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NFON AG (market cap: €122.94M) reported its Q1 2025 earnings, highlighting a 4% increase in total revenue to €22.1 million. The company continues to focus on AI-driven solutions, introducing new products and expanding its market presence. Despite a decline in adjusted EBITDA, the company maintains a positive outlook for the year. According to InvestingPro analysis, NFON appears undervalued based on its Fair Value calculation, with 8 additional ProTips available to subscribers providing deeper insights into the company’s potential.
Key Takeaways
- Revenue increased by 4% to €22.1 million.
- Adjusted EBITDA declined by 6.9% to €2.6 million.
- Gross margin improved to 86% from 84.1% last year.
- NFON launched two new AI-powered products.
- The company expects 2025 revenue growth of 8-10%.
Company Performance
NFON AG’s performance in Q1 2025 reflects its strategic pivot towards AI-driven business communication solutions. The company reported a 4% increase in total revenue, driven by strong recurring revenue, which accounted for 93.9% of the total. The gross margin improved to 86%, underscoring operational efficiency gains. InvestingPro data shows the company maintains a "GOOD" overall financial health score of 2.75, with particularly strong scores in growth (3.65) and cash flow (3.17). Adjusted EBITDA saw a decline of 6.9%, attributed to increased personnel expenses and strategic investments in AI.
Financial Highlights
- Revenue: €22.1 million, up 4% year-over-year
- Adjusted EBITDA: €2.6 million, down 6.9%
- Recurring Revenue: 93.9% of total revenue, a 4.3% increase
- Gross Margin: 86%, improved from 84.1% last year
- Blended ARPU: Improved to €10.2
Outlook & Guidance
NFON AG projects revenue growth of 8-10% for 2025, with an expected adjusted EBITDA between €13.5 million and €15.5 million. Analyst consensus from InvestingPro strongly supports this outlook, with price targets ranging from €6.23 to €15.87, suggesting significant upside potential. The company has set ambitious mid-term targets for 2027, aiming for double-digit revenue growth and an adjusted EBITDA margin over 15%. Strategic initiatives include a focus on AI-driven solutions and operational efficiency. For comprehensive analysis of NFON’s growth trajectory and peer comparison, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
Executive Commentary
CEO Patrick Heide emphasized the company’s strategic direction: "We aim to become the leader in AI-driven business communication solutions." He also highlighted the importance of AI in future investments, stating, "Strategic investments need to be driven from AI, AI, AI."
Risks and Challenges
- Economic Environment: The challenging economic environment in Germany, accounting for 80% of revenue, could impact growth.
- Extended Lead Times: Lead times have extended up to six months, potentially affecting customer acquisition.
- Personnel Costs: Increased personnel expenses could pressure margins if not managed effectively.
- Competitive Landscape: As NFON positions itself as a leader in AI-driven solutions, competition in the tech sector remains fierce.
Q&A
During the earnings call, analysts focused on the company’s pricing strategy and platform migration. NFON plans a 15% price increase and reported that the DTS platform migration is 40% complete. The recent acquisition of Bottario significantly contributed to growth, with a 52% increase in that segment. Analysts also inquired about organic growth expectations, with NFON anticipating acceleration in Q2 through Q4.
Full transcript - NFON AG (NFN) Q1 2025:
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Okay. Good morning, everyone, and welcome to today’s earnings call of Enfonydgy for the first quarter of twenty twenty five. My name is Frederica Thussen, VP, Investor Relations and Sustainability, and I will be your host for the session, which is being conducted in collaboration with New Ways. Thank you for joining this morning. Today’s presentation will be led by our CEO and CFO, Patrick Heide, who will walk you through the operational, strategic, and financial developments of q one two thousand and twenty five.
As usual, we published our quarterly statement and the full investor presentations earlier this morning on our website. Both are available, on the Investor Relations site. The presentation will be structured as follows. First, business highlights, financials, then guidance, and at the end, our q and a session. Please note that questions can only be asked live during the q and a session at the end of the presentation.
If you would like to ask a question, please use the raise your hand function. I will then unmute you. After unmuting yourself, I would ask you kindly to state your name and your institution before posing your question. Written question via the chat or the Q and A function will not be accepted. Thank you for your understanding, and thank you in advance for your contributions.
And with that, I would hand over to Patrick to begin the presentation. Over to you.
