Logitech International (LOGI) 25 Oct 222023 Q2 Earnings call transcript

Okay. Good morning, and good afternoon. Thank you, everyone, for joining us. Welcome to Logitech’s Video Call to discuss our Financial Results for the Second Quarter of Fiscal 2023.

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

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

results. on and We’re making and actual discuss we revise obligation will could results any views no financial as materially. undertake update of also our We our differ to these today only of based statements or these non-GAAP statements,

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

be short macroeconomic that Last and geopolitical thanks industry Logitech to story we challenges Nate, and you, the be business. ongoing the continues confidence this volatile. the usual, and Inflation continue the consumer in tepid. we’re world. joining the to to manage in approach Thank as of near-term remains and And is war an committed volume We’ll the to conservatively. issue, innovation, managed appears dollar straightforward strong, a is Despite invest quarter, you, product as for discussed the all the we us. volatility, continues, to impacting

talk innovation. categories love in. We about let’s the we’re First,

and We’re growth we most model. product and year, optimistic in on new in ourselves announced their And many. We the just we about time as our trends, I impressive by strategy ever In everything told, exciting. sheer important that more one than XX. the product existing three history the further they Logitech, the our the investments market. All the never development my been those had past we’ve portfolio. at sets in think of number, Many launches We’ve markets, of this our business new believe so from launched the Logitech. are with of on separate though, over quarter, I you’re don’t XX down. More than products, products more this of the going years, others have is the teams innovative. additive are these increased to seeing investments our results way, in doubling the the world, It’s of

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point. You get the

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no We’re operating doing acutely it. we’re macro mistake, make and normal aware challenges. the we’re times, not of in But

$XXX We that this on XX% focused this discussed by committed or the the can were we expenses by focused the operational operating We’re efficiency. end fiscal What in under we on steps our what first quarter of control. we million to reducing theme. decreased expenses plan, executing quarter, year. a saw you Last plan

that goal. We’re on track meet to

products. year, is relevant a team. to our realigning XX%. serve merged was OpEx organizations portfolio org part of down way, sell coordinated this our efficiency the into in goal leveraging was Logitech’s BXB of operational QX, we on Earlier to And customers The structure. For commercial one a Logitech

products and This audiences, evolved efficiencies, this commercial customer users align at same increases quarter, market we time. and continues our and We better BXB end serve directly new more to group market. operations end cost-effective to users to ways customers, engineering compete look within and our executed will pricing us streamers. the gamers better with plus structure getting structures the of for business to allow Along with team enterprise our operational and targeted our

inflation for gross yet strong see quarter given and not a lower our currency P&L. we’ve flow Our shipping headwinds, to rates started the the and through margin XX.X% was

future. grow us expect be this to why continue And I’m investing the Logitech we’ll will to participate people right that’s of workspaces. in it. will People be and so to People of operate in invest the video will And People will game, near-term create you their ahead, content about calls. our priorities in way. in all in optimistic will Looking while in the our should prudent long-term. middle

they the to about for period over for course time you plans been finance built and will what the a our to Before like a for for new my tells am things in We’ve I call say you’ve and He’s are steps. a that Nate’s to hired of done through. I him board him. for speak for four years. to and have that’s release replacements size few I of grown our CFO. the ever was now these understanding next everything conversations, I’d has about the stay CFO breakdown Logitech’s over aspirations as on this in next pandemic anything can an came place. performance, a Logitech, grateful as And to move to those for important, reasonable regularly an And we team company opportunity. years support and CFO transition about the Nate press few the company. nearly Nate, would Nate nearly worked a turn Nate too. last be amazing that Nate saw on Board for a financial best-in-class his over to the done you, in very job He’s and I say I through the the personal unlike and talk gone twice when

us financial with that, take So quarter’s Nate, through performance? the you can

your thanks Bracken, Thanks, kind and for words.

detail. the In billion. to in net through you were quarter walk X% me $X.XX down more sales Let QX,

consecutive sales was growth down, in third We and the grew Collaboration Devices. improved this Pointing quarter While of Video performance. were year-over-year

as cash by XX% While down million these in in decreased after and rate investment unfavorable were and offset reflecting gaming our down in margins and our use actions in expected being showed prior year. and profit of two was year, continued pricing $XXX and year-to-date was QX. product headwinds nice cost $XX We Operating inflationary versus year-over-year million, capabilities. $XXX partially our freight. three the flow driving points X% quarter currency with flow versus Gross million Cash demand, was up increases our XX.X%. development down unfavorable currency pressures points. freight product QX operations sequential last cost air Versus last from and unfavorable growth, to was lower improvement

quarter Turning to in by the in led categories. product our growth resilience Gaming showed results some racing across wheels.

