INSERTING and REPLACING Logitech Announces Second Quarter Fiscal Year 2024 Results

Company Raises FY 2024 Outlook

LAUSANNE, Switzerland & SAN JOSE, Calif.–(BUSINESS WIRE)–Insert after last paragraph of release: GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

The updated release reads:

LOGITECH ANNOUNCES SECOND QUARTER FISCAL YEAR 2024 RESULTS

Company Raises FY 2024 Outlook

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 2024.

• Sales were $1.06 billion, down 8 percent in US dollars and 9 percent in constant currency, compared to the prior year.
• GAAP operating income was $157 million, up 23 percent compared to the prior year. Non-GAAP operating income was $183 million, up 17 percent compared to the prior year. In the quarter, the Company continued to reduce operating expenses, down 9 percent compared to the prior year, in line with the decline in net sales.
• GAAP earnings per share (EPS) was $0.86, up 72 percent compared to the prior year. Non-GAAP EPS was $1.09, up 30 percent compared to the prior year.
• Cash flow from operations was $223 million, up $150 million compared to the prior year. The quarter-ending cash balance was $1.16 billion. In the quarter, the Company returned $276 million of cash to shareholders through its annual dividend payment and share repurchases.

“The Logitech team stepped up execution this quarter and delivered results that demonstrate the underlying potential of our business,” said Guy Gecht, Logitech interim chief executive officer. “We made great progress toward a return to growth and exceeded our pre-pandemic profit levels. Our design-led innovation capabilities were on full display, with 16 new product introductions during the quarter. I’m proud of what our team has accomplished in this challenging environment. We remain focused on developing market leading products, operational excellence, and value creation for shareholders.”

“While our second quarter revenue was down compared to last year, we delivered expanded gross margins of 42.0% and operating margins of 17.3%,” said Chuck Boynton, Logitech chief financial officer. “Through strong operating execution and working capital management, we generated $223 million in operating cash flow and returned $276 million to our shareholders. Our focus on cost discipline with a customer-first mindset is paying off, with share growth in key categories. We remain cautiously optimistic on the balance of the year and are pleased to raise the annual outlook.”

CEO Search Update

Over the last four months, the board of directors, led by Wendy Becker, has been conducting a global CEO search looking at internal and external candidates across industries and geographies. The board has met with a number of strong, diverse and experienced candidates, and is moving closer to finalizing a decision.

Updated Full Year Outlook

Logitech raised its full-year outlook for Fiscal Year 2024:

	Previous FY 2024 outlook	New FY 2024 outlook
Sales	$3.8 – $4.0 billion	$4.0 – $4.15 billion
Sales decline (in US dollars, year over year)	16% – 12%	12% – 9%
Non-GAAP operating income	$400 – $500 million	$525 – $575 million
Non-GAAP op. inc. decline (year over year)	32% – 15%	11% – 2%

H1 2024 Results Compared to H1 2024 Outlook

Logitech exceeded its outlook for the first half of Fiscal Year 2024:

	H1 2024 outlook	H1 2024 results
Sales	$1.875 – $1.975 billion	$2.032 billion
Sales decline (in US dollars, year over year)	19% – 14%	12%
Non-GAAP operating income	$180 – $220 million	$292 million
Non-GAAP op. inc. decline (year over year)	40% – 27%	3%

Financial Results Videoconference and Webcast

Logitech will hold a financial results videoconference to discuss the results for Q2 Fiscal Year 2024 on Tuesday, October 24, 2023 at 8:30 a.m. Eastern 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 http://ir.logitech.com.

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 http://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 full Fiscal Year 2024 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 helps all people pursue their passions and is committed to doing so in a way that is good for people and the planet. We design hardware and software solutions that help businesses thrive and bring people together when working, creating, gaming and streaming. Brands of Logitech include Logitech, Logitech G, ASTRO Gaming, Streamlabs, Blue Microphones and Ultimate Ears. Founded in 1981, and headquartered in Lausanne, Switzerland, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI). Find Logitech at www.logitech.com, the company blog or @logitech.

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, 2023, Fiscal Year 2024 outlook for sales and non-GAAP operating income, CEO search update, 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 changes in inflation levels and monetary policies; our expectations regarding our expense reduction 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; 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 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, 2023, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, and our subsequent 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		2023				2022				2023				2022
Net sales		$	1,057,008			$	1,148,951			$	2,031,507			$	2,308,816
Cost of goods sold			615,403				707,026				1,211,115				1,404,246
Amortization of intangible assets			2,983				3,145				6,128				6,187
Gross profit			438,622				438,780				814,264				898,383