The stock of iRobot Corp. tumbled 35% early Wednesday to put it on track for its biggest-ever one-day selloff after the maker of the Roomba robotic vacuum cleaner said there's substantial doubt about its ability to stay in business.

The last time the stock fell as much was Nov. 6, 2024, when it closed down 35.2%. The stock was headed for a record low, hovering just above $4.

Bedford, Mass.-based iRobot (IRBT) added going-concern language to the footnotes of its fourth-quarter earnings, which showed a wider-than-expected loss and revenue that fell short of expectations, as it struggles to stabilize the business.

The company has been in the midst of a restructuring for the last year and said it's now in active talks with its primary lender after amending an existing term loan.

The board has initiated a strategic review of the business that may include a sale or strategic transaction, after hiring Canaccord Genuity and BofA Securities and financial advisers, but has not set a timetable for a final decision.

On Tuesday, it announced the biggest product launch in its more than 30-year history in the hopes of regaining leadership in the category that it created, Chief Executive Gary Cohen said in prepared remarks.

"iRobot has defined the robotic floorcare category for more than 30 years, and we remain committed to growing and evolving our business across smart home categories amid a dynamic operating landscape," he said.

However, after extensive cost cuts that included reducing head count by more than 50%, along with supply chain and R&D changes, there's no guarantee the new products will succeed, he said. The list of uncertainties includes a cash-strapped consumer after a long period of inflation, current tariff uncertainty and competitive pressures.

"Given these uncertainties and the implication they may have on the company's financials, there is substantial doubt about the company's ability to continue as a going concern for a period of at least 12 months from the date of the issuance of its consolidated 2024 financial statements," the company said in a statement.

iRobot posted a net loss of $77.1 million, or $2.52 a share, for the quarter to Dec. 28, wider than the loss of $63.6 million, or $2.28 a share, posted in the year-earlier period. Adjusted for one-time items, it had a loss of $2.06 a share, wider than the FactSet consensus for a loss of $1.73 a share.

Revenue fell to $172.0 million from $307.5 million a year ago, also below the $181.0 million FactSet consensus.

By geography, revenue fell 47% in the U.S., 34% in Japan and 44% in EMEA.

Revenue was hurt by higher-than-anticipated promotional activity to spur holiday spending and sell-through ahead of the new product launch, the timing of orders from its largest customer during the holiday season, which was pulled forward to the third quarter, and competition.

-Ciara Linnane

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 12, 2025 08:29 ET (12:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.