Thank you. Hi. My name is Paul Chung. I'm the applied emerging tech analyst here at JPMorgan. I'm pleased to have with me the Logitech CEO, Bracken Darrell. Welcome.
Thank you. Thanks, Paul. Thanks for being here. I just wanna say for you listening out there, we've got a full... I mean, this room is completely packed with people.
So, um-
Ending room only.
Yeah. To start, can you give us like a brief overview of the company and how it's evolved?
Sure. You know, I've been with the company for 11 years. Actually, I've got two people with me today, my COO, who's hiding under a chair somewhere in case we ask a question about sustainability, and my head of IR, Nate and Prakash. I've been here 11 years, and we've really developed the business. We're worth 10x more than when I started. We've gone from about 15 or 16 categories to about 38, where our primary focus areas are video equipment for rooms or things in companies to enable video communication.
We not only do the equipment for rooms that you can make a call with, a video call with, but we also make the ability to book rooms on the outside, and then we make cameras for your whiteboard. We do a lot of different things in that space. Second one is the area of gaming. Most people know us for that. If you're under the age of 30, you definitely know Logitech G. That's been a great business. The third big business I would say is I think we're just gonna start calling it something like hybrid work, because it's really the personal workspace that you go to, or you bring with you, or you have in your home.
Those are the three big areas, and they, as I said, they capture a lot of categories. They're all great secular growers.
Great. We'll dig in deeper to those as well.
Okay.
Just on the macro, any kind of lingering supply chain constraints you're seeing?
No. You know, I think we're really behind that. I mean, we're in front of that now. I think it's, you know, we all struggle with two key things. One was just the, there was some port issues and things that happened during the peak of the pandemic or post-pandemic when the demand was especially at a crazy high. The other thing was just the supply of components where, you know, there was just a very difficult time to get supply.
Actually, Prakash Arunkundrum, who used to be our head of operations, now is the COO, was kind of the brains behind putting us in a position to grow like we did during the pandemic, 'cause we grew 74% the first year of the pandemic when other people were struggling to even get supply. That was really because of some very strategic inventory bets we made. That paid off tremendously.
Talk about how your channel inventory is trending. You've had consecutive quarters now where your sell-through has kind of exceeded your sell-in.
Yeah. Which is, you know, very, very traditional for a hardware business. When the business is coming down, you know, obviously the channel needs to come down. They, people, you know, retailers, e-tailers take capacity out of the channel. That's been going on now for about four or five quarters. You know, we'll probably have another two quarters to go, but we really watch that tightly. I like to be lean, so we'll try to stay lean. We think we've got, you know, somewhere $50 million-$80 million more inventory to come out in this first half. Once that's done, we should be about where we wanna be.
Talk about, you know, your key customers and your feedback from them on kind of where they're seeing the macro and how consumers are behaving.
you know, I'd say it looks, you know, We only guided the first half, as you know very well, Paul, which I have not done since I've been here in 11 years, 'cause we just didn't have enough visibility to back out. I would say that looked a lot like the last two quarters. you know, I think when do we come out of the kind of the slowdown of this trough? I don't know. We'll see. When we see it, we'll extend our guidance for the full year at that point. I believe that the best metric for that is sell-out. We watch sell-out like hawks and, you know, we'll keep you posted.
Okay. Let's jump into the segments. Pointing Devices has really grown for the longest time and then saw a big bump during the pandemic. Now it's, you know, kind of against those tough comps, where are you seeing, you know, pockets of strength and weakness across Pointing Devices?
I love this whole space of pointing devices and keyboards. You know, when I came to Logitech, I came because the people inside Logitech and the board were convinced that that was gonna be in a long-term secular decline. That thrilled me because what I really wanna do is serially enter new categories using design. When we got the design engine running, a strange thing happened. We realized that actually the problem with the category was us, not the consumer. They were just looking for more interesting things to buy. The more innovative we got, the more we sold. We've grown, you know, just throughout that whole period. I think this is the most exciting time actually right now. Even more exciting than the pandemic, 'cause the pandemic was just a gift.
I think the opportunity now is for us to upgrade all those, the installed base of PCs that were out there before and now are sitting in people's homes in this incredibly packed room. Those of you listening, all of you probably don't have exactly what you need. This is such an incredible opportunity for us, and we have done a better and better job at segmenting the consumer, the P&G old-fashioned way of really understanding the different types, the ones that need ergonomic issues or might think they have ergonomic issues, the ones who really want high performance. We have an incredible opportunity ahead of us.