was grow to up while continues quarter. is XX%. Europe sales Gaming improvement Asia down Gaming marked pressured, QX, and a X%, from Americas last which For remain

net was in nearly great pandemic quarter, higher Master product MX cameras XS. than gaming Lift end the strong China business a and As incredible with down softness It’s somewhat partially share. ergonomic Video any consecutive and although in end Collaboration times X% we were new our remained declined dynamic, Keyboards concert. our about room offset by with the oriented think may last season. XX% in into down And up our and strong the were strong Devices with to new pandemic diversified up dynamic quarter in portfolio and following from in having Combos product of that the and is of in webcams, in much. MX highs. high driven new or so our shape Pointing sell-through which mouse move pressured head decline start market offsetting given down flat quarter, across a We several was more and their keyboard. quarters. PC more pandemic XX%. not we X% holiday sales XX% growth, Europe, peripherals for mechanical our gained webcams webcams & like second growth benefit due a high than quarter. by outperform room offset three solid grew conference portfolio In low webcams, XX%, results than essentially and market this business by as cameras growth. growth pre We its levels. This talked Keyboard Pressure end we were sales driven as our consumer introductions from categories Video conference posted in the peripherals.

This no different. was quarter

that excluding quarter. Russia. of in Gaming Collaboration performance the are Keyboards constant for categories the And Sales X% we’re to combined on Russia. company and of and focus Gaming, the this in currency grew excluding addressing Combos, our we total It’s are the up sales XX% average. what Their Video our secular important work. year-over-year Pointing products of were gross and note net set currency in also So X% constant that sales categories of trends and hybrid Devices, this above year-over-year VC & is margins

and margins. So our biggest grew trends addressing above average categories attractive produced secular

Turning we to sales down most expenses. reduced Consistent XX%. with and the marketing, in notably which expenses, first our was quarter,

design to Bracken And by leadership, quarter, mentioned expenses million versus in we year reduce product our As to that by R&D to meet and X%. we and earlier, increased last category to by development we on committed investing strengthen $XXX remain Last year. our end. spend operating annual we commitment track are committed

$XXX with continue shareholders a buyback the to our as We of quarter. cash which continued balance our approved spend million quarter the organization September, sales. will million. on ended returned align We to with throughout dividend proposed when in we program efficiencies combined with focus finding In distribution, our our shareholders $XXX the our

now confident in quarter. we and ability meet through announced halfway outlook year, the the remain to we are We fiscal our the headwinds, despite last

calls currency to reminder now XXXX dollars down to projects to year down in continued dollar that roughly to growth. Therefore, a our strengthen to in constant U.S. year full be X% X% be a outlook in dollar quarter, As U.S. be X% XX%. outlook revenue revenue headwind five-point would and U.S. full for currency. The for last versus to FY

Much we volatility outcomes, reasonable high non-GAAP the factors the pressure and quarter, of in given pressures. We’ve sustained million range operating you of economy. the nature like be expected pressure and gains holiday $XXX year the incremental intent stronger favorability full logistics a by outlook offset profit Our the last At highly global of normal million, volatile relatively dollar. remains economic revenue and a outlook, throughout a is rates. end provide is the from about potentially assumptions of despite and income efficiency to our between number our to made incremental protracted including cycle. organization with assume $XXX U.S. This currency

While we’ve And decade. at forecast low for pre and questions. the challenging forecast last time aligned a prudent while to Thanks. with continues with worst it of cycles, open level the your assumed the certainty pandemic we a Nate, our with precision the is in end, it’s lift line holiday believe be business in and to reasonable. to generally call maintaining

Thank Bracken. right, you, All great. Nate. Thanks,

And you, thank you. Thank Nate.

Citi. We’ll raise in start please interested with Asiya who those question, For asking a today’s Q&A your virtual from Merchant hand.

