Shelly Group SE (SLYG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and a warm welcome to today's earnings call of the Shelly Group SE. Following the publication of the unaudited half year figures of 2025 and giving a business update. I'm delighted to welcome the co-CEOs, Dimitar Dimitrov and Wolfgang Kirsch, who will speak in a moment and guide us through the presentation and the results. After the presentation, we will move on to a Q&A session, in which you will be allowed to place your question to the management. So let's jump straight into the figures. Mr. Kirsch, the stage is yours.

Yes. Good morning, everybody, and welcome to the first half earnings call 2025, and welcome as well on behalf of Dimitar Dimitrov, who is next to me. And as usual, we will lead you through numbers. I will start with some general updates and some general numbers, then Dimitar will talk about products, what will come, what happened and some activation things that are really interesting. And then I will lead you through the detailed financials and some previews for the end of this year. Just a reminder for the newcomers, we are a smart home company or a smart business company. We are making your home smart. We are making companies smart. We are making solar business smart. We have to save energy. That's what we are doing, and that's a thrilling business, and that is continuing to grow. Some highlights from the first half of the year, we grew our installed base. We have now 2.3 million or more than 2.3 million users of our cloud. We increased that number by 800,000 in the last 12 months. We are in more than 4.9 million households. That's always a bit of an estimation because we don't -- cannot measure exactly the households, but the cloud users. We grew that by round about 1.6 million in the last 12 months. The first channel was sold in 2018. And since 2018, we sold 2.6 million devices in total and 11.5 million in the last 12 months only. That's really amazing figures. That starts to be a really important customer base, and that starts as well to unlock our Software-as-a-Service business, so that opens doors for future businesses with monetizing the data that we have, monetizing the customer connections that we have, and that is something that we look more and more at and it starts to be one of our key objectives. Some other highlights. The financials, revenue is above target in the first half of the year. EBIT is on target in the first half of the year. The growth in all regions is above the market, always a bit complicated to say how strong the market grew. We estimate something between 10% and 15%. In some reasons, it might even be below the 10%, as I said, always complicated to get some numbers, but that's the best estimate that we have. In distribution, we once again onboarded new distributors, new distribution channels in DIY as well as in the professional business. And about the professional business, a very important and something we are really proud of is our installer network that is growing. You might know that we started that a bit more than a year ago and end of 2024, we had 900 installers onboarded. End of June this year, we are more than 2,400, sorry. And I can tell you that in the next quarters, we will be able to report higher numbers because currently, it's growing very fast. And that shows that our products are more and more appreciated in the professional segment as well. And that's something that we were working hard and that starts to pay back now. Customer ownership, that's about the numbers that I showed you before, but besides having more addressable customers that use our application and of course, a strong increase in the premium app. Dimitar will talk about the number of activations in the cloud, of devices in our cloud. That's something that gives a promising outlook for the next 6 months as well. Last time, for the first time, we talked about verticals. You know that we are already quite strong and seen as a platform in the solar business. But beside this, we are talking with other potential verticals. And one is motors that is really at the source. That's the guys that build the motors for garage doors, not the garage doors. So it's 1 level before or the motors for shading systems. We are in good progress. We have a couple of very good contacts. Everyone is happy about the progress of work. It will take some time, but that's on an excellent way. With the insurances, I have to say that it will take longer because they have very long decision cycles, that's still very early stage. But everyone says that is amazing what we could do, how the insurance could save money, how the user of the insurance could save money. Let's talk about that, and then it takes a long time. On the security systems, we are for a longer time already in certification process with the big American security companies. This is -- for most of them, this is already finished. And in the last couple of weeks and months, we got a very good visibility about our Z-Wave long-range product in the U.S., we are in a lot of magazines -- specialized magazines. And since then, we have a higher attention from all those guys. We are in test processes, so we hope that this will pay back as well in the next year. And something that is new is energy contracts, electricity contracts. Using our database, we are in very good contact with energy providers and with energy platforms. Of course, we will do this in the DACH region first, where we have the highest density of customer data. And with this information, we can really tailor made offer and sell electricity contracts to customers because we know how much they consume. We know what they consume it for and when exactly during the day they consume it for. So we can make some tailor-made offers. First test will start end of this year, beginning of next year, but looks very promising and everyone is happy about the data that we can provide in this regard. Couple of days or weeks ago, we published that we have made the first co-branded deal with one of our big partners in solar business. EcoFlow is a company based in California and in China. They bought and will continue buying 2 of our devices, the Pro 3EM and our Shelly Plug and will bundle this worldwide in all their regions with their solar systems to have a better energy management system, and that is something that we expect to come from other partners as well. So that's the next step, if you want, in the vertical of solar business. So now about the numbers. All numbers shown in the right direction. In the first quarter, we grew our revenue 29.3%, so round about 30%. The EBIT only grew 12.6%, but it's in the frame on the level of the expectations for a quarter that is not one of the strongest quarters. And we were hit by some currency exchange issues. Coming from the weak dollar, we lost EUR 1.6 million on that. If we would make a currency adjustment with the dollar-euro exchange rate, our EBIT margin in the first half of the year would be on 25.4%, so even above the expectations. Where is this coming from? This comes from our very early payments or prepayments of orders that we have still done with a higher dollar. Now that the dollar is lower when the products arrive, we have to reevaluate the products and the prepayments and that leads to this EUR 1.6 million. We do not expect that this continues in the second half of the year, but we have some positive counter effects in the second half of the year. I will come back to this later. And the last number is something that we are specifically proud of. You know that we worked a lot in the last months on cash improvement and on free cash flow improvement. We have made a very good jump in cash, mainly coming from free flow from operations -- sorry, free cash flow from operations. And you will see more details in the second part of my presentation. So all numbers are going in the right directions. There is no weak spot. So we are quite confident. We are happy about the first half of the year, and we look positive in the second. And now I'll pass to Dimitar to talk a bit about products that before I come back with information about more detailed numbers.

