UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                to                

Commission File Number: 0-29174

LOGITECH INTERNATIONAL S.A.

(Exact name of registrant as specified in its charter)

Canton of Vaud,	Switzerland	None
(State or other jurisdiction   of incorporation or organization)		(I.R.S. Employer Identification No.)

Logitech International S.A.

EPFL - Quartier de l'Innovation

Daniel Borel Innovation Center

1015 Lausanne, Switzerland

c/o Logitech Inc.

3930 North First Street

San Jose, California 95134

(Address of principal executive offices and zip code)

(510) 795-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Registered Shares	LOGN	SIX Swiss Exchange
Registered Shares	LOGI	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ý  No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ý  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	ý	Smaller reporting company	☐
Accelerated filer	☐	Emerging Growth Company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐   No  ý

As of January 11, 2024, there were 154,819,963 shares of the Registrant’s share capital outstanding.

TABLE OF CONTENTS

		Page
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2023 and 2022	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended December 31, 2023 and 2022	4
	Condensed Consolidated Balance Sheets as of December 31, 2023 and March 31, 2023	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2023 and 2022	6
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended December 31, 2023 and 2022	7
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibit Index	44
Signatures

In this document, unless otherwise indicated, references to the “Company,” “Logitech,” "we," "our," and "us" are to Logitech International S.A. and its consolidated subsidiaries. Unless otherwise specified, all references to U.S. Dollar, Dollar or $ are to the United States Dollar, the legal currency of the United States of America. All references to CHF are to the Swiss Franc, the legal currency of Switzerland.

Logitech, the Logitech logo, and the Logitech products referred to herein are either the trademarks or the registered trademarks of Logitech. All other trademarks are the property of their respective owners.

Our fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday of each quarter. The third quarter of fiscal year 2024 ended on December 29, 2023. The same quarter in the prior fiscal year ended on December 30, 2022. For purposes of presentation, we have indicated our quarterly periods end on the last day of the calendar quarter.

The term “sales” means net sales, except as otherwise specified.

We make available, free of charge on our website, access to our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we file or furnish them electronically with the Securities and Exchange Commission ("SEC").

1

Recordings of our earnings videoconferences and certain events we participate in or host, with members of the investment community are posted on our investor relations website at https://ir.logitech.com. Additionally, we provide notifications of news or announcements regarding our operations and financial performance, including SEC filings, investor events, and press and earnings releases as part of our investor relations website. We intend to use our investor relations website as means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD. Our corporate governance information also is available on our investor relations website.

All references to our websites are intended to be inactive textual references only, and the contents of such websites do not constitute a part of and are not intended to be incorporated into this Quarterly Report on Form 10-Q.

2

PART I — FINANCIAL INFORMATION 

ITEM 1.   FINANCIAL STATEMENTS (UNAUDITED) 

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Net sales	$	1,255,473	$	1,269,925	$	3,286,980	$	3,578,741
Cost of goods sold	726,252		789,489		1,937,367		2,193,735
Amortization of intangible assets	2,441		3,168		8,569		9,355
Gross profit	526,780		477,268		1,341,044		1,375,651
Operating expenses:
Marketing and selling	189,175		196,653		544,716		628,122
Research and development	72,704		65,640		211,822		210,166
General and administrative	39,711		29,766		116,546		92,215
Amortization of intangible assets and acquisition-related costs	2,276		2,810		8,279		9,052
Restructuring charges, net	839		5,654		2,562		16,471
Total operating expenses	304,705		300,523		883,925		956,026
Operating income	222,075		176,745		457,119		419,625
Interest income	12,826		4,665		34,508		9,573
Other income (expense), net	189		1,406		(13,827)		(18,367)
Income before income taxes	235,090		182,816		477,800		410,831
Provision for (benefit from) income taxes	(9,594)		42,663		33,272		87,751
Net income	$	244,684	$	140,153	$	444,528	$	323,080
Net income per share:
Basic	$	1.57	$	0.87	$	2.82	$	1.98
Diluted	$	1.55	$	0.86	$	2.80	$	1.96
Weighted average shares used to compute net income per share:
Basic	155,933		161,244		157,568		163,042
Diluted	157,440		162,529		158,843		164,427

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Net income	$	244,684	$	140,153	$	444,528	$	323,080
Other comprehensive income (loss):
Currency translation gain (loss):
Currency translation gain (loss), net of taxes	25,319		33,076		13,168		(6,207)
Reclassification of cumulative translation adjustments included in other income (expense), net	—		219		—		219
Defined benefit plans:
Net gain (loss) and prior service costs, net of taxes	—		(104)		—		8
Reclassification of amortization included in other income (expense), net	500		(112)		252		(338)
Hedging gain (loss):
Deferred hedging gain (loss), net of taxes	(2,539)		(6,325)		(1,165)		5,239
Reclassification of hedging loss (gain) included in cost of goods sold	(863)		(4,728)		3,493		(11,766)
Total other comprehensive income (loss)	22,417		22,026		15,748		(12,845)
Total comprehensive income	$	267,101	$	162,179	$	460,276	$	310,235

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(unaudited)

