iRobot enjoyed a successful launch of its Braava jet floor-mopping bot in Asia in Q3. Image source: iRobot Corporation.

Thanks to yet another better-than-expected quarterly report, iRobot Corporation (IRBT -0.11%) stock briefly touched a new all-time high on Wednesday before closing up more than 11%. Let's dig in to see what drove the home robotics specialist's latest quarterly beat.

iRobot results: The raw numbers


Q3 2016 Actuals

Q3 2015 Actuals

Growth (YOY)


$168.6 million

$143.6 million


Net income

$19.5 million

$12.8 million


Earnings per share




Data source: iRobot Corporation. YOY = year over year. 

What happened with iRobot this quarter?

  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 37.1% year over year, to $35.5 million.
  • iRobot's guidance called for lower third-quarter revenue of $155 million to $160 million, earnings per share of $0.40 to $0.45, and adjusted EBITDA of $25 million to $28 million.
  • Last year's third quarter included $6.2 million in revenue from the defense and security (D&S) business, which iRobot sold on April 4. No D&S revenue was recognized this quarter.
  • Consumer robot revenue grew 23% year over year, to $168 million, including:
    • 13.3% year-over-year growth in domestic home robot sales, to $65.5 million, driven by strong demand for iRobot's high-end Roombas.
    • 30.2% growth in international revenue, to $102.5 million, significantly greater than expected in part as iRobot received orders from its new Chinese distributor in the third quarter for Braava jet and Roomba products originally expected to be delivered in Q4.
  • China sell-through was up 70% year over year, and quarterly revenue more than doubled there as iRobot completed its first quarter under a new distribution model in the region.
  • Revenue in Japan -- which is still iRobot's largest international market for now -- increased modestly year over year during the quarter, with the Braava jet floor-mopping robot quickly becoming iRobot's No. 1-selling SKU in the country.
  • The $699 Roomba 960, the second in the 900 series Roomba line, was introduced, as a more affordable option compared with the high-end $899 Roomba 980.
  • The iRobot HOME App became availablem for both new and existing Braava jet-mopping robot customers.
  • The previously funded $85 million accelerated stock-repurchase program, announced in April, ended, as the company bought back roughly 2.3 million shares.
  • The quarter ended with $203 million in cash and investments.

What management had to say

As Colin Angle, iRobot's co-founder and CEO, added:

Our third-quarter performance was outstanding. We delivered revenue and profitability exceeding our expectations. Based on our Q3 results and the excellent momentum we have going into the holiday season, created by our successful marketing programs, we are increasing our full-year financial expectations for the second quarter in a row. [...] We are very excited about our results year-to-date and the outlook for the fourth quarter as our successful marketing programs continue to drive demand generation in the U.S. and overseas. It is very satisfying that, in this transformative year, our current full-year expectations are well above those we provided in February.

Looking forward

More specifically, for the current quarter, iRobot expects revenue of $202 million to $207 million, adjusted EBITDA of $22 million to $26 million, net income of $10 million to $13 million, and earnings per share of $0.36 to $0.44.

And for the full year, iRobot now expects revenue of $650 million to $655 million, up from previous guidance of $640 million to $645 million; adjusted EBITDA of $88 million to $92 million, up from $85 million to $90 million previously; net income of $38 million to $41 million, up from $36 million to $40 million; and net income per share of $1.36 to $1.44, up from the prior range of $1.26 to $1.40.

In the end, it's evident that iRobot's decision to refocus its business exclusively on the fast-growing home robotics market is paying off handsomely. As the company continues to innovate and expand both its product line and geographic reach, I suspect today's pop will be but a blip on the radar in the context of iRobot's long-term potential.