Asiya, morning. good

Asiya. Hello,

How Nate. you are guys? you And morning. surprised sad and Good to see leave Best of luck.

you. Thank

et always for callbacks, insights clarity your you thank sharing And and providing on cetera.

a of that gotten. So I’ve couple questions

another is of guys year, are then on question and you may. the about And give release this As this half the if half thinking terms season of in about XQ, any macro or inventory, qualitatively seasonality Can I talked remain you conditions out, especially you know guys the evidence the came of how in calendar the which us back fiscal holiday year. anecdotal back and I volatile XQ? your

ahead declined, a think correct, numbers season. my sequentially holiday I that are declined of if that

some walk were can that Thank would through there you us the of If great? dynamics you. be what

Yes, both you don’t Nate, those. why take

one I cover the bit think Nate little one about we and the quickly. can talked a second first

Sure, yes.

it, seen I I far I the that on as hey, that we end, the the back would can high guess growth of two of But normal or decade. assumed something see. really that you So worst a end, last sequential aligns of we’ve holiday multiple Asiya, low the think as kind it’s with then am over half the pretty ends thinking really the represents lift we’ve And two the about outlook scenarios. like kind year, at said,

two of kind of So ways. about thinking it kind we’re in

in of products. from right, – holiday, think performance you’ll strong normally I see the some of very the some consumer the

the bit And muted in some saw so maybe Video us again, opportunities of consumer a about excited Collaboration because X%. But more we’re in those confidence will grew be this little has for bit little a the you And BXB. been performance weaker. quarter

So spectrum, really and very the diversified a we’ve thinking portfolio. across it got about

came of We the supply there. sequentially. first some those inventory been out build guess yes, all answer have kind alleviate. second because of down disruptions, up of it constraints that’s did on question. The how question, that So starting I the your would are to logistics I some

see to providers reduced some logistics the from think well better benefit we costs performance will starting us second as in We’re half of as that the year.

And that QX. so inventory, should prudently, we’ll further fact in come working down we’ll it down in be do but it

I’ll that. mean, to I Yes, just add

this down quarter, and it bring to was inventory Asiya going though expected we in into even holiday our did. We quarter

on we’re – track. it’s So much right pretty

you. Thank Great.

you. Thank

Thanks, Asiya.

Next question go Chung, Paul JPMorgan. we’ll to

Paul. Hello,

Hey, Paul.

missed. questions, Very and you. my you’ll working Nate taking for nice be thanks Hi, with

Thank you.

on up, expect your et comes And which top on there when here operating in you continued changes, bounce are mentioned profit OpEx structure first just near And on of back Board line a should on some providing trade-offs term? result? any here revenues a kind you So Are cushion some cetera. we areas back? flexibility, focus back in as the OpEx efficiency kind or outlook, cutting of

Let me answer. can jump then in first you Nate, and

Sure.

Overall, Whereas cutting we significantly. we’ll you’d the top markets actually in pulled feel that including pulling keep we’re of back day like, marketing. script, expect search not what are product optimization, areas to are engine Nate us things answer on marketing back? marketing’s And the as top throughout investing. funnel We’re investment, we in we markets, maybe the effective. in, you But different end softer, at certainly about the pretty keep I’ll talked generally of of the funnel that the when as investing maybe really Whereas not business, the growing back know. – development our

ahead, really headline. kind that’s Nate. Go of the so And the

we were were in as about investing growth obviously, I wanted the as if even XXXX in talked and revenue it strong Paul, we were as all more FY very building, where made the agree we of variable conscious if that. a way that we to be fact with FY and XXXX, past mean, you possible, recall, and in Yes. was we investing the sense.

taken or that we’ve And us to expenses has expenses in we’ve action as here helped reduce half. so, first reduce had the to

you’re the before. the some so benefits of execution we strategy seeing talked that And about that of and

are level with I levels our spend at think before. consistent back you had look it really with there historically, of marketing now look the aligning even when kind at we’re we’re we’ve though, sales. that And if you of investment right

back but we’re expansion, on where So we growth you just said thoughtful sense increase change all haven’t very now. us and profit see may start to gross invest being makes if Bracken we I marketing, as more conditions and about investments revenue to see it cut those think And again.

to then or mentioned R&D, you and resonating cadence so, can Were G strength you of releases? talk product the I is relative Got with seeing kind like line think, [ph] of new up, CLOUD, levels. product since Litra, and customers? you what you. And then the kind Thanks. your most are XX from just products of kind follow of commitment Mac XX of about to doubled which the lines keyboards, the

think, Yes, this let try announced products we call. in of I XX in quite quarter. all, QX. we this a I the ahead I to and me, back mentioned launch but record. new do products of that few a first terms And count, was go we really the know, of don’t cadence, mean, in I QX, usually

of is I super sort doing just in cylinders. and about innovation firing all what engine So excited our am we’re

of is, addressable been are need it. think Logi a in other to, that the mentioned ability who’s really anybody call those this about one remote and with a thing of completely you camera, new they new thing that it and products and think had our mean, I lot I The like excited yes, in really example. the about it. script to a I markets. cool I’m Cloud, has answers the that’s I this participants use out products been markets, cool the site, somebody G about, and that. it the back things And of big what stand lately to And is existing good video their feel in

and to them. And so don’t have to, you to you buy have so, wait

buy and can out. You now, just this be them complement will then it comes a when

MX Mac products had excited I’m it’s really cool we Master very Keys So a of version. the have. a high end, about line We and already product. MX

us a brings this point. Now into price lower

really going an keep have to probably So is interesting CLOUD’s to everybody see alternative I And could great. going, experience, can afford it Apple’s how which to to be G really does.

