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Sarcos’ Guardian XT was one of many core robotics options inside the Sarcos product line that’s now being deserted for a brand new software-based product technique. | Picture credit score: Sarcos
Sarcos Expertise and Robotics Company has not too long ago introduced a strategic shift in its enterprise focus, pivoting from robotics to a extra vital, near-term alternative offered by its robotic synthetic intelligence (AI) and machine studying (ML) software program platform.
Laura Peterson, President and CEO of Sarcos, emphasised the essential function of the software program developed by the corporate over time, stating, “Since I assumed the function of CEO in Could, our management crew has performed an ongoing rigorous, data-driven evaluation and overview of our enterprise, market alternatives, merchandise and growth packages.”
Peterson defined, “We consider that our AI software program platform will allow, for almost all of the economic robots being bought world wide, a dramatic discount in robotic coaching instances whereas additionally making industrial robots much more agile, which means they’ll carry out extra duties with larger variability much like how people can carry out all kinds of duties.”
The imaginative and prescient for Sarcos’s AI software program platform commenced in 2017 and progressed to its first CYTAR (Cybernetic Coaching for Autonomous Robots) authorities proposal in 2019. Chief Expertise Officer Dr. Denis Garagić joined the corporate in 2020, initiating vital design and growth work. The corporate plans to have interaction current prospects to find out the following steps in every relationship. The vast majority of Sarcos’ authorities contracts are associated to AI software program growth and are key to the go-forward technique.
In 2022, Sarcos acquired RE2 Robotics, a Pittsburgh-based developer of autonomous and teleoperated cellular robotic programs, for $100 million. The corporate appeared to double down on this acquisition earlier this yr when it introduced quite a lot of adjustments to the corporate that aimed to develop income and leverage strategic alternatives that present the best market traction and meet buyer demand. These adjustments included specializing in robotic programs for subsea, aviation, and the photo voltaic finish market.
Sarcos has secured AI software program growth contracts with the U.S. Air Drive, offering funding for the platform’s growth and alternatives for real-world testing. Peterson anticipates bringing a model of the AI software program platform, suitable with most industrial robots, to market within the first half of 2024, with extra options deliberate for launch by the tip of subsequent yr.
Sarcos was one of many innovators within the robotic exoskeleton market as this historic lineup of merchandise exhibits the evolution from technology to technology. The corporate has a robust historical past of leveraging authorities contracts to fund its growth. | Credit score: The Robotic Report
To align with this strategic shift, Sarcos has determined to droop commercialization efforts on its subsea, aviation, and photo voltaic robotics {hardware} packages. Peterson famous, “With the necessity to guarantee we’ve adequate monetary assets to pursue our software program alternative, we’ve made the troublesome resolution to droop for the foreseeable future commercialization efforts on our subsea, aviation and photo voltaic robotics {hardware} packages. We are going to, nonetheless, proceed to deal with these markets by means of our AI/ML software program platform.”
The corporate additionally instructed The Robotic Report that by suspending the commercialization efforts on the subsea, aviation, and photo voltaic robotics {hardware} packages for the foreseeable future, they intend to focus on these markets by means of the AI/ML software program platform. Moreover, Sarcos’ robotic programs shall be used for additional growth and testing of its AI/ML software program. The corporate believes that this software program platform will allow a dramatic discount in robotic coaching instances whereas additionally making industrial robots much more agile.
The corporate believes this strategic resolution will enable Sarcos to succeed in a broader market extra shortly by separating its AI and ML software program from its robotic programs. Peterson believes that “By de-coupling our AI and ML software program from our personal robotic programs, we consider we are able to attain a wider market extra shortly.”
Shedding 150 workers
The product portfolio shift necessitates a discount in Sarcos’s workforce by roughly 150 workers. Peterson acknowledged the problem of such choices, stating, “Whereas it’s at all times a troublesome resolution to make staffing cuts, particularly one this vital, it is vital that Sarcos is resourced appropriately and that we’re good stewards of our capital.”
It has been a tumultuous yr for Sarcos as this announcement follows a layoff of 75 people from the corporate in July 2023 and the hiring of Peterson in Could 2023 to switch prior CEO Kiva Allgood. Third quarter 2023 web loss was $29.0 million or $1.13 per share, in comparison with a web lack of $22.5 million or $0.89 per share within the third quarter of the prior yr. Income is down, as complete income within the third quarter of 2023 was $1.8 million, in comparison with $4.7 million within the third quarter of 2022. In accordance with the newest monetary report, revenues decreased on a year-over-year foundation as a consequence of fewer product growth contracts being labored through the present yr, offset barely by a rise in product income.
In August, the corporate reported $1.3M in income throughout Q2 2023 in opposition to a lack of $28.7M. The corporate has struggled to attain profitability since going public by way of SPAC in September 2021. Additionally in August, Sarcos additionally introduced it signed an settlement with Blattner Firm to develop its autonomous robotics photo voltaic building system additional. The corporate is abandoning this effort as a part of the restructuring.
RE2 developed a semi-autonomous and teleoperated underwater ROV as a part of its product portfolio. | Credit score: RE2
Closing Pittsburgh workplace
To additional align with the strategic pivot, Sarcos plans to shut its Pittsburgh workplace (the unique RE2 headquarters) and consolidate operations in Salt Lake Metropolis. Peterson emphasised, “We consider the prioritization of our AI software program platform meets our beforehand introduced aim of pursuing vital near-term income tied to acute buyer wants, reduces our capital necessities and associated dangers according to accessible assets, and can result in long-term stockholder worth creation.”