iRobot Files for Chapter 11 Amid Rising Competition and Tariff Pressures

Core Viewpoint - iRobot has filed for Chapter 11 bankruptcy protection, indicating significant financial distress and a plan to be acquired by Picea Robotics, its primary manufacturer [1][6]. Financial Performance - iRobot's revenue in the third quarter was $145.8 million, a decrease from $193.4 million year-over-year, reflecting a 24.6% decline [7]. - The company reported an operating loss of $17.7 million, contrasting with a profit of $7.3 million in the same quarter of the previous year [7]. Market Impact - Following the bankruptcy announcement, iRobot's stock price fell over 65% from $4.32, indicating a severe negative reaction from the market [4]. - The company faced challenges due to tariff policies, resulting in increased costs of $23 million and a 33% drop in U.S. sales in the third quarter compared to the previous year [5][6]. Strategic Outlook - CEO Gary Cohen emphasized that the transaction with Picea Robotics aims to secure iRobot's long-term future and maintain continuity for consumers and partners [2]. - iRobot plans to continue operations during the bankruptcy proceedings, including maintaining its app functionality and customer support [4].