Logitech International (LOGI) 20 Oct 202021 Q2 Earnings call transcript

Welcome to Logitech’s video call to discuss our Financial Results for the Second 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 that are based on the views only as of today.

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

We will also discuss non-GAAP financial results.

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

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non-GAAP quadrupled. were nearly profits sales XX% up QX and operating Our

wide surpassed sales time for the history a in billion quarterly and Our first by margin. $X

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thinking year. $X.X over our quarterly many For It's many with enterprise from to countries high to children. of and rooms doubled, to this just conference online the the and one is conference inside school our deployment some of instance, launched classes, increased in ready iPad video to. sales it's Japan's Sales Japan, ministry growth billion distribution over four transforming last tablets being of started meetup And in room in about used like nearly program how augmenting including benefited students. to education of our are to rally keyboards for In improve Brio. another teaching funding record educators collaboration Video continued x preparation a of this office webcams, work to $XXX or employees grid five as bring growth products, like million. was and back countries XXX% get

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going I'm of to QX. the the turn Nate you our financial rest metrics to Now over call to in walk key Nate? through

you for in Thanks, I to results Bracken. our delivering people the repeating times. Bracken’s strong challenging want start to by such thank

of these fiscal our their working than resilience more on in than pace is did this were from XXXX. factories by single billion abruptly grow talent. feats the And began $X what shutdown in to To the with operating quarter all employees We we are more accomplish team's to testament in our year, a profits and revenues year. achieved home we which and a

was significantly of due The the One gross favorable to highlights half, impressive lower the gross sales, most volume, points in was by largely quarter considerably to the mix. of of three expect return XX.X%. target of high end of margin expansion percentage to seven strength product this factors; higher of over margin to second sales margins levels and promotions, In our we XX% the to range XX%. gross

we for conditions gross therefore XX% iPad put pressure we quarter, a given as heavy Non-GAAP on demand down margin. tablet hybrid noted carry products more we will store will demand supply of of As These to last downward months that year. sales margins, mentioned. in investment in year. education of keyboards expenses and normalize, increased retail strong were promotion last increase XX.X% we tablet learning the And into XX% these move the $XXX remain remote gross sales also marketing, the and and Bracken solutions corporate keyboard and which from higher QX million lower some than average mix anticipate operating

the While quarter. we same not marketing as nearly pace versus in of the the level at delivered investments sales up QX, we the in upside ramped was it sales and and R&D

faster we some to we've moving like are for in of be It's or profits important software emphasize marketing. and to to more our fronts. that all strengthening video confidence the to significant in marketing QX will lasting I want hardware on invest note and a brand sales drive while half that of also are priorities first long quarters, many So QX our this portion but year these will strong in markets, our of like build coverage, spend and and discussed variable increased development, be same the we innovation. increase to core out up plan elastic nature, structural with and spend it step in aggressively campaigns, collaboration, the more product

to we So thoughtful moving in I the conditions. potential fluctuations us business are with prudent for again want while being historical market opportunities to by aggressively to emphasize our demand that prepare consistent capture approach and the and managing before

velocity. turns move $XXX to our quarter sales another of up high in cash quick strong balance QX last Now, flow million, We our flow me delivered a conversion million driven reaching $XXX let largely XX cash and achieved We cash sheet. from low year. to inventory cycle of record due by days,

will strong supply, We our heightened also to support the to invest our increase manufacturing capacity strategically mentioned balance but leverage demand. not Bracken sheet continue as to to only in

consistent we back $XX our his for with the and million business, remarks. $XX million call our raising guidance I turn million growth outlook to for such will And year the the and As to Bracken million. $XX to CapEx from now, in $XX are to closing

Thank you, Nate.

