Hello and welcome to the OVHcloud 2022 annual results call. My name is Sarah, and I will be your coordinator for today's event. For the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero and you will be connected to an operator. Please note this conference is being recorded. Today's speakers will be Michel Paulin, CEO, and Yann Le Cain, CFO. I now hand over to the OVHcloud team to begin today's conference. Thank you.
Thank you. Good morning, everyone. This is Benjamin speaking. I'm Head of Financial Communications, and we are very pleased to have you today on this call for OVHcloud 2022 annual results. We will start with Michel Paulin, CEO, for the strategy and the business update, and then we'll have Yann Le Cain, our CFO, for the financial performance. Then again, Michel, for concluding remarks and the outlook. Thanks again, and Michel, floor is yours.
Good morning, everyone. I'm very pleased to be with you this morning to share our 2022 annual results. It has been a year of strong performance, and we are glad to post those results today. Our revenue reached EUR 788 million, up 18.8% as reported and 12.4% like for like. We are ahead of our reported growth guidance of 16%-18%, which you will remember we revised upwards twice during the year. Adjusted EBITDA reached EUR 308 million, up 17.4%, which represents a 39% margin. Our recurring and gross CapEx stood respectively at 19% and 36% of our revenues. We start 2026 with strong confidence in our capacity to accelerate during the year, especially in H2.
That's why we have ambitious target for 2023, with a like for like revenue growth between 14%-16% and an adjusted EBITDA margin in line with 2022. We target recurring CapEx between 16%-20%, gross CapEx between 20%-32% of our revenues. If we take a more detailed look at our fiscal year 2022, we have significant milestone to share with you, so I propose we go to the next page. First of all, we have been signing new contracts continuously during the year, and I'd like to highlight some of them signed in Q4. We signed with the French government on sovereign solutions certified by SecNumCloud, which is also very interesting, and shows that there is a strong interest for sovereign solutions. Also with Arianespace, Mastercard, Atos, Fencore in Canada.
We also signed Iniquiet Group in Germany and Eiffage in France for also Private Cloud-based solutions based on SecNumCloud-certified solutions. 2022 has also been a year of development of strong partnerships. Our revenue growth coming from partners and system integrators is above 20%, and we enjoyed an impressive growth of the total number of partners. Now we have more than 1,100 in August 2022. We are pleased to have strong relationship with large global players such as Accenture, Deloitte, Capgemini, Inetum, Sopra Steria. Finally, we continue to develop new PaaS solutions intensively and build this growth engine. We are proud to have doubled the number of PaaS solutions in general availability during the year. The next page, I will look at the Q4 performance.
The Q4 performance is very robust and gives us confidence that we are starting our fiscal year, I mean, very well. In France, we had a continued acceleration during the year, and we had in Q4 the strongest quarter. We also enjoyed very interesting trends in the rest of Europe, where the performance underlines the success of our strategy towards large corporates and the strong commercial tractions of sovereign products. Maybe one word on the Web Cloud segment. As you know, we have been working on a new connectivity offering, and we recently launched it. Also, I mean, we have been working on an improved offer strategy in the Web Cloud segment, which will bear fruit in 2023 and onwards. In the rest of the world, we have experienced a continued impressive self-dynamism, especially in the digital channel in the US and APAC.
The very strong growth since Q4 last year led to a slightly higher comparison basis, especially in the U.S. The Q4 overall performance is promising, and now I'd like to share with you our views on the cloud market forward trends. Well, cloud market trends remain unchanged and very strong. Analysts expect the cloud market to grow by a CAGR of above 20% between 2022 and 2023 with three key drivers. First, clearly, the acceleration of data generation worldwide that needs to be compute and stored. The irresistible trend to adopt hybrid multi-cloud. It's worth highlighting that close to 92% of companies in the world use several cloud provider, and we believe it fits completely with the positioning of OVHcloud. The cloud ability to turn CapEx into OpEx, which is probably the main driver of demand today.
