Logitech (LOGI) came out with quarterly earnings of $1.26 per share, beating the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of $1.13 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of +15.60%. A quarter ago, it was expected that this maker of keyboards, webcams and other computer accessories would post earnings of $0.86 per share when it actually produced earnings of $0.93, delivering a surprise of + ...

Financial Data and Key Metrics Changes - Net sales grew by 5% year over year in constant currency, with strong demand across both consumer and B2B segments [15][19] - Non-GAAP gross margin for the quarter was 42.1%, reflecting a 120 basis points decline from the previous year due to tariffs and higher promotional spending [16][70] - Operating expenses decreased by 2% year over year, representing 24.5% of net sales, down from 26.5% in the same quarter last year [17][18] Business Line Data and Key Metrics Changes - Video collaboration segment saw a 13% year over year growth, driven by strong demand in North America [15][28] - Personal workspace grew by 6% year over year, with double-digit growth in webcams and tablet accessories [15] - Gaming segment experienced a 6% growth, with significant share gains in North America and a notable recovery in China [36][100] Market Data and Key Metrics Changes - Asia Pacific region grew by 15% year over year, with strong performance in China [16][36] - EMEA region grew by 9%, driven by robust demand across all product categories [16] - North America declined by 4%, primarily due to a pause in product shipments during price negotiations [16] Company Strategy and Development Direction - The company is focused on three guiding principles: playing offense, disciplined cost control, and agility [5][6] - Continued investment in research and development, representing 6% of sales, to drive innovation and superior products [5] - Expansion in B2B markets, particularly in video conferencing, with double-digit growth in this segment [10][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing uncertainty regarding tariff policies, inflation, and customer sentiment but expressed confidence in the company's resilience [11][12] - The company expects net sales growth of 1% to 5% year over year in the second quarter, with gross margin rates projected between 41% and 42% [20][70] - Management emphasized the importance of maintaining rigorous cost discipline and agility in response to evolving market conditions [13][19] Other Important Information - The company returned $122 million to shareholders through share repurchases, consistent with its capital allocation priorities [19] - The company launched nine new products during the quarter, including innovative gaming and business solutions [9][10] Q&A Session Summary Question: Consumer reaction to price actions - Management noted a positive impact of price increases in the first quarter, contributing 50 basis points to growth, but it was too early to assess the full consumer reaction [24][25] Question: Strength of video collaboration business - Management expressed confidence in the sustainability of the 13% growth in video collaboration, although some pull-in demand may have occurred ahead of tariffs [28] Question: Economic impact of growing B2B mix - Management confirmed strong demand in the B2B segment, outpacing consumer demand, and highlighted the positive margin contribution from video conferencing products [33][34] Question: Inventory strategy and cash flow - Management indicated a strategy to pull in inventory ahead of tariffs, resulting in a strong cash flow of $125 million from operations [60][61] Question: Guidance for gross margins - Management provided detailed guidance on gross margins, expecting a negative impact from tariffs offset by price increases, with a projected range of 41% to 42% [70][71] Question: Demand patterns in Q1 - Management reported high single-digit demand growth across both B2B and consumer segments, with broad-based strength in various product lines [45][46] Question: Market share and competition - Management noted share gains in key categories but anticipated a temporary softening of shares following price increases [49][50] Question: Future growth in gaming - Management expressed optimism about the gaming segment, citing strong growth in premium segments and a recovery in share in China [36][100]

