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 9-month financial figures of 2025. I'm delighted to welcome the co-CEOs, Dimitar Dimitrov and Wolfgang Kirsch, who will speak in a moment and guide us through the numbers and the presentation. After the presentation, we will move on to a Q&A session in which you will be allowed to place your question directly to the management. So let's jump straight into the numbers. Mr. Kirsch, the stage is yours.

Yes. Good morning, everyone, and a warm welcome from our side as well from Dimitar Dimitrov and myself. We are happy to present very good numbers for Q3. So a very good outlook as well for 2026. And so let's straight jump to the presentation. As usual, I will make the warm-up. I will give you some highlights as well as the high-level financials, then Dimitar will talk about products today, a little bit more outlook for 2026. And then I will go through the detailed financials quarter-by-quarter as you are used to. Just as a reminder, as usual, what we are doing, we are in home automation. And more and more, we are ready to equip a whole house. So we are not in one of the special segments. We are in safety security. We are more and more and very strong in energy management and see a huge demand there, automation and control and more fancy things will come in the course of the next 12 months. The highlights for 9 months this year, we have sold a total, and that's always the number since we started with Shelly in 2018, where the first Shelly came to the market. We have sold now a total of 28.8 million devices. In the last 12 months, 11 million devices. We are in 2.5 million households. That's a rough estimation. What we know is that we have 2.5 million cloud users. We increased the number of cloud users by 800,000 in the last 12 months. We will come a little bit more to details about activations during Dimitar's part, and we have added around about 1.6 million households in the last 12 months. We see that customers more and more moving to using our cloud and not third-party clouds, and that's as well a very good and positive trend. Some other highlights. Revenue and EBIT in the 9-month period are both above target. We are growing in all regions above the market. We estimate the market growth around 10% to 15%. Typically, we say 15%, but we hear some messages from some regions that it's more like 10% in this year. So not everything is super positive, but we are outperforming the market. And in this case, it's just the question how much are we outperforming the market. As well, a very good development, and that's still an estimation. We will get final numbers beginning of the year. But we always say that our do-it-yourself share is 70% and our professional share is 30%. This year, we see a trend that Pro is growing faster than do-it-yourself. So we estimate the number for this year will be around 65% to 35%, and that's exactly fitting to our strategy to be stronger in the professional market and some of the products that we will launch will support that. We enlarge constantly our distribution channels everywhere in do-it-yourself and in Pro. We have started in 2024, in April 2024, our installer initiative to train installers, to onboard installers. We have installer portals now for our applications. And currently, we have a bit more than 3,000 installers live. And we onboarded in September, a full Benelux team that gives us stronger access to the -- to a very strong smart home region. Cloud activations are growing over proportionally. That gives us more addresses of customers, more possibility to talk directly to our customers. That's one of our key KPIs, and we see an increase as well in the premium app users. To the high-level financials, we have ended the quarter with 86 -- or the 9-month period, sorry, with EUR 86.9 million revenue, which was a growth rate of 33.8%. And once again, with this, we are growing more than twice as fast as the market. If we estimate the market growth at 15%, that's a bit more than 2x. If we estimate the market at 10% growth, it's even 3x the market growth. So very positive development. Our EBIT grew in the 9-month period more than the revenue, 42.7% EBIT growth to EUR 21.9 million. And that gives an EBIT margin in the 9-month period that is a little bit above our midterm target of 25% with 25.2%. Just as a reminder, after 6 months, we were at 22.6%, and we gave an outlook that we see the trend reversing because we had some negative effects from exchange rate from prepayments that we did in the last year or in the first quarter with a different dollar-euro exchange rate, and this is reversing now, so we see some positive trends here, and we'll come to the quarter a little bit later. As well on the cash side, we see that our free cash flow measures are showing positive results. So we are increasing the cash level. I'll come to the cash flow at the end of the presentation as usual. And there is still a lot of room to be better here, but we see that everything that we are doing, we take serious and it shows first effects. And with this, we come to the products, Dimitar.

