Logitech International (LOGI) 25 Jul 232024 Q1 Earnings call transcript

Good morning and good afternoon. Welcome to Logitech's video call to discuss our financial results for the first quarter of fiscal year 2024.

Joining us today are Guy Gecht, our Interim CEO; and Chuck Boynton, our CFO.

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.

differ could results actual materially. Our

obligation We of or any update statements. undertake no these revise to

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

turn to call now I over Guy. will the

Thanks, speak with all Nate, to a today. for It is and joining you pleasure us. thank you

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feature companies global graphene quarter, we Red athletes, addition a Logitech's prestigious in products including those X renowned as Logitech to audio technology. and were gaming Year Dot design others Rally the award industry's such for the previously precision drivers our is leader Logitech spaces. in awarded Design conference We Ferrari the meeting require that awarded Apple, for into most their newest G of for and headset new design And collaboration design. Bar small of Huddle turn newest X Team cameras Assuming innovation, to esport rooms Pro family that introduced the

table. that launched view video experience. last are table top capabilities, the with unique to truly like conferencing delivers who and technology they to meeting site on shipping addition in should new be seated especially the start is this degrees an a about Logitech AI products heart And And of the quarter, camera we around director they're screen. a system close just may XXX because the far, And angle participants highlighted remote feel involved not the not conference people in from or otherwise participants fully the in which which this are both room decides benefits

we Our sales Honda, European These group of the TD well Synnex deals the in last Proximus differentiated wins meaningful both a technology small other is tuck-in of Commission. a as the customer private acquisition including announced gaming in as and deal a closed streaming that week, And Loupedeck, QX, teams Kroger, and public areas. initially sectors. and the later finally, represent number adding in in multiple and industries

will These some our most We results the importantly the as will of for updated unique for recent of sets deals highlights, we strategy is an and encouraging help our technology an with our users. screen fiscal more year to to of as set bringing started were continue accelerate just execution well that new although today, that us of outlook.

through and remainder engineering that manufacturing buyback. return video the lean and capitalize values. expect capital content have the M&A, the to year digital should move to commitment to innovation. of our growth, strategy we of focus toward principles the we and expected and a everywhere, trends fuel Logitech, on share you that product hybrid unwavering become focused capabilities to see all [indiscernible] and growth on do and lead fiscal is business, hallmark with allocation that that to gaming dividend of innovation which is led commitment And work, creation, the a As our operations design on and paying continued our

and and making annual about have our of been the we of report As to the released you year. of financial turn areas quarter provide will the impact. an that, impact read where review outlook the week, progress it in example, sustainability remainder first I Chuck? social our Chuck the to to With details this for teams can our the

joining call everyone I the Guy. on us you, today. Thank appreciate also

First for operating in in of especially results, quarter. It teamwork to our the our the all cash our and really and want employees strong execution shows thanks strong flows. foremost I

me reporting a changes Before financial our we classifications. our category we've get product some on the into details performance, let made on minute to spend

that several for provide have a updates sheet you view of Our slide simpler do X-year clearer fact comparables. as our statements. business. impact financial provide and not the additional hope as asked presentation previously our these last a and quarterly Many information we These reclassifications so of set reported changes over of well quarters,

sales results out business the accessories first currency for quite the to to by on XX% in million. and declined tablet was headsets, quarter. gaming. Net for Moving strong, Sales particularly $XXX constant

we last believe on earnings Day call, discussed and of As the the the inventory. on we at channel benefits in Analyst and lean hand

or For our reduced quarter, turns X We over on-hand inventory remain improving we to to the goal next committed significantly fifth consecutive year X.X. with our or turns inventory two. the to improving better of

the build as December end the at it on-hand the reductions normal or than We team reducing the channel replenish and was gross reduced at channel we quarter-over-quarter August of of as we down inventory the as In then a months quarter. and seasonally benefits This and of to inventory better targets margins Net-net, also the expect Likewise, quarter. hitting drove onetime anticipated July drove set. October November that improved channel for linearity same slightly plan our expanded in soft keep the channel to in during in QX the QX, inventory September, and was the to of inventory part predictability. I'm roughly for beginning. proud the quarter, and significant in has be XX%, some

