Symbotic (SYM) 30 Jan 232023 Q1 Earnings call transcript

Company Profile

Participants

Jeff Evanson	Vice President, Investor Relations
Rick Cohen	Founder, Chairman and Chief Executive Officer
Tom Ernst	Chief Financial Officer
Matt Summerville	D.A. Davidson
Andrew Kaplowitz	Citi
Mark Delaney	Goldman Sachs
Nicole DeBlase	Deutsche Bank
James Ricchiuti	Needham & Company
Michael Latimore	Northland Capital Markets
Chris Snyder	UBS
Rob Mason	Baird
Joe Giordano	Cowen
Derek Soderberg	Cantor

Call transcript

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Operator

Thank you for standing by and welcome to the Symbotic’s First Quarter 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I will now turn the conference over to your host, Mr. Jeff Evanson, Vice President of Investor Relations. Please go ahead.

Jeff Evanson

Valerie. you, Thank everyone. Good afternoon, Symbotic’s first webcast. to XXXX quarter Welcome results

Jeff VP of As Valerie Relations. Symbotic’s am I mentioned, Investor Evanson,

Our press risks on materially including assumptions could release as statements, actual from that forward-looking and cause the are discussion those today projected subject forward-looking to to results and in that will uncertainties this differ include statements, a factors the release during financial filings with are in SEC, statements factors which call and in forward-looking cautionary the their described of in Symbotic’s result statements risk any by entirety. and qualified regulatory made based

most this in financial website to to measures. is the non-GAAP during U.S. release, GAAP non-GAAP forecasting non-GAAP our business of measures the our planning, their are these SEC not performance, addition, Generally call, not other in that with under file management used measures as press to We In available comparable of financial and allocating we evaluating believe may in will certain issuers. recognized resources. comparable which financial which SEC. Reconciliations refers be the included and measures and these discuss Accepted on reported non-GAAP These including Principles, Accounting is assist section our Relations by are measures measures measures Investor

provide to financial EBITDA. net for loss GAAP which Today, These we today, are comparable will including providing EBITDA. adjusted quarter, measure for guidance guidance the are the we revenue and second not not – adjusted is most

such for and/or cannot certain not of control are required reasonably reconciliations adjusted to predicted, for outside are EBITDA GAAP financial We to items as measures, stock-based because provide able of provision reconciliations our compensation. the be such

Ernst, Chief and XXXX follow results, by Officer. Q&A. are Symbotic’s up will Rick we will Founder, with our discuss Tom Chairman call, quarter Executive and Chief Cohen, and outlook, we first executives These today’s then Financial our joined Officer; Symbotic’s On

So Rick, sorry, go with oh, – Valerie ahead. that, I am

Rick Cohen

quarter, about excited operating and we opportunity. thank reflect the team our execution. our I and a improved their team revenue our is our work Symbotic for results great off adjusted hard first are Jeff. profit start strong to XXXX triple-digit execution our and margins. outlook. delivered Thanks, growth and excellent gross of Again, entire both In growth

we existing Last of outsourcing highlighted plans on to build quarter, our base our partners.

During full we as bots, this well to additional suppliers added to cells our partners X and outsourcing installation. deployment build to growing chain and manufacturing for redundancy. quarter, supply capacity process of construction as span and Tier our These ensure now meet demand to lifts

growing us reduced and systems costs of demand growth. contributions We will reduce as help our deployment the they partnerships high also to extraordinary creates time delivery us satisfy to about are the our partners capacity of and solutions. streamline system of accelerate excited while help our maintaining These rate deployments

continues supply $XX talent. for our also and improve, solutions continues at and our to stands to our summary, we Demand grow backlog In now moderating, continue contracted chain attract billion. top to

Tom? discuss and Tom Now, outlook. financial will our performance

Tom Ernst

you, Thank Rick.

system deployments to quarter multiple Our in deployments of one first customers, XXX% million and quarter X operations. year. the initiated system year advanced new We XX during have prior We grew quarter with the first up system period. XX $XXX the X systems last quarter production systems of now planned, as last from active over revenue fully-functional and

