Symbotic Inc. 10-K

Item 8. Financial Statements and Supplementary Data Symbotic Inc. Index to the Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID No. 248 ) 63 Consolidated Balance Sheets 64 Consolidated Statements of Operations 66 Consolidated Statements of Comprehensive Loss 67 Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit) 68 Consolidated Statements of Cash Flows 70 Notes to the Consolidated Financial Statements 72 62 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Symbotic Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Symbotic Inc. and subsidiaries (the “Company”) as of September 30, 2023 and September 24, 2022, the related consolidated statements of operations, comprehensive loss, changes in redeemable preferred and common units and equity (deficit), and cash flows for each of the three years in the period ended September 30, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and September 24, 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2021. Boston, Massachusetts December 11, 2023 63 Table of Contents Symbotic Inc. Consolidated Balance Sheets (in thousands) September 30, 2023 September 24, 2022 ASSETS Current assets: Cash and cash equivalents $ 258,770 $ 353,457 Marketable securities 286,736 — Accounts receivable 69,206 3,412 Unbilled accounts receivable 121,149 101,816 Inventories 136,121 91,900 Deferred expenses 34,577 29,150 Prepaid expenses and other current assets 85,236 25,663 Total current assets 991,795 605,398 Property and equipment, net 34,507 24,878 Intangible assets, net 217 650 Other long-term assets 24,191 337 Total assets $ 1,050,710 $ 631,263 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 109,918 $ 68,448 Accrued expenses 99,992 47,312 Sales tax payable 28,322 12,953 Deferred revenue 787,227 394,244 Total current liabilities 1,025,459 522,957 Deferred revenue — 31,465 Other long-term liabilities 27,967 7,901 Total liabilities 1,053,426 562,323 Commitments and contingencies (Note 15) — — Equity: Class A Common Stock, 3,000,000,000 shares authorized, 82,112,881 and 57,718,836 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively 8 6 Class V-1 Common Stock, 1,000,000,000 shares authorized, 66,931,097 and 79,237,388 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively 7 8 Class V-3 Common Stock, 450,000,000 shares authorized, 407,528,941 and 416,933,025 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively 41 42 Additional paid-in capital - warrants 58,126 58,126 Additional paid-in capital 1,254,022 1,237,865 Accumulated deficit ( 1,310,435 ) ( 1,286,569 ) 64 Table of Contents Accumulated other comprehensive loss ( 1,687 ) ( 2,294 ) Total stockholders' equity 82 7,184 Noncontrolling interest ( 2,798 ) 61,756 Total equity ( 2,716 ) 68,940 Total liabilities and equity $ 1,050,710 $ 631,263 The accompanying notes are an integral part of these consolidated financial statements. 65 Table of Contents Symbotic Inc. Consolidated Statements of Operations (in thousands, except share and per share information) Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Revenue: Systems $ 1,138,059 $ 567,993 $ 227,563 Software maintenance and support 6,601 3,735 4,009 Operation services 32,231 21,584 20,341 Total revenue 1,176,891 593,312 251,913 Cost of revenue: Systems 940,076 464,179 216,577 Software maintenance and support 9,222 4,390 2,962 Operation services 37,854 25,096 21,927 Total cost of revenue 987,152 493,665 241,466 Gross profit 189,739 99,647 10,447 Operating expenses: Research and development expenses 195,042 124,141 73,386 Selling, general, and administrative expenses 217,927 115,881 59,442 Total operating expenses 412,969 240,022 132,828 Operating loss ( 223,230 ) ( 140,375 ) ( 122,381 ) Other income, net 10,716 1,286 67 Loss before income tax ( 212,514 ) ( 139,089 ) ( 122,314 ) Income tax benefit 4,620 — — Net loss ( 207,894 ) ( 139,089 ) ( 122,314 ) Net loss attributable to Legacy Warehouse unitholders prior to the Business Combination — ( 72,134 ) ( 122,314 ) Net loss attributable to noncontrolling interests ( 184,028 ) ( 60,092 ) — Net loss attributable to common stockholders $ ( 23,866 ) $ ( 6,863 ) $ — Loss per share of Class A Common Stock: (1) Basic and Diluted $ ( 0.37 ) $ ( 0.13 ) N/M Weighted-average shares of Class A Common Stock outstanding: Basic and Diluted 64,338,580 54,086,381 N/M (1) Loss per share information has not been presented for periods prior to the Business Combination (as defined in Note 3, Business Combination ), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 3, Business Combination for further information. This has been indicated on these statements of operations as “N/M”. The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Contents Symbotic Inc. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Net loss $ ( 207,894 ) $ ( 139,089 ) $ ( 122,314 ) Less: Net loss attributable to Legacy Warehouse unitholders prior to the Business Combination — ( 72,134 ) ( 122,314 ) Less: Net loss attributable to noncontrolling interests ( 184,028 ) ( 60,092 ) — Net loss attributable to common stockholders $ ( 23,866 ) $ ( 6,863 ) $ — Other comprehensive income (loss): Foreign currency translation adjustments ( 265 ) ( 2,338 ) 2,326 Changes in unrealized gain on investments, net of income taxes of $ — for the years ended September 30, 2023, September 24, 2022, and September 25, 2021 5,478 — — Total other comprehensive income (loss) 5,213 ( 2,338 ) 2,326 Less: other comprehensive income (loss) attributable to Legacy Warehouse unitholders prior to the Business Combination — 37 — Less: other comprehensive income (loss) attributable to noncontrolling interests 4,606 — — Other comprehensive income attributable to common stockholders $ 607 $ ( 2,375 ) $ 2,326 Comprehensive loss ( 202,681 ) ( 141,427 ) ( 119,988 ) Less: Comprehensive loss attributable to Legacy Warehouse unitholders prior to the Business Combination — ( 72,097 ) ( 119,988 ) Less: Comprehensive loss attributable to noncontrolling interests ( 179,422 ) ( 62,228 ) — Total comprehensive loss attributable to common stockholders $ ( 23,259 ) $ ( 7,102 ) $ — The accompanying notes are an integral part of these consolidated financial statements 67 Table of Contents Symbotic Inc. Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit) (in thousands, except unit and share information) Redeemable Preferred and Common Units Additional Paid-In Capital - Warrants Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Noncontrolling Interest Total Equity (Deficit) Common Units, Class C Preferred Units, Class B-1 Preferred Units, Class B Common Voting Units, Class A Class A Common Stock Class V-1 Common Stock Class V-3 Common Stock Units Amount Units Amount Units Amount Units Amount Shares Amount Shares Amount Shares Amount Balance at September 26, 2020 428,571 $ 2,025 1 $ 221,217 1 $ 437,149 5,997,632 $ 16,809 — $ — — $ — — $ — $ — $ — $ ( 4,418 ) $ ( 856,858 ) $ — $ ( 844,467 ) Retroactive application of recapitalization ratio (1) 24,493,538 — 24,041,299 — 47,508,299 — 361,551,314 — — — — — — — — — — — — — Adjusted balance, beginning of period 24,922,109 $ 2,025 24,041,300 $ 221,217 47,508,300 $ 437,149 367,548,946 $ 16,809 — $ — — $ — — $ — $ — $ — $ ( 4,418 ) $ ( 856,858 ) $ — $ ( 844,467 ) Granted 2,997,310 — — — — — — — — — — — — — — — — — — — Forfeited ( 2,997,310 ) — — — — — — — — — — — — — — — — — — — Unit-based compensation — 97 — — — — — — — — — — — — — — — — — — Accretion of Class C Units to redemption value — 142,853 — — — — — — — — — — — — — — — ( 142,853 ) — ( 142,853 ) Preferred return — — — 11,061 — 21,858 — — — — — — — — — — — ( 32,919 ) — ( 32,919 ) Provision for warrants — — — — — — — — — — — — — — 26,999 — — — — 26,999 Net loss — — — — — — — — — — — — — — — — — ( 122,314 ) — ( 122,314 ) Other comprehensive loss — — — — — — — — — — — — — — — — 2,326 — — 2,326 Balance at September 25, 2021 24,922,109 144,975 24,041,300 232,278 47,508,300 459,007 367,548,946 16,809 — — — — — — 26,999 — ( 2,092 ) ( 1,154,944 ) — ( 1,113,228 ) Granted 1,052,952 — — — — — — — — — — — — — — — — — — — Forfeited ( 1,052,952 ) — — — — — — — — — — — — — — — — — — — Unit-based compensation — 52 — — — — — — — — — — — — — — — — — — Accretion of Class C Units to redemption value — 28,433 — — — — — — — — — — — — — — — ( 28,433 ) — ( 28,433 ) Preferred return — — — 8,130 — 16,065 — — — — — — — — — — — ( 24,195 ) — ( 24,195 ) Issuance of common stock under stock plans — — — — — — — — 1,831,505 — — — — — — 219 — — ( 219 ) — Issuance of sponsor shares — — — — — — — — 3,616,000 — — — — — — 431 — — ( 431 ) — Issuance of earnout units upon triggering event — — — — — — — — — — 20,000,000 2 — — — ( 258 ) — — 256 — Exchange of Class V-1 common stock — — — — — — — — 1,607,185 — ( 1,607,185 ) — — — — 212 — — ( 212 ) — Stock-based compensation — — — — — — — — — — — — — — — 2,794 — — 24,013 26,807 Additional paid-in capital adjustment resulting from VAP Unit modification — — — — — — — — — — — — — — — 2,475 — — 21,275 23,750 Provision for warrants — — — — — — — — — — — — — — 74,280 — — — — 74,280 Exercise of warrants — — — — — — 43,756,942 320,929 — — — — — — ( 43,153 ) — — — — 277,776 Net loss pre business combination — — — — — — — — — — — — — — — — — ( 72,134 ) — ( 72,134 ) 68 Table of Contents Other comprehensive loss pre business combination — — — — — — — — — — — — — — — — 37 — — 37 Recapitalization of Preferred Units, Class C Units, Class A Voting Units, and creation of NCI (net of transaction costs of $ 37,104 ) ( 24,922,109 ) ( 173,460 ) ( 24,041,300 ) ( 240,408 ) ( 47,508,300 ) ( 475,072 ) ( 411,305,888 ) ( 337,738 ) — — 60,844,573 6 416,933,025 42 — 1,191,567 — — ( 301,973 ) 551,904 Recapitalization of SVF equity, PIPE, and FPA (net of transaction costs of $ 30,315 ) — — — — — — — — 50,664,146 5 — — — — — 40,425 — — 381,276 421,706 Net loss post business combination — — — — — — — — — — — — — — — — — ( 6,863 ) ( 60,092 ) ( 66,955 ) Other comprehensive loss post business combination — — — — — — — — — — — — — — — — ( 239 ) — ( 2,136 ) ( 2,375 ) Balance at September 24, 2022 — — — — — — — — 57,718,836 6 79,237,388 8 416,933,025 42 58,126 1,237,865 ( 2,294 ) ( 1,286,569 ) 61,756 68,940 Net loss — — — — — — — — — — — — — — — — — ( 23,866 ) ( 184,028 ) ( 207,894 ) Issuance of common stock under stock plans, net of shares withheld for employee taxes — — — — — — — — 2,825,576 — — — — — — ( 3,337 ) — — ( 23,161 ) ( 26,498 ) Issuance of common stock under employee stock purchase plan, net of shares withheld for employee taxes — — — — — — — — 225,788 — — — — — — 91 — — 704 795 Exchange of Class V-1 and Class V-3 common stock — — — — — — — — 21,342,681 2 ( 11,938,597 ) ( 1 ) ( 9,404,084 ) ( 1 ) — 956 — — ( 956 ) — Cancellation of Class V-1 common stock — — — — — — — — — — ( 367,694 ) — — — — — — — — — Stock-based compensation — — — — — — — — — — — — — — — 18,447 — — 138,281 156,728 Other comprehensive loss — — — — — — — — — — — — — — — — 607 — 4,606 5,213 Balance at September 30, 2023 — $ — — $ — — $ — — $ — 82,112,881 $ 8 66,931,097 $ 7 407,528,941 $ 41 $ 58,126 $ 1,254,022 $ ( 1,687 ) $ ( 1,310,435 ) $ ( 2,798 ) $ ( 2,716 ) (1) As part of the Business Combination (as disclosed in Note 3, Business Combination and Note 17, Equity ), all per share information has been retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement The accompanying notes are an integral part of these consolidated financial statements. 69 Table of Contents Symbotic Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Cash flows from operating activities: Net loss $ ( 207,894 ) $ ( 139,089 ) $ ( 122,314 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 11,311 5,989 4,491 Foreign currency (gains) / losses, net ( 3 ) 25 53 Loss on disposal of assets 2,914 4,098 — Provision for excess and obsolete inventory 22,276 987 — Deferred taxes, net ( 4,620 ) — — Stock-based compensation 154,227 26,858 97 Changes in operating assets and liabilities: Accounts receivable ( 65,817 ) ( 508 ) ( 1,619 ) Inventories ( 66,380 ) ( 60,559 ) ( 16,817 ) Prepaid expenses and other current assets ( 78,906 ) ( 121,143 ) 3,736 Deferred expenses ( 5,428 ) ( 28,665 ) 132,683 Other long-term assets ( 18,635 ) 49 2,313 Accounts payable 41,415 41,528 22,169 Accrued expenses 64,743 37,898 16,187 Deferred revenue 361,518 80,377 67,100 Other long-term liabilities 20,073 3,908 1,488 Net cash and cash equivalents provided by (used in) operating activities 230,794 ( 148,247 ) 109,567 Cash flows from investing activities: Purchases of property and equipment ( 15,688 ) ( 17,950 ) ( 12,168 ) Capitalization of internal use software development costs ( 5,638 ) — — Proceeds from sale of assets 71 — — Proceeds from maturities of marketable securities 130,000 — — Purchases of marketable securities ( 408,209 ) — — Net cash and cash equivalents used in investing activities ( 299,464 ) ( 17,950 ) ( 12,168 ) Cash flows from financing activities: Payment for taxes related to net share settlement of stock-based compensation awards ( 26,674 ) — — Net proceeds from issuance of common stock under employee stock purchase plan 2,573 — — Net proceeds from equity infusion from the Business Combination — 384,672 — Purchase of interest from non-controlling interest — ( 300,000 ) — Proceeds from exercise of warrants — 277,776 — Net cash and cash equivalents provided by (used in) financing activities ( 24,101 ) 362,448 — Effect of exchange rate changes on cash, cash equivalents, and restricted cash 232 572 971 70 Table of Contents Net increase (decrease) in cash, cash equivalents, and restricted cash ( 92,539 ) 196,823 98,370 Cash, cash equivalents, and restricted cash —beginning of period 353,457 156,634 58,264 Cash, cash equivalents, and restricted cash —end of period $ 260,918 $ 353,457 $ 156,634 Non-cash activities: Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 8,734 $ — $ — Preferred Return, Class B-1 — 8,130 11,061 Preferred Return, Class B — 16,065 21,858 The accompanying notes are an integral part of these consolidated financial statements. 71 Table of Contents Symbotic Inc. Notes to the Consolidated Financial Statements 1. Organization and Operations SVF Investment Corp. 3, formerly known as SVF Investment III Corp., (“SVF 3” and, after the Domestication as described below, “Symbotic” or the “Company”) was a blank check company incorporated as a Cayman Islands exempted company on December 11, 2020. SVF 3 was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. Warehouse Technologies LLC (“Legacy Warehouse”), a New Hampshire limited liability company, was formed in December 2006 to make investments in companies that develop new technologies to improve operating efficiencies in modern warehouses. Symbotic LLC, a technology company that develops and commercializes innovative technologies for use within warehouse operations and Symbotic Group Holdings, ULC (“Symbotic Canada”) were wholly owned subsidiaries of Legacy Warehouse. On December 12, 2021, (i) SVF 3 entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Legacy Warehouse, Symbotic Holdings LLC, a Delaware limited liability company (“Symbotic Holdings”), and Saturn Acquisition (DE) Corp., a Delaware corporation and wholly owned subsidiary of SVF 3 (“Merger Sub”) and (ii) Legacy Warehouse entered into an Agreement and Plan of Merger (the “Company Merger Agreement”) with Symbotic Holdings. On June 7, 2022, as contemplated by the Company Merger Agreement, Legacy Warehouse merged with and into Symbotic Holdings (the “Company Reorganization”), with Symbotic Holdings surviving the merger (“Interim Symbotic”). Immediately following such merger, on June 7, 2022, as contemplated by the Merger Agreement, SVF 3 filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SVF 3 was transferred by way of continuation from the Cayman Islands and domesticated as a Delaware corporation, changing its name to “Symbotic Inc.” (the “Domestication”). Immediately following the Domestication of SVF 3, on June 7, 2022, as contemplated by the Merger Agreement, Merger Sub merged with and into Interim Symbotic (the “Merger” and, together with the Company Reorganization, the “Business Combination”), with Interim Symbotic surviving the merger as a subsidiary of Symbotic (“New Symbotic Holdings”). The Business Combination is further described in Note 3, Business Combination . Symbotic is an automation technology company established to develop technologies to improve operating efficiencies in modern warehouses. The Company's vision is to make the supply chain work better for everyone. The Company does this by developing innovative, end-to-end technology solutions that dramatically improve supply chain operations. The Company currently automates the processing of pallets and cases in large warehouses or distribution centers for some of the largest retail companies in the world. Its systems enhance operations at the front end of the supply chain, and therefore benefit all supply partners further down the chain, irrespective of fulfillment strategy. The Company's headquarters are located in Wilmington, Massachusetts, and its Canadian headquarters are located in Montreal, Quebec. 