Logitech International SA
Logitech International SA
10/28/2026 | Press release | Distributed by Public on 10/28/2026 14:19
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
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 evolving consumer and enterprise demand trends, competitive landscape and current and future worldwide geopolitical, economic and capital market conditions, including fluctuations in currency exchange rates, inflation, economic downturns, volatile energy prices, changes in fiscal and monetary policies, and geopolitical tensions;
•Changes in trade regulations, policies and agreements and the imposition of tariffs that affect our products or operations, including potential new tariffs that may be imposed on U.S. imports, and our ability to mitigate;
•The availability and pricing of components used to manufacture our products;
•The impact of the incident in the manufacturing facilities of one of our semiconductor suppliers;
•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;
•Our expectations regarding any restructuring efforts, including the timing or effectiveness thereof;
•The scope, nature or impact of any acquisition, strategic alliance, and divestiture activities;
•Our expectations regarding the success of any 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 2027 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;
•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 Credit Agreement and our bank lines of credit to fund capital expenditures and working capital needs, and our ability to comply with our obligations under such debt agreements; 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, 2026, 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.
Company Overview
Logitech creates design-led, software-enabled hardware solutions that help businesses thrive and bring people together when working, creating, and gaming in the age of AI. As the 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 the vast majority of our products under the Logitech and Logitech G brand names.
Our diverse, innovative 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 range of international customers, in the Americas; Europe, the Middle East and Africa ("EMEA"); and Asia Pacific. This includes direct sales to retailers, e-tailers, businesses large and small 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, Geopolitical, and Other Factors on our Business
As we conduct operations globally, our business has continued to be impacted by ongoing macroeconomic and geopolitical conditions. These conditions include changes in inflation, interest rate and foreign currency fluctuations, uncertainty in consumer and enterprise demand, tariff and trade policies, component availability, volatile energy prices, changes in fiscal and monetary policies, and geopolitical tensions, including the armed conflicts in the Middle East and Ukraine.
In 2025, the United States introduced trade policy actions that increased import tariffs across a wide range of countries at various rates, with certain exemptions. In February 2026, the U.S. Supreme Court issued a decision invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). In fiscal year 2027, we received a refund of $61 million for these tariffs, including $15 million in the first quarter and $46 million in the second quarter, which represent substantially all of the refunds we have requested for the IEEPA tariffs invalidated by the Supreme Court. The $61 million refund was recorded as a reduction of cost of goods sold in our condensed consolidated statements of operations for the first quarter of fiscal year 2027.
Following the U.S. Supreme Court ruling, the U.S. government introduced temporary tariffs for a 150-day period, which were subsequently invalidated by the U.S. Court of International Trade, subject to appeal. The U.S. government then announced new tariffs under Section 301 of U.S. trade laws which became effective on July 24, 2026 when the temporary tariffs expired. U.S. tariff policies and international trade arrangements continue to evolve and have had, and may continue to have, a significant impact on our results of operations.
We have also been affected by the increases in demand for electronic components, including semiconductor chips, caused by the build out of new AI technologies and data centers, leading to shortages and rising prices for such components utilized in some of our products. In addition, one of our semiconductor component suppliers had a serious incident at its manufacturing facility, resulting in its closure in late June 2026. The facility opened in September 2026 and began ramping up production; however, the facility's current capacity is still below our required level. This supplier incident has impacted our ability to effectively meet demand for certain products and will continue to impact product availability in the third quarter of fiscal year 2027.
The global and regional macroeconomic, political and other conditions have caused and may continue to cause volatility in demand for our products, component availability, transit times and cost of our products including cost of tariffs, materials, and logistics, and as a result, have impacted and may continue to 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:
•AI: AI is reshaping expectations for product innovation, productivity improvements, and the evolution of digital technology ecosystems. AI is embedded in our innovation strategy and product development, enabling us to provide elevated audio, video, and other capabilities throughout our product portfolio, and we plan to continue to integrate AI into future products. Our products are also designed to help people increase productivity and improve performance, leveraging AI benefits across work and play. Logitech's products are the connection between people and the digital world, providing a broad range of devices that facilitate interaction with AI. Our video collaboration products, webcams, headsets, mice and keyboards serve as the eyes, ears and hands of AI, providing the sensory channels through which our customers experience AI. In addition, we leverage AI internally to accelerate new product introductions, strengthen marketing effectiveness and optimize operational processes across our organization.
•Flexible work: As flexible work models continue to evolve, with employees working from offices, homes and various remote locations, Logitech is well-positioned to meet the demand for versatile and adaptive workplace technology. These working arrangements provide opportunities for Logitech to equip multiple workspaces with products across our portfolio including Pointing Devices, Keyboards & Combos, Tablet Accessories, Headsets and Webcams. Additionally, the rise in distributed teams and remote collaboration is driving increased adoption of video conferencing solutions among businesses and consumers. Our portfolio of video collaboration products is compatible with a variety of video conference platforms, including Zoom, Microsoft Teams and Google Meet.
