Financial Data and Key Metrics Changes - In Q1 2024, the company generated revenue of $150 million, a decline of 6% year-over-year, with a gross margin of 24.6%, an improvement from 23.7% in Q1 2023 [9][20][22] - The operating loss for Q1 was $40 million, compared to an operating loss of $62 million in the same period last year [22] - The net loss per share was $1.53, reflecting ongoing restructuring efforts and market challenges [23] Business Line Data and Key Metrics Changes - 2-in-1 products accounted for 45% of total robot sales in Q1 2024, while accessory revenue grew 8% year-over-year, representing approximately 12% of total revenue [21] - Revenue from mid-tier and premium robots represented 81% of total robot sales, down from 88% in the prior year, indicating a shift towards more competitively priced products [21] Market Data and Key Metrics Changes - Geographically, revenue declined by 3% in EMEA, 4% in the U.S., and 16% in Japan, with the latter impacted by a 34-year low in the yen against the dollar [20] - Direct-to-consumer (D2C) sales grew 3% year-over-year, with North America and EMEA showing 12% growth, while Japan experienced a 13% decline [21] Company Strategy and Development Direction - The company is focused on a restructuring plan aimed at stabilizing operations while pursuing long-term growth initiatives, including simplifying the cost structure and enhancing product offerings [10][18] - A new CEO has been appointed to lead the transformational strategy, emphasizing innovation and operational excellence [7][8] Management's Comments on Operating Environment and Future Outlook - Management noted a highly competitive environment with sluggish consumer durable goods markets, but expressed confidence in the company's ability to stabilize and grow [35][36] - The company anticipates a revenue decline in the first half of 2024, with expectations for modest positive cash flow in Q3 and Q4 [26][39] Other Important Information - The company reduced its workforce by approximately 330 employees, representing 30% of total staff, as part of its restructuring efforts [23] - Cash and cash equivalents at the end of Q1 were $118 million, a decline of $67 million from the previous quarter [24] Q&A Session Summary Question: Can you elaborate on the competitive dynamics in the marketplace? - Management acknowledged a very aggressive and competitive environment, with variations across regions, and noted ongoing efforts to reengage retail partners [35][36] Question: Should we anticipate any cash infusion or is current cash sufficient for working capital needs? - Management emphasized a focus on liquidity and cash management, aiming for modest positive cash flow in the latter half of the year [39]

Revenue Performance - Revenue for Q1 2024 was $150.0 million, a decrease of 6.4% compared to $160.3 million in Q1 2023[2] - Revenue for the three months ended March 30, 2024, was $150,014, a decrease of 6.9% compared to $160,292 for the same period in 2023[22] - Domestic revenue was $68,896, down from $71,986, while international revenue decreased to $81,118 from $88,306[28] - The full-year 2024 revenue outlook is revised to between $815 million and $860 million, reflecting unfavorable currency impacts and timing of new product introductions[14] - For Q2 2024, revenue is expected to be between $167 million and $172 million, with a gross margin of 23% to 24%[12] Profitability and Income - GAAP net income per share was $0.30, a significant improvement from a GAAP net loss per share of ($2.95) in Q1 2023[2] - Net income for the period was $8,607, a significant improvement from a net loss of $(81,112) in the same quarter last year[22] - GAAP net income for the three months ended March 30, 2024, was $8.607 million, compared to a net loss of $81.112 million for the same period in 2023[40] - Non-GAAP net loss for the three months ended March 30, 2024, was $(43.039) million, slightly improved from $(45.883) million in the prior year[40] Cash Flow and Expenses - Positive cash flow from operations was $1.4 million, aided by a one-time net proceeds of $75 million from a transaction termination fee from Amazon[2] - GAAP operating expenses for the three months ended March 30, 2024, were $24.201 million, significantly lower than $118.038 million in the same period last year, reflecting a decrease of approximately 79.5%[38] - GAAP operating loss for Q2 2024 is anticipated to be between $(57) million and $(54) million, and for FY 2024, between $(44) million and $(32) million[42] Workforce and Restructuring - The company reduced its workforce by approximately 330 employees, representing a 30% decrease in total workforce, resulting in a $14 million charge related to the restructuring plan[7] - Headcount as of March 30, 2024, was 1,058, down from 1,156, reflecting cost-cutting measures[28] Product and Market Strategy - Revenue from mid-tier and premium robots accounted for 81% of total robot sales in Q1 