistent with normal industry practice. Credit losses are provided for in the Company’s consolidated financial statements and typically have been within management’s expectations. Past due receivable balances are typically written off when internal collection efforts have been unsuccessful in collecting the amount due. The Company maintains trade credit insurance to provide some security against certain losses within policy limits.
Concentration of Credit Risk
The Company’s top ten customers have contributed between approximately 20 % and 25 % of net sales annually since 2023. None of the Company’s customers individually accounted for 10% or more of consolidated net sales in the years ended December 27, 2025, December 28, 2024, and December 30, 2023 .
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead associated with purchases and production and is determined on a first-in, first-out (FIFO) basis. The Company writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. The details of i nventories consisted of the following:
December 27, 2025
December 28, 2024
Raw materials
Work-in-process
Finished goods
Inventories
Deferred Revenues and Costs
At December 27, 2025 and December 28, 2024, the Company had deferred revenues totaling $ 127,923 and $ 139,318 , respectively, and related deferred costs totaling $ 21,911 and $ 30,938 , respectively.
Deferred revenue consists primarily of the transaction price allocated to performance obligations that are recognized over a period of time basis as discussed in the Revenue Recognition portion of this footnote. Deferred costs primarily refer to the license fees incurred by the Company associated with the aforementioned unsatisfied performance obligations, which are amortized over the same period as the revenue is recognized. The Company typically pays the associated license fees either monthly or quarterly in arrears, on a per item shipped or delivered basis.
The Company applies a practical expedient, as permitted within ASC Topic 340, Other Assets and Deferred Costs , to expense as incurred the incremental costs to obtain a contract when the amortization period of the asset that would have otherwise been recognized is one year or less.
Property and Equipment
Property and equipment is recorded at cost and typically depreciated using the straight-line method. The components of property and equipment were as follows and are generally depreciated over the following estimated useful lives:
Estimated Useful Life
December 27, 2025
December 28, 2024
Land
Building and improvements
15 to 50 years
Machinery, equipment and software
3 to 10 years
Total, at cost
Accumulated depreciation
Property and equipment, net
As required by ASC Topic 360, Property, Plant and Equipment , the Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. That assessment is based on the carrying amount of the asset at the date it is tested for recoverability. An impairmentloss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. The Company did no t recognize any material long-lived asset impairment charges in the fiscal years of 2025, 2024, or 2023 .
Goodwill and Other Intangible Assets
The amount of excess purchase cost over fair value of net assets acquired in a business combination is recorded as goodwill and represents the future economic benefit arising from other assets acquired that were not individually and separately recognized. Goodwill was $ 760,241 at December 27, 2025, and $ 603,947 at December 28, 2024 . Each of the Company’s operating segments (fitness, outdoor, aviation, marine, and auto OEM) represents a distinct reporting unit. The Company allocates goodwill to reporting units in proportion to the expected benefit from each business combination. Changes in the carrying amount of goodwill for the years ended December 27, 2025 and December 28, 2024 are as follows:
Fitness
Outdoor
Aviation
Marine
Auto OEM
Total
Goodwill balance as of December 30, 2023
Acquisitions
Foreign currency translation and other adjustments
Goodwill balance as of December 28, 2024
Acquisitions
Foreign currency translation and other adjustments
Goodwill balance as of December 27, 2025
ASC Topic 350, Intangibles – Goodwill and Other , requires that goodwill and intangible assets with indefinite useful lives should not be amortized but rather be assessed for impairment at least annually or sooner whenever events or changes in circumstances indicate that they may be impaired. The Company performs its annual impairment assessments of goodwill and indefinite-lived intangible assets, if any, in the fourth quarter of each year, as of the Company’s fiscal year end date, and between annual tests if an event occurs or circumstances change that would indicate it is more likely than not that they may be impaired.
ASC Topic 350 allows management to first perform a qualitative goodwill assessment by assessing the qualitative factors of relevant events and circumstances at the reporting unit level to determine if it is necessary to perform the quantitative goodwill impairment test. If factors indicate that it is more likely than not that the fair value of the reporting unit is less than the carrying amount, then the quantitative test will be performed. If the fair value of the reporting unit is less than the carrying amount, then a goodwill impairment charge will be recognized in the amount by which carrying amount exceeds fair value, limited to the total amount of goodwill allocated to that reporting unit.
Application of the goodwill impairment test requires judgment, including the identification of reporting units and assignment of assets and liabilities to reporting units. If a quantitative impairment test is performed, the fair value of each reporting unit is estimated through the use of a discounted cash flow methodology, which also requires judgment and assumptions, including discount rate, projected future revenues, projected future operating margins, and terminal growth rates. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors.
Management concluded that no goodwill associated with any reporting unit is currently at risk of impairment based on qualitative assessments performed in 2025 . The Company did no t recognize any material goodwill or intangible asset impairment charges in fiscal years 2025, 2024, or 2023.
