Symbotic Inc. (SYM) Q2 2025 Earnings Summary

Executive Summary

• Revenue of $549.7M grew 40% YoY; adjusted EBITDA of $34.7M more than tripled YoY, with gross margin expanding to 19.6% on improved deployment execution and mix .
• Q3 FY25 guidance calls for revenue of $520–$540M and adjusted EBITDA of $26–$30M; management noted the guide excludes tariff effects and expects a modest sequential margin step-down primarily from lower ASR contribution in Q3 .
• Record operational momentum: 10 system starts and 8 completes in Q2, taking operational systems to 37; backlog edged up to $22.7B; free cash flow was $249.0M and cash rose to ~$955M .
• Stock-relevant narrative: execution improvement and margin expansion are positives; near-term top-line guide below Q2 likely reflects starts timing and mix, with tariffs a gross margin drag despite pass-through revenue, and ASR development revenue stepping down in Q3 before re-ramping .

What Went Well and What Went Wrong

What Went Well

• “Our execution has improved, and our margins expanded” — CEO Rick Cohen; Q2 gross margin reached 19.6% vs 7.7% a year ago, with adjusted gross margin 22.2% .
• “We delivered a record number of system starts and completes” — CFO Carol Hibbard: 10 starts and 8 completes, installation-to-acceptance timelines ~2 months shorter on Phase 1 vs historical average despite larger systems .
• Strong cash generation: free cash flow of $249.0M in Q2 (cash from ops $269.6M) and cash balance increased to ~$955M .

What Went Wrong

• Sequential revenue guide down for Q3 ($520–$540M) primarily due to the smaller cohort of starts a year ago and lower near-term ASR development revenue; adjusted EBITDA margin implied ~100 bps down vs Q2 per management .
• Operating expenses stepped up in Q2 (R&D and SG&A tied to acquisitions and growth), with management signaling SG&A should step down by $4–$5M in Q3 but OpEx leverage remains an area of focus .
• Tariffs are a gross margin headwind: most contracts allow pass-through, which lifts revenue but compresses margin; primary exposure from Europe started in April, with mitigation efforts underway in supply chain .

Financial Results

Headline KPIs vs prior year and prior quarter

Segment revenue breakdown

Cash flow and backlog

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “Our execution has improved, and our margins expanded… we remain well-positioned to deliver increasing value to our stakeholders.”
• CFO: “Second quarter revenue grew by 40% year-over-year, and we delivered a record number of system starts and completes… Looking forward, we remain committed to delivering improved execution while investing to support our future growth and innovation.”
• CFO on tariffs: “Our guide… does not include the impact of tariffs… most of our contracts allow tariffs being passed through, you’ll see increases in revenue… but it will be a drag on gross margin” .
• CEO on technology roadmap: ASR enables bots for perishables/frozen; smaller structures accelerate installs; expanding product set across large system, break pack, and back-of-store modules .

Q&A Highlights

• Starts/completes trajectory: Starts remain lumpy but trend higher over coming quarters/years; Q2 marked 10 starts and 8 completes with shorter install-to-accept timelines .
• Margin puts/takes: Sequential EBITDA margin down ~100 bps in Q3 largely from lower ASR contribution; tariffs excluded from guide, pass-through revenue lifts top line but compresses margins .
• ASR revenue: Mid- to high single-digit % of Q2 revenue; development revenue in systems line; small recurring/service components; expect prototype build to ramp later .
• Free cash flow strength: Driven by timing of receipts and front-loaded contract cash; expected to be stable through year .
• OpEx outlook: R&D run rate solid; SG&A to step down by $4–$5M in Q3 after acquisition-driven step-up .

Estimates Context

• S&P Global Wall Street consensus data for quarterly revenue and EPS was unavailable for SYM for Q1–Q3 FY25 at the time of analysis; comparisons to estimates cannot be made. As a secondary yardstick, SYM beat its own Q2 FY25 guidance ranges on both revenue ($549.7M vs $510–$530M) and adjusted EBITDA ($34.7M vs $26–$30M) .
• With stronger execution and mix benefits, sell-side models may need to reflect higher adjusted gross margins and adjusted EBITDA into the back half, while considering Q3’s ASR-related mix headwind and potential tariff pass-through margin effects .

Key Takeaways for Investors

• Execution inflection: Shorter install-to-accept timelines and record starts/completes underpin margin expansion; this is a critical de-risking for the deployment model .
• Near-term guide reset: Q3 revenue/EBITDA guide below Q2 reflects cohort timing and ASR mix; watch for prototype milestones to re-accelerate ASR contribution in H2 .
• Tariffs: Contract pass-through moderates top-line risk but compresses margins; supply-chain offsets could mitigate some impact over time .
• Cash strength: Robust FCF and cash provide flexibility for R&D and growth investments while supporting scaling of EPC in-sourcing .
• GreenBox optionality: Early-stage but building leadership and sites; multi-tenant model could open new customer access and recurring revenue pathways .
• Technology moat: LiDAR/Vision tele-ops and data scale advantage improving reliability and install velocity; supports long-term margin and ROI narrative .
• Monitoring points: Q3 margin mix, SG&A step-down execution, backlog conversion cadence, new customer announcements, and any tariff-driven gross margin impacts .