Company Delivers 6% Sales Growth and Strong
Profitability; Raises FY 2025 Outlook
SIX Swiss Exchange Ad hoc announcement pursuant to Art. 53 LR
— Logitech International (SIX: LOGN) (Nasdaq: LOGI) today
announced financial results for the second quarter of Fiscal Year
2025.
- Sales were $1.12 billion, up 6 percent in US dollars and 6
percent in constant currency compared to Q2 of the prior year.
- GAAP gross margin was 43.6 percent, up 210 basis points
compared to Q2 of the prior year. Non-GAAP gross margin was 44.1
percent, up 210 basis points compared to Q2 of the prior year.
- GAAP operating income was $161 million, up 3 percent compared
to Q2 of the prior year. Non-GAAP operating income was $193
million, up 5 percent compared to Q2 of the prior year.
- GAAP earnings per share (EPS) was $0.95, up 10 percent compared
to Q2 of the prior year. Non-GAAP EPS was $1.20, up 10 percent
compared to Q2 of the prior year.
- Cash flow from operations was $166 million. The quarter-ending
cash balance was approximately $1.4 billion.
- The Company returned $340 million of cash to shareholders
through its annual dividend payment and share repurchases.
“This quarter we delivered continued robust, profitable growth
driven by improving demand,” said Hanneke Faber, Logitech chief
executive officer. “Growth was broad-based, across regions,
categories, and both our consumer and business customers. We
launched a terrific set of innovations in the quarter and we are
ready for the holidays.”
“Once again, our teams executed with discipline this quarter,”
said Matteo Anversa, Logitech chief financial officer. “We
delivered year-over-year expansion of non-GAAP gross margin thanks
to the continued strength of our operations. Our strong results and
overall business momentum give us the confidence to raise our
annual outlook. I’m impressed by the team, our excellent
operational rigor and the many opportunities for future
growth.”
Outlook
Logitech raised its full-year outlook for Fiscal Year 2025:
Previous FY25 outlook
New FY25 outlook
Sales
$4.34 - $4.43 billion
$4.39 - $4.47 billion
Sales growth (in US dollars, year over
year)
1% - 3%
2% - 4%
Non-GAAP operating income
$700 - $730 million
$720 - $750 million
Non-GAAP op. inc. growth (year over
year)
0% - 4%
3% - 7%
Financial Results Videoconference and Webcast
Logitech will hold a financial results videoconference to
discuss the results for Q2 Fiscal Year 2025 on Tuesday, October 22,
2024 at 5:30 a.m. Pacific Daylight Time and 2:30 p.m. Central
European Summer Time. A livestream of the event will be available
on the Logitech corporate website at https://ir.logitech.com. This
press release and the Q2 Fiscal Year 2025 Shareholder Letter are
also available there.
Use of Non-GAAP Financial Information and Constant
Currency
To facilitate comparisons to Logitech’s historical results,
Logitech has included non-GAAP adjusted measures in this press
release, which exclude share-based compensation expense,
amortization of intangible assets, acquisition-related costs,
restructuring charges (credits), net, loss (gain) on investments,
non-GAAP income tax adjustment, and other items detailed under
“Supplemental Financial Information” after the tables below and
posted to our website at https://ir.logitech.com. Logitech also
presents percentage sales growth in constant currency (“cc”), a
non-GAAP measure, to show performance unaffected by fluctuations in
currency exchange rates. Percentage sales growth in constant
currency is calculated by translating prior period sales in each
local currency at the current period’s average exchange rate for
that currency and comparing that to current period sales. Logitech
believes this information, used together with the GAAP financial
information, will help investors to evaluate its current period
performance, outlook and trends in its business. With respect to
the Company’s outlook for non-GAAP operating income, most of these
excluded amounts pertain to events that have not yet occurred and
are not currently possible to estimate with a reasonable degree of
accuracy. Therefore, no reconciliation to the GAAP amounts has been
provided for the Fiscal Year 2025 non-GAAP operating income
outlook.