•Gaming growth: The ongoing growth and evolution of gaming creates an opportunity for us to provide more tools to a wider community of gamers. Gaming is enjoyed by men and women of all ages; competitively as a sport or for fun; for active participation and passive consumption; for personal development or social interaction. As a mainstream activity, gaming continues to gain popularity through online gaming, multi-platform experiences and esports.
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) uncertainty in tariffs on goods imported into the U.S. and responsive policies enacted by other countries, (ii) uncertainty in supply and pricing of electronic components including semiconductor chips, (iii) the macroeconomic environment, including inflation, interest rate and foreign currency fluctuations, volatile energy prices, changes in fiscal and monetary policies, and geopolitical tensions, and (iv) the uncertainty of overall consumer and enterprise demand.
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) diversification of our manufacturing footprint and supplier ecosystem, (ii) increasing pricing for certain products, (iii) maintaining discipline in our operating expenses, (iv) managing inventory levels to align with demand and component availability, and (v) continued release of new products to increase the value proposition of our portfolio.
For additional information, see Part II, Item 1A "Risk Factors."
Seasonality
We experience seasonal trends related to our product sales. Sales are generally highest during our third fiscal quarter (October to December) primarily due to increased consumer demand during the holiday season and increased spending by businesses in the months nearing the calendar year-end. Cash flow is usually correspondingly lower in the first half of our fiscal year as we typically build inventories in advance of our third fiscal quarter and we also pay an annual dividend following our Annual General Meeting typically held in September.
Summary of Financial Results
Our sales for the three months ended September 30, 2026 were $1,218.8 million, an increase of 3% compared to $1,186.1 million for the three months ended September 30, 2025, primarily due to an increase in sales of Gaming, Video Collaboration and Keyboards & Combos, offset by a decrease in sales of Tablet Accessories. Our sales for the six months ended September 30, 2026 were $2,446.1 million, an increase of 5% compared to $2,333.8 million for the six months ended September 30, 2025, primarily due to an increase in sales of Gaming, Pointing Devices and Video Collaboration, offset by a decrease in sales of Tablet Accessories. Our sales for both the three- and six-month periods benefited from favorable changes in foreign currency exchange rates.
For the three months ended September 30, 2026, sales increased 13% in the Americas region, remained flat in the Asia Pacific region, and decreased 7% in the EMEA region, compared to the three months ended September 30, 2025. For the six months ended September 30, 2026, sales increased 13% and 4% in the Americas and Asia Pacific regions, respectively, and decreased 4% in the EMEA region, compared to the six months ended September 30, 2025. Our sales in the EMEA region for both the three- and six-month periods were negatively impacted by an overall market decline and the conflict in the Middle East. Our sales in the Asia Pacific region for the three-month period were negatively impacted by higher sales in the prior year due to a large education deal as well as a supply shortage related to the temporary facility closure of one of our suppliers.
Gross margin was 44.9% for the three months ended September 30, 2026 and increased by 150 basis points from 43.4% for the three months ended September 30, 2025, due to lower tariff costs, supported by manufacturing diversification, favorable product mix and favorable foreign currency exchange rate changes, partially offset by higher logistics costs. Gross margin was 47.2% for the six months ended September 30, 2026 and increased by 460 basis points from 42.6% for the six months ended September 30, 2025, primarily driven by a benefit from tariff refunds, favorable foreign currency exchange rate changes and favorable product mix, partially offset by investment in strategic promotions.
Operating expenses for the three months ended September 30, 2026 were $346.5 million, or 28.4% of sales, compared to $323.2 million, or 27.2% of sales, for the three months ended September 30, 2025. Operating expenses for the six months ended September 30, 2026 were $695.9 million, or 28.4% of sales, compared to $640.0 million, or 27.4% of sales, for the six months ended September 30, 2025. The increase in operating expenses for both the three- and six-month periods was primarily driven by increases in marketing and selling expenses and research and development expenses.
We had an income tax provision of $38.5 million and $32.4 million for the three months ended September 30, 2026 and 2025, respectively, compared to $78.3 million and $60.9 million for the six months ended September 30, 2026 and 2025, respectively.
Net income for the three and six months ended September 30, 2026 was $180.0 million and $415.7 million, respectively, and $170.7 million and $316.7 million for the three and six months ended September 30, 2025, respectively.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make assumptions, judgments, and estimates that affect reported amounts of assets, liabilities, sales and expenses, and the disclosure of contingent assets and liabilities.
We consider an accounting estimate critical if it: (i) requires management to make judgments and estimates about matters that are inherently uncertain; and (ii) is important to an understanding of our financial condition and operating results.
We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.
We believe that the assumptions, judgments and estimates involved in the accounting for accruals for customer incentives and related breakage, 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 estimates.
There have been no material changes in our critical accounting estimates during the six months ended September 30, 2026 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, 2026.
