Garmin Ltd

NYSE:GRMN

Earnings Call Transcript

[Operator]

Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Garmin Limited Fourth Quarter 2024 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to Teri Seck, Director of Investor Relations. You may begin.

[Teri Seck, executive]

Good morning. We would like to welcome you to Garmin Limited's Fourth Quarter 2024 Earnings Call. Please note that the earnings press release and related slides are available at Garmin's Investor Relations site on the Internet at www.garmin.com/stock. An archive of the webcast and related transcripts will be -- also be available on our website.

This earnings call includes projections and other forward-looking statements regarding Garmin Ltd, and its business. Any statements regarding our future financial position, revenues, segment growth rates, earnings, gross margins, operating margins, future dividends or share repurchases, market shares, product introductions, foreign currency, tariff impacts, future demand for our products and plans and objectives are forward-looking statements.

The forward-looking events and circumstances discussed in this earnings call may not occur, and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K filed with the Securities and Exchange Commission. Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and Chief Executive Officer; and Doug Besson, Chief Financial Officer and Treasurer.

At this time, I would like to turn the call over to Cliff Pemble.

[Clifton Pemble, executive]

Thank you, Terry, and good morning, everyone. As announced earlier today, Garmin delivered another quarter of outstanding financial results as our products continue to resonate with customers. Consolidated revenue increased 23% to $1.82 billion, a new fourth quarter record, and we achieved growth and record revenue in each of our 5 business segments. .

Gross margin expanded 100 basis points to 59%. Operating income increased 52% year-over-year, and operating margin expanded over 500 basis points to 28%, reflecting both improved gross margin and operating leverage. This resulted in pro forma EPS of $2.41, up 40% over the prior year. 2024 was a remarkable year of growth and achievement for Garmin. While we were optimistic at the beginning of 2024, and we consistently outperformed even our highest expectations throughout the entire year.

We achieved growth in every segment, resulting in record segment revenue and record consolidated revenue. 2024 was also a year of historical significance, marking our 35th year in operation. Since we were founded in 1989, we have delivered more than 300 million navigation and communication devices, including more than $18 million delivered in 2024.

Consolidated revenue increased 20% to $6.3 billion. Gross margin expanded over 100 basis points to nearly 59%. The Operating income increased 46% to nearly $1.6 billion and operating margin came in at 25%. We believe our performance is the direct result of our robust product portfolio. Looking ahead, we have many product launches planned for 2025 that will further strengthen our portfolio with some representing new categories for Garmin. With this in mind, we anticipate 2025 consolidated revenue will increase approximately 8% to $6.8 billion.

Also, our strong results and positive outlook give us confidence to propose an annual dividend of $3.60 a share, reflecting a 20% increase over the prior dividend amount, which will be considered by shareholders at the upcoming annual meeting. Doug will discuss our financial results and outlook in greater detail in a few minutes. But first, I'll provide remarks on the performance of each business segment.

Starting with Fitness, 2024 was an exciting year as demand for running, cycling and wellness products has been robust, and new customers are embracing the healthy active lifestyles our brand represents. We experienced growth in every product category, led by strong contributions from advanced wearables.

For the year, fitness revenue increased 32% to $1.77 billion. Gross margin was 58%, a 480 basis point improvement over the prior year primarily driven by lower product costs and favorable mix. Operating income more than doubled year-over-year to $483 million. and operating margin expanded approximately 1,000 basis points to 27%, reflecting both improved gross margin and operating leverage. During the quarter, we launched Lily [indiscernible] Active, our smallest GPS-enabled smartwatch featuring an elegant design and up to 9 days of battery life in smartwatch mode.

Looking ahead, we anticipate another strong year for the Fitness segment with many new product introductions planned throughout the year. With this in mind, we expect fitness revenue to increase approximately 10% for the year. The Outdoor segment delivered a strong year of product achievements and revenue growth. 2024 revenue increased 16% to $1.96 billion, driven primarily by adventure watches following the launch of the highly successful Phoenix series.

