台灣國際航電 (GRMN) 2023 Q3 法說會逐字稿

Hello, and welcome to the Garmin Ltd. Third Quarter 2023 Earnings Call. (Operator Instructions)

您好，歡迎參加 Garmin Ltd. 2023 年第三季財報電話會議。 （操作員說明）

I will now turn the conference over to Teri Seck, Director of Investor Relations. Please go ahead.

我現在將會議交給投資者關係總監 Teri Seck。請繼續。

Good morning. We would like to welcome you to Garmin Ltd.'s Third Quarter 2023 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/stock. An archive of the webcast and related transcript will also be available on our website.

早安.歡迎您參加 Garmin Ltd. 的 2023 年第三季財報電話會議。請注意，收益新聞稿和相關投影片可在網路上的 Garmin 投資者關係網站 www.garmin.com/stock 上取得。我們的網站上也將提供網路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 introductions, 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聲明。任何有關我們未來財務狀況、收入、部門成長率、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.

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資訊包含在我們向美國證券交易委員會提交的 10-K 表中。

Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer.

今天早上代表 Garmin Ltd. 出席會議的是總裁兼執行長 Cliff Pemble；財務長兼財務長 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。

Thanks, Teri, and good morning, everyone.

謝謝，泰瑞，大家早安。

As announced earlier today, Garmin delivered outstanding results in the third quarter, with strong growth in consolidated revenue, operating income and earnings. Consolidated revenue came in at $1.28 billion, up 12% over the prior year, driven by growth in 4 of our 5 business segments.

正如今天早些時候宣布的那樣，Garmin 在第三季度取得了出色的業績，綜合收入、營業收入和盈利均強勁增長。綜合營收為 12.8 億美元，比上年成長 12%，這得益於我們 5 個業務部門中 4 個業務部門的成長。

Gross and operating margins were 57% and 21.2%, respectively, resulting in operating income of $270 million, up 13% year-over-year. We registered GAAP EPS of $1.34, and pro forma EPS came in at $1.41, up 14% over the prior year. We are pleased with our third quarter results and are updating our full year 2023 guidance accordingly. We now expect revenue of approximately $5.15 billion and pro forma EPS of $5.25.

毛利率和營業利益率分別為 57% 和 21.2%，營業收入達 2.7 億美元，較去年同期成長 13%。我們登記的 GAAP 每股收益為 1.34 美元，預計每股收益為 1.41 美元，比上年增長 14%。我們對第三季的業績感到滿意，並相應更新 2023 年全年指引。我們目前預計營收約為 51.5 億美元，預計每股收益為 5.25 美元。

Before turning the call over to Doug, I'll provide highlights by segment and an outlook of what we see ahead.

在將電話轉交給道格之前，我將按細分市場提供重點內容以及我們對未來的展望。

Starting with the fitness segment. Revenue increased 26% to $353 million, a new third quarter record for the segment and a continuation of the strong performance we've been experiencing all year.

從健身部分開始。營收成長 26%，達到 3.53 億美元，創下該部門第三季的新紀錄，也是我們全年強勁業績的延續。

Growth was (inaudible) based across all categories, led by strong demand for wearables. Gross and operating margins were 54% and 21%, respectively, resulting in improved year-over-year operating income of $75 million. During the quarter, we introduced the new Venu 3 smartwatch family in two sizes as well as the value packed vivoactive 5 with a bright AMOLED display. These wearables have robust new health and wellness features, including nap detection and enhanced sleep coaching.

在對穿戴式裝置的強勁需求的帶動下，所有類別的成長（聽不清楚）。毛利率和營業利益率分別為 54% 和 21%，營業收入較去年同期增加 7,500 萬美元。本季度，我們推出了兩種尺寸的全新 Venu 3 智慧手錶系列以及配備明亮 AMOLED 顯示器的超值 Vivoactive 5。這些穿戴式裝置具有強大的新健康和保健功能，包括午睡檢測和增強的睡眠指導。

Also, we recently announced that our ECG App is now approved for use with recently introduced products, including the Venu 3 as well as our popular, epix Pro and fenix 7 Pro series watches. This FDA cleared and clinically validated app records heart rhythms and checks for signs of atrial fibrillation. The expansion of the ECG App gives our customers another powerful tool for managing their health. Given the strong year-to-date performance and the current trends, we now expect fitness revenue to increase approximately 20% for the year.

此外，我們最近也宣布，我們的 ECG 應用程式現已獲準用於最近推出的產品，包括 Venu 3 以及我們廣受歡迎的 epix Pro 和 fenix 7 Pro 系列手錶。這款經 FDA 批准並經過臨床驗證的應用程式可記錄心律並檢查心房顫動的跡象。 ECG 應用程式的擴展為我們的客戶提供了另一個管理健康的強大工具。鑑於年初至今的強勁表現和當前趨勢，我們現在預計今年健身收入將成長約 20%。

Moving to the outdoor segment. Revenue increased 7% to a third quarter record of $434 million, with growth across multiple categories, led by venture watches. Gross and operating margins were 62% and 31%, respectively, resulting in operating income of $136 million.

轉向戶外部分。第三季營收成長 7%，達到 4.34 億美元，創歷史新高，多個類別均實現成長，其中風投手錶帶動了成長。毛利率和營業利益率分別為 62% 和 31%，營業收入為 1.36 億美元。

During the quarter, we launched the tactix 7, with a bright AMOLED display, a night vision compatible flashlight and up to 31 days of battery life. We recently announced the MARQ Carbon premium smartwatch collection, crafted from 130 layers of used carbon fiber, making these watches distinctive, strong, lightweight and ready for adventure.

