• With added options, Green Source Advantage Choice helps large businesses access renewable energy on Duke Energy (NYSE:)’s grid

CHARLOTTE, N.C., Oct. 22, 2024 /PRNewswire/ — Duke Energy (NYSE: DUK) has received approval for Green Source Advantage Choice (GSA-C) in North Carolina, a program that provides the opportunity for large business customers to support renewable energy development by supplementing their power usage with 100% renewable, carbon-free generation.

“Green Source Advantage Choice builds upon the success with our legacy Green Source Advantage program that has allowed large business customers to make decarbonization a long-term part of business plans,” said Kendal Bowman, Duke Energy North Carolina state president. “We started with stakeholder discussions in 2022, and it has been a priority to develop an offering that meets the needs of customers while working within the regulatory framework.”

Duke Energy’s foundational Green Source Advantage (GSA) program supports renewable energy development by providing large nonresidential customers the opportunity to offset their power purchases by securing renewable energy from new projects connected to the local Duke Energy grid. The GSA-C program builds upon that with key modifications, including up to 5,000 megawatts (MW) of capacity “ more than five times the capacity that was available under the original versions of the program. GSA-C provides large business customers with a path toward having 24/7 clean energy and enables them to count the renewable energy generated to satisfy their sustainability goals.

The program incorporates key new features including an additional bill credit option and the ability for customers to increase the capacity they can apply to match 100% of their energy usage. As a voluntary program, GSA-C is fully funded by participating large business customers, with no cost to customers who choose not to participate.

GSA-C continues to offer large business customers the flexibility of selecting and negotiating all price terms directly with a renewable supplier of their choice, including securing clean energy environmental attributes (CEEAs) generated by that renewable facility. CEEAs are comprised of both the renewable energy certificate (REC) and the carbon emission reduction attribute associated with renewable energy generation. Customers will have the option of combining battery storage at the renewable facility, and the customer and developer may choose a mutually agreeable contract length.

GSA-C offers customers several options, including:

• Bring Your Own Purchased Power Agreement (PPA) “ The continuation of the traditional “Bring Your Own PPA” option is currently available and offers 250 MW of capacity annually.
• Resource Acceleration Option (RAO) “ The RAO is available and modeled on the Bring Your Own PPA option but offers an additional 300 MW of capacity every two years.
• Work with Duke Energy “ A new ‘easy option’ allows customers to collaborate directly with Duke Energy on new facilities that will be coming online and operational in the future. These facilities can be Duke Energy-generated or operated and maintained by a third party. With planning and construction of these new projects underway, additional details on this option will be available in the coming months.

“The revenue from the sale of clean energy environmental attributes (CEEAs), or carbon-free attributes, means that Green Source Advantage Choice not only provides a valuable solution to our customers but allows all of our retail customers to share in the advantages of clean energy benefits “ regardless of whether they participate in the program,” said Bowman.

Later this year, Duke Energy also plans to file Clean Energy Connection with the North Carolina Utilities Commission (NCUC). The proposed is a subscription-based community solar program will allow for an additional way for customers to meet their sustainability goals.

Similar programs have also been approved and are underway in South Carolina.

More information: Green Source Advantage Program – Duke Energy (duke-energy.com)

Duke Energy

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America’s largest energy holding companies. The company’s electric utilities serve 8.4 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 54,800 megawatts of energy capacity. Its utilities serve 1.7 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.

Duke Energy is executing an ambitious clean energy transition, keeping reliability, affordability and accessibility at the forefront as the company works toward net-zero methane emissions from its natural gas business by 2030 and net-zero carbon emissions from electricity generation by 2050. The company is investing in major electric grid upgrades and cleaner generation, including expanded energy storage, renewables, natural gas and nuclear.

More information is available at duke-energy.com and the Duke Energy News Center. Follow Duke Energy on X, LinkedIn, Instagram and Facebook (NASDAQ:), and visit illumination for stories about the people and innovations powering our energy transition.

Contact: Logan Stewart
24-Hour: 800.559.3853

Funds Support Children’s Wellness, Conservation and Food Insecurity

HONOLULU–(BUSINESS WIRE)–Today, Marriott Vacations Worldwide (MVW), a leading global vacation company, announced a $50,000 donation in charitable gifts to Kapi’Olani Medical Center for Women & Children, Maui Food Bank and Treecovery Hawai˜i. Timed with the opening of its 12th property in Hawai’i, the donation highlights MVW’s commitment to support missions focused on children’s wellness, fighting food insecurity and conservation.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20241022911603/en/

This donation represents our dedication to Hawai’i, our commitment to its environment and people, and our appreciation for the community that has continuously welcomed us in as part of its Ohana, said John Geller, president and CEO at Marriott Vacations Worldwide. It’s an honor to be able to provide resources to community members who need it most.

This contribution also reinforces the company’s ongoing effort to support Hawai’i and Maui’s recovery from the August 2023 wildfires. Earlier this year, MVW resorts including Marriott’s Maui Ocean Club and The Westin Nanea Ocean Villas partnered with Treecovery to open several grow hubs in the region, helping recover some of the estimated 25,000 trees that were damaged or lost in the fires.

We are incredibly grateful for the unwavering support we’ve received from Marriott Vacations Worldwide and its local teams, said Duane Sparkman, founder and president of Treecovery Hawai˜i. This donation will help us accelerate our continued recovery and reforestation efforts. Together, we are rebuilding our communities and helping our land heal.

