Logitech International S A : Q4 2024 Shareholder Letter

Q4 AND FISCAL YEAR 2024

Shareholder Letter

April 29, 2024

Q4 FY24 Highlights

Net sales

$1,011M

$960M

Q4 FY23

Q4 FY24

GAAP gross margin

+5% y/y (cc)

Q4 FY24 net sales were $1.0 billion, up 5% (cc) versus Q4 FY23. We grew market share in Keyboards & Combos, Pointing Devices, Video

35.8%

43.2%

+740 basis points y/y

Conferencing, Tablet Keyboards, and Webcams in the quarter.1

Q4 FY23

Q4 FY24

Non-GAAP gross margin

Q4 non-GAAP gross margin was 43.6%, up 730 basis points versus

36.3%

43.6%

+730 basis points y/y

Q4 FY23, due to lower product and logistics costs, reduced promotional activities, and lower excess inventory reserve. Sequentially, non-GAAP gross margin was up 130 basis

Q4 FY23

Q4 FY24

GAAP operating income

$130M

$39M

Q4 FY23

Q4 FY24

Non-GAAP operating income

$159M

$82M

Q4 FY23

Q4 FY24

+235% y/y

+93% y/y

points, primarily due to lower promotional spending, partially offset by mix.

Q4 FY24 non-GAAP operating income was $159 million, up 93% versus Q4 FY23, reflecting gross margin expansion.

Note: Constant currency (cc) is a non-GAAP measure, see Non-GAAP Financial Measures below.
1 Market share data through February 2023 - February 2024.	April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 2

Fiscal Year 2024 Highlights

Net sales

$4,539M$4,298M

-6% y/y (cc)

FY23FY24

GAAP gross margin

37.9%41.4%

+350 basis points y/y

FY23FY24

Non-GAAP gross margin

38.3%41.8%

+350 basis points y/y

FY23FY24

GAAP operating income

$587M

$458M

+28% y/y

FY23FY24

Non-GAAP operating income

$699M

$589M

+19% y/y

FY23FY24

FY24 net sales were $4.3 billion, down 6% (cc) versus FY23. We grew market share in Keyboards

• Combos, Pointing Devices, Video Conferencing, Gaming Wheels, Gaming Wired Mice, Tablet Keyboards and Webcams over the past twelve months.1

FY24 non-GAAP gross margin was 41.8%, up 350 basis points versus FY23, due to lower product and logistics costs and reduced promotional activities, partially offset by mix.

FY24 non-GAAP operating income was $699 million, up 19% versus FY23, reflecting gross margin expansion.

Note: Constant currency (cc) is a non-GAAP measure, see Non-GAAP Financial Measures below.
1 Market share data through February 2023 - February 2024.	April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 3

Dear Logitech Shareholder,

This quarter marks the end of our 2024 Fiscal Year. This year was one of steady, continued improvement as we positioned the business for a return to growth. In addition to perspective on Q4 and Fiscal 2024 results, this letter also provides our Fiscal Year 2025 outlook, which anticipates modest year-over-year revenue growth with solid gross margins. In this letter, I will be sharing my assessment of the current state of Logitech® and our strategic priorities and opportunities for the years ahead. We look forward to speaking with you on our earnings conference call on April 30 at 8:30 am EDT and 2:30 pm CEST.

Q4 FY24 and Full Fiscal Year 2024 results

Q4 FY 2024 results were very strong, with a step up in top-line performance supported by healthy operating income, cash generation, and earnings. Growth was broad-based across all regions and key categories. The teams continued to execute at a high level, with non-GAAP gross and operating margins at the top end of our operating model, and solid cash generation increasing cash on hand to over $1.5 billion. For Q4, net sales in constant currency increased by 5% to $1.0 billion year over year, on lower promotional spending and increased demand supported by lower channel inventory reductions compared to FY23. For FY24, net sales finished down by 6% in constant currency.

Q4 non-GAAP gross margin was 43.6%, up 730 basis points versus Q4 FY23, due to lower product and logistics costs, reduced promotional activities, and lower excess inventory reserve. Sequentially, non- GAAP gross margin was up 130 basis points, primarily due to lower promotional spending, partially offset by mix.

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 4

Non-GAAP operating expenses were $283 million in the quarter, essentially flat sequentially, and up 6% year over year. This was driven by higher variable compensation as well as investments in innovation.

Non-GAAP operating income was $159 million in Q4, up 93% versus Q4 FY23, due to improved demand, strong gross margins, and cost discipline.

