Symbotic Q2 2025 Earnings Call Transcript

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May 7, 2025
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Operator

and thank you for standing by. Welcome to the Symbotic Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would now like to hand the conference over to your first speaker today, Charlie Anderson, Symbotic Vice President of Investor Relations. Please go ahead.

Charlie Anderson
SVP, IR & Corporate Strategy at Enovix

Thank you. Welcome to Symbotic's second quarter of fiscal twenty twenty five financial results webcast. I'm Charlie Anderson, Symbotic's Vice President of Investor Relations. Some of the statements that we make today regarding our business operations and financial performance may be considered forward looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties.

Charlie Anderson
SVP, IR & Corporate Strategy at Enovix

Actual results could differ materially. Please refer to our Form 10 ks including the risk factors. We undertake no obligation to update any forward looking statements. In addition, during this call, we will present both GAAP and non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at ir.symbotic.com.

Charlie Anderson
SVP, IR & Corporate Strategy at Enovix

On today's call, we are joined by Rick Cohen, Symbiotic's Founder, Chairman, and Chief Executive Officer and Carol Hibbert, Symbiotic's Chief Financial Officer. These executives will discuss our second quarter fiscal year twenty twenty five results and our outlook, followed by Q and A. With that, I'll turn it over to Rick to begin. Rick?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Thank you, Charlie. Good afternoon, and thank you for joining us to review our most recent results. In the second quarter, we delivered strong results, both financially and operationally. Our revenue grew by 40% year over year, and our gross margins expanded significantly, reflecting our focus on project execution while controlling costs and delivering high quality deployments. Carol will give more detail on the level of improvements in her remarks, but at a high level, the changes we have made to improve our deployment processes are beginning to pay off.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

These include a more streamlined and predictable workflow and installation, closer coordination with contractors by in sourcing construction management, and a strong emphasis on quality management principles to minimize errors and rework, among others. With stronger project execution, we are well positioned to access future growth and are adding talent to do so. That includes Brian Alexander, our new Senior Vice President Commercial, who joined us recently from Hub Group, where he served in roles including Chief Operating Officer and Chief Marketing Officer, serving multiple Fortune 500 clients with specialized supply chain solutions. Additionally, Greenbox, our warehouse as a service joint venture with SoftBank, recently hired Ashrak Chaudhry as CEO. Ashrak joins Greenbox from Civa Logistics, where he oversaw the third largest contract logistics business in the world as its global managing director.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

GreenBox also began a third site during the quarter, and we remain excited about our prospects. During the quarter, we also closed our acquisition of Walmart Advanced Systems and Robotics, or ASR, which expands our product portfolio to include a micro fulfillment solution, both for ambient and perishable environments. Beyond this addition, we have compelling innovation on our roadmap to deliver even more value to our customers while also building upon the progress we've made to deploy systems more efficiently. I'm excited to share more in the coming quarters. In summary, Symbotic is in an advantageous position going forward.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

We have a strong multiyear opportunity with nearly $23,000,000,000 of backlog. Our margins have expanded due to improved execution, and we continue to attract impressive talent. I want to close my remarks by thanking our customers for their continued trust, our team for their strong execution, and our investors for their support of our company. Now Carol will discuss our financial results and outlook. Carol?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thank you Rick. Second quarter revenue grew 40% year over year to $550,000,000 with revenue growth driven by solid progress across our 46 systems in deployment, and we more than doubled the number of operational systems from a year ago. We also benefited from two months of contribution from the acquired Walmart Advanced Systems and Robotics. Higher revenues and forecasts, combined with improving gross margins, drove a reduction in our net loss of $21,000,000 in the second quarter versus $55,000,000 in the second quarter of fiscal twenty twenty four. Adjusted EBITDA in the quarter of $35,000,000 was also above our forecast and more than tripled year over year from $9,000,000 in the year ago quarter.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

In our second quarter, we began a record 10 new system deployments, which included one new green box site in Southern California intended for multiple tenants, along with multiple break pack deployments. We also completed eight systems in the quarter, doubling our previous record of four, bringing us to a total of 37 operational systems. As Rick mentioned, we are improving our installation performance. You have heard us talk in the past about total deployment timelines of roughly twenty four months, defined as time between the signing of a statement of work for a system to customer acceptance of that system. However, the portion of a deployment most in our control is the time between the start of its installation and its acceptance by a customer.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