Financial Data and Key Metrics Changes - Net sales grew by 5% year over year in constant currency, with strong demand across both consumer and B2B segments [14][4] - Non-GAAP gross margin for the quarter was 42.1%, reflecting a 120 basis points decline from the previous year due to tariffs and higher promotional spending [15][16] - Operating expenses decreased by 2% year over year, representing 24.5% of net sales, down from 26.5% [16][5] - Generated $125 million in cash from operations, ending the quarter with a cash balance of $1.5 billion [17] Business Line Data and Key Metrics Changes - Video collaboration segment saw a 13% year over year growth, driven by strong demand in North America [14] - Personal workspace grew by 6% year over year, with double-digit growth in webcams and tablet accessories [14] - Gaming segment experienced a 6% growth, with significant share growth in North America and a notable recovery in China [32][33] Market Data and Key Metrics Changes - Asia Pacific region grew by 15% year over year, led by strong demand in China [15] - EMEA region grew by 9%, while North America declined by 4% due to pauses in product shipments during price negotiations [15] Company Strategy and Development Direction - The company continues to focus on long-term strategies, emphasizing investment in research and development, which accounted for 6% of sales [4] - A strategic shift towards B2B is evident, with demand in this segment outpacing consumer demand, particularly in video conferencing [8] - The company aims to reduce the share of US products originating from China from 40% to 10% by the end of the calendar year [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainty, citing a globally balanced business model and a strong brand [11] - The company anticipates continued uncertainty regarding tariff policies and inflation, but remains committed to driving growth and market share gains [12][10] - Future net sales growth is expected to be between 1% to 5% year over year in constant currency for the second quarter [18] Other Important Information - The company launched nine new products during the quarter, including a wireless gaming headset and a digital pencil for virtual reality [7] - The company returned $122 million to shareholders through share repurchases, consistent with its capital allocation priorities [17] Q&A Session Summary Question: Consumer reaction to price actions - Management noted a positive impact of 50 basis points from price increases in the first quarter, but it is too early to assess consumer reaction fully [22][24] Question: Strength of video collaboration business - Management confirmed strong demand in North America, with a 13% growth in video collaboration, though some pull-in demand may have occurred ahead of tariffs [25][26] Question: B2B performance and economic impact - B2B demand outpaced consumer demand, with strong growth in video conferencing and education sectors [30] Question: Inventory strategy and cash flow - The company plans to continue leveraging its strong balance sheet to pull in inventory ahead of tariffs, maintaining a healthy cash flow [57][58] Question: Guidance for gross margins - Management provided guidance indicating a gross margin rate between 41% and 42%, factoring in tariff impacts and price increases [67][68] Question: Impact of tariffs on future quarters - The expected tariff impact for the second quarter is between 200 to 300 basis points, with ongoing monitoring of the situation [78][79] Question: Timing to reach top line growth target - Management indicated that while the company is close to its growth target, expansion into new verticals like healthcare and government will take time [108][109]

[Financial Highlights & Management Commentary](index=1&type=section&id=Financial%20Highlights%20%26%20Management%20Commentary) Logitech reported strong Q1 FY2026 results with sales up 5% to $1.15 billion and non-GAAP operating income growing 11% to $202 million, driven by innovation and robust demand - Management attributes the strong quarterly performance to superior innovation, robust demand in B2B and consumer channels, and excellent execution across all regions[2](index=2&type=chunk) - The company returned **$122 million** in cash to shareholders through share repurchases during the quarter[3](index=3&type=chunk) Q1 FY2026 Key Financial Metrics (YoY) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Sales | $1.15 billion | +5% (USD & Constant Currency) | | GAAP Gross Margin | 41.7% | -110 bps | | Non-GAAP Gross Margin | 42.1% | -120 bps | | GAAP Operating Income | $162 million | +6% | | Non-GAAP Operating Income | $202 