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Shape Robotics (SHAPE) reported its Q2 2025 earnings, showing a mixed performance with a notable decline in stock value. The company’s earnings per share (EPS) came in at $0.16, while revenue reached approximately $59.97 million. According to InvestingPro analysis, the company currently appears undervalued, with a "FAIR" overall financial health score of 2.29 out of 5. Despite strategic investments and innovation, the market reacted negatively, with the stock dropping by 11.33% during the trading session, closing at $15.34, down from $17.30.
Key Takeaways
- Shape Robotics reported a decline in stock price by 11.33% following earnings release.
- Q2 revenue showed a decrease, but a strategic focus on service revenue is underway.
- The company is positioning for a stronger performance in Q4, traditionally its strongest quarter.
- Integrated AI-powered educational technology remains a core focus.
Company Performance
Shape Robotics faced a challenging Q2 as revenue decreased compared to previous quarters. The company is shifting its strategy towards increasing service revenue and improving contribution margins. Despite the top-line revenue reduction, Shape Robotics reported positive bottom-line performance, partly due to new financing facilities and strategic investments in operating cash flow.
Financial Highlights
- Revenue: $59.97 million, reflecting a decrease from previous periods.
- Earnings per share: $0.16, with a significant market reaction.
- Operating cash flow investments: €47 million.
- New financing: €8.8 million from UniCredit.
Earnings vs. Forecast
Shape Robotics’ EPS of $0.16 was reported without specific forecast comparison, but the market’s reaction suggests the results may have fallen short of investor expectations. The stock’s 11.33% drop highlights the market’s disappointment.
Market Reaction
The immediate market reaction saw Shape Robotics’ stock price fall by 11.33%, closing at $15.34. This decline places the stock closer to its 52-week low of $8.85, significantly below the 52-week high of $26.90. The market sentiment appears cautious, reflecting concerns over the company’s revenue decline and strategic shifts.
Outlook & Guidance
Looking forward, Shape Robotics remains focused on achieving 1 billion crowns in sales by 2027, with a target EBITDA margin of 10-12%. The company is expanding its Future Labs Project in Poland and collaborating with the Hanoi Ministry of Education and Training. Despite the current challenges, the company is optimistic about its strategic initiatives.
Executive Commentary
CEO David Holberg emphasized a holistic approach to education, stating, "We are talking about a holistic approach... which combines technology with teaching skills." He also highlighted the company’s strategic positioning: "The present is the sum of past events. The future is the sum of present events."
Risks and Challenges
- Revenue Decline: Continued pressure on top-line growth could impact investor confidence.
- Market Competition: The educational technology sector is competitive, with varying price-to-sales ratios.
- Strategic Execution: Successful integration of acquisitions and pivot towards service revenue are critical.
- Economic Conditions: Macroeconomic factors could influence educational spending.
Q&A
During the earnings call, analysts raised questions about cash flow and revenue strategies. Management confirmed no plans to issue new shares and explained their project-based financing strategy. The company expressed confidence in achieving its long-term goals despite current market challenges.
Full transcript - Shape Robotics AS (SHAPE) Q2 2025:
David Holberg, CEO or Senior Executive, Shape Robotics: I’m just going to wait a couple of minutes, as usual, to have people connecting. Hopefully, this will start soon.
Speaker 0: solutions and strengthen our position in the EdTech market.
David Holberg, CEO or Senior Executive, Shape Robotics: It’s also good now. Thank you, everybody. OK, as usual, I will start with a list of questions that have been addressed to us in the last two weeks almost. This is related mostly with the quarter, with the half-year report, basically, the second quarter of the year. First question. This was a question that was addressed to us regarding the price-to-sales ratio of our share. Basically, our esteemed investors are wondering whether our P/N/S ratio of 0.94 is significantly below industry market standard, where EdTech companies average at 1.0 times X revenue multiplies, and that the educational technology companies have a typical range between 1.6 to 11.5, depending on the niche they operate into. Yes, we understand that, like you always, that it’s quite difficult to discuss about the share price.
We can discuss about, fundamentally, the fact that we are considered to be underevaluated when we are taking into consideration other similar companies, which, in the end, we believe that we will be able to close this gap very rapidly, as investors will discover also the impact of our AI-powered TechDucator ecosystem and the way it will impact our numbers in the next quarters to come. It should be quite a thrilling upside coming from now on. Another question was regarding potential, let’s say, question marks regarding the price, the decrease in the total revenue in the second quarter. As I have explained, I think in the last two or three sessions, our main focus was to try to better position our company when it comes to recurrent revenue streams and to better enhance our service solution, our services solution. Our main focus was to increase also the contribution margin.