This also happens to be where we see most of the cost in revenue recognition, which impacts our margin performance. The largest sample size we have for comparisons are the phase one deployments for our largest customer. In the second quarter, our installation to acceptance timelines were roughly two months shorter for phase one systems than our historical average, And notably, these systems were 15% larger in size than our historical average for phase one systems. Normalizing for size, which also equates to revenue, our improvement level is more than 30% better than our historical average. With the increase in operational systems, we saw our software revenue grow by over 160% year over year to $6,700,000 And operation services revenue grew 47% year over year to 29,600,000.0.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

In terms of the backlog, our backlog of $22,700,000,000 grew sequentially from $22,400,000,000 last quarter. This increase was primarily due to the addition of our development contract with Walmart associated with accelerated pickup and delivery, or APD, systems, offset by the revenue recognized. Turning to margins. System gross margin improved significantly on a sequential basis, as we gained the expected improvement from completing lower margin systems, while also improving our overall project execution, as both Rick and I highlighted. Revenue from Walmart ASR was also accretive to our system margins.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Gross margin on software maintenance and support again exceeded 65%, trending toward typical industry software margins as we gained scale. And in operation services, we swung back to a gross profit, to a more favorable mix due to training revenue associated with the large number of new systems that went live. We also saw modest benefits in the Walmart ASR acquisition, where we are now providing services for the existing APD sites in operation. Operating expenses were up sequentially due to acquisitions and the investments we are making to support our growth. We finished the quarter with cash and equivalents of $955,000,000 which increased from $9.00 $3,000,000 in the first quarter, primarily due from cash from operations of $270,000,000 in the quarter, offset by the $200,000,000 paid for Walmart ASR and $21,000,000 of capital expenditures.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Now turning to our outlook. For the third quarter of fiscal twenty twenty five, we expect revenue between $520,000,000 to $540,000,000 and adjusted EBITDA between $26,000,000 and $30,000,000 In summary, our execution has improved resulting in improved gross margin performance and we are investing to drive future growth and product innovation. With that, we now welcome your questions. Operator, please begin the Q and A.

Operator

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your questions, please press 11 again. Our first question comes from the line of Andy Kaplowitz of Citi.

Operator

Your line is now open.

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

Good afternoon, everyone.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Hello.

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

Rick

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

and Carol, I know one of the big focal points this year was scaling for growth. So does Q2 foreshadow where you want to be in terms of, I think you said 10 system starts, eight completions. And if it does, how do we think about system starts and completions given the ramp up in Q2? Carol, I know you said in the past it's lumpy, but should we assume that you've turned the corner, you continue to ramp up from here? And is the improvement really a function of getting your arms around and sourcing?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So thanks for the question, Andy. Our system starts will continue to be lumpy. So I do think the number that we start is a combination of ourselves as well as our customers being ready to go ahead and launch and demo in a new building or a new phase, and so it's a mutual decision between the two of us to go ahead and start. With that being said, we do see the trajectory with the backlog ahead of us that we will continue to see the number of system starts improve as we go through the coming quarters and the coming years.

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

Got it. And Carol, you're forecasting EBITDA margin down a bit sequentially in Q3 versus Q2 at the midpoint. Is there anything in the forecast for tariff related impact? Maybe it's mix. Can you talk about the puts and takes in margin going into the second half?

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

And do you have an estimate for tariff related expense or how you're thinking about it moving forward in terms of price versus cost?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Okay, yeah, you've got a lot wrapped up in that question. I'll start with the overall gross margin performance. So, this quarter's gross margin performance was driven by three key things. It was project mix. So, we had eight projects that we completed.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Many of those were our lower margin projects, and so those will be moving off. Overall project execution improved. We also had contribution, as I mentioned, from our ASR business, which is bringing accretive margins to our overall systems revenue. As I think about our EBITDA guide for 3Q would imply roughly 100 basis points down from what we just posted this quarter. Primarily the difference there is the ASR business for this quarter was higher than what we expect to see in the next quarter, and so some of that business, as we work through overall design, we'll see that ramp back up in the coming quarters when we start building prototypes.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

But you're seeing the impact of that, which is why we're at roughly 21% for the coming quarter. In terms of tariffs, our guide both for top line and for bottom line does not include the impact of tariffs. If I think about tariff impact for us, with most of our contracts allowing tariffs being passed through, you'll actually see increases in revenue associated with that, but it'll be a drag on gross margin because it's passed through revenue.

