Symbotic Inc (NASDAQ: SYM), a warehouse efficiency company harnessing the power of AI and robotics, just reported that there had been significant errors in its recently released financial results. Its shares slid by over 39 per cent on the Nasdaq Wednesday as a result.
The warehouse automation system creator says that its fiscal 2024 results released on Nov. 18 appeared to be significantly superior due to these accounting blunders. Symbotic reported numbers that were roughly US$35 million too high throughout the revenue, profit and adjusted EBITDA categories.
“Symbotic identified errors in its revenue recognition related to cost overruns that will not be billable on certain deployments, which additionally impacted system revenue recognized in the second, third, and fourth quarters of fiscal year 2024,” the company specified.
Symbotic was originally founded in 2007 under the name CasePick Systems before a rebranding in 2012. It was created to help fill a void for efficacious warehouse automation systems.
By 2019, the company’s software was being utilized in over 1,400 locations throughout the United States and Canada.
Symbotic surpassed the US$1 billion sales milestone in 2023. Fast Company named the tech outfit on its World’s Most Innovative Companies list this year.
Symbotic has secured contracts with major retail operators like Walmart Inc (NYSE: WMT), Albertsons, Target Corp (NYSE: TGT) and C&S Wholesale Grocers. It will soon be installing its robotic automation systems at Walmart distribution centres in Mexico.
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Law firms launch investigations
After Symbotic’s press release about its accounting issues, New York’s law firm Bleichmar Fonti & Auld LLP announced that it was launching a securities fraud investigation.
Additionally, Wolf Popper LLP disclosed that it was investigating the matter on behalf of Symbotic’s shareholders. This firm has advised those who lost over US$25,000 from the stock plunge to get in contact.
San Francisco’s law firm, Hagens Berman, is also looking into the occurrence.
“We’re focused on whether Symbotic’s admitted accounting errors were intentional to make the company appear more profitable,” Reed Kathrein, Hagens Berman’s partner in charge of the investigation, stated in a press release.
Nonetheless, the financial firm TD Cowen has maintained its Buy rating and share target of US$50.00. KeyBanc Capital Markets is maintaining a bullish outlook for the long-term too, though other analysts may not be so optimistic.
rowan@mugglehead.com