Gross margin was 67%, a 340 basis point improvement over the prior year, primarily driven by lower product costs and favorable mix. Operating income exceeded $700 million, and operating margin expanded 550 basis points to 36%, reflecting both improved gross margin and operating leverage. We are strategically focused on creating growth opportunities by introducing new product categories and penetrating new markets. During the quarter, we launched 2 products that are rising to the definition of a halo product because they are changing the game in their respective markets.

The first product I want to mention is the approach 50 which is the only portable golf launch monitor with a built-in simulator. It features a 10-inch color touchscreen display and includes a preloaded database of more than 43,000 golf courses that could be played on the course or virtually using a built-in simulator.

We also launched the Descent X50 I, our first large-format dive computer, this device includes a vivid 3-inch color display, providing rich information that is readable at a glance and its rugged design is purpose-built with leakproof buttons, a sapphire lens a 20 ATM dive rating and an integrated backup guidelines.

Looking ahead, we expect that our strong outdoor product lineup will result in revenue growth of approximately 10% for the year. Looking next at Aviation, revenue increased 4% to $877 million driven by growth in both OEM and aftermarket product categories. Gross and operating margins were 75% and 24%, respectively, resulting in operating income of $211 million, a decrease of 7% year-over-year. The decrease in operating income is primarily due to increased R&D spending as we develop new products and certify new aircraft platforms.

2024 was a year of milestone accomplishments for aviation. We were named #1 in aviation product support for the 21st consecutive year by Professional Pilot magazine. We also celebrated the legacy of our founders, Gary Burrell and Dr. Min Kao, upon their induction into the National Aviation Hall of Fame. Aviation Safety is once again top of mind after recent tragic accidents that have shocked and saddened everyone.

Our strategic focus on aviation safety has resulted in many award-winning innovations designed to save lives, such as envelope protection, safe guide, safe taxi and emergency auto land. Our most recent safety innovation, runway occupancy awareness technology was honored with a prestigious Laureate Award from Aviation Week Network as the first available system, we can [indiscernible] pilots if other aircraft are occupying an active runway. During the quarter, Textron Aviation announced the selection of our G3000 Prime integrated flight deck for the Citation CJ4 Gen 3 aircraft. The G3000 Prime was also selected by Beta technologies for the EYLEA, electric, conventional takeoff and landing aircraft, which conducted its inaugural flight during the quarter.

These announcements are the first of many we anticipate as OEMs embrace this highly advanced next-generation flight deck. Looking forward, we expect growth to accelerate throughout 2025, and as new aircraft platforms under production and as conditions improve in the aftermarket. With this in mind, we expect aviation revenue will increase approximately 5% for the year.

Turning next to the Marine segment. Revenue increased 17% to nearly $1.1 billion, exceeding the $1 billion threshold for the first time. Growth was primarily driven by new revenue from the 2023 acquisition of JL Audio. Excluding jail audio, marine revenue increased 6%, outperforming the broader market and strengthening our position as the world's largest consumer marine electronics company.

Full year gross margin was 55%, a 180 basis point improvement over the prior year. and was favorably impacted by lower product cost. Operating income increased 32% year-over-year, and operating margin expanded 240 basis points to 22%. The reflecting both improved gross margin and operating leverage. 2024 was also a year of milestone accomplishments for Marine as we were named NMEA Manufacturer of the Year for the tenth consecutive year, and we were named Most Innovative Marine Company by sounding straight only for the second consecutive year. During the quarter, we were recognized with the National Boating Safety Award from CTO Foundation for the fourth consecutive year.

Also during the quarter, JL Audio received an innovation award for the pavilion line of outdoor home speakers from home technology specialists of America. This award validates the outstanding audio performance that the pavilion line delivers. As I previously mentioned, Garmin has been consistently outperforming the broader marine market, and we expect to do so again in 2025. The marine market remains soft but has stabilized at a level from which we can anticipate recovery and growth. With this in mind, we expect marine revenue will increase approximately 4% for the year. Moving finally to the auto OEM segment.