New Accounting Pronouncements
Refer to Note 1 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for new accounting pronouncements adopted and 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
Our sales for the three months ended September 30, 2026 were $1,218.8 million, an increase of 3% compared to $1,186.1 million for the three months ended September 30, 2025, primarily due to an increase in sales of Gaming, Video Collaboration and Keyboards & Combos, offset by a decrease in sales of Tablet Accessories. Our sales for the six months ended September 30, 2026 were $2,446.1 million, an increase of 5% compared to $2,333.8 million for the six months ended September 30, 2025, primarily due to an increase in sales of Gaming, Pointing Devices and Video Collaboration, offset by a decrease in sales of Tablet Accessories. Our sales for both the three- and six-month periods benefited from favorable changes in foreign currency exchange rates. If currency exchange rates had been constant in the three and six months ended September 30, 2026 and 2025, our sales growth rates in constant currency would have been 2% and 4%, respectively.
Sales Denominated in Other Currencies
Although our financial results are reported in U.S. Dollars, a portion of our sales was generated in currencies other than the U.S. Dollar, such as the Euro, Chinese Renminbi, Japanese Yen, Australian Dollar, Canadian Dollar, Pound Sterling and New Taiwan Dollar. During the three months ended September 30, 2026, approximately 51% of our sales were denominated in currencies other than the U.S. Dollar.
Sales by Region
The following table presents the change in sales by region for the three and six months ended September 30, 2026, compared with the three and six months ended September 30, 2025:
| Sales Growth Rate |
Constant Dollar Sales Growth Rate |
|||||||||||||||||||||||||
|
Three Months Ended September 30, 2026 |
Six Months Ended September 30, 2026 |
Three Months Ended September 30, 2026 |
Six Months Ended September 30, 2026 |
|||||||||||||||||||||||
| Americas | 13% | 13% | 13 | % | 12% | |||||||||||||||||||||
| EMEA | (7)% | (4)% | (6) | % | (5)% | |||||||||||||||||||||
| Asia Pacific | -% | 4% | (2) | % | 2% | |||||||||||||||||||||
Americas:
The increase in sales in the Americas region for the three-month period presented above was primarily driven by an increase in sales of Video Collaboration, Gaming, and Keyboards & Combos. The increase in sales in the Americas region for the six-month period presented above was primarily driven by an increase in sales of Gaming, Keyboards & Combos, Video Collaboration and Pointing Devices.
EMEA:
The decrease in sales in the EMEA region for the three-month period presented above was driven by a decrease in sales across all product categories. The decrease in sales in the EMEA region for the six-month period presented above was primarily driven by a decrease in sales of Keyboards & Combos, Webcams, Headsets and Gaming, partially offset by an increase in sales of Video Collaboration and Tablet Accessories. Sales in the EMEA region were negatively impacted by an overall market decline and the conflict in the Middle East.
Asia Pacific:
Sales in the Asia Pacific region remained flat for the three-month period presented above, as a decrease in sales of Tablet Accessories mainly driven by a large education deal in the prior year, was substantially offset by an increase in sales of Gaming. Sales for the three-month period were also negatively impacted by a supply shortage related to the temporary facility closure of one of our suppliers. The increase in sales in the Asia Pacific region for the six-month period presented above was primarily driven by an increase in sales of Gaming and Pointing Devices, partially offset by a decrease in sales of Tablet Accessories.
Sales by Product Category
Sales by product category for the three and six months ended September 30, 2026 and 2025 were as follows (Dollars in thousands):
|
Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||
|
Gaming (1)
|
$ | 349,252 | $ | 323,305 | 8 | % | $ | 703,482 | $ | 639,180 | 10 | % | ||||||||||||||||||||||||||
| Keyboards & Combos | 246,442 | 235,870 | 4 | 474,240 | 458,362 | 3 | ||||||||||||||||||||||||||||||||
| Pointing Devices | 230,397 | 221,094 | 4 | 457,709 | 416,874 | 10 | ||||||||||||||||||||||||||||||||
| Video Collaboration | 188,446 | 167,677 | 12 | 373,706 | 334,393 | 12 | ||||||||||||||||||||||||||||||||
| Webcams | 75,648 | 83,301 | (9) | 152,229 | 167,676 | (9) | ||||||||||||||||||||||||||||||||
| Tablet Accessories | 57,959 | 85,061 | (32) | 147,354 | 176,288 | (16) | ||||||||||||||||||||||||||||||||
| Headsets | 46,052 | 43,498 | 6 | 90,185 | 89,020 | 1 | ||||||||||||||||||||||||||||||||
|
Other (2)
|
24,642 | 26,250 | (6) | 47,167 | 51,966 | (9) | ||||||||||||||||||||||||||||||||
| Total Sales | $ | 1,218,838 | $ | 1,186,056 | 3 | % | $ | 2,446,072 | $ | 2,333,759 | 5 | % | ||||||||||||||||||||||||||
(1) Gaming includes streaming services revenue generated by Streamlabs.
(2) Other primarily consists of mobile speakers and PC speakers.
