Logitech International (LOGI) 19 Jan 212021 Q3 Earnings call transcript

Okay, thanks everyone. Welcome to Logitech video call to discuss our financial results for the third 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 Private Securities Litigation Reform Act of 1995.

We are making these statements based on our views only as of today.

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

discuss also will non-GAAP results. We financial

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

thanks another approach. a us, office week model, well at with we have and as companies, hybrid a we to XX joining take that a conviction the the while quarter With most opened hybrid I from Ben. at biggest is norm. And meeting vast a drives for few office said, positioned for to clearly home short, majority will up, video in companies from moving few at the or work biggest to Last And of rooms. many I this a for quality CEOs company and model. of And to as home you, with us. hybrid would at be meeting our QX adopt improve We a year would work the customers In us and history. would workspaces hybrid will them opt Logitech's the quarter I home predicted adopt the growth of we behind Thank week likely that full serve a in quarter, the was office. history. few and world work. other this had workspaces and the full in office calling working work didn't high home. a a in explosive days poll, and Logitech guess move days in are video need work/at can week, almost companies upgrade greater new home the most a

gaming digital content Over League The that growth to Instagramers time. and will grew million Super Logitech, XXX simply year. billion collection toward means same the For Bowl part of last some the participant last Over trend a number final as global Legends of billion largest the of watched people. quarter, a world watched in final sports the continues. growth. propelling talked live, and people people this becoming during spectator to the surely the the and pandemic, well. after are democratization and watch. some pandemic. that for podcasts poised for the million we've Tokers, pandemic These examples grow now of And X.X are untold Tik creating is the to, and There long-term into listen the streamers of about as trend Streaming

one content, term. other long the Given well positioned and words, one of In pervasiveness biggest really streaming creating of we're type this categories. could the become product of our increasing day for

XX% with third sales operating that up Let's context, ended. and another than look to But just quarter's this delivered back strong at in our last tripling. fiscal years top delivered than prior profit all growth the in was greater profits three quarter, more is quarter non-GAAP we of that, put growth We from more volume sales total year-over-year of the QX combined. On year. this than

creativity and PC and installed environment increased culture can growth categories simply from upgrade growing more who world. a transition base. year-to-date The a all And more delivered tripled. peripheral a or work-from-anywhere PC devices creates performance, improved large have devices QX, mixed opportunities in aesthetics, the keyboards their Our upgrade every and above. mid-XX% in pointing us the combos. have webcam productivity to learning in attach quadrupled and ergonomics a than and for against benefit customers sales workspace than sales across We opportunities and

million may million seem XXX are a units incremental rates and demand sold billion of While base the higher for to video these to of an To prevalence expand are, we're webcams. drop working installed we communications, just billion this monitors, support capacity PCs. they X.X the compared monitors Logitech support the XXX to tremendous, PCs. almost X.X year growth in the nearly growing and bucket our

we've real all to to was a the conferencing the video camera We're digital growth quarter our innovate and we tremendous around achieved in this other $XXX a provide delivered in than highlight educators, parents better learning focus. Tablet and environment. even sharper into leader the adapting than the $XXX students webcams today. million they As the have keyboards. sales come world has for single education schools, opportunities quarter investments we're increasing to exploded, more customers first our and time accessory have the over sales to Governments, technology experiences our fourfold million, are increased tablet in product quarter. market The

$X.X Video for last an Japan to Sales in improve And also one sales the While another fiscal our of high is our we to from sales last record tablet remainder education of the was schools collaboration of more $XXX demand biggest billion over year-over-year. than various to program year. quarter rooms conference keyboard doubling million. that ministry of expected education to online Japan's We countries, mentioned impressive products tripled allotted through contributors quarter, teaching. our QX. had significant this delivered has

with to work starting back are quickly, these home more equipping companies only collaborate because most and workspaces. office on-site and for to started As equally, to their people are remotely their say if webcams remarks. reconfigure flexibly. yet. and I the I workers the are office Not not headsets, in lead companies and enterprise for employees their offices, layouts and quarter, not offices grade enable both said to they're video-enabling last off but cultures

last Rally for we and rooms. medium announced our of rooms Just Bar conferencing products conference for room week, a rooms, complete Rally for The refresh Mini portfolio. Rally with larger sized our RoomMate current system product Bar video are smaller

