Ovh Groupe

Ladies and gentlemen, welcome to OVHcloud Q3 FY2026 Revenue. Today's speakers will be Octave Klava, Chairman and CEO of OVHcloud, and Stephanie Benya, CFO. I now hand over to OVH Management to begin today's conference. Thank you.

Hello, everybody. I'm Octave Klava, Chairman and CEO of OVHcloud. Thanks for joining us today. Let me start with the key highlights of our Q3 FY26 on the slide, too. So this quarter, we generated $290 million in revenue. We had a 9.6% of growth, net retention 100%. On the revenue for nine months, year-to-date, 845, 6% of revenue like for like, and we confirm all guidelines for FY26. So some business highlights. We were selected for the European Commission with consortium, very happy to be part of this journey. Also, we continue to refresh and to upgrade our intro level offers like BPS 27, Dominance 27, Webcasting 27, to continue to acquire and to be really aggressive on the acquisition of the new customers. Another point is acquisition of Gladia, AI company, Stitch2Text.stt. and the goal is to build up and to continue to build up our sovereign and multi-model AI for our customers. And the last one is we launched the preview of OVH AI workspace during the VitaTech that is open and collaborative agenting AI platform. On the operational side, we finished organization on the corporate. So we have right now the new team in place. We know we have a team in different countries. We're happy to do that. We still have the different things to finish on the digital cloud and web cloud. That should be done in the next weeks. On the Q3, we had, of course, an anticipated increase of the CAPEX, but it was fully anticipated. We don't have the main impact on the CAPEX because we've been working very well last quarter to avoid the bad use on the CAPEX on the Q3, and this will be also on the Q4. And then, of course, strength financial discipline to maintain our cost and focus on the cash generation. Stephanie will now talk about our financials.

Thank you, Octave. Hello, everyone. This is Stephanie Stittling. So, as Octave said, in Q3, we delivered a life-long growth of 6.9%, a clear acceleration compared with our H1. So this was driven by, first, on public cloud, we are up 20.2% like for like, back above 20%. And by far, the main driver of our growth, adding 11.1 billion euros to our revenue. Second, on private cloud, we are up 4% like for like, contributing 6.6 million euros. And last, with cloud and others, we are up 2% like for like. On a reported basis, our growth stood at 6.5%. And now we turn to slide five for a deep dive on each of our business segments. And we start with private cloud. So we are now slide five. So private cloud includes, as you remember, brown metal cloud and hosted private cloud. In two three, private cloud reached 174 million in revenue. representing around 60% of group revenue and growing 4% life-or-life. Over nine months now, it stands at 511 million euros and we are up 3.6% life-or-life. On Barnetal, we continue to benefit from the repositioning of our entry-range offers. Our customer acquisition on Starter keeps accelerating a direct payoff from the new entry-level positioning retribution. On Scalers and Corporate, we keep seeing sustained upselling across our existing customer base. On Hosted Friday Cloud, now the corporate segment is growing, supported by the ramp-up of strategic deals, and this momentum is offsetting an infrastructure-optimizing movement as some customers' right size and environment are impacted by Brutcom's price increases. On the private side, we launched our new high-end hardware for managed VMware. It's designed to support the most critical workloads. We move to the next slide. Now we are on public cloud. So public cloud, clearly, is a standard performance in quarter. In Q3, To be clear, we reached 66 million in revenue, around 22% of total group revenue, and grew 22.2% life-for-life. So, like I said, we are back above 20% for the first time since Q4 2023. Over nine months, it stands at 184 million, up to 16.9% life-for-life. And the solutions now. For starters, we see solid new customer acquisition. And for scalers and corporates, we have strong Excel driven by the breadth of our portfolio of products and the traction of our three AV regions in Paris and Milan. On entry-range offerings and notably on BPS, so for starters, our customer acquisition remains exceptionally strong. supported by the Offer Renewal, despite supply constraints. Let's now turn to WebCloud. We are on slide 7. So in Q3, WebCloud delivered $15 million in revenue, representing around 17% of group revenue and growing 2% life-for-life. Now, excluding telephony and connectivity, our legacy segments, growth reached 5% like for like. Over nine months, WebCloud stands at 150 million, up 2.2% like for like. This quarter, we took the first step in the redesign of our offering. We launched our new web hosting offers and we have now migrated our entire customer base on these new plans. We also enriched the range of new high value offers namely managed hosting for WordPress and OVHcloud Video Center as we move the web cloud business model up the value chain. Finally, in terms of dynamics, customer acquisition accelerated on the back of our offensive sales strategy, led by strong momentum in the domain name, Segmax. And now I will take you through our geographic performance on slide eight. So we start with France on the left. France represents 48% of our revenue and grew 5.8% life for life in Q3. So it's a slight sequential improvement versus the first half. Public cloud growth accelerates above 20%, we saw it. It's supported again by the ramp up of the Paris 3AZ region. Private cloud shows positive early returns from the BarMetal entry-range repositioning, and WebCloud delivers a resilient performance, underpinned by support services and the resilience of the domain name business. Moving to Eurac, excluding France in the middle of the slide, it represents 29% of revenue and grew 7.4% like for Lightning Q3. Both rebound sharply, more than double the rate of the first half, driven by accelerating public cloud momentum, while private cloud delivers steady growth on the back of our price performance repositioning. And finally, rest of world, which represents 23% of revenue and grew 8.6% life for life in Q3. Growth is led by the ongoing build-out of public cloud and by the resilience of private cloud across the region. I will now hand over to OTA for the final slide on the auto. Sorry.