in operations a on reminder, gross pressured. execution. cost offset less Again, in margins have year-over-year for QX, and mix but and Sequentially we basis, by be pressured margins improvement FX team our to partially tailwinds. reliance such shipping. gross December headwinds thank On to by amazing as And margins our anticipate expedited and were you quarter a both

absorption. by sales but overhead have those We somewhat are holiday the and offset seasonally higher promotions consumer

in be the there While feel quarters. business will to quarter-to-quarter X our gross next X to positioned is XX% fluctuations, structurally margins we generate

quarter, onetime to the expenses down $XXX and cost the OpEx U.S. Operating performance. to pleased administrative our expenses with and attributable focus our dial quickly business based slightly the weakening or dollar million were A in some up of internal up I in on team's portion versus were to expenses quarter. operating ability continue dial the be expectations.

strong Our model better of around at margins. our Operating maintain expenses $XXX to improved million demand and income revenue. due was gross long-term QX is expectations in or XX% internal and to than operating less

was a the balance $X.XX flow operations for billion. capital for record highlight execution. working big $XXX was our first cash One quarter the of quarter to leading million, a from Cash company,

capital strategy pay capital an return through opportunities, evaluate share to remains increasing M&A excess our repurchases. annual consistent, dividend and shareholders Our allocation

making progress are We all on X fronts.

As Guy for technology announced Loupedeck. at be will valuable Board while on in They the acquisition price voted of provide shareholders And our Meeting. September approved by month, In mentioned, billion disciplined G and increase May, program. we X-year our just our [ share consistent Annual a $X our approach our to a CHF Logitech repurchase new last and and of modest announced General dividend, Directors ] X.XX which acquisition reflects we M&A.

to than this the at have expires program total, part shareholders our July in of as more buyback of existing billion returned will and Our end we $X.X program.

expiring Swiss approval program its Our by new program upon replace will the Takeover Board. the

our on Moving to outlook.

are half we of $X.XXX first the expecting billion half We 'XX May billion. raising revenue confirmed first to in $X.XXX outlook

Our be $XXX between and $XXX million. expected corresponding million operating is income to

our uncertainty then the and the estimates inflation, to last QX. largest first December are forth. quarter, factors in of have progress call, And year we we year so full with our based and made earnings we plan In this half quarter. or provided estimates the the quarter is many the typically consumer. we is There in said updating FX full on revert state like quarter to either which next Today,

with now behind X However, year full quarter 'XX fiscal outlook. providing we are a us,

revenue to $X expecting are of billion $X.X We billion.

income $XXX Our between $XXX is million. be to corresponding million expected operating and

our products driving market such some I started. great of this and with we cautiously close are launching, with where you. I'll for and Thank to new strong employees optimistic. share you all execution Thank strong quarter

one show of and the video new a going Q&A. then site. short are roll we'll We video, take Nate on products, to our

[Presentation]

with Citi. I Merchant will today Instructions] [Operator start Asiya from

Hopefully, can me. you hear

hear can well. you We

were get you takes of there came very your is was than in bit as if least a there Chuck the to least And can seems And about about low higher. maybe color, third into can double Guy. margins Chuck, hitting in us Great about. quarter implied margins, mentioned slightly the onetime you digit terms gross And you quarter, in seeing -- can the could Chuck segment at the then expecting. guide for up guided we look some like and for about at think be you It the visibility flattish, puts and I you Guy December and benefits. seasonality. September kind XX% to kind what and progresses. calendar if this seems talk that. Guy. Chuck, to of or you, the Thank you think, kind year video, the quarter you about you talk on on talk to we're talk product of typically and Clearly, Maybe little some of actually, gross guys both which that as in you strongly the target, better you're of feel see

