On Wednesday, iRobot raised concerns in a statement about its ability to stay in business. After the latest financial figures that were worse than forecast, iRobot says there is a substantial doubt it can survive another year.
Shares of the iRobot Corp. fell more than 35% on Wednesday, reaching a new record low. “Given macroeconomic and tariff-related uncertainties, there is doubt about iRobot’s ability to continue as a going concern,” iRobot said in a statement.
In January 2024, Amazon abandoned its planned $1.7 billion acquisition of iRobot as part of its smart-home strategy. Amazon canceled the deal because regulators in the US and Europe were concerned that the merger might harm the competition in the robot vacuum market. The regulators raised concerns that the acquisition of iRobot could lead to Amazon having too much control over the robot vacuum market.
Following Amazon’s abandoned acquisition, iRobot implemented significant measures. They cut down 50 percent of its workforce, decreased inventory and cash outflows, and also reduced costs by reorganizing its R&D and supply chain models.
These measures contributed to a meaningful reduction in the company’s expenses in 2024 compared with the previous year. iRobot said its still not enough. In 2021, the company was valued at $3.55 billion, due to the high dimand in Covid pandamic. It is now worth less than $200 million.
Even after reducing operating expenses over the past year, the company still reported a net loss of $146 million for the year 2024. However, its an improvement compared to the previous year. In 2023, the company suffered a $305 million loss.
In 2024, the company has a lower cash reserve of only $134.3 million, compared to $185.1 million in 2023. At the same time, the company’s debt stood at $200.6 million by the end of December 2024, according to its yearly report.
In addition to the cost-cutting measures, iRobot said they have started a strategic review to explore options, including refinancing of its debt, a “strategic transaction,” or another possible sale.
“There can be no assurance that the exploration of strategic alternatives will result in any agreements or transactions,” iRobot said.
iRobot, the Roomba maker, is having a hard time keeping up with Chinese competitors such as Ecovacs, Dreame, and Narwal Robotics, which offer advanced features at lower prices.