Logitech International (LOGI) 23 Jul 192020 Q1 Earnings call transcript

Good day and welcome to the Logitech First Quarter Fiscal 2020 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.

introduce for to call, like would your today's host Mr. I Head of Lu, Investor Ben Relations.

Welcome Logitech webcast Investor quarter our to discuss Sharon. 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 first live page of as The ir.logitech.com. release, of company's to call available

company statements call, the involve this of respect we the of including course forward-looking any developments or that under with and forward-looking risks a materially future uncertainties filings noted make new made Securities the Safe differ results undertake and operating statements During XXXX. forward-looking result The to Act to of may of in The Litigation as are no or Reform Harbor update statements results and obligation our as revise actual could quarterly otherwise. SEC. other with

on include or as not Please meant results. from considered isolation note for are that in Non-GAAP reported to and will today’s be results a have a limitations basis. call superior inherent GAAP to or measures substitute non-GAAP

our release encourage and reconciliation non-GAAP a Our are slides site. listeners Web between and posted GAAP and press to provide review items. on IR We numbers these

comparisons available replay on for otherwise, and in Web being be will constant are noted between Unless year-over-year is the periods and currency. This recorded call site. Logitech

and Bracken President are from Chief Officer; us Joining Financial California Olmstead, Darrell, Officer. and Executive today Nate Chief

turn the Bracken. now call I’ll to over

constant of at year strong start of delivered year. had guidance you the joining our of digit We a growth. high good thanks currency mid total X% a end QX We and of and to the Thanks, in for all sales growth sales full Ben, high-single to us.

in same. suffer and hardware more do Nearly and another. is quarter-out, some the others are portfolios the while downs of that’s will or All investment than worse. do only category with stock They with volatile businesses investment diversified. categories focused Quarter-in one An consumer offsets. will usually one their single portfolio deal one in of you more better ups no

other companies diversity. This tended investment for funding category and portfolio from specific provide diversity priorities. because to hardware of funding stable approach fluctuations differs short-term smooth That our our growth. Logitech sustainable many critical to is of objective consistent is long-term our

marketing our multi-brand, But can multi-category our we many delivered the across deliver no is bottom top the our company customer to We through operations. leadership term. the lead amazing go-to-market, design, aim key capabilities experiences the a us our is of category That different. growing peers of strong both number long and categories, is engineering, That in recipe. portfolio broad-based where allowed on is line, and to the and deliver in recipe consistently that’s ahead QX

trends the drive global You’ve will business as heard eGaming the business; our of major driving continue rise our video three term. the democratization secular about a now and long creation. us Those growth the content drive it and of talk to trends communication, sport

bringing player video everybody, gamers enabling creators. We’re and to content the peripherals being and about leading equipping excited world’s supporting

dig our into of let’s regions three delivering sales growth. Now with QX categories. Video all our grew XX% of Collaboration in the double-digit performance different

quarter. see Our customers strong were product this very huddle again sales room strong to MeetUp continued traction with and

to great touch customer embedded Tap started a ago. And released conference that’s best highs. single second rooms just video great solution giving very MeetUp, year controller That software our climbed well despite being with access recently to less users feedback. our selling to Collaboration Camera could become new touch our system introduced than after SKU Video their in shipping of Sales Rally larger for

life, and beyond video insights control. Tap. in platform device like the how our beginning is gives go a new products to now, software capabilities see device beta that you’re that that MeetUp we’ve investing which Logitech cloud-based perfect Sync, customers to example. seamless administration, conferencing and is management is in now been Sync brings And software our

flags time streaming customer won’t the Logitech automatically in-depth that’s building issues and offers Video out quickly. And capabilities Collaboration Sync down there. continue be capture can addressed stop software experiences. so we’ll to diagnostics the help just in our to webcams on our It deliver or amazing Logitech fast real we for Capture double Whether or problems growing to opportunities,

