iRobot, the maker of Roomba, fears it will go bankrupt in 2025. China wins
Shares of iRobot fell as much as 40% in early New York trading after the maker of robotic vacuum cleaners issued a going concern warning for the next 12 months following a negative fourth-quarter earnings report. End of business continuity means failure.
Let's start with fourth quarter earnings.
A disaster considering that just a few years ago iRobot had shares worth 120 dollars. iRobot posted wider-than-expected losses and revenue that missed average estimates tracked by Bloomberg Consensus.
Fourth quarter earnings snapshot courtesy of Bloomberg:
- Revenue $172.0 million, estimate $181 million (Bloomberg Consensus)
- Adjusted loss per share $2.06, estimate loss/shr $1.73
- Loss per share $2.52 * Average gross sales price $365
- Operating income 9.5%
- R&D expenses $16.5 million, estimate $19.5 million
- Sales and marketing expenses $39.9 million, estimate $44.8 million
- Adjusted gross margin 12.8%, estimate 20.7%
- Adjusted operating loss $44.8 million, estimated loss $37.4 million
iRobot reported a 44% revenue decline in the fourth quarter compared to the previous year…
Chinese manufacturers have flooded the U.S. market with cheaper versions of robotic vacuum cleaners, putting pressure on iRobot's sales in recent years. Irobot's sales peaked in Q4 2020, during the early days of the pandemic.
Bloomberg noted that iRobot canceled its fourth-quarter and full-year 2024 results conference call and webcast.
iRobot Roomba
Gary Cohen, CEO of iRobot, wrote in a statement:
iRobot has defined the floor care robot category for more than 30 years, and we remain committed to growing and evolving our business across smart home categories in a dynamic operating landscape. We will continue to take decisive actions to reclaim our industry-leading position and build iRobot's strong foundation centered on our iconic and globally recognized brand, Roomba.
Since 2024, iRobot has embarked on a restructuring plan that includes a significant reduction in staff by more than 50%, as well as changes in the supply chain and research and development.
The robot company was once Amazon's target for a $1 billion acquisition , but the deal fell through after a clash with European Union regulators.
What convinced the market was the business continuity…
As stated in iRobot's Annual Report on Form 10-K for the year ended December 28, 2024 (10-K), there is no guarantee that new product launches will be successful due to potential factors, including, but not limited to, consumer demand, competition, macroeconomic conditions and pricing policies.
In light of these uncertainties and the implications they may have on the Company's financial results, there is substantial doubt as to the Company's ability to continue as a going concern for a period of at least 12 months from the date of issuance of its 2024 consolidated financial statements. Additional information will be included in the 10-K that will be filed with the SEC.
So the company that created a hugely successful product risks going bankrupt, a victim of its own enormous success that has made the new sector too juicy for Chinese companies.
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The article iRobot, the maker of Roomba, fears it will go bankrupt in 2025. China wins comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/irobot-la-produttrice-di-roomba-teme-di-fallire-nel-2025-la-cina-vince/ on Thu, 13 Mar 2025 06:15:52 +0000.