Ovh Groupe

Ladies and gentlemen, welcome to the OVHcloud quarter one for your 2025 revenue. Today's speaker will be Benjamin Refkoleksky, the CEO, and Stephanie Besnia, the CFO. I now hand over to OVH team to begin today's conference. Thank you.

Hello, everyone. I'm Benjamin Refkoleksky, the CEO of OVHcloud. So thanks very much for being with us today for our Q1 FY25 revenue conference call. and we would like to wish you a very happy new year for 2025. So let's start with slide three for the key highlights of our Q1 FY25. So as key highlights for the Q1 FY25 publication, we generated €264 million in revenue. We had a solid start of the year with a like-for-like revenue growth of plus 10.1%. compared to last year. And this is on track with our FY25 revenue guidance of 9% to 11%. We also confirm all of our FY25 guidance. And as you can see on the right-hand side of this slide, this solid first quarter growth of 10.1% is driven by an acceleration in public cloud at 15.8%, like for that growth, a robust performance in private clouds at 10.2% like-for-like growth, and a high revenue retention rate at 109%, demonstrating strong client stickiness. Finally, we are pleased to announce the success of our public share buyback offer, which was fully subscribed, enabling us to realign our shareholder base with the company's new development phase. So let's move to slide four and the pillars of our new development phase. I wanted to give you an update on our vision for OVHcloud. OVHcloud has succeeded in building up strong core business fundamentals and we will continue to leverage them to deliver our two priorities. First, on the left, we are now focusing on operational efficiency of our fundamentals to grow revenue and to leverage productivity. And this will help us to deliver more predictable and profitable growth. Our second focus is to improve structurally our cash generation. It's critical to our long-term success as it ensures a capacity to continue to invest and innovate. Then, we are strengthening two of our future revenue growth upsides. First, we'll continue to reinforce our position as a global player in data sovereignty solutions. You know that there are growing concerns around data privacy and security, and we are committed to provide our customers with trusted cloud solutions. The second upside is about enhancing our public cloud product offering to answer customer growing needs. As an example, we'll continue to strengthen our AI solutions, which are highly demanded by customers. So these two priorities and these two growth upsides are the pillars of our vision for OVHcloud to deliver on our financial targets. And let's move now to the next slide to highlight business achievements of Q1 FY25. Indeed, I would like to share with you some of the latest developments that we achieved in Q1 2025. Firstly, as you can see on the left-hand side, we are excited to keep developing our AI offerings to provide our customers with the computing power and the solutions they need to build, deploy, and manage their AI workloads. To illustrate this, we have taken two examples. OVHNAB has supported the digital services company Soprasteria in the deployment of its engineering platform by providing GPUs and platform-as-a-service path solutions, including our AI deploy solution. Another example is Jalios, a French player in the digital workplace field, which recently developed its collaborative platform by adding AI tools such as writing assistance, document summarization, and the creation of agents based on OVHcloud's AI endpoint solution. Then, as you can see on the right-hand side of the slide, to drive international growth and to meet the regional demand, we keep expanding our global footprint. We'll open a new 3AZ cloud region in Italy, in Milan, by the end of calendar 2025. And this region will offer to our customers a presence in three geographically closed data centers that we call availability zones, so that they can benefit from high resilience and low latency between the three data centers. And this offering will be developed to fuel public cloud growth. In parallel, to support also our edge strategy, In Q1, we have continued to open local zones across Europe and the United States, bringing now that number to 17. And local zones are the small data centers in co-location mode to grow public cloud in new geographies with a lowered capital intensity while providing low latency services with full control over data residency to customers around the world. You see, with these latest developments, we are continuing to deliver in line with our strategic plan to offer innovative offerings to our customers globally. Let me now turn to slide six for a deep dive on each of our business segments where we will concentrate the presentation on life-or-life figures. Firstly, on the private cloud segments, which includes bar metal cloud and hosted private cloud. we have delivered 164.5 million euros in revenue in Q1 FY25, which represents 62% of the group's revenue. We delivered a double-digit life-for-life growth at 10.2% compared to last year, fueled mainly by strong demand in the United States. As highlighted on the right-hand side of this slide in barbed metal clouds, The customer acquisition trend remains good, thanks to the ramp-up of a new range of servers launched in Q1 FY 2025, and also a successful digital Black Friday campaign. Geographically, we're seeing different dynamics according to the region. In the United States, bar metal cloud growth is primarily driven by continued high demand from technology companies. and a high upsell performance, which is driving ARPAC, the improvement of the ARPAC, the average revenue per active customer. In Europe, we kept seeing infrastructure optimization from our existing customers leading to slower ARPAC growth than anticipated. And given the cautious economic environment in Europe, we don't anticipate a change to this trend in the rest of the year. Our hosted private cloud business continues to see double-digit growth thanks to ARPAC increases benefiting from price effects related to the new pricing for VMware licenses introduced by Broadcom at the start of May 2024. Plus, the growth in hosted private cloud is also due to the strong demand for secure and sovereign offerings in Europe, supported by the wrap-up of a large healthcare contract won in Germany in FY2024. Moving now to the next slide about public cloud. In Q1 FY2045, the public cloud segment reached 50.3 million euros in revenue, or 19% of the group's revenue, and grew by plus 15.8% like-for-like, fueled by an increase in RPAC, As we said in our last publication, we have been focusing on boosting cross-sell opportunities among public cloud products for our newly acquired customers and also on improving the user experience for historical customers to fuel upsell. And our strategy is paying off with this increase in RPAC. As highlighted on the right hand of the slide, artificial intelligence AI is also fueling public cloud growth with our NVIDIA GPUs and our AI solutions. As said previously, thanks to our extensive range of artificial intelligence offerings, we are able to respond to an ever increasing number of customer use cases in the inference market. This increase in RPAC is also supported by our enhanced public cloud portfolio, We highlight some of these on the slides as, for example, our new Manage Ranchers solution for managing and organizing containers in a multi-cloud environment. Also, our key management service, our KMS, enabling cybersecurity. Also, our object storage in the Paris 3AZ region, allowing high resilience and storage. Finally, the successful savings plan offers motivating customers to commit to longer-term engagements, also contributed to the increase in RPAC. Moving to the web cloud segment on slide 8, peers see that the web cloud segment reached 48.8% million euros in revenue, or 19% of the group's revenue, and grew plus 4.4%, like for like. If we exclude our legacy sub-segment, telephony and connectivity, growth reached plus 7.4%. This good momentum for WebCloud this quarter is supported by strong domain sub-segment performance. And we are concentrated here on making our products easier for our customers to manage, which also benefits us through better retention. So the growth here has been driven by the geographical rollout of multi-year commitments and an improved user experience through automatic renewals. That concludes our Q1 FY25 segment performance, and I now hand over to Stephanie for a financial and geographical overview.

