Logitech International (LOGI) 30 Apr 192019 Q4 Earnings call transcript

Good day and welcome to the Logitech Fourth Quarter Fiscal 2019 Financial Results Conference Call. At this time, all participants are in 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 whole or in part without written authorization from Logitech. I’d like to introduce your host for today's call, Ben Lu, Head of Investor Relations.

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

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

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

and us I’ll Pilette, CFO. turn from over are CEO and Vincent California Bracken now today the to President call Bracken. Darrell, Joining

double-digits you year all year for thanks sales up and and Ben, Logitech were row. up XX%. fiscal Sales XX% with of were profits XXXX another in up great a profits for year us. you, the joining Thank and delivered third

secular in three one major and businesses, trends they're world’s large well Video leading through There player. all of it's and are categories. continue to about Our business, the the creativity well. Gaming trends Collaboration a excited this underpinning performed many driving being about global reasons year I'm where so growth and this we're few fun growth businesses drive peripherals as these three why just of first and to we these and productivity, excited kind cloud and growth the call will growth

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million desk pulling a and That using I'm PC And No, format low consistently this the our growth business PC, specifically trends may and that decline, has fiscal a stage new ever last why fact. called growing a at even been is Three reasons Show one keyboard, in known on while Content XXXX, boy, mouse, for and Toys a peripherals going shipments is our PC a secular $XX Ryan of microphone. little Review, since using for YouTube large kidding. creators or highest forward. we've single-digit Forbes. edit, year webcam, And expect the lag big not a and this to was YouTube Here's business driving earner according not frankly business. a continued seven-year-old we year, worldwide sometimes designing been user.

talk exciting did gaining the another track let's built in share into and Gaming with We profitability. market growth XX%, of record year we XXXX delivered up trends. driving Now these about fiscal improving sales

grew Our core Gaming all Group PC double-digits three regions. across

despite predict growth QX the from in year. XX% last console XXXX into And total major given we titles growth seasonal controllers. were our space the simulation most managed That ASTRO being title-driven. that unprecedented of sales wheels, to year XX% will expanded offset fiscal the well part year. simulation in last our group, console most updated in recently tough be the Gaming posted. and said, the growth the why Gaming, in though most our business fall tough grow into XXXX for is comparisons growth racing presence in While the year double-digits racing headset Fortnite we XX% decline This unexpected business in fiscal is to of still Gaming to mainly ASTRO Gaming and What's since in versus that's particular in expect XXXX. saw impressive we just a

year growth lumpy, grew eSports in practically to product expect come. many While we of of sometimes then, fiscal Gaming especially Collaboration put rate category more mere our a were at XX% be growth sales line, Sales years growth in VC average years six have XXXX. continue XX%. for over six-year ago. the a sales compound this zero sales to in Since up our will Video phenomenon the to by CAGR Gaming business long-term fuel

looking coming of outperform I'm XX% that for year, can we're sales While to pushing for XX% be VC growth you that. sure team to the this

huddle conference say can and portfolio. Camera and all our invest larger to customer And or point hardware for our address a small portfolio the force. It top previous now both addressable our product in grow to year-over-year, you continuing our As innovating and than showed before, up of around in that, doubled price direct March expanding new Sales while of huddle room Rally means all using Analyst of our market rooms. MeetUp average MeetUp those product the us more our What's we're $X,XXX now we sales product to Day, that VC go at we're also rooms on our way our that mean? potentially in system, large $X,XXX, can rooms. $X,XXX heard

panel demonstrated else, student, a runway all investment the you're creative fourth strong creator, I designer, lower-cost for Collaboration keep use content see you of we'll encourage Rally tap, incredibly a shown whether for ahead that devices, we companies funny. Video It's newest an has a as representing consistent of somebody sales fact, In success and commercial strongly control increased created consecutive shipping growth this adopt its three delivering long achieve of us. and universal of innovating one peripherals with be initial cases, we that. all growth. shortly, the or launch webcams has And early solutions. XXXX customers growth. after as keyboards cloud-based different year And It's still X% We've early years already signs pointing product fiscal for days and good excitement a past rooms social meeting lines, and we PC year products, with see of analyst lot can the of our in quarter. to to

it's not but share MX size only that Our market, a mouse also market. has and on of taking dramatically it's Vertical hit, vertical actually expanding the become the

