Symbotic Inc. (SYM) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a positive outlook: significant revenue growth is expected, and the company's next-gen technology promises higher margins. The Q&A revealed consistent shipment expectations and new market opportunities through the Fox acquisition. Despite some vagueness in management's responses, the company's strategic initiatives, including the Walmart opportunity and international expansion, suggest optimism. The market cap indicates a moderate reaction, but the overall sentiment leans towards a positive stock price movement in the next two weeks.
Key Financial Performance
Revenue Fiscal first quarter revenue reached $630 million, a 29% increase year-over-year. The growth was driven by the continued expansion of systems and deployment, the transition of systems from deployment to operational status, and ongoing progress in the paid development of a micro-fulfillment solution for e-commerce.
Net Income Achieved GAAP profitability with $13 million in net income, a significant improvement from a net loss of $17 million in the first quarter of fiscal year 2025. This reflects the continued strengthening of financial performance.
Adjusted EBITDA Adjusted EBITDA of $67 million, up significantly from $18 million in the first quarter of fiscal year 2025. This increase was due to stronger margins and continued cost discipline, resulting in a double-digit EBITDA margin for the first time.
Systems Revenue Systems revenue grew 27% year-over-year to $590 million. Growth was driven by strong start activity, disciplined project execution, and continued progress with the paid development program.
Software Revenue Software revenue grew 97% year-over-year to $10.9 million in the fiscal first quarter. This growth was attributed to the expansion of the operational systems base.
Operations Services Revenue Operations services revenue grew 68% year-over-year to $28.8 million. This was driven by the expansion of operational systems and process optimization.
Gross Margin Gross margin expanded both sequentially and year-over-year. Systems gross margin improved significantly due to structural operational enhancements, disciplined cost management, and the addition of the paid development program. Software maintenance and support also delivered further year-over-year gross margin expansion, benefiting from scale.
Cash and Cash Equivalents Finished the quarter with $1.8 billion in cash and cash equivalents, up from $1.2 billion in the fiscal fourth quarter. This increase was driven by the timing of cash receipts tied to project milestones, the signing of new projects, and $424 million in net proceeds from a successful follow-on offering.
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Operating Highlights
Next-generation storage solution: Expected to yield tangible economic benefits for customers and improve margins.
SymBots: Achieved a 25% increase in miles driven and transactions per bot daily compared to a year ago.
Fox Robotics acquisition: Enhances autonomous forklift solutions and aligns with strategy to orchestrate robots in supply chain.
E-commerce expansion: Strong execution with Walmart's online pickup and delivery centers, including technical and operational improvements in 19 stores.
Micro-fulfillment solution: Progress in paid development for e-commerce, with record financial results and prototype installations underway.
Revenue growth: Revenue grew by 29% year-over-year to $630 million in Q1 2026.
Operational systems: Processed over 2 billion cases and logged nearly 200 million miles in 2025.
Deployment improvements: Installation timelines improved, with 10 new systems added in Q1 2026.
Innovation investment: Investing in R&D and aligning efforts with revenue-generating activities.
Profitability focus: Achieved GAAP profitability with $13 million net income and $67 million adjusted EBITDA in Q1 2026.
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Risk or Challenges
Market Conditions: Potential risks from economic uncertainties or market conditions were not explicitly mentioned, but the company is focused on maintaining strong financial discipline and operational execution to mitigate such risks.
Regulatory Hurdles: No explicit mention of regulatory challenges in the transcript.
Supply Chain Disruptions: The company highlighted ongoing process improvements across its supply chain and implementation teams, suggesting a focus on mitigating potential supply chain risks.
Strategic Execution Risks: The company is heavily investing in innovation, including the acquisition of Fox Robotics and internal R&D efforts. While these investments are strategic, they carry inherent risks related to execution and achieving the desired outcomes.
Economic Uncertainties: The transcript did not explicitly mention economic uncertainties, but the company’s focus on cost discipline and financial performance suggests an awareness of potential economic risks.