Andy Kaplowitz
Andy Kaplowitz
Analyst at Citigroup

Got it. So it'd just be dollar for dollar pass through.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yep.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thanks, Andy.

Operator

One moment for our next question. Our next question comes from the line of Nicole DeBlase of Deutsche Bank. Your line is now open.

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

Yes, thanks. Good afternoon,

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

guys.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Hello.

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

Just a follow on from Andy, as you guys are also kind of modeling revenue down sequentially in the third quarter, which is unusual from a seasonal perspective. Is that also to do with the timing of acquisition impacting the P and L? Or is

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

there something else going on there? So thanks for the question, Nicole. There is a little bit of impact, because we did have modest revenue this quarter associated with ASR. We'll see that drop a little bit in the next quarter. But the primary driver for our third quarter revenue is really a function of the number of starts that we had a year ago.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So if you remember, 2Q and 3Q last year were our lowest system starts, and we're now a year into where they would be really heavy in system implementation. And so that's the primary driver in terms of what you're seeing for our guide for the third quarter.

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

Okay, understood. And then with respect to the OpEx, so R and D and SG and A stepped up pretty significantly sequentially. Are we now kind of at a good R and D and SG and A run rate? Or should we expect further step ups in the second half?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

For our R and D run rate, I'd say that's a good run rate going forward. The SG and A run rate was higher this quarter primarily related to acquisition. So, our acquisition costs were higher in SG and A. You're going to see that step back down in the next quarter and see that flatten.

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

Okay, and any quantification of how much we should expect that to step down?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yes. I would expect somewhere between 4,000,000 and $5,000,000 of a step down in the SG and A OpEx.

Nicole Deblase
Nicole Deblase
Lead Analyst at Deutsche Bank

Thank you. I'll pass it on.

Operator

Thanks. One moment for our next question. Our next question comes from the line of Jim Ricchiuti of Needham and Company. Your line is now open.

James Ricchiuti
Senior Analyst at Needham & Company

Hi, thanks. Good afternoon. I wasn't sure if you gave this in your script. Did you say what ASR contributed in the quarter to revenue?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

No, we did not. Thanks for the question, Jim. So, are a single digit percent of revenue associated with ASR. We'll see that go ahead.

James Ricchiuti
Senior Analyst at Needham & Company

No, please, go ahead. I'm sorry to interrupt.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, and so as we build out the development program over the coming eight to twelve quarters, you'll see our revenue for ASR in back half of this year, early next year start ramping up as we start building prototypes.

James Ricchiuti
Senior Analyst at Needham & Company

Got it. That's helpful. And are you able to tell us what the installation time looks like for your large customer? I mean, you clearly are making progress there, and I know some of these are different, but is there any in rough terms, can you tell us what the installation to acceptance time looks like right now?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So we quantify from start or signature of a project to when we hit project acceptance, for about twenty four months. The install to acceptance, which is what we indicated where we have the most ability to impact, is about half of that time. So, what we saw this quarter is a couple month improvement. So, if you think we were at twelve months from install to accept, On a couple of the projects that we had this quarter, we saw two months shaved off of that.

James Ricchiuti
Senior Analyst at Needham & Company

Got it. Thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thanks, Jim.

Operator

One moment for our next question. Our next question comes from the line of Matt Summerville of D. A. Davidson. Your line is now open.

Matthew Summerville
Equity Analyst at D.A. Davidson

Thanks. I was hoping maybe you could talk a little bit more about your technology and innovation roadmap, Rick. You've obviously touched on the development of Perishable in the past. So maybe an update there and maybe some of the other projects you're able to talk about that you're working on, maybe some milestones you may be achieving along the way there with some of those things. And then I have a follow-up.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Yeah, thanks Matt. So with the ASR projects, which we're developing, we will have bots that can do both perishables and frozen, and that will eventually, we're now beginning to talk to people about actually building perishable warehouses for them. So that's on our roadmap, can't say exactly when that'll happen, but it's a lot sooner than it was two months ago. So there's demand for it, and people are very interested in that, and we have to do it for the back of the store, and so that's moving right along. And we're doing a couple of other things to make the structures smaller, which is giving us opportunities to talk to customers that want smaller systems, and also it actually will accelerate the installation of some of the bigger systems because we can actually put more into smaller space and get it built faster.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

