Earnings call transcript: Aeonis Group SE sees strong Q1 2025 revenue growth

Aeonis Group SE’s robust Q1 2025 results reflect its strategic focus on AI integration and cloud solutions expansion. As the company navigates potential risks and continues to leverage market opportunities, its ability to sustain growth will be closely watched by investors and analysts alike. For a deeper understanding of Aeonis’s financial health and growth prospects, InvestingPro subscribers can access 10 additional exclusive ProTips and a comprehensive Pro Research Report, which provides detailed analysis of the company’s valuation, financial metrics, and growth potential among 1,400+ top stocks. For a deeper understanding of Aeonis’s financial health and growth prospects, InvestingPro subscribers can access 10 additional exclusive ProTips and a comprehensive Pro Research Report, which provides detailed analysis of the company’s valuation, financial metrics, and growth potential among 1,400+ top stocks.

Key Takeaways

• Total revenue increased by 19.7% year-over-year to CHF 446.3 million.
• Adjusted EBITDA margin improved to 29.4% from 28.4% in Q1 2024.
• The company integrated AI into eight of its ten product lines.
• AdTech segment revenue surged by 77.7% year-over-year.
• The company anticipates continued growth in its digital solutions and cloud segment.

Company Performance

Aeonis Group SE’s robust Q1 2025 results reflect its strategic focus on AI integration and cloud solutions expansion. As the company navigates potential risks and continues to leverage market opportunities, its ability to sustain growth will be closely watched by investors and analysts alike. For a deeper understanding of Aeonis’s financial health and growth prospects, InvestingPro subscribers can access 10 additional exclusive ProTips and a comprehensive Pro Research Report, which provides detailed analysis of the company’s valuation, financial metrics, and growth potential among 1,400+ top stocks.

Financial Highlights

• Revenue: CHF 446.3 million, up 19.7% year-over-year.
• Adjusted EBITDA: CHF 131 million, up 23.8% year-over-year.
• Adjusted EBITDA Margin: 29.4%, up from 28.4% in Q1 2024.
• Net New Customers: 80,000, bringing the total customer base to approximately 6.4 million.
• Capital Expenditures: CHF 14.9 million, 3.3% of total revenue.

Outlook & Guidance

Aeonis Group SE remains optimistic about its growth prospects, with expectations for an 8% increase in digital solutions and cloud revenue. The company projects a 15-17% growth in cloud solutions and anticipates AdTech segment revenue to reach approximately €400 million. The adjusted EBITDA margin target is set at 35%, with a total expected adjusted EBITDA of around €520 million.

Executive Commentary

• "AI is currently integrated into eight of 10 product lines with full integration planned by the end of this year," said Britta Schmidt, CFO, highlighting the company’s commitment to innovation.
• "We believe digital sovereignty will remain a key market driver, fueling sustained demand for our offerings," added Schmidt, emphasizing the strategic importance of digital independence.
• "Our ambition is to grow margin as well with the RSOC product," Schmidt noted, indicating a focus on enhancing profitability.

Risks and Challenges

• Market Saturation: As the market for digital solutions becomes increasingly competitive, Aeonis may face challenges in maintaining its growth trajectory.
• Churn Rate: Although stabilizing, the churn rate remains a concern, with a focus on further reduction being crucial for long-term success.
• Economic Factors: Macroeconomic pressures, such as inflation and currency fluctuations, could impact future financial performance.
• Technological Advancements: Rapid technological changes may require ongoing investment in innovation to stay competitive.
• Regulatory Environment: Changes in data privacy regulations could affect the company’s operations and customer acquisition strategies.

Aeonis Group SE’s robust Q1 2025 results reflect its strategic focus on AI integration and cloud solutions expansion. As the company navigates potential risks and continues to leverage market opportunities, its ability to sustain growth will be closely watched by investors and analysts alike.

Full transcript - IONOS Group SE (IOS) Q1 2025:

Moira, Call Operator: Ladies and gentlemen, welcome to the Aionus Group SE publication of the Q1 twenty twenty five results conference and live webcast. I am Moira, the chorus call operator. I would like to remind that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session. If you would like to ask a question from the webinar, you may click the Q and A button on the left side of your screen and then click the raise your hand button.