Revenue increased 44% to $611 million, primarily driven by growth in domain controllers. Gross margin was 18%, and the operating loss narrowed to $39 million for the year. During the year, all remaining BMW models were equipped with Garmin domain controllers paving the way to achieve our maximum potential revenue from the BMW program in 2025. We also captured additional program wins and made significant progress preparing for our next major program that is expected to enter production in 2027.

I'm proud of the progress that we've made in our quest to build a successful auto OEM segment. As many of you know, the outlook of major automakers is softening, which changes the revenue trajectory we previously shared. Even so, we expect 2025 to be another pivotal year of growth and progress towards the profitability stage for this growing business segment. With this in mind, we expect revenue to increase approximately 7% for 2025.

That concludes my remarks. Next, Doug will walk you through additional details on our financial results. Doug?

[Douglas Boessen, executive]

Thanks, Cliff. Good morning, everyone. I'll begin by reviewing our fourth quarter and full year financial results. [indiscernible] comments on the balance sheet, cash flow statement, taxes and 2025 guidance. posted revenue [ $1.820 ] billion for the fourth quarter represent, a 23% increase year-over-year. .

Gross margin was 59.3%, increased 100 basis points over the prior year quarter, primarily due to lower product costs. Operating expense as a percentage of sales was 30.9%, a 440 basis point decrease. Operating income was $516 million, a 52% year-over-year increase. Operating margin was 28.3%, a 540 basis point increase from the prior year.

Our GAAP EPS was $2.25, pro forma EPS of [ $241, ] 40% increase in prior year pro forma EPS.. Looking at the full year results, [indiscernible] revenue of $6,297 billion, representing a 20% increase year-over-year. Gross margin was 58.7%, a 120 basis point increase from the prior year primarily due to lower product cost.

Operating expense as a percentage of sales was 33.4%, [ 320 basis ] point decrease. Operating income was $1,594 billion, a 46% increase. Operating margin was 25.3%, 240 basis point increase from the prior year.

Our GAAP EPS was $7.30, [indiscernible] EPS $7.39, a 32% increase on the prior year pro forma EPS. Next, we look at fourth quarter revenue by segment and geography. The fourth quarter, we achieved record revenue on a consolidated basis for each of our 5 segments. We achieved double-digit growth in 3 of 5 segments by the fitness segment with 31% growth, followed by the Auto OEM segment, 30% growth in the Outdoor segment with 29% growth. By geography, we achieved double-digit growth across all all regions led by the EMEA region with 34% growth.

APAC region in Americas region at 18% and 7% growth, respectively. For full year 2024, we achieved 20% consolidated growth, record revenue on a consolidated basis and record revenue for each of our 5 segments. By geography, we achieved 31% growth in [indiscernible], 16% growth in Americas and 12% growth in impact. Looking next, operating expenses. Fourth quarter operating expenses increased by approximately $40 million or 8%. Research and development increased by $22 million. SG&A increased by $19 million.

Both increases were primarily due to personnel-related expenses. A few highlights on the balance sheet, cash flow statement, dividends and share repurchase. Ended the quarter with cash and marketable securities of approximately $3.7 billion. Accounts receivable increased sequentially and year-over-year to $983 million due to strong sales in the fourth quarter. Inventory balance increased year-over-year to approximately $1.5 billion. During the fourth quarter 2024, we generated free cash flow of $399 million, an $18 million decrease from the prior year quarter.

For the full year 2024, we generated free cash flow of approximately $1.2 billion, a $56 million increase in the prior year was due to improved earnings, partially offset by increased working capital needs. Our full year 2024 capital expenditures $194 million, consistent with the prior year. 2025, We expect free cash flow to be approximately $1.1 billion with approximately $350 million in capital expenditures. In 2025, we expect to continue to make investment platforms to grow, including facilities and IT-related products. 2024, we paid dividends approximately $572 million.