本季度，我們推出了 tactix 7，配備明亮的 AMOLED 顯示器、夜視相容手電筒和長達 31 天的電池續航時間。我們最近推出了 MARQ Carbon 高級智慧手錶系列，由 130 層舊碳纖維製成，使這些手錶獨特、堅固、輕便，適合冒險。

We're pleased with the performance of the outdoor segment, but the path to growth has been plunging than anticipated when compared to the strong performance of 2022 and the timing of product introductions in 2023. Given the year-to-date performance, we now expect outdoor revenue to decrease approximately 5% for the year.

我們對戶外細分市場的表現感到滿意，但與 2022 年的強勁表現和 2023 年產品推出的時間相比，成長之路比預期的要大幅下滑。鑑於今年迄今為止的表現，我們現在預計今年戶外收入將減少約5%。

Looking next at the aviation segment. Revenue increased 5% to a third quarter record of $198 million, with growth driven by OEM product categories. Gross and operating margins were strong at 75% and 25%, respectively, resulting in operating income of $49 million.

接下來看航空領域。在 OEM 產品類別的推動下，第三季營收成長 5%，達到創紀錄的 1.98 億美元。毛利率和營業利益率分別高達 75% 和 25%，營業收入達 4,900 萬美元。

During the quarter, we were ranked #1 in avionics product support by Aviation International News for the 20th consecutive year. Being consistently recognized for unrivaled support year after year highlights our strategic focus on taking care of customers and standing behind our products.

本季度，我們連續 20 年在《航空國際新聞》的航空電子產品支援方面排名第一。年復一年因無與倫比的支持而得到一致認可，突顯了我們的策略重點是照顧客戶和支持我們的產品。

Also, we recently announced a long-term agreement to provide state-of-the-art G3000 integrated flight decks to BETA Technologies for its all-electric aircraft. Year-to-date, revenue from aviation has increased 11%, and we are very pleased with this result.

此外，我們最近還宣布了一項長期協議，為 BETA Technologies 的全電動飛機提供最先進的 G3000 整合式飛行甲板。今年迄今為止，航空收入增加了 11%，我們對此結果感到非常滿意。

As a reminder, we faced significant supply chain constraints in 2022 that shifted revenue into the final quarter of the year, as we caught up on back orders. We do not expect these conditions to repeat in 2023. With this in mind, we are maintaining our 5% growth estimate for the full year, implying that fourth quarter revenue from aviation will decrease approximately 10% year-over-year.

提醒一下，我們在 2022 年面臨嚴重的供應鏈限制，由於我們趕上了延期交貨的訂單，因此將收入轉移到了當年的最後一個季度。我們預計這些情況不會在 2023 年重演。考慮到這一點，我們維持全年 5% 的成長預期，這意味著第四季航空收入將年減約 10%。

Turning to the marine segment. Revenue decreased 7% to $180 million, with decreases across multiple product categories, partially offset by contributions from JL Audio. As many have reported, the marine market has slowed in 2023, but we've been performing better than the market, and our third quarter performance exceeded our expectations. Gross and operating margins were 52% and 13%, respectively, resulting in operating income of $24 million.

轉向海洋領域。營收下降 7%，至 1.8 億美元，多個產品類別的收入下降，但被 JL Audio 的貢獻部分抵消。正如許多人報導的那樣，船舶市場在 2023 年有所放緩，但我們的表現一直好於市場，第三季的表現超出了我們的預期。毛利率和營業利益率分別為 52% 和 13%，營業收入為 2,400 萬美元。

During the quarter, we launched the GPSMAP 9000 series in multiple sizes, including the 27-inch GPSMAP 9227 that was recognized with an innovation award at the recent International Boatbuilders' Exhibition. For the ninth consecutive year, the National Marine Electronics Association named Garmin Manufacturer of the Year, and we received 5 Product of Excellence awards. We were also recognized as the Most Innovative Marine Company by Soundings Trade Only, a leading marine trade publication.

本季度，我們推出了多種尺寸的 GPSMAP 9000 系列，其中包括在最近的國際造船展上榮獲創新獎的 27 吋 GPSMAP 9227。連續第九年被美國國家海洋電子協會評為 Garmin 年度製造商，我們獲得了 5 項卓越產品獎。我們也被領先的海事貿易出版物 Soundings Trade Only 評為最具創新力的海事公司。

We recently completed the acquisition of JL Audio, an iconic premium audio brand that extends our ability to offer highly integrated audio features across all of our marine product lines. Given the better-than-expected third quarter performance and the addition of JL Audio, we're updating our expectations for 2023. We now expect full year marine segment revenue to be approximately flat to the prior year. During the fourth quarter, we expect JL Audio to be approximately 15% of total marine segment sales.

我們最近完成了對 JL Audio 的收購，這是一個標誌性的優質音訊品牌，擴展了我們在所有船舶產品線中提供高度整合的音訊功能的能力。鑑於第三季業績優於預期以及 JL Audio 的加入，我們正在更新 2023 年的預期。我們現在預計全年船舶業務收入將與去年大致持平。在第四季度，我們預計 JL Audio 將佔船舶部門總銷售額的 15% 左右。

Moving finally to the auto OEM segment. Revenue increased 59% to $110 million, a third quarter record with growth primarily driven by increased shipments of domain controllers to BMW. Gross margin was 21% and the operating loss narrowed to $14 million.

最後轉向汽車 OEM 領域。營收成長 59%，達到 1.1 億美元，創下第三季的新紀錄，成長主要是由於BMW域控制器出貨量的增加。毛利率為 21%，營業虧損收窄至 1,400 萬美元。

During the quarter, domain controller deliveries continue to ramp across the BMW lineup. We also experienced strong growth in infotainment categories, with contributions from Yamaha Motorsports and Honda motorcycles. Given the strong year-to-date performance, we now expect auto OEM revenue to grow approximately 40% for the year.

本季度，BMW產品線的網域控制站交付量持續增加。在雅馬哈賽車運動和本田摩托車的貢獻下，我們在資訊娛樂類別中也經歷了強勁增長。鑑於年初至今的強勁表現，我們現在預計今年汽車 OEM 收入將成長約 40%。

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資訊。道格？

Thanks, Cliff. Good morning, everyone.

