UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December 31, 2022~~September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exact name of registrant as specified in its charter)


Canton of Vaud,	Switzerland	None
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Logitech International S.A.

EPFL - Quartier de l'Innovation

Daniel Borel Innovation Center

1015 Lausanne, Switzerland

c/o Logitech Inc.

~~7700 Gateway Boulevard~~3930 North First Street

~~Newark,~~San Jose, California ~~94560~~95134

(Address of principal executive offices and zip code)

~~510~~(510) 795-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Registered Shares	LOGN	SIX Swiss Exchange
Registered Shares	LOGI	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Smaller reporting company

☐

Accelerated filer

☐

Emerging Growth Company

☐

Non-accelerated filer

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ý

As of ~~January~~October 12, 2023, there were ~~160,304,010~~156,783,020 shares of the Registrant’s share capital outstanding.

Table of Contents

TABLE OF CONTENTS


		Page

Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~ Six Months Ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~ Six Months Ended ~~December 31,~~ September 30, 2023 and 2022 ~~and 2021~~	4
	Condensed Consolidated Balance Sheets as of ~~December 31, 2022~~ September 30, 2023 and March 31, ~~2022~~2023	5
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~ Six Months Ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~	6
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and ~~Nine~~Six Months Ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~	7
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3736
Item 4.	Controls and Procedures	3837
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	3938
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5938
Item 3.	Defaults Upon Senior Securities	5939
Item 4.	Mine Safety Disclosures	5939
Item 5.	Other Information	5939
Item 6.	Exhibit Index	6040
Signatures

In this document, unless otherwise indicated, references to the “Company,” “Logitech,” "we," "our," and "us" are to Logitech International S.A. and its consolidated subsidiaries. Unless otherwise specified, all references to U.S. Dollar, Dollar or $ are to the United States Dollar, the legal currency of the United States of America. All references to CHF are to the Swiss Franc, the legal currency of Switzerland.

Logitech, the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are the property of their respective owners.

Our fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday of each quarter. The ~~third~~second quarter of fiscal year ~~2023~~2024 ended on ~~December 30, 2022.~~September 29, 2023. The same quarter in the prior fiscal year ended on ~~December 31, 2021.~~September 30, 2022. For purposes of presentation, we have indicated our quarterly periods end on the last day of the calendar quarter.

The term “sales” means net sales, except as otherwise specified.

We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission ("SEC").

Table of Contents

~~We webcast~~Recordings of our earnings ~~calls~~videoconferences and certain events we participate in or host, with members of the investment community are posted on our investor relations website at https://ir.logitech.com. Additionally, we provide notifications of news or announcements regarding our operations and financial performance, including SEC filings, investor events, and press and earnings releases as part of our investor relations website. We intend to use our investor relations website as means of disclosing material ~~non-public~~nonpublic information and for complying with our disclosure obligations under Regulation FD. Our corporate governance information also is available on our investor relations website.

All references to our websites are intended to be inactive textual references only, and the ~~content~~contents of such websites do not constitute a part of and are not intended to be incorporated into this Quarterly Report on Form 10-Q.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)


		Three Months Ended December 31,				Nine Months Ended December 31,					Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net sales	Net sales	$	1,269,925	$	1,632,782	$	3,578,741	$	4,251,107	Net sales	$	1,057,008	$	1,148,951	$	2,031,507	$	2,308,816
Cost of goods sold	Cost of goods sold	789,489		971,646		2,193,735		2,470,980		Cost of goods sold	615,403		707,026		1,211,115		1,404,246
Amortization of intangible assets	Amortization of intangible assets	3,168		3,126		9,355		11,028		Amortization of intangible assets	2,983		3,145		6,128		6,187
Gross profit	Gross profit	477,268		658,010		1,375,651		1,769,099		Gross profit	438,622		438,780		814,264		898,383

Operating expenses:	Operating expenses:									Operating expenses:
Marketing and selling	Marketing and selling	196,653		269,941		628,122		778,882		Marketing and selling	176,356		202,091		355,541		431,469
Research and development	Research and development	65,640		75,529		210,166		213,436		Research and development	68,559		69,009		139,118		144,526
General and administrative	General and administrative	29,766		38,478		92,215		112,291		General and administrative	35,538		26,589		76,835		62,449
Amortization of intangible assets and acquisition-related costs	Amortization of intangible assets and acquisition-related costs	2,810		3,662		9,052		13,986		Amortization of intangible assets and acquisition-related costs	3,318		2,873		6,003		6,242
Impairment of intangible assets		—		7,000		—		7,000
Change in fair value of contingent consideration for business acquisition		—		(1,110)		—		(3,509)
Restructuring charges, net		5,654		1,759		16,471		1,770

Restructuring charges (credits), net										Restructuring charges (credits), net	(1,788)		10,817		1,723		10,817
Total operating expenses	Total operating expenses	300,523		395,259		956,026		1,123,856		Total operating expenses	281,983		311,379		579,220		655,503

Operating income	Operating income	176,745		262,751		419,625		645,243		Operating income	156,639		127,401		235,044		242,880
Interest income	Interest income	4,665		278		9,573		795		Interest income	11,856		3,459		21,682		4,908
Other income (expense), net	Other income (expense), net	1,406		(3,673)		(18,367)		(1,941)		Other income (expense), net	(1,044)		(25,397)		(14,016)		(19,773)
Income before income taxes	Income before income taxes	182,816		259,356		410,831		644,097		Income before income taxes	167,451		105,463		242,710		228,015
Provision for income taxes	Provision for income taxes	42,663		49,345		87,751		107,789		Provision for income taxes	30,334		23,372		42,866		45,088
Net income	Net income	$	140,153	$	210,011	$	323,080	$	536,308	Net income	$	137,117	$	82,091	$	199,844	$	182,927

Net income per share:	Net income per share:									Net income per share:
Basic	Basic	$	0.87	$	1.26	$	1.98	$	3.19	Basic	$	0.87	$	0.50	$	1.26	$	1.12
Diluted	Diluted	$	0.86	$	1.24	$	1.96	$	3.14	Diluted	$	0.86	$	0.50	$	1.25	$	1.11

Weighted average shares used to compute net income per share:	Weighted average shares used to compute net income per share:									Weighted average shares used to compute net income per share:
Basic	Basic	161,244		167,090		163,042		167,953		Basic	157,911		163,186		158,385		163,937
Diluted	Diluted	162,529		169,707		164,427		171,027		Diluted	158,934		164,328		159,545		165,371

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)

Three Months Ended
December 31, Nine Months Ended
December 31,
2022 2021 2022 2021
Net income $ 140,153 $ 210,011 $ 323,080 $ 536,308
Other comprehensive income (loss):
Currency translation gain (loss):
Currency translation gain (loss), net of taxes 33,076 (5,806) (6,207) (9,733)
Reclassification of cumulative translation adjustments included in other income (expense), net 219 — 219 1,051
Defined benefit plans:
Net gain (loss) and prior service costs, net of taxes (104) (443) 8 (848)
Reclassification of amortization included in other income (expense), net (112) 211 (338) 634
Hedging gain (loss):
Deferred hedging gain (loss), net of taxes (6,325) 1,061 5,239 3,723
Reclassification of hedging gain included in cost of goods sold (4,728) (3,200) (11,766) (5,108)
Total other comprehensive gain (loss) 22,026 (8,177) (12,845) (10,281)
Total comprehensive income $ 162,179 $ 201,834 $ 310,235 $ 526,027


	Three months ended September 30,				Six months ended September 30,
	2023		2022		2023		2022
Net income	$	137,117	$	82,091	$	199,844	$	182,927
Other comprehensive income (loss):
Currency translation loss:
Currency translation loss, net of taxes	(10,622)		(18,063)		(12,151)		(39,283)

Defined benefit plans:
Net gain and prior service costs, net of taxes	—		28		—		112
Reclassification of amortization included in other income (expense), net	(244)		(113)		(248)		(226)
Hedging gain (loss):
Deferred hedging gain, net of taxes	2,078		4,935		1,374		11,564
Reclassification of hedging loss (gain) included in cost of goods sold	1,370		(4,947)		4,356		(7,038)
Total other comprehensive loss	(7,418)		(18,160)		(6,669)		(34,871)
Total comprehensive income	$	129,699	$	63,931	$	193,175	$	148,056

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(unaudited)


		December 31, 2022		March 31, 2022			September 30, 2023		March 31, 2023
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,036,131	$	1,328,716	Cash and cash equivalents	$	1,163,904	$	1,149,023
Accounts receivable, net	Accounts receivable, net	802,435		675,604		Accounts receivable, net	656,895		630,382
Inventories	Inventories	797,695		933,124		Inventories	532,943		682,893
Other current assets	Other current assets	125,088		135,478		Other current assets	138,482		142,876
Total current assets	Total current assets	2,761,349		3,072,922		Total current assets	2,492,224		2,605,174
Non-current assets:	Non-current assets:					Non-current assets:
Property, plant and equipment, net	Property, plant and equipment, net	118,183		109,807		Property, plant and equipment, net	122,027		121,503
Goodwill	Goodwill	454,471		448,175		Goodwill	461,401		454,610
Other intangible assets, net	Other intangible assets, net	69,364		83,779		Other intangible assets, net	58,081		63,173
Other assets	Other assets	335,879		320,722		Other assets	291,297		316,293
Total assets	Total assets	$	3,739,246	$	4,035,405	Total assets	$	3,425,030	$	3,560,753
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity					Liabilities and Shareholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	491,488	$	636,306	Accounts payable	$	492,905	$	406,968
Accrued and other current liabilities	Accrued and other current liabilities	705,569		784,848		Accrued and other current liabilities	594,042		643,139
Total current liabilities	Total current liabilities	1,197,057		1,421,154		Total current liabilities	1,086,947		1,050,107
Non-current liabilities:	Non-current liabilities:					Non-current liabilities:
Income taxes payable	Income taxes payable	117,608		83,380		Income taxes payable	114,235		106,391
Other non-current liabilities	Other non-current liabilities	165,915		132,133		Other non-current liabilities	146,583		146,695
Total liabilities	Total liabilities	1,480,580		1,636,667		Total liabilities	1,347,765		1,303,193
Commitments and contingencies (Note 10)	Commitments and contingencies (Note 10)					Commitments and contingencies (Note 10)
Shareholders’ equity:	Shareholders’ equity:					Shareholders’ equity:
Registered shares, CHF 0.25 par value:	Registered shares, CHF 0.25 par value:	30,148		30,148		Registered shares, CHF 0.25 par value:	30,148		30,148
Issued shares — 173,106 at December 31, 2022 and March 31, 2022
Additional shares that may be issued out of conditional capital — 50,000 at December 31, 2022 and March 31, 2022
Additional shares that may be issued out of authorized capital — 17,311 at December 31, 2022 and March 31, 2022
Issued shares — 173,106 at September 30, 2023 and March 31, 2023						Issued shares — 173,106 at September 30, 2023 and March 31, 2023
Additional shares that may be issued out of conditional capital — 50,000 at September 30, 2023 and March 31, 2023						Additional shares that may be issued out of conditional capital — 50,000 at September 30, 2023 and March 31, 2023
Additional shares that may be issued out of authorized capital — 17,311 at September 30, 2023 and March 31, 2023						Additional shares that may be issued out of authorized capital — 17,311 at September 30, 2023 and March 31, 2023
Additional paid-in capital	Additional paid-in capital	116,012		129,925		Additional paid-in capital	47,311		127,380
Shares in treasury, at cost — 12,470 at December 31, 2022 and 7,855 at March 31, 2022		(906,606)		(632,893)
Shares in treasury, at cost — 16,029 at September 30, 2023 and 13,763 at March 31, 2023						Shares in treasury, at cost — 16,029 at September 30, 2023 and 13,763 at March 31, 2023	(1,083,468)		(977,266)
Retained earnings	Retained earnings	3,136,080		2,975,681		Retained earnings	3,190,220		3,177,575
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(116,968)		(104,123)		Accumulated other comprehensive loss	(106,946)		(100,277)
Total shareholders’ equity	Total shareholders’ equity	2,258,666		2,398,738		Total shareholders’ equity	2,077,265		2,257,560
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	3,739,246	$	4,035,405	Total liabilities and shareholders’ equity	$	3,425,030	$	3,560,753

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)


		Nine Months Ended December 31,					Six months ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	323,080	$	536,308	Net income	$	199,844	$	182,927
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	56,698		65,387		Depreciation	34,135		37,288
Amortization of intangible assets	Amortization of intangible assets	18,173		24,223		Amortization of intangible assets	11,509		12,244
Impairment of intangible assets		—		7,000

Loss on investments	Loss on investments	13,065		1,421		Loss on investments	11,609		11,577

Share-based compensation expense	Share-based compensation expense	51,740		72,465		Share-based compensation expense	43,579		35,935
Deferred income taxes	Deferred income taxes	24,228		27,369		Deferred income taxes	11,108		3,040
Change in fair value of contingent consideration for business acquisition		—		(3,509)

Other	Other	1,411		1,068		Other	100		118
Changes in assets and liabilities, net of acquisitions:	Changes in assets and liabilities, net of acquisitions:					Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net	Accounts receivable, net	(123,547)		(236,358)		Accounts receivable, net	(35,362)		(121,909)
Inventories	Inventories	126,309		(177,828)		Inventories	146,369		21,790
Other assets	Other assets	20,918		(20,569)		Other assets	11,999		4,757
Accounts payable	Accounts payable	(134,848)		(80,637)		Accounts payable	88,022		(78,354)
Accrued and other liabilities	Accrued and other liabilities	(60,060)		(17,612)		Accrued and other liabilities	(59,853)		(72,157)
Net cash provided by operating activities	Net cash provided by operating activities	317,167		198,728		Net cash provided by operating activities	463,059		37,256
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property, plant and equipment	Purchases of property, plant and equipment	(69,122)		(63,726)		Purchases of property, plant and equipment	(34,731)		(45,384)
Investment in privately held companies	Investment in privately held companies	(2,626)		(1,260)		Investment in privately held companies	(356)		(2,275)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(8,527)		(15,886)		Acquisitions, net of cash acquired	(14,138)		(5,839)

Purchases of short-term investments		—		(10,000)
Proceeds from the sale of short-term investments		—		1,225

Purchases of deferred compensation investments	Purchases of deferred compensation investments	(5,186)		(3,644)		Purchases of deferred compensation investments	(2,548)		(2,499)
Proceeds from sales of deferred compensation investments	Proceeds from sales of deferred compensation investments	4,750		4,285		Proceeds from sales of deferred compensation investments	2,622		2,436

Net cash used in investing activities	Net cash used in investing activities	(80,711)		(89,006)		Net cash used in investing activities	(49,151)		(53,561)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Payment of cash dividends	Payment of cash dividends	(158,680)		(159,410)		Payment of cash dividends	(182,305)		(158,680)
Payment of contingent consideration for business acquisition	Payment of contingent consideration for business acquisition	(5,954)		(880)		Payment of contingent consideration for business acquisition	(5,002)		(5,954)
Purchases of registered shares	Purchases of registered shares	(327,731)		(290,625)		Purchases of registered shares	(188,941)		(237,561)
Proceeds from exercises of stock options and purchase rights	Proceeds from exercises of stock options and purchase rights	16,064		16,644		Proceeds from exercises of stock options and purchase rights	15,319		12,850
Tax withholdings related to net share settlements of restricted stock units	Tax withholdings related to net share settlements of restricted stock units	(28,734)		(58,528)		Tax withholdings related to net share settlements of restricted stock units	(26,224)		(26,742)
Other financing activities						Other financing activities	(1,116)		—
Net cash used in financing activities	Net cash used in financing activities	(505,035)		(492,799)		Net cash used in financing activities	(388,269)		(416,087)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(24,006)		(2,839)		Effect of exchange rate changes on cash and cash equivalents	(10,758)		(27,823)
Net decrease in cash and cash equivalents		(292,585)		(385,916)
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	14,881		(460,215)
Cash and cash equivalents, beginning of the period	Cash and cash equivalents, beginning of the period	1,328,716		1,750,327		Cash and cash equivalents, beginning of the period	1,149,023		1,328,716
Cash and cash equivalents, end of the period	Cash and cash equivalents, end of the period	$	1,036,131	$	1,364,411	Cash and cash equivalents, end of the period	$	1,163,904	$	868,501
Supplementary Cash Flow Disclosures:	Supplementary Cash Flow Disclosures:					Supplementary Cash Flow Disclosures:
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Property, plant and equipment purchased during the period and included in period end liability accounts	Property, plant and equipment purchased during the period and included in period end liability accounts	$	9,250	$	13,707	Property, plant and equipment purchased during the period and included in period end liability accounts	$	9,218	$	9,436
Non-cash contingent consideration for acquisition		$	2,151	$	9,013

Right-of-use assets obtained in exchange for operating lease liabilities	Right-of-use assets obtained in exchange for operating lease liabilities	$	42,814	$	—	Right-of-use assets obtained in exchange for operating lease liabilities	$	2,574	$	47,408

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Income taxes paid, net	Income taxes paid, net	$	65,154	$	175,775	Income taxes paid, net	$	17,408	$	44,864

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In ~~thousands)~~thousands, except per share amounts)

(unaudited)

Three Months Ended ~~December 31, 2022~~September 30, 2023


					Additional Paid-in Capital														Accumulated Other Comprehensive Loss			Total Shareholders’ Equity												Additional Paid-in Capital												Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
		Registered Shares					Treasury Shares						Retained Earnings								Registered Shares											Treasury Shares							Retained Earnings
		Shares	Amount				Shares			Amount				Accumulated Other Comprehensive Loss				Shares							Amount						Shares					Amount				Accumulated Other Comprehensive Loss
September 30, 2022		173,106	$	30,148			$	106,130		10,943						$	(824,650)				$				2,995,927			$	(138,994)	$	2,168,561
June 30, 2023																						June 30, 2023		173,106				$	30,148			$	49,734				14,484						$	(994,581)		$	3,240,302		$	(99,528)	$	2,226,075
Total comprehensive income	Total comprehensive income	—	—				—			—			—						140,153			22,026					162,179		Total comprehensive income	—					—			—				—			—			137,117			(7,418)		129,699
Purchases of registered shares	Purchases of registered shares	—	—		—				1,746		(90,170)			—					—			(90,170)			Purchases of registered shares	—				—				—			1,895				(124,096)			—			—			(124,096)
Sales of shares upon exercise of stock options and purchase rights	Sales of shares upon exercise of stock options and purchase rights	—	—		(2,582)				(155)		5,796			—					—			3,214			Sales of shares upon exercise of stock options and purchase rights	—				—				(13,888)			(267)			27,094			—			—			13,206
Issuance of shares upon vesting of restricted stock units	Issuance of shares upon vesting of restricted stock units	—	—		(4,410)				(64)		2,418			—					—			(1,992)			Issuance of shares upon vesting of restricted stock units	—				—				(10,143)			(83)			8,115			—			—			(2,028)

Share-based compensation	Share-based compensation	—	—		16,874				—		—			—					—			16,874			Share-based compensation	—				—				21,608			—			—			—			—			21,608

December 31, 2022		173,106	$	30,148	$	116,012			12,470		$	(906,606)		$	3,136,080				$	(116,968)		$	2,258,666
Cash dividends ($1.19 per share)																									Cash dividends ($1.19 per share)	—				—				—			—			—			(187,199)			—			(187,199)
September 30, 2023																									September 30, 2023	173,106				$	30,148			$	47,311		16,029			$	(1,083,468)		$	3,190,220		$	(106,946)		$	2,077,265

Nine Months Ended December 31, 2022
Six Months Ended September 30, 2023																									Six Months Ended September 30, 2023

					Additional Paid-in Capital														Accumulated Other Comprehensive Loss			Total Shareholders’ Equity												Additional Paid-in Capital												Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
		Registered Shares					Treasury Shares						Retained Earnings								Registered Shares											Treasury Shares							Retained Earnings
		Shares	Amount				Shares			Amount				Accumulated Other Comprehensive Loss				Shares							Amount						Shares					Amount				Accumulated Other Comprehensive Loss
March 31, 2022		173,106	$	30,148			$	129,925		7,855						$	(632,893)				$				2,975,681			$	(104,123)	$	2,398,738
March 31, 2023																						March 31, 2023		173,106				$	30,148			$	127,380				13,763						$	(977,266)		$	3,177,575		$	(100,277)	$	2,257,560
Total comprehensive income	Total comprehensive income	—	—				—			—			—						323,080			(12,845)					310,235		Total comprehensive income	—					—			—				—			—			199,844			(6,669)		193,175
Purchases of registered shares	Purchases of registered shares	—	—		—				5,967		(327,731)			—					—			(327,731)			Purchases of registered shares	—				—				—			3,502				(219,172)			—			—			(219,172)
Sales of shares upon exercise of stock options and purchase rights	Sales of shares upon exercise of stock options and purchase rights	—	—		(930)				(423)		16,994			—					—			16,064			Sales of shares upon exercise of stock options and purchase rights	—				—				(15,755)			(315)			31,074			—			—			15,319
Issuance of shares upon vesting of restricted stock units	Issuance of shares upon vesting of restricted stock units	—	—		(65,758)				(929)		37,024			—					—			(28,734)			Issuance of shares upon vesting of restricted stock units	—				—				(108,120)			(921)			81,896			—			—			(26,224)

Share-based compensation	Share-based compensation	—	—		52,775				—		—			—					—			52,775			Share-based compensation	—				—				43,806			—			—			—			—			43,806
Cash dividends ($1.00 per share)		—	—		—				—		—			(162,681)					—			(162,681)
December 31, 2022		173,106	$	30,148	$	116,012			12,470		$	(906,606)		$	3,136,080				$	(116,968)		$	2,258,666
Cash dividends ($1.19 per share)																									Cash dividends ($1.19 per share)	—				—				—			—			—			(187,199)			—			(187,199)
September 30, 2023																									September 30, 2023	173,106				$	30,148			$	47,311		16,029			$	(1,083,468)		$	3,190,220		$	(106,946)		$	2,077,265

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Three Months Ended ~~December 31, 2021~~September 30, 2022


					Additional Paid-in Capital														Accumulated Other Comprehensive Loss			Total Shareholders’ Equity															Additional Paid-in Capital														Accumulated Other Comprehensive Loss				Total Shareholders’ Equity
		Registered Shares					Treasury Shares						Retained Earnings								Registered Shares														Treasury Shares								Retained Earnings
		Shares	Amount				Shares			Amount				Accumulated Other Comprehensive Loss				Shares							Amount								Shares						Amount					Accumulated Other Comprehensive Loss
September 30, 2021		173,106	$	30,148			$	99,434		5,331						$	(413,345)				$				2,657,465				$	(111,019)		$	2,262,683
June 30, 2022																						June 30, 2022		173,106					$	30,148					$	98,800					9,051						$	(722,273)			$	3,076,517			$	(120,834)	$	2,362,358
Total comprehensive income																									Total comprehensive income		—					—						—				—				—			82,091				(18,160)				63,931
Purchases of registered shares																									Purchases of registered shares		—					—					—				2,241				(116,942)			—				—				(116,942)
Sales of shares upon exercise of stock options and purchase rights																									Sales of shares upon exercise of stock options and purchase rights		—					—					1,652				(268)			11,198			—				—				12,850
Issuance of shares upon vesting of restricted stock units																									Issuance of shares upon vesting of restricted stock units		—					—					(5,965)				(81)			3,367			—				—				(2,598)
Share-based compensation																									Share-based compensation		—					—					11,643				—			—			—				—				11,643
Cash dividends ($1.00 per share)																									Cash dividends ($1.00 per share)		—					—					—				—			—			(162,681)				—				(162,681)
September 30, 2022																									September 30, 2022		173,106					$	30,148				$	106,130			10,943			$	(824,650)		$	2,995,927			$	(138,994)			$	2,168,561

Six Months Ended September 30, 2022																									Six Months Ended September 30, 2022

																																					Additional Paid-in Capital														Accumulated Other Comprehensive Loss				Total Shareholders’ Equity
																											Registered Shares												Treasury Shares							Retained Earnings
																											Shares					Amount							Shares				Amount				Accumulated Other Comprehensive Loss
March 31, 2022																									March 31, 2022		173,106					$	30,148						$	129,925			7,855						$	(632,893)			$	2,975,681			$	(104,123)	$	2,398,738
Total comprehensive income	Total comprehensive income	—	—				—			—			—						210,011			(8,177)						201,834		Total comprehensive income		—							—				—			—					—				182,927				(34,871)		148,056
Purchases of registered shares	Purchases of registered shares	—	—		—				1,379		(116,245)			—					—			(116,245)			Purchases of registered shares		—					—					—				4,221			(237,561)			—				—				(237,561)
Sales of shares upon exercise of stock options and purchase rights	Sales of shares upon exercise of stock options and purchase rights	—	—		8				—		—			—					—			8			Sales of shares upon exercise of stock options and purchase rights		—					—					1,652				(268)			11,198			—				—				12,850
Issuance of shares upon vesting of restricted stock units	Issuance of shares upon vesting of restricted stock units	—	—		(6,887)				(71)		3,110			—					—			(3,777)			Issuance of shares upon vesting of restricted stock units		—					—					(61,348)				(865)			34,606			—				—				(26,742)

Share-based compensation	Share-based compensation	—	—		23,439				—		—			—					—			23,439			Share-based compensation		—					—					35,901				—			—			—				—				35,901

December 31, 2021		173,106	$	30,148	$	115,994			6,639		$	(526,480)		$	2,867,476				$	(119,196)		$	2,367,942

Nine Months Ended December 31, 2021

					Additional Paid-in Capital														Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
		Registered Shares					Treasury Shares						Retained Earnings
		Shares	Amount				Shares			Amount				Accumulated Other Comprehensive Loss
March 31, 2021		173,106	$	30,148			$	129,519		4,799						$	(279,541)								$	2,490,578				$	(108,915)		$	2,261,789
Total comprehensive income		—	—				—			—			—						536,308						(10,281)			526,027
Purchases of registered shares		—	—		—				3,035		(290,625)			—					—			(290,625)
Sales of shares upon exercise of stock options and purchase rights		—	—		8,397				(226)		8,247			—					—			16,644
Issuance of shares upon vesting of restricted stock units		—	—		(93,967)				(969)		35,439			—					—			(58,528)

Share-based compensation		—	—		72,045				—		—			—					—			72,045
Cash dividends ($0.95 per share)		—	—		—				—		—			(159,410)					—			(159,410)
December 31, 2021		173,106	$	30,148	$	115,994			6,639		$	(526,480)		$	2,867,476				$	(119,196)		$	2,367,942
Cash dividends ($1.00 per share)																									Cash dividends ($1.00 per share)		—					—					—				—			—			(162,681)				—				(162,681)
September 30, 2022																									September 30, 2022		173,106					$	30,148				$	106,130			10,943			$	(824,650)		$	2,995,927			$	(138,994)			$	2,168,561

The accompanying notes are an integral part of these condensed consolidated financial statements.

