NFON Stock price
Is NFON a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = €56.14m | Revenue (TTM) = €87.40m
Market Cap = €56.14m | Estimated Revenue = €86.22m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = €60.43m | Revenue (TTM) = €87.40m
Enterprise Value = €60.43m | Forward Revenue = €86.22m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 SBC | in % Revenue
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to revenue.
🧮 How is it calculated?
SBC as % of Revenue = (SBC ÷ Revenue) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of revenue shows how heavily a company relies on equity-based compensation and how significant this form of compensation is relative to the size of the business.
🧮 Calculation
🎯 What does this mean for investors?
- A lower figure is generally positive: Stock-based compensation is relatively small compared with the company's revenue.
- A high figure can indicate greater reliance on stock-based compensation and a higher potential risk of dilution. However, it is also important to consider whether the company offsets dilution through share buybacks.
- The trend over time should also be considered. A high but declining percentage presents a different picture from a persistently high or increasing percentage.
- A single-digit SBC-to-revenue ratio is not unusual among many growth-oriented and technology companies.
📘 SBC as % of FCF
📈 What is it?
SBC (Stock-Based Compensation) refers to equity-based compensation granted by a company to its employees and executives. The percentage shows SBC relative to free cash flow (FCF).
🧮 How is it calculated?
SBC as % of FCF = (SBC ÷ Free Cash Flow) × 100
🏛️ Why is it important?
Stock-based compensation is a real cost factor for shareholders. It can increase the number of shares outstanding and therefore dilute existing shareholders. The percentage of free cash flow shows how significant SBC is relative to the cash generated by the company. Since SBC is non-cash compensation, it is typically not deducted as a cash outflow when calculating FCF.
🧮 Calculation
🎯 What does this mean for investors?
- A lower value is generally favorable. Stock-based compensation is relatively small compared with the company's cash generation.
- A high value means that SBC represents a significant portion of the company's reported free cash flow, even though SBC itself is non-cash.
- The higher the value, the more significant SBC can be as an economic cost to shareholders, particularly when it results in share dilution.
📘 SBC Growth 1Y
📈 What is it?
SBC Growth 1Y shows how much a company's stock-based compensation has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
SBC Growth shows whether stock-based compensation is becoming more or less significant for shareholders. If SBC increases significantly, it can lead to greater shareholder dilution over time. At the same time, SBC is a non-cash expense that reduces earnings on the income statement but is added back in the cash flow statement.
🧮 Calculation
🎯 What does this mean for investors?
- A high positive value is generally negative, as rising SBC can increase the burden on shareholders, particularly through potential dilution.
- What matters is whether the development of SBC is sustainable over the long term. Some level of SBC is common among many growth and technology companies.
📘 Share Count Growth 1Y
📈 What is it?
Share Count Growth 1Y shows how much the number of shares outstanding has increased or decreased over a one-year period.
🧮 How is it calculated?
🏛️ Why is it important?
The number of shares determines how many shares the company's earnings and assets are distributed across. If the share count decreases, existing shareholders' relative ownership increases. If it increases, existing shareholders are diluted. The metric therefore makes dilution and share buybacks directly visible.
🧮 Calculation
🎯 What does this mean for investors?
- A negative value is generally positive, as the number of shares outstanding is decreasing.
- A positive value indicates dilution of existing shareholders.
- A declining share count is not automatically positive: It also matters at what price the shares are repurchased and how the buybacks are financed.
📘 Shareholder Yield
📈 What is it?
Shareholder Yield measures how much capital a company returns to shareholders or uses to reduce debt relative to its market capitalization. It goes beyond dividend yield by also including share buybacks and debt reduction.
🧮 How is it calculated?
🏛️ Why is it important?
Dividend yield only tells part of the story. Companies can also return capital through share buybacks, while reducing debt can strengthen the balance sheet. Shareholder Yield combines all three components into one metric, giving investors a broader view of how a company uses its capital.
🧮 Calculation
🎯 What does this mean for investors?
- A higher Shareholder Yield generally indicates more capital being returned to shareholders or used to reduce debt.
- The mix matters: dividends, buybacks, and debt reduction can affect shareholders in different ways.
- Share buybacks are most beneficial when shares are repurchased at attractive valuations.
- Investors should also consider whether dividends, buybacks, and debt reduction are sustainable over time.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
NFON Stock Analysis
Analyst Opinions
8 Analysts have issued a NFON forecast:
Analyst Opinions
8 Analysts have issued a NFON forecast:
NFON Events
Past Events
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MAY
21
Q1 2026 Earnings Call
5 months ago
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APR
16
2025 Earnings Call
6 months ago
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NOV
20
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
NFON — Q1 2026 Earnings Call
1. Management Discussion
Good morning, everyone, and welcome to NFON's Q1 2026 Earnings Call. Thank you for joining us today. My name is Friederike Thyssen, Vice President, Corporate Affairs and Investor Relations, and I'll be your host for this session, which we are holding together with NuWays.
As usual, we published our quarterly statement and presentation earlier this morning on our website under Investor Relations. Today's presentation will be led by our management team, Andreas Wesselmann and Alexander Beck. Let me guide you briefly through our today's presentation. Andreas Wesselmann, our CEO, will give you a short general business overview.
He will then hand over to Andreas -- Alexander Beck, sorry for that, who will present the financial performance in detail. Afterwards, we will open the floor for your questions. Please note that questions can only be asked live during the Q&A session at the end of the presentation. [Operator Instructions] -- for that, I hand over now to Andreas to start the presentation. Over to you.
Yes. Thank you, Friederike, and also from my side. Hello, everyone, and thank you for joining us in the call today. The beginning of '26 was challenging. The overall market environment remains demanding with continued macroeconomic uncertainty, cautious customer spending and slower decision-making processes across many customer segments. At the same time, we are seeing that this is not only a temporary cyclical slowdown.
The software and communications market is currently undergoing a broader structural transformation, driven by the fast-evolving AI technology progress, the growing importance of action-driven AI agents and the increasing importance of digital sovereignty in Europe.
In the recent weeks, this structural shift has clearly speeded up. As a consequence, we are accelerating our transformation into an AI-first company with a clear focus on AI-driven growth across our entire portfolio, spanning intelligent assistance, customer engagement and business telephony, while also capitalizing on the increasing relevance of digital sovereignty.
We deliver AI-powered solutions that solve real customer problems. For example, human-speaking voice bots acting as 24/7 AI receptionists with integration into existing business systems and communication solutions or AI agents structuring and delegating inbound customer traffic as well as initiating follow-up actions or AI services doing relevant call summaries with automatic language detection or to the point AI knowledge bots answering all kind of content questions.
These examples illustrate the business value of the AI-based solutions we offer today. We deliver these AI innovations combined with trusted European cloud communications expertise and EU-based data processing. And we see this combination as an increasingly important competitive advantage for customers and partners.
A great example of our focused innovation strength is the productive release of our own developed text-to-speech AI model based on the in-depth and long-standing experience of the Votaro team.
This solution delivers differentiating high voice quality combined with flexible deployment models, cloud and on-premises and EU-only data processing. It confirms our innovation speed, strengthens the technological and commercial independence and opens up additional growth opportunities across customer interactions and agentic AI use cases.
At the same time, we are continuously expanding the partner and customer enablement around the AI solutions portfolio. We believe people need to experience how the solutions work themselves. Therefore, and following the successful launch of the hands-on format during our Maxis Partner Day, we are now extending this concept into a so-called hackathon roadshow, starting with Germany as also announced in our press release mid-May.
During a complete day, our partners implement AI solutions for their specific customer use cases, leveraging our AI solution portfolio. To conclude, the driving objective is clear: accelerate the AI transformation, drive adoption, strengthen our partner ecosystem and translate AI-driven innovations into scalable commercial opportunities. And with this, let me hand over to you, Alexander, taking us through the financial performance of the first quarter.
Yes. Thank you, Andreas. Hello, everyone, and also from me, a very warm welcome, and thank you for joining today. Let me walk you through our financial performance for the first quarter of 2026, and I will start with a brief overview. As already mentioned, the market environment remained challenging, which was reflected in our revenue development.
Total revenue declined by 2.3% year-on-year to EUR 21.6 million, while adjusted EBITDA came in at EUR 1.8 million. At the same time, the quality and resilience of our revenue base remain strong. Recurring revenues accounted for 93.8% of total revenues, underlining the predictability, stability of our business model. Our seat base declined by 3.1% year-on-year to around 641,000 seats, reflecting the muted market environment on the one side and slower customer investment decisions.
However, blended ARPU increased slightly to EUR 10.04, supported by pricing measures and a higher share of premium and AI-based solutions. Looking at the revenue development in more detail. Total revenue amounted to EUR 21.6 million. Business telephony continued to represent the core of our business, accounting for more than 90% of total revenues. At the same time, our newer growth areas continued to gain traction with customer engagement and Intelligent Assistant together contributing around both 5% of revenues.
Both Customer Engagement and Intelligent Assistant achieved a year-on-year growth of more than 10%. Recurring revenues in Q1 declined by 2.5% year-on-year to EUR 20.2 million, mainly reflecting the softer market environment and lower seat development in our business telephony portfolio. At the same time, non-recurring revenues remained stable at EUR 1.3 million, supported by continued project business. Overall, our revenue mix remains highly resilient with recurring revenues continuing to account for around 94% of the total revenues.
Moving to profitability and cost development. Material expenses increased slightly by 3.5% year-on-year, resulting in a material cost ratio of 14.8% compared with 14.0% in the prior year period. This was mainly driven by lower recurring revenues combined with somewhat higher hardware-related business.
Despite the softer revenue development, gross margin remained at a strong level of 85.2% compared with 86.0% in Q1 2025, underlying the scalability and resilience of our platform business. Other operating expenses decreased slightly year-on-year to EUR 7.3 million, reflecting disciplined cost management, lower commissions and reduced consulting expenses. At the same time, we continued to invest selectively in our growth initiatives, particularly in AI positioning and product marketing and in partner enablement activities.
Looking to personnel costs, our personnel expenses increased by 3.9% year-on-year to EUR 9.5 million compared with EUR 9.1 million in the prior year period. This development mainly reflects targeted investments in strategic growth areas, particularly artificial intelligence and product development capabilities. The average number of employees increased slightly to 429 employees compared with 425 in Q1 the year before. At the same time, we maintained disciplined personnel cost management and after adjustments of around EUR 0.1 million -- these were mainly related to stock option programs and harmonization measures.
