Core Insights - Investors in the Technology Services sector may consider Qifu Technology, Inc. (QFIN) and Symbotic Inc. (SYM) for potential value opportunities [1] Valuation Metrics - QFIN has a forward P/E ratio of 6.38, significantly lower than SYM's forward P/E of 133.59 [5] - The PEG ratio for QFIN is 0.57, indicating a favorable valuation relative to its expected earnings growth, while SYM's PEG ratio is 4.45 [5] - QFIN's P/B ratio stands at 2.10, compared to SYM's P/B of 37.63, suggesting QFIN is more reasonably valued based on its book value [6] Analyst Outlook - QFIN currently holds a Zacks Rank of 1 (Strong Buy), reflecting a positive earnings estimate revision trend, while SYM has a Zacks Rank of 5 (Strong Sell) [3] - The improving earnings outlook for QFIN positions it as a superior value option compared to SYM [7] Value Grades - QFIN has been assigned a Value grade of A, indicating strong undervaluation metrics, whereas SYM has a Value grade of F, suggesting it is overvalued [6]

Core Viewpoint - Symbotic has shown significant improvement in its business metrics, leading to a notable rise in its stock price following its latest earnings report, despite previous accounting issues and a mixed outlook for future sales growth [1][3][10]. Financial Performance - In fiscal Q2 2025, Symbotic reported a sales growth of 40%, surpassing Wall Street's expectations of approximately 33% [3]. - The company reduced its net loss by around 61% to $21 million, aligning with market expectations [3]. - Adjusted EBITDA rose nearly four times from $9 million to $35 million, indicating strong operational performance [3]. Sales Forecast and Backlog - For fiscal Q3, Symbotic expects midpoint sales of $530 million, which is about $35 million below analyst expectations [4]. - The company has a substantial backlog of $22.7 billion, nearly 11 times its revenue generated over the past 12 months, highlighting strong demand for its products [6][11]. Key Metrics and Operational Efficiency - Symbotic achieved its highest adjusted gross margin ever at over 22%, reflecting improved cost control [5]. - The company set records for system deployments, starting 10 new installations and completing 8, which is double its previous record [7]. - Installation speed improved significantly, with the time from installation to customer acceptance being 30% shorter than historical averages, aiding in faster revenue recognition [8]. Market Sentiment and Trust - There has been a noticeable absence of discussions regarding past accounting issues in recent earnings calls, suggesting a potential recovery in investor trust [10]. - The demand for Symbotic's products is evident from its backlog, and the faster deployment speed is a positive indicator for future growth [11].

Core Insights - Symbotic Inc. has elected Eric Branderiz to its Board of Directors, effective May 14, 2025, bringing extensive experience in finance and accounting from high-growth industrial technology environments [1][2]. Group 1: Leadership and Experience - Eric Branderiz has nearly 30 years of experience in finance and accounting, including roles at Enphase Energy and Tesla, and has held senior positions at several other technology companies [2]. - The Chairman and CEO of Symbotic, Rick Cohen, expressed enthusiasm about Branderiz's appointment, highlighting his financial expertise and success in guiding companies through growth stages [3]. Group 2: Company Overview - Symbotic is a leader in automation technology, focusing on A.I.-powered robotics and software platforms to enhance supply chain efficiency [4]. - The company aims to transform warehouses into strategic assets for major retail, wholesale, and food & beverage companies, utilizing advanced technology and machine learning [4].