Yes.

much great, Asiya. the Thank so Sounds for you questions.

first, XX% quarters were And we you if kind So last on I'm as average, of that's seasonality, that QX. on X the XX% XX% quarter, you'll at going years QX, last sure the recall, to XX% outlined be that looked year. roughly QX, not QX, this

we expected. than It than the we're better a there expected, and back both uncertainties. but year and our where performed line, of was had half was still QX to the optimistic internal on compared expectations. top cautiously strong better line we are We bottom quarter Our

various uncertainties exchange, in Foreign environment. the the

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a We The XX% margins. second feel was good long-term low model. the quarter. about on that. our is It operating question great of end

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team has mix done we improvement. Our cost don't job a reduction great operations is know how What doing will and impact. the

back think, coming to year. margin the is uncertainty out products still provide, a have of nice a are the that we of that but the we Now help in are on couple tailwind going could half new side, there and

Great.

at go Bank Adam we'll Angelov America. to up, Next of

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a Inventory, was it say surprise. I would not

Our operations team, targets. we have

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it. the collaboration. one a Got makes then That And on sense. quick Okay. just

So you're that touch the Are seeing still into quarter. I HX. is just customers? uncertainty? Or of lot a the on about Maybe sort you stabilization could it feeling from enterprise in of declined you again think market how some

Yes.

I to we Asia face business to not numbers to met I days, side. North BXB the side, in every all, and region talked the First the last want would say see conferencing going and afternoon. video customers in face the to America Europe this of on XX

opened, and and us where we're actually they the companies deploy significant. strong get a is seeing some decided is just deploy are brand Our conference pace wins standardize What on budget at room. to Logitech they big

play that the for better So should definitely future.

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we in gained I couple of add, of would points just quarter. a the share

And feel So with that half products so $X being the about the we video modest position. year. good quarter-over-quarter. launched, again -- our our we're strength the execution Sequentially, was optimistic million, just category about down then new Guy relatively back of the cautiously mentioned, these in our of

Wang George be at will Barclays. from question Next

improvement, flow the especially downstream, peripherals. just gaming So some incremental sure we gaming necessarily up firstly, into of of can kind the whether checks, you not talk our in about picked terms on

for Just be HXQ. below imply guide on the down to of XH, for on based sort year-over-year seasonal a your the again basis gaming

you Just of that's think on side? curious conservative you how gaming visibility or whether have the much

biggest Well, But we provided the clearly, specific the gaming the of is estimates quarter half haven't gaming. December FOR for year. quarter the back for

biggest new some was products team China for And We've for us which us. overall, be and a has we for test the I'd in coming quarter But promo, June That's say well. been we've Japan the think flawlessly The operating in December got will event that quarter team XX strength real for help. gaming. Our gaming. Overall, quarter is will executed the a it for that the gaming good incredibly really got out market. really elsewhere. important

Great.

to follow-up. Just you of if right, guys one looking the I expand a just can are I categories, adjacencies. the the guess, pillars. growth squeeze in That's always new probably of kind

we're likely of which entering if sort to years? most think which largely or few or So next a thoughts in you any area the will vertical brand-new do on, in high level what category, a into be

the Which the and early we is found us in about you coming the to for it, discussion after I to this in new more cases going great George, plans higher-value will expand but about too a great talk into where company question. application are use quarters cases. expand TAM, see use expansion.

next Our Alexander Duval be Sachs. question will from at Goldman

Just a couple.

