Symbotic's Q4 2025 Earnings Call: Contradictions Emerge on Installation Times, Software Margins, Backlog, Revenue Trajectory, and Medline Partnership

Date of Call: November 24, 2025

Financials Results

• Revenue: $618M, up 10% YOY
• Gross Margin: Systems gross margin roughly ~22% (analyst noted high watermark); software maintenance & support >70% for full year; management says system margins improving year-over-year and expect further expansion

Guidance:

• Q1 FY2026 revenue expected to be $610M–$630M (up ~25%–29% YOY)
• Q1 FY2026 adjusted EBITDA expected to be $49M–$53M
• Management will continue one-quarter-ahead guidance and expects revenue phasing to be shifted by adoption of next‑gen storage (less pronounced sequential growth in H1, step-up in H2)
• Next‑gen storage and operational improvements expected to drive margin expansion over time

Business Commentary:

* Revenue and Margin Expansion: - Symbotic reported $618 million in Q4 revenue, a 10% year-over-year increase. - The company delivered significant margin expansion, with system gross margin reaching 22%, driven by disciplined cost management, strong project execution, and supply chain partnerships.

• Operational Systems Growth and New Customers:
• Symbotic began 10 new system deployments in Q4, with total operational systems reaching 48, nearly double that of the end of fiscal year 2024.

• The growth reflects successful expansion into new verticals like health care, with notable customers such as GreenBox and Medline, marking the first customer in this vertical.

• Innovation and Product Portfolio Upgrades:

• Symbotic introduced a new micro fulfillment solution and upgraded storage structures, enhancing density and installation efficiency.
• These innovations are expected to unlock more opportunities, particularly in e-commerce and perishable facilities, and deliver higher value to customers.

* Backlog and Financial Outlook: - The company's backlog remained strong at $22.5 billion, with expectations for a solid backlog in 2026. - The guide for the first quarter of fiscal 2026 was $610 million to $630 million, reflecting year-over-year growth of 25% to 29%, indicating continued momentum and confidence in customer adoption of new solutions.

Sentiment Analysis:

Overall Tone: Positive

• CEO: "We made strong progress in fiscal year 2025... increased revenue by 26% year-over-year"; CFO: "Fiscal fourth quarter revenue grew 10% year-over-year to $618 million"; management highlights cash >$1.2B, backlog $22.5B and repeated commentary that system margins are improving and will expand with next‑gen storage.

Q&A:

• Question from Nicole DeBlase (Deutsche Bank AG): Maybe just starting with Medline. Is it possible for you to provide a bit more color on the relationship what they've committed to? And then it seems like health care could be a pretty big opportunity with respect to new customers. Anything on how aggressively the sales force is pursuing that right now?
  Response: Medline is a validated win leveraging accuracy and sequencing; Symbotic has added ~5–6 sales hires and is now aggressively pursuing healthcare opportunities.

• Question from Nicole DeBlase (Deutsche Bank AG): Is the expectation that you guys start to really ramp next-gen systems still kind of around the middle of the year? Does that mean stable revenue through the first half and a step-up in the second half of '26?
  Response: Yes — next‑gen ramp targeted mid‑year; expect flatter/less pronounced sequential revenue in H1 and a larger step‑up in H2.

• Question from Joseph Giordano (TD Cowen): On Medline, can you talk about like what's contemplated there? Like how many sites are we talking about? Like what types of technology is this encompassing? Is there a break pack in this? Is there room for the micro fulfillment strategy in there as well? Like what was like effectively added to the backlog from them right now?
  Response: Medline is one proof‑of‑concept site initially for a moving‑case system with potential upsells to micro‑fulfillment and BreakPack.

• Question from Joseph Giordano (TD Cowen): Do we need to change how we describe system counts given two phases can be combined into one with next‑gen? If you say 10 new systems, can some be equivalent to two prior deployments?
  Response: Next‑gen systems can be larger or more flexible, so system counts aren't directly comparable historically—consider size/dollar value too.

• Question from Andrew Kaplowitz (Citigroup Inc.): Systems gross margin was close to 22% — is this a function of mix and are you on a better glide path? Will system gross margin continue to go up?
  Response: Management is bullish: system margins are improving, expect a slight uptick in Q1 and further expansion as next‑gen storage rolls out.