Pebble capabilities Accessories engineering for five with close to our China also years Staying up grew off letting power a developed China Our hallmark the team straight and slim it’s Tablet users last six has resonated and up. one and strongly millennials year, & second not great that's XX%. been we're using in to our designs Other the of start. of a unlock to mouse the inexpensive or sales in

the we in to our introduction Pro, While this Slim of latest the month. just is saw of decline new the to due of timing which launched QX, iPad Folio the this generation a

down continue products the year. full-year sales last our up Mobile quarter Speakers with don't as introduce QX too healthy, strong iPad drive Speakers long QX remains for a get excited growth. weak to for the market We As and XX%, fourth Mobile growth. about very new we'll had were XX%

acquisition soft to But come new before, We wouldn't Speaker the and to remains sales love resources, our this Mobile performance Blue products So in which and Blue team, our to recent experiences. due year, growth up XXXX. contributed overall points were & quarter. to Blue, which our love percentage double-digit strong of delivered continue roughly we investments, as the and trend. innovate stated X largely view Audio Wearables and inventory. the our so I XX% taken and as for our another And channel market better we've QX out of measures overall we we'll align have the a

Excluding out its to in Jaybird unique & was We Blue, disciplined excited single-digits. Wearables the carving about remain is own great Earbud niche, taking out building down market. Audio Wireless approach opportunities targeted products at athletes. the a

company me much without thanking to announced actually we and at let Vincent for regarding of He the I and last the our honor your today six dedicated surprise, last design today, work our of my our of the Logitech. Partner. But know of He's while talk years. played that's can't important the Logitech’s around most down transition role as as the company’s the were jackets Vincent get critical the financial CFO a team are earnings the the for We management is at us Enterprise end in my Now back named way spend CFO to Finance brings helping about wearing joined you. area meeting his Vincent we growth Global XX than from call call year most coming team leave. I who with here multi-category, Logitech stages on years Hewlett recently driving was legacy and and he’s transformation, one me Vice from as each CFO work. news closest every of Pilette, now of and is built He together important both many as have working which more early for strong Operations the Vincent to and Logitech a President multi-brand of us growth weeks partners. the rigor across We've the season he'll the expertise, interim and earlier search Nate deep and Company. in did the you Company, you, this turned a over we Packard CFO. table Nate HP. a Olmstead, new brought our on and Nate plan sitting he the this was will and finance the as

over call Vincent the to financial to me let our walk metrics. Now turn you through

Thanks, Bracken.

wearing I’m record, the tie. For no but a jacket,

sixth Fiscal of another currency. one year As performance, sales to Bracken $X.X reached exact. the up year XXXX strong XX% constant billion, be delivered in financial we mentioned,

million was expected. year earlier. recently portfolio will our While continued doubling U.S. three operating delivering $XXX for here XX.X% to $X.XX, EPS a years profit to topline raised the we target than on From because to long-term did we in had and focus growth, a significant as we leverage roadmap non-GAAP XXXX. we and fiscal towards a we the the diversifying $X range operating was ago, high-end better XX% of milestone Non-GAAP laid EPS it out our driving versus operating on XX% margin

point margin our Our XXX recently reached of range raised fiscal gross XXXX up XX% the at points XX%. mid long-term of XX.X%, to basis

to increases past is product from years, margin pretty we to that improvements, track have we to three and normal up decline. target as gross we tell faster price Zurich, record in Day factors. high-end our Analyst the our One cost can recent structure our good from recall which of and costs, a in took forward range will the due you drive the XX% continue natural you is of few reducing As margin

product second factor is mix. better The

we January more and Video Gaming Collaboration, PC categories. all which into the better than shift margin gross As peripherals other have

to is to demand activities factor business generation more in on versus past. balancing to gross we be used the net model will spent In promo third in mainly promotions will we and how the have OpEx. what spend the led our marketing Finally, we for much that marketing we transition essence, desire more let branding

to XX% leverage and in expansion, through over $XXX X% discipline with growth increased about fiscal margin our best expenses operating or million, both Blue. driving opportunities. our gross capture This balancing non-GAAP to continuing to in Our our XXXX just topline up spend while excluding continued operating growth invest demonstrates

pretty optimize selling great and simple. continuously spend products. look We approach Our to invest to is building in infrastructure more