Thank you, Wolfgang. Welcome to everybody. Let's talk about the products and show what we do and what we're planning for, for the second half of the year. As you can see, for the first half of the year, we already released more than 30 -- yes, 32 products, which is a [ nicest ] update, it's product base because we are strongly working on the generation for the latest generation of the Shelly devices. But also, we released 13 new products completely new on the market, which did not exist before, which support our growth. And this is not everything because the big portion is coming now. We keep a huge -- really amazing new products and new releases for IFA because we want to present them in this huge event. This is our how to say, our home event. In Germany, even it's a worldwide event where we want to present the latest technology, the products which is we talk about it with them -- for them before, but they really -- it's a game changer for some of the smart home directions. Something which is also important that you can see that how the generation and the new product is coming into the market. For 2022, the most selling and most used product is a generation 1. Then we slowly start penetrating the market for the generation 2 of our devices. 2024 we were generation 3. And now that this year, we can see that the generation 4 is coming on top. How this help us? Because every new generation adds something else. This is adding the new protocols, which can be used the new -- not only the new devices, but especially the new integrations, which can be done with our devices because now just imagine that generation 1 support just the WiFi, generation 2 support just the Wi-Fi and Bluetooth, the generation 3 support not only WiFi, Bluetooth, but different kind of the add-ons and the LoRa and other things now out of the box, the generation 4 support Wi-Fi, Bluetooth, Zigbee technology. On the top of that, we have a 4G and LoRa add-ons to each of our devices, which, by the way, make our devices compatible with almost everything and anyhow automation worldwide. Something else which is very important. Besides the sales, we are also looking how it's going with the cloud activations because like that, we want to be sure that we did not just fulfill our -- the warehouses of our distributors and wholesalers. But also, we want to see that they're selling the devices and how the activation is going. What happens as you can see even that our growth is below 50%, we -- clearly, we can see that we keep above 50%, the daily activation rate for the new customer. This is the new devices, the new customers who install devices on a daily basis. Also, you can see that our average number compared with the 7,500 now is above how many, it's 11,000 average daily activation. This is the new devices on the existing and new households. This is a very important number, which we monitoring, and we know that from where -- we know that the -- I'd say the Shelly is keep growing, and we have much more penetration on the market. What happens? That's something which also show in the previous call. Now in the Q3, we're ready and on the IFA, this is partially what we show very shortly, this is the first Shelly Power Strip. The very amazing Presence Sensor with the positioning of the people and the multi-person positioning counting and targeting. Then something which we never show until now, but the codename is the XL Display, the new multimedia point of the central control display for the house. The Ultrasonic Sensor is something which is at a very long time is the customers are asking us because they want to measure the different kind of liquid levels or presence, but with ultrasonic detection and some others, which want to keep them hidden because we never presented and we prepared a huge event in IFA where we show it. And for the Q4, we're still on target and still working for the new Pro series, the generation 4 which we're targeting to be VDE certified -- completely VDE certified. The camera line which we talked about, the new cameras is on progress and working on that. The bulbs and different kind of the additional device, which we're working on, which I don't want to share now because this will take a lot of the time, yes. Now I want to go back to Wolfgang with the financial advice. Thank you, all.