Yeah. Can you expand on kind of how's the launch with the Apple-compatible products been?
It's been really good. I mean, you know, we went so many years where our products really didn't work very well with Apple, and it was really. You know, we grew up, Logitech grew up Right in the, on the, kind of the front steps of Microsoft. You know, when the mouse was really became a standard device for the PC, Microsoft was the great enabler. We grew through that whole period. Of course, Apple was the famously walled garden. You know, and it was their garden, and nobody would get in there. Well, Apple was always great to us, but, you know, our products We didn't do a good enough job making sure our products worked well with Apple devices.
Starting about three, four years ago, we figured that out. Since then, we've had an extremely successful run of making products that Apple users like. I think that's great for everybody. I know, you know, I think Apple just wants our products to work well. I mean, that's their whole. They're not worried about us. We're a harmless, you know, capable partner, but they really want our products to work well, and finally they really do.
All right. Can you talk about across Pointing Devices and keyboards, like the pricing versus volume dynamic and how that's evolved? I know, you know, in the, in the beginning you were kind of culling the portfolio of lower SKUs, and now it's, I mean, you can buy a keyboard for pretty expensive keyboard nowadays.
I mean, and, you know, if you think about how much time you spend with a mouse or keyboard if you're in the knowledge working business. You know, it's an incredibly affordable thing still. I mean, the fact that you can buy an incredible keyboard for $100 is really remarkable, and it'll last, you know, it'll last a very long time, and we want it to, because of the sustainability. Mice are even more affordable. Yeah. That said, we've systematically marched our way up in, on the average price point, and we'll keep doing that. You know, mix within all of our categories and mix across our categories has been one of the reasons why our gross margin's expanded over the years.
Right now our gross margin's pulled back for reasons everyone knows, you know, inflation and currency. You know, we really have a fundamentally higher gross margin business because of the intra-category and inter-category mix. That comes right back to innovation and our ability to innovate at a level that's really rewarded by people who buy the products. We're pouring it on now.
Great. Let's move into gaming. This is an exciting area. What kind of industry trends are you seeing?
You know, it's funny, you know, the gaming business has been talked about so much for a decade now. You know, there was an article in the paper, like New York Times or something yesterday that said that the business of esports is, I think, something is slowing down or something. Really what they're talking about is there's a tremendous amount of investment going into teams and... I haven't read the article, but went into teams and that kind of stuff, and now it looks like, are they really gonna get a return? That's all true, I'm sure. The business of esports that relates to our business of people playing games is going nowhere but up. Every year, new cohorts come into the category.
You know, kids 8, 9, 10, 11, 12 are entering that category. All those 25, 26, 27-year-olds who came into the category the 15 years before don't leave. This is a long-term secular grower at a level that, you know, you just love to have. The good news is, if you just think about the shape of the curve, you know, I'm looking across this room, and I'm trying to convince myself I'm not the oldest person in the room, but I am. If I took the people in this room that are over the age of 50, and there's like just one of us, you know, and that person doesn't play games, okay? In the population, there's a lot.
You think about all those people under the age of 30, and all of them play games, okay. Now just think about the shape of the volume curve that's coming as those 30-year-olds grow to be 50-year-olds, and all their kids come into the world playing games. That's what's gonna happen to our gaming business and has been.
You had kind of explosive growth during the pandemic, you know, what do you kinda see now in terms of upgrade cycles for gaming products?
For gaming products. We think the gaming purchase cycle's somewhere about, you know, three or four years, depending on the product. A bunch of people bought during the pandemic over the last three years, so at some point they'll come back in and hit another upgrade cycle. You know, part of it, our strategy is not really to wait for an upgrade cycle. We're segmenting, and the same thing I talked about on the kind of business or work side, we're doing on the gaming side. On the gaming side, we've cut it into some really interesting groups. Maybe the biggest opportunity we have is to get at all those people, you know, when you think gaming or esports, you think of dark room, black products, basement. I don't wanna go there.
I've gotta get my son out of there and get him to bed. The truth is, 50% of the people who play games are not that. They're somebody who's a lifestyle gamer, who really wants color, wants fun, it's casual. They're not out there to win. They're out there to socialize. This is the new playground for them. They're socializing with people all over the world, sometimes with their friends down the street. It's a super social event, and so we're starting to create products for them, and this is super exciting. We launched something called the Aurora Collection, which is beautiful and fun and nothing like the products we had, and done extremely well. There are lots of ways for us to grow this business beyond the purchase cycle.