X both by during Our progress quarter. the deployments started already on underway deployments and extraordinary the revenue growth was driven

outsourcing. by our our the our are gaining benefits of processes streamlining We deployment efficiency and in realizing standardizing deployments systems,

securities, equivalents, including grew $XX million to million $XXX and marketable performance. sequentially due to cash favorable capital Our working

have capitalized watermark. our more million to resources believe plans well strong our remain be we will quarter’s We low Looking believe and achieve growth strategy. on last very forward, $XXX we adequate balance than of a to hand execute

as begun to have the deployments small recurring as X revenue sequentially operations. XX% to expect to a relative well sites. systems near customer margin our revenue share gross as higher to to In we now Over operating provide grow revenue grew production be an powerful growing to operating mid-term, of move become our have revenue system have to at waterfall, leverage mix systems than should recurring We much Recurring revenue. rapidly time, increasing systems as completions our to business. revenue

and we investments reflect that in this, SymBot partners margin stock-based still comp, gross pass-through initiatives, costs. we of elevated results our quarter costs have points expenses scaling declined of first costs still cresting anticipated. redundant first our Our and with excluding had basis with such innovation operating quarter, BreakPack. significant the These steel demonstrating XXX ongoing In Despite ramping operations associated sequentially. the ongoing rapidly associated expenses, sequentially, the increased and burden as

expenses. we record leverage Operating and a first the a improved quarter rate driven as adjusted in by EBITDA loss XX.X% operating compared achieved our X.X% revenue growth ago to moderating year

addition increased Cost-adjusted contributed sequential UNFI as customer the this non-Walmart start X% backlog additional deployments to of an customer $XX billion. the existing quarter pricing, Our and increase. to a

the our our guidance an range. to EBITDA loss of adjusted at XXXX, million of we of $XX between $XXX revenue XXX% revenue growth year-over-year fiscal the million. revenue midpoint second and represents outlook and to for Turning This million expect quarter of million $XX $XXX

great start XXXX is energized. and our is off a closing, In to team

supply year the transform excited our chain. are about ahead the to and opportunity We

will backlog. rapidly an to update you quarter continue scale to We our with next our our forward to business on speaking deliver We $XX progress. look provide again revenue to billion innovate against and

We now will you Operator, welcome your the questions. open please Q&A?

Operator

Summerville comes of question first Matt Our Instructions] [Operator Davidson. D.A. you. Thank from

open. is line Your

Matt Summerville

Couple questions. Thanks. of

I finer rolling a steel should be then First, we about and efficiencies that from seemingly have from with of And we quarter, last You diluting mentioned scaling OpEx, gained? cresting those be And about here? maybe maybe should moving so on OpEx of and that margin? point thinking right the things on is here kind kind margin, how a gross put think to direction how items in then forward gross margin follow-up. more how much still

Tom Ernst

the you Thank Yes. for Matt. question,

So prior had the quarters in the an That adjusted third-party OpEx we first expenses. $XX OpEx was million. we both as on of side, reported of lower fewer

a way to some outsourcing variability is to is think and quarterly our shifting of projects. as of that just is partners are the engineering we I of it think that some about So, structural

through Looking is to X% quarter-on-quarter. that, our headcount up about

the our can last overall resources began still quarter gross as investing in quarter-on-quarter and third-party of dependency margin So we grow we to you shifting business. gross margin, This less system of able drives see their and saw basis by are side, and effects Perhaps that into improved some are those hiring XXX an make which some benefit gross margin sequentially of that over points. attenuation on we see to those of our costs gross of terms a scaling We to recede. really the to scale made of margin. way have is some project heads

so continue that that trend be generally, And quarters, we stair-step. as expect quarterly forward progress look we on to coming over can although the

in we won’t some give expect less the that you steel steel to forget effects gross make see exactly some costs predict installation. of in with those months that with are do along and think the headwind. should I quarters, costs we to us guidance start attenuate, well, steel But our as how the progress of to prior begin as for pricing margin don’t much business associated through So flow scale lock those coming that you about of begin to of a of of A the in an XX to way over – general against trend that.

