Symbotic (SYM) risk factors, FY2025 10-K

Risks Related to Our Business, Operations and Industry

1. 01Unless the context otherwise requires, all references in this section to “we,” “us” and “our” refer to Symbotic
2. 02We are a growing company with a limited operating history and a history of losses30% rewritten
3. 03As our business expands, our historical results may not be indicative of our future performance and you should consider our future prospects in light of the risks and uncertainties of growing companies operating in fast evolving high-tech industries in emerging markets
4. 04We depend heavily on our larger customers, and therefore, our success is heavily dependent on their ability to grow their businesses and their adoption of our systems52% rewritten
5. 05C&S Wholesale Grocers, an important customer, is our affiliate29% rewritten
6. 06We may fail to realize anticipated benefits of the GreenBox joint venture, or it may disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations
7. 07Our operating results and financial condition may fluctuate from period to period, which could make our future operating results difficult to predict or cause our operating results to fall below analysts’ and investors’ expectations40% rewritten
8. 08Complex technology will need to be developed and implemented, both in-house and in coordination with our vendors and suppliers, for us to successfully produce and integrate our systems with our customers’ existing warehouses, and there can be no assurance that they will be successfully developed and implemented37% rewritten
9. 09We are required to assess our internal control over financial reporting and our management has identified a material weakness
10. 10Our systems may not be successful or meet existing or future requirements in customer agreements with existing or future customers54% rewritten
11. 11The markets in which we participate are competitive. Many companies, including large retail and e-commerce companies, companies that offer point solutions or other comprehensive or specific supply chain functionalities and other companies that focus on automated technologies, may target the markets in which we do business40% rewritten
12. 12If we are unable to develop new solutions, adapt to technological change, sell our systems, services and software into new markets or further penetrate our existing markets, our revenue may not grow as expected26% rewritten
13. 13Failure to manage our growth effectively could make it difficult to execute our business strategy and could adversely affect our business, financial condition and results of operations
14. 14Inflation, tariffs, customs duties and other increases in manufacturing and operating costs could adversely affect our cash flow as well as our business, financial condition and results of operations
15. 15We rely on suppliers to provide equipment, components and services
16. 16If there are disruptions in our supply chain, the materials we rely on in our business may not be timely available at reasonable rates, or at all. These disruptions could cause a delay in our manufacturing and construction of our systems and thus a delay in our implementation schedules for our customers
17. 17Certain of our supply agreements allow the supplier to terminate the agreement upon notice for any reason or no reason. This termination right could disrupt our operations, negatively impact our reputation and adversely affect our business, financial condition and results of operations
18. 18Our systems, services and software may be affected from time to time by design and manufacturing defects that could adversely affect our business, financial condition and results of operations and result in harm to our reputation25% rewritten
19. 19If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing business needs, requirements or preferences, our systems may become less competitive26% rewritten
20. 20We may experience risks associated with future mergers, acquisitions or dispositions of businesses or assets or other strategic transactions or joint ventures
21. 21We rely on senior management, technical experts, and other highly qualified personnel, including hardware and software engineers, and will need to hire and train additional personnel31% rewritten
22. 22Our financial performance is subject to risks of foreign exchange fluctuation, which could result in foreign exchange losses
23. 23Our customer agreements allocate certain liabilities to us. The occurrence of such liability could disrupt our business or result in liability
24. 24We may need to raise additional capital, and this capital may not be available on terms favorable to us, or at all, when needed
25. 25If demand for our systems does not grow as we expect, or if market adoption of A.I.-powered robotics and supply chain automation solutions does not continue to develop, or develops slower than we expect, our future revenue may stagnate or decline and our business may be adversely affected
26. 26Laws and regulations governing robotics and supply chain automation industries are still developing and may restrict our business or increase the costs of our systems, making our systems less competitive or adversely affecting our revenue growth38% rewritten
27. 27Our facilities are subject to various compliance requirements, including those of OSHA and other workplace safety agencies, and compliance costs could increase as we scale our systems
28. 28Supply chain interruptions may increase our costs or reduce our revenue

Risks Related to Intellectual Property

1. 29We may need to bring, or defend ourselves against, IP infringement or misappropriation claims, which may adversely affect our business, financial condition and results of operations by limiting our ability to use certain IP and causing us to incur substantial costs
2. 30Our software contains third-party open-source software components. Certain use of such open-source components with our proprietary software could adversely affect our ability to charge fees for, or otherwise protect the value of, our solution
3. 31Our patent applications may not issue or, if issued, may not provide sufficient protection, which may adversely affect our ability to prevent others from commercially exploiting products similar to ours

