IONOS Aktie

Q1 Results 2026 Webinar. I am Mira, the Chorus Call operator. [Operator Instructions] The conference is recorded. [Operator Instructions]

At this time it's my pleasure to hand over to Stephan Gramkow. Please go ahead.

Good morning everyone and welcome to the IONOS Analyst Investor Call on the First Quarter 2026. Thank you for taking the time to join us today. My name is Stephan Gramkow and I'm responsible for Investor Relations at IONOS.

Let me walk you through today's agenda. Patrik Heider CFO of IONOS will provide an update on the overall business performance and guide you through the financial details of the first quarter. He will also share our outlook for 2026 as well as our midterm targets. Following the presentation Patrik will be happy to take your questions.

I would now like to hand it over to Patrik. The floor is yours.

Thank you Stephan. Good morning ladies and gentlemen and welcome to our Q1 2026 conference call. I'm Patrik Heider CFO of IONOS. The momentum from 2025 continues into 2026. In Q1 2026 we added 180000 net new customers lifting our total base to 6.81 million customers. This is a strong start to the year and consistent with our expectation of further accelerating customer growth.

The quality of new customers remains excellent. We continue to grow revenues across all relevant product lines from web hosting to communication back office and domains. On the right-hand chart you can see the rising share of AI in Web Presence & Productivity revenue. In 2025 AI accounted for approximately 20% of additional revenue. We expect that to reach around 50% this year further growing to 80% by 2028. The more AI we embed the higher the revenue per customer combining volume growth with product mix improvement.

AI is embedded across our entire product ecosystem. In Web Presence & Productivity we are continuously enhancing our product offerings whether as a feature in onboarding or as a stand-alone product for example like the AI phone receptionist. From domains and web hosting to mail solutions all products already include smart AI features.

In Cloud Solutions we are delivering sovereign trusted European infrastructure for both SMBs and enterprise clients. Our portfolio extends from public and private cloud to specialized AI infrastructure including the AI Model Hub GPU servers model fine-tuning and app integrations such as n8n on VPS.

Let me give you an update on the AI phone receptionist which we launched in Germany and the U.S. in the beginning of this year. As a reminder the AI phone receptionist is essentially a virtual employee. It is able to answer and manage calls in natural language across more than 20 different languages trained on the customer's own website and knowledge base. It is able to handle requests to book meetings. It captures leads around the clock and delivers structured call transcripts to the business owner. We have already generated more than 8600 orders so far. The highest share has been in Germany and the U.S. since we launched in those countries first.

The incoming ARPU is already around EUR 30 underpinning the additional value contribution. Please keep in mind that the AI phone receptionist is the first product within a broader platform. With more capabilities and agents being added we expect the ARPU to grow further. This is also the reason why marketing investments have been held back on purpose as we don't want to invest before more capabilities are available. Initial customer satisfaction is high with an NPS above 50. These are strong early results from a newly introduced product with very limited marketing. The adoption curve and feedback confirm that we are solving real problems for our customers.

What will the broader platform look like? IONOS Momentum is a fully integrated modular ecosystem driven by a central intelligence layer the AI Knowledge Hub. As the foundation of the entire platform, the AI Knowledge Hub aggregates company data, documents and interaction history in a shared brain. This ensures that every tool in the suite operates with deep contextual relevance. The power of Momentum lies in this synergy. The more a customer engages with the system, the smarter the hub becomes, leveraging the vast data we already securely host for our customers.

Building on this foundation, the ecosystem delivers seamless end-to-end automation. The AI front desk, which includes the AI phone receptionist, acts as the first point of contact, managing inbound communication across all channels and feeding real-time data directly into the hub. This data flows into smart AI CRM, which classifies leads and suggests next best actions based on the hub's insights. The AI Presence Suite then makes these insights actionable, automating marketing, reputation management and legal compliance.

For businesses requiring maximum data sovereignty, the Sovereign AI chatbot provides a GDPR-native European alternative to global models fully integrated into the shared intelligence. By embedding the AI Knowledge Hub at the core of daily operations, IONOS Momentum doesn't just offer tools, it creates a self-learning platform that drives retention, expands revenues and build unmatched long-term value.

Let's have a look on our road map. Following the successful launches in Germany and the U.S., we have rolled out the AI phone receptionist to the U.K. and France at the end of March. We also launched a phone receptionist at our brand STRATO in Germany, and in April, we rolled out the phone receptionist in Canada and Spain. In parallel, we are working on the feature set. Key additions include the AI Knowledge Hub, further integrations, dedicated workflows with multiple agents and multichannel capabilities covering voice, e-mail and chat planned for the second half of 2026.

At this point, let me turn to the financial results of the first quarter 2026. We generated EUR 348 million in revenue for the first quarter. Web Presence & Productivity remains our cornerstone, accounting for 84% of revenue, while Cloud Solutions contributed 14%, reaching EUR 48 million. Adjusted EBITDA stood at EUR 118 million, representing a 33.9% margin. This is a strong baseline we are building upon in 2026.

Let's look at Q1 2026. Revenue grew by 5.7% year-over-year, continuing the robust and highly visible growth path we have established. On a constant currency basis, underlying growth was even stronger at 7.6%. Adjusted EBITDA increased by 4.8% with the EBITDA margin reaching 33.9% versus 34.2% in Q1 2025. The slight margin variance reflects a shift in marketing investments phasing across quarters.

As a reminder, the majority of our marketing investments are typically the highest in Q1 and Q4 this year, with a particular focus on the first quarter, aligning with peak customer acquisition periods.

Turning to the operational development of our 2 business segments. In Web Presence & Productivity, revenue increased by 6.4% year-over-year or 8.2% excluding FX. Cloud Solutions increased by 6.8% year-over-year or 9.2% excluding FX. External revenue growth, excluding intercompany revenues from hosting services to United Internet Group companies, came in at 6.4% year-over-year. This solid growth reflects continued customer additions and successful cross and upselling across the product portfolio. Intercompany hosting services to United Internet Group companies decreased as planned from EUR 10.7 million in Q1 2025 to EUR 9 million in Q1 2026.

Regarding our performance, we have added 180,000 new customers in Q1 2026, beating our previous record of 100,000 from last quarter. Our total customer base now stands at 6.81 million. Customer inventory is growing at a CAGR of approximately 4%. ARPU increased further to EUR 16.80 in Q1 2026, up from EUR 16.70 in the previous year and above EUR 16.50 in the previous quarter. This upward path reflects successful up and cross-selling and the strong customer net additions from the last couple of quarters starting to contribute, with these customers coming to the end of their typical discount period, which is usually 6 to 12 months. Our monthly churn rate remains stable at around 1% per month.

Looking ahead, we see no signs of this momentum slowing down. The combination of strong customer acquisition and increasing ARPU dynamics provides a powerful engine as we progress through 2026.

Let me now move to Cloud Solutions. In Q1 2026, Cloud Solutions revenue grew by 6.8% year-over-year. Public cloud remains our biggest growth driver, growing at 16% year-over-year, while private cloud grew at 5%. Our contract with ITZBund, which is part of the public cloud business, has completed its ramp-up phase and is now in continuous operations, confirming our capability to deliver sovereign cloud at the highest governmental levels, and we expect an increasing revenue contribution throughout the year. Public cloud business is expected to grow above 20% year-over-year in 2026.

Turning to our capital expenditure. Total CapEx for the first quarter came in at EUR 17 million. This corresponds to a CapEx ratio of 4.9% of revenue compared to 4.5% in the previous year. Maintenance CapEx accounted for EUR 4.3 million or 1.2% of revenue. This level remains low and predictable, confirming that our core infrastructure is robust and does not require heavy sustaining investments. Growth CapEx stood at around EUR 12.7 million or 3.6% of revenue. As you would expect, the vast majority of this growth investment was directed towards our Cloud Solutions segment to support the public cloud expansion and our sovereign offerings. We are investing exactly where the future value lies.

Looking ahead to 2026, we expect total CapEx to be in the range of EUR 75 million to EUR 85 million, which would bring us back to a ratio of approximately 6% of revenue. This remains a very healthy level that supports innovation and growth without compromising our strong cash generation. Of course, we are monitoring the recent rise in hardware prices. We can partially mitigate the resulting effects through various measures. Nevertheless, I would expect that we will end up towards the upper end of the range.

Let me walk through our cash flow performance. The chart shows the Q1 2026 adjusted EBITDA to free cash flow bridge. Starting from adjusted EBITDA of EUR 118 million, we apply adjustments for nonrecurring items such as long-term incentive programs and the billing carve-out. After accounting for EUR 17 million CapEx, taxes, working capital movements and leasing payments, we arrive at our free cash flow after leases of EUR 96 million. For comparison, the free cash flow after leases in the same period last year was EUR 59 million. Our EBITDA to cash conversion remains strong, underscoring the predictable cash generation of our business.

The strong free cash flow generation translates directly into rapid deleveraging. As of March 31, 2026, net debt stood at EUR 645 million, compromising (sic) [ comprising ] external bank debt less cash and receivables from United Internet. The fixed annual interest rate stands at 4.7% with maturity at the end of the year. The leverage ratio stands at approximately 1.3x net debt to adjusted EBITDA. This improved debt profile, combined with the elimination of refinancing risks through the fixed interest debt continues to support our financial stability and provides us with flexibility for the future.

Let me now turn to our outlook. We are reaffirming our full year 2026 guidance. At the top line, we are guiding for revenue growth of approximately 7% on a constant currency basis, an acceleration from the 6.1% we delivered in 2025. Within that, Web Presence & Productivity is expected to grow 7% to 8%, building on 6.5% in 2025. Cloud Solutions is expected to accelerate to approximately 10%, up from 6.6% in 2025, primarily driven by our public cloud business. We expect intercompany revenues to come in at approximately EUR 30 million to EUR 40 million in 2026. Regarding profitability, we expect an adjusted EBITDA of approximately EUR 530 million, representing a 37% to 38% margin. This marks a steady increase from 36.8% in 2025.

Looking at the performance in the first quarter, we are more than well on track for the full year. A thriving domain business combined with IFRS 15 accounting ensures that we capture a substantial portion of our revenue right at the start of the year. More importantly, we are now starting to see full impact of our record-breaking 2025 customer growth. As initial discount period ends, these new cohorts are contributing more significantly every month. The result, Q1 2026 delivered a robust 8.4% external growth at constant currency, a powerful acceleration compared to the full year 2025. Adjusted EBITDA reached EUR 118 million with a margin of 33.9%, which is also well on track.

As already mentioned before, the majority of our marketing investments are typically the highest in Q1 and Q4 this year with a particular focus on the first quarter. Important to keep in mind, the initial contribution from Momentum is not part of our guidance and is, therefore, on top.

Lastly, we are reaffirming our midterm targets. We are targeting double-digit revenue growth above 10% on a group level, with Web Presence & Productivity growing high single digit and Cloud Solutions delivering 20% revenue growth. On profitability, we are targeting an adjusted EBITDA margin of 40% at the midterm, a further step up from the 37% to 38% we are guiding in 2026. This is the natural outcome of a platform business where revenue scales faster than the cost base and where AI is increasingly contributing, doing work that previously required human effort or manual processes.

That concludes our presentation for today, and I'm now happy to take your questions.

[Operator Instructions] First question comes from the line of Dhruva Shah from UBS.

Patrik you've been at IONOS for almost half a year now. So just curious to see what you would say are the key strategic changes you're looking to make going forward. You also touched upon the rapid rate at which IONOS is deleveraging. So outside of any strategic changes with the underlying business is there also any change to the capital allocation priorities that you're looking to make?

Second question really was just on WP&P. Historically you've talked about the WP&P growth driven by 3% customer growth 3% upselling and then 3% price rises. But it seems that the shift -- there's been a slight shift now to 4% customer growth and then 5% growth on ARPUs. So customer growth clearly going very very well. But then if I look at the ARPUs year-on-year growth is flat. So how do you get from the year-on-year flat profile for ARPUs through to the 5% growth? Can you maybe walk us through what the underlying impacts are of cross-selling and upselling but how that may be offset by this dilution from new customers coming in at lower rates?

And the final question I really had is obviously there's a lot of debate and questions in terms of what AI could potentially do to the top line for the business both on the positive and negative side. But curious to also get your take on how AI may be impacting your own business and especially the cost side of things and any opportunities there as well.

Yes. Thank you very much for your questions. I'm going to start with the first one. The key strategic changes also in the direction of capital allocation. I would say with me there is no key strategic change. I'm just contributing to a great strategy we have already and we need to focus just more on top line. And that's what we do already executing this year. I mean definitely how I see the world is that you need to deliver in an easy capital equity story. You need to deliver top line. EBITDA growth needs to be bigger than top line growth and own top line growth needs to be bigger than market growth and that's what we're driving. And this is what I'm going to support also from a CFO perspective. I call it the reallocation of budgets towards the top line-oriented cost part. So that's definitely my part.

Capital allocation is a very important one and we will definitely have different messages in the half -- second half year of this year. And we see a mixture of different things. Definitely one part will be M&A as well. As you already know we were very strong in M&A just before the IPO or around the IPO. We are ready to go further from a financial perspective but also I'm a strong believer that M&A is also increasingly substantially for the future and sustainably the organic growth. And there are different opportunities we are discussing at the moment. So M&A will be also a strong part of capital allocation.

To the WP&P business we still see the trajectory we are always guiding with 1/3 1/3 1/3 coming from price increases also from cross-selling and upselling and new customer is still valid for us. It changes maybe in the future with AI but we will guide that as AI is growing stronger also the agentic AI part into our business. But also this year for the start of the year we see a contribution of price increases approximately 1% of the revenue growth we are having. So that means also it's intact and you need to see also the strong customer growth we generated in 2025 Q4 leading to the ARPU as well. I mean the ARPU is definitely influenced by the strong customer growth.

Also seeing the churn you are adding so many new customers when you deduct the churn as well to the cohort which definitely has a huge input on the ARPU. You also have an impact from FX which is quite significantly this year a negative impact on the ARPU. Of course you have different other directions going for example the price increasing into the right direction. So the ARPU has influenced also the IFRS part with the strong domain business in the first quarter which was definitely above the expectation which is a good news but also with the IFRS 15 we need to recognize the whole revenue in Q1 which is also an influencer. So all in all we believe that the ARPU is going along over the years with the right trajectory and we do see a mixture of ARPU growth and also customer net growth being in that 1/3 1/3 1/3.

AI on top for me is very easy. It will contribute to our revenue growth going above the double-digit growth in the WP&P segment. This is why we also had this chart added to the presentation which shows the impact of new -- net new revenues contributed via AI which goes over the years already in 2028 to 80% in the WP&P segment. So that means the stronger the AI is coming with the agentic AI but also adding features to our existing products like for example the website builder, the more we can win by AI. So definitely, we are an AI winner contributing and benefiting from the AI movement.

I hope those answers your questions. And if not, please let me know.

Yes, that's super helpful. Maybe just a couple of follow-ups. Just first on, you gave us a kind of a hook in terms of expect something in terms of capital allocation in terms of H2. Is there any more color you can give there? I know you mentioned M&A will be a big part, but is the other big part, shareholder returns? And is that likely to be buybacks? So that's kind of the first follow-up. And then the second really is, that chart is very helpful in terms of the top line benefits for AI, but I was also curious in terms of the potential cost saving benefits for IONOS from AI as well.

Yes, you're absolutely right. I missed that one, the cost benefit. We are definitely working already internally to really -- and that's the huge potential I added in the midterm guidance in this segment in the presentation. We definitely have huge potential also on the margin upside. I mean, there is no surprise, and we are already working to embed AI also into internal procedures to get just faster with a higher quality. So there's huge potential also on the margin side to go above the 40% level.

And also on capital allocation, I can't give you already details, but obviously, we would focus on M&A part as well. As M&A is highly opportunity driven, there are definitely a couple of ideas. So first of all, we would like to have rather a bigger acquisition than plenty of smaller ones because that definitely gives you much more room in the integration part and you can take synergies immediately. There might be ideas of adding bigger hosting companies to the business, which would be extremely interesting also from an international growth dimension perspective. So just adding and then taking leverage and synergies out of the cost base. And there might be plenty of ideas in the agentic AI part, which -- with smaller technology.

So all in all, we are looking for either moving and adding hosting companies or going for technology acquisitions. But as you can understand, this is highly opportunity driven. We are already being active in discussions. We don't have something in the final stage, of course, not. Otherwise, we would report it. But this is what we want to embed also in the H2 message, how we see the rest of capital allocation opportunities.

The next question comes from the line of Mollie Witcombe from Goldman Sachs.

I have two, please. Firstly, I'd like to dig a little bit into CapEx. Would you be able to give us a little bit of color about what you're seeing in terms of equipment acquisition costs, what you've done to protect yourself longer term on that front and how we should be thinking about that developing into the midterm? And then secondly, just a bit of color on the competitive trends that you're seeing and how you're thinking about pricing specifically in Germany and the U.K.?

For the CapEx, we definitely don't see any changes in our midterm guidance. We go along with the 6% of revenue because we're also growing with the colocation concept in the cloud business. But obviously, we see a strong pressure at the moment of price increases. We try to mitigate them all into keeping the guidance what we already communicated, but we don't know how the markets and the price increases are going forward. But all in all, with the 6%, we are feeling in the midterm guidance very well. Out of the concept, we are having own data centers with own equipment and also the colocation part. So no big changes here.

And the competitive environment, especially in Germany and the U.K., is not -- you asked for the Germany and U.K., I think, is not -- obviously is not changing. We see all the same competitors and competitive environment. Obviously, agentic AI is extremely interesting from different parts. You see agentic AI coming from different industries. But we obviously have 2 main USPs here. First of all, we have a huge customer base with 6.8 million customers, existing customers. For all of them, agentic AI is very interesting. And the second USP I mentioned in my presentation is the concept of the AI Knowledge Hub. We know everything about our customers already, domain, e-shop systems, CRM systems, website builder. All the knowledge will be embedded into this layer of the AI Knowledge Hub and nobody can deliver this USP as strong as we can deliver. This is why we have a huge USP also in a competitive environment when it comes to agentic AI. But for the normal hosting business and cloud business, we don't see any dramatic changes.

Okay. Maybe just a follow-up quickly. Has there been any update on the gigafactory proposal?

No, except almost normal one that they're going to extend again the parameters for the European Union. So we are just waiting for the detailed parameters when it comes to this deal, and we are ready to move. We would be ready to move. If the business case is an interesting one, we would move into this one. If not, we are going to continue and focus on our core business. So we keep you updated as long as there is no clear signal from the European Union. We don't know yet. But again, we would be ready to move on.

[Operator Instructions] The next question comes from Gustav Froberg from Berenberg.

I have a couple. First on marketing investments. You mentioned that you've held back on pushing with marketing investments for your AI solutions. And I was just wondering, once you do decide to kick this into gear, what type of magnitude are you thinking about? And how do you anticipate that the marketing investments and spending on AI distribution, if you like, will look like? And then secondly, a question on cloud and the step-up that you expect in cloud growth for the year. How much of this step-up in growth do you expect will come from the ITZBund contract and how much should come from other customers? And then last one is a technical question. Just on IFRS 15. How much of the contribution to growth would you say that this revenue quirk made up in the first quarter?

