Logitech International (LOGI) 21 Jul 202021 Q1 Earnings call transcript

Good morning. Welcome to Logitech’s a Video Call to discuss the Financial Results for the First Quarter of Fiscal Year 2021.

Joining us today, are Bracken Darrell, our President and CEO; and Nate Olmstead, our CFO.

During this call, we may make forward-looking statements, including with respect to future operating results under the Safe Harbor of the Securities Litigation Reform Act of 1995.

We’re making these statements based on our views only as of today, July 21st.

differ revise we any could to no results or update of actual materially undertake and obligation Our these statements.

we call, today’s will financial non-GAAP During results. discuss

webcast being You our the sales measures and page non-GAAP, that materials call over could GAAP We information can financial open. carefully. our on factors reconciliation results in our Bracken. is sales. will as our periods in call well and our our of these encourage otherwise, about on non-GAAP replay well release noted website line net slides and comparisons subsequent between available ir.logitech.com. filings. and filings annual be recent report and to more the are with Investor I and of for use This and will call turn remarks impact now materials find Relations Unless a are website. this view the and as as is most and prepared recorded you SEC press Bracken, a your including as now our currency, available between to year-over-year our These of constant are

remote a if hyperspeed secular one everywhere, for home. as big part become subside. the thanks call business Video At when It’s trend, waves, we of a the the long-term us new one at path in many and to a that office. is trends many where Ben. long-term kind surfer’s it to the dramatically hit as of suggests of new a for to this our -- don’t. surfer on in of needed joining when daily that focused like years, six button, unlike described with coming, repercussions even to short-term to point accelerating anywhere, a completely work We someone have [ph] fundamental of long-term you you like trends. our don’t which was life. second wave, liked decisions exploded. now its Logitech, are done? We say era, a very when of people on us. time calls my we basis. enable next and you, based catch on like we actually the to Most era. waves it work coming. a Thank faces, companies to it a off COVID-XX we trends, from Because long and fashion few ago. I continually up secular return few to our beach. workers have was were accepting people analogy. home it years seek of most like as months trends Fridays seemed stubbornly struggle Good. And I We the of never started trends A companies exception series nice which analysts most surfing way And to so Imagine but always see a a of an simply trends, They were Early us COVID-XX, them was ago. investment to second on trend make from business. we have travel a all familiar usual. the a that a These felt lot knew video knew for accelerated

discretion. their to over employees X week this will week, Siemens That’s at meeting to a And announced more three XXX,XXX work their of two in its of right on some they and of some or a people than surely desktops be let upgraded. the own space and to home. than be left work employees would improved space. billion working most be reconfigured now, call home time created, we from office. offices working lot more proportionally behind just days will at sit last Companies home they new allow As the at are of

Forum this trend doubled democratization doorstep Streamlabs more a long almost And new March podcasters, come, grew over Hatchet this need them, we’re likely will the XX% to four a And and That’s buy people during will the of era be web XX% -- seems who watch of straight that It’s phenomenon, game have would while and traffic. a in thinkers, over a But months. online. artists, term, of favors creation become for today more total esports huge join growth thing, versus streaming In the quarters this and report, trend time, The huge levels uncertainty economic The be industry the them could in just year uncertainty third according quarter. have this gaming. off. & the comedians, creation from sight. express like all slowdown That’s another speakers, secular this create at these accelerated new seeing connected. grows. it’s so way Online other, World to has for hours lot compared as not each could the has taken they’ll and turmoil, All now only guessed hidden a year Logitech. shutdowns overall done. the ourselves to Stream last entertain post-COVID-XX the new in a era. and esports. to we another things. And And explosion had content tools. phenomenon. dancers, gamers, of knew all even the an need into or have increased taken that And trends. even plain stay hours peak play home was XX% perhaps about much the a the new that gaming increase we of of standard, to moment, to Fortnite related the creators network Everyone viewership Economic these at we’d COVID acceleration makeup level. magicians, to time reported we’re In Musicians, they’d the This effect public whole June quarter sports

I proceed, groups. Before want to thank two I

want to for have our patience with working. I thank adapting this quality impressed all and over the been way commitment world. teams resilience, First, I’m employees to so and their as the of of the flexibility adapt we new and ingenuity and the our

think before ways to our present a alive felt Second, I to past, What many our with never remote before. degree, mortars distribution Logitech, are brick so and in matters customers purpose delayed. we’ve hope, remote reopenings we and thank closed, want and XX% Xst and March. never future. it around brick the XX% to customers, simply of has school, with of offices These surreal you mortar are slowed and of and slowed, or I offices times now At was relevance. I the world and do work Logitech

quarter. about business did this strong had how talk let’s very now, our quarter. So, We a

Video QX fact strong with grew but to the sales than across Sales grew past in webcams webcam Difficulty] tripled. and few despite Our growth non-GAAP that headsets. [Technical operating and with adoption Difficulty] majority our closed centered sales the Collaboration $XXX the par employees. were on XX% grew equipment Brio of offices Video we’ve in vast systems of sales what income XX%. [Technical products, more some seen BC quarters, skyrocketed. grew also business like

categories. will pushed their they work And companies layouts, While have their with to we grew category be. cases their impacted as where conferences offices as many only office drive was within out category rest decline adoption live or than Presenter temporarily with accelerated Peripherals was seen surprisingly, of where video PC Peripherals rethink PC from for presentations home, by the sales equip more product XX%. disappeared. office our But we’ve and working, engagement our creating the in and who in learning offset more sales deployments many rooms people effectiveness as The others growth so XX% not and Presenters at video declined video that negatively employees our

grew X% more quarter, Devices momentum As PC sales level PC with sales doubling and Webcams grew Peripherals in continued grew last overall Keyboards exiting highest Pointing than quarterly the decade. & strong QX Combos a XX% Presenters, to the excluding XX%.