	December 31, 2023		March 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	1,412,650	$	1,149,023
Accounts receivable, net	685,777		630,382
Inventories	447,262		682,893
Other current assets	150,754		142,876
Total current assets	2,696,443		2,605,174
Non-current assets:
Property, plant and equipment, net	119,200		121,503
Goodwill	463,978		454,610
Other intangible assets, net	53,724		63,173
Other assets	326,594		316,293
Total assets	$	3,659,939	$	3,560,753
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	527,988	$	406,968
Accrued and other current liabilities	673,435		643,139
Total current liabilities	1,201,423		1,050,107
Non-current liabilities:
Income taxes payable	111,924		106,391
Other non-current liabilities	156,491		146,695
Total liabilities	1,469,838		1,303,193
Commitments and contingencies (Note 10)
Shareholders’ equity:
Registered shares, CHF 0.25 par value:	30,148		30,148
Issued shares — 173,106 at December 31, 2023 and March 31, 2023
Additional shares that may be issued out of conditional capital — 50,000 at December 31, 2023 and March 31, 2023
Additional shares that may be issued out of authorized capital — 17,311 at December 31, 2023 and March 31, 2023
Additional paid-in capital	60,892		127,380
Shares in treasury, at cost — 18,108 at December 31, 2023 and 13,763 at March 31, 2023	(1,251,314)		(977,266)
Retained earnings	3,434,904		3,177,575
Accumulated other comprehensive loss	(84,529)		(100,277)
Total shareholders’ equity	2,190,101		2,257,560
Total liabilities and shareholders’ equity	$	3,659,939	$	3,560,753

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Nine months ended December 31,
	2023		2022
Cash flows from operating activities:
Net income	$	444,528	$	323,080
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	48,874		56,698
Amortization of intangible assets	16,583		18,173
Loss on investments	12,213		13,065
Share-based compensation expense	64,192		51,740
Deferred income taxes	(9,515)		24,228
Other	336		1,411
Changes in assets and liabilities, net of acquisitions:
Accounts receivable, net	(46,786)		(123,547)
Inventories	237,969		126,309
Other assets	3,698		20,918
Accounts payable	120,383		(134,848)
Accrued and other liabilities	13,536		(60,060)
Net cash provided by operating activities	906,011		317,167
Cash flows from investing activities:
Purchases of property, plant and equipment	(45,585)		(69,122)
Investment in privately held companies	(406)		(2,626)
Acquisitions, net of cash acquired	(14,138)		(8,527)
Purchases of deferred compensation investments	(7,893)		(5,186)
Proceeds from sales of deferred compensation investments	8,193		4,750
Net cash used in investing activities	(59,829)		(80,711)
Cash flows from financing activities:
Payment of cash dividends	(182,305)		(158,680)
Payment of contingent consideration for business acquisition	(5,002)		(5,954)
Purchases of registered shares	(376,775)		(327,731)
Proceeds from exercises of stock options and purchase rights	15,319		16,064
Tax withholdings related to net share settlements of restricted stock units	(28,596)		(28,734)
Other financing activities	(1,116)		—
Net cash used in financing activities	(578,475)		(505,035)
Effect of exchange rate changes on cash and cash equivalents	(4,080)		(24,006)
Net increase (decrease) in cash and cash equivalents	263,627		(292,585)
Cash and cash equivalents, beginning of the period	1,149,023		1,328,716
Cash and cash equivalents, end of the period	$	1,412,650	$	1,036,131
Supplementary Cash Flow Disclosures:
Non-cash investing and financing activities:
Property, plant and equipment purchased during the period and included in period end liability accounts	$	8,738	$	9,250
Right-of-use assets obtained in exchange for operating lease liabilities	$	4,621	$	42,814
Supplemental cash flow information:
Income taxes paid, net	$	32,777	$	65,154

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

LOGITECH INTERNATIONAL S.A.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except per share amounts)

(unaudited)

Three Months Ended December 31, 2023

				Additional Paid-in Capital							Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Registered Shares					Treasury Shares			Retained Earnings
	Shares	Amount				Shares	Amount
September 30, 2023	173,106	$	30,148	$	47,311	16,029	$	(1,083,468)	$	3,190,220	$	(106,946)	$	2,077,265
Total comprehensive income	—	—		—		—	—		244,684		22,417		267,101
Purchases of registered shares	—	—		—		2,126	(172,422)		—		—		(172,422)
Issuance of shares upon vesting of restricted stock units	—	—		(6,948)		(47)	4,576		—		—		(2,372)
Share-based compensation	—	—		20,529		—	—		—		—		20,529
December 31, 2023	173,106	$	30,148	$	60,892	18,108	$	(1,251,314)	$	3,434,904	$	(84,529)	$	2,190,101
Nine Months Ended December 31, 2023
				Additional Paid-in Capital							Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Registered Shares					Treasury Shares			Retained Earnings
	Shares	Amount				Shares	Amount
March 31, 2023	173,106	$	30,148	$	127,380	13,763	$	(977,266)	$	3,177,575	$	(100,277)	$	2,257,560
Total comprehensive income	—	—		—		—	—		444,528		15,748		460,276
Purchases of registered shares	—	—		—		5,628	(391,594)		—		—		(391,594)
Sales of shares upon exercise of stock options and purchase rights	—	—		(15,755)		(315)	31,074		—		—		15,319
Issuance of shares upon vesting of restricted stock units	—	—		(115,068)		(968)	86,472		—		—		(28,596)
Share-based compensation	—	—		64,335		—	—		—		—		64,335
Cash dividends ($1.19 per share)	—	—		—		—	—		(187,199)		—		(187,199)
December 31, 2023	173,106	$	30,148	$	60,892	18,108	$	(1,251,314)	$	3,434,904	$	(84,529)	$	2,190,101

