Key Takeaways

• Symbotic, the Walmart-backed artificial intelligence (AI) warehouse technology company, warned Wednesday about accounting errors.

• Symbotic said it was delaying its annual report and revising its current-quarter outlook because of the accounting mistakes.

• Symbotic shares plunged after the news Wednesday, losing nearly 40% of their value in intraday trading.

Shares of Symbotic (SYM) cratered Wednesday after the artificial intelligence (AI)-driven warehouse technology company announced it was delaying its annual report and revising its current-quarter outlook after discovering "certain material weaknesses" in its financial reporting for the 2024 fiscal year ended Sept. 28.

The Walmart (WMT)-backed supply chain tech company reported that it would be delaying the report for its Form 10-K because it "requires additional time to complete its assessment of the financial impacts of correcting an error related to system revenue recognition and the impacts of that error on internal controls over financial reporting."

Symbotic said it initially had found occurrences "where goods and services, primarily relating to specific milestone achievements, were expensed prior to the time that the corresponding milestones were achieved." It noted that this "resulted in the acceleration of the recognition of cost of revenue."

Symbotic Found 'Errors in Revenue Recognition'

Symbotic said it also discovered "errors in its revenue recognition related to cost overruns that will not be billable on certain deployments, which additionally impacted system revenue recognized in the second, third, and fourth quarters."

It said that mistake affected gross profit, income (loss) before income tax, net income (loss), and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). In addition, Symbotic warned that its fourth-quarter and full-year 2024 results "should no longer be relied upon," and will be updated.

Symbotic said that based on these findings, it now sees first-quarter fiscal 2025 revenue of $480 million to $500 million, and adjusted EBITDA of $12 million to $16 million. On Nov. 18 when it posted fiscal fourth-quarter 2024 results, the company's revenue outlook for the next quarter was in the range of $495 million to $515 million, and adjusted EBITDA was forecast at $27 million to $31 million.

A year ago, the company reported record revenue, sending its shares skyrocketing.

Symbotic shares fell nearly 40% in recent trading, with the day's decline leaving the stock price down more than 55% for the year.