Earnings call transcript: Shape Robotics sees stock surge after Q1 2025 results

Shape Robotics (SHAPE), with a market capitalization of $40.74 million, reported impressive financial results for the first quarter of 2025, with significant revenue growth and a notable increase in adjusted EBITDA. The company’s stock surged 27.53% following the announcement, reflecting positive investor sentiment. According to InvestingPro analysis, the stock is currently undervalued based on its Fair Value model. Shape Robotics continues to expand its market presence, driven by its innovative educational technology solutions.

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Key Takeaways

• Shape Robotics’ Q1 2025 revenue doubled year-over-year, reaching 70 million Danish crowns.
• The company’s stock price increased by 27.53% after the earnings release.
• Shape Robotics is expanding operations in Eastern Europe and exploring new partnerships in Asia and the Middle East.

Company Performance

Shape Robotics delivered robust performance in Q1 2025, with revenue reaching 69.8 million Danish crowns, a 100% increase compared to the same period last year. This growth builds on the company’s impressive 76.3% revenue increase over the last twelve months. The company’s strategic focus on educational technology, particularly through its TechDucator concept and FABLE robot, has driven significant growth. Over 25,000 FABLE units have been sold globally, and the company has equipped more than 2,000 schools with its products, though InvestingPro data shows the company is still working toward consistent profitability.

Financial Highlights

• Revenue: 69.8 million Danish crowns (up 100% YoY)
• Contribution Margin: 23.5 million Danish crowns (up from 7.6 million Danish crowns YoY)
• Adjusted EBITDA: 10 million Danish crowns (up 250% YoY)

Market Reaction

Following the release of its Q1 2025 results, Shape Robotics’ stock price surged by 27.53%, closing at a price significantly higher than its previous close. The positive stock movement reflects strong investor confidence in the company’s growth trajectory and its strategic initiatives in the educational technology sector.

Outlook & Guidance

Looking ahead, Shape Robotics has projected a revenue range of 360 to 410 million Danish crowns for the full year 2025, indicating 20-35% growth. The company expects an adjusted EBITDA margin of at least 10%, translating to 36-41 million Danish crowns. Shape Robotics is also targeting expansion in Poland and securing additional financing to support its growth initiatives.

Executive Commentary

CEO Mark Abraham expressed optimism about the company’s future, stating, "We had an exceptional start for the year 2025, building on the momentum from a record Q4 last year." He emphasized the importance of high-margin service revenue, declaring, "High margin service revenue are the future for our company." Abraham also highlighted Shape Robotics’ commitment to global STEAM innovation, saying, "We are very optimistic about the future of Shape Robotics as we continue to broaden our impact on global steam innovation."

Risks and Challenges

• Supply chain disruptions could impact the company’s ability to meet product demand.
• Competitive pressures in the educational technology market may affect market share.
• Economic uncertainties in key markets could influence revenue growth.

Shape Robotics’ strong Q1 2025 results and strategic initiatives position the company well for continued growth in the educational technology sector. As the company expands its global footprint and explores new partnerships, it remains focused on delivering innovative solutions to its customers.

Full transcript - Shape Robotics AS (SHAPE) Q1 2025:

Mark Abraham, CEO, Shape Robotics: Hello, everyone. I’m Mark Abraham, CEO of Shape Robotics, and I would like to welcome you for our presentation of Shape Robotics interim report for the first quarter of twenty twenty five. We’re excited to share with you our strong start to the year. Some key takeaways and the financial highlights. We had an exceptional start for the year 2025, building on the momentum from a record q four last year.

In quarter one, we achieved our best last twelve months result in the history of Shape Robotics, including a revenue of 337,000,000 Danish crowns. Key takeaways from this quarter include a 100% increase in revenue to 70,000,000 Danish crowns in q one. Out of this 70,000,000, 50 million comes out of services revenue. A high contribution margin of 34% and a BDA of 10,000,000 Danish crowns. We have also achieved a positive cash flow from our combined operating and investing activities, and we are proud to be named in top 30 tech companies worldwide.

Our growth has been driven by continued expansion in Romania and the increasing adoption of our TechDucator concept. The Tinker order secured under our Lenovo TPO partnership and our solid start to the year position us well to achieve our full year guidance. Now let’s delve deeper into our quarter one financial highlights. The revenue. We have reached 70,000,000 crowns, a 100% year over year increase.

This growth was primarily driven by our expanding operation in Romania, especially to the SmartLET project and sales of services related to new Tech Duquette concept. Comparing quarter one revenue ’25 to quarter one twenty four, we see an increase from 34,900,000.0 crowns to 69,800,000.0 crowns. Our last twelve months revenue now stands at an impressive 336,700,000.0 krones. Our contribution margin increased by 211% year over year to 24,000,000 Danish krones. This gives us a strong contribution margin ratio of 34%.

High margin service revenue are the future for our company, which represent now a 21% of the total revenue. The quarter one twenty twenty five contribution margin of 23,500,000.0 crowns is a significant jump from 7,600,000.0 crowns in the same period of last year. Our last twelve months contribution margin is also 113,800,000.0 crowns. Looking at the adjusted EBITDA, we have an increase of 250% year over year to 10,000,000 crowns. Important, no non recurring costs were recognized to adjust this quarter’s EBITDA.

