What the changes say
- New risks focus on dealer inventory, GPS/GNSS availability, tariffs on Taiwan- and China-sourced goods, and changing CFC tax rules.
- Garmin now says auto OEM operations already reduced consolidated operating income because revenue and gross profit did not cover costs.
- Wearable-device risk now includes losing significant market share, while trade restrictions are also cited.
- Global-system risks now emphasize failures affecting order processing, manufacturing, distribution, invoicing, and online services.
What changed since the prior 10-K
New
- NewBusiness Risks
Our sales could be negatively impacted if dealers and distributors attempt to reduce their levels of inventory or if they do not maintain sufficient levels to meet customer demand
Dealers may cut inventory, favor competitors, demand more promotions, or be lost, reducing sales and gross margins.
- NewBusiness Risks
Many of our products utilize Global Positioning System (GPS) and other global navigation satellite systems (GNSS), which are critical to their functionality. There are risks related to our reliance on GPS and GNSS that could materially adversely affect our business, financial condition and results of operations
GPS or GNSS satellite failures, damage, sabotage, or delayed replacement could impair Garmin products and limit market opportunities.
- NewMacroeconomic and Industry Risks
The rapidly evolving international trade environment has created economic and operational uncertainties that could result in outcomes that could materially adversely affect our business, financial condition and results of operations
New or reclassified tariffs, duties, and trade restrictions could raise costs for goods and components sourced from Taiwan, China, and elsewhere.
- NewRisks Relating to Ownership of Our Shares
As a result of recent U.S. tax legislation, ownership attribution and income inclusion rules have changed over time as described below
Changed CFC attribution and GILTI rules may create additional U.S. shareholder income inclusions and tax consequences.
Dropped
- DroppedBusiness Risks
Many of our products rely on the Global Positioning System and other satellite systems
- DroppedLegal and Regulatory Compliance Risks
Changes to trade regulations, including trade restrictions, sanctions, tariffs, or duties, could significantly harm our results of operations
Reworded
- 93% rewrittenRisks Relating to Ownership of Our Shares
Changes in our United States federal income tax classification, or that of our subsidiaries, could result in adverse tax consequences to our 10% or greater U.S. shareholders
The risk now emphasizes stock ownership changes creating new 10% U.S. shareholders and Garmin’s inability to determine CFC status or income-inclusion requirements.
- 88% rewrittenBusiness Risks
We rely on independent dealers and distributors to sell our products, and disruption to these channels would harm our business
The detailed dealer and distributor threats were condensed into a general risk that distribution-channel problems could materially harm results.
- 55% rewrittenBusiness Risks
Our business has been and is expected to continue to be impacted by information technology system failures and network disruptions
The risk now expressly includes Garmin’s global distribution network and failures affecting order processing, invoicing, manufacturing, distribution, and online services.
Was: Our business and reputation have been and are expected to continue to be impacted by information technology system failures and network disruptions
- 50% rewrittenMacroeconomic and Industry Risks
Maturation or contraction of the market for wearable devices or categories of these devices could adversely affect our revenue and profits
The risk adds losing significant wearable-device market share and separately mentions tariffs, duties, sanctions, and other trade restrictions.
- 47% rewrittenRisks Relating to Ownership of Our Shares
Our officers and directors exert substantial influence over us
Insider ownership fell from approximately 19% to 15%, while the risk now includes influence when acting with other significant shareholders.
- 43% rewrittenBusiness Risks
We have made and may continue making significant investments in the auto OEM segment, the associated cost of which may negatively impact total company profits
The disclosure now says auto OEM performance has already reduced consolidated operating income because revenue and gross profit did not cover costs, removing the restructuring-cost reference.
Was: We have made and expect to continue making significant investments in the auto OEM segment, the associated cost of which may negatively impact total company profits if auto OEM segment revenue significantly declines
- 37% rewrittenLegal and Regulatory Compliance Risks
As a business that operates worldwide, we are subject to complex and changing global laws and regulations, which exposes us to potential liabilities, increased costs and other adverse effects on our business
The risk now specifies that regulatory changes may increase costs, restrict products or features, require product redesigns, and alter the supply chain.
Was: As a business that operates worldwide, we are subject to complex and changing global laws and regulations, which exposes the Company to potential liabilities, increased costs and other adverse effects on our business
- 37% rewrittenRisks Relating to Ownership of Our Shares
other factors as discussed in the previously listed risks
The stock-price risk changed its timing description from fluctuations occurring in recent years to fluctuations occurring from time to time.
- 36% rewrittenBusiness Risks
Our business would suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key personnel
- 33% rewrittenLegal and Regulatory Compliance Risks
Our business is subject to a variety of United States and international laws, regulations and other legal obligations regarding data privacy and protection
Was: Our business is subject to a variety of United States and international laws, regulations and other legal obligations regarding data protection
- 31% rewrittenRisks Relating to Ownership of Our Shares
The rights of our shareholders are governed by Swiss law
- 30% rewrittenBusiness Risks
Losses or unauthorized access to or releases of proprietary or confidential information, including personal information, could result in significant reputational, financial, legal, and operational consequences
- 29% rewrittenMacroeconomic and Industry Risks
Our business is subject to disruptions and uncertainties caused by geopolitical instability, war or terrorism
- 29% rewrittenFinancial Risks
Our operating results are subject to fluctuations and seasonality
Was: Our quarterly operating results are subject to fluctuations and seasonality
- 28% rewrittenRisks Relating to Ownership of Our Shares
The volatility of our share price could adversely affect investment in our common shares
- 21% rewrittenBusiness Risks
Natural disasters, catastrophic events, or climate change and associated requirements and pressures could affect our financial results
- 20% rewrittenBusiness Risks
We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business could be materially harmed if we fail to successfully identify, evaluate, complete, and integrate such transactions
- 20% rewrittenBusiness Risks
If we do not correctly anticipate demand for our products, we may not be able to secure sufficient quantities or cost-effective production of our products or we could have costly excess production or inventories
All 38 risk factors
Headings as the filing states them, in filing order.
