iRobot, the Massachusetts-based pioneer in robotic vacuum technology, faces turbulent times as its stock plummeted by 30% in premarket trading. The company, renowned for its Roomba vacuum cleaners, recently unveiled eight new models, marking the largest product launch in its 30-year history. Despite this significant development, iRobot reported a 44% decline in revenue during the fourth quarter compared to the same period last year.
The company's board is actively exploring a "strategic review of alternatives for the business," which includes considering a sale and refinancing options for its escalating debt. Concerns loom over iRobot's future viability, with the company expressing "substantial doubt about the company’s ability to continue."
iRobot's challenges intensified after an acquisition deal with Amazon fell through approximately 14 months ago. Amazon had planned to buy iRobot for $1.7 billion, but EU regulators' concerns thwarted the agreement. Following the collapse of the deal, iRobot experienced a sharp decline in its stock value and laid off about half of its workforce. Additionally, founder Colin Angle departed the company soon after the acquisition talks ended.
Despite these challenges, CEO Gary Cohen remains optimistic about iRobot's future. He believes that "this strong pipeline of breakthrough new products" can rejuvenate the company's fortunes. iRobot aims to leverage these products to boost revenue and achieve year-over-year growth by 2025.
However, the company acknowledges that success hinges on several factors. According to iRobot, their new offerings "will be successful due to potential factors, including, but not limited to, consumer demand, competition, macroeconomic conditions, and tariff policies."