Earnings call transcript: Rai Way Q3 2025 shows revenue growth, stock rises 1.4%

Rai Way SpA reported a 3% revenue growth in Q3 2025, with adjusted EBITDA rising by 2.8% to €146.1 million. The company’s media distribution segment saw a 2.2% increase, outperforming inflation. Following the earnings announcement, Rai Way’s stock price increased by 1.4%, closing at €5.71. The company confirmed its full-year guidance for 2025, despite potential impacts from diversification delays.

Key Takeaways

• Revenue growth accelerated to 3% in Q3 2025.
• Adjusted EBITDA increased by 2.8%.
• Stock price rose by 1.4% following the earnings announcement.
• The company maintains its full-year guidance for 2025.
• Digital infrastructure revenues grew by 3.4%.

Company Performance

Rai Way’s performance in Q3 2025 highlights its ability to accelerate revenue growth from 2% in the first half of the year to 3% in the third quarter. The media distribution segment, a key driver, grew by 2.2%, while digital infrastructure revenues reached €24.6 million, marking a 3.4% increase. This growth reflects the company’s strategic focus on expanding its digital and media services.

Financial Highlights

• Revenue: €[amount] (up 3% YoY)
• Adjusted EBITDA: €146.1 million (up 2.8% YoY)
• Net debt: €164 million
• Free cash flow to equity: €94 million over nine months

Outlook & Guidance

Rai Way confirmed its full-year 2025 guidance for adjusted EBITDA growth. The company acknowledged potential low to mid-single-digit EBITDA impacts from delays in diversification initiatives but remains committed to its 2027 financial targets. Strategic initiatives include expanding its DAB radio network and developing edge data centers.

Executive Commentary

Roberto Cecatto, CEO, emphasized, "We are creating a platform that combines high-performance connectivity, centralized data center, distributed data center, and traffic accelerators." He also noted that the traditional business is "slightly above expectation," indicating a solid foundation for future growth.

Risks and Challenges

• Diversification delays may impact EBITDA in the short term.
• Slow uptake of edge infrastructure due to fragmented demand.
• Increasing personnel costs, which rose by 8.5%.
• Potential consolidation in the tower sector with EI Towers.
• Economic uncertainties that could affect market conditions.

Q&A

During the earnings call, analysts inquired about the potential consolidation with EI Towers and the implications of MSA protections with Rai. The company clarified its commitment to diversification and addressed the impact of investment delays on its strategic initiatives.

Full transcript - Rai Way SpA (RWAY) Q3 2025:

Conference Operator: Good afternoon, this is the conference operator. Welcome, and thank you for joining the Rai Way 9 Months 2025 Results Analyst Web Call. All participants are in listen-only mode, and after the presentation, there will be a Q&A session. At this time, I would like to turn the conference over to Mr. Andrea Moretti, Head of IR for Rai Way. Please go ahead, sir.

Adalberto Pellegrino, CFO, Rai Way: Thank you, operator, and thank you all for attending our conference call. The call will be held, as usual, by our CFO, Adalberto Pellegrino, CEO, of course, Roberto Cecatto, and our Chief Corporate Development Officer, Giancarlo Benucci. Please, Mr. Cecatto, go ahead.

Roberto Cecatto, CEO, Rai Way: Thank you, Andrea. Good evening to everyone. Let’s start. In slide four, okay. In slide four, we summarize the main achievements of the period, both in terms of financial results and in terms of operating activities. The first nine months’ financials were particularly solid, even better than our beginning-of-the-year expectation, and showed a clear continuity with the already strong result that we posted at the end of June. Revenue growth even accelerated to basically 3% in the third quarter compared to the plus 2% recorded in the first half. Both business segments grew faster compared to the CPI-linked contribution. In fact, media distribution services benefited from the expansion of DAB Radio Network coverage for Rai, representing around 85% of the increase in the revenues from new services to Rai.