Personnel expenses came in at EUR 9.4 million and remained broadly in line with our strategic priorities and our plans. Looking to adjusted EBITDA. Adjusted EBITDA amounted to EUR 1.8 million in the first quarter compared with EUR 2.6 million in the prior year period. EBITDA amounted to EUR 1.7 million versus EUR 2.5 million in Q1 '25. The decline primarily reflects the lower revenue base, combined with continued investments into strategic growth areas, especially AI and product innovation.
At the same time, our adjusted EBITDA margin remained positive at 8.3% compared with 11.8% in the year before, demonstrating ongoing financial discipline despite of the more challenging environment. Adjustments remained low at EUR 0.1 million and were mainly related again to stock option programs and harmonization measures.
Turning to cash flow and liquidity. Our operating cash flow amounted to EUR 1.6 million in Q1 and therefore remained only slightly below the prior year level of EUR 1.8 million despite lower earnings. This development was supported by high disciplined working capital management. Investing cash flow amounted to minus EUR 0.8 million compared with minus EUR 0.7 million in the prior year period, mainly reflecting capitalized developments related to new products and enhanced functionalities. Financing cash flow totaled minus EUR 0.8 million versus minus EUR 0.5 million in Q1 2025, primarily reflecting lease and loan repayments.
With this, cash and cash equivalents remained solid at EUR 12.9 million at the end of the quarter 1 compared with EUR 13.6 million in the prior year period, providing a strong liquidity base to fund operations and strategic initiatives. Our free cash flow reached EUR 0.8 million, underlining disciplined cash management and our ability to continue funding investments from operating performance.
Looking ahead, the overall market environment remains demanding and visibility continues to be limited in parts of the market. At the same time, we continue to see strong structural growth opportunities driven by AI adoption, automation and digital sovereignty requirements. Against this backdrop, we confirm our outlook for the full year 2026.
We continue to expect total revenue growth in the low to mid-single-digit percentage range. and an adjusted EBITDA of slightly above EUR 12 million. This follows total revenues of EUR 89.1 million and adjusted EBITDA of EUR 12.6 million achieved in the financial year 2025.
At the same time, we continue to closely monitor market developments and the pace of recovery while remaining focused on disciplined execution and the further expansion of our AI-driven growth areas.
Our focus remains on balancing disciplined execution in the current environment with continued investment into the strategic growth areas that will drive NFON's next phase of development. With this, thank you very much. I will hand back to Friederike to open up the Q&A session.
Thank you very much, Alexander and also Andreas for the detailed insight. So we will now open the line for questions. [Operator Instructions] We are now looking forward to the first question, Ross Jobber, Edison.
2. Question Answer
I wonder if you can talk a little bit about how the business that you're moving into, if I can use that expression, differs from your classic business telephony. So as you move more into intelligent assistant and AI.
And the sort of things I'm thinking about is the level of investment required to grow that business compared to your traditional one, the level of the organization that you sell into selling intelligent assistant and AI solutions as opposed to, say, more simple business telephony. Yes. So just if you could just help to characterize the challenges, not just with business telephony, but the challenges associated with this new business and how it differs from your old one.
Yes. Thanks a lot for your question, Ross. So let me start with a bigger picture. I think what we are currently seeing is not specific for the business communications area. If you take a broader perspective on all the current relevant Software-as-a-Service players, you have one consistent theme, namely that going forward, there will be a transition from user-based licenses and pricing towards more, I would say, it, consumption or value-based pricing.
And if you map that to our industry, that means then that there will be a transformation from what is classical user licenses. In our terms, it's called then seats towards other revenue streams. And we are clearly seeing that as well. For example, by monetizing the AI agents that I see, that has nothing to do then with seats any longer. It's then by the service, it's then by the minute, it's by the traffic that is created. It's by the integration in the business systems, et cetera, et cetera.
And for us, as you -- and maybe I'll stop there as a general overview. That's the structural dimension, and this is where we, with our portfolio, and I outlined several examples, have a coverage along our specifics in the business communications area where we address all these new things, where it's also a playing together of, you could say, human agents with virtual agents -- and this is exactly where our core competence lies and that combination in playing that together and also by keeping a certain core expertise, and I mentioned our own developed new AI service for the speech service because that's absolutely essential also as a differentiator and also on the commercial side because currently, if you take a look at the market, you see a lot about, and this is also true for coding that the more tokens you consume, the more exponential the price points grow.
And therefore, from our perspective, it's absolutely core that we own part of our value story with core AI services we own and operate ourselves. And maybe as a last point, to also do this in a sovereign environment. So, we are really operating that under EU boundary conditions. There is no call out to U.S. vendors for these capabilities, and this is something where we feel that as a third component gets also more and more relevant. Maybe that gives you a holistic approach on how the structural information and structural transformation looks like and how we are seeing that.
Yes. No, absolutely. I suppose if I could sum it up in one little thing. Do you think that in the future, let's say, 5 or 10 years in the future, there will be a requirement for NFON to understand their customers' business deeper because they're providing more value-added solutions than perhaps 5 or 10 years ago when they were providing a business telephony solution, which maybe didn't require them to quite understand the business in the same way.
Yes, I would say a clear, yes. It comes by nature because the more in the communication you interact between humans and then voice and virtual agents, the deeper you get in the core business processes.
We already see it to now that in all our new AI solutions that we sell all of them are integrated in existing or newly defined business processes. So the topic of communication from my perspective, strategically in the long term that you mentioned will be more important than it has been maybe in the past where it was just a call.
Next in line, Philipp Sennewald, NuWays.
This is Philipp from NuWays. First question is on the confirmed guidance, especially the bottom line. Can you help us building the bridge there? Is it purely hope for H2 recovery based on AI? Or how much visibility do you have on improvements that help you reach that bottom line guidance?
Yes. Thank you, Philipp, for your question. So first of all, yes, we have implemented a clear defined package of revenue and efficiency measures. So, revenue, sales on the one side and cost on the other side. And that is already reflected in our forecast now. This includes, on the one side, targeted revenue initiatives and on the other side, also structural cost adjustments.
Important, the majority of the impact is expected in the second half of the year. So the initiatives scale progressively. We, therefore, expect a visible improvement of -- over the course of the year with revenue growth turning positive from Q3 on and accelerating further in Q4 as AI monetization and commercial initiatives gain traction.
Okay. Understood. Regarding expenses, I mean, we see revenues down, but personnel costs up, you have more employees than a year ago. Are you -- do you continue to hire into AI and product development? And where do you see efficiency potential on that end?
Well, you are right. We are slightly -- we have slightly increased our headcount from 425 to 429, while the revenues were declining. So as we said before several times, we have the strong plan and the strong idea to go on investing into our growth areas, and this we also will continue.
But obviously, we will also adapt our plans to the reality, and we will adapt also our cost planning to the reality, and we will slightly adjust and this is what I said before. So we have cost and efficiency measures on the one side, but it's important to state we also have a bucket package of measures on the revenue side on the other side in order to drive revenue growth from half year 2 on.
Yes. Maybe, Philipp, to add the picture. So we see one is, as Alex said, the dedicated investments still in our growth areas. The other topic is internal shifts on the growth-related areas.
And the third topic is, of course, using also ourselves the AI technology to increase productivity massively. So, it's a combination of those things that give us, from our perspective, the right investment in the growth areas as we needed to have on our outline plan.
Okay. Fair enough. And one last is on general AI strategy. Maybe can you give us a better picture on how you approach your client base? And maybe I don't know if you can provide that figure, but out of here around about 640,000 seats, what percentage already has some kind of AI solutions embedded?
So, the -- if we start with the -- maybe the latter one. As you know, we have our AI knowledge bot, which we call the NFON Intelligent Assistant. So think about of intelligent knowledge bot that you can ask any kind of product question. It's part of every deployed solution already.
So, in that sense, everyone that uses our cloud telephony has access to that knowledge bot. We decided consciously that this is not priced separately, but that this is an entry point to all further things. So, we have already a good entry point as you said there. And then maybe you have to quickly help me what was the first part of the question that I don't miss it?
In general, how do you approach customers precisely? And your -- how many of your partners, for example, are actively promoting those products to their clients.
Yes. I think coming to this question, I think what is a key approach and key learning is to break it down to the dedicated challenges and use cases that they have. So what we are currently doing is if you want a transitioning from a more product-focused feature-like rollout to a solution and problem-solving approach.
Like if you take it very, very simplistic, you can, on the one hand side, talk about you have a call summary and then you get it or you talk about you have an incoming call and after that, you get the core assets out, you get -- if you, for example, if you, for example, buy something, you have the buyer name, you have the duration of the call, you have the interaction, you have the value, et cetera.
So, you really get structured value out of it. I take the example of the receptionist we call NIA Front Desk, which is then a 24/7 available, which is a very easy pitch to sell because most of especially the midsized customers have no capacity and no person to do that. And then they can answer customer calls and don't lose on the opportunity, and you can easily do calculations how this is done.
So, it's a combination of what is the concrete problem that you solve with very fast showing the benefit and then also calculating the positive business impact that is worth that investment. So, it's a different go-to-market. And therefore, also the partner education, which I mentioned, is extremely important.
So, we work very, very closely together with our partner ecosystem to enable them also in that way because they see the same demands from their customers as well. But yes, it's also a transition on the way how we sell. I think this is not specific for us either. I think it's a phenomenon that you see across the whole industry.
Next in line is John Karidis.
It's John Karidis from Deutsche Bank. I just have a numbers question, please. Not withstanding what you said up until now, a lot of the revenue still comes from seats. So may I please know how many seats you had at the end of the first quarter, specifically in Germany and separately in the U.K.
Yes. First of all, thank you for your question, John. We can. So overall, we had in Germany, more or less -- I'm rounding, more or less 470,000 seats end of quarter 1. In the U.K. we had roughly 70,000 seats.
Right. That's great Sorry, go ahead, sorry.
No, no. This was the concrete answer of the questions concerning the seats. So overall, your question was if the bigger part of the revenue is still coming from the telephony business. You are right. I think I said it during the presentation. So roughly 90%, 9-0 percent is coming from business telephony coming out of the seat and so on.
