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Record fourth-quarter revenue exceeding $2 billion was driven by strong double-digit growth in fitness, marine, and aviation segments, validating the company’s diversified business model.
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Fitness segment growth of 33% for the full year was primarily volume-driven, benefiting from both overall market expansion and significant market share gains in the wearables category.
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Management attributes the 60 basis point operating margin expansion to operational leverage and a vertically integrated model that mitigated generationally high tariff structures.
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The Auto OEM segment is undergoing a strategic pivot, shifting R&D resources toward other segments as legacy programs reach end-of-life and the company focuses on scaling the upcoming Mercedes-Benz program.
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High user engagement, evidenced by an 8% increase in average activity levels, is driving strong pull-through rates for new product registrations and retail demand.
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Vertical integration serves as a primary defense against component cost volatility, allowing the company to manage the total Bill of Materials (BoM) more efficiently than non-integrated competitors.
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2026 guidance assumes approximately 9% revenue growth to $7.9 billion, with operating income expected to exceed $2 billion for the first time.
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Management is moving away from providing specific individual segment growth targets to focus on consolidated results, citing the multiple paths to success provided by their diverse portfolio.
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Outdoor segment growth is expected to accelerate in 2026, with revenue heavily weighted toward the second half of the year due to the timing of a significant number of new product introductions.
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The company has intentionally increased inventory levels of critical components to mitigate industry-wide memory constraints and supply chain cost pressures.
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Capital expenditures are projected to rise to $400 million in 2026, primarily to fund a new manufacturing facility in Thailand scheduled to be operational in early 2027.
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The 2026 pro forma effective tax rate is expected to decrease to 16% due to favorable shifts in U.S. tax legislation regarding R&D cost deductions.
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Auto OEM revenue is expected to decrease in 2026 as BMW domain controller volumes peak and legacy programs approach end-of-life before the 2027 Mercedes-Benz ramp.
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Memory component cost pressures are noted as a headwind, though management declined to quantify the specific impact on the 2026 margin guidance.
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The Board approved a new $500 million share repurchase program through 2028, replacing the previous authorization to reflect confidence in long-term cash flow.