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LOGITECH INTERNATIONAL S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 — The Company and Summary of Significant Accounting Policies and Estimates

The Company

Logitech International S.A, together with its consolidated subsidiaries ("Logitech" or the "Company"), designs, manufactures and ~~markets~~sells products that help ~~connect~~businesses thrive and bring people ~~to digital~~together when working, creating, gaming and cloud experiences. Over forty years ago, Logitech created products to improve experiences around the personal computer ("PC") platform, and today it is a multi-brand, multi-category company designing products that enable better experiences consuming, sharing and creating any digital content such as computing, gaming, video, and music, whether it is on a computer, mobile device or in the cloud. streaming.

The Company sells its products to a broad network of ~~domestic and~~ international customers, including direct sales to retailers, e-tailers and ~~enterprise customers,~~end consumers through the Company's e-commerce platform, and indirect sales to end customers through distributors.

Logitech was founded in Switzerland in 1981 and Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Hautemorges, Switzerland, and headquarters in Lausanne, Switzerland, which conducts its business through subsidiaries in the Americas, Europe, Middle East and Africa ("EMEA") and Asia Pacific. Shares of Logitech International S.A. are listed on both the SIX Swiss Exchange under the trading symbol LOGN and the Nasdaq Global Select Market under the trading symbol LOGI.

Basis of Presentation

The condensed consolidated financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States ~~of America~~ ("U.S. GAAP") for interim financial information and therefore do not include all the information required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, ~~2022,~~2023, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on May ~~18, 2022.~~ 17, 2023.

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented. Operating results for the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, ~~2023,~~2024, or any future periods.

Change in Presentation of Sales by Product Category

During the first quarter of fiscal year 2024, the Company changed its presentation of Sales by Product Category, included in Note 12, to provide a simpler and clearer view of the Company's business. The change in presentation did not have an impact on previously reported total sales. These changes included reclassifications of sales between certain product categories resulting in the following:

•The Webcams category (previously PC Webcams) now includes PC webcams and VC webcams;

•Headsets is a new category which includes PC headsets and VC headsets;

•The Mobile Speakers category is no longer a separate category as sales have been reclassified into the Other category;

•The Audio & Wearables category is no longer a separate category as sales have been reclassified into other categories as discussed below.

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As a result of these changes, certain prior-period amounts for the three and six months ended September 30, 2022 have been reclassified to conform to the current period presentation as follows (in thousands):


	Three months ended September 30, 2022
	As previously reported		Reclassifications			As adjusted
Gaming	$	297,676	$	24,352	(1)	$	322,028
Keyboards & Combos	200,853		—			200,853
Pointing Devices	185,200		—			185,200
Video Collaboration	236,180		(56,981)		(2) (3)	179,199
Webcams (3)	60,166		41,852		(3)	102,018
Tablet Accessories	54,203		—			54,203
Headsets	—		44,750		(2)	44,750
Other	2,207		58,493		(4) (5)	60,700
Mobile Speakers	39,195		(39,195)		(4)	—
Audio & Wearables	73,271		(73,271)		(1) (2) (5)	—
Total Sales	$	1,148,951	$	—		$	1,148,951


	Six months ended September 30, 2022
	As previously reported		Reclassifications			As adjusted
Gaming	$	580,482	$	39,467	(1)	$	619,949
Keyboards & Combos	428,573		—			428,573
Pointing Devices	368,483		—			368,483
Video Collaboration	482,422		(121,591)		(2) (3)	360,831
Webcams (3)	119,552		91,728		(3)	211,280
Tablet Accessories	120,788		—			120,788
Headsets	—		90,693		(2)	90,693
Other	4,294		103,925		(4) (5)	108,219
Mobile Speakers	61,505		(61,505)		(4)	—
Audio & Wearables	142,717		(142,717)		(1) (2) (5)	—
Total Sales	$	2,308,816	$	—		$	2,308,816

(1) Reclassification of Blue Microphones from "Audio & Wearables" to the Gaming category.

(2) Reclassification of VC headsets and PC headsets to the new Headsets category from "Video Collaboration" and "Audio & Wearables," respectively.

(3) The Webcams category includes amounts previously reported as "PC Webcams" as well as amounts from VC webcams reclassified from "Video Collaboration."

(4) Reclassification of all amounts previously reported in "Mobile Speakers" to the Other category.

(5) Reclassification of PC speakers previously reported in "Audio & Wearables" to the Other category.

Changes in Significant Accounting Policies

~~Other than the recent accounting pronouncements adopted and discussed below under~~ ~~Recent Accounting Pronouncements Adopted, there~~There have been no material changes in the Company’s significant accounting policies during the ~~nine~~three and six months ended ~~December 31, 2022~~September 30, 2023 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022.~~2023.

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Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Significant estimates and assumptions made by management involve the fair value of goodwill and intangible assets acquired from business acquisitions, contingent consideration for a business acquisition and periodic reassessment of its fair value, valuation of investment in privately held companies classified under Level 3 fair value hierarchy, pension obligations, accruals for customer incentives, cooperative marketing, and pricing programs and related breakage when appropriate, inventory valuation, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets. Although these

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estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from those estimates.

Risks and Uncertainties

Impacts of Macroeconomic and Geopolitical Conditions ~~and Other Factors~~ on the Company's Business

~~In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the world.~~ The COVID-19 pandemic resulted in industry-wide global supply chain challenges, including manufacturing, transportation and logistics. The Company purchases certain products and key components from a limited number of sources, and depends on the supply chain, including freight, to receive components, transport finished goods and deliver the Company's ~~products across the world.~~

~~More recently, the Company~~business has ~~also~~ been impacted by adverse macroeconomic and geopolitical conditions. These conditions include ~~but are not limited to~~ inflation, interest rate and foreign currency fluctuations, ~~and~~ slowdown of economic activity around the world, ~~in part due to rising interest rates,~~ and lower consumer and enterprise ~~spending~~. ~~In addition, the war in Ukraine increased~~spending.

The global ~~supply chain, logistics,~~ and ~~inflationary challenges. Such global or~~ regional economic and political conditions adversely affect demand for the Company's products. These conditions also ~~have~~had an impact on the Company's suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result, impacting the pricing of the Company's products. ~~Price increases may not successfully offset cost increases or may cause the Company to lose market share and in turn adversely impact the Company's results of operations.~~

While global supply chain challenges have improved since the second quarter of fiscal year 2023, including logistics costs and shipping lead times, the increase of COVID-19 infections in China during the third quarter of fiscal year 2023 causes uncertainty in supply availability. If macroeconomic and geopolitical conditions and COVID-19 related factors do not improve or worsen, the Company's results of operations will continue to be adversely impacted.

~~Recent Accounting Pronouncements Adopted~~

~~In October 2021, the Financial Accounting Standard Board issued ASU 2021-08, "Business Combinations (Topic 805):~~ ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~" (ASU 2021-08). The update requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification ("ASC") 606, ~~Revenue from Contracts with Customers~~, as if it had originated the contracts. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company early adopted the standard effective April 1, 2022 and applies the standard prospectively to business combinations that occurred on or after April 1, 2022. The adoption of ASU 2021-08 did not have a material impact on the Company's condensed consolidated financial statements.

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Note 2 — Net Income Per Share

The following table summarizes the computations of basic and diluted net income per share for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ (in thousands, except per share amounts):


		Three Months Ended December 31,				Nine Months Ended December 31,					Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	140,153	$	210,011	$	323,080	$	536,308	Net income	$	137,117	$	82,091	$	199,844	$	182,927

Shares used in net income per share computation:	Shares used in net income per share computation:									Shares used in net income per share computation:
Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	161,244		167,090		163,042		167,953		Weighted average shares outstanding - basic	157,911		163,186		158,385		163,937
Effect of potentially dilutive equivalent shares	Effect of potentially dilutive equivalent shares	1,285		2,617		1,385		3,074		Effect of potentially dilutive equivalent shares	1,023		1,142		1,160		1,434
Weighted average shares outstanding - diluted	Weighted average shares outstanding - diluted	162,529		169,707		164,427		171,027		Weighted average shares outstanding - diluted	158,934		164,328		159,545		165,371

Net income per share:	Net income per share:									Net income per share:
Basic	Basic	$	0.87	$	1.26	$	1.98	$	3.19	Basic	$	0.87	$	0.50	$	1.26	$	1.12
Diluted	Diluted	$	0.86	$	1.24	$	1.96	$	3.14	Diluted	$	0.86	$	0.50	$	1.25	$	1.11

Share equivalents attributable to outstanding stock options, restricted stock units ~~("RSUs")~~ and employee share purchase plans ~~("ESPP")~~ totaling ~~1.6~~1.1 million and ~~0.8~~1.7 million for the three months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ respectively, and ~~2.0~~1.6 million and ~~and 0.9~~2.6 million for the ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ respectively, were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive. A small number of performance-based ~~awards~~restricted stock units were not included in the dilutive net income per share calculation because all necessary conditions had not been satisfied by the end of the respective period, and those shares were not issuable if the end of the reporting period were the end of the performance contingency period.

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Note 3 — Employee Benefit Plans

Employee Share Purchase Plans and Stock Incentive Plans

As of ~~December 31, 2022,~~September 30, 2023, the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated ("2006 ESPP"), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated ("1996 ESPP"), and the 2006 Stock Incentive Plan ("2006 Plan") as amended and restated. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury stock.

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ (in thousands):


		Three Months Ended December 31,				Nine Months Ended December 31,					Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Cost of goods sold	Cost of goods sold	$	1,324	$	1,782	$	4,228	$	5,253	Cost of goods sold	$	2,462	$	1,443	$	3,877	$	2,904
Marketing and selling	Marketing and selling	8,014		10,699		25,240		28,987		Marketing and selling	9,262		7,429		19,745		17,226
Research and development	Research and development	2,756		4,510		11,568		14,295		Research and development	4,694		3,280		9,147		8,812
General and administrative	General and administrative	3,711		7,801		10,704		23,930		General and administrative	5,650		93		10,810		6,993

Total share-based compensation expense	Total share-based compensation expense	15,805		24,792		51,740		72,465		Total share-based compensation expense	22,068		12,245		43,579		35,935
Income tax benefit		(3,276)		(3,581)		(7,496)		(23,460)
Total share-based compensation expense, net of income tax benefit		$	12,529	$	21,211	$	44,244	$	49,005
Income tax expense (benefit)										Income tax expense (benefit)	(2,548)		102		(7,866)		(4,220)
Total share-based compensation expense, net of income tax expense (benefit)										Total share-based compensation expense, net of income tax expense (benefit)	$	19,520	$	12,347	$	35,713	$	31,715

The income tax benefit in the respective periods primarily consisted of tax benefits related to the share-based compensation expense for the period and direct tax benefit realized, including net excess tax benefits recognized from share-based awards vested or exercised during the period.

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Share-based compensation costs capitalized as part of inventory were ~~$1.3~~$1.5 million and ~~$1.1~~$1.3 million for the three months endedSeptember 30, 2023 and 2022, respectively, and $3.4 millionand $3.1 million for the ~~three~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021, respectively, and $4.4 million~~ ~~and $4.1 million for the nine months ended December 31, 2022 and 2021,~~ respectively.

Defined Benefit Plans

Certain of the Company’s subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees’ years of service and earnings, or in accordance with applicable employee benefit regulations. The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations. The costs of ~~$2.7~~$1.9 million and ~~$3.4~~$2.8 million recorded for the three months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ respectively, and ~~$8.3~~$3.8 million and ~~$10.0~~$5.6 million recorded for the ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ respectively, were primarily related to service costs.

Note 4 — Income Taxes

The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company’s income before taxes and the provision for (benefit from) income taxes are generated outside of Switzerland.

The income tax provision for the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 was ~~$42.7~~$30.3 million and ~~$87.8~~$42.9 million based on an effective income tax rate of ~~23.3%~~18.1% and ~~21.4%~~17.7% of pre-tax income, respectively. The income tax provision for the same periods ended ~~December~~September 30, ~~2021~~2022 was ~~$49.3~~$23.4 million and ~~$107.8~~$45.1 million based on an effective income tax rate of ~~19.0%~~22.2% and ~~16.7%~~19.8% of pre-tax income, respectively.

The change in the effective income tax rate for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023, compared with the same periods ended September 30, 2022 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company ~~operates. There were discrete~~operates and the tax ~~benefits~~impact from share-based compensation.

Table of $0.2 million and $1.4 million from the recognition of excess tax benefits in the United States in the three and nine months ended December 31, 2022, respectively. In addition, there were discrete tax benefits of $1.7 million and $3.2 million from the reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three and nine month period ended December 31, 2022. The change in the effective income tax rate for the three and nine months ended December 31, 2021 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates. There were discrete tax benefits of $0.8 million and $15.2 million from the recognition of excess tax benefits in the United States in the three and nine months ended December 31, 2021, respectively. Furthermore, there were discrete tax benefits of $1.3 million and $2.8 million from the reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three and nine month period ended December 31, 2021.

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As of December 31, 2022 and March 31, 2022, the total amount of unrecognized tax benefits due to uncertain tax positions was $184.0 million and $176.0 million, respectively, all of which would affect the effective income tax rate if recognized.

As of December 31, 2022 and March 31, 2022, the Company had $117.6 million and $83.4 million, respectively, in non-current income taxes payable including interest and penalties, related to the Company's income tax liability for uncertain tax positions.

The Company recognizes interest and penalties related to unrecognized tax positions in the income tax provision. As of December 31, 2022 and March 31, 2022, the Company had $5.2 million and $3.6 million, respectively, of accrued interest and penalties related to uncertain tax positions in non-current income taxes payable.

Although the Company has adequately provided for uncertain tax positions, the provisions related to these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During fiscal year ~~2023,~~2024, the Company continues to review its tax positions and to provide for or reverse unrecognized tax benefits as they arise. During the next twelve months, while it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly, ~~due~~it is not possible to ~~changes in tax law in various jurisdictions, new tax audits and changes in the U.S. dollar as compared to other currencies. Excluding these factors, uncertain tax~~

~~Table~~provide a range of ~~Contents~~

~~positions may decrease by as much as $4.3 million from the lapse of the statutes of limitations in various jurisdictions during the next twelve months.~~potential changes.

On August 16, 2022, the “Inflation Reduction Act” (H.R. 5376) ("IRA") was signed into law in the United States. The IRA establishes a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. The ~~Company does~~IRA is not ~~expect the IRA will~~expected to have a material impact to the Company's financial statements ~~when it becomes effective.~~for the tax year ending March 31, 2024.

Note 5 — Balance Sheet Components

The following table presents the components of certain balance sheet asset amounts (in thousands):


		December 31, 2022		March 31, 2022			September 30, 2023		March 31, 2023
Accounts receivable, net:	Accounts receivable, net:					Accounts receivable, net:
Accounts receivable	Accounts receivable	$	1,121,377	$	964,766	Accounts receivable	$	882,607	$	851,576
Allowance for doubtful accounts	Allowance for doubtful accounts	—		(2,212)		Allowance for doubtful accounts	(16)		(86)
Allowance for sales returns	Allowance for sales returns	(14,021)		(12,321)		Allowance for sales returns	(10,898)		(10,146)
Allowance for cooperative marketing arrangements	Allowance for cooperative marketing arrangements	(62,734)		(56,372)		Allowance for cooperative marketing arrangements	(37,781)		(40,495)
Allowance for customer incentive programs	Allowance for customer incentive programs	(114,160)		(97,460)		Allowance for customer incentive programs	(63,082)		(71,645)
Allowance for pricing programs	Allowance for pricing programs	(128,027)		(120,797)		Allowance for pricing programs	(113,935)		(98,822)
		$	802,435	$	675,604		$	656,895	$	630,382
Inventories:	Inventories:					Inventories:
Raw materials	Raw materials	$	202,798	$	226,155	Raw materials	$	92,083	$	171,790
Finished goods	Finished goods	594,897		706,969		Finished goods	440,860		511,103
		$	797,695	$	933,124		$	532,943	$	682,893
Other current assets:	Other current assets:					Other current assets:
Value-added tax ("VAT") receivables	Value-added tax ("VAT") receivables	$	51,681	$	58,850	Value-added tax ("VAT") receivables	$	51,651	$	60,343
Prepaid expenses and other assets	Prepaid expenses and other assets	73,407		76,628		Prepaid expenses and other assets	86,831		82,533
		$	125,088	$	135,478		$	138,482	$	142,876
Property, plant and equipment, net:	Property, plant and equipment, net:					Property, plant and equipment, net:
Property, plant and equipment	Property, plant and equipment	$	496,830	$	459,413	Property, plant and equipment	$	510,881	$	518,358
Less: accumulated depreciation and amortization	Less: accumulated depreciation and amortization	(378,647)		(349,606)		Less: accumulated depreciation and amortization	(388,854)		(396,855)
		$	118,183	$	109,807		$	122,027	$	121,503
Other assets:	Other assets:					Other assets:
Deferred tax assets	Deferred tax assets	$	190,558	$	193,629	Deferred tax assets	$	163,053	$	171,989
Right-of-use assets						Right-of-use assets	61,823		67,330
Investments in privately held companies	Investments in privately held companies	32,600		43,068		Investments in privately held companies	31,544		33,323
Right-of-use assets		69,953		40,661
Investments for deferred compensation plan	Investments for deferred compensation plan	27,665		28,431		Investments for deferred compensation plan	28,546		28,213
Other assets	Other assets	15,103		14,933		Other assets	6,331		15,438
		$	335,879	$	320,722		$	291,297	$	316,293

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The following table presents the components of certain balance sheet liability amounts (in thousands):

December 31, 2022 March 31, 2022
Accrued and other current liabilities:
Accrued customer marketing, pricing and incentive programs $ 238,518 $ 232,393
Accrued personnel expenses 113,486 165,090
Accrued sales return liability 42,743 40,507
Warranty accrual 29,999 32,987
VAT payable 34,149 39,602
Income taxes payable 17,839 35,355
Accrued payables - non-inventory 18,398 26,722
Operating lease liabilities 11,577 13,690
Contingent consideration 6,368 8,042
Other current liabilities 192,492 190,460
$ 705,569 $ 784,848
Other non-current liabilities:
Employee benefit plan obligations $ 49,082 $ 50,741
Operating lease liabilities 61,414 28,207
Obligation for deferred compensation plan 27,665 28,431
Warranty accrual 12,632 13,232
Deferred tax liabilities 3,500 1,962
Contingent consideration 245 4,217
Other non-current liabilities 11,377 5,343
$ 165,915 $ 132,133

The Company recorded approximately $43.0 million right-of-use assets and operating lease liabilities during the nine months ended December 31, 2022, primarily related to newly commenced operating leases for office spaces in the Americas and EMEA regions.


	September 30, 2023		March 31, 2023
Accrued and other current liabilities:
Accrued customer marketing, pricing and incentive programs	$	187,559	$	206,546
Accrued personnel expenses	95,279		103,592
Accrued loss for inventory purchase commitments	33,157		46,608
Accrued sales return liability	33,906		49,462
Warranty liabilities	28,085		28,861
VAT payable	22,480		33,328
Income taxes payable	26,354		18,788


Operating lease liabilities	14,099		12,655

Contingent consideration	1,700		6,629
Other current liabilities	151,423		136,670
	$	594,042	$	643,139
Other non-current liabilities:
Operating lease liabilities	$	59,673	$	58,361
Employee benefit plan obligations	30,241		32,421
Obligation for deferred compensation plan	28,546		28,213
Warranty liabilities	12,180		12,025
Deferred tax liabilities	2,528		2,803

Other non-current liabilities	13,415		12,872
	$	146,583	$	146,695

Note 6 — Fair Value Measurements

Fair Value Measurements

The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted market prices included in Level 1, such ~~as:~~as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands):

December 31, 2022 March 31, 2022
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets:
Cash equivalents $ 603,163 $ — $ — $ 762,055 $ — $ —

Investments for deferred compensation plan included in other assets:
Cash $ 10 $ — $ — $ 108 $ — $ —
Common stock 705 — — 2,329 — —
Money market funds 9,728 — — 6,765 — —
Mutual funds 17,222 — — 19,229 — —
Total investments for deferred compensation plan $ 27,665 $ — $ — $ 28,431 $ — $ —
Currency derivative assets
included in other current assets $ — $ 668 $ — $ — $ 1,517 $ —
Liabilities:
Contingent consideration included in accrued and other current liabilities $ — $ — $ 6,368 $ — $ — $ 8,042
Contingent consideration included in other non-current liabilities $ — $ — $ — $ — $ — $ 3,971
Currency derivative liabilities
included in accrued and other current liabilities $ — $ 3,519 $ — $ — $ 165 $ —


	September 30, 2023						March 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	712,451	$	—	$	—	$	661,884	$	—	$	—
Investments for deferred compensation plan included in other assets:
Cash	$	82	$	—	$	—	$	41	$	—	$	—
Common stock	1,139		—		—		988		—		—
Money market funds	10,544		—		—		9,606		—		—
Mutual funds	16,781		—		—		17,578		—		—
Total investments for deferred compensation plan	$	28,546	$	—	$	—	$	28,213	$	—	$	—

Currency derivative assets included in other current assets	$	—	$	2,446	$	—	$	—	$	107	$	—

Liabilities:
Contingent consideration included in accrued and other current liabilities	$	—	$	—	$	1,700	$	—	$	—	$	6,629

Currency derivative liabilities included in accrued and other current liabilities	$	—	$	86	$	—	$	—	$	2,187	$	—

Contingent Consideration for Business Acquisitions

The following table summarizes the change in the ~~fair value of the~~ Company's contingent consideration balance during the ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ (in thousands):


		Nine Months Ended December 31,					Six months ended September 30,
		2022		2021			2023		2022
Beginning of the period	Beginning of the period	$	12,259	$	6,967	Beginning of the period	$	6,629	$	12,259
Fair value of contingent consideration upon acquisition ~~(1)~~	Fair value of contingent consideration upon acquisition ~~(1)~~	2,151		9,973		Fair value of contingent consideration upon acquisition ~~(1)~~	—		1,142
Change in fair value of contingent consideration		—		(3,509)
Settlement of contingent consideration		(5,954)		(880)
Payments of contingent consideration						Payments of contingent consideration	(5,002)		(5,954)
Effect of foreign currency exchange rate changes	Effect of foreign currency exchange rate changes	(1,843)		—		Effect of foreign currency exchange rate changes	73		(2,119)
End of the period	End of the period	$	6,613	$	12,551	End of the period	$	1,700	$	5,328

~~(1) Represents the contingent consideration related to the technology acquisitions during the periods.~~

The contingent consideration arising from ~~the~~a technology acquisition on May 19, 2021, ~~represents~~represented the future potential earn-out payments of up to ~~$10.0~~$10.0 million payable in cash ~~only~~ upon the achievement of three technical development milestones ~~required~~ to be completed as of December 31, 2021, June 30, 2022, ~~and~~and June 30, 2023. The fair value of the contingent consideration ~~as of~~was $10.0 million at the acquisition date, ~~was $10.0 million,~~ which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During ~~the third quarter of~~ fiscal year 2022, the Company paid $0.9 million offor the contingent consideration ~~was released from other current liabilities upon cash settlement of the contingent consideration for~~related to the first technical development milestone. During ~~the second quarter of~~ fiscal year 2023, the Company paid $4.0 million for the contingent consideration related to the second technical development milestone. D

~~The contingent consideration arising from~~uring the ~~Mevo Acquisition on February 17, 2021 represents the future potential earn-out payments of up to $17.0~~six months ended September 30, 2023, the Company paid $3.3 million ~~payable in cash only upon the achievement of certain net sales~~

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for ~~the period from December 26, 2020 to December 31, 2021.~~ ~~As of March 31, 2021 the fair value of~~ the contingent consideration ~~was $3.4 million. As of December 31, 2021,~~related to the ~~fair value of the contingent consideration was released from other current liabilities as the net sales milestone was not achieved upon completion of the earn-out period.~~

third technical development milestone.

