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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 September 30, 2024
 
Or
 
☐ 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,SwitzerlandNone
  (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.
3930 North First Street
San Jose, California 95134
(Address of principal executive offices and zip code)
 
(510) 795-8500
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading 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 Filerý 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 October 10, 2024, there were 151,579,551 shares of the Registrant’s share capital outstanding.



TABLE OF CONTENTS
 
  Page
   
Part IFINANCIAL INFORMATION 
 
 

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 second quarter of fiscal year 2025 ended on September 27, 2024. The same quarter in the prior fiscal year ended on September 29, 2023. 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").

1
Recordings of our earnings 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 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 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.



2
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 September 30,Six months ended September 30,
 2024202320242023
Net sales$1,116,034 $1,057,008 $2,204,251 $2,031,507 
Cost of goods sold627,491 615,403 1,247,008 1,211,115 
Amortization of intangible assets2,452 2,983 4,894 6,128 
Gross profit486,091 438,622 952,349 814,264 
Operating expenses:    
Marketing and selling201,863 176,356 398,768 355,541 
Research and development76,205 68,559 151,512 139,118 
General and administrative44,173 35,538 81,631 76,835 
Amortization of intangible assets and acquisition-related costs2,725 3,318 5,428 6,003 
Restructuring charges (credits), net229 (1,788)615 1,723 
Total operating expenses325,195 281,983 637,954 579,220 
Operating income160,896 156,639 314,395 235,044 
Interest income14,637 11,856 30,427 21,682 
Other income (expense), net533 (1,044)(1,365)(14,016)
Income before income taxes176,066 167,451 343,457 242,710 
Provision for income taxes30,583 30,334 56,141 42,866 
Net income$145,483 $137,117 $287,316 $199,844 
Net income per share:  
Basic$0.95 $0.87 $1.88 $1.26 
Diluted$0.95 $0.86 $1.86 $1.25 
Weighted average shares used to compute net income per share:  
Basic152,460 157,911 152,875 158,385 
Diluted153,672 158,934 154,320 159,545 

 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
LOGITECH INTERNATIONAL S.A.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(unaudited)
 
Three months ended September 30,Six months ended September 30,
 2024202320242023
Net income$145,483 $137,117 $287,316 $199,844 
Other comprehensive income (loss):  
Currency translation gain (loss):
Currency translation gain (loss), net of taxes
20,789 (10,622)15,570 (12,151)
Defined benefit plans:  
Reclassification of amortization included in other income (expense), net(552)(244)(752)(248)
Hedging gain (loss):  
Deferred hedging gain (loss), net of taxes(2,931)2,078 (1,349)1,374 
Reclassification of hedging loss (gain) included in cost of goods sold(906)1,370 (1,639)4,356 
Total other comprehensive income (loss)16,400 (7,418)11,830 (6,669)
Total comprehensive income$161,883 $129,699 $299,146 $193,175 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4
LOGITECH INTERNATIONAL S.A.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(unaudited)
September 30, 2024March 31, 2024
Assets
Current assets:  
Cash and cash equivalents$1,363,276 $1,520,842 
Accounts receivable, net629,278 541,715 
Inventories520,493 422,513 
Other current assets146,511 146,270 
Total current assets2,659,558 2,631,340 
Non-current assets:  
Property, plant and equipment, net112,357 116,589 
Goodwill463,712 461,978 
Other intangible assets, net34,810 44,603 
Other assets
374,056 350,194 
Total assets$3,644,493 $3,604,704 
Liabilities and Shareholders’ Equity  
Current liabilities:  
Accounts payable$555,490 $448,627 
Accrued and other current liabilities 646,831 637,262 
Total current liabilities1,202,321 1,085,889 
Non-current liabilities:  
Income taxes payable125,779 112,572 
Other non-current liabilities
204,499 172,590 
Total liabilities1,532,599 1,371,051 
Commitments and contingencies (Note 10)
Shareholders’ equity:  
Registered shares, CHF 0.25 par value:
30,148 30,148 
Issued shares — 173,106 at September 30, 2024 and March 31, 2024
Additional shares that may be issued out of conditional capital — 50,000 at September 30, 2024 and March 31, 2024
Additional shares that may be issued out of the capital band — 17,311 at September 30, 2024 and March 31, 2024
Additional paid-in capital72,268 63,524 
Shares in treasury, at cost — 21,270 at September 30, 2024 and 19,243 at March 31, 2024
(1,518,149)(1,351,336)
Retained earnings3,626,999 3,602,519 
Accumulated other comprehensive loss(99,372)(111,202)
Total shareholders’ equity2,111,894 2,233,653 
Total liabilities and shareholders’ equity$3,644,493 $3,604,704 
 


