Ladies and gentlemen, welcome to OVHc loud Q1 FY 2026 revenue. Today's speakers will be Octave Klaba, Chairman and CEO of OVH Cloud, 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. Thank you very much for being with us today for our Q1 FY 26 revenue conference call, and we would like to wish you a very happy New Year 26. Let's start with slide two for our key highlights of the Q1 26. So, as we announced, we generated EUR 275 million in revenue. We made 6% growth like for like, and we have a solid rotation rate of about 105%. With these Q1 FY 26 figures, we maintain unchanged financial discipline. We can confirm our FY 26 guidance, including free cash flow positive generation. Regarding our business highlights, some highlights: it's for us, we signed additional mission-critical deals. We announced the LCH, but also we signed several contracts on our offer OPCP on-prem cloud platform.
We continue to expand our presence to meet sovereign demand after Paris and Milan. We announced deployment in Berlin that will be open early in 2027. We've been working on providing high-performance AI workload. We partner with SambaNova to provide high-performance AI workload dedicated for large-scale inference. If we talk about operational initiatives, of course, we probably talk about we redesigned early in 2025 our supply chain that allows us today to deliver our services to our customers and, at the same time, respect our investment on the budgets. The second is we started to implement, and we accelerate the implementation of AI usage internally to boost our productivity in the different areas, different departments. We focus a lot on the website, on the user experience of the website, on the support, on the billing improvement, specifically for the digital starters.
And the last one is that we didn't change any discipline on the cost. We really focus on the cost. We really have this model of the fixed cost that will allow us to really have this protection on our margins. I will let Stéphanie to talk about more details about financial results.
Thank you, Octave, and hello everyone. This is Stéphanie speaking. Thanks for being with us, and of course, happy New Year to everyone. So, as Octave said at the beginning, during this Q1 2026, we delivered a like-for-like growth of 6%. So, this was driven by first, private cloud up 4% like-for-like. Second, our public cloud segment, very dynamic, up 15.8% like-for-like, and which is a first contributor to our growth. And third, web cloud up 2.3% like-for-like. Let me now turn to slide five. We'll do a deep dive on each of our business segments. So, first, in the private cloud, which includes Bare Metal Cloud and Hosted Private Cloud, we delivered EUR 167 million in revenue in Q1, which represents 61% of the group's revenue.
As highlighted on the right-hand side of the slide in Bare Metal Cloud, so for starters, our customer acquisition strategy is delivering its first results with an increase in number of customers. For scalers, now we delivered a solid growth from existing customers, which demonstrates our capacity to upsell and cross-sell our customer base. And for corporate, we are impacted by the turn of two customers that decided to re-internalize their infrastructure. On Hosted Private Cloud business, now we are seeing early adoption of our new offers from starters. We're now focusing on finding the right price positioning to further accelerate. Scalers continue to optimize their infrastructure, and corporate kept on delivering a good performance driven by the demand for sovereign offerings in Europe. So now we move to the next slide. We'll talk about public cloud. In Q1 2026, our public cloud segment reached EUR 58 million in revenue.
It represents 21% of total revenue, and it grew by 15.8% like-for-like. In our public cloud core business, which means IaaS and PaaS solutions, we benefited from a solid starters customer acquisition, supported by the ongoing upgrade of our website, our marketing, our customer onboarding process, and support. Scalers also grew significantly, driven by a strong demand thanks to our product cross-sell capacity. And for corporate, we had a decent start to the year, even if we still need some additional features to fully unlock the segment potential. In addition, the rollout of public cloud in our three AZ regions is boosting cross-sell opportunities. It attracts new customers that are seduced by our mission-critical offerings. Finally, regarding our entry-range offers, VPS, it's back to high single-digit growth this quarter and supported by the launch of a new range requiring additional supply capacities.
We move to the Web Cloud segment now on slide seven. The Web Cloud segment reached close to EUR 50 million in revenue, 80% of total group revenue, and it grew by 2.3% like-for-like. If we exclude our legacy subsegment, so telephony and connectivity, growth reached 5.5%. The performance is driven by the first results of our new competitive positioning for Starters. Again, we are working on improving the customer experience to improve the growth of the segment. Regarding Scalers, we are implementing a dedicated partner program tailored for web agencies to make sure they have a seamless experience and can grow at OVHcloud. Looking at our geographical split now on slide eight. In France, revenue grew by 5.1%. Public Cloud delivered a strong double-digit like-for-like growth driven by good customer acquisition.
In private cloud, we signed mission-critical and OPCP contracts, and in web cloud, the new positioning is starting to show first results. Let's now look at our international sales, which account for 52% of our revenue. First, in the rest of Europe, growth reached 4.1% like-for-like. We recorded a satisfactory early start for public cloud of the Milan 3- AZ region, and private cloud performance was impacted on the other side by the departure of a corporate customer. In the rest of the world, Q1 like-for-like growth is 10.5%. Growth was driven by the encouraging rollout of public cloud in the United States, while private cloud growth in the region remained resilient in the first quarter. I will now hand over to Octave for the final slide on the outlook.