謝謝，克里夫。大家，早安。

I'll begin by reviewing our third quarter financial results, provide comments on the balance sheet, cash flow statement, taxes and updated guidance.

我將首先回顧我們第三季度的財務業績，提供對資產負債表、現金流量表、稅收和最新指導的評論。

We posted revenue of $1.278 billion for the third quarter, representing a 12% increase year-over-year. Gross margin was 57%, a 100-basis-point decrease from the prior year quarter. The decrease was primarily due to segment mix, partially due to product mix in certain segments.

我們第三季的營收為 12.78 億美元，年增 12%。毛利率為 57%，較去年同期下降 100 個基點。下降主要是由於細分市場組合所致，部分是由於某些細分市場的產品組合所致。

Operating expense as a percentage of sales was 35.9%, a 190-basis-point decrease. Operating income was $270 million, a 13% increase. Operating margin was 21.2%, a 20-basis-point increase. Our GAAP EPS was $1.34. Our pro forma EPS was $1.41, a 14% increase from the prior year.

營運費用佔銷售額的百分比為 35.9%，下降 190 個基點。營業收入為 2.7 億美元，成長 13%。營業利益率為 21.2%，成長 20 個基點。我們的 GAAP 每股收益為 1.34 美元。我們預計每股收益為 1.41 美元，比上年增長 14%。

Next, we'll look at our third quarter revenue by segment and geography. In the third quarter, we achieved record consolidated revenue and growth in 4 of our 5 segments, led by double-digit growth in both the fitness and auto OEM segments. By geography, Americas and EMEA regions achieved double digit growth of 12% and 15%, respectively, while the APAC region achieved solid growth of 8%.

接下來，我們將按細分市場和地理位置查看第三季的收入。第三季度，我們在 5 個細分市場中的 4 個細分市場中實現了創紀錄的綜合收入和成長，其中健身和汽車 OEM 細分市場均實現了兩位數成長。按地區劃分，美洲和歐洲、中東和非洲地區分別實現了 12% 和 15% 的兩位數增長，而亞太地區則實現了 8% 的穩健增長。

Looking next at operating expenses. Third quarter operating expenses increased by $27 million or 6%. Research and development increased $13 million year-over-year, primarily due to engineering personnel costs. SG&A increased $12 million compared to prior quarter, primarily to increases in personnel-related expenses, information technology costs. Advertising expense increased primarily -- approximately $2 million, primarily due to higher co-op advertising spend.

接下來看看營運費用。第三季營運費用增加 2,700 萬美元，成長 6%。研究與開發年增 1,300 萬美元，主要是工程人員成本。 SG&A 與上一季相比增加了 1200 萬美元，主要是由於人員相關費用和資訊技術成本的增加。廣告費用增加主要是—約 200 萬美元，主要是因為合作廣告支出增加。

A few highlights on the balance sheet, cash flow statement and taxes. In the quarter, with cash and marketable securities, approximately $2.8 billion. Accounts receivable of $721 includes the addition of JL Audio and was in line with the year-over-year increase in sales. Inventory balance increased year-over-year to $1.4 billion to execute our strategy to optimize inventory reductions to our consumer inventory more than offsetting increases associated with our auto OEM business, with the addition of JL audio inventory.

資產負債表、現金流量表和稅收的一些要點。本季度，現金和有價證券約為 28 億美元。應收帳款為 721 美元，其中包括 JL Audio 的增加，與銷售額的同比增長一致。庫存餘額年增至 14 億美元，以執行我們的策略，以優化消費者庫存的減少，這不僅抵消了與我們的汽車 OEM 業務相關的增加，還增加了 JL 音訊庫存。

During the third quarter of 2023, we generated free cash flow of $312 million, a $28 million increase from the prior year quarter, primarily due to a lower use of cash purchase of inventory. Capital expenditures for the third quarter were $46 million. We now expect full year 2023 free cash flow to be approximately $900 million.

2023 年第三季度，我們產生了 3.12 億美元的自由現金流，比去年同期增加了 2,800 萬美元，這主要是由於現金購買庫存的使用減少。第三季的資本支出為4600萬美元。我們現在預計 2023 年全年自由現金流約為 9 億美元。

During the third quarter, we paid dividends of approximately $140 million. Also, we purchased $9 million of company stock and approximately $18 million remaining at quarter end share purchase program which was authorized through December of 2023. Pro forma effective tax rate was 7.2% compared to 4.3% in the prior year quarter. Year-over-year increase was primarily due to income mix by jurisdiction.

第三季度，我們支付了約 1.4 億美元的股息。此外，我們還購買了 900 萬美元的公司股票，以及截至 2023 年 12 月授權的季度末股票購買計劃剩餘的約 1800 萬美元。預計有效稅率為 7.2%，而去年同期為 4.3%。年比增長主要是由於各司法管轄區的收入組合所致。

Turning next to our full year guidance. We estimate revenue of approximately $5.150 billion compared to our previous guidance of $5.50 billion. We expect gross margin to be approximately 56.7% compared to our previous guidance of 57.2%. The change is primarily due to the anticipated full year segment mix, the mix of increased sales of newly acquired JL Audio, which has expected gross margin lower than the marine segment average. We expect an operating margin of approximately 19.8%. Also, we expect a pro forma effective tax rate of 8.5%, which is unchanged from our previous guidance. This results in expected pro forma earnings per share of approximately $5.25, which includes approximately $0.05 dilutive impact related to a newly acquired JL Audio, which is unfavorably impacted by effects of purchase accounting.