Gaming
Our Gaming category includes PC gaming (mice, headsets, keyboards), steering wheels, console gaming headsets, microphones and Streamlabs services.
Sales of Gaming increased 8% and 10% for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, respectively, primarily driven by an increase in sales of PC gaming mice, particularly PRO X2 SUPERSTRIKE launched in the fourth quarter of fiscal year 2026, partially offset by a decline in sales of PC gaming headsets. The increase in sales of Gaming for the six-month period was also driven by an increase in sales of steering wheels.
Keyboards & Combos
Our Keyboards & Combos category includes PC keyboards and keyboard/mice combo products.
Sales of Keyboards & Combos increased 4% and 3% for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, respectively, primarily driven by an increase in sales of wireless keyboards and wireless combo products, partially offset by a decrease in sales of wired keyboards. The increase in sales for both the three- and six-month periods was primarily driven by an increase in sales in the Americas region, partially offset by a decrease in sales in the EMEA and Asia Pacific regions.
Pointing Devices
Our Pointing Devices category includes PC- and Mac-related mice including trackballs, and presentation tools.
Sales of Pointing Devices increased 4% and 10% for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, respectively, primarily driven by an increase in sales of wireless mice, particularly MX Master 4 launched in the third quarter of fiscal year 2026. A continued mix shift to premium products in our portfolio contributed to sales growth in this category. The increase in sales for both the three- and six-month periods was primarily driven by an increase in sales in the Americas and Asia Pacific regions, partially offset by a decrease in sales in EMEA.
Video Collaboration
Our Video Collaboration category includes Logitech's conference room cameras, which combine affordable enterprise-quality audio and high definition 4K video to bring video conferencing to a variety of room sizes.
Sales of Video Collaboration increased 12% for each of the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, primarily due to an increase in sales of conference room cameras across all three regions reflecting a refresh of video conferencing equipment installed during the pandemic.
Webcams
Our Webcams category includes webcams and streaming cameras. Our webcams turn any desktop into an instant collaboration space.
Sales of Webcams decreased 9% for each of the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, primarily due to a decrease in sales in the EMEA and Asia Pacific regions reflecting a global market decline in Webcams.
Tablet Accessories
Our Tablet Accessories category primarily includes tablet keyboards.
Sales of Tablet Accessories decreased 32% and 16% for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, respectively, primarily due to a decrease in sales in the Asia Pacific and Americas regions. The decline in Asia Pacific was primarily due to a large education deal in the prior year while the decrease in the Americas was mainly driven by a decline in the Tablets market in the region.
Headsets
Our Headsets category includes headsets, in-ear headphones, and premium wireless earbuds.
Sales of Headsets increased 6% and 1% for the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, respectively, primarily due to an increase in sales in the Americas region, partially offset by a decrease in sales in the EMEA region.
Other
Our Other category primarily consists of mobile speakers and PC speakers.
Sales in Other category decreased 6% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily driven by a decrease in sales of PC and mobile speakers. Sales in Other category decreased 9% for the six months ended September 30, 2026, compared to the six months ended September 30, 2025, primarily driven by a decrease in sales of mobile speakers.
Gross Profit
Gross profit for the three and six months ended September 30, 2026 and 2025 was as follows (Dollars in thousands):
|
Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 1,218,838 | $ | 1,186,056 | 3 | % | $ | 2,446,072 | $ | 2,333,759 | 5 | % | ||||||||||||||||||||||||||
| Gross profit | $ | 547,033 | $ | 514,456 | 6 | % | $ | 1,154,973 | $ | 993,418 | 16 | % | ||||||||||||||||||||||||||
| Gross margin | 44.9 | % | 43.4 | % | 47.2 | % | 42.6 | % | ||||||||||||||||||||||||||||||
Gross profit consists of sales, less cost of goods sold (which includes materials, direct labor and related overhead costs, costs of manufacturing facilities, royalties, costs of purchasing components from outside suppliers, distribution costs, warranty costs, customer support costs, shipping and handling costs, outside processing costs and write-down of inventories), and amortization of intangible assets.
Gross margin was 44.9% for the three months ended September 30, 2026 and increased by 150 basis points from 43.4% for the three months ended September 30, 2025, due to lower tariff costs, supported by manufacturing diversification, favorable product mix and favorable foreign currency exchange rate changes, partially offset by higher logistics costs. Gross margin was 47.2% for the six months ended September 30, 2026 and increased by 460 basis points from 42.6% for the six months ended September 30, 2025, primarily driven by a benefit from tariff refunds, favorable foreign currency exchange rate changes and favorable product mix, partially offset by investment in strategic promotions.
