Core Viewpoint - iRobot Corporation (IRBT) is facing significant operational challenges, including decreased product demand and foreign currency risks, leading to disappointing investor sentiment [1][3]. Group 1: Business Performance - iRobot's revenues declined by 29.7% year over year in Q2 2024, attributed to decreased product demand and increased market competition [2]. - Revenues for solo and other products fell by 52.1% year over year during the same period, with units shipped dropping to 300 thousand, a decrease of 55.4% year over year [2]. - The company anticipates revenues between $765 million and $800 million for 2024, indicating a year-over-year decrease of 12.2% [2]. Group 2: Operating Margins - Rising promotional activities and losses related to purchase commitments with contract manufacturers are negatively impacting iRobot's operating margins [2]. - In Q2, iRobot reported an adjusted operating loss of $61.1 million, resulting in an adjusted operating margin of (29%) [2]. - The company expects to incur an operating loss between $65 million and $79 million in 2024 [2]. Group 3: Foreign Exchange Risks - iRobot's international operations expose it to risks from adverse currency fluctuations, particularly with a strengthening U.S. dollar [3]. - The company may need to raise prices or face reduced profit margins in markets outside the United States due to these currency movements [3]. Group 4: Stock Performance - iRobot currently holds a Zacks Rank of 4 (Sell), with its stock losing 80.7% over the past year, compared to a 12.2% decline in the industry [3].

Industry Overview - Robotics is gaining significant investor interest, particularly with the rise of artificial intelligence technologies, as automation drives efficiencies across various sectors including manufacturing, logistics, and household tasks [1] - The economic rationale for investing in public companies involved in robotic automation is strong, given the long-term positive impact of robots on multiple industries [1] Company Analysis: iRobot (IRBT) - iRobot has seen a dramatic decline of nearly 81% since the beginning of the year, primarily due to inflation and high interest rates affecting consumer spending on non-essential goods [2] - The company announced a restructuring plan called "iRobot Elevate" aimed at operational cost-cutting, which has improved margins and reduced inventory levels in Q2 of fiscal year 2024 [3] - iRobot faces increasing competition from Chinese startups like Narwal, which offer innovative products such as self-cleaning mops that directly compete with iRobot's offerings [3] Company Analysis: Rockwell Automation (ROK) - Rockwell Automation operates in industrial automation, providing smart devices and robotic solutions for manufacturing and logistics [5] - Despite experiencing double-digit growth over the past three fiscal years, order growth is slowing, potentially due to reduced consumer spending impacting industrial demand for automation [6] - The stock has declined by 17% since the start of the year, with a challenging demand environment likely to exacerbate this trend [6] Company Analysis: PTC (PTC) - PTC specializes in software development tools for manufacturers, including 3D CAD technology and augmented reality solutions [7] - The company experienced a boost in revenue during the COVID-19 pandemic, but growth has since slowed to high single-digit percentages in 2022 and 2024 [8] - The macroeconomic outlook for the software sector may put pressure on PTC's stock in the future as economic conditions deteriorate [8]

Core Insights - iRobot Corp. has appointed Michael J. Loparco to its board of directors, bringing extensive experience in public company leadership and global technology [1][2][3] Company Overview - iRobot is a global leader in consumer robotics, known for its innovative products that enhance home life, including the Roomba vacuum, which has sold over 50 million units worldwide [4] Leadership Experience - Michael J. Loparco has over 25 years of experience in building technical and cross-border manufacturing businesses, most recently as CEO of Symbotic, where he led a successful IPO [2] - At Jabil Inc., he was responsible for over $22 billion in global operations and led supply chain and operations across 25 countries with a workforce exceeding 80,000 employees [2] Strategic Importance - The addition of Loparco is seen as a significant asset for iRobot as it continues its transformation and strategic initiatives, leveraging his expertise in manufacturing, supply chain, and IT [3]