The contingent consideration arising from ~~the~~ a technology acquisition on January 4, 2021, ~~represents~~represented the future potential earn-out payments of up to $3.0 million payable in cash upon the achievement of two technical development milestones ~~required~~ to be completed as of December 31, 2021 and March 31, 2022. The fair value of the contingent ~~amount~~consideration was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During ~~the second quarter of~~ fiscal year 2023, the Company paid $2.0 million for the contingent consideration related to the first technical development milestone. ~~The~~During the six months ended September 30, 2023, the Company ~~expects to pay the remaining~~paid $1.0 million for the contingent consideration related to the second technical development ~~milestone within next twelve months.~~milestone.

Although the estimate of contingent consideration is based on management’s best knowledge of current events, the estimate could change significantly from period to period. Actual results that differ from the assumptions used and any changes to the significant assumptions and unobservable inputs used could have an impact on future results of operations.

~~Investment~~

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Investments for Deferred Compensation Plan

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of ~~$27.7~~$28.5 million and ~~$28.4~~$28.2 million, as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, respectively, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Unrealized gains (losses) related to marketable securities for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were not material and were included in other income (expense), net, and corresponding changes in the deferred compensation liability were included in operating expenses and cost of goods sold, in the Company's condensed consolidated statements of operations.

Equity Method Investments

The Company has certain non-marketable investments included in other assets that are accounted for as equity method investments, with a carrying value of ~~$21.3~~$18.5 million and ~~$40.2~~$20.5 million as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, respectively. Gains (losses) related to equity method investments for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were not material and are included in other income (expense), net, in the Company's condensed consolidated statements of operations.

During the ~~nine~~ three months ended ~~December 31,~~September 30, 2022,, the Company recorded an impairment charge, before tax, of $21.4 million for one of its equity method investments as it was determined that the carrying value of the investment was not recoverable. The impairment charge is included in other income (expense), net, in the Company's condensed consolidated ~~statement~~statements of operations for the ~~nine~~three and six months ended ~~December 31,~~September 30, 2022. There was no impairment of equity method investments during the three and six months ended ~~December 31, 2022 and 2021 and the nine months ended December 31, 2021.~~September 30, 2023.

~~Other~~ Assets Measured at Fair Value on a Nonrecurring Basis

Financial ~~Assets.~~Assets

The Company has certain equity investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. The carrying value is also adjusted for observable price changes with the same or similar security from the same issuer. The amount of these equity investments without readily determinable fair ~~value~~values included in other assets was ~~$10.9 million and $2.9~~$12.6 million as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022, respectively.~~ 2023. During the ~~nine~~six months ended ~~December 31,~~ September 30, 2022, the Company recorded an unrealized gain, before tax, of $6.9 million for its investment in a private company as a result of observable price changes for similar securities issued by this company (level 2 fair value measurement). There was no impairment of these financial assets during the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ other than an immaterial impairment charge related to one of the ~~Company’s~~Company's investments without readily determinable fair value recorded during the ~~second quarter of fiscal year 2023~~.three months ended September 30, 2022.

During the six months ended September 30, 2023, the Company recorded an impairment loss, before tax, of $9.6 million as a result of the write-off of a note receivable which has been deemed no longer recoverable. This note receivable was previously obtained in conjunction with an exchange transaction related to the Company's investment in a privately held company. The impairment loss is included in other income (expense), net, in the Company's condensed consolidated statement of operations for the six months ended September 30, 2023.

Non-Financial ~~Assets.~~Assets

Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if the Company is required to evaluate these non-financial

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assets for impairment, whether due to certain triggering events or because of the required annual impairment test, and a resulting impairment is recorded to reduce the carrying value to the fair value, the non-financial assets are measured at fair value during such period. There was no impairment of non-financial assets during the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022. ~~During the three and nine months ended December 31, 2021, the Company recorded impairment charges of $7.0 million for the~~ ~~Jaybird-related~~ ~~intangible assets (see Note 8).~~

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Note 7 — Derivative Financial Instruments

Under certain agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets and accrued and other current liabilities, respectively, on the condensed consolidated balance sheets as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022.~~2023. See Note 6 for the fair values of the Company’s derivative instruments as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022.~~ 2023.

Cash Flow Hedges

The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases. These hedging contracts mature within approximately four months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. Cash flows from such hedges are classified as operating activities in the condensed consolidated statements of cash flows. Hedging relationships are discontinued when the hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract. Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were ~~$111.7~~$119.2 million and ~~$125.4~~$72.6 million as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, respectively. The Company had ~~$4.7~~$1.8 million of net ~~losses~~gains related to its cash flow hedges included in accumulated other comprehensive loss as of ~~December 31, 2022,~~September 30, 2023, which will be reclassified into earnings within the next twelve months.

The following table presents the amounts of gain (loss) on the Company’s derivative instruments designated as hedging instruments for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (in thousands):


		Three Months Ended December 31,
		Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of Gain Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold					Three months ended September 30,
		2022		2021		2022		2021					Amount of Gain Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
													2023		2022		2023		2022
Cash flow hedges	Cash flow hedges	$	(6,325)	$	1,061	$	(4,728)	$	(3,200)			Cash flow hedges	$	2,078	$	4,935	$	1,370	$	(4,947)

		Nine Months Ended December 31,								Six months ended September 30,
		Amount of Gain Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of Gain Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold					Amount of Gain Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
		2022		2021		2022		2021					2023		2022		2023		2022

Cash flow hedges	Cash flow hedges	$	5,239	$	3,723	$	(11,766)	$	(5,108)			Cash flow hedges	$	1,374	$	11,564	$	4,356	$	(7,038)

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The Company presents the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item, i.e. cost of goods sold, for hedging forecasted inventory purchases and such amount is not material for all periods presented.

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Other Derivatives

The Company also enters into foreign currency exchange forward and swap contracts to reduce the short-term effects of currency exchange rate fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries. These contracts generally mature within aapproximately one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on these contracts are not material and included in other income (expense), net, in the condensed consolidated statements of operations based on the changes in fair value. The notional amounts of these contracts outstanding as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022~~2023 were ~~$217.6~~$121.6 million and ~~$226.5~~$111.2 million, respectively. Foreign currency exchange forward and swap contracts outstanding as of ~~December 31, 2022~~September 30, 2023 primarily ~~consist~~consisted of contracts in ~~Japanese Yen,~~Canadian Dollar, Brazilian Real, ~~Canadian Dollar,~~ and Australian Dollar to be settled at future dates at ~~pre-determined~~predetermined exchange rates.

The fair value of all foreign currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the condensed consolidated statements of cash flows.

Note 8 — Goodwill and Other Intangible Assets

The Company conducts its impairment analysis of goodwill annually at December 31 ~~and as necessary,~~or more frequently if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s reporting unit may be less than its carrying amount. ~~The Company conducted its annual impairment analysis~~There have been no triggering events identified affecting the valuation of goodwill ~~as of December 31, 2022 by performing a qualitative assessment~~ and ~~concluded that it was more likely than not that~~intangible assets during the ~~fair value of its reporting unit exceeds its carrying amount. In assessing the qualitative factors, the Company considered the impact of change in industry~~three and ~~competitive environment, the Company's market capitalization~~six months ended September 30, 2023 and ~~budgeted-to-actual revenue performance for the last twelve months.~~2022.

The following table summarizes the activities in the Company’s goodwill balance (in thousands):


As of March 31, ~~2022~~2023	$	~~448,175~~454,610

~~Acquisitions~~Acquisition	~~7,976~~8,117
Effects of foreign currency translation	~~(1,680)~~(1,326)
As of ~~December 31, 2022~~September 30, 2023	$	~~454,471~~461,401

The Company's acquired intangible assets were as follows (in thousands):


		December 31, 2022						March 31, 2022							September 30, 2023						March 31, 2023
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademark and trade names		$	36,790	$	(25,787)	$	11,003	$	36,790	$	(22,295)	$	14,495
Trademarks and trade names														Trademarks and trade names	$	35,290	$	(27,172)	$	8,118	$	36,790	$	(26,774)	$	10,016
Developed technology	Developed technology	123,530		(93,058)		30,472		119,407		(83,540)		35,867		Developed technology	115,221		(89,742)		25,479		121,730		(94,792)		26,938
Customer contracts/relationships	Customer contracts/relationships	71,110		(46,026)		25,084		71,110		(40,971)		30,139		Customer contracts/relationships	71,587		(49,768)		21,819		71,110		(47,688)		23,422
In-process R&D	In-process R&D	3,526		—		3,526		3,826		—		3,826		In-process R&D	3,526		—		3,526		3,526		—		3,526
Effects of foreign currency translation	Effects of foreign currency translation	(1,077)		356		(721)		(634)		86		(548)		Effects of foreign currency translation	(1,273)		412		(861)		(1,021)		292		(729)
Total	Total	$	233,879	$	(164,515)	$	69,364	$	230,499	$	(146,720)	$	83,779	Total	$	224,351	$	(166,270)	$	58,081	$	232,135	$	(168,962)	$	63,173

During the third quarter of fiscal year 2022, the Company recognized a pre-tax impairment charge of $7.0 million to Jaybird-related intangible assets, primarily related to customer contracts and relationships, as a result of its decision to discontinue Jaybird-branded products (see Note 13).

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Note 9 — Financing Arrangements

The Company had several uncommitted, unsecured bank lines of credit and letters of credit aggregating ~~$179.2~~$171.5 million and ~~$195.0~~$181.3 million as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, respectively. There are no financial covenants under ~~these~~the lines of credit with which the Company must comply. There was no borrowing outstanding under the lines of credit as of September 30, 2023 or March 31, 2023. As of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, the Company had outstanding bank guarantees of ~~$11.6~~$12.2 million and ~~$25.5~~$13.6 million, ~~respectively, under these lines of credit. There was no borrowing outstanding under these lines of credit as of December 31, 2022 or March 31, 2022.~~respectively.

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Note 10 — Commitments and Contingencies

Product Warranties

Changes in the Company’s warranty ~~liability~~liabilities for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows (in thousands):


		Three Months Ended December 31,				Nine Months Ended December 31,					Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Beginning of the period	Beginning of the period	$	41,960	$	49,173	$	46,219	$	48,832	Beginning of the period	$	39,885	$	43,841	$	40,886	$	46,219

Provision	Provision	8,920		6,962		23,440		23,503		Provision	10,393		7,897		19,485		14,520
Settlements	Settlements	(8,979)		(8,056)		(26,358)		(24,219)		Settlements	(9,838)		(9,098)		(19,756)		(17,379)
Effects of foreign currency translation	Effects of foreign currency translation	730		(144)		(670)		(181)		Effects of foreign currency translation	(175)		(680)		(350)		(1,400)
End of the period	End of the period	$	42,631	$	47,935	$	42,631	$	47,935	End of the period	$	40,265	$	41,960	$	40,265	$	41,960

Indemnifications

The Company indemnifies certain of its suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. As of ~~December 31, 2022,~~ September 30, 2023, no material amounts have been accrued for these indemnification provisions. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.

The Company also indemnifies its current and former directors and certain of its current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not limited, the obligations are conditional in nature and the facts and circumstances involved in any situation that might arise are variable.

Legal Proceedings

From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of its business. The Company is currently subject to several such claims and ~~a small number of~~ legal proceedings. The Company ~~believes that these matters lack merit and~~ intends to vigorously defend against them. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. The Company follows ASC ("Accounting Standards Codification") 450 in determining the accounting and disclosure for these contingencies. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows orand results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company's defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company's business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company ~~whether meritorious or not,~~ can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain a necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect the Company's business.

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Note 11 — Shareholders’ Equity

Share Repurchases

2020 Share Repurchase Program

In May 2020, the Company's Board of Directors approved the 2020 share repurchase program, which authorized the Company to use up to $250.0 million to purchase upLogitech shares to ~~17.3 million of Logitech shares.~~support equity incentive plans or potential acquisitions. Shares may be repurchased from time to time on the open market, through block trades or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. In April 2021, the Company's Board of Directors approved an increase of $750.0 million to the

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2020 share repurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021.

In July 2022, the Company’s Board of Directors approved an increase of $500 million to the 2020 share repurchase program, to an aggregate amount of up to $1.5 ~~billion to purchase up to 17.3 million of Logitech shares.~~billion. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. The 2020 share repurchase program expired on July 27, 2023. The Company repurchased 16.7 million shares for an aggregate cost of $1.2 billion under the 2020 share repurchase program, of which 2.6 million shares for an aggregate cost of $159.1 million were repurchased during the six months ended September 30, 2023.

2023 Share Repurchase Program

In June 2023, the Company's Board of Directors approved a new, three-year share repurchase program, which allows the Company to use up to $1.0 billion to repurchase its shares. The 2023 share repurchase program enables the Company to repurchase shares for cancellation, as well as to support equity incentive plans or potential acquisitions. The Swiss Takeover Board approved the 2023 share repurchase program in July 2023 and the program became effective on July 28, 2023. During the six months ended September 30, 2023, the Company repurchased 0.9 million shares for an aggregate cost of $60.1 million under the 2023 share repurchase program for cancellation, of which $30.2 million of the aggregate cost was not paid yet as of September 30, 2023. As of ~~December 31, 2022~~September 30, 2023, $940.0~~$596.3~~ million was available for repurchase under the ~~2020~~2023 share repurchase program.

Swiss law limits a company’s ability to hold or repurchase its own shares. The ~~2020~~aggregate par value of all shares held in treasury by the Company and its subsidiaries may not exceed 10% of the share ~~repurchase~~capital of the Company, which for the Company corresponds to approximately 17.3 million registered shares. This limitation does not apply to shares repurchased for cancellation, due to the Board of Directors’ authority under the Company’s capital band set forth in the Company’s Articles of Incorporation to cancel shares up to a limit of 10% of the Company's current share capital. As of September 30, 2023, the Company had a total of 16.0 million shares held in treasury stock, which includes 0.9 million shares that have been repurchased for cancellation.

To the extent that the shares are repurchased to support equity incentive plans or potential acquisitions, the shares are repurchased on the ordinary trading line of SIX Swiss Exchange (“SIX”) and/or The Nasdaq Global Select Market (“Nasdaq”). Shares repurchased for cancellation purposes are repurchased on a second trading line on SIX. Shares may be repurchased from time to time on the open market or in privately negotiated transactions, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors and the program ~~is expected to remain in effect for a period~~does not require the purchase of ~~three years through July 27, 2023.~~any minimum number of shares.

Dividends

During the ~~nine~~three and six months ended ~~December 31,~~September 30, 2023, the Company declared and paid cash dividends of CHF 1.06 (USD equivalent of $1.19 based on the exchange rate on the date of declaration) per share, totaling $187.2 million on the Company's outstanding shares. During the three and six months ended September 30, 2022, the Company declared and paid cash dividends of CHF 0.96 (USD equivalent of $1.00 based on the exchange rate on the date of declaration) per share, totaling $162.7 million on the Company's outstanding shares. During the nine months ended December 31, 2021, the Company declared and paid cash dividends of CHF 0.87 (USD equivalent of $0.95 based on the exchange rate on the date of declaration) per share, totaling $159.4 million on the Company's outstanding shares.

Any future dividends will be subject to approval of the Company's shareholders.

Accumulated Other Comprehensive Income (Loss)

The accumulated other comprehensive income (loss) was as follows (in thousands):

Cumulative Translation Adjustment Defined Benefit Plans Deferred Hedging Gains (Losses) Total
March 31, 2022 $ (102,461) $ (3,495) $ 1,833 $ (104,123)
Other comprehensive income (loss) (5,988) (330) (6,527) (12,845)
December 31, 2022 $ (108,449) $ (3,825) $ (4,694) $ (116,968)



	Cumulative Translation Adjustment		Defined Benefit Plans		Deferred Hedging Gains (Losses)		Total
March 31, 2023	$	(100,869)	$	4,525	$	(3,933)	$	(100,277)
Other comprehensive income (loss)	(12,151)		(248)		5,730		(6,669)
September 30, 2023	$	(113,020)	$	4,277	$	1,797	$	(106,946)

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Note 12 — Segment Information

The Company operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for gaming, PCs, tablets, video conferencing, and other digital platforms. Operating performance measures are provided directly to the Company's CEO, who is considered to be the Company’s Chief Operating Decision Maker. The CEO periodically reviews information such as sales and adjusted operating income (loss) to make business decisions. These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization and impairment of intangible assets, acquisition-related costs, and change in fair value of contingent consideration from business acquisitions.

20During the first quarter of fiscal year 2024, the Company changed its presentation of Sales by Product Category to provide a simpler and clearer view of the Company's business. The change in presentation did not have an impact on previously reported total sales. As a result of these changes, certain prior-period amounts for the three and six months ended September 30, 2022 have been reclassified to conform to the current period presentation. See Note 1 for further information on the change in presentation.

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Sales by product ~~categories and sales channels, excluding intercompany transactions,~~category in the current presentation for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows (in thousands):

Three Months Ended
December 31, Nine Months Ended
December 31,
2022 2021 2022 2021
Pointing Devices $ 199,106 $ 231,090 $ 567,589 $ 602,982
Keyboards & Combos 220,059 281,608 648,632 736,237
PC Webcams 58,481 115,115 178,033 319,504
Tablet & Other Accessories 65,157 82,859 185,945 242,932
Gaming (1)
391,975 469,282 972,457 1,135,456
Video Collaboration 226,374 287,187 708,796 753,725
Mobile Speakers 38,321 56,748 99,826 124,724
Audio & Wearables 69,104 104,280 211,821 318,965
Other (2)
1,348 4,613 5,642 16,582
Total Sales $ 1,269,925 $ 1,632,782 $ 3,578,741 $ 4,251,107


	Three months ended September 30,				Six months ended September 30,
	2023		2022		2023		2022
Gaming (1)	$	282,104	$	322,028	$	548,533	$	619,949
Keyboards & Combos	194,914		200,853		375,769		428,573
Pointing Devices	191,676		185,200		366,130		368,483
Video Collaboration	152,389		179,199		291,735		360,831
Webcams	88,222		102,018		163,422		211,280
Tablet Accessories	63,677		54,203		134,013		120,788
Headsets	44,411		44,750		81,261		90,693
Other (2)	39,615		60,700		70,644		108,219
Total Sales	$	1,057,008	$	1,148,951	$	2,031,507	$	2,308,816

(1) Gaming includes streaming services revenue generated by Streamlabs.

(2) Other ~~includes Smart Home.~~primarily consists of mobile speakers and PC speakers.

Sales by geographic region (based on the customers’ locations) for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows (in thousands):


		Three Months Ended December 31,				Nine Months Ended December 31,					Three months ended September 30,				Six months ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Americas	Americas	$	513,835	$	674,393	$	1,508,318	$	1,828,474	Americas	$	462,406	$	492,176	$	907,574	$	994,483
EMEA	EMEA	428,532		552,133		1,016,187		1,309,542		EMEA	311,805		297,176		570,683		587,655
Asia Pacific	Asia Pacific	327,558		406,256		1,054,236		1,113,091		Asia Pacific	282,797		359,599		553,250		726,678
Total sales		$	1,269,925	$	1,632,782	$	3,578,741	$	4,251,107
Total Sales										Total Sales	$	1,057,008	$	1,148,951	$	2,031,507	$	2,308,816

Revenue from sales to customers in the United States, Germany and China each represented 10% or more of the total consolidated sales for each of the periods presented herein. No other countries represented 10% or more of the Company’s total consolidated sales for the periods presented herein.

Switzerland, the Company’s ~~home~~country of domicile, represented 4%3.0% and 3%2.0% of the Company's total consolidated sales for the three months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ respectively, and 3%2.0% for each of the ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 and ~~2021.~~2022.

Three customers of the Company each represented 10% or more of the total consolidated gross sales for each of the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022. ~~Two customers of the Company each represented 10% or more of the total consolidated sales for each of the three and nine months ended December 31, 2021.~~

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Property, plant and equipment, net (excluding software) and right-of-use assets by geographic region were as follows (in thousands):


		December 31, 2022		March 31, 2022			September 30, 2023		March 31, 2023
Americas	Americas	$	49,447	$	22,578	Americas	$	69,504	$	59,183
EMEA	EMEA	38,380		23,830		EMEA	32,950		38,890
Asia Pacific	Asia Pacific	78,458		87,265		Asia Pacific	58,778		69,939
Total	Total	$	166,285	$	133,673	Total	$	161,233	$	168,012

Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were ~~$48.9~~$69.0 million, ~~$56.8~~$40.2 million and ~~$17.6~~$16.6 million, respectively, as of ~~December 31, 2022,~~September 30, 2023, and $~~21.7~~58.7 million, ~~$66.8~~$48.8 million, and ~~$0.9~~$17.7 million respectively, as of March 31, 2022. Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company’s country of incorporation, were $12.9 million and $13.6 million as of December 31, 2022 and March 31, 2022, respectively.2023. No other countries

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represented more than 10% ~~or more~~ of the Company’s total consolidated property, plant and equipment, net (excluding software) and right-of-use assets as of ~~December 31, 2022~~September 30, 2023 or March 31, ~~2022.~~2023.

Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company’s country of domicile, were $9.9 million and $13.7 million as of September 30, 2023 and March 31, 2023, respectively.

Note 13 — Restructuring

During the second quarter of fiscal year 2023, the Company initiated a restructuring plan to realign its business group and engineering structure with its go-to-market strategy to more effectively compete within the enterprise market and to better serve end-users. ~~As a result,~~During the fourth quarter of fiscal year 2023, the Company ~~recorded pre-tax restructuring~~undertook further

actions to remove organization layers as well as streamline its marketing organization to increase efficiency. These actions resulted in charges of ~~$5.7 million~~ ~~and~~ ~~$16.5 million~~ for the three and nine months ended December 31, 2022, respectively, which are included in restructuring charges, net in the condensed consolidated statements of operations. The restructuring charges of $5.7 million for the three months ended December 31, 2022 primarily include contract termination and other costs. The restructuring charges for the nine months ended December 31, 2022 include $11.3 million employee severance and other termination benefits and $5.2 million contract termination and other costs. As of December 31, 2022, restructuring liabilities of $8.3 million related to this restructuring plan are included in accrued and other current liabilities in the condensed consolidated balance sheet, which include $3.6 million related to employee severance and other termination benefits ~~and $4.7 million related to~~as well as contract termination and other costs. The Company expects to substantially complete ~~this~~these restructuring ~~plan~~activities within ~~the next nine months.~~

~~During the third quarter of~~ fiscal year 2022, as part of the Company's strategic review, the Company decided to cease future product launches under the Jaybird brand within the Audio & Wearables product category. As a result, the Company recorded $7.6 million in cost of goods sold related to write-offs for excess inventories, $7.0 million impairment to the intangible assets acquired as part of the Jaybird acquisition (see Note 8), and $1.8 million in restructuring charges, net, primarily related to production cancellation costs, for the three and nine months ended December 31, 2021. This restructuring plan has been substantially completed.2024.