7

Three Months Ended December 31, 2022

				Additional Paid-in Capital							Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Registered Shares					Treasury Shares			Retained Earnings
	Shares	Amount				Shares	Amount
September 30, 2022	173,106	$	30,148	$	106,130	10,943	$	(824,650)	$	2,995,927	$	(138,994)	$	2,168,561
Total comprehensive income	—	—		—		—	—		140,153		22,026		162,179
Purchases of registered shares	—	—		—		1,746	(90,170)		—		—		(90,170)
Sales of shares upon exercise of stock options and purchase rights	—	—		(2,582)		(155)	5,796		—		—		3,214
Issuance of shares upon vesting of restricted stock units	—	—		(4,410)		(64)	2,418		—		—		(1,992)
Share-based compensation	—	—		16,874		—	—		—		—		16,874
December 31, 2022	173,106	$	30,148	$	116,012	12,470	$	(906,606)	$	3,136,080	$	(116,968)	$	2,258,666
Nine Months Ended December 31, 2022
				Additional Paid-in Capital							Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Registered Shares					Treasury Shares			Retained Earnings
	Shares	Amount				Shares	Amount
March 31, 2022	173,106	$	30,148	$	129,925	7,855	$	(632,893)	$	2,975,681	$	(104,123)	$	2,398,738
Total comprehensive income	—	—		—		—	—		323,080		(12,845)		310,235
Purchases of registered shares	—	—		—		5,967	(327,731)		—		—		(327,731)
Sales of shares upon exercise of stock options and purchase rights	—	—		(930)		(423)	16,994		—		—		16,064
Issuance of shares upon vesting of restricted stock units	—	—		(65,758)		(929)	37,024		—		—		(28,734)
Share-based compensation	—	—		52,775		—	—		—		—		52,775
Cash dividends ($1.00 per share)	—	—		—		—	—		(162,681)		—		(162,681)
December 31, 2022	173,106	$	30,148	$	116,012	12,470	$	(906,606)	$	3,136,080	$	(116,968)	$	2,258,666

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

LOGITECH INTERNATIONAL S.A.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 — The Company and Summary of Significant Accounting Policies and Estimates

The Company

Logitech International S.A, together with its consolidated subsidiaries ("Logitech" or the "Company"), designs, manufactures and sells products that help businesses thrive and bring people together when working, creating, gaming and streaming.

The Company sells its products to a broad network of international customers, including direct sales to retailers, e-tailers and end consumers through the Company's e-commerce platform, and indirect sales to end customers through distributors.

Logitech was founded in Switzerland in 1981 and Logitech International S.A. has been the parent holding company of Logitech since 1988. Logitech International S.A. is a Swiss holding company with its registered office in Hautemorges, Switzerland, and headquarters in Lausanne, Switzerland, which conducts its business through subsidiaries in the Americas, Europe, Middle East and Africa ("EMEA") and Asia Pacific. Shares of Logitech International S.A. are listed on both the SIX Swiss Exchange under the trading symbol LOGN and the Nasdaq Global Select Market under the trading symbol LOGI.

Basis of Presentation

The condensed consolidated financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and therefore do not include all the information required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended March 31, 2023, included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on May 17, 2023.

In the opinion of management, these condensed consolidated financial statements include all adjustments, consisting of only normal and recurring adjustments, necessary and in all material aspects, for a fair statement of the results of operations, comprehensive income, financial position, cash flows and changes in shareholders' equity for the periods presented. Operating results for the three and nine months ended December 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2024, or any future periods.

Change in Presentation of Sales by Product Category

During the first quarter of fiscal year 2024, the Company changed its presentation of Sales by Product Category, included in Note 12, to provide a simpler and clearer view of the Company's business. The change in presentation did not have an impact on previously reported total sales. These changes included reclassifications of sales between certain product categories resulting in the following:

•The Webcams category (previously PC Webcams) now includes PC webcams and VC webcams;

•Headsets is a new category which includes PC headsets and VC headsets;

•The Mobile Speakers category is no longer a separate category as sales have been reclassified into the Other category;

•The Audio & Wearables category is no longer a separate category as sales have been reclassified into other categories as discussed below.

9

As a result of these changes, certain prior-period amounts for the three and nine months ended December 31, 2022 have been reclassified to conform to the current period presentation as follows (in thousands):

	Three months ended December 31, 2022
	As previously reported		Reclassifications			As adjusted
Gaming	$	391,975	$	19,952	(1)	$	411,927
Keyboards & Combos	220,059		—			220,059
Pointing Devices	199,106		—			199,106
Video Collaboration	226,374		(52,858)		(2) (3)	173,516
Webcams (3)	58,481		35,771		(3)	94,252
Tablet Accessories	65,157		—			65,157
Headsets	—		46,736		(2)	46,736
Other	1,348		57,824		(4) (5)	59,172
Mobile Speakers	38,321		(38,321)		(4)	—
Audio & Wearables	69,104		(69,104)		(1) (2) (5)	—
Total Sales	$	1,269,925	$	—		$	1,269,925

	Nine months ended December 31, 2022
	As previously reported		Reclassifications			As adjusted
Gaming	$	972,457	$	59,419	(1)	$	1,031,876
Keyboards & Combos	648,632		—			648,632
Pointing Devices	567,589		—			567,589
Video Collaboration	708,796		(174,449)		(2) (3)	534,347
Webcams (3)	178,033		127,499		(3)	305,532
Tablet Accessories	185,945		—			185,945
Headsets	—		137,429		(2)	137,429
Other	5,642		161,749		(4) (5)	167,391
Mobile Speakers	99,826		(99,826)		(4)	—
Audio & Wearables	211,821		(211,821)		(1) (2) (5)	—
Total Sales	$	3,578,741	$	—		$	3,578,741

(1) Reclassification of Blue Microphones from "Audio & Wearables" to the Gaming category.

(2) Reclassification of VC headsets and PC headsets to the new Headsets category from "Video Collaboration" and "Audio & Wearables," respectively.

(3) The Webcams category includes amounts previously reported as "PC Webcams" as well as amounts from VC webcams reclassified from "Video Collaboration."

(4) Reclassification of all amounts previously reported in "Mobile Speakers" to the Other category.

(5) Reclassification of PC speakers previously reported in "Audio & Wearables" to the Other category.