Yes. Thank you, Gustav, for your questions. For the marketing investments, we hold it back out of 2 main reasons. So first of all, we were the first 3 months into beta testing about the AI phone receptionist. And it's always good to keep on going with the beta testing as well because you want to have happy customers before you do the marketing investment. Second is, as I already indicated, we want to embed and build up the ecosystem first before we push hard in marketing because this is what we see as a strong USP with the AI Knowledge Hub.

That said, we want to move faster into the AI marketing spend in the second half year. We keep the -- for the moment, we keep the guidance with the 10% of marketing costs overall, as we always had the last couple of years. By the way, I also mentioned that we had stronger marketing investments in Q1 2026 compared to Q1 2025, but all the efficiency ratios like the customer acquisition costs are going to the right directions. So it's highly quantity driven. As long as we feel that, we continue to push hard in marketing because I think it completely makes sense to go to customer net growth and see the efficiency ratios going to the right direction. So we always take the balance, how much net new customers we'll win and then also obviously, going to the marketing cost. And obviously, marketing spend for the AI part is completely different because we also go for existing customers here with the 6.8 million.

Cloud ITZ will be obviously a big driver as well in the cloud business. Overall, we see a guidance of the public cloud segment. Our Cloud Solutions is having 3 different parts. It's the private cloud -- it's the public cloud, which is the strongest growing one, 16% year-on-year in Q1. Then we see the private cloud and we see the MSP business, which is more or less a CANCOM basically comparable part, which is not growing. The stronger we grow in public market, in general, in total, the Cloud Solutions will grow as well. The public cloud segment will grow above the 20% this year. And obviously, this is not only containing the ITZBund. This will be a part. It will be always becoming a smaller part of this cloud segment because we have a nice pipeline. We do see nice traction now with all different kinds of customers in the enterprise and in the SMB business. So it will be a part, but it won't -- it will be more and more an important part from a financial perspective. The customer is very happy with our solution. But from a financial perspective, the dependence on the ITZBund will become much weaker.

Great. And then a quick one on IFRS 15.

Sorry, the IFRS 15. It was around, in the Q1, EUR 6 million, which was then underlying the IFRS 15.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Stephan Gramkow for any closing remarks.

Yes. Thank you very much for participating today. If there are any follow-up questions, feel free to reach out. Thank you very much, and have a great day. Bye-bye.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

Ladies and gentlemen, welcome to the IONOS Group SE publication of the Full Year Results 2025 Webinar. I am Mira, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, it's my pleasure to hand over to Stephan Gramkow. Please go ahead.

Good morning, everyone, and welcome to the IONOS Analyst Investor Call for FY 2025. Thank you for taking the time today to join us. My name is Stephan Gramkow, and I'm responsible for Investor Relations at IONOS.

Let's have a look at today's agenda. Achim Weiss, CEO of IONOS, will provide an update on the overall business and important strategic topics. Patrik Heider, CFO of IONOS, will then take you through the financial details of 2025 and Q4 in particular. Patrik will then also talk about our outlook for 2026 and mid-term targets. Achim and Patrik will then be happy to answer any open questions after the presentation.

I would now like to hand it over to Achim. The floor is yours.

Thank you, Stephan. Good morning, ladies and gentlemen, and welcome to our conference call. I'm Achim Weiss, CEO of IONOS. The headline from 2025 is customer growth. We nearly doubled net new customer additions from 160,000 in 2024 to 310,000 in 2025, lifting our total base to 6.63 million customers. For 2026, we anticipate even further acceleration in our new customer growth.

The quality of customers remains excellent. We grew revenue across all relevant product lines, from Webhosting to communication, back office and domains. On the right-hand chart, you can see the rising share of AI in Web Presence & Productivity revenue. In 2025, AI accounted for approximately 20% of additional revenue. We expect that to reach about 50% this year, further growing to 80% by 2028.

Momentum will be a significant contributor. The more AI we embed, the higher the revenue per customer, combining volume growth with product mix improvements. AI is now embedded across our entire product ecosystem. In Web Presence & Productivity, we are enhancing our core offerings, whether as a feature in onboarding and administration or as a stand-alone product like the AI phone receptionist. From Domains and Webhosting to E-commerce and back-office solutions, all products now include intelligent features.

In Cloud Solutions, we are delivering sovereign, trusted European infrastructure to both SMBs and enterprise clients. Our portfolio extends from public and private cloud to specialized AI infrastructure, including the AI Model Hub, GPU Service and Model Fine Tuning and App Integration such as n8n on VPS.

In November, we launched IONOS Momentum, which is a full stack ecosystem for SMBs to run digital operations end-to-end. As part of Momentum, we introduced the AI Phone Receptionist in Germany and the U.S. at the end of last year. It's essentially a virtual employee. It answers and manages business calls in natural speech across more than 20 languages, trained on the customer's own website and knowledge base. It handles inquiries, books appointments, captures leads around the clock and delivers structured call transcripts to the business owner.

With almost no marketing investments, we have generated approximately 3,300 orders. 80% of these customers have completed the setup and are actively live ahead of our internal targets. In the early experience survey, 50% of respondents rated their satisfaction at an average of 4.5 out of 5. Here's an example. One of our German customers is a mid-sized office planning consultancy, around 15 people. The consultants spent most of the time in on-site meetings, and nobody was able or available to answer incoming calls. Leads were lost, follow-ups delayed. With the AI Phone Receptionists, all calls are now handled around the clock. The AI captures the caller's intent, schedules appointments where needed and sends structured summaries by email. The team focuses on their core work and follows up efficiently.

We see similar adoption in consulting and IT, shops and stores and building services segments where phone availability is business critical, but often conflicts with the actual work. Across our early user base, customers report easy onboarding, 24/7 reachability and time savings of up to 10 hours per week on average. They particularly value the natural professional quality of the conversations and the structural call summaries that make every interaction immediately actionable.

These are early results from a newly introduced product with very limited marketing. The adoption curve and feedback confirm we are solving real problems. AI phone receptionist is the first product within the broader vision. IONOS Momentum is a fully integrated modular ecosystem. Each product connects to the next. At the front sits the AI Frontdesk, the first point of contact between an SMB and its customers. It handles inbound communication across voice, chat, email and messaging apps. It manages appointments, prioritizes requests, and it generates data and feeds it into the rest of the system.

The data flows into the Smart AI CRM, which captures and classifies leads, stores interaction history, analyzes intent and sentiment and suggests next best actions.

The AI Presence Suite turns customer knowledge outward, automating content creation, managing online presence and handling marketing, reputation, including legal and security matters.

The Sovereign AI Chatbot runs out the ecosystem, a fully EU-hosted, GDPR-native AI front end running on sovereign European models. It offers enterprise-grade AI at cost-efficient price points, a credible alternative to ChatGPT or Gemini with the data sovereignty our customers require.

What ties everything together is the AI Knowledge Hub at the base, a shared intelligence layer, combining company data from the website, customer documents and interaction data enriched over time. Each product feeds the other. The more a customer uses Momentum, the more the system learns. This creates a platform embedded in daily operations, driving retention, expanding revenue per customer and building switching costs over time.

So what does the road map look like? Following the AI Phone Receptionist launch, we are rolling it out across additional countries and brands where we already have a customer base, the incremental investment is low. In parallel, we are expanding the feature set. Key additions include AI Knowledge Hub, further integrations, dedicated workflows with multiple agents and multichannel capabilities covering voice, email and chat.

The website remains the single most important digital asset, and SMB owns their own channel, their brand, their customer interface. With AI, this becomes even more critical. Large language models pull information from the web just as search engines always have. An SMB without a well-maintained authoritative website will not exist in AI-driven search and discovery. The website is no longer just a marketing tool, it's infrastructure.

SMB also want to own their customer relationship directly, not via third-party platforms or search engines. A website combined with a professional domain gives them exactly that. And IONOS delivers this as a complete integrated package, domains, hosting, e-commerce, email, security and support from day 1. This foundation creates a natural upsell path. We see strong demand for high-value, high-margin AI-powered services on top of the Web Presence stack: GEO, Generative Engine Optimization, as a successor of SEO; Agentic AI tools; MCP services and more.

At the same time, AI is lowering the barrier of entry. Our prompt to website capabilities bring customers directly into higher-value products, moving them from basic shared hosting to my website and beyond, which drives ARPU at scale. As we embed more AI into onboarding, editing and daily workflows, product usage deepens and retention improves. IONOS sits at the intersection of necessity and opportunity. Websites are becoming more strategic for SMBs, and AI drives enhanced revenue opportunities on top.

Let me address AI-powered website creation directly, Vibe coding. Generating a website, an app or digital presence by describing what you want in plain language is a real and accelerating trend. We are fully embracing it. Distinction is this, stand-alone AI builders generate a website. Our customers get that, plus a domain, hosting, e-commerce, email, security and personal support, all connected from day 1. This drives higher attach rates and higher ARPU from the first interaction.

For my website, we launched Vibe onboarding in February. A customer describes their business in natural language, and our AI generates a complete ready-to-use website connected to their domain and email styled, structured and live. In Q2, we will add further prompt-to-editor capabilities so customers can continue refining their site through conversation.

For WordPress, we have taken a slightly different approach. Our WordPress customers tend to be more sophisticated, operating larger digital presences. Our WordPress AI Assistant combines the extensibility of the world's leading CMS with AI-powered content generation enhancing design controls and integrated site management. It makes WordPress more accessible and more powerful the shift toward AI-powered website creation accelerating our business. We embed these capabilities into our platform and capture the value of everything that follows.

We are building IONOS into an AI-first business on 2 dimensions. You have seen the external side, AI embedded across our products and deeply integrated in how our customers operate, but there's also an internal dimension. We are using AI to drive operational efficiency, automating workflows, reducing overhead and making our teams more effective. This has a direct impact on margins.

Our core customers, solo entrepreneurs and SMBs, representing over 90% of our revenue, want AI that is simple, affordable and delivers tangible results without a technical team. We are not selling AI for its own sake. We are selling outcomes, more customers, lower costs, faster operations. And we have a structural advantage that is hard to replicate, proprietary European cloud infrastructure with GDPR-native guarantees built on a decade of trust.

AI strengthens our competitive position, expands the addressable market and drives higher ARPU. The European cloud market is forecasted to grow at a CAGR of roughly 15% in the coming years, driven by SaaS adoption, hybrid cloud solutions, AI integration and increasing demand for digital sovereign infrastructure. Our aim is to accelerate revenue growth, particularly in SME, mid-market and public sector.

We are expanding our product portfolio with GPU service and enhanced private cloud features. We are also growing our partner network, adding new partners and leveraging existing global relationships. And our contract with ITZBund completed a successful ramp-up phase in 2025 and is now in continuous operation, confirming our capability to deliver sovereign cloud at the highest governmental levels.

So at this point, I would like to hand over to Patrik to walk you through our financials before we open for Q&A.

Thank you, Achim, and good morning, everyone. It is a pleasure to be with you for my first results presentation as CFO of IONOS. As a brief reminder, following the reclassification of our AdTech business as discontinued operations in November 2025, it is no longer reflected in our reporting structure. This allows us for a clear focus on our core business areas.

Looking at the structure, we generated EUR 1.3 billion in revenue in 2025. Web Presence & Productivity remains our cornerstone, accounting for 83% for nearly EUR 1.1 billion, while Cloud Solutions contributed 14%, reaching EUR 187 million. On the bottom line, we delivered EUR 485 million in adjusted EBITDA, representing a 36.8% margin. This significant step-up clearly demonstrates the operating leverage embedded into the IONOS platform. We are converting revenue into profit more efficiently than ever before in our history. This is the strong baseline we are building upon. Let's dive into the details.

Let's look at the financial performance for the full year 2025. Revenue amounted to EUR 1.317 billion. This represents a year-over-year growth of 5.5% or 6.1% in constant currency. Adjusted EBITDA increased by 18.5% to EUR 485.2 million. This corresponds to an adjusted EBITDA margin of 36.8%, a significant expansion of 4 percentage points compared to the previous year. It clearly demonstrates the massive operating leverage of our platform and our discipline in converting revenue into profit. Marketing investments has been higher than last year.

As a reminder, we are differentiating between brand investments and performance marketing. While brand investments will stay at a level of around EUR 65 million to EUR 70 million, we expect performance marketing to grow in line with revenue.

Looking at the fourth quarter, revenue increased to EUR 336.7 million. This represents a growth of 3.6%. On a constant currency basis, revenue grew 5.2%. Turning to profitability, we see a very strong development. Adjusted EBITDA increased by 11.9% to EUR 116.8 million. This results in adjusted EBITDA margin of 34.7% compared to 32.1% last year. This margin expansion is even stronger when you consider the phasing of marketing investments. In Q4 of the previous year, marketing spend was comparatively low.

This phasing effect resulted in approximately EUR 3 million higher marketing expenses compared to last year. Adjusted for the different phasing, EBITDA would have been around EUR 120 million and an implied EBITDA growth of around 15% year-over-year. The key takeaway is clear. We are able to invest in our growth via brand while simultaneously expanding our margins significantly. This is a definition of a scalable business model.

Turning to the operational development of our business in the fourth quarter. In Web Presence & Productivity, revenue increased to EUR 274.3 million, representing a reported growth of 3.8%. Adjusted for currency effects, the underlying growth stood at 5.4%.

Turning to Cloud Solutions. Revenue came in at EUR 51 million, representing a currency-adjusted growth of 6%. External revenue, including Web Presence & Productivity and Cloud Solutions grew by 3.8% year-over-year or 5.5% at constant currency.

Looking at the fourth quarter, we achieved a record intake of 100,000 net new customers. This brings us to the total net additions for the full year of 2025 to 310,000. To put this into a context, and as Achim already mentioned, we have nearly doubled our customer growth compared to the previous year. This confirms that our product portfolio is resonating strongly in the market and that the marketing investment I mentioned earlier are successfully converting.

After the dip in Q3, which was also driven by the dilution from the strong customer growth, our ARPU increased sequentially to EUR 16.50 in the fourth quarter. Our monthly churn rate remained stable at around 1% per month. Looking ahead, we see no signs of this momentum slowing down. The combination of strong customer acquisition and increasing ARPU dynamics provides a powerful engine for 2026.

Let me now move to Cloud Solutions. Revenue in the fourth quarter came in at EUR 51 million, up to -- up from EUR 49 million last year. Currency adjusted, this returns rates into a growth rate of 6%. For the full year, we generated EUR 187 million in revenue compared to EUR 177 million in 2024. Our public cloud business remains our biggest growth driver, growing 11% year-over-year.

Important to mention that we recognized less revenue from ITZBund in Q4 compared to the previous year, creating a small headwind for the fourth quarter 2025. As Achim already pointed out, the project is on track, and we expect to see higher revenue contributions throughout the year.

Turning into our capital expenditure. The figures for 2025 demonstrate the high efficiency of our well-invested platform. Total CapEx for the full year came in at EUR 65.2 million. This corresponds to a CapEx ratio of 5% of revenue compared to 6.2% in the previous year. Breaking it down, maintenance CapEx accounted for the majority of around EUR 49.8 million or 3.8% of the revenue. This level remains low and predictable, confirming that our core infrastructure is robust and does not require heavy sustaining investments. Gross CapEx stood at around EUR 15.4 million or 1.2% of revenue.

As of -- as you would expect, the vast majority of this growth investment was directed towards our Cloud Solutions segment to support the public cloud expansions and sovereign offerings. We are investing exactly where the future value lies.

Looking ahead to 2026, we expect total CapEx to be in the range of EUR 75 million to EUR 85 million, which would bring us back to a ratio of approximately 6% of revenue. This remains a very healthy level that supports innovation and growth without compromising our strong cash generation.

Let's walk through our cash flow bridge on the next page. This slide demonstrates the cash-generative power of our business model. We start with our adjusted EBITDA from continuing operations of EUR 485 million. From this base, we deduct EUR 21 million in adjustments, primarily related to long-term incentive programs and the billing carve-out. Now, we need to add back the EBITDA contribution from the AdTech business, which amounts to EUR 31 million. Even though it is classified as discontinued for reporting purposes, it is generating cash flow in our accounts.

Moving to the outflows. CapEx was EUR 65 million and taxes accounted for EUR 81 million, reflecting higher earnings. Working capital was still slightly negative, but improved from the previous quarter. In the longer run, working capital should be neutral. This results in a free cash flow before leasing of EUR 327 million. After deducting EUR 90 million for lease payments, our free cash flow after leases stands at EUR 308 million compared to EUR 296 million in 2024.

Finally, we paid EUR 49 million in interest, a decrease compared to the previous year, thanks to our deleveraging efforts. And most importantly, we also returned capital to our shareholders, executing share buybacks totaling EUR 57 million throughout the year. One metric worth highlighting for EBITDA to cash conversion is well above 80%, underpinning the strong cash generation for our businesses. The strong free cash flow generation translates directly into rapid deleveraging.

At the end of 2025, net debt stood at EUR 697 million. This figure includes only external bank debt as shareholder loan from United Internet was fully repaid in 2025. The weighted average annual interest rate has improved accordingly to 4.7%. While AdTech itself did not carry significant financial liability, its EBITDA is included in the leverage calculation. Including AdTech EBITDA, our leverage ratio stands at 1.3x net debt to adjusted EBITDA. Excluding AdTech, reflecting the future structure of the business, the leverage ratio is 1.4x at the end of the year. This improved debt profile, combined with the elimination of refinancing risk throughout fixed interest debt, continue to support our financial stability and provides us with flexibility for the future.

Let me now turn to our outlook. At the top line, we are guiding for revenue growth of approximately 7% on a constant currency basis, an acceleration from the 6.1% we delivered in 2025. Within that, Web Presence & Productivity is expected to grow at 7% to 8%, reflecting the continued momentum in customer additions, cross-selling and upselling, prices increasing, resulting in a successful ARPU expansion.

Cloud Solution is expected to accelerate to approximately 10%. Our public cloud business is the primary driver here, and we are increasingly confident in the growth path as the ITZBund contract moves into full operations. We expect intercompany revenues in approximately EUR 30 million to EUR 40 million in 2026. So the underlying external revenue growth is actually slightly stronger than the headline figure suggests growing at approximately 8%.

On profitability, we are guiding for an adjusted EBITDA of EUR 530 million, leading to 37% to 38% EBITDA margin, a further step from the 36.8% we have delivered in 2025. This continued margin expansion reflects 2 things: the natural operating leverage of the platform as revenue scales and our disciplined approach to cost management. We are investing in growth via strong marketing conversion, AI product development and cloud business expansion while expanding margins.

