What happened
Shares of iRobot Corporation (IRBT +0.00%) were up 23% as of 1:30 p.m. EDT Wednesday after the home robotics company reported stronger-than-expected second-quarter 2017 results, increased its full-year guidance, and announced the acquisition of its largest European distributor.
So what
iRobot's quarterly revenue grew 23.1% year over year to $183.1 million, including a more-than-45% increase in U.S. consumer revenue thanks in part to strong sales of Roomba products on Amazon Prime Day. That translated to adjusted earnings of $0.12 per share, which excludes a $0.15-per-share benefit from new accounting standards adopted earlier this year related to stock-based compensation. By contrast, Wall Street was looking for iRobot to report a quarterly loss of $0.28 per share on lower revenue of $176 million.
Image source: iRobot.
iRobot also launched its high-end Roomba 900 series robots in China during the second quarter, while at the same time introducing its lower-priced cloud-connected Roomba 890 and Roomba 690 models in the U.S., Europe, the Middle East, Africa, and China.
In addition, iRobot separately announced it has agreed to acquire its largest European distributor, Robopolis, for $141 million in cash, or roughly 0.9 times Robopolis' trailing-12-month revenue. The acquisition is expected to close in October 2017. Similar to iRobot's acquisition of its Japanese distributor last quarter, iRobot will be able to take advantage of a more direct go-to market strategy to accelerate growth by enhancing its distribution network and providing a more consistent brand message across Western Europe.
Now what
iRobot also increased its full-year guidance to call for 2017 revenue of $840 million to $860 million (up from $780 million to $790 million previously), including $25 million to $35 million in contributions from Robopolis. iRobot also now expects full-year 2017 earnings per share of $1.35 to $1.70 (compared to $1.45 to $1.70 per share previously) including a negative per-share impact of $0.45 to $0.30 from the acquisition.
Finally, iRobot Chairman and CEO Colin Angle promised the company would "reinvest a portion of the incremental profitability to capitalize on the strong U.S. and EMEA momentum and ensure our continued product leadership in a rapidly growing, competitive marketplace." iRobot will also make additional investments in research and development to accelerate its product roadmap ahead of planned new product launches next year.
