LOGITECH INTERNATIONAL S.A. 10-K

ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures The Company's management, with the participation of the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), has conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this Annual Report on Form 10-K (this Annual Report) required by Exchange Act Rules 13a-15(b) or 15d-15(b). Disclosure controls and Logitech International S.A. | Fiscal 2025 Form 10-K | 53 Table of Contents procedures are designed to reasonably assure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods s pecified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to reasonably assure that this information is accumulated and communicated to our management, including the CEO and CFO, to allow timely decisions regarding required disclosure. Based on this evaluation, the CEO and CFO concluded that, as of the end of the period covered by this Annual Report, the Company’s disclosure controls and procedures were effective at a reasonable assurance level. Attached as exhibits to this Annual Report are certifications of the CEO and CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications, and it should be read in conjunction with the certifications for a more complete understanding of the topics presented. (b) Management's Report on Internal Control over Financial Reporting The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of the Company’s management, including the CEO and CFO, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the criteria established in the Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of March 31, 2025. The effectiveness of the Company's internal control over financial reporting as of March 31, 2025 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report, which appears in Item 15. (c) Changes in Internal Control over Financial Reporting There were no changes in the Company's internal control over financial reporting during the fourth quarter of fiscal year 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. (d) Limitations on the Effectiveness of Controls The Company's management, including the CEO and the CFO, does not expect that the Company's disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. Internal control over financial reporting, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives will be met. Because of the inherent limitations in internal control over financial reporting, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. ITEM 9B. OTHER INFORMATION Securities Trading Plans of Directors and Executive Officers During the fourth quarter of fiscal year 2025, the following officer, as defined in Rule 16a-1(f), adopted a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408. On January 30, 2025 , Prakash Arunkundrum , our President of Logitech for Business, adopted a Rule 10b5-1 trading arrangement providing for the sale of an aggregate of up to 14,900 shares of our common stock acquired by Mr. Arunkundrum under our equity plans. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The first date that sales of any shares are permitted to be sold under the trading arrangement will Logitech International S.A. | Fiscal 2025 Form 10-K | 54 Table of Contents be May 26, 2025. The trading arrangement terminates on March 16, 2026 , or upon the earlier completion of all transactions thereunder. No other officers or directors, as defined in Rule 16a-1(f), adopted and/or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, during the last fiscal quarter. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. Logitech International S.A. | Fiscal 2025 Form 10-K | 55 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information regarding our executive officers is incorporated herein by reference to Part I, Item 1, above. The Company's code of ethics policy entitled, "Logitech Code of Conduct" covers members of the Company's board of directors, the principal executive officer, principal financial and accounting officer and other executive officers as well as all other employees. Any amendments or waivers of the code of ethics for members of the Company's board of directors or executive officers will be disclosed in the investor relations section of the Company's website within four business days following the date of the amendment or waiver. Logitech's code of ethics is available on the Company's website at www.logitech.com, and for no charge, a copy of the Company's code of ethics can be requested through the following address or phone number: Logitech Investor Relations 3930 North First Street San Jose, CA 95134 USA Main (510) 795-8500 We adopted an Insider Trading Policy which applies to our executive officers, directors and employees in fiscal year 2024, filed as Exhibit 19.1 to the Annual Report on Form 10-K for the year ended March 31, 2024. Other information required by this Item may be found in the definitive Proxy Statement for the 2025 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this item may be found in the Proxy Statement for the 2025 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item may be found in the Proxy Statement for the 2025 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item may be found in the Proxy Statement for the 2025 Annual Meeting of Shareholders and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item may be found in the Proxy Statement for the 2025 Annual Meeting of Shareholders and is incorporated herein by reference. Logitech International S.A. | Fiscal 2025 Form 10-K | 56 Table of Contents ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Annual Report on Form 10-K: 1. Financial Statements and Supplementary Data Financial Statements: Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations—Years Ended March 31, 2025, 2024 and 2023 Consolidated Statements of Comprehensive Income—Years Ended March 31, 2025, 2024 and 2023 Consolidated Balance Sheets—March 31, 2025 and 2024 Consolidated Statements of Cash Flows—Years Ended March 31, 2025, 2024 and 2023 Consolidated Statements of Changes in Shareholders' Equity—Years Ended March 31, 2025, 2024 and 2023 Notes to Consolidated Financial Statements 2. Financial Statement Schedule Schedule II—Valuation and Qualifying Accounts 3. Exhibits Logitech International S.A. | Fiscal 2025 Form 10-K | 57 Table of Contents Index to Exhibits Incorporated by Reference Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith 3.1 Articles of Incorporation of Logitech International S.A., as amended 8-K 0-29174 10/11/2024 3.1 3.2 Organizational Regulations of Logitech International S.A., as amended 10-Q 0-29174 10/26/2023 3.2 4.1 Description of the Registrant's Securities X 10.1 ** 1996 Stock Plan, as amended S-8 333-100854 5/27/2003 4.2 10.2 ** Logitech International S.A. 2006 Stock Incentive Plan, as amended and restated effective September 14, 2022 DEFA14A 0-29174 7/26/2022 App. A 10.3 ** Logitech Inc. Management Deferred Compensation Plan, as amended and restated 10-Q 0-29174 11/4/2008 10.1 10.4 ** Logitech Inc. Amended and Restated Deferred Compensation Plan, effective January 1, 2017 10-Q 0-29174 7/27/2023 10.1 10.5 ** Logitech Management Performance Bonus Plan, as amended and restated DEFA14A 0-29174 7/23/2013 App. C 10.6 ** 1996 Employee Share Purchase Plan (U.S.), as amended and restated DEFA14A 0-29174 7/23/2013 App. A 10.7 ** 2006 Employee Share Purchase Plan (Non-U.S.), as amended and restated DEFA14A 0-29174 7/23/2013 App. B 10.8 ** Representative form of stock option agreement (employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 11/4/2009 10.2 10.9 ** Representative form of performance stock option agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 2/5/2013 10.2 10.10 ** Representative form of restricted stock unit agreement (non-executive board members) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 10/25/2018 10.1 10.11 ** Representative form of restricted stock unit agreement (Leadership Team and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 7/28/2022 10.1 10.12 ** Representative form of restricted stock unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-K 0-29174 5/26/2017 10.33 10.13 ** Representative form of performance share unit agreement (Group Management Team (executive officers), Leadership Team and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-Q 0-29174 7/28/2022 10.2 10.14 ** Representative form of performance share unit agreement (executives and other employees) under the Logitech International S.A. 2006 Stock Incentive Plan 10-K 0-29174 5/26/2017 10.34 10.15 ** Employment Agreement between Logitech Europe S.A. and Johanna W. (Hanneke) Faber, dated October 29, 2023 8-K 0-29174 10/30/2023 10.1 Logitech International S.A. | Fiscal 2025 Form 10-K | 58 Table of Contents Incorporated by Reference Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith 10.16 ** Employment Agreement between Logitech Inc. and Prakash Arunkundrum, dated as of May 26, 2020 10-Q 0-29174 7/23/2020 10.1 10.17 ** Employment Agreement between Logitech Inc. and Samantha Harnett, dated as of July 1, 2020 10-Q 0-29174 7/23/2020 10.2 10.18 ** Employment Agreement between Logitech Inc. and Charles Boynton, dated as of February 6, 2023 10-K 0-29174 5/17/2023 10.18 10.19 ** Offer Letter between Logitech Inc, and Charles Boynton, dated January 30, 2023 10-K 0-29174 5/17/2023 10.19 10.20 ** O ffer Letter between Logitech, Inc . and Matteo Anversa , dated August 5, 2024 8-K 0-29174 8/6/2024 10.1 10.21 ** E mployment Agreeme nt between Logitech Inc. and Matteo Anversa, dated Au gust 5, 2024 8-K 0-29174 8/6/2024 10.2 10.22 ** Form of Director and Officer Indemnification Agreement with Logitech International S.A. 20-F 0-29174 5/21/2003 4.1 10.23 ** Form of Director and Officer Indemnification Agreement with Logitech Inc. 20-F 0-29174 5/21/2003 4.2 10.24 ** Credit Agreement dated January 27, 2025, by and among Logitech Europe S.A., Logitech International S.A., the lenders from time to time party thereto, and PNC Bank, National Association, as Administrative Agent 8-K 0-29174 1/28/2025 10.1 10.25 ** Guaranty Agreement, dated January 27, 2025, by and among Logitech Europe S.A. and Logitech International S.A. in favor of PNC Bank, National Association, as administrative Agent 8-K 0-29174 1/28/2025 10.2 19.1 Insider Trading Policy 10-K 0-29174 5/16/2024 19.1 21.1 List of Subsidiaries X 23.1 Consent of Independent Registered Public Accounting Firm X 24.1 Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K) X 31.1 Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1 * Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97.1 ** Executive Clawback Policy 10-K 0-29174 5/16/2024 97.1 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X 101.SCH XBRL Taxonomy Extension Schema Document X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X Logitech International S.A. | Fiscal 2025 Form 10-K | 59 Table of Contents Incorporated by Reference Exhibit No. Exhibit Form File No. Filing Date Exhibit No. Filed Herewith 101.DEF XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB XBRL Taxonomy Extension Label Linkbase Document X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X _______________________________________________________________________________ * This exhibit is furnished herewith, but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference. ** Indicates management compensatory plan, contract or arrangement. Logitech International S.A. | Fiscal 2025 Form 10-K | 60 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. LOGITECH INTERNATIONAL S.A. /s/ Johanna (Hanneke) Faber Johanna (Hanneke) Faber Chief Executive Officer /s/ Matteo Anversa Matteo Anversa Chief Financial Officer May 23, 2025 Logitech International S.A. | Fiscal 2025 Form 10-K | 61 Table of Contents POWER OF ATTORNEY AND SIGNATURES KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Johanna (Hanneke) Faber and Matteo Anversa, jointly and severally, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Wendy Becker Wendy Becker Chairperson of the Board May 23, 2025 /s/ Johanna (Hanneke) Faber Johanna (Hanneke) Faber Chief Executive Officer (Principal Executive Officer) May 23, 2025 /s/ Matteo Anversa Matteo Anversa Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) May 23, 2025 /s/ Donald Allan, Jr. Donald Allan, Jr. Director May 23, 2025 /s/ Edouard Bugnion Edouard Bugnion Director May 23, 2025 /s/ Guy Gecht Guy Gecht Director May 23, 2025 /s/ Christopher Jones Christopher Jones Director May 23, 2025 /s/ Marjorie Lao Marjorie Lao Director May 23, 2025 /s/ Owen Mahoney Owen Mahoney Director May 23, 2025 /s/ Neela Montgomery Neela Montgomery Director May 23, 2025 /s/ Kwok Wang Ng Kwok Wang Ng Director May 23, 2025 /s/ Deborah Thomas Deborah Thomas Director May 23, 2025 /s/ Sascha Zahnd Sascha Zahnd Director May 23, 2025 Logitech International S.A. | Fiscal 2025 Form 10-K | 62 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 185 ) 64 Consolidated Statements of Operations—Years Ended March 31, 2025, 2024 and 2023 66 Consolidated Statements of Comprehensive Income—Years Ended March 31, 2025, 2024 and 2023 67 Consolidated Balance Sheets — March 31, 2025 and 2024 68 Consolidated Statements of Cash Flows —Years Ended March 31, 2025, 2024 and 2023 69 Consolidated Statements of Changes in Shareholders' Equity—Years Ended March 31, 2025, 2024 and 2023 70 Notes to Consolidated Financial Statements 71 Logitech International S.A. | Fiscal 2025 Form 10-K | 63 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Logitech International S.A.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Logitech International S.A. and subsidiaries (the Company) as of March 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2025, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance Logitech International S.A. | Fiscal 2025 Form 10-K | 64 Table of Contents with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of the accruals for certain Customer Programs As discussed in Notes 2 and 8 to the consolidated financial statements, the Company recorded accrued Customer Program liabilities of $173.4 million as of March 31, 2025 for customer incentives, cooperative marketing, and pricing programs (collectively, Customer Programs). The Company records these accruals as a reduction of revenue at the time of sale. For certain of these accruals, the Company estimated the amounts based on historical data or future commitments that are planned and controlled by the Company. The Company uses judgment in analyzing historical trends, inventories owned by and located at the customers, products sold by the direct customers to end customers or resellers, known product quality issues, negotiated terms, and other relevant customer and product information, such as stage of product life cycle, which are expected to experience unusually high discounting. We identified the assessment of the accruals for certain Customer Programs as a critical audit matter. Historical experience being predictive of Customer Programs’ earned amounts is the significant assumption used to estimate the accruals for Customer Programs. Due to the inherent uncertainties related to the relevance of the predictive historical experience to the determination of the estimate, the testing required a high degree of auditor judgment. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the Company’s assessment of whether historical experience is predictive of Customer Programs’ earned amounts and the Company’s validation of the underlying channel inventory data used to estimate the accruals for Customer Programs. We assessed the historical experience used in estimating the accruals for certain Customer Programs using a combination of the Company’s internal historical information of sales, Customer Programs’ earned amounts, and relevant and reliable third-party channel inventory and sell-through data. In addition, we evaluated the Company’s ability to estimate the accruals for certain Customer Programs by comparing recorded accruals from fiscal year 2024 to actual subsequent Customer Programs’ earned amounts in fiscal year 2025. /s/ KPMG LLP We have served as the Company’s auditor since 2014. San Francisco, California May 23, 2025 Logitech International S.A. | Fiscal 2025 Form 10-K | 65 Table of Contents LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Years Ended March 31, 2025 2024 2023 Net sales $ 4,554,900 $ 4,298,467 $ 4,538,818 Cost of goods sold 2,582,745 2,509,418 2,806,438 Amortization of intangible assets 9,554 11,028 12,865 Gross profit 1,962,601 1,778,021 1,719,515 Operating expenses: Marketing and selling 814,414 730,310 809,182 Research and development 309,008 287,243 280,796 General and administrative 164,014 155,056 124,652 Amortization of intangible assets and acquisition-related costs 10,695 10,934 11,843 Impairment of intangible assets — 3,526 — Change in fair value of contingent consideration for business acquisition — ( 250 ) — Restructuring charges, net 9,615 3,866 34,573 Total operating expenses 1,307,746 1,190,685 1,261,046 Operating income 654,855 587,336 458,469 Interest income 54,997 50,636 18,331 Other income (expense), net ( 2,980 ) ( 16,376 ) ( 13,278 ) Income before income taxes 706,872 621,596 463,522 Provision for income taxes 75,343 9,453 98,947 Net income $ 631,529 $ 612,143 $ 364,575 Net income per share: Basic $ 4.17 $ 3.90 $ 2.25 Diluted $ 4.13 $ 3.87 $ 2.23 Weighted average shares used to compute net income per share: Basic 151,322 156,776 162,302 Diluted 152,784 158,171 163,704 The accompanying notes are an integral part of these consolidated financial statements. Logitech International S.A. | Fiscal 2025 Form 10-K | 66 Table of Contents LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Years Ended March 31, 2025 2024 2023 Net income $ 631,529 $ 612,143 $ 364,575 Other comprehensive income (loss): Currency translation gain (loss): Currency translation gain (loss), net of taxes ( 14,705 ) ( 3,078 ) 1,373 Reclassification of cumulative translation adjustments included in other income (expense), net — — 219 Defined benefit plans: Net gain (loss) and prior service costs, net of taxes ( 17,640 ) ( 13,163 ) 16,089 Reclassification of amortization included in other income (expense), net 759 243 ( 8,069 ) Hedging gain (loss): Deferred hedging gain (loss), net of taxes ( 703 ) 1,109 2,625 Reclassification of hedging loss (gain) included in cost of goods sold ( 3,461 ) 3,964 ( 8,391 ) Total other comprehensive income (loss) ( 35,750 ) ( 10,925 ) 3,846 Total comprehensive income $ 595,779 $ 601,218 $ 368,421 The accompanying notes are an integral part of these consolidated financial statements. Logitech International S.A. | Fiscal 2025 Form 10-K | 67 Table of Contents LOGITECH INTERNATIONAL S.A. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) March 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 1,503,205 $ 1,520,842 Accounts receivable, net 454,546 541,715 Inventories 503,747 422,513 Other current assets 131,211 146,270 Total current assets 2,592,709 2,631,340 Non-current assets: Property, plant and equipment, net 113,858 116,589 Goodwill 463,230 461,978 Other intangible assets, net 24,630 44,603 Other assets 344,077 350,194 Total assets $ 3,538,504 $ 3,604,704 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 414,586 $ 448,627 Accrued and other current liabilities 686,503 637,262 Total current liabilities 1,101,089 1,085,889 Non-current liabilities: Income taxes payable 88,483 112,572 Other non-current liabilities 221,512 172,590 Total liabilities 1,411,084 1,371,051 Commitments and contingencies (Note 13) Shareholders' equity: Registered shares, CHF 0.25 par value Issued shares: 168,994 and 173,106 at March 31, 2025 and 2024, respectively 29,432 30,148 Additional paid-in capital 82,591 63,524 Shares in treasury, at cost — 20,485 and 19,243 shares at March 31, 2025 and 2024, respectively ( 1,464,912 ) ( 1,351,336 ) Retained earnings 3,627,261 3,602,519 Accumulated other comprehensive loss ( 146,952 ) ( 111,202 ) Total shareholders' equity 2,127,420 2,233,653 Total liabilities and shareholders' equity $ 3,538,504 $ 3,604,704 The accompanying notes are an integral part of these consolidated financial statements. Logitech International S.A. | Fiscal 2025 Form 10-K | 68 Table of Contents LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended March 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 631,529 $ 612,143 $ 364,575 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 59,664 63,065 76,309 Amortization of intangible assets 20,098 21,681 24,407 Impairment of intangible assets — 3,526 — Loss on investments 2,029 14,674 14,073 Share-based compensation expense 89,913 82,889 70,782 Deferred income taxes 56,543 ( 42,424 ) 30,714 Change in fair value of contingent consideration for business acquisition — ( 250 ) — Pension curtailment gains — — ( 4,225 ) Other 120 379 1,005 Changes in assets and liabilities, net of acquisitions: Accounts receivable, net 69,979 91,519 51,185 Inventories ( 80,501 ) 259,796 247,309 Other assets 23,970 10,760 5,634 Accounts payable ( 31,627 ) 39,336 ( 219,051 ) Accrued and other liabilities 840 ( 11,978 ) ( 128,707 ) Net cash provided by operating activities 842,557 1,145,116 534,010 Cash flows from investing activities: Purchases of property, plant and equipment ( 56,128 ) ( 55,897 ) ( 92,353 ) Acquisitions, net of cash acquired — ( 14,424 ) ( 8,527 ) Purchases of deferred compensation investments ( 6,600 ) ( 11,571 ) ( 6,702 ) Proceeds from sales of deferred compensation investments 7,079 12,174 6,209 Other investing activities ( 1,619 ) ( 617 ) ( 4,357 ) Net cash used in investing activities ( 57,268 ) ( 70,335 ) ( 105,730 ) Cash flows from financing activities: Payment of cash dividends ( 207,853 ) ( 182,305 ) ( 158,680 ) Payment of contingent consideration for business acquisition ( 1,245 ) ( 5,002 ) ( 5,954 ) Purchases of registered shares ( 588,838 ) ( 504,203 ) ( 418,346 ) Proceeds from exercises of stock options and purchase rights 36,405 32,197 28,790 Tax withholdings related to net share settlements of restricted stock units ( 32,485 ) ( 29,744 ) ( 29,163 ) Other financing activities ( 3,344 ) ( 1,116 ) — Net cash used in financing activities ( 797,360 ) ( 690,173 ) ( 583,353 ) Effect of exchange rate changes on cash and cash equivalents ( 5,566 ) ( 12,789 ) ( 24,620 ) Net increase (decrease) in cash and cash equivalents ( 17,637 ) 371,819 ( 179,693 ) Cash and cash equivalents at beginning of the period 1,520,842 1,149,023 1,328,716 Cash and cash equivalents at end of the period $ 1,503,205 $ 1,520,842 $ 1,149,023 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 $ 10,106 $ 11,451 $ 8,593 Supplemental cash flow information: Income taxes paid, net $ 67,484 $ 50,855 $ 71,955 The accompanying notes are an integral part of these consolidated financial statements. Logitech International S.A. | Fiscal 2025 Form 10-K | 69 Table of Contents LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In thousands, except per share amounts) Registered shares Additional paid-in capital Treasury shares Retained earnings Accumulated other comprehensive loss Shares Amount Shares Amount Total March 31, 2022 173,106 $ 30,148 $ 129,925 7,855 $ ( 632,893 ) $ 2,975,681 $ ( 104,123 ) $ 2,398,738 Total comprehensive income — — — — — 364,575 3,846 368,421 Purchases of registered shares — — — 7,562 ( 418,346 ) — — ( 418,346 ) Sale of shares upon exercise of stock options and purchase rights — — ( 5,636 ) ( 686 ) 34,426 — — 28,790 Issuance of shares upon vesting of restricted stock units — — ( 68,710 ) ( 968 ) 39,547 — — ( 29,163 ) Share-based compensation — — 71,801 — — — — 71,801 Cash dividends ($ 1.00 per share) — — — — — ( 162,681 ) — ( 162,681 ) March 31, 2023 173,106 $ 30,148 $ 127,380 13,763 $ ( 977,266 ) $ 3,177,575 $ ( 100,277 ) $ 2,257,560 Total comprehensive income — — — — — 612,143 ( 10,925 ) 601,218 Purchases of registered shares — — — 7,100 ( 523,751 ) — — ( 523,751 ) Sale of shares upon exercise of stock options and purchase rights — — ( 28,314 ) ( 624 ) 60,511 — — 32,197 Issuance of shares upon vesting of restricted stock units — — ( 118,771 ) ( 994 ) 89,027 — — ( 29,744 ) Issuance of shares related to contingent consideration — — 102 ( 2 ) 143 — — 245 Share-based compensation — — 83,127 — — — — 83,127 Cash dividends ($ 1.19 per share) — — — — — ( 187,199 ) — ( 187,199 ) March 31, 2024 173,106 $ 30,148 $ 63,524 19,243 $ ( 1,351,336 ) $ 3,602,519 $ ( 111,202 ) $ 2,233,653 Total comprehensive income — — — — — 631,529 ( 35,750 ) 595,779 Purchases of registered shares — — — 6,679 ( 588,028 ) — — ( 588,028 ) Sale of shares upon exercise of stock options and purchase rights — — ( 10,588 ) ( 492 ) 52,927 ( 5,934 ) — 36,405 Issuance of shares upon vesting of restricted stock units — — ( 60,422 ) ( 833 ) 89,437 ( 61,500 ) — ( 32,485 ) Cancellation of treasury shares ( 4,112 ) ( 716 ) — ( 4,112 ) 332,088 ( 331,372 ) — — Share-based compensation — — 90,077 — — — — 90,077 Cash dividends ($ 1.37 per share) — — — — — ( 207,981 ) — ( 207,981 ) March 31, 2025 168,994 $ 29,432 $ 82,591 20,485 $ ( 1,464,912 ) $ 3,627,261 $ ( 146,952 ) $ 2,127,420 The accompanying notes are an integral part of these consolidated financial statements. Logitech International S.A. | Fiscal 2025 Form 10-K | 70 Table of Contents LOGITECH INTERNATIONAL S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1— The Company Logitech International S.A., together with its consolidated subsidiaries ("Logitech" or the "Company"), designs software-enabled hardware solutions that help businesses thrive and bring people together when working, creating, and gaming. As the point of connection between people and the digital world, the Company's mission is to extend human potential in work and play, in a way that is good for people and the planet. The Company sells its products to a broad range of international customers, including direct sales to retailers, e-tailers, businesses large and small 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. Note 2— Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Logitech and its subsidiaries. All intercompany balances and transactions have been eliminated. The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Fiscal Year The Company's fiscal year ends on March 31. Interim quarters are generally thirteen-week periods, each ending on a Friday. For purposes of presentation, the Company has indicated its quarterly periods end on the last day of the calendar quarter. Reference to Sales References to "sales" in the Notes to the consolidated financial statements means net sales, except as otherwise specified. 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 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, pension obligations, accruals for customer incentives, cooperative marketing, and pricing programs ("Customer 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 In 2025, the United States introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, with certain exemptions. The tariff policies in the U.S. and responsive policies enacted in other countries are evolving and may have a material adverse impact on the Company's business. In addition, the Company's business has continued to be impacted by ongoing macroeconomic and geopolitical conditions. These conditions include inflation, interest rate and foreign currency fluctuations, uncertainty in Logitech International S.A. | Fiscal 2025 Form 10-K | 71 Table of Contents consumer and enterprise demand, low economic growth in certain regions, changes in fiscal policies and geopolitical conflicts. The global and regional economic and political conditions, as well as changes in trade policies, have caused and may continue to cause volatility in demand for the Company's products as well as the cost of tariffs, materials and logistics, and transportation delays, and as a result have impacted and may continue to impact the pricing of the Company's products, product availability and the Company's results of operations. Currencies The functional currency of the Company's operations is primarily the U.S. Dollar. Certain operations use the Euro, Chinese Renminbi, Swiss Franc, or other local currencies as their functional currencies. The financial statements of the Company's subsidiaries whose functional currency is other than the U.S. Dollar are translated to U.S. Dollars using period-end rates of exchange for assets and liabilities and monthly average rates for sales, income and expenses. Cumulative translation gains and losses are included as a component of shareholders' equity in accumulated other comprehensive income (loss). Gains and losses arising from transactions denominated in currencies other than a subsidiary's functional currency are reported in other income (expense), net in the consolidated statements of operations. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the transaction price the Company expects to receive in exchange for those goods or services. Substantially all revenue recognized by the Company relates to the contracts with customers to sell products that allow people to connect through gaming, video, computing, music and other digital platforms. These products are hardware devices, which may include embedded software that function together, and are considered as one performance obligation. Hardware devices are generally plug and play, requiring no configuration and little or no installation. Revenue is recognized at a point in time when control of the products is transferred to the customer which generally occurs upon shipment. The Company’s sales contracts with its customers have a one year or shorter term. The Company also provides post-contract customer support (“PCS”) for certain products and related software, which includes unspecified software updates and upgrades, bug fixes and maintenance. The transaction price is allocated to two performance obligations in such contracts, based on a relative standalone selling price. The transaction price allocated to PCS is recognized as revenue on a straight-line basis, which reflects the pattern of delivery of PCS, over the estimated term of the support. The Company also recognizes revenue from subscription services that provide professional streamers with access to streaming software and tools as well as from Video Collaboration support services. These services represent stand-ready performance obligations. Payments for these services are made at the time of or in advance of delivering the services. The proceeds received in advance from such arrangements is recognized as deferred revenue and then recognized as revenue ratably over the service period up to five years . See Note 8 for the current and non-current deferred revenue associated with the Company’s remaining performance obligations to be recognized within the next 12 months and thereafter, respectively. The Company normally requires payment from customers within thirty to sixty days from the invoice date. However, terms may vary by customer type, by country and by selling season. The Company generally does not modify payment terms on existing receivables. The Company's contracts with customers do not include significant financing components as the period between the satisfaction of performance obligations and timing of payment are generally within one year. The transaction price received by the Company from sales to its distributors, retail companies ("retailers"), and authorized resellers is calculated as selling price net of variable consideration which may include product returns and the Company’s payments for Customer Programs related to current period product revenue. The estimated impact of these programs is recorded as a reduction of transaction price or as an operating expense if the Company receives a distinct good or service from the customer and can reasonably estimate the fair value of that good or service received. Customer Programs require management to estimate the percentage of those programs which will not be claimed in the current period or will not be earned by customers, which is commonly referred to as Logitech International S.A. | Fiscal 2025 Form 10-K | 72 Table of Contents "breakage." Breakage is estimated based on historical claim experience, the period in which customer claims are expected to be submitted, specific terms and conditions with customers and other factors. The Company accounts for breakage as part of variable consideration, subject to constraint, and records the estimated impact in the same period when revenue is recognized at the expected value. Assessing the period in which claims are expected to be submitted and the relevance of the historical claim experience require significant management judgment to estimate the breakage of Customer Programs in any accounting period. The Company enters into cooperative marketing arrangements with many of its customers and with certain indirect partners, allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar amount for various marketing and incentive programs. The objective of these arrangements is to encourage advertising and promotional events to increase sales of the Company's products. Customer incentive programs include consumer rebates and performance-based incentives. Consumer rebates are offered to the Company's customers and indirect partners at the Company's discretion for the primary benefit of end-users. In addition, the Company offers performance-based incentives to many of its customers and indirect partners based on predetermined performance criteria. At management's discretion, the Company also offers special pricing discounts to certain customers. Special pricing discounts are usually offered only for limited time periods or for sales of selected products to specific indirect partners. Cooperative marketing arrangements and customer incentive programs are considered variable consideration, which the Company estimates and records as a reduction to revenue at the time of sale based on negotiated terms, historical experiences, forecasted incentives, anticipated volume of future purchases, and inventory levels in the channel. The Company has agreements with certain customers that contain terms allowing price protection credits to be issued in the event of a subsequent price reduction. Management's decision to make price reductions is influenced by product life cycle stage, market acceptance of products, the competitive environment, new product introductions and other factors. Accruals for estimated expected future pricing actions and Customer Programs are recognized at the time of sale based on analyses of historical pricing actions by customer and by product, inventories owned by and located at customers, current customer demand, current operating conditions, and other relevant customer and product information, such as stage of product life-cycle. Product return rights vary by customer. Estimates of expected future product returns qualify as variable consideration and are recorded as a reduction of the transaction price of the contract at the time of sale based on an analyses of historical return trends by customer and by product, inventories owned by and located at customers, current customer demand, current operating conditions, and other relevant customer and product information. The Company assesses the estimated asset for recovery value for impairment and adjusts the value of the asset for any impairment. Return trends are influenced by product life cycle status, new product introductions, market acceptance of products, sales levels, product sell-through, the type of customer, seasonality, product quality issues, competitive pressures, operational policies and procedures, and other factors. Return rates can fluctuate over time but are sufficiently predictable to allow the Company to estimate expected future product returns. Typically, variable consideration does not need to be constrained as estimates are based on predictive historical data or future commitments that are planned and controlled by the Company. However, the Company continues to assess variable consideration estimates such that it is probable that a significant reversal of revenue will not occur. The Company regularly evaluates the adequacy of its estimates for Customer Programs and product returns. Future market conditions and product transitions may require the Company to take action to change such programs and related estimates. When the variables used to estimate these costs change, or if actual costs differ significantly from the estimates, the Company would be required to increase or reduce revenue or operating expenses to reflect the impact. During the year ended March 31, 2025, changes to these estimates related to performance obligations satisfied in prior periods were not material. Logitech International S.A. | Fiscal 2025 Form 10-K | 73 Table of Contents Sales taxes and value-added taxes (“VAT”) collected from customers, if applicable, which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets. Shipping and Handling Costs The Company's shipping and handling costs are included in the cost of goods sold in the consolidated statements of operations. Contract Balances The Company records accounts receivable from contracts with customers when it has an unconditional right to consideration, as accounts receivable, net, on the consolidated balance sheets. The Company records contract liabilities when cash payments are received or due in advance of performance, primarily for implied support and subscriptions. Contract liabilities are included in accrued and other current liabilities and other non-current liabilities on the consolidated balance sheets. Contract Costs The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that otherwise would have been recognized is one year or less. These costs are included in marketing and selling expenses in the consolidated statements of operations. As of March 31, 2025 and 2024, the Company did not have any material deferred contract costs. Research and Development Costs Costs related to research, design and development of products, which consist primarily of personnel, product design and infrastructure expenses, are charged to research and development expense as they are incurred. Advertising Costs Advertising costs are recorded as either a marketing and selling expense or a deduction from revenue as they are incurred. Advertising costs paid or reimbursed by the Company to direct or indirect customers must have an identifiable benefit and an estimable fair value in order to be classified as an operating expense. If these criteria are not met, the payment is classified as a reduction of revenue. Advertising costs recorded as marketing and selling expense are expensed as incurred. Total advertising costs including those characterized as revenue deductions during fiscal years 2025, 2024 and 2023 were $ 355.1 million, $ 325.3 million and $ 383.7 million, respectively, out of which $ 53.1 million, $ 46.6 million, and $ 67.3 million, respectively, were included as operating expense in the consolidated statements of operations. Cash Equivalents The Company classifies all highly liquid instruments purchased, such as bank demand deposits, short-term time deposits, and U.S. Treasury securities, with an original maturity of three months or less at the date of purchase, to be cash equivalents. Cash equivalents are carried at cost, which approximates their fair value. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents with various creditworthy financial institutions and has a policy to limit exposure with any one financial institution, but is exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured. The Company periodically assesses the credit risk associated with these financial institutions. The Company sells to large distributors, retailers, and e-tailers and, as a result, maintains individually significant receivable balances with such customers. The Company had the following customers that individually comprised 10% or more of its gross sales: Logitech International S.A. | Fiscal 2025 Form 10-K | 74 Table of Contents Years Ended March 31, 2025 2024 2023 Customer A 14 % 13 % 13 % Customer B 19 % 18 % 19 % Customer C 12 % 14 % 15 % The Company had the following customers that individually comprised 10% or more of its accounts receivable: March 31, 2025 2024 Customer A 14 % 14 % Customer B 21 % 20 % Customer C 10 % 15 % The Company manages its accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions. The Company generally does not require collateral from its customers. Allowances for Doubtful Accounts Allowances for doubtful accounts are maintained for expected credit losses resulting from the Company's customers' inability to make required payments. The allowances are based on the Company's regular assessment of various factors, including the credit-worthiness and financial condition of specific customers, historical experience with bad debts and customer deductions, receivables aging, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company's ability to collect from customers. Inventories Inventories are stated at the lower of cost and net realizable value. Costs are computed under the standard cost method, which approximates actual costs determined on the first-in, first-out basis. The Company records write-downs of inventories which are obsolete or in excess of anticipated demand or net realizable value based on a consideration of marketability and product life cycle stage, product development plans, component cost trends, historical sales and demand forecasts which consider the assumptions about future demand and market conditions. Inventory on hand which is not expected to be sold or utilized is considered excess, and the Company recognizes the write-down in cost of goods sold at the time of such determination. The write-down is determined by the excess of cost over net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the time of loss recognition, new cost basis per unit and lower-cost basis for that inventory are established and subsequent changes in facts and circumstances would not result in an increase in the cost basis. The Company recorded liabilities arising from firm, non-cancelable, and unhedged inventory purchase commitments in excess of anticipated demand or net realizable value consistent with its valuation of excess and obsolete inventory. Such liability is included in accrued and other current liabilities on the consolidated balance sheets. Property, Plant and Equipment Property, plant and equipment are stated at cost. Additions and improvements are capitalized, and maintenance and repairs are expensed as incurred. The Company capitalizes the cost of software developed for internal use in connection with major projects. Costs incurred during the preliminary project stage and post implementation stage are expensed, whereas direct costs incurred during the application development stage are capitalized. Depreciation expense is recognized using the straight-line method. Plant and buildings are depreciated over estimated useful lives of twenty-five years , equipment over useful lives from three to five years , internal-use software over useful lives from three to seven years , tooling over useful lives from six months to one year , and leasehold