LOGI - Earnings call transcript Q4 2018 | Logitech International S.A.

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Operator

Good morning. My name is Sharon, and I will be your conference operator today. At this time, I would like to welcome everyone to the Logitech Fourth Quarter 2018 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator of you Head conference. begin Investor Lu, may Relations, your Ben

Ben Lu

full The website, you. conference and of for call page financial and Logitech to slides, Relations the the Investor are year to quarter Thank a the this company’s as call well Welcome live prepared release, press our discuss logitech.com. as the fourth available our fiscal remarks at XXXX. webcast of results online

today’s from measures used with superior for a as involve GAAP results. financial forward-looking statements should may our the under respect statements statements course the will meant including of Act forward-looking to During consolidated results to non-GAAP reporting or be or of new noted forward-looking that the company made otherwise. Logitech’s XXXX. statements SEC. otherwise Reform you with Non-GAAP except risks differ result isolation of call The substitute of with we future could only being quarterly accordance in Non-GAAP results revise make results have call, are Harbor as and considered operating no GAAP. Securities to a Litigation The and with or materially limitations statements conjunction include inherent results financial a this or obligation to are however, Safe Please the any in undertakes be understand reported better in and non-GAAP forward-looking is help in noted. update as provided to as basis, and business; uncertainties that prepared not note actual developments our other filings on

are the listeners Investor and We and and provide and in currency. recorded Logitech the a Our our posted call review on noted between items. numbers This constant press non-GAAP page Unless encourage for these Investor periods Relations replay being comparisons are Relations otherwise, be of release reconciliation is between will year-over-year on available slides GAAP website. website. to and

Financial now Joining Officer California the I’ll over Officer. call President Bracken Chief Palette, are from today Darrell, and turn Executive Bracken. us Chief and Vincent to

Bracken Darrell

thanks grew joining another Thanks, all of to X second We sales great profits XX%. across and our Ben, our of Logitech markets. you and growth. up all double-digit year us. XX% year up X straight regions of That’s delivered all and with for solidly

You’ll remember create investments power of continued XX%. the the performance It and portfolio built. last we capabilities multi-brand, year capabilities, we’ve were up that our the model. resilience demonstrates reflects diverse to also multi-category exciting, This our in

peer briefly flow starting market, you software are: leveraging any letting than per ratio to to more by with we’re hardware rapidly; online our product we’re expanding on manufacturing our keep not and in record go-to-market marketing, we awards the would categories more operations, procurement sales call model. continues time XX%-plus; had our design for what building capabilities which and grow and every Just those inside/outside won and engineering, especially this dollar especially we’ve year we’re online we and our and to operations, we up influencers; manufacturing Collaboration, channels, broke design, go see Video work to remind through engineering; in all

visible standards cost accustomed than product example, at didn’t company, this lot, and in on to we’re the experience a that our QX. very year, of That people’s in our of launched us it aspire perspective. XXXX We it surely financial year perspective, good. was fiscal year, good. most were the many Americas, too shipped a We be yes, and well for our but spaces move We lower distribution products execute to. means We from was simply and from made just X don’t So, in a results especially center view good new mistakes. probably user very not we’re

us, Of these no though and brought products the technologies their were is technically that lot we we’ve to less excuse. up course, challenging I And new a them back standards. our simply great. bottom line that’s on left since to than table. launching The launches, hate

was While year the great people, are was better be most and can standards. our of it own the by a that and we’ll it by do standards in we than that, better We future. pledge not I

results. me our go let through Now,

new lot it what you in Gaming, must weren’t Collaboration. all growing First, Growth I eSports be delivered let this I’ve past was exciting Europe to as especially the exciting if rising like growth – specifically, became in the into Video the year. me and early was up upgrades apologize with driving market gaining what in of be it but business in XXXX $X.X was XXXXs Gaming and must Gaming secular the improving and PUBG NFL by share gaming-dedicated in The the continues – that market as year than the XXXXs Europeans, XX% new billion, rise original sales We actually to games fiscal of Fortnite highlight businesses, all as two MBA peripherals. year and U.S., although enough, gamers delivering like powerful gaming and profitability. to another and broad-based, Gaming This regions blockbuster And unabated. I a here results. was. was and larger X lived or general, mouse this computer lines the in product are like grew bringing

QX, Video grew acquisition, X with to help newest our another points a Collaboration video, our The results an growth strong with was lower-cost, peripherals world XX XXXX. pointing for sales growth in delivering adoption. X virtually business potential contributor long from million webcams, is time our rise, Video simply overall the first of and represented office product and sales that solutions. sales stable of XX% embracing here of and ASTRO increasingly approximately year has the come PC a an $XXX reached the points and and ago, Gaming, cloud-based Our way devices, plans. Companies gaming the world’s above tremendous. years open growth. companies quarterly keyboards to are rate moving ever. sales annualized floor we’ll year X highest-ever around run This in on nothing meetings with grew fiscal We QX. drive lines, sales and are accelerating all X% our want

this to group opposite. While smaller that Quite does should progressively the going forward, innovating going a this of not we’re aggressively. our portfolio be part mean stop

