Summary
IONOS Momentum Platform Rollout:
Web Presence & Productivity:
Cloud Solutions:
Cash Flow and CapEx:
Leverage and Debt:
Future Capital Allocation Plans:
Full Year 2026 Guidance (reaffirmed):
Mid-term Targets (reaffirmed):
Strategic Direction and Leadership:
AI Impact on Costs:
Marketing Investment Plans:
Notes
Transcript
Thank you, Stefan. Good morning, ladies and gentlemen, and welcome to our Q1 2026 conference call. I'm Patrick Haider, CFO of Aionos. The momentum from 2025 continues into 2026. In Q1 2026, we added 180,000 net new customers, lifting our total base to 6.81 million customers.
We continue to grow revenues across all relevant product lines from web hosting to communication, back office and domains. On the right hand chart you can see the rising share of AI in web presence and productivity revenue. In 2025 AI accounted for approximately 20% of additional revenue. We expect that to reach around 50% this year, further growing to 80% by 2028.
From domains and web hosting to mail solutions, all products already include smart AI features.
In Cloud Solutions, we are delivering sovereign, trusted European infrastructure for both SMBs and enterprise clients. Our portfolio extends from public and private cloud to specialized AI infrastructure.
including the AI model hub, GPU servers, model fine tuning and app integration such as N8n on VPS. Let me give you an update on the AI phone receptionist, which we launched in Germany and the US in the beginning of this year. As a reminder, the AI phone receptionist is essentially a virtual employee. It is able to answer and manage calls in natural language across more than 20 different languages. trained on the customer's own website and knowledge base.
It is able to handle requests to book meetings, it captures leads around the clock, and delivers structured call transcripts to the business owner. We have already generated more than 8,600 orders so far. The highest share has been in Germany and the US since we launched in those countries first. The incoming ARPU is already around 30 Euro, underpinning the additional value contribution. Please keep in mind that the AI phone receptionist is the first product within a broader platform.
With more capabilities and agents being added, we expect the RPU to grow further. This is also the reason why marketing investments has been held back on purpose as we don't want to invest before more capabilities are available. Initial customer satisfaction is high with an NPS above 50. These are strong early results from a newly introduced product with very limited marketing. The adaption curve and feedback confirm that we are solving real problems for our customers.
What will the broader platform look like? IONOS Momentum is a fully integrated modular ecosystem driven by a central intelligence layer, the AI Knowledge Hub. As the foundation of the entire platform, the AI Knowledge Hub aggregates company data, documents and interaction history in a shared brain. This ensures that every tool in the suite operates with deep contextual relevance. The power of momentum lies in this synergy.
The more a customer engaged with the system, the smarter the hub becomes, leveraging the vast data we already securely host for our customers. Building on this foundation, the ecosystem delivers seamless end-to-end automation. The AI front desk, which includes the AI phone receptionist, acts as the first point of contact, managing inbound communication across all channels and feeding real-time data directly into the hub.
This data flows into SmartAI CRM, which classified leads and suggest next best actions based on the hub's insights. EAI presence suite then makes these insights actionable, automating marketing, reputation management, and legal compliance. For businesses requiring maximum data of sovereignty, the Sovereign AI chatbot provides a GDPR-native European alternative to global models, fully integrated into the shared intelligence.
By embedding the AI Knowledge Hub at the core of daily operations, IONOS Momentum doesn't just offer tools. It creates a self-learning platform that drives retention, expands revenues, and builds unmatched long-term value. Let's have a look on our roadmap. Following the successful launches in Germany and the US, we have rolled out the AI phone receptionist to the UK and France at the end of March. We also launched a phone receptionist at our brand Strato in Germany and in April we rolled out the phone receptionist in Canada and Spain.
In parallel, we are working on the feature set. Key additions include the AI Knowledge Hub, further integrations, dedicated workflows with multiple agents, and multi-channel capabilities covering voice, email, and chat, planned for the second half of 2026. At this point, let me turn to the financial results of the first quarter 2026. We generated 348 million in revenue for the first quarter. Web presence and productivity remains our cornerstone, accounting for 84% of revenue, while cloud solutions contributed 14%, reaching 48 million.
Adjusted EBITDA stood at 180 million, representing a 33.9 margin. This is a strong baseline we are building upon in 2026. Let's look at Q1 2026. Revenue grew by 5.7% year over year, continuing the robust and highly visible growth paths we have established. On a constant currency basis, underlying growth was even stronger at 7.6%. Adjusted ABDA increased by 4.8% with the ABDA margin reaching 33.9% versus 34.2% in Q1 2025.
The slight margin variance reflects a shift in marketing investments phasing across quarters. As a reminder, the majority of our marketing investments are typically the highest in Q1 and Q4, this year with a particular focus on the first quarter, aligning with peak customer acquisition periods. Turning to the operational development of our two business segments. In web presence and productivity, revenue increased by 6.4% year over year or 8.2% excluding FX.