our as to ramped do. we capacity shortages While starting supply March, our component working demand, ramping webcam we we’re meet of overcome to in

others some sales We will but tougher back Accessories we time, expect it now moved remain could doubt, tight pace many XX% No education learning from environment quarter. particularly sales increasing adapting class some Other still will comparisons grew channel students the to improve, half, Tablet the the world take QX person, face XX%. throughout Schools for strong in moderate this but to head are underlying expect hybrid home. in while But as significantly pretty into we where around learn sales QX. our webcam over continue will supply we to with market attend a quickly virtually. tailwind as particularly to and with

We’re seeing it way combined tablet substantial Gaming an smart perfect through grew community. sales XX% for typing with a case. educators connector a in younger quarter. became our experience friends this products, accelerated which protective for offer to demand students. a a from to iPad It’s Gaming as superior stay ideal connected

our was percentage $XXX Company gaming to growth. number do products Streamlabs points with as gaming. adding overall roughly simulation one our seller in to in growth X actually GXX strongest the well, Wheel quarter, This continued sales the

in than the other Speaker categories, retail quarter. physical recent Mobile XX% with expected, sales As store more over closures declining hurt sales

to that we potential from Jaybird and to stay-at-home expect said ago. products Similar also category Headsets reallocate growth we’ve in these we previously, toward source wireless sell-through, to are we’re when working had we orders stores. Microphones. we sales XX%. will and knew QX, headwinds Jaybird Speakers, continued sell-through But, double-digit benefitted versus given increased where become We the other and in two the QX to see for by to challenges in total were closures continue structural of but toward some our growth very Blue X transition XX% Mobile mix. somewhat other As times Two resources didn’t of strong to a to portfolio Vista our Mobile entering that term tight near XX sales demand. mortar Supply Mics meet over alternatives Blue Speaker with the total Jaybird year acquired categories but brick our to we Collectively, of the long-term continue impacted product Jaybird were market, negatively of be true sales Blue strong initiatives.

in to you through let rest our to turn the me over Now, metrics walk of key call Nate financial QX. the

Thanks, Bracken.

particularly gross on of spent all But, offset XX% this than As about sales profit last those Bracken gross XX% despite range. had expected we our just up costs came up length in XXX despite higher end able with multiple XX.X%, overcome significantly as accomplished impressive in better airfreight gross through were and than at view We product to SKUs could lower of XX% quarter costs, that and the fall was spending currency growth including We constraints margin Non-GAAP XX% spent strong to another but basis toward also well air and supply in margin to we quarter, highlights, this we Bracken increased we year. this had $XXX resiliency margin initial as high million. headwinds. our said, product the performance points more that marketing non-GAAP lower quarter where multiple target freight operating and to favorable challenges we continued quarter. mix. promotional spoke to

deliver to Our great costs operations results. managing strong did sales and these teams a job,

QX are range. put some in and to on factors the target second will we margins, to gross likely that ahead although remain pressure our half Looking margins few downward there the year, a expect of

our higher from logistics higher we volumes, costs the but across First, due industry. air especially to to remain expect rates elevated

as also and to marketing spending our demand will promotional supply anticipate reopen, We increase. retail that catches QX in up locations and more

as in sales recovery is team standpoint. great of our tablets Bracken lower mentioned, QX the thus which factory Nonetheless, Finally, February we operations a a we relatively unfavorable a great and expecting strong from margin and margin are education from closure. category will results mix by be had our

is which rate. growth sales last million, was our $XXX XX% net year increase reached versus notably below expenses a operating non-GAAP Our but

was While cautiously key we as weren’t March we our maintained from the investments priorities, we sure in if began the quarter surge sustainable. demand

the progress and in the accelerated however, investments As year. further for and the favorably, of accelerate spend to our we quarter QX our remainder expect

software but faster We’re before increase coverage, our prioritizing hardware as moving brands, and expand same the sales to our areas and develop our roadmaps.

our in low Now, operations to in flows a million, significant sheet. our due cash let QX growth was at XX delivered This at profitable turns. days, strong year. result primarily and in multi-year cash million faster conversion inventory thanks cycle $XX We to me another cash a to which improvement ended flow up last move from balance and business a ended which from of $XXX

we by to We strong on products use have buffers will fortunate replenishing in to are key distribution sheet increasing and own as our this a balance inventory our centers. advantage

ensure While this spikes. demand cycle, it may we for increase our are future better will cash conversion prepared