2024, down from 88% in the same period last year[8] - iRobot launched the Roomba Combo Essential and Roomba Vac Essential robots, with the Combo priced at $275, aimed at providing a more affordable cleaning solution[9] - Total robot units shipped increased to 456, compared to 436 units shipped in the same period last year[28] - Average gross selling prices for robot units decreased to $346 from $402, indicating a shift in pricing strategy or product mix[28] Leadership Changes - Gary Cohen has been appointed as the new CEO, bringing over 25 years of executive leadership experience to lead the company's transformational strategy[5] Financial Outlook - The company anticipates a mid-single-digit percentage improvement in revenue for the second half of 2024 compared to the second half of 2023[15] - The company expects GAAP gross profit for Q2 2024 to be between $39 million and $42 million, and for FY 2024 to be between $247 million and $277 million[42] - Non-GAAP gross margin for Q2 2024 is projected to be between 24% and 25%, while for FY 2024, it is expected to be between 31% and 33%[42] Asset and Liability Management - Total current assets decreased to $371,864 from $465,490, primarily due to a reduction in cash and accounts receivable[24] - Total liabilities decreased to $422,054 from $537,211, reflecting a reduction in accounts payable and long-term debt[24] Operational Metrics - Gross profit for the same period was $36,101, slightly down from $36,741, resulting in a gross margin of 24.1%[22] - Operating income for the three months ended March 30, 2024, was $11,900, compared to an operating loss of $(81,297) in the prior year[22] - Non-GAAP gross profit for the three months ended March 30, 2024, was $36.929 million, down from $37.930 million in the prior year, indicating a decline of about 2.6%[38] - Days sales outstanding increased to 24 days for the three months ended March 30, 2024, compared to 17 days in the prior year[40]

Financial Data and Key Metrics Changes - In Q4 2023, revenue was $308 million, a decline of 14% year-over-year, with a gross margin of 19%, down 5 percentage points from the previous year [7][20] - For the full year 2023, revenue decreased by 25% to $891 million, with a gross margin of 22.5%, down 7 percentage points from 2022 [21][22] - The operating loss for Q4 was $45 million, and the net loss per share was $1.82, while the full year operating loss was $199 million, with a net loss per share of $7.73 [7][21] Business Line Data and Key Metrics Changes - Two-in-one products accounted for 43% of Q4 revenue, while accessory revenue grew 18% year-over-year, representing approximately 7% of total revenue [19] - Direct-to-consumer (D2C) sales declined 9% year-over-year, with D2C revenue making up 21% of total revenue in Q4 [20] Market Data and Key Metrics Changes - Geographically, Q4 revenue declined by 20% in the U.S., 19% in Japan, and 5% in EMEA [19] - The overall market conditions remained challenging, with increased competition noted in EMEA, Japan, and the U.S. throughout 2023 [19] Company Strategy and Development Direction - The company is implementing a restructuring plan aimed at stabilizing operations and advancing long-term growth initiatives, focusing on simplifying the cost structure and enhancing core value drivers [8][31] - The strategy includes leveraging brand and innovative products to reclaim leadership in mid and premium segments and focusing on profitable geographies [8][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged sluggish consumer spending and aggressive competition as ongoing challenges, but expressed confidence in the company's ability to navigate these issues as a standalone entity [6][7] - The company anticipates modest revenue decline in 2024, with expectations of a recovery in the second half of the year [24][25] Other Important Information - The company plans to reduce its workforce by approximately 350 employees, representing about 31% of its workforce, with restructuring charges expected to be between $12 million and $13 million [13] - Liquidity and cash management are top priorities, with expectations of improved cash flow from operations in 2024 compared to 2023 [14][29] Q&A Session Summary Question: Can you elaborate on the gross margin improvement initiatives? - Management indicated that gross margin improvements will come from product mix, fixed cost reductions, and ongoing cost improvements on existing products [34][35][36] Question: What are the expectations for revenue recovery in the second half of the year? - Management noted that large orders may shift between quarters, impacting growth rates, and emphasized the importance of optimizing international channels [39][40] Question: Why is the first half of 2024 expected to be weaker? - Management explained that shifts in large orders and ongoing optimization efforts contribute to the anticipated weakness in the first half, with improvements expected in the second half [42][43]