2. Summary of Significant Accounting Policies Basis of Presentation and Foreign Currency Translation The consolidated financial statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries. The consolidated financial statements include 100% of the accounts of wholly-owned and majority-owned subsidiaries and the ownership interest of the minority investors are recorded as a non-controlling interest in a subsidiary. All intercompany balances and transactions have been eliminated in consolidation. The functional currency for the Company’s foreign subsidiaries is based on the subsidiaries’ financial and operational environment and is the applicable local currency. For the Company’s subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated into U.S. dollars at period-end foreign exchange rates. Revenue and expenses are translated into U.S. dollars at the average foreign exchange rates for the period. Translation adjustments are excluded from the determination of net income and are recorded in accumulated other comprehensive income (loss), a separate component of members’ deficit. Certain transactions of the Company and its subsidiaries are denominated in currencies other than the functional currency. Foreign currency transaction losses were less than $ 0.1 million for the years ended September 30, 2023 and 72 Table of Contents September 24, 2022, and $ 0.1 million for the year ended September 25, 2021, and were recorded within other income, net on the consolidated statements of operations. The Company operates and reports using a 52-53 week fiscal year ending on the last Saturday closest to September 30. Accordingly, the Company’s fiscal quarters end on the last Saturday that falls closest to the last day of the third month of each quarter. The fiscal year ended September 30, 2023 was a 53-week period and the years ended September 24, 2022 and September 25, 2021 were 52-week periods. Business Combination The Business Combination was accounted for as a reverse recapitalization as Legacy Warehouse was determined to be the accounting acquirer under Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . This determination was primarily based on Legacy Warehouse comprising the ongoing operations of the combined entity, Legacy Warehouse's senior management comprising the majority of the senior management of the combined company, and the prior shareholders of Legacy Warehouse owning a majority of the voting power of the combined entity. Accordingly, for accounting purposes, the financial statements of the combined entity upon consummation of the Business Combination represented a continuation of the financial statements of Legacy Warehouse with the merger being treated as the equivalent of Legacy Warehouse issuing stock for the net assets of SVF 3, accompanied by a recapitalization. Operations prior to the Business Combination are presented as those of Legacy Warehouse in future reports of the combined entity. The recapitalization had no effect on reported net loss and comprehensive loss, cash flows, total assets, or members' deficit as previously reported. See Note 3, Business Combination, for additional information. The Business Combination resulted in an umbrella partnership corporation (“Up-C”) structure, which is often used by partnerships and limited liability companies (operating as partnerships) undertaking an initial public offering. The Up-C structure allowed Legacy Warehouse equity holders (the “Legacy Warehouse Holders”) to retain their equity ownership in Symbotic Holdings, an entity that is classified as a partnership for U.S. federal income tax purposes, and provides potential future tax benefits for Symbotic when the Legacy Warehouse Holders ultimately redeem their pass-through interests for shares of Class A Common Stock in Symbotic Inc. Under the terms of the Tax Receivable Agreement (“TRA”), 85 % of these potential future tax benefits realized by Symbotic Inc. as a result of such redemptions will be paid to certain Legacy Warehouse Holders (the “TRA Holders”). Noncontrolling Interests Noncontrolling interests represent the portion of Symbotic Inc. that the Company controls and consolidates but does not own. The noncontrolling interest was created as a result of the Business Combination by issuing non-economic shares to the prior investors in Legacy Warehouse. The Company recognizes each noncontrolling holder’s respective share of the estimated fair value of the net assets at the date of formation or acquisition. Noncontrolling interests are subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. The Company allocates net income or loss to noncontrolling interests based on the weighted average ownership interest during the period. The net income or loss attributable to noncontrolling interests is reflected in the Consolidated Statements of Operations. The Company does not recognize a gain or loss on transactions with a consolidated entity in which it does not own 100% of the equity, but the Company reflects the difference in cash received or paid from the noncontrolling interests and carrying amount as additional paid-in capital. Class V-1 and Class V-3 shares are exchangeable, along with common units of Symbotic Holdings, into an equal number of the Company’s Class A Common Stock. Class A Common Stock issued upon exchange of a holder’s noncontrolling interest is accounted for at the carrying value of the surrendered limited partnership interest and the difference between the carrying value and the fair value of the Class A Common Stock issued is recorded to additional paid-in-capital. Variable Interest Entities The Company may enter into strategic investments or other investments or arrangements that are considered variable interest entities (“VIE”). If the Company is a primary beneficiary of a VIE, it is required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The assessment of whether the Company is the primary beneficiary of its VIE investments requires significant assumptions and judgments. VIEs that are not consolidated are accounted for under the measurement alternative, equity method, amortized cost, or other appropriate methodology based on the nature of the interest held. 73 Table of Contents Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments, and assumptions. Significant estimates, judgments, and assumptions used in these financial statements include, but are not limited to, those related to revenue, useful lives and realizability of long-lived assets, accounting for income taxes and related valuation allowances, and stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions, and judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and will be recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. Operating Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. Accordingly, the Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Cash, Cash Equivalents, and Marketable Securities Cash and cash equivalents consist of cash and highly liquid investments that are readily convertible into cash and have original maturities of three months or less at the date of purchase. The Company invests its excess cash primarily in money market funds or demand deposit accounts of major financial institutions. Accordingly, the Company’s cash and cash equivalents are subject to minimal credit and market risk. The Company’s cash and cash equivalents are carried at cost, which approximates fair value. Marketable securities consist of U.S. Treasury securities. Securities having remaining maturities of more than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets. The Company classifies its debt investments with readily determinable market values as available-for-sale. These investments are classified as investments on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature reported as accumulated other comprehensive loss, a separate component of stockholders’ equity. The Company reviews all investments for reductions in fair value that are other-than-temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Investments are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary. The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors: the duration of the period that, and extent to which, the fair value is less than cost basis; the financial health of, and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors; overall market conditions and trends and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value. Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established. Presentation of Restricted Cash Restricted cash consists of collateral required for a credit card processing program. The short-term or long-term classification is determined in accordance with the required amount of time the cash is to be held as collateral, which is short- 74 Table of Contents term for less than 12 months, and long-term for greater than 12 months from the balance sheet date. As the cash is required to be held as collateral for a period which is greater than 12 months from September 30, 2023, it is presented in other long-term assets. The following table summarizes the end-of-period cash and cash equivalents from the Company’s Consolidated Balance Sheets and the total cash, cash equivalents, and restricted cash as presented on the accompanying Consolidated Statements of Cash Flows (in thousands): Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Cash and cash equivalents $ 258,770 $ 353,457 $ 156,634 Restricted cash classified in: Other long-term assets 2,148 — — Cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 260,918 $ 353,457 $ 156,634 Accounts Receivable Accounts receivable consists primarily of trade receivables from customers. The Company estimates the allowance for doubtful accounts for accounts receivable based on the aging of the receivables, customer financial statements, historical collection experience, existing economic conditions, and other available information. The Company had no allowances for doubtful accounts at September 30, 2023, September 24, 2022, and September 25, 2021. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are generally held with large financial institutions. Although the Company’s deposits may exceed federally insured limits, the financial institutions that the Company uses have high investment-grade credit ratings and, as a result, the Company believes that, as of September 30, 2023, its risk relating to deposits exceeding federally insured limits was not significant. The Company has no significant off-balance sheet risk such as foreign exchange contracts, options contracts, or other hedging arrangements. The Company believes its credit policies are prudent and reflect normal industry terms and business risk. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. For the year ended September 30, 2023, there was one customer that accounted for 10% or more of total revenue, there was one customer that accounted for 10% or more of total revenue for the year ended September 24, 2022, and there were two customers that accounted for 10% or more of total revenue for the year ended September 25, 2021. The following table represents these customers’ aggregate percent of total revenue. The symbol “n/a” indicates that such customer’s revenue balance at the period indicated within the table did not exceed 10% of the Company’s revenue balance. Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Customer A 88.4 % 94.4 % 66.9 % Customer B n/a n/a 28.1 % Aggregate Percent of Total Revenue 88.4 % 94.4 % 95.0 % At September 30, 2023, two customers accounted for over 10% of the Company’s accounts receivable balance, and three customers accounted for over 10% of the Company’s accounts receivable balance at September 24, 2022. The following table represents these customers’ aggregate percent of total accounts receivable. The symbol “n/a” indicates that such customer’s accounts receivable balance at the period indicated within the table did not exceed 10% of the Company’s accounts receivable balance. 75 Table of Contents September 30, 2023 September 24, 2022 Customer A 86.6 % 39.5 % Customer B 10.3 % 40.7 % Customer C n/a 15.3 % Aggregate Percent of Total Accounts Receivable 96.9 % 95.5 % The concentration in the volume of business transacted with these customers may lead to a material impact on the Company’s results from operations if a total or partial loss of the business relationship were to occur. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance which would result in a material adverse impact to its results of operations or liquidity and financial condition. Volume of Business The Company has concentrations in the volume of purchases it conducts with its suppliers. For the fiscal year ended September 30, 2023, there was one supplier that accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $ 164.8 million. For the fiscal year ended September 24, 2022, there was one supplier that accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $ 69.1 million. Fair Value Measurements The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, and accounts payable. The carrying amounts of these financial instruments approximate their fair value due to their short-term nature. Inventories Inventories are stated at the lower of cost or net realizable value. Cost approximates actual cost on a first-in, first-out basis. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolete, or impaired balances. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Property and Equipment and Internal Use Software Property and equipment include purchases of items with a per-unit value greater than $ 2,000 and an estimated useful life greater than one year . Property and equipment are recorded at cost upon acquisition. Depreciation is computed using the straight-line method and depreciation expense is allocated between cost of revenue, research and development expenses, and selling, general, and administrative expenses on the statements of operations over the following estimated useful lives: Estimated Useful Life Computer equipment and software, furniture and fixtures, and test equipment 3 - 5 years Internal use software 5 years Leasehold improvements Shorter of estimated useful life or remaining term of the lease Expenditures that improve or extend the life of an asset are capitalized while repairs and maintenance expenditures are expensed as incurred. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. As assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in loss from operations. The Company capitalizes certain internal and external costs incurred to acquire or create internal use software. Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees who are directly associated with, and who devote time to, the Company’s internal use software projects. Capitalization begins when the planning stage is complete and the Company commits resources to the software project; capitalization continues during the application development stage, and ceases when the software has been tested and is ready for its intended use. Costs incurred during the planning, training, and post-implementation stages of the software development life cycle are expensed as incurred. Capitalized internal use software is included in property, plant, and equipment and is depreciated over 5 years once development is complete. 76 Table of Contents Acquired Intangible Assets and Long-Lived Assets Acquired intangible assets consist of customer relationships and trademarks. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company periodically evaluates the recoverability of its long-lived assets, such as property and equipment and intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If the carrying amount of the assets exceeds the expected future undiscounted net cash flows to be generated by the assets, then an impairment charge is recognized to the extent the carrying amount of the asset exceeds its fair value. For the year ended September 30, 2023, $ 0.1 million of impairment losses were recognized. No impairment losses were recognized in the years ended September 24, 2022 and September 25, 2021. Leases The Company determines if an arrangement is a lease at its inception. When the arrangements include lease and non-lease components, the Company separates them and does not account for them as a single lease component. Leases with an initial term of less than 12 months are not reported on the balance sheet, but rather recognized as lease expense on a straight-line basis over the lease term. Arrangements may include options to extend or terminate the lease arrangement. These options are included in the lease term used to establish right-of-use (“ROU”) assets and lease liabilities when it is reasonably certain they will be exercised. The Company will reassess expected lease terms based on changes in circumstances that indicate options may be more or less likely to be exercised. The Company has lease arrangements that include variable rental payments. The future variability of these payments and adjustments are unknown and therefore are not included in minimum rental payments used to determine the ROU assets and lease liabilities. The Company has lease arrangements where it makes separate payments to the lessor based on the lessor’s common area maintenance expenses, property and casualty insurance costs, property taxes assessed on the property, and other variable expenses. Variable rental payments are recognized in the period in which their associated obligation is incurred. As most of the Company’s lease arrangements do not provide an implicit interest rate, an incremental borrowing rate is applied in determining the present value of future payments. The Company’s incremental borrowing rate is selected based upon information available at the lease commencement date, and represents the Company’s estimate of an interest rate that it would be able to obtain from a lender to borrow, on a collateralized basis, over a similar term to obtain an asset of similar value in a similar economic environment. The ROU assets are reported as “Other long-term assets” and lease liabilities are reported as “Other current liabilities” and “Other long-term liabilities” on the consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term and is included in “Selling, general, and administrative expenses” in the consolidated statements of operations. Variable lease expense is included in “Selling, general, and administrative expenses” in the consolidated statements of operations. Revenue Recognition Revenue is recognized in accordance with the five-step model set forth by Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606”), which involves identification of the contract, identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations, and revenue recognition as the performance obligations are satisfied. The Company generates revenue through its design and installation of modular inventory management systems (the “Systems”) to automate customers’ depalletizing, storage, selection, and palletization warehousing processes. The Systems have both a hardware component and an embedded software component that enables the system to be programmed to operate within specific customer environments. The Company enters into contracts with customers that can include various combinations of services to design and install the Systems. These services are generally distinct and accounted for as separate performance obligations. As a result, each customer contract may contain multiple performance obligations. The Company determines whether performance obligations are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the Company’s commitment to provide the services to the customer is separately identifiable from other obligations in the contract. 77 Table of Contents The Company has identified the following distinct performance obligations in its contracts with customers: 1. Systems : The Company designs, assembles, and installs modular hardware systems and performs configuration of embedded software. Systems include the delivery of hardware and an embedded software component, sold as either a perpetual or term-based on-premise license, that automate customers’ depalletizing, storage, selection, and palletization warehousing processes. The modular hardware and embedded software are each not capable of being distinct because a customer cannot benefit from the hardware or software on their own. Accordingly, they are treated as a single performance obligation. Fees for systems are typically fixed or cost-plus fixed fee amounts that are due based on the achievement of a variety of milestones beginning at contract inception through final acceptance. The substantial majority of the Company’s embedded software component is sold as a perpetual on-premise license; however, the Company does sell an immaterial amount of term-based on-premise licenses. 2. Software maintenance and support : Software maintenance and support refer to support services that provide the customer with technical support, updates, and upgrades to the embedded software license. Fees for the software maintenance and support services are typically payable in advance on a quarterly, or annual basis over the term of the software maintenance and support service contract, which term can range from one to 15 years but, for a substantial majority of the Company’s software maintenance and support contracts, is 15 years. 3. Operation services : The Company provides the customer with assistance operating the System and ensuring user experience is optimized for efficiency and effectiveness. Fees for operation services are typically invoiced to customers on a time and materials basis monthly in arrears or using a fixed fee structure. The Company recognizes revenue upon transfer of control of promised goods or services in a contract with a customer, generally as title and risk of loss pass to the customer, in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue is recognized only to the extent that it is probable that a significant reversal of revenue will not occur and when collection is considered probable. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Shipping and handling costs billed to customers are included in revenue and the related costs are included in cost of revenue when control transfers to the customer. The Company presents amounts collected from customers for sales and other taxes net of the related amounts remitted. For contracts that contain multiple performance obligations, the transaction price is allocated to each performance obligation based on a relative standalone selling price when available. If standalone selling price is not available, the Company estimates the standalone selling price of each performance obligation, which is generally based on an expected cost plus a margin approach. The design, assembly, and installation of a System includes substantive customer-specified acceptance criteria that allow the customer to accept or reject Systems that do not meet the customer’s specifications. When the Company cannot objectively determine that acceptance criteria will be met upon contract inception, revenue relating to Systems is deferred and recognized at a point in time upon final acceptance from the customer. If acceptance can be reasonably certain upon contract inception, revenue is recognized over time based on an input method, using a cost-to-cost measure of progress. During fiscal year 2021, the Company was able to objectively determine that acceptance criteria will be met upon contract inception, and as such, for contracts with customers entered into during fiscal year 2021 through 2023, revenue related to systems is accounted for over time as described above. The transaction price is allocated to the software maintenance and support service performance obligation based on the respective standalone selling price. The allocated amount is then recognized ratably over the term of the software maintenance and support service contract. Operation services revenue is recognized over time as the services are performed and costs are incurred. Contract liabilities consist of deferred revenue. Deferred revenue is recorded when the Company has a right to invoice or payments have been received for undelivered products or services, or in situations where revenue recognition criteria have not been met. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as long-term deferred revenue. Costs to fulfill a contract are presented as deferred expenses on the consolidated balance sheets and consist of costs incurred by the Company to fulfill its obligations under a contract once it is obtained, but before transferring goods or services to the customer. These costs relate directly to a contract that the Company can specifically identify, are costs to generate or enhance resources of the Company that are used in satisfying performance obligations and are costs which are 78 Table of Contents expected to be recovered. Accordingly, these costs are recognized on the consolidated balance sheets as an asset and are recognized consistent with the pattern of the transfer of the goods or services to which the asset relates. For all contracts, the Company recognizes anticipated contract losses as a charge to cost of revenue as soon as they become evident. As of September 30, 2023, there were no anticipated contract losses recorded in accrued expenses on the consolidated balance sheets. The Company’s warehouse automation system generally provides for a limited warranty that promises customers that delivered products are as specified. The Company’s standard warranty provides for repair or replacement of the associated System parts during the warranty period. The Company records estimated warranty costs in the period the related revenue is recognized based on historical experience or expectations of future costs to repair or replace. Actual results could differ from these estimates, which could cause increases or decreases in warranty reserves in future periods. The Company has not deferred sales commissions and other costs to obtain a contract because such amounts that would qualify for deferral are not material. An allowance for future sales returns is established based on historical trends in product return rates. There was no allowance for future sales returns at September 30, 2023, September 24, 2022, and September 25, 2021. Warrant Transactions On July 23, 2023, the Company, New Symbotic Holdings, and Symbotic US (collectively, the “Symbotic Group”), entered into a Framework Agreement (the “Framework Agreement”) with Sunlight Investment Corp., a Delaware corporation (“Sunlight”), SVF II Strategic Investments AIV LLC, a Delaware limited liability company (“SVF” and, together with Sunlight, “SoftBank”), and GreenBox Systems LLC, a Delaware limited liability company (“GreenBox”), related to the formation of GreenBox as a strategic joint venture between the Symbotic Group and SoftBank, the entry into a Limited Liability Company Agreement of GreenBox and Master Services, License and Equipment Agreement and the issuance of a warrant to purchase Class A Common Stock of Symbotic (the “GreenBox Warrant”). The GreenBox Warrant issues SoftBank warrants to acquire up to an aggregate of 11,434,360 shares of Symbotic Class A common stock, subject to certain vesting conditions as GreenBox makes expenditures of the Company’s warehouse automation system under the Framework Agreement. Upon vesting, units may be acquired at an exercise price of $ 41.9719 . The right to purchase units in connection with the GreenBox Warrant expires on July 23, 2032. On April 30, 2021, the Company and Walmart Inc. (“Walmart”) entered into a Subscription Agreement (the “Subscription Agreement”), in which the Company issued to Walmart warrants to acquire up to an aggregate of 714,022 shares of the Legacy Warehouse Class A Units (the “Warrants” and the Class A Units issuable thereunder, the “Warrant Units”), subject to certain vesting conditions. Warrants equivalent to 6.5 % of the Company’s then outstanding and issuable Common Units, or 446,741 units, vested upon the signing of the Subscription Agreement. Warrants equivalent to up to 3.5 % of the Company’s then outstanding and issuable Common Units, or 267,281 units, were subject to vest in connection with conditions defined by the terms of the Warrant, as Walmart made additional expenditures to the Company in connection with the Subscription Agreement, and vested on May 20, 2022. Upon vesting, units were acquired at an exercise price of $ 389.03 . The right to purchase units in connection with the Subscription Agreement expires on April 30, 2031. On May 20, 2022, the Company and Walmart entered into the 2nd Amended and Restated Master Automation Agreement (“2nd A&R MAA”), in which the Company issued to Walmart a new warrant to acquire up to an aggregate of 258,972 Legacy Warehouse Class A Units (“May 2022 Warrant”), subject to certain vesting conditions. In connection with the closing of the Business Combination, the May 2022 Warrant was converted into a new warrant to acquire up to an aggregate of 15,870,411 common units of Symbotic Holdings (“June 2022 Warrant” and, the common units of Symbotic Holdings issuable thereunder, the “Warrant Units”). Warrant Units equivalent to up to 3.6 % of the Company’s then outstanding and issuable Common Units, or 15,870,411 units, may vest in connection with conditions defined by the terms of the June 2022 Warrant. Upon vesting, units may be acquired at an exercise price of $ 10.00 . The right to purchase units in connection with the June 2022 Warrant expires on June 7, 2027. The warrant units granted to Walmart and the GreenBox Warrant are accounted for as equity instruments and measured in accordance with ASC 718, Compensation—Stock Compensation . These instruments are classified in the consolidated statements of operations in accordance with ASC 606, Revenue from Contracts with Customers, and ASU 2019-08, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”). For awards granted to a customer which are not in exchange for distinct goods or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of the transaction price, in accordance with ASC 606. To determine the fair value of the warrants in accordance with ASC 718, the Company used pricing models based in part on assumptions for which management is required to use judgment. Based on the fair value of the awards, the 79 Table of Contents Company determines the amount of warrant expense based on the customer’s pro-rata achievement of vesting conditions, which is recorded as a reduction to the transaction price. Research and Development Expenses Costs incurred in the research and development of the Company’s products are expensed as incurred, except for certain internal use software development costs eligible for capitalization as discussed above. Research and development costs include personnel, contracted services, materials, and indirect costs involved in the design and development of new products and services, as well as depreciation expense. Selling, General, and Administrative Expenses Selling, general, and administrative expenses include all costs that are not directly related to satisfaction of customer contracts or research and development. Selling, general, and administrative expenses include items for the Company’s selling and administrative functions, such as sales, finance, legal, human resources, and information technology support. These functions include costs for items such as salaries and benefits and other personnel-related costs, maintenance and supplies, professional fees for external legal, accounting, and other consulting services, intangible asset amortization, and depreciation expense. Stock-based Compensation The Company recognizes compensation costs for all stock-based payment awards based upon the awards’ grant-date fair value. The stock-based payment awards include restricted stock units. For stock awards that contain only a service-based vesting feature, the Company recognizes compensation cost on a graded vesting basis over the award’s vesting period. For performance-based restricted stock awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. The Company recognizes the effect of pre-vesting forfeitures as they occur. The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified. Income Taxes As a result of the Business Combination, the Company was appointed as the sole managing member of Symbotic Holdings. Symbotic Holdings is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income taxes. Any taxable income or loss generated by Symbotic Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis, subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of Symbotic Holdings. Additionally, there are foreign subsidiaries of Symbotic Holdings that are subject to income tax in their local jurisdictions. Refer to Note 11, Income Taxes , for further details. The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. 