Logitech(US:LOGI)2025-01-29 21:19Sales Performance - Sales for the three months ended December 31, 2024 increased by 7% compared to the same period in 2023, driven primarily by growth in Gaming and Tablet Accessories [117]. - Sales for the nine months ended December 31, 2024 increased by 8% compared to the same period in 2023, with notable increases in Gaming, Keyboards & Combos, and Tablet Accessories [117]. - Total sales reached $1,340,294 thousand for the three months and $3,544,545 thousand for the nine months ended December 31, 2024, reflecting a 7% and 8% increase, respectively [138]. - Sales in the Asia Pacific region increased by 11%, in EMEA by 9%, and in the Americas by 3% for the three months ended December 31, 2024 compared to the same period in 2023 [118]. - Sales in the Americas region increased by 3% for the three months and 5% for the nine months ended December 31, 2024, primarily driven by Gaming and Video Collaboration [134]. - EMEA region sales grew by 9% for the three months and 13% for the nine months ended December 31, 2024, mainly due to increases in Gaming and Keyboards & Combos [136]. - Asia Pacific region sales rose by 11% for the three months and 7% for the nine months ended December 31, 2024, driven by Gaming and Tablet Accessories [137]. - Gaming category sales increased by 14% for the three months and 12% for the nine months ended December 31, 2024, primarily due to higher sales of gaming mice and steering wheels [140]. - Tablet Accessories sales surged by 21% for the three months and 22% for the nine months ended December 31, 2024, supported by strong demand from the education sector [148]. Financial Metrics - Gross margin for the three months ended December 31, 2024 was 42.9%, an increase of 90 basis points compared to the same period in 2023, primarily due to lower product costs [119]. - Gross profit for the three months ended December 31, 2024, was $574,441 thousand, a 9% increase from the previous year, with a gross margin of 42.9% [151]. - Net income for the three months ended December 31, 2024 was $200.1 million, compared to $244.7 million for the same period in 2023 [122]. - Operating expenses for the three months ended December 31, 2024 were $339.9 million, or 25.4% of sales, compared to $304.7 million, or 24.3% of sales, for the same period in 2023 [120]. - Total operating expenses increased to $339,885 thousand for the three months ended December 31, 2024, primarily driven by a $27.9 million increase in marketing and selling expenses [153]. - Research and development expenses rose by $5.3 million for the three months ended December 31, 2024, reflecting increased investment in product innovation [157]. - Interest income for the nine months ended December 31, 2024, increased by $8.1 million to $42,603 thousand, driven by a higher cash equivalents balance and increased average interest rates [163]. Cash Flow and Capital Management - Net cash provided by operating activities for the nine months ended December 31, 2024 was $712.9 million, down from $906.0 million for the same period in 2023 [187]. - Net cash used in financing activities for the nine months ended December 31, 2024 was $676.1 million, primarily due to share repurchases of $463.3 million and cash dividends of $207.9 million [188]. - As of December 31, 2024, cash and cash equivalents were $1,502.8 million, a slight decrease from $1,520.8 million as of March 31, 2024 [175]. - Working capital as of December 31, 2024 was $1,479.9 million, down from $1,545.5 million as of March 31, 2024, primarily due to increased accounts payable and accrued liabilities [176]. - The company approved a three-year share repurchase program allowing up to $1.0 billion for share repurchases, with $461.4 million spent to repurchase 5.3 million shares by December 31, 2024 [192]. - The company had outstanding bank guarantees of $27.7 million as of December 31, 2024, with no borrowings under its uncommitted, unsecured bank lines of credit [177]. Tax and Other Income - The provision for income taxes for the three months ended December 31, 2024 was $45,061 thousand, with an effective income tax rate of 18.4%, compared to a benefit of $(9,594) thousand and an effective rate of (4.1)% for the same period in 2023 [168]. - For the three months ended December 31, 2024, total other income (expense), net was $(1,524) thousand, compared to $189 thousand for the same period in 2023, reflecting a significant decrease [164]. Currency and Foreign Exchange - Approximately 52% of sales for the three months ended December 31, 2024 were denominated in currencies other than the U.S. Dollar [133]. - If currency exchange rates had been constant, sales growth rates in constant currency would have been 6% and 8% for the three and nine months ended December 31, 2024, respectively [132]. - An adverse 10% foreign currency exchange rate change would have resulted in an adverse effect on income before income taxes of approximately $16.8 million as of December 31, 2024 [208]. - If the U.S. Dollar had weakened by 10%, the amount recorded in accumulated other comprehensive income (AOCI) related to foreign exchange contracts would have been approximately $12.4 million lower as of December 31, 2024 [210]. - The effect of exchange rate changes on cash and cash equivalents for the nine months ended December 31, 2024 was $(9,455) thousand, compared to $(4,080) thousand for the same period in 2023 [186]. Future Outlook - The company expects challenges from macroeconomic conditions, including inflation and interest rate fluctuations, to continue in the near term [116]. - The company plans to continue investing in B2B capabilities and releasing new products to enhance its portfolio value [116]. - The company entered into an unsecured revolving credit facility of up to $750 million on January 27, 2025, which includes options for additional commitments and extensions [178]. Inventory and Purchase Commitments - The company has non-cancelable purchase commitments of $424.8 million for inventory purchases, with a liability of $18.8 million recorded for excess and obsolete inventory as of December 31, 2024 [198]. - The company has firm purchase commitments of $22.9 million for capital expenditures related to tooling and equipment for new and existing products as of December 31, 2024 [199]. Accounts Receivable - Days sales in accounts receivable (DSO) decreased to 44 days for the three months ended December 31, 2024, down from 49 days in the same period in 2023, indicating improved sales collection [183].