Symbotic - $SYM - Earnings Analysis: Significant year-over-year revenue growth driven by system deployments.

Business Model

Symbotic generates revenue through the sale of AI-powered supply chain automation systems, including supporting software and maintenance services.

Revenue Sources

• Systems: Includes the sale of Symbotic's automation systems to retail, wholesale, and food & beverage companies. (84.8% of Q1 2025 revenue)
• Software Maintenance and Support: Recurring revenue from software subscriptions and support services provided to customers with operational systems. (1.1% of Q1 2025 revenue)
• Operation Services: Revenue generated from providing operational services and support at customer sites. (3.5% of Q1 2025 revenue)

Income Statement Analysis

• Total revenue decreased by 13.79% from Q4 2024 to Q1 2025, driven by a decrease in systems revenue.
• Gross profit decreased by 17% from Q4 2024 to Q1 2025.
• Operating income shifted from a profit of $10.9 million in Q4 2024 to a loss of $24.6 million in Q1 2025.
• Net income shifted from a profit of $15.9 million in Q4 2024 to a loss of $18.5 million in Q1 2025.
• Basic and diluted income per share shifted from a profit of $0.03 in Q4 2024 to a loss of $0.03 in Q1 2025.

Balance Sheet Analysis

• Total assets increased by 8.68% from Q4 2024 to Q1 2025, reflecting growth in current assets, particularly cash and cash equivalents.
• Total stockholders' equity decreased slightly by 0.35% from Q4 2024 to Q1 2025.
• Total liabilities increased by 11.21% from Q4 2024 to Q1 2025, primarily due to an increase in deferred revenue and accounts payable.

Cash Flow Analysis

• Net cash from operating activities was $205.0 million in Q1 2025 compared to -$99.4 million in Q4 2024, driven by timing of cash receipts
• Net cash used in investing activities decreased from -$45.4 million in Q4 2024 to -$25.3 million in Q1 2025.
• Net cash used in financing activities was -$3.9 million in Q1 2025 compared to $1.7 million Q4 2024
• Cash, cash equivalents, and restricted cash increased from $730.4 million at the end of Q4 2024 to $906.1 million at the end of Q1 2025.

Capital Allocation

Symbotic is focused on strategic acquisitions (Walmart's Advanced Systems and Robotics), joint ventures (GreenBox), and internal investments (R&D) to drive growth and expand its market opportunities. The company utilizes capital for system deployments, software development, and supporting customer operations. They balance growth investments with maintaining a strong balance sheet and generating free cash flow.

Management Commentary

In the first quarter, we continued to deliver high growth, while enhancing our technology position.

First quarter revenue grew 35% year over year to $487,000,000

Looking forward to the fiscal second quarter of 2025, we expect another quarter of at least 30% year-over-year revenue growth with expanding margins.

In Operations Services, we posted a negative gross profit as we continue to support certain sites by investing in additional resources to ensure customer success.

Overall Sentiment: Positive, with an emphasis on continued growth and expanding profitability, although acknowledging short-term challenges in Operations Services.

Recommendation

Rating: Hold

Reason for Rating: Symbotic demonstrates strong growth potential driven by its innovative technology and strategic partnerships, but ongoing operational challenges and a net loss in the latest quarter warrant a cautious approach.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/8/2025, 1:21:40 PM