At December 27, 2025, and December 28, 2024 , the Company had intellectual property, customer related intangibles, and other identifiable finite-lived intangible assets recorded at a cost of $ 606,377 and $ 543,397 , respectively. Identifiable, finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis typically over three to twelve years . Accumulated amortization was $ 408,015 and $ 389,234 at December 27, 2025 and December 28, 2024, respectively. Amortization expense on these intangible assets was $ 32,368 , $ 30,666 , and $ 30,513 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. In the next five years, the amortization expense related to intangible assets held as of December 27, 2025 is estimated to be $ 32,725 , $ 29,303 , $ 24,042 , $ 21,054 , and $ 16,493 , re spectively. The Company also reviews finite-lived intangible assets for impairment in accordance with ASC Topic 360, as described above, whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be fully recoverable.
Leases
The Company leases certain real estate properties, vehicles, and equipment in various countries around the world. Leased properties are typically used for office space, distribution, and retail. The Company’s leases are classified as operating leases with remaining terms of 1 to 30 years, some of which include an option to extend or renew. If the exercise of an option to extend or renew is determined to be reasonably certain, the associated right-of-use asset and lease liability reflects the extended period and payments. For newly signed leases, the right-of-use asset and lease liability is recognized on lease commencement date. Variable lease costs, such as future adjustments to payments based on consumer price indices, are excluded in the recognition of right-of-use assets and lease liabilities. For all real estate leases, any non-lease components, including common area maintenance, have been separated from lease components and excluded from the associated right-of-use asset and lease liability calculations. For all equipment and vehicle leases, an accounting policy election has been made to not separate lease and non-lease components.
Leases with an initial term of 12 months or less (“short-term leases”) are not recognized on the Company’s consolidated balance sheets as a right-of-use asset or lease liability.
Product Warranty
The Company accrues for estimated future warranty costs at the time products are sold. The Company provides standard warranties to its retail partners and end-users. The standard warranty generally provides for products to be free from defects in materials or workmanship, and the warranty period is generally one to two years from the date of shipment, while certain aviation, marine, and auto OEM products have a standard warranty period of two years or more from the date of installation. The Company’s estimates of costs to service its warranty obligations are based on historical experience and management’s expectations and judgments of future conditions, with most claims resolved within a year of the sale. The following reconciliation presents details of the changes in the Company’s accrued warranty costs:
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Balance - beginning of period
Accrual for products sold (1)
Expenditures
Balance - end of period
(1) Changes in cost estimates related to pre-existing warranties were not material and aggregated with accruals for new warranty contracts in the ‘accrual for products sold’ line.
Contingencies
In the normal course of business, the Company and its subsidiaries are parties to various legal claims, investigations and complaints, including matters alleging patent infringement and other intellectual property claims. The Company evaluates, on a quarterly and annual basis, developments in legal proceedings, investigations, claims, and other loss contingencies that could affect any required accrual or disclosure or estimate of reasonably possible loss or range of loss. An estimated loss from a loss contingency is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, the Company accrues the minimum amount in the range.
If an outcome unfavorable to the Company is determined to be probable, but the amount of loss cannot be reasonably estimated or is determined to be reasonably possible, but not probable, the Company discloses the nature of the contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. The Company’s aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a loss is believed to be reasonably possible, but not probable, and a liability therefore has not been accrued. This aggregate range only represents the Company’s estimate of reasonably possible losses and does not represent the Company’s maximum loss exposure. The assessment regarding whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. In assessing the probability of an outcome in a lawsuit, claim or assessment that could be unfavorable to the Company, the Company considers the following factors, among others: (a) the nature of the litigation, claim, or assessment; (b) the progress of the case; (c) the opinions or views of legal counsel and other advisers; (d) the Company’s experience in similar cases; (e) the experience of other entities in similar cases; and (f) how the Company intends to respond to the lawsuit, claim, or assessment. Costs incurred in defending lawsuits, claims or assessments are expensed as incurred.
See Note 7 – Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information on contingencies.
Recently Adopted Accounting Standards
Income Taxes
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the income tax rate reconciliation and income taxes paid. ASU 2023-09 requires the Company to disclose specified additional information in its income tax rate reconciliation, provide additional information for certain reconciling items, and disaggregate its disclosure of income taxes paid for Switzerland federal, Switzerland cantonal and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company has adopted the new standard using a retrospective approach, recasting prior year disclosures to conform to current year presentation. See Note 5 – Income Taxes of the Notes to Consolidated Financial Statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
Disaggregation of Income Statement Expenses
In November 2024, FASB issued Accounting Standards Update No. 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included in the expense captions on the face of the statements of income, on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments may be applied using either a prospective or retrospective approach. The Company is currently evaluating the impact that the updated standard will have on its financial statement disclosures.
