Garmin Ltd.

Hello, everyone. Thank you for joining us and welcome to the Garmin Limited first quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Terry Sec, Director of Investor Relations. Terry, please go ahead.

Good morning. We'd like to welcome you to Garmin Limited's first quarter 2026 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 transcript 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 purchases, market shares, product introductions, foreign currency, tariff impacts, 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 Pemble, 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 Pemble.

Thank you, Terry, and good morning, everyone. As announced earlier today, Garmin achieved remarkable financial results during the first quarter of 2026 in a continuation of the positive trends we've been experiencing over the long term. Consolidated revenue increased 14% to $1.75 billion, which is a new first quarter record. We achieved double digit growth rates in three segments, And we experienced strength in many product categories across the business, including wearables, which were a significant contributor to consolidated growth. Gross and operating margins expanded to 59.4% and 24.6% respectively, resulting in record first quarter operating income of $432 million, up 30% year over year, and pro forma EPS of $2.08, up 29% year over year. We're off to a great start in 2026, and we are very pleased with our results. As a reminder, the first quarter is typically the lowest seasonal quarter of our financial year. While the initial trends are encouraging, much of the year remains ahead. With this in mind and consistent with our typical practice, we are maintaining the guidance issued in February and we'll provide updates as the year unfolds. Doug will discuss our 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 fitness, revenue increased 42% to $547 million, which is a new first quarter record driven by broad-based growth across all product categories led by strong demand for advanced wearables. The primary driver of our performance is higher unit volumes, resulting in meaningful market share gains. Gross and operating margins were 62% and 29% respectively, resulting in operating income of $158 million. During the quarter, we launched the Varia RearView 820, our brightest and most powerful radar taillight for cyclists. We expanded on-device messaging for select wearables with a new Connect IQ app that allows customers to read, reply, and react to WhatsApp messages right from their wrist. We also announced that select wearables can now integrate with the highly acclaimed Natural Cycles birth control and cycle tracking app, empowering women to better understand and manage their reproductive health. The fitness segment has achieved outstanding performance over the long term, and we are very pleased with these results. As mentioned in February, we expect that the fitness segment will be the strongest contributor to 2026 consolidated growth. Moving to outdoor, revenue decreased 5% to $418 million as we compared against a strong prior year quarter, which included the launch of the Instinct 3 smartwatch family. Phoenix smartwatches performed well during the quarter, even considering the strong comparable from the prior year. Gross and operating margins were 67% and 28% respectively, resulting in operating income of $119 million. During the quarter, we released the Approach G82 handheld GPS with a built-in launch monitor and the Approach J1, our first GPS watch specifically designed for junior golfers. The Approach J1 was created by Garmin Associates, who, through their own experiences, recognized that aspiring junior golfers also want tools designed specifically for them to learn the game and improve performance. I'm proud of the way that our teams lean on their own experiences to bring unique, highly differentiated products to market. Also during the quarter, we launched the Zumo XT3, our newest and most advanced motorcycle-focused GPS device, and the Catalyst 2, a compact device for motorsports that helps high-performance drivers achieve faster times on the track. Looking forward, we expect second quarter outdoor performance to be similar to that of Q1. We also expect to achieve stronger performance in the back half of the year due to the timing of product launches, resulting in improved full-year growth when compared to 2025. Looking next at aviation, revenue increased 18% to $264 million with growth contributions from both OEM and aftermarket product categories. Gross and operating margins were 75% and 27%, respectively, resulting in operating income of $71 million. During the quarter, Daher unveiled their new TBM-980 single-engine turboprop aircraft, featuring our G3000 Prime avionics suite. Also, the HondaJet Elite II was certified by the FAA, becoming the first twin-turbine business jet with Garmin Emergency Autoland technology. We are very pleased with the performance of aviation during the first quarter, and we expect to achieve solid growth throughout the remainder of the year. Turning to the marine segment, revenue increased 11% to $355 million with broad-based growth across multiple product categories. Gross and operating margins were 56% and 26% respectively, resulting in operating income of $91 million. The year-over-year margin compression was primarily due to higher tariff costs. During the quarter, we launched a new 360-degree scanning sonar with SpyPol. allowing anglers to see a bird's eye view of fish and underwater structure in every direction. Also during the quarter, we launched the QUADX 8 Pro, our purpose-built nautical smartwatch with in-reach technology for two-way satellite and cellular connectivity. Our marine segment is off to a very good start, and we believe we are on track to achieve growth consistent with the prior year. And moving finally to the auto OEM segment revenue increased 1% to $170 million with growth primarily driven by infotainment programs. The segment operating loss narrowed to $6 million due to gross profit improvement and lower R&D expenses. We continue to achieve important milestones leading up to the launch of our next large scale program with Mercedes-Benz. which we anticipate will drive significant growth starting in 2027 and beyond. As a reminder, we expect AutoEM revenue to decrease in 2026 as the BMW program has reached peak volumes and as certain legacy programs approach end of life. We also expect the operating loss to narrow compared to 2025, although we are not expecting the segment to be profitable on a gap basis for the full year. Wrapping up, we continue to outperform expectations in a business environment characterized by economic whiplash and geopolitical uncertainty. Even in these challenging circumstances, we believe that great products and customer service always win. As strong as our product line currently is, we are planning to launch even more new products throughout the year, including some that represent new categories for garments. That concludes my remarks. Next, Doug will walk you through additional details on our financial results.