Group 1 - Symbotic Inc. reported solid growth in Q2, significantly benefiting from the acquisition of Walmart's advanced systems and robotics business [1] - System deployments and completions were strong in the quarter, contributing to Symbotic's robust gross margins [1] Group 2 - Narweena, an asset manager, focuses on identifying market dislocations due to poor understanding of long-term business prospects, aiming for excess risk-adjusted returns [1] - The research process at Narweena emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term investment horizon [1] - Narweena's investment strategy is influenced by an aging population, low population growth, and stagnating productivity, which may create new investment opportunities [1] - The firm anticipates that many industries will face stagnation or secular decline, potentially improving business performance as competition decreases [1] - There is a trend towards asset-light businesses, leading to a declining need for infrastructure investments, which is affecting capital allocation and asset prices [1]

For the quarter ended March 2025, Symbotic Inc. (SYM) reported revenue of $549.65 million, up 29.5% over the same period last year. EPS came in at -$0.04, compared to $0.22 in the year-ago quarter.The reported revenue represents a surprise of +6.13% over the Zacks Consensus Estimate of $517.91 million. With the consensus EPS estimate being $0.05, the EPS surprise was -180.00%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Stre ...

Group 1 - Symbotic Inc. reported a quarterly loss of $0.04 per share, which was better than the Zacks Consensus Estimate of $0.05, but a decline from earnings of $0.22 per share a year ago, resulting in an earnings surprise of -180% [1] - The company posted revenues of $549.65 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 6.13%, and showing an increase from $424.3 million in the same quarter last year [2] - Over the last four quarters, Symbotic has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2 - The stock has lost approximately 3.2% since the beginning of the year, while the S&P 500 has declined by 4.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $577.07 million, and for the current fiscal year, it is $0.26 on revenues of $2.27 billion [7] Group 3 - The Zacks Industry Rank indicates that the Technology Services sector is currently in the top 26% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Symbotic is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6]

Financial Data and Key Metrics Changes - Revenue grew by 40% year over year to $550 million, driven by solid progress across 46 systems in deployment and more than doubling the number of operational systems from a year ago [8][9] - Net loss reduced to $21 million in Q2 from $55 million in the same quarter of the previous fiscal year [8] - Adjusted EBITDA increased to $35 million, more than tripling year over year from $9 million [8][9] - Cash and equivalents at the end of the quarter were $955 million, up from $903 million in the first quarter [13] Business Line Data and Key Metrics Changes - Software revenue grew over 160% year over year to $6.7 million, while operational services revenue increased by 47% year over year to $29.6 million [10] - The company began a record 10 new system deployments in the quarter, including one new GreenBox site [9][10] - The backlog increased to $22.7 billion from $22.4 billion in the previous quarter, primarily due to a new development contract with Walmart [11] Market Data and Key Metrics Changes - The company is well-positioned with nearly $23 billion in backlog, indicating strong future growth potential [7][8] - Gross margin on software maintenance and support exceeded 65%, trending toward typical industry software margins [12] Company Strategy and Development Direction - The company is focused on improving project execution and has made changes to streamline deployment processes, including in-sourcing construction management [6][7] - The acquisition of Walmart Advanced Systems and Robotics (ASR) expands the product portfolio to include micro-fulfillment solutions for both ambient and perishable environments [7][8] - The company is investing in talent acquisition to support future growth, including hiring a new Senior Vice President of Commercial [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing improved project execution and a strong backlog [7][8] - The company expects revenue for Q3 to be between $520 million and $540 million, with adjusted EBITDA between $26 million and $30 million [14] - Management acknowledged that system starts will continue to be lumpy but anticipates an upward trajectory in the coming quarters [19] Other Important Information - The company is seeing increased interest in its technology and innovation roadmap, particularly in developing solutions for perishables and frozen goods [46][47] - Management highlighted the importance of integrating new technologies, such as LiDAR and vision systems, into their operations to enhance productivity [75] Q&A Session Summary Question: Does Q2 foreshadow future system starts and completions? - Management indicated that while system starts will continue to be lumpy, they expect an improvement in the number of system starts due to the backlog [19] Question: Is there any impact from tariffs on the forecast? - Management confirmed that the forecast does not include tariff impacts, as most contracts allow for pass-through of tariff costs [22][58] Question: What is the revenue contribution from ASR? - ASR contributed a mid to high single-digit percentage of revenue for the quarter, with expectations for growth as development progresses [39][86] Question: What is the status of GreenBox and its sales capabilities? - Management stated that GreenBox is in early stages, with ongoing efforts to build out the sales force and prospect for new customers [82] Question: How is the company leveraging technology for future growth? - Management discussed the integration of advanced technologies into their systems, which is expected to enhance reliability and reduce operating costs [75]