Therefore, what we see now is a consolidation in the line of what we have promised. We believe that this is the right way for the company to move forward. Although we saw, let’s say, a decrease in the top-line revenue, this is also linked to the fact that we have been operating in the second quarter of the year, where we also have months of vacation, where it’s quite difficult to forecast very well. What I can say is that we are very happy with the achievements when it comes to the contribution margin and a positive bottom line. The strategic pivot towards the service revenue is quite clear for us. This is very well explained, and it shows a very clear direction in the second quarter. Another question, in the meantime, I don’t see anything coming necessarily on the stream.
Let me just check also there if there are any live Q&A sessions. Please feel free to comment or to add more on that topic. I don’t see anything. Did my colleagues see anything? No, right now, there’s nothing new. One of the most important questions I can see was regarding the fact that the cash flow is still continuing to be an issue from the perspective of the investors. I would say that it’s a sign of clear strategy and progress from our point of view because, although, let’s say, the €47 million operating cash flow investments that appear on our second quarter report, so on H2 also, they represent strategic working capital invested to target the second part of the year, where we have already been proving ourselves as extremely competitive. Everybody here knows that our last quarter of the year usually is the most important quarter.
Therefore, with the €8.8 million facilities that we have expanded through our agreement with the UniCredit financing solutions, we are fully capitalized to deliver the second part of the year. I think that this temporary cash flow timing actually demonstrates our management’s confidence into the second part of the year, which is the one that usually brings the higher numbers. I would say that this is a proof, from my point of view and from how we see it in the company, of our ambitious growth trajectory and the way we are looking forward to receiving the orders and implementing them. Some of them have been already announced. That also keeps us very well positioned to reach our guidance.
If you just change the perspective on how to look at this, it is normal that we have this increase into the stocks and investments in stocks and working capital is designed in such a way to be able to leverage because we have between 90 and 120 days delivery terms for certain projects. This is exactly in line with our strategic growth ambitions. Another question? Other questions, sorry for using a plural. What differentiates Shape Robotics from competitors and justifies a premium valuation? It is presented many times in different ways what we believe that our company offers as a unique approach to the market. This is the way we are designing this holistic approach to education.
Basically, right now, also after the integration with Sanako, that has been finalized successfully in a very, let’s say, in a record time, I would say, when the transaction just took place some months ago. It’s already functional and already has started to bear fruits by our deliveries that were announced to the market for the Vietnamese project. We kind of closed the loop on the whole ecosystem of products that we are able to deliver into a fully integrated learning environment. We are talking about a holistic approach. We are talking about an integrated approach, which is unique to the environment of STEAM education. Many companies sell parts or promote parts of this ecosystem.
None of them look at this from an integrated standpoint, which combines technology with teaching skills, with educational, with the trainer skills in this set by educating our teachers to also utilize and adopt very fast the technologies. At the moment, this is also recognized by Times Magazine. We have been growing quite fast. We have been positioning ourselves as a premium educational company, especially from this strategic approach to the market. Another question was, how do we strengthen the acquisition targets and if we focus on more acquisitions in the years to come? As I have explained in the earlier question, our strategic focus on building overwhelming market leadership includes acquisition of other companies. It’s not a strategic approach to buy other companies per se.
When we develop an educational system and we identify partners that are in line with our policies and our philosophies and the way we think about education, it is usually coming very natural. Our decisions of joining forces in acquisition, I think it’s a little bit too much when we say we merge with these companies because we need to expand our technology and to expand our technology pool in a meaningful way. We are focusing on keeping the level of quality of our services and projects. This is the way we find these partnerships. It’s not something that we start as a strategy that we have to go next year and buy company Y and so on and so forth. We are looking very actively to opportunities of expanding our product ecosystem. That’s why I think that our company has become quite good at integrating new teams.
