Garmin announces second quarter results

Rhea-AI Summary

Garmin Ltd. (NASDAQ: GRMN) reported a record revenue of $1.33 billion for Q2 2021, marking a 53% increase year-over-year, driven by strong performance across all segments. Operating income surged 97% to $371 million, and GAAP EPS rose to $1.64, an 85% increase in pro forma EPS. The company launched several new products, including Venu 2 smartwatches and the Descent Mk2S dive computer. Despite a marginal dip in gross margin to 58.8%, Garmin raised its full-year guidance to approximately $4.9 billion in revenue and $5.50 in pro forma EPS.

Positive

• Total revenue of $1.33 billion, a 53% YoY increase.
• Operating income increased by 97% to $371 million.
• GAAP EPS rose to $1.64, 85% growth in pro forma EPS.
• Strong demand in fitness (40% growth) and outdoor (57% growth) segments.
• Acquisition of AeroData enhances aviation offerings.
• Free cash flow of approximately $120 million.

Negative

• Gross margin decreased from 59.3% to 58.8%.
• Operating loss of $8 million in the auto segment due to investments.

Garmin^® Ltd. (NASDAQ: GRMN), today announced results for the second quarter ended June 26, 2021.

Highlights for second quarter 2021 include:

• Total revenue of $1.33 billion, a 53% increase over the prior year quarter with double-digit growth in all segments
• Gross margin of 58.8% compared to 59.3% in the prior year quarter
• Operating margin improved to 28.0% compared to 21.7% in the prior year quarter
• Operating income of $371 million, a 97% increase over the prior year quarter
• GAAP EPS was $1.64 and pro forma EPS⁽¹⁾ was $1.68, representing 85% growth in pro forma EPS over the prior year quarter
• Garmin Autoland was awarded the 2020 Robert J. Collier Trophy, which recognizes the greatest achievements in aeronautics or astronautics in America
• Expanded our family of health and fitness smartwatches with the launch of Venu 2 and Venu 2S
• Launched Descent Mk2S, our smallest watch-style dive computer

(In thousands, except per share information)		13-Weeks Ended											26-Weeks Ended
		June 26,				June 27,				YoY			June 26,				June 27,				YoY
			2021				2020			Change				2021				2020			Change
Net sales		$	1,326,905			$	869,867			53	%		$	2,399,232			$	1,725,975			39	%
Fitness			413,201				294,642			40	%			721,326				518,242			39	%
Outdoor			323,405				206,200			57	%			579,859				381,302			52	%
Aviation			180,832				126,140			43	%			354,721				314,739			13	%
Marine			261,790				157,827			66	%			471,163				320,832			47	%
Auto			147,677				85,058			74	%			272,163				190,860			43	%
Gross margin %			58.8	%			59.3	%						59.3	%			59.2	%
Operating income %			28.0	%			21.7	%						25.9	%			21.2	%
GAAP diluted EPS		$	1.64			$	0.96			71	%		$	2.78			$	1.80			54	%
Pro forma diluted EPS(1)		$	1.68			$	0.91			85	%		$	2.85			$	1.82			57	%
(1) See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma diluted EPS

Executive Overview from Cliff Pemble, President and Chief Executive Officer:

“Strong demand for active lifestyle products continued, and we experienced solid recovery within our aviation and auto segments resulting in record revenue and profits in the second quarter,” said Cliff Pemble, President and CEO of Garmin. “We are very pleased with the results we have delivered thus far, giving us confidence to raise our full year 2021 revenue and EPS guidance.”

Fitness:

Revenue from the fitness segment grew 40% in the second quarter driven by strong demand for our cycling and advanced wearable products. Gross margin and operating margin were 54% and 28%, respectively, resulting in 62% operating income growth. During the quarter, we launched the Forerunner 945 LTE, bringing safety and real-time tracking features to our premium GPS running smartwatch. This watch is designed to allow runners to send for help, if necessary, and stay connected without their phones. In addition, we celebrated Global Running Day with the launch of the Forerunner 55, an easy-to-use smartwatch that encourages runners of all skill levels to get out and run.

