iRobot Corporation (NASDAQ:IRBT) announced impressive third-quarter 2017 results on Tuesday after the market closed, highlighting sustained momentum for its core business in the United States and accelerating growth in the Europe, Middle East, and Africa (EMEA) geography. iRobot management also increased its full-year revenue and earnings guidance while reminding investors of the company's enormous long-term growth potential.

In the meantime, with shares of the home robotics specialist up around 6% in after-hours trading as of this writing, let's take a closer look at how iRobot started the second half of the year.

iRobot's Roomba 980 vacuum cleaning a floor with a woman doing dishes in the background


iRobot results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Growth


$205.4 million

$168.6 million


Net income

$22.1 million

$19.5 million


Earnings per share




Data source: iRobot Corporation. 

What happened with iRobot this quarter?

  • Similar to last quarter, iRobot's earnings this quarter included a $0.16-per-share discrete tax benefit related to this year's new stock compensation accounting standard, as well as an $0.08-per-share adjustment related to its original purchase price allocation for the recent acquisition of its Japanese distributor.
    • Even so, on an adjusted basis, iRobot still handily beat investors' expectations for earnings of $0.47 per share.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 2.5% to $36.4 million.
  • Consumer revenue grew 33.8% year over year in the U.S. to $87.6 million, driven by successful targeted marketing programs.
  • International consumer revenue climbed 14.9% year over year to $117.7 million, including growth of 31% in the EMEA region and 65% in Japan.
  • iRobot completed the acquisition of Robopolis, its largest European distributor, for $141 million in cash.
  • In September, iRobot announced a patent-dispute win with Micro-Star International (MSI), calling it the company's "first successful milestone on the enforcement effort iRobot initiated earlier this year." Note MSI is only one of several named companies in iRobot's patent-infringement complaint originally filed in April with the International Trade Commission.

What management had to say

iRobot chairman and CEO Colin Angle stated:

We delivered another outstanding quarter in which total revenue grew 22% over Q3 last year. Based on our Q3 results, and on our Q4 outlook fueled by continued positive momentum in the United States and in EMEA, where growth is accelerating, we are increasing our full-year 2017 financial expectations. [...] U.S. household penetration of robotic vacuum cleaners is still less than 10%, so there is plenty of runway domestically and even more overseas. With the leading global segment share, at a time when adoption is accelerating, we are in an excellent position to capitalize on the momentum to drive future growth.

Looking forward

More specifically, iRobot now anticipates the U.S. and EMEA to grow 40% and 45%, respectively, for all of 2017. That should mean full-year sales will be in the range of $870 million to $880 million, up from iRobot's previous guidance for $840 million to $860 million and representing roughly 33% to 34% growth over consumer revenue in 2016.

iRobot also now expects 2017 operating income of $55 million to $65 million (up from $50 million to $60 previously), with full-year earnings per share of between $1.65 and $2.00. The latter is a big boost from iRobot's previous guidance for 2017 earnings per share of $1.35 to $1.70, and even includes the anticipated dilutive per-share impact of $0.45 to $0.30 from its Robopolis purchase.

All things considered, from its solid quarterly beat to its freshly increased guidance and a potent reminder that its growth story is still in its early stages, this was a fantastic quarter for iRobot by any measure. And it's no surprise to see the market aggressively bidding up the stock in response.

Steve Symington owns shares of iRobot. The Motley Fool owns shares of and recommends iRobot. The Motley Fool has a disclosure policy.