Investing.com -- Shares in Symbotic Inc (NASDAQ:SYM) fell sharply Wednesday after the company said it would not meet the deadline for filing its annual form 10-K for the fiscal year ending September 28, 2024, citing the need to evaluate the financial impact of a significant error in its revenue recognition.
The company disclosed that the error, related to cost overruns that are not billable on certain deployments, has affected its system revenue calculations and financial results for the year.
“...The company requires additional time to complete its assessment of the financial impacts of correcting an error related to system revenue recognition and the impacts of that error on internal controls over financial reporting.”
The company’s shares plummeted 24% in premarket trading.
The error, identified on November 25, necessitates corrections to system revenue, gross profit, income before income taxes, and adjusted EBITDA for fiscal 2024.
Symbotic estimates that these adjustments will reduce these metrics by $30 million to $40 million. The issue also impacts previously reported financial results for the second, third, and fourth quarters of 2024.
Consequently, the company plans to revise its financial information for the fourth quarter and full fiscal year, which was initially released on November 18.
In response to the error, Symbotic is implementing measures to strengthen its internal controls over financial reporting to address material weaknesses that contributed to the issue.
Looking ahead, Symbotic also revised its outlook for the first quarter of fiscal 2025. The company now expects revenue of $480 million to $500 million, down from its prior forecast of $495 million to $515 million, and below analysts’ consensus estimate of $508.4 million.
Adjusted EBITDA guidance was lowered to a range of $12 million to $16 million, compared to the previous estimate of $27 million to $31 million and the consensus expectation of $33.7 million.