Public Dissemination of Certain Information
Recordings of Logitech’s earnings videoconferences and certain
events Logitech participates in or hosts, with members of the
investment community are posted on the company’s investor relations
website at https://ir.logitech.com. Additionally, Logitech provides
notifications of news or announcements regarding its operations and
financial performance, including its filings with the Securities
and Exchange Commission (SEC), investor events, and press and
earnings releases as part of its investor relations website.
Logitech intends to use its investor relations website as means of
disclosing material nonpublic information and for complying with
its disclosure obligations under Regulation FD. Logitech’s
corporate governance information also is available on its investor
relations website.
About Logitech
Logitech designs software-enabled hardware solutions that help
businesses thrive and bring people together when working, creating,
gaming and streaming. As the point of connection between people and
the digital world, our mission is to extend human potential in work
and play, in a way that is good for people and the planet. Founded
in 1981, Logitech International is a Swiss public company listed on
the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select
Market (LOGI). Find Logitech and its other brands, including
Logitech G, at www.logitech.com or company blog.
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws, including, without
limitation, statements regarding: our preliminary financial results
for the three and six months ended September 30, 2024, Fiscal Year
2025 outlook for sales and non-GAAP operating income, opportunities
for growth, and related assumptions. The forward-looking statements
in this press release are subject to risks and uncertainties that
could cause Logitech’s actual results and events to differ
materially from those anticipated in these forward-looking
statements, including, without limitation: macroeconomic and
geopolitical conditions and other factors and their impact, for
example inflation, interest rate and foreign currency fluctuations,
changes in fiscal policies, geopolitical conflicts, low economic
growth in certain regions, and uncertainty in consumer and
enterprise demand; our expectations regarding our expense
discipline efforts, including the timing thereof; changes in
secular trends that impact our business; if our product offerings,
marketing activities and investment prioritization decisions do not
result in the sales, profitability or profitability growth we
expect, or when we expect it; if we fail to innovate and develop
new products in a timely and cost-effective manner for our new and
existing product categories; issues relating to development and use
of artificial intelligence; if we do not successfully execute on
our growth opportunities or our growth opportunities are more
limited than we expect; the effect of demand variability, supply
shortages and other supply chain challenges; the effect of
logistics challenges, including disruptions in logistics; the
effect of pricing, product, marketing and other initiatives by our
competitors, and our reaction to them, on our sales, gross margins
and profitability; if we are not able to maintain and enhance our
brands; if our products and marketing strategies fail to separate
our products from competitors’ products; if we do not efficiently
manage our spending; our expectations regarding our restructuring
efforts, including the timing thereof; if there is a deterioration
of business and economic conditions in one or more of our sales
regions or product categories, or significant fluctuations in
exchange rates; changes in trade regulations, policies and
agreements and the imposition of tariffs that affect our products
or operations and our ability to mitigate; if we do not
successfully execute on strategic acquisitions and investments;
risks associated with acquisitions; and the effect of changes to
our effective income tax rates. A detailed discussion of these and
other risks and uncertainties that could cause actual results and
events to differ materially from such forward-looking statements is
included in Logitech’s periodic filings with the Securities and
Exchange Commission (“SEC”), including our Annual Report on Form
10-K for the fiscal year ended March 31, 2024, our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2024, and other reports
filed with the SEC, available at www.sec.gov, under the caption
Risk Factors and elsewhere. Logitech does not undertake any
obligation to update any forward-looking statements to reflect new
information or events or circumstances occurring after the date of
this press release.
Note that unless noted otherwise, comparisons are year over
year.
Logitech and other Logitech marks are trademarks or registered
trademarks of Logitech Europe S.A. and/or its affiliates in the
U.S. and other countries. All other trademarks are the property of
their respective owners. For more information about Logitech and
its products, visit the company’s website at www.logitech.com.