• Question from Andrew Kaplowitz (Citigroup Inc.): Do you think you could grow Symbotic's backlog in FY26 and can you give an update on GreenBox, ASR and booking backlog for ASR?
  Response: They won't provide backlog guidance; expect Q1 backlog roughly steady; sales team expansion and a long‑term pipeline (including >$5B mini/micro opportunity) support future backlog growth.

• Question from Mark Delaney (Goldman Sachs Group, Inc.): Could you speak on the progress at GreenBox in terms of finding new customers to use the GreenBox sites?
  Response: Atlanta will be the first GreenBox to go live; there is strong customer interest and management expects announcements in ~90–180 days.

• Question from Mark Delaney (Goldman Sachs Group, Inc.): Anything in particular new customers want to see to get across the line?
  Response: Customers are focused on space constraints and density; GreenBox offers multiple configurations (storage, warehouse services, 3PL) and demand is strong.

• Question from Mark Delaney (Goldman Sachs Group, Inc.): SoftBank is raising capital — any implications for GreenBox funding and deployment pace?
  Response: Funding is secured via the SoftBank/Iron Cloud arrangement and Symbotic's cash, so deployment pace should not be constrained by funding.

• Question from Colin Rusch (Oppenheimer & Co.): Can you talk about potential adjustments to bot design or system design and cadence of that evolution?
  Response: Continuous product evolution — bots now include stretch capability, vision/LiDAR and improved routing; software/cloud/AI advances drive ongoing differentiation.

• Question from Colin Rusch (Oppenheimer & Co.): Can you comment on ability to attract and retain talent as the market heats up?
  Response: Public listing, competitive comp, and global offices (including Vietnam) are enabling faster hiring and retention, including talent from the EV sector.

• Question from Guy Drummond Hardwick (Barclays Bank PLC): Based on RPO change implying $600–$700M bookings, can you split that between Medline and pricing?
  Response: RPO increase was driven primarily by higher pricing/inflation and project repricing; Medline is included in RPO but didn't materially affect Q4 revenue.

• Question from Guy Drummond Hardwick (Barclays Bank PLC): So Medline was not in the RPO, the $22.5 billion RPO at the end of the quarter?
  Response: Medline is included in the RPO, but it did not contribute to revenue in the quarter.

• Question from Guy Drummond Hardwick (Barclays Bank PLC): 10‑K shows 12% of backlog to be delivered over next 12 months — given prior miss, why confident you can deliver 12%?
  Response: Improved installation execution, faster install-to-acceptance and next‑gen subassemblies accelerate throughput; management is comfortable with the 12% figure.

• Question from Derek Soderberg (Cantor Fitzgerald & Co.): On recurring software fees, can you share what new customers are signing up for in terms of an annual software fee on a percentage basis?
  Response: They do not disclose per‑customer annual software fee percentages.

• Question from Derek Soderberg (Cantor Fitzgerald & Co.): Can you size the healthcare vertical opportunity in dollars/modules given 76M sq ft?
  Response: Management has not produced a public sizing estimate during the call.

• Question from James Ricchiuti (Needham & Company): On the Nyobolt battery partnership — significance and how it will be deployed (new projects vs retrofits)?
  Response: Starting February, Nyobolt batteries will be used: ~40‑minute runtime vs prior ~8 minutes, materially improving bot reliability and uptime; Symbotic has taken a stake in Nyobolt.

• Question from James Ricchiuti (Needham & Company): How does geographic expansion (Mexico/Europe) factor into FY26?
  Response: Europe already well staffed (half sales team there); management is optimistic and sees significant European opportunities.

• Question from Kenneth Newman (KeyBanc Capital Markets): Clarify phasing comment — last years saw seasonal down Q4→Q1; guidance midpoint assumes what?
  Response: Midpoint implies roughly flat sequential revenue vs Q4; high end would break recent seasonal trends; goal is to reduce lumpiness going forward.

• Question from Kenneth Newman (KeyBanc Capital Markets): Are higher DRAM/memory prices or chip availability a risk to margins?
  Response: Not material — bots use lower‑cost chips, cloud cost increases are controllable, and chips are not a major margin risk.

• Question from Mike Latimore (Northland Capital Markets): If you expect ~20,000 bots in a year, where are you now?
  Response: About 15,000 bots currently; targeting over 20,000 within a year.

• Question from Mike Latimore (Northland Capital Markets): In the 10 new system starts were there any BreakPacks and any view on system start run‑rate?
  Response: The Q4 10 deployments included a couple BreakPacks; they don't guide system‑start counts and emphasize revenue guidance instead.

