Logitech International (LOGI) 23 Oct 182019 Q2 Earnings call transcript

Good day and welcome to the Logitech's Second Quarter Fiscal 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

We will be conducting a question-and-answer session and instructions will follow at that time. [Operator Instructions] This call is being recorded for replay purposes and may not be reproduced in full or in part without written authorization from Logitech. I would like to introduce your host for today's call Mr. Investor of Head Lu, Relations. Benjamin

press Welcome Hi, available website, as to of a Logitech remarks online The call live our webcast call the the the thank fiscal slides, company's are well XXXX. quarter at you. of discuss second financial conference the Investor ir.logitech.com. prepared page this to results as and release, of year and for Relations

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

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

and Vincent Executive Pilette, Darrell, the California to I’ll Joining now turn President over Chief are call from and Officer. Bracken us Financial Officer Chief today Bracken.

joining for Thanks Ben of and thanks you us. all

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in mice. one number we're gaming Now

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That's up iPad when had for as Our other and new charging and tablets XX%. rose X.X such last for Crayon that even sales our another more inch POWERED the quarter accessories the digital wireless impressive Both our dock you pencil QX robust XX%. sales year products consider first with iPhone.

as performance our As products, Folio, like existing strong QX. well in Slim the drove

Mobile our me Speakers Now everyone update let business. on

stronger them MEGABOOM the and out were products this two underlying better. our updated made Bluetooth bass, better, sound progress newest and longer transitioning ones. They versus great to quarters. sales BOOM the We We’ve improved down quarter, have range. trends older still Our much improved Speakers our prior in made our and Mobile

everybody While still drop proof keeping features their loves. waterproof and that

launch sales were Audio been to offset wait float. flat We decline than X in and sales attention our here a sales good got can't growth I QX. and are they they the media any since off in wearables to desktop from Blue of start one over the Jaybird. launch speakers In holidays. approximately and overall even history. I've now do any in Microphone and our the and see how fact, point to BOOM probably X contributed percentage Sales and here MEGABOOM more

Jaybird with launched call walk now while in both came even for Tarah. niche-worth proof As QX. and segment being They the the for reputation over key And portfolio two new towards we over out our financial running let positioning Jaybird comfort, resetting building medium-term. even for our that sense and the me We Jaybird sweat and Vincent and the make turn and focus. for Jaybird’s that said committed more you channels late retain earbuds to first time We previously, focusing the into metrics. to waterproof. to we're through brand the And market just ruggedness XX that, of remain

Thanks and everyone. good morning

acquired Bracken this XX% over stabilizing ASTRO a Gaming and sales growth business our in we had growth strong business tripled constant up in more just was XX%, in said, the momentum up Europe. up past then in size. in with currency. X% year than strong since ASTRO quarter solid Asia-Pacific, We momentum Americas As continued ago the a when It

leveraged As and channels our we acquired by the into launch a and into we new points. build of strong portfolio price take how capabilities. asset leveraging can and reached regions a growth, example handsets ASTRO great is lower through new of value core market the an product expanded

Blue on an regard accounting percentage This closed the roughly very recognition the quarter And revenue that we mentioned to growth. overall I its XXX we standard. we're of note Microphones, new with point one revenue, which Also optimistic about to our last added quarter implemented acquisition future.

were QX which under compared negatively point to reported impacted one by This sales standards. quarter was percentage about old year, the last our

the know basis gross year, slightly mix sales to target various immaterial tailwinds by investments it margin. margin we expect the and from deliver with $X which our one-timers tax our worth It component and non-GAAP refund one-time and headwind the and above to our offset full into team and XX.X% our quarter, specifically, million XXX reduction currency there our just the points gross duty our XXX. The impact in a margin I we great balance benefited cost lot is of And tariffs headwinds imports due efforts, interest programs our impact a is support also of refund to that point margin. cost, business cost favorably from a the a going such enabled recently execution investments as of standard China. operations In half is XXX that to favorable an the the and accounting two For long-term benefit improved Nonetheless, noting in net the rate to duty partially has was on customer what volatility exchange from by growth. from of questions continued impacted us and face in this QX, a gross more favorable helps tariffs in from been logistics on and U.S. more tariffs. gross tailwind

the few our no as last products tariffs had only impact the business were a of tariff we had our first mentioned on on mature list. round As quarter, of

just September overall product adjustments The we efforts tactical chain the various within on previously or production second tariffs profit into of that shifts believe two future, supply manage impact our effect The more this went pricing round of product. U.S. reclassifications, range. tariffs announced XX such of can year our inventory mitigation impacted we guidance as and the in that potential pullings,