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share
amounts) - unaudited
Three months ended
September 30,
Six months ended
September 30,
GAAP CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
2024
2023
2024
2023
Net sales
$
1,116,034
$
1,057,008
$
2,204,251
$
2,031,507
Cost of goods sold
627,491
615,403
1,247,008
1,211,115
Amortization of intangible assets
2,452
2,983
4,894
6,128
Gross profit
486,091
438,622
952,349
814,264
Operating expenses:
Marketing and selling
201,863
176,356
398,768
355,541
Research and development
76,205
68,559
151,512
139,118
General and administrative
44,173
35,538
81,631
76,835
Amortization of intangible assets and
acquisition-related costs
2,725
3,318
5,428
6,003
Restructuring charges (credits), net
229
(1,788
)
615
1,723
Total operating expenses
325,195
281,983
637,954
579,220
Operating income
160,896
156,639
314,395
235,044
Interest income
14,637
11,856
30,427
21,682
Other income (expense), net
533
(1,044
)
(1,365
)
(14,016
)
Income before income taxes
176,066
167,451
343,457
242,710
Provision for income taxes
30,583
30,334
56,141
42,866
Net income
$
145,483
$
137,117
$
287,316
$
199,844
Net income per share:
Basic
$
0.95
$
0.87
$
1.88
$
1.26
Diluted
$
0.95
$
0.86
$
1.86
$
1.25
Weighted average shares used to compute
net income per share:
Basic
152,460
157,911
152,875
158,385
Diluted
153,672
158,934
154,320
159,545
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share
amounts) - unaudited
September 30,
March 31,
CONDENSED CONSOLIDATED BALANCE
SHEETS
2024
2024
Current assets:
Cash and cash equivalents
$
1,363,276
$
1,520,842
Accounts receivable, net
629,278
541,715
Inventories
520,493
422,513
Other current assets
146,511
146,270
Total current assets
2,659,558
2,631,340
Non-current assets:
Property, plant and equipment, net
112,357
116,589
Goodwill
463,712
461,978
Other intangible assets, net
34,810
44,603
Other assets
374,056
350,194
Total assets
$
3,644,493
$
3,604,704
Current liabilities:
Accounts payable
$
555,490
$
448,627
Accrued and other current liabilities
646,831
637,262
Total current liabilities
1,202,321
1,085,889
Non-current liabilities:
Income taxes payable
125,779
112,572
Other non-current liabilities
204,499
172,590
Total liabilities
1,532,599
1,371,051
Shareholders’ equity:
Registered shares, CHF 0.25 par value:
30,148
30,148
Issued shares — 173,106 at September 30,
2024 and March 31, 2024
Additional shares that may be issued out
of conditional capital — 50,000 at September 30, 2024 and March 31,
2024
Additional shares that may be issued out
of the capital band — 17,311 at September 30, 2024 and March 31,
2024
Additional paid-in capital
72,268
63,524
Shares in treasury, at cost — 21,270 at
September 30, 2024 and 19,243 at March 31, 2024
(1,518,149
)
(1,351,336
)
Retained earnings
3,626,999
3,602,519
Accumulated other comprehensive loss
(99,372
)
(111,202
)
Total shareholders’ equity
2,111,894
2,233,653
Total liabilities and shareholders’
equity
$
3,644,493
$
3,604,704
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
Three months ended
September 30,
Six months ended
September 30,