接下來是我們的全年指導。我們預計收入約為 51.5 億美元，而先前的指引為 55 億美元。我們預計毛利率約為 56.7%，而我們先前的指導值為 57.2%。這一變化主要是由於預期的全年細分市場組合，即新收購的 JL Audio 銷售額增加的組合，預計毛利率低於船舶細分市場的平均水平。我們預計營業利潤率約為 19.8%。此外，我們預計預計有效稅率為 8.5%，與我們先前的指導一致。這導致預計每股收益約為 5.25 美元，其中包括與新收購的 JL Audio 相關的約 0.05 美元的稀釋影響，該影響受到購買會計影響的不利影響。

This concludes our formal remarks. Sarah, can you please open the line for Q&A?

我們的正式發言到此結束。莎拉，您可以打開問答線嗎？

(Operator Instructions) Your first question comes from the line of Erik Woodring with Morgan Stanley.

（操作員說明）您的第一個問題來自摩根士丹利的埃里克·伍德林（Erik Woodring）。

Maybe if we just start at higher level. Cliff, you've raised the auto OEM growth rate guidance twice in the last 2 quarters. For this year, you're now anticipating 40% growth. Does that stronger 2023 outlook for auto OEM imply that you kind of are already ahead of your $800 million 2025 target?

也許如果我們從更高的水平開始的話。 Cliff，您在過去兩個季度兩次提高了汽車原始設備製造商的成長率指引值。今年，您預計將成長 40%。汽車 OEM 2023 年的強勁前景是否意味著您已經提前實現了 2025 年 8 億美元的目標？

Like is this pull forward? If you could just help us kind of unpackage, how we should be thinking about the trajectory of this business over multiple years? How that's changed given your outperformance this year? And then I have a follow-up.

這是向前拉嗎？如果您能幫助我們解開包裝，我們該如何思考這項業務多年來的發展軌跡？鑑於您今年的出色表現，情況有何變化？然後我有一個後續行動。

Erik, I think the demand from the automakers basically is certainly not a guarantee at the beginning of the year. So we make estimates based on their best estimates, but things ebb and flow throughout the year. So this really is just the tweaking of their build plans and their demands for our product as the year goes along. And I don't really see this as a pull forward or puts or takes from the overall growth outlook that we've provided.

Erik，我認為汽車製造商的需求基本上肯定不是年初的保證。因此，我們根據他們的最佳估計進行估計，但全年情況都會有起有落。所以這實際上只是隨著時間的推移他們的建造計劃和對我們產品的需求的調整。我並不真正認為這是對我們提供的整體成長前景的推動或調整。

Okay. That's helpful. And then maybe I'll stay on auto OEM for my second question. And we're seeing some nice improvement in your auto OEM OpEx base. Gross margins were down, I think, 240 basis points sequentially, but you saw operating margins improved more than 400 basis points sequentially.

好的。這很有幫助。然後也許我會繼續討論汽車原始設備製造商的第二個問題。我們看到您的汽車 OEM 營運支出基礎有了一些不錯的改善。我認為，毛利率環比下降了 240 個基點，但營業利潤率較上季提高了 400 個基點以上。

So, I guess, if I do the simple math and say, if you continue this trajectory, you could see the auto OEM business turn to an operating profit by midyear next year. Just curious if that's how we should be thinking about kind of the linearity of the auto OEM margin improvement? Or how we should be -- how you would change kind of the math that I just laid out or the trajectory that you guys are thinking about?

所以，我想，如果我做一個簡單的計算，如果你繼續這個軌跡，你可以看到汽車 OEM 業務在明年年中轉為營業利潤。只是好奇我們是否應該這樣考慮汽車原始設備製造商利潤率改善的線性？或者我們應該如何——你們將如何改變我剛剛提出的數學或你們正在考慮的軌跡？

Yes. At the beginning of the year, we said that our target was for profitability in 2024, and we're still progressing towards that. I'm not sure that I would put a lot of weight in the linearity because with model changeovers and new models coming on and the timing of those being somewhat unpredictable. The linearity from quarter-to-quarter probably doesn't allow to extrapolate directly to mid next year, but we'll provide more updates at the beginning of 2024 when we have a chance to evaluate the full year.

是的。今年年初，我們表示我們的目標是在 2024 年實現盈利，目前我們仍在朝著這個目標前進。我不確定我是否會在線性方面給予很大的重視，因為隨著模型的轉換和新模型的出現，以及這些模型的出現時間有些不可預測。從季度到季度的線性可能不允許直接推斷到明年中期，但我們將在 2024 年初提供更多更新，屆時我們有機會評估全年。

Your next question comes from the line of Joseph Cardoso with JPMorgan.

你的下一個問題來自摩根大通的約瑟夫·卡多佐。

So first one for me is just on the marine business. Last quarter, you talked about softness building in that business on the back of general macro headwinds and the strong couple of years you guys had. I guess can you just clarify how that has tracked versus your expectations 90 days ago, just given that now you're including JL in the business mix? And just any updated thoughts on that business on a go-forward basis as you think about a trough? And then I have a follow-up.

所以對我來說第一個就是關於海運業務。上個季度，您談到了在總體宏觀逆風和你們過去幾年的強勁表現的背景下該業務的疲軟。我想您能否澄清一下，鑑於您現在將 JL 納入業務組合，您 90 天前的預期情況如何？當您考慮低谷時，您對該業務有什麼最新的想法嗎？然後我有一個後續行動。

So definitely, at the beginning of last quarter, July into August, there was real marked seasonality, I guess, is what we would say in the marine activity. And I would probably attribute that, at this point, looking back as being back to the norms that we saw pre-pandemic for deep seasonality in the early part of Q3.

因此，毫無疑問，在上個季度初，即七月到八月，我想，這就是我們在海洋活動中所說的真正明顯的季節性。在這一點上，我可能會將其歸因於回到了我們在第三季初期看到的疫情前深度季節性的規範。

As we moved into September, things definitely got hotter in the market. And then we acquired JL towards the back half of the month of September. So, things progressively got better as we went along, but the headwinds that I've mentioned about the marine market continued to be out there. The market has softened. I think everyone is reporting that and the behaviors of customers have definitely changed from what they were a year or 2 ago.