But also, the radio broadcasters also pushed the digital infra division because of the rising needs of towers to extend private operators’ DAB networks. And let’s not forget the initial contribution for diversification initiatives, namely data center and CDN, although still limited, as I will elaborate more in a while. Moving to profitability, adjusted EBITDA rose by 2.8%, supported by positive underlying trends in the traditional business, also helped by careful cost control and some non-core items. These non-core benefits benefited both other revenues, including government incentives on new tech projects and proceeds from land sale and mailing cost. But please note that we actively pursued them in this period in order to mitigate the temporary impact of the start-up stage of the new initiatives. Adalberto, the CFO, will later discuss how all these moving parts impacted on the recorded EBITDA level.

Once again, net income was in line with last year’s after taking into account a higher level of depreciation and amortization, which is a consequence of our continuous investment activity. Speaking of which, in the nine months, we recorded almost the same amount of CapEx than one year before, slightly above €25 million of euros, but with a different mix. The majority is indeed represented by maintenance activities, which included some planned exceptional non-recurring activities on some big towers. There was also a seasonality effect involving certain high-level cybersecurity IP network investments. The development CapEx in the nine months were equal to €11 million, therefore below last year’s level, consistently with the guidance updated in July. In particular, the reduction compared to the expectation at the beginning of the year is the result of three main factors.

The first one is the slight shift to 2026 of some investment for Rai DAB network extension, but let me say, to be fully recovered the next year, being all the already placed installations planned. Therefore, there will be no impact on subsequent years. The second phenomenon impacting our development CapEx is the length of the approval process for some land interested by the photovoltaic project. This is essentially leading to a one-year shift in the investment plan now expected in 26-27 instead of 25-26, and the contribution to P&L with full impact now expected in 2028. Finally, we are planning a different phasing of the rollout of new edge data centers. We have project length and expertise. It is mainly a matter of setting the right moment of construction in order to match a better level of edge demand and improve returns.

Let me clarify that this is definitely not a change in the strategy. The consensus of the need for assets distributed across the territory is more relevant than ever. And this is a concept also reiterated, for example, by the government, the Italian government strategy, to attract investment in the edge data center. If you see the July document of the MIRIT. Generally speaking, so at least at European level, not just ours, edge infrastructures are currently experiencing slower uptake due to delays in one of the two areas of demand. In fact, while enterprise demand for regional capacity is present and growing, although fragmented, the demand for edge networks resulting from the spread of low-latency services is proving at the moment slower. As I will explain shortly, we are improving the effectiveness of our commercial activities in the enterprise segment, primarily by identifying the right demand aggregators.

Meanwhile, the need for low-latency and local data processing could accelerate significantly following the rising interest for AI applications and the AI cloud architecture that require a low-latency inference phase. Also consider that there are several AI cloud providers that have already started rolling out their infrastructure using third-party data centers. Let me say that it’s only a matter of time before these two levers justify or require the addition of further edge nodes, but at this point, we will be very quick and flexible. To conclude on financials, let me also underline the strength of our recurring free cash generation, which accounted for approximately EUR 94 million despite the seasonality investment, bringing down the net debt compared to the end-of-June levels. Now, we have to speak about the operational perspective.

In the traditional business, the main project for our client Rai, namely the extension of coverage of the DAB network, is proceeding largely as planned, as evidenced by the revenue growth of new services. As already said, the approval process for some of the photovoltaic projects is taking longer than expected, but also in this case, it is a matter of time rather than feasibility or returns. Moving to diversification initiatives, we are focusing on commercial levels to enhance revenue contribution. On the edge data center, within the context outlined before, currently, the target market is enterprise, driven by the off-premises relocation of servers, and even more, the deployment of private cloud environments. This demand is growing but fragmented.

Therefore, we try to address, and we are addressing it, through aggregators such as private cloud operators and system integrators, the latter also through an expansion of our offering to IAA services, infrastructure as a service approach. This new approach, this different targeting, is now operational, is already in place, and starting to show more effectiveness and fit with our partners, hopefully leading to improved results in the coming months. Furthermore, we are talking about a market with some local assets, for example, those held by private cloud operators, which in many cases are largely underutilized and could be consolidated and rationalized as a way to enhance the growth profile.