We really think we can accelerate the purchase cycle or really bring in people who are buying what they had to because they didn't see what something really for them. We'll see. You know, time will tell.
You've kind of expanded beyond the lifestyle and, you know, have products tailored towards women, and then you have partnerships with like Fortnite and Grand Theft Auto, and how have those performed? You know, can we expect more kind of partnership announcements?
Yeah, they've always done really well. You know, we love, you know, what in fashion would be collabs, you know, your Nike collaborating with a Gucci or somebody. Or Adidas collaborated with Gucci. What in our business would be the game, you know, us collaborating with a game developer, you know, having a collection for Star Wars or for, or for, as you said, League of Legends. Those will continue to be a core part of what we do. We do them systematically, regularly every year. We do new things every year. We also collaborate with esports players or figures in the gaming world, Shroud, for example, who are popular and have a strong opinion about what we do and how and the products we make.
Like Nike, they contribute to the design of our products. We actually take their input very seriously. It's been a very successful model, and we're gonna keep advancing that even as we're adding the lifestyle products we talked about.
I think you did a partnership with, is that Herman Miller?
We've done two gaming chairs now with Herman Miller. They've been super successful. You know, as much time as you spend in any chair, you know, it needs to be made or to be ergonomic, and Herman Miller is terrific. We've worked with them. We shared, you know, information about what gamers are all about. We really tried to do the classic. They're a great design company. We really designed the product around the user or under the user in that case.
Gotcha. Let's switch to video collaboration. Talk about the trends for conference rooms, the new kind of hybrid work environment and the trends you're seeing there.
You know, I'd say right now, you know, as of the last two quarters, you know, the video conference equipment's kind of in a lull in the action. It's not growing. It's not declining much, if at all. It's been in that mid-single digits to down mid-single digits. I really do think the opportunity's coming. There's two things that kind of paused that a little bit. One of them is the budgets have gotten tight. You know, there's been so much discussion of layoffs and things. You know, like, our company's a good example. We really constricted our OpEx budgets as we came into the year, and we started saying, "Okay, do we really need people to order a new computer? They've only had it," you know.
They're doing the same thing in conference rooms and things. That certainly has impacted it. Think how little it's impacted it, that we're only, like, kind of flattish or down single digits in that business. The other side of this is all the discussion about hybrid work. You know, you can't have rooms without video at some point. It's just not gonna happen because you're gonna have people outside of those rooms that you need to communicate with, and audio's not getting it anymore. It's over, you know? The game is over. Audio lost, video won. You know, just like the game was over, a conference room with no phone in it lost, and the audio won in the last generation.
We're headed into the next generation, and it's only about 10% or 15% of all the rooms that we think will be video-enabled are. The other cool thing, you didn't ask me this, but I'll just put it out there. The other cool thing is everybody who bought some video equipment in the last few years is gonna wanna upgrade it because the product is very different. It's now a solution. It's not point-and-shoot camera kind of thing. That's really out there. Then on top of that, we're expanding the capabilities we do in the room and the number of products in the room. Still, it's a fraction of the cost of the old, you know, in-infrastructure in the room kind of program. It's a, it's a super exciting category. Just one more thing.
I was just on the elevator with Prakash and Nate, and there was a guy in front of me, and he turned around, he said, "Logitech." He said, "I'm gonna think for a second what my favorite Logitech product was." He was the CEO of a company. I'm not gonna name it. Now it's a prospect. It's going to the Salesforce. We're gonna be selling. He said... We talked for a little bit, and he said, "Yeah." He said, "We're about to rip out all of our old..." I won't name the competitor 'cause I don't do that very often. We're gonna rip out all their stuff. I said, "Okay. Well, we'll be calling you if you, if you already talked to us." My guess is we're already talking to him.
That's a good example.
Mm-hmm. Yeah.
People are transforming their offices. They're getting it ready for the next act. The next act is hybrid. They know it. We know it. Whether it's one day a week, two days a week, four days a week, it's hybrid.
Yeah. Can you talk about your go-to-market strategy in VC and the Salesforce you've built there, and then, how you've kind of taken business from incumbents, based off of quality and price?
Yeah. Yeah. We got into this business in a very low-key way. We started the business by following our webcams. You know, in the earliest days of my tenure at Logitech, I would go to see a... I was obsessed with startups 'cause I'd moved to Silicon Valley. I'd go into somebody's little conference room, and they'd have a TV on the wall, and I'd see a Logitech camera, a webcam, a little tiny webcam. I remember the first time I saw it, I said, "Why do you have that up there?" He said, "Oh, this doubles as our as our video conference room." He said, "And look, I just plug my laptop in like this, and presto, it's a video conference room." From there, we started making something.