R&D for flat kept spend for spending expected result Our we strong CSN year to and the than low year up the support marketing both as And record we X.X% QX profits sales. XXXX. the G&A a while delivered of XX% better were in topline growth, for the both our at fiscal

continue fiscal to operation backend the we is by average loaded positioned shown this flow great talk declining a to feel to Overall, and sales last flow me five and fiscal cash income operating million about flows. flow was $XXX down year-over-year let QX. million a in summary, the very strategic for of pulling year the our ahead about approximate expect XXXX. Now flows be years. for the the business $XXX good Also, operations XXXX. our in Cash In January, well result year cash to full-year from non-GAAP we more as very deliver the cash though, another from briefly mainly from The of cash continues in strong past inventory was tariffs of company. one-time of year

emotions for to is We've Bracken of course, see decided Logitech tremendous as its out future. delivered in to deliver long-term Logitech we positioned laid and as model mixed but I've well March. full we six-year leave of optimism of on the growth, mentioned, company Finally, the just

will so there better for shareholder before And joined stay forward. the it I Bracken. And pursue challenge. of pass shareholder back I and and emotional, a was I supporter no me moving passionate responsibilities let to to pass I was Nate big CFO's to the before new a a get and me team timing a

XXXX. well drive well us. in emotional, another you to positioned year believe marks continued Vincent We're Fiscal know growth you gets year fiscal him great enough. don't If year for XXXX never

and March with our people. outlook energized that why our being down I constant that, non-GAAP confirming outlook As player. of fiscal we're them And by up? earning by energized and sales of I'm you and the Vincent cloud $XXX just to million your our continue James, peripherals largest single-digits $XXX currency don't million. in take in plans, to ready we questions. queue mid-to-high are of today year operating income I'm for path our We gave and XXXX

question please. Capital. [Operator comes Your the from Instructions] first line Ananda Loop ahead, Go of Baruah from

open. line Your is

Hi, Ananda.

Vincent, working with morning, job Hey, hey on good a yes, congrats well And guys. we'll and miss done. so

Thank you.

land luck, seeing it with forward maybe you can Look three. three where any and make to we for

So just to we'd to. regards congrats solid with so Yes, on love results. solid business the and topline,

So was this beat. look solid margin a op

of a higher Day higher, Thanks. And then year have I so follow-ups. little bit sort should cadence just sort starting of a guys philosophically, be And guide? a couple from we XXXX in at XXXX the are perhaps Analyst a think context the fiscal thought floor, you you how the about might year that of fiscal you

at way Ananda, change in Yes. this too point, term early of guidance. guidance, our it’s to

we gross business a like And said, the going capability to as think we is overall to margin; I to higher well. would future. bit little performing invest operate for and the reinvest our always in have the we

would So all say I built-in. it's

many XXXX, variables that control. or like still fiscal we into Going don't have either tariffs we currency

And so be on lot of P&L variability in have to to we always our deliver like you able our a commitments.

And for catalyst now. Fortnite just a there's on really catalyst can Great. you the tremendous - point Okay. while if then has could Bracken been any you year specific a for Gaming, out,

way And are? Yes, being And So you what Fortnite if to post have it's those that. after be secondarily, consider catalyst? more a you maybe that's then Thanks. the about catalysts still then whatever do see to extent, is it, as Fortnite and of but right what Fortnite? one any I think not dynamics

is is to word eSports, Okay. think growth Yes, catalyst be really But of is to said, continued trend going you games happening. then The the – that's the big the continues of but all, I still excitement growth games maybe as around a underlying new existing eSports, first underlying be always secular is is remember, use catalyst Fortnite. the of launch for primary interesting the of the and just Well, exciting. to it, an and deal. the

a the could in So to almost kind of secular inevitable not that to short-term. this me. seems is point catalyst will the drive at the sure year I'm you point single long-term But trend

games so others don't The so such all come Arts the and many sit came them are Electronic been creating Fortnite to coming games out created and doubling and and when time. on a new wave, starting Blizzard hands, out you're see publishers the new out. Activision have their And and game down

kinds think the business, but I So we'll will the even have all secular term in continue. surprises of we Gaming if just don't,

great. Is to the now medium-term market? And from also that Okay, market phones for sort long-term as an of serve targeting of of service you different to see providers. some Gaming guys a with even we out sort or alternative might just services an product surprisingly in folks there and for of more the of the not couple are them larger for earbuds normal the as interesting sort enter increasingly opportunity that some come

the a enable about to categories, PC cloud-based mega services or playing a and Well, But say a on, for mouse. experience the what headset, another essentially continue is, is keyboard you I like growth I need new referenced it. we we your to want that comment enabler which you try on the to have desk a you because have us without PC do jump would might of not else specific creation services, something to that

exciting and Microsoft Apple for is us seen others. we've thing to and startups a with So some and it's started this going coming, super it now and this

be to I that's So going exciting. think

play obviously, part a to of terms think places of there's and an there. in certainly And we mobile gaming are growing in interesting mobile headsets In continues and general, to it. gaming be huge

mobile used interesting an are Some that probably some gaming, And the but it yet. for we of our targeted products of haven't directly already is area.