March or roughly talk generally bounced were peripherals PC business. about from quarter, peripherals remains to PC growth category around to digit our is even for we stable. as digits we The Now the Day, Investor me And the flat Analyst business Sales consistent this should let yet here. future drive better. foreseeable low-single negative mid-single our and quarter-to-quarter slightly and able stated in be

As the usual, throughout so innovations you us bring some to year, can tuned. count out cool really on stay

of In nothing’s the category. long-term structural trajectory gaming, just while the sales grew growth changed X%, regarding

line and QX? really you the brought in Most impact comparing bottom the it why year in last of how of young are growth of on tough millions aware gamers flattish Fortnite So headsets. unprecedented are The of them.

example, for saw Fortnite impact, has where the had the biggest console double headset overnight. and gaming we U.S., the almost market PC In

a gamer’s XX% here see Excluding Gaming We in every growth quarter. actually versus to delight even we’ll business don’t elevate bring is innovative that continue structural potential headsets, accelerated and and our and over stay gaming change will them. new was products to overall. the out to gaming up last

a that distortion, can headphone Logitech’s clear No possibly in noise, no outside game and Blue latest quite sound your noticed VO!CE in customize Logitech. and that they might just the games. to feedback, unique the our game a Microphones no Magazine none ability change its and really made. the that sound multiplayer called hears with and the team. gives Wired X the mic gaming of have tune You Blue how and than voice to was developed where newest social headset everyone technology release PRO crisp of it ever everyone other best our

will ASTRO summer. new a flagship even later for sound. be connection available has our introduced AXX new new station also a headset. and It of this It version a wireless design, base better better We

notice You’ll of some products innovations. premium our two that priced are just these

of new big Fortnite, With of upgrade the aim capitalize the a we the base result potential to such of a provide. tremendous of gamers first-timers on base broadening as

Of course, we innovations have more gaming throughout the year. exciting coming

both and Pro. grew education. enabling generation continued for both in we growth education new traditional this the our XX% strength robust and for the accessory double-digit We Tablet ecosystem channel Apple other sales out latest and as consumers as quarter rolled Slim demonstrates well the in as retail our iPad both Folio our in This channel. had supporting

were due of the probably speakers QX XX% successful WONDERBOOM up in X. Mobile launch to our new

often versions the we’ve As strong because of comps and will driven so quarter. newest the don’t as before, our expect mobile new year by said MEGABOOM, coming growth the our introductions. growth of timing of in QX, was Last rates this launches to are of product that speakers persist for especially cyber our example, BOOM impact

overall points Audio with up remains here experiences Blue for soft, mobile various Microphones roughly to products. opportunities X new to sales market XX% that’s or wearable speakers While we’re consumers new growth. this were deliver channels through and quarter attacking overall the company whether contributing our great music

continued at double-digit growth year, of figures our trend in quarter sales, Blue the QX look have didn’t on back creation. we we if toward the of last year-over-year their Blue While Podcast another delivered

exciting introduce the I’ve everything Jaybird it experiences love team next our I level. Next to will week, products existing and and been our running. go that another you It whenever about product using Jaybird brings takes

on to for being to call CFO. Nate, this the Now before longer my the and great He’s I’d look over is already together. our turn partner named become a team I and new I on first to congratulate be financial me to He and him no forward working like operating interim. call

So, Nate, charge. in you’re

financial All We and key to priorities tariff results strong despite all with guidance, our right. solid and of our Thanks, in gained high full financial the thanks invested wisely both margins currency grew QX and end our operating Bracken. in execution headwinds. expanded strong gross categories, balanced across at and year performance sales were share our discipline. strategic metrics

Sales currency XXX million. non-GAAP grew XX% to million profit XX to X% and grew in constant operating

the Our of to recently XX% our XX.X% margin QX points of non-GAAP basis in gross target range increased margin to XX%. revised XX middle

We from China headwinds mix did in teams shifts nice our portfolio mitigate rates. from currency and benefit to see a continue and unfavorable cost our actions tariffs exchange the job to taking operational

