Symbotic Inc. 10-Q Summary: Quarter Ended December 27, 2025
Business Context and Reporting Period
This filing covers the quarterly period ended December 27, 2025 (Fiscal Q1 2026). Symbotic Inc. is an automation technology company developing solutions for warehouse operations, with a significant portion of its business tied to a Master Automation Agreement with Walmart and a joint venture with SoftBank known as Exol. The company operates as a single segment and reported a net income for the first time in the period, driven by increased system deployments and revenue recognition.
Key Financial Metrics
| Metric | Q1 2026 (Current) | Q1 2025 (Prior Year) |
|---|---|---|
| Total Revenue | $629.99 million | $486.69 million |
| Gross Profit | $133.42 million | $81.02 million |
| Gross Margin | 21.2% | 16.6% |
| Operating Income | $6.53 million | ($22.97 million) Loss |
| Net Income (GAAP) | $13.36 million | ($16.86 million) Loss |
| Net Income Attributable to Common Stockholders | $2.60 million | ($3.18 million) Loss |
| Diluted EPS | $0.02 | ($0.03) |
| Adjusted EBITDA | $66.90 million | $17.91 million |
| Free Cash Flow | $189.49 million | $197.67 million |
| Cash and Cash Equivalents | $1,819.10 million | $903.03 million |
| Total Debt | None reported | None reported |
Material Changes vs. Prior Period
- Revenue Growth: Total revenue increased 29% year-over-year to $630 million. Systems revenue grew 27% to $590 million, driven by 57 systems in deployment compared to 44 in the prior year. Software maintenance revenue nearly doubled (97% increase) due to an increase in operational systems under contract.
- Profitability: The company transitioned from an operating loss of $23 million to an operating income of $6.5 million. Net income swung from a loss of $16.9 million to a profit of $13.4 million.
- Expense Management: Selling, General, and Administrative (SG&A) expenses increased 34% to $81.2 million, primarily due to headcount growth to support deployment acceleration. Research and Development (R&D) expenses remained relatively flat, decreasing slightly by 1%.
- Restructuring: The company incurred $2.7 million in restructuring charges related to a workforce reduction of approximately 115 employees to align resources with business needs.
- Liquidity: Cash balances increased significantly to $1.82 billion, bolstered by $424 million in proceeds from a Class A common stock equity offering completed in December 2025.
Guidance, Outlook, and Risks
- Backlog: Remaining performance obligations (backlog) stand at approximately $22.3 billion as of December 27, 2025. The majority relates to the Walmart Master Automation Agreement and the Exol joint venture. Management expects to recognize approximately 13% of this backlog in the next 12 months.
- Outlook: Management expects current cash, working capital, and forecasted operating cash flows to be sufficient to meet needs for at least the next 12 months. The company is focused on ramping partnerships and operations to support rapid system deployments.
- Material Weakness in Internal Controls: Management concluded that disclosure controls and procedures were not effective due to a material weakness regarding the timing of cost of revenue recognition. A remediation plan is underway, including process redesign and ERP implementation, but the weakness remains as of the filing date.
- Legal Proceedings: The company is defending two securities class action lawsuits alleging false statements regarding revenue recognition and internal controls. Additionally, two shareholder derivative actions are pending. Management believes these will not have a material adverse effect on financial condition but could impact operating results.
- Customer Concentration: One customer (Walmart) accounted for 85.6% of total revenue for the quarter. Three customers accounted for over 10% of accounts receivable.
Investor Verification Checklist
- Internal Control Remediation: Verify the progress of the remediation plan for the material weakness in cost of revenue recognition and the timeline for declaring controls effective.
- Walmart Dependency: Assess the risks associated with 85.6% revenue concentration from a single customer and the status of the $22.3 billion backlog tied to Walmart and Exol.
- Legal Exposure: Monitor the status of the securities class action lawsuits and shareholder derivative actions regarding potential financial liabilities.
- Equity Dilution: Review the impact of the recent $424 million equity offering and the outstanding Exol Warrant (11.4 million shares) on future earnings per share.
- Non-GAAP Reconciliations: Scrutinize the adjustments made to reach Adjusted EBITDA ($66.9 million), specifically the exclusion of stock-based compensation ($44.1 million) and restructuring charges.