iRobot Provides First Quarter 2024 Financial Expectations and Reiterates 2024 Financial Outlook
- iRobot Corp. provides financial expectations for Q1 2024 and reiterates outlook for FY 2024.
- Q1 2024 revenue expected to be $137-$142 million with net loss per share of ($0.22)-($0.09).
- FY 2024 revenue projected at $825-$865 million with net loss per share of ($3.13)-($2.70).
- Anticipated revenue decline in the high teens to low 20s percentage range for the first half of 2024 compared to 2023.
- Gross margin improvement expected in the second half of the year as the Company ramps its initiatives.
- None.
Insights
The guidance provided by iRobot Corp. indicates a revenue range of $137 - $142 million for the first quarter and $825 - $865 million for the fiscal year 2024. The projected gross margins and operating income (loss) figures are crucial for understanding the company's profitability. A gross margin of 22% to 23% for Q1 and 31% to 33% for the full year, with corresponding non-GAAP adjustments, suggests that iRobot is anticipating moderate profitability, with significant improvements expected in the latter half of the year.
Investors should note the substantial non-GAAP adjustments, particularly a ~($54) million adjustment to operating income in Q1 and a ~($17) million adjustment for the fiscal year. This indicates significant non-operating expenses or one-time costs that investors should investigate further, as these adjustments can provide insights into the company's core operating efficiency and potential future profitability.
The expected decline in revenue in the high teens to low 20s percentage range for the first half of 2024 compared to the first half of 2023, with Q2 anticipated to be weaker, suggests that iRobot is facing challenges in the consumer robotics market. This could be due to a variety of factors such as increased competition, market saturation, or shifts in consumer spending. The mid-single-digit percentage improvement in revenue projected for the second half of the year implies that the company is expecting a recovery or the realization of benefits from its strategic initiatives.
Understanding the context of these projections is important for stakeholders. If the anticipated order shift into Q3 is due to new product launches or strategic partnerships, this could be a positive sign for long-term growth. However, if it is due to delayed customer purchases or supply chain issues, it could signal underlying problems that may affect future performance.
The financial expectations of iRobot Corp. reflect broader economic conditions. The anticipated gross margin improvement in the second half of the year could be indicative of cost-saving measures, efficiency improvements, or economies of scale as production ramps up. However, the initial revenue decline and operating losses suggest a challenging economic environment, potentially influenced by factors such as consumer confidence, disposable income levels and global economic trends.
An economist would also consider the impact of inflation on the company's cost structure and pricing strategy. If iRobot's costs are increasing due to inflation but pricing power is limited due to competitive pressures, this could squeeze margins further. Conversely, if iRobot can pass on costs to consumers without a significant drop in demand, it may indicate strong brand loyalty and product differentiation in the market.
First Quarter 2024 Outlook
iRobot is providing GAAP and non-GAAP financial expectations for the first quarter ending March 30, 2024. A detailed reconciliation between the Company's GAAP and non-GAAP expectations is included in the attached financial tables.
First Quarter 2024:
Metric | GAAP | Adjustments | Non-GAAP | ||
Revenue | — | ||||
Gross Margin | ~ | ||||
Operating Income (Loss) | ~( | ( | |||
Net Loss Per Share | ( | ~( | ( |
Reiterates 2024 Financial Outlook
iRobot is reiterating its GAAP and non-GAAP financial expectations for the fiscal year ending December 28, 2024 as well as first half and second half color, previously announced in its fourth-quarter and year-end 2023 news release on February 26, 2024. A detailed reconciliation between the Company's GAAP and non-GAAP expectations is included in the attached financial tables.
Fiscal Year 2024:
Metric | GAAP | Adjustments | Non-GAAP | ||
Revenue | — | ||||
Gross Margin | ~ | ||||
Operating Loss | ( | ~( | ( | ||
Net Loss Per Share | ( | ~( | ( |
- For the first half of 2024, revenue is expected to decline in the high teens to low 20s percentage range compared to the first half of 2023, with Q2 expected to be the weaker quarter year-over-year as the Company expects a shifting of orders into Q3.
- For the second half of the year, the Company anticipates a mid-single-digit percentage improvement in revenue compared to the second half of 2023.
- iRobot anticipates that the majority of the gross margin improvement will occur in the second half of the year as the Company ramps its initiatives.
About iRobot Corp.
iRobot is a global consumer robot company that designs and builds thoughtful robots and intelligent home innovations that make life better. iRobot introduced the first Roomba robot vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 50 million robots worldwide. iRobot's product portfolio features technologies and advanced concepts in cleaning, mapping and navigation. Working from this portfolio, iRobot engineers are building robots and smart home devices to help consumers make their homes easier to maintain and healthier places to live. For more information about iRobot, please visit www.irobot.com.
Cautionary Statement Regarding Forward-Looking Statements
This communication 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 first quarter and fiscal year 2024 revenue, gross margin, operating loss and loss per share; and the Company's implementation of its operational restructuring plan, the expected business and financial impacts thereof, and related restructuring charges. These forward-looking statements are based on the Company's current expectations, estimates and projections about its business and industry, all of which are subject to change. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "could," "seek," "see," "will," "may," "would," "might," "potentially," "estimate," "continue," "expect," "target," similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control, and are not guarantees of future results, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the Company's ability to obtain capital when desired on favorable terms, if at all; (ii) our restructuring efforts may not be successful; (iii) the impact of the COVID-19 pandemic and various global conflicts on the Company's business and general economic conditions; (iv) the Company's ability to implement its business strategy; (v) the risk that disruptions from the proposed restructuring will harm the Company's business, including current plans and operations; (vi) the ability of the Company to retain and hire key personnel, including successfully navigating its leadership transition; (vii) legislative, regulatory and economic developments affecting the Company's business; (viii) general economic and market developments and conditions; (ix) the evolving legal, regulatory and tax regimes under which the Company operates; (x) potential business uncertainty, including changes to existing business relationships that could affect the Company's financial performance; (xi) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, (xii) current supply chain challenges including current constraints in the availability of certain semiconductor components used in the Company's products; (xiii) the financial strength of the Company's customers and retailers; (xiv) the impact of tariffs on goods imported into
iRobot Corporation
Explanation of Non-GAAP Measures
This press release contains references to the non-GAAP financial measures described below. We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations from these results should be carefully evaluated.