Risks Related to Cybersecurity, Software Deficiencies, Service Interruptions and Data Privacy

1. 32We have experienced cybersecurity incidents in the past and may experience further cybersecurity incidents or security breaches of our IT or OT in the future, which may result in systems disruption, shutdown, unauthorized access to or disclosure of confidential or personal information
2. 33Our ability to efficiently manage and expand our business depends significantly on the reliability, capacity and protection of our IT
3. 34A breach of our IT that results in unauthorized access to personal information could require us to notify affected employees, customers and other persons (including governmental organizations) and lead to lawsuits and investigations alleging breaches of applicable laws or regulations
4. 35Real or perceived errors, failures, bugs or defects in our IT could adversely lead to liability and litigation, disrupt our operations and could negatively impact our reputation and otherwise adversely affect our business, financial condition and results of operations26% rewritten
5. 36Our business requires the collection, use, handling, processing, transfer and storage of employee and customer data, and such activities may be regulated by third-party agreements, our own privacy policies and certain federal, state and foreign laws and regulations

Risks Related to Ownership of Our Common Stock

1. 37Our common stock price may be volatile or may decline regardless of our operating performance; you may lose some or all of your investment23% rewritten
2. 38We are party to pending litigation, and we may be subject to future litigation in the operation of our business. An adverse outcome in one or more proceedings could adversely affect our business49% rewritten
3. 39We have been, and may be in the future, the subject of governmental and regulatory investigations and inquiries, legal proceedings and enforcement actions with respect to the operation of our businesses. Any such investigation, inquiry, proceeding or action could adversely affect our businessNew
4. 40We do not intend to pay dividends on our common stock for the foreseeable future
5. 41If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our common stock, the price of our common stock could decline63% rewritten
6. 42Our issuance of additional shares of common stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price
7. 43Future sales, or the perception of future sales, of our common stock by us or our stockholders in the public market could cause the market price for our common stock to decline28% rewritten
8. 44Anti-takeover provisions in our Charter and Bylaws and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock20% rewritten
9. 45These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
10. 46Our Charter provides that the courts located in the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees

Risks Related to Being a Public Company

1. 47We have incurred and will continue to incur increased costs as a result of operating as a public company, and our management continues to devote substantial time to compliance initiatives26% rewritten
2. 48Some members of our management have limited experience in operating a public company

Risks Related to Our Organizational Structure

1. 49The multi class structure of our common stock has the effect of concentrating voting control with our founder, certain family members of our founder and certain affiliated entities and trusts of our founder and his family members; this will limit or preclude your ability to influence our corporate matters
2. 50Our multi-class capital structure may render our shares ineligible for inclusion in certain stock market indices, which could adversely affect the share price and liquidity of our common stock
3. 51We share certain key executives with C&S Wholesale Grocers, an important customer, which means those executives will not devote their full time and attention to our affairs, and the overlap may give rise to conflicts
4. 52Our overlapping executive officers and directors with C&S Wholesale Grocers may result in the diversion of corporate opportunities to C&S Wholesale Grocers and other conflicts, and provisions in our Charter may provide us no remedy in those circumstances
5. 53Our only principal asset is our interest in New Symbotic Holdings, and accordingly, we will depend on distributions from New Symbotic Holdings to pay taxes, make payments under the tax receivable agreement (“TRA”) and cover our corporate and other overhead expenses
6. 54Pursuant to the TRA, we are required to make payments to equity holders of New Symbotic Holdings for certain tax benefits we may claim, and those payments may be substantial
7. 55In certain cases, payments under the TRA may exceed the actual tax benefits we realize or be accelerated
8. 56Common Units to the extent we believe it is necessary to ensure that New Symbotic Holdings will continue to be treated as a partnership for U.S. federal income tax purposesNew

Other Risks

1. 57We implemented a new enterprise resource planning (“ERP”) system, and challenges with the implementation of the system may impact our business and operations
2. 58We are subject to U.S. and foreign anti-corruption and anti-money laundering laws and regulations and could face criminal liability and other serious consequences for violations, which could adversely affect our business, financial condition and results of operations
3. 59Changes to applicable tax laws and regulations, exposure to additional income tax liabilities or unfavorable outcomes in tax audits could harm our future profitability or otherwise adversely affect our business, financial condition and results of operations