Patrick Heide, CEO, Enfonydgy: Thank you, Fredericke. Good morning, everyone. Also from my side, a warm welcome to our earnings call for first quarter of twenty twenty five. Let’s start with a brief overview of the key highlights for the period. In January, we rolled out our new strategy nFlow Next 2027, which marks an important milestone in the future development of nFlow.
Within this strategy, we aim to become the leader in AI driven business communication solutions. It forms part of our dual strategy to optimize the core business and to grow our offer in AI based solutions. One focus area we area we started with in q one is the definition and integration of AI within our product portfolio and to develop how we are bringing these solutions to the market. Let’s take a closer look on how we’re structuring our AI sales organization and aligning our go to market approach to effectively connect these innovation pro innovative products with our customers. We have concentrated on establishing a robust AI sales framework, integrating key components such as provisioning, pricing models and support processes.
This comprehensive ready to sales process is designed to equip our partners and internal teams within the necessary tools to effectively engage with our AI driven offerings. Since the start of the initiative, we have conducted over 10 partner workshops ensuring our partners can convey the strategic value of our AI solutions clearly. We also participated in three major XPOS, CCW, Zukum Fandberg, and Digital XE Munich, which significantly increased our market visibility and helped us to establish strong customer touch points. Our efforts are already paying off. In just three months, we generated over 60 leads, conducted more than 30 customer demos and secured our first notable contract with Bytesquad in March, a significant milestone that highlights the potential impact of our AI sales strategy.
With this strong foundation in place, we are ready to capitalize on the these early successes. Innovation, especially in the area of AI, is a key pillar of our strategy and for next 2027. In the first quarter of twenty twenty five, we introduced two new AI powered products that further integrate AI into our core portfolio and strengthen our market positioning. First, voice mail transcription. This AI powered tool automates voice mail transcription turning a traditionally time consuming task into a streamlined efficient process.
It is not only saves money, but also improves documentation accuracy, enabling our customers to respond more quickly and more effectively. Second, NEA, n phone intelligence assistant. NEA is designed to provide twenty four seven intelligence customer support, handling common queries seamlessly and delivering essential assistance in real time. By leveraging AI, NEA not only reduces response times, but also enhances the overall customer experience. Both products reflect our ongoing focus on integrating AI in practical customer centric ways to add value and strengthen our product portfolio.
Now with that overview of our key business highlights for the quarter, let’s turn to the financial results of Q1 twenty twenty five. Despite a challenging start to the year, we managed to deliver a 4% increase in total revenue reaching EUR 22,100,000.0. In terms of adjusted EBITDA, we saw a slight decline to EUR 2,600,000.0, down 6.9% compared to the first quarter of twenty twenty four. Now let’s move on the breakdown of the financial development in the next slides. Our revenue development in Q1 twenty twenty five.
Despite a challenging start to the year marked by a difficult economic environment, extended lead times up to six months and the ongoing focus of our partners on the DTS migration rather than new sales, we managed to achieve 4% revenue growth reaching EUR 22,100,000.0. The economic environment continues to impact customers’ decision making and extend sales cycle, making it harder to convert leads into sales as quickly as planned. At the same time, our DTS partners are still focusing on completing the migration to the nForm platform, limiting our debt capacity to drive new business during the quarter. Additionally, lead cycles remained longer than expected, particularly for AI driven solution as sales teams and parts required more time to adjust to the new AI product landscape. Nevertheless, we managed to drive revenue growth through the initial impact of Votario, which contributed €800,000 accounting for approximately 90% of the revenue increase as well as targeted price adjustment and the continued rollout of our premium solutions.
In total, this underscores the potential of AI based solutions to generate new revenue streams even in a challenging environment. Recurring revenue remains a core strength increasing by 4.3% and now accounting for 93.9% of total revenue. This stability is essential as we continue to shift our focus from non recurring to recurring AI driven solutions. Non recurring revenue decreased slightly to €1,300,000 primarily due to lower hardware sales as we prioritized recurring AI based services. The blended ARPU improved to 10.2 reflecting the impact of price adjustments and increased sales of premium solutions, including AI enhanced products.
In terms of seat development, the number of seats grew by 0.4% to 661,350, which is below our expectations. This lower growth is direct consequence of longer lead cycles and the continued partner focus on DTS migration rather than new sales. However, our churn rate remained stable at 0.5% per month, highlighting the resilience of our core business. Let’s now take a look on our cost structure and gross margin performance. Our gross margin improved once again and now stands at 86% compared to 84.1% last year.