Operating Expenses
Operating expenses for the three and six months ended September 30, 2026 and 2025 were as follows (Dollars in thousands):
|
Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Marketing and selling | $ | 219,533 | $ | 198,993 | $ | 439,278 | $ | 394,789 | ||||||||||||||||||
| % of sales | 18.0 | % | 16.8 | % | 18.0 | % | 16.9 | % | ||||||||||||||||||
| Research and development | 82,725 | 76,110 | 167,348 | 150,697 | ||||||||||||||||||||||
| % of sales | 6.8 | % | 6.4 | % | 6.8 | % | 6.5 | % | ||||||||||||||||||
| General and administrative | 42,983 | 41,802 | 86,508 | 83,599 | ||||||||||||||||||||||
| % of sales | 3.5 | % | 3.5 | % | 3.5 | % | 3.6 | % | ||||||||||||||||||
| Amortization of intangible assets and acquisition-related costs | 927 | 1,818 | 1,853 | 4,464 | ||||||||||||||||||||||
| % of sales | 0.1 | % | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||||||||||
| Restructuring charges, net | 309 | 4,442 | 879 | 6,484 | ||||||||||||||||||||||
| % of sales | - | % | 0.4 | % | - | % | 0.3 | % | ||||||||||||||||||
| Total operating expenses | $ | 346,477 | $ | 323,165 | $ | 695,866 | $ | 640,033 | ||||||||||||||||||
| % of sales | 28.4 | % | 27.2 | % | 28.4 | % | 27.4 | % | ||||||||||||||||||
The increase in total operating expenses during the three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, was primarily driven by increases in marketing and selling expenses and research and development expenses.
Marketing and Selling
Marketing and selling expenses consist of personnel and related overhead costs, corporate and product marketing, advertising, trade shows, technical support for customer experiences and facilities costs.
During the three and six months ended September 30, 2026, marketing and selling expenses increased $20.5 million and $44.5 million, compared to the three and six months ended September 30, 2025, respectively, primarily driven by strategic marketing investments across our product portfolio.
Research and Development
Research and development expenses consist of personnel and related overhead costs, fees for contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all associated with the design and development of new products and enhancements of existing products.
During the three and six months ended September 30, 2026, research and development expenses increased $6.6 million and $16.7 million, compared to the three and six months ended September 30, 2025, respectively, primarily driven by increased investment in product innovation.
General and Administrative
General and administrative expenses primarily consist of personnel and related overhead costs, information technology, and facilities costs for the infrastructure functions such as finance, information systems, executives, human resources and legal.
During the three and six months ended September 30, 2026, general and administrative expenses remained relatively flat as a percentage of revenue, compared to the three and six months ended September 30, 2025.
Amortization of Intangible Assets and Acquisition-Related Costs
Amortization of intangible assets consists of amortization of acquired intangible assets, including developed technology, customer relationships, and trademarks and trade names. Acquisition-related costs include legal expenses, due diligence costs, and other professional costs incurred for business acquisitions.
During the three and six months ended September 30, 2026, amortization of intangible assets and acquisition-related costs decreased $0.9 million and $2.6 million, compared to the three and six months ended September 30, 2025, respectively, driven by full amortization of certain intangible assets.
Restructuring Charges, Net
The restructuring charges, net, for the three and six months ended September 30, 2026 and September 30, 2025 were related to costs incurred as a result of our restructuring plan initiated during the fourth quarter of fiscal year 2025, which was substantially completed in fiscal year 2026.
Interest Income
Interest income for the three and six months ended September 30, 2026 and 2025 was as follows (in thousands):
|
Three Months Ended
September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
|
Interest income
|
$ | 12,441 | $ | 11,828 | $ | 26,540 | $ | 23,057 | ||||||||||||||||||
We invest in highly liquid instruments with an original maturity of three months or less at the date of purchase, which are classified as cash equivalents. During the three months ended September 30, 2026, interest income remained relatively flat compared to the three months ended September 30, 2025. During the six months ended September 30, 2026, interest income increased $3.5 million, compared to the six months ended September 30, 2025, primarily driven by interest income associated with IEEPA tariff refunds and a higher average balance of cash equivalents.
Other Income (Expense), Net
Other income (expense), net, for the three and six months ended September 30, 2026 and 2025 was as follows (in thousands):
|
Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
|
Investment gain related to the deferred compensation plan
|
$ | 115 | $ | 1,890 | $ | 3,369 | $ | 3,950 | ||||||||||||||||||
| Currency exchange gain (loss), net | 569 | (3,110) | (1,621) | (5,113) | ||||||||||||||||||||||
| Gain (loss) on investments, net | 1,598 | (104) | 2,155 | (497) | ||||||||||||||||||||||
| Non-service cost net pension income and other | 3,217 | 1,260 | 4,526 | 2,758 | ||||||||||||||||||||||
| Total | $ | 5,499 | $ | (64) | $ | 8,429 | $ | 1,098 | ||||||||||||||||||
Investment gain related to the deferred compensation plan represents earnings, gains, and losses on marketable securities related to a deferred compensation plan offered by one of our subsidiaries. The change in investment gain for three and six months ended September 30, 2026, compared to the three and six months ended September 30, 2025, primarily relates to the change in market performance of the underlying securities.