So you see that most of the products at least are coming that we promised before, and that gives us some tailwind for the second half of the year. Just to remind you, as usual, there was the chart that I showed before. All numbers are going in the right direction. Revenue growing EBIT growing with the small effect in currency, the EBIT would even be above our targets and way above the targets for this quarter, above the target for the year. And our cash is increasing and coming from a better management of working capital. So now if we go into the quarters, you see that first quarter, we were growing around about 29%. Second quarter, the same speed. For the second quarter, we planned a growth rate of 30%. We landed at 29.6%. So that's almost on the point but in the first half of the year, if we take the 2 quarters accumulated, we plan to grow EUR 52.8 million, and we are -- to reach EUR 52.8 million, we are on EUR 54 million, so a little bit above. Just a side note, something that is completely normal for us, but it's not normal for other companies. We have now 30 quarters in a row of growth. And this is something that is really amazing. And of course, we plan to continue this record. So let's see if we reach EUR 60 million or above without any fallback in revenue. We are at least working on that. On the EBIT side, both quarters growing in EBIT second quarter. If we take the EBIT with this side effect that was higher in Q2 than it was in Q1 of the currency exchange rate issue because more products were coming in that we already prepaid before at a lower price. But if we take the adjusted EBIT margins, it's 26.9% for the first quarter, and it's 24% in the second quarter. We confirm the annual target of 25%, so we are on a perfect way towards that. And we think, especially with higher revenues that we planned for the second quarter that we already announced beginning of the year, and we have some -- we have less currency effects, and we have positive currency effects coming from lower cost of goods, that will support a strong EBIT margin in the second half of the year. The regional split. The DACH region, our biggest region growing above 20%. You know that the region is -- at least was beginning of the year, not in a very good shape in general. The economic situation was a little bit stressed. It looks better now. So it looks that the economy in Germany is coming back. All signs are more positive, but first half of the year is over. We grew 20%. That is, from our point of view, significantly above the market with these twice the market, maybe 3x the market. The DACH share of revenue now is a little bit below 50%. That's as well planned because, of course, with all the efforts we are doing in other regions, they have to catch up. Rest of Europe grew 31%, almost 32%. share now is 45.6% and this is mainly supported by Italy and Nordics where we have on a good level already, especially in Italy, a very nice growth rate, so very high growth rates. The U.K. is performing over proportionately, but still on a low level. We are still not having our team on board, the full team on board in the U.K. We have 1 person. We see that this brings some effects, but we want to invest more. We just have a problem to find the right people there. Rest of the world, a huge jump, 83.7%. That's a huge increase, mainly coming from Asia and a bit from Australia, United States is as well growing in the same speed as the group but I have to say that we still are on a low level here, and we still see this opportunistic. So this is not our key focus. Our key focus is in Europe. That's where we want to continue growing and whatever we can take from the rest of the world. And if it continues like that, of course, we are more than happy, but that's nothing that's really plannable that we think we should focus on. Now the cash flow bridge or the cash bridge. If you look to the number of cash flow from operations, we increased that, and that is the main message here. We increased that versus last year by EUR 6.2 million. That is an amazing achievement. That is the first result from all the small measures that we are taking, and we are definitely not at the end with that. We are just at the beginning to optimize our working capital level and to really work on all the details that will take a longer time, but it's a very good achievement. We invested around about EUR 2.1 million in R&D, EUR 1.9 million more than last year, total investments and the rest of the numbers are more or less on a normal level. If you ask yourself why FX rate here is only EUR 300,000 instead of the EUR 1.6 million that I mentioned before, that's the cash effect. The other effect is not a cash effect that's coming from the cash effect. That's why this is mentioned here in the cash bridge and the cash flow overview. So all very nice. We are still on an equity ratio of 81%. That is amazing. I don't think that there are that much companies out there with those numbers. Just an update on this chart. We have working capital measures on the way for the last 6, 9 months. The measures itself did not change. We made some progress in most of them. And as I said before, we are definitely not where we want to be. We see some first good results, and we see that it will take some time. So I would say 1 to 1.5 years to really reach a very