MVW has also raised nearly $1 million since 2020 for Kapi’Olani Medical Center for Women & Children, the local Children’s Miracle Network hospital. And as part of the company’s national commitment to fighting food insecurity, MVW properties on Maui have provided more than 15,000 meals to Maui Food Bank since 2023.

Marriott Vacations Worldwide presented the benefitting organizations with checks at the October 21 grand opening celebration of Marriott Vacation Club, WaikÄ«kÄ« “ a 110-room urban retreat on O’ahu’s south shore located on Kalakaua Avenue, one of Honolulu’s best-known retail avenues. As the latest addition to The Marriott Vacation Club’s City Collection portfolio, the new property features two floors of retail space and premium amenities including a rooftop deck with infinity-edge pool, breathtaking island and ocean views, and more.

The opening of Marriott Vacation Club, WaikÄ«kÄ« has added nearly 100 new jobs to Hawai’i with a company that employs more than 3,600 associates across the region. MVW has been recognized several times as a top employer, including being named Newsweek’s #1 Most Loved Workplace in 2023. To learn more about MVW’s local job openings, visit careers.marriottvacationsworldwide.com.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products, and services. The Company has approximately 120 vacation ownership resorts and approximately 700,000 owner families in a diverse portfolio that includes some of the most iconic vacation ownership brands. The Company also operates an exchange network and membership programs comprised of more than 3,200 affiliated resorts in over 90 countries and territories, and provides management services to other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International (NASDAQ:), Inc. and an affiliate of Hyatt Hotels (NYSE:) Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241022911603/en/

Cameron Klaus
Global Communications
407-513-6606
cameron.klaus@mvwc.com

Source: Marriott Vacations Worldwide Corporation

In a recent earnings call, Logitech (NASDAQ:) International S.A. (LOGI) disclosed its financial results for the second quarter of Fiscal Year 2025, showcasing a robust performance with a 6% year-over-year increase in net sales, particularly in the EMEA region. CEO Hanneke Faber and new CFO Matteo Anversa reported an improvement in gross margins to 44.1%, crediting effective cost management and inventory sales.

The company’s strategic initiatives and product launches have led to recognition by Time Magazine and Forbes, and despite anticipated promotional pressures, Logitech has raised its fiscal year outlook for revenue and profit, maintaining a strong cash position and returning significant value to shareholders.

Key Takeaways

• Net sales increased by 6% year-over-year, with strong growth in the EMEA region.
• Gross margins improved to 44.1%, a rise of 210 basis points.
• Logitech launched 18 new gaming products and innovative personal workspace solutions.
• Recognized by Time Magazine and Forbes for branding and employer excellence.
• Raised fiscal year outlook for revenue and profit, with a strong cash position of $1.4 billion.
• Anticipates gross margin between 42% and 43% for the fiscal year, with a slight decline in the second half.

Company Outlook

• Gross margin expectations for the fiscal year remain between 42% and 43%.
• Revenue split projected to be closer to 50%-50% between the first and second halves.
• Positive trends in video collaboration and gaming segments, with market share gains from new products.
• Strong growth in Europe for tablets and gaming headsets, improving gross margins in these categories.

Bearish Highlights

• Slight sequential decline in gross margin expected, falling to 41%-42% in the second half of the year.
• Challenges in selling previously reserved inventory and increased freight costs.
• Increased promotional activities during the holiday season impacting operating income.

Bullish Highlights

• Two consecutive quarters of outperforming year-over-year growth.
• Successful cost reduction efforts contributing to gross margin improvement.
• Diversification of supply chain reducing tariff impacts, with 40% of units shipped from outside China.

Misses

• Anticipated revenue declines of approximately 2% and operating income declines of 12% in the second half.
• Negative operating leverage this quarter due to higher operational expenses compared to revenue growth.

Q&A highlights

• Management is reallocating OpEx to R&D and sales and marketing.
• Continued investments in product development and sales to support growth.
• Expansion into new verticals such as retail and healthcare, starting with the education market.

Logitech’s executives emphasized their strategic investments and operational discipline as they navigate market challenges and seek growth opportunities. The company’s focus on diversifying its supply chain and reallocating operating expenses to support growth demonstrates a commitment to long-term success, while the anticipation of increased promotional activities reflects the seasonal dynamics of the consumer market. With a positive outlook on demand and a strategy to gradually expand into new markets, Logitech is poised to maintain its trajectory of innovation and market leadership.

InvestingPro Insights

Logitech’s strong financial performance, as highlighted in the recent earnings call, is further supported by data from InvestingPro. The company’s market capitalization stands at $12.41 billion, reflecting investor confidence in its growth strategy and market position.

InvestingPro data shows that Logitech’s revenue for the last twelve months as of Q1 2025 was $4.41 billion, with a quarterly revenue growth of 11.67% in Q1 2025. This aligns with the company’s reported 6% year-over-year increase in net sales and supports the raised fiscal year outlook for revenue.

The company’s profitability is underscored by its adjusted operating income of $669.62 million and an operating income margin of 15.18% for the last twelve months. This robust profitability is consistent with the improved gross margins mentioned in the earnings call.

An InvestingPro Tip indicates that Logitech has been aggressively buying back shares, which complements the company’s statement about returning significant value to shareholders. Additionally, another InvestingPro Tip reveals that Logitech holds more cash than debt on its balance sheet, corroborating the strong cash position of $1.4 billion reported in the earnings call.