Let saying look execution growth our powerful strategy, me discipline results that future capabilities. wrap this And to out our up the as operational combination multi-category not the strong recent of and QX strong may by we and our quarters, sustain. demand highlight

the year, multiple not invest create remain run. top nimble continue long for or to the deliver to line long well scenarios. goal will will because we to over the for Regardless dynamics, So, great a a of value be great and and prepared our quarter but is term execute we

for Now, I’ll remarks. closing and back guidance Bracken turn his to the call

fiscal morning, digits $XXX $XXX Nate. between income and operating growth XX%, million from to single and between we’re Thanks XXXX This to XX% raising our mid million. from year $XXX and sales million $XXX million non-GAAP our between

with While there are for wind could which up we’re experiencing as comes levels in the are guide demand in in and final a sales our momentum we QX. The promotion to normalized again as headwinds specifically QX. rebalance. as and double There is QX, tailwinds quarters, digit up tailwind more strong don’t supply from demand, increase catching supply likely end spending headwind while

beyond you out moderation into can accelerator, back good and so the quarter supply. could outlook. of of of scenarios, supply one is the we are our incredible to Looking play working stressed, we That a we including in our foot macroeconomic beyond. range as assuming categories year, say, see a current supply where said, holiday at conditions we can on put half believe the the Therefore, increase have operations team of as demand Nate the a flow it, we

of On the demand. back potential for the moderation half other hand, business we’re managing our

So, the continue the beginning is the term. brake. in fundamental we’re the other uniquely of Regardless foot, performance, trends quarters’ few near described long in the next optimistic that the ahead I Logitech are capabilities. to will execute. We’ve well, It’s strong this we to The did quarter. we product our never continue to across had favor. to categories. positioned our as And grow in up execute such trends us strongly

what as collection in creators, the from of and especially is work home, X That’s of Looking world, businesses ahead, we’ve era ubiquitous PC portfolio anywhere, video, plus gaming, that built sports biggest the for. our billion coming.

with doorstep and are We on Nate that, the questions. your up. of them take going that Logitech era. to let’s And are queue Ben, I

Jürgen, Thank you, Bracken. now your for Q&A. open line is

Hi, Jürgen.

Bracken. Ben, hi, taking Hi, And questions. my and Hi, thanks Nate. Yes. for

the a two Zoom side? on hardware and was services, second pile, one would into please understand all, flow, full smaller this question And did or pay to a strategically. sheet. they more deals. What partner. of balance first for is announce the when mean, I enter your are The to next you the first from But, you you as be questions not cash rationale allocation move every years. behind your announced out What able two cash complementary the capital equity having quarter. free now is plan very-strong accelerating still We And

profit looking yes, So, understand balance do question is strategy And benefits. on have for pile mixed forward? are And couple the very at have this other the gross we really high you margin. in of headwinds, hand please still also the sheet? you why strong that what going last cash is the the but again I a

XX% fall -- have should I the and profit to gross the levels So XX%. why understand I into struggle from really current margin

next over seeing can provide us the one is If what the clarity, more quarters? or two impact you you’re

last let all I’m partnered But products. in companies, I’ll as named -- Jürgen. companies they named. let take to a the not hardware that you one it’s going course, Nate Of two. that offer take now with companies one. first we they were and Zoom, several The were And service.

So, the they integrated product. have into PC a

know, would that, have part announced yet that. As not of If you probably we their have had we we program. been

and very partner and Zoom are We Microsoft well with Google. with well,

rooms would in partner. all -- be I’m fact, to we enable quite But, one in product, that were a we’re Zoom than have we if we anyone. So, more for sure

cash record capital right we you’re more strategy, keep the we continue cash we’re from now. On pile, right, allocation have an and generating at just And believe we from a levels options to M&A standpoint. great

So, at M&A. larger we’re looking small, medium and

targets stars have we But and going As see there really you we’re M&A out is know, the because to pursuing really align. large keep difficult them. M&A to

our So, they’ll be priority. top

right And you are we the now. Do piece? gross course, want do Of cover buybacks. our to continue stock we’ll to dividends increasing margin

yes. Certainly,

on think than offsets expecting. as just stronger freight were I for So, quarter, expected some Jürgen. higher favorable costs that had this gross Bracken over that margins we mentioned as and we Yes, I margin, were gross air But mentioned, XX%. we

So, are freight I freights. air and supply, air industry think higher some to forcing looking our catching volumes more on it’s forward, pretty still we’re right up now we still and high us costs. expect The use rates

So, we continuing into QX. that continue to see headwind

of One marketing with of much tailwinds had as on QX as spend, in much. short locations we as lower normally were demand, just because supply retail spending close as was promoting promotional in-store we was weren’t weren’t we as really we down, this And we the would. --

money normalize than going to We’ll So, levels. as favorable I normal on to be going marketing, less demand is be in-store to rise the think more in QX. to that more is us promotional in it was the supply starts which also QX, back spending spending for

still probably good some going to good business QX so of bit it mix these well, education year-over-year see for things as combination increase less an impact. favorable us, much in of is which because category but Mix, products, a year-over-year, that lower favorable of mentioned, but the little think I as is was we’re plus So, you those in margin.

the so, think net is, I margin at again, from in there’s of moderation expect, QX. the I some items some result the those favorable levels were QX, And we on in gross nice just of compression

everything, we Jürgen? Did cover

line Paul, is you. Thank open. your now

Paul? Hello, Paul.

it Bracken. How going? is Hey,

Good.