good level in all these points. One example, more shipments using sea freight that would reduce our cost of goods by 1%, maybe even 2% or increase the margin on that level. We are not able to do that because we have still hiccups with production, with chip availability. It's a bit last minute. The certifications take longer time. So we did not make big movements there. That's a reserve of 1% or 2% that we will have in -- maybe in 1.5 years and not earlier. We try some things already, but it's not that easy. So on a good way, but still takes some time, and we are not in an over hurry because we do not want to risk revenues, just optimizing the stock. So what we have achieved now, we are super happy and that will continue. So that's some more detailed numbers from the P&L. I don't want to go in all the lines, just 2, 3 things. I already mentioned the EBIT margin effect or the EBIT effect with the adjusted EBIT. There is something similar that we could do. I'm not a big fan of adjustments that always needs too much explanation. Just the EUR 1.6 million are significant and coming from FX that I cannot change. There is another EUR 1.6 million that is coming from revenue effects. If you remember, we have changed contracts with our distributors in the last year -- end of last year for the last quarter. That leads to a different accounting of bonuses and that leads to an effect that is visible in EBIT and -- sorry, in revenue and in the gross margin. If we would take this effect out, make an adjustment for that. So really look at a like-for-like or comparable comparison, our growth rate would not be 29.3%. It would be 33.1% growth. So now we have these changes, so we have to report the 29.3%. But if we would make everything comparable, it's 33.1% growth. Higher marketing costs, sales and marketing costs mainly coming from quite high investments in third-party marketing spend. So for example, our U.K. distributor went to 2 trade shows already with a very big presence of Shelly, making us visible in the U.K. market. That's not paying back immediately. We were on some trade shows in Italy and in other regions of Europe and of the world, did something in Asia. That is now an investment in the future and will hopefully balance a little bit out, but it's not something that is really significant, but it's quite a high investment. The premium app, you see that the premium app in the first half of the year in comparison with first half of the year last year 2024 grew by 145%. That's a really huge jump. I repeat myself, we are doing this in a very careful way because there are not a lot of good examples in the market with successful paid versions of smart home applications. It's really easy to get a s***storm here from customers, and we are not in a hurry, but we see that this takes off. Why is then the revenue only growing 79%? That has 2 reasons. One reason is that all our customers have a free trial period of 3 months. So this will come to the 149% or a lot of the new customers will start paying in 3 months. And the second reason is that a lot of our customers decided to pay once a year, not every month. In the last year, we booked this in the month when they paid. Now this year, we do this in the way as it correctly should be done. We make deferred bookings. So the effect in the revenue and in the EBIT is visible not when the customer pays, but over -- distributed over the 12 months that follow. So that's an effect that is delayed and that will grow over time, but we feel very comfortable with reaching the EUR 1 million revenue. And as you know, most of this is 100% profit in this year and to continue growing in the planned speed in the next year. So that's very positive, and that's one of the first thing where we can monetize money and come to recurring revenue models. Dimitar showed this pipeline already. I will not go into details just to repeat that this supports, of course, our higher revenue growth for Q3 and Q4. Beginning of the year, we already said that Q4, we expect 40% -- sorry, Q3, 40%; Q4, 50%. On top of this, we opened our Polish office in May this year. There are not big effects visible now, but we expect some effects in the second half of the year. We are planning to open in Q3 offices with sales teams in the U.K. and in Benelux and hopefully until the end of the year as well in Iberia, so that we have more people on the ground because we see that this really pays back. We have a couple of challenges, and we have more opportunities. Challenges are more short term. We have some shortages of key components. So one example, there is a U.S. company delivering a chip that is like EUR 0.60 or EUR 0.70, so not significant, but we need it for power metering and they decided beginning of the year with -- of course, without asking us, they decided to reduce their production capacity because of all these ups and downs with tariffs and things that Mr. Trump is doing. Now we are suffering because we wanted to increase our delivery or our orders from them. This is not possible. So we will get not the number of power metering components that we need. That mainly reflects on revenue of one key product that is used from the solar industry, mainly we could easily sell 100,000 pieces more. Average price of this product is EUR 50 to distributors round about. So you can make your