This increase reflects the growing share of high margin recurring revenues as well as contribution from Bottario’s AI driven project business, which requires significantly fewer external resources. Cost of materials decreased slightly to EUR 3,100,000.0 even in the face of revenue growth. This demonstrates the scalability and efficiency of our business model. The material cost ratio dropped to 14%, down from 15.9% in 2024, a clear result of targeted efficiency measures and strong procurement discipline. This development is fully in line with our strategic priority of creating operational excellence and lifting our margin profile over the time.
When it comes to personnel, our approach is equally disciplined. Total personnel expenses increased slightly to EUR 9,300,000.0, up from EUR 8,600,000.0 in Q1 twenty twenty four. This rise was mainly driven by the integration of Bottario. Wages and gross salaries rose to €7,200,000 reflecting the additional headcount from the Bottario integration and targeted hires to strengthen AI capabilities and other strategic priorities. The average number of employees increased by 1.4% to four twenty five, which is a moderate increase that aligns with our focus on scaling key areas while maintaining cost discipline.
Adjusted personnel expenses totaled at €9,200,000 resulting in a personnel expense ratio of 41.6 slightly above the 40.1% recorded in Q1 twenty twenty four. The personnel expense ratio is expected to decrease below 40% in the coming quarters as we stabilize the workforce and focus on leverage leveraging existing resources more efficiently. Adjusted EBITDA reached EUR 2,600,000.0 in Q1 twenty twenty five, slightly below last year’s level of EUR 2,800,000.0. The decline of 6.9% aligns with our strategic focus on investing in initiatives and targeted personal expenses linked to the integration of Bottario. EBITDA decreased to EUR 2,500,000.0.
This figure was EUR 2,700,000.0 in Q1 twenty twenty four. These figures this figure for the first quarter of twenty twenty five was impacted by higher operating expenses related to AI development and then the initial ramp up of AI sales. Despite these additional expenses, our cost discipline allowed us to manage profitability effectively, absorbing strategic investment while maintaining a stable EBITDA margin. Looking ahead, we will focus on managing costs and maximizing operational efficiencies as we advance our strategic investments. Now we turn to cash flow.
Cash flow performance remained solid in the first quarter reflecting effective working capital management and operational discipline. Operating cash flow increased to €1,800,000 up from €900,000 in Q1 twenty twenty four. This improvement was driven mainly by favorable changes in trade payables and receivables supporting overall liquidity. Free cash flow rose to EUR 1,100,000.0 compared to EUR 100,000.0 in the previous year. This reflects a strong operational performance and a disciplined approach on cash management despite ongoing investments in strategic initiatives.
Investments remained stable at €700,000, and we focused on developing new products and features, particularly in AI and premium solutions. Financing cash flow increased slightly to €500,000, primarily due to interest payments related to the Bottario acquisition loan. Overall cash and cash equivalents increased to EUR 13,600,000.0, providing a solid liquidity position to support our strategic initiatives in AI, product development and operational efficiency. Looking ahead, our strong cash flow base sets the stage for the coming quarters, where we anticipate further momentum as strategic investments start to contribute more significantly to top line growth and profitability. This brings us to our guidance for 2025.
While results for the first quarter came in slightly below expectations, we remain confident in our 2025 guidance underpinned by several key drivers that will gain traction in the coming quarters. Revenue is expected to grow between 810% driven by strategic pricing adjustments and implemented in May, which will have a full impact starting in the second quarter. Votario’s growth momentum will intensify as we ramp up sales efforts and initiate targeted reselling activities, positioning as a key contributor to revenue acceleration. AI and business telephony is set to drive new revenue streams through premium solutions and targeted sales campaigns further expanding our offering and monetization potential. On the profitability side, we expect adjusted EBITDA to range between EUR 13,500,000.0 and EUR 15,500,000.0, reflecting both the anticipated revenue growth and the ongoing cost discipline.
Looking further ahead, our midterm target for 2027 includes double digit revenue growth and an adjusted EBITDA margin of over 15%, driven by continued expansion in AI driven solutions, premium offerings and ongoing operational efficiency. To summarize, the groundwork laid in Q1 will start to pay off in the coming quarters as strategic initiatives ramp up, setting us on a clear path to achieving our full year guidance and positioning us well for the sustainable profitable growth. Thank you very much for your attention. Now I’ll open up for questions.
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Yeah. Superb. Thank you very much, Patrick, for the presentation and for the detailed insight. We will now open the line or the floor for question. As a quick reminder, if you would like to ask a question, please use the raise your hand function in the platform.
