台灣國際航電 (GRMN) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Garmin Limited second-quarter 2024 earnings conference call. (Operator Instructions) I will now turn the floor over to you, Teri Seck, Director of Investor Relations. Teri, you may begin.

謝謝你的支持。我叫克里斯蒂娜，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 2024 年第二季財報電話會議。 （操作員指示）我現在將發言權交給您，投資者關係總監 Teri Seck。泰瑞，你可以開始了。

Good morning. We would like to welcome you to Garmin Limited's second-quarter 2024 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 Limited 的 2024 年第二季財報電話會議。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 Limited 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 Limited 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 Limited this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Boessen, Chief Financial Officer and Treasurer. At this time, I would like to turn the call over to Cliff Pemble.

今天早上代表 Garmin Limited 出席會議的是總裁兼執行長 Cliff Pemble；財務長兼財務長 Doug Boessen。此時，我想將電話轉給 Cliff Pemble。

Thank you, Teri, and good morning, everyone. As announced earlier today, Garmin delivered another quarter of outstanding results with double-digit growth in consolidated revenues and operating income. Consolidated revenue increased 14% to $1.51 billion, a new second quarter record with three business segments reporting strong double-digit growth.

謝謝你，泰瑞，大家早安。正如今天早些時候宣布的那樣，Garmin 又一個季度取得了出色的業績，綜合收入和營業收入實現了兩位數的成長。合併營收成長 14%，達到 15.1 億美元，創下第二季新紀錄，三個業務部門均實現兩位數強勁成長。

Gross margin was 57.3%. Operating margin expanded to 22.7%, resulting in operating income of $342 million, up 20% year over year. We reported pro forma EPS of $1.58, up 9% over the prior year, which is a remarkable result considering the significantly higher effective tax rate.

毛利率為57.3%。營業利益率擴大至 22.7%，營業收入達 3.42 億美元，較去年同期成長 20%。我們報告的預計每股收益為 1.58 美元，比上年增長 9%，考慮到有效稅率顯著提高，這是一個了不起的結果。

During the quarter, our global employment surpassed 20,000 associates, and we were recognized as a top employer by Forbes as well as US News and World Report. We are proud of our associates who dedicate themselves to delivering growth through innovative and highly differentiated products.

本季度，我們的全球員工人數超過 20,000 名，並被《富比士》和《美國新聞與世界報道》評為最佳雇主。我們為我們的員工感到自豪，他們致力於透過創新和高度差異化的產品實現成長。

Given our strong performance in the first half of the year, we are updating our full-year guidance. We now anticipate revenue of approximately $5.95 billion and pro forma EPS of $6. Doug will discuss our financial results and outlook in greater detail in a few minutes. But first, I'll provide a few remarks on the performance of each business segments.

鑑於我們上半年的強勁表現，我們正在更新全年指引。我們現在預計營收約為 59.5 億美元，預計每股收益為 6 美元。道格將在幾分鐘內更詳細地討論我們的財務表現和前景。但首先，我將對每個業務部門的表現進行一些評論。

Starting with fitness. Revenue increased 28% to $428 million, primarily driven by wearables. Gross and operating margins improved to 57% and 25% respectively, resulting in operating income of $108 million.

從健身開始。營收成長 28% 至 4.28 億美元，主要由穿戴式裝置推動。毛利率和營業利益率分別提高至 57% 和 25%，營業收入達 1.08 億美元。

During the quarter, we launched the Edge 1050 premium cycling computer with a vivid color touchscreen display, a built-in speaker for audible feedback, and Garmin Pay mobile payments. Also during the quarter, we celebrated Global Running Day, with Garmin users running nearly 11 million miles, beating last year by more than 2 million miles. Given the strong performance of the fitness segment, we are raising our revenue growth estimate to 20% for the year.

本季度，我們推出了 Edge 1050 高級騎行碼表，配備生動的彩色觸控螢幕、內建聲音回饋揚聲器和 Garmin Pay 行動支付功能。同樣在本季度，我們慶祝了全球跑步日，Garmin 用戶跑步了近 1,100 萬英里，比去年增加了超過 200 萬英里。鑑於健身細分市場的強勁表現，我們將今年的營收成長預期提高至 20%。

Moving to outdoor, revenue decreased 2% to $440 million, primarily driven by lower revenue from adventure watches following the anniversary of the fēnix and epix Pro Series launch. Gross and operating margins were 65% and 31%, respectively, resulting in operating income of $136 million.

轉向戶外領域，收入下降 2% 至 4.4 億美元，主要是由於 fänix 和 epix Pro 系列推出週年紀念日後探險手錶收入下降。毛利率和營業利益率分別為 65% 和 31%，營業收入為 1.36 億美元。

During the quarter, we launched the Approach Z30 smart laser rangefinder, with the range relay feature, which sends distance measurements to a compatible Garmin smart watch or the Garmin Golf smartphone app.

本季度，我們推出了 Approach Z30 智慧型雷射測距儀，具有測距中繼功能，可將距離測量結果傳送至相容的 Garmin 智慧型手錶或 Garmin Golf 智慧型手機應用程式。

We also launched our first cellular-based dog tracking collar, the Alpha LTE. This small, rugged device attaches to existing dog collars and pairs with the Alpha app so users can view their dog's movement from a smartphone or an Alpha handheld device.

我們還推出了首款基於蜂窩網路的狗追蹤項圈 Alpha LTE。這款小型、堅固的裝置可連接到現有的狗項圈，並與 Alpha 應用程式配對，以便用戶可以透過智慧型手機或 Alpha 手持裝置查看狗的活動。

The outdoor segment has performed as we anticipated so far this year, and we expect growth to accelerate in the back half of the year with new product launches. As such, we are maintaining our 7% revenue growth estimate for 2024.

