Ladies and gentlemen, welcome to OVHcloud H1 Full Year 2026 results. Today's speakers will be Octave Klaba, Chairman and CEO of OVHcloud, and Stéphanie Besnier, CFO. I now hand over to OVH management to begin today's conference. Thank you.
Good morning, everybody. I'm Octave Klaba, Chairman and CEO of OVHcloud. Thanks for being with us this morning. Let me start with the key highlights of H1 2026. As we announced, we generated EUR 555 million revenue and EBITDA EUR 227 million. That means that we generated around the 5.5% like-for-like growth this H1. Our adjusted EBITDA, it's 40.9% and net revenue retention rate it's more than 100%. We had this unlevered free cash flow, EUR 32.3 million. The key initiative, as you know, I started as the CEO six months ago. I made a lot of interviews internally, and we already started some strategic initiative in OVH to start this five-year strategic plan that we started with 2026 to 2030. Inside of that, we announce that we will create, that we actually started to create a vertical in defense market.
The goal is really to go after the customers and the needs that we had a lot of feedback the last quarters and for this very critical element that some customers they ask us. Another strategic initiative is sales, really focusing on the sales side, on the starters and scalers, on the acquisition. We can go deeper inside if you have any question about that. On the corporate, more focusing on the regular fast closing mid-size deals. Again, I have some highlights if you have the questions about that. We announce also that we create our AI lab, and it started, it was initiated with this acquisition of Dragon LLM, and it's really to address the growing market that we feel that our customers, they want us to be part, that it's agentic AI.
On operational highlights, we had a few things that we wanted to share with you. We had this EBITDA that's the highest record from the IPO five years ago. We still continue to improve the EBITDA and it will go up. The goal is really not to be satisfied with the level that we have today. There was another key operational highlight. It's about the front-loaded CapEx to secure our free cash flow in this year and the next year. I think you will have some questions about that, so we will go deeper with your questions. Next page, please. Let's go deeper in the different range of products. First one is Private Cloud. We generated EUR 169 million. That represents about 60.5% of our Group revenue.
The growth is about 2.9% from the like-for-like growth on the Q2. On the H1 it's 3.4%. As the highlight on the barometer, we know we started these initiatives in the first H1, first quarter and the second quarter. As a result, we have this 12% more customer acquisition. If we compare H1 2025 and H1 2026, it works better on the acquisition. We need still to continue and to increase our aggressivity on the market and to win more customers. What we put in place works, but it's not enough. I want more. This is where we want to go in the H2, in the Q3 and Q4, acquire more customers on the starters. On the scalers, we have this continued growth and it works nicely with what we have internally. There's still some improvement, but what we have, I'm happy with what we have.
On the corporate, yes, we had some churn on some two customers on the corporate that didn't impact on the fundamentals on the growth. We still have work from that. Just we lost two corporate customers on that. Yes, we announced that we signed a strategic deal, strategic contract with Alchemy, that is a blockchain platform, and we have a lot of success in this blockchain platform that help us to really understand how to grow faster in the scalable go-to-market. On the Hosted Private Cloud, on the starters and scalers, we still see that there was a few optimizations of our customers. We are working on this new product, and I think the next weeks we will see some announcement that we'll make with Broadcom. In other corporate, we really ramp up of this mission-critical deals.
That's a really interesting market that we didn't have yesterday that's based on the 3-AZ. Maybe we will have a chance to talk about that. Next page, please. On the Public Cloud, we generated in Q2 EUR 60 million. That's EUR 119 million in H1. There was 26% Q2 growth and 14.5% growth in Q2. That means in H1, it's 15.1% growth. We have a solid new customers acquisition. As I said, we changed the things, but still, we can make it better. On the scalers, strong upside of the current customers, and we see the opportunities in the additional products in this 3-AZ approach that we have that customers really like, and we see some migrations from the current data centers to this new model of the 3-AZ. On the corporate, we have more traction in the corporate.