OpEx, how remind a cost to forward support on FX if And it just there you bit further you've control good quick going much expect in coming for a the Firstly, is looks how quarters. have some wonder FX. remaining in talk seeing made like the quarter. follow-up we headroom about on much you I strides us could cost on then from I quarters? Can in be control should

Certainly.

have FX comps. we in still on the side, First, to quarter, starts That this year-over-year the headwinds change.

balanced Next quarter, are. more with it's where currently rates

should year-over-year think we kind of I beyond. So balance QX in back and starting be a into

First us -- early can -- here, it's sorry. question you remind was the

Cost control.

favorite my topic. control, Cost

we for job There QX our couple have phenomenal targets. onetime little was a internal done was cost. of than charges. administrative So a lowering OpEx higher a

So improvement you'll I think see OpEx. on sequential

Our roughly, believe that of may OpEx is but is revenue. rate target have get revenue. real run that we by on of But approximately, And XX% we'll at XX% that should We $X we're to year, be of be long-term may the to below see. wait level have or we this but operating the end to the and long-term to a billion below kind not year, of trajectory. model

is Loop at Capital. Ananda Our from next question

around give to Can you guide days Nate. quick I as second tell the follow-up the Yes, that in sort confidence process and that some then us visibility gives to XX have it, well. to Guy, from doing could. just guys ones, decision if around -- I you the ability thought context And mean quick just just as I in opposed the X of got video, today just well, give now. so No as Chuck Cool. a half do it?

guide, behind in to In had time. it either provide in quarter U.S felt visibility down strong first yes. we And a inflation little little the other behind bit. the is areas, relative Inflation done us have the X the in year. a quarter, FX right quarter that outlined some down bit. had this now the on we has come was we're given time the and was quarter it estimates a X to just U.S. has is we quarter would we higher Well, full expectations. we what that better? markets, kind U.K. that deliberated update or last come of But and to but it It's for with with starting we us, X quarter stabilize that the our next expectations quarter of bit. to ahead pleased and right the felt

maybe this the would exiting you thoughts Okay. just like kind 'XX. That's love yet, haven't And revenue when of question. quick any but seems some conclusion sort guess, bigger renormalize on sort guys context, Any I base. it of Chuck. helpful just context of picture you reached thoughts done and analysis, I've fiscal

would would thoughts could love there, but be be that. on You helpful. That just your

We're can the getting not where getting They're not you of year-over-year I'll are -- Guy, sequential they're the to with look happy. the we as Well, at we change, -- things declining comps are color. are is still more Like starting want be. and we them start, favorable. still stabilize. change rate to But year-over-year add

but cautiously to our for going tell hit when year. estimates that's I things starting feels in the and you for asymptote, optimistic are we're can't bottom it stabilize, Now an like to reflective

team growth reaffirm a let But just to the an really conviction -- a just say hard the with for can. tell another will not working whatever trajectory last as push company, growth a here days this would my is here growth CEO, is interim XX to market, market I you this in improve. me thing. The We're we waiting come.

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want I positive way sit And normalized like the financial as guess sort community guys, -- same negative? think the whether mean, kind think we sort about of we is right the the have of to to or growth currently, as go of I pre-COVID does about forward company or different,

Look, of continue to from know can to -- in right and will The we plan, me strong. the you growth strong. potential that, higher a that more. team the on, design, and at super to prior lot a we build super we a company want right look product. be strong. is lot look at always here. want is There's life, And We this always The and leadership innovation acquisition super accelerate masters

a have We lot to build on.

you you I So will ambitious as go better. we do certainly am. but more, we hear forward, like how know to And

Morgan Stanley. be next Our question Woodring Erik at from will

Guy, I the today, Asiya's question good of you I are to worst on also in there least but guiding uncertainties you're is at telling kind because seasonality channel to double a understand just to normalized. see wanted but seasonality decade, us the again. click

imply would actually. don't demand hear really that that I so would guess, would, worsening, but be your I comments, And from

me just a circle was of expecting if then follow-up. and understand we I wondering square help And such seasonal you kind have below a I that really why were So could quarter? September