Thank you very much. Before I talk about the products, I think last time we present you the comparison between the '24 and '25. How is coming because the sales is the one thing. But the second, which is most important, something which is looking for our. How many customers daily installed Shelly devices somewhere in the world. So from what you see, the trend is, it's -- there's a trend during the beginning of the year, there is much more installation than middle of the year is going down. And now it start jumping again. And as you see, we keep the 46% growth of the -- in daily installments. So in numbers, this means something between -- only for the cloud connect devices over 16,000 devices daily is installed somewhere in the world and connected to our cloud. The second one, yes, this is the second one, which is also a comparison. From what we can see, the number of the daily installation is growing from 6.9 to 10,000 devices, something which is important. This is only device connect to our cloud. We know very well that at least 35% to 40% of the devices installed in the houses and they -- which is never connected to our cloud. They connect to third-party system. And this additional -- which additional 5,000 devices daily is for 2025 is not average daily is not visible there. And also the new households, this is the households which is connected to our cloud. There is 1/3 more, which we don't see, but we know that they exist from our distributors, from our groups and channels, we know that there is many houses which we cannot count there. But even that as you can see, 31% of the households, more households on daily is connected to our cloud compared with a year ago. Also, this trend shows something very important that 45% growth of the devices and 31% of the households mean that the customers which start to install Shelly devices, they continuing adding more and more devices in their households, which is the -- this also shows the ability of the devices, the trust of the customers, their satisfaction because they're looking how to install more and more devices in their households. Okay. Something which is important, our application, we continue improving our application. And now it's not just application for the smart home, but also covering towards many things. There is an alarm situation. There is alarms controlling and monitoring over your house, the security, also, it's a huge opportunity about the personalized, remote control, energy management is something which where we're very strong and everybody tells us that the Shelly is #1 for the energy monitoring market, not only for do-it-yourself, but also becoming very strong here for the professional installation and with the solar manufacturers and with the BMS systems and business buildings. What are we looking for the next year? Our -- one of our next trend is the locks. The smart locks, we acquire -- no, we don't acquire. We divide the assets for the Denmark or what?

The Dutch.

Okay, the Dutch company, a year ago and we start manufacturing the locks and improving the technology which we have. The results is significant. It's very good from what we've seen and the feedback from market is very good. But we see the huge opportunity to grow this market and to be one of the strongest competitors and the strongest player on the smart lock market. So the next year, we will upgrade and using our new technology also and add more variants of the locks to cover more use cases for different customers. And this -- we believe that this is one of our main direction for the new devices and the new trend, which we add to the existing portfolio. The second one is the cameras, and this is something very important for us. You know that many customers are asking about it. And also our target is to create the camera, which is fully, help say, it's not just for the monitoring, but it's the part of your home automation. The camera can act as a hub. The camera can control your environment. The camera can listen the environment for the -- and state of the switches, sensors, not only for the building sensors in the cameras, but camera will be one part of the home, the same part of the home, everything integrated as we do. And this will be completely different user experience with the cameras, which compared with any other competitors. And also not only this one, about the quality, about the security, we will provide the camera developed 100% by us. And also our -- will be control from the European cloud and also our customers, same as the other Shelly devices, completely to switch camera to their local solution or their one cloud and to keep security on the highest possible level in their one environment. So this is the camera, the camera is coming. There will be an indoor camera, outdoor camera, the full AI camera, a different price range camera, also we were working to have a door lock based on the camera and also the ring bell camera, ring bell with the built-in camera. So this will be one of our strong directions for the next year. And the third one, something which is very important. Now we are a very well-known brand for the home automation. But we've seen that protection, every house has protection. Every house has the breakers, fuses, which is part, this is the commodity and this must be in every house. What we're looking for this part, what we've seen is a little bit outdated compared with technology. And we successfully just finished the certification of our first breakers, the connected breakers, the breakers which have the same powerful chipset as the other Shelly devices and which we were able to not only to be switched on and off, but also monitor the environment. And in case of the situation, the breakers could protect your home and notify for what reason you switch it off because our power because over consumption because over voltage and to notify what happens in your house. And also like this, we're going one step further because for each of the breaker can monitoring the power consumption. So you do not need to put the dedicated device one of the models which are working with the European manufacturer of the breakers because we don't manufacture the breakers as breakers itself, the protection part. We're working with them to -- for the electronic parts and connectivity, which we build into the breaker. And with this product, we can achieve the protection, communication, connection and everything which is until now is not existing at such a level of integration. And Shelly X, now we can see many products with the Shelly X. We've seen the huge growth this year. At least I think on the screen now is not all the products which we make with powered by Shelly. There is many more which is on the market and it is coming many more which are in the market. I think even with the small delays, to prepare the right platform for our partners. We've seen that the Shelly X is growing rapidly. And next year, we can start presenting some numbers with Shelly X because we believe that, that will start to be a bit important and significant for our revenue. But currently, there is a big satisfaction from the market, a huge demand for the Shelly X and the products which is using our connectivity technology. So this trend is continuing, and this will be our main trend for the next years. We believe that also this will deliver a significant part of the revenue for the next years. And on financial from Wolfgang Kirsch.