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

5



LOGITECH INTERNATIONAL S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six months ended September 30,
 20242023
Cash flows from operating activities:  
Net income$287,316 $199,844 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation29,103 34,135 
Amortization of intangible assets10,171 11,509 
Loss on investments1,599 11,609 
Share-based compensation expense49,874 43,579 
Deferred income taxes16,489 11,108 
Other57 100 
Changes in assets and liabilities, net of acquisitions:  
Accounts receivable, net(81,568)(35,362)
Inventories(93,907)146,369 
Other assets2,241 11,999 
Accounts payable108,376 88,022 
Accrued and other liabilities12,280 (59,853)
Net cash provided by operating activities342,031 463,059 
Cash flows from investing activities:  
Purchases of property, plant and equipment(29,113)(34,731)
Acquisitions, net of cash acquired— (14,138)
Purchases of deferred compensation investments(3,600)(2,548)
Proceeds from sales of deferred compensation investments2,299 2,622 
Other investing activities(912)(356)
Net cash used in investing activities(31,326)(49,151)
Cash flows from financing activities:  
Payment of cash dividends(207,853)(182,305)
Payment of contingent consideration for business acquisition(1,245)(5,002)
Purchases of registered shares(263,185)(188,941)
Proceeds from exercises of stock options and purchase rights20,235 15,319 
Tax withholdings related to net share settlements of restricted stock units(21,243)(26,224)
Other financing activities(1,663)(1,116)
Net cash used in financing activities(474,954)(388,269)
Effect of exchange rate changes on cash and cash equivalents 6,683 (10,758)
Net increase (decrease) in cash and cash equivalents (157,566)14,881 
Cash and cash equivalents, beginning of the period1,520,842 1,149,023 
Cash and cash equivalents, end of the period$1,363,276 $1,163,904 
Supplementary Cash Flow Disclosures:
Non-cash investing and financing activities:  
Property, plant and equipment purchased during the period and included in period end liability accounts$6,207 $9,218 
Right-of-use assets obtained in exchange for operating lease liabilities
$22,386 $2,574 
Supplemental cash flow information:
Income taxes paid, net$17,103 $17,408 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
LOGITECH INTERNATIONAL S.A.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(In thousands, except per share amounts)
(unaudited)

Three Months Ended September 30, 2024

Additional Paid-in CapitalAccumulated Other Comprehensive LossTotal Shareholders’ Equity
 Registered SharesTreasury SharesRetained Earnings
 SharesAmountSharesAmount
June 30, 2024173,106 $30,148 $57,036 20,090 $(1,418,051)$3,695,574 $(115,772)$2,248,935 
Total comprehensive income— — — — — 145,483 16,400 161,883 
Purchases of registered shares— — — 1,456 (129,987)— — (129,987)
Sales of shares upon exercise of stock options and purchase rights— — (4,526)(216)23,410 (3,267)— 15,617 
Issuance of shares upon vesting of restricted stock units— — (6,059)(60)6,479 (2,810)— (2,390)
Share-based compensation— — 25,817 — — — — 25,817 
   Cash dividends ($1.37 per share)
— — — — — (207,981)— (207,981)
September 30, 2024173,106 $30,148 $72,268 21,270 $(1,518,149)$3,626,999 $(99,372)$2,111,894 
Six Months Ended September 30, 2024
Additional Paid-in CapitalAccumulated Other Comprehensive LossTotal Shareholders’ Equity
Registered SharesTreasury SharesRetained Earnings
SharesAmountSharesAmount
March 31, 2024173,106 $30,148 $63,524 19,243 $(1,351,336)$3,602,519 $(111,202)$2,233,653 
Total comprehensive income— — — — — 287,316 11,830 299,146 
Purchases of registered shares— — — 2,900 (262,119)— — (262,119)
Sales of shares upon exercise of stock options and purchase rights— — (6,065)(273)29,567 (3,267)— 20,235 
Issuance of shares upon vesting of restricted stock units— — (35,394)(600)65,739 (51,588)— (21,243)
Share-based compensation— — 50,203 — — — — 50,203 
Cash dividends ($1.37 per share)
— — — — — (207,981)— (207,981)
September 30, 2024173,106 $30,148 $72,268 21,270 $(1,518,149)$3,626,999 $(99,372)$2,111,894 




