Logitech International (LOGI) 23 Jan 182018 Q3 Earnings call transcript

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I would like to welcome everyone to Logitech's Third Quarter 2018 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator of at Head begin you your conference. Investor Lu, Logitech, Relations may Ben

Welcome Logitech webcast Investor quarter our to discuss Kelly. well at our you, Thank the the slides, and call financial XXXX. press site, as for Web are prepared year online remarks the a conference of results the this fiscal Relations third live page of as The Logitech.com. release, of company's to call available

statements, call, being with Please The substitute this provided or financial to to a Litigation is result involve statements on any as we for Safe accordance reporting with Non-GAAP Non-GAAP actual GAAP. in as from note results could as risks should financial prepared of including as course are in in better superior in consolidated statements materially non-GAAP update our forward-looking meant otherwise results forward-looking uncertainties operating are or forward-looking noted. business; basis, company of reported considered have not will a understand however, non-GAAP forward-looking statements developments respect include new conjunction differ help be to GAAP results make except only otherwise. isolation results. inherent used that you Harbor the to made future and or to XXXX. During today's undertakes a measures be and limitations with no SEC. call or the Logitech's Reform Act The that other Securities with revise obligation our and may the filings statements of results the of noted quarterly and under

noted on Investor on This recorded, We reconciliation provide slides of between for these year-over-year replay currency. are be numbers the and and Logitech items. otherwise, to Relations review site. Web encourage call the site. comparisons and between Unless is are Relations constant will and and Investor periods available GAAP release in press our non-GAAP page Web listeners a Our posted being

and today Financial now Chief us Bracken. joining President Chief and Bracken turn Officer; Darrell, over I'll Executive Now, the call to Vincent from Palette, Lausanne are Officer.

And you to us. joining all thanks Thanks, Ben. for of

underlying You've ever, except all was for Demand significantly our XX%. for products in strong, even a growth, up categories of we were grew growth, powerful quarter product and sell-through delivered Pacific, sales sales very those stable. sales in PC our up seen regions, anticipated. EMEA biggest the that over in of three strong, than our X% with delivered peripherals, only remains America normal All line also our and stronger double-digit sell-through we XX%. was compare, but seasonality. against Two tough Asia QX

Our our also execute. that just operating delivered to despite income sales a was growth ability We strong, profit up and drag net as on growth XX%.

During from will difficulties move our to the call, significantly backup fiscal basis largely [ph] the the quarter. in coupled determination in as points DC demand year. margin placed with two is gross customers now, execute. XXX plan, exit fully drag about our fulfill our The resolved This of the we resolved and centers had to transitioning our to one a We experienced Americas. supplier a instead we'd because exclusively were QX the run we one, shipments as distribution just we as earnings logistics of well largely our to air increasing didn't the new mentioned in two be

players the but had they XXX% didn't us to So, able supplier hold a execute. yes and be deliver, Investors pick we accountable. right who rely to we sure make crystal-clear, let me be on ourselves should

to growth Now look [ph] category. by

across As I of mentioned, our we grew double all almost digits categories.

our through our Ears roll for in BLAST holiday new a quarter, and and of speakers ahead one. each transition, Last Ultimate of MEGABLAST, highlight Let product remember went quarter. time me you'll our

in well and sales & large runway here sold posted growth like product FREEDOM our good Jaybird it's will but strong. grew from We From This this with out wireless and doing very is our a contribution holiday MEGABLAST, grew X. in to XX% the WONDERBOOM, low, carve quarter, XX expectations. to of quarter, still in space in we from MEGABOOM also as Wearables penetration and but Audio our Alexa-enabled Jaybird QX. we pint-sized our BLAST very grew was strongly quarter, and beyond earphone for other Run, sell-out and growth true that next there's our Wireless our first also long products. lines, to innovate. continue strong earphone, Speakers XX%. continue I our other Mobile expect growth level don't PC the

