Logitech International (LOGI) 27 Oct 212022 Q2 Earnings call transcript

It stopped raining here in California you'll be happy to know. It feels like we're in this monsoon season. Nicole, wherever you're sitting in that virtual background of yours, that's what our new office needs to look like.

It's virtual. It's not reality.

start Safe to going I'm with Harbor. the So can anyone on me. line the Hopefully, hear and everyone thank QX everyone morning Good you Earnings Fiscal for Call. XXXX Logitech's joining results with This of Harbor Securities of to statements, includes Act Private outlook including Reform call future the forward-looking the operating XXXX. and Litigation Safe business under respect these statements views We're on making only as our based of today.

those our and differ number quarterly undertake of statements. recent uncertainties, any including Our SEC and a risks materials of earnings including to actual mentioned materially results reports. our due no most update could annual obligation these filings, in or and We to revise

We will also discuss financial results. non-GAAP

and reconciliation page use of filings. These in You a between IR will our the and materials as information review is of well GAAP find of remarks, Web Bracken. materials webcast replay Unless are in results Web a our and on currency as slides site. with our measures We and and sales. available are the about release our and non-GAAP prepared this SEC non-GAAP press are call these turn And constant be call I'll available carefully. the will comparisons that, recorded encourage site. call noted This between and to net in sales on year-over-year periods being to over for you otherwise, our

to company anniversary categories mouse. celebrated Swiss the a of XXth into we're to and of our the to a designing growing the anniversary I our not back summary that a original categories, category future. our market found surprising at leading Safe key in grown share and gripping This computer Nicole, niche and prelude the that as with the you, but provisions. across mentioned month, look for really mice looking startup XXth of many majority Thank we including product share you thank Logitech. a software Harbor and from here We've

world around will keep ahead. the our strong a and of And more the content. the PC I years PC this people their become collection on support the and from at XX content other's at and create landscape a they away move tiny in screen spectator to growth biggest the phone categories. create audio-only product almost everyone trend desk in love trends; those video the each growing gaming, time. where Almost well be years long-term and will our Gaming will work, will watch growth trends keyboard, standpoint. collection collaboration. of as for totally grow as of Just day, and many supported comfortable or sports our long-term creators as Logitech's position participant a categories replace for market that will original mouse period, streamers from a Video a one collaboration growth a table learn can hours as workspace both in collaboration,

reality video home I of more collaborating for support us. companies, dedicated the the overwhelming for simple, office It your child's desk, where wherever was wherever while accepted workplace is, so Logitech. in is; be and new is who rooms, embraced across are all relocating most We work collaboration your huddle meeting. workplace then Logitech, all Companies large traditional to let's We the of working from and conference is a it. all at rest home opportunity two We've working used for evidence workspace, offer near office, spaces, grow. those, What ways to still era But continue home solutions that that enable rooms, positioned outlook. need the this including so variety organizations your go will workspace many those office. of over of workspaces a and next amazing continuing The the to hot an a for hybrid. the office is will we're long-term That's term. Most are world ideally more places settling working, them. their Many to must There grow meeting, for other. look growing. into and has And to we hybrid of distributed prefer are for your days Many employers adjusting least have I have and employees room desk, office video to in have and had that days And entered this us across need three must Humanity than and industries in and room, week. the each to people create workspaces table, of your want or conference play. the new share a create, in all need things are prefer for many are together creating accommodate of shift. practices redesigns, reshaping with not When offices, places, kitchen always spaces or work just shop. connect enabled planning this to more grow to are a one. to coffee connect of the the offices

continues. this in create X.X examine hours all in our billion reported On strongly engineering and Facebook across streaming believe hours sustainability. in increased of Twitch, double already design, all than saw we I digital innovating been total base, billion world. from too; sustained growth, the top and creation performance we of pandemic. we of Digital not for has quarter many platforms, only Last XXXX. market again surged growth almost number grew of hours sales, surprisingly, the years. of revenue. But that not on growing in past delivered all pandemic. history including quarter. the people most Those QX that by year. of this X last the sell-through company to year. that trends during XX% tremendous QX The record the grew accelerated it QX watched and better surge across the year-on-year any share digit of top regions larger substantially YouTube actually We let's year, growth our across And we of we're mind, incredible That's in almost XX% Now time this XX% XX-year

peripherals PC double and sales digit devices remain Our PC strong, pointing categories in keyboards combos. growth and with very

of design Here's two examples is centered one how so approach or our example powerful.

right the On community. and popular the creative one hand Mac. this we features quarter, standard new MX that's likely XX SKU Mini keyboard. right to awesome. it keyboards and the designed I'm is of It XX size keyboard MX minimal Keys, wireless keyboard and Keys sitting for in now request the which here. older. launched of a were will input Mini the in or of using it's a absolutely It’s These but offers best larger The me, front and resolve

our KEYS site search and at you ideally -- in in look keep go bar. just hand, other type so type listening to me the later -- the POP Web in for On now

keyboards Gen line a it's replaceable SKU with see very colorful It Z. strongly so in mechanical of and launching so You'll under with perfect keys cool, just that's XX It's female. will for emoji fun China. and

had category sell gaming. share strong Underlying gaming simulation this double in as console in grew PC, and well. growth Our market through with category digits another quarter

ago. years is more was double the two than category tablet it size Our

can and Our but opportunity and for democratize portfolio adoption just are a stronger growing Education not online the online strong K-XX, of universities learning is and numerous than courses as learning ever. with to of has easier, educators their lead in-person home. in become popularity. there's do and more Remote students grows much teaching help platforms and to are both learning when at we classes

