Shelly, going through the sales channels from a consumer perspective

 

Normally I write in Swedish, but as Shelly is a Bulgarian company with Germany as its largest market and with significant international interest I will write this in English.

For new readers, I recommend translating my annual portfolio summaries. I am active as http://aktieingenjoren.bsky.social/ on Bluesky and @Aktieing on X. Overall X is more active but the signal to noise ratio is better on Bluesky so if you want a more in-depth discussion I recommend commenting here or on Bluesky.

A key factor in my investments is to understand customer behaviour. I focused on this in my first analysis of Shelly (link) as Phantas had already done the quantitative analysis. When doing that analysis, I also made a lot of mental comparisons to Ubiquiti, a US-based technology I invested in and which in 2017 faced significant headwinds in investor sentiment as “exotic” exposure to East European manufacturing eroded investor confidence. Using open source intelligence, I made my own investigation (link) and this will be a similar exercise focusing on the following questions:

• 1      Are Shelly a genuine growth company with tangible sales?
• 2       Is there something going on with the growth in receivables?
• 3.      Do I trust management?

Is Shelly a genuine growth company?

A big advantage with consumer oriented companies is that it is much easier to evaluate their sales channels. For me the number one question as an investor is if I understand the consumer behaviour. For Shelly this means keeping track of success (or lack thereof) on key markets. In the case of Shelly the key markets for monitoring are Germany (Shelly's largest market), Sweden (home of Plejd) and the Netherlands, Finland and Norway as these are markets where both companies are expanding.

If we look at Idealo.de it is clear that Shelly is very successful in in Germany. Browsing through various categories, we see Shelly repeatedly placing themselves among the most popular products with key products being light switches and energy meters.

The Swedish rankings are a bit more frustrating to browse. In Sweden, Shelly is getting a fair amount of traction as an alternative to Plejd dimmers but I think this may actually help them more in other categories by separating them from companies like Aqara and Sonoff. Shelly provides the 6^th  highest ranked product for Smart control units behind Athom, Philips Hue, Plejd, TP-Link Tapo and Aqara. 4^th for smart senders and receivers behind Plejd, SwitchBot and Aqara. 3^rd for smart plugs behind Plejd and Deltaco and 3^rd for dimmers behind Plejd and a single Aqara product.

 

In the Netherlands I’ve used Tweakers.net which is a website for tech oriented people. Shelly got the 2nd and 4th for most viewed in energy measurement devices and is strong across the list, Loqed is the nr 1 most viewed brand for smart locks and Shelly is the most viewed smart plug and second most viewed dimmer switch under switches.

The next two charts require some consideration. In the first one I relied on Search topics with the company names which show what I consider an unrealistic boost in 2025. I suspect that the topics are still too niche for consistent results and that Shelly during 2025 passed some kind of threshold.

 

Taking a more naïve strategy using brand names as search terms generated some more interesting results. Home Assistant is the dominant open source software for smart home applications which makes it an interesting proxy for smart home interest. What we see here is that in Germany, Home Assistant (Yellow) and Shelly follows each other in growth over the last five years. Aqara (red), a widespread international smart home equipment provider got a far lower marker share and Plejd (green) is non-existent. In Sweden, which contains a large population of early adopters there was already at the start of the period a high penetration of Home Assistant while Plejd is the major growth star. There was a short-lived short hype for Shelly in 2023 but market presence has clearly increased again during 2025 both according to the data and my personal experience. What is really interesting is how the Netherlands also show the pattern of being a mature market for Home Assistant. Home assistant is however proportionally far higher than the main brands in Sweden and Germany while Shelly is ahead of Aqara. We also know from public filings that Plejd is growing rapidly from a small user base which investors hope will mirror the pattern we see in Norway.

I also added Finland which has been the market Plejd has struggled the most on and France which is a large country but a straggler in the smart home market. I don’t dare to draw too many conclusions from USA and UK as people may actually be named Shelly but at least we see Home Assistant growing.

