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Commitments and Contingencies | 9 Months Ended
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Sep. 27, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings From time to time and in the ordinary course of business, the Company is subject to various claims, charges and litigation. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, which could materially affect our financial condition or results of operations. For the following litigation matter, a liability is not probable or the amount cannot be reasonably estimated and therefore accruals have not been made. On March 8, 2024, purported Company shareholder Dylan Das filed a putative class action in the U.S. District Court for the District of New Jersey against the Company and certain of its former officers, captioned Dylan Das v. iRobot Corporation, et al., No. 2:24-cv-02138. The parties agreed to transfer the case to the U.S. District Court for the District of Massachusetts, where the case is captioned In re iRobot Corporation Securities Litigation, No. 1:24-cv-11158. Following the appointment of a lead plaintiff, an amended complaint was filed on July 19, 2024. The complaint alleges violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder based on allegedly false and misleading statements and omissions concerning the likelihood of regulatory approval of the Amazon Merger and its impact on the Company's financial performance. The complaint seeks, among other things, unspecified compensatory damages, including interest, in connection with the Company's allegedly inflated stock price, attorneys' fees and costs, and unspecified equitable/injunctive relief. On September 3, 2024, the defendants filed a motion to dismiss with the Court. On January 27, 2025, the Court granted the defendants' motion to dismiss and therefore dismissed the amended complaint with prejudice. On February 24, 2025, the plaintiff in this matter appealed the Court's dismissal to the U.S. Court of Appeals for the First Circuit, where the case is captioned Premca Extra Income Fund LP v. iRobot Corporation, et al., No. 25-1192. On April 21, 2025, the plaintiff filed its opening appeal brief. On June 2, 2025, the defendants filed their response brief, and on July 3, 2025, the plaintiff filed its reply brief. Oral arguments were held on September 8, 2025. On June 8, 2024, purported Company shareholder Anthony Wren filed a shareholder derivative complaint in the U.S. District Court for the District of Massachusetts against the Company, certain of its current and former directors and officers, captioned Anthony Wren, derivatively on behalf of iRobot Corp. v. iRobot Corporation, et al., No. 1:24-cv-11498. The parties have filed a stipulation staying this action until final resolution of the motion to dismiss, including all appeals, in In re iRobot Corporation Securities Litigation, No. 1:24-cv-11158. On May 1, 2025, the U.S. District Court for the District of Massachusetts issued an order closing the case for administrative purposes without entry of judgment, and any party may move to reopen the case after the resolution of appellate proceedings regarding the motion to dismiss in In re iRobot Corporation Securities Litigation, No. 1:24-cv-11158. Given the uncertainty of litigation, the preliminary stage of the shareholder derivative action and the legal standards that must be met for, among other things, success on the merits, the Company cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action. On July 7, 2025, purported Company shareholder Vinayak Savant filed a putative class action in the U.S. District Court for the Southern District of New York against the Company and certain of its current and former officers, captioned Vinayak Savant v. iRobot Corporation, et al., No. 1:25-cv-05563. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder based on allegedly false and misleading statements and omissions concerning the Company's financial performance and ability to operate on a standalone basis following the termination of the Amazon Merger in January 2024. The complaint seeks, among other things, unspecified compensatory damages, including interest, in connection with the Company's allegedly inflated stock price, attorneys' fees and costs, and unspecified other further relief. Given the uncertainty of litigation, the preliminary stage of the case, and the legal standards that must be met for, among other things, class certification and success on the merits, the Company cannot estimate the reasonably possible loss or range of loss, if any, that may result from this action. On August 12, 2025, purported Company shareholder Anthony Wren filed a shareholder derivative complaint in the U.S. District Court for the Southern District of New York against the Company, certain of its current and former officers and directors, captioned Anthony Wren, derivatively on behalf of iRobot Corp. v. Gary Cohen, et al., No. 1:25-cv-06625. On September 4, 2025, another purported Company shareholder, Michael Alpert, filed a similar derivative complaint also in the U.S. District Court for the Southern District of New York and against the same defendants, captioned Michael Alpert, derivatively on behalf of iRobot Corp. v. Gary Cohen, et al., No. 1:25-cv-07532. On September 18, 2025, a third purported Company shareholder, Charles Gaudreault, filed a similar derivative complaint also in the U.S. District Court for the Southern District of New York and against the same defendants, captioned Charles Gaudreault, derivatively on behalf of iRobot Corp. v. Gary Cohen, et al., No. 1:25-cv-07774. On November 4, 2025, the Court consolidated these three derivative actions for all purposes under the case caption: In re iRobot Corporation Derivative Litigation, Lead Case No. 1:25-cv-06625-JHR-GS. Given the uncertainty of litigation, the preliminary stage of the shareholder derivative actions and the legal standards that must be met for, among other things, success on the merits, the Company cannot estimate the reasonably possible loss or range of loss, if any, that may result from these actions. Commitments to Suppliers The Company utilizes contract manufacturers to build its products and some of its accessories. These contract manufacturers manage the supply of components, capacity and resources to build products based on a forecasted production plan, which typically covers a rolling 12-month period. During the normal course of business, and in order to ensure adequate supply, the Company enters into purchase commitments with contract manufacturers and suppliers. In certain instances, these purchase commitments allow the Company the option to cancel, reschedule and/or adjust the supply requirements based on its business needs for a period of time before the order is due to be fulfilled. In some instances, these purchase commitments are not cancellable in the event of a change in demand or other circumstances, such as where the contract manufacturer and/or supplier has built products, semi-finished products or procured and/or ordered unique, iRobot-specific designs, and/or specific non-cancellable, non-returnable components based on the provided forecasts. If the Company cancels all or part of the orders, or materially reduces forecasted orders, in certain circumstances the Company may be liable to its contract manufacturers and/or suppliers for the cost of the excess components purchased by its contract manufacturers based on the forecasted production plan and the purchase terms of its component suppliers. The loss on purchase commitments is included in accrued manufacturing and logistics cost on the consolidated balance sheets (Note 8). Guarantees and Indemnification Obligations The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by the indemnified party, generally the Company’s customers, in connection with any patent, copyright, trade secret or other proprietary right infringement claim by any third party. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company had no liabilities recorded for these agreements as of September 27, 2025 and December 28, 2024, respectively. Warranty The Company provides warranties on most products and has established a reserve for warranty obligations based on estimated warranty costs. The reserve is included as part of accrued expenses (Note 8) in the accompanying consolidated balance sheets. Activity related to the warranty accrual was as follows (in thousands):
| Three Months Ended |  | Nine Months Ended
| September 27, 2025 |  | September 28, 2024 |  | September 27, 2025 |  | September 28, 2024
Balance at beginning of period | $ | 12,559 |  |  | $ | 19,765 |  |  | $ | 18,233 |  |  | $ | 24,625 |
Provision | 3,791 |  |  | 3,994 |  |  | 7,381 |  |  | 10,039 |
Warranty claims | (7,158) |  |  | (4,692) |  |  | (16,422) |  |  | (15,597) |
Balance at end of period | $ | 9,192 |  |  | $ | 19,067 |  |  | $ | 9,192 |  |  | $ | 19,067 |

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