Symbotic (SYM) 1 May 232023 Q2 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
Andrew Kaplowitz	Citi
Matt Summerville	D.A. Davidson
Mark Delaney	Goldman Sachs
Nicole DeBlase	Deutsche Bank
James Ricchiuti	Needham & Company
Mike Latimore	Northland Capital Markets
Greg Palm	Craig-Hallum
Joe Giordano	Cowen
Rob Mason	Baird
Derek Soderberg	Cantor
Chris Snyder	UBS

Call transcript

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Operator

Thank you for standing by and welcome to the Symbotic's Second Quarter Fiscal 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 and Corporate Development. ahead. go Please

Jeff Evanson

Good fiscal Valerie. Welcome Symbotic's to Thank results afternoon, webcast. quarter XXXX second you, everyone.

Our and risks on materially including assumptions could press as statements, actual from that forward-looking release cause the are discussion those today projected subject forward-looking to to results and in that include uncertainties this differ will 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, 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 EBITDA. for Today, we will including adjusted quarter, guidance the revenue and third

financial not are adjusted to measure EBITDA. GAAP is providing comparable We guidance most for which net today, the loss

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

Officer; Symbotic's discuss Financial Symbotic's Rick Founder, Officer. we These call, quarter Chairman, by and results, our and our XXXX second by today's will and On outlook Q&A. Executive Chief Chief executives joined Ernst, Tom followed Cohen, are

I'll Rick. it to back Now, turn

Rick Cohen

everyone. Hello Jeff. Thanks,

of how quarter, $XX since back about fiscal and get think quarter about have our revenue. the years to interesting made, look million to prototype two on then, systems building we to our posted progress that of were quarter, we in second second talk individual it's XXXX. I Back see perspective As and,

We of challenges. transform and challenges radically to had overcoming those of supply had overcome lots we we a vision chain, are most back and successfully then to the

we full multiple Now systems years operation nine have at in customer later, just sites. two

currently and billion additional are XX revenue We over the systems $X.XX deploying quarter. of reporting in

sub in So, revenue a run have we a a to billion-plus with $XXX one rate two from revenue run company years, grown $X rate. with million

adjusted our results margin, to In significant reflect improving additional improving liquidity. quarterly also addition our revenue gross margin, and growth, operating

running are many as diligently they more teams outsourcing on strategy. new our to efficient deployment working and Our schedule keep executing be projects on and budget a

improve. scaling can good training feel now are we and about and contractor supplier see and far up many aggressively We ways partners. the network of diversifying so progress We a

I As are us a call said a transforming to building class our leader team committed we last of to world the help remain quarter, chain. on supply in talent

that believe long-term. During important we operations. the members, innovating, making our execution key results who are to already sustained added over important contributions and those driving near-term constantly results, team quarter, Scaling are the in several we and but

go, have exciting you and the support progress. making but And doing. our great to realize we we our Thank we supply Thank everyone long are helping us coming a for way vision for interest you. we plane in chain. your what and together as are transforming It's see to

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

Tom Ernst

Thank you, Rick.

an process systems increase and deployment driven new deployments $XXX multiple of to initiated revenue during systems progress. in second one incredibly year. planned, of XX customers, have system in with full active quarter nine the last advanced last quarter year to system seven system now XX quarter operation. We from a We strong compared the deployments by XXX% quarter Second and grew million ago, as

rapid physical from sites. installation Our driven our at growth on was customer strength progress particular by with deployments, revenue

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

marketable million very to favorable resources equivalents and more sequentially restricted including more Our We million, than enough we strategy. to cash growth due $XXX $XX grew capitalized and execute cash strong plans, to performance. believe achieve to our than -- securities working and hand on have adequate capital remain our well

at deployments increasing of continued our should grow system systems Overtime, of cascade, as to to now operating a higher leverage powerful an revenue as gross as production. sequentially as well have grow our operating margin revenue, mix have provide business. nine to share becoming completions moved recurring to We customer revenue Recurring systems sites. to much revenue

severance margin XXX-basis adjusted significant initiatives. increased skill still sequentially. innovation with associated of second quarter elevated gross improved costs by excluding costs $X.X of Adjusted through cost burden points reflect that pass-through in and sequentially, operations. margin The system results These $X.X and our gross goods charges Our restructuring associated the scaling million rapidly XX-basis costs, with lower-margin sold. million of flowed points after

where activities Wilmington, robotic charge we manufacture where discontinued capacity in was Massachusetts, to related inbound we curtailed and in manufacturing This manufacturing outbound were Montreal, manufacturing sales bots. and

