Logitech International (LOGI) 2 May 232023 Q4 Earnings call transcript

Good morning and good afternoon. Welcome to Logitech's video call to discuss our financial results for the fourth quarter and full year of fiscal 2023.

Joining us today are Bracken Darrell, our President and CEO; and Chuck Boynton, our CFO.

As a reminder, during this call, we will make forward-looking statements, including with respect to future operating results under the safe harbor of the Private Securities Litigation Reform Act of 1995. We're making these statements based on our views only as of today.

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

will results. financial discuss We non-GAAP also

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

you, a Thank from really of This us. joining York. New joining for is I you am call. Today, you Thanks hybrid Nat. all

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enterprises and consumer 'XX of raising lower, continue. remains are that macroeconomic year Central of overall overview our year, days remains results over. inflation, year demand outlook tepid. half our our our all we're picture, confidence to geopolitical ended first cover big provided we the 'XX impacted fiscal combat Chuck So rates outlook latest And and the this the year within really ago, for issues unchanged. Most will remains we business for an and and fiscal the about outlook. fiscal from XX the banks of coming details. But

lead levels normalizing, a I bag. of rates, chains are look and pre-pandemic weakening levels. Promotional appear on to are There signs. mixed past. it's impacting problem are business, are be thankfully, at The shipping and expedited directly shipping times our nearing a dollars As positive more our reliance that factors supply the

the to return way in continue, demand refresh And However, were continues cycles companies industry we're the office that pandemic. to the products uncertain. high handle in for layoffs during not yet kick seeing be

product and last conflicting and we and bias adapting our the created throughout our business speed towards logistics us. something organization manufacturing that an we new low customer To cycles, quickly As our and needs design meet fluidly we're opportunity to these signals faster with We economic evolving now. supply quarter, pandemic environment when the is And has for a conservatively. Adjusting to said business not to is reshape face chain, meeting visibility decision-making, market. nimble challenges. adopted our market more improving managing

number number record launches on is scale innovation, key full a is the cylinders. engine XXX this the it latest over that takes in for to closed demonstrates while teams our a And Snowflake, as multiple We year ended fiscal well new industries a as the in with So solid position, closed QX meaningful XX commitment we design of fourth of acknowledging deals. to example, and product these and a while sales for won We one 'XX. released customer products it's government headwinds, Innovation contracts. alone. in XX the awards. The macro firing we business quarter time of representing education and number year, all

commitment sustainability absolutely is Our to unwavering.

for a to reduced operating of XX% percentage equally of believe reality. expenses were now have year. the I nearly our company bigger, with revenue in near this no the labels. level. We we carbon Revenue products down reductions quickly other size fact, match decline or In our there's on basis OpEx

behind in it's from learn growth Day, Analyst past, time our say disappointing. business doing. were But a results always at and our quarter last trends, forward, fiscal myself, we as line I 'XX heels, markets, indicated I strategy We the and to As have Investor to year that's to and move the model long-term what exactly remain and place. but committed we're our draw

us manner over should the business consistent you in operate ahead, we've to quarters. demonstrated disciplined what a expect with the last looking So few

We will market. with in our invest expenses product continue We'll continue to adjust line development. to in the

refine plans go-to-market a and durable video trends mice new confident have We always to we've creation of -- that to will capabilities. I'm come. the and improve keyboards resized gaming everywhere, it, 'XX the whole highlighting, year across work of line the fiscal engineering. product I quickly sharpened times series we the in we and a and design-led remaining new ours, and the or continue focus. as explosion of whole to And fashion methodical products drive Challenging definitely your hybrid to year committed keystone think in gaming, growth. and content sharpen quarters introduce of our while and prudent of global a been innovation video business, big will collaboration our -- in fiscal 'XX

huge the that confident This create cycle world. ahead. to that carbon this be we're of our turn love move out point that for it we I've like said before, for Chuck. help taken now including a appropriate but XX% final said I an the is We'd growth economic and steps but trying labeling. competitors advantage products I'd exit One repeating. are chance to could advance competitive the deal point to load We to as over Logitech it to labeling. our others, here. match for deal spring little we've even I this include categories not bigger before carbon it a to earlier

labels you be world. Carbon I'll the of move you have hand faster with them for Chuck big interacting products I time that, own, our And With I I'd can to ahead carbon calorie. over investors, color and I Chuck, on impact, notice of including analysts provide will bring felt a wore labeling. company, one. jacket. to so you're additional our so that about fiscal competitors, carbon consumers, We for your that the year ask pressure approach customers and next listening, can to So an some this any their from can Chuck? much those 'XX you betterment ask it our please, and all that results. want down the you. competition to and my levels. -- much QX and new on for drive

not jacket we're until don't have hope said we You so calls. And have long. I in growth, to a wear I you the to it's like earnings jacket,

you, great, you joining you Bracken. look Well, call Well, today. I all and our appreciate thank

