iRobot, the maker of Roomba robotic vacuum cleaners, has raised serious concerns about its future, revealing significant doubts about its ability to continue as a business. This warning came in the company’s latest quarterly earnings report, and as a result, its stock plummeted by 30% in premarket trading.
The Massachusetts-based company also announced that its board is considering a “strategic review of alternatives,” which could lead to a sale of the company or the restructuring of its growing debt. This news comes about 14 months after Amazon abandoned plans to acquire iRobot for $1.7 billion, primarily due to concerns from European Union regulators, who were prepared to block the deal. Following the collapse of the acquisition, iRobot’s founder, Colin Angle, left the company, its stock value dropped dramatically, and the company laid off around half of its workforce.
To try to recover, iRobot recently launched eight new Roomba models, the largest product launch in the company’s 30-year history. These new products are hoped to boost revenue, which had dropped by 44% in the fourth quarter compared to the previous year. However, the company acknowledged that there is no guarantee these new products will succeed, as their success depends on factors like consumer demand, competition, macroeconomic conditions, and tariff policies.
Despite the challenges, CEO Gary Cohen remains hopeful. In the earnings release, he expressed confidence that the new products, which feature innovations that should improve profit margins, will help the company achieve revenue growth in 2025.