今年到目前為止，戶外市場的表現符合我們的預期，我們預計隨著新產品的推出，今年下半年的成長將加速。因此，我們維持 2024 年 7% 的營收成長預期。

Looking next at aviation, revenue was relatively flat in the second quarter at $218 million. We continue to see growth in OEM product categories, while the aftermarket declined in an ongoing normalization following the somewhat uneven results of the prior year. Gross and operating margins were 74% and 23%, respectively, resulting in operating income of $50 million.

接下來看航空業，第二季營收相對持平，為 2.18 億美元。我們繼續看到 OEM 產品類別的成長，而售後市場在去年業績有些不平衡的情況下，在持續正常化中下降。毛利率和營業利益率分別為 74% 和 23%，營業收入為 5,000 萬美元。

For the ninth consecutive year, we were recognized by Embraer as the best supplier, most recently in the electrical and electrical systems category for our G3000 Prodigy Touch flight deck in the Phenom 100 EV and Phenom 300E. The aviation segment has performed as expected so far this year, and we are maintaining our estimate of flat revenue in 2024.

我們連續第九年被巴西航空工業公司評為最佳供應商，最近一次是在飛鴻 100 EV 和飛鴻 300E 中的 G3000 Prodigy Touch 飛行甲板的電氣和電氣系統類別中。今年到目前為止，航空業務的表現符合預期，我們維持 2024 年收入持平的估計。

Turning to the marine segment, revenue increased 26% to $273 million, primarily driven by the acquisition of JL Audio. Excluding JL Audio, revenue increased approximately 7%, outperforming widely reported market trends. Gross and operating margins improved to 54% and 22%, respectively, resulting in operating income of $60 million.

轉向船舶領域，營收成長 26% 至 2.73 億美元，主要得益於收購 JL Audio。不包括 JL Audio 在內，營收成長約 7%，優於廣泛報導的市場趨勢。毛利率和營業利益率分別提高至 54% 和 22%，營業收入達 6,000 萬美元。

We recently expanded the Force Kraken trolling motor series, adding a 48-inch shaft length to accommodate a broader range of both sizes. We also expanded our ice fishing offerings with the Panoptix PS-22 Ice Fishing Bundle, an ultra-portable live sonar solution for winter fishing, which won a best of category award at this year's ICAST, the world's largest sportfishing trade show. This is our fourth consecutive win in the ice fishing category and seventh consecutive award at ICAST.

我們最近擴展了 Force Kraken 拖釣馬達系列，增加了 48 英寸的軸長度，以適應更廣泛的兩種尺寸。我們還透過Panoptix PS-22 Ice Fishing Bundle 擴展了我們的冰釣產品，這是一種用於冬季釣魚的超便攜式即時聲納解決方案，在今年的ICAST（世界上最大的釣魚運動貿易展）上贏得了最佳類別獎。這是我們在冰釣類別中連續第四次獲獎，也是 ICAST 連續第七次獲獎。

Additionally in the quarter, we were once again selected as an exclusive supplier to Independent Boatbuilders Incorporated through 2029 for both traditional marine electronics as well as audio equipment. Given the strong performance of the marine segment, we are raising our revenue growth estimate to 15% for the year.

此外，在本季度，我們再次被選為 Independent Boatbuilders Incorporated 的獨家供應商，直至 2029 年，提供傳統船舶電子產品和音訊設備。鑑於海運業務的強勁表現，我們將今年的營收成長預期提高至 15%。

And moving finally to the auto OEM segment, revenue increased 41% to $147 million, primarily driven by growth in domain controllers. Gross margin was 16%, and the operating loss decreased to $12 million.

最後轉向汽車 OEM 領域，營收成長 41% 至 1.47 億美元，這主要是由網域控制器的成長所推動的。毛利率為 16%，營業虧損降至 1,200 萬美元。

Our auto OEM segment continues to be recognized as an outstanding partner. We recently received the 2024 Global Award for Excellence in Technology and Development from Yamaha Motor for our motorcycle infotainment solutions.

我們的汽車 OEM 部門繼續被公認為傑出的合作夥伴。最近，我們的摩托車資訊娛樂解決方案榮獲雅馬哈汽車頒發的 2024 年全球卓越技術與開發獎。

Auto OEM has performed as expected so far this year, and we are maintaining our 50% revenue growth estimate for 2024. So that concludes my remarks. Next, Doug will walk you through additional details on our financial results. Doug?

今年到目前為止，汽車 OEM 的表現符合預期，我們維持 2024 年 50% 營收成長的預期。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. I'll begin by reviewing our second-quarter financial results, my comments on the balance sheet, cash flow statement, taxes, updated guidance.

謝謝，克里夫。大家，早安。我將首先回顧我們第二季度的財務業績、我對資產負債表、現金流量表、稅收和最新指導的評論。

We posted revenue of $1.507 billion for the second quarter, representing a 14% increase year over year. Gross margin was 57.3%, a 20-basis-point decrease from the prior year quarter. Operating expense as a percentage of sales was 34.6%, a 140-basis-point decrease.

第二季我們的營收為 15.07 億美元，年增 14%。毛利率為 57.3%，較去年同期下降 20 個基點。營運費用佔銷售額的百分比為 34.6%，下降 140 個基點。

Operating income was $342 million, a 20% increase. Operating margin was 22.7%, a 120-basis-point increase. Our GAAP EPS was $1.56. Pro forma EPS was $1.58.

營業收入為 3.42 億美元，成長 20%。營業利益率為 22.7%，成長 120 個基點。我們的 GAAP 每股收益為 1.56 美元。預計每股收益為 1.58 美元。

Next, we look at our second-quarter revenue by segment and geography. During the second quarter, we achieved double-digit growth in three of our five segments, led by the auto OEM segment with 41% growth. Fitness and marine segments had 28% and 26% growth, respectively. By geography, we achieved double-digit growth of 18% in the EMEA region and 15% in the Americas region. APAC region growth was 1%.