We increases for continue partners tariffs, to our proactively of the further and locations aggressively U.S. price informing and take steps products. manufacturing impact to reduce of select our diversifying recently including

our our price guidance. increases price many completely years eight good the implemented predictable. year feel we year and and sensitivity approach is have are times or for the full past in seven But We never about confident over

X% up or Our expenses non-GAAP XXX million increased to X% Blue. operating excluding

continue sales our Our we generation spend G&A keep at as were brand, around portfolio, continue marketing spending time quarter. to our up in same and per and X% coverage. flattish invest and both demand million to R&D XX At the we

managing a disciplined another to with approach and profit balancing delivered strong costs, So quarter. we

cash me a XX nice our flow QX, XX flows. Cash increase in from let in talk about year. briefly QX million Now was operations from million last

the still year and year to we non-GAAP our Our roughly to targeting heavily skewed flows towards half operating be cash year second equal flow profit. are full cash full tend full operating

where our In we resilience portfolio. summary, quarter demonstrated another QX the of product was diversified

model. of this earlier, said strength Bracken As is business a key our

we that over consistently adding to invest top can growth continue line long and and so deliver capabilities the new will We term. bottom in categories

it Now, I’ll to turn back Bracken.

a lot, million. constant Nate. currency sales we $XXX digits million said, operating the QX high-single wrapped year we’re of to We so and delivered up strong non-GAAP today just and mid confirming as Thanks income in $XXX growth to of to a start

And are questions. with for ready that, I and your Nate

[Operator Instructions].

first Merchant Citigroup. question line of with from Asiya the comes Your

given I gaming of quarter gaming. couple we’ve to think know have the December how see about versus high-teens know but about growth, I quarter should the think to the a rest about back of year Congratulations quarter. for we the Bracken, unfolding comps been gaming category the head year? like relative we I within expectations questions; September, on, in prompt, everyone. that and the should the half; gaming. step keyboards about was one, But other mid rest you peripherals easing Strong first addressed that the we how as unfolding? throughout of gaming the backdrop headsets hearing the quarter,

business and mouse headset all last growth was course businesses, As the That was controller of in the so a of actually I outside said strong my quarter, our it than new included stronger existing our quite performance. in of strong. opening, ASTRO

our but earlier. We’re range and going really the year, over deliver overall. develops rest good the see the the And will gave feel gaming think I we of I about business the somewhere how expectations to wait category headset in

seemed it a to to good weaker. bit can the X% that’s little And that the sell-in? diversions Maybe guys sell-through know. you Okay, little relative a the then the seemed about that between sell-in reported, talk the sell-through, versus you year-on-year

Yes, is sure. Nate. I’ll one. This that take

look So basis, large. I as on really think gap dollar-to-dollar quite a the wasn’t you at if it

Our X% the U.S. dollar revenue growth and sell-through of reported X%. was we

close prior and majority the quarters So to about on think of the The pretty EMEA spread and between at in as we’ve we our selling strategic made you widest was similar generation X%. dollar U.S. shipping how at some and XX% those some decisions gap probably investments about we growth where sell-through those two. demand growth saw mentioned, of

you Thank all very right. much. Okay,

Thank you Asiya. very much,

with comes Joern Iffert UBS. next question from Your

Hi, Joern.

your some Hi. more also and to you’re for next you category, product question. here tighter headcount see planning here competition already and us is sales months? And you Thanks can taking this much. going hardware question the my here on have clarity would the cooperation direct what be streaming XX QX, force independent what of Do we’ve give services. companies current for second or couple side you into the you we Do peripheral Thanks see in potential very gaming? or as going this into is on space see a please do for

Okay.

So questions really a of you asked lot fast.