Investors might be interested to know that Logitech has raised its dividend for 11 consecutive years, according to InvestingPro Tips. This consistent dividend growth, coupled with the company’s strong financial performance, suggests a commitment to shareholder returns that aligns with the positive outlook presented by management.

For those seeking a deeper analysis, InvestingPro offers 8 additional tips that could provide further insights into Logitech’s financial health and market position.

Full transcript – Logitech International SA (LOGI) Q2 2025:

Nate Melihercik: Good morning and good afternoon. Welcome to Logitech’s Video Call to discuss our Financial Results for the Second Quarter of Fiscal Year 2025. Joining us today are Hanneke Faber, our CEO, and Matteo Anversa, our CFO. During this call, we will make forward-looking statements, including with respect to future operating results, under the Safe Harbor of the Private Securities Litigation Reform Act of 1995. We’re making these statements based on our views only as of today, and our actual results could differ materially. We undertake no obligation to update or revise any of these statements. We will also discuss non-GAAP financial results. And you can find a reconciliation between GAAP and non-GAAP results and information about our use of non-GAAP measures and factors that could impact our financial results and forward-looking statements in our press release and in our filings with the SEC. These materials, as well as the shareholder letter and a webcast of this call, are all available at the Investor Relations page of our website. We encourage you to review these materials carefully. Unless noted otherwise, comparisons between periods are year-over-year and in constant currency and net sales. This call is being recorded and will be available for a replay on our website. I will now turn the call over to Hanneke. Hanneke.

Hanneke Faber: Thanks, Nate, and welcome everyone to our second quarter earnings call. First, it is my pleasure to introduce you to our new Chief Financial Officer, Matteo Anversa. As a seasoned public company CFO, Matteo brings skills and experience really well suited to Logitech. His background in engineering and industrial technology, his diverse B2B experiences, and his global perspective as an Italian-American who has lived and worked around the world, make him a terrific addition to our leadership team. Matteo, welcome to your first Logitech earnings call. Now to the quarter. This quarter, we said — we did what we said we would do. We closed out the first half of our 2025 fiscal with strong results, which give us confidence looking forward. Let me touch on three highlights. First, we delivered high quality growth. This growth was driven by demand, and it was very profitable, above our long-term operating model for both gross and operating margins. The growth was broad-based across product categories and regions, including another standout quarter from EMEA. And we grew the business responsibly and with operational discipline. Channel inventories remained well within the healthy range in which we’ve operated for the last several quarters. Second, we achieved these results as we executed effectively against our strategic priorities. We are doubling down on B2B. In Q2, enterprise demand modestly outpaced consumer demand. Video collaborations showed sustained and profitable growth. And we saw strong growth of our personal workspace product in the enterprise channel. We continued to build the Logitech brand, and we were delighted that our brand building efforts were recognized by Time Magazine, who named Logitech one of the world’s best brands of 2024 just last week. And most importantly, Q2 was an excellent quarter for innovation. Innovation is at the very heart of what Logitech does, and we launched a terrific series of new products ahead of the holidays. In gaming, we introduced 18 new products, including the PRO X SUPERLIGHT 2 Mouse, the PRO X TKL RAPID Gaming Keyboard, the G915 gaming keyboard, an all-new racing simulation series, and exciting collaborations with Genshin Impact and with MOMO. In video conferencing, we launched a software enabled solution called Smart Switching, which utilizes AI to choose the best view between the side camera on the table and the Rally Bar camera in front of the room. And in personal workspace, we continue to drive the successful combo touch for the new iPad, a very strategic category. And to help users work more efficiently, we launched two products in two entirely new categories. The MX Inc, is the first mixed reality stylus for the Meta (NASDAQ:) Quest Headset, and the MX Creative Console integrates with popular Adobe (NASDAQ:) applications to streamline creative workflows. To drive awareness and generate momentum for all of these products heading into the holiday season, we held global Logi PLAY and Logi WORK events for the first time ever last month. These events were hosted live from Paris, Shanghai, and over 20 other global locations. Logi PLAY also streamed for over four hours on Twitch. These events served as a celebration of gaming and of new ways of working. They were a fantastic launchpad for new products and partnerships. They facilitated great interaction with customers, partners, and influencers, and they were followed by a period of impactful in store activation. The excitement was palpable around the world and it’s part of why I am so excited for the future of Logitech. In a few minutes we’ll share a short video for you to experience Logi PLAY for yourself. And finally, while results and strategy are really important, great people and culture are critical for the execution of any strategy. That is why in addition to these high quality results, I am especially proud of the culture here at Logitech. It’s something we actively nurture and it’s gratifying to see that we were recognized by Forbes last week, as one of the world’s best employers. In a global survey of 300,000 employees of 850 Global Companies, we ranked 20th, a remarkable result for a company our size. So let me thank all of our employees around the world for everything they do and the culture they champion. In summary, this quarter’s high quality results, our progress versus our strategy, and our talented people give us confidence for the holiday quarter and for the remainder of our fiscal year. With that, let me turn the call over to Matteo.