mathematics. That's revenue that we will not make this year and that we will compensate with something else. The negative exchange rates that we had beginning of the year, no one really knows where the dollar goes. We try to secure as much as we can but we prepay our devices 3, sometimes 6 months ahead, and we don't know where the dollar stands, but we do not expect that this continues in the second half of the year but that's a challenge. We have a more and more complicated certification process that delays product because being present in Asia, being present in Australia, in the United States, in Canada, in Europe, having Matter certifications. Matter certification is a real headache for us because that they are so slow that delays the processes, that's not something that's really super positive, but we have to live with that. And it increases, of course, the costs. And we have a challenge with one key customer. I mentioned that in the first quarter already. That did not change. That's not that small distributor worldwide active that some of you might know, headquartered in Seattle starts with a big A. We could easily push revenues by opening the doors and saying, yes to everything that they want, but they are hungry like a lion. So they ask more and more and more and more. And we stopped to say yes to everything. So we are in a real dispute. First half of the year, the revenue with this guys reduced enormously. But if -- as you have seen, our revenue grew 30%. So we are compensating all of that or most of that with other channels that are super happy that our products are not that strong in this channel anymore. That is something that we will see where this leads. And it's nothing that we can -- or we could change. We could boost our revenue short term, but long-term midterm, we would have a negative effect. Regional expansion, I already said we need to keep people that we still do not find everywhere, but we feel that we are on a good way. On the opportunity side, midterm something in the second half of the year already. We improve our sourcing and we negotiate better with chip manufacturers and others, and we see first results that will have a positive effect on the gross margin. The exchange rate issue that is, on the one hand side, causing these exchange rate problems, will in the second half of the year payback, with lower cost of goods because we're having 10% lower dollar means we have a huge opportunity here in increasing -- decreasing the COGS and with this increasing our gross margin. That supports the 25% EBIT goal. And we are having the new product categories in the pipeline that Dimitar already mentioned. So like cameras and a couple of other things that will support the growth in the next year, they are on the horizon. We have -- with all the issues we have with this one customer, we have already an improved channel management, and we have clear plans and steps how we will further improve that next year. And that opens a wider range of distributors and that reduces as well as cluster risk that we have with being strong with a couple of customers only that's not good. And experience shows that local people increase the revenue. It always takes -- it has a delay. It always takes a bit. We have seen that in Nordics, putting the team on the ground. At the beginning, growth rates were average of the company or a little bit above. And now it looks like it's really accelerating, and that's all positive signs. So short term, some challenges, midterm, we have more opportunities than challenges, and that's a good sign. So that leads to the summary. We are happy with H1. Revenue is above target. EBIT is on target. And once again, if we would make this adjustment even above target or significantly above target. All regions are growing above the market. We have a significant free cash flow improvement, and that's something that we are really proud. All regions continue to grow above the market. We have some good progress in being stronger in the professional market, seeing that more installers come to our platform. We have a delay in some of the products, some coming from the chip shortage or from other component shortage or from some certifications. But we have a much higher daily activation rate that was the chart that Dimitar showed. And just to make the numbers clear once again, 50% higher daily activation, 30% more revenue in the first quarter. That's a clear sign that products are sold, that the pipelines are not over filled and that gives some positive win for the second half of the year. Premium app above target. And with this, we confirm the '25 and the '26 guidance, some people say we have to increase. We will not. We keep the guidance -- both guidances as they are for the time being. We have measures to optimize the working capital that will continue and will pay back in the next 12, 18 months. New product categories support the growth in '25 and '26. And we have additional product categories that are not yet published that will come soon, hopefully, and that will support especially the development in the professional business. And that is something that currently no one has in Europe and especially not on our price point, there are some individual products, but this will be really mind blowing. So that's all. And now open for your questions.

