Q1 2025 Logitech International SA Earnings Call

Good morning and good afternoon.

Video call to discuss our financial results.

Nate Melihercik: Welcome to Logitech's video call to discuss our financial results for the first quarter of fiscal year 2025. Joining us today are Hanneke Faber, our CEO, and Mita Sunderwaller, our interim CFO.

Speaker Change: Welcome to Logitech's video call to discuss our financial results.

Nate Melihercik: For the first quarter of fiscal year 2025, joining us today, are Hanneke Faber, our CEO, and Meeta Sunderwala, our interim 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; our actual results could differ.

Speaker Change: For the first quarter of fiscal year 2025. Joining us today are Hanneke Faber, our CEO , and Mita Sunderwaller, our interim CFO .

Nate Melihercik: 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, and our actual results could differ materially. We undertake no obligation to update or revise any of these statements.

Speaker Change: 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.

Speaker Change: We're making these statements based on our views only as of today. Our actual results could differ materially.

Nate Melihercik: We undertake no obligation to update or revise any of these statements. We will also discuss non-GAAP financial results, and you can find a reconciliation between GAAP and non-GAAP results, and information about our use of non-GAAP measures and factors that could impact our financial results. And forward-looking statements in our press release, and in our findings with the SEC.

Speaker Change: We undertake no obligation to update or revise any of these statements. We will also discuss non-GAAP financial results, and you can find a reconciliation between GAAP and non-GAAP results and information about our use of non-GAAP measures and factors that could impact our financial results and forward-looking statements in our press release and in our filings with the SEC.

Nate Melihercik: We will also discuss non-GAAP financial results, and you can find a reconciliation between GAAP and non-GAAP results and information about our use of non-GAAP measures and factors that could impact our financial results and forward-looking statements in our press release and in our filings with the SEC. These materials, as well as a shareholder letter and a webcast of this call, are all available on the Investor Relations page of our website. We encourage you to review these materials carefully.

Nate Melihercik: These materials, as well as a shareholder letter and a webcast of this call, are all available at the Investor Relations page of our website. We encourage you to review these materials carefully, and let's note it; otherwise, comparisons between periods or year-to-year and constant currency and net sales.

Speaker Change: These materials, as well as a shareholder letter and a webcast of this call, are all available at the Investor Relations page of our website.

Nate Melihercik: Unless noted otherwise, comparisons between periods are year-over-year and in constant currency and net sales. This call is being recorded and will be available for a replay on our website. I will now turn the call over to Hanneke.

Speaker Change: We encourage you to review these materials carefully. Unless noted otherwise, comparisons between periods are year-over-year and in constant currency and net sales. This call is being recorded and will be available for a replay on our website. I will now turn the call over to Hanneke.

Nate Melihercik: This call is being recorded, and we will be available for a replay on our website.

Hanneke Faber: I will now turn the call over to Honika. Thank you, Nate, and welcome everyone to our first earning call over 2025 fiscal year. Please to say that we started the year off strong. We delivered 13% year-over-year growth and 430 basis points of margin expansion, while generating strong levels of cash for their bolstering or balance sheets. Given to healthy momentum in our business, our market share gains we've seen in most of our key product categories, and the confidence in our ability to execute, we are raising our fiscal 25 outlook, which I'll touch on shortly.

Hanneke Faber: Thank you, Nate, and welcome everyone to our first earnings call of our 2025 fiscal year. I'm pleased to say that we started the year off strong.

Hanneke: Thank you, Nate, and welcome, everyone, to our first earnings call of our 2025 fiscal year.

Hanneke Faber: We delivered 13% year over year growth and 430 basis points of margin expansion while generating strong levels of cash, further bolstering our balance sheet. Given the healthy momentum in our business, the market share gains we've seen in most of our key product categories, and the confidence in our ability to execute, we are raising our fiscal 25 outlook, which I'll touch on shortly. You can read the full details of our quarter in our shareholder letter, which will give you a full review of our operating and financial performance. But I'd like to spend a few minutes on this call to provide some color and context to our results, and then we'll transition to Q&A. Let me briefly touch on three points. First,

Hanneke: Pleased to say that we started the year off strong. We delivered 13% year-over-year growth and 430 basis points of margin expansion, while generating strong levels of cash further bolstering our balance sheet.

Hanneke: Given the healthy momentum in our business, the market share gains we've seen in most of our key product categories, and the confidence in our ability to execute, we are raising our fiscal 25 outlook, which I'll touch on shortly.

Hanneke Faber: You can read the full details of our quarter in our shareholder letter, which will give you a full review of our operating and financial performance. But I'd like to spend a few minutes on this call to provide some color in context to our results, and then we'll transition to Q&A. Let me briefly touch on three points. First, I'm super pleased to see Q1 net sales growth in the low teens, our second consecutive quarter of growth. As a reminder, we told you last quarter that our strategic capital investments would be a part of this story this quarter.

Hanneke: You can read the full details of our quarter in our shareholder letter, which will give you a full review of our operating and financial performance. But I'd like to spend a few minutes on this call to provide some color and context to our results, and then we'll transition to Q&A.

Hanneke: Let me briefly touch on three points.

Hanneke Faber: I'm super pleased to see Q1 net sales growth in the low teens, our second consecutive quarter of growth. As a reminder, we told you last quarter that our strategic working capital investments would be a part of this story this quarter, as we prepared our own and channel inventories for big selling seasons like June 18, Amazon Prime, back to school, and into the holiday season. Even after you normalize for these planned channel investments, demand was nearly one-third of our top-line growth.

Hanneke: First, I am super pleased to see Q1 net sales growth in the low teens, our second consecutive quarter of growth.