Just like the COVID crisis did, economic volatility actually accelerates the switch to the cloud, and it allows to make real economic savings. The next slide shows also that we are the leading European partner in the open data sovereignty. As shown, the cloud market in a secular growth, and we are also experiencing a favorable shift of the legal framework to different data protection and data sovereignty. We are leading the way on data sovereignty, especially in Europe. Not only, there is also a positive evolution on sovereignty in Canada, Singapore, India. As you know, one of our key positioning is that we do not use customer data. We have absolutely no conflict of interest with our customers. This is a rising focus and concern for customers of cloud providers today all around the world.
Thanks to our favorable positioning with very strong performance on sovereign pro-products, especially with large corporation for our SecNumCloud products, with more than 30 new corporate clients in 2023, the first full year of commercial activity for this SecNumCloud certified product. One recent major milestone for European data sovereignty was the opening of our new data center in Strasbourg with an efficiency-driven design and with best-in-class PUE and WUE power and water efficiency KPIs, for which we lead the way globally. We enjoy significant political support with, among other, Bruno Le Maire, French Minister of Economy, and Thierry Breton, European Commissioner. The support highlights our focus to Europe and France are now on the topic.
The contract we sign with AIFE, which is the IT decision-making body of the French Ministry of Economy and Finance, with 140,000 civil servants in Q4, is a very good proof of this accelerating trend. The next slide also is about that we are the leading pioneer in sustainable cloud. Since the beginning, in 2022, we have placed sustainability at the heart of our model. We are the leading pioneer in sustainable cloud. We are proud to reach best-in-class sustainable performance with a PUE between 1.1 and 1.3 compared to a 1.77 market average. We also have a WUE, which measures the liquid and water efficiency of 0.26 compared to 1.8 in the market average. A CUE, carbon usage effectiveness of 1.2, which is a leading indicator.
In addition to be a pioneer, we want to lead the way in the industry, and that's why we are committed to ambitious midterm targets, including global net zero on scope one and two by 2025, and on a full scope by 2030. This positioning of offering a sustainable cloud is fostering customer demand, and especially from the large corporates. In 2022, we are very proud to have signed with EDF Renouvelables, a power purchase agreement starting in 2025 for a 50 MW capacity with negotiated price caps and well below current market prices. This next slide is about people. Our employees are at the heart of OVHcloud. I am with the Comex, and collectively, we are really very proud to have employees strongly engaged for the company.
With a 7.5 engagement score improving by 0.2 versus last year, a 79% loyalty rate, and a very low voluntary departure rate, we are very proud to have a very high level of commitment. Our 2,800 talents, of which more than 60 are tech profiles, are fully aligned with our strategy, and they are key in the execution of our growth plan. In this context of inflation, with the pressure for higher wages, having employees that believe in the project, which are wholeheartedly in the company, is even more important. The next slide is to demonstrate that we have a very successful go-to-market strategy with dedicated channels.
Supported by the high engagement level of our employees, we're executing our go-to-market strategy according to what we have presented during the IPO, and we are targeting corporate clients with success. This enterprise channel has reached now 54% of our revenue, fueled by strong performance both on direct and indirect go-to-market channels. We have reinforced our client-dedicated internal sales team and strengthened our links with our partners, integrators, and also software editors, and they are growing more than 20% in 2022. The digital channel has a continued success during the year, especially in the U.S. and in Asia. Overall, we are strongly growing with partners, with large organizations, with our sovereign unique solutions as a result of our successful strategy. Another layer of our strategy is linked to our international expansions.
We have enjoyed a continued strong international performance throughout the year, especially in the U.S. and in Asia. France now represents 49% of revenues, Europe, excluding France, 29%, and the rest of the world is at 22%. The cloud market dynamics are strong globally, and we can see it will continue with the continued demand for our private and public cloud services in each of these regions. We are all very aware that current macro situation is uncertain. With a high level of inflation globally and in this context, we are leveraging our pricing power to navigate the inflationary environment. We have announced during summer a price increase policy. New services have already been successfully priced based on the world's new reality in October, and the repricing of existing services will start progressively in the first week of December.
