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Introduction & Executive Summary
IONOS Group SE (IOS) presented its half-year 2025 results on August 7, 2025, showcasing robust growth across all key performance indicators. The company reported a 19.1% year-over-year increase in revenue to €895 million for H1 2025, while adjusted EBITDA grew by 23.3% to €268.7 million, improving the adjusted EBITDA margin to 30%.
The presentation highlighted IONOS’s strategic focus on artificial intelligence integration across its product portfolio and emphasized its positioning as a European alternative to U.S. hyperscalers, capitalizing on growing demand for digital sovereignty. The company’s stock responded positively to the results, with shares rising 3.26% on the day of the presentation.
As shown in the following overview of key H1 2025 performance metrics:
H1 2025 Financial Performance Highlights
IONOS delivered strong financial results in both the half-year and second quarter of 2025. Total (EPA:TTEF) revenue for H1 2025 reached €895 million, up 19.1% from €751.6 million in H1 2024. Adjusted EBITDA showed even stronger growth at 23.3%, reaching €268.7 million compared to €218 million in the prior year period, with the adjusted EBITDA margin expanding to 30% from 29%.
The second quarter results were equally impressive, with revenue increasing by 18.5% year-over-year to €448.7 million and adjusted EBITDA growing by 22.7% to €137.7 million. The Q2 2025 adjusted EBITDA margin improved to 30.7% from 29.6% in Q2 2024.
The following chart illustrates the strong year-over-year growth in both revenue and adjusted EBITDA for H1 2025:
The quarterly performance shows continued momentum in Q2 2025:
IONOS’s customer base expanded to 6.47 million, with 150,000 net new customers added in H1 2025. The company maintained a low churn rate of approximately 1% while increasing average revenue per user (ARPU) by 4%, demonstrating both customer acquisition strength and improved monetization.
The following chart shows the consistent trend in customer additions and ARPU growth:
Segment Performance Analysis
IONOS operates two main business segments: Digital Solutions & Cloud (73% of total revenue) and AdTech (27% of total revenue). Both segments delivered strong growth in H1 2025, with particularly impressive performance in the AdTech division.
The Digital Solutions & Cloud segment, which includes Web Presence & Productivity (61% of total revenue) and Cloud Solutions (10% of total revenue), grew by 6.7% in Q2 2025 compared to the same period last year, reaching €326.4 million. The adjusted EBITDA margin for this segment improved significantly to 38% from 33.7% in Q2 2024.
The AdTech segment showed remarkable growth of 68.3% in Q2 2025, with revenue reaching €122.3 million compared to €72.7 million in Q2 2024. However, the adjusted EBITDA margin for this segment decreased slightly to 11.1% from 12.8%.
The following chart details the performance across segments in Q2 2025:
Within the Digital Solutions & Cloud segment, Web Presence & Productivity revenue increased by 7.4% to €270.5 million in Q2 2025, while Cloud Solutions revenue grew by 5.2% to €45.1 million. The company’s cloud business is strategically focused on data sovereignty, with revenue distributed across Public Cloud, Private Cloud, and Managed Cloud services.
The AdTech business has shown particularly strong momentum, with revenue increasing by 72.7% year-over-year in H1 2025. This growth trajectory is illustrated in the following chart:
Strategic Initiatives
IONOS emphasized two key strategic initiatives in its presentation: AI integration across its product portfolio and positioning as a European alternative for digital sovereignty.
The company reported that AI is already integrated into 8 out of 10 product lines, with plans to extend to all product lines by the end of 2025. IONOS is developing AI-powered products, an AI Model Hub, and its own IONOS GPT. The company is also working on "Agentic AI" solutions aimed at helping small and medium-sized businesses (SMBs) automate routine tasks and focus more on their core business activities.
In a significant strategic move, IONOS and HOCHTIEF AG have submitted a proposal to the European Commission for an "AI Gigafactory" project. This facility aims to build and operate a large-scale AI infrastructure in Europe, complying with European standards for digital sovereignty and resilience. The project plans to deploy over 50,000 GPUs (scalable to over 100,000) with operations potentially beginning as early as 2027.
The company is positioning itself to capitalize on the increasing European demand for digital sovereignty, offering alternatives to U.S. hyperscalers with a focus on data control and security.
Financial Health and Outlook
IONOS demonstrated improved financial health with significant debt reduction and strong cash flow generation. Net debt decreased to €786 million in Q2 2025 from €960 million in Q2 2024, reducing the leverage ratio to 1.6x from 2.4x over the same period. The average interest rate on debt also improved to 4.9% from 5.2%.
The following chart illustrates the company’s improving debt profile:
Capital expenditure was well-controlled at 2.6% of total revenue in H1 2025, down from 4.3% in H1 2024. Free cash flow generation was strong at €176 million in H1 2025, compared to €151 million in H1 2024.
The company’s free cash flow bridge is shown in the following diagram:
Looking ahead, IONOS expects continued growth in its Digital Solutions & Cloud segment, with projected revenue growth of 8% for the full year 2025. The company anticipates 11.8% growth in Web Presence & Productivity and 13.3% growth in Cloud Solutions. The AdTech segment is expected to continue its strong performance with further acceleration in the coming months.
A comprehensive financial overview of IONOS’s performance is provided in the following summary:
With its strong H1 2025 performance, strategic focus on AI and digital sovereignty, and improving financial health, IONOS appears well-positioned to continue its growth trajectory in the European digital services market.
Full presentation:
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