Speaking regarding the CDN, in collaboration with some large clients and our technology partners, we are fine-tuning certain very sophisticated technical aspects and, above all, building a good track record of performance that will encourage customers to gradually move a larger portion of their traffic to our network. Regarding the hyperscale data center project near Rome in the Pomezia municipality, although we have hoped to arrive at this call with final authorization, updates are not lacking. The process called Conferenza dei Servizi step ended positively, as all the other administrative issues inside the administration of Pomezia municipality. The conclusion of the process is now linked to an exemption that arose only in the last few days from an authority, the Hydrogeological Bathing Authority, but we are working on it and aim to attain it with a reasonably short time frame.

To sum up, the diversification path is proving to be more gradual, both for market and authorization reasons, but with regard to 2025, we aim to see an initial improvement in contribution in Q4 2025, so the last part of the year. On the other end, we have nevertheless been able to modulate the fixed cost of these initiatives according to the revenues, essentially entirely offsetting at EBITDA level the more gradual top-line contribution. While looking at the big picture, what I would like to stress is that we are creating a platform that combines high-performance connectivity, centralized data center, distributed data center, and traffic accelerators such as CDN, together with the characteristics of sovereignty, neutrality, and quality. Let me say that this platform is among the most fitting and interesting national infrastructure to enable the next technological shift.

We believe to be well-positioned to seize future opportunities, and certain feedback we get from market operators and potential prospects seems to confirm this. Moving now to the outlook, the result achieved in the first nine months allow us to comfortably confirm the 2025 guidance, especially referring to expected increase in adjusted EBITDA, even slightly above the July expectation, driven by the performance of the traditional business and the non-recurring benefits. Still, in terms of outlook, we would also like to provide, to the extent permitted, a brief update on the status of the activities related to the possible broadcasting tower sector consolidation. As already told in the past call, the industrial analysis was substantially completed at the end of July.

Since then, while we worked on, of course, refining our internal evaluation, let me say that our parent company is still reviewing other aspects within its own responsibility, which are evidently necessary for future discussion with counterparties. Of course, this, together with some initial procedural complexities that we told in the past calls, is leading to longer timelines, and this was confirmed by the extension of the terms of the MOU announced by the shareholders. At present, it is therefore difficult to make prediction either on timelines different from those recently updated in the MOU or on the outcome. Please, Adalberto, now the floor is yours.

Adalberto Pellegrino, CFO, Rai Way: Thank you, Roberto, and good evening to everyone. We are now on slide five that was already commented by Roberto, so I will skip it and go straight to the details of each metric, starting from slide six, where we can see how the media distribution segment grew by 2.2% outperforming inflation, which contributed about 1.2%. The growth was supported by the extension of Rai’s DAB network coverage included in the new service for Rai, up to 20%. In the digital infrastructure segment, revenues reached EUR 24.6 million, up 3.4% compared to the figures reported last year. This growth was mainly driven by the tower hosting business, which particularly strong volumes from radio broadcaster customers. We continue to see the initial contribution, of course, from the commercialization of our edge data center on the overall figures.

Moving to OPEX, on slide seven, we have a 1.8% increase in cost, landing at EUR 67.2 million. Breaking down the OPEX, we noticed that personnel costs were up 8.5%, impacted by the negative effect of the lower capitalization level. This trend is a trend that is fully consistent with what we have planned in our industrial plan. If we look only at the traditional business, the increase is just 5%, mainly represented by the renewal of the collective labor agreement, while the diversification initiative led to an increase of only EUR 0.3 million compared to last year. Other operating costs decreased by 5%, landing at EUR 31 million, benefiting from some non-core benefits, as we have already seen in the first half result. Diversification-related OPEX are highlighted below the chart, and as you can see, they more than double year on year to EUR 3.3 million, as basically we planned.