Doug? Thanks, Cliff. Good morning, everyone. I begin by reviewing our first quarter financial results, provide comments on the balance sheet, cash flow statement, and taxes. Postal revenue $1,753,000,000 for the first quarter, presenting a 14% increase year-over-year. Gross margin was 59.4%, 180 basis point increase in the prior quarter. Increase was primarily due to favorable foreign currency impacts. Also, for your reference, do not record any benefit or receivable related to any potential refund or previously paid tariffs. Operating expense, the percentage of sales, 34.8%, 110 basis point decrease. Operating income was $432 million, a 30% increase. Operating margin was 24.6%, 290 basis point increase with a prior year quarter. Our gap EPS was $2.09. Our performer EPS was $2.08. Next, look at first quarter revenue by segment and geography. During the first quarter, we achieved double-digit growth in three of our five segments, led by the fitness segment with 42% growth, followed by the aviation segment with 18% growth, and the marine segment with 11% growth. By geography, we achieved growth in all three regions, led by 25% growth in APAC, followed by 15% growth in EMEA, and 10% growth in Americas. EMEA and APAC regions benefited from favorable foreign currency impacts. Looking next at operating expenses. First quarter operating expense increased by $59 million or 11%. Research and development increased approximately $28 million. SG&A increased approximately $31 million compared to the prior year quarter. Both increases were primarily due to personnel related expenses. A few highlights on the balance sheet, cash flow statement and taxes. We ended the quarter with cash, marketable securities at approximately $4.3 billion. Cash receivable increased year-over-year due to strong sales, but decreased sequentially to $941 million, following a seasonally strong fourth quarter. Inventory increased year-over-year and sequentially to approximately $1.9 billion. During the first quarter, 2026, we generated free cash flow of $469 million, a $9 million increase from prior year quarter. Capital expenditures for the first quarter of 2026 were $67 million, approximately $27 million higher than the prior year quarter. During the first quarter of 2026, we paid dividends of approximately $174 million, purchased $40 million of company stock. At quarter end, we had approximately $491 million remaining share purchase program, which is authorized through December, 2028. Put an effective tax rate of 14.3%, which is comparable to 14.5% the prior quarter. Concludes our phone remarks. Ben, could you please open the line for Q&A?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joseph Cardoso with JP Morgan. Joseph, your line is open. Please go ahead.

Hey, thank you. Good morning here. Maybe for my first question, can we just double click on the performance, the strong performance in the quarter, both from a revenue and gross margin perspective? You know, Cliff, it sounds like you're cautiously optimistic about the year, despite kind of sticking to the typical full year guidance practice here. So maybe can you just touch on what is reinforcing that view? For example, how did demand momentum trend through the quarter and into 2Q today? And then as you think about kind of the component cost and availability trends that, you know, we talked about last quarter, you know, how did that trend through the quarter and any change in view relative to your ability to navigate those dynamics versus 90 days ago? And then I have a follow-up.

