OVH Groupe S.A. (OVH) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to OVHcloud Q3 FY 2025 Revenue Conference Call. Today's speakers will be Benjamin Revcolevschi, CEO; and Stephanie Besnier, CFO. I will now hand over to OVH management to begin today's conference.

Hello, everyone. I am Benjamin Revcolevschi, CEO of OVHcloud, and I'm very glad to be with you today for our Q3 FY '25 revenue conference call. So let's start with Slide 3 for the key highlights of this quarter. So our performance in Q3 was resilient. We generated EUR 271.9 million in revenue and like-for-like growth of 9.3%, meaning that on a 9-month basis, we generated EUR 807.9 million and grew by 9.9% like-for-like. We have demonstrated quarter after quarter the stickiness of our customers. And even in this context, we had a net revenue retention rate of 104% in Q3, which was underpinned by a solid customer acquisition and also a well-performing FY '25 growth of recently acquired customers. Also during this quarter, we had a strong confirmation that demand for sovereign alternatives has never been more vivid with an acceleration of inquiries for sovereign solutions from customers. So we have an unchanged discipline on costs, a sustained focus on profitability and cash levers. And finally, we confirm all our FY '25 guidance. So let's move now to Slide 4 and our strategic pillars. Indeed, in this rapidly evolving geopolitical environment where we see that public entities and private companies are looking to preserve their strategic economy, I would like to remind you of our vision at OVHcloud and how we answer to our customer needs. Indeed, OVHcloud has succeeded in building up strong core business fundamentals, and we will continue to leverage them to deliver our 2 priorities. First, we are focusing on operational efficiency of our fundamentals to grow our revenue and leverage productivity. This will help us to deliver more predictable and profitable growth. Our second focus is to improve structurally our cash generation, and this is truly critical to our long-term success as it ensures our capacity to continue to invest, but also to innovate. Then on the right of this slide, you can see that we are also strengthening 2 of our future revenue growth upside. First, we'll continue to reinforce our position as a leader in data sovereignty solutions. Strategic autonomy in key sectors such as cloud is becoming critical in Europe. And our customers are looking for alternatives, and we are committed to provide them with trusted cloud solutions. Our second upside is about enhancing our public cloud product offering to answer customers' growing needs. As an example, we continue to strengthen our artificial intelligence solution and also to roll out new products in our 3-AZ regions. These 2 core business fundamentals on the left and these 2 growth upside on the right are the pillars of our vision for OVHcloud to deliver our ambition and our financial targets. So let's move now to the next slide to highlight the business achievements of Q3. First, you see on the product side that we keep rolling out new products, especially in AI. We launched Data Platform, which is a powerful unified solution to manage data and to facilitate our customer's data projects. We also released AI Endpoints, which is a unique API to connect our customers' apps to the best-in-class generated AI models. And we have more than 40 LLM, large language models, that are available today to be directly and easily connected and consumed by our customers. In the middle, you can see that this quarter was also highly dynamic in signing new deals that will ramp up progressively in the coming quarters. For instance, Arquus in the defense sector is a strong illustration of the dynamism in the public sector defense vertical, particularly for sovereign offers. Looking at Visma, which is a leading provider of mission-critical business software is also a good highlight of our capacity to serve larger customers and software editors on our public cloud offerings. And finally, on the right, you can see that we continue to work on adding new data centers, and we will officially launch our first Italian data center in Milan, with offerings available for our customers in the very next week after a year of work in the building. And we have rolled out our public cloud offerings also in our Paris 3-AZ region, which was long awaited by our customers. But let's now have a look at our performance by segment, starting on Slide 6 with Private Cloud. So when we look at Private Cloud, which includes, as you know, Bare Metal Cloud and Hosted Private Cloud, in Q3, we delivered EUR 169.3 million in revenue, which represent 62.3% of the group's total revenue, and we achieved a like-for-like growth of 8.6%. On a 9-month basis, we generated EUR 503.5 million in revenue and grew by plus 9.8% like-for-like. During the quarter in Bare Metal, our customers responded to overall macroeconomic deterioration and uncertainty by looking for more entry-range servers. And thanks to the strategic repositioning that we have done on these type of servers, we have had a very successful customer acquisition dynamic, up by plus 25% compared to Q3 last year. And when we look at Hosted Private Cloud, which represents circa 20% of the Private Cloud segment, we had a continued strong demand for sovereign offerings and for our most advanced certification, the SecNumCloud specification and which reached an ARR, annual recurring revenue, of EUR 20 million in Q3, growing by more than 50% year-on-year. And as you know, we successfully passed through price increases to our customers with a limited churn from large accounts. In revenue terms, this was, however, partly offset by the ongoing optimization on the entry-range service. But we have acted. We've launched a new offering, VCF-as-a-Service, to help our customers who are looking for entry-range options on VMware solutions. So all our action plans will bear fruits, and we target an improvement for this segment in the midterm. Let's move now to the next slide about Public Cloud. In Q3 FY '25, the Public Cloud segment reached EUR 53.6 million in revenue, representing 19.7% of the group's total revenue and achieved a like-for-like growth of 17.2%. On a 9-month basis, we delivered EUR 157.4 million in revenue, and we achieved a like-for-like growth of plus 17.3%. As you know in recent years, we have been investing in our product offering, and there's a strong demand for our existing public cloud products driven by artificial intelligence, in particular, such as compute, but also storage and containers, databases. So we continue to grow strongly, and thanks to an improved customer experience and simplified billing, increased availability of these products in all our data centers, we have been able to accelerate customer acquisition by plus 12% versus Q3 last year. And this growth will continue as we continue to work on new features and new regions. We just released Data Platform and AI Endpoints, and we just launched our Paris 3-AZ region that will be replicated in other cities, with Milan, Italy to be the first next open. Now moving to the Web Cloud segment on Slide 8. In Q3 FY '25, the Web Cloud segment reached EUR 49 million in revenue, representing 18% of the group's revenue and grew by 3.8% like-for-like. On the first 9-month basis, the segment reached EUR 147 million and grew by plus 3.2% like-for-like. In Q3, if we take just our web presence offers, meaning excluding our telephony and connectivity legacy subsegment, growth trend is almost twice as much, up plus 6.8%. The growth is mostly driven by strong performance in domain names, driven by market share gains in several European countries. Our action plans on other subsegments are being implemented to boost demand. And I'll now hand over to Stephanie Besnier for a deep dive on the financials.

