Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OVH Groupe (OVHFF, Financial) reported a solid revenue growth of 10.2% like-for-like in H1 FY25, driven by strong demand for public clouds and data sovereignty offers.
- The company achieved a high revenue retention rate of 107% and demonstrated strong international growth.
- Adjusted EBITDA reached EUR214.6 million, representing a 40% margin, showcasing strong operating leverage.
- OVH Groupe (OVHFF) successfully refinanced with a EUR500 million bond maturing in FY31 and a EUR450 million green loan maturing in FY30.
- The company improved its corporate sustainability assessment by Standard & Poor's Global to 51%, ranking in the top 16% of the industry.
Negative Points
- The Web Cloud segment showed slower growth, with only a 2.8% increase like-for-like in H1 FY25, facing a challenging comparison basis.
- The telephony and connectivity legacy sub-segment continues to decline, impacting the overall growth of the Web Cloud segment.
- CapEx reached 36% of revenues, driven by seasonal investments and proactive component supply pushes, which may pressure future cash flows.
- The geopolitical environment poses uncertainties, although OVH Groupe (OVHFF) is well-positioned in the data sovereignty market.
- The company faces competition in the AI and cloud markets, with a need to continuously enhance product offerings to maintain growth momentum.
Q & A Highlights
Q: Can you discuss your outlook for the second half of the year and any signs of emerging weakness in the market?
A: Benjamin Revcolevschi, CEO: We confirm our guidance for FY 2025, expecting like-for-like revenue growth between 9% and 11%. The trends in March and April align with our expectations, and we see no change in our annual trajectory. Our growth engines, including Public Cloud, AI, and data sovereignty, are performing well despite macroeconomic uncertainties.
Q: How are you managing tariffs and supply chains, particularly regarding server manufacturing in Canada for US operations?
A: Stephanie Besnier, CFO: We are a multi-local company, selling through our US subsidiary to US customers, which minimizes tariff impacts on revenue. Our servers manufactured in Canada are not significantly affected by tariffs, so the impact on CapEx is marginal. We continue to monitor the situation closely.
Q: What are your ambitions in the generative AI space, and how do you view the potential ROI from GPU workloads?
A: Benjamin Revcolevschi, CEO: We offer hardware with GPUs and infra software tools, contributing around 2% to public cloud growth in H1. We focus on the inference market rather than training, addressing customer use cases in insurance. We plan to regularly add new GPUs and develop our AI software toolbox to fuel AI and public cloud growth.
Q: Are you seeing any increase in pipeline growth due to geopolitical concerns in Europe?
A: Benjamin Revcolevschi, CEO: The geopolitical context has evolved, but we've been positioned in the data sovereignty market for 25 years. This strategic positioning is now more on the CEO agenda for customers. While projects take time, we focus on enhancing product offerings and building long-term relationships with public and private organizations.
Q: Can you provide insights into the rest of the world revenue growth and the US contribution? Is this growth sustainable?
A: Benjamin Revcolevschi, CEO: We don't disclose specific US growth figures, but the US is included in the rest of the world growth, which has been strong. Most of our US business comes from Private Cloud, particularly in the tech segment. We see this growth as sustainable, given the strong performance in recent quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