Financial Data and Key Metrics Changes - Revenue grew by 40% year over year to $550 million, driven by solid progress across 46 systems in deployment and more than doubling the number of operational systems from a year ago [9][10] - Net loss reduced to $21 million in the second quarter from $55 million in the same quarter of fiscal 2024 [9] - Adjusted EBITDA increased to $35 million, more than tripling year over year from $9 million [9][10] - Cash and equivalents at the end of the quarter were $955 million, up from $903 million in the first quarter [13] Business Line Data and Key Metrics Changes - Software revenue grew over 160% year over year to $6.7 million, while operational services revenue increased by 47% year over year to $29.6 million [11] - The company began a record 10 new system deployments and completed 8 systems in the quarter, bringing the total to 37 operational systems [10][11] - The backlog increased to $22.7 billion from $22.4 billion last quarter, primarily due to the addition of a development contract with Walmart [12] Market Data and Key Metrics Changes - The company is well-positioned with nearly $23 billion in backlog, indicating strong future growth potential [7][8] - The gross margin on software maintenance and support exceeded 65%, trending toward typical industry software margins [12] Company Strategy and Development Direction - The company is focused on improving project execution and has made changes to streamline deployment processes, including in-sourcing construction management [6][7] - The acquisition of Walmart Advanced Systems and Robotics (ASR) expands the product portfolio to include micro-fulfillment solutions for both ambient and perishable environments [7][8] - The company is investing in talent acquisition to support growth, including hiring a new Senior Vice President of Commercial [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's advantageous position going forward, citing improved execution and expanded margins [7] - The outlook for the third quarter of fiscal 2025 anticipates revenue between $520 million to $540 million and adjusted EBITDA between $26 million and $30 million [14] Other Important Information - The company is experiencing a significant uptick in incoming demand due to labor shortages and inflation concerns among large customers [62] - Management highlighted the importance of technology integration, including advancements in LiDAR and vision capabilities for bots [70] Q&A Session Summary Question: Does Q2 foreshadow future system starts and completions? - Management indicated that system starts will continue to be lumpy but expects an improvement trajectory due to the backlog [18] Question: Is there a forecast for tariff-related impacts? - Management clarified that the forecast does not include tariff impacts, as most contracts allow for pass-through of tariffs, which could increase revenue but may drag on gross margins [20][21] Question: What is the revenue contribution from ASR? - ASR contributed a mid to high single-digit percentage of revenue for the quarter, with expectations for growth as prototypes are developed [35][84] Question: What is the status of GreenBox's sales capability? - GreenBox is in early stages, with ongoing prospecting and sales efforts, and management is optimistic about future customer engagement [80] Question: How is the company leveraging technology for system improvements? - The company is integrating advanced technologies into its systems, which is expected to enhance reliability and reduce operating costs [70] Question: What is the outlook for free cash flow? - Free cash flow is expected to remain stable as the company benefits from timing of receipts and ongoing contracts [66]

