Symbotic Inc.SYM
Symbotic Inc. Income Taxes Disclosure
Income Taxes
The components of income/(loss) before provision for income taxes are as follows (in thousands):
| Year Ended | |||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 30, 2023 | |||||||||||||||
| Income/(Loss) before income tax expense: | |||||||||||||||||
| U.S. | $ | (97,116) | $ | (81,301) | $ | (216,891) | |||||||||||
| Foreign | 4,457 | 841 | 4,377 | ||||||||||||||
| Total | $ | (92,659) | $ | (80,460) | $ | (212,514) | |||||||||||
The provision (benefit) for income taxes consists of the following for each of the periods presented (in thousands):
| Year Ended | |||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 30, 2023 | |||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | — | $ | — | $ | — | |||||||||||
| State | 245 | 244 | 307 | ||||||||||||||
| Foreign | 2,333 | 51 | (13) | ||||||||||||||
| Total current taxes | $ | 2,578 | $ | 295 | $ | 294 | |||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | (1,128) | $ | — | $ | — | |||||||||||
| State | (1,292) | — | — | ||||||||||||||
| Foreign | (1,785) | 3,917 | (4,914) | ||||||||||||||
| Total deferred taxes | $ | (4,205) | $ | 3,917 | $ | (4,914) | |||||||||||
| Provision (benefit) for income taxes | $ | (1,627) | $ | 4,212 | $ | (4,620) | |||||||||||
The following is a reconciliation of the expected U.S. Federal income tax rate to the effective tax rate for the years ended September 27, 2025, September 28, 2024, and September 30, 2023 (dollars in thousands):
| Year Ended | |||||||||||||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 30, 2023 | |||||||||||||||||||||||||||||||||
| Loss before income tax | $ | (92,659) | $ | (80,460) | $ | (212,514) | |||||||||||||||||||||||||||||
| Tax on pre-tax loss | (19,458) | 21 | % | (16,860) | 21 | % | (44,628) | 21 | % | ||||||||||||||||||||||||||
| Loss not subject to tax | 15,837 | (17) | % | 14,175 | (18) | % | 39,497 | (19) | % | ||||||||||||||||||||||||||
| State income tax rate | (2,758) | 3 | % | (2,051) | 3 | % | (3,363) | 2 | % | ||||||||||||||||||||||||||
| Permanent differences | 825 | (1) | % | 769 | (1) | % | 992 | — | % | ||||||||||||||||||||||||||
| Adjustment for foreign income tax rate differential | 375 | — | % | 45 | — | % | 241 | — | % | ||||||||||||||||||||||||||
| Credits | — | — | % | (2,763) | 3 | % | (1,218) | 1 | % | ||||||||||||||||||||||||||
| Valuation allowance | (19,161) | 21 | % | (5,341) | 7 | % | 3,187 | (1) | % | ||||||||||||||||||||||||||
| Impact on foreign activity | 218 | — | % | (398) | — | % | 575 | — | % | ||||||||||||||||||||||||||
| Return to provision | 896 | (1) | % | 5 | — | % | 88 | — | % | ||||||||||||||||||||||||||
| Adjustment for rate changes | 21,555 | (23) | % | 16,620 | (21) | % | — | — | % | ||||||||||||||||||||||||||
| Other | 44 | — | % | 11 | — | % | 9 | — | % | ||||||||||||||||||||||||||
| Total income tax | $ | (1,627) | 2 | % | $ | 4,212 | (5) | % | $ | (4,620) | 2 | % | |||||||||||||||||||||||
The following is a summary of the significant components of the Company’s net deferred tax assets as of September 27, 2025 and September 28, 2024 (in thousands):
| Year Ended | |||||||||||
| September 27, 2025 | September 28, 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating losses | $ | 83,283 | $ | 49,735 | |||||||
Investment in Symbotic Holdings, LLC (a) | 538,258 | 488,841 | |||||||||
Tax Receivable Agreement (a) | — | — | |||||||||
| Other | 1,907 | 264 | |||||||||
| Credits | 8,146 | 9,269 | |||||||||
| Total deferred tax assets before valuation allowance | 631,594 | 548,109 | |||||||||
Valuation allowance (a) | (627,868) | (546,090) | |||||||||
| Total deferred tax assets after valuation allowance | 3,726 | 2,019 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Foregone FTC | (83) | (178) | |||||||||
| ROU asset | — | (125) | |||||||||
| Foreign R&D credit recapture | (678) | (722) | |||||||||
| Total deferred tax liabilities | (761) | (1,025) | |||||||||
| Net deferred tax asset | $ | 2,965 | $ | 994 | |||||||
(a) For comparability, the 2024 amounts in the deferred table have been adjusted to align with the presentation as of September 27, 2025. We believe the new presentation better reflects the deferred tax assets / (liabilities) after the recent acquisition of ASR. The 2024 presentation change is not material and the changes do not impact the 2024 financial statements nor the total net deferred tax assets/(liabilities) previously reported.
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. In the United States, the valuation allowance is predominantly related to the Company’s investment in Symbotic Holdings LLC, while the foreign valuation allowance is related to Canada.
Due to the acquisition of ASR during the year ended September 27, 2025, the Company recorded additional deferred tax assets in the United States with an offsetting increase to the valuation allowance. As part of the acquisition accounting, a portion of the valuation allowance increase was determined to relate to goodwill. In addition, as part of the acquisition accounting, deferred tax liabilities provided a source of future taxable income enabling the release of a small portion of the valuation allowance. As a result, the Company’s ending valuation allowance as of the year ended September 27, 2025 is $627.9 million and consists of $618.4 million in the United States and $9.5 million in foreign jurisdictions. The change in the valuation allowance in fiscal year 2025 of $81.8 million predominantly relates to the Company’s investment in Symbotic Holdings LLC, tax carryforward attributes, and the Company’s acquisition of ASR.
Activity related to the valuation allowance for the periods presented was as follows (in thousands):
| Year Ended | |||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 30, 2023 | |||||||||||||||
| Beginning balance | $ | 546,090 | $ | 370,996 | $ | 134,246 | |||||||||||
| Recorded to additional paid-in capital | 56,420 | 180,412 | 233,563 | ||||||||||||||
| Recorded to goodwill | 44,825 | — | — | ||||||||||||||
| Recorded to income tax expense | (19,467) | (5,318) | 3,187 | ||||||||||||||
| Ending balance | $ | 627,868 | $ | 546,090 | $ | 370,996 | |||||||||||
Net Operating Losses
As of September 27, 2025, the Company had U.S. federal net operating loss (“NOL”) carryforwards of $315.4 million and gross state NOL carryforwards of $220.7 million. U.S. federal and certain state NOLs generated in 2018 and beyond have no expiration. The remaining state NOLs expire at various dates through 2043. As of September 27, 2025, the Company had Canadian NOL carryforwards of approximately $24.4 million. The Canadian NOL carryforwards expire in various years
through 2037 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 27, 2025, 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 27, 2025 and September 28, 2024, the Company had no unrecognized tax benefits.
Tax Receivable Agreement
As of September 27, 2025, 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 27, 2025 are projected to be $452.9 million, and if paid, would create additional tax basis in the partnership. 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 27, 2025, 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.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 24, 2025 | Showing above |
| 2024 | Dec 4, 2024 | |
| 2023 | Dec 11, 2023 | |
| 2022 | Dec 9, 2022 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.