Changes in Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies during the three and nine months ended December 31, 2023 compared with the significant accounting policies described in its Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

10

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Significant estimates and assumptions made by management involve the fair value of goodwill and intangible assets acquired from business acquisitions, contingent consideration for a business acquisition and periodic reassessment of its fair value, valuation of investment in privately held companies classified under Level 3 fair value hierarchy, pension obligations, accruals for customer incentives, cooperative marketing, and pricing programs and related breakage when appropriate, inventory valuation, share-based compensation expense, uncertain tax positions, and valuation allowances for deferred tax assets. Although these estimates are based on management’s best knowledge of current events and actions that may impact the Company in the future, actual results could differ materially from those estimates.

Risks and Uncertainties

Impacts of Macroeconomic and Geopolitical Conditions on the Company's Business

The Company's business has been impacted by adverse macroeconomic and geopolitical conditions. These conditions include inflation, interest rate and foreign currency fluctuations, slowdown of economic activity around the world, and lower consumer and enterprise spending.

The global and regional economic and political conditions adversely affected demand for the Company's products. In addition, these conditions, including recent transportation issues in the Red Sea, have caused and may continue to cause volatility in the cost of materials and logistics, and transportation delays, and as a result may impact the pricing of the Company's products, product availability and the Company's results of operations.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker. In addition, ASU 2023-07 requires that all existing annual disclosures about segment profit or loss must be provided on an interim basis and clarifies that single reportable segment entities are subject to the disclosure requirement under Topic 280 in its entirety. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years beginning after December 15, 2024. A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional disclosures related to rate reconciliation, income taxes paid, and other disclosures. Under ASU 2023-09, for each annual periods presented, public entities are required to (1) disclose specific categories in the tabular rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires all reporting entities to disclose on an annual basis the amount of income taxes paid disaggregated by federal, state, and foreign taxes as well as the amount of income taxes paid by individual jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024 and can be applied on a prospective basis with an option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

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Note 2 — Net Income Per Share

The following table summarizes the computations of basic and diluted net income per share for the three and nine months ended December 31, 2023 and 2022 (in thousands, except per share amounts):

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Net income	$	244,684	$	140,153	$	444,528	$	323,080
Shares used in net income per share computation:
Weighted average shares outstanding - basic	155,933		161,244		157,568		163,042
Effect of potentially dilutive equivalent shares	1,507		1,285		1,275		1,385
Weighted average shares outstanding - diluted	157,440		162,529		158,843		164,427
Net income per share:
Basic	$	1.57	$	0.87	$	2.82	$	1.98
Diluted	$	1.55	$	0.86	$	2.80	$	1.96

Share equivalents attributable to outstanding stock options, restricted stock units and employee share purchase plans totaling 0.8 million and 1.6 million for the three months ended December 31, 2023 and 2022, respectively, and 1.3 million and 2.0 million for the nine months ended December 31, 2023 and 2022, respectively, were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive. A small number of performance-based restricted stock units were not included in the dilutive net income per share calculation because all necessary conditions had not been satisfied by the end of the respective period, and those shares were not issuable if the end of the reporting period were the end of the performance contingency period.

Note 3 — Employee Benefit Plans

Employee Share Purchase Plans and Stock Incentive Plans

As of December 31, 2023, the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated ("2006 ESPP"), the 1996 Employee Share Purchase Plan (U.S.), as amended and restated ("1996 ESPP"), and the 2006 Stock Incentive Plan ("2006 Plan") as amended and restated. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury stock.

The following table summarizes the share-based compensation expense and total income tax benefit recognized for share-based awards for the three and nine months ended December 31, 2023 and 2022 (in thousands):

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Cost of goods sold	$	2,189	$	1,324	$	6,066	$	4,228
Marketing and selling	8,878		8,014		28,623		25,240
Research and development	4,421		2,756		13,568		11,568
General and administrative	5,125		3,711		15,935		10,704
Total share-based compensation expense	20,613		15,805		64,192		51,740
Income tax benefit	(3,391)		(3,276)		(11,257)		(7,496)
Total share-based compensation expense, net of income tax benefit	$	17,222	$	12,529	$	52,935	$	44,244

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The income tax benefit in the respective periods primarily consisted of tax benefits related to the share-based compensation expense for the period and direct tax benefit realized, including net excess tax benefits recognized from share-based awards vested or exercised during the period.

Share-based compensation costs capitalized as part of inventory were $1.4 million and $1.3 million for the three months ended December 31, 2023 and 2022, respectively, and $4.8 million and $4.4 million for the nine months ended December 31, 2023 and 2022, respectively.

Defined Benefit Plans

Certain of the Company’s subsidiaries sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees’ years of service and earnings, or in accordance with applicable employee benefit regulations. The Company’s practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations. The costs of $1.9 million and $2.7 million recorded for the three months ended December 31, 2023 and 2022, respectively, and $5.7 million and $8.3 million recorded for the nine months ended December 31, 2023 and 2022, respectively, were primarily related to service costs.

Note 4 — Income Taxes

The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates. Further, a portion of the Company’s income before taxes and the provision for (benefit from) income taxes are generated outside of Switzerland.

The income tax provision (benefit) for the three and nine months ended December 31, 2023 was a benefit of $9.6 million and a provision of $33.3 million based on an effective income tax rate of (4.1)% and 7.0% of pre-tax income, respectively. The income tax provision for the same periods ended December 31, 2022 was $42.7 million and $87.8 million based on effective income tax rate of 23.3% and 21.4% of pre-tax income, respectively.