As some mitigation half our can half outlook. the in implement, actions the margin full time a net to year gross second estimated about which is point to take of absorb impact we be in

our time, X% year-over-year. control top always total which XX.X% expected spend up is efficiencies with long-term one and increased you support impacted and expenses expansion. on operating year-to-date operating which OpEx in of spent to sales Non-GAAP Our Blue expenses continue and resulted is growth X% us in by acquisition million past We up the year same and with in period year. the grew discipline XX% our in margin. for of million is Microphones. That expect income, strong same $XX invested the to opportunities from G&A drive down profit XX% thing also non-GAAP margin this or leverage In from At G&A the quarter, and investing increased resources R&D, marketing very the acquisition to in also the $XX Cash to are creating we non-GAAP EPS XX% funded consideration The Blue. were XX% from can support XX% million operating gross of last line display we efficiencies $X.XX. to as million, growth the $XXX operations QX $XX tight quarter. but

and balance leading We of $XXX $XX total September. a million million dividends in to buyback, million also $XXX share paid end in of cash the at

September working XXX non-cash we the related positioned the impact sheet to the for balance in of all I'm excited Excluding very quarter. items line AP year. how are and of inventory, AR, ASC rest capital about trends metrics for were historical

mentioned investing their portfolio resetting And you. in in long-term the As and on that methodology and growth our category earlier, applying we'll Bracken pass capture it build of time lifecycle of a positioning each opportunities. Bracken, order with keep respective leadership over had to to depending category I’ll back

be we're for might one, Thanks, Microphones, available like promoting really stay themselves. have they're for player most they that. great much love start start the to maybe I'm and we're home things MX the AI looking maybe a gift their working year. to this give equipment year ones excited odd work, earphones, but give at but time we gifts ever. loved just headsets, And a on connected, MEGABOOM everyone, to than but great our this anyone – new still are the Christmas an even but it's be have the Vincent. to about year year or or even to at It's you there's probably to on. who on – In whether of categories and give go I those most you, more collaboration can right more and that with so to of ASTRO video But this Tarah who more built-in for for other wants Blue Jaybird your really come. I won't next. and could now, for a maybe I for Vertical more loved of you're X,

are we another as everyone's reality. on as view it Vincent mind. tariffs said But Now

and to to adjust we are. us You should just expect

to operating our both and ready confirming million. XXXX fiscal Vincent for and for of And net questions. $XXX year sales to of for X% growth outlook XX% million We’re I non-GAAP income take your to $XXX are that, with

Your from first Instructions] [Operator Joern line of go comes ahead. UBS, from question Iffert the

hi. and questions my taking for Thanks

Hey, Joern.

morning. Good

to you me please stated the the on be there the negative profit will be one – point benefit margin mean, math you tariffs. please XX percentage reengineer diversify clarify if chain on you I the you second first you Thanks. the from two again can third question the half. of products benefit is to to in the what Can also gross basis was And And Can as by question do on mean, I The on FX? help would supply risk, stated second in whole your impact and a the and of years. points of how that up. set chain duty And a supply what in are reacting cost to will refund your XX net there yes, profit gross is next this? three So revenues the you and the considering the accounting please to be please. basis and list? margin are are changes you be P&L tariff the highlight impacted many you the would how already think CapEx? what the

Joern, number question of out then take of and how way and me Bracken Great, we some let of here. risk risk address our the will first of the the see the diversification

others. a some but impacted, that plan some little a of So have that do bit half than overall not to mitigation per second the say We Obviously take the I over to tariff about longer are point mitigated are half codes bunch of each long-term, There's have we're we that – of quantify going impact. implement in would for a term not. product.

will continue that I you the with progress that's if know, our half and it’s a build engineer. a point we full want, mitigation the But easily, building can As go down impacted one half you focus our point guidance you tariff. category as will on a that. have say to the category, it would goes half not second reverse below effort. And from that we to I just for play

