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Logitech's (LOGI) Q4 Earnings and Revenues Crush Estimates
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Logitech International S.A. (LOGI - Free Report) ended fiscal 2024 on a strong note by reporting better-than-expected results in the fourth quarter. The computer peripheral and software maker’s fiscal fourth-quarter non-GAAP earnings of 99 cents per share beat the Zacks Consensus Estimate of 63 cents per share and registered a year-over-year increase of 98%. The company’s fourth-quarter bottom-line results mainly benefited from increased revenues, and lower product and logistics costs.
Logitech’s fiscal fourth-quarter revenues of $1.01 billion outpaced the consensus mark of $956.9 million. Moreover, the top line marked a year-over-year increase of 5% on a reported basis as well as on a constant-currency basis, mainly driven by increased demand across key product categories and lower inventory reductions by channel partners compared with the year-ago quarter.
The quarter marked the first year-over-year sales growth for Logitech after two and a half years of downturn post pandemic-driven boom. It has been reporting declining revenues on a year-over-year basis since October 2021.
In 2020 and 2021, LOGI benefited from the elevated demand for its video collaboration, keyboards & combos and pointing device tools, mainly driven by the heightening of work-from-home and learn-from-home trends. Additionally, the demand for gaming products shot up due to the growing popularity of online video games and eSports amid the stay-at-home scenario. However, the demand softened due to the reopening of economic and business activities later on.
Logitech International S.A. Price, Consensus and EPS Surprise
Logitech registered sales growth across the majority of key product categories year over year. In the first quarter of fiscal 2024, Logitech reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.
Revenues from Keyboards & Combos improved 15% year over year to $216.2 million, while Gaming revenues increased 7% year over year to $273.5 million. Our model estimates for Keyboards & Combos and Gaming sales were pegged at $184 million and $251.8 million, respectively.
Revenues from the Headsets product category soared 16% to $45.5 million, Pointing Devices grew 6% to $170.7 million, Webcams improved 4% to $76 million and Video Collaboration increased 3% to $148.1 million. Our model estimates for Headsets, Pointing Devices, Webcams and Video Collaboration were pegged at $34.9 million, $158.6 million, $73.7 million and $141.2 million, respectively.
On the other hand, Tablet Accessories’ sales plunged 18% to $55.8 million, while the Other category’s revenues fell 16% to $25.8 million. Our estimates for Logitech’s Tablet Accessories and Other product categories’ fourth-quarter revenues were pegged at $66.3 million and $33.9 million, respectively.
Margins & Operating Metrics
The non-GAAP gross profit jumped 26.5% to $441.4 million from $348.8 million in the year-ago quarter. The non-GAAP gross margin expanded 730 basis points (bps) from the prior-year quarter to 43.6%. The year-over-year increase was driven by lower product and logistics costs and reduced promotional activities, partially offset by an unfavorable product mix.
Non-GAAP operating expenses increased 6.1% to $282.8 million. As a percentage of revenues, non-GAAP operating expenses rose 20 bps to 28%.
The non-GAAP operating income soared 92.7% to $158.6 million from $82.3 million reported in the year-ago quarter. The operating margin improved 710 bps to 15.7% from 8.6% in the year-ago quarter. The increase in the operating margin mainly reflects improved gross margins, partially offset by higher operating expenses as a percentage of sales.
Fiscal 2024 Key Highlights
For fiscal 2024, the company reported revenues of $4.3 billion, which outpaced the Zacks Consensus Estimate of $4.24 billion as well as came ahead of management’s guidance range of $4.2-$4.25 billion. However, sales declined 5% on a reported basis and 6% on constant currency when compared with fiscal 2023 sales.
Non-GAAP earnings of $4.25 per share beat the consensus mark of $3.90 per share. The bottom line marked a year-over-year improvement of 32%.
Liquidity and Shareholder Return
As of Mar 31, 2024, LOGI’s cash and cash equivalents were $1.52 billion, up from $1.41 billion recorded in the previous quarter. Additionally, the company generated $239.1 million in cash from operational activities in the fourth quarter and $1.15 billion in fiscal 2024.
In the fourth quarter, the company repurchased shares worth $127.4 million but did not pay out dividends. In fiscal 2024, it bought back shares worth $504.2 million and paid $182.3 million in dividends.
Fiscal 2025 Guidance
Logitech expects fiscal 2025 sales in the band of $4.3-$4.4 billion, which indicates an increase of 0-2%. The company projects non-GAAP gross margin and non-GAAP operating expenses as a percentage of revenues to be 41% and 25%, respectively. The non-GAAP operating income is anticipated in the range of $685-$715 million.
Logitech forecasts a non-GAAP effective tax rate for fiscal 2025 to be approximately 12%. It estimates to incur approximately $70 million in capital expenditures and generate cash flow from operating activities equal to the non-GAAP operating income for the fiscal.
Zacks Rank & Stocks to Consider
Logitech currently carries a Zacks Rank #3 (Hold). LOGI stock has plunged 16.5% in the year-to-date (YTD) period.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 6 cents upward 10 cents to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 77.2% YTD.
The Zacks Consensus Estimate for Bentley Systems’ 2024 earnings has been revised downward by a penny to $1.01 per share in the past 30 days, which calls for an increase of 11% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 12.1%. BSY shares have increased 2.6% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by a penny to $2.71 per share over the past 30 days, which indicates a 10.6% increase from 2023. It has a long-term earnings growth expectation of 19.6%. The TWLO stock has declined 19.3% in the YTD period.
