Symbotic (SYM) Q4 2025 Earnings Call Transcript

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Date

Monday, November 24, 2025 at 5:00 p.m. ET

Call participants

• Executive Chairman — Rick Cohen
• Chief Financial Officer — Izilda Martins

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Takeaways

• Revenue -- $618 million, reflecting a 10% increase year over year, driven by growth in operational system deployments and recurring revenue.
• Full-year revenue growth -- Up 26% year over year, with cash and cash equivalents exceeding $1.2 billion at period end.
• Backlog -- $22.5 billion at quarter end, a sequential $0.1 billion increase from project pricing adjustments and the Medline addition, offset by revenue recognized.
• Net income/loss -- Net loss of $19 million in the fiscal fourth quarter compared to net income of $16 million in the fiscal fourth quarter of 2024, attributed to higher stock-based compensation and acquisition-related restructuring costs.
• Adjusted EBITDA -- Adjusted EBITDA of $49 million in the fiscal fourth quarter, increasing from $42 million in the fiscal fourth quarter of 2024 and at the top end of management's forecast.
• Operational systems -- 48 operational systems at the end of the fiscal fourth quarter, representing nearly double the level at the end of fiscal year 2024, resulting from six new systems going live in the quarter.
• System deployments -- 10 new system deployments initiated in the quarter, including GreenBox and Medline sites.
• System gross margin -- Significant year over year improvement, due to disciplined cost management and strong project execution, with management expressing confidence in continued expansion.
• Software revenue -- $9.3 million, up 57% year over year, reflecting recurring growth from increased operational systems.
• Operation services revenue -- $26.9 million, up 21% year over year, while the segment posted a loss due to increased site support investments.
• Guidance for 2026 -- Revenue expected between $610 million and $630 million, representing 25%-29% growth, and adjusted EBITDA projected between $49 million and $53 million.
• Deployment efficiency -- Management reports a more than half reduction in installation-to-acceptance time for the largest customer, enabling faster revenue and profit recognition.
• New customer & vertical -- Entry into the healthcare sector with Medline as a new client, cited as a proof of concept for expansion into one of the largest addressable verticals.
• GreenBox progress -- Two new GreenBox sites signed during the quarter, extending geographic reach, and first Atlanta site to be operational within a year; no customer leases yet announced.
• Product innovation -- Launch of next-generation storage with greater density and rapid installation, supporting customer consolidation of deployment phases and offering new e-commerce and perishable market opportunities.
• R&D spend -- Adjusted operating expenses increased sequentially to $87 million, driven by R&D investment in expanding the product portfolio and cloud-based software.
• Cash position -- Cash and cash equivalents of $1.2 billion, up from $778 million due to project milestone receipts and new contract signings.

Summary

Symbotic (NASDAQ:SYM) delivered double-digit year-over-year revenue growth and adjusted EBITDA growth in the fiscal fourth quarter, supported by expanded operational deployments and higher recurring software and services revenues.

Management introduced guidance for continued strong top-line growth and profitability, while emphasizing a shift to more efficient next-generation storage deployments and longer-term margin expansion. The quarter included strategic entry into the healthcare sector through the Medline partnership, reflecting further vertical diversification and expansion potential.

• The backlog rose to $22.5 billion, with the sequential increase mainly attributed to pricing adjustments and the addition of Medline, clarifying that Medline's impact on recognized revenue in the quarter is immaterial.
• Executive Chairman Cohen reported that customer adoption of the proprietary storage system enabled consolidation of project phases, resulting in larger initial deployments and accelerated project timelines for major clients.
• GreenBox expanded its national coverage with new sites near Dallas and Chicago, but customer occupancy at these sites had not commenced as of the call.
• CFO Martins said, the introduction of our proprietary next-gen storage structure has resulted in a realignment of deployment, with less pronounced revenue growth in the first three quarters of fiscal 2026 and a more significant ramp expected later in the year.
• Innovation priorities include investment in micro fulfillment, stretch bots accommodating larger cases, increased AI application for logistics optimization, and deployment of advanced battery technology to improve system reliability in challenging environments.
• Management believes operational improvements reduced installation-to-acceptance time by three months at the largest customer, directly improving top-line and gross margin realization.
• Symbotic’s global expansion efforts include active engagement in the European market, with half the sales team present in the region and early indications of significant demand for denser systems abroad.
• Human capital strategy is highlighted by geographic workforce expansion and targeted stock-based compensation, reflecting a proactive approach to attracting and retaining technical talent in competitive markets.

Industry glossary

• GreenBox: A Symbotic/JV platform offering automated, shared-warehouse solutions for multiple tenants, leveraging Symbotic technology.
• Break pack: A warehouse solution enabling split-case picking, allowing customer orders to be fulfilled by selecting quantities smaller than a full case.
• Micro fulfillment: Compact automated storage systems designed for rapid e-commerce order processing in limited retail or distribution center footprints.
• RPO (Remaining performance obligations): The measure of contracted backlog revenue that the company expects to recognize in future periods under accounting standards.
• ASR: Used in this context to mean Automated Storage and Retrieval systems, referring to robotic tools that move goods within warehouses.