Outdoor:

Revenue from the outdoor segment grew 57% in the second quarter with growth across all categories led by strong demand for adventure watches. Gross margin and operating margin were 64% and 38%, respectively, resulting in 81% operating income growth. During the quarter, we launched Descent Mk2S, a stylish smartwatch featuring multiple dive modes, multisport training and smart features. We also debuted our children’s book, “Women of Adventure: Being Brave in a Big World,” featuring six stories from our Women of Adventure series. The book captures the traits that make each woman unique while touching on the science behind her sport or passion, to encourage readers to explore the world and find ways to be brave every day.

Aviation:

Revenue from the aviation segment grew 43% in the second quarter with contributions from both OEM and aftermarket product categories. Gross margin and operating margin were 73% and 28%, respectively, resulting in 226% operating income growth. During the quarter, Garmin Autoland won the prestigious Robert J. Collier Trophy, for the world’s first autonomous system designed to activate during an emergency to safely fly and land an aircraft without human interaction. In addition, we announced the acquisition of AeroData, a leading provider of performance data solutions for commercial aircraft.

Marine:

Revenue from the marine segment grew 66% in the second quarter with growth across multiple categories, led by strong demand for our chartplotters. Gross margin and operating margin were 58% and 34%, respectively, resulting in 106% operating income growth. During the quarter, we announced the integration of our displays on Mercury-powered boats which can receive engine performance data via Mercury’s new SmartCraft Connect gateway, which enables monitoring of up to four engines simultaneously. We launched the MSC 10 marine satellite compass, a GPS-based navigation tool with multi-band GNSS and a fully integrated attitude and heading reference system for a smooth and accurate GPS-derived heading and position on the water. Also, with the assistance of our innovative marine electronics, Hank Cherry, a Garmin sponsored angler, won the Bassmaster Classic.

Auto:

Revenue from the auto segment grew 74% during the second quarter driven by both auto OEM programs and consumer auto products. Gross margin was 43%, and we recorded an operating loss of $8 million in the quarter driven by investments in auto OEM programs. During the quarter, we launched the dezl OTR500, truck navigator that adds PrePass weigh station bypass notifications saving drivers time, fuel and money. Also, we launched our first connected dash cam with automatic video storage and Live View monitoring options.

Additional Financial Information:

Total operating expenses in the second quarter were $410 million, a 25% increase over the prior year. Research and development increased by 21%, primarily due to engineering personnel costs across all segments. Selling, general and administrative expenses increased 26%, driven primarily by personnel related expenses and information technology costs. Advertising increased 47% driven primarily by higher spend in the fitness and outdoor segments.

The effective tax rate in the second quarter of 2021 was 14.8%.

In the second quarter of 2021, we generated approximately $120 million of free cash flow⁽¹⁾ and paid a quarterly dividend of approximately $117 million. We ended the quarter with cash and marketable securities of approximately $3.2 billion.

(1)

See attached Non-GAAP Financial Information for discussion and reconciliation of non-GAAP financial measures, including pro forma effective tax rate and free cash flow.

2021 Guidance⁽²⁾:

Based on our strong performance in the first half of 2021, we are updating our full year guidance. We now anticipate revenue of approximately $4.9 billion with projected growth in all segments. We anticipate our full year pro forma EPS will be approximately $5.50 based on a gross margin of approximately 58.5%, operating margin of approximately 23.8% and a full year pro forma effective tax rate of approximately 11.5%.