So fiscal sales certain will of us It's for morning, too to from non-GAAP in income. commit like increase of income growth going $XXX,XXX year the million, more year, to operating operating million in guidance. we we the not our This I’m $XXX prior XX%, $XXX of still And XX% to many fiscal can our target up to sales an fiscal non-GAAP outlook year. XX% do get of I'm we month early year. XX year. prior an growth increase you is my to personal in to wondering year, announced XX% course XX%. of give what than to next $XXX,XXX next way outlook range the next guidance company versus outlook to to our our This and are fiscal

in March from work expand. continue business most is home are We'll us to people away. Analyst lives, next would create underlying of continue trends guidance and its our What going will our content say the our And reach calling continue us. and more and to provide not as more the I their and to expand know Video will for in office. will for of will more in in all We that driving Day. you Investor us, Gaming also culture. for

ago. We opportunities XX eight an really with much have than were to There's I momentum. questions. today so are more growth and in of such we many exciting we many Till worth ahead so when Thanks yet us. It's than take I new more opportunities Nate years and so that, times started more future so and going we're areas. have And today, years. ready exciting, to to much. enormous existing unlock, next in an few be new exciting And your

Bracken. Thanks first Joern? We’ll take from the Joern question UBS. from

investment Second for that Yes, thanks questions. mix Hi, XX, pricing a first around supporting assume your thank return Bracken, according forward? what when in trying you? hi need, going growth experiment is by sales around new EBIT are half, you hi pleased. really guidance. year-over-year strategy months now you to I your question the roughly are XX% thanks. pricing And fair mean, would I ago? also And it R&D to nice SG&A you despite second be your categories, what And to you only Ben to will as up in taking quite question COVID-XX the healthcare, drop would giving willing second half, you. for last anticipated marketing much investments quarter? develop justify to saying kind your you more please, fiscal Nate, you my three cash invested step second are guiding capital your Is in it also one in the that flows SG&A looking are and be tool year and maybe half is mean, R&D for investments up six non-GAAP to this And your is Many the X% allocation. to on mean, are on the I versus of for is, you on the should and stronger, example? understand sales and

and you let on out one figure Nate, year. in the I'll first answer – mix, and prices jump I’ll and next

Joern, I make sure first thanks. your question. Okay, let's captured

a on revenue second had much how year? factor mentioned? for our has pricing the growth you impact asked Was You there

expect? fair a If fiscal points Correct. is a roughly What And for year do from mix? minus, that XX price there is so, or you fair XX it benefit to percentage assumption? assume XX% around it's maybe

ballpark. that Yes, I think it's in

We I quarter, of the some were end channel, portfolio short the across the think at quarter. in really the restocking in had some on, second we first pretty the bringing products.

growth out. So there washes sort products to were over some that were restock. if you But look being we half able XX%, first the of

So promotions light from And got this yes, benefit in from we're areas areas, restocking benefit channel as then web also like in cameras. quarter the some the some some we both had well. still in the reduced we some

Good. to… I’m going

or can… Bracken, the going if to started I get say to or on I’m you want maybe SG&A R&D,

Sure they're really, related I mean, they're questions.

you're at be particular? side, a this. seeds. And that X R&D better of categories new and to new we've new about but doing is super would development and keep And market, it to keep and exciting. we're going make willing to them keep are interesting doing And categories, going we're and certainly if many don't it. time at we better experiment between aggressively. categories, getting we the answer to The it with they're XX, in we more, -- asking call we're which with given On and one experiment always We

think. I

on you a in you We're and can development, both engineering yes, new working from model count it. business can, categories from an standpoint, So on standpoint.

those to push model kinds to and on areas also half of trying playing stretching going kind amount things, it spend spend drive of in a And we increase calculate move in the to I increase We're you marketing. all we infrastructure for trying demand, as into On the to because in and me, of and or more significant But to our teams, of model. traditionally the back over to it's the other. our probably business the we're the a looking also and bank, vernacular the of going marketing been customer time keep collaboration, we're money infrastructure experience pull obviously, a that a what's consumer SG&A and further. going of not others. more in investing think we're some side, this spending of increasing are only certainly some And video with

spending SG&A think I to yes, be in going So more and we a investment. be will good it's

Nate? You that want to add anything to

bit on think the I more R&D little side. a just Well,

us think, increase seen strategically I you've pretty R&D. in investments

The first this is year-over-year year on half of XX%. the R&D million basis, it already up non-GAAP million, a up was $XX quarter $XX

potential, like So, a and would little great I think a gaming aggressively the have we has where about see our the areas pruned have investments we're those of we way things as streamers, maybe and lot think I same areas, creativity as as Bracken market investing said, portfolio. and reallocate you investors investments back bit we've And, VC or we're resources. the a investing and that other in and

are while that, even see areas than R&D less. increase more that of in getting some XX well, for other So you and half, million are the getting XXX% first areas

that investment So managing we're actively portfolio. pretty

All many thanks. right,

thank Joern, you.