We said, "We can do better than that." We created something that looked a little like WALL-E, you know, if you've seen the movie. It was a little bit bigger, a little bit better. We kept marching up, and we got bigger and bigger. Along the way, we just sold the same way we sold everything else, into a distributor who somehow got it into a company somewhere, usually a small company, sometimes a bigger company. Somebody in a big company would want something their IT department didn't want to get around to, and they'd put it in the conference room. Presto, we were inside a big company. As we got bigger and bigger, we got really big. We did more and more rooms. Our products could suddenly fit any size room.
We could even do a big old board room. Our products were as good as anybody's, actually better. We realized, you know what? We've got to change, because if we keep going down this path, we're gonna get blocked by the big players because they're starting to realize that we're not just this little webcam company that doesn't have much technology that they can step in and take when the time comes. We started building our own sales force. We looked at make versus buy, and then we looked at buying our own sales force, basically, but we ended up building. We started that 6 years ago. We now have a full-scale sales force all around the world. We're still learning how to be a B2B company.
I'd say on a scale of 1 to 10, if 1 is we have, like, no idea what we're doing in B2B, and 10 is we're the best in the world, we're probably a five, but we're making great progress. Think about that. We're a five, and we're already as big as we are. If we could keep going to a six and then a seven and then an eight, then we'll keep our sights on that 10.
Gotcha. Let's switch into some of the software products you've acquired over the years and, you know, have those, like Streamlabs and some others. You know, where are you seeing opportunities there, and how are you building those or expanding those pieces of the business?
You know, there's People talk services, software, and then, and hardware, you know. Today, we're, you know, 99% of our business is in hardware, and we're a hardware company. I don't think tomorrow we're gonna become 50/50, you know, services and hardware. I do think we've quietly been investing in software, which sits between those two, literally, for us for many years. I'm sure we hire a lot more software engineers today than hardware, and we're starting to build out services. We've got a service business inside of our video collaboration business. It's very interesting. It really is. You know, you buy a room, why wouldn't you get the service that goes with it?
We keep adding value to that service and expanding it, and it's growing rapidly. We, you mentioned Streamlabs. Streamlabs was the first recurring revenue business we really ever had, and it's been incredibly successful. We don't quote its performance publicly, but that way outperformed anything we expected. The most important thing about it is it's a learning lab for us. We're learning and learning, trying to find new ways to apply that to other parts of our business and also trying to think how can we combine that with our existing business.
Right.
Stay tuned. It's super exciting.
Yeah, then just to touch on, you know, your ability to be nimble and pivot to talk about kind of, you know, mobile speakers and how you kind of rode that wave and now you're kind of reallocating resources, if you could expand on some of those categories where you see ups and downs.
You know, it's interesting. When I first got here, people used to talk about Logitech was this company that was really good at riding waves. I kinda liked that in the beginning, but there was some reason why I didn't like it, and I couldn't figure out what it was. Finally, I figured it out a few years ago. I don't actually like riding waves because waves go up, and they come down. I like a rising tide that never goes down, and that's the kind of categories we really try to get into. We have ridden some waves, and Bluetooth speakers is a wave we've ridden, and it went up, and it's gliding down, and we're maximizing contribution margin from it, and we're investing it in other things.
The tides are an enormous secular trend of video conferencing going everywhere, video going everywhere. The enormous reality that hybrid work will never go away, and it'll be super important to the world. This fountain of continuous growth in gaming. Those are tides, that's what we're a lot more interested in. When we see a wave, we wanna get off it and just exit it or at least let it decline.
Talk about the, you know, the YouTube generation, how you've pivoted to, you know, equip these workstations for that YouTube generation.
Yeah. That's another part that I haven't.
One of those tides.
I haven't mentioned at all, Paul. I'm glad you brought it up. You know, we have, I'd say it kind of sits somewhere between our gaming business and our workspace business is the rise of the next generation of workers who are creators, you know. That's kind of a cool name for what basically a lot of people are doing today, millions and millions of people are doing today, which is creating content for other people, either whether it's on YouTube or on TikTok, you know, or on Facebook or LinkedIn. What they need is tools.
Just like a basketball player needs shoes and a basketball, they look for Nike or Adidas. A gamer needs a mouse, a keyboard, they look to us more times than others. A creator needs a microphone often and a good camera.
Microphone.