improvements over the lesser of the term of the lease or the estimated useful life of leasehold improvements. Logitech International S.A. | Fiscal 2025 Form 10-K | 75 Table of Contents When property and equipment is retired or otherwise disposed of, the cost and accumulated depreciation are relieved from the accounts and the net gain or loss is included in cost of goods sold or operating expenses, depending on the nature of the property and equipment. Leases The Company determines if an arrangement is a lease or contains a lease at contract inception. The Company determines if a lease is an operating or finance lease and recognizes right-of-use ("ROU") assets and lease liabilities upon lease commencement. Operating lease ROU assets are included in other assets , short-term lease liabilities are included in accrued and other current liabilities , and long-term lease liabilities are included in other non-current liabilities on the Company's consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For the Company's operating leases, the Company accounts for the lease component and related non-lease component as a single lease component. Lease expense is recognized on a straight-line basis over the lease term. For operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at lease commencement date. As most of the leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate as the discount rate for the leases. The Company's incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis, it uses its understanding of what its collateralized credit rating would be as an input to deriving an appropriate incremental borrowing rate. The operating lease ROU assets include prepaid lease payments and exclude lease incentives. Intangible Assets The Company's intangible assets include goodwill and intangible assets with finite lives, which primarily include acquired technology and customer contracts and related relationships. Intangible assets with finite lives are carried at cost and amortized using the straight-line method over their useful lives ranging from one to ten years . Impairment of Long-Lived Assets The Company reviews long-lived assets, such as property and equipment, and finite-lived intangible assets, for impairment whenever events indicate that the carrying amounts might not be recoverable. Recoverability of long-lived assets is measured by comparing the projected undiscounted net cash flows associated with those assets to their carrying values. If an asset is considered impaired, it is written down to its fair value, which is determined based on the asset's projected discounted cash flows or appraised value, depending on the nature of the asset. For purposes of recognition of impairment for assets held for use, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Impairment of Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. The Company conducts a goodwill impairment analysis annually at December 31 or more frequently if indicators of impairment exist or if a decision is made to sell or exit a business. Significant judgments are involved in determining if an indicator of impairment has occurred. Such indicators may include deterioration in general economic conditions, negative developments in equity and credit markets, adverse changes in the markets in which an entity operates, increases in input costs that have a negative effect on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. The fair value that could be realized in an actual transaction may differ from that used to evaluate the impairment of goodwill. In reviewing goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (greater than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. The ultimate outcome of the goodwill impairment review for a reporting unit should be the same whether the Company chooses to perform the qualitative assessment or proceeds directly to the quantitative impairment test. The Company operates as one reporting unit. For the year ended March 31, 2025, the Company elected to perform a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeds its carrying amount. Logitech International S.A. | Fiscal 2025 Form 10-K | 76 Table of Contents Income Taxes The Company provides for income taxes using the asset and liability method, which requires that deferred tax assets and liabilities be recognized for the expected future tax consequences of temporary differences resulting from differing treatment of items for tax and financial reporting purposes, and for operating losses and tax credit carryforwards. In estimating future tax consequences, expected future events are taken into consideration, with the exception of potential tax law or tax rate changes. The Company records a valuation allowance to reduce deferred tax assets to amounts management believes are more likely than not to be realized. The Company's assessment of uncertain tax positions requires that management makes estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company's estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have an impact on the Company's income tax provision and its results of operations. Fair Value of Financial Instruments The carrying value of certain of the Company's financial instruments, including cash equivalents, accounts receivable and accounts payable approximates their fair value due to their short maturities. The Company's investment securities portfolio consists of bank demand deposits, short-term time deposits, and U.S. Treasury securities with an original maturity of three months or less and marketable securities (money market and mutual funds) related to a deferred compensation plan. The Company's investments related to the deferred compensation plan are reported at fair value based on quoted market prices. The marketable securities related to the deferred compensation plan are classified as non-current investments, as they are intended to fund the deferred compensation plan's long-term liability. Participants in the deferred compensation plan may select the mutual funds in which their compensation deferrals are invested within the confines of the Rabbi Trust which holds the marketable securities. These securities are recorded at fair value based on quoted market prices. Earnings, gains and losses on deferred compensation investments are included in other income (expense), net in the consolidated statements of operations. The Company also holds certain non-marketable investments that are accounted for as equity method investments and included in other assets in the consolidated balance sheets. In addition, 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. The Company elected the measurement alternative to record these investments at cost and to adjust for impairments and observable price changes resulting from transactions with the same issuer within the statements of operations. Net Income per Share Basic net income per share is computed by dividing net income by the weighted average outstanding shares. Diluted net income per share is computed using the weighted average outstanding shares and dilutive share equivalents. Dilutive share equivalents consist of share-based awards, including stock options, purchase rights under employee share purchase plan, and restricted stock units. The dilutive effect of in-the-money share-based compensation awards is calculated based on the average share price for each fiscal period using the treasury stock method. Share-Based Compensation Expense Share-based compensation expense includes compensation expense for share-based awards granted based on the grant date fair value. The grant date fair value for stock options and stock purchase rights is estimated using the Black-Scholes-Merton option-pricing valuation model. The grant date fair value of service-based restricted stock units ("RSUs") is calculated based on the market price on the date of grant, reduced by estimated dividend yield prior to vesting. The grant date fair value of restricted stock units which vest upon meeting certain market- and performance-based conditions ("PSUs") is estimated using the Monte-Carlo simulation method including the effect of the market condition. Stock-based compensation expense is recognized ratably over the respective requisite service periods of the awards and forfeitures are accounted for when they occur. For PSUs, the Company recognizes compensation expense using its estimate of probable outcome at the end of the performance period Logitech International S.A. | Fiscal 2025 Form 10-K | 77 Table of Contents (i.e., the estimated performance against the performance targets). The Company periodically adjusts the cumulative stock-based compensation expense recorded when the probable outcome for the PSUs is updated based upon changes in actual and forecasted financial results. Product Warranty All of the Company's products are covered by standard warranty to be free from defects in material and workmanship for periods ranging from one year to three years . The warranty period varies by product and by region. The Company’s standard warranty does not provide a service beyond assuring that the product complies with agreed-upon specifications and is not sold separately. The standard warranty the Company provides qualifies as an assurance warranty and is not treated as a separate performance obligation. The Company estimates cost of product warranties at the time the related revenue is recognized based on historical warranty claim rates, historical costs, and knowledge of specific product failures that are outside of the Company's typical experience. The Company accrues a warranty liability for estimated costs to provide products, parts or services to repair or replace products in satisfaction of the warranty obligation. Each quarter, the Company re-evaluates its estimates to assess the adequacy of recorded warranty liabilities. When the Company experiences changes in warranty claim activity or costs associated with fulfilling those claims, the warranty liability is adjusted accordingly. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the total change in shareholders' equity during the period other than from transactions with shareholders. Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) is comprised of currency translation adjustments from those entities not using the U.S. Dollar as their functional currency, net deferred gains and losses and prior service costs and credits for defined benefit pension plans, and net deferred gains and losses on hedging activity. Treasury Shares The Company periodically repurchases shares in the market at fair value. Shares repurchased are recorded at cost as a reduction of total shareholders' equity. Treasury shares held may be reissued to satisfy the exercise of employee stock options and purchase rights, the vesting of restricted stock units, and acquisitions, or may be canceled with shareholder approval. Treasury shares that are reissued are accounted for using the first-in, first-out basis. When treasury shares are reissued, gains from re-issuance of treasury shares are credited to additional paid-in capital while losses from re-issuance of treasury shares are charged to additional paid-in capital to the extent that there are previously recorded gains to offset the losses, otherwise charged to retained earnings in the consolidated balance sheets. When treasury shares are canceled, the Company deducts the par value from registered shares and reflects the excess of share repurchase cost over par value as a reduction to retained earnings. Derivative Financial Instruments The Company enters into foreign exchange forward contracts to reduce the short-term effects of currency fluctuations on certain foreign currency receivables or payables and to hedge against exposure to changes in currency exchange rates related to its subsidiaries' forecasted inventory purchases. Gains or losses from changes in the fair value of forward contracts that offset transaction losses or gains on foreign currency receivables or payables are recognized immediately and included in other income (expense), net in the consolidated statements of operations. Gains and losses for changes in the fair value of the effective portion of the Company's forward contracts related to forecasted inventory purchases are deferred as a component of accumulated other comprehensive gain (loss) until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. 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. Restructuring Charges The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, and other costs. Liabilities for costs associated with a restructuring activity are measured at fair value and are recognized when the liability is incurred, as opposed to when management commits to a restructuring plan. One-time termination benefits are expensed at the date the entity notifies the employee, unless the employee must provide future service, in which case the benefits are Logitech International S.A. | Fiscal 2025 Form 10-K | 78 Table of Contents expensed ratably over the future service period. Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable. Other costs primarily consist of legal, consulting, and other costs related to employee terminations, and are expensed when incurred. Termination benefits are calculated based on regional benefit practices and local statutory requirements. Recent Accounting Pronouncements 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. The Company has adopted this standard for its fiscal year 2025 annual financial statements and interim financial statements thereafter and has applied the standard retrospectively to all prior periods presented in the financial statements. See Note 15 for further information. New Accounting Pronouncements Not Yet Adopted 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 period 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. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . ASU 2024-03 requires all public entities to disclose in the notes to the financial statements the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each expense caption of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. ASU 2024-03 can be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and related disclosures. Note 3— Net Income Per Share The following table summarizes the computations of basic and diluted net income per share for fiscal years 2025, 2024 and 2023 (in thousands except per share amounts): Years Ended March 31, 2025 2024 2023 Net income $ 631,529 $ 612,143 $ 364,575 Shares used in net income per share computation: Weighted average shares outstanding - basic 151,322 156,776 162,302 Effect of potentially dilutive equivalent shares 1,462 1,395 1,402 Weighted average shares outstanding - diluted 152,784 158,171 163,704 Net income per share: Basic $ 4.17 $ 3.90 $ 2.25 Diluted $ 4.13 $ 3.87 $ 2.23 Logitech International S.A. | Fiscal 2025 Form 10-K | 79 Table of Contents Share equivalents attributable to outstanding stock options, restricted stock units and employee share purchase plans ("ESPP") totaling 0.7 million, 1.1 million, and 2.0 million shares during fiscal years 2025, 2024 and 2023, respectively, were excluded from the calculation of diluted net income per share because their effect would have been antidilutive. A small number of PSUs 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 4— Employee Stock-Based Compensation As of March 31, 2025, 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. Under the 1996 ESPP and 2006 ESPP plans, eligible employees may purchase shares at the lower of 85 % of the fair market value at the beginning or the end of each offering period, which is generally six months . Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period. An aggregate of 29.0 million shares were reserved for issuance under the 1996 and 2006 ESPP plans. As of March 31, 2025, a total o f 2.8 million sha res were available for new awards under these plans. The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, and restricted stock units. Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the satisfaction of performance and market vesting criteria. The 2006 Plan, as amended, has no expiration date. On June 29, 2022, the Board authorized 3.3 million additional shares for issuance under the 2006 Plan. An aggregate of 33.8 million shares were reserved for issuance under the 2006 Plan. As of March 31, 2025, a total of 7.2 million shares were available for new awards under this plan. Stock options granted to employees under the 2006 Plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant. Service-based restricted stock units ("RSUs") granted to employees under the 2006 Plan generally vest in four equal annual installments on the grant date anniversary. RSUs granted to non-executive board members under the 2006 Plan vest on the grant date anniversary, or earlier on the date of the next annual general meeting following the grant date if the non-executive board member is not re-elected as a director at the annual general meeting. Restricted stock units with certain market- and performance-based conditions ("PSUs") granted to employees under the 2006 Plan generally vest at the end of the three-year performance period upon meeting predetermined financial metrics over three years , with the number of shares to be received upon vesting determined based on constant currency revenue growth rate, adjusted operating income (loss) and the Company's total shareholder return ("TSR") relative to the performance of companies in the Russell 3000 Index over the same three years period. The following table summarizes share-based compensation expense and total income tax benefit recognized for fiscal years 2025, 2024 and 2023 (in thousands): Years Ended March 31, 2025 2024 2023 Cost of goods sold $ 10,021 $ 8,004 $ 5,635 Marketing and selling 40,378 35,780 34,707 Research and development 20,180 17,836 15,292 General and administrative 19,334 21,269 15,148 Total share-based compensation expense 89,913 82,889 70,782 Income tax benefit ( 20,148 ) ( 15,305 ) ( 9,750 ) Total share-based compensation expense, net of income tax benefit $ 69,765 $ 67,584 $ 61,032 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. Logitech International S.A. | Fiscal 2025 Form 10-K | 80 Table of Contents Share-based compensation costs capitalized as part of inventory were $ 7.6 million, $ 6.3 million, and $ 5.6 million for the fiscal year ended March 31, 2025, 2024 and 2023, respectively. As of March 31, 2025, there was $ 129.5 million of total future stock-based compensation cost to be recognized over a weighted-average period of 2.3 years. The estimates of share-based compensation expense require a number of complex and subjective assumptions including stock price volatility, employee exercise patterns, probability of achievement of the set performance condition, dividend yield, related tax effects and the selection of an appropriate fair value model. The grant date fair value of the ESPP using the Black-Scholes-Merton option-pricing valuation model and the grant date fair value of the PSUs using the Monte-Carlo simulation method are determined with the following assumptions: Employee Stock Purchase Plans Years Ended March 31, 2025 2024 2023 Expected dividend rate 1.35 % 1.61 % 1.78 % Risk-free interest rate 4.71 % 5.36 % 3.86 % Expected volatility 29 % 33 % 46 % Expected term (years) 0.5 0.5 0.5 Weighted average grant date fair value per share $ 21.74 $ 19.02 $ 16.32 PSUs Years Ended March 31, 2025 2024 2023 Expected dividend rate 1.41 % 1.90 % 1.46 % Risk-free interest rate 4.55 % 3.83 % 2.78 % Expected volatility 38 % 41 % 39 % Expected term (years) 3.0 3.0 3.0 The expected dividend rate assumption is based on the Company's history and future expectations of dividend payouts. Unvested PSUs are not eligible for these dividends. The expected term is based on the purchase offerings periods expected to remain outstanding for employee stock purchase plan or the performance period for PSUs. Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the Russell 3000 Index for PSUs, over the expected term. The Company considers the historical price volatility of its shares as most representative of future volatility. The risk-free interest rate assumptions are based upon the implied yield of U.S. Treasury zero-coupon issues or Switzerland government bonds appropriate for the expected term of the Company's share-based awards. For PSUs, the Company estimates the probability and timing of the achievement of the set performance condition at the time of the grant based on the historical financial performance and the financial forecast in the remaining performance period and reassesses the probability in subsequent periods when actual results or new information become available. Logitech International S.A. | Fiscal 2025 Form 10-K | 81 Table of Contents A summary of the Company's stock option activities under all stock plans for fiscal years 2025, 2024 and 2023 is as follows: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (Years) (In thousands) Outstanding, March 31, 2022 1,393 Exercised ( 155 ) $ 6,482 Forfeited ( 118 ) Outstanding, March 31, 2023 1,120 Exercised ( 181 ) $ 6,160 Forfeited ( 176 ) Outstanding, March 31, 2024 763 $ 68 7.0 $ 16,243 Exercised ( 111 ) $ 80 $ 1,483 Forfeited ( 65 ) $ 80 Outstanding, March 31, 2025 587 $ 64 5.3 $ 11,768 Vested and exercisable, March 31, 2025 587 $ 64 5.3 $ 11,768 A summary of the Company's RSU and PSU activities for fiscal years 2025, 2024 and 2023 is as follows: Number of Shares Weighted-Average Grant Date Fair Value Aggregate Fair Value (In thousands) (In thousands) Outstanding, March 31, 2022 3,046 $ 68 Granted—RSUs 1,584 $ 53 Granted—PSUs 407 $ 69 Vested ( 1,143 ) $ 85,152 Forfeited ( 438 ) Outstanding, March 31, 2023 3,456 $ 66 Granted—RSUs 1,396 $ 59 Granted—PSUs 457 $ 67 Vested ( 1,200 ) $ 92,340 Forfeited ( 631 ) Outstanding, March 31, 2024 3,478 $ 65 Granted—RSUs 931 $ 93 Granted—PSUs 281 $ 91 Vested ( 1,172 ) $ 65 $ 113,553 Forfeited ( 462 ) $ 85 Outstanding, March 31, 2025 3,056 $ 73 The shares outstanding as of March 31, 2025 above include 0.7 million shares of PSUs. The Company presents the number of PSUs and weighted-average grant date fair value at 100 percent of the performance target; however, the aggregate fair value of shares vested is based on the actual number of PSUs vested according to achievement of the financial metrics over the performance period. Note 5— Employee Benefit Plans Defined Benefit Plans Certain subsidiaries of the Company sponsor defined benefit pension plans or non-retirement post-employment benefits covering substantially all of their employees. Benefits are provided based on employees' years Logitech International S.A. | Fiscal 2025 Form 10-K | 82 Table of Contents 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 Company recognizes the overfunded or underfunded status of defined benefit pension plans and non-retirement post-employment benefit obligations as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status of defined benefit pension plans in the year in which the changes occur through accumulated other comprehensive income (loss), which is a component of shareholders' equity. Each plan's assets and benefit obligations are generally remeasured as of March 31 each year. The net periodic benefit cost of the defined benefit pension plans and the non-retirement post-employment benefit obligations for fiscal years 2025, 2024 and 2023 was as follows (in thousands): Years Ended March 31, 2025 2024 2023 Service costs $ 11,875 $ 11,479 $ 13,195 Interest costs 3,298 3,844 2,408 Expected return on plan assets ( 7,671 ) ( 6,950 ) ( 3,754 ) Amortization: Net prior service cost (credit) recognized 309 ( 500 ) ( 458 ) Net actuarial loss (gain) recognized 450 ( 179 ) ( 3,047 ) Curtailment gain — — ( 4,225 ) Settlement loss (gain) — 922 ( 339 ) Total net periodic benefit cost $ 8,261 $ 8,616 $ 3,780 The components of net periodic benefit cost other than the service costs component are included in other income (expense), net in the consolidated statements of operations. The changes in projected benefit obligations for fiscal years 2025 and 2024 were as follows (in thousands): Years Ended March 31, 2025 2024 Projected benefit obligations, beginning of the year $ 213,477 $ 195,336 Service costs 11,875 11,479 Interest costs 3,298 3,844 Plan participant contributions 6,676 6,731 Actuarial loss 13,691 13,737 Benefits paid ( 10,578 ) ( 2,405 ) Transfer of prior vested benefits 15,301 6,775 Plan amendments 909 380 Settlement — ( 22,522 ) Administrative expense paid ( 157 ) ( 158 ) Currency exchange rate changes 4,649 280 Projected benefit obligations, end of the year $ 259,141 $ 213,477 The accumulated benefit obligation for all defined benefit pension plans as of March 31, 2025 and 2024 was $ 227.7 million and $ 184.8 million, respectively. Actuarial loss related to the change in the benefit obligation for the Company's pension plans for fiscal years 2025 and 2024 w ere primarily due to changes in discount rate. Logitech International S.A. | Fiscal 2025 Form 10-K | 83 Table of Contents The changes in the fair value of plan assets for fiscal years 2025 and 2024 were as follows (in thousands): Years Ended March 31, 2025 2024 Fair value of plan assets, beginning of the year $ 170,640 $ 162,599 Actual return on plan assets 5,076 7,558 Employer contributions 10,351 10,888 Plan participant contributions 6,676 6,731 Benefits paid ( 10,578 ) ( 2,405 ) Transfer of prior vested benefits 15,301 6,775 Settlement — ( 22,522 ) Administrative expenses paid ( 157 ) ( 158 ) Currency exchange rate changes 4,150 1,174 Fair value of plan assets, end of the year $ 201,459 $ 170,640 The Company's investment objectives are to ensure that the assets of its defined benefit plans are invested to provide an optimal rate of investment return on the total investment portfolio, consistent with the assumption of a reasonable risk level, and to ensure that pension funds are available to meet the plans' benefit obligations as they become due. The Company believes that a well-diversified investment portfolio will result in the highest attainable investment return with an acceptable level of overall risk. Investment strategies and allocation decisions are also governed by applicable governmental regulatory agencies. The Company's investment strategy with respect to its largest defined benefit plan, which is available only to Swiss employees, is to invest per the following allocation: 33 % in equities, 28 % in bonds, 28 % in real estate, 4 % in cash and cash equivalents and the remaining in other investments. The Company can invest in real estate funds, commodity funds, and hedge funds depending upon economic conditions. The following tables present the fair value of the defined benefit pension plan assets by major categories and by levels within the fair value hierarchy as of March 31, 2025 and 2024 (in thousands): March 31, 2025 2024 Level 1 Level 2 Total Level 1 Level 2 Total Cash and cash equivalents $ 21,202 $ — $ 21,202 $ 14,375 $ — $ 14,375 Equity securities 60,867 — 60,867 54,534 — 54,534 Debt securities 50,178 — 50,178 42,153 — 42,153 Real estate funds 44,906 6,833 51,739 32,286 10,141 42,427 Hedge funds — 8,994 8,994 — 10,400 10,400 Other 8,005 474 8,479 6,335 416 6,751 Total fair value of plan assets $ 185,158 $ 16,301 $ 201,459 $ 149,683 $ 20,957 $ 170,640 The funded status of the plans was as follows (in thousands): Years Ended March 31, 2025 2024 Fair value of plan assets $ 201,459 $ 170,640 Less: projected benefit obligations 259,141 213,477 Underfunded status $ ( 57,682 ) $ ( 42,837 ) Logitech International S.A. | Fiscal 2025 Form 10-K | 84 Table of Contents Amounts recognized on the balance sheets for the plans were as follows (in thousands): March 31, 2025 2024 Current liabilities $ 1,728 $ 1,391 Non-current liabilities 55,954 41,446 Total liabilities $ 57,682 $ 42,837 Amounts recognized in accumulated other comprehensive income (loss) related to defined benefit pension plans were as follows (in thousands): March 31, 2025 2024 Net prior service credits $ 820 $ 1,385 Net actuarial loss ( 22,696 ) ( 6,445 ) Accumulated other comprehensive loss ( 21,876 ) ( 5,060 ) Deferred taxes ( 3,400 ) ( 3,335 ) Accumulated other comprehensive loss, net of tax $ ( 25,276 ) $ ( 8,395 ) The actuarial assumptions for the defined benefit plans were as follows: Years Ended March 31, 2025 2024 Benefit Obligations: Discount rate 1.20 %- 6.50 % 1.50 % - 7.00 % Estimated rate of compensation increase 2.00 % - 10.00 % 2.25 % - 10.00 % Cash balance interest credit rate 0.75 % - 1.75 % 0.50 % - 1.75 % Years Ended March 31, 2025 2024 2023 Net Periodic Costs: Discount rate 1.50 % - 7.00 % 1.50 % - 7.25 % 0.50 % - 6.75 % Estimated rate of compensation increase 2.25 % - 10.00 % 2.25 % - 10.00 % 2.00 % - 10.00 % Expected average rate of return on plan assets 1.00 % - 5.25 % 0.50 % - 4.50 % 1.00 % - 2.50 % Cash balance interest credit rate 0.50 % - 1.75 % 0.50 % - 1.75 % 0.00 % - 1.75 % The discount rate is estimated based on corporate bond yields or securities of similar quality in the respective country, with a duration approximating the period over which the benefit obligations are expected to be paid. The Company bases the compensation increase assumptions on historical experience and future expectations. The expected average rate of return for the Company's defined benefit pension plans represents the average rate of return expected to be earned on plan assets over the period that the benefit obligations are expected to be paid, based on government bond notes in the respective country, adjusted for corporate risk premiums as appropriate. Logitech International S.A. | Fiscal 2025 Form 10-K | 85 Table of Contents The following table reflects the benefit payments that the Company expects the plans to pay in the periods noted (in thousands): Years Ending March 31, 2026 $ 14,523 2027 16,691 2028 14,645 2029 14,802 2030 14,616 Next five fiscal years 77,365 Total expected benefit payments by the plan $ 152,642 The Company expects to contribute $ 8.0 million to its defined benefit pension plans during fiscal year 2026. Defined Contribution Plans Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory requirements for others. The charges to expense for these plans for fiscal years 2025, 2024 and 2023, were $ 13.7 million, $ 14.4 million and $ 14.4 million, respectively. Deferred Compensation Plan One of the Company's subsidiaries offers a deferred compensation plan that permits eligible employees to make 100 % vested salary and incentive compensation deferrals within established limits. The Company does not make contributions to the plan. The deferred compensation plan's assets consist of marketable securities and are included in other assets on the consolidated balance sheets. The marketable securities were recorded at a fair value of $ 29.0 million and $ 29.2 million as of March 31, 2025 and 2024, respectively, based on quoted market prices (see Note 9). The Company also had deferred compensation liability of $ 29.0 million and $ 29.2 million, which are included in other non-current liabilities on the consolidated balance sheets as of March 31, 2025 and 2024, respectively. Earnings, gains and losses on deferred compensation investments are included in other income (expense), net (see Note 6) and corresponding changes in deferred compensation liability are included in operating expenses and cost of goods sold in the consolidated statements of operations. Note 6— Other Income (Expense), Net Other income (expense), net, comprises the following (in thousands): Years Ended March 31, 2025 2024 2023 Investment gain (loss) related to the deferred compensation plan $ 2,131 $ 4,320 $ ( 1,961 ) Currency exchange loss, net ( 6,401 ) ( 8,770 ) ( 7,337 ) Loss on investments, net (1) ( 2,029 ) ( 14,674 ) ( 14,073 ) Non-service cost net pension income and other (2) 3,319 2,748 10,093 Other income (expense), net $ ( 2,980 ) $ ( 16,376 ) $ ( 13,278 ) (1) Includes unrealized gain (loss) from the change in fair value of investments, income (loss) on equity-method investments, and impairment of investments during the periods presented, as applicable (see Note 9). (2) Includes the components of net periodic benefit cost of defined benefit plans other than the service cost component (see Note 5). Logitech International S.A. | Fiscal 2025 Form 10-K | 86 Table of Contents Note 7— 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 income taxes is generated outside of Switzerland. Income from continuing operations before income taxes for fiscal years 2025, 2024 and 2023 is summarized as follows (in thousands): Years Ended March 31, 2025 2024 2023 Swiss $ 492,941 $ 502,291 $ 282,970 Non-Swiss 213,931 119,305 180,552 Income before taxes $ 706,872 $ 621,596 $ 463,522 The provision for income taxes is summarized as follows (in thousands): Years Ended March 31, 2025 2024 2023 Current: Swiss $ ( 14,673 ) $ 26,833 $ 19,405 Non-Swiss 33,473 25,044 48,829 Deferred: Swiss 45,283 ( 47,517 ) 26,629 Non-Swiss 11,260 5,093 4,085 Provision for income taxes $ 75,343 $ 9,453 $ 98,947 The difference between the provision for income taxes and the expected tax provision at the Swiss statutory income tax rate of 8.5 % is reconciled below (in thousands): Years Ended March 31, 2025 2024 2023 Expected tax provision at statutory income tax rates $ 60,084 $ 52,836 $ 39,399 Income taxes at different rates 68,212 47,595 38,467 Research and development tax credits ( 6,797 ) ( 9,738 ) ( 152 ) Swiss Tax Benefits — ( 50,051 ) — Executive compensation 980 407 749 Stock-based compensation ( 2,162 ) 4,019 5,736 Deferred tax effects from TRAF — ( 33,926 ) — Valuation allowance 1,000 4,780 908 Impairment — — 1,881 Restructuring credits ( 817 ) — ( 1,764 ) Unrecognized tax benefits/ Audit resolution and statute lapse ( 43,333 ) 11,535 13,284 FDII deduction ( 1,424 ) ( 18,675 ) — Other, net ( 400 ) 671 439 Provision for income taxes $ 75,343 $ 9,453 $ 98,947 Logitech International S.A. | Fiscal 2025 Form 10-K | 87 Table of Contents The effective income tax rate in 2025 includes the tax effect of audit resolutions and the expiration of statutes of limitation of uncertain tax positions totaling $ 53.3 million, offset by the increase to unrecognized tax benefits in 2025 of $ 10.0 million. The effective tax rate in 2024 includes the discrete tax benefits recognized in fiscal year 2024 for the benefit of future Swiss tax deductions, the remeasurement of the tax basis of goodwill under TRAF (as defined below), FDII (as defined below) incentive provided by the Tax Cuts and Jobs Act and remeasurement of our Swiss deferred tax assets due to a change in tax rate. On March 28, 2024, the Swiss canton of Vaud confirmed a future tax benefit to be recognized for ten years . This resulted in the Company recording an income tax benefit of $ 50.1 million during the fiscal year ended March 31, 2024, which will be utilized over a ten-year period. The canton of Vaud completed the legislative process to enact the Swiss Federal Act on Tax Reform and AHV Financing (“TRAF”) , a reform to better align the Swiss tax system to international tax standards on March 20, 2020 that took effect as of January 1, 2020. In March 2020, the Company increased the tax basis of goodwill, as a transition measure under TRAF, to be amortized over ten years beginning on January 1, 2020. During the fiscal year ended March 31, 2024, the Company remeasured the tax basis of goodwill under TRAF, which resulted in an income tax benefit of $ 25.1 million, net of assessment for uncertain tax positions. The remeasurement of the step-up will be amortized over the remaining ten-year amortization period. The Tax Cuts and Jobs Act enacted Section 250, which provides for a deduction with respect to Global Intangible Low-Taxed Income ("GILTI") and Foreign-Derived Intangible Income ("FDII") in the US. The application of this tax incentive is inherently complex. During the fiscal year ended March 31, 2024, the Company analyzed the applicability of FDII and determined that this tax incentive applies to fiscal years 2021, 2022 and 2023. As a result, the Company realized a tax benefit of $ 18.7 million related to FDII. The Company has also concluded that any GILTI tax since the enactment of Tax Cuts and Jobs Act is immaterial. 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 then 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 year ended March 31, 2024. The Base Erosion and Profit Shifting Project (the “BEPS Project”) undertaken by the Organization for Economic Co-operation and Development (the “OECD”) recommended changes to numerous long-standing tax principles, including a proposal to reallocate profits among tax jurisdictions in which companies do business (“Pillar One”) and establishing a minimum tax on global income (“Pillar Two”). For the year ended March 31, 2025, the Company assessed its exposure to the OECD Pillar Two global minimum tax rules. The Company has determined that, for the fiscal year 2025, certain jurisdictions in which it operates should qualify for the transitional Country-by-Country Reporting ("CbCR") safe harbor, as outlined in the OECD Administrative Guidance and enacted domestic legislation. The Company's CbCR has been prepared in accordance with the requirements for a Qualified CbCR, using qualified financial statements, and has been reviewed to ensure accuracy and completeness. Based on this data, the Company met safe harbor qualifications and therefore is not required to perform a detailed Pillar Two top-up tax calculation for the current reporting period. No Pillar Two top-up tax expense has been recognized in the year ended March 31, 2025. The OECD and participating countries continue to issue underlying rules and administrative guidance related to Pillar Two, and the Company continues to monitor the relevant developments. Logitech International S.A. | Fiscal 2025 Form 10-K | 88 Table of Contents Deferred income tax assets and liabilities consist of the following (in thousands): March 31, 2025 2024 Deferred tax assets: Tax attributes carryforward $ 43,536 $ 43,846 Future tax deduction from Swiss Tax Benefits 48,267 49,755 Accruals 72,114 77,302 Tax step-up of goodwill from TRAF 86,519 105,942 Share-based compensation 15,411 13,718 Gross deferred tax assets 265,847 290,563 Valuation allowance ( 36,537 ) ( 35,536 ) Deferred tax assets after valuation allowance 229,310 255,027 Deferred tax liabilities: Acquired intangible assets and other ( 27,788 ) ( 30,901 ) Deferred tax liabilities ( 27,788 ) ( 30,901 ) Deferred tax assets, net $ 201,522 $ 224,126 Management regularly assesses the ability to realize deferred tax assets recorded in the Company's entities based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. The Company had a valuation allowance against deferred tax assets of $ 36.5 million at March 31, 2025, compared to $ 35.5 million at March 31, 2024. The Company had a valuation allowance of $ 36.4 million as of March 31, 2025 against deferred tax assets in the state of California, an increase from $ 35.3 million as of March 31, 2024 from activities during the year. The Company determined that it is more likely than not that the Company would not generate sufficient taxable income in the future to utilize such deferred tax assets. As of March 31, 2025, the Company had net operating loss carryforwards in Switzerland for income tax purposes of $ 36.7 million which will begin to expire in fiscal year 2028. The Company had net operating loss and tax credit carryforwards in the United States for income tax purposes of $ 2.3 million and $ 76.0 million, respectively, as of March 31, 2025. The net operating loss carryforwards in the United States relate to acquisitions and, as a result, are limited in the amount that can be utilized in any one year and have no expiration. The tax credit carryforwards will begin to expire in fiscal year 2026. Swiss income taxes and non-Swiss withholding taxes associated with the repatriation of earnings or for other temporary differences related to investments in non-Swiss subsidiaries have not been provided for, as the Company intends to reinvest the earnings of such subsidiaries indefinitely. If these earnings were distributed to Switzerland in the form of dividends or otherwise, or if the shares of the relevant non-Swiss subsidiaries were sold or otherwise transferred, the Company may be subject to additional Swiss income taxes and non-Swiss withholding taxes. As of March 31, 2025, the cumulative amount of unremitted earnings of non-Swiss subsidiaries for which no income taxes have been provided is approximately $ 546.9 million. The amount of unrecognized deferred income tax liability related to these earnings is estimated to be approximately $ 18.4 million. The Company follows a two-step approach in recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. As of March 31, 2025 and 2024, the total amount of unrecognized tax benefits due to uncertain tax positions was $ 152.0 million and $ 192.7 million, respectively, all of which would affect the effective income tax rate if recognized. Logitech International S.A. | Fiscal 2025 Form 10-K | 89 Table of Contents As of March 31, 2025 and 2024, the Company had $ 88.5 million and $ 112.6 million, respectively, in non-current income taxes payable, including interest and penalties, related to the Company's income tax liability for uncertain tax positions. The aggregate changes in gross unrecognized tax benefits in fiscal years 2025, 2024 and 2023 were as follows (in thousands): March 31, 2022 $ 179,372 Lapse of statute of limitations ( 3,586 ) Increases in balances related to tax positions taken during the year 15,214 March 31, 2023 $ 191,000 Lapse of statute of limitations ( 3,863 ) Settlements with taxing authorities 41 Increases in balances related to tax positions taken during prior years 705 Increases in balances related to tax positions taken during the year $ 22,332 March 31, 2024 $ 210,215 Lapse of statute of limitations ( 25,075 ) Settlements with taxing authorities ( 32,314 ) Increases (decreases) in balances related to tax positions taken during prior years ( 3,055 ) Increases in balances related to tax positions taken during the year 2,213 March 31, 2025 $ 151,984 The Company recognizes interest and penalties related to unrecognized tax positions as income tax expense. The Company recognized $( 0.6 ) million and $ 1.7 million, in interest and penalties related to unrecognized tax positions in income tax expense during fiscal years 2025 and 2024, respectively. In 2025, the interest accrual was reduced in excess of the current year accrual build as a result of audit settlements and statute lapses. As of March 31, 2025 and 2024, the Company had $ 7.2 million, and $ 7.8 million, respectively, of accrued interest and penalties related to uncertain tax positions. The Company files Swiss and foreign tax returns. The Company received final tax assessments in Switzerland through fiscal year 2023. As a result of these audit settlements the Company released $ 31.8 million of previously recorded unrecognized tax benefits which was fully recognized as a reduction of income tax expense in the year ended March 