7
Three Months Ended September 30, 2023

   Additional Paid-in Capital   Accumulated Other Comprehensive LossTotal Shareholders’ Equity
 Registered SharesTreasury SharesRetained Earnings
 SharesAmountSharesAmount
June 30, 2023173,106 $30,148 $49,734 14,484 $(994,581)$3,240,302 $(99,528)$2,226,075 
Total comprehensive income— — — — — 137,117 (7,418)129,699 
Purchases of registered shares— — — 1,895 (124,096)— — (124,096)
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— — (10,143)(83)8,115 — — (2,028)
Share-based compensation — — 21,608 — — — — 21,608 
Cash dividends ($1.19 per share)
— — — — — (187,199)— (187,199)
September 30, 2023173,106 $30,148 $47,311 16,029 $(1,083,468)$3,190,220 $(106,946)$2,077,265 
Six Months Ended September 30, 2023
Additional Paid-in CapitalAccumulated Other Comprehensive LossTotal Shareholders’ Equity
Registered SharesTreasury SharesRetained Earnings
SharesAmountSharesAmount
March 31, 2023173,106 $30,148 $127,380 13,763 $(977,266)$3,177,575 $(100,277)$2,257,560 
Total comprehensive income — — — — — 199,844 (6,669)193,175 
Purchases of registered shares— — — 3,502 (219,172)— — (219,172)
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— — (108,120)(921)81,896 — — (26,224)
Share-based compensation— — 43,806 — — — — 43,806 
Cash dividends ($1.19 per share)
— — — — — (187,199)— (187,199)
September 30, 2023173,106 $30,148 $47,311 16,029 $(1,083,468)$3,190,220 $(106,946)$2,077,265 
 



The accompanying notes are an integral part of these condensed consolidated financial statements.
8
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 software-enabled hardware solutions that help businesses thrive and bring people together when working, creating, gaming and streaming. As a point of connection between people and the digital world, the Company's mission is to
extend human potential in work and play, in a way that is good for people and the planet.
The Company sells its products to a broad network of international customers, including direct sales to retailers, e-tailers and 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 ("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, 2024, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on May 16, 2024.

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 six months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2025, or any future periods.

Changes in Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies during the three and six months ended September 30, 2024 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

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, 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 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.
9

 
Risks and Uncertainties
Impacts of Macroeconomic and Geopolitical Conditions on the Company's Business
The Company's business has continued to be impacted by macroeconomic and geopolitical conditions. These conditions include inflation, interest rate and foreign currency fluctuations, changes in fiscal policies, geopolitical conflicts, low economic growth in certain regions, and uncertainty in consumer and enterprise demand.
The global and regional economic and political conditions have caused and may continue to cause volatility in demand for the Company's products as well as the cost of materials and logistics, and transportation delays, and as a result may impact the pricing of the Company's products, product availability and the Company's results of operations.
Recent Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker. In addition, ASU 2023-07 requires that all existing annual disclosures about segment profit or loss must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024. A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and other disclosures. Under ASU 2023-09, for each annual period presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by individual jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and can be applied on a prospective basis with an option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

Note 2 — Net Income Per Share
 
The following table summarizes the computations of basic and diluted net income per share for the three and six months ended September 30, 2024 and 2023 (in thousands, except per share amounts):
Three months ended September 30,Six months ended September 30,
 2024202320242023
Net income$145,483 $137,117 $287,316 $199,844 
Shares used in net income per share computation:    
Weighted average shares outstanding - basic152,460 157,911 152,875 158,385 
Effect of potentially dilutive equivalent shares1,212 1,023 1,445 1,160 
Weighted average shares outstanding - diluted153,672 158,934 154,320 159,545 
Net income per share:    
Basic$0.95 $0.87 $1.88 $1.26 
Diluted$0.95 $0.86 $1.86 $1.25 
 
Share equivalents attributable to outstanding stock options, restricted stock units and employee share purchase plans totaling 0.9 million and 1.1 million for the three months ended September 30, 2024 and 2023,
10

respectively, and 1.0 million and 1.6 million for the six months ended September 30, 2024 and 2023, 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 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.
 
