Logitech International S.A. (LOGI) on Q4 2021 Results - Earnings Call Transcript
Ben Lu: Hi, good morning. Welcome to Logitech’s video call to discuss our financial results for the fourth quarter and full fiscal year 2021. Joining us today are Bracken Darrell, our President and CEO, and Nate Olmstead, our CFO. During this call, we may make forward-looking statements including with respect to future operating results under the Safe Harbor of the Private Securities Litigation Reform Act of 1995. We are making these statements based on our views only as of today. Our actual results could differ materially and we undertake no obligation to update or revise any of these statements. We will also discuss non-GAAP financial results. You can find a reconciliation between non-GAAP and GAAP results and information about our use of non-GAAP measures and factors that could impact our financial results in our press release and our filing with the SEC, including our most recent annual and quarterly reports and subsequent filings. These materials as well as our prepared remarks and slides and webcast of this call are all available at the Investor Relations page of our website. We encourage you to review these materials carefully. Unless noted otherwise, comparisons between periods are year-over-year and in constant currency and sales are net sales. This call is being recorded and will be available for replay on our website. And I'll now turn the call over to Bracken. Bracken P. Darrell: Thank you Ben and thanks to all of you for joining us. I want to start by saying I was worried about India as I could possibly be. In a year or what it has been now this pandemic has raged on I think we have had fears that affected every person on this call and more. But in some ways I was always so worried about India for all the reasons you could imagine and afraid it is happening and I hope and pray that they really get it back under control quickly. And that the rest of the world continues to improve step by step and escape this pandemic. While the pandemic continues to disrupt our daily lives and as I said in some countries it is even getting tragically worse, its -- we are starting to emerge from this strict shelter-in-place requirement here where I am sitting today in California. And actually broadly in the U.S. and we have been thinking, it has got us thinking even more maybe molecularly about what a return to the office might look like as the pandemic subsides. So the behaviors that were formed during the pandemic are clearly in endure . Video callings meteoric rise will not reverse. Most calls are moving permanently to video. A place in your house having one for each person to work or study or do both is here to stay. We all do have places in our home. While gaming was popular long before the pandemic, people are using it more and more for social interaction. Many of us noticed this first during the fortnight from around a few years ago. And this year gaming took on an even bigger step or prominence in our culture. And the number of podcasts, churning videos thank God, streamers and creators continue to grow throughout the pandemic emboldening more and more people to think maybe they could get in that streaming act and create video for other people. None of that is new for our strategy. While our long-term strategy is unchanged our opportunities have changed, they are bigger and they are broader. On top of that we now have a bigger, more profitable base to grow from. Let me briefly give you a few external examples that illustrate the acceleration of the secular trends that affect us. These illustrations might help you see what we see, our current growth. Let’s start with the trend of video everywhere and working from home and office. Citigroup announced that most of its employees will be designated as hybrid workers who will spend at least three days of working in the office and up to two days at home. And that’s just one of many companies that announced similar plans. More and more will follow over the coming weeks and months. In fact even surveys from early in the pandemic showed that companies were beginning to think then about hybrid. CBRE, one of the largest commercial real estate operators in the world noted in a survey last September with 61%, remember this is last September, 61% of companies were already back then planning to offer hybrid work arrangement. I suspect that number is even higher now. And one of the key reasons that companies are going to hybrid work is, well it is obvious to all of you on the call now, because we like it. We who are working at home want it. Nate Olmstead: Okay, thanks Bracken. We finished an excellent year on a high note with our fourth quarter sales more than doubling and with broad based growth across all our categories and geographies. As Bracken said, fiscal 2021 sales reached $5.3 billion, up 74%, which exceeded our recently revised guidance of 63% growth. This represents over 300 million of sales upside compared to that recent guidance. And as Bracken will cover later, we are maintaining our growth rate outlook for FY 2022 and therefore effectively flowing through this FY 2021 revenue upside. Our non-GAAP operating income more than tripled to over 1.27 billion higher than our previous outlook of $1.1 billion. Our fiscal 2021 non-GAAP gross margin reached 44.8%, up over six percentage points from last year. Almost five points of that was due to the lower promotional spending and lower retail point of sale activations. We do expect, however, that these promotions and marketing activities will increase and return to more historical levels in 