Logitech Announces Q2 Fiscal Year 2025 Results

Company Delivers 6% Sales Growth and Strong Profitability; Raises FY 2025 Outlook

LAUSANNE, Switzerland & SAN JOSE, Calif.--(BUSINESS WIRE)--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)