If you are connected via phone, please press star followed by one on your telephone keypad. For operator assistance, please press the operator assistance button on the bottom left side of your screen or star zero on your telephone keypad. At this time, it’s my pleasure to hand over to Stefan Please go ahead.

Stefan Granko, Investor Relations, Aeonis: Good morning, everyone, and welcome to our analyst investor call for Q1 twenty twenty five. Thank you for taking the time to join us today. My name is Stefan Granko, and I’m responsible for Investor Relations at Aeonis. Let me briefly walk you through today’s agenda. Our CFO, Upgrater Schmidt, will present the operational and financial performance of Aeonis for the first quarter.

She will also outline our guidance and strategic outlook for the remainder of the year. Following her presentation, Britta will be available to answer your questions. With that, I’d like to hand it over to Britta. The floor is yours.

Britta Schmidt, CFO, Aeonis: Thank you, Stefan. Good morning, ladies and gentlemen. I’m Britta Schmidt, CFO of Aeolus, and I’m pleased to welcome you to our Q1 twenty twenty five results webcast. Let’s dive into our performance and key operational developments. To provide some context, let’s begin with a quick recap of our full year 2024 KPIs.

We achieved CHF1.56 billion in revenue and generated CHF452 million in adjusted EBITDA with a 95% cash conversion rate. Approximately 80% of our revenue is subscription based, ensuring stability and predictability, while the remaining 20% come from transactional services, primarily domain aftermarket activities such as trading and parking of domains as well as advertising. Our Net Promoter Score increased to 34 from 32 at year end twenty twenty three. This reflects stabilization following our pricing changes introduced in the third quarter of last year twenty twenty three. Importantly, we report a blended NPS figure combining post contact and online NPS, offering a more holistic view of customer satisfaction, unlike some other peers who report only the more favorable post contact metric.

Our marketing engine continues to perform strongly with the CLTV over CAC ratio exceeding 15 times and the customer acquisition payback period of just twelve months, we see strong ROI from our marketing investments. In 2024, we introduced a new segment reporting to enhance transparency and better reflect our operational structure. Going forward, we will report two segments: Digital Solutions and Cloud, which includes web presence and productivity and cloud solutions on the one hand. This segment generated $330,000,000 revenue in Q1 twenty twenty five, accounting for approximately 74% of our total revenue. The adjusted EBITDA margin in this segment is very strong, standing at 34.2%.

If we look at the two included business lines separately, we can see that our web presence and productivity business generated million in revenue in Q1 this year, accounting for approximately 62,000,000 of our total revenue. Our Cloud Solutions business generated million in revenue accounting for around 10% of our total revenue. The second segment on the other hand is our AdTech segment, which is a business line we formerly called aftermarket. This segment generated CHF117 million in revenue in Q1 twenty twenty five, accounting for approximately 26% of our total revenue with an adjusted EBITDA margin of 15.6%. Group revenue for Q1 totaled million with adjusted EBITDA of CHF131 million, yielding a 29.4% margin.

Artificial intelligence continues to boost internal efficiency and reduce operational cost, while enhancing customer facing features and creating new revenue opportunities through additional use cases and upselling. AI is currently integrated into eight of 10 product lines with full integration planned by the end of this year. Our primary focus is to optimize efficiency, foster innovation and enhance customer satisfaction through strategic AI implementation. As said before, AI integration is live across eight of our 10 product lines and we are on track for full rollout by year end. Our focus remains on the boost of efficiency, the driving of innovation and delivering measurable value to our customers.

For SMBs in particular, our AI initiatives provide access to advanced technology previously available only to larger enterprises, always with a strong emphasis on data privacy and compliance. In July 24, we launched the AI Model Hub, a sovereign multimodal platform hosted in the Aionos Enterprise Cloud. This platform enables customers to integrate their proprietary data, improving the relevance and precision of AI generated insights. Building on that, in April, we introduced Aionos GPT, an intuitive interface that empowers businesses to incorporate their internal documents, databases and content. All data is securely stored in our European data centers and remains fully protected.

A freemium model helps ease adoption and demonstrates clear operational benefits. Ionis GPT is fully integrated with our AI model hub and will be supported by targeted onboarding and training. This initiative supports our long term ambition to make enterprise grade AI accessible, secure and beneficial for SMBs. Our core offerings supported by mission critical reliability and personalized customer care, continue to drive customer loyalty. In Q1 twenty twenty five, we added 80,000 net new customers, bringing our total to approximately 6,400,000 customers.