Thank you, Stéphanie. So, let me confirm our guidelines for FY 2026. So, we expect to have this like-for-like revenue between 5%-7%, adjusted a bit the margin above FY 2025. CapEx part of the revenue 30-32%, and of course, a levered free cash flow positive. Now we are open to the questions that you probably have.
If you wish to ask a question, please dial pound key five on your telephone keypad or press the blue hand icon.
Hello, you're able to hear me?
Yes.
Yes.
Okay, hey, sorry. Morning, yeah, morning, Octave. Morning, Stéphanie. Happy New Year. I've got a couple of big picture questions if I can. Firstly, I guess we've seen increases in memory and other component pricing in recent months. Can you talk a little bit about that strategy you have to mitigate those factors as you go through the rest of FY 2026, both in terms of procurement and maybe in terms of eventually passing on some of that through to pricing? And then secondly, through last year, there were increasing discussions around the EU's early stage plans to help fund the creation of AI gigafactories across Europe. I'm not sure we've discussed this topic previously, so it's a pretty simple question. I guess, how do you think about that topic?
Is that an opportunity you have any interest in potentially participating in should maybe France or some other adjacent country be granted one? Thank you.
Okay, so on the first question about the CapEx, as you know, there was a global memory and disk supply chain under pressure. One year ago, we knew that it would happen. Okay, so we started our anticipation one year ago. So what we have done is that we took a step ahead and successfully changed the supply chain early 2025 with optimization of component management, which increased the availability of the assembling servers. So for FY 2026, thanks for this anticipation, we don't have an impact on the cost of CapEx. Why? Because we have built in the inventory of FY 2025, and early in FY 2026, we make the support to our growth trajectory in all our FY 2026. That means that we pull in the CapEx between September and December that will protect our prices for all FY 2026.
So that's why we control all the costs for FY 2026. In FY 2027, we anticipate the increase of the cost of CapEx linked to this shortage. You know that, as I said, OVH will be in this step ahead mindset. So if there are any decisions to make, we will be first to make that on the market. On the AI gigafactories, so we've been talking about this initiative with the European Commission, and we were very surprised about the fact that all the initiatives, they are per country. And even if we talk about the European Commission, we don't talk about Europe. And as a European cloud provider, we don't have just a country-by-country strategy. We have a global European strategy.
This is why, because of this initiative, we started to talk with the different partners, maybe future partners in Europe, different countries to build something across different countries and not just France, Germany, Poland, Spain, etc. We would like to design, build something that is more by six, seven countries. Of course, it doesn't mean that it will be one big data center, but with a lot of GPUs, but it will be more per country, smaller, but more per country with more sovereignty and approach than what we see for the moment on the market. We continue to follow this initiative and to see what it will mean in the future.
But for the moment, we prefer to build that with the future partners that we are talking with, because also what is really important is that we want to talk about the revenue, not just talking about the CapEx and not about the OpEx, about the data center, but also who will pay for that at the end of the day. And for the moment, it's just the initiative to create the assets, but nobody talks really about how it will be used and who will be used and who will pay for that. So our approach, it's more pragmatic, talking with the go-to-market partners in every country that will help us to deliver the revenue, to find the customers, to find the needs and deliver the products, more than capacities, CapEx, and etc. So we are more in this mindset for this kind of initiatives.
That's very interesting. Thank you, Octave.
The next question comes from Derric Marcon from Bernstein. Please go ahead.
Good morning, everyone. Happy New Year on my side as well. Two questions, if I may. The first one, Octave, can you give a timeframe for the EUR 2 billion revenue target you set this morning in the press release? Is it a five-year, seven-year story, or less than five years? It would be interesting to understand your mindset on this target. And the second question, on the initiative you took since you returned CEO of the company, what was the payback or the early payback you have seen already materializing in the figures, or let's say the performance of the company since the start of fiscal year 2026, and what remained left on the table for the coming quarters? Thank you.
Perfect. Thank you. Maybe I will start on the second question. So if we talk about, we've been talking about the digital starters. So yes, we see the results of some initiatives that we already took, but we need to continue to work. And the initiative for starters is really launching the entry-level offering, is really price overpositioning for the bare metal, hosted private cloud, and VPS, and it started to work. So we see on the VPS, we have more demand that we can deliver. So now we are working on the supply to reach the targets of the CapEx that we want to spend for this range of product. On the hosted private cloud, public VCF started to have the first customers.
We are still in the process to improve the product and to deliver additional features, but we see that the product started to have the customers and to be used with the new kind of customers. On the bare metal, it's something that we started a few months ago, and we see that it's really, we are back in this, let's say, T1, so it's really entry-level bare metal. Now we are in this process on the public side, this first. We continue to improve some products. For example, right now we are working on the VoIP. We are working on the Web Cloud. We are working on the VOD additional product, and it's still ongoing. On the other hand, once we have this entry-level successful, now we need to farm these customers and to help them to grow in OVH.