接下來，我們按細分市場和地理查看第二季的收入。第二季度，我們五個細分市場中的三個實現了兩位數成長，其中汽車 OEM 細分市場成長了 41%。健身和航海領域分別成長了 28% 和 26%。按地理劃分，我們在歐洲、中東和非洲地區實現了 18% 的兩位數成長，在美洲地區實現了 15% 的兩位數成長。亞太地區成長率為 1%。

Looking next at operating expenses. Second-quarter operating expense increased by $46 million or 10%. Research and development increased approximately $19 million year over year, primarily due to engineering personnel costs. SG&A increased approximately $27 million compared to prior year quarter, primarily due to increases in personnel-related expenses, including the impact of the acquisition of JL Audio.

接下來看看營運費用。第二季營運費用增加 4,600 萬美元，成長 10%。研發年增約 1,900 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約 2,700 萬美元，主要是由於人員相關費用的增加，包括收購 JL Audio 的影響。

A few highlights on the balance sheet. Cash flow statement and taxes. We ended the quarter with cash and marketable securities of approximately $3.4 billion. Accounts receivable increased both year over year and sequentially to $808 million, following seasonally strong sales in the second quarter.

資產負債表上的一些重點。現金流量表和稅收。本季結束時，我們擁有約 34 億美元的現金和有價證券。繼第二季季節性強勁銷售之後，應收帳款年比及季均成長至 8.08 億美元。

Inventory balance decreased year over year but increased sequentially to approximately $1.3 billion. During the second quarter of 2024, we generated free cash flow of $218 million, a $3 million decrease from the prior year quarter.

庫存餘額較去年同期下降，但季增至約 13 億美元。 2024 年第二季度，我們產生了 2.18 億美元的自由現金流，比去年同期減少了 300 萬美元。

CapEx expenditures for the second quarter 2024 were $37 million, approximately $15 million lower than the prior year quarter. We expect full year 2024 free cash flow to be approximately $900 million, capital expenditures of approximately $350 million.

2024 年第二季的資本支出為 3,700 萬美元，比去年同期減少約 1,500 萬美元。我們預計 2024 年全年自由現金流約為 9 億美元，資本支出約 3.5 億美元。

For the second quarter of 2024, we paid a dividend of approximately $144 million and purchased $10 million of company stock. At quarter end, we had approximately $290 million remaining of the share repurchase program which is authorized through December 2026.

2024 年第二季度，我們支付了約 1.44 億美元的股息，並購買了 1,000 萬美元的公司股票。截至季末，我們的股票回購計畫剩餘約 2.9 億美元，該計畫已授權至 2026 年 12 月。

We had an effective tax rate of 17.9% compared to 8.9% in the prior year quarter. Increase in effective tax rate is primarily due to the increase in the combined Switzerland tax rate in response to global minimum tax requirements.

我們的有效稅率為 17.9%，而去年同期為 8.9%。有效稅率的增加主要是由於瑞士為響應全球最低稅收要求而提高了綜合稅率。

Turning next to our full year guidance. We estimate revenue of approximately $5.95 billion compared to our previous guidance of $5.75 billion. We expect gross margin to be approximately 57%, higher than our previous guidance of 56.5% for the year-to-date performance.

接下來是我們的全年指導。我們預計收入約為 59.5 億美元，而先前的指引為 57.5 億美元。我們預計毛利率約為 57%，高於我們先前對今年迄今業績的 56.5% 指引。

We expect an operating margin of approximately 21.3%, compared to our previous guidance of 20%. We also expect pro forma effective tax rate of 16%, which is higher than our previous guidance of 15.5%, due to projected full year income mix and tax jurisdiction.

我們預計營業利潤率約為 21.3%，而我們先前的指導值為 20%。由於預計的全年收入結構和稅收管轄權，我們還預計預計有效稅率為 16%，高於我們先前指導的 15.5%。

This results in expected pro forma earnings per share of approximately $6, an increase of $0.60 from our previous guidance of $5.40. This concludes our formal remarks. Christina, could you open the line for Q&A?

這導致預計每股收益約為 6 美元，比我們之前指導的 5.40 美元增加了 0.60 美元。我們的正式發言到此結束。克里斯蒂娜，你能打開問答專線嗎？

(Operator Instructions) Joseph Cardoso, JPMorgan.

（操作員指示）Joseph Cardoso，摩根大通。

Good morning and thanks for the question. So maybe first question here is just on the guide. When I take a look at the updated full year guide, the implied second half outlook suggests maybe a more muted revenue flow-through to earnings than maybe we are accustomed seeing for Garmin.

早安，謝謝你的提問。所以也許這裡的第一個問題只是關於指南。當我查看更新後的全年指南時，隱含的下半年前景表明，收入流向盈利的情況可能比我們通常看到的 Garmin 更為溫和。

Can you maybe just walk through the puts and takes there and perhaps driving the pressures on the incremental margins into the second half? And then I have a follow-up. Thank you.

您是否可以只瀏覽看跌期權和看跌期權，並可能將增量利潤率的壓力推到下半年？然後我有一個後續行動。謝謝。

Yeah. So when we think about that, yes, relating to the gross margin, back half versus what we've seen in the first half, we'll continue to see segment mix have an impact. That will have an impact to reduce the gross margin in the back half. As it relates to expenses, yes, we'll continue to make investments in R&D, primarily to support our innovation.

是的。因此，當我們思考這一點時，是的，與毛利率有關，後半段與上半年相比，我們將繼續看到細分市場組合產生影響。這將對下半年的毛利率產生影響。是的，由於與費用相關，我們將繼續在研發方面進行投資，主要是為了支持我們的創新。

Got it. And then maybe just as my second question, marine on an organic basis continues to outperform the broader market trends that you guys have been highlighting. And so I was just curious if you could double-click on the outperformance there.

知道了。也許就像我的第二個問題一樣，海洋在有機基礎上繼續跑贏你們一直強調的更廣泛的市場趨勢。所以我只是好奇你是否可以雙擊那裡的優異表現。

What are you seeing broadly as the drivers of the share gains Garmin has experienced, for example? Is it broadly across the portfolio? Or are you seeing better trends more in a particular area of the portfolio? And then maybe just curious what other factors could be contributing here, and any thoughts on how sustainable this could be from your vantage. Thanks for the question guys.