2022, putting some downward pressure on gross margin in the months ahead. Product mix was favorable this year and we expect it will remain favorable to margin again next year, somewhat offsetting the pressure I just mentioned. But all this means is that our FY 2022 gross margin should land within our recently revised and increased target range of 39% to 44%. Our non-GAAP operating expenses increased 44% in 2021 to $1.1 billion. As our business growth solidified and accelerated, we invested across many areas including hardware and software innovation, go-to-market expansion, and marketing. All of these investments had limited FY 2021 revenue impact, but primed the business for future potential growth. In addition to conventional capabilities, we also invested more deeply in environmental sustainability in our own manufacturing and with all our supply chain partners. These are all areas of strategic importance and where we will continue to invest in the new fiscal year. Finally, you'll notice that our G&A spending increased sequentially in Q4 due to $30 million investment into a charitable donor advised fund to support our long-term social giving strategies for equality and environmental sustainability. The net result of these business dynamics and operating decisions was strong profit growth and operating margin expansion for both Q4 and fiscal 2021 overall and improved capabilities for the longer-term. Bracken P. Darrell: Thanks, you had to wake me up again, it's early here in California. As Nate quantified for everyone earlier we beat our most recent fiscal year 2021 sales guidance by about 300 million, which, of course, we gave back in our Analyst and Investor Day in March. It was not even a month into the fiscal year, I don't think anyone would have faulted us at this point if we had maintained the same sales dollar outlook for fiscal year 2022 that we guided just two months ago. Had we done that it would have meant that our fiscal year 2022 sales forecast today would be down 2% to down 11%, compared to down 5% to up 5% that we guided. But we're not holding to our dollar outlook. We are passing through that sales dollar upside and we are keeping our down 5% to up 5% sales growth outlook for fiscal year 2022 unchanged. Essentially raising the absolute dollar value of our original sales by about 7%. We feel confident and equally excited about what the new year will bring us and even more optimistic about the longer-term growth potential beyond fiscal year 2022. If we hold our top line growth guidance, we're increasing our fiscal year 2022 non-GAAP operating income guidance to 800 million to 850 million versus the prior outlook of 750 million to 800 million. Finally, we also announced our Board approved an increase in our share buyback authorization from $250 million to $1 billion. The Board also proposed a 10% increase in our dividend, which will be voted on by shareholders in September. The bottom line is the same underlying trends that drove our business pre-COVID, significantly accelerated during COVID, and it became much more pervasive and sustainable as we look to life after the shelter at home period of COVID. We have an exciting long-term growth potential ahead from this big base. Now with that Nate and I are ready to take your questions. Ben, can you queue them up? A - Ben Lu: Great. Thanks Bracken. Paul from J.P. Morgan. Your line is now open. Paul Chung: Hey guys, thanks for taking my questions. Bracken P. Darrell: Thank you. Paul Chung: Great quarter. So obviously you've seen this business grow annually at 40% CAGR for the past five years and then this year accelerate 180% in the sixth year. As we look ahead to the next five years, what are some of the growth levers you see today that you can pull in? And Europe was a standout this quarter, what was kind of driving the acceleration there, then I will follow-up? Bracken P. Darrell: Yeah, I would say a couple of things. First of all, Europe. Europe, part of the reason for the delta in our sell in and sell out is probably what’s up in the filling backlog. So we had strong sales there. I would say overall, I think the key drivers over the next five years are going to be the same drivers we've gotten this year, with one big exception, which is I think we took a huge step up this year and the realization that video calling is just a must. We always said it would be video everywhere at some point, but we didn't quite realize that there would be this strong advertising program for video calling that would happen during the pandemic. And it's happened. Now it's really going to be a question of how effectively and efficiently can people video enable offices while they continue to video enable workspaces. And I think that's going to happen over the next 5, 7, 10 years. Nate Olmstead: Paul, I think I'm just adding to that a little bit, and I think the growth slowed -- the growth levers there clearly got the market conditions Bracken's articulated, I think already. But just building out our own portfolio, you see us investing a lot in innovation and a lot of that is focused on just increasing the types of solutions, the effectiveness of the solutions that we can offer customers in video as well as our own go to market capabilities and operational capabilities. These are all things that were areas of investment for us in FY 2021 and as I mentioned, we will continue to invest in FY 2022 and beyond. Paul Chung: Good, great. And then just on marketing, how are you tracking that return on that dollar spent, obviously, besides the revenue growth you saw in the quarter, can you provide some feedback on the defined logic campaign