Still, those small, those two free products that is still missed, and it will be delivered in the next quarters. That will help definitely to go after this corporate market, on the corporate market. We also been working a lot, and we will secure more our Public Cloud on this end-to-end encryption, on the confidential computing, on all the securities that we can deliver on this Public Cloud, in the product. This is additional value that some customers they are asking us. On the entry level of the range of the product, this VPS and the SaaS, we have a good proof that what we've done, it works well because we had more than 100% of additional customers that we had in H1 2026 versus H1 2025. That means that we double acquisition of number of customers.
We started to see that in the revenue, and we'll see how it will evolve in the next quarters. This is kind of proof that the strategy of the very aggressive prices, more volume, more customers, and then having this machine to upsell, and going with and helping customers to use all our products, it works. Now we need to scale that and to go after more geographies, more customers, and to be more aggressive, and this is what you will see in the next quarters. Next page, please. On the Web Cloud, we generated EUR 50 million. That means on the H1, EUR 100 million. Growth of the Q2, 70.5%. And on the 70.5% of our Group revenue. And then our growth is 2.4% on the Q2 and 2.5% on the H1. Yeah, I would just go after the topic, and then I would just add the additional comments on that.
On the starters, we just didn't really started repricing and to generate new demands. Okay? This is exactly what we are doing right now, and it will be delivered in the next two months, one or two months. It's really ongoing. We want to be really seen and very competitive on the starters market for the Web Cloud, but we have also the opportunity to go after the more higher market of the customers. They are more pro business. That they trust us, and they order us more products. We want to go after these two segmentations of the products and also working on the Web AI.
You will see the next quarters, next months, this transformation of the Web Cloud to the Web AI that we will operate over the next months and quarters to go after this totally new market where AI helps our customers to build faster delivering websites, help them to operate them, to having the marketing, to having the additional products, additional services. This is what we are doing right now on the Web Cloud. You don't see really the results of that in the numbers today because this is what we started last quarter, and there is still a lot of things to do, but you will see by the end of this fiscal year, I hope, the first result of this strategy. Next page, please. If we see on the split by countries, France, we have, in Q2, a growth of 4.5%.
That means on the H1, 5%. On Europe, excluding France, we have the 2.9%, and then on the H1, 2.5%. I have to say that it was a really complex quarter. There was something that is really new, but we have seen that last two, three years, and it seems like on this Q2 period of time, we will see in the next years this customer optimization because it is end of the calendar year for them and the beginning of the next year. I think this is what we have started to see for the last year, this year and two years ago, that we have this kind of new pattern of the behavior of the customers in December, January, February, where you see optimization of the cost and to having these discussions probably internally on the budget.
Then starting as low as they can in the New Year, and then grow over the year until December. It's something that's not confirmed yet. We're still working on the numbers and to really understand. This is also what we see in this Q2 result. That is, we knew that it's a tough period. Now we started to know and started to understand why it's a tough period. Still work to do to really understand the behavior of the customers and to confirm that we will have in the future this Q2 pattern in our revenue. I don't know yet, but it is what we started to see. On the rest of the world, we had this Q2 8.7% and the H1 9.5% growth still continuing to grow on the Bare Metal and on this Public Cloud product.
I will let Stéphanie to go in the financial results, and I will have a talk with you on the outlook.
Thank you very much, Octave. Hello, everyone. This is Stéphanie speaking. Thank you for being with us this morning. Let's begin this financial section with our key financial figures for H1. We delivered a profitable growth with a record adjusted EBITDA margin since our IPO, and solid unlevered free cash flow, despite having significantly front-loaded our CapEx ahead of H2. We come to that point. We recorded an organic revenue growth of 5.5%, an adjusted EBITDA margin of 40.9%, so we are up 90 basis points compared with H1 2025, thanks to our operational efficiency. CapEx was 42.9% of our revenue, up 6.9 points compared with last year, H1 2025, of which 11% were front-loaded for H2. We have decided to make proactive investments to secure our supply chain and mitigate the impact of skyrocketing component costs, which began to materialize in our Q2.