According attendees change million more our are nearly with As the video. Sullivan, this. lack access because last of the Thoughtful customers to worldwide, over hybrid, using of XX new future. it's only companies face-to-face that's and video decision out of rooms organizations a they a video video as continue way to to benefits reformatting IT people working maker Every terrible rooms there. rooms videos is the for hybrid ways the indeed more have of that experienced remote meeting is who about thinking go interaction of creates the departments, help year. worldwide firm According and work research about in in and of reestablish be to the watershed will ways these cultural because driver primary of every of them, the role for are and the of for structure enabled. departments of a evolve the Frost technology X% the of offices many & a the remote, rooms, evolution on-premise these one-eleventh total market company. The simply must working moment We're the have of the to the of first working, experience time

and here. surprising company IT building systematic and IT making it out these for this steps area. We're investing investing isn't departments aligned deeply in careful, broadly solutions So in leaders are

news headline of impact chain to have Next, supply the globally. been that well I the industry discussed want challenges touch on

Logitech to While to supply we've the chain is global immune well managed their throughout effects. some not challenges see pandemic,

carbon we and that about logistics proactively I delays remain out These removal pandemic We be the chain, higher competitive that business during chain value carbon the our years help goals. continue come. driving accelerated manage supply should And production across point, well with for us business. long-term raised years. in and announced it will to entire sustainability facilities, plans me be trends of our that the will leading recently update. positive hand Nate, environment are XX XX% carbon designing this and supply climate We at driving unprecedented that pre-pandemic, energy believe more our footprint component drove supplier in in our facility than costs to We're supporting certified before using our be long-term from party excited environment. projects. products industry our year are growth We our in carbon have close will to sustainability, let generate. taking We trends renewable and and headwinds our as a give availability. commitments. to These And now right expect at relationships quick prolonged addressing and the third over be as do neutral our for but We're we climate force wholly-owned we current challenges chain, ongoing a the

market remains current our to we The play stronger. trends down and Our to even unchanged. are long-term doubling become strengths strategy

over me comments Now turn the to quarter. call performance Nate? let this for further our on Nate business

year, and levels half grew maintained Bracken. top cash delivered a We for the of of we strong share in quarter on the to record execute line, continue categories solid fronts. gained first and most gross of QX shareholders. the to In and a returned number Thanks, margins, well

unprecedented confirming are despite outlook chain full our industry We challenges. year supply

But strong hybrid results, after Turning keyboard than all sales our products, this PC top headsets. work QX gaming, simulation grew ago. with sequentially video year tripling solid line through greater but by grew grew driven QX more against lineup by and strong X% in more grew good Asia excellent sell gaming to for last versus for in than an quarter in constant last share sales sales position currency QX. in Webcam while very and of Sales last momentum excluding pointing two grew potential, both three delivered and has and growth a XX%. the category the console innovative Gaming year, year, been year. digits our declined years across grew our doubled each in growing through share X% have XX% It's impressive wireless and and declined EMEA X%, first EMEA a Net the We marketing And long-term tablet half decreased enabled double X% of gains digits. in than where leader education categories growth sales in double Americas devices collaboration the Pacific versus categories, accessories net sales we and keyboards. sales awareness. total categories regions. our and company by gained all they order year-over-year. prior and mice as more fastest Japan, category X% QX QX declined growing like in large execution

tablet our the points portfolio in double the quarter. and category still ago demonstrated Importantly, X gain two than of it is as is more share our by was stronger years size ever, than

strong QX QX, of reasons. would non-GAAP be including declined categories year, XX%. And versus margin elevated current music last speakers remained lower overall, levels be as margins down gross We expect for look gross three basis at last that expected XXX gross rest points as from XX%, year. fiscal XX% primary mobile the than although down margins in levels. to Our down we year's I this down out to anticipated

although increase First, promotional historical continue we below our expect spending levels. to will still remain

we continue retail will expect and supply we to point store to Second, And in was invest last year our industry-wide chain, and manage continue broad-based cost while by significantly we of marketing, sales to lastly, component due curtailed be supply which shortages. closures increases. freight to impacted

we grow invest long executed to plan expenses, to our term. business our strategically the to over Turning

XX% in product largely driven operating $XXX non-GAAP The in sales million. marketing, expenses coverage and to by Our was increased increase QX investment development.

year, sales, our ended As and billion. QX annual points versus points a with was the paid in million last from quarter increased QX. still as XXX the scale $XXX to as X and significant operating tend long while cash two to flow from than This cash two the be X.Xx end cash balance P&L, down QX working inventory inventory percentage from dynamics highlighting company. turns up as I turns and and our operations ago, negative a longer of positive, lead year approximately OpEx year, were year dynamic years the were second QX reduce of challenging this given versus to will higher the returned but But due secure million an of a of cash September, about $X.X margins but that of an times years our flow components and rebound least categories. outlook. decreased our down times sales, the of share to at million generation of capital. due this million flows in for use to repurchases, up bottlenecks last year to key million, with remain time operating will significantly continued to prior inventory cash positive logistics, balance profit ago. and At times XX out QX and slower high our than should XX.X% XX was $XXX We Cash ago. be percentage quarter our Rounding strategic of was product our the a were about XX% rest million shareholders versus XXX operations transit sheet negative Xx expect cash lower supply unusually Historically, $XXX in of dividend QX versus for see flow temporary be initial they will transit half. were lead improve,

inventory XX days an up and QX conversion days, of our from which exceptionally were ago. QX year cycle was is cash cycle conversion two XX XX XX from primary Our the driver years The up cash low up days levels. days in last pre-COVID higher days, change about versus

long sustaining we Looking and last the a are tracking for more profitable year scale to plan to increased revenue and from of ahead, our build the investing growing larger, term. faster company

of We are fiscal maintaining 'XX minus million or million. and income X% of outlook 'XX outlook fiscal in non-GAAP year flat year $XXX sales growth plus confirming our $XXX to operating currency our constant

to focus We With me well on positioned growth. market, are it reflects this long-term the our driving and that, in outlook let back hand Bracken.