Full Conference Call Transcript

Rick Cohen: Thank you, Charlie. Good afternoon, and thank you for joining us to review our most recent results. We made strong progress in fiscal year 2025, finished the year with good momentum. For the full year, we increased revenue by 26% year over year while delivering significant margin expansion and free cash flow generation. The cash on our balance sheet now exceeds $1.2 billion. During the fiscal year, we also expanded and upgraded our product portfolio. We added micro fulfillment, as a new category to address e-commerce, and upgraded our storage structure to a proprietary next-generation design that offers leading density and rapid installation.

When we marry up our innovative bot technology, that can handle goods of many sizes, this new highly dense storage structure and our proprietary software we believe we can unlock more opportunities than ever before. This includes everything from smaller buildings to e-commerce facilities to perishable facilities where square footage is at a premium. We are seeing this play out with a growing sales pipeline as our solutions deliver space savings and installation efficiencies that result in higher value. Customers are already taking advantage of this breakthrough in installation efficiency. Notably, our largest customers opted to utilize our next-gen storage to combine what previously took two separate deployments or phases into one single phase for new sites.

That means a phase one system deployment when we enter a distribution center for the first time we'll be able to do twice as much work versus when we began deployments for this previously. And the overall time to install and achieve acceptance for the same amount of case output in this example will be cut by more than half. Generating significant savings, reducing disruption, and generating a larger and faster return on investment for customers. Customers are also taking advantage of the modular build qualities of our next-gen storage with a handful of deployments that began in the fiscal fourth quarter connecting next-gen storage to prior-gen storage at the same site.

And GreenBox is moving forward with next-gen storage signing up to utilize it at new sites near Dallas and Chicago, both of which were signed in the fiscal fourth quarter. Notably with these sites, Green Box coverage will extend from California to the Midwest to the Southeast. We also finished the fiscal year by signing a new customer, Medline, the largest provider of medical surgical products and supply chain solutions serving all points of care. This marks our first customer in the healthcare vertical, where we believe the case for automation is very strong given the importance of accuracy, speed, and cost. This is also one of the largest potential new verticals available to us.

It is worth noting that there are over 500 healthcare distribution centers in The US alone, with a combined 76 million square feet of warehouse space according to the Health, Industry, Distributors Association. With our scale rapidly improving project execution and growing set of capabilities across the supply chain, we are in a better place than ever to bring our new customers covering multiple verticals, geographies, and use cases. Our focus in this has never been greater. In summary, delivered on the commitment we made at the start of the year to achieve strong top-line growth and a significant rise in operational systems, thanks to improvements in our deployment process. This also enabled us to deliver strong margin expansion.

Looking ahead, our key objectives for fiscal year 2026 are number one, harness our growing product portfolio and capabilities to broaden our opportunities with customers, particularly in e-commerce with our micro fulfillment solution. Two, unlock higher margins by driving additional value for our along with operational improvements. Three, continue to invest in our innovation engine to expand our capabilities and support future growth. I just want to end by thanking our team for their efforts along with our customers and investors for their support. I'll now turn it over to Izzy, who will discuss our financial results and outlook. Izzy?

Izilda Martins: Thanks, Rick. Fiscal fourth quarter revenue grew 10% year over year to $618 million exceeding our expectations. Year over year revenue growth in the quarter was driven by the expansion of the number of systems in operation. Fueling higher recurring revenue along with continued progress on our paid development program. Due to higher stock-based compensation our commitment to attracting and retaining top talent, and restructuring expenses primarily associated with acquisition integration activities, our net loss for the fiscal fourth quarter was $19 million versus net income of $16 million in 2024. Adjusted EBITDA in the fiscal fourth quarter of $49 million was at the high end of our forecast due to revenue and gross margin upside.

And up from $42 million in 2024. Our backlog of $22.5 billion remained in a strong position. The increase from $22.4 billion last quarter was due to final pricing on projects started and the addition of backlog associated with Medline offsetting revenue recognized in the quarter. In our fiscal fourth quarter, we began 10 new system deployments. As Rick highlighted, this included two deployments for GreenBox and one for Medline. We also had six systems go operational in the quarter. Bringing our total to 48 operational systems or nearly double the level at the end of fiscal year 2024.

Importantly, for the systems that went operational for our largest customer in the fiscal fourth quarter, we observed nearly three months of improvement in the time between start of installation and customer acceptance compared with our historical average with this same customer. This period of deployment is the portion that is most within our control. And it is also when we recognize the highest level of revenue and profit. With the continued growth in operational systems, we saw our software revenue grow 57% year over year to $9.3 million in the fiscal fourth quarter. And operations services revenue grew 21% year over year to $26.9 million. Turning to margins in the fiscal fourth quarter.

System gross margin continued its trend at significant year over year improvement, driven by disciplined cost management solid project execution and strong supply chain partnerships as we roll out our next-gen structure and deliver increasing value to our customers. We expect to see additional expansion in systems gross margin. Software maintenance and support also saw a substantial year over year gross margin gains, benefiting from continued scale and exceeding 70% for the full year. In operation services, we posted a loss as we increased investment in additional resources to support certain sites and ensure their long-term success. Operating expenses on a GAAP basis in the fiscal fourth quarter were $149 million.