Whether come new, new iPad this like grew than what tablet that years our about during other X also Sales a we it’s or year were ever market, us channels, can to few the flows our We’re fund opportunities, XX% I’m see technical family about my coming provides first our Craft for latest more mice gotten in outlook the leverage products, only this also later years growth and and recovery gives excited and these not Tablet exciting education this do to and and year keyboard, but cash solid other excited business profits exciting from of next MX capabilities over here initiatives MX again. ago in market. premium the tablet flagship The the they’ve innovate. to our stable we go-to-market markets. and the to Other million. across innovative Accessories trackballs has $XXX & of here, categories.

at full but in reset this Moving QX. Analyst suggested in year, were We’d in down to expected as XX% Mobile and Speakers, for X% we Investor sales QX March. the our were up Day

with If and QX recall, speakers. you launch coinciding X MEGABLAST sales new Speaker up BLAST were of our Mobile XX%, the our holiday voice-enabled

That to the our was will and the We similar sales our you reset speakers for yet the MEGABLAST of XX% QX similar that after slower year, BLAST and QX, holidays, QX QX market in anticipation one year we’re the facing voice-enabled voice-enabled strong this XXXX. growth. remember third-party, in gained we has in traction. Today, of but fiscal down market a Some back speakers over experienced not we drove dynamics. launched of

continued continue QX the and multi-speaker prepare to includes happens, channel counting We opportunity to inventory. continuing and features Spotify-over-voice zone. are speakers decline here remain We’ll Though carve the our market sweet grow But place few the of BLAST about if personal over our our expect for QX next the market releasing were to overall decline we year recent assistant-enabled with be business. about third-party, sales are over to and Audio, also cautious wireless to double-digit relying in took Wi-Fi, mobile the groupings in but coming on year, very in speaker growth our will personal market the take Jaybird price the and there’s in and that. beyond that market and MEGABLAST the for QX, it flat in for now, niche. and MEGABLAST support channel believe announcements excited PC the for we’re aren’t years, we taking the offsetting innovate X% The our a own big but further soon. Wearable and player we global We speakers on off big much desktop spot. of about BLAST new cool a opportunities a realignment speakers, inventory realign we earbud like out on assistant-enabled will to hit & in awaited regularly continue

And of in owing legacy posted and Our XX%, into our a our products that, offsets Vincent the financial let through our key integration business. call sales Google universal full of the Smart robust Assistant year with decline to turn over you Alexa family walk group Hub to of Home to remote growth largely Harmony metrics. me that

Vincent Palette

U.S. increased businesses, to XX% of our a We grew for The in XXXX growth $XXX in acquired performance growth grew strong XXXX. billion. $X.XX Bracken. product Jaybird, delivered on long-term XXXX, our track Sales record financial of our a operating all across fiscal now fiscal across basis, a reached numbers, broad-based ASTRO, was in was XX% Thanks, Saitek dollar to Non-GAAP level constant non-GAAP year. and fiscal better the categories, than regions, to and currency, strong expected $X.X on year our well XX% sales year and EPS year digits On million. plan. double income top

QX, XX%. from the margin up at XX% midpoint fiscal year, recovered and the gross Finally, our cash to target expected, for XX.X% XX%. flow XX.X%, to operations $XXX essentially million, In margin gross reached as range was our of of

adjusted basis Bracken by The changing, materially process our mobile that speakers that as fiscal new and our center Bluetooth line XX issues points. voice-enabled and away from the gross the BLAST products whole speakers experience mentioned, impacted was year full QX, In and walked of upgrades. our margin we’ve valuable pricing approximately quarter we position better distribution results of resolved well of impacted speakers as As definitely prior we XXXX’s learnings. with ahead also to our BOOM

benefits it comes with readjustments, metric gross with economies past, investment very is programs, such to to pricing our currency. over number range the As the to the as drive scale in towards manage free gross the margin capacity. and coming of and of margin and When of from long-term business we high to in assess our internally you we health end portfolio headwinds shared time we one our even balance gross cost-saving opportunity margin, up business. confident the I’m continue will that

operating of and to sales growth top to million, non-GAAP gross want U.S. our pursue. Our continuing in we capture expenses year increases demonstrates line ASTRO, This invest to X% to fiscal $XXX opportunities both the while XXXX balancing to with operating discipline leverage dollars. XX% XX% in excluding through driving growth in our profit increased spend compared

to optimize look execution infrastructure approach selling more Our spend, in invest improve creating simple: pretty to our is and continuously products. we

the Our top our expense marketing sales R&D year, was line growth support in while XX% the X%. strong up to increased and spending

we into X% and year. million, the profit the should accurate, of and to up another improved not XXXX, other sales expected learnings. generated of of down profit I going sales was strong team to half I full year about it and record about XX% capital investing and working our prior on from ops EPS spending growth is eight while years front, say more metrics we our an year that the or our major the that growing. that profit $XXX low And hand, absorbing profit It’s working we the introductions. cash having We all growth. achieved delivered We of $X.XX in several as G&A On operating the percent excitingly, more the keep growth. be for it’s sales But cost Internally, for invested to first We annual and sales, in cash future better full in fiscal grew our than year drove basis. of capital reminding profit, product as X.X% a achieved level flows from on ahead year. highest QX G&A after XX% at delivered

