NFON AG (NFN) Earnings Call Transcript & Summary

Welcome to today's earnings call of NFON for the financial year 2024. My name is Friederike Thyssen. I'm VP, Investor Relations and Sustainability, and I will be your host for this session, which is being conducted in collaboration with NuWays. Thank you for joining us this morning. We are pleased to give you an update on the company's development over the past year and to provide deeper insights into our strategic direction going forward. Today's presentation will be led by our CEO and CFO, Patrik Heider, who will walk you through the operational, strategic and financial developments of 2024. As usual, we published our annual statement and the full Investor Relations -- investors presentation earlier this morning. Both are available on the NFON website under Investor Relations. The presentation will be structured as follows: First, financial and business highlights; then the financials 2024, the business update, guidance and then the Q&A session. Please note that the questions can only be asked live during the Q&A session at the end of the presentation. [Operator Instructions] Thank you for understanding, and thank you in advance for your contribution. And with that, I'll hand over to Patrik to begin the presentation. Over to you, Pat.

Yes. Thank you, Friederike. Good morning, everyone, also from my side, and warm welcome to our earnings call for the financial year 2024. In 2024, we made substantial progress in sharpening our long-term strategic growth ambitions. We strengthened our leadership team with key appointments in the technology, AI and sales area. Andreas Wesselmann joined our team as CTO and Member of the Executive Board; Jana Richter as EVP, AI and Innovation; and Alexander Wettjen as EVP, Sales and Partner Management. The legal merger with Deutsche Telefon Standard was an important structural step. It allowed us to simplify the organizational setup and realizing significant efficiencies in the future. In 2025, we are migrating all DTS customers to the NFON platform. At the same time, we developed our strategy NFON Next 2027. It provides a clear direction for sustainable profitable growth with a focus on operational scalability, improved margins and targeted innovations. To make it short, voice combined with a strong artificial intelligence is the future of business communications. Our starting point is excellent. Within this strategy, we already started full execution with the acquisition of botario, a German-based expert in AI. The year 2024 marked a clear step forward in strategic development of our company, same time we achieved significant progress in our financial performance as reflected in our financial results. Let me now take a closer look on the key financial indicators behind this progress. Recurring revenue grew by 5.2% compared to previous year and continues to be a reliable foundation of our model, now representing 92.9% of total revenue. Total revenue increased by 6.1%, driven by selective growth in Project & Solution revenues, especially in areas like premium solutions and AI-led service components. As mentioned, adjusted EBITDA came in at EUR 12.3 million, significantly above the previous year and in line with the upper end of the guidance. These results confirm our transformation is working, we are delivering profitable growth, and we have laid a strong foundation for the next phase on the NFON Next 2027. On Slide 7, you can see total revenue increased by 6.1% since its inclusion to the consolidated financial statements of NFON AG, botario acquired in August 2024 contributed EUR 1.9 million and accounted for 38% of total revenue growth. Recurring revenue continues to be a core strength, now representing about 93% of total revenue. This share is driven by both the acquisition of new customers and the upsell of existing customers, including our premium solutions. In the financial year 2024, nonrecurring revenue rose significantly by 19.2% to EUR 6.2 million, accounting for 7.1% of total revenue. This positive development was driven in particular by project-related revenue resulting from the integration of botario. Botario increasingly contributes to revenue and reflects the successful expansion of NFON's portfolio with AI-based business communication solutions. The total number of seats increased moderately by 1.4% year-on-year, accompanied by a consistently low churn rate of 0.5%, highlighting strong customer retention. At the same time, the blended ARPU improved by 1.9% to EUR 9.98 (sic) [EUR 9.89 ], reflecting the ongoing upselling of premium solutions and the growing share of higher value customers. Let's now take a look on the cost structure and gross margin performance. Our gross margin improved once again and now stands at 85.3% compared to 84.2% last year. This increase reflects the growing share of high-margin recurring revenues as well as the contribution of botario's AI-driven project business, which requires significantly fewer external resources. Cost of materials decreased slightly to EUR 12.9 million, even in the face of revenue growth. This demonstrates the scalability and the efficiency of our business model. The material cost ratio dropped to 14.7%, down from 15.8% in 2023, a clear result of targeted efficiency