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Garmin (GRMN) Risk Analysis
Risk Overview Q2, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Our quarterly operating results are subject to fluctuations and seasonality.
Our operating results are difficult to predict and our future operating results may fluctuate significantly. As we have expanded our operations, our operating expenses, particularly our research and development and information technology costs, have increased as a percentage of our sales in some periods. If revenues decrease and we maintain or continue to increase operating expenses, our business, financial condition and results of operations could be materially adversely affected. Historically, our revenues have been lower in the first quarter of each fiscal year as many of our devices are highly consumer-oriented, and consumer buying is traditionally lower in this quarter. However, this can fluctuate based on the timing of new product launches. Sales of many of our consumer products have been highest in our fourth fiscal quarter due to increased consumer spending patterns on electronic devices during the holiday season, and many marine products experience increased demand in the first and second quarters in advance of the summer boating season. Our aviation and auto OEM products do not experience much seasonal variation but are more influenced by the timing of aircraft certifications, regulatory mandates, auto program manufacturing, and the release of new products when the initial demand is typically the strongest.
- Corporate Activity and Growth - Risk 2We have made and expect to may continue making significant investments in the auto OEM segment, the associated cost of which may negatively impact total company profits if auto OEM segment revenue significantly declines. profits.
We have been awarded several tier-one and tier-two auto OEM supplier contracts. To fulfill the associated program commitments, we have invested significantly in facilities, research and development, and other operating expenses. Operating performance of the auto OEM segment has negatively impacted our consolidated operating income, as the associated revenue and gross profit have not been sufficient to cover these costs. If we are not successful in winning additional contracts, substantially leveraging our past and future investments, and implementing and maintaining efficient manufacturing processes, the auto OEM segment's contributions may continue to negatively impact total company profits. We may incur substantial restructuring costs if we are unable to generate profits from auto OEM contracts, which could materially adversely affect our business, financial condition and results of operations.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 36
- Share Price & Shareholder Rights - Risk 1The rights of our shareholders are governed by Swiss law.
The rights of our shareholders are governed by Swiss law and Garmin Ltd.'s articles of association. The rights of shareholders under Swiss law differ from the rights of shareholders of companies incorporated in other jurisdictions. For example, subject to specified exceptions, including the exceptions described in our articles of association, Swiss law grants preemptive rights to existing shareholders to subscribe for new issuances of shares and other securities. Swiss law also does not provide as much flexibility in the various terms that can attach to different classes of shares as the laws of some other jurisdictions. Swiss law also reserves for approval by shareholders certain corporate actions over which a board of directors would have authority in some other jurisdictions. For example, Swiss law provides that dividends and other distributions must be approved by shareholders at the general meeting of shareholders. These Swiss law requirements relating to our capital management may limit our flexibility, and situations may arise where greater flexibility would have provided substantial benefits to our shareholders.
- Share Price & Shareholder Rights - Risk 2Our officers and directors exert substantial influence over us.
As of December 27, 2025, members of our Board of Directors and our executive officers, together with their respective immediate family members and entities that may be deemed affiliates of or related to such persons or entities, beneficially owned approximately 15% of our outstanding shares. Accordingly, these shareholders, if acting together or with other shareholders owning a significant amount of our outstanding shares, may be able to significantly influence the outcome of corporate actions requiring shareholder approval, such as mergers and acquisitions and shareholder proposals. This level of ownership may have the effect of delaying, deferring, or preventing a change in control of Garmin and may adversely affect the voting and other rights of other holders of our common shares.
- Share Price & Shareholder Rights - Risk 3The volatility of our share price could adversely affect investment in our common shares.
The market price of our shares has been, and may continue to be, highly volatile. During 2025, the closing price of our shares ranged from a low of $173.63 to a high of $259.77. A variety of factors could cause the price of our shares to fluctuate, perhaps substantially, including but not limited to: - new products or product enhancements by us or our competitors;- general conditions in the worldwide economy, including fluctuations in inflation, interest rates and global currency exchange rates;- announcements of technological innovations;- product obsolescence and our ability to manage product transitions;- developments in our relationships with our customers and suppliers;- the availability, pricing and timeliness of delivery of components, such as semiconductors, flash memory and liquid crystal displays, used in our products;- quarterly fluctuations in our actual or anticipated operating results;- changes and proposed changes in applicable tax laws, tax rates, tariffs and duties;- developments in patents or other intellectual property rights and litigation;- announcements and rumors of developments related to our business, our competitors, our suppliers or the markets in which we compete;- research reports or opinions issued by securities analysts or brokerage houses related to Garmin, our competitors, our suppliers or our customers;- any significant acts of terrorism in locations where we have significant operations or significant markets for our products; and - other factors as discussed in the previously listed risks. In addition, from time to time the stock market in general and the markets for shares of technology companies in particular, experience extreme price fluctuations which have often been unrelated to the operating performance of affected companies. Any such fluctuations in the future could adversely affect the market price of our common shares.
- Share Price & Shareholder Rights - Risk 4There is uncertainty as to our shareholders' ability to enforce certain foreign civil liabilities in Switzerland and Taiwan.
We are a Swiss company and a substantial portion of our assets are located outside the United States, particularly in Taiwan. As a result, it may be difficult to effect service of process within the United States upon us. In addition, there is uncertainty as to whether the courts of Switzerland or Taiwan would recognize or enforce judgments of United States courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in Switzerland or Taiwan against us predicated upon the securities laws of the United States or any state thereof.
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