Last night, consumer robot designer and manufacturer iRobot (IRBT 106.33, +18.43 +21.0%) announced better than expected Q2 earnings and revenues and guided FY17 earnings and revenues higher than expected in addition to announcing an acquisition. Shares have made new all-time highs on the news.
Getting right into it, the company most known for its in-home cleaning robot “Roomba” reported Q2 earnings of $0.27 per share on revenues which grew about 23.2% compared to last year to about $183.14 million.
Q2 was aided by results in the U.S., where consumer revenue grew more than 45% year over year. On July 11, 2017, Amazon Prime Day and the biggest selling day in Amazon's history, the company announced it sold more than twice the volume sold on Prime Day in 2016, which was twice what the volume sold in 2015. The Roomba 652 was ranked #1 in robotic vacuum cleaners, #1 in all floor care and #2 in all home & kitchen for 2017 Prime Day.
Based on the Q2 results, and the company’s outlook for the rest of 2017, fueled by positive momentum in the United States and EMEA, they are increasing their full-year 2017 financial expectations. The company now expects 2017 revenue of $815-825 million, operating income of between $67-75 million, and EPS of between $1.80-2.00. Including the Robopolis deal, also announced last night, IRBT sees FY17 revenues between $840-860 million on EPS in the range of $1.35-1.70.
IRBT’s increased expectations reflect their increased confidence that U.S. and EMEA momentum will continue and that full-year revenue in those regions will grow roughly 30% and high-teens percent respectively.
As mentioned, IRBT announced last night a deal to purchase privately-held Robopolis SAS for $141 million. Robopolis has been a distributor of IRBT products since 2006 and sells across seven key areas in Western Europe, including Germany, Spain, France, Belgium, Austria, Portugal and the Netherlands. To put that into perspective, Robopolis represented nearly half of IRBT’s EMEA revenues in 2016.
The deal is expected to close in October 2017 and is expected to contribute incremental revenue of about $25-35 million in 2017. The company also expects the acquisition to be between ($0.45) - ($0.30) dilutive in 2017. Beginning in 2018, the acquisition is expected to generate incremental revenue and higher earnings per share.