台灣國際航電 (GRMN) 2023 Q2 法說會逐字稿

Thank you for standing by. My name is Bhavesh, and I will be your conference operator today. At this time, I would like to welcome everyone to the Garmin Limited Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Thank you. I will now turn the call over to Teri Seck, Director, Investor Relations. You may begin your conference.

謝謝你的支持。我叫 Bhavesh，今天我將擔任你們的會議操作員。現在，我歡迎大家參加 Garmin Limited 2023 年第二季度收益電話會議。 （操作員說明）謝謝。我現在將把電話轉給投資者關係總監 Teri Seck。您可以開始您的會議了。

Good morning. We would like to welcome you to the Garmin Ltd. Second Quarter 2023 Earnings Call. Please note that the earnings press release and related slides are available at Garmin's Investor Relations site at www.garmin.com/stock. An archive of the webcast and related transcript will also be available on our website.

早上好。歡迎您參加 Garmin Ltd. 2023 年第二季度財報電話會議。請注意，收益新聞稿和相關幻燈片可在 Garmin 投資者關係網站 www.garmin.com/stock 上獲取。我們的網站上也將提供網絡廣播和相關文字記錄的存檔。

This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding our future financial position, revenues, segment growth rates, earnings, gross margins, operating margins, future dividends or share repurchases, market shares, product introduction, future demand for our products and plans and objectives are forward-looking statements.

本次財報電話會議包括有關 Garmin Ltd. 及其業務的預測和其他前瞻性陳述。任何有關我們未來財務狀況、收入、部門增長率、收益、毛利率、營業利潤、未來股息或股票回購、市場份額、產品介紹、我們產品的未來需求以及計劃和目標的陳述均為前瞻性陳述。

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 Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer.

本次財報電話會議中討論的前瞻性事件和情況可能不會發生，並且由於影響 Garmin 的風險因素，實際結果可能會出現重大差異。有關這些風險因素的信息包含在我們向美國證券交易委員會提交的 10-K 表中。今天上午代表 Garmin Ltd. 出席會議的是總裁兼首席執行官 Cliff Pemble；首席財務官兼財務主管 Doug Boessen。

At this time, I would like to turn the call over to Cliff Pemble.

此時，我想將電話轉給 Cliff Pemble。

Thank you, Teri, and good morning, everyone. As announced earlier today, Garmin reported second quarter consolidated revenue of $1.32 billion, up 6% over the prior year driven by growth in 3 of our 5 business segments. Gross and operating margins were 57.5% and 21.5%, respectively. And we generated $284 million of operating income in the quarter. GAAP EPS was $1.50 and pro forma EPS came in at $1.45, up 1% over the prior year. We feel positive about our results for the first half of the year and are updating our full year 2023 guidance accordingly. We now expect revenue of approximately $5.05 billion and EPS of $5.15 in the year.

謝謝你，泰瑞，大家早上好。正如今天早些時候宣布的那樣，Garmin 報告第二季度綜合收入為 13.2 億美元，比上年同期增長 6%，這主要得益於我們 5 個業務部門中 3 個業務部門的增長。毛利率和營業利潤率分別為 57.5% 和 21.5%。本季度我們創造了 2.84 億美元的營業收入。 GAAP 每股收益為 1.50 美元，預計每股收益為 1.45 美元，比上年增長 1%。我們對上半年的業績感到樂觀，並相應更新 2023 年全年指引。我們目前預計今年的收入約為 50.5 億美元，每股收益為 5.15 美元。

Before turning the call over to Doug, I'll provide highlights by segment and an outlook of what we see ahead. Starting with the Fitness segment. Revenue increased 23% to $335 million, driven by broad-based growth across all product categories. Gross and operating margins were 52% and 16%, respectively, resulting in improved year-over-year operating income of $54 million. During the quarter, we launched the Edge 540 and 840 cycling computers featuring dynamic performance insights, advanced mapping capabilities and solar charging to help cyclists ride longer, smarter and train more effectively. Given the year-to-date performance and current trends, we now expect Fitness revenue to grow approximately 10% for the year.

在將電話轉交給道格之前，我將按細分市場提供要點以及我們對未來的展望。從健身部分開始。受所有產品類別廣泛增長的推動，收入增長 23%，達到 3.35 億美元。毛利率和營業利潤率分別為 52% 和 16%，營業收入同比增加 5,400 萬美元。本季度，我們推出了 Edge 540 和 840 騎行碼表，具有動態性能洞察、先進的地圖功能和太陽能充電功能，可幫助騎行者騎行更遠、更智能、更有效地訓練。鑑於今年迄今為止的業績和當前趨勢，我們現在預計今年健身收入將增長約 10%。

Moving to Outdoor. Revenue decreased 3% to $448 million as growth in adventure watches was more than offset by declines in other categories. Gross and operating margins were 63% and 31%, respectively, resulting in operating income of $138 million. During the quarter, we launched our next-generation fenix 7 Pro Series with enhanced performance insights, built-in LED flashlights; and additional mapping capabilities. We also launched the epix Pro series in 3 sizes, all with bright AMOLED displays and a built-in LED flashlight.

轉向戶外。由於冒險手錶的增長被其他類別的下降所抵消，收入下降了 3% 至 4.48 億美元。毛利潤率和營業利潤率分別為 63% 和 31%，營業收入為 1.38 億美元。本季度，我們推出了新一代 fenix 7 Pro 系列，具有增強的性能洞察力、內置 LED 手電筒；以及額外的繪圖功能。我們還推出了 3 種尺寸的 epix Pro 系列，全部配備明亮的 AMOLED 顯示屏和內置 LED 手電筒。

Also during the quarter, we launched the Approach S70 premium golf smartwatch available in 2 sizes, featuring a bright AMOLED display and with a built-in barometer for more accurate reading on how each shot is playing. We expected the first half of the year to be challenging in comparison to the outstanding performance of the prior year. Given our year-to-date performance and the timing of the adventure watch launches, we now expect Outdoor revenue to be approximately flat compared to the prior year.

