Shares in Symbotic Inc plunged 33% on Wednesday after the robotic warehouse developer warned that its results last week were wrongly inflated by "errors" in how milestone payments were recognised, with coming quarterly earnings also likely to be affected.
The company, which has won contracts from retailer clients including Walmart Inc (NYSE:WMT), Target Corp (NYSE:TGT) and Albertsons Companies (NYSE:ACI), said its financial results would need to be restated.
Its initial estimate is that there will be a $30 million to $40 million impact for the 2024 fiscal year compared to the financial results released last week, when it reported revenue of $1.8 billion and a net loss of $51 million.
Symbiotic, which is backed by Walmart and SoftBank, said "material weaknesses" had been identified in internal controls over financial reporting, leading to errors in revenue recognition.
Costs and revenue were both prematurely recognised, with further errors related to cost overruns reducing likely 2024 system revenue, gross profit, and adjusted EBITDA.
The outlook for the first quarter of its new fiscal year 2025 was also cut, based on its analysis of customer deployments, with revenue of $480-500 million now expected, down from the $495 million to $515 million guidance given last week, and adjusted EBITDA of $12 million to $16 million, compared to $27 million to $31 million.
"The company is implementing measures designed to improve internal control over financial reporting to remediate these material weaknesses," it said.