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iRobot's Second-Quarter 2025 Financial Results

BEDFORD, Mass. – iRobot Corp. (NASDAQ: IRBT), a prominent player in the field of consumer robotics, disclosed its financial performance for the second quarter ending June 28, 2025, which sadly did not meet the company's expectations. The decline in performance is attributed to persisting market challenges and setbacks in the production and sales of their newest product launches.

CEO Gary Cohen highlighted the organization's ongoing journey toward enhancing gross margins and controlling operating expenses, but noted that these improvements came alongside a decline in cash reserves due to investments in new product launches. This has raised concerns about the company's liquidity and operational flexibility. Despite positive early reactions from consumers regarding new product introductions, iRobot continues to grapple with significant market pressures and financial restrictions that hamper overall performance enhancement.

Financial Overview

In Q2 2025, iRobot reported:

• - Revenue: $127.6 million, down from $166.4 million in Q2 2024.
• - GAAP Gross Margin: Rose to 30.0% from 16.5% the previous year.
• - GAAP Operating Expenses: Declined to $75.0 million from $88.5 million.
• - Operating Loss: Reduced to $36.7 million compared to $61.1 million for the same period last year.
• - Net Loss Per Share: Improved significantly to ($0.68) from ($2.41).

It's important to note the impacts of a non-recurring $18.4 million charge related to inventory write-offs and other costs incurred during the company's transition to new product development with contractual manufacturers, which affected prior year's margins substantially.

Cash Position and Inventory

As of June 28, 2025, the company's cash and cash equivalents had decreased to $40.6 million, a stark contrast to $69.9 million recorded at the end of March 2025. Restricted cash amounts to $36.0 million, earmarked for future debt repayments, which limits their liquidity for inventory purchases. Notably, iRobot's inventory climbed to $88.2 million, marking a 13% drop from the same quarter last year.

In terms of revenue distribution, iRobot faced variances across geographical regions with:

• - Japan: Revenue increased 6%, with a 7% rise when excluding foreign currency impacts.
• - United States: Revenue fell 33%.
• - EMEA (Europe, Middle East, Africa): Revenue decreased by 17%.

Overall, revenue from middle-tier and premium robots comprised 73% of total sales, down from 76% year-on-year.

Product Development and Marketing Efforts

July marked the launch of iRobot's most advanced robot, the Roomba® Max 705 Combo Robot coupled with the AutoWash™ Dock. This new model promises powerful cleaning capabilities catered to busy households, driven by AI technology to navigate around obstacles posed by children and pets. iRobot's marketing strategies also saw the Roomba line featured prominently during Amazon's Prime Day, maintaining its position as a leading brand in the robotic vacuum sector.

A fresh marketing campaign titled "Roomba. Made for This" debuted across various platforms, including major streaming services, aiming to resonate deeply with the consumer base.

Strategic Review and Future Outlook

Currently, iRobot's Board of Directors is conducting a thorough evaluation of potential strategic options, including the possibility of a sale or refinancing arrangements. There’s no established timeline for resolution, and communication regarding developments will be selective until further clarity is achieved.

On August 6, 2025, the company amended its term loan conditions, extending covenant waivers until mid-September, signaling ongoing negotiations with financial partners to safeguard business stability. Furthermore, due to this strategic review, iRobot announced it would not host an earnings conference call for this quarter.

Conclusion

iRobot continues to navigate a challenging landscape, focusing on improving product offerings and exploring strategic pathways. As competition heightens in the consumer robotics market, iRobot's commitment to executing its Elevate strategy remains crucial. The company must harness the positive consumer response to its innovative products while also addressing internal and external financial pressures.

For more insights about iRobot and its portfolio of intelligent robotic solutions, visit www.irobot.com.