measures and strong procurement discipline. When it comes to personnel, our approach is equally disciplined. We reduced our average number of employees by nearly 7% to 422 FTEs, while at the same time, increasing our productivity and strengthening our innovation capabilities. This was made possible through structural optimization and leaner processes. Wages and salaries decreased to EUR 27.8 million, while total personnel expenses slightly increased due to lower capitalized internal services. We also had one-off effects, including the reorganization of the management team, the integration of Deutsche Telefon Standard and the expenses related to our employee stock option program. Adjusted personnel expenses totaled EUR 34.8 million, leading to an improved personalized cost ratio of 39.8% compared to 40.9% last year. This brings me to our profitability, and I'm proud to say our EBITDA performance in 2024 speaks for itself. We achieved an adjusted EBITDA of EUR 12.3 million, that's an increase of 48% year-on-year. This significant improvement is a direct result of our consistent focus on profitable growth, cost discipline and consistent optimization of our product and revenue mix. And importantly, we did not just meet our guidance. We slightly overperformed the upper end of the communicated range. This clearly demonstrates the scalability of our business model and underlines our ability to convert operational efficiency into financial success. Now turning to cash flow. Free cash flow increased to EUR 6.4 million, up from EUR 1 million in 2023. This is nearly sevenfold increase and highlights our enhanced earnings quality and cash discipline. Operating cash flow reached EUR 9.4 million, supported by improved profitability, efficient capital deployment and a high recurring revenue base. We have shown that our business model not only scales but convert performance into real financial strength. So with strong profitability and significantly improved free cash flow, we have not only proven the resilience of our business model, we are also in a good way to create the financial headroom needed to invest into our future. Let's now shift from financials to strategy and talk about where we are heading. The impact statement captures the sense of who we are and what we stand for. We rethink business communication, inspiring and connecting people to grow together sustainably. It's more than just the vision. It's a strategic commitment. We believe communication is not just about technology, it's about people, it's about relationships, it's about progress. This statement reflects our ambition to lead, not follow, to innovate and grow sustainably. We rethink business communication by driving AI-powered innovation and continuously evolving our product portfolio. We inspire and connect people by enabling seamless collaboration across organizations, markets and boarders. We grow together sustainably by delivering long-term value to our customers, our partners and the wider society. As we execute on the NFON Next 2027, this guiding principle will shape every initiative, every product and every customer in the age. It defines what success looks like for and how we want to be recognized as a company. As we look to the future, one thing is clear. With NFON Next 2027, we are laying the foundation for sustainable, profitable growth. But how exactly do we achieve that? The answer lies in 4 strategic pillars that drive our transformation, and they are all captured in this chart. First, we focus on our core. We continuously enhance to stability, functionality, scalability and integration of our cloud platform so that we retain the go-to provider for businesses of all sizes. Second, we accelerate through AI. By integrating advanced AI-driven features, we are redefining the user experience in business communication, making it more intuitive, proactive and efficient. AI is not just a feature. It's a driver for differentiation and value. Third, we put customer and partner centricity at the center. We listen, we adapt and we evolve with our ecosystem. Our product development, our support models, our go-to-market approach, all are designed around the needs of our partners and our customers. Fourth, we strive for operational excellence. By improving efficiency, automation and internal processes, we are creating a scalable high quality solutions while maintaining agility and speed. This is the backbone of our margin expansion in the middle of all this ultimate ambition to deliver sustainable, profitable growth faster and stronger than the competition. And now that we have established the strategic pillars of our transformation, let me show how we're translating this strategy into action. One thing is clear. To lead the market in AI-driven business communication, we need more than just a vision, we need structure, capability and execution power. And that's exactly what we have built with our AI and innovation organization. At NFON, we are closing the gap between innovation and real-world application by integrating AI directly into core communication solutions. From intelligent automation to enhanced customer interaction, we are equipping businesses with the tools they need to stay ahead the curve. To drive this ambition, we established a dedicated setup. We