Hello, and welcome to the Full Year OVHcloud 2023 Annual Results. My name is George, I'll be your coordinator for today's event. For the duration of the call, your lines will be in listen-only mode. 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 Mr. Michel Paulin, CEO, and Ms. Stéphanie Besnier, CFO. I'll now hand the call over to the OVHcloud team to begin today's conference. Thank you.
Hello, good morning, everyone. I am Michel Paulin, CEO of OVHcloud. Thank you very much for being with us today on for OVHcloud 2023 annual results publication. As you can see, we delivered a sustainable growth in 2023, with a total revenue that reached EUR 897 million and a like-for-like revenue growth of 13.4%, in line with our targets. We reached an adjusted EBITDA of EUR 325 million on a margin of 36.3%, also in line with our targets of a margin above 36%. In terms of value creation, we are able to give you a strong proof point, sorry, proof point of strength of our model, with a generation of EUR 25 million of unlevered free cash flow in the second half of 2023.
Regarding CapEx, we invested 24% of our revenues in gross CapEx, mostly new data centers, new R&D of new products, and we invested 16% of our revenue in recurring CapEx, the CapEx needed to maintain our revenue unchanged compared to the previous year. On the next slide, let's have a quick focus on the very strong last quarters we had. As you can see, we had a strong Q4 with a +14.5% like-for-like revenue growth. Market with a very strong quarter for the cloud businesses, with Public Cloud growing at 22.8% and Private Cloud growing at 16.4%, driven by market share gains in particular.
The trends we have driving this performance are, among others: a continuous acceleration in Europe after an already strong first nine months, a growing demand for sovereign solutions quarter after quarter, a continued ramp-up our newly developed PaaS platform as a service solutions, and a confirmed high customer loyalty with limited customer churn and strong PaaS growth. In this fourth quarter and the second half overall, we have kept our cost discipline unchanged, which led to an improving margin in H2 compared to H1, up to 37.1%. For the next slide, we are really giving the key differentiator to deliver growth and create value. OVHcloud is very well positioned on the market, structurally poised for strong, long-term growth.
The migration to cloud is still early stage with the trends of hybrid and multi-cloud, and we keep seeing new usages emerging, such as, of course, artificial intelligence, for instance, which will be a new growth engine. We are very well positioned on this market and have strong key differentiators. ,e are the only European cloud provider with best-in-class technological offering that can help our customers make a difference when they develop their applications. We are the data sovereignty champion. With OVHcloud, your data are safe, well protected, and immune to any extraterritorial law. We have the best value for money offering, with highly performing products at very competitive, transparent, and predictable prices. And thanks to our unique, fully integrated industrial model enabled, we are world leaders in terms of energy and water consumptions.
Our customers can benefit from one of the lowest carbon footprint in the industry and monitor their own carbon footprint, thanks to our recently launched carbon calculator in the manager. The next slide shows the long-term investment strategy starting to bear fruit. As you know, we have key differentiators to succeed on the cloud market, along with a clear long-term strategy to gain market shares and to continue to expand. This strategy was presented during the IPO two years ago, and it starts to bear fruit despite the complex macro situation. We target new segment of customers, we address a larger market, and we continue to expand geographically. We have been delivering the three axes. On the left, on the key customer segments, we have strengthened our customer mix with larger accounts.
Between 2021 and 2023, we have doubled the number of customers that spent more than EUR 1 million at OVHcloud. We had almost 30% ARPAC growth during the period, highlighting our capacity to grow with larger customers, and we have developed a large and successful indirect channels with a network of more than 1,320 partners that are selling OVHcloud products and offerings. In the middle, on the larger addressable market, we have made significant investment on products since 2021 by reaching 40 new PaaS services in 2023 in all, all four, seven pillars. We continue to develop the offering as the roadmap is not yet finished, but it already bears fruits, and we are in the right direction to target a larger addressable market and start gaining market shares.