例如，您認為 Garmin 份額成長的主要推動因素是什麼？它廣泛分佈在整個投資組合中嗎？或者您在投資組合的特定領域看到了更好的趨勢？然後也許只是好奇還有哪些其他因素可能會在這裡做出貢獻，以及從您的角度來看，這可能如何可持續。謝謝大家的提問。

Yes, Joe, I think our performance in the aftermarket is definitely much better than the overall market. And even in the OEM channels that we serve, our performance is much better than the broader markets than reporting. I think we attribute this to really our product lines highly innovative and very broad.

是的，喬，我認為我們在售後市場的表現肯定比整體市場好得多。即使在我們服務的 OEM 管道中，我們的業績也比報告更廣泛的市場要好得多。我認為我們將此歸因於我們的產品線高度創新且非常廣泛。

We're doing very well, and in chart plotters, we have the best mapping, and sonar systems, radar, and autopilots. And trolling motors are somewhat of a newer category for us. It's expanding and helping us to take share.

我們做得很好，在海圖繪圖儀方面，我們擁有最好的測繪、聲納系統、雷達和自動駕駛儀。拖釣馬達對我們來說是一個較新的類別。它正在擴大並幫助我們獲得份額。

Erik Woodring, Morgan Stanley.

艾瑞克‧伍德林，摩根士丹利。

Hey guys, good morning. Thank you for taking my call. Doug or Cliff, either one of you, I just want to get your viewpoint. As we think about the guidance increase, obviously, nice outperformance in 1Q, so you were tracking above and now we've seen you raised guidance.

嘿夥計們，早安。感謝您接聽我的電話。道格或克里夫，無論是你們中的任何一個，我只是想聽聽你們的觀點。當我們考慮指導意見的增加時，顯然，第一季的表現很好，所以您一直在追蹤上面的內容，現在我們看到您提高了指導意見。

Would you say that that increase in guidance is solely a reflection of the better first half? Or are you seeing some of that sustain into the second half relative to your expectations? Just want to get a sense, is this kind of a reflection just of 1Q outperformance? Or is the second half of the year better than you thought as well? And then I have a follow-up. Thank you so much.

您是否認為指引的增加只是上半年業績較好的反映？或者你認為相對於你的預期，這種情況會持續到下半年嗎？只是想了解一下，這是否只是第一季表現優異的反映？或者下半年也比你想像的還要好？然後我有一個後續行動。太感謝了。

Yeah, Erik, I think there's a lot of moving pieces that go into the guide. In some cases, as in fitness, I think we're very optimistic and encouraged by our performance. And so there's a little more optimism in that guide as we anniversary the launches of the major products that we had last year.

是的，埃里克，我認為指南中有很多令人感動的內容。在某些情況下，例如在健身方面，我認為我們非常樂觀，並對我們的表現感到鼓舞。因此，在我們慶祝去年推出的主要產品週年之際，該指南中的樂觀情緒更加明顯。

And then in marine, I think we're mostly taking a wait-and-see approach. We're rolling forward certainly the higher performance. But as has already been noted, the marine market is generally stabilizing, and so we're simply just taking a slightly different view there. And everything else remains in line with what we had earlier said.

然後在海洋領域，我認為我們主要採取觀望態度。我們肯定會向前邁進更高的性能。但正如我們已經指出的那樣，海運市場總體上正在穩定，因此我們只是採取稍微不同的觀點。其他一切都與我們之前所說的一致。

And one thing to add in marine, we are anniversarying the JL Audio acquisition end of Q3 also.

在海洋領域需要補充的一件事是，我們也在第三季末慶祝 JL Audio 收購。

Okay. No, that's very helpful. And then, Doug, maybe for you. Your free cash flow seasonality historically has been a bit volatile, but more often than not you do about 35% to 40% of annual free cash flow in the first half of the year.

好的。不，這非常有幫助。然後，道格，也許適合你。從歷史上看，您的自由現金流季節性有點不穩定，但通常情況下，您的年度自由現金流的 35% 至 40% 是在上半年進行的。

If we take your updated viewpoint on free cash flow, I believe it was up $900 million for the year, it would imply first half free cash flow is actually more like, call it, 70%, which would be at least near decade high. Can you maybe just help us understand some of the seasonality or moving pieces as it relates to free cash flow? Why the second half of the year would be so much weaker than we see historically for you guys? And that's it for me. Thanks so much.

如果我們採用您對自由現金流的最新觀點，我相信今年增長了 9 億美元，這意味著上半年自由現金流實際上更像是 70%，這至少是近十年來的最高水平。您能否幫助我們了解一些與自由現金流相關的季節性或變動因素？為什麼今年下半年你們的表現會比我們歷史上看到的還要弱很多？對我來說就是這樣。非常感謝。

Good question. There is a working capital consideration you take into consideration also. So one of which is inventory. Last year, in the back half, we saw some benefit relating to our inventory being lower. This year, we expect in the back half that we would be increasing our inventory. On a year over year basis, we probably expect inventory decrease in line with sales, so there will be a use of cash in the back half for inventory.

好問題。您還需要考慮營運資金。其中之一就是庫存。去年下半年，我們看到了與庫存較低相關的一些好處。今年，我們預計下半年我們將增加庫存。與去年同期相比，我們可能會預期庫存會隨著銷售額而減少，因此下半年將使用現金來庫存。

George Wang, Barclays.

喬治王，巴克萊銀行。

Hey guys, thanks for taking my question. Two parts. Firstly, can you give update thoughts on capital allocation, especially given still elevated cash balance, just the 2Q, the buyback was pretty small, just -- and also a related question just on the CapEx, you guys have still guided pretty elevated CapEx full year being $350 million, with the 1H being smaller spend. Maybe you can walk me through how you think about these two parts.