Competitive Pressures: The company is actively working on product innovation and expanding its capabilities to maintain a competitive edge, which implies a recognition of competitive pressures in the market.
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Guidance & Outlook
Revenue Expectations: For the second quarter of fiscal 2026, revenue is expected to be between $650 million and $670 million. Sequential growth in the third quarter is anticipated to be similar to the second quarter, with more pronounced growth in the fourth quarter.
Margin Projections: Adjusted EBITDA for the second quarter of fiscal 2026 is expected to be between $70 million and $75 million, reflecting continued strong top-line growth and margin expansion. The company also expects to continue expanding EBITDA margins and delivering sustained GAAP profitability.
Market Trends and Business Segment Performance: The company is advancing its paid development of a micro-fulfillment solution for e-commerce, which is expected to drive future growth. Retailers are increasingly leveraging store footprints and localized presence to enhance order fulfillment speed through automation. The acquisition of Fox Robotics is expected to enhance the company's strategy of orchestrating robots to move goods through the supply chain.
Capital Expenditures and Investments: The company is investing in internal R&D efforts to drive higher performance across operational systems and has recently acquired Fox Robotics to enhance its capabilities in autonomous forklift solutions.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you elaborate on the impact of paid development on revenue and EBITDA, and how it might evolve throughout the year?
A:Paid development represented high single digits of total revenue last quarter and has now reached double digits in Q1. However, it is expected to be lumpy and not remain at this level in Q2.
Q:What is the current deployment timeline, and have there been improvements?
A:The overall deployment timeline remains at 2 years from announcement to operational status. However, the time from installation to operational acceptance has improved to an average of 10 months.
Q:Is the current R&D spend level a run rate, and how does it impact gross margins?
A:R&D spend declined in Q1 compared to Q4 due to more allocation to paid development. R&D spend will be lumpy, and Q2 is expected to see higher R&D OpEx. Annual R&D spend should remain relatively consistent.
Q:What is the composition of the 10 starts in the quarter?
A:The 10 starts include no micro-fulfillment deployments. They are a mix of traditional systems and other types, with one for Exol. Specific details were not disclosed.
Q:Has there been a shift in shipment trajectory expectations for the year?
A:The shipment trajectory remains consistent with prior guidance. Q3 and Q2 are expected to have similar growth, with a more pronounced sequential improvement in Q4 due to next-gen structure deployments.
Q:What are the implications of the Fox acquisition for revenue and margins?
A:Fox has 25 customers, many of whom are not Symbotic customers. The acquisition provides opportunities to enter new markets, particularly in dock automation. Revenue implications are not yet clear.
Q:What is the timeline for the $5 billion Walmart opportunity and marketing to other customers?
A:Prototypes for the next generation will be installed within the next 12 months, triggering the Walmart backlog. The addressable market is significantly larger than the current backlog.
Q:What is the status of the GreenBox site and customer interest?
A:The GreenBox site will be operational in 9-10 months. Customer contracts are being discussed, and interest has increased as tours are now available.
Q:How is Symbotic optimizing costs with modular components across bot generations?
A:Symbotic is designing modular components for different bot generations, such as the SymBot, stretch bot, and mini bot. These bots share software and hardware advancements like LiDAR and upgraded chips.
Q:What is the potential for Symbotic in downstream logistics?
A:Symbotic is exploring opportunities in unloading and loading containers, sequencing and stacking products, and addressing specific verticals like foodservice and hospitals.
Q:What is the progress on the Mexico site and pipeline for additional locations?
A:The Mexico site will be operational within 12 months. The customer is satisfied, and there are plans for multiple additional sites in Mexico and Central/South America.
Q:What is the progress on chilled and frozen offerings?
A:Symbotic is working on designs for perishables and expects to announce sites within a year or more. The new structure's density offers significant cost savings for customers.
Q:How much development revenue remains to be recognized?
A:A significant amount of development revenue remains, with prototypes expected to be completed within the calendar year.
Q:What is the outlook for operational services gross margin?
A:Operational services gross margin has improved and is expected to remain positive going forward.