to just at going one that on and keep think, Netflix I eye day an it. look now started we’re category.

we’re services really going be And big first time. I out mobile one really with think the the to a are cloud experience these inside gaming home. over

across super So exciting the board. it’s

Great. Thanks.

Thank you.

Paul. you, Thank

be will Goldman Hey, from question Alex Sachs. Alex. Next Duval,

Hello, Alex.

quick much years. so thanks And conversations ones. the everyone. for couple the Hey, to Nate over A of

decline constant X% currency saw you quarter. in Firstly, organically, the

I at a if midpoint us story just launches? to thinking look is referenced year. full video you if we about How should more minus you the this to bit help product you So And the for [ph] effects get secondly, the dynamic. how wondered a we related of X% conferencing, extent understand about could be at what back-to-office comp that? this, or To

a as Just wondered benefiting what you. about about more should are think extent from you well? you thinking few we Thank How that quarters. to that

take one, Nate? the I don’t last Why

Okay.

one. first the take can you Then

the we’re of really I beginning of at think, the very re-enablement office. seeing an

this common is, to one I one a mean, the work talk know example. – of going an lot of of I non-CIOs think there’s I long there’s gosh, the of questions to how lot CEOs, and interesting is common term? and a most questions we’re most

one in We’re we We’ve have – Cork. in offices office we’ve redone big changed an just in Switzerland. office

into it. just we’re So moving

with work the pandemic at by We’re next happened during caused hybrid becoming Valley. in we work. accelerated changing way offices year Silicon All what’s or least the

a representative, companies. most the of think, of bit on the I pretty front we’re little So curve maybe

bodes we’re are many got rooms workspaces how many well the office, How going companies most you to many us structure the have to How inside then So that I really adjusting do going be size, video? because next we’re rooms going the to I over structure need? a Oh, picture, to for all really really have? years calls, few upgrade going the whole send rethink, surely think And me people call I’ll you I’m are everybody And said, tell on work, change do better what workspace. their many inside. on going at you’ll better upgrade need you this now exactly like I stuff. can home, to that do. they the should thing. those to guarantee I and

it’s So at it’s it’s for good a BXB I us whether in really whole BXB very think the space, a future in looking BXB the office home. or

then Yes, your are question last half think compares the And constant And year, constant half declined half the currency. your of different hit on grew in of In around XX% currency. it second of guidance, of X% half. the last The the second kind I in we year, first we you the Alex. some question. first and in much for

pretty compare it’s big So difference in half-to-half. the year-over-year,

And so reasonable. is year we outlook full think that this

Thank much. you very

you. Thank

Thanks, Alex.

Hey, Bank from Angelov, be Adam. will America. of question Adam Next

Adam. Hello,

Hi, Adam.

me it going? letting on. Thanks for how’s Hey,

of the mentioned. margins inflation points So firstly you headwinds on gross three the and percentage

Just Just there prevent the strategically ease So more peripherals? there probably mentioned shipping on seeing center give and really side, wondering, few G there P&L coming from gaming Why that on the just secondly, much. long-term the these through strategically next see is wouldn’t the into a things on the away of any benefit? component you of yet. this then And to is the kind of a curious Is very anything you of you move you little that? contracts further kind there, quarters? see more the CLOUD, would over shipping’s any not but on Thanks side more teased reason, as like of could kind benefit? bit it

Nate, can expanding first, I’ll the into one. been last is The Yes, years. answer jump systematically one we’ve first XX answer you for then the and categories

another So this category is expansion.

call you said, of the, of Logitech. CEO it’s gaming, argue needless to say, as center you you more into although the on it, the could As