同樣在本季度，我們推出了 Approach S70 高級高爾夫智能手錶，有 2 種尺寸可供選擇，配備明亮的 AMOLED 顯示屏和內置氣壓計，可以更準確地讀取每次擊球的情況。與去年的出色表現相比，我們預計今年上半年將充滿挑戰。考慮到我們今年迄今為止的業績和冒險手錶的發佈時間，我們現在預計戶外收入與上一年相比大致持平。

Looking next at the Aviation segment. Revenue increased 6% to $217 million, with growth driven by OEM product categories. Gross and operating margins were strong at 74% and 29%, respectively, resulting in operating income of $63 million. We recently announced the imminent certification of our revolutionary Autoland and Autothrottle systems in select Beechcraft King Air models, marking the first time we have offered these highly important safety technologies to the retrofit market as well as the first time we have certified our Autoland system in a twin-engine aircraft.

接下來看看航空領域。在 OEM 產品類別的推動下，收入增長了 6%，達到 2.17 億美元。毛利潤率和營業利潤率分別高達 74% 和 29%，營業收入達 6,300 萬美元。我們最近宣布即將對部分Beechcraft King Air 型號的革命性自動著陸和自動油門系統進行認證，這標誌著我們首次向改裝市場提供這些非常重要的安全技術，也是我們首次在特定領域對我們的自動著陸系統進行認證。雙引擎飛機。

Our Smart Glide system was recently selected for a FLYING Magazine Editor's Choice Award, the 15th time we received this prestigious award. As you can see, our focus on aviation safety technology is unwavering, and I'm proud of what the aviation team has accomplished. We are pleased with how our Aviation segment has performed so far this year. Given the year-to-date performance and the stronger comparable from the back half of 2022, we are maintaining our 5% growth estimate for 2023.

我們的 Smart Glide 系統最近榮獲《FLYING》雜誌編輯選擇獎，這是我們第 15 次獲得這一享有盛譽的獎項。正如您所看到的，我們對航空安全技術的關注堅定不移，我為航空團隊所取得的成就感到自豪。我們對今年迄今為止航空部門的表現感到滿意。鑑於今年迄今的業績以及 2022 年下半年的強勁可比業績，我們維持 2023 年 5% 的增長預期。

Turning next to the Marine segment. Revenue decreased 11% to $216 million, primarily due to the timing of promotions, which benefited Q1 and contributed to the lower revenue from chartplotters in Q2. Gross and operating margins were 56% and 21%, respectively, resulting in operating income of $46 million. During the quarter, we expanded our trolling motor series to a wider range of boats with the launch of the Force Kraken. This powerful new trolling motor features a pivot style mount for easy installation on a wider range of boats.

轉向海軍陸戰隊部分。收入下降 11% 至 2.16 億美元，主要是由於促銷時機的影響，這使第一季度受益，並導致第二季度海圖儀收入下降。毛利潤率和營業利潤率分別為 56% 和 21%，營業收入為 4600 萬美元。在本季度，我們推出了 Force Kraken，將我們的拖釣馬達系列擴展到更廣泛的船隻。這款強大的新型拖釣馬達具有樞軸式安裝座，可輕鬆安裝在更廣泛的船隻上。

The Marine market has experienced significant growth in recent years, due to increased interest in boating and fishing driven primarily by the pandemic. The pandemic drivers of this growth had mostly normalized, and we now believe the market faces increasing headwinds caused by higher interest rates and greater economic uncertainty. While our first half performance was essentially flat to that of the prior year, we see signs that the market is softening, which impacts our revenue outlook for the remainder of the year. With this in mind, we believe the Marine segment revenue will be down approximately 7% in 2023.

近年來，由於大流行導致人們對划船和釣魚的興趣增加，海洋市場經歷了顯著增長。這種增長的大流行驅動力已基本正常化，我們現在認為市場面臨著由利率上升和經濟不確定性加大帶來的越來越大的阻力。雖然我們上半年的業績與去年基本持平，但我們看到市場正在疲軟的跡象，這影響了我們今年剩餘時間的收入前景。考慮到這一點，我們認為 2023 年船舶部門的收入將下降約 7%。

Moving finally to the Auto OEM segment. Revenue exceeded $100 million of quarterly sales for the first time in our history, increasing 77% primarily driven by shipments of domain controllers to BMW. Gross margin was 24%, and we recorded an operating loss of $18 million driven by ongoing investments as new programs move into production. During the quarter, we received production approval for a new domain controller for safety-critical instrument cluster functions, which will be incorporated into multiple BMW models throughout the remainder of the year. Given the year-to-date performance, we now expect Auto OEM revenue to grow approximately 35% for the year.

最後轉向汽車 OEM 領域。我們的季度銷售額歷史上首次超過 1 億美元，增長了 77%，這主要是由於向 BMW 交付域控制器所致。毛利率為 24%，由於新項目投入生產而持續投資，我們錄得 1800 萬美元的運營虧損。在本季度，我們獲得了用於安全關鍵儀表組功能的新域控制器的生產批准，該控制器將在今年剩餘時間內集成到多款 BMW 車型中。鑑於今年迄今的表現，我們現在預計汽車 OEM 收入今年將增長約 35%。

That concludes my remarks. Next, Doug will walk you through additional details on our financial results. Doug?