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
2024
2023
2024
2023
Cash flows from operating
activities:
Net income
$
145,483
$
137,117
$
287,316
$
199,844
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
14,597
16,637
29,103
34,135
Amortization of intangible assets
5,092
5,682
10,171
11,509
Loss (gain) on investments
413
(214
)
1,599
11,609
Share-based compensation expense
26,469
22,068
49,874
43,579
Deferred income taxes
4,827
8,146
16,489
11,108
Other
81
76
57
100
Changes in assets and liabilities, net of
acquisitions:
Accounts receivable, net
(27,616
)
(100,752
)
(81,568
)
(35,362
)
Inventories
(54,812
)
35,929
(93,907
)
146,369
Other assets
(2,666
)
(22,343
)
2,241
11,999
Accounts payable
(652
)
106,442
108,376
88,022
Accrued and other liabilities
54,786
14,476
12,280
(59,853
)
Net cash provided by operating
activities
166,002
223,264
342,031
463,059
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(14,527
)
(18,493
)
(29,113
)
(34,731
)
Acquisitions, net of cash acquired
—
(12,878
)
—
(14,138
)
Purchases of deferred compensation
investments
(2,905
)
(1,479
)
(3,600
)
(2,548
)
Proceeds from sales of deferred
compensation investments
1,561
1,551
2,299
2,622
Other investing activities
(96
)
(322
)
(912
)
(356
)
Net cash used in investing
activities
(15,967
)
(31,621
)
(31,326
)
(49,151
)
Cash flows from financing
activities:
Payment of cash dividends
(207,853
)
(182,305
)
(207,853
)
(182,305
)
Payment of contingent consideration for
business acquisition
(1,245
)
(5,002
)
(1,245
)
(5,002
)
Purchases of registered shares
(132,286
)
(93,865
)
(263,185
)
(188,941
)
Proceeds from exercises of stock options
and purchase rights
15,617
13,206
20,235
15,319
Tax withholdings related to net share
settlements of restricted stock units
(2,390
)
(2,028
)
(21,243
)
(26,224
)
Other financing activities
(1,663
)
(1,116
)
(1,663
)
(1,116
)
Net cash used in financing
activities
(329,820
)
(271,110
)
(474,954
)
(388,269
)
Effect of exchange rate changes on cash
and cash equivalents
8,681
(7,715
)
6,683
(10,758
)
Net increase (decrease) in cash and
cash equivalents
(171,104
)
(87,182
)
(157,566
)
14,881
Cash and cash equivalents, beginning of
the period
1,534,380
1,251,086
1,520,842
1,149,023
Cash and cash equivalents, end of the
period
$
1,363,276
$
1,163,904
$
1,363,276
$
1,163,904
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended September
30,
Six months ended September
30,
NET SALES
2024
2023
Change
2024
2023
Change
Net sales by product category:
Gaming (1)
$
300,470
$
282,104
7
%
$
609,945
$
548,533
11
%
Keyboards & Combos
209,936
194,914
8
425,269
375,769
13
Pointing Devices
195,936
191,676
2
385,882
366,130
5
Video Collaboration
159,660
152,389
5
306,702
291,735
5
Webcams
80,249
88,222
(9
)
153,153
163,422
(6
)
Tablet Accessories
85,614
63,677
34
164,153
134,013
22
Headsets
46,916
44,411
6
91,152
81,261
12
Other (2)
37,253
39,615
(6
)
67,995
70,644
(4
)
Total Net Sales
$
1,116,034
$
1,057,008
6
%
$
2,204,251
$
2,031,507
9
%
(1)
Gaming includes streaming services revenue
generated by Streamlabs.
(2)
Other primarily consists of mobile
speakers and PC speakers.
