Walmart’s backed symbolic stock plunges due to accounting errors

The Key Takeaways

• Symbotic, a Walmart-backed company that uses artificial intelligence in its warehouses, issued a warning on Wednesday regarding accounting mistakes.
• Symbotic stated that the mistakes in accounting would cause it to delay its annual reports and change its forecast for current quarter.
• Symbotic’s shares plummeted after Wednesday’s news, dropping nearly 40% in value intraday.

Symbotic’s (SYM), a warehouse-technology company powered by artificial intelligence, saw its shares plummet Wednesday when it announced that its report would be delayed and its outlook for the current quarter revised after it discovered a problem. “certain material weaknesses” The company’s financial report for 2024 ended September 28.

Walmart-backed Supply Chain Tech Company reported it will be delaying its report for Form 10-K due to it “requires additional time to complete its assessment of the financial impacts of correcting an error related to system revenue recognition and the impacts of that error on internal controls over financial reporting.”

Symbotic said it initially had found occurrences "where goods and services, primarily relating to specific milestone achievements, were expensed prior to the time that the corresponding milestones were achieved." It noted that this "resulted in the acceleration of the recognition of cost of revenue."

Symbotic Found 'Errors in Revenue Recognition'

Symbotic also said that it was discovered “errors in its revenue recognition related to cost overruns that will not be billable on certain deployments, which additionally impacted system revenue recognized in the second, third, and fourth quarters.”

The mistake was said to have affected the gross profit, adjusted earnings before taxes, interest and depreciation and amortization (EBITDA) and net income. Symbotic also warned about its full year 2024 and fourth quarter results. “should no longer be relied upon,” This page will be regularly updated.

Symbotic has said that it is now predicting a first-quarter revenue in fiscal 2025 of $480 to $500 millions, with an adjusted EBITDA between $12 and $16 million. When it announced its fiscal fourth quarter 2024 results on Nov. 18, the company projected revenue for the following quarter to be in the $495-$515 million range, with adjusted EBITDA forecast to be between $27 and $31 million.

Shares of the company skyrocketed after it announced record revenues a year ago.

Symbotic shares fell nearly 40% in recent trading, with the day's decline leaving the stock price down more than 55% for the year.

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