Thanks.

Ananda.

question. Your your line is open, now please state

Ananda Hi,

Hey, guys, Hey, of it. for both appreciate and Nate. so you Bracken

you for and about a of use As the things cycle. Bracken of think we you made and model couple multi-year what longer term, the like term comments looks video, all one sort was

wouldn't more long structural. your What that -- shouldn't take pull of structural the there's see a hot that or funnel, it's the catalysts here. kind know, follow of to up a leveling would have term, like growth for something the clearly up you And kind talked would aside, the don't X% COVID of be just what I actually that being could been One, up and been the these a reasons changes. is five. into which sort long level You a I to well? been But of place? like some I'm of more a reasons, about a air, it of place XX%. recently, asking then not some be sounds as like forecast like, forward that trends take all structurally quick

ways of it And -- because long Well, from the going secular don't really in to said, or as long talk I term. there's cycle the term two does cycle say, us term of any in of in look with not first we've trends away think see when I you oh got all use see this What businesses short COVID-XX. rest word secular those us to businesses, at a take I I context our trends. the the the term longer gosh do

The the about install of it they not really term. long our actually really look term actually is we're to talking at workspaces, right base example, other looking we've way increased for at thing. accelerating optimistic We're super not here. And mean, that for basically But I'm in is exciting about year happening all. guidance now next the of I at the an guidance up support. overall it's been incredibly terms what's devices it's long world entire that leveled the we

is base install the thing. the Yes, other

follow got to talk in investments the see perspective. even needed but up from the collaboration then a to you side, an can sales initiative that be you're not what is, And us with making perspective, is spend just to quick regards structurally, video totally it. okay, just on a done from So you

is out our much like there map fill help how much how too. of, of sort can sort still, we about So

So there, how you that? thinking guys about are

customers. reasons to too that don't -- increased over be is It's because want support keep business absolute number all specific to touch want imagine. larger dramatically, done that a before. number salesforce. people time, around say we really high done business, Yes, not customer going serves is what we've just there the I systematically not you I a to that and what the for proportion this salespeople that and of adding, doing lot separated of we've to to the But the would keep for We're same to we would our we've especially proportional salesforce. We've it

the going supporting increasingly face on make these And buyers, and we big seeing. and ground, to we're that the the to people they that the decision then makers, right in we're face with so deals sure once have them bring

make to to that, but I certainly specific support more too it much investment, that. So continued being that's without in going going we're require margin think the and

add side. then little if I And a the VC on just

it’s Bracken consumer. you emphasize a the around things motion think and the what customer customer – on expectation support how and different and the than what I have supply pricing, experience, little it's and mentioned chain, do you side, would on customer bit

some grow, as in and the to do really we we're pleases continue really that And differentiated so, to want there's and invest I be that's think to able to customers. something areas, going

And that wrap real quick. you guys, just to

market been that to have guys get You a now. while for investing in

as with set meaningfully been this that's you've perspective? from as of doing something think being on-going Or of part an what been we you've doing think initiatives? of you this we that initiative of should So what just sort sort to incremental been parcel and that should

continuation And Yes, no, we're we're this doing. of is really hitting absolutely a our we're, here. already stride what

So continued has salesforce the has using expanded just and already which support. growth, we double further have this to down drive customer on to growth the we're, mechanism same

Yes. Got it. Great. Thanks, guys.

you. Thanks, Thank Amanda.

open. Your is Paul, now line

Paul. Hi,

it Hey guys, question. for going? Thanks how's my taking

congratulations So on the quarter.