Cloud solutions increased by 6.8% year over year or 9.2% excluding FX. External revenue growth, excluding intercompany revenues from hosting services to United Internet Group companies, came in at 6.4% year over year. This solid growth reflects continued customer additions and successful cross and upselling across the product portfolio. Intercompany hosting services to United Internet Group companies decreased as planned from 10.7 million in Q1 2025 to 9 million in Q1 2026.
Regarding our performance, we have added 180,000 new customers in Q1 2026, beating our previous record of 100,000 from last quarter. Our total customer base now stands at 6.81 million. Customer inventory is growing at a CAGR of approximately 4%. RPU increased further to 16.80 in Q1 2026, up from 60.70 in the previous year and above 60.50 in the previous quarter. This upward path reflects successful up and cross selling and the strong customer net additions from the last couple of quarters starting to contribute with these customers coming to the end of their typical discount period which is usually 6 to 12 months.
Our monthly churn rate remains stable at around 1% per month. Looking ahead, we see no signs of this momentum slowing down. The combination of strong customer acquisition and increasing RPO dynamics provides a powerful engine as we progress through 2026. Let me now move to Cloud Solutions. In Q1 2026, Cloud Solutions revenue grew by 6.8% year over year. Public cloud remains our biggest growth driver, growing at 16% year over year, while private cloud grew at 5%.
Our contract with ITZ Bund, which is part of the public cloud business, has completed its ramp-up phase and is now in continuous operations, confirming our capability to deliver sovereign cloud at the highest governmental levels and we expect an increasing revenue contribution throughout the year. Public Cloud Business is expected to grow above 20 percent year-over-year in 2026. Spending to our capital expenditure.
Total capex for the first quarter came in at 17 million. This corresponds to a capex ratio of 4.9% of revenue compared to 4.5% in the previous year. Maintenance capex accounted for 4.3 million or 1.2% of revenue. This level remains low and predictable, confirming that our core infrastructure is robust and does not require heavy sustaining investments. Growth Cap Ex stood at around 12.7 million or 3.6% of revenue.
As you would expect, the vast majority of these growth investments was directed towards our cloud solution segment to support the public cloud expansion and our sovereign offerings. We are investing exactly where the future value lies. Looking ahead to 2026, we expect total capex to be in the range of 75 to 85 million, which will bring us back to a ratio of approximately 6% of revenue. This remains a very healthy level that supports innovation and growth without compromising our strong cash generation.
Of course, we are monitoring the recent rise in hardware prices. We can partially mitigate the resulting effects through various measures. Nevertheless, I would expect... that we will end up toward the upper end of the range. Let me walk through our cash flow performance. The chart shows the Q1 2026 adjusted EBITDA to free cash flow bridge. Starting from adjusted EBITDA of 118 million, we apply adjustments for non-recurring items such as long-term incentive programs and the billing carve-up. After accounting for 17 million capex, taxes, working capital movements and leasing payments, we arrive at our free cash flow after leases of 96 million.
For comparison, the free cash flow after leases in the same period last year was 59 million. Our EVTA to cash conversion remains strong, underscoring the predictable cash generation of our business. The strong free cash flow generation translate directly into rapid deleveraging. As of March 31st, 2026, net debt stood at 645 million, compromising external bank debt, less cash and receivables from United Internet.
The fixed annual interest rate stats at 4.7%, with maturity at the end of the year. The leverage ratio stands at approximately 1.3 times NetDepth to adjusted EVDA. This improved debt profile combined with the elimination of free financing risks through the fixed interest debt continues to support our financial stability and provides us with flexibility for the future. Let me now turn to our outlook. We are reaffirming our full year 2026 guidance.
At the top line, we are guiding fund revenue growth of approximately 7% on a constant currency base. an acceleration from the 6.1% we delivered in 2025. Within that, web presence and productivity is expected to grow 7-8%, building on 6.5% in 2025. Cloud solution is expected to accelerate to approximately 10% up from 6.6% in 2025, primarily driven by our public cloud business. We expect intercompany revenues to come in at approximately 30 to 40 million in 2026.
Regarding profitability, we expect an adjusted EBITDA of approximately 530 million, representing a 37 to 38 percent margin. This marks a steady increase from 36.8% in 2025. Looking at the performance in the first quarter, we are more than well on track for the full year. A thriving domain business combined with IFS 15 accounting ensures that we capture a substantial portion of our revenue right at the start of the year.
More importantly, we are now starting to see full impact of our record-breaking 2025 customer growth. As initial discount period ends, these new cohorts are contributing more significantly every month. The result? Q1 2026 delivered a robust 8.4% external growth at constant currency, a powerful acceleration compared to the full year 2025. Adjusted EBITDA reached 118 million with a margin of 33.9%, which is also well on track.
