Solid Q4 caps of difficult FY25; Chg.

Implied Q4p sales were largely flat (+0.2% yoy) at € 23.1m, thus ahead of the € 22.2m eNuW. The slight growth was mainly supported by the contribution of botario and initial AI project sales, while the core cloud PBX business remained impacted by subdued seat development (-2.7% yoy to 647k). The latter is largely due to still prolonged sales cycles and persisting headwinds causing temporarily increased churn. Positively, FY blended ARPU came in at € 9.91 (FY24: € 9.89), indicating the gradually improving mix. Recurring sales in Q4 slightly declined by 1.2% to € 20.2m (eNuW: € 20.7m), hence accounting for 87.6% of Q4 sales (92.1% of FY sales), underpinning revenue visibility into FY26e.

Q4p adj. EBITDA came in at € 3.1m (eNuW: € 2.9m; € 2.9m reported), matching the Q4’24 figure. The implied margin was 13.4% (+0.2pp yoy). Thanks to this, the FY25p EBITDA of € 12.6m (+2.4% yoy) slightly exceeded management’s recent outlook of € 11.5-12.5m and is reflecting ongoing efficiency gains despite the tough ITC macro environment.

For FY26, management provided a new outlook, targeting sales growth in the low to mid single-digit percentage range and adj. EBITDA of > € 12m (eNuW new: € 12.3m). We regard this as reasonable given the continued market uncertainty, while the improved mix thanks to recently launched AI features should drive ARPU and hence sales growth (eNuW: +5.3% yoy).

Despite the rather muted FY25 operating performance, we appreciate the tangible process of the company, positioning NFON as a European AI-enabled communications provider with solutions like Nia. This should move the company beyond pure cloud telephony towards higher value use cases, overall enhancing the product offering and allowing for sizeable up-selling potential.

Overall, the preliminary figures confirm that NFON remains operationally stable and strategically on track, even if a material growth reacceleration is still pending. Given a valuation of 6.2x FY26e EV/adj. EBITDA, the risk/reward profile remains attractive.

Reiterate BUY with a new PT of € 8.70 (old: € 11.10) based on DCF.