This increase highlights the strong alignment between our product offerings and the needs of our customers. Our average revenue per user also showed a robust development. If we exclude the initial revenue from ITZ Bund, our ARPU in Q1 would have been €16.3 demonstrating a continuous and stable quarter over quarter increase. This growth can be attributed to the success of our upselling and cross selling efforts as well as the ongoing implementation of our new pricing structure. The limited increase in churn during this transition highlights the strength of our customer relationships and pricing power.

Customer and ARPU growth are both contributing to our strong and sustainable revenue growth. We are extremely happy with the first quarter. Total revenues in Q1 this year reached CHF 4 and 46,300,000.0, reflecting 19.7% year on year growth. Adjusted EBITDA came in at CHF131 million, up 23.8% compared to the previous year, resulting in a 29.4% margin compared to twenty eight point four percent in the first quarter last year. Marketing investments were slightly higher than last year as we are growing our business, but marketing expenses as a percentage of sales decreased from 9.4% to 8.9% year over year.

Adjusting for the marketing expenses to make it comparable, adjusted EBITDA would have been CHF135.6 million, growing 26.4% year over year. Let’s take a closer look at the performance of our segments. The Digital Solutions and Cloud segment achieved EUR329.6 million in revenue, marking a 7.3% increase year over year or 7.8% excluding intercompany revenue. The adjusted EBITDA margin improved significantly to 34.2%, up 3.8 percentage points from Q1 twenty twenty four. Our AdTech segment reported revenue of CHF116.7 million, representing an impressive growth of 77.7 year over year.

Based on an exceptionally weak prior year quarter and supported by the positive development of the ongoing product transition. The EBITDA margin was at 15.6% compared to 19% in the previous year. I will provide more detail on the ad tech dynamics shortly. Let’s now have a look into the performance of the different business lines within the Digital Solutions and Cloud segment. In the first quarter twenty twenty five, our Web Presence and Productivity business grew by 7.9% year over year to €273,700,000 driven by continued customer growth, higher ARPU and the ongoing effects of our pricing strategy.

Our Cloud Solutions business delivered revenue growth of 7.5% to €45,200,000 Let’s have a deeper look into the cloud business. In Q1 this year, cloud solutions revenue reached, as said before, 45,200,000.0, representing a 7.5% year over year increase. The changing global political landscape presents significant opportunities for future growth at IONOS. One of the key trends shaping our industry is the rising importance of digital sovereignty, the needs for independence from U. S.

Hyperscalers and full control over data is becoming increasingly critical for both enterprises and public institution. The shift is already translating into growing demand for digital autonomy. However, the increased demand cannot be directly translated into higher sales as many inquiries are driven by migration processes on the customer side. We are strategically positioned to lead this development and to further strengthen our role as a leading provider of sovereign cloud and digital solutions in Europe. Looking at the individual product areas, public cloud grew by 12% in the first quarter.

Revenue does not include any material revenue contribution from the ITZ Bund product project. As a reminder, the majority of revenue from ITZ Bund is recognized progressively, aligned with the deployment of hardware blocks in the data centers. Since no new blocks were installed in Q1, the corresponding revenues have not yet materialized. We anticipate meaningful revenue contributions from ITZ Bund and an acceleration in growth over the coming quarters. Private cloud revenue grew by approximately 7%, while managed cloud increased by 3%.

Also, the latter still has a dilutive effect on the overall cloud solutions growth rate. We are seeing positive momentum across the portfolio. Our current focus is on driving customer adoption of our cloud solutions, which supports our long term growth strategy. We believe digital sovereignty will remain a key market driver, fueling sustained demand for our offerings in the quarters ahead. Now, AdTech segment, which comprises our aftermarket business, we’ve seen a significant increase in the first quarter.

Revenue grew by 77.7% year over year based on an exceptionally weak prior year quarter and supported by the positive development of the ongoing product transition. We are closely monitoring the impact of this product migration to RSOC. While we are confident that this transition will ultimately benefit our business, we are aware that it may lead to some short term volatility. In fact, we’ve seen a very strong first quarter in Domain Parking and early indications from the second quarter suggest that the migration is accelerating and is already affecting some of our customers and partners, which may result in a temporary decrease in revenue growth. Nevertheless, we are encouraged by the better than expected performance in the first three months and by the AASOC onboarding process, which is well underway.