X So X look for to have if you at months. prices lower steel indexes, price about the the steel really been

So the prices coming quarters question, and Does Matt? the expect to of rather kind answer of lower right few benefit than we that away. steel over wash the

Matt Summerville

an sense. accelerate does. from Yes, implementations? do And outsourcing incremental you. an what of needs rate? as a to And think optimal Symbotic reach you. company are makes take the Thank that standpoint to further That implementation the will when just sort steps Thank here system you forward, key then follow-up, from

Rick Cohen

Yes.

a we with face-to-face this quarter spent of So suppliers. last lot time

pretty much we So suppliers. our locked in have

very of up going that suppliers be quarter. second ramping good are the and We a to have third couple in

supplier systems to they So we are down. with little we come competition, mix. are we well seeing our the pricing a learn outsourcing and as And the pretty make better seeing set are

rollout. are finding We we as of we seeing faster. that will with And are work efficiencies of the it, the happen small components also installs redesign suppliers and

see the So think outsourcing should I the next to months, a X you the full of suppliers. X benefit of

Tom Ernst

about as And can us add the long-term, as that, opportunity to for I this the think system see we a for faster deployments. where be just to we engineered continuous will Matt,

it. we going Our going are efficiency, to partners to are gain speed with gain

for huge efficient. can the highlighting Rick to speed next that, that months So continue – these us. gains are and X years X we to have X to There more get think to deployments we in coming over to is addition

Matt Summerville

you both. Understood. Thank

Operator

comes Instructions] [Operator Citi. Andrew Our the Kaplowitz of of you. Thank question next line from

Your open. line is

Andrew Kaplowitz

evening, Good guys.

Rick Cohen

Good evening.

Andrew Kaplowitz

give you us ramp Symbotic to are for deployments business. you guidance system conservative, be but despite the of I color are your you that the little QX, scaling rapidly into at want a Can predicting revenue your its and revenue more am revenue sure seeing? you flat bottom sequential

macro customers you deployments come risk is there So if back could concerns? you back hold that just is never there conservative or being of or are constraints supply something you down chain given know given any slowing

Tom Ernst

the Yes. Andrew. Thanks question, for

rapidly. So you we are growing are right,

we under as you highlighted last that’s systems year-on-year up full XX%, went of from into translates production now deployment, so growth, XXX% into which the of here, quite number X% That that one Our rapid. at net revenue is think quarter.

against planning scale are deliver that to we So rapid and growth.

did QX – one our I – call the we see bit few delivered last think – the these key of concentration we about few really was a systems prior first the somewhat quarter, a things revenue, of as little stacking of something wave well. of first systems earnings systems the over in into of of those deliver talked kind the

function seeing a begin that meat But systems, a growth to the in we quarterly variations more just waves more some systems of of they our of the to begin see out deliver smaller is of number and of with actually will their deployment. more some stacking the more sequential we going uniformly of of are of revenues As you be to are do concentration is and to spaced what and bit. really, the smooth

Andrew Kaplowitz

it you backlog then And helpful. mentioned go that’s And Obviously, of billion. to $XX continues it. Got up.

talked $XX quarter. think about than greater billion last you I

go given more still Or so new it’s point? begin backlog win you thinking of contracts do that is begin to to to just into eventually, customers? you continue Or will eat you this Obviously, that to about to down ramps this addendums now awards it have? Should backlog, So had? existing up? revenue are But revenue more at work know, with big. new sort how as we be

Tom Ernst

for Thanks question, Yes. the Andrew.

backlog So did revenue million of right, you’re quarter the in the by about $XXX the in out increase net quarter.

signed that last reflects we It couple that on existing UNFI call things. was quarter. this additional the a quarter’s It earnings reflects of reflects also new customer, that So during an really new relationship announced the finally, for we that the quarter. once deployment reflects in you’ll existing the year. year And expect pricing start backlog it that calendar see in started each a when cost-adjusted then we we quarter

average per bit think backlog, different the how shifted. in a cost about So hasn’t you strategy should backlog? the system Our little

billion We’re thrilled the backlog. $XX with

Our really to have. being opportunity the to and so having backlog but customers drive happy ragingly goal to the our is and we really against much, – scale not growth drive

add two primary can or want them. than strong we to in have the as control more one looking we the our that the new We’re given do per that year here the near-term, our systems as demand as backlog rather add a such customers for strategy to we by backlog

