New York City, New York – Following a failed $1.7 billion acquisition deal by Amazon over a year ago, iRobot, the parent company of Roomba robotic vacuum cleaners, is facing uncertainty about its future. In its quarterly earnings report released on Wednesday, the company disclosed that it has concerns about its ability to sustain operations. This revelation caused a significant drop of 30% in the company’s stock during premarket trading.
Based in Massachusetts, iRobot also announced that its board is considering a strategic review of alternative options for the business, including the possibility of a sale and refinancing to manage its increasing debt. This development comes after Amazon’s decision to abandon the acquisition due to regulatory issues raised by the European Union, causing a ripple effect on iRobot’s operations, leading to layoffs and a departure of its founder.
Despite the challenges faced, iRobot recently launched eight new Roomba products, the largest product introduction in its three-decade history. The company is counting on these new releases to drive revenue growth after experiencing a steep 44% decline in the fourth quarter of the previous year. However, iRobot remains cautious about the potential success of these products, citing factors such as consumer demand, competition, economic conditions, and trade policies that could affect their performance.
CEO Gary Cohen expressed optimism in the company’s ability to bounce back. He emphasized the potential of the new product lineup to enhance profit margins compared to previous offerings and to support revenue growth in the coming years. The company’s long-term strategy is centered around innovation and product development to regain market confidence and drive financial stability in the future.