• Question from Greg Palm (Craig-Hallum): Can you bucket the margin improvement drivers and what's changed over last 12–18 months?
  Response: Improvement driven by disciplined cost management, better project execution and supply‑chain partnerships; next‑gen density will further boost system margins.

• Question from Greg Palm (Craig-Hallum): Could Medline be a competitive displacement and expand beyond the initial site?
  Response: Yes — if the proof‑of‑concept performs, there is meaningful opportunity to expand and displace competitors over time.

• Question from Keith Housum (Northcoast Research Partners): A large retailer is scaling back with a competitor — does that dampen demand for this tech?
  Response: No — that development has increased interest; retailers need denser back‑of‑store/micro‑fulfillment solutions and Symbotic is well‑positioned.

Contradiction Point 1

Installation Times and Capacity

It involves changes in operational capabilities and timelines, which can impact revenue projections and customer expectations.

Will Symbotic ramp up next-gen systems by mid-year? - Nicole DeBlase (Deutsche Bank AG)

2025Q4: We expect less pronounced revenue growth in the first half of the year and a step-up in the second half. - Izilda Martins(CFO)

Can you update on the in-sourcing progress and its impact on cost margins? How should we approach new system implementations balancing execution with in-sourcing? - Andrew Kaplowitz (Citi Group)

2025Q1: We have a lot of demand on our backlog that we need to translate into system starts. We've been working on our installation times, improving our processes and translating that into our ability to get more systems out to customers. - Carol Hibbard(CFO)

Contradiction Point 2

Software Gross Margin Sustainability

It impacts financial projections and expectations for the company's software gross margins, which are crucial for investor analysis.

What are the expectations for gross margin improvement and growth in the systems segment? - Andrew Kaplowitz (Citigroup Inc.)

2025Q4: We are bullish about our system margins, which have significantly improved due to disciplined cost management and strong supply chain partnerships. - Izilda Martins(CFO)

What are the drivers of the increase in software gross margins, and is this sustainable? - Nicole DeBlase (Deutsche Bank AG)

2025Q3: The step-up in software gross margins is due to scale, with 7 new acceptances added this quarter. This is a result of scale benefits, and we expect the 70% level to continue. - Carol J. Hibbard(CFO)

Contradiction Point 3

Backlog Growth Expectations

It influences investor expectations regarding the company's ability to grow its backlog, which is crucial for future revenue projections.

Can you comment on the growth of Symbotic's backlog in FY26 and the booking of backlog for ASR? - Andrew Kaplowitz (Citigroup Inc.)

2025Q4: We don't guide to backlog, but we are focusing on growing opportunities. We have $5 billion in backlog for mini micro fulfillment systems and are not concerned about immediate growth in backlog. - Izilda Martins(CFO)

Can you quantify next-generation storage technology in terms of installation times and retrofit opportunities and comment on your backlog and expected new customer wins this year? - Andrew Alec Kaplowitz (Citigroup Inc.)

2025Q3: We are still looking to attract new customers, and marketing the new structure has accelerated inbound discussions. - Richard B. Cohen(CEO)

Contradiction Point 4

System Start and Revenue Growth Trajectory

It involves differing expectations regarding the growth trajectory of system starts and their impact on revenue, which are critical for investor projections.

Will Symbotic ramp up next-gen systems by mid-year? - Nicole DeBlase (Deutsche Bank AG)

2025Q4: Yes, that's exactly how we're thinking of it. We expect less pronounced revenue growth in the first half of the year and a step-up in the second half. - Izilda Martins(CFO)

Does Q2 indicate Symbotic's growth in system starts and completions? - Andy Kaplowitz (Citi)

2025Q2: Rick Cohen: System starts will be lumpy but expect increasing starts as backlog grows. - Rick Cohen(CEO)

Contradiction Point 5

Medline Relationship and Health Care Opportunities

It involves the nature and extent of the relationship with Medline and the potential impact on health care opportunities, which are crucial for understanding Symbotic's strategic direction.

Can you elaborate on the relationship with Medline and its impact on healthcare opportunities? - Nicole DeBlase (Deutsche Bank AG)

2025Q4: The Medline relationship was built over a year, showcasing the unique capabilities of our system to handle many items and its accuracy. Medline is interested in expanding with our systems. - Richard Cohen(CEO)

Can you provide an update on the innovation roadmap and potential GreenBox tenants? - Matt Somerville (D.A. Davidson)

2025Q2: Our innovation includes perishable systems and smaller solutions. - Rick Cohen(CEO)