Yeah, good morning, Joe. I think, you know, as I mentioned, we're very pleased with the initial results. Q1 does tend to be our lowest quarter, so we – We take it as a data point, but we definitely need to see more of the year unfold before we can really, really start to tweak what our 2026 results expectation will be. In terms of demand trends, they're consistent, continue to be very strong, like we saw in the prior year. Registration rates are continuing to be strong. We have not seen any impact from some of the recent developments in the Middle East and some of the conflict there when it comes to registration rates. In fact, some of them are the strongest that we've been experiencing in the near term. So no worries there for the near term. Component costs wise, I would say that right now we are not experiencing that in our current results. But keep in mind that component costs come through our inventory on the balance sheet. So consequently, as costs change, we'll see some of those go up as the year unfolds. We do have significant safety stock. of some components that are under pricing pressure. So I would expect that 2026 is still going to be somewhat muted and we'll start to see some effect in 2027. Got it.

Great color there, Cliff. And then maybe for my second one, and this is perhaps a bigger picture question, over the last six months or so, we've seen a couple of private wearable companies complete successful funding rounds, you know, disclose healthy revenue trends. And I think both are pursuing a somewhat different approach, both in terms of form factors and perhaps a more aggressive push into subscriptions or hardware as a service models relative to incumbents like yourself. So just given that, you know, maybe just curious to hear your thoughts on how you're assessing the competitive implications, just given that different approach being taken by these challengers. And maybe alternatively, do you see this as more of a market expanding dynamic potentially that could open the door for you to evolve how your own monetization approach is taken over time? Thank you.

Yeah, I would say that if there's anything that we've learned over the years is that customers want choices when it comes to devices, especially those that they wear. So that's what we're seeing, I think, in the market today is an expansion of options for people. And for us, again, we don't rule anything out. We're open to all kinds of devices and form factors in how we deploy our wearable sensor technology. So I would say that, again, we see this as expanded opportunity for everyone. And I would point out that that our results also reflect the general increase in the market and awareness and use of wearable devices for both fitness activity as well as wellness monitoring. In terms of subscription-based models, I would remind everyone that we have been expanding our role in subscription-based services for our products and the services that we offer for those with Garmin Connect Plus, as well as other services that we have in segments across the business. And so it's an area of enhanced focus for us as well.

Thank you. Appreciate the thoughts, Cliff. Thank you.

Your next question comes from the line of Tim Long with Barclays. Tim, your line is open. Please go ahead.

Hi, this is Alyssa Schries on for Tim Long. Just two quick questions. It sounded like you said strong demand for advanced wearables in the quarter. What are you seeing in the lower tier of the portfolio? Is there anything kind of, are you seeing a dispersion in customer trends between the two? And then I have a follow-up.

Yeah, so when we talk about advanced wearables, we're really talking about those wearables that have GPS and the ability to download applications and that kind of thing. And really, across our wearable price bands, all of those products pretty much qualify in that category. It's really the very basic products. you know, kind of wearable bands like our Bevo Smart line that aren't considered advanced wearables, but those are a small part of our portfolio. So within advanced wearables, we have many different price tiers from entry level on through to premium, and we're definitely seeing strong demand both at the low end and the high end of those ranges.

That's helpful. And then just a quick question on the geos. I know the commentary on the call about the FX with EMEA and APAC, but in the Americas business, is there anything to call out in the geo, anything you're seeing there in customer trends?

No, I don't think there's anything particular at this point to call out. You know, there are a lot of dynamics in the geographies right now on the geopolitical spectrum, and so time will tell, but initial indications are that some of the initial trends kind of bumps that occur whenever there's a big change like that have evened out and people are starting to get back to kind of normal patterns. So right now I would say we're encouraged by what we see, but again, it's a very dynamic environment.

Great. Thank you so much.

Your next question comes from the line of David McGregor with Longbow Research. David, your line is open. Please go ahead.

Good morning, everyone. I wanted to ask about the new product introduction because it seems as though there was maybe a stronger than normal new product quarter. I'm wondering if that's true. And if so, can you just talk about the impact on growth and margins from just strictly from new product launches?

