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IONOS Group SE (ETR:IOS) delivered robust first-quarter results, reporting significant revenue growth and margin expansion across its business segments, according to the company’s Q1 2025 presentation released on May 12.
Quarterly Performance Highlights
The European web hosting and cloud services provider reported total revenue of €446.3 million in Q1 2025, representing a 19.7% increase compared to €373.0 million in the same period last year. Adjusted EBITDA rose by 23.8% year-over-year to €131.0 million, with the adjusted EBITDA margin improving to 29.4% from 28.4% in Q1 2024.
As shown in the following chart detailing the company’s quarterly financial performance:
The strong profit growth was achieved despite slightly higher marketing expenses compared to the previous year. IONOS also reported improved adjusted earnings per share of €0.44, up 43.9% from €0.31 in Q1 2024, reflecting the company’s enhanced operational efficiency.
The comprehensive financial overview demonstrates consistent improvement across key metrics:
Segment Analysis
IONOS’s business is divided into two main segments: Digital Solutions & Cloud and AdTech. Both segments contributed to the company’s overall growth, though at different rates.
The Digital Solutions & Cloud segment, which includes Web Presence & Productivity and Cloud Solutions, generated revenue of €329.6 million, up 7.3% year-over-year. This segment’s adjusted EBITDA margin improved significantly from 30.3% to 34.2%.
Meanwhile, the AdTech segment delivered exceptional growth, with revenue surging 77.7% to €116.7 million, though its adjusted EBITDA margin decreased from 19.0% to 15.6%.
The following chart illustrates the growth across these segments:
Within the Digital Solutions & Cloud segment, Web Presence & Productivity revenue increased by 7.9% to €273.7 million, while Cloud Solutions revenue grew by 7.5% to €45.2 million. The company attributed this solid growth to customer acquisition and successful cross-selling and upselling initiatives.
IONOS continues to benefit from increasing demand for data sovereign cloud products, with Public Cloud services showing the strongest growth at 12% year-over-year, followed by Private Cloud at 7% and Managed Cloud at 3%.
Strategic Initiatives
IONOS highlighted its AI integration strategy as a key driver of future growth. The company has already integrated AI into 8 out of 10 product lines and plans to extend this to all product lines by the end of 2025. This initiative aims to boost internal efficiency while serving as a catalyst for customer digitalization.
The company’s AI strategy focuses on three key areas: AI-powered products for ease of use, AI Model Hub as a sovereign multimodal AI platform, and IONOS GPT for privacy-focused AI assistants.
IONOS also emphasized its strong customer metrics, with approximately 6.32 million customers and a monthly churn rate of around 1%, which the company describes as "best-in-class." Average revenue per user (ARPU) increased by 7.5% year-over-year to €15.85, reflecting successful upselling and pricing power.
Financial Outlook & Guidance
For the full year 2025, IONOS expects continued growth across its business segments. The company forecasts approximately 8% revenue growth in its Digital Solutions & Cloud segment, with Web Presence & Productivity growing at 7-8% and Cloud Solutions at 15-17%. The AdTech segment is expected to reach €400 million in revenue for the full year.
IONOS anticipates total adjusted EBITDA of around €520 million for FY 2025, with the Digital Solutions & Cloud segment expected to achieve an adjusted EBITDA margin of approximately 35%.
The following chart outlines the company’s guidance for FY 2025:
The company maintains a strong financial position with well-managed capital expenditures. Total (EPA:TTEF) CAPEX for Q1 2025 was €14.9 million, representing 3.3% of total revenue, down from 4.3% in the previous year. For the full year 2025, IONOS expects CAPEX of €80-90 million, approximately 5% of total revenue.
IONOS has also improved its leverage position, with the net debt to adjusted EBITDA ratio decreasing from 2.5 in Q1 2024 to 1.8 in Q1 2025, providing the company with additional financial flexibility.
With its current trading price of €32.85, IONOS shares are closer to their 52-week high of €36.15 than their low of €20.85, reflecting investor confidence in the company’s growth trajectory and strategic direction.
Full presentation:
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