嘿夥計們，謝謝你提出我的問題。兩部分。首先，您能否給出關於資本配置的最新想法，特別是考慮到現金餘額仍然較高，僅在第二季度，回購規模就很小，而且還有一個關於資本支出的相關問題，你們仍然指導了相當高的資本支出年支出為 3.5 億美元，其中 1H 支出較小。也許你可以告訴我你是如何看待這兩部分的。

Sure. As it relates to capital allocation, it's consistent with what we've had in the past, our priorities are really reliable dividends, investments back in our business as CapEx, also acquisitions such as JL Audio and then share buybacks. And share buybacks is really depending upon the market and the business conditions. We'll take a look at that every quarter.

當然。由於它與資本配置有關，因此與我們過去的情況一致，我們的首要任務是真正可靠的股息、作為資本支出對我們業務的投資，以及 JL Audio 等收購，然後進行股票回購。股票回購實際上取決於市場和業務狀況。我們每季都會對此進行一次審查。

As it relates to CapEx, yes, the back half, those investments really relate to so investments in our manufacturing facilities. Also, we'll have some invest IT projects to enhance some of our security infrastructure as well as we're continuing our renovations of our facilities here in Kansas.

由於它與資本支出有關，是的，後半部分，這些投資確實與我們製造設施的投資有關。此外，我們還將投資一些 IT 項目來增強我們的一些安全基礎設施，並且我們將繼續翻新堪薩斯州的設施。

Okay. Just a quick follow-up, if I can squeeze in. I just wanted to, honing on the auto OEM, especially kind of as we look beyond the BMW, the main controller. Last quarter, you guys alluded to two new wins just on the infotainment system side there. I assume it's higher margin.

好的。如果我能擠進去的話，只是一個快速的跟進。上個季度，你們提到了資訊娛樂系統的兩場新勝利。我認為它的利潤更高。

Can you give a bit more thoughts and color if you can? I assume it's going to ramp starting from 2026 in infotainment system. Maybe any color would be appreciated.

如果可以的話你能多一點想法和色彩嗎？我認為從 2026 年開始，資訊娛樂系統將會逐漸普及。也許任何顏色都會受到讚賞。

Yes, George, we announced those additional awards last quarter. Nothing has really changed in that since then. We're working hard to bring those to market, as we mentioned, starting in 2026. In terms of the margin profile for those products, I would just point out that's still domain controller products. And so that carries that typical mid-teens kind of gross margin that we've been talking about with it as well. So it's very much in line with the business that we're currently seeing settle in, in terms of the auto OEM revenue structure.

是的，喬治，我們上個季度宣布了這些額外獎項。從那時起，一切都沒有真正改變。正如我們所提到的，從 2026 年開始，我們正在努力將這些產品推向市場。因此，這也帶來了我們一直在談論的典型的十幾歲左右的毛利率。因此，就汽車原始設備製造商的收入結構而言，這與我們目前看到的業務非常一致。

Okay, great. I’ll go back in the queue.

好的，太好了。我會回到隊列中。

David MacGregor, Longbow Research.

大衛‧麥格雷戈，長弓研究中心。

Yes, good morning, everyone. Thanks for taking the questions. I wanted to just pick up on the discussion around the OEM auto, and congratulations on the progress there. You're obviously in the market with a product that is succeeding with customers and building on the BMW, now with Yamaha and others. But I guess I'm a little confused on why there isn't a little more scale benefit in terms of your margin outlook.

是的，大家早安。感謝您提出問題。我想繼續討論有關 OEM 汽車的討論，並祝賀那裡的進展。顯然，您在市場上推出的產品在寶馬和雅馬哈等公司的基礎上取得了成功，贏得了客戶的青睞。但我想我有點困惑為什麼你們的利潤前景沒有更多的規模效益。

And so you mentioned there's still controllers and there's still that kind of gross margin profile that you've communicated in the past. But I would have thought maybe the -- your EBIT contribution would build as you build scale in that business. So is it just not a scale? It's just more variable cost than this than we expected. Or how should we think about the longer-term economics as you grow that business?

所以你提到仍然有控制者，並且仍然有你過去傳達過的那種毛利率狀況。但我以為，隨著您在該業務中擴大規模，您的息稅前利潤貢獻可能會增加。那麼這不是一個尺度嗎？只是變動成本比我們預期的還要多。或者，當您發展業務時，我們應該如何考慮長期經濟？

Yeah. I think, David, if you look where we are this quarter versus last year, there's been a big swing in product mix to that domain controller category, which what we've been saying for the past year is that that would definitely be a margin impact because of the profile of those products. And so that's what's driving our gross margin this year compared to last year. And it pretty much put the gross margin dollars even with last year.

是的。我認為，大衛，如果你看看我們本季度與去年相比的情況，你會發現網域控制站類別的產品組合發生了很大的變化，我們去年一直在說這肯定會是一個利潤率由於這些產品的形象而產生影響。因此，與去年相比，這就是推動我們今年毛利率的原因。毛利率與去年基本持平。

So there's a big transition point that we've already gone through. You saw our engineering and expense structure come down, and so our loss decreased. And I would point out that auto OEM also absorbs a certain amount of allocated costs across the company, which would otherwise go to other segments.

所以我們已經經歷了一個重大的轉變點。您看到我們的工程和費用結構下降了，因此我們的損失減少了。我想指出的是，汽車原始設備製造商也吸收了整個公司一定數量的分配成本，否則這些成本將流向其他部門。

So we're starting to see that leverage. We're probably a little bit behind where we thought we would be, although we're talking about very small numbers in terms of the difference. And so we're looking forward to the additional volume ramp and seeing those leverages come into play as the efficiencies go up.

所以我們開始看到這種槓桿作用。我們可能有點落後於我們的預期，儘管我們談論的差異很小。因此，我們期待銷量的進一步成長，並看到這些槓桿隨著效率的提高而發揮作用。

Okay. Maybe I could just shift gears and ask about fitness and outdoor, and just if you could talk about what you're seeing in retail conditions and retail inventories at this point.