隨著進入九月，市場肯定變得更加熱門。然後我們在九月下旬收購了 JL。因此，隨著我們的進展，情況逐漸好轉，但我提到的關於海洋市場的阻力仍然存在。市場已經疲軟。我認為每個人都在報告這一點，客戶的行為與一兩年前相比肯定發生了變化。

That's super helpful. And then just relative to the JL acquisition itself, how are you thinking about the levers you have to drive margins in that business to track to the marine level average, post or pre the acquisition? Is it more of a volume play for you? Or do you have additional actions you can take to drive margins to improve in that business? And any thoughts around time line of when you can kind of get those margins up to like the historical corporate average?

這非常有幫助。然後，就 JL 收購本身而言，您如何考慮在收購後或收購前提高該業務利潤率以追蹤海平面平均水平的槓桿？對你來說，這更像是一種音量播放嗎？或者您可以採取其他措施來提高該業務的利潤率？關於何時可以將這些利潤率提高到歷史公司平均水平，您有什麼想法嗎？

I think, in general, this category probably will still be on the lower end of the overall segment. But we do have ways that we can improve it over time. As you say, leverage is one of those things, leverage in terms of our overall purchasing power as a company as well as operational leverage and efficiencies and taking advantage of the broader Garmin infrastructure. So those are the things we're focused on as we get immediately into this. And over time, we should be able to bring it up closer to what our audio categories are currently.

我認為，總的來說，這個類別可能仍處於整個細分市場的低端。但隨著時間的推移，我們確實有辦法改進它。正如您所說，槓桿就是其中之一，槓桿是我們作為一家公司的整體購買力、營運槓桿和效率以及利用更廣泛的 Garmin 基礎設施的槓桿。這些都是我們立即著手處理的重點。隨著時間的推移，我們應該能夠使其更接近我們當前的音訊類別。

Your next question comes from the line of George Wang with Barclays.

你的下一個問題來自喬治·王與巴克萊銀行的對話。

Just kind on the buyback and capital allocation, just given the kind of cash balance over $2.8 billion. Just noticed kind of buyback wasn't that large last quarter. Just curious if the philosophy, kind of thinking, has changed just on the capital allocation front, especially on the buyback and also additional kind of bolt-on, if any, on the horizon?

考慮到現金餘額超過 28 億美元，回購和資本配置很友善。剛剛注意到上個季度的回購規模並沒有那麼大。只是好奇這種理念、思維方式是否在資本配置方面發生了變化，特別是在回購方面，以及即將出現的額外補充（如果有的話）方面？

Yes. Our priorities for cash were the same. Those priorities are, obviously, reliable dividends; second of which is investments back in our business, primarily CapEx weighted to build our infrastructures; and third of which relates to our strategic acquisitions such as JL Audio. And then also due to a share repurchase.

是的。我們對現金的優先考慮是相同的。顯然，這些優先事項是可靠的股息；第二個是對我們業務的投資，主要是用於建設我們的基礎設施的資本支出；第三個與我們的策略性收購有關，例如 JL Audio。然後也是由於股票回購。

So as it relates to share repurchases, we do have an authorization through the end of this year, about $18 million there. And that's -- and we have our purchases really based upon the market, the business conditions as such. So similar type of priorities for allocations and consistency of how we've gone through the share buybacks.

因此，就股票回購而言，我們確實獲得了截至今年年底的授權，金額約為 1800 萬美元。那就是——我們的採購其實是基於市場、商業條件本身。因此，我們在股票回購方面的分配優先順序和一致性是相似的。

Okay. Got you. I just had a quick follow-up. Just in terms of outdoor, it seems kind of tougher compare year-over-year basis, kind of timing for the product launch. Just curious if you can double collect on the segment versus your prior expectation, maybe a little bit weaker on the margin? Just curious, any refresh on the horizon for the fenix -- next fenix watch?

好的。明白你了。我剛剛進行了快速跟進。就戶外而言，與去年同期相比，產品發布的時機似乎更加困難。只是好奇你是否可以在該細分市場上與你之前的預期相比加倍收取費用，也許利潤會稍弱一些？只是好奇，fenix 的地平線上是否有任何更新——下一款 fenix 手錶？

Yes. I think, George, it was similar to what we mentioned in our remarks that last year was an incredible year with the introduction of the fenix 7 and epix. And this year, the timing of our refreshes of that product line came later than we had anticipated. So definitely comping against what we saw in 2022 was difficult.

是的。我認為，喬治，這與我們在發言中提到的類似，去年是 fenix 7 和 epix 推出的令人難以置信的一年。今年，我們更新該產品線的時間比我們預期的要晚。因此，與我們在 2022 年看到的情況相比絕對是困難的。

But we are positive about our new product lines. They've been received well and generated growth in this last quarter. And we're seeing strength across other product lines in this segment as well. In terms of future outlook, we don't really comment on the next generations, but we're constantly refreshing our product road maps. And I would anticipate next year to have very strong product releases.

但我們對我們的新產品線持樂觀態度。它們受到好評並在上個季度實現了成長。我們也看到了該領域其他產品線的優勢。就未來展望而言，我們不會真正評論下一代產品，但我們會不斷刷新我們的產品路線圖。我預計明年會有非常強勁的產品發表。

Your next question comes from the line of Ron Epstein of Bank of America.

你的下一個問題來自美國銀行的羅恩愛潑斯坦。

This is Jordan on for Ron. So I just had a quick question. Could you guys give any commentary on current backlog and then channel inventory that you guys are seeing going into like the holidays?

