Irobot
Case: iRobot: Finding the Right Market Mix?
Current Situation
A. Current Performance iRobot is a rapidly growing firm, producing both government/industry robots and household cleaning robots. Founded in 1990, iRobot’s mission has been to provide an innovative approach to both markets through the use of technology.
In 2011, iRobot generated more than $465 million in revenue and employed more than 600 of the robot industry’s top professionals, including mechanical, electrical and software engineers and related support staff. iRobot stock trades on the NASDAQ stock market under the ticker symbol IRBT. Gross profit has also risen dramatically. In 2006, profit was $82 million, while in 2010 profit reached $145 million. This is mainly due to an increase in revenue as expenses have climbed significantly. For example, in 2010 research and development expenses reached $25 million. iRobot has experienced a very healthy 13.3 percent revenue growth year over year. Revenue has increased from 189 million in 2006 to 401 million for 2010. Almost 90% of revenue comes from the combination of home cleaning products and tactical military robots. At the same time, iRobot receives 10% of its revenue for research and development contracts. More specifically, about 50 percent of total revenue comes from consumer products, while 40 percent comes from military products. This demonstrates a pretty balanced revenue stream of its consumer and military segments. However, this firm has experienced highs and lows in the stock market, dipping under its IPO of $24 in 2005 to below $10 in the wake of the recent financial crisis, and recovering in 2011 to a high of $39.
B. Corporate Governance
Board of Directors
➢ Colin Angle Chairman of the Board, CEO and Co-Founder
➢ Dr. Ronald Chwang Chairman and President, iD Ventures America, LLC
➢ George C. McNamee ➢ Andrea Geisser Senior Advisor, Zephyr Management
Current Situation
A. Current Performance iRobot is a rapidly growing firm, producing both government/industry robots and household cleaning robots. Founded in 1990, iRobot’s mission has been to provide an innovative approach to both markets through the use of technology.
In 2011, iRobot generated more than $465 million in revenue and employed more than 600 of the robot industry’s top professionals, including mechanical, electrical and software engineers and related support staff. iRobot stock trades on the NASDAQ stock market under the ticker symbol IRBT. Gross profit has also risen dramatically. In 2006, profit was $82 million, while in 2010 profit reached $145 million. This is mainly due to an increase in revenue as expenses have climbed significantly. For example, in 2010 research and development expenses reached $25 million. iRobot has experienced a very healthy 13.3 percent revenue growth year over year. Revenue has increased from 189 million in 2006 to 401 million for 2010. Almost 90% of revenue comes from the combination of home cleaning products and tactical military robots. At the same time, iRobot receives 10% of its revenue for research and development contracts. More specifically, about 50 percent of total revenue comes from consumer products, while 40 percent comes from military products. This demonstrates a pretty balanced revenue stream of its consumer and military segments. However, this firm has experienced highs and lows in the stock market, dipping under its IPO of $24 in 2005 to below $10 in the wake of the recent financial crisis, and recovering in 2011 to a high of $39.
B. Corporate Governance
Board of Directors
➢ Colin Angle Chairman of the Board, CEO and Co-Founder
➢ Dr. Ronald Chwang Chairman and President, iD Ventures America, LLC
➢ George C. McNamee ➢ Andrea Geisser Senior Advisor, Zephyr Management