Symbotic Stock Tumbles Pre-Market After Firm Discloses Errors In Revenue Recognition: Retail Sentiment At 2-Month Lows
By Stocktwits Inc | First Published Nov 27, 2024, 7:21 PM ISTOn Nov. 25, Symbotic identified errors in its revenue recognition related to cost overruns that will not be billable on certain deployments. This additionally impacted system revenue recognized in the second, third, and fourth quarters of fiscal year 2024.
Robotics warehouse automation company Symbotic Inc ($SYM) lost over a quarter of its market capitalization in Wednesday’s pre-market session after the company said it has identified an error related to system revenue recognition following which revising its outlook for the first quarter of fiscal year 2025 and will be filing amended quarterly reports.
Symbotic had earlier disclosed that while preparing its full year financial statements, it identified occurrences during fiscal year 2024 where goods and services, primarily relating to specific milestone achievements, were expensed prior to the time that the corresponding milestones were achieved.
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“This resulted in the acceleration of the recognition of cost of revenue. Given that Symbotic recognizes revenue on a percentage of completion basis, this resulted in the acceleration of recognition of revenue,” the firm stated.
On Nov. 25, Symbotic identified errors in its revenue recognition related to cost overruns that will not be billable on certain deployments. This additionally impacted system revenue recognized in the second, third, and fourth quarters of fiscal year 2024.
“As a result, gross profit, income (loss) before income tax, net income (loss) and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) were also impacted,” it said.
The company believes the total impact of correcting these errors will be to lower system revenue, system gross profit, income (loss) before income tax, and adjusted EBITDA by $30 million to $40 million for fiscal year 2024.
The firm also revised its outlook for the first quarter of fiscal year 2025 and now expects revenue of $480 million to $500 million, and adjusted EBITDA of $12 million to $16 million compared to an earlier revenue guidance of $495 million to $515 million, and adjusted EBITDA estimate of $27 million to $31 million.
Following the disclosure, retail sentiment on Stocktwits dipped into the ‘bearish’ territory (32/100) from ‘bullish’ a day ago, accompanied by high retail chatter.
Retail chatter on Stocktwits indicated disappointment with many expecting the stock to decline further from current levels.
Before factoring-in Wednesday’s pre-market decline, SYM is down over 24% on a year-to-date basis.
For updates and corrections email newsroom[at]stocktwits[dot]com.<
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