Roomba robot manufacturer iRobot has serious doubts about its own future
The US manufacturer of household robots has slipped deep into the red. Although there are new products, the company is not convinced of their success.
Roomba Combo 405
(Image: iRobot)
Around a year after the failed takeover by Amazon, iRobot is facing an uncertain future. The US manufacturer of household robots has recently reported significantly lower revenues and continues to make losses despite massive staff cuts. iRobot itself is therefore expressing considerable doubts about continuing its own business this year. As a result, the company's share price plummeted, falling by over 40 percent in just a few hours.
Amazon had announced in August 2022 that it wanted to take over the manufacturer of Roomba household robots, including its debts. However, the EU Commission expressed strong reservations about the deal, as Amazon's dual role as a retailer and manufacturer could put other providers' products at a disadvantage on its platform. At the end of January 2024, Amazon called off the takeover of iRobot, probably due to EU concerns. The company itself officially justified the move with “inappropriate regulatory hurdles”.
iRobot warns of possible end before 2025
iRobot has now presented its business figures for the previous year and the Christmas quarter, but these have been overshadowed by the robot manufacturer's simultaneous warning that the company may not survive this year. While iRobot this week unveiled a range of new Roomba household robots that will go on sale next week, the manufacturer won't guarantee the success of the new products – “due to potential factors such as consumer demand, competition, macroeconomic conditions and customs policies”.
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Due to these uncertainties and the impact on the company's finances, iRobot now literally states: “There is substantial doubt about the company's ability to continue operations for a period of at least 12 months.” In light of this outlook, iRobot has initiated a formal “strategic review” of its own business and structures. iRobot did not provide a timeline for the completion of this review. For this reason, the company also refrained from providing a forecast for this year's business figures and at the same time canceled a planned conference call with investors and analysts.
Sales down sharply, losses continue
In the fourth quarter of 2024, iRobot's revenue fell by 44 percent year-on-year to 172 million US dollars, while the operating loss increased by 17 percent to 61 million dollars. The net loss grew by 21 percent to 77.1 million dollars. Last year as a whole hardly looked any better. In 2024, annual turnover fell by 23% to 681.8 million dollars compared to the previous year. Nevertheless, the operating loss was reduced by 61 percent to 103 million dollars and the net loss by 52 percent to 145.5 million dollars.
At the same time, iRobot has reduced the number of employees by around half over the past year to cut costs. iRobot had already taken out a loan of 200 million US dollars in 2023 to remain liquid. At the time, however, the lender had expected a takeover by Amazon. iRobot still owes this loan and has to pay regular fees. In 2024, this amounted to over half a million dollars.
Share price collapses
iRobot was founded in 1990 by three researchers from a computer science laboratory at the Massachusetts Institute of Technology (MIT) and has been listed on the stock exchange since 2003. The company is primarily known for its robotic vacuum cleaners called Roomba, but also offers mopping, lawn mowing and pool cleaning robots.
Following the announcement of the latest financial figures and the uncertain future, the company's share price plummeted from 6.60 to below 3.70 dollars in some cases. However, investors who were evidently willing to take risks have since pushed the share price back up to just over 4 dollars.
(fds)