Our the inventory down as last our from transformation. started cash we the year, since XX days was conversion XX days we for best year, turns cycle achieved

shareholders we and $XXX year During buyback, have summary, million year of returned form we sheet including we to a year, with the and $XXX we and very exiting dividend exited in are in the are feel balance million going XXXX, XXXX. very good In year about another we cash. FY great to the confident fiscal the momentum in strong

are XXXX. I’ll to pass well And EPS on track it $X to We you. target FY of back with Bracken, our that, by

Bracken Darrell

especially quotation biggest good. "success" times the Vincent. this After risk put Thanks, of of to the to can progressive is course, years seem marks – in we take be – five and the many, I since in eyes stay

we’re just years, started, past, a the next look change. expect with so getting the fresh started just in time, said getting I’ve and five we’re this on As

reviewing us, We with across objectively today, and opportunities take digits growth to confirming Expect growth questions. to income And operating ahead currency of gave realigning our fiscal in million We’re play are just for to March, I and happy that, constant to reallocating, us sales to entire outlook us the $XXX we’re drive the of business. how transform $XXX single non-GAAP and offense. and in again. year of Expect Vincent high XXXX million. rethinking

Operator

question first UBS. Joern Your Instructions] from [Operator with Iffert comes

line Your open. is

Joern Iffert

am taking Yes, in for I my hi. thanks question.

And speaker. and please but approach, in was there XX%. us employed be strategy mean, was going going share are whatwas also years still sales last much just QX? I the opportunities Can please because on I into per an Second be around third would up. across with what on the And impressive productivity. sell-through one distribution with on sales first you growth the the increase would be you are XXXX. wireless question roughly Collaboration. the Video eight own you curious in [indiscernible] question have employee The not on really mean, the that’s would if satisfied or mean, ticking now sales you direct people and XXXX, seven of and I more

increases much. and your do are or getting now sales think see still bigger, As per you bigger benchmark you’re company? for productivity over Thanks if room do you significant that these very increases you employee,

Bracken Darrell

Okay.

share and Let and question Video Collaboration will the me I two. take next next the Vince then kind of

investing first in systematically sales the all, more of out So we in are resources yes, markets.

innovation engineering systematically – We’re some of also our investing in some more exciting resources inside. We’ve got got underway. we’ve

meant what very whether both by to not those get kind investing. good, they’re look people you direct returns the it’s we we making the resources mixture – a – And use and so that far, the potential returns getting the salespeople a you I’m the on going to of on directly on sure – return. ground, sure interacting or those right keep investment selling distribution with not to is as the whether networks to product market; have of of really users we’re the call it, we’re

was for Our be and this first just topped very growth XX% growth strong, the $XXX the continues and mark we’re that quarter. to time, We expanding so around our the world. rate million

feel resources very we rate, and the our growth making. about growth in So we’re our investment approach good

Scott Reasoner

still as as growth, and FY we to that lower lower can. to a similar basis, exited market global in obviously gain mid-single positive it expected Europe try share EMR, It growth, we’ll very we in then in market. our mid business sell- and that XXXX situation clarify want speakers lower-growth see market that year the Overall slightly we us for much single-digit in faced This digits. we also as what negative of was front be but prepared single-digit growth, can as in and mobile to QX was on and XXXX, to with for speakers. to be AP. you on through prepared double-digit mobile And Quickly drive, positive where is we high in

Bracken Darrell

And was… one last

Scott Reasoner

on And productivity, for then company a you around had probably question the efficiency? think, I

Bracken Darrell

Yes. employee. Productivity per

Scott Reasoner

I correctly. if understand Yes,

taking more from market dynamics be dropping our one spend seen low our process, a to want. as a an you’ve perspective, continue if areas, try constantly We we in as Joern, investment at to so example in look different risks. not see look, adjust efficient you G&A – to the only I to talk infrastructure We So and productivity many experimenting, but and continuous now to new about it’s X.X%. a – record

think think better, can and top drive, our output, the even of absorbing R&D I we reviews sales better R&D, get trying you I want. into marketing, efficiencies if then to do in so bigger And there, reinvest program, we here. of the I it’s think effort, growth continue a or line we to and lot our growing those constant a but, ROI meaning without

Bracken Darrell

you’re OpEx Well, – I and an we sure of are the keep to right what’s make to an asking think think interesting the on you here. mix make question, realize we the in experimenting growth investments going potential I

Joern Iffert

Thanks right. just year versus XXXX this you’re follow-up What’s one. year the number a maybe headcount roughly XXXX? planning for All And for fiscal fiscal this. on increase

