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iRobot the maker of the Roomba vacuum cleaner, has issued a blunt assessment about its ability to continue operations in the year ahead.
On Wednesday the firm published its Q4 and full year financial results, and while it admitted that “2024 was a transformational year”, it also warned that “there can be no assurance that the new product launches will be successful due to potential factors, including, but not limited to consumer demand, competition, macroeconomic conditions, and tariff policies.”
And then it delivered the really bad news…“Given these uncertainties and the implication they may have on the Company’s financials, there is substantial doubt about the Company’s ability to continue as a going concern for a period of at least 12 months from the date of the issuance of its consolidated 2024 financial statements.”
Failed Amazon purchase
In January 2024 Amazon had abandoned its $1.4 billion purchase of iRobot in the face of opposition from EU regulators, as well as scrutiny from US regulators, concerned the merger could harm competition in the robot vacuum market.
Soon after that iRobot said it would cut about 31 percent of its workforce (i.e. 350 staff) in a cost-cutting drive.
Then in November 2024 a regulatory filing with the Securities and Exchange Commission (SEC) confirmed more job losses as part of its “ongoing restructuring” to help it with its “turnaround strategy”.
That filing stated that another 105 employees, or 16 percent of the workforce, would lose their jobs in the run up to the Christmas holiday period.
2024 financials
Now the latest financial results from iRobot reveal that in Q4 ending 28 December 2024, it posted a net loss of $77.1m, up from a net loss of $63.6m in the Q423. Quarterly revenues tumbled to $172m from $307m in 2023.
For the full year 2024 iRobot posted a smaller net loss of $145.5m, down from a net loss of $304.7m in 2023. But 2024 revenue fell to $682m from $890m in 2023.
“2024 was a transformational year for iRobot, marked by the continued and successful execution of our five-point iRobot Elevate turnaround strategy as we’ve meaningfully reduced operating losses, improved gross margins and optimised cash flow,” said Gary Cohen, iRobot CEO.
“Yesterday, we announced the largest product launch in iRobot’s history, better positioning iRobot as the leader in the category that we created,” Cohen added. “Importantly, this strong pipeline of breakthrough new products is expected to be margin-accretive compared to our legacy products and should begin to support year-over-year revenue growth in 2025.”
The company also said it has made notable progress strengthening its financial foundation over the past year.
Strategic review
Since implementing its operational restructuring plan in January 2024, iRobot said it has “significantly reduced its headcount by more than 50 percent, lowered and sharpened sales and marketing expense through centralisation and consolidation, and decreased inventory and cash outflows.”
As a continuation of the steps the company has taken to date, iRobot’s Board of Directors has also initiated a formal strategic review to evaluate a broad range of alternatives, including, but not limited to, refinancing the company’s debt and exploring a potential sale or strategic transaction.
As part of its continued efforts to further strengthen its liquidity and financial position, the Company has amended its existing term loan and is actively engaged in ongoing collaborative and constructive discussions with its primary lender as the Board continues its strategic review of alternatives for the business.
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 agreements or transactions.
