Symbotic Inc. (NASDAQ:SYM) Q1 2023 Earnings Call Transcript

Tom Ernst: Thanks for the question, Nicole. So I would expect modest growth in our OpEx, particularly near-term. Our OpEx we reported in this quarter was relatively light in terms of third-party expenses and kind of special projects. But if you take the last three quarters overall, that general comment about crested is generally right maybe with moderate growth, looking forward. In terms specifically with R&D, yes, it applies to R&D as well.

Nicole DeBlase: Thanks. I will pass it on.

Operator: Thank you. Our next question comes from the line of James Ricchiuti of Needham & Company. Your line is open.

James Ricchiuti: Hi, thank you. Good afternoon. I think you referenced an order from an existing customer. Was this one of your legacy customers?

Tom Ernst: Yes. Thanks for the question, James. It was. And in fact, we disclosed in our proxy filing that, that customer is C&S Wholesale Grocers.

James Ricchiuti: Got it. And I’m wondering, as you talk about the supply chain and the contract manufacturing capability that you’re bringing on and you expect to see ramp, can you talk about the interest you’re getting from new customers and your ability, your capacity to maybe take on newer business? And specifically, I’m wondering, most of your business has been in the U.S., North America. And is there the potential over the next couple of quarters for you to potentially take on some business in Europe, for instance?

Rick Cohen: Yes. We €“ it’s a fairly long sales cycle, but we’ve had interest from Mexico. We’ve had interest from Europe. So we €“ and the numbers are pretty promising. I made a trip to Japan to visit SoftBank. That’s a very promising €“ these high-cost labor markets are interesting. So nothing to announce, nothing probably to announce for a while, but a lot of interest. And what we’re doing with the supply chain partners, actually, some of the partners are in Europe, places like Italy, Germany. And so they are actually out there kind of help them sell for us, legitimizing our product. We do have a number of international customers coming to visit in the next 3 to 6 months to go visit sites. And one of the things that we’re doing with the outsourcing partners is as we ramp them up, it allows us to complete sites faster.

And if we can complete sites faster, we can do more sites. And also, one of the things that we’re looking at is outsourcing partners, in particular from Europe, that would be good partners and doing European installs.

Tom Ernst: I’ll just reiterate, James, that while we’re working to create that additional capacity, our operating strategy is to add new customers slowly, kind of 1 to 2 per year.

James Ricchiuti: Okay. And final question for me, when would you anticipate completing the next fully-functional system from your backlog, if you can say?

Tom Ernst: Sure. Thanks for the question, James. It’s hard to predict on a given quarterly basis. But as we look forward over the coming quarters, we do anticipate that you’ll begin to see us get into a pattern of moving systems from deployment to fully-functionally complete €“ hit the customer with increasing regularity.

James Ricchiuti: Thanks a lot.

Operator: Thank you. Our next question comes from the line of Michael Latimore of Northland Capital Markets. Your line is open.