As a product. runner, love Run Jaybird use and our I absolutely

to consecutive in XXth We've the sales its and the of expect still delivered powerfully excluding we racing Gaming group particularly sales. heavily as our to Gaming ASTRO up of that quarter our titles with quarters. to strong, is we skewed several business quarter and growth. double-digit and for of completed wheels quarter, out that grew Even ASTRO two the it Gaming, growth, the ASTRO share point Our full-year several our past QX, December overall was game integration too, X% strongly in business In representing I'd XX%. as about as captured the has launched. steering contribute overall major ASTRO, grew business points our

mice acceptance tremendous wireless products of keyboards. and continue gaming see both across to also We our

and You had heard last trouble stop me quarter talk talking it. to about about I POWERPLAY,

you've XX%, approximately adoption portfolio, Collaboration PC gaming in while and almost you gives pad life for $XXX supply. charging the battery that do Video our run innovate demand seen your be us gaming PC far drive traditional you of $XXX rate or annual tell can sure across we'll peripherals. I for the gaming wireless in similar greater infinite million. play. of million sales peripherals, our to mouse wireless an Well, POWERPLAY exceeded to can wireless reported growth continue and leader you wireless Our what reaching We're

capture slower for low-cost solutions business growth need invest fundamental collaboration the XX%. quarter, video was than to was sales net than sell-through the stronger, growth underlying remains we'll extremely the The opportunities. to continue the stronger into cloud-based robust, and last While this much

group continued the solid Our grossed Harmony of the we've our Sale both that in security past the seen in Hub by as few quarters. of family XX%, well X, our Smart momentum as driven Circle QX contribution solution. Home products strong camera home

Peripheral X% as this quarter, recent Finally, were very PC our remained sales mentioned, down yet stable consistent trends. I with and sell-through,

third our our products, sales other and new grew keyboard, latest quarter growth. of CRAFT contributed accessory including off MX nicely Tablets Our the the in QX, a trackball great and new to MX X% are ERGO our results. and flagship start consecutive marking

this likely with digit year double growth. will fiscal end We

units. the year We XXXX the in growth fiscal have in of coinciding first with growth full positive since the to Apple's iPad return category

call I'll Now Vincent. over the pass to

Thank our playbook and QX, consecutive we and quarter. products business great of Bracken and past we categories, but share consistent performance made of -- top-line in seventh BLAST, levers, we market repeating our our quarter MEGABLAST, We opportunities total and acquisitions. key [indiscernible], is including In was share growth, on we double of gained of delivered you, of quarter digit sales growth. our this up growing mentioned, it's quarter another into Bracken. in adjacent acquisitions. just We share as ASTRO not gained the X% full markets, market it, every delivered launched our successfully worth our delivered in growing one first in and these QX the adding highly which market, seasonal market playing timing growth that of this accelerated

objectives. QX opportunities. in take are of And investing growth of market the many advantage capabilities our our the long-term progress we towards to are XX% demonstrated We making

comes growth growing with Now sometimes pain.

As transition, ramp that Americas at support of QX operating early hired changes QX. procedures, and the mentioned up we our October, our last the volumes party distribution experienced to end third growth we in significant center the in of had and the

VC had a online of more increase on labor bring to rely much As and prior air this, result freight temporary partner, heavily. back we our

Our points priority we issue one the saw incremental The support cost X.X in of to to that Americas. XX% about this of the in gross solving amounted time operation margin. was increase demand

fiscal we one us, Now with year the distribution just back this party center exit to will QX in Americas. behind third

in And down so, XX.X% points margin was year-over-year. gross the our quarter, basis non-GAAP XXX

VC our seasonally around in to what our XXX down QX, It margin term a In is cost long million, $XXX healthy lower gross operating very normally range non-GAAP promotions. gross XX holiday the have sales, margin Excluding XX%. by increased impacted mix and year-over-year. expenses to of XX% of X% of quarter would gross basis midpoint [indiscernible] one-time remains the of transition, points

expenses discipline balancing in Excluding near-term OpEx demonstrates would spend gross margin. risen have our growth modest This operating ASTRO, X%. with only our our

while X%. we R&D XX% to support a and top marketing this increased sales delivered line grew spending quarter Our expense growth solid

lower expenses G&A the hand, we other drive as our we can. to continue efficiently On as

ever the strong percent at from G&A the pickup sales Our though fell benefit to a X.X% level sales of ratio, these spending of as of lowest course, revenues. in seasonal

So step XX% if Americas. in in non-GAAP sales operational also was the back, you constant grew currency distributional despite center QX income of while charge operating our XX% onetime

cash cash this of level cash could and quarter year. without in ever a from flows flows. quarter. to of not front, we what will meaningful QX million $XXX that Excluding generated this, quarter by become we strong be XXX On in this And we profits operating strong will XX%. highest our million is operations the achieved. compares last have grown expect very A year strong It

achieving said had averaged we we would the turns season. X.X since around X.X quarter our had half working highest launched XX past our conversion have cycle very a QX, as prepare up remained turns of holiday new In we product capital I inventory strong four we December times. that quarter, And first healthy our cash successfully reduced our sales for our million years, And joined. new consume the remember level days. sequentially. level achieved will we this our XX and at times, products in You inventory in inventory during built and record a With