The bottom right chart is worth a moment of attention. It shows the expected quarterly phasing of revenue growth throughout 2026 with revenue growth accelerating throughout the year as the ramp of customer additions from 2025 is feeding through into revenue over the course of the year. As new customers typically have a 6- to 12-month discount period and given that the net customer growth nearly doubled in 2025, there is an increasing contribution from these new customers. Important to keep in mind that this will result in revenue growth accelerating throughout the year, which is consistent with what we have already communicated. Let me once again point out that the initial contribution from Momentum is not part of our guidance, and it is, therefore, on top. To summarize the guidance, 8% external revenue growth, approximately EUR 530 million adjusted EBITDA, leading to 37% to 38% adjusted EBITDA margin.

Before we move to Q&A, let me close with a look beyond 2026 because I want to leave you with a clear picture of where our business is heading over the medium term. We are reaffirming our mid-term targets. We are targeting double-digit revenue growth of 10% -- above the 10% on a group level. That acceleration from where we are today reflects 2 converging forces, an acceleration of our Web Presence & Productivity business, strongly driven by AI and Cloud Solutions delivering higher than 20% of growth.

On Web Presence & Productivity specifically, we are targeting high single-digit growth. That step-up from our current growth rate is underpinned by 3 things: continued customer additions, ARPU expansion as AI-powered products drive higher value per customer, including the progressive revenue contribution from Momentum.

On Cloud Solutions, the 20% CAGR targets reflect our conviction in the structural growth of the European server and cloud market, combined with the product investments we are making today.

On profitability, we are targeting an adjusted EBITDA margin of 40% at the mid-term, a further step up from the 37% to 38% we are guiding in 2026. This is not margin expansion for its own sake. It is a natural outcome of a platform business where revenue scales faster than the cost base and where AI is increasingly doing work that previously required human effort or manual processes. On CapEx side, we are comfortable at approximately 6% of revenue.

That concludes our presentation for today. Achim and I are now happy to take your questions. Thank you.

[Operator Instructions] The first question comes from the line of George Webb from Morgan Stanley.

Achim and Patrik, I've got a few questions, please. And I guess, firstly, welcome to you from my side, Patrik. We've met in the past, and it's nice to be in a position to speak with you again as we go forward. And maybe that is my first question as well. I've kind of been curious on your impressions as you move into this IONOS seat. In particular, are there any areas or internal processes you're looking to sharpen around?

Secondly, maybe one for you, Achim, talking to those new customer acquisition additions, very strong in 2025. You mentioned expecting that momentum to continue in 2026. What's been driving that from your perspective? We can obviously look at the brand marketing spend, and it was only slightly higher than 2024 in 2025. And to what extent has your partnership with Lovable been a driver in that mix? And then just lastly, on the cloud business, the CapEx tick up for 2026 to EUR 75 million to EUR 85 million. To what extent is that number incorporating some of the memory price inflation that's happening in the market?

So I might start with the question. So first of all, thank you. It's also a pleasure to work with you in the future again together. As I came in as the CFO last December, I do see obviously a high potential business being together with an AI winner, but internal processes also became large. So what the mid-term guidance of 40% already is translating that there's huge potential also from an internal perspective to bring AI into the business. That's what I saw as well. And those are areas, obviously, me as a CFO working very hard on that. So those are the areas driving the margin expansion, but same time, reallocation of business to drive more revenue because I do believe that IONOS needs to push on revenue. And I have a certain formula, as you might know from my past that you need to drive EBITDA growth is bigger than revenue growth, but own revenue growth needs to be bigger than market growth. And this is what I, together with Achim, obviously driving from my copilot seat.

Thank you very much, and then, hand over to Achim.

Yes. Your question about customer inflow. I mean, we had a strong -- why do we grow even faster this year than last year? It's the AI Momentum on one side, more products and all the AI-driven enhancements we have in existing products. We have the brand, which is paying out more and more over the years now. Now, we started brand investment, I think, in 2023. And we always said this is a long-term endeavor and the results will not come in the first year, but now, we're not in the first year anymore, so the results are coming in. So brand is getting stronger, and brand is now really paying off in additional customer flowing in.

And then we have the random -- not random, but a lot of different improvements on over there. So daily business improving the business, you're taking down the churn rate, improving existing customer base and features and so on and so forth. So the combination of that is driving more and more customers towards us.

And then, of course, the product fit, the Momentum, like we tried to explain, is a real business fit, is really solving needs of our customers. And so that is a big driver.

And then, you asked about Lovable. We don't have a direct partnership with Lovable. We do some of their domain registrations through a different partner, though. But -- so it's not like we are building -- we're using the website builder or anything like that. We have our own product lines for this.

Is that helpful?

And maybe on the last one, on the CapEx side, the price increases in hardware, we already integrated that in our perspective of the guidance. So we are already working on mitigation on different things, and we are already considered within the guidance.

That's great. And maybe, Achim, if I could just come back on the kind of AI agent topic. Could you talk a little bit about how -- you talked about very high scores in terms of early customer feedback, are customers -- is the average SMB understanding the AI Receptionist out of the box? Or is there a certain way you're having to market it to help them understand what it's offering and how they implement it in their business?

Yes. Well, I mean, you have everything from 2, right? So -- and a lot of customers directly understand it because it's integrated well. It's very easy to set up and use, and it's taking the data from your website. You don't have to really do much for this part. If you want to have a deeper integration, we help you. We have teams in our support that really do the onboarding, help you, sit down with you, configure maybe the prompt or something to make it more specialized on your specific needs. So we have a robust wire -- we have a broad selection.

And as I said, it's a very early entry now and very successful already. And we now, of course, like we do all -- with all the other products, we keep on improving that, learning from customer responses and so forth -- and so on and so forth. But it's extremely encouraging, and it's really nice to see that we really solve a new class of -- solve to or help to solve new class of problems, which we never tackled in the past, which was not possible, kind of virtual employees. And the Receptionist is just the first one.

And so that's why we are so confident and why we are so happy to see these new technologies coming along and in combination with the web page and all the other data. So we are a hosting company that does not mean we only host domains and the web page. Many customers have a lot of additional data on their hosting platform, in applications. Many customers use PHP on the service side. You only need that if you have additional stuff, additional services, and that's coupled with data in most cases.

And so we have all -- we have a lot of information already to make these AI things work much better than any stand-alone application out there. We have the email communication and so on. So moving that all together, really, we can build employees, virtual employees, which are a fraction of the cost of a real employee. They are there 24/7. They speak all the languages. They never be sick. They can scale any time. And so this is -- that's why we're so excited about this.

The next question comes from the line of Dhruva Shah from UBS.

Nice to meet virtually, Patrik. I have 3, if that's okay. First is on capital allocation. So with leverage now close to being less than 1x, how do you think about capital allocation? What would you say is your target leverage range? And what are your priorities? Historically, the company have talked about M&A in the European WP&P space being a priority. If that's still the case, are you seeing any opportunities here? If not, would you consider shareholder returns? And within that, do you have a preference for dividends or buybacks? And any indication of potential timing there?

Second question is on WP&P. And so the customer equation looks very promising. But then, if I look at ARPUs, yes, there's a pickup quarter-on-quarter. But if I look year-on-year, ARPUs are actually declining. So can you talk through some of the impacts? We can see the FX impact, but then how much of this year-on-year decline is driven by the higher customer acquisition? Could you give us any color on the quantum of how much of a drag that is with customers coming in at lower prices? And is there anything else to consider?

And the final question I had was actually on cloud. And if you could give us any color, firstly, on the phasing of ITZBund revenues expected over 2026, but also separately. If I rewind a couple of quarters ago, yourselves and a number of peers were talking up how digital sovereignty is leading to a higher number of inquiries, but also that it was taking longer to monetize these contracts. So any update on that would be great. And maybe just anything you could give in terms of confidence of reiterating your 20% mid-term guidance? Because from memory, that was also issued at the time of the spin-off, and some could argue that now is mid-term, but obviously, cloud isn't yet growing at 20%. So any color on those 3 would be great.

Okay. Thank you very much for the question. From the capital allocation side perspective, we are considering all options. You could either grow into organic growth, so investing what we're already doing into AI in our Cloud business. Also, from an inorganic perspective, we are considering different M&A options, obviously, mainly to our core business, mainly into technology investments, and we are already scanning a huge pipeline of different options.

And from a shareholder perspective, obviously, buybacks as we already executed in 2025, we would consider also to continue this year program. We would be ready from a shareholder perspective or from a Board approval perspective to execute. And that would be -- we would prefer in order before we're paying dividends.

On an ARPU side, I mean, we see already an improvement in Q4. We had a structural topic in Q3 reported, but that came out of the strong net adds from customer side, first of all, and also from a currency adjusted -- from a currency impact. So already with the guidance of 5% over the year, we are well on track. You also see in Web Presence & Productivity. Also, from a pricing perspective, we phased in pricing in the first half year, which then also normalized during the year. So that also had an impact. But we are not seeing any critical points for further ARPU development, even the opposite. We do see with AI also an acceleration in the ARPUs. Pricing is completely different, and we do see huge potential also for the future.

For the Cloud business, as we do not guide on the ITZBund on a single contract, but we obviously -- with the small headwind we had in quarter 4 2025, we have a small, let's say, tailwind in 2026. So that continues. We are -- they are very happy with us with the performance. We will continue. Achim already talked about that. And during the year, we will face that around 10% in growth for the Cloud business.

And maybe, Achim, you could help me for the last question.

I thought the cloud was the last question.

The sovereignty. Maybe you can repeat the question again on the sovereignty part.

Yes, sure, sure. It was just around a couple of quarters ago, you were talking about digital sovereignty leading to a higher number of inquiries for cloud, but not necessarily flowing into the financials just yet because it was taking longer to monetize these contracts. So just an update there as we are 2 quarters ahead now. Are you starting to see that flow into financials? Is that leading to some confidence in both this year's guidance and long term?

Absolutely. That's the point why we now have -- when we just showed the numbers, said, okay, above 20% in growth in the public cloud and that that's exactly the result of the last quarter's onboarding these customers and building up the cloud and the sovereignty discussions we had all over the place. So that's why we are 100% confident to be well above -- actually, well above 20% in growth in the public cloud.

May work for M&A as well because you asked, we always mentioned that there are some European players coming to market. We believe that. All the signals we hear is that there is a bunch of opportunities coming along more or less this year. Of course, we cannot force them to sell, but we are looking into it as soon as it gets more tangible. But from everything we hear, there's opportunities like we said.

And then, from timing, it's perfect. Leverage is very low, and targets are coming up, which are noteworthy from a sizing perspective. We don't want to -- like we always said, we don't want to buy a small webhosting company with legacy technology, 50,000 customers or something. So the integration effort would be too high. Although with AI, it's getting more manageable, but still we're looking for larger targets.

And the ARPU, maybe one last sentence. If you look at the web page, the AI-based products, the Receptionist has a very different price point and does not have 12 months free. In the Webhosting industry, it was becoming common that you had a 6 to 12 months very low price points, but this is not happening in the AI space. And so we see there's maybe 1 or maybe 2 months of a reduced price or onboarding phase or something, but not the 12 months we are used to from webhosting and domains and everything. And so -- and the price points are much higher, as you can really see it on the web page. So you can expect the ARPU growing stronger since that customer base is increasing, more and more new customers, like we showed also 50% already taking some form of AI. And with the whole momentum coming along, that share will increase.

The next question comes from the line of Sarah Roberts from Barclays.

Three from me, if that's okay. So firstly, just on the entry partnership. I think before you mentioned that customers are coming in with a domain via entry that you own, but you spoke before about opportunities to cross and upsell these customers coming in, which could be accretive over time. Just wanted to see -- I appreciate it's early days, but of those customers that are coming in through that partnership, are you seeing any opportunity to upsell other IONOS products?

Secondly, just a clarification point on the cloud mid-term growth. You've obviously reiterated the mid-term target of 20%. You printed mid-single digits in '25. You're guiding to 10% in '26. I understand your comments on your expectations for data sovereignty and the market. But how much visibility do you have beyond this year into the cloud pipeline that gives you that confidence? And can you confirm how you're defining mid-term, please? Because that obviously implies a significant acceleration beyond FY '26 in cloud.

And then finally, on AdTech, sorry, do you have any update on how those sale conversations are going? When do you expect to announce potentially selling that business? And if you could give us any color around how AdTech performed in '25 on both revenue and EBITDA, that would be really helpful?

Maybe I'll start. Entry, yes, of course, these are our customers first. This is just a partner directing traffic to us and customers, and we do upsell and cross-sell. And it really depends on the partner. The entry has partners doing all kinds of businesses. And we are using these customers to upsell to products, which they -- these partners don't have, and we're using this actively. So part of our customer growth is coming -- or ARPU growth is coming from these new customers plus then the other cross-sell. So this is happening. That's just normal business for us right now. So there's no -- nothing special on it.

And for the cloud confidence, yes, we are absolutely confident because, firstly, the digitalization discussion will not -- sorry, the sovereignty discussion will not go away anytime soon. I think we all agree in Europe, this will get more and more and stronger and stronger over the years now. With all happening in geopolitics, there's no sign whatsoever that this discussion or this demand will decrease anytime soon. So the product is there, expanding the product lines, adding features, new data centers or expanding the data centers we have of co-locations with the demand getting GPU service, all these kind of things, which are on demand into the cloud. And we see customer base is strong and growing by itself, more data coming in. So all the customers basically grow in itself in themselves and new customer pipeline is nice, and we get lots of opportunity in. So I'm absolutely confident that 20-plus percent is going to keep -- is going to stay, and I predict even to accelerate this over time.

And then, maybe you want to add for the third one.

Yes. For the AdTech business, I can confirm that we are in deep discussions with potential buyers of the business. And you might expect in Q2 a message from us on that one that we are going to inform you about that one.

Second, you asked for the performance in 2025. As already indicated, there was an EBITDA contribution of EUR 31 million over the year. Obviously, there was a change in business model in Q3. This is exactly why we announced IFRS 5 and put it on to discontinued operations. And obviously, this from a performance revenue, we contributed EUR 25 million in Q4. And this is the actual situation we are, and this is the overall performance. And we were going to inform you then in Q2, most probably.

The next question comes from the line of Ines Mao from BNP Paribas.

Congrats for the strong print. I just have 3 questions actually. So the first one is about AI monetization. Can you elaborate on how the new agents will be priced and packaged notably for existing customers? Shall we expect a usage-based model or kind of a hybrid model, particularly for agents that might have to run continuously?

The second question is about Sovereign Cloud. So it kind of makes sense that there's an uptick in inquiries, but it's potentially going to impact private cloud, hence, the demand for dedicated service. So from a CapEx and infrastructure level, wouldn't IONOS have to increase CapEx for this dedicated service?

And my last question is only from a product perspective. One of your slides cites n8n, so a partnership for -- in the cloud business. Can you talk us more about what it entails exactly?

Okay. I'm not sure if I understood everything correctly because we had a little -- what do you say, sound quality wasn't so good. So I think the first question was about AI pricing. And well, I think that's just look at the web page we have right now, but we're doing a lot of A/B testing. So if you hit the web page 5 times, you might get 3 different offers. And that's our normal business. We're trying to -- or we're finding out what's the elasticity on the market, what price points are people willing to pay. The whole product improves and so on.

So this is our daily business optimizing price points, price versus sales and so on. But what's pretty clear is it's way more expensive in the end. The ARPU is much higher than on a web page because web page is essential for company. But the prices are -- it's not like super -- how do I say, it's just a commodity -- not a commodity these days, but everybody can have a web page very easily somewhere. And the AI is very different because that's very -- much more technology and especially it has a much higher value for the customer, perceived at least in sense of I can save 10 hours.

You cannot go without the web page because that will -- if you have a shop or whatever, that will completely ruin your revenue. But for perception from customers is I can save 10 hours, how much do I pay for 10 hours usually? And if that AI costs only EUR 29, this is such a bargain so that the price elasticity is so much higher. And now, it's our job like always to find out what's the sweet spot between take-up rates and price points. So it's a constant optimization now, and the products get better and better, so we can charge more. So this will be -- there will be no fixed price for now. This is in flux right now to understand market and demand and curves and stuff.

And about the second question, you had the CapEx and dedicated service. I'm not quite sure what that -- what exact question was?

Yes. I was just wondering how does Sovereign Cloud translate from an infrastructure perspective? Because to me, it means dedicated servers. So naturally, IONOS would have to increase CapEx to this. Or can you expand more on what does that entail from an infra perspective?

Yes. The sovereign cloud, I mean, is really -- the dedicated service is one product offering. We call it BMC in the meantime, it's Bare Metal Cloud, the old stuff. It's the dedicated, which is really a bare metal -- it's really a server without more or less nothing. And then, we have the BMC line of products, which is Bare Metal Cloud. So you have features in sense of software-defined networking, but still it's bare metal, and then, everything else is cloud.

So if you talk about sovereignty, most customers are these days tending rather to a full cloud setup because there's many, many more features than just a bare metal, and you don't have to administer it yourself. Cloud is everything taken care for you. The Infrastructure as a Service layer, we manage everything, the platform layers and so on. And you have unlimited scalability and pay by the minute.

So people are -- if they talk about sovereign workloads moving into the cloud, they usually take a -- the real IONOS cloud -- public cloud offering. Dedicated has some special purposes. If you have the highest performance, you need to go down to the operating system level, do some stuff here. It has a purpose, and it has some demand. But if you talk about the sovereignty, it's rather the Cloud business.

And if I might, Achim, from a CapEx perspective, we are feeling confident with the 6% of revenues for the future, also sustainable moving forward, what Achim said.

Exactly. So we -- in our CapEx budget, it's all included. This -- and we have -- there's a big discussion of the big price increase in hardware these days. We source a lot of them and have contracts in place for much of the year for a set price.

Then n8n, this is a service, it's actually open source for private use, not so much for commercial use. So we have a partnership with them. n8n is a product where you can build workflows with AI-based steps in between. So you can really automate a lot of things very easily, and that's just one of the products we have.

The next question comes from the line of Steph Beyazian from ODDO BHF.

My first question is regarding the guidance and the mid-term guidance. I was just wondering if you could remind me the starting base of that guidance, if that's still the same mid-term or when is the mid-term and what is the starting base? I mean, I guess what I'm trying to understand is to what extent AI is really incremental since you are reaffirming the guidance. But now, you're expecting 80% of revenue growth by 2028 to be coming from AI. So I'm just trying to separate what is new and incremental versus what you were planning before the launch of AI agents. That would be my first question.

So as Achim indicated on one of his first slides, the value add of new generated revenues via AI is increasingly tremendously in the next years. So you're asking for the guidance of this year, and I talked about in my last slide about the mid-term guidance. I would say the discrepancy is not as high as I would not propose it already coming in from the year of 2027. We are not yet here for giving a guidance of 2027, but we feel, obviously, there's not a big difference. I mean, we accelerated year-on-year in our core segment, which is Web Presence & Productivity. We are doing on the right track in the Cloud business. We're having the AI. We're having the ARPU increases, et cetera, et cetera. So that's my opinion on this one.

And you get a feeling of -- Patrik showed a slide where he said he's driving to 10% growth. The difference between where we are today and the 10% is probably mostly AI driven.

Yes.

