Floor vacuum disk creator iRobot Corp (NASDAQ: IRBT) (FRA: I8R) has been having a rough go ever since its proposed takeover by Amazon.com Inc (NASDAQ: AMZN) (FRA: AMZ) fell through last year.
The 35-year-old company is currently treading through rough waters and may end up having to declare bankruptcy. This household robotics operator has warned that it is running out of cash and options.
People have known about iRobot’s precarious financial position for several months, but it was put on display once again last week when Q3 results were released.
iRobot reported bringing in US$145.8 million in revenue — a 24.6 per cent year-over-year drop. This followed a disappointing second quarter. Additionally, the Roomba maker’s cash balance has declined by US$15.8 million since the end of Q2. iRobot currently only has cash and cash equivalents totalling US$24.8 million now.
“Our third-quarter revenue fell well below our internal expectations due to continuing market headwinds, ongoing production delays, and unforeseen shipping disruptions,” said CEO Gary Cohen. “This shortfall increased cash usage and pressured profitability, as we were unable to fully leverage our fixed cost base.”
iRobot has been trying to find a new buyer since the US$1.7-billion-dollar Amazon deal didn’t work out. The most recent to make an offer, an anonymous potential acquirer, proposed a price per share far below iRobot’s expectations. News of this failure, revealed in an SEC filing, sent stock down by over 10 per cent on the Nasdaq on Oct. 23.
In a Nov. 6 filing, iRobot also alarmingly stated that it “has no sources upon which it can draw for additional capital” and that its management team had substantial doubt about the company’s ability to persevere.
“If the company is unable to obtain new capital in the near term from the lenders or otherwise, it may be forced to significantly curtail or cease operations and would likely seek bankruptcy protection,” iRobot stated.
iRobot was forced to lay off 16 per cent of its workforce, a total of 105 employees, last fall. Since the beginning of 2024 the company has had to let~400 go.
The industry pioneer has been responsible for the distribution of more than 50 million Roomba vacuums throughout the globe since its inception.
However, other robotic ventures undertaken by iRobot have been largely unsuccessful. The company was forced to abandon its plan for releasing a wireless robotic lawnmower due to its current priority of survival and finding a buyer. iRobot has been working on the Terra lawnmower since 2015. Despite a decade of R&D, it is unlikely that it will ever be released.
A trio of roboticists from MIT founded iRobot in 1990. The company originally prioritized military robots before launching the first Roomba in 2002 and going public in 2005.
iRobot’s income after its founding was derived from military contracts with the Defense Advanced Research Projects Agency (DARPA) and the U.S. Army. The company provided the American government with robots used to detect and neutralize landmines and reconnaissance droids.
Read more: Roomba vacuum maker iRobot down 35% on missed revenue target, lay offs
Follow Rowan Dunne on LinkedIn
rowan@mugglehead.com