Hanneke: As a reminder, we told you last quarter that our strategic, that strategic working capital investments would be a part of this story this quarter, as we prepared our own and channel inventories for big selling seasons like June 18, Amazon Prime, back to school, and into the holiday season.

Hanneke Faber: As we prepared our own end-channel inventories for big-selling seasons, like June 18, Amazon Prime, back to school, and into the holiday season. Even after you normalize for these planned channel investments, demand was nearly one-third of our top-line growth. It seems delivered on our plans exceptionally well. Together with our strong top-line results and our focus on execution and operational discipline, we drove healthy growth and operating margin expansion. These results were also enabled by our ability to balance the needs of our distribution partners with continued focus on lean-working capital management. At the end of Q1, our own inventory was down nearly 20% from last year, and our Q1 inventory turns right 5.4.

Hanneke: Even after you normalize for these planned channel investments, demand was nearly one-third of our top-line growth.

Hanneke: The team has delivered on our plans exceptionally well.

Hanneke Faber: Together with our strong top-line results and our focus on execution and operational discipline, we drove healthy growth in operating margin expansion. These results were also enabled by our ability to balance the needs of our distribution partners with a continued focus on lean working capital management. At the end of Q1, our owned inventory was down nearly 20% from last year, and our Q1 inventory returns were at 5.4, a notable increase from 4.2 last year, demonstrating our strong command of the business. And our channel inventory levels, in terms of weeks on hand, remain well within the upper and lower ranges in which we've operated since the beginning of fiscal year 24.

Hanneke: Together with our strong top-line results and our focus on execution and operational discipline, we drove healthy gross and operating margin expansion.

Hanneke: These results were also enabled by our ability to balance the needs of our distribution partners with continued focus on lean working capital management.

Hanneke: At the end of Q1, our owned inventory was down nearly 20% from last year, and our Q1 inventory returns were at 5.4, a notable increase from 4.2 last year, demonstrating our strong command of the business.

Hanneke Faber: A notable increase from 4.2 last year, demonstrating our strong command of the business. In our channel, inventory levels in terms of weeks on hand remain well within the upper and lower ranges in which we've operated since the beginning of fiscal year 24. Second, I'm excited about our product innovation lineup for this fiscal year, advancing our strategic priority that I talked about last quarter to innovate. You saw us launch 11 products in the first quarter across almost all of our product categories. This ability to launch a diversified set of innovations with a design-led focus at global scale is a competitive advantage that we will continue to leverage.

Hanneke: And our channel inventory levels, in terms of weeks on hand, remain well within the upper and lower ranges in which we've operated since the beginning of fiscal year 24.

Hanneke Faber: Second, I'm excited about our product innovation lineup for this fiscal year, advancing our strategic priority that I talked about last quarter to innovate. You saw us launch 11 products in the first quarter across almost all of our product categories. This ability to launch a diversified set of innovations with a design-led focus at a global scale is a competitive advantage that we will continue to leverage. Many of these products are finding smart ways to leverage the power of AI.

Hanneke: Second, I'm excited about our product innovation lineup for this fiscal year, advancing our strategic priority that I talked about last quarter to innovate.

Hanneke: You saw us launch 11 products in the first quarter across almost all of our product categories.

Hanneke: This ability to launch a diversified set of innovations with a design-led focus at global scale is a competitive advantage that we will continue to leverage.

Hanneke Faber: Many of these products are finding smart ways to leverage the power of AI. And for example, the recently released AI Prok Builder has now been used in over five and a half million instances, and are recently introduced meet-up to conference camera with right site and right sound technologies, leverages proprietary data models, our own, and machine learning algorithms to deliver a truly equitable meeting experience for those in the meeting room or participating remotely. Third, given our solid start to the year, we are updating our fiscal year 25 outlook, modestly increasing our fiscal 25 targets for both net sales and non-GAAP operating income.

Hanneke: Many of these products are finding smart ways to leverage the power of AI.

Hanneke Faber: For example, the recently released AI Prompt Builder has now been used in over five and a half million instances, and a recently introduced MeetUp2 conference camera with RightSight and RightSound technologies leverages proprietary data models, our own, and machine learning algorithms to deliver a truly equitable meeting experience for those in the meeting room or participating remotely.

Hanneke: And for example, the recently released AI Prompt Builder has now been used in over 5.5 million instances.

Hanneke: and our recently introduced MeetUp2 conference camera with RightSight and RightSound technologies, leverages proprietary data models, our own, and machine learning algorithms to deliver a truly equitable meeting experience for those in the meeting room or participating remotely.

Hanneke Faber: Third, given our solid start to the year, we are updating our fiscal year 25 outlook, modestly increasing our fiscal 25 targets for both net sales and non-GAAP operating income. Fiscal year 25 net sales gross is now expected to be between 1 and 3 percent, and non-GAAP operating income is expected to be between $700 million and $730 million. This updated fiscal 25 outlook contemplates two discrete trends.

Hanneke: Third, given our solid start to the year, we are updating our FY 25 outlook, modestly increasing our FY 25 targets for both net sales and non-GAAP operating income.

Hanneke Faber: Fifthly, your 25 net sales growth is now expected to be between one and three percent, and non-GAAP operating income is expected to be between 700 million and 730 million dollars. This updated fiscal 25 outlook contemplates two discrete trends. Our top line growth in Q1 was clearly strong. End customer demand, coupled with the working capital investments I discussed earlier, drove a healthy increase in net sales. At the same time, though, this positive business momentum occurred amidst this uncertain and volatile global economic backdrop. So, while we're pleased with our first quarter results, we remain pragmatic about future risks and uncertainties.

