iRobot Reports Second-Quarter 2025 Financial Results

, /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the second quarter ended June 28, 2025. "Our second quarter performance fell short of our expectations, due to persistent market headwinds and delays in scaling production and sales of our new products," said Gary Cohen, iRobot CEO. "While we made meaningful progress on gross margin expansion, tightened control over operating expenses, and improved net losses, our cash position continued to decline as we supported new product launches -- posing ongoing challenges to liquidity and operational flexibility. Although early consumer response to our latest product launches has been encouraging, broader market pressures and financial constraints remain significant hurdles to improved performance. "As our Board of Directors continues its review of strategic alternatives for our business, we remain steadfast in executing our iRobot Elevate strategy and delivering the trusted products our customers value." Second Quarter 2025 Financial Results (in millions, except per share amounts and percentages) Q2 2025 Q2 2024 Revenue $127.6 $166.4 GAAP Gross Margin¹ 30.0 % 16.5 % Non-GAAP Gross Margin¹ 30.2 % 16.7 % GAAP Operating Expenses $75.0 $88.5 Non-GAAP Operating Expenses $65.5 $75.9 GAAP Operating Loss² ($36.7) ($61.1) Non-GAAP Operating Loss² ($27.0) ($48.2) GAAP Net Loss Per Share³ ($0.68) ($2.41) Non-GAAP Net Loss Per Share³ ($0.27) ($1.96) 1) In Q2 2024, GAAP and Non-GAAP gross margin were negatively impacted by an $18.4 million non-recurring charge related to the write-off of excess component inventory and the losses on non-cancelable purchase commitments as part of the transition to our new product development paradigm with our contract manufacturers (the "Manufacturing Transition Charge"), which reduced GAAP and non-GAAP gross margin by 11.1 percentage points. 2) In Q2 2024, GAAP and Non-GAAP operating loss were negatively impacted by the Manufacturing Transition Charge. 3) In Q2 2024, GAAP and Non-GAAP net loss per share were negatively impacted by the Manufacturing Transition Charge, which reduced GAAP and non-GAAP net loss per share by $0.63. Balance Sheet and Operational Highlights As of June 28, 2025, the Company's cash and cash equivalents totaled $40.6 million, compared with $69.9 million as of March 29, 2025. As of June 28, 2025, the Company had an additional $36.0 million of restricted cash set aside for future repayment of its term loan, subject to limited ability of the Company to utilize such amount at the discretion of the lenders for the purchase of inventory. As of June 28, 2025, the Company's inventory totaled $88.2 million, representing a 13% reduction from the second quarter of 2024. In the second quarter of 2025, revenue increased 6% in Japan, declined 33% in the U.S. and declined 17% in EMEA over the prior-year period. Excluding the unfavorable foreign currency impact, Japan revenue increased 7% and EMEA revenue declined 16% over the prior-year period. Revenue from mid-tier robots (with an MSRP between $300 and $499) and premium robots (with an MSRP of $500 or more) represented 73% of total robot sales in the second quarter of 2025 versus 76% from the same period last year. Marketing Highlights In July, iRobot introduced its most powerful and intelligent 2-in-1 robot to date, the Roomba® Max 705 Combo Robot + AutoWash™ Dock. Designed for the busiest homes, the Roomba Max 705 Combo delivers a deep, hands-free clean with 175 times more power-lifting suction*, AI-driven technology to avoid clutter left by kids and pets, and a first-of-its-kind roller mop cover that keeps carpets dry. For the 11th consecutive year, Roomba was a featured product in Amazon's Prime Day event, which was held July 8-11. iRobot was ranked #1, #2 and #3 for the bestselling robot vacuum cleaners during Prime Day. The Company's products received a record number of Prime Day related media mentions in outlets including: Good Morning America, Better Homes & Gardens, HuffPost, Rolling Stone, GQ, Forbes Vetted, Real Simple and more. In June, iRobot announced the debut of a multi-platform marketing campaign, its first since 2023. Beginning on June 16, television spots featuring the new tagline, "Roomba. Made for This," began airing in the U.S. on premium streaming services including Hulu, Amazon Prime Video, Peacock, Paramount+ and more.*Performance in spot-clean mode with full battery compared to Roomba® 600 series robots. Ongoing Strategic Review As previously announced, iRobot's Board of Directors is conducting a review of strategic alternatives, including, but not limited to, exploring a potential sale or strategic transaction, and refinancing the Company's debt. This review process is ongoing. The Board has not set a timetable for the conclusion of this review, and there can be no assurance that the exploration of strategic alternatives will result in any transactions or outcomes. The Company does not intend to disclose developments relating to this process until it determines that further disclosure is appropriate or necessary. The Company remains actively engaged in ongoing collaborative and constructive discussions with its primary lender while the Board continues its strategic review. On August 6, 2025, the Company further amended its existing term loan to extend the covenant waiver under the term loan to September 19, 2025. In light of the ongoing strategic review, the Company will not host an earnings conference call or webcast regarding its second quarter 2025 results and has suspended its practice of providing financial guidance. About iRobotiRobot is a global consumer robot company that designs and builds thoughtful robots and intelligent home innovations that make life better. iRobot introduced the first Roomba robot vacuum in 2002. Today, iRobot is a global enterprise that has sold millions of robots worldwide. iRobot's product portfolio features technologies and advanced concepts in cleaning, mapping and navigation. Working from this portfolio, iRobot engineers are building robots and smart home devices to help consumers make their homes easier to maintain and healthier places to live. For more information about iRobot, please visit www.irobot.com. Cautionary Statement Regarding Forward-Looking Statements This communication contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which relate to, among other things: the Board's review of strategic alternatives for the business; and the Company's business plans and strategies and the anticipated impact thereof. These forward-looking statements are based on the Company's current expectations, estimates and projections about its business and industry, all of which are subject to change. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "could," "seek," "see," "will," "may," "would," "might," "potentially," "estimate," "continue," "expect," "target," similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond the Company's control, and are not guarantees of future results. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the Company's ability to obtain capital when desired on favorable terms, if at all; (ii) the Company's ability to realize the benefits of its operational restructuring; (iii) the impact of various global conflicts on the Company's business and general economic conditions; (iv) the Company's ability to implement its business strategy; (v) the risk that disruptions from the Company's operational restructuring will harm its business, including current plans and operations; (vi) the ability of the Company to retain and hire skilled personnel; (vii) loss of any key employee; (viii) failure of the Company's primary contract manufacturer to meet the Company's requirements; (ix) legislative, regulatory and economic developments affecting the Company's business; (x) general economic and market developments and conditions; (xi) the evolving legal, regulatory and tax regimes under which the Company operates; (xii) potential business uncertainty, including changes to existing business relationships that could affect the Company's financial performance; (xiii) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities; (xiv) current supply chain challenges; (xv) the financial strength of the Company's customers and retailers; (xvi) the impact of any applicable tariffs on goods imported into the United States; (xvii) competition; (xviii) cybersecurity risks; (xix) failure to obtain additional waivers from the Company's lenders of the Company's obligation to comply with certain covenants under the Company's credit agreement; and (xx) the results and impact of the Board's strategic review of alternatives for the business, as well as the Company's response to any of the aforementioned factors. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption "Risk Factors" in the Company's most recent annual and quarterly reports filed with the SEC and any subsequent reports on Form 10-K, Form 10-Q or Form 8-K filed from time to time and available at www.sec.gov. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability and similar risks, any of which could have a material adverse effect on the Company's financial condition, results of operations, or liquidity. The forward-looking statements included herein are made only as of the date hereof. The Company does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. iRobot Corporation Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) For the three months ended For the six months ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Revenue $ 127,558 $ 166,361 $ 229,127 $ 316,375 Cost of revenue: Cost of product revenue 89,259 138,895 168,857 252,808 Restructuring and other - - 1,658 - Total cost of revenue 89,259 138,895 170,515 252,808 Gross profit 38,299 27,466 58,612 63,567 Operating expenses: Research and development 13,766 23,230 28,453 57,108 Selling and marketing 39,003 39,980 65,054 69,696 General and administrative 21,069 16,926 40,085 (36,785) Restructuring and other 1,032 8,230 7,206 22,377 Amortization of acquired intangible assets 145 168 280 339 Total operating expenses 75,015 88,534 141,078 112,735 Operating loss (36,716) (61,068) (82,466) (49,168) Other income (expense), net 13,385 (8,849) (27,680) (12,034) Loss before income taxes (23,331) (69,917) (110,146) (61,202) Income tax (benefit) expense (523) 729 (65) 837 Net loss $ (22,808) $ (70,646) $ (110,081) $ (62,039) Net loss per share: Basic $ (0.68) $ (2.41) $ (3.41) $ (2.16) Diluted $ (0.68) $ (2.41) $ (3.41) $ (2.16) Number of shares used in per share calculations: Basic 33,410 29,309 32,259 28,740 Diluted 33,410 29,309 32,259 28,740 Stock-based compensation included in above figures: Cost of revenue $ 197 $ 270 $ 543 $ 1,099 Research and development 757 802 1,668 3,699 Selling and marketing 808 1,163 1,772 2,500 General and administrative 2,001 2,275 5,093 5,160 Total $ 3,763 $ 4,510 $ 9,076 $ 12,458 iRobot Corporation Condensed Consolidated Balance Sheets (unaudited, in thousands) June 28, 2025 December 28, 2024 Assets Cash and cash equivalents $ 40,568 $ 134,303 Restricted cash 36,000 1,259 Accounts receivable, net 56,072 49,865 Inventory 88,236 76,029 Other current assets 23,903 27,046 Total current assets 244,779 288,502 Property and equipment, net 10,959 15,835 Operating lease right-of-use assets 12,995 14,322 Deferred tax assets 10,403 9,817 Goodwill 182,449 167,288 Intangible assets, net 3,274 3,212 Other assets 15,461 17,161 Total assets $ 480,320 $ 516,137 Liabilities and stockholders' (deficit) equity Accounts payable $ 166,785 $ 106,367 Accrued expenses 76,859 100,597 Deferred revenue and customer advances 9,773 11,280 Term loan 203,186 - Total current liabilities 456,603 218,244 Term loan - 200,604 Operating lease liabilities 19,069 21,598 Other long-term liabilities 12,340 14,452 Total long-term liabilities 31,409 236,654 Total liabilities 488,012 454,898 Stockholders' (deficit) equity (7,692) 61,239 Total liabilities and stockholders' (deficit)equity $ 480,320 $ 516,137 iRobot Corporation Consolidated Statements of Cash Flows (unaudited, in thousands) For the six months ended June 28, 2025 June 29, 2024 Cash flows from operating activities: Net loss $ (110,081) $ (62,039) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,385 11,116 (Gain) loss on equity investment (394) 375 Stock-based compensation 9,076 12,458 Provision for inventory excess and obsolescence 1,015 11,715 Change in fair value of term loan 2,687 4,746 Debt issuance costs expensed under fair value option 16,828 477 Deferred income taxes, net 292 (1,682) Other 3,112 (3,858) Changes in operating assets and liabilities — (use) source Accounts receivable (3,735) 9,240 Inventory (12,816) 35,848 Other assets 5,700 26,117 Accounts payable 59,428 (63,875) Accrued expenses and other liabilities (32,114) (871) Net cash used in operating activities (56,617) (20,233) Cash flows from investing activities: Additions of property and equipment - (118) Purchase of investments (14) (46) Net cash used in investing activities (14) (164) Cash flows from financing activities: Income tax withholding payment associated with restricted stock vesting (257) (463) Proceeds from issuance of common stock, net of issuance costs - 17,942 Repayment of term loan (4,000) (34,947) Payment of debt issuance costs - (477) Net cash used in financing activities (4,257) (17,945) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,914 853 Net decrease in cash, cash equivalents and restricted cash (58,974) (37,489) Cash, cash equivalents and restricted cash, at beginning of period 137,951 187,887 Cash, cash equivalents and restricted cash, at end of period $ 78,977 $ 150,398 Cash, cash equivalents and restricted cash, at end of period: Cash and cash equivalents $ 40,568 $ 108,513 Restricted cash 36,000 40,543 Restricted cash, non-current (included in other assets) 2,409 1,342 Cash, cash equivalents and restricted cash, at end of period $ 78,977 $ 150,398 iRobot Corporation Supplemental Information (unaudited) For the three months ended For the six months ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 Revenue by Geographical Region * United States $ 56,441 $ 84,364 $ 97,881 $ 153,260 EMEA 33,253 39,894 66,200 84,982 Japan 29,424 27,818 51,373 55,536 Other 8,440 14,285 13,673 22,597 Total $ 127,558 $ 166,361 $ 229,127 $ 316,375 Robot Units Shipped * 2-in-1 453 274 765 463 Solo and other 63 300 161 567 Total 516 574 926 1,030 Revenue by Product Category ** 2-in-1 $ 100 $ 76 $ 165 $ 132 Solo and other 28 90 64 184 Total $ 128 $ 166 $ 229 $ 316 Average gross selling prices for robot units $ 301 $ 330 $ 299 $ 337 Headcount 509 726 * in thousands ** in millions Certain numbers may not total due to rounding iRobot CorporationExplanation of Non-GAAP Measures In addition to disclosing financial results in accordance with U.S. GAAP, this earnings release contains references to the non-GAAP financial measures described below. We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures. Our non-GAAP financial measures reflect adjustments based on the following items. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated. Amortization of Acquired Intangible Assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships, and reacquired distribution rights acquired in connection with business combinations as well as any non-cash impairment charges associated with intangible assets in connection with our past acquisitions. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance. Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of professional fees associated with mergers, acquisitions and the review of strategic alternatives, including, but not limited to, exploring a potential sale or strategic transaction. During the first quarter of fiscal 2024, the adjustment included the one-time net termination fee received as a result of the termination of the iRobot-Amazon Merger. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance. Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies. Restructuring and Other: Restructuring charges are related to one-time actions associated with realigning resources, enhancing operational productivity and efficiency, or improving our cost structure in support of our strategy. Such actions are not reflective of ongoing operations and include costs primarily associated with severance and related costs, costs associated with early termination of contracts, charges related to paused work unrelated to our core business, costs associated with the Chief Executive Officer transition and other non-recurring costs directly associated with resource realignments tied to strategic initiatives or changes in business conditions. We exclude these items from our non-GAAP measures when evaluating our recent and prospective business performance as such items vary significantly based on the magnitude of the action and do not reflect anticipated future operating costs. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of our business. Gain/Loss on Strategic Investments: Gain/loss on strategic investments includes fair value adjustments, realized gains and losses on the sales of these investments and losses on the impairment of these investments. We exclude these items from our non-GAAP measures because we do not believe they correlate to the performance of our core business and may vary in size based on market conditions and events. We believe that the exclusion of these gains or losses provides investors with a supplemental view of our operational performance. Debt Issuance Costs: Debt issuance costs include various incremental fees paid to third parties and warrants issued in connection with the issuance or amendment of debt. Income Tax Adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We regularly assess the need to record valuation allowance based on the non-GAAP profitability and other factors. We also exclude certain tax items, including the impact from stock-based compensation windfalls/shortfalls, which are not reflective of income tax expense incurred as a result of current period earnings. We believe disclosure of the income tax provision before the effect of such tax items is important to permit investors' consistent earnings comparison between periods. iRobot Corporation Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals (in thousands, except per share amounts) (unaudited) For the three months ended For the six months ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 GAAP Revenue $ 127,558 $ 166,361 $ 229,127 $ 316,375 GAAP Gross Profit $ 38,299 $ 27,466 $ 58,612 $ 63,567 Stock-based compensation 197 270 543 1,099 Restructuring and other - - 1,658 - Non-GAAP Gross Profit $ 38,496 $ 27,736 $ 60,813 $ 64,666 GAAP Gross Margin 30.0 % 16.5 % 25.6 % 20.1 % Non-GAAP Gross Margin 30.2 % 16.7 % 26.5 % 20.4 % GAAP Operating Expenses $ 75,015 $ 88,534 $ 141,078 $ 112,735 Amortization of acquired intangible assets (145) (168) (280) (339) Stock-based compensation (3,566) (4,240) (8,533) (11,359) Net merger, acquisition and divestiture (expense) income (4,768) 43 (5,718) 74,159 Restructuring and other (1,032) (8,230) (7,206) (22,377) Non-GAAP Operating Expenses $ 65,504 $ 75,939 $ 119,341 $ 152,819 GAAP Operating Expenses as a % of GAAP Revenue 58.8 % 53.2 % 61.6 % 35.6 % Non-GAAP Operating Expenses as a % of Non-GAAP Revenue 51.4 % 45.6 % 52.1 % 48.3 % GAAP Operating Loss $ (36,716) $ (61,068) $ (82,466) $ (49,168) Amortization of acquired intangible assets 145 168 280 339 Stock-based compensation 3,763 4,510 9,076 12,458 Net merger, acquisition and divestiture expense (income) 4,768 (43) 5,718 (74,159) Restructuring and other 1,032 8,230 8,864 22,377 Non-GAAP Operating Loss $ (27,008) $ (48,203) $ (58,528) $ (88,153) GAAP Operating Margin (28.8) % (36.7) % (36.0) % (15.5) % Non-GAAP Operating Margin (21.2) % (29.0) % (25.5) % (27.9) % iRobot Corporation Supplemental Reconciliation of GAAP Actuals to Non-GAAP Actuals continued (in thousands, except per share amounts) (unaudited) For the three months ended For the six months ended June 28, 2025 June 29, 2024 June 28, 2025 June 29, 2024 GAAP Income Tax (Benefit) Expense $ (523) $ 729 $ (65) $ 837 Tax effect of non-GAAP adjustments 178 416 226 1,017 Other tax adjustments 922 (416) 791 (608) Non-GAAP Income Tax Expense $ 577 $ 729 $ 952 $ 1,246 GAAP Net Loss $ (22,808) $ (70,646) $ (110,081) $ (62,039) Amortization of acquired intangible assets 145 168 280 339 Stock-based compensation 3,763 4,510 9,076 12,458 Net merger, acquisition and divestiture expense (income) 4,768 (43) 5,718 (74,159) Restructuring and other 1,032 8,230 8,864 22,377 (Gain) loss on strategic investments (394) - (394) 375 Debt issuance costs 5,627 238 18,636 477 Income tax effect (1,100) - (1,017) (409) Non-GAAP Net Loss $ (8,967) $ (57,543) $ (68,918) $ (100,581) GAAP Net Loss Per Diluted Share $ (0.68) $ (2.41) $ (3.41) $ (2.16) Amortization of acquired intangible assets - 0.01 0.01 0.01 Stock-based compensation 0.11 0.15 0.28 0.43 Net merger, acquisition and divestiture expense (income) 0.14 - 0.17 (2.58) Restructuring and other 0.03 0.28 0.27 0.78 (Gain) loss on strategic investments (0.01) - (0.01) 0.01 Debt issuance costs 0.17 0.01 0.58 0.02 Income tax effect (0.03) - (0.03) (0.01) Non-GAAP Net Loss Per Diluted Share $ (0.27) $ (1.96) $ (2.14) $ (3.50) Number of shares used in diluted per share calculation 33,410 29,309 32,259 28,740 Supplemental Information Days sales outstanding 40 37 GAAP Days in inventory 90 67 Non-GAAP Days in inventory(1) 90 67 (1) Non-GAAP Days in inventory is calculated as inventory divided by (Revenue minus Non-GAAP Gross Profit), multiplied by 91 days. 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iRobot Reports Second-Quarter 2025 Financial Results

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