They need a mouse and keyboard. These are also in lights. These are all spaces that we feel like we have a right to win in, and so we've systematically entered those categories, and there are more to come. Streamlabs is one of them, and it's a really, really exciting long-term space.
Yeah, yeah. I think the Litra... Is it?
Litra.
Litra?
Yeah.
The success there.
Yeah. That's our lighting product.
Yeah.
We have two different products now.
Right.
They've done really well.
You had an announcement with iFixit. What's going on there?
Well, you know, iFixit is a company that enables you to fix a product rather than throw it away. Paul, you know, and some in this incredibly packed room will know that we are so dead set on becoming a positive force in the world of environmental sustainability. You know, our ringleader is Prakash, our COO. You know, we have invested a lot of effort, a lot of time, and a lot of great investment that's got a high return in turning ourselves into, I think, one of the leading companies in the world in environmental sustainability. This is just the latest step in that. Repairability is a critical part of that.
The more important parts, I think, are the other things we've done, and I'm gonna jump into those.
Yeah.
if you don't mind.
Yes, please.
We started years ago, long before I got here and before Prakash got here, we started trying to move all of our internal buildings and factory to renewable sources of energy. We did that. We're almost 100%. We're in the 90s. We've done it everywhere it can be done. The second thing we started to do, though, we started to really get serious about how can we bring our own carbon footprint down. We started to Design for Sustainability. Tearing up our products apart and saying, "How can we lower the carbon impact?" Scope 1, 2, and 3, for those who know what that means, for all of our products.
Every time we design a new product, we apply Design for Sustainability as a toolkit, and we bring down our carbon intensity. Third thing we did was we thought, we can't have a big enough impact if it's only us. We started, we had this idea of carbon labeling. Now we carbon label 45% of our products. We're headed to 100. We announced the same within a 2-day period of Allbirds and Unilever, so three companies in one day. We want everybody in the world to have it. If you're listening on this call, and you're an investor or you're an analyst, you know, I really hope that you will ask those companies you meet with, "Are you carbon labeling yet?" If everybody's carbon labeling, then this can become the new calorie.
Those people who are really interested in carbon labels will make all of us who are running companies feel obligated to bring down the carbon every time we launch a new product, because otherwise you're gonna get beaten by a competitor like us. If that, if that calorie count or carbon count becomes a standard, it will have a big impact on the carbon levels in the world. We need more and more companies doing it, and they are. We're open for business. We have a free license we'll give anybody. We're working with people right now, including our competitors. That's the third thing we did. We set our own goals. We're carbon neutral now.
We'll be climate positive or carbon negative by 2030, and we won't stop there. We're gonna keep going. This is just the latest. The only thing I didn't mention, I will just give one sentence to, is we're also, I don't know what percentage we're at now, but probably 70% of our mice and keyboards contain recycled plastic. We're upping the level of recycled plastic, and we're taking it across all of our products too.
Gotcha. Let's jump into the financials. Gross margins saw a little dip here in 2023 on FX and supply chain. What's the kind of pathway to 39% of 44%, your long-term target?
Okay, before I tell you that, I just have to make one more advertisement. If you're a business and you buy our equipment, you just bought a piece of carbon neutral equipment. Think about it. Okay, how do we get from the 36 that we're showing right now, which is kind of a multi-year low 'cause of inflation and currency and stuff, how do we get up to 39% and then eventually above that to inside our range of 39%-44% gross margin? Gross margin, I'm preaching to the converted, I'm sure, but to me, it's the most important number in a P&L. It reflects everything, your innovation power, your go-to-market efficiency, effectiveness. There's a lot in there. Your cost control. Look, the first steps in this I think are pretty straightforward. You know, inflation's easing.
It will ease over time. The currency's already strengthened but hasn't made its way through our inventory pipeline yet. Those steps, and then the easing of the supply of transportation, et cetera, those steps should get us from 36% to 39% by the time as we get into the back half of the year and we're exiting the year. Going beyond that, you know, we've got just great categories with really high gross margins, and we're always working on cost reduction. You know, reducing the cost in an inflationary world is a challenge. Reducing the cost in a world that's where inflation's starting to come down is an opportunity, and we're really facing that opportunity right now. I'm super excited about it.
It means that Prakash is on the hook again, but we'll get there, and I think we'll be, you know, well inside that 39%-44% short order.
Okay. Then let's move to OpEx.
Okay.
Where are you finding leverage? Where is your R&D being focused? You're very, you know, into new products, introducing new products. Anything you can talk about there?
