Symbotic Inc (SYM) Q2 2025 Earnings Call Highlights: Robust Revenue Growth and Strategic Expansion

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Thu, May 8, 2025, 1:39 AM 4 min read

Revenue: Increased by 40% year-over-year to $550 million.
Net Loss: Reduced to $21 million from $55 million in the second quarter of fiscal 2024.
Adjusted EBITDA: $35 million, more than tripled from $9 million in the year-ago quarter.
Operational Systems: Total of 37 operational systems, doubling from the previous record of 4 systems completed in the quarter.
Software Revenue: Grew by over 160% year-over-year to $6.7 million.
Operations Services Revenue: Increased by 47% year-over-year to $29.6 million.
Backlog: $22.7 billion, up from $22.4 billion last quarter.
Gross Margin: Improved significantly on a sequential basis, with software maintenance and support margins exceeding 65%.
Cash and Equivalents: $955 million, up from $903 million in the first quarter.
Cash from Operations: $270 million in the quarter.
Capital Expenditures: $21 million.
Third Quarter Outlook: Expected revenue between $520 million to $540 million and adjusted EBITDA between $26 million and $30 million.

Warning! GuruFocus has detected 4 Warning Signs with SYM.

Release Date: May 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Symbotic Inc (NASDAQ:SYM) reported a 40% year-over-year revenue growth, reaching $550 million in the second quarter.
The company significantly improved its gross margins due to better project execution and cost control.
Symbotic Inc (NASDAQ:SYM) has a strong multiyear opportunity with a backlog of nearly $23 billion.
The acquisition of Walmart Advanced Systems and Robotics (ASR) has expanded Symbotic Inc (NASDAQ:SYM)'s product portfolio, including micro-fulfillment solutions.
The company has successfully reduced its net loss to $21 million from $55 million in the previous year, showcasing financial improvement.

Negative Points

Revenue guidance for the third quarter is expected to be lower, between $520 million to $540 million, indicating a sequential decline.
The company anticipates a decrease in adjusted EBITDA margin in the third quarter compared to the second quarter.
Operating expenses have increased due to acquisitions and investments, impacting overall profitability.
System starts and completions are expected to remain lumpy, which could affect revenue consistency.
The impact of tariffs is not included in the current financial guidance, which could pose a risk to future margins.

Q & A Highlights

Q: Rick and Carol, does Q2 foreshadow where you want to be in terms of system starts and completions? How do we think about system starts and completions given the ramp-up in Q2? A: Carol Hibbard, CFO: Our system starts will continue to be lumpy, as they depend on both us and our customers being ready. However, with our backlog, we expect the number of system starts to improve in the coming quarters and years.

Q: You're forecasting EBITDA margin down a bit sequentially in Q3 versus Q2 at the midpoint. Is there anything in the forecast for tariff-related impact? A: Carol Hibbard, CFO: The EBITDA guide for Q3 implies a slight decrease due to lower ASR business contributions. Our guide does not include tariff impacts, but tariffs will increase revenue as pass-through costs, affecting gross margins.

Q: Is the sequential revenue decline in Q3 due to the timing of acquisition impacting the P&L? A: Carol Hibbard, CFO: The primary driver for Q3 revenue is the number of starts from a year ago. Last year's Q2 and Q3 had the lowest system starts, impacting current revenue.

Q: Can you provide more details on the technology and innovation roadmap, particularly regarding perishables? A: Richard Cohen, CEO: We are developing bots for perishables and frozen goods, with demand growing. We're also working on making structures smaller, which accelerates installation and offers more to customers. Our product offerings are expanding, generating significant interest.

Q: How certain are you about passing through tariff costs to customers? A: Carol Hibbard, CFO: We are certain that these costs will be passed through. We've reviewed our contracts, and most allow for tariff pass-through, though it will be a drag on gross margin as it's pass-through revenue.

Q: Can you update us on the progress of GreenBox and potential new customers? A: Richard Cohen, CEO: With a new CEO, we're accelerating sales efforts and talking to early customers. Our first customer will be C&S at the later up site, with more interest as we expand to both coasts.

Q: How quickly can you integrate new perception technology into your systems, and how will it impact productivity? A: Richard Cohen, CEO: We have bots with LiDAR and Vision in warehouses, and we're seeing increased innovation and talent. We expect more reliable machines, fewer operators, and higher returns, enhancing system sales.

Q: Can you clarify the revenue contribution from ASR and its impact on future quarters? A: Carol Hibbard, CFO: ASR contributed a mid- to high single-digit percentage of revenue. As we develop prototypes over the next 8 to 12 quarters, ASR revenue will ramp up, contributing to system margins.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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