Munich, November 13, 2020 – NFON AG (together with its subsidiaries “NFON” or “the Company”), the only pan-European cloud PBX provider (telephone system from the cloud), continued to significantly increase its recurring revenues by 24.7% to EUR 43.7 million in the first nine months of 2020 (9M 2019: EUR 35.0 million) based on preliminary figures. Total revenues increased by 19.2% to EUR 49.4 million (9M 2019: EUR 41.5 million). Thus, the share of recurring revenues in total revenues has increased further and, at 88.4%, now by far exceeds the forecast of between 80% and 85% expected for 2020. At 508,265, the number of seats installed at customers’ premises was 17.7% higher than on the previous year’s reporting date (September 30, 2019: 431,935). The number of seats has thus more than doubled since the beginning of 2018.
“We have massively expanded our business activities since the IPO and are very proud to have reached an impressive milestone of more than 500,000 seats. Our dynamic growth both this year and in recent years shows that we are hitting the nerve of the times with our business model. These half a million seats also form a very solid basis for further growth in the future. After all, each seat represents an extension for which monthly charges and call minutes are incurred and thus generates recurring revenues," commented Hans Szymanski, CEO and CFO of NFON AG.
The average revenue per user (ARPU) stabilized at EUR 9.77 over the course of the year in the 2020 reporting period and at the same time exceeded the previous year’s figure of EUR 9.71. This development was mainly driven by the increasing volume of work done at home and the resulting higher call volume. The increased ARPU and the very high share of recurring revenues as well as the resulting improved gross profit had a correspondingly positive impact on the development of earnings. At the same time, expenses for travel and marketing activities, for example, were lower in the reporting period than in the previous year. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 1.8 million in the first nine months of 2020 (9M 2019: EUR -5.6 million). Adjusted EBITDA even improved by around EUR 7 million to EUR 2.5 million (9M 2019: EUR -4.2 million). This extraordinary increase in earnings demonstrates the high earnings potential of NFON’s business model. However, in view of the highly fragmented and dynamically developing market in Europe, NFON’s strategic focus is currently clearly on growth. The success of this strategy so far is demonstrated by the more than 250,000 seats that NFON has acquired in less than three years.
"We were able to impressively demonstrate the advantages of our business model in the first nine months of this year: A stable, predictable basis due to a high share of recurring revenues coupled with high growth momentum. We enable business communication on the road, at home or from the office. With NFON, our customers can act completely flexible. The growth rate of 25% in recurring revenues proves that we meet the needs of our customers. We are convinced that the many positive experiences with communication solutions from the cloud will prove to be a sustainable market driver and that this momentum will outweigh the temporary reluctance of customers in some markets to invest in the long term from our current perspective,” Szymanski concludes.
Against the backdrop that the seat growth planned for 2020 could not be fully realized due to the COVID-19 pandemic, particularly in the Italian, French, Spanish and UK markets, the company expects a slightly lower growth rate of 17% to 19% for the seat base for 2020 as a whole compared to the 20% to 24% originally projected. With regard to recurring revenues, the Management Board remains optimistic for 2020 and continues to expect a growth rate of between 22% and 26%. The high pace of growth in recent years will thus be maintained. The share of recurring revenues in total revenues will probably even exceed the previously expected range (80% to 85%) and rise to between 85% and 90%.
The Management Board of NFON AG will present the company’s preliminary 9-month figures at the German Equity Forum on Monday, November 16, 2020, 11:00 a.m. – 11:30 a.m.
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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. corporate.nfon.com/de/
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.