Adjusted operating expenses in the quarter were $87 million up sequentially primarily due to strategic R&D investments in supporting our expanding product portfolio and cloud-based software tools. These investments are in areas where we see the greatest potential to increase value and long-term impact. We finished the quarter with cash and cash equivalents of $1.2 billion up from $778 million in the fiscal third quarter due to the timing of cash receipts tied to project milestones and the signing of new projects. Now turning to the forecast. As I've settled into the CFO role, I want to share some context for how I think about guidance.

We will continue to guide one quarter ahead, with a focus on transparency and consistency. My approach will be to set a guidance range reflecting where we expect to land, based on our best view of the deployment schedules and a balanced assessment of both risks and opportunities. With that in mind, for 2026, we expect revenue between $610 million to $630 million representing year over year growth between 25-29%. Adjusted EBITDA between $49 million and $53 million. I want to reiterate what we highlighted during last quarter's earnings call. That is the introduction of our proprietary next-gen storage structure has resulted in a realignment of deployment.

While this has no impact on our $22.5 billion of backlog, it does have an impact on how our revenue is phased throughout the fiscal year. With the quarters in 2026, showing less pronounced sequential growth. We believe this new technology advancement combined with the unique capability of our proprietary bots and software, is resonating with customers as they recognize our competitive differentiation and the significant value our solution creates. It also unlocks new opportunities across the supply chain as well as the opportunity for more efficient deployment which we expect will contribute to higher margins over time for Symbotic. With that, we now welcome your questions. Operator? Please begin the Q and A.

Operator: Thank you. Question, please press 11 on your telephone. You'll hear an automated message advising your hand is raised. We also ask that you limit yourself to one question and one follow-up. As well, please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q and A roster. Our first question today will be coming from the line of Nicole DeBlase of Deutsche Bank. Your line is open.

Nicole DeBlase: Yes. Thanks, guys. Good afternoon. Maybe just starting with Medline, is it possible for you to provide a bit more color on the relationship, what they've committed to? And then, you know, it seems like healthcare could be a pretty big opportunity with respect to new customers. Anything on how aggressively the sales force is pursuing that right now?

Rick Cohen: You broke up a little bit, but the Medline relationship is something that we worked on for about a year, maybe a little bit longer. And it was a combination of understanding what they wanted to accomplish with the hospitals and the critical care units that they deliver with. And then for them to understand how the ability of our system to handle lots and lots of items, and also the incredible accuracy with which we ship product. And then thirdly, the ability we have to sequence products because oftentimes to hospitals you're delivering to a specific section to a specific floor.

And so we work with them to give them a good understanding of the unique capabilities of our system. And so, that's why we won the award, and there are lots of warehouses, great customer, so we're very excited about that. In terms of future growth, we've added about five or six new salespeople in the past six months. And so we're much more in the aggressive marketing role than we were before. Probably a year ago, we were still wanting to make sure everything was working in testing out. And as I tell the organization, you can't scale chaos.

But over the last year, as we began to hit all our timelines for bills, and price points for execution, and the quality of the way we measure it and some of our internal measures has more than improved by almost 300%. So we're feeling very bullish about being able to handle a much broader base of customers and to deploy systems that'll work on day one.

Nicole DeBlase: Thanks, Rick. That's really helpful. And you kind of alluded to this, Izzy, when you were talking about like the cadence of 2026. But is the expectation that you guys start to really ramp next-gen systems still kind of around the middle of the year? I think that's what we shared on the last earnings call. And does that mean we're going to have kind of stable revenue through the first half and then the next step up kind of comes in 2026? Thank you.

Izilda Martins: Nicole, that's exactly the way we're thinking of it. As you know, we unveiled it last quarter. So we had some signings then. Then this quarter's signings are all about the NextGen system. So what that does is exactly what you said. You'll have to call it see a less pronounced increase in revenue in call it, the fourth, the first, and the second, and then you'll see more of an increase towards the tail end. So, Nicole, I would say you got that right. Thank you.

Nicole DeBlase: Perfect. Thanks. I'll pass it on.

Operator: Thank you. One moment for the next question. And our next question is coming from the line of Joe Giordano of TD Cowen. Your line is open.

Joe Giordano: Hey. Thanks, guys. On Medline, can you talk about, like, what's contemplated there? Like, how many sites are we talking about? What, like, what types of technology is this encompassing? You know, is there break pack in this? Is there room for the micro fulfillment strategy in there as well? Like, what's what was, like, you know, effectively added to the backlog from them right now?

Rick Cohen: Yeah. So, Joe, it's one site. It's a proof of concept. It is the way we look at it. Obviously, if we do a good job, they have a lot of warehouses. And initially, we contemplated a pretty straightforward moving case system, but we also think we can upsell or extend to sell to these customers micro fulfillment which could either be in a receiving room in a hospital for them or very specific selection for them in a warehouse. And then, break pack is also an opportunity for us to sell. So, basically, we could sell them three different products. But right now, we are starting out with the first original product.