during the Super Bowl, did you see kind of an immediate lift? And then what kind of marketing campaign should we expect heading into fiscal year 2022? Thanks. Bracken P. Darrell: Yeah, there are different kinds of marketing. There is a kind of marketing like we did in Super Bowl which is really what they call carpal funnel. It is kind of broad in general and really designed to immediately sell specific product but to create awareness and traction for the brand itself and the categories that we are in. and then there is the very, very kind of search engine optimization, click and buy kind of marketing. So there are different kinds of metrics across those different areas. We look at them all and I would say overall we feel very, very good about the defy logic campaign. We're excited about the kind of impact it's having both -- but even just anecdotally, I probably have had -- I can't even tell you how many people have reached out to me and said that it really, that they were surprised by the campaign. But somehow it felt very consistent with what Logitech has always been, which is exactly what we wanted. And so you can expect more of us there. And in terms of the more tactical sales or we look at things like everyone else does, return on ad spend and we try to make sure that we're investing where the returns are the highest. Nate Olmstead: Paul, I would say in terms of areas of focus, it's across the board. But as Bracken mentioned, I think awareness is one that I just feel so strongly about, for our categories. If you read the product reviews, really across the lineup, great reviews. People who try the products, love the products, and they recognize like the enhanced experience that they provide. And I'll just give you an example, something like our MX Keys, kind of the premium keyboard that we launched last year, which has done so well. It's $100 product. If you use that over two years, you're paying about $0.15 a day for something that you're using constantly, and really improves your experience. So I think there's a big opportunity for us around awareness. And Bracken mentioned some of the things we're doing there. But I would expect to see more from us to drive the awareness of big categories in general. Paul Chung: Okay, great. Thanks, guys. Bracken P. Darrell: Thank you. Thanks, Paul. Bracken P. Darrell: Thanks, Paul. Asiya Merchant, your line is now open. Asiya Merchant: Great. Hey, congratulations on an outstanding quarter again. A couple of questions on my part, visibility, I know you guys are kind of maintaining your growth expectations flat, plus or minus. But how much visibility now do you have into the next couple of quarters, if you can talk to us a little bit sequentially at least here into June, and maybe even to the September quarter? And then just high level, the shortages that is enabling people to add on excess inventory, whether it's in the channel, whether it's sitting on the shelves, when do you expect that sell through to reach a more balanced environment, is that even as you look out into the next couple of quarters? And then one for Nate on the gross margins. You've talked about the promo pricing returning to a more normalized level. When do you expect that, I would assume semi-shortages and other shortages in general would suggest that pricing remains more muted or promotional pricing remains more muted, that's it for me? Thank you. Bracken P. Darrell: Well why don't I jump. I'll take the first two. And then you can take the third one and you could add to what I'm saying. In terms of the balance of the inventory, account balances, general inventory, etc. we're just about there. I feel -- I think we kind of ran behind most of the pandemic year trying to fill the channel. And this time we got I think we're finally starting to catch up this last quarter. I think we're about there, we'll see we could have a few additional spots are a little weak, but generally, I think we're there. In terms of visibility, I think our I would say the visibility this quarter is good. The visibility into the next quarter, as you go further out of course it gets less and less clear for us. But we're optimistic. We're I would say it's a little less visible now than it would have been in a normal year, because just a particularly strong -- real strength we've had in the last three or four quarters. But we feel very, very good about our own programs. We have such control over what we're doing and the timing of our product launches and things the tricky part of this, there is a tricky part of that. Maybe the trickiest part is just availability of parts. We've always been able to manage our component availability well and we continue to do that really well. But it is no secret that things like chipsets and things are really hand to mouth in some of the categories we're in and in the industry broadly. So that could always take us a little bit by surprise. But we've been able to manage that very, very well historically and I think we'll do it in the future. Would you like to add anything on any of that or go to the gross margin. Nate Olmstead: Yeah, I can cover gross margin and my Zoom crashed mid-stream there, but back up. I think on gross margin, pricing and promotion and the retail point of sale marketing, those are really important parts to our business and those are things that we have to do. And we will see an increase in those activities I believe in FY 2022. There's a lot of forces at play, though on margin. And Bracken just alluded to some of the ones around the component availability and you asked about supply chain. I think headwinds could also persist in terms