Symbotic Inc. (SYM) Q1 2025 Earnings Summary

Executive Summary

Q1 FY25 revenue of $486.7M grew 35% YoY; adj. EBITDA of $17.9M and GAAP net loss of $18.5M. Cash rose to $903.0M on strong collections; 44 systems in deployment and 29 completed sites at quarter-end .
Results came in within the revised Q1 guidance (issued after the November restatement) for revenue ($480–$500M) and slightly above on adj. EBITDA ($12–$16M), but below the original Q1 guide from Nov 18 ($495–$515M revenue, $27–$31M adj. EBITDA) .
Q2 FY25 outlook: revenue $510–$530M and adj. EBITDA $26–$30M, implying at least 30% YoY growth and sequential gross-margin improvement while absorbing higher OpEx from acquisitions and scaling .
Management emphasized improved execution (insourcing EPC, shorter lead-time initiatives), software margin strength (>65%), and long-term runway (backlog ~$22.4B; APD store-level automation via the completed Walmart ASR acquisition). Near-term headwind: operations services gross margin drag due to additional site support .

What Went Well and What Went Wrong

What Went Well
- Revenue +35% YoY with 44 systems in deployment; software revenue more than doubled YoY with software gross margins “over 65%” in the quarter .
- Cash improved by $176M sequentially to $903M driven by AR collections; FCF $197.7M; adj. EBITDA $17.9M above the company’s internal forecast .
- CEO on tech positioning and Walmart ASR: “we see this acquisition as giving Symbotic arguably the industry's strongest collection of products, talent and IP for supply chain automation” .
What Went Wrong
- Operations Services posted a negative gross profit as Symbotic “invest[ed] in additional resources to ensure customer success”; management expects moderation from these elevated support levels but near‑term drag persists .
- Gross margin below long-term targets; systems GM improvement is gradual and management does not expect systems margin to exceed 20% in 1H FY25 .
- Internal control remediation continues after FY24 restatement; compensating controls and testing underway (no deficiencies noted in testing so far), but full remediation requires several sequential quarters .

Financial Results

Overall P&L and per-share

Metric	Q3 FY24	Q4 FY24	Q1 FY25
Revenue ($USD Millions)	$486.3	$564.6	$486.7
Gross Profit ($USD Millions)	$70.9	$96.4	$80.0
Gross Profit Margin (%)	14.6%	17.1%	16.4%
Net Income (Loss) ($USD Millions)	$(10.7)	$16.0	$(18.5)
EPS (Basic & Diluted, $)	$(0.02)	$0.03	$(0.03)
Adjusted EBITDA ($USD Millions)	$18.7	$42.4	$17.9

Revenue mix

Revenue ($USD Millions)	Q3 FY24	Q4 FY24	Q1 FY25
Systems	$466.5	$536.4	$464.1
Software Maintenance & Support	$3.5	$5.9	$5.5
Operation Services	$16.2	$22.2	$17.1
Total Revenue	$486.3	$576.8 / $564.6	$486.7

Cash and balance sheet highlights

Cash & Equivalents: $903.0M at Q1 FY25 end vs. $727.3M at Q4 FY24 end .
Free Cash Flow: $197.7M in Q1 FY25 (CFOA $205.0M; Capex $(7.4)M) .
Deferred revenue (current): $787.2M at Q1 FY25 end vs. $676.3M at Q4 FY24 end .

Non‑GAAP reconciliation (Q1 FY25)

Adjusted EBITDA of $17.9M adds back stock-based compensation $28.7M, D&A $6.9M, business combination expenses $3.8M, internal control remediation $3.1M, and equity-method investment $1.6M, among other items .
Adjusted gross profit $86.2M; Adj. GP margin 17.7% vs. GAAP 16.4% .

KPIs and backlog

KPI	Q4 FY24	Q1 FY25
Systems in Deployment	44	44
Completed Sites	25	29
Contracted Backlog	~$22.4B	~$22.4B

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 FY25	$495M–$515M (11/18/24)	$480M–$500M (11/27/24)	Lowered
Adj. EBITDA	Q1 FY25	$27M–$31M (11/18/24)	$12M–$16M (11/27/24)	Lowered
Revenue	Q2 FY25	—	$510M–$530M (2/5/25)	Initiated
Adj. EBITDA	Q2 FY25	—	$26M–$30M (2/5/25)	Initiated

Context/why:

The Q1 guide was reduced on Nov 27 due to identified revenue recognition errors and unbillable cost overruns that required FY24 corrections; company also disclosed material weaknesses and began remediation .
Q2 outlook embeds sequential gross-margin improvement but higher OpEx from acquisitions and scaling; modest early contribution from Walmart ASR development program .

