Okay what that captain to the psychologic International today this company which makes computer peripherals like keyboards and mice along with headphones Mobile speakers videoconferencing gear tablet accessories remote controls all kinds of expensive high-end gaming equipment had been a huge winner and recent years but when Logitech reported last night the numbers were let’s say call them less than perfect.
Well the company delivered a modest top and bottom line beat these were record numbers in absolute terms when you drill down.
You see some real areas of what I.
Regard as weakness logitech miss revenue.
Expectations and five out of nine major product segments on top of that the company merely maintained its guidance when many investors hope they would raise numbers at the end of august the stock was up nearly 50% for the year now it’s only.
About 7% that’s a bruising even as logitech stole to reform so exactly how worried should we be I think we need to dig deep with brac and dairies the president CEO of Logitech get a better sense of the quarter and where the company’s headed mister down.
Welcome back to man money okay so bracket I’m looking I’m trying to decide which metrics I should cattle the gross margins.
Were definitely what I wanted you’ve got incredible leverage to eSports a gaming I think that’s great but then I’m drawn to.
Some of these revenue numbers I look at.
Say mobile speakers I look at smart home and then I say well maybe I’m being too bullish could you explain and let’s say solve.
My conundrum let me let me relax you a little bit so first the two categories that I would focus.
I’d focus on our first gaming as you said we grew 43% we’re on a tear and you know the whole story.
You discovered it first second one is video collaboration it’s our it’s our it’s it’s also on a tear grew 25% actually they sell out underneath that grew 50 so it’s on.
A thinner third that old core business everybody.
Has given up on grew 8% it’s still a very healthy businesses growing nicely so those are the three numbers I would.
Focus on the Bluetooth speaker number is we’re in a transition we’re.
Bringing out two new versions of the boom in the mega boom so we were forcing out the old ones for the last two two and a half quarters and now we’re bringing in the new ones so that’s in transition.
And the home business is a tiny business for us it’s one percent of our.
Total business so I wouldn’t even bother looking at it well okay so we have to define why the stock did go dad I mean the rap is obviously that you I did not blow out the numbers and we’re all so used to blowing out the numbers I can we rationalize that expectations got too.
High and all you did was deliver usual greatness like you know here’s the story so we we grew double-digit or grew 10 percent we last quarter you’ll remember we we raised our guidance both top.
Line and bottom line so it’d have been kind of odd for us to.
Raise two quarters in a row we as you said our gross.
The most important number on a P&L we hit the upper end of the guidance and we over deliver our profit and we we deliver very strong on the profit line so overall I think it was a strong quarter now I know that you were asked by a fellow from Maine first Bank don’t really know them about the processing shortages Intel shortage and what that did you know I figured because your gross margins so good it’s really a non-factor but at what but I just didn’t curious to know what is.
Going on in terms of semiconductors a shortages and watch tech you know I think you know semiconductors are we obviously use a lot of chipsets through our different products but for we really haven’t had a problem with chipsets or the other components that are running in shortages in China we have a fantastic operations team very long-standing relationship social suppliers and we’d be able to been able to get exactly what we need when we need it alright so speak to me about eSports.
Because you know that in the when the let’s just say when the dust settles we’re gonna be looking at those revenue numbers and realize between that and keyboards that’s all really you look at because that’s what this company’s.
Becoming if you wanted to shut the stuff that’s lower right now you can do it and.
Raise the multiple of your stock it does appear to me it doesn’t beer to me that what was on fire is just getting hotter it is getting hotter as you know you know eSports.
We launched to two new mice this quarter we launched one that we we spent two years developing it with pros directly with pros it weighs 80 grams super super light and then the other one we took the the biggest miles the biggest mouse in the gaming business and we upgraded it with the best sensor in the world and so and it’s.
It’s on fire so and our business is super super hot all right so Brackett are you ready to do what I think a smart business people are doing including a friend of mine which is.
Begin to get behind little league teams of gamers because we have a progression if you’re a baseball player well you’ve got literally got basketball I play Biddy basketball with hopes of one day I’d be a pro there’s partners I thought maybe I’d be a pro you know what I’m talking.
About now scholarships that are coming a logitech branded seven eight nine year old team would make it so that.
Your company would have gaming for ages and a stream of revenue that would be remarkable we we so believe in this Jim you know there’s a there’s a company a startup called super league gaming.
That’s that has teams across the United States and all the major cities has the equivalent of of kind of Little League and mini basketball and and Pop Warner football all kind of combined and we have invested in that company cuz we do really believe in this so we’re right on it how about on the software side what do you.
Have well you know software we when I started the company we had I think know we had firmware engineers but no real software engineers today about one out of three of our engineers or software engineers and our product groups and we’re adding software throughout our business in our in our Jaber business the air phone business.
Really nice app where you can customize the sound and you’ve got an incredible equalizer and some really cool things coming that I just looked at this morning so we’ve.
Got software coming into every product we’ve got AI and our video conferencing equipment which is cool and the lastly I want to know just in terms of your your judgement fortnight or Red Dead Redemption to what do you think I’m.
Gonna go with fortnight who oh I don’t want to tell suit he has a particular although those girls you better be careful anyway look I think gaming’s huge and you didn’t diminish my order for it one.
Bit thank you so much for coming on rockin down president/ceo planchette good to see you sir but little bug they have bunnies back yet to the break booyah Jim Cramer here.
From there buddy thanks for watching see me see you on YouTube click here to subscribe and get the jump on my exclusives with CEOs plus market news investing advice and a whole lot more.