Yes. Normally, here, I say now the boring financials come, I would say they are absolutely not boring. This is the chart that you have seen at the very beginning just as a reminder. And now if we go to revenue development quarter-over-quarter, we have now 31 quarters of consecutive growth. That's something that -- that's a boring number for us. That's not boring for the market. That's not boring for our competitors because we know that not a lot of competitors, even in this growing markets are growing every quarter-over-quarter. And you see as well that in this year, the growth rate quarter-by-quarter is accelerating. In the first quarter, we grew 28.9% in the second, 29.6%, just a little bit more in the third quarter, 42%. And in the fourth quarter, we expect a similar growth rate as we have seen in the last quarter. With this, as I mentioned at the beginning, we are significantly above the market growth, especially if you see the last quarter, 42%, that's 3x the market in any case. If the market is somewhere between 10% and 15%, it might be even 4x the market. And that comes, of course, from regional expansion. It comes as well from product expansion, new categories that we already launched. And even though we are a bit late with some of the products, we are outperforming the market everywhere. Now to the EBIT. In the first half of the year, our EBIT margin was 22.6% in the total of the year, 25.2%. And this, of course, comes from a push in Q3 where we had an EBIT margin that is 29.5%. So it's really a significant improve and a significant number above the average that we are targeting for this year and for the next years. So please do not expect that now every quarter will be around 30%. So don't raise the bar. We are super happy with 25%. We know that we have to invest in marketing activities. We know that we have to invest in more organizations in the countries. We need more salespeople. We need more marketing people. So do not expect that this is something that now every quarter is 29%. But you see that we are very stable around the 25%, and this is something that we are quite proud of to finish the quarter with close to 30% EBIT margin, something outstanding. And with this number compared to last year, 9-month period, we were on twice as high EBIT in Q3. So that's a significant number, and we are really happy to be able to present that. Coming to the regions. The DACH region is still around 50% of our business. It was in H1, it was a little bit below the 50%. So that's -- it's moving around the 50% with a stable growth of 38%. And so everything that we are doing there is paying back, looks like. So we are constantly growing and not reaching a level where we could say, oh, this now will be tough to continue growing. So that's the core of our business. The rest of Europe is growing in the 9 months, 15% was a bit more in the first half of the year. So we see a couple of effects where we had very good business in 6 months and then now retailers are selling out. So we expect that this will level out in Q4. Rest of the world is still something that we are not really focusing that is we see that as opportunistic. But we see with doubling the revenue in the first 9 months, a significant growth. We have a very positive development in Asia. Our office in Shenzhen is delivering products not only to other Asian countries, but as well has a positive result in the Chinese market itself, where our products are really appreciated. And normally, we avoid talking about the United States a little bit, but United States had in Q3 the best quarter ever. And we see a very positive outlook. We expect that this continues in Q4. And so we think that we can report some very good news about the United States for the full year. And that is a proof that as well here, we are taking that serious, and we have some very good leads as well that could push us in the next year to a completely different level there. The cash flow, this was always one of the weak spots. So in the first 9 months of this year, operations generated roughly EUR 7 million more cash. As I said at the very beginning, that's something that we really focus on that we look at. On the other hand, we do not want to lose opportunities and potentials in selling. So we still operate with quite a high level of stock as well as a high level of chipsets because we want to take benefits from the chip prices and as well from some shortages that might occur. So we are really safe for the next month to be able to deliver, whereas some others might suffer. But in the next 1 or 2 years, we will continue focusing on that, and we will increase the level of cash flow from operations or decrease our working capital significantly. The negative effects here are EUR 2.6 million investment in R&D developments. And then the other big part is dividend payment of around about EUR 2.4 million, and then the rest is leveling out a little bit up, a little bit down. Cash level of EUR 15.7 million end of September is on a very good level. And on top of this, if we need -- if we would need more financing, which we do not see currently, we have as well a bank line secured with Bulgarian Bank that is EUR 22 million or EUR 23 million that we can take if we need it. But currently, it's no need to take a big amount of that. We use this opportunistically if we do want to exchange lev into euro, that will be different after the euro start in Bulgaria next year. So some details here. I will not go through