Symbotic (SYM) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Total revenue for the three months ended December 28, 2024, was $486.7 million, a 35$359.9 million for the same period in 2023[151] - Systems revenue increased by 33% to $464.1 million, driven by 44 Systems in Deployment compared to 37 in the prior year[155] - Software maintenance and support revenue surged by 155$5.5 million, attributed to an increase in Operational Systems under support contracts from 15 to 29[156] - Operation services revenue rose by 70% to $17.1 million, reflecting an increase in Operational Systems and related contracts[157] - Gross profit for the three months ended December 28, 2024, was$80.0 million, up from $64.1 million, with Systems gross profit increasing by$18.5 million[158] - The total cost of revenue increased to $406.7 million, resulting in a gross margin of 16$43.6 million, a 3% increase from $42.1 million, with employee-related costs decreasing due to lower stock-based compensation[160] - Selling, general, and administrative expenses rose to$61.1 million from $47.0 million, reflecting increased operational costs[151] - Selling, general, and administrative expenses increased by$14.1 million, or 30%, to $61.1 million for the three months ended December 28, 2024, compared to$47.0 million for the same period in 2023[163] - The company incurred $3.8 million in business combination transaction expenses during the three months ended December 28, 2024, related to strategic acquisitions[173] Cash Flow and Financial Position - Free cash flow increased significantly to$197.7 million for the three months ended December 28, 2024, compared to a negative free cash flow of $33.1 million for the same period in 2023[173] - Net cash provided by operating activities was$205.0 million for the three months ended December 28, 2024, compared to a cash outflow of $30.2 million for the same period in 2023[178] - As of December 28, 2024, the company had a cash and cash equivalents balance of$903.0 million, sufficient to fund operating activities and strategic investments[187] - The company expects its current cash and cash equivalents, working capital, and forecasted cash flows from operations to be sufficient to meet foreseeable cash needs for at least the next 12 months[188] Operational Outlook - The company expects continued revenue growth from the Walmart MAA, with installations ongoing at all 42 regional distribution centers through fiscal year 2029[155] - Future capital requirements will depend on growth rate, spending for R&D, and potential acquisitions[189] Internal Controls and Compliance - The company has identified material weaknesses in internal control over financial reporting related to revenue recognition and cost of revenue recognition as of December 28, 2024[197] - Management has developed a remediation plan to address material weaknesses, which includes enhanced controls and employee training[200] - Management's evaluation of disclosure controls and procedures indicated they were not effective at the reasonable assurance level due to material weaknesses[196] - There have been no significant changes in critical accounting policies and estimates during the three months ended December 28, 2024[190] - As of December 28, 2024, the company had no off-balance sheet arrangements[191] - Management concluded that the consolidated financial statements present fairly the financial position and results of operations, despite the identified material weaknesses[198] Employee-Related Costs - The increase in employee-related costs of $5.5 million was primarily due to headcount growth to support system deployments and business transformation[163] Other Income - Other income, net rose by$1.6 million, or 26%, to $7.8 million for the three months ended December 28, 2024, primarily due to higher interest earned on invested cash balances[165] Adjusted Performance Metrics - Adjusted EBITDA for the three months ended December 28, 2024, was$17.9 million, compared to $8.1 million for the same period in 2023, reflecting improved operational performance[173]