The following table summarizes restructuring-related activities during the six months ended September 30, 2023 (in thousands):



	Termination Benefits		Contract Termination and Other		Total
Accrued restructuring liability at March 31, 2023 (1)	$	14,177	$	5,357	$	19,534
Charges (credits), net	3,309		(1,586)		1,723
Cash payments	(16,804)		(1,231)		(18,035)
Accrued restructuring liability at September 30, 2023 (1)	$	682	$	2,540	$	3,222

(1) The accrual balances are included in accrued and other current liabilities on the Company’s condensed consolidated balance sheets.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements” ~~within~~within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on beliefs of our management as of the filing date of this Quarterly Report on Form 10-Q. These forward-looking statements include, among other things, statements related to:

•Our strategy for growth, future revenues, earnings, cash flow, uses of cash and other measures of financial performance, and market position;

•Our business strategy and investment priorities in relation to competitive offerings and evolving consumer demand trends affecting our products and markets, current and future worldwide geopolitical, economic and capital market conditions, including fluctuations in currency exchange rates, inflation, and ~~current and future general regional~~ economic ~~conditions for fiscal year 2023 and beyond;~~downturns;

•Our expectations regarding our restructuring efforts, including the timing thereof;

•Long-term, secular trends that impact our product categories;

•The scope, nature or impact of acquisition, strategic alliance, and divestiture ~~activities;~~activities

•Our expectations regarding the success of our strategic acquisitions, including integration of acquired operations, products, technology, internal controls, personnel and management teams;

•Our expectations regarding our effective tax rate, future tax benefits, tax settlements, the adequacy of our provisions for uncertain tax positions;

•Our expectations regarding our potential indemnification obligations, and the outcome of pending or future legal proceedings and tax audits;

•Our business ~~and~~development, product development and innovation, and their impact on future operating results and anticipated operating costs for fiscal year ~~2023~~2024 and beyond;

•Opportunities for growth and our ability to execute on and take advantage of them, including our marketing initiatives and strategy and our expectations regarding the success thereof;

•Potential tariffs, their effects and our ability to mitigate their effects;

•~~Capital investments and research and development;~~

•Our expectations regarding our share repurchase and dividend programs;

•~~Our expectations regarding our restructuring efforts, including the timing thereof;~~

•The sufficiency of our cash and cash equivalents, cash generated from operations, and available borrowings under our bank lines of credit to fund capital expenditures and working capital needs; and

•The effects of environmental and other laws and regulations in the United States and other countries in which we ~~operate; and~~

•The impact of global and regional events, such as the coronavirus ("COVID-19") pandemic, inflation and the war in Ukraine, and any associated economic downturn and impacts to our business and future operating and financial performance.operate.

Forward-looking statements also include, among others, those statements including the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should,” “will,” and similar language. These statements reflect our views and assumptions as of the date of this Quarterly Report on Form 10-Q. All forward-looking statements involve risks and uncertainties that could cause our actual performance to differ materially from those anticipated in the forward-looking statements depending on a variety of factors. Important information as to these factors can be found in this Quarterly Report on Form 10-Q under the headings of “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Overview of our Company,” “Critical Accounting Estimates,” and “Liquidity and Capital Resources,” among others. Factors that might cause or contribute to such differences include, but are not limited to, those discussed under Part II, Item 1A “Risk Factors” as well as elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission, or “SEC.” You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

You should read the following discussion in conjunction with the interim unaudited condensed consolidated financial statements and related notes.

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Overview of Our Company

~~Logitech~~Logitech’s mission is to help all people pursue their passions in a ~~world leader in designing, manufacturing~~way that is good for people and ~~marketing~~the planet. We design, manufacture, and sell products that help ~~connect~~businesses thrive and bring people ~~to digital~~together when working, creating, gaming and ~~cloud experiences. Over forty years ago, Logitech created~~streaming. We sell these products ~~to improve experiences around the personal computer ("PC") platform, and today it is~~through a multi-brand, multi-category company designing products that enable people to pursue their passions and connect to the world. Logitech’s products align with several large secular trends including work and learn from anywhere, video everywhere, the increasing popularitynumber of ~~gaming as a spectator and participant sport, and the democratization of content creation. Logitech's brands include~~brands: Logitech, Logitech G (including ASTRO Gaming, Streamlabs, and Blue ~~Microphones,~~Microphones) and Ultimate Ears. ~~Our Company's website is www.logitech.com.~~

Our ~~products participate primarily in four large market opportunities: Creativity~~diverse portfolio includes Gaming, Keyboards & ~~Productivity, Gaming,~~Combos, Pointing Devices, Video Collaboration, Webcams, Tablet Accessories, and ~~Music.~~Headsets. We sell our products to a broad network of ~~domestic and~~ international customers, including direct sales to retailers, e-tailers, and ~~enterprise customers~~end consumers through our e-commerce platform, and indirect sales through distributors. Our worldwide channel network includes consumer electronics distributors, retailers, e-tailers, mass merchandisers, specialty stores, computer and telecommunications stores, value-added resellers and online merchants. We primarily sell our services directly to end ~~customers.~~customers through distributors.

From time to time, we may seek to partner with or acquire, when appropriate, companies that have products, personnel, and technologies that complement our strategic direction. We continually review our product offerings and our strategic direction in light of our profitability targets, competitive conditions, changing consumer trends and the evolving nature of the interface between the consumer and the digital world.

Impacts of Macroeconomic and Geopolitical Conditions ~~and Other Factors~~ on our Business

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the world. The COVID-19 pandemic resulted in industry-wide global supply chain challenges, including manufacturing, transportation and logistics. We purchase certain products and key components from a limited number of sources, and depend on the supply chain, including freight, to receive components, transport finished goods and deliver our products across the world.

~~More recently, we have also~~Our business has been impacted by a~~dverse~~adverse macroeconomic and geopolitical conditions. These conditions include ~~but are not limited to~~ inflation, interest rate and foreign currency fluctuations, ~~and~~ slowdown of economic activity around the world, ~~in part due to rising interest rates,~~ and lower consumer and enterprise spending. ~~In addition, the war in Ukraine increased~~

The global ~~supply chain, logistics,~~ and ~~inflationary challenges. Such global or~~ regional economic and political conditions adversely affect demand for our products. These conditions also ~~have~~had an impact on our suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result, impacting the pricing of our products. ~~Price increases may not successfully offset cost increases or may cause us to lose market share and in turn adversely impact our results of operations.~~

While global supply chain challenges have improved since the second quarter of fiscal year 2023, including logistics costs and shipping lead times, the increase of COVID-19 infections in China during the third quarter of fiscal year 2023 causes uncertainty in supply availability. If macroeconomic and geopolitical conditions and COVID-19 related factors do not improve or worsen, our results of operations will continue to be adversely impacted.

For additional information, see "Liquidity and Capital Resources" below and Part II, ~~item~~Item 1A "Risk ~~Factors~~Factors".,"

Trends and Uncertainties

Several long-term secular-trends offer long-term structural growth opportunities across Logitech’s product portfolio, including ~~under~~work and learn from anywhere (hybrid work and learn), video everywhere, the ~~caption "Adverse global~~rise of social gaming for participants and ~~regional economic~~spectators, and ~~geopolitical conditions can materially adversely affect our business, results~~the democratization of ~~operations~~digital content creation. We design, create and ~~financial condition~~,~~" “We purchase key components~~sell products that benefit from these secular trends. The trend of hybrid work and learn provides an opportunity to equip meeting rooms, classrooms and personal workspaces, at home or in the office. It also provides an opportunity for increased commercial and consumer adoption of video conferencing. Our video collaboration products are compatible with a variety of video conference platforms, including Zoom, Microsoft Teams, Google Meet, etc. Moving from work to play, Logitech gaming and streaming products benefit from social gaming which continues to gain popularity through online gaming, multi-platform experiences and esports. In addition, the democratization of digital content creation presents an opportunity for anyone to be a ~~limited number~~content creator because of ~~sources,~~the accessibility of the tools necessary to code, design, create, make music, game or broadcast to professional standards.

While we believe we will further benefit from these secular trends, we have experienced and will continue to experience challenges that impact our business and ~~operating results could be adversely affected if supply were delayed or constrained or if there were shortages~~financial results. These challenges include (i) the current macroeconomic environment, including interest rate fluctuations, inflation, foreign exchange movements and low economic growth in certain regions, (ii) low consumer confidence and recent declines in enterprise spending leading to reduced demand for some of ~~required components,” “Our principal manufacturing operations~~our products, (iii) the uncertainty in strategy and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations,” “If we do not accurately forecast markettiming of enterprises’ “return-to-office” impacting demand for our Video Collaboration and other products, ~~our business~~ and ~~operating results could be adversely affected,” "Future impacts~~(iv) the timing of the COVID-19 pandemic are still uncertain and cannot be predicted, and could adversely affect our business, results of operations and financial condition," and "If we do not successfully coordinate the worldwide manufacturing and distributionfurther development of our business-to-business go-to-market capabilities.

We expect these challenges to continue in the near-term. We have taken steps to mitigate the impact of these challenges, including but not limited to: (i) reduction in our operating expenses in order to maintain margins and size the business for the current market, (ii) reduction in inventories to more appropriately align with demand, (iii) continued investment in our business-to-business direct sales channel in order to improve performance, and (iv) release of new products ~~we could lose sales.”~~to increase the value proposition of our portfolio.

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~~Summary of Financial Results~~

~~Our total sales for the three and nine months ended December 31, 2022~~ ~~decreased 22% and 16%, respectively, compared to the same periods of the prior fiscal year, driven by a decline in sales of all of our product categories.~~

~~Sales for the three months ended December 31, 2022 decreased~~ ~~24%, 22% and 19% in the Americas, EMEA, and Asia Pacific regions, respectively, compared to the same period of the prior fiscal year. Sales for the nine months ended December 31, 2022~~ ~~decreased 22%, 18%, and 5%~~ ~~in the EMEA, Americas and Asia Pacific regions, respectively, compared to the same period of the prior fiscal year.~~

~~Gross margin was~~ ~~37.6%~~ ~~and 38.4% for the three and nine months ended December 31, 2022, respectively, and~~ ~~decreased by 270 basis points and 320~~ basis points, respectively, compared to the same periods of the prior fiscal year. The gross margin decline for the three-month period was primarily driven by unfavorable impacts from changes in currency exchange rates, higher promotional spending, and inflationary pressure on costs, partially offset by a reduction in our use of expedited shipping. The gross margin decline for the nine-month period was mainly due to unfavorable currency impacts and inflationary pressure on costs, partially offset by a reduction in our use of expedited shipping.

~~Operating expenses for the three months ended December 31, 2022 were~~ ~~$300.5 million~~, or 23.7% of sales, compared to $395.3 million, or 24.2% of sales, in the same period of the prior fiscal year. Operating expenses for the nine months ended December 31, 2022 were $956.0 million, or 26.7% of sales, compared to $1,123.9 million or 26.4% of sales, in the same period of the prior fiscal year.

~~Net income for the three and nine months ended December 31, 2022 was~~ ~~$140.2 million and $323.1 million, respectively, compared to the same periods of the prior fiscal year of $210.0 million, and $536.3 million, respectively.~~

~~Trends in Our Business~~

Our products participate primarily in four large multi-category market opportunities, including Creativity & Productivity, Gaming, Video Collaboration and Music. The following discussion represents key trends specific to our market opportunities.

~~Trends Specific to Our Market Opportunities~~

~~Creativity & Productivity:~~ Mice and keyboards have long-term structural growth opportunities driven largely by work-from-home, learn-from-home and hybrid work trends. We believe that innovative personal workspace peripherals, such as our mice and keyboards, can refresh the design of personal workspaces and help improve the productivity and engagement of remote work and learning, thus providing growth opportunities. Hybrid work culture has expanded the number of new workspaces to which we can attach our personal workspace peripherals. Increasing adoption of various cloud-based applications has led to multiple unique consumer use cases, which we are addressing with our innovative product portfolio and a deep understanding of our customer base. These hybrid work trends coupled with the popularity of streaming provide growth opportunities for products in our portfolio. The continued popularity of mobile computing devices, including tablets, provides attractive market opportunities for our peripherals and accessories.

~~Gaming:~~ Despite recent declines in the gaming market, PC gaming and console gaming platforms have strong long-term structural growth opportunities driven largely by the popularity of social gaming through online gaming, multi-platform experiences, and esports. We expect gaming will increasingly become one of the largest participant and spectator sports in the world. We believe Logitech is well positioned to benefit from overall gaming market growth. In addition, our acquisition of Streamlabs provides a solid platform to deliver recurring services and subscriptions to gamers and streamers.

~~Video Collaboration~~: The long-term structural growth opportunities in the video collaboration market continue to drive commercial and consumer adoption of video conferencing. Video meetings continue to be an opportunity as companies want lower-cost, cloud-based solutions that can provide their employees with the ability to work from anywhere. We are continuing our efforts to create and sell innovative products to equip home offices, small-size meeting rooms, such as huddle rooms, and medium and large-sized meeting rooms. We will continue to invest in the development of select business-oriented products, targeted product marketing and sales channel development. We believe the continued digitization of learning and hybrid learning environments is a future growth opportunity.

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~~Music:~~ Consumers are optimizing their audio experiences on their tablets and smartphones with a variety of music peripherals including wireless mobile speakers and in-ear and other headphones. However, the mobile speaker market has matured and the integration of personal voice assistants has increased competition in the speaker category leading to a decline in our Mobile Speakers category sales in the past few years. In addition, we will continue developing true wireless audio products as growth in this category of the wireless audio market continues to be strong.

Business Seasonality and Product Introductions

We have historically experienced higher sales in our third fiscal quarter ending December 31, compared to other fiscal quarters in our fiscal year, primarily due to the increased consumer demand for our products during the year-end holiday buying season and year-end spending by enterprises. Additionally, new product introductions and business acquisitions can significantly impact sales, product costs and operating expenses. Product introductions can also impact our sales to distribution channels as these channels are filled with new product inventory following a product introduction, and often channel inventory of an earlier model product declines as the next related major product launch approaches. Sales can also be affected when consumers and distributors anticipate a product introduction or changes in business circumstances. However, neither historical seasonal patterns nor historical patterns of product introductions should be considered reliable indicators of our future pattern of product introductions, future sales or financial performance. Furthermore, cash flow is correspondingly lower in the first half of our fiscal year as we typically build inventories in advance for the third quarter and we pay an annual dividend following our Annual General Meeting, which is typically in September.

~~Capitalization~~Summary of Financial Results

Our total sales for the three and ~~amortization~~six months ended September 30, 2023 decreased 8% and 12%, compared to the three and six months ended September 30, 2022, respectively, driven by a decline in sales of ~~research~~most of our product categories, as a result of lower demand.

Sales for the three months ended September 30, 2023 decreased 21% and ~~development expenses~~6% in the ~~U.S.~~

~~Pursuant~~Asia Pacific and Americas regions, respectively, and increased 5% in the EMEA region, compared to the ~~Tax Cuts~~three months ended September 30, 2022. Sales for the six months ended September 30, 2023 decreased 24%, 9%, and ~~Jobs Act of 2017, research and development expenses are required to be capitalized and amortized over five years for U.S. tax purposes if the research and development activities are performed~~3% in the ~~United States, effective~~Asia Pacific, Americas, and EMEA regions, respectively, compared to the six months ended September 30, 2022.

Gross margin was 41.5% and 40.1% for ~~tax year beginning after December 31, 2021. Absent a change~~the three and six months ended September 30, 2023, respectively, and increased by 330 and 120 basis points, respectively, compared to the three and six months ended September 30, 2022. The increase in ~~legislation,~~gross margin for the provision was effective for us beginning in fiscal year 2023 which delays the deductibility of research and development expenses. As a result, cash tax payments in the United States have generally increased beginning in fiscal yearthree months ended September 30, 2023, compared to ~~prior years.~~the three months ended September 30, 2022, was primarily driven by cost improvement and less reliance on expedited shipping, as well as lower promotions, partially offset by unfavorable product mix. The increase in gross margin for the six months ended September 30, 2023, compared to the six months ended September 30, 2022, was primarily driven by cost improvement and less reliance on expedited shipping, partially offset by unfavorable product mix.

Operating expenses for the three months ended September 30, 2023 were $282.0 million, or 26.7% of sales, compared to $311.4 million, or 27.1% of sales, for the three months ended September 30, 2022. Operating expenses for the six months ended September 30, 2023 were $579.2 million, or 28.5% of sales, compared to $655.5 million, or 28.4% of sales, for the six months ended September 30, 2022. The decrease in operating expense was primarily driven by a reduction in marketing and advertising spend.

Net income for the three and six months ended September 30, 2023 was$137.1 million and $199.8 million, respectively, compared to $82.1 million and $182.9 million for the three and six months ended September 30, 2022, respectively.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make assumptions, judgments, and estimates, that affect reported amounts of assets, liabilities, sales and expenses, and the disclosure of contingent assets and liabilities.

We consider an accounting estimate critical if it: (i) requires management to make judgments and estimates about matters that are inherently uncertain; and (ii) is important to an understanding of our financial condition and operating results.

We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.

We believe that the assumptions, judgments and estimates involved in the accounting for accruals for customer incentives and related breakage when appropriate, accrued sales return liability, inventory valuation, and

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uncertain tax positions, ~~and business acquisitions~~ have the greatest potential impact on our condensed consolidated financial statements. These areas are key components of our results of operations and are based on complex rules requiring us to make judgments and estimates and consequently, we consider these to be our critical accounting policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.

There have been no material changes in our critical accounting estimates during the ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 compared with the critical accounting estimates disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022.~~2023.

Inflation Reduction Act in the U.S.

~~Adoption of New Accounting Pronouncements~~

~~Refer~~On August 16, 2022, the “Inflation Reduction Act” (H.R. 5376) ("IRA") was signed into law in the U.S. The IRA establishes a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. The IRA is not expected to ~~Note 1 to the condensed consolidated~~have a material impact on our financial statements ~~included in this Quarterly Report on Form 10-Q~~ for ~~recent accounting pronouncements adopted.~~

the tax year ending March 31, 2024
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Constant Currency

We refer to our net sales growth rates excluding the impact of currency exchange rate fluctuations as "constant currency" sales growth rates. Percentage of constant currency sales growth 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.

Given our global sales presence and the reporting of our financial results in U.S. Dollars, our financial results could be affected by significant shifts in currency exchange rates. See “Results of Operations” for information on the effect of currency exchange rate fluctuations on our sales. If the U.S. Dollar appreciates or depreciates in comparison to other currencies in future periods, this will affect our results of operations in future periods as well.

References to Sales

The term “sales” means net sales, except as otherwise specified and the sales growth discussion and sales growth rate percentages are in U.S. Dollars, except as otherwise specified.

Results of Operations

Net Sales

Our sales for the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023 decreased ~~22%~~8% and ~~16%~~12%, respectively, compared to the ~~same periods of the prior fiscal year, which was~~three and six months ended September 30, 2022, primarily ~~driven by~~due to a decline in sales of ~~all~~most of our product ~~categories. Our sales for the three- and nine- month periods were negatively impacted from~~categories as a result of lower ~~demand, higher promotional spending, and unfavorable changes in currency exchange rates.~~demand. If currency exchange rates had been constant in the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~and 2021,~~ our constant dollar sales reduction rates would have been ~~17%~~9% and 12%, respectively.

Sales Denominated in Other Currencies

Although our financial results are reported in U.S. Dollars, a portion of our sales was generated in currencies other than the U.S. Dollar, such as the Euro, Chinese Renminbi, Australian Dollar, Canadian Dollar, Japanese Yen, Pound Sterling and New Taiwan Dollar. During the three months ended ~~December 31, 2022,~~September 30, 2023, approximately ~~52%~~50% of our sales were denominated in currencies other than the U.S. Dollar.

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Sales by Region

The following table presents the change in sales by region for the three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, compared with the three and ~~nine~~six months ended ~~December 31, 2021:~~September 30, 2022:


		Sales Growth Rate				Constant Dollar Sales Growth Rate					Sales Growth Rate				Constant Dollar Sales Growth Rate
		Three Months Ended December 31, 2022		Nine Months Ended December 31, 2022		Three Months Ended December 31, 2022		Nine Months Ended December 31, 2022			Three Months Ended September 30, 2023		Six Months Ended September 30, 2023		Three Months Ended September 30, 2023		Six Months Ended September 30, 2023
Americas	Americas	(24)	%	(18)	%	(23)	%	(17)	%	Americas	(6)	%	(9)	%	(6)	%	(9)	%
EMEA	EMEA	(22)	%	(22)	%	(13)	%	(13)	%	EMEA	5	%	(3)	%	(2)	%	(6)	%
Asia Pacific	Asia Pacific	(19)	%	(5)	%	(12)	%	1	%	Asia Pacific	(21)	%	(24)	%	(18)	%	(21)	%

Americas:

The decrease in sales in the Americas region for the ~~three-~~three-month and ~~nine- month~~six-month periods presented above was primarily driven by a ~~decrease~~decline in sales of ~~all~~most of our product ~~categories.~~categories, partially offset by an increase in sales of Tablet Accessories.

EMEA:

The increase in sales in our EMEA region for the three-month period presented above was primarily driven by the increase in sales of Gaming, Pointing Devices, and Keyboards & Combos, partially offset by a decline in sales of Webcams. The decrease in sales in our EMEA region for the ~~three-month~~six-month period presented above was primarily driven by ~~the decrease~~decreases in sales of ~~all of our product categories. The decrease in sales in our EMEA region for the nine-month period was primarily driven~~Video Collaboration and Webcams, partially offset by ~~the decrease~~an increase in sales of ~~all of our product categories except Video Collaboration.~~Pointing Devices.

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Asia Pacific:

The decrease in sales in our Asia Pacific region for the three-month ~~period~~and six-month periods presented above was primarily driven by athe decrease in sales of Gaming, Keyboards & Combos, ~~Gaming, PC Webcams,~~ and ~~Pointing Devices. The decrease in sales for the nine-month period was primarily driven by a decrease in sales of PC Webcams, Keyboards & Combos, Audio & Wearables, and~~ Video ~~Collaboration, partially offset by an increase in sales of Gaming.~~Collaboration.

Sales by Product ~~Categories~~Category

During the first quarter of fiscal year 2024, we changed the presentation of sales by product category to provide a simpler and clearer view of our business. The change in presentation did not have an impact on previously reported total sales. As a result of these changes, certain prior-period amounts for the three and six months ended September 30, 2022 have been reclassified to conform to the current period presentation. See Note 1 to the condensed consolidated financial statements for further information on the change in presentation.

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Sales by product ~~categories~~category in the current presentation for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows ~~(Dollars~~(dollars in thousands):


		Three Months Ended December 31,						Nine Months Ended December 31,							Three months ended September 30,						Six months ended September 30,
		2022		2021		Change		2022		2021		Change			2023		2022		Change		2023		2022		Change
Gaming (1)														Gaming (1)	$	282,104	$	322,028	(12)	%	$	548,533	$	619,949	(12)	%
Keyboards & Combos														Keyboards & Combos	194,914		200,853		(3)		375,769		428,573		(12)
Pointing Devices	Pointing Devices	$	199,106	$	231,090	(14)	%	$	567,589	$	602,982	(6)	%	Pointing Devices	191,676		185,200		3		366,130		368,483		(1)
Keyboards & Combos		220,059		281,608		(22)		648,632		736,237		(12)
PC Webcams		58,481		115,115		(49)		178,033		319,504		(44)
Tablet & Other Accessories		65,157		82,859		(21)		185,945		242,932		(23)
Gaming (1)		391,975		469,282		(16)		972,457		1,135,456		(14)
Video Collaboration	Video Collaboration	226,374		287,187		(21)		708,796		753,725		(6)		Video Collaboration	152,389		179,199		(15)		291,735		360,831		(19)
Mobile Speakers		38,321		56,748		(32)		99,826		124,724		(20)
Audio & Wearables		69,104		104,280		(34)		211,821		318,965		(34)
Webcams														Webcams	88,222		102,018		(14)		163,422		211,280		(23)
Tablet Accessories														Tablet Accessories	63,677		54,203		17		134,013		120,788		11
Headsets														Headsets	44,411		44,750		(1)		81,261		90,693		(10)
Other (2)	Other (2)	1,348		4,613		(71)		5,642		16,582		(66)		Other (2)	39,615		60,700		(35)		70,644		108,219		(35)

Total Sales	Total Sales	$	1,269,925	$	1,632,782	(22)	%	$	3,578,741	$	4,251,107	(16)	%	Total Sales	$	1,057,008	$	1,148,951	(8)	%	$	2,031,507	$	2,308,816	(12)	%

(1) Gaming includes streaming services revenue generated by Streamlabs.

(2) Other primarily consists of mobile speakers and PC speakers.

Gaming

Our Gaming category includes ~~Smart Home.~~gaming mice, steering wheels, headsets, keyboards, console gaming headsets, simulation controllers, studio-quality Blue Microphones and Streamlabs services.

Sales of Gaming decreased 12% in each of the three and six months ended September 30, 2023, compared to the three and six months ended September 30, 2022, primarily driven by the decrease in sales of gaming steering wheels, gaming keyboards, gaming mice and Blue Microphones.

~~Creativity~~Keyboards & ~~Productivity Market:~~Combos

Our Keyboards & Combos category includes PC keyboards and keyboard/mice combo products.

Sales of Keyboards & Combos decreased 3% for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily driven by the decrease in sales of our cordless keyboards, partially offset by an increase in sales of cordless keyboard/mice combo products. Sales of Keyboards & Combos decreased 12% for the six months ended September 30, 2023, compared to the six months ended September 30, 2022, primarily driven by the decrease in sales of cordless keyboards.

Pointing Devices

Our Pointing Devices category ~~comprises~~includes PC- and Mac-related mice including trackballs, touchpads, and presentation tools.