[Foreign Language], and hello, everyone. I am Stephanie Besnier, CFO of OVHcloud. Thanks for being with us this morning. So as Benjamin said at the beginning, during the third quarter, we managed to deliver the sound and resilient growth of 9.3% like-for-like. This was driven by, first, for the Private Cloud 8.6% like-for-like growth, and this was supported until April by a positive pricing effect following Broadcom's new licensing model for VMware. Second, we had a dynamic Public Cloud segment, up 17.2% like-for-like, almost equivalent to our first 9 months growth. And third, a solid Web Cloud & Other's performance, up 3.8% like-for-like, showing an improvement growth rate of 250 bps compared to Q2. Now moving to next slide, we look at the business dynamics by region. So in France, revenue grew by 7.2% like-for-like in Q3. We had a Public Cloud that delivered a strong like-for-like growth of 16.9%, driven by a good customer acquisition in Q3. Private Cloud increased by 6.6% like-for-like, impacted by macroeconomic uncertainties weighing on tech customers. And representing 29% of the region's business, Web Cloud & Others delivered a slight growth driven by a good domain names dynamics. Let's now look at our international sales, which account for 52% of our revenue. So in the rest of Europe, Europe, excluding France, growth reached 8.1% like-for-like in Q3. In this region, Central and Northern Europe are the most dynamic regions, as shown by the recent signing of a contract with a Nordic company, Visma, a leading specialist in accounting, payroll, invoicing and human resources software. Southern Europe on the other side faced a slowdown, but the momentum should be sustained by the opening of our new data center in Italy, in Milan. In the Rest of the World, the growth kept being strong, with Q3 like-for-like growth of 15.6%. We witnessed accelerating traction in Public Cloud, fueled by the recent rollout of products in the region. And in Private Cloud, we continued to deliver strong double-digit growth in the United States and in APAC, thanks to our development strategy focused on tech companies. So I will now hand over to Benjamin to talk about our outlook.