80 Table of Contents Tax Receivable Agreement In connection with the Business Combination, the Company entered into a Tax Receivable Agreement, which generally provides for the payment by the Company to the TRA Holders of their proportionate share of 85% of the tax savings, if any, in U.S. federal and state income tax that is realized by the Company (or are deemed to realize in certain circumstances) as a result of (i) the existing tax basis in certain assets of New Symbotic Holdings that is allocable to the relevant New Symbotic Holdings Common Units, (ii) any step-up in tax basis in New Symbotic Holdings’ assets resulting from the relevant Exchanges and certain distributions (if any) by New Symbotic Holdings and payments under the Tax Receivable Agreement, and (iii) tax benefits related to imputed interest deemed to be paid by the Company as a result of payments under the Tax Receivable Agreement. The Company records liabilities for amounts payable under the Tax Receivable Agreement in the period in which the payment is deemed to be probable. Further, payments under the Tax Receivable Agreement are only expected to be made in periods following the filing of a tax return in which the Company is able to utilize tax benefits described above to reduce its cash taxes paid to a taxing authority. Emerging Growth Company The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has not elected to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. The Company will be eligible to use this extended transition period under the JOBS Act until the earlier of the date it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of the Company’s financials to those of other public companies more difficult. The Company will cease to be an EGC on the date that is the earliest of (i) the end of the fiscal year in which total annual gross revenue exceeds $1.235 billion, (ii) the last day of the Company’s fiscal year following March 11, 2026 (the fifth anniversary of the date on which SVF 3 consummated the initial public offering of SVF 3), (iii) the date on which the Company has issued more than $1.0 billion in non-convertible debt during the preceding three-year period; or (iv) the end of the fiscal year in which the market value of the Company’s common stock held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter. As of the last business day of the most recently completed second fiscal quarter ended March 25, 2023, the market value of the Company’s common stock held by non-affiliates was approximately $ 517.0 million (based on the closing sales price of the Class A common stock on March 24, 2023 of $ 21.68 ). Additionally, the Company’s total annual revenue did not exceed $1.235 billion for the year ended September 30, 2023, and the Company has not issued any non-convertible debt during the preceding three-year period. Therefore, the Company continues to be an EGC as of the end of the current fiscal year ended September 30, 2023. 81 Table of Contents Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (“ASU 2016-02”). The ASU requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides entities with a new transition method where comparative periods presented in the financial statements in the period of adoption will not need to be restated. Under this new transition method, an entity initially applies the provisions of the standard at the adoption date, versus at the beginning of the earliest period presented, and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted ASU 2016-02 and ASU 2018-11 on September 25, 2022, as required by the ASUs, and utilized the cumulative effect adjustment approach, which did not result in an adjustment to the Company’s opening balance of retained earnings. At adoption, the Company recognized ROU assets and lease liabilities of $ 5.5 million and $ 6.4 million, respectively, on the balance sheet at September 25, 2022. The new standard did not materially impact the statements of operations, cash flows, or stockholders’ equity (deficit). In addition, the Company provides expanded disclosures related to its leasing arrangements in accordance with these ASUs. Refer to Note 6, Leases, for additional information. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes—Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles as well as clarifying and amending existing guidance to improve consistent application. The guidance is effective to the Company for fiscal years beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2019-12 on September 25, 2022 and there was not a material impact of the adoption to the Company’s financial statements. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the new standard to have a material impact on its consolidated financial statements. Other recent accounting pronouncements that are or will be applicable to the Company did not, or are not expected to, have a material impact on the Company’s present or future financial statements. 3. Business Combination On June 7, 2022 (the “Closing”), SVF 3 consummated the Business Combination pursuant to the Merger Agreement and Company Merger Agreement. In connection with the consummation of the Business Combination, the registrant changed its name from SVF Investment Corp. 3 to Symbotic Inc. As a result of and upon the effective time of the Domestication, among other things, each of the then-issued and outstanding Class A ordinary shares, par value $ 0.0001 per share, of SVF 3 (“SVF Class A Ordinary Shares”) automatically converted, on a one-for-one basis, into a share of Class A Common Stock, par value $ 0.0001 per share, of Symbotic (“Class A Common Stock”), and each of the then-issued and outstanding Class B ordinary shares, par value $ 0.0001 per share, of SVF 3 (“SVF Class B Ordinary Shares”) automatically converted, on a one-for-one basis, into a share of Class B Common Stock, par value $ 0.0001 per share, of Symbotic (“Class B Common Stock”). In connection with the Closing, as contemplated by the Merger Agreement and Company Merger Agreement: • Legacy Warehouse merged with and into Symbotic Holdings, with Interim Symbotic surviving the merger; • Merger Sub merged with and into Interim Symbotic, with Interim Symbotic surviving the merger as a subsidiary of Symbotic; • at the effective time of the Merger (the “Effective Time”), New Symbotic Holdings entered into the Second Amended and Restated Limited Liability Company Agreement of Symbotic Holdings LLC (the “New Symbotic Holdings LLC Agreement”), which, among other things, provided that Symbotic will be the managing member of New Symbotic Holdings; and • at the Effective Time, each common unit of Interim Symbotic that was issued and outstanding immediately prior to the Effective Time was converted into the right to receive a number of common units in New Symbotic Holdings 82 Table of Contents (“New Symbotic Holdings Common Units”), which New Symbotic Holdings Common Units entitle the holder to the distributions, allocations and other rights under the New Symbotic Holdings LLC Agreement, and an equal number of either shares of Class V-1 common stock, par value $ 0.0001 , of Symbotic (“Class V-1 Common Stock”) or shares of Class V-3 common stock, par value $ 0.0001 , of Symbotic (“Class V-3 Common Stock”), as well as the contingent right to receive certain earnout interests, in each case, as set forth in the Merger Agreement. Following the Business Combination, consistent with the Up-C structure, Legacy Warehouse unitholders hold their economic interests directly in New Symbotic Holdings. All other investors, including SVF 3 shareholders, hold their economic interests through Symbotic Inc. Legacy Warehouse unitholders also hold voting interests in Symbotic Inc. in the form of voting stock with no economic rights (including rights to dividends and distributions upon liquidation). The Company issued an aggregate of 60,844,573 shares of Class V-1 Common Stock and 416,933,025 shares of Class V-3 Common Stock, each of which is exchangeable, together with a New Symbotic Holdings Common Unit, into an equal number of Class A Common Stock. Each of the then-issued and outstanding shares of Class B Common Stock were converted into a share of Class A Common Stock at the Effective Time. Pursuant to the Merger Agreement, the Legacy Warehouse unitholders were entitled to receive an aggregate of up to 20.0 million New Symbotic Holdings Common Units and an equal number of shares of the Company's Class V-1 Common Stock (“Earnout Shares”). The Earnout Shares were to be issued if the Class A Common Stock volume weighted average price of shares was greater than or equal to $ 12.00 (“Triggering Event I”), $ 14.00 (“Triggering Event II”), and $ 16.00 (“Triggering Event III”) per share for a certain period of time. A total of 6,666,667 Earnout Shares were issued upon Triggering Event I, 6,666,667 Earnout Shares were issued upon Triggering Event II, and 6,666,666 Earnout Shares were issued upon Triggering Event III. All three triggering events were achieved by the end of the preceding fiscal year, September 24, 2022, which resulted in a one-time issuance of 20.0 million of New Symbotic Common Units and an equal number of shares of the Company’s Class V-1 Common Stock to certain existing stockholders of Symbotic Inc. In connection with the Domestication, the 9,040,000 shares held by SVF 3 insiders (“Sponsor Shares”) converted to the Company's Class A Common Stock. Pursuant to a letter agreement entered into in connection with the Merger Agreement (i) 60 % or 5,424,000 Sponsor Shares vested at the Closing, (ii) 20 % or 1,808,000 Sponsor Shares vested upon the occurrence of Triggering Event I, and (iii) 20 % or 1,808,000 of the Sponsor Shares vested upon the occurrence of Triggering Event II. Concurrently with the execution of the Merger Agreement, the Company entered into subscription agreements with certain investors (the “PIPE”), pursuant to which the PIPE investors purchased, immediately prior to the closing, an aggregate of $ 205.0 million of the Company's Class A Common Stock at a purchase price of $ 10.00 per share, or 20.5 million Class A Common Stock. In connection with SVF 3's initial public offering (“IPO”), SVF 3 entered into a forward purchase agreement (the “FPA”) with SVF II SPAC Investment 3 (DE) LLC (the “Forward Purchase Investor”), an affiliate of the sponsor of SVF 3, SVF Sponsor III (DE) LLC, pursuant to which the Forward Purchase Investor elected to purchase an aggregate of $ 200.0 million Class A Common Stock for $ 10.00 per share, or 20.0 million Class A Common Stock. The Forward Purchase was consummated immediately prior to the consummation of the Merger. Following the Closing, the Company purchased from an affiliated entity of the Symbotic Founder Common Units in New Symbotic Holdings for $ 300.0 million. Upon the Closing, the Company received net cash proceeds of $ 84.7 million. The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of stockholders' equity for the year ended September 24, 2022 (in thousands): Amount Cash proceeds from SVF 3, net of redemptions $ 47,021 Cash proceeds from PIPE Financing 205,000 Cash proceeds from forward purchase agreement 200,000 Less: cash payment of transaction expenses and underwriting fees - SVF 3 ( 30,315 ) Net cash proceeds from the Business Combination and PIPE Financing 421,706 Less: repurchase by Symbotic Inc. of New Symbotic Holdings Common Units ( 300,000 ) Cash received for Class V-1 and Class V-3 Common Stock 70 Less: transaction expenses - Symbotic ( 37,104 ) Net contributions from the Business Combination $ 84,672 83 Table of Contents The total number of shares of the Company's common stock outstanding immediately following the Closing of the Business Combination was 528,441,744 , comprised as follows: Shares Class A - Public Stockholders 4,540,146 Class A - Sponsor Shares (1) (4) 5,624,000 Class A - Subscription Agreements 20,500,000 Class A - Forward Purchase Agreement 20,000,000 Class V-1 Legacy Warehouse Holders (1) (2) (3) 60,844,573 Class V-3 Legacy Warehouse Holders (1) (3) 416,933,025 Total Shares at Closing 528,441,744 (1) Excludes 20,000,000 Earnout Interests and 3,616,000 Sponsor Shares which were subject to vesting based on achievement of certain share price targets. (2) Excludes approximately 15,870,411 unvested warrant units at the time of the Closing. (3) Class V-1 and V-3 common stock are non-economic and carry one and three votes per share, respectively, whereas Class A Common Stock are economic shares and have one vote per share. (4) Includes 200,000 shares issued as part of a working capital loan settlement. The Company incurred $ 37.1 million in transaction costs relating to the Business Combination with SVF 3, which was offset against additional paid-in capital in the Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit). 4. Noncontrolling Interests Upon completion of the Business Combination, Symbotic Inc. issued an aggregate of 60,844,573 shares of Symbotic Class V-1 Common Stock and 416,933,025 shares of Symbotic Class V-3 Common Stock, excluding earnouts, each of which is exchangeable, together with a New Symbotic Holdings Common Unit, into an equal number of Class A Common Stock. Class V-1 and Class V-3 Common Stock are non-economic voting shares in Symbotic Inc. where Class V-1 Common Stock have one vote per share and Class V-3 Common Stock have three votes per share. Class V-3 Common Stock can convert into Class V-1 Common Stock in certain situations, including automatically, seven years following the Business Combination. The financial results of Legacy Warehouse were consolidated into Symbotic Inc. and the share of the consolidated net loss for the period June 7, 2022 through September 24, 2022 were allocated to noncontrolling interests. The following table summarizes the ownership of Symbotic Inc. stock for the year ended September 30, 2023. Class A Common Stock Class V-1 and Class V-3 Common Stock Total Class A Common Stock Class V-1 and Class V-3 Common Stock Total Beginning of period 57,718,836 496,170,413 553,889,249 Issuances 3,051,364 — 3,051,364 Exchanges 21,342,681 ( 21,342,681 ) — Cancellations — ( 367,694 ) ( 367,694 ) End of period 82,112,881 474,460,038 556,572,919 14.8 % 85.2 % 100 % 5. Revenue Disaggregation of Revenue The Company provides disaggregation of revenue based on product and service type on the consolidated statements of operations as it believes these categories best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. 84 Table of Contents Contract Balances The following table provides information about accounts receivable, unbilled accounts receivable, and contract liabilities from contracts with customers (in thousands): September 30, 2023 September 24, 2022 Accounts receivable $ 69,206 $ 3,412 Unbilled accounts receivable $ 121,149 $ 101,816 Contract liabilities $ 787,227 $ 425,709 The change in the opening and closing balances of the Company’s accounts receivable primarily results from the increase in ongoing customer system implementations in the current fiscal year as well as the timing of when customer payments are due. The change in the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The Company’s performance obligations are typically satisfied over time as work is performed. Payment from customers can vary, and is often received in advance of satisfaction of the performance obligations, resulting in a contract liability balance. During the years ended September 30, 2023 and September 24, 2022, the Company recognized $ 387.6 million and $ 359.5 million, respectively, of the contract liability balance as revenue upon transfer of the products or services to customers. Remaining Performance Obligations Remaining performance obligations represent the aggregate amount of the transaction price allocated to performance obligations not delivered, or partially undelivered, at the end of the reporting period. Remaining performance obligations include deferred revenue plus unbilled amounts not yet recorded in deferred revenue. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in scope of contracts, periodic revalidation, adjustments for revenue that have not materialized, adjustments for inflation, and adjustments for currency. For contracts with a duration of greater than one year, the transaction price allocated to performance obligations that are unsatisfied as of September 30, 2023 was $ 23.3 billion, which is primarily comprised of undelivered or partially undelivered Systems under contract, and which a substantial majority relates to undelivered or partially undelivered Systems in connection with the Master Automation Agreement with Walmart to implement systems in all of Walmart’s 42 regional distribution centers, as well as the Commercial Agreement with GreenBox for which Symbotic will implement its warehouse automation system into GreenBox distribution center locations. The definition of remaining performance obligations excludes those contracts that provide the customer with the right to cancel or terminate the contract without incurring a substantial penalty. The Company expects to recognize approximately 8 % of its remaining performance obligations as revenue in the next 12 months, approximately 60 % of its remaining performance obligations as revenue within 5 years, and the remaining thereafter, which is dependent on the timing of System installation timelines. The Company does not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. 