Bracken Darrell

– share normally targets don’t We increase headcount or

Scott Reasoner

have not we’re but interesting more the or headcount in to moving And some headcount. areas, headcount one an going from we’re less also, other. is location metric, forecast. to We No, may

We the also manage spend.

things So our year, line year go increased there’s that this into OpEx fiscal in that. many increase. – in with we’ve headcount In different our

Bracken Darrell

we’ve be in is would I responsible as Yes, to the and past. we’re going say what on been OpEx

to can you in been past, regardless – or and would we’ve we continue we where not think what very responsible disciplined disciplined. say expect very us and headcount, of be I the to about publicly

Joern Iffert

Thanks very much.

Bracken Darrell

Thank you.

Operator

Merchant from comes Asiya Citigroup. from question Next

line is open. Your

Scott Reasoner

Asiya. Hi

Bracken Darrell

can’t hear least maybe you’re think we muted you. I or at

Asiya Merchant

hear can I muted? hear I you? – I can Am

Bracken Darrell

go. yes. you yes, there Ah, Yes,

Now Perfect. we can you. hear

Asiya Merchant

Oh, Great was congratulations, results. I saying.

Bracken Darrell

Thank you.

Asiya Merchant

Quickly the use on cash. of

ending there market kind have we expectations You’re How from a plans I of on that into current of generation. year-end to share think should perspective? EPS flow the What’s product Obviously, through mean, buyback around pretty And execute baked XXXX? your sitting about significant cap. into $X follow-up. was a remaining buyback I count cash on X%/XX% cash then XXXX? your your is impressive, share

Scott Reasoner

Yes.

me Let address quickly that.

And our – Jaybird believe of a the a when little to framework that year you as supported double-digit, an that’s allocation by have bit is, we’ve value or the footprint a we ASTRO, reminder, shared into cash seen then about right? acquisition. growing just Saitek, create and with performance board that use recipe shared take all Capital that performance we can and approved good So our and ingredients we’ve first, for we we of and that. asset, you’ve

effort, and active you been. targets, in primary as our as know, always that’s So at we’re looking we’ve very

The one dividend. the and policy is second dividends, a we into growing changed

we’ll when give but next our opportunistic is So the proxy the the dividend for second And strategy. we indication then is June/July, the publish then dividend, in one growing buyback. third

to program We back. buy have market, opportunistic, expect We should so $XXX there to this million so We happens bought back. is to us left. year, million do There buy what continue depending have rate, is and and $XXX the with million there $XX open. to a you certain on we continue expect run a

share count, the things flat of terms is $X one different many, assumption share share price, dilution. assumption the is option There’s that assumed count. exercise, into the them, the In for count of many the buyback but course, EPS, different share the and used of we overall the dynamic, many the go flat

Asiya Merchant

Bracken, disappointment expressing side, your launches mean, on some Okay. Great. product then you’re product year. And about with talking this I the

XXXX? product sharing obviously, think launches and half, more we are product cadence of first going the Video Gaming second this Obviously, how news should into Is and areas without, of loaded? – half So Collaboration stuff, about focus.

portfolio, how categories? can be provide the thinking continue of some to So about you’re what product other Should about would – expect that kind there? Thank great. you. If you us recurring we with with launches just

Bracken Darrell

Sure, Sure, absolutely. sure.

anything But what for guarded very ever you to it, we’re when the on basically now sure: so always company, we’re hesitant doing, of everything we’re So release so thing innovation doing a reasons doing early know that everybody product market. the on is for who right know. very we’re and side all bring one you touches and next And we’re on to working generation we the that what that’s doing. product we’re can we’re

more excited I to the the a categories, really And we’ve can’t last so I I’m similar out be got than But year, the to level will of of and year game. super cool our coming think keep this think except afraid products very but a upping it. across we’ve about cadence – year set we I got – say that kind say throughout and our I’m

Asiya Merchant

And you million that $XXX focus that that’s continued $XX little set something I how kind million? to at for a gave aside. that of about, It’s serves memory had million of the guidance baked would you Analyst investment dollars Is kind your if OpEx with bit You into Day my $XXX balance guys me of about on think, correctly. talked that reduction? you

money I investment – investors that dollars? new how investment about is about – set do can the would you of in you just expect of is you’re to that kind invest that or aside So acquisition that think that should for integration or kind products talking how

Bracken Darrell

let chime chomping see let the at I too Vincent bit. answer that, in Well, going me and because can to I’m he’s then

at we doing So And we Vincent, so today, end and in experience keep anything? so we’re will. we company, keep assumptions, most into you when will an the side that, in and we want keep see the thing do we’re time, going in product add our – And to are to go-to-market our opportunities is assumes of going should March, in doing increasing important – that. the What to we we’re we it’s be. to the guiding thing where we’re the where investing do investing. it engineering, and a continue most – can to to guided we’re we we’re and going products what more, is really important investment you be and have day, because, all or expect going the it built and