Thank you, Stephanie. So before we move to the Q&A, let me reconfirm our guidance for full year 2025. After a solid performance in the first 9 months of the year, we fully reconfirm our FY 2025 guidance. We expect FY 2025 like-for-like revenue growth between 9% and 11%. We expect on a full year basis an adjusted EBITDA of circa 40%, thanks to an unchanged operating discipline. In line with the efforts to improve the profitability that we have demonstrated in H1, the group continued its cost discipline efforts, focusing especially on controlling G&A expenses. On CapEx for fiscal year 2025, we anticipate the total CapEx to be between 30% to 34% of our revenue with the split between recurring CapEx expected between 11% to 13% and growth CapEx expected between 19% to 21% of our revenue. And finally, we expect an unlevered free cash flow to be above EUR 25 million on a full year basis, improving compared to FY 2024. We can now open the floor to your questions.

[Operator Instructions] And our first question is from George Webb from Morgan Stanley.

I've got a few questions, please. Firstly, touching on the strategic repositioning on some of the Bare Metal Cloud offerings, could you talk a little bit about whether that's implementation of a newer, lower-priced entry range of servers? Is it a price reduction of the existing range? Or is it something else? And secondly, as we think about the growth factors into the fourth quarter, the base comparables were a bit tougher year-over-year. Should we be expecting growth to remain around Q3 or potentially decelerate slightly? And therefore, should we really be thinking about the full year outcome on growth maybe being towards the lower half of the 9% to 11% range in our view? And then just lastly, bigger picture on the sovereign demand inquiries that you called out, could you talk a little bit about the breadth at which you're seeing that across Europe? Is it mostly France? Or is it quite Pan-Europe?

Okay. Thank you. So I'll let Stephanie answer on the Bare Metal, and I'll take the 2 others. So maybe Stephanie on the Bare Metal.

Yes. Thank you, George, for your question. So indeed, what we did on Bare Metal is we actually did both. We launched a new offer, which is basically in the middle of our second life servers and our existing entry range, so-called Rise, with a server that is positioned around EUR 55 to EUR 60. So it's a very competitive offer that -- for the support on the new offer. And we actually also lowered a little bit on prices for the entry-range server, the Advance range. That's what we usually do. I mean, you're familiar with the model, you know that we manage the life cycle of our servers. So where we come close to the upgrade of one range, we tend to be a bit more aggressive on the prices. But at the end of the day, the ambition is clearly to accelerate and increase the customer acquisition. You saw the number, I mean, compared to the Q3 '24, we grew the number of new customers on our Bare Metal by 25%. So that's precisely the objective of this strategy, and we are also preparing for the upgrade of this entry range existing servers on which we have made some adjustments on the pricing. At the end of the day, the focus remains the same. We are very focused and determined to deliver the objective in terms of profitability. So these measures do not come with the cost on our profitability.