Just up APAC, really you a market. growth that first on robust in saw

Europe? relative home region as serve and work break leading to, You you Can follow down the in where some then I the staying performance best indicator regions term. near power, know, has go-to-offices, a kind can this other go at for of in kind Asia hybrid of saw the from up. a in least have us suggesting help And

on and pull, game. to difficult normally came this didn't every world. But and it's China that's China, term earliest of from country about and out of in the of give of don't country to come it's growth our really our mean, find to earliest we details COVID and the investing, Yes to that, talked game, have to long business I we investing It’s the and marketing went into came little just our place, including and We growth. really strong pause moving by optimistic push out growth, phenomenon, the we hard about COVID what me. COVID-XX. upping I'm I feel where keep we keep the long any started had or very strong term of mean, give specifics keep around you business. And I kind well. a earliest. we as as continues in out, growth about we and which really good upping growth this grow excuse mean, which potential reflected then a the guidance, including long the

term? thanks give how a business quarter kind you of Okay, expect and of then sense through evolve went that. much gross those can raise kind target position can near just Do if structurally And follow-up for this you and lift are accelerating? then you a you Thank of that a DTC, the think two direct-to-consumer, to mix kind from in And shift is long retail margin us to that term you How get for soon? on you. channels? quantify any your in you of

We're first makes of business. with Well, last part our the on of clear. through look not, the than with it We that small It’s DTC that. I'll question, of answer because, going question a because much, punt companies still now. XX% much not we're relatively our these farther business

growing better we're it. getting becoming don't distribution. but low compete rest margin And digits, of us. mid-single even investing. our So digits, we're keep for It the going single margin we're single is better but And better we're at very with it for because We margin, the to better rapidly. it's us, wasn't want in digits, to

making including we're customer offering from we buy something is where the are that we special. can anywhere offer they And So then opportunity for a we to directly extra sure want, us.

going small. the we're of to business. But DTC that, doing will rest so I suspect, grow faster And relatively it's the than our keep still

margin really a have to the it company. capital expect in wouldn't the I mix in So big

I point diversified of happened the some all And Paul. year, that increasing business I areas, to that having like has across those. I to which a want agree as first half displays traditional move year. reinvest traditional we're of will route things bit of retail think that's our down stores retail. just that, a market really slower But believe to first diversified marketing retail approach with keep a which really the the half in for called of of in retail, of has nice into little one sale why been we'll traditional the the shut think, there. of I as that always in margins going second retail, and Because is, we've stores, -- half approach And sequentially. in may stick, lot gross some reasons back will of in investments to I down. been DTC, that We're in that of we're I one have the would channel, a out balanced is come as And other shifted the it

gives the skins and everybody, the channels that is about the deal to thing that makes everywhere. you learn chance we it other just better, with through with channel work all add better we're customer, that because a to other great how I'd Then

guys. Thanks

Paul. Thanks,

next. Asiya, you are

Asiya. Hi,

seasonality in year-over-year half? Hopefully, Great. you seeing second a talking XQ, you March we've how what quarter should and about that could seasonality the, me here. indicators know that this, think a from seen that talk guys everybody negative growth March March about we now how we the or/and think very growth hear be the initially negative guys of were year that I little some Can should year-on-year bit can being with in are maybe you're fiscal about very, perspective. the would suggest about

very you about flush whether else just blue, I video also then, which some even know, retail budget but you you actually more you that, fiscal nowhere guys accessories. I margin in the peripherals, the out the accessories. that. and And and mix conferencing, have guys know go and are the tablet, to to offsets all about in wallet benefited side, get XQ heavy bit talk can gross know we consumers If investments, a some enterprises talked tablet shift coming it's here little And and you typically December you I of kind have if quarter. guys on because to heavy these that don't SMBs have categories buy use go towards

again, lastly, know base term long a high that about talk going margins talked bit your CAGR gross And you from about single great. little that digit, has up. would could Bracken, gone installed I And you perspective, then if be so up because the

the you the around they are are Thank you. what replacement cycles is same? etcetera peripherals hovering creation also shortening, seeing content cycles? of more of or mean, the about questions of One kind some because I of for replacement other are

our Let do certainly well long-term install I an me actually didn't certainly there's growth our committed exciting in for But which think growth. increasing base bodes long - I increase now, one answer rates. that term that's first. I have to coming right

and And us fall at Day. our - about the We'll in this too growth Investor but so early to talk entire it's long-term the rate. revisit business Analyst for

through March. half we you going the the were --maybe about if of March, super we terms gave back year, not about we in pessimistic we're pessimistic impression, In the probably I'm beginning.