Note 3 — Employee Benefit Plans
 
Employee Share Purchase Plans and Stock Incentive Plans
 
As of September 30, 2024, the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated, the 1996 Employee Share Purchase Plan (U.S.), as amended and restated, and the 2006 Stock Incentive 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 six months ended September 30, 2024 and 2023 (in thousands):
Three months ended September 30,Six months ended September 30,
 2024202320242023
Cost of goods sold$3,902 $2,462 $6,500 $3,877 
Marketing and selling10,469 9,262 22,320 19,745 
Research and development5,067 4,694 10,806 9,147 
General and administrative7,031 5,650 10,248 10,810 
Total share-based compensation expense26,469 22,068 49,874 43,579 
Income tax benefit(4,776)(2,548)(12,378)(7,866)
Total share-based compensation expense, net of income tax benefit$21,693 $19,520 $37,496 $35,713 

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.

Share-based compensation costs capitalized as part of inventory were $1.8 million and $1.5 million for the three months ended September 30, 2024 and 2023, respectively, and $4.3 million and $3.4 million for the six months ended September 30, 2024 and 2023, 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 $1.8 million and $1.9 million recorded for the three months ended September 30, 2024 and 2023, respectively, and $3.5 million and $3.8 million recorded for the six months ended September 30, 2024 and 2023, 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 six months ended September 30, 2024 was $30.6 million and $56.1 million based on an effective income tax rate of 17.4% and 16.3% of pre-tax income, respectively. The income tax
11

provision for the same periods ended September 30, 2023 was $30.3 million and $42.9 million based on an effective income tax rate of 18.1% and 17.7% of pre-tax income, respectively.

The change in the effective income tax rate for the three and six months ended September 30, 2024, compared with the same periods ended September 30, 2023, was primarily due to the change in the mix of income and losses in the various tax jurisdictions in which the Company operates, the favorable tax impacts from share-based compensation and unrecognized tax benefits due to uncertain tax positions.

The Base Erosion and Profit Shifting Project (the “BEPS Project”) undertaken by the Organization for Economic Co-operation and Development (the "OECD") recommended changes to numerous long-standing tax principles, including a proposal to reallocate profits among tax jurisdictions in which companies do business (“Pillar One”) and establishing a minimum tax on global income (“Pillar Two”). Some jurisdictions, including Switzerland, where the Company operates are implementing Pillar Two laws to effectuate a 15% minimum tax. The minimum tax effective beginning in fiscal year 2025 for the Company, is treated as a current cost and does not have a material impact on the Company's effective tax rate. The OECD and participating countries continue to issue underlying rules and administrative guidance related to Pillar Two, and the Company continues to monitor the relevant developments.

Note 5 — Balance Sheet Components
 
The following table presents the components of certain balance sheet asset amounts (in thousands): 
September 30, 2024March 31, 2024
Accounts receivable, net:  
Accounts receivable$862,485 $744,836 
Allowance for sales returns(13,521)(10,180)
Allowance for cooperative marketing arrangements(43,782)(41,634)
Allowance for customer incentive programs(74,841)(60,027)
Allowance for pricing programs(101,063)(91,280)
 $629,278 $541,715 
Inventories:  
Raw materials$55,634 $65,209 
Finished goods464,859 357,304 
 $520,493 $422,513 
Other current assets:  
Value-added tax ("VAT") receivables$67,720 $41,172 
Prepaid expenses and other assets78,791 105,098 
 $146,511 $146,270 
Property, plant and equipment, net:  
Property, plant and equipment$523,536 $503,882 
  Less: accumulated depreciation and amortization(411,179)(387,293)
$112,357 $116,589 
Other assets:  
Deferred tax assets$227,009 $224,831 
Right-of-use assets 79,076 61,163 
Investments for deferred compensation plan31,929 29,174 
Investments in privately held companies27,976 28,662 
Other assets8,066 6,364 
 $374,056 $350,194 


