Symbotic stock drops 38% after revenue recognition errors and revised 2025 outlook

Symbotic Inc. shares (Nasdaq: SYM) nosedived on Wednesday, losing 38.68% of their value following the company’s announcement of financial reporting errors and a significant cut to its fiscal 2025 outlook. The stock closed at $24.21, marking its steepest single-day decline since February, when the company last faced investor disappointment over earnings.

The Massachusetts-based robotics and artificial intelligence (A.I.) technology leader disclosed it would delay filing its annual report for fiscal year 2024, citing revenue recognition issues that impact several quarters. Symbotic builds advanced warehouse automation systems for clients across the U.S. and Canada, offering transformative solutions to optimise the supply chain. However, the restatement of financial results has raised questions about its financial oversight and operational controls.

Financial reporting errors prompt earnings restatement

In its preliminary findings, Symbotic reported discrepancies in revenue recognition, specifically tied to the premature booking of revenue from milestone-based projects and cost overruns on specific deployments that are now deemed unbillable. The company recognises revenue using a percentage-of-completion model, which caused both costs and revenues to be misreported during the fiscal year.

Symbotic announced that its revenue, gross profit, and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) for fiscal 2024 would be lowered by $30 million to $40 million from figures disclosed earlier this month. These corrections are linked to errors discovered during the review of its business processes and financial statements for fiscal 2024.

The company also acknowledged material weaknesses in its internal controls over financial reporting and stated that measures were being implemented to prevent future issues.

Fiscal 2025 outlook slashed

As a result of the errors, Symbotic has revised its financial guidance for the first quarter of fiscal 2025. The company now expects revenue to range from $480 million to $500 million, compared to its previous estimate of $495 million to $515 million. Adjusted EBITDA projections were also lowered to between $12 million and $16 million, down significantly from $27 million to $31 million.

These adjustments underscore challenges in managing complex revenue streams from high-stakes projects, as well as Symbotic’s need to strengthen financial discipline as it scales its operations.

Investor confidence shaken

The financial reporting missteps have eroded investor trust, with Wednesday’s selloff wiping out billions in market value. The sharp decline follows a pattern of heightened scrutiny for growth-focused tech companies that have yet to fully stabilise their business models. Analysts have noted that while Symbotic’s cutting-edge robotics technology positions it as a leader in supply chain automation, such errors can undermine confidence in its management and long-term strategy.

Symbotic’s core strengths remain intact

Despite the financial turbulence, Symbotic continues to lead in warehouse automation with its end-to-end, A.I.-powered robotic and software platforms. Its solutions are designed to reimagine the supply chain, offering high-density storage, machine learning capabilities, and unmatched operational efficiency. The company serves some of the world’s largest retailers, wholesalers, and food and beverage enterprises.

While the restatement and revised outlook are near-term setbacks, Symbotic’s technology-driven approach and market positioning offer long-term growth opportunities. However, rebuilding investor trust will require stringent financial controls and transparency in its reporting processes.

Expert outlook

Industry experts believe that while the errors highlight operational challenges, they are unlikely to detract from the broader adoption of automation in logistics and supply chains. Strengthening internal controls and delivering consistent results will be critical for Symbotic to regain investor confidence and maintain its leadership in the competitive A.I.-driven robotics market.