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IROBOT CORP (IRBT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue was $127.6M and non-GAAP EPS was ($0.27); GAAP EPS was ($0.68). Gross margin expanded to 30.0% GAAP (30.2% non-GAAP), reflecting cost actions even as liquidity tightened .
  • Versus consensus, revenue modestly beat ($127.6M vs $125.0M*) and EPS was a major beat (non-GAAP ($0.27) vs ($1.12)), though only one estimate was recorded for each metric. The company did not host a call and suspended guidance amid an ongoing strategic review* .
  • Regional mix was mixed: Japan +6% YoY, U.S. −33% YoY, EMEA −17% YoY. Mid-tier and premium robots were 73% of sales (vs 76% LY), with units shipped down sharply YoY as channel rationalization continued .
  • Liquidity pressures intensified: cash fell to $40.6M at quarter-end; restricted cash earmarked for loan repayment was $36.0M; term loan covenant waivers were extended to Sept 19, 2025 via Amendment No. 4 .
  • Management highlighted progress on margin and OpEx, but cited delayed scaling of new products and market headwinds; strategic alternatives (including debt refinancing and potential sale) remain under review .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expansion: GAAP GM rose to 30.0% (non-GAAP 30.2%), up sharply YoY from 16.5%/16.7% as cost of product revenue fell and manufacturing transitions progressed .
  • Operating discipline: Non-GAAP OpEx fell to $65.5M vs $75.9M LY; non-GAAP operating loss improved to ($27.0M) from ($48.2M) LY .
  • Early product traction: “Our second quarter performance fell short… While we made meaningful progress on gross margin expansion, tightened control over operating expenses, and improved net losses…” — CEO Gary Cohen . Prime Day visibility ranked #1–#3 for bestselling robot vacuums, with broad media coverage .

What Went Wrong

  • Top-line pressure and scale-up delays: Management cited “persistent market headwinds and delays in scaling production and sales of our new products,” constraining performance and cash generation .
  • U.S. and EMEA weakness: Revenue declined 33% in the U.S. and 17% in EMEA YoY; mix shift saw mid-tier/premium share dip to 73% from 76% LY .
  • Liquidity constraints: Cash fell to $40.6M (from $69.9M in Q1) with $36.0M restricted; continued lender waivers underscore covenant pressure and limited operational flexibility .

Financial Results

Key P&L vs Prior Year and Prior Quarter

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$166.4 $101.6 $127.6
GAAP Gross Margin (%)16.5% 20.0% 30.0%
Non-GAAP Gross Margin (%)16.7% 22.0% 30.2%
GAAP Operating Loss ($M)($61.1) ($45.8) ($36.7)
Non-GAAP Operating Loss ($M)($48.2) ($31.5) ($27.0)
GAAP EPS ($)($2.41) ($2.84) ($0.68)
Non-GAAP EPS ($)($1.96) ($1.95) ($0.27)

Estimate vs Actual (Q2 2025)

MetricConsensusActual
Revenue ($USD Millions)$125.0*$127.6
Primary EPS ($)($1.12)*($0.27)

Values with asterisk (*) retrieved from S&P Global.

Geographic and Product Mix (Q2 2025 vs Q2 2024)

MetricQ2 2024Q2 2025
United States Revenue ($000s)$84,364 $56,441
EMEA Revenue ($000s)$39,894 $33,253
Japan Revenue ($000s)$27,818 $29,424
Other Revenue ($000s)$14,285 $8,440
Total Revenue ($000s)$166,361 $127,558
2-in-1 Revenue ($USD Millions)$76 $100
Solo/Other Revenue ($USD Millions)$90 $28
Robot Units Shipped (000s)926 517
Avg Gross Selling Price ($)$330 $301
Mid/Premium Share of Sales (%)76% 73%

Balance Sheet & Cash Flow Highlights (Q2 2025)

MetricQ2 2025
Cash and Cash Equivalents ($M)$40.6
Restricted Cash ($M)$36.0
Inventory ($M)$88.2
GAAP Days in Inventory90
Days Sales Outstanding40

