Garmin’s Subscription Revenue Is Growing Faster Than the Rest of the Business

We discovered a nugget of information in Garmin’s latest financial announcements. Connect+, inReach satellite services, and other recurring revenue streams are growing at least as fast as the overall business — possibly faster. Despite an initially disappointing launch, Nutrition Logging appears to be the likely driver of a positive bump in Connect+ subscription uptake.

Morgan Stanley analyst Eric Woodring identified this dynamic and raised it directly with CEO Cliff Pemble, noting that ratable revenue — the financial term for income recognised over time rather than at the point of sale — had decreased as a share of total revenue despite growing in absolute terms. He asked how much of a priority growing that ratable base was.

Pemble answered: “Our subscription-based business has been growing as strongly or even stronger than the overall business, but everything else is growing around it so much that it still hasn’t triggered that 10% threshold yet. We feel we’re in a good position. We have lots of ideas for things that we can offer people going forward, and we’re going to continue to build that business across every one of our segments.”

The 10% figure is a watershed. It represents a meaningful share of revenue and is likely to change how the market values Garmin. Software and subscription businesses command higher valuation multiples (Prospective P/E) than hardware businesses because their recurring revenue is more predictable and margins are higher. At below 10%, Garmin remains fundamentally a hardware company from a financial perspective. At 10%, that narrative begins to shift.

The reason subscriptions keep losing share despite growing fast is straightforward: the hardware business is growing faster. Fitness revenue alone grew 33% in 2025 to $2.36 billion. Against that scale, even strong absolute subscription growth barely moves the percentage needle.

Pemble gave the clearest indication yet of where Connect+ is heading. Earlier, he described the nutrition tracking feature as having a “very, very high” free-trial-to-paid conversion rate. He also referenced Connect+ expanding across segments — not just fitness but potentially marine, aviation and outdoor. An inReach satellite subscription is already in place for outdoor users. A Connect+ equivalent for aviation pilots, or a premium marine data service, would extend the subscription model well beyond the core running and cycling audience. It will be interesting to see what Garmin might add there beyond map-related features.

For Garmin customers, the question of subscription economics ultimately comes down to value. At present, Connect+ is priced at a level where the nutrition, sleep coaching, and training insights features represent good value for engaged athletes, but only if they can save by cancelling a subscription elsewhere (e.g. MyFitnessPal). The risk — as Garmin’s subscription ambitions grow — is that, as new features emerge, the de facto place for them is behind the paywall rather than as a carrot to tempt a hardware upgrade to a model that supports them. Pemble gave no indication of that direction, but it is the natural tension in any hardware-to-software transition.

Our Take

Garmin has more subscription services than simply the new Connect+, which Garmin devotees generally dislike. However, the recent meal scanning and Nutrition Logging feature represents a genuinely new set of features that Garmin can rightly put behind a paywall.

Reading between the lines of several comments from Garmin staff, it seems the company is actively seeking new subscription opportunities. That’s probably a good thing. It is wholly new features to the Garmin stable that give existing customers new options – albeit ones they have to pay for, having already spent a small fortune on buying a premium device.

I’d be interested in what readers think should be added as new features across the Garmin product range. More importantly for the analysts, can this realistically take Garmin over the 10% service/subscription threshold? That would likely be music to shareholders’ ears — triggering a valuation re-rating even without any change in underlying earnings.

Last Updated on 29 May 2026 by the5krunner

the5krunner

tfk is the founder and author of the5krunner, an independent endurance sports technology publication. With 20 years of hands-on testing of GPS watches and wearables, and competing in triathlons at an international age-group level, tfk provides in-depth expert analysis of fitness technology for serious athletes and endurance sport competitors. ID