Hanneke: Fiscal year 25 net sales gross is now expected to be between 1 and 3 percent and non-GAAP operating income is expected to be between 700 million and 730 million dollars.

Hanneke: This updated Fiscal 25 Outlook contemplates two discrete trends.

Hanneke Faber: Our top-line growth in Q1 was clearly strong, and customer demand, coupled with the working capital investments I discussed earlier, drove a healthy increase in net sales. At the same time, though, this positive business momentum occurred amidst this uncertain and volatile global economic backdrop.

Hanneke: Our top-line growth in Q1 was clearly strong.

Hanneke: And customer demand, coupled with the working capital investments I discussed earlier, drove a healthy increase in net sales.

Hanneke: At the same time, though, this positive business momentum occurred amidst this uncertain and volatile global economic backdrop.

Hanneke Faber: So while we're pleased with our first quarter results, we remain pragmatic about future risks and uncertainties. Now, before we move to Q&A, I'd just like to highlight our 2024 impact report that we published yesterday. You've heard us talk about our commitment to sustainability, and this annual scorecard holds us accountable. There's a lot to be proud of in this report, such as the fact that three out of four of our products now use recycled plastic, and 66% of our products are carbon-lashed. Helping consumers and enterprise technology buyers make informed decisions about the environmental impact of their purchases.

Hanneke: So while we're pleased with our first quarter results, we remain pragmatic about future risks and uncertainties.

Hanneke Faber: Now, before we move to Q1, I just like to highlight our 2024 impact report that we published yesterday. You've heard us talk about our commitment to sustainability, and this annual scorecard holds us accountable. There's a lot to be proud of in this report, such as the fact that three out of four of our products now use recycled plastic, and 66% of our products are carbon-laced. Helping consumers and enterprise technology buyers make informed decisions about the environmental impact of their purchases. I'm very comfortable with this approach to sustainability. We set ambitious goals and provide an annual transparent scorecard.

Hanneke: Now, before we move to Q&A, I'd just like to highlight our 2024 Impact Report that we published yesterday.

Hanneke: You've heard us talk about our commitment to sustainability, and this annual scorecards holds us accountable.

Hanneke: There's a lot to be proud of in this report, such as the fact that 3 out of 4 of our products now use recycled plastic, and 66% of our products are carbon-labeled.

Hanneke: Helping consumers and enterprise technology buyers make informed decisions about the environmental impact of their purchases.

Hanneke Faber: I'm very comfortable with this approach to sustainability. We set ambitious goals and provide an annual transparent scorecard. Above all, we pursue this commitment to sustainability while delivering strong business results. So, in summary, I'm pleased with our ability to execute on our strategic priorities as we focus on extending human potential in work and play. Our first quarter results demonstrate that we're on the right track. Thank you. And with that, Nate, let's go to Q&A.

Speaker Change: I'm very comfortable with this approach to sustainability. We set ambitious goals and provide an annual transparent scorecard. And above all, we pursue this commitment to sustainability while delivering strong business results.

Hanneke Faber: And above all, we pursue this commitment to sustainability while delivering strong business results. So in summary, I'm pleased with our ability to execute on our strategic priorities as we focus on extending human potential in work and play. Our first quarter results demonstrate that we're on the right track. Thank you.

Speaker Change: So, in summary, I'm pleased with our ability to execute on our strategic priorities as we focus on extending human potential in work and play. Our first quarter results demonstrate that we're on the right track.

Nate Melihercik: And with that, Nate, let's go to Q&A. Great. Late low, we are now ready for our first question. Thank you, Nate. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a message on your screen asking to be promoted to panelists. Please accept, wait a moment, and once you've been promoted, you may unmute your video and audio and ask your question.

Speaker Change: Thank you. And with that, Nate, let's go to Q&A.

Nate Melihercik: Great. Leila, we are now ready for our first question. Thank you, Nate. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen.

Nate: Great. Leila, we are now ready for our first question.

Nate Melihercik: Thank you, Nate. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand. When it is your turn, you will hear your name called and receive a message on your screen asking you to be promoted to panelist. Please accept. Wait a moment.

Nate: Thank you, Nate. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. You may remove yourself from the queue at any time by lowering your hand.

Nate: When it is your turn, you will hear your name called and receive a message on your screen asking to be promoted to panelist. Please accept, wait a moment, and once you have been promoted, you may unmute your video and audio and ask your question.

Nate Melihercik: And once you've been promoted, you may unmute your video and audio and ask your question. As a reminder, we are allowing analysts one question and one related follow-up. We will now pause for a moment to allow the queue to form. Our first question comes from Samik Chatterjee from J.P. Morgan.

Nate Melihercik: As a reminder, we are allowing analysts one question and one related follow-up today. We want to pause a moment up to the latitude to form.

Nate: As a reminder, we are allowing analysts one question and one related follow-up today.

Nate: We will now pause a moment to allow the queue to form.

Nate Melihercik: Our first question comes from Smith Chatterjee from JP Morgan. So, Samik, I believe you're on mute. Lay a look; if you can help him out, that'd be great. Yes, Samik, I see your mic is open. You may need to change the input.

Speaker Change: Our first question comes from Samik Chatterjee from J.P. Morgan.

Nate Melihercik: Samik, I believe you're on mute. Layla, if you can help him out, that'd be great. Yes, Samik, I see your mic is...

Speaker Change: Samik, I believe you're on mute. Layla, if you can help him out, that'd be great.

Nate Melihercik: Yes, Samik, I see your mic is open. You may need to change the input. We'll go ahead and move to our next analyst, and we'll return to you, Samik. Our next question will come from Jern Iffert from UBS.