The price increases announced will mitigate inflation on overall costs. Overall, we expect our pricing policy to allow us to maintain the company margin in fiscal 2023. The price increases we announced are in line with industry-wide increases for IT or cloud services such as storage, network, license fees, and support. Announced increases leave our price advantage unchanged compared to the hyperscalers and underlining our significant pricing power. Following the announcement, customer dynamics and demand were unaffected, and we haven't seen much pushback at all. These increases were fully expected by customers and are industry-wide. The key element. We have been continuously working during the year on strengthening our Private Cloud offering and expanding our Public Cloud and PaaS offering.
We have released new ranges of private cloud services in Q4 with better performance, availability, security, and optimization. We also now offer Nutanix on Hosted Private Cloud. Our teams have also been working on our Public Cloud and PaaS offerings. We now serve sophisticated client needs, and you can click and look at the example of the iATROS and Convision case studies on this page. Let me quickly focus on another interesting customer use case on the next page. This is a German health company that has developed a fully integrated solution using the complete OVHcloud IaaS and PaaS offering. They were looking for the IaaS data protection standard, both for GDPR and healthcare data in Europe, best price-performance ratio. They built their offering on Public Cloud infrastructure with different layers of PaaS and network solutions. I will not comment on the diagram on the right.
The customer use cases highlight the fact that OVHcloud now is a partner of choice for fully integrated sovereign solutions. Last but not least is that the key element of the current situation is electricity prices, which are heavily impacted by the current macro situation, especially in Europe. However, thanks to our highly regulated footprint and an active hedging strategy, we are already certain of 90% of our electricity prices for fiscal year 2023 consumption. As a result, we forecast the electricity costs will represent a mid-high single-digit percentage of our revenue in fiscal year 2023 compared to a mid-single-digit in fiscal year 2022. Thanks to our price increase I explained on the previous slide on this certainty on most of our electricity costs, we are confident in maintaining the full year 2023 EBITDA margin in line with the full year 2022 level.
Also, I can share with you that close to 75% of our fiscal year 2024 consumption already has the same level of certainty. Now let's move to the financial part with Yann. Yann?
Thank you, Michel. Good morning, everyone, and I'm delighted to be here with you today. This first financial slide is about our strong reported revenue growth. As you can see, we reached EUR 788 million this year, up 18.8% versus last year. This strong growth has been driven by a continued ARPAC expansion. ARPAC is the average revenue per active customer. You also see that our customers are very sticky, which is an excellent sign, as we report a very good net revenue retention rate of 114% for the full year, significantly up from last year. Finally, if we look at our like-for-like growth, we compare to EUR 705 million in 2021 and grew by 12.4% to reach EUR 792 million like for like this year.
As you know, like-for-like figure excludes the effects of perimeter changes, Forex, and the Strasbourg incident. Now moving to the next page, we can see that the group's performance is driven by the strong growth of Public Cloud and Private Cloud. To highlight this evolution, you can see that the Public Cloud services now represent 16% of our revenue, up two points versus last year. The Private Cloud represents 62%, up one point. As explained by Michel, we have enjoyed a continued acceleration with the large corporates, thanks to our direct and indirect go-to-market strategies. Finally, on the Web Cloud segment, we have recently been working with our new connectivity offering to better match customer needs, and we're also implementing a new dedicated offer strategy to support our commercial performance there. Moving to the next page on the profitability side.
We're very proud to cross this year the EUR 300 million euros of adjusted EBITDA and reach EUR 308 million euros, which represents a 17.4% reported growth versus 2021. In terms of margin, we reached 39% in 2022 with a clear strategy of reinvesting our operating leverage into our future growth with a focus on talents in sales and marketing and product and in our support functions, notably IT, and that's in order to fuel improved productivity in the coming years. During the year, some one-off effects have weighed on the margin, such as dollar mix effect, the ramp-up of our acquisition integration, and in Q4, particularly some higher unhedged electricity costs had a little bit of impact.