in on open Asia, further And, And pretty see were kind have U.S. market? I drivers and what retail So, just in those the the and the that stores big do accelerating more? you of trends of up there as outperformance follow-up. a Europe

of us call as to or stage going I of of course, mean, China we’re ahead reaction obviously terms growth Yes. in, trend ahead especially we this of Asia, and COVID-XX of one two you’re us. we’re kind there. so is really -- the suggesting, strong that or had a the probably And three in months

there office, we growth, I strong side a we had the in think well business. Peripherals seeing growth business. PC had webcam, We is what as personal both our personal in on collaboration strong you’re strong as gaming had

exciting So optimistic continue? very a that growth. they saw us see really to ahead and think I we’re the Do expect to across our we it. to the The drive continue, relative super so. And because about fundamental we of board, of quite world. rest business it’s are strong trends that little the

Okay. triple, kind is And Brio pretty high-end then, give on mentioned the between impressive. for which a for BC, You can the a sense breakdown webcam? us you of

ahead year. you. the for then, you’re which on five comment XX% solutions? workers seeing, could thoughts you the And also years do maybe kind software extending? kind of expand a Thank start if kind see you some you’ve of of kind kind could annual seen on the that the you providers now, also verticals competition. nice Any this the growth, And hardware on back office. introducing If got of to of You’ve that of heading some of demand

try I’ll that. Sure. to cover

breakout of growth, limited very webcam. had terms growth personal we’re engines out, in very the people growth high-end two of in We cam conference of kind overall, think, very and then Video now strong Collaboration. seeing few collaboration had I because needed a was

growth Now, a strong I product I’m mentioned Brio, is $XXX cams. continued which Brio in growth conference in webcam, we’re using, suggested, seeing, well as that the you tripled, as the as which

that have move we I we’ve the cam, initial we’re the same strongly -- or into will wondered, at that webcams. we strong will the will -- conference think, had, the stages growth

to or announcement, -- I actually we’re I home going they’re giving XXX,XXX the back We’re are or or going is where people work they the into Siemens two what seeing can week work because a offices. office. week in a to of eventually which people think happen, have was rest at to days weeks three the of days XXX,XXX three go their going last both, to and mentioned two them employees

to video way, setups the of companies that So, calls two to different of we’re thing going sake. with they’re companies that’s won’t names time happening home video doing all were God’s going adoption, never is almost calls, name the did the and other they or way fingers, snap terms by -- just still for behind lots in need now the and need video from they’re of now all

those when to go to going employees are going So, it video, companies back office, give and to to they’re them. the expect

do that. So, product in numbers to the and is are of this why think as China. such start home, and in back already we go I offices we’ll to we absolutely have. go is at companies think Brio in, start will for cool back a as offices I But, But, we video in set be bigger still you’re video to going up the to happen setups have throughout which

competition we set, of terms there. have that In great competitors in in

We’re going competitors. have great to

and be have and -- It a great product better and So, makes not you a makes that category competitors and you certainly invest in -- that more in. you you’re you good can’t requires and portfolio. great have

feel I that. about So, good very

competitors, -- the call terms them In you a software the service players. of

in day, support We players, what the business always happen, And competition that. never that. some experience had we’re service That’s with incredibly have sweet PC do. to up more used look an environment better. people products spot. there’s We’ll the that model in You our they’re piece sell. what that’s That I If very the it used we making direct think such market, we we the to an know do partnered like that was We do the And play in we grew to might our terrific. that’s never in to. role going where here. we we’re best. don’t the of competition, at really end the ways because -- and hardware have will from to it to we make in If don’t, do try to those best our PC their important the

bit if jump quick Bracken well. I can Ben, Paul a little just real BC for in trends the as on talked about the webcams.

the early sort things larger of really see we we home. trying productive of start as well we their more employees started companies be One from sort some that expected webcams, to of is on bulk some said, to Bracken and of as seeing they’re help of these make as orders

saw. of their that are to may that as trend, of deals retail. lumpiness closed through companies little But, again, whereas that some been that done positive a one have a nice may that’s trend those across a lot it’s It looking quarter. of we portfolio a employee sort and cause standardized large not So, of base, bit quarter webcam another before

Thank Nate. you,

open. your is Asiya, line

Great, the Hi. Congratulations, good on morning. results. strong guys,

couple a questions. Just of

cautious observing But, would all what that suggest to in what sharing, or that conservative. Thank you ratchet be bit you. of calendar you from some a what more your that to more are be as your the the are just bit leads competitors, up, this, back are your little commentary observing spending partners this strong retailers suggest a little I competition year? more are in promotions, of of would given stuff, et constraints well adjusting half your the little from you promo marketplace the pandemic know, supply from And a you’re cetera? competitors? demand starting and Just to as some the to retailers XQ observing

look Certainly, half into something just -- as to are there’s as causing period. moderation look we It’s competitors back that for -- we’re a uncertainty. really more real in the seeing us

we’re while a still one the a now I uncertain it. some At think, in living period been go we’ve point, other. and for very way in things or

have example, the on As doom we’re unemployment. drag we going the we’re for be we that’s have for in into at world. to and long want time look QX don’t to to but QX haven’t a gloom, seen around going unemployment levels that I

hand, going other to to up. the are start things On open

So, and world a haven’t are restaurants opportunity things in to -- had do movie theaters up. parts you’ll going people and probably to most have the of the many open of that lot

of forward in the could We of away the in be all -- some that there discretionary reallocation there those happening, gaming spending things. pull those and So, into are period then, at from for. holiday some And be from especially other things that’s and things might QX. look QX the over

moderation that Our QX. say, to future Gosh! the QX We sure in should tendency is really possible view a make as period we and

strong growth. not we continue to On really the true, and other hand, that’s if we’re going to be capacitized have set up deliver to if