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company Outlook (Revenue, Margins, EPS)FY/Q3 2025None provided (Q1/Q4 suspended) Guidance suspended; no call Suspended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/Technology & Product PipelineLargest product launch outlined; margin-accretive new lineup expected Broad new lineup rollout, positive media in NA/EU/JP Max 705 Combo launch, Prime Day bestseller rankings (#1–#3), new campaign Momentum building, scaling slower than planned
Supply Chain & Manufacturing TransitionNon-recurring manufacturing transition charges; cost reductions Transition ongoing, channel clearing of legacy inventory Cost actions driving GM expansion; production scaling delays noted Operational improvement, timing risk persists
Tariffs/MacroOngoing macro pressure; holiday timing impacts U.S. imports mainly from Vietnam at 10% tariff Broader market pressures cited as hurdles Macro headwinds unchanged
Regional TrendsU.S. −47% YoY; EMEA −42% ex-FX; Japan −31% ex-FX U.S. −39.9%; EMEA −26.9%; Japan −20.8% YoY U.S. −33%; EMEA −17%; Japan +6% YoY Japan stabilizing; U.S./EMEA still weak
Regulatory/Legal & DebtBoard initiates strategic review; debt amendments Waiver extended to June 6, 2025 Waiver extended to Sept 19, 2025 (Amendment No. 4) Continued lender engagement; covenant relief extended
R&D & Cost StructureHeadcount cut ~51%; OpEx down materially Reinvented R&D/supply chain model OpEx control continues; non-GAAP OpEx down YoY Structural OpEx improvements sustained
Health features/Use casesEmphasis on intelligent home innovations Media & consumer coverage across geographies AI-driven clutter avoidance, dock auto-wash, carpet protection features Product differentiation highlighted

Management Commentary

  • “Our second quarter performance fell short of our expectations, due to persistent market headwinds and delays in scaling production and sales of our new products. While we made meaningful progress on gross margin expansion, tightened control over operating expenses, and improved net losses, our cash position continued to decline… posing ongoing challenges to liquidity and operational flexibility.” — Gary Cohen, CEO .
  • “As our Board of Directors continues its review of strategic alternatives for our business, we remain steadfast in executing our iRobot Elevate strategy…” .
  • “In light of the ongoing strategic review, the Company will not host an earnings conference call or webcast… and has suspended its practice of providing financial guidance.” .

Q&A Highlights

  • No Q&A; iRobot did not host an earnings conference call for Q2 2025 and suspended guidance .

Estimates Context

  • For Q2 2025, consensus revenue was $125.0M* vs actual $127.6M (beat); consensus Primary EPS was ($1.12)* vs actual non-GAAP ($0.27) (beat). Only one estimate was recorded for each metric*, limiting breadth of consensus. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin progress is real: 30% GM reflects cost actions and mix; sustaining this while scaling new products is the near-term profit lever .
  • Liquidity is the binding constraint: cash $40.6M with $36.0M restricted and ongoing covenant waivers; strategic review outcomes (refinancing/sale) are the primary stock catalysts .
  • Top-line trajectory is uneven: Japan improving (+6% YoY) but U.S./EMEA remain weak; product ramp timing and channel health are critical into 2H .
  • Non-GAAP profitability trends improved (smaller operating loss and EPS), but absolute losses remain material; estimate beats may not translate to rerating without clearer balance sheet relief .
  • Prime Day and new launches validate brand strength; sustained sell-through at higher ASPs will be key to cash generation and inventory turns .
  • No guidance and no call increase uncertainty; monitor SEC/8-Ks for further amendments, lender actions, or strategic transaction updates .
  • Tariff and macro remain steady headwinds; continued 10% tariff on Vietnam imports and promotional intensity could pressure gross margins if scale-up lags .
Values with asterisk (*) retrieved from S&P Global.

Source Documents

  • Q2 2025 earnings press release and detailed statements
  • 8-K (Item 2.02 and Amendment No. 4 to Credit Agreement)
  • Q1 2025 earnings press release
  • Q4 2024 earnings press release