Our outsourcing long-term growth, continue and expansion. savings to success strong enables while for setting drive cost also the to us deployment margin stage

drive excluding continue that margin can stock-based operating to sustained the and expenses sequentially, compensation we second invest as in increased expansion. growth innovation In quarter,

compared we our gross This expanding as improved leverage year. X% last achieved and and a quarter operating revenue X% was driven XX% adjusted margin. EBITDA Finally, to last growth by loss rate

outlook. our to Turning

an loss million. For quarter of million $X $XX between million, EBITDA expect fiscal and million $XXX between XXXX, the third revenue we of and $XXX of to adjusted

about fiscal second the continue and transform the our as we to excited through the supply of chain. midpoint are half, XXXX are We

and now innovating to forward questions. on you rapidly our provide look progress to scaling an our for speaking our your quarter and are business We next again We customers. deliver welcome with to update

Operator, will you open please the Q&A?

Operator

[Operator Thank Instructions]. you.

question Our of Citi. first comes Andrew Kaplowitz from

Your line is open.

Andrew Kaplowitz

terms give charge experiencing lower restructuring It than you QX color see in maybe you improvement the of in P&L you But you to to more to you us Tom, into the the of the can and see the much that your outsourcing of impact of are took? you Rick or expect in looks losses slightly Good When evening, slight see? restructuring and transition manufacturing everyone. any like a of on expect in impact QX. how benefit, and revenue full benefit see streamlining would the restructuring? you QX continue could

Tom Ernst

that Yes. question. Thanks, Andy for

charge. as as you This $X $X took severance. million property So, both to as related and and included well we equipment people-related restructuring plant and inventories saw, an million

hundred four of at with in hundred the was planned the a along That a executed that's little over quarter. a a end over bit full-time employees, So little contractors. bit

were transition really the with the savings then operations the our to quarter. on heels the mentioned, manufacturing significant get into successful Montreal, This of of sell as we our follows Rick discontinued curtailment bot benefit seeing in However, the of Wilmington, begin third those as goods and all of of restructurings manufacturing fiscal Again, in those these associated manufacturer of Massachusetts. partners. we outsource

Andrew Kaplowitz

to lower street more I maybe ramp, quarter in just Thanks. you then, now continuing you're $XX your And million in beat little think predicting QX, and about beat but last $XX rise. QX despite predictable million, deployments by the you being revenue your talked a

in somehow us to also increase? a noticed you number more of we pull And didn't steady give did a should or I revenue QX if us that? see forward any you, begin just it's sequential give So, backlog QX to after possible

Rick Cohen

No, sure, Andy.

was same backlog as our quarter. last $XX.X So, billion number

as disclose we So, systems, remaining obligation our revenue growing and we're our smoother. when that contributions expect think we the -- performance the more equal file is that -- period to that Andy, variability outflows do XX-Q. and is in the becoming I here will quarterly deploying our scale match becoming that our

growing new outsourcing really ramping we're fast still and partners. are we However,

clearly variability in Maybe significant of are to for out. still give this we So, sense quarter-on-quarter seeing terms growth. how translates a some

and rapidly do in We XX by the systems expect deployment. that's driven grow to

as look started here half the contribution systems were the second from we the in strongest the second even for nine going be that into XXXX, example. in the is of However, driven to half second half,

those we two, timing So, three actual or nine in growth the of systems post. of short can in or terms quarterly revenue meaningful have that minor differences differences one

sort to time. those and have to over we we begin concurrent as variabilities diminish that revenue So, will in continue more deployment, systems quarterly of expect

Operator

of question the of next from comes line Summerville Davidson. D.A. Matt Our

is line open. Your

Matt Summerville

without First, -- the Tom, believe the having EBITDA can you positivity just basis? maybe you when follow you're sourcing comment up. on out and on on sustainable the have And based be a will successes achieved then I a versus company