So that's number one.

impact on mentioned. favorable. you as one-timer gross from point And quarter of of mix I’ll this Secondly half a repeat and margin the unfavorable the have about we

we rate, It's tailwind traded quarter we for take was at you a is exchange euro which little the still. of where trended This year. the main bit a if about it last

of in U.S. little have from to below use how currency profit But which effect managing we’re that's know, we commit but constant in know, growth the That is a focus As one everything you as you various business. dollars. as time. exchange it we our a bit we developing tailwind when stays tailwind P&L, the into QX, and our at we quarter then one meet we in by dollars favorable it commitment may currency ways the XXX as U.S. if euro move long rate into example, may currency as for at a

Vincent years short-term impact some the the also asked longer with you a talked the three term of two where are China. there effective for about already which next of the or coming tariffs world new of impact about from

We in manufacturing as manufacturing strategy. another we as we're view And that. have a updating as our on far place strategy always tariffs impact just and

looking have the No. tomorrow. we supply impacts certainly Do today changes we at on are chain big So to are where be might context that where in expect we or OpEx? I the of

All right, thanks very much.

Thank you.

I excluding a the the points just was for it mean basis profit Vincent, QX? the follow-up gross you on yes, plus was points, FX were this XX basis benefits, sorry, benefits including XX or FX follow-up, the margin to And saying

not we the currency the benefit Yes, report isolate gross for specific margin. or the benefit QX on currency do excluding

many will margin capitalizing gross we may you inventory, dimensions to U.S. hedging, some that there’s the be different us if there's dollars. want on manage that our you lead and know, of benefit As differently drive

question, your that benefit. currency So excluding the answer it was – to

we it to to to the should indicate about the for midpoint for gross margin XX% profit the then, of also to you XX% of expect think between the How think we But next back KPIs? we your stay as around key be quarters? two shall half second one this about So do or this it? fall can guidance XX%

very question. Joern, it's a good

of range end the we've of manage in it tends been we bit and margin. of midpoint lower, So in on to as the long-term high margin in normally first half QX if you gross long-term, And still XX%, historically in the that model at that would you little the XX% be operationally QX so prudent the know, business the your range.

margin of line top se bottom per Now on guide the we business course don't a managed line we the perspective. and gross

right, All thank you.

you. Thank

comes ahead. from the Your from Goldman Please go Sachs. Alexander line next question of Duval

line Your is open.

question. the Sachs. Yes. I’m Goldman Hi everyone, many thanks from for Alex

quick a Just couple of ones.

the today trend. been players. from in a on it of the the if lower to quarter's all stated bit digital But or the reset potential channel you're seemed underlying recent need side last seeing of actually sort First offerings music there'd you assistance things, given some improvements price some in of that

just wondered could what if within seeing could give China able all these potential were I that you're confident guidance clarify you did your on So in if could that of you're just that moving And you extent tariffs color parts. more the full and obviously growth manage to Obviously, are return? complex mention a a wondered how impacts. on there's to the I you you what baking impacts secondly lot prior you're year bit range. confident you point,

on Many that? understand to degree being conservative So you’re trying thanks. what just to

product. good new very are tremendous. we has confident products new what they're that's that well, exactly too now it's channel music Vincent make product and make they it's us. feedback let and seen would But compelling, I ship the say question think bring that. in we've take to take early as as been pretty did we've And last clear for it done we're say, to pretty we clean sure we or over started the in that selling the out as will will traditional product aggressively And little clean as a Okay, you've of very I been can do. priced two And we’ve question. the are And the to quarters me tariff the old that value. the new Yes, out we're the

quarters Bluetooth are into So think big waterproof we big summer one the the really the for because also is the pretty is quarter of speakers valuable. go QX this speakers. big – when I season

So so so good. say I’d far

I yet. certainly growth. certainly we growth We're banking or strong go don't versus two not we'll a improvement expect see last We on improvement. think but significant you'll and back quarters to know that

Good.

actually, we and SKUs tariffs, May very started on being it of know time, At impacted early point Alex, been are the in one. and on the we've So working since on all the second this of that first this working we in our portfolio.

