Sarcos Technology and Robotics Corporation, known for its physical robotic technology, announced a significant shift in its business strategy, focusing now on artificial intelligence (AI) and machine learning (ML) software. This pivot was disclosed along with the company’s financial results for the third quarter of 2023.
At the same time, Laura Peterson was appointed President and CEO, and Ben Wolff, co-founder, assumed the role of Executive Vice Chairman. Under Peterson’s leadership, the company has undertaken a comprehensive review of its business strategy, leading to the decision to suspend hardware commercialization efforts and concentrate on AI/ML software development.
Boosting this new direction, Sarcos secured a $13.8 million contract from the U.S. Air Force to enhance its AI/ML software capabilities. This pivot enables Sarcos to target a broader market by focusing on their AI/ML software platform, which can be applied to both existing and new third-party robotic systems.
Financial Highlights and Restructuring
The third quarter of 2023 saw the company’s revenue at $1.8 million, a decrease from the $4.7 million reported in the same quarter the previous year. This decline is attributed to fewer product development contracts. Total operating expenses were $32.6 million, slightly up from $31.9 million in 2022. The company has also initiated a significant restructuring, including workforce reduction and operational cost cuts, projecting a substantial decrease in monthly cash usage post-restructuring.
The company’s R&D expenses showed a marginal decrease to $10.0 million in Q3 2023, as compared to $10.5 million in the same period last year, reflecting the prioritization of efforts towards AI/ML software development.
With the strategic shift, Sarcos has refrained from providing revenue guidance for the fourth quarter. However, they anticipate ending the year with about $39 million in cash, cash equivalents, and marketable securities. The estimated average net cash usage for 2024 is projected to be around $1.6 million per month.