Symbotic Gets Big Earnings Lift: Is the Stock Investable Again?

Key Points

• Symbotic is a robotics company revolutionizing how warehouses get goods to where they need to be.
• Despite key partnerships with Walmart and other massive retailers, investor confidence took a huge hit in November 2024.
• With the company reporting record results in multiple important areas and being another quarter removed from past issues, is this stock investable again?

For warehouse robotics company Symbotic NASDAQ: SYM, breaking records on important business metrics was key to its latest big post-earnings move. Symbotic shares saw a significant 6% rise after the industrial company’s latest earnings report came out on May 7. This would be a big move for many stocks, but it actually is rather measured for Symbotic. Aside from this one, Symbotic’s last 10 earnings releases have resulted in one-day share movements of 10% or more.

The results from Symbotic were positive, and the company is now nearly half a year removed from a disastrous announcement made in late November 2024. The company announced a big restatement of its financials. This left some investors wondering if they could trust the firm's numbers.

Shares plummeted around 37% in one day as a result, calling into question whether investing in the stock at all is a prudent decision. So, what are the main takeaways from Symbotic's latest results? Has the company now regained enough trust to become investable again?

Symbotic Beats Big on Sales Growth

In its fiscal Q2 2025 results, Symbotic reported brisk sales growth of 40%, significantly exceeding Wall Street analyst estimates of approximately 33% growth. The company also reduced its net loss by around 61% to $21 million, which aligned with expectations. Symbotic also saw its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rise nearly four times from $9 million to $35 million.

In fiscal Q3, Symbotic is expecting midpoint sales of $530 million. This was around $35 million below expectations. At first glance, these headline numbers present a mixed picture, creating confusion around why Symbotic shares rose strongly. But for Symbotic, several underlying metrics are particularly important and are big reasons for the stock’s substantial rise.

Symbotics Sets Three New Records on Key Underlying Metrics

Among the most important underlying metrics for Symbotic is the company’s adjusted gross margin. Symbotic builds complex robots that improve warehouse operations. Assembling and installing these systems is very costly. Symbotic’s adjusted gross margin reveals how well it controls these costs. It helps to set the maximum profitability levels for the whole company. Luckily for Symbotic, the company posted its highest adjusted gross margin ever last quarter of over 22%.

Two other key metrics for Symbotic are system deployment starts and completions. These measure how many new systems the company started installing and how many they finished installing. These are important because Symbotic has a backlog of $22.7 billion. This is equal to nearly 11 times the revenue the firm generated over the past 12 months.

However, Symbotic has to make significant progress in actually installing these systems before it can recognize this backlog as revenue. Thus, starting and completing systems means the company can recognize this revenue faster. Symbotic also achieved records on both fronts. The company started a record 10 deployments in Q2. It also completed eight system deployments, double the company’s previous record of four.

Another encouraging sign was that Symbotic’s installation speed improved greatly. When adjusted for project size, the time from installation to customer acceptance was 30% shorter than the company’s historical average. This helps the company recognize revenue faster. It also lowers total installation costs, which boosts margins.

The company noted that finishing several lower-margin projects in fiscal Q1 2025 allowed it to complete higher-margin projects this quarter, lifting overall margins. The company expects this, as well as installation speed improvements, to continue.

“Investable” Is Creeping Into the Vocabulary Around Symbotic

There has been no talk about Symbotic’s past accounting issues on earnings calls since November 2024. Overall, it is unlikely that there will be much discussion of this, unless it is for a bad reason. Only a prolonged period of no new issues can truly ensure that Symbotic has this under control. However, it is notable to point out that Symbotic’s accounting issues were much less concerning than those of a company like Super Micro Computer NASDAQ: SMCI.

The huge demand for the company’s products is undeniable when looking at its backlog. Its faster deployment speed is also a good sign, especially as progress on this front seemed to have stagnated in previous quarters. But these figures are historically lumpy, and there could be a reversion in progress in the coming quarters. Risk remains on both the accounting and deployment fronts. Symbotic is moving closer to being investable again. It might already be there for those willing to take on these risks.