6. Leases In connection with the adoption of ASUs 2016-02 and 2018-11 (see Note 2, Summary of Significant Accounting Policies ), the Company updated its policy for recognizing leases under ASC Topic 842. A summary of the updated policy is included in Note 2, Summary of Significant Accounting Policies . Prior to September 25, 2022, the Company accounted for leases under ASC Topic 840, Leases. Lease Portfolio The Company leases office space in Wilmington, MA and Montreal, QC through operating lease arrangements. The Company has no finance lease agreements. The operating lease arrangements expire at various dates through December 2030. Impact of Adoption The Company utilized the cumulative effect adjustment method of adoption and, accordingly, recorded ROU assets and lease liabilities of $ 5.5 million and $ 6.4 million, respectively, on the balance sheet at September 25, 2022. The Company elected the following practical expedients in accordance with ASC Topic 842: • Reassessment elections - The Company elected the package of practical expedients, and did not reassess whether any existing contracts are or contain a lease, provided a lease analysis was conducted under ASC Topic 840. To the 85 Table of Contents extent leases were identified under ASC Topic 840, the Company did not reassess the classification of those leases. Additionally, to the extent initial direct costs were capitalized under ASC Topic 840 and are not amortized as a result of the implementation of ASC Topic 842, they were not reassessed. • Short-term lease election - ASC Topic 842 allows lessees an option to not recognize ROU assets and lease liabilities arising from short-term leases. A short-term lease is defined as a lease with an initial term of 12 months or less. The Company elected to not recognize short-term leases as ROU assets and lease liabilities on the balance sheet. All short-term leases which are not included on the Company’s balance sheet will be recognized within lease expense. Leases that have an initial term of 12 months or less with an option for renewal will need to be assessed in order to determine if the lease qualifies for the short-term lease exception. If the option is reasonably certain to be exercised, the lease does not qualify as a short-term lease. The following table presents the balance sheet location of the Company’s operating leases (in thousands): September 30, 2023 ROU assets: Other long-term assets $ 12,398 Lease Liabilities: Accrued expenses and other current liabilities $ 1,347 Other long-term liabilities 12,291 Total lease liabilities $ 13,638 The following table presents maturities of the Company’s operating lease liabilities as of September 30, 2023, presented under ASC Topic 842 (in thousands): September 30, 2023 Fiscal year 2024 $ 2,335 Fiscal year 2025 2,037 Fiscal year 2026 2,419 Fiscal year 2027 2,551 Fiscal year 2028 and thereafter 8,833 Total future minimum payments $ 18,175 Less: Implied interest ( 4,537 ) Total lease liabilities $ 13,638 As of September 30, 2023, the weighted-average remaining lease term and the weighted-average incremental borrowing rate of the Company’s operating leases was approximately 6.29 years and 7.9 %, respectively. Operating cash flows for amounts included in the measurement of the Company’s operating lease liabilities were $ 2.0 million for the year ended September 30, 2023. Net rental expense under operating leases was $ 3.0 million for the year ended September 30, 2023, $ 2.4 million for the year ended September 24, 2022, and $ 2.3 million for the year ended September 25, 2021. As previously disclosed in our fiscal year 2022 Annual Report on Form 10-K and under the previous lease accounting standard, the future minimum lease payments under all noncancellable operating lease agreements as of September 24, 2022 are as follows (in thousands): Total Fiscal year 2023 $ 2,301 Fiscal year 2024 2,335 Fiscal year 2025 2,037 Fiscal year 2026 557 Fiscal year 2027 and thereafter — Total future minimum payments $ 7,230 86 Table of Contents 7. Inventories Inventories at September 30, 2023 and September 24, 2022 consist of the following (in thousands): Year Ended September 30, 2023 September 24, 2022 Raw materials and components $ 124,446 $ 88,999 Finished goods 11,675 2,901 Total inventories $ 136,121 $ 91,900 Inventory reserves for the years ended September 30, 2023 and September 24, 2022 were $ 10.3 million and $ 1.0 million, respectively. During the second quarter and fourth quarter of fiscal year 2023, inventory impairment charges of $ 5.2 million and $ 14.5 million were recorded, respectively, resulting from management’s commitment to actions to restructure certain parts of the Company within the U.S. and Canada, as further described in Note 9, Severance Charges . These impairment charges were recorded within Systems Cost of Revenue in the Consolidated Statements of Operations. 8. Property and Equipment Property and equipment at September 30, 2023 and September 24, 2022 consists of the following (in thousands): Year Ended September 30, 2023 September 24, 2022 Computer equipment and software, furniture and fixtures, and test equipment $ 40,437 $ 45,818 Internal use software 5,638 — Leasehold improvements 7,194 2,904 Total property and equipment 53,269 48,722 Less accumulated depreciation ( 18,762 ) ( 23,844 ) Property and equipment, net $ 34,507 $ 24,878 Depreciation expense was $ 9.0 million for the year ended September 30, 2023, $ 5.5 million for the year ended September 24, 2022, and $ 4.0 million for the year ended September 25, 2021. 9. Severance Charges During the second quarter of fiscal year 2023, management committed to actions to restructure certain parts of the Company within the U.S. and Canada to better position the Company to become more agile in delivering its solutions through various outsourcing partnerships. As a result, certain headcount reductions were necessary, and the Company recognized $ 2.3 million of expense associated with these actions, which is included within selling, general, and administrative expenses on the Consolidated Statements of Operations for the year ended September 30, 2023. The charges related to these actions have been completed within the fiscal year. The costs incurred related to employee severance are recorded as a liability when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated. The liability related to these charges is included in accrued expenses and other current liabilities in the Consolidated Balance Sheets. The following table presents the activity related to the Company’s severance liability as of September 30, 2023 (in thousands). The Company did not have material severance activity for the period ended September 24, 2022. September 30, 2023 Severance liability at September 24, 2022 $ 1,051 Severance charges 6,388 Cash paid and other ( 6,237 ) Severance liability at September 30, 2023 $ 1,202 87 Table of Contents 10. Intangible Assets Intangible assets acquired in connection with a 2014 business acquisition are being amortized on a straight-line basis over their estimated useful lives. The estimated weighted average useful life of the identified intangible assets are as follows: Estimated Weighted Average Useful Life Customer relationships 10 years Trademarks 3 years Amortization expense was $ 0.4 million for the year ended September 30, 2023, $ 0.5 million for the year ended September 24, 2022, and $ 0.5 million for the year ended September 25, 2021. The following table presents the Company’s intangible assets as of the dates indicated (in thousands): Year Ended September 30, 2023 September 24, 2022 Intangibles, gross Accumulated amortization Intangibles, net Intangibles, gross Accumulated amortization Intangibles, net Customer relationships $ 4,338 $ ( 4,121 ) $ 217 $ 4,335 $ ( 3,685 ) $ 650 Trademarks 729 ( 729 ) — 729 ( 729 ) — Intangible assets $ 5,067 $ ( 4,850 ) $ 217 $ 5,064 $ ( 4,414 ) $ 650 The following table presents the estimated future annual pre-tax amortization expense of definite-lived intangible assets as of the date indicated (in thousands): Total Fiscal year 2024 $ 217 Fiscal year 2025 and thereafter — Total $ 217 11. Income Taxes The components of income/(loss) before provision for income taxes are as follows (in thousands): Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Income/(Loss) before income tax expense: U.S. $ ( 216,891 ) $ ( 144,119 ) $ ( 126,549 ) Foreign 4,377 5,030 4,235 Total $ ( 212,514 ) $ ( 139,089 ) $ ( 122,314 ) 88 Table of Contents The provision (benefit) for income taxes consists of the following (in thousands): Year Ended September 30, 2023 Current: Federal $ — State 307 International ( 13 ) Total current taxes $ 294 Deferred: Federal $ — State — International ( 4,914 ) Total deferred taxes $ ( 4,914 ) Provision (benefit) for Income Taxes $ ( 4,620 ) There was no provision for income taxes for the years ended September 24, 2022 and September 25, 2021. The following is a reconciliation of the expected U.S. Federal income tax rate to the effective tax rate for the years ended September 30, 2023, September 24, 2022, and September 25, 2021 (dollars in thousands): September 30, 2023 September 24, 2022 September 25, 2021 Loss before income tax $ ( 212,514 ) $ ( 139,089 ) $ ( 122,314 ) Tax on pre-tax loss ( 44,628 ) 21 % ( 29,209 ) 21 % ( 25,686 ) 21 % Loss not subject to tax 39,497 ( 19 ) % 27,767 ( 20 ) % 25,686 ( 21 ) % State income tax rate ( 3,363 ) 2 % ( 744 ) 1 % — — Permanent differences 992 — % 46 — % 889 ( 1 ) % Adjustment for foreign income tax rate differential 241 — % 1,346 ( 1 ) % 233 — % Credits ( 1,218 ) 1 % ( 374 ) — % — — Valuation allowance 3,187 ( 1 ) % 1,168 ( 1 ) % ( 993 ) 1 % Impact on foreign activity 575 — % — — — — Return to provision 88 — % — — — — Other 9 — % — — ( 129 ) — % Total income tax $ ( 4,620 ) 2 % $ — — % $ — — % 89 Table of Contents The following is a summary of the significant components of the Company’s net deferred tax assets as of September 30, 2023 and September 24, 2022 (in thousands): Year Ended September 30, 2023 September 24, 2022 Deferred tax assets: Net operating losses $ 21,703 $ 11,361 Investment in Symbotic Holdings, LLC 439,547 146,894 Tax Receivable Agreement 24,574 5,209 Other 409 68 Credits 7,184 5,487 Total deferred tax assets before valuation allowance 493,417 169,019 Valuation allowance ( 486,920 ) ( 168,308 ) Total deferred tax assets after valuation allowance 6,497 711 Deferred tax liabilities: Foregone FTC ( 575 ) — ROU asset ( 286 ) — Foreign R&D credit recapture ( 718 ) ( 711 ) Total deferred tax liabilities ( 1,579 ) ( 711 ) Net deferred tax asset $ 4,918 $ — As a result of the Business Combination, the Company was appointed as the sole managing member of Symbotic Holdings. Prior to the close of the Business Combination, the Company's financial reporting predecessor, Legacy Warehouse, was treated as a pass-through entity for tax purposes and no provision, except for certain foreign subsidiaries, was made in the consolidated financial statements for income taxes. Any income tax items for the periods prior to the close of the Business Combination are related to the applicable subsidiary companies that are subject to foreign income tax. Symbotic Holdings is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, Symbotic Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Symbotic Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis, subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of Symbotic Holdings. The Company's foreign subsidiaries are subject to income tax in its local jurisdictions. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the estimated future tax consequences attributable to temporary differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be settled or recovered. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future income, and tax planning strategies in making this assessment. Valuation Allowance The Company has established a valuation allowance related to domestic and foreign deferred tax assets on deductible temporary differences, tax losses, and tax credit carryforwards. Due to a change in circumstances during the year ended September 30, 2023, the Company now believes it will have sufficient future operating income to realize a portion of the 90 Table of Contents beginning of the year’s foreign deferred tax assets. Therefore the Company has released $ 6.1 million of its valuation allowance. The remaining valuation allowance at September 30, 2023 of $ 486.9 million consists of $ 480.3 million in the United States and $ 6.6 million in foreign jurisdictions. The change in the valuation allowance in fiscal year 2023 of $ 318.6 million primarily relates to the Company’s investment in Symbotic Holdings LLC, tax receivable agreement, and tax carryforward attributes. Net Operating Losses As of September 30, 2023, the Company had a U.S. federal net operating loss carryforwards of $ 55.3 million and gross state net operating loss carryforwards of $ 50.0 million. U.S. federal and certain state net operating losses generated in 2018 and beyond have no expiration. The remaining state net operating losses expire at various dates through 2043. As of September 30, 2023, the Company had Canadian net operating loss (“NOL”) carryforwards of approximately $ 27.7 million federal and $ 26.1 million provincial. The Canadian NOL carryforwards expire in various years through 2039, and are subject to review and possible adjustment by the applicable taxing authorities. Utilization of the domestic federal or Canadian NOL carryforwards may be subject to annual limitations due to ownership changes that have occurred previously or that could occur in the future. The Company has not completed any studies to determine if any of these events have occurred that would result in such limitations. Accordingly, further limitations could arise upon the completion of such studies. As of September 30, 2023, United States income taxes have not been provided on accumulated but undistributed earnings of foreign subsidiaries as the Company intends to permanently reinvest. Uncertain Tax Positions The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax positions. The Company evaluates uncertain tax positions on an annual basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. For the years ended September 30, 2023 and September 24, 2022, the Company had no unrecognized tax benefits. Tax Receivable Agreement As of September 30, 2023, future payments under the TRA with respect to the purchase of Symbotic Holdings Units which occurred as part of the Business Combination and through September 30, 2023 are expected to be $ 350.3 million. Payments made under the TRA represent payments that otherwise would have been made to taxing authorities in the absence of attributes obtained by the Company as a result of exchanges by its pre-IPO members. Such amounts will be paid only when a cash tax savings is realized as a result of attributes subject to the TRA. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which the Company is able to utilize certain tax benefits to reduce its cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in income before taxes on the consolidated statement of operations in the period in which the change occurs. As of September 30, 2023, no TRA liability was recorded based on current projections of future taxable income taking into consideration the Company’s full valuation allowance against its net U.S. deferred tax asset. 12. Employee Benefit Plans Symbotic sponsors a defined-contribution benefit plan under the provisions of Section 401(k) of the U.S. Internal Revenue Code. This plan covers substantially all of the Company’s employees meeting eligibility criteria and contributions to the plan are determined by the plan provisions or at the discretion of the Board of Managers. Symbotic contributions to the plan were $ 3.9 million, $ 2.4 million, and $ 1.9 million for the years ended September 30, 2023, September 24, 2022, and September 25, 2021, respectively. Symbotic Canada sponsors a Registered Retirement Savings Plan that qualifies as a defined-contribution benefit plan, which covers a portion of Symbotic Canada’s management. Symbotic Canada contributions to the plan were $ 0.3 million, $ 0.3 million, and $ 0.2 million for the years ended September 30, 2023, September 24, 2022, and September 25, 2021, respectively. 