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LOGITECH INTERNATIONAL S.A. (LOGI)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 sales were $1.01B, flat YoY (+2% cc), with non-GAAP EPS of $0.93 (-6% YoY) and GAAP EPS of $0.96 (-10% YoY); non-GAAP gross margin was 43.5% and GAAP gross margin 43.1% .
  • Management cited a bad debt expense and strategic investments as drivers of lower operating income in Q4; CFO later detailed a Digital River-related bad debt reserve impacting OpEx, with ~$40M recorded in Q3 and the balance in Q4 .
  • Q1 FY2026 outlook: sales $1.10B–$1.15B (USD growth +1%–6%; cc 0%–5%), non-GAAP operating income $155M–$185M; gross margin guided to 41%–42% given ~200 bps tariff headwind (mitigated by pre-tariff inventory), which would be ~500 bps absent mitigation .
  • Versus S&P Global consensus, Q4 revenue missed ($1.01B vs $1.04B*), while non-GAAP EPS beat ($0.93 vs $0.83*); prior two quarters saw broad beats on EPS and revenue in Q3 and EPS beats in Q2* .

What Went Well and What Went Wrong

What Went Well

  • Five consecutive quarters of YoY net sales growth; Q4 demand strength with keyboards/combos and pointing devices delivering record sales at the high end (MX, ERGO) .
  • Non-GAAP gross margin expanded to 43.5% for FY25 (+170 bps YoY), driven by record product cost reductions; Q4 non-GAAP gross margin was 43.5% .
  • Strategic resilience: diversified manufacturing footprint and ability to shift production rapidly; plan to reduce U.S.-sourced-from-China share from ~40% to ~10% by end of calendar 2025 .

Quotes

  • “Our fourth quarter reflected all of these same strategic factors as well as disciplined execution by our teams.” — CFO Matteo Anversa .
  • “We will focus on three core principles - playing offense, disciplined cost control and agility.” — CEO Hanneke Faber .

What Went Wrong

  • Q4 GAAP operating income down 19% YoY and non-GAAP operating income down 16% YoY due to bad debt expense and strategic investments; GAAP EPS down 10% YoY, non-GAAP EPS down 6% YoY .
  • Tariff environment drove ~200 bps GM headwind expected in Q1 FY26, with broader uncertainty forcing withdrawal of FY26 full-year outlook .
  • In Europe, Q4 sell-through slowed vs earlier quarters amid inventory normalization and election-related caution, though FY25 EMEA grew 9% cc .

Financial Results

Key Metrics by Quarter

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Billions)$1.116 $1.340 $1.010
GAAP Gross Margin %43.6% 42.9% 43.1%
Non-GAAP Gross Margin %44.1% 43.2% 43.5%
GAAP Operating Income ($USD Millions)$160.9 $234.6 $105.9
Non-GAAP Operating Income ($USD Millions)$192.8 $265.9 $133.5
GAAP Diluted EPS ($)$0.95 $1.32 $0.96
Non-GAAP Diluted EPS ($)$1.20 $1.59 $0.93

Actual vs S&P Global Consensus

MetricQ2 2025Q3 2025Q4 2025
Revenue Actual ($USD Billions)$1.116 $1.340 $1.010
Revenue Consensus ($USD Billions)$1.118*$1.255*$1.036*
EPS (Non-GAAP) Actual ($)$1.20 $1.59 $0.93
EPS Consensus ($)$0.91*$1.32*$0.83*

Beats/Misses

  • Q4: Revenue miss; EPS beat* .
  • Q3: Revenue beat; EPS beat* .
  • Q2: Revenue in-line/marginal miss; EPS beat* .

Values marked with * were retrieved from S&P Global.

Product Category Net Sales (Q4 FY2025 vs Q4 FY2024)

CategoryQ4 2024 ($MM)Q4 2025 ($MM)YoY Change
Gaming$273.5 $261.8 -4%
Keyboards & Combos$216.2 $220.6 +2%
Pointing Devices$170.7 $185.9 +9%
Video Collaboration$148.1 $143.2 -3%
Webcams$76.0 $77.9 +3%
Tablet Accessories$55.8 $58.0 +4%
Headsets$45.5 $42.7 -6%
Other$25.8 $20.2 -21%
Total$1,011.5 $1,010.4 ~0%

KPIs

KPIQ4 2025
Cash from Operations ($MM)$129.7
Sell-through vs Sell-inSell-through outpaced sell-in by ~2 points
Owned Inventory q/q change+~$20MM q/q (pre-tariff build)
Non-GAAP Gross Margin (FY25)43.5%
Year-end Cash$1.503B

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
SalesFY2025$4.39–$4.47B $4.54–$4.57B Raised
Non-GAAP Operating IncomeFY2025$720–$750MM $755–$770MM Raised
Full-Year OutlookFY2026Not provided in these docsWithdrawn (due to tariff uncertainty) Withdrawn
SalesQ1 FY2026—$1,100–$1,150MM; USD YoY +1%–6%; cc 0%–5% New
Non-GAAP Operating IncomeQ1 FY2026—$155–$185MM New
Gross MarginQ1 FY2026—41%–42% (incl. ~200bps tariff headwind) New