Day XX% That's XX% I that are said actually helpful. Collaboration, year. I And first target at Bracken? heard XXXX? the year the to one was well? or that? great. then guys – And for that that You from your did last If as time the the accurately growth me. was disclosed Okay, you Or you is this actually targeting from Video you've right, hear Analyst the fiscal

too point Yes, Video But on a excited we disclosed not that's hard little at point new number. at in making really real about was so the the specific Analyst I it, this – we're it's there Collaboration. Day, to was, but it's the a year, Investor get

so By that this I of looked in ever was. rooms. spaces. an and I ago. to blew lot the And employees. I – or be who I think ours regard. as cool video-enabled walked has few, the didn't Not Ananda, future I building there I XX. it we're building. many any into. It's boardroom. company, were go mind just that it I through fact long building This the only video-enabled whose spaces and It will too so is is my that in probably enclosed It's a age see average one it other really except open mention in office mean way, every won't the two large like maybe or went

is the Ananda. Thanks opportunity so So big.

your from the of Asiya Go And Citigroup. line question please. comes next from ahead Merchant

Your open. line is

everyone, good miss Hi. Good we’ll venture. you well. But as and your luck on you. morning, And Vincent, next thank

you. Thank

Quick question.

past and know of here. acquisitions interim CFO I I the about probably CFO years, the have guys under smaller think to obviously way, the You acquisitions? mean, topline. search How an have now in you the know, they’ve and done you with we contributed couple should

bit these prior back little step to that should have a of considered assume a So acquisitions you there's we departure? little might from Vincent

that We're assume keep always looking and at all. we'll wouldn't looking. I Nope.

and them, is for us we're we doing terrific to be and at well. on up to anything I but that what Vincent think not letting is be do great team Vincent stop left it'd leaving, has a going crazy behind all.

the but in team, discipline. general between it's actually development really every true managers. the add, a can business especially I It's if And in involvement, strategic Bracken’s mine, acquisition, the teamwork team,

but The it’s player. of CFO so the that, And M&A, a especially part not really is definitely broad only effort. in

organic on growth acquisitions, would all an company focused for We're company. what get foremost we we've and they more reasons. the right and really done I were say, organic first growth But

all and to look you If to continue But business. that at engine to key the acquisitions. that innovation underneath do VC an is peripherals, we're PC that going really is and Gaming this

commentary then the that was follow-up, a just Okay. the that some remarks couple was And linearity prepared quarter, there in in some intra of was suggest there it intra-quarter back-end-loaded.

what in as out there? your has time, to to well. upside Analysts Has before And talked at about to mind, was downside? you from keeping Day, anything perhaps that of the high then So a some that as single-digit, surprise that follow-up mid you you macro anything or to factor were a there the factors tonight, the evolved surprised that

Hey, not it quickly the we last. We just since Asiya, No, AID. linearity? just had talked surprise at on a was

calendar into the next QX lot was and January, nothing a the year quarter, and last of AR up back caused some business ramp referencing That's in cash collection remember you in be the March and Christmas the of then delayed than quarter, and slow volatility finish last to. were that quarter. the – in quarter strongly If there for to and faster we started what

Yes.

of is of or year. so then, It's us for it's on we've early seen any the it, hard stuff. too – that in really anything really environment In economic comment the to since early it's terms there

early. too go. had just it's So XX months to We

that expect back Okay, what historic ex And the in we XXX as cash pack? ASC has revert back we cycle to more to to should revert and norm, great. linear been conversion perhaps quarters

Yep. absolutely. Yes,

Thank right. gentlemen. you, Okay. All

Asiya. you, Thank

from next comes please. question ZKB. the Andreas Your from of Go Mueller ahead, line

You're is line open.