And then we have our 2 growing pillars, which are growing, one customer engagement and the other one is Intelligent Assistant -- around AI, around the bots and so on. And in these 2 growing areas, we achieved both together roughly 10% of the business. But both of them are also growing double-digit wise. And this is a development what we expected and where we are actually happy with.
Okay. Next in the line [indiscernible].
I have 2 questions a bit related to the installed base. First, on the current situation. You mentioned the selective customer losses. Are these losses are concentrated in a specific segment, geographies or partner channels, sorry.
And the second on what the expected payback period on this -- on the incremental marketing spend and from which quarter should we expect to see a tangible impact on order intake, seat growth and retention?
Thank you very much, [ Maximilian ], for your question. So I'll start with the seat development. So the current decline in seats is mainly driven by 2 factors. Firstly, a still cautious market environment on the one side with the restrained customer investment behavior.
And secondly, on the other side, also ongoing harmonization measures and portfolio optimization. When we talk about geographically countries, what I said right now, this counts largely for Germany, also for the U.K. When we take a look to our portfolio in other countries, the situation is slightly different, even more positive.
For instance, in Austria and also in Italy, 2 of our biggest markets, we see significantly increasing trends in our customer base also in seats and also in revenues. Yes, so much to the seats.
The second question was expected payback and when we see tangible input. So first of all, our marketing invests were higher in Q1. This is right. But this has several reasons. On the one side, yes, we had Andreas mentioned it before, we had several initiatives like hackathons where we wanted or where we still want to enable our partner base in order to better understand and to better sell at the end of the day, our new functionalities.
So, what we have seen last year in 2025, NFON has increased significantly its speed in terms of innovation and in terms of release of new products and new functionalities. And yes, this higher innovation speed also required different formats in enabling our partners to sell them. And therefore, we had several initiatives in Q1, which led at the end of the day to higher marketing costs.
Your question, when will we see tangible input in tangible output in terms of profitability, in terms of revenues. So clearly, we have planned a forecast, current actualized forecast. And yes, we see quarter 2 still complicated, but we expect a significant trend from Q3 on.
I hope this answers your questions, [ Maximilo ]. If not, please go ahead.
Okay. Good. So are there any final questions from your side? Because so far, I do not see any or some questions? No. So that seems to be it. So thank you again for your time, your interest and your continued engagement with NFON. I'll hand over to Andreas for a short closing statement.
Yes. So, thank you to everyone joining the call. Thanks for the questions. Thanks for the attention. I think we clearly and transparency laid out where we are. We have a clear plan going forward.
We are very confident to execute on that plan and to leverage the growth opportunities related to the structural transformation and AI innovation-driven companies with our ambition to transform that NFON really to an AI-first company. And with that, I wish you all a great day. Thanks for attending and talk to you soon.
NFON — Q1 2026 Earnings Call
NFON — 2025 Earnings Call
1. Management Discussion
Okay. Good morning, everyone, and welcome to NFON's Full Year 2025 Earnings Call. Thank you for joining us today. My name is Friederike Thyssen, Vice President, Corporate Affairs and Investor Relations, and I'll be your host for this session, which we are holding together with NuWays. As usual, we published our annual report and full investor presentation earlier this morning on our website under Investor Relations. Today's presentation will be led by our management team, Andreas Wesselmann, our CEO; and Alexander Beck, our CFO.
Let me guide you briefly through today's presentation. Andreas Wesselmann will walk you through the strategic and operational developments, including our progress in AI and product innovation. He will then hand over to Alexander Beck, who will present the financial performance in detail. Afterwards, we will open the floor for your questions.
[Operator Instructions] And now I'll hand over to Andreas to start the presentation. Over to you.
Yes. A warm welcome to everyone, and thank you Friederike. So let me start by putting the year 2025 into a broader perspective.
So what we are currently seeing is not just a cyclical slowdown, but a combination of a short-term macroeconomic pressure and at the same time, the structural shift in the software and communications market. On the one hand side, the macroeconomic environment remains clearly challenging. So especially in the SME segment, customers are acting more cautiously. Investment decisions are taking longer. Projects are being prioritized more strictly. And in many cases, we see a stronger focus on the immediate return on investment rather than a long-term transformation. And as a result, demand is not disappearing, but is becoming less predictable and more delayed. At the same time, we experienced a fundamental technological shift driven by AI.
So what we are seeing is that the role of software is changing. So customers are no longer looking for stand-alone tools, but increasingly integrated solutions that deliver measurable outcomes, automate processes and directly improve productivity. This is leading to a reevaluation of existing systems and also changing expectations towards vendors. In that sense, AI is not just an additional feature, but a structural driver that is redefining the market.
And the third important dimension is the growing relevance of digital sovereignty. Especially in Europe, customers are placing increasing importance on where the data is processed, how systems are operated and how dependencies can be managed. Regulatory developments and geopolitical considerations are reinforcing this trend. As a result, trust, compliance and control over data are becoming key decision criteria. So overall, we are operating in an environment where short-term visibility is reduced, but at the same time, long-term structural demand is clearly increasing. And this is exactly where NFON is positioned.
So we combined AI-driven value generation with a strong European footprint and a clear focus also on data sovereignty. This allows us to address both the innovation and efficiency needs of our customers and the increasing requirements in terms of compliance and control.
Now let me move from the market environment to what we have actually executed in '25. The key message here is that we are not just adding AI features, but we are fundamentally transforming NFON into a scalable, AI-driven solution and platform business, while at the same time, remaining strict operational discipline.
Starting with the product side, our focus is clearly on translating AI into tangible business value. So we are embedding AI directly into our core communication solutions, enabling automation across, for example, both chat and voice and supporting use cases such as 24/7 service availability and more efficient handling of customer interactions.
What is particularly important is that we are making this value measurable. Features such as analytics and usage transparency allow customers to clearly understand how AI contributes to productivity increases and efficiency gains. This is a prerequisite for monetization. And at the same time, we are expanding our platform capability. So we're integrating different AI components and continuously enhancing our technology stack. We are building the foundation for more advanced, increasingly autonomous use cases over time.
The second important step is the commercialization of these capabilities. So we have established a dedicated AI focused sales organization to ensure that our solutions are not only developed, but also effectively brought to market. In parallel, we are evolving our commercial model towards more modular and flexible pricing structures. This allows us to better monetize AI use cases, support upselling and cross-selling opportunities and align pricing more closely with customer value. At the same time, we are becoming much more focused on how we sell. So this is a clear shift towards use cases with tangible ROI, which improves conversion rates and supports long-term customer value.
The third pillar is our go-to-market transformation. We are strengthening our partner ecosystem as a key lever for scalable growth. The launch of our NEXUS partner program is an important step in this direction, providing structured enablement, training and closer collaboration with partners. What we are seeing is that the adoption of the AI solution requires a much more hands-on approach. This is why we are focusing strongly on real use cases on co-creation and our partner activation as this makes AI more tangible and accelerates the adoption. At the same time, we are improving the efficiencies of our sales processes, including more targeted marketing approaches and an increased use of automation, particularly in the SME segment.
Let me now make this more concrete and show how it translates into our product offering. So with NFON Next '27, we have defined a clear strategic direction and execution is already well underway. At the core of our product, evolution is one core principle. So AI is not a separate layer, but it's embedded directly into our existing solutions, making it immediately usable for our customers. This means we are not just asking customers to adopt entirely new systems, instead we enhance the tools they already use and deliver immediate value without adding complexity. You can see this across our 3 solution areas.
So in the Business Telephony, we enhance our cloud communication offering with various AI-driven features immediately improving productivity and efficiency in daily operations. In the area of the Intelligent Assistant, we enable automation across chat, voice and AI bots, including several agentic AI capabilities to automate workflows, ensuring fast return on investments. And in Customer Engagement, we support omnichannel service environments with AI-driven workflows and specialized AI agents that help customers to scale service, quality and availability.
Where additional capabilities are required, for example, to ensure 24/7 customer service, we provide, for example, with Nia FrontDesk, an end-to-end AI solution that is fully integrated into the existing NFON Business Telephony environments and third-party applications. So for example, outlook for appointment scheduling, and this can be configured within minutes. This makes AI not only powerful, but also highly practical and easy to deploy.
What connects all of this is our platform approach. So we operate a unified platform that integrates telephony, AI and customer engagements with a seamless connection to CRM, ERP and collaboration tools. This modular and scalable architecture is key to supporting future growth and increasingly advanced use cases. And importantly, this is built on our own AI platform, which offers own models, integrates different third-party models and allows for flexible deployment. And this gives us the ability to continuously innovate and expand our solution offering over time, particularly in the direction of more autonomous agentic AI use cases. So overall, what we are doing is turning AI into a real and accessible productivity layer, embedded, scalable and ready to deliver value today.
Now let me take a look at how our transformation is being validated in the market. So with NEXUS CONNECT '26, which happened in January this year, we brought together more than 200 participants across from our partner ecosystems, from our core markets and moved into the next phase of execution. So the event also marked the operational rollout of our new NEXUS partner program and our modular licensing model, both key elements of our transformation towards a more scalable solution-based business. What is particularly important here is the level of engagement we are seeing from our partners.
During this so-called Hackathon, our partners worked hands-on on real end-to-end AI-driven use cases. So including concrete business cases and monetization logic. So one important observation from this is how accessible these solutions already are. Even without deep technical expertise, our partners were able to configure and apply AI driven use cases across our whole solution portfolio. And this is the key point. We are no longer talking about potential, but about solutions that can actually be deployed, sold and implemented in customer environments. At the same time, a strong participation and engagement clearly shows that our partners are fully aligned and strongly support this transformation. They are actively engaging with our portfolio and helping to bring these solutions into the market. However, it is also important to be clear why we have built a strong foundation, the scaling and monetization of these solutions is still in an early stage. Our focus is on increasing adoption, translating use cases into revenues and making our partner-led model more repeatable and scalable.
And with that, let me hand over to you, Alexander, to walk us through the financials.
Yes. Thank you, Andreas. So let me start with the key financial figures for the full year 2025.
Overall, our performance reflects a business that remained resilient in a challenging market environment, delivering a stable growth and a solid profitability despite muted demand, particularly, as Andreas said, in the SME segment. Revenue increased by 2% to EUR 89.1 million, while adjusted EBITDA grew by 2.4% to EUR 12.6 million. This demonstrates our ability to maintain profitability while continuing to invest in our strategic priorities.
