Shape Robotics A/S (SHAPE.CO) Earnings Call Transcript & Summary

Welcome, and thank you for joining today's presentation of Shape Robotics H1 2025 interim results. My name is [ Kristina Monsen ], and it's my great pleasure to address our stakeholders today as the new Head of Investor Relations and Public Affairs at Shape Robotics. Since I'm Danish, I'd like to greet our Danish audience in Danish first. [Foreign Language] And now back to English. My main priority moving forward is to enhance our dialogue with investors, partners, political stakeholders and the wider market. My mandate and responsibility is to ensure transparency and timely updates as we move forward on this exciting journey, a journey that will, in the not so distant future, enable us to educate millions of students worldwide. It surely has been an exceptional first half of 2025. We have delivered record performance, strengthening our market, secured comprehensive financing and created powerful new partnerships. The successful integration of Sanako, the latest member of the Shape Robotics family, has helped establish us as a leading global provider of educational technology. Let me begin with our key takeaways from the second quarter. We have achieved a record last 12 months' performance, including the highest ever last 12 months reported EBITDA of DKK 50.8 million and a positive net result of DKK 13.5 million. In Q2, specifically, we generated revenue of DKK 60 million, including DKK 41.9 million from Techducator grant recognition, which has been requalified by the Romanian Ministry of European Funds. We delivered a high contribution margin of 52% in Q2 and EBITDA of DKK 13.7 million. We successfully acquired Sanako through a strategic share swap and secured a new multi-facility financing package approved by UniCredit. As our CEO, Mark Abraham stated, our strategic focus on higher-margin solution is now paying off. We're delivering both record high EBITDA and a positive net result, while also securing significant international orders based on our increasingly efficient and comprehensive solutions. And now let's dive deeper into our Q2 financial highlights. Revenue decreased to DKK 60 million in Q2 2025, down 16% year-on-year. However, this reflects our strategic prioritization of profitability over volume growth. The growth we achieved was driven by expanding operations in Romania, particularly through the SmartLab project, sales and services related to the Techducator concept and partial recognition of grants for services and teachers implementation. Our contribution market increased dramatically to DKK 31 million, up 76% year-on-year with contribution margin ratio reaching a high of 52%. Higher margin service revenue represented 12% of revenue in the first half of the year. Adjusted EBITDA increased to DKK 14 million, up an impressive 849% year-on-year. Importantly, no nonrecurring costs were recognized to adjusted EBITDA. This improvement was driven by revenue growth, contribution margin enhancement and cost optimization activities. Looking at our financial guidance for 2025, I'm pleased to confirm we remain on track. For reported revenue growth, our 2025 guidance called for 20% to 35%, representing DKK 360 million to DKK 410 million. Our H1 2025 actuals shows 22% growth at DKK 129.7 million. For adjusted EBITDA margin, we maintained guidance of at least 10%, representing a minimum of DKK 36 million to DKK 41 million. Our H1 2025 performance delivered 19% at DKK 24.1 million. For EBITDA margin, our guidance is a lead 8%, representing a minimum of DKK 29 million to DKK 33 million. Again, we delivered 19% in H1 at DKK 24.1 million. Now let me update you on our key business developments. In Q2, we completed the acquisition of the entire share capital of Sanako through a strategic share swap. Sanako is now powered by Shape Robotics, bring their unique AI pilot language learning technology into our ecosystem. We secured a comprehensive EUR 8.8 million financing package approved by UniCredit, including revolving working capital of EUR 7.5 million, factoring facilities, credit lines and leasing facilities. This was activated in July 2025 to support our growth initiatives. We're preparing a strategic framework agreement worth EUR 30 million with a leading IT distributor in Poland, positioning Shape Robotics as a potential supplier of advanced educational technology to Polish schools. In our post Q2 developments, Shape Robotics secured an order worth EUR 3.8 million targeted at the Vietnamese school system, which is purchasing 150 Thinken laboratories supplemented by Sanako Connect. Let me walk you through our revenue composition and how product mix has evolved. In H1 2025, we recognized grants for services and teacher implementation through Techducator, which was requalified by the Romanian Ministry of European Funds, corresponding to 32% of revenue at DKK 41.9 million. Services including Techducator, Sanako represented 12% of revenue in H1 2025 at DKK 15 million. Sales of Fable Robots reached 10% in H1 2025, up from 9% in H1 2024. Our contribution margin reached 42% in H1 2025 compared to 24% in H1 2024. We've seen significant deliveries of SmartLab equipment in Romania and notably Thinken was introduced in Lenovo Third Party Offering partner program. Our ability to service revenue growth is well positioned across several key metrics. Net working capital amounted to DKK 313 million as of June 30, 2025 compared to DKK 88 million as of June 30, 2024. We expect revenue growth of 20% to 35% in full year 2025 with improved EBITDA profitability supported by solid financial performance in H1 2025. The solid financial performance in H1 2025, increase in net working capital and comprehensive financing from UniCredit Bank reflect our ability to support expected revenue growth with improvement in profitability in full year 2025. We are on track to exceed our communicated DKK 12 million to DKK 15 million annual target at the current level of activity. Let me highlight why Shape Robotics represents a compelling investment opportunity. We provide intelligent classroom solutions and outstanding educational ecosystems with over 2,000 schools now equipped with our technology. Our Fable Robot is the most famous modular educational robot globally, with over 25,000 Fable Robots sold to date. We maintain continuous development of products to scale up the business, including new AI solutions. We have strong partnerships with world-renowned brands, including our Lenovo Third Party Offering partnerships. Our strong growth journey has been fueled by 3 strategic cross-border acquisitions in Poland and Romania. The market opportunity is substantial, EUR 13.8 billion will be invested in digitization, schools and STEAM learning by 2027 in the European Union alone. Looking ahead to our financial calendar, our next interim report for Q3 2025 will be published on November 21, 2025. For Investor Relations inquiries, please contact Adrian Rotaru, our Chief Legal Officer at [email protected]. On September 3, 2025, at 5:00 p.m. Central European Time, our CEO, Mark Abraham will host live streaming Q&A sessions on LinkedIn, answering questions from investors about the H1 2025 Interim Report. You may access the session as a webcast directly on the company's LinkedIn page. Shape Robotics enters the second half of 2025 with robust momentum, enhanced margins, strengthening governance and unwavering commitment to deliver both innovation and shareholder value. We now offer the global market a complete TECHDUCATION ecosystem, combining STEAM education, advanced robotics and AI-powered language learning. This comprehensive approach consolidates our position in Europe, strengthen our global outlook and creates significant new growth opportunities in both Asia and the Middle East, regions where students and teachers need to learn English at their first foreign language while simultaneously accessing world-class STEAM learning solutions. We encourage all investors to join our upcoming Q&A session with CEO, Mark Abraham, and reach out with any questions regarding our performance, strategy or outlook. For any additional questions or direct inquiries, please contact our Investor Relations team at [email protected]. Thank you for your continued trust and support as we advanced our mission to transform global education through innovative technology solution. [Foreign Language]. Thank you for your time.