of logistics because if materials are late arriving and we have to rush those things, those finished goods to market, we could continue to see elevated logistics costs. Also, I think just component pricing could be could be a challenge in certain areas in FY 2022, as well. So there's, again, competing forces favorable and unfavorable product mix, I believe will continue to be favorable with faster growth in places like video collaboration. But nonetheless, we think the gross margins will land within that new range that we provided AID, a new increased range that we provided AID but down from levels that we saw here in FY 2021. Asiya Merchant: Any color on sequential stuff, you typically provide some color on sequential into the June, which is any color there, just mid-single-digits? Nate Olmstead: Yeah, I would say in general, I don't think in FY 2021 sequential historical trends sort of were irrelevant. And I think that could also be true here in FY 2022. I just think we're still in an unusual environment with many economies going through transitions as hopefully they begin to reopen to sort of pre-COVID normalcy. But the timing of those changes is very hard to predict and so I think our seasonality is probably harder to predict in FY 2022 as well. Certainly, I still expect the holiday quarter would probably be the biggest. But other than that, it's going to be probably important for us just to remain fast, flexible, and nimble and just react to the market opportunities that we see. Bracken P. Darrell: Absolutely. Asiya Merchant: Right. Thank you. Bracken P. Darrell: Thank you Asiya. Ben Lu: Thanks Asiya. Michael, your line is now open. Bracken P. Darrell: Hey Michael. Unidentified Analyst : Hi guys. Thank you. I have two questions actually, along the same lines, visibility. Can you just explain I mean, between beginning of March when you gave your guidance for Q4 and the actual result, I mean, there's a huge discrepancy, a nice one obviously. So the question is really, could you absolutely not foresee that or did you try to stay on the cautious side and if I look at that big discrepancy, I'm wondering how you can be so confident for FY 2022 with your guidance, if that's the discrepancy in just one month? And the second question is also along the shortage situation. You talked about the electronic components and semiconductors, my question is more on the plastic side. How do you make sure or do you see any shortages in plastics and how do you make sure that you have sufficient availability there? Thank you. Bracken P. Darrell: Yeah, I'll take a stab at both of those, and then Nate you can fill in. On the plastics side, no, we don't have any -- at least not that I'm aware of shortages on plastics right now. But, I'd say the demand has been very strong and every day is a new day when it comes to component supply over the last year. But yeah, I would say so far we're okay on the plastic side. On the visibility side, I think that's a very fair criticism. Our constructive comment, I think how could we have been that far off. It's a good question, you were always -- we always try to make sure that what we tell you, we can deliver, we deliver. And, this year was just stronger and stronger. We also had a chance to fill a backlog of orders, especially in video collaboration that we just, we really couldn't completely foresee getting to and we were able to do it. But as you noted, we're really strong across the board. I think with our business is so strong and our market shares continue to gain, and we never completely assume that we're going to gain market share, so we probably did a little better from a market standpoint than we expected. And of course, we also had a chance to refill the channel. So you want to add anything to that Nate? Nate Olmstead: I think I should come back to the environment that we're in is fast moving right, and changes across countries. And, we have lots of customers in every country. So we're reacting with a very nimble supply chain and operations team to those changes. But I think, we saw also March was going to be one of the tougher, one of the first months we're really looking at it at a tougher year-over-year compare, where we started to see pretty strong demand a year ago. So I think there was maybe a little bit of that thinking going into the outlet we provided there as well. We weren't really sure if there was some significance to that first month of a tougher year-over-year compare. As Bracken said the demand remained strong and supply also continued to improve as we went through the quarter. Unidentified Analyst : Great, maybe just one last question if I may. You mentioned that you shipped around 20 million units of webcams into 500 million monitor installed base. Do you have any -- could you give us any feel about what the actual webcam installed base is if you have any numbers on that? Bracken P. Darrell: I don't think -- I know we don't have them available right now, but I'm not sure we do have good numbers on that. What I would say is I think if you pick a poll of people on this call, it would probably surprise us a few of you have webcams and should. But yeah, so it's a big opportunity. And let's just leave it at that and I think we're going to go after it. Unidentified Analyst : Okay, well done. Thanks a lot. Bracken P. Darrell: Thank you. Ben Lu: Thanks, Michael. Jürgen, your line is now open. Jürgen Wagner: Yeah, thank you. Yeah. Hi, actually I have two questions. I'm looking at your capital allocation, what drove the increase to let's say 1 billion or 2 billion or is there any cross rate to be made on your M&A ambitions? And