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mouse house Brio XK today So a I'm the our and Logidock my keyboard. in webcam, and using calling MX from Series

our office in Jose. in be should San we new quarter, Next

me and detail. year quarter let fourth into in delve the Now greater full

Our QX with Analyst outlook we the and shared full year results were our in in March. during Day line revised

currency in sales declined $XXX by XX% net quarter, to million. the For constant

currency video full with cost sales line net in continued categories in XXX year-over-year improved creativity the throughout or inflation-driven QX, fiscal for were sequentially. In in gross 'XX. year, pressure to and gross with and were XX.X% XX% XX.X%, with while XX% decreasing line steady product pressured were either in margins down the For slowdown our increases year Margins due mix. unfavorable gaming points movements, down down compared to were basis held simulation, $X.X to year, results margins the year a productivity down to -- and were expectations, due and expectations performance, XX% Examining billion. category collaboration our our to

our $XX 'XX, in to fiscal continuing costs QX by both we expenses. gross while for As pressure, exchange to was We we flow operating million product the reductions lower million in operating year initiatives enterprise reflected weakening and the Cash capabilities. million and QX and transition from contribute income the the rate improved full in anticipate the was invest to offset judiciously lower year. and dollar-euro operations $XXX reduced selling demand over year year. Operating U.S. Operating to full manufacturing the margins. expenses income for million quarter $XXX in partially year and gross margin $XXX and in innovation,

one, we a Our run over in address outlined of Notably, 'XX by billion. on-hand ending reduced March, cash X two, to returned conversion our million our shareholders intentions and billion. inventory improve our dividend rate of payment. In to inventory; quickly program was and $X operating share a opportunities: $XXX to optimizing year channel reducing repurchase cycle expenses fiscal balance through total and cash we $X.X

Although less biggest plans, we passed report these pleased I'm inventory fronts. our I'm both X the on quarter momentum since the was consecutive presented year. months to the on-hand than QX strong fourth encouraged have reduction of seeing for by that the down with

quarter. inventory or reducing year of is so to the the year improve Furthermore, before continuously better. to inventory to to the keep we X the goal build half December first plan in or turns Our normal channel the over next

for economics believe we during channel we Day, As chain. partners inventory better and value in lower on-net mentioned and provide our Analyst the us

billion, expecting outlook XX% we maintaining fiscal dollars. approximately revenue $X.X HX year to prior March, are 'XX We $X.X the XX% of compared down U.S. to year in the to in provided billion

be now can line million income open approximately questions. Our the expected corresponding operating we $XXX and to $XXX Nate, million, XX% between XX%. is down for to

Paul comes [Operator Instructions] from Chung at First question JPMorgan.

and next should we on XQ move impact drove easing about we bit, headwinds. and see would half. first how And kind do variables mix come may What and D.C. as on improvement the easing chain have a think driven there? which be So at margins, of kind gross least supply margins, impact have of better First you some for those gaming there. temporary? the What gross up, the pressures as has would know into year, I in there down thought

want you do Chuck, Okay. take that one? to

Yes, certainly. Paul. Thank you,

the in costs. the of in reduction to model The mix identified minor we longer compared the a over it I through. forward, roughly as see for flows charges. and margins costs with the line Operations same with next lower that issue operating won't -- XXs did tailwinds turns, FX, of long-term have inventory phenomenal looking not overall kind XX We quarter Our to expect of we we charges. team reducing On job some QX with remarks. And inventory term, expectations. obviously, see cost the QX, that be were until to did benefit time. our as But quarter prepared we inventory in low --

the success kind And opportunity seeing which Where per Okay. us when and conference increasing, rooms? size Great. prepared typical you're has of mentioned volume help do remarks, go the kind second, you both Can rooms? ASP VC, can that your most you you which expand peripherals comes great. ASP conference the to is of in then room on been back think in

Yes.

a So increase room. I there's per the of just to lot ASP about thing cool room is our business think model continue the to

it's And site, announced it's for think of which seen, of be you most and it, another -- which room. soon basically all you seen about peripheral we If going something to have about out. -- have just called you is the

You of you've you rally add bar, meeting. mini, rally get the that a got and an into suddenly bar table middle the equitable