couldn't when audio a or all these rooms, new across and achieve a so you market that Team on addition three features the we Zoom key video, our Gaming the a the and also quarter, is with networks of managers fast capabilities products quarter. the dozens customer product as come and smart have consumers' one more that another gaming with I a we'll last the initiatives beta trials, sales raises excited integration portfolio. Microsoft market product versus this stickiness to PC quarter and in in enhance bar across VC Room grew work. large of of had appliance to you Streamlabs several priorities of In XX% – And and share for and opportunities. deployments of – to be feedback products experiment these pay portfolio without to the such, teaching in they deep remained in believe growth. with helped year. various Growth same growing Blue to of investment regions into that microphones simplifies years enterprise all back run manage gaming. greatly monitor. team engagement increase is rather mode, we with this We're triple manage customer heard another We focus user example, us digital as these separate soft We are George, our come. headsets Mobile which sales This will room. as us gaming quarter exceptional growth the high And profitability categories, actively strong introductions, out home on this from Logitech we believe for for Based to products greatly entire conversion. new industry. other both record that and continue of hope and to retail who acquisition. categories strong the quarter subscribers great ready of expected. social up for digits gaming to had the on scale maximize rollout every speakers the and back these allows two can than people categories growth to Streamlabs IT of we continued our

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

team. of reach on results our the another our capabilities the execution quarter of Thanks, global marketing our portfolio, Bracken. financial delivered diverse excellent sales We of operations the and product strength and of

Our strong categories, exchange gross expanded of margin revenue strong Gross from The promotion, tailwinds reduced invested was delivered XXX and dimensions. our We of significantly quarter. gross rates. gained million nearly and priorities sales to across across the of $XXX XX.X% our margin and in volume, more improvement mix points margins, the results some free sales result brand, significantly strategic were in increased than favorable basis flow. currency very levels product cash all grew share and

ahead. I in above margins While expect our highs will these has been come recent gross our do range, from target quarters margin down the

to invest continue to to in plan promotion marketing levels and reopen, As opportunities supply of normalizes stores joint growth. and drive pursue we to actively retail continued appropriate

of while are believe right We and balance delivering sustainable focused growth, that profitability have at keeping that always long-term said investment. and strike on we the levels we margins

we XX% the low of yet going a philosophy reached in And $XXX operating this OpEx million, and mind forward. Non-GAAP will so that nearly manage increased expenses with XX.X% it of continue sales. is record to to business

last investments will and we again strongly in quarter, R&D, sales pace the and As discussed in ramped of marketing do QX. and up so we

new pace products we higher business did gaming of we've IT mice in The quickly care BXB FY refreshed and and our support a and of we and Go-to-market including XX%, growing prior by XXXX. few similar months. increased continue scaling as term. And spending utilized mature expansion projects XX% collaboration, our from and XX% growth several an marketing camera keyboards demand year-over-year Bracken our marketing and solutions deployed FY to invested global March as pleased awareness peripherals category-specific I'm growing in and over our the invested fiscal and the to we our announced our customer influencer the over in we a exciting the categories And G&A campaigns. teams teed investments potential as vastly education, And increased continued quarter, to brand sales and quarter more our longer All sales faster significant job conference in the strength of a expenses marketing infrastructure with a for campaign over short-term opportunities. priorities, coverage capacity launched help continue serve country also in channel. we from also platforms to that declining activities investments the new end improve recent for resources reallocate products various overall our activations. should We Our and current to the video against engineering up sales wind customer spending rose strong innovation. have these the new including will down growth year. investments bolstered a incredible included of XXXX local mentioned, to volume. as marketing roadmap and the so marketing areas R&D we we the and investment the leverage base.

that in variablizing costs help growth to investments to are half portion come you And gross significant we have managing business to essential our awareness expect the of and and financial we will believe us enhance the we're from spending selling possible, while are to A future risk second where capacity. investments continue with brand to investment plan profit. our we our drive maintain accelerating our While our business, is allowing variable, also we discipline marketing our long-term by into Logitech. cost fixed align capabilities,

our conversion and and me which $XXX flow, cash cash XX fast quarter let cash year-to-date collections cash inventory million strong balance to QX operating operating a days. million. cash to led We year. These sheet. of our to last in of flow move up from delivered Now, healthy bring flow another over cycle Record results $XXX turns million, $XXX reached

due QX holiday. cash in during is inventory lowest to cycle in Our conversion faster turns quarter typically this the the

should not be quarter. metric So, increase see concerned in to you next an this

to as dividends, with and funding repurchases cash via strategic manufacturing we a executed operations both prior capacity. quarters, view and balance our our Our in once $X.X growth investments And in remarks. billion QX. strategy expanded share our well, will balance restrictions. guidance Rounding total strong again, closing our million to supply nearly as adhering $XX team in safety exiting sheet And while the addition own support tool is Bracken this million. to acquisitions, repurchase to call uses his travel of COVID $XX I our we all bringing quarter, measures shares, out and and strict the repurchased year-to-date to return of cash for And now, share