Thank you Benjamin, and hello everyone. I am Stephanie Besnius, CFO of OVHcloud. Thanks for being with us, and obviously I start by wishing you a very happy new year. As Benjamin said at the beginning, during this first quarter of FY25, we managed to deliver a solid growth of 10.1% like for like, in line with our target. The performance of private cloud, up 10.2% like for like, in a persistently challenging environment in Europe was solid, particularly given that it was up against the strongest growth pattern of FY24, when private cloud grew almost 15%. The rebound in public cloud continues as well. Growth was 230 bits higher than in Q4, 24. And again, on a year-on-year basis, it was up against the toughest comp of the year, which was 18.9% of Q124. So this is pretty robust. Moving to the next slide to look at the business dynamics by region now. So in France, revenue grew by 8.9%. Public cloud delivered a like-for-like growth of 15.6%. driven by an increase in RPAC after a good customer acquisition in FY24. Private cloud now increased by 9.9%, still impacted by some customers optimizing their workloads. Finally, representing 30% of France business, web cloud and other growth was driven by a strong domain name dynamics. Let's now look at our international sales which accounts for 52% of our revenues. First, in the rest of Europe, growth reached 8.9% life-alike in Q1, thanks notably to Central and Eastern Europe. This was helped by the ramp-up of a large healthcare contract won in Germany in FY24. In the rest of the world now, We matched the strong Q4 growth with Q1 life-for-life growth of 14.2%. In private cloud, we continued to experience a strong momentum in the United States thanks to our development strategy focused on the cloud migration needs of our technology companies. In addition, we witnessed encouraging traction in public cloud following recent rollout of product availability. I will now hand over to Benjamin to talk about our outlook.