And there within even some can as of your expansion practices that that would the think any kind range? like, what you’ve are suggest or Are adjusted function changed sustainable you normal? of generally new margin a things of this you Logitech speaking, then just target Okay. margin, business that point to within

it’s to to the at And finger this once of ability this month, demand, ever and is, been But, we of a better And there we have -- got for Well, many us we terms I’ll what say matching directly stay given better But, really always happening that’s a pretty a margin because all on example, are to Nate that’s had. execution. lot, I he’s probably have the than good say we’ve one others. few. top a comment now, of I’d let key the that But, say, let would on the change. Nate going gross have are that suggest would biweekly business and respond there on That’s and of pulse Nate I’ll exciting. on are margin whether were you pulse, a we’ve biweekly there to we learned our a expansion. supply I time. we’ve what’s some One so is I comment. can in practices uncertain. the used finger right

probably that’s underneath think your I question. really

what on that Bracken our demand jumping got things also With slow really to of that surges, we’ve to down. ready using got just we’re just sheet, as mentioned like our too. be remarks, Yes, mentioned said, my I prepared in balance to top prepared for strong but to we’ve be here. Because Bracken advantage

wider So, is to we’re fine. range, having little a manage which

and good it. doing staying But said, top make We’re on we’ve do of to like in that really the of the had frequency that. to some check we things at Bracken increase sure we’re

are mix. air down of margins, I’ll little with the the right focused in up the recovering now remain shut that rates again, we’re some that we companies capacity has lot the earlier. term In same so of travel out capacity. consumer industry to a has And they’re February unchanged, the we really for a and taken rates. they The are. in freight reduction having And on of in lot in come pushed a situation to what and that supply still use which long industry, margin our of bit and other freight terms back were air more mentioned they’re drivers The

We relatively added bringing well. nice small, still is focused it’s margin higher but a to that We’re have margin as on Streamlabs, products profile contribution. which market

not we drivers But help going margin stronger our the I’d on to levels the using term business. If think say outlook sustain to invest that’s though, had, that I margins. certainly manage at the again, to see are So, we of long really we’re top unchanged. going us demand by us aggressively. continued which we’ve it’s for remain

focus into on that come business just period. think our through we’ve haven’t trends the this our confident priorities changed. But, continued term to built I which sharper we’re have long

I focus, in doing that’s continue half? have come our we decisions and and something think the to investment expect second into similarly So, sharper QX into

Thanks, Alex, is open. Nate. now line your

Hey. Congrats on the great results.

couple a Just quick questions. of

First just to of all, to back this come point.

that the EBIT EBIT only You guidance, quarter rather full million $XX -- consensus and the or on by raised consensus obviously half the by you Nate, year much. around in around

bit China recently P&L, the wondered But Obviously, thinking and the of you of wondered macro I what of terms terms that. for go of just manufacturing and more And I could particularly, terms we moving there. just are out diversifying footprint just comment curious, COVID a components your your given the about that’s mind? latest the need state if latest certainly your you in understandable. what the to production play reasons get to a secondly, bit to you’ve So, just a if down talk of as little in on you in situation. logistical could been issues in bear more the key there, uncertainty, bit of alluded you any you just

Alex. Thanks,

second respond me first. I’ll let move first. on. to question And then we’ll take Nate Let your

distributed manufacturing our I more I significant In terms a we China. outside footprint, yes, don’t of we would say And have network. have, now that. manufacturing, manufacturing established of overstate

we We’re still good I pretty China. about manufacturing feel a where are lot right in now.

a which few the of things about was to accelerated one Asia it outside China, that think I was establish in did. tariffs we like which really to of that the us something things needed of beachheads anyway, one we good we do felt Southeast -- for the

So, I now. we’re good in spot, think a

we different a We’re ability the manufacturing looking at into locations. factory have is of factory with one and And, We’ve always China of good -- into and in going out time. our strengths really manufacturing them. in that of our move done out that manufacturers keep our to in to our all

other thing Asia. doing of We’re parts now into same

very want pretty our we can very, question? key. And So, is things I flexibility think I about and you flexibility not things do fast like do the that. the can our to feel ability manage overnight, we other take to but good now. It’s Nate, do the

Yes. Sure.

think that midpoint revenue about Obviously, I the $XXX at showed some up million. QX. change we the I about Alex, think, by when of up in took outlook, the in the

the shows it increase. on the at But, bottom Some it’s line, QX of at which the through look in if top-line at our million we up the line, and through QX. close about kind to typical is the midpoint, revenue bottom $XXX structure. again, that outlook XX% of And of flowed for the changes to just you

to the setting a of we’re for to had to this invest. as to up strengthen to As the make for really success. We software we’re sure the year hardware strengthen roadmap, accelerate priorities going ourselves just roadmap, I mentioned, long-term continue us see we some

[ph] line your now is Serge, open.

hear three can me. or you hope I I Ben. I you, two Thank may. Yes. have if questions,