31, 2025. In the United States, the federal and state tax agencies have the authority to examine periods prior to fiscal year 2021, to the extent allowed by law, but only to the extent tax attributes were generated, carried forward, and are being utilized in subsequent years. The statute of limitations in the United States otherwise lapsed for fiscal year 2021 in fiscal year 2025. The Company is under examination in several foreign tax jurisdictions. If the examinations are resolved unfavorably, there is a possibility they may have a negative impact on its results of operations. Although the Company has adequately provided for uncertain tax positions, the provisions on these positions may change as revised estimates are made or the underlying matters are settled or otherwise resolved. During the next 12 months, it is reasonably possible that the amount of unrecognized tax benefits could increase or decrease significantly due to changes in tax law in various jurisdictions, due to lapse in statute of limitations and other factors, it is not possible to provide a range of potential changes. Logitech International S.A. | Fiscal 2025 Form 10-K | 90 Table of Contents Note 8— Balance Sheet Components The following table presents the components of certain balance sheet asset amounts as of March 31, 2025 and 2024 (in thousands): March 31, 2025 2024 Accounts receivable, net: Accounts receivable $ 708,693 $ 744,836 Allowance for cooperative marketing arrangements ( 44,457 ) ( 41,634 ) Allowance for customer incentive programs ( 66,564 ) ( 60,027 ) Allowance for pricing programs ( 105,876 ) ( 91,280 ) Other allowances ( 37,250 ) ( 10,180 ) $ 454,546 $ 541,715 Inventories: Raw materials $ 48,699 $ 65,209 Finished goods 455,048 357,304 $ 503,747 $ 422,513 Other current assets: VAT receivables $ 46,332 $ 41,172 Prepaid expenses and other assets 84,879 105,098 $ 131,211 $ 146,270 Property, plant and equipment, net: Plant, buildings and improvements $ 88,041 $ 84,189 Equipment and tooling 324,007 296,857 Computer equipment 26,881 26,785 Software 95,829 86,161 534,758 493,992 Less: accumulated depreciation and amortization ( 429,889 ) ( 387,293 ) 104,869 106,699 Construction-in-process 6,337 7,180 Land 2,652 2,710 $ 113,858 $ 116,589 Other assets: Deferred tax assets $ 202,180 $ 224,831 Right-of-use assets 75,239 61,163 Investments for deferred compensation plan 29,006 29,174 Investments in privately held companies 27,980 28,662 Other assets 9,672 6,364 $ 344,077 $ 350,194 Logitech International S.A. | Fiscal 2025 Form 10-K | 91 Table of Contents The following table presents the components of certain balance sheet liability amounts as of March 31, 2025 and 2024 (in thousands): March 31, 2025 2024 Accrued and other current liabilities: Accrued personnel expenses $ 180,763 $ 145,473 Accrued customer marketing, pricing and incentive programs 173,401 170,371 Warranty liabilities 34,428 30,270 Income taxes payable 26,841 24,196 VAT payable 29,648 28,253 Accrued sales return liability 27,913 30,098 Deferred revenue (1) 25,798 19,262 Accrued loss for inventory purchase commitments 19,614 29,349 Operating lease liabilities 15,780 15,107 Other current liabilities 152,317 144,883 $ 686,503 $ 637,262 Other non-current liabilities: Operating lease liabilities $ 76,622 $ 61,920 Employee benefit plan obligations 57,338 42,707 Deferred revenue (1) 38,216 21,097 Obligation for deferred compensation plan 29,006 29,174 Warranty liabilities 14,756 14,384 Deferred tax liabilities 658 705 Other non-current liabilities 4,916 2,603 $ 221,512 $ 172,590 (1) Includes deferred revenue for post-contract customer support and other services. Note 9— 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. Logitech International S.A. | Fiscal 2025 Form 10-K | 92 Table of Contents 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): March 31, 2025 March 31, 2024 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets: Cash equivalents $ 852,467 $ — $ — $ 1,042,604 $ — $ — Investments for deferred compensation plan included in other assets: Cash $ 90 $ — $ — $ 312 $ — $ — Common stock 540 — — 573 — — Money market funds 7,359 — — 8,129 — — Mutual funds 21,017 — — 20,160 — — Total investments for deferred compensation plan $ 29,006 $ — $ — $ 29,174 $ — $ — Currency derivative assets included in other current assets $ — $ 90 $ — $ — $ 913 $ — Liabilities: Contingent consideration included in accrued and other current liabilities $ — $ — $ — $ — $ — $ 1,215 Currency derivative liabilities included in accrued and other current liabilities $ — $ 2,849 $ — $ — $ 573 $ — Investments for Deferred Compensation Plan The marketable securities for the Company's deferred compensation plan were recorded at a fair value of $ 29.0 million and $ 29.2 million as of March 31, 2025 and 2024, 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 fiscal years 2025, 2024 and 2023 were not material and were included in other income (expense), net (see Note 6) and corresponding changes in the deferred compensation liability were included in operating expenses and cost of goods sold, in the Company's 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 $ 18.0 million as of March 31, 2025 and 2024, respectively. Income (loss) related to equity method investments for fiscal years 2025, 2024 and 2023 was not material a nd is included in other income (expense), net in the Company's consolidated statements of operations (see Note 6). During 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 consolidated statement of operations for fiscal year 2023. There was no impairment of equity method investments during fiscal years 2025 and 2024. 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 value included in other assets was $ 8.8 million and $ 10.1 million as of March 31, 2025 and Logitech International S.A. | Fiscal 2025 Form 10-K | 93 Table of Contents 2024, respectively. During 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). The impairment charges related to these investments were not material during fiscal years 2025 and 2024. During 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 was 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 consolidated statement of operations for the fiscal year 2024. 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. See Note 2 for additional information about how the Company tests various asset classes for impairment. During fiscal year 2024, the Company recorded impairment charges of $ 3.5 million related to intangible as sets. There was no impairment of non-financial assets during fiscal years 2025 and 2023. Note 10— 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 consolidated balance sheets as of March 31, 2025 and 2024. See Note 9 for the fair values of the Company’s derivative instruments as of March 31, 2025 and 2024. 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 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 invento ry purch ases were $ 74.6 million and $ 90.5 million as of March 31, 2025 and 2024, respectively. The Company had $ 3.0 million of net loss related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2025, 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 fiscal years 2025, 2024 and 2023 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (in thousands): Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold 2025 2024 2023 2025 2024 2023 Cash flow hedges $ ( 703 ) $ 1,109 $ 2,625 $ ( 3,461 ) $ 3,964 $ ( 8,391 ) Logitech International S.A. | Fiscal 2025 Form 10-K | 94 Table of Contents 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. 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 consolidated statements of operations based on the changes in fair value. The notional amounts of these contracts outstanding as of March 31, 2025 and 2024 were $ 131.8 million and $ 79.4 million, respectively. 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 consolidated statements of cash flows. Note 11— 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, 2024 by performing a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting unit exceeded its carrying amount. There have bee n no trig gering events identified affecting the valuation of goodwill subsequent to the annual impairment test. The following table summarizes the activities in the Company's goodwill balance (in thousands): Years Ended March 31, 2025 2024 Beginning of the period $ 461,978 $ 454,610 Acquisitions — 8,156 Effects of foreign currency translation 1,252 ( 788 ) End of the period $ 463,230 $ 461,978 The Company's acquired intangible assets were as follows (in thousands): March 31, 2025 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks and trade names $ 32,390 $ ( 28,675 ) $ 3,715 $ 32,390 $ ( 25,739 ) $ 6,651 Developed technology 107,421 ( 96,464 ) 10,957 107,421 ( 86,855 ) 20,566 Customer contracts/relationships 69,087 ( 58,646 ) 10,441 69,087 ( 51,061 ) 18,026 Effects of foreign currency translation ( 620 ) 137 ( 483 ) ( 1,019 ) 379 ( 640 ) Total $ 208,278 $ ( 183,648 ) $ 24,630 $ 207,879 $ ( 163,276 ) $ 44,603 For fiscal years 2025, 2024 and 2023, amortization expense for intangible assets was $ 20.1 million, $ 21.7 million and $ 24.4 million, respectively. The Company expects that annual amortization expense for fiscal years 2026, 2027, 2028, 2029 and 2030 will be $ 12.8 million, $ 5.6 million, $ 4.1 million, $ 1.8 million and $ 0.3 million, respectively. Logitech International S.A. | Fiscal 2025 Form 10-K | 95 Table of Contents Note 12— Financing Arrangements On January 27, 2025, the Company entered into an unsecured revolving credit facility with a syndicate of banks (the "Credit Agreement"). The Credit Agreement provides a revolving line of credit of up to $ 750.0 million to the Company including the issuance of letters of credit of up to $ 100.0 million. The Credit Agreement terminates on January 27, 2030 unless extended in accordance with its terms. The Credit Agreement contains (1) an increase option allowing the Company to secure up to $ 250.0 million of additional commitments and (2) an extension option to extend the term by one-year which may be exercised no more than two times, subject to certain requirements. Loans under the Credit Agreement are available in U.S. Dollars, Euro, Sterling, Yen, Swiss Francs, Canadian Dollars, Australian Dollars and any other currency agreed to by each lender. Proceeds of loans made under the Credit Agreement may be used for general corporate purposes. The Credit Agreement contains a maximum net debt to adjusted EBITDA ratio, compliance with which is a condition to the Company's ability to borrow. Borrowings under the Credit Agreement will bear interest at a rate determined by reference to benchmark rates plus an applicable spread (ranging from 0 to 1.5 %) based on the Company's net leverage ratio or credit rating at the time of the borrowing. Undrawn balances available under the Credit Agreement are subject to commitment fees at the applicable rate determined by reference to the Company's net leverage ratio or credit rating. There has been no borrowing outstanding under the Credit Agreement as of March 31, 2025. In addition, the Company had several uncommitted, unsecured bank lines of credit and letters of credit aggregating to $ 172.2 million and $ 172.5 million as of March 31, 2025 and 2024, 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 cre dit as of March 31, 2025 and 2024. As of March 31, 2025 and 2024, the Company had outstanding bank guarantees of $ 12.1 million and $ 14.3 million, respectively . Note 13— Commitments and Contingencies Product Warranties Changes in the Company's warranty liabilities for fiscal years 2025 and 2024 were as follows (in thousands): Years Ended March 31, 2025 2024 Beginning of the period $ 44,654 $ 40,886 Provision 44,876 45,413 Settlements ( 40,316 ) ( 41,413 ) Effects of foreign currency translation ( 30 ) ( 232 ) End of the period $ 49,184 $ 44,654 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 March 31, 2025, 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. Logitech International S.A. | Fiscal 2025 Form 10-K | 96 Table of Contents 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, Contingencies, 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. Note 14— Shareholders' Equity Share Capital As of March 31, 2025, the Company's nominal share capital is CHF 42.2 million, consisting of 168,994,142 issued shares with a par value of CHF 0.25 each, of which 20,485,124 were held in treasury shares. The capital band under Swiss law allows a company's board of directors to adjust the company's share capital within a predefined range based on a general authority granted by the company's shareholders. At the 2023 Annual General Meeting ("AGM"), the Company's shareholders approved an amendment to the Company’s Articles of Incorporation to introduce a capital band provision authorizing the Board of Directors to adjust the Company's share capital, without additional shareholder approval, within a range of 155,795,958 registered shares to 190,417,282 registered shares for the five-year period ending on September 13, 2028. In addition, the Company has reserved conditional capital (1) up to 25,000,000 shares for potential issuance for the exercise of rights granted under the Company's employee equity incentive plans, and (2) up to 25,000,000 shares for issuance to cover any conversion rights under any potential future convertible bond issuance. In September 2024, the Company's Board of Directors approved the cancellation of 4.1 million treasury shares, which were repurchased in fiscal year 2024 for an aggregate cost of $ 332.1 million under the 2023 share repurchase program. The cancellation became effective in the third quarter of fiscal year 2025, and as a result both the number of registered shares issued and the number of treasury shares outstanding decreased by 4.1 million shares. Upon cancellation of these shares, the Company deducted the par value from registered shares and reflected the excess of share repurchase cost over par value as a reduction to retained earnings. Dividends Pursuant to Swiss corporate law, the payment of dividends is limited to certain amounts of unappropriated retained earnings (approximately CHF 812.0 million, or USD equivalent of $ 921.8 million as of March 31, 2025) and is subject to shareholder approval. In May 2025, the Board of Directors recommended that the Company pay cash dividends for fiscal year 2025 of CHF 1.26 per share (USD equivalent of approximately $ 1.43 per share, which would result in a gross aggregate dividend of approximately $ 212.4 million, based on the exchange rate and shares outstanding, net of treasury shares, on March 31, 2025). In September 2024, the Company paid gross cash dividends of CHF 1.16 (USD equivalent of $ 1.37 ) per common share, totaling $ 207.9 million on the Company's outstanding common shares. In September 2023, the Company paid cash dividends of CHF 1.06 (USD equivalent of $ 1.16 ) per common share, totaling $ 182.3 million on the Company’s outstanding common shares. In September 2022, the Company paid cash dividends of CHF 0.96 (USD equivalent of $ 0.98 ) per common share, totaling $ 158.7 million on the Company's outstanding common shares. Any future dividends will be subject to the approval of the Company's shareholders. Logitech International S.A. | Fiscal 2025 Form 10-K | 97 Table of Contents Legal Reserves Under Swiss corporate law, a minimum of 5 % of the Company's annual net income must be retained in a legal reserve until this legal reserve equals 20 % of the Company's issued and outstanding aggregate par value per share capital. These legal reserves represent an appropriation of retained earnings that are not available for distribution and totaled $ 10.9 million at March 31, 2025 (based on the exchange rate at March 31, 2025). 