million | +11% | | GAAP EPS | $0.98 | +7% | | Non-GAAP EPS | $1.26 | +12% | | Cash Flow from Operations | $125 million | - | | Quarter-ending Cash | $1.5 billion | - | [Business Outlook](index=2&type=section&id=Business%20Outlook) The company projects Q2 FY2026 sales between $1.145 billion and $1.190 billion, with non-GAAP operating income ranging from $180 million to $200 million Q2 FY2026 Outlook | Metric | Guidance Range | | :--- | :--- | | Sales | $1,145 - $1,190 million | | Sales Growth (USD, YoY) | 3% - 7% | | Sales Growth (Constant Currency, YoY) | 1% - 5% | | Non-GAAP Operating Income | $180 - $200 million | [Preliminary Consolidated Financial Statements](index=4&type=section&id=Preliminary%20Consolidated%20Financial%20Statements) This section presents unaudited GAAP condensed consolidated financial statements for Q1 FY2026, detailing the company's financial position and performance [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 FY2026 net sales reached **$1.148 billion** (+5%), with GAAP operating income at **$162.1 million** (+6%) and diluted EPS at **$0.98** (+7%) Q1 Statement of Operations Highlights (in thousands, except per share) | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Net Sales | $1,147,703 | $1,088,217 | | Gross Profit | $478,962 | $466,258 | | Operating Income | $162,094 | $153,499 | | Net Income | $146,015 | $141,833 | | Diluted EPS | $0.98 | $0.92 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$3.74 billion**, total liabilities **$1.56 billion**, and cash and cash equivalents **$1.49 billion** Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,487,822 | $1,503,205 | | Total Assets | $3,742,963 | $3,538,504 | | Total Liabilities | $1,555,711 | $1,411,084 | | Total Shareholders' Equity | $2,187,252 | $2,127,420 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 FY2026 operating cash flow was **$125.0 million**, a decrease from prior year, with **$134.4 million** used in financing activities, mainly for share repurchases Q1 Cash Flow Summary (in thousands) | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $125,045 | $176,029 | | Net cash used in investing activities | ($18,100) | ($15,359) | | Net cash used in financing activities | ($134,433) | ($145,134) | [Supplemental Financial Information](index=7&type=section&id=Supplemental%20Financial%20Information) This section provides supplemental financial details, including net sales by product category, GAAP to non-GAAP reconciliation, and share-based compensation expense [Net Sales by Product Category](index=7&type=section&id=Net%20Sales%20by%20Product%20Category) Sales growth was driven by Video Collaboration (+13%), Webcams (+16%), and Tablet Accessories (+16%), with Gaming as the top revenue category at **$315.9 million** Net Sales by Product Category (in thousands) | Product Category | Q1 FY2026 Sales | Q1 FY2025 Sales | Change YoY | | :--- | :--- | :--- | :--- | | Gaming | $315,875 | $309,475 | 2% | | Keyboards & Combos | $222,492 | $215,333 | 3% | | Pointing Devices | $195,780 | $189,946 | 3% | | Video Collaboration | $166,716 | $147,042 | 13% | | Webcams | $84,374 | $72,904 | 16% | | Tablet Accessories | $91,227 | $78,539 | 16% | | Headsets | $45,523 | $44,236 | 3% | | Other | $25,716 | $30,742 | (16)% | | **Total Net Sales** | **$1,147,703** | **$1,088,217** | **5%** | [GAAP to Non-GAAP Reconciliation](index=8&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Non-GAAP operating income increased 11% to **$201.8 million**, with non-GAAP diluted EPS at **$1.26** (+12%), adjusted for share-based compensation, amortization, and restructuring charges Q1 Operating Income Reconciliation (in thousands) | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Operating income - GAAP** | **$162,094** | **$153,499** | | Share-based compensation expense | $32,828 | $23,405 | | Amortization of intangible assets | $4,795 | $5,145 | | Restructuring charges, net | $2,042 | $386 | | **Operating income - Non-GAAP** | **$201,759** | **$182,435** | Q1 Diluted EPS Reconciliation | Metric | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Diluted EPS - GAAP** | **$0.98** | **$0.92** | | **Diluted EPS - Non-GAAP** | **$1.26** | **$1.13** | [Share-Based Compensation Expense](index=9&type=section&id=Share-Based%20Compensation%20Expense) Total share-based compensation expense for Q1 FY2026 was **$32.8 million**, primarily driven by Marketing and selling (**$13.9 million**) and General and administrative (**$10.2 million**) Share-Based Compensation Expense by Function (in thousands) | Expense Category | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Cost of goods sold | $2,380 | $2,598 | | Marketing and selling | $13,930 | $11,851 | | Research and development | $6,351 | $5,739 | | General and administrative | $10,167 | $3,217 | | **Total** | **$32,828** | **$23,405** | [Notes on Financial Reporting](index=2&type=section&id=Notes%20on%20Financial%20Reporting) This section explains the use of non-GAAP financial measures and constant currency calculations, along with disclaimers for forward-looking statements and associated risks - The company uses non-GAAP financial measures, excluding items like share-based compensation, amortization of intangibles, and restructuring charges, to facilitate historical comparisons and provide investors with additional insight into performance[6](index=6&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - Sales growth is also presented in constant currency, a non-GAAP measure, to show performance unaffected by fluctuations in currency exchange rates[6](index=6&type=chunk)[29](index=29&type=chunk) - The press release contains forward-looking statements, including the Q2 FY26 outlook, which are subject to various risks and uncertainties such as macroeconomic conditions, consumer demand, and supply chain challenges[10](index=10&type=chunk)

Core Insights - The article compares LG Display (LPL) and Logitech (LOGI) to determine which stock offers better value for investors [1] - A strong Zacks Rank combined with a good Value grade is highlighted as an effective method for identifying value opportunities [2] Valuation Metrics - LG Display has a Zacks Rank of 2 (Buy), while Logitech has a Zacks Rank of 3 (Hold), indicating a more favorable earnings outlook for LPL [3] - LPL's forward P/E ratio is 6.23, significantly lower than LOGI's forward P/E of 21.54, suggesting LPL is undervalued [5] - LPL has a PEG ratio of 0.23 compared to LOGI's PEG ratio of 18.26, indicating LPL's earnings growth is expected to be more favorable relative to its price [5] - LPL's P/B ratio is 0.7, while LOGI's P/B ratio is 7.19, further supporting the notion that LPL is undervalued [6] - Based on these metrics, LPL holds a Value grade of A, whereas LOGI has a Value grade of D, making LPL the more attractive option for value investors [6]

Core Insights - Logitech is well positioned for growth, particularly in its core markets of productivity peripherals, gaming, and video conferencing [1] - The company has a balanced exposure to both B2C (approximately 60%) and B2B (approximately 40%) markets, which supports its growth strategy [1] - Continuous product innovation and resilient consumer demand, despite pricing actions, highlight the strength of Logitech's brand [1] Market Position - Logitech's growth opportunities are primarily driven by its core markets, which include productivity peripherals, gaming, and video conferencing [1] - The company's strategic focus on product innovation and launches is crucial for maintaining its competitive edge [1] Financial Fundamentals - Logitech's balanced market exposure between B2C and B2B segments provides a solid foundation for its financial performance [1] - The company has demonstrated resilience in consumer demand, indicating strong brand loyalty and market presence [1]

Group 1 - The core investment thesis for Logitech (NASDAQ: LOGI) is a buy rating, driven by strong developments in the 3Q25 results, particularly in the VC segment and the introduction of AI-powered solutions [1] - The underlying demand for Logitech's products remains robust, indicating potential for continued growth [1] - The investment strategy focuses on long-term investments while also considering short-term opportunities to uncover alpha, emphasizing a bottom-up analysis of individual companies' fundamentals [1] Group 2 - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Logitech's shares have increased by approximately 12.2% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Group 1: Earnings and Estimates - Fresh estimates for Logitech have trended upward over the past month, with the consensus estimate shifting by 15.82% [2] - The most recent earnings report indicates that the stock has shown positive catalysts that may influence future performance [1] Group 2: VGM Scores - Logitech currently holds a Growth Score of A, a Momentum Score of B, and a Value Score of C, placing it in the middle 20% for the value investment strategy [3] - The aggregate VGM Score for Logitech is B, which is relevant for investors not focused on a single strategy [3] Group 3: Outlook - The upward trend in estimates for Logitech appears promising, with a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4]