Also, we announced our plan to seek shareholder approval for a $0.60 increase in our annual dividend beginning with June 2025 payment. [indiscernible] with a cash dividend $360 or $0.90 per share per quarter, a 20% increase from our current quarterly dividend of $0.75 per share. During 2024, we used $62 million of cash to repurchase company shares. At year-end, we had approximately $238 million remaining in the share repurchase program which authorized through December 2026. Our full year 2024 pro forma effective tax rate was 16.7% compared to 8.5% in the prior year. Increase in effective tax rate is primarily due to the increase in the combined Switzerland tax rate in response to global minimum tax requirements.

2025 pro forma effective tax rate is expected to be 16.5%, which is comparable to the 2024 tax rate. Turning next to our full year 2025 guidance. We estimate revenue of approximately $6.8 billion, an increase of approximately 8% for 2024. We expect gross margin to be approximately 58.7% consistent with our 2024 gross margin. We expect an operating margin of approximately 25% is comparable to the 2024 results.

The full year pro forma effective tax rate is expected to be approximately 16.5%, which is comparable to the 2024 tax rate. These results in expected pro forma earnings per share approximately $7.80, a 6% increase over the 2024 pro forma earnings per share.

This concludes our formal remarks. [indiscernible] can you please open the line for Q&A?

[Operator]

[Operator Instructions] Question comes from the line of Joseph Cardoso with JPMorgan.

[Joseph Cardoso, analyst]

And congrats on the results

[Audio Gap]

I guess maybe the first question is just related to when it comes to the customer base and when we introduce new products, what mix of those are new versus existing. But in general, especially in the wearables area, we're seeing many more new customers coming to Garmin, and we're benefiting from market share gains,; which is driving our results.

Looking forward to 2025, we really see more of the same. Of course, we recognize that these are outstanding results. So we're trying to be realistic about our growth, but 10% is a fabulous outlook, and we're excited to see what the year will bring.

No, I appreciate the color there, Cliff. And then maybe as just my follow-up here. It's more on the operating margin guidance kind of suggests a slightly lower operating leverage or flow-through than we typically see from Garmin. Maybe, Doug, can you just walk us through the puts and takes here and kind of what we should be considering or factors that are influencing maybe the softer leverage for 2025 than what we've historically seen from the company?

[Douglas Boessen, executive]

Yes. It relates to -- as it relates to the operating margin, the gross margin, we're expecting that to be relatively consistent year-over-year, which we also expect as it relates to our operating expenses as a percentage of sales, we're expecting to be up about 30 basis points. That 30 basis points is coming from R&D -- for SG&A, we expect as a percentage of sales to be relatively flat. And that investment in R&D is basically investments for growth. Those investments are really for innovation and all the different product launches that we do have coming up for the next year. .

[Operator]

Your next question comes from the line of Ben Bollin with Cleveland Research.

[Benjamin Bollin, analyst]

I wanted to piggyback that last question, Doug. With respect to gross margin, the implied guide, or the explicit guide on the revenue growth across categories really suggests favorable mix, your higher-margin categories grow as a percentage of revenue into '25. So curious how you think about flat gross margins when outdoor, fitness, aviation growing as a percentage of mix into the out year? And then I had a follow-up.

[Douglas Boessen, executive]

Yes. As it relates to gross margin on a consolidated basis, yes, we do expect that to be relatively consistent. And there's a lot of different variables that go into the gross margin. We have a product mix, as you mentioned, component costs, overhead per unit et cetera. And so there's a lot of mix in there from that standpoint. But we're thinking about as it relates to gross margin by segment, there's not any real major differences we're expecting gross margin by segments out there, there may be some puts and takes as we move ever met through the year, but relatively consistent for our gross margins by segment.

[Benjamin Bollin, analyst]

Okay. At Cliffs, the performance in EMEA has been really remarkable in the last couple of years. I'm curious what you attribute to the success there. Could you talk about the dynamics of maybe more industrialized versus emerging markets? And any go-to-market efforts that have changed really driving that outperformance? .