is cash XX range XX we profitability. targeted a One last would typically conversion cycle around due As to cycle to and conversion December like still basis the our our to the full-year add, expect I a our that's quarter On days. thing be reminder, lowest in seasonality. GAAP cash the annual of to within

result, at As of expense U.S. are to is the required record that And income including as reduced Bracken, December QX for $XX me, our laws end tax U.S. cash marked corporate lower federal another of rate. one-time passed conversion. that, and that Xst. is continue what to and the at to of which December implementation most January deferred quarter most a still have of I'll of CFO, profitability, U.S. asset the million to it of tax of better a tax tax as plenty our back rate strong the tax pass QX, exciting the the tax you grow new a strong U.S. corporate net execute related as growth, we expand. In the the necessary and you. are in remeasurement to we quarter, reforms, summary, room the And aware, And

year our you and transparently result, lots Operator, as year Vincent we're and this growth, in cash growth action in And our Thanks, you line I on the finished Based sales million Vincent are $XXX with see completely multi-brand And Vincent. we XX% to I We markets, raising queue now very our within constant see now strong XX% growth can guidance. have drivers with flow, here. quarter, expect biggest that, three you take all non-GAAP market, level the to up multi-category to We're [indiscernible] as fiscal growth share XXXX of ready growth growth profitability from to mentioned, of finally, questions. We and applied be of our market the [indiscernible]. operating continuing the of on can the of think build be and fiscal strategy your top strong our strategy. to said. quarter questions. and And year Vincent to million. income currency, $XXX to opportunity our

is your Certainly [Operator Instructions] line Please ahead, go from open. Joern UBS. Iffert

questions. my and gentlemen, taking thanks for Hi,

year an months. helpful. Can the The please, indication on fiscal be, had the 'XX the would also give have us 'XX? versus next number for is fiscal indication will highest, pipeline rates you be one give of which year rough XX product be a products introduced Just category's innovation new first what the you to and would in roughly

EBIT mean us would reason I The I are development. margin couple be, here new dollar very question would please, what favorably the for the forward margin FX would the rate and the plus-X%. is non-GAAP still mean, have place, profit question Thanks give indications be EMEA, profit is who on gross we the euro/U.S. second the exchange program sell-in channel about you. on shall question some currencies gross last interim in much. [ph] key more here. for Third happening developing Can the think [indiscernible] for becomes the And increase? you and of quarters. going you supportive, in next be

you fundamental very organic take I'll first questions; underway so He'll guess company, product. on organic pipeline, Vincent up. in constant we're products launch question. spit acquisitions; these gross When an of one we're innovation creating On thank will company. that and Okay, a all profit much. and you the I probably innovation the we already we're innovation a state do last second take We a currency product time. we're could your new

into. number of we launch of and which every go categories in year, products in those So absolute terms the

We we comparable, year-over-year look look to making at evolve at way. our and sure number absolute enter that the that probably our lines relatively spaces should but is of new where it we be. they don't terms product continue really In launch number,

So couldn't more I specific of ahead. great without than pipeline that, -- innovation be and apologize a that. to we plan I certainly have But for

terms you see, as that can innovate, In areas, we're we area generally every in. specific the of in

the teams, at consumers. So small to wakes bed to better design teams a each our in those to for small build break into how and products and trying and out figure of company goes up business bigger night we morning

innovation, So past, have you're the across in going everything. to see you as

significantly take or know, lower to lower including ago, Yes, than said, year that, adjustment the XX% question, we'll finish and channel that see quarters. XX% high be think did on in a you sell-through, adjusting of the you and see was we've yes, that we out to second sales growth inventory are adjustment we quarter. that for last to sell-in, happening. underlying three rate, the sales as It quarters. The higher they we said And completed of as out over our had four that I and the the EMEA, rates in range this X% year. as couple adjust past in the very really And rate, the or growth

On currency, favorably mentioned, conversion have it's U.S. rate we to dollar's moving changing is us. one you Hi, when as volatility the Joern. quarter. is within Whatever

many we times on months buy our in discussed As on know, four hedging do inventory you we the the call. And months few right. XX:XX:XX] [inaudible also it a advance,

change an hedging if the basis quarter, of we X% this P&L, half That take So example, neutralizing a X% about year-on-year. was point Euro/USD you about to as had that benefit. created XX costs in point a favorable

of is another going And at Euro/USD gross the though, point of hedging so if be In cost on change margin. we where it be the if have over the favorable you this have in time at and for that stays will rates same move correct, absorbing impact. X.XX our X%-X%, it the half will that into you're stay currencies QX, long-run,

