- Recurring revenues grow by 38% compared to prior year period
- Seats expanded by 41% yoy to 431,935
- Non-recurring revenues remain well below expectations with 8% growth
- As a result, total revenues in the first 9 months rise to EUR 41.5 million
Munich, October 24, 2019 – NFON AG (together with its subsidiaries “NFON” or the “Company”), the only pan-European cloud PBX provider (telephone system from the cloud), generated total revenues of EUR 41.5 million in the first nine months of 2019 (9M 2018: EUR 31.3 million) based on preliminary figures. In the third quarter of 2019, revenues even increased by 42% to EUR 15.1 million compared with EUR 10.6 million in the third quarter of 2018. At around 38%, recurring revenues rose to EUR 35.0 million; this still represents a very high share of 85% of total revenues. By posting an increase of 41%, the number of customeroperated extensions (seats) also rose significantly (9M 2019: 431,935 seats / 9M 2018: 305,616 seats). Nevertheless, the development of seats fell short of planning, partly due to postponements. As a direct consequence, the targeted revenue level for non-recurring revenues resulting from the one-time activation fees for the commissioning of the seats and the hardware revenues could not be achieved. These amounted to EUR 6.4 million in the first nine months 2019 (9M 2018: EUR 6.0 million).
For the year 2019 as a whole, NFON AG is therefore now planning seat growth of between 39% and 41%, which equates to an increase in recurring revenues of between 38% and 40% and a share of recurring revenues of between 80% and 85% in total revenues. This results in a rise in total revenues of between 30% and 33% (previous forecast: revenue increase of 40% to 45% compared to the previous year, albeit at the lower end of the range and seat growth of at least 45%).
Hans Szymanski, CEO & CFO of NFON AG: “In the first nine months, we managed to further accelerate our growth compared to the previous year. At the same time, we reached important milestones in the implementation of our growth strategy and thus laid the foundation for NFON’s continued successful operational development. We will continue along this path for the year as a whole. Even if we see significant growth, we are lagging behind our expectations in view of our ambitious goals with the development of new seats and the related development of non-recurring revenues.”
There were two reasons why seat growth was lower than originally planned in the first nine months of 2019:
In view of the recession in Germany, which was only imminent at the end of the first half of the year but is now becoming increasingly evident, and the weak economic data for the EU countries, customers have postponed their own expansion plans and are waiting to create new jobs. This has a direct impact on the planned seats, as they will not be activated at the same speed as it was presented to NFON at the beginning of the year.
Regardless of the current macroeconomic development throughout Europe, qualified employees in the field of software development are only available on the job market to a limited extent due to the growing demand. In order to guarantee the high quality of NFON AG’s products with the existing resources, the market launch of a few additional functionalities for the cloud telephone system has been delayed. This mainly pertained to the CTI solution (CTI – Computer Telephony Integration), which enables direct interaction between computer programs such as CRM applications and the cloud telephone system, and the applications for mobile devices. In addition to this, there was growing demand for UC functionalities (UC – United Communication) such as screen sharing, chat and video. As a consequence, customers postponed the expansion of their seats until these functionalities were introduced.
Hans Szymanski: “This week we were able to present the new NCTI pro and Nvoice for Microsoft Teams products to our German partners* at our annual Partner Day, thus these products are now available to NFON customers. We now expect to see some catch-up effects. All the more since nothing has changed in the basic positive conditions of the telecommunications market. The old ISDN world will be a thing of the past in the foreseeable future. Any company that does not yet have an all-IP solution will have the opportunity to decide for a Cloud solution**. In this market environment, we have improved our market position over the past nine months.”
* In the meantime, the Europe-wide partner network has grown to over 2,500.
** approx. 13 million seats by 2022 according to external market analyses
Investor Relations Contact
Head of Investor Relations
+49 89 45300 134
Vice President Public Relations
+49 89 45300 121
About NFON AG
Headquartered in Munich, NFON AG is the only pan-European cloud PBX provider - counting more than 30,000 companies across 15 European countries as customers. With Cloudya, NFON offers an easy-to-use, independent and reliable solution for advanced cloud business communications. Further premium and industry solutions complete the portfolio in the field of cloud communications. With our intuitive communications solutions, we enable European companies to improve their work a little, every single day. NFON is the new freedom in business communication.
This communication is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities of the Company. The securities discussed herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act. There will be no public offering of the securities discussed in this release in the United States of America and the information contained in this release does not constitute an offer of securities for sale. This announcement is not for distribution, publication or transmission, directly or indirectly, to or within the United States of America, Australia, Canada, Japan or any other jurisdiction in which such distribution is unlawful, or to U.S. persons.