NFON H1 2025 presentation: Revenue grows 3.9% as company lowers full-year guidance

Introduction & Market Context

NFON AG (FRA:ETR:NFN), a European provider of cloud telephony solutions, presented its H1 2025 financial results on August 21, 2025, reporting moderate revenue growth amid challenging macroeconomic conditions. The company achieved a 3.9% increase in total revenue to €44.2 million, while maintaining a high proportion of recurring revenue at 93.4%. Despite the stable performance, NFON has revised its full-year guidance downward, citing macroeconomic volatility and cautious IT spending.

The company’s stock closed at €6.50 on August 20, 2025, down 0.76% ahead of the earnings presentation. The shares have traded between €4.74 and €8.20 over the past 52 weeks, reflecting investor uncertainty about the company’s growth trajectory in a challenging economic environment.

Financial Performance Highlights

NFON reported total revenue of €44.2 million for H1 2025, representing a 3.9% increase compared to the same period last year. Recurring revenue grew by 2.9% to €41.27 million, maintaining a strong 93.4% of total revenue. This represents a slight deceleration from the 4% revenue growth reported in Q1 2025.

As shown in the following chart of revenue development:

The company’s gross margin improved to 86.1%, with cost of materials decreasing to €6.2 million. This positive development is illustrated in the gross margin chart:

Adjusted EBITDA increased by 3.4% to €5.7 million, showing a recovery from the 6.9% decline reported in Q1. The consolidated net result slightly increased to €0.73 million.

The EBITDA development is shown in the following chart:

However, not all metrics showed positive trends. The seat base declined by 1.1% to 657,584, while operating cash flow decreased to €2.5 million and free cash flow fell to €0.7 million. Personnel expenses increased by 5.7%, partly due to the acquisition of botario GmbH, which increased the average number of employees by 5.1% to 412.

Strategic Initiatives

NFON highlighted several strategic initiatives aimed at driving future growth, with AI integration taking center stage. The company has integrated AI features into its cloud telephony platform, including the introduction of Nia (NFON Intelligent Assistant), voicemail transcription, enhanced security, and optimized web applications.

The following slide details the company’s AI integration strategy:

Additionally, NFON introduced a new modular licensing model designed to simplify quoting and billing while increasing customer transparency. The company also launched the NEXUS partner programme, providing a structured, growth-oriented framework for channel partners.

CEO/CFO Patrik Heider’s emphasis on AI aligns with his previous statements from the Q1 earnings call, where he stressed that "Strategic investments need to be driven from AI, AI, AI." This consistent messaging underscores the company’s commitment to positioning itself as a leader in AI-driven business communication solutions.

Outlook and Guidance

In a significant development, NFON has revised its 2025 guidance downward. The company now expects total revenue growth in the 3-5% range, down from the 8-10% growth projected during the Q1 earnings call. Similarly, adjusted EBITDA expectations have been lowered to €12.5-14 million from the previous range of €13.5-15.5 million.

The revised guidance is presented in the following chart:

Despite the near-term adjustment, NFON maintained its mid-term targets for 2027, projecting double-digit revenue growth and an adjusted EBITDA margin exceeding 15%. The company identified several strategic priorities for H2 2025, including market growth focus, profitability improvement, cash flow optimization, operational efficiency, and channel enablement.

Competitive Industry Position

NFON continues to position itself as a leading provider of cloud telephony solutions in Europe, with a focus on AI-driven innovation to differentiate from competitors. The company’s high recurring revenue percentage (93.4%) provides stability, while the improved gross margin (86.1%) demonstrates operational efficiency.

The comprehensive financial highlights are summarized in the following slide:

The company’s seat development and ARPU trends provide insight into its market position:

While the slight decline in seat base (-1.1%) raises concerns about market saturation or competitive pressures, the stable blended ARPU of €9.9 suggests the company is maintaining pricing power. This represents a slight decrease from the €10.2 ARPU reported in Q1 2025.

NFON faces challenges from the macroeconomic environment, particularly in Germany, which accounts for a significant portion of its revenue. The company acknowledged IT and SaaS budget caution among potential customers, which likely contributed to the revised guidance. However, it also identified regulation as a potential growth driver, suggesting regulatory changes could create opportunities for cloud communication providers.

As NFON continues its strategic pivot toward AI-driven solutions, the company appears focused on balancing growth investments with profitability improvement, a necessary approach given the current economic climate and investor expectations for SaaS companies.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.