Tom Ernst

question, the for thanks Matt. Yes,

the work program. that So, successes continue and certainly our with to encouraged we partners, we're outsourcing with are having

over near that that As outsourcing, ability the believe while highlighted, will believe business a the I it'll And think profitability result do think goal as we emphasize to the to scale term, we our and and begin as higher leverage certainly, greater well, continue to in that I that achieve the primary that to see us in midterm. scale it long long-term benefits was Rick we this will help well. to which much in

guidance. giving not we're while So,

the profitability in that analysts for in think QX. expectations I looking consensus many many, street, are

So, full quite that leverage we can do that operating say to our forward But believe is we're the high. is not looking year. I what

through expense near As think growth in we're of benefits the in and be plan to margins to outsourcing, growth from at the be end continue quarter. OpEx curtailed scale And benefit place believe able moderate. to the this the continue put revenue, that we significantly see of we'll gross can in we we we'll last expanding restructuring operating particular, just term,

Matt Summerville

making pack think and about of will follow-up, if And maybe for a you then bit will? a kind maybe as the be when break you're talk Symbotic with game you time, little of those some solutions and progress ready can you

Rick Cohen

we've really we, releasing made not change all big we come things. it's the maintenance, and the pleased We're and software still though come good some some and that over for That with time, so will a realizing us, making, that to technology and all was the progress sourcing there's value we're are Symbotic. going AI predictive we're and on

great year. with we and coming to prototype have successfully they'll we're But it the things. manage in product. really pleased outsourcing move Two, So, partners. two we it then One, be next to a new

continue to improve. that'll So

was a chain. big without that up six So successfully last should outsourcing the supply underestimate months blowing your and deal in nobody

I'll all happy that. We're how with about that's it's So, very gone. say

days out a a a but that the expect I'm should good pack, -- day It's the our of the see first would to That's months, product certainly six one sometimes two be that. in next results On break for great week. next very It's in still we rough. there us. week, going prototype, probably we

Tom Ernst

just I'll we're today field that, actively Symbotic still too. add that, testing to Matt,

customers. release in units out today that production those many, of announced multiple of haven't sites, at running final So, multiple product. environments we actually many live the general have we But product at

Matt Summerville

guys. you, Thank it. Got

Operator

question Delaney the Mark next from comes line Goldman Our of Sachs. of

line open. is Your

Mark Delaney

much Good taking Thank questions. you, afternoon. for very the

one the second first The completed first on quarter quarter most million $XX is is the roughly fiscal revenue fiscal to sequentially. bridge up recently the from

EBITDA on little bit was think pass-through much and $X Tom, such out know about that improved impacting other elaborate as and you steel. a both I EBITDA of key you I Could that impacting were number any puts million. and revenue a called that sequentially more how takes?

Tom Ernst

question Yeah, Mark. thanks for the

did improve margin hundred We see points by about right. basis you're So, a sequentially. particular in gross

in a So, in two the margin, There talk versus expansion benefited is margin. let factors me gross about that few it maybe address then points OpEx. I'll gross

Margins recurring deployments new as are revenue falling in. revenue. water recurring improving are is and increasing First

gross benefit, it XX-year are growth sequential was still while consistently. and actually while impact XXX-basis from part rapid that Still point have And we of actually points actually so as talked innovation a finally, was well. significantly margin still average, projects expansion experiencing modest it's our are we the XXX-basis a that the in when headwind of above about

dimension Quarter-on-quarter, as well. those are our

$X directionally counter right couple OpEx, goes of So, way. the contribution margin. EBITDA a to factors there. all about increased million by And as overall we factors three in of those moving were about OpEx think which the

Also, when quarter. in financial had for First, begin we if favorable lot earn second the XQ. you fiscal restructuring the less interest work and about Those second betting we plans impact we other quarter, a material have really recall, the put this will project didn't in the and in a place talked in quarter.

just projects of that, some the in had second of more quarter. types activity fiscal variable and We

We to also upgrade talent a long-term overall. our are plan transform continuing

material as little are the particular workforce, shift in in quarter. we a so, bit a our have and the And second average per transformation technical we at talent, employee, particularly of was that higher cost had strong we look towards seeing

saw headcount down while are not total disclosing increase an in numbers example. long terms XX headcounts, we over things in for company over So time that will full those engineering detail, materially in net, we employees think XX benefit being our actually despite run. the we are And the force, headcounts