And so the starting year for that mid-term guidance, can you remind me which year is the starting base?

For the current guidance?

I need to because I wasn't there, but it was obviously given in 2024.

Yes, must be 2024, sorry, yes.

Yes. Does that help?

Yes. Yes, I think it does. And I've got an additional question, which is regarding promotions. I mean, I could notice also that there are quite some promotions to take customers at EUR 1 and to try, I guess, to push volume. Wouldn't you be expecting that to have a little bit of a dilutive impact into 2026 on ARPUs?

Well, that's -- first of all, this EUR 1, that's the industry standards for, I'd say, 15 years now. You have these campaign pricings, which are very, very much discounted. And then, that's going forward. And that's what Patrik tried to explain a little bit. The more customers we make, the more dilutive it is in the first year for the overall ARPU because these customers weight more, coming in more and more of these customers weighing more in the average with a very low price point for the first year. So this is one of the factors.

But then, the second year, these customers or these cohorts are pricing -- are priced fully normal pricing and will increase the ARPU again. So we have always a little -- the first -- basically, every time we grow more than in the previous year, we have that little impact on the ARPU one time.

And that said, the 2025 cohort is translating into revenue in 2026. And that was the most successful year in net adds in customer, and this is why we are confident scaling the revenues throughout the years, wider quarters.

The next question comes from the line of Nizla Naizer from Deutsche Bank.

Great. I hope you can hear me. I have 3 remaining questions as well. The first one, could you remind us, Achim and Patrik, the exposure IONOS has to energy costs? And what would the impact be if prices go up? And have you accounted for that in the guidance that you've given us for 2026?

And second, thank you for the color on the AI virtual assistance. My question is the companies that you're working with that are using them now, have you seen them churn off? Or are they very happy with the product so they keep using it? Just trying to get an understanding as to how valuable it is real-time to these customers that you're already working with. Some color on the churn dynamics would be great. And my last question, the 7% to 8% Web Presence & Productivity growth for 2026. If you could split that between customer growth versus ARPU growth to give us some color on how to think of those 2 dynamics for next year, that would be great.

Yes. As I might start with the energy costs, the 2026 -- the good news is 2026 prices for energy are almost locked in. So we have a minimal impact on 2026 guidance.

You would add doing the last one.

The phone assistant or the AI agent part of the momentum, the first -- the batch of customers we have, there's basically not much churn so far because, first, it's pretty new, and we said 80% are activating the product already. I mean, there's a very high activation rate in the first weeks already. And what the conclusion is, once you have a product and it's activated and it's working well for you, you don't churn. So we don't really have reliable churn numbers specifically for these products yet. It's just too early. We can -- next quarter, we can probably see or have more reliable data than today because basically, today it's no churn.

And then the last one for Web Presence & Productivity, where does the mixture of revenue comes from? We keep on going with the story of 1/3 is coming from net customer adds, 1/3 is coming from cross and upselling and 1/3 is coming from pricing. This is exactly the same story for 2026. As a reminder as well, that was a question as well, churn remains very clear best industry standard. So we're returning or we are having around the 1% per month, and that is also from that perspective very healthy.

The next question is from George Webb from Morgan Stanley.

I just had 1 small follow-up to the extent you can comment. Just with regard to the EUR 800 million or so of debt that comes up to maturity in December, do you have any kind of early thoughts on how you'll go about refinancing that on a strategy or structuring or maybe even the rate versus the fixed 4.7% you're on today?

Yes, of course, we have early thoughts, but we can't communicate yet, but we will do that in time, most probably to mid- to half-year. And you're absolutely right, that needs to be -- there needs to be a message because it ends in December, but not yet.

[Operator Instructions] We have a follow-up question from Dhruva Shah from UBS.

Just a technical follow-up on the reported to adjusted EBITDA bridge. This -- in '25, I think you saw another EUR 17 million of costs related to the establishment of IONOS as an independent group. But obviously, we're now 3 years on from being part of the group. So just -- yes, I wanted to get an update in terms of what that should look like going forward? Should it drop out relatively soon?

Therefore, I think will be significantly lower in 2027. But for -- I'm honest here, I need to give -- jump into that detail. I can afterwards inform you about that.

We have a follow-up from Steph Beyazian from ODDO BHF.

Yes. I've got 2 actually around AI agents, if that's possible. The first one is how many AI agents do you expect to have? Obviously, it will change over time. But right now, how many do you think you will have? And which ones are the most exciting to you, if you can release some color about that?

And my second question is just regarding the margin. Can you just come back on the economics? And what sort of margins are you expecting on those products? I can see that you're more or less billing a call at around EUR 1. And I was just wondering what is the cost attached to that?

So about the product roadmap, out of my head, how many agents do we going -- are we going to have? I mean, of course, it depends on the time scale we're looking at. If you think about this year, we have a bunch of different product lines and agents specified. Out of my head, I'd say probably in the -- agents has a big definition as well. It could be some small helping agent in some of the product lines all the way to a full-blown like the Receptionist, which does a lot of things and has a lot of additional features on it. And I'd say maybe 10 on a rough calculation or rough out of my head across all the product lines in this definition, being like real stand-alone agents.

And like we said, the momentum is an ecosystem in the end. You have the base with all the knowledges in there and the knowledge agents. Is that the separate agents or not? So it's a bit hard to do the definition here. But in the end, from the product lines, we had dozens of products over the next 2 to 3 -- 1 to 2 years, we'll add dozens of different features and products, if you want to call them agents or not. Yes.

And from a margin perspective, we obviously have a great contribution coming via increased ARPU and increased top line. There is no specifics on the bottom line on the cost structure. It depends, obviously, if we are working also with partners or having our own IP and own development. But from a general mixture, there is a nice contribution from that perspective as well.

And one of the advantages we have is it's all -- many of these agents or AI models are hosted in our own environment. So we have -- in the cloud, we have Model Hub, we have these GPU cards and everything. So the cost for us is much lower than for someone who has to buy it at Amazon. So for us, I think we have the highest margin possibilities out there.

And if I come back to the first question, could you tell us 1 or 2 agents that you also think will have a big -- could have a big market potential such as the Receptionist?

Yes. Please understand, I don't want to read too much into it because our competitors are listening to this call as well, I assume. Yes. So I don't want to tip them off in what is going to be the next one. But on the slides, we said a few things like, for example, the CRM is the natural extension. And CRM is not just a CRM on the web, it's also agent-based, of course. Agents are doing the work on the CRM in the end. And these are things which we believe has very strong demand because we noticed already from the customers we have, it's one of their most requested features is now we need the next agent back there. We need the CRM, which is human readable one thing, but AI readable on the other thing. So the AI starts doing much more on a customer base, starting interactions and marketing and all these things, callbacks, whatsoever. So these are -- that would be one, which is really soon. The other ones I would try not to be too explicit right now to not tip off our competitors. If that's okay for you, maybe we can do it in a close call.

That's fair enough. In a close call, any time, obviously.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Stephan Gramkow for any closing remarks.

Yes. Thank you, operator, for moderating the call today, and thank you all for joining today's call. Please feel free to reach out for any follow-up questions. Have a great day. Stay safe, and goodbye.

Thank you very much, everybody.

Thank you very much.

Ladies and gentlemen, welcome to today's Conference Call of IONOS' 9-Month 2025 Results. I'm Sarah, your operator for today. [Operator Instructions] The conference is being recorded. [Operator Instructions] We are looking forward to the presentation.

And with this, I hand over to Stephan Gramkow from Investor Relations.

Good morning, everyone, and welcome to the IONOS Analyst and Investor Call for Q3 2025. Thank you for taking the time to join us today. My name is Stephan Gramkow, and I'm responsible for Investor Relations at IONOS.

Here's what we will cover today. As we today have some exciting product news to share, I'm very happy that our Chief Product Officer, Andreas Nauerz, will provide you with a product update. Next, Britta Schmidt, CFO of IONOS, will walk you through the 9 months and Q3 financials. She will also cover our outlook. Britta and Andreas will then be happy to answer any open questions after the presentation.

I would now like to hand over to Andreas. The floor is yours.

Yes. Thank you very much, Stephan, and good morning, ladies and gentlemen, and a very warm welcome to our conference call today. I'm Andreas Nauerz, CPO of IONOS.

Let's talk about AI, the topic of the time. And I think it's an undeniable fact that AI is the most powerful force of our time, and we are probably in the middle of a massive transformation. The main reason for this is that today 2 key ingredients have come together, right, maybe for the first time in IT history. First, we have access to more data than ever before, and that's, of course, the foundation of every AI model. And the second, we have access to more compute power than ever before, the foundation of which this data is being processed. And both are accelerating the pace of innovation and the impact of AI.

Especially with generative AI, we now see AI systems that do not only understand content but can even generate it themselves and, in the quality, often indistinguishable from human created output which is fascinating. Hence, we meanwhile even see AI systems performing tasks just as well or even better than humans. For example, when summarizing complex texts or when doing image recognition. At the same time, we are currently also witnessing a massive democratization of this technology. That means the underlying technical complexity is being abstracted away, making it accessible to a much broader audience, which in turn accelerates adoption.

In the past, you needed AI experts, millions of training data points and a massive compute power. Today, to put it very simple, all you need is a base model and some frameworks. But still, when looking at our customers, the following holds true. Especially our SMB customers do not want to deal with the technology itself, even though the access has become easier. They don't want to set up their own development pipelines. What they want to do is they want to book and at most customize ready-to-use solutions that provide immediate value by solving their concrete business problems. That's what they are interested in. And even our larger customers want access to the right sovereign and secure infrastructure and a comprehensive tooling system to develop their own solutions in the most efficient way. And in both areas, this is exactly where we come into play, something we will take a look -- closer look later.

So just to recap, the benefit of AI mainly relates to automating manual and repetitive tasks and a better user experience when interacting with AI systems in general as these become now controllable through natural language. So given all these opportunities, the challenge lies in scaling AI in the way that it truly creates value, right? That's why we do business here. And of course, implementation must remain, at the same time, secure, sovereign and free of dependencies, and this is something where we, as IONOS, can play our strengths again.

And because, as mentioned, access to AI itself has been democratized, it is now all about who can translate it into real value fastest, right? So the winners of tomorrow won't be those with the largest models, but those who operationalize AI the fastest. So the -- in other words, the hurdle, or the real hurdle, is no longer technical, it's organizational and cultural. So what will separate winners from losers is courage.

Courage to take responsibility, courage to do things differently and courage especially by leadership, to truly embed AI deeply into the DNA of the company. But right now, most small- and medium-sized business are not using AI efficiently, or in other words, to its full extent. So even though the development in the field of AI has been impressive, right, we are by far not at the end of this journey, right? And we can expect further significant improvements in the years ahead.

So let's dive a little bit deeper. Looking at the model landscape, for example, we see more and more powerful models with better reasoning capabilities, with longer context windows, so these models can remember things for a longer time. We see the focus on multimodality continuing, so models can understand and generate not only text, but also images, audio and video simultaneously. We see a move from -- and that's surprising if you compare to the past, but we see a move from proprietary models towards also open-source models, like, for example, Llama, Mistral and others. And these models are being hosted on our AI Model Hub already, right? So this is once again where we can provide value.

And we see entirely new architectures beyond these famous transformer-based ones being smaller and more energy efficient so they can run even on small resource limited devices. Just as an example, such a model is, for example, NXAI's xLSTM model which we have recently made available via our AI Model Hub, which is probably one of the strongest leading time series models currently available on planet Earth. Furthermore, there is a clear trend towards -- and that's very impressive, hyper personalized systems that are really capable of understanding individual uses and a specific context in which they operate. As a result, future system responses will be tailored based on accumulated interactions leading to a differentiated output for each user, meaning you may get a different answer than I get, right, because the system has learned about you and about me.

Building on this foundation, AI companions and copilots are evolving beyond traditional tools. They are more than tools. They are becoming real digital colleagues, right, that support you. So there's also massive potential from agentic AI. So when I look at the innovations of, let's say, recent years, this is actually one of the greatest revenue potentials and a real game changer to our entire product portfolio. And I'm not exaggerating, agent-based AI is introducing autonomous, adaptive, what I usually call mini AIs that operate, automatized, collaborative and proactive, providing real value to our SMBs.

And last but not least, the Model Context Protocol, which you may have already heard of, establish a standardized framework for communication among these agents, ensuring that diverse AI systems can exchange information efficiently and collaborative seamlessly. So it's like the language AI tools are using to talk to each other to jointly solve even more complex problems. With this rapid progress comes something else, responsibility. So sovereignty, security and trust are key in a more and more AI-driven world. Customers need control over data. It's their IP. They need control over models. They need control over the infrastructure, making sure there's no information outflow. And all of that without vendor lock-in.

You also need transparency and traceability and something we as IONOS can clearly help us looking at our sovereign technology stack. Well, as simple as this may sound, all of it represents a particularly difficult challenge for our SMBs because the world of AI and the working environment of SMBs are changing rapidly, right? And both the market and the products are extremely fragmented, and this won't get better soon, right, because there's so much development going on.

So the obvious question after this intro on the state of the AI union is, what exactly can we offer in this context? And I personally think, and my team thinks as well, we, as IONOS, are perfectly positioned to guide our SMBs on their journey through this complex and rapidly changing world of AI. We help them to master their AI transformation, making it easy to get started, reducing operational effort and driving targeted growth with AI, so making them benefit from this potential.

In short, we offer 3 building blocks to make that happen. First, a robust, scalable and secure infrastructure that ensures full control and independence from hyperscalers. Don't get locked in. A comprehensive AI development tool suite for every skill level, from no-code and low-code to full code, enabling you as a customer to develop AI solutions tailored exactly to your needs. And last but not least, rapidly deployable customizable AI services that allow you to get started immediately. We will have a closer look at all of this later.

But to be a little bit more concrete, we have and are continuing in all these fields, significantly our AI stack in expanding it. So with respect to the already mentioned AI Model Hub, we are adding more and more models to build upon like the NXAI model I mentioned before. With our AI Model Studio, we enable customers to fine-tune their own specialized models so that these models are then precisely tailored to their use case to benefit in the most possible way. And the good part of this is, this is a service where you don't even need high programming skills. So we abstract all complexity away, even in this field. And on the hardware side of things, we will offer dedicated, isolated resources optimized for deep learning and generative AI with the introduction of our IONOS Cloud GPUs.

So when we look at our product portfolio, AI, of course, is already an integral part of all our products, whether as a feature in onboarding or administration or as a stand-alone product. And in this period, we are currently expanding many products in our portfolio with AI capabilities. It's just one simple example. The way we interact with website editors is significantly changing. It is no longer about just doing classical drag and drop, right, to model your website. It's more like the system now understanding natural language. So this means you simply describe what you want to create, and the AI helps bringing your website to life. And this is not just the case in the area of Web Presence & Productivity. We also added, as already mentioned, some interesting LLM, so large language models, to our AI Model Hub, and we have also added a new already mentioned fine-tuning service to our cloud stack. So a lot of new introductions.

But now we are taking another major step forward. Today, and I'm very, very happy to be able to do this now, we introduce IONOS Momentum, which is the new AI ecosystem. And even so access to AI is being democratized, as I've described, the market is fragmented. And from our customers' point of view or at least many of them, there are too many tools and even more and more coming to market, there's too much complexity. And our SMBs, they lack the resources and the time and the integration know-how. So true productivity is locked behind silos, right? And they need guidance.

And IONOS Momentum creates a new category, a unified, sovereign AI ecosystem designed exactly for these customers, for small and medium businesses. And our promise is to provide AI products made simple, secure and scalable, built for everyday business and not for tech giants, right? So now, I'm pleased to share a brief preview of IONOS Momentum with you through a video that we have prepared. Enjoy watching.

[Presentation]

I love this video. So IONOS Momentum is, of course, more than just another tech stack, right? It is a full stack ecosystem for SMBs to drive digital operations end-to-end. And our AI environment bundles existing offerings with a wide range of new services and will be continuously expanded in the coming weeks and months. So what you see today is definitely not the end, it's the beginning.

So the individual components of IONOS Momentum are Momentum Cloud, Momentum Studio and Momentum Team, and they are built logically one and another. We are creating an understandable, intuitive world of AI that enables users, from small businesses to IT experts, to easily leverage solutions without constantly having to familiarize themselves with new AI tools or even orchestrate them in a complex way, which is not their core business, right?

So IONOS Momentum leverages Momentum Cloud, especially the already mentioned IONOS sovereign European cloud infrastructure, which meets the highest standards when it comes to GDPR compliance and guarantees maximum security and control over company data, your holy grail, right? Building on the Momentum Cloud is the Momentum Studio, which offers a wide range of AI models. And this includes the already mentioned AI Model Hub that we launched last year as well as the new fine-tuning service, the AI Model Studio, which I even mentioned earlier during this call.

With Momentum Team, users will soon have access to a suite of intelligent AI agents designed for seamless automation of everyday business processes, especially the tedious ones. From customer service and marketing to appointment scheduling and e-mail management, these digital agents act as virtual employees, creating new freedom, increasing efficiency and allowing companies to focus on what really matters to them, strategic priorities.

As said before, one of the most exciting developments in AI is the rise of intelligent virtual agents, which we believe will fundamentally transform how SMBs operate. So Momentum Team is a modular, interoperable ecosystem forming what I call a digital workforce. And this workforce of AI agents is able to proactively anticipate customer needs, automate repetitive tasks and deliver personalized real-time support, enabling our SMB customers to improve efficiency, to improve satisfaction to their customers and to increase productivity and competitiveness, right? Momentum Team will include a broad range of specialized agents for relevant use cases which are just ready to use.

All agents will be connected to what we call the knowledge hub, a centralized repository to store, if you permit, all business relevant information. The agents will be deeply integrated, of course, into the IONOS product ecosystem to be able to interact and orchestrate different workflows and leverage the data being stored there. But we will also provide a seamless integration to a range of relevant external tools. So agents bring a number of fundamental advantages to the table, especially when compared to us as human beings, right? They are always available, they are never sick, they never forget, and they can work 24 hours a day, 7 days a week, and they can speak any language. And they can work across multiple channels like instant messaging, phone, mail and so forth simultaneously. And this makes them ideal for automating repetitive, time-consuming and low-level tasks across a business, freeing up valuable time for business owners to really look at strategic topics.

And in this context, IONOS is uniquely positioned. We serve a large and loyal SMB customer base, have decades of experience building digital solutions, offer excellent personal support and have the technical platform and development capacity to integrate AI deeply into real business workflows so they can turn into real value. In the 6 months webcast in August, we promised to launch the first AI agents until the end of the year in beta. And today, I'm very, very proud that we have achieved our goal earlier than expected and just launched the AI phone receptionist in Germany.

What is this about? So the AI phone receptionist is a virtual employee, part of the already mentioned digital workforce that answers and manages business calls automatically in natural human-like speech. It handles customer communication and organizational processes, optimizes key administrative tasks while using the website and knowledge from the company brain that I mentioned before to respond accurately, consistently and on-brand.

