After the markets closed on Tuesday, iRobot (NASDAQ:IRBT) announced second-quarter 2019 results, including solid revenue growth that met the company's expectations and -- thanks to astute cost-management efforts -- significantly better-than-expected earnings.

But the home robotics specialist also tempered its full-year outlook on concerns over the ongoing impact of tariffs and the U.S.-China trade war, leaving shares down more than 16% in after-hours trading as of this writing.

iRobot management will shed more light on its performance in a conference call Wednesday morning. In the meantime, let's have a closer look at how it ended the first half.

iRobot's Roomba s9+ and Braava jet M6 robots next to a wall in a room.


iRobot results: The raw numbers


Q2 2019

Q2 2018



$260.2 million

$226.3 million


GAAP net income

$7.2 million

$10.5 million


GAAP earnings per share (diluted)




Data source: iRobot quarterly filings. GAAP = generally accepted accounting principles.

What happened with iRobot this quarter?

  • iRobot doesn't provide specific quarterly guidance, so while we don't usually pay close attention to Wall Street's expectations, most analysts were modeling significantly lower earnings of $0.03 per share on higher revenue of $268 million.
  • On a non-GAAP (adjusted) basis -- which excludes items like unusual tax adjustments, acquisition costs, and stock-based compensation -- iRobot's net income was $13.8 million, or $0.48 per share, down from $0.77 per share in the same year-ago period.
  • Domestic revenue grew 11.6% to $124.5 million.
  • International revenue grew 18.2% to $135.7 million.
  • As promised, iRobot launched two new products during the quarter, including its new Roomba s9+ robotic vacuum and the Braava jet m6 floor-mopping robot. The company still plans to launch Terra, its first-ever robotic lawn mower, later this year.
  • In June, iRobot acquired educational robot leader Root Robotics for an undisclosed sum.

What management had to say

iRobot Chairman and CEO Colin Angle noted the company achieved double-digit percent growth in every major geographic region, and credited the company's outsized profits to its decision to take "steps to adjust spending during the quarter."

Angle further called their recent new product launches "an important milestone in [iRobot's] plans to strengthen Roomba leadership, extend the portfolio beyond vacuuming, and advance our position in the Smart Home."

But he also lamented the impact of the ongoing U.S.-China trade war, stating:

Although we achieved our U.S. revenue target in the second quarter, we believe that the direct and indirect impacts of the ongoing U.S.-China trade war and the recently implemented 25% tariffs are likely to constrain U.S. market segment growth in the second half of the year below our expectations at the start of 2019. Given our results for the year to date and the anticipated impact of higher tariffs on domestic segment growth, we believe it is prudent to update our 2019 full-year expectations.

Looking forward

More specifically, iRobot now expects full-year 2019 revenue to range from $1.20 billion to $1.25 billion, good for year-over-year growth of 10% to 14% and down from its old target for growth of 17% to 20%. iRobot also lowered its outlook for 2019 operating income to be in the range of $75 million to $100 million (down from $108 million to $118 million before), and for earnings per share of $2.40 to $3.15 (down from $3.15 to $3.40 previously).

"Even as we operate in a higher-tariff environment in the U.S., 2019 is shaping up to be another successful year of double-digit revenue growth and impressive global segment leadership," Angle insisted. "Moving forward, we remain enthusiastic about the many attractive opportunities we see to advance key elements of our strategy that underpin our efforts to drive sustainable growth and shareholder value."

That's not to say iRobot's fortunes can't change for the better, particularly if revived in-person trade talks slated for next week between China and the United States are successful. In the meantime, however, given iRobot's cautious approach to modeling this year's domestic growth, the stock is understandably pulling back in response.