Can has seen I’m Asia, COVID you for change too, the or If a was shops of kind cycle, and going mean of transportation impression. totally bit and you bit online retails, demand give then that in tremendous each give had weaker reopening or a to wave internet? what then it as this what X can promotions or only due region guiding sales in reopen a color flavor? you have you product costs in and mix reopening does are The also U.S. demanding. Europe closed although because my not can mentioned channel? stores phase COVID first, base been of will forward, Because of that little of but and guys margin What you whether wondering is us of the you U.S. expect the more little

looking could more which I Pacific the actually world. It’s of wish part Asia There’s of the rest China, problem, for. you which something online. doesn’t you’re biggest I predominantly our the a what that look is like is of number give

So, about XX% it’s online.

up mortar in it’s open the China, kind think while strong. I or and brick did as back So, relevant of don’t

don’t it. think at look you I So, necessarily can

kind If in you the question you look we this though at step first back answered. and mentioned of and -- categories the I

add to Nate? Peripherals to demand in and could then personal the seeing think business that, to good is Gaming the very be the in strong look Do else conference want you PC still cams the of I think categories similar and strong. to And in world, even and anything better. I meaning super very be rest webcams. continues

I think you’re right.

terms they I dynamics regions have pretty e-tail -- it standpoint, the mentioned, from but consistent. the the product in think, similar demand, think I were Serge, are more-heavy structures, elsewhere than world. China’s between product of in some was right, But a on like Bracken channel different

Amazon topic. kind I’ve and month. to help this last people prices. had, promotion can me on the And during me [ph] learned you now, of, XX% tell promotion make And didn’t of probably Logitech official that Okay. XX% any that When also the channels I talk normally to the

XX% of such have the reporting XX% expect underlying that be So will XX%, growth growth has that I expect I hit? been or the do would of will means a get then have lower? can that to been So, And this growth? that instead XX% -- going forward

Do -- you go want take I don’t ahead. -- to

our came down. general, mean, is I in and your comment promotions that think right, Yes. I

will, unit grew revenues, because hold of sell more we sales, Our in promotions. that you to our in faster net sell value our through sales if than to on able were the lower

due supply fact Some had of product on that, we the or to not. whether again, our was

And demand. on so, the on I’ll or call hindered sales the the sell-in, a constrained places some in We as webcams growth But, like or sell-in saw cases, we was where you’re in increase really net supply. than the places were was headsets faster right, it, sharp quarter. growth in

you. Thank your open. Ananda, now Great. line is

Hi Ananda.

Hey, guys. a performance. Congratulations How you on strong doing? are

Thank you.

welcome. you’re Yes,

And year? be through and those that Collaboration of -- -- catalyst and some serving what’s the console do I your the to Video Just sort in can can also think the pull into then, next if pull ahead on of of on little bit. Video you’re What’s seeing have your forward a each forward that. part these what couple there as much year? sort if things guess a the of on season we And Collaboration. get spoke console end beginning launches your after best you then, the you a gaming facto of, de -- gaming, is the best isn’t then of but Bracken, and and of could, a What’s ahead on at follow-up holiday that launches I of

ASTRO is slowdown as compatible historically, as with that -- there, headset because a console console. had the have is headsets, future weren’t console which there ones. we’ve business primary those the they the a the And things been Well, Okay. affected with launch, was actually, come, has there business in

So, then you people the would buy they slow then new delayed have down effect. a later and one wait, and

you least announced. time case that, is have So, is happen kind you would dip middle. kind forward in a at a this, the have of in of than Microsoft, more the this plateau, The difference of that already compatibility

that’s to on that also new true optimistic the going We’re console. Sony be

see So, we may to may that’s possibility. not that but prepared we’re slowdown, think or

Yes.

sounds like it you’re So, yet. not it seeing

saw No, we demand in I that And the console all fact, category that fact, we’re in couldn’t hit meet mean, not. we strong. for the quite category.

demand supply. add that right. to on sell what sellout were the just probably were slowdown you that we Bracken’s Ananda. into made able stronger made to a was would have we little that that up. because normal before because And home more, Yes. I that people And COVID mean, The short were we was going we at prior the lockdown. assumption then, than see now that console in to refresh. Again, I decision pick as

because consoles, when You Do of the because some you you pull it’s don’t demand you typically to the that get -- see is you that forward see possible think actually there could demand? the this see COVID situation?

mentioned I Yes. that.

forward hard be. and maybe I gets pull bit QX holiday know from. just , into where it’s coming to QX period pull also think really little to It’s of hard don’t the one really, We predict, could that’s -- and possible. it’s forward it

it were to that from whatever embracing Video it an pace then, CEOs, and or does around Collaboration in sort it of those telling back the anecdotally? you And perspective, had hunch are more thanks. you And really Cool, as sort -- Bracken, video hearing of the things But, call that that know, collaboration. on to demand depth Collaboration, give my you mentioned sound there’s CIOs what expecting, is does because being guys like sort way. you into initiative of just people an enterprise sound detail you for CMOs office, Can are some yes. of going now increased be around, the us is I Video you’re of get don’t some you new to shifted

already relate all we closed. about our there. where of U.S., the It’s our back And open. offices of China, I we in around only this there’s is XX rest In series Europe office? open. no discussions listening a in of a In of middle who’s we open, of of we come how Well, lot and moderately do happening the is have have going think in to are most obviously the but open offices whole started Asia, -- the offices have offices out to anybody really

set mixed a we’re CIOs the up this are bag. with really that a to now. and really I this dealing And are live departments are IT thinking So, and do think right about would It’s -- discussion. be we going CHROs forward, how wrestling those

do when discussed. more think, of I office, I’ll range be video back they’re you more come able when in guys, give you want topics There’s being rooms to because socially need on the you people to distanced are you the to that call.