我的發言到此結束。接下來，道格將向您介紹有關我們財務業績的更多詳細信息。道格？

Thanks, Cliff. Good morning, everyone. I begin by reviewing our second quarter financial results by comments on the balance sheet, cash flow statement, taxes, updated guidance.

謝謝，克里夫。大家，早安。我首先通過對資產負債表、現金流量表、稅收和更新指導的評論來回顧我們第二季度的財務業績。

We posted revenue of $1.32 billion for the second quarter, representing a 6% increase year-over-year. Gross margin was 57.5%, a 120 basis point decrease from the prior quarter. The decrease was primarily due to segment mix. Operating expense as a percent of sales was 36%, a 90 basis point increase. Operating income was $284 million, a 3% decrease. Operating margin was 21.5%, a 210 basis point decrease. Our GAAP EPS was $1.50 pro forma EPS of $1.45.

第二季度我們的收入為 13.2 億美元，同比增長 6%。毛利率為 57.5%，較上季度下降 120 個基點。減少主要是由於分部組合所致。運營費用佔銷售額的百分比為 36%，增加了 90 個基點。營業收入為 2.84 億美元，下降 3%。營業利潤率為 21.5%，下降 210 個基點。我們的 GAAP 每股收益為 1.50 美元，預計每股收益為 1.45 美元。

Next, look at our second quarter revenue by segment and geography. During the second quarter, we achieved growth in 3 of our 5 segments, double-digit growth in both the Fitness, Auto OEM segments. By geography, Americas region declined 1%, while the EMEA and APAC regions achieved double-digit growth of 11% and 22%, respectively.

接下來，按細分市場和地域查看我們第二季度的收入。第二季度，我們在 5 個細分市場中的 3 個實現了增長，健身、汽車 OEM 細分市場均實現了兩位數增長。從地域來看，美洲地區下降了1%，而歐洲、中東和非洲地區和亞太地區則分別實現了11%和22%的兩位數增長。

Looking next, operating expenses. Second quarter operating expenses increased by $39 million or 9%. Research and development increased $22 million year-over-year, primarily due to engineering personnel costs. SG&A increased $13 million compared to the prior year quarter, primarily due to increases in personnel-related expenses, information technology costs. Advertising expense increased approximately $3 million, primarily due to higher media spend.

接下來是運營費用。第二季度運營費用增加 3900 萬美元，即 9%。研究與開發同比增加 2200 萬美元，主要是由於工程人員成本。 SG&A 與去年同期相比增加了 1300 萬美元，主要是由於人事相關費用和信息技術成本的增加。廣告費用增加了約 300 萬美元，主要是由於媒體支出增加。

A few highlights on the balance sheet, cash flow statement and taxes. We ended the quarter with cash and marketable securities of approximately $2.8 billion. Accounts receivable increased both year-over-year sequentially to $717 million following the seasonally stronger second quarter. Inventory balance decreased both year-over-year and sequentially to approximately $1.4 billion. We're executing on our strategy to optimize inventory, the reductions in our consumer inventory increases associated with our auto OEM business.

資產負債表、現金流量表和稅收的一些要點。本季度結束時，我們擁有約 28 億美元的現金和有價證券。繼第二季度季節性強勁之後，應收賬款同比增長至 7.17 億美元。庫存餘額同比和環比均下降至約 14 億美元。我們正在執行優化庫存的戰略，消費者庫存的減少與我們的汽車 OEM 業務相關。

For the second quarter of 2023, we generated free cash flow of $221 million, $216 million increase in the prior year quarter primarily due to a lower use of cash and purchases of inventory. Capital expenditures for the second quarter were $53 million. We expect full year 2023 free cash flow to be approximately $750 million, capital expenditures approximately $250 million. During the second quarter, we paid dividends of approximately $140 million. Also, we purchased $26 million of company stock at approximately $27 million remaining at quarter-end in the share repurchase program, which authorized through December of 2023. Reported effective tax rate of 8.9% compared to 7.6% prior year quarter. Year-over-year increase in effective tax rate is primarily due to a larger amount of reserve releases in the prior year.

2023 年第二季度，我們產生了 2.21 億美元的自由現金流，比去年同期增加了 2.16 億美元，主要是由於現金使用和庫存採購減少。第二季度資本支出為 5300 萬美元。我們預計 2023 年全年自由現金流約為 7.5 億美元，資本支出約為 2.5 億美元。第二季度，我們支付了約 1.4 億美元的股息。此外，我們還在股票回購計劃中以季度末剩餘的約2700 萬美元的價格購買了2600 萬美元的公司股票，該計劃授權截至2023 年12 月。報告的有效稅率為8.9%，而上年同期為7.6%。有效稅率同比上升主要是由於上年準備金釋放較多。

Turning next to our full year guidance. We estimate revenue of approximately $5.05 billion repaid to our previous guidance of $5 billion. We expect gross margin to be approximately 57.2%, which is lower than our previous guidance of 57.5% primarily due to anticipated full year segment (inaudible). We expect an operating margin of approximately 20%. Also, we expect a pro forma effective tax rate of 8.5%, is higher than our previous guidance of 8% due to projected full year income mix by tax jurisdiction. This results in expected pro forma earnings per share of approximately $5.15.

接下來是我們的全年指導。我們預計收入約為 50.5 億美元，補償了我們之前指導的 50 億美元。我們預計毛利率約為 57.2%，低於我們之前 57.5% 的指導，主要是由於預期的全年業務（聽不清）。我們預計營業利潤率約為 20%。此外，由於按稅收管轄區預測的全年收入組合，我們預計預計有效稅率為 8.5%，高於我們之前 8% 的指導值。這導致預計每股收益約為 5.15 美元。

This concludes our formal remarks. Bhavesh, could you please open the line for Q&A.