The team delivered another strong quarter of cash flow from operations at $239 million, leading to a cash balance of approximately $1.5 billion. For the year, the business generated over $1.1 billion in cash from operations. We returned a total of $686 million to shareholders through our annual dividend payment ($182 million) and share repurchases ($504 million).

A full discussion of our quarterly and annual results can be found below, which in summary demonstrated a continuation of strong operational performance, solid cash generation, and a notable improvement in top-line performance throughout the year.

Fiscal Year 2025 outlook

While the fundamentals of our business continue to improve and we are optimistic about Logitech's potential, there remain a number of uncertainties in the near-term economic outlook. Those uncertainties include the resilience of overall consumer demand, B2B and IT spending levels, sticky inflation, central bank monetary policy, governments' fiscal policies, and geopolitical conflicts.

Looking ahead to FY25, we anticipate a return to growth with full-year net sales between $4.3 billion and $4.4 billion. Non-GAAP operating income is expected to be between $685 million and $715 million. Non-GAAP gross margin and non-GAAP operating expenses for the full year are expected to be approximately 41% and 25%, respectively.

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 5

Ambitious mission, enviable assets, but not satisfied with recent results

I've met with hundreds of employees, customers, partners, and shareholders over the past 100 days. Their passion and excitement about Logitech's future, as well as their healthy discontent over the topline performance of the last few years, was clear. These interactions have been helpful as I shape the plans for Logitech's future.

We start from a simple, bold mission: Logitech extends human potential - in work and play. To extend human potential means supporting people around the world to be more productive, improve performance, win that game, and connect more easily - all in ways that are more sustainable and more equitable. And we will extend that human potential in two very large macro spaces: Work and Play.

Logitech starts with an enviable set of assets upon which to build:

• World-classdesign and engineering expertise: in 2024, we have already been honored with more than three dozen awards from the world's most prestigious awards programs1, and our engineering teams drove 39 new product introductions in FY24
• Strong brand: brand awareness of over 90% in key markets
• Global presence: go-to-market capabilities in over 100 countries
• Leading market share positions: #1 share position in Mice, Gaming Mice, Keyboards & Combos, Video Collaboration, and Simulation
• Operational excellence: mix of owned and contract manufacturing, strong cost and inventory management discipline, and a customer-centric supply chain
• Track record of growth and value creation: 5-yeartotal shareholder return of close to 100% for LOGI

Over the remainder of the decade, we see five major trends that we expect will affect our business:

• New ways of working: Hybrid work - splitting time between working at the office, at home, and on the go - is here to stay. More than 50% of U.S. workers are hybrid today2, highlighting the need for multiple workspaces and the need for more video collaboration.
• Gaming: Gaming has gone mainstream. Today, almost half of gamers are women. Every age group plays. The ongoing growth and evolution of gaming creates an opportunity for us to provide more tools to a wider community of gamers.

1 Including Red Dot, GOOD Design, iF Design and International Design Award (IDA)

2 Gallup survey, February 2024.

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 6

• AI: We have only just started to experience the transformational impact that AI will have. As we extend human potential, Logitech will be an important part of the AI ecosystem. Already, AI is making our products better: from enhancing productivity, for example with our new AI Prompt Builder-to delivering superior audio and video performance.
• Climate change: This affects every country, every business and every society. Logitech intends to continue to be a leader for sustainability in tech.
• The importance of trust: Logitech delivers trusted experiences. With a well-established and trusted Swiss brand, consumer-centric design philosophy, broad partnerships, and high privacy and security standards, we are well positioned in a world where trust in governments, the media, science, and business is at an all-time low.

The road ahead | Strategic priorities

Moving ahead, it's clear that Logitech has enviable assets and a set of long-term, secular tailwinds. To take advantage of those, we are in the process of implementing a number of strategic decisions designed to drive sustainable revenue growth while maintaining our attractive margins. These decisions can be summarized in five key points that clarify where we will play and where we won't; and, consequently, how we will win:

1. We will innovate and grow in the macro spaces of Work and Play. These include the core categories we compete in today: Personal Workspace, Video Collaboration, and Gaming. But there is scope to grow in a significantly larger Total Addressable Market (TAM). Today, in Work, we mainly serve office workers. But most people around the world do not work in offices: they work in Retail, Education, Health Care, Construction, Manufacturing, etc. Equally the world of Play is larger than PC Gaming, the core of our business today. Broadening our definition of Work and Play almost doubles the available TAM, and we are excited about the opportunities this presents.
2. We will create competitive advantage through a focus on design-led,software-enabled hardware. These words are carefully chosen. Our hardware products, when combined with advanced software and services, are designed to offer magical, effortless user experiences that are also pioneering in terms of sustainability. Generative AI and Edge AI/ Machine Learning offer significant new innovation opportunities as part of this recipe. We will not focus on pure software, nor sell plain hardware.
3. We will continue to win with our historically strong Business-to-Consumer (B2C) customers, and at the same time, double down on Business-to-Business (B2B). We've doubled our B2B business since 2019, and we have achieved leading shares in video conferencing, but we are still relatively new to B2B. We will accelerate our B2B capabilities across product design, services, marketing and sales.