Looking at the quality of our revenues. Recurring revenue increased to EUR 82 million and continues to represent a very high share of 92.1%. And at the same time, we saw a small decline in our seat base of 2.7%, mainly driven by lower order intake and customer consolidation in a still subdued market environment. However, this was offset by an increase in ARPU to EUR 10.01, supported by pricing and product mix. This clearly reflects our focus on value over volume.
So overall, this means that muted volume development was compensated by pricing mix and continued cost discipline. At the same time, we remain realistic about the environment. Growth in our core SME business has been slightly below expectations, reflecting longer decision cycles and a more cautious investment climate. However, our fundamentals remain solid. We have a high recurring revenue base, stable profitability and a clear strategic direction.
So with this, let's now take a closer look to the developments which are behind these figures. Let me build on the figures we have just discussed and provide a bit more color on the drivers behind our revenues. As mentioned, total revenue increased by 2.0% to EUR 89.1 million. The composition of revenues developed positively. In particular, we saw a strong contribution from our project business, especially by botario, with nonrecurring revenue increasing to EUR 7.1 million, reflecting growing demand for more solution-oriented use cases. At the same time, our recurring revenue base remained very robust, increasing to EUR 82 million and representing over 92% of our total revenues, which continues to provide a high level of stability and visibility.
Looking at the underlying KPIs, the decline in seats by 2.7% to around 647,000 reflects the still cautious market environment and the lower order intake in the SME segment. However, this was offset by improvements in ARPU, which increased to EUR 10.01, driving by product mix, pricing and underlying our focus on value over volume. So overall, the key takeaway is that revenue development in '25 was driven less by expansion -- less by volume expansion and more by a stronger mix, pricing discipline and portfolio diversification.
Turning to our profitability and cost structure. Our material expenses remained broadly stable at EUR 12.9 million, increasing only marginally compared to the previous year. This reflects lower hardware volumes and more favorable cost mix. As a result, gross profit increased by 2.3% to EUR 76.2 million, demonstrating a continued improvement in the quality of our revenues. The material cost ratio improved to 14.5%, supported in particular by a higher share of margin accretive project revenues, especially from botario. At the same time, other operating expenses decreased slightly to EUR 28.5 million, mainly driven by lower consulting, warranties, foreign exchange-related costs and so on while we continue to invest in IT and software and in our growth initiatives. So overall, the adjusted cost ratio remained broadly stable at around 32%, reflecting continued cost discipline and operational efficiency, while at the same time, supporting our strategic initiatives.
Let me now turn to our cost, personnel expenses. Personnel expenses increased by 4.6% to EUR 36.5 million compared to EUR 34.9 million in the prior year. This development reflects targeted investments, particularly in product development, in AI capabilities and in sales as well as the continued integration of botario. At the same time, the average number of employees increased to 425 from 410 in the year before, supporting our strategic focus on innovation and growth. Adjustments amounted to EUR 1.0 million, mainly related to management restructuring, legacy migration and stock option expenses. Important, after these adjustments, personnel expenses remained fully in line with our expectations. So overall, this reflects a deliberate and controlled investment into our strategic priorities while maintaining a high cost discipline.
Turning to profitability. EBITDA increased by 5.1% to EUR 11.4 million compared to EUR 10.8 million in the year before. On an adjusted basis, EBITDA increased by 2.4% to EUR 12.6 million from EUR 12.3 million in 2024. This reflects improved operational performance and cost discipline on the other side. Adjustments amount to EUR 1.2 million in total compared to EUR 1.5 million in the prior year and mainly related, as I said, to restructuring measures and ongoing harmonization initiatives. Important, the adjusted EBITDA margin remained stable at 14.2%, demonstrating our ability to maintain a solid level of profitability while continuing to invest in strategic growth areas.
Let me now turn to cash flow and liquidity. Our operating cash flow amounted to EUR 8.4 million compared to EUR 9.4 million in the previous year. This slight decline is mainly driven by timing effects in receivables and in provisions in net working capital positions and does not reflect any structural change in our cash generation. The investing cash flow totaled minus EUR 6 million compared to minus EUR 12.9 million in the prior year. While the prior year was significantly impacted by the botario acquisition, the current year primarily reflects ongoing investments in development and IT as well as an earn-out payment.
Our financing cash flow stood at minus EUR 2.5 million compared to plus EUR 4.2 million in the year before. The year before included loan inflows related to the botario transaction. And in '25, this mainly reflects scheduled loan repayments on the one side and lease payments on the other side. So overall, our cash and cash equivalents at the end of the period are solid at EUR 12.9 million, providing us a strong liquidity base. Importantly, free cash flow reached EUR 4.3 million, demonstrating our ability to fund ongoing investments from our operating business.
Let me now turn to our outlook. Our guidance overall reflects 2 things: First, the continued external headwinds, which we are seeing. And at the same time, the progress we are making executing our strategy. On the one hand, the short-term environment remains challenging. We continue to see muted demand in the SME segment, longer sales cycles and a generally cautious approach to IT spending. In addition, AI adoption in the market is accelerating, but it still requires time to translate into broader and more visible revenue contribution. At the same time, we are making solid progress in our execution. We are expanding our AI portfolio, increasing the monetization of AI use cases and further strengthening our partner and indirect sales model. In parallel, we remain focused on efficiency with strict cost discipline, improved sales effectiveness and targeted investments with a clear return focus.
What is important, however, is how this translates into our growth drivers. The first, we expect an increasing contribution from partner-driven scaling. As we expand our indirect sales channel and rollout programs, such as NEXUS, allowing us to grow without a proportional increase in fixed costs.
Second, AI monetization will become a more visible driver as we scale AI-enabled use cases, move from innovation to revenue contribution and realize additional cross-selling and upselling potentials. And third, we see further operating leverage from our model, supported by a more modular commercial setup, improvements in the customer journey and customer retention and increased sales specialization. So overall, our outlook reflects a combination of short-term headwinds, clearly defined growth drivers that we expect to become more visible over time.
Based on this, for 2026, we expect to grow in the low to single -- in the low to mid-single-digit percentage range. At the same time, we expect adjusted EBITDA to exceed EUR 12 million, reflecting continued cost discipline and operational focus. Looking beyond 2026, our midterm ambition remains unchanged. At the same time, we continuously review our assumptions in light of the market, in light of the developments and the pace of AI monetization. So we continue to expect a return to double-digit growth rates and an adjusted EBITDA margin above 15% over time, supported by increasing AI monetization, partner-driven scales and improved operating leverage.
With this, for the moment, thank you very much. And with this, I will hand back to Friederike to open up the Q&A session.
Yes. Thank you very much, Alexander, for the insights. We will now open the line for questions. [Operator Instructions] And first in line is Stephane Beyazian.
2. Question Answer
Yes, I've got a couple of questions. The first one is regarding the first quarter. Have you been able to return to seat growth in the first quarter? Or does it require a little bit more time in order to return to a growth in the number of seats.
My second question is regarding the modular pricing. I was just wondering if there are some parts of what customers are paying today, which you think that they may not be paying anymore because they will have more flexibility in the way they take products from you and therefore, that could also have some headwind impact on ARPU.
And finally, my third question is a bit more conceptual. With AI, many companies can sort of try to replicate what competitors are doing. So what I'm trying to understand with my question here is, what part of what you're doing is possibly replicable? But what part is you think not replicable, is more physical or is something that Al cannot just replicate of NFON straight from a prompt?
Thank you very much, Stephane, for your questions. So we will split it up. I will start with your first question, talking about the seat growth, yes? So -- before coming to Q1, let me say one word to the seat development last year. So first of all, yes, the seats have been declined slightly, 2.7% over the year. In the last quarter, they were -- in Q4, they were almost rather stable, not really stable, slightly negative, but not so much reducing any longer. And we also saw some countries already where we saw a growing number of seats. So in Austria and Italy, for instance, Austria is our second biggest country after Germany, we saw growing seat numbers. So this is on one side.
On the other side, a general word about the seats. Andreas mentioned in his presentation, our 3 product portfolio categories. I remember it, I repeat it for a moment. So the first one is our core business around the Business Telephony, our strong fundament around our core business around the cloud telephony. The second was the Customer Engagement, which contains contact center solutions, call centers for bigger customers with bigger inbound volumes and so on. And the third one was the Intelligent Assistant part. This stands for automatization for AI and contains besides botario, all our new AI solutions.
So when we talk about the seats, we actually only reflect our core business. We only reflect our Business Telephony. We try with our strategy as well. So we want to win new customers without a doubt and we want to win new seats. But we also try, with our strategy, to monetize the existing customer base with our new AI solution portfolio. And this, we will see and we see it already by increasing ARPUs. So for instance, a user -- a seat is a user at the end, which in the past only used the classical Business Telephony and in the future, we'll use also AI functionalities with transcripts, with Nia, with voicebots, whatever. Then we do not see increasing seats, but we will see increasing sales. We are increasing ARPUs. So yes, we want to gain new customers. But on the other side, we also want to monetize our existing customer base.
And the second and third product portfolio areas, Customer Engagement, for instance, with our contact center solutions. Here, we do not even reflect our seats because here, we count the users as agents. This is a new KPI that we are starting to measure right now. And here, we're in a very, very good way because here, we see high growth rates, but this does not count into the seat base. And the third, the biggest growing pillar, our Intelligent Assistant part is the same. Here, we do not talk about seats. And therefore, yes, as I said, the seat number is a very important number, and it was the number, and now it's still important, but it's not the only number. So much maybe to the -- for a general information around the seats.
And do you think that you, therefore, may change your KPIs in the future, therefore, just to align with what you just said, for instance, and move away from seat or keep it and add, for instance, number of AI subscriptions or something like that?
A clear answer, Stephane, maybe, yes. No. I mean, we are changing -- Andreas mentioned it, we are changing the complete -- we are in a heavy transformation from a classical Business Telephony towards an AI company. And a lot of things are changing. A lot of new products are coming and a lot of new business models. And we are steering them differently. And over the time, we are also starting reporting them differently. So I -- please do not ask me when and what and what exactly, but yes, a clear yes.