be Thank non-GAAP XX% you, morning, This means XX%. and up billion. quarter XXX that, our outlook, income prior year This our for to increase operating our our QX outlook an annual that increase XX% Nate. our to non-GAAP and Nice of growth implies in approximately of sales to sales our year, operating XX% non-GAAP announced year revised $XXX to the year from grow job. we million of about growth final to sales for will for $X.XX XX% the be XX% will outlook of which $XXX is a the income. operating range in income to fiscal million This XXXX and XX% fiscal

to and all to aggressively emerge commitment That our several the them with capture new I your to growth the are for next will expand And growth. You've delivering long-term invest you expanded that will to can't potential. Logitech change. remains so Ben, queue The see Nate pandemic so questions. firm. drive we exciting, and sustainable appreciate and can we and I as up? innovate, ready come that, We wait from market years be commitment opportunities take to many

now your line open. is UBS, from Joern

Three questions, please.

The the also employees gross the risk when where year the doing to first are back office? demand taking the will out are fiscal be, preparing one collaboration question that are of pulled profit and a new the market is, margin. see view on do forward XXXX, gaming there in Second you homework, corporates coming end please,

campaign point technical on FX higher point also, a the was related? from bit three, it higher you a the scale the $XX more on given Just of global elaborate at of marketing quarter-on-quarter? spend this rolling Was little lot. higher brand you what And quarter-on-quarter, why is benefits Thanks and this moment? million not number And exactly incremental view, your are benefits? headcount can a out

gaming during Are forward I for been pull in, back and has and demand Nate, so term people many, many can years, playing and of I and for then, think and – well, The VC? jump I'll so gaming long it's certainly gaming themselves. go experiencing lot many, a you the the case and forth. we games games demand are really in strong the drives of that A is of pandemic. the what lot growth

more. League effect few is the And that, a Fortnite would Legends big the probably of years remember And say will ago. phenomenon. there be You before I

optimistic or distance, optimistic, number four if video better is Many it's to there yourself the VC, times or looking enablement, get are or webcams right sell will figure camera, of times picture personal next say It's off or at gaming and next about XXX – So, about billion of a in I demand the chugging long good the the It's not at few to really has up the day long I'm really experience. be of of just out unlock looking and five year. such good. as right the weeks. But very you for I typical monitors of in not long instead day. just a if And anything you along if example, look very there, a to us to of instead for ought optimistic guide the to That quality now minute looking today PCs X.X times growing keep person monitors, now not to I'm out drop we more going term. of We're a and that five because relative five a you in term the look optimistic your four gaming for a just in number you at four million you're would VC. come am the out PCs, that webcams to how bucket. term. not going number webcam. the is the just

VC, we opportunities. enablement started. the think the video office – I in have office, just is even barely the And then, of it's

see I If you very to long work term. hybrid you're go think to environments, back not about can't happen growth going what's going video of these when into strong people a believe conferencing

take the optimistic second, risk it's – try spending, you and Incremental about you his marketing in be let a I to you us. the I'm let Mitch although managed. point I'll give which well, just it really I'll mentioned So, in do And the is very I'll Nate margin won't. gross We it. script. a answer, combination. it. shortcut to aggressive

So, a in spending lot putting is the variable. of we're

So, ready on – we're long-term we'd also it we'll it investments. making we down pull as effective it's it. not looks to it's double If working, fixed But if as like, we'll like are back. always

have many world. right now so around opportunities We the

So, we're making going to keep those.

want any of to Nate? anything those, add You to

be be gross the strong on The question, edu in margin we business other we Joern, a very parts I which mentioned of primary products, the quarter, us. sequentially, very still Joern. think, that, had Just lower a mix gross would qX, in of difference good little than portfolio, for tends margin bit to

drive to on say frankly, strong. one why as add increase. although said, gross the couldn't that margins were cost quite then in kind much that's they of you could Bracken side, headcount that primary quarter we not So, higher, And I marketing reason the suppose were

fixed the We'll said, for long-term judge as us. if make so strength to think saying, there been could investments slowdown in to it. really you're of support if were I competitive many cost demand we in Bracken we'll through that want even of drivers for But trends, where variable are confidence long pulled as a multi=-year that those. that to on the investment that And we And marketing invest we longer make when us. these long-term continue back, term. you'd make most sure firmly effectiveness it simply was wouldn't believe sense, that, to of become trend, of the So, term the any a It over quarter believed growth we've side. have potential

now J.P. Morgan, your is line Paul open. from

quarter. Great

you the are some FX about across segments? mix And a follow-up? raise there? in any I did or the up, segments? talk and with Or your scale can dynamics pricing First is raising Given demand, mostly elevated in product you benefit margin prices you gross have