12


The following table presents the components of certain balance sheet liability amounts (in thousands): 
September 30, 2024March 31, 2024
Accrued and other current liabilities:  
Accrued customer marketing, pricing and incentive programs$182,559 $170,371 
Accrued personnel expenses124,571 145,473 
Income taxes payable45,093 24,196 
Warranty liabilities32,100 30,270 
VAT payable27,638 28,253 
Accrued sales return liability27,275 30,098 
Deferred revenue (1)
23,097 19,262 
Accrued loss for inventory purchase commitments21,807 29,349 
Operating lease liabilities16,011 15,107 
Other current liabilities146,680 144,883 
 $646,831 $637,262 
Other non-current liabilities:  
Operating lease liabilities$79,100 $61,920 
Employee benefit plan obligations43,662 42,707 
Obligation for deferred compensation plan31,929 29,174 
Deferred revenue (1)
31,512 21,097 
Warranty liabilities14,733 14,384 
Deferred tax liabilities744 705 
Other non-current liabilities2,819 2,603 
 $204,499 $172,590 
(1) Includes deferred revenue for post-contract customer support and other services.

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 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.

13

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): 
 September 30, 2024March 31, 2024
 Level 1Level 2Level 3Level 1Level 2Level 3
Assets:    
Cash equivalents$926,645 $— $— $1,042,604 $— $— 
Investments for deferred compensation plan included in other assets:    
Cash$203 $— $— $312 $— $— 
Common stock710 — — 573 — — 
Money market funds8,456 — — 8,129 — — 
Mutual funds22,560 — — 20,160 — — 
Total investments for deferred compensation plan$31,929 $— $— $29,174 $— $— 
Currency derivative assets
included in other current assets		$— $168 $— $— $913 $— 
Liabilities:
Contingent consideration included in accrued and other current liabilities$— $— $— $— $— $1,215 
Currency derivative liabilities
included in accrued and other current liabilities		$— $714 $— $— $573 $— 

Investments for Deferred Compensation Plan

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $31.9 million and $29.2 million, as of September 30, 2024 and March 31, 2024, 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 six months ended September 30, 2024 and 2023 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 $18.6 million and $18.0 million as of September 30, 2024 and March 31, 2024, respectively. Gains (losses) related to equity method investments for the three and six months ended September 30, 2024 and 2023 were not material and are included in other income (expense), net, in the Company's condensed consolidated statements of operations. There was no impairment of equity method investments during the three and six months ended September 30, 2024 and 2023.

Assets Measured at Fair Value on a Nonrecurring Basis

Financial 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 included in other assets was $8.8 million and $10.1 million as of September 30, 2024 and March 31, 2024, respectively. The impairment charges related to these equity investments were not material during the three and six
14

months ended September 30, 2024. There were no impairment charges related to these equity investments during the three and six months ended September 30, 2023.

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

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 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 six months ended September 30, 2024 and 2023.
 
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 September 30, 2024 and March 31, 2024. See Note 6 for the fair values of the Company’s derivative instruments as of September 30, 2024 and March 31, 2024.

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 $144.4 million and $90.5 million as of September 30, 2024 and March 31, 2024, respectively. The Company had $1.8 million of net loss related to its cash flow hedges included in accumulated other comprehensive loss as of September 30, 2024, which will be reclassified into earnings within the next twelve months.
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The following table presents the amounts of gain (loss) on the Company’s derivative instruments designated as hedging instruments for the three and six months ended September 30, 2024 and 2023 and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (in thousands):
Three months ended September 30,
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss 		Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
 2024202320242023
Cash flow hedges$(2,931)$2,078 $(906)$1,370 
Six months ended September 30,
Amount of Gain (Loss)
Deferred as a Component of Accumulated
Other Comprehensive Loss		Amount of Loss (Gain)
Reclassified from Accumulated Other Comprehensive Loss to
Costs of Goods Sold
2024202320242023
Cash flow hedges$(1,349)$1,374 $(1,639)$4,356 

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.
 
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 approximately 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 September 30, 2024 and March 31, 2024 were $121.4 million and $79.4 million, respectively.
 
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 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. There have been no triggering events identified affecting the valuation of goodwill and intangible assets during the three and six months ended September 30, 2024 and 2023.