好的。也許我可以換個話題，詢問一下健身和戶外活動，以及您是否可以談談您目前在零售狀況和零售庫存方面看到的情況。

Yes. We watch it very closely. We're able to see our sell-in versus our registrations. And we believe that the channel is really very clean right now. The products are selling through at a very consistent rate with our sales in. And the products seem to be very popular, and people really appreciate them. So we're really excited about our performance in wearables in general.

是的。我們非常密切地關注它。我們能夠看到我們的銷售量與註冊量。我們相信該頻道現在確實非常乾淨。這些產品的銷售速度與我們的銷售速度非常一致。因此，我們對穿戴式裝置的整體表現感到非常興奮。

Okay. And just last for me, on the marine guidance, up 15%. How much of the incremental growth there is coming from the addition of the trolling product offering? And just expanding that, having a product that maybe you didn't have to offer a year earlier.

好的。最後對我來說，關於海洋指導，上漲了 15%。有多少增量成長來自於惡搞產品的增加？只是擴大這個範圍，擁有一種可能一年前不需要提供的產品。

And just last for me on the marine guidance of up 15%, how much of the incremental growth there is coming from the addition of the trolling product offering and just expanding that out having a product that maybe you didn't have to offer a year ago and we don't break out specifics on that.

最後對我來說，海洋指導增長了 15%，其中有多少增量增長來自於增加了釣魚產品，並且只是將其擴展為可能不需要一年提供的產品之前我們沒有透露具體細節。

We don't break out specifics on that, but I would say that trolling motors are contributing to that increased organic revenue. But it's not the only category. In fact, chart plotters were also very good. And that's an indicator basically of the market robustness and the strength of our product line as people are installing it on their boats.

我們沒有透露具體細節，但我想說的是，拖釣馬達正在為有機收入的增加做出貢獻。但這不是唯一的類別。事實上，圖表繪圖儀也非常好。當人們將其安裝在船上時，這基本上是市場穩健性和我們產品線實力的指標。

And did you say what organic growth in marine was excluding JL?

您是否說過海洋中的有機生長不包括 JL？

Up 7% is what we said.

上漲7%就是我們所說的。

Thanks very much. Good luck.

非常感謝。祝你好運。

Jordan Lyonnais, Bank of America.

喬丹·里昂，美國銀行。

Hey good morning. Thanks for taking the question. A few of your competitors have started launching smart rings. Is that something Garmin is interested in, would be looking to expand to for the fitness line?

嗨，早安。感謝您提出問題。您的一些競爭對手已經開始推出智慧戒指。 Garmin 是否對此感興趣，並希望將其擴展到健身系列？

Well, we're interested in all kinds of product categories, including that, and others. So far, we've done very well with our wearables, and I think it has the most utility. But there's certainly a group of people that like that kind of form factor. So we keep open minds to the categories and we explore all possibilities.

嗯，我們對各種產品類別感興趣，包括該類別和其他類別。到目前為止，我們的穿戴式裝置做得非常好，我認為它最實用。但肯定有一群人喜歡這種外形。因此，我們對類別保持開放的態度，並探索所有可能性。

Got it. And then just a follow-up too, are you seeing any increases in promotions from you guys pushing it through retailers or anything else?

知道了。然後還有一個後續行動，你們是否看到你們透過零售商或其他地方推動的促銷活動增加？

I don't think the promotional activity is materially different. We have a yearly cadence around the calendar of our retailers, most recently, for example, Prime Day. The mix of products that we offer can vary from year to year, and that can probably affect whether it's more promotional or less. But in general, I would say it's shaping up to be a pretty typical year.

我不認為促銷活動有本質上的不同。我們的零售商的日曆每年都有一個節奏，最近的一次是 Prime Day。我們提供的產品組合每年都會有所不同，這可能會影響促銷強度的大小。但總的來說，我認為今年將會是非常典型的一年。

Ben Bollin, Cleveland Research.

本‧博林，克利夫蘭研究中心。

Good morning, everyone. Thanks for taking the question. Cliff, I'm interested in your thoughts on the year-to-date performance in fitness, obviously, remarkable. How do you think about the drivers to what you've seen? You had certainly a product with Forerunner 165. I'm curious about that. Any thoughts on TAM?

大家，早安。感謝您提出問題。克里夫，我對你對今年迄今為止的健身表現的看法很感興趣，顯然，這是非常出色的。您如何看待您所看到的驅動因素？你們一定有 Forerunner 165 的產品。對TAM有什麼想法嗎？

And then if you have any perspective on how a strong cohort of customers added during COVID, is there a bigger refresh opportunity? Any thoughts on that would be helpful.

那麼，如果您對新冠疫情期間如何增加大量客戶有任何看法，是否存在更大的更新機會？對此的任何想法都會有所幫助。

Yeah. I think our year-to-date performance has been remarkable. We credit it to the strength of our product line. It's certainly not just the Forerunner 165. We have the 965 and 265 which are also doing very, very well, the vivoactive 5 on the low end of advanced wearables, as well as the Venue 3 and 3S, all of which has been popular.

是的。我認為我們今年迄今為止的表現非常出色。我們將其歸功於我們產品線的實力。當然不只是Forerunner 165。

So we're seeing success across the range of products from high end to low end. In terms of the overall market, I would say that it's generally stable. It's not a huge growth market, but it's a huge market. And our opportunity is really share gains, which we see happening with the kind of results that we're driving. So we're excited about that.

因此，我們看到從高端到低端的各種產品都取得了成功。從整體市場來看，我認為整體是穩定的。這不是一個巨大的成長市場，但它是一個巨大的市場。我們的機會實際上是分享收益，我們看到這種情況隨著我們正在推動的結果而發生。所以我們對此感到興奮。

And in terms of refresh opportunities, we track that, new users versus existing users and what kinds of products that they go from and what they go to. And definitely, we see this refresh cycle that occurs with our customer base every two to three years. And we're starting to see some of that, especially as our new products really leapfrog the generation or two behind where they might have already had a product that they were using. So definitely, there's ongoing opportunities with the existing customer base.