Sales of Pointing Devices ~~decreased~~ ~~14%~~ ~~and~~ 6% ~~for the three and nine months ended December 31, 2022, respectively, compared to the same periods of the prior fiscal year, primarily driven by the decrease in sales of cordless mice.~~

~~Keyboards & Combos~~

~~Our Keyboards & Combos category comprises PC keyboards, keyboard/mice combo products, and living room keyboards.~~

~~Sales of Keyboards & Combos decreased 22%~~increased 3% for the three months ended ~~December 31, 2022,~~September 30, 2023, compared to the ~~same period of the prior fiscal year,~~three months ended September 30, 2022, primarily driven by the ~~decrease~~increase in sales of ~~our~~ cordless ~~combos, and cordless and corded PC keyboards, particularly in our low end products.~~mice. Sales of ~~Keyboards & Combos decreased 12%~~Pointing Devices for the ~~nine~~six months ended ~~December 31,~~September 30, 2023 declined 1%, compared with sales for the six months ended September 30, 2022, ~~compared~~mainly due to a decrease in the ~~same period~~sales of ~~the prior fiscal year, primarily driven~~cordless mice, partially offset by ~~the decrease~~an increase in sales of ~~our cordless combos and corded PC keyboards, particularly in our low end products.~~

~~PC Webcams~~

~~Our PC Webcams category comprises PC-based webcams targeted primarily at consumers, including streaming cameras.~~

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~~Sales of PC Webcams decreased 49%~~ ~~and 44% for the three and nine months ended December 31, 2022, respectively, compared to the same periods of the prior fiscal year, primarily driven by the~~ ~~decrease~~ ~~in sales of our HD Pro Webcam C920, 1080p Pro Stream Webcam, and Webcam C260.~~presentation tools.

~~Tablet & Other Accessories~~

~~Our Tablet & Other Accessories category primarily comprises keyboards for tablets.~~

~~Sales of Tablet & Other Accessories products decreased~~ 21% and 23% for the three and nine months ended December 31, 2022, respectively, compared to the same periods of the prior fiscal year, primarily driven by the decrease in sales of most of our products. The decrease in sales for the nine-month period was partially offset ~~by increases in sales of our Rugged Combo 3 Touch and Combo Touch for iPad Air.~~

~~Gaming market:~~

~~Gaming~~

~~Our Gaming category comprises gaming mice, keyboards, headsets, gamepads, steering wheels, simulation controllers, console gaming headsets, console gaming controllers, and Streamlabs services.~~

Sales of Gaming decreased 16% and 14% for the three and nine months ended December 31, 2022, respectively, compared to the same periods of the prior fiscal year, primarily driven by the decrease in sales of most of the gaming sub-categories.

~~Video Collaboration market:~~

Video Collaboration

Our Video Collaboration category includes Logitech’s conference room cameras, which combine affordable enterprise-quality audio and high definition 4K video to bring video conferencing to ~~businesses~~a variety of ~~any size, as well as~~room sizes.

Sales of Video Collaboration decreased 15% and 19% for the three and six months ended September 30, 2023, compared to the three and six months endedSeptember 30, 2022, respectively, due to a decrease in sales of most of our Video Collaboration products driven by lower enterprise spending.

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Webcams

Our Webcams category includes PC-based webcams that are targeted primarily at consumers, including streaming cameras, and ~~headsets~~VC webcams that turn any desktop into an instant collaboration space.

Sales of ~~Video Collaboration products~~Webcams decreased ~~21%~~14% for the three months ended ~~December 31, 2022,~~September 30, 2023, compared to the ~~same period of the prior fiscal year,~~three months ended September 30, 2022, primarily driven by a decrease in sales of webcams and conference room cameras due primarily to a slowdown in enterprise spending. Sales of Video Collaboration products decreased 6% for the nine months ended December 31, 2022, compared to the same period of the prior fiscal year, primarily due to the decrease in sales of our PC-based webcams, ~~partially offset~~such as 1080p Pro Stream Webcam and Brio 500, as well as our VC webcams, such as Webcam C930e. Sales of Webcams decreased 23% for the six months ended September 30, 2023, compared to the six months ended September 30, 2022, primarily driven by anthe decrease in sales of our VC webcams, such as Webcam C930e and Webcam C925E, as well as our PC-based webcams, such as 1080p Pro Stream Webcam.

Tablet Accessories

Our Tablet Accessories category primarily includes tablet keyboards and styluses.

Sales of Tablet Accessories increased 17% and 11% for the three and six months ended September 30, 2023, compared to the three and six months ended September 30, 2022, respectively, primarily driven by the increase in sales of ~~conference room cameras, docks~~our Rugged Combo 3 Touch as well as Combo Touch and ~~headsets.~~Rugged Combo 4 Touch, introduced in the third quarter of fiscal year 2023. For the six months ended September 30, 2023, compared to the six months ended September 30, 2022, the increase in sales of these products was partially offset by the decrease in sales of Rugged Folio.

~~Music market:~~Headsets

~~Mobile Speakers~~

Our ~~Mobile Speakers~~Headsets category ~~is made up entirely of Bluetooth~~includes PC and VC headsets, in-ear headphones, and premium wireless ~~speakers.~~earbuds.

Sales of ~~Mobile Speakers decreased~~Headsets ~~32%~~for ~~and~~the ~~20%~~three months ended September 30, 2023 remained consistent with sales for the three ~~and nine~~months ended September 30, 2022. Sales of Headsets decreased 10% for the six months ended ~~December 31, 2022, respectively,~~September 30, 2023, compared to the ~~same periods of~~six months ended September 30, 2022, primarily driven by the ~~prior fiscal year, primarily due to a~~ decrease in sales of ~~most of our Mobile Speaker sub-categories, partially offset by the sales of our Ultimate Ears Wonderboom 3 mini speakers, introduced~~ ~~in the second quarter of fiscal year 2023.~~VC headsets and corded PC headsets.

~~Audio & Wearables~~

~~Our Audio & Wearables category comprises PC speakers, PC headsets, in-ear headphones, premium wireless audio wearables and studio-quality Blue Microphones for professionals and consumers.~~Other

Our Other category primarily consists of mobile speakers and PC speakers.

Sales ~~of Audio & Wearables~~in Other category decreased ~~34% for~~ 35% in each of ~~the~~ the three and ~~nine~~six months ended ~~December 31, 2022,~~ September 30, 2023, compared to the ~~same periods of the prior fiscal year,~~three and six months endedSeptember 30, 2022, primarily ~~due to~~driven by a ~~decrease~~decline in sales of ~~almost all sub-categories.~~mobile speakers.

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Gross Profit

Gross profit for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ was as follows ~~(Dollars~~(dollars in thousands):


		Three Months Ended December 31,								Nine Months Ended December 31,									Three months ended September 30,								Six months ended September 30,
		2022			2021			Change		2022			2021			Change			2023			2022			Change		2023			2022			Change
Net sales	Net sales	$	1,269,925		$	1,632,782		(22)	%	$	3,578,741		$	4,251,107		(16)	%	Net sales	$	1,057,008		$	1,148,951		(8)	%	$	2,031,507		$	2,308,816		(12)	%

Gross profit	Gross profit	$	477,268		$	658,010		(27)	%	$	1,375,651		$	1,769,099		(22)	%	Gross profit	$	438,622		$	438,780		—	%	$	814,264		$	898,383		(9)	%
Gross margin	Gross margin	37.6		%	40.3		%			38.4		%	41.6		%			Gross margin	41.5		%	38.2		%			40.1		%	38.9		%

Gross profit consists of sales, less cost of goods sold (which includes materials, direct labor and related overhead costs, costs of manufacturing facilities, royalties, costs of purchasing components from outside suppliers, distribution costs, warranty costs, customer support costs, shipping and handling costs, outside processing costs and write-down of inventories), and amortization of intangible assets.

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Gross margin was 41.5% and 40.1% for the three and six months ended September 30, 2023, respectively, and increased by 330 and 120 basis points, compared to the three and six months ended September 30, 2022, respectively. The increase in gross margin for the three ~~and nine~~ months ended ~~December 31, 2022 decreased by 270 basis points and 320 basis points, respectively,~~September 30, 2023, compared to the ~~same periods of the prior fiscal year. The gross margin decline for the three-month period~~three months ended September 30, 2022, was primarily driven by ~~unfavorable impacts from changes in currency exchange rates, higher promotional spending,~~cost improvement and ~~inflationary pressure~~less reliance on ~~costs,~~expedited shipping, as well as lower promotions, partially offset by ~~a reduction~~unfavorable product mix. The increase in ~~our use of expedited shipping. The~~ gross margin ~~decline~~ for the ~~nine-month period~~six months ended September 30, 2023, compared to the six months ended September 30, 2022, was ~~mainly due to unfavorable currency impacts~~primarily driven by cost improvement and ~~inflationary pressure~~less reliance on ~~costs,~~expedited shipping, partially offset by ~~a reduction in our use of expedited shipping.~~unfavorable product mix.

Operating Expenses

Operating expenses for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows ~~(Dollars~~(dollars in thousands):


		Three Months Ended December 31,						Nine Months Ended December 31,							Three months ended September 30,						Six months ended September 30,
		2022			2021			2022			2021				2023			2022			2023			2022
Marketing and selling	Marketing and selling	$	196,653		$	269,941		$	628,122		$	778,882		Marketing and selling	$	176,356		$	202,091		$	355,541		$	431,469
% of sales	% of sales	15.5		%	16.5		%	17.6		%	18.3		%	% of sales	16.7		%	17.6		%	17.5		%	18.7		%
Research and development	Research and development	65,640			75,529			210,166			213,436			Research and development	68,559			69,009			139,118			144,526
% of sales	% of sales	5.2		%	4.6		%	5.9		%	5.0		%	% of sales	6.5		%	6.0		%	6.8		%	6.3		%
General and administrative	General and administrative	29,766			38,478			92,215			112,291			General and administrative	35,538			26,589			76,835			62,449
% of sales	% of sales	2.3		%	2.4		%	2.6		%	2.6		%	% of sales	3.4		%	2.3		%	3.8		%	2.7		%
Amortization of intangible assets and acquisition-related costs	Amortization of intangible assets and acquisition-related costs	2,810			3,662			9,052			13,986			Amortization of intangible assets and acquisition-related costs	3,318			2,873			6,003			6,242
% of sales	% of sales	0.2		%	0.2		%	0.3		%	0.3		%	% of sales	0.3		%	0.3		%	0.3		%	0.3		%
Impairment of intangible assets		—			7,000			—			7,000
% of sales		N/A			0.4		%	N/A			0.2		%
Change in fair value of contingent consideration for business acquisition		—			(1,110)			—			(3,509)
% of sales		N/A			(0.1)		%	N/A			(0.1)		%
Restructuring charges, net		5,654			1,759			16,471			1,770

Restructuring charges (credits), net														Restructuring charges (credits), net	(1,788)			10,817			1,723			10,817
% of sales	% of sales	0.4		%	0.1		%	0.5		%	—		%	% of sales	(0.2)		%	0.9		%	0.1		%	0.5		%
Total operating expenses	Total operating expenses	$	300,523		$	395,259		$	956,026		$	1,123,856		Total operating expenses	$	281,983		$	311,379		$	579,220		$	655,503
% of sales	% of sales	23.7		%	24.2		%	26.7		%	26.4		%	% of sales	26.7		%	27.1		%	28.5		%	28.4		%

The decrease in total operating expenses during the three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, compared to the ~~same periods of the prior fiscal year,~~three and six months ended September 30, 2022, was mainly due to decreases in marketing and selling expenses, partially offset by increases to general and administrative expenses.

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Marketing and Selling

Marketing and selling expenses consist of personnel and related overhead costs, corporate and product marketing, promotions, advertising, trade shows, technical support for customer experiences and facilities costs.

During the three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, marketing and selling expenses decreased ~~$73.3~~$25.7 million and ~~$150.8~~$75.9 million, respectively, compared to the ~~same periods of the prior fiscal year,~~three and six months ended September 30, 2022, primarily driven by ~~lower~~our reduction in third-party marketing and advertising ~~spend.~~spend as well as decreases in personnel-related costs as a result of headcount reduction.

Research and Development

Research and development expenses consist of personnel and related overhead costs for contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products.

During the three months ended ~~December 31, 2022,~~September 30, 2023, research and development expenses remained relatively consistent, compared to the three months ended September 30, 2022. During the six months ended September 30, 2023, research and development expenses decreased ~~$9.9~~$5.4 million, compared to the ~~same period of the prior fiscal year,~~six months ended September 30, 2022, primarily driven by lower ~~personnel-related costs. During the nine months ended December 31, 2022, research~~outsourcing expenses.

Research and development expenses ~~decreased $3.3 million, primarily driven by lower personnel-related costs, partially offset by higher outsourcing expenses~~as a percentage of sales increased from 6.0% and ~~travel~~6.3% in the three and ~~entertainment expenses.~~six months ended September 30, 2022, respectively, to 6.5% and 6.8% in the three and six months ended September 30, 2023, respectively, reflecting our continued investment in innovation.

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General and Administrative

General and administrative expenses primarily consist ~~primarily~~ of personnel and related overhead, information technology, and facilities costs for the infrastructure functions such as finance, information systems, executives, human resources and legal.

During the three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, general and administrative expenses ~~decreased $8.7~~increased $8.9 million and ~~$20.1~~$14.4 million, respectively, compared to the ~~same periods of the prior fiscal year,~~three and six months ended September 30, 2022, primarily driven by ~~lower~~higher personnel-related ~~costs.~~costs, mainly due to higher accruals for performance-based compensation.

Amortization of Intangible Assets and Acquisition-Related Costs

Amortization of intangible assets consists of amortization of acquired intangible assets, including customer relationships and trademarks and trade names. Acquisition-related costs include legal expenses, due diligence costs, and other professional costs incurred for business acquisitions.

During the three and six months ended ~~December 31, 2022,~~September 30, 2023, amortization of intangible assets and acquisition-related costs remained relatively flat, compared to the ~~same period of the prior fiscal year. During the nine~~three and six months ended December 31, 2022, amortization of intangible assets and acquisition-related costs decreased $4.9 million, compared to the same period of the prior fiscal year, primarily due to certain acquired intangible assets becoming fully amortized and the write-off of Jaybird intangible assets in the third quarter of fiscal yearSeptember 30, 2022.

~~Impairment of Intangible Assets~~

During the three and nine months ended December 31, 2021, we recognized a pre-tax impairment charge of $7.0 million, related to the intangibles acquired as part of the Jaybird acquisition due to our decision to discontinue Jaybird-branded products.

Restructuring Charges (Credits), Net

The restructuring charges ~~of $5.7 million and $16.5 million~~(credits), net for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022, ~~respectively,~~ were ~~recorded~~related to costs incurred as a result of our restructuring plan ~~that was~~ initiated during ~~the second quarter of~~ fiscal year ~~2023 to realign our business group and engineering structure with our go-to-market strategy to more effectively compete within the enterprise market and to better serve end-users.~~2023. We expect to substantially complete this restructuring plan within ~~the next nine months.~~

The restructuring charges of $1.8 million for each of the three and nine months ended December 31, 2021, were recorded as a result of our decision to exit Jaybird-branded products during the third quarter of fiscal year ~~2022. This restructuring plan has been substantially completed.~~2024.

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See Note 13 to our condensed consolidated financial statements for additional information.

Interest Income

Interest income for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ was as follows (in thousands):

Three Months Ended
December 31, Nine Months Ended
December 31,
2022 2021 2022 2021
Interest income $ 4,665 $ 278 $ 9,573 $ 795


	Three months ended September 30,				Six months ended September 30,
	2023		2022		2023		2022
Interest Income	$	11,856	$	3,459	$	21,682	$	4,908

We invest in highly liquid instruments with an original maturity of three months or less at the date of purchase, which are classified as cash equivalents. During the three and ~~nine~~six months ended ~~December 31, 2022~~September 30, 2023, interest income increased ~~$4.4~~$8.4 million and ~~$8.8~~$16.8 million, respectively, compared to the ~~same periods of the prior fiscal year,~~three and six months ended September 30, 2022, primarily driven by the increase in interest rates.

Other Income (Expense), Net

Other income (expense), net for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ was as follows ~~(Dollars in~~(in thousands):

Three Months Ended
December 31, Nine Months Ended
December 31,
2022 2021 2022 2021
Investment income (expense) related to the deferred compensation plan $ 758 $ 890 $ (3,390) $ 1,985
Currency exchange gain (loss), net 1,734 (4,562) (3,278) (3,824)
Loss on investments, net (1,488) (460) (13,065) (1,421)
Other 402 459 1,366 1,319
Total $ 1,406 $ (3,673) $ (18,367) $ (1,941)


	Three months ended September 30,				Six months ended September 30,
	2023		2022		2023		2022
Investment gain (loss) related to the deferred compensation plan	$	(324)	$	(762)	$	700	$	(4,148)
Currency exchange loss, net	(1,712)		(2,052)		(4,798)		(5,012)
Gain (loss) on investments, net	214		(22,934)		(11,609)		(11,577)
Non-service cost net pension income and other	778		351		1,691		964
Total	$	(1,044)	$	(25,397)	$	(14,016)	$	(19,773)

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Investment ~~income~~gain (loss) related to the deferred compensation plan represents earnings, gains, and losses on marketable securities related to a deferred compensation plan offered by one of our subsidiaries. The ~~decrease in~~ investment ~~income~~gain or loss for three and ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, compared to the ~~same periods of the prior fiscal year,~~three and six months ended September 30, 2022, primarily relates to the change in market performance of the underlying securities.

Currency exchange ~~gain (loss),~~loss, net, relates to balances denominated in currencies other than the functional currency in our subsidiaries, as well as to the sale of currencies, and gains or losses recognized on currency exchange forward contracts. We do not speculate in currency positions, but we are alert to opportunities to maximize currency exchange gains and minimize currency exchange losses. The ~~gain~~loss for the three months ended ~~December 31,~~September 30, 2023 was primarily due to the weakening of the Swiss Franc against the U.S. Dollar. The loss for the three months ended September 30, 2022 was primarily due to the ~~strengthening~~weakening of the Australian Dollar and the Brazilian Real against the U.S. Dollar offset by gains in the Swiss Franc. The loss for the six months ended September 30, 2023 was primarily due to weakening of the Japanese Yen against the U.S. Dollar. The loss for the ~~nine~~six months ended ~~December 31,~~September 30, 2022 was primarily due to the weakening of the Brazilian Real, Australian Dollar, and ~~Australian Dollar. The loss for~~ the ~~three months ended December 31, 2021 was primarily due to~~Japanese Yen, offset by the gain from the weakening ~~of the Brazilian Real against the U.S. Dollar. The loss for the nine months ended December 31, 2021 was primarily related to the strengthening~~ of the Chinese Renminbi against the U.S. Dollar.

~~Loss~~Gain (loss) on investments, net, includes unrealized gain (loss) from the fair value change of investment, gain (loss) on equity-method investments and impairment of investments during the periods presented, as applicable. The loss on investments, net for the six months ended September 30, 2023 was primarily due to an impairment loss, as a result of the write-off of a note receivable which has been deemed no longer recoverable. This note receivable was previously obtained in conjunction with an exchange transaction related to our investment in a privately held company. The loss for the ~~nine~~three and six months ended ~~December 31,~~September 30, 2022 was primarily due to ~~the~~ impairment ~~charge~~charges related to one of our equity method ~~investments,~~investments. The loss for the six months ended September 30, 2022 was partially offset by ~~the~~an unrealized gain related to one of our equity method investments without readily determinable fair value resulting from observable price changes. See Note 6 to our condensed consolidated financial statements for additional information.

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Provision for Income Taxes

The provision for income taxes and effective income tax rates for the three and ~~nine~~six months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021~~ were as follows ~~(Dollars~~(dollars in thousands):


		Three Months Ended December 31,						Nine Months Ended December 31,							Three months ended September 30,						Six months ended September 30,
		2022			2021			2022			2021				2023			2022			2023			2022
Provision for income taxes	Provision for income taxes	$	42,663		$	49,345		$	87,751		$	107,789		Provision for income taxes	$	30,334		$	23,372		$	42,866		$	45,088
Effective income tax rate	Effective income tax rate	23.3		%	19.0		%	21.4		%	16.7		%	Effective income tax rate	18.1		%	22.2		%	17.7		%	19.8		%

The change in the effective income tax rate for the three and ~~nine~~six months ended ~~December 31, 2022~~ September 30, 2023 was primarily due to the mix of income and losses in the various tax jurisdictions in which we ~~operate. There were discrete~~operate and the tax ~~benefits of $0.2 million and $1.4 million~~impact from ~~the recognition of excess tax benefits, respectively, in the United States in~~share-based compensation, compared with the three and ~~nine~~six months ended ~~December 31,~~September 30, 2022. In addition, there were discrete tax benefits of $1.7 million and $3.2 million from the reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three and nine month period ended December 31, 2022. The change in the effective income tax rate for the three and nine months ended December 31, 2021 was primarily due to the mix of income and losses in the various tax jurisdictions in which we operate. There were discrete tax benefits of $0.8 million and $15.2 million from the recognition of excess tax benefits in the United States in the three and nine months ended December 31, 2021, respectively. Furthermore, there were discrete tax benefits of $1.3 million and $2.8 million from the reversal of uncertain tax positions from the expiration of statutes of limitations, respectively, in the three and nine month period ended December, 2021.

~~As of December 31, 2022 and March 31, 2022, the total amount of unrecognized tax benefits due to uncertain tax positions was $184.0 million and $176.0 million,~~ ~~respectively, all of which would affect the effective income tax rate if recognized.~~

Liquidity and Capital Resources

Cash Balances, Available Borrowings, and Capital Resources

As of ~~December 31, 2022,~~September 30, 2023, we had cash and cash equivalents of ~~$1,036.1~~$1,163.9 million, compared with ~~$1,328.7~~$1,149.0 million as of March 31, ~~2022.~~2023. Our cash and cash equivalents consist of bank demand deposits and short-term time deposits, of which ~~59%~~65% is held in Switzerland and ~~19%~~12% were held in China (including Hong Kong). We do not expect to incur any material adverse tax impact except for what has already been recognized, or to be significantly inhibited by any country in which we do business, from the repatriation of funds to Switzerland, our ~~home~~country of domicile.

As of ~~December 31, 2022,~~September 30, 2023, our working capital was ~~$1,564.3~~$1,405.3 million, compared to ~~$1,651.8~~$1,555.1 million as of March 31, ~~2022.~~2023. The decrease was ~~primarily~~ driven by ~~lower cash balances, resulting from share repurchases~~a reduction in inventories and ~~payments of cash dividends, and lower inventories,~~an increase in accounts payable, partially offset by ~~decreases~~a decline in ~~accounts payable~~accrued and ~~accrued~~other current liabilities and an increase in accounts ~~receivable, net.~~ receivable.

We had several uncommitted, unsecured bank lines of credit and letters of credit aggregating ~~$179.2~~$171.5 million as of ~~December 31, 2022.~~September 30, 2023. There are no financial covenants under these lines of credit with which we must comply. ~~As of December 31, 2022, we had outstanding bank guarantees of $11.6 million under these lines of credit.~~

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There was no borrowing outstanding under the lines of credit as of September 30, 2023. As of September 30, 2023, we had outstanding bank guarantees of $12.2 million under these lines of credit.

The following tables present selected financial information and statistics as of and for the three months ended ~~December 31,~~September 30, 2023 and 2022 ~~and 2021 (Dollars~~(dollars in thousands):


		As of December 31,					As of September 30,
		2022		2021			2023		2022
Accounts receivable, net	Accounts receivable, net	$	802,435	$	845,836	Accounts receivable, net	$	656,895	$	772,731
Accounts payable	Accounts payable	$	491,488	$	738,992	Accounts payable	$	492,905	$	546,563
Inventories	Inventories	$	797,695	$	834,534	Inventories	$	532,943	$	879,979


		Three Months Ended December 31,			Three months ended September 30,
		2022	2021		2023	2022
Days sales in accounts receivable (“DSO”) (Days)(1)	Days sales in accounts receivable (“DSO”) (Days)(1)	57	47	Days sales in accounts receivable (“DSO”) (Days)(1)	56	61
Days accounts payable outstanding (“DPO”) (Days)(2)	Days accounts payable outstanding (“DPO”) (Days)(2)	56	68	Days accounts payable outstanding (“DPO”) (Days)(2)	72	69
Inventory turnover (“ITO”) (x)(3)	Inventory turnover (“ITO”) (x)(3)	4.0	4.7	Inventory turnover (“ITO”) (x)(3)	4.6	3.2

(1) DSO is determined using ending accounts receivable, net as of the most recent quarter-end and sales for the most recent quarter.

(2) DPO is determined using ending accounts payable as of the most recent quarter-end and cost of goods sold for the most recent quarter.