The receptionist comes with different natural voices in more than 20 languages, and it can schedule appointments, record leads, open support tickets, take orders or log messages and it connects with calendars, booking tools, CRMs and support systems or is even able to forward calls. The AI receptionist is the first AI employee in our Momentum Team. Over the coming weeks, we will continuously add a range of AI agents and new features and integrations to a wide range of platforms and applications. While we still start Momentum Team in Germany, we will soon start to roll it out to other markets as well.

The next important step will be the extended tool integration which will allow AI agents to connect seamlessly with both the internal ecosystem and essential third-party applications. And this capability enables them to perform concrete actions and embed themselves into daily business workflows, which is crucial for delivering maximum value. The advanced knowledge hub will be supplemented with additional customer information, if you permit, from your products and business systems. In addition, it will be possible to add knowledge generated or made explicit in conversations.

Agents will continuously improve their capabilities by mastering new skills via tool integration and the knowledge hub itself. So concurrently, this ongoing interaction and feedback loop is essential for the agent to deeply learn and adapt to the customer-specific needs and implicit preferences. There will also be agentic-specific apps such as the social media agents, event calendar and much more, and this will make collaboration with the Momentum Team more intuitive and even easier. With the agent and teamwork mode, agents will collaborate together on a common plan and even hand over tasks to achieve complex goals. For example, the social media agent could write a social media post about a new offer that the business development agent created for a specific product before, right? So they work hand-in-hand.

In the first half 2026, we will include improved agent proactivity. So proactive AI agents move beyond being purely reactive by taking initiative. They can unpromptedly response or propose ideas, ask clarifying questions and identify insights or knowledge gaps. This capability adds a layer of perceived intelligence, shifting the agent from a, well, let's say, simple tool to a more strategic assistant. And while we will start with a free plan to allow for easy testing for most of the agents, we will also introduce paid plans with the additional features in a couple of weeks. And well, while traditional website products generate EUR 10 to EUR 20 in ARPU, virtual assistants are expected to start in the EUR 20 to EUR 50 range per agent. And over time, the use of multiple task-specific agents per customer opens up entirely new revenue layers for us.

Today, SMBs typically buy only one website, but they can deploy, of course, several AI agents across their business in the future and this significantly expands the addressable revenue per customer. Furthermore, AI is becoming increasingly integrated deeply into our product interfaces. So while generative AI has primarily supported the initial creation of text and content and ideas, we are now seeing the rise of interactive dialogue-based communication with AI, right, and this allows users to directly implement changes and improve results similar to the experience you may already know from what is being referred to as vibe coding tools, right?

So with our enhanced WordPress AI assistant, just to give you an example, we combine now the best of both worlds. On one hand, the AI assistant enables direct interaction with immediate results and all changes can be made directly from the chat, right, ranging from price adjustments in the shop or text and layout modifications to the installation of full WordPress plug-ins.

So on the other hand, we are using native WordPress process elements as well. We will shortly add vibe coding like experience to our website site builder as well, allowing customers to easily customize everything by natural language only, right? So we relieve them from the old-fashioned way of doing this drag and drop. So we are combining the best of 2 worlds. On the one hand, WordPress continues to serve as the technical foundation for these products, offering the advantage of full access to the WordPress ecosystem and in particular the robust security standards of WordPress, fully supportable due to established standards.

On the other hand, we provide a very simple and easy to maintain vibe coding like chat interface to build websites and allow seamless publishing. In addition, essential products like domain and e-mail are already included. I hope you found this an exciting first glimpse into what we are doing from a product point of view. But at this point, I would like to hand over to my wonderful colleague, our CFO, Britta Schmidt, to talk about our financials before we then start our Q&A session.

Britta, the floor is yours.

Thanks very much, Andreas. As Andreas pointed out, our mission at IONOS is unchanged. We empower small- and medium-sized businesses to succeed in the digital area and this more than ever. With the latest developments in AI, this is really important. We strongly believe that every business, regardless of size, should have access to the same technologies and expertise as large enterprises. With the launch of IONOS Momentum and the new products set to enter the market in the coming weeks and months, we are not only intensifying our efforts but also positioning ourselves to benefit even more strongly from this growing market.

As you might have seen in our Q3 reporting, we have decided to put our AdTech business up for sale in order to fully focus on the core business areas of Web Presence & Productivity and Cloud Solutions. The AdTech business has, over the last couple of months and years, increasingly shifted from a secondary market centered around monetization and trading of domains towards a platform for traffic monetization, thereby moving further away from our core business to a more or less pure digital advertising business. The transition has already been reflected in the name of the segment when we changed it from aftermarket to AdTech.

This shift opens up numerous opportunities for AdTech, which will need to be pursued with dedicated focus and expertise. Given the huge opportunities we are seeing in our core business, as pointed out by Andreas and the launch of Momentum, we want to fully focus on this business. As a consequence, AdTech according to IFRS 5 has to be reported as discontinued operations and will not be reported in our revenue and EBITDA numbers going forward.

In the first 9 months of '25, we delivered a solid performance. Revenue amounted to EUR 980.2 million, representing an increase of 6.2% year-over-year. Excluding FX effect, revenue would have increased by 6.5% year-over-year. Total revenue growth is slightly distorted given lower revenue from hosting services provided to United Internet in Q3 2025. Revenue with external customers grew by 6.9% on FX-adjusted basis. Adjusted EBITDA rose by 20.8% to EUR 368.4 million, resulting in a 37.6% adjusted EBITDA margin compared to 33% in the first 9 months of '24, again underlying the strong operational leverage of our business model. This development underscores the continued operational strength of this business model. Marketing expenses in the first 9 months were slightly higher than last year due to the expansion of the business. Adjusted for higher marketing expenses, adjusted EBITDA would have been EUR 380 million. Overall, the results for the first 9 months reflect the stable business development and the disciplined cost management.

Looking at the third quarter, revenues have increased 4.6% to EUR 324.2 million. Excluding FX, revenues increased by 5.8%. Adjusted EBITDA rose by 20.6% (sic) [ 20.9% ] to EUR 131.5 million. The adjusted EBITDA margin increased by more than 5 percentage points to 40.6% compared to the previous year. As mentioned before, the revenue growth was impacted by lower revenue from hosting services provided to United Internet, mainly due to lower energy expenses which are passed on. Revenue to external customers on an FX-adjusted basis grew by 6.2% year-on-year. Marketing investments were marginally lower compared to Q3 last year. Adjusted for those expenses, EBITDA would have been slightly lower accordingly.

Let's have a look at the performance of the different business areas in the third quarter. In Web Presence & Productivity, revenue reached EUR 267.9 million, representing a growth of 4.8% or 5.9% at constant currency. In Cloud Solutions, revenue in Q3 amounted to EUR 45.7 million, up from EUR 43 million the previous year. This corresponds to a growth of 6.5% or 7.9% excluding foreign exchange effects. The development was influenced by price reduction for selected products aimed to accelerating the migration to a digital sovereign cloud.

We successfully added 60,000 net new customers in the third quarter, bringing our total net additions in the first 9 months to 210,000. This represents a significant improvement compared to the 110,000 net additions in the first 9 months last year, underscoring the strong alignment between our product offerings and customer needs. As in previous years, customer growth in the third quarter and generally during the summer and autumn months was lower due to seasonal effects. The first and fourth quarter remain our strongest periods for customer acquisition.

ARPU in the third quarter was EUR 16.10, which is slightly lower than the previous quarter. This is, as previously discussed, partially a seasonal effect as a significant number of the main renewals typically occur in the first half of the year, requiring revenue recognition for 12 months upon renewal. We are also observing changes in our product mix driven in part by targeted price reductions in selected areas and given that we are seeing good inflow in smaller cloud customers which is also diluting ARPU and which we will develop further. Not to forget, we are adding a lot of new customers which come in with starting discounts.

Let me provide you an update on our cloud business for the third quarter of '25. Cloud Solutions revenue reached, as mentioned before, EUR 45.7 million in Q3, representing a 6.5% increase compared to the EUR 43 million in the prior year quarter. Looking at individual product areas, public cloud grew by 18% to EUR 13 million. Private cloud revenue was stable at EUR 25 million, reflecting a 2% increase, while managed cloud revenue rose by 5% to EUR 7 million.

As a reminder, the majority of revenue from ITZBund is recognized progressively, aligned with the deployment of hardware blocks in the data centers. We have finished setup and commissioning of our cloud in the ITZ owned data centers followed by an intensive test phase for the first hardware blocks. After the technical signoff was granted by ITZ last quarter, we are implementing the project with strength and expect the next hardware blocks to be built in the fourth quarter.

We continue, as mentioned before, to see very strong inflow from smaller and SMB customers. While these customers typically generate lower initial ARPU and require additional support, our ability to address their specific needs distinguishes us from hyperscalers. Our strategic focus continues to be on converting this high demand into sustainable growth, supporting our long-term objectives in the cloud segment.

Turning to capital expenditures. Total CapEx for the first 9 months of '25 amounted to EUR 40.5 million, representing 4.1% of total revenue. This is a notable decrease compared to EUR 56.3 million or 6.1% of total revenue in the prior year period. CapEx as a percentage of revenue no longer includes AdTech revenues. Therefore, the value slightly increased as AdTech had nearly no CapEx. The previous year's figures have also been adjusted accordingly. Growth CapEx accounted for EUR 32.9 million or 3.4% of total revenue, primarily driven by continued investments in the expansion of our Cloud Solutions capabilities.

Maintenance CapEx remained low and predictable at EUR 7.6 million or 0.8% of total revenue. The reduction in CapEx over time reflects both disciplined investment and the positive effect of higher revenues. We are slightly updating our guidance for full year '25 CapEx from EUR 80 million to EUR 60 million to EUR 70 million or approximately 5% of expected revenue. This approach ensures we continue to support innovation, growth and operational scalability while maintaining a well-invested asset base.

Let me now walk you through the free cash flow development for the first 9 months of 2025. Starting with adjusted EBITDA of EUR 386 million (sic) [ EUR 368 million ], we deduct EUR 15 million in adjustments mainly related to stand-alone and LTI cost. A particular feature in the new reporting period is a treatment of AdTech, which is now classified as asset held for sale in accordance with IFRS standards. As a result, the EBITDA contribution of EUR 32 million from AdTech is shown separately.

After deducting CapEx of EUR 41 million and tax payments of EUR 51 million and including EUR 5 million from LTI or share appreciation rights which is noncash as well as a payout of EUR 16 million related to LTI obligations. We further account for working capital outflow of EUR 28 million which is due to the cutoff date. We generally expect a balanced working capital. This results in a free cash flow before leasing of EUR 245 million (sic) [ EUR 254 million ]. After deducting lease payments of EUR 11 million, free cash flow after leasing stands at EUR 243 million compared to EUR 219 million free cash flow after leasing in the same period last year.

Interest payments amounted to EUR 38 million, and we executed share buybacks totaling EUR 27 million (sic) [ EUR 37 million ]. After factoring in these items, comparable free cash flow for the period amounts to EUR 169 million. Overall, our free cash flow generation remains strong and highly predictable, reflecting the resilience of our business model and the disciplined financial management.

At the end of the third quarter 2025, net debt stood at EUR 741 million. This figure includes all external bank debt, and I would like to highlight that the shareholder loan from United Internet has now been fully repaid. The weighted average annual interest rate has improved accordingly to 4.7%, representing our external bank loan. A particular point to note that this quarter is the impact of the planned AdTech divestment. While AdTech itself did not carry significant financial liabilities, its adjusted EBITDA is included in the leverage calculation. Including AdTech EBITDA, our leverage ratio stands at 1.4 net debt to adjusted EBITDA. Excluding AdTech, reflecting the future structure of our business, the leverage ratio is at 1.6 at the end of Q3. On this slide, the calculation, excluding AdTech EBITDA is shown retrospectively in gray fields for transparency.

This improved debt profile, combined with the elimination of refinancing risks through fixed interest debt continues to support our financial stability and provides us with flexibility for the future. Our guidance remains more or less unchanged and now includes the previous guidance for the Digital Solutions & Cloud segment which we had guided separately. Revenues are expected to grow by around 8%, with Web Presence & Productivity growing at around 7% to 8% and Cloud Solutions growing by around 10%. We remain confident about the midterm growth opportunities in Cloud Solutions and expect our public cloud to get to a 20% growth over the next quarters. Adjusted EBITDA margin is still expected to be around 35%, up from 32.9% in 2024. Adjusted EBITDA in the remaining core business is expected to increase by approximately 17% to around about EUR 480 million, for comparison, 2024 was EUR 410.4 million.

As you might have seen in yesterday's press release, this is my last webcast for IONOS, and I would like to take this opportunity to thank you all for your cooperation over the past few years. Together with my successor, Patrik Heider, we will ensure a smooth transition, and we will jointly participate in a number of capital markets events before the end of the year. Thanks very much.

That concludes our presentation for today. Hopefully, we provided you with a comprehensive overview, especially on our new product launch. We will continue to work hard for our customers, improve our products even further and strengthen our market position.

With this, I would like to hand back to the operator to open the webcast for any open questions.

[Operator Instructions] And we already received the first virtual hand from Sarah Roberts. So you should be able to speak now, Ms. Roberts. Ms. Roberts, unfortunately, we cannot hear you.

Perfect. I had a few technical difficulties. Just a couple of follow-ups on the AdTech business, if I may. So you've obviously held it as for sale, but can you help us understand what the contribution was to revenue and adjusted EBITDA in Q3 from the segment? And as a follow-up, you'd previously been guiding to EUR 400 million revenues for the full year in the AdTech business. Is this still the case? I know that RSOC in particular has been a little soft recently. So that's my first question.

And then secondly, can you give us an indication on how soon in the process the held for sale is? Are you in early conversations with any potential buyers? Any confidence that you can sell the business? That would be helpful. And then very quickly, my final question, can you give us a sense of how you plan to deploy the cash received from the sale of the business?

Let me start with the last question, so deploying the cash and that maybe leads as well to our -- so how -- what are we doing with the cash anyhow? So let answer it in a broader context. So as mentioned before, we are looking for M&A definitely in the field of Web Presence & Productivity, very focused on Europe, currently exploring the market and we believe strengthening our market leadership in some of the geographies we are in or are in but not very strong will be helpful for the future. So really investing into future growth. This is still highly on the agenda. We will and are currently discussion to mix -- in discussion to mix in, maybe a little bit of share buyback, et cetera, depending on the M&A pipeline. So maybe that helps a bit to understand overall.

Then on this, how do we see the AdTech business to be sold? We actually do think there are a couple of people who would be interested in the business, and we do see first good results during the process. I will not share a lot of details today, but there's definitely a little bit to be expected. So in terms of the contribution of AdTech in the third quarter, we -- I mentioned the EBITDA contribution during the cash flow commentary and revenue was roughly EUR 28 million in Q3, so significantly down compared to the first 2 quarters which we have guided before so that we should see a drop. That is largely driven by AfD now slowly going down, so deteriorating over time, but RSOC slowly now kicking in.

And overall, we do see this business now stabilizing on a higher level and slightly growing. So depending for the EUR 400 million, I do not believe we will reach the EUR 400 million. However, the business should be roughly stable compared year-over-year. I hope that helps. And maybe just one comment on the EUR 400 million. I think we have seen that very strong Q1 and Q2 revenue contribution which drove confidence. However, then a couple of things changed in the market, more or less.

So then we had a virtual hand from Florian Treisch. I think I give you the permission to unmute yourself, but it seems, yes. Mr. Treisch, can you say something? All right. So maybe you have the wrong device.

In the meantime, we will forward with St phane Beyazian. So now, you can unmute yourself, St phane. I guess there are a couple of clicks.

Can you hear me?

St phane, yes, we can hear you.

Yes. Sorry about that, not familiar with the system -- with this system. Anyway, just one question I have regarding the ARPU. I noticed that the ARPU, if I'm not mistaken is down quarter-on-quarter. At least there is a slowdown in your ARPU momentum. So I was just wondering whether you can give us some color. I mean, obviously we're lapping the price increases that you've done, although I think you were still doing some [ smooth price action ] at the beginning of the year. So just help us to understand what's happening there and if there is any customers trading down perhaps on some plans. That would be my first question.

And my second question is regarding the AI. I mean that was a very compelling and interesting presentation, but I can't help notice that at the same time, your cloud revenues are relatively slow today and underperforming what the hyperscalers are doing. So I'm just wondering whether all your customers, which are auto entrepreneurs, are totally eligible to those products, first of all. And how fast and how strong you think that can kick in your revenue streams?

Yes. Let me start with the first question on ARPU and Web Presence & Productivity revenue and then Andreas will comment a little bit on AI and cloud. So as mentioned before, especially in ARPU, what we do see is definitely a very strong new customer inflow, which is great, by the way. But keep in mind, they are coming with discounts, starting discounts, usually for 12 months. So this is diluting ARPU in a significant way. Additionally, and you mentioned it before, St phane, we do have phasing from price adjustments, especially out of last year. So that's basically the reason. We do see a very strong underlying performance of Web Presence & Productivity and remain, obviously, going forward, especially really confident with AI features coming in additionally besides the agentic AI just into our core Web Presence & Productivity.

Yes. Commenting on the second part of your questions and if I got it right, you made a comparison to the -- our broader ecosystem that you currently see from the bigger hyperscalers. Well, when we look at our customers, to be very, very clear here, and especially in the cloud field of the midsized customers, I personally doubt that we -- that the mission must be to be on par with every single service, right? We need to provide our customers with exactly what they need. And this is really building on the 3 major building blocks that I've mentioned, right? They, of course, want the sovereign infrastructure that give them full control over the data, and that's something where I would say we can really make or where we can really distinguish, right.

The second thing is that we really provide them with all the tools that these particular customers need will be from no-code, if they are not so technical [ afield ] up to low-code and up to full code. And last but not least, having really these extensions around the AI Model Hub which is built on a sovereign platform where you really have to -- the option to pick from plurality of different models and we are continuously adding models as we go. And even fine-tuning tools that abstract again technical complexity away, exactly what our customers are asking us for so that they can do fine-tuning without even having programming skills, right?

And I think the good part is that we on the front-end side have these 3 main pillars which distinguishes us and puts us in a very strong position when it comes to sovereignty, security and control over data. And we can build, of course, on the entire ecosystem that we have. So for example, the solutions that are described when I talked about the Momentum efforts, they are also built on our own cloud stack. So the cloud stack is not only of interest for our customers in the different ways that I just described it, it's even the fundament that we now leverage for building the Momentum solutions on top, which makes it a very powerful stack and ensuring that even the Momentum solutions obey to the sovereignty aspects and security aspects that play a key role for our customers.

So I think it's not the mission to be on par with everything in service, it's the mission on providing exactly the tools that our customers need and playing our strengths in the field of sovereignty, security, control over data and continuing to abstract technical complexity away as good as we can for the customers choosing us. I hope this helps a little bit answering your question.

Okay. And congrats, Britta, again for all the achievements done at IONOS over the past couple of years.

So we come back to Mr. Treisch. I already give you the permission. Mr. Treisch, can you say something? It seems that it's the wrong device. So maybe you can check on that.