2. Revenue
In order to further depict how the nature, amount, timing and uncertainty of the Company’s revenue and cash flows are affected by economic factors, Garmin disaggregates revenue (or “net sales”) by geographic region, major product category, and pattern of recognition.
Disaggregated revenue by geographic region (Americas, EMEA, and APAC) is presented in Note 11 – Segment Information and Geographic Data. Note 11 also contains disaggregated revenue information of the five major product categories identified by the Company (fitness, outdoor, aviation, marine, and auto OEM), which also represent the Company’s operating segments.
A large majority of the Company’s revenue is recognized on a point in time basis, usually once the product is shipped and title and risk of loss have transferred to the customer. Revenue recognized over time is primarily within the outdoor, aviation, and auto OEM segments and relates to performance obligations that are satisfied over the estimated life of the product or contractual service period. Revenue disaggregated by pattern of recognition, based on the timing of transfer of the goods or services, is presented in the table below:
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Point in time
Over time
Net sales
Transaction price and costs associated with the Company’s unsatisfied performance obligations are reflected as deferred revenue and deferred costs, respectively, on the Company’s consolidated balance sheets. Such amounts are recognized ratably over the applicable estimated useful life or contractual service period. Changes in deferred revenue and costs during the 52-week periods ending December 27, 2025 and December 28, 2024 are presented below:
Fiscal Year Ended
December 27, 2025
December 28, 2024
Deferred
Revenue (1)
Deferred
Costs (2)
Deferred
Revenue (1)
Deferred
Costs (2)
Balance, beginning of period
Deferrals in period
Recognition of deferrals in period
Balance, end of period
(1) Deferred revenue is comprised of both deferred revenue and noncurrent deferred revenue per the consolidated balance sheets.
(2) Deferred costs are comprised of both deferred costs and noncurrent deferred costs per the consolidated balance sheets.
Of the $ 334,625 of deferred revenue recognized in the 52-weeks ended December 27, 2025, approximately $ 93,000 was deferred as of the beginning of the period. Of the $ 328,779 of deferred revenue recognized in the
52-weeks ended December 28, 2024 , $ 92,093 was deferred as of the beginning of the period. Of the $ 127,923 of deferred revenue as of December 27, 2025 , the Company expects to recognize approximately 87% ratably over a total period of three years or less.
3. Earnings Per Share
The following table sets forth the computation of basic and diluted net income per share. Stock options, stock appreciation rights, and restricted stock units are collectively referred to as "equity awards". There were no anti-dilutive equity awards excluded from the calculation of diluted net income per share for the periods presented below.
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Numerator:
Numerator for basic and diluted net income per share - net income
Denominator (in thousands):
Denominator for basic net income per share – weighted-average common shares
Effect of dilutive equity awards
Denominator for diluted net income per share – adjusted weighted-average common shares
Basic net income per share
Diluted net income per share
4. Marketable Securities
ASC Topic 820, Fair Value Measurements and Disclosures , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The accounting guidance classifies the inputs used to measure fair value into the following hierarchy:
Level 1
Unadjusted quoted prices in active markets for the identical asset or liability
Level 2
Observable inputs for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3
Unobservable inputs for the asset or liability
The Company endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Valuation is based on prices obtained from an independent pricing vendor using both market and income approaches. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields, and credit spreads.
The method described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Marketable securities classified as available-for-sale securities are summarized below:
Available-For-Sale Securities
as of December 27, 2025
Fair Value Level
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Fair Value
U.S. Treasury securities
Level 2
Agency securities
Level 2
Mortgage-backed securities
Level 2
Corporate debt securities
Level 2
Municipal securities
Level 2
Other
Level 2
Total
Available-For-Sale Securities
as of December 28, 2024
Fair Value Level
Amortized Cost
Gross Unrealized
Gains
Gross Unrealized
Losses
Fair Value
U.S. Treasury securities
Level 2
Agency securities
Level 2
Mortgage-backed securities
Level 2
Corporate debt securities
Level 2
Municipal securities
Level 2
Other
Level 2
Total
The primary objectives of the Company’s investment policy are to preserve capital, maintain an acceptable degree of liquidity, and maximize yield within the constraint of low credit risk. The fair value of securities varies from period to period due to changes in interest rates, the performance of the underlying collateral, and the credit performance of the underlying issuer, among other factors.
Accrued interest receivable, which totaled $ 19,144 as of December 27, 2025 , is excluded from both the fair value and amortized cost basis of available-for-sale securities and is included within prepaid expenses and other current assets on the Company’s consolidated balance sheets. The Company writes off impaired accrued interest on a timely basis, generally within 30 days of the due date, by reversing interest income. No accrued interest was written off during the 52-week period ended December 27, 2025.