Joe Giordano: And then do we need to, like, just wanna make sure I understand this. The comments about Walmart where, like, the two phases being incorporated into one now. We need to, like, change the way we describe these things? I guess, like, I just wanna make sure the understand the definition. So if you say, like, 10 new systems were started, can some of those new systems effectively be, like, two that you would have said last time? And then we have to talk in dollar terms instead of number of sites now?

Rick Cohen: I'll turn that over to Izzy because I'll get in trouble.

Izilda Martins: I think the way you said it, you have it right in the sense of, you know, not all every system is created equal. But going forward, the size of the system is gonna be slightly larger. That's how I would think about it. They could be slightly larger, or we also have the ability to do some smaller systems. In terms of smaller space in a warehouse. So it gives us a lot of flexibility.

But Izzy was saying is absolutely right, is that in the same amount of space, that we were going to install an operation some of our bigger sites, they can actually take down more of the warehouse because we can do more work in the same space. As we did before.

Joe Giordano: Yeah. I see. Okay. Thanks, guys.

Operator: Thank you. One moment. While we prepare for the next question. And our next question is coming from the line of Andrew Kaplowitz of Citigroup. Your line is open.

Andrew Kaplowitz: Close enough. How are you good? How are you guys doing? So systems gross margin was, I think, a high watermark close to 22%, that's despite all the changes you're making to your systems. I think you had spoken about more flattish gross margin for Q4. So is Q4 a function of ASR mix maybe a little being a little higher? Is it safe to say you're on a better glide path? Given improved operating leverage, better execution? Any more color on whether you think your system gross margin continues to sort of just kind of go up from here?

Izilda Martins: Yeah. So let me tackle what you said in the beginning of your question. It's how I think about, call it, ASR in the quarter. It's really, call it, mid to high digits in terms of a percentage of total revenue in the fourth quarter. I kind of would expect that to be about the same as we progress. I think the bigger part of your question is how you think about, okay, do you unpack the margins? And I would say, we feel really, really bullish about our system margins, not only where they are, but where we're headed. So I think if you see the last several quarters, have kind of a little bit of a lumpiness.

But I think it's about the exit trend. Where we landed in the fourth. And I would say even though we don't guide to margins, would expect that to be a slight uptick in the first. I think it's more about when you think about how we're recognizing revenue in, call it, that twelve to eighteen month period given when we roll out the next generation storage system. That we expect those margins to really to be expanding. In the coming quarters. That's really what's the key part.

And like I said, would reiterate, if there's one thing I would walk away from today, it's the fact that we are very bullish about where our margins not only where they are, but where they're going.

Andrew Kaplowitz: It's helpful, Izzy. And then Rick, backlog, as you know, has been somewhat flash for Symbotic. I know your burn rates are going up. But do you think you could grow Symbotic's backlog in FY 2026? And or we know you're ramping on GreenBox, ASR. Can you give us an update on whether FY 2026 is a big year for Symbolic new customers, GreenBox? Can you start booking backlog for ASR? Like any thoughts around all that?

Izilda Martins: Yeah. So you're trying to trap me a little bit. So we don't guide some backlog. But here's how I would say. Right? Given the guide we gave for the first quarter, I would expect our backlog in the first quarter to really be no different than where we are. You do have in the 10 ks, call it what our banding is, but what's coming through in the next you know, twelve months. So I would say too soon to tell of where backlog will be. It's not something but with we talk to in coming quarters. I think you have to take two takeaways. As Rick said, we built up our sales team.

We constantly obviously have more opportunities. So we will continue to do that. I think it's also important to think about that backlog for us is strictly what you do from a gap perspective, not what we think could happen given that most customers will do one system at a time. And then last but not least, what I'll leave you with, maybe not in the next twelve months, but soon thereafter to some extent, is to think about we still have more than $5 billion of backlog to unlock. With the mini micro fulfillment systems. So I'm not troubled about backlog at all. I think that's more about our long-term strategy.

But I would say that 2026 is a solid backlog.

Andrew Kaplowitz: Appreciate the color, Izzy.

Operator: Thank you. One moment for the next question. Our next question will be coming from the line of Mark Delaney of Goldman Sachs. Your line is open.

Mark Delaney: Yes, good afternoon. Thank you very much for taking the questions. First one was on GreenBox. And now that you have a CEO of GreenBox, also given the new store structure that you've had and some of the progress you spoke to around building out sites there. I was hoping you could speak a bit more on the progress at GreenBox in terms of finding new customers who use the GreenBox sites?

Rick Cohen: Yeah. So our first site that will come live will be Atlanta. I mean, some of these sites are still under construction. Some of it will be a year away, some maybe be a little longer. But Atlanta will come alive. A lot of interest in Atlanta. No customers to announce yet. But we expect hopefully by the in the next ninety days, next one hundred and eighty days, we'll have some announcements as to who our first will be. We continue to get interest. And now that we actually have facilities we are in discussions with customers about how much space they want and when, but nothing to announce yet.

Mark Delaney: Okay. Anything in particular, Rick, you think new customers would wanna see in order to, get across the line?