Thank you very much for the presentation, and we will now move on to the Q&A session. [Operator Instructions] We have a first participant with a question on the audio line, Bastian Brach, you should be able to speak now.

Yes. Thank you, and good morning. So 2 questions for me. In the last few years, you onboarded several country teams, sales and also local management. And you said you see a gradual improvement in, for example, growth rates. And I expect also margins and not only an immediate effect. So just for a better understanding, could you explain the important steps the local teams are doing after being onboarded. So is it mostly on partner side where they are expanding faster than before? Or is it also marketing, which plays an important role? But yes, could you like give us some explanation or indication how that plan is going after you launched several local teams?

Yes, of course. So first, let me explain what local teams mean or local people means. So we started a couple of years ago with having the German office. There, we have a full team for our biggest region. It's now more than 10 people and they do all the local stuff, local training and local language, local marketing, cooperations with magazines, with journalists, with influencers, and that really shows that we can keep the growth rates quite high, although we are on a big level. In other countries, we started to onboard one salesperson like in Italy or in the U.K. In some regions, it failed. So we had to take out the people or change the people. In Nordics, we were quite early with first 1 person, and then we added 3 more: 1 for marketing, technical support and as well for sales. So now the next step is -- and that's what we did in Poland. In Poland, we hired a full team from day 1. So we found a country manager with a very good experience who brought people from his network. And there, we have -- that is a typical setup. So we need a country manager. Then we need 1 more salespeople. So we expect the country manager, of course, to make a lot of sales as well. In such a small team, we need someone for marketing to localize all the marketing materials in the local language. So Polish language is important, especially if we want to go more into the mass market and into the professional market because the professional installers, only a few of them speak good enough English, and they don't want to talk English, if it's about technical stuff. So yes, the engineers and the early adopters and the geeks in the market, they speak English, and they are open to do so. But if you want to have mass market, you need local people. And the same is for technical descriptions, so marketing materials, technical descriptions, installer trainings in the local language. But of course, and that's what happened with the Polish team. They came a couple of weeks after they onboarded with a long list of distributors, where should we be present, how should we do our business. And a lot of these guys, we simply don't know if we sit here in Sofia and think about the Polish market. So they have much more knowledge about the market. Same will happen in the Netherlands and in the U.K. In the U.K., we have a good distributor. We have a good salesperson, but we need a full team. We need someone for marketing handling the corporations. In Germany, we are every day in the newspapers. We are in computer build -- in build, not only computer build as the best plug in the market currently, they make a huge campaign for testing products, and we are in this category, we are one of the leading brands. And that's something where you need local people because as well the journalists don't want to talk English. That's a fact. And that is a step-by-step approach. So now we have 2 people in Italy. We are looking for 1 or 2 more. And we had to change, unfortunately, 1 person in South Europe as well. But that's what people typically do. So they're onboarded. We built a small team, technical support, marketing sales, that's where it starts with because the backbone, of course, will stay here in Sofia and like accounting and all the other things will be done here.

And from a margin perspective, is it like some one-off costs, but ramp-up costs because, of course, local teams, their salaries and maybe some marketing to ramp the efforts up and then a gradual improvement over I don't know, 1 year, 1.5 years...