Matteo Anversa: Okay. Thank you, Hanneke, and thank you all for joining the call today. I am incredibly energized and motivated by the opportunities ahead and excited to be part of the next chapter of Logitech. The team delivered another robust quarter with continued focus on driving sustained profitable growth. The detailed financial results, can be found in the press release and shareholder letter, but let me briefly share with you what I really liked about the quarter. So first, net sales were up 6% year-over-year, and importantly, demand accounted for roughly four points of that growth. The dynamic between sell-in and sell-through played out as we anticipated. Channel inventory levels ended the quarter well within our targeted range, positioning us very well for the holiday season. Second, as Hanneke mentioned, our growth was broad-based. We grew net sales year-over-year across all regions in nearly all the diverse product lines and grew demand in both the consumer and the business channels. Additionally, our growth was highly profitable. The gross margin rate was 44.1%, up 210 basis points year-over-year. Continued strong execution by our operating team drove continued product cost reduction and higher demand allowed us to sell previously reserved inventory. This is the fifth consecutive quarter of year-over-year gross margin rate expansion, a testament to the durability of our cost reduction initiatives and commitment to overall operational excellence. Looking ahead, we expect the gross margin rate for this fiscal year to be in the range of 42% to 43%. Please keep in mind that our third quarter is typically more consumer focused with slightly higher promotional intensity and higher freight costs are expected to pressure, gross margin rate in the next couple of quarters. Second quarter operating expenses were on the higher end of our annualized range of 24% to 26%, as we continue to invest in our organic growth through initiatives such as Logi PLAY and Logi WORK. And finally, our cash generation remains robust, contributing to a healthy cash position of nearly $1.4 billion. In addition, we returned $340 million back to shareholders. We repurchased $132 million of shares in the quarter as part of our ongoing $1 billion buyback program. Additionally, our shareholders approved a $0.10 increase in Swiss francs to our dividend, which resulted in a $208 million dividend payment in September. In summary, our second quarter results continue to demonstrate our team’s ability to drive sustained profitable growth in spite of an inconsistent and often volatile global economic environment. And based on our strong results in the first half, we are raising our fiscal year 2025 outlook both in revenue and in profit. And with that, let’s take you to Logi PLAY as we prepare for the Q&A. So Nate, if you can please roll the video. (Video Presentation)

Operator: Our first question will come from Asiya Merchant with Citi. You may now unmute your video and audio and ask your question. Please begin speaking when you see the Logitech team on your screen.

Asiya Merchant: Hi, Asiya here, can you hear me now?

Hanneke Faber: Yes.

Asiya Merchant: Great thank you.

Matteo Anversa: Good morning, Asiya.

Asiya Merchant: Good morning. Thank you. I just wanted to ask a little bit about gross margins. How sustainable are these going forward? And if you can just walk us through what were the key drivers that affected gross margins here sequentially. I understand that the product costs and inventory reserves are doing better and there was some higher promotional spending, but if you could walk us through sequentially what drove the higher margins, that would be great. And I think the commentary around 42% to 43% for the year, how should we think about that sustainably, if there was any makeshift that you would like to call out as well. Thank you.

Matteo Anversa: Sure, Aysia. Let me take this one. So first of all, we are extremely pleased where the gross margin came in the quarter. I have to say the team has done a fantastic job, the operating team, in continuously driving the product cost reduction through activities like value engineering and really continue to deliver consistent strong gross margin. On a year-over-year basis, as I mentioned in the prepared remarks, we expanded about 200 — 210 basis points. A couple of things, product cost reductions, so value engineering activities accounted for about 200 basis points of the expansion. I mentioned in my prepared remarks, the team also has done a fantastic job in selling some previously reserved inventory, which accounted for about 100 basis points of the margin left year-over-year. And these effects were partially offset by slightly negative mix, a little bit more promotional activity in the quarter. And then we continue to see a little bit of higher freight cost. So I think compared to what we were expecting, the gross margin to come in, in the prior earnings call, we came in a little better. And fundamentally, the key reasons is the ability to sell this previously — zero inventory, which we were not expecting to happen to that extent, as well as a little better product cost reduction by the team. And that’s also what drives the sequential increase in the margin. To the second part of your question, which is what we are expecting moving forward. So we’re expecting the gross margin rate for the second half to be about between 41% and 42%. And so we are expecting a slight sequential decrease in the gross margin rate. That’s driven by fundamentally a couple of things. One, we are not expecting to be able to continue to sell this previously reserved inventory to the same extent that we have done in the first half of the year. And that’s about almost a 100 basis points of the sequential decrease in the gross margin rate. And then we are seeing a continued pressure on coming from a freight cost that keep creeping up a little bit on — some of the lanes that we operate. And then obviously, the fact that we are entering a holiday season and therefore, particularly in the third quarter, it’s — the third quarter tends to be much more consumer oriented and therefore, a little bit more promoted. And therefore, we are expecting a slight increase in promotion. So that’s a little bit the dynamic that we are seeing for the rest of the year.

Asiya Merchant: And is that reasonable to assume, I mean going forward, like I understand the seasonality in the second half relative to the first half. But as we look forward into some of these cost reductions seem like they are pretty sustainable, absent of freight costs which is obviously outside and affected by other things. Is the gross margin pretty sustainable at these levels, especially as you ramp up your B2B efforts, should we be expecting better margin profile going forward? Thank you.

Matteo Anversa: Look, I think the way I would describe it is, as I said, we are very pleased with where we are, yes, I agree with your statement that the team has done a fantastic job and the actions that we have been taking around value engineering, taking costs out of the bill of material is — it is sustainable. I think it is a little bit mature to talk very long term. But I think for the year, we are expecting gross margin rate to be between 42% and 43%, which is actually — if you look at where we closed last year, is almost 100 basis points improvement year-over-year when you take the total year. And the cost reduction activity that the team has implemented are the key reasons why the gross margin expands.