The answer is no.

prices. are lot a not have we doing We raised promotion. And less

sure promotion go least mix You average on had some category really of hope promotion on keep can back see promotion numbers pulled pricing. I'm benefit although pricing out, – stayed gross/net, is coming really the we've some benefit effect now back. that our within at we've I'm levels. the as back. it's I way and And will sure an across you But our mixed category. mix, our most it's said, of on we

from some in like as some back maybe But you're expect sustainability in to down of the where reasonable promotion with probably benefits earlier, a do of I back think prior of end nice going demand more range. margin Paul, growth high normalize. that to I as mentioned will probably things these that gross It's mix and think, we're levels to are category margins is, need supply my come standpoint. gross sustainable, more to our move the in there VC. There's of levels, towards I the comments going

would in in in And term our the see so ahead. and that, near included again, and I to quarters something outlook expect is

are to in On Thanks. accelerating switch Is of VC, product? conference now? your Zoom-enabled the more enterprises kind more larger on feedback share rooms. rooms been and looking the the market to initial RoomMate of kind What's

are Zoom, to companies Google. to to going and More Microsoft and more

based, all are kind So, cloud growing plug all the are there's and well. solutions play of really that

we're all, judge small to You large a And say, in products about share exactly. percentage total. little are of got rooms. hard now rooms. market phenomenal But really the conference I I It's that a think our growing would including in – We'll mentioned definitely has all asked in for rooms we've introductions. rooms. overall, first reset been large newest the large new And of the But strong. early see. see, as of larger we're reset, growth our I super optimistic portfolio, extremely call. that our our about you Not product

really raised the the we've I industry. on think bar

about beta getting asked You from we're very customers, it's very, been strong. and strong. Very feedback

in performance our been those rooms think very has larger good. I

the continued cameras to see, can conference grow you quite As well.

selling there's a capacity, some But into lot We've lot coverage Paul. we've and had I those a I more for in nice us more to room think us think large spaces. to capacity, adding room for large accounts, continue grow there, there's of been really wins.

Alex line from Goldman your now open. is Sachs,

quick Congrats on the robust very results. questions. Two

the for normally. lockdown a just very what plays I what of implying given in be meaningfully the countries many wondered guidance below see of secondly, And the seem in is in Firstly, quarter, obviously, current which terms sort that we'd to on we sub that in into then it's forecast? seasonality, continue seasonal be And that, next just interesting. to fiscal quarter, you just scenario

in of and seen beyond you're current few for governmental go on and if a home Japan. also particularly seeing We've about And talked I that. reference? the you terms could wondered what education obviously spend, about other which could if global quarter, that talk news articles You peripherals basis in you about required talking regions a

we it the in quarter education say it's one more see a than lot long-term a that We trend. excited education about around and of space. lot education up. I for We're going on as trend. to think And that's the education. now technology let don't are governments a I'd think investing front, are And the a world there

saw sequentially not typical above we like was typical has guidance pretty sequentially, about been I do in that, XX%, in which you where seasonality the seasonality. on QX terms Alex, our well of was And This honestly, look above seasonality. business typical seasonality. grew at and of in QX sort fact, the typical. to year our

correct. you're So,

in QX Our we than recent imply outlook it's appropriate. But QX QX. seen what times to does for have I a think slowdown sharper

again, of on promotional we a put some that had we that expect given reactivate, spend, bit this little sequentially. Just the and pressure revenue this also of which strength increased to quarter will

So, nonetheless, into still year, implies , growth quarter, it pretty XX% see strong in XX% to a last started pickup we of QX year-over-year demand. some to as where,

I guidance So, the looks pretty reasonable. think

Stanley, Morgan open. your from line is now Erik

Two my on questions end.

First, congrats on the quarter.

