01—Abstract
Summary
Summary of the 10-Q/A filed December 4, 2024. Cited figures are marked; the original filing is the authoritative source.
Symbotic Inc. (SYM) filed this Amendment No. 1 on Form 10-Q/A to restate its unaudited condensed consolidated financial statements for the three and six months ended March 30, 2024, originally filed May 7, 2024.
The restatement corrects goods and services, primarily tied to specific milestone achievements, that were expensed before the milestones were achieved, which accelerated cost of revenue and, because revenue is recognized on a percentage-of-completion basis, accelerated revenue. It also corrects revenue recognition errors on cost overruns on certain deployments that will not be billable, and a classification error within equity. The Audit Committee concluded on November 18, 2024 that the financial statements in the related 2024 Forms 10-Q should no longer be relied upon.
As restated, total revenue for the three months ended March 30, 2024 is $393.3 milliona, versus $424.3 million as reported, and the net loss is $(54.8) million, versus $(41.0) million as reported. For the six months, total revenue is $753.3 million (previously $792.8 million) and the net loss is $(73.9) million (previously $(53.9) million). Restated Adjusted EBITDA for the three months is $8.5 million, versus $22.5 million as reported.
Cash and cash equivalents were $901.4 millionb and marketable securities were $50.0 million at March 30, 2024. Management concluded that disclosure controls and internal control over financial reporting were not effective, citing two material weaknesses. Remaining performance obligations were $22.7 billion at March 30, 2024, with a substantial majority tied to the Walmart Master Automation Agreement and the GreenBox Commercial Agreement.
One customer accounted for 85.3%c of revenue for the three months ended March 30, 2024. The company states that it expects to cease to be an emerging growth company as of the end of fiscal year 2024.
02—Key points
Key Highlights
- Restated total revenue for the three months ended March 30, 2024 is $393.3 million, down from $424.3 million as originally reported; six-month revenue is restated to $753.3 million from $792.8 million.
- Restated net loss for the three months ended March 30, 2024 is $(54.8) million, compared with $(41.0) million as reported; six-month net loss is $(73.9) million versus $(53.9) million.
- Restated Adjusted EBITDA for the three months ended March 30, 2024 is $8.5 million, versus $22.5 million as originally reported.
- Management identified two material weaknesses in internal control over financial reporting, related to timing of cost of revenue recognition and revenue recognition on non-billable cost overruns, and concluded disclosure controls were not effective.
- Cash and cash equivalents of $901.4 million and marketable securities of $50.0 million at March 30, 2024, following $258.0 million from a Class A equity offering and $158.7 million from Walmart's warrant exercise during the six months.
- Remaining performance obligations were $22.7 billion at March 30, 2024, with a substantial majority tied to the Walmart Master Automation Agreement and the GreenBox Commercial Agreement.
- One customer accounted for 85.3% of total revenue for the three months ended March 30, 2024, and 80.5% of accounts receivable at March 30, 2024.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2024, Symbotic lost $0.02.
- Revenue$393.3M100.0%
- Cost of revenue−$363.1M92.3%
- Gross profit$30.2M7.7%
- Operating costs−$95.1M24.2%
- Operating income−$64.9M16.5%
- Interest, other & tax$56.1M14.3%
- Net income−$8.8M2.2%
04—Financials
Financial Highlights
Figures from 10-Q/AQ2 FY2024filed December 4, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $393.33M$266.85M | +47.4% |
| Cost of Revenue | $363.11M$224.01M | +62.1% |
| Gross Profit | $30.22M$42.85M | −29.5% |
| R&D Expenses | $46.46M$49.67M | −6.5% |
| SG&A Expenses | $48.65M$50.90M | −4.4% |
| Operating Expenses | $95.11M$100.56M | −5.4% |
| Operating Income | -$64.89M-$57.72M | −12.4% |
| Net Income | -$8.81M-$6.12M | −44.0% |
| EPS (Basic) | $-0.09$-0.10 | +10.0% |
| EPS (Diluted) | $-0.09$-0.10 | +10.0% |
| Shares Outstanding (Basic) | 93.04M60.50M | +53.8% |
| Shares Outstanding (Diluted) | 93.04M60.50M | +53.8% |
05—Questions
Frequently Asked Questions
What was restated and why?
The company restated its March 30, 2024 quarterly financial statements because goods and services tied to specific milestones were expensed before the milestones were achieved, accelerating cost of revenue and, under percentage-of-completion accounting, revenue. It also corrected revenue recognition errors on cost overruns on deployments that will not be billable, and a classification error within equity.
How did the restatement change reported results?
For the three months ended March 30, 2024, total revenue decreased from $424.3 million to $393.3 million, gross profit fell from $44.2 million to $30.2 million, and net loss increased from $(41.0) million to $(54.8) million. Restated Adjusted EBITDA is $8.5 million compared with $22.5 million as reported.
What are the material weaknesses and what is the remediation plan?
The company did not effectively design controls over the timing of cost of revenue recognition and did not effectively design and execute controls over revenue recognition for non-billable cost overruns, which resulted in an overstatement of revenue. Remediation includes augmented compensating controls over goods and services receipts, ERP enhancements, employee training and organizational redesign, and compensating controls over non-billable overruns. Management stated it cannot assure when the weaknesses will be remediated.
How much liquidity does the company have and what drove the change?
At March 30, 2024, the company had $901.4 million in cash and cash equivalents and $50.0 million in marketable securities. Operating cash flow was $(9.1) million for the six months, while investing activities provided $235.5 million, mainly from $290.0 million in maturities of U.S. Treasury securities, and financing activities provided $416.9 million, including $258.0 million from a Class A equity issuance and $158.7 million from Walmart's warrant exercise.
How concentrated is the customer base?
One customer accounted for 85.3% of total revenue for the three months ended March 30, 2024 and 83.7% for the six months. That customer represented 80.5% of accounts receivable at March 30, 2024. The filing identifies Walmart's Master Automation Agreement as the main driver of remaining performance obligations.
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