Despite this anticipation of our CapEx, you see that we generated a solid unlevered free cash flow of EUR 32.3 million on this H1. Going to the next slide, regarding our top line, as Octave said at the beginning, we delivered a like-for-like growth of 5.5% during this H1. This was driven by, first, a Private Cloud performance up 3.4%, like-for-like, impacted by a 1.2 point headwind from the churn of the two corporate clients that we mentioned during our Q1 results. We have also a softer Hosted Private Cloud dynamics following Broadcom price increases. Second, Public Cloud continues to lead our growth trajectory up 15.1%, like-for-like, confirming its position as our primary growth engine, and last, Web Cloud up 2.4%, like-for-like. Now let's take a closer look at our P&L on the next slide. P&L.
As you can see, we achieved another strong step up in profitability with an adjusted EBITDA of EUR 227 million in H1, and it represents a margin of 40.9%, our highest margin since our IPO. This strong 90 basis point improvement in our EBITDA margin is coming from a positive mix effect on our direct cost, reduced electricity cost as a percentage of revenue compared to H1 at less than 5% of our revenue. I can tell you that we are hedged in the current context also for the next 18 months. We have also a strong operating leverage on our fixed cost base. We delivered an EBIT of EUR 35.4 million, representing a margin of 6.4%.
On a like-for-like basis, if we exclude the one-off gain from the disposal of a legacy data center in Paris last year, our EBIT margins remain broadly stable. After including a financial result of EUR -28.7 million and a tax expense of EUR 0.7 million, we recorded a net profit of EUR 5.9 million for H1, slightly lower than last year. Now let's look at the increase in profitability, how it translated into cash generation. Our strong profitability enabled us to generate a solid unlevered free cash flow of EUR 32.3 million in H1 2026. Our CapEx, if we exclude M&A, amounted to EUR 238 million, EUR 238.5 million exactly, in H1, and it represents 43% of our revenue. Our growth CapEx accounted for 30% of revenue, and again, 11 points of our CapEx were deliberately front-loaded ahead of H2 to secure component availability and contain hyperinflation. Recurring CapEx represented 13% of revenue.
Our level of CapEx is compensated by our profitability and change in operating working capital requirements, which was higher than usual and amounted to EUR 54.7 million in H1. It includes phasing effect due to late orders in February. All in all, after leases and financial charges, our levered free cash flow stood at EUR -14.2 million. Now let me give you a detailed view of our CapEx on the next slide. Our CapEx, again, excluding M&A, represented approximately 43% of revenue in H1. Let me explain the key moving parts. First, on the hardware CapEx, it represented 33% of revenue, EUR 187 million. It's a step up compared with 27% in H1. As I already mentioned, this was a deliberate decision in face of a global supply crisis on memory and disk components to first secure our component availability and contain cost hyperinflation.
Second, our infrastructure and network CapEx came down to 2% of revenue, EUR 11 million, with some phasing effect from H1 to H2. Product and software CapEx remained stable around EUR 37 million, 7% of our revenue, reflecting our continued investment in expanding the product portfolio, notably with new Public Cloud services and mission-critical offerings while we control our costs. Other CapEx remained marginal, around 1% of our revenue. Now, given the exceptional supply environment, we have adjusted our full-year CapEx guidance, which I will walk you through on the next slide. As I just mentioned, the global component crisis, particularly on memory and disk, has led us to adjust our full-year 2026 CapEx guidance. I will take you through the bridge on this slide. You remember our initial guidance was 30%-32% of CapEx as a percentage of our revenue.
The exceptional hyperinflation on memory and disk components adds approximately 3 percentage points. However, we decided to front-load some of those CapEx, and by doing so, we realized a saving of approximately EUR 10 million in our H1. We are already partially offsetting the inflation impact through proactive timing, and we are securing our supply. This brings our new FY CapEx guidance to 33%-35% of revenue. This adjustment is cyclical and not structural. It reflects the current component inflation environment. We have already passed through price increases to part of our customers effective April 1st, and we continue to monitor the situation closely to calibrate further adjustments as needed. On top of this, we are going to build a dedicated stock of approximately EUR 50 million in memory and disk components.