Thank you, Stephanie. So we confirm all the guidelines for FY26. So like-for-like growth of revenue between 5 and 6, 5 and 7, it should be closer to 7.5. Adjusted EBITDA more than FY25. Adjusted capex, so keep in mind this is adjusted capex, 33% and 35%. And then, of course, leverage free cash flow will be positive. So we are now ready for the questions if you have any.

If you wish to ask a question, please dial pound key 5 on your telephone keypad or press the blue hand icon. The next question comes from Emmanuel Matot from AutoBHF. Please go ahead.

Hello, Octave. Hello, Stephanie. Emmanuel Matot from AutoBHF. Thank you for taking my questions. First, you are clearly ramping up your AI efforts with an ambition to develop LLMs, if I understand well your comments from the Divest Tech Conference last week. Do you have the resources to become truly competitive in this market and isn't it too late for you? Do you plan also to maintain a net debt per BDA ratio below three times? Second question, since you took the role of CEO of Octave, it was in October last year, what remains to be done at OVH to turn the situation around and for you to feel comfortable discussing a roadmap with us during an investor day. And my last question, maybe for Stephanie, where do we stand on price increases to offset the surge in memory component costs? Are your main competitors all doing the same? What is the additional contribution of these price increases to your revenue growth this year? Thank you very much.

Thank you. So on the AI, yes, we announced different things. You know, this is the Q week and also as for the Q1, we want to just talk about the numbers, but this is good questions because we started to talk a little bit more about the AI and our strategy and you will discover in the next month and the quarters where we go and what we want to build. So we are going in the direction of... building up our teams and to be able to deliver in the same time the investment but it's also growth, profitable growth. So the question is AI is too late for us? No, definitely not. We are in the game because you have the investment that is quite lower right now to invest in the AI. So it's 10 times, 8, 10 times less expensive. You have more teams available on the market. You have lots of papers with the researchers on the market and you can create data, scientific data. So it's easier, it's so easier to go in this market four years after. And the market is not done in Europe. We are still looking for the sovereignty in this market. The current players, they are not good. And we think that we can be good in our, let's say, the vertical that is cloud. Everything that we need, for example, code, we need securities, we need the defense, we need to manage the infrastructure at scale. All these things, our customers They want that. So it's so aligned between what we have, data, internal data, not customer data, but internal data, because we manage so large infrastructure with so many internal data that we can use in the AI. And once we have this, and we have more productivity, of course, internally, we can develop faster, we can have more securities, we can go in the less OPEX, But also all these tools that we will love to use, our customers will love to use also. So we want to offer them what we need internally. So this is one of the purpose where we go and why it makes totally sense for us to go for that and to making money. Because of course in this AI world, the investment, they are very high. A lot of people talking about the investment, not so many talking about the revenue. And this is where we want to show, demonstrate that you can add the revenue, you can generate the revenue, and all the revenue can flow the investment. And not just putting the money on the table and then hoping that you will transform that in the revenue. So this is on the AI. On the debt, for me, three is a red line. Okay, we talk. We don't want to go above more than three. Our goal is to keep that less than three because it's what I've done for 27 years more. And this is where we will be. And the second question, I didn't get.

Sorry? On our side,

For the first year, what still remains, we need to finish on the web cloud, digital cloud, start the scalers organization. This is exactly what we do today. Once it's done, there was a few things on the communication that we need to upgrade because as you probably mentioned, there was a lot of discussions about sovereignty and I'm not happy how how how we are taking part of this all the discussion so we're upgrading right now that and then I think we will be ready to go with you know those a lot of things they are ongoing we didn't even start talking because we we started working on the step I had the products step I had the services said I have had the features and that we will release in the next weeks, months, and quarters that I hope will make a difference. Another one?

Yes. So on pricing, Emmanuel, first, you know we live an exceptional situation. As of today, we estimate that the cost of the memories have been multiplied by six in the last 12 months. We consider that it would be multiplied by nine in September. We have massive price increase on the disk, and now we are hearing inflation potential on the CPUs. So what is done? As you know, first, we have front-loaded our virtualization. We've front-loaded the CAPEX for 26, front-loaded the CAPEX for 27. We disclosed it in H1, so we've made some savings. Second, yes, we've increased the prices. We've been very transparent on that topic with our customers. We've decided to increase the prices, and we've implemented these increases in April and May. So we're comfortable for now with this level of price increases. The impact on the growth over the first month is that significant. It's below 0.5%. And clearly for us, the key question is, yes, the right price and also the supply. So we have also, on top of being careful in the processing, we've secured the supply, and that's also something that is very important in the sector right now. Now, and Octave, you've communicated on it yesterday night, we are going to prepare September. We are working on additional price increase in the given context. There is no need to accelerate massively right now as the price increases on the back of what we've done so far. So we are preparing and getting ready for September 26th, and we give more details to our customers first in the next weeks.

It's really important that we need to focus on the customers because the increase of the price is that we... having mind are very important. So we want first communicate with our customers first and then with market.

Thank you very much. Thank you.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad or press the blue hand icon.

No more questions?

Thank you for your question. I hand the conference back to the OVH management for any closing comments.

Perfect. Thank you very much for being with us today. So just key takeaways, highlights. We generated 299.69% like-for-like. Public cloud is growing faster, really accelerating faster with 20%. We were selected for the European Commission. Our AI lab, we continue to build up with Gladia and through your AI workspace. We finished our cooperation organization. No issue on the anticipated CAPEX. And we are really strict on the financial discipline. And then on the guidelines, we confirm all the numbers without any changes. Thank you very much and have a good day. Thank you.