我們的正式發言到此結束。 Bhavesh，您可以打開問答線路嗎？

(Operator Instructions) Our first question comes from the line of Joseph Cardoso from JPMorgan.

（操作員指令）我們的第一個問題來自摩根大通的約瑟夫·卡多佐（Joseph Cardoso）。

If I take a look at your full year guide for outdoor and fitness, is the implication or the assumption we should make is that we should see typical seasonality heading into the back half? And if so, what's driving your confidence tracking to the seasonal level of demand, just given concerns around overall consumer spending? And then I have a follow-up.

如果我看一下你們的全年戶外和健身指南，我們應該做出的暗示或假設是我們應該看到典型的季節性進入後半段嗎？如果是這樣，考慮到對整體消費者支出的擔憂，是什麼推動您對季節性需求水平的信心？然後我有一個後續行動。

Yes, I think -- Joseph, this is Cliff. I think fitness and outdoor probably should be looked at differently because there's different dynamics in each one of those. In the Fitness segment, we had a very strong first half because of the sell-in of new products, which, of course, won't repeat as much in the second half. In outdoor, we were comping against a very strong first half in the prior year. And moving into the back half, we see stronger results comping with our new products. So each one is different. I think so far, I would say that we don't see signs of the kind of consumer behaviors that are present in some other segments. Each segment probably has a little bit different dynamic, but we believe both of these segments should be strong in the back half.

是的，我想——約瑟夫，這是克里夫。我認為健身和戶外可能應該以不同的方式看待，因為每一項都有不同的動態。在健身領域，由於新產品的銷售，我們上半年表現非常強勁，當然，下半年不會出現同樣的情況。在戶外方面，我們去年上半年的表現非常強勁。進入下半年，我們看到與我們的新產品相比更強勁的業績。所以每一個都是不同的。我認為到目前為止，我們還沒有看到其他一些細分市場中存在的消費者行為的跡象。每個細分市場的動態可能略有不同，但我們相信這兩個細分市場在後半段都應該表現強勁。

Got it. And then maybe just as a quick follow-up. Can you just touch on how much of a benefit you're seeing in your gross margins from moderating headwinds from components and freight and et cetera? Some of these elevated costs that we had seen over the past couple of years here in 2Q? And then how much of that is still remaining as you enter the back half of the year? And then, I guess, just quickly, is the largest offset to those tailwinds from easing component costs coming from the increasing mix of auto? Or are there other variables that I should be appreciating here?

知道了。然後也許只是作為一個快速的後續行動。您能否簡單談談，由於零部件和貨運等方面的不利因素的緩解，您的毛利率獲得了多少好處？過去幾年我們在第二季度看到的一些成本上升？那麼當你進入下半年時，其中還剩下多少呢？然後，我想，很快，汽車產品組合不斷增加所帶來的零部件成本下降所帶來的最大抵消作用是什麼？或者還有其他我應該欣賞的變量嗎？

Joseph, this is Doug. I'll give you kind of a perspective on gross margins. First, the year-over-year decrease on a consolidated basis was due to a segment mix, and that is based upon where you see fitness and auto OEM, which have a lower gross margin than the consolidated average coming a larger percentage of the total year-over-year. As some of the other components, there's a lot of different moving parts within gross margin, which you mentioned freight. Yes, we are seeing some favorable freight and that favorable freight is due to 2 pieces, 1 of which is it's lower ever rates as well as we're shipping a larger percentage of our products ocean versus air.

約瑟夫，這是道格。我將為您提供有關毛利率的一些看法。首先，綜合基礎上的同比下降是由於細分市場的組合造成的，這是基於健身和汽車原始設備製造商的毛利率，它們的毛利率低於綜合平均水平，但在總體中所佔的比例更大一年又一年。與其他一些組成部分一樣，毛利率中有很多不同的變動部分，您提到了運費。是的，我們看到了一些有利的運費，而有利的運費歸因於兩點，其中之一是它的費率較低，而且我們通過海運與空運相比，運輸了更大比例的產品。

So that's offset by other factors, including a product mix within the segments. So with each one of the segments, each one of the products, you have a different gross margin there depending upon how that mix is one quarter versus the other quarter, that does impact that in there. So there's a lot of different moving parts in there. And also as it relates to freight, I think you mentioned a question what for the future. So we've seen some good benefits in freight year-over-year. We would expect that year-over-year benefit to decrease just because we saw some of the freights come down toward the back half of the year. But we should -- we're not expecting the overall rates to change that much, but the year-over-year favorability and the year-over-year gross margins will decrease.

因此，這被其他因素所抵消，包括細分市場內的產品組合。因此，對於每一個細分市場、每一種產品，你都有不同的毛利率，具體取決於一個季度與另一個季度的混合情況，這確實會影響那裡的毛利率。所以里面有很多不同的活動部件。另外，由於與貨運有關，我認為您提到了一個關於未來的問題。因此，我們在貨運方面看到了一些同比的良好效益。我們預計同比收益會下降，因為我們看到一些貨運量在下半年有所下降。但我們應該——我們預計總體利率不會發生太大變化，但同比好感度和同比毛利率將會下降。

Our next question comes from the line of Ben Bollin from Cleveland Research.