The change in the effective income tax rate for the three and nine months ended December 31, 2023, compared with the same periods ended December 31, 2022 was primarily due to the mix of income and losses in the various tax jurisdictions in which the Company operates as well as the favorable tax impacts from share-based compensation, an agreement to remeasure the tax basis of goodwill under the Swiss Federal Act on Tax Reform and AHV Financing (“TRAF”) with the canton of Vaud, remeasurement of the Company’s Swiss deferred tax assets due to a change in tax rate, and Foreign-Derived Intangible Income ("FDII") incentive provided by the Tax Cuts and Jobs Act.

The canton of Vaud completed the legislative process to enact TRAF, a reform to better align the Swiss tax system to international tax standards, on March 10, 2020 to take effect as of January 1, 2020. In March 2020, the Company reached an agreement with the Vaud Tax Administration that would allow for an increase in the tax basis of goodwill, as a transition measure under TRAF, to be amortized over ten years beginning on January 1, 2020. During the three months ended December 31, 2023, the Company reached an agreement to remeasure the tax basis of goodwill under TRAF with the canton of Vaud, which resulted in an income tax benefit of $25.1 million, net of assessment of uncertain tax positions. The remeasurement of the step-up will be amortized over the remaining ten-year amortization period.

On December 29, 2023, a change to the cantonal tax legislation was published. According to the law approved by the Vaud parliament, a progressive scale will be applicable for cantonal tax purposes resulting in an increase from the current tax rate of 13.61% to 14.28% effective fiscal year 2025. The increase in tax rate resulted in a tax benefit of $5.1 million due to a remeasurement of the Company's Swiss deferred tax assets in the fiscal quarter ended December 31, 2023.

The Tax Cuts and Jobs Act enacted Section 250, which provides for a deduction with respect to Global Intangible Low-Taxed Income ("GILTI") and FDII in the US. The application of this tax incentive is inherently complex. During the three months ended December 31, 2023, the Company analyzed the applicability of FDII and determined that this tax incentive applies to fiscal 2021 to 2023 tax years. As a result, the Company realized a tax benefit of $17.9 million related to FDII. The Company has also concluded that any GILTI tax since the enactment of Tax Cuts and Jobs Act would be immaterial.

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Although the Company has adequately provided for uncertain tax positions, the provisions related to these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During fiscal year 2024, the Company continues to review its tax positions and to provide for or reverse unrecognized tax benefits as they arise. During the next twelve months, while it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly, it is not possible to provide a range of potential changes.

On August 16, 2022, the “Inflation Reduction Act” (H.R. 5376) ("IRA") was signed into law in the United States. The IRA established a new corporate alternative minimum tax based on financial statement income adjusted for certain items. The new minimum tax is effective for tax years beginning after December 31, 2022. The IRA is not expected to have a material impact to the Company's financial statements for the tax year ending March 31, 2024.

On December 22, 2023, the Federal Council enacted the relevant ordinance for implementing a (Qualified) Domestic Minimum Tax (QDMTT) in Switzerland for tax years beginning from January 1, 2024. The Company is currently evaluating the impact of this ordinance on its consolidated financial statements.

Note 5 — Balance Sheet Components

The following table presents the components of certain balance sheet asset amounts (in thousands): 

	December 31, 2023		March 31, 2023
Accounts receivable, net:
Accounts receivable	$	970,549	$	851,576
Allowance for doubtful accounts	—		(86)
Allowance for sales returns	(12,487)		(10,146)
Allowance for cooperative marketing arrangements	(47,165)		(40,495)
Allowance for customer incentive programs	(97,497)		(71,645)
Allowance for pricing programs	(127,623)		(98,822)
	$	685,777	$	630,382
Inventories:
Raw materials	$	71,969	$	171,790
Finished goods	375,293		511,103
	$	447,262	$	682,893
Other current assets:
Value-added tax ("VAT") receivables	$	55,920	$	60,343
Prepaid expenses and other assets	94,834		82,533
	$	150,754	$	142,876
Property, plant and equipment, net:
Property, plant and equipment	$	497,994	$	518,358
Less: accumulated depreciation and amortization	(378,794)		(396,855)
	$	119,200	$	121,503
Other assets:
Deferred tax assets	$	197,460	$	171,989
Right-of-use assets	61,721		67,330
Investments in privately held companies	30,991		33,323
Investments for deferred compensation plan	29,905		28,213
Other assets	6,517		15,438
	$	326,594	$	316,293

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The following table presents the components of certain balance sheet liability amounts (in thousands): 

	December 31, 2023		March 31, 2023
Accrued and other current liabilities:
Accrued customer marketing, pricing and incentive programs	$	193,216	$	206,546
Accrued personnel expenses	142,936		103,592
Accrued loss for inventory purchase commitments	33,772		46,608
Accrued sales return liability	33,527		49,462
Warranty liabilities	28,784		28,861
VAT payable	37,748		33,328
Income taxes payable	28,136		18,788
Operating lease liabilities	14,915		12,655
Contingent consideration	1,809		6,629
Other current liabilities	158,592		136,670
	$	673,435	$	643,139
Other non-current liabilities:
Operating lease liabilities	$	62,800	$	58,361
Employee benefit plan obligations	32,212		32,421
Obligation for deferred compensation plan	29,905		28,213
Warranty liabilities	12,993		12,025
Deferred tax liabilities	2,529		2,803
Other non-current liabilities	16,052		12,872
	$	156,491	$	146,695

Note 6 — Fair Value Measurements

Fair Value Measurements

The Company considers fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following three-level fair value hierarchy to establish the priorities of the inputs used to measure fair value:

•Level 1 — Quoted prices in active markets for identical assets or liabilities.