I will then, call on you and unmute you, after unmuting yourself. When asked, please state your name and the organization you are representing. Please note that question via chat or the q and a tool will not be considered. So we’re now looking forward to question. And the first one is Stefane Beasian.
Patrick Heide, CEO, Enfonydgy: Yes. Hi.
Stefane Beasian, Analyst: Hello. Good morning. Thank you very much. I’ve got two questions, if that’s possible. The first one is on the price hikes that you just mentioned since May, if I’m not mistaken.
Can you give us a little bit more color on the size of the price hikes? Which products are exposed to the higher prices? And my second question is just coming back on the number of seats that is down and whether you could give more color on whether you’ve lost specific customers, whether you think there is also more competition perhaps in the market. And going forward, are you not a little bit concerned that your price hikes could also lead to further erosion in the number of seats over the next two, three quarters? Thank you very much.
Patrick Heide, CEO, Enfonydgy: Thank you very much, Stephane, for the question. And for the pricing rounds, we have two pricing rounds. The main one is in May. And for the rest of the growth for the year, it’s around 15% of the growth, which will be contributed by our pricing. To give you an idea, that’s around EUR 1,000,000.
Second question is about the seats. And the seats is let’s say, I already gave you two main reason, and that’s the economy situation we have overall in Germany, and 80% of our revenue comes from Germany. The DTS migration, they focus on the DTS migration instead of new seats. But overall, also, we need to mention that we had a challenging year 2024 where we didn’t came out with a lot of innovations. And obviously, as an ARR player, that means in that full world of ARR contributing to next year’s growth as well, we didn’t win enough seats already next year.
The main reason for that was also the innovation part. Since a couple of years, as I always stated, we were not as innovative as we should have been, but that’s now completely changing. Already in quarter one, we are already adding, as I stated, things like Nia and also the voice mail transcription part, and there will be some follow ups. That means AI feature into our core business. That means the core business will definitely catch up and that we will see a stronger growth in the future.
Pricing will be an important part, and I don’t see an erosion of pricing things coming to the core business because already with those AI features, we need to make clear that we want to price them into the core business as well. And this is why you see the core ARPU is already going up slightly, but it will also going up in the future, adding some AI, let’s say, features into the core business. Hopefully, that answers most of your questions. If not, please let me know.
Stefane Beasian, Analyst: It does. Thank you.
Patrick Heide, CEO, Enfonydgy: Thank you, Stephane.
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Perfect. Next in line is Knut Waller.
Knut Waller, Analyst: Yeah. Hi. And thanks for taking my questions. Also, a couple. Looking at the organic revenue momentum, Patrick, it looks like it was broadly flattish in in q one.
So is it
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: one moment. So
Knut Waller, Analyst: So should I start from scratch again?
Patrick Heide, CEO, Enfonydgy: Yeah. No. I missed the one question one, it was the organic revenue development.
Knut Waller, Analyst: Okay. Yes. Okay. And so should we expect already organic revenue growth again to accelerate in the second quarter helped by the price hikes? And then when we also look at the margin development, Patrick, it looks a bit that you front loaded investments in the year to accelerate growth in the second half, particularly of the year.
So do you expect already adjusted EBITDA to return to growth in the second quarter? Or is it also rather an H2 topic? And lastly, on the ARPU, what should we expect from the ARPU in the remainder of the year? Thank you.
Patrick Heide, CEO, Enfonydgy: Yes. Thank you very much, Knut, for the questions. For the organic growth questions, definitely will accelerate already from May. It is a price increase, which obviously also impacts the ARPU, but we definitely need to be stronger, and we will be stronger in the seed gains. So that’s definitely something we already see in q q two, q ’3, q ’4.
As I already indicated, one main driver is sales excellent, but also from the product portfolio new features. As for example, voice mail transcription and others who are also in which are also impacting the organic growth. From a margin perspective, you are absolutely right. It’s more back loaded to h two. To give you an impression, we see in in overall profitability contribution and allocation to h one to h two, which is 40% to 60%.
In revenue, we don’t see that as strong. It gives you an idea, it’s around 48% to 52%. That means profitability wise, it’s clearly backloaded. And the third question, Knut, was it was about the ARPU, how we are moving forward. We always have this still, and we forgot about this one a little bit that we also see some voice minutes going down in the ARPU, which influencing ARPU as well.