provided that conflicts, global above December the feel we I targets and a in and quarter started quarter. good QX, a would be coming expectations the haven't that in say overall, we cetera, of rates the March to relative we the But December worst the interest into really and and different inflation the can off quarter the seasonality typically rising of situation. have and like happens our we'll the state quarter seasonally updated manage and think in is quarter that's et the feel happens year, just I strong then to would And is a estimates. plan difficult to or is quarter. we're consumer then how March wait If got in we feel pretty December December I strong, of we year. we've or what for the see place. Well, like March if we because

earlier, at So know. outline is year, -- I think is of lower. so the March would mentioned March what different be say if We view? you it quarter we're view. point we're look I'd I have And But, generally, balanced. a my at the be XX% that the don't -- could Guy, do you of

agree guidance and anticipating part would on. operational you. what That's issue Chuck we the year. have I to be were you're on, demand that for and spot I I or and done of informed the seeing not a or hearing we week we're Erik, are say, full extensive decision review not to review, with worsening. very definitely last us planning

your Awesome. Maybe there. on up Chuck, of to follow you just one a comments question for

year maybe of XX% OpEx kind I revenue, talked a think OpEx. about quarterly rate $XXX at exiting quarter, run we the for of of terms like last Logitech below In million

it, If do you'd you $X million million that. below call $XX below did to get, XX%,

me. reinvestment are So then of secondarily, beyond alongside prior to revenue and into lean expect it your growing OpEx? try if kind to just you base expectations? you Or grow you would OpEx would can are cut next wondering you for then keep cutting you And your And OpEx that's base? if thinking

I questions, Good clear. super yes. and maybe wasn't Yes,

have approximate roughly run target is million should $X QX, of of at by the $XXX end that little little rate year billion, to a our maybe lower, imply a maybe OpEx but higher, a So an in the range. which

We OpEx a growth, We to billion costs in company. that or to the right not focused We're a and now that's plan year line cost a not the have in on $X reduction headcount taken of of front out back of a have it. has lot plan. do getting reduce our top place

we're And $X billion -- revenue, rate is run in OpEx so if $X at billion if you XX%.

billion approximately run to -- going stay billion, $X are we we're $X we're the at still a in if OpEx, So below rate.

be And below revenue plan of as if the That operating then -- model. $XXX have total $X approximately QX as is start again, OpEx So we're XX% long-term that grow think would of billion. million the number. is to we we that below

So XX% a XX% like invest we is plenty heel explicit, us. just areas. and growth we quarter like long-term in for But come take -- growth when to as Erik, extra the opportunities investment to back the to it be in. we we There's

Jörn at Our is from question Iffert next UBS.

to questions, X my one if one, X from will take please, okay. I it's side. by them

where see kind first profit The you one in benefit clarify was on exactly again please gross is, the What profit QX? margins? be QX? one-off can trending so in and And you gross margins to

Okay.

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QX, don't So will can $XXX million. as think another into we inventory reduce pressure be we by forward there we some look because

strong and pressure that X little a QX gross the in benefit things. we QX. but on gross bit a of see company. a FX a bit course, margin But lot of that will to and improving equal, there's a being XX-ish of So to And put results a margin structurally for onetime a in see here, trend with mix there's X generally, things trend we as of all all percent dynamics quarters, those

XX% for margins, long-term Our XX%. model to gross

shift, end, in XX%-ish to quarters, gross X happen, that things more Now we mix but can high to margins. to X get video see structurally the

there. question Next

said had You you X. That's the three. of first

Yes, exactly.

to to you XX% gross X profit X margin the next reach So X will it the to not quarters, run in clear. in be means X quarters, rate, just

the long-term impacts. see said we the where but XX%, to gross and happen on Well, margins, I in we XX% business have the may where it's have X X above XX%. to of being being there's quarters, below. biggest can model because puts a think one mix it's we quarters quarters is of structurally, growing XX% may But We average primarily lot takes with that and

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Okay.

development to second on please, July weeks I the QX you -- was seen on growth revenue in higher I flattish usually, July, do weeks a what first to due What the be year-over-year guide. you see significantly is just sorry, seasonality. speaking versus of would The some July. year-over-year mean have actually I in about quarter-on-quarter QX question double quarter-on-quarter stable so see in first mean or QX check far? not of the normal you started with

