Garmin posts record quarter, warns smartwatch prices may rise in 2027

Garmin reported record Q3 2026 revenue of $1.99 billion (+12% YoY) and a record 63.3% gross margin. CEO Cliff Pemble warned that higher memory costs driven by AI data centers will push gross margin back to a historical 58–59% range in 2027, with pricing named as one mitigation tool.

• Q3 revenue hit $1.99B (+12%), operating income $612M (+34%)
• 63.3% gross margin includes ~$33M in one-time tariff refunds
• Full-year 2026 guidance raised to ~$8.15B revenue and $10.80 EPS
• 2027 gross margin seen at 58–59% versus ~61% in 2026