know XX the in generally tariff about also XX%. XX% We increase at September first is moving by

then of And forecast that have this variability there is say All we have mitigation impact forecast level, either whether degree that or SKU that going to number. of pretty certain act The known, could is we that that's and have for are we our can at not on well-known. secondly less our increased price. two a things we the I plan known are

know leave always to the for on a based have try that and that’s we what we room So unknown. forecast

all I The politicians to heard say into China the would may from forecast, would that meeting in doesn't be may but imports be of times all We have mean that add, that about model pretty the we good have record tariff. U.S. moving a and under the track good the guaranteed our XXX% last point parts want that. feel of it at it's you

perspective. scope currently course We assumption. is Of our overall working what work an from that we not on know

many thanks. Very helpful,

Alex. Thanks

comes go Your from from Asiya the of line ahead. Citigroup. next Please question Merchant

open. is line Your

everyone. Hi

Hi Asiya.

half you still you fiscal about question stabilizing not in seasonality indicators seasonal Thank secondly, or you of – And through into then you to to on macro the had? into lots demand in growth? the ahead are back had second year should Hi, very When China, indicators relative fiscal as expect do EMEA into holiday you think Quick norms that the clearly growing. that then seems demand the results. XXXX, you've related Asia-Pac. But of a quarter it's back the think How look coming your about as really about even strong season region ahead. the the the through, that within into China? post but congratulations then to and like we question of lastly And that thinking also how you. seasonal half sell

Yes, kind the take me of questions. the take second the of two out first modeling will linear and question IT, way then let Bracken

I’m year, in QX QX calendar bought now, seasonality. line we've been In mind from for those bought assuming again the in we two in SKU are terms which going historical to of at rest year historically we sequential QX, is XX% QX. this seasonality. last growing into at up of at you our the when you're somewhat looking And our what about right seasonality, forecast right with that may need The two Blue you Microphone, ASTRO, keep is had things time in QX we your look

this So historical time our make going forward. of seasonality what guidance Blue the acquisition plus is

EMEA mentioned really and done good made spending a we're moves we're and which moving you really I And lot in of feel a is as to process. making changing there. question, to super regional feel take marketing Asia-Pacific. we're two very to some about probably about lower really year the stabilizing but will also we fully We've we’ve structurally And the a environment similar are very about, higher what excited good two promotion, implement is it. It I or which – changes

we China we guess excited China. indicators same the good. team have excellence guide I would China I everybody China, we see that environment China about But in you read about the true think there, China about that have don't is say very just macro wouldn't weakened about operating I certainly a improvement approach talking the see say, wouldn't the and it. the great there thing there have that, that and I'm have you'll you'll China a we’re continue in so – in But super do. yes, business, great there, excited has we in be the team I we're business we excited the we and to this know We're overall say. executing all would to quarter. quarter want think want But and we improvement to as the on I currency and I it's our the I

possibly going So so and we're you I could any China get good. out horizon. and We think gloom get the of the doom on to most don't far see so

those of sales, to sales listening also overall Bracken, so China And who of… is you that you our that modeling about magnitude here of for XX% a gives are

that I the aware question, times. just thing just performing the Same that you and very one we're different things we different different are regions for categories of of asked portfolio say, with would of like categories regional a that. at levels,

like So is have see AMR really little you'll imagine we'll time. we've got strong. a it's come change and I still will back Asia-Pacific from softer very doing than as a think I strong probably stronger although to be where AP, and will we it period EMEA does EMEA, mix actually fine that, resetting the because is, time a

follow-up, $X EPS all that GDP Any whether forecasting about that how really China, kind XXXX? whether – that it to, looking at to there? thank Great, one, longer you provided do there you've Analyst growth all a term of, How I for things well, earlier out you like may continue fiscal then year EPS guidance guys you. it's put sounded just as in Day your do you've for And like and I if changes think execute it's have good. lowered you guys a about and guys tariffs, you think $X yet your into know this XXXX, out really that relates

No.

deliver strong we there quarters portfolio There one. and know, of good deliver some very out value. the you earlier. good part assumption that plan, asking, so feel, we've after we're is that change, operating no we and the we I'm having a we delivering conservative, think EPS all little quarter, have had, you term Every the with of an but a change, towards is may in And change march have levers I very we as be and many in and QX time will long-term many $X another that's in that we of right. bit can may that.

