iRobot Corporation (IRBT 3.27%) released stronger-than-expected second-quarter 2018 results on Tuesday after the market closed, detailing continued broad-based geographic growth and exceptional demand for its popular cleaning robot lines. Given its relative outperformance so far this year, the home robotics specialist also increased its 2018 outlook.
With shares up 18% in after-hours trading as of this writing, let's have a closer look at what iRobot accomplished over the past few months.
Image source: iRobot.
iRobot results: The raw numbers
| Metric |
Q2 2018 |
Q2 2017 |
Year-Over-Year Growth |
|---|---|---|---|
|
Revenue |
$226.3 million |
$183.1 million |
23.6% |
|
Net income |
$10.5 million |
$7.9 million |
32.5% |
|
Earnings per share |
$0.37 |
$0.27 |
37% |
Data source: iRobot.
What happened with iRobot this quarter?
- While we don't usually pay close attention to Wall Street's demands, iRobot's earnings arrived at more than than double the $0.18 per share predicted by consensus estimates. Revenue also beat expectations by roughly $6.6 million.
- Adjusted EBITDA increased 86.8% to $30.9 million.
- In its fourth straight year as a featured product during Amazon Prime Day in the U.S., Roomba sold out after doubling its Prime Day sales volume over last year. Roomba also enjoyed strong demand as featured Prime Day product in both the EMEA and Japan regions for the first time this year.
- Braava robot revenue climbed 50% year over year, driven by international demand.
- iRobot completed its previously announced $50 million stock repurchase program, buying back 800,000 shares at an average price of $62.57 per share.
- The company increased the size of its revolving credit facility to $150 million and extended its term to 2023, giving iRobot "additional flexibility" to invest in driving growth.
- Late last month, iRobot announced a favorable initial determination in its ITC patent-infringement case preventing the importation of certain robotic vacuums into the U.S. from companies including bObsweep, Hoover, and Shenzhen ZhiYi Technology Co.
What management had to say
iRobot Chairman and CEO Colin Angle said:
We delivered strong second-quarter revenue growth of 24% in Q2 2018 over Q2 2017, driven by growth across all major regions. EMEA and Japan saw significant year-over-year growth of 51% and 31%, respectively. EMEA growth was driven in part by the revenue uplift from our acquisition of our largest European distributor, which was closed at the beginning of Q4 2017. Shipments to support Q2 holidays in the United States drove domestic revenue growth of 15% over last year.
During the subsequent conference call, Angle further confirmed that iRobot remains on track for multiple new product launches in the second half. He wouldn't offer specifics on the products, but did note that the first launch will be "in a few weeks" and include iRobot's "next offering of high end innovation at lower price points." The second new product launch will occur later in the third quarter.
Looking forward
So, iRobot now expects fiscal-year 2018 revenue in the range of $1.06 billion to $1.08 billion (compared to $1.05 billion to $1.08 billion previously), and earnings per share of $2.30 to $2.50 (up from $2.15 to $2.40 before). During the call, management elaborated that it still anticipates full-year growth in the low 20% range for the U.S., as well as mid-teens percent growth in Japan. But it also now expects greater 30% to 35% growth from the EMEA region.
In the end, there was nothing not to like about this straightforward beat-and-raise scenario from iRobot, and it should come as no surprise to see the stock rocketing higher in response.