But let's move forward to participants who've dialed in via phone. So we go back to Dhruva and then to Nizla. So Dhruva, I unmuted you on the phone, so you can ask your questions. Dhruva?

Okay. But let's go back because Dhruva sent me his questions prior. So then I will read his questions out.

So what's driving the slowdown in WP&P, customer growth continues to be strong, but the ARPU growth rate has notable slowdown. Is there any seasonality in the business or is this the start of a new trend?

Yes. I commented on that with the answer to St phane's question already and as well during the webcast before. So basically, no, it's not a start of a new trend. It's more the outcome of what we see in new customer inflow, what we see in price adjustment phasings over the last 12 months. So we remain confident about ARPU growth going forward.

Yes. And if I may extend, I mean, I already commented on that during my pitch, but especially with what we are now or what we have announced today, right, with Momentum, and given that we will build up this digital workforce, as we called it, and have all these virtual agents there, we clearly expect ARPU going up significantly. And why am I thinking that? I mean if you look currently, let's pick again, this hotel receptionist, for example, right? We know it's very difficult for people in this business currently to find even people. But second, it's very easy to do a calculation saying, okay, let me try and let me try buying an agent costing me in the range of EUR 30 to EUR 50, and let's see if that works properly because then the savings that you can make are immediately measurable.

So we expect many people to try that out. And since this is at a very -- compared to our previous business, at a very higher level of how we charge, we expect this will drive ARPU to a totally different level in the next couple of months, especially when we go beyond the receptionist that we already launched and when we add more and more agents. And as I've said before, we expect customers when they made their first experience that they will buy not only one agent but maybe a couple of them or even a bundle which we will offer as well. So there is a good reason why we are very optimistic looking forward with the new AI-based extensions that we have been talking about today.

So Dhruva has 2 further questions.

Now that you're considering splitting out the AdTech business, would you also look at potentially splitting out the cloud business or are there too many synergies between WP&P and cloud? Could you give us a rough quantum of the WP&P intersegment revenues for cloud?

So there is a significant synergy as we are running a couple of our core products on Cloud Solutions, and we do -- so if we would have excluded it's a double-digit amount of revenues which cloud is doing with -- so with Web Presence & Productivity. This is not included in the figures you are seeing as we are not only including external revenues, just to be precise here. So we do see a lot of synergies and we do not intend to split out Cloud Solutions or put it up for sale just to be precise here. It might be that at one point in time given we as well might consider to changing how we look into the different segments on an EBITDA level, that we split them out on a segment level, so we do a segmentation. But this is not done yet, and we are still considering the cost base in total currently, given what I mentioned before, the synergies which we are seeing. And I think Andreas as well pointed it out during his speech that this is a whole set as well of products we are providing between Web Presence & Productivity and Cloud Solutions with AI Momentum.

Yes. And that's very crucial also to guarantee what I mentioned before to really have a full-blown stack that is what we would consider sovereign, right, and under our control, just to make this minor addition here.

Dhruva's last question.

What differentiates the IONOS agentic AI offering versus the likes of Zendesk, Salesforce or others? Do you compete on price or product breadth or is there something else that's the differentiating factor? Are you concerned about potential hyperscaler competition in this space?

No, absolutely not. And I think the main power of what I've been talking about and we just had one answer to this already, right? We have the full stack under our control. We have a Model Hub that we can build on -- where we can continuously add models that we can build upon. But I think the most powerful thing is the deep integration in our full ecosystem and that's something not so many of our competitors can build upon. So I already gave you an example during my pitch.

If you want to have the best performing agent that you can think of that really, really answers in the best possible way the customers using your agents can get. And let's pick the receptionist that I've been talking about again as an example. What you need is -- I mean what makes an AI agent an expert? The wisdom or the knowledge you feed it with. And that's something where we are really, really strong because we can build on our base of 6.5 million customers and we can really learn from all the products this customer is already using, no matter if it's a website and so forth, right? So we have a very powerful knowledge base that we can use to give high-quality answers when these agents are being used.

The second point is, I think we are very, very good in abstracting technical complexity away and we are targeting a different group here. And as I've said before, I mean, it's -- essentially, it's a 3-step process to set up one of these agents up, which means, especially for our customers, it's -- which, as I've said, is also mainly SMB customers, they do not want to deal with setting up what maybe bigger hyperscalers provide, right?

A RAG pipeline or want to do all of this stuff. What they really want is they want to book such an agent from shelf, then they want -- that we ask, can we use the information we already have from you to make this the most powerful agent you can think of. And then we even allow to upload additional information like, for example, coming back to the hotel example, PDFs and additional information that gives information about the menu you offer in the restaurant and so forth. So I think we have on the one hand side this full stack under control. We have control over data and sovereignty, but we also provide it tailored to our customers by abstracting away the technical complexity, which I think makes us -- puts us in a position to offer in a perfectly tailored way to what our customers are demanding.

And then we have the next virtual hand from Gustav Froberg. So Mr. Froberg, I already give you the permission to unmute yourself, so please ask your questions. Seems similar to...

Hello, can you hear me?

Yes.

It works. Great. Sorry about the technical mess up. I have a couple, please. Starting on ARPU. I just wanted to drill into this ARPU development a little bit more, if I may. You've talked about some new customers joining on discounts, which is fine, as well as some price reductions on the cloud side. But if I strip out those 2 effects, I want to ask about the ARPU evolution for the core part of your business or, let's say, existing customers using Web Presence & Productivity, how has ARPU evolved there? And maybe we can use some of that information to extrapolate what the trend should be in the future. I'll start there and then pause for the other questions.

Yes. So we are not looking into ARPU separately for Web Presence & Productivity. We are looking at it in different product lines, obviously, but overall we are not looking into it decoupled from Cloud Solutions given as well that some of our customers do have a slight overlap. But let me maybe come back to what still holds true, that if we target for roughly 9% revenue growth, which we are doing for Web Presence & Productivity in future, so 9% to 10%, 1/3 should be coming from price adjustments and another 1/3 should be coming from cross and upsell, which means, in total, 2/3 should be coming from ARPU overall, whereas another 1/3 should be added by new customers joining us. And this still holds true despite some quarterly distortions which you might see.

So look overall at the -- how is ARPU trading? And this is definitely doing well and will continue to do well in Q4. And therefore, I do understand the questions around ARPU development, but we really remain confident about ARPU growth going forward, looking at historical trends and as well looking at what we have in the product pipeline going forward, offering even more opportunities for cross and upsell to the existing customer base. So really fundamenting the 1/3 I mentioned which comes from cross and upsell.

So there's a bunch of opportunities in this area and not looking into what Andreas mentioned before, the agentic AI which will come in with a higher ARPU, just separating it for a moment. So there is a strong underlying ARPU development if we look as well into the different product lines. So we do see some growing faster, obviously driven by price adjustments, et cetera. But overall, there's a strong development of our underlying business, yes. Additionally, there's a lot of opportunities coming in with agentic AI and AI Momentum. I hope that helps a bit.

Yes. Great. And then a question on AdTech disposing of the business, I think very positive news because it will allow for a bit of a smoother set of results going forward, but the Q3 result is perhaps very low. And you mentioned that something changed after H1 that potentially resulted in this and makes you move away from that EUR 400 million goal. So firstly, what was that change? And also why is now a good time to sell the AdTech business given that it is at its lows?

Yes. So if you look underlying into the business, so first of all, what has changed? Google, which is a provider of the RSOC business, had introduced a couple of quality measures for this RSOC product which caused the market to pause a bit, I would say. And additionally, which was basically expected was that the AfD business will phase out. This is now slightly accelerated by Google. And if we look into H1, we had a very strong AfD business, as we mentioned before, additionally to a very strong RSOC business and both of them have been slightly distorted in the first months of Q3.

However, RSOC is back on track, and we do see it growing. So overall, it has stabilized, and we do see a very good trading overall. So this is why we believe -- if we look into the business, this is now a right time to focus on the opportunities which we do see in this AdTech business. There's a lot of opportunities coming up with all of the product changes which now are more and more digested by the market and the business is on a good way. So there's a lot of opportunities.

We are given all the opportunities which we have in Web Presence & Productivity and Cloud Solutions, not -- are not able to provide enough focus for those opportunities. So we really want the AdTech business to be enhanced which can help with all those opportunities. So this is basically why we believe that it's the right time. It's stabilized, there's a lot of opportunities which a potential buyer can exploit, and it needs a certain focus to exploit those opportunities. So there's -- we believe there's a lot of value in the business actually.

Okay, great. And then the last one is just on guidance for Q4 kind of implies a revenue acceleration for the remaining business in Q4. Without referencing historical trends, why specifically do you think we should see an uptick in revenue growth in the fourth quarter, maybe also absent ITZBund? And then similarly, on margins, you've performed very strongly on the EBITDA margin at 9 months. But for the full year that means Q4 is looking like it will be a little bit below the 9-month level. Why should that occur?

Yes. So I think the question on revenue, yes, there's a chunk of this coming from ITZBund. As I mentioned before, we expect a building block to be delivered and built so that will help in accelerating the revenue growth. On EBITDA, and I think we mentioned -- implicitly mentioned it as well, as you know, Q1 and Q4 are our strongest month in terms of customer acquisition. So we would expect a couple -- a little bit more marketing to be spent in Q4 than we spent in Q3, which will deteriorate EBITDA a little bit.

And then we will move on with the questions from Mollie. So Mollie, you can unmute yourself now. I guess it takes a bit of time. But Mollie, we will cover it with the questions from Nizla.

We got a question here. I can read it out. On vibe coding products, you've previously spoken about what you see as limited risk from vibe coding platforms. Have you introduced new vibe coding products because this risk is proving more significant than originally anticipated?

My first answer would be, Andreas, no. But of course we want to exploit the opportunities vibe coding offers.

Absolutely. I couldn't have phrased it any better. We also have to see how -- where our customers stand. And especially when looking at SMB customers, I think the smartest approach that we can go is not changing gears from today to tomorrow. But of course we also anticipate what is happening in the future, and we want to be prepared. And we want to take, as I've said before, our customers on that journey. So of course, we see the future coming.

That's exactly why we decided not to now shut down what we have and go full blown into vibe coding, but going step by step and taking our customers by hand on this journey to make them successful, which means I think it's absolutely right that we stick to, for example, the site builder that we have that we now iteratively extended with vibe coding capabilities so that our customers still have the chance, right, and introducing them also slowly into this new world in using natural language in the already known site builder to let the site develop and then ultimately go in the future world when everybody has made its first experience in a system where you probably can do in an iterative fashion, build your entire website by using natural language only. So it's not a technical problem.

It's also looking where our customers stand, the feedback that we get and then doing along a time line, a transition that allows our customers to follow, right? That's also why we don't want to shut down the one thing and then add something new. But as I've said, iteratively add features, also making our own learnings together with our customers, how the adoption is being and then coming into this new world moving forward. So I think this is not -- this is the true answer, right?

Yes. And keep in mind, if you use vibe coding platforms, you are set with a website, with a static. With us, you have a fully working WordPress website which is not static. It's secure. It's reliable. It's sustainable. And as Andreas mentioned, our customers are not as tech savvy as you might think they are.

Yes. So what we do is actually we give them the best of both worlds at the moment, right? I think that puts it quite to the spot. And also when we see the agencies we are working with, also they are looking still for having those opportunities. I think that's very important. And last but not least, I mean I'm a very technical person, as you may have seen, I've been a CTO before. You also have to be very, very realistic where we stand with the vibe coding capabilities, right? For simple static sites, many of these things are good enough.

But if you start doing more complex things, if you start refining your website in an iterative way due to the limited context windows that you sometimes have, it can very quickly happen that you make a fourth and fifth change in an iterative process and then what you have built before is being kind of messed up, right? This is something where we want to protect our customers from, right? So we go here step-by-step, taking our customers where they stand, but also looking at how powerful is this technology already, where can we really use it and offer it to our customers and give them a good experience. The future is very clear, but we have to go in a speed that is reasonable from all these angles that we have just commented on.

So I do see a couple of questions around vibe coding anyhow. So first of all, any incremental investments and how we plan in terms of growth and margin expansion. So if I look into 2026, it's a bit early to say details, but nevertheless we stick more or less to our slightly now adjusted midterm guidance, adjusted for the reason AdTech is no longer included. So we believe overall revenue growth in the midterm should be around 10%.

And obviously, looking at the strong margin which we see in the digital solutions and cloud, which is our total business, by now, we would target a 40% margin in the midterm, yes, and any investments which we do, we are partnering with a lot of providers in that case. So we do not see a significant amount of incremental investments which we cannot fund by operational leverage, efficiencies which come from the internal use of AI, et cetera, et cetera. So not a large drag down in profitability to be expected.

So -- and then I think I already answered a little bit on the vibe coding partnering. Yes, we are as well partnering with vibe coding. We mentioned our partnership with Entri before. This is still in there. And the customers are -- our customers, and this is actually what's the good thing about this partnership because we are able to cross and upsell them and those customers are really prone to cross and upsell.

Yes, maybe to extend a little bit. I mean, there's also this question of -- I just read it out again. Are you already partner with vibe coding, no-code builders to host their websites? How many customers did you get from these partnerships and so forth?

I mean, you know that, right. I mean, IONOS has partnering and building a partner ecosystem very deep in its DNA. This has a couple of advantages because it helps us to gain speed, of course, right, but it also helps us to benefit from the domain knowledge. So if you go with a particular partner that is defining a very specialized or building very specialized solution, think of restaurant booking system, think of whatever else, then we benefit in 2 ways, speed and we benefit from the domain knowledge, right, which is why we are, of course, working with partners.

To be a little bit more concrete when it comes to vibe coding or building also agentic solutions. And we made announcements, you may have seen it, if not, I recommend to do so. You may have seen it during the IONOS Summit that took place last week, Tuesday in Berlin, where I gave one of the opening keynotes. And there I made a couple of announcements, particularly on partners that we are working with. So there's one particular slide that lists almost all the partners being relevant in the AI space.

I just pick 1 or 2 examples that you get a feeling. So at the moment, we are very, very strongly working together with Blockbrain, which is one of the award-winning companies in Germany recently, allowing you to build agents and knowledge bots, so -- and especially using their technology, we will add more and more agents, as I said during my pitch, beyond the receptionist that we have. So things that will come are SEO optimization agents, analytical agents, social marketing agents and so forth, but not because we build everything on our own, we also rely on partners.

Another one is, of course, because you also have been asking on no-code, low-code tooling. We also have our first images available for n8n. And I think everybody out there knows n8n. It's a wonderful tool for building workflows where the single points in the workflow can make use of AI to automate things. So this is also something that we are currently looking into, and this goes actually through the entire stack, right? It's not only for vibe coding. We do also partnering, for example, when it comes to the model layer with NXAI, as I mentioned.

We even have partnerships with companies that do testing and validation in a very systematic level for building your AI solutions to make sure the AI solution that you are building is really doing what it is supposed to do. That's a technology we also use internally to test our AI solutions, partners being called [ Resaro ] also being mentioned during the summit last week. So long story short, a plurality of partners we are working with bringing us speed, bringing us domain knowledge and making sure we can launch all the more agents in the upcoming weeks. I hope this answers this question as well.

So then we have 2 further questions. One's from Mollie.

If no M&A is identified in the short term, has anything changed with how you are thinking about shareholder remuneration now that AdTech is up for sale? More generally, do you think you would be more likely to prioritize dividends over buybacks? Would you consider further small buybacks in the meanwhile?

As I mentioned before, M&A is the prio. And yes, if we do not -- are able to be quick enough or find something appropriate in the short to, let's say, 12 to 24 months, we definitely will look into other means of shareholder remuneration. This includes share buybacks, I think, as a prio compared to dividends, but nothing decided there. So just my personal view by now.

All right. And I guess the other...

That's already answered.

You already covered it, yes. All right. Then it seems we have no further questions and no virtual hands.

Yes. Maybe just one last comment. So this is my last webcast for IONOS. I mentioned it throughout my speech. Thanks very much, everybody, for your continuous support. A special thanks goes to Andreas who stepped in for Achim who is not able to join for personal reasons. And obviously, it was a super fit given that we have just launched AI Momentum. So good to have you on board. I think the team will rock it as well going forward. I'm still around until end of this year to ensure a smooth transition. So thanks very much. And Sarah, now back to you.

Maybe I can add just one word. We have been working together now for 8 weeks. I already did know that I will miss you very much and thank you very much for having been a good partner for these weeks and giving me a good and warm welcome and introduction and also helping me through this today for the first time.

Thanks much, Andreas.

Thank you so much for that kind word. I have nothing more to add, and that's why I would like to turn the conference back over to Stephan Gramkow for some closing remarks.

Thank you, Sarah, and thank you all for joining today's call. Please feel free to reach out with any follow-up questions. Have a great day. Stay safe, and goodbye.

Good morning, everyone, and welcome to the IONOS Analyst Investor Call for Q2 2025. Thank you for taking the time to join us today. My name is Stephan Gramkow, and I'm responsible for Investor Relations at IONOS. Here's what we will cover today. Achim Weiss, CEO of IONOS will start with the business update and strategic priorities. Next, Britta Schmidt, CFO of IONOS, will walk you through H1 and Q2 2025 financials. She will also cover our outlook for the full year. Achim and Britta will then be happy to answer any open questions after the presentation. I would now like to hand it over to Achim. The floor is yours.

Thank you very much, Stephan. Good morning, ladies and gentlemen, and a warm welcome to our conference call. I'm Achim Weiss, CEO of IONOS, and I'm pleased to update you on our business and key topics. Our mission at IONOS is unchanged. We empower small and medium-sized businesses to succeed in the digital era. We strongly believe that every business, regardless of its size, should have access to the same technologies and expertise as large enterprises. We aim to close the digital gap by offering innovative, user-friendly and affordable digital solutions that help SMBs grow and compete efficiently.

The reliability of our mission-critical products, backed by the dedicated support of our personal consultants has helped us to develop and maintain a very loyal customer base. In the first half of this year, we successfully onboarded 150,000 new customers, increasing our total customer base to approximately 6.47 million. We increased our ARPU by around 4% compared to last year on the back of successful up and cross-selling as well as our regular price adjustments. Customer growth, high ARPU and strong adtech performance, which we will elaborate in detail later, led to revenue growth of around 19% in the first half year.

Furthermore, IONOS' platform model and substantial economies of scale, combined with robust growth have led to consistently higher levels of profitability for the company in which turn led to an adjusted EBITDA growth of around 23% in the first 6 months. Our core offerings supported by reliable and personalized customer care continue to drive customer loyalty. We successfully added 70,000 net new customers in the second quarter, bringing our total net additions to the first 6 months to 150,000, as already mentioned.

This represents a significant improvement compared to the 90,000 net additions in the first 6 months last year, underscoring the strong alignment between our product offerings and customer needs. Our average revenue per user continued to develop positively and robustly, driven by successful upselling and cross-selling initiatives as well as targeted price adjustments. Importantly, churn remained largely stable throughout the transition, underlining our -- both the strength of our customer relationship and our pricing power in the market.