and we times opening portfolio tools play. talked in we're of of we we've countries add. of a as also the and world, talked would Yes, – around of today, about I many businesses, course, the lot have a to portfolio about We're

own And serially I We're our more do modest have in the in around where categories, of economic our world. that. we opportunities hypersensitive – and have are we to control especially don't do to destiny plan really and believe much we growth we changes new can with the opportunities so environments enter

we control there's we're own I mean, around will going – massive world think destiny. a But of that the generally to course, So our I everybody. affect don't speaking, if slowdown be

you. thank again. Great, Congratulations

Thank you.

you. Thank

Davidson. Your question ahead. line Forte Please the from of Thomas D.A. go next comes from

Your line is open.

Hey, Thomas

Great, thanks.

wanted So I and ask two to eSports one tariffs on one M&A. on questions,

that Football. position have your imagine to adjust acquisitions And in, on given So potential Night of we necessary, tariffs categories as front, and on we ads ability on the you'd the going in price, excellent M&A to leadership Samsung How offset strategy what if mainstream, then And it's the definitely can few ASTRO you Sunday like for your more that one would Gaming? we seems about – forward operate pressure. think the see Blue use you've eSports, should Microphones. made levers in with think, are becoming ninja you

Okay. answer, of I'll those. both

think leadership and if a have have yes, when some should opened to you opportunity we leverage, the you're I I right. mean, – I with think from leader, do. you're and pricing we category category

either. going not be We're with for we're consumers. Now to creating about value responsible that

on we very way. pricing have the right to not many Asia-Pacific in So yes, driving often need should thank of and we where in you excited to. super But pricing standpoint, the for world. raised we're really in both From experience at EMEA, price going obviously eSports the two repriced, it's acquisitions, we're about the the We've priced we the comments an those. U.S. as that the beginning. in feel – completely we and of rise do have times, around believe eSports leverage we'll And both And the

at we, we're don't share at now. Our we're many course, we're many things anything, right of M&A things, but looking looking and always – looking plans,

questions. for you my thank taking Great,

Thank you.

Your the from from your go next is Vontobel. Please of question line open. comes line Foeth Michael ahead

did react category where question in second out not losing regarding of and the first – so again. cameras do are how the is that. the you talking EMEA sharp category but are a Circle situation is a are possibly maybe question. decline be is wondering the about questions how what Home source question the Possibly, you obviously to of is on leader was and you've sort and Hi you? hi. that would – small the I leadership Yes there, the And Smart two been category the Just second

is you. be That the If or what the Thank categories weakness are weakness. behind behind which would countries. consumer if in you're behavior any relative can more large be And really changes helpful. you specific seeing in European relative

going There Okay. Smart Home. two on are there. Well things different on the

as tiny either a the we that us. we the can we small. opened disclose subset only that feel said want want that to a than can't on at it's the is we'll more or except be camera And we – thing leader really I working large that think I of in I to lead. to category say the be for category really to It's small leader the like as be of Circle in a and we see. we which And at that mentioned either You category we're want

of too what category remote do good So From go a a to is itself whatever one Harmony which excited I continues leadership in get – wouldn't standpoint, business is. that category about example when what the down. you is the Circle context control

consolidating. there? what So are We're doing we

it other number it we'll whatever by we're where profitable the reallocate growth. end. that And reducing to OpEx so the is to really reducing get of think there we business can we have We're So, the there's and our resized be SKUs we time will there a we overall good for spend have.

You strategy. think I wouldn’t may is remember a a this did category point of of when times. single part working the really I EMEA, And is here. It's Vince couple of this part deal first In we different to our together board. and I started this across the

our to approach changing really are Europe. We

the good EMEA marketing Looking ahead, benefits model think good right to same I think single I'm that a the really category But it, years it's point very like the into later. that moved very which think but And Europe. few the about we're will marketing I'm online. that. I is back so that come growth a took of we of than soon. and really come online the faster wouldn't and combination I two playbook a I taking things. applying feel feel will come about going doing or a Asia-Pacific to And from are of concerned strongly I steps ahead the years. we really looking I real the three excited lot benefits offline good and the about and results great we're not will taking, see relatively But take we're to

Thanks.