have evolved our AI competence center into a fully integrated organization through the strategic acquisition of botario. It allows us to speed up every phase of innovation cycle, from idea and design to data science to real implementation. Our focus is not just on research. It's on delivering impact, impact for our customers, value for our partners, and real measurable progress in business communication works in the future. We have already explored NFON's comprehensive business communication speed earlier in this presentation and how our solution delivers seamless scalable connectivity for teams of all sizes. But now let's take a closer look on how artificial intelligence is transforming these solutions into something even more powerful, more efficient, more automated and more user friendly. AI is no longer just a feature. It's becoming the driving force behind the smarter, faster and more proactive ways of growing. Starting with the Business Telephony. This remains our strong foundation, now enhanced with AI-powered features like, for example, voice mail transcription. This feature converts voice messages into structured text, improves clarity and shortens response times, a real productivity boost, especially in fast-paced environment. We are also rolling out voice bots, currently in use cases like medical practices where they handle the patient intake, appointment booking and intelligent routine. This is a game changer for small teams with high call volumes. Moving to the Intelligent Assistant. As an example for our portfolio there, we built Nia, stands for NFON intelligence assistant. Nia is our AI-powered chatbot designed to support smarter, faster and more efficient communication. It enables natural conversational interactions, whether for customer service, internal processes or automated guidance. We see Nia as a key building block for AI-driven service experiences. And then Customer Engagement, our Contact Center. Here, we already have embedded AI since last year. We offer intent-based routing, agent assistance and real-time analytics, helping businesses respond more intelligent and efficient. This is where AI turns the reactive support into proactive service. And tying it all together, our NFON Marketplace. It ensures that APIs, integration and partners work in sync. So customers can scale quickly without fringe. With AI at the core of our product evolution, we are not just meeting expectations. We are redefining what business communication can do. Before we move into the guidance, let's take a moment to talk about what's driving us in 2025 and beyond. Our NFON Next 2027 strategy has a clear objective, to lead the market in AI-powered intelligent business communication. That's why our business priorities in 2025 are fully aligned with our long-term ambition. Each of these priorities is a lever helping us to scale, simplify or lead. We focus on long-term profitability by delivering on our margin ambition and strengthen the foundation for sustainable value creation. We target on core markets. Germany, Austria and the U.K. remain key growth engines for us where we can leverage our position most effectively. We deepen relationships with customers and partners, because loyalty, satisfaction and seamless integration are key to lifetime value and retention. We unlock commercial excellence by strengthening our go-to-market execution especially in growth segments and high-value customers. We simplify our operating model by sharpening our cross-functional collaboration and driving efficiency across the organization. And we built a future-ready organization, agile, empowered and ready to lead in a highly dynamic market environment. Finally, we fully harness the power of AI by combining intelligent automation with core optimization to create smart, scalable communication solutions. They are just not part of our strategy, they are the foundation. Data and AI drive our innovation, our efficiency and our customer value. They enable us to scale faster, make smarter decisions and differentiate us where it matters most. In a rapidly evolving market, they are not optional, they are essential. Around this core, we have built financial strength now, operational scale, customer proximity and agility to ensure we always stay one step ahead. But just as important, the technology is our identity. We are a European provider by conviction and by design. Our solutions are developed, hosted and managed in Europe, and we are just proud of that. In a world where digital sovereignty, data protection and trust are increasingly relevant, our European routes are not just a feature, they are a competitive advantage. They position us as a trusted partner for businesses and value transparency, compliance and long-term relations. These are the pillars that support our ambition to always stay ahead. This sets the stage for our guidance and for what we aim to achieve in 2025. Let's take a look on that. Looking ahead to 2025, we are setting ambition targets. We expect revenue growth in the range of 8% to 10%, and adjusted EBITDA of EUR 13.5 million to EUR 15.5 million. In other words, 2024 was a year of transformation. 2025 will be a year of starting the acceleration of growth. Let's now move into the Q&A. We look forward to your questions.

