GRMNGarmin

The Company allocates revenue to all performance obligations associated with tangible products containing separately identifiable ongoing services based on the respective performance obligations’ relative standalone selling prices (SSP), with the amounts allocated to ongoing services deferred and recognized over a period of time. These ongoing services primarily consist of the Company’s contractual promises to provide personal navigation device (PND) users with map updates and server-based traffic services. In addition, the Company provides map update services (map care) over a contractual period in certain hardware and software contracts with automotive original equipment manufacturers (OEMs). The Company has determined that directly observable prices do not exist for certain map updates, map care, or server-based traffic, as stand-alone and unbundled unit sales do not occur on more than a limited basis. Therefore, the Company uses the expected cost plus a margin as the primary indicator to calculate relative SSP of certain map updates, map care, and traffic performance obligations. The revenue and associated costs allocated to map updates, map care, and server-based traffic services are deferred and recognized ratably over the contractual service period or estimated life of the products. Additionally, the Company has offered certain other products and services with ongoing performance obligations for which the associated revenue is recognized over the contractual service period (typically ranging from 1 month to 3 years), including aviation database and other service subscriptions, incremental navigation and communication service subscriptions, mobile applications, and extended warranties. product.

We have in the past experienced, and expect to continue to experience, malicious attacks and other attempts to gain unauthorized access to our systems that seek to compromise the confidentiality, integrity or availability of proprietary and confidential information. Actual or anticipated attacks and risks have caused, and are expected to continue to cause, us to incur increasing costs, including costs to deploy additional personnel and protection technologies, to conduct additional employee training, and to engage third party security experts and consultants. A breach of our security systems and procedures or those of others in our global supply chain could result in significant data losses or theft of our intellectual property, confidential and proprietary information, or that of our business partners, as well as our users’ or employees' personal information, which could compromise our competitive position, reputation, operating results, and financial condition. Also, if we fail to reasonably maintain the security Such events could materially adversely affect our business, financial condition and results of our intellectual property, confidential and proprietary information, or that of our business partners, or the personal information of our users or employees, we may be subject to private litigation, government investigations, regulatory proceedings, enforcement actions, and cause us to incur potentially significant liability, damages, or remediation costs. Although we maintain cyber insurance coverage that, subject to policy terms and conditions and significant self-insured retentions, is designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise. operations.

Total operating income expense increased 46% 13% in absolute dollars and increased 440 basis points was relatively flat as a percent of revenue in fiscal year 2024 2025 compared to fiscal year 2023. The increase in operating income 2024. Operating expense, as a percent of revenue was segment net sales, decreased in the fitness and aviation segments by 220 basis points and 170 basis points, respectively, when compared to the year-ago period due to increased sales, increased gross margin sales and greater leverage of expenses. Operating expense, as a percent of revenue, and lower segment net sales, increased in the outdoor segment by 140 basis points over the year-ago period, as the year-over-year increase of operating expenses expense was greater than that of net sales. Operating expense, as a percent of revenue, as described above. The improved performance segment net sales, was relatively flat in fitness, outdoor, marine, the marine and auto OEM was partially offset by a decrease in aviation. Auto OEM experienced an operating loss in fiscal year 2024, and we expect auto OEM segments when compared to experience an operating loss in 2025. the year-ago period.

Certain cash balances are held as collateral in relation to bank guarantees. The total amount of This restricted cash was is reported within other noncurrent assets on the Company’s consolidated balance sheets and totaled $714 and $685 and $704 on December 28, 2024 27, 2025 and December 30, 2023, 28, 2024, respectively.