So technology is moving right along, we're starting our second design of our break pack system. The first one is working well, the second one will be better. So we're now really able to offer three products. One is the big system, and that can come in anywhere from very very large to a couple of inbound and outbound cells on the smaller side. A break pack system can be large or small, and now we're talking about a third module which will be the, really, I mean a 15,000 foot system in the back of a store, or even we've had some people now come and say could you do a 30,000 foot system for us for special needs?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

So as our product offering is expanding, we're generating a lot of interest in that. And so we'll be going, the development will be continuing to speed up.

Matthew Summerville
Equity Analyst at D.A. Davidson

Thank you for that. And as a follow-up, Carol, I just want to be clear. The Walmart ASR revenue was a single digit millions or single digit percentage? Because if it's a single digit percentage, that could be anywhere from like $5,000,000 to $50,000,000 So, if you can maybe help us triangulate on that a little bit. And then also, if you guys can give an update on when you think you'll be able to make some announcements regarding potential green box tenants.

Matthew Summerville
Equity Analyst at D.A. Davidson

Thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So, yeah, to clarify, ASR was single digit percentage. I'd say that's mid to high single digit percentage of

Matthew Summerville
Equity Analyst at D.A. Davidson

Thanks, and then the

Matthew Summerville
Equity Analyst at D.A. Davidson

green box question.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Yeah, the green box, we now have a CEO, and so we're accelerating our sales efforts, looking at a number of strategic opportunities, and now talking to early customers about involvement in Greenbox. Our first customer will be the Lathrop site, and that will be, CNS will be the very first customer, plus we may be able to add some other customers onto that site compared to incorporating all the capacity that's available. Second site's in Atlanta, the third site will

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

be in

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

California, so getting more interest because we're on both coasts now.

Matthew Summerville
Equity Analyst at D.A. Davidson

Understood, thank you guys.

Operator

One moment for our next question. Our next question comes from the line of Joe Giordano of TD Cowen. Your line is now open.

Joe Giordano
Joe Giordano
Analyst at Cowen

Hey, guys. Good evening. Thanks for taking my questions.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Hi, Joe.

Joe Giordano
Joe Giordano
Analyst at Cowen

Just curious on the tariffs.

Joe Giordano
Joe Giordano
Analyst at Cowen

Is there any like how hard is the language on this stuff with pass throughs? I know we had some in the past, like some stuff that was thought to be reimbursable was not. So like I'm guessing these contracts when they were written wasn't contemplating something like this necessarily, like from a policy standpoint? So, like, how much debate or ambiguity is there around, hey, is this kind of accepted? Like, is something from Eurozone?

Joe Giordano
Joe Giordano
Analyst at Cowen

Like, how do we think about this? Is there how certain are you on that?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

We are certain, so in general these costs will be pass through for us. And we've gone through and done an analysis of all of our contracts over the last quarter or so. And I'll take this opportunity, Joe, to highlight a bit on tariffs, because I really just answered portion related to guide. So if I think about the current environment we have now, our overall exposure is a single digit percent of a typical system. We have coverage for USMCA for our box production in Mexico, so our primary exposure comes from Europe.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

And as I indicated, the costs are passed through. We recognize that this equates to higher system costs though, and so we're in the process of identifying with our supply chain what else can we go do to work offsets, so that we're not passing all those costs on to our customer. But from a contractual perspective, we're protected.

Joe Giordano
Joe Giordano
Analyst at Cowen

Got it. That's clear. And then, Rick, I know it's early days with ASR, but any updated thoughts on how you might be able to leverage technology and best practices to take the best parts of each of the three types of modules you have to make the three best things you can build?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Well, yeah, sure. I think we're talking to some people about putting all three in the same building, and then we're also talking to some people about just putting them in the back of the store. Essentially, ASR is, and this is a potential big plus for Greenbox, It is a modified e commerce solution because we're actually, the goal of this system is to pick in each, put it in the bag, in the back of a store, customer picks it up, or you deliver. But you can put it in a box and ship it to a customer, so, and of course e commerce, the top 300, four hundred, five hundred thousand items that sell on e commerce are the same top 900,000 items that sell in the store. So we've had a lot of incomings because micro fulfillment, which is what other people call it, was really only looking at doing 5,000 or 6,000 items in the back of a store, and we think we can do in 15,000 or 20,000 feet, we think we can do 50,000 or 60,000 items, so in 100,000 square feet we might be able to do a million items.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