Asiya Merchant: Great. Thank you very much for the color.

Matteo Anversa: Thank you.

Operator: Our next question comes from Samik Chatterjee of JPMorgan. [Operator Instructions]

Samik Chatterjee: Thank you. And hope you can hear me. Thanks for taking the questions. I guess these are a strong set of results. And — but this is also the second consecutive quarter we’ve seen sales outperform the demand that you have with some level of inventory build. I mean, as you go into the holiday period, should we be expecting some level of reversal in terms of the inventory bill? I guess the primary question is, did the retailers, did your customers start to prepare a bit earlier than normal in terms of their preparation for the holiday period? And then is the inventory build that you have? I know you mentioned it’s healthy, do we expect to see some sort of normalization in the back half, if at all, how does it impact seasonality into Q3? And I have a follow-up. Thank you.

Hanneke Faber: Yes. I’ll let me take comment as well in details, but just to remind everyone, we’ve been saying all along, the sell-in in the first half would be higher than the sell-out and that will normalize to your point. You’re absolutely right that will normalize in the second half. We were running a little light on inventory towards the back end of last fiscal year, that was leading to some stock outs. So we have been selling in a bit more than sell out here in the first half, and that’s positioned us really well for the holidays, and we completely expect that, that dynamic will reverse in the second half.

Matteo Anversa: Samik, what I would add, we are very pleased on how really the quarter came in. You can see the dynamic between selling and sell-through, we are actually very balanced and in-line with what we were expecting. So selling was maybe — the demand drove 4 points of the 6 points year-over-year increase in net sales. And so the two things tend to narrow themselves pretty nicely in the second quarter. And then the dynamic is expected to your point, to reverse in the second half, where we’re seeing sell-through higher than sell-in. And that’s to Hanneke’s point, the dynamic that we have been expecting now for quite some time. So in terms of split in revenue, maybe the prior years have been tended to be a little bit more 48%, 52% between the first and the second half. And as we indicated in prior calls, this year is probably going to be more around the 50%-50%, due to the dynamic that Hanneke has just described.

Samik Chatterjee: Got it. Got it. And for my follow-up, I guess it is more for Hanneke. You — in the shareholder letter, you outlined the areas where you’re gaining share. Now if I focus on just two aspects there. One, like how you’re thinking about getting back to gaining share in video collaboration? And also similarly, how — what are you seeing in terms of market share in China and what actions you might be taking to plan for more share gains there as well. Thank you.

Hanneke Faber: Yes. Great. Thank you. We see the markets actually fairly robust. So we are happy to see that up low-single digits. Our share is flattish to slightly down. That is obviously not something we want to continue, but there is a whole bunch of things that are actually really good in video conferencing. We remain Number One in units in video conferencing. Our service bookings were up almost 2 times in the quarter, which is so important for that segment. And as I’ve said before, we were kind of new to services, but that is really on a role. The launch of Smart Switching in the quarter takes our product superiority a step forward, and we are excited about that. And then of course, there is still such big opportunities to go-to-market in video conferencing. Less than 30% of global meeting rooms are video-enabled. And we’ve only started to play in some of these new verticals beyond enterprise, and we are seeing really good results in education, up more than 20% in the quarter closer to 30%. So all of those things give us a lot of confidence going forward in VC, and it is an exciting segment for us, highly profitable as well. China, also a few green shoots would be my headline on China. The gaming market there remains extremely robust. That’s different from many other Chinese markets, but the gaming market is extremely robust. Our demand grew mid-single digits in the quarter, and we continue to perform very well at the premium end of our ranges in gaming mice. And our brand remains very strong in China. But the competitive environment there is intense and we can do better than those results. So we’ve started to make some targeted R&D and marketing investments in China to strengthen the local team and our local capabilities. It is going to take some time because our share problems in China are not from yesterday, but we’re starting to see some encouraging results. The first dedicated China initiatives hit the market this past quarter. The Alto key keyboard very well received, as well as the M96-mouse, both of those very well received and doing well. And we are starting to see share gains in the key channel of social e-commerce. So that’s Pinduoduo (NASDAQ:) and Douyin or TikTok, and we’re starting to see share gains there. So early green shots, it is going to take a while to turn that China share around but such an important gaming market, where so much happens, and we are very committed to that market. Happy to see the green shoots.

Samik Chatterjee: All right. Thank you. Thanks for taking my questions.

Operator: Our next question comes from George Wang with Barclays. [Operator Instructions]

George Wang: Hi. Can hear me?

Operator: Yes.

George Wang: Just a quick question on Europe. Obviously, EMEA, Europe stood out in the quarter, especially kind of growth from tablet and the console gaming. Just curious kind of any — you can double click on Europe, especially this particular two category growth, I kind of pointed out. And any other areas do you think could sustain growth for the next couple of quarters?

