After Amazon abandoned its $1.4 billion acquisition of iRobot, the American robotic vacuum manufacturer has been facing significant financial difficulties.
Due to increased competition from Chinese companies, iRobot’s performance has been steadily declining. On March 12, the company admitted that its ability to continue operations for the next 12 months is uncertain, casting doubt on its future.
As a result, iRobot’s stock plummeted by over 40% during trading on the U.S. stock market that day, closing with a 36% decline—the largest single-day drop since the company went public in 2005.
Financial Struggles and Declining Sales
According to its latest financial report, iRobot’s sales in Q4 2023 fell by 44% year-over-year to $172 million, with a net loss of $77.1 million. By region, sales dropped 47% in the U.S., 34% in Japan, and 44% in Europe, the Middle East, and Africa.
From Market Leader to Struggling Competitor
iRobot gained worldwide recognition with the launch of its Roomba robotic vacuum in 2002, which helped popularize home cleaning robots. However, the company has struggled to maintain its market share amid fierce competition from Chinese manufacturers.
An IDC report on global smart vacuum shipments in Q2 2023 revealed that nine out of the top ten companies in terms of shipments were either Chinese or Chinese-controlled. Meanwhile, iRobot’s shipments declined by 6% year-over-year, placing it in the second position globally.
Amazon’s Failed Acquisition
In 2022, Amazon announced plans to acquire iRobot for $1.7 billion in cash, aiming to strengthen its smart home ecosystem. However, the deal faced regulatory scrutiny from the U.S. Federal Trade Commission (FTC), the European Union, and other entities.
On January 29, 2024, Amazon officially abandoned the acquisition after EU regulators threatened to block the deal, and both parties failed to reach a resolution. Following this decision, iRobot’s CEO, Colin Angle, stepped down, and the company initiated a restructuring plan that included laying off approximately 350 employees—31% of its workforce. Amazon also agreed to pay iRobot $94 million as a termination fee.
iRobot’s Last-Ditch Effort
Despite its struggles, iRobot is attempting to revive its business. This week, the company launched eight new Roomba models, marking the largest product release in its 30-year history. However, iRobot cautioned in its financial report that the success of these new products remains uncertain due to factors such as consumer demand, market competition, macroeconomic conditions, and tariff policies.
As the company fights to stay afloat, only time will tell if its latest innovations can help it regain stability in the highly competitive smart home market.