Scott Reasoner

in And going direct force to right? to Video in sales our I projects selling, for online What FY R&D a what XXXX, kind back we roadmap want to March, wanted to There’s see or of definitely have have. specific a that areas accelerate: capabilities increasing room more said Collaboration, and we three-year if of XXXX we our the Yes. new in we going FY in we say increase we to to you we investment At accelerate look able to we our are we gross as EPS referred point discussed at result. the that’s go. when $X a line so But That’s margin we’ll increase, definitely in it, gross in we and since you it’s a as growth, plan objective. will increase reinvest margin balancing as how top roadmap, this to the March sustain our go. act time, as

Bracken Darrell

look are the feel how it. much the about working think people and that world that insight we call money have, and Can analysts understanding this to on level about of the pretty about how think to the in a the these coming working I and I of operating from investors it’s a especially way innovative We teams not focused you we how spend. coming on in amount need exactly lot we’re – easy the are at who spend company. if I way logical built a how to innovation numbers-oriented add think we on I all are small It’s new things. drive thing? on much and one that’s truth a is of from The teams other big a with It’s very the about drive. – – have with insight something thing. it’s very much things And technology the be most right you And create innovation much now,

operating teams each on is in to we’re distributed on that something trying working and a difference. make – one a So very small hungry and that’s working are

Asiya Merchant

you. Thank Great.

Bracken Darrell

you. Thank

Operator

from ZKB. comes question from Muller Your next Andreas

open is line Your

Bracken Darrell

Andreas. Hi,

Andreas Muller

level Yes, you historic Hi least. on the have year, that a to Thanks good perspective point I at my or demand? question very taking the a the morning. at are a are pickup for everybody. satisfy comfortable a of inventories question. on low in that this How current demand on

Scott Reasoner

our if not own that’s So what assuming talking you’re I’m you’re about about. inventory, talking

If sell-in, weeks hand would and flat inventory, our you’ve on our a target basis. as but range within you’re somewhat I on slightly talking seen, our down sell-through is was about channel overall but bigger year-over-year than say

So when at high then all and comes by projected go, the as adjust a region, on it so inventory and that’s it. year to a digits, feel it’s growth, of channel all monitor channel future we inventory, by our now of category, assumption with right well-positioned for question and we’ll single that course that we

Bracken Darrell

also our referring he’s think I inventory. own to

Scott Reasoner

It’s that finished If front. own very you at we are where refer to we This in gains process, we year on comfortable Last we our million. with efficiency inventory, $XXX year I definitely think $XXX million. are that somewhat feel in but line.

Andreas Muller

that the the kind indicated in I be And going sell-through was could to going think of are more in that sell-in EMEA, you sell-through. that’s call more sell-ins be that last line to with similar, and Okay. the confirm in this then quarter?

Scott Reasoner

We quarter, don’t one seen the up, and and as business level way want, progress through time, start don’t think the in align that want sell-in sell-in will want, you the should point at get sell-through you’ve correction forecasting, we you year. be. it higher yes, the region, but if of if but, that nor by in to and than by the I we we’ll quarter it sell-through EMEA, drive

Andreas Muller

net from the All center right. And quarter? what bit and a dissect What you distribution in the was remaining gross the could the development. impact was this U.S. impact the gross margin and currency

Scott Reasoner

Yes.

point, currency a to we currencies more the hedging impact, if one, is basis offset QX. QX but the half somewhat playing, gain and gross currency So currency we be about have of by right, XX the of main other quarter-over-quarter, slightly points precise, course euro to up as moved

offset the $X.XX was quarter hedging. by impact, last so if quarter, you there $X.XX partially this average euro and a move So to from take progressive

QX, were In which QX, terms we in January we closed it impacted of the impacted and it immaterially issue done. DC so

nothing our perspective, really and or then protection in have QX. for we that QX BLAST XX points to from So basis margin. MEGABLAST our price of And I price XX impacting discussed, as realignment about speakers,

Andreas Muller

much. Thank Okay. you, very

Bracken Darrell

Thank you.

Operator

Baruah question ahead. comes Loop Capital. from Ananda next go Please Your from

line open. is Your

Ananda Baruah

are How the at on lot rate and Thanks the intermediate-term another want another are taking Analyst Vincent, you that congratulations from growth you? Hi, sure solid on Day? questions, cut don’t slide guys. the for a quarter. you

Scott Reasoner

understand. didn’t Sorry? I

Ananda Baruah

growth sure Day the couple you you rate me if slides? from a Analyst Are the from wouldn’t could. Hey, like intermediate-term over do a I on

The first is think, you gaming, a of on, I a just a growth you XX% just compare, to I sort back up compare. low high-teens mid-XXs and on the think up XX% quarter last put put going

So softer it to for building, so love Thanks regions, certainly of follow-ups. what to And it’s have like and look the building sort we but looking this is sort you then I what signposts could growth? kind try to be momentum of across growth are there’s I’d off compares, what so are know – also you seem – broad was is helpful a – as does as? and guys what the momentum couple what at of products gain across for That you out continues as turn – guys us gauge do at of