then if things continue to go very well what is the capacity you have in place, I mean, in terms of theoretical sales number on a group level that you would be able to generate? Thank you. Bracken P. Darrell: On the on the capital allocation, I wouldn't read that as any comment at all about our M&A interest or our goals or capacity. I mean, we've given up anything in terms of capacity to do M&A by announcing a larger buyback. We have -- we obviously have a lot of cash and a lot of cash generation capability going into the future. And we're certainly no less ambitious on M&A. We're always looking at all sides of things and we'll continue to do that. In terms of our theoretical capacity, yes, we do have theoretical capacity well above where we are today, in most of our categories, not all. And, we try to keep ourselves in that position. Nate Olmstead: Don't think I have much to add to that. I mean, you saw that we did three small deals in the quarter. Obviously, they didn't cost us a significant amount, but we're pretty active and looking at opportunities and so really no change in capital allocation priorities or processes. Jürgen Wagner: Okay. Alright. Thank you. Bracken P. Darrell: Thank you Jürgen. Ben Lu: Thanks. Eric, your line is now open. Bracken P. Darrell: Hey Eric. Unidentified Analyst : Hey guys, good morning. And thank you for the time and congrats on a good quarter. I just want to touch on the selling and sell through dynamics here a little bit, just to begin to make sure I understand it correctly. And that is obviously we've seen that that gap widen over the last three quarters. It seems predominantly focused in the Americas and EMEA. So is that widening because you've had an opportunity to sell the channel and you're at the point now where you feel like channel inventory levels are still healthy? And then kind of secondary to that, would that then imply that if you're expecting to be call it flat year-over-year and next year, that sell through could potentially be 15% to 20%, to have the impact from this year normalize next year? And I have a follow-up. Bracken P. Darrell: Nate you want to take that. Nate Olmstead: Yeah, I mean I think, we started the year -- if you go all the way back to Q4 last year, inventories got drawn down quite low. And I would say we've been on a steady path to improve inventory levels, both within our distribution centers as well as out in the channel. And that was pretty broad base to begin the year for the first couple of quarters and then again slowly over the year, some categories have gotten healthier. I think this category -- this quarter -- exiting this quarter we really had gotten to a pretty healthy position now across the board. There's still some places where we're a little bit tight. But generally speaking, I think we're now -- we know, I think we feel good about the level that we have and the coverage that we have. In terms of looking to next year, again hard to predict. We'll do things strategically where it makes sense, just given the dynamic supply environment if we think we need to be more aggressive in securing components for availability, but I feel good right now about the state of the inventory. Unidentified Analyst : Okay, super. And then kind of a related question, your balance sheet inventory tripled year-over-year, days inventory of 72 days which I think is the highest in my two and a half years. What's primarily driving that, is it more finished goods versus raw materials, are there any pre-purchases to get ahead of component constraints, I'm just curious on your color there as well? Thanks. Nate Olmstead: Yeah, I think on the days of inventory, listen, our linearity of purchases are sort of back end weighted and you can see that our DPO also went up as well sort of offsetting that. So our cash conversion cycle overall, which is where I usually start was 18 days which was down, I believe, 26 days year-over-year and actually rather flat sequentially. Normally, we see an increase in our cash conversion cycle Q3 to Q4, we didn't see that this quarter. So I think cash conversion was again strong. I do think in the first half of next year in particular, we could see -- probably we'll see an increase in cash conversion cycle, certainly against the very low levels that we were at in FY 2021. We'll see that cash conversion cycle increase in the first half. This would supply chain lead times extending a bit and, again very comfortable that the balance sheet is very strong. And I think it's something we'll put to work so that we can enable the availability that our business needs to support growth and market opportunities. Bracken P. Darrell: And to answer the question very specifically about what are we investing in, it's both. So, we're investing in components and we're also investing in finished goods. Unidentified Analyst : Awesome. And then maybe just one final one. It's great to see you meaningfully increase your buyback authorization. You clearly bought back a lot of stock in the March quarter, should we interpret these dynamics as a sign that; one, you see value in your stock and buying it back today and then two, that buybacks could potentially be more of a use of cash than they have been over the last, whatever one, two, three, four years? Thanks. Bracken P. Darrell: I'll jump in Nate and then you can add. First of all, in terms of the last part of your question, I think if you -- this is a bigger number than we've had before. On the other hand we're a bigger company than we were before, and we have more cash than we've ever had. So I think on the one hand this is just a scale up. On the other hand