We see the counter impact is price increase. So definitely, it’s more or less stable the last twenty four months, but I assume but I can’t guide it for now because we we don’t know yet. But I assume with AI features also in the core business, our US tendency tenants wise going up also with the premium solutions we are selling. But I can’t give you, and we are not guiding this one, but definitely going up.
Knut Waller, Analyst: Thank you, Patrick. And and just one follow-up just to clarify. So your comment about the 40 to 60 was referring to EBITDA contribution h one to the full year and h two. Is that the right way look at things?
Patrick Heide, CEO, Enfonydgy: Exactly right. And we are clearly flying. Obviously, it’s my responsibility. It’s our responsibility to to see how revenue is coming in. But we we have an easy p and l.
We can obviously steer our OpEx. So we are obviously focusing to achieve guidance also in terms of profitability, but we also have in mind that there will be a year after 2025. That means our strategic investments needs to be driven from AI, AI, AI. We open up across the Wahhab, which we won’t stop because of this situation, etcetera, etcetera. So I will let you know in q two, Paul, obviously, but I see definitely the guidance is fully achievable in both aspects.
Great. Thank you. Good.
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Then next in line is John John.
John Corides, Analyst, Deutsche Bank: Thank you. Good morning. So my name is John Corides, and I work for Deutsche Bank. And thank you for taking my calls, my questions, I should say. I have three questions, please, and they all relate to the number of seats that Enfon has in Germany.
I just wondered whether you’d be willing to tell me what happened to the total number of seats in Germany since the end of twenty twenty four? Are we to assume that the change in the group number, all of it comes from Germany or more than that or less than that? Secondly, regarding the migration, could you help us understand how far you are in this migration? So how much is left? And also, I just sort of wonder if I’m a partner, I I do need to focus on the migration, but I also want to grow.
So why haven’t you sort of seen any sort of benefit from the partners, will wish, I think, to grow? And then thirdly, based on all, the questions I’ve asked until now, what are your expectations, for, seats in Germany, how how they might evolve, for the rest of this year? Thank you.
Patrick Heide, CEO, Enfonydgy: Yes. Of course. Hi, John. First of all, thanks for the questions. Coming to the number of seats, we we you can do the same allocation as with our revenue allocation.
80% of our business is coming from Germany. So that gives you an idea where the seats what amount of seats we have in Germany. We have, obviously, the most impact and the highest impact when Germany is growing or doing the opposite. And this is why it’s impacting most with 80% of the revenues. We remained almost stable in Germany.
That means churn remained also stable with 0.5, but that means we didn’t win enough won enough customers since 2024. We had a year of working on stability on our platform. We had some incidents last year, and we are proud to say that now we scaled up the technical platform that the technical platform can run to a million of seats. That means last year, there was just missing the innovative part of our products. People were searching for features, and we didn’t want enough customers.
This what we changed dramatically and obviously, coming to your third questions, Germany needs to contribute with the wind gains to the success of n four. As I always stated, there won’t be anything without core. We are not making the strategy 2027. Yes, AI is definitely an important part and you see it already 90% of our growth is coming from AI, but we need to work on winning more seats in core in Germany. For the migration of DTS, and that’s a very difficult topic because that was an acquisition in twenty twenty twenty.
For four years, we were running double, let’s say, procedures, process, systems, CRM system internally. When we joined Andreas and myself, we clearly decided we want to migrate it and merge it together because we want to benefit from the synergies. We did the groundwork last year. We merged the companies, etcetera. But now that work needs to be executed and finalized that the customers are migrating from the old DTS platform to the new Nfone platform.
As we have almost all only smaller partners with these DTS customers. You can imagine there’s not much room for other business, new business. They want to grow the business, of course, but we need to even incentivize them to do the migration. That’s an investment on the other side as well in our OpEx that we incentivize those partners. But that maybe answers also your question.
They are okay ish to get that incentivization for migration so that they can live for one year without having a provision on the on the new pros. But at the, let’s say, h two or next year, we should definitely focus on the pros again when we finalize the migration. Where do we stand with the migration? I would say we are 40% migrated on the seats. To the rest of the year, we have a clear plan.
We are executing. To give you an impression, we are migrating month by month almost thousand seats to to the new platform. So that’s really that’s really a lot of work, huge work, and it’s running. It’s now established. It’s possible, and we are happy to see it now execution.
And by the end of the year, it should be all executed.
John Corides, Analyst, Deutsche Bank: Thank you. Can I just check that the last reported number we had was 82,300 seats for DTS? Is that right?