And so the opportunity, and it uses the same basic software platform, there's some changes we would make to the bot, but the reason that people are interested is because this is an existing technology that's modified. The example I keep using, this is just another app on the iPhone using the same iOS, and that's the way we've positioned the technology, but it solves different problems for different customers, and there's shipping cases, there's shipping interpacks, and there's shipping eachs, so we think we're the only ones that actually offer with the same software and the same supplier, all three levels of integration, so people are interested in that.

Joe Giordano
Joe Giordano
Analyst at Cowen

Thanks guys.

Operator

One moment for our next question. Our next question comes from the line of Mark Delaney of Goldman Sachs. Your line is now open.

Mark Delaney
Mark Delaney
Stock Analyst at Goldman Sachs

Yes. Good afternoon. Thank you very much for taking my questions. The first question is hoping to better understand what you're seeing for the potential to bring in additional customers, not only with GreenBox, but with Symbotic. You spoke a little bit around the momentum and having a GreenBox CEO, but maybe you could elaborate a bit more on potential incoming demand.

Mark Delaney
Mark Delaney
Stock Analyst at Goldman Sachs

And have you seen it change at all with the tariff landscape and some of the supply chain challenges that may be creating for some of the potential new customers?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Yeah. We've seen we've seen two things. We've seen some people just the world is so unknown. We've had a lot of incoming, we've had people probably say we want to study this, we want to understand it, not sure we want to go forward to some. And then the flip side is, in places that have a lot of visas or foreign labor that was coming into The US, we've seen a significant uptick in places where large customers that are doing well are very concerned about labor shortages, and so on balance I would say we're seeing more incoming, plus we've also increased our sales force, so we probably made twice as many sales calls in the second quarter as we did in the prior one.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

But in general, I think the amount of incoming is increasing. We're not, first thing we get is, how affected are you by tariffs, what's the pricing? Most of our stuff comes from The US, we make a lot of stuff in a trade free zone in Mexico, so I think there's like, oh okay, and then I think people think inflation's coming, they think labor's going up, and so a lot of incoming for that, for those reasons. So on balance, would say we're seeing more incoming than we are seeing people holding off.

Mark Delaney
Mark Delaney
Stock Analyst at Goldman Sachs

That's very helpful, Rick, a follow-up on that, What's the likelihood in your opinion of material new customers being announced this year either for GreenBox or CoreSymbotic? Recognize you always want to be selective and take the right kinds of projects on, but do you expect to be able to announce meaningful new customers this year?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

We do.

Mark Delaney
Mark Delaney
Stock Analyst at Goldman Sachs

Helpful. We'll stay tuned. My other question was for you, Carol, on free cash flow. Very strong in the quarter, I think, $249,000,000 EBITDA of $35,000,000 So maybe elaborate a bit more on what drove the degree of free cash flow strength and how to think about free cash flow from here? Thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yes, 2Q, similar to where we were in 1Q, benefited by timing of receipts. And as we've talked about, when we have a quarter where we're high in terms of the number of signatures, so we had 10 new starts this quarter, our contracts are pretty much set up where we get cash flow early on. And so that's what you're seeing levered. We also had the acquisition take place this quarter, so both the incoming cash and the outgoing cash, which was a net benefit for Symbotic. I would expect our free cash flow position between now and the end of the year to be stable as we head into the end of the year.

Mark Delaney
Mark Delaney
Stock Analyst at Goldman Sachs

Thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thanks, Mark.

Operator

One moment for our next question. Our next question comes from the line of Colin Rusch of Oppenheimer and Company. Your line is now open.

Colin Rusch
Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.

