Munich, May 18, 2020 – NFON AG (collectively with its subsidiaries “NFON” or the “Company”), the only pan-European Cloud-PBX provider (telephone system from the cloud), published its quarterly report for the first quarter of 2020 today and confirmed the positive development of its business at the beginning of the year. March 2020, in particular, the first month with far-reaching contact restrictions, showed significant increases in revenue. NFON generated total revenue of EUR 16.4 million in the first three months of 2020 (Q1 2019: EUR 12.1 million). This equates to growth of 35.5%. Total revenue less the inorganic revenue contribution of Deutsche Telefon Standard GmbH (DTS) of January and February 2019 increased by 22.9%1. Recurring revenues increased by 35.6% to EUR 14.1 million – the purely organic growth rate was at 22.3%1. Overall, the share of recurring revenues in total revenues is over 85%.
Hans Szymanski, CEO and CFO of NFON AG: “We are very satisfied with how the business developed in the first quarter of 2020 despite the unusual situation that the overall economy is in. The figures underscore the strength of our business model. For us, the opportunities clearly outweigh any short-term delays in decision making with our customers. We are registering growing demand as companies now immediately understand the advantages of a cloud-based communication solution and are willing to switch over to it. At the same time, we have been able to increase the average recurring revenues per user or ARPU compared to the previous year. The month of March, in particular, showed a significant increase. As a result, our adjusted EBITDA turned slightly positive again in the first quarter of 2020 without us making any changes to our growth strategy.”
After the average recurring revenues per user (ARPU) across all sales channels and countries had gradually stabilized in recent quarters, NFON managed to increase it again in the first quarter of 2020 compared to the previous year. ARPU for the entire reporting period is EUR 9.88, compared to EUR 9.74 in the same three-month period in 2019. In March, the first month with far-reaching contact restrictions, ARPU rose significantly to EUR 10.43 due to increased voice minutes. Earnings before interest, taxes, depreciation and amortization (EBITDA) consequently amounted to EUR -0.1 million in the first quarter of 2020 (Q1 2019: EUR -1.7 million), or EUR 0.2 million adjusted for expenses for retention bonuses and stock options (Q1 2019: EUR -0.9 million).
The Management Board considers NFON to be well prepared for the rest of the year, although it is still uncertain what consequences the current situation will have on how the overall economic situation develops and what effects this may have on NFON. At the end of the first quarter of 2020, the number of customer-operated extensions (seats) had increased by 19.6% year-on-year to 467,253 (Q1 2019: 390,826 seats). This is a good basis to further increase recurring revenues as planned in the future. NFON will rely on the exploitation of cross- and upselling potentials within its existing customer base to continue the Company’s successful development. On the other hand, the consistently continued acquisition of new customers is an important strategic component. The Company clearly focuses on indirect sales via its Europe-wide partner network. This network has now been expanded to 2,700 partners, particularly in the important markets of Spain, Italy and France.
Szymanski is correspondingly optimistic for the future: “The current situation has led to rethinking among a good share of the companies. The good practical experience with flexible telephony or telephone conferences from the cloud is quite convincing. In our opinion, this is not a temporary phenomenon, but will provide additional tailwind on the European market for cloud telephony, both now and in the future, from which we will benefit as the market leader in Germany and the only pan-European provider.”
|EUR million||Q1 2020||Q1 2019||Change|
|Total revenue excluding inorganic growth1||14.9||12.1||22.9%|
|Share of recurring revenues in total revenue||85.8%||85.7%||n/a|
|Recurring revenues excluding inorganic growth1||12.7||10.4||22.3%|
|Share of recurring revenues excluding inorganic growth1||85.3%||85.7%||n/a|
1 The revenues of DTS were not consolidated in the NFON Group in January and February 2019. In order to show the organic growth on a comparable basis, the Group’s revenues in the first two months of 2020 are therefore reduced by the amount of DTS’s revenues in the same months of 2019.
The full release for the first quarter of 2020 and further information will be available on the IR website of NFON AG at corporate.nfon.com.
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About NFON AG
Headquartered in Munich, NFON AG is the only pan-European cloud PBX provider – counting more than 40,000 companies across 15 European countries as its 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 announcement is not an offer of securities for sale in the United States of America. The securities of the Company 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 of America absent registration or an exemption from registration under the U.S. Securities Act. No public offering of securities of the Company is being made in the United States of America and the information contained herein does not constitute an offering of securities for sale in the United States of America, Canada, Australia, Japan or any other jurisdiction in which such offering would be unlawful. This announcement is not for release, publication or distribution directly or indirectly in or into the United States of America, Australia, Canada, Japan or any other jurisdiction in which the distribution or release would be unlawful or to U.S. persons.