But there the I volume us. I So not the only as for our are they’re things touched products gain. things to really And really keep We launched we’re There last of but that categories. game. opportunities central across addressable center the a new of we’re time, think the expanding Board. are in going think this the you earlier, opportunities said we gaming, market several products

about yes, that. So pretty I’m optimistic

you in to In Adam, to cost some goods of terms the reasons the margin. of of call in of what you the that’s are up cost. want kind I have to buckets, benefits as see and and those two got product begin start cost of wanted but remember, have second got half, logistics the you’ve flow visibility cost, one in big to will before of of that of we Those the give through benefits. to I cost, out why of the inventory sold, to drivers mean you down And we the logistics I is work case some

spot well. the contracts some we’re to on as rate in able although that cases buy is we of it have, Some

of start see believe probably more the favorability get then And that a into I we to earlier. through So next little that of do year, probably logistics will bit see some flow P&L. benefit as

then pieces going to we There’s pricing the Of into keep expect actions got to that decide in become in of of year into it. lot of this moving net-net, more some other we half direction. the course, a those cost and pressures to tailwinds FYXXXX. move back would to I as so you mind always take start may But to

and with points points carefully suggesting, XX The to But high forever. incredible and margin currency and headwinds We of still if currency cost have cost. headwind. listen of Adam, delivered to likely a And gross as points is is I X you’re will you Nate’s last at those of between of script, almost X high. an certainly that’s is one say, neither

think any points XX that So long-term, of points really I deliver fact wouldn’t with is some temporal, the time XX year gross or months excited that. about the frame headwinds about could And something. X that’s commitments I make a I’m pretty margin certainly But next we exciting. and are of that

right? an here, macro is gross think getting right what the right but on mean our I some of our Obviously, point, remain We’re lot you costs. exactly a from time headwinds And the that’s strong. Adam, I a involved power are standpoint, earnings see now there’s a can uncertain Yes. more efficient of margins there.

so those to some but some model. strong going how this And for some there’s to to pressures we margin power have reverse, in it’s cost about long take of assumptions make

you. Thank Great.

Thank you, Adam.

from next will be Our Iffert question Joern from UBS.

Hey, Joern.

Hey, Joern.

for taking thanks my Hi, questions.

from? question would I share BXB also of can success business factor lot. be organization quite Can on APAC go-to-market first operations. you a be The the doing exactly new you is in this you Quite this your group regions? Is be Is If exactly us are the you it coming Bracken, thanks couple would in Where second one details put light it Is helpful. growth would the give gains? and mentioned in pleased important growth? it some on more strategy quarter. changes the and please, engineering. what this, here? And there a are in And category

shorthand, Nate, Yes, kind absolutely. We the take I guess, I’ll last one. did of

one. the first Yes. take You

bring forces one, really fiscal and customers did the year, we doing? So this about? What to BXB talking we Logitech Because two together. one. really that? end all changes set we are So started we at do at of the this wanted are we put what of beginning last quietly sales of as Why to of

reason whether because can mentioned a increasingly aggressively having myosin all workspace you’ve of last oh selling we the about this keyboards. organization conferencing you one could So that we equipment, as The please say, are were in, you one got video commercial people before leave, in we call, room. in – personal talk Logitech, did a I organization, I bringing it’s now or think bringing was we

And workspace mice, call or so whole the underdeveloped personal we as we keyboards market BXB our things. it personal were in in BXB, workspace and and

first that one idea and by thing That the So alignment, what now one changing commercial have was we talk can one we the message step. customer, to is about. of Logitech

to business That this the the didn’t The group here. second changes, that. round was structure driver – we adapt last change of of part to

that directly group. that So organization we interfaces one have with BXB

picture So it’s a of a kind a now. catcher and

overall products That’s the our on is, for and us us work and further to engineering and and We also BXB most move get team, more I software think did our engineering and the things, business. it’s all important hardware time. and centralized We for that make thing services going on now have So together. in of much leverage this of of the on should and thing to that. a do the business But all into we’ve to to further, the that’s buying step give first got further more fact people step couple our stronger efficient. data by more ability the other coming desk names things top one the our hardware the we of all ability one services the software-enabled things to

big Logitech. am changes. the of I set It’s excited So really, a new about chapter really for

by Australia was And China Yes. we a in and question recently, about AP there. it quarter China didn’t really Joern, to performance more offset region, normally, about have but than a answer actually that your talk good lot had Korea. strong as

lot gaming, good performance saw really across like keyboard, just we had the strong portfolio, But quarters. we than and which strength even Australia, video mice, the a Korea say. of that places, we’re So it’s region. across really the all kind collaboration, region, And diversified saw would I very, within the other very of in

was the Australia And may strong I in quarter? ask and why? Korea Why was

you has pandemic in think had by different Well, evolving the way retail and to year at countries back think and so been right? transitions different The prior timing and look got re-openings And into the different that forth. has I again, been places compares. world country, I

we the some introductions over of are the really new about product mean investments and call, on portfolio, I that increasing little We I number have But talked of bit And years. share of had those we’re seeing the some stronger A I from saw a market factors. number was we factors. gains. those the of off a the several I benefits we kicked that. areas. think think this that there’s with just been So think last

lot. Thanks a

Sure.