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands, except per share
amounts) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended
September 30,
Six months ended
September 30,
GAAP TO NON-GAAP RECONCILIATION
(A)
2024
2023
2024
2023
Gross profit - GAAP
$
486,091
$
438,622
$
952,349
$
814,264
Share-based compensation expense
3,902
2,462
6,500
3,877
Amortization of intangible assets
2,452
2,983
4,894
6,128
Gross profit - Non-GAAP
$
492,445
$
444,067
$
963,743
$
824,269
Gross margin - GAAP
43.6
%
41.5
%
43.2
%
40.1
%
Gross margin - Non-GAAP
44.1
%
42.0
%
43.7
%
40.6
%
Operating expenses - GAAP
$
325,195
$
281,983
$
637,954
$
579,220
Less: Share-based compensation expense
22,567
19,606
43,374
39,702
Less: Amortization of intangible assets
and acquisition-related costs
2,725
3,318
5,428
6,003
Less: Restructuring charges (credits),
net
229
(1,788
)
615
1,723
Operating expenses - Non-GAAP
$
299,674
$
260,847
$
588,537
$
531,792
% of net sales - GAAP
29.1
%
26.7
%
28.9
%
28.5
%
% of net sales - Non-GAAP
26.9
%
24.7
%
26.7
%
26.2
%
Operating income - GAAP
$
160,896
$
156,639
$
314,395
$
235,044
Share-based compensation expense
26,469
22,068
49,874
43,579
Amortization of intangible assets and
acquisition-related costs
5,177
6,301
10,322
12,131
Restructuring charges (credits), net
229
(1,788
)
615
1,723
Operating income - Non-GAAP
$
192,771
$
183,220
$
375,206
$
292,477
% of net sales - GAAP
14.4
%
14.8
%
14.3
%
11.6
%
% of net sales - Non-GAAP
17.3
%
17.3
%
17.0
%
14.4
%
Net income - GAAP
$
145,483
$
137,117
$
287,316
$
199,844
Share-based compensation expense
26,469
22,068
49,874
43,579
Amortization of intangible assets and
acquisition-related costs
5,177
6,301
10,322
12,131
Restructuring charges (credits), net
229
(1,788
)
615
1,723
Loss (gain) on investments
413
(214
)
1,599
11,609
Non-GAAP income tax adjustment
6,315
9,933
8,985
7,930
Net income - Non-GAAP
$
184,086
$
173,417
$
358,711
$
276,816
Net income per share:
Diluted - GAAP
$
0.95
$
0.86
$
1.86
$
1.25
Diluted - Non-GAAP
$
1.20
$
1.09
$
2.32
$
1.74
Shares used to compute net income per
share:
Diluted - GAAP and Non-GAAP
153,672
158,934
154,320
159,545
LOGITECH INTERNATIONAL S.A.
PRELIMINARY RESULTS*
(In thousands) - unaudited
SUPPLEMENTAL FINANCIAL
INFORMATION
Three months ended
September 30,
Six months ended
September 30,
SHARE-BASED COMPENSATION
EXPENSE
2024
2023
2024
2023
Share-based Compensation
Expense
Cost of goods sold
$
3,902
$
2,462
$
6,500
$
3,877
Marketing and selling
10,469
9,262
22,320
19,745
Research and development
5,067
4,694
10,806
9,147
General and administrative
7,031
5,650
10,248
10,810
Total share-based compensation
expense
26,469
22,068
49,874
43,579
Income tax benefit
(4,776
)
(2,548
)
(12,378
)
(7,866
)
Total share-based compensation expense,
net of income tax benefit
$
21,693
$
19,520
$
37,496
$
35,713
*Note: These preliminary results for the three and six months
ended September 30, 2024 are subject to adjustments, including
subsequent events that may occur through the date of filing our
Quarterly Report on Form 10-Q.
(A) Non-GAAP Financial Measures
To supplement our condensed consolidated financial results
prepared in accordance with GAAP, we use a number of financial
measures, both GAAP and non-GAAP, in analyzing and assessing our
overall business performance, for making operating decisions and
for forecasting and planning future periods. We consider the use of
non-GAAP financial measures helpful in assessing our current
financial performance, ongoing operations and prospects for the
future as well as understanding financial and business trends
relating to our financial condition and results of operations.
While we use non-GAAP financial measures as a tool to enhance
our understanding of certain aspects of our financial performance
and to provide incremental insight into the underlying factors and
trends affecting both our performance and our cash-generating
potential, we do not consider these measures to be a substitute
for, or superior to, the information provided by GAAP financial
measures. Consistent with this approach, we believe that disclosing
non-GAAP financial measures to the readers of our financial
statements provides useful supplemental data that, while not a
substitute for GAAP financial measures, can offer insight in the
review of our financial and operational performance and enables
investors to more fully understand trends in our current and future
performance. In assessing our business during the quarter ended
September 30, 2024 and prior periods presented, we excluded items
in the following general categories, each of which are described
below:
Share-based compensation expense. We believe that
providing non-GAAP measures excluding share-based compensation
expense, in addition to the GAAP measures, allows for a more
transparent comparison of our financial results from period to
period. We prepare and maintain our budgets and forecasts for
future periods on a basis consistent with this non-GAAP financial
measure. Further, companies use a variety of types of equity awards
as well as a variety of methodologies, assumptions and estimates to
determine share-based compensation expense. We believe that
excluding share-based compensation expense enhances our ability and
the ability of investors to understand the impact of non-cash
share-based compensation on our operating results and to compare
our results against the results of other companies.