Andrew Kaplowitz

Appreciate color. the

Tom Ernst

you. Thank

Operator

Instructions] Our of Sachs. of [Operator next Mark from line you. Thank the Delaney comes question Goldman

Your line open. is

Mark Delaney

I thank Yes. role if very decision I elaborate expected? materializing have touch hopefully CEO you points you streamline that it, that Could to your taking sort the you create of for questions. as was retake the relationships. to and in customers understood Good afternoon, some think as more your the that’s Rick, much on, efficiencies

Rick Cohen

Product most They for really – interaction for me. – so Officer. talking I really Yes. time. I’ve The time, me thought. Chief want a Customers out the been way for mean CEO to long it’s short the of to I’m time. It’s playing the of period been have except yes, a Development to the I talk

think some the And asking I deep background, because products of is, about that of are customers, things one talk to distribution viable. they they the so are thinking when my are is just of they

follow-through And makes logical. equipment big cycle, so it the logical, of sales just piece the the selling the pieces then proof-of-concept and of these

thought I it exactly playing pretty it’s the would. So much out way

Mark Delaney

very may That’s going you us Thanks. of into any the in terms systems And systems maybe question you’ll cadence baked full contemplated to better understand that perhaps installations and guidance, helpful. in started the completion think And forward. be then quarter was around guidance. what’s help other how second number move of this my new think of into if coming Thanks. about

Tom Ernst

Yes. Mark. Thanks for question, the

anticipate get basis you you add do adding potentially a quarter. on exactly add. growing how will systems over systems add added or on look been systems forward. that that should bit as for in in have expect look forward couple few we less revenue we given already quarterly that a a a don’t much quarters. the we as the and as quarter Those numbers continue systems quarters, we the So But little each as It’s more predictable coming to many books

installation deliver actually testing you recognized know to the concentration we’re on of and that those middle the The contract basis, systems of carry of when part part revenue the of meat thus and completion doing we bit linear. half our middle think and system. revenue we the the a reported has a that but the it’s not of second I is the a of the value from percentage that

early meat as as those of benefit So revenue not systems the the systems into production, are that do installation. well but quarterly strong

Mark Delaney

Thank you.

Operator

you. Thank

the Our next from of question DeBlase. comes line Nicole

Your line is open.

Nicole DeBlase

Maybe made It from just opening progress outsourcing afternoon. like sounds that. remarks Good good the Thanks. Yes. on you initiative. guys on that have really the

baseball what are guess, inning terms, to were outsourcing? your all with So I in if of you on in about it talk projects we

Rick Cohen

Yes.

would would say fifth, I the we terms, baseball probably we’re inning on in – say, So have I in sixth outsourcing.

and are we doing We partners haven’t will good – a the job, – we the – finished process but yet.

some some – announced announced So we it internally. We’ve bringing them new we’re I think yet. haven’t on of

new, help on bringing the experienced work some of part us to the partners very We’re business. manufacturing outsourcing

a So game world a The little is is than plan the we thought, gone probably feel better And say. it, where which showstoppers. to thing really good we about bit nice no of our is and automation. lot of have because warehouse backlog there right warehouse our in a now And partners big of out EVs. we making particular automation interest and interested in

very happy frankly, attention are the we’re quite we from So with world. over getting all the suppliers,

was that case the So not a ago. year

inning, sixth maybe guess, inning. So even I seventh fifth inning,

we where We’re pretty happy with are.

Nicole DeBlase

– to for Rick. Got R&D.? Is one case it. cresting. helpful. guys also talked I also about then of you also you about innovation you initiatives That’s know to Thanks, the have that underway? just guys OpEx And for question more subcomponent all of trying expected is the think just that the Is that crest,

Tom Ernst

the question, for Thanks Nicole.

expect So modest particularly near-term. our I in OpEx, growth would

in was if right reported quarter third-party last Our moderate with about comment the But OpEx terms kind projects. looking is special maybe general of we light overall, of generally growth, this three in take and you that quarters expenses forward. crested relatively

as it specifically well. yes, R&D applies terms with to In R&D,

Nicole DeBlase

it on. pass will I Thanks.