This should support a smoother transition in revenue generation from AFD to RSOC over the course of the year. We are committed to driving this transition forward and are confident that it will have a positive impact of our EdTech business in the long term. Turning to our capital expenditures on Slide 13, we can see that our total CapEx for the first quarter of this year was EUR 14,900,000.0 or 3.3% of total revenue. This is a slight decrease from the previous year where our total CapEx was €15,900,000 or 4.3% of total revenue. Breaking down our CapEx, we can see that our growth CapEx was 13500000.0% of total revenue, which is from the continuous expansion for our cloud solutions capabilities.

Our maintenance CapEx was CHF 1,400,000.0 or 0.3 percent of our total revenue and remains low and predictable. However, CapEx was very low overall in the first quarter, which is due to the phasing of investments over the year. Looking ahead, we still project total CapEx for the full year 2025 to be between CHF 18,000,000 and CHF 90,000,000 or around 5% of expected revenue. This reflects disciplined investment to support innovation, growth and operational scalability. Let’s walk through our free cash flow for the first quarter.

Starting with adjusted EBITDA of €131,000,000 we deduct 6,000,000 in adjustments, which are mainly standalone and LTI related costs to arrive at reported EBITDA. After accounting for EUR 15,000,000 in CapEx and EUR 25,000,000 in tax payments and adjusting for non cash LTI expenses and working capital, we reach a free cash flow before leasing of EUR 63,000,000. Substracting CHF 4,000,000 in lease payments gives us CHF 59,000,000 in free cash flow after leasing, slightly down from CHF 66,000,000 in Q1 twenty twenty four. Further, we made CHF 4,000,000 in interest payment and executed CHF 32,000,000 in share buybacks. After factoring in these items, comparable free cash flow for the quarter stands at approximately CHF 23,000,000.

As of Q1 twenty twenty five, net debt was reduced to DKK $842,000,000. This includes both external bank debt and the shareholder loan from United Internet, which we plan to further reduce over the coming quarters. Our leverage ratio improved to 1.8 times net debt to adjusted EBITDA compared to 2.5 times a year ago. The weighted average annual interest rate stands at 5.03%, which will go down with the upcoming repayments of the shareholder loan. This improved debt profile supports financial stability and provides flexibility in the future.

Based on the better than expected business development in the AdTech segment in the first three months, we have specified our outlook for this year and now expect revenue of around €400,000,000 in this segment compared to the outlook which we gave with the full year figures in March, which was above the previous year level. As we discussed earlier, the product migration to RSOC has started but is ongoing, and we strongly believe that this transition to the new RSOC product will ultimately benefit our business. While we still expect a setback in our AFD related revenues, we have seen a strong first quarter in Domain Parking and a good ramp up in RSOC revenue. We are confident to compensate by an accelerated customer migration to the new RSOC product, enabling us to still grow our revenues by resuming gradually. The outlook for our core business Digital Solutions and Cloud is unchanged and revenues are expected to grow by around 8% with web presence and productivity growing at around 7% to 8% and Cloud Solutions growing at around 15% to 17%.

Adjusted EBITDA margin is expected to be around 35%, up from 32.9% in 2024. Due to the positive development in the AdTech segment and continued cost discipline, adjusted EBITDA is now expected to grow by around 15% overall to around EUR $520,000,000 compared to our EUR $510,000,000 in our previous forecast. With this, I would like to hand back to the operator to open the webcast for any open questions.

Moira, Call Operator: We will now begin the question and answer The The first question comes from Ms. Ladniser. Please go ahead. Your line is open. You can proceed with your question.

Ladniser, Analyst: Sorry, can you hear me now? Yes. Okay. Excellent. Sorry about that.

Two questions, Britta, from my end. The first is on the customer acquisitions that you reported in Q1, ’80 thousand, that was a nice acceleration from Q4 last year. Can this level of customer acquisitions continue? Could you give us some color on maybe the phasing of that over the rest of the year? What helped drive the acceleration?

And has there been a change or improvement in your churn on the back of these few quarters of pricing pieces already been absorbed? Some color there would be great. The second is also on your brand marketing that you stepped up a bit on a year over year basis in Q1 versus Q1 last year. What would the phasing of the investments be like over the rest of the year as well? Would it be similar to last year in terms of magnitude?