Currency exchange gain (loss), net, relates to balances denominated in currencies other than the functional currency in our subsidiaries, as well as the sale of currencies, and gains or losses recognized on currency exchange forward contracts. We do not speculate in currency positions, but we are alert to opportunities to maximize currency exchange gains and minimize currency exchange losses. The currency exchange gain (loss) for the three and six months ended September 30, 2026 was not material. The currency exchange loss for the three and six months ended September 30, 2025 was primarily due to fluctuations in currency exchange rates of the New Taiwan dollar and Swiss Franc against the U.S. Dollar.
Gain (loss) on investments, net, includes unrealized gain (loss) from the change in fair value of investments, income (loss) on equity-method investments and impairment of investments during the periods presented, as applicable. The gain (loss) on investments, net, for the three and six months ended September 30, 2026 and 2025 was not material.
During the three and six months ended September 30, 2026, the change in non-service cost net pension income and other was not material, compared to the three and six months ended September 30, 2025.
Provision for Income Taxes
The provision for income taxes and effective income tax rates for the three and six months ended September 30, 2026 and 2025 were as follows (Dollars in thousands):
|
Three Months Ended September 30, |
Six Months Ended September 30, |
|||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Provision for income taxes | $ | 38,461 | $ | 32,385 | $ | 78,344 | $ | 60,855 | ||||||||||||||||||
| Effective income tax rate | 17.6 | % | 15.9 | % | 15.9 | % | 16.1 | % | ||||||||||||||||||
The change in the effective income tax rate for the three and six months ended September 30, 2026, compared with the three and six months ended September 30, 2025, was primarily due to the change in the mix of income and losses in the various tax jurisdictions in which we operate and return to provision adjustments, offset by higher tax benefits from share-based compensation.
Following the enactment of the One Big Beautiful Bill Act ("OBBBA") on July 4, 2025, several corporate tax provisions became effective for us beginning in fiscal year 2027, including adjustments to domestic R&D expensing, bonus depreciation, and modified international frameworks. Based on our evaluation of these provisions, the final impact of the OBBBA is expected to be de minimis for fiscal year 2027 and will not materially impact our consolidated financial statements or effective tax rate.
For the three and six months ended September 30, 2026, we assessed our exposure to the OECD Pillar Two global minimum tax rules and the newly released OECD Administrative Guidance package. While the package's "Side-by-Side" System-designed to align the U.S. tax framework with Pillar Two-does not apply directly to us as a non-U.S. headquartered multinational, the broader guidance introduces a new permanent safe harbor and a one-year extension of the transitional Country-by-Country Reporting ("CbCR") safe harbor. Based on Qualified CbCR data, we expect most jurisdictions in which we operate to continue qualifying for the transitional safe harbor. For the limited jurisdictions that do not qualify, the estimated top-up tax for fiscal year 2027 is expected to be de minimis and will not materially impact our consolidated financial statements or effective tax rate. We continue to monitor ongoing legislative developments but do not anticipate a material change to our Pillar Two liability.
Liquidity and Capital Resources
Cash Balances, Available Borrowings, and Capital Resources
As of September 30, 2026, we had cash and cash equivalents of $1,507.6 million, compared with $1,741.5 million as of March 31, 2026. Our cash and cash equivalents consist of bank demand deposits, short-term time deposits, and U.S. Treasury securities, of which 66% was held in the United States, 12% was held in Switzerland and 12% was held in China (including Hong Kong). We do not expect to incur any material adverse tax impact except for what has already been recognized, or to be significantly inhibited by any country in which we do business, from the repatriation of funds to Switzerland, our country of domicile.
As of September 30, 2026, our working capital was $1,582.8 million, compared to $1,602.3 million as of March 31, 2026. The decrease was primarily driven by a decrease in cash and cash equivalents and an increase in accounts payable, partially offset by an increase in accounts receivable and inventories.
On January 27, 2025, we entered into an unsecured revolving credit facility with a syndicate of banks (the "Credit Agreement"). The Credit Agreement provides a revolving line of credit of up to $750.0 million including the issuance of letters of credit of up to $100.0 million. The Credit Agreement terminates on January 27, 2030 unless extended in accordance with its terms. The Credit Agreement contains (1) an increase option allowing us to secure up to $250.0 million of additional commitments and (2) an extension option to extend the term by one-year which may be exercised no more than two times, subject to certain requirements. Loans under the Credit Agreement are available in U.S. Dollars, Euro, Sterling, Yen, Swiss Francs, Canadian Dollars, Australian Dollars and any other currency agreed to by each lender. Proceeds of loans made under the Credit Agreement may be used for general corporate purposes.
The Credit Agreement contains a maximum net debt to adjusted EBITDA ratio, compliance with which is a condition to our ability to borrow. Borrowings under the Credit Agreement will bear interest at a rate determined by reference to benchmark rates plus an applicable spread (ranging from 0% to 1.5%) based on our net leverage ratio or credit rating at the time of the borrowing. Undrawn balances available under the Credit Agreement are subject to commitment fees at the applicable rate determined by reference to our net leverage ratio or credit rating. There has been no borrowing outstanding under the Credit Agreement as of September 30, 2026.