As already mentioned before, the majority of our marketing investments are typically the highest in Q1 and Q4, this year with a particular focus on the first quarter. Important to keep in mind, the initial contribution from Momentum is not part of our guidance and is therefore on top. Lastly, we are reaffirming our mid-term targets. We are targeting double-digit revenue growth above 10% on a group level, with web presence and productivity growing high single-digit and cloud solutions delivering 20% revenue growth.
On profitability, we are targeting an adjusted EBITDA margin of 40% at the mid-term. A further step up from the 37 to 38% we are guiding in 2026. This is the natural outcome of a platform business where revenue scales faster than the cost base and where AI is increasingly contributing doing work that previously required human effort or manual processes. That concludes our presentation for today and I'm now happy to take your questions.
I would say with me, there's no key strategic change. I'm just contributing to a great strategy we have already. And we need to focus just more on top line. And that's what we do already executing this year. I mean, definitely how I see the world is that you need to deliver in an easy capital equity story. top line, equity growth needs to be bigger than top line growth and own top line growth needs to be bigger than market growth.
And that's what we're driving. And this is what I'm going to support also from a CFO perspective. I call it the reallocation of budgets towards the top line oriented cost parts. So that's definitely my part. Capital allocation is a very important one. And we will definitely have different messages in the second half year of this year. And we see a mixture of different things. One part will be M&A as well.
As you already know, we were very strong in M&A just before the IPO, around the IPO. We are ready to go further from a financial perspective, but also I'm a strong believer that M&A is also increasingly substantially for the future and sustainably the organic growth. And there are different opportunities we are discussing at the moment, so M&A will be also a strong part of capital education. To the VP&P business, we still see the trajectory. We are always guiding with one-third, one-third, one-third, coming from price increases, also from cross-selling and up-selling.
A new customer is still valid for us. It changes maybe in the future with AI, but we will guide that as AI is going stronger, also the agentic AI part into our business. of the revenue growth we are having. So that means also it's intact and you need to see also The strong customer growth we generated in 2025 Q4 leading to the ARPU as well. I mean, the ARPU is definitely influenced by the strong customer growth. Also seeing the churn, you are adding so many new customers when you deduct the churn as well to the cohort, which definitely has a huge input on the ARPU.
The cost benefit, we are definitely working already internally to really, and that's the huge potential I ended in the midterm guidance in this segment in the presentation. level. We definitely have huge potential also on the margin upside. I mean, there is no surprise and we are already working to embed AI also into internal procedures to get just faster with a higher quality. So there is huge potential also on the margin side to go above the 40%.
And also in capital allocation, I can't give you already details, but obviously we would focus on M&A parts as well. As M&A is highly opportunity driven, there are definitely a couple of ideas. So first of all, we would like to have revenue. Rather a bigger acquisition than plenty of smaller ones, because that definitely gives you much more room in the integration part and you can take synergies immediately. There might be ideas of adding bigger hosting companies to the business, which would be extremely interesting also from an international growth dimension perspective. So just adding and then taking leverage and synergies out of the cost base.
And there might be plenty of ideas in the agentic AI part, which with smaller technology. All in all, we are looking for either moving and adding hosting companies or going for technology acquisitions. But as you can understand, this is highly opportunity driven. We are already being active in discussions. We don't have something in the final stage, of course not. Otherwise, we would report it. But this is what we want to embed also in the H2 message, how we see the rest of capital allocation opportunities.
For the CapEx, we definitely don't see any changes in our midterm guidance. We go along with the 6% of revenue because we're also growing with a co-location concept in the cloud business. But obviously, we see a strong pressure at the moment of price increases. We try to mitigate them all into keeping the guidance what we already communicated, but we don't know how the markets and the price increases are going forward.
So, first of all, we were the first three months into beta testing about the AI phone receptionist. And it's always good to keep on going with the beta testing as well because you want to have happy customer before you do the marketing investment. Second is, as I already indicated, we want to embed and build up the ecosystem first before we push hard in marketing a strong USP with the AI knowledge hub. That said, we want to move faster into the AI marketing spend in the second half year.
For the moment, we keep the guidance with the 10% of marketing costs overall, as we always had the last couple of years. By the way, I also mentioned that we had stronger marketing investments in Q1 2026 compared to Q1 2025. But all the efficiency ratios like the customer acquisition costs are going to the right directions. So it's highly quantity driven. As long as we feel that, we continue to push hard in marketing.
Overall, we see A guidance of the public cloud segment, you know, our cloud solutions is having three different parts. It's the private cloud. It's the public cloud, which is the strongest growing one, 16% year-on-year in Q1. Then we see the private cloud and we see the MSP business, which is more or less a CanCom-Bestly comparable part, which is not growing. The stronger we grow in public market, in general, in total, the cloud solutions will grow as well.