Hanneke Faber: Yes. Thanks, George. Great questions. Europe, just outstanding execution across the board. The market there is flattish, but we way outperformed the market there. And great execution. They inspire the whole Logi PLAY and Logi WORK events. They’ve actually done them regionally last year. This year we took them global. And again, Europe outperformed both the events themselves, but more importantly the customer activation that happens afterwards. I was there a couple of weeks ago. I mean, if you went into MediaMarkt or Fnac, the execution that our European team is delivering is just simply outstanding and the same goes for our online customers. In terms of the growth, by the way in Europe was really broad-based across categories. But in terms of the two you mentioned, it’s probably worth pausing on for a moment. So tablets — actually both on tablets and on gaming headsets, the team has completely changed the gross margin profile of those two segments. We don’t disclose the exact numbers, but think about 10 percentage points better than last year, thanks to the innovation in tablets and 5 percentage points better on gaming headsets, which make those two much more attractive for us to grow. And they are strategic, tablets because they take us beyond the PC. A lot of our business is a PC peripheral. It is important for us to play beyond the PC as well. And tablets are well suited to some of those new B2B verticals that are extremely strategic for us, education first and foremost. Headsets are also — gaming headsets are also very strategic. Within gaming, gaming headsets are a larger segment than both gaming mice and gaming keyboards. And we’ve had a lower share in gaming headsets, even though our technology is absolutely superior. And I’m so excited that with the A50X and [now the A50] (ph), we are playing very strongly in the console gaming headset space. That just expands the market for us, grows our share. And again with those completely changed gross margins, these are two attractive and strategic segments for us.

George Wang: Great. Thank you.

Operator: Our next question comes from George Brown with Deutsche Bank. [Operator Instructions]

George Brown: Hi, guys can you hear me.

Operator: Thank you.

George Brown: Thank you for taking my questions. I have two, if I may. Just firstly, on China and the upcoming election in the US, how do you think about the potential of tariffs on your business –.

Nate Melihercik: George, are you there?

George Brown: Yes, can you hear me?

Nate Melihercik: Perhaps we’ll move on to the next question, and we’ll be back to you, George.

Operator: Our next question will be from Erik Woodring of Morgan Stanley. [Operator Instructions]

Erik Woodring: Good morning guys. Can you hear me okay?

Matteo Anversa: Hi, Erik.

Erik Woodring: Hi, good morning. Thank you so much for taking my questions. Maybe if we just start, Hanneke, nice to see two consecutive quarters of outperformance and year-over-year growth. I believe the full year forecast is embedding about 2% year-over-year revenue declines and something like 12% operating income declines in the second half of the year. Can you maybe help us just juxtapose that kind of worsening of trends alongside some of the comments that you’re making on demand kind of being a bit better than you expected. Just help us to understand why we should expect things maybe get worse in the second half? Is that all kind of the sell-in versus sell-through dynamics? Just maybe if you could double click on that, that would be super helpful. And then I have a follow-up. Thanks.

Hanneke Faber: Yes, absolutely. And I’ll let Matteo do the operating income side of that. But on the net sales, so indeed, if you do the math, the net sales in the second half would be about flat. That is that sell-in and sell-out dynamic. So we are actually pretty comfortable on demand coming in about as strong as it has come in, in the first half. And I say that with quite a bit of confidence. But because of the inventory dynamics, net sales will be a little lower than that. Matteo, you want to comment on the operating –.

Matteo Anversa: Sure. So Erik, on the operating income side, there are a couple of dynamics when we compare the second half of 2025 versus second half of 2024. First of all, let me start with the positive to the question that was asked earlier, product cost and the work that the team has been doing will continue to even — year-over-year basis when you compare the second half of last year to this year, we will continue to deliver gross margin expansion. However on the other side, some of the work that we were able to continue in the first half around — of this year around selling previously reserved inventory, last year actually happened later in the year. So this creates a comparison challenge, right? That’s about 100 basis points of margin reduction when you compare the second half of the two years. And then we continue to see freight costs. I talked about it, and we are expecting freight cost when you compare the two second halves to be higher year-over-year and then a little bit more promotional activity. So really, it is a gross margin dynamic. And we spent a little bit more on OpEx year-over-year, as we are investing, like Hanneke says on the good cholesterol, so really to grow the business, so around sales and marketing, around product development. So you see a little bit of that too. But it’s fundamentally is the gross margin that goes from about 43% in the second half of last year, which is a little elevated down to the 41% to 42% that I mentioned earlier.

Erik Woodring: Okay. That’s very helpful. Thank you Matteo for that. And then obviously looking forward to working together. If I were to follow up and maybe double-click on that comment that you just made in terms of OpEx, I would love to know if there is maybe a different approach now from a management team that is finally kind of cohesive in whole in that OpEx was up 15% year-over-year in the quarter, I think as a percentage of revenue for the September quarter, it was a 10-year high. Are you signaling maybe a change in the spending intensity of this company? Obviously, you mentioned some investments in China, but I would love to just maybe step back, bigger picture unrelated to just the quarter. Are we seeing a change in how you guys spend to drive growth, how you spend on sales and marketing? Or was what we saw in the September quarter, maybe one-off and not necessarily indicative of spending intensity, as we go forward? Thanks so much.

Hanneke Faber: Yes. No, so for the full year, we’ll be in the range that we’ve always talked about 24% to 26% OpEx. I am very intentional about shifting OpEx into that good cholesterol, which is R&D and sales and marketing. And that’s how we will grow the top-line of this business, which is so important for our future. And this quarter is running a little high. That’s okay. As you heard, we are making a few strategic investments again in R&D, in marketing both in the West and in China. That’s important. We could do it this quarter because gross margins came in a little higher than expected. So that is good, but we’ll continue to operate with a lot of discipline on OpEx.

Matteo Anversa: I don’t have much to add. So –.