Artificial intelligence continues to boost internal efficiency and reduce operational costs while enhancing customer-facing features and creating new revenue opportunities through additional use cases and cross and upselling. AI is currently integrated in most of our product lines with more features to come every quarter going forward. Our focus remains on hosting -- boosting efficiency, driving innovation and delivering measurable value to our customers. For small and medium business, in particular, our AI products provide access to advanced technology previously available only to large enterprises, always with a strong emphasis on full data privacy and compliance.

In 2024, we launched the AI Model Hub, a sovereign multimodal platform hosted in IOS Enterprise Cloud. Building on that, in April, we introduced IONOS GPT, an intuitive interface that empowers businesses to incorporate their internal documents, databases and content securely processed and stored in our European data centers. We launched IONOS GPT in Germany. Now we are preparing for a broader rollout across additional European markets. And we will also expand the range of function with further AI models, new features and enhanced personalization.

One of the most exciting developments in AI is the rise of intelligent virtual agents, which we believe will fundamentally transform how SMBs operate. Today, small- and medium-sized businesses spend only 50% to 60% of their time on core business activities. The rest is tied up in operational overhead, managing inquiries, handing appointments, running marketing tasks. With AI agents, we believe this number can rise to 80% or even 90%, freeing up valuable time for business owners to focus on what truly matters, their customer and growth.

AI agents bring a number of fundamental advantages to the table. The always available, never get sick, never forget and can work 24 hours a day, 7 days a week across multiple channels simultaneously. This makes them ideal for automating a repetitive time-consuming and low-value tasks across the business. We see 2 categories of agents playing a key role.

The first are general purpose agents that require a minimal setup. By scanning a website, online shop, FAQs or other digital content, they can start delivering value immediately. These agents can manage first level support, handle customer inquiries and provide product recommendations. We also support marketing tasks creating newsletters, helping with online as are generating and scheduling social media content. These use cases align closely with our existing products like website builder, e-mail marketing and online shops and offer fast time to value without complex integrations.

The second, even more powerful category includes deeply integrated agents that connect directly to back-end systems, CRMs, calendars, POS systems, databases or reservation tools. These agents can automate entire operational workflows. The restaurant could use them for booking and shift planning hires or doctors for scheduling our travel agency for handling requests and follow-ups. Today, SMB is typically by only 1 website, but they can deploy several agents across their business in the future. For example, 1 for customer support, 1 for scheduling and 1 for back office tasks like invoicing or HR.

This significantly expands addressable revenue per customer -- while traditional website products generate EUR 10 to EUR 20 in ARPU, virtual assistance are expected to start in the range of EUR 20 to EUR 50 per agent. Over time, the use of multiple task specific agents per customer opens up entirely new revenue layers for us. IONOS is uniquely positioned to lead both segments. We serve a large and loyal SMB customer base, have decades of experience building digital solutions offer excellent personal support and have the technical platform and development capacity to integrate AI deeply into all business workflows.

Our first agents are already in beta with general availability planned by the end of this year. At IONOS, we're not just adopting AI, we are shaping how AI delivers real measurable value for SMBs. Europe stands at the threshold of a transformative area shaped by evolving global political dynamics offering significant opportunities for the future growth of irons. -- the pursue of digital serenity, specifically independent from U.S. hyperscalers and full data control is becoming increasingly critical. This trend is set to significantly impact not only cloud solutions but also web presence in productivity, services across sectors, companies and organizations of all sizes.

We are seeing a significant increase in interest around digital serenity, practically in our cloud -- sorry, in cloud offerings. Destroying awareness spends across companies of all sizes, including public sector institutions. However, in the enterprise and public segment, sales cycles are -- tend to be long, typically ranging from 9 to 12 months. Cloud projects in these areas unique require detailed planning and then often implement in several phases. While this means revenue materialize over more gradually, the current level of interest provides a strong foundation for future growth.

In June, IONOS has together as our partner, Roti, submitted an expression of interest to the European Commission for participation in the Invest AI initiative. This program aims to establish up to 5 large-scale AIDA factories across Europe to meet the continent growing demand for sovereign high-performance AI infrastructure. Our proposal outlines the facility with an initial capacity of 50,000 GPUs, scaling to over 100,000 in the long term, is designed to support a large-scale AI workloads with a fully sovereign and sustainable ecosystem with high-efficiency cooling European data protection standards and deep integration with our cloud infrastructure.

It's important to note that this is currently an expression of interest only, the first nonbinding step in what will be a competitive multiphase selection process. The final rules for participation, including funding frameworks and procurement guidelines are still being worked depending on the quality and strategic fit of each proposal. This level of co-funding is an important signal, but we want to be clear. is over 3 decades of experience in mission-critical hosting and cloud infrastructure and a strong track we occur in Serenity, we believe IONOS is very well positioned to play a key role in this initiative.

That said, we see this project as a long-term opportunity, not a short-term risk. It aligns with our broader strategy of enabling Europe's digital serenity and supporting the next generation of AI innovation. But are is under the right conditions and with clear economic value. At this point, I would like to hand over to our CFO, Britta Schmidt, to talk about our financials before we start with Q&A session.

Thanks, Achim, and welcome as well from my side. As you know, with the full year 2024 results publication, we introduced a new segment reporting to enhance transparency and better reflect our operational structure. Firstly, Digital Solutions and Cloud, which includes Web Presence & Productivity and Cloud Solutions. This segment generated EUR 656 million revenue in H1 2025, accounting for approximately 73% of our total revenue.

The adjusted EBITDA margin in this segment is continuously strong, standing at 36.1% in the first half of this year. If we look at the 2 included business lines separately, we can see that our Web Presence & Productivity business generated EUR 544 million in revenue in the first half, accounting for approximately 61% of our total revenue. Our Cloud Solutions business generated EUR 90 million in revenue, accounting for around 10% of our total revenue. Our AdTech segment on the right side, generated EUR 239 million in revenue in H1 2025, accounting for approximately 27% of our total revenue with an adjusted EBITDA margin of 13.3%.

Overall, we are extremely happy with the first 6 months. Total revenues, as mentioned before, reached EUR 895 million, reflecting 19.1% year-on-year growth. Adjusted EBITDA came in at EUR 268.7 million, up 23.3% compared to the previous year, resulting in a 30% adjusted EBITDA margin compared to 29% in the first half year of '24, again, underlying the strong operational leverage of our business model. Marketing investments were slightly higher than last year as we are growing our business and continue to invest into brand building.

Adjusting for the marketing expenses to make it comparable, adjusted EBITDA would have been $281.3 million, growing 29% year-over-year. Looking at the second quarter, total revenues increased by 18.5% to $448.7 million. Adjusted EBITDA increased by 22.7% to $137.7 million, resulting in 30.7% adjusted EBITDA margin. Adding back the $8 million higher marketing expenses to make it comparable, adjusted EBITDA margin would have been 32.5%.

Let's take a closer look at the performance of our segments. The Digital Solutions and Cloud segments achieved EUR 326.4 million in revenue in the second quarter, making -- marking a 6.7% increase year-over-year or 7.1% excluding intercompany revenues. The adjusted EBITDA margin improved significantly to 38%, up 4.3 percentage points from Q2 in the last year. Our AdTech segment reported revenue of EUR 122.3 million, representing impressive growth of 68.3% year-over-year based on a weak prior year and supported by the positive development of the ongoing product transition. The EBITDA margin was at 11.1% compared to 12.8% in the previous year.

As previously emphasized, we anticipate temporarily lower margins as a result of the ongoing product transition. I will provide more detail on the ad tech dynamics shortly. Let me reiterate what Achim already briefly touched. In the first 6 months 2025, we added 150,000 net new customers, which is well above 90,000 net additions in the first 6 months last year. As outlined in previous webcast, we expect stronger customer growth in 2025 compared to prior years. The strong performance in Q1 with 80,000 new customers was not an outlier. In Q2, we added another 70,000 customers, continuing this positive momentum.

Demand for our products remains solid. Customer growth continues to have seasonal variations with slightly lower growth during the summer months and the strongest customer growth in the first and fourth quarter, but we expect customer growth overall at a higher level compared to last year. This positive development underscores the strength and appeal of our offerings as well as the successful execution of our strategic initiatives. At first glance, ARPU growth may seem modest. This is primarily driven by different phasing and scale of price adjustment initiatives following significant changes in our pricing structure kicked off in 2023 and rolling into 2024.

As you might remember from previous webcast, ARPU in the second quarter is typically slightly lower than in the first quarter. This is a seasonal effect as we typically have many domain renewals in the first quarter, where revenue for 12 months has to be recognized upon renewal. Additionally, revenue growth in our Cloud Solutions segment is slightly lower, which is also impacting ARPU as ARPU for cloud product is naturally higher than in Web Presence and Productivity.

In total, we are seeing ARPU and customer growth of approximately 4% each. This puts us firmly on track to meet our full year revenue growth target of 8%. Going forward, our pricing approach remains balanced and strategic, aiming to attract new customers, maintain competitive positioning, enhance customer satisfaction, but also implementing price adjustments where appropriate. Let's have a look into the performance of the different business lines within the Digital Solutions and Cloud segment. In the second quarter of '25, our web presence and productivity business grew by 7.4% year-over-year to EUR 270.5 million, driven by continued customer growth and higher ARPU compared to the previous year.

Excluding FX effects, which were negative in the second quarter, revenue growth is 7.9%. Our Cloud Solutions delivered revenue growth of 5.2% to EUR 45.1 million or 5.9% like-for-like, excluding FX effects. Let's have a deeper look into the cloud business. In Q2 2025, Cloud Solutions revenue reached, as mentioned before, EUR 45.1 million, representing a 5.2% year-over-year increase. The changing global political landscape presents significant opportunities for future growth at IONOS.

Nevertheless, as Achim already pointed out, we are seeing increasing customer demand, but the translation of higher demand into revenue growth needs time. Looking at individual product areas, public cloud grew by 10% in the second quarter. Revenue in this quarter does not include any material revenue contribution from the ITZbund project. As a reminder, the majority of revenue from ITZbund is recognized progressively aligned with the deployment of hardware blocks in the data centers.

We have finished setup and commissioning of our cloud in the ITZu-wn data centers, followed by an intensive test phase for the first hardware blocks. Technical sign-off has been granted, and we are now in real-life operations. We, therefore, anticipate meaningful revenue contribution from IZbund and an acceleration in growth in the second half of the year. Private cloud revenue grew by approximately 3%, while managed cloud increased by 4%. Our current focus is on driving customer adoption of our cloud solutions and to convert the high demand for data sovereign cloud products into growth, both supporting our long-term growth strategy.

In our AdTech segment, we've seen another strong quarter. After a very strong first quarter, revenue grew by 68% year-over-year in the second quarter based on an exceptionally weak prior year quarter and supported by the positive development of the ongoing product transition, where we have seen both products performing strongly. We are closely monitoring the impact of the ongoing product migration to RSOC. While we are confident that this transition will ultimately benefit our business, we are aware that it may lead to some short-term volatility.

In fact, we have seen very strong first 2 quarters in this year. However, it should not be forgotten that this is a new product for all market participants, and we expect that optimizations will be necessary in order to have a strong product in the long term, which in turn will result in a temporary decrease in revenue growth in the coming months. Nevertheless, we are encouraged by the better-than-expected performance in the first 6 months and by the ASO onboarding process, which is well underway. We are committed to driving this transition forward and are confident that it will have a positive impact on our AdTech business.

Turning to our capital expenditures on Slide 19. We can see that our total CapEx in the first half was EUR 23 million or 2.6% of our total revenue. This is a slight decrease from the previous year where our total CapEx was EUR 32 million or 4.3% of our total revenue. Breaking down our CapEx, we can see that our growth CapEx was EUR 19.6 million or 2.2% of total revenue, which is mainly from the expansion of our cloud solution capabilities. Our maintenance CapEx was EUR 3.4 million or 0.4% of our total revenue and remains low and predictable. CapEx was notably low in the first half of the year, primarily due to the phasing of investments throughout the year.

Looking ahead, we project total CapEx for the full year at around EUR 80 million. This is slightly below our internal initial target range of EUR 80 million to EUR 90 million or around 5% of expected revenue. This reflects disciplined investment to support innovation, growth and operational scalability. Let's now walk through our free cash flow for the first half of 2025. Starting with adjusted EBITDA of EUR 269 million, we deduct EUR 10 million in adjustments, which are mainly stand-alone and LTI-related costs to arrive at reported EBITDA. We then include EUR 23 million in CapEx, EUR 32 million in tax payments and payments in relation to the settlement of the long-term incentive program obligations.

The settlement was made net, which means that the obligations were settled with treasury shares after deduction of the individual taxation of the recipients, but the tax portion is then paid to the tax authorities by us. After including working capital, we reached a free cash flow before leasing of EUR 176 million. Subtracting EUR 8 million in lease payments gives us EUR 168 million in free cash flow after leasing, which is well above the EUR 151 million in the first half of '24. Further, we made EUR 27 million in interest payments and executed EUR 37 million in share buybacks.

After factoring in these items, comparable free cash flow for the quarter stands at approximately EUR 105 million. In the first 6 months of 2025, net debt was reduced to EUR 786 million. This includes both external bank debt and the shareholder loan from United Internet. In the second quarter, we repaid EUR 70 million, reducing the shareholder loan to just EUR 100 million, which we plan to further reduce over the coming quarters. Our net leverage ratio improved to 1.6x net debt to adjusted EBITDA compared to 2.4x a year ago.

The weighted average annual interest rate stands at 4.9%, which will go down further with the upcoming repayments of the shareholder loan. This improved debt profile supports financial stability and provides flexibility in the future. Looking into the outlook for '25. For our core business, Digital Solutions and Cloud, this is unchanged and revenues are expected to grow by around 8% with web presence and productivity growing at around 7% to 8% -- we now expect Cloud Solutions to grow by around 10% compared to around 15% to 17% before.

We remain confident about the midterm growth opportunities in cloud solutions and expect our public cloud to get around 20% growth over the next quarters. Adjusted EBITDA margin is still expected to be around 35%, up from 32.9% in 2024. Based on the better-than-expected business development in the AdTech segment in the first quarter as well as our ongoing cost control, we already specified our outlook for '25 in May and increased the expectation for revenue growth in the AdTech segment to around EUR 400 million compared to above the previous year's level before. In May, we already increased the outlook for the total adjusted EBITDA from EUR 510 million to EUR 520 million.

Due to the overall positive development and as mentioned, the continued cost discipline, we are now increasing our guidance again and expect adjusted EBITDA to grow by approximately 17% to around EUR 530 million. That concludes our presentation for today. Hopefully, we provided you with a comprehensive overview. We will continue to work hard for our customers, improve our products and services and strengthen our market position. With this, I would like to hand back to the operator to open the webcast for any open questions.[Operator Instructions]

Our first question comes from George Webb, Morgan Stanley.

I've got a few questions, please. Firstly, just as we think about ad tech, could you give us an update on how far through the transition you are at the end of the third quarter? And maybe you won't be willing to give this, but if you could add any color on what you're seeing in terms of growth rates on the AFD side versus the RSOC side, that would be interesting. Secondly, on cloud, I mean, I guess what's driving the downtick there on your expectation for 2025? We wouldn't have expected, I guess, IT to have deliveries in Q2. So that doesn't look like the surprise.

But I guess that public cloud business, even in the mix growing at 10% is not strong compared to some of the regional players and certainly not the hyperscalers. So what's driving that downtick? And how do you think about your overall cloud growth rate? And then just lastly, on the revenue target for Digital Solutions and Cloud, you've kept that at 8% for the full year. with that cloud guidance reduced from 16% at the midpoint to 10%, I think that's about a 70 basis point headwind. Are you implicitly expecting a slightly stronger performance from the core business compared to previously? Or is that just rounded in that 8% number?

Let me maybe start with the AirTech business and Achim, you might take the cloud question. So transition from AFD to ROC is well underway. We saw ROC overtaking AFD in May. Pictures changed a little bit after that with more quality initiatives coming in from Google, which the market is currently tackling. So overall, as mentioned, we are still optimistic to see the EUR 400 million growth, largely driven by ROC compared to RFD, which was definitely stronger in the first half but it will not be very strong in the second half.

Yes. Second question was about the cloud growth. First, again, the cloud segment or cloud business segment comprises a lot of different services. There's a public cloud, there's private cloud MSP services, there's VPS service, different things in there. A few of them are not strategic. We acquired them, for example, when we bought S, we acquired some MSP business with that. So this is not strategic, so it's not really growing much. We have now a much larger partner network for the cloud than trying to do it ourselves.

And the other reason -- and so the mix effect shows lower numbers than what is the most important part of the public sector, the public cloud growth. And the other thing is that we are, of course, we're pretty busy with really installing and getting the Iesabund project operational. which just happened basically a week ago with all the testing and final approval of the E to get this live. Now the first customers are on that platform. So it's kept us pretty busy. And that's why like Brega said, we expect now a faster growth again in the cloud segment for the rest of the year.

And answering then your second question, so we would see that presence and productivity being in line with expectations. But with the cloud solutions uptick, which we would see over the next quarters, that adds up to the rounded 8% revenue growth for the year.

That's helpful. And maybe one last question, A. When we think about the AI Gigafactory initiative, and let's see how it pans out. But from the investor side and from the analyst side, how should we be thinking about the steps from here and the time line and headlines that we should be looking for?

Yes. [indiscernible] on the time line, I think now there's a lot of commenting phase. So we are talking to a lot of politicians now in Germany, for example, and also in the EU because they're trying -- are they making up their mind how this program is going to be set up? Is it the PPP like probably prior partnership? Is it going to be some other sort? What are the requirements for funding and so on and so forth. So basically, every hour a week, we sent some paper and some statements of what we think the direction should be.

So I think that's continuing until the end of the year. That's at least the idea of the European government to say, okay, we'll figure this out until the end of the year, and then they will start with the real tender and then we need to see if we want to apply or not. So there's plenty of time for us to get prepared. I mean we are doing our business as usual. There's a lot -- I mentioned a lot of AI things coming along. So there's huge demand for AI capabilities. So it is in our plan in some ways anyhow. And if that project works out well and makes a lot of sense for us, we would take the 35% subsidized, why not? That's basically how we look at it.

Our next question comes from Toby Ogg,JPMorgan.

Perhaps just first one, just on the AI agents. So you mentioned the 10 to 20 sort of traditional ARPU. And then I think it was 20 to 50 ARPU that you mentioned with virtual assistance. Could you perhaps just sort of walk us through the mechanics of what the approximate buildup of that could look like for a customer if they were to, say, move from 10 to 20 ARPU today to 20 to 50 over time with agents? And just how you're thinking about the revenue model for AI agents?

Is this going to be a monthly subscription fee on top of, say, the baseline website builder? Or do you envisage any consumption-based revenue streams? And then just second question, just again on the AI gigafactories and your submission here. appreciate it's still early. You talked about up to 35% of CapEx being subsidized. Any sense around how the rest will be split, what the total spend could look like? And then sort of any early thoughts on how you plan to fund that?

