One minute you're a peripheral maker chugging along nicely, the next the world can't seem to get enough of Logitech's kit
Nearly every division enjoyed double or triple-digit growth for Q3 '21
The pandemic has been kind to Logitech, whose profits have almost quadrupled from what they were a year ago.
Revenues for the peripheral maker's Q3 ended 31 December show a jump of 85 per cent year-on-year to $1.67bn and profit came in at $448m versus $129m. For the nine months of fiscal '21, sales were up 64 per cent $3.716bn and profit grew 205 per cent to $721.5m.
On a conference call with financial analysts, Logitech CEO Bracken Darrell said: "Last quarter, we predicted that as the world opened up, few companies would opt for a full work from home or a full work from the office approach. With another quarter behind us, I have greater conviction that most companies will move to a hybrid at work/at home model."
So what did well for Logitech in the quarter? Nearly every area of its portfolio reported double or triple-digit growth from a year ago: Gaming was up 78 per cent to $436m; video collaboration was up 218 per cent to $293m; and keyboards and combos jumped 40 per cent to $218m.
Other notable movers included pointing devices, up 38 per cent to $214m; PC webcams, up 309 per cent to $132m; and tablet and other accessories, up 342 per cent to $138m. You get the message. The only units to falter were mobile speaker and smart home.
Logitech's chief bean counter, Nate Olmstead, said the company recorded its best quarterly for inventory, leading to cash conversion cycles of 15 days. Basically, the company is selling stuff at unprecedented speeds.
One consequence of this is that webcam shortages persist for both consumers and enterprise customers.
"We also have some shortages in microphones, a few other places," said Darrell. "In terms of when we think we come out of it, I'm almost embarrassed to predict that now. I think I've predicted every quarter, we're going to be out of it in a quarter two, and I've been wrong. The demand has been stronger than we thought in each case."
Manufacturing capacity is being expanded but a dearth of components is causing a shortfall in availability, the company said.
Logitech raised sales guidance for the full financial year, which ends in March, to growth of between 50 and 60 per cent year-on-year. This is higher than the previous outlook of 35 to 40 per cent growth in the prior quarter. At the start of its fiscal year, Logitech was expecting sales to expand by just 10 to 13 per cent.
Darrell pointed out to analysts on the call that he is seeing big demand for corporate clients as well as consumers, with doors being opened by demand for videoconferencing (VC) and other areas of peripherals.
"We do see very sizable orders coming from corporates," said the CEO. "I still think it's kind of early days for that. We've had some bulk buying in mice and keyboards… I don't think those are kind of temporary things. I think you're going to see some of that will come as people are outfitting their homes. But it's also going to start down from the office.
"We now have a direct conversation with the largest companies in the world. And that enables us to talk about things like our workspace or desktop business, mice and keyboards and webcams, in a way we never could before. So, our market shares were underdeveloped in the enterprise business and B2B in general. And we are completely committed to changing that going forward."
Logitech's share price has doubled in the past year. ®