Let me a them at one go time. through

conferencing. entries so more. competition be we them, we better, And competitive better. Yes, will So video will expected into you there be makes them, getting we’re

than better ago. months already were We’re six we

growth. any impact other good oh the we’re man had Luca, rise And De occasion. our Man, And our want then going there’s ago, don’t I I is business, but no don’t as about current the to said that Guerrino to so a think to be competition on a far because in Chairman, it’s me thing think to with you no category long time

get and So in more I Video saving benefits growth as out the talking about will that we and there category cost opportunities think more this really accelerate of the people Collaboration.

sales don’t the each all have love the the a good region good it I world you our what well, half around and where is So and and numbers. to numbers, the quoted that do they we’re world now, sales that direct can lose I trying the is tell externally – we competition accelerating I we’re got rapidly I’m been were up We’ve but hire Probably being number through then we surges wrong think going competitors. we’ve we’ve you Direct in end wisely. because the ones. surge to hiring people hiring not

the about So there we’re your around on comment story the aggressively over QX world. weaker market. very hiring a in is China

I us had too long such of think strong China’s for a period way. by the growth,

the quarter to at like in anything last in it’s XX%, been I stay going lot all. categories entry that’s upside. this XX%, category. be finally and And see enable for it XX%, and a peripherals it solid. slowdown, XX%. a XX% because cost I big or we’ve in at I I up that to Apple years, really the of others, then need a a see see China, will pure et and gaming think look to And people ever we and that imagine peripherals going the as that of I is those thing expect this us get in lower for to much you but couple continue can’t If no, didn’t was a or don’t entering they strategic I cetera, quarter. I the as to don’t no, streaming see PC, China is into XX% last our even lower. great suggest do and don’t streaming still I people think experience see downside business for gaming think But at Google It that A as

So it. love this is our place. We

you cooperation coming the Thanks, or see have cooperation remain the room and back with also to tablet think with services Apple Apple and here streaming with will on you this Bracken. Do But or for I keyboard. independent? Google

anything that’s I do threat be. we’re never sound is we’re that. say to outside I just if the big these what continue going modest enable their experiences but any we’re would I we’ve trying on with think and not a like to share capable for to a And too doing do And we it. partner really to feel like we’re players what capable there, anybody been harmless We before always partner I

like We’re just trying to our realize we’re help them realize their trying to goals own. just

Good. Thanks much. very

Joern. Thanks,

comes from Paul with question next JPMorgan. Chung The

Hi, Paul.

Thanks Bracken. my question. for Hi, taking

Thank you.

to You takes Starbucks know Paul if because is to my forever Paul. name for I’m me middle I it them use my saying, get what is out figure so Bracken name

Nice.

low So your on year? is visibility provide you your products? demand been been the relative or any the of accelerate business then channel your did this on a for more And we has you so the I able of patterns second of typical year, first FXQ consumer-oriented how into you so patterns do year. VC, into Does that some more see to visibility kind good still enterprise buying of of for are seasonality, kind point kind determine in half enterprise full have early to up notice kind fiscal of days? the better

Well, first no. visibility, say I on would yes all of and

does. I everybody et And cycles Collaboration than in think Salesforce.com, our cetera, in they use are else sales anything – business. we longer consumer like Video are the

have better potential probably customer do we the So sales. visibility base, to

we to picture businesses that really the have quite the next third. sell some you’re we exactly what’s going the quarter. On on – have This the this for hand, you like and after be it exactly and very other doesn’t where of going working quarter mean next are to sales you what then quarter quarter BXB clear tell can’t isn’t

between would So there, I is certainly but it’s say better. it in

point, or to excited down. It to stable going We’re looks sell-in. lot it and Nate’s it. all But stable. a about so is we’re very It have From growth quarter, year like sell-in a doesn’t and long standpoint, this more it’s wobbles seasonality quarter. up DCS last

next you devices pointing for on and And Thank that. then keyboards. Okay. question’s

you installed right, kind relative benefits of But base your squeezing of in are actually to large So out the mature shipments to you’ve addressing these more with kind post PC now near aging positive correlation some so did we and a mentioned of PC and over growth PC term, continue notice the mice shipments categories. keyboard of kind some growth sales years.