Thank you very much, Patrik, for the presentation and for the detailed insight. [Operator Instructions] Knut Woller. Knut? I will then go to Gustav.

Gustav from Berenberg. Just 2 questions from me. Firstly, on competition. How has the landscape changed? And how does your offering compare against the likes of Gamma Communications, which has made a pretty sizable acquisition in the German market. Could you talk a little bit about competition? And then a second question on guidance. Could you tell us a little bit more about how you see the phasing for the year if you expect stronger growth in the first half and slower growth in the second half or the other way around? And what kind of visibility you do have on top line growth for the year?

Yes. First of all, thank you very much for the question, Gustav. And we need to distinguish between 2 different areas of competition. So first of all, the pure AI players are in strong competition to botario. Those are companies like Cognigy, especially for the German market. And then we see the traditional UCaaS players moving into the same direction as we do. And here, we are clearly ahead of the competition. So no one can really offer something like we do at the moment with the AI features. Play style might be even a bit into this direction moving, but the quality of their services is not as strong as we have, and this is why we did also the acquisition of botario to be clearly faster and use this headroom and those are the main areas. We don't see Gamma coming to the German market, for example, acquiring also STARFACE and Placetel, is mainly into really the customer areas like intuitive quartile PBX business and not into the AI features. So this is why we want to use this headroom and this opportunity. And for the revenue phasing, we definitely see to the second half of the year. Traditionally, it was -- at NFON always like this. So we see here definitely, and the visibility is quite good, and I will have a discussion in the month, I think, when we end with quarter 1, and I will keep you informed about the details then. Hope that answers the question. Thank you.

Then, Ross Jobber.

Ross Jobber From Edison Group. I'm interested in how you expect the shape of the group to change over the medium term as you pursue this strategy and for next and beyond? And 3 particular areas where I'm interested in. First of all, what do you think is going to happen to your R&D, to your investment requirement as a percentage of your revenues as you move forward and you move further into the world of AI? So that's number one. Number two, how do you think your channel split might change? Do you see yourself having a greater, lesser or the same proportion of revenues from the channel as opposed to, let's say, direct to enterprise? And thirdly, how do you -- do you anticipate any change in your customer size as you get in -- as you're pioneering this AI work, i.e., the mix between your large and medium and smaller-sized customers? So there's 3 ways, if you can think of others is great, but just 3 ways in which you might describe to us how you anticipate the group changing over time? And my second question, I'd be interested if you could highlight what you believe are the key catalysts for accelerating the penetration of cloud business telephony in the German market. The German market is very exciting. One of the reasons being that it is relatively underpenetrated. And I wonder if you could say a little about what -- for you are the tops of catalysts for driving that penetration faster?