And let me continue with the other question. So it was about -- Stephane, thanks for the other 2 questions. The first was about the modular pricing and its impact. So I would see it from the perspective, the modular pricing enables us to be more flexible in the sense to offering customers choice. So with that, we are able to, for example, also enter an entry level that we could not serve before. We are able to combine different packages with one customer.
So what does that mean? If you, for example, say, for 5 people, I would like to try out your newest AI capabilities. But in addition, it would be great if I have additional 5 just for core-based telephony, et cetera. This is now possible. It's also possible to combine different contract length there, which is also giving the customer more investment security on the one hand side or choice for more flexibility and included in that is a very easy upsell path so that within the tools, you just with a click of a button, can activate the new capabilities, where we make it also more attractive to up- and cross-sell in that environment. That's the one thing.
And maybe I go ahead with the second question and then back to you for any further questions. The second question was essentially about what is all possible to be replicated with AI in the sense of what is unique in our case. So I think overall, the one thing is the availability of the technology? And then maybe the first point is where do you also have your own IP, so your own differentiation. And our focus is clearly on communication. So the services of how you transform text-to-speech and speech-to-text, so this TTS and SST.
This is absolutely essential and there due to the acquisition of botario and the knowledge. We really have models that are, from our perspective, not only on par, but better than what you have there because the especially to speech is not so easy. It's not so easy if you do it in European language, if you do it with dialect, if the quality of the tone and the -- how you express yourself is important, and this is our experience that partially the customers do not like this still a little robotic or still a little not perfect thing speech working. So that's the one thing.
The other thing is that the application of AI is, from our perspective, extremely key because just giving you an example from the other side. Now you deploy, let's say, AI agents and the question is, okay, then a new version comes. Is it still the same? Does it something new? Is it still under control? Does it have still the right things? Or does it start hallucinating, et cetera, et cetera? So that's, I think, another important ingredient. And our core competency is close to the customers and partner understand the needs and really bring it into productive usage. So that's still the gap a lot of others struggle with between what is theoretically possible and the application. Maybe that gives you some insights why we believe that this is a combination we differentiate also in the market. And this is something that not is easily to be replicated just with purely applying the new technology things coming up.
Okay. Next in line John Karidis.
I'm John Karidis from Deutsche Bank. I take on board everything that you've said about seats not being the only important metric. But I have a few questions around the seat category, if you like. So I'm trying to understand whether in Germany, specifically, the total number of seats is likely to decrease again in 2026. I note that you said that there was next to no decrease in the fourth quarter. But you also said that the decrease last year was because of the competitive environment -- sorry, because of the economic environment. And that hasn't really changed, nor to my knowledge, is it likely to change this year. So should we expect stable seat numbers in Germany in '26 or another loss?
Secondly, I see that the seat loss in the U.K. was quite chunky, about 11% year-on-year. And I'm trying to understand not only what to expect going forward. But really, if there was any -- it was more aggressive, the loss, than it was in Germany. And ultimately, I sort of wondered, do you need to be in the U.K.?
And then thirdly, you talk about partner-driven growth. Of course, the question is growth of what? And as you increase the number of metrics, we have to sort of move beyond seat numbers. But just sticking with seat numbers, it would be interesting to figure out what proportion of gross seat growth came from partners in 2025? And how do you expect that to change going forward? And I now push my luck, so I'll push it even more and, say, ask you the other metrics that you're talking about, Intelligent Assistant and Customer Engagement, how easy is this to export outside Germany?
First of all, thank you very much for your questions, John. Do you hear me?
Yes, sir.
Yes. So overall, coming back to the seats again, yes, as I said, so I did not say that we were stable in Q4, we were almost stable, but we did not use the 2.7% in Q4. So Q4 was really slightly better already. When you talk about Germany, yes, in total, we lost 2.5% more or less seats in Germany. And look, mathematically, what is the reason why we lose seats? So on the one side, we have a churn rate. This is not so high, and the churn rate is stable. On the other side, we have new business. And at the end of the day, we have to see that the new business came in a little bit less than expected, and the churn rate was stable, but was even a little bit higher than expected.
So at the end of the day, we lost a small number of seats for the competitive environment or not only the competitive environment, also the macroeconomic environment, you're completely right. It did not really change in Q1. It's becoming even more complicated with not only the war in Ukraine, with a new war in Iran with the energy prices with a really -- low investment climate in the moment. So for the moment, we do not expect any very short-term turnaround of this situation, let's say.
And at the end of the day, and this is what I want to tell you. So what is decisive for us is, yes, it's -- obviously, we do not like to lose seats. So we want to maintain our seat bases at least stable, in best case, even grow slightly. But again, our strategy is very clear. We want to enhance our product portfolio and not only gain revenues over new seats, but also over a higher quality per seat or per user when we talk about new metrics.
One word you asked about the U.K. This is right. In the U.K., we lost more than 10% seats in the last year. So here, we have -- yes, it's -- unfortunately, this is the situation because U.K. is also a big country for us. It's the third biggest country.
So we have a very special economical situation there on the one side as in every country, but we also have a very special competitive situation there in the U.K. with a very aggressive competition. And yes, we were not that successful in maintaining our seat base there.
And the third question, now I have to look again. Are you -- you talked about partners and proportion of growth in partner base and so on. So first of all, also our partner -- yes, so you're completely right. The biggest part of our revenues is organized in an indirect way over partners. If you ask me for numbers, we do more or less 10% or 11%, we do by our own, so direct sales and the rest is coming by partners. And the partners, there's also a switch in the method or not in the method, but in our model, let's say. So we have different types of partners. On the one side, we have our classical regional partners, which are smaller companies also as partners, and they address usually smaller customer segments as well.
And on the other side, we see our wholesale partners like -- the big players like Deutsche Telekom, like Telefonica, like 1&1 Versatel and so on, and they address more bigger customers. And yes, in this partner base, we see a small switch already in the last year. So we saw in the in-house shares of this partner base, we saw a small decline in the regional partner base and nice increase in the wholesale partner base because at the end of the day, these big players, they also have access to bigger customers, and this is one of our strategic direct trends. I think Andreas mentioned it in one sentence.
One of our strategic directions is as well to address not only the SME, not only the small companies as customers, but also the bigger ones and the enterprise customers. And with this, partner approach within the partner landscape from purely regional partners towards more wholesaler and bigger partners, we also underline our strategic directions to attract bigger customers also in the enterprise segment.
I hope I tackled all of your questions, john, if not, please go ahead.
I just sort of wonder, at the end of the day, when we look at our forecasts for seats, specifically in Germany and in the U.K., should we expect the same or broadly the same year-on-year change in '26 as that in 2025. So that's the follow-up on your answers, your kind answers, and thank you for those. And then the remaining questions -- question is regarding Intelligent Assistant and Customer Engagement. Those areas, can you take those outside Germany? Or is that more difficult?
Yes. John, thanks for asking. I was anyhow going to pick up the other questions that were left. So let me maybe start with U.K. again and that comes also to your question to export, so to speak, the AI capabilities. Yes, U.K. is a very significant market. And as you see also overall in the market with the other companies that are very active in U.K., you also saw that this is currently a challenging market.
What we clearly see there, and now coming to your question on the Intelligent Assistant adoption, we were just recently in Edinburgh on a quite big AI event, and there we got a lot of proof points that the customers really would like to take up our opportunities on the new solutions. So we got very, very positive feedback. And technology-wise, it is quite easy to scale this across Europe because it's not limited as in the telecommunications area, and we can base it on the broad telecommunication footprint we have in the different countries as well. So that's on the positive side.
And then one word also to the bigger customers and partners. We're also more engaged there because we want to accelerate the adoption also of these bigger customers. And then a closer relationship to the vendor itself in cooperation, partly with our bigger partners, is of absolutely key importance that you drive them faster to adoption and to success. So that maybe complements what Alex said. And hopefully, that answered your question. If not, John, please let me know.
At the risk of irritating you further, could you answer the question about net losses or net gains in '26 versus '25 on the seat front?
So you asked me what I would do for your forecast. I would be cautious, John. So you asked me if you should do the forecast with the same trends as we saw in '25. Maybe, to be on the safe side, yes, we will do. But one is what we want to achieve. And obviously, again, we do not want to achieve seat loss. But to be on the safe side and to see how the year started, we should be cautious. And again, this is not purely negative because our strategy is clearly to expand a second and a third business besides the seat and to increase the value per seat.
Next in line Philipp Sennewald, NuWays.
You can hear me well. As we are already well into the call, we'll try to make it quick here. I would like to follow up on the recent question. Alex, you mentioned, we might see another 2.5% seat loss in this year. Is that baked into your guidance, especially your EBITDA guidance? And a follow-up in what scenario would your EBITDA drop below the targeted EUR 12 million?
So we do not expect exactly a seat loss of 2.5%. So first of all, Philipp, thank you for your questions. So we do not expect especially exactly a seat drop in 2.5%. But John asked me what to do in terms of making a cautious forecast. And then yes, we have to take into consideration that it might happen that our core business, especially around Business Telephony, especially about the seat growth has become -- it's coming under pressure. It is under pressure. This is not in every country the same. Again, we are growing our seat base in Austria, second biggest country. We are growing our seat base in Italy, third biggest -- fourth biggest countries, sorry, and we see a slight decrease in Germany.
So if the 2.5% are coming or not, I don't know, we do not have them fully reflected in the forecast. But on the other side, again, our expectation is to boost and to increase our second and third pillar and to realize and monetize these great developments, what we have launched in the last year. And if we do so, they do not count into the seat base, but they bring us a lot of revenue. So this is the idea, Philipp.
So you mentioned throughout the call, execution of your AI cases is well underway. I would like you to help me to paint a better picture here. You're measuring this an agency set. Can you state how many agents you have employed, which growth you target this year? And also what is your, let's say, ARPU on those agents?
Yes. We can -- we are starting these discussions, Philipp. And in the future, we can also lead these discussions here in the broader base. But in the moment, we are starting them. But to give you a little bit of flavor, not in every detail what you asked right now in revenues per agent and so on. But to give you a little bit of flavor, when we look back to 2025, again, our 3 pillars, Business Telephony, clearly under pressure was negative. We lost a little bit revenues, minus 1%, more or less. In the Customer Engagement area, where we talk about the agents, it's also -- it's soon because we have 2 products. One is an old one, which runs out. We have a new one, which runs fantastically up. But in total, in Customer Engagement, we are growing double digit wise, more than 10%, 15%, 16% last year.