all the numbers. Just something that I will now say for the last time because after the next -- in the next call, this will be over. We have a change in accounting policies, how to account bonuses of customers. If we would not have this change and continue everything as is before, so if you want a like-for-like comparison, revenues would be EUR 1.8 million higher. That would mean a revenue growth of 36.6% instead of the 33% that we show. And then we always have some movements between gross margin and marketing expense, especially that's something that we cannot avoid. That depends on the contracts that we have with some big customers, how to -- how are we forced to book that. But in general, that has no effect on the bottom line. So everything is under control here, and we think that this trend will continue for the rest of the year. The premium app, premium app users grew in -- compared to 9 months last year grew by almost 100%, so close to double 95% plus. The revenues are a little bit below that trend with 76% plus, and that mainly comes from different booking because if someone buys a 12-month premium account for EUR 35, we have to book this in a deferred way. That means month-over-month for the coming months. We didn't do that in the same period last year. That's why we have some effects. We still expect around about EUR 1 million revenue unchanged for 2025 from the premium app and EUR 2.5 million for next year. And I just repeat what we continuously say, this is something that is on top for us. That's, of course, in the future can be a significant part of our business, and we do a lot for that. But we do this really careful. We don't want to overpush. We don't want to frustrate our customers. Dimitar mentioned that we have more and more customers that are super happy with our application. That is the first step into recurring revenues at a later stage, and we see that trend continuing. The guidance is unchanged. So we still guide between EUR 145 million and EUR 155 million for this year and EUR 200 million next year and the 25% EBIT margin stay as well stable, maybe with a little bit of a chance for this year and for next year to be above that, we will see. In general, I would say we are very comfortable with the current estimation of the analysts that see us somewhere in the middle of the guidance for this year, a little bit below maybe. And for next year, they see us above our own guidance. So we feel comfortable with what all these guys are analyzing. And that's why as well we say we have no need to change the guidance currently. Maybe next year, we can talk about that. That leads to the summary. In 9 months '25, revenue and EBIT are above our targets. We perform in all regions above the market. Repeat the market somewhere between 10% and 15%, maybe a bit below the 15% in this year. We have an outstanding EBIT in Q3. We have a very positive EBIT development in general with 25.2%. We have a solid improvement in free cash flow. That all shows that our measures that we started a year ago pay back. The regional expansion continues. As well here, we are a little bit late. We have onboarded now the Dutch team. During the year, we have onboarded the Polish team. We have a team in Nordics, but we are -- we wanted to have a full team in the U.K. already. We are a bit late with that. but that is all opportunities for Q4 or for the next year. We have as well a small delay in some product developments. We are compensating that and sell more of other products. That's a big chance for next year because the products definitely will come. We have a higher daily cloud activation that is above the revenue. So if the revenue is 33% growth and the cloud activation 45%, that shows that there is no jam in the traffic jam or selling jam in the channels. and that more and more customers use our cloud, that is as well a very positive trend. Number of premium app subscribers is increasing. We confirm the guidance, and I repeat that we are very comfortable with the analysts' expectations. We continue to work on reducing our working capital. On the other hand, we do not want to risk not to make revenue. And so we continue planning with a comfortable level of chipsets so that we are not running at any risk here. New product categories that Dimitar talked about will support the growth in '26 and give some upside potential. Smart circuit breakers that will be available in the market in Q1 next year. For us, it is not only a new product category, it's a very big entrance store into the Pro market. That's one of our key markets for the future that is already increasing from 30% to 35% share. But with the smart circuit breakers, not from one day to another, but over time, we expect that this will have the doors wide open into the distribution for the electricians and in other channels. Anyhow, we see that more and more electricians in more and more regions talk very positively about us. I had a podcast with an energy platform podcast and this guy titled the podcast, Shelly the Darling of the Electricians, which shows that we are no longer seen as a brand that is just for do-it-yourself and for geeks, it's a brand that everyone can use in professional installations and in big buildings, office buildings, and that's as well something that we are very proud of, and that is something that gives a lot of positive push for the future. So that's all. We are now ready for questions, answers and whatever you want to know additionally.

