On Wednesday, Symbotic Inc (NASDAQ:SYM). experienced an 18% drop in its stock value following the announcement that the company would delay the filing of its annual report, known as the Form 10-K, for the fiscal year ended September 28, 2024. The delay is attributed to the need for additional time to assess the financial impacts of a revenue recognition error and its effect on internal controls over financial reporting.
Symbotic disclosed that during the preparation of the Fiscal Year 2024 10-K, errors were identified in its revenue recognition related to certain cost overruns on deployments that will not be billable. These errors affected system revenue, income before tax, net income, and gross margin for the second, third, and fourth quarters of the fiscal year 2024. As a result, the interim financial statements for the first three quarters of fiscal year 2024, along with the preliminary unaudited financial results for the fourth quarter and the full fiscal year, should not be relied upon.
The company had previously reported significant changes in its financial performance for the fiscal year 2024 in an earnings press release dated November 18, 2024. This included an increase in revenues of approximately $645 million, a decrease in loss before income tax of approximately $167 million, and a decrease in net loss of approximately $157 million. However, these figures are now under reconsideration due to the discovered errors.
Currently, Symbotic anticipates that the corrected financial statements will show an increase in revenues of between approximately $605 million and $615 million. Additionally, the decrease in loss before income tax is expected to be between approximately $127 million and $137 million, with a decrease in net loss projected to be between approximately $117 million and $127 million. These adjustments represent a negative shift of $30 million to $40 million from the initially reported figures in the Fourth Quarter Earnings Release for the fiscal year ended September 28, 2024.
The company has stated that the revenue growth and narrowing losses were primarily due to an increase in deployments and operational system sites in fiscal year 2024 compared to fiscal year 2023. Symbotic is working diligently to file the Fiscal Year 2024 10-K within the fifteen-calendar day extension period.
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