Nate Melihercik: We'll go ahead and move to our next analyst, and we'll return to you, Samik.

Speaker Change: We'll go ahead and move to our next analyst and we'll return to you, Samik.

Unknown Executive: Our next question will come from your expert from UBS. Thank you. Thanks for taking my question. Hello, everybody. Can you hear me? Yes, good morning. You're in. How are you? All right. Thanks. Thanks for taking the questions. There's one starting question in the follow-up. There's a starting question. Do you see still in and still out, so it's true to trending to the same corridor now in Q2, because you have not reiterated your bus, is it an LED guidance for Q2 in the report? So, I guess you're asking about our forward-looking outlook. So, we've raised a little bit, as you can see, to one to three from zero to two on the top line, and also on the bottom line, we've raised a little bit from minus two to plus two and now to zero to plus four.

Speaker Change: Our next question will come from Jrn Iffert from UBS.

Jrn Iffert: Thank you. Thanks for taking my question. Hello, everybody. Can you hear me?

Jrn Iffert: Thank you. Thanks for taking my question. Hello, everybody. Can you hear me?

Nate Melihercik: Yes, good morning Jorn, how are you?

Jrn Iffert: All right, thanks. And thanks for taking the questions. There's one starting question and one follow-up, please. The starting question is, please, do you see sell-in and sell-out or sell-through trending to the same corridor now in Q2 because you have not reiterated your above seasonality guidance for Q2 in the report?

Speaker Change: Yes. Good morning, Jorn. How are you?

Speaker Change: All right, thanks. And thanks for taking the questions. There's one starting question and the follow-up, please. The starting question is, please...

Jrn Iffert: Do you see sell-in and sell-out or sell-through to trending to the same corridor now in Q2 because you have not reiterated your above seasonality guidance for Q2 in the report?

Hanneke Faber: So I guess you're asking about our forward-looking outlook. So we've raised a little bit, as you can see, to one to three, from zero to two on the top line. And also on the bottom line, we've raised a little bit from minus two to plus two, now to zero to plus four. What does that reflect? It might be helpful just to touch on that.

Jrn Iffert: So,

Speaker Change: I guess you're asking about our forward-looking outlook, so we've raised a little bit, as you can see, to 1 to 3, from 0 to 2 on the top line.

Speaker Change: And also on the bottom line, we've raised a little bit from minus 2 to plus 2, now to 0 to plus 4.

Unknown Executive: What does that reflect that may be helpful just to touch on that? So, that reflects the higher demand we're seeing in Q1, which we're really pleased by. At the same time, where we don't see a change, is what we talked about last quarter, which is in Q1, N Q2, Celen will be larger than Celen. That is planned. We need to boost channel inventory, because we're shifting to growth mode, and we have to get ready for the big selling seasons, especially those in Q3 at the holidays. In Q3 and Q4, that dynamic is going to reverse.

Speaker Change: What does that reflect that may be helpful just to touch on that. So that reflects the higher demand we've seen in Q1, which we're really pleased by.

Hanneke Faber: So that reflects the higher demand we've seen in Q1, which we're really pleased about. At the same time, where we don't see a change is what we talked about last quarter, which is that in Q1 and Q2, sell-in will be larger than sell-out. That is planned.

Speaker Change: At the same time, where we don't see a change is what we talked about last quarter, which is in Q1 and Q2, sell-in will be larger than sell-out.

Hanneke Faber: We need to boost channel inventory because we're shifting to growth mode, and we have to get ready for the big selling seasons, especially those in Q3 at the holidays. In Q3 and Q4, that dynamic is going to reverse. So the sell-out will be larger than the sell-in. There are no changes there. And so what you're seeing in our new forecast is that we are flowing through increased demand that is higher than expected that we saw in Q1, but no change for the rest of the year.

Speaker Change: That is planned. We need to boost channel inventory because we're shifting to growth mode and we have to get ready for the big selling seasons, especially those in Q3 at the holidays.

Speaker Change: In Q3 and Q4, that dynamic is going to reverse. So sell-out will be larger than sell-in.

Unknown Executive: So, sell out will be larger than Celen. No changes there, so what you're seeing in our new forecast is that we are flowing through the increased demand that is already an expected that we're seeing in Q1, but no change for the rest of the year.

Speaker Change: No changes there. So what you're seeing in our new forecast is that we are flowing through the increased demand that is higher than expected that we've seen in Q1, but no change for the rest of the year.

Jrn Iffert: Thank you, and then allow me to follow up. Given the consumer weakness we have seen from so many companies recently, do you see that promotion has increased again in the exit rates, so by May, June, in your Q1?

Unknown Executive: Thank you, and then allow me to follow up. Given the consumer weakness you have seen from so many companies recently, do you see that promotions have increased again in the exit rates, so by May June, in your Q1? Yeah, no, not yet. So, I think promotional discipline has been a good part of our Q1 results. And our teams have just been extremely disciplined. So, not yet, but again, that is part of looking forward. You know, a little bit of our caution is if May increase going forward, we're always going to promote as much as necessary in the market.

Speaker Change: Thank you and then allow me the follow-up.

Speaker Change: Given the consumer weakness we have seen from so many companies recently, do you see that promotion have increased again in the exit rates, so by May, June , in your Q1?

Hanneke Faber: Yeah, no, not yet. So, I think promotional discipline has been a good part of our Q1 results, and our teams have just been extremely disciplined. So, not yet, but again, that is part of looking forward, and, you know, a little bit of our caution is that it may increase going forward. We're always going to promote as much as is necessary in the market.