Revenue Performance - iRobot's total revenue for fiscal 2023 was $890.6 million, a decline of 24.7% from $1,183.4 million in fiscal 2022[91]. - Domestic revenue decreased by $186.6 million, or 30.3%, while international revenue declined by $106.2 million, or 18.7%[91]. - Revenue for fiscal 2023 decreased 24.7% to $890.6 million from $1,183.4 million in fiscal 2022, with domestic revenue down 30.3% and international revenue down 18.7%[119]. - Total revenue for the fiscal year ended December 30, 2023, was $890,580, a decrease of 24.8% from $1,183,383 in the previous year[178]. - Revenue from the United States was $428.53 million, down 30.3% from $615.11 million in the previous year[237]. Profitability and Losses - iRobot reported an operating loss of $264.1 million in fiscal 2023, with an operating margin of (29.7)%[98]. - GAAP Net Loss for Q4 2023 was $(304,710) thousand, worsening from $(286,295) thousand in Q4 2022, representing an increase in losses of approximately 6.5%[102]. - Net loss for fiscal 2023 was $(304.7) million, compared to $(286.3) million in fiscal 2022, highlighting ongoing financial difficulties[124]. - Operating loss for fiscal 2023 was $(264.1) million, compared to $(240.4) million in fiscal 2022, indicating continued challenges in profitability[124]. - Basic loss per share for the fiscal year ended December 30, 2023, was $(11.01), compared to $(10.52) in 2022[229]. Expenses and Cost Management - The company reduced operating expenses by $130.2 million in fiscal 2023 compared to the previous year[91]. - Total operating expenses for fiscal 2023 were $460.3 million, down from $590.5 million in fiscal 2022, reflecting a reduction in research and development and marketing expenses[124]. - Research and development expenses for fiscal 2023 were $144.1 million, down from $166.5 million in fiscal 2022, indicating a strategic focus on cost management[124]. - Selling and marketing expenses decreased by $91.6 million, or 31.2%, to $201.7 million, representing 22.6% of revenue in fiscal 2023[132]. - General and administrative expenses decreased by $9.0 million, or 7.6%, to $109.1 million, representing 12.3% of revenue in fiscal 2023[134]. Inventory and Cash Management - As of December 30, 2023, iRobot's inventory balance was $152.5 million, a reduction of $132.8 million from the end of fiscal 2022[91]. - Inventory balance as of December 30, 2023, was $152.5 million, a reduction of $132.8 million from fiscal 2022, equating to 56 days of inventory[192]. - Cash and cash equivalents as of December 30, 2023, were $185.1 million, a significant increase from $117.9 million as of December 31, 2022[142]. - The company experienced a net cash used in operating activities of $114.79 million, an increase from $90.02 million in the prior year[185]. Restructuring and Future Plans - The company plans to implement an operational restructuring plan aimed at improving gross margins and profitability following the termination of a merger agreement[124]. - The operational restructuring plan announced on January 29, 2024, includes workforce reduction and a shift to contract manufacturers[127]. - The company plans to reduce headcount by approximately 350 employees, representing about 31% of its global workforce, with total reductions since fiscal 2021 expected to reach approximately 550 employees[192]. - The Company expects to incur restructuring charges of approximately $12 million to $13 million in the first two quarters of 2024 related to the workforce reduction[192]. Product Development and Market Competition - iRobot introduced new products including the Roomba Combo i5+ and j9+, along with new features in iRobot OS to enhance user experience[91]. - The decrease in revenue was attributed to a 27.5% decline in total robots shipped and increased pricing competition in the market[119]. - The gross margin decline was driven by increased promotional activities and higher rework costs, despite some cost reductions in product and freight expenses[124]. Debt and Financing - iRobot entered into a $200 million Term Loan in July 2023 to fund ongoing operations[93]. - The company entered into a $200.0 million senior secured term loan credit facility, receiving total proceeds of $188.2 million net of debt issuance costs[148]. - The Company incurred $10.6 million of interest expense related to the Term Loan during fiscal 2023, with $4.5 million unpaid and included in accrued expenses[266]. Impairments and Reserves - The Company recorded an impairment charge of $4.9 million related to acquired intangible assets during the fourth quarter of 2023[208]. - The Company recorded impairment charges of $3.9 million for non-marketable equity securities in both fiscal 2023 and 2022[211]. - The Company had reserves for product returns of $24.6 million and other credits and incentives of $95.3 million as of December 30, 2023, compared to $49.2 million and $106.5 million, respectively, in 2022[233].