The Company recognizes impairments relating to credit losses of available-for-sale securities through an allowance for credit losses and other income (expense) on the Company’s consolidated statements of income. Impairment not relating to credit losses is recorded in accumulated other comprehensive income (loss) on the Company’s consolidated balance sheets. The cost of securities sold is based on the specific identification method. Approximately 51 % of securities in the Company’s portfolio were at an unrealized loss position at December 27, 2025.
The following tables display additional information regarding gross unrealized losses and fair value by major security type for available-for-sale securities in an unrealized loss position as of December 27, 2025 and December 28, 2024.
As of December 27, 2025
Less than 12 Consecutive Months
12 Consecutive Months or Longer
Total
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Fair Value
U.S. Treasury securities
Agency securities
Mortgage-backed securities
Corporate debt securities
Municipal securities
Other
Total
As of December 28, 2024
Less than 12 Consecutive Months
12 Consecutive Months or Longer
Total
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Fair Value
Gross Unrealized Losses
Fair Value
Agency securities
Mortgage-backed securities
Corporate debt securities
Municipal securities
Other
Total
As of December 27, 2025 and December 28, 2024 , the Company had no t recognized an allowance for credit losses on any securities in an unrealized loss position.
The Company has no t recorded an allowance for credit losses and charge to other income for the unrealized losses on U.S. Treasury, agency, mortgage-backed, corporate debt, municipal, and other securities presented above because the Company does not consider the declines in fair value to have resulted from credit losses. The Company has not observed a significant deterioration in credit quality of these securities, which are highly rated with moderate to low credit risk. Declines in value are largely attributable to current global economic conditions. The securities continue to make timely principal and interest payments, and the fair values are expected to recover as they approach maturity. Management does not intend to sell the securities, nor is it more likely than not that the Company will be required to sell the securities, before the respective recoveries of their amortized cost bases, which may be at maturity.
The amortized cost and fair value of marketable securities at December 27, 2025, by maturity, are shown below.
Amortized Cost
Fair Value
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Total
5. Income Taxes
As disclosed in Note 1 – Summary of Significant Accounting Policies, the Company adopted the requirements of ASU 2023-09 using a retrospective approach. Certain other disclosures have been recast to conform to the current period presentation, including references to Switzerland as Garmin Ltd.’s country of domicile.
The components of the Company’s income tax provision (benefit) were as follows:
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Switzerland federal:
Current
Deferred
Switzerland canton:
Current
Deferred
Foreign:
Current
Deferred
Total
The Company’s income tax provision (benefit) differs from the amount computed by applying the statutory federal income tax rate of Switzerland, Garmin Ltd. ’s country of domicile, to income before income taxes. The sources and tax effects of the differences, including the impact of establishing tax contingency accruals, are as follows (the table may not foot due to rounding):
Fiscal Year Ended
December 27, 2025
December 28, 2024
December 30, 2023
Amount
Percent
Amount
Percent
Amount
Percent
Federal income taxes at Switzerland statutory rate
Cantonal income taxes, net of income tax effect*
Foreign tax effects
United States
Statutory tax rate difference between the U.S. and Switzerland
State income taxes
Research and development tax credits
Foreign Derived Intangible Income deduction
Stock compensation
Other
Taiwan
Statutory tax rate difference between Taiwan and Switzerland
Withholding tax
Other
Luxembourg
Statutory tax rate difference between Luxembourg and Switzerland
Gain on sale of treasury shares
Other
Poland
Investment tax credits
Other
United Kingdom
Statutory tax rate difference between the United Kingdom and Switzerland
Other
Italy
Statutory tax rate difference between the Italy and Switzerland
Other
Other foreign jurisdictions
Nontaxable or nondeductible items
Deduction for taxes
Changes in unrecognized tax benefits
Other adjustments
Effective tax rate
* Local taxes in the canton of Schaffhausen make up the majority (greater than 50%) of the tax effect in this category.
The Company recorded income tax expense of $ 350,648 in the year ended December 27, 2025 , representing an effective tax rate of approximately 17.4 %. The Company recorded income tax expense of $ 283,965 in the year ended December 28, 2024 , representing an effective tax rate of approximately 16.7 %. The Company recorded income tax benefit of $ 89,280 in the year ended December 30, 2023, representing an effective tax rate of approximately ( 7.4 )%, which included income tax benefit of $ 181,410 recognized by the Company in the fourth quarter of 2023 related to the revaluation of Switzerland deferred tax assets due to an increase in the Schaffhausen cantonal tax rate and income tax benefit of $ 12,116 recognized in the fourth quarter of 2023 related to auto OEM manufacturing tax incentives in Poland.