So that's example. an

white a got $X,XXX boards, also unit. You've at which

suddenly You into participant. board kind board drop camera, of a conference room and a -- you're your whatever can using a becomes white white

of we to room. per ways So increase have the value lots

we it's we're people exactly are completely lagging we're enablement optimistic of their a office, haven't another very one through video good come quite very to do ASPs term of the up. Any number not We're that long going be doing really lot economic the the companies, but enabled through a heads what I'm doing to it, example. new lot yet." We're us they minimum decided doing but saying, office, all later. but really because I'm a lot where they're high all do or saving to will And get saying, number. period "I'm kind they're rooms are know not too office. sure companies they're to a closing but be We So office scratching with a are that we're go to then this of or of what current current the people, going sure continues from people what the opening cycle, -- money other they're can either this a standpoint, of they're going not got of just

not I'm is enablement idea. bad a It's rooms anybody So timing. gosh, of just hearing say, video

And conference great won sizing what food that this I of add, tech the giants. about would think, penetration. with some at large we Certainly, company, million is talked approximately seeing, one Analyst just XX% I Day the roughly you're XX quarter, deals mentioned Bracken, rooms we've a Bracken market is

to tend they So purchases we're with winning rooms upfront reoutfit lots They deals. additional their of over be time. smaller as

growth So long provide it's on we're long bullish for These video I category. a term. and new term, great fuel think, additional products, will

a growing, service package you said, it's getting It's decent really to will going One you today, we day, Paul, was growing, other I and goes one I time revenue. pretty rapidly. service. that growing it's be with mention, And small ought Select. and it's a every buy they service a really didn't our to it's but the rapidly. called business thing room, for us very like And think chunk our it. And growing of be keep

Alex Duval Goldman is Up from Sachs.

strong linked more to a year? be PC much control possibility a 'XX? could forward? PC done. been such wondered suppliers, be a appreciated. quarter of Any rate OpEx versus asking job in expect run extent of revenues fourth there, second stabilizing on your this controlling cost reductions new of have Curious think I PC the how the Firstly, year done color investors have just can much very recovery? a some indicative Should from OpEx about fiscal demand secondly, And fiscal you could which we there what further fiscal Or benefit indicated is half very that. going

I'll and feel just touch you clean didn't like cover. you whatever can on I each up then, Chuck, one

we've to billion headed. get our to $X we're of the think been half first get that's and we and where OpEx half past this into clear on we rate as latter year. want the I that super run

we our we'll quite want not current where rate be but is no, yet, get So run to there.

our clear on been we've second, driver is your we category question, peripheral kind The not business. PC the linked think as second of of pretty that

which of of what's on in peripherals. kind spending people probably one business, PCs, is in if However, cutting that also if -- on especially happening way, BXB probably indicative the it are is they're spending

guiding the year half So some not yes, We'll back I relationship. think what We're there's yet. of see happens.

to either you feel on call. do want continue Chuck, We really to visibility those? the to of add like there, What is one hard

in We would the finished just by of with $XXX side. this get quarter end back on in million the a add to OpEx. to Yes. our I million is the And OpEx $XXX plan year. quarter

which And -- are FX, headwinds already down, some benefit little so quarter the I the -- every we'll there come is are each -- and bit we're is completed but headwind. a an of of see until numbers think, middle with of company, But mostly back up the half overall the the so there OpEx reductions part and year. the a on to

Citi. Next question is from Asiya Merchant at

hear can you Hopefully, me.

So a quick question on gross margins.

the versus on promotions in provided a some FX past, kind have affected year-on-year inflation I how guys think breakdown sequential have versus basis. of on you a of margins or even

for you So weakens exercise improve as if should costs. of the through you and then the that mentioned go and quarter. manufacturing I March inventories here lower could rightsized ahead, And look Chuck flow-through margin the that as dollar heard

then question. the So year, secondly,. first my happen we what 'XX? for, should headwind let's kind the expect unwinds we say, the to for And in That's of a even first fiscal those of how most half first of expect should throughout that

you stop there. me Let

at Let correct if basis transportation, couple And been we about I for XXX so really me we've there me can was few it. -- a wrong, were points then drabs, that cetera. Chuck, currency time let's points inflation, basis you'll and a and think hundred drips a of but et other answer on focus points on I'm XXX it basis saying one

we would, And add it that, time. I has long takes than liked way want pretty just got through anything sitting more you our think we've It's before. its Chuck? inventory, which Do have through coming were inventory on we through. work it is would cycle to slowly. all a as that and to coming to inventory And

Yes.

charges of that's a year-over-year points sequentially, and were of And couple basis Sequentially, a view. a inventory hundred that's sort was mix think hundred. of couple yes, I good.