Those are standard components and there are no obsolescence risk, and it will be strictly earmarked for 2025 consumption. This exceptional envelope allows us to secure availability. This is very important, and we lock in pricing ahead of further anticipated cost increases. Here again, by purchases in H2 rather than at the beginning of 2027, we estimate additional savings of approximately EUR 15 million. In total, EUR 10 million in H1, EUR 15 million coming up in H2. Our front-loading strategy generates EUR 25 million savings that would have been lost had we waited. To finance this EUR 50 million of lock-in stock for 2027, we will use a dedicated exceptional financing facility. Our underlying business generates sufficient cash to cover all our FY 2026 investments and delivering a positive levered free cash flow in FY 2026 that we confirm today.
Including exceptional and dedicated financing for those lock-in stock for FY 2027 CapEx. Let me now turn to our balance sheet and financial structure. That will be my last slide. Our financial structure remains robust and well-positioned for the future. Our net debt stood at EUR 1,125 ,000,000 at the end of February 2026, and it's broadly stable compared to August 2025. Our leverage ratio has continued to decrease 2.6x our EBITDA, in line with our debt policy. The all-in cost of debt remained unchanged year on year at 4.4%, demonstrating the quality of our hedging strategy. Available liquidity stands at EUR 236 million, comprising EUR 36 million in cash and our undrawn EUR 200 million multipurpose credit facility.
As you can see on the right-hand side of the slide, we have no major debt repayment before FY 2030, giving us significant financial flexibility. Our funding sources are well diversified. We have our EUR 500 million inaugural bond at a fixed rate of 4.75%, maturing in FY 2031, rated BB- by S&P and Ba3 by Moody's. Our EUR 450 million EU taxonomy aligned green loan maturing in FY 2030. It's a first for a European cloud player. Our EUR 200 million EIB credit facility, and finally, our undrawn multipurpose facility of EUR 200 million, and this credit facility was also converted into a sustainability-linked loan, further reinforcing our commitment to responsible financing. In summary, we have a strong, well-hedged balance sheet with no near-term refinancing needs, supporting our path to positive free cash flow.
Now I will hand over to Octave to discuss our outlook.
Thank you, Stéphanie. For the FY 2026 activity, our guidelines doesn't change. We anticipate like-for-like revenue growth 5%-7%, adjusted EBITDA margin more than FY 2025. CapEx, adjusted CapEx, if we consider really FY 2026 activity, it will be 32%-35%. That is a little bit more. Levered free cash flow will be positive for this FY 2026 activity. Now we are ready for your questions if you have any.
If you wish to ask a question, please dial pound key five on your telephone keypad or press the blue hand icon. The next question comes from Inès Mao from BNP Paribas. Please go ahead.
Hi, Octave. Hi, Stéphanie. Thank you for the presentation. I just have two questions. The first one is on your CapEx breakdown. I look at the CapEx breakdown by components. I see that hardware was up as percentage of revenue, which was voluntary, but if it was only hardware, why was also recurring CapEx higher in H1 year-over-year? My second question is, can you comment further on potential pass-through price increases to moderate the impact of this pricing cycle on CapEx? Is it still on the menu or yeah, can you give us more color on this? Thank you.
Yes. Thank you, Inès. We have a slight increase of our recurring CapEx to 13% of our revenue. This incorporates also the impact of inflation that started to kick in, particularly in our Q2 numbers. As for the price increase, we have already started to partially pass through the impact of this inflation. We launched the first initiative around increasing our prices April 1st. We are doing it tactically. We don't price all our customer bases. We focus particularly on the new configurations, on new customers, and also on products where we have less price elasticity. Obviously, we remain very careful, like we mentioned, and we will continue to monitor the evolution of the prices to be ready to react and to engage into potentially new price increases if needed.
Okay. Thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad or use the blue icon on the webcast. The next question comes from Derric Marcon from Bernstein. Please go ahead.
Yes, good morning. Thank you for taking my question. The first one is on price increase. Can you quantify the impact that it will have in fiscal year 2026? What was factored in the unchanged guidance of +5%, +7%? If we look t o 2027, what would be the impact of this price increase? That's my first question. The second question is about the telephony and connectivity. Do you see the trough coming in the next quarters? Or where do you see the trough for this business? Because it's still waiting on the performance of Web Cloud in H1. My third question is on AI. Could you quantify, please, the impact of AI on the Public Cloud growth? Thank you.