Revenue Growth - Total revenue for the three months ended March 29, 2025, was $549,651,000, representing a 40% increase compared to $393,332,000 for the same period in 2024[146] - Total revenue for the six months ended March 29, 2025, was $1,036,344, representing a 38% increase compared to $753,275 for the same period in 2024[151] - The company expects continued revenue growth from the Master Automation Agreement (MAA) with Walmart, which includes the installation of Systems in all 42 regional distribution centers through fiscal year 2029[148] Systems Revenue - Systems revenue increased by 38% to $513,372,000 for the three months ended March 29, 2025, up from $370,693,000 in the prior year, driven by an increase in the number of Systems in Deployment[148] - Systems revenue increased by 36% to $977,431 for the six months ended March 29, 2025, driven by an increase in Systems in Deployment from 37 to 46[151] Software Maintenance and Support - Software maintenance and support revenue surged by 161% to $6,685,000 for the three months ended March 29, 2025, compared to $2,566,000 for the same period in 2024, attributed to an increase in Operational Systems under support contracts[148] - Software maintenance and support revenue surged by 158% to $12,210, attributed to an increase in Operational Systems under contracts from 18 to 37[152] Operational Services Revenue - Operation services revenue rose by 47% to $29,594,000 for the three months ended March 29, 2025, compared to $20,073,000 in the prior year, reflecting an increase in Operational Systems and training services provided[150] - The increase in Operation Services revenue is linked to a rise in Operational Systems and additional training services provided to customers[153] - The company anticipates further growth in operational services contracts as the number of Operational Systems increases[153] Profitability - Gross profit for the three months ended March 29, 2025, was $107,828,000, compared to $30,220,000 for the same period in 2024, resulting in a gross margin of 20%[146] - Gross profit for the six months ended March 29, 2025, reached $187,867, up 99% from $94,276 in the prior year, with Systems gross profit increasing by $88,726[156] - Adjusted gross profit for the three months ended March 29, 2025, was $121,810,000, up from $69,670,000 in the prior year[175] - The adjusted gross profit margin for the three months ended March 29, 2025, was 22.2%, compared to 7.7% in the prior year[175] Expenses - Research and development expenses increased to $61,540,000 for the three months ended March 29, 2025, compared to $46,462,000 in the prior year, reflecting ongoing investment in product development[146] - Research and development expenses for the six months ended March 29, 2025, totaled $105,133, a 19% increase from $88,606, representing 10% of total revenue[160] - Selling, general, and administrative expenses rose to $78,347,000 for the three months ended March 29, 2025, from $48,652,000 in the same period of 2024[146] - Selling, general, and administrative expenses rose by 46% to $139,421 for the six months ended March 29, 2025, primarily due to increased employee-related costs[164] Loss and Income Tax Benefit - Operating loss for the three months ended March 29, 2025, was $(32,059,000), an improvement from $(64,894,000) in the same period of 2024[146] - The net loss for the three months ended March 29, 2025, was $(21,438,000), compared to $(54,830,000) for the same period in 2024[146] - Income tax benefit for the three months ended March 29, 2025, increased to $1,397,000, a 454% increase compared to $252,000 for the same period in 2024[168] - For the six months ended March 29, 2025, income tax benefit rose to $1,248,000, reflecting a 1460% increase from $80,000 in the prior year[169] Cash Flow and Investments - Free cash flow for the six months ended March 29, 2025, was $446,685,000, compared to a negative $14,942,000 for the same period in 2024[176] - Net cash provided by operating activities for the six months ended March 29, 2025, was $474,602,000, a significant increase from a cash outflow of $9,078,000 in the prior year[177] - The company incurred $200,000,000 for the acquisition of ASR during the six months ended March 29, 2025[181] - Cash requirements for the six months ended March 29, 2025, were primarily related to inventory purchases and strategic investments[186] - As of March 29, 2025, the company had a cash and cash equivalents balance of $954.9 million, sufficient to meet foreseeable cash needs for at least the next 12 months[186] Commitments and Future Outlook - The company's vendor commitments total $984.8 million, with $928.4 million due within the next year[188] - The company expects future capital requirements to depend on growth rate, R&D spending, and potential acquisitions[188] - No significant financing activities occurred during the six months ended March 29, 2025, aside from $3.2 million from the issuance of common stock under the ESPP[184] Accounting and Risk Assessment - There have been no significant changes in critical accounting policies and estimates compared to the previous year[189] - As of March 29, 2025, the company had no off-balance sheet arrangements[190] - There have been no material changes in the company's assessment of market risk sensitivity since the last annual report[192]