We see the additional opportunities that we didn't see three months ago or six months ago, that we will start right now to really bring allow OVH to grow faster thanks to these additional customers and this successful that we already have in a few products. So this is for this question about EUR 2 billion. You know, it's really a question of the mindset and organization internally. Today, we have a company that can deliver EUR 1 billion plus. Okay? I think if we don't change anything, we are able to deliver EUR 1.4-1.5 billion in the next years easily, but we cannot deliver EUR 2 billion. So the first things that we need to do, it's really to set up internally the company so they can deliver EUR 2 billion. And it's really understand what does it mean to deliver EUR 2 billion revenue in just one year.
How many data centers, how many servers, how many products, how many customers, and what is the right organization to reach this EUR 2 billion revenue? This is the mindset that I try to push in the company and the reflections about, do we have the right people? Do we have the right organization? Do we have the right processes inside of the company to deliver this EUR 2 billion? My goal, it's really to prepare this company to make this EUR 2 billion, to have the right people to change the things that don't work today, but has to work tomorrow to deliver EUR 2 billion. Once we have this overview and we know what does it mean and we start to implement that, I believe that we will have the first result and we'll be able to give you the date when we will reach that.
For the moment, it's really the mindset inside of the company that they want that everybody has in the mindset, in the head, to say, we have to deliver this goal. What do we need to change internally to deliver this goal? What does it mean?
Yeah, but if you want to reach this goal 10 years from now or 20 years from now, you know it's a different story. So.
Of course, of course. But you know, I didn't come back to deliver that in 10 years, okay? So believe me, I want to reach that as soon as possible because, again, EUR 2 billion will be a step. This company, it's amazing. We have so many talented people. We have the products. We have built last year's additional products. We have this amazing market and a lot of opportunities on the sovereign market in Europe. And now you have to just bring that all together to deliver and to deliver EUR 2 billion will be the first step of this expansion of OVH in the next years. And believe me, I want to deliver as soon as possible. And once I'm sure about date, I don't want to bullshit, okay? I want to give you the right date that I will reach.
For the moment, I try to set up the company that everybody thinks about that. We are aware. What does it mean? We know how to deliver that. Once we have this confidence about the delivering and we see that in the first results, I will be back to you in two hours' time.
Yeah, and Octave, one more question on that target. At 2 billion, what would be the proportion of the revenue coming from the U.S. in your mind?
Yes, it's part of the right questions. It's also what parts in Europe, Asia, but also about the products and also about the go-to-market. So we are in this three-dimensional way of thinking about all these geographies, all this universe of products, and all this go-to-market. And we need to make work all of them in the same time. This is the challenge. This is how this company can be successful. When you work on all the universes of products, you don't forget one, where you work on all geographies and you go after all kinds of customers. And again, if I go back to the fundamentals of the company, we have a lot of them, except one. We are not good in the acquisition of new customers today. We have the right product, but we are shy on the commercial part. We need to upgrade this part of OVH.
And my real focus, my initiative, it's really about the acquisition of the new customers. So believe me, what is really important is to build the right strategy and the right tools so we are able to acquire a lot of customers. So we have today discussions in board, but also internally about how we can accelerate acquisition of the new customers. One of the questions that is really fundamental is how, in 2030, okay, so it's just five years, everybody in Europe can know that OVH exists, is delivering the digital products, is delivering the public cloud, is delivering the digital experience, digital environment to build the product and to be in the whole economy. Okay? So my goal right now is thinking about how we can reach this target to be known by every European citizen.
Because once we are in this mindset that everybody in Europe knows that we exist, we deliver this kind of product, they can test us very easily, they can use our products, then we will be able to farm them and to help them to grow in OVH. But we need to solve this issue about the acquisition and the awareness, really advertising, creating the brand, not just in France, but also in Europe. And this is the way that we are thinking about that. And my goal is really in 2030, every European citizen knows us. Okay? This is my target, that everybody knows that we exist and we deliver what we deliver.
It's clear. Thank you.
Thank you for your questions. I hand the conference back to the OVH management for any closing comments.
Thank you very much for your questions and for this call. So just the takeaway, the first range of the takeaway is that we made this EUR 275 million revenue and 6% of like-for-like revenue growth. We have the additional mission-critical deals, and we continue European expansion in Italy, in Germany right now. The second is operational initiative on the cash flow generation. So we optimized the supply chain to secure our cost and server availability. We are working on the usage and on the AI internally to improve our productivity. And we keep being disciplined on the fixed cost on OpEx in the company. And the last one that we confirm our FY26 guidelines, we have this like-for-like growth between 5% and 7%, adjusted a bit above FY25, CapEx 30-32, and the positive free cash flow included free cash flow. And thank you very much. Again, have a good day.