Hanneke Faber: Yeah. Or not really? No, not yet. So I think promotional discipline has been a...

Speaker Change: Yeah, no, not yet. So I think promotional discipline has been a good part of our Q1 results.

Speaker Change: And our teams have just been extremely disciplined, so not yet, but again, that is part of looking forward and, you know, a little bit of our caution is it may increase going forward. We're always going to promote as much as is necessary in the market.

Unknown Executive: Thank you very much. Thanks, Johan.

Speaker Change: Thank you very much.

Johanna: Thank you, George.

Ananda Baruah: Our next question comes from Ananda Baruah from Loop Capital. Yeah, good morning, guys. They should take in the question; really appreciate it. Yeah, too, if I could. I guess the first one is Hanukkah on the last call, and this is really more big picture. I think you talked about the most impactful opportunities as you see them being geographic walletshare, you know, kind of true up, B2B and expansion of work and play. And I guess just any incremental thoughts there or, or, you know, kind of progress slash actions last 90 days that have been taken, you know, to sort of go with those and then have a quick follow-up as well.

Nate Melihercik: Our next question comes from Ananda Baruah from Loop Capital.

Speaker Change: Our next question comes from Ananda Baruah from Loop Capital.

Ananda Prosad Baruah: Yeah, good morning, guys. Thanks for taking the question. I really appreciate it. Yeah, two, if I could. I guess the first one is Hanneke on the last call, and this is really more about the bigger picture.

Ananda Prosad Baruah: Yeah, good morning, guys. Thanks for taking the question. Really appreciate it. Yeah, two if I could. I guess the first one is Hanneke, on the last call, and this is really more big picture. I think you talked about

Ananda Prosad Baruah: I think you talked about the most impactful opportunities, as you see them being geographic wallet share, you know, kind of true up, B2B, and expansion of work and play. And I guess just any incremental thoughts there or, or, you know, kind of progress slash actions in the last 90 days that have been taken, you know, to sort of go with those. And then I have a quick follow-up as well. Thanks.

Speaker Change: The most impactful opportunities as you see them being geographic wallet share, you know, kind of true up, B2B.

Speaker Change: and expansion of work in play and I guess just any incremental thoughts

Speaker Change: You know, kind of progress slash actions the last 90 days that have been taken, you know, to

Hanneke Faber: Thanks. Yeah, absolutely. No, thanks for that question. Clearly we're working on all of those three things, and it's too early to see massive changes. But there's a few things I'm pleased by. When it comes to geography, we're seeing really broad-based growth in the quarters. So the Americas up 9%, EMEA up 20%, and APEC up 13. So that's really broad-based and a particularly standout performance from EMEA, where execution just has been outstanding. When it comes to B2B, yes, we are doubling down and pleased to see growth in the segments, up 9%. Market probably a little more robust than it has been, which is also great to see.

Speaker Change: to sort of go with those. And then I have a quick follow-up as well. Thanks. Yeah, absolutely. No, thanks for that question. Clearly, we're working on all of those three things.

Speaker Change: It's too early to see massive changes, but there's a few things I'm pleased by. When it comes to geography, we're seeing really broad-based growth in the quarters. So the Americas up 9%, EMEA up 20%.

Speaker Change: and APEC up 13. So that's really broad-based and a particularly standout performance from EMEA where execution just has been outstanding.

Speaker Change: When it comes to B2B, yes, we are doubling down and pleased to see growth in the segments of 9%.

Speaker Change: Market probably a little more robust than it has been, which is also great to see. And we continue to build capabilities. And that's both on the product side, where we had a great launch of the Meetup 2.

Hanneke Faber: And we continue to build capabilities. And that's both on the product side where we had a great launch of the Meetup 2 in the quarters, but also on the organizational talent and services side. So I'm excited about the steps we're taking there to really double down on that B2B business, where we still have so much opportunity. And then finally on Work and Play expansion, that's clearly a multi-year program. But again, some green shoots. We had terrific results in education in the quarter. That's a new space for us. I talked about how, you know, today we mostly focus on offices when it comes to B2B.

Speaker Change: in the quarter, but also on the organizational talent and services side. So I'm excited about the steps we're taking there to really double down on that B2B business where we still have so much opportunity.

Hanneke Faber: So I'm excited about the steps we're taking there to really double down on that B2B business, where we still have so much opportunity. And then, on work and play expansion, that's clearly a multi-year program. But again, some green shoots.

Speaker Change: And then finally, on work and play expansion, that's clearly a multi-year...

Speaker Change: Program. But again, some green shoots. We had terrific results in education in the quarter. That's a new space for us. I talked about how, you know, today we mostly focus on offices when it comes to B2B, you know, you and I on a video conference, you and I at our desk.

Hanneke Faber: We had terrific results in education in the quarter. That's a new space for us. I talked about how, you know, today we mostly focus on offices when it comes to B2B. You know, you and I on a video conference, you and I at our desks, but most people in the world don't work in offices.

Hanneke Faber: You know, you and I on a video conference, you and I are at our desk. But most people in the world don't work in offices. Education is the first other workplace we started to focus on. And our again, our results in the quarter, very, very strong, more than 20% growth in education behind great products like the rugged portfolio. So love that. And then more is to come. We also announced the launch in the quarter of the MX Inc, which is a stylist for the Meta Oculus headset. Again, you can imagine how that goes into new work verticals as well in the future.

Hanneke Faber: Education is the first other workplace we've started to focus on, and again, our results in the quarter are very, very strong. More than 20% growth in education behind great products like the Rugged portfolio. So, I love that.

Speaker Change: But most people in the world don't work in offices.