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Logitech's (LOGI) Q4 Earnings and Revenues Crush Estimates
Logitech International S.A. (LOGI - Free Report) ended fiscal 2024 on a strong note by reporting better-than-expected results in the fourth quarter. The computer peripheral and software maker’s fiscal fourth-quarter non-GAAP earnings of 99 cents per share beat the Zacks Consensus Estimate of 63 cents per share and registered a year-over-year increase of 98%. The company’s fourth-quarter bottom-line results mainly benefited from increased revenues, and lower product and logistics costs.
Logitech’s fiscal fourth-quarter revenues of $1.01 billion outpaced the consensus mark of $956.9 million. Moreover, the top line marked a year-over-year increase of 5% on a reported basis as well as on a constant-currency basis, mainly driven by increased demand across key product categories and lower inventory reductions by channel partners compared with the year-ago quarter.
The quarter marked the first year-over-year sales growth for Logitech after two and a half years of downturn post pandemic-driven boom. It has been reporting declining revenues on a year-over-year basis since October 2021.
In 2020 and 2021, LOGI benefited from the elevated demand for its video collaboration, keyboards & combos and pointing device tools, mainly driven by the heightening of work-from-home and learn-from-home trends. Additionally, the demand for gaming products shot up due to the growing popularity of online video games and eSports amid the stay-at-home scenario. However, the demand softened due to the reopening of economic and business activities later on.
Logitech International S.A. Price, Consensus and EPS Surprise
Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. Quote
Segment Details
Logitech registered sales growth across the majority of key product categories year over year. In the first quarter of fiscal 2024, Logitech reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.
Revenues from Keyboards & Combos improved 15% year over year to $216.2 million, while Gaming revenues increased 7% year over year to $273.5 million. Our model estimates for Keyboards & Combos and Gaming sales were pegged at $184 million and $251.8 million, respectively.
Revenues from the Headsets product category soared 16% to $45.5 million, Pointing Devices grew 6% to $170.7 million, Webcams improved 4% to $76 million and Video Collaboration increased 3% to $148.1 million. Our model estimates for Headsets, Pointing Devices, Webcams and Video Collaboration were pegged at $34.9 million, $158.6 million, $73.7 million and $141.2 million, respectively.
On the other hand, Tablet Accessories’ sales plunged 18% to $55.8 million, while the Other category’s revenues fell 16% to $25.8 million. Our estimates for Logitech’s Tablet Accessories and Other product categories’ fourth-quarter revenues were pegged at $66.3 million and $33.9 million, respectively.
Margins & Operating Metrics
The non-GAAP gross profit jumped 26.5% to $441.4 million from $348.8 million in the year-ago quarter. The non-GAAP gross margin expanded 730 basis points (bps) from the prior-year quarter to 43.6%. The year-over-year increase was driven by lower product and logistics costs and reduced promotional activities, partially offset by an unfavorable product mix.
Non-GAAP operating expenses increased 6.1% to $282.8 million. As a percentage of revenues, non-GAAP operating expenses rose 20 bps to 28%.
The non-GAAP operating income soared 92.7% to $158.6 million from $82.3 million reported in the year-ago quarter. The operating margin improved 710 bps to 15.7% from 8.6% in the year-ago quarter. The increase in the operating margin mainly reflects improved gross margins, partially offset by higher operating expenses as a percentage of sales.
Fiscal 2024 Key Highlights
For fiscal 2024, the company reported revenues of $4.3 billion, which outpaced the Zacks Consensus Estimate of $4.24 billion as well as came ahead of management’s guidance range of $4.2-$4.25 billion. However, sales declined 5% on a reported basis and 6% on constant currency when compared with fiscal 2023 sales.
Non-GAAP earnings of $4.25 per share beat the consensus mark of $3.90 per share. The bottom line marked a year-over-year improvement of 32%.
Liquidity and Shareholder Return
As of Mar 31, 2024, LOGI’s cash and cash equivalents were $1.52 billion, up from $1.41 billion recorded in the previous quarter. Additionally, the company generated $239.1 million in cash from operational activities in the fourth quarter and $1.15 billion in fiscal 2024.
In the fourth quarter, the company repurchased shares worth $127.4 million but did not pay out dividends. In fiscal 2024, it bought back shares worth $504.2 million and paid $182.3 million in dividends.
Fiscal 2025 Guidance
Logitech expects fiscal 2025 sales in the band of $4.3-$4.4 billion, which indicates an increase of 0-2%. The company projects non-GAAP gross margin and non-GAAP operating expenses as a percentage of revenues to be 41% and 25%, respectively. The non-GAAP operating income is anticipated in the range of $685-$715 million.
Logitech forecasts a non-GAAP effective tax rate for fiscal 2025 to be approximately 12%. It estimates to incur approximately $70 million in capital expenditures and generate cash flow from operating activities equal to the non-GAAP operating income for the fiscal.
Zacks Rank & Stocks to Consider
Logitech currently carries a Zacks Rank #3 (Hold). LOGI stock has plunged 16.5% in the year-to-date (YTD) period.
Some better-ranked stocks in the broader technology sector are NVIDIA (NVDA - Free Report) , Bentley Systems (BSY - Free Report) and Twilio (TWLO - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 6 cents upward 10 cents to $23.94 per share in the past 30 days, which suggests year-over-year growth of 84.7%. The long-term estimated earnings growth rate for the stock stands at 30.9%. The NVDA stock has soared 77.2% YTD.
The Zacks Consensus Estimate for Bentley Systems’ 2024 earnings has been revised downward by a penny to $1.01 per share in the past 30 days, which calls for an increase of 11% on a year-over-year basis. The long-term expected earnings growth rate for the stock is pegged at 12.1%. BSY shares have increased 2.6% YTD.
The consensus mark for Twilio’s 2024 earnings has been revised upward by a penny to $2.71 per share over the past 30 days, which indicates a 10.6% increase from 2023. It has a long-term earnings growth expectation of 19.6%. The TWLO stock has declined 19.3% in the YTD period.