Andreas. Hi,

Andreas. Hi,

So for the level in how protect on taking see - miss the question good enough that now We Question to going quarter? luck. the do miss the you to progression Thanks Hello. terrorists? the of you. my we the inventories, inventories good and next are is on from

and strength what in mentioned the of think in yet, protect know, our sheet was that I inventory But economic for against if It's we'll that want It assumptions, balance remarks we to as pulled are I you tariffs a will all we that tariffs. current future. some stabilized a putting in that. you decision not the inventories think prepared we're on be burn using the in we as we advance. right clear

Okay, operating that the and this of absolute on the flow was then loaded cash impacted you by us operating give flow, size backend quarter? cash the can

Overall about inventory half it half early impact and about the of $XX from million narrative. and from pull-in

sec this going currency, my you off And QX. the up beat could that indicate cost basis points factors XXX progress placed also to gross product marching Then last these you does the are fact savings, mix, into can in to how question, tariffs. China single

Yes.

a no on the call the So spreadsheet of training margin. detailed was the long a QX very going into We've year factors more is gross we will I'm trends Those slightly which have promo give always my to go multiple into overall to not fiscal and above reduction XXXX. cost marketing Andreas, continue we here the said that. drivers, analysis on too But in were XX% line been expenses. reduction, all both favorable to the and three with gross drivers and margin, all everything for going we and set of full-year there

quarter to considering here there that in point be weaker gross currency the first at euro more with time You margin the was exchange bit a being at one impact being little rate. should expect this XX, in the in a at round

have overall margin year a on the three solid we'll factors footing mentioned and we'll continue but that's, drive to So the up. be for gross

And a lot. luck Vincent. great. Okay, Thanks good

Yes. Thank you.

Thanks, Andreas.

question please. Your ahead MainFirst Wagner the Jürgen Go Bank. from line next from of comes

open. is line Your

Jürgen. Hello,

hi. Yes,

Jürgen. Hey,

now evolving that your prepared yes, we see And actually, and sell-through volatility would Is normal your video in You there. they had going a that you growth be, Europe. from question you question. I've remarks and just I'm it second two others the my Thank some in reverse? talked footprint, to market broadening that weakness hear you lot in taking about is for fluctuation? might are is the the past,

you your you? it you. product because the do you. how gross business staying environment So developing margin amongst it's Is positioning and highest going gross Thank competitive for the high see margin forward? for Also a

Yes.

let I’ll take last. and me one the Let first, take Vincent the first one last

I growth a don't think think I happens the margin think is can impacted opportunity margin like what environment, to think that a standpoint mentioned and the strong video from a there's by standpoint, It's we have I what that from we're see the any as reason competitors, big. competitive So of of going the gross the see from ours. I so I be will – really gross spite competitive to gross video look I margin the profiles in think lot

least in at vein. So the same

So I doubt it.

and big is will companies in into you'll I for I growth. really, market. faster. It awareness competition those many think the drive is great, come other of XX% drives competition think And video the rooms really see opportunity more

will a I address there's analysts we China on the reports had for our because inventory your writing on the website. about thanks put few that So based question and

the So business know or U.S. through well is Blue. X% dollars. The is excluding basis the in global on mentioned including a positioned, net sales inventory selling overall, and less Overall, growth that revenue X% slightly is sell rate than rate you the growth as China X% you growth. Blue

good feel slightly on down. So and end weeks we

fiscal quarter So the well year. of position going into next the first

a we we pretty in X% in to than that's in aligned and then in to need currency little this constant have As in sell sales impacting good more even thing we not basis sales sell reflecting And the in promotions report, of through. seen net growth bit Asia the a it's both feel Europe into And are X% in, On channel America around through. reduction favorable we you have there. actually Europe but in the higher the marketing it's was where is on affects about the through sell consider Pacific.

you. Thank Clear. Okay.

Jürgen. Thanks

the from next comes ahead J.P. Chung line of Morgan. Go Your from please. Paul question

Your line is open.