Speaker Change: Education is the first other workplace we started to focus on and our again our results in the quarter very very strong more than 20% growth in education behind

Speaker Change: I'm sure you'll find a lot of great products like the Rugged portfolio. So, love that. And then more is to come. We also announced the launch in the quarter of the MX Ink, which is a stylus for the MESA Oculus headset.

Hanneke Faber: And then more is to come. We also announced the launch in the quarter of MX Inc., which is a stylus for the Meta Oculus headset. Again, you can imagine how that goes into new work verticals as well in the future. And again, these will be small to start with. This is a multi-year effort. But I'm excited about some of the green shoots that we're starting to see.

Speaker Change: Again, you can imagine how that goes into new work verticals as well in the future. And again, these will be small to start with. This is a multi-year effort. But I'm excited about some of the green shoots that we're starting to see.

Hanneke Faber: And again, these will be small to start with. This is a multi-year effort. But I'm excited about some of the green shoots that we're starting to see.

Hanneke Faber: And that stuff fills into the follow-up. I appreciate the context. That's super helpful. There sort of throughout the quarter, there is sort of the idea in the investment community that the keyboard business is benefiting from or preparing to benefit from PC refresh, some of which is AI driven. So it's sort of an AI. component to sort of keyboard pull. With love context, you sort of, how does the company think about that? Would the company agree with that? And what is the company's view around keyboards and AI pull? You know, any context there would be great.

Ananda Prosad Baruah: And that dovetails into the follow-up. I appreciate the context. That's super helpful.

Speaker Change: And that dovetails into the follow-up. I appreciate the context, that's super helpful.

Ananda Prosad Baruah: Throughout the quarter, there is a sort of idea in the investment community that the keyboard business is benefiting from or preparing to benefit from a PC refresh, some of which is AI-driven. So it's sort of an AI to sort of keyboard pulls. We'd love context, sort of what does the company think about that? Would the company agree with that? And what is the company's view around keyboards and AI pull? you know? Any context there would be great. The near term and even bigger picture. Yeah,

Speaker Change: Yeah.

Speaker Change: Sort of throughout the quarter, there is sort of the idea in the investment community that the keyboard business is benefiting from or preparing to benefit from PC refresh, some of which is AI driven, so it's sort of an AI component.

Speaker Change: to sort of keyboard pulls. We'd love context. You sort of how does the company think about that? Would the company agree with that? And and what is the company's view around keyboards and?

Speaker Change: AI pull, you know, any context there would be great, near term and even bigger picture.

Hanneke Faber: In their term and even bigger picture. Yeah. I think the top line is we're very bullish on mice and keyboards. You know, that's the core of the core of our business. That's where we started. And it's still a great business. We are not one-to-one correlated to PC refreshes, but it certainly can't hurt if people are buying new PCs. So that's a good thing. And then AI will play a big role. You know, we've always been the human machine interface ever since the start of this company 40 years ago. And we can now really be the link between the human and the large language model via our mice and keyboards.

Hanneke Faber: Yeah, I think the top line is that we're very bullish on mice and keyboards. You know, that's the core of the core of our business. That's where we started. And it's still a great business.

Speaker Change: Yeah.

Speaker Change: I think the top line is we're very bullish on mice and keyboards, you know, that's that's the core of the core of our business. That's where we started.

Speaker Change: And it's still a great business.

Hanneke Faber: We are not one-to-one correlated to PC refreshes, but it certainly can't hurt if people are buying new PCs. So that's a good thing. And then AI will play a big role. You know, we've always been the human machine interface ever since the start of this company 40 years ago, and we can now really be the link between the human user and the large language models via our mice and keyboards. So we've started to do that. The Logi AI Prompt Builder is a free piece of software that sits on all our mice and keyboards since April. It allows you to use a shortcut to chat GPT.

Speaker Change: We are not one-to-one correlated to PC refreshes, but it certainly can't hurt if people are buying new PCs, so that's a good thing.

Speaker Change: And then AI will play a big role. We've always been the human-machine interface ever since the start of this company 40 years ago.

Speaker Change: And we can now really be the link between the human and the large language model via our mice and keyboards. So we've started to do that. The Logi AI Prompt Builder is a free piece of software that sits in all our mice and keyboards.

Hanneke Faber: And so we started to do that. The Logitech Prom Builder is a free piece of software that sits in all our mice and keyboards since April. It allows you to shortcut to Chat GPT. And it's quite popular. Five and a half million unique user interactions since the middle of April. That's pretty good. So I'm excited. Again, this is just a start of how we're serving as that interface to the large language model. It's through our mice and keyboards, but it's exciting. Thanks a lot. That's super helpful. Appreciate it. Thank you.

Hanneke Faber: And it's quite popular. Five and a half million unique user interactions since the middle of April. That's pretty good. So I'm excited. Again, this is just the start of how we're serving as that interface to the large language models through our mice and keyboards. But it's exciting.

Speaker Change: Since April , it allows you to shortcut to chat GPT, and it's quite popular. Five and a half million unique user interactions since the middle of April . That's pretty good.

Speaker Change: So I'm excited. Again, this is just the start of how we're serving as that interface to the large language models through our mice and keyboards. But it's exciting.

Nate Melihercik: Thanks a lot. That's super helpful. I appreciate it. Thanks, Ananda. Great to see you. As a reminder, if...

Speaker Change: Thanks a lot. That's super helpful. Appreciate it. Thanks, guys.

Nate Melihercik: As a reminder, if you would like to ask a question, please select the raised hand icon, which can be found at the bottom of your Zoom window. Then accept the invitation to become a panelist and turn your camera on. We will now also accept further follow-ups. There are no raised hands at this time, Nate. Okay. Layla will give it one minute, and then we'll wrap it.