So benefit in particularly should in didn’t devices? term? incremental any this benefit we some we these near see quarter see segments So why pointing

base going install all, going a so between the we’ve because and to think or shipments correlation selling of of first truth of PC categories, sale. that is see that sort our from much sure Yes, bigger I you’re PC not our shipments a than I’m our business forward the is PC lot shipment even the disconnected

have first used lower the we of install bought the to we’re had one bought, reasons higher, smaller one you more buy be highly upgrade. upgrade and PC, spot to story to that better of say, really of that well, when correlated etailers get new but also PC. a the pretty our you the we retailers we’d much on they if the lucky was why If it somebody trying a have trying now. home So or you mouse That’s low aggressively then mouse all with with base were end because if experience would programs is even we where then

you think correlation. So I a don’t high see

our other the thing now On the really opportunity think our hand, business is – our have new introductions. NPIs, the that I drives we product

if we introduction quarter. this they the hit have quarter, hit if quarter better new our cycles, if they think intend a to I next product

a than We’ve things. us you’ll we long do go rest of for more And I think the term that’s us the cool some innovation a through are. got shipments as see good So of coming. year, PC lot driver I think probably going

Perfect. so Thank much. you

you, Thank Paul.

question next comes go The Mueller Andreas from Please ZKB. with ahead.

Andreas. Hi,

you there? in the is mentioned for needle? move What’s and Thanks then declining such you but growing, mice category? pointers. everybody. that these to question. pointing Can large also still questions there trackballs sales the taking the my explain And think happening first outside are assume devices. Hi, cordless categories I such the I mice cordless Two of question. That’s Is –

mouse when been more don’t as story mice. said I negative had big and traction the what’s coming do latest I you’re we of right thing as it’s of in? you’re I a selling think told on A here that’s next, launch, and there’s the what’s the as Yes, I we’ve by We’ve on lot right. do way, think for think I I’ve we much I the a don’t function – to quarters think launched, or are on there. earlier off what’s Sure. on be long No, happening business up know

products mice do last continue going we’re think call be category I of kind mouse the cordless in and upgraded. strong. Our niche continue it we to those vertical The launched the mouse like be to things, more can very let’s attractive to

upgraded mentioned we ago. about You year trackball the trackball; our a

little, that’s a curve faded we’ve got So on growth coming. but probably the out more stuff

So I mice. quarter wouldn’t think over on this

I it think of that’s PC fine, of good. had that business, digits, you our if And X%. looks in at long low-single as happened look that’s wobble it’s the just up peripherals for we’ve as we’re up part If it. business all

I agree.

tariffs without cash been XX days cash seasonality. the then The conversion, on question days normalized of with many tariffs? Microphones [ph], these have exception how would mean had it’s sort the if between cycle conversion. hadn’t conversion of lower of But second we fluctuating of basis the cash course Blue we I The

one. that take I’ll Yes,

up of tied those items a So I in think there’s mentioned. days conversion you cycle few cash

tariff side, to the on increases I in there we we’d obviously, think side. action help inventories done past the tried we some in primarily the were take proactive quarters did announced, when pull to tariff on cost out

So we again that did do this quarter.

improved than it Sequentially, cycle other had days And the a conversion linearity then it as business cash obviously year-over-year of the the was The conversion just linearity seven QX. cycle things in is up. did cash little to better in business.

had some in conversion a There’s operations, we to see bring going cycle Blue little continue longer that number our improvement business that headwind to and future. and in move around. from some we that bit still could it’s is So them the cash integrate in they into as

Okay, great. Thanks.

we Private better equity that. with higher cash but do definitely than Blue we has cycle have, conversion could than

Okay. Thank you.

Thank you.

comes Thomas with question from Forte Davidson. The D.A. next

Hello, Thomas.