If we strip out these diversification costs as well as the before-mentioned non-core benefits, we arrive at a stable underlying cost base for the traditional business. Such result is driven by, from one side, a slight increase in energy tariff, and on the other side, we have some optimization across other cost items. In order to emphasize the healthy trend in traditional business, in slide 8, we show the detail of the three components impacting the EBITDA growth. In particular, we can see the positive evolution of the adjusted EBITDA related to the traditional business that continued to grow, plus €2.4 million. This positive performance was partially offset by the increase in the startup cost of the diversification initiative, which led to a negative impact on the EBITDA of €1.4 million. Nevertheless, the company has sought one-off benefit to help to mitigate the ramp-up phase of the new initiative.

I would also like to point out that the level of growth in the adjusted EBITDA linked to non-core items is similar to the impact that this line had already had in the first half. Therefore, the growth in adjusted EBITDA in Q3 is almost entirely attributable to the recurring components. This clearly illustrates how, despite a more gradual commercial uptake, EBITDA absorption from startup of diversification initiative remained under control, mainly thanks also to a focus on the related fixed cost. We are now on the following slide, slide 9, where you may see an increase in adjusted EBITDA that reached €146.1 million with a €69.2 margin, impacted also by proceeds from asset sale and tax-credited on development projects included in other income. Just below, we report no recurring costs as well as DNA and financial charge.

While the DNA continued to grow due to increased CAPEX, financial charge has slightly decreased, reflecting lower interest rates. So, basically, same trend that we have already commented in the previous call. Moving to slide 10, let’s have a look to the net financial position, including €26 million of IFRS leasing net debt amounts to €164 million. Compared to the end of 2024, the net debt increased by almost €40 million, including €90 million of dividend payment, with cash generation, therefore, remaining healthy and broadly in line with the previous year. Free cash flow to equity stands at €94 million over the nine months. As per the outlook, let me turn the floor back to Roberto.

Roberto Cecatto, CEO, Rai Way: Thanks, Adalberto. Let me conclude with the expectation for the last part of 2025, confirming our full-year guidance for an increase in adjusted EBITDA driven by growth of the traditional business, even slightly above the previous expectation, mainly thanks to better cost control, only partially offset by the anticipated absorption from the startup phase of diversification initiatives, and positive contribution from higher non-core benefits compared to 2024. As per the CAPEX, we confirmed a higher level of maintenance investment following the mentioned extraordinary activities on towers and seasonality on cybersecurity EP network refresh, already visible in the nine months. But let me say that over the industrial plan cycle, we obviously confirmed our average maintenance CAPEX on revenues ratio of €6.5%. In parallel, development CAPEX will be below the €40 million spent last year, as commented before. So, that’s all on our side.

We can now open the line for the Q&A session. Thank you.

Conference Operator: Thank you. We will now begin the question and answer session. To enter the Q4 questions, please click on the Q&A icon on the left side of your screen. When announced, please click Continue on the pop-up window. If you are connected in audio only, please press Star and 1 on your telephone. The first question is from Giorgio Tavolini of Intermonte SIM. Please go ahead.

Giorgio Tavolini, Analyst, Intermonte SIM: Hi, good evening, and thanks for taking my questions. The first one is on your development CAPEX projection. I mean, this should imply lower revenues or slower revenues ramp-up from diversification activities next year, so particularly compared to your assumption in the business plan. So, I was wondering the consensus currently foresee some €5 million revenues on the data center initiative and €7 million in 2027. Then, also in solar production, you should expect some few million revenues next year and up to €5 million in 2027. So, I was wondering if you do confirm these revenues under the new CAPEX assumption. The second one is on the fact that in the recent days, there has been considerable noise about the risk of MSA renegotiation across telecom towers, which has significantly affected stock prices.

You are currently negotiating a deal with EI towers, which will, of course, involve the individual MSAs with your anchor tenants, Rai and Mediaset. So, could you remind us what level of contractual protection your MSAs provide? For example, whether they include all-or-nothing, closest, preferred supplier, most favorite client provisions, or other similar protection, and whether there are any legal terms governing the early notice for renewal discussions. Thank you.