The have we from so say would Day. Prime and first of cautiously yet about results couple weeks is the far. data so we're We the the analysis I don't optimistic far have that in final

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around last Video said it's down. $X you question Conferencing, And Okay. million please, the on then,

assumption for QX assume and be Is fair up quarter-on-quarter? we bottoming Video X categories? Conferencing in out should these that So can it's this here a also gaming

with His video but bit. that coming. line provided And even products level I down It was new fairly We hope so, I specificity. in quarter, little guarantee bottomed can't Yes. of with that. out. last a

I got in tailwinds think video. we've

from ZKB. Andreas Müller Our at next question is

and combos reason? rate keyboard was I've of got difference my and between stand-alone, question what the there the about a growth

categories have It gains. So our a bit, but well than strong better quite quarter quite was to lot I a company. expectations. little terms thrilled internal to being combos better our both were relative a was also more and of don't down pointing see share devices performed our of expectations I generally, gains. say We're expectations. share a to But devices with would additional offer just Pointing keyboard a in hallmark and than color.

share would Okay. on now accelerate really the And the this balance cash then is the buybacks. sheet, you high,

room running there million. I to think than bit improve it's $XXX a Is lower that?

to improve. Well, there room is

we in balance. that that's First quarter, reduce and of being cash this all, so QX, dividend, our will annual paid the pay

plan We were able to with an AGM. plan plan, $X.X that's buybacks buyback the we to announced approval go old The We have of have a now billion billion. plans execute expiring. And acquisition. new new -- shareholder of in put buyback for on will old to the the $X.X place

M&A So targeting strategy I our would allocation say growth. we're on capital of we're for executing

price, Now the a for Loupedeck the excess growth. then dividend shareholders. growing returning back paying purchase but are M&A and to modest targeting we is and dividend cash

playbook So right the middle. down we're our I following think

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a of details, the We of was don't but disclose individual it dollars. kind millions

we it's sort a benefit a should in either, that see number a not so huge So was but QX. onetimer of

is Our Foeth next Vontobel. question at Michael from

mute. I you're think Michael, on still

circle back. we'll Michael,

Let's go Chatterjee Samik to at JPMorgan.

Can you hear me.

Samik. Yes

Great. Okay.

I So on a jumped bit late.

that And you any that are PC PC PC that half So seasonal volumes in we the through largely upside half. in improvement half I more Or rate your wondering, the at if momentum of attach volumes with there half associating I'm track, if quick into more -- of potential a second you year, sort the would are comes are as you've given your you comes keeping sort of this over of good. some track of see have follow-up. gone typically model? Otherwise, companies, flattish I you're look already. the that through expect for But into of to improvement going apologize to half. sort to the just expectations related a as first back you

Yes. tracking rate We analysis reviews, that. we're -- closely attach part of PC ship and with another

with from are of perspective, PC some providers. So big seeing news the obviously, we're those our outlook good the

Chuck We're with bullish half. more me little But the bit As the just we're talking companies pleased Don't be very achievement. here. quarter. get to on It's other cautious not a second going the wrong. said, build on trying we're to other first

niche for acquisition, does follow-up, as these you're opportunities And of it Okay. your interesting was you're to But thinking you if have? And M&A. highlight maybe what what sort that how of addressable other of that an relation thinking are doing Loupedeck look my see about can sort of sort in there. you to what at portfolio, market you're

Yes.

very get gamers the So but keyboard that. will at for very important future. We'll And use potential and leave relatively sophisticated will we this. I'll we're to first that. to team seeing it on in us small a it the it's IP Loupedeck, creators, we in about allow that capabilities when talk but beyond mice small, And add the to it

want you the by not allow But see or M&A, whether at that. the replenish we it for trajectory. out that is see to have accelerate I than growth that. optionality. can we back to to review we look beyond larger growth little small for by certain -- as to We're I bring we to else chances in have can want We we coming to team a we M&A the desperate funnel. And -- areas, targets, think our to and accelerate the obviously far the that. what As there tuck-in the we like it, If have encourage approval. board M&A us something growth organically. and

believe from you're Foeth I Michael Michael, Vontobel. back.

me Can you hear now?