D.C. the line for XX.X%, but growth we XX% XX%, rounding margin, gross gross delivered that about excluding margin. talking issue, top So, XX%

balance, investment to At our in bottom versus AID continue on growth everything know, FY goal to XX% point the that highest year, be gross to as next not to last to guiding event, in XX%, the into opportunities. our our growing really be you to focus 'XX, and we're line, prioritizing in is try will range, time our margin, businesses. able we like always March. this our year's, that XX%, stick But generate over to the businesses dropping will with and We during invest have

very much. All thanks right,

you, Joern. Thank

question. Next

is your open. Merchant from Your Please Asiya go question next ahead, line Citigroup. comes from

Hi, Great. congratulations.

Thanks.

fiscal obviously of can very you in which do a particular XQ categories if you and this question, for quarter trends going about Gaming you comfortable about trends. that seasonal into feel terms product seasonal you just reported. just the talk Quick blowout quarter was

is deploying any this it's looking categories in product cash, or So capital again -- management I particular seasonal your level. return should up more the 'XX, Thank some at you're a we how quarter? pretty that we How per be expecting you. that think 'XX, more March on. about whether fiscal looking cash and should fiscal some then high fill to And share, on into thinking about had follow-up acquisitions

I'll QX, because I you our by consistent. specifically. like made relative segments very a trends bottom Tablets key categories the will question. seasonal like Okay, of Vincent it an and year, all always the kind and question, QX, the including skew take big normal, tend QX, getting little completely cash step step-down so. take anyways, it have mentioned the skew, the things. education quickly fact obviously to All and the even steering little are our wheels in the to to to is QX, trend should a the through On seasonal within And think, generally something of be. this and does a it's and QX expect from But year, this have QX you that be will for except Collaboration pretty trend say of companies, did stronger that too really business, all steady we're kind QX. Video without gaming, way year, but Maybe the seasonal giftable, it's go which QX now budgets as period they bit a by bit hit from strong year. in the last down those QX end-of-the-year a or stronger generally QX, progression is has cyclone of close I'd gaming, look specific, they're we line Gaming so in overall,

So I been. dramatic, skew it be but that expect seasonal pretty will that has would always

I Mobile XX% structural quarter category going linearity about a sequentially of considering category. gives leave, expect a guidance then that would you normally on I not asked QX full the going we've with to into year, kind quantitative implies but for of only XX% trend, seasonal, then a as historic about XX% little so deliverable, Bracken, one to If few continue. not would for on into well. sales obviously and share, gain data grow the you the on QX, That QX, dropped allocation. the nothing year capital Speaker, there guiding And trying the a unusual given there's agree side. we I growth q-on-q, can, growth to that things our continue more repeat to we're at And gaming

framework. We have a

First our we of business. course, of invest in all,

the to dividend now, the quarter two see acquisition organic we of if we double-digit integrating we of them. a And seen continue you've on about then we've the made, of portfolio. businesses continue are seventh want, dividend on leg growing basis. are annual pleased to very We're small to going invest it's to they those the that's with is and include side. overall up investment And As the or an growth. into acquisition as last plenty gross as the growing and medium-sized opportunity Logitech build have We'll that you to tour,

continue that to have You we've out there so that. see have shareholders. we our continue board that's well. as million, review every buyback a program to still plenty of year, a of have and we cash power which and we consumed open to return we'll million, $XX for will to $XXX discussion have Obviously And then

Great, thank you.

you. Thank

your Our line is go comes next Loop Ananda Please open. from ahead, Capital. question from Baruah

Congratulations. guys. good morning Hi,

Thank you.

hear welcome. okay? you're guys me you Can Yes,

Ananda. hi and Yes,

like you very both regards if versus Vincent. the could share distinct just context, the what's if I follow-up share, then market Thanks. to and demand then various new or between are I the few to Like drivers, innovation, And two. the balanced kind channels distinct discern peel punchy And able for that? leaning between of with you in Hi, back, share? a like could. can you guys Yes, marketing have campaigns, of to sort you a of things or guys, me

there say we're et cetera. certainly but of Sure. share markets. country-base, gaining cases one. where are tend there Yes, I'll reasonable across not, I'd And to be step into that our overall where we're most