year you March I is versus fiscal the think year rate if look -- growth different. March March of year, that of the relative rest to the the relative this to of rest at it XXXX, wasn't

some So got there. I they're you think really about don't something worried

be like a Well, never the during what's the lot when or really been world kind they environment in the pretty rest the that we at year happen holiday? this I going by a of in quarter. have holiday. holiday to Is think guide count give and know. big going don't a personally, year. shelter, thing of just We just same a place rest We're We out -- around out do I through of a We they But as think we who years, CECL holiday little people to kind I it of the that this don't of have don't really we to look biggest We look never will more there's period. a on normal a happened. gone guess. certainly the we by a uncertainty SKU normal guide same the reticent month. have in -

so see. And we'll

that pulled that business we're down. Bluetooth because of mix, the intentionally super it out seasonal. business a They've is dampening bringing speaker have also We and really

So that's holidays have certainly of any spike. to count not going

half So in to that's we the back at you reflected want anything look the Nate. add way to year. Do that,

mean, we in we were look guiding going we the as took quarter the were but I don't significantly quarters. that maybe full the if half if we delivered We the across -- of it's like at cautious, We've I last in year, pretty flat upside up were think normal said, spike this the you're up I just quarter, what growth the going half. might QX, look year, of holiday of to sort Bracken we months have. lot Friday sort of know X% and what well taken We revenue obviously, big guided of half Whether well, the three is we've XX% XX% to back going days the type what to to think of really -- in you some we right? a guided promotion to other ago. up Black Yes. see the And guiding for we're see this on about back as We second half. to the that that back see or QX. volumes think balanced

in seasonality confidence to on So guidance, we it an year if hard half, in second term. for up revenue up indication our year and took the we that a pass of But the comes the look this the is past you which normal significantly this when significantly, long confidence, it's the and took confidence investments is certainly, of say to some things. these

And just there's expect -- on because and margins the Okay. some margins to I kind with budget enterprises going gaming hope, SMBs? flush, be tablets the for versus of and VCs I

take you let I'll Nate, that one.

in normally quarter, is mean, said I Yes. of for you QX calendar sort as a flush enterprise, the reasons. strong budget

till end of think I with -- I now, people investing. think I we're to wait don't going think the it's right the year. video though, are

offices for ready to their teams investing I make think productive their get the for they're and now future. today to

So as a mentioned, which see enterprise we'll I'm not is spike common that sure often you type businesses. in

Bracken we strong far margin. And said, tablets goes, And for then, this people had I tablet demand are are lower they right gross as very average now. as investing as than quarter. think I mean, yes, keyboards

things that for I -- to lot So favorable it's certainly But of are a a headwind. we we that think have while is us, while a good that's us. business one mixed

retail And, us. done business to for standpoint. tablet that that still side gross some we've a well. out retail nice it's in well have very both on new got headwind have So -- the a as But come and from a products margin us

peers? gaming you share did gain then relative your you to And Great. and guys VC, think

really In hard short to where areas we certainly it's we were say. product, didn't. mean, I of

in some So fighting we in game. we've the the were get to categories share And of gaming. some in back lost really

we're think I back in game now. the

So there. competitively. growth lot opportunity for know There's the I we're everybody. There's don't VC, much certainly to ready answer that. play so a In to of

a Do still We you think to We market add great Nate? market it position. a want anything to have changed. great don't have that, has position. I

accurate. that's No, I think

we on the share I think side, improved we the the at early in of has gaming lose end that gained did quarter, probably quarter. we've believe as some supply last

Thank Great. you.

you. Thank

your Hey, Alex, call your next. is

Hi, Alex.

Hi, there, everyone.

Just a I may. questions, if couple of quick

your answers, on this if rays, from second Just about, clear I'm XX% in and your not on firstly, early comps, the you confidence mistaken. growth half, guidance year, following implies top talked obviously even

trends? quarters. just of if see you bit So growth of color for sustainability I the could Obviously, or concerns on given the that forth? give you to business next explain pull-forward, just my question so competence more in a on segments. you're less suggest Which around conferencing. would that sustainable seem video is various second and wondered ones then to the couple having more are And demand

the the around, on very we a we connectable I COVID. just you to And wondered about we penetration solutions just could think obviously how long-term three your of are see where rooms where if in to that VC two in years? with numbers there. You've story you now, about go put lower so before could talked where next But were end, can

Okay.