Yes. Thank you, first of all, Ross, for the questions. Coming to the first question, obviously, a very interesting one. I could talk for half an hour or maybe, but I'll try to make it short. What we're discussing is internally with NFON Next 2027 is clearly a dual transformation strategy. Why we did that all and moving into the AI space? Because we do believe that cloud PBX business -- pure cloud PBX players will move into a commodity, ARPUs are becoming under pressure in the future, and growth would have gone not into the right direction. It would have stayed in the single mid-digit area, but not more. This is why we have an ambition to really grow the business double digit. This is why we go into this new segment of AI, embedding that one, because we clearly believe that we can go back to double-digit growth rates into this segment, and while integrating that into the core business that's even more key to our future strategy. And seeing 2 transformation areas, I do see that we will, as I already tried to present in my presentation, we will see definitely not as strong growth in the core business, but focusing on higher efficiency, meaning profitability, here I definitely do see that margins above the 20% level is clearly appropriate. In this area of AI, we definitely see a growth momentum and into a growth momentum, you definitely want to invest also. So I don't see now margins moving above the 20% level in the next 2 or 3 years because we really want to gain the market attraction. We really want to gain [ future ] volumes. And then afterwards, all in all, definitely, when we see, let's say, market growth between 13% and 15%, we definitely can imagine also to move as a group higher than 20%. That's the idea behind. We have an investment area and we have a profitability area, and we try to keep them both aligned. For the channel and for the customer size, that's a very interesting question and especially coming to Germany. We do see a consolidation in the channel as well. We also see that not every of our partners can really deliver and sell DAI products. So we're really focusing on less on a couple of those. We really try to make it happen with 10 partners at the moment, evaluate partners. So there will be a strong consolidation in the market as well. We do see a bigger move for us and an opportunity. That was always a strategic ambition when we thought about to acquire botario. Botario traditionally is in the large enterprise segment. NFON is in the small enterprise segment, with an average customer size of 17 users. And that brings me to the synergies we have. With these AI features from botario, definitely we can bring the overall portfolio to the large enterprise segments as well. And that's what we are working on. Those are definitely more interesting for us in our NFON Next 2027 strategy. Also, we clearly make a differentiation between smaller business and large enterprise business. That was also -- yes. So all in all, as we have the financial ambition to grow EBITDA stronger than revenue and revenue stronger than the market growth, we want to do the value creation in the next 3 years with this. And obviously, the year end for Next and the AI is helping us. Hopefully, this answers your questions. But we can have also different -- separate discussions. The key catalyst for the German market. I mean the German market, you are right. Definitely, it's the lowest penetration. And as in every software industry, we do see also here only 17 seats are in the cloud -- 17% of the potential are in the cloud. But there are different, let's say, opportunities and catalysts. So first of all, Germans needs to understand what the cloud is, that's a different story, maybe. They also need to be ready to move away from things like fax, that's what still in the German market, we do see as very important for sending a fax. So that overall, that spirit is now obviously also accelerated when you put in the forefront in the main augmentation efficiency. The Germans, especially when it comes to public administrations, we are also working in public administrations. We need to work on the efficiency. Regaining back the efficiency, and here, obviously, modern tools with AI features really have been to get that efficiency. So this is the main thing we are working on, make AI touchable via the efficiency gains they can achieve, and really use those modern tools. Also, what is very important for the German market, and here, we are definitely having a competitive advantage, all the regulations we are fulfilling. We are ISO certified with ISO certification. And imagine, we are C5 certificate. We all -- are compliant with the GDPR and all the data protection stuff, and that is really a competitive advantage. This is what, for example, other players like Gamma and American players can't really offer. And also the whole hosting area, our data centers are working and operated in Germany, and this is also a competitive advantage for the German market. Those are the key catalysts for the German market.

Okay, do we have other questions? Yes, Stéphane.

Just two questions on my side. The first one is, what can you say about big telecoms in the German market? What sort of competition they are doing against you? Are they more active in the cloud PBX? And I'm more talking about the cloud PBX segment, which remains as of today, the bulk of your revenues. Are they more focused on trying to address the SMEs or still very much focused on the larger, let's say, segment of the market? And I've got a second question, but perhaps it's something we can discuss offline. There's something I was missing in the increase in the net debt because your net cash -- sorry, your cash position is broadly unchanged. Obviously, there is the acquisition of botario, but that's offset by the free cash flow that you've been generated -- generating in 2024. However, I was just wondering whether there is some debt also coming from botario, which potentially was not shown in your cash flow statement. I'm missing a couple of million euros in my calculation.