Yes.

Yes.

Perfect.

changed any planning for wondering if the your -- that what's if you any cautious phase well? as the So on to year was of the categories. if rather the so these some your the just guidance structure and has of one, And you're now, speakers, -- full impact products reporting for I out another

that not general we I manager challenge group The facing out. No, the category. to stand-alone gave was are its it's, it, products of so grow own those

just want trying small don't we it and we're cats So housekeeping, a bunch of dog categories. for

And can then focused is so for if -- they together, line General and and that's so challenge And the to it's idea outgrow, Manager, then put the we're accepted create the he's that them. those separate a we'll challenge. --

Okay.

boom reposition there and plan few if if maybe a for growth can that is going UE words talk So any to forward. you about just

to get our growth, we'll it's good want point, to this, said, much hopefully, actually, and we to GM a question. there, to -- see just this transparency to of the categories, Chuck in than we to on we're the at great a others. months energize best invested in category category. It's the company actually the do wants not you new we'll but like it's And give but expecting feel outer We But product suited the invested. better remainder farther, coming year and go as say. early too he And ship couple told products the you out the other of and of

at final Our Credit today Serge question Rotzer for is Suisse. from

because I you a of Basically, I'm want that Michael wondering question to this see other categories. like had similar -- growing product these

costs As lowest always group you we development margin. in know the that has said squeeze research that them the take product you and down. And you out that this past, and

now you for want in gives grow groups product So sense it dilute as that again no to will these me your margins. it

me, for sounds strategy. to your it these So at want categories, more product on you old close that least

to we clearly, is company and threshold. a -- there's goal so grow margin profitably, our Well, the

the grow for both. those. categories What to but products do historically profit investing necessarily, for a with And our been can max, team the believe we those I is they seek have then strategy build that is great those not challenge there's margins in don't grow thresholds, the of profits. that kind to doing make harvesting the execute And and meet So sense attractive company. will if we not to they

an to category. And margins. that Now to level products as but they in the the it investor we'll then It's today. build internal category. see. is That's for team why not the create attractive worth great it's if with the you stand-alone It's focusing on get worthy, challenge will can small. other it's some

a no that is there at is margin assured, product here lower category. rest development And targeted

R&D after products. our dollars We are higher are higher -- margin, going dollars growth --

and the portfolio really you Guy It's growth and profit, management. How I then either aligned. for not do manage or. portfolio are And

So Probably boom, Jaybird a can ], you significant me a give there [ information linked position follow-up here, UE goodwill to products? these speakers is any here.

believe I don't so.

those associated any that goodwill acquisitions with immaterial. think I would be fairly

slightly any do you $XXX some from $XX very a the last you the reason have I then capitalize million And increased know. Is there OpEx, it's million. although or to to Good. CapEx start position, small the one, Okay. of

No, just here town, great here and we Silicon that a host in the technology. -- it's in all visit and and new really you're we're using today Valley, if calling We've tied from opening to you have a hope got our Valley. our new office you, us Silicon that building in we're to

and tour here, us a of new give you So come facility. visit our we'll

change still sequential months. a only quarter change But $XX million new X for building in

So...

a for -- changed leases. it's operating you now. Where has Right, accounting capitalize the leases rules

I much. wouldn't into read too So it

Chuck, wraps today. Q&A for our Guy, that up

Logitech achievement for and team I joining great this Thank Pleasure our us. be Thank to also And everybody, extend thanks the a that deliver hard-working build us with everybody. you, allow many want Thank on you, to future. to Nate. for you. to the -- call very

Thanks all.

Thank you.