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 7

1. We will leverage geographic opportunities. We will continue to build out our already strong global presence. We are in more than 100 countries today, but there are opportunities for more growth. In the developed markets of North America, Europe, and Asia Pacific, there are significant differences in Logitech Share of Wallet (SOW) between individual countries. Over time, expanding best practices to bring lower-SOW,developed countries to the median, as well as growing emerging markets (where we are present, but relatively small), represents an incremental growth opportunity of more than $1 billion.
2. We will build an iconic brand. The $4 billion Logitech brand is strong and trusted, with high global awareness and a reputation for reliability, ease of use, and value. The next step is for the brand to become truly iconic. That starts with evolving to a single, trusted Logitech brand - not a house of brands.

How will we win? We will relentlessly drive product superiority through innovation. We will build on our reputation for operational excellence and discipline. And we will continue our industry-leading work to reduce carbon emissions across our value chain.

What's possible

Put together, the path ahead uses Logitech's enviable assets, leverages macro trends, and makes clear choices for future growth. We're confident that we've identified the correct priorities to drive Logitech to 2031 (our 50th anniversary).

Our priority is to return the business to annualized growth. Today, we provided a financial outlook for FY25 that anticipates a return to year-over-year revenue growth in the low single digits, with strong non-GAAP gross margins and operating margins. Moving beyond FY25, our goal is to accelerate those organic growth rates. Potential acquisitions would be incremental to the organic growth rates. We believe this growth, supported by non-GAAP gross margins in the 39% to 44% range and non-GAAP operating margins of 14% to 17%, represents an attractive investment profile.

Hanneke Faber		Chuck Boynton
Chief Executive Officer		Chief Financial Officer

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 8

What's new from Logitech

Logi AI Prompt Builder and Logitech Signature AI Edition Mouse

Logitech launched a free new tool that helps you prompt Open AI's ChatGPT faster and more fluently while staying in the flow of your work. Logi AI Prompt Builder is a software window that pops up via the Logi Options+ app at the touch of a button, transforming your Logitech keyboard and mouse into a shortcut to the power of AI.

Logitech also took a step further, launching a new wireless mouse with its own dedicated AI prompt button: the Logitech Signature AI Edition Mouse.

Signature Slim K950 Wireless Keyboard, Signature Slim Combo, and Signature Slim Combo for Business

Logitech introduced the Signature Slim K950 Wireless Keyboard, Signature Slim Combo, and Signature Slim Combo for Business, designed to simplify the experience across personal and work computers. For people with a single workspace for both professional and personal tasks, the Signature Slim products are beautifully designed solutions that look good in the home or office. With more features than typical entry-level keyboards and time-saving software customization, this keyboard creates a seamless, magical experience to manage work and life at the desk.

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 9

MX Brio and MX Brio 705 for Business

Logitech unveiled MX Brio/MX Brio 705 for Business, a revolutionary high-end webcam for end users and enterprises, designed to meet the demanding needs of advanced users.

Advanced customization options allow users to fine-tune their appearance by manually adjusting exposure, tint, vibrance, field of view, and more using Logi Options+, Logi Tune, and G HUB software. Show Mode makes it easy for users to share sketches or other physical objects on their desks by simply tilting the webcam. For IT teams outfitting employee workstations and home offices, MX Brio 705 for Business, the plug-and-play enterprise model, is compatible with most video conferencing platforms, is certified for Microsoft Teams®, Google MeetTM, and Zoom, and works with ChromebookTM.

Casa Pop-Up Desk

Following a successful launch in the UK and Australia, Logitech's popular foldaway desk kit has now expanded to North America. The Casa Pop-Up Desk caters to a new category of users navigating the world of hybrid working. It features Casa Keys, a wireless keyboard offering an enhanced laptop-typing experience in a minimalist form, and Casa Touch, an intuitive touchpad with Click Anywhere technology for smooth control and familiar time-saving gestures compatible with multiple operating systems. The two devices easily connect via Bluetooth® and are supported by the Logi Options+ App for a personalized experience. Casa Pop-Up Desk works with PC, Mac, or your tablets, including the leading operating systems (with the touch gesture).

April 29, 2024 | Logitech Q4 FY24 Shareholder Letter | Page 10