[Clifton Pemble, executive]

Yes. In EMEA, I would say that the strength there is primarily driven by the relative stronger benefit we get from the wearables and consumer market in EMEA. In some of the countries, the major countries, we're the strong #2 player in wearables. Of course, Americas dynamic is slightly different. So we're the #3 here. But in Europe, we've been much stronger as a marketplace over there with our product line.

[Benjamin Bollin, analyst]

Okay. My last one is, looking at auto OEM with respect to 2025, you mentioned capturing BMW opportunity and kind of get into your normalized run rate. Could you share any thoughts on the way we should think about the margin of this business, both gross and EBIT margin and how it scales over time and how potential new wins or future platform opportunity in 2027 and beyond will influence those figures further.

[Clifton Pemble, executive]

Yes, I think we've talked about the margin profile of this business in the past. And consistent with what we said, we believe this business is a mid-teens kind of gross margin and kind of mid-single digits operating margin. And that's clearly what we're still driving for. We have been successful in securing new business for the future, including the one that I mentioned that is coming in 2027, representing our largest win to date and other smaller wins across the globe that help fill in both both in terms of volume as well as margin profile that helps support that outlook that I mentioned.

[Operator]

Your next question comes from the line of Erik Woodring with Morgan Stanley.

[Erik Woodring, analyst]

Maybe just [indiscernible] 2025 revenue were $800 million. Obviously, market conditions have softened since you originally gave that guide. But you have, obviously, this new large win ramping in 2027. So I'm just -- can you maybe just help us better understand, one, the primary factors causing the 2025 outlook outside of market conditions? Have anything changed kind of at the micro level. And then two, how -- any advice in how we should be thinking about maybe the shape of the growth curve as we bridge 2025 with that 2027 win? And then I have a follow-up. .

[Clifton Pemble, executive]

Okay. Yes. So definitely 2025 was below our expectations that we had shared a couple of years ago, shaving about $140 million off of the outlook that we had back then. And this is 100% due to the softening outlook of automakers, particularly the higher-end automakers that are operating in the China market, which has been struggling probably more than than other areas, although globally, it's generally weak. So there's really no other factor other than that. There's no other smaller factors at play really we definitely -- we're anticipating a much stronger outlook from them, but conditions change. So as we look forward, to the 2027.

We do expect as we

[Audio Gap]

you go back a year ago, you guided to 2024 revenue of $5.7 billion and EPS of $540 million. You ended performance expectation especially on the profitability. And I'm just wondering [indiscernible] kind of the same degree relative to new services in [indiscernible]

[Audio Gap]

on what you learned about your performance in 2025 and New Year coming into

[Audio Gap]

our initial guide was more conservative than obviously where we ended up and perhaps wondering if our 2025 outlook has the degree of conservatism built in. Absolutely, 2024 exceeded all of our expectations, internal and external. And we did also feel that there was a lot of potential in 2024. So we worked very hard to achieve everything that we could. As we look to 2025, we -- of course, always start our year and try to be pragmatic in our outlook. There's a lot of the year that's ahead of us. A lot of the revenue that comes in the back half of the year with seasonality, especially in the consumer markets.

So we're trying to be pragmatic and deliver something that we have high confidence in. and we'll continue to work throughout the year to achieve and overachieve what we said.

[Operator]

[indiscernible] with Barclays.

[Unknown Analyst]

Just two quick ones. Firstly, I just want to double-click on the auto OEM. Just curious like in terms of the profitability kind of obviously, you laid out target for MSD OEM medium term. Just curious whether you expect to turn profitable kind of in the next couple of quarters? Just kind of near term, like any thoughts on sort of the breakeven level kind of going to kind of low single-digit. Just curious if you can impact some of the near-term dynamics in terms of the bottom line for the auto OEM.