I think we typically release somewhere around 100 new products a year, and we would expect that 2026 is in line with that, if not slightly stronger as we look at some new things. In terms of margin profiles, new products are the ones that come out and they're fresh designs, so they have all the latest components and design optimizations that we do, and they also If they have new features and capabilities and segmentation in the market, we can typically bring them out at appropriate prices for their particular competitive landscape. So they can be a margin enhancer, but in general, we rely on new products to really drive revenue growth within the company.

Right. And just to clarify on that, did we see maybe a slightly larger proportion of reported revenues being generated from new products versus what we might have otherwise seen in prior years?

No, I would say it's historically consistent with what we've seen. Again, we're very consistent with product introductions, which means that generally our revenue mix from new products tends to be pretty similar from year to year.

Okay, good. Thank you. Just as a follow-up, I wonder, you talked about the auto OEM business and the transition between the BMW and the Mercedes programs. Can you just help us think through kind of how you're thinking about the cadence of revenues in 2026 leading into the ramp of that Mercedes in early 2027?

As we mentioned in the remarks, we expect that 2026 would be a slightly down year compared to previous year. because of the ramp down of the BMW program, which is starting to its tail off cycle into phase out. And then 2027 should be a ramp up year for the Mercedes program.

You were flat in this quarter. Do you expect to be flat in 2Q and then see that revenue gap become more visible? Or do we see that begin in 2Q?

Yeah, I would say probably. Probably not able to share the specific dynamic of Q2 just yet, but again, for the whole year, we definitely expect the long-term forecasts that we're receiving would result in a slightly down year for auto EM in 2026. Right.

Okay. Okay. Thanks very much, Cliff, and congratulations on all the results.

Thank you. Your next question comes from the line of Ben Bolin with Cleveland Research. Ben, your line is open. Please go ahead. Thanks. Good morning, everyone.

I want to start. Can we discuss a little bit in aviation? Could you discuss what you're seeing with respect to demand around new deliveries versus, you know, the retrofit opportunities and any thoughts on uh, or volume with, with bonus depreciation and what that's doing to backlog. And then I have a follow-up.

I think, um, the new deliveries are definitely a strong contributor to the growth, um, stronger than the aftermarket side, although both contributed to the growth, uh, aviation, um, aircraft makers are sitting on, um, high backlogs still. And so consequently, you know, they're, they're, um, Their volumes and cadence tend to move slowly as they work through backlog, but their objective is not to clear out backlog. Their objective is to keep feeding backlog and to incrementally grow as well. So in general, we see it as a very healthy cadence in the OEM side of things and have not at this point heard of any indications that people are hesitating around the purchase from the aircraft.

Okay. The other, Cliff, you talked a little bit about thoughts on the commodity environment and how that looks this year and even into next. I guess bigger picture, how are you thinking about the overall balance sheet and working capital strategy with that backdrop? Has it changed? Any thoughts around working capital commits, more strategic procurement, anything along those lines that you guys are thinking about that you can share? Thanks.

Yeah. As it relates to our balance sheet and inventory, we look at inventory really as a business tool for us. Depending upon the situation, you know, we'll look at that to increase our safety stock for key components as such. And also, obviously, demand of our product we have to take into consideration. But, you know, it's really a key part, you know, of our overall operations is to make sure that we use that inventory appropriately to make sure we have product, you know, for when the customer needs it, as well as to manage our whole supply chain, including the commodities out there.

Thanks, Doug. Your next question comes from the line of Eric Woodring with Morgan Stanley. Eric, your line is open. Please go ahead.

Hey, guys. Thank you very much for taking my question, and good morning to you. Cliff, can we just get a very kind of high-level view from you on the state of the consumer, specifically the consumer that you guys kind of sell into? Just anything that is changing. I know you mentioned the Middle East conflict hasn't had any impact, but there's just a lot of kind of cross-sector um cross currents in the economy today so we just love your your updated view on the state of the on the uh on on the uh on the consumer and maybe if you could tie into that just given given your answer to that maybe is there a specific segment or market where you maybe feel incrementally better about the year more than 90 days ago versus anywhere you feel maybe incrementally more cautious just if you could maybe pair those together and then a quick follow-up please thank you

