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The big picture: iRobot, best known for its Roomba brand of robotic vacuum cleaners and floor mops, was a pioneer in the early days of home autonomy. For a while, the Roomba name itself became synonymous with robotic vacuums and many erroneously thought it was actually the company’s name. Now, iRobot has warned investors that it might not survive the next 12 months as it continues to explore the possibility of a sale or a strategic partnership.
iRobot’s success spawned a whole new industry, and it didn’t take long for competitors to bring rival cleaning bots to market – often at lower price points or with more features. In the midst of a shifting landscape, iRobot in the summer of 2022 agreed to sell its business to Amazon as part of an all-cash deal valued at $1.7 billion, or $61 per share. At the time, the deal represented a 22 percent premium over iRobot’s share price.
The good times, however, would not last. Roughly a year and a half later, Amazon terminated what would have been its fourth largest acquisition at that time. It was the first time the Bezos-founded e-commerce giant had failed to complete a purchase, and it all came down to regulation. In short, Amazon did not believe it had a path to gaining approval from European Union regulators. As we’ve seen in the past, it’s often better to cut your losses than to try and fight a regulatory battle.
It’s mostly been a downhill journey ever since. Last year, iRobot laid off more than half of its workforce as part of a restructuring that also involved lowering sales and marketing expenses through consolidation, and decreasing inventory and cash outflow.
Revenue for the fourth quarter of 2024 reached $172.9 million, down 44 percent from $307.5 million during the same period a year ago. Full-year revenue dipped to $681.8 million, down from $890.6 million in 2023. Shares in iRobot, which once topped out at around $133 in 2021, are currently trading for just $4.06.
Image credit: Frank Minjarez, Kindel Media
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