Earnings Call Themes & Trends

Topic	Q-2 (Q3 FY24)	Q-1 (Q4 FY24)	Current (Q1 FY25)	Trend
Execution & EPC insourcing	Margin pressure from elongated construction schedules	Rebound to historical gross margin; record starts (9) and completes (4); begin EPC insourcing ramp	Insourcing contractors completed work; first EPC-by-Symbotic systems within 1–2 quarters	Improving execution; margin stabilizing
Software revenue/margins	Scaling	“Trend toward typical industry software margins”	Software revenue doubled YoY; software GP >65%	Positive mix shift
Operations Services	Mixed	Slight negative margin as resources added	Negative gross profit due to elevated site support; expected to moderate	Near-term drag
Backlog & RPO	—	Backlog ~$22.4B; Walmex adds in Q1	Backlog ~$22.4B; 11% RPO next 12 months in 10‑Q	Stable, converting
Walmart ASR/APD	—	Announced acquisition; strategic rationale	Acquisition closed; modest near-term revenue; ~$230M 1st year cash implies ~$200M revenue in FY25 (back‑loaded)	Long-term accelerator
Lead times & cycle	—	—	Average system cycle ~24 months; path to shorten but takes time	Gradual improvement
Tariffs & supply chain	—	Steel pass‑through clauses	China exposure immaterial; tariffs generally pass‑through; US-made components; some MX assembly	Managed exposure
Controls remediation	—	Restatement and controls review	Compensating controls implemented; testing encouraging; multi-quarter remediation	Progressing

Management Commentary

CEO strategy and tech positioning: “we see this [Walmart ASR] acquisition as giving Symbotic arguably the industry's strongest collection of products, talent and intellectual property for supply chain automation” .
CFO on Q1 drivers: revenue +35% YoY; recurring revenue up 80%+ YoY; software revenue doubled YoY; adj. EBITDA above internal forecast; cash up primarily from timing of receipts .
Margin roadmap: systems GM to improve gradually; “breaking 20% in the first half is optimistic”; software margin in 60s; Ops Services near-term drag .
Demand environment: more inquiries across categories; labor tightness supports automation demand; growing international interest (e.g., Walmex) .

Q&A Highlights

OpEx and scaling: Expect Q2 OpEx up $5–10M QoQ from growth investments and acquisitions; moderation thereafter between R&D and SG&A .
EPC insourcing: Contractors’ work completed ahead of schedule; first EPC-by-Symbotic systems to be completed “in the next quarter or so” .
Operations Services loss: Elevated resources to support large go‑lives; expect moderation but near-term drag persists .
Tariffs: Exposure to China immaterial; contracts generally allow pass‑through of tariffs/taxes; majority of products made in US; some bot assembly in Mexico .
Controls remediation: Compensating controls implemented (goods receipt, nonbillable cost recognition); testing showed no deficiencies; remediation requires several sequential quarters .
APD/Walmart ASR contribution: Modest Q2 revenue; FY25 back‑loaded; example framework “$230M cash drives ~$200M revenue” this year .

Estimates Context

S&P Global consensus estimates could not be retrieved at this time due to an access limit; therefore, comparison to consensus is unavailable. We benchmarked results to company guidance.
- Actual Q1 FY25 revenue $486.7M vs. revised guide $480–$500M and initial guide $495–$515M .
- Actual Q1 adj. EBITDA $17.9M vs. revised guide $12–$16M and initial $27–$31M .
Note: We attempted to pull Wall Street consensus from S&P Global but were unable to due to daily request limits; estimates unavailable.

Key Takeaways for Investors

Execution improving: backlog conversion steady, EPC insourcing progressing, and software margins scaling; near-term gross margin expansion remains measured, with systems margin unlikely to exceed 20% in 1H FY25 .
Mix is a tailwind: recurring software more than doubled YoY with >65% gross margins; as more sites go live, recurring revenue and margins should accrete .
Near-term drag manageable: operations services support costs weigh on gross margin but are strategic to ensure customer success and should moderate .
Cash and liquidity strong: $903M cash and positive Q1 FCF provide ample flexibility to fund R&D, integration of Walmart ASR, and scaling efforts .
Walmart ASR/APD is a long-term catalyst: modest FY25 revenue contribution but meaningful multi‑year opportunity as development transitions to scaled deployments .
Watch remediation and margin cadence: internal control remediation is progressing but needs multiple quarters; margin trajectory hinges on schedule adherence, cost controls, and ops services normalization .
Trading setup: Near-term stock drivers include Q2 margin progression vs. guide, EPC insourcing milestones, and any updates on GreenBox and APD development commercialization timeline .

Appendix: Additional Data

Selected Q1 FY25 non‑GAAP reconciliation items

Item	Q1 FY25 ($M)
Stock-based Compensation	$28.741
Depreciation & Amortization	$6.860
Business Combination Expenses	$3.802
Internal Control Remediation	$3.076
Equity Method Investment	$1.564
Adjusted EBITDA	$17.904

Restatement and revised Q1 guidance (Nov 27, 2024)

FY24 impact: lower system revenue, gross profit, income before tax, and adj. EBITDA by $30–$40M; Q1 FY25 revenue guide reduced to $480–$500M and adj. EBITDA to $12–$16M .

Backlog/RPO disclosure

Contracted backlog ~$22.4B; remaining performance obligation expected in next 12 months increased to ~11% per 10‑Q commentary on the call .