Business Risks
- 01If we are not successful in the continued development, timely manufacture, and introduction of new products or product categories, overall demand for our products could decrease to the extent that total sales and profits decline
- 02If we are unable to compete effectively with existing or new competitors, the associated loss of competitive position could result in price reductions, fewer customer orders, reduced margins and loss of market share
- 03We may experience unique economic and political risks associated with companies that operate in Taiwan
- 04We have made and may continue making significant investments in the auto OEM segment, the associated cost of which may negatively impact total company profits43% rewritten
- 05Our business has been and is expected to continue to be impacted by information technology system failures and network disruptions55% rewritten
- 06Losses or unauthorized access to or releases of proprietary or confidential information, including personal information, could result in significant reputational, financial, legal, and operational consequences30% rewritten
- 07Our business would suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key personnel36% rewritten
- 08If we do not correctly anticipate demand for our products, we may not be able to secure sufficient quantities or cost-effective production of our products or we could have costly excess production or inventories20% rewritten
- 09Our products and services may be affected by design and manufacturing defects that could materially adversely affect our business, financial condition and results of operations
- 10Our products may contain undetected security vulnerabilities, which could result in damage to our reputation, lost revenue, diverted development resources, increased warranty claims, and litigation
- 11Natural disasters, catastrophic events, or climate change and associated requirements and pressures could affect our financial results21% rewritten
- 12We rely on independent dealers and distributors to sell our products, and disruption to these channels would harm our business88% rewritten
- 13Our sales could be negatively impacted if dealers and distributors attempt to reduce their levels of inventory or if they do not maintain sufficient levels to meet customer demandNew
- 14We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business could be materially harmed if we fail to successfully identify, evaluate, complete, and integrate such transactions20% rewritten
- 15Many of our products utilize Global Positioning System (GPS) and other global navigation satellite systems (GNSS), which are critical to their functionality. There are risks related to our reliance on GPS and GNSS that could materially adversely affect our business, financial condition and results of operationsNew
- 16We are dependent on the availability and unimpaired use of allocated bands within the radio frequency spectrum; our products may be subject to harmful interference from new or modified spectrum uses
Macroeconomic and Industry Risks
- 17Maturation or contraction of the market for wearable devices or categories of these devices could adversely affect our revenue and profits50% rewritten
- 18The rapidly evolving international trade environment has created economic and operational uncertainties that could result in outcomes that could materially adversely affect our business, financial condition and results of operationsNew
- 19Economic and geopolitical conditions and uncertainty could adversely affect our revenue and profits
- 20Public health emergencies, including epidemics or pandemics, could have significant impacts on our business
- 21Our business is subject to disruptions and uncertainties caused by geopolitical instability, war or terrorism29% rewritten
Legal and Regulatory Compliance Risks
- 22Changes in applicable tax laws or resolutions of tax disputes could result in adverse tax consequences to the Company
- 23Our intellectual property rights are important to our operations, and we could suffer loss if they infringe upon others’ rights or are infringed upon by others
- 24We have claims and lawsuits against us that may result in adverse outcomes
- 25As a business that operates worldwide, we are subject to complex and changing global laws and regulations, which exposes us to potential liabilities, increased costs and other adverse effects on our business37% rewritten
- 26Our business is subject to a variety of United States and international laws, regulations and other legal obligations regarding data privacy and protection33% rewritten
- 27Some of our products are subject to governmental regulation or certification. Failure to obtain required certifications of our products on a timely basis, either due to government shutdown or other delays in the certification process, could harm our business
Financial Risks
- 28Our results of operations and financial condition are subject to fluctuations in foreign currency translation
- 29Gross margins for our products may fluctuate or erode
- 30Our operating results are subject to fluctuations and seasonality29% rewritten
Risks Relating to Ownership of Our Shares
- 31The volatility of our share price could adversely affect investment in our common shares28% rewritten
- 32other factors as discussed in the previously listed risks37% rewritten
- 33Our officers and directors exert substantial influence over us47% rewritten
- 34The rights of our shareholders are governed by Swiss law31% rewritten
- 35We have limited capital reserves from which to make distributions without subjecting our shareholders to Switzerland withholding tax
- 36Changes in our United States federal income tax classification, or that of our subsidiaries, could result in adverse tax consequences to our 10% or greater U.S. shareholders93% rewritten
- 37As a result of recent U.S. tax legislation, ownership attribution and income inclusion rules have changed over time as described belowNew
- 38There is uncertainty as to our shareholders’ ability to enforce certain foreign civil liabilities in Switzerland and Taiwan
Other Garmin 10-Ks
- FY2024 10-K risk factors36 risks
Garmin faces significant operational exposure in Taiwan where principal manufacturing facilities for consumer products are located. The company relies heavily on the continuous availability of the U.S. Department of Defense Global Positioning System and radio frequency spectrum. Significant investments in the auto OEM segment create profit risks if revenue declines. Substantial regulatory and certification requirements, including FAA approvals, impact product timelines and costs.
Filed Feb 19, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.