Raymond James 11 th Annual North American Equities Conference
Forward Looking Statements Certain statements made in this presentation that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. irobot Corporation undertakes no obligation to update or revise the information contained in this presentation, whether as a result of new information, future events or circumstances or otherwise. This presentation contains various non-gaap financial measures as defined by SEC Regulation G, including Adjusted EBITDA, which we define as Earnings Before Interest, Taxes, Depreciation, Amortization, merger and acquisition expenses, restructuring expenses, net intellectual property litigation expenses and non-cash stock compensation expense. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP financial measures and the non-gaap financial measures are posted on the investor relations page of our web site at www.irobot.com. For additional disclosure regarding these and other risks faced by irobot Corporation, see the disclosure contained in our public filings with the Securities and Exchange Commission. 2
irobot The Robot Company Global Technology Company - Empowering people to accomplish more through practical robots Robotic technology solutions currently serving 3 market verticals: Home maintenance market Roomba, Scooba, Braava, Mirra Defense & Security SUGV, FirstLook, PackBot, Kobra Emerging video collaboration markets Ava 500, RP-VITA Huge addressable markets Formidable IP portfolio Market-leading brand recognition First mover advantage More than two decades of global robotic-technology market leadership 3
The Emerging Robot Industry Value/Cost New capabilities unlock new opportunities to cross the relevancy threshold Product Demonstration Time 4
Technology Strategy Navigation Near term focus 5
Internal R&D Prioritization Framework Technologies 20-25% irobot R&D Products 75-80% Navigation Manipulation Core Emerging Future Cloud Roomba AVA 500? PackBot RP-VITA Braava Other FirstLook Scooba Focused investment 6
Patent Portfolio Roomba 98 U.S. Patents* Covering Roomba Technology 188 International Patents* Covering Roomba Technology Reliability & UX, 7 Tier 1 58 Platforms & Cleaning, 18 Tier 2 61 Navigation, 68 Other, 5 Tier 3 29 Tier 4 28 * As of May 2014 Company-wide: 340 US and 400 International Patents 7
Home Robot Products Flagship product Driving irobot revenue growth NEW irobot Roomba 980 Vacuum Cleaning Robot More Than 14 Million Home Robots Sold Since 2002 Currently Sold in More Than 60 Countries 8
NEW irobot Roomba 980 The Power to Change the Way You Clean New Features: SMART: First Roomba to combine adaptive navigation with visual localization to clean for up to two hours 1, recharging and resuming as needed until it cleans an entire level of a home SIMPLE: irobot Smart phone HOME App gives users control over their Roomba 980 from anywhere, anytime CLEAN: AeroForce Cleaning System with Carpet Boost detects carpeted floors and provides 2X the cleaning performance 2 where it s needed most. irobot s most advanced Roomba 9
Huge Addressable Markets North America - $2.3 billion EMEA - $2.7 billion 15.4% 3.0% irobot 14.2% 8.6% irobot 81.6% Other Robots Traditional Vacuums 77.2% Other Robots Traditional Vacuums APAC - $2.3 billion 11.5% 6.7% irobot 81.8% Other Robots Traditional Vacuums $7.2 billion annual market opportunity Source: Vacuum Cleaners >$200 USD, 2014 retail prices (based on NPD, GfK, Euromonitor, irobot internal data) 10
Millions Robotic Vacuum Market $1,600 Robotic Vacuum $ Spent 100% Robotic Vacuum $ as % of total $ Vacuum Market $1,400 90% $1,200 $1,000 80% 70% 60% $800 50% $600 40% 30% $400 20% $200 10% 14.6% 15.7% 18.1% 20.0% $- 2011 2012 2013 2014 0% 2011 2012 2013 2014 Strong growth continues in robotic vacuum cleaning market Source: *GfK, NPD, Euromonitor, irobot data 2014 **Vacuum cleaners >$200/robotic vacuum revenues 11
Robotic Vacuum Global Retail $ Market Share North America EMEA 12.8% 3.3% 83.9% irobot Neato Others 2.4% 2.9% 8.3% 12.1% 12.2% 62.1% irobot Samsung LG Neato Miele Others APAC 3.1% 4.6% 5.7% 7.2% 8.4% 7.8% 63.1% irobot Sharp LG Toshiba Ecovacs Samsung Others Source: 2014 NPD, GfK, Euromonitor, irobot internal data, Robotic Vacuum Cleaners >$200 retail prices 12
Defense & Security Products 110 FirstLook 310 SUGV Compact, Rugged, Throwable 510 PackBot Defense & Security Fully Capable and Backpack-Portable 710 Kobra Ultimate Modularity Near Term Growth Drivers DoD Upgrades New Capabilities International Sales Next Generation Force-Multiplier 13
D & S A Worldwide Market Expanding markets and opportunities worldwide 14
Remote Presence Markets Navigate & Interact In Complex Real World Environments Video Collaboration Ava 500 Telemedicine RP-VITA Investing to improve scalability of solution 15
2015 Expectations $M (except EPS) FY'15* Q3'15* Revenue 625-635 143-146 YoY Growth % 12-14% 0-2% EPS$ $1.25 - $1.35 $0.20 - $0.24 EBITDA 85-90 17-19 Q2 2015 exceeded expectations *Expectations provided July 21, 2015 16
Financial Progression 14% 13% 487 557 630 * FY'13 FY'14 FY'15 $M Revenue Adjusted EBITDA Margin Revenue CAGR Note: 3yr Financial Targets provided in 2013 Mid to High Teen Revenue CAGR and High Teen Adjusted EBITDA Margin Driving Shareholder Value * Midpoint of expectations provided on July 21, 2015 17
Capital Allocation Priorities Build cash through strong OCF Evaluation of investment/acquisition opportunities Opportunistically purchase stock under expanded share repurchase program Cash generation to support further Robot industry investments 18
Investment Thesis Home Robots will drive irobot growth and profitability for the next couple of years Addressable markets are large and growing Strong balance sheet allows for acquisitions and stock repurchase irobot s foundational technologies enable sustainable competitive advantage Commitment to generating profitable growth and building shareholder value 19