Yeah, I would say that, Eric, good morning. I would say that what we see of the consumer is pretty much the same as what we have seen over the past several quarters. You know, there is a lot of public talk about how consumers are stressed. And certainly, you know, we probably all have to believe that's true. At the same time, many of the banks and monitors of Personal credit usage and spending seem to be very positive. People seem to be shaking off whatever their concerns are that they're voicing. For the customer base that we serve, we tend to serve those that that place a high priority on their personal health and wellness, as well as products for active lifestyles and mobility. And so we believe we're serving a customer base in a market that's probably a little more resilient than what the average reporting out there is. In terms of segments where we feel better or worse, I would say we're optimistic about all of them. I would say that If there's any area of concern when it comes to oil prices and conflict is that it can tend to give some of those markets like marine and aviation a little more hesitancy as people think about fuel prices and and investments there. The one thing I would think is a positive, even in that backdrop, is that. The stock market and the financial markets have been very strong. And so that tends to offset any hesitation. So in general, it's a it's a mixed bag. But I would say, you know, the environment and the scenario is really very good considering everything that's going on.

Okay, that's super helpful. And then just as a quick follow-up, you know, Cliff, you kind of alluded to leveraging your balance sheet in this commodity environment. Is the message that you're sending, you know, we will see costs going up in the second half, and therefore there will be some margin pressure, all else equal, or... Given that you're alluding to costs going up, how will you kind of protect margins with higher input costs? I just want to make sure I kind of understand the message as we go into the second half in 2027. Thank you so much.

Yeah, as we mentioned, we do have a lot of safety stock around some components that we've accumulated. The impact on our financials due to higher input costs at this point, we feel are well controlled in 2026, and we've included those in our outlook for our guidance. You know, we're not at all starting to think about 2027 or issuing guidance from that, but definitely people should expect that the higher input costs that are rolling their way through our inventory would start to appear more in 2027. So that's what we're seeing. I think for our business, you know, definitely the bill of materials is, if you look at our margin structure, You know, we have ways that we can offset some increases here and there with efficiencies in other areas. So we're going to work hard to protect those margins. It's not our goal to go backwards. But again, we are facing some headwinds because of the component environment.

Okay. Understood. Thank you so much, guys. Best of luck.

Thank you.

Your next question comes from the line of Ivan Feinsiff with Tigris Financial Partners. Ivan, your line is open. Please go ahead.

Hi, good morning. Thank you for taking my questions, and congratulations on another great quarter and a great start to the year.

Thank you.

For the number of new watches that you're making that incorporate inReach and LTE functionality, what percentage of buyers are signing up for a subscription plan?

Yeah, we don't break it out, but the obvious point of those devices with the connectivity hardware is to use the services. And one of our key differentiators as a company is especially the in-reach service around messaging and SOS services. And so we feel like we have a strong differentiator there that gives a real wide garment for those product lines. And so I would expect to see more of those kinds of products coming to market in the future.

And then that including your family of apps, can you give like a big picture of how you see that growing your user base as they use like Messenger and Explore and those are integrated in more and more products?

We see people engaging with our apps across the broad spectrum. As you point out, you know, there's several different apps properties that we have that people rely on, such as Garmin Connect, of course, is kind of a baseline, but we also have the Golf app, we have Messenger, we have, you know, all kinds of apps across our business that interact with our devices. So we see strong engagement from our customers and good feedback from them.

And, you know, especially Messenger, as somebody gets a Garmin watch, they tend to connect with baby friends that weren't using it, but you see the overall growth of Messenger being used, that could be a big driver to more product adoption.

And we see Messenger pulling in not only the Garmin device user that manages the device, but also their friends, which allows them to communicate and, of course, gives us opportunity to expose more people to the Garmin brand.

Thanks. And then my second question is, how much more robust is the functionality that you provide onboard to Mercedes compared to what you're providing to BMW?

Well, I think you're probably thinking maybe of content or ASP, but I would definitely say that it's a more complex unit and higher ASPs than what we saw with BMW because of its level of integration. and also strong volume. So we expect to see, again, Mercedes to be a strong contributor to scale starting in 2027.

And thanks. Good luck for a big 26.