•Level 2 — Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

•Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

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The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis, excluding assets related to the Company’s defined benefit pension plans, classified by the level within the fair value hierarchy (in thousands): 

	December 31, 2023						March 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	959,932	$	—	$	—	$	661,884	$	—	$	—
Investments for deferred compensation plan included in other assets:
Cash	$	402	$	—	$	—	$	41	$	—	$	—
Common stock	1,257		—		—		988		—		—
Money market funds	9,760		—		—		9,606		—		—
Mutual funds	18,486		—		—		17,578		—		—
Total investments for deferred compensation plan	$	29,905	$	—	$	—	$	28,213	$	—	$	—
Currency derivative assets included in other current assets	$	—	$	118	$	—	$	—	$	107	$	—
Liabilities:
Contingent consideration included in accrued and other current liabilities	$	—	$	—	$	1,809	$	—	$	—	$	6,629
Currency derivative liabilities included in accrued and other current liabilities	$	—	$	1,813	$	—	$	—	$	2,187	$	—

Contingent Consideration for Business Acquisitions

The following table summarizes the change in the Company's contingent consideration balance during the nine months ended December 31, 2023 and 2022 (in thousands):

	Nine months ended December 31,
	2023		2022
Beginning of the period	$	6,629	$	12,259
Fair value of contingent consideration upon acquisition	—		2,151
Payments of contingent consideration	(5,002)		(5,954)
Effect of foreign currency exchange rate changes	182		(1,843)
End of the period	$	1,809	$	6,613

    

The contingent consideration arising from a technology acquisition on May 19, 2021, represented the future potential earn-out payments of up to $10.0 million payable in cash upon the achievement of three technical development milestones to be completed as of December 31, 2021, June 30, 2022, and June 30, 2023. The fair value of the contingent consideration was $10.0 million at the acquisition date, which was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During fiscal year 2022, the Company paid $0.9 million for the contingent consideration related to the first technical development milestone. During fiscal year 2023, the Company paid $4.0 million for the contingent consideration related to the second technical development milestone. During the second quarter of fiscal year 2024, the Company paid $3.3 million for the contingent consideration related to the third technical development milestone.

The contingent consideration arising from a technology acquisition on January 4, 2021, represented the future potential earn-out payments of up to $3.0 million payable in cash upon the achievement of two technical development milestones to be completed as of December 31, 2021 and March 31, 2022. The fair value of the contingent consideration was determined using a probability-weighted expected payment model and discounted at the estimated cost of debt. During fiscal year 2023, the Company paid $2.0 million for the contingent consideration related to the first technical development milestone. During the second quarter of fiscal year 2024, the Company paid $1.0 million for the contingent consideration related to the second technical development milestone.

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Investments for Deferred Compensation Plan

The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $29.9 million and $28.2 million, as of December 31, 2023 and March 31, 2023, respectively, based on quoted market prices. Quoted market prices are observable inputs that are classified as Level 1 within the fair value hierarchy. Unrealized gains (losses) related to marketable securities for the three and nine months ended December 31, 2023 and 2022 were not material and were included in other income (expense), net, and corresponding changes in the deferred compensation liability were included in operating expenses and cost of goods sold, in the Company's condensed consolidated statements of operations.

Equity Method Investments

The Company has certain non-marketable investments included in other assets that are accounted for as equity method investments, with a carrying value of $18.4 million and $20.5 million as of December 31, 2023 and March 31, 2023, respectively. Gains (losses) related to equity method investments for the three and nine months ended December 31, 2023 and 2022 were not material and are included in other income (expense), net, in the Company's condensed consolidated statements of operations.

During the second quarter of fiscal year 2023, the Company recorded an impairment charge, before tax, of $21.4 million for one of its equity method investments as it was determined that the carrying value of the investment was not recoverable. The impairment charge is included in other income (expense), net, in the Company's condensed consolidated statement of operations for the nine months ended December 31, 2022. There was no impairment of equity method investments during the three and nine months ended December 31, 2023.

Assets Measured at Fair Value on a Nonrecurring Basis

Financial Assets 

The Company has certain equity investments without readily determinable fair values due to the absence of quoted market prices, the inherent lack of liquidity, and the fact that inputs used to measure fair value are unobservable and require management's judgment. When certain events or circumstances indicate that impairment may exist, the Company revalues the investments using various assumptions, including the financial metrics and ratios of comparable public companies. The carrying value is also adjusted for observable price changes with the same or similar security from the same issuer. The amount of these equity investments without readily determinable fair values included in other assets was $12.1 million and $12.6 million as of December 31, 2023 and March 31, 2023, respectively. During the first quarter of fiscal year 2023, the Company recorded an unrealized gain, before tax, of $6.9 million for its investment in a private company as a result of observable price changes for similar securities issued by this company (level 2 fair value measurement). There were no impairment charges related to these financial assets during the three and nine months ended December 31, 2023 and 2022, other than immaterial impairment charges related to certain investments without readily determinable fair values.

During the first quarter of fiscal year 2024, the Company recorded an impairment loss, before tax, of $9.6 million as a result of the write-off of a note receivable which has been deemed no longer recoverable. This note receivable was previously obtained in conjunction with an exchange transaction related to the Company's investment in a privately held company. The impairment loss is included in other income (expense), net, in the Company's condensed consolidated statement of operations for the nine months ended December 31, 2023.

Non-Financial Assets

Goodwill, intangible assets, and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if the Company is required to evaluate these non-financial assets for impairment, whether due to certain triggering events or because of the required annual impairment test, and a resulting impairment is recorded to reduce the carrying value to the fair value, the non-financial assets are measured at fair value during such period. There was no impairment of non-financial assets during the three and nine months ended December 31, 2023 and 2022.

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Note 7 — Derivative Financial Instruments

Under certain agreements with the respective counterparties to the Company’s derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets and accrued and other current liabilities, respectively, on the condensed consolidated balance sheets as of December 31, 2023 and March 31, 2023. See Note 6 for the fair values of the Company’s derivative instruments as of December 31, 2023 and March 31, 2023.