In addition, we had several uncommitted, unsecured bank lines of credit and letters of credit aggregating to $137.6 million as of September 30, 2026. There are no financial covenants under these lines of credit with which we must comply. There was no borrowing outstanding under these lines of credit as of September 30, 2026. As of September 30, 2026, we had outstanding bank guarantees of $2.0 million.
Key Working Capital Metrics
The following table presents selected financial information and statistics as of and for the three months ended September 30, 2026 and 2025 (Dollars in thousands):
|
As of September 30,
|
||||||||||||||
| 2026 | 2025 | |||||||||||||
| Accounts receivable, net | $ | 750,692 | $ | 703,895 | ||||||||||
| Accounts payable | $ | 639,980 | $ | 583,308 | ||||||||||
| Inventories | $ | 556,790 | $ | 517,673 | ||||||||||
|
Days sales in accounts receivable ("DSO") (Days)(1)
|
55 | 53 | ||||||||||||
|
Days accounts payable outstanding ("DPO") (Days)(2)
|
86 | 78 | ||||||||||||
|
Inventory turnover ("ITO") (x)(3)
|
4.8 | 5.2 | ||||||||||||
(1) DSO is determined using ending accounts receivable, net, as of the most recent quarter-end and sales for the most recent quarter.
(2) DPO is determined using ending accounts payable as of the most recent quarter-end and cost of goods sold for the most recent quarter.
(3) ITO is determined using ending inventories as of the most recent quarter-end and annualized cost of goods sold (based on the most recent quarterly cost of goods sold).
DSO for the three months ended September 30, 2026 increased by 2 days to 55 days, compared to 53 days for the three months ended September 30, 2025, primarily due to timing of sales and collections within the quarter.
DPO for the three months ended September 30, 2026 increased by 8 days to 86 days, compared to 78 days for the three months ended September 30, 2025, primarily due to higher inventory purchases to align with demand and component availability.
ITO for the three months ended September 30, 2026 decreased by 0.4 to 4.8, compared to 5.2 for the three months ended September 30, 2025, primarily due to a higher inventory balance than the prior year to align with demand and component availability.
If we are not successful in launching and phasing in our new products, or market competition increases, or we are not able to sell the new products at the prices planned, it could have a material impact on our sales, gross profit, operating results including operating cash flow, and inventory turnover in the future.
Cash Flow Activities
The following table summarizes our condensed consolidated statements of cash flows (in thousands):
|
Six Months Ended September 30, |
||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net cash provided by operating activities | $ | 330,269 | $ | 353,882 | ||||||||||
| Net cash used in investing activities | (36,474) | (34,294) | ||||||||||||
| Net cash used in financing activities | (525,450) | (457,820) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (2,244) | 10,834 | ||||||||||||
| Net decrease in cash and cash equivalents | $ | (233,899) | $ | (127,398) | ||||||||||
For the six months ended September 30, 2026, net cash provided by operating activities was $330.3 million resulting from net income of $415.7 million, a favorable impact from adding back non-cash expenses totaling $106.5 million, offset by an unfavorable net change in operating assets and liabilities of $191.9 million. Non-cash adjustments were primarily related to share-based compensation expenses, depreciation and amortization, and deferred income taxes. The increase in accounts receivable, net, was primarily driven by higher sales as well as
timing of sales and collections within the quarter. The increase in accounts payable and inventories was driven by higher inventory purchases to align with demand and component availability.
For the six months ended September 30, 2026, net cash used in investing activities was $36.5 million, primarily resulting from $31.5 million of purchases of property, plant, and equipment.
For the six months ended September 30, 2026, net cash used in financing activities was $525.5 million, primarily resulting from payment for repurchases of our registered shares of $284.5 million and payment of cash dividends of $235.3 million.
For the six months ended September 30, 2026, the effect of exchange rate changes on cash and cash equivalents was not material.
Cash Outlook
Our principal sources of liquidity are our cash and cash equivalents, cash flow generated from operations and, to a much lesser extent, capital markets and borrowings. Our future working capital requirements and capital expenditures may increase to support investments in product innovations and growth opportunities or to acquire or invest in complementary businesses, products, services, and technologies. Our principal uses of cash, aside from operational needs and capital expenditures, include outlays for dividends and share repurchases reflecting our commitment to return value to our shareholders.
In fiscal year 2027, we paid a cash dividend of CHF 193.8 million (U.S. Dollar amount of $235.3 million based on the exchange rate on the date of payment) out of fiscal year 2026 retained earnings. In fiscal year 2026, we paid a cash dividend of CHF 185.1 million (U.S. Dollar amount of $233.1 million based on the exchange rate on the date of payment) out of fiscal year 2025 retained earnings.
