When Garmin announced its January-March 2025 earnings in a conference call to investment analysts on 30 April, the headlines focused on a revenue increase to $1.54 billion and a record Q1 operating income of $333m.
The latter represented a 12 per cent year-on-year uptick, and Garmin’s president and CEO, Cliff Pemble, described the results as "outstanding" and "a continuation of the positive business trends we've been experiencing over the longer-term".
But under the top-line figures were some developments that could impact the huge base of cyclists who use the company's products.
Price increases driven by Trump’s tariffs?
As with many global businesses and many in the cycling industry, Garmin expects to be adversely affected by the tariffs imposed by US president Donald Trump, and the more complex trade structures that result.
"The global trade environment is very dynamic due to recent changes in U.S. trade policy, which is affecting every business, especially those with extensive global supply chains," he said. "It appears that higher tariffs and more complex trade structures will be a normal part of business going forward."
Pemble noted that around 25 per cent of Garmin’s US revenue comes from products made outside the US, primarily in Taiwan, that could be hit by tariffs.
Around 40 percent of Garmin’s revenue is generated in currencies other than the US dollar, though, and a fall in the dollar’s value should help to increase its reported value.
Nevertheless, Pemble forecast a small reduction in demand for Garmin products, along with a $100m increase in the company’s costs.
According to Pemble, that’s likely to result in price increases: “So we're evaluating pricing not broadly, but specifically in context of each market and product line… there are cases where definitely, there's room to have different pricing, and there's other cases because... it's more competitive and difficult to increase prices.”
He added: "We're going to make sure that we maintain our market share and optimize our overall profit dollars in this environment."
How this may affect the line-up of Garmin Edge bike computers is to be seen.
Garmin's smartwatches are also relevant to cyclists – and particular those who want a multi-sport device, or one for everyday health tracking.
Much of Garmin’s business is also driven by smartwatches, with a 12 per cent gain in Garmin’s fitness business revenue to $385m and a 20 per cent gain for its outdoor segment to $438m, also driven primarily by adventure smartwatches.
Pemble had previously described 2024 as "a year of remarkable growth" for Garmin, with "strong demand" highlights for smartwatches (or 'wearables'), in particular, and revenues increasing 31 per cent year-on-year in the three months to Christmas.
More paid-for features in Connect+?
With the hit on revenue from tariffs, Garmin is likely to be exploring other mitigating steps.
The company recently launched Connect+, a paid-for premium tier to the Connect app, which underpins its activity recording and offers analysis and insights.
According to Pemble: “Connect+ certainly isn't required for users, and we're not taking any features away from people that they've had, and we still have a strong commitment to develop Garmin Connect and our devices with broad features that are available to everyone.
“The certain ones, we will likely reserve for premium offerings and so far, the response has been positive. We're not measuring success in terms of the short-term. This is a long-term thing for us, a very important part of our Fitness segment going forward. So we're going to build on where we started.”
The net result for users of Garmin products is that the company is likely to enhance its paid-for features in Connect+ at the expense of new features in its free Garmin Connect service.
Strava has followed a similar route, where its leaderboards, analysis and other functionality including route planning are now available only to paying subscribers and new features are mainly confined to the paid-for tier, leaving Strava's basic activity logging as the app's main free-to-use feature.