13. Fair Value Measures The fair value measurement accounting standards establish a framework for measuring fair value and expand disclosures about fair value measurements. The standard does not require any new fair value measurements; rather, it applies to other accounting pronouncements that require or permit fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction 91 Table of Contents between market participants on the measurement date. This pronouncement also establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market Level 2 – inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability The following table presents the Company’s financial assets measured and recorded at fair value on a recurring basis using the above input categories as of September 30, 2023 and September 24, 2022 (in thousands): Year Ended September 30, 2023 September 24, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds $ 219,945 $ — $ — $ 219,945 $ 333,388 $ — $ — $ 333,388 U.S. Treasury Securities — 286,736 — 286,736 — — — — Total assets $ 219,945 $ 286,736 $ — $ 506,681 $ 333,388 $ — $ — $ 333,388 The Company had no liabilities measured and recorded at fair value on a recurring basis as of September 30, 2023 and September 24, 2022. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets. At September 30, 2023, Level 2 securities were priced by pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities. At September 30, 2023, the amortized cost of the Company’s U.S. Treasury securities is $ 281.3 million, with unrealized gains of $ 5.5 million and no unrealized losses, resulting in a fair value of $ 286.7 million. As applicable, when making the determination as to whether unrealized losses are other-than-temporary, the Company considers the length of time and extent to which each investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating, and the time to maturity. For the year ended September 30, 2023, there is no cash and cash equivalents related to U.S. Treasury securities with an original maturity of three months or less which are included in the amortized cost balance of $ 281.3 million. 14. Related Party Transactions Insurance Coverage Prior to the first quarter of fiscal year 2023, the Company was covered under the C&S Wholesale Grocers, Inc. (“C&S”) workers’ compensation, general liability, auto liability risk, and technology errors and omissions insurance which C&S managed through the utilization of high deductible insurance policies. C&S is an affiliate of the Company as the same individual, certain of his family members and certain affiliated entities and trusts of the individual and his family members, in the aggregate, control both entities. The Company paid $ 2.3 million, and $ 1.8 million to C&S related to this insurance coverage during the years ended September 24, 2022, and September 25, 2021, respectively. The amounts were expensed to operations as incurred. Aircraft Time Sharing Agreement In December 2021 and May 2022, the Company entered into two separate agreements with C&S whereby the Company's officials, employees, and guests are permitted to use the two C&S aircrafts on an as-needed and as-available basis, with no 92 Table of Contents minimum usage being required (the “Agreements”). As there is no defined period of time stated within the Agreements, the Company does not consider these to meet the definition of a lease, and as such, records payments in the period in which the obligation for the payment is incurred. The Company incurred expense of $ 0.9 million and $ 0.7 million related to usage of the aircrafts for the years ended September 30, 2023 and September 24, 2022, respectively. Usage of Facility and Employee Services In the fourth quarter of fiscal year 2022, the Company entered into a license arrangement with C&S whereby C&S is providing receiving and logistics services for the Company within C&S distribution facilities. The arrangement also provides for C&S employees assisting with certain of the Company’s operations. The Company incurred $ 2.9 million and $ 0.2 million of expense related to this arrangement for the years ended September 30, 2023 and September 24, 2022, respectively. Customer Contracts The Company has customer contracts with C&S relating to systems implementation, software maintenance services and the operations of a warehouse automation system. Revenue of $ 15.8 million, $ 3.5 million, and $ 2.9 million was recognized for the years ended September 30, 2023, September 24, 2022, and September 25, 2021, respectively, relating to these customer contracts. There was $ 0.9 million accounts receivable due from C&S at September 30, 2023 and no accounts receivable due from C&S at September 24, 2022. There was $ 9.3 million and $ 0.5 million of deferred revenue relating to contracts with C&S at September 30, 2023 and September 24, 2022, respectively. 15. Commitments and Contingencies Purchase Obligations The Company has contractual obligations to purchase goods or services, which specify significant terms, including fixed or minimum quantities to be purchased and fixed minimum, or variable price provisions. The majority of the purchase commitments covered by these arrangements are for periods of less than one year and aggregate to approximately $ 1.2 billion as of September 30, 2023. Lease Commitments The Company leases certain of its facilities under operating leases expiring in various years through 2030. Refer to Note 6, Leases for a schedule of future lease payments under non-cancellable leases as of September 30, 2023. Warranty The Company provides a limited warranty on its warehouse automation system and has established a reserve for warranty obligations based on estimated warranty costs. The reserve is included as part of accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets. Activity related to the warranty accrual was as follows (in thousands): Year Ended September 30, 2023 September 24, 2022 September 25, 2021 Balance at beginning of period $ 9,004 $ 3,735 $ — Provision 16,833 7,329 4,652 Warranty usage ( 6,889 ) ( 2,060 ) ( 917 ) Balance at end of period $ 18,948 $ 9,004 $ 3,735 Contingencies Liabilities for any loss contingencies arising from claims, assessments, litigation, fines, penalties, and other matters are recorded when it is probable that the liability has been incurred and the amount of the liability can be reasonably estimated. As of September 30, 2023, the Company had made appropriate provisions related to such matters and does not believe that such matters will have a material adverse effect on the Company’s consolidated operations, financial position, or liquidity. Indemnifications In the ordinary course of business, the Company enters into various contracts under which it may agree to indemnify other parties for losses incurred from certain events as defined in the relevant contract, such as litigation, regulatory penalties, or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. The 93 Table of Contents Company has never incurred costs to defend lawsuits or settle claims related to these indemnification obligations. As a result, the Company believes the estimated fair value of these obligations is not material. Accordingly, the Company has no liabilities recorded for these obligations as of September 30, 2023 and September 24, 2022. 16. Variable Interest Entities VIEs are entities with any of the following characteristics: (i) the entity does not have enough equity to finance its activities without additional financial support; (ii) the equity holders, as a group, lack the characteristics of a controlling financial interest; or (iii) the entity is structured with non-substantive voting rights. Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any. The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity. On July 23, 2023, the Company, New Symbotic Holdings, and Symbotic US (collectively, the “Symbotic Group”), entered into a Framework Agreement (the “Framework Agreement”) with Sunlight Investment Corp., a Delaware corporation (“Sunlight”), SVF II Strategic Investments AIV LLC, a Delaware limited liability company (“SVF” and, together with Sunlight, “SoftBank”), and GreenBox Systems LLC, a Delaware limited liability company (“GreenBox”), related to the formation of GreenBox as a venture between the Symbotic Group and SoftBank, the entry into a Limited Liability Company Agreement of GreenBox and Master Services, License and Equipment Agreement (the “Commercial Agreement”) and issuance of a warrant to purchase Class A Common Stock of Symbotic (the “GreenBox Warrant”). GreenBox was established on July 21, 2023, to build and automate supply chain networks globally by operating and financing the Company’s advanced A.I. and automation technology for the warehouse. Symbotic Holdings and Sunlight own 35 % and 65 % of GreenBox, respectively. On July 23, 2023, GreenBox entered into a Commercial Agreement with Symbotic US with respect to the purchase of Symbotic’s automated case handling systems, as noted in Note 5, Revenue . The Company evaluated for VIEs upon the formation of GreenBox in accordance with ASC 810, Consolidation. The Company holds a variable interest in GreenBox through its equity interest in GreenBox. GreenBox is a VIE resulting from GreenBox’s lack of sufficient equity to finance its operations without additional subordinated financial support from both the Company and SoftBank. The consolidation of GreenBox is not required as the Company is not the primary beneficiary of this VIE as it does not have the power to direct the activities that most significantly impact GreenBox’s economic performance. Such power is conveyed through GreenBox’s board of directors and the Company does not have control over GreenBox’s board of directors. The Company calculated its maximum exposure to loss while considering its equity investment in the VIE, any amounts owed to the Company for services which may have been provided, net of any unearned revenue commitments from the VIE under the Commercial Agreement, and future funding commitments. As of September 30, 2023, there is no carrying value of the VIE as no significant activity had occurred in the period related to the VIE. As of September 30, 2023 the Company does not have a maximum exposure to loss as the Company’s future funding commitment is less than the revenue commitment from the VIE under the Commercial Agreement . 17. Equity Prior to the Business Combination, the Company had authorized five classes of membership interests, consisting of a class of common units of the Company known as the Class A Common Units (the “Class A Units”), a class of preferred units of the Company known as the Class B Preferred Units (the “Class B Units”), a class of preferred units of the Company known as the Class B-1 Preferred Units (the “Class B-1 Units”), a class of preferred units of the Company known as the Class B-2 Preferred Units (the “Class B-2 Units”, and together with the Class B Units and the Class B-1 Units, the “Preferred Units”) and an additional class of common units of the Company to be granted to employees, officers, and directors pursuant to an incentive plan, known as the Class C Common Units (the “Class C Units” and, together with the Class A Units, the “Common Units,” and the Common Units together with the Preferred Units, the “Units”). Following the Business Combination, the Company has three classes of common stock, Class A Common Stock, Class V-1 Common Stock, and Class V-3 Common Stock (and together, the “Common Stock”). As the Business Combination was accounted for as a reverse recapitalization, all periods prior to the Business Combination were retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement for the equivalent number of shares outstanding immediately after the Merger to effect the reverse recapitalization. The Class A Units were converted into Common Stock using an exchange ratio of 61.28 per share, the Class B Units were converted into Common Stock using an exchange ratio of 47,508,300.00 per share, the Class B-1 Units were converted into Common Stock using an exchange ratio of 24,031,400.00 per share, and the Class C Units were converted into Common Stock using an exchange ratio 94 Table of Contents of 58.15 per share. This is presented within the consolidated statements of changes in redeemable preferred and common units and equity (deficit). Class A Common Stock The Company is authorized to issue 3,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 82,112,881 shares were issued and outstanding on September 30, 2023. Voting Rights Each holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters submitted to a vote of the stockholders. Holders of Class A Common Stock will vote together with other holders of common stock as a single class on all matters (or, if any holders of any series of preferred stock are entitled to vote together with the holders of common stock, as a single class with the holders of such series of preferred stock). Notwithstanding the foregoing, the holders of shares of any series of common stock will be entitled to vote as a separate class upon any amendment to the Company’s certificate of incorporation (“Charter”) (including by merger, consolidation, reorganization or similar event) that would adversely alter or change the powers, preferences or special rights of such series of common stock. Except as expressly required by law, holders of common stock, as such, will not be entitled to vote on any amendment to the Charter (including any certificate of designation) that relates solely to the rights, powers, preferences (or the qualifications, limitations or restrictions thereof) or other terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Charter (including any certificate of designation) or pursuant to the Delaware General Corporation Law (“DGCL”). Dividend Rights Subject to the rights and preferences of any holders of any outstanding series of preferred stock, the holders of Class A Common Stock will be entitled to the payment of dividends and other distributions of cash, stock or property on the Class A Common Stock when, as and if declared by the board of directors in accordance with law. Liquidation Rights Subject to the rights and preferences of any holders of any shares of any outstanding series of preferred stock, in the event of any liquidation, dissolution or winding up, whether voluntary or involuntary, the Company’s funds and assets that may be legally distributed to its stockholders will be distributed among the holders of the then-outstanding Class A Common Stock pro rata in accordance with the number of shares of Class A Common Stock held by each such holder. Other Rights The holders of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A Common Stock. The rights, preferences, and privileges of holders of the Class A Common Stock will be subject to those of the holders of any shares of the preferred stock the Company may issue in the future. Class V-1 Common Stock and Class V-3 Common Stock The Company is authorized to issue 1,000,000,000 shares of Class V-1 Common Stock and 450,000,000 shares of Class V-3 Common Stock, both which have a par value of $ 0.0001 and all of which were issued to the Legacy Warehouse unitholders in connection with the Closing of the Business Combination, as described in Note 3, Business Combination . As of September 30, 2023 there were 66,931,097 shares of Class V-1 and 407,528,941 shares of Class V-3 Common Stock outstanding. For the year ended September 30, 2023, the Legacy Warehouse unitholders exchanged 11,938,597 and 9,404,084 shares of Class V-1 and Class V-3 Common Stock, respectively, together with a corresponding number of New Symbotic Holdings Common Units, into an equal number of Class A Common Stock. The Company did not receive any proceeds as a result of this exchange. Voting Rights Each holder of Class V-1 Common Stock is entitled to one vote for each share of Class V-1 Common Stock held of record by such holder on all matters submitted to a vote of the stockholders, and each holder of Class V-3 Common Stock is entitled to three votes for each share of Class V-3 Common Stock held of record by such holder on all matters submitted to a vote of the stockholders. Holders of Class V-1 Common Stock and Class V-3 Common Stock will vote together with other holders of common stock as a single class on all matters (or, if any holders of any series of preferred stock are entitled to vote together with the holders of common stock, as a single class with the holders of such series of preferred stock). Notwithstanding the foregoing, the holders of shares of any series of common stock will be entitled to vote as a separate class 95 Table of Contents upon any amendment to the Charter (including by merger, consolidation, reorganization or similar event) that would adversely alter or change the powers, preferences or special rights of such