Mark Delaney

of all on thank was total. Thank one in stands embedded from giving or terms the you helpful of you the to for where And gross second to what is in it My relative the And margin, of you the it in hardware coming on think software? Thanks. relative color, think you where running? comment anymore about for on backlog. when Tom. is some elements much you Could composition how the the update you might kind backlog are these and subscription of backlog,

Tom Ernst

accounting tied Sure. you disclosure, Thanks, backlog as disclosure. And to performance we our know Mark. our Mark, remaining obligation

or of recurring of contractual type partial includes annual of sources commitments, means So populated backlog have XX, that which our systems some therefore, And contributions. question, heavily our part only will your it's Mark? first by XX-year as revenue, revenue only

Mark Delaney

couple gross to of But the is you anything the the in comment running, there? able margin things, on a currently you company can It's are to where backlog embedded Tom. share Yes. relative if

Tom Ernst

you. thank Yes,

So overall XX.X%. margin is gross

of revenues first three our much XX% that in and COGS in financial continue shift of in our projects backlog. the biggest I growth gross the heavily your with that innovation outsourcing our XX%. along in backlog are our are high is XX% particular, difference that that that that margins which to about to question, to We upfront And the closer weighted in relative rapid the the the is and expect impact talked between to structural in implicit really factors

gross revenue only. margin That structural close structural is the XX% to for systems

north the XX% think XX% for about As we the backlog, of of structural recurring gross well see that margins range. component into them we

blend higher those the to XX you So, something -- to together in high two XXs. mid get that's

Operator

the line Bank comes Nicole next question of from open. DeBlase line Deutsche Our of is

open. is line Your

Nicole DeBlase

restructuring. on starting just the Maybe

to So, this see should over the focus expect or color Thanks. of come, that we continued quarter you you next benefit and with one-off, spent outsourcing, the should charges the do quantifying on on more in several all think of what more any we a at these restructuring was quarters? the from

Rick Cohen

Yes, the Nicole. thanks question, for

we manufacturing the in restructuring and I of prepared the as said, in -- my cell, So, significant our remarks, Wilmington. curtailment a Montreal, includes of complete cells discontinuation

that's of our manufacturing we're continuing things So, do. we a while we portion don't of about range date. the the have had significant talk any that across to others today, initiatives Obviously, activity we advance outsourcing to to

time So, there talk be may But about to future. more in we'll talk the about those as it's them.

Nicole DeBlase

to And Got it. steel dynamic. just shifting Thanks. then, the

take second a So a continued You then should of into sequential guy from steel talked higher like bit kind maximum this the it guy, quarter that that Thanks. being year-to-date. year? has it is of steel? expectation the see in turn you inflation to a does sequential Is benefit bad the good the about half

Tom Ernst

a bit shown steel for question, Thanks pull Yes. if you're volatility. the of the quite And it's up you Nicole. chart, right,

seen XX weighted to is So, steel months tend prior installation months our the purchases phase. installation the dollar where based the to in date, revenue on to to what concentrated, actual be XX we've

be So, to quarter the some max we would that we've the before benefit uptick you our fiscal see some begin actually expect of seen QX recently headwinds. create to

we things fortunate go So, costs Which predict these nature. to things it is even one model onto allows because of going pass business of a hard onto that where are to percentage to have report our going of -- the basis. us it terms the is these our making largely our pass impact very these in gross dollars a margin on profit costs customers, though does predictable, what

Operator

from Our question Ricchiuti of comes of Jim Needham. the line next

open. Your line is

James Ricchiuti

a see benefit are on that making outsourcing cited or the one ramp you're trying if these this but additional that gross question but is are quarters, partners? of gross you noise, of next ramp-up understand in if background enough a two several -- more there could be important still sounds also progress there If continue we're to margins. partners, you to these be going tailwind a incurring you're days is outsourcing -- the where early in to to to costs the of Just margins, that I'm in your exactly

Rick Cohen

the forward. question look as tailwinds James. we for Thanks, more see We do

Now do our we have a do are lot work outsourcing we still -- of have to still partners. with

entire outsourcing chain, while across So, happening we we our have acquiring value significant each still working of on are those. partners across more

mutual and So, with together manufacturing of going terms and collaboration our also partners to communication in benefit expect we work that time. our over these operations is

