iRobot's Q2 2025 Financial Results: Revenue Decline Amid Market Challenges and Production Delays

iRobot reported a decline in revenue due to market challenges and production delays. Despite improvements in gross margin and operating expenses, the company's cash position weakened, posing challenges to liquidity. iRobot continues to explore strategic alternatives and has suspended its earnings call and financial guidance. The company's stock score is Neutral, primarily impacted by its poor financial performance and negative corporate events.

iRobot Corp. (NASDAQ: IRBT), a leader in consumer robots, reported its second quarter 2025 financial results, showing a decline in revenue due to market challenges and production delays. Despite improvements in gross margin and operating expenses, the company's cash position weakened, posing ongoing challenges to liquidity. iRobot continues to explore strategic alternatives and has suspended its earnings call and financial guidance. The company's stock score is Neutral, primarily impacted by its poor financial performance and negative corporate events.

The company reported revenue of $127.6 million for the second quarter 2025, a 6% decrease compared to the same period last year. Gross margin improved to 30.0%, up from 16.5% in the second quarter 2024, while non-GAAP gross margin stood at 30.2%. Operating expenses decreased to $75.0 million, and the company reported a GAAP operating loss of $36.7 million, down from $61.1 million in the second quarter 2024. The company's cash position declined to $40.6 million, compared to $69.9 million as of March 28, 2025.

iRobot's CEO, Gary Cohen, attributed the company's performance to persistent market headwinds and delays in scaling production and sales of its new products. He noted that while the company made progress on gross margin expansion and tightened control over operating expenses, the cash position continued to decline due to supporting new product launches. Early consumer response to the latest product launches has been encouraging, but broader market pressures and financial constraints remain significant hurdles to improved performance.

The company's Board of Directors is conducting a review of strategic alternatives, including a potential sale or strategic transaction and refinancing the Company's debt. This review process is ongoing, and the Board has not set a timetable for the conclusion of this review. iRobot has also suspended its practice of providing financial guidance and will not host an earnings conference call or webcast regarding its second quarter 2025 results.

In the second quarter of 2025, revenue increased 6% in Japan, declined 33% in the U.S., and declined 17% in EMEA over the prior-year period. Excluding the unfavorable foreign currency impact, Japan revenue increased 7%, and EMEA revenue declined 16% over the prior-year period. Revenue from mid-tier robots (with an MSRP between $300 and $499) and premium robots (with an MSRP of $500 or more) represented 73% of total robot sales in the second quarter of 2025 versus 76% from the same period last year.

iRobot introduced its most powerful and intelligent 2-in-1 robot to date, the Roomba Max 705 Combo Robot + AutoWash™ Dock, in July. The company was ranked #1, #2, and #3 for the bestselling robot vacuum cleaners during Amazon's Prime Day event in July. The company also announced a multi-platform marketing campaign featuring the new tagline "Roomba. Made for This."

The company's stock score is Neutral, primarily impacted by its poor financial performance and negative corporate events. Investors should closely monitor iRobot's strategic review and the results of its ongoing discussions with its primary lender.

References:
[1] https://investor.irobot.com/news-releases/news-release-details/irobot-reports-second-quarter-2025-financial-results