might even So, rooms. people different video them actually a two in have and want you on call you

might who’s So, two them somebody not doing in you have rooms the to calls in office. video different

they’re possibility. happen, a in it’s all how that’s video. going to So, I That’s don’t know much possible.

say be people everybody’s -- I’m group. a time. sensing, to And likely to more it’s all we’re going home, calling. I the more they’re think likely so what it’s video going mixed their from used going and calling you’re doing to to In -- are video

going people when we than a they be in call, the be more So, to past. there And were to it’s at going video. do is home

And so, enablement. to we’re going need video more

do really to as of deployments be the to rates. of going so, the in we what to like that offices combination. to But, I the believe work short-term video going that’s And don’t I start about what a there’s future look get in exactly know do lot their growth serious office-home

Tom.

now Your line is open.

Ben. Thanks, Great.

and So, question one one followXup.

your So, Direct should how trends for my about think Amazon, we and elsewhere? sales question, first ecommerce on

can you. at that won’t better it looks look if that you Every surprise probably Well, good, imagine even you you see the it number looks online. Okay.

website. in most ecommerce, companies and our like So, even had strong on dotcom ecommerce -- have and really growth a we’ve really our own own stronger

from gratifying mortar China three over just is almost that of moving flipped it or It and brick part world period, mostly gave us other taking exciting or month kind the of years XX% standpoint. online. support like to of what from how business marketing became that The in exciting. our people for more and to we’re started China online online, and in now we terms this four XX% into it’s it’s overnight us, were or four XX% Amazon So, a model in us own down online parts being others supporting ago for of for the for a And path. the was that thing about

in Americas already the the as of into same model to whole that Europe. just middle the deploying we do So, we thing, were And so, world organize the then, well.

So, we’re we’re we going to going I’m for well as optimistic And to do set world. be forward up online an pretty well go in it.

I add really Hey, the e-tail least of online, move to mean, one being at that not play just growth, we to their quick. real to good the saw and business for did partners able that Tom, mortar on traditional job brick it’s of actually products. pure only our a a where we had lot

the So, a their do sure that trend, I if they’re at term to something business one moment. that to trying they long determine positives was I’m And or think that’s had looking in of quarter. the the and in that was

these, lot Yes. super players echo mortar brick as think of what really that. have impressed to to effectively doing a I by we well. of and I’m how want gone online. They’re

right. All

jumped my So, Nate saw question then in. second and

was there I the stores had reopening on physical So question and reclosing. then

business? your you how that? impacting So, how And managing that are is

a the everything I and about be those And back orders. distribution scenarios because essential inventory out think about I number to It’s a less distribute for fulfilling probably needs in more online, If to things we’ve to there I broadly. mean, lot you’re moves when move of channel, retail, to got overall nimble good think being ready that question. I Good mean, me, nimble. mean, to we’ve be I on. got really for that’s we just being description. talked of a

balance distribution why in dealing the And so, two own of our sure things. changing buffers, kind not increasing us sheet, And out it’s centers, dynamics of that have market with. necessary they’re to but customers inventory channel, a these that’s reasons that’s for between one the inventory we buffers in our making the those on the balance I’m for support our

Great. Thanks my questions. taking for

Tom. Thanks,

now Tom. your you, line is Thank Andreas, open.

Andreas. Hi,

taking you. one on Thank Thanks my Hello. inventories. questions. Yes. got for I’ve

of first at quarter or basically the seen have XX below inventories. You days being

You biweekly and the supply mentioned meeting, matching basically demand.

But, substantially quarters? I any goes you coming couple that course, years? next fluctuation probably between inventory Now, in in there be to what quarter. mean, potential have from is sustainability of I last wondering, Basically, kind it up below down was of the of apart the inventory the

that one, take me Nate. Let

Sure.

can and think, relative potential last substantially calls, answer in I I think to felt said these is I’ve is. -- always be before the years. to inventory I’ve on we first, a lower there there is,

I able a to at think, we be operate lower should inventory level.

what to I to to look the hand, you’re is short like there half really have the of other supply. out see year flatfooted the opposite. going the inventory you want On if get the going this back at in Because on have demand to we caught such term, don’t uncertainty look enough that think we not and

So, we I to see than relative few did short able to might should ago. today. term, yes, a think level I we years opposite be where you we’re operate Long-term, inventory lower the think in

Hey, Andreas.

same about growth. I and to think to that need our efficiencies way think operating we about inventory fund expenses find I

ways it be can we business strategic and that availability. so we efficiencies products, in reinvest then drive portfolio and products the more those find or go get more simplify as to by having effective, more initiatives the take grow inventory, we some that in So, to efficiency available, may efficient our more we

absolutely think I is Bracken So, right.