Summary of Key Points Core Viewpoint - Numerous companies are lowering their profit forecasts for 2025 due to the impact of tariffs and economic uncertainty, indicating a broader trend of caution across various industries. Group 1: Retail Sector - Abercrombie & Fitch lowered its full-year profit forecast for 2025, citing a $50 million hit from tariffs, including a 30% tariff on imports from China and a 10% tariff on other imports [1][2] - Macy's also reduced its earnings per share outlook for the year, attributing it to tariffs, moderation in consumer spending, and increased competition [3] - Target expects sales to decline throughout 2025, previously projecting a 1% growth, due to weaker spending linked to tariff uncertainties [3] Group 2: Consumer Goods and Food & Beverage - Diageo warned of a $150 million hit to annual profits in 2025 but plans to offset half of this impact through unspecified actions [4] - PepsiCo lowered its earnings forecast for 2025, facing higher supply chain costs due to tariffs and a volatile consumer environment [15] - Kraft Heinz also lowered its outlook, citing a volatile operating environment influenced by tariffs and inflation [13] Group 3: Automotive Industry - Ford expects tariffs to reduce its earnings before interest and taxes by about $1.5 billion in 2025 and has suspended its full-year guidance [8] - General Motors lowered its earnings forecast to between $10 billion and $12.5 billion, down from $13.7 billion to $15.7 billion, due to the impact of tariffs [12] - Toyota estimated a $1.25 billion profit loss in April and March due to U.S. tariffs, forecasting a nearly 21% dip in operating income through 2025 [5] Group 4: Technology and Electronics - AMD anticipates a $1.5 billion revenue loss in 2025 due to restrictions on chip shipments to China [7] - Apple expects a $900 million hit to its bottom line in the second quarter due to tariffs, complicating future predictions [10] - Logitech withdrew its outlook for the 2026 fiscal year due to ongoing tariff uncertainties [17] Group 5: Airlines and Transportation - JetBlue and Alaska Airlines both pulled their full-year guidance for 2025 due to macroeconomic uncertainty [13][17] - Delta Airlines withdrew its full-year guidance, citing broad macro uncertainty [18] - United Airlines issued a second guidance featuring significantly lower earnings for 2025, reflecting the unpredictable economic environment [17] Group 6: Miscellaneous - Steve Madden withdrew its financial guidance for 2025, facing heightened uncertainty from new tariffs [6] - Rivian lowered its targets for vehicle deliveries and capital spending for 2025 due to significant uncertainty in the global economic landscape [6] - Snap declined to issue guidance for its second quarter, citing uncertainty in macroeconomic conditions affecting advertising demand [14]

Sales Performance - Total sales for fiscal year 2025 increased by 6% compared to fiscal year 2024, driven by higher demand in Gaming, Keyboards & Combos, Pointing Devices, and Tablet Accessories [240]. - Net sales for fiscal year 2025 increased by 6% to $4,554.9 million compared to fiscal year 2024, with a constant currency sales growth rate of 7% [264]. - Sales in the EMEA, Asia Pacific, and Americas regions increased by 9%, 6%, and 4%, respectively, compared to fiscal year 2024 [240]. - The Gaming product category experienced a 9% sales increase to $1,338.5 million in fiscal year 2025, driven by higher sales of gaming mice and steering wheels [270]. - Tablet Accessories sales surged by 18% to $299.5 million in fiscal year 2025, supported by strong demand from the education sector [278]. - Other product category sales decreased by 15% to $124.2 million in fiscal year 2025, primarily due to a decline in mobile speaker sales [280]. Financial Performance - Gross margin for fiscal year 2025 improved by 170 basis points to 43.1%, up from 41.4% in fiscal year 2024, primarily due to lower product costs [241]. - Net income for fiscal year 2025 was $631.5 million, an increase from $612.1 million in fiscal year 2024, reflecting higher gross margin despite increased operating expenses [243]. - Gross profit for fiscal year 2025 was $1,962.6 million, representing a 10.4% increase from $1,778.0 million in fiscal year 2024, with a gross margin of 43.1% [281]. - Operating