Thanks so much, guys. You know, as some of the perception technology begins to evolve at a little bit faster rate, how quickly can you start to integrate some of that improvement into your systems, and how should we think about that impacting the productivity of the overall system?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Yeah, I mean, great question. So we are, because we're in twenty, thirty warehouses now, but we can also, each level of a warehouse, so let's say there's 10 levels in a warehouse, there might be 300 or 400 levels where we'll have 100 bots on each level. So we now have bots in warehouses with LiDAR, we have bots in warehouses with vision, We have bots and warehouses that we can run remotely. So the level of technology and the incoming, I mean, it's very interesting, and the incoming talent is accelerating, so we would expect that the level of innovation will increase, not decrease. I think we're just getting started with the learnings for what the bot can do, and so eventually our fleet will be pretty much, I don't know if it'll be 100%, but pretty much significant portion of our fleet will include LiDAR, we also have a new battery which has 10 times the energy.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

So I think what's gonna happen and what we've been working on as we scale is much more reliable machines, and therefore fewer operators, therefore lower operating costs, and therefore higher returns for our customers and for us, and easier to sell the systems. So I think when we started, the technology, there was always concern about where are you with Walmart, where are we the first systems, and the word-of-mouth that we're getting back is why I think our incoming is increasing. There's just nobody doing, there's nobody that has LiDAR that we know of on a bot that runs in a warehouse of this scale, Nor can you tell you how bots, nor do you have vision. So all of those things are things that we're accelerating.

Colin Rusch
Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.

That's super helpful. And then just in terms of the scalability as you get into the back half of the decade, and early next decade, I'm curious about your the work that you're doing with finance partners in terms of underwriting these things with that or underwriting these assets with that and helping kind of seed some of the education at this point. I guess how mature that process? And is it anything that you really need to invest a fair amount of time on at this point?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, so we haven't encountered very many customers that have inquired When you think about what Greenbox is designed to do, with Greenbox being warehouse as a system, that's one of the opportunities for customers who might have less CapEx capability, so they could come in and be able to utilize part of a warehouse. And so, we've used Greenbox as that part of the leverage, but we have not seen a lot of incoming to date from our customers looking for financing.

Colin Rusch
Managing Director - Head of Sustainable Growth & Resource Optimization Research at Oppenheimer & Co. Inc.

Great. Thanks so much, guys.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Guy Hardwick of Freedom Capital Markets. Your line is now open.

Guy Hardwick
Managing Director at Freedom Capital Markets

Hi, good evening.

Guy Hardwick
Managing Director at Freedom Capital Markets

Just

Guy Hardwick
Managing Director at Freedom Capital Markets

wondering what the Q3 revenue guidance assumes in terms of systems and deployments. Because obviously, as pointed out earlier, it's a step down. So I was just wondering what you have in terms of deployments and progress, as well as completions and starts in the quarter.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So thanks for the question. We typically don't guide with specific numbers of systems that are in deployment, but if you think about three were signed a year ago, four were signed a quarter after that, it was twelve months in. There's not a large number contributing to the heavy install at that point. We've got 10 that we signed this quarter, and associated with our revenue ramp, typically we see revenue first quarter where we sign, and then we're pretty stagnant on that 10 for the next couple of quarters. But we typically don't guide in terms of total number of systems at deployment.

Guy Hardwick
Managing Director at Freedom Capital Markets

Okay, and just a follow-up on Greenbox. Can you kind of update us on the progress of building out the sales capability, and what stage you think the Greenbox as a company is at this point?

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

I think Greenbox is an early stage. We have two sites beyond the initial site that we're building out the sales force for, and we're prospecting, and we've hired people from the 3PL space, one from Hub Group, one from CEVA. And we have some time because the buildings are still being built out for the Symbotic system. So we have about a year, a year and a half before we're really concerned about filling them up, the prospecting is going well, and we're continuing to make a lot of sales calls. So it just takes time.

Charlie Anderson
SVP, IR & Corporate Strategy at Enovix

Thank you.

Operator

One moment for our next question. Our next question comes from the line of Derek Soderbergh of Cantor Fitzgerald. Your line is now open.

Derek Soderberg
Director, Senior Equity Research Analyst at Cantor Fitzgerald

Yes. Hey, guys. Thanks for taking the questions. On the ASR business, can you provide some color as to what sort of revenue that is? I think you mentioned you're providing services.

Derek Soderberg
Director, Senior Equity Research Analyst at Cantor Fitzgerald

Curious if you're paid based off of each unit that you're handling. And I might have missed it, but are we going to be seeing that ASR revenue in operation services? Or is there a systems component to that as well?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

The development associated with ASR is running through our systems line. And so, that's where we saw the revenue for this quarter primarily. And we talked about that being mid to high single digit percentage of what we posted for the quarter. And so, that's the development activity and the design activity, and for the next three years as we work through develop and build of our three prototypes, that's where you're going to see the primary revenue. We do have some revenue running through recurring, because associated with the acquisition, we are responsible for maintaining the existing APD systems.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

So, we have a small amount of software running through software, and then we have parts and services similar to how we operate our core business that you're going see in the op services. But it's a very small amount of revenue.