Cash Flow Hedges

The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases. These hedging contracts mature within approximately four months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. Cash flows from such hedges are classified as operating activities in the condensed consolidated statements of cash flows. Hedging relationships are discontinued when the hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract. Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter.

The notional amounts of foreign currency exchange forward contracts outstanding related to forecasted inventory purchases were $91.2 million and $72.6 million as of December 31, 2023 and March 31, 2023, respectively. The Company had $1.6 million of net loss related to its cash flow hedges included in accumulated other comprehensive loss as of December 31, 2023, which will be reclassified into earnings within the next twelve months.

 The following table presents the amounts of gain (loss) on the Company’s derivative instruments designated as hedging instruments for the three and nine months ended December 31, 2023 and 2022 and their locations on its condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (in thousands):

	Three months ended December 31,
	Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of (Gain) Loss Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
	2023		2022		2023		2022
Cash flow hedges	$	(2,539)	$	(6,325)	$	(863)	$	(4,728)
	Nine months ended December 31,
	Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss				Amount of (Gain) Loss Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
	2023		2022		2023		2022
Cash flow hedges	$	(1,165)	$	5,239	$	3,493	$	(11,766)

The Company presents the earnings impact from forward points in the same line item that is used to present the earnings impact of the hedged item, i.e. cost of goods sold, for hedging forecasted inventory purchases and such amount is not material for all periods presented.

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Other Derivatives

The Company also enters into foreign currency exchange forward and swap contracts to reduce the short-term effects of currency exchange rate fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries. These contracts generally mature within approximately one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on these contracts are not material and included in other income (expense), net, in the condensed consolidated statements of operations based on the changes in fair value. The notional amounts of these contracts outstanding as of December 31, 2023 and March 31, 2023 were $78.2 million and $111.2 million, respectively. Foreign currency exchange forward and swap contracts outstanding as of December 31, 2023 primarily consisted of contracts in Canadian Dollar, Brazilian Real, and New Taiwan Dollar to be settled at future dates at predetermined exchange rates.

The fair value of all foreign currency exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the condensed consolidated statements of cash flows.

Note 8 — Goodwill and Other Intangible Assets

The Company conducts its impairment analysis of goodwill annually at December 31 or more frequently if changes in facts and circumstances indicate that it is more likely than not that the fair value of the Company’s reporting unit may be less than its carrying amount. The Company conducted its annual impairment analysis of goodwill as of December 31, 2023 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeds its carrying amount. In assessing the qualitative factors, the Company considered the impact of change in industry and competitive environment, the Company's market capitalization and budgeted-to-actual revenue performance for the last twelve months.

The following table summarizes the activities in the Company’s goodwill balance (in thousands):

As of March 31, 2023	$	454,610
Acquisition	8,117
Effects of foreign currency translation	1,251
As of December 31, 2023	$	463,978

The Company's acquired intangible assets were as follows (in thousands):

	December 31, 2023						March 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and trade names	$	32,390	$	(25,005)	$	7,385	$	36,790	$	(26,774)	$	10,016
Developed technology	107,421		(84,398)		23,023		121,730		(94,792)		26,938
Customer contracts/relationships	69,087		(49,164)		19,923		71,110		(47,688)		23,422
In-process R&D	3,526		—		3,526		3,526		—		3,526
Effects of foreign currency translation	(214)		81		(133)		(1,021)		292		(729)
Total	$	212,210	$	(158,486)	$	53,724	$	232,135	$	(168,962)	$	63,173

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Note 9 — Financing Arrangements

The Company had several uncommitted, unsecured bank lines of credit and letters of credit aggregating $176.1 million and $181.3 million as of December 31, 2023 and March 31, 2023, respectively. There are no financial covenants under the lines of credit with which the Company must comply. There was no borrowing outstanding under the lines of credit as of December 31, 2023 or March 31, 2023. As of December 31, 2023 and March 31, 2023, the Company had outstanding bank guarantees of $11.1 million and $13.6 million, respectively.

Note 10 — Commitments and Contingencies

Product Warranties

Changes in the Company’s warranty liabilities for the three and nine months ended December 31, 2023 and 2022 were as follows (in thousands): 

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Beginning of the period	$	40,265	$	41,960	$	40,886	$	46,219
Provision	11,249		8,920		30,734		23,440
Settlements	(10,158)		(8,979)		(29,914)		(26,358)
Effects of foreign currency translation	421		730		71		(670)
End of the period	$	41,777	$	42,631	$	41,777	$	42,631

Indemnifications

The Company indemnifies certain of its suppliers and customers for losses arising from matters such as intellectual property disputes and product safety defects, subject to certain restrictions. The scope of these indemnities varies, but in some instances, includes indemnification for damages and expenses, including reasonable attorneys’ fees. As of December 31, 2023, no material amounts have been accrued for these indemnification provisions. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.

The Company also indemnifies its current and former directors and certain of its current and former officers. Certain costs incurred for providing such indemnification may be recoverable under various insurance policies. The Company is unable to reasonably estimate the maximum amount that could be payable under these arrangements because these exposures are not limited, the obligations are conditional in nature and the facts and circumstances involved in any situation that might arise are variable.

Legal Proceedings

From time to time the Company is involved in claims and legal proceedings that arise in the ordinary course of its business. The Company is currently subject to several such claims and legal proceedings. The Company intends to vigorously defend against them. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. The Company follows ASC ("Accounting Standards Codification") 450 in determining the accounting and disclosure for these contingencies. Based on currently available information, the Company does not believe that resolution of pending matters will have a material adverse effect on its financial condition, cash flows and results of operations. However, litigation is subject to inherent uncertainties, and there can be no assurances that the Company's defenses will be successful or that any such lawsuit or claim would not have a material adverse impact on the Company's business, financial condition, cash flows and results of operations in a particular period. Any claims or proceedings against the Company can have an adverse impact because of defense costs, diversion of management and operational resources, negative publicity and other factors. Any failure to obtain a necessary license or other rights, or litigation arising out of intellectual property claims, could adversely affect the Company's business.