With our pricing strategy and our operating leverage, we're confident that the adjusted EBITDA margin in fiscal 2023 will be in line with fiscal 2022 levels. Quickly moving to operating income and the P&L. The full P&L, you can see that we have EUR 52 million of one-off effects in 2022 linked to the IPO, Strasbourg and M&A. Without these effects, our operating income would have reached EUR 32 million. One very interesting aspect of our P&L is the significant decrease of our cost of financial debt, thanks to the refinancing done in the wake of the IPO mid Q1 fiscal 2022. Now moving to cash flows. 2022 has been a year of investment to deliver profitable growth.
Our recurring CapEx reached EUR 151 million or 19% of our revenue, and gross CapEx reached EUR 301 million. If we exclude the hedge-related acquisition of IPv4 during the year is 36%. I'd like to highlight two interesting elements in our CapEx this year. First of all, on the purchase of components. As you know, we were opportunistic in the first half year and have carried out precautionary purchases of components to protect ourselves from supply chain disruptions. Like everyone else, we've seen higher prices combined with a significant US dollar appreciation. The second element is IPv4 addresses. As part of our ordinary course of business, we buy IP addresses, and then we had in H1 the opportunity to buy more. Those addresses do not lose any value, much to the contrary.
In order to hedge our future quarters, in particular the year 2023, we made the decision to buy a significant number of IPv4 addresses compared to what was initially planned. Now, let me stop one or two minutes on our cash model and how we manage our CapEx. First of all, as Jean-Marie showed before, the cloud market has unchanged trends, especially in the current macro context, where the switch from CapEx to OpEx gives additional cost flexibility to our customers. Actually, 70% of our industrial CapEx consists of the production of servers, and we can adjust it within less than a month. This means that in the unlikely event, as one would say in an aircraft landing procedure of a reduced cloud consumption, we would immediately reduce our CapEx and start to generate cash.
In addition to this high flexibility, we are continuously working on improving our industrial model. For instance, we have work streams focusing on simplifying our network infrastructure, on optimizing the equipment setup, on improving the productivity, and so on. We do have a very flexible, resilient, countercyclical cash model, which is key, a key benefit we derive from being fully integrated. Finally, one last comment I'd like to make about our strong balance sheets. At the end of the year, our leverage is at 1.7%, and I'm glad to share that we've been quite active in 2022 with hedging 75% of our term loan. Our current interest rate is at 2.3% all in, including margin as we speak. Also, with almost EUR 400 million of available liquidity, our growth acceleration plan is fully financed until 2026.
With this very good news, I'd like to hand over to Michel for the outlook and key takeaways.
Okay. I have said at the beginning, we planned a revenue growth acceleration in fiscal year 2023 with a like-for-like revenue growth between 14%-16%. This growth will be fueled by an acceleration in Public Cloud, a continued successful go-to-market strategy, and solid products. We expect H2 to have additional growth drivers with PaaS solutions contributing more significantly in the second half, and to see the full effect of price increase also in H2. We target an adjusted EBITDA margin in line with 2022, thanks to our operating leverage and price increases. Note that these effects will be fully contributing mostly in H2. Regarding CapEx, we target recurring CapEx between 16%-20% and gross CapEx between 28%-32%, down from 30-34 previously as we plan our component inventory to gradually return to lower levels in 2023.
Our midterm targets are unchanged, and I said earlier, the midterm cloud market trends are fully confirmed, which give us confidence to achieve these targets. Our revenue growth will accelerate to the mid-20s%. Our adjusted EBITDA will reach close to 42%, and our recurring CapEx will be between 14%-16%, thanks to better efficiency, and our gross CapEx will be between 28%-32%. In summary, if we have a look at our growth acceleration strategy, I would like to reconfirm our four growth levers. First, our business mix shift with a mechanical acceleration for public and private cloud. The move to PaaS, which will be contributing more significantly in H2 2023. Our already successful international expansion. Finally, we see it everywhere in the world, the data sovereignty trends, which are definitely good today already.