Derek Soderberg
Director, Senior Equity Research Analyst at Cantor Fitzgerald

Got it. That's helpful. And then, Rick, you mentioned your scale and capabilities and just sort of being at multiple layers in the supply chain. It seems like you can find some pretty valuable insights with that data. Curious if you're exploring new avenues to monetize some of that data.

Derek Soderberg
Director, Senior Equity Research Analyst at Cantor Fitzgerald

Has there been an environment where you've kind of found certain insights and then plug that back into the ROI of the system and that longer term can improve kind of the wallet share with your customers. Any ways to sort of monetize that data at this point? Thanks.

Richard Cohen
Richard Cohen
Chairman of The Board & Chief Executive Officer at Symbotic

Yeah, so we are doing that, we're actually, the selling of the customer's data, the customer owns the data, so that's very tricky for us. And so we should just, I get asked this question a lot, and so we can't sell their data. It's their data. But what we've learned is, surprisingly, we probably know more about the shape and size of boxes than anybody in the world at this point, and so it's actually helped us redesign our system to be smaller, and that allows the customer to store more, and we're actually taking advantage of that in our pricing.

Derek Soderberg
Director, Senior Equity Research Analyst at Cantor Fitzgerald

That's helpful, thanks.

Operator

One moment for our next question. Our next question comes from the line of Ken Newman of KeyBanc Capital Markets. Your line is now open.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

Hey, guys. Thanks for fitting me in.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Hi, Ken.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

Hey, Carol. Maybe back on the tariff question.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

I know it sounds like the guide isn't reflecting any impact from pass through pricing, but I am curious if you're already seeing some of your larger suppliers push price to you and curious if you have a sense of just how much that pass through could look given the early notifications you may or may not be getting from your suppliers.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, our primary impact is from Europe. Their tariffs went into effect in April, and so 3Q will be the first where we're actually seeing the impact of that. As I indicated, we're a single digit percent of a typical system, and so what we're in the process of doing right now is discussions with our supply chain, because we also are interested in making sure we're focused on continuing to reduce the cost. So, where we'll start seeing the impact is as the suppliers deliver equipment here in the third quarter. But we're in discussions to figure out other ways to offset.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

Right, okay.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

Then maybe as a follow-up there, just on that pass through conversation, I get that pass throughs protect gross profit dollars, but given all the talk that you had on improving the efficiencies and lowering the amount of time it takes to deploy a system, I would imagine you could also drive stronger SG and A leverage even if on the higher revenue base, even if you keep price cost neutral on the gross profit line. I know there are lot of moving pieces, but do you think it's possible to drive EBITDA margin expansion, even if the gross margins are nominally weaker just from tariffs?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, we continue to focus on our SG and A leverage, and I think the step up you saw this quarter was primarily related acquisition. As we get the synergies between the two companies better understood and work through that integration, we hopefully will be able to identify additional synergy going forward. And then as you indicated, as we continue to scale, we're seeing the benefit of that scale on overall program management, on just the performance of what we did for insourcing on our EPC contract. So, we're starting to see the benefit as we continue to ramp.

Ken Newman
Ken Newman
VP & Equity Research Analyst at KeyBanc Capital Markets

Very helpful, thanks.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Okay, thanks.

Operator

Our next question comes from the line of Greg Palm of Craig Hallum Capital Group. Specifically

Greg Palm
Senior Research Analyst at Craig-Hallum Capital Group LLC

on gross margin, I think, Carol, you mentioned or alluded maybe a little bit of a benefit in the quarter from ASR. But can you just talk about whether there were any other sort of onetime benefits? It sounds like a lot of it was just due to more efficiencies, and obviously, you had much better gross margin in software and operations services. But just kind of curious how you view that going forward.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, the other one time benefit is mostly in the recurring. And so, in a quarter where we had eight systems hit acceptance, there's a significant amount of high margin training revenue that goes along with that acceptance. So, that's what you're seeing in the op services revenue. We had a bounce back this quarter from last quarter, So that's the one timer. But in terms of the system gross margin, the project mix shifting, that will continue going forward.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Our overall improvements that we're seeing from shorter install duration, benefits from bringing the in sourcing in of EPC, that will continue. And the ASR is a higher margin contribution, and so we saw the benefit of that in the quarter. We'll have less of that next quarter, but that will come back as revenue continues to grow.