Thank you, Nate.

These drive for long-term Our trends video capitalize really our creation operational position on and as to well. to content the performance. our continue performance pre-COVID to continue ability and accelerated us like COVID and that gaming trends well during future everywhere, work, consistent execution hybrid drove

the As I ago the as years top but only far have company now. a from started call, we that mouse said at may of we're XX

years work confident point, throughout thank last the And innovation. is at this Our this and design each capability of sustainable in of portfolio excited and the continue products half. strong you diverse, this come. to and this world employees I our upcoming year the super a one call. and year to for our to class want listen of today our to build Many about and hard is quarter pipeline about I'm we

Now for and your questions. are ready I Nate

a like from have you ask to chat that, will with Merchant And ask question. Asiya I reminder, if me question. you'd Citi first can the a As

Hello, Asiya.

Hi.

reason, I has it. For some the can't like seems the host disabled start video. It

audio. So I'm just going to on ask

Bracken for one for So Nate. one and

talking you're long-term Bracken, So about growth.

Are Nate kind or through which see is target to the more the to You growth, we as what seeing had investors sell in pandemic? expecting your will your growth outlook. be face idea start guys attractive of buy growth. hopefully, seeing Dell, and we're you single to here low see when that as selling for well. relative line and some it very Then HP this, with And a sell-in normalize growth question are this exit given period in But like of category we that sell sustained a or seem about of the during some obviously you're seems indeed seen robust a versus normalization. have and concerned through. digit the flattish peripherals that should should model, extraordinary with we've that and are the some into very of I competitors, year normalization We're there

Okay.

I've I But remember last couple in of reality for that think numbers really the to and got a actually us. over front they you a is years back of that of me growth base chart looks the -- the reset astonishing. that have are

So, keyboard keyboard for mouse now just of if these upgradable. and and all really categories, and I'll workspaces and got -- keyboard take we've mouse they're extra the and example, just now us, multiple

business at was at upgrade an home we're just companies multiple an office, the pre-pandemic some now upgrade, standardize. businesses at to business. want really Our and mostly so And the for places, upgrade

after it think these categories. and go I normalize. that, call going the we really about year it. as see next believe we're to I'm excited and after yes, And into start will growth that the And long-term as the it to So year I year in you

a think really good we're in I position.

happen. it is The waiting categories, the sitting we're our leader the other of our I'd for market on Most happen. we're to making chair not say thing and we're market

categories. of I in now. gaining huge the That's we're share a our the innovation have company the believe history right percentage engine of why best we So in

make So happen. than it I we this watch rather happen can think

video to relates like it as event, year of that through dynamics still going guys? to sell-in, But half it to collaboration, is I sell-through video you're to on we to we that expect fiscal back of XX% shared the the was at get low are XX% sell-through be sell-in, some see strong that reported collaboration period there. guide the some end As of there this I in going this going to you analyst even seems go are dynamics know or for to in even growth. to your should Bracken, range think have sales

good I we think up that inventory channel beginning gave we're think standpoint, that could but end falling below a shape, in I from the range at the we year. pretty of

just I think it depends.

the things and seeing I that making of of to really period One a the is companies delaying their a we're that's happening restructure their video of purchases lot think going they're about how to there's set up office. inside probably and in how offices, decision longer

diverse So one news diverse. and we little one I been that's though We've story This a portfolio. think thing's vice above performing been possible. the the five When The last is below thought, we're is a for has other sometimes got strong as long as really especially what the great for I've us years. good here, versa.

So right are combo of performing all look what already of device, kind now, gaming, and pointing them if our we know. you keyboard, at above business

really these give year. strong So will that continue mix I'm for the growth us the convinced of to

just Nate ahead, Great. for And sorry. Nate. yes, -- then Go

No, go ahead.

discounting soars. for this Nate levels, demand Just inventory if about significant

they at significant buying, that an gives going everybody strategic be elevated is some that you there to the get point. where of not I need? will have lead inventory can just know environment given to What discounting? components confidence You you're do guys this else

comment. Let me just

our sell-through right on the than through and through, on last the Bracken question. points think sell on I think hit the just you your I sell-in was rates. sell dynamic, remember growth greater year, earlier sell-in the all

year little of taking marketing is place, last you're all doing of was with and taking was this marketing we're there we've reverse this communicated. There very kind to place. that those do taking normalization things of as place. just lot expected. really retail But type has totally of So no really that seeing year the sort marketing, promotion MDF with year, a

a that we down as the concern. get But driver Probably a primary it there, seeing normalize unfolds. we'll surprise year. the you're Asiya. will Not that's and as next to So see not situation

I we strategy In inventory, terms I -- is have think our again, we've as working communicated, think quite well. of

short. something Bracken you in where of mentioned, been gaining last that's had if we share year in share think loss many We last as pockets do we've our didn't really share. look year. areas I board web across cameras at gains, were the and And actually we

I think playing finished on made replenishment components and goods So bets inventory been out have we've well. and the

this have life selling I is we would are in other that the making we again, cycle, longest say on The fastest market I've inventory, is bets share. where before places are said places product where thing our inventory high

again, most strategically one we So we're very thoughtfully. these really number have in two making those bets categories. very and and of position And number

about I to inventory feel type of about really having available as this good ability -- feel I So environment. our actually this in great we're

Great. you. Thank

Thanks.