Bracken Darrell

think million, is of is we’re going very market big Today and and you data and all games are people measure, Ananda, – we growth clear over an looking very new what’s a second eye how year and it China, what impact. a on so in It’s continues business. super- professional then the way, I they thing does And grow. think of – and has gaming pretty YouTube familiar really and was market we’re so more sign business some interesting keep on the and – the seeing happening we’re – of with growing was that Well happening. Fornite share high But had were forming, rates familiar seeing big in that, U.S., we’re almost what’s PUBG, new Well, playing growth obviously, and million is is this Twitch and exciting. we’re a it’s real sports the growing. you market this what me, – guess you on well, on games, get we’re world. a That’s then so because trickle-down look one I with are several it really new, it. this example, new very think for indirect and I if for indirect we both the watching those of measures, relatively having but it and these ago. viewership. the others, better data, pretty overall, just with share some of then, that performing franchises, $XXX things also years is coming familiar obviously, here. coming really One remind are are And each and and markets, and how doing doing saw effect than into in we’re upgrades the within have better well. And to our we’re online, people at. most we’re many places, terms are rates finally, There when equipment, wanting X one a me. I about It that – $XXX not excuse pretty it’s

Ananda Baruah

you begin it early that days I very here, suggest to that truly analogy that would potential-wise. Bracken, if is of And, it’s days. that really, would mean, early sort believe very applicable that suggest

Bracken Darrell

teams just the you ABA, it, it me. fortune is could as year, buy-in had creation call which to Overwatch restructuring is not the Global the – – last year, just recreation this $XX was to baseball to of know. Legends days. not – franchise. at of as you look Maybe which on depends teller, same apiece thing. you but I’m formed and I will and It League League, how think the or of as either Well, the Last the basketball – professional of I on others is very obvious you I think mean, a paying early a is the it’s the don’t League, or buy to create it of million now

at place. teams got million now you’ve $XX permanent and We’re buy-ins, in

city-based for got to – I in XX people going to feels called down to which adolescents adults now city are draw and and targeted and around U.S. XX lots you age churn about that video meaning experimentation are XXs. that in This a when right, and are games. seen Basketball the trends. a is playing, NBA games have a saw by anything younger almost that those XX and at to line city teams. You’ve and teams people XX, chart Super and thing There’s XX, kids feeder the and percentage is get but forming XX going are League League, the starts very in ABA and me, play except are a and XX, get early it’s you don’t see to that you of people it chart, always people It come and XXs example, and period back the and secular shows and to some and into Continental the of out it, of flat go to what older I

early. think I super So it’s

Ananda Baruah

same then That’s device of very The I helpful. The obviously sort keyboard pointing same question And question That’s compares guess portfolio. sort are compares. of helpful. the were with healthy and numbers strong. Thanks.

one so off pretty through strong the what catalysts quarter Thanks. quickly could I you of then were compares? walk the especially you quick believe And coming just healthy have more to one. And guys

Bracken Darrell

good we’re are we not or to it’s have think have our to do as a play. we well execution’s and there. we I do can Well, ball this When stretch, is in well. to a at going innovation good, good not in case, say we’re court the not as When lull execution,

all a looking it, something and open I’m glass to that changing has what desk us that’s out – here of on create up through single it’s have, wall so computer at number we office the worth the to so every a And space you have you to up better said to I QX, for. us it’s momentum This And still those year. so launched we had innovate. Ergo we relatively a products, decent we trackball. niche and had year, said, were launched in as We Craft the the keyboard.

We’ve So to got keep I’d say, innovating. stay tuned.

Ananda Baruah

then the one from Okay. me. Great. And just last

some in areas? went You prominent see prepared Could the starting you of made just the flow through. to software you’re to more through kind work sure I’m speak the you that mention maybe of remarks you’re Analyst at from calling Analyst was Day, there but really so that’s out, the Thanks. helpful. that just be would the Day, much it absorb at that this me. it that to And now

Bracken Darrell

it imply a what I’m always we would can I going business group, say of we’d now ourselves but we’ve can that the might for software so software in and all rather people we of too until it UI easy that – really on UX wary in them. because every use, in sharing Jaybird much working people We’ve that launch, of the software is example, you a with way the users app. things head I running in, for it’s somebody have creation where Circle and to of got keep and integration the we’re see app that to so got or of

it’s realize two. not and expect to doing to we’re out we’re of a can long way an really really so what’s out broad. one it’s So learning. exciting more category still all I really And we’re have can say learning and or learning a just go It’s lot We we’re That’s there, and except just very us. and area. you there, potentially

Ananda Baruah

helpful. very That’s

Thanks appreciate lot. a I Okay. it. Congrats.