Roberto Cecatto, CEO, Rai Way: So, let me take the first question, Giorgio. And yes, of course, the fact that there are some factors that could bring an impact on 2027 revenues, even if I would prefer to focus on EBITDA. But, of course, the impact are the same ones that characterize the dynamics on the first nine months that we have commented. Let me just remember the main topics: the permit timelines for IPA scale, diversification dynamics, referring to edge and CDN, with more gradual growth and consequent rephasing of some investment on the new edge to improve alignment with demand and, of course, meet expected returns. Then, I would also add the delay in the permits that we commented for some lands involved in the photovoltaic project. So, let me elaborate more on these three topics in order to clarify the potential impact.

And let me also add a few considerations on the traditional business that, of course, as you have seen also in the slide number 8, is continuing to give a positive contribution. So, on the IPA scale, the approval process is taking one year longer than we have originally assumed in the plan, but here, really, the impact on revenues and adjusted EBITDA in 2027 is really negligible. Here, it is more a matter of a different distribution of investments. For the rest of the diversification initiatives, edge and CDN, the fundamentals and the quality of the architecture remain, of course, solid. There is certainly more gradual uptake, but a catch-up could come both from the result of the more targeted commercial approach we have put in place and also from the contribution that could come theoretically from the AI.

As I mentioned, a few words on the traditional business, albeit with various moving parts, less development such as MOOX 12 that, of course, is not depending by us, but better performance of the inertial business on tower hosting and, above all, efficiency. So, the traditional business is currently slightly above expectation and 2027 targets. Then, last, with regard to photovoltaic project that I’m treating separately from the traditional business, we currently are seeing a time lag of approximately one year in investment. Therefore, we do not expect major change in cumulative CAPEX, only different yearly distribution during the business plan time horizon, but with full impact on EBITDA to start in 2028. So, only a temporary gap.

So, I prefer to give you an overall view of all the impact, just to clarify that, assuming, of course, no change in the macroeconomic assumption referring to CPI and energy price, we’re talking about, all in all, very limited risk in absolute number, low to mid-single digit on the EBITDA, with a few tens of million of lower investment likely moved to the following year. However, we are working and we have already identified alternative levers to mitigate the impacts and strive towards the announced 2027 EBITDA target, which remain, of course, our goal. Just to give you an example of some levers: greater internal efficiencies, contribution from potential non-organic growth, and possible one-off from disposal of non-core assets.

Conference Operator: The next question is from.

Roberto Cecatto, CEO, Rai Way: Just one second. We’ll have to answer to the second question for Giorgio. Could you just repeat the main second question we did in relation to the.

Giorgio Tavolini, Analyst, Intermonte SIM: I was wondering if your master service agreement foresee good protection, good contractual protection in the event of a renegotiation that are now on the table of some telecom tower costs. So, if there are all-or-nothing closes, preferred end supplier and most favorite client provisions, or I don’t know if there are legal terms governing the early notice for renewal discussion. I mean, I ask this because you are renegotiating a deal with EI towers that will involve your individual master service agreement with your anchor tenants.

Roberto Cecatto, CEO, Rai Way: Giorgio, you are referring to the MSA we have in place with Rai, correct?

Giorgio Tavolini, Analyst, Intermonte SIM: Yes, exactly. Just a reminder because I can’t recall all the stuff. Thank you.

Roberto Cecatto, CEO, Rai Way: Okay. And listen, you mentioned some protection clauses that usually we see in the telco contracts. Let me say that when looking at our MSA with Rai, let me remind that we have a tacit renewal clause in 2028, then followed by additional seven years of contracts. We have exclusivity on new services. Let me remind also that we are today the only operators able to guarantee a 99% population coverage that is required by law for the main multiplex of Rai. And then let me also add that Rai is and will remain, according at least to the decree of the Prime Minister, not only a client but also our shareholder. So, in life and business, renegotiations are always possible, but there are all the elements that I mentioned to keep in mind.

Unidentified Speaker, Rai Way: Yes. And consider also what is written in the PCM that underline the strategic relevance of the governance by Rai of this kind of infrastructure. So, it’s something that is a little bit different in terms of relationship with our assets.

Giorgio Tavolini, Analyst, Intermonte SIM: Okay. Very clear. Thank you.

Conference Operator: The next question is from Andrea De Vita of Intesa San Paolo.