Nate Melihercik: As a reminder, if you would like to ask a question, please select the raise hand icon, which can be found at the bottom of your zoom window. Then accept the invitation to become a panelist and turn your camera on. We will now also accept further follow-up. There are no raised hands at this time, Nate.

Speaker Change: yeah

Speaker Change: As a reminder, if you would like to ask a question, please select the raise hand icon, which can be found at the bottom of your zoom window. Then accept the invitation to become a panelist and turn your camera on.

Speaker Change: We will now also accept further follow-ups.

Speaker Change: There are no raised hands at this time, Nate.

Speaker Change: Okay.

Nate Melihercik: Hello, we'll give it one minute and then we'll wrap it up. There are no other questions. Oh yes, we appear to have a follow-up from Yarn. He's now being promoted to panelist.

Nate Melihercik: There are no other questions.

Speaker Change: We'll give it one minute and then we'll wrap it. There are no other questions.

Nate Melihercik: I have to appear to have a follow-up from Yarn. He's now being promoted to panelist. Great, thank you.

Nate Melihercik: I guess the computer has a follow-up from Yarn. He's now being promoted to panelists with you with us in a moment. Great. Thank you. Thanks. I'm sorry. I think it takes a while until I can join as a panelist again. Sorry for the silence. And yeah, a follow-up please. I mean, can you distinguish between your price and volume performance? And for the quarter, is price still a significant contributor here? Price it makes. So is it mainly volume trip to start? Maybe with this one, if I may. I would say Hi, Yarn. I would say that it's mainly volume driven.

Speaker Change: Yes, we appear to have a follow-up from Yarn. He's now being promoted to panelist. He'll be with us in a moment.

Yarn: Great, thank you.

Jrn Iffert: Thanks. And sorry, I think it will take a while until I can join as a panelist again. So sorry for the silence. And yeah, a follow-up, please.

Yarn: Thanks and sorry, I think it takes a while until I can join as a panelist again, so sorry for the silence.

Jrn Iffert: I mean, can you distinguish between your price and volume performance? And for the quarter, is price still a significant contributor here? Price at mix, or is it mainly volume trips?

Yarn: A follow-up, please. Can you distinguish between your price and volume performance? For the quarter, is price still a significant contributor here, price at mix, or is it mainly volume driven? We'll start maybe with this one, if I may.

Hanneke Faber: We'll start, maybe, with this one, if I may.

Hanneke Faber: I would say that it's mainly volume driven; our prices have stayed fairly steady. We do have some promotions in the quarter, but it has stayed fairly flat with last quarter.

Speaker Change: I would say that it's mainly volume-driven. Our prices have stayed fairly steady. We do have some

Unknown Executive: Our prices have stayed fairly steady. We do have some promo in the in the quarter, but it has stayed fairly flat with last quarter. Okay. All right. Thanks.

Yarn: [inaudible]

Jrn Iffert: Okay. All right. Thanks.

Unknown Executive: And then, if you allow me a follow-up, I think in the last earnings call you mentioned APEC should be the key driver. Now it turns out in here is key driver, but of course it was worth a full year. But you mentioned to have your view on the reaches change now over the last two to three months. Yeah, I'm not sure that we actually said that APEC should be. I think we talked about, you know, what might be impacts on gross margins. So mixes is an impact on gross margin. And if Europe and the US are a little better, APEC is a little worse, that's a positive tailwind on gross margin.

Yarn: Okay.

Speaker Change: Alright, thanks. And then if you allow me a follow-up, I think in the last earnings call you mentioned APEC should be the key driver.

Jrn Iffert: And then, if you allow me a follow-up, I think in the last earnings call, you mentioned APEC should be the key driver. Now it turns out EMEA is the key driver, but of course, it was worth a full year what you mentioned. So, has your view on the regions changed now over the last two to three months? And also on categories? Is it still tablet peripherals, which would be the strongest growing category? Or has this changed?

Speaker Change: Now it turns out EMEA is key trial, but of course it was worth the full year what you mentioned. So has your view on the regions changed now over the last two to three months and also same on categories? Is it still tablet peripherals, which would be the strongest growing category or has this changed?

Hanneke Faber: Yeah, I'm not sure that we actually said that APEC should be. I think we talked about what might be impacts on gross margins. So a mix is an impact on gross margin. And if Europe and the US are a little better, APEC is a little worse, that's a positive; that's a tailwind on gross margin. And the same is true with our video conferencing business; if that grows faster, that's a tailwind on gross margin. So I think we should have talked about it that way.

Speaker Change: Yeah, I'm not sure that we actually said that APEC should be. I think we talked about, you know, what might be...

Speaker Change: impacts on gross margin. So a mix is an impact on gross margin. And if Europe and the US are a little better, APEC is a little worse. That's a positive, that's a tailwind on gross margin.

Unknown Executive: And the same is true with our video conferencing business. If that gross faster, that's a tailwind on gross margins. So I think we talked about it that way. That said, you know, I'm super pleased with the broad-based profile of our gross. APEC had a robust result at plus 13%, but Europe really was a star. And again, driving a good portion of that increased demand that was a little unexpected versus what we were seeing last quarter. And the execution in Europe has been particularly strong. If you've been to Media Markt recently, you're seeing a fantastic user centric shelf there that we've built, which looks fantastic, where you can really see, you know, MX versus Ergo versus our mobile line versus our baseline, really good way for people to shop.

