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

Thank you for joining us in this beautiful beginning of the winter afternoon. Today, I will cover through a Q&A session, all the questions that have been sent after the distribution of our promotional Q3 report.

We are ready to start very direct on some of the key insights of the Q3 report and to answer some of your questions. This will be divided into 3 large question categories. I have taken the notes necessary to include them. First of all, we will discuss about the expectations, set of questions that come around the expectations of our business. Of course, we will discuss about capital and very important geography and our go-to-market strategies. The first set of key points that we should take in consideration after the Q3 report regarding expectations guidance is that we are firmly stating that the guidance will be achieved. There is no question about that. We have explained thoroughly. We are on a very good path, especially on the Q3 results when we are talking about introducing the new concept of educator, where we have very big steps forward in the sense that you have seen already, we have achieved a significant increase in the contribution margin. This is because it's the first time we are activating services based on the concept. As I have explained in previous sessions, the Techducators concept is a training service agreement. If you want in a simple explanation, it's an SLA agreement in which our team is providing content and training for our customers and for the SmartLab and STEAMLab family of products. Also very important to note is that Q3, my first quarter, let's say, fully in charge of Shape Robotics after the second quarter, which was mostly a transitional period was quite a short quarter in that sense because we have to take in consideration that this is only a 50-day quarter or even less when we're talking about working days because this is a summer quarter. And during the summer, of course, we are a business to governmental company, and we are working in the ed tech sector. During the summer, we have at least 2 months of vacation in general. If you follow that trend line and you see that we have achieved considerable revenue growth for the Q3 compared to all the other years, this fully answers any questions related to implementations in Q4 and how the schedule looks like because we have achieved Q3 in only 40, 50 days. From this perspective, we confirm, again, there is a very clear path on achieving the guidance. No discussion on this topic. We are going to confirm that. Now another important aspect that came with a recurrent question in the last 4, 5 months since I joined in this position was regarding a potential increase in equity. As I said many times before, this is not happening now. We have no short-term plans in that direction. We have made a very important announcement in the last 2 weeks about a strategic partnership, I would call it, with UniCredit Bank that basically provides all the necessary cash flow that we have budgeted to achieve the goals for the next quarters. Again, I firmly stated there is no plan to increase capital in the short term. And maybe the last important aspect, one very close to my heart and the thing that we are doing every day. For me, the most important one, which is the go-to-market strategy, basically the geographic and distribution. As you all know already, we had an important achievement also presented in the last weeks, which was the signing of a new distribution agreement. A strategic partnership for us with Ingram Micro. Ingram Micro, everybody is aware of the potential of an agreement with Ingram Micro right now, a huge international company that, of course, we have signed firstly, an agreement with Romania for the sake of let's say, improving the stability in the distribution chain, especially for the projects that come from the SmartLab implementation and also other projects like we have presented in Q3, also tenders that we won in different, let's say, business verticals than the one that we operate with full force. What I'm trying to explain is the fact that right now through this consolidation, we have answered most of the, let's say, possible risk that were noticed on the market regarding the fact that we only have one distribution channel. But I have to really explain that we have actually 3 large distribution channels. One is NOD, who's a strategic partner, and we have made extremely good progress with them as everybody knows. Second, Ingram Micro, a new addition to our partnership portfolio. And the third one, which I want to make sure that everybody has noticed is Lenovo. Lenovo through the 3PO partnership has become officially a distributor in the sense that our products will reach completely different markets. We are discussing about 100,000 resellers that today have available in the price list products from Shape Robotics. Of course, this doesn't change over the night into orders or it doesn't transform the numbers in a second. But the reach that we have through this distribution channel is amazing. What we are trying to do is together with the international sales team and with the channel management team to make sure that everybody that has access to our product is completely informed, well trained. We participate to a large number of events, fairs, presentations, roadshows in which we are trying actively and succeeding also to do what is called channel enablement. And basically, this is the most important aspect of our business today. And I have to be extremely transparent and tell you that Poland occupies most likely 60% to 70% of our time in general for activating the channel and activating partnerships there because we have explained many times that we have a very clear goal in Poland. And I'm sure that results will keep on showing in the next quarter reports and the year to end report. This more or less has covered all the questions that I have received. As I have communicated before until 10:00 a.m. in the morning, I'm trying to just structure everything to make it in such a way that everybody has a clear timing, a clear strategy on how to enter in contact with us. As I have promised before, we will continue having the one-to-one more business-oriented one-to-ones where I will introduce also other colleagues like we started before. But for the sake of investor communication, this will continue to be a separate discussion like the one today, where we present the numbers, we present the achievements and we answer the questions in a more regulated and more consolidated way. I hope I was able to answer everything that was sent. And I just ask you to continue sending us questions and be close to us, and thank you for your support in the stock exchange market. We are following closely the evolution of the discussions between different investors. And I'm sure that all these questions have been answered fully today. I hope that this covers everything. Let's see if there is any last-minute topic on LinkedIn. If not, thank you very much for everything and hope to see you very soon. Is there anything that we have to cover? No. Again, thank you very much. And just keep connected to us, and we will give you the schedule for the upcoming interventions in the next weeks. Have a great evening. Thank you.