iRobot (IRBT) Reports Q2 Loss, Misses Revenue Estimates

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].