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

As of March 31, 2024$461,978 
Effects of foreign currency translation1,734 
As of September 30, 2024$463,712 

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The Company's acquired intangible assets were as follows (in thousands):
 September 30, 2024March 31, 2024
 Gross Carrying AmountAccumulated
Amortization		Net Carrying AmountGross Carrying AmountAccumulated
Amortization		Net Carrying Amount
Trademarks and trade names$32,390 $(27,207)$5,183 $32,390 $(25,739)$6,651 
Developed technology107,421 (91,768)15,653 107,421 (86,855)20,566 
Customer contracts/relationships69,087 (54,854)14,233 69,087 (51,061)18,026 
Effects of foreign currency translation(289)30 (259)(1,019)379 (640)
Total$208,609 $(173,799)$34,810 $207,879 $(163,276)$44,603 

Note 9 — Financing Arrangements
 
The Company had several uncommitted, unsecured bank lines of credit and letters of credit aggregating $178.7 million and $172.5 million as of September 30, 2024 and March 31, 2024, respectively. There are no financial covenants under the lines of credit with which the Company must comply. There was no borrowing outstanding under the lines of credit as of September 30, 2024 or March 31, 2024. As of September 30, 2024 and March 31, 2024, the Company had outstanding bank guarantees of $29.5 million and $14.3 million, respectively.

Note 10 — Commitments and Contingencies
 
Product Warranties
 
Changes in the Company’s warranty liabilities for the three and six months ended September 30, 2024 and 2023 were as follows (in thousands): 
Three months ended September 30,Six months ended September 30,
 2024202320242023
Beginning of the period$44,502 $39,885 $44,654 $40,886 
Provision11,776 10,393 21,962 19,485 
Settlements(9,975)(9,838)(20,013)(19,756)
Effects of foreign currency translation530 (175)230 (350)
End of the period$46,833 $40,265 $46,833 $40,265 

Indemnifications
 
The Company indemnifies 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 September 30, 2024, no material amounts have been accrued for 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 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 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 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 legal proceedings. 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
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("Accounting Standards Codification") 450, Contingencies, 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 and 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 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.

Note 11 — Shareholders’ Equity

Share Repurchases

In June 2023, the Company's Board of Directors approved a 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, 2024, the Company repurchased 2.9 million shares for an aggregate cost of $262.1 million under the 2023 share repurchase program for cancellation, of which $18.4 million of the aggregate cost was not paid yet as of September 30, 2024. As of September 30, 2024, $373.9 million was available for repurchase under the 2023 share repurchase program.

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. In addition, the Company repurchased 2.6 million shares for an aggregate cost of $159.1 million under the previous share repurchase program during the six months ended September 30, 2023. This previous share repurchase program was initially approved by the Company's Board of Directors in May 2020, to purchase Logitech shares to support equity incentive plans or potential acquisitions, and expired on July 27, 2023.

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 the Company and its subsidiaries may not exceed 10% of the share 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, 2024, the Company had a total of 21.3 million shares held in treasury stock, which includes 7.0 million shares that have been repurchased for cancellation and 14.3 million shares that have been purchased to support equity incentive plans or potential acquisitions.

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 does not require the purchase of any minimum number of shares.

Share Cancellation

In September 2024, the Company's Board of Directors approved the cancellation of 4.1 million treasury shares, which were repurchased in fiscal year 2024 for an aggregate cost of $332.1 million under the 2023 share repurchase program. The cancellation became effective in October 2024, and as a result both the number of registered shares issued and the number of treasury shares outstanding decreased by 4.1 million shares. Upon cancellation of these shares, the Company deducted the par value from registered shares and reflected the excess of share repurchase cost over par value as a reduction to retained earnings.
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Dividends

During the three and six months ended September 30, 2024, the Company declared cash dividends of CHF 1.16 (USD equivalent of $1.37 based on the exchange rate on the date of declaration) per share and paid a total of $207.9 million on the Company's outstanding shares. During the three and six months ended September 30, 2023, the Company declared cash dividends of CHF 1.06 (USD equivalent of $1.19 based on the exchange rate on the date of declaration) per share and paid a total of $182.3 million on the Company's outstanding shares.

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

Accumulated Other Comprehensive Loss
 
The accumulated other comprehensive loss was as follows (in thousands):
Currency Translation Adjustment
Defined Benefit Plans
Deferred Hedging Gains (Losses)
Total
March 31, 2024$(103,947)$(8,395)$1,140 $(111,202)
Other comprehensive income (loss)15,570 (752)(2,988)11,830 
September 30, 2024$(88,377)$(9,147)$(1,848)$(99,372)
 
Note 12 — Segment Information
 
The Company operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for gaming, personal computers ("PCs"), tablets, video conferencing, and other digital platforms. Operating performance measures are provided directly to the Company's Chief Executive Officer ("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.