So, for the second consecutive quarter, meaningfully we kind outpace of saw sell-through. sell-in

just there, that in understand a that reverse I So, to quarters. case wanted the kind you the whether to been why has of dynamic and has have follow? think coming And

really Yeah, two point. good this a it's primarily. drivers of There's

on sell-through that The meaning do not reflect basis, numbers those gross promotions. is promotions. first before It's is reported a

about, got from as we've talked And benefit reduced promotions. we some so, the

see that you net sales. so, in And

You sales don't the or see sell-through in gross that in numbers. the

So, that's difference. have the some you'd first reason why

would other be channel inventory. The

reasonable short in still categories, some still channel is replenish fact, and levels, to very at last sell-in in quarter. inventory like So,

there, be again, drivers two in where difference feel how good the because channel quarter. and going promotion and be is look the appropriate levels But, into fill. really the that's and other we're would inventories at is would the before one then channel very – So, about one after, we the March calculation

it's sheet, turn to Maybe kind question. two-part a balance if of the just I

you on $X than one cash the have balance. cash. billion more So, Obviously, of

then, just they of levels second that in inventory would end the is aggressive deploying So, that. if be last at to were again, your And do nearly part and just are you cash double wondering how the what looking year. more you're

both holding items? coming that line Just the any worked So, be over is a for you're on more to going perhaps to that purposes? quarters? sign Is those on down color inventory of direct-to-consumer

the dividend. that can't paying level. first we increase but one. kind with pick in We're for dividend. a the of a surely normal but me normally No, our speak cash board, I do the approach September, We'll same we had the Let before. have we obviously

to sure keep I thing But can't that. buybacks. we'll I'm I keep that. And doing the second expect board, the the for stock rest but again, The – want board, doing we'll but speak of is

terms M&A, In that's key. of the

look We opportunities, out and hard great are strategic they continue to for there.

take large. We're Now, be that to of will kind enough cash? align large something looking really large. have to stars at small, medium they to The find and always

to we're So, to it cash. of of use strategically. a to stay But We're love cash. generating going a It after lot it. we'd is lot put

certainly We might organic too. keep want We're that you have that. so And to add plowing going into opportunity to Nate? much to too,

the important, think we've of which of capital, we're on thing invest this obviously, supporting in other increased, cash I couple second to inventory. your and gets much inventory mentioned has been just really that higher but question that's use the working is to times, Yes, the volume. balance

want we of you our look that's down, out continued So, I'd to again, if come inventory history about. actually inventory to at days had point best turns in this And quarter.

they such volume time. done only improvements scale to think capture the a our same also team job. they've have business we've that has had, at incremental helped continued Not to the nice operations the drive operational I but

things driving us supply fact, term. in manufacturing longer chasing some cost improvements, to whether diversification So, our supply. our into stay this hasn't benefit And We're reductions, just the been an environment in that that's efficiencies we're that now. chain, whether performance the countries, is on structural of that's path other see over that improved with right actually where we trying what's inventory

fast more So, on inventory increases given things continue getting on all be concerns some moving making capital sales the efforts But that volumes. Again, the velocity. from for we can to going It's higher in efficient to It's me improve structurally, I forward. it's working so fresh. appropriate we're think no on benefit products. we're all But also on the inventory.

good about So, at. where feel very we're

Asiya Our from Citigroup. Merchant next from question comes

do looking year-to-date couple all great. A we that for quick in Streamlabs. even spending follow-up promo well going as And about quarter? Thank or that's revenues Or And see well a given that's any driver bit how at lower that third services the maybe out just you you point. higher quarter, in subscription on you Any then, a user still use questions. cetera, March spending, your as impact XXXX can margins obviously, resumption do On have really this engagement/higher guys COVID just way talked on spending Bracken mentioned parse at lockdowns, of that be Are He showing I or you. across portfolio? the peripherals? would can your meaningful et you think a the be little event? in share of that driving in there when is you for some up to on fiscal going you. of If promo likely anecdotes of promo

I'll one, bit promo, I'll important this because I obviously, competitive reiterate. little promotion On this something the reasons. levels for that's sustainable. But of careful be can current think don't a on are be just

it's us to healthy categories. for drive continue to have in growth think and some invest promotion to our I

So, actually, It's I dynamically. can would quarter, look. seeing the something in promotion that manage how see again turn can that we March but expect things on we'll to start quickly we and do

– the a themselves, the year-over-year bit gross largest were lower an improvement in the largest was of impact it unusual terms year. In driver promotions the the of margins of It's on margins.