Bracken Darrell

you. Thank

Operator

with question Foeth ahead. go Next Vontobel. from comes Please Michael

line Your open. is

Michael Foeth

Okay. Thank you.

on an Jaybird. just So update

Jaybird? that mentioned are distribution you geographic I us for about shift can the valid maybe you. what the the driving and do sort also then in feel trends growth, growth what QX. also for And you of is how there, trend was for You the double-digit year. just repositioning share channels was Thank or wondering with if if

Bracken Darrell

labor really because everything, is to continued this go positioning I an we distance the train. secular, Salt home category. in park and we’re to building and people lab and side the now believe and now from it’s the brand of the wireless in a and on have We Team in to there strong and – We’ve it’s for runners, in right even really mountain run. a is City the a us performance – potential rise both affordable, of is where be earphones Jaybird but to out a got all can smaller apologize. that of itself. of project believe walk City this ultra-distance This door, U.S. much kind also training people myself. we of of for Well, that, a headquarters and space that back them I of exciting help Jaybird narrow kind and love lot and We’ve our might – in we experience Olympic moved labor those industrial love. We Park I a can’t Lake cooler, of think of for more help you it’s the the

and to in potential really So us will path we’re take probably it. think we’re the a excited years I long-term here, a about here really And realize. few

we’re I are sure early – to working I is brand brick, it’s should seasonally part it coming going a quarter so but I for think but is companies, which running step, was phenomenal. mean, that you have to on have – or super by exactly love that I to overall products about days, got where and it it. going think there, systematically, was the great our the it’s we’ve Jaybird name want brand this that QX say of about from weak weaker the excited and QX, for now. to them come. build by is too. would business, versus are it’s won’t running really you’d I for plan, us we And I’m going we’re team excited step it. a coming brick business

Michael Foeth

idea us what give of adoption the to an looks just like. geographically, And

Bracken Darrell

Yes.

to than prove because scope geographic far fairly so We’re want our we expand prove. and rather limited to and try expand in

still we’re a in extent, limited couple U.S. lots more it’s mostly to and, very Asia. a a of ones European in countries and top So business, the of markets,

Australia. in certainly We’re

Japan. We’re in

slowly expand step. we’ll step by this So

Michael Foeth

Okay, thanks a lot.

Operator

comes ahead your question is from Davidson. open. go line Next Tom D.A. Forte Please with

Tom Forte

about know lot I on gaming I you’ve two call, talked related had but So this a questions.

Fortnite, rates refresh for mover about gaming ability such needle Logitech? particular, think on we in be should the one And should the how about think So title, as how equipment? we a to then, of

Bracken Darrell

and because near this ask gamer somebody to a be or expected be Yes. alive hearing Fortnite. can’t gaming of not about you kind We and anywhere today

so refresh are, refresh much – about talk be early the you So – of in rates think depending there’s might It refresh. think first on even these all, because categories I about how too rates to

in time. about If to you’re do think because innovations drive more like others, things than hate bigger more but the some trying terms our I to talking portfolio, re-refresh all it to about than really and that of refresh that we are innovation really refreshment fundamental meaning we’re fundamental

think really don’t in game. So I we’re the refresh

trying portfolio, the opportunities, really anywhere. I a say and as have better. we better, in business. significantly would that’s have to would ideally We’re user fast gaming pace say, innovation of very our experience we And I across constantly a create as fast

PUBG over, saw the only we’re but We with to and new players with something this We drive Activision/Blizzard of Fortnite. independent potential standpoint. start really of all with eSports to and And the fun of big. even the created big the of the watch, from are League on, had have kind the watching. definitely PC saw I no you in, to impact, move potential like people and there’s partnership the not intended, to Fortnite, at you gaming no with a of the to pun which Fortnite. players mean, like phenomenon, got that title new that On players the, others, now a now Fortnite, Legends. big. have And magnetic a existing it more create at important, and new seeing PUBG. doubt other it’s have Valve over in an the kind years, you’ve to least I you appeal, pouring that this that League think is we’re Legends and if it impact has And players single It’s are have it’s if they in is it look is and almost, game big come

Overwatch. it with seeing You’re

going So it’s will be I very more. there more. It’s broad, come. There’ll and think to be

Tom Forte

thanks Great, questions. for taking my

Operator

Next open. question Paul ahead your Coster from Morgan. Please line is from go comes J.P.

