Roomba manufacturer iRobot faces a major crisis due to a failed acquisition by Amazon for about 250 billion yen, warning that there are 'serious doubts' about its ability to continue business
iRobot, the manufacturer of the robot vacuum cleaner 'Roomba,' expressed 'significant doubts about the continuity of its business' and raised concerns about its future in its financial results for the fourth quarter (October to December) and full year 2024. Following the announcement, iRobot's stock price fell by as much as 42% to $3.63 per share, the largest intraday drop since the company went public.
iRobot Reports Fourth-Quarter and Full-Year 2024 Financial Results | iRobot Corporation
One-Time Amazon Takeover Target iRobot Signals Doubt Over Future - Bloomberg
https://www.bloomberg.com/news/articles/2025-03-12/once-amazon-takeover-target-irobot-signals-doubt-over-its-future
Roomba maker iRobot, once Amazon's takeover target, flags going concern risk | Reuters
https://www.reuters.com/technology/roomba-maker-irobot-once-amazons-takeover-target-flags-going-concern-risk-2025-03-12/
iRobot's fourth-quarter 2024 revenue was $172.04 million, down significantly from $307.54 million in the same period last year. GAAP gross margin was 9.5%, down 9.4 percentage points from the same period last year. Fourth-quarter operating loss was $61.04 million.
For the full year, revenues were down 24% year over year to $681.85 million, and gross margins were down 1.1 percentage points to 20.9%. Operating losses were down 62% year over year to $102.95 million, a narrowing deficit.
Since implementing its restructuring plan in January 2024, iRobot has reduced its workforce by more than 50%, reduced sales and marketing expenses through consolidation and integration, and reduced inventory and cash outflows. It also reports that it has achieved significant product cost reductions through strategic shifts in its R&D and supply chain models, and the use of co-design and contract manufacturing partnerships, while at the same time increasing innovation and improvements in product features, quality and software.
However, iRobot said in its annual report that there is 'significant doubt' about its ability to continue operations for at least the 12 months following the issuance date of its 2024 consolidated financial statements, given that there is no assurance of success in new product launches. In response, the company said its board of directors has initiated a formal strategic review to evaluate a range of alternatives, including a debt restructuring or sale of the company.
iRobot had signed a contract to sell itself to Amazon for about $1.7 billion in 2022. However, Amazon announced in 2024 that it had given up on acquiring iRobot after being criticized by European Commission regulators.
Amazon cancels iRobot acquisition, iRobot lays off 31% of employees & CEO resigns - GIGAZINE
According to Bloomberg, investment fund Carlyle Group provided a $200 million loan to cash-strapped iRobot in 2023. The loan was meant to support iRobot while regulators were reviewing its planned acquisition by Amazon, but the deal never materialized, so Carlyle Group still holds the debt.
In addition, iRobot stated in its annual report that it is 'reducing sales and marketing expenses, product research and manufacturing costs, and focusing on the widely known Roomba brand,' and announced a new model of Roomba on March 11, 2025.
iRobot Introduces Suite of Innovative ROOMBA® Floor Cleaning Robots - Mar 11, 2025
https://media.irobot.com/2025-03-11-iRobot-Introduces-Suite-of-Innovative-ROOMBA-R-Floor-Cleaning-Robots
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