And for the fourth -- the third pillar, sorry, the Intelligent Assistant part with botario and all the AI functionalities, this is incredibly growing, more than 100%, but on a very low basis, obviously. So this shows -- and this we will see in the future. And yes, we will bring in more transparency therefore, without doubt, Philipp. But this shows that we see a deep shift in our product portfolio, may be faster than we expected. We expected the market to turn into this direction, but maybe now it's turning faster in this direction and this year confirms, to be very honest, it doesn't make it more easy for us to analyze and to touch. But at the end, it confirms even more our strategic direction because this is really our strategic focus. And sorry for not giving you every detail to every driver so far...
I can see that, but I got to ask the question. I appreciate the insight, but I would also appreciate if you guys going forward would kind of split that up also this ARPU figure and the legacy ARPU of the PBX and the ARPU among the agents. Last question is concerning ARPU. I have seen, and I don't know if I missed it on the call, if you explained it already, but I'm asking it anyway. The ARPU in the prelims was stated at EUR 9.91, if I remember correctly, and it's now above EUR 10. Can you quickly explain the difference or what happened there?
Nothing strange happened, Philipp. The reason is that one was the prelims and these were not the final numbers, and now we have the final numbers. So maybe a word to the ARPU in '25, it was -- yes, it was during the year, fluctuating within relatively narrow ranges around EUR 9.7. I talked about -- we see this month by month, obviously. So month by month, it was fluctuating between EUR 9.7 and EUR 10.01. And yes, we had even a small, slight dip in the beginning of the year and then in the middle of a year, stabilization at the end of the year, in the last months, we saw an increase.
Obviously, also, again, the link to our strategy. We launched our new products at the end of the year. We didn't sell a lot because we launched them very late, but this helped also to increase the ARPU. And the small difference, we are very precise because this was the only very small difference between our preliminary figures and the final figures. The only small difference was the ARPU. So there is no reason behind. It was just prelim and now it's finished.
Next in line [ Maximilien Pascaud from Baader ].
Maximilien Pascaud from Baader-Helvea. Congratulations for the presentation and taking my 2 questions. It's the EUR 10 in ARPU milestone, but seats are down from -- by 2.7%. I would like to know if this move is more to gain more margin and erase the low-margin clients in our computing and so for your next target? And the things that you would like to point, it's the new pricing of the ARPU for the coming months and, in fact, for 2026.
And the second one is on R&D. The R&D grow to 18% in terms of revenue and the guidance for EBITDA is a bit flat in front of the guidance of the top line. The thing I would like to know is beyond the botario acquisition, what specific KPIs we should track to measure the Nia organic traction in terms of margin and also on the top line?
Sorry, I already answered, Maximilien. Sorry. I hope you can hear me now. So first of all, thanks for your questions. I start with one of the last ones. You asked for the R&D invest what we had in '25 and how we do see this in the future. So maybe one word before. So you are right. We talk about almost 18%, 17.9% invest in R&D. And maybe one word to this. So we are -- with our solid cash position, we are very happy when we talk about the future that this solid cash position gives us the freedom to go on when we want to do investing in innovation and in growth. And this is what we are doing. We are cautious. At the same time, we are flexible, so we can adjust also our investments. We have adjusted them last year at the end of the year. We will adjust them this year if it's necessary, but this is the way we want to go. So we want to continue investing into innovation and in future growth on the one side.
The other side, if you see our cash flow, for instance, or our total investment mode, so we are changing our investment mode when we see '24 to '25. We are changing the investment mode from investing into acquisition into investing into own developments, not only, but this is what you clearly can see. We had -- in '24, we had the big investment block, which was the investment for the acquisition of botario. And here, we had no acquisition in '25, but we had enhanced investments into our own developments. And this is also reflected in the R&D ratio, if you want, the 18% or 17.9% at the end.
So much to the R&D. Andreas, do you want to say something to this, ARPU and pricing.
Thank you, Alex. I think -- not much to add what is -- okay, not much to add what you said. Thanks for congratulating us to the ARPU milestone. So I think we believe that with the more value we also bring in the classical Business Telephony, there are opportunities for up and cross-sell following also what you said, more increase the margin for high-value customers and with that also standardized on the new margin. And the R&D growth, as Alex said, is clearly outlining also our balance between investing in our future growth, especially in the AI-related solutions, but at the same time also to take a careful look on that we do this operational efficiency.
So last in line Ross Jobber.
Ross Jobber from Edison Group. I'm really interested in what you're saying about FY '27. And I want to get a little bit more understanding, if you like, of how your minds are working around that. In particular, the return of growth that you're seeing or expect and hope in '27, I'm interested, is more of that going to be about in-house revenues or partner revenues. And you're obviously assuming margin increases as well. So I don't know whether or not there's a big difference between your in-house commercial sales margin and your partner margin. So is that growth going to be more in-house of a partner? Is it going to be more service over product as botario continues to develop? Is it going to be more Germany over the rest of the world? And is it going to be more new customers over existing customers or the other way around? That's my question.
Yes. Thanks, Ross, for the question. A lot of questions, and let's see how we can condense them in the short time frame. So some answers on your question. So we see growth clearly across the European market in our core countries, we are actively in. So it's not about Germany. It's also in the other countries. And even strategically looking forward, as you said, we take now the 1-, 2-year perspective. So it's not limited to Germany. And this is due to the portfolio on how we do it. There's also no technical limitation. So that's a clear path forward. The service versus product model. So still, we strive for having a very high degree on recurring revenues, of course, also in the new solutions in the Customer Engagement and also in the Intelligent Assistant area.
But also if we have bigger customers, we see specific bigger projects where we actively go in. So we will also see a little bit more also increase in the services there. Distinction between in-house and partner, I think, is not that. So it's still the same combination, as I mentioned before. The key lever to the market is the partner ecosystem addressing also new and larger partners in combination with an extension of the share we serve directly because it's just in the nature of the products where our customers or the bigger customers require a closer working relationship with us. So they may be shed some light. And of course, as we go through the year, we will also shed some more details how we see them in the next year and the years after that as we go.
Okay. So I see no further questions. If you have a question, you can raise your hand. This is not the case. Okay. So thank you again for your time, your interest and your engagement with NFON. I'll hand back to Andreas for a short closing statement. Andreas, back to you.
Yes. Thanks a lot, Friederike. And also thanks to all of you for the very good and constructive and great question. So let me conclude by saying, so the past financial year was shaped, as we said, by a challenging market environment, a high degree of change. And at the same time, very important progress for us as a company. So we demonstrated innovation capabilities. We demonstrated operational strength and consistently advanced also our strategic priorities because that's absolutely key to lay the foundation for the future further profitable growth.
And looking ahead, we remain confident despite the very challenging environment that we have. So that means, especially for this year, we will stay very disciplined in execution, focused on driving innovation and at the same time, efficiency because we look for creating sustainable mid- and long-term growth for all of our stakeholders.
So with that, let me conclude. Thank you very much for your time for the great questions. Looking forward to see you soon. That's it for today. Thank you.
NFON — Q3 2025 Earnings Call
1. Management Discussion
Good morning, and welcome to NFON's Third Quarter and 9 Months 2025 Earnings Call. Thank you for taking the time to join us today. My name is Friederike Thyssen, Vice President, Investor Relations and Sustainability at NFON, and I'll be your host for this session, which we are holding together with NuWays.
Today's presentation will be led by our management team: Andreas Wesselmann, our CEO; and Alexander Beck, our CFO. They will take you through the key operationals, the strategic and financial development of the first 9 months 2025.
As usual, we published our quarterly financial statement and our full investor presentation earlier this morning. You can find both, as well as the corporate news, on our NFON website under Investor Relations.
The presentation will follow a clear structure. We'll start with the business highlights, then move on to the financial review, our outlook and guidance. And finally, we start the Q&A session. Please note that questions can only be asked live during the Q&A at the end of the presentation. [Operator Instructions] Thank you for understanding, and thank you in advance for your contribution.
And now I will hand over to Andreas Wesselmann to start the presentation. Over to you, Andreas.
Yes. Thank you, Friederike. It's a pleasure to be here today for my first quarterly call as CEO of NFON. Many of you know me from my previous role as CTO, where I was already deeply involved in defining the NFON Next 2027 strategy. And as a consequence, stepping into the CEO role doesn't mean changing direction, but rather expanding the perspective, bringing strategy, product technology and market even closer together to turn the ideas into tangible results faster and more consistently. So my focus is clear. We want to accelerate NFON's transformation as an innovative growth company, driven by customer value and operational excellence and leveraging the latest AI technology. The course we have set with NFON Next 2027 is the right one. And our task now is to execute it with speed and discipline.
And with that, I'm happy to introduce my colleague and our new CFO, Alexander Beck. Rather than me describing his background, I think he can do that best himself. Alexander?
Yes. Thank you, Andreas. Also from my side, I'm very happy to join today's call for the first time as part of the NFON team. In the first 7 weeks since I have joined, I have had the chance to get to know people, products and the culture of the company. And what impressed me most is the energy and the commitment across the organization. This is really a genuine drive to move things forward together.
A few words about myself. I bring around 20 years of international experience across several sectors like retail, like fast-moving consumer goods like software and also technology. In previous roles, I have led and developed finance organizations and supported businesses during phases of international expansion, growth, profitable growth and also transformational restructuring.
From a financial perspective, I see NFON in a solid position. Profitability has been restored. Cash flow is positive and our financial base is stable. The strategy is clear, well communicated and is being consistently implemented across the company. What I particularly value is how strongly the teams identify with our strategic priorities and how focused the execution is.
At the same time, we are aware of the challenges. Revenue growth has been slower than we would like and the commercialization of new products take time. But the direction is right and the fundamentals are strong. So overall, I'm very pleased to be here and I see a company that combines the right mindset, the right technology and the right talent to build sustainable value in the years ahead.
With this, for the moment, back to you, Andreas.
Yes. Thank you, Alexander. Now let's take a closer look at the key highlights of the last month. So the last month showed tangible progress and growing momentum. We strengthened our market presence, we refined our brand positioning and further shaped NFON's perception as an innovative leader in intelligent communication.
