Logitech Increases Spending on AI and Gaming as Supply Disruptions Persist
Logitech International will boost spending on product development and marketing this year despite Middle East supply disruptions and concerns about global economic slowdown, CEO Hanneke Faber said. The Swiss-U.S. maker of keyboards, mice, and video-conferencing equipment is betting on gaming, business customers, and AI-enabled devices to drive growth.
The company expects Middle East logistics issues to cost about $15 million in sales this quarter, following a $5 million impact in the previous three months. Despite these constraints, Logitech forecasts 2% to 4% sales growth in constant currencies to $1.190 billion to $1.215 billion in the current period.
Where the Money Goes
Research and development spending will reach around 6% of sales this year, up from slightly below that level last year. Sales and marketing spending will also increase from about 16% of sales.
Total operating expenses are expected to land toward the top end of Logitech's long-term range of 24% to 26% of sales, compared with 24.8% in the 12 months ending March 2026.
"We came out of the last fiscal year with such a strong financial base, so we have the firepower to do it," Faber told Reuters.
Three Growth Areas
Gaming: Logitech sees the gaming market as resilient, driven by younger consumers spending more time on computer games. The company plans continued investment in gaming peripherals and devices.
Business customers: Demand is expected to remain strong as companies with solid recent earnings invest in new computer hardware. Logitech is stepping up efforts to capture this segment.
AI-enabled devices: Faber emphasized that AI for Product Development presents significant opportunities. The company will focus on integrating Generative AI and LLM capabilities into products for both consumer and business use.
Logitech also identified healthcare, education, and government as long-term growth areas.
Supply Chain Advantage
Logitech has avoided some cost pressures facing competitors. Seventy-eight percent of the company's products use recycled plastic rather than virgin plastic, shielding it from oil price increases that have made plastic more expensive.
The Middle East disruptions, however, remain a logistics problem rather than a demand issue. "We're not seeing that demand for our products is down," Faber said. "It's just logistically hard to get it to people."
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