I burn point implication a that? to that. the not everything selling if just we we practice Can the do rock if imagine That's in just inventory, future. have can't that extra one We bottom by been I in at doing don't discount. that just somehow past. off The our more it add -- we

you. Thank enough. Fair

Chung from question next from JPMorgan. is The Paul

Paul. Hi,

Hi, Paul.

Thanks guys. questions. my for taking Hi,

over et of some increased of cetera? see talk to Can starting new VC we're VC, some you've the on past the just about how products are investments earbuds, some of you those the the return and released the tag, in on So year. docks, reception trending

that. good say our But engine really just The the off react reason. new. I good overall, in VC. early just overall, are business. in I Yes, whole video about innovation sales oops, our video I’ll to jump collaboration some feel in really about those. -- it's my But is I'd for cycles probably little feel They're a too to on Yes, really brand longer

great. software is workspace secure way and received. super Bolt, our that's with enabled which a really more continue Their secure coming well that Scribe’s basically probably one to great been been newest Logi equipment to our products comes just have of service products. has also a session’s whiteboard It's I been for think exciting. Actually we video in. the

really with about what's we're coming. what already and I good So feel come up

just to I'll that And, add Paul, too. on

you our sell-through made And you regions, strong install grows very demand. heard, -- comment think double VC in base the really across portfolio is important. had think really which I As we year-over-year growth digit all indicates as I

As our we're grows, and out install other like to base customers, keep holistically with solutions as than like camera, with to mentioned, going those well. build conference just in their Scribe them help there working the Bracken more room able being products that go

So side. I of been think good investment progress on That's area key for us. an the development

look P&L at look roadmap. you R&D, out If towards and going that of a the good the you at building that and VC increases in is chunk

regions, of lead speaking the relative of emerge Europe markets indicators and trends Any what in Asia kind drove and are as the you there? well? seeing for strength So what U.S.

China Bracken, was go highlight the there. really ahead.

No, Nate. it’s okay. Go ahead,

VC, total this We I of had Asia was at as China level parts -- was really and good in highlight, too. other we is highlight actually really Paul. but for the going had strength the in down speaking China Asia, to say actually but company well was the

to China out of now, thing they rooms it and interesting so see always been and the we groups in nice calls of longest conference have the get people video pandemic obviously in on think longest I see to in it's too. When the the probably have forth. been is

of stage demand we to large large pandemic, like portfolio. different that like a country So that, I the across sort the in that a see even market they've still positive think very it's transitioned see strong in where to

question then And guidance. on Okay. last

in cushion So promotions, historically. you you've on keeping chain XX% increase range Thanks, you there? generated if XX% That's of operating a supply in guys. half the this kind Are first and typically of profit about in expand bigger already. that could year

you're Yes, right, Paul.

I being year, think really the with this our biggest an half of QX think I quarter the is historically of unprecedented it second obviously year time.

am think mentioned And we making supply I immune sure this think so Bracken to that not we're -- can challenges. listen, I I quarter. through get And

supply. and stock good have We

can good But products supply. at chasing channels buying are Our there holiday. components the People are during we're think be perishable. and some levels. And where the are rather holiday demand for I chasing

demand to And make we we we double the with the strong see. need through, healthy. all demand’s sell so fulfill that sure And digit can again pretty that

Thanks, guys.

Paul. Thanks,

the which Just I they've incremental on thing adding is just else to have to Xx up that, like guess QX, since the costs Xx everyone gone ocean gone we're Paul, up. incremental margin that year-over-year. facing logistics Even

I I'm of factoring in half year. when look the that's So I think as of into some back the

We spending already we're on were. air plans freight. more this our freight I’ve there. air P&L the sheet using the lot we're what will But more using be that's than balance quarter initial to demand and the out a approved fulfill

is next Ananda Baruah The from question Loop Capital. from

Ananda. Hi,

up and XX are you just or seen to apologize product Nate days guess taking couple if Good that to from guys. Bracken sort is spoke the things that guys already. and speak and questions. the the see this for going germane -- Thanks, end the you I to of a a Hi. the -- that running I could. things have But Good anticipating what you There's as last this over to the then Yes, too. could guys areas? the I have were what Thanks things follow to of been guys. you on markets to morning. the good And key see of you different or Two, well. first both I are of germane business sort the morning. you like if have key

in say worse. maybe Nate, challenges, chain say a one. I logistics I've too. first especially if would Yes, But I anything, change. supply there's change, if can the take I nothing's left I'll Sure. think And major you would really have the gotten a

I it the of we're and media, as immune that's in the at probably call. covered we think said well, the beginning not both to

manage. But certainly so to challenging think it Nate? far. Would gotten I add you we've anything else, well really it's managed more

think been the that's probably I biggest change.

the last like at it a an discern It only in the one. from is hard heads vantage and our from on toes seems look you context HP it's spaces competition and good been folks that and would the you coming it their like? more about some Cool, is have that Logitech sort anything sort idea question only the competition? guys helped specter well, -- you quite it second the that's the What thrust. so And like And pretty to way ask which way or like the seems to least their example Thanks. frankly of that of of competed, of think way guys then the so you are evangelize evangelize, the is that's that, week, if to poking talk surface, to nothing kind and to that, the I of -- sense of -- good mainstream but point that increased of of dipping would extent to to what's you think right folks like in the that in in the us then what way part else guys not context increased of the And positioning that? one. community to guess may around, if -- talk I our because that folks they're can -- in of like

categories. in competition more in play expected always We've good Ananda. great categories you, we and Thank

invested. That's we've expected we've So why always new competition.

about suggest dark where are. really So way a innovation. it competition, because of the And I excited I the investing would awkward in we really if so category. have We've really go-to-market. future feel We're would been investing something building feel we're about I both. more didn't And good we've -- in our the capabilities been we in think about in

to great compete. I think categories super competitors. We great are these categories have love and

You want to add anything, Nate?