Yes. Thank you very much, and we will now move on to the Q&A session. [Operator Instructions] And Bastian Brach, you should be able to speak now and place your question.

Very good results, guys. So let me have like 2 or 3 questions on that. First, on the EBIT margin, which was really outstanding and much higher than you usually guide for with your 25% in Q3. Of course, we discussed the U.S. dollar weakening and the positive impact on that. But were there any one-offs positive? Or what was the reason for this high EBIT margin in Q3? My second one is on the outlook in 2026. Do you -- yes, expect to open another country office in like other regions where you operate right now? Or will you slow down like the pace from this year where you opened like 3 new offices? And then also on the product road map, especially on the locks and cameras, should we expect a meaningful impact financially already in H1? Or is this more back-end loaded for the year 2026?

Bastian, as usual, a lot of questions. I have to be careful that in my age, I don't forget all the questions before answering them. So the first question, there was no positive one-off. So this was coming from -- some part of this is coming from the dollar-euro exchange rate. Some part of this is coming from some supply chain optimizations. We started shipping the first products, not with air freight, but with train. And we see that this gives significant economies on the logistics side. And we have as well some very fruitful discussions with the chip manufacturers and with the factory about reducing the cost of the goods. So all this has an effect. And if you see as well, we have some cost advantages because we optimized our costs a little bit or did not spend everything that we plan to. So there is no one-off. There is no onetime effect. On the other hand, that's why I wanted to manage a little bit the expectations for the future. Our plan is 25% and not 30%. So there -- if the 30s happen, that's fine, but it's nothing that we plan. We want to invest the money in growth and not invest the money in a better EBIT margin. And for the next quarter or for the current quarter, we know that -- or you know this is the Black Friday quarter, so we have to be aggressive in pricing. We will as well invest a lot in marketing activities in a lot of countries to be visible, not only on our website and on Google, but as well on a lot of events and a lot of promotions in all the countries. So that's why I try to manage expectations a little bit, but we think that we have a positive trend on that. No onetime effect. The second question, I forgot already. Second question was...

On the outlook 2026 on regional expansion and the second one was on the ...

That will continue. And I mentioned during the presentation that we are a little bit late. So we have onboarded Netherlands with 4 people. We have onboarded Poland with 5 people. We have -- in the pipeline, we have Spain and the U.K. with a little delay, but we have identified the leadership teams for both countries, and we will we will start soon. So latest in Q1 next year. And this time, we are 100% sure because we have identified the people. We are looking for someone for France because we had a change there. We had to unfortunately take someone out of our team. And then we are more or less everywhere in Europe. And in Italy, we have 2 people now. We are in process hiring 1 or 2 more. And in Nordics as well, we will expand the team because it's not a country, it's a region. And currently, we have 4 people working there. We need 2 or 3 more to be really present physically as well in Sweden and Norway and Finland a bit more and to localize things more. We see that the localization, especially in professional business pays back. And we see as well that in Nordics, we have a very high success in the professional channel. So if you ask me about the Pro and do-it-yourself mix in Nordics, I would say we are more on 60-40 or maybe 55-45, so 45% share of professionals already. That's really, really a very strong achievement, and that gives a lot of hope for the future. So yes, we will continue, and we will soon have in all big countries or regions like Netherlands is taking care for Benelux. Spain will take care for Iberia, so Spain and Portugal, and then we will have people everywhere on the ground in all our regions.