The Company’s income before income taxes attributable to Switzerland operations was $ 1,401,142 , $ 1,263,683 , and $ 1,143,696 , for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. The Company’s income before income taxes attributable to non-Switzerland operations was $ 613,393 , $ 431,718 , and $ 56,660 , for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
December 27, 2025
December 28, 2024
Deferred tax assets:
Capitalized research & development expenses
Intangible assets
Tax credit carryforwards
Operating leases
Tax basis in excess of book basis for investments
Deferred revenue
Net operating losses
Accrued paid time off
Product warranty accruals
Stock compensation
Other
Valuation allowance related to loss carryforward and tax credits
Deferred tax liabilities:
Withholding tax
Property and equipment
Operating leases
Book basis in excess of tax basis for acquired entities
Prepaid and perpetual license assets
Book basis in excess of tax basis for investments
Other
Net deferred tax assets
At December 27, 2025 , the Company had $ 31,694 of tax credit carryover compared to $ 29,162 at December 28, 2024. At December 27, 2025 , the Company had a deferred tax asset of $ 29,979 related to the future tax benefit of net operating loss (NOL) carryforwards of $ 109,662 . Included in the NOL carryforwards is $ 8,320 that relates to various jurisdictions and expires in periods ranging from 2026 through 2039 and $ 101,342 that relates to various other jurisdictions and has no expiration date. The Company has recorded a valuation allowance for a portion of its deferred tax asset relating to various tax attributes that management does not believe are more likely than not to be realized. In the future, if the Company determines, based on existence of sufficient evidence, that it should realize more or less of its deferred tax assets, an adjustment to the valuation allowance will be made in the period such a determination is made.
The total amount of gross unrecognized tax benefits as of December 27, 2025 was $ 2,621 . A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for years ended December 27, 2025, December 28, 2024, and December 30, 2023 is as follows:
December 27, 2025
December 28, 2024
December 30, 2023
Balance at beginning of year
Additions based on tax positions related to prior years
Reductions based on tax positions related to prior years
Additions based on tax positions related to current period
Reductions related to settlements with tax authorities
Expiration of statute of limitations
Balance at end of year
Unrecognized tax benefits are classified as noncurrent liabilities, except for the portion that is expected to be paid within one year of the balance sheet date. The balances of net unrecognized benefits of $ 2,289 , $ 4,957 , and $ 12,824 were classified as noncurrent at December 27, 2025, December 28, 2024, and December 30, 2023, respectively. The net unrecognized tax benefits, if recognized, would reduce the effective tax rate. None of the unrecognized tax benefits are due to uncertainty in the timing of deductibility.
Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. At December 27, 2025, December 28, 2024, and December 30, 2023 , the Company had accrued approximately $ 767 , $ 1,242 , and $ 2,127 , respectively, for interest. The interest component of the reserve decreased income tax expense for the years ending December 27, 2025, December 28, 2024, and December 30, 2023 by $ 475 , $ 885 , and $ 624 , respectively. The Company did no t have significant amounts accrued for penalties for the years ending December 27, 2025, December 28, 2024, and December 30, 2023.
The Company files income tax returns in Switzerland, Taiwan, United Kingdom, U.S. federal jurisdiction, as well as various states, local, and other foreign jurisdictions. In its major tax jurisdictions, Switzerland, Taiwan, United Kingdom, and U.S. federal and various states, the Company is no longer subject to income tax examinations by tax authorities, with few exceptions, for years prior to 2020, 2020, 2023, and 2022, respectively.
The Company recognized reductions of income tax expense, inclusive of interest and net of deferrals, of $ 3,395 , $ 2,686 , and $ 11,473 in fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively, to reflect the expiration of statutes of limitations and releases due to audit settlement in various jurisdictions.
The following table provides the amount of income taxes paid (net of refunds received), disaggregated by Switzerland federal, Switzerland cantonal and foreign taxes paid, for each annual reporting period.
Fiscal Year Ended
December 27, 2025
December 28, 2024
Switzerland federal
Switzerland cantonal
Foreign
United States
Taiwan
United Kingdom
Other
Total Foreign
Total
6. Leases
The following table represents lease costs recognized in the Company’s consolidated statements of income for the 52-weeks ended December 27, 2025 . Lease costs are included in selling, general and administrative expense and research and development expense on the Company’s consolidated statements of income.
Fiscal Year Ended
December 27, 2025
December 28, 2024
Operating lease cost (1)
(1) Operating lease cost includes short-term lease costs and variable lease costs, which were not material in the periods presented.
The following table represents the components of leases that are recognized on the Company’s consolidated balance sheets as of December 27, 2025 and December 28, 2024.
December 27, 2025
December 28, 2024
Operating lease right-of-use assets
Other accrued expenses
Noncurrent operating lease liabilities
Total lease liabilities
Weighted average remaining lease term
6.7 years
7.3 years
Weighted average discount rate
The following table presents maturities of the Company ’s lease liabilities as of December 27, 2025.