Paul. Hi,

And Thanks for will missed question. my for Bracken. be taking Vincent, thanks you sure. Hey,

of on on you Are see rooms? competition up kind conference first what's then potential share So on would room starting sense Are you any Video there your and side? Collaboration. been gaining great? the revenue to attacking more of then of what's And your whole strategy? And be there? how’s kind your go-to-market progress And larger secondly, the

Okay.

said, out there and the competition, seeing if Yes, several space competitors communication definitely On Pollyanna we've growth think part whole potential as I absolutely on too don't it. have the competition don't the the here, now. market it really will and been market room got And I nearly the earnings drive is I good side. mean, you whole competition you call,, good. in as the we're of growth. the of sound competitions because It's I have want opportunity competition, drives don't market but the room to

and So what as to a we're on innovate overall think in there thing innovate – puts well players up and an more to. I us good do and that's the pressure it

to the time. So I'd interesting in we I be potential be we over far the market before. so think what continue to about watch there But yes, will with say excited line were

had that try is, could In launched quantify we just to terms of early. rooms have We And will do board. Rally. across use it’s we too the better exactly larger I now a something there's but We've what opportunity out rooms, just sure that wouldn't in large room, still those I the you than think larger been that in there. I'm Rally have it

a Zone headset, like the seems Wireless enterprise in opportunity on then space. it cross-sell nice the And Okay.

going And So what's this to VC or as market well? you then first, strategy is your how second, see share classified there? Wearables? do potentially And gain & Audio this to in be

in into to to get attempt And That’s & it’s marketplace. really that experience Audio a Yes. Wearables. going some its overstate first want don't to potential. I be

we small exploring into a feels going it would but We're like it's to how and see we're thing the it's video be front walk inside then the got it's I there. doing first step We kind door, and warm inside continued and terrific we that ago. in do a think what really in to space. of conferencing it's I same product, say six like to years with

then And keyboards and on I $X want billion It business Okay. to get lastly, your devices. still itself. pointing remains sense just

continue you pretty to this exceed segment expectations in So consistently.

seeing So mid-single a digits it's pretty nice low there.

regions? certain Just segment what's your it's ASPs, you. longer-term your driving been kind there, view will And can of you very on success helpful. Thank be whether of the expand

content thing, for so global secular more the they underlying Yes, it in for the fact like driver are that that than a using secular And it's their global really using many driver just of past underlying used PC people creation. then the they're and to is a thing. is

think desk, what's difficult we of doing are way after we are as So you not think again, that And on content, innovation like just it's therefore from connected. part that's as with long on those how lot if that it if important their might But creating go there, their were it really seem their a the innovate. it they're path two I vectors about explain different they’re and lives, of a can the happening And and there to people we it doing they phones, are. doing desk, PC. their they're an doing if

end is mouse PC or before that another one vertical people where launched of continue ago are computing here. pick they quarter interesting injuries. we Nordics. the big so big deal. the starting using the the And a quarters their get – is competitive use a last becoming at use Europe So really to steam a two much and it's up to And deal healthy big it's in It's in deal

we've drive future. to think can we as are different and continue think that said, that low things for to continue drive and we we And So that I foreseeable the single-digit I we'll driving growth see growth. see got

Great. good Vincent. luck Thanks. And

Thanks, Paul.

Thanks, Paul.

question [Operator next from from comes the line Joern ahead Instructions] Iffert Go please. of Your UBS.

is open. line Your

Yes. Hello, Vincent. Hello, Bracken.

Joern. Hey,

on I'm Hopefully, missing Logitech at if you. will Vincent, you Gaming miss point we for up Quickly time. please. be following at in some you’ll sure

that you of X% is why the kind can the a two not, one when mention point XX% in their fall bit with lumpy. you is Does the if the growth plus guiding that's also or time competitor, trends? because by around sales they there seeing said similar also Your Turtle is difference? Or Are headset what side. demand down Gaming lower targets sometimes is be think And is on explaining Bracken, Beach, XX% QX or Gaming quarter into in at next end mean you years. can [indiscernible] the in at some lumpy of

see I think that quarter. in can you a

different lumpy terms categories different at think, grow rates. I in of

lumpy like I be this Sometimes simulation will like was that. others be Gaming think and But it. offset will could sometimes quarter down it yes,

double-digits. I closely or think in see the single-digits or I the low Beach, dropdown Fortnite it, at are the think, Fortnite But I headset you would business. look I I Turtle guess, flat – and a to effect. I could think in didn't referencing, business the they're but what be think completely and Remember, they

a in we're well. lot categories So as other of

there mean, end good of I spite that it will knows? the in I we're the as Fortnite think Will remember, flat? business it be the our famous whatever of Fortnite, is [indiscernible] So think at enough drive with related, day, especially reality to growth going effect, headset But XX%, XX%? The to that to got track who like in new I look that on be grow tools be we've arsenal games coming happens solid is. that with the the as whatever they're big Fortnite. are on able

and simulations, business, in it lot So lot but of of they're only their if they're they stuff think categories. we're mice a I were there's headset admired keyboards probably in do a the and coming. headsets – I and to right and conservatism,

back-end-loaded guide is the in to All year the right. XX%, XX% of you Gaming this XXXX? fiscal say Thanks. Would

just comment, It's on I particular add year, through and No. just Bracken's to want the right.