to continuing lower decide that up to show buffer we help in supply grow may efficient see because in We’re really not which inventory be But the ways will may days more find more, business. models. our you to up of us

will webcams, question color forward? potential on the or My have is how basically, at penetration what’s we home. do left be the the currently figures I and going Okay. next basically mean,

to mislead want you. built I hate lot to There’s a don’t that’s I people to webcam use don’t Well, a of do -- computer. this I want because into who the

looking you webcam especially, have it, what So, better have not day gives if you’re if good long webcam, a yourself appearance, a them, makes webcam you laptop Having it’s solution better a do if and we like quality feel there yourself. know a lot about that’s in or we’re -- enough, high are all dock really most don’t is Because a they you into have reality that at screens for now. a the of you the people. not

the we’ve might so you’re big of from So, has we’re year There’s from sell home. studying will I home, a lot will webcam going Is But, But, is more might about big, people screen. from go know as time. home there. of this into number don’t just got a than lot not and to a not capitalizing much our of in built business webcams opportunity do really helpful, attractive like there’s to keep working don’t on deliver extra who and billion supplement and us while about going it’s million, when of you be are So our a home number attractive know a studying right? be. at is, be webcams working reasons computer for to you benefits so now keep need to there’s why we’re the the this reality maybe general, it’s lot, that kind a think X exactly. business year, last million something of X number out think of that really where The people the are where billion or X webcam I products, the what I grown people opportunity improving about talking what X are -- we screen students -- so -- talking if to they

Thank Okay. you.

is open. your Thanks, Andreas. Michael, line now

Hey, Michael.

you’re mute. on think I

first Hi, Streamlabs. actually, Two questions everybody. for Thanks question. one taking Thanks. on my

if at you can question were Amazon on France. least a and on maybe the would if an Streamlabs in prepared you color France I of an in Can more or think France an center us reopening, you’re also integrating you indication sales strong mentioned Streamlabs your remarks, bit temporarily. growth indication after give the also the the in and pent-up past? an it’s reopening? In how the very My distribution just underlying that time give trajectory indication demand demand first how that understand your overall because of contribution. revenue there contrary, to sales the following was closed question And you gave was trended problem your be strategy was have the is, there on gaming of on second maybe strategy, the little down

dramatically quickly I’ll Yes. Streamlabs. reopening. answer that improved Francis since that real on is

an I there’s So, I think there’s underlying problem. believe -- not demand don’t

terms of you asked not. we’re In we’re gaming it how actually with integrating Streamlabs, the business,

We’re integrating business. it with our streaming

we want now. kinds to streamers, all thought gaming one of And who people bought So, an to gaming beyond and than a gamers, but stream we mostly play. it’s not but really gamers. with right We there not it’s it got much spending as business. just the just We just opportunity playing was do the we’re really it’s to gamers -- see reasons support that more online themselves entertain report coming gaming, that of and games,

So, we’re in the middle of now. that

things things they’ve business. team the a love headway optimistic lot out and cool We’re the we there. coming And quite there love to they’re of some and we going got make cool and

that Any you insight at past the have on sort of least quarter? growth seen the in

really now. been It’s Yes. strong

-- mix two got business. like you every or dealing, than also a there’s old, a I think business more a within that is we’re year

the But get going you that innovative. is things we are are down, up So, things some did and expected going completely And are down, things very up. going that we team things some are going too.

where seeing were we really exactly growth we’re hoping. strong So,

we’re a following to my standpoint, really a a people kind am is I that it’s want Streamlabs and experience. dream, and that offering, more It’s of great enabled a many from fun actually it’s can to shirt It’s I We are their that name people cool a in pay big business and prime I create to live more symbol. into and ways. a you my wear personal and my is can business merge which shirt, which that on now know helping bringing money more following, great I so standpoint just And stream try would to people it you’re I or can with start bringing also sell, into make and prime more from that. really for a like, through people enough create

a it’s so, And cool business.

All right. Congrats. Thanks a lot.

Thanks, Michael.

Thank we you, Michael. Bracken, more questions. no have

the remarks. to I So, your you for call turn closing over will

Okay.

up by obvious. the it Let stating me wrap

times. some navigating really are We extraordinary

four the trajectory so. strong of of play believe going we based think trends Logitech’s years. work starting time, several the acceleration performance. the We’re and are been extrapolate secular saw with next changes? be into a these the play. how March in have only those At in long and trends that in months We year on reshaped to has same the the term seeing Are underlying in that been We growth in. several very the or fundamentally consistent and surge changes global we this years. two markets same driving the months pandemic learn we time, over the last It’s difficult people past over four At it’s to

that, Logitech investors slower. should for it might In some what years, years see we grow strong on five With While appreciate the sustainably and you’re to we’re many strong or But, we’re versus count We’ll grow be please we’ll the know. as grow we’re the get and That’s XX years. to a an in dedication true work. in to that for you more measure been us first business ahead quarter investor growth the this to high multiple you this I’m over commitment. approach faster, see you digits and single better ahead. consistent we’re going call true half prepared managing half. we’ll or too. And work in past months and That’s and back Whether We’ll taking for in is to close the to likely QX. a I performance. invest expect for against commitment. for sustain our back able Logitech others have been or get why Nate, years, second downside measured upsides, to for potential the after years,

Thanks, everybody. And that call. concludes our

Thanks, Ben.

Thank you, Ben.