		2021 Guidance				Segment		Revenue Growth Estimates
		Updated		Prior				Updated		Prior
Revenue		$4.9B		$4.6B		Fitness		17%		10%
Gross Margin		58.5%		59.2%		Outdoor		17%		10%
Operating Margin		23.8%		23.5%		Aviation		10%		5%
Tax Rate		11.5%		10.5%		Marine		27%		15%
EPS		$5.50		$5.15		Auto		15%		5%
(2) All amounts and %s in the above 2021 Guidance tables are approximate. Also, see attached discussion on Forward-looking Financial Measures

Webcast Information/Forward-Looking Statements:

The information for Garmin Ltd.’s earnings call is as follows:

		When:		Wednesday, July 28, 2021 at 10:30 a.m. Eastern
		Where:		https://www.garmin.com/en-US/investors/events/
		How:		Simply log on to the web at the address above or call to listen in at 855-757-3897

An archive of the live webcast will be available until July 27, 2022 on the Garmin website at www.garmin.com. To access the replay, click on the Investors link and click over to the Events Calendar page.

This release includes projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with similar meanings. Any statements regarding the Company’s expected fiscal 2021 GAAP and pro forma estimated earnings, EPS, and effective tax rate, and the Company’s expected segment revenue growth rates, consolidated revenue, gross margins, operating margins, potential future acquisitions, currency movements, expenses, pricing, new products launches, market reach, statements relating to possible future dividends, statements related to the ongoing impact of the COVID-19 pandemic, and the Company’s plans and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially as a result of risk factors and uncertainties affecting Garmin, including, but not limited to, the risk factors that are described in both the Annual Report on Form 10-K for the year ended December 26, 2020 and the Quarterly Report on Form 10-Q for the quarter ended June 26, 2021 filed by Garmin with the Securities and Exchange Commission (Commission file number 0-31983). A copy of Garmin’s 2020 Form 10-K and the Q2 2021 Form 10-Q can be downloaded from https://www.garmin.com/en-US/investors/sec/. All information provided in this release and in the attachments is as of June 26, 2021. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

This release and the attachments contain non-GAAP financial measures. A reconciliation to the nearest GAAP measure and a discussion of the Company's use of these measures are included in the attachments.

Garmin, the Garmin logo, the Garmin delta, Forerunner are trademarks of Garmin Ltd. or its subsidiaries and are registered in one or more countries, including the U.S. Descent and dezl are trademarks of Garmin Ltd. or its subsidiaries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. All rights reserved

Garmin Ltd. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share information)
		13-Weeks Ended								26-Weeks Ended
		June 26,				June 27,				June 26,				June 27,
		2021				2020				2021				2020
Net sales		$	1,326,905			$	869,867			$	2,399,232			$	1,725,975
Cost of goods sold			546,054				354,437				976,825				703,605
Gross profit			780,851				515,430				1,422,407				1,022,370
Advertising expense			42,939				29,285				74,000				56,165
Selling, general and administrative expense			165,759				132,016				323,381				269,202
Research and development expense			200,981				165,740				404,195				331,131
Total operating expense			409,679				327,041				801,576				656,498
Operating income			371,172				188,389				620,831				365,872
Other income (expense):
Interest income			7,018				10,455				14,670				22,481
Foreign currency losses			(7,326	)			(4,493	)			(15,607	)			(19,916	)
Other income			1,195				3,241				2,679				6,789
Total other income (expense)			887				9,203				1,742				9,354
Income before income taxes			372,059				197,592				622,573				375,226
Income tax provision			55,062				13,412				85,548				29,866
Net income		$	316,997			$	184,180			$	537,025			$	345,360
Net income per share:
Basic		$	1.65			$	0.96			$	2.80			$	1.81
Diluted		$	1.64			$	0.96			$	2.78			$	1.80
Weighted average common shares outstanding:
Basic			192,150				191,024				192,023				190,914
Diluted			192,871				191,597				192,840				191,640