Core Insights - iRobot Corp. will participate in the 13th Annual Needham Virtual Industrial Tech, Robotics, & Clean Tech 1x1 Conference on August 19, 2024, with its management team available for one-on-one virtual meetings with investors [1] Company Overview - iRobot is a global consumer robot company that designs and builds robots and intelligent home innovations aimed at improving quality of life [2] - The company introduced the first Roomba robot vacuum in 2002 and has since sold over 50 million robots worldwide [2] - iRobot's product portfolio includes advanced technologies in cleaning, mapping, and navigation, with ongoing development of robots and smart home devices to enhance home maintenance and health [2]

Core Viewpoint - iRobot Corporation reported a wider adjusted loss per share for Q2 2024 compared to both the consensus estimate and the previous year, indicating ongoing challenges in revenue generation and profitability [1][4]. Revenue Details - iRobot generated revenues of $166.4 million, missing the consensus estimate of $168 million, and reflecting a year-over-year decrease of 29.7% due to lower sales across all product categories [2]. - Premium and mid-tier robots accounted for 76% of total robot revenues, down from 84% in the year-ago quarter [2]. - Total product units shipped were 574 thousand, a decrease of 30.9% year-over-year, with average selling prices declining by 4.9% [2]. - Revenues from solo and other products were $90 million, down 52.1% year-over-year, with units shipped decreasing by 55.4% [2]. - Revenues from two-in-one products increased by 55.1% year-over-year to $76 million, with units shipped rising from 159 thousand to 274 thousand [2]. Regional Performance - Domestic operations contributed 50.7% of revenues, totaling $84.4 million, which is a 35.6% decline year-over-year [3]. - International revenues decreased by 22.4% year-over-year to $82 million [3]. Margin Profile - Cost of revenues decreased by 24.1% year-over-year to $138.9 million, while adjusted gross profit fell by 49.5% to $27.7 million, leading to an adjusted gross margin decrease of 650 basis points to 16.7% [4]. - Research and development expenses were $23.2 million, down 38.8% year-over-year, and selling and marketing expenses declined by 28.1% to $40 million [4]. - The adjusted operating loss was $61.1 million, an improvement from $71.1 million in the previous year, with an adjusted operating margin of (29%) compared to (21.3%) in the year-ago quarter [4]. Balance Sheet and Cash Flow - At the end of Q2, iRobot had cash and cash equivalents of $108.5 million, down from $185.1 million at the end of Q4 2023 [5]. - Total long-term liabilities decreased to $215.2 million from $250.1 million at the end of Q4 2023 [5]. - The company used net cash of $20.2 million from operating activities in the first half of 2024, compared to $58.1 million in the prior-year period [5]. - Capital expenditures for property and equipment declined by 95.3% year-over-year to $118 million [5]. Outlook - For Q3 2024, iRobot expects net sales to be between $217 million and $223 million, with the consensus estimate at $202 million [6]. - The adjusted gross margin is projected to be in the range of 33-34%, while adjusted loss per share is expected to be between 1 and 11 cents [6]. - For the full year 2024, management forecasts net sales between $765 million and $800 million, with the consensus estimate at $839.8 million [6][7]. - The adjusted gross margin for the year is anticipated to be between 28-29%, with projected adjusted loss per share between $3.31 and $3.77 [7].