我們的下一個問題來自克利夫蘭研究中心的本·博林 (Ben Bollin)。

Cliff, I was hoping you could talk through how we should think about the profitability glide path within the auto OEM business. You've got really remarkable year-over-year growth and really not much movement on the EBIT line. So at what point does that start to scale? And then I have a follow-up.

Cliff，我希望您能談談我們應該如何思考汽車 OEM 業務的盈利下滑路徑。同比增長確實非常顯著，但息稅前利潤並沒有太大變化。那麼什麼時候開始擴大規模呢？然後我有一個後續行動。

Ben, I would definitely say the results in auto OEM are getting better. I think the operating loss was cut by third this last quarter on a year-over-year basis. So we're seeing improvements. I think there's gives and takes every quarter as the business is somewhat dynamic in the forecast from OEMs, changes according to their business conditions. But in general, I would say we're on the path that we expected.

Ben，我肯定會說汽車 OEM 的業績正在變得更好。我認為上個季度的營業虧損同比減少了三分之一。所以我們看到了改進。我認為每個季度都有取捨，因為原始設備製造商的預測中的業務有些動態，根據其業務狀況而變化。但總的來說，我想說我們正走在我們預期的道路上。

Okay. If you look at -- there's been some headlines out there perhaps for Doug, on what's happening in Switzerland with the global minimum tax. Could you share any ways we should think about this, how an (inaudible) or when the federal accountant may do something, how this could influence potential tax rate into the future?

好的。如果你看一下——可能有一些關於道格的頭條新聞，關於瑞士在全球最低稅率下發生的事情。您能否分享一下我們應該思考這個問題的任何方式，聯邦會計師如何（聽不清）或何時做某事，這將如何影響未來的潛在稅率？

Yes, Ben. Yes, we don't give future guidance on our ETR beside the current year. But you're correct, there are some global minimum tax legislation out there. And with that, it's stating basically a minimum tax of 15%. So if that gets enacted, that would basically have our tax rate, at least 15%. Now I should say that there's a lot of moving parts in our effective tax rate that may impact that also relating to income by mix, reserve for leases and such. But yes, depending on what -- how that the legislation and when it's enacted, the situation is that our effective tax rate would be at 15% or possibly even higher.

是的，本。是的，除了本年度之外，我們不會就 ETR 提供未來指導。但你是對的，有一些全球最低稅收立法。因此，它基本上規定了 15% 的最低稅率。因此，如果該法案獲得通過，我們的稅率基本上將達到至少 15%。現在我應該說，我們的有效稅率中有很多變化的部分可能會影響與混合收入、租賃準備金等相關的部分。但是，是的，取決於立法的方式和何時頒布，我們的有效稅率將達到 15% 甚至可能更高。

That's great. And then my last question, looking at the Marine business, Cliff, could you talk to how -- you talked about softer expectations in the back half, but any thoughts on how aftermarket versus new boat delivery play into that? Are they both softening, one worse than another? Just any thoughts there? And that's it for me.

那太棒了。然後我的最後一個問題，關於海事業務，克里夫，你能談談如何——你談到了下半年的疲軟預期，但對售後市場與新船交付如何發揮作用有什麼想法嗎？他們是否都軟化了，一個比另一個更糟糕？只是有什麼想法嗎？對我來說就是這樣。

Yes, I think there's quite a few moving pieces in what's going on in marine. I would say that from the midrange on up in terms of both sizes, the market is still very healthy and both from the OEM and aftermarket perspective. It seems like the weakness is more from the lower -- mid-range to lower end. And of course, new boat buying activity generates both refits and equipment added to the boat at the time of purchase. So these are the things that are just all coming into play. And another factor really is this seasonality that we're seeing return that we haven't seen over the course of nearly 4 years now. So I think there's a lot of dynamics. I believe the market is still a very, very good market. It's one of the last ones to really show this normalization that we've seen in every other market. And we expected that it would come, but it's with us now. And I think going forward, we'll concentrate on new products and driving growth through innovation.

是的，我認為海洋領域正在發生的事情有很多令人感動的事情。我想說，從中端以上的兩種尺寸來看，市場仍然非常健康，無論是從原始設備製造商還是售後市場的角度來看。弱點似乎更多地集中在低端——中端到低端。當然，新船購買活動會產生改裝和在購買時添加到船上的設備。所以這些都是正在發揮作用的事情。另一個因素確實是這種季節性，我們現在看到了近四年來從未見過的回歸。所以我認為有很多動力。我相信這個市場仍然是一個非常非常好的市場。這是我們在其他市場中看到的最後一個真正展現這種正常化的市場之一。我們期望它會到來，但它現在就在我們身邊。我認為展望未來，我們將專注於新產品並通過創新推動增長。

Our next question comes from the line of George Wang from Barclays.

我們的下一個問題來自巴克萊銀行的喬治·王。

Firstly, can you comment on the buyback prospects just given incremental higher free cash flow kind of healthy business profile. Just curious if the strategy in terms of capital return has changed. I noticed kind of buyback ticked lower in 2Q. Just curious if any color on that.

首先，您能否評論一下鑑於增量更高的自由現金流以及健康的業務狀況的回購前景。只是好奇資本回報方面的策略是否發生了變化。我注意到第二季度的回購有所下降。只是好奇上面是否有顏色。

So is the question regarding the buybacks?

那麼問題是關於回購嗎？

Yes.

是的。

Yes. Basically, we'll evaluate our share repurchase just based upon the business and market conditions. The situation is we have a $300 million authorization through the end of '23, we have $26 million, $27 million of that remaining. It was really just based upon business conditions and market conditions.