Okay, thanks.

from your from Your next question line Paul open. ahead Chung the of go JP Morgan. comes line is Please

Hey, how is Thanks questions. for it taking going. my

MX market up So, but overall on you strength growth channel driving helpful. somewhat pretty driving dynamics, the about expand lines what's shipment in share on are would be unit three talk quarters. Keyboards the lifting past first impressive could just there you've been that over you strategy trends, Can ASPs the just it's

product has Keyboards be been this room The & well a generally innovating I great across say, it there. us We end, know. which would probably product. to the that's launched got And quarter well The MX products where for high is we've for keep at board continue and to living there. doing business strength our then we the continues innovation years a signature you and is as keyboard and just the Combo new Craft. very Sure. do

and markets. not, gain in generally look I in I at be especially or in of here those continue & be share doing some categories. still our speaking think our gain yeah, to continue And share business PC should or We I all we have low-end at Combo Keyboard places there when – some the we opportunities Though do to mean better. major will hold to share good Believe trends it

is take in you would helpful question triggered that what second Microphone be then detail And to well. and overlap this market any Okay. action channel on on kind margins, Blue as of

when that we Yes, one is that development – got always things like all and categories but working we've when we categories the time. secretly, talked several on are of about in the some we've before usually

One was think one last those was pretty, I the that about I our microphone. in call, overt of those pretty of

interested this in category. we were So, very

something dynamics. from standpoint an teams category we a we either play. same look Microphone understanding doing time or we a doing the replace when working we're even category we was well on products where we're At category, we M&A entirely. start Blue Now differentiate to to felt big and or work we the in really that have think category and in able the into the hard of accelerate completely and example being it wonderful it can the understand what enough take leap replace A a we like started category. to to take already

story said it. there really we’re excited about So, and I that's the as

product, expanding margin a think the we corporate overall will into gross it overall to about play and channels talk by gross up that building be applied We portfolio And launching levers but is from at margin don't perspective. expanding new same new to from here distribution internationally margin. our gross accretive the ASTRO new into regions, category

I to this – gone guess we have point is into category trying make I We gone into regardless. this would have was would the

speakers. lot went go Just gone this to like enabled category we Bluetooth faster, went or We This have into a acquisition would into into video-conferencing regardless. us faster.

my then off, your may PCs. wanted gamers to migrate And Google great. if Okay I console Project on just is take benefit service Stream. take to Logi question this if last may hear seem does

Thank then in hear and quarter. to you. your take what was curious ASTRO's So contribution the

have business. Amazon and platform could that Anybody all there It's who's try really as you ourselves in general. love a them streaming who and players. of that's gaming, the first just large is for We or Google, on providing the really Well, our these users answer for for Google's us platform a all them. big view the to good want to enabling expanded and because streaming out platforms

it's YouTube so for too. us and us. it. We're excited for Twitch us been great And super about is fantastic fantastic actually And for has

one. good say just another So, I’d it's

quarter tripled the the It's growth we’ve Gaming. our split this of overall don't we said we reported. contributor number side, – size gaming overall that is ASTRO the business. fully ASTRO's that in fully only On a of quantifying I is The baseline. fifth good is

much. so you Thank

you Paul. Thank

from open. line line your is from Please go Your next Mainfirst question the comes Jürgen of ahead Wagner Bank.

for you hi on. me Yeah, thank letting

end. whole Should be a leveling year You we previous peripherals from now you impact also PC you so you. well. calls, based in mentioned until and plus doing you're as strength peripherals the current flattish see see is broad then any above. indicated processor segment a somewhat minus, mentioned to explained that PC Thank – us you or Keyboard well Do And is or why that off shortage?

companies think I particularly talked costing I'll I'll impactful how more in these let We suddenly Vincent components the business don't has the small never a before that coming operations is problems, are. of managed with it the have kind just respond shortage and will with the very continually cost amazed shortages that. cost respond us and that question. just for team I by of be. our great really it's and and it first has that's hasn't been well do teams to problems hear us modeling and by and been various part big second these way, a out of a about well of but and since lot operation done big context The big a our seemed impact processor to about other I'm manage

shortages the in other to that being about the in base reading And indirectly. installed really peripheral Intel in I terms the term those and fact, the PC want the will shortages units short impact look installed don't companies, I remind big us, market, think shipped into if for the you impacting just impact the you're as base at shortages market or we of in to addressable

question? if don't was remember another So there that's main I the one.