Some color there would be great. Thank you.

Britta Schmidt, CFO, Aeonis: Yes. Let me maybe start with the latter, so the Brand Marketing. So as you know, phasing of marketing, especially last year, was a bit different than we usually do it because of the different sports events, happened last year, Olympics, etcetera, where we spend a little bit more brand marketing during the summer months, which is relatively unusual because yes, usually, people are away on summer and they and therefore, you do not get the eyeballs. So I would assume that this year, we are going back to the more normal phasing, which is brand marketing in the is stronger in the first quarter, a little bit into the second quarter and then again end of the third quarter and the fourth quarter, obviously. And then overall, we still expect 65,000,000 to €70,000,000 to be spent on brand marketing.

So we always said this will be flat on an absolute amount, and we are fully sticking to this and still believe we do get enough coverage and eyeballs. So overall, in terms of customer acquisitions, yes, we are back to a stronger development in the first quarter. Please keep in mind, Q1 is generally the strongest quarter as you if you look as well into the phasing, which you have seen over the previous years. Nevertheless, we expect strong growth also in the next quarters, And we already see relatively promising results in April. So Q2 and Q3 should be a little bit lower as we have seen as well in the past years, but not as extreme as last year, for example, where, again, we had a very specific situation with all the sports events.

And therefore, yes, we invested into brand. However, brand takes longer. And therefore, we would see some of the benefits now and continue to see them over the year. In terms of churn, yes, with the price increases now being absorbed by most of the customers, we do see churn going back to historical levels.

Ladniser, Analyst: Thank you. Very helpful.

Britta Schmidt, CFO, Aeonis: You’re welcome. Thanks, Nisla.

Moira, Call Operator: Next question comes from Ben Castillo Bernal from BNP Paribas. Please go ahead.

Ben Castillo Bernal, Analyst, BNP Paribas: Hi, good morning, Brito. Yes, thanks for having me on. Two for me, please. Firstly, just coming back to the OpEx trends for the year, it looked like in your core business, you imagined to grow revenues quite nicely and OpEx was pretty much flat there. So just wondering how we should think about phasing for this year.

Is it just the marketing spend we should consider? Is there any other sort of difference in the phasing of OpEx in the core business to consider for this year? And then second question, just around churn. So kind of coming back to historical levels stabilizing, which

Britta Schmidt, CFO, Aeonis: is

Ben Castillo Bernal, Analyst, BNP Paribas: encouraging. Where do we go from here? Is there room to continue to improve that to be better than historical levels? Or do you see where you are right now as the sort of midterm sustainable level of customer retention? Thanks.

Britta Schmidt, CFO, Aeonis: Yes. Let me comment on OpEx phasing. Yes, the main driver of phasing in our cost base is definitely marketing spend. We do not see the remainder of the OpEx trending when over the year, which means it stays relatively constant. We do not expect a significant increase over the next couple of years.

And actually, this is the result of economies of scale, cost discipline and the use of AI in our operations. So I think we have a very well managed OpEx base, which provides us with a very strong foundation for the EBITDA guidance, which we just raised a little bit. And then in terms of churn, going below the historical levels, of course, this is definitely our ambition and we believe that there is more room for several initiatives, so working closer on churn prevention, all as well with the help of AI, so understanding the trigger points, helping the customers to use their products better, so to increase stickiness of the customer base. So there’s obviously a lot to be done. However, would we see a significant decrease in churn?

Maybe not, because the 13% we are at roughly is already a very, very low level. So we will constantly work on churn prevention, but I’m a little bit cautious to give a guidance that we will reach a 12% churn in one time. But nevertheless, we’ll continue to work on it and let’s see where we get.

Ben Castillo Bernal, Analyst, BNP Paribas: Great. Thank you.

Moira, Call Operator: Next question is from Molly Bittcombe from Goldman Sachs. Please go ahead.

Molly Bittcombe, Analyst, Goldman Sachs: Hello. Good morning. I have a couple of questions. Firstly, on AdTech, you’ve given us an idea of what we can expect for phasing this year. But do you expect continued volatility into 2026?

And could you perhaps give us more color on what you expect in terms of medium and longer term strategy? And my second question is around price increases. You’ve previously said that price increases this year won’t be as pronounced as last year. Is this still how you’re thinking about pricing? And how do you see that playing out over the next year?

