Logitech(US:LOGI)2026-01-28 21:23Sales Performance - Sales for the three and nine months ended December 31, 2025 were $1,421.5 million and $3,755.2 million, respectively, representing a 6% increase compared to $1,340.3 million and $3,544.5 million for the same periods in 2024[118]. - Sales in the Asia Pacific region increased by 14% for the three months and 17% for the nine months ended December 31, 2025, while sales in the Americas decreased by 3% for the nine months[119]. - Total sales for the three months ended December 31, 2025, increased by 6% to $1,421,479,000 compared to $1,340,294,000 for the same period in 2024[140]. - Total sales for the nine months ended December 31, 2025, also increased by 6% to $3,755,238,000 compared to $3,544,545,000 for the same period in 2024[140]. - Sales in the Americas region decreased by 3% for the nine months ended December 31, 2025, primarily due to a decline in Gaming sales[136]. - Sales in the EMEA region increased by 9% for the nine months ended December 31, 2025, driven by sales growth in Keyboards & Combos, Video Collaboration, and Pointing Devices[138]. - Sales in the Asia Pacific region increased by 17% for the nine months ended December 31, 2025, primarily due to growth in Gaming and Tablet Accessories[139]. - Sales of Tablet Accessories increased by 21% for the three months ended December 31, 2025, benefiting from strong demand from the education sector[149]. Financial Metrics - Gross margin for the three months ended December 31, 2025 was 43.2%, an increase of 30 basis points from 42.9% in the same period of 2024[120]. - Gross profit for the three months ended December 31, 2025, was $614,639,000, a 7% increase from $574,441,000 in 2024[152]. - Operating expenses for the three months ended December 31, 2025 were $328.6 million, or 23.1% of sales, down from $339.9 million, or 25.4% of sales, in the same period of 2024[121]. - Operating expenses decreased to $328,625,000 for the three months ended December 31, 2025, from $339,885,000 in 2024, primarily due to a reduction in marketing and selling expenses[155]. - Net income for the three and nine months ended December 31, 2025 was $251.0 million and $567.7 million, respectively, compared to $200.1 million and $487.5 million for the same periods in 2024[123]. Cash Flow and Liquidity - As of December 31, 2025, cash and cash equivalents increased to $1,817.8 million from $1,503.2 million as of March 31, 2025, reflecting a strong liquidity position[173]. - Working capital as of December 31, 2025, was $1,709.1 million, up from $1,491.6 million as of March 31, 2025, driven by increases in cash and accounts receivable[174]. - Net cash provided by operating activities for the nine months ended December 31, 2025, was $834.4 million, an increase from $712.9 million in 2024[182]. - The net cash used in financing activities for the nine months ended December 31, 2025, was $483.7 million, primarily due to share repurchases and cash dividends[183]. - The company believes its historical cash flow generation and available cash balances will provide sufficient liquidity for at least the next 12 months[190]. Share Repurchase and Stock Management - The company repurchased 2.7 million shares for an aggregate cost of $239.1 million during the nine months ended December 31, 2025, under its share repurchase program[187]. - The company plans to target share repurchases of $2 billion over the three-year period ending March 31, 2028, subject to market conditions[187]. - The company’s share repurchase program is expected to remain in effect for three years through July 27, 2026, allowing for opportunistic repurchases[189]. - As of December 31, 2025, the company held a total of 14.0 million shares in treasury stock, including 1.1 million shares repurchased for cancellation and 12.9 million shares for equity incentive plans or potential acquisitions[188]. Risks and Challenges - The company expects continued challenges from macroeconomic conditions, including inflation and supply chain disruptions, which may impact future performance[116]. - The company is exposed to market risk due to adverse changes in currency exchange rates and interest rates, which could materially impact financial results[198]. - Approximately 54% of sales during the three months ended December 31, 2025 were denominated in currencies other than the U.S. Dollar, indicating exposure to foreign exchange fluctuations[135]. - An adverse 10% foreign currency exchange rate change would have resulted in an adverse effect on income before income taxes of approximately $21.1 million as of December 31, 2025[202]. - If the U.S. Dollar had weakened by 10%, the amount recorded in accumulated other comprehensive income related to foreign exchange contracts would have been negatively impacted by approximately $40.0 million as of December 31, 2025[204]. Future Outlook - The ongoing growth in gaming and new ways of working post-pandemic present significant opportunities for the company to expand its product offerings[114]. - The company is focusing on diversifying its manufacturing footprint and supplier ecosystem to mitigate risks associated with component availability and pricing[116]. - The company anticipates that its sales growth rates in constant currency would have been 4% for both the three and nine months ended December 31, 2025, if currency exchange rates had been constant[133]. Taxation - The provision for income taxes for the three months ended December 31, 2025, was $48,091,000, with an effective income tax rate of 16.1%, compared to $45,061,000 and 18.4% in 2024[169]. - The estimated top-up tax for fiscal year 2026 is not material and has been included in the calculation of the annual effective tax rate[171]. Inventory Management - The inventory turnover ratio for the three months ended December 31, 2025, increased to 7.2 from 6.3 in the same period of 2024, indicating improved inventory management[181]. - The company has non-cancelable purchase commitments of $434.7 million for inventory purchases, with a liability of $22.5 million recorded for excess and obsolete inventory as of December 31, 2025[192]. - The company has firm purchase commitments of $20.9 million for capital expenditures related to tooling and equipment for new and existing products as of December 31, 2025[193]. Other Income - Interest income for the three months ended December 31, 2025, was $10,985,000, a decrease of $1,191,000 compared to $12,176,000 in 2024[165]. - For the three months ended December 31, 2025, total other income was $2,131,000, compared to a loss of $1,524,000 for the same period in 2024, marking a significant improvement[166]. Lease Obligations - The remaining terms of the company's non-cancelable operating leases expire in various years through 2036, with no material changes reported[191].