Fabio Pavan, Analyst, Mediobanca: Yes. Hello to everybody. Thank you for taking my question. So, a follow-up on Giorgio’s question based on the current evolution vis-à-vis your targets for 2027 and your answer. So, just to understand your focus, will be it to protect the free cash flow 2027, the EBITDA 2027, or let’s say the whole philosophy and target longer term in terms of total investment and the total worth of project?

Roberto Cecatto, CEO, Rai Way: Almost all. I would say, of course, as I mentioned answering to Giorgio, rather than focusing on revenues, I mentioned we are giving an important effort in order to confirm the number that we include in our 2027 business plan as concerning the adjusted EBITDA. And then, of course, we will focus on all the key elements and all the key metrics in terms also of cash flow and shareholder remuneration.

Unidentified Speaker, Rai Way: But I think that in other numbers, it is harder to square all of that. So, it’s a kind of trade-off for 2027 because we are not making the investments in time to generate the related revenues, as I understand.

Roberto Cecatto, CEO, Rai Way: Yes. As I mentioned, we are seeing—let me elaborate again on this—we are seeing a small gap in absolute number, low to mid-single digit for coming from the different components that I commented talking, answering to Giorgio. But again, of course, as I mentioned, this low to mid-single digit potential gap on the EBITDA is coming with a few tens of millions of lower investments. But these are, as I commented, in part, temporary effects. So, as concerned, for example, the photovoltaic project, we have a delay of one year. So, we will have the same investment even if the run rate level will be in 2028. So, just a postponement. And in any case, in order to confirm the target for 2027, we are working on mitigation measures. As I mentioned, we, of course, as usual, have and put a great effort in terms of internal efficiencies.

We then can look at some contribution from non-organic growth and, although less relevant, also some one-off benefits, for example, from disposal of non-core assets. So, this is the main impact that we are seeing and where we are working in order to confirm the key guidance that for us is the EBITDA. But then, of course, we are taking under control the cash flow and the shareholder remuneration.

Unidentified Speaker, Rai Way: Okay. Thank you. And just a very little question on Q3. So, very interesting, the waterfall slide on EBITDA gap. Just wanting to understand the figure for the third quarter. So, if more or less organic growth was reported growth, and was it the case that the negative gap in diversification was offset by another positive contribution from non-organic items?

Roberto Cecatto, CEO, Rai Way: The third quarter is basically the growth of the third quarter is all organic growth. I didn’t get your last point. If you can repeat.

Unidentified Speaker, Rai Way: So, it is plus three, let’s say plus two organic, minus one diversification, plus one non-organic. Is this the math? Or plus two, zero and zero? Just to understand, to be clear, if also in Q3 there was an impact, a positive impact from non-organic items in third quarter alone.

Roberto Cecatto, CEO, Rai Way: You have to take into consideration that the level of the non-core items that we have included here is more or less the same of the level that we had in the first half. So, excluding this, basically, you may see that there is, if I see the number, more or less compared to the growth that we had in the first half, we will have an additional million euro of organic growth, more or less.

Unidentified Speaker, Rai Way: And so, there was no—the other part is there was no negative incremental losses from diversification in Q3 alone?

Roberto Cecatto, CEO, Rai Way: In Q3, the impact of the diversification was not so big. Yes, you’re right. You’re right.

Unidentified Speaker, Rai Way: Okay. Okay. Thank you.

Roberto Cecatto, CEO, Rai Way: You’re welcome.

Conference Operator: The next question is from Milo Silvestre of Equita.

Milo Silvestre, Analyst, Equita: Good afternoon, everybody. My question concerns the potential integration between Raiway and E-Tower. So, the initial remark, you stated that at this point in time, it is difficult to make a forecast on the outcome. So, on this sentence, I mean, does it imply that there could be complications?

Unidentified Speaker, Rai Way: No. Let me say that I think that we cannot consider that situation a complication. As I told before, we are not the only player involved in this process. There are also the shareholders, the ones that assigned the MOU that are examining other aspects. So, we have to wait. It is a time-consuming activity, let me say, but we have to rely on the updated timeline of the MOU. Let me say that if there was some blocking situation, there was no reason to renew and extend the MOU at the end of September.