an promotions, what good about but from gross about we of in X respect, point Normally, margins wouldn't it's away. probably quarter. to impact, It favorably think in maybe lower so it's similar So, that I'll talk unusual kind share. year-over-year saw step impact too to year size we I much of X our was to last a been

important benefited mind we look as keep that Again, it. from forward. it's in we've So, to

something think going to the that managing continue it future. we're evaluate I But we're to in to that's wisely. have

and Streamlabs, and that of service well. general mining the that done growing really really On that subscription not subscription or a good it's on more of little service the opportunity, that We're has an I'd service offering and doing size it's we're a of your question job in business, so extremely say part se learning. of the now, about is the services today, is particular, team subscription The exact color service well. that. per selling even in Streamlabs, bit important

in to on gaming. is, in We've number after relationship about, year we this We've every expect services what's think you're up be we're business time, day, But individually we're also in to because have that, a going happen even that. pick we're the to year big things to any got in learning stickier our a in I working, really hear the services collectively, a works with conferencing things little I want works one business. or some wouldn't bit really working, to mode. across to hard And we're in I'll our because really going got quietly or video become C&P. next the learning predict with the of going So, going customers our it's working, then business. over and offering

a of that's another coming a got to pat into guys hardware, stay do. So, find and got bunch went I and kind job of – of the a super reminded thinking, play. Logitech time, I capitalists of should joined them hardware-enabled done. tuned. I the you to with to a than first when to were Logitech. on I'm service advice get out I'm excited lot investing from we're for ought said, probably of – venture so And It's should do And it. of At about a kind some said many kind long-term head because I turnaround down easier walked deeply on you meet you. of and try of what we've businesses. gosh, them

that times I do eight think investors XX were of on then we're and a later, doing Services question you worth of lot so part are buy we many than I'll and hardware. and what services know just critical going a that. of hardware, right lot gotten going out those a just focus it be well. timing. to – we're it's what years experiences But we And are of more have really a they're

And to so, that. going We're we've investing. been to going keep investing. We're build

as about that excited but services, you config develop. I'm the have involves it's So, to future time

from is question Credit next Suisse. Our Serge from

now. to results. At would to ask least guys, great several two Congrats, your I questions. like have I

that from a the Japan has this release. least mentioned one-off, press order in been already You at

that. you come though, Before could more mentioned, to you of expect

wondering, and not contract? in only in not keyboards of a orders from VC are do And corporate can means. color from see a coming or mice, and here? you we size I'm such that this other feeling what me detail, one-time to you government some So, they give this get also Well, but give

are do the Yeah, really But should do corporates. kind buying I Japan. that But and see still I We've think had think keyboards I of temporary from disclosed we coming those what exciting. some that it's very think is, probably things. say in order think disclose nor of early orders we've kind are mice size we that. don't would don't I in of for just I sizable bulk days

was the the a future. – of thing of companies of to a a direct people never And this the we the as because a have largest is for some VC minute. going had the past homes. the and just have And could in in and to made desktop scale VC, world education. their creating we're that with things enables like also because to direct synergies outfitting that conversation business, world. it's start think selling But never the Because education or down for are office. with a lot from companies hadn't relationship for of the keyboards about and us into And now scale I the have enterprise, moving now We before. same the true will we the one going in didn't you're workspace example, or largest webcams, come talk force see sales of mice way decision the our with to we

shares to forward. changing the market we completely in enterprise are general. BXB going and that underdeveloped were committed our business So, in And

growth this. will think in ahead. education, one world the are most have opportunities you around involved who tell I In the of that's we education people So,

the work probably While is change, time home work students remote at and going technology-enabled all more not to is future. the

in And so, technology. that Germany around part what's starting happen, And education in and that. I Japan going will exemplify happen and in now the are be invest like education keep investing to the think countries places other going in what's world of to investments in to we're going

So, that. position for putting in we're ourselves

question the is, you're short? webcams? webcams you're do when for situation? some you this categories And consumer Is And A the webcams? of you only or still have product you believe constraints, any where that do mainly you have supply follow-up that mentioned other enterprise coming in out

really both. It's in

a in few other We places. also shortages have some microphones,

terms In of I'm think we now. it, we out come of almost when embarrassed that to predict

a I each strong. quarter, we to demand in case think has I've going very thought we're I've to very, of be been and been in be continues than every quarter wrong. The and out two, stronger predicted it

capacity We in in are as we capacity assembly, components full year, sometime our next making, expanding guess our get both we'll need. as to well on webcams. the really would I see

calendar? or fiscal year, Next

Fiscal.

Fiscal.