在更新機會方面，我們追蹤新用戶與現有用戶以及他們使用哪種類型的產品以及他們使用什麼產品。當然，我們的客戶群每兩到三年就會出現一次更新週期。我們開始看到其中的一些，特別是當我們的新產品確實超越了他們可能已經擁有他們正在使用的產品的一兩代人時。因此，現有客戶群肯定存在持續的機會。

Okay. The last one for me. Also curious how you think about potential AI opportunities for both internal and customer use cases. It seems like you have a very unique high-fidelity data set in Connect. Just curious your thoughts on what you guys could be looking at or some options around AI. Thank you.

好的。對我來說最後一張。我也很好奇您如何看待內部和客戶用例的潛在人工智慧機會。看來您在 Connect 中有一個非常獨特的高保真數據集。只是好奇你們對你們可能會關注什麼或關於人工智慧的一些選擇的想法。謝謝。

Yes. I think we're no different than most companies. We look at AI as a potential business tool, and we're doing some of that. Some of what we look at there, we take a wait-and-see approach because there's still a lot of claims that AI is making that have yet to be demonstrated.

是的。我認為我們與大多數公司沒有什麼不同。我們將人工智慧視為一種潛在的商業工具，我們正在做一些事情。我們對其中的一些內容採取觀望態度，因為人工智慧仍有許多說法尚未得到證實。

But in terms of product-specific uses, I would say that a more constrained model around customer data and trends is something that we're very interested in. And we continue to explore possible features that we would have in our products in the future driven by that technology.

但就產品特定用途而言，我想說，圍繞客戶資料和趨勢的更受約束的模型是我們非常感興趣的。

Ivan Feinseth, Tigress Financial Partners.

Ivan Feinseth，Tigress Financial Partners。

Thank you and congratulations on another great quarter and a great first half. In the slides, you talked about the strength in fitness was driven by wearables, but the revenue decline in outdoor was driven by adventure watches. What is the difference between the -- what's driving the strength in the fitness wearables, let's say, versus the outdoor wearables?

謝謝並祝賀您又一個出色的季度和出色的上半場。在幻燈片中，您談到健身領域的成長是由穿戴式裝置推動的，但戶外領域的收入下降是由冒險手錶推動的。比如說，健身穿戴裝置與戶外穿戴裝置的差異是什麼？

I think that the outdoor wearables, Ivan, was really when we passed the pipeline fill of our fēnix and epix Pro releases from last year. And as we look forward, we're basically factoring in our additional product releases that we have for the rest of the year, and we anticipate that will grow as we move forward.

我認為戶外穿戴裝置 Ivan 是在我們去年發布的 fänix 和 epix Pro 的產品線已滿的時候才真正出現的。展望未來，我們基本上考慮了今年剩餘時間的額外產品發布，並且我們預計隨著我們的前進，這一數字將會增長。

And then like some of the functionality like with the launch of the Pro models, you have the updated or the better ECG measurement and there's ongoing talk in health focus of the importance of HRV. Can you talk about like how -- are there some things that are driving upgrades in sales? And what do you envision as far as future functionality?

然後，就像 Pro 型號的推出等一些功能一樣，您可以獲得更新的或更好的心電圖測量，並且健康焦點中不斷有人討論 HRV 的重要性。您能否談談如何推動銷售升級？您對未來的功能有何設想？

Yeah, I think we've really been a pioneer in those kinds of sensor measurements, particularly when you look at HRV, which drives many of our metrics in our devices, from performance condition to sleep quality. These are all very important things. And so we've been on the forefront of that. And our practice has been, and our history has been, as we invent these features, we roll them across product lines and expand the functionality broadly and make it available to even more users.

是的，我認為我們確實是此類感測器測量領域的先驅，特別是當您查看 HRV 時，它驅動著我們設備中的許多指標，從性能狀況到睡眠品質。這些都是非常重要的事。所以我們一直處於這方面的最前線。我們的實踐和歷史一直是，當我們發明這些功能時，我們將它們跨產品線滾動並廣泛擴展功能並使其可供更多用戶使用。

Thank you. And congratulations on the first half.

謝謝。祝賀上半場。

Thank you.

謝謝。

Noah Zatzkin, KeyBanc Capital Markets.

Noah Zatzkin，KeyBanc 資本市場。

Hi, thanks for taking my questions. First, kind of just a housekeeping question. Could you remind us how to think about the mix between aftermarket and OEM within the marine business post addition of JL?

您好，感謝您回答我的問題。首先，這只是一個內務問題。您能否提醒我們，在 JL 加入後，如何考慮船舶業務中售後市場和 OEM 之間的混合？

And then second, you guys have obviously been able to maintain strong margins and what's been a kind of choppy marine industry. So from a margin perspective, exiting this year, assuming the industry is on a more stable footing, like how do you kind of think about like the kind of longer-term margin structure of the marine business? Thanks.

其次，你們顯然能夠保持強勁的利潤率，並且海洋產業一直處於動盪之中。因此，從利潤率的角度來看，假設該行業的基礎更加穩定，那麼今年退出，您如何看待海洋業務的長期利潤率結構？謝謝。

Yes. So our marine business is mostly comprised of aftermarket, especially in this environment where boat building is at a reduced level as field inventory has worked down. With the addition of JL Audio, a lot of those sales we probably categorize more in the aftermarket area, although there is some that goes to OEM. It's a little harder to track in marine because some of the distribution channels are independent distributors who sell and turn to smaller boat builders. And so it isn't always possible to track exactly which products go where. But in general, we're seeing strength in the aftermarket channels as well as better-than-industry performance in the OEM side.