Rick Cohen: No. I think I mean, I think what's happened is what we're seeing is on the real estate space, there was a downturn after COVID. And then some of the big guys have gobbled up a bunch of space. So there's a shortage of space right now. So we're very well positioned. And so we're talking to people about some would be different. Some might be versions of GreenBox, some might be just JED storage, very proactive warehouse handling services. And then we're starting to talk to a few new customers about just being a whole active 3PL.

So we're in a pretty good spot because we're ahead of the market and so we're talking to different customers about different things right now.

Mark Delaney: That's helpful. And just one more for me if I could please on GreenBox. Your partner SoftBank has said they're looking to raise capital more generally in order to fund some of the investments they'd like to do. So as you think about what that may or may not mean for GreenBox, any implications you can share in terms of how GreenBox is looking to have the funding and what that might mean for the pace of deployment at GreenBox? Thank you.

Rick Cohen: Yeah. So, I mean, our agreement with SoftBank is ironclad. They're there to provide the funding. We don't have any worries about providing the funding there. And we have a lot of cash to do our part of it as well. So funding will not be a problem with Green Bucks.

Operator: Thank you. One moment for the next question. And our next question is coming from the line of Colin Rusch of Oppenheimer. Your line is open.

Colin Rusch: Thanks so much, guys. You know, as you get into these customer conversations in a bit more detail, can you talk a little bit about the potential for adjustments to bot design or even system design more broadly? How we might think about the cadence of that evolution?

Rick Cohen: Yeah, so that's a great question. What's happening is that the customers are coming in now, I'll answer your question in two ways. So what's happening is that the market is appreciating the fact that we're not selling the same system that we were ten years ago. And a lot of our competitors have not innovated. They're just scaling. So our bots for instance, we introduced to our customers what we call a stretch bot. So we can now handle the 36-inch case. We might even be able to handle two eighteen-inch cases. So the bots have more flexibility. We've introduced vision and LiDAR on some of our bots. So, we have collision avoidance.

So customers are coming in and they've and even some of the ones that we talked to five years ago, who weren't ready to make a decision, they come in now and they say, my goodness. The pace of change with which you guys are doing things. So I think we're really differentiating us from the rest of the world. One of the things that we have done a lot of is we've moved to cloud-based. We're investing in AI resources, the database. So we can do sorting and slicing and pallet building, and for instance, truck routing. I think may be better than anybody in the world at this point.

So I should avoid superlatives, but our customers say, nobody can do what you guys are doing. So it's not just building very aisle-friendly pallets, it's building super friendly aisle pallets, but we can actually route the whole truck because of the reliability of our bots, which made huge progress in the last two years in terms of we pick very, very, very, very high percentage what we say we're going to pick, and we never make a mistake picking. So for hospital supply, that's absolutely critical.

But for other people, like we'll start to go live with our Southern Glacier site pretty soon in and it's liquor, and so it's both bars and restaurants, and so the ability to route trucks is really critical for them. They're telling us other people can't do it. So we continue to make improvements both in software. Our bots are getting much more technologically both intelligent but also better vision tools, collision avoidance, better routing, and we're also innovating on our pallet building and depalletizing to get product into the system.

So it's been I mean, reason I do what I do is I love the innovation and I love the fact that we have a team that can do innovation very quickly. That's creating a big noticeable distinction between us and the rest of the market right now.

Colin Rusch: That's incredibly helpful on our side. And then just from the human capital, you know, and the competition for talent, you know, we're hearing about a variety of different dynamics on that. Can you talk a little bit about your ability to attract folks and retain them as this market really heats up? In terms of, know, both physical AIs as well as some of the software that you're talking about?

Izilda Martins: Yeah. So the reason we went public is because we had to create a compensation system that would allow us to attract people that were used to being compensated in stock. And so we're not doing billion-dollar packages out in Palo Alto, but we're doing pretty good in the Boston market. And in the East. We also have opened an office on the West Coast. We also opened an office in Vietnam because one Omni Labs, was one of the healthcare small healthcare start-ups that we bought, has a lot of Vietnamese people that founded that company and so we've opened an office in Vietnam where there's huge talent.

So we're getting more than our fair share of talent and at a faster rate. One of the things that's been interesting is as the EV space falls down some, we are getting people from the EV world that are just disillusioned with some of the things that are happening there. And basically, bot, the way we're approaching it is an electronic vehicle with LiDAR and collision avoidance. It's not passenger carrying, but we do some very complicated things. And so we're able to attract people because they like the problems. We're solving. And our comp is as good as anybody needs to be.

We're not gonna compete with ChatGBT, but there's plenty of people that aren't gonna work for them either.

Colin Rusch: Excellent. Thanks so much, guys.

Operator: Yep. Thank you. One moment for the next question. And our next question be coming from the line of Guy Hardwick of Barclays Capital. Your line is open.

Guy Hardwick: Hi. Good evening. It looks like the based on the change in the RPO that there was very strong bookings in the quarter that $600-$700 million Izzy, could you just mix split that out between the Medline, new win, and pricing?

Izilda Martins: Just so we, you know, just make it clear, Medline was something we signed in the tail end of the quarter. So Medline is not going to influence really our results in the fourth quarter. Really, Medline's about no different than how we spoken to we recognize our revenue over almost really a two-year period. So I wouldn't put a lot of, call it, pre ins to numbers or how we achieved our fourth quarter numbers with the announcement of a new vertical. I think the fourth quarter is about the momentum that we've created for over months on end on installations and moving, call it, six more sites to operational.