Thank you.

Britta Schmidt, CFO, Aeonis: Yes. So in terms of price increases, yes, we always said 25,000,000 will be lower than the price increase, which we definitely which we have done in Q3 twenty twenty three. And yes, we stick to this. So basically, we haven’t done any significant price increase in 2024 because the price increase of 2023 still rolled through. It was relatively late in the year, which means this year, yes, we will be touching our pricing structure and we are already underway in some of our products.

But it will be significantly smaller scale than we have seen in 2023 or 2024, if you you have that. In terms of AppTec, I so and look, we currently still see the product migration from AFD to RSOC. It has accelerated over the last couple of weeks, I would say, which gives the indication that by 2026, we are more or less on a steady state development. Nevertheless, it’s pretty much depending on how fast the ramp up and the migration would go. So if we look into this year, I would say Q2 will still be driven by relatively strong AFD revenues and our stock still ramping up.

Q3 might be a little bit lower and then we would see because AFD might go a little bit stronger upwards and RSOC not yet fully catching up. However, the constant ramp up of ARSOC and the promising onboarding of the new partners, which we are seeing here, gives a clear indication that by 2026, we will be on a steady state business, which means more or less everything on our stock, product migration done, which takes out a little bit of the volatility going forward. But nevertheless, it’s an ad tech business, so it will always be more volatile than the remainder of the business, which is obviously a subscription based business.

Molly Bittcombe, Analyst, Goldman Sachs: Very clear. Thank you very much.

Britta Schmidt, CFO, Aeonis: You’re welcome, Molly.

Moira, Call Operator: The next question comes from George Webb from Morgan Stanley. Please go ahead.

George Webb, Analyst, Morgan Stanley: Yes. Hi, good morning, Greta. Congrats on the strong Q1. I’ve got a few questions, please. On Abtech, I mean, I guess you’re one of the biggest players in that domain parking space.

So when you look at the Q1 you had and you look at how you think about the full year, is this should we be reading this as just significant growth in the overall market? Or are you doing something specific that is allowing you to take market share? Secondly, on the Abtech margin, you continue to kind of talk about the potential upside from our stock over the medium term. Q1 Abtech margin was 15.6%. As you think over the medium term, are you seeing probably not right now, but are you expecting a higher steady state EBITDA margin from that product?

And then lastly on the cloud solution side, there was talk in the release around that spurred demand from a, I guess, data sovereignty perspective. You mentioned that there’s a bit of a lag before that hits revenue. But when you talk about kind of currently high demand around cloud infrastructures, what sort of metrics is that sales inquiry? What sort of things are giving you confidence to believe that maybe as we go into 2026 that can be a little bit more meaningful on the revenue side? Thank you.

Britta Schmidt, CFO, Aeonis: Yes. Let me start with the AdTech part. So first of all, in terms of do we take market share or is the market growing stronger? I would say it’s a mix. So I think, first of all, the old AFD or domain Porkic business had a peak in Q1, which is a little bit part of the product transition, which is currently going on.

So the market was definitely growing stronger there as it did in the past. But as well, I would think with our RSOC product being well underway in terms of development and how it can develop deliver value as well for our customers, we would as well be taking share of other players in the market. And that’s the stronger part of the mix from my perspective. So overall, yes, we remain confident that AARSC will as well deliver higher quality traffic to our partners, which is then as well an indication that overall the market can be slightly larger than it is now with the relatively limited AFD product. In terms of margin, yes, it’s lower than it was in the past And our ambition is to grow margin as well with the RSOC product.

And we believe that RSOC, as I mentioned before, we can deliver higher value to our partners that we can raise margin going forward. And yes, I fully agree with your observation. No, that might not be now. But going forward, definitely, we our ambition is to go back to previous levels, which we had in AdTech business, which is between 15% to 20%. Wouldn’t as of now, I would not foresee margin growing stronger than the 20%.

George Webb, Analyst, Morgan Stanley: Sorry, just on the cloud side, Britta, with regards to when you

Britta Schmidt, CFO, Aeonis: in the ad tech part. So yes, so what we are measuring there is sales inquiries. So and we do see more inquiries coming in. And we do see strong leads as well coming in. And if you take a look into the German media, we are currently running a cloud brand campaign promoting the sovereignty of our cloud.