Revenue Performance - Total revenue for the nine months ended September 30, 2023, was $583.0 million, a decline of 29.4% from $825.5 million for the same period in 2022[91]. - Domestic revenue decreased by $150.9 million, or 34.3%, while international revenue declined by $91.6 million, or 23.7%[91]. - Total revenue for the three months ended September 30, 2023, was $186,176 thousand, a decrease from $278,191 thousand in the same period last year, representing a decline of 33.1%[95]. - Revenue for the three months ended September 30, 2023 decreased by $92.0 million to $186.2 million, a decline of 33.1% compared to $278.2 million for the same period in 2022[102]. - Domestic revenue for the three months ended September 30, 2023 decreased by $61.3 million, or 41.7%, while international revenue decreased by $30.7 million, or 23.4%[103]. Profitability and Loss - Gross profit for the three months ended September 30, 2023, was $48.0 million, with a gross margin of 25.8%[94]. - Operating loss for the nine months ended September 30, 2023, was $(211.8) million, with an operating margin of (36.3)%[94]. - Non-GAAP gross profit for the three months ended September 30, 2023, was $49,414 thousand, down from $78,322 thousand year-over-year, reflecting a decrease of 36.9%[95]. - Non-GAAP operating loss for the three months ended September 30, 2023, was $(40,649) thousand, compared to $(34,520) thousand in the same period last year, indicating a worsening of 17.8%[98]. - GAAP net loss for the three months ended September 30, 2023, was $(79,205) thousand, compared to $(128,366) thousand in the same period last year, showing an improvement of 38.3%[98]. - Non-GAAP net loss per diluted share for the three months ended September 30, 2023, was $(2.82), compared to $(1.78) in the same period last year, indicating a decline of 58.4%[98]. - Operating loss for the three months ended September 30, 2023 was $(32.0) million, compared to $(24.6) million in the same period in 2022[104]. - Net loss for the three months ended September 30, 2023 was $(42.5) million, or (42.5)%, compared to $(46.1) million, or (46.1)%, in the same period in 2022[104]. Expenses and Cost Management - Research and development expenses decreased by $4.2 million, or 10.1%, to $37.2 million in the three months ended September 30, 2023[107]. - Selling and marketing expenses decreased by $18.5 million, or 30.7%, to $41.7 million in the three months ended September 30, 2023[108]. - General and administrative expenses decreased by $3.2 million, or 10.0%, to $28.4 million for the three months ended September 30, 2023, compared to $31.5 million for the same period in 2022[109]. - General and administrative expenses increased by $5.7 million, or 6.7%, to $90.2 million for the nine months ended September 30, 2023, compared to $84.6 million for the same period in 2022[109]. - Operating expenses were reduced by $70.5 million for the nine months ended September 30, 2023, compared to the same period last year[120]. Cash Flow and Financing - Cash and cash equivalents were $189.6 million as of September 30, 2023, with working capital of $231.5 million, a slight decrease from $232.1 million as of December 31, 2022[113]. - Net cash used in operating activities for the nine months ended September 30, 2023, was $113.6 million, primarily due to a net loss of $241.1 million[115]. - Net cash used in investing activities for the nine months ended September 30, 2023, was $3.3 million, mainly for the purchase of machinery and tooling for new products[116]. - Net cash provided by financing activities for the nine months ended September 30, 2023, was $186.2 million, primarily from proceeds of the Term Loan[116]. - The company entered into a $200.0 million senior secured term loan credit facility on July 24, 2023, with total proceeds of $188.2 million net of debt issuance costs[117]. Inventory and Orders - Inventory balance as of September 30, 2023, was $244.5 million, a reduction of $40.7 million from the end of fiscal 2022[91]. - Outstanding purchase orders as of September 30, 2023, totaled approximately $205.5 million, including $102.5 million related to inventory purchases[121]. Workforce and Restructuring - The company reduced its workforce by approximately 246 employees since the end of fiscal 2021, representing a total reduction of 18%[91]. - The company reduced its workforce by approximately 246 employees since the end of fiscal 2021, representing a total reduction of 8% and 7% of the workforce in two restructuring initiatives[120]. Product Development - New product introductions in September 2023 included the Roomba Combo i5+, j5+, and j9+, enhancing the product lineup[89]. Market Conditions and Future Outlook - The company anticipates that product availability issues will continue to impact revenue performance, with some orders shifted to the fourth quarter of 2023[103]. - The company plans to continue evaluating its critical accounting policies and estimates, particularly regarding the fair value of the Term Loan, which may significantly impact future valuations[99].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________________ FORM 10-Q ______________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED July 1, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 001-36414 _________________________________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________________________________ FORM 10-Q ______________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED April 1, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 001-36414 ________________________________________ ...