Financial Data and Key Metrics Changes - Q2 2024 revenue totaled $166.4 million, down 30% from $236.6 million in Q2 2023 [21] - Gross margin for Q2 2024 was 16.7%, a decline from 24.6% in Q1 2024 and 23.2% in Q2 2023, impacted by an $18.4 million manufacturing transition charge [24] - Operating loss narrowed to $48.2 million in Q2 2024 from $50.5 million in the prior year [27] - Net loss per share was $1.96, including $0.63 per share for the manufacturing transition charge [28] Business Line Data and Key Metrics Changes - Two-in-one products represented 51% of total robot sales in Q2 2024, with accessory revenue growing 13% year-over-year [22] - Revenue from mid-tier and premium robots accounted for 76% of total robot sales, down from 84% in the previous year [22] - Direct-to-consumer sales declined 6%, with a 21% drop in Japan, offset by 2% growth in North America and EMEA [23] Market Data and Key Metrics Changes - Revenue declined 36% in the US, 35% in Japan, and 22% in EMEA [22] - Japan's revenue decreased 28% year-over-year when excluding unfavorable foreign currency impacts [22] Company Strategy and Development Direction - The company is undergoing a turnaround, focusing on restructuring to enhance competitiveness and profitability [9][15] - The "iRobot Elevate" strategy aims to improve financial performance, consumer focus, and product innovation [17] - A new product, the Roomba Combo 10 Max, was launched, with plans for a significant product portfolio update in 2025 [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging consumer spending environment and heightened competition [21] - The company expects to generate modest positive cash flow from operations in the second half of 2024 [33] - Full year 2024 revenue is projected to be between $765 million and $800 million, with a gross margin of 28% to 29% [32] Other Important Information - The company reduced operating expenses by 28% year-over-year to $75.9 million, reflecting aggressive restructuring efforts [25] - Cash outflow from operations was $21.7 million in Q2 2024, compared to a cash inflow of $1.4 million in Q1 2024 [28] - The company sold 1.1 million shares for total net proceeds of $12.3 million during Q2 [30] Q&A Session Summary Question: Update on retail customer base and channel partners - Management is actively engaged with customers and optimistic about product line launches to improve distribution [40] Question: Insights on the 2025 product portfolio update - The company aims to fill performance gaps in various price points with appealing consumer products [42] Question: Long-term gross margin expectations - Management is focused on expanding gross margins through improved supply chain reliance and cost reductions [44]

R Q2 2024 Financial Results August 7, 2024 Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which relate to, among other things: the Company's expectations regarding future financial performance, including with respect to third quarter and fiscal year 2024 revenue, gross margin, operating loss ...

IRobot (IRBT) came out with a quarterly loss of $1.96 per share versus the Zacks Consensus Estimate of a loss of $1.77. This compares to loss of $1.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -10.73%. A quarter ago, it was expected that this robotics technology company would post a loss of $2.03 per share when it actually produced a loss of $1.53, delivering a surprise of 24.63%.Over the last four quarters, the company ...