Thank you, Joern.

Great.

Our Hey will at from Bank. question be Rob next Rob. Deutsche Sanders

Rob. Hey

Rob. Hello,

wondering just noticed just I I wondering I that selling preserve on haven’t And might the if elevated you too to but I channel? was the active been on Or I a the clear Is upcoming follow-up. I so had you season. priority? to regarding will Thanks. front a far, maybe profitability, Hi, promotional change? what’s look inventory? Yes. question mean, have hold it was your

Nate. in Yes, it’s promotional more a little promotional. more QX if just than I that I’ll on because surprised be a jump wouldn’t in QX is always little

great surprising. it real our I we’ve innovation. think And too priority so wouldn’t But got be is

portfolio holiday – lineup so super the going about have QX our beyond feel into and have we and product the and we season the QX beyond, and I the that. So

to are anything need want it. going you sell now that, Do got think Nate? – we our too much. not It’s I really we’ve go what add to need to we sell priorities to So change and to

No.

had that. follow-up. just thanks a I for just had a I quick –

companies because historically, basically kind Just press out of losing look taken wondering share? even most could cetera. because downturns of post advantage know when press stage? you of is lot brand companies us, share kind I you’ve it the was of and flame have to you at if Is remind Thanks. this just a et your it those the money? they start just as lot a kind Or exited, taken of you like previous I have

I’d think our a little gains share differently. I characterize

we’ve think innovated and brand on I building. share because we’ve focused gained really we

with about and to do do was that much influencers and you of done share innovated much have brand and build to gamers market. We we’ve wasn’t at and competition. have consistently Honestly, – really didn’t we’ve If just It relationships every too look a us. didn’t inside what brought to gaming built gained with our year. business, with. It well

typing trends – If how just right. look by see up years, – our and go how the Google and the you you look Search Logitech that’s and to the of over And last way, and headed been much G at too. Logitech, halo you’ll XX if that’s to long

beyond gone that. it’s So

flaming It’s left business. have and very our that So few about competitors it’s generally, or competitors I something out really not been think really about performing. us

I what investments, results accelerated the think of that and that consistently what to a long-term not moving reducing several that’s the mean, our quarter. something a during to have benefits talking want We’ve decisions in on push through just turn strength on right, been pull, you’re while that. investments has made. journey. pandemic just of been you marketing, Yes, making and That’s And the promotion. And our seen over Rob, reliance one about we I and we seeing investments increased for those echo in from you and and I the quarters last

do Exactly. say ourselves on Absolutely we pat If ourselves, great so we point. the bank.

Rob. Thanks,

you, Thank Rob.

is question Stanley. at next Morgan Our Erik from Woodring

Hello, Erik. How are you?

shameless Good – might you. will the missed. on be I work Thank for that that morning, question. used ... to someone maybe will be a it taking you give Thank CFO looking for guys. plug job. sadly be for to a Nate, you might No. you But

out a Seems club to bank have there.

all help. of In Nate, seriousness, thanks all your for

Thanks, Erik.

Maybe a that I’ll these of is you. getting then you fact temporal you just on Because if in to more period. owning gross at see back direct some logistics. inflation, a you at quarter it more your the margins. talked pressure bit of One But comments historically, December two the was headwinds, look about promotional to sequentially,

a I’m shouldn’t this you the and December? type could so reason if then any I walk exist? just takes us quarter any margins if of that wondering of for think And seasonality help follow-up. why least Or at puts gross to us there’s maybe through – have some And about

but to in I here. I know that was have jump for Nate,

headwinds while temporal, they’re hopefully, First, huge temporal, a see change that QX. in you’ll those not are

Yes.

Okay.

now be change down. outlook current one intended of lower-margin or that much mix X%. is of doesn’t really factors mobile why when our our was it Erik. much at Category were up part bigger might categories scaled. margins historically, you another of was Historically, QX gross And one There’s talking assume levels, margins was historically. a a speakers in portfolio. My It’s lot gross

you mix as so bit big consumer went for you have well like did and impacts types as those And events. more into the Friday little Black promotion as of some said, you period a

little lessen I little come think down a bit business QX. But in of typically, mentioned, I little business absolutely customers, shifted a mix here of he’s will the at towards play as to effect still bit. Bracken there’s bit the But more and factors has back our big as right. that margins lots in would portfolio expect half, yes,

in flow but big favorability We and through. not do are a to not predicting to super swing will seeing half. significant believe that I second we’re that be the here happen, that costs in significant assuming that,