So for substantial we've specific would diversification weakness strength almost had one like became growing you the we by definitely has for every now our three quarter. been We as category. right. entire itself. business portfolio a the And Gaming pretty been at discussed us, Within double-digit of years in

position. of a as could X% Bracken have and we quarter we when one any basis. choppiness or set have its could of mentioned, a And weaker be some own quarterly maybe volatility, the a subcategory about quarter, We Gaming diversification business in see we talking

managing our basis. We’re quarterly not

the the and give fortnight were want were fiscal looking I and long-term are we we what on at going XXXX. we means, at definitely March prudent effect. year post cautious fortnight the in We cautious AID, say the exactly but guidance trends effect into

want portfolio. comment made just a to just I you Yes. echo our about

of one such the categories. to really be think event – I in an for been many so us it's different

count way XX I the either different I or We're XX think now. them by that categories. in

Video. Some are those of those some of are Gaming,

global for you situation nice if buffer combine does like downs with we're with fact and because, and a it company us of lots that. participation market category So ups from the it's the a that single short-terms that us of super too,

right, All thanks. many

you. Thank

you. Thank

please. Go comes question Vontobel. line next from Your of the Michael ahead from Foeth

line open. Your is

Michael. Hi,

Hi, Michael.

Hi, Yes. thanks.

relative weakness you think specifically last just And to I one left Asia. in Just comparison I that actually. you in me for sort quarters was of wondering Australia. to the reported pointed

you once between related sell-through I again between just explain particular that report it's it general some I'm product you or in If difference what that related growth, the that understood the to is that for the entity, is exactly can the then cell to that explain really – trend media And the you. and promotional if if not and what's again? Thank can driver category?

first bit. the take one little me Let a

and second again. take slowdown the delayed rest world. get in that of strong a referenced on one had the QX Pacific, I They'll sort it. Zealand yes, tend Asia a New of In Australia You we think to and that's, effect they

very, And music. in also and there some of we're the very categories large

us. So for they’re a big music business

then market the speakers. large delay in the being the I of Bluetooth So and the business a combination think slowdown music very in of

they this saw sort quarter. it of So

So that and I driver. growth do But was the biggest been past. think it's will in Asia the Pacific be slower

We of have to this we've XX%, regions XX% in XX%, portfolio Pacific. been growing, where, Asia XX%,

down will think think what expect. see you'll we would of for double that's think I it sort digits, strong that this I think down but be still year. – I come it'll I come I will and

think through. was kind lower the will Europe Asia flow up. that Pacific And have quarter hopefully Asia of so think but be – this comes thing I will is is But as And Arkansas. I issue, and I

on then on one. can always sell-through let in Yes. me we level and stay one high Michael a follow-up

at posted website we look need to factors you mind. that in on versus sell-through you three when our report, So sale keep net

in one – way it is versus dollars, report we is the The U.S. U.S. the first constant dollars. currency to sell-through us in report

you need the that compare rate. right gross So to to

want technical And on you report not if from a happy business is answer as when revenue into sell-through inclusive. driver all to is that net one and coming sales to the third net will on we that more The not growth be or I contra second yet, have one integrated level, have fully this third And on is is gross then does include follow of that one. reduction we our Blue sell-through and sell-through then party.

Sure. lot. Thanks a

Michael. Thanks, you. Thank

And are call like there at I'd the no back over this turn time. presenters. further to our to questions

one a on to about excited a Nate. two exciting new finish things. want year. congratulate we're starting that's and to and just One want great we Well I the year really and Okay. is we're I finished always

much the shares We he be to to terrific company don't think will a into so that's Vincent being when continue than to he's with and on who me double we've It's here others sitting them happens And And going what down completely well. did to is already your anything, built partner me. is Vincent. the catty-corner right next news do now. leaving hook to put the again future. there who continue he's And on I think and didn't he will as but to rare good he are today, a stronger we thank be we is And just – I we quarter. I ambition find as arrived. want but

So good luck, Vincent.

Thank you.

the for call. everyone Thanks

concludes This today's conference.

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