Yes.

as the where of awareness to grow that As to awareness just well, going bring these trying benefit are some right? bring think to one that more very strong passionate they they're of competitors, they're Ananda, business, and is to about. their category I the we categories we're

those course. I to the to our go of customer think market keys address to and are specific innovation segment identify continue with success to design, great and then needs,

awareness as our change more strategy. the doesn't it benefit. some think our see I focus But on categories, think I So brings I it extent to that a doesn't execution. to of these change It

just I'll on that. double down

people been nice out beginning. will we've of said you to have there evangelizing beginning, be evangelizing It the kind this category more at mentioned you this think at I category. the

drive small forth. rooms enabled will example, a for and to we're in cams, it conference such And XXX growth. the rooms Gartner of think total still I higher so fraction according

strong an think opportunity I how is. probably of yes, this indicator So market it's

you you still Day, if way get -- shows you if there the for hit that feel coming growth get the profit legitimate. that competition hit still prosper? enough And can that Analyst Do of the sort you've you Is room but goals? it you goals, of last out legitimate laid to prosper guys however feels sort in your in up,

legitimate, All Ananda. our are competitors

think an go place I important it's to Bracken, ahead. start.

were Absolutely. around. keyboards an long We've we and and all been in competing started had as mice as We our maker out as over with we've legitimate selling players and almost categories directly competitors those for OEM time. of directly

So we we expected competitors. we the And make better. They'll better. us will be sure in are great competition. invest making that They'll

good. That’s

here obviously your is too. categories that competition. models our stronger, will we I you're see bit. an little more point, a add to seeing increased build competition. just me marketing don't no from and in think let We which and competition, expect and goes these we gotten directly That assuming brand us have investment internally Yes,

the strategy so those compete. all making in investments part we're of And brand, marketing, innovation, that are to increased our

Thanks, guys.

Thanks, Ananda.

Wagner. from The next Stifel, question Jürgen is

Jürgen. Hi,

Thanks across remarks? the And inventory on. components between introductory the are follow you Can visibility on I'm letting your business finished and key goods up afraid. on for up A currently have your split what what mentioned it Christmas divisions? is those questions, you me you Hi. the in

inventory on Let take side. me the

a We we past. more as the percentage than holding components our mix have of are in

that's strategy. I the part key mentioned, I of think a As

transit that in is too. our thing higher inventory is other The

these things delays as and So and shipping that transit. our of delays sits like port occur, more in inventory

you is as but delays. these So because Things not inventory port remarks, are of primary in guess, mentioned I in the think the that's days Jürgen, can that taking delays. days. longer these driver as productive of finished transit goods increased my about it's weeks I just that prepared of And

and not near going term the flow improves year. cash I as again, I to outlook in for so why think adjustment this to And happen and that it's the made the that's

to did I we of like But going take of to demand entire to to do our it levels. kind don't to the historical levels. look going because think I our the down very that times down probably time improve, improve, to see some I the times chasing transit last strength of be and supply back inventory come were unusual think days of it I more as the components last lead I expect that's come year. this it's do year. year. more of But year for those inventory days As back think historical Obviously, expect was don't will

last normal pandemic. Christmas Jürgen, on the would the into set view the I gosh, seasonality of both Nate feel business visibility strange year the like the aside of of the I because year we quarter, and our of say,

our another I view supply especially strange another this the and okay, think of say, aside really year, year given normal is seasonality will set challenges.

that I our a got good I think because I to visibility's investments think the to products, have. and feel And got inventory recommitted strategic are. So think where we've in we made plan we've guidance we've we put in think good normally together, feel you about I when probably we've that. love we we'd place not about But that

you do visibility where product have And better certain the have at categories you moment?

answer Do to that? Nate, that, or how you you answer would want

run because those, you you're to well. as you Well, deals, a of with what one might I rate working you but the business pipeline, think can bit lot larger we've customers. a more call video always little more more have for build have is said Certainly enterprise a visibility, visibility collaboration, that

on visibility -- video better but collaboration, some So

Okay.

than video less of our sales It's still is collaboration. overall XX%

way in that's come? going it's the of business. the in, a into from I this think had is But the kind state a holiday, also It we're never in bit usually not the of and say, year. normally it will always well, so little We've would does -- I rest shopping will different is we're our this same visibility which

you. Thank Okay.

Thanks, Jürgen.

from is question next Your UBS, Joern Iffert.

Hi, Joern.

Hello, Joern.

Hi, there.