So markets overall our growing. are

profile through general in, of hasn't collaboration market the I be I markets the the do continue changed various is we now very gaining pieces. say say we very within if and really are video multi-markets, would The markets much be of most the gaming. of a themselves know to we The continue well to continues standpoint. it step the share segments You strong, profile and we're Gaming robust. and to would from in share

you actually extent is dynamic, and at business growth very the strong the music, some in-home, If both Wi-Fi, to fueling across even looked know. music And as a of in speakers out-of-home. rise is the you assistant personal

we had a the innovations about share to really to good to continue market but standpoint going available quarter excited that We'll and aggressively. speaker and we're speakers see in overall have from we're So a evolve, how and there actually grew, be now after wait too. speakers, the

with into go good I home home-based security the integrated in businesses that camera growth We had which continue business, now personal segment. you are business to If home, going the think across is grow the businesses, is our and to assistants. the every of Harmony both

So the there's would course and earphone it's on then is decline business has steep it. It's brand wireless us and other so a early secular PC just generally. across steady. so earphones about version, a in say of business, hand, days, the completely business. space new just but I we're really the for the for the too, been that while, PC not excited opportunities peripherals And a

turn hold by I bit; share little base disturbed we gain continue expect to because feel a in segment or been a think It's been have an too. We there. to too. little either we quarter the that bit installed started last And really that we've positive to like we're

trends the pretty from standpoint. that of really, This actually a stable anomaly. I look sellout We're X%, more quarter is underneath think, an down

in decided? do get regards do we from of points you distribution Vincent, do quarters, of back [technical from guess, next you to some basis or XX:XX:XX] when I of put whether usage decide dynamic, years, the center you you just guys just you investment you Awesome. the do gross performance, sort already business. And [rev And our yourselves, when give back the have decide to, into heads when margin how want do XXX you with like given couple the that, decide to or with potential as the difficulty] around what it or

And understand. what I And be issue do… Yes, to the deciding September. to in fair, started

question… you restate his don't Why

All people right, understood. not have maybe

the is margin around out issue So of and from a XXX question question the And was is will decided have one-time when gross of easy. center the what the in be distribution the decision impact we by the Americas. point basis it basically. And

of and December early the course we're January year. we a that of that, may that end Our for call, we Every as decision, back DCs into orders at results it put and demand deploy want, in, to the as the we order explained QX. in was in as two raised we've the our I been And impact will to we that in residual little speak. at to have started January solution. of into now, the at not now one flowed a run of the decision. result last to go out overall of risk January guidance the of we -- that when solution, choices, be back early DC saw still built made is the has bit but the you Internally if to And right demand DC. and We made then came of cost all the we in look

it. got Okay,

points gross quarters, next we XXX percentage back that and of of over shouldn't margin you couple report? getting that's basis the think back guys you into So the necessarily floating

Yes, XXX%. Yes.

weeks see, You take may not it a quarter; in this take few still two we'll quarters.

Right.

as When last you your for your about you these? comments me. result savings then of rate what just deployment what tax tax tax And reform, of [indiscernible] if, then could with of, tax ongoing rate? be thanks. Okay, do of and And quickly, make one will a sort might

give in point different in Yes, this country to meeting, tax annual time on At at annual mix every on on basis. so lowered tax a of since our quickly then AID and regions And rate. FY more sales we've rate, non-GAAP rate March. the an X% by It tax product we'll color 'XX. just the of the give for course has line depends basis I'll

And great. cash? any use then repatriated Okay, of

We Switzerland. is a repatriation didn't our Swiss We're and cash. in company, have any cash

it Yes, sound sense. makes

Okay, thanks guys. Congrats.

All right, thank you, Ananda.

question Your Please Wagner MainFirst line open. Jurgen comes your from from is next ahead, Bank. go

Hi.

I just should this for two Peripherals, should a mentioned they're have a stable model is and bit. down trend first at like Hi. PC business on Thank Actually, or there forward? you we we going I question. on taking How look that you my think the is -- that underperformance that, board? more on Europe or to chart have this And one to the now constant keeps you then on flattish. Europe, in midterm. also well, XX shows underperforming, -- page that reported across country currency; it is you. due Is the Thank

Okay, I'll both those. take

really model thought of in But about, we numbers, one, then think how peripherals -- business that's And I sure how exactly slightly I were you. flat, relatively I'll if it's first always as up. about think could sell-through. of not them. pretty what PC So terms I'll I of our think I'm think that's in I sell-in would much terms PC Peripherals, saw We be the underneath tell

changes suspect will would -- that And that different I imagine don't any continue. market they see what be from I can't don't I think in it I suggest see -- any yet. fundamental to I could the be.