Sales by product category for the three and six months ended September 30, 2024 and 2023 were as follows (in thousands):

Three months ended September 30,Six months ended September 30,
 2024202320242023
Gaming (1)
$300,470 $282,104 $609,945 $548,533 
Keyboards & Combos209,936 194,914 425,269 375,769 
Pointing Devices195,936 191,676 385,882 366,130 
Video Collaboration159,660 152,389 306,702 291,735 
Webcams80,249 88,222 153,153 163,422 
Tablet Accessories85,614 63,677 164,153 134,013 
Headsets46,916 44,411 91,152 81,261 
Other (2)
37,253 39,615 67,995 70,644 
Total Sales$1,116,034 $1,057,008 $2,204,251 $2,031,507 
(1) Gaming includes streaming services revenue generated by Streamlabs.
(2) Other primarily consists of mobile speakers and PC speakers.
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Sales by geographic region (based on the customers’ locations) for the three and six months ended September 30, 2024 and 2023 were as follows (in thousands):
Three months ended September 30,Six months ended September 30,
2024202320242023
Americas$480,081 $462,406 $965,370 $907,574 
EMEA351,886 311,805 661,703 570,683 
Asia Pacific284,067 282,797 577,178 553,250 
Total Sales$1,116,034 $1,057,008 $2,204,251 $2,031,507 
 
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 country of domicile, represented 3% of the Company's total consolidated sales for each of the three months ended September 30, 2024 and 2023, and 3% and 2% of the Company's total consolidated sales for the six months ended September 30, 2024 and 2023, respectively.

Three customers of the Company each represented 10% or more of the total consolidated gross sales for each of the three and six months ended September 30, 2024 and 2023.

Property, plant and equipment, net (excluding software) and right-of-use assets by geographic region were as follows (in thousands):
September 30, 2024March 31, 2024
Americas$64,591 $67,762 
EMEA50,101 30,819 
Asia Pacific56,668 58,901 
Total$171,360 $157,482 

Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China and Ireland, were $62.9 million, $40.0 million, and $15.9 million, respectively, as of September 30, 2024. Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were $66.5 million, $41.2 million, and $16.2 million, respectively, as of March 31, 2024.

Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company’s country of domicile, were $26.2 million and $9.0 million as of September 30, 2024 and March 31, 2024, respectively. No other countries represented more than 10% of the Company’s total property, plant and equipment, net (excluding software) and right-of-use assets as of September 30, 2024 or March 31, 2024.
 
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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 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, changes in fiscal policies, inflation, economic downturns, and disruptions in global logistics;
•Our expectations regarding any restructuring efforts, including the timing thereof;
•Long-term, secular trends that impact our product categories;
•The evolution and adoption of artificial intelligence (“AI”), its impact on our industry and related risks and opportunities for our business;
•The scope, nature or impact of acquisition, strategic alliance, and divestiture 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 development, product development and innovation, and their impact on future operating results and anticipated operating costs for fiscal year 2025 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;
•Our expectations regarding our share repurchase and dividend programs;
•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.