it's costs, think So are FX, hard I are I ones those think, improvement all predict, -- year. sequential see throughout slowly mix, should to but the and inventory we transitory,

Sorry to interrupt...

effect understand of my that's -- Is trying Promotions goes -- what that second competitive to been? No, a kind the there of are people just was any competitive The fine question. dynamics. -- promotions there into have effect

guess, Europe about being well they from in heard in soft. had talked that I gaming gaming. GN, Jabra We You done

So can gaming side as see increased talk here you bit affecting dynamics, the maybe margins, an about it's on broadly competitive year progresses? and competitive intensity that both how little the a you just whether there's the and if easing been

First, category me difference. let -- but don't their quite I earnings to simply I between know hunch, them is well have know, a enough and difference us the

a huge number business, So and in simulation ago year have we we have info. big simulation the a

we So losing gaming. share we're certainly in think don't

do want it's think you comparable that. I So take Yes. to anything Chuck, probably

do. Yes. I

in sort activity sort of to bit QX, back QX. went in of in normal promotional of That headwind to Competitive a back normal QX. a So was positioning.

we in I great feel think gaming.

our businesses -- were very business gaming theirs very, much is. larger than Our

you categories, like with it's when kind was terrific have different the compare promotional they're quarter-over-quarter December the that's So that simulation a bump the quarter an ago. categories we -- down category in, from not of given year margins. That great

right. All Okay.

And competitive HP are VC, trying of Polly, competition channel. in this kind going like forward, gaming, -- is the whether seeing so to whether back normal so inventory the we intensity and as reduce inventory there digestion we isn't just has promo going hunt to excessive with it's to are it's happened,

don't... I

Yes, go Chuck. ahead,

is not as The the consumer as BXB side sensitive price side.

category video I So The industry very participants have are margins rationally. behaving don't the terrific price is the think sensitive. been and

really around a that's the going corporate more, and down kind taking with is conference business kind off not room think, that's But so it's and buyers. or medium economy conference I growing, of really happening really this the not just stable. It's general issue And but of uncertainty either. large overall

what think Other cams, good, like will uncertainty really I early web I the more sensitivity. come see more you that indicators areas think the but overall that's think price look just I So back.

Yes. adjust we areas little but got And now we've where heavier, they to like we bring -- down pricing really pricing need be a always do a feel and surgical. to bit little we tend

we're -- to the and that's overall, continue competition don't big it of to our happen. giving there's so like you me coming wave to promotion think here, scare And feel going dynamics going a intensity not of I But without right I feel price I like through that's the specifics now. change -- doesn't business. is

Next on from Stanley. line is Morgan the Erik Woodring

picture share is visibility channel? Is some today? you question comments Is Can appreciate very the the in Bracken, maybe it impact just if uncertainty spending today. about is why limited limited more that I that all it is, you and I Is visibility maybe bigger clear could that a of and above. the the you're the patterns? less ask macro of conditions, the it fact

If that just periods, on have perhaps historical you us today into versus why less understand double click visibility business. just could you the help to

-- That's way the phrased -- the in. only a it's environment question. great just a It's really it. the like we're I hard see. little It's just you economic to

don't for go you're been think when. will X down you X us it's I now going a will And We direction You change. balance. hard think just up I change. we've And it think to really of question know to when actually quarters. for or It's that until judge

in your that I the data we're I it were where especially cetera. this an just was really I it's like some a that which I more the why lot have of feeling seeing, with people, HR that They're feeling And my control to the side, this think spend conservatively, on companies companies really -- and they're are et pretty a just We're strong mean of got I when the it's CEOs, in of is PC smaller was event and mid-sized week reinforced easiest is are it. trouble. cost, and -- conservatism there conservatively. And kind just okay. tend that that's spending So bunch -- you -- feeling it. not over you BXB

turn, to Eric. say just it for really really it's when it's will. it So but will that, hard me And

see for try You could cycles and decided and and then quarter-by-quarter. we do and X guide wait and months at be to probably something, just go just look more to economic back conservative but

Okay. And out historically. to because some you necessarily I but question which That's feel second you guess like the elaborated then don't helpful. quarter, kind I of do you called it, deals guys this

movers? I You they small, Or you mentioned Chuck, ago. you in days these know, you currently your Are the because Snowflake, another Chuck, mostly guidance? an this one. you wasn't XX business? into these start is Are you XX give us sight so understanding? or just just VC I but incremental much Can they mentioned how mentioned announced sure of embedded are them, line needle had

would if those could of share they're elaborate whether just not, the you you So then products could deals, any again, or that incremental and the impact on helpful. on color be

jump Chuck, you I'll in, can add.

