Logitech International (LOGI) risk factors, FY2025 10-K

Risks Related to our Business

1. 01If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected
2. 02Logitech International S.A. | Fiscal 2025 Form 10-K | 16
3. 03If we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results and future growth could be adversely affected
4. 04We produce approximately 35% of our products at the facilities we own in China. The majority of our other production is performed by third-party contract manufacturers, including original design manufacturers in China, Vietnam, Thailand, Mexico, Malaysia, and Taiwan
5. 05those in the United States and Europe. Interpretation and enforcement of China’s laws and regulations continue to evolve, and we expect differences in interpretation and enforcement to continue in the foreseeable future
6. 06If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected
7. 07We use artificial intelligence (“AI”) in our business, and challenges relating to the development and use of AI, including generative AI, could result in competitive harm, reputational harm, and legal liability, and adversely affect our results of operations
8. 08statements relating to the use and development of AI. New laws and regulations, or existing laws and regulations, may be interpreted in ways that conflict with or otherwise impact our approach to AI and use of AI solutions
9. 09We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components
10. 10pressures from other partners and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of our products to consumers, our reputation and brand equity, or our market share
11. 11If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operating results could be adversely affected
12. 12If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected
13. 13Logitech International S.A. | Fiscal 2025 Form 10-K | 20
14. 14If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected
15. 15If our sales channel partners have excess inventory of our products or decide to decrease their inventories for any reason, they may decrease the number of products they acquire in subsequent periods, which could cause disruption in our business and adversely affect our forecasts and sales
16. 16Our business depends in part on access to third-party platforms or technologies, and if access thereto is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected
17. 17Logitech International S.A. | Fiscal 2025 Form 10-K | 21
18. 18If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or changed without notice to us, our business and operating results could be adversely affected
19. 19Our success depends on our ability to attract and retain highly skilled personnel, including senior leadership and international personnel. From time to time, we experience turnover in some of our senior leadership positions
20. 20As we focus on growth opportunities, we may divest or discontinue non-strategic product categories, or pursue strategic acquisitions and investments, which could have an adverse impact on our business
21. 21Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill, restructuring charges, inventory write downs or the recording of share-based compensation
22. 22As we continue our efforts to scale, lower our costs and improve our operational efficiency, we may not fully realize our goals
23. 23Product quality issues could adversely affect our reputation, business and operating results

Risks Related to Global Nature of our Operations and Regulatory Environment

1. 24Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition
2. 25We conduct operations internationally and as a result, adverse global and regional economic and geopolitical conditions have in the past and can in the future materially adversely affect our business, results of operations and financial condition
3. 26but not limited to inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to changes in interest rates, and lower consumer and enterprise spending
4. 27We conduct operations and have invested significantly in growing our sales and marketing activities in a number of countries, and the effect of business, legal and political risks associated with international operations could adversely affect us
5. 28Any of these risks could adversely affect our business, financial condition and operating results
6. 29Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations and financial condition
7. 30movements in currency exchange rates over the limited time the hedges are in place and do not protect us from long term shifts in currency exchange rates
8. 31We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures
9. 32As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations
10. 33Logitech International S.A. | Fiscal 2025 Form 10-K | 26
11. 34We maintain cash and cash equivalents at financial institutions and are exposed to credit risk in the event of default by such financial institutions

Risks Related to Confidential Information, Cybersecurity, Privacy and Intellectual Property

1. 35Losses or unauthorized access to or releases of confidential information could adversely affect our business and result in significant reputational, financial and legal consequences
2. 36The collection, storage, transmission, use and distribution of personal data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents
3. 37Logitech International S.A. | Fiscal 2025 Form 10-K | 28
4. 38Claims by others that we infringe their proprietary technology could adversely affect our business
5. 39We may be unable to protect our proprietary rights. Unauthorized use of our technology may result in the development of products that compete with our products

Risks Related to our Financial Results

1. 40Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares
2. 41Logitech International S.A. | Fiscal 2025 Form 10-K | 30
3. 42Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results
4. 43There are risks associated with any outstanding and future indebtedness
5. 44Logitech International S.A. | Fiscal 2025 Form 10-K | 31