Symbotic Inc. Q3 FY2025 earnings call

• Revenue increased 26% year-over-year, with strong operational progress.
• Automation systems showing tangible results, with a record 6.5 million cases processed in a day.
• Made progress on ASR integration, identified sites for next-gen solution prototypes with installation starting early next year.
• Teleoperations capability reached a milestone with 0 manual repositioning at a large site.
• Debuted next-generation storage structure, increasing storage density, reducing on-site assembly parts by over 90%, and speeding case handling.
• Began 5 new system deployments and had 5 systems go operational, bringing total operational systems to 42.
• Phase 1 and Phase 2 deployments for largest customer showed improved time between start of installation and acceptance.

In the third quarter, revenue grew 26% year-over-year to $592 million. The backlog remained strong at $22.4 billion. Software revenue more than doubled year-over-year to $8.1 million, and operations services revenue grew 54% year-over-year to $24.9 million. System gross margin showed significant year-over-year improvement. Software maintenance and support gross margin exceeded 75%, and Operations Services had a slight profit.

• For the fourth quarter of fiscal 2025, expects revenue between $590 million and $610 million and adjusted EBITDA between $45 million and $49 million.
• Adjustment in timing of several previously planned deployments to support transition to next-generation storage structure, leading to less pronounced sequential growth in the fourth quarter.
• Anticipates similar impact on deployment schedules in the first half of 2026 as it adjusts to the new structure, but backlog remains strong.

Q: Quantify next-generation storage technology in terms of installation times and retrofit opportunity?

A: No retrofits expected from Walmart, new structure can run side-by-side with old, takes less room. Installation time line expected to reduce with new structure.

Q: Thoughts on stock-based comp glide path?

A: Glide path to continue with trend seen, related to talent acquisition and headcount increase.

Q: Drivers of software gross margins above 70%?

A: Benefit of scale with added acceptances and systems hitting complete, seeing benefit of scaling software team.

Q: Free cash flow commentary?

A: Free cash flow use of cash not related to new structure, due to timing of receipts; CapEx expected to step up over next couple of quarters.

Q: New starts trajectory?

A: New starts stepped down this quarter waiting for design finalization, expected to step up going forward with new structure design available.

Q: Impact on competitive environment?

A: Humanoid robots not a significant concern as Symbotic bots are fast, response to truck unloading tech could be an add-on to system.

Q: GreenBox update?

A: Installation ramp up expected, seeing revenue increase from GreenBox systems, sales team expansion to grow business.