Great. taking the questions. Thanks for

Nate want gaming. to named I wanted off, And for on First to CFO. talk on things; first being and then margins about gross second congratulate two then

On the year-over-year you it’s think basis remarkable a tariffs. had gross margin XX increase despite point I the that front

what about products talk know doing And give then I information to controller mitigate on felt to and about some you ASTRO? can to new want more if in premium you you’re the particular on how new tariffs? Just want gaming, console from your

Great.

before second I’ll we – it gross although one am that impressed basis over impact Nate, comment we of off from to question. want the first gross gaming to take in had and jump Let margin I quarter make because I do then the currency. had also hand to I XXX very on points such me I’ll strong a margin a the

to is and managed still of long-term kind range. the we our great range which of the middle So of deliver that, offset in

So I that. good feel about

category. long there and it’s side, a first about the potential but On optimistic lot There’s is CXX the term. of our we’re gaming a the story big

You want to -- go back to the

there margin actually XXX mentioned, year; actually Yes, headwinds basis larger the two Bracken really about points this significant are on currency of the is gross two --

Yes, sorry.

of as well. tariffs …even a little out added hedging. top that our then on bit And

benefit. in In get obviously, sort most terms the mentioned pulling some inventory That’s as for important of the increases actions to diversify ahead taken manufacturing one of of a as some locations. well tariffs, to now we’ve you one-time quarters tariff probably I

were that gross which shift, as than just of keep overall on some to continuing VC we’re significant helps quarter. in like relatively have the again portfolio things company faster helps see so this grew margin, both from and the well. mix margins mind, Also those So benefits higher

some kind half of we’re tariffs tariff of quarter, some we’ll the that of cost increased have forward, to partners so in the of taking all obviously, additional notify next only quarter U.S. we a – middle some selected of – our we price I so U.S. increases. mentioned for steps partners mitigate. the increases did had Looking our

a we’re give So in really doing. credit that I’d taking we’re lot additional operations and gives job an QX. the moving flavor new some that’s doing a Again, of step mitigating But costs. of good to of that that team things for quickly a you those the

hear. Hear,

Great. Thanks for Nate. Bracken taking questions, my and

Tom. Thanks,

Your Mainfirst from next Bank. question Jürgen Wagner with comes

Jürgen. Hi,

Hi. my margin. Thank you much question. -- Actually on on gross taking for a quantify gross Collaboration, follow the And so you up on mix You was? Can Video the product margin? impact mentioned M&A how the the benefit

I’m They’re Nate’s blanket nothing. so to on approach. all us current expect both acquisitions, in on do our wet really all a kidding.

can We’re we’re acquisitions or I’ll doing about organic a accelerate for what growth lot. you to and differentiate them Nate things M&A. Nate, make But company more because yes, M&A stars to line an our we’ve up totally to think that have looking talked and you bought speak always potential uses at new into that and and happen. stuff expect I He’s we’re

again probably I takes would I there’s because just but the think I puts much expect but is I’ll continued expect us always one we I reframe product I some for VC on from predictability Yes, on think detail with would say that into too faster. think benefit to that, and grow some mix, that getting

obviously, were prior the shift that see, than in quarter the to mobile Another speakers good year. had margin higher growth period this thing did was same we in nice quarter and the which products this

that mixed sort a a also category itself. that So was of benefit factor, within

would speakers lower mobile margin rather be thought product. I And gross

Overall, higher a quarter it this the on is. strong that year-over-year products margins. But were like were I basis suggest,

below but growth category it’s that products this of as provided quarter So higher still the that a some shipped the and end. average, on company overall the were

or Okay. M&A, say you And acquisitions Bracken, part of your smaller just on acquisitions is did are strategy? did you say then

and the not part strategy, been align to so all as of before, large the small, past. large, can and talked is it’s you certainly have to pursuing stuff but we’ve our to we’ve that small A in something stars zone. But in impossible the about them is to we really No. expect could medium happen. as make be continue us Acquisitions medium the are do strike

you. Okay. Thank

with The comes Loop from Baruah next question Ananda Capital.

Hi, Ananda.