Speaker Change: And the same is true with our video conferencing business. If that grows faster, that's a tailwind on gross margins. So I think we talked about it that way. That said, you know, I'm super pleased with the broad-based...

Speaker Change: Profile Overgrowth

Speaker Change: APEC had a robust result at plus 13%, but Europe really was a star.

Speaker Change: And again, driving a good portion of that increased demand that was a little unexpected.

Speaker Change: versus what we were seeing last quarter. And the execution in Europe has been particularly strong. If you've been to MediaMarkt recently, you're seeing a fantastic user-centric shelf there that we've built, which looks fantastic.

Hanneke Faber: That said, you know, I'm super pleased with the broad-based shelf there that we've built, which looks fantastic, where you can really see MX versus Ergo versus our mobile line versus our baseline. A really good way for people to shop. And we're seeing double-digit increases where we place them in stores. And then Europe has also done a great job with LogiPlay and LogiPlay Race Days, where we engage consumers in-store and online with our simulation wheels.

Speaker Change: where you can really see MX versus Ergo versus our mobile line versus our baseline. Really good way for people to shop and we're seeing double digit increases where we place that in stores.

Unknown Executive: And we're seeing double-digit increases where we place that in stores. And then Europe is also done a great job with logic play and logic play race days where we engage consumers in store and online with our simulation wheels. So they actually play with our product. And again, that's a great driver of sales. So who does to our European team? You know, the market in Europe is okay, but certainly not growing 20%, and that's really testament to the execution of our teams there. And you're and I just want to have give you one clarification: is that I was giving you a sequential number on the promos, and actually year over year, we did have one point of favorability on promo.

Speaker Change: And then Europe has also done a great job with LogiPlay and LogiPlay Race Days, where we engage consumers in-store and online with our simulation wheels.

Hanneke Faber: So, they actually play with our product. And again, that's a great driver of sales. So, kudos to our European team. The market in Europe is okay, but certainly not growing 20%. And that's really testament to the execution.

Speaker Change: So they actually play with our product, and again, that's a great driver of sales. So kudos to our European team. You know, the market in Europe is okay, but certainly not growing 20%, and that's really testament to the execution of our teams there.

Hanneke Faber: And Jorn, I just wanted to give you one clarification: I was giving you a sequential number on the promos, and actually, year over year, we did have one point of favorability on promos, but as I said before, it was mainly volume.

Yorn: and Yorn, I just wanted to make one...

Yorn: Jorn, I just wanted to give you one clarification, is that I was giving you a sequential number on the promos, and actually year over year we did have one point of favorability on promo, but as I said before, it was mainly volume.

Unknown Executive: And, but as I said before, it was mainly volume. Okay, great. Thank you very much. Thank you, Erin.

Jrn Iffert: Great, thank you very much. Thank you, Jorn. Our next question comes from Lucas. Lucas Clemser from Barenberg.

Yorn: Okay, great, thank you very much.

Yaron: Thank you, Jorn.

Lucas Clemser: Our next question comes from Lucas. Lucas Clemser from Baronburg. Please go ahead, Lucas. Lucas, the line is open. Feel free to ask your question. Okay, well, we wait for Lucas. As another reminder, the raise hand button can be found at the bottom of your Zoom interface, which will then promote you to panelists.

Nate Melihercik: Our next question comes from Lucas. Lucas Plumser from Barenburg.

Speaker Change: Our next question comes from Lucas Glumser from Barenburg.

Nate Melihercik: Please go ahead, Lucas. Lucas, your line is open; feel free to ask your question. Okay, while we wait for Lucas, as another reminder, the raise hand button can be found at the bottom of your Zoom interface. We'll then promote you to panelists. All right, we seem to have no further questions at this time.

Speaker Change: Please go ahead, Lucas.

Speaker Change: Now Lucas, your line is open. Feel free to ask your question.

Speaker Change: Okay, while we wait for Lucas, as another reminder, the raise hand button can be found at the bottom of your Zoom interface. We'll then promote you to panelist.

Speaker Change: All right, Nate, we seem to have no further questions at this time.

Nate Melihercik: All right, now we seem to have no further questions at this time. Okay. Thank you, everybody. And thank you for your questions this morning. Hanneke? Yeah, thank you, Nate. Thank you all. Of course, if you have other questions, Samik Lucas, there will be follow-ups. Thanks for joining us here. Thanks for your interest in Logitech. And again, I will be remister not to say thank you to the Logitech teams around the world for everything they did in the quarter, and we'll continue to do throughout the year. We're looking forward to seeing you next quarter. Thanks, everyone.

Nate Melihercik: Thank you, everybody, and thank you for your questions this morning. Hanneke.

Speaker Change: Okay.

Speaker Change: Thank you everybody and thank you for your questions this morning. Hanneke.

Hanneke Faber: Yeah, thank you, Nate. Thank you all. Of course, if you have other questions, Samik, Lucas, there'll be follow-ups.

Speaker Change: Yeah, thank you, Nate. Thank you all.

Hanneke Faber: Thanks for joining us here. Thanks for your interest in Logitech. And again, I'd be remiss not to say thank you to the Logitech teams around the world for everything they did in the quarter and will continue to do throughout the year. I'm looking forward to seeing you next quarter. Thanks, everyone.

Speaker Change: Of course, if you have other questions, Samik, Lucas, there will be follow-ups. Thanks for joining us here. Thanks for your interest in Logitech. And again, I'd be remiss to not say thank you to the Logitech teams around the world for everything they did in the quarter and will continue to do throughout the year. Looking forward to seeing you next quarter. Thanks, everyone.

Speaker Change: ? ? ? ? ? ? ? ? ?

Hanneke Faber: Thank you.