Symbotic accelerates the deployment of its AI warehouse automation systems - doubling sales and achieving positive EBITDA for the first time
As a provider of AI-based warehouse automation systems, Symbotic (SYM) has been able to maintain its impressive growth rate even in an uncertain economic environment. In the 2023 financial year that has now ended, sales almost doubled with an increase of 98%. This was due to a doubling of the systems in use. There are currently 12 fully functional systems and 35 ongoing deployment processes. Recurring revenues are now profitable and are expected to increase further over the next few years with maintenance and software updates as more systems are deployed. Management expects gross margins of over 60% in the long term. The adjusted gross margin already increased by 80 basis points to 19.1% in the last quarter. On a quarterly basis, sales increased by 60.4% to $391.9 million (consensus: $306.90 million) and adjusted EBITDA was positive for the first time at $13 million. Customers are increasingly recognizing the benefits of compensating for staff shortages and being able to ship pallets at high speed, specifically adapted to individual stores. Symbotic systems have a service life of 25 years and, as a complete solution for storage, sorting and shipping preparation, could reduce the storage space required by 30-60 %. There are currently eight customers with whom revenue can be generated, including Walmart, Target, C&S Wholesale Grocers and Albertsons. As recently as November 15, Southern Glazer's Wine & Spirits, the world's largest distributor of alcoholic beverages, was acquired, marking a further advance beyond packaged food. With more than 3,000 stores, twice as many locations can be supplied with the technology than a year ago. Symbotic already moves goods with a capacity of more than 400 million cases per year, with systems currently being deployed to increase this to 1.6 billion units. However, with potentially over 500 billion boxes in the United States alone, Symbotic is just scratching the surface of a large market.
SymBots become even more powerful with NVIDIA chips
In addition to palletizing robots, the new 9th generation SymBots are also used, which, as autonomous transport robots, can process more transactions per hour than previous models at almost 1,000 units. Xavier chips from NVIDIA and built-in cameras provide more computing power to better identify parcels and other bots. This leads to better coordination and makes it possible to build an efficient swarm of drones without collisions. In the future, bots will be able to make decisions independently and recognize open or damaged boxes. Together with the Japanese holding company Softbank, the joint venture Greenbox was also launched in August in order to be able to serve smaller customers with Warehouse-as-a-Service offerings without large upfront costs. This not only increases the addressable market by a further $500 billion from the previous $432 billion, but there is also already an initial order of $7.5 billion, which is expected to generate annual recurring revenues of $500 million over two years. CEO Rick Cohen speaks of interest exceeding expectations and the first customer is to be announced next year. The total order backlog currently stands at $23.3 billion, with $11 billion added in August via Greenbox.
Sales growth to accelerate to over 70%
Revenue targets for the first quarter of the new 2024 fiscal year have been raised to $350-370 million (consensus: $348.62 million), which corresponds to growth of 70-79%. Adjusted EBITDA is again expected to be positive at $11-14 million. The analyst consensus anticipates annual sales of $1.65 billion and an increase to $2.36 billion in the following year. Net profit of $0.22 per share is also expected for the first time this year, which should improve to $0.61 per share by 2025. With a P/E ratio of 13, the share is already highly valued. New Buy signals are emerging after stabilization at the GD 200.
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