Greg Palm
Senior Research Analyst at Craig-Hallum Capital Group LLC

Okay, perfect. And you mentioned the three GreenBox locations already. I think there are another 10 that you have already specifically targeted in terms of cities. Can you just help us out with revenue contribution from Green Box? I mean, there a timeline associated with the start up of these additional 10?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

And so what we've talked about so we've launched three. And in prior quarters we had talked about five locations where we would typically be thinking through a potential multi tenant warehouse. So, one was the Atlanta region, one was Southern California. We've looked at Dallas, we've looked at Chicago, and we've looked at somewhere on the East Coast. So, we've identified five of those, which we have now launched two.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Our green box has been slower to ramp, But now that we've got the CEO and they're in place identifying additional sales folks, I think we're going to see a lot more activity on Green Box in the

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

coming quarters.

Greg Palm
Senior Research Analyst at Craig-Hallum Capital Group LLC

Okay, fair enough. All right, thanks.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thank you.

Operator

One moment for our next question. Our next question comes from the line of Robert Mason of Baird. Your line is now open.

Robert Mason
Senior Research Analyst at Robert W. Baird & Co

Yes, good evening. Carol, you may have run through this, but could you bridge the backlog again from Q1 to Q2? I know ASR was booked, but was there anything else?

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, thanks for the question. Backlog, the addition to the backlog was for the development associated with the ASR business. That was the only addition. And then what you saw was the reductions associated with the revenue posted for the quarter. So those offsets.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

And then every quarter as we talk about when we sign a final statement of work, there's puts and takes in terms of final configuration, and that's what the delta is.

Robert Mason
Senior Research Analyst at Robert W. Baird & Co

Okay. Maybe related to that, I think earlier on you mentioned around your deployment schedules, compressing some that phase ones some phase ones are now 15% larger, than some of the earlier stage deployments. I'm just curious, you know, what's what's driving that? Or is that just the the nature of the particular sites or, the customer wants more installed up front? I'm just curious what's caused the the expansion.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Yeah, it is purely the nature of those particular sites. I would not infer from that that all future phase ones are getting bigger. It really is dependent on every single location and size and capability of that particular warehouse as we go in. As we've talked about our largest customers, we typically end up with three phases, and so there is a little bit of a mix of what they want to do in phase one, two, or three, but I would not infer that all of our phase ones are getting 15% larger.

Robert Mason
Senior Research Analyst at Robert W. Baird & Co

Very good, thank you.

Carol Hibbard
Carol Hibbard
CFO & Treasurer at Symbotic

Thanks Rob.

Operator

I am showing no further questions at this time. I would now like to turn it back to Charlie Anderson for closing remarks.

Charlie Anderson
SVP, IR & Corporate Strategy at Enovix

Yeah, thanks everybody for joining our call tonight. We really appreciate your interest in Symbotic and look forward to seeing many of you during the quarter at the various investor conferences. And have a nice day.

Operator

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

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Key Takeaways

  • In Q2 we delivered 40% year-over-year revenue growth to $550 million, expanded gross margins, trimmed net loss to $21 million, and achieved $35 million of adjusted EBITDA.
  • Improvements in deployment processes—streamlined workflow, insourced construction management, and quality controls—cut install-to-acceptance timelines by two months (normalized >30%).
  • GreenBox, our warehouse-as-a-service JV, accelerated with a new CEO hire and launched a third multi-tenant site in Southern California, boosting pursuit of co-tenants on both U.S. coasts.
  • The closed acquisition of Walmart ASR adds a micro-fulfillment solution for ambient and perishable goods, contributing mid-high single-digit percent to Q2 revenue and enhancing system margins.
  • We exited Q2 with a ~$23 billion backlog and forecast Q3 revenue of $520 million–$540 million with adjusted EBITDA of $26 million–$30 million, underpinning multiyear growth.
AI Generated. May Contain Errors.
Earnings Conference Call
Symbotic Q2 2025
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