Shelly Group – 2025 Q1 cons results

Strong strategy leads to surpassing sales expectations

Q1 2025 consolidated results

• Shelly Group continued their strong sales push in Q1 2025 amid overall turbulent environment. Total revenue marked an impressive growth of 28.9% reaching EUR 27 mln (BGN 52.9 mln), which was due to the focused sales strategy. The additional EUR 0.6mln (BGN 1.1mln) were from FX operations and gains likely reflecting the change of the USD value relative to EUR over the last year.
• The sales of IoT products make up more than 97.5% of the revenues, hence the additional revenues, which compromise of sales of services, rents, FX instruments, etc play a marginal role and their movements are largely irrelevant. They do not present a revenue breakdown in their quarterly reports. In their annual 2024 report, an interesting account within Sales is “Revenues from services and rent”, which represents mostly subscription fees through their app, which marked 312% growth to reach EUR 0.5mln for YE 2024. Considering latest growth in subscriptions, this account must have marked an increase, but it is likely still relatively small.
• Cost analysis represent a more focused and effective strategy. Sales cost have decreased nearly 11% to EUR 1.5mln (BGN 3mln), where the biggest contributor is Marketing. Expenditure for fairs and expos, however, has increased by 70%. From their 2024 report we can see that 89.6% of their revenues are from B2B clients, which shows that management has decided to concentrate on their core strength – B2B clients and use those channels as primary placement, rather than reaching retail clients directly. On the down side, the retail clients channel, albeit fairly small, could offer serious potential and higher margins, but it would require a separate strategy altogether and its outcome is unclear.
• Geographical distribution – quarterly reports do not give information about this, but the annual indicates that sales in the EU (including Bulgaria) have shrunk in relative value from 98.5 to 87.5%. While decision to hire top talent to head the DACH region expansion and lately that in Poland, it is clear that non-EU markets are growing and Shelly is positioned favorably to reap the benefits. The non-EU push is indicative from the growth in Other expenses, where it’s increase from EUR 0.3mln to EUR 1mln is due to FX fees.
• The investments in efficiency, R&D, etc have clearly paid off. EBIT increased 23% to EUR 6.7mln (BGN 13mln) and EBITDA notched a bit higher by 24.1% to EUR 7.1mln (BGN 13.9mln) likely as the result of the grown inventory.
• Net profit increased 23.6% to EUR 5.6mln (BGN 11mln), however Net Margin decreased by over a percentage to 20.82%.
• Total assets increased by 41% to EUR 95mln. The biggest driver was Trade Receivables (48% growth to EUR 44mln, in line with the increasingly focused B2B strategy), Inventory (nearly 49% growth to EUR 16.1mln), Assets with the right to use (reaching EUR 5.4mln from nearly zero) and Intangible assets (reaching EUR 7.2mln).
• The company is very liquid considering their cash. Cash is nearly 19x their short term loans and 3x their total debt. The rise in lease liabilities compared to last year is due to their move to rented office space.
• Following the acquisition of LOQED B.V in Q3 2024, the company found out that the demand for their products is far exceeding their initial expectations. The initial shipment of 1,000 smart locks was sold out immediately. The second batch of 4,000 smart locks, which would be delivered in Q2 2025, was pre-sold in full as well. Since these locks are more complex, their design and delivery takes more time. Shelly plans to develop 2 new models in 2025 and utilize this demand.
• On 09.04.2025 Shelly announced that amid the volatile geopolitical situation in relation to the US tariffs, any sudden movements are going to have minimal impact on their income statement considering the relatively small part their sales.
• On 30.04.2025 the company announced that they are hiring a notable expert Adam Kruzhinsky for the expansion on the Polish market. The Polish market is expected to grow at 10-12% in the next few years and is the leading market among the Central and Eastern European markets. This is the second time the company hires a renowned expert after they hired a top talent in 2024 to lead the DACH region. It is clear that the company does not suffer from top management hubris and it is a very positive sign.
• On 14.05.2025 the company announced that their growth in Q1 is exceeding their expectation by a slight margin. Considering the very volatile 2025 in global markets, this is an achievement and a sign for their stable sales channels. Additionally, they confirmed that their projections for 2025 are going to be growth of sales between EUR 145mln and EUR 155mln and growth of EBIT to EUR 35mln to EUR 40mln.
• On 02.06.2025 the company approved a dividend of EUR 0.13 per share, which represents a minimal 0.26% dividend yield.
• On 03.06.2025 it was announced that the company is taking measures to increase the production capacity. The existing capacity of 800,000 items per month is insufficient and by the second half of 2025 it will be nearly doubled to 1,500,000 items per month. Additional increase is planned for 2026, when production capacity will reach 2,000,000 per month. Such increases will allow the sales to surpass EUR 100 mln annually. The expenses for the expansion will be covered by their Chinese subcontractor, which will rely entirely on the promise for steady sales.
• On 17.06.2025 it was announced that they are expecting 2025 to be a year when over 10 mln new Shelly devices will be activated. So far more than 3,000 new Shelly smart homes are added daily, which results in 26,000 newly registered Shelly devices per day. Additionally, the open architecture of the Shelly platform allows use together with third parties, such as Alexa, Google Home and Samsung Smart Things. Overall, this leads to over 2,500 new Shelly Cloud accounts per day and over 600 daily integrations of external systems with Shelly. The abovementioned subscription fee revenues are likely to increase, but considering the fact that their platform could be shared by other parties, it is possible that it will not become a vital part of their business.

Full report can be accessed here.