(3) ITO is determined using ending inventories and annualized cost of goods sold (based on the most recent quarterly cost of goods sold).

DSO for the three months ended ~~December 31, 2022 increased~~September 30, 2023 decreased by 105 days to 5756 days, compared to 4761 days for the ~~same period of the prior fiscal year,~~three months ended September 30, 2022, primarily due to ~~a comparatively higher percentage~~the timing of sales inwithin the ~~last month of the current~~ quarter.

DPO for the three months ended ~~December 31, 2022 decreased~~September 30, 2023 increased by 123 days to 72 days, compared to 6869 days for the ~~same period of the prior fiscal year,~~three months ended September 30, 2022, primarily due to softened demand, offset by lower inventory purchases ~~than prior year resulting from softened demand~~ and ~~lower~~ marketing spend.

ITO for the three months ended ~~December 31, 2022 decreased~~September 30, 2023 increased by ~~0.7,~~1.4, compared to ~~4.7~~3.2 for the ~~same period of the prior fiscal year,~~three months ended September 30, 2022, primarily due to lower inventory as of September 30, 2023 resulting from focused inventory management to align with softened demand.

If we are not successful in launching and phasing in our new products, or market competition increases, or we are not able to sell the new products at the prices planned, it could have a material impact on our sales, gross profit margin, operating results including operating cash flow, and inventory turnover in the future.

The following table summarizes our condensed consolidated statements of cash flows ~~(Dollars in~~(in thousands):


		Nine Months Ended December 31,					Six months ended September 30,
		2022		2021			2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	317,167	$	198,728	Net cash provided by operating activities	$	463,059	$	37,256
Net cash used in investing activities	Net cash used in investing activities	(80,711)		(89,006)		Net cash used in investing activities	(49,151)		(53,561)
Net cash used in financing activities	Net cash used in financing activities	(505,035)		(492,799)		Net cash used in financing activities	(388,269)		(416,087)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(24,006)		(2,839)		Effect of exchange rate changes on cash and cash equivalents	(10,758)		(27,823)
Net decrease in cash and cash equivalents		$	(292,585)	$	(385,916)
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	$	14,881	$	(460,215)

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For the ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, net cash provided by operating activities was ~~$317.2~~$463.1 million resulting from net income of ~~$323.1~~$199.8 million, a favorable impact from adding back non-cash expenses totaling ~~$165.3~~$112.1 million, and ~~an unfavorable~~a favorable net change in operating assets and liabilities of ~~$171.2~~$151.2 million. Non-cash expenses were primarily related to ~~depreciation and amortization,~~ share-based compensation expenses, and ~~deferred income taxes.~~depreciation and amortization. The increase in accounts receivable, net was primarily driven by ~~timing of sales within the quarter.~~higher sales. The decrease in inventories was primarily driven by ~~lower~~our effort to manage inventory ~~purchases.~~level. The ~~decrease~~increase in accounts payable was ~~primarily driven by lower~~due to timing of inventory purchases ~~and marketing spend.~~in preparation for the holiday season. The decrease in accrued and other liabilities was primarily driven by ~~payment of the fiscal year 2022 annual bonus.~~reduction in accrued liabilities related to our customer marketing, pricing and incentive programs and sales return liability in line with reduction in channel inventory.

For the ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, net cash used in investing activities was ~~$80.7~~$49.2 million, primarily ~~due to $69.1~~resulting from $34.7 million of purchases of property, plant, and equipment and ~~$8.5~~$14.1 million payments for acquisitions, net of cash acquired.

For the ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, net cash used in financing activities was ~~$505.0~~$388.3 million, primarily resulting from payment for repurchases of our registered shares of ~~$327.7~~$188.9 million and payment of cash dividends of ~~$158.7 million, and tax withholdings related to net share settlements of restricted stock units of $28.7~~$182.3 million.

For the ~~nine~~six months ended ~~December 31, 2022,~~September 30, 2023, there was a ~~$24.0~~$10.8 million loss from currency exchange rate effect on cash and cash equivalents, primarily due to exchange rate fluctuations of ~~Euro,~~ Swiss Franc, Euro, and Chinese Renminbi ~~and Australian Dollar~~ versus the U.S. Dollar, and timing of our cash transactions over the period. The loss from ~~the~~currency translation exchange rate effect ~~of currency rate changes was immaterial~~ during the ~~nine~~six months ended ~~December 31, 2021.~~September 30, 2022 was primarily due to the weakening of the Euro, Chinese Renminbi, Swiss Franc, Australian Dollar, New Taiwan Dollar and the Japanese Yen versus the U.S. Dollar.

Cash Outlook

Our principal sources of liquidity are our cash and cash equivalents, cash flow generated from operations, and, to a much lesser extent, capital markets and borrowings. Our future working capital requirements and capital expenditures may increase to support investments in product innovations and growth opportunities or to acquire or invest in complementary businesses, products, services, and technologies. Market volatility driven by the current macroeconomic and geopolitical environment ~~and COVID-19 related factors~~ may increase our costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity.

In fiscal year 2024, we paid a cash dividend of CHF 169.1 million (U.S. Dollar amount of $182.3 million based on the exchange rate on the date of payment) out of fiscal year 2023 retained earnings. In fiscal year 2023, we paid a cash dividend of CHF 156.1 million (U.S. Dollar amount of $158.7 million based on the exchange rate on the date of payment) out of fiscal year 2022 retained earnings. In fiscal year 2022, we paid a cash dividend of CHF 147.0 million (U.S. Dollar amount of $159.4 million) out of fiscal year 2021 retained earnings.

In May 2020, our Board of Directors approved athe 2020 share repurchase program, which authorized us to invest up to $250.0 million to purchase our own shares ~~following the expiration date of the 2017 share repurchase program.~~to support equity incentive plans or potential acquisitions. In April 2021, our Board of Directors approved an increase of $750.0 million ofto the 2020 share repurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021. In July 2022, our Board of Directors approved an increase of $500 million to the 2020 share repurchase program to an aggregate amount of up to $1.5 billion. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. The 2020 share repurchase program expired on July 27, 2023. We repurchased 16.7 million shares for an aggregate cost of $1.2 billion under the 2020 share repurchase program, of which 2.6 million shares for an aggregate cost of $159.1 million were repurchased during the six months ended September 30, 2023.

In June 2023, our Board of Directors approved a new, three-year share repurchase program, which allows us to use up to $1.0 billion to repurchase our shares. The 2023 share repurchase program enables us to repurchase shares for cancellation, as well as to support equity incentive plans or potential acquisitions. The Swiss Takeover Board approved the 2023 share repurchase program in July 2023 and the program became effective on July 28, 2023. During the six months ended September 30, 2023, we repurchased 0.9 million shares for an aggregate cost of $60.1 million under the 2023 share repurchase program for the purpose of cancellation, of which $30.2 million of the aggregate cost was not paid yet as of September 30, 2023. As of ~~December 31, 2022, $596.3 million~~September 30, 2023, $940.0 million was available for repurchase under the ~~2020~~2023 share repurchase program.

Swiss law limits a company’s ability to hold or repurchase its own shares. The aggregate par value of all shares held in treasury by us and our subsidiaries may not exceed 10% of our share capital, which corresponds to

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approximately 17.3 million registered shares. This limitation does not apply to shares repurchased for cancellation, due to the Board of Directors' authority under the capital band set forth in the Company's Articles of Incorporation to cancel shares up to a limit of 10% of our current share capital. As of September 30, 2023, we had a total of 16.0 million shares held in treasury stock, which includes 0.9 million shares that have been repurchased for cancellation.

Although we enter into trading plans for systematic repurchases (e.g., 10b5-1 trading plans) from time to time, our 2023 share repurchase program provides us with the opportunity to make opportunistic repurchases during periods of favorable market conditions and is expected to remain in effect for a period of three years through July 27, ~~2023. Shares may be~~2026. To the extent that the shares are repurchased ~~from time~~ to ~~time~~support equity incentive plans or potential acquisitions, the share are repurchased on the ~~open market, through block trades~~ ordinary trading line of Swiss Exchange ("SIX") and/or ~~otherwise.~~the Nasdaq Global Select Market ("Nasdaq"). Shares repurchased for cancellation purposes are repurchased via a second trading line on SIX. Opportunistic purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.

If we do not generate sufficient operating cash flows to support our operations and future planned cash requirements, our operations could be harmed and our access to credit facilities could be restricted or eliminated. However, we believe that the trend of our historical cash flow generation, our projections of future operations and our available cash balances will provide sufficient liquidity to fund our operations for at least the next 12 months.

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Operating Leases Obligations

We lease facilities under operating leases, certain of which require us to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at our option and usually include escalation clauses linked to inflation. ~~During the nine months ended~~ ~~December 31, 2022, our operating lease obligations~~ ~~increased approximately $45.0 million, primarily related to newly commenced operating leases for office spaces in the Americas and EMEA regions.~~ There have been no ~~other~~ material changes to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the year ended March 31, ~~2022.~~2023. The remaining terms of our non-cancelable operating leases expire in various years through 2033.

Purchase Commitments

As of ~~December 31, 2022,~~September 30, 2023, we had non-cancelable purchase commitments of ~~$421.1~~$391.5 million for inventory purchases made in the normal course of business from original design manufacturers, contract manufacturers and other suppliers, the majority of which are expected to be fulfilled within the next 12 months. We ~~recorded~~record a liability for firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with our valuation of excess and obsolete inventory. As of ~~December 31, 2022,~~September 30, 2023, the liability for these purchase commitments was ~~$43.2~~$33.2 million and is recorded in accrued and other current liabilities in the condensed consolidated balance sheet.

We have firm purchase commitments of ~~$29.7~~$10.7 million for capital expenditures primarily related to commitments for tooling and equipment for new and existing products. We ~~expe~~ctexpect to continue making capital expenditures in the future to support product development activities and ongoing and expanded operations. Although open purchase commitments are considered enforceable and legally binding, the terms generally allow us to reschedule or adjust our requirements based on business needs prior to delivery of goods or performance of services.

Other Contractual Obligations and Commitments

For further detail about our contractual obligations and commitments, refer to our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022.~~2023.

Indemnifications

We indemnify certain suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances includes indemnification for damages and expenses, including reasonable attorneys’ fees. As of ~~December 31, 2022,~~September 30, 2023, no material amounts have been accrued for indemnification provisions. We do not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under our indemnification arrangements.

We also indemnify our current and former directors and certain current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. We are unable to reasonably estimate the maximum amount that could be payable under these arrangements because these

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exposures are not capped, the obligations are conditional in nature, and the facts and circumstances involved in any situation that might arise are variable.

Legal Proceedings

From time to time we are involved in claims and legal proceedings that arise in the ordinary course of our business. For more information about Legal Proceedings, see Part II Item 1 Legal Proceedings of this quarterly report on Form 10-Q for the period ended ~~December 31, 2022.~~

September 30, 2023.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. As a company with global operations, we face exposure to adverse movements in currency exchange rates and interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on our financial results.

Currency Exchange Rates

We report our results in U.S. Dollars. Changes in currency exchange rates compared to the U.S. Dollar can have a material impact on our results when the financial statements of our non-U.S. subsidiaries are translated into U.S. Dollars. The functional currency of our operations is primarily the U.S. Dollar. Certain operations use the Swiss Franc or the local currency of the country as their functional currencies. Accordingly, unrealized currency gains or losses resulting from the translation of net assets or liabilities denominated in other currencies to the U.S. Dollar are accumulated in the cumulative translation adjustment component of accumulated other comprehensive income (loss) ("AOCI") in shareholders' equity.

We are exposed to currency exchange rate risk as we transact business in multiple currencies, including exposure related to anticipated sales, anticipated purchases and assets and liabilities denominated in currencies other than the U.S. Dollar. We transact business in ~~over~~approximately 30 currencies worldwide, of which the most significant to operations are the Euro, Chinese Renminbi, Australian Dollar, Canadian Dollar, Japanese Yen, Pound Sterling and New Taiwan Dollar. For the three months ended ~~December 31, 2022,~~September 30, 2023, approximately ~~52%~~50% of our sales were in non-U.S. denominated currencies, with ~~28%~~23% of our sales denominated in Euro. The mix of our costs of goods sold and operating expenses by currency are significantly different from the mix of our sales, with a larger portion denominated in U.S. Dollar and less denominated in Euro and other currencies. A strengthening U.S. Dollar has a more unfavorable impact on our sales compared to the favorable impact on our cost of goods sold and operating expenses, resulting in an adverse impact on our operating results.

We enter into currency forward and swap contracts to reduce the short-term effects of currency fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of our subsidiaries. These contracts generally mature within approximately one month. The gains or losses on these contracts are recognized in earnings based on the changes in fair value.

If an adverse 10% foreign currency exchange rate change had been applied to total monetary assets and liabilities denominated in currencies other than the functional currencies at the balance sheet dates, it would have resulted in an adverse effect on income before income taxes of approximately ~~$17.6~~$10.9 million and ~~$24.4~~$17.0 million as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022,~~2023, respectively. The adverse effect as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022~~2023 is after consideration of the offsetting effect of approximately ~~$14.8~~$9.4 million and ~~$15.9~~$8.1 million, respectively, from foreign exchange contracts in place as of such dates.

We enter into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases. These hedging contracts mature within approximately four months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of AOCI until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold.

If the U.S. dollar had weakened by 10%, the amount recorded in AOCI related to our foreign exchange contracts before tax effect as of ~~December 31, 2022~~September 30, 2023 and March 31, ~~2022~~2023 would have been approximately ~~$11.2~~$11.9 million and ~~$12.5~~$7.3 million lower, respectively. The change in the fair value recorded in AOCI would be expected to

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offset a corresponding foreign currency change in cost of goods sold when the hedged inventory purchases are sold.

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Logitech's management, with the participation of the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, the CEO and the CFO have concluded that, as of such date, our disclosure controls and procedures are effective at the reasonable assurance level.

Definition of Disclosure Controls

Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in the Company’s reports filed under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure Controls are also designed to reasonably assure that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. The Company’s Disclosure Controls include components of its internal control over financial reporting, which consists of control processes designed to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles in the United States. To the extent that components of the Company’s internal control over financial reporting are included within its Disclosure Controls, they are included in the scope of the Company’s annual controls evaluation.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and the CFO, does not expect that the Company’s Disclosure Controls or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the fiscal quarter ended ~~December 31, 2022,~~September 30, 2023, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time ~~we are~~the Company is involved in claims and legal proceedings that arise in the ordinary course of ~~our~~its business. ~~We are~~The Company is currently subject to several such claims and ~~a small number of~~ legal proceedings. ~~We believe that these matters lack merit and we intend~~The Company intends to vigorously defend against them. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. The Company follows ASC ("Accounting Standards Codification") 450 in determining the accounting and disclosure for these contingencies. Based on currently available information, ~~we do~~the Company does not believe that resolution of pending matters will have a material adverse effect on ~~our~~its financial condition, cash flows orand results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that ~~our~~the Company's defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on ~~our~~the Company's business, financial condition, cash flows and results of operations in a particular period. Any claims or

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proceedings against ~~us, whether meritorious or not,~~the Company can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain a necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect ~~our~~the Company's business.

ITEM 1A. RISK FACTORS

The ~~risk factors summarized and disclosed below could adversely affect our~~Company’s business, results of operations and financial condition, and may cause volatility in the price of our shares. These are not all the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. See also the other information set forth in this Quarterly Report on Form 10-Q, including in Part I Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Condensed Consolidated Financial Statements and the related Notes.

~~Summary of Risk Factors~~

~~Risks Related to our Business~~

•~~If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected.~~

•Our future growth will depend on our diversified product growth opportunities, and if we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results could be adversely affected.

•We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.

•Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.

•~~If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.~~

•~~If we are not able to maintain and enhance our brands, or if our brands or~~ reputation, ~~are damaged, our reputation, business and operating results could be adversely affected.~~

•~~If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected.~~

•~~Future impacts of the COVID-19 pandemic are still uncertain and cannot be predicted, and could adversely affect our business, results of operations and financial condition.~~

•We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption of our relationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build and scale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results of operations, operating cash flows and financial condition.

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•~~If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.~~

•Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.

•Our success largely depends on our ability to hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership. Our strategy and our ability to innovate, design and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.

•As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories and pursuing strategic acquisitions and investments, which could have an adverse impact on our business.

•~~As we continue our efforts to lower our costs and improve our operational efficiency, we may not fully realize our goals.~~

•~~Product quality issues could adversely affect our reputation, business and operating results.~~

~~Risks Related to Global Nature of our Operations and Regulatory Environment~~

•~~Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition.~~

•We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.

•Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations and financial condition.

•~~Our financial performance is subject to risks associated with fluctuations in currency exchange rates and interest rates.~~

•~~We are subject to risks related to our environmental, social and governance activities and disclosures.~~

•As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.

•As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, which could adversely affect our net income and cash flows.

~~Risks Related to Cyber Security, Privacy, and Intellectual Property~~

•~~Significant disruptions in, or breaches in security of, our websites, information technology systems or our products could adversely affect our business.~~

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•The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.

•~~Claims by others that we infringe their proprietary technology could adversely affect our business.~~

•~~We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products.~~

~~Risks Related to our Financial Results~~

•~~Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.~~

•~~Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.~~

•We cannot ensure that our current share repurchase program will be fully utilized or that it will enhance long-term shareholder value. Share repurchases may also increase the volatility of the trading price of our shares. We similarly cannot ensure that we will continue to increase our dividend payments or to pay dividends at all. Share repurchases and dividends diminish our cash reserves.

~~Risk Factors~~

~~Risks Related to our Business~~

~~If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected.~~

Our product categories are characterized by short product life cycles, intense competition, frequent new product introductions, rapidly changing technology, dynamic consumer demand and evolving industry standards. As a result, we must continually innovate in our new and existing product categories, introduce new products and technologies, and enhance existing products in order to remain competitive.

~~The success of our product portfolio depends on several factors, including our ability to:~~

•~~Identify new features, functionality and opportunities;~~

•~~Anticipate technology, market trends and consumer preferences;~~

•~~Develop innovative, high-quality, and reliable new products and enhancements in a cost-effective and timely manner;~~

•~~Distinguish our products from those of our competitors; and~~

•~~Offer our products at prices and on terms that are attractive to our customers and consumers.~~

If we do not execute on these factors successfully, products that we introduce or technologies or standards that we adopt may not gain widespread commercial acceptance, and our business and operating results could suffer. In addition, if we do not continue to differentiate our products through distinctive, technologically advanced features, designs, and services that are appealing to our customers and consumers, as well as continue to build and strengthen our brand recognition and our access to distribution channels, our business could be adversely affected.

The development of new products and services can be very difficult and requires high levels of innovation. The development process also can be lengthy and costly. There are significant initial expenditures for research and development, tooling, manufacturing processes, inventory and marketing, and we may not be able to recover those investments. If we fail to accurately anticipate technological trends or our users’ needs or preferences, are unable to complete the development of products and services in a cost-effective and timely fashion or are unable to appropriately increase production to fulfill customer demand, we will be unable to successfully introduce new

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products and services into the market or compete with other providers. Even if we complete the development of our new products and services in a cost-effective and timely manner, they may not be competitive with products developed by others, they may not achieve acceptance in the market at anticipated levels or at all, they may not be profitable or, even if they are profitable, they may not achieve margins as high as our expectations or as high as the margins we have achieved historically.

As we introduce new or enhanced products, integrate new technology into new or existing products, or reduce the overall number of products offered, we face risks including, among other things, disruption in customers’ ordering patterns, excessive levels of new and existing product inventories, revenue deterioration in our existing product lines, insufficient supplies of new products to meet customers’ demand, possible product and technology defects, and a potentially different sales and support environment. Premature announcements or leaks of new products, features or technologies may exacerbate some of these risks by reducing the effectiveness of our product launches, reducing sales volumes of current products due to anticipated future products, making it more difficult to compete, shortening the period of differentiation based on our product innovation, straining relationships with our partners or increasing market expectations for the results of our new products before we have had an opportunity to demonstrate the market viability of the products. Our failure to manage the transition to new products and services or the integration of new technology into new or existing products and services could adversely affect our business, results of operations, operating cash flows and financial condition.

Our future growth will depend on our diversified product growth opportunities, and if we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results could be adversely affected.

~~We have historically targeted peripherals for the PC platform and in recent years, have expanded the categories of products we sell and entered new markets.~~

Our sales of our products have been in the past and may in the future be less than we expect due to a decline in business or economic conditions in one or more of the countries or regions, a greater decline than we expect in demand for our products, our inability to successfully execute our sales and marketing plans, or for other reasons. Global economic concerns, such as the ongoing COVID-19 pandemic, Russia’s invasion of Ukraine, tariffs and policies that inhibit trade, the risk of new sovereign debt issues in Europe, the impact of oil prices from Russia and other countries, conflicts with either local or global financial implications, economic slowdown in China, and the varying pace of global economic recovery, create unpredictability and add risk to our future outlook.

As a result, we are attempting to diversify our product category portfolio. We also are focusing more of our attention, which may include personnel, financial resources and management attention, on product innovations and growth opportunities, including products and services for gaming, for video collaboration, for the consumption of digital music, and on other potential growth opportunities in addition to our PC peripherals product categories. Our investments may not result in the growth we expect, or when we expect it, for a variety of reasons, including but not limited to, changes in growth trends, evolving and changing market and increasing competition, market opportunities, and product innovation.

Trends and opportunities in each of our product categories are rapidly evolving, declining in some categories and increasing in others, and may also be different by region, as a result of which we are constantly required to adapt to such changing markets, increased competition, and new challenges and opportunities. If we do not allocate our resources in line with the market and new opportunities, our business and results of operations could be adversely affected.

In addition to our current growth opportunities, our future growth may be reliant on our ability to identify and develop potential new growth opportunities. This process is inherently risky and will result in investments in time and resources for which we do not achieve any return or value.

Our growth opportunities and those we may pursue are subject to constant and rapidly changing and evolving technologies and evolving industry standards and may be replaced by new technology concepts or platforms. Some of these growth categories and opportunities are also characterized by short product cycles, frequent new product introductions and enhancements and rapidly changing and evolving consumer preferences with respect to design and features that require calculated risk-taking and fast responsiveness and result in short opportunities to establish a market presence. In addition, some of these growth categories and opportunities are characterized by price competition, erosion of premium-priced segments and average selling prices, commoditization, and sensitivity to

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general economic conditions and cyclical downturns. The growth opportunities and strength and number of competitors that we face in all of our product categories mean that we are at risk of new competitors coming to market with more innovative products that are more attractive to customers than ours or priced more competitively. If we do not develop innovative and reliable product offerings and enhancements in a cost-effective and timely manner that are attractive to consumers in these markets, if we are otherwise unsuccessful entering and competing in these growth categories or responding to our many competitors and to the rapidly changing conditions in these growth categories, if the growth categories in which we invest our limited resources do not emerge as the opportunities or do not produce the growth or profitability we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our business and results of operations could be adversely affected.

In addition, we rely on our go-to-market capability to leverage on those growth opportunities, market our products and compete effectively with a goal of strengthening our sales. If we are not able to develop and maintain our go-to-market capabilities and processes, in particular the continued development of our enterprise salesforce and strategy, our business and results of operations could be adversely affected.

We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.

We purchase certain products and key components from a limited number of sources. If the supply of these products or key components were to be delayed or constrained, impacted by global shortages of semiconductor chips, or if one or more of our single-source suppliers experience disruptions or go out of business as a result of adverse global economic conditions, natural disasters or regional or global pandemics, including COVID-19, we might be unable to find a new supplier on acceptable terms, or at all, and our product shipments to our customers could be delayed, which could adversely affect our business, financial condition and operating results.

Lead times for materials, components and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, and supplier capacity. From time to time, we have experienced component shortages and extended lead times on semiconductors, such as microcontrollers and optical sensors, and base metals used in our products. Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could adversely affect our business and operating results.

Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.

We produce approximately half of our products at the facilities we own in China. The majority of our other production is performed by third-party contract manufacturers, including original design manufacturers, in China, Taiwan, Hong Kong, Malaysia, and Vietnam.

Our manufacturing operations in China have been in the past and could in the future be adversely affected by the COVID-19 pandemic and a recent increase of COVID-19 infections in China, changes in the interpretation and enforcement of legal standards, strains on China’s available labor pool, changes in labor costs and other employment dynamics, high turnover among Chinese employees, infrastructure issues, import-export issues, cross-border intellectual property and technology restrictions, currency transfer restrictions, natural disasters, regional or global pandemics, conflicts or disagreements between China and Taiwan or China and the United States, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe. Interpretation and enforcement of China’s laws and regulations continue to evolve, and we expect differences in interpretation and enforcement to continue in the foreseeable future.

Our manufacturing operations at third-party contractors could be adversely affected by contractual disagreements, by labor unrest, by natural disasters, by regional or global pandemics, such as the COVID-19 pandemic, by wars and armed conflicts, by strains on local communications, trade, and other infrastructures, by competition for the available labor pool or manufacturing capacity, by increasing labor and other costs, and by other trade customs and practices that are dissimilar to those in the United States and Europe.