Yes. First of all, thank you very much, Stéphane, for the question. And for the big telecoms, I want to give a reminder that we are working closely together with the blue chip partners, the big telecoms, so Deutsche Telekom and also 1&1 and Telefónica. Telefónica is traditionally the biggest partner of NFON, and we are selling our product white label, and they are extremely attracted from our AI move as well. They can offer things like chat bot and voice calls as well. So we do see even an acceleration in the partnerships with them. And we have -- around about 30% of our revenue share goes to so-called wholesalers, and those are the Deutsche Telekom, the 1&1 and Telefónica. And they are really attracted, and we even do see an acceleration in this. So that's very interesting, obviously. And here, we are moving forward. For the debt positions, I can announce you and give you the details already. We also -- and I think we communicated last year that we also partially had taken a debt for the financing of botario. This is 5 plus 1, and the 5 plus 1 should be reflected in the report as well. So [ 6 million ] overall. And I can also give you interest that we paid -- the interest we pay in 2025 for those debt is EUR 400,000, the guidance.

Yes. I can see that in the cash flow statement. It's okay, we can discuss offline.

Okay. Ross and Stéphane, you have both still raised your hands. I do not think Stéphane is ready. But Ross, do you have additional question? No, okay. Okay. So thank you for your questions so far. Are there any other questions from your side?

We can have a separate discussion if it doesn't work. But [indiscernible] needs to have a nice chatbot from us.

I think Stéphane and Ross again raised their hands, so I will hand over to Ross again.

One of the things that struck me as you were presenting, is the way in which business telephony -- the worlds of business telephony and perhaps the world of customer experience are merging together. And AI could play quite an important role in not only making business communication more efficient, but actually making it more of an enabler, if you like, of customer experience. Is that something that resonates with you? And if so, are there other elements around the world of business telephony that you think the group could be interested in, in the future?

Yes, absolutely. So it's -- one part is the efficiency part, but it's also the customer satisfaction part. 70% Of the CEOs who are using our tools already, and that means chatbots and voicebots, are saying that the customer satisfaction is increasingly higher. And that's something we want to work as well. I mean, you and I, we may be used, a couple of years ago, the Amazon chatbot, but it was really poor from a quality. But with Open ChatGPT 4.0 and all the evolutions we have, obviously, this is extremely increasing. So everybody is using customer satisfaction and efficiency now. So I fully agree on your statement, and we are already working on this one. Nia, for example, we are using internally already for our company, and we have day by day already 400 transactions. So this is extremely increasing our quality in the internal, let's say, documentation. Our people within NFON are searching everyday, 400 transactions with Nia. And this is something everybody will see in the future also to our customers. And this is something which is also a higher quality and not only for efficiency rates. I fully agree on your statement.

This morning, I did ask Nia, are NFON shares undervalued? And do you know what? It told me to go away and do some research. I fully agree. I asked this so we can have a chat separately. Thank you very much.

Okay, Stéphane. Now you should be able to speak.

Yes. So in 2024, there was a little bit of a reduction, I think, in the minutes -- number of minutes. But the ARPU was up, thanks to some price actions, if I'm not mistaken. I was just wondering, whether for 2025 for the telephony service, what are sort of your expectation in terms of volume and your potential for price actions as well?

Yes, we will come up -- Stéphane, thank you for the question. We will come up with a clearer guidance in our call elements because as I already indicated, not only the seat growth is any more as important for NFON as it was in the history, but it's also this is why we guide also on overall revenues, 8% to 10% and not only on the seat [indiscernible]. So definitely, we will have some pricing impact in the traditional and cloud PBX business, you will see also again the same impact we had in 2024 that you have a slightly reduced voice minutes but then you have a pricing impact, which keeps the ARPU more or less stable. But see already the pricing of botario and the overall opportunities we have, we have a starting price in botario of EUR 1,000 per month in recurring instead of a EUR 10 ARPU in cloud PBX, completely different, and that makes it a little bit more complex. We will keep that very transparent for you. But in the future with AI, obviously, we have a higher pricing power overall for the group. So we came out of a year where we really worked on technical stability of our infrastructure, et cetera, et cetera. So here, the pricing power in traditional cloud PBX remains somehow limited. But in the future, I do see definitely some high pricing powers with delivering AI features into cloud PBX business. So all in all, if you may allow, I will give you more details in a month, but that's a definitely interesting part as well, the pricing. And by the way, we are also hiring a global pricing manager at the moment. And this is why we do this because we do believe that pricing intelligence in the future is key of success as well. So overall, in the AI space, there will be a lot of opportunities while you can move to transaction-based pricing, et cetera, et cetera, et cetera. So this is something we really put an effort into that we really build up at the NFON, the pricing intelligence.