That's really what drove it, plus the fact that, yes, we did sign 10 more new appointments. But overall, I would characterize the success of the fourth quarter based on the momentum that we've been working on for months on it.

Guy Hardwick: So Medline was not in the RPO. The $22.5 billion RPO at the end of the quarter.

Izilda Martins: Yes. It is in the RPO, but it's not any has no significant to the revenue generated in the court.

Guy Hardwick: Okay. That so I'm just my question was more, was it material to that increase in the RPO? Because given you would imply that your bookings were at $700 million given the burn in the quarter plus the change in the backlog. So that's a very significant increase compared to, say, previous quarters. So the question is really the mix of that, how much of it was Medline versus increase in pricing?

Izilda Martins: Yeah. I would say it's more about the increase in pricing or call it how you consider, you know, we did years ago and how inflation has moved. So that's really the main driver. In the RPO change. But yes, Medline is in there.

Guy Hardwick: And just in the 10 ks which you referenced, Izzy, it looks like the 12% of the backlog will be delivered over the next twelve months. That's quite a big increase in the figure back twelve months ago in the 2024 ten ks, you said 10%. It looks like you actually missed that 10%. You came in more at 9%, particularly if you include the ASR R and D revenue. So given what you said also about being a back-end loaded year, 12% of that backlog seems quite a big significant step up on the previous delivery, which you effectively kind of missed slightly.

So what reasons should we give us confidence that you can deliver 12% of the backlog in the next twelve months?

Izilda Martins: I think it's all about what we said in our prepared remarks. Given that we're seeing call it, improvements from that start of installation to the end line. That's what gives us the, call it, the momentum that we're talking about. Yes, we do have ASR that we built in. During the year, so you're absolutely correct. But I think we need laser-focused on the exit trends and what the new structure delivers. As you know, not only is it more dense, but more importantly, from an installation perspective is that it has call it, somewhat sub-assemblies. That come in that have that process get done in a much faster pace.

So quick call out on the ten to twelve I'm really comfortable with the 12% that we have in this year's band date. Thank you.

Operator: Thank you. One moment for the next question. And our next question is coming from the line of Derek Soderberg of Cantor Fitzgerald. Your line is open.

Derek Soderberg: Yeah. Thanks for taking my questions. On the recurring software fees, I'm wondering if you can share what new customers are signing up for in terms of an annual software fee on a percentage basis. Can you share that at all?

Izilda Martins: Unfortunately, that's not an area that we give any more color. I think it's just in general, how you map, call it, what we move to operational, and when we start triggering that software fee. But I would think if you take the a little bit of the exit trend, that's really what we would be expecting. In the near term.

Derek Soderberg: Okay, got it. And then, Rick, you mentioned there's about 76 million square feet of distribution centers in the healthcare vertical. I'm wondering if you've done the math internally how many modules does this equate to, or what's for the dollar opportunity? Just wondering if you can help us size that healthcare vertical in The U. S. Thanks.

Rick Cohen: I haven't done that, but you can ask Izzy. This call is over.

Derek Soderberg: Sounds good.

Rick Cohen: Will do.

Operator: Thank you. One moment. And our next question will be coming from the line of Jim Ricchiuti of Needham and Company. Your line is open.

Jim Ricchiuti: Thanks. Evening. Think late in the quarter, there was an announcement regarding Symbotic working with a I guess a small battery technology company, I think, in The UK, Niabolta. And I'm trying to understand the significance of this. And, if you could talk to you know, how we might think of potential deployments. Is this gonna be on new projects? Is there a plan to move forward? With, you know, with retrofits as the maintenance schedules dictate?

Rick Cohen: Yep. So all our new batteries starting I think, from February on have niobate batteries. So we, for the last fifteen years, have used ultracapacitors. An ultracapacitor can take a million charges, but the charge only lasts about eight minutes. Deniable is actually a battery, but it charges the same way as an UltraCap. And it can take a forty-minute charge. Now that may not seem that much to you at home, but the American grid, especially with all the stuff that's happening with AI, is pretty erratic, especially in hot weather places like Florida, Texas, which also had tornadoes. So the ability to go forty minutes is like a lifetime for us in terms of reliability of the bots.

So when there's a power flicker, we want our bots to get back to a home station which is on a charge plate, and in the past, sometimes eight minutes wasn't enough. So this is just one more thing that as we show new customers what doing with battery technology, most people are operating their bots with a third rail. It's kind of an electronic wires in the system. And so you have a when you have a flicker, the whole thing is down.

But so the progress we've made on battery technology, and we've taken stake in this company, it's very, very exciting, and we can actually use these batteries for other parts of our system, and sometimes actually to help our customers keep uninterruptible pyro supplies in their warehouses. So it's just one more thing of the MARCHER technology that we had a problem. The American grid is pretty bad. Erratic. And so we're thinking, how do we solve this problem for these automation systems? So I think this is really gonna help us in life sciences and a bunch of other areas. But just in general, our systems are way more reliable than they were even two years ago.

