LOGITECH INTERNATIONAL S.A.

Logitech designs software-enabled hardware solutions that help businesses thrive and bring people together when working, creating, and gaming. The company sells the vast majority of its products under the Logitech and Logitech G brand names, with a diverse portfolio including Gaming, Keyboards & Combos, Pointing Devices, Video Collaboration, Webcams, Tablet Accessories, and Headsets. These products are all classified under a single operating segment: Peripherals. Logitech sells to a broad range of international customers in the Americas, EMEA, and Asia Pacific, including direct sales to retailers, e-tailers, businesses, and end consumers through its e-commerce platform, and indirect sales through distributors.

The industry is intensely competitive, characterized by large, well-financed competitors, short product life cycles, and rapid technological advancements. Primary competitors named include Razer Inc., Corsair Gaming, Inc., SteelSeries, Turtle Beach Corporation, HyperX, and Moza for Gaming; Apple, Dell, HP, Lenovo, Eweadn, Mchose, Keychron, Cherry, and Amazon Basics for Keyboards & Combos; Apple, Lenovo, Dell, HP, Cherry, and Amazon Basics for Pointing Devices; Cisco, Poly, Jabra, AVer Information Inc., Neat, Yealink, and Owl Labs for Video Collaboration; HP, Dell, Lenovo, Razer, HIKVision, and Insta360 for Webcams; Apple, Zagg Inc. and other less-established brands for Tablet Accessories; Poly, Jabra, and EPOS for Headsets; and Bose Corporation and Harman International Industries for Other products. Logitech's competitive advantages include design-led engineering, decades-long expertise in sensors, acoustics, optics, wireless, and power management, and a diversified manufacturing footprint across six countries.

Logitech generates revenue primarily through the sale of software-enabled hardware solutions. The company sells products to a variety of distributors, retailers, e-tailers, and enterprise customers. Revenue is recognized when a customer obtains control of promised goods or services. Substantially all revenue relates to contracts with customers to sell products that are hardware devices, which may include embedded software, and are considered as one performance obligation. The company also recognizes revenue from subscription services for professional streamers and Video Collaboration support services, with proceeds received in advance recognized ratably over the service period up to five years.

Gaming includes PC gaming (mice, headsets, keyboards), steering wheels, console gaming headsets, microphones, and Streamlabs services. During fiscal year 2026, Gaming sales were $1,414,206 thousand ¹, an increase of 6% compared to fiscal year 2025. Keyboards & Combos includes PC keyboards and keyboard/mice combo products, with sales of $937,551 thousand ² in fiscal year 2026, up 6%. Pointing Devices includes PC- and Mac-related mice including trackballs and presentation tools, with sales of $858,904 thousand ³ in fiscal year 2026, up 9%. Video Collaboration includes conference room cameras, with sales of $689,040 thousand ⁴ in fiscal year 2026, up 10%. Webcams includes webcams and streaming cameras, with sales of $326,172 thousand ⁵ in fiscal year 2026, up 3%. Tablet Accessories primarily includes tablet keyboards, with sales of $336,189 thousand ⁶ in fiscal year 2026, up 12%. Headsets includes headsets, in-ear headphones, and premium wireless earbuds, with sales of $179,825 thousand ⁷ in fiscal year 2026, flat compared to 2025. Other primarily consists of mobile speakers and PC speakers, with sales of $98,874 thousand ⁸ in fiscal year 2026, down 20%.

In fiscal year 2026, Logitech experienced a cybersecurity incident relating to the exfiltration of data, which management believes will not have a material adverse effect on financial condition or results of operations. In March 2026, the Board of Directors approved a new, three-year share repurchase program to repurchase shares to an aggregate amount of $1.4 billion ⁹, or a maximum of 16,078,446 shares ¹⁰. During fiscal year 2026, the company repurchased 6.2 million shares ¹¹ for an aggregate cost of $557.0 million ¹² under the 2023 share repurchase program for cancellation. In May 2026, the Board of Directors recommended a cash dividend for fiscal year 2026 of CHF 1.36 per share ¹³ (approximately $1.70 per share ¹⁴ based on the exchange rate on March 31, 2026), which would result in an aggregate gross dividend of approximately CHF 195.2 million ¹⁵ (approximately $243.9 million ¹⁶ based on the exchange rate on March 31, 2026).

Net sales for fiscal year 2026 were $4,840,761 thousand ¹⁷, an increase of 6% compared to fiscal year 2025. Gross margin for fiscal year 2026 increased by 10 basis points to 43.2% ¹⁸, compared to 43.1% ¹⁹ for fiscal year 2025. Net income for fiscal year 2026 was $711,187 thousand ²⁰, compared to $631,529 thousand ²¹ for fiscal year 2025. Operating expenses for fiscal year 2026 were $1,316,143 thousand ²², or 27.2% ²³ of sales, compared to $1,307,746 thousand ²⁴, or 28.7% ²⁵ of sales, for fiscal year 2025.