And that you're you to seeing one and have mentioned you really terms couple we've be after in through year realization up lighter things staged to of a I an need Europe. this it's quarter my in to pulled career Now, a adjustment and year kind in quarter after I quarter. you the have -- the And earlier, to is think up end as got of what ends great And one then think I that in here. do reflected to the adjustment year next steps. the times of take sales And often back. as -- adjustment of have had a really year where that's has until of being -- had start in going I've back finally you when think I place. happen come place hit And again. the that takes comes the Europe, you

we're now sellout. being than channel sell-in. the point like quarter adjustment an from in where to really probably look in another stages that's see And happening the the think consistently sellout the sell-in. adjust And new the of is away that's to stronger I the the more distribution you'll right underlying they as different start sellout the

the come individual back you'll think see up we two country of performance terms but across -- come differences now back good. or which fairly And back a Actually to are is of consistent We're seeing to I a a countries, some in of usual. started come really it to little year et us, the weak cetera, the two starting for for example, bit little start years So stronger year. were back bit, ago. ago out is some which coming good. across Russia, as board, it's Turkey a as there next enter markets is

I think a based. generally - got speaking think of broad it you can it's pretty So as

Okay, thank you.

you. Thank

ahead, Morgan. Your from Paul your comes next Please question open. Coster J.P. line go is from

Hi, Paul.

Thanks Coster. for [indiscernible] Paul is this for taking Hi, Bracken. question. my Hi,

quarter great guys. So,

largest is your gaming category become mid it So looks by like on year just fiscal 'XX. to possibly track

growth comp just a drivers shipments market higher So trajectory how expand growth, going if on the up share we 'XX, about higher the healthy of can think combination there, the primary or everything? 'XX growth should in ASPs, and against in

one, combination say, think it's the I last of everything. to of kind I Yes, a would answer

of of I continue I in and and we different And think it'll are -- it's playing I'd do everything to good going gaming and have be think to to kind guided we a that, play two ID places continued forward, we or saving out for but expand, gaming lot well run, expand. it's expect we clear. in across now, generally three to imagine a had

longer you Then do my above front, Thanks. understanding gaming Okay. on is so average, gross slightly targets? corporate margin up evolve, are as prog Vincent, mix step the product the the in that term margin the margins

margin, share plans are come. all the the we're in, in marketing on through right, and the we the continue complete and double-digit, see market, acquisitions you've So, that at parts down tuck-in one three an a product do for growing then take slightly more invest true going definitely is into become there averages. the when is execution and years almost there's average company a on to of to the say, continue term it's And either portfolio opportunity the perspective. and of launching sale. perfect talking of to continue gaming the growth. FY'XX range, illustration is why structural better that's don't major is can product that company, current third the manage a gross may on I market more to of will overall new opportunity. to come we grab to inside as we gaming, of gaming point are continue XX% the yes, also and gross in multiyear uplift market In to that yes, we're gaming, portfolio to back training plenty you we kind of gross into the focusing the There we're definitely drivers XX% course corporate the seen in and from margin, about, a or small that that we continue we doubling than the new I support see would the better overall

invest all think that margins in our into trying we are businesses, of of gross continue I portion improve to a gross because then to So we opportunities.

the you comment, thank one. our don't become of matter the to in I'm rate think wait Just what number that gaming I the going to is. other We've business to groups because the other for because to and the -- No going growth they're back to free plenty team, sit one there quote to our got categories. make of for

in We a no of peripherals see think places going and lot by to to PC even I when are about to opportunity And and potential, super-excited business, be that there add you the that music collaboration means potential is bigger. your growth is easily. the

combination so speakers And were we that quarter, between time? you. both, how of there versus Was was primary channel about in My evolves and it strategy? XQ? think drivers over may from how Bluetooth higher pent-up be Thank this ASPs, a of last the speakers quarter? growth question, And some smart in then, some of function the should demand sell-through, kind the split what

there too dimension to market. the of is don't to still opportunity new it's really I'd of it's think in launched focus majority say, from except I Bluetooth us whole demand say -- terms for whether enabled vast way pent-up our new to speakers, build a any system -- us it's of to into this but QX, Yes. and the just split, it's for early We go speakers. Wi-Fi first personnel going

to we're excited see can So go. they where

very category, really our In still grow in in this addition have WONDERBOOM, of and to what strong growth had in MEGABOOM. the growth is terms we growth demand strong the units, we both; new quarter

performance. had So some and kind We of kind was board. good really really across it the And good say We it's strong ASPs, I share. of would a gain market yes, balanced overall. we the had growth

much. very you Thank

Thank you.