Year
Amount
Thereafter
Total
Less: imputed interest
Present value of lease liabilities
The following table presents supplemental cash flow and noncash information related to leases.
Fiscal Year Ended
December 27, 2025
December 28, 2024
Cash paid for amounts included in the measurement of operating lease liabilities (1)
Right-of-use assets obtained in exchange for new operating lease liabilities
(1) Included in net cash provided by operating activities in the accompanying consolidated statements of cash flows.
7. Commitments and Contingencies
Commitments
The Company is party to certain commitments that require the future purchase of goods or services (“unconditional purchase obligations”). The Company’s unconditional purchase obligations primarily consist of payments for inventory, capital expenditures, and other indirect purchases in connection with conducting its business. The aggregate amount of purchase orders and other commitments open as of December 27, 2025 that may represent noncancellable unconditional purchase obligations having a remaining term in excess of one year was approximately $ 411,000 .
Certain cash balances are held as collateral in relation to bank guarantees. This restricted cash is reported within other noncurrent assets on the Company’ s consolidated balance sheets and totaled $ 714 and $ 685 on December 27, 2025 and December 28, 2024, respectively.
Contingencies
Management of the Company currently does not believe it is reasonably possible that the Company may have incurred a material loss, or a material loss in excess of recorded accruals, with respect to loss contingencies in the aggregate, for the fiscal year ended December 27, 2025. The results of legal proceedings, investigations and claims, however, cannot be predicted with certainty. An adverse resolution of one or more of such matters in excess of management’s expectations could have a material adverse effect in the particular quarter or fiscal year in which a loss is recorded, but based on information currently known, the Company does not believe it is likely that losses from such matters would have a material adverse effect on the Company’s business or its consolidated financial position, results of operations or cash flows.
The Company settled or resolved certain legal matters during the fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023 that did not individually or in the aggregate have a material impact on the Company’s business or its consolidated financial position, results of operations or cash flows.
8. Stockholders' Equity
Dividends
Under Swiss corporate law, dividends must be approved by shareholders at the annual general meeting of the Company’s shareholders. Approved dividends are payable in four equal installments on dates determined by the Board of Directors. A reduction of retained earnings and a corresponding liability are recorded at the time of shareholders' approval and are periodically adjusted based on the number of applicable shares outstanding.
The Company’ s shareholders approved the following dividends:
Approval Date
Dividend Payment Date
Record Date
Dividend Per Share
Payment Amount
Fiscal 2025
June 6, 2025
June 27, 2025
June 16, 2025
June 6, 2025
September 26, 2025
September 12, 2025
June 6, 2025
December 26, 2025
December 12, 2025
June 6, 2025
March 27, 2026
March 13, 2026
Total
Fiscal 2024
June 7, 2024
June 28, 2024
June 17, 2024
June 7, 2024
September 27, 2024
September 13, 2024
June 7, 2024
December 27, 2024
December 13, 2024
June 7, 2024
March 28, 2025
March 14, 2025
Total
Fiscal 2023
June 9, 2023
June 30, 2023
June 20, 2023
June 9, 2023
September 29, 2023
September 15, 2023
June 9, 2023
December 29, 2023
December 15, 2023
June 9, 2023
March 29, 2024
March 15, 2024
Total
The estimated payment amount for the dividend scheduled to be paid on March 27, 2026 was included in dividend payable on the Company’s consolidated balance sheets as of December 27, 2025.
Approximately $ 94,981 and $ 61,129 of retained earnings was indefinitely restricted from distribution to shareholders pursuant to the laws of Taiwan as of December 27, 2025 and December 28, 2024, respectively.
Share Repurchase Program
On April 22, 2022, the Board of Directors approved a share repurchase program (the “2022 Program”) authorizing the Company to repurchase up to $ 300,000 of the common shares of Garmin Ltd., exclusive of the cost of any associated excise tax. As of December 30, 2023, the Company had repurchased 3,176,453 shares for $ 300,000 , leaving $ 0 available to repurchase additional shares under the 2022 Program when the share repurchase authorization expired on December 29, 2023 .
On February 16, 2024, the Board of Directors approved a share repurchase program (the “2024 Program”) authorizing the Company to repurchase up to $ 300,000 of the common shares of Garmin Ltd., exclusive of the cost of any associated excise tax. The timing and volume of share repurchases are subject to market conditions, business conditions and applicable laws, and are at management’s discretion. Share repurchases may be made from time to time in the open market or in privately negotiated transactions, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The 2024 Program does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time. As of December 27, 2025 , the Company had repurchased 1,228,591 shares for $ 244,302 leaving $ 55,698 available to repurchase additional shares under the 2024 Program. Cash paid for purchases of the Company’s shares during fiscal 2025 was $ 181,011 . As announced in February 2026, t he 2024 Program, which had an initial expiration date of December 26, 2026 , is scheduled to be earlier terminated on February 19, 2026 and replaced with a new share repurchase program effective beginning on February 20, 2026 (the “2026 Program”). The 2026 Program is scheduled to expire on December 30, 2028 and authorizes the Company to purchase up to $ 500 million of its common shares.