Good to see you.

see hope I Hi, you. Nate. Good well. all is to

It is.

two, please. and questions Quickly three

full capital the slightly, X ups and or would crisis. pre of historically, please. your half supporting or the somewhat? your line around being room marketing one intensive If one I is the is, would first maybe the marketing And have year, sales extrapolate it streamline then it's more is or XX%. becoming on question That spend sales marketing being the maybe selling be Does up XX% two and the in billion for XX% first The I XX%, please. up mean follow about marketing to there this XX% XX%, around growth selling in second margin expenses spend,

If on can you start want, I that one. Bracken,

up, we put strength because try marketing, leverage expansion more we’re us one shift what in in benefits we're So to gross a pre-pandemic execute on that same that And strategy awareness, long-term quickly think shifting margins you that pull. that's executing add long-term aggressively and year. to and to into gross reinvesting It’s some? great the the this us this the want that go ECR executing. But to of go were drive some from the brand with as and well. margin about the of saw we the Bracken, margins move up that we of talked well, year, I strategy right Joern, and push is to which position we're I now as able strategy to think and provide last sales the

our it engine we've great team going where the think We're we're certain committed margin -- learning operating takes our mission say, when -- back And make growth. will really deliver But time. on that. we marketing drive we constraint. view that really got that it operating a that to margin we're I'm that is, invest can long-term that really operating And marketing don’t we're investments excited you we're headed, and I at and guess it Yes. would through approach. changing really I overall keep margin, stronger long-term operating and so be sure our we'll sense, the margin extent into a operating And delivering as going to place. to an about building just performs. we And I keep making a And income and or eye in marketing really, to. look

and Thank maybe third question. you for this. a And then second

to on The second here your question medium-term follow up guidance.

increased XX% of X% more This You is targets course, things before. to X% reflecting medium-term now some to from shaky. X% becoming your maybe confidence, but to

would where is now coming How is the to initial then you This base? a can question think mentioned last should video we think in technical please. have you your grow down conference. You It about could environment? below the targets. current from be baseline What XX%? I the And X%

Nate. ahead, Go

You can start.

We confirm outlook did, for the Joern, obviously this year.

so But Bracken Bracken? it the thought different that's been So not our than as line mentioned, mix of had, the that of And sustain in what there's again, generation at portfolio no that there's a mix change unusual. this think good the really base. growth of one start we initially portfolio, investment there's that of really it's benefits And plan is able across highlights the that to different despite revenues. of top we diverse, year. the we've and profit I

for talked guidance our X% are of would we our and rate long-term fact I about neither long both that, feel to of view really categories term to think the That engines capability. those. really only attractive attractive them. on thing are nothing's I and The add innovation absolutely is good are that term, changed one for long-term raised about in our really, and the that Nate, from XX% comes long growth I

All right.

has million, right exceeded and which rough this idea the are a roughly on EBIT budget? versus what last when so it And component additional question, you're then XXX cost XXX initiated what logistics your Obviously, now? additional the facing guidance you this million, I April in think in have the non-GAAP number, you just update is your freight, and this segment March in costs about

think had gross increased I Joern, which math point quickly. I'll costs that, hit something on is this from don't do we the year-over-year, to about margins can I quarter a that ocean. freight mostly from give you

I throughout tell probably that what quarter, kind So think. we see And you in of can this we'll I year the that's had.

from was which freight the used we volume. such ocean, of same reduced there. my but gone year-over-year, additional seen reduction have at the we incurred amount freight expectation, up we've things And as a real the the we've freight really actually rates to some haven't on air have air air shifted time, benefit We that costs the freight

all P&L and I all But our it's in has our included outlook. been it's headwind a to it included in date March. So since think

All you much. right. very Thank

Thank care. you, Joern. Take

too. You

Okay. from question is ZKB, The Mueller. next Andreas

Hi, Andreas. are How you?

an question. Have you too. you're teenagers that really good. That's gaming. Two this impact? saw well questions, Hope the first be online gaming China’s was channel if -- in gaming on wondering One if And long an I the seen second may. fine. you that shouldn't was from effect I'm I law Thanks. was China

that we SKUs, business Andreas, answer plus. gaming with our plus why don't is -- not then majority start next an answer one, one. just ask SKUs actually to the is can The XX you vast the XX

So that law and is for XX under.

a no, effect seen really business from So big haven't that. our we on

gaming, than front in PC a of time same the spent people Chinese it? these something Probably doing else isn’t

a more just think to little I to maybe color But add that.

I going think you're to buy play, if some peripherals. you're going to

quarter. is still But strong some in I similar completely, quarter think any add data you not The to equipment, last did year-over-year. to a growth have buy unless stop just to to had gaming too. Andreas we in it, So whatever going little very slowdown you're growth that gaming; China was a playing very, actually

that to some keyboards the type just of products? devices, pointing the these cycle office combos, still had of demand or behind home was it that back investment the from and really the growth sort The an demand in really was office offices

where buy see a little strong also -- Master, headed a the but in they upgrading. that's business, asked to probably are to the got part Well, people me I and they in we've I BXC talk -- MX now for our -- that I something we're And place buy, We told anecdotally, I regularly think went just now part bit into to people it's out an know base pandemic. of had bigger what they think people me and BXB both. the of a growth

launched excited We beginning it -- to about I again. Our old you do innovation exciting site. I not. go Keys this in as might these or I'm of so of We Pop in old Web business and and the not business. our mouse alive call, category look called really was sexy, believe even said And make great categories our old just are They really keyboard. at the the -- category on encourage this

to So I really engine reason we're there off. innovation that is think the going the it report part of

Okay. very much. Thank you

and get I didn't you sexy, excited Andreas. about keyboards mice being

one next you reminder, me the ask if from a like is to question. a As chat DA Tom And Davidson, Forte.