Yes. about the third question, let me answer for when do we expect the revenue from the new products, especially cameras works, for the -- and the breakers. For me, this is separated. What we could expect for the cameras, we expect to showing some results in the first half of next year. This is because the camera is the pure retail product are the other ones. We can start -- we will continue -- we will be selling them through the existing channels. And also the production cycle is not so sophisticated. So it's the usual [ wine sauce ] we do. There is no third parties -- the additional third parties, which we need to expect something for them. And for cameras, we're expecting to results to happen H1. Probably something, but very limited in the Q1 and much more significant in Q2 next year. Very similar with the locks. For the locks, we're expecting to showing the results in the first half of the year. For the breakers, we will be opposite. Maybe second half of the year, there are 2 reasons. The first one, we just finished certification and production time is quite long for the breakers because a lot of the much more components third parties, especially for the breakers [indiscernible], not the -- no communication controlling part. So we expect the first manufacturer -- the first batch of the breakers to be available to be in the March, the Q1. But it's only the first batch, not the main -- that is not the main quantity, even 100,000, 200,000 is not serious quantity. So after that, we will start selling them. But maybe the peak will be second half of the year, and then we can present something. The second -- why -- yes, the second reason for this one is the breakers coming through different channels. So there is a much more professional installation. Maybe some of the retail customers can buy them, can try them, but it's mainly related to professional installation. Usually, professional channel is a bit late and they react slower to the new products and even the huge interest and demand as we've seen now, we know that this is not coming one to the next day. This will take a time. And this is, yes, for this one, we expect for the breakers to have really results in the second half of the year.

Just to add something to the breakers because it fits to the first question -- the second question. We are now starting hiring dedicated people in the countries where we already have teams that are concentrating only on smart breakers and on the Pro channel. And that, of course, I mean, we still have some time because if the products arrive in March, we will have the preparation in Q1 to have serious talks with the channels. The first feedbacks are very positive. But we will as well invest in people because we know that this is a completely different business than retail business. And one more to the locks. We have updated the lock and we have -- when the year is over, we will have sold around about 10,000 pieces of the existing one with some small upgrades. The lock that will arrive now in December is a new one with -- or it's the same form factor, but will close and open in 2 seconds. So that's absolute state-of-the-art. So not this long movement of the lock anymore. And the other thing is that we found out that production time and preparation time because it's metal parts that takes much longer than we thought at the beginning coming from our plastic world and easier products. And we don't want to make mistakes and compromises. That's why this takes a little bit longer. But next year, we think that we can make a huge jump in revenue with the locks, similar to the cameras.

Okay. One add-on question on the EBIT margin. So yes, if you say no positive one-offs and more like supply chain improvements, this -- yes, sounds like a structural better EBIT margin. And if you want to -- not want to go down, but might aim for 25% again, would you invest this rather in additional marketing or in better pricing or in additional product development? What is your thinking behind that?

No, I think -- let me answer this one. I think it's a mix of the -- everything which we can do. If you see more EBIT then mean that maybe we can do something else. Let's say, it could be a different approach. The new products definitely is coming, but maybe we can speed up the regional expansion, not to waiting a bit because anyhow, as a public company, we need to balance in between the profit, between the investments and everything just to keep the promises and to show the good results and much more predictable results and stability. But it could be a little bit on marketing, but marketing also related, for example, to -- in some countries where we're not present to invest more and to be much more recognizable as a brand we could expand the teams also we can go start working on the verticals, which we're talking every day and every month with the when we can go to the verticals, for example, just with the shading manufacturers or we talk only for the water pump manufacturers because there is a huge business itself, but we need to concentrate to this need the people, this need materials, this need everything. So this is something which we're working for this one in this direction when we see that there is an opportunity to make it further, not to postpone it, for example, for the second half of the year.

Nothings to add.

Well, thank you for your question. And we got some other participants raising their hand, but on the chat box, we got some questions as well. I will read one out for you. What are your thoughts regarding Black Friday or Cyber Monday, now which is a huge event, especially at Amazon. Are you expecting lower Black Friday results this year due to the situation with Amazon? And there are some other questions relating to the current situation to Amazon. Will you release numbers for Black Friday sales like in the past years?