Amortization of acquired intangible assets: Amortization of acquired intangible assets consists of amortization of intangible assets including completed technology, customer relationships, and reacquired distribution rights acquired in connection with business combinations as well as any non-cash impairment charges associated with intangible assets in connection with our past acquisitions. Amortization charges for our acquisition-related intangible assets are inconsistent in size and are significantly impacted by the timing and valuation of our acquisitions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Net Merger, Acquisition and Divestiture (Income) Expense: Net merger, acquisition and divestiture (income) expense primarily consists of transaction fees, professional fees, and transition and integration costs directly associated with mergers, acquisitions and divestitures, including with respect to the iRobot-Amazon Merger which was terminated on January 28, 2024. It also includes business combination adjustments including adjustments after the measurement period has ended. The occurrence and amount of these costs will vary depending on the timing and size of these transactions. We exclude these charges from our non-GAAP measures to facilitate an evaluation of our current operating performance and comparisons to our past operating performance.
Stock-Based Compensation: Stock-based compensation is a non-cash charge relating to stock-based awards. We exclude this expense as it is a non-cash expense, and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies.
Restructuring and Other: Restructuring charges are related to one-time actions associated with realigning resources, enhancing operational productivity and efficiency, or improving our cost structure in support of our strategy. Such actions are not reflective of ongoing operations and include costs primarily associated with severance costs, certain professional fees, costs associated with consolidation of facilities, warehouses and any other leased properties, and other non-recurring costs directly associated with resource realignments tied to strategic initiatives or changes in business conditions. We exclude this item from our non-GAAP measures when evaluating our recent and prospective business performance as such items vary significantly based on the magnitude of the action and do not reflect anticipated future operating costs. In addition, these charges do not necessarily provide meaningful insight into the fundamentals of current or past operations of our business.
Income tax adjustments: Income tax adjustments include the tax effect of the non-GAAP adjustments, calculated using the appropriate statutory tax rate for each adjustment. We regularly assess the need to record valuation allowances based on non-GAAP profitability and other factors. We also exclude certain tax items, including the impact from stock-based compensation windfalls/shortfalls, that are not reflective of income tax expense incurred as a result of current period earnings. We believe disclosure of the income tax provision before the effect of such tax items is important to permit investors' consistent earnings comparison between periods.
iRobot Corporation | ||
Supplemental Reconciliation of First Quarter Fiscal Year 2024 GAAP to Non-GAAP Guidance | ||
(unaudited) | ||
Q1-24 | ||
GAAP Gross Profit | ||
Stock-based compensation | ||
Restructuring and other | ||
Total adjustments | ||
Non-GAAP Gross Profit | ||
Q1-24 | ||
GAAP Gross Margin | ||
Stock-based compensation | ~ | |
Restructuring and other | ~ | |
Total adjustments | ~ | |
Non-GAAP Gross Margin | ||
Q1-24 | ||
GAAP Operating Income | ||
Amortization of acquired intangible assets | ||
Stock-based compensation | ||
Net merger, acquisition and divestiture expense (income) | ~( | |
Restructuring and other | ||
Total adjustments | ~( | |
Non-GAAP Operating Loss | ( | |
Q1-24 | ||
GAAP Net Loss Per Diluted Share | ( | |
Amortization of acquired intangible assets | ||
Stock-based compensation | ||
Net merger, acquisition and divestiture expense (income) | ~( | |
Restructuring and other | ||
Income tax effect | ||
Total adjustments | ~( | |
Non-GAAP Net Loss Per Diluted Share | ( | |
Number of shares used in diluted per share calculations* | ~28.0 million | |
* Number of shares does not include impact from the at-the-market offering program announced on February 27, 2024 | ||
Certain numbers may not total due to rounding | ||
iRobot Corporation | |
Supplemental Reconciliation of Fiscal Year 2024 GAAP to Non-GAAP Guidance | |
(unaudited) | |
FY-24 | |
GAAP Gross Profit | |
Stock-based compensation | |
Restructuring and other | |
Total adjustments | |
Non-GAAP Gross Profit | |
FY-24 | |
GAAP Gross Margin | |
Stock-based compensation | ~ |
Restructuring and other | ~ |
Total adjustments | ~ |
Non-GAAP Gross Margin | |
FY-24 | |
GAAP Operating Loss | ( |
Amortization of acquired intangible assets | |
Stock-based compensation | |
Net merger, acquisition and divestiture expense (income) | ~( |
Restructuring and other | |
Total adjustments | ~( |
Non-GAAP Operating Loss | ( |
FY-24 | |
GAAP Net Loss Per Diluted Share | ( |
Amortization of acquired intangible assets | |
Stock-based compensation | |
Net merger, acquisition and divestiture expense (income) | ~( |
Restructuring and other | |
Income tax effect | |
Total adjustments | ~( |
Non-GAAP Net Loss Per Diluted Share | ( |
Number of shares used in diluted per share calculations | ~28.3 million |
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SOURCE iRobot Corporation
FAQ
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