Erik Woodring: Thanks so much guys.

Nate Melihercik: Thanks Erik.

Matteo Anversa: Thank you Erik.

Operator: Our next question comes from Joern Iffert with UBS. [Operator Instructions]

Joern Iffert: Thank you. Can you hear me? Hello — hello, hello, can you hear me? Hello, seems that you can’t hear me?

Nate Melihercik: Maybe we’ll circle back to Joern and go to the next question.

Operator: Our next question comes from George Brown with Deutsche Bank. [Operator Instructions]

George Brown: Hi guys. Just double tracking, can you hear me here first?

Nate Melihercik: Yes, George.

George Brown: Hi. Perfect. Yeah, thanks for taking my questions. I just have two, if I may. Just firstly, on China and the upcoming election in the US. How do you think about the potential impact of tariffs on your business given that a lot of your manufacturing is currently in China? And then just a quick second question. In gaming, you mentioned that your simulation business has grown double digits for three quarters now. Can you help us understand what’s driving this? Thanks guys.

Matteo Anversa: Hi, George, let me maybe take the first one. So I think the team has been doing a great job and now for quite some time in driving the diversification of our supply chain. So today, about — if you look at the units that we ship out globally, about 40% gets shipped from outside China. So they’re not manufactured in China. And we are targeting to increase this percentage up to 50% in the near future. So this has been a really concerted effort that not only addresses, I think the tariff is concerned, but most importantly it makes our supply chain more resilient anyway. So that’s the answer to your first question.

Hanneke Faber: Yes. And we have very deep experience in navigating different circumstances when it comes to supply chain, really just a great team. So we are on a multi-year journey to make our supply chain more resilient, more diversified. We will continue to do that, and we think we will be prepared for whatever happens after the US election. Maybe on [gaming SIM] (ph) yes, it’s a super exciting category for us that continues to do very, very well. It is a combination of share gains and us growing that market, I wouldn’t underestimate that piece as well. How do we do that? The superior products, that is where it all starts. Our wheels are outstanding, and then superior execution, especially in stores, and I would again, call out Europe here for really outstanding executions in places like MediaMarkt and Fnac, where we have our gaming rig set up where we organized on weekend game days where people can come and compete against each other, families come in, that just creates a lot of engagement, and it creates a lot of trial. This is a category with still relatively low penetration and a lot of upside for years to come.

Joern Iffert: Thank you so much guys.

Matteo Anversa: Thank you.

Operator: Our next question comes from Michael Foeth with Vontobel. [Operator Instructions] Let’s try Ananda Baruah of Loop Capital.

Ananda Baruah: Hi, guys. How’s that?

Nate Melihercik: Hi, Ananda.

Ananda Baruah: Hi, thanks a lot. Appreciate, Two if I could, just — I guess the question — the first question is do you guys believe that you are seeing an improving spending environment in some of the key categories and like — I guess the genesis for the question is just eyeballing some of the results for the key segments relative to the compares and then went sort of paired with the commentary, it seems like the numbers could be suggesting that’s the case. But it is not also perfectly clear. So I wanted to just get your thoughts on that. And then I have a quick follow-up. Thanks.

Hanneke Faber: Yes, sure. Yes, I think we are seeing that the global consumer is pretty resilient. If I look at demand landscape in the last quarter and look ahead a little bit towards the holidays, we saw that the National Retail Federation in the US came out with its outlook for the holidays, and they are saying 2.5% to 3.5% growth in terms of holiday spend. I would say that’s pretty in-line with what we are expecting for our categories. PWS probably a little bit less, gaming a little bit more and that’s not just for the US, that’s globally. And what was great to see is that the US in Q2 went positive in our categories. There the markets have been negative for a while, but they were positive in Q2. So pretty resilient consumer in the US and around the world.

Ananda Baruah: That’s helpful. And I guess the follow-up would actually be for Matteo is just sort of circling back to — well actually, both of you guys, Hanneke as well. Going back to the sort of the lean to invest conversation, does — as we think about — I’m thinking calendar ’25, which is really your fiscal ’26, any shift from like the leverage part of the story that you guys have had in place? Can we think any differently about that? Any context there would be helpful.

Matteo Anversa: You mean leverage in terms of the balance sheet?

Ananda Baruah: Sorry, operating leverage. Yes. And I’m asking — because I think part of what’s been going — just sort of the question today is there was negative operating leverage. OpEx investment was higher this quarter than rev growth and then there is some commentary about increased OpEx investment, sort of the good cholesterol lean in invested in the key categories. And so Hanneke got it loud and clear that you’re still — you’ll be at the high end of the OpEx envelope for fiscal year ’25. But I also think that part of what folks are wondering is like calendar ’25, as you begin to go through fiscal ’26, does any of the leverage story, the op income leverage story change on the OpEx line? Thanks.

Matteo Anversa: I think it is a little premature for me to talk about our fiscal year ’26. So I think we will talk about the expectation for the next fiscal year at the appropriate time. I think we are happy where the OpEx is overall, I think notwithstanding the increase that we had in the quarter overall, the framework that we gave in the past of 24% to 26% is a good framework. We continue to invest in things that sustain and help us grow, like the product development, engineering, so NPI, you saw how many NPIs we launched. We mentioned a few of them in the video and then continue to support the sales and marketing and go-to-market and that’s how I would say it.