Logitech's strategy includes investing in growth of its B2C business while increasing focus on its B2B business, including sales coverage, product design, and services. The company intends to build and scale new vertical opportunities in Education, Healthcare, and the Public Sector. Logitech also plans to leverage geographic opportunities to augment and expand its global presence, including a continued focus on developed and emerging markets as well as a specific 'China for China' initiative for innovating in this key, fast-paced market.

AI is embedded in Logitech's innovation strategy, enabling the company to provide elevated audio, video, and other capabilities throughout its product portfolio, with plans to continue to integrate AI into future products. Logitech's products are designed to help people increase productivity and improve performance, leveraging AI benefits across work and play. The company also leverages AI internally to accelerate new product introductions, strengthen marketing effectiveness, and optimize operational processes. The ongoing growth and evolution of gaming creates an opportunity for Logitech to provide more tools to a wider community of gamers, and as flexible work models continue to evolve, Logitech is well-positioned to meet the demand for versatile and adaptive workplace technology.

Logitech expects to continue to devote significant resources to research and development, including for the development of devices for digital platforms, video communications, wireless technologies, power management, and user interfaces to sustain its competitive position. Research and development expenses for fiscal year 2026 were $316,221 thousand ²⁶, representing 6.5% ²⁷ of net sales. The company has taken steps to mitigate the impact of challenges, including maintaining discipline in its operating expenses.

Logitech's operations capability consists of a diversified manufacturing footprint across six countries that includes an in-house manufacturing facility in Suzhou, China and third-party contract manufacturers and original design manufacturers (principally in Asia and Mexico). The Suzhou operation currently handles approximately 35% ²⁸ of total production of products based on value. The company has taken steps to mitigate challenges, including continued diversification of its manufacturing footprint and supplier ecosystem. As of March 31, 2026, Logitech employed approximately 7,300 persons ²⁹, of which approximately 2,300 ³⁰ were employed in its Suzhou manufacturing operations.

Capital expenditures for property, plant, and equipment during fiscal year 2026 were $61,562 thousand ³¹. In March 2026, the Board of Directors approved a new, three-year share repurchase program to repurchase shares to an aggregate amount of $1.4 billion ³², or a maximum of 16,078,446 shares ³³. In May 2026, the Board of Directors recommended a cash dividend for fiscal year 2026 of CHF 1.36 per share ³⁴ (approximately $1.70 per share ³⁵ based on the exchange rate on March 31, 2026), which would result in an aggregate gross dividend of approximately CHF 195.2 million ³⁶ (approximately $243.9 million ³⁷ based on the exchange rate on March 31, 2026).

Logitech's business has been impacted by ongoing macroeconomic and geopolitical conditions, including changes in inflation, interest rate and foreign currency fluctuations, uncertainty in consumer and enterprise demand, tariff and trade policies, memory chip availability, volatile energy prices, and increased geopolitical tensions. The company has been affected by increases in demand for memory chips and other components caused by the build out of new AI technologies and data centers, leading to a rise in prices for such components and some suppliers transitioning capacity away from certain components utilized in some of its Video Collaboration products. U.S. tariff policies and international trade arrangements continue to evolve and have had, and may continue to have, a significant impact on Logitech's results of operations.

Logitech faces risks related to its principal manufacturing operations and third-party contract manufacturers being located in China and Southeast Asia, which exposes it to risks associated with doing business in that geographic area as well as changes in tariffs, adverse trade regulations, and pressure to move or diversify manufacturing locations. The company also faces risks from changes in trade policy and regulations, including changes in trade agreements, the imposition of tariffs or other trade restrictions, which may have adverse impacts on its business, results of operations, and financial condition. Additionally, Logitech's financial performance is subject to risks associated with fluctuations in currency exchange rates, as a significant portion of its business is conducted in currencies other than the U.S. Dollar.

Logitech's principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, exposing the company to risks from changes in tariffs, adverse trade regulations, and pressure to move or diversify manufacturing locations. The company produces approximately 35% ³⁸ of its products at facilities it owns in China. Changes in trade policy, including the imposition of tariffs, have had and may continue to have a significant impact on results of operations. Logitech purchases key components from a limited number of sources, and shortages or interruptions in supply, including of semiconductor chips, could affect product availability or increase production costs. The company has been affected by increases in demand for memory chips caused by the build out of new AI technologies. A significant portion of Logitech's business is conducted in currencies other than the U.S. Dollar, and fluctuations in currency exchange rates can adversely affect operating results. For the year ended March 31, 2026, approximately 52% ³⁹ of sales were denominated in non-U.S. currencies. The company's gross margins can vary significantly depending on factors including consumer demand, trade policy and tariffs, competition, product mix, and foreign currency fluctuations.

Management's message emphasizes Logitech's mission to extend human potential in work and play, in a way that is good for people and the planet. The key strategic priorities include innovating and growing in core markets while expanding into broader sections of work and exploring new areas of play; focusing on design-led, software-enabled hardware in the age of AI; investing in growth of the B2C business while increasing focus on the B2B business, including building and scaling new vertical opportunities in Education, Healthcare, and the Public Sector; leveraging geographic opportunities including a specific 'China for China' initiative; and continuing to build a single, iconic Logitech brand. Management also emphasizes embedding 'Design for Sustainability' into the heart of the culture and business strategy.