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. filed this Amendment No. 1 on Form 10-Q/A to restate its unaudited financial statements for the three and nine months ended June 29, 2024.
The Audit Committee concluded on November 18, 2024 that the previously filed 2024 Form 10-Qs should no longer be relied upon. The restatement corrects goods and services expensed before related milestones were achieved, which accelerated cost of revenue and, because revenue is recognized on a percentage-of-completion basis, revenue. It also corrects revenue recognized on cost overruns on certain deployments that will not be billable, and a classification error within equity.
For the three months ended June 29, 2024, total revenue is restated to $470.3 milliona from $491.9 million as reported, and net loss is restated to $(26.7) million from $(14.2) million. For the nine months, total revenue is restated to $1.22 billion from $1.28 billion, and net loss to $(100.6) million from $(68.1) million. Adjusted EBITDA for the nine months is restated to $19.3 million from $51.7 million as reported.
The balance sheet at June 29, 2024 shows cash and cash equivalents of $870.5 millionb, up from $258.8 million at September 30, 2023, and marketable securities of zero versus $286.7 million a year earlier. Net cash provided by operating activities was $41.3 million for the nine months, and the filing cites $17.0 million of depreciation and amortization and $86.9 million of stock-based compensation among non-cash items. Remaining performance obligations were $22.7 billion, with the filing stating that a substantial majority relates to the Master Automation Agreement with Walmart Inc. and the Commercial Agreement with GreenBox.
Customer A accounted for 89.6%c of total revenue in the three months ended June 29, 2024, as restated. Management concluded that disclosure controls and procedures and internal control over financial reporting were not effective as of June 29, 2024 because of material weaknesses.
These relate to the timing of recognizing cost of revenue and to revenue recognition on non-billable cost overruns, which resulted in an overstatement of revenue. A remediation plan is in progress, including compensating controls, ERP enhancements, and training, and management stated it cannot assure when the weaknesses will be remediated.
02—Key points
Key Highlights
- Restatement reduces reported revenue: three-month total revenue is $470.3 million restated versus $491.9 million as reported, and nine-month total revenue is $1.22 billion restated versus $1.28 billion as reported.
- Net loss is larger after restatement: three-month net loss of $(26.7) million versus $(14.2) million as reported, and nine-month net loss of $(100.6) million versus $(68.1) million as reported.
- Restated nine-month gross profit is $149.2 million versus $181.7 million as reported, and restated gross profit margin is 12.2% for the nine months versus 14.1% as reported.
- Adjusted EBITDA for the three months ended June 29, 2024 is restated to $2.7 million from $15.2 million, and for the nine months to $19.3 million from $51.7 million.
- Cash and cash equivalents were $870.5 million at June 29, 2024, and net cash provided by operating activities was $41.3 million for the nine months.
- Remaining performance obligations were $22.7 billion at June 29, 2024, and the Company expects to recognize approximately 9% of them as revenue in the next 12 months.
- Management reported material weaknesses in internal control over financial reporting, and concluded internal control was not effective as of June 29, 2024.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2024, Symbotic lost $0.01.
- Revenue$470.3M100.0%
- Cost of revenue−$415.4M88.3%
- Gross profit$55.0M11.7%
- Operating costs−$92.6M19.7%
- Operating income−$37.6M8.0%
- Interest, other & tax$32.9M7.0%
- Net income−$4.7M1.0%
04—Financials
Financial Highlights
Figures from 10-Q/AQ3 FY2024filed December 4, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $470.34M$311.84M | +50.8% |
| Cost of Revenue | $415.37M$258.93M | +60.4% |
| Gross Profit | $54.97M$52.91M | +3.9% |
| R&D Expenses | $44.72M$48.84M | −8.4% |
| SG&A Expenses | $47.87M$46.07M | +3.9% |
| Operating Expenses | $92.59M$94.92M | −2.4% |
| Operating Income | -$37.62M-$42.01M | +10.4% |
| Net Income | -$4.68M-$4.35M | −7.7% |
| EPS (Basic) | $-0.05$-0.07 | +28.6% |
| EPS (Diluted) | $-0.05$-0.07 | +28.6% |
| Shares Outstanding (Basic) | 102.41M61.78M | +65.8% |
| Shares Outstanding (Diluted) | 102.41M61.78M | +65.8% |
05—Questions
Frequently Asked Questions
Why did Symbotic restate its quarterly financial statements?
The Company identified goods and services, mainly tied to specific milestone achievements, that were expensed before the related milestones were achieved, accelerating cost of revenue and, under its percentage-of-completion revenue method, revenue. It also found revenue recognition errors on cost overruns on certain deployments that will not be billable, and a classification error within equity.
How much did the restatement change reported revenue and net loss?
For the three months ended June 29, 2024, Systems revenue was reduced by $21.5 million, and total revenue is $470.3 million restated versus $491.9 million as reported. Net loss is $(26.7) million restated versus $(14.2) million as reported. For the nine months, total revenue was reduced by $61.0 million, to $1.22 billion from $1.28 billion, and net loss is $(100.6) million restated versus $(68.1) million as reported.
What are the material weaknesses and what is management doing about them?
Management concluded that it did not effectively design procedures and controls over the timing of recognizing cost of revenue, and did not effectively design and execute controls over revenue recognition on non-billable cost overruns, resulting in an overstatement of revenue. The remediation plan includes augmented compensating controls over receipt of goods and services, ERP system enhancements, employee training and organizational redesign, and compensating controls over revenue on non-billable cost overruns. Management stated it cannot assure when the weaknesses will be remediated.
How concentrated is Symbotic's customer base?
For the three months ended June 29, 2024, as restated, one customer, identified as Customer A, accounted for 89.6% of total revenue, compared with 89.2% in the prior-year quarter. For the nine months ended June 29, 2024, that customer accounted for 86.0% of total revenue. The filing states that a total or partial loss of this relationship could have a material impact on results.
What major sources of liquidity and commitments does the filing describe?
Cash and cash equivalents were $870.5 million at June 29, 2024. During the nine months, the Company received $158.7 million from Walmart's gross exercise of vested warrants and $258.0 million from an equity financing in March 2024, offset by $47.7 million of distributions to Symbotic Holdings LLC partners. Vendor commitments totaled $1.34 billion, of which $1.23 billion is due in less than one year.
06—Continue