Yes, that's a habit already. So we will release Black Friday results. We will see after Black Friday, how Black Friday was. So far, we were able to compensate whatever we did not sell to Amazon as our numbers prove. And we are well prepared for Black Friday, and we will not change our Amazon policy, if this is one of the follow-up questions. So we see that what we are doing there is very well received from other channels. We are able to compensate. And for us, it's more important to be stronger in other retail channels and Pro channels than to get the last million of revenue done with a desperate movement that we would make. We will not do that. So what is the effect on Amazon -- sorry, on Black Friday in total, I can tell you after Black Friday. We are well prepared, and we expect good numbers. Will this be a huge boost? We will see. On the other hand, we are as well compensating with being stronger in the Pro market. That's a more constant and a straight development and not having these peaks as the Black Friday sales and the retail sales, we will see. So we are still positive with Q4. That's what I said. Otherwise, we would not -- we would have to change our guidance. But we will not do desperate things to make the last euro revenue that we could do.

And also, this is important. Our product is still available with Amazon. They are there through our partner network. They're working with Amazon. The difference is that we are not actively selling as a vendor to Amazon, but there is other ways. And I think at the moment, maybe we've seen some such of the balancing, then Amazon is fine with that. We're fine with that and the product is there. The only which is the big difference is not crazy prices for our products in Amazon, which is important for us. And this is our target from the very beginning to have a much more flat pricing and offers in or around the market, and there do not be somebody which has dropped the price significantly because this causes a huge additional impact and complaints for our other distributors. So don't work with Amazon doesn't think that you cannot buy the products from Amazon. This means that we work on a different procedure, which is for us is much more healthy for the future development of the Shelly products.

Well, thank you very much. And we, therefore, move on to one of the participants raising their hand. Alexander [indiscernible], you should be able to speak now.

Alexander [indiscernible] from [ Weather ] Europe. I have a question regarding also to the Amazon situation. We know that you usually have kind of dependency on 2 major distributors. And in the past 2 years, you managed to broaden your distribution channel. So my question is simple, have you managed to reduce the dependency on ALLNET as well? Or is this Amazon situation has created a further dependency on ALLNET?

ALLNET is our biggest distributor and is our main distributor for the biggest region. So that's why the revenues with ALLNET are growing. But I would not call this dependency because we have a balanced way of working together. So that's not something like if ALLNET tomorrow makes something completely crazy, we would have a problem. So we are working in a very close partnership. And I would say that we are equally depending on each other. So that's a bit different with Amazon. On the other hand, we are working on balancing that out. We have a very strong Italian distributor. We have -- I'm just coming back from a trip to London, where we talked to our main distributor for the U.K., still on a low level with very high expectations for the future. So everyone is -- for the future, everyone is positive about what can happen in the U.K. still this year and in the next year. In the Nordics, we are widely distributed without being depending on someone. So I would say, in general, we are reducing the dependency significantly and not only to Amazon. So balancing this more out over more countries and more distributors, and that's quite a positive trend.

Well, thank you for your question, and we move on to one question out of the chat box. You make reference to an average market growth of 10% to 15%. What companies are you comparing with? And what is the estimate composed of?

Yes. So basically, first, we take market data that is available from Statista and from -- there is a Nordic company called Berg Insights. They publish some numbers, and then you have -- you read newspapers and everyone is talking about this 10% to 15%. Now the other question that is a bit detached from that, what are our competitors? That's a question that comes every now and then. So of course, we have our famous competitor in Nordics in Sweden, Plejd, everyone is talking about Plejd as well because Plejd is as well public listed, whereas other companies are not public listed. In Germany, one of our main competitor in most of the areas where we are in would be Hollymatic, a company that is already 25, 30 years in the business. They are making more revenues than we do. Then we have in heating control, we have Tado. Tado is not public. Hollymatic is not public, so complicated to get some numbers. But whatever we hear from the market, that leads to this number of 10% to 15% and more on the 10% and 15% in this year as it was already end of last year, a little bit below the 15%. But in general, everyone sees as well, Statista sees the market in average growth for the next years on 15%. That's why we have this number. And then there are a lot of players in the market that are smaller, that are not really on our market screen where it's complicated to get data, but we know that a lot of them are not doing well. And we think as well that a lot of them will not exist in the next 2 to 3 years because there will be a consolidation going on, and we plan to lead that consolidation without talking about acquisitions, but some companies simply will not be on the market anymore because they make significant losses, and there is no change of that. And one day, investors will say they don't -- they pull out the money.