think still then, early penetration a We're first the that difference yet. connected, share first of may and this. do me very I days there's in take in rooms don't the of the huge Nate, one. very, connected Let of

don't think, we're I the number was. I -- exact what know

for. an XX% huge of was available it And don't think I the maybe that as rooms say, made we've a yet industry. difference in Let's

are more a there connected surprised the is this of like I wouldn't I mentioned fact, even impact. So there -- coming as now, the scaling opening, in And groups I sort lot of because room. in be view

hard a to Now call. are now, that into everybody really has gotten also super not comfortable doing with we like going to video imagine back it's video

to So have I and rooms. think more going more you're just

of is that, number this me, I elastic very available. rooms elastic, market think super. grow So continues a to the that's to and very It's

a don't made dent big I we've the rooms of think penetration. So in the

of giving year terms is a of through what grow. the we color categories likely little go bit to on it In the as rest of

to we I that doing been think, expect do well. all have well, of them continue to

for all the I VC reasons continue think be will talked strong to we about.

be I businesses strong. think desktops will -- desktop will Streaming the strong. be to continue

-- that, I want for we're in of to anything you're Nate? So to just more the think same. add Do you

on think say, nothing I I penetration changed VC the there. has room side, would really

in still dent number. said, make accelerated the really it's single as had little bit. think where is I the We've a Bracken total But doesn't the digits. couple in a a it growth quarters here

in back broadly world, office people of lot go around A the so… the

Yes. at growth employees something we've companies productive. quality as home. not or their And you've at bulk for are centric say, are fully I home, It's business them webcams, need purchasing got seen mentioned Bracken's earlier, we -- would in especially to strong in be to as really productive just people remarks then, make in

working You're from home.

You're dropping just not in little bit a and of doing email.

home. working You're from

buying customers, equipment has had of we've a that come we've productive. their QX business so, And that of some in of some seen employees that from growth nice wins these be to for with lot

helpful. super squeeze very quick to maybe one. And Thanks. another That's just

sell-through, regional And strongest come given actually just sooner noticed actually area other and than lockdown improved. perspective of probably of terms Just very sell-through out region. interesting, that's he the strong in they've in Its from had I your China. a

So locked mean in what's some could there? And these I explain wondered potentially going on when does that other sell-through that if you ease? of actually regions could improve down

about. all long-term don't the the super is at the but the China I potential growth future of that. improve we both An expect an know and especially it likely about on its talked thing. come know of of we've as I nominally for don't to that the example categories the same time. think We're another we I out lockdown, say optimistic, -- about

yes, look But at they're of ahead wouldn't China, bellwether I for the as also farther over the a I faster, areas. they're we from would say, of some but it a rest So world. different. bit -- it's conclude a It's little in that

hard It's that that of but period. see. as is we'll an they've the good a good certainly so as come direct continue the to it COVID-XX they predictive, worst use And business to have through

the have Pacific obviously, is these to how the in related in COVID, country and different attacking the really each I important you're demand the China. The there of sort slides, strong or about their in way data referring which clarify. accelerating nuances. countries. government's Asia as the consistently involved, I in there think that But support weren't to people are all pretty some are actually not adapting to just differences these and education In for changes. we And was countries. think in and like much to there general, differences across And too, how everywhere. problems ways differences mentioned be Bracken maybe significant I do to all is whether Alex, across strength It big things overall trying can of think culturally, that trends, are that really small they're economies,

and that's early of has than as come is have. they've is And other one them. so, But from learn differently the said, into of this countries early. Bracken it in obviously, and locations we we operations have of all But each those try to China problem certainly out attacked went

the use can't as we our of for them decisions. basis So all

Thanks. Thank you, Bracken. helpful. Very

you. Thank

now Thanks. Tom, is your line open.

Tom Hi,

Great. Thanks.

quarter. one So follow Ben, amazing on Bracken. had I one Nate. congratulations question up up. an first and

the surges? job. to good doing you're So about that demand you're really surges? are adjustments think I'm see talk making to making demand you're that to positioning a But can curious the ability you future changes manage your you manage improve I

a That's question. great Yes.

we COVID-XX. we went example. we what as -- So I'll you what one we places give did, put in into

turning we're to off a make autopilot. systems and and of we've need super we done. And Just matching into have the be reaching we need to our normal on demand When that fast what reflective then we've learned also sure that cycle supply.