So in summary, what we see is that the market for Home Automation is growing with Shelly having a very close correlation with the market in their home market Germany and a significant presence in many other countries.

 

Is there something going on in the trade receivables?

This is going to be very light because I do not have the time to compile the data myself and I think the results will never be other than inconclusive until we get further data. Therefore I used ChatGPT to do my dirty work. The point I focused on was that if we compare the criticism related to the Q4 conference call with the calculations provided online, the the conclusions will always be that the criticism is somewhat overstated but the data is worrying. Wolfgang actually highlighted the higher Days sales outstanding in his initial remarks so it was definitely not covered up. Furthermore, during a follow up question he described the process where they have been too generous with distributors adding a 30-60 day delay on top of the 60-90 day payment terms demanded by large chains like Hornbach and Bauhaus. So there being receivables outstanding for more than 90 days should not be a surprise even if the magnitude can be discussed. The revenue in Q4 2025 was 0.8 times the trade receivables vs 1.16 times in 2024 which is a significant increase. If this is attributable to a combination of changed distribution channels and higher sales we should see this trend stabilising or reversing during H1.

For completeness (and to see if anyone did a similar calculation) I also did this calculation with ChatGPT which may or may not be correct. As the shift in distribution channels provides no clear indication of foul play I will be monitoring this over time.

·         Days inventory outstanding (DIO) = 365 × average inventory / trailing-12-month COGS

·         Days sales outstanding (DSO) = 365 × average trade receivables / trailing-12-month revenue

·         Days payables outstanding (DPO) = 365 × average trade payables / trailing-12-month COGS

·         Cash conversion cycle (CCC) = DIO + DSO − DPO

 

Quarter	DIO	DSO	DPO	CCC
2022 Q4	103.5	86.1	8.8	180.7
2023 Q1	118.6	79.6	11.2	187
2023 Q2	132.8	76.8	18.3	191.3
2023 Q3	134.1	76.7	26.4	184.4
2023 Q4	114.3	76.3	28.5	162.1
2024 Q1	102.6	88.6	27.7	163.4
2024 Q2	98.1	99.2	23.8	173.5
2024 Q3	110.5	105	21.2	194.4
2024 Q4	132.7	102.2	22.2	212.7
2025 Q1	142	106	22.7	225.3
2025 Q2	148.4	110.6	24.5	234.6
2025 Q3	148.3	113.4	27.3	234.4
2025 Q4	124	116.6	27.9	212.7

 

Can we trust the management?

Shelly is still a small engineering led company. Dimitar Dimitrov reminds me of similar passionate fanatics like Robert Pera (Ubiquiti), Vlad Suglobov (G5 Entertainment) and Babak Esfahani (Plejd). In all of them I see very technically proficient leader who see an opportunity, aggressively pursue it and actively avoid being distracted from their main mission. This will from time to time frustrate investors but over time it becomes possible to see whatever they manage capital efficiently enough to create and build products with a superior customer experience.

For me, the pride and transparency Dimitar Dimitrov displays is a key factor when evaluating the company. That a CEO is sitting at a conference call and explains that the new camera will be downgraded from 256 Gb to 128 Gb due to cost increases to RAM says a lot about how he sees value creation in the company. It is technology and customer value that drives the company and which he think a shareholder should care about. Wolfgang Kirsch is a more typical CEO but him being willing to talk about his plans for selling some of the stock after his options have been vested was a surprise. As I see it, the constant stream of information that Shelly provides would make it very difficult for the co-CEOs to lie. I've followed several other investment stories like Fingerprint Cards and Intellego where it was apparent that the CEO adapted his message depending on what he thought was necessary to convince the market. Therefore I think the underlying basis for the receivables is simply that Shelly got enough working capital that they preferred being "generous" on terms over negotiating on price, which matches both the Conference Call and the now released "open questions" document on their website.