Milo Silvestre, Analyst, Equita: Thank you.

Conference Operator: The next question is from Fabio Pavan of Mediobanca.

Fabio Pavan, Analyst, Mediobanca: Yes. Hi, good evening. I would have a couple of questions. First of all, just to clarify on this, we can say that for the time being, 2027 EBITDA targets are confirmed despite some delay in investment. That is my first question. Second question, thank you for the clarification on your comment on consolidation. My question for you is, are you still confident that this could happen or you are much more concerned with respect to some months ago? My final question is, considering what you just told us on the data center and provided that appetite is at very high level for this kind of asset you were mentioning before, sector is looking for consolidation as well, would you be open to consider any offer for this asset? Thank you.

Roberto Cecatto, CEO, Rai Way: So, Ciao Fabio, let me take the first question. Yes, the 2027 EBITDA guidance, in light of what I have explained, is, of course, confirmed.

Unidentified Speaker, Rai Way: The second question, let me say, to be honest, I cannot answer if I’m confident or concerned. I pass to the third question. Data center, let me say, we have a long way to go with the data center initiative. We have not considered selling it until now. We are focused on maximizing the value of what we have built and what we are planning, the hyperscale data center. Let me say, a more added value because they had synergies with our other assets, such as fiber and CDN, and it’s something that we are viewing in the market approach up to now.

So, it’s comfortable for a customer to have the possibility to have a colocation site, some IaaS services, but with a very good backbone connection, connection that is not only a connection to a fiber but a connection to all the mixed point of presence in Italy, also with some regional peering. And let me say also with the CDN that is an accelerator, is an highway for high-level performance needs. So, the situation could be different, as we told in some other call, if we speak about partnership, including industrial ones, which may consider following the discussion with potential customers. Thank you. Very clear.

Conference Operator: As a reminder, if you wish to ask a question, please click on the Q&A icon on the left side of your screen or press Star and 1 on your telephone. For any further questions, please click on the Q&A icon or press Star and 1. The next question is a follow-up from Giorgio Tavolini of IntermonteSim. Mr. Tavolini, your line is open.

Giorgio Tavolini, Analyst, Intermonte SIM: Hi. Sorry again for asking this clarification, but I guess you have just said that your EBITDA guidance for 2027 is confirmed. Before, you said that you expect a low to mid-single digit impact from lower revenues due to the diversification impacting EBITDA. So, I was wondering if your free cash flow target is confirmed rather than the EBITDA. So, what is the right metrics to look at? Thank you.

Roberto Cecatto, CEO, Rai Way: Our target is the recurring free cash flow and, of course, is confirmed because it includes, of course, the impact of the adjusted EBITDA and the current level of our maintenance capex. So, fully confirmed.

Giorgio Tavolini, Analyst, Intermonte SIM: Okay. So, on the EBITDA, we should see some, let’s say, some impact that is offset by lower capex on the planned time frame. Is that correct?

Roberto Cecatto, CEO, Rai Way: As I mentioned, we have the delay in some initiatives, photovoltaic, the commercial uptake on the edge of the center is giving a negative gap that, in this case, is limited. So, part of this gap is already offset by the good performance of our traditional business. There is, as I mentioned, a delay in the photovoltaic project. But all in all, if from one side we see a potential gap from low to mid-single digit in terms of potential impact on the EBITDA, because it’s not material, we are already working in order to find levers to mitigate and offset this impact.

Giorgio Tavolini, Analyst, Intermonte SIM: Okay. Thank you very much.

Roberto Cecatto, CEO, Rai Way: You’re welcome.

Conference Operator: For any further questions, please click on the Q&A icon on the left side of your screen or press Star and 1 on your telephone. Gentlemen, there are no more questions registered this time.

Unidentified Speaker, Rai Way: It’s fine. So, thank you all for participating, and we are available for any follow-up questions. Have a good evening.

Conference Operator: Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your devices. Thank you.

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