Share Capital
In the second quarter of 2023, the share capital currency of the Company was changed from the Swiss Franc (CHF) to the U.S. Dollar (USD), as approved by shareholders at the Company’s 2023 Annual General Meeting. This aligns the share capital currency with the financial statement presentation currency of the Company. The Company’s nominal par value per share of CHF 0.10 was slightly reduced to USD $ 0.10 , the impact of which is reflected in share capital, captioned as common shares in the accompanying consolidated balance sheets. Total stockholders’ equity reported for the Company was not affected by this change.
Treasury Shares
In March 2024, the Board of Directors approved the cancellation of 979,463 shares previously purchased under a share repurchase program. The capital reduction by cancellation of these shares became effective in March 2024. Total stockholders’ equity reported for the Company was not affected.
9. Accumulated Other Comprehensive Income (Loss)
The following table presents changes in accumulated other comprehensive income (loss) balances by component for the year ended December 27, 2025:
Foreign currency
translation adjustment
Net gains (losses) on available-for-sale securities
Total
Balance - beginning of period
Other comprehensive income (loss) before reclassification, net of income tax expense of $ 10,536
Amounts reclassified from accumulated other comprehensive income (loss) to other income (expense), net of income tax benefit of $ 149 included in income tax provision
Net current-period other comprehensive income (loss)
Balance - end of period
10. Employee Stock Compensation and Savings Plans
Stock Compensation
The various Company stock compensation plans are summarized below. For all stock compensation plans, the Company’s policy is to issue treasury shares for option/stock appreciation right (SAR) exercises, restricted stock unit (RSU) releases, and employee stock purchase plan (ESPP) purchases.
2011 Non-employee Directors’ Equity Incentive Plan
In June 2011, the Company’s shareholders adopted an equity incentive plan for non-employee directors (the “2011 Directors Plan”) providing for grants of stock options, SARs, RSUs and/or performance shares, pursuant to which up to 122,592 shares were made available for issuance. In June 2023, the shareholders approved an increase to the number of shares authorized to 150,000 . The term of each award cannot exceed ten years . Awards are subject to a minimum one-year vesting period. In 2025, 2024, and 2023 , there were 3,432 , 4,360 , and 6,004 RSUs granted under this plan, respectiv ely. At December 27, 2025, approximately 25,608 shares were available for future issuance under the 2011 Directors Plan.
2005 Equity Incentive Plan
In June 2005, the Company’ s shareholders adopted an equity incentive plan (the “2005 Plan”) providing for grants of incentive and nonqualified stock options, SARs, RSUs and/or performance shares to employees of the Company and its subsidiaries, pursuant to which up to 10,000,000 common shares were made available for issuance. In 2013 and 2024, the shareholders approved increases of an additional 3,000,000 and 5,000,000 shares, respectively, to the 2005 Plan, increasing the total shares authorized under the plan to 18,000,000 . Option and SAR grants vest evenly over a period of five years or as otherwise determined by the Board of Directors or the Compensation Committee and generally expire ten years from the date of grant, if not exercised. RSUs vest evenly over a period of three years . In addition to time-based vesting requirements, the vesting of certain RSU grants is also contingent upon the Company’s achievement of certain financial performance goals. During 2025, 2024, and 2023 , there were 925,861 , 998,321 , and 1,047,934 RSUs granted under the 2005 Plan, respectively. No stock options or SARs were granted under the 2005 Plan in 2025, 2024, or 2023 . At December 27, 2025, approximately 4,361,120 shares were available for future issuance under the 2005 Plan.
Stock Compensation Activity
A summary of the Company’s stock compensation activity and related information under the 2011 Directors Plan, the 2005 Plan, and the 2000 Plan for the years ended December 27, 2025, December 28, 2024, and December 30, 2023 is provided below:
Restricted Stock Units
Weighted-Average
Grant Date Fair
Value
Number of Shares
(In Thousands)
Outstanding at December 31, 2022
Granted
Released/Vested
Cancelled
Outstanding at December 30, 2023
Granted
Released/Vested
Cancelled
Outstanding at December 28, 2024
Granted
Released/Vested
Cancelled
Outstanding at December 27, 2025
The weighted-average remaining contract life of restricted stock units at December 27, 2025 was 1.04 years. There were no outstanding options/SARs or any associated stock compensation activity during the years ended December 27, 2025, December 28, 2024, and December 30, 2023.