Amortization of intangible assets. We incur intangible
asset amortization expense, primarily in connection with our
acquisitions of various businesses and technologies. The
amortization of purchased intangibles varies depending on the level
of acquisition activity. We exclude these various charges in
budgeting, planning and forecasting future periods and we believe
that providing the non-GAAP measures excluding these various
non-cash charges, as well as the GAAP measures, provides additional
insight when comparing our gross profit, operating expenses, and
financial results from period to period.
Acquisition-related costs. We incurred expenses and
credits in connection with our acquisitions which we generally
would not have otherwise incurred in the periods presented as a
part of our continuing operations. Acquisition-related costs
include certain incremental expenses incurred to effect a business
combination. We believe that providing the non-GAAP measures
excluding these costs, as well as the GAAP measures, assists our
investors because such costs are not reflective of our ongoing
operating results.
Restructuring charges (credits), net. These charges
(credits) are associated with restructuring plans, and will vary
based on the initiatives in place during any given period.
Restructuring charges may include costs related to employee
terminations, facility closures and early cancellation of certain
contracts as well as other costs resulting from our restructuring
initiatives. We believe that providing the non-GAAP measures
excluding these items, as well as the GAAP measures, assists our
investors because such charges (credits) are not reflective of our
ongoing operating results.
Loss (gain) on investments. We recognize losses (gains)
related to our investments in various companies, which vary
depending on the operational and financial performance of the
companies in which we invest. These amounts include our losses
(earnings) on equity method investments, investment impairments and
losses (gains) resulting from sales or other events related to our
investments. We believe that providing the non-GAAP measures
excluding these items, as well as the GAAP measures, assists our
investors because such losses (gains) are not reflective of our
ongoing operations.
Non-GAAP income tax adjustment. Non-GAAP income tax
adjustment primarily measures the income tax effect of non-GAAP
adjustments excluded above as well as the income tax impact of
non-recurring deferred taxes, tax settlements, and other
non-routine tax events, the determination of which is based upon
the nature of the underlying items.
Each of the non-GAAP financial measures described above, and
used in this press release, should not be considered in isolation
from, or as a substitute for, a measure of financial performance
prepared in accordance with GAAP. Further, investors are cautioned
that there are inherent limitations associated with the use of each
of these non-GAAP financial measures as an analytical tool. In
particular, these non-GAAP financial measures are not based on a
comprehensive set of accounting rules or principles and many of the
adjustments to the GAAP financial measures reflect the exclusion of
items that are recurring and may be reflected in the Company’s
financial results for the foreseeable future. We compensate for
these limitations by providing specific information in the
reconciliation included in this press release regarding the GAAP
amounts excluded from the non-GAAP financial measures. In addition,
as noted above, we evaluate the non-GAAP financial measures
together with the most directly comparable GAAP financial
information.
Additional Supplemental Financial Information –
Constant Currency
In addition, Logitech presents percentage sales growth in
constant currency to show performance unaffected by fluctuations in
currency exchange rates. Percentage sales growth in constant
currency is calculated by translating prior period sales in each
local currency at the current period’s average exchange rate for
that currency and comparing that to current period sales.
(LOGIIR)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241021877163/en/
Editorial Contacts: Kate Beerkens, Director of Investor
Relations – ir@logitech.com Nicole Kenyon, Head of Global Corporate
and Internal Communications – nkenyon@logitech.com (USA) Ben
Starkie, Corporate Communications – +41 (0) 79-292-3499,
bstarkie1@logitech.com (Europe/Asia)
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