Bracken on Congrats morning, with morning, on guys. for the Good the good the solid working and to congrats appointment. you. Thanks quarter Look and Hi. taking questions. Nate forward

you a just then of I start Bracken fiscal level, one the should a the do So or for feel about at what know year of key another, same could if And segments? about way it. still differences? higher sort to you just we the follow I revenue highlight couple this don’t you And have ups. appreciate

Look, got a in we’ve it’s the us; past. we’ve big got And that Video CMP. for and of gaming three we’ve that are Okay. it’s other growing businesses M&A are number then it’s the Collaboration, businesses that contributors, done including

same as year. about did them that we started all the the So feel I about of I

was hard for didn’t one big really because It was uncertain know I how to Fortnite the that gaming was. us effect think most really was the the we say.

the we’ve to seen compare, in is visibility that now better a it. have of so that, quarter year-over-year And strongest the terms probably quarter we which now of

we we about So of year good we the that with I the generally good started exercise, geography and speaking do same would on feel much spreadsheet we say of guidance that pretty about based or our the the the envelope that when feel back growth.

what expected is feel or say Fortnite from way of it to you another? start kind that the – different as you you would about is one or expected do year you as And

it say expected. stronger I’d was than

the opportunities good because think at gaming have a business of some we looking fact I new is feels gaming how we – products. And probably The the think off effect ASTRO and a Fortnite looked came but now a G and the by that over quarter, in did and about of that trade-up strong very new our were also it headsets. of there. after both going Fortnite the a virtue big we made since it I indicator good headset the of strength to business, bet that was we business mainly looks end is as into felt strong pretty came many into Logitech emphasize at time, people and the low thing that having

Pro headset It’s in. our beautiful VO!CE So is It’s example a a built perfect Blue got there. microphone design. the

I hope through off to pay year. trade-up and the going And that be next we’re that some year going able to drive so to into is

That’s great.

Ananda, in showed for calendar on ago, actually but ago that the market not year typically back calendar calendar looked calendar decline X% highlight. grew QX just XX% and so at one the of calendar specific, a QX about to a is to market back I headset growth. it and market year this data, went QX to QX comment Logitech QX the a

swing headsets a powerful of a So the and kind just year the a the compare Bracken’s market. about really and that in ago how market XX year augment in ago tough to seasonality was comments point typical headset in growth

All of really helpful. the it. I appreciate context is

of headset segments XX based sort that Is as that point feel the were that key gaming. to to solid perhaps pronounced sort sure numbers you the be, saying, was in guys to you months a for but the there the I’m that more just amount business there’s a make Fortnite this and bit what So in non-headset accurate? envisioned purchased prove you’re of you accurately headwind Bracken, still understanding headsets would attractiveness originally on start that guys are it year your also of putting market of ago,

Yes, that’s pretty I summary. a think good

to of kind we going new great think the headset bought those interesting I last think big is a and really on came upgrade market headsets market if to so we things we’re of know your And could be out a the wave of bringing higher came into medium is them see lot who we thing market. of that I to in and low some end people in, because the if end. upgrade – who can people the them comment

That’s great context.

us mental of just what for then just and for math of incremental OpEx plays so if the of that could. revenue out some key kind the the And between sort cool. it that’s can ourselves? ongoing Okay, Thanks. of we for connect that driving up, investments sort a of on And has how and the kind growth been that Could me. you into I segments dots follow interplay your of

keep increase real Nate of to the sales strategy we’re the expense we’re spending it for we’re of and and this deep this promotion, EMEA would amount not would the into that’s value marketing grew suggest in doing great we We example, as a to not earlier. we’re underneath probably trying I’m quarter, or model to of and into in What sort ours marketing a that been a really it I up. if if a say certainly R&D of go enough spreadsheet but costs. sales equally able kind going look, and moving percentage said terms now is you It’s it. at be in to in really dug satisfy question marketing going expenses, both for a and I beginning started exercise you on that to while, of to it absolute AMR. and Pacific Asia over think And And move

So sustainable right to sustainable that for feels company path build brands a business. that’s path and long-term the trying a like

the side, now have On R&D we R&D. good choices right in and good invest really to opportunities

but well. categories of is an course VC of too. gaming, broad that as that. doing So to based, And I also we’re in that’s doing an we in would some we’re certainly we’re That’s we doing more add-on acquisition, it it keep and when certainly say do going in other

about talking And of the real sort marketing Okay, into versus so been moving got or it. for year promotions. you’ve last

And SG&A buckets? those the would you assume it So that Video Collaboration guys be Would enterprise is really then that kind on East? doing [ph] hiring. addition some to also are the that sort in big of of globally side, moving

it That’s you described exactly right. Yes, perfectly.