Operator

[Operator the Company. of Thank Ricchiuti from James & Instructions] you. comes line Our of Needham next question

is open. Your line

James Ricchiuti

Good you. thank afternoon. Hi,

existing referenced an I of your order one you an Was customer. think customers? this legacy from

Tom Ernst

for was. It in our C&S Thanks that, disclosed Wholesale Grocers. proxy in filing fact, question, customer Yes. that the And James. we is

James Ricchiuti

couple for on on your the for newer you instance? been business getting in of to it. from North And the manufacturing to that Got and take over and is the new wondering, And ramp, you potentially most talk the maybe your see bringing about the take talk can I’m as interest your wondering, about supply the to potential America. some you Europe, business? on U.S., ability, expect there I’m you’re you’re quarters you contract of has and in business chain specifically, customers capacity capability And next

Rick Cohen

fairly – but We’ve interest interest it’s We from had Yes. cycle, Europe. sales a Mexico. we’ve long had from

to – are high-cost pretty That’s markets – So trip these I numbers a and we to interesting. SoftBank. very promising. the a made labor promising are visit Japan

interest. doing are of some but So of we’re the chain in nothing like announce actually, a to with what the partners, to Germany. a while, for announce, places Europe, nothing probably supply Italy, lot partners And

that it them us, installs. are customers is next that our us as also, the kind with ramp in allows the up, from in partners outsourcing doing And we particular and the outsourcing they for more we’re to months them X European of we is if be there to partners, of faster, visit a We actually go we’re product. we good help at sites can complete visit And sites. coming sites do legitimizing things complete have do international so the And X one that to would faster. things Europe, can of looking sites. one of sell partners number out to doing And

Tom Ernst

I’ll create working year. add James, customers operating X that additional X of to just to strategy per that reiterate, while is to kind our we’re slowly, capacity, new

James Ricchiuti

when the from if Okay. you would system final question And you can for completing anticipate me, next fully-functional say? your backlog,

Tom Ernst

Sure. Thanks do coming to a moving systems fully-functionally deployment look James. you’ll for But hard predict increasing to over regularity. that customer question, on the us forward a given we see basis. we get of anticipate as to begin quarters, – with from the complete pattern the into quarterly hit It’s

James Ricchiuti

Thanks a lot.

Operator

Our of Thank the Instructions] you. question Michael Latimore Northland from Capital [Operator of comes line Markets. next

Your is open. line

Michael Latimore

here. Okay, thank Great Yes. you. results

deployment here? terms take, frames, How now? do seeing given the in of what to time are you outsourcing you long added Just some anticipate the of deployments capacity

Tom Ernst

the for Michael. question, Thanks Yes.

progress on So we front. make continue this to

beginning in trend times next early partners from systems now, feel as that our support made where And helping direction. it first take, expect, we right we benefits in having with outsourcing definitely those of light that wave our expect this out in of the the of of you particularly Michael, get an many are front those started extended waves to to would along got extended with We having longer chain sure an systems beginning take the done supply chain. are and what couple than the supply we to that

making are progress. we So

generally two it we’re ago, the ability five, track here working over ago. unlock just to on would us comments with the the or And next with think six I minute move just of few Rick’s really partners we points four, to coming and thought help our quarters. be these the months a where plans year outsourcing in a faster

Michael Latimore

of And So they you a it. in terms Right. backlog there expansions addition customers longer grow new of it customers? would of would be current term, about that as you is then there? backlog as you think or clearly bigger one be Got think kind is bigger contributor opportunities,

Tom Ernst

I see handful both. a our backlog our you’ll existing us of less think to and Again, operations over the here of anticipate and backlog. But new to coming scale mix see you’ll against the projects existing strategy add both new customers that do more quarters, we customers. grow is with