Of course, Bastian, this is an investment. So we do not expect that we hire 4, 5 -- I think we have 5 people in Poland. 5 people invest something in marketing and the payback comes the next day but we are not very patient in that. So we are not known as a company that invests millions in marketing and in teams and countries, and then we wait 5 years to have the payback. They all know that. And we are not starting at 0. So we are known in Poland. So we did, I don't know, EUR 1 million roundabout in Poland last year with the Polish team on board for 6 months this year, we expect this to grow. And next year and the year after to grow this significantly because the market volume is huge. We had a discussion with our U.K. distributor. And they said that there is no reason why they should not do the revenue that we do in Germany, not in '26, but in '27, '28, '29. So we need to make big jumps. And for this, we need as well the teams that can support that.

Okay. Then on the second question, I have noticed we locked 2 and locked 3 device, which was on your last slide in Q1. It disappeared from the slide. I think that was intentional. So could you talk a little bit about, yes, if you plan to launch it in '26? Or what happened there?

There's so many unlimited space and we cannot put everything. The walk is on track. Yes, we've seen that maybe they will be released very close to the end of the year, end of '25, probably from what we know and how we're doing the first batch when it's coming, it's not the huge one because we want our first to be completely proof from the wide range of the customers, which is, for example, 1,000 or 5,000 pieces. This will not change our numbers significantly. So the significant number change expected after that, which definitely is 2026. So it removed just to that something else. It's still there. It's still on track. It depends on the -- it's so many things, certification or some additional requirements for the chip supplier. Some returning information, feedback from the QA group and external small group or external customers we give us. This could make a delay between 3 to 6 months, for example, just to make the product perfect for the other customers. So it's there, it's just removed from the presentation.

Bastian, you pay a lot of attention in detail. That's amazing. So we had already a small delay in the -- with the current lock because we wanted to sell 4,000 pieces in the last quarter, we did only get 2,500. So they will come later. We see that the supply chain takes longer. It's a mechanical product, mechanical production that takes longer. At the same time, we will show at IFA, the current lock in a version with only 2 seconds opening and closing time. So currently, it makes -- as a lot of the smart locks, it makes a lot of noise like opening like -- and now it will be open, close in 2 seconds. At the same time, as Dimitar said, we need to find some -- we need to get the right certification. And the indication currently is that we will get very small quantities this year and significant quantities next year. So that's why -- and we have not enough space on the chart to put 30 products. That's why we took them off. And it's not something that will be a death or life question. It's...

It's something, just imagine that there's at least 10 products which we hire and doesn't share with nobody because the competition, because we want to keep them as not as a reserve from the investors, but it's something which we cannot show everything. This is a lot of direction which we're working for.

Okay. The lock 1 still is sold by you and you are still producing them, right?

Same producer, just we improved the quality. We changed the display because that was a weak point that was breaking with the old lock that was sold by the company that went in bankruptcy. We have improved the technology a lot. We have integrated it in the Shelly environment. And now we have the new motor that is much faster and much more silent. The current ones that are there are already more silent because the isolation is better. And the next locks that will come, one will be a smaller version of the one that we currently have and one will be a completely new development. So if we are lucky, we will have some revenues this year. If they are too late and shipment takes long, you cannot fly them, they are too heavy. So that's all things that we still have to learn.

And we switch to some questions from the chat box. I'll read it out Tobias is asking. The growth in cloud users is impressive. You have earlier spoken about results from your cloud user survey results were up to 20% user set. They would consider buying premium subscription. How are you thinking about long-term premium penetration rates?

That's a very good question. Learning shows that if you ask customers, are you willing to pay for a service, they all say yes. If then it comes to paying for the service, they changed their minds. So we are not saying that in the next 2 years, we will get 20% of our customers converted into premium customers, that would be too bold. And I repeat myself. If you see the chart, we expect EUR 1 million revenue this year coming from premium application users, EUR 2.5 million next year. And then what comes after is a bit far away, but I think we should double more or less every year. And that leads then to significant numbers in '27, '28 and beyond and not only significant numbers as well to a significant effect in results because that is to a huge proportion profit EBIT directly.

Thank you. And Mr. [indiscernible] is adding, the guidance for H2 is very aggressive given the current results from H1. Can you maybe remind us on the different critical levers to reach the EBIT target beyond higher-margin, new gen products and the onboarded country team in Poland?

It's not -- you can answer.