really we you once out should the we some just customers. while, a think in what, I call felt of like, know

to you lot did that permission ask a food their the talk the don't you've they're reason. Chuck? are whatever the We much our say to you would get add are don't get company. pretty We feel plan. There this logos us many needle they game Snowflake go for we they about others. them. said. not time. logos. just but of I want We don't already But of part big It's a to want So anything for that mention talked are movers they're publicly usually Do overall expectations in relative movers, not about to. needle what There

company. do. is the Yes, you thing Eric, key win I to the want

Now use vendors. multiple many companies

exclusive, keep account, upfront, win other period to and you and buying of but years. smaller if deal more So it's more and over they're like be tends a not they it a more the then

us, are and they for capability. that really, -- account bear we're think out to want are good what come. BXB transaction this will a years expand. call just investment for can they've one of signs I job because building it no that's organization mover sales us. I fruit to really done And our It's we've good strategic a is out a key but ultimately, looking for. won that for and So And land we needle they the really just

a to And add, was York in with They large really interesting. offices your I it's manufacturing And could if I Chuck. this just here us point, small very week. in just New companies started

So by very and stuff, small the ago. they every now us has way. X it's room incredible an our with have And about years single office,

just that's and want so you our land of to where expand. really And kind game plan

follow could tell one's -- I just Chuck, up one for question, with If last this you.

us to of Just March last Can me. few back margins indicate from understand on gross over from we help give expand pieces June If go we in the you of have sequential And hear pieces more March June. gross a some kind might maybe comments for March margins. margins gross help X into I more The moving that's and from there? compression into just you -- years, June. look from seen direction to other they to directionality of the influential us the it the and us seem

yes. providing We're Yes, June. Thank detailed guidance you, for not Eric.

down We're state sort transitory We now. the let's over say, of significantly. this in would term. longer channel I right inventory look brought So

like inventory We're revenue it and that, down reducing taking gross QX, my you're inventory you absorbing math down if overall overall seasonality XX% it's more works going at go have we outlined I QX, you think XX% expands, then Day, channel I we the brought think QX, and for and QX channel about being profile before sort builds in bigger it's QX QX, company back The such inventory and QX, and take QX. that quarters our into we you with to actually when think benefit. margins. And XX% is of it -- hurts So and channel Analyst down. that a this QX that overhead, XX% continue if look, to of with suppressed of if that

headwind look of to of back The no year I I the QX, it's QX, be and to say, But so. we some inventory one been to say, and do over or And real think better at but normal. it's can't currency year, certainly, back can we normal. expect last are So It do now. not I items, QX predict those the end hey, like charges, us think tailwind a half be just rates, those looks going the -- turning, a I to by June of that that's sure. of getting quarter, I'm the back but

Our next is question from at Ananda Luke.

in if Yes.A of could seasonality, inventory I December could meaningfully? mean, think guess there, in follow-up. impact And that do the with I right would the seasonality down a I September, be comments that then right I could. Chuck, Or remains worked couple you now, impact around where sort quarter the your needed? to stick businesses quick we just is inventory have really where be

is Yes. I levels is I chain view lean overall, sort I a our for better where mean, philosophy feel that -- with are. everyone. supply just comfortable our a inventory of is

about If you think think return I invested capital, metric. as is the ultimate

less inventory, channel economics better If everyone. less it's for on you have inventory,

Black the hand like a have bit are channel. But quarter, leaner seasonality us into for we'd Christmas Friday course, normal the operating period. of to channel the you December returns get better within on think that I will that that of because for our while model, little because weeks the rebuild inventory and the So be to

So and overall, today even regardless. unit I the they will where But QX, think comfortable economics. we're believe that happen levels I it's to with we are were down where take because just them in better want

the where me. guess in And you altering actually, that in. mentioned cycles you think the yet all beginning guys the just return offices at a it all. could kicked structural trends are key Anything of part off yet. when nature Bracken, remarks, not refresh certain like that, that. I -- I kicking kind underpins are the prepared to in they think you, just of in that the sort you for It's for on eventually cycle? That's then, haven't has really you cuff seeing will helpful. And kind kick that of refresh appreciate of is some good you as And seeing of

you. thank Yes,

keyboards seeing which On in that and and the mice refresh in not We're sitting thing not really think and yet workspace. kick a is yet, it for I of even personal we're cycle, gaming. kind the

I years. us, those think of that's to X probably X are cycles So ahead

we'll longer. it categories a are of probably some the little So see some are faster,

I On mean, changed. got and nature have in much many see in video. We've I it's the if that's the an of don't not video. sitting structural sitting have to now really hallway, offices now one our I such anything down I'm the office just a do opportunity, amazing I'm how these does walk I it's same. think pretty the of me But

nothing I obvious think more has a but to required. So more that's that make just people hybrid done reality. work and And

think has need think -- don't home really think office or or changed. changed for think gaming what I I I don't reality creating it. has don't I so that's upgrade the has at and streaming all. to changed a the of

don't I changed our fundamentally the structurally in that's category really view opportunities. of anything see So

from is Next Adam line in a Angelo of Bank America.