這是喬丹為榮恩代言的。所以我有一個簡單的問題。你們能否對當前積壓的訂單發表任何評論，然後引導你們看到的庫存情況，例如假期？

Yes. I think backlog-wise, Jordan, we aren't a business that really has a long backlog because retailers tend to put in their orders closer to when they need them. But the indications that we have from retailers are that they see potential for the fourth quarter selling season. They're preparing for a good season, and the channel inventories up to this point have been adequate or lean even. So they're gearing up for a good shopping season.

是的。我認為就積壓而言，喬丹，我們並不是一家真正有長期積壓的企業，因為零售商傾向於在更接近需要的時候下訂單。但我們從零售商那裡得到的跡象表明，他們看到了第四季度銷售旺季的潛力。他們正在為一個好的季節做準備，到目前為止，通路庫存已經充足或甚至不足。因此，他們正在為一個良好的購物季節做準備。

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

您的下一個問題來自克利夫蘭研究中心的 Ben Bollin。

Cliff or Doug, I'm curious on your bigger picture perspective on outdoor and fitness gross margins. If you look back pre-COVID, we still haven't quite recovered to the gross margin level seen in '17 and '18. Just curious how you think about the opportunity to return to those levels in the higher-end wearables categories? And then I have a follow-up.

克里夫或道格，我很好奇你們對戶外和健身毛利率的宏觀看法。如果你回顧一下新冠疫情之前的情況，我們仍然沒有完全恢復到 17 年和 18 年的毛利率水準。只是好奇您如何看待在高階穿戴裝置類別中重返這些水平的機會？然後我有一個後續行動。

Yes. I think there's so much has happened between then and now that it would be hard to really build a bridge from where we were back then in terms of margin structure to now. I would say that the product mix probably has a big part of that. And so as the segment ebbs and flows in terms of various categories, the gross margin will vary accordingly.

是的。我認為從那時到現在發生了太多事情，很難真正從我們當時的利潤結構到現在建立起一座橋樑。我想說，產品組合可能佔其中很大一部分。因此，隨著該細分市場在不同類別方面的起伏，毛利率也會隨之改變。

Okay. And then the other question for you, Cliff, is a bigger picture also. How you think about more opportunities with recurring revenue? You've talked about lower arm and in reach, and it seems like that's expanded. Curious if you see other opportunities to pursue maybe M&A in the app space or other content space, introduce your own? Just high-level thoughts on that.

好的。克里夫，你的另一個問題也是一個更大的問題。您如何看待更多經常性收入的機會？你談到了下臂和伸展範圍，看起來它已經擴大了。好奇您是否在應用程式空間或其他內容空間中看到了其他尋求併購的機會，請介紹一下您自己的機會？只是對此的高層想法。

We're looking across all of the things that we offer as a company, including content and are looking for ways that we can monetize that into value-added services for our customers. Some recent examples of that are marine chart subscriptions that come with our chartplotters and also outdoor maps that we can bundle with all of our products really that focus on the outdoor segment. So we're looking more organically at that and not necessarily at M&A, but we do have a lot of opportunities where we can leverage.

我們正在審視我們作為一家公司提供的所有東西，包括內容，並正在尋找將其貨幣化為客戶增值服務的方法。最近的一些例子是我們的海圖儀附帶的海洋圖表訂閱，以及我們可以與真正專注於戶外領域的所有產品捆綁在一起的戶外地圖。因此，我們正在更有機地關注這一點，不一定是併購，但我們確實有很多可以利用的機會。

Your next question comes from the line of David MacGregor with Longbow Research.

您的下一個問題來自 Longbow Research 的 David MacGregor。

This is Joe Nolan on for David. So I'm not expecting any sort of quantitative guidance or anything, but I was just hoping you could talk high level about some of your initial thoughts for 2024? And just maybe how conversations are going with customers regarding 2024?

這是大衛的喬諾蘭。所以我不期待任何形式的定量指導或任何東西，但我只是希望你能高水準地談談你對 2024 年的一些初步想法？或許與客戶關於 2024 年的對話進度如何？

Yes. I think, unfortunately, I really can't provide much color because, as I mentioned earlier, we're -- most of our business lines are shorter cycle, meaning that retailers are focused now on Q4. And we really haven't had a lot of discussions around what they're thinking for next year.

是的。不幸的是，我認為我真的無法提供太多信息，因為正如我之前提到的，我們的大多數業務線週期較短，這意味著零售商現在專注於第四季度。我們確實還沒有就他們明年的想法進行很多討論。

So again, I would just look generally at the momentum we have right now and generally, favorable indications we're getting for fourth quarter as indications that hopefully, business will continue to be good in 2024.

因此，我會再次整體關注我們目前的勢頭，總體而言，我們在第四季度獲得的有利跡象表明，希望 2024 年業務將繼續保持良好勢頭。

Got it. Okay. And then just a quick follow-up. With the UAW strike, just can you talk about what sort of -- what impact, if any, that's having on your guys business?

知道了。好的。然後進行快速跟進。對於 UAW 罷工，您能否談談這對您公司的業務產生了什麼樣的影響（如果有的話）？

Yes, there's really no impact that we've had from that event. Most of our OEM customers are outside of the Big 3 that were affected by that. So that's not something that's affected us.

是的，那次事件確實沒有對我們產生任​​何影響。我們的大多數 OEM 客戶都不屬於受此影響的三大巨頭。所以這不會影響我們。

Your next question comes from the line of Noah Zatzkin with KeyBanc.

您的下一個問題來自 KeyBanc 的 Noah Zatzkin。

Maybe just one for me on the stronger-than-expected trends in fitness. Hoping you could provide some color around the drivers? And maybe any larger trends at play as you see them that are driving better-than-expected performance in fitness, maybe relative to expectations a quarter or 2 ago? Then I have a quick follow-up.

