Symbotic Revises Revenue and Earnings Amid Accounting Errors and Delayed Reporting

WILMINGTON, Messe, November 27, 2024 – Symbotic Inc. (Nasdaq: SYM), a major developer of supply chain AI-adapted robotic solutions, announced significant accounting adjustments and the deferral of its annual report on Form 10-K for the year ending September 28, 2024. This information follows a notification of delay in the submission of Form 12b-25, indicating that more time is required to correct identified revenue accounting errors and their impact on internal controls over financial reporting.

Physical weaknesses in internal controls

The management of Symbotic found significant weaknesses in internal controls in its preliminary assessment of the financial information of Prosecutor 2024. These weaknesses stem from the inaccuracy of revenue and cost accounting processes. The company has taken corrective measures to improve its internal controls to avoid repetition of such errors. Symbotic plans to complete your financial review and submit late reports within 15 days allowed by the SEC.

Details of income recognition errors

Previously, in its November 18, 2024 revenue press release, Symbotic revealed cases where costs and revenues related to milestone projects were prematurely recognized. This deviation from its method of accounting for revenue as a percentage of the amounts resulted in accelerated recognition of revenues. Subsequently, on November 25, 2024, the company identified other errors related to non-reimbursable cost overruns in specific deployments. These emissions collectively reduced the major financial measures for fiscal year 2024, including system revenues, gross profit and adjusted EBITDA, from approximately $30 to $40 million.

Updating of financial guidelines

The accounting reviews led Symbotic to reaffirm its financial results for fiscal year 2024 and to review its outlook for the first quarter of fiscal year 2025. The company now forecasts first-quarter revenues from $480 million to $500 million, compared to the previous direction of $495 to $515 million. The adjusted AIAIB for the quarter is expected to be $12 to $16 million, compared to the previous forecast of $27 to $31 million. These adjustments take into account the continuing financial impact of deployment problems.

Market and stakeholder reactions

The announcement aroused great concern among investors, contributing to a sharp decline in Symbotic’s equity value. Analysts and shareholders expressed concern about the company’s financial oversight and the broader consequences of the material weaknesses revealed. This follows a broader trend in industry, as several technology companies have been carefully examined for similar reporting issues in recent years.

Transparency and compliance commitment

Symbotic reaffirmed its commitment to transparency and compliance, stressing its efforts to fill internal control gaps. In addition to submitting its late annual report, the company will amend its previous quarterly reports to reflect the corrected financial reports. Management assured stakeholders that these measures were intended to restore confidence and ensure the accuracy of future reports.

As part of its mediation process, Symbotic is reviewing its business processes to align with industry best practices. By prioritizing the improvement of its internal controls, the company aims to mitigate the risks associated with rapid growth and complex revenue structures.