Paul Coster

doing? Vincent. well doing my and are Bracken Well, you impression. Hey, How is

quick PC, pointing back going one and a devices keyboards to Just again.

well when and both installed base and So do well the buying there, huge when PCs seem PCs. very years. people those And moment, success how one’s to learned wondering new or buying wondering seem to very Dell from just I’m over a in also I’m categories. you no you X you this do we’ve Clearly what at out HP are well very because and all your the doing associate X sales last of with are there’s those

Bracken Darrell

And great then a a discussion pretty it’s Yes, rates. around was started first for early question. When – that the on. was went all I PC here, growth light us on

about don’t we Why There’s pretty think PC every to wait they and we worried moving, stable. seem a are minute. almost usage growth said, actually a rates are I rates? and be desk the PC on

So yes.

about or on X rate. and the know So PCs rates we’re getting I to bringing more think business really than PCs our people rate a innovation well PC That the said, probably sales that where not it PC or we growth our that, business impact of is is is because much growth much as we’re driven sales because new much it ago of attach market as could. have sales as the I driving quality of we think – by driven by years X out more – as much X of not or XX might as probably our

So we’re areas I would enough. executing say not that’s one of the well

big sides, Paul, the In end, installed barely matter but point, your dent to opportunity, no put are, an effect much base the how have do they bigger base. PC we think I your really. in sales so installed And on is just the a will both

Paul Coster

your one management is to that this which planning one you’ve in years, question, a next good you we Talk company the the business would model, which I X about do a little of to demonstrated us is, in how unfair, times. next think, respond bit then during horizon. event recession but excellent little think, other And see a your

Bracken Darrell

to you unfair always it’s don’t say as it’s hard said, an very think predict, it’s I’d I question. but –

we thing think need I think kind of to the do it’s about.

the that about communication, to a have to less nothing’s video had economies incredible more air should it’ll if to probably for to not do where than we’re that probably actually pay and collaboration that. well – mean, a It’ll of air – I business, – a poster is this. an video be video-enable event is good going because communication. categories our are to because but the alternative child we trip categories even recession, Video our going what we’re In that a bad. pretty the company great in a be in want more going collaboration world in you or would more do the where audio think today, – cut we’re in Collaboration people boy, We’re recession proof you is room. said, one and travel; value cost or travel, Video

good. so is the really one event I good one to to good that the that invest market’s a market and goes think And invest a bad the and in if

our thing environment, few So economic to might company. be we’ve if buy you – I think a expensive a categories product, got actually, or could relative most down of you’re like returning best- the way, and by the most most that products inexpensive and our a that’s product

that’s side. the say So I’d on one

small our side, of and years mix products still our have up other they’re because we’re even the average sales affordable, that’s over changed, has stuff the though selling On indulgences. gone prices pretty

to It’s do in predict, would think I you okay recession hard So market. but never a know. we’d

Paul Coster

with this and right? the in circumstance, really interested quite model. more you can cost I is I was I sense a guess business I variable mean, model, flex

Bracken Darrell

up at jump here. I finish to I and I’ll in ready look and then know he’s can Vincent Vincent tell Yes. –

everything trying that you can tell maneuver to we’re year-over-year, and flexible be quarter-over-quarter think I that think. and way do, we we I in and the agile from

point, at like become we the like and become. think started much is want We we be one talked of this have always to credos – want can. want don’t we have, the before, of big flexible we the operate you we and to but I one small-company If aimed I not and you Paul, to more and kind we can that. people We more can’t, company that, to more thought agile, about

We to a way. want resources be to fast one way, one in scale move and up and really scale place to but in we another flexible. be willy-nilly, down agile. to So want fast we and We be when not controlled opportunities, to see a able from smart want

me, time big things everything business we China, clock I’m Every of personally, that in we’re business that amazed bring trying China, and I and China, to more the speed flexibility. China. of One speed into of winning China competitive company very China. the rest in we’re drives and go me, is a in me, And by China to have a inspires around and the the

Paul Coster

Thank you.

Operator

Your Instructions] your head UBS. open. comes next Iffert go line from is with Please Joern question [Operator

Joern Iffert

Thanks for first a the quick question. very one. And

Sorry was said for you was maybe bit Vincent, a little XXXX, speakers This confusing. mobile I X%. sell-through if QX plus right?

Scott Reasoner

mid-single digits. Correct, Yes.

Joern Iffert

okay. Okay,

Okay. So just a dollar that’s so check,

is to organic is, finding of second assume The question it like-for-like the distribution sales channels? and from from your other half sales is half growth, fair that growth, coming new

Bracken Darrell

growth is more our I sales of like-for-like. much number, distribution exact less than new channels say say growth, be would I from would our small relatively of much don’t I don’t so. coming an think but that. a percentage have I’d sales

Joern Iffert

Alright, Thanks that’s much. very helpful.

Operator

the will I the turn over At this time, to presenters. call

Bracken Darrell

much. again, earlier. you. Okay. just And thank I said Thank very Well, you what I’ll repeat

of And not we I is to us the you being owners And think really we of a game leaders the we congratulated on – into I lot company modesty feel and company, you this you really of of as can to could’ve this we the I’m year. false call, as on try us false – the and for think better go done year. and not thank that. our count people like lot improve next a

said, we apply shouldn’t have they’re next this happened, the right we’re Some learning great and, year. of and to as we’re going events, doing year them things did Vincent what into

We’re super excited year. about this

long even here been more We’re the more and term committed. super – excited about never

So lot. a thanks

Scott Reasoner

Thanks.

Operator

This concludes conference call. today’s

You may now disconnect.

Logitech International (LOGI) 3 May 182018 Q4 Earnings call transcript