Thanks, Stephanie. Yes. So on your question on Q3, Q4, as you've seen, we pointed out, I think, during our presentation that, indeed, we experienced kind of a slight sequential deceleration in our Private Cloud growth at the end of the quarter. And this was linked to, I'd say first, the infrastructure optimization from some of our tech customers in Europe who were faced these macroeconomics uncertainty. But it's also this mechanical end-of-price contribution from VMware Broadcom, which was expected. So I'd say that, firstly, we had -- sooner in this quarter, we had anticipated this macro headwind landscape if it was -- even if it was not yet visible on the top line in March or April. And this is the reason why we have proactively launched action plans to reposition, as Stephanie just commented, our entry range prices in our Bare Metal segment. That was meant to match the changing needs of our customers in this new macro context and also to boost new customer acquisitions. But I would say that, secondly, also in response to this deceleration trend, we also took actions by launching new Hosted Private Cloud offering, which we call Public VCF-as-a-Service, and this is meant to answer and match our customer needs for private cloud. So it's very important that you understood and you feel that these action plans have been implemented with a clear focus to maintain our profitability trajectory. So indeed, in this, I would say, uncertain macro, we delivered a 9.9% like-for-like growth in the first 9 months of the year. So far, June showed stable trends versus May, which is still, yes, 1 week to go. So all in all, we'll be within our revenue guidance range of 9% to 11%. And that's why we indeed do reconfirm all of our FY '25 financial guidance. And then to your third question on France, Europe and sovereignty, as you know, we have at OVHcloud a clear positioning strategically on sovereignty for many years. We are, I would say, sovereign by design. We are the cloud champion for sovereignty and sustainability. And indeed, in the past 2 months, we have seen and created engagement at C level with companies or institutions, private, public that we didn't meet before. And what's interesting that now these discussions are happening, are ongoing at not only -- so C-level, but now they are moving to sales and tech levels. So that we push on what we can do together. I can tell you that 2/3 of the top, for example, French integrators have approached us, and we discussed in the past week that C-level to engage and to accelerate the dynamics, we're sponsoring at both level. Or another example, I was, 2 months ago, in Strasbourg with the top 100 CIOs, the -- of the biggest, large French companies. And for 2 days, it was all on top of sovereignty and how we move forward to have 2 European champions that respond to that. So of course, it's still early to give you a precise figure, right, for Q4, but I think the demand has significantly strengthened, and the revenues are expected to materialize in the outer quarters, right? So given the -- this is linked to the typical cycle of these projects and customer taking decisions and then migrating to the cloud or switching providers, this takes time. So it's going to take a few more months. But we see the ramp-up of certain contracts. We just mentioned also in this presentation that Arquus, for example, in the defense sector is -- that we negotiate a few months ago, this illustrates that there is a fundamental dynamic and it shows that clearly positions ourselves as a solid and credible choice for sovereign cloud in Europe I hope it answers your questions.

We will now take our next question from Ines Mao from BNP Paribas.

I just have 2 questions. It looks like there was good demand momentum in APAC that will be in the Public Cloud solutions. So are new colocation data centers on the potential roadmap in this region, or elsewhere actually? And my second question is I see that the growth in Rest of the World, which includes the U.S., is slightly decelerating in Q3 and that Bare Metal demand, especially for the higher range solutions, was kind of impacted in the U.S. So is the deceleration in the Rest of the World reflecting the slowdown in the U.S.? Or is demand momentum sustaining there?

Okay. I'll take the first, and then Stephanie will answer the second. On the new colocation, so in APAC, indeed, so there is a high growth there. You know that we have the data centers in Mumbai, Singapore and Sydney, Australia. We don't intend to open new geographies. The 2 things that we do there is that, first, as we have done in Paris with the 3-AZ region, right, with super resilience, we create that. You know that the next one is Italy. And indeed, we plan to expand this 3-AZ model in the Rest of the World, including APAC. And the second dynamic is indeed our local zones. As you know, we expand our local zones all across the world, also in the largest cities of the world. We have deployed more than 30 of them, and we continue to deploy them also in APAC.

Thank you, Ines, for your questions. So on the Rest of the World growth, yes, indeed, it's marginally lower than Q2, but what we can say that, first, you have different base effect for Q2 and Q3. I mean, Q2 in '24 was quite low for our Rest of the World region at 6.9%. So you have a strong base effect difference. Also what we can say in the U.S., I mean, the growth come a little bit lower than Q2. This being said, it remains very high, and it's our fastest geography within the group. So it's still a very dynamic region.

We will now move to our next question from Emmanuel Matot from ODDO BHF.

Three questions for me, please. First, you mentioned a contract with Arquus for your second cloud offer. Was this a contract that required many months of negotiations? Or was it done quickly given the new geopolitical context? Are you the only supplier also of these companies for its cloud need? Second, we are hearing a lot about hyperscalers promoting new sovereign cloud solutions. Are they really secured for European customers? Or is it just marketing in your opinion? And my last question, could you remind us your M&A strategies? Because of French newspaper mentioned last week,that OVHcloud is well positioned to buy some assets from wireline that are not traditional cloud service provider.