Michael Latimore

it. gross Got one, just last And margin.

want just be you think clear. to some I gave I color;

is How or would the say be So about first – we should for the would year? the to it margin think low fair for quarter point gross trough the gross in margin? year

Tom Ernst

Yes.

clearly, margin, gross reported we we that, that when a said XX% think low I last expected, quarter, we pretty was watermark. a

still we to be progress So Progress but we can the against feel this that expect quarter, emphatically see that low reported we stair-step. much happen, a that’s watermark. very XX.X%, the

as about will quarter. we make each it the progress we So talk

Michael Latimore

Okay, Thank you. great.

Operator

you. UBS. the Instructions] line next Our comes Chris of Thank of [Operator Snyder question from

open. is line Your

Chris Snyder

on systems. a to gross that today to of Is of the XX% company is Thank versus the target talked line, accelerate margin level you. high the past, deployments. any negative of helping still has gross kind with target margin within offset push higher I achievable system to high believe because or in teens outsourcing? spoken outsourcing the is But I rate there the understand a

Tom Ernst

Thanks the Yes. Chris. question, for

think long-term we our In gross outsourcing margins our that are under initiative. higher fact,

about was on talk last Now aggressive ramp we some along the definitely ramp bring to partners, coming partners. of these with short-term some did expenses to quarter these outsourcing increased

ramping resources, not only through of kind chains and can that COGS, have and but are As right, of as costs you OpEx. redundant also flow partners we supply imagine, a host redundant whole through we flow

ability a many, those margin. our we these and that a transitory but are to still the But outsourcing own. only do negative than gross long-term systems some costs the very do concurrently ability seeing to margins, and of not deliver more quickly with many gross the near-term program we to higher that with associated the just to systems impact we to over less on that, think flips risk is So, leads could positive

Chris Snyder

from that the Thank you. OpEx fiscal gross that. up QX, If fiscal of loss. could roughly midpoint, margin to the Rick, percent guiding due that revenue is mid-single look just or down to effective partners? Is follow-up but quickly just the outsource the maybe digit, at side the on a the digit company on high-single I if I EBITDA And unchanged margin is ramping like side? QX

Rick Cohen

one of projects the made low QX. I we that amount my a was in fiscal saw in relatively special comments remarks think of prepared I third-party

costs quarter-in, those on So, a variable, are of a little bit – kind can predict to easy quarter-out less be basis.

an average and the to think more help? little my costs looking third-party for the of we I that relative bit is QX in terms quarter of Does year. expect guidance of of one-time type forward a what implicit

Chris Snyder

engaging facility, market? of capacity on am you. or just the Thanks. guys coming could follow-up at it Thank I more And is upgrading you existing the if kind just more backlog warehouse of is Absolutely. thematic, with or if side, it you essentially the are Thanks. so customers, on modernizing something projects greenfield, more to an or maybe new look I brownfield

Rick Cohen

Yes.

very backlog, Our the to about a very, we market retrofits the market with That greenfield well. existing being opportunity said, concentrated over we is large as long-term, Chris, heavily brownfield. to as think see

that generation But end-to-end have a a is a we no benefits efficiently know key We systems. incredibly bring shifting just market, think automation technology versus the in that there business legacy economically to more effectively really efficient. environment. one automation the are and much greenfield ROI we much, brownfield other end-to-end as can is our I work as one of you key – of stronger

backlog more hear highly over anticipate well. and will the talk as So, is years coming us Today, about greenfield brownfield. we more do you opportunities that

Chris Snyder

you. Thank

Rick Cohen

Thank you.

Operator

Thank you. please. One moment

Our Rob Baird. from line next question comes of Mason of the

is open. line Your

Rob Mason

I afternoon. question, Good Tom. Yes. just had quick a

expect cash be you through you think at to cash Obviously, mentioned that build – inferring, you the low the year. I watermark. build you

speak how payments you if curious curious your profile am was could the just how on flow I lumpy the a Just to quarter-to-quarter could from this play should customers out cash be year. basis.