All those four levers will enable us to accelerate towards mid-20s in 2025. In conclusion, some key takeaways for the fiscal year 2022 presentation. First of all, we published a revenue of EUR 788 million. As you know, we have raised our guidance twice during the year, so it's a very strong performance. We have reached an adjusted EBITDA of EUR 308 million at a net revenue retention rate of 114%, which highlights the stickiness of our customers. Our growth strategy is successful. We're accelerating on large corporates. Our PaaS offering is strengthened to offer fully integrated solutions to our customers, and we have successfully increased our international footprint.
Finally, we are very confident in our fiscal year 2023 acceleration with like-for-like revenue growth between 14%-16%, and adjusted EBITDA margin in line with fiscal year 2022, and a confirmation of our midterm objectives. On that note, and before we open the floor to questions, I would like to leave the floor to Yann Le Cain, who wanted to say something special.
Thank you. Thank you very much, Michel. I just wanted to thank everyone, as this is my last earnings call with OVHcloud. This has been a fantastic adventure, and I'm very proud to have accompanied this amazing team for almost four years, from pre-IPO to IPO and to today's successes. As far as I'm concerned, I'm convinced that OVH, OVHcloud success equity story will continue to deliver in the short and in the long term, and I will follow it closely. It's been a great pleasure working with you all, investors, analysts, and obviously with the amazing OVH teams. Thank you very much, Michel, for your trust.
Thank you very much to you, Yann Leca, for your tremendous work from building a very robust finance team to leading our successful IPO. You have big shoes to fill.
Thanks very much, Michel. I have no doubt the person arriving soon will have no problem filling my shoes.
Yeah. This is a good time for me to tell you all that the process of hiring Yann Le Cain's successor is very advanced indeed, and we are looking forward to sharing the news in the coming weeks. On that note, I'd like to open the floor to questions. Thank you again, Yann Le Cain.
Thank you, Michel.
As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Please ensure your lines are unmuted locally, as you will be advised when to ask a question. The first question comes from the line of Gianmarco Bonacina from Equita. Please go ahead.
Yes, good morning. Thanks for letting me ask the question. The first one is about your revenue guidance. If you can give us a little bit more color on this 14%-16% growth between the price effect you expect, the volume, and also what kind of expectation you have in 2023 for PaaS as a driver of growth. Then maybe on the reported figure for our estimates, assuming effects will remain at this level, what kind of tailwind should be on top of the organic growth for next year?
about your 2025 target, is it fair to assume that you will move linearly from your 15% growth next year to 25%, implying kind of 20% for 2024? You have some visibility here, or maybe this growth will be more back-end loaded. Thank you.
Okay. A few elements about the guidance. We forecast a contribution from several growth drivers in fiscal year 2023. First of all, as soon as in H1, we will benefit from the public cloud acceleration and a continued performance for large corporates and a strong dynamism for sovereign clouds. So that's really a first factor. Then in H2, we expect, and you mentioned it, the PaaS solution to contribute more significantly and also combined with the full effect of the price increase that will start in December. If we make a more high-level analysis, the cloud market long-term trends are fully confirmed, and that's why we are confident about this growth guidance.
About the 2023 targets, we don't think it will be really strictly linear, that they will drive an acceleration across the different things, thanks to the fact that we are increasing the solutions portfolio and that also all the investment we are making in the international expansion will be able to accelerate the growth accordingly, after a few years. The last point of all was about the path you mentioned is we are still rolling out our PaaS offering with a lot of recent launches in general availability. We are building this offering along with our customers to make sure that it fits their needs.
The trends in fiscal year are in line with our plan, with our demand, the demand and sales dynamic already here, and we are confident that the trends will continue in the future. We expect PaaS to start to contribute in H2, as we always say, fiscal year 2023. Very interesting is to see the example of the iATROS use case that we have been showing during presentation and which highlight the potential of cross-sells of PaaS service alongside selling infrastructure that can be either Public Cloud or Private Cloud. We see a strong momentum in our database as a service and Kubernetes solutions.
Thank you.
Our next question comes from the line of Ben Castillo-Iglesias from BNP Paribas. Please go ahead.