Yep. Yeah, we were I think we reduced our OpEx admirably, considering the top-line impact. We were quick, we brought it down strongly. We've really then tried to make that permanent. We started out with just the variable cost cuts you could do, and now we've really gone to that plus a permanent reduction in the overall size. We went across virtually everything. Let me talk about what we tried to protect. We tried to protect our investment, as you said, in R&D. That is the lifeblood of this business. R&D and design are. You know, that's the engine that makes this thing work. We also tried to protect our go-to-market structure and capacity for especially in B2B.
You know, that's really where we've been investing the last few years, and we wanna keep investing there and making it super strong. Those are really probably the two key areas we really tried to make sure that we kept, we preserve the integrity of. In both cases, we're gonna keep pouring it on. New products, you know, we launched 52 new products last year. We had the highest number of design awards in the company's history by a lot. Our innovation engine's on fire. When the markets just come back a little bit, we're gonna see some really strong growth.
Okay. I have more questions, but I'll open it up to the audience for questions. I have one here online, so.
This enormous audience.
Yeah.
Okay.
just this quick one. You know, you've launched your G CLOUD-
Yep.
-gaming device in Europe.
Yep.
Can you talk about this product and global market potential for this product?
Yeah. I'm not gonna give a number on it, but I will say, I think, you know, this is one of those early days categories, a brand-new category. You know, cloud gaming, a mobile cloud gaming device is a new idea. We launched the first geography, which was the U.S., you know, last year, and now we expanded it into Europe. Stay tuned. I'm really excited about the category. I think, you know, we've got competitors who are following us in, which is good. I think it will help drive energy and excitement in the category and awareness. We'll see where it goes, but I'm convinced that, you know, as gaming continues to grow, things like this are gonna become bigger and bigger.
Okay. Do we have a question in the audience?
You mentioned that you're about five out of 10 right now in B2B sales force. What does a seven or eight kind of look like, and what do you have to do to get there?
I'm gonna Maybe the mic didn't pick you up. You know, I said earlier, we're a five out of 10 in terms of where we're gonna maturity level, let's say, on the B2B sales force. What does a seven or eight look like? You know, I think a five out of 10, it means we've got the capacity out there. We're winning a lot of deals. We're the market share leader right now. You know, arguably, maybe I'm judging us too harshly. A seven out of 10 or an 8 out of 10 to me would be, you know, we have absolutely near perfect execution in Salesforce. All of our deal activity is loaded into Salesforce.
When it's just a glimmer in somebody's eyes, we're tracking that to the point where the metrics are blazingly clear, and our reward systems are tied to that, completely. We have a very rigorous process of helping our talent get better and continuously upgrading everyone and becoming. Then having the capacity to add more and more products and categories into that engine. That's a seven or eight. You know, we're gonna get there, and I feel really good about the progress we've made. We've got great people. We just have to keep working it, and we will.
Okay. We'll chat on, kinda capital allocation. You know, share buybacks pretty strong over the past couple years. Expect this pace to continue. You pay a dividend. Talk about your M&A strategy and what you're looking to pursue.
Yeah. Priority is always, you know, number 1, M&A. You know. We're pretty disciplined about our M&A. You know, we've had a very good return on the things we've bought, and we're gonna keep it that way. The second choice, you know, when we do have excess capacity with our cash, is we'll pay a dividend. We're gonna continue to do that. The dividend, we're headed into our annual general shareholders meeting in September, we'll come up with a recommended dividend for that. You know, I'll be shocked if we don't increase it. The third one is obviously buybacks. We returned $600 million to shareholders last year, a big chunk of that in buybacks. You know, I think that's a pretty good number.
I can't tell you know, we're not at the end of our current allocation, but we're nearing it, so we'll make a decision on what to do next. I think buybacks, in our case, are a very good investment.
Okay, great. We only have a couple minutes left. Is there anything you wanna leave us with about the Logitech story?
You know, I've been here for 11 years, I don't think I can remember a time when I thought we had more opportunity. It's really been an incredible period, but we've spent the last year and a half. You know, I love change. You know, I just love it. And I, and I, and I like, I'm probably crazy, but I really like uncertainty. Because when things get uncertain, people slow down and they freeze. And if you act and you go, you can win. We've been acting. We've changed the structure of the company inside in ways you haven't seen. We resized faster than about anybody. Now I think we're really positioned for the next wave of growth.
I guess I'd just leave you with that and the idea that if you're a company and you buy our anything from us, you're adding carbon neutral.