Yes. So on your first question, indeed, with Arquus, so indeed, it's defense armored vehicles. These projects indeed take some months to discuss with the customers. As you know, these are SecNumCloud, very secured solution. So this requires indeed the discussions with the customer to evaluate every time that you truly answer to the constraints of the customers. And indeed, we see that health care, defense, public sector are truly sectors, verticals that we currently see the dynamics. As for the other supplies, usually, I mean, the -- our customers have different options. They still have sometimes some on-prem infrastructure, and they usually also use several suppliers to deliver their services. On your second question on the hyperscalers, indeed, you know that we see that there is a change mindset, right, since the very -- since the beginning of the year, I would say, linked to the geopolitical tensions. And indeed, we see some examples. Recently, even Denmark a few days ago, right, decided to gradually replace hyperscaler solutions with the European alternatives. So at -- at OVHcloud, we have always embraced that our motto, innovation for freedom, so giving the freedom of choice. So we commit to support open, responsible, reversible access to technologies for cloud, for AI. That's how we get -- we got also the second cloud qualification with very high qualification in France with new offerings that we definitely issued. And I think that's -- this is truly, I think, our difference on the market. And there's always a question whether the hyperscalers can guarantee indeed, or not, the fact to be immune to extraterrestrial laws, to extra European laws, and we always call for transparency of all communication by the competitors on that, so that customers understand truly what they are confronted to when they chose their supplier for sovereign offerings. And third, for the M&A strategy, indeed, you know that we have a very clear strategy, which is that we -- and we proved it in the past years, we do M&A to accelerate our product roadmaps, very targeted. So we acquired 5 companies in the past years to accelerate our product roadmaps. Also, we can -- our strategy is also when we want to open new data centers faster, as you saw in Italy recently with an acquisition. And it can be also to expand our customers with portfolio of customers to leverage the cross-sell opportunities. But I would say that the main focus is indeed the acceleration of our product roadmap.

And our next question is from Jahan, Valentin-Paul from Stifel.

So on the growth territory, bearing in mind that you perceive a profound by having shift in '17 and you have a growing number of discussions with French public entities and private entities and at C-level, considering bearing in mind that you explicitly mentioned a marked acceleration in your customer acquisition dynamic, should we conclude from this that growth is going to accelerate sharply in the coming quarters? And can we consider the 10% growth target for 2026 to be outdated and too cautious from now on? Do you think this growth target for 2026 is still relevant? And if it is still relevant, why given your narrative?

I think, as I mentioned in my first answer, indeed, this -- there is a dynamic indeed of more inquiries, as I mentioned, at C-level. I could tell you that also I had, in the past weeks, many meetings also at ministries level in Europe. I mentioned the integrators. We truly see this momentum. Despite of that, I think that, as I mentioned, it's going to take some months what to come from discussions to projects, qualification with the teams and to see it at the strong revenue level. And I think to your question on the long-term growth, I think that this is, for us, a long-term growth guideline. And this Q3 publication for us is not the appropriate time for us to provide the guidance for next year. And as you may have understood during the -- already at this presentation, I think we are implementing specific action plans that will be approached and mitigates this macroeconomic uncertain environment. But truly, today, I mean, we are very much focusing on Q4 execution. And especially, by the way, we have a rigorous budget process that's ongoing for next year.

We will now move to our next question from Daniel Schafei from Citi Group.

I just want to come back to the U.S. growth. So I understand U.S. growth is mainly driven by diversification efforts of companies to not only rely on U.S. data center players, especially after events like Liberation Day. So can we expect that U.S. growth will decelerate again into 2026 to some more normalized rate after kind of this year of those events passes?

Well, I think it's very early to say today what would be the outlook for '26 as for U.S. growth. I think that we have been, for many years, in the U.S. now, more than 10 years. We have data centers, East Coast, West Coast. We have 10 local zones that we also opened in 10 big cities in the U.S. And I think we continue to enrich the solutions that's delivered in our data centers in the U.S. So...

