Amazon to buy Roomba maker iRobot for $1.7b
Bezos empire continues to clean up, but did it pick the proper postulates?
Updated Megacorp Amazon wants to buy iRobot, a company that is best known for its Roomba autonomous vacuum cleaner.
In a statement published alongside its calendar second quarter financial results, iRobot confirmed Amazon had bid $61 per share in an all-cash transaction totalling around $1.7 billion.
Current iRobot CEO Colin Angle will stay on board after the sale, which is still pending shareholder and regulatory approval.
"Amazon shares our passion for building thoughtful innovations that empower people to do more at home, and I cannot think of a better place for our team to continue our mission," Angle said.
Amazon acquired Kiva Systems, a robotics startup, for $775 million, in 2012, and demoed an "autonomous mobile robot, which resembles a Roomba, earlier this year. Now it's gone direct to the source, bought iRobot, and can further drill its way into people's lives and homes. Tens of millions Roombas have been sold, all mapping out homes and snuffling their way around rooms and furniture.
iRobot introduced the Roomba in 2002. Most recently, the company released iRobot OS, which expanded on its existing Genius Home Intelligence platform with new automations and other features. New home automation capabilities are right up Amazon's lane, and the purchase of iRobot will mean Alexa also gets more smart home data to draw from.
Roomba gets relief
The sale is likely to relieve iRobot, whose second-quarter financial results point to massive losses.
Among the bad news in iRobot's financial report was that revenue for the quarter plunged to $255.4 million versus $365.6 million in Q2 2021.
The company said that its Q2 revenue generated via ecommerce declined 35 percent compared to the same quarter last year, and direct-to-consumer sales showed a 12 percent decline in the same timeframe.
iRobot's GAAP operating losses for the first six months of 2022 were $87.2 million; in the same period last year it posted a GAAP operating income of $3.3 million.
The company is also hemorrhaging cash, cash equivalents and short-term investments: At the end of 2021 iRobot had $234.5 million on hand, and by April 2nd of this year was down to $113.5 million. As of July 2, the Roomba maker is down to $63.4 million.
To make matters worse, the company's inventory balance was also more than $100 million higher than the same time last year. iRobot said its weaker performance "was primarily impacted by unanticipated order reductions, delays and cancellations from retailers in North America and EMEA, and, to a much lesser extent, lower-than-anticipated direct-to-consumer (DTC) sales."
iRobot said it plans to restructure operations to save money, which will involve not only rebalancing resources, but also shifting "certain non-core engineering functions to lower-cost regions." iRobot said its moves will reduce headcount by 140 employees, or approximately 10 percent of its workforce.
In light of the sale, iRobot said it wouldn't hold a Q2 earnings call, it had withdrawn its 2022 financial expectations and long-term targets and was suspending its practice of providing financial guidance.
iRobot told The Register it couldn't comment on details of the sale, so we were unable to determine whether Roomba vacuums will continue to offer support for Siri and Google Assistant, how iRobot's data collection policies may change under Amazon, when the deal will close, or how iRobot's restructuring will proceed after the sale. iRobot referred us to Amazon, who has yet to respond. ®
Updated at 16.07 UTC on 5 August 2022 to add:
Following publication of this article, Amazon sent us a statement:
We have no plans to operate iRobot differently than how they operate today in regards to interoperability. iRobot offers products that are compatible with other voice assistants. We believe partners and customers should have more choices and pick the solutions that work best for them, and we have no plans to discontinue these partnerships.