Let's start with Bits & Pretzels, one of Europe's leading founders' festival where NFON participated for the first time. We presented the company with a clear, technology-driven identity that reflects who we are today, an innovative growth company, combining communication expertise with AI-driven intelligence. More than 250 people joined our expert sessions and over 90 tech leaders took part in our CIO Summit talk, where we explored and explained how AI can make communication more human, efficient and secure.
Another highlight was our executive dinner in Munich, held under the theme, From Europe with Intelligence. This event brought together decision-makers from business, technology and media to discuss how AI is reshaping communication and leadership. It also marked the live debut of Nia FrontDesk, our newest AI solution, which was received with strong interest and very positive feedback from customers, partners and analysts. It captured exactly what NFON stands for, turning innovation into real-world value.
And finally, we received strong industry recognition. NFON was named Manufacturer of the Year and our EVP AI & Innovation, Jana Richter, was recognized as IT Woman of the Year. These awards underline our credibility as a European AI-driven technology company, one that combines innovation with responsibility, diversity and technical excellence. Altogether, these milestones show that we are executing our strategy with focus and consistency.
Under NFON Next 2027, we are positioning NFON as an innovative growth company that drives AI-powered business communication from Europe for Europe, combining innovation, customer value and efficiency. And this brings us directly to one of the most exciting examples of this development. The NFON intelligent assistant, Nia FrontDesk. Nia FrontDesk is a practical intelligent assistant for reception and service areas that help organizations manage incoming calls, messages, visitor interactions, et cetera, more efficiently. The solution automates routine tasks such as call routing, scheduling and information requests, while always allowing a seamless handover to human colleagues with personal contact, if it's needed.
What makes Nia FrontDesk stand out is its combination of NFON's communication platform with conversational AI. It's fully integrated, is GDPR-compliant and built on European infrastructure, which is an increasingly important differentiator for many of our customers who value digital sovereignty and data protection. The first reactions from partners and customers have been very positive. We see particular interest from sectors such as health care, education and public administration, areas with high service intensity and recurring communication needs. These organizations face increasing pressure to improve efficiency, while maintaining personal service quality, and Nia FrontDesk exactly addresses this. Its ease of use and measurable time savings help improve service availability and customer experience, delivering a clear return on investment.
From a business perspective, Nia FrontDesk expands our portfolio beyond traditional voice services. It opens new cross and upselling opportunities within our installed base and helps us to enter new customer segments, particularly in sectors with high service intensity. Nia FrontDesk is about customer satisfaction and increased productivity. It's about making communication smarter, more human and more efficient. It shows how innovation, when done right, can improve customer experience, employee satisfaction and business performance.
For us, Nia FrontDesk is more than a product launch. It's a proof point of our innovation strategy. And over the coming quarters, we will continue to expand the AI solution portfolio as we go, always focused on real customer benefit and profitable growth.
To walk you through the details of our Q3 financial performance, I'll hand over to Alexander.
Yes. Thank you, Andreas. So let's turn to the key financial figures for the first 9 months of 2025. In this period, we achieved a solid top line growth and stable profitability despite a continued cautious market environment and investment climate, particularly among small and medium-sized enterprises.
Our total revenue increased by 2.7% to EUR 66 million, while adjusted EBITDA amounted to EUR 8.7 million, 3.5% below the prior year level. This performance shows that we are able to maintain profitability while continuing to invest in our strategic priorities, including AI and product innovation, including partner enablement and also sales effectiveness.
At the same time, we remain realistic about the challenges. Revenue growth in the core SME business has been slower than anticipated, reflecting both uncertainty and extended decision cycles. The commercialization of new products also takes time, which is normal at this stage. Overall, the fundamentals are solid. Our cash position remains strong, and our strategy is clear. I'm confident that NFON has the right mindset, the right technology and the right team to translate these foundations into sustainable growth.
Let's now take a closer look to the developments behind these figures in the following slides. In the first 9 months of 2025, NFON delivered moderate top line growth. The total revenue of EUR 66 million. This development was mainly supported by the continued strong performance of botario, which contributed positively through its project businesses. Our recurring revenues, the backbone of our business, rose by 1.9% to EUR 61.8 million, maintaining a high share of 93.6% of total revenues. Nonrecurring revenues developed even stronger, up by 15.3% to EUR 4.2 million, mainly driven by project implementation and again, service revenues from botario.
At the same time, our seat base declined slightly by 2.6% to 648,000, reflecting a still cautious investment sentiment in our core markets. Despite this, our blended ARPU remained stable, increased slightly to EUR 9.92, supported by price adjustments and consistent customer usage levels. Overall, this combination underlines a resilient recurring revenue model and the stabilizing effect of portfolio diversification through botario.
Turning to our profitability and cost structure. Material expenses declined by 6.3% to EUR 9.1 million, primarily due to lower hardware volumes and a more favorable cost mix. As a result of this, our gross profit increased by 4.3% to EUR 56.9 million. The material cost ratio improved to 13.8% versus 15.1% the year before, supported by a higher share of margin accretive project revenues.
At the same time, our operating expenses rose moderately by 4.1% to EUR 22 million, mainly reflecting higher marketing activities, partner commissions and advisory costs are related to strategic initiatives. Overall, the adjusted OpEx ratio remained broadly stable at 33%, demonstrating our ongoing focus on cost discipline and operational efficiency, but also investing into strategic areas.
Personnel expenses. Personnel expenses increased by 9.9% to EUR 28.2 million. This development primarily reflects the integration of botario and targeted staffing in product development, sales and AI-driven innovations. The average number of employees rose to 427 compared to 415 in the prior year. We made adjustments of EUR 0.9 million, mainly related to restructuring costs in management, sales and marketing. After these adjustments, personnel expenses were in line with expectations, consistent with our strategy to strengthen capabilities for innovation and customer value creation.
In terms of profitability, EBITDA decreased slightly to EUR 7.7 million. After adjustments, EBITDA amounted to EUR 8.7 million, down 3.5% from EUR 9.1 million the year before. This decline was expected and reflects planned operating expense investments in personnel and infrastructure to support our AI-related initiatives and the ongoing execution of our strategy, NFON Next 2027. Adjustments totaled EUR 1.1 million, primarily related to restructuring measures and IT harmonization. As a result, the adjusted EBITDA margin came in at 3.2%, maintaining a solid profitability level while ensuring we continue to invest in our future growth.
Looking at the cash flow and liquidity. Operating cash flow came in at EUR 4.9 million compared with EUR 5.1 million in the year before. This slight decline mainly reflects timing effects in receivables and provisions. Investing cash flow amounted to minus EUR 4.7 million, driven by higher capitalized development costs and earn-out payments of EUR 1.9 million related to the botario acquisition. Financing cash flow stood at minus EUR 1.7 million compared with plus EUR 4.8 million a year ago as the prior year period included loan inflows to finance the acquisition. At the end of September, this cash and cash equivalents totaled EUR 11.4 million, and this underlines our solid liquidity position and provide sufficient flexibility to fund both day-to-day operations and our ongoing strategic initiatives under NFON Next 2027.
As already shown in the half year results, this slide summarizes the broader market environment and our key strategic priorities. It continues to provide the right framework for navigating the current conditions, steering NFON towards sustainable growth. But the macroeconomic environment remains challenging. Inflation, geopolitical uncertainty and budget caution, particularly among SMEs, continue to weigh on investment decisions and prolonged sales cycles, especially in communication infrastructure and digital transformation projects. At the same time, AI-driven innovation is reshaping the market. Many companies are still assessing how AI can be embedded into their operations. This extends decision-making, but also creates key opportunities.
Across Europe, stricter compliance standards and the growing debate on data sovereignty continue to drive demand for secure GDPR-compliant solutions. NFON's position as an independent European provider with development, hosting and infrastructure entirely in Europe remains a key differentiator. Building on this foundation, we are executing the measures introduced earlier this year, which directly support our strategic priorities. And these are improving operational efficiency, strengthening the channel enablement, maintaining a market growth focus and driving profitability.
We are seeing early signs that our initiatives are taking hold, also the momentum is developing more slowly than we would like. As we progress through the fourth quarter, our focus remains on disciplined execution, cost control and efficiency gains, while continuing also to invest selectively in growth areas such as agentic AI. So let's turn to the next slide for the details.
As a part of our regular forecast update, we have reviewed our full year expectations based on the performance in the first 9 months. Given the continued investment restraint in part of the market and revenue trend that remained below expectations in Q3, we have slightly adjusted our guidance for the full year. We now expect total revenue to grow between 1% and 2.5% and adjusted EBITDA to range between EUR 11.5 million and EUR 12.5 million. This outlook already takes into account the ongoing macroeconomic caution, extended decision-making cycles among SMEs and the delayed recovery in investment activity in our core markets. At the same time, the measures implemented earlier this year, particularly pricing, cost control channel enablement, are delivering the expected effects and continue to support our profitability.
Our midterm ambition for 2027 remains unchanged. Overall, we focus on innovation and efficiency, keeping our financial discipline strong so that growth remains healthy and sustainable.
And with this, I will hand back to Friederike to open the Q&A session.
Yes. Thank you very much, Alexander and also Andreas for the presentation and the detailed insight. We will now open the line for questions. [Operator Instructions] So we're now looking forward for your questions.
First line in row is John Karidis.
2. Question Answer
So it's John Karidis from Deutsche Bank. I know this has been a very tough quarter for NFON. And because of this, I wonder if you would be happy to tell us how many seats you ended the period with -- in Germany specifically? I know that in the first half, the seat loss was roughly split equally between Germany and the U.K. But I'd be sort of very interested in the number in Germany. And any other additional color you can give us, please, about the areas where you saw the most pressure?
Thank you very much, John. Yes. So the seat growth, you're right. We lost seats in the first -- in Q3. Our total seat base declined slightly by 2.6%, around total 648,000 compared to 665,000 in the prior year period. So this was mainly the result of a lower order intake compared with last year, while our churn rate is also important, remains stable at 0.5% [ hard ] churn per month, the same level of quarter 3 2024. The stable churn aligns the high quality our products and services have and the resilience of our recurring revenue base in a challenging environment. However, growth in new seats came in below expectations, that's right and below last year's increase, reflecting both the more cautious investment climate and the expanding decision making cycles.
The German numbers, I do not have exactly here, but I can tell you roughly, in Germany, we have around about 470,000 seats. And in U.K., we are about 73,000 seats.
Okay. Next in line, Stéphane.