Garmin Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except per share information)
		June 26, 2021				December 26, 2020
Assets
Current assets:
Cash and cash equivalents		$	1,639,447			$	1,458,442
Marketable securities			330,567				387,642
Accounts receivable, net			737,268				849,469
Inventories			938,607				762,084
Deferred costs			16,966				20,145
Prepaid expenses and other current assets			220,910				191,569
Total current assets			3,883,765				3,669,351
Property and equipment, net			957,924				855,539
Operating lease right-of-use assets			93,097				94,626
Marketable securities			1,203,705				1,131,175
Deferred income taxes			250,230				245,455
Noncurrent deferred costs			13,814				16,510
Intangible assets, net			820,116				828,566
Other assets			180,073				190,151
Total assets		$	7,402,724			$	7,031,373
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	303,947			$	258,885
Salaries and benefits payable			160,815				181,937
Accrued warranty costs			44,575				42,643
Accrued sales program costs			97,213				109,891
Deferred revenue			85,888				86,865
Accrued advertising expense			31,481				31,950
Other accrued expenses			140,807				149,817
Income taxes payable			78,797				68,585
Dividend payable			515,307				233,644
Total current liabilities			1,458,830				1,164,217
Deferred income taxes			124,149				116,844
Noncurrent income taxes			97,556				92,810
Noncurrent deferred revenue			43,554				49,934
Noncurrent operating lease liabilities			74,336				75,958
Other liabilities			20,051				15,494
Stockholders’ equity:
Shares, CHF 0.10 par value, 198,077 shares authorized and issued; 192,321 shares outstanding at June 26, 2021 and 191,571 shares outstanding at December 26, 2020			17,979				17,979
Additional paid-in capital			1,927,137				1,880,354
Treasury stock			(303,369	)			(320,016	)
Retained earnings			3,775,874				3,754,372
Accumulated other comprehensive income			166,627				183,427
Total stockholders’ equity			5,584,248				5,516,116
Total liabilities and stockholders’ equity		$	7,402,724			$	7,031,373

Garmin Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
		26-Weeks Ended
		June 26, 2021				June 27, 2020
Operating Activities:
Net income		$	537,025			$	345,360
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			48,776				37,030
Amortization			25,903				20,502
Loss (gain) on sale or disposal of property and equipment			207				(1,807	)
Unrealized foreign currency losses			12,205				16,678
Deferred income taxes			5,560				272
Stock compensation expense			45,301				31,484
Realized gain on marketable securities			(374	)			(331	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net of allowance for doubtful accounts			103,928				178,120
Inventories			(177,193	)			(57,126	)
Other current and non-current assets			(27,279	)			(10,427	)
Accounts payable			44,144				(51,463	)
Other current and non-current liabilities			(39,377	)			(58,662	)
Deferred revenue			(7,317	)			(19,301	)
Deferred costs			5,863				7,817
Income taxes payable			20,670				(13,035	)
Net cash provided by operating activities			598,042				425,111
Investing activities:
Purchases of property and equipment			(146,542	)			(98,270	)
Proceeds from sale of property and equipment			8				1,916
Purchase of intangible assets			(1,170	)			(1,374	)
Purchase of marketable securities			(755,360	)			(346,129	)
Redemption of marketable securities			720,937				566,688
Acquisitions, net of cash acquired			(15,893	)			(7,893	)
Net cash (used in) provided by investing activities			(198,020	)			114,938
Financing activities:
Dividends			(233,860	)			(217,450	)
Proceeds from issuance of treasury stock related to equity awards			35,733				15,202
Purchase of treasury stock related to equity awards			(17,604	)			(11,883	)
Net cash used in financing activities			(215,731	)			(214,131	)
Effect of exchange rate changes on cash and cash equivalents			(2,819	)			1,651
Net increase in cash, cash equivalents, and restricted cash			181,472				327,569
Cash, cash equivalents, and restricted cash at beginning of period			1,458,748				1,027,638
Cash, cash equivalents, and restricted cash at end of period		$	1,640,220			$	1,355,207

The following table includes supplemental financial information for the consumer auto and auto OEM operating segments that management believes is useful.