是的。基本上，我們將根據業務和市場狀況來評估我們的股票回購。目前的情況是，到 23 年底，我們已經獲得了 3 億美元的授權，我們還有 2600 萬美元，其中還有 2700 萬美元。這實際上只是基於業務條件和市場條件。

Okay. Great. Just if I can, I can squeeze in a quick follow-up. But just can you comment on the backlog and the channel inventory, really 2 parts kind of on the industrial business, kind of marine and aviation incrementally weaker. You mentioned that it's more seasonal for the Marine. Can you comment on the backlog across Marine and Aviation? Also, any thoughts on the channel inventory on the fitness and kind of wearable side of the business?

好的。偉大的。如果可以的話，我可以快速跟進。但您能否評論一下積壓訂單和渠道庫存，實際上是工業業務的兩部分，海運和航空業務逐漸疲軟。你提到這對於海軍陸戰隊來說更具季節性。您能否對海洋和航空領域的積壓情況發表評論？另外，對健身和可穿戴業務方面的渠道庫存有何想法？

Yes. I think backlogs have come down a lot, and most of that is due to the easing supply chains that we've seen allowing us to fill the orders much faster than we were last year for both Aviation and Marine. I think some of those dealers across Aviation and Marine in the past year were interested in keeping more safety stock on their shelves because they wanted to make sure they could serve customers coming into the shops. And as lead times have come down, they have relaxed a little bit their concern over being able to serve their customers. So that's also part of the moving pieces that we're seeing as things normalize in both aviation and marine. I would say that the channel inventory is mostly healthy. And as we go forward, it will be replenishment type of activity that goes on.

是的。我認為積壓訂單已經減少了很多，其中大部分是由於供應鏈的放鬆，我們看到航空和海運方面的訂單比去年快得多。我認為去年航空和海事領域的一些經銷商有興趣在貨架上保留更多的安全庫存，因為他們希望確保能夠為進入商店的顧客提供服務。隨著交貨時間的縮短，他們對能否為客戶提供服務的擔憂有所緩解。因此，隨著航空和航海業的正常化，這也是我們所看到的變化的一部分。我想說的是，渠道庫存基本健康。隨著我們的前進，補貨類型的活動將會持續進行。

Our next question comes from the line of David McGregor from Longbow Research.

我們的下一個問題來自 Longbow Research 的 David McGregor。

Cliff, just a question on the automotive OEM and just go back to a previous question on this. Just trying to think about profitability and trying to understand the economics around this business. But is there any way to separate the start-up costs and kind of the onetimes and the ramp-up costs from the profitability of the volume that you are shipping?

Cliff，只是一個關於汽車原始設備製造商的問題，請回到之前的問題。只是嘗試考慮盈利能力並嘗試了解該業務的經濟學原理。但是，有什麼方法可以將啟動成本、一次性成本和提升成本與您所運輸量的盈利能力分開嗎？

Yes. I mean, we also look at that. That really relates to building scale in the business as revenues increase. We haven't really talked about those kinds of number externally because we're a company that focuses on true GAAP financials. So we include all of our costs or our expense, and we all try to make our -- all of our businesses profitable and perform well on that basis.

是的。我的意思是，我們也關注這一點。這確實與隨著收入的增加而擴大業務規模有關。我們還沒有真正對外談論過這些數字，因為我們是一家專注於真正的 GAAP 財務數據的公司。因此，我們將所有成本或費用包括在內，並且我們都努力使我們所有的業務盈利並在此基礎上表現良好。

Okay. And how are you thinking about second half revenues for the automotive OEM in your annual guidance?

好的。您在年度指導中如何看待汽車原始設備製造商下半年的收入？

Yes. I mean I think we raised our guidance outlook for the full year, reflecting strength that we've seen in the business and acceleration into the back half. So that reflects our current view of the business.

是的。我的意思是，我認為我們上調了全年指導展望，反映出我們在業務中看到的實力以及下半年的加速發展。這反映了我們目前對業務的看法。

Okay. You mentioned that you'd added another controller program. I'm just wondering if it's possible that we will continue to see program additions? Or do you just ship under the programs that you have now?

好的。您提到您添加了另一個控制器程序。我只是想知道我們是否有可能繼續看到計劃的增加？或者您只是根據現有的計劃發貨？

Well, I think these devices are being incorporated across model lines. And so that takes some time, and it's dependent on BMW's own engineering work and scheduling into production. So we're basing our forecast on what we have been told for their production plan for cars containing our devices.

嗯，我認為這些設備正在跨車型系列整合。因此這需要一些時間，並且取決於寶馬自己的工程工作和生產安排。因此，我們的預測基於我們所獲悉的包含我們設備的汽車生產計劃。

Okay. And then my follow-up question is really around the discussion of promotional expectations for the rest of the year. And obviously, there's a seasonal pattern at play here, but I'm just wondering how you're thinking about your required spending on promotional programs and promotional support into the second half of the year versus second half of last year?

好的。然後我的後續問題實際上是圍繞今年剩餘時間的促銷預期的討論。顯然，這裡存在季節性模式，但我只是想知道與去年下半年相比，您如何看待今年下半年在促銷計劃和促銷支持方面所需的支出？

Yes. I think we expect it to be more like normal than ever before in recent memory. We've seen this trend in recent quarters where the markets are returning to the level of promotions and discounting and sales that we saw in the past. So we're expecting that. It will probably be very similar to what we've seen over the past year. Honestly, it kind of more normalized even last year. So that's what we expect going forward is really a normal cadence.