Revenue Performance - Total revenue for fiscal 2022 was $1,183.4 million, a decline of 24.4% from $1,565.0 million in fiscal 2021[78] - Domestic revenue decreased by $139.1 million, or 18.4%, while international revenue declined by $242.5 million, or 29.9%[79] - Revenue for fiscal 2022 decreased 24.4% to $1,183.4 million from $1,565.0 million in fiscal 2021, primarily due to a 25.3% decrease in total robots shipped and macroeconomic trends affecting consumer spending[98] - The company experienced a revenue decline of 24% in fiscal 2022 compared to fiscal 2021, primarily due to lower orders from retailers and distributors in the U.S. and EMEA[125] Profitability and Margins - Gross profit for fiscal 2022 was $350.1 million, down from $550.3 million in fiscal 2021[83] - Non-GAAP gross margin for fiscal 2022 was 29.4%, compared to 35.3% in fiscal 2021[84] - GAAP gross profit for the same period was $350,093 thousand, resulting in a gross margin of 29.4%, down from 35.3% the previous year[94] - Gross profit decreased by $200.2 million, or 36.4%, to $350.1 million in fiscal 2022, with a gross margin of 29.6%, down from 35.1% in fiscal 2021[103] - The gross margin decreased by 5.5 percentage points in fiscal 2022, largely due to pricing changes and higher promotional activity[103] Operating Loss and Expenses - Non-GAAP operating loss for fiscal 2022 was $(240.4) million, compared to $(1.1) million in fiscal 2021[83] - Total operating expenses increased to $590,476 thousand, up from $551,399 thousand in the prior year, driven by higher research and development costs[94] - Operating loss increased to (20.3)% of revenue in fiscal 2022, compared to (0.1)% in fiscal 2021, indicating a significant deterioration in operational performance[98] - Total operating expenses rose to 49.9% of revenue in fiscal 2022, up from 35.2% in fiscal 2021, driven by increased research and development and marketing expenses[98] Research and Development - Research and development expenses increased to 14.1% of revenue in fiscal 2022, up from 10.3% in fiscal 2021, reflecting ongoing investment in software and hardware development[98] - Research and development expenses increased by $5.2 million, or 3.2%, to $166.5 million, representing 14.1% of revenue in fiscal 2022[106] - Research and development expenses in fiscal 2021 were $161.3 million, which was 10.3% of revenue[106] Workforce and Restructuring - The company reduced its workforce by approximately 185 employees, representing about 15% of its workforce, as part of restructuring efforts[125] - The company has reduced its workforce by 203 employees since the end of fiscal 2021 and anticipates net cost savings of approximately $42.0 million in 2023 from restructuring actions[126] Cash Flow and Liquidity - As of December 31, 2022, the company reported cash and cash equivalents of $117.9 million, down from $234.5 million as of January 1, 2022, reflecting a decline of 50%[125] - The company has a $150.0 million secured revolving line of credit, with no outstanding borrowings as of December 31, 2022[123] - The company is managing liquidity by reducing discretionary spending and optimizing production volumes with contract manufacturers[126] Future Outlook - Future outlook includes a focus on enhancing product offerings and expanding market presence through strategic initiatives[88] - The company anticipates a slight increase in research and development expenses in absolute dollars and as a percentage of revenue for fiscal 2023[105] - Selling and marketing expenses are expected to decrease in fiscal 2023 due to planned reductions in working media and headcount[107] Merger and Acquisition - The merger agreement with Amazon will result in each share of common stock being converted into $61.00 in cash[80] - The company entered into a Merger Agreement with Amazon for the acquisition of iRobot, with various operational covenants in place[118] Inventory and Purchase Orders - As of December 31, 2022, the inventory balance was $285.3 million, a reduction of $133.8 million from the third quarter of fiscal 2022, equating to 95 days of inventory[126] - The company has outstanding purchase orders totaling approximately $151.5 million, with $18.5 million being non-cancellable without penalty, a decrease of $23.4 million from the prior year[128]