Jim Ricchiuti: Thank you. Follow-up question. Just as we think about your fiscal twenty-six goals. I'm wondering how does geographic expansion figure into that? Obviously, you've got a site in Mexico that you're working on. And I'm just wondering if there's an opportunity you think, in fiscal twenty-six to perhaps get into Europe?

Rick Cohen: Yeah. As a matter of fact, half our sales team is in Europe today. So it's been interesting with Europe because so many of the great automation companies came from Europe because Europe had either tight smaller land spaces more restrictive labor laws. But as we go to Europe, especially with our smaller, denser warehouses, people are really getting interested. We've been doing this long enough that reliability issues are not a problem. So I'm very optimistic about Europe. We see lots of opportunities.

Jim Ricchiuti: Thank you.

Operator: Thank you. One moment for the next question. And our next question be coming from the line of Ken Newman of KeyBanc Capital Markets. Your line is open.

Ken Newman: Hey, thanks. Good evening, guys. For squeezing me in. Izzy, I wanted to go back to your comment about the change in the phasing of the revenue. I know you said you expect less pronounced sequential revenue growth in the first half versus the back half. Just looking historically though, I think in the last three years, sales have typically been down sequentially, high single to low double digits, four q to one q. The midpoint of the guide is assuming something that's a little bit better than flat. So just wanna make sure we're understanding that growth comment for accelerating growth in the back half versus what already seems like a bit of a stronger start versus typical seasonality?

Izilda Martins: That's fair. If you take the high end of the range we just gave for the first quarter, we would sort of break the trend that we've been typically seeing, at least from what I saw the last two years. Clearly, that's our main focus. But if you take, call it, the bottom end of the range I gave you, then that's really just about 1% less than where we landed in the fourth. So it depends. But if you take the midpoint, we're kind of flat. To exactly where we achieved in the fourth quarter. But internally, as you can imagine, we're trying to get past this lumpiness and really be continuing on continual improvement.

And so although I guided right in between, guided a slightly under where we are in the fourth. So the guide was 06:10 to 06:30. But if you take that midpoint, that's really where I go about this less pronounced sequential improvement. But the overall goal, to be clear, is not to have that lumpiness in the first quarter going forward.

Ken Newman: Okay. No, that's very helpful color. I appreciate that. And then, and secondly, for my follow-up, you know, we are hearing some more comments from hardware-related manufacturers around higher DRAM pricing. And memory shortages. Rick, can you maybe just remind us how memory intensive are the Symbod deployments? And just any comments on what you're seeing broadly from chip availability and pricing as it relates to your ability to keep margins stable. Even though I'm sure you're able to pass through the pricing. Is there a risk of, you know, just nominally margins kinda stepping down?

Rick Cohen: No. Not for us. I mean, our bots are mean, basically, what our bots are doing is transmitting data back to us, which we then process in the cloud, and with different various algorithms, are mostly proprietary. So yeah, we're buying more cloud storage, but not significantly like the super big guys are. And it's coming down in price. But we're not doing that directly on the bots. What we're doing is we will take the information that the bots transmit back. That's a controllable expense, though it's going up. And then reprogram the bots for different various edge case behaviors. So like a bottle, see something and say, I don't know what to do.

And so it'll transmit back to us. But the bots are being trained, but the bots are not truly independent AI machines. We kinda take that information back do the processing, run the algorithms, and then send it back out a software release. So chips are not really a problem for us. As we get bigger and better. I mean, think this time next year we'll have 20,000 bots. So we're a major factor for some of the medium and smaller-sized companies. And even NVIDIA, there's a certain amount of the lower-priced chips are what we're using. We may upgrade some of those chips, but they're not the $25,000 chips that other people are buying.

And we don't use that many of them.

Ken Newman: That's super helpful. I appreciate that.

Operator: Yep. Thank you. One moment for the next question. And our next question will be coming from the line of Mike Latimore of Northland Capital Markets. Your line is open.

Mike Latimore: Great. Yeah. I guess I'll just build off that last answer. I guess if you're expecting, you know, 20,000 or so bots in a year, you give us kind of a baseline of where we are now?

Rick Cohen: Yeah. I mean, we have about 15,000 bots right now.

Mike Latimore: Okay.

Rick Cohen: So we expect to keep growing, and there'll be different kinds of bots that we'll use. There'll be different versions. The back of store mini system will use a similar bot. So there'll be different versions of our bots as well.

Mike Latimore: Yeah. That makes sense. Then I guess just on the new system starts in the quarter, I think you said there were 10. Were there any break packs in there? And I think last quarter, you had guided to sort of, you know, mid single, upper single digits. And you are you or should we still think about that as kind of the run rate for a while?

Izilda Martins: So I you know, there's a mix of the 10 in the 10 deployments we had in the fourth quarter. Yeah. There were a couple of breakbacks. Sorry. And your next question was can you repeat your latter part of your question?

Mike Latimore: Sure, sure. Sorry. Yes. Last quarter, I think you had guided I think you had guided to system starts being in the kind of mid to high single-digit range, and then you did 10 this quarter. So I guess any new view on the system start number?