And so, rather multi opportunity multi-week a a just our over that improve timeframe this is will we timeframe. provide quarter efficiency something than to think

just we do confidence capacity some up there's things that we're partners benefits. now the that some able benefits the that then provides own and immediate near-term And like our discontinue and running operations, that these have to

-- a Jim, quarters. opportunity it's a of say clearly significant I'd but So, have we mix, we're roadmap over many

James Ricchiuti

don't if at advancing And what system want how anticipate many know I'm to rate deployments which but scaling, the in comment also would thinking quarter? you're is this, trying understand I to current you on the you

Rick Cohen

question, the anticipate quarter? in initiating we how Is do many this

James Ricchiuti

I'm Yes, that's right. sorry. Initiating,

Rick Cohen

for Yeah, variability in there think so, can be second quarter. four. tend seven We we that reported numbers. the last do quarter. guide our in deployments We don't quarter-on-quarter to just I those initiated system one fiscal the in quarter fiscal

quarters is time, sixth seven should be assume So, as quarter strong we Jim, we we plans. and in relative our that quarter feel this we did the think over downs But about last ups to quarter and look of the exceptionally that will to we did there an number. some like multiple quarters grow you terms and growth

Operator

Latimore Mike of Northland of comes Our from line Capital. next question the

Your line is open.

Mike Latimore

improvement Can you give just availability is is tone terms improving, Just there that of occur? further around that? some that in could supply

Rick Cohen

not been improving. still believe normal is battling of chain environment things like that that that. supply supply chain would've pre-COVID is to orders are canceled and we do atypical We in still clearly terms It environment, so a the things continue

to attention we so of to execute. our partners, addition getting are getting of In chain the perhaps improve well and environment getting suppliers, formidable attention we to ability the better, a buyer, we're so, as are a continuing much supply more those think we're

Mike Latimore

will the or here And is categories functional to main partners other outsourcing, more adding on eventually looking that the you're terms of future current sort then focus of you functions outsource? there in are plans

Rick Cohen

have pretty we -- It's though. No. picked partners much the

partners will the Symbotic's partners us cells. help will that the build So, partners that us help we that install have us sites, will help build

So, pretty get we we will strategy continue quarters for getting are were to executed done. last our job pretty well outsourcing, quarters those better. partners in us have have we done They'll on to innovate. this and us much -- help -- this big two But

Tom Ernst

And now our events. the functions got so, in Mike, covered, we and goal to have is the broadens deepen bench

Mike Latimore

Perfect.

Okay. Very good.

Operator

Palm Greg Our comes Craig-Hallum. the of next from question of line

Your line open. is

Greg Palm

Thanks questions. Yes. for the taking

I that's Here., you have to cost more was? commentary, the Can follow-up that And I'm more speed you your translating as what expectations shifted wanted you guess partners? now how are months to outsourced the asking prior that comment that. to just of I on on several maybe into earlier relative

Rick Cohen

enabled to us to has plan. it execute Greg, our to continue

over further technology, are in partners, to were but timeframe the encouraged are improvements we have bit years. deployments on tangible. are to opportunity are to both real the example. the we kind the of a seeing going about something that It's compress And our also with just we multiple executing to processes systems work deployment engaged and terms we So, completing for than we of faster with that to these of quarters talked terms that coming together structural set little in we is and collaboration, targeted timeframe as

Greg Palm

was on just earlier then on I up QX, EBITDA consensus commenting guess Tom, you for following on, guess is, commented profitability. you those about And question, rationale what effectively estimates were question or directly? and blessing I for Okay. an my those the

Tom Ernst

for Greg. are guidance, No, but not we wanted just -- Thanks it. full-year for providing context to say question, I the just

a So, what that we high position is to to the have we strong say believe will able are revenue is, in we as leverage. operating scale,

Greg Palm

it there. leave I'll enough. Thanks. Fair Okay.

