Shelly Group – 2025 Q4 cons review – Steady performance, profitability remains strong

Steady performance, profitability remains strong

Q4 2025 consolidated results

• Shelly Group increased their sales in 2025 by 40.3% to EUR 149.7mln. While it is a bit slower than the growth in 2024 (42.4%), in absolute terms they added EUR 43mln, while in 2024 it was EUR 31.7mln. Of those, EUR 148.9mln were from sales of products, which recorded 40.3% YoY increase. Sales from services and other an increase of 55.2% to EUR 0.8mln.
• Additional revenues dropped 7% to EUR 3.5mln from EUR 3.7mln. 60% of those are due to FX effects, which are positive, but the overall drop is mostly because of decreased returns of products.
• The sales of IoT products make up more than 97.2% of the total revenues, hence the additional revenues, which compromise of sales of services, rents, FX instruments, play a fairly marginal role. They have revenues from their app, and it is likely that it is accounted under “services” revenues.
• The number of professional installers of their products has increased nearly 6x to over 5,300 (it was 900 at YE 2024).
• The good news is that the DACH region is not the sole powerhouse for revenue generation for the company, hence it is not solely dependent on it. The DACH region grew sales with 27% to EUR 62mln, while a greater growth of 51% to EUR 74mln was recorded in the remaining part of Europe. The excellent performance is due to the expansion of sales teams in Poland and Benelux, as well as the penetration in other European markets. The remaining markets grew with 54% to EUR 13mln. It is clear that the company has achieved a very geographically balanced sales portfolio and the potential for growth remains big – Europe (without DACH) and the rest of the world could offer significant opportunities in the future.
• Sales cost increased 3.5% to EUR 20.6mln. In that, the interesting part is that marketing has decreased by ca. EUR 0.5mln but the expenses for fairs have increased by the same amount, which indicates the increasing B2B focus. Other than that, the sales cost account was up due to increases in transportation to clients and certification expenses.
• Within Other expense, which grew 3x to EUR 7.8mln, the biggest chunk is FX related expenses growing from EUR 0.3mln to EUR 3mln. This could be the result of the growing number of orders from their outsourced producers and the dynamic FX changes of CNY and USD through 2025.
• Within administrative expenses, which rose by over 68% to EUR 31.2mln, the biggest chunk is salaries – 76% of them – nearly doubled, which is driven predominantly to the performance compensation to its executive directors on the basis of company and share performance. Without it, personnel expense would be EUR 16mln, which would be a rise of 31.9% which is in line with the growing sales teams and salaries indexation across the company.
• The total compensation to the executive directors in the form of shares amounts to EUR 7.8mln and is derived from 2 parts – share compensation and annual monetary bonus. The real chunk of that is the share compensation, which is based on a compensation scheme from 2022 meant to encompass the period of 2022 to 2025 (31 December 2025 the final date of it), where compensation comes from main shares (based on criteria for reached average price at pre-specified reference dates) and reserve options (based on consolidated financial performance of the company). The bottom-line is that they will be rewarded with a grand total of 712,000 shares (max possible of 890,250 shares), which were acquired at EUR 10.36752 per share. As a result of this, an expense for compensation has been recorded for the amount of EUR 7.38mln. The annual monetary bonus had 2 financial components (EBIT and consolidated revenues) as well as 3 non-financial components. They are for a total amount of EUR 466.3 thousand.
• We expect that the company will increase the capital with additional 712,000 shares to accommodate for the executive compensation. So far they have created a Reserve for payment of shares in the amount of EUR 6.6mln and will later appear on the Income Statement as Additional Revenue, which will be a one-time boost to the profitability.
• EBIT and EBITDA increased with smaller pace than growth. EBIT increased by 17.6% to EUR 30.3mln, while EBITDA grew with 20.2% to EUR 31.7mln. Both EBIT and EBITDA margins were hurt – EBIT margin dropped by 3.65% to 19.7% and EBITDA margin dropped 3.3% to 20.6%.
• Net Profit increased less – by 11.4% to EUR 25.5mln due to the higher growth in financial expenses. They grew massively predominantly due to FX related expenses in the amount of EUR 1.7mln.
• If we take the executive compensation out of the equation performance would paint a different picture – EBIT increasing by nearly 48% and EBIT margin improving by 1.4%, while EBITDA would increase by 49.7% and EBITDA margin would increase by 1.76%. In a similar fashion, Net Profit would increase 45.4% and Net Margin would increase by 0.9%. This shows that the performance indicators were hurt by a single event, which is not directly related to performance and gives us hope that it is on the right track for great future performance.
• Total assets increased 46.2% to EUR 135mln. The biggest driver was Trade receivables (going up 119% to EUR 78.7mln, adding EUR 42.8mln). This indicates the growing B2B trade flow. Inventory, on the other hand, dropped 16% to EUR19.5mln. It will be interesting to see how this account changes in the future with the growing sales to indicate how well the relationship with suppliers and clients/distributors is managed.
• The company is very liquid considering their cash. Cash is nearly 3.2x their short-term loans and 1.6x their total debt. The rise in lease liabilities compared to last year is due to their move to rented office space. They additionally reached an agreement with United Bulgarian Bank in Q4 2025 for an increase of the bank overdraft that they could use from EUR 5.1mln to EUR 10.2mln. So far the utilized amount is EUR 5.8mln.
• The targets for YE 2026 are for revenues between EUR 195mln and 205mln, EBIT between EUR 47mln and EUR 52mln. They have been very accurate so far in their targets and the chance is that the end figure will end somewhere in between, i.e. around the EUR 200mln mark for sales and EBIT 49.5mln.
• Shelly is one of the companies we can’t stop praising for 2 main factors, which leave little room for random events affecting their performance – their corporate governance and the systematic approach to sales and market penetration.
  • Corporate governance – their planning vs performance has been very consistent over the last years. They have achieved all goals so far despite macroeconomic shocks. While they do not show massive upside surprises, they also perform within the ranges of expectations with little surprise. That eliminates both the chance for unexpected extraordinary gains and the chance that an outside event, likely pertaining to a macroeconomic surprise, to seriously affect performance. In essence, they function like a well operating machine, which delivers despite the circumstances. Predictability is king.
  • Systemic approach to sales – while they were solely focused on the DACH region not long ago, they hired a top sales executive to form a team, which would reap the benefits of the region and the results were very positive. In a similar fashion, they approached other markets and the results speak for themselves – now the remaining part of Europe has surpassed the DACH region in nominal terms. Considering the effectiveness of the strategy, it is likely that they will approach every future market in a similar way, which means that large portions of Europe and the Americas are yet to be tapped to reach their potential.

Full report can be downloaded here.