Garmin Ltd.

Hello, everyone. Thank you for joining us and welcome to the Garmin Limited second 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 Teri Seck, Director of Investor Relations. Please go ahead.

Good morning. We would like to welcome you to Garmin Limited's second 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 slash investors. 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 Ltd. this morning are Clif Pemble, President and Chief Executive Officer, and Doug Boessen, Chief Financial Officer and Treasurer. At this time, I would like to turn the call over to Clif Pemble.

Thank you, Teri, and good morning, everyone. As announced earlier today, Garmin achieved another quarter of record-breaking financial results in a continuation of the positive trends we've been experiencing over the long term. Consolidated revenue increased 11% to $2.02 billion. We experienced robust expansion in consolidated gross and operating margins, the majority of which is attributable to favorable product mix. Margins also benefited from a $21 million tariff refund recognized in the second quarter. Even when excluding this benefit, our gross margin performance was impressive by any historical comparison, reflecting the strength of our product lines, our vertically integrated business model, and exceptional execution by our global team. Operating income increased 30% to $616 million. and Proforma EPS increased 29% to $2.81. Our first half performance exceeded expectations and gives us confidence to raise our full year 2026 guidance. We now expect 2026 revenue of approximately $8.05 billion and Proforma EPS of $10 per share. Services have been an area of strategic focus in recent years, with each business segment pursuing unique opportunities to grow service revenue over the long term. We recently announced the strategic acquisition of TrainingPeaks and Train Heroic, which are leading endurance and strength training platforms connecting coaches to athletes who wish to maximize the impact of their training effort. We are very excited to welcome the TrainingPeaks and Train Heroic teams to our fitness segment and look forward to all that we can accomplish together. 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 25% to $757 million, a new second quarter record Driven by growth across all product categories, led by continued strong demand for advanced wearables. Gross and operating margins expanded to 64% and 37%, respectively, resulting in operating income of $277 million. During the quarter, we launched the Forerunner 70, bringing comprehensive running features and a bright AMOLED display to our entry-level running lineup. and the 4Runner 170 with additional running and training features. We also released our annual global running and cycling data report that provides insights into the fitness activities of our customers and their athletic performance. More recently, we announced the Circus Smartband, a screenless wearable that offers rich wellness and fitness insights without requiring a subscription. which further expands the addressable market for our wellness devices. The fitness segment has achieved outstanding performance over the long term. We are very pleased with these results and continue to expect the fitness segment will be the strongest contributor to 2026 consolidated growth. Moving to outdoor revenue decreased 2% to $483 million, primarily due to consumer auto, and Adventure Watch product categories. Gross and operating margins expanded to 69% and 34% respectively, resulting in operating income of $164 million. The segment delivered improved profitability and operating income growth through favorable product mix and disciplined execution. We recently expanded our golf lineup with the launch of the approach Z10, A compact laser rangefinder that sends precise distances to compatible devices, bringing a high fidelity experience to game play. We also published our annual trends in golf data report, highlighting that participation in the sport is up and players are improving in nearly every shot category. Looking forward, we expect to achieve stronger revenue performance in the back half of 2026 due to the timing of product launches. resulting in improved full-year growth when compared to 2025. Looking next at aviation, revenue increased 8% to $269 million, reflecting growth in both OEM and aftermarket product categories. Gross and operating margins were 75% and 27%, respectively, resulting in operating income of $72 million. For the 11th consecutive year, we were named Best Supplier of the Year by Embraer, who recognized us for outstanding performance as a supplier of electrical and electronic systems for their Phenom business jets. This recognition validates the long-term investments we have made to create innovative products and build strong relationships with our customers. During the quarter, we launched the D2 Mach 2 Pro, Our first aviator smartwatch with in-reach technology. We recently announced Axis, an all-new family of highly integrated and scalable cockpit display solutions for a broad range of certified and experimental aircraft models. Axis combines navigation, communication, and audio functions into a single platform, reducing installation time, complexity, and cost while delivering a modern cockpit experience. Axis reflects decades of Garmin innovation and sets a new standard for integrated flight displays. We are very pleased with the performance of aviation during the first half of the year and expect to achieve continued growth throughout the remainder of the year. Turning to the marine segment, revenue increased 14% to $341 million, with growth across multiple product categories. Gross and operating margins expanded to 61% and 29%, respectively, resulting in operating income of $100 million. The primary driver of margin expansion was the tariff refund recognized during the quarter, although product margins improved even when excluding this benefit. During the quarter, we launched the Garmin signal VHF marine radio, which offers a color touch screen and new features to enhance communication on the water. We recently announced the next generation LiveScope 2 sonar system, which offers improved range and clarity over previous LiveScope systems. LiveScope 2 received the best electronics award at the recent ICAST trade show. validating our superior LiveScope technology and further separating us from others in the market. We are pleased with the performance of Marine during the first half of the year and believe we are on track to achieve full year growth that is consistent with that of the prior year. And moving finally to the auto OEM segment, revenue increased 1% to $172 million with growth primarily driven by domain controllers. Gross and operating margins were 22% and 2% respectively. The gross margin expansion was primarily due to year-to-date cost recoveries that were recognized as revenue during the quarter. Operating income was positive on a GAAP accounting basis at $3 million in the quarter, driven by improved gross profit and lower research and development expenses. While we're excited about the positive quarter, we are expecting revenue to decline and the return to an operating loss in the back half of 2026, leading up to the launch of our next major program with Mercedes-Benz in 2027. Wrapping up, I'm very proud of what our team has accomplished. We delivered strong growth, expanded profitability, invested in innovation, completed a strategic acquisition and introduced new products across nearly every segment of our business. As we look to the second half of 2026, our product portfolio is strong and we are confident in the opportunities that lie ahead. We believe our success is driven by our commitment to create products that are essential to our customers and supporting them with industry-leading quality, reliability, and innovation. That concludes my remarks. Next, Doug will walk you through additional details of our financial results. Doug?