Yes, it's mostly Private Cloud as of today in the U.S., and we're making some specific efforts to make the Public Cloud product also available. But as of today, it's only a minimum part of our business in the U.S. So that's also an area where we should see some acceleration of the growth. And clearly, I mean, the -- our U.S. customers choose OVH for pricing positioning reasons in most cases, and this remains very much valid. So I mean, we are very confident on our U.S. business.

Okay. Perfect. And just to follow up on this. So can I -- obviously, it's a bit too early to mention 2026, but just to understand the growth dynamics. So in addition to kind of Europe hopefully coming back a little bit more in 2026, there is also a point that U.S. will continue to be resilient, right? So this is fair to assume.

Yes. Well, I mean, when you look at the -- what is communicated in terms of macro, in terms of IT Directors making decision, it's still very difficult to have a good visibility. We -- so we remain, as of today, very cautious. We are working on '26 right now. So we're not guiding for '26 in our Q3 publication. But we are taking all these factors into consideration, and we'll come back in October with our full year guidance.

I think we're very -- yes, we're very action-oriented today truly on executing our -- delivering the offering, targeting the right project customers. And I think that when we stick to our momentum and to grow and also cash flow generation.

[Operator Instructions] And our next question is from Derric Marcon from Bernstein.

I've got 4 questions. The first one, and it's often about top line growth, so the first one, can you share with us any data point or KPI that you are tracking to measure customer appetite for your solutions, so qualified pipeline, nonqualified pipeline, anything that can help us to understand if customer demand is stable quarter -- or month after month, quarter after quarter or you see, let's say, an increasing appetite for your customer on existing solution or the new solution that [indiscernible]? Second question is about Q4. So sorry to come back on that, but you are talking about predictable growth. But if I take your guidance full year, I think you had already the question during the call, but keeping 9% to 11% organic growth target for the year when you have already closed 3 quarter means that your guidance for Q4 imply a range of 6% at the low end of the range, 14% at the upper end of the range. So I was wondering here if you can help us to, yes, narrow this range, which seems to me for next quarter a bit very wide, let's say. Third question is on the ramp-up of existing contracts. You mentioned some of them. Can you quantify that? And conversely, can you also quantify the headwind you faced at the end of the Q3, so on your Private Cloud business? Was it meaningful in terms of revenue loss versus your budget? And should we interpret the fact that June is in line with May as something saying that if nothing has changed in Q4 versus the end of Q3, this miss will remain versus your budget? And my last question is about the level of net retention rate, so 104%. I was wondering if this number, which is quite low compared to historical level, comes from the fact that customer -- existing customers are not yet adopting new products or the churn rate is higher than what we have seen on average in recent years.

Okay. So I'll start with the data points, the NRR, and Stephanie will answer to Q4, and I'll give a flavor also on the ramp-up of contracts. The -- on the -- first on the top line, on the top line, you mentioned data points. I think if I pick one for Private Cloud, indeed, as you saw, we have implemented a strategic positioning, as we mentioned, of our entry-range Bare Metal products. And indeed, we can already see the results because in terms of customer acquisition, it's up 25% year-on-year, right? So we see this impact in terms of customer acquisition. If I look at the retention rate, the NRR, indeed, it's 104%, Q3, right? It was 107%, H1. So we don't guide, as you know, on NRR. In 2020 and 2021, I think we were around 103%. And we have been around 110% in the last year. So the evolution of NRR, I think, is mostly linked to what we have seen -- what we've been seeing for the last months in our Private Cloud segment in Europe, especially in Hosted Private Cloud, meaning that existing customers are optimizing, I think, their cloud infrastructure. And this is to understanding connected to this uncertain macro environment. And as you see, we take action, right? We take action. We launched specific action plans to boost the acquisition of customers that are looking for these entry-range servers. We are indeed launching VCF-as-a-Service offering. So -- and we don't see a change in the churn, right? So I think we stick to our action plan, and we are not worried by this 104% NRR. On the ramp-up of the contracts, I think that, of course, you see there is different dynamics. We see some customers, like I mentioned, that like Arquus in the defense sector, right, where you have indeed different phases into the project. So this is a SecNumCloud project. And we see kind of 2, 3 phases where, indeed, the -- this contract months after month, while enriching not only consuming more, but also including more with the disaster recovery, with SAP offering, et cetera, these are bringing a true ramp-up into the contracts. And then you have some new contracts, right, for also sovereign cloud. If I could take you an example, Derric, we have public cloud or, I would say, para-public body that is currently calling for RFP. And we are talking typically of EUR 1 million, EUR 1.5 million per year revenue over 8 years, right? So this is typically, but this is new. This is -- but this is the way customers also today are pitching for growing their sovereign offering. This is typically directed as a sovereign offering deal. And maybe, Stephanie, on the Q4.