Operator

Instructions]. [Operator

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

Your is open. line

Joe Giordano

have months, post break your Yes. given about, planning R&D should over Rick, just are see we edge? about extent levels through Like, comments making we are you and going think the that break to next a XXXX? now the about the cutting Symbotic progress you pack Like, we of good how six large pack you spend a in kind could there think step-down like, how through on to organization should gone keep now? required and levels the

Rick Cowen

will a in Yes. R&D. think reduction I you don't see

we the of because with in pull by out to just going haven't to a fund are being a continue us but think lot. are I going about, money that more products the organization, simply have that lot to R&D, look we will we are works efficient that to help we talked great

continue really this so, talent. great recruit And innovative here to lab great a we just is and

So, the think drop. don't answer to your you question is to no, irony expect should I

Tom Ernst

I'll that, Joe. to add

pack innovation that, right break You're budget. in are with projects significant along Symbotic very our

we projects, we we about things as of big that other looking a complete the chest to yet do some war forward. mentioned talked Rick those that So, haven't have

Joe Giordano

Symbotic? like stuff evaluate about not but was it like you go that. something autonomous have evaluating talk you're, what in partner, an you how stuff and about that think general, And forklift you or Like, stuff do we just when how -- preferred pallet application, forklift? Symbotic, should what should how should -- should final then should do be when partners things pallet like Symbotic if then about have we it truck. just drivers? Like what Is get forklift onto okay and a it you to provide Is of how you be output what like, a do of stuff an the and do automated so ancillary I like that a

Rick Cohen

that to we it we to way within to because to Symbiotic warehouse. evaluate the the software good people be partners a is so can encourage trying we're want to Yes, all control

load AMR partner software more and truck, a with create can the our a we a this software or we value. that the wins, a and we has interface AGB thing. if That's good can customer So, find

company innovating so the for The Symbotic I Symbotic. I that we -- had a that's things do it day of had I mean, anybody, of culture is to on we're we on I myself. that the couldn't lot from innovated the to that really one partners. kind from of looked stuff find

And so, real the that I we think of is would a product meet standards. add value lot on makes our nobody working are there's that a that things

innovate that And so the are those we'll on. continue things to

And you that obviously, not some really create really what tell products to I'm going they some are, but interesting systems. us there allow interesting to are would

Joe Giordano

And are clean any last point? just required the to bucks XX Stocks left lockups been for me, up, time. there at this for over

any I'm any, are just you like the guys lockups inclusive there senior curious team. Now of remaining on if if

Tom Ernst

There are.

So, still and But family year and public until unlocked for we're everything trusts is our some are affiliated members, saved a listing. Rick locked. the shares is and of myself post in the board lockup effect

Operator

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

is line Your open.

Rob Mason

you ask Thanks, a revenue. just taking noted clearly clarify I evening. flat $XXX and that backlog, was on million Good for to to it quarter-to-quarter my question in you question. booked wanted the

curious So, there flat? or there new existing from systems would've did a is -- customer you accounted holding of for offset additional was? out what -- customers? What the in a Was I'm just

Rick Cohen

question, the Yes, thanks for Rob.

the quarter. in customers new entered than we period. no booked a we we're is seeing what contemplated higher consideration What the variable when So,

Rob Mason

is to productivity or… relates consideration that that And variable

Rick Cohen

now to that's business It execution. under and relates deployment the

that what was added before deployments. when had -- component's than we component it to variable the So, the higher started

Rob Mason

a have brought to they're initial about projects finish start, last over from a to as guess, how Okay. of finish to them And the here two outlined that you the projects as basically speak of on the line, partners you follow-up, I you observed commission deployments start on just able -- that lot or timeframe. any be to the quarters. over to just the your you've feel get and Has partners assess ability in about working you've timeline their

Rick Cohen

initiatives while what fully did year do. now wanted our of about most starting are our something of our this a outsourced and across we put And chain, we since gas on so, highlights initiative. ago the the comments so, our we we then have outsourcing outsourcing made that Rob. Thanks, foot and wasn't That value to and

such significant So, the components outsourced example. our systems, we've had as start, from for is some lift

and experience in finish gone success degree teamwork with to those waves first those partners. our So, a have start with high of from

So, say follow the that. life have an record for or long-demonstrated a with extensive of -- from we completed and wave a we cycle to outsourcing them. this to year being part two latest I'd with successful have track then start finish of But do outsourcing

Operator

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

is line Your open.