The total fair values of awards vested during 2025, 2024, and 2023 , were $ 112,424 , $ 92,502 , and $ 77,626 , respectively. The aggregate intrinsic value of RSUs outstanding at December 27, 2025 was $ 344,219 . The aggregate intrinsic values of RSUs released during 2025, 2024, and 2023 were $ 195,677 , $ 183,639 , and $ 96,301 , respectively. Aggregate intrinsic value of RSUs represents the applicable number of awards multiplied by the Company’s closing share price on the last trading day of the relevant fiscal period. The Company’s closing share price was $ 205.51 on December 27, 2025 (based on the closing share price on December 26, 2025). As of December 27, 2025 , there was $ 180,758 of total unrecognized compensation cost related to unvested share-based payment awards granted to employees under the stock compensation plans. That cost is expected to be recognized over the remaining vesting period.
Employee Stock Purchase Plan
The Company’s shareholders have adopted an employee stock purchase plan (the “ESPP”). Up to 10,000,000 common shares have been reserved for issuance under the ESPP. Shares are offered to employees at a price equal to the lesser of 85 % of the fair market value of the Company ’ s shares on the date of purchase or 85 % of the fair market value on the first day of the ESPP period. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2025, 2024, and 2023 , there were 333,443 , 410,999 , and 524,774 shares purchased under the plan for a total purchase price of $ 57,785 , $ 49,617 , and $ 43,905 , respectively. During 2025, 2024, and 2023, the purchases were issued from treasury shares. At December 27, 2025 , approximately 1,518,104 shares were available for future issuance under the ESPP.
Savings Plans
Certain subsidiaries of the Company sponsor various savings plans such as defined contribution employee retirement plans. Garmin International and the Company’s other U.S.-based subsidiaries sponsor a retirement plan under which their employees may contribute up to 50 % of their annual compensation subject to Internal Revenue Code maximum limitations and to which the subsidiaries contribute a specified percentage of each participant’s annual compensation up to certain limits as defined in the retirement plan. During the years ended December 27, 2025, December 28, 2024, and December 30, 2023 , expense related to this and other defined contribution plans of $ 104,755 , $ 93,687 , and $ 84,609 , respectively, was recorded within the Company’s consolidated statements of income.
Certain of the Company’s non-U.S. subsidiaries sponsor or participate in local defined benefit pension plans. The obligations, contributions, and associated expense of such plans for the years ended December 27, 2025, December 28, 2024, and December 30, 2023 were not material.
11. Segment Information and Geographic Data
Garmin is organized in the five operating segments of fitness, outdoor, aviation, marine, and auto OEM, which represent the primary markets served by the Company. These operating segments are also the Company ’s reportable segments.
The Company’s Chief Executive Officer, who has been identified as the Chief Operating Decision Maker (CODM), uses operating income (loss) as the primary measure of profit or loss to assess segment performance. Operating income (loss) represents net sales less costs of goods sold and operating expenses. Net sales are directly attributed to each segment. Most costs of goods sold and the majority of operating expenses are also directly attributed to each segment, while certain other costs of goods sold and operating expenses are allocated to the segments in a reasonable manner considering the specific facts and circumstances of the expenses being allocated. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. There are no inter-segment sales or transfers.
The Company’s segments share many common resources, infrastructures and assets in the normal course of business, and certain assets are therefore not separately tracked by segment. Thus, the Company does not report accounts receivable, inventories, property and equipment, intangible assets, capital expenditures, depreciation expense, or amortization expense by segment to the CODM.
The CODM utilizes operating income (loss) to assess segment performance and make decisions about the allocation of operating and capital resources by analyzing future opportunities and recent operating income (loss) results, trends, and variances of each segment in relation to forecasts and historical performance.
Net sales, cost of goods sold, gross profit, significant segment expenses, and operating income (loss) for each of the Company’s five reportable segments are presented below.
Fitness
Outdoor
Aviation
Marine
Auto OEM
Total
52-Weeks Ended December 27, 2025
Net sales
Cost of goods sold
Gross profit
Research and development expense
Selling, general and administrative expenses
Operating income (loss)
52-Weeks Ended December 28, 2024
Net sales
Cost of goods sold
Gross profit
Research and development expense
Selling, general and administrative expenses
Operating income (loss)
52-Weeks Ended December 30, 2023
Net sales
Cost of goods sold
Gross profit
Research and development expense
Selling, general and administrative expenses
Operating income (loss)
Net sales to external customers, property and equipment, and net assets by geographic area are as shown below for the fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023.
Americas
EMEA
APAC
Total
December 27, 2025
Net sales to external customers (1)
Property and equipment, net
Net assets (2)
December 28, 2024
Net sales to external customers (1)
Property and equipment, net
Net assets (2)
December 30, 2023
Net sales to external customers (1)
Property and equipment, net
Net assets (2)
(1) The United States is the only country which constitutes greater than 10 % of net sales to external customers.
(2) Americas and APAC net assets are primarily held in the United States and Taiwan, respectively.