We say that everybody that joins through an acquisition is founder of a new Shape Robotics company. It is an optionality for us to do that. It was, of course, using shares to do this. It’s quite intriguing. It’s quite complicated. It’s also a confirmation that we have similar companies with similar ideas, similar backgrounds that are willing to invest into our brand and story. I see it as investment from our peers into Shape Robotics, the way we do these acquisitions. Going forward with questions regarding what upcoming catalysts should investors expect in the second half of the year and 2026? We have always explained in our strategic outlook for year 2027 that our main focus and priority was to repeat the success story of the SmartLab in Romania. In Poland, as a first important target and milestone for us.
As everybody is aware already, we have announced the fact that we have struck a strategic alignment with one of the most important integrators in the region in order to prepare ourselves with the existing current project in Poland. The current project in Poland is very similar to the SmartLab. It’s an expansion of a project that was started four or five years ago. This project was delivered integrally by our daughter company, Shape Robotics Poland, that was named at that time Skriwer. This is the way we have found Skriwer to be a competitive player in the market. They are the ones that have won and implemented the first SmartLabs. It’s not called SmartLab. I’m just explaining for our viewers because they know very well the history of Shape Robotics. It’s called Future Labs Project. It’s very similar to what was in Romania, the SmartLab project.
As explained, Skriwer was the company that did the first phase of this project. Now, we are in a pole position to continue this expansion when this second phase of the project was already released on the market with an expected implementation date no later than the second part of this year, which is most likely Q4. This is basically a very short, brief explanation on how we position ourselves in the short-term, mid-term sales strategy. Also, it was quite well-received. For us, it’s a very big honor to be able to sign an agreement with the Ministry of Education and Training in Hanoi, part of the Ministry of Education and Training of Vietnam, where we have started this strategic project with the Tinker product, including the STEAM Lab solution with the Sanako Connect implementation of the STEAM Lab solution that we have developed together with Sanako.
This is a very important proof of concept that will help us consolidate our position there. We already prepare ourselves for the next years to come into delivering in other markets where projects are only in an inception phase compared to what is happening today in the Recovery and Resilience Plan in Europe. At this moment, I don’t see any other questions that I should answer from the list that I have received. I will leave the list now and focus on questions that we receive live. Let’s see whether there’s something that I have missed. Nothing at this moment. I will leave the chat open, the live open, for the next couple of minutes just to make sure that everybody has time to put questions in the live stream.
I will answer also to one of the questions that I want to make sure that everybody, this was not officially addressed in the Q&A section of this video. It is something that I have also been interviewed with in Borsen. It is a question related to the fact that our strategy, as the investors see it, should include raising capital from the market. I currently have expressed the strategic conviction that we are not going to issue new shares. We are not going to raise capital from the market.
We believe that our position in the different regions of Shape Robotics’ existence today, which is Finland, Denmark, Poland, of course, Romania, with its sister company, Shape Robotics Moldova, allows us to find efficient financing solutions because we are talking mostly about project-based financing that should not put us in a position to raise capital from the market for maintaining a positive or for reaching a positive cash flow in the short term. We have plenty of solutions available using banking, private investments, and so on and so forth to keep the shareholders as non-diluted as possible. At this moment, there is no discussion about this. How confident, David Holberg? Hello, David. How confident are you that Shape Robotics will achieve the stated goal of 1 billion crowns in sales in 2027 and 10% to 12% EBITDA margin?
I’m confident that whatever we have promised till now, we have delivered, David. Therefore, as we all say, the present is the sum of past events. The future is the sum of present events. Therefore, if the present looks good, also the outlook is on target. That’s what I have to comment. I believe that is a fair response to your question. Somebody has raised a thumb up. I don’t know who. I think it’s also David. Anything else? Any other questions that we should address now? Also, feel free. I have to explain something. It’s very important. Even if you don’t see this Q&A live and you see it recorded, there is no problem to continue to ask these questions. I really appreciate the fact that other investors have not had the opportunity to connect live, and they have sent questions afterwards.
We have the opportunity to answer those questions also in chat, so everybody has time to see the responses and to better understand what is going on. I also am following closely the community discussions that appear on other portals, for instance, on Nordnet, on ShareVille, where people are discussing different things about our company and the future. I’m more than happy to have them join here and to be able to answer directly some of these questions, even if this is done offline, not necessarily in a live event. This concludes the session for the moment. I really appreciate taking your time. I think we have more than 30 people connected live right now that are raising questions or have raised questions.
If anything should appear in the meantime, I’m here, and for sure, I will be answering to anything that is important for you to know about Shape Robotics’ present and future. Thank you very much for everything, and have a very good evening.
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