expenses for fiscal year 2025 were $1,307.7 million, or 28.7% of sales, compared to $1,190.7 million, or 27.7% of sales, in fiscal year 2024 [241]. - Marketing and selling expenses rose by $84.1 million in fiscal year 2025, driven by higher investments in marketing and advertising [286]. - Research and development expenses increased by $21.8 million in fiscal year 2025, reflecting greater investment in product innovation and higher personnel-related costs [288]. Tax and Income - The effective tax provision for fiscal year 2025 was $75.3 million, a significant increase from $9.5 million in fiscal year 2024, primarily due to discrete tax benefits recognized in the previous year [242]. - The provision for income taxes for fiscal year 2025 was $75,343,000, with an effective income tax rate of 10.7%, compared to $9,453,000 and 1.5% in fiscal year 2024, reflecting changes in tax positions and audit resolutions [299]. Cash Flow and Capital Management - Net cash provided by operating activities for fiscal year 2025 was $842,557,000, resulting from a net income of $631,500,000 and non-cash adjustments of $228,400,000 [317]. - Cash and cash equivalents as of March 31, 2025, were $1,503,200,000, a slight decrease from $1,520,800,000 as of March 31, 2024 [308]. - Working capital decreased to $1,491,600,000 as of March 31, 2025, from $1,545,500,000 as of March 31, 2024, primarily due to a decrease in accounts receivable and an increase in accrued liabilities [309]. - Net cash used in investing activities was $57,268,000, mainly for property, plant, and equipment purchases totaling $56,100,000 [318]. - Net cash used in financing activities was $797,360,000, primarily due to share repurchases of $588,800,000 and cash dividends of $207,900,000 [319]. Shareholder Returns and Repurchase Programs - The Board of Directors recommended a cash dividend of CHF 1.26 per share for fiscal year 2025, resulting in an aggregate gross dividend of approximately CHF 187.1 million [322]. - During the fiscal year ended March 31, 2025, the company repurchased 6.7 million shares for an aggregate cost of $588.0 million under the 2023 share repurchase program [323]. - The 2023 share repurchase program was increased by $600.0 million to a total of $1.6 billion, with plans to target $2 billion in share repurchases over the next three years [324]. - The company has a three-year share repurchase program that allows opportunistic repurchases during favorable market conditions, effective through July 27, 2026 [326]. Strategic Focus and Challenges - The company expects ongoing challenges from macroeconomic conditions, including inflation and foreign currency fluctuations, which may impact demand and pricing [237]. - The introduction of new products and business acquisitions is anticipated to significantly influence sales and operating expenses [239]. - The company is focusing on diversifying its manufacturing footprint and supplier ecosystem to mitigate risks associated with tariffs and geopolitical conditions [238]. - The ongoing growth in gaming and the adoption of new ways of working present opportunities for the company to expand its product offerings [242]. - The company has generated positive cash flows from operating activities for over ten years, but market volatility may increase costs of capital and affect business operations [328]. Investment and Commitments - As of March 31, 2025, the company had non-cancelable purchase commitments of $358.7 million for inventory purchases, with a liability of $19.6 million recorded for excess and obsolete inventory [329]. - The company has firm purchase commitments of $19.1 million for capital expenditures related to tooling and equipment for new and existing products [330]. - As of March 31, 2025, the company had $88.5 million in non-current income taxes payable related to uncertain tax positions [332]. Other Financial Metrics - Interest income for fiscal year 2025 was $54,997,000, an increase of 8.5% compared to $50,636,000 in fiscal year 2024, primarily due to a higher average cash equivalents balance [294]. - Other income (expense), net for fiscal year 2025 was a loss of $2,980,000, significantly improved from a loss of $16,376,000 in fiscal year 2024, driven by reduced losses on investments and currency exchange [295]. - As of March 31, 2025, accounts receivable, net, was $454,546,000, down from $541,715,000 in the previous year, indicating improved collection efficiency with a decrease in days sales outstanding (DSO) from 48 to 40 days [314][316].