是的。因此，我們的船舶業務主要由售後市場組成，尤其是在現場庫存下降而造船水平下降的環境下。隨著 JL Audio 的加入，我們可能會在售後市場領域對其中許多銷售進行更多分類，儘管也有一些銷售給 OEM。在海運領域追蹤有點困難，因為一些分銷管道是獨立分銷商，他們向較小的造船商銷售並轉向。因此，並不總是能夠準確追蹤哪些產品去了哪裡。但總的來說，我們看到了售後通路的實力以及 OEM 方面優於業界的表現。

In terms of the margin picture, I would say that other than the impact that we've talked about with JL Audio as a dilutive factor, overall, we don't see any change in the overall marine margin structure, especially as you mentioned towards the end of the year, we would see that the segment and the market really will continue to perform in the ranges that have been historically true.

就利潤率而言，我想說的是，除了我們所討論的 JL Audio 作為稀釋因素的影響外，總體而言，我們沒有看到整個海洋利潤率結構發生任何變化，特別是正如您所提到的到今年年底，我們將看到該細分市場和市場確實將繼續在歷史真實範圍內表現。

Thank you.

謝謝。

(Operator Instructions) Erik Woodring, Morgan Stanley.

（操作指示）Erik Woodring，摩根士丹利。

Hey guys. Thanks for taking my follow ups. Just two quick ones, if I may. Maybe big picture, some of the questions have maybe alluded to this topic. But I'd say there have been some growing concerns around consumer spending. We're also hearing about some evidence of incremental, let's call it, hardware spending in Europe -- hardware setting weakness in Europe.

大家好。感謝您接受我的跟進。如果可以的話，就兩個快速的。也許從大局來看，有些問題可能已經提到了這個話題。但我想說的是，人們對消費者支出的擔憂日益加劇。我們也聽到了一些歐洲硬體支出增量（我們稱之為增量）的證據——歐洲硬體設定疲軟。

Just given your significant exposure to each market, can you maybe just give us some detail on exactly what you're seeing from an end demand standpoint related to the consumer? Are you seeing any trading down? It doesn't seem like it, but I just want to make sure we get your perspective given kind of how wide you reach is. And then just a quick follow-up. Thanks.

鑑於您對每個市場的大量了解，您能否向我們提供一些詳細信息，說明您從與消費者相關的最終需求的角度所看到的具體情況？您看到任何交易下跌嗎？看起來並非如此，但我只是想確保我們了解您的觀點，考慮到您的影響範圍有多大。然後進行快速跟進。謝謝。

Yeah. I think, Erik, we would say that there's not any significant evidence that spending patterns for our product lines and our customer base are currently being impacted. It's a little hard to say it's not because we don't have control data to measure that against because we're doing so well.

是的。我認為，艾瑞克，我們會說，沒有任何重大證據表明我們的產品線和客戶群的支出模式目前受到影響。很難說這不是因為我們沒有控制數據來衡量這一點，因為我們做得很好。

But we do tend to target a customer base and product ranges that are not at the commodity low-end level. So we make premium products with clear differentiators, and customers seem to appreciate them and step up for them. So it would appear that that is resonating with customers.

但我們確實傾向於瞄準不屬於低端商品水平的客戶群和產品範圍。因此，我們生產具有明顯差異化優勢的優質產品，客戶似乎很欣賞它們並為它們提供支援。因此，這似乎引起了客戶的共鳴。

Okay. That makes a lot of sense. And then maybe just last one. If you look at Garmin Connect MAUs, strength there, at least growth there has been very consistent in the mid-teens on a monthly basis year over year. Is there any way that you can help us understand what of that growth is new customer additions versus prior Garmin customers just reengaging with the Connect app?

好的。這很有意義。然後也許只是最後一個。如果你看看 Garmin Connect 的每月活躍用戶數，你會發現那裡的實力，至少每年的月度成長非常穩定。您是否可以透過任何方式幫助我們了解新增客戶的成長與剛剛重新使用 Connect 應用程式的舊 Garmin 客戶之間的關係？

And does that behavior look any different than past cycles or past periods? Just trying to understand kind of the strength of new users versus existing users that are just reengaging. And that's it for me. Thanks.

這種行為看起來與過去的週期或過去的時期有什麼不同嗎？只是想了解新用戶與剛剛重新參與的現有用戶的實力。對我來說就是這樣。謝謝。

Yeah. Our Connect registration behaviors, we've mentioned those from time to time that most of the new accounts and the new devices we see registered on Connect are from new customers. We do see a healthy number of existing customers that continue to engage with Garmin and they upgrade their devices.

是的。我們的 Connect 註冊行為，我們不時提到過，我們在 Connect 上看到的註冊的大多數新帳戶和新設備都來自新客戶。我們確實看到大量現有客戶繼續與 Garmin 合作並升級他們的設備。

And we see, frankly, a robust secondhand market where people might sell one of their products and trade up to another one, and somebody, a brand-new customer to Garmin comes into Connect, which gives us an opportunity to then upgrade them in the future. So in general, I would say it's a very healthy environment, and mostly still driven by new customers.

坦白說，我們看到一個強大的二手市場，人們可能會出售他們的一種產品並換成另一種產品，而 Garmin 的全新客戶進入 Connect，這給了我們一個機會，然後在未來。所以總的來說，我想說這是一個非常健康的環境，而且主要仍然是由新客戶推動的。

Alright. That’s perfect. Thanks so much.

好吧。那是完美的。非常感謝。

Thank you.

謝謝。

Thank you. With no further questions. Teri, I'll turn the floor back over to you.

謝謝。沒有進一步的問題。泰瑞，我將把發言權交還給你。

Thank you all for joining the call today. Doug and I are available for callbacks. And we hope you have a great rest of your day. Goodbye.

感謝大家今天加入電話會議。道格和我可以回電。我們希望您度過愉快的一天。再見。

Thank you. This does conclude today's conference call. You may now disconnect. Have a great day.

謝謝。今天的電話會議到此結束。您現在可以斷開連線。祝你有美好的一天。