[Clifton Pemble, executive]

Well, auto OEM profitability is obviously our goal. This is a very dynamic business. And as we've pointed out, we're affected by the ups and downs of our customers, too. So we're managing through that. I think we're doing very well. I would like to point out that we report all of our segment results on a GAAP basis. So we don't allocate cost to overarching corporate segments that help address that segment. So what you're seeing with our auto OEM segment is pure GAAP results. and our profitability metrics may not match point for point for everyone else in the industry. But that said, our segment -- auto OEM segment still provides very meaningful contributions in margin that cover a portion of our corporate costs that wouldn't go away if we didn't have this portfolio.

And we also achieved significant leverage in our manufacturing as well as our supply chain by combining the volumes that we have across our business. 18 million units a year is very substantial and very attractive for our suppliers. So we're able to to achieve cost savings, the benefit of which you are seeing in all of the other segment results.

[Unknown Analyst]

Okay. Just a quick one. Just as we step back kind of zoom out in terms of the high level on the consumer, is there anything kind of you would like to call out kind of maybe different versus kind of last quarter, kind of 3 months ago in terms of the consumer backdrop? And especially if you can address some of the selling sell-through, especially as it relates to some of the flagship products in terms of restocking cycle in the space of our board. Just curious over the next couple of quarters, whether you should see sustained the momentum just on the flagship trip product, if you will, and just any sort of sell-through kind of [indiscernible] to cloud versus last quarter.

[Clifton Pemble, executive]

Yes. I think we've probably made most of our remarks. I would say in terms of the consumer and as we looked at the results of Q4 as well as our registration behavior that we can see in near real time the sell-in and the sell-through was very well matched, and we believe that the retail channel is not overstocked. It's at a healthy level, and we continue to see strong registrations in our products from our perspective and the kinds of products that we offer and the customer bases for those products, I would say that those customers seem to be fine. We don't want to say that there's no consumer pressure because we know that there is -- but in general, the embracement of our products has been very strong, and we feel good about where our customers are at.

[Operator]

Your next question comes from the line of David McGregor with Longbow Research.

[David S. MacGregor, analyst]

Congratulations on strong quarter. Great performance. I guess I want to start by just asking about lower product costs because you called that out in each segment. And I'm just trying to get a sense is, obviously, there's some operating leverage benefit here from the strength in unit volumes. But is there something else going on here from the standpoint of variable costs or anything from a structural standpoint that would be helpful for the modeling? .

[Clifton Pemble, executive]

Well, increased production definitely allows us to leverage our investments and higher volumes, of course, more efficiencies on the production line. And as I just mentioned to George, the added volumes that we have with our combined business, over 18 million units last year allows us to have more efficiency in our overall supply chain and component purchasing. So we're seeing benefits from that and expect to continue to see that.

[David S. MacGregor, analyst]

Okay. So it's scale benefits. There isn't anything kind of from a structural standpoint is changing? .

[Clifton Pemble, executive]

No, no. Yes, we are very clear. It's definitely the scale.

[David S. MacGregor, analyst]

Right. Got it. And then secondly, I'm wondering, I guess, if you could talk about tariffs, I guess, somebody has to ask the obligatory question. You've got Taiwanese manufacturing. You've got the BMW, which just gives you some indirect exposure to the extent that there's tariffs on foreign automotive production. Can you just talk about your exposure there? .

[Clifton Pemble, executive]

Well, I think there's exposure everywhere as it seems, and it can change, of course, rapidly. So I think everyone is still waiting to see what what really transpires. I believe that we are probably optimally positioned in terms of all of the discussions that have been going on while we have exposure here and there. I think for the most part, our supply chain is is out of the way of where most of the attention is being focused right now. So we we could have some impacts. We don't really know how to quantify that, but we're -- we believe that we're in a good position to minimize the impact.

[David S. MacGregor, analyst]

Do you have anything in the guidance for that now? .

[Clifton Pemble, executive]

No, there's really nothing that you could plan for right now. Again, that's -- there's a lot of changes almost on a daily basis. So we'll just have to wait and see. But at this moment, we don't anticipate that there's going to be major impacts.