Revenue and Sales Performance - Q2 2024 revenue declined to $166.4 million, a 29.7% decrease compared to Q2 2023 revenue of $236.6 million[5] - Revenue for the three months ended June 29, 2024 was $166.361 million, a decrease from $236.568 million in the same period in 2023[21] - Total revenue for the three months ended June 29, 2024, was $166.361 million, a decrease from $236.568 million in the same period last year[27] - Domestic revenue for the three months ended June 29, 2024, was $84.364 million, compared to $130.958 million in the prior year period[27] - International revenue for the three months ended June 29, 2024, was $81.997 million, down from $105.610 million in the same period last year[27] - Revenue from mid-tier and premium robots represented 76% of total robot sales in Q2 2024, down from 84% in the same period last year[8] - Total robot units shipped for the three months ended June 29, 2024, were 574,000, a decrease from 831,000 in the prior year period[27] - Average gross selling price for robot units for the three months ended June 29, 2024, was $330, compared to $347 in the same period last year[27] Gross Margin and Profitability - GAAP gross margin for Q2 2024 was 16.5%, down from 22.6% in Q2 2023, impacted by an $18.4 million non-recurring charge related to inventory write-offs[5][6] - GAAP gross margin for the three months ended June 29, 2024, was 16.5%, compared to 22.6% in the same period last year[34] - Non-GAAP gross margin for the three months ended June 29, 2024, was 16.7%, down from 23.2% in the prior year period[34] - GAAP Gross Profit guidance for Q3-24 is $72 - $76 million, with a Gross Margin of 33% - 34%[39] - Non-GAAP Gross Profit guidance for Q3-24 is $72 - $76 million, with a Gross Margin of 33% - 34%[39] Operating Expenses and Losses - GAAP operating loss for the three months ended June 29, 2024, was $61.068 million, compared to $71.056 million in the same period last year[34] - Non-GAAP operating loss for the three months ended June 29, 2024, was $48.203 million, an improvement from $50.485 million in the prior year period[34] - GAAP Operating Expenses for FY-24 are projected to be $267 - $271 million[39] - Non-GAAP Operating Expenses for FY-24 are projected to be $291 - $295 million[39] - Research and development expenses for the six months ended June 29, 2024 were $57.108 million, compared to $79.240 million in the same period in 2023[21] - Selling and marketing expenses for the six months ended June 29, 2024 were $69.696 million, compared to $98.072 million in the same period in 2023[21] Net Loss and Cash Flow - Net loss for the six months ended June 29, 2024 was $62.039 million, compared to a net loss of $161.912 million in the same period in 2023[21] - GAAP Net Loss for the six months ended June 29, 2024, was $(62,039) million, compared to $(161,912) million for the same period in 2023[36] - Non-GAAP Net Loss for the six months ended June 29, 2024, was $(100,581) million, compared to $(85,215) million for the same period in 2023[36] - GAAP Net Loss Per Share guidance for Q3-24 is $(0.40) - $(0.30)[39] - Non-GAAP Net Loss Per Share guidance for Q3-24 is $(0.11) - $(0.01)[39] - Net cash used in operating activities for the six months ended June 29, 2024 was $20.233 million, compared to $58.111 million in the same period in 2023[25] - The company expects to generate modest positive cash flow from operations during the second half of 2024[14] Inventory and Assets - Inventory as of June 29, 2024, totaled $101.4 million, a 41% reduction compared to Q2 2023[7] - Inventory decreased to $101.365 million as of June 29, 2024 from $152.469 million as of December 30, 2023[23] - Non-GAAP Days in Inventory for the six months ended June 29, 2024, was 67 days, compared to 86 days for the same period in 2023[36] - Total assets decreased to $585.939 million as of June 29, 2024 from $733.698 million as of December 30, 2023[23] Cash and Liabilities - Cash and cash equivalents decreased to $108.513 million as of June 29, 2024 from $185.121 million as of December 30, 2023[23] - Total current liabilities decreased to $221.644 million as of June 29, 2024 from $287.147 million as of December 30, 2023[23] - Days Sales Outstanding for the six months ended June 29, 2024, was 37 days, compared to 28 days for the same period in 2023[36] Headcount and Compensation - The company reduced its total headcount by 35% since year-end 2023[7] - Headcount as of June 29, 2024, was 726, a decrease from 1,139 in the prior year period[27] - Stock-based compensation for the six months ended June 29, 2024 was $12.458 million, compared to $16.505 million in the same period in 2023[21] Product Launches and Distribution - The company introduced the Roomba Combo 10 Max robot + AutoWash Dock, its most advanced product, in July 2024[4][10] - The Roomba Essential series achieved full distribution coverage, launching in 14,000 stores across all regions[9] Revenue and Gross Margin Guidance - Q3 2024 revenue is expected to be between $217 million and $223 million, with a GAAP gross margin of 33% to 34%[12] - Full-year 2024 revenue is revised to $765 million to $800 million, with a GAAP gross margin of 27% to 28%[13]

Identifying stocks to sell is crucial for investors who want to keep their capital. That might mean occasionally rebalancing one’s portfolio, or if the situation is grave enough, some stocks might need to be cut completely out. And, with how bullish the tech industry is right now, I bet most of you are holding a few tech stocks in your portfolio because they’re great for profits. That being said, a sudden market downturn can also lead to massive (and disproportionate) sell-offs in the tech industry, so it m ...