Yes.

for follow So one margins to firstly, -- on you back just answered Gross long-term that. what back to question. guidance quick to you on the quickly Chuck up mean just Just a normal previous a range? very to did

a -- there to it's get I it still possible tends gross Yes. because be strong quarter. really year. peak generally this we is QX margins

our think the But typically that in my -- big QX seasonality. that But run think possible historically, year, given just certainly, best -- at a such QX that that's XX%, annually can't we've XX% it's rate being into quarter there but about just I So really to if I volume. QX look I of quarter, big, you you margins because think predict it's structurally quite is it's very to next kind if probably high QX that. been guess, due

Got it. That's helpful.

sequential curious that the to on And you in rest quarter? how So expect the there look you improvement would next, think there? what as any into just Was perhaps saw year, China you the in I develop? of

try Chuck, to in. to going I'm feel you that one, free jump

is until for right China just to think now, been I a little harder usually consistently of honest. kind be the It's me right. to judge up

not there. as been is competitive much opened choppy last I but kind over of think year. would It's it's like. highly It the as you up

great. are I be. not quite confident think to where But longer used I in the dynamics in feel where it's So China of it back sort term, very

a world is more it's and and more the an where bigger, moving such kind workers. And imagine me population. you. more China. you of and become probably Everybody obvious up in a dynamic can to young IT It's and workforce, there's workforce environment healthier, to in the got knowledge into You've obvious moving

about excited So I'm long really term.

a market have great brand brand across there. that's businesses. strong our X incredibly really I We there, consumer a mean great And shares. both

in never On to in that if it's to categories. there been for does differently. And strong visibility there. But as quite back term I eventually company just, the got like see in but of see our China anything don't for year really gets overall, it's some the reason, for have it's tend long don't happen But some be, for to is the dynamics collaboration video it it me more in really China. the developed call, in particularly, just know. China, general strength side, -- for the I don't gusto. We'll It's hard half I

Yes.

down year-over-year was It a in QX QX China, was I quarter. QX, though it relates down think tough XX% were were -- down X% we year-over-year. we as to

like So China. recovery it in looks a

side best-selling the gaming but SKUs, tough to China crack, are As enormous. one, the just products opportunity a just on that our on in Bracken there's but so nut video, market mentioned, a is huge top it's the

so a I it position with to things there good year-over-year. think relates in stabilizing as And we're volumes

much conference differently the big in I because elsewhere do smaller. in China video service same have as And than partner They're do are we they in players not, think, big are players not China. we video

think just if improved. can curious that maybe it behavior But you're on bit equally to gotten could squeeze hasn't Okay. but customers, just That's great. touched one you from but worse, go sounds in hasn't know, in it if I the seeing just And into little like briefly, it enterprise I detail. more you the more a

of I some news, about would impact it all as which think it the like you months. may the big it's layoffs, extent, of -- spread -- is I driples company know, was, but The stable. X tech, news think me. some you continues, it. in to shock the out, captured on over much be to And it's doesn't layoff pretty where news X the think kind but in all seems of as at to almost way as way that really it's It's say sectors, least banking. in other I I X kind it kind especially also out, almost the really

So fall I quarters, turn. but will continue it few to will Domino's think another that those for now

Our next question is from George Wang at Barclays.

maybe of or on the Chuck, forward, of color on Just with kind any inventory color of better more cash forward. if back the you can on especially given coming have dividend you give capital just backdrop, profile? kind kind going cost curious flow return some going of buyback tailwinds better

of over year. a years. quarter. just had last to We accomplish able we're to shareholders what proud we've capital on We great cash had great really been cash a returning Yes, the few

year-over-year, our billion, year-over-year. balance If now $X.XX cash you is it $X.XX It's at down billion. look

I ended roughly million returned $X.X we shareholders. at we about billion and think year $X.X last billion to or $XXX

great. So that has been

stated though, objective, primary Our before, is growth. we've as

buy use we shareholders or our so to that buybacks. companies pay back we as cash plan well that via to -- a And then to extent don't we the to as and we great return expand, dividend