Good morning. Thanks very much for taking my question. Just another one on the revenue growth guidance for next year. Nice to see that acceleration confirmed and confirming those midterm targets again. I guess what I would ask is, what are your assumptions on the macro environment underpinning next year's guidance? Are you assuming things as they are today, some deterioration or some improvement? That'll be my first question. The second question would be, can you give us any color on your expectations for the growth by segment? Public Cloud versus how it did towards the end of this year and Private Cloud in particular. Then if I could squeeze in a third one, just on the channel partners. Seems like you added another 150 in Q4. You're up to about 1,100 now.
Is the aim there just to keep growing the number of partners, or does there come a point where you're sufficiently present and it's then about harvesting those relationships? Thank you.
About the macro, my short answer would be that the cloud market growth trends are, we believe, unchanged, and it's confirmed by most of the actors in the sector. At least expect the cloud market to continue to grow at a CAGR of 20% between 2022 and 2026, and we are really fine with that. If I try to have a longer answer about, we believe today that we, there is an inflationary, sorry, context, and that therefore the cloud ability to turn CapEx into OpEx is actually a big driver of demand. As illustrated by the COVID crisis, if anything economic reality actually accelerates the switch to the cloud, as it allows to make real economic savings. That we do believe it confirms the driver of the macro.
The second, clearly, it's also that in the context of growing geopolitical tension, and I would say unprecedented climate crisis, data sovereignty, data protection, sustainability solutions have never been more relevant. That's why we have been championing both trends for more than 20 years now, and the demand remain high as the Q1 trends confirm. That's why we believe despite the environment, we have a strong macro position for the cloud and for the cloud market. About the partners, I think the challenge today is not to increase the number of the partners. I mean, what we see is not to increase the number of the partners, is to continue to develop the relationship and to increase the revenue per partner. Except the US, where we are entering now the new partner program, and we hope to have new partner in the US.
What we see today is a strong momentum of the revenue per partner, and it will drive long-term our capacity to continue to grow in the indirect channels. Moreover, everything which concerns the sovereignty solutions is really today a strong driver in Europe, and I mentioned the different partnerships we have. You've seen that we have signed strong partnership on sovereign solutions with Accenture, with Inetum, with Sopra Steria. It's public information. That's why we do believe that today the I would say the capacity to develop one-on-one relationship with this partner will boost our indirect revenues. Last point, again, is what I was mentioning previously about sustainability. We see that today sustainability is becoming a higher driver for demand for especially the large corporates.
We are the pioneers in sustainable cloud, and today we have extraordinary results in terms of efficiency in electricity and in water and carbon usage. That's why we believe also it's a strong argument in favor of the OVHcloud solutions.
Perfect. Thank you, and best of luck, Yann, for the future. Thanks.
Thank you. Thank you very much.
The next question comes from the line of Titus Krahn from Goldman Sachs. Please go ahead.
Hi. Congratulations on your results, and thanks for taking my question. You indicated that EBITDA margin will be skewed towards the second half. What about revenue growth and CapEx? What sort of phasing should we expect between first half and the second half of next year?
Hi. Yann speaking. We actually expect to have an increasingly favorable trends in the second part of the year. As you heard, first of all, on the revenue side, we are starting to increase our prices and, as first of December, we will roll out our price increases on existing customers and offers, and this will continue throughout the year. This gears the revenue growth towards the second half of the year.
In terms of CapEx, it will be relatively similar, in the sense that, you know that this year we have had, first of all, this year, fiscal 2022, we have added quite some component inventory in order to weather the storm of the supply chain disruption, and we have done so very successfully. We've also had price increases and dollar increases. Finally, as I indicated, we've had, as I said before, opportunistic purchases. All of that will not reoccur in fiscal 2023. As our component inventory unfolds and we consume out of that inventory, of course, you can expect also a CapEx that skew towards a better performance in the second half year.
Overall, as we indicated for the full year of fiscal 2023, we guide on growth CapEx downwards to 28%-32%, and down from 30%-34% without reason.
Great. Thanks.