Earnings Call Themes & Trends

TopicQ2 FY2025 (Q-2)Q3 FY2025 (Q-1)Q4 FY2025 (Current)Trend
Tariffs/MacroNo FY26 view; freight costs creeping; FY25 GM 42%–43% Raised FY25 outlook; noted FX headwinds expected in Q4 FY26 outlook withdrawn; Q1 GM headwind ~200 bps from tariffs; would be ~500 bps absent pre-tariff inventory Deteriorating visibility; tactical mitigation
Supply Chain Diversification40% shipped from outside China; target 50% near-term —For U.S. volume, reduce China-origin from ~40% to ~10% by YE 2025 Accelerating diversification
Pricing StrategyHoliday promotions up; margins aided by cost reductions —Targeted U.S. price increases from mid-April; avg ~10% on U.S. products; double-digit on select SKUs Implemented selective pricing
Product Innovation39 new products; heavy gaming and PWS launches; Logi PLAY/WORK events Gaming near pandemic-high; premium MX/PRO strong Continued category breadth; MX & ERGO record quarter Sustained product momentum
Regional TrendsEMEA standout; U.S. category markets turned positive; China “green shoots” EMEA execution exceptional; tablets/headsets key Europe slower in Q4 due to inventory normalization and election; FY25 EMEA +9% cc Mixed near-term; strong FY trajectory
Video Collaboration/ServicesVC sustained, services bookings up ~2x —VC demand mid-single-digit; #1 units; services momentum continues Building services mix
Freight/LogisticsFreight costs rising in some lanes —Asia→U.S. lanes still up YoY; potential easing later Cost pressure persists
OpEx DisciplineOpEx 24%–26% framework; “good cholesterol” focus (R&D, S&M) —Tight G&A controls: cut contractors/T&E; delay hires Incremental discipline

Management Commentary

  • Strategy and posture: “We will focus on three core principles - playing offense, disciplined cost control and agility.” — CEO Hanneke Faber .
  • Tariff impact pacing: “In the first quarter, the negative impact of the current tariffs on our global gross margin rates will be approximately 200 basis points… Otherwise… approximately 500 basis points at a company level.” — CFO Matteo Anversa .
  • Pricing approach: “Some prices have remained unchanged. Others have seen double-digit percentage increases… about 10% of price increase on our U.S. product.” — CFO Matteo Anversa .
  • Supply chain resilience: “By the end of this calendar year, we're planning for only about 10% of U.S. products to be sourced from China.” — CEO Hanneke Faber .
  • Bad debt reserve: OpEx “includes approximately $23M of bad debt reserve… due to the inability of our e-commerce payment provider, Digital River, to pay us. Now of this amount, $40M was recorded in third quarter and the balance was recorded in the fourth quarter.” — CFO Matteo Anversa .

Q&A Highlights

  • Gross margin bridge for Q1 FY26: ~200 bps tariff headwind (mitigated by pre-tariff inventory), ~100 bps headwind from lapping prior reserve releases, ~100 bps pricing tailwind .
  • Pricing reception: too early to assess; brand strength expected to protect demand; selective SKUs with double-digit increases .
  • Demand linearity: consumer resilient; mix of “no-buy” frugality vs pull-forward vs YOLO segments; B2B more cautious in Europe; VC as travel reduction hedge .
  • Channel dynamics: Q4 sell-through > sell-in by ~2 points; healthy channel inventory; plan for sell-in to mirror sell-through ahead .
  • OpEx actions: tighten G&A (contractors, outside services, consulting, T&E, hiring delays) while continuing to fund R&D and S&M .

Estimates Context

  • Q4 FY2025 vs consensus: Revenue $1.010B actual vs $1.036B consensus (miss); Non-GAAP EPS $0.93 actual vs $0.83 consensus (beat)* .
  • Prior quarters: Q3 revenue/elevated EPS beats; Q2 EPS beat with revenue roughly in-line/marginal miss* .
  • Implications: Near-term models likely adjust for Q1 GM (41–42%) and tariff headwinds, with price realization and diversification offsets; FY26 uncertainty limits full-year visibility .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term margin risk from tariffs; management expects 41%–42% GM in Q1 FY26 with mitigation from pre-tariff inventory and targeted U.S. price hikes .
  • Structural cost actions and product value engineering underpin high-40s non-GAAP GM for FY25 and support medium-term margin resilience despite freight/promotions .
  • Diversification of U.S. sourcing away from China (target ~10% by YE 2025) reduces tariff exposure and improves supply chain resilience over time .
  • Category mix remains favorable: premium MX/ERGO and gaming momentum, with VC services scaling; Europe delivered strong FY25 despite Q4 normalization .
  • Bad debt reserve tied to Digital River weighed on OpEx/earnings in H2; transient nature suggests limited recurrence risk if collections stabilize .
  • Guidance reset: FY26 full-year outlook withdrawn; Q1 FY26 outlook anchors near-term expectations; catalysts include price realization pace and trade policy clarity .
  • Trading setup: Expect sensitivity to tariff headlines and Q1 price elasticity; watch gross margin delivery vs 41%–42% guide and progress on supply chain rebalancing .