Financial Performance - Symbotic reported Q2 FY2025 revenue of $550 million, a 40% increase year-over-year from $393 million in Q2 FY2024[3][4] - The company experienced a net loss of $21 million in Q2 FY2025, an improvement from a net loss of $55 million in the same quarter last year[3][4] - Adjusted EBITDA for Q2 FY2025 was $35 million, up from $9 million in Q2 FY2024[3][4] - Total revenue for the three months ended March 29, 2025, was $549,651,000, an increase of 12.9% compared to $486,693,000 for the same period in 2024[18] - Gross profit for the three months ended March 29, 2025, was $107,828,000, representing a gross profit margin of 19.6%, up from 16.4% in the same period last year[20] - Operating loss for the three months ended March 29, 2025, was $(32,059,000), compared to $(24,629,000) for the same period in 2024[18] - Adjusted EBITDA for the three months ended March 29, 2025, was $34,718,000, compared to $17,904,000 for the same period in 2024[20] - The company reported a net loss of $(21,438,000) for the three months ended March 29, 2025, compared to $(18,520,000) for the same period in 2024[20] - The net loss for the three months ended March 29, 2025, was $21,438 thousand, compared to a net loss of $18,520 thousand for the same period in 2024, representing an increase of approximately 10.0%[27] Cash Flow and Liquidity - Cash and cash equivalents increased by $52 million to $955 million at the end of Q2 FY2025[3] - Cash and cash equivalents increased to $954,944,000 as of March 29, 2025, from $727,310,000 as of September 28, 2024[25] - Cash flows from operating activities provided $269,575 thousand for the three months ended March 29, 2025, up from $205,027 thousand in the same period of 2024, indicating a growth of about 31.4%[27] - Cash, cash equivalents, and restricted cash at the end of the period totaled $958,002 thousand, an increase from $906,086 thousand at the end of the previous period, marking a rise of about 5.7%[28] Investments and Expenditures - The company incurred capital expenditures of $20,560 thousand for the three months ended March 29, 2025, compared to $7,357 thousand in the same period of 2024, representing an increase of approximately 179.5%[27] - The company reported a net cash used in investing activities of $220,560 thousand for the three months ended March 29, 2025, compared to $25,349 thousand in the same period of 2024, indicating a significant increase in investment activities[27] Future Outlook - For Q3 FY2025, Symbotic expects revenue between $520 million and $540 million, with adjusted EBITDA projected at $26 million to $30 million[5] - Symbotic's Chairman emphasized improved execution and expanded margins, positioning the company for future growth[4] - The company is focused on investing in innovation to support future growth[4] - The company continues to pursue strategic acquisitions and partnerships to enhance its technology and market position[10][12] - Symbotic is not providing guidance for net loss due to the inability to reconcile forward-looking adjusted EBITDA to net loss without unreasonable effort[5][7] Shareholder Information - Class A Common Shares issued and outstanding increased to 108,380,772 as of March 29, 2025, from 104,689,377 as of September 28, 2024[23] Deferred Revenue and Liabilities - Deferred revenue increased significantly to $230,283 thousand for the three months ended March 29, 2025, compared to $58,336 thousand in the same period of 2024, showing a growth of approximately 295.5%[27] - Total liabilities as of March 29, 2025, were $1,542,611,000, compared to $1,188,422,000 as of September 28, 2024[25] Other Financial Metrics - Free cash flow for the three months ended March 29, 2025, was $249,015,000, an increase from $197,670,000 in the same period last year[21] - The company reported stock-based compensation of $43,355 thousand for the three months ended March 29, 2025, compared to $26,773 thousand in the same period of 2024, reflecting an increase of approximately 62.0%[27] - The company reported a gain from strategic investment fair value adjustment of $(4,481) thousand for the three months ended March 29, 2025, compared to no such gain in the same period of 2024[27] - The company’s accounts receivable decreased by $3,195 thousand for the three months ended March 29, 2025, compared to an increase of $67,376 thousand in the same period of 2024, indicating a shift in cash flow management[27]