Just generation free any should the first plan cash year the secondarily, capital how And think through cash that how public? maybe on had, intensity in the flow we through about generation push outsourcing you or you with have year? the or the then when CapEx been view change has you from came there

Tom Ernst

Yes. the Thanks for question, Rob.

correct, lumpy. which fewer, are revenue from the tend are far smoother, bit quite as lumpier our customer large have from payments, milestone is as you customers is therefore payment bit side So, well a that our payments much a to quite actually than smoother. are our cash We vendor flow our

feel enough for potentially light. that type relatively and sequential That quarters. is you year. cash say performance Shifting our we question, cash, quarterly down confident was up see the low be watermark to could definitely said, the which will of to our your CapEx position, starting of to we million QX, $XXX the So, start being CapEx on anticipate our that

more long-term, a do pretty projects we year, potential little definitely office we the we as the Our said, to there kind about operating is have associated of CapEx plans use equipment with where mid, test CapEx. being be tools. But essentially is for of our could That and expect bit we light. engineering in near-term, the this that CapEx think

Rob Mason

payments, customers, with new – you continue upfront flow cash does Do on, as cash contracts maybe the ones contracts newer like just just brought, brought the one the you that that upfront the flow, for does well? the

Tom Ernst

Yes. We to that like generalize across perhaps pay life cycle support relationship the Rob, working don’t of to negative our wants customer won’t near-term more that pipeline, have speak a a our with We more even customers. But slightly we strong in yes. anticipate in future that thank or capital mean a flow. positive if general, That you. across specific customers. cash to doesn’t I and the even have our we projects new

constructed opportunity for our reserve strong we is positive will So, business that with for now, working But capital. later.

Rob Mason

get in queue. I Thanks. Great. will back the

Operator

Thank you. please. moment One

Joe Cowen. question from the of Our next Giordano comes line of

open. Your line is

Joe Giordano

Thanks for my questions. guys. Hey taking

So Tom, maybe top can us And was the what versus quarter This when like a and massive is the you magnitude guides? top over still quarter you like it contrast last I versus formulated very this very quarter, is last different. how your end, the but think about beat guided, the obviously, actual substantial results end. you over strong

versus formulated when how how you – out, those us came like talk So, estimates different. initial what were like through those

Tom Ernst

we what less predict is Maybe benefit to give little context to one lessening, how you variability. volatility about right, more Yes. just so we we beginning it, a observation from systems and as Therefore, having are to think add up. and the variability

to tighter a bit range. little able get are We

the implicit you bit are narrowing is, think that little ranges guidance our I as see can times guidance in forward. move still a

I pretty to saw So, where QX, the will some beats, thinking and used the back we words significant you QX to top time. point line at back

and little schedules that It’s are key are hitting Well, now kind a a we bit little to led just milestones these pretty we predictable. bit bit more systems. are we rapidly, outperformance. more across strong of compressing more As getting some spread a

Joe Giordano

makes sense. That Yes.

you put in many you want get to rate couple Like And how Is it guys at like trying there XX? even are a here, a been to? and that three even theoretically ago, a As added like you into you accelerating six. quarter? how production up then can to? many you guys do is an target five Like and four quarters have then adding of

Tom Ernst

Right.

to looking and cells, But and we scale doing of construction we these then this to do installation, so SymBot’s and fantastic our partners the quarter, and are designer do, manufacture goal today. add that systems ecosystem to business outsourcing manufacturer for right can we that we projects not those partners each to are have the everything install if enable that be additional a sense. that multiples So, run right. of what an of is makes partners enable system that

on really is this massive focus TAM business that the Our to address exists. scaling

predict believe won’t of I So, we what how we to, doing do gets are many today. it’s but many multiples that

Joe Giordano

curious and is it last. just to you And after on your and discussion maybe the And the Rick, about than that initial see then when the technology serve, future, comes would comments to always I now if you back how it’s to potentially like you for speak that in ideally see today? having the structure share clients and markets itself it the liquidity. where different

Rick Cohen

What’s the the question, share structure?

