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| Statement |
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| For the full-year 2023, we achieved 8% consolidated growth with record revenue in three of our five segments |
| This accomplishment is the direct result of the strong commitment and hard work of our aviation team and the investments we have made in this business |
| As announced earlier today, Garmin delivered outstanding results in the fourth quarter with strong growth in consolidated revenue and profit |
| Consolidated revenue increased 13% to nearly $1.5 billion, representing a new fourth quarter record with three business segments delivering double-digit growth |
| Gross and operating margins expanded year-over-year to 58% and 23%, respectively, resulting in operating income of $340 million, up 27% for the year |
| It's a really strong entry-level watch with a bright OLED display |
| We entered 2023 cautiously optimistic, but as the year continued, we experienced better than expected momentum in multiple segments, which resulted in a record breaking year |
| During the fourth quarter, we achieved record consolidated revenue and double-digit growth in three of our five segments |
| But in general, I would say that our products are doing well because they're strong on a broad basis across all kinds of features and the ability to monitor both health and wellness functions as well as strong activity performance as well |
| So we're thrilled with that, and we expect in 2024 that we'll continue to perform ahead of the market |
| These factors, combined with healthy demand for our products, reduced inventory levels and boosted free cash flow to nearly $1.2 billion |
| And we see new opportunities like auto OEM as a way to leverage the strength we have in vertical integration, our smart factories, our supply chain capability and our ability to serve customers, which has been very attractive |
| Our sell-through appeared to be very, very good and of course, drove incremental production that we did in the third and fourth quarter to supply/demand |
| I mean any color you can provide on the state of the consumer and what you took away from kind of the fourth quarter? Clifton Pemble I would say generally that the response from the consumer side was better than we expected and actually seem quite strong |
| We're honored to be recognized for creating a best-in-class workplace |
| Consolidated revenue increased 8% to $5.2 billion, which is a new annual record |
| Fitness revenue increased 21% for the year with growth across all product categories, led by strong demand for our new running watches |
| Full-year growth in operating margins were 53% and 17%, respectively, and operating income more than doubled to $232 million |
| Looking ahead, we expect revenue to increase approximately 50% as deliveries of domain controllers continue to ramp up, and we expect to reach profitability on a quarterly basis in the back half of the year |
| With its rich wellness and fitness features, bright display and long battery life, the Venu 3 is indeed a best-in-class product |
| Looking ahead, we have a strong lineup of recently introduced running, cycling, and wellness products and expect to launch additional products during the year to support growth |
| I'm proud of the progress our auto OEM team has made in 2023 |
| This award adds to the already strong business we have with Yamaha across both two-wheel and marine vehicles |
| This is projected to be the single largest award in the history of our auto OEM business, expanding our market share and customer base for domain controllers |
| Revenue increased 49% to $423 million, a new record with growth primarily driven by increased shipments of domain controllers to BMW |
| Looking ahead, we expect that our strong outdoor product road map will result in revenue growth of 7% for the year |
| Revenue increased 7% for the year to $846 million, a new record driven by growth in OEM product categories |
| These innovations demonstrate why our marine segment is performing so well in an otherwise soft market |
| It's nice to see revenue kind of approaching 10% growth year-over-year, obviously partially aided by the auto OEM business |
| This resulted in pro forma EPS of $1.72, up 27% over the prior year |
| Statement |
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| And we did come off of 2022 and into 2023, with significant supply chain challenges, which drove behaviors on the part of those dealers and installers to have more inventory on their shelves |
| On the other hand, we expect softer aftermarket sales in the coming year |
| Revenue decreased 4% for the year as solid performance in the second half of the year could not fully offset the weaker first half |
| Operating margin was 20.9%, 20 basis point decrease from the prior year |
| Gross margin was 57.5%, a 20 basis point decrease from the prior year |
| Excluding JL Audio, revenue from marine decreased approximately 3% for the year |
| In terms of the margin profile, we've been telling people that the margin in auto OEM is expected to go down as it has been doing |
| There was recently another notable large smart wearable company that had an issue with their pulse ox readings and eventually dropped right now from their product offering |
| Clifton Pemble Yes, I think in China, the economic situation has been more challenging |
| I think in general, I would say that we estimate the market declined about 10% in 2023 |
| Clifton Pemble Let's say, Noah, that the market, as we mentioned in the remarks is softer |
| We expect gross margin to be approximately 56.5%, 100 basis point year-over-year decrease, which is primarily due to segment mix as auto OEM becomes a large percentage of our business |
| Full-year 2023 gross margin was 23% and our losses narrowed progressively throughout the year, ending at just under $10 million for the fourth quarter |
| The marine market has slowed in 2023 with many players reporting double-digit revenue declines, but we outperformed by capturing market share from our competitors |
| 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 |
| Inventory balance decreased year-over-year to $1.3 billion to execute our strategy to optimize inventory, reductions in our consumer inventory more than offsetting the increases associated with our auto OEM business, the addition of JL Audio inventory |
| We expect this trend to continue in 2024 as aircraft makers work through historically high back orders |
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