是的。我認為我們預計它會比近期記憶中的以往任何時候都更加正常。最近幾個季度我們已經看到了這種趨勢，市場正在恢復到我們過去看到的促銷、折扣和銷售水平。所以我們對此充滿期待。它可能與我們過去一年所看到的非常相似。老實說，即使在去年，這種情況也更加正常化了。所以這就是我們期望的未來確實是一個正常的節奏。

Our next question comes from the line of Ivan Feinseth from Tigress Financial.

我們的下一個問題來自 Tigress Financial 的 Ivan Feinseth。

Congratulations on the great automotive OEM progress. Can you go into a little detail about the opening of the Firstbeat Analytics Lab and like what your expectations are and what you think you can gain from that? And also since everybody is talking about AI, what are your thoughts on how AI can help product -- your product development and product functionality?

祝賀汽車 OEM 取得的巨大進步。您能否詳細介紹一下 Firstbeat 分析實驗室的開業情況，以及您的期望是什麼以及您認為您可以從中獲得什麼？而且既然每個人都在談論人工智能，你對人工智能如何幫助產品——你的產品開發和產品功能有什麼想法？

I think the Firstbeat Analytics Lab reflects our commitment to ongoing research and innovation in the area of biometrics and performance for athletes as well as wellness features in our products. So we continue to invest in that area, and it's something that's important to us to differentiate our products from others. In terms of AI, we've been using AI techniques in our products and in our algorithms on both cloud-based applications as well as on our devices for quite a while. We continue to see this trend, and we continue to develop our capabilities in that area as well. I think in terms of how we deploy that in the company, there's probably a mixed bag of responses there that I would say. Some of it is good and can be helpful to us in productivity and other applications of AI that have been broadly discussed in the media may not be for us. But in general, we're approaching it with prudence.

我認為 Firstbeat 分析實驗室體現了我們對運動員生物識別和表現以及產品健康功能領域持續研究和創新的承諾。因此，我們繼續在該領域進行投資，這對我們來說非常重要，可以使我們的產品與其他產品區分開來。在人工智能方面，我們已經在我們的產品和基於雲的應用程序以及我們的設備上的算法中使用人工智能技術相當長一段時間了。我們繼續看到這一趨勢，並繼續發展我們在該領域的能力。我認為，就我們如何在公司中部署這一點而言，我想說可能會有各種各樣的反應。其中一些是好的，可以對我們的生產力有所幫助，而媒體廣泛討論的人工智能的其他應用可能不適合我們。但總的來說，我們會謹慎對待它。

Then one last question. A lot of your new products that you've introduced like the recent golf watch have come with a delineation on the application for an upgrade and a subscription. Can you give me your views or outlook on as far as creating subscription revenue and tiering the functionality and pricing for some of your apps?

然後是最後一個問題。您推出的許多新產品（例如最近推出的高爾夫手錶）都附帶了升級和訂閱應用程序的說明。您能否告訴我您對創造訂閱收入以及對某些應用程序的功能和定價進行分層的看法或展望？

Yes. I think what you're seeing reflects our intentional strategy to increase revenues from subscription-based sources. And so the golf apps, our tax trainers, inReach, aviation databases, outdoor maps, all of these things are playing into our desire to increase revenues from recurring sources.

是的。我認為您所看到的反映了我們旨在增加基於訂閱的來源的收入的有意戰略。因此，高爾夫應用程序、我們的稅務培訓師、inReach、航空數據庫、戶外地圖，所有這些都在滿足我們增加經常性來源收入的願望。

Our next question comes from Erik Woodring from Morgan Stanley.

我們的下一個問題來自摩根士丹利的埃里克·伍德林。

A few, if I may. The first one, I know it's early, but can you maybe just give us some color on customer reception to the new epix Pro and the new fenix Pro series launched in the quarter? And I would just love if you can kind of weave that into your sense of what the health of the consumer is? Are you seeing demand stabilize? Are you seeing demand from upgrades versus existing upgrades versus new customers? Any difference there? And then any pricing sensitivity you're hearing from the customer? So just an overall read on the customer and how it's impacting some of these new product launches? And then I have a follow-up.

如果可以的話，有幾個。第一個，我知道現在還為時過早，但您能否給我們一些有關本季度推出的新 Epix Pro 和新 fenix Pro 系列的客戶接待情況的信息？如果您能將其融入到您對消費者健康的理解中，我會很高興嗎？您認為需求穩定了嗎？您是否看到了升級、現有升級和新客戶的需求？有什麼區別嗎？然後您從客戶那裡聽到了任何定價敏感性？那麼，只是對客戶進行總體了解以及它對其中一些新產品的發布有何影響？然後我有一個後續行動。

Okay. Yes. So the launch of those 2 new families, the epix Pro and the fenix 7 Pro, I think, went very well. We feel like the sell-through as indicated through our registrations is going exactly as we had planned. And I think we're seeing very similar trends as what we've seen in the past in terms of mix of new customers and existing customers that upgrade. So I think I would say that all is pretty much as we would expect and as what we've seen in the past on those 2 product lines, really no sensitivity from the consumer, in terms of softness there relative to any economic issues. I think the question of the consumer health is really depends on the product line that you're talking about. And those products are definitely higher-end products that target more affluent customers. So we feel like everything there is going as we had planned.