we do want to be prepared because we've doubled the value over two and a half years. You can almost draw a line in it for the last nine years, since last year, we doubled in value again. And, we want to be in a position where we make sure that if we see a good investment here and we do we'll keep investing. In terms of -- do you want to add anything else to that Nate? Nate Olmstead: No, not on that. I think on the buybacks versus dividend, I would just say, that the buyback number of 1 billion is over three years, you probably need to take the dividend number and multiply it by three and add some growth to it or something to sort of get something that's apples to apples. So I think we're still very committed, obviously, to both forms of returning cash to shareholders. The stock has doubled in price, as Bracken just said, so it has become more expensive for us to buy back shares. But at the same time, our cash generation has improved a lot as well. And so those are some of the factors that go into the higher authorization level. But yeah, as Bracken said we believe -- we're long term investors in the company, and we think that we have really good long-term potential. Unidentified Analyst : Awesome, those are all my questions. Thanks. Bracken P. Darrell: Thank you. Ben Lu: Thanks, Eric. Ananda, your line is now open. Bracken P. Darrell: Hey Ananda. Ananda Baruah: Hey guys, thanks for taking the question. And congrats on solid results and good execution. And I guess just quick ones from me Bracken. In video collaboration, can you just give us a little context around what you're seeing on the enterprise portion, how you're seeing the business sort of develop with companies right now as they go to I guess like, what are you seeing with regards to sort of video enabling rooms and what's your expectations over the next couple of quarters anecdotally, not numbers, we're just trying to get a sense of behaviourally what they're up to, and then I have a follow up? Bracken P. Darrell: You know, I think it's serves a -- intuitively you would say, how can we all be sitting here doing this on video, and then when we go back into the office have the same kind of setup we had before, or most people had a small fraction of viewing rooms video enabled. So intuitively, that's what I believe, I've believed from the beginning of the pandemic, and I continue to believe. And I'd say we're starting to see some of that. But it's too early to say it's about to explode or something. But I think that you're going to see strong growth in video enablement of rooms. It's just inevitable, but anecdotally I see enough science to say that that's true. Ananda Baruah: Okay, great. And just going back to the remarks that you guys both have made about regaining some webcams share as you've gotten greater -- is component availability has come back. Can you just sort of more fully illuminate for me -- for us why when component availability begins to come back for you guys, I would assume it comes back for other people, so why is the year that -- why is it that you're more bent just to take back share, as opposed to the market? Bracken P. Darrell: But we have, I mean, I'll really put my neck out here and say we have better products. So we have better products, we're known for having really strong products and people wanted Logitech webcams. Here's a case where people really look for the brand. They're really searching for our product when they couldn't find it, they often bought somebody else. Ananda Baruah: I got it, makes sense. Actually, you can include me in there, include me in the category too. I buy too for my mom, and I ended up buying two brands I had never heard of before. Bracken P. Darrell: I'm sorry to hear that. We certainly have BRIOS available at $99 a piece right now. Ananda Baruah: She's still trying to figure out what she's looking at so… Bracken P. Darrell: We can help your mom. Give her my number. I'll reach out and I will help her. Ananda Baruah: Yeah, she may take you up on that. So be careful what you offer Bracken. Bracken P. Darrell: Okay. Ananda Baruah: Thanks. Ben Lu: Bracken and Nate, I think that concludes our call. We have no more questions. Bracken P. Darrell: Well, thank you all. It's been -- fiscal year 2021 was a tremendous year. But as I used to say to my mom growing up, every day you kind of have to draw a line behind your heels and everything behind you is just to learn from in the whole world. The whole exciting world ahead of us is right from that line forward and I am super -- we are super excited about the future. Thanks a lot for being along for this ride so far. I think it's going to continue to be exciting and fun. Nate Olmstead: Thanks everybody.LOGI Ratings Summary
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Logitech Shares Climb 4% Following Q4 Beat
Logitech (NASDAQ:LOGI) saw its stock surge over 4% pre-market today after the company announced fourth-quarter earnings and revenue that surpassed consensus estimates. The company reported earnings per share (EPS) of $0.99, well above the expected $0.68. Quarterly revenue also exceeded expectations, coming in at $1.01 billion—a 5% increase from the previous year and higher than the projected $957.77 million.
The company's non-GAAP operating profit saw a significant jump of 93% to $159 million, and the gross margin improved substantially by 730 basis points to 43.6%.
For the upcoming 12 months, Logitech set a sales growth target of 0%-2%, aiming for total sales between $4.3 billion and $4.4 billion. Additionally, the company forecasts its non-GAAP operating income to range from $685 million to $715 million.