We currently have no further questions coming through. As a final reminder, if you would like to ask a question, please press star one. There is another question coming from the line of George Webb from Morgan Stanley. Please go ahead.
Morning, Michel and Yann. Thanks for taking the questions. I've got a couple. Firstly, just on pricing, I mean, given the cost inflation we've seen this year, the activity of other vendors as well, can you give us an updated feel for where you see OVH positioned on pricing in the private cloud landscape? I know you've given some data in the presentation deck on public, but interested where you see yourself versus, you know, the IBMs of the world, also the Hetzner, historically, I guess, have been very keen on pricing very low. And where would you see that right now, and where would you see that after the December price increases? Secondly, on the EBITDA margin guidance, you mentioned the H2 weighting.
Can you give a feel for how much of a swing you would expect between the first and the second half of the year? Thank you.
Okay. About the first point, we confirmed today that we do believe we have a very strong price performance positioning, both in the private cloud, as you mentioned, and in the public cloud. This is something which is now confirmed by most of the benchmarks, which has been, I mean, disclosed by the analysts. We, despite our announcement of the pricing increase, believe it will continue. Why? Because, for example, Azure has announced a similar increased pricing today. It's official, and IBM has already announced that it will do so. You know that today, for the other private, I mean, players, we see that today they will all increase their pricing. You've seen already that in Q4, we have a strong momentum in private cloud.
We are very confident that today we will maintain a very high level, I mean, competitive price performance ratio on all our products, Private Cloud, but also including Public Cloud. On the second point, I just wanted to reconfirm that our fiscal 2023 margins we expect will be in line with fiscal 2022, we're able to maintain our margins in spite of the cost increases, which, as you can see, are absolutely impacting us in a very moderate manner, thanks in particular to our integrated model.
Okay. That's clear. Maybe if I could add just one further question. If I remember back to Q3, there may have been some comments on how there could be patches of weakness in the kind of smaller tech companies part of your customer mix. No mention of that today. It feels like there's other parts of the business around enterprise and other areas that have maybe become a bit more robust in Q4 than you expected. Is that a fair way of thinking about this, or have you seen any big changes so far? I know you hadn't at Q3, but have you seen any changes downwards in the demand trajectory from those smaller tech companies?
The short answer is that we do not see big changes. For SMB, same as for large organization. The trends are good, and notably due to Private Cloud, where there are very healthy dynamics across the different segments, and both in the SMB and in the large organization, and also in the Public Cloud. The VPS and entry-level range Public Cloud product, mostly for SMB, slowed a bit in Q4, but we do not think it will impact our overall performance because of strength in our segments and our capability to propose very innovative solutions. Yeah, that's today how we see the SMB, but and performance.
That's very clear. Thank you. Good luck, Yann, to the future as well.
Thank you very much.
The next question comes from the line of Ben Castillo-Iglesias from BNP Paribas. Please go ahead.
Yeah, thanks. Just a quick follow-up, just on the energy cost visibility, saying you have, you know, you've got 90% visibility 2023, which is good. I guess my question is just on the way maybe you structured it. If prices there soften through the year, can you benefit from that, or are you locked in at a certain price now? Thanks.
Thank you for your question. On the electricity costs, we actually benefit today at levels which make me believe that even if electricity prices soften quite a bit, we will still be extremely on the benefit side compared to spot prices or current forward prices. You know, the magnitude is not, it is absolutely in our favor right now.
Great. Understood.
The great thing is that we have complete certainty of 90% of the complete energy bill, which is a position we're extremely happy about.
Yeah, that makes sense. Great. Thank you.
I will now hand the floor back to your host to take further questions coming from the webcast line.
Thank you very much for your questions. I just want to reiterate that today, we are, I mean, very confident about the outlook we have proposed to you, and we are fully committed with all the teams to deliver this plan according to what we already mentioned. We are delivering our plan we presented during the IPO, and we will continue. This is today the commitment of all the management, all the employees to continue the accelerated growth plan we have in front of us.
Thank you for joining today's call. You may now disconnect your line.