I maybe want Are the terms Bracken, prepared some months? the a you remarks, your of gains the follow-up. any quick of you category. comment gains few on in last gaming share gains. Okay. out the In you of category other within on can notable cloud kind in share kind there share called have

have individual we're been that's to through categories. in why our and consistent few won't And up so bobbles key and category. I've months, And and of why innovation we'll our quarter that the were that's year, categories. our so we've it's -- years consistently wide XX here, the very gains spread down, single function design-led we're go a investing. share gains sometimes Across most But or we've on -- of almost and we're I see can share XX across and gained a share Within the every engine. those design any you really over focused engineering,

Rotzer Credit Suisse. is at Our Serge from next question

simple Well, questions. X

also is question impact, due impact feeling impact competition flavor in also volume gaming, XX% to you And first The is you price promotions, how you -- enterprise and were that? a in more down to due conference. business. XX%, price in on Can can me the is much XX% and in how but your a give me give much sales

more are the volume. -- we'd promoting year-over-year has a normal. changes returned primarily We than to little It's expected Certainly. were in QX that

primarily volumes So year-over-year. it's

Any increase product have categories able you prices or to increase where volume? to been

been increased bright in spots. number There have We of categories. prices a some

different the seeing, lots Certainly, -- our products, growing, year-over-year many have many spot. many, of many secular bright SKUs, a -- you're tablets and we many but been there's the comps. have that them Some are are of accessories there of that trends

-- to start comps results. and to it As year, will lap you year-over-year the we better and our we'll this easier think as throughout I QX relates see

And for -- look Okay. do Fair over direct Market months At the switch half. Day, X% And and X question. guys, the Capital in second enough. sales. hey, probably to to second X you obviously, mentioned months in second first in seasonality the sales it's quarters at of us, X% the you [indiscernible]

the we wondering, you have X first also past, EBIT EBIT. months. I'm the XX% Now the in seasonality in In of did a

and take is in when your of XX% the to This second the below what year, this for guidance, clearly we And at So the $XXX level and do midpoint half. are at I full up consensus sum and million. you had basically, the expectation.

much months? are the first second X Or you for Now ambitious I'm more you more for X the cautions months? to wondering, are

the is seeing is a you're on stage. Well, transitional profile

coming out, are we think down. will manifest we're benefits that costs seeing into expenses gross taking some operating margins. and We're So

And optimistic quarter, in our to stage frankly, now know. annual return we're term. quite right so that It's provide here too at of We not providing transitional because, guidance the quarter a just you're to biggest year color early December we We the putting don't back Certainly, We're that. do this QX this in pressure seeing sitting hope outlook be point over in to QX. that near more to the to profile and on will half the time. that plan is May. early strong just

contribution gross is product? the still to second the improve honest, But in Is margin, this success highest be your in it you profit to because correct margin half, EBIT need VC. your

talked Well, certainly, categories if what predict the seasonal. mix. about. It's you additional the tailwind, generally hard with videoconference that's mix really that will less to tell improves, an the I are will happen BXB we

to we're think guidance back and that's get the quarter the parts expect it providing see the I of will I business due QX you'll But does have we to year. if return great, targets. in -- the of So our video to to. mix the But it not think other just for We seasonality. up not does, more half to

Probably still the last one.

but minus VC stable, mentioned down quarter-over-quarter was see You we XX%.

do mean you when is were down something what XX%. So stable by

good Yes, question. that's a

next So going quarter. show to categories we're realign we the that you

the So to out we're detail in going you'll businesses. break a see bit more quarterly

to what consumer, have and So some the and seen we're some across And and professional been in fairly business significant category, the video declines. in those there. the board, webcams have referring have that's room whereas stable, we other solutions business, solutions webcams to.

because for that Yes, you be I our that think it people. we will realignment I'm can't -- glad will I until Chuck, it wait I because that, said do things think

Great.

at Our next Muller question is from ZKB. Andreas

-- help one in point. have going Windows on that's XX, to at you some I if

of but with PC some sales, with ways product course, product that not new a operating coming will strong, from that correlation this some in. this in help system mentioned You much your perspective that is innovations you

from near My the vibrant. experience standpoint the kind is of then with term, just Windows them they industry ignore they're PC the long term keep volume and good for upgrades a because

integrated our So it Windows about are always thing overall products a now. upgrades. sure But with the that's thinking will be well users. I'm it we're good latest for kind good way of And the

it's So good to of But there. in that. significantly going be to I we're expect going wouldn't -- shape changed because anything