I've got 2, 3 questions, if that's possible. The first one would be, can you tell us a little more on how many more staff do you plan to hire and when you think you will start to see some stabilization on your staff costs?
The second one is a follow-up on the number of clients. I was just wondering whether you are also seeing, let's say, do you think overall, it's a market, as you suggest, or also perhaps some competition that is more aggressive in cloud telephony? And I was just curious to know if there are any names of competitors you would highlight as being very pushy right now in the market?
And finally, as a third question, if I may. Do you think now that it's quite likely that 2026, we should also see, let's say, the impact that we've seen in the third quarter carrying over into 2026 and therefore, potentially revenues and EBITDA could be down in 2026?
Thanks a lot, Stéphane, for your questions. Let me try to answer them in one shot and then after that, please let me know if some questions remain open. So the first question was about the hiring. There you can see along the numbers that we also adopted our growth in personnel expenses by the reduced top line so that we always stay in the same quote, and this is the same planning as we go forward.
For the number of clients, maybe I'll just give the example of Nia FrontDesk that I outlined and why I think that's so important is -- the first time that we really combined the botario AI platform with our core voice platform in a very tight and integrated fashion. And just to share some numbers there with you, for the first 4 weeks after the launch, we see it as essentially our fastest-growing adoption of all products that we saw in the last years. So we already have a mid-double-digit number of sold licenses here, and we have very, very positive feedback. So that's, for us, the confirmation of our portfolio.
And why is that important also looking forward? Because it shows that we have different revenue streams going forward that we are going to materialize. So one is that these capabilities integrated in our business, telephony, which we call AI Essentials or FrontDesk, help us to up and cross-sell existing customers and it makes our existing offering more attractive. That's one thing.
On the other hand side, we see that these voicebots and the agentic AI capabilities, so to speak, get more from the botario side of the portfolio also help us in combined up and cross-sell in the contact center business, and that the botario portfolio offers us access to new customers and partners also in enterprise AI projects.
So having that said, we are confident that in '26, we will get back to a growth strategy because in addition to the products, there are 2 other things I would like to mention. We also introduced in October a new way how we can sell easily with a new modular license model, we sometimes internally refer to as T-shirt sizes. This makes it easier to sell. Think of that as a kind of a self-service, and it's immediately available for deployment and getting it running.
And the other important part is that we support our partners also in their transformation. So to enable them on the existing solutions, also expand to new partners and expand our solution portfolio with the existing and new partners. And therefore, also our partner program, Nexus, which we will unveil in more breadth and depth in January next year, will support us to have that.
Overall, and your question was also about how we see the market. We see the market that the core cloud telephony market is essentially more or less stagnating. Why is that the case? If you take a look, for example, at some numbers in Germany, we had in August, the highest number of companies that needed to file insolvency in the last 10 years. If you take a look at the overall economic numbers, Germany and Austria, for example, unfortunately, they rank lowest within Europe, which is plus -- 85-plus percentage points of our business, as you know.
And there is another thing that you should not underestimate. So this whole AI disruption, as I framed it, causes also some additional uncertainties, which causes a delay in decisions. We do not see that it's a question if you go with us in the solutions or not, it's a question of when do you do that, and you just need some more room to discuss with the partners and explain. So that's maybe -- overall, I hope that answered your question.
It does. If I may just to follow up a little bit and apologies for taking a bit of time here. I was just wondering if you think that adoption of AI could also, in a way, reduce a little bit demand from some of your clients as they may be replacing some of their staff? I'm thinking of call centers, for instance also, and reducing the number of seats potentially.
We see it the other way around. We see it as a strengthening. We see that from the tightly integrated AI capabilities. For example, in the cloud telephony, it makes the offering more attractive. So there, we have possibilities to increase the ARPU and to expand the number of seats that we have. That is one dimension. And we see great and interesting effects in cross-selling opportunities of the contact center solution and the agentic voicebots we have in the botario solution, which we can then sell to the same customer. So we see it more not as taking away from existing business, but accelerating and strengthening the different pillars of our solutions portfolio.
Okay. Next line, [ Maximillian Pasco ]. We can't hear you. Now we can hear you.
Sorry for that. I have a 2-part question. Do you anticipate a normalization in customer investment patterns, potentially supported by your progress in AI? And as a result, could you -- could this provide greater visibility for 2026?
Yes. Maybe I'll start with that. So your first part of the question was about the investment normalization. This is certainly a trend that we see. We see a delay. And as I said before, we do not see that people decide against an investment. So in that sense, taking the first insights in the fourth quarter and looking forward, we see an investment normalization in the course of the year '26 despite the not so easy overall economic conditions. And exactly what '26 will mean, we will unveil at the beginning of the year when we then have the forecast for the year '26.
Does that answer your question, [ Maximillian ]?
Yes.
Next in line, Ross Jobber.
Can you hear me okay?
Yes.
Perfect. I'm interested in the trends over the next year or 2 in some of the costs, which at the moment are high, but which hopefully are going to fall, things like consulting costs, IT harmonization costs and also capitalized development costs. Can you say a little bit more about where you would expect those to go over the next 1, 2, 3 years?
Yes. Ross, thanks for your question. So in general, we are cautious when we talk about cost development. On the other side, we also want to invest into our strategic areas. You mentioned right now, a couple of them like consultancy costs, like other costs, we already tried now in Q3 and Q4 to bring these costs down. But on the other side, we are also going to -- as I said before, we are also going to invest into growth areas.
So for next year, -- we are, in the moment, we are in the process to put our budget together and to finish the planning and we will communicate this at the beginning of next year. But overall, I think I can already say -- yes, we will continue our path. We try to eliminate costs, which are not necessary any longer. We try to gain efficiencies, especially in the things you mentioned. And on the other side, we try to invest as much as we need, as much as we can, as much as we want in order to grow in our strategic growing areas. So this is overall, the part for the next years. I hope this -- this is not very precise for the next 3 years, Ross, but I hope this gives you at least the color of where we want to go.
Okay. I see Stéphane is still raising the hand?
Sorry, I'm all right.
Yes, no probs. But Ross, you can unmute yourself.
Yes. Sorry, I got more questions. I just wanted to make way for others. Can you say whether or not the AI functionality is changing the procurement process amongst customers? I mean you've talked about uncertainty based on the macroeconomic environment and how maybe it's taking longer for customers to decide whether to buy. Does the fact that you're adding a lot of kind of enhanced customer experience change the sort of people who are getting involved in that procurement decision at your clients? Is that also a factor or not?
Yes. Thanks, Ross, for asking the question. Let me maybe start with -- we have one part of the solution that if you want to buy a click integrates with existing business telephony. And that's important because we want that the same people that currently administer and are responsible for the existing solutions with a very seamless path can activate them. So in the example of the Nia FrontDesk that I outlined, you can imagine that you go to the administration part you are used to. And then you just choose, I want this front desk capability, I want this as a language. And this is the content it should be based on and then you go. And this is really important because especially the SME customers can simply not afford to invest, take time in AI projects or consultancies or hire people themselves. So this, I think we are in a unique position by tightly integrating that for the existing market.
If you go to the other segment of our offer, if I talk about enterprise AI projects and large customers and large partners, this is then a different approach, and you also meet different buying centers. And there, the telephony is not the leading capability, but the leading capability is on how you optimize your customer service, how you automate your processes, how do you integrate in the existing business processes and then offer a solution that can cover, if you want, the breadth from voicebots via contact centers to then the underlying cloud telephony. So that maybe gives you an overview about how we currently see the variety of the go-to-market activities.
Great. And can I just check one statistic? Did you -- am I right in thinking you said that churn for the 9 months is unchanged from a year ago at 0.5%? Did I hear that correctly?
Yes, Ross. That's right.
Okay. No further questions so far. Stéphane, go ahead.
There are no more questions. Let me ask just a follow-up. I was just wondering whether you're already seeing let's say, in the fourth quarter, a little bit better commercial momentum or if you think that those impacts will continue into Q4 on your customer base?
Yes. Thanks, Stéphane, for asking that question as well. Let me maybe get back to the Nia FrontDesk example which we launched at the mid of October. So there, as I outlined, we see already very fast-growing adoption in licenses, et cetera, which makes us very positive. But the reality is also that based on our recurring revenue model, this only has minor impact on the fourth quarter and then the total numbers. Why? Also we came to the conclusion as we outlined today. But that makes us confident looking forward to '26 and beyond that we start with a good foundation in those years and laid the foundation in this year for accelerated growth in the next year. Details to be shared in the first quarter next year.
Good. So then no further questions. Let me ask a little -- last time. Are there any final questions from your side? So please raise your hand. If this is not the case, -- and it seems not to be the case. Thank you, again, for your time, for your interest and also from my side.
And now I'll hand back to Andreas for a short closing statement. Andreas, back to you.
Yes. Thanks, Friederike. A big thank you from my side to all of you joining the first earnings call in that combination with Alexander and myself, thanks for asking questions -- and the very constructive and right questions and already looking forward to talking to you soon. Have a nice day. Thank you.
NFON — Q3 2025 Earnings Call
Financial data from NFON
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 87 87 |
2%
2%
100%
|
|
| - Direct Costs | 13 13 |
3%
3%
15%
|
|
| Gross Profit | 75 75 |
3%
3%
85%
|
|
| - Selling and Administrative Expenses | 37 37 |
1%
1%
42%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 9.74 9.74 |
11%
11%
11%
|
|
| - Depreciation and Amortization | 7.65 7.65 |
5%
5%
9%
|
|
| EBIT (Operating Income) EBIT | 2.10 2.10 |
26%
26%
2%
|
|
| Net Profit | 0.79 0.79 |
13%
13%
1%
|
|
In millions EUR.
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Company Profile
NFON AG engages in the provision of cloud-based telephone systems. The company develops virtual phone systems and integrated communications solutions for businesses of all sizes. It operates through the following segments: NFON AG, Deutsche Telefon Standard GmbH, nfon GmbH, NFON UK Ltd, NFON Iberia SL, NFON Italia SRL and NFON France. The company was founded by Marcus Otto, Mathias Edelmann and Fabian Hoppe in 2007 and is headquartered in Munich, Germany.
StocksGuide Premium
| Head office | Germany |
| CEO | Mr. Heider |
| Employees | 429 |
| Founded | 2007 |
| Website | www.nfon.com |