Yes. Derric, so again, just to share with you what we do see as of today, I mean, we have some very strong drivers. I mean, you see that in Public Cloud, we have a strong growth. U.S. remained also very dynamic also with some optimization, but all in a very dynamic sector. We have also a good trend of the sovereign. We have good acceleration and growth of our SNC offer. Plus like we said, I mean, we have a good pipeline in terms of request RFPs. It does take a bit of time, but I mean, the trends are very good. Private Cloud, it's a bit different. I mean, we have some sequential deceleration that we have observed in the -- in this Q3. We have the macro uncertainty, and our customers are asking for infrastructure optimization. Like Benjamin said, we have also the end of the pricing effect at the end of April from Broadcom. So we are losing this driver in -- starting in May. But as a result, I mean, we've made those adjustments to the offer that we've launched a new offer to be very competitive. We've revised slightly the pricing also to accelerate the customer acquisition and to offer also some competitive offer to our customers that are suffering, particularly in Europe. So all in, we are making a strong effort to answer to our customer. We have also the new offer in the Private Cloud. And at the end of the day, that on that basis that we confer our full year guidance. What we do see in June as well, I would say 1 week to go, but we saw a stabilization of the trends compared to May. That's also a good element. So all in, yes, we confirm the full year guidance for our top line as 9% to 11%. That's what we can say. And we are also, very important for us, confirming our guidance for EBITDA margin around 40% in this context. And we also confirm our cash guidance with an unlevered free cash flow that we expect to be above 25%. (sic) [ EUR 25 million ] So an improvement compared to FY '24.

Yes. Very important that you understand that we continue our cost discipline that we've launched since October. And as you know, the focus is mostly on costs and gross margin, but also on G&A. And definitely, we have profitability measures especially focused on G&A to ensure that we deliver on profit, on cash. And that's how we maintain the guidance for the full year.

I mentioned 25%, it's EUR 25 million for the base -- the '24 base for unlevered free cash flow, sorry.

And there are currently no further questions at this time. With this, I would like to hand the call back over to OVH management team to conclude today's call.

So, yes, thank you for these questions, and thank you for attending our Q3 '25 call. So I'll wrap up this call to tell you what. First that our performance in Q3 was indeed resilient. So we reached the EUR 272 million revenue, which is up plus 9.3% like-for-like growth compared to Q3 last year. In this uncertainty of the macroeconomic environment, we have successfully adapted our positioning in Private Cloud to meet our customer needs. For example, as we have mentioned, we repositioned our prices for entry range of service to boost customer acquisition. In parallel, in Public Cloud, we continue to deliver a solid growth, too, by new products and customer acquisition. But from a business perspective, we benefited from a strengthening of inquiries of sovereign solutions with new deals that will ramp up in the coming quarters, as for example, as mentioned, the Arquus in the defense vertical. In parallel, we have continued to roll out new products across Public Cloud, especially in artificial intelligence with Data Platform and also with the AI Endpoints. We also continued our geographical expansion based on the 3-AZ model for high resilience and availability with our new data center opening in Milan. Finally, as planned, we continued our efforts to discipline cost with sustained focus on profitability and cash levers. So based on this trajectory, we confirm our FY '25 targets, like-for-like growth between 9% to 11% and adjusted EBITDA margin of circa 40%, a CapEx between 30% to 34% of our revenue and an unlevered free cash flow above EUR 25 million, improving compared to last year. Thank you very much again, and have a great day.

This concludes today's conference call. Thank you for your participation. Ladies and gentlemen. You may now disconnect.