Joe Giordano

liquidity is Like it I any address am like have there optimal? do Is to from is on get the that – is you you it always I question if you clients. plan do first And – where – of are things can how just on curious asked liquidity always is the comments that? now. the shares

Rick Cohen

Yes. today. No, is it optimal. where It’s I think it’s not fine

think is some are – it today reason I just because point at where said I it’s fine the we ramping.

think times probably there. and we respond at to to – going to reflect our we multiple we more Tom if shares do grow out As are multiple to what going are sales said, to applications, want

And so do that. have we don’t to

is to strong it very about. I a are contracts in are do we think – cash something But position, structured that generating are our and We that.

own me not on and more to will people think uses very when time I we the have the percentage owning good shares. investors the We large having three would we a like, right, Walmart between that up of of and with So, am have and on is hung shares, SoftBank large just liquidity. such

Tom Ernst

is lockup have little we seen of that One Joe, thing have recently you a seen seen triggers benefit we released. may from, a bit have be that

point, relatively unlocked. beginning XX% now Walmart, portion by SoftBank as is To stock held Rick’s have of might well XXX see affiliated but significant shares we partners there. begin those million to increased the benefit now shares less liquid ours, a of and are that that a of alleviate we all out unlocked shares and being the So, of to are employee

Joe Giordano

guys. Thanks helpful. Very Yes.

Tom Ernst

Thank you.

Operator

moment you. Thank One please.

of Soderberg line Our next question of comes from the Derek Cantor.

Your line open. is

Derek Soderberg

And generating just been modules that annually? eight help a Yes. with bit how revenue Thanks license my I digits Is live revenue. higher. start understand to the would me I software of taking have sort you production fee mid-single license that guess in Can software today? guys. for correct? that Hi have are software percentage of many expected wanted I would software is questions. revenue Tom, the

Tom Ernst

Derek. you for the Thank question, Yes.

have are eight that in software production we and receiving of running all fully-functional are mode, up and and So, systems and operations revenue. those

pre Now, generally or were that available of those of – don’t new forget product. launch six

profitable software generally those sold of software go-forward generational prototypes, only than So, effectively not but concepts our much revenue and were revenue. technologies proof model, business six less carry less as

trickle to quarter so of is to starting late thing remember, in waterfall the other just live are the have that, other them since, one prior the come too, two one that last to that was these in. systems The streams was in late quarter, those

small taken continue it while You build to represent should our expect to see growing revenue a continue well, as are to And it will slowly. from importantly but not but in mid-single – I we revenue, build be overall systems our here, think individually rapidly, systems together represent revenue revenue, revenue $XX and backlog, of so, component, taken the portion software a billion percentage of backlog, each digit together. our for those operations

Derek Soderberg

and Got if food agreements within are billion food part $XX And or Curious on any And it if follow-up backlog. I existing then the the in there growth cold storage helpful. generalized the included all is backlog, my then with is of BreakPack. for am applications, merchandise? or just customers non-ambient it. That’s that’s there backlog the ambient very case. curious

Tom Ernst

Yes. Thanks Derek.

should read existing a the – in the and the change new rather that That’s cost-adjusted than the the backlog across pricing backlog with system bulk system two besides of C&S the of the referred to. mix is systems. associated you no, I systems, the So, increase UNFI

Derek Soderberg

the it. that Got backlog, there then there? are cold within And applications in in storage

Tom Ernst

addressed haven’t address as to and something forward. We that might that, be look we hard that’s

Our they themselves. want are customers’ often to to something strategies keep

So, haven’t the our addressed mix of no, the backlog. technologies in we specific

Derek Soderberg

Thanks Great. guys.

Tom Ernst

Thank you.

Operator

the over call remarks. questions time. for Evanson back to Thank Jeff to turn this you. would I’m showing at no any closing I like further

Jeff Evanson

appreciate virtually night. a Thank look great to tonight. And you our joining tours warehouse talk your you conferences, interest on call in next the Valerie. and when quarter. over we or Symbotic, thank Bye-bye. everyone we you, We Have our forward at for seeing

Operator

participating. and you. gentlemen, conclude all today’s you does Ladies Thank Thank for conference. this

disconnect. Have now a may You great day.

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