NFON AG Maintains Strong Financial Performance into FY 2023, Targets Growth in 2024

NFON AG, a leading cloud communications service provider, reported its full-year 2023 financial results, with figures aligning with preliminary numbers previously disclosed in early March. FY 2023 recurring revenues reached €77.1 million, marking a 4.8% year-over-year increase, supported by a high recurring revenue ratio of 93.7%. This growth primarily stemmed from significant key account acquisitions and enhanced cross and upselling within the existing customer base.

The company's total seats increased to 656,000 by year-end, a growth of 3.4% from the previous year. Despite a surge in recurring revenues, the average revenue per user (ARPU) has remained stable at €9.71, impacted by a decrease in voice minutes sold due to dwindling COVID-19 effects. However, NFON anticipates a potential increase in ARPU, fueled by recent price adjustments and sales of higher-value solutions like the CC Hub.

Significantly, NFON has seen a substantial improvement in profitability, with adjusted EBITDA reaching €8.4 million, a considerable turn from €-1.0 million in 2022. This improvement was driven by higher gross margins and stringent efficiency measures concerning personnel and marketing expenses. Notably, free cash flow was positive at €1 million, the first since its 2018 IPO.

For FY 2024, NFON's management is targeting mid to upper single-digit percentage growth in recurring revenues and an adjusted EBITDA in the range of €10-12 million. Moreover, M&A activities have been signaled as a key focus area for potential inorganic growth in the near future.