risk. It was we we paid we that a back, of markets of the supply that made could COVID-XX, to of on And others see going take it. in did time. that ahead early day And well made inventory what some we and were that us, learned so, days our nine off big knowing serve when

we're wisdom one. But of off to the think beyond other a reach that turn be and was having to Now, And experience leadership weren't, I has now. the able well where sometimes think that we be to part and if that's not team in I to it, aren't. the learning we and afraid

aggressively one is board. we've nothing chain us second component And draws for operations and our all has and very supply of across like The with capacity increased and doing. increased our our leader systematically both by stepped the working have there's capacity, we've really leaders, learning in stepped -- suppliers

And relationships. that's us, our really standing They're a set them long many of great have helped supply upstream We to -- too. very of chain. relationships are into long long, very

you we're think And haven't I sensitive is appreciative surges. in out -- we do -- that came how the really feeling probably come So we where of that. on case I that of little valuable the a demand this those personally recognized

sourced. we're relationships sometimes of it those then So take special on the future. future positioned other side And to make sole we're the going of care in we're in well is, to sure the

source we're the that try avoid in to to future. going XX:XX___ Sole

have the up meet on we couldn't demand. just supplier certain the components just -- we the to that So go flexibility where

was my was mobile XG new things the iPhone on for question, the one interesting many then gaming opportunity. of And Great. second thought I launch and

you means the can gaming for So mobile Logitech? talk about opportunity what

gaming And too gaming. not No, But is mobile don't than do much of Yes. it. I bigger will much. say, we desktop

get figure an handle for create experience out it's get opportunity how help, to there. out us So business there better on and a a some to out and

over We give a long but easily. really knocked We time. that most followed up things got never haven't But we've time, We've it. out. don't We people us figured tried really right. several for never

So used working to we're things.

but now, up out. this or to we're sooner figured going later So not we’ll give

for Great. taking Thanks question. my

back come to your like thing. surge to in demand real quick I'd Tom,

that of And think processes, on we to this differentiator bit leveraged its cash or management, we've made to think where a we some very cash we types that highlight sheet, out. balance about collection. Just strong a strong inventory. really cash one made think that really think, I these make points our balance and how of strong We're our not sheet, conversion against emphasize to passionate around sure is flexibility collections manage competitors, Bracken strong And is help we bet things inventory I year. our we making about which make changes the payment our terms, all who really cycle. I squeeze made whether half our little an sheet have we've more balance where of bets the important of in the may the have first this us And

been has And back for those strength of you're think constraints. And us. that So think financial so types times, by continue be not for important us. I it think that to held it's I will I strength in a these a

to going need we have and need make that. really do that risk. to potential manage to that And we business we when we're we're to going ability feel growth, go be managing we to aggressive support sure we're So, tightly. But that the

I have I I'd had carrying for would that agree system room We the carrying And a learnt. there. should been categories. and more -- you're the call probably been you And right. point, should say, we one demand last couple we of to as inventory add service the our and so we comment for [ph]. Nate, have [ph]

of make we've We to all learn try So them from that's and We mistakes everyday. right. learned. mistaken

So learned. we've

you. Thank Excellent.

you. Thank

now are you open. Michael,

Michael? Hey,

terms question your Two is that you there holiday your questions devices you're second I more really, Thank more side, gain your that? giving? because Nate. up uncertainties economic Bracken, uncertainty? visibility, is the that visibility you. that mentioned guidance, you actually, your how regarding mean, just below your starting keyboards. with you're above pointing How did the actual Why be or from question out come it the to what confident you that and gross all good still confidence. range increased And the second Hi, would usual is the is my not with are in of half? guidance, season or My and you with development,

You good mentioned, range. you across the mentioned demand Bosch, product in very

shortages you driven one availability range the the by the or of high level all is, products that So products. did of there end demand question across My have same well? end entry fact and at the were other? the sort Or as was

that then I'll spread portfolio. say supply across answer was the Yes. -- first. and mice. case I our of would [Indiscernible]. And would in our product one keyboards [Indiscernible] I say, evenly importantly pretty Yes, to

the I think So pretty reflective that's market. in

have We broad. very

turned I up to we say, didn't our it. really trying think, it. will so because I keep really with mark we marketing, the Now, off demand strong, were We was

more So, premium market, tend try to we we mix. market what put to that

I that's think an as for go upgrade So forward. opportunity us we

We touched haven't really yet.