Thank you.

Your next call comes from the line of Jordan Lyonnais with Bank of America. Jordan, please go ahead.

Hey, good morning. Thank you for taking the question. Anna, aviation, could you give a sense of what the size is of the defense and government markets and if that contributed to the gains in the quarter?

Well, we tend to sell our products on a commercial off-the-shelf basis to opportunities within government and military. There's some light customizations that we do, but in general, we're selling products the same platforms that we sell across commercial as well. It's a smaller part of our overall business, but one that we view as a key opportunity.

Great, thank you.

Your next question comes from the line of Noah Zatskin with KeyBank Capital Markets. Noah, your line is open. Please go ahead.

Hi, thanks for taking my questions. I'm hoping to get your thoughts on some of the more recent changes in tariff policy and whether or not that's changed your view on the overall tariff impact this year versus last quarter. I think relatedly, maybe how are you thinking about the potential magnitude of refunds that you might be positioned to recoup over time? Thanks.

Yeah, regarding tariffs, yeah. First of all, regarding the gross margin, year over year, there was an unfavorable impact on tariffs this Q1 versus last year since the tariffs were not in effect at that period of time. As we think about the remainder of the year, we do expect there to be some tariff impact for the remainder of the year, basically at the current trends we're seeing. Obviously, that's evolving, but that's our current opinion. As it relates to the refunds, we have not recorded any receivable or benefit for those refunds at this point in time. We'll continue to evaluate that and record it at the appropriate time. Number five, more details when we do record that receivable and benefit.

Great, thanks. And then maybe just one on marine, another strong quarter there. What are you guys seeing in terms of the underlying trends in the marine end market And maybe just any color around what you think is helping to drive what I assume to be share gains there. That would be great. Thanks.

Yeah, I think for Marine, for us, we saw particular strength on deliveries to boat builders. So they definitely helped contribute to the growth that we had in the quarter, although the retail and the aftermarket was also a contributor. I think in general, we're starting to hear some of those customers start to express some worry given the current geopolitical situation. But I think a lot of times that worry takes some time to filter through the market. So we're taking a wait-and-see approach on that. But in general, I would say that the overall market has been very strong, and we've had a very, very positive reaction to our new products, particularly the SpyPol and the 360 Sonar. Thank you.

Your next question comes from the line of David McGregor with Longbow Research. David, your line is open. Please go ahead.

Yeah, thanks for taking the follow-ups. Just a couple of cleanups. I guess on operating expenses, dollar expenses are up, but you're leveraging those increases very well. How should we think about the pace of incremental operating expense investment in 26 and 27, and also your ability to continue leveraging those investments at the operating line?

Yeah, regarding operating expenses, you know, on a consolidated basis for the full year, you know, a percentage of sales, we expect operating expenses to be relatively consistent year over year. So a few things impacting our operating expenses. Obviously, the biggest driver there is personnel related expenses, you know, really the headcount compensation as such, you know, primarily in the R&D side of things just to fuel our innovation. But a couple of things also in the quarter, one of which was foreign currency impacted our top line. They increased that, but also did increase, you know, some of our expenses there, too. Then also, we did have an acquisition of my laps, you know, that anniversary this year. Also, from that standpoint in their annualized. So those are some factors in there. But we expect, you know, relatively consistent kind of pace in our operating expenses there.

flat year over year, I guess is the going. Yeah, it's a consistent growth.

Yeah, consistent growth.

Yeah. Right. Thanks for that. And then secondly, just on distribution, are you seeing any meaningful change this quarter in the route to market? Any growth in the distribution network to call out how that may have influenced reported margins?

I would say nothing specific to call out. We have very broad-based distribution across all kinds of retailers and distributors. And so I think the diversity of our go-to-market channels is probably richer for Garmin than any other company out there because of the broad base of markets we serve as well as the broad product categories that we have within each market.

Got it. Thanks very much for the follow-up.

Thank you. There are no further questions at this time. I will now turn the call back to Terry Sack for closing remarks. Terry, please go ahead.

Thank you all for joining us today. Doug and I are available for callbacks, and we hope you all have a great day. Bye.

This concludes today's call. Thank you for attending. You may now disconnect.