Patrick Heide, CEO, Enfonydgy: I need to see and look to my team if somebody is shaking their head. And if not, I’m going to send this answer afterwards to you. But I get the thumbs up. Yes. It’s right.
John Corides, Analyst, Deutsche Bank: That that’s that’s exceedingly kind. Thank you, Patrick. Thank you, sir.
Patrick Heide, CEO, Enfonydgy: Thank you, John.
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Thank you, John. Next in line is Philip Zenerwijd. Go ahead.
Philip Zenerwijd, Analyst: Yeah. Thank you, Frederica. Despite a lot of ground already having been covered, some follow-up questions from my side, I will do them one by one. I did I did just understand it right. I did 2,000 seats at DTS, and you’re migrating 1,000 per month.
And if you’re at 40% right now, this will still take some time. Right?
Patrick Heide, CEO, Enfonydgy: Yeah. Absolutely. But but we did the groundwork in q one. It’s a lot of manual work. We have now automated these processes, and those 1,000 will obviously scale up to a much higher number per per month.
And all the 82,000 will be migrated by the end of the year.
Philip Zenerwijd, Analyst: Okay. Perfect. That’s that’s that’s good for clarification.
Patrick Heide, CEO, Enfonydgy: Yeah. That’s right. Thank you for the question. That’s right.
Philip Zenerwijd, Analyst: Yeah. Maybe maybe on the margin. Giving giving the margin accretiveness of the Bottario deal, what was the underlying margin of the core business in the first quarter? And can you maybe put a price tag on the investments you made in personnel and AI in the first quarter? And what investments are there to follow in the remainder of the year?
Patrick Heide, CEO, Enfonydgy: Yes. I mean, I’m looking to my my figures, and the net income contribution of Otario was around about €200,000. Yeah. So they keep on going, growing the business revenue wise 52%, which is good, good signals. They keep the margin, and this is why we are really happy to see the overall contribution to Enfond Group with almost 90% of the revenue growth coming from Bottario.
On the investment side, we opened up, I can’t give you and we are not say, telling you the the exact figures and details, but I can give you some ideas about investments overall for the group. So we opened up the Kosovo hub where we already hired four people. Obviously, we have the full year impact of the whole Bottario team in the p and l because since we consolidate only since April 1 September 1, the first two and a half quarters, we have the full year impact of personnel costs as well here. And we have some additional, hires for AI, to the AI competence center here in Germany. So all in all, we are and some salespeople, of course.
So overall, we are focusing on sales and AI investments and across our web.
Philip Zenerwijd, Analyst: Right. Thank you. That that gives me some more color. And and I and I did that right. A 52% growth at Potario?
Patrick Heide, CEO, Enfonydgy: At the moment, yes. Q q one twenty twenty four to q one twenty twenty five. Yes.
Philip Zenerwijd, Analyst: And that that’s better than you expected. Right? You gave out, like, a 40% guidance when I remember correctly.
Patrick Heide, CEO, Enfonydgy: Expectations are always high. It can always be better. I’m kidding. But overall, in our business case, we are assuming for % of the run out, it should be at 30%.
Philip Zenerwijd, Analyst: Okay. Thank you. And maybe one last one. You mentioned that the improvement on operating cash flow was partially driven by favorable working capital developments. Are those sustainable, or will they revert in the coming quarters?
Patrick Heide, CEO, Enfonydgy: I mean, we always need to be very clear and transparent here. It’s always a reporting date effect into. In the last report, the last quarter, we had a little bit negative because, yeah, you always have a shift if you you get an incoming cash the the second day after reporting date. So that means there will be an let’s say, a equalization a bit over the year, but it’s a healthy, let’s say, sustainable progress.
Philip Zenerwijd, Analyst: Perfect. Thank you, Patrick. That’s it from my side.
Patrick Heide, CEO, Enfonydgy: Thank you, Filip. Good.
Frederica Thussen, VP, Investor Relations and Sustainability, Enfonydgy: Dan, thank you for your questions so far. Before we close the session, let me briefly remind you or ask you, are there any questions from your side? So if so, please use the raise your hand function now. If not, and that seems to be the last of your question, thank you again for your interest and your contribution, and I will now hand back to Patrick for a brief closing statement.
Patrick Heide, CEO, Enfonydgy: Yeah. Thank you very much for your really interesting question and also your contribution and participation in the calls. I’m looking forward to the next touch points we have either on the conference or in the next earnings calls. Thank you very much, and have a great time.
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