Izilda Martins: It's something we don't typically guide to is what our, you know, call it system starts are going to be or which ones are gonna be moving into operational. Think the best way to think of it is although I said historically, I wanna get away from the lumpiness in the red I do think, though, sometimes we do have more of a tail end of those deployments in the fourth quarter. And we have a healthy amount that we have throughout all the quarters of next year. But I think it's less about trying to manage what they are and more about, okay, the size and how much is gonna be coming through in the revenue.

So more importantly is the guide of the six ten to six thirty in the top.

Mike Latimore: Yeah. Okay. Great. Thank you.

Operator: Thank you. One moment for the next question. Our next question will be coming from the line of Greg Palm of Credit tell him, your line is open.

Gregory Palm: Yeah. Thanks. I wanna go back to systems gross margin because that was certainly a highlight, and it sounds like you're pretty confident that can continue to improve. Anyway to maybe, Azi, if you can sort of break out or bucket out some of the positive impacts happening from an improvement in the quarter? And just sort of broadly, what's standpoint relative to maybe the last, you know, twelve or eighteen months?

Izilda Martins: Yeah. I mean, I think we keep going back to what the same thing, but I think we've actually seen it over multiple quarters. And really, the way I would think about it is we thought a little bit of, call it, a in our operation services. But yet, overall, we had a terrific gross margin on the bottom line. So if you just if you go through all the map in our earnings release, and I know it's not the easiest thing to track to, you'll come back to that the systems is really where the powerful improvement is.

I think if you unpack the quarters, really what it comes down to, last year at this time, we did have some cost creeps. And I think if you walked the halls here in Wilmington, what everybody reminds me of is that we did have that really disciplined cost management for the entire year. And with no cost creep in how the supply chain supply chain team installed the systems, that's really what's driving the overall systems gross margin. And not to mention what it become as we deploy the more denser system. So even before that, I think that's really what's the highlight.

Not only in the quarter, in the highlight of what we feel bullish about what the system's margins will be going forward.

Gregory Palm: Okay. Yeah. Makes sense. And I guess, Rick, I'm fairly certain that Medline was a pretty large user of another competitor in the warehouse automation space. So I'm curious does this have potential to be a competitive displacement, something that could be expanded know, from this initial site? Like, I know they've already automated a big chunk of their footprint already. So just wanna hear what the actual opportunity with them could be over the years.

Rick Cohen: The answer is yes. Our technology does things that other people's technology doesn't do. We also can augment some of the other technologies that we've seen in some of their facilities. But we would do bigger projects. And I think if they like what we're doing and we I don't wanna mislead anybody. We don't have a contract for any more than one. But if they like what we're doing, I think we have a huge opportunity with them.

Gregory Palm: Okay. Fair enough. Appreciate the color.

Operator: Yeah. Thank you. And our next question will be coming from the line of Keith Housum of Northcoast Research. Your line is open.

Keith Housum: Good afternoon. Hey, Rick. I know it's kind of new news here, but, you know, the largest retailer in The U. S. Is scaling back some of their investments with I guess, a smaller competitor of yours. I guess, any thoughts on what was perhaps driving that? And any does that dampen any of the enthusiasm that you see from your customers about the use of this type technology for the fulfillment centers going forward?

Rick Cohen: Yeah. No. Actually, it's actually supercharged. The interest in our technology. So what's happening in the e-commerce space and in the supermarket space in particular is the congestion from all the people picking orders in the store the DoorDash and that stuff, Instacart, was a great convenience. But it's really very confusing and messing up the stores. And so what we're talking to people about is how can you put 20,000 or 30,000 items in 10,000 square feet and deliver in a marketplace or a city that could actually use the fresh produce from the store it's e-commerce is evolving. In the way of, you know, the biggest guy in e-commerce delivers 1.2 packages 1.2 items per delivery.

But the retailers in the food space are delivering probably 15 or 20 package order. And so it actually allows them to do a lot of things that you can't do when you're just delivering one or 1.2 eaches.

The reason I can't speak fully, I mean, have my own view, but I'll express it here, why that retailer made a change of mind with that technology, I think what you're starting to see and where is that we can actually use the same bot but pick each and pick each's or use a bring a bot can bring an item or a number of items to a pick station, very similar to what we do in our break pack installs, and actually do customer orders, which is initially, this is what we've been trying to explain to people. Three years ago, we did a break back.

Where a bot would bring a tote to a person, the person would pick it, and then we basically batch pick it. The same more or less concept can be in the back of a store, except you're picking a customer order. And so the real problem that people are trying to solve with the e-commerce now is speed of delivery. And much more local. So I think our commitment and our largest customer asks us to develop this for them we're really excited. This is a very, very big market.

Keith Housum: Great. Thank you. Appreciate it.

Operator: Thank you. And that does conclude today's Q and A session. I would now like to turn the call back over to management for closing remarks. Please go ahead.

Rick Cohen: Yes. Thank you, everybody, for joining our call tonight. We appreciate your interest in look forward to seeing some of you in the coming weeks at investor conferences that we'll attend. Goodbye.

Operator: Thank you all for joining today's conference call. You may all disconnect.

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