Hanneke Faber: Yes. We will continue to operate with a lot of discipline and where we can shift resources to that good cholesterol, first R&D and then sales and marketing.

Ananda Baruah: Thanks a lot.

Matteo Anversa: You bet.

Nate Melihercik: Thanks, Ananda. Hanneke, Matteo, I think we have one more question in the queue. Go ahead.

Operator: Our last question comes from Joern Iffert with UBS. You may unmute.

Joern Iffert: Is it now working? Can you hear me?

Nate Melihercik: You’re right.

Joern Iffert: Thanks for taking my questions. Just two to three one. The first one is, please on your [gross] (ph) going forward, do you expect this to be more balanced between APAC, Europe and North America and sales-through going into the holiday season? And why [do you not] (ph) replicate the fantastic go-to-market strategy after Europe to North America and APAC to accelerate growth? this is the first question. I will take them one by one, if it’s okay.

Hanneke Faber: Yes. Sure. Thanks, Joern. The US market is now looking a little better. And as I’ve talked about before, we — I have challenged our team to do a lot better in China. So overall, I certainly would hope that we start to be a little more balanced in the future, and we’ll see how that plays out. But confident that, that could well be the case. And indeed, one of the levers of that is to reapply some of the fantastic executional work from Europe into other places.

Joern Iffert: And then a follow-up here on Europe on the gross, which I think half of the growth, if I’m roughly correctly calculating is coming from tablets and headsets that you have incredible gross of 50% plus. Is this linked to your distribution channels or new regions?

Hanneke Faber: It’s linked to innovation. So again, the combo touch when it comes to tablets, as well as the A50X and the A50 when it comes to gaming headsets are new. And I said it before, but what’s important to remember there is that those innovations helped us completely change the gross margin profile of those 2 segments. So that’s one big driver. The other big driver is B2B, where Europe is doing extremely well, helped by tablets and education, but also in video conferencing looking strong.

Joern Iffert: Thanks. And the last question, if I may. Circling back to your outlook on non-GAAP EBIT for the second half, which is down at the midpoint around 10% year-over-year. And you mentioned some promotions are likely returning or you want to invest via promotions, is this something you are seeing already today as a hard fact? Or is it something where you say look, we want to be cautious with our guy, if you want to take this into account if this is potentially coming up to better read the cautiousness or even not cautiousness of your guide on non-GAAP EBIT for the second half?

Matteo Anversa: So Joern, what I would say starting from the top for a minute, the demand, as Hanneke said, we are confident with where the demand sits end up and we continue to see strong demand from the consumer in the second half of the year, very similar to what we had in the first half. The — but what is happening in the second half is the dynamic between selling and sell-through, which will reverse themselves as we indicated in some of the prior questions. And then obviously revenue, if you look at what we are expecting in net sales, we are expecting net sales to be flat to slightly down, depending if you take the mid or the high-end of the range. The first couple of weeks are looking good, I would say, but that is really the assumptions that we made for the remainder of the year. So we would expect, as I indicated earlier, to have a little bit more promotional activity in the second half compared to the first half, just of the nature of the consumer being the fundamentally where most of the revenue will be in the second half of the year.

Hanneke Faber: Yes. And again we know our promotional plans fairly well, very well, I’d say, especially for the holiday quarter. In the holiday quarter, it is completely normal that you promote a little bit more to be competitive. Everyone does that quarter is a consumer quarter less than a B2B quarter. So I think our plans are pretty clear. Never say never, but it is not unexpected that there is a modest increase in promotion spend in Q3.

Joern Iffert: So it is more quarter-on-quarter, not year-over-year that the promotions are accelerating, right, if I understand you correctly?

Matteo Anversa: I think the overall is fair though year-over-year, as I mentioned to one of the questions that were asked earlier. When you compare the gross margin rate second half of last year versus second half of this year, there is a little bit more promotional activity.

Joern Iffert: Okay. Thank you very much for this.

Matteo Anversa: Thank you.

Operator: We have another question from Michael — sorry Michael Foeth of Vontobel.

Michael Foeth: Hi, can you hear me?

Nate Melihercik: Yes, Michael.

Michael Foeth: All right. Hi. Just one left for me. I was just wondering, you were talking about opportunities and expanding your addressable market. And you are very successful in the education market. So I was wondering if you can make any comments on inroads that you make in other end markets to expand your opportunity or is that too early at this stage?

Hanneke Faber: Yes. Thanks for the question. It is probably a little too early. Again, the TAM that we can play in on the work side of our business is much bigger than where we play today and mostly in enterprise. If you take in all the other places that people work in, whether that is education or retail or health care or manufacturing, the TAM more than doubles. So this is more of a longer-term strategic priority for us, but we will take it step by step. Going into a new vertical requires new capabilities, certainly from a go-to-market point of view. So education is the one that we are doing first. We are seeing super encouraging results, high 20s growth again in this past quarter. And maybe at AID, we’ll talk a little bit more about what might be next.

Michael Foeth: Okay, sounds good. Thank you.

Hanneke Faber: Great. See you Michael.

Nate Melihercik: Thanks, Michael. And Hanneke, that’s our last question for today.

Hanneke Faber: Super. Thanks, Nate. Thanks everyone, for joining us. Really appreciate seeing you for your interest in Logitech. And I just want to take the opportunity to say thank you once again to the Logitech teams around the world for the excellent growth they delivered in the last quarter and for everything they do. We look forward to speaking with you next quarter. Take care, everyone.

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