Logitech Q3 Earnings Beat: Can Strong Guidance Lift the Stock?

Logitech International S.A. LOGI reported third-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.LOGI reported third-quarter fiscal 2025 non-GAAP earnings of $1.59 per share, which beat the Zacks Consensus Estimate by 15.2%. The bottom line increased 4% on a year-over-year basis, primarily driven by higher revenues from improved demand and lower product cost, partially offset by higher promotional spending.In the third quarter of fiscal 2025, LOGI reported revenues of $1.34 billion, which surpassed the consensus mark by 7.7%. The top line increased 7% on a reported basis and 6% on a constant currency basis from the prior-year quarter.Buoyed by better-than-expected third-quarter performance, Logitech raised its fiscal 2025 guidance. We expect that the company’s overwhelming quarterly performance, along with its upbeat outlook, will give a fresh boost to LOGI stock, which is already outperforming the Computer - Peripheral Equipment industry. In the past year, LOGI shares have soared 12.1% against the industry’s decline of 15.3%.Logitech International S.A. Price, Consensus and EPS Surprise Logitech International S.A. price-consensus-eps-surprise-chart | Logitech International S.A. QuoteLogitech’s Segment DetailsLogitech registered sales growth across most key product categories year over year. In the first quarter of fiscal 2024, LOGI reclassified its product segments by removing the Audio & Wearable and Mobile Speakers categories and adding Headsets and Other categories.Revenues from Keyboards & Combos improved 3% year over year to $236.75 million. Gaming revenues increased 14% year over year to $466.72 million. Our model estimates for Keyboards & Combos and Gaming revenues were pegged at $227.2 million and $405.6 million, respectively.Revenues from the Headsets product category jumped 10% to $45.9 million, Pointing Devices grew 5% to $217 million, Tablet Accessories increased 21% to $77.4 million and Video Collaboration increased 4% to $176 million. Our model estimates for Headsets, Pointing Devices, Tablet Accessories and Video Collaboration were pegged at $43.8 million, $203.5 million, $67.2 million and $160.7 million, respectively.On the other hand, Webcams declined 2% to $84.4 million and the Other category’s revenues fell 27% to $36 million. Our estimates for Logitech’s Webcams and Other category’s third-quarter revenues were pegged at $82.2 million and $39.1 million, respectively.Logitech’s Margins & Operating MetricsThe non-GAAP gross profit jumped 9% to $579 million from $531.4 million reported in the year-ago quarter. The non-GAAP gross margin expanded 90 basis points (bps) from the prior-year quarter to 43.2%.Non-GAAP operating expenses increased 10.6% to $313 million. As a percentage of revenues, non-GAAP operating expenses increased 80 bps to 23.4%.The non-GAAP operating income grew 7.1% to $265.9 million from $248.2 million reported in the year-ago quarter. The operating margin remained flat year over year at 19.8%.Logitech’s Liquidity and Shareholder ReturnAs of Dec. 31, 2024, LOGI’s cash and cash equivalents were $1.5 billion, up from $1.36 billion recorded in the previous quarter. Additionally, the company generated $371 million in cash from operational activities in the third quarter of fiscal 2025.In the fiscal third quarter, the company returned $200 million of cash to shareholders through share repurchase.Logitech Raises Fiscal 2025 GuidanceBuoyed by stronger-than-expected third-quarter performance, Logitech raised its guidance for fiscal 2025. It now expects fiscal 2025 sales in the band of $4.54-$4.57 billion, up from the previous guidance of $4.39-$4.47 billion. The revised top-line projection reflects a year-over-year increase in the band of 5.4-6.4%, up from the earlier range of 2-4%. The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $4.45 billion.Logitech projects non-GAAP operating profit in the range of $755-$770 million, up from the previous guidance of $720-$750 million. The updated guidance for operating income projects year-over-year growth of 8-10%, up from the previous guidance of 3-7%.Zacks Rank & Other Stocks to ConsiderCurrently, LOGI carries a Zacks Rank #2 (Buy).Bill Holdings BILL, Marvell Technology MRVL and Gitlab GTLB are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.Bill Holdings, ServiceNow and Gitlab sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for BILL’s 2025 earnings has been revised upward by 4 cents to $1.81 per share over the past 60 days, indicating a 13% year-over-year increase. BILL shares have gained 24.1% in the past year.The consensus mark for MRVL’s 2025 earnings has been revised downward by 10 cents to $1.56 per share over the past 60 days, indicating a 3.31% year-over-year increase. MRVL shares have risen 52.3% in the past year.The consensus mark for GTLB’s 2025 earnings has been revised upward by 17 cents to 63 cents per share over the past 60 days, indicating a 215% year-over-year increase. GTLB shares have lost 2.2% in the past year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Logitech International S.A. (LOGI): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report BILL Holdings, Inc. (BILL): Free Stock Analysis Report GitLab Inc. (GTLB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks