iRobot Reports Third-Quarter 2025 Financial Results

, /PRNewswire/ -- iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, today announced its financial results for the third quarter ended September 27, 2025. "Our third-quarter revenue fell well below our internal expectations due to continuing market headwinds, ongoing production delays, and unforeseen shipping disruptions," said Gary Cohen, iRobot CEO. "This shortfall increased cash usage and pressured profitability, as we were unable to fully leverage our fixed cost base." Third Quarter 2025 Financial Results ( in millions, except per share amounts and percentages) ‌‌‌‌‌‌‌‌‌‌‌‌ Q3 2025 Q3 2024 Revenue $145.8 $193.4 GAAP Gross Margin 31.0 % 32.2 % Non-GAAP Gross Margin 31.2 % 32.4 % GAAP Operating Expenses $62.9 $55.1 Non-GAAP Operating Expenses $55.4 $47.7 GAAP Operating (Loss) Income ($17.7) $7.3 Non-GAAP Operating (Loss) Income ($9.9) $15.1 GAAP Net Loss Per Share ($0.62) ($0.21) Non-GAAP Net (Loss) Income Per Share ($0.23) $0.03 Balance Sheet and Operational Highlights As of September 27, 2025, the Company's cash and cash equivalents totaled $24.8 million, compared with $40.6 million as of June 28, 2025. As of September 27, 2025, the Company had an additional $5.0 million in restricted cash, which was fully drawn on September 30, 2025. At this time, Company has no sources upon which it can draw for additional capital. As of September 27, 2025, the Company's inventory totaled $140.9 million, compared with $149.2 million in the third quarter of 2024. In the third quarter of 2025, revenue declined 33% in the U.S., declined 13% in EMEA and declined 9% in Japan over the prior-year period. Excluding the foreign currency impact, EMEA revenue declined 14% while Japan remained flat 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 74% of total robot sales in the third quarter of 2025 versus 79% from the same period last year. Strategic Review Process The Company refers investors to its Form 10-Q filed with the SEC on November 6, 2025 for details regarding its previously announced strategic review process. About iRobot iRobot 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 Company's profitability and near-term capital requirements, and the strategic review process. 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 new capital in the near term, 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 nine months ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenue $ 145,832 $ 193,435 $ 374,959 $ 509,811 Cost of revenue: Cost of product revenue 100,580 131,058 269,437 383,865 Restructuring and other - - 1,658 - Total cost of revenue 100,580 131,058 271,095 383,865 Gross profit 45,252 62,377 103,864 125,946 Operating expenses: Research and development 13,094 19,630 41,547 76,739 Selling and marketing 29,256 29,270 94,310 98,966 General and administrative 20,346 3,232 60,430 (33,552) Restructuring and other 81 1,922 7,287 24,298 Amortization of acquired intangible assets 146 1,066 427 1,405 Total operating expenses 62,923 55,120 204,001 167,856 Operating (loss) income (17,671) 7,257 (100,137) (41,910) Other expense, net (711) (12,548) (28,391) (24,583) Loss before income taxes (18,382) (5,291) (128,528) (66,493) Income tax expense 3,144 1,080 3,079 1,917 Net loss $ (21,526) $ (6,371) $ (131,607) $ (68,410) Net loss per share: Basic $ (0.62) $ (0.21) $ (3.97) $ (2.34) Diluted $ (0.62) $ (0.21) $ (3.97) $ (2.34) Number of shares used in per share calculations: Basic 34,866 30,348 33,128 29,276 Diluted 34,866 30,348 33,128 29,276 Stock-based compensation included in above figures: Cost of revenue $ 277 $ 387 $ 820 $ 1,486 Research and development 554 1,296 2,221 4,994 Selling and marketing 717 903 2,490 3,403 General and administrative 2,306 2,894 7,399 8,054 Total $ 3,854 $ 5,480 $ 12,930 $ 17,937 iRobot Corporation Condensed Consolidated Balance Sheets (unaudited, in thousands) September 27, 2025 December 28, 2024 Assets Cash and cash equivalents $ 24,828 $ 134,303 Restricted cash 5,000 1,259 Accounts receivable, net 56,813 49,865 Inventory 140,910 76,029 Other current assets 20,919 27,046 Total current assets 248,470 288,502 Property and equipment, net 9,850 15,835 Operating lease right-of-use assets 12,259 14,322 Deferred tax assets 10,162 9,817 Goodwill 182,450 167,288 Intangible assets, net 3,086 3,212 Other assets 15,296 17,161 Total assets $ 481,573 $ 516,137 Liabilities and stockholders' (deficit) equity Accounts payable $ 197,047 $ 106,367 Accrued expenses 70,606 100,597 Deferred revenue and customer advances 7,931 11,280 Term loan 205,292 - Total current liabilities 480,876 218,244 Term loan - 200,604 Operating lease liabilities 17,762 21,598 Other long-term liabilities 9,820 14,452 Total long-term liabilities 27,582 236,654 Total liabilities 508,458 454,898 Stockholders' (deficit) equity (26,885) 61,239 Total liabilities and stockholders' (deficit) equity $ 481,573 $ 516,137 iRobot Corporation Consolidated Statements of Cash Flows (unaudited, in thousands) For the nine months ended September 27, 2025 September 28, 2024 Cash flows from operating activities: Net loss $ (131,607) $ (68,410) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,919 16,912 Loss on equity investment 1,566 375 Stock-based compensation 12,930 17,937 Provision for inventory excess and obsolescence 1,340 11,800 Change in fair value of term loan (1,079) 13,515 Debt issuance costs associated with warrants issued 16,828 - Debt issuance costs expensed under fair value option - 529 Deferred income taxes, net 4,659 (651) Other 4,600 (6,318) Changes in operating assets and liabilities — (use) source Accounts receivable (4,814) (22,073) Inventory (66,663) (10,539) Other assets 5,815 15,598 Accounts payable 89,967 16,674 Accrued expenses and other liabilities (43,664) (15,825) Net cash used in operating activities (104,203) (30,476) Cash flows from investing activities: Additions of property and equipment - (118) Purchase of investments (14) (56) Sales and maturities of investments 594 - Net cash provided by (used in) investing activities 580 (174) Cash flows from financing activities: Income tax withholding payment associated with restricted stock vesting (371) (491) Proceeds from issuance of common stock, net of issuance costs - 19,359 Repayment of term loan (4,000) (34,947) Payment of debt issuance costs - (529) Net cash used in financing activities (4,371) (16,608) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,856 1,251 Net decrease in cash, cash equivalents and restricted cash (106,138) (46,007) Cash, cash equivalents and restricted cash, at beginning of period 137,951 187,887 Cash, cash equivalents and restricted cash, at end of period $ 31,813 $ 141,880 Cash, cash equivalents and restricted cash, at end of period: Cash and cash equivalents $ 24,828 $ 99,447 Restricted cash 5,000 41,082 Restricted cash, non-current (included in other assets) 1,985 1,351 Cash, cash equivalents and restricted cash, at end of period $ 31,813 $ 141,880 iRobot Corporation Supplemental Information (unaudited) For the three months ended For the nine months ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenue by Geographical Region * United States $ 70,772 $ 105,137 $ 168,653 $ 258,398 EMEA 39,733 45,902 105,933 130,884 Japan 25,138 27,718 76,511 83,254 Other 10,189 14,678 23,862 37,275 Total $ 145,832 $ 193,435 $ 374,959 $ 509,811 Robot Units Shipped * 2-in-1 498 445 1,263 908 Solo and other 57 287 218 854 Total 555 732 1,481 1,762 Revenue by Product Category ** 2-in-1 $ 124 $ 110 $ 289 $ 242 Solo and other 22 83 86 268 Total $ 146 $ 193 $ 375 $ 510 Average gross selling prices for robot units $ 330 $ 313 $ 311 $ 329 Headcount 492 661 * in thousands ** in millions Certain numbers may not total due to rounding iRobot Corporation Explanation 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 nine months ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 GAAP Revenue $ 145,832 $ 193,435 $ 374,959 $ 509,811 GAAP Gross Profit $ 45,252 $ 62,377 $ 103,864 $ 125,946 Stock-based compensation 277 387 820 1,486 Restructuring and other - - 1,658 - Non-GAAP Gross Profit $ 45,529 $ 62,764 $ 106,342 $ 127,432 GAAP Gross Margin 31.0 % 32.2 % 27.7 % 24.7 % Non-GAAP Gross Margin 31.2 % 32.4 % 28.4 % 25.0 % GAAP Operating Expenses $ 62,923 $ 55,120 $ 204,001 $ 167,856 Amortization of acquired intangible assets (146) (1,066) (427) (1,405) Stock-based compensation (3,577) (5,093) (12,110) (16,451) Net merger, acquisition and divestiture (expense) income (3,704) 656 (9,422) 74,813 Restructuring and other (81) (1,922) (7,287) (24,298) Non-GAAP Operating Expenses $ 55,415 $ 47,695 $ 174,755 $ 200,515 GAAP Operating Expenses as a % of GAAP Revenue 43.1 % 28.5 % 54.4 % 32.9 % Non-GAAP Operating Expenses as a % of Non-GAAP Revenue 38.0 % 24.7 % 46.6 % 39.3 % GAAP Operating (Loss) Income $ (17,671) $ 7,257 $ (100,137) $ (41,910) Amortization of acquired intangible assets 146 1,066 427 1,405 Stock-based compensation 3,854 5,480 12,930 17,937 Net merger, acquisition and divestiture expense (income) 3,704 (656) 9,422 (74,813) Restructuring and other 81 1,922 8,945 24,298 Non-GAAP Operating (Loss) Income $ (9,886) $ 15,069 $ (68,413) $ (73,083) GAAP Operating Margin (12.1) % 3.8 % (26.7) % (8.2) % Non-GAAP Operating Margin (6.8) % 7.8 % (18.2) % (14.3) % 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 nine months ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 GAAP Income Tax Expense $ 3,144 $ 1,080 $ 3,079 $ 1,917 Tax effect of non-GAAP adjustments 43 650 269 1,667 Other tax adjustments (2,854) (203) (2,063) (811) Non-GAAP Income Tax Expense $ 333 $ 1,527 $ 1,285 $ 2,773 GAAP Net Loss $ (21,526) $ (6,371) $ (131,607) $ (68,410) Amortization of acquired intangible assets 146 1,066 427 1,405 Stock-based compensation 3,854 5,480 12,930 17,937 Net merger, acquisition and divestiture expense (income) 3,704 (656) 9,422 (74,813) Restructuring and other 81 1,922 8,945 24,298 Loss on strategic investments 1,960 - 1,566 375 Debt issuance costs 944 52 19,580 529 Income tax effect 2,811 (447) 1,794 (856) Non-GAAP Net (Loss) Income $ (8,026) $ 1,046 $ (76,943) $ (99,535) GAAP Net Loss Per Diluted Share $ (0.62) $ (0.21) $ (3.97) $ (2.34) Amortization of acquired intangible assets - 0.03 0.01 0.05 Stock-based compensation 0.11 0.18 0.39 0.61 Net merger, acquisition and divestiture expense (income) 0.11 (0.02) 0.29 (2.55) Restructuring and other - 0.06 0.27 0.83 Loss on strategic investments 0.06 - 0.05 0.01 Debt issuance costs 0.03 - 0.59 0.02 Income tax effect 0.08 (0.01) 0.05 (0.03) Non-GAAP Net (Loss) Income Per Diluted Share $ (0.23) $ 0.03 $ (2.32) $ (3.40) Number of shares used in diluted per share calculation 34,866 30,551 33,128 29,276 Supplemental Information Days sales outstanding 36 48 GAAP Days in inventory 128 104 Non-GAAP Days in inventory(1) 128 104 (1) Non-GAAP Days in inventory is calculated as inventory divided by (Revenue minus Non-GAAP Gross Profit), multiplied by 91 days. SOURCE iRobot Corporation

iRobot Reports Third-Quarter 2025 Financial Results

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