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 2021 and 2022, the Company's Board of Directors approved increases to the 2020 share repurchase program, to an aggregate amount of up to $ 1.5 billion. The 2020 share repurchase program expired on July 27, 2023. 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. As of March 31, 2025, $ 48.3 million was available for repurchase under the 2023 share repurchase program. In March 2025, the Company's Board of Directors approved an increase of $ 600.0 million to the 2023 share repurchase program, to an aggregate amount of $ 1.6 billion. The Swiss Takeover Board approved this increase in April 2025 and it became effective on April 2, 2025. The following table summarizes the Company's share repurchase activities for fiscal years 2025, 2024 and 2023 (in thousands): Years Ended March 31, 2025 2024 2023 2023 Share Repurchase Program: Number of shares repurchased (1) 6,679 4,459 — Aggregate cost of shares repurchased (1) (2) $ 588,028 $ 364,639 $ — 2020 Share Repurchase Program: Number of shares repurchased (3) — 2,641 7,562 Aggregate cost of shares repurchased $ — $ 159,112 $ 418,346 (1) In fiscal year 2025, all shares were repurchased for cancellation. In fiscal year 2024, 4.1 million shares in an aggregate cost of $ 332.1 million were repurchased for cancellation and the remaining shares were repurchased to support equity incentive plans. (2) Includes an aggregate cost of $ 18.7 million and $ 19.5 million, respectively, that was not yet paid as of March 31, 2025 and 2024. (3) Shares were repurchased to support equity incentive plans. 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 16.9 million registered shares as of March 31, 2025. 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. As of March 31, 2025, the Company had a total of 20.5 million shares held in treasury stock, which includes 6.7 million shares that have been Logitech International S.A. | Fiscal 2025 Form 10-K | 98 Table of Contents repurchased for cancellation and 13.8 million shares that have been purchased to support equity incentive plans or potential acquisitions. 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. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss were as follows (in thousands): Currency Translation Adjustment Defined Benefit Plans Deferred Hedging Gains (Losses) Total March 31, 2024 $ ( 103,947 ) $ ( 8,395 ) $ 1,140 $ ( 111,202 ) Other comprehensive income (loss) ( 14,705 ) ( 16,881 ) ( 4,164 ) ( 35,750 ) March 31, 2025 $ ( 118,652 ) $ ( 25,276 ) $ ( 3,024 ) $ ( 146,952 ) Note 15— Segment Information The Company manages its business activities on a consolidated basis and operates as a single operating segment: Peripherals. The operating segment encompasses the design, manufacturing and sales of peripherals for gaming, PCs, tablets, video conferencing, and other digital platforms. The Company's Chief Operating Decision Maker (the “CODM”) is the Chief Executive Officer. The CODM periodically reviews information such as sales and net income to make business decisions and evaluate performance. The CODM uses net income to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits into the Peripherals segment or into other parts of the entity, such as for acquisitions, share repurchase or to pay dividends. The CODM also monitors budget versus actual net income results. The following table presents segment revenue, gross profit, and net income for the periods presented: Years Ended March 31, 2025 2024 2023 Net sales $ 4,554,900 $ 4,298,467 $ 4,538,818 Less: Significant segment expenses Cost of goods sold (1) 2,572,724 2,501,414 2,800,803 Marketing and selling (1) 774,036 694,530 774,475 Research and development (1) 288,828 269,407 265,504 General and administrative (1) 144,680 133,787 109,504 Less: other segment items Share-based compensation expense 89,913 82,889 70,782 Amortization of intangible assets and acquisition-related costs 20,249 21,962 24,708 Interest income ( 54,997 ) ( 50,636 ) ( 18,331 ) Other (2) 12,595 23,518 47,851 Provision for income taxes 75,343 9,453 98,947 Net income $ 631,529 $ 612,143 $ 364,575 (1) The difference between the amounts included in the table above and the amounts included in the consolidated statements of operations is related to share-based compensation expense (see Note 4). (2) Includes restructuring charges, net, impairment of intangible assets, change in fair value of contingent consideration for business acquisition, and other income (expense), net, as applicable. Logitech International S.A. | Fiscal 2025 Form 10-K | 99 Table of Contents Sales by product category for fiscal years 2025, 2024 and 2023 were as follows (in thousands): Years Ended March 31, 2025 2024 2023 Gaming (1) $ 1,338,467 $ 1,231,063 $ 1,288,313 Keyboards & Combos 882,643 821,441 836,432 Pointing Devices 788,784 742,987 728,357 Video Collaboration 626,000 609,361 677,923 Webcams 315,520 325,225 378,688 Tablet Accessories 299,540 254,060 254,374 Headsets 179,710 168,478 176,576 Other (2) 124,236 145,852 198,155 Total Sales $ 4,554,900 $ 4,298,467 $ 4,538,818 (1) Gaming includes streaming services revenue generated by Streamlabs. (2) Other primarily consists of mobile speakers and PC speakers. Sales by geographic region (based on the customers' locations) for fiscal years 2025, 2024 and 2023 were as follows (in thousands): Years Ended March 31, 2025 2024 2023 Americas $ 1,973,374 $ 1,896,258 $ 1,930,908 EMEA 1,413,855 1,301,515 1,299,657 Asia Pacific 1,167,671 1,100,694 1,308,253 Total Sales $ 4,554,900 $ 4,298,467 $ 4,538,818 Revenue from sales to customers in the United States represented 35 %, 36 % and 35 % of sales in fiscal years 2025, 2024 and 2023, respectively. Revenue from sales to customers in Germany represented 12 %, 14 % and 14 % of sales in fiscal years 2025 , 2024 and 2023, respectively. Revenue from sales to customers in China represented 10 %, 10 % and 11 % of sales in fiscal years 2025, 2024 and 2023, respectively. No other country represented more than 10% of sales during these periods presented herein. Revenue from sales to customers in Switzerland, the Company's country of domicile, represented 3 %, 2 %, and 3 % of sale s for fiscal year 2025, 2024 and 2023, respectively. Property, plant and equipment, net (excluding software) and right-of-use assets by geographic region were as follows (in thousands): March 31, 2025 2024 Americas $ 61,521 $ 67,762 EMEA 47,874 30,819 Asia Pacific 60,710 58,901 Total $ 170,105 $ 157,482 Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were $ 60.0 million, $ 43.4 million and $ 14.5 million, respectively, as of March 31, 2025. Property, plant and equipment, net (excluding software) and right-of-use assets in the United States, China, and Ireland were $ 66.5 million, $ 41.2 million, and $ 16.2 million, respectively, as of March 31, 2024. Property, plant and equipment, net (excluding software) and right-of-use assets in Switzerland, the Company's country of domicile, were $ 24.1 million and $ 9.0 million as of March 31, 2025 and 2024, respectively. No other countries represented more than 10% of the Company's total consolidated property, plant and equipment, net (excluding software) and right-of-use assets as of March 31, 2025 or 2024. Logitech International S.A. | Fiscal 2025 Form 10-K | 100 Table of Contents Note 16— Restructuring During the second quarter of fiscal year 2023, the Company initiated a restructuring plan to realign its business group and engineering structure with its go-to-market strategy to more effectively compete within the enterprise market and to better serve end-users. During the fourth quarter of fiscal year 2023, the Company undertook further actions to remove organization layers as well as streamline its marketing organization to increase efficiency. These actions resulted in charges related to employee severance and other termination benefits as well as contract termination and other costs. These restructuring activities were substantially completed during fiscal year 2024. During the fourth quarter of fiscal year 2025, the Company initiated a restructuring plan to reorganize certain functions to enable increased productivity and efficiency. This plan resulted in charges related to employee severance and other termination benefits. The Company expects to substantially complete this restructuring within the next twelve months. The following table summarizes restructuring-related activities during fiscal years 2025, 2024 and 2023 (in thousands): Termination Benefits Contract Termination and Other Total Accrued restructuring liability at March 31, 2022 (1) $ 561 $ 896 $ 1,457 Charges, net 27,631 6,942 34,573 Cash payments ( 14,015 ) ( 2,481 ) ( 16,496 ) Accrued restructuring liability at March 31, 2023 (1) $ 14,177 $ 5,357 $ 19,534 Charges, net 6,011 ( 2,145 ) 3,866 Cash payments ( 18,375 ) ( 1,757 ) ( 20,132 ) Accrued restructuring liability at March 31, 2024 (1) $ 1,813 $ 1,455 $ 3,268 Charges, net 9,846 ( 231 ) 9,615 Cash payments ( 2,562 ) ( 241 ) ( 2,803 ) Accrued restructuring liability at March 31, 2025 (1) $ 9,097 $ 983 $ 10,080 (1) The accrual balances are included in accrued and other current liabilities on the Company’s consolidated balance sheets. Note 17 — Leases The Company is a lessee in various non-cancelable operating leases, primarily real estate facilities for office space. As of March 31, 2025, t he Company's lease arrangements are comprised of operating leases with various expiration dates through July 31, 2035 . The lease term for all of the Company’s leases includes the non-cancelable period of the lease. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the Company's determination of the duration of the lease arrangement. The Company's leases do not contain any material residual value guarantees. The total operating lease costs including short-term lease costs were $ 19.3 million, $ 19.5 million and $ 21.2 million for the years ended March 31, 2025, 2024, and 2023, respectively. Total variable lease costs were not material during the years ended March 31, 2025, 2024 and 2023. The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's consolidated statements of operations. Supplemental cash flow information related to operating leases (in thousands): Years Ended March 31, 2025 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities $ 16,847 $ 13,489 $ 16,565 ROU assets obtained in the exchange for operating lease liabilities $ 26,767 $ 8,593 $ 43,093 Logitech International S.A. | Fiscal 2025 Form 10-K | 101 Table of Contents Future lease payments included in the measurement of operating lease liabilities as of March 31, 2025 for the following five fiscal years and thereafter are as follows (in thousands): Years Ending March 31, 2026 $ 16,992 2027 15,775 2028 13,158 2029 12,591 2030 10,722 Thereafter 36,263 Total lease payments $ 105,501 Less: imputed interest ( 13,099 ) Present value of lease liabilities $ 92,402 Weighted-average lease terms and discount rates were as follows: Years Ended March 31, 2025 2024 Weighted-average remaining lease terms (in years) 7.6 7.5 Weighted-average discount rate 3.6 % 3.8 % Logitech International S.A. | Fiscal 2025 Form 10-K | 102 Table of Contents Schedule II LOGITECH INTERNATIONAL S.A. VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ended March 31, 2025, 2024 and 2023 (in thousands) The Company's Schedule II includes valuation and qualifying accounts related to allowances for doubtful accounts, sales returns, cooperative marketing arrangements, customer incentive programs, and pricing programs, for direct customers and tax valuation allowances. The Company also has sales incentive programs for indirect customers with whom it does not have a direct sales and receivable relationship. These programs are recorded as accrued liabilities and are not considered valuation or qualifying accounts. Balance at Beginning of Year Charged (Credited) to Statement of Operations (1) Claims and Adjustments Applied Against Allowances (1) Balance at End of Year Allowance for cooperative marketing arrangements: 2025 $ 41,634 $ 257,940 $ ( 255,117 ) $ 44,457 2024 $ 40,495 $ 232,837 $ ( 231,698 ) $ 41,634 2023 $ 56,372 $ 262,363 $ ( 278,240 ) $ 40,495 Allowance for customer incentive programs: 2025 $ 60,027 $ 337,039 $ ( 330,502 ) $ 66,564 2024 $ 71,645 $ 299,351 $ ( 310,969 ) $ 60,027 2023 $ 97,460 $ 329,666 $ ( 355,481 ) $ 71,645 Allowance for pricing programs: 2025 $ 91,280 $ 760,024 $ ( 745,428 ) $ 105,876 2024 $ 98,822 $ 707,954 $ ( 715,496 ) $ 91,280 2023 $ 120,797 $ 784,835 $ ( 806,810 ) $ 98,822 Other allowances: 2025 $ 10,180 $ 170,495 $ ( 143,425 ) $ 37,250 2024 $ 10,232 $ 141,909 $ ( 141,961 ) $ 10,180 2023 $ 14,533 $ 155,600 $ ( 159,901 ) $ 10,232 Tax valuation allowance: 2025 $ 35,536 $ 1,000 $ — $ 36,537 2024 $ 30,766 $ 4,770 $ — $ 35,536 2023 $ 29,858 $ 908 $ — $ 30,766 (1) The amounts for fiscal years 2024 and 2023 include immaterial impacts from the business acquisitions during the year. Logitech International S.A. | Fiscal 2025 Form 10-K | 103