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,” “Company Overview,” “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, in our Annual Report on Form 10-K for the year ended March 31, 2024, 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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Company Overview
Logitech designs software-enabled hardware solutions that help businesses thrive and bring people together when working, creating, gaming and streaming. As a point of connection between people and the digital world, our mission is to extend human potential in work and play, in a way that is good for people and the planet. We sell these products through a number of brands, including Logitech, Logitech G and others.
Our diverse portfolio includes: Gaming, Keyboards & Combos, Pointing Devices, Video Collaboration, Webcams, Tablet Accessories, and Headsets. These products are all classified under a single operating segment: Peripherals (see Note 12 to our condensed consolidated financial statements).
We sell our products to a broad network of international customers in the Americas, Europe, the Middle East and Africa (“EMEA”) and Asia Pacific. This includes direct sales to retailers, e-tailers, and end consumers through our e-commerce platform, and indirect sales to end 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 on our Business
Our business has continued to be impacted by macroeconomic and geopolitical conditions. These conditions include inflation, interest rate and foreign currency fluctuations, changes in fiscal policies, geopolitical conflicts, low economic growth in certain regions, and uncertainty in consumer and enterprise demand.
The global and regional economic and political conditions have caused and may continue to cause volatility in demand for our products as well as cost of materials and logistics, and transportation delays, and as a result may impact the pricing of our products, product availability and our results of operations.
For additional information, see Part II, Item 1A "Risk Factors."
Trends and Uncertainties
Several long-term secular-trends offer long-term structural growth opportunities across Logitech’s product portfolio. We design, create and sell products that benefit from these secular trends which include the following:
•Hybrid work: Hybrid work provides an opportunity to equip multiple workspaces including in the office and other places of work, as well as at home and away from home. Hybrid work also provides an opportunity for increased enterprise and consumer adoption of video conferencing. Our video collaboration products are compatible with a variety of video conference platforms, including Zoom, Microsoft Teams and Google Meet.
•Gaming: The ongoing growth and evolution of gaming creates an opportunity for us to provide more tools to a wider community of gamers. In particular, social gaming continues to gain popularity through online gaming, multi-platform experiences and esports.
•AI: AI has reshaped expectations for productivity improvements, product innovation and technology ecosystem evolution. While we have used AI solutions and machine learning to enhance the features of different products in our portfolio, AI offers additional growth opportunities and risks as we work to integrate our capabilities with our ecosystem partners.
•Climate change: Climate change affects everyone. We already consider sustainability as part of our product design and in other areas and intend to continue to do so in the future.
•The importance of trust: With our well-established Logitech brand, consumer-centric design philosophy, and commitment to high privacy and security standards, we strive to deliver trusted user experiences.
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 financial results. These challenges include (i) the current macroeconomic environment, including interest rate fluctuations, inflation, foreign exchange movements, changes in fiscal policies and low economic growth in certain regions, (ii) the uncertainty with overall consumer and enterprise demand, (iii) the uncertainty with enterprise strategy for office space utilization and related timing of enterprise investments in infrastructure and technology, and (iv) the timing of further development of our B2B go-to-market capabilities.
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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) maintaining discipline in our operating expenses, (ii) managing inventory levels to align with demand, (iii) continued investment in our B2B capabilities, and (iv) release of new products to increase the value proposition of our portfolio.
For additional information, see Part II, Item 1A "Risk Factors."
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.
Summary of Financial Results
Our total sales for the three and six months ended September 30, 2024 increased 6% and 9%, compared to the three and six months ended September 30, 2023, respectively, primarily due to an increase in sales for Gaming, Keyboards & Combos and Tablet Accessories, driven by improved demand.
Sales for the three months ended September 30, 2024 increased 13% and 4% in the EMEA and Americas regions, respectively, and remained flat in the Asia Pacific region, compared to the three months ended September 30, 2023. Sales for the six months ended September 30, 2024 increased 16%, 6%, and 4% in the EMEA, Americas, and Asia Pacific regions, respectively, compared to the six months ended September 30, 2023.
Gross margin was 43.6% for the three months ended September 30, 2024 and increased by 210 basis points, compared to the three months ended September 30, 2023, reflecting lower product costs and lower inventory reserves driven by improved demand, partially offset by higher promotional spending. Gross margin was 43.2% for the six months ended September 30, 2024 and increased by 310 basis points, compared to the six months ended September 30, 2023, primarily driven by lower product costs.
Operating expenses for the three months ended September 30, 2024 were $325.2 million, or 29.1% of sales, compared to $282.0 million, or 26.7% of sales, for the three months ended September 30, 2023. Operating expenses for the six months ended September 30, 2024 were $638.0 million, or 28.9% of sales, compared to $579.2 million, or 28.5% of sales, for the six months ended September 30, 2023. The increase in operating expense was primarily driven by an increase in marketing and advertising spend.
We had an income tax provision of $30.6 million and $30.3 million for the three months ended September 30, 2024 and September 30, 2023, respectively. We had an income tax provision of $56.1 million and $42.9 million for the six months ended September 30, 2024 and September 30, 2023, respectively. The change in the income tax provision for the three and six months ended September 30, 2024, compared to the three and six months ended September 30, 2023, respectively, was primarily due to the mix of income and losses in the various tax jurisdictions in which we operate, the favorable tax impacts from share-based compensation and unrecognized tax benefits due to uncertain tax positions.
Net income for the three and six months ended September 30, 2024 was $145.5 million and $287.3 million, respectively, compared to $137.1 million and $199.8 million, for the three and six months ended September 30, 2023, 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.
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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 uncertain tax positions, 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 six months ended September 30, 2024 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, 2024.
New Accounting Pronouncements
Refer to Note 1 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for recent accounting pronouncements to be adopted.
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