PC. was It

Absolutely, overall guidance. an it's important one. then And

we've hopefully, conservative introduce we'll to prudent to the drive As what results Obviously, new the change overall wouldn't which our delivered optimize We'll see, with quarter, low we'll our is you this digit outlook in peripheral know, we've continue that right, we'll that continue for and products, better and sales seen. provided we PC low performance environment. we'll better, try I be approach digit, every and single an single a you've do and of planning that.

Okay, you. thank

from Loop open. Operator from go Ananda the line is ahead, Your comes next Capital. Baruah question line of Thanks Jürgen. Please your

A could. I couple me, if for

give related looking you Just Any of to of, going you get that on Just I And structural much don't previously versus at. introducing news. current then back further saying of current as communicating of of, sense the it that to guys tariffs, may – sort – the today too. on, sounded to is the Bracken, chain to how detail impact. be, have regards can supply that just, it or plan to sort in sort give mentioned, nature were you new it expect utilizing of, supply like and exist based follow-up is were you sort existed? with Any a on Vincent not some detail that of, things material can you you the chain

at followed much said the to us in movement continue other want within the built and things. model the detail. plan. be to current term, location. into it. we'll calendar started include the May give then is next moving amount like the some into way quantified and Ananda, the absorb structural the able we'll the don't so year. production working right? still all in We're It's you business We It the We does manageable too and we time, and In move long term, be outlook will I know our long currency

in change more this the making plan, change actually have like time, therefore, company build that's supply multiple point more not that chain to. guess, would in at robust. would the diversified material any I the a in And we investment. and extent terms and call, It the We activities CapEx chain structurally supply of of does

manufacturing this that's move always our And if do a need product it, what of and been teams it – to We've doing factories that we core have other China. contract experience – entirely, happen and with we're and to and fact, If of in own capable is we capabilities be all to supply do got time. and factory. the out perspective than if of we in out, line more in this of includes it, from people's of case of the manufacturing doing when staffing that. We the in a it. in our move do to to One has the China exactly people lots And out ability the the of about. chain Logitech other out

indirectly of, as Is Bracken kind this part this had I you to structure, sort play what in a of that, manufacturing, was, advantage the a well having – teasing referred an of, think I it. Is past sort interplant. of the it? here as when is at of, modularized

of think do it's your I to in pass, advantage so that have both your lot But manufacturing you a external own experience manufacturing an and moving. have

factory one do quickly we so how we all. How could surprised have moving. It of somebody's me, at of And it glitch surprises here. was me and into the move a or any of another without I years lot and factory a out out couple of our experience even first manufacturing easily and line

So advantage. that an I think is

getting may growth mid that, or is might of, stronger. But compare big because the like put That XXs and bit. missed are I this a mid-XXs quick comparisons have run follow-up. And they then I Gaming rate. But move something It's significantly the than, earlier. just up which think is be seems you higher it kind or do Gaming revenue, tough great. like

do accelerating fore-positioning you're within So of, you normalized And – sort is Are see just around the growth think to there. your if like your, you see that feel category strengthen? the that. strengthen, continuing continuing not so that context do you – to strengthen category the category you're

Yeah, continues to be superstrong. well the category I think

they're doing be three. are But doing we story thing small, I There areas boy, and we're really in in business where about could are. be outperforming categories. we think, gosh, our those That better. not I well two the is, nice our think, or we should

can to to place put ourselves we're do doubling if there so in that. a innovation we down the And see really

I know decelerating, So not, opportunity or it's but I there looks big think do accelerating and whether it's certainly say I not our don't sustainable. would

That’s guys. great. Thanks a lot. Thanks

Thanks Ananda.

are will time. this no over questions remarks. call turn I at the Darrell further CEO closing Bracken to now for There

the of all out. thank call. lots And to see approaching. stuff. Make to want talk our you we'll in – go Thanks January. are you joining or us. for you I Well, we'll Okay. sure Buy The holidays for to of

Thank you.

This concludes now disconnect. today's conference you call may