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Further, we have been exposed in the past and may be exposed to fluctuations in the value of the local currency in the countries in which manufacturing occurs. Future appreciation of these local currencies could increase our component and other raw material costs. In addition, our labor costs could continue to rise as wage rates increase and the available labor pool declines. These conditions could adversely affect our financial results.

~~If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.~~

Our business requires us to coordinate the manufacture and distribution of our products over much of the world. We rely on third parties to manufacture many of our products, manage centralized distribution centers, and transport our products. If we do not successfully coordinate the timely manufacturing and distribution of our products, if our manufacturers, distribution logistics providers or transport providers are not able to successfully and timely process our business or if we do not receive timely and accurate information from such providers, and especially if we expand into new product categories or our business grows in volume, we may have an insufficient supply of products to meet customer demand, we could lose sales, we may experience a build-up in inventory, we may incur additional costs, and our financial performance and reporting may be adversely affected.

By locating our manufacturing in China and Southeast Asia, we are reliant on third parties to get our products to distributors around the world. Transportation costs, fuel costs, labor unrest, natural disasters, regional or global pandemics, military conflicts, and other adverse effects on our ability, timing and cost of delivering products can increase our inventory, decrease our margins, adversely affect our relationships with distributors and other customers and otherwise adversely affect our results of operations and financial condition.

A significant portion of our quarterly retail orders and product deliveries generally occur in the last weeks of the fiscal quarter. This places pressure on our supply chain and could adversely affect our revenues and profitability if we are unable to successfully fulfill customer orders.

~~If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operating results could be adversely affected.~~

We have developed long-term value in our brands and have invested significantly in design and in our existing and new brands over the past several years. We believe that our design and brands have significantly contributed to the success of our business and that maintaining and enhancing our brands is very important to our future growth and success. Maintaining and enhancing our brands will require significant investments and will depend largely on our future design, products and marketing, which may not be successful and may damage our brands. Our brands and reputation are also dependent on third parties, such as suppliers, manufacturers, distributors, retailers, product reviewers and the media as well as online consumer product reviews, consumer recommendations and referrals. It can take significant time, resources and expense to overcome negative publicity, reviews or perception. Any negative effect on our brands, regardless of whether it is in our control, could adversely affect our reputation, business and results of operations.

~~If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected.~~

The industry in which we operate is intensely competitive. Most of our product categories are characterized by large, well-financed competitors with strong brand names and highly effective research and development, marketing and sales capabilities, short product life cycles, continual performance enhancements, and rapid adoption of technological and product advancements by competitors in our product markets. Many of our competitors have broad product portfolios across several of our product categories and are able to use the strength of their brands to move into adjacent categories. Our competitors have the ability to bring new products to market quickly and at competitive prices. We experience aggressive price competition and other promotional activities from our primary competitors and from less-established brands, including brands owned by retail customers known as house brands. As we shift the focus of our marketing efforts in certain categories from a push model to a demand-generating pull model, the pressures from this competition and from our distribution channels, combined with the implementation risks of such a strategy shift, could adversely affect our competitive position, market share and business. In addition, our competitors may offer customers terms and conditions that may be more favorable than our terms and conditions and may require us to take actions to maintain or increase our customer incentive programs, which could impact our revenues and operating margins.

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We have historically expanded the categories of products we sell and entered new markets. We remain alert to opportunities in new categories and markets. As we do so, we are confronting new competitors, many of which have more experience in the categories or markets and have greater marketing resources and brand name recognition than we have. In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies in our developing categories as well as in future categories we might enter. Many of these companies have greater financial, technical, sales, marketing and other resources than we have.

Microsoft, Apple, Google and Amazon are leading producers of operating systems, hardware, platforms and applications with which our mice, keyboards, wireless speakers and other products are designed to operate. In addition, Microsoft, Apple, Google and Amazon each has significantly greater financial, technical, sales, marketing and other resources than Logitech, as well as greater name recognition and a larger customer base. As a result, Microsoft, Apple, Google and Amazon each may be able to improve the functionality of its products, if any, or may choose to show preference to our competitors' products, to correspond with ongoing enhancements to its operating systems, hardware and software applications before we are able to make such improvements. This ability could provide Microsoft, Apple, Google, Amazon or other competitors with significant lead-time advantages. In addition, Microsoft, Apple, Google, Amazon or other competitors may be able to control distribution channels or offer pricing advantages on bundled hardware and software products that we may not be able to offer, and maybe financially positioned to exert significant downward pressure on product prices and upward pressure on promotional incentives in order to gain market share. For additional information, see "Competition” in Item 1 of the Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on May 18, 2022.

~~Future impacts of the COVID-19 pandemic are still uncertain and cannot be predicted, and could adversely affect our business, results of operations and financial condition.~~

COVID-19 has spread rapidly throughout the world, causing volatility and disruption in financial markets, curtailing global economic activity, raising the prospect of an extended global recession, and prompting governments and businesses to take unprecedented measures in response. Such measures have included restrictions on travel and business operations, quarantines and shelter-at-home orders, and often resulted in indefinite business closures.

The COVID-19 pandemic and the measures taken by many countries in response have contributed to a general slowdown in the global economy and had a mixed effect and could in the future have a mixed or adverse effect on our business and operations, our customers and our partners. We have experienced and may continue to experience disruptions and higher costs in our manufacturing, supply chain and logistics operations and outsourced services, resulting in shortages of our products in our distribution channels and loss of market share and opportunities. We have also incurred additional costs related to business continuity. For example, uncertainty in supply availability related to the current COVID-19 outbreak in China, depending on its duration, could cause additional negative impact on our business and results of operations.

While we believe that the pandemic accelerated certain trends favorable to us, its effects on the use patterns and demand for our products has been evolving. We experienced significant growth during the COVID-19 pandemic that we may not be able to sustain in the future.

The COVID-19 pandemic also may have the effect of heightening many of the other risks described under this heading “Risk Factors.” We continue to monitor the situation and attempt to take appropriate actions in accordance with the recommendations and requirements of relevant authorities. Should the COVID-19 situation or global economic slowdown not improve or worsen, or if our attempts to mitigate its impact on our operations and costs are not successful, our business, results of operations, financial condition and ~~prospects may~~stock price can be ~~adversely affected.~~

~~We rely on third parties to sell and distribute our products, and we rely on their information to manage our business. Disruption~~affected by a number of ~~our relationship with these channel partners, changes~~factors, whether currently known or unknown, including those described in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build and scale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results of operations, operating cash flows and financial condition.

We primarily sell our products to a network of distributors, retailers, e-tailers and enterprise customers (together with our direct sales channel partners). We are dependent on those direct sales channel partners to distribute and sell our products to indirect sales channel partners and ultimately to consumers. The sales and business practices

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~~of all such sales channel partners, their compliance with laws and regulations, and their reputations - of which we may or may not be aware - may affect our business and our reputation.~~

While our overall distribution relationships are diffuse, in fiscal year 2022 and the first nine months of fiscal year 2023 our gross sales were concentrated with three customers - Amazon Inc., Ingram Micro and TD Synnex - and their affiliated entities. We do not have long-term commitments with those customers. If online sales grow as a percentage of overall sales, we expect that we will become even more reliant on Amazon. While we believe that we have good relationships with Amazon, Ingram Micro and TD Synnex, any adverse change in those relationships could have an adverse impact on our results of operations and financial condition.

The impact of economic conditions, labor issues, natural disasters, regional or global pandemics, evolving consumer preferences, and purchasing patterns on our distribution partners, or competition between our sales channels, could result in sales channel disruption. For example, if sales at large retail stores are displaced as a result of bankruptcy, competition from Internet sales channels or otherwise, our product sales could be adversely affected and our product mix could change, which could adversely affect our operating costs and gross margins. Any loss of a major partner or distribution channel or other channel disruption could make us more dependent on alternate channels, increase pricing and promotional pressures from other partners and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of our products to consumers, our reputation and brand equity, or our market share.

Our sales channel partners also sell products offered by our competitors and, in the case of retailer house brands, may also be our competitors. If product competitors offer our sales channel partners more favorable terms, have more products available to meet their needs, or utilize the leverage of broader product lines sold through the channel, or if our sales channel partners show preference for their own house brands, our sales channel partners may de-emphasize or decline to carry our products. In addition, certain of our sales channel partners could decide to de-emphasize the product categories that we offer in exchange for other product categories that they believe provide them with higher returns. If we are unable to maintain successful relationships with these sales channel partners or to maintain our distribution channels, our business will suffer.

As we expand into new product categories and markets in pursuit of growth, we will have to build relationships with new channel partners and adapt to new distribution and marketing models. These new partners, practices and models may require significant management attention and operational resources and may affect our accounting, including revenue recognition, gross margins, and the ability to make comparisons from period to period. Entrenched and more experienced competitors will make these transitions difficult. Certain product categories, such as Video Collaboration, may also require that we further build and scale our own enterprise sales force. Several of our competitors already have large enterprise sales forces and experience and success with that sales model. If we are unable to build successful distribution channels, build and scale our own enterprise sales force, or successfully market our products in these new product categories, we may not be able to take advantagePart I, Item 1A of the ~~growth opportunities, and our business and our ability to grow our business could be adversely affected.~~

We reserve for cooperative marketing arrangements, incentive programs and pricing programs with our sales channel partners. These reserves are based on judgments and estimates, using historical experience rates, inventory levels in distribution, current trends and other factors. There could be significant differences between the actual costs of such arrangements and programs and our estimates.

We use sell-through data, which represents sales of our products by our direct retailer and e-tailer customers to consumers, and by our distributor customers to their customers, along with other metrics, to assess consumer demand for our products. Sell-through data is subject to limitations due to collection methods and the third-party nature of the data and thus may not be an accurate indicator of actual consumer demand for our products. The customers supplying sell-through data vary by geographic region and from period to period, but typically represent a majority of our retail sales. In addition, we rely on channel inventory data from our sales channel partners. If we do not receive this information on a timely and accurate basis, if this information is not accurate, or if we do not properly interpret this information, our results of operations and financial condition may be adversely affected.

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~~If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.~~

We use our forecasts of product demand to make decisions regarding investments of our resources and production levels of our products. Although we receive forecasts from our customers, many are not obligated to purchase the forecasted demand. Also, actual sales volumes for individual products in our retail distribution channel can be volatile due to changes in consumer preferences and other reasons. In addition, our products have short product life cycles, so a failure to accurately predict high demand for a product can result in lost sales that we may not recover in subsequent periods, or higher product costs if we meet demand by paying higher costs for materials, production and delivery. We could also frustrate our customers and lose shelf space and market share. Our failure to predict low demand for a product can result in excess inventory, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories.

If our sales channel partners have excess inventory of our products or decide to decrease their inventories for any reason, they may decrease the number of products they acquire in subsequent periods, which could cause disruption in our business and adversely affect our forecasts and sales.

Over the past few years, we have expanded the types of products we sell and the geographic markets in which we sell them. The changes in our product portfolio and the expansion of our sales markets have increased the difficulty of accurately forecasting product demand. We are also utilizing sea shipments more extensively than air delivery, which will cause us to build and ship products to our distribution centers earlier and will also result in increases in inventory. These operational shifts increase the risk that we have excess or obsolete inventory if we do not accurately forecast product demand.

In addition, market demand remains less predictable and more volatile than pre-COVID-19. As a result, we have experienced in the past and may continue experiencing large differences between our forecasts and actual demand for our products that may result in excess inventory or product unavailability, inventory and restructuring reserves, increases in operational logistics and other costs, damaged relationships with suppliers or customers, opportunities for our competitors, and lost market share and revenue. If we do not accurately predict product demand, our business and operating results could be adversely affected.

Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.

Our peripherals business has historically been built largely around the PC platform, which over time became relatively open, and its inputs and operating system standardized. With the growth of mobile, tablet, gaming and other computer devices, digital music and personal voice assistants, the number of platforms has grown, and with it the complexity and increased need for us to have business and contractual relationships with the platform owners in order to produce products compatible with these platforms. Our product portfolio includes current and future products designed for use with third-party platforms or software, such as the Apple iPad, iPod, iPhone and Siri, Android phones and tablets, Google Assistant and Amazon Alexa. Our business in these categories relies on our access to the platforms of third parties, some of whom are our competitors. Platform owners that are competitors have a competitive advantage in designing products for their platforms and may produce peripherals or other products that work better, or are perceived to work better, than our products in connection with those platforms. As we expand the number of platforms and software applications with which our products are compatible, we may not be successful in launching products for those platforms or software applications, we may not be successful in establishing strong relationships with the new platform or software owners, or we may negatively impact our ability to develop and produce high-quality products on a timely basis for those platforms and software applications or we may otherwise adversely affect our relationships with existing platform or software owners.

Our access to third-party platforms may require paying a royalty, which lowers our product margins or may otherwise be on terms that are not acceptable to us. In addition, the third-party platforms or technologies used to interact with our product portfolio can be delayed in production or can change without prior notice to us, which can result in our having excess inventory, lower margins, lost investment in time and expense, or lost opportunity cost.

If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or changed without notice to us, our business and operating results could be adversely affected.

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Our success largely depends on our ability to hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership. Our strategy and our ability to innovate, design and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.

Our success depends on our ability to attract and retain highly skilled personnel, including senior leadership and international personnel. From time to time, we experience turnover in some of our senior leadership positions.

We compensate our employees through a combination of salary, bonuses, benefits and equity compensation. Recruiting and retaining skilled personnel, including software and hardware engineers, is highly competitive. The pandemic and hybrid work environment have driven acute competition for talent, increased employee burnout and attrition across multiple industries. If we fail to provide an attractive working environment and competitive compensation to our employees, it will be difficult to retain, hire and integrate qualified employees and contractors, and we may not be able to maintain and expand our business. If we do not retain or maintain the continuity of our senior leaders or other key employees for any reason, including voluntary or involuntary departure, death or permanent or temporary disability, we risk losing institutional knowledge, experience, expertise and other benefits of continuity as well as the ability to attract and retain other key employees. In addition, we must carefully balance the size of our employee base with our current infrastructure, management resources and anticipated operating cash flows. If we are unable to manage the size of our employee base, particularly engineers, product managers and designers, we may fail to develop and introduce new products successfully and in a cost-effective and timely manner. If our revenue growth or employee levels vary significantly, our operating cash flows and financial condition could be adversely affected. Volatility or lack of positive performance in our stock price may also affect our ability to retain key employees, many of whom have been granted equity incentives. Logitech’s practice has been to provide equity incentives to its employees, but the number of shares available for equity grants is limited. We may find it difficult to provide competitive equity incentives, and our ability to hire, retain and motivate key personnel may suffer.

As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories and pursuing strategic acquisitions and investments, which could have an adverse impact on our business.

~~We continue to review our product portfolio and update our non-strategic product categories and products. During the third quarter of fiscal year 2022, we ceased future product launches~~2023 Form 10-K under the ~~Jaybird brand within our Audio & Wearables product category and during the fourth quarter~~heading “Risk Factors.” When any one or more of ~~fiscal 2021, we discontinued our Harmony line of home entertainment controllers within our~~ ~~Smart Home product category~~. If we are unable to effect sales on favorable terms or if realignment is more costly or distracting than we expect or has a negative effect on our organization, employees and retention, then our business and operating results may be adversely affected. Discontinuing products with service components may also cause us to continue to incur expenses to maintain services within the product life cycle or may adversely affect our customer and consumer relationships and brand. Divestitures may also involve warranties, indemnification or covenants that could restrict our business or result in litigation, additional expenses or liabilities. In addition, discontinuing product categories, even categories that we consider non-strategic, reduces the size and diversification of our business and causes us to be more dependent on a smaller number of product categories.

As we attempt to grow our business in strategic product categories and emerging market geographies, we will consider growth through acquisition or investment. We will evaluate acquisition opportunities that could provide us with additional product or service offerings or with additional industry expertise, assets and capabilities. For example, we acquired ASTRO Gaming to expand into the console gaming market, we acquired Saitek to expand into the gaming simulation and controller markets, we acquired Blue Microphones to expand into the microphones market, we acquired General Workings, Inc. ("Streamlabs") to expand our software and service capabilities and tools for the streaming market, and we acquired Mevo Inc. to expand our camera hardware and software for live streaming and video conferencing. Acquisitions could result in difficulties integrating acquired operations, products, technology, internal controls, personnel and management teams and result in the diversion of capital and management’s attention away from other business issues and opportunities. If we fail to successfully integrate acquisitions, our business could be harmed. Acquisitions could also result in the assumption of known and unknown liabilities, product, regulatory and other compliance issues, dilutive issuances of our equity securities, the incurrence of debt, disputes over earn-outs or other litigation, and adverse effects on relationships with our and our target’s employees, customers and suppliers. Moreover, our acquisitions may not be successful in achieving our desired strategy, product, financial or other objectives or expectations, which would also cause our business to suffer.

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Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill, restructuring charges, inventory write downs or the recording of share-based compensation.

If we divest or discontinue product categories or products that we previously acquired, or if the value of those parts of our business become impaired, we may need to evaluate the carrying value of our goodwill. Additional impairment charges could adversely affect our results of operations. Several of our past acquisitions have not been successful and have led to significant impairment charges. Acquisitions and divestitures may also cause our operating results to fluctuate and make it difficult for investors to compare operating results and financial statements between periods. In addition,these risks materialize from time to time, we make strategic venture investments in other companies that provide products and services that are complementary to ours. If these investments are unsuccessful, this could have an adverse impact on ourthe Company’s business, reputation, results of operations, ~~operating cash flows~~financial condition and ~~financial condition.~~

~~As we continue our efforts to lower our costs~~stock price can be materially and ~~improve our operational efficiency, we may not fully realize our goals.~~

~~During~~adversely affected. In the second quarter of fiscal year ~~2023, we initiated a restructuring plan~~2024, there have been no material changes to ~~realign our business group and engineering structure with our go-to-market strategy to more effectively compete within~~ the enterprise market and to better serve end-users. Our strategy has been based on simplifying the organization and reducing operating costs through global workforce reductions, with the goal of better aligning costs with our business.

Our ability to achieve the desired and anticipated cost savings and other benefits from these simplification, cost-cutting and restructuring activities, and within our desired and expected timeframes, are subject to many estimates and assumptions, and the actual savings and timing for those savings may vary materially based onrisk factors such as local labor regulations, negotiations with third parties, and operational requirements. These estimates and assumptions are also subject to significant economic, competitive and other uncertainties, some of which are beyond our control. There can be no assurance that we will fully realize the desired and anticipated benefits from these activities. To the extent that we are unable to improve our operational efficiency, further restructuring measures may be requireddisclosed in the ~~future. Furthermore, we are expecting to be able to use~~Company's Form 10-K, as updated in our Quarterly Report on Form 10-Q for the anticipated cost savings from these activities to fund and support our current growth opportunities and incremental investments for future growth. If the cost-savings do not materialize as anticipated, or within our expected timeframes, our ability to invest in growth may be limited and our business and operating results may be adversely affected.

~~Product quality issues could adversely affect our reputation, business and operating results.~~

The market for our products is characterized by rapidly changing technology and evolving industry standards. To remain competitive, we must continually introduce new products and technologies. The products that we sell could contain defects in design or manufacture. Defects could also occur in the products or components that are supplied to us. There can be no assurance we will be able to detect and remedy all defects in the hardware and software we sell. Failure to do so could result in product recalls, product liability claims and litigation, product redesign efforts, lost revenue, loss of reputation, and significant warranty and other expenses to remedy.

While we maintain reserves for reasonably estimable liabilities and purchase liability insurance, our reserves may not be adequate to cover such claims and liabilities and our insurance is subject to deductibles and may not be adequate to cover such claims and liabilities. Furthermore, our contracts with distributors and retailers may contain warranty, indemnification and other provisions related to product quality issues, and claims under those provisions may adversely affect our business and operating results.

~~Risks Related to Global Nature of our Operations and Regulatory Environment~~

~~Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition.~~

We conduct operations internationally with sales in the Americas, EMEA and Asia Pacific regions. Our manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia and we also purchase certain products and key components from a limited number of sources, and depend on the supply chain, including freight, to receive components, transport finished goods and deliver our products across the world. As a result, adverse global and regional economic and geopolitical conditions have in the past and can in the future materially adversely affect our business, results of operations and financial condition.

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Such conditions, including but not limited to inflation, slower growth or recession, new or increased tariffs, trade restrictions, changes to fiscal and monetary policy, higher interest rates and currency fluctuations, and other conditions that are susceptible to impact consumer confidence and spending could adversely affect demand for our products. ~~During the first nine months of fiscal year 2023, we were impacted by adverse mac~~roeconomic and geopolitical conditions including but not limited to inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending. In addition, the war in Ukraine increased global supply chain, logistics, and inflationary challenges. In the fourth quarter of fiscal year 2022, we indefinitely ceased all sales and shipments to Russia. Our sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory. Our business in Russia and Ukraine was not material to our results and accounted for approximately 2% of total revenue for fiscal year 2022.

Global or regional economic and political conditions also have an impact on our suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result impacting the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share and in turn adversely impact our operations.

~~All these and other global and regional economic and geopolitical factors can materially adversely affect our business, results of operations and financial condition.~~

We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.

We conduct operations in a number of countries and have invested significantly in growing our personnel and sales and marketing activities in China and, to a lesser extent, other emerging markets. We may also increase our investments to grow sales in other emerging markets, such as Latin America, Eastern Europe, the Middle East and Africa. There are risks inherent in doing business in international markets, including:

•~~Difficulties in staffing and managing international operations;~~

•Compliance with increasing amounts of laws and regulations, including environmental, tax, import/export and anti-corruption laws, which vary from country to country, and the European Union legislation, and over time, increasing the costs of compliance and potential risks of non-compliance;

•Varying laws, regulations and other legal protections, uncertain and varying enforcement of those laws and regulations, dependence on local authorities, and the importance of local networks and relationships;

•Varying accounting, auditing and financial reporting standards, accountability and protections, including risks related to the lack of access by the Public Company Accounting Oversight Board (United States) ("PCAOB") to inspect PCAOB-registered accounting firms in emerging market countries such as China;

•Exposure to political and financial instability, especially with the uncertainty associated with the ongoing sovereign debt issues in certain Euro zone countries and the stability of the European Union, which may lead to reduced sales, currency exchange losses and collection difficulties or other losses;

•Political and economic uncertainty around the world. For example, Russia’s invasion of Ukraine in February 2022 resulted in a sharp increase of commodity prices, sanctions and trade restrictions have been imposed on Russian banks, businesses, and individuals, and the conflict has sparked a massive refugee crisis. This conflict has driven and could continue to drive economic uncertainty, including inflation and restricted component availability, among other things;

•~~Import or export restrictions or licensing requirements that could affect some of our products, including those with encryption technology;~~

•Trade protection measures, custom duties, tariffs, import or export duties, and other trade barriers, restrictions and regulations, including recent and ongoing United States - China tariffs and trade restrictions, including China's 2021 Anti-Foreign Sanctions Law;

•~~Lack of infrastructure or services necessary or appropriate to support our products and services;~~

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•~~Effects of the COVID-19 pandemic that may be more concentrated where we operate internationally;~~

•~~Exposure to fluctuations in the value of local currencies;~~

•~~Difficulties and increased costs in establishing sales and distribution channels in unfamiliar markets, with their own market characteristics and competition, including entrenched local competition;~~

•~~Weak protection of our intellectual property rights;~~

•~~Higher credit risks;~~

•~~Variations in VAT (value-added tax) or VAT reimbursement;~~

•~~Imposition of currency exchange controls;~~

•~~Delays from customs brokers or government agencies; and~~

•~~A broad range of customs, consumer trends, and more.~~

~~Any of these risks could adversely affect our business, financial condition and operating results.~~

Sales growth in key markets, including China, is an important part of our expectations for our business. As a result, if economic, political or business conditions deteriorate in these markets, or if one or more of the risks described above materialize in these markets, our overall business and results of operations will be adversely affected.

Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations and financial condition.

In recent years, the U.S. government has instituted or proposed changes to international trade policy through the renegotiation, and potential termination, of certain existing bilateral or multilateral trade agreements and treaties with, and the imposition of tariffs on a wide range of products and other goods from, China, countries in EMEA and other countries. As previously disclosed, we have invested significantly in manufacturing facilities in China and Southeast Asia. Given our manufacturing principally in those countries, and our lack of manufacturing elsewhere, policy or regulations changes in the United States or other countries present particular risks for us.

In addition, the current Chinese administration has imposed an increased volume of regulation creating a more challenging environment for non-Chinese companies operating in the region, including in the areas of intellectual property, trade, contract enforcement, data privacy, capital markets and human rights. As a result, such regulations may have the effect of limiting our growth and market share in China, and disrupting manufacturing and operations in the region.