Mueller comes Your Andreas go ahead. next Please ZKB. question from from

is line open. Your

Andreas. Hi,

One for Thanks what hello. which the drivers give behind taking be you to line, and an G&A level Yes, dropped on my sustainable absolute in to Can G&A going are it's significantly. line? question. is the if indication an on it the

Yes.

with million, G&A and the is of line, $XX few around of on out the there G&A. So, a in quarter in last non-GAAP with some XX, expenses things around valuable

And have some As margin team metrics. holding metrics. for the our of the Bracken we gross is all mentioned, he marked of accountable

just to see you of compensation when for valuable executive them basis, some meant So, on core the just the are team.

turning better. direction X% On basis. as you up can position do basis we G&A the you I around what hope sales. I think that's will of to that we annual have the in on see ongoing And as know, our

then, you or also and a UE X, out, the it's indicate for basically we to should Jaybird sell Okay, can was and sell and Freedom thanks. And think and difference MEGABLAST, back around it BLAST to the in there? sell between products new the probably relative sell-through big was in, what the same metrics

ship we quarter, both MEGABLAST the sell due and They're higher new have the sell products. significantly higher shipped shipped. a both sell-through, we when to Blast a sell through. midway through Generally was and through They -- sell product, in those

in early very still category. that it's So

and I it are that the personnel develops we wait and early have it's feel days closely. Amazon really systems profile, see that category performance, are got think we the whether so, right over about in we we're of how how to price etcetera, the Google, to and general, time going category watching and to not and determine

shipped and of products, balanced different little Jaybird in profile sell at We constraint little this because probably little this shift appointment out core the little a we on bit a sell it's looks story. so earlier, On earlier. think to demand, and more a

good inventory from feel If quite overall, are. we about that and picture back you looks where step good general we are there

Okay, thank you.

you. Thank

Vontobel. question next Michael Your comes from go ahead. Please Foale from

open. is line Your

Hi, Mike.

was Hi, Brack. sort can And it rollout in Jaybird on strong respect the Thank for the an the question of speaker as in of demand? of give well, can responsible well, the, the on in granularity idea us as strongest the hi, terms then some channels Yes, Vincent. us with was repositioning And regions us you growth? and that a may be eventually you. which of you BLAST of update the to mix on series, geographic product also dig new

if look into Alexa-enabled Sure. it's so Europe lagged And spreading then you we Amazon with where and the -- and different U.S. investing was it at elsewhere. are in really in have spread speakers, countries really Yes, Alexa slowly

everywhere So, outside still virtually early -- the U.S. days

we're the track; distribution little but the time, repositioning Well, are super-excited brand. Jaybird, on shifting over much more narrowing that, yes, of that as terms the you know, we and category -- AMC, I'm the the are that about really come will of position, really bit. we and little In a we bit a I'd say

we got unique anything have Vincent? know, that we want out that also something hope And been excited listening, add bill too, and team, you're -- to about continuing you really you I that I'm here. to I think that, and so

No.

Okay.

as Jaybird be collaborational any have cooperation of already brand or that with May on have you any well, looking sports sort into? you do

not not comfortable not about athletes. of am disclosed, too other haven't what collaborations much I'm sure comfortable brands with it. sport the with and but talking exactly Yes, I'm we giving have but sports several. kind have detail we have do we there, and I

to kind we in. there. so, building other got sports we're things include are was to And some there, sports we already bought that brand outdoors And players. and really And cool and with the bought underway in would committed building dedicated a collaborations of really that we've one certainly we're

thank Okay, you.

Thank you.

comes Your go question from Baader-Helvea. Guenther next ahead. from Please Hollfelder

Your open. line is

Guenther. Hi,

thanks. hi, Yes,

performance, want sense one here? to the questions; major categories, make follow-up European any to two product by you Just any it on differentiate again mention there differences does are

and No, of say I by other was business weaker the out the was peripheral would in elsewhere. PC Again, kind I it two Europe balanced think categories.

worrisome particularly about So there's nothing that.

difference. trend, I that category is than that's but big much think a pretty by not say a other natural I would there

margin? tailwinds, basis non-GAAP were follow-up the XX you margin were the Okay, -- thanks. a Euro or you And points referring operating the currency gross on to

gross no, Yes, margin.