[Operator]

Your next question comes from the line of Ivan Feinseth with Tigress Financial Partners, LLC.

[Ivan Feinseth, analyst]

Congratulations on another great quarter and a great 2024. My first questions are on the 2 really great new products you launched the the approach of simulator and the cent diving computer. These are more higher-priced products. Are these targeted more? Are you at the professional markets? Are you seeing, let's say, interest or purchase for the dive computer from die professionals, which would be like a new channel for you, maybe the ones that work on oil rigs or in shipyards. And the same thing for the approach golf simulator. Are you seeing a lot of interest, let's say, from golf pros who use it for teaching or for -- from golf schools? .

[Clifton Pemble, executive]

Yes, I would say I've been -- on both of those products, really, the customer base is a broad range Specific to dive, of course, these are very serious dive electronics. And so consequently, it definitely appeals to a person that is more serious about the sport, but we see interest in that product across a range of enthusiasts from on -- down to others, including professional divers, work divers that kind of thing.

So it's a broad range. And the same is really true for the -- there's a lot of people that like to have those in the garage or in their rec room, especially when winter weather is so bad, they can play courses wherever they want to. And this product is unique because it can be taken out to the actual golf course and use on course as well. So it's really a broad range. We don't really see a specific customer base that is gravitating to that product. And we love that because appealing to a broad range is always better.

[Ivan Feinseth, analyst]

Yes. So my friends who know that the approach or the price has a lot of features that are in similar items that are 2, 3, 4x the price. So [indiscernible] .

[Clifton Pemble, executive]

[indiscernible] pricing.

[Ivan Feinseth, analyst]

And then my second question is on the -- on your connected cabin display, which was really, I thought incredible at the CES, what kind of feedback did you get? Or are you getting on that? .

[Clifton Pemble, executive]

I think we've got really good feedback on the unified cabin. It is, of course, a futuristic investment on our part so that we can demonstrate to automakers our capability, both in terms of innovative product design as well as shaping the future of the automotive industry. So we see a lot of follow-up interest in that, and it may not necessarily results in a car that you see with something called the Unified cabin, but the technologies we're demonstrating and the underlying core electronics and systems that we're designing for it will definitely become part of future cars.

[Ivan Feinseth, analyst]

I thought it was pretty cool. I would like a car with all that. Well, wishing you a big 2025. .

[Clifton Pemble, executive]

Yes. I think we all love to see that demonstrator and we all wish we had a car [indiscernible].

[Operator]

Your next question comes from the line of Noah Zatzkin with KeyBanc Capital Markets.

[Noah Zatzkin, analyst]

Maybe just a couple for me on the marina industry. Obviously, 2024 was tougher from an industry perspective. I think new boat retail in the U.S. was down close to 10%. And new boat shipments were down over 20%. Obviously, you guys grew 6% organically, which implies pretty substantial share gain there. So I guess, first, if you could just remind us how to think about the mix of the business from an OEM versus aftermarket perspective? And then if we were to see some stabilization in the industry in '25. I think your guidance is for 4% growth. So just any reason to think that might be a bit conservative if the industry were to stabilize.

[Clifton Pemble, executive]

Yes, I think we definitely continue to see share gains across our product line. For us, the mix products is more than half is retail aftermarket, although growing sizable amount is OEM as well. In terms of the overall market condition right now, I would say that, again, we don't see big downswings. We also don't see big upswings. I don't think the market is going to snap back to double-digit growth without some other catalysts. But it's still a very solid market and many have been calling for growth for quite a while, and they mostly been wrong because the market has just taken some time to correct itself after COVID.

But in general, we see stabilization. We believe that from here, it's kind of something we can build on. And if the market performs better, we would expect, of course, that we would also outperform.

[Operator]

That concludes our Q&A session. I will now turn the conference back over to Terry Tag, Director of Investor Relations for closing remarks.

[Teri Seck, executive]

Thank you all for joining us today. Doug and I are available for callbacks. We will be talking to many of you soon. Have a wonderful day. Bye. .

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.