Thank you, Derric, for your question. First on the price increase, we've just launched them a few days ago. Like I said, we've done tactical price increase, and this will have a gradual effect. We have some of our customers that are committing. Bear in mind that this will flow through over several quarters. We will also monitor the impact of this price increase. So far it's too soon to tell you a clear impact. In any case, on that basis, we have decided not to change our guidance, and we confirm the 5%-7% range for this year. Again, for the same reason, we monitor the impact in our Q3. We'll have a better view probably at the end of Q3 of this impact.
We will work also on the guidance for 2027 in the coming months, and we'll get back to you with indications and guidance for 2027 at the end of October during our full year communication.
On the VoIP and the access, thanks for this question. No, we don't see the change for the moment. We started to work on the web pages, on the offers, just last quarter, and it's still work we are working on. I hope that the next quarter, which will be done, and we'll start seeing the difference in this decrease of the revenue, because it's impacting the perception on our growth on the Web Cloud. It's sad to have this decrease of the revenue while we're doing well on the domain name or the emails, et cetera. I understand your question. Still, the work will be delivered, I hope it will be May 1st or June 1st on the new range of the Web Cloud and the new range on the VoIP.
When we will see also what to do exactly, we have different options for the access for the connectivity.
Your last question, Derric, was on the AI contribution. You remember, we always mention, and that was true so far that we remain cautious with regard to AI, considering the level of return on investment that we've seen so far. The contribution remain quite small because we invested tactically to answer also some requests from our customers. It's around 1 point, like in the previous quarter. Now, you may have seen the announcement last week. We've decided to launch our AI lab. We've made a small acquisition for Dragon LLM. Last point is that in the context of this inflation on the standard components, we do see a clear improvement on the GPU return compared to CPU. Now it looks like we could achieve similar return on GPUs and on some of our CPUs.
Basically what I'm saying is that we are seeing an evolution on the market and on the economics, and we are ready to invest in the coming quarter more significantly in AI.
The next question comes from Qihang Zhang from Lazard. Please go ahead.
Yeah. Hello, thanks for taking my question. It's regarding your levered free cash flow guidance. It's guided to be positive for financial year 2026. Could you please elaborate more on this front? Is the EUR 50 million locked-in stock for 2027 included in this guidance? And how should we think about the working capital for this year? Thank you.
Thank you for your question. To be very transparent on the levered free cash flow, like we explained, we are going to acquire components ahead of 2027 that will be clearly isolated and stocked for 2027 for EUR 50 million. That will help us secure our supply chain, and also by doing so, it's prudent management because we will generate what we estimate around EUR 50 million of cost savings. We are going to invest EUR 50 million more exceptional, and in front of it, we are going to set up an exceptional short-term financing of EUR 50 million. Those two elements will be included in our levered free cash flow and neutralized. Basically, on, I would say, adjusted for 2026 basis, our levered free cash flow is going to be positive in 2026. We don't guide for any specific numbers. It will be, in any case, about zero.
Working capital, we don't guide also specifically. You see that we have some positive impact for this semester because we had some payments that were out of the period. It will also depend on the timing of the reception of the CapEx. We could be too soon to comment on our working capital for the full year.
Thank you for your questions. I hand the conference back to the OVH management for any closing comments.
Perfect. Thank you very much for your question. Just to have the key takeaways. Highlights, 5.5% growth like-for-like. Adjusted EBITDA, that it's a record from IPO and the front-loaded CapEx for FY H2 2026 and a locked in stock for CapEx FY 2027. Last, strategic initiative. We wanted to highlight three of them. Defense market, we go after this. Going after the acquisition of the small customers, digital customers, having more pressure of that and going after this more regular mid-size deals, and also launching our AI lab with the acquisition of Dragon LLM. FY 2026 guidelines, 5%-7% growth like-for-like. Adjusted EBITDA more than FY 2025. Adjusted CapEx, 33%-35% of the revenue and positive levered free cash flow. I want to thank you for all your questions at the time and have a very good day.
Thank you very much.
Thank you.