And in we question, if a we’re the in too. add, just that’s the And QX ask are. I somebody be because – a it I now, little it I promotional I think more be think just will of think would do world always reality right will

year-to-date, a just converge cash And driver me. a the flow income. the inventory? for out of cash is guys. then year. maybe in about would as that half Thanks guide as Or just Is confidence factors there talk below flow operating guess, for from anything that’s call largely tracking that is of in the eventually it And back you follow-up, the that your The Maybe else you then recovery improvement? those operations I that give of by is year-end. to some

the drivers. in it. capital, will I going basically, Yes, Got That’s going to – is and flow profit be cash think be one inventory, capital. two general, to components. It’s big your big be working your your of working

in a customers loaded levels quarter. in to of again the quarter little see think you’ll the back-end year, customers back repurchase early capital. a adjusting half. back efficiency improvement of half the our some I – lot The working was the started were in bit large in were They as inventory

the we’ll see quarter, sales great collections higher – that AR, So we’ll problems didn’t there, and in little our QX. just so the we from is loaded, see collections this no was finish so QX. Aging all some on collections back-end benefit all of a in

Okay. Thanks, Erik.

you, Erik. Thank

from Serge Hey, will Suisse. Serge. Credit Rotzer, be question Our next

Hello, Serge.

Serge. Hey,

Yes. gentlemen. morning, Good

First question, I have two or three.

more mentioned fiscal will And wondering, is year? products. in margin about be now? And secondly, I’m products QX? impact accretive, products the you new XX for next this no Or dilutive? something what’s or already Are the shelf for these availability important, that these launched even new You

Yes.

diluted. few early products, probably average, neutral. margin it We of are Generally, XX we got say, with are on available. really to are going because few neutral that coming would So later. it a are But them all, accretive site – complementary. they’re is their and announced margin they Logitech’s some – I that We’ve later. got come is first we’ve a of

You it then it drop could set of literally, the it then and system to buy and it all into right the will in to and the a get go, used and ready this it improve experience. room bring table, get up, how overall middle

So that’s that’s an available. not example on

hand, like now. available other the are G other CLOUD On things

generally, So bag. But it’s kind a of available. everything is mixed

it again like or you only G mentioned the And is margin or say only increasing. in dilutive you Or available that volumes mentioned? that. in available, big let’s to the is CLOUD, U.S. take Gaming to accretive the gaming Probably is

we Yes, need we’re to to. We pretty always turn limited brand to it with start. [indiscernible] going production do keep can that limited and because we new try to if then this categories,

Okay.

wheels asked G also portfolio, is high product. high ASP to CLOUD ASP you product, PRO high product. in ASPs ASP or about And to and of our a the things thing one it’s mind, keep Serge, I a site but need is relative the rest – like Racing margin,

things So universal on There’s for software but these you’re in there, on the of a across board, We’ve flip like while. again, it’s a stuff. not just it’s of content lot seeing, working we the not lot value. switch this a been

very So feel about good that. I

you point. said lower And unchanged. increased X% Probably year be you a sales a you left on That’s guidance, higher, but to decreases X%. the from the reported good currency impact will or EBIT minus

if Is upgrade. as the upgrade? like this you guidance So guidance factor this what’s the so? And you’d guidance basically, for it’s Do true? upgrade a see main

organization. out the additional things that briefly two in efficiencies prepared remarks, finding across called my I we’re Yes.

up be that our goods in cost Keep sold. of be billion It So also in in spend COGS. could OpEx. got we’ve $X plus could of mind, in

a teams. me pool some efficiency So especially then spot logistics those come there look see think ocean. do spend big on the on the we’re with to there’s of for we for And of starting rates down, to also,

that pressure. back into the half the into the of we’ll as really second probably will the from so we help year back – QX, the some into And get offset favorability see of that, currency half half

organization? and $XX [Indiscernible] give minus one, us income, Okay. to million. Is Or the all here? last other so continue – new restructuring we this can flavor $XX and in million; quarters? expect some minus to you the should the charge related then And this next

Bracken related is restructuring the changes to went through. org The

company was value wrote on The size, of write-down of if that other investment an out, item and we years that this quarter. you own a that down we life from ago, a the had remember, was that we used books our we to spun

Non-cash.

Non-cash, yes.

Okay, got it. Many thanks.

you, Thanks Thank Serge. you, Serge

Great.

Vontobel. Foeth next Hey, is Michael. at Michael from question Our

Hello, Michael.