This is definitely helping to drive sales inquiries. So yes, we are confident that going forward this will drive revenue as well. However, as I said, it takes a couple of months before this really materializes.

George Webb, Analyst, Morgan Stanley: Got it. And if I could just throw one back on AdTech, I guess, it’s been it’s a pretty significant guidance change, at least on the revenue side to when we were talking at the fourth I mean, was your approach to that? Because yes, it goes to circa 400 versus above, which I think some people would have expected to be a single digit increase. When we think about the 400, is that still you erring on the side of caution? Is that I’m just kind of curious how you reach that number given the amount of uncertainties out there?

Britta Schmidt, CFO, Aeonis: Look, so if you look into the first quarter and just do the math, you end up way above 400,000,000 We do not expect the trailing to continue as it is now. So with the migration to our stock, we still expect a little bit of revenues being lower than they are at the moment. And as I said, we had a very strong run-in the IFD revenues in Q1. So comparing it to where we’ve been in March, definitely the migration there and the transition there just really kick started. And you remember the discussion around Google’s announcement and Team Internet’s guidance or more or less their very cautious outlook, where we’ve been above Team Internet, for example, already there, so more confident on what we can deliver.

And we have seen that actually what we’ve done there takes its first fruits. But nevertheless, it’s a product migration. It’s not fully steerable by us. It still implies that our partners are migrating. Of course, we help them to migrate.

But nevertheless, it takes part of the market, which is not us, as well to follow the momentum. So therefore, I think the 400,000,000 is a solid guidance for now. But we will, of course, will closely monitor the development in the EdTech business.

George Webb, Analyst, Morgan Stanley: That’s helpful. And I guess if I was to summarize as well, what you’ve seen in April and May so far maybe takes out some of the downside risks on the AdTech number for the year, so that’s giving you some of the confidence as well.

Britta Schmidt, CFO, Aeonis: Yes.

George Webb, Analyst, Morgan Stanley: Okay, cool. Thank you.

Moira, Call Operator: Next question comes from Sara Roberts from Barclays. Please go ahead.

Ladniser, Analyst: Hi, good morning.

Sara Roberts, Analyst, Barclays: Thank you for taking my question. Just two for me, please. So firstly, one of your peers recently called out a worsening of SMB sentiment over recent months, particularly given the volatility that we’ve seen post tariff announcement. Just curious as to whether this is something you’re seeing at the moment and what your assumptions are for the kind of health of SMB confidence throughout 2025? And secondly, on cloud, can you just remind us, based on what you can see at the moment, how should we expect the phasing of cloud revenues throughout 2025 to get to that 15% to 17% full year guidance?

Thank you.

Britta Schmidt, CFO, Aeonis: Yes. So let me start with the SMB sentiment. So we do not so first of all, keep in mind, most of our customers are European SMBs. They will not be or will only to a very small part be affected by tariffs or tariff changes, at least in their day to day business. This is what we currently see.

And therefore, we actually do not see them do not see a worsening of the sentiment of the SMBs. Obviously, it was always a little bit volatile over the last couple of years, to be honest, because economies in Europe do not trail super well, as we all know. However, SMBs are the foundation really of Europe’s economies. And what we see there is that they are actually doing quite well and much better than expected. And you can see that in the growth of our customer base, you can see that in our churn rates, etcetera.

So all of this leads to our confidence around actually the resilience, which we always talked about in our business and the resilience of our customer base actually comes through here. So we do not see a worsening of SMB sentiment overall. And by the way, keep in mind with our ARPU of around EUR16, that’s actually the last thing you would cancel if you are an SMB and have the mission critical products with us. And then overall for cloud, for the phasing, the phasing will kick in during the second half of the year. So we would see more revenue growth towards the end so towards the second half, so Q3 and Q4 actually.

I hope that helps.

Ladniser, Analyst: Thank you.

Moira, Call Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Britta Schmidt for closing remarks.

Britta Schmidt, CFO, Aeonis: And I hand over to Stefan.

Stefan Granko, Investor Relations, Aeonis: Yes. Thank you, operator. Thank you, Britta. Thank you all for joining today’s call. Please feel free to reach out for any follow-up questions.

Have a great day. Stay safe, and goodbye.

Britta Schmidt, CFO, Aeonis: Thanks very much. Bye bye.

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