I think I can answer this. It's a combination. It's not just one. The first thing is the new markets which are opening, especially the Poland team, yes, partially, the Team in United Kingdom, which we are developing now, definitely, partially, the new technologies, the new product lines, which we're working on, as we say the [ walks ] or the cameras especially the very famous products for the -- even for the existing customers as a power strip and the radar technology, the multi-person tracking technology which we develop and to be launched now. As you've seen, the big partially part of the product is coming in the second half of the year, which will help for the revenue. So there is no single stream. There is no single answer. The revenues coming from there. But usually, we know that the second half of the year is stronger. Also, by the way, from distribution perspective, there is also the logic because during the second half of the year when it's stronger, and the new products is coming and also the Black Friday events, the special events around the Christmas, people buying a lot of devices upfront, which is somehow -- and also the distributors buying the [ lots ] of devices upfront, which is somehow affect the second and the first half of the year. For example, we've seen a lot of activations in the January and February in our cloud but this is not mean sales because sales is made 2 months before. And this is somehow related that the second half of the year, the new product is -- the market is much more active for example, the new winter season is coming, the people start looking again for the -- how to optimize the energy consumption. Usually, during this time, the energy price is much higher, which is there is the reason to make more. And the second one is as we see what means 50% activation, 30% more sales. This means that really our distributors' warehouse is slowly going to be not empty, but let's say, with less products and they will compensate this one on the second half of the year. So that's the explanation, and this is something which we've seen for many years and quarters ago, that happens the same.

Yes, nothing to add. Besides that, we planned this from the beginning of the year. So if you look to the February presentation, for last year, we already said we expect an up-ramping growth rates, so higher percentages quarter-over-quarter coming mainly from new products and coming from onboarding of countries and -- or the result of people that have been onboarded before already. So we see a very good development in Italy, for example. And we will see the first results in Poland. We will see the real effect in Poland next year.

And as a follow-up on the consumer behavior. Do you see any higher likelihood for consumers to buy cloud premium if they purchase newer generation products or certain product lines?

I didn't check it. I don't know if Dimitar checked this.

No, I don't -- let's say, for the premium customers, as we told many times, this is not our main target. We're offering them a better deals. We're improving the services which we offer to the premium customers. But this is -- currently still is not our main target. We -- it's -- so -- but all the new products in generation 4 products, it's too early to say because I would tell, for example, for generation 4 with this Matter, ZigBee and everything certification, we have, for example, a significant delay for Shelly 2PM gen 4. It's ready for production in end of March. It's -- and from end of March to beginning of the -- I think, end of June, we're waiting to be certified because this is the first product, the Matter product, which have a dual profiles, I mean this can act as a 2-way relay with a power measurement or cover control, the roller shutter control. So this is not exist and we need to fight. We need to talk. We need to discuss how this can be done. They need to change their own procedure. And all of these times, the products is ready in our warehouse just ready to be distributed to our channels, but -- and waiting this to be sold. So sometimes to be much more advanced, innovative and going much faster than the market in the thinking for the other certification organization people. This is a headache for us because -- and again, there are some delays. So that's a lot of the difference which we do -- a lot of the things which we do. So it's clearly, we cannot say in this or that because it's affected not only just for the -- we had heavy have everything stock and everybody can buy as he want. Sometimes it happens that they buy what we have, not what we know, what they want.

And can you elaborate on you what you think about how the partnership with EcoFlow is going and you're reasoning around the 2 chosen products?

Say it again. I missed the question.

Can you elaborate on -- you think about how the partnership with EcoFlow is going and your reasoning around the 2 chosen products.

Very well. And the reasoning is very simple. One product is the entry product that they use for battery and power stations. And the second product is the high-end product that they use for bigger systems. And the relationship goes very well. They are very happy with us. We are working on a lot of joint marketing activities, and we have a co-branded product. It's the first time we did that. And as I said, we expect in the next months, quarters, others to come to ask for the same. And that's, of course, that's always a question of quantities. We will not do this with everyone with -- for small quantities only if it makes really sense for us.

But also, I want to add that you should not expect to share any kind of details related to the -- how much is the revenue from it -- what exactly we are doing this completely we are not allowed to be able to share and we will not do that.