~~For example,~~ended on June 10, 2021, the National People’s Congress Standing Committee of the People’s Republic of China passed China's new Anti-Foreign Sanctions Law. The Anti-Foreign Sanctions Law took immediate effect and allows China to take “retaliatory action” against any “discriminatorily restrictive measures” imposed by foreign countries against Chinese organizations and citizens. As a result, China may impose countermeasures against government and private entities and/or persons that formulate, implement or comply with any regulation deemed a “discriminatorily restrictive measure.” Penalties may include denial of entry to China, prohibition of doing business in or with China, freezing of assets and “any other necessary measures.”

New or increased tariffs could adversely affect more or all of our products. There also are risks associated with retaliatory tariffs and resulting trade wars. We cannot predict future trade policy and regulations in the United States and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. A trade war could have a significant adverse effect on world trade and the world economy. To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be

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adversely affected and the demand from our customers for products and services may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending. If we deem it necessary to alter all or a portion of our activities or operations in response to such policies, agreements or tariffs, our capital and operating costs may increase.

In addition, as a result of Russia’s invasion of Ukraine in February 2022, sanctions and trade restrictions have been imposed on Russia, including banks, businesses, and individuals, by the U.S., the European Union and Switzerland. This conflict has driven and could continue to drive economic uncertainty, including inflation, and component availability, among other things.

Our ongoing efforts to address these risks may not be effective and may have long-term adverse effects on our operations and operating results that we may not be able to reverse. Such efforts may also take time to implement or to have an effect and may result in adverse quarterly financial results or fluctuations in our quarterly financial results. As a result, changes in trade policy and regulations in the United States and other countries as well as changes in trade agreements and tariffs and sanctions imposed on Russia could adversely affect our business, results of operations and financial condition.

~~Our financial performance is subject to risks associated with fluctuations in currency exchange rates and interest rates.~~

~~A significant portion of our business is conducted in currencies other than the U.S. Dollar. Therefore, we face exposure to movements in currency exchange rates.~~

Our primary exposure to movements in currency exchange rates relates to non-U.S. Dollar-denominated sales and operating expenses worldwide. For the three months ended December 31, 2022, approximately 52% of our revenue was in non-U.S. denominated currencies. The weakening of currencies relative to the U.S. Dollar adversely affects the U.S. Dollar value of our non-U.S. Dollar-denominated sales and earnings. If we raise international pricing to compensate, it could potentially reduce demand for our products, adversely affecting our sales and potentially having an adverse impact on our market share. Margins on sales of our products in non-U.S. Dollar-denominated countries and on sales of products that include components obtained from suppliers in non-U.S. Dollar-denominated countries could be adversely affected by currency exchange rate fluctuations. In some circumstances, for competitive or other reasons, we may decide not to raise local prices to fully offset the U.S. Dollar’s strengthening, which would adversely affect the U.S. Dollar value of our non-U.S. Dollar-denominated sales and earnings. Competitive conditions in the markets in which we operate may also limit our ability to increase prices in the event of fluctuations in currency exchange rates. Conversely, strengthening of currency rates may also increase our product component costs and other expenses denominated in those currencies, adversely affecting operating results. We further note that a larger portion of our sales than of our expenses are denominated in non-U.S. denominated currencies.

We use derivative instruments to hedge certain exposures to fluctuations in currency exchange rates. The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects of unfavorable movements in currency exchange rates over the limited time the hedges are in place and do not protect us from long term shifts in currency exchange rates.

As a result, fluctuations in currency exchange rates could and have in the past adversely affect our business, operating results and financial condition. Moreover, these exposures may change over time.

~~We are subject to risks related to our environmental, social and governance (“ESG”) activities and disclosures.~~

Concern over climate change may result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation and other cost increases that could adversely affect our business. Compliance with such requirements could also require additional expenditures by us or our suppliers, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In addition, ESG reporting and disclosure requirements continue to evolve, with increasing global regulation and heightened investor expectations. Companies must develop an expanded set of metrics and measures, data

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collection and processing, controls, and reporting processes in order to meet regulatory requirements and stakeholder expectations. Failure to promptly and accurately meet these expectations and requirements may result in reputational and brand damage, regulatory penalties and litigation among other things.

As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.

Based on our current business model and as we expand into new markets and product categories and acquire companies, businesses and assets, we must comply with a wide variety of laws, standards and other requirements governing, among other things, health and safety, hazardous materials usage, product-related energy consumption, conflict minerals, packaging, recycling, sustainability, environmental, child labor and human rights matters. Our products may be required to obtain regulatory approvals and satisfy other regulatory concerns in the various jurisdictions where they are manufactured, sold or both. Companies, businesses and assets that we acquire may not be in compliance with regulations in all jurisdictions. These requirements create procurement and design challenges, which, among other things, require us to incur additional costs identifying suppliers and contract manufacturers who can provide or obtain compliant materials, parts and end products. Failure to comply with such requirements can subject us to liability, additional costs, and reputational harm and, in severe cases, force us to recall products or prevent us from selling our products in certain jurisdictions. We also are subject to the SEC disclosure requirements regarding the use of certain minerals, known as conflict minerals, which are mined from the Democratic Republic of Congo and adjoining countries, as well as procedures regarding a manufacturer’s efforts to identify and prevent the sourcing of such minerals and metals produced from those minerals. The moral and regulatory imperatives to avoid purchasing conflict minerals are causing us to incur additional expenses, could limit the supply and increase the cost of certain metals used in manufacturing our products and could adversely affect the distribution and sales of our products.

As a Swiss company with shares listed on both the SIX Swiss Exchange and the Nasdaq Global Select Market, we are also subject to both Swiss and United States corporate governance and securities laws and regulations. In addition to the extra costs and regulatory burdens of our dual regulatory obligations, the two regulatory regimes may not always be compatible and may impose disclosure obligations, operating restrictions or tax effects on our business to which our competitors and other companies are not subject. For example, on January 1, 2023, subject to certain transitional provisions, the revised Swiss Corporate Law, incorporating, the Swiss Federal Council Ordinance Against Excessive Compensation at Public Companies, became effective. The revised Swiss Corporate Law among other things, (a) requires a binding shareholder “say on pay” vote with respect to the compensation of members of our executive management and Board of Directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and Board of Directors, (c) imposes other restrictive compensation practices, and (d) requires that our articles of incorporation specify various compensation-related matters. Potential future initiatives relating to corporate governance or executive compensation, and Swiss voter sentiment in favor of such regulations may increase our non-operating costs and adversely affect our ability to attract and retain executive management and members of our Board of Directors.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") which are subject to interpretation or changes by the Financial Accounting Standard Board ("FASB"), the SEC and other various bodies formed to promulgate and interpret appropriate accounting principles. New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future which may have a significant effect on our financial results or our compliance with regulations.

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As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, which could adversely affect our net income and cash flows.

We are incorporated in the canton of Vaud in Switzerland, and our effective income tax rate benefited from a longstanding ruling from the canton of Vaud through December 31, 2019. As a result of the Federal Act on the Tax Reform and AHV Financing (“TRAF”), the canton of Vaud enacted tax reforms on March 10, 2020 that took effect as of January 1, 2020. As a result of the reform, Logitech will incur cash income taxes that will increase over time as the deferred income tax benefit established in connection with the reform diminishes. The canton’s tax authority is primarily delegated by the Swiss federal government and its implementation of TRAF in general or with respect to Logitech is subject to Swiss federal review and challenge. Implementation of any material change in tax laws or policies or the adoption of new interpretations of existing tax laws and rulings, or termination or replacement of our tax arrangements with the canton of Vaud, by Switzerland or the canton of Vaud could result in a higher effective income tax rate, or a decreased tax asset, a charge to earnings and an accelerated pace of increase in our effective income tax rate, or a combination of such impacts, on our worldwide earnings and any such change will adversely affect our net income. Changes in our effective income tax rate may also make it more difficult to compare our net income and earnings per share between periods.

We operate in multiple jurisdictions and our profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by changes in or interpretations of tax laws, treaties, rulings, regulations or agreements in any given jurisdiction, or changes in international tax reform by the Organization for Economic Co-operation and Development and similar organizations, utilization of net operating loss and tax credit carryforwards, changes in geographical allocation of income and expense, and changes in management’s assessment of matters such as the realizability of deferred tax assets. In the past, we have experienced fluctuations in our effective income tax rate. Our effective income tax rate in a given fiscal year reflects a variety of factors that may not be present in the succeeding fiscal year or years. There is no assurance that our effective income tax rate will not change in future periods.

We file Swiss and foreign tax returns. We are frequently subject to tax audits, examinations and assessments in various jurisdictions. If any tax authority successfully challenges our operational structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, if the terms of certain income tax treaties are interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective income tax rate could increase. For example, policy changes in Switzerland, the United States or China predicated on our presence in those countries could adversely affect where we recognize profit and our effective income tax rate. A material assessment by a governing tax authority could adversely affect our profitability. If our effective income tax rate increases in future periods, our net income and cash flows could be adversely affected.

~~Risks Related to Cyber Security, Privacy, and Intellectual Property~~

~~Significant disruptions in, or breaches in security of, our websites, information technology systems or our products could adversely affect our business.~~

As a consumer electronics company, our websites are an important presentation of our company, identity and brands and an important means of interaction with and source of information for consumers of our products. We also rely on our centralized information technology systems for product-related information and to store intellectual property, forecast our business, maintain financial records, manage operations and inventory, and operate other critical functions. We allocate significant resources to maintain our information technology systems and deploy network security, data encryption, training and other measures to protect against unauthorized access or misuse. Nevertheless, our websites and information technology systems have been and could continue to be subject to or threatened with, and are susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, structural or operational failures, computer viruses, attacks by computer hackers, other data security issues, telecommunication failures, user error, malfeasance, catastrophes, system or software upgrades, integration or migration, or other foreseeable and unforeseen events. From time to time, we and our suppliers have identified vulnerabilities or other issues that we believe have been addressed, and we expect such issues to continue to arise. None of such disruptions or issues has individually or in the aggregate resulted in security incidents with a material impact on us. Moreover, due to the COVID-19 pandemic, there is an increased risk that we may experience security breach related incidents as a result of our employees, service providers, and third parties working remotely on less

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secure systems. In addition, our growth, and increased frequency and sophistication of cyber and product security attacks may increase the likelihood of the Company becoming a target of increasingly complex and damaging attacks that substantially disrupt operations and expose sensitive data. Further, the U.S. Cybersecurity and Infrastructure Security Agency and the European Central Bank have both issued warnings about potential Russian cyberattacks as a result of Russia’s invasion of Ukraine and sanctions imposed on Russia. Breaches or disruptions of our websites or information technology systems, breaches of confidential information, data corruption or other data security issues could adversely affect our brands, reputation, relationships with customers or business partners, or consumer or investor perception of our company, business or products or result in disruptions of our operations, loss of intellectual property or our customers’ or our business partners’ data, reduced value of our investments in our brands, design, research and development or engineering, or costs to address regulatory inquiries or actions or private litigation, to respond to customers or partners or to rebuild or restore our websites or information technology systems.

The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.

In connection with our operations, we collect personal data, including that of our consumers. This information is increasingly subject to legislation, regulations and enforcement in numerous jurisdictions around the world. Global data privacy regulation is increasingly fragmented, with increasing enforcement efforts and penalties. Such fragmentation requires more complex and costly compliance structures, while heightened enforcement increases the cost and reputational risk associated with even minor compliance errors.

For example, the General Data Protection Regulation ("GDPR"), which is applicable to us and to all companies processing data of people in the European Union, imposes significant fines and sanctions for violation of the Regulation. Compliance with the GDPR's international transfer rules has been made more difficult by the invalidation of the U.S. European Union Privacy Shield and we are now required to put in place additional privacy protective measures for transfer of data of people in the European Union to certain countries outside of the European Economic Area. In the United States, California and Virginia have already adopted privacy laws and other legislations may follow, at states and federal levels. Such laws and regulations are typically intended to protect the privacy and security of personal information and its collection, storage, transmission, use and distribution in or from the governing jurisdiction. In addition, because various jurisdictions have different laws and regulations concerning the use, storage and transmission of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter. The collection of user data heightens the risk of security breaches and other data security issues related to our IT systems and the systems of third-party data storage and other service and IT providers. Such laws and regulations, and the variation between jurisdictions, as well as additional security measures and risk, could subject us to increased costs, allocation of additional resources, financial penalties or other liabilities or negative publicity that could adversely affect our business.

~~Claims by others that we infringe their proprietary technology could adversely affect our business.~~

We have been expanding the categories of products we sell. We expect to continue to enter new categories and markets. As we do so, we face an increased risk that claims alleging we infringe the patent or other intellectual property rights of others, regardless of the merit of the claims, may increase in number and significance. This risk is heightened by the persistent lawsuits brought by holders of patents that do not have an operating business or are attempting to license broad patent portfolios Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims. A successful claimant could secure a judgment that requires us to pay substantial damages or prevents us from distributing certain products or performing certain services. We might also be required to seek a license for the use of such intellectual property, which may not be available on commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful. Any claims or proceedings against us, whether meritorious or not, could be time consuming, result in costly litigation or the diversion of significant operational resources, or require us to enter into royalty or licensing agreements, any of which could materially and adversely affect our business and results of operations.

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~~We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products.~~

Our future success depends in part on our proprietary technology, technical know-how and other intellectual property. We rely on a combination of patent, trade secret, copyright, trademark and other intellectual property laws, and confidentiality procedures and contractual provisions such as nondisclosure terms and licenses, to protect our intellectual property.

We hold various United States patents and pending applications, together with corresponding patents and pending applications from other countries. It is possible that any patent owned by us will be invalidated, deemed unenforceable, circumvented or challenged, that the patent rights granted will not provide competitive advantages to us, or that any of our pending or future patent applications will not be granted, maintained or enforced. In addition, other intellectual property laws or our confidentiality procedures and contractual provisions may not adequately protect our intellectual property. Also, others may independently develop similar technology, duplicate our products, or design around our patents or other intellectual property rights. Unauthorized parties have copied and may in the future attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Any of these events could adversely affect our business, financial condition and operating results.

~~Risks Related to our Financial Results~~

~~Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.~~

Our revenues and profitability are difficult to predict due to the nature of the markets in which we compete, fluctuating user demand, the uncertainty of current and future global economic conditions, and for many other reasons, including the following:

•Our operating results are highly dependent on the volume and timing of orders received during the quarter, which are difficult to forecast. Customers generally order on an as-needed basis and we typically do not obtain firm, long-term purchase commitments from our customers. As a result, our revenues in any quarter depend primarily on orders booked and shipped in that quarter.

•~~A significant portion of our quarterly retail sales typically occurs in the last weeks of each quarter, further increasing the difficulty in predicting quarterly revenues and profitability.~~

•Our sales are impacted by consumer demand and current and future global economic and political conditions, including inflation, foreign currency fluctuations, slowdown of economic activity around the globe, in part due to rising interest rates, and lower consumer and enterprise spending, trade restrictions and tariffs, and can, therefore, fluctuate abruptly and significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in distributor inventory practices and consumer buying patterns.

•We must incur a large portion of our costs in advance of sales orders because we must plan research and production, order components, buy tooling equipment, and enter into development, sales and marketing, and other operating commitments prior to obtaining firm commitments from our customers. This makes it difficult for us to rapidly adjust our costs during the quarter in response to a revenue shortfall, which could adversely affect our operating results.

•From time to time, we engage in opportunistic marketing and sales activities, including advertising and promotional events to enhance our brand awareness. The effectiveness of our marketing and sales efforts is uncertain and it is difficult to predict whether our marketing and sales efforts will result in increased sales.

•The COVID-19 pandemic has led to evolving changes in our supply, operations, logistics and related expenses and use patterns and demand for certain of our products that may not recur or be sustainable in future periods, as well as uncertainty in global macroeconomic conditions.

•We engage in acquisitions and divestitures, and such activity varies from period to period. Such variance may affect our growth, our previous outlook and expectations, and comparisons of our operating results and financial statements between periods.

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•We are continuously attempting to simplify our organization, to control operating costs through expense and global workforce management, to reduce the complexity of our product portfolio, and to better align costs with our current business as we expand from PC accessories and provide leverage for growth opportunities in accessories and other products and services for creativity and productivity, gaming, video collaboration, mobile devices, music, digital home and other product categories. We may not achieve the cost savings or other anticipated benefits from these efforts, and the success or failure of such efforts may cause our operating results to fluctuate and to be difficult to predict.

•Fluctuations in currency exchange rates can impact our revenues, expenses and profitability because we report our financial statements in U.S. Dollars, whereas a significant portion of our revenues and expenses are in other currencies. We attempt to adjust product prices over time to offset the impact of currency movements. However, over short periods of time, during periods of weakness in consumer spending or given high levels of competition in many product categories, our ability to change local currency prices to offset the impact of currency fluctuations is limited.

Because our operating results are difficult to predict, our results may be below the expectations of financial analysts and investors, which could cause the price of our shares to decline. For example, following our announcement on January 11, 2023 of lower than expected preliminary financial results for the third quarter of fiscal year 2023, our share price declined significantly.

~~Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.~~

Our gross margins can vary due to consumer demand, competition, product pricing, product lifecycle, product mix, new product introductions, unit volumes, acquisitions and divestitures, commodity, supply chain and logistics costs, capacity utilization, geographic sales mix, currency exchange rates, trade policy and tariffs, and the complexity and functionality of new product innovations and other factors. In particular, if we are not able to introduce new products in a timely manner at the product cost we expect, or if consumer demand for our products is less than we anticipate, or if there are product pricing, marketing and other initiatives by our competitors to which we need to react or that are initiated by us to drive sales that lower our margins, then our overall gross margin will be less than we project.

In addition, our gross margins may vary significantly by product line, sales geography and customer type, as well as within product lines. When the mix of products sold shifts from higher margin product lines to lower margin product lines, to lower margin sales geographies, or to lower margin products within product lines, our overall gross margins and our profitability may be adversely affected.

As we expand within and into new product categories, our products in those categories may have lower gross margins than in our traditional product categories. Consumer demand in these product categories, based on style, color and other factors, tends to be less predictable and tends to vary more across geographic markets. As a result, we may face higher up-front investments, inventory costs associated with attempting to anticipate consumer preferences, and increased inventory write-offs. If we are unable to offset these potentially lower margins by enhancing the margins in our more traditional product categories, our profitability may be adversely affected.

~~Changes in trade policy, including tariffs and the tariffs focused on China in particular, and currency exchange rates also have adverse impacts on our gross margins.~~

~~The impact of these factors on gross margins can create unanticipated fluctuations in our operating results, which may cause volatility in the price of our shares.~~

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We cannot ensure that our current share repurchase program will be fully utilized or that it will enhance long-term shareholder value. Share repurchases may also increase the volatility of the trading price of our shares. We similarly cannot ensure that we will continue to increase our dividend payments or to pay dividends at all. Share repurchases and dividends diminish our cash reserves.

~~In July 2022, our Board of Directors approved a $500 million increase to our current repurchase program of our registered shares up to $1.5 billion.~~ ~~The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. As of December 31, 2022, $596.3 million was available for repurchase under the 2020 repurchase program.~~ ~~We have also paid cash dividends and increased the size of our dividend, each year since fiscal year 2013. Our~~ share repurchase program and dividend policy may be affected by many factors, including general business and economic conditions, our financial condition and operating results, our views on potential future capital requirements, restrictions imposed in any future debt agreements, the emergence of alternative investment or acquisition opportunities, changes in our business strategy, legal requirements, changes in tax laws, and other factors. Our share repurchase program does not obligate us to repurchase all or any of the dollar value of shares authorized for repurchase. The program could also increase the volatility of the trading price of our shares. Similarly, we are not obligated to pay dividends on our registered shares. Under Swiss law, we may only pay dividends upon the approval of a majority of our shareholders, which is under the discretion of and generally follows a recommendation by our Board of Directors that such a dividend is in the best interests of our shareholders. There can be no assurance that our Board of Directors will continue to recommend, or that our shareholders will approve, dividend increases or any dividend at all. If we do not pay a regular dividend, we may lose the interest of investors that focus their investments on dividend-paying companies, which could create downward pressure on our share price. Any announcement of termination or suspension of our share repurchase program or dividend may result in a decrease in our share price. The share repurchase program and payment of cash dividends could also diminish our cash reserves that may be needed for investments in our business, acquisitions or other purposes. Without dividends, the trading price of our shares must appreciate for investors to realize a gain on their investment.30, 2023.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Repurchases

In the second quarter of fiscal year ~~2023,~~2024, the following approved share repurchase ~~program was~~programs were in place (in thousands):


Share Repurchase Program	Share Repurchase Program	Shares Approved	Approved Amounts (1)		Share Repurchase Program	Shares Approved	Approved Amounts
May 2020(1)	May 2020(1)	17,311	$	1,500,000	May 2020(1)	17,311	$	1,500,000
July 2023 (2)					July 2023 (2)	17,311	$	1,000,000

(1)The 2020 share repurchase program expired on July 27, 2023. See Note 11 to the condensed consolidated financial statements for further information.

(2) In ~~July 2022,~~June 2023, our Board of Directors approved ~~an increase of~~ ~~$500 million~~ ~~to the 2020~~a new, three-year share repurchase ~~program, to an aggregate amount of up to~~ ~~$1.5 billion~~.program. The Swiss Takeover Board approved ~~this increase~~the 2023 share repurchase program in July 2023 and itthe program became effective on ~~August 19, 2022.~~July 28, 2023. See Note 11 to the condensed consolidated financial statements for further information.

AsTable of ~~December 31, 2022~~Contents, ~~$596.3 million was available for repurchase under the 2020 repurchase program. The 2020 share repurchase program is expected to remain in effect for a period of three years through July 27, 2023.~~

The following table presents certain information related to purchases made by Logitech of its equity securities under the 2020 and 2023 share repurchase ~~program~~programs (in thousands, except per share amounts):


		Total Number of Shares Repurchased		Weighted Average Price Paid Per Share				Remaining Amount that May Yet Be Repurchased under the Program			Total Number of Shares Repurchased			Weighted Average Price Paid Per Share					Remaining Amount that May Yet Be Repurchased under the Programs (1)
During the three months ended December 31, 2022			CHF (LOGN)		USD (LOGI)
During the three months ended September 30, 2023										During the three months ended September 30, 2023			Total Number of Shares Repurchased		CHF (LOGN)			USD (LOGI)			Remaining Amount that May Yet Be Repurchased under the Programs (1)
Month 1	Month 1											Month 1
October 1, 2022 to October 28, 2022
July 1, 2023 to July 28, 2023										July 1, 2023 to July 28, 2023
SIX	SIX	898		45.14		N/A		$	645,479	SIX	1,034		(2)	54.01		N/A			$	1,000,000

Nasdaq										Nasdaq	—			N/A		$	—		1,000,000
Month 2	Month 2									Month 2
October 29, 2022 to November 25, 2022
July 29, 2023 to August 25, 2023										July 29, 2023 to August 25, 2023
SIX	SIX	359		53.12		N/A		625,897		SIX	—			—		N/A			1,000,000
Nasdaq	Nasdaq	13		N/A		$	60.11	625,097		Nasdaq	—			N/A		$	—		1,000,000
Month 3	Month 3									Month 3
November 26, 2022 to December 30, 2022
August 26, 2023 to September 29, 2023										August 26, 2023 to September 29, 2023
SIX	SIX	468		56.55		N/A		596,736		SIX	861		(3)	63.37		N/A			940,000
Nasdaq	Nasdaq	8		N/A		60.17		596,277		Nasdaq	—			N/A		$	—		940,000
		1,746		49.97		$	51.53	$	596,277		1,895			58.26					$	940,000

(1) The 2020 share repurchase program expired on July 27, 2023. The 2023 share repurchase program became effective on July 28, 2023.

(2) Shares repurchased on the ordinary trading line under the 2020 share repurchase program to support equity incentive plans or potential acquisitions.

(3) Shares repurchased on the second trading line for cancellation under the 2023 share repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

~~None.~~Securities Trading Plans of Directors and Executive Officers

During the second quarter of fiscal year 2024, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

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ITEM 6. EXHIBITS

Exhibit Index


Exhibit No.		Description

3.1		A me nded A rticles of Inc orporation

3.2		Amended Organizational Regulations

10.1	**	E mp loy ment Agreement between Logitech , Inc. and Guy Gecht, Interim CE O

31.1		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1	*	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.

101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Definition Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* This exhibit is furnished herewith, but not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.

** Indicates management compensatory plan, contract or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


									LOGITECH INTERNATIONAL S.A.


~~January~~October 26, 2023									/s/ ~~Bracken Darrell~~Guy Gecht
Date									~~Bracken Darrell~~Guy Gecht
									~~President and~~Interim Chief Executive Officer



~~January~~October 26, 2023									/s/ ~~Nate Olmstead~~Charles Boynton
Date									~~Nate Olmstead~~Charles Boynton
									Chief Financial Officer

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