This was driven by revenue growth, contribution margin, and cost optimization activities. Now looking strictly at quarter one twenty twenty five, the adjusted EBITDA was 10,400,000.0 crowns compared to a negative 7,000,000 crowns of last year. But the most important is looking at the last twelve months adjusted EBITDA, we have a strong 42,200,000.0 crowns. Looking at the financial guidance of 2025. Looking ahead, we are confident in our 2025 guidance.

We project reported revenue growth of 20 to 35% targeting between 360 to 410,000,000 Danish kroner. But our actual q one shows a growth of 100%. Sixty nine point eight million Danish kroner puts us exactly on the trajectory explained before. We expect an adjusted EBITDA margin of at least 10%, translating to a minimum of 36 to 41,000,000 Danish crowns. Quarter 1 was actually 15%, way above target.

Our EBITDA margin is guided to be a minimum of 8% or at least 29 to 33,000,000 crowns. Q 1 was actually 15%. Our general assumptions for this guidance include Poland becoming a significant revenue contributor, securing financing to enable continued ambitious growth, maintaining a contribution margin in the range of 29% to 32%, and decreasing operational costs in relation to revenue compared to the year 2024. Now let’s look at some exciting business updates. In quarter one, we received the first order of at least 50 implants valued at €1,500,000 through our Lenovo TPO partnership.

This opens a completely new avenue for distribution and growth for our company. Also, we have announced last year a cost cutting program started in fiscal year twenty four that already is showing very positive results on cash flow and operating expenses. We expect a run rate saving of minimum 12,000,000 Danish crowns to the full year ’25. Post quarter one developments include, first, a new pilot agreement in Vietnam with the Department of Education in Hanoi meant to equip 20 public schools with our Tinker mobile inclusive SteamLab solution. We also are targeting a new partnership in The Middle East with Adowa Allah Shammel, a leading technological retail company based in Riyadh, targeting the huge potential of Kingdom Of Saudi Arabia.

Revenue composition. Let’s look at the revenue composition for quarter one twenty twenty five, divided it in services with a high margin, about 21% of our revenue, Steam solution, 61%, and Fable robots, 11%. The others have decreased decreased to 7%. Key points on quarter one twenty twenty five. Our TechDucator service revenue reached 14,500,000.0 crowns, which is a 21% total of the revenue.

Sales of Fable also increased in quarter one twenty twenty five with 2% from quarter one twenty twenty four. We also saw significant deliveries to smart level equipment in Romania. This in total made us achieve a contribution margin of 34%. Now comparing this quarter to last year, paper robots were only 2% last year, steam solutions 70%, and services was not even there. Other category was close to 28%.

So the contribution margin in first quarter of twenty twenty four was only 22%. If we are to look in a comparison to the last year 2024, the tech educator services were in only 7% of the revenue at twenty two point six million crowns. Favorable was at eight, Steam Solutions in 70, and others to 15%. Twelve point five % of revenue in the first year twenty twenty four came from outside Romania and was a contribution margin of 13%. Looking at the financial position.

Our solid financial performance in quarter one, and increasing net working capital and comprehensive financing from Uniqlo Bank reflect our ability to support expected revenue growth with improved profitability in the year 2025. The net working capital stood at 190,000,000 Danish kroner as of March 2025, up from 89,000,000 last year. We are on track for our expected revenue growth of 20 to 35% for the year 2025 with improved EBITDA profitability, and we also have secured a comprehensive financing and banking facility from Monitrade like it was announced at the end of last year. Our announced cost cutting program is also progressing very well with an initial positive effect seen in quarters one cash flow. We expect a run rate saving to meet our exceeded and communicating guidance between 12 and 50,000,000 Danish kroner for the full year ’25.

We also remain committed to ongoing working capital optimization. Now let’s look at the investment highlights. Summarizing, we provide intelligent classroom solutions and outstanding educational ecosystems, having equipped more than 2,000 schools with our products. Our FABLE robot is the most famous modular educational robot with more than 25,000 units sold worldwide. We are continuously developing products to scale our business, including a new solution.

And we have a strong partnership with world renowned brands, including Lenovo’s third party offering. Our strong growth journey is fueled by three cross border acquisitions in Poland, Romania, and, of course, the opening of our greenfield company, Shape Robotics Moldova. We operate in a worldwide market with a high demand on educational product and a €13,000,000,000 budget estimated from the EU for digitalization of schools and learning and education by the year 2027. To conclude, looking at the investor information, please bear in mind the financial calendar. Our interim report for quarter two twenty twenty five will be released in August 27.

The interim report for quarter three twenty twenty five is scheduled for November 21. As usual, as custom for us, I will also want to invite you to a live streaming q and a session that I will be hosting on LinkedIn on May 29, starting 5PM. I’ll be answering questions about quarter one interim report, and you can access the session directly on the company’s LinkedIn page. Now thank you for your time and attention. We are very optimistic about the future of Shape Robotics as we continue to broaden our impact on global steam innovation.

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