series of common stock. Except as expressly required by law, holders of common stock, as such, will not be entitled to vote on any amendment to the Charter (including any certificate of designation) that relates solely to the rights, powers, preferences (or the qualifications, limitations or restrictions thereof) or other terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Charter (including any certificate of designation) or pursuant to the DGCL. Dividend Rights Except as provided in the Charter with respect to certain stock adjustments, dividends of cash or property may not be declared or paid on shares of Class V-1 Common Stock or Class V-3 Common Stock. Liquidation Rights The holders of shares of Class V-1 Common Stock and Class V-3 Common Stock will not be entitled to receive any of the Company’s assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. Other Rights The holders of Class V-1 Common Stock and Class V-3 Common Stock have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class V-1 Common Stock or Class V-3 Common Stock. The rights, preferences and privileges of holders of the Class V-1 Common Stock and Class V-3 Common Stock will be subject to those of the holders of any shares of the preferred stock the Company may issue in the future. Subject to the terms of the New Symbotic Holdings LLC Agreement, holders of New Symbotic Holdings Common Units may cause the Company to redeem all or any portion of such holder’s New Symbotic Holdings Common Units, and in connection with such redemption, the Company may be required to deliver Class A common units to such holder. Conversion of Class V-3 Common Stock Class V-3 Common Stock may convert into Class V-1 Common Stock in certain situations, including automatically seven years following the Business Combination. Transfer of Class V-1 Common Stock and Class V-3 Common Stock No holder of Class V-1 Common Stock or Class V-3 Common Stock may transfer such shares to any person unless such holder also simultaneously transfers an equal number of such holder’s New Symbotic Holdings Common Units to the same person in accordance with the terms of the New Symbotic Holdings LLC Agreement. Upon a transfer of New Symbotic Holdings Common Units in accordance with the New Symbotic Holdings LLC Agreement, an equal number of shares of Class V-1 Common Stock and/or Class V-3 Common Stock that correspond to such New Symbotic Holdings Common Units will automatically and simultaneously be transferred to the same transferee of such New Symbotic Holdings Common Units. Any attempted or purported transfer of shares of Class V-1 Common Stock and Class V-3 Common Stock in violation of the foregoing restrictions will be null and void. Cancellation of Class V-1 Common Stock and Class V-3 Common Stock In the event that any outstanding share of Class V-1 Common Stock or Class V-3 Common Stock ceases to be held directly or indirectly by a holder of a New Symbotic Holdings Common Units, such share will automatically be transferred to Symbotic and cancelled for no consideration. Preferred Stock The Company is authorized to issue 50,000,000 shares of undesignated preferred stock, par value $ 0.0001 per share, of which no shares were issued and outstanding on September 30, 2023. Legacy Warehouse Membership Interests For the year ended September 25, 2021, the Company was authorized to issue up to 6,426,208 Units in the aggregate, of which 5,997,632 are designated as Class A Units, one Unit is designated as a Class B Unit, two Units are designated as Class B-1 Units, two Units are designated as Class B-2 Units and 428,571 Units are designated as Class C Units. As of September 25, 2021, there were 5,997,632 Class A Units, one Class B Unit, one Class B-1 Unit and 428,571 Class C Units outstanding. As discussed above, these outstanding units were converted into Common Stock as part of the Business Combination during fiscal year 2022. During the periods ended September 24, 2022 and September 25, 2021, the Company received no member contributions from the holder of the Class B-1 Unit. The Company recorded a cumulative preferred return with respect to the holder of the 96 Table of Contents Class B-1 Unit of $ 8.1 million and $ 11.1 million for the years ended September 24, 2022 and September 25, 2021, respectively. The Company recorded a cumulative preferred return with respect to the holder of the Class B Unit of $ 16.1 million and $ 21.9 million for the years ended September 24, 2022 and September 25, 2021, respectively. The following conditions applied to the classes of membership interests authorized prior to the Business Combination: Voting Rights Each holder of Class A Units and Class C Units shall have the right to one vote per the Class A Unit or Class C Unit, respectively. Except as required by law, the Preferred Units do not have any voting rights. Preferred Return The holder of the Preferred Units shall be entitled to receive, in preference to the holders of the Class A Units and the Class C Units, a cumulative preferred return at a rate per annum of 5 %, compounded annually, on the unreturned preferred capital of the holder’s Preferred Units (the “Preferred Return”). The Class A Units and Class C Units have no stated returns or dividends. Liquidation Rights In the event of liquidation, dissolution, or winding up of the Company, the five classes of membership interests rank in the following order of priority: the Class B-2 Units are the most senior, followed by Class B-1 Unit, then the Class B Unit, and then both the Class A Units and Class C Units treated as a single class. The holders of the Preferred Units are entitled to a liquidation preference equal to the sum of the Unreturned Preferred Capital (defined as the initial investment and subsequent contributions, less distributions, if any) and the applicable unpaid Preferred Return (collectively, the “Liquidation Preference”) in the order described in the preceding sentence, prior to any distribution to holders of the Class A Units and Class C Units. Upon the payment in full of the Liquidation Preference, any remaining assets available for distribution shall be distributed ratably to the holders of the Class A Units and Class C Units, however, for the Class C Units only to the extent that the value exceeds the applicable Hurdle Value (see Note 19, Stock-Based Compensation and Warrant Units ). Any remaining value that does not exceed the Hurdle Value for any particular Class C Unit shall be distributed to the holders of Class A Units (and any other Class C Units entitled to share in the distribution) based on their respective pro rata holdings of all such Class A (and Class C) Units. The Company classified its redeemable Preferred Units (Class B, B-1, and B-2 Units) as mezzanine equity, or outside of members’ deficit, because the units contain liquidation features that are not solely within the Company’s control. As of September 25, 2021, the aggregate Liquidation Preference for the Class B and B-1 Units was $ 691.3 million. Redemption Rights Upon written notice by the holders of a majority of a class of Preferred Units, the Company shall redeem all of the outstanding Preferred Units of such class. The redemption price payable to each holder of the class of Preferred Units shall equal the Liquidation Preference of the Preferred Units being redeemed. The Class C Units are subject to a put feature that allow holders to redeem vested Class C Units, subject to certain terms and conditions (see Note 19, Stock-Based Compensation and Warrant Units ). The Class A Units do not have any redemption rights. Accordingly, the Preferred Units and the Class C Units are classified outside of permanent members’ deficit because they are redeemable by the holders. 18. Net Loss per Share Basic earnings per share of Class A Common Stock is computed by dividing net loss attributable to common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net loss attributable to common shareholders adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive elements. Since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share. Prior to the Business Combination, the membership structure of Legacy Warehouse included units which shared in the profits and losses of Legacy Warehouse. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on June 7, 2022. The basic and diluted earnings per share for the period ended September 24, 2022 represent only the period of June 8, 2022 to September 24, 2022. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A Common Stock (in thousands, except per share information): 97 Table of Contents Year Ended September 30, 2023 September 24, 2022 Numerator - basic and diluted Net loss $ ( 207,894 ) $ ( 139,089 ) Less: Net loss attributable to Warehouse Technologies LLC unitholders prior to the Business Combination — ( 72,134 ) Less: Net loss attributable to the noncontrolling interest post Business Combination ( 184,028 ) ( 60,092 ) Net loss attributable to common shareholders $ ( 23,866 ) $ ( 6,863 ) Denominator - basic and diluted Weighted-average shares of Class A Common Stock outstanding 64,338,580 54,086,381 Loss per share of Class A Common Stock - basic and diluted $ ( 0.37 ) $ ( 0.13 ) The Company’s Class V-1 Common Stock and Class V-3 Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class V-1 Common Stock and Class V-3 Common Stock under the two-class method has not been presented. The Company uses the treasury stock method and the average market price per share during the period for calculating any potential dilutive effect of the RSUs, ESPP and Warrant Units. The average stock price for the year ended September 30, 2023 was $ 25.30 . For the year ended September 30, 2023, there were 7,635,238 and 9,598,620 potentially dilutive common stock equivalents related to the RSUs and Warrant Units, respectively. The ESPP shares were not included as they created an anti-dilutive effect. 19. Stock-Based Compensation and Warrant Units In June 2022, the Company’s stockholders approved the Symbotic Inc. 2022 Omnibus Incentive Compensation Plan (“2022 Plan”). The 2022 Plan allows for the issuance of stock options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalent rights, and other equity-based or equity-like awards that the Compensation Committee of the Board of Directors determines to be consistent with the purposes of the 2022 Plan and the interests of the Company for up to 59,800,928 shares of common stock to employees, directors, and consultants of the Company. Additionally, up to 8,500,000 shares may be issued in connection with the exchange of awards under the 2012 Value Appreciation Plan (described below) or the Amended and Restated 2018 Long Term Incentive Plan (“Legacy Plans”). The Company will no longer issue new awards under the Legacy Plans as all future grants will be issued under the 2022 Plan, or another equity plan that is approved by the Compensation Committee of the Board of Directors. Awards issued under the 2022 Plan have a maximum term of 10 years. The following two tables show stock-based compensation expense by award type and where the stock-based compensation expense is recorded in the Company’s consolidated statements of operations (in thousands): Year Ended September 30, 2023 September 24, 2022 RSUs (service-based and performance-based) $ 152,791 $ 26,858 Employee stock purchase plan 1,436 — Total stock-based compensation expense $ 154,227 $ 26,858 98 Table of Contents Effect of stock-based compensation expense on income by line item (in thousands): Year Ended September 30, 2023 September 24, 2022 Cost of revenue, Systems $ 36 $ — Cost of revenue, Software maintenance and support 1,767 — Cost of revenue, Operation services 4,344 — Research and development 68,364 9,671 Selling, general, and administrative 79,716 17,187 Total stock-based compensation expense $ 154,227 $ 26,858 For the year ended September 30, 2023, the Company capitalized $ 2.0 million of stock-based compensation expense to property and equipment related to internal use software projects and $ 0.5 million of stock-based compensation expense to prepaid expenses and other current assets and other-long term assets related to its ERP implementation project. There were no stock-based compensation costs capitalized for the years ended September 24, 2022 and September 25, 2021. RSUs represent the right to receive one share of the Company’s common stock upon vesting. RSUs are granted at the discretion of the Board of Directors, a committee thereof or, subject to defined limitations, the Chief Executive Officer of the Company, acting as a committee of one director, to whom such authority has been delegated. The Company has issued RSUs that vest based on the passage of time assuming continued service with the Company, and RSUs that vest only upon the achievement of defined performance metrics tied primarily to revenue and earnings targets. For RSUs with service-based vesting conditions, the fair value is calculated based on the Company’s closing stock price on the grant date, and the stock-based compensation expense is being recognized over the vesting period. Most RSUs with service-based vesting provisions vest in installments over a three-year period following the grant date. For RSUs with performance-based vesting conditions, management measures compensation expense based upon a review of the Company’s expected achievement against specified financial performance targets. Such compensation cost is being recorded to the extent management has deemed that such awards are probable of vesting based upon the expected achievement against the specified targets. On a periodic basis, management reviews the Company’s expected performance and adjusts the compensation cost, if needed, at such time. The following table summarizes the RSU activity for the periods presented: Shares Weighted Average Grant Date Fair Value Outstanding at September 25, 2021 — $ — Granted 14,363,196 15.81 Vested ( 1,831,505 ) 15.81 Forfeited ( 166,104 ) 15.81 Outstanding at September 24, 2022 12,365,587 $ 15.81 Granted 7,625,784 15.72 Vested ( 4,187,313 ) 15.78 Forfeited ( 2,920,043 ) 15.62 Outstanding at September 30, 2023 12,884,015 $ 15.81 The total fair value of RSUs that vested during the years ended September 30, 2023 and September 24, 2022 was $ 90.7 million and $ 29.0 million, respectively. For the years ended September 30, 2023 and September 24, 2022 the weighted-average fair value of RSU awards granted was $ 15.72 per share and $ 15.81 per share, respectively. As of September 30, 2023, 12.9 million RSUs were outstanding and unvested, with an aggregate value of $ 430.7 million and a weighted average remaining vesting period of approximately 0.94 years. These RSUs are expected to vest on various dates through 2027. Employee Stock Purchase Plan On June 3, 2022, the Company’s stockholders approved, and on June 7, 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “ESPP”). The ESPP authorizes the issuance of up to a total of 1,266,604 shares 99 Table of Contents of common stock to participating employees, and allows eligible employees to purchase shares of Class A Common Stock at a 15 % discount from the fair market value of the stock as determined on specific dates, which are typically at six-month intervals. The offering periods for the ESPP generally start on the first trading day on or after January 1st and July 1st of each year. However, the first offering period for the ESPP commenced on the first trading day after October 1, 2022 and ended on December 31, 2022, the second offering period commenced on the first trading day after January 1, 2023 and ended on June 30, 2023, and the third offering period commenced on the first trading day after July 1, 2023 and ends on February 28, 2024. The fair value of employee options is estimated using the Black-Scholes option-pricing model with the following assumptions: Year Ended September 30, 2023 Risk-free interest rate (%) 0.03 - 0.05 Expected term (years) 0.25 - 0.66 Volatility (%) 63.67 - 76.21 Expected dividends — The interest rate is based on the U.S. Treasury bond rate at the date of grant with a maturity approximately equal to the expected term. The expected term was based on terms of the offering period. The expected volatility for the Company’s common stock is based on an average of the historical volatility of a peer group of similar public companies. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The fair value of the Company’s common stock is the closing price of the stock on the date the offering period starts. For the year ended September 30, 2023, 225,788 shares of common stock were issued to employees who participated in the plan with a weighted average purchase price of $ 10.20 per share for total cash proceeds of $ 2.6 million, net of taxes. Class C Units Prior to the Business Combination, the Company periodically granted Class C Units to employees, officers, and directors which vest over a period of up to five years , as determined by the Board of Managers. Each issuance of Class C Units entitles its holder to share in the appreciation in the fair market value (“FMV”) of the Company from the date of issuance, subject to any preferences or priorities payable to the Preferred Units. The Board shall establish a “Hurdle Value”, which shall not be less than the FMV on the date of such issuance of such Class C Unit and such units shall share only in appreciation of the FMV in excess of the Hurdle Value. Any distributions made with respect to Class C Units that have not yet become vested are held in a separate account for the benefit of the holder of the unvested units until such time as the units vest. The Class C Units are subject to a put feature that allow holders to redeem vested Class C Units. The put feature requires the holder to hold the units for at least six months from the date the Class C Units vest to the earliest date the put feature can be exercised. Accordingly, since the holder is exposed to the economic risks and rewards of unit ownership, the Class C Units are treated as equity classified awards. However, because redemption of the Class C Units is outside of the control of the Company: (i) the Class C Units are classified outside of permanent members’ deficit, and (ii) the carrying value of Class C Units is adjusted to redemption value at each reporting period through a charge to members’ deficit (until such time as the Class C Units are redeemed or forfeited). As further described in Note 17, Equity , the Class C Units were converted into Common Stock upon consummation of the Business Combination. 100 Table of Contents The following is a summary of Class C Units outstanding and vested immediately prior to the consummation of the Business Combination: Class C Units Balance at September 26, 2020 428,571 Granted 51,543 Redeemed — Forfeited ( 51,543 ) Balance at September 25, 2021 428,571 Granted 18,107 Redeemed — Forfeited ( 18,107 ) Balance at June 7, 2022 428,571 Vested at June 7, 2022 375,930 The Company recognized less than $ 0.1 million as compensation expense associated with the Class C Units for the year ended September 24, 2022 and $ 0.1 million as compensation expense for the year ended September 25, 2021. Valuation of Class C Units The fair value of Class C Units was determined by the Company’s Board of Managers based on enterprise valuations performed by management with the assistance of a third-party valuation firm. For fiscal year 2022 leading up to the Business Combination and for the year ended September 25, 2021, the Company’s total equity value was determined using a combination of the income approach and market approach under the Hybrid Method. Under this approach, a probability-weighted expected return method was applied where two types of future event scenarios were considered: an IPO scenario and a non-IPO scenario for all other potential future exits. The relative probabilities between the future exit scenarios were based on an analysis of performance and market conditions at the time, including then-current IPO valuations of similarly situated companies and expectations as to the timing and likely prospects of future event scenarios. The resulting equity value was then allocated to outstanding equity instruments using an option pricing model. The fair value of each Class C Unit grant was estimated on the date of the award using a Black-Scholes option pricing model with the following assumptions: Year Ended June 7, 2022 September 25, 2021 Dividend yield 0 % 0 % Volatility(a) 45.0 % 40.0 % Risk-free interest rate(b) 2.30 % 0.29 % Expected term (years)(c) 2.00 2.00 (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the Class C Units. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the Class C Units. (c) The expected term is based on estimated liquidity event timing as further described above. The fair value per unit for the Class C Units granted was determined to be the following for each of the periods presented: • $ 451.81 for the period December 26, 2021 through June 7, 2022 • $ 415.75 for the period September 26, 2021 through December 25, 2021 • $ 407.19 for the period June 27, 2021 through September 25, 2021 101 Table of Contents • $ 160.03 for the period March 28, 2021 through June 26, 2021 • $ 5.56 for the period September 29, 2019 through March 27, 2021 Value Appreciation Units The Company historically granted VAP Units to employees, officers, and directors that vested over a period of up to five years , as determined by the Board of Managers. No VAP Units were granted during the years ended September 24, 2022 and September 25, 2021. Following the Business Combination and in the fourth quarter of fiscal year 2022, all outstanding VAP Units for 20 employees were converted into the Company’s restricted stock units. The Company issued 2,350,795 RSUs to the legacy VAP Unit holders. The conversion of the VAP Units into RSUs was treated as a modification in accordance with ASC 718, and resulted in a charge of $ 24.4 million to additional paid-in capital on the date of the modification. This included a step-up in grant date fair value charge of $ 0.7 million, which was principally due to the difference between the VAP Units grant date hurdle rates and the Company’s stock price as of the modification date. Prior to the Business Combination, to the extent vested and exercisable, each VAP Unit could be exercised for a cash payment equal to the appreciation in the FMV of 1/100th of a Class C Unit. The following exercisability triggers must be met before any vested award may be exercised, with the achievement of each trigger allowing one third of the vested award to be exercised: (i) the end of the first fiscal year in which the Company meets or exceeds annual revenue (on a cash accounting basis) of $ 100 million, (ii) the end of the first fiscal year in which the Company becomes cash flow positive, and (iii) the end of the first fiscal year in which the Company generates positive earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The following is a summary of VAP Units outstanding which were converted to restricted stock units in the fourth quarter of fiscal year 2022: VAP Units Balance at September 26, 2020 4,389,257 Granted — Exercised — Forfeited ( 349,637 ) Balance at September 25, 2021 4,039,620 Granted — Exercised ( 255,845 ) Forfeited ( 92,664 ) Balance at August 16, 2022 3,691,111 Converted to restricted stock units ( 3,691,111 ) Balance at September 24, 2022 — Because the VAP Units were settleable in cash, they were treated as liability classified awards. Accordingly, the carrying value of the liability was adjusted to fair value at each reporting period through a charge to earnings (until such time as the VAP Units are settled or forfeited). Further, the exercisability triggers noted above represent performance conditions that impact the vesting of the awards. Accordingly, compensation expense is not recognized until such time as the performance conditions are considered probable of achievement. During the year ended September 26, 2020, the performance conditions relating to annual revenue and cash flows were considered probable of achievement. The performance condition relating to EBITDA was not considered probable of achievement for any of the periods presented and up to the date of conversion of the VAP Units to restricted stock units. The Company recognized $ 13.2 million and $ 11.6 million as compensation expense associated with the VAP Units for the years ended September 24, 2022 and September 25, 2021, respectively. Warrant Units GreenBox Warrant On July 23, 2023, in connection with it entry into the Commercial Agreement with GreenBox, the Company issued Sunlight the GreenBox Warrant to acquire up to an aggregate of 11,434,360 shares of the Company’s Class A Common Stock, subject to certain vesting conditions. The GreenBox Warrant had a grant date fair value of $ 19.90 per unit. The GreenBox Warrant may vest in connection with conditions defined by the terms of the Warrant, as GreenBox makes additional expenditures to the Company in connection with the Framework Agreement. There are up to eight tranches based 102 Table of Contents on increments of expenditures where approximately 1,429,295 additional warrant units may vest per tranche, subject to certain conditions defined by the terms of the Warrant. Upon vesting, warrant units may be acquired at an exercise price of $ 41.9719 . The warrant units contain customary anti-dilution, down-round, and change-in-control provisions. The right to purchase units in connection with the GreenBox Warrant expires 36 months following the end of the initial term of the Framework Agreement which is July 23, 2027, or if applicable, the extension term of the Framework Agreement, which is July 23, 2029. As of September 30, 2023, none of the GreenBox Warrant units had vested. Non-cash share-based payment expense associated with the GreenBox Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the GreenBox Warrant was determined as of the grant date in accordance with ASC Topic 718, Compensation – Stock Compensation , using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the vesting conditions stipulated in the warrant agreement in a large number of simulated scenarios. Additionally, the Black-Scholes pricing model was applied to determine the fair value of the GreenBox warrant after vesting. Key assumptions for the Monte Carlo simulation and Black-Scholes models include risk-free interest rate and historical stock price volatility of peer company shares. The Black-Scholes assumptions utilized in determining the grant date fair value of the GreenBox Warrant after vesting are included in the following table: Selected Assumption Strike price $ 41.972 Volatility (a) 48.0 % Risk-free interest rate (b) 4.44 % Expected term (years) (c) 3.00 (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the GreenBox Warrant. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the GreenBox Warrant. (c) The expected term is based on the contractual term of the GreenBox Warrant. Walmart Warrants On April 30, 2021, in connection with its entry into a Subscription Agreement with Walmart, the Company issued Walmart warrants to acquire up to an aggregate of 714,022 shares of the Company’s Class A Units (the “Warrants”), subject to certain vesting conditions. Warrants equivalent to 6.5 % of the Company’s outstanding and issuable Common Units, or 446,741 units, vested upon the signing of the Subscription Agreement, and had a grant date fair value of $ 60.44 per unit. Warrants equivalent to up to 3.5 % of the Company’s outstanding and issuable Common Units, or 267,281 units, may vest in connection with conditions defined by the terms of the Warrant, as Walmart makes additional expenditures to the Company in connection with the Subscription Agreement, There are up to six tranches based on increments of additional expenditures where approximately 44,000 additional Warrants may vest per tranche. The Warrants had a grant date fair value of $ 60.44 per unit. Upon vesting, units may be acquired at an exercise price of $ 389.03 . The warrant units contain customary anti-dilution, down-round, and change-in-control provisions. The right to purchase units in connection with the Warrant expires on April 30, 2031. Non-cash share-based payment expense associated with the warrant units is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the warrant units was determined as of the grant date in accordance with ASC 718 using the Black-Scholes pricing model. The Black-Scholes pricing model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the Black-Scholes pricing model for the Warrants were as follows: Selected Assumption Dividend yield 0 % Volatility(a) 43.0 % Risk-free interest rate(b) 1.65 % Expected term (years)(c) 10.00 103 Table of Contents (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the Warrants. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the Warrants. (c) The expected term is based on the contractual term of the Warrants. In December 2021, Walmart elected to gross exercise the 446,741 vested Warrant Units for $ 173.8 million. As a result of this gross exercise, 446,741 Class A Common Units of Legacy Warehouse were issued to Walmart, which represented a 6.5 % ownership in the Company’s outstanding and issuable Common Units. On May 20, 2022, in connection with its entry into the 2nd A&R MAA, Walmart's remaining 267,281 Warrant Units vested in accordance with the terms referenced above. Upon vesting, Walmart elected to gross exercise the 267,281 vested Warrant Units for $ 104.0 million. As a result of this gross exercise, 267,281 Class A Common Units of Legacy Warehouse were issued to Walmart, which represented, together with the December 2021 gross exercise, a combined total of 10.0 % ownership in the Company's then outstanding and issuable Common Units. Also in connection with its entry into the 2nd A&R MAA with Walmart, the Company issued Walmart a new warrant to acquire up to an aggregate of 258,972 Legacy Warehouse Class A Units (“May 2022 Warrant”), subject to certain vesting conditions. The May 2022 Warrants had a grant date fair value of $ 224.45 . In connection with the Closing, the May 2022 Warrant was converted into a new warrant to acquire up to an aggregate of 15,870,411 common units of Symbotic Holdings (“June 2022 Warrant” and, the common units of Symbotic Holdings issuable thereunder, the “Warrant Units”). As of September 30, 2023, the June 2022 Warrant had vested and is exercisable, as the installation commencement date for certain Systems which the Company is installing in Walmart's 42 regional distribution centers had occurred. Upon vesting, units may be acquired at an exercise price of $ 10.00 . The Warrant Units contain customary anti-dilution, down-round, and change-in-control provisions. The right to purchase units in connection with the June 2022 Warrant expires on June 7, 2027. On December 7, 2023, the Company received a notice of exercise from Walmart whereby Walmart noted their irrevocable election to exercise the outstanding 15,870,411 warrant units. Non-cash share-based payment expense associated with the June 2022 Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the June 2022 Warrant was determined as of the grant date in accordance with ASC Topic 718, Compensation – Stock Compensation , using the Black-Scholes pricing model. The Black-Scholes pricing model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the Black-Scholes pricing model for the June 2022 Warrant were as follows: Selected Assumption Dividend yield 0 % Volatility (a) 40.0 % Risk-free interest rate (b) 2.80 % Expected term (years) (c) 5.00 (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the June 2022 Warrant. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the June 2022 Warrant. (c) The expected term is based on the contractual term of the June 2022 Warrant. The following table summarizes the Company’s stock warrant activity for the year ended September 30, 2023: 104 Table of Contents Warrant Units Outstanding and nonvested at September 25, 2021 267,281 Granted 258,972 Vested ( 267,281 ) Outstanding and nonvested at September 24, 2022 258,972 Granted 11,434,360 Vested ( 258,972 ) Outstanding and nonvested at September 30, 2023 11,434,360 The amount of provision for warrants recorded as a reduction of the transaction price for the Warrants during the twelve months ended September 30, 2023 was $ 101.3 million. As of September 30, 2023, total warrant balance related to the Walmart Warrants is $ 58.1 million and the remaining term of the agreement is 3.6 years. 20. Segment and Geographic Information As more fully described in the Company’s Summary of Significant Accounting Policies, the Company operates in one operating segment. Revenue and property and equipment, net by geographic region, based on physical location of the operations recording the sale or the assets are as follows: Revenue by geographical region (in thousands): Year Ended September 30, 2023 September 24, 2022 September 25, 2021 United States $ 1,173,177 $ 589,944 $ 248,209 Canada 3,714 3,368 3,704 Total revenue $ 1,176,891 $ 593,312 $ 251,913 Percentage of revenue generated outside of the United States — % 1 % 1 % Total property and equipment, net by geographical region (in thousands): Year Ended September 30, 2023 September 24, 2022 United States $ 33,828 $ 23,640 Canada 679 1,238 Total property and equipment, net $ 34,507 $ 24,878 Percentage of property and equipment, net held outside of the United States 2 % 5 % Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.