And if I understand correctly, you keep them separated, meaning that you're not bundling botario and the cloud PBX with Cloudya, for instance, for the moment. Botario is always coming on top. And even in the disclosure, I think Botario is more in the nonrecurring revenues so far and not yet included in service revenues.

In general, my answer is yes, but also see, for example, a voicemail transcription embedded into cloud PBX, how would you count that, et cetera, et cetera. So I give you the details in a month. So that's a little bit complex. I think it's obviously the best thing we can do integrating already AI features into cloud PBX. But yes, in general, you're right, we keep the cloud PBX recurring, nonrecurring and we keep also the botario business. We even need to keep it separate because as you know, we are still running under earn-out for end of next year in 2026. But we will keep it also separate in the reporting, yes.

Okay. I will make an exemption for Knut because I think all your line is broken a bit. But he's still on the call. And his question was, looking at your growth guidance, what is driven by your own measures such as AI and the focus on the channel? And what is macro-related? That's the first one. Second one, what impact do you see from STARFACE acquisition by Gamma and wreck from the Mitel insolvency? And the third one, should we expect an improving operating cash flow in 2025?

Yes. Thank you very much, Knut, for the questions. And for the revenue growth, I definitely see that we would remain stable in the cloud PBX business. I would say, yes, 5% to 6% what we achieved already in 2024, and the rest goes to AI. This is something we want to already work on to think about 2024, as I indicated, is a starting point of acceleration, but also -- and now turning to your macroeconomic environment. We also see that Germany is not easy at the moment, I would call it like this. You see other players like big system integrator like [indiscernible] are even shrinking. So we are all waiting in the public sectors. And also, customers are normally following in the private sector for those investments needs to be done. So this is something we do believe that the macroeconomics in Germany will improve, hopefully, in 2026. And they will remain somehow okay-ish in 2025. The second question was the STARFACE acquisition by Gamma. For us, it's not a big thing, to be honest. Obviously, we monitor, we're very cautious. But I need to have also a reminder here, STARFACE is a cloud PBX player, is still on-premise, mainly. And so you need to be careful if you analyze the figures and the purchase price, et cetera. And we don't see them really as a high competitor in the world of cloud PBX, especially not when it comes to AI features. As I said, [indiscernible] is even more interesting here. But we see that we are the first mover into the market with AI features into cloud PBX. And this window, we obviously want to use Mitel. The insolvency, what you heard is nothing to do with us. We don't see any impact here. And the last one, Friederike, help me on...

It was about operating cash flow and if we can expect improving operating cash flows.

Yes, exactly. And I exactly knew that Knut is in the call and will ask the questions. So I am already prepared. We can have an operating cash flow range of 12 million to 13 million this year, free cash flow in the range of 7.5 to 8.5 and the total cash flow in the range of 2.5 to 3.5.

So thank you, again, for your questions so far. I do not see any hands. So if there are questions, please raise your hand now. If not, and that seems to be the case, thank you for your interest and your contribution. I will now hand back over to Patrik for a brief closing statement. And also, happy Easter from my side.

Thank you very much, Friederike. Thank you, everyone for the interesting questions. Thank you very much for my team and also to Nia. We are very positive about the development of our company, and we are looking forward to every interaction we have on the conference call, even on a personal level. And personally, I wish you also a nice Easter period. Thank you very much, everyone.