iRobot (IRBT) Q1 Earnings and Revenues Miss Estimates

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iRobot Corporation IRBT reported lackluster first-quarter 2023 results.

The company’s adjusted loss in the reported quarter was $1.96 per share, wider than the Zacks Consensus Estimate of a loss of $1.56 per share. Also, the quarterly loss compared unfavorably with a loss of 87 cents recorded in the year-ago quarter.

Revenue Details

iRobot generated revenues of $160.3 million in the reported quarter, missing the Zacks Consensus Estimate of $241 million by 33.4%. On a year-over-year basis, revenues decreased 45.1% due to lower orders.

Sales derived from premium and mid-tier robots accounted for 88% of IRBT’s total robot revenues, higher than 86% in the year-ago quarter.

Sales generated from the e-commerce platform (representing 57% of the reported quarter’s revenues) decreased 50% year over year. The e-commerce platform includes online sources of retailers, IRBT’s app and website, as well as e-commerce websites. Direct sales to consumers were down 6% year over year to $38.3 million.

Total product units of 436 thousand shipped in the quarter reflected a year-over-year decrease of 55.2%, while average selling prices increased 20.7%. For vacuum products, revenues of $146 million reflected a decline of 43.6% from the year-ago quarter. Units shipped were 399 thousand, down 57.6% from the prior-year quarter. Revenues from mopping products decreased 66.1% to $14 million. Units shipped were 37 thousand, down from 109 thousand recorded in the year-ago quarter.

On a regional basis, iRobot sourced 44.9% of revenues from domestic operations and the rest came from the international arena. Domestic revenues totaled $72 million, reflecting a 53% decline from the year-ago quarter. International revenues moved down 36.4% to $88.3 million.

iRobot Corporation Price, Consensus and EPS Surprise

 

iRobot Corporation price-consensus-eps-surprise-chart | iRobot Corporation Quote

Margin Profile

In the quarter under review, iRobot’s cost of revenues decreased 32.9% to $123.7 million, representing 77.2% of revenues compared with 63.2% in the year-ago quarter. Adjusted gross profit was $37.9 million, down 62.3% year over year, while the adjusted gross margin decreased 1080 basis points to 23.7%.

Research and development expenses were $41.9 million, down 1.4% year over year. This accounted for 26.1% of revenues compared with 8.9% in the year-ago quarter. Selling and marketing expenses decreased 26.7% to $44.8 million. As a percentage of revenues, it was 27.9% for the reported quarter compared with 20.9% in the prior-year period. General and administrative expenses were $31 million, up 16% year over year. The figure mirrored 19.3% of the total revenue base compared with 9.1% in the year-earlier quarter.

In the first quarter, iRobot recorded an adjusted operating loss of $62.2 million against an operating income of $18.5 million in the year-ago period. The adjusted operating margin was (38.8%) versus (6.3%) in the year-ago quarter.