Thanks taking Nate, also for And the Hi. for my question. thanks, conversations. all

on me for strategy. left one Just pricing

especially pricing You said already Europe have you’ve much actions how consumers, are squeezed. taken there. some that pricing leeway the do Two you quite One given questions is in with quarter already. in

And of then you gross on on much your offset those headwinds had did sort margin? what’s that? view other pricing that the actually how So actions

let Nate be we I’ll second, remains much do How the that first seen. I’ll answer have? to one. but the I answer leeway think

to remains The increases prices either. Europe response really last to of I and think weren’t and think I raised say, couple a and last we continued we’ve Japan, a of And I would year price times in round, the the a focused seen. challenges, they in it it places. really small couple currency was other be

our pretty products. – the it’s we more think on good I about end high it higher-end feel on

make competitive, it’s up sure the we’re we’ll not On be end, the to to on there. stay going low competitive so going and low to any give end, share

we may a for holding on low the line now. have the if to, little but moderate bit we we’re So end

haven’t We second the round. actually cases seen follow in competitors in most

then hardball. So we raise to, if And always and we have we wait. play

year-over-year. headwinds. offset had the cost pressures got in far we points second your less of I Michael. about gross benefit I SPX of than thus We’ve question, those down of to year-over-year of point help mentioned margins were then pricing from And part a some currency. X those points mentioned X

Well done. Okay. you. Thanks, Thank guys.

And Michael. is Ananda. you, there Thank

Loop. from Ananda Baruah, Ananda

Ananda. Hello,

morning. Good Hey, guys.

I’m around York down I’m in today. the York. street from New all of here you New in New the York or

right? right. this that All minutes get Is right? we’ll back XX after Is ends – let’s call coffee about in. that Well,

Okay.

up gave just goose. You the

more. I do

before have we’ll should you miss hit thanks different can it. we the for question. have hit them good we conversation. at Really Listen, me I yes, call continue cooking. me big the a you should man. the You Hopefully, – enjoyed context. Nate, appreciate really in

different different setting. So context,

So forward back. to I look the call

it just not We’re go yet. letting

to of it making half you question things how we’re maintenance certainly, like that. would spend. we’re the guess, what’s a in guys impact, the visibility interest like is, the of it guidance like commercial like to of Yes. front Yes. still like feels – Understood. normally, commercial context – kind end relative and probably XXX%. seems the at of impact macro my first still like I we’re the the And probably on rate increases we’d of game not sort

So of I would guess get guidance the sort how question in there, but love conviction I’ll of leave to the to relate maintenance. you guys sort the

If Nate. I first, jump could in

range And we right? outcomes. introduced, think have relatively – Nate think I I of Nate when the he a about wide the guidance, range on talked

this So two next reflects person fact accurately going could I who over isn’t on quarters. think this the a predict to can the there – happen call that what’s is who –

Nate? So to feel add – but good. Do a you range, within that, we pretty want to

back Ananda. just I’d And Yes. come diversification, to

Russia. of mentioned bit, those important. sales friend. I four really times call – excluding currency diversification XX% the your I actually a In big of uncertainty, really it’s think I is categories, And grew in little

– And it’s very important. so that’s

think yes, say – that. apology I I to the so

as diversification a I we’ve And think range. helps. Bracken given said, really

mean – quarter, now. It you the hit tracking totally Let you makes helpful. to me guys like sounds – it’s right it’s get I look, expectations maintaining. it I and

And you all previously? remind main guide can were lowered sort us, you when that makes that what What adjustment? the drivers the sense. of was So Nate, of

eye Yes. that not on. keep what increased number and an was And then and impact volatility last of other was of macro things. looked to until the one had We the And currency. have sustained really the a the currency volatility be Two through we in factors quarter. of the all just climate to

really I things. two was So those it think

just to at AID, war all the think way think beginning the I I had March, year the of begun. back

And so like – unfortunately, a there that lot And uncertainty persisted. would has of about there. was what happen obviously,

you Yes. Day like Analyst did actually think days I started, something XX that. it before like your

that. like Something

for Bracken. you listen, I’ll coffee for. appreciate me, it I’ll Bracken, shops, get guys. here your I I’ll Cool. you shoot see it. That’s

I’m I’m actually yes, in coffee. I’m close, for New here Ananda, for – of you ready York any in here.

it. Got

Let’s do it.

Let’s do it.

all. you Thank

Bracken Okay. and for morning. questions that this Nate, wrap a to on be looks

Well, thanks, and right. next quarter. All everyone, we’ll you see

Thanks a lot.

See you there.