I Awesome. appreciate Thanks lot. a it.

right. Thanks, All Ananda.

Your with next question Chokshi comes from Nehal Group. Maxim

Hi, Nehal.

Hello the diversification of Yes. on to really congratulations of deliver and on business. That’s great. the continuing benefits

Thank you.

that On did up hear I gaming side, headsets, the gaming the correct was excluding XX% year-over-year? you

XX. over Yes,

exactly. Okay,

And so represent the quarter? overall the what PC gaming does percent ASTRO gaming June and in

PC don’t and that majority our gaming actually break ASTRO is it is game, percentage PC of vast out. the we What business. But obviously

Okay.

year controller, added now so great of year a too. and had there we’ve last ASTRO it’s And growth the growing

is over? phenomenon greater took the Right. of I install get to before I’m headsets than the at what active Fortnite guess that base is trying

it to be. Mathematically, be. to It almost has has

yes, So bigger. definitely it is

of bigger little a much bit chance be? give can quantification a how Any you of might it

a give year, potential Blue have our sure – upgrade it to you that’s number first actually as that the in and headsets can tricky upgrade earlier, to from get has design into year for headset And Whether many But significant. one you or of as we this happen that. think real it is potential to your No, That’s happens the figure have will new mentioned I the this because we experienced it. and because I’m Pro have just now. user. yesterday not know so see example, why next even because kind you difference I I be came someone that gamers VO!CE, into of

we So know I number. think the but upgrades, we don’t exact will see

and why through? a Can Understood. there the just differential big year-over-year was me between walk sell such X% you again XX% through EMEA

sure. Yes,

Let try me again.

XX% net those the dollar growth X%, of caused sell-through So numbers U.S. are is are the spend U.S. basis dollar strategy selling a into the are by both and from the really numbers gross promotional on moving growth spread reported on the And the sell-through versus of basis. again OpEx. that versus a revenue of of selling down transactional majority

is discounting, promo a the And and because which so revenue the just less revenue there’s means net. net spend the higher into or in really the that the primary gross that gross sell-through between translates difference reduction the number

you follow Did that?

sense? Does that make

headlines that see -- I here the guess I

…for the quarters. last couple Yes? of

not differential me promotional The headline you’re actually. No the the no, Is is I because no is that see inventory activity. is here discounting that but correct? case build, telling channel

That’s right.

not coming line, is on channel activity year-over-year. out relatively which We’re channel inventories the reducing stable build. a so top promotional The were inventory it’s

Understood.

that then And that Okay. reduced promotional activity is --?

XX%.

Asia us Pacific too. is for

Pacific We size. in mostly New Australia to business. but a It’s it’s good have and also relative the bigger Zealand, business a Asia

continues it’s a but think it’s wobbles speakers but It I good. I may New business. have pretty business great and mobile down be there Zealand think pretty to in Australia and it’s the such an seasonal culture outdoor

large We market have a share. very

I we there. share have down a think market XX%

All right.

time. there call Darrell I this the remarks. closing be for over will And no Instructions]. back turn at to further questions Mr. [Operator to appears

first always is and good year a we Well, to just team, our good I quarter a say quarter. to had first a as a key good

good So now it turn a we need year. to into

lot next So of and see such job thanks I in partner you Nate we’ll think congratulate to this all of team crime, did my a quarter good the for an rest engaged want call. quarter. guys I who a our and again

conference our today. concludes call That for

may You disconnect. Thank now all you.