Okay. So with the AI first, I mean, it's a very early phase. The products will get released now, not just with our companies. But honestly, I mean, there's a lot of people working on it, I'm pretty sure. So the pricing in the market is not really set yet. That's our expectations. That's how we would start. Depending on the AI agent, a small kind of small agent doing just a very specific task might be cheaper than having one very powerful AI agent taking care of half of your business, of course. It will be very likely monthly subscription like everything else we do.

And it will be on top. It's just different separate products. We are enhancing our website builder product, for example, with AI capabilities all the time, and we have separate modules as well, which are on a monthly subscription. But AI agents are really separate category, new product lines coming along. There will be just much higher in ARPU and typically, companies can use more than one. In websites, you usually need one, e-mails, you need a lot, shop system, you need one.

But AI agents, the more we build, I think the more we'll find use cases or customers will find use cases to use the AIs. And compare a, let's say, EUR 50 a month AI agent taking a job is like a mini job for now, which is in Germany, for example, like $500 or $800. So the comparison is it's not completely not out of pocket. It's a huge saving for companies with all the advantages of 24/7,verSeq and so on and so forth, multi-language, multi-everything.

So I think a price of $50 for a virtual AI employee is really on the cheap side rather. But we will see how the market is developing. It's really everything is at the beginning. We see how the dynamics go, how we start offering what the adoption of the market is, what the competitors are doing. But for sure, everyone is now on the brink of having new product lines with additional revenue coming in.

So it's not subsidized and it's less packaged within other products. And then for the AI factory question, how you finance it, I mean, for such a huge AI factory in the full scale will run roughly $4 billion to $5 billion. That's, of course, a very, very substantial investment. So you have to deduct the 35% from the government. Then we have HOCHTIEF as a partner and HOCHTIEF is very specialized in building data centers and running data centers on behalf of others.

So it will probably take care of all the shell, which is EUR 1.5 billion by its own. And then the rest we will split in the consortium. We're not the only one. We have partners like CPTIF and others, and we'll see how we finance it. There's like infrastructure funds we could use. So in the end, we're not planning on having a huge amount of CapEx for this project. But the clear -- the financing strategy is not made up yet because we don't even know how the structure with the government should look like or could look like. So this is all work in progress. But I think it's pretty clear that we don't want to invest a huge amount of money. We build this up in a very sensible way.

Yes. Let me maybe add on this. As Achim already mentioned throughout the webcast, Obviously, we are looking into the business case now trying to get our heads around the economic model in discussions with the European Commission, et cetera, trying to understand how it will work out. Overall, I think we are -- in terms of that, if we just look at our deleveraging profile, so we do have a sensible amount of financing available if needed. As Achim mentioned as well before, it depends as well how many partners are in the consortium, et cetera. But we think we are well positioned, and we see a strong support from the banks we are working with.

Next question comes from Dhruv Shah.

I have 3, if that's okay. First, just starting with cloud. So yes, cloud growth was muted again this quarter. I mean IT ZB revenues should boost that in Q2. But excluding that, in terms of the underlying growth, do you expect that to accelerate midterm? So you've talked a bit about digital sovereignty as a theme. But perhaps could you be a bit more granular and share some details on how you'll transform that thematic tailwind into more tangible financial growth, both for the top line and for profitability.

So that's on cloud. And second is on WEP&P, the core business. Customer acquisition was strong for another quarter, but ARPU growth slowed. In terms of the mid-single-digit price rises in that segment, how have they landed so far? Are you seeing any impact on NPS or volumes? And finally, the third question is a bit more broad in terms of financials, but the federal cabinet in Germany has recently approved 30% accelerated depreciation now through to the end of 2027. So just wondering if there are any early indications of whether the maintenance and cloud investments by IONOS are likely to qualify for this and what the potential uplift to earnings could be?

Maybe let me start with the cloud. So yes, we do expect the growth in cloud. So first of all, the Intelet now is live, so they start using the cloud and cloud is consumption-based in the end. So that will drive the revenue -- and the other thing is, like I already said, the pipeline is filling because there's a lot of interest now. So people -- a lot of larger companies started talking to us about what could you offer? What's sovereigy in your case? And we can be -- I think we are more survey than everybody else in Europe because the full stack is developed by us. It's either open source or our own software.

Engineers are sitting here in Berlin. So this is more European, I think, than it gets or nothing that gets more European than what we do, let's phrase it that way. And so now it's kind of the discovery phase, large companies who are usually with the hyperscalers now look around and see, okay, these are alternatives, what can you offer? What other workloads we could transition. And now we're starting the sales cycle, in some case, means like testing something, looking if the system works well in our environment and so on and so forth.

So we expect these leads which are coming in right now to materialize over the next 9 to 12 months. which is typically a cycle where from thinking, doing the test, looking at the transition project, moving some workloads, starting to generate noteworthy revenue. And from a profitability, I think we're still keeping it roughly breakeven. That's what we did in the past. And I think right now is not the best time to -- or would be not the greatest time for trying to pull out a lot of margin because now it's developing. That market is now developing, and we should not underinvest. And I think the investment is what we earn, not more and not less. We don't cross-finance it heavily or anything. And I think that's the way to go forward.

Exactly. Let me comment on the web presence and productivity with the ARPU growth in Q2. I think there are several things to keep in mind. So first of all, as mentioned during the webcast, Q1 is usually extremely strong, whilst Q2, therefore, looks a bit odd. So let's keep that in mind. And obviously, just given how ARPU is calculated when a lot of new customers are coming in, which are usually on a lower ARPU as we have 6 to 12 months starting discounts and the ARPU of the customer is building up over time, that is partially diluting ARPU growth.

So I would more look into how ARPU is developing overall. And as I said, it's growing roughly 4% year-over-year, which we believe is strong. Price adjustment initiatives are still rolling in. So we would see them as well stronger going forward. So then in terms of NPS, yes, we do see a slight downtick in NPS, not unexpected. And we are confident to get it back to levels which we had before. And keep in mind, it's only very slow. But obviously, you will not avoid that some customers might be unhappy with NPS.

And this is reflected in the NPS. But it's not to an unexpected amount, and it's not like we do not get it back up. So we are still confident and around the churn levels as well, which are in line with expectations. So all fine, I would say. And could you please repeat your third question, please?

Yes, of course. That's very, very helpful in terms of color. But the third is just on the accelerated depreciation in Germany, the 70% accelerated depreciation through to the end of 2027. So just wondering if you had any early indications of whether the CapEx at IONOS could qualify for that program and whether there's any rough indications of potential uplift to earnings as a result of this?

The next question comes from Sarah Roberts, Barclays.

Just 3 from me, if that's okay. So firstly, just as a follow-up, your cloud guidance of 10% year-on-year growth implies a 2H growth rate of about 13%. Just want to understand how much of that is coming from the IT Z fund contract and how much of that is coming from kind of underlying growth -- underlying cloud drivers? And then as a follow-on, can you talk through what you're seeing in terms of cloud demand in your underlying kind of core SMB cohort? It seems that the enterprise growth drivers are pretty strong into the midterm from data sovereign.

But I think in the past, you've spoken about SMBs being a little bit more hesitant, particularly in light of the fact that macro is a bit uncertain. Is that still the case? Any color you can add here would be great. And secondly, my question is on the adjusted EBITDA upgrade about $530 million versus EUR 520 million previously. Just want to understand in a little bit more detail what are actually the main drivers of this coming through? Is it simply a factor of cloud expectations are lower and that comes with lower margins? So is this a mix effect?

Or is there kind of underlying cost improvements that we should be aware of? And then thirdly, there's been a bit of noise with the kind of rise of low and no-code AI web builders that have been rapidly gaining user base over recent months. Just wanted to understand whether you're seeing any changes in the competitive environment? And how are you thinking about the potential threat from these kind of new AI start-ups that are coming through over time?

Let me start with the cloud IT and the uptick over the next quarters. So a large portion will be driven by TSightBund. As we mentioned before, we do see a strong demand, especially as well from the SMBs. But let me phrase it that way. We are more cautious now into turning it into revenue as we see from the past that those projects can take longer. And even if those customers are locked in into cloud, it takes longer to develop the revenue over time, given their capabilities from smaller customer side in order to build up their own cloud. So that takes a little bit longer. But the -- especially on the smaller side of customers, we really see strong demand coming in. and see a lot of new customers joining us in Cloud Solutions. In terms of the adjusted EBITDA upgrade, this is mainly a driver of cost discipline where we do see a strong development driven by several initiatives, which we internally started. Obviously, as well the very strong development of EdTech in the first quarter at its bits, still being very profitable. So overall, it's more cost improvements rather than any -- and the operational leverage in the business, I would say, and we are growing well. So nothing unexpected, I would say, if you look into the business model and how strong it is from an operational leverage perspective. Last question, I think...

Maybe also for the SMB and the cloud, I think we doubled the inflow per quarter from last year for small medium businesses. But of course, ARPU is lower and they need a little more help, but that's exactly what we are very good in compared to the hyperscalers. We have very much closer ties to small, medium businesses, better support levels for them and so on. So this is a valuable customer group now picking up substantially.

So for the AI, low code, no code, loggables and these kind of companies, actually, our big friends because a lot of the agents we're building, lots of the AI features we're building, we're using or we're partnering with smaller companies who have great ideas who have already started with the product. So we don't have to develop everything ourselves. So I don't see them as competition. Of course, they are in some ways, but they tend to line up with us. Why? Because we have a huge customer base. We have support, we have billing.

We have -- we can do mass market. We can do support millions of customers, and they have just a product idea. So from having a product idea and maybe a prototype on a technical side to come up to scale and have 6.5 million base customers to talk directly to and such a marketing machine and brand machine that we have, that's very appealing to them. So I'm very happy for all the small customers or small start-ups and smaller companies with good ideas coming to us.

And we -- I think we're working with like roughly 20 different companies together right now to see what are the products they offer and how we can integrate them in the next 6 to 12 months. And basically, every week, there's 1 more or 2 more. So we don't see them as a threat. We see them as as an enabler for us to be even faster with more agents and more AI features to come to the market sooner.

Our next question comes from Stéphane Beyazian from ODDO BHF.

Yes. I've got a couple, if that's possible. Let me start with the AI gigafactories. First, if I understand well, you target the whole package across Europe. But would it be fair to assume that you could be only selected for one factory, for instance, at a cost of EUR 1 billion. Then you also mentioned that you need guarantees on long-term demand, but how could you be guaranteed that?

And also what makes you confident that you can be successful in AI cloud? I guess my question there is how close that business is to your current cloud solutions business? And I've got also another question on ad tech revenues. I was just wondering if you already see the signs of lower activity or if the visibility is so low in that division that actually you may end up surprised positively again as much as what you did in the first half.

Okay. For the AI Gigafactory, the European Common wants to support 5 -- you're talking about 4 to 5, but I think it's going to be 5 different AI gigafactories. And each of these gigafactories is around EUR 4 billion to 5 billion. So this is a huge project across Europe. And I'm pretty sure there will be 1, maybe even 2 of these gigafactories in Germany. There will be, for sure, one in France. There probably will be one in Spain.

So that's what the idea of the European Common is to really booster or foster Europe and give some help for companies like us to establish a huge European AI cloud market. So we are applying only for one. We're not doing it across Europe. We only apply for one in Germany because we think that's the -- it's our strongest position here, our home turf. I know lots of politicians. So I think we are most suited to win the German pitch instead of trying to do it in Spain, where we also have companies and stuff.

But I think Germany is the most obvious ones for us. And you're talking about the sales guarantees. Of course, we don't get sales guarantees from the market, but we can get sales guarantees from public sector. And that's part of the initial idea of the EU to say, okay, we want to also -- we want to subsidize 35%, but we also want to guarantee a certain amount of workloads. But this is all part of the package being worked out right now to see, okay, how much will they take off the resources. For example, if you have 50,000 GPU cards, will there be a base customer or anchor customer for like 20,000 of these GPUs for 5 years.

So that would be nice because it's much easier to calculate on that level. And then it really fits very well in what we're doing because we are already selling AI cards, GPUs and services on top of these cards, especially on all with the new AI agents and all the products coming along, all of them need our cloud services and all of them need our AI services.

So it's basically that we would have anyways, we would not build these huge data centers at once if we wouldn't have the load, but we would gradually walk into it anyways. But now with the subsidize or the possible subsidize of the EU, it would make much more sense or it could make much more sense to now engage in this project. And that's why we're looking into it and find out what the requirements in the end are and if it's -- it's suitable for us.

Yes. And let me comment on the AdTech. So as I mentioned before, AFD is definitely on a lower trajectory by now with RSOC still being optimized from both sides, from the Google side, but as well from our side, from the market side, so the provider -- the platform providers. So there's a lot of optimizations in the products going on. So overall, as you have already seen on the slide, we expect revenues to be slower in the second half of the year than it was in the first half. I don't think we'll -- yes, that's the current outlook, what we are currently seeing in the market and how the AFD business is currently developing with a lot of, as mentioned, optimization ongoing in the ROC product.

Our next question comes from Gustav Froberg, Berenberg.

Three short ones from me. Firstly, on the cloud as well. I mean, growth is slowing. You mentioned it a little bit that you are not thinking about cutting back CapEx, incremental OpEx, et cetera. But would you consider reinvesting it at higher ROI levels elsewhere or conversely doubling down to reaccelerate any growth?

I'd be curious to hear about CapEx and OpEx in cloud. Then on the data center strategy for cloud solutions more broadly, I'm just curious about an update on your footprint there and what the pipeline looks like in terms of your actual data centers for the next 12 to 24 months and whether or not we'll see any step changes in CapEx? And then last one on AI. Could you tell us a little bit more about the uptake of AI solutions that you have already rolled out to some of your products and how you see this trending? So what level of customer penetration should we expect for AI going forward?

So let me start, and Achim, please -- in terms of cloud solutions. So we think with investing what we earn, we are well positioned to drive the future growth as well covering the demand, which is now stronger than it was before. And as well, we believe in terms of data center capacity, we are well set up.

Yes, I can take this. I mean we -- we operate like 32 different data centers right now and 11 of them are our own. We just built one in the U.K. 2 years ago, went operational, which still has lots of capacity. We built this in different steps. And for the cloud business and stuff, I think we are pretty fine for the next 2 to 3 years from the capacity management, there's nothing to expect like building a new huge data center or anything else. The AI project, the AI gigafactory project is different.

But from the natural way going forward, there's nothing to expect really. And then uptick in AI solutions, I mean, the whole AI agent thing is coming to market soon. So there is no value numbers right now. But for the core products where we also have AI integrated, we see, for example, in the website builder product, there's -- I don't know the number from my heart, but I think 60% of the customers are using the AI version already or you can have both ways. You can do it manually like in the old days, which are not so old, but then you can also do the AI, you can choose and you can switch between.

And we see like 60% already using the AI approach to create the website. But this is not an additional product. It's just an enhancement of the website building software we have. So it's a bit -- and then it's a lot of other projects where we have AI integrated. In many ways, it's part of the base feature and then something on top. So it's a bit difficult to come up, and I think we don't really report these numbers, how much of the revenue is already AI and try to split everything in all the product lines.

I think we are not -- it's pretty hard because it's integrated in most of our product lines, to be honest. So it's more or less seamlessly integrated. But from the usage, I can tell you, of course, I mean, I guess every one of yourself makes this experience using AI more and more every day, even if it's only ChatGPT for writing a text or something. But there's no way back. usage is increasing every month in all the different product lines, all the AI features.

First, because they're getting better, more feature-rich and the content is getting better, what the AI generates. So the quality is improving every quarter. And then people are getting more and more accused to using the AI support. So there's only way forward. It's only going to be more. And at some time, we might release separate numbers for AI usage or revenues, but we don't do this today.

Our next question comes from Nizla Naizer, Deutsche Bank.

I have 2 questions from my end. The first is maybe a bit of a combined one related to the AI topic earlier. A, could you remind us what's the investment from INOS' end to deploy these agents? You mentioned that you're working with several partners. So is the potential revenue that you get from an incremental step-up of this revenue high margin or low margin compared to your typical WP&P margin? Some color there would be great.

And linked to that, maybe when you look at your leverage where it is, would you even consider inorganic opportunities where you acquire certain partners? How are you thinking about the future M&A strategy with this sort of opportunity in mind? That would be question one. And question two, 70,000 net adds in Q2 was a lot than we expected and quite impressive in our view. Where are these customers coming from? Are there certain geographies that are doing better than others? Like any color on maybe how the U.S. is also performing linked to that? And how should we think of growth in the next 2 quarters on the customer base, which I guess, is important for the long-term story?

The AI costs and margins, I think the margins are going to be huge. Typically, the AI costs are low because it's only inference services. So training a large language model or training a big model is very compute-intensive. So it's very costly. But using the ready-made model with the rates already calculated, just to the inference. So running a query through that model is much cheaper and does not take a lot of CPU resources for a simple question or for a daily task. So we don't see that there is going to be a huge cost and more of the services.

And if you talk about EUR 20 to EUR 50 per agent, there will be a huge margin, much higher probability than everything we've seen so far in different product lines because that's hardly any cost associated with it. And so with the partners, you said inorganic opportunities, of course, there are. But we're not -- the first step is not like going out now and trying to buy a lot of small start-ups. The idea is partner with them, see what works, and then we can still do the next step. We can either -- we program the whole thing because we would have the capabilities. But we really want to find out what the market is expecting or accepting what are the use cases now, what are the adoption rate, what is the gate product, just product development right now still.

And once we are on a more clear road map, we can think of is there one of the partners which wants to sell HIselv we can acquire a stake. There's lots of opportunities. And especially if you're one of the high or the main partners of these start-ups, which is our intention, being one of the largest customers of them, we have tons of opportunities. That's what we did in the past as well in some cases. So yes, there is organic opportunities. And then the 70,000 customers, you want to answer, Britta?

Yes. So as we already mentioned throughout the webcast, the Q2 numbers haven't been an outlier. So we see continued strong customers joining us. But keep in mind, Q3 might be falling a little bit behind due to the seasonality, which we are usually seeing and then a stronger Q4. But overall, we aim to continue the growth, which we are currently seeing in customers. And I think then you asked around geographic split or something, if I'm not mistaken.

So we do see the U.S. being relatively strong, but as well Germany and the U.K. Currently, Southern Europe is a little bit behind. However, this is nothing which we haven't seen before. The countries fluctuate a little bit. We are investing our marketing spend based on an ROI, so CLTV over CAC. So countries might fluctuate how we -- where we do see the best ROI coming in. So overall, broadly, I would say, broadly in line, most of the countries with U.S. particularly strong and Germany and the U.K. as well for the first half.

Ladies and gentlemen, that was the last question, and this concludes our Q&A session. I would now like to turn the conference back over to Stephan Gramkow for the closing remarks.

Yes. Thank you, operator, and thank you all for joining today's call. Please feel free to reach out with any follow-up questions you might have. Have a great day. Stay safe, and goodbye.