Q:Will new starts improve every quarter this year?
A:New starts are expected to remain healthy in Q2 and Q3 but may drop off towards the end of the year.
Q:Is Symbotic exploring direct-to-consumer distribution centers?
A:Yes, Symbotic is exploring opportunities in direct-to-consumer distribution centers.
Q:What is left to automate in BreakPack systems?
A:BreakPack systems are evolving with new bots featuring LiDAR and improved capabilities. Applications include drugstores, convenience stores, and e-commerce.
Q:What is the outlook for free cash flow this year?
A:Free cash flow is expected to remain consistent with Q1 levels, with improvements as EBITDA grows.
Q:What are the implications of improvements in floor loading?
A:Symbotic is developing sequencing technology for small orders, which has applications in e-commerce and route deliveries.
Q:What is the focus of Symbotic's M&A strategy?
A:Symbotic is targeting acquisitions to expand customer interactions and address new markets, such as dock automation and pallet storage.
Q:What is the progress in expanding sales outside the U.S.?
A:Symbotic is focusing on Europe, Canada, and Central/South America, with increased efforts in Europe due to high real estate costs.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the composition of the 10 starts, revenue implications of the Fox acquisition, and the exact amount of development revenue remaining. Additionally, timelines for certain initiatives, such as chilled and frozen offerings, were vague.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI scale
Fox Robotics
Instructions reminder
Izzy result
Officer Symbotic
RD effort
Relations sir
Robotics leader
SymBots good
SymBots mile
Symbotic Financial
Walmart store
Webcast Symbotic
acquisition Fox
acquisition software
advantage store
automation objective
availability order
basis objective
benefit basis
bot site
calendar outbound
calendar travel
capability note
case calendar
case fact
category AI
cell case
center increase
center store
chain door
commerce front
commerce retailer
improvement generation
profitability
record
today program
volume
SYM Transcript
Symbotic Inc. (SYM) Q1 2026 Earnings Call Transcript
Positive2-5
The earnings call presents a positive outlook: significant revenue growth is expected, and the company's next-gen technology promises higher margins. The Q&A revealed consistent shipment expectations and new market opportunities through the Fox acquisition. Despite some vagueness in management's responses, the company's strategic initiatives, including the Walmart opportunity and international expansion, suggest optimism. The market cap indicates a moderate reaction, but the overall sentiment leans towards a positive stock price movement in the next two weeks.
Symbotic Inc. (SYM) Q4 2025 Earnings Call Transcript
Positive11-25
The earnings call summary and Q&A session indicate strong financial performance with improved margins, strategic partnerships (Nyobolt), and growth opportunities in Europe and healthcare. Despite some uncertainties in guidance and deployment adjustments, the company has strong backlog and revenue guidance exceeding historical trends. These factors suggest a positive outlook, supported by the market cap's moderate size, which could amplify stock price movements.
Symbotic Inc. (SYM) Q3 2025 Earnings Call Transcript
Positive8-7
The earnings call reveals strong financial performance with 40% revenue growth and a significant backlog of $22.7 billion. The acquisition of Walmart ASR and streamlined processes are expected to drive future growth. The Q&A session highlighted sustainable high software gross margins and operational improvements. While growth is expected to slow in the short term, long-term prospects are optimistic with new product opportunities. The company's strong cash position and potential for higher margins support a positive outlook. The market cap suggests moderate sensitivity to these developments, likely resulting in a 2% to 8% stock price increase.
Symbotic Inc. (NASDAQ:SYM) Q2 2025 Earnings Call Transcript
Positive5-8
The earnings call reveals strong financial performance with revenue up 40% YoY and improved net losses. Despite competitive and operational risks, the acquisition of Walmart's ASR is expected to enhance technology and margins, with a significant backlog indicating future revenue potential. The Q&A highlighted management's confidence in handling tariffs and operational improvements. However, lack of specific guidance details and competitive pressures are concerns. With a market cap of $3.6 billion, the positive financial outlook and strategic acquisitions are likely to result in a stock price increase of 2% to 8%.
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