Hi, Tom.

thanks. Great,

So question one and one follow up.

supply extent some remind standpoint to what less me logistics I and from influence? have logistics, to you a standpoint, assets extent owned chain you and what supply a influence and So manufacturing you and you can to have extent side? your So control? chain in operated think the you have what on do have

China manufacturing we own We the in a outside manufacturing And are used about China. in what We broadly. normal logistics in manage really systems manage that contract From of logistics owned our manufacturing. through that we we standpoint, then make sell half our of and China. have

Right.

have primarily don't constraints capacity not the the that constraint raw is isn't you the ability. It then. materials. the or So are having components The

get have to make seems you Asia, increasingly, product. So have to it electricity, then like and to because you with don't the product, the product in have you they the deal store oftentimes plant you shutdowns to then then have ship

were Sorry, Nate, going you in. chime to

supply apparent you're you I I And a so, yes, by are is different across of there's Well, So globally it happening is think what's going look links just those was right? go links owned advantage. industries as too, where this I think really is how different what's because at chain, it. to going actually right? to people, our And

of for our we purchasing I and control think right components. have our the now we factory own that lot a

a In manufacturing. fact, use partner components, a lot we of for control for even when purchasing the our we

tight. stories the And I to about right. benefit. our capacity hear But Throughout going you're you're think is warehouse being chain, supply that so to

be go. of at with may it at trucking, and the tight. I stories capacity you're trucking think is getting supply There why be it cranes be fix. but seeing place You're it going to few now and advantage our why control and like it we certainly goods up Biden quick and is could problem at take And of the be and why needs involved see lot and manage ships and look a hearing port, things some itself I President such, out. with these places a to about a environment pictures these work could When is a this not that we for to being unprecedented. to bottled not The That's to to containerships port our chain factory, the this the factory that's purchasing. with warehousing. think it's this describe and But for time in again have is the own that jumping as in to in stuck

Excellent.

thanks So that. for clarifying

the For side, about particular my from follow-up demand question, I want to talk in gaming.

and I And input? top So gaming? on just if at was widespread have it Can the looks categories. it months? again all like about you had for all, to think impressive XX about well, any very your this growth for able does mean, hands How that year, Xbox consumers on across of the demand talk example, you should aren't their and growth Does that get that? better PlayStations next if new

gaming. when business you broad console steering is refer very every gaming, which is relatively simulation, PC The mostly console gaming of across just segment including is was demand The which to wheels, part small. our

whether on about console they're -- concerned side. too constrained the buying not I'm So

strong okay add of just is so a out it's those coming the console think you you Nate? of in gaming of But gaming is strong I pandemic anything, PlayStation. general out and see And generation worst the think are we'll big people probably demand or how Xbox to tells next still want to pandemic. So Do buying exciting be think that that regardless. positive. I coming I And

on to are the sell. to right I shelf think be points. got all those And you

think why of of It for I be reasons why And you've And I'm part so to through an a companies. sure stores speaking I I'm out the think there. across not there's online interesting share. is or think I’m some your will lot I tightness that strategy. walked again, speaking holiday that's we’ve a part gained goods. looked of Logitech, and local of lot but our

do firms all have And to think what is the that years I to so get make part of shelf. on can big sure during they a

Yes, my questions. not just Thanks January. celebrating the we're right. taking hoping for holiday All in

cards, Gift Tom.

Suisse, Serge. is The next question from Credit

hi. where good morning depends or Yes, on are. afternoon Good you

silver You can’t I'm see know why. only don't shadow. me

have with seen So about beginning times the or is, sales. consumer this very more several been two promos situations visibility also several I the -- equal start the you one over? a will of first months, questions, question, beginning perspective into you should good In better lead sales, to is because a from Christmas addition, to year now out have pointed a because of last investments should point higher in Has first month the of worse quarter? you of but the can give preorder one feeling or us you

but margins, day. do Xbox you this to Of lower also moving has have then at of the course, with the [ph] end

addition, sell-through to therefore clean the and now. So, inventory then -- seems so the was quite low, in channel be

question. in you more don't would quarter my relation going be first guidance? to This next have why into also So, confidence

guidance. I four underlying We the on through. sell start, up. do main rest year. would I'll you double of categories, guess the digit going feel we our That's reconfirmed I and into three confidence grew Nate we can of finish And all our the have we so why say,

So that's indicator. a good very

good really that. feel we So about

I you, And Serge. with agree

in to a a broadly, I in we're good but I which cover air think to and freight have mentioned, but areas of tightness I big into But of some And now but have right go we catching us, don't to at we're level those, good the channel quarter. ones think. have do some items. up is planning again, we do some we spots. holiday on prepared using have to like They ahead lot are a work need

and have match longer current that you you you lead the believe do transit the for quarter because backlog can times? the of But

the backlog. could we think I deliver

we we have? backlog. You're think fulfill backlog the deliver saying Do the can you

Yes.