Okay. And there's another participant raising his hand, Ben you should be able to speak now and your from Berenberg.

Once again, one for you, Wolfgang. On the competition side, do you see moves from the mass market producers in China regarding their pricing? Or is this, let's say, pretty stable? And the second question would be for Dimitar and the impressive product pipeline. Do you still believe that your development team is large and strong enough? Or is there need to ramp that up to also have, let's say, new developments for the years beyond 2026?

So first question, and I look as well to Dimitar, we don't see aggressive movements from Chinese competitors. We see that the typical players are in the market like SwitchBot and Sonoff and Tado sorry, Tado, TP-Link. And there is no big movement from their side. We see other players coming to the market like IKEA just announced that they will be strong in bulbs, which is not one of our core competencies. Currently, we don't have bulbs. So very simple product. So we don't see a big threat coming from there. But what we see is that -- and of course, we talk to some of these competitors that obviously, no one is really happy with the profit. So somehow, we have found the formula with excellent products with a very good reputation at low prices, competitive prices and an excellent quality that a lot of other companies have problems to follow. So that is our -- one of our big differentiator. And so we do not see a threat coming from this angle currently. And we do not see much lower prices coming from China besides the fact that we are -- we saw the gap to Chinese competitors shrinking in the last years because they increased the prices, and we did not. So there is no big trouble coming from this area. So now about R&D.

About me. Okay, in general, developers is never enough. So that's in general. If there is 1,000 here, believe me, I can found a job for every -- every one of them, and we can speed up like crazy development in different areas, verticals, helping other people. But this is the first one, organization needs to be -- must to be ready for such a rapid growth. The next one, the AI is here and even the AI is still not capable to do nothing alone, but this is the good right hand for our existing developers to speed up a little bit the process coding, helping them to solve some issues. Yes, we will continue hiring 2 developers from the hardware side, from the software side, but nothing significant. I think for the next year is additional 40, 50 people. If there is some huge opportunity, which we need to follow, then we can look for more people. But I think this is something quite a stable growth as we do this year, especially from the development side.

And there is one question in our chat. How is your outlook for the U.S. market for 2026? Will you be focusing more on expanding in the U.S. market? And how important would be Amazon in that case?

I thought I have answered this during the presentation because I said we might have some very positive news beginning of the year when we talk about the full year 2025. So U.S. market is growing overproportionally or we are growing overproportionally in the United States or in North and South America. So that's quite positive. We have a couple of very interesting talks and negotiations going on with some key retailers. That could really be an accelerator. But even without that, we see a very positive trend. But it's a bit too early now to talk individually about the United States. Let us do that next year and see how this year finishes. It looks much better than it looked a couple of months or a year ago.

And there's also a couple of new products which is coming, especially for U.S., which is the different price segments in different categories, mainly plug-and-play categories because for U.S., we will not have so many plug-and-play products here on the affordable pricing. Now we're targeting this segment, but it's too early to know. There's some kind of experiments and we can -- we have a plan, but really, it's hard to stay behind some concrete numbers.

It's a bit too early. So we see light at the end of the famous tunnel. And we hope that this is not the train that is coming in our direction. That's really the end of the tunnel. And on the other hand, there was a question about Amazon. We are on Amazon Marketplace. So we control the pricing on Amazon 100%. But in this year, especially, we see a much faster growth on our own website compared to the growth that we have on Amazon. We see as well a very nice development on still a very small level in the B2B segment in the U.S. market. And as I already said, we are in discussion with a U.S. distributor that is very strong in a couple of U.S. retail chains, and we have sent them samples. They have discussed this with their customers. That looks very positive now, but still not signed, and that's why I don't want to create too much imagination here and fantasies about what will go on in the U.S. next year. We try to manage a little bit expectations as well on this side.