In June 2023, our Board of Directors approved a three-year share repurchase program, which allows us to use up to $1.0 billion to repurchase our shares. The 2023 share repurchase program enables us to repurchase shares for cancellation, as well as to support equity incentive plans or potential acquisitions. The Swiss Takeover Board approved the 2023 share repurchase program in July 2023 and the program became effective on July 28, 2023. In March 2025, our Board of Directors approved an increase of $600.0 million to the 2023 share repurchase program, to an aggregate amount of $1.6 billion. The 2023 share repurchase program was completed in May 2026.
In March 2026, our Board of Directors approved a new, three-year share repurchase program to repurchase shares up to an aggregate amount of $1.4 billion, or a maximum of 16,078,446 shares. The 2026 share repurchase program enables us to repurchase shares for cancellation, as well as to support equity incentive plans or potential acquisitions. The program became effective on May 8, 2026, following approval from the Swiss Takeover Board. During the six months ended September 30, 2026, we repurchased 2.7 million shares for an aggregate cost of $275.6 million for cancellation under the 2026 share repurchase program, of which $32.0 million of the aggregate cost was not paid yet as of September 30, 2026. As of September 30, 2026, $1.1 billion was available for repurchase under the 2026 share repurchase program.
Swiss law limits a company's ability to hold or repurchase its own shares. The aggregate par value of all shares held in treasury by us and our subsidiaries may not exceed 10% of our issued share capital, which corresponds to approximately 16.1 million registered shares as of September 30, 2026. This limitation does not apply to shares repurchased for cancellation, due to the Board of Directors' authority under the capital band set forth in the Company's Articles of Incorporation. As of September 30, 2026, we had a total of 18.6 million shares held in treasury stock, which includes 7.3 million shares that have been repurchased for cancellation and 11.3 million shares that have been purchased to support equity incentive plans or potential acquisitions.
Although we enter into trading plans for systematic repurchases (e.g., 10b5-1 trading plans) from time to time, our share repurchase programs provide us with the opportunity to make opportunistic repurchases during periods of favorable market conditions. 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 the SIX Swiss Exchange and/or the Nasdaq Global Select Market. Shares repurchased for cancellation purposes are repurchased via a second trading line on the SIX Swiss Exchange. Opportunistic purchases may be started or stopped at any time without prior notice depending on market conditions and other factors.
If we do not generate sufficient operating cash flows to support our operations and future planned cash requirements, our operations could be harmed and our access to credit facilities could be restricted or eliminated. Although we believe that the trend of our historical cash flow generation, our projections of future operations and our available cash balances will provide sufficient liquidity to fund our operations for at least the next 12 months, market volatility driven by the current macroeconomic and geopolitical environment may increase our costs of capital and otherwise adversely affect our business, results of operations, financial condition and liquidity.
Operating Lease Obligations
We lease facilities under operating leases, certain of which require us to pay property taxes, insurance and maintenance costs. Operating leases for facilities are generally renewable at our option and include escalation clauses. As of September 30, 2026, the remaining terms of our non-cancelable operating leases expire in various years through 2037. Subsequent to September 30, 2026, we executed a ten-year operating lease for an office space in the Asia Pacific region with total undiscounted future lease payment obligations of approximately $40 million, expected to commence in January 2029. There have been no other material changes to our contractual obligations as previously disclosed in our Annual Report on Form 10-K for the year ended March 31, 2026.
Purchase Commitments
As of September 30, 2026, we had non-cancelable purchase commitments of $698.2 million for inventory purchases made in the normal course of business from original design manufacturers, contract manufacturers and other suppliers, the majority of which are expected to be fulfilled within the next 12 months. We recorded a liability for firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with our valuation of excess and obsolete inventory. As of September 30, 2026, the liability for these purchase commitments was $16.0 million and is recorded in accrued and other current liabilities in the condensed consolidated balance sheet.
As of September 30, 2026, we have firm purchase commitments of $22.2 million for capital expenditures primarily related to commitments for tooling and equipment for new and existing products. We expect to continue making capital expenditures in the future to support product development activities and ongoing and expanded operations. Although open purchase commitments are considered enforceable and legally binding, the terms generally allow us to reschedule or adjust our requirements based on business needs prior to delivery of goods or performance of services.
Other Contractual Obligations and Commitments
For further detail about our contractual obligations and commitments, refer to our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.
Indemnifications
We indemnify certain suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances includes indemnification for damages and expenses, including reasonable attorneys' fees. As of September 30, 2026, no material amounts have been accrued for indemnification provisions. We do not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under our indemnification arrangements.
We also indemnify our current and former directors and certain current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. We are unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not capped, the obligations are conditional in nature, and the facts and circumstances involved in any situation that might arise are variable.
Legal Proceedings
From time to time, we are involved in claims and legal proceedings that arise in the ordinary course of our business. For more information about Legal Proceedings, see Part II Item 1 Legal Proceedings of this quarterly report on Form 10-Q for the period ended September 30, 2026.
Logitech International SA published this content on October 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 28, 2026 at 20:36 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]