Garmin Ltd. and Subsidiaries
Net Sales, Gross Profit and Operating Income by Segment
(In thousands)
																		Auto
		Fitness				Outdoor				Aviation				Marine				Total Auto				Consumer Auto				Auto OEM				Total
13-Weeks Ended June 26, 2021
Net sales		$	413,201			$	323,405			$	180,832			$	261,790			$	147,677			$	86,278			$	61,399			$	1,326,905
Gross profit			225,192				208,158				131,934				152,609				62,958				42,261				20,697				780,851
Operating income (loss)			116,966				122,056				50,810				89,752				(8,412	)			15,684				(24,096	)			371,172
13-Weeks Ended June 27, 2020
Net sales		$	294,642			$	206,200			$	126,140			$	157,827			$	85,058			$	55,270			$	29,788			$	869,867
Gross profit			156,817				133,189				92,036				93,470				39,918				26,917				13,001				515,430
Operating income (loss)			71,981				67,414				15,566				43,553				(10,125	)			4,237				(14,362	)			188,389
26-Weeks Ended June 26, 2021
Net sales		$	721,326			$	579,859			$	354,721			$	471,163			$	272,163			$	148,673			$	123,490			$	2,399,232
Gross profit			398,737				379,833				258,116				273,989				111,732				74,225				37,507				1,422,407
Operating income (loss)			190,702				215,085				95,679				151,315				(31,950	)			24,084				(56,034	)			620,831
26-Weeks Ended June 27, 2020
Net sales		$	518,242			$	381,302			$	314,739			$	320,832			$	190,860			$	114,283			$	76,577			$	1,725,975
Gross profit			269,142				245,447				230,844				187,680				89,257				55,029				34,228				1,022,370
Operating income (loss)			102,992				114,581				74,887				83,712				(10,300	)			7,450				(17,750	)			365,872

Garmin Ltd. and Subsidiaries
Net Sales by Geography
(In thousands)
		13-Weeks Ended												26-Weeks Ended
		June 26,				June 27,				YoY				June 26,				June 27,				YoY
		2021				2020				Change				2021				2020				Change
Net sales		$	1,326,905			$	869,867			53%				$	2,399,232			$	1,725,975			39%
Americas			646,393				423,091			53%					1,150,085				850,491			35%
EMEA			488,724				335,201			46%					888,232				635,069			40%
APAC			191,788				111,575			72%					360,915				240,415			50%
EMEA - Europe, Middle East and Africa; APAC - Asia Pacific and Australian Continent

Non-GAAP Financial Information

To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share and free cash flow. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies, limiting the usefulness of the measures for comparison with other companies. Management believes providing investors with an operating view consistent with how it manages the Company provides enhanced transparency into the operating results of the Company, as described in more detail by category below.

The tables below provide reconciliations between the GAAP and non-GAAP measures.

Pro forma effective tax rate

The Company’s income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes disclosure of the effective tax rate and income tax provision before the effect of certain discrete tax items are important measures to permit investors' consistent comparison between periods. In the first and second quarter 2021, there were no such discrete tax items identified.

(In thousands)		13-Weeks Ended												26-Weeks Ended
		June 26,						June 27,						June 26,						June 27,
		2021						2020						2021						2020
		$			ETR(1)			$			ETR(1)			$			ETR(1)			$			ETR(1)
GAAP income tax provision		$	55,062		14.8	%		$	13,412		6.8	%		$	85,548		13.7	%		$	29,866		8.0	%
Pro forma discrete tax item:
Uncertain tax reserve release(2)			—						14,308						—						14,308
Pro forma income tax provision		$	55,062		14.8	%		$	27,720		14.0	%		$	85,548		13.7	%		$	44,174		11.8	%
(1) Effective tax rate is calculated by taking the income tax provision divided by income before taxes, as presented on the face of the Condensed Consolidated Statements of Income.
(2) In second quarter 2020, the Company recognized a $14.3 million income tax benefit due to the release of uncertain tax position reserves associated with the 2014 intercompany restructuring, which was a pro forma adjustment in 2014. The second quarter 2020 impact of the reserve release is not reflective of income tax expense incurred as a result of current period earnings and therefore affects period-to-period comparability.

Pro forma net income (earnings) per share

Management believes that net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure in order to permit a consistent comparison of the Company’s performance between periods.

