Logitech Announces Q2 Fiscal Year 2025 Results

Barchart · 10/21 20:01

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