Derek Soderberg

Thanks for taking my questions.

deployments related of reach the Sort at will those expectation system to as the your any looking and today of faster ago? regarded, this progress can maybe just is those just sort the Just that just asked, initiated can question timelines deployment deployments if shrinking production quantify you quarter of progress, live that'd be us on great. XX that those initiated if update months months to six curious you than

Rick Cohen

environment timeframe got so, sense, extended the actually a Derek, we you bit. tighter chain give as looking to backwards, Just a the supply

procurement. on of timeframe, that able Part efficiencies out and months. part So, that's been Since in pull start we're that in a to related new we the earlier of of couple partners to just field. able an systems the getting we've in to got gain that's

we're deployment than initiated months XX the targeting ago. to question systems say in a to is we ones this answer six short months your period the shorter yes, initiating So we're

Derek Soderberg

bit to large talk And helpful. you year. could was wondering about deployment. That’s if concurrent it. customer I ability your Got add this Lot another then a of on progress

outsourcing multi-billion-dollar of and sort another are guys now? think ability you you Do agreements partners. those happy those say agreements? add Are pursuing you're you have like some this actively the Sounds actually with to right year the customer

Tom Ernst

for Thanks, Derek. question, the

period, business new added in here twos last we customer UNFI per to add our plan as, a that discussed So, the continues near term be or to the that year. as by and customers ones

and do to evaluate. we're now. quarter, So, we expect in con in one are to that that continuing But We didn't year. the are add this customers per near-term here continuing reporting two at we one to look

Derek Soderberg

Thanks. Great.

Operator

you. Instructions]. Thank [Operator

of from Our Chris question UBS. comes next Snyder line of the

Your open. line is

Chris Snyder

systems? for but a see with we how to margin QX primarily that price margin? way When that you. target is quarters, hitting is cost fiscal And gross going needed I'm that, like level of over is it of driven not scale pressure the number. Thank if by is XX% better far the improvement level from couple Thank margins, Because next in get higher you sure implied gross think this to the business do you. seems

Rick Cohen

the Yes. Chris. question, Thanks for

continue improving gross efficiencies we our is in that remarks. margin the see expansion, OpEx discussed some we the So, look also our is primarily program will do see margins gross that think forward from I we that in we benefit to restructuring of that in But And implicit over quarters. my we to consistent outlook. expect as will prepared

we fundamental implicit real the the that's leverage our lower guide. slightly So in seeing are of bit revenues basis on operating

get Thinking of take think an really couple years about we us benefit. structural several to gross to margins, that, the that effort quarters that's will a

is, near-term profitability. the we driving long-term strong focused on in what are Here in

ramping doing market. scale value the And so, And smart where of we think over greatest on we achieving while that and are by that, and we can are getting the in our we focused penetrating execution and the present business drive course. profitability

approach scale, while that So, with executing we being and profitability long-term expanding balanced margins. want of maximizing

Chris Snyder

bit for a level. something that. appreciate higher then maybe follow-up, a And I you. Thank little

customer the blue-chip quite You base. guys have

with that, automation any is provide you or within was of these existing facilities. I commentary level the around customer could wondering, So, there color just

they that imagine given big of I some there. level automation are Just in is there customers, would

get the the Thank to of a you. kind on sense of So rate change just trying upgrade. for

Tom Ernst

high conveyance-based these large a with can center into at customers. comment Every we for go is automation. Rick mechanized fully too level distribution Yes,

and highly are conveyance So we in go generally, system. world we class a replacing functioning

Rick Cohen

I mean the we are systems most of years replacing old. XX are

And so everything the at in most we the have world. of customers look

the automation have exciting are installed. automation. a of generation that, believe And some once that have so, had we is they long for us next course and life these of is What we type of systems

we think And more. we has selling. focus can making sure customers frankly we lot So, are what a been happy sell the these really just are with then

Chris Snyder

you. Thank

Operator

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

Jeff Evanson

in for XXth our Investor Thank everyone call Valerie, appreciate you Have on to we out visiting you. with interest or and in investors. this thank afternoon. and we We when Tampa Day look seeing day. good you you, your are May our a Symbotic, at joining Thank forward

Operator

today's you. concludes you Thank conference. participating. Thank and all gentlemen, Ladies this for

now Have may day. great You a disconnect.

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