Gross margin.

hedging is currency All cost, XX number was that offset one-time which that waited, that cost you XX point from then so with as a we'd which than stay and to benefit cost, gross a then points. I mentioned, point basis the hedging a basis more half and

XX share could on fourth last talk to like slightly XX question think acquisition, Okay. in mean you're the now now Is what the months volumes that able Last after right buyback, quarter? impact up I compared running year. catch main or above nine million a the to million than you're about from will the right I and a be you more

Yes.

first old We end anything acquisition $XXX the year, you opened a at plan couldn't because quarter, So and do closed the new in mentioned. right, million. fiscal the new one, we as of last of a the

be small [ph]. So a And from that. prevented And BFASX apparent. attend we will the And to we're portion we'll also continue kind opportunistically. established plan now of of

Okay, thank you.

Thank you.

Our Please go Instructions] next Iffert UBS. ahead. [Operator question Joern comes from from

is open. line Your

X, couple the because in Circle Jaybird MEGABLAST, Yes, thanks Run, you the seems follow-up couple may the markets Thanks. the below already hi, again And you review recurring have consumer something a a going experience my forward, bit products, and can to you color mean, taking like there and end comment strong here? question. uprights appreciated maybe Is unfair re-launches some a consumer that be of so little we could for but this normal be more and would be you I And or what looking -- improve reviews, doing, average. launched expect just how question at are of many here? done can launches and to you

one, asked that we And I specific difficult brought somebody the three to them already at If market, of and or do have -- that's it's pretty we're new challenges to to them, and them they're the -- three pretty I about, really -- and go are or Yes, do happened each point. we three three a all was that units upgrades me have challenging. have think happening. something great progressive -- trying the technical each it -- least relatively one of up; got

after one and those update, And the launched we Jaybird more actually so -- phenomenal to when launched product. I comes review think product, was up. a those needed see product tough a Run it's we firmware we we

it reviews, disconnecting. made change early update. those go some look reviews see was the form. We Now but good, with that if issues We at through completely internal you'll you came first separate where and launch, the

we launched had version think and the X story; -- with same it learned The launched when everything. wireless large with version is I was the amazing, thing Same from was rose the was in we we top -- some that. the true -- it Circle to exactly difficulties beginning.

I all largely those. fixed think almost have of We

But there, of sort penalized features MEGABLAST. Alexa-enablement. -- in that really that put first able expect there out couldn't that we had the And to, one then to is awesome. and and And be we were really so Wi-Fi that wait. it BLAST is some was the just we also And we by premium product fact we were it had and and the tough. beginning, to with we the were speakers the in MEGABLAST, BLAST third were

one; so, And or it's launched. a you'll those example, see for have PENDORA, are we next [indiscernible] over big the they them come, just coming,

product learning standard to So, are I are to of I case and a those, And of will examples in three we think are come curve, we hardware for. our be known good think how all just up the company. learning every than the more

this think us. I good for we if finish to prove jump two time internal a three, It's not Obviously, it. water in the out extra development we experience sure a we of software that the good own cold good we three we cycle development of make off did. for thought sell the are are at end our that our a long done little already three, cycle and of But have realize might out there. it's we time, to to pretty in need a so

you our are As mentioned, Amazon ratings best.

do in good I And launching imagine are quite you can levels, and these to that. products. a we're general strong. hit lot about those ratings had of in because don't more able come Our performance to we so, that going good to that out of it's immediately really gate products, the our of like good, having kinds products always and don't But be discussions need we internally

the All right, thanks for comments.

Thank you.

time. at no are further questions remarks. there Mr. now closing for call to Darrell And the this back turn I'll

Okay.

our is thing most the have company. just And the a that QX I'm could so the just number, of kind on a lot as just also before which I engineering the and in other how reported per are more line saw of we more may this and won we highly We we design last won company weird line-up that -- call we know, we've any is that maybe really numbers best strongest awards, done. that leading that just we've awards, really sales you my design QX I had revenue entering of connected. momentum. a we're better have said higher a more basis, all think than be I dollar ever think represent had with you innovation And small company; I The except we think ever a quarter. about into pervasive, about story, is thing excited much

sales. ever, better we everything of think quarter despite best underperformed about are that fix. could the most having despite things grow can things are that capable highest line with virtually that is in levels have I this quarter sales profit one-time we And we thing done having were we of

about super-excited I'm So future. the

good want we be think I are let we that holding be track. know year. and Investor going Analyst Tuesday, to It's really you March as I going to Zurich on Day this in to Xth. are in also usual

plenty seeing first, you there. be here we look forward to are reservations to of there. And are You

Yes.

conference today's concludes This call.

You may disconnect. now