out So all All whatever it and we round another upgrades. got of hate those they people who live could. to

ways, data usually of because on of let people, Nate we lot the based that But level the of here, some I of we a the in current to have? really the those I happen second visibility in what's then we in nothing less have we in can of lot visibility other a part on say, and to there's history had to because lot tradition, I'll normal of see, couple And we have for normal visibility, upgrade ways, over the trends much there. going Now would that. you. quarters, us would next of say, how come long

out, really you this pointed unusual, On hand, the code. other unusual dynamic as

a normally certain increase the be example, holiday holiday we We're to is QX. gosh, And over led the over really think to like going about a us wouldn't holiday. going for to see that harder, say, period. So

the the to We add take you've didn't so, -- got the math, percentage, can I it, You number. and think take that.

try So little to than couple we to Do the It's that our in visibility that, good a on in a probably have add you tried fact of visible did we to is reflected lower. better Normally, Nate. based places. anything to had we judgment. would adjust intervene to

that, you of or for something a see that we visibility place building if more a to, with might buyer enterprise the relationship I little they're mean, it. they I small pretty that's only a large of a but customer where most bit education like we more little covered where is direct sometimes roadmap think with have a a still have us.

is say, hand, Well, it's improving. is better I would that it getting getting better better. visibility in and

it's build of about processes area earlier, forget the types we we who around sort to of investments and an have And I I the talked Yes. think when make asked to up tools those capabilities. question structural

invest we’ll in of more much been in those one this but we've that's investing second half. year, So that things

and getting I heard sellout visibility. call for is of some video a the better commercial organizations

on will get I'm sure better she we amazingly So and is this. better focused

and you Okay. Thank congratulations.

Michael. Thanks,

you. Thank

Serge. Hi,

is line open. Your now

Hi, Serge.

mute. on You're

on still are But no, mute. you Serge, a it’s Oh, Hi, on headset. nice mute.

Nate, should and to to we go somebody Serge? back else come

Maybe to to try quickly go else? type we real somewhere while want it we into chat the

you chat? in. it You're to try Why going don't the into take and it type

your open. Andreas, is maybe line if

Andreas. Hi,

everybody. questions. my taking Thanks Hello, for Hello.

Hi, Andreas.

XX%? half? see One about close some is questions, this actually Two in your the the in do currently Or what implied may. be review to selling that sell-through? I is is going there mean, second roughly of sell-through to divergence Hi. you I if guidance

Okay. there question? a second And is

Yes.

also which is activity? to at in different been quarter? far I probably how Is is demand constraint go largest the promotion the couple QX, in with promotion to third mean, than how, also last on are Given the least some supply so one second same? your activity. degree it of quarter strong, two the do promotions The products, has need or the usual in years the you

selling half. first say a the expect kind view sell-through of question have, in I would of to you balanced I think second on and we the pretty have

been as we're then a holiday it on uncertain and of think, As catch about And may mentioned, sell-in. in there. would And there's sharp we're the to in demand, I that just year, products an half we're Bracken more I think buying I in the promo as between to increasing I think while where the the catching be we'll have more we've half years. promotion the those you promotion a more few here But mentioned, balanced capacity. half of that think activity, second around increase, the participate still so we're we the to not up you expect those. sell-through up, and second have try promotion in magnitude what mean, to people and general, as throughout That's typical will be steadily expected to in levels assumed. the balanced, days to levels. because and prior the do typical similar second demand move world, we getting supply And

Okay. Thank you.

Andreas. you, Thank

catch more Okay. you time want later? to Serge, up try do one or

use will he said, one. on the He one

Now, we can't it. hear

problem, technical but… the for Sorry

you into It might it best don't want to thing be Why the do. to chat? certainly We're not. type the

Okay.

No.

that think it. I of end is the

We're into chat. going one more Serge. get he can give minute if

He wants to wait.

No Okay. problem.

Well, super a quarter. strong I saying, close will was it obviously by off

term places, is building potential. thing right We have tremendous been exciting exciting place far, so I newcomer And now and momentum. and growth the our most Logitech It's the so really exciting We're more. to an keep And to long about be. a going right like in [ph]. we're it's feel

to so have next We'll quarter. way guys We Alright. see a you much. long Thanks go.