I we've reality first kind good chain not think year. lived where about supply said they of they the that and to now we're the are. think certainly That's were But I these the challenges. half in I than beginning, we've worse feel a of are with we at immune

where what we're there delivering In our do challenges. good for and QX guidance, continue think a feel to it. to we I have -- terms QX will spot chain need we be about in supply really to of deliver But we'll

to demand? what are little the is this procurement that can't one And the the numbers? and into Zooms, Teams Is I -- growth video the Okay. sales? the see takes still of with you come with companies should And direct how that high subscribers' sure world show successful portfolio? are Is I -- in see in missing your it from Is better probably collaboration, their in Is you're bit why which this this numbers? -- another growth longer puzzled. still it I read I'm it limiting currently? a it it enterprise that Not that customers? not you

and think we all, destocking little I we XX% quarter. Well, bit grew mentioned first had this of we a of

-- So there And is think growth. I

sell yes. On through,

question there's because a is for I a making decision not something happen. time all many done is your long-term there's X% long-term in just rooms companies decision potential, video long-term that a have does penetration, that's growth think yet. at did People long so question of potential how The much enabling ago, we making real so the of much but

go So to and we footprints offices, through and of also their inside there's of know and I thinking a their rethinking things are lot are. there people formats

add Do So anything, both to you I think want in Nate? of play. are those

there, has if Well, I last you in net did compares growth in year for bit in VC was overall will massive. think on decision sell-through double one the of a and making growth lot was the just on EMEA, place EMEA. that's for why both this of even some And and grow sales. the sales the second second year, and slowed. last half sell Americas mentioned net half collaboration. slower slowed will well, and reason video look I'd exceptionally broadly the It say of be And and we are down be in Europe But company do at on and I think true again, as the demand digit some But for we Asia where had the VC is Europe. this, And in in a strong. through

strong. about too to earlier And a it's still coming and I in. think ground So halt it someone mentioned competitors hasn't

I in year. this concerned same is about from think are a they're And wouldn't I seeing last profile the -- we the be things the that is really growth not I'm changes that demand long-term category.

we're the think in as I such. investing we're this for and long-term

Yes.

a Just year so last in point it, grew than QX of collaboration out haven't at looked more throw doubled. XXX%, if to video there you

these doing a Don't great in will get products available That's and me wrong, -- introduced I point. not have job. new think quite are But winter. that you the products many you you mentioned be you

the -- short quite meanwhile winter Now is with

though. winter the for only Not

these increase you this an important? can inflection this believe what it or Yes. is this ship does new pace that be then Do point you mean? when Will But not can the that then products?

most we Well, availability products, products we that our on too. next up. keep are launching now now. We'll we'll launching I and And have of think be products year

that's So, I think no, a inflection don't particular point.

Okay.

the back Thank you time so So for being. I hand much.

Serge. you, Thank Hello, Erik.

Hi, Erik.

are Hi, guys. you? How

Last Morgan Stanley. from Erik question comes from

guys. you, Thank

So Manhattan. -- in I'm if here go based you

you local Would the you on any competitors least Logitech space you have believe -- historically. as or the has than shelf say If not at you'll I go And maybe had And you retail more historically. retailers? some retailer, that you see able to shelf sale? have up. have many your of been comment? might as contributing you see is that's is that I to Have some of with shelf space gain accurate And also with Thanks. point what a of spending higher then to an then follow

say would -- not a I characterization. good Actually not Yes. that's probably

and shelf other people the bring the space pandemic, probably didn't really some to we a lost space. needed fulfill for In supply During lot to e-tailers in of because retailers we have example, demand. just shelf lost we cams, web and

share back where don't the shelf we've I back above we're back, gaining and and probably pre-pandemic. but some we're Now gaining gone space were think we

muted, You're Erik.

Thanks. is right. You’re one you. for this Nate,

from kind about the OpEx it of this essentially? throwing think But the it some same I half quarter of kind degree. we where thinking seasonality again March. about be seen you've to and year the of -- about Should seasonality throw that into generally from following year end the up window know or up trend, Thanks, in you Just out will guys. we're as ends in holiday OpEx perspective, when OpEx out we back the decline window some an think years a sequential

Erik. Thanks,

much it Erik, it lot more before now oriented. because what so than variable marketing of of is is our was a spend

don't kind investments with seasonality opportunities. of not decisions to So there's and looking really see the on even this the We're year. based least as I don't at agree yes, really I'm -- spend we much long-term it where I At you. making I think that way.

I'm I it. about way the so that's think thinking And

Thank great. you. Okay,

Thank Erik. Thanks lot. a you,

was right, think you reading if that our I I'm question, Nicole. last

is. That

that’s I last question. think our

one. with couldn't we before back is Serge No, resist hang He up.

off got to You go mute.

is But on mute. he

Serge, you got get to mute. off

sorry. Yes,

cam. I'm back with on Now my

-- a marketing still money? give spending go you and sales If to to costs. Is sales of incremental in can where back most correctly, video me of gaming. you are costs quickly I mentioned true or that keep direct probably better you this collaboration the feeling remind and Now me your

think don't to it marketing sales I very They're goes all direct in across broad. gaming, R&D No, of it's and or categories. engineering Yes. our sales

pretty So broad. it's

Okay. one, Then hot. market the M&A currently, quite probably is last

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done -- hot of things got didn't a relatively talk in them. M&A year. We're under the them stuff. small, and We've were last stay always It's right looking us. in looking. them market market. were always some in most of the about always now things the Several at relative we're to evaluation strategic going We're for so we've It's the in we for front great And we're forever. and always deployment --

the enjoy Christmas Okay, got Many thanks quarter. it. and

Thanks, Serge.

Thanks, Serge.

Okay.

you. think all like a keep we're our I And this thanks us super last close. for to come. strange we've a thank year -- got pretty to want was tone, know in doing years your quite but that's year questions. it lot a we'll really I year you you that been a were proactively and think managing world this They a great, and see brings again I'm can of year, we about it feel quite all really I the we'll I engine well. We've through But It but humming. that. innovation a feel has to quarter. excited got our next and

Thank you.