好的。是的。因此，我認為，epix Pro 和 fenix 7 Pro 這兩個新系列的推出進行得非常順利。我們覺得我們的註冊所顯示的銷售情況完全按照我們的計劃進行。我認為我們在新客戶和現有客戶升級的組合方面看到了與過去非常相似的趨勢。因此，我想我會說，一切都與我們預期的一樣，正如我們過去在這兩條產品線上所看到的那樣，消費者對於任何經濟問題的疲軟程度確實不敏感。我認為消費者健康問題實際上取決於您所談論的產品線。這些產品絕對是針對更富裕客戶的高端產品。所以我們覺得一切都按照我們的計劃進行。

Okay. That's helpful. And then maybe just to follow up on your comments on the marine business, Cliff. I kind of understand the dynamics that you walked us through between the strong first quarter and a bit weaker second quarter. But can you maybe just elaborate on exactly what's going on in the market? And the only reason I say that is I know you called out interest rates and macro concerns as headwinds. But neither of those dynamics are necessarily new. And so just curious, from your perspective, what are you seeing over the last 90 days that has really changed your view from this market growing to this market declining?

好的。這很有幫助。然後也許只是跟進您對海洋業務的評論，克里夫。我有點理解您帶領我們經歷強勁的第一季度和稍弱的第二季度之間的動態。但您能否詳細說明一下市場的具體情況？我這麼說的唯一原因是我知道您將利率和宏觀擔憂視為逆風。但這些動態都不一定是新的。所以只是好奇，從您的角度來看，您在過去 90 天中看到的是什麼真正改變了您對市場增長的看法？

Yes. I think our view is really based on all of the latest data that we see and also talking to all of our retailers and distributors. There's definitely pockets of strength in the market. But increasingly, we're seeing some feedback that there's some hesitancy on the part of some customers who, in the past, felt like they had much more money to spend who maybe now don't or are faced with very high interest rates at their financing a purchase and can't buy it with cash. So these are the kind of initial signs that we're seeing that just want us to cause us to be a little bit more cautious for the back half.

是的。我認為我們的觀點實際上是基於我們看到的所有最新數據以及與我們所有零售商和分銷商的交談。市場上肯定有一些實力雄厚的公司。但我們越來越多地看到一些反饋，表明一些客戶有些猶豫，他們過去覺得自己有更多的錢可以花，但現在可能沒有，或者面臨著非常高的利率。融資購買，不能用現金購買。因此，這些是我們看到的初步跡象，只是希望我們對後半段更加謹慎。

And maybe if I could just ask one follow-up to that. After just kind of talking about the higher-end products on the consumer side being okay. As it relates to the comments that you just made about hesitancy from customers and what you said earlier in Q&A. Am I correct that, that's largely at the lower end where there might be more economic sensitivity versus the higher end, that might be a bit more resilient, specifically marine?

也許我可以問一個後續問題。在剛剛談論了消費者方面的高端產品還可以之後。因為這與您剛剛對客戶的猶豫所發表的評論以及您之前在問答中所說的內容有關。我是否正確，這主要是在低端，與高端相比，可能有更多的經濟敏感性，可能更有彈性，特別是海洋？

Yes, that's true.

是的，這是真的。

(Operator Instructions) Our next question comes from the line of Jordan (inaudible) from Bank of America.

（操作員說明）我們的下一個問題來自美國銀行的 Jordan（聽不清）。

I just had a quick question. For -- like in the macro environment for Europe and Asia, I know sales were up year-over-year for both. But how are you guys thinking about demand when data is coming out that the macro environment is not improving. And I don't know how are you guys looking at that for the full year?

我只是有一個簡單的問題。就像歐洲和亞洲的宏觀環境一樣，我知道這兩個地區的銷售額都同比增長。但是，當數據顯示宏觀環境沒有改善時，你們如何看待需求呢？我不知道你們對全年的情況有何看法？

Well, I think each geography has its own particular situation. And Asia is a big place. So some countries are doing very well and doing well with our new releases, while in some -- in other cases, maybe the economies aren't so good, specifically China. We're not completely dependent on one country in Asia for our results. So the diversity of our markets there allow us to show the results that we have. Similarly, in EMEA, I think they're probably on a different time line when it comes to their economic progress. And so when they were a little softer early on, they've been a little stronger, especially as we've introduced some of these new products.

嗯，我認為每個地區都有自己的特殊情況。亞洲是一個很大的地方。因此，有些國家的表現非常好，並且在我們的新版本中表現良好，而在某些情況下——在其他情況下，經濟可能不太好，特別是中國。我們的業績並不完全依賴亞洲某一國家。因此，我們市場的多樣性使我們能夠展示我們所取得的成果。同樣，在歐洲、中東和非洲地區，我認為他們的經濟進步可能處於不同的時間線上。因此，當它們早期稍微軟一些時，它們就會變得更強一些，特別是當我們推出其中一些新產品時。

Right. Okay. And then the only other question I had, too, was on the increase in advertising spend, is it just actually running more promotions or it's stronger discounts?

正確的。好的。然後我唯一的另一個問題是廣告支出的增加，這只是實際上進行更多促銷還是更強的折扣？

Yes. This is related to media spend, primarily relating to the new product launch that we had. So a lot of that media spend is really tied to -- we have new products, making sure that we get to see a message out to our consumers.

是的。這與媒體支出有關，主要與我們的新產品發布有關。因此，很多媒體支出實際上與我們推出新產品有關，以確保我們能夠向消費者傳達信息。

And advertising is really the -- advertising is an item related to the specific promotion, as Doug said, of awareness of the product, not necessarily the discounting of the [direct] itself.

正如道格所說，廣告實際上是與特定促銷相關的項目，與產品的知名度相關，而不一定是[直接]本身的折扣。

There are no further questions at this time. Ms. Teri Seck, I'll turn the call back over to you.

目前沒有其他問題。 Teri Seck 女士，我會將電話轉回給您。

Thanks for your time today. And Doug and I are available for callbacks. Have a great day. Bye.

感謝您今天抽出時間。我和道格可以回電。祝你有美好的一天。再見。

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

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。