也許這對我來說只是關於健身趨勢強於預期的一個例子。希望你能為驅動程式提供一些顏色嗎？也許有任何更大的趨勢正在發揮作用，正如您所看到的那樣，這些趨勢正在推動健身表現好於預期，也許相對於一兩個季度前的預期？然後我會進行快速跟進。

Yes. The big driver really is, as we mentioned in the remarks, wearables have been very strong. And that's across all of the wearable families in fitness, from running watches to the advanced wearables to even basic wearables. So everything there has been strong.

是的。正如我們在評論中提到的，最大的推動力確實是穿戴式裝置非常強大。這適用於健身領域的所有可穿戴設備，從跑步手錶到高級可穿戴設備，甚至是基本可穿戴設備。所以那裡的一切都很強大。

Other categories in the segment were also very strong. We saw strength across the whole segment really. So it definitely was much better than what we had anticipated earlier in the year, as our new products came to market and they were well received.

該細分市場的其他類別也非常強勁。我們確實看到了整個細分市場的實力。因此，隨著我們的新產品上市並受到好評，這肯定比我們今年早些時候的預期要好得多。

And then maybe just one on marine EBIT margins. I think 13% down sequentially quite a bit. So just hoping you could provide some color on kind of the puts and takes there? And then how to think about margins relative to historical next quarter given the addition of JL Audio?

然後也許只是海運息稅前利潤率的一項。我認為 13% 比上一季下降了不少。所以只是希望你能為那裡的看跌期權和看跌期權提供一些顏色？那麼，考慮到 JL Audio 的加入，如何考慮下個季度相對於歷史水準的利潤率？

Yes. So relating to those margins, obviously, the decline in sales had an impact on us, obviously, deleveraging on our expenses. Also relating to the gross margins, we did -- as we previously talked about, with JL Audio in there, that's a lower gross margin than the marine average. So that did have an impact on it also.

是的。因此，就這些利潤而言，顯然，銷售額的下降對我們的支出去槓桿化產生了影響。同樣與毛利率有關的是，正如我們之前談到的，JL Audio 的毛利率低於海洋平均水平。所以這也確實對其產生了影響。

So it's really just a combination of that gross margin and some product mix in our marine organic business there as well as the sales output. And on an ongoing basis, as it relates to JL Audio, we should see -- as Cliff talked about, as it relates to our gross margins, they are lower. So there'll probably be some dilution of that of the go, but hopefully, we'll be able to get some synergies and opportunities, get those improved as we move along.

因此，這實際上只是毛利率和我們海洋有機業務中的一些產品組合以及銷售產量的組合。在持續的基礎上，與 JL Audio 相關，我們應該看到 - 正如 Cliff 所說，與我們的毛利率相關，它們較低。因此，可能會稀釋，但希望我們能夠獲得一些協同效應和機會，並在我們前進的過程中得到改進。

Your next question comes from the line of Ivan Feinseth with Tigress Financial Partners.

您的下一個問題來自 Tigress Financial Partners 的 Ivan Feinseth。

Congratulations again on the great results and the increased outlook. On the acquisition of JL Audio, you talked about expanding the marine audio, but what about -- do you think some opportunities for you to integrate this in automotive OEM, audio? And then recently, another company launched a headset, a bone induction headset. Do you think there's opportunity to expand in some of the consumer product audio areas?

再次恭喜您取得的巨大成果和更廣闊的前景。在收購 JL Audio 時，您談到了擴展船用音頻，但是您認為您是否有機會將其整合到汽車 OEM 音頻中？然後最近，另一家公司推出了一款耳機，骨頭感應耳機。您認為某些消費產品音訊領域有擴展的機會嗎？

JL Audio already has a fairly broad market reach in -- across several markets, including, of course, marine is one of the biggest. But they also have products for aftermarket audio as well as power sports and home audio.

JL Audio 已經在多個市場中擁有相當廣泛的市場影響力，當然，船舶市場是最大的市場之一。但他們也有售後音訊以及動力運動和家庭音響產品。

And so consequently, they're pretty diverse, which is exciting, gives us some opportunities to explore some new areas. And I think each one of those has their own nuances. I think aftermarket audio is a very specific kind of play, but the expansion in power sports and also home audio are new areas of business for Garmin.

因此，它們非常多樣化，這令人興奮，為我們提供了探索一些新領域的機會。我認為其中每一項都有自己的細微差別。我認為售後音訊是一種非常特殊的遊戲，但動力運動和家庭音響的擴展是 Garmin 的新業務領域。

And if you went into home audio with them, would you be rebranding? It would be a Garmin brand or a Garmin JL brand?

如果您與他們一起進入家庭音響領域，您會重塑品牌嗎？是 Garmin 品牌還是 Garmin JL 品牌？

Well, they're already in home audio. So they're currently selling systems right now. So we'll refer some things for home theater systems. And so we intend to continue those business lines and invest in an appropriate level of innovation across their various product lines.

嗯，它們已經出現在家庭音響中了。所以他們目前正在銷售系統。因此，我們將參考一些關於家庭劇院系統的內容。因此，我們打算繼續這些業務線，並在其各種產品線中進行適當程度的創新投資。

Very good. And then on the introduction of the new MARQ Carbon. So what kind of like uptake are you seeing from, let's say, people new to the brand or upgrading existing watches? And also because of the much higher price points, are you looking to go into like a different type of marketing platform or different retail distribution for those watches?

非常好。然後介紹新的MARQ Carbon。那麼，您從新接觸該品牌或升級現有手錶的人那裡看到了什麼樣的吸收？而且由於價格高得多，您是否希望為這些手錶進入不同類型的行銷平台或不同的零售分銷？

I think MARQ Carbon fits in nicely with our overall high-end product line. If you look, especially in adventure watches, starting with the fenix and epix mine, these are premium launches anyway. That customers do appreciate unique materials and unique designs, and that's why we've been successful in carving out our own niche in this huge market. I think as we look at customers and the registrations, they tend to vary by product line depending on what it is, but we see anywhere from mostly new customers coming into the category to repeat customers. But either way, we're pleased with the ability to offer a broad product line at low end to high end to cover as many customers as we can.

