Garmin (GRMN) Q2 FY26 earnings call: guidance and Q&A

Clarification on Circa's subscription requirements for advanced features and Garmin's willingness to expand into other wearable form factors.

Circa offers full features out of the box, with additional Connect features (AI, nutrition) available. Garmin continuously explores new product categories and expects future innovations, but did not comment on specific roadmap details.

“I won't comment specifically on our product road map, but as we've demonstrated over time, we -- we tend to move into categories and explore new things. And so our product road map is very rich, and I would expect that we'll see additional new product in the future, just like you've always seen from us.”

asked by Erik Woodring · answered by Clifton Pemble

Inquiring about the sustainability of margin expansion, especially with anticipated higher memory chip costs in H2, and other potential raw material pressures.

Management aims for continued margin performance, acknowledging higher memory costs as a headwind for H2, which is factored into guidance. They will apply the same playbook used for tariffs to mitigate these costs. Other component categories show less movement but are generally under pressure due to AI demand.

“I think we've benefited from having a strategic inventory of memory that we've been using throughout the year. So the higher costs that are in the market today have not yet impacted our financials. We do expect that to start to impact us in the back half, and we've included that in our guidance.”

asked by Joseph Nolan · answered by Clifton Pemble

Asking for details on the second half quarterly revenue cadence for Auto OEM and the timing of the upcoming Mercedes-Benz contract.

Auto OEM revenue is expected to decline in H2 2026 as BMW volumes peak, leading to an operating loss. The segment is preparing for a major program launch with Mercedes-Benz in early 2027, which is expected to return the segment to growth in 2027.

“So we do expect back half revenue to decline versus 2025 as we've reached the peak of our BMW volumes. And we are on track in preparing for the launch of the next program, a major program with Mercedes-Benz in early 2027 as those products start to come up with our production line.”

asked by Joseph Nolan · answered by Clifton Pemble

How these acquisitions fit into Garmin's long-term strategy, product portfolio, and potentially Connect+.

The acquisitions are seen as providing a '360-degree experience' for customers, integrating device data with training platforms for coaches to provide recommendations and modify user behaviors, enhancing the full training and improvement experience.

“The synergies we're thinking about in training peaks and train heroic really has to do with our product line and the ability to offer what I would call a 360-degree experience for our customers were using our devices.”

asked by Akansh Chohan · answered by Clifton Pemble

Inquiring about early feedback for the Circa Smartband and whether its 'sold out' status on the website is demand or supply-driven.

The Circa Smartband's reception was very strong, exceeding expectations, leading to high demand. The product is currently sold out with a 5 to 8 week wait time, indicating both strong demand and a need to catch up on supply.

“Well, I think it is demand and supply driven, but definitely ahead of anything that we had imagined. We had expected that we would receive a good reception to that product when we introduced it... But the actual result once we announced the product was very strong ahead of our expectations. So we will be chasing back orders for a while.”

asked by Noah Zatzkin · answered by Clifton Pemble

Update on the Thailand facility, including cost and capacity opportunities.

The Thailand facility is on track, with completion expected by year-end and utilization starting early 2027. The first phase is 400,000 sq ft, with potential to double Garmin's total capacity. The cost structure is comparable or slightly less than current global operations, driven by diversification and additional manufacturing options.

“So Thailand is on track, and we're in probably the most intense part of our capital expenditures to be able to build and equip that facility. We expect it to be finished towards the end of the year, and we'll start utilizing it in early 2027.”

asked by Noah Zatzkin · answered by Clifton Pemble

How the new Access displays compare to competing products in terms of cost and integration, and the reception received.

The reception to Access is very strong, as there is nothing else like it on the market. It is designed to lower installation costs, simplify processes for OEMs and homebuilders, and provide superior integration, effectively resetting the standard for integrated flight displays.

“The reception to access is very strong. There's really nothing else like it out on the market. And it has basically been designed to address the ability to lower installation costs to simplify for both OEMs and homebuilders and to provide a level of integration that they just didn't have access to before.”

asked by Ivan Feinseth · answered by Clifton Pemble

Discussion on demand across Aviation end markets, specifically business aviation, defense, and government platforms.

Business aviation remains strong with record backlogs, indicating continued customer demand. The aftermarket segment has also been resilient, with customers investing in used airplanes and adding equipment, despite some near-term challenges like fuel prices.

“I think business aviation continues to be strong. As you know, are sitting on pretty much record backlogs as they work through those. So there doesn't appear to be an excess capacity issue. Customers still want these vehicles and appreciate them for what they do.”

asked by Unknown Analyst · answered by Clifton Pemble