Garmin Ltd. (GRMN), the maker of navigation, fitness and aviation electronics, reported record third-quarter operating results and lifted its full-year 2026 outlook after a quarter in which profit growth outpaced sales.

Consolidated net sales were a record $1.99 billion in the 13 weeks ended September 26, 2026, up 12% from the year-ago quarter. Sequential revenue declined from $2.02 billion in the second quarter, while year-over-year growth accelerated to 12% from 11%.

Operating income reached a record $612 million, up 34% from a year earlier. GAAP diluted earnings were $2.80 a share, compared with $2.08 a year earlier; pro forma diluted EPS was $2.76, up 39%. Gross margin expanded to a record 63.3% and operating margin to 30.8%, from 59.1% and 25.8% a year earlier. The company said the 420-basis-point gross-margin lift came from favorable segment mix, lower product cost and about $33 million of refunds of previously paid tariffs.

President and Chief Executive Officer Cliff Pemble said the company achieved another quarter of record operating results driven by strength across markets and product categories, with meaningful contributions from recently launched products, and that results were further enhanced by strong operational execution. He said Garmin is raising its 2026 outlook based on results achieved so far and momentum as it enters the holiday selling season.

Fitness revenue was $694.3 million, up 16% year over year, led by wearables. The segment posted $231 million of operating income at 63% gross and 33% operating margins. Garmin launched the CIRQA Smart Band, a screenless wearable, and announced next-generation Edge cycling computers.

Outdoor revenue was $597.3 million, up 20%, primarily on adventure watches, with $233 million of operating income at 68% gross and 39% operating margins. The company launched the fēnix 9 and fēnix 9 Pro series and new Garmin Drive GPS navigators.

Aviation revenue was $252.7 million, up 5%, driven primarily by OEM product categories, with $66 million of operating income at 78% gross and 26% operating margins. Marine revenue was $309.9 million, up 16%, with broad-based growth led by sonar and $94 million of operating income at 64% gross and 30% operating margins.

Auto OEM revenue fell 20% year over year to $131.9 million, primarily due to domain controllers. Gross margin in that segment was 16% and it recorded an operating loss of $12 million.

Total operating expenses were $646 million, up 10% from a year earlier. Research and development rose 9% and selling, general and administrative expenses rose 10%, both primarily on personnel-related costs. The effective tax rate was 18.1%, down from 21.2% a year earlier, primarily from higher expected U.S. deductions under 2025 tax legislation that became effective in 2026.

Operating cash flow was $394 million and free cash flow $293 million. Garmin paid a quarterly dividend of $202 million, repurchased $41 million of shares, and ended the quarter with about $4.1 billion of cash and marketable securities.

Based on performance in the first three quarters of 2026 and a positive outlook for the remainder of the year, Garmin raised full-year 2026 guidance. It now anticipates revenue of approximately $8.15 billion and pro forma EPS of $10.80, assuming gross margin of 61.0%, operating margin of 29.0% and a full-year tax rate of 16.5%.