... your And Okay. then

thing. one would I other add

well improvement bigger Apple MAC the we've the seen we've I because and the of last work change happened with really that's year, think potential is our and with made that. business out significant and really there products over

up. conservative and clients you that the competitors, to has helped does or you're productivity in more of position also sort I cash-rich far your Because towards that next tied once when I was the That's ... right DPOs if company And by question, discuss banks is and categories saw ways? or helpful mean change some over times wondering, now. Then went financing can

But Chuck support I'll in the Let let that because I'm needed need me we we just a relationships tough will I day, banks. the be good cash we're say, ever the we're from times. much. it's change really But need it. said, for leverage also banking the in. really very a in think end you on not kind sure as but try don't too answer generator. do much it don't much company, comforting have didn't cash-rich not -- we're jump dependent to at and I probably great changed of of really we We anything event so briefly to us --

for and ways generator, expect to grow be looking to continue is business one another. what sure that way have And we to the last really we I I'm or to we we year way responsibly. deploy make all aggressively growth think really in great So proud I think about. hands Chuck, a it's that the put that in cash cash like means shareholders' because strategic of we're cash And back our

to doing want Chuck, to that. that? we're keep And add anything so do to going you

I Yes, agree.

great capital comfortable opportunities, to to years. very M&A. high But bar then a that It's balance last cash have a I'm Otherwise, with to very great a the the We've where track find it. got have. history will of we'll and return the we've for shareholders been And as it's done. we the we great We similar deploy extent we couple record.

capital allocation I so goes she sort steady it's think the on And as model. of

going with in more Or last should this -- million you, $XX Okay. charge that program? And Chuck, we this look then forward? was for now question for it restructuring -- on

spend kind little reserves. The would rules will used you of have have And to those There accounting just a where the charges charges. rules changed the over then be you The against all changed take more bit. years upfront.

So that over all few there actions the more It's just additional largely, done the we incur be internally. next will But the charges quarters. timing. are

for final at from Vontobel. our Bracken, Michael the question is Chuck, morning

Hi back It's so biking probably season out. you're Michael.

Okay. I sustainability. have one on

process now, and is back from that mentioned your your faster you of so the back same? rest? XX% from maybe complex? a think, labeling why that carbon And I labeling peers the reason holds holding You doing is also it's being the Is products. what

there. X, don't it life. in I'll components things just a high-level Okay. carbon X, is answer, give the really we're which on our is and that we of want go use of are transportation, products. X because there from and -- One means going estimate impact X to scopes end a taking that into

So we're really taking full the period.

We also be to draw need actually accurate. to are have to enough conclusions that data able

that assessment. newer, have are we of good some a accurate have give we our So products before really year to them a

so -- one So of that's drivers. the

implement The takes it a just second those product product. one while then is into to products, individual by

don't of make we're because I why easier. isn't So to trying I'm fast really actually. And it excited people we've other the is easy, reasons from moved see it one it think you about how

Basal that the compete So because is that we in use, it's on can each that with have some easier and drive everybody terribly industry it because to believe strongly we but costs should try make be carbon. not tool to really cost been carbon money to efficient all external more governments labeling to expensive, provider working this use can other we every that with really one an

will that And your for most you support then the fiscal uncertainty do of in what months. And are guidance? looking confident -- X guidance half the year, you that, first on your which categories first more have where in that

anything to keyboards. seems it's so kind 'XX, will it and personal it's us gaming category just mice pretty I solid, since, for and And say. to great I -- be. be to try I this. a that been mean just -- straightforward continues workspace It's won't of I think little the on except think be since XXXX, really hard solid.

and BXB, It's say collaboration. later. -- one. you exited enter exited consumer I later video and that I think They think earlier and enter on cycle cycle of earlier you on you kind

really cycle. a tell me, if would little more mouse through that business the keyboard you me, say my that been others. to But steadier reliable and guess pressed ask to I the you it's So say I this is and would than had hard will be

tell X reasons really only One now, on the of harder months we right to side. is BXB it's especially the guided because

And have then a right. Chuck. All I one for last

You of long becomes until wait how mentioned you capital as your of part that metrics. return sort invested model? -- long-term ultimate Is to your have on do

don't I and point, long-term us would It's publish this we I an at there. to an plan for to expect outlook outlook so track, we it's think a metric internal externally. -- use that that not

important I do internally. it super I think And we're a using metric. love it's that

Well, all you. to of thanks

I'll jump here, in Nate.

in all we the minute, Just more discussion I one have quarter -- appreciate really a visibility. down,

visibility, go that year, said. to bet You going can Chuck we're strong to full as our the

And a you we'll see so quarter. in thanks,