我認為 MARQ Carbon 非常適合我們的整體高階產品線。如果你仔細觀察，尤其是探險手錶，從 fenix 和 epix mine 開始，你會發現這些都是高階手錶。客戶確實欣賞獨特的材料和獨特的設計，這就是為什麼我們成功地在這個巨大的市場中開闢了自己的利基。我認為，當我們觀察客戶和註冊時，它們往往會因產品線的不同而有所不同，但我們看到，從大多數進入該類別的新客戶到回頭客。但無論哪種方式，我們都很高興能夠提供從低端到高端的廣泛產品線，以覆蓋盡可能多的客戶。

And then on the new ECG functionality on the fenix Pro line, is that because you're able to integrate because of the more advanced sensors that are now in the Pro line? Or how broad can you go, let's say, with that functionality?

然後，關於 fenix Pro 系列上的新 ECG 功能，是因為您能夠整合現在 Pro 系列中更先進的感測器嗎？或者說，您可以使用該功能有多廣泛？

I think that's an indication of the platform capability that we have. We have sensor technology that we design in platforms, and we're able to move that platform across all different kinds of product lines. And so that the fenix and the epix Pro series are the ones that receive that latest platform, and we were able to then launch the ECG app for those products as well.

我認為這顯示了我們擁有的平台能力。我們擁有在平台中設計的感測器技術，並且我們能夠將該平台應用於所有不同類型的產品線。因此 fenix 和 epix Pro 系列都是接收最新平台的產品，然後我們也能夠為這些產品推出 ECG 應用程式。

Then one last question. Do you think that there's some opportunity at some point to incorporate the SOS functionality of inReach within a watch, just for that one feature?

然後是最後一個問題。您是否認為在某個時候有機會將 inReach 的 SOS 功能整合到手錶中，只是為了這項功能？

Well, I can't comment on specific features, but we're constantly working on innovations across our product line. So I always feel like there's many more great ideas that we need to be working on and lots of opportunity ahead.

嗯，我無法評論具體功能，但我們一直致力於整個產品線的創新。所以我總覺得我們還有更多很棒的想法需要努力，前方還有很多機會。

(Operator Instructions) Your next question is a follow-up from Erik Woodring of Morgan Stanley.

（操作員說明）您的下一個問題是摩根士丹利 (Morgan Stanley) 的埃里克·伍德林 (Erik Woodring) 提出的後續問題。

Awesome. I just wanted to ask you, Cliff, because you brought it up earlier, just about your visibility into kind of consumer holiday demand this year. What trends you're seeing that are emerging that will influence your outlook?

驚人的。我只是想問你，克里夫，因為你之前提到過，關於你對今年消費者假期需求的了解。您看到哪些正在出現的趨勢會影響您的觀點？

And I asked because the guide implies about 10% sequential growth in 4Q for revenue versus normal historical seasonality close to 15% to 20%. So just what the puts and takes are why potentially you might be seeing some subseasonal growth? And if it's a reflection of the holidays in consumer demand? Or if that is the kind of nonconsumer pieces of the business?

我問這個問題是因為指南暗示第四季營收環比成長約 10%，而正常的歷史季節性成長接近 15% 至 20%。那麼，看跌期權和賣出期權是為什麼您可能會看到一些次季節增長的原因呢？這是否反映了假期的消費者需求？或者這是該業務的非消費者部分？

Yes, I think every year is probably different. As I mentioned earlier, retailers are positive about what they are anticipating for the fourth quarter. So we're definitely gearing up for that. And when we provide these estimates, we definitely want to provide estimates that have high confidence in. And so that is how we approach the guidance.

是的，我認為每年可能都會有所不同。正如我之前提到的，零售商對第四季的預期持樂觀態度。所以我們肯定正在為此做好準備。當我們提供這些估計時，我們肯定希望提供具有高度可信度的估計值。這就是我們處理指導的方式。

Your next question comes from the line of Ron Epstein with Bank of America.

你的下一個問題來自美國銀行的 Ron Epstein。

A quick question, too, on aviation. Are you guys seeing any changes in demand for Beachjet products? I know you guys, in the press release, you said that it was driven by the OEM sales.

還有一個關於航空的簡單問題。你們看到 Beachjet 產品的需求有什麼改變嗎？我知道你們，在新聞稿中，你們說這是由 OEM 銷售推動的。

Yes. I think all of the people who report business jet activity are definitely saying that if activity remains strong. They're sitting on big backlogs that they're trying to fill. And they haven't dramatically increased production rates, meaning that there's a large amount of backlog that has to be worked through over the next few years.

是的。我認為所有報告公務機活動的人肯定都在說，如果活動保持強勁的話。他們正試圖填補大量積壓的訂單。而且他們並沒有大幅提高生產力，這意味著未來幾年必須處理大量積壓訂單。

So as a result, that market continues to show promise as we work through that. And I would probably leave the forward speculation about aircraft and demand to them. But in general, there seems to be encouraging demand across all business jet platforms and customers still want these products.

因此，在我們努力解決這個問題的過程中，這個市場繼續展現出希望。我可能會將有關飛機和需求的前瞻性猜測留給他們。但總的來說，所有公務機平台的需求似乎都令人鼓舞，客戶仍然需要這些產品。

There are no further questions at this time. I will turn the call back to Teri Seck for closing remarks.

目前沒有其他問題。我將把電話轉回給泰瑞·塞克（Teri Seck）做總結發言。

Thanks, everyone, for your time today. Doug and I will be available for callbacks throughout the day and talking to many of you. Have a wonderful day. Bye.

謝謝大家今天抽出時間。道格和我將全天接受回電並與你們中的許多人交談。祝你有美好的一天。再見。

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

今天的電話會議到此結束。感謝您的加入。您現在可以斷開連線。