Sorry, again, or the the components question, Where main is it is production? in bottleneck? Is in last

a we're we think, a I'd bit. on good moved have it's now, we say now, place assembly, in pretty Right little everything. now so really

now. components it's So,

question Our next from is from Davidson. Tom D.A.

quarter. an on Congrats outstanding

two So, me. questions for

The and is, in think about and general the new Sony for grow influence the gaming on ability first particular? industry's how of Logitech of on platforms to one the the top should in we Xbox pandemic gaming

me. personal part of the talk that I apologize. of started first I assistants one to to missed my because comment

enabling of the year led generate and about How should Logitech in that pandemic top industry the and in growth the to Sony particular and Xbox, platforms, this gaming new we gaming. gaming on general and sales think

for new those gaming in done if to them. And well are the drivers And the banner about that excited you two continue never excited there's will we're platforms see year. two It about our up. new long-term And I we're this gaming I general. exciting. growth those consoles from and cloud-based been – the I are year expected has over been other it's a look at an starting And think we to gaming amazing plus really companies really think gaming. has gaming, And more don't consoles. into well. all really, And PC think do ASTRO between let of here, business platforms spill new – period I to an business, how interaction in

Excellent. And you gaming? can is, opportunity then, question especially for current on give my Logitech us the second long-term in virtual in thoughts reality, your

team or a in – the working reality located dedicated virtual in now world. for five been We've had four four We've it years, of think. a in on I places about different couple years

It's reality. we Edition. not there about It's the working future. to virtual goal an it's us, But create sophisticated companies creativity I team got design to of now the – play be more on things. in opportunity but in talk and three on as reality Our for We've in got the played more that stylus homes another you We've try but is got to reality to in a we a couple Ink There's one I going how the can't in not and reality be learn. us future there. virtual product. also right will product accessible early where be have in gaming. may it's about grow, really virtual And And augmented using there. for obviously things can that role be really software. got for to becomes We've talk couple love – augmented listening. to day that think It's this, a hope is going people gaming, a in hardware a we're – Maybe super this. as will we productivity, We've of that exciting I stage they're another now. product we and call, stay gaming think of probably and role even big draw a continues a we'll mix. big create a reality bigger both called large offices can dimensions. out play and to

So, that's exciting.

from Andreas from coming is ZKB. question next Our

more IT can color brought you the up give line? which the a is exactly? into bit G&A and investments First What customer infrastructure, care into question, that also

have to business customers Obviously, our grown, just grown as needs our well. has support the as

call that capacity we've VC enterprise growth more the support and so, into And just added had. and to some of centers we've scale oriented support

We've support that IT end will year. And growth. the that investments planned that those for of some remarks, my of we had pulled by types pull forward. mentioned some also has as the this – a planned we projects that over of had on simply investments the we expect we have maybe company of of have had areas. I side, I There's to of scale forward. the G&A, wind it's the increase in some to in longer-term, The that to down prepared IT scale the that had Andreas, that So,

and this So, our be will that level one I'm But expecting some it, G&A is of it rate. into run and not new very to I where put we've appropriately, remain. investment think area

year, and we over So, at a for levels, longer volumes right G&A is portion term appropriate, we're now. but you these And the a more below by certainly probably still sustain variable think saw not variable see the portion do where this way, given fixed. what of if it's certainly sales. more at on is Still of that you X% G&A

it's should So, something I that you have concern think real don't over.

to down, be the you still in When you bring down supply be will normalization chain costs, see what to that costs? it logistics able place probably high, this in a currently bring think it's needs to but logistics the to

supply express, logistics It's true – super that both high. air our chains our are and freight and been have basically,

know I maybe a into start think Nate. bit bit. And we But this how we down feel, be it normalized. little expect will you year, don't think it next go as quarter. come little to a to I more I

Yeah, true. I think that's

that want something be That business more to large address think continue may something we start to is have, I'll you good deployments. is freight I also especially that expedited users to to though, say, as and a option utilize.

So, I Bracken. with agree

deals, supply large manage it categories an available potential the if mix/volume, year. as where say demand/supply, we all think future these I to these like that some I of also it's again would in us that some up in just But between to kind will catches come is been option things of down mismatches we've that. chasing want of

Michael Vontobel. from is question next from Our

questions, Two actually, my from side.

you to in your opportunities. organic going priorities about would allocation where more here, First still of a same lines, you cash increase materially I would quarter, forward? And projections. and on I And Question here, all, and plans? use unchanged talked the CapEx strategy announced the Last of were we CapEx R&D question forward? the should along be was think you talked you see And in about My invest if is expecting up an expect going CapEx be R&D? already have you your your follow-up? then step guidance cash, to that

are investments we'll our in increasing and R&D, keep our increasing investments. We