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Note 11 — Shareholders’ Equity

Share Repurchases

2020 Share Repurchase Program

In May 2020, the Company's Board of Directors approved the 2020 share repurchase program, which authorized the Company to use up to $250.0 million to purchase Logitech shares to support equity incentive plans or potential acquisitions. Shares may be repurchased from time to time on the open market, through block trades or otherwise. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors. In April 2021, the Company's Board of Directors approved an increase of $750.0 million to the 2020 share repurchase program, to an aggregate amount of $1.0 billion. The Swiss Takeover Board approved this increase and it became effective on May 21, 2021. In July 2022, the Company’s Board of Directors approved an increase of $500 million to the 2020 share repurchase program, to an aggregate amount of up to $1.5 billion. The Swiss Takeover Board approved this increase and it became effective on August 19, 2022. The 2020 share repurchase program expired on July 27, 2023. The Company repurchased 16.7 million shares for an aggregate cost of $1.2 billion under the 2020 share repurchase program, of which 2.6 million shares for an aggregate cost of $159.1 million were repurchased during fiscal year 2024 prior to the expiration of the program.

2023 Share Repurchase Program

In June 2023, the Company's Board of Directors approved a new, three-year share repurchase program, which allows the Company to use up to $1.0 billion to repurchase its shares. The 2023 share repurchase program enables the Company to repurchase shares for cancellation, as well as to support equity incentive plans or potential acquisitions. The Swiss Takeover Board approved the 2023 share repurchase program in July 2023 and the program became effective on July 28, 2023. During the nine months ended December 31, 2023, the Company repurchased 3.0 million shares for an aggregate cost of $232.5 million under the 2023 share repurchase program for cancellation, of which $14.8 million of the aggregate cost was not paid yet as of December 31, 2023. As of December 31, 2023, $767.8 million was available for repurchase under the 2023 share repurchase program.

Swiss law limits a company’s ability to hold or repurchase its own shares. The aggregate par value of all shares held in treasury by the Company and its subsidiaries may not exceed 10% of the share capital of the Company, which for the Company corresponds to approximately 17.3 million registered shares. This limitation does not apply to shares repurchased for cancellation, due to the Board of Directors’ authority under the Company’s capital band set forth in the Company’s Articles of Incorporation to cancel shares up to a limit of 10% of the Company's current share capital. As of December 31, 2023, the Company had a total of 18.1 million shares held in treasury stock, which includes 3.0 million shares that have been repurchased for cancellation.

To the extent that the shares are repurchased to support equity incentive plans or potential acquisitions, the shares are repurchased on the ordinary trading line of SIX Swiss Exchange (“SIX”) and/or The Nasdaq Global Select Market (“Nasdaq”). Shares repurchased for cancellation purposes are repurchased on a second trading line on SIX. Shares may be repurchased from time to time on the open market or in privately negotiated transactions, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended. Purchases may be started or stopped at any time without prior notice depending on market conditions and other factors and the program does not require the purchase of any minimum number of shares.

Dividends

During the nine months ended December 31, 2023, the Company declared and paid cash dividends of CHF 1.06 (USD equivalent of $1.19 based on the exchange rate on the date of declaration) per share, totaling $187.2 million on the Company's outstanding shares. During the nine months ended December 31, 2022, the Company declared and paid cash dividends of CHF 0.96 (USD equivalent of $1.00 based on the exchange rate on the date of declaration) per share, totaling $162.7 million on the Company's outstanding shares.

Any future dividends will be subject to approval of the Company's shareholders.

21

Accumulated Other Comprehensive Income (Loss)

The accumulated other comprehensive income (loss) was as follows (in thousands):

	Cumulative Translation Adjustment		Defined Benefit Plans		Deferred Hedging Losses		Total
March 31, 2023	$	(100,869)	$	4,525	$	(3,933)	$	(100,277)
Other comprehensive income	13,168		252		2,328		15,748
December 31, 2023	$	(87,701)	$	4,777	$	(1,605)	$	(84,529)

Note 12 — Segment Information

The Company operates in a single operating segment that encompasses the design, manufacturing and marketing of peripherals for gaming, PCs, tablets, video conferencing, and other digital platforms. Operating performance measures are provided directly to the Company's CEO, who is considered to be the Company’s Chief Operating Decision Maker. The CEO periodically reviews information such as sales and adjusted operating income (loss) to make business decisions. These operating performance measures do not include restructuring charges (credits), net, share-based compensation expense, amortization and impairment of intangible assets, acquisition-related costs, and change in fair value of contingent consideration from business acquisitions.

During the first quarter of fiscal year 2024, the Company changed its presentation of Sales by Product Category to provide a simpler and clearer view of the Company's business. The change in presentation did not have an impact on previously reported total sales. As a result of these changes, certain prior-period amounts for the three and nine months ended December 31, 2022 have been reclassified to conform to the current period presentation. See Note 1 for further information on the change in presentation.

Sales by product category in the current presentation for the three and nine months ended December 31, 2023 and 2022 were as follows (in thousands):

	Three months ended December 31,				Nine months ended December 31,
	2023		2022		2023		2022
Gaming (1)	$	409,043	$	411,927	$	957,576	$	1,031,876
Keyboards & Combos	229,432		220,059		605,201		648,632
Pointing Devices	206,180		199,106		572,310		567,589
Video Collaboration	169,522		173,516