Garmin Ltd.

Thank you for standing by and welcome to the Garmin Limited first quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Finally, a reminder that this conference is being recorded. I would now like to turn the conference over to Terri Sack, Director of Investor Relations. Please go ahead.

Good morning. We would like to welcome you to Garmin Limited's first quarter 2024 earnings call. Please note that the earnings press release and related slides are available at Garmin's investor relations site on the internet at www.garmin.com. An archive of the webcast and related transcripts will also be available on our website. This earnings call includes projections and other forward-looking statements regarding Garmin Limited and its business. Any statements regarding our future financial position, revenues, segment growth rates, earnings, gross margins, operating margins, future dividends or share repurchases, market shares, product introduction, future demand for our products and plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K, filed with the Securities and Exchange Commission. Presenting on behalf of Garmin Limited this morning are Cliff Pimble, President and Chief Executive Officer, and Doug Besson, Chief Financial Officer and Treasurer. At this time, I would like to turn the call over to Cliff Pimble.

Thank you, Teri, and good morning, everyone. As announced earlier today, Garmin delivered outstanding results in the first quarter with strong growth in consolidated revenue and operating income. The positive trends we experienced at the close of 2023 strengthened in the first quarter of 2024. Consolidated revenue increased 20% to $1.38 billion, a new first quarter record with four segments delivering double digit growth. Growth and operating margins expanded year over year to 58.1% and 21.6% respectively, resulting in record first quarter operating income of $298 million, up 51% year over year. This resulted in pro forma EPS of $1.42, up 39% over the prior year, which is a remarkable result considering the significantly increased Swiss tax rates. We're off to a great start and we're very pleased with these results. At the same time, we are mindful that Q1 is typically the lowest seasonal quarter of our financial year, and with this in mind, we're not updating the guidance we previously issued in February. Doug will discuss financial results in greater detail in a few minutes, but first I'll provide a few remarks on the performance of each business segment. Starting with business, revenue increased 40% to $343 million. a new record driven by broad-based growth across all product categories led by strong demand for advanced wearables. Growth in operating margins improved to 57% and 20%, respectively, resulting in operating income of $68 million. During the quarter, we launched the Forerunner 165, which was instantly recognized by the market as a product offering both exceptional value and great performance. Also during the quarter, we published a new edition of the Garmin Health Research Glimpse, which focused on sleep research initiatives. The health metrics collected by Garmin wearables provide researchers with a wealth of information contributing to a deeper understanding of the intricate relationship between sleep and overall well-being. Moving to outdoor, revenue increased 11% to $366 million, with growth driven primarily by wearables. Growth in operating margins improved to 66% and 29%, respectively, resulting in operating income of $107 million. During the quarter, we released our annual inReach SOS Year in Review, highlighting the importance of Garmin Response which coordinates emergency response services in more than 200 countries and territories and supports rescue efforts in more than 210 languages. The Emergency Response Coordination Center is an important part of what differentiates our inReach SOS service from others. We also produced and released an original docuseries called Seven Days Out, which follows two people on their journey through Nepal's Langtang hiking circuit. This docuseries highlights the extraordinary utility of our Fenix 7 Pro adventure watches, as well as the rich health metrics and long battery life these devices offer. 7 Days Out shows that ordinary people can accomplish extraordinary things with the right tools to help them beat yesterday. Looking next at aviation, revenue increased 2% in the first quarter to $217 million, driven by growth in OEM product categories. Gross margin improved 75%, and operating margin was 24%, resulting in operating income of $52 million. During the quarter, we unveiled a complete avionics modernization program for the highly popular Citation CJ2 business jet that offers new technologies and features designed to reduce pilot workload and improve safety. Also during the quarter, we added display options for our GWX-8000 StormOptics weather radar, which expands the availability of this advanced radar system to aircraft equipped with our highly popular GTN and TXI displays. Turning to the marine segment, revenue increased 17% to $327 million, primarily driven by the acquisition of JL Audio. Excluding JL Audio, revenue increased approximately 3% in the first quarter. Gross and operating margins improved to 55% and 27%, respectively, resulting in operating income of $88 million. We were recently recognized as Supplier of the Year by Independent Boat Builders, Inc. In addition, Garmin-sponsored angler Justin Hemner was champion of the recent Bassmaster Classic fishing tournament on a boat exclusively equipped with our Ecomap Ultra 2 chartplotters, forced trolling motor, and LiveScope Plus sonar system. During the quarter, we launched the GPSMap 16 family chartplotters, adding larger touchscreen options for greater clarity, connectivity, and control at the helm. We also launched the Panoptix TS70, our first deepwater live sonar, which provides real-time underwater imaging at depths up to 1,000 feet. Moving finally to the Auto OEM segment, revenue increased 58% to $129 million, with growth primarily driven by increased shipments of domain controllers to BMW. Gross margin was 18%, and we recorded an operating loss of $16 million. During the quarter, we were awarded new business to design and manufacture digital instrument clusters for two-wheel vehicles, as well as full infotainment systems for an industrial truck maker. That concludes my remarks. Next, Doug will walk you through additional details on our financial results.