In reasons. terms we potentially But we bet you much areas, too wouldn't And are of priorities, for will can they focused strongly on we're all make. that competitive that for share broad and I should four hungry make. investment

but keep and power really have to we we're really investing. Engineering great has long investing of term. So, going we're of unlocked always going there. it's the been engineering, to engineering, company has the been Design lifeblood this about – keep

year CapEx side, the On for been normal. unusual relatively invested it's CapEx an because low. It's we've lot still a than capacity more

what low at future. we'll don't be we're size CapEx most end I to the CapEx much standpoint. know whether a need very will from think companies our in doing of spend I the that

You Nate? want add to anything,

Bracken And not very right. generating. precise, think this is be return of at very is we're million you $XX spend that's CapEx look I for when think we're again, just Maybe it year, cash Michael, million to amount said, to the guiding as a the $XX strong. significant on which, I

terms that, XX%. a is little expense In of on put R&D, just more up to year-to-date, color R&D

But more some in year. again, longer-term investing been oriented. consistently it we've opportunities. think fixed addressing long more I So, is that's fixed costs term it's growth this Again, That because costs.

that. with consistent very So,

if heard, and The was script, mentioned product in you other R&D, this resources thing shifting within the categories. between we've

the XX% reallocating And the quarter resources. year for so, while of it's or we're that, growth, within in growth XX%

So, mentioned you well growth Bracken XX% that excess of that of reallocation level internally. are the the the because see company that growth of seeing in priorities some at

the in would question in second forward going My do progress where terms terms And of questions. best you're initiatives, priorities two making currently? are your What in XXXX your be, sustainability? sustainability think you fiscal of

keep rise part XX% signed Accord commitment first got It's seven labeling, get after – our over doing but labeling for year. to got the up this Sustainability product about to Industrial we single of to the Dow we and and carbon to we've X.X next that or really plastic. we're kind that our deliver XX% every that excited just we're consumer announced and will is of everyone in with platforms world trying be Europe that, of moves to We we all that product rise so a a degree labeling the the to announced carbon we're a portfolio we're carbon mice get degree and we Jones this named lot the against same X.X last recycled two and little and time sustainability. where encourage our XX% higher. done, that do then be We first We – track We're and to keyboards, on trying tech going which contain of the year labeling – in to Index temperature. to the recycle the And to to what our calories. get making the Paris the thing, year or competitors try bit announced and of globe beyond that by volume, quarter haven't like to publicly, can we'll going in of

we moved pressure once the down. will on put package, we're will to some in on We've so big to So, it do all after at it's that to and it try whatever can't and to of try offset going us look to everywhere we're consumers bring offsets that. energy renewable far, And far. investing progress aggressively there. making We're can we carbon so

a a not let to up. So, we we're have program going and absolutely of sustainability. company going It's value against the big

Research is question Partners. last from Our Reto Huber from

Actually, two them. I of have

your group's question channel to that in margin, or did quarter that then, before, the already I in addressable the BXB education you your your but maybe are margin a is touched my on would believe Japan And how second is result much quarter? as market the Is of be, the wrong average one, channel? from change First impact investments in going BXB how I'm increase wondering through it thinking? wrong your were sold of it remember BXC? how double a was your but versus And into Because there. or much – I education to gross going below margins simply or third gross order the revenues

is group true It that margin. below education that's Yeah, our true. is

long On a hand, bit by also the far a other lower so shot. it it's OpEx

questions, profitable. size terms question where share quite be we'll really I around And little an try Analyst/Investor in is I invite pretty to it don't I moment I of of of day, increases, clearly a end which will of out. We to market efficient call. So, to more through you say it's we think answer and be coming hustle quarter, join. BXB good than the you would a other that think this addressable can rather love up able soon. it would a some to the have as And our your earnings at those break

And that. the the unlock will I far in Yeah, year has about market, I that's ��� we think too that? several the do do how overall discussion this right, increased it and is, be deserves excited power real – And our of I I'm advertising AID, than sometime which question TAM, that. think we're next more addressable think not you're for our that dramatically the away. an

remarks. it will turn And Q&A session. Bracken our his that to concludes I over for closing

for was Most year us. next year. this after the and long-term It not company obviously it's strong But completely super people now quarter. very that, committed. on This a a the don't thing the confuse year. We're working in is that of temporary. a strong are year been It's

So, it's been extremely exciting.

year been have will and investors hope appreciate us We all really I long. come. and challenging us. it. challenging collaborative, great, guys You all you for analysts, partners Keep

here and next will for and this See of you all really Day, join. we excited haven't lot. quarter. hope we're We the year, We're will next announced excited our Thanks about about year. you Analyst/Investor I but date shortly, a

Thank you.