NFON (NFN) Q1 2025 earnings summary

Executive summary

• Launched NFON Next 2027 strategy and dedicated AI sales team, introducing AI-powered products such as voicemail transcription and Nia, an AI assistant, to drive customer acquisition and operational efficiency.

• Achieved 4.0% year-over-year revenue growth in Q1 2025, driven by botario contribution, price adjustments, and premium solutions expansion.

• Recurring revenue accounted for 93.9% of total revenue, up from 93.6% in Q1 2024, with low churn stabilizing recurring revenue.

• Number of seats grew 0.4% year-over-year to 661,350, with slower growth due to longer lead cycles and DTS migration focus.

• Early positive sales outcomes and increased engagement rates from AI initiatives, with over 60 leads and 30 demos in Q1.

Financial highlights

• Q1 2025 revenue rose 4.0% year-over-year to EUR 22.1 million, with botario contributing over 90% of total revenue growth.

• Adjusted EBITDA declined 6.9% to EUR 2.6 million, reflecting higher investment in AI, personnel, and one-off effects.

• Gross margin improved to 86% (from 84.1%), driven by high-margin recurring revenues and botario's contribution.

• Net result declined to EUR 0.2 million (Q1 2024: EUR 0.5 million) due to higher OpEx and interest expenses from the botario acquisition.

• Free cash flow rose to EUR 1.1 million, and cash position increased to EUR 13.6 million.

Outlook and guidance

• Revenue expected to grow 8–10% in 2025, supported by price increases and botario's momentum.

• Adjusted EBITDA guidance for 2025 set at EUR 13.5–15.5 million, with a margin above 15%.

• Midterm (2027) targets: double-digit revenue growth and adjusted EBITDA margin above 15%.

• Profitability expected to be backloaded, with 60% of EBITDA contribution in H2.

• Further price adjustments planned for Q2 2025 to strengthen revenue base.