(In thousands, except per share information)		13-Weeks Ended								26-Weeks Ended
		June 26,				June 27,				June 26,				June 27,
		2021				2020				2021				2020
GAAP net income		$	316,997			$	184,180			$	537,025			$	345,360
Foreign currency losses(1)			7,326				4,493				15,607				19,916
Tax effect of foreign currency losses(2)			(1,084	)			(630	)			(2,145	)			(2,345	)
Pro forma discrete tax item(3)			—				(14,308	)			—				(14,308	)
Pro forma net income		$	323,239			$	173,735			$	550,487			$	348,623
GAAP net income per share:
Basic		$	1.65			$	0.96			$	2.80			$	1.81
Diluted		$	1.64			$	0.96			$	2.78			$	1.80
Pro forma net income per share:
Basic		$	1.68			$	0.91			$	2.87			$	1.83
Diluted		$	1.68			$	0.91			$	2.85			$	1.82
Weighted average common shares outstanding:
Basic			192,150				191,024				192,023				190,914
Diluted			192,871				191,597				192,840				191,640
(1) Foreign currency gains and losses for the Company are driven by movements of a number of currencies in relation to the U.S. Dollar and the related exchange rate impact on the significant cash, receivables, and payables held in a currency other than the functional currency at a given legal entity. However, there is minimal cash impact from such foreign currency gains and losses.
(2) The tax effect of foreign currency gains and losses was calculated using the effective tax rate of 14.8% and 13.7% for the 13-weeks and 26-weeks ended June 26, 2021, respectively, and a pro forma effective tax rate of 14.0% and 11.8% for the 13-weeks and 26-weeks ended June 27, 2020, respectively.
(3) The discrete tax item is discussed in the pro forma effective tax rate section above.

Free cash flow

Management believes that free cash flow is an important liquidity measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flows less capital expenditures for property and equipment. Management believes that excluding purchases of property and equipment provides a better understanding of the underlying trends in the Company’s operations and allows more accurate comparisons of the Company’s results between periods. This metric may also be useful to investors, but should not be considered in isolation as it is not a measure of cash flow available for discretionary expenditures. The most comparable GAAP measure is net cash provided by operating activities.

(In thousands)		13-Weeks Ended								26-Weeks Ended
		June 26,				June 27,				June 26,				June 27,
		2021				2020				2021				2020
Net cash provided by operating activities		$	229,680			$	199,237			$	598,042			$	425,111
Less: purchases of property and equipment			(109,648	)			(56,909	)			(146,542	)			(98,270	)
Free Cash Flow		$	120,032			$	142,328			$	451,500			$	326,841

Forward-looking Financial Measures

The forward-looking financial measures in our 2021 guidance provided above do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items and any other impacts that may be identified as pro forma adjustments in calculating the non-GAAP measures described above.

The estimated impact of foreign currency gains and losses cannot be reasonably estimated on a forward-looking basis due to the high variability and low visibility with respect to non-operating foreign currency exchange gains and losses and the related tax effects of such gains and losses. The impact on diluted net income per share of foreign currency gains and losses, net of tax effects, was $0.07 per share for the 26-weeks ended June 26, 2021.

At this time, management is unable to determine whether or not significant discrete tax items will occur in fiscal 2021 or anticipate the impact of any other events that may be considered in the calculation of non-GAAP financial measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210728005350/en/

FAQ

What were Garmin's Q2 2021 revenue figures?

Garmin reported Q2 2021 revenue of $1.33 billion, a 53% increase from the previous year.

How much did Garmin's GAAP EPS increase in Q2 2021?

Garmin's GAAP EPS rose to $1.64 in Q2 2021, marking a 71% increase.

What is Garmin's updated full-year guidance for 2021?

Garmin has raised its full-year revenue guidance to approximately $4.9 billion and pro forma EPS to $5.50.

How did Garmin's fitness segment perform in Q2 2021?

Garmin's fitness segment revenue grew by 40% in Q2 2021.

What challenges did Garmin face in the auto segment in Q2 2021?

Garmin reported an $8 million operating loss in the auto segment due to heavy investments.