On the right, then, on the geographical expansion, we have also significantly investment in new infrastructure since 2021, as we will be present in 19 locations by 2024 in 9 countries, as we open in India this year, and we'll have 45 data centers in 2024. We are focusing on increasing the occupation rate of all these new infrastructure, and the recent acquisition of gridscale will give us more flexibility to open with much more lower CapEx, new small locations, but I will come back on that later. The next slide is about the example of container as a central piece to move towards cloud-native application. On this slide, we want to do a quick deep dive on some products. The first one is Kubernetes, our best performing PaaS today.
With very quickly, managed Kubernetes enable customers to manage their applications with much more easily and to scale in a seamless way with very few constraints related to the infrastructure. Also, it gives the possibility to customers to upgrade only a part of their application without impacting their other services. Kubernetes were now one of the first PaaS to be rolled out. The ramp-up phase was longer than we observed with new PaaS, as we have improved our overall customer experience for those products, and our customers are more and more aware and educated on the products we have. We continue to strengthen the enablers products that ease the possibility to make products work together and improves the cross-sell rates. On the right-hand side of the slide, we show that the ramp-up in terms of revenues versus CapEx look like for Kubernetes.
This was the first PaaS we launched, and it is a good illustration of how it works for our other PaaS solutions. As you can see on the chart, we have some development CapEx up front before the product generates revenue, and then only have variable hardware CapEx related to the infrastructure on which customers use Kubernetes. The business model of all our PaaS is very interesting for additional revenue we make on the same amount of CapEx, and that we have only, and because we are selling infrastructure. Let's talk about... As we said last quarter, the AI wave represents an incredible opportunity, but a lot of questions on the use case and the business model. To any company, the tech companies or usual companies that want to deploy AI solutions, you need four things: You need powerful, I mean, you need really powerful compute and storage capacity.
You need data, and clean data, and private data. You need software and LLM, and you need also expertise. OVHcloud allow affordable access to all of them. That's why at OVHcloud, we have built a clear offering based on these four pillars to serve our customers on use cases that are identified, because you need all of them to be successful in the AIS- AI deployment. The first pillar about compute, on which we offer one of the best technological offering, is computer storage and network. We have been rolling out our new built-in cloud GPU from NVIDIA, one of our partner, and we will continue with H100 very soon. Network and storage are also key for AI workloads, and we are very proud of having one of the best technological offering in these two aspects. The second one, data. Data set.
How to provide tools to create private, clean data sets, which will allow all the elements after to grow on AI and to model and to train models. OVHcloud have an existing offering that enables customers to efficiently, with full transparency, to have these private data sets. The third pillar, of course, of the AI product layer, is the software and the LLM, the data platform, the algorithm. We have already rolled out some of our products, and we continue to develop others internally. It's a clear focus for us, and we will give our customers the state-of-the-art products to build their AI use cases on our products, and that will drive consumption of infrastructure. The last, but very important pillar is expertise, and we have really improved our customer assistance and our ability to better serve customers.
Moreover, we have introduced sponsor services to help our customers to introduce AI technology within their own workloads. All these initiatives are part of our selective investment plan and have clear business models behind. Moving on the next slide, I will give you some highlights on our business performance. So let's now have a look with more details at 2023 business performance. First of all, the growth in the cloud business has been very strong at 16.3%, like-for-like, driven by the Public Cloud with a growth of 21%, reaching EUR 155 million in absolute terms. The Private Cloud has been growing significantly, also at 15.1%, reaching a total of EUR 560 million.
The Web Cloud had a more muted year, with a growth of 3.1% for a total revenue of EUR 183 million. On the next slide, we have more details on the last quarter performance. First of all, Q4 has been the strongest quarter of the year, with a 14.5% organic growth. If we look at each segment, we see that we had a sustained business dynamic in the cloud segment, with a like-for-like growth of 22.8% in Public Cloud, with a continued acquisition of new customers and an unchanged good trend of ramp-up with existing customers.... We have reached EUR 16 million of annual revenue rate in September and EUR 23 million in PaaS, which is also contributing to the good quarter.
In Private Cloud, with +16.4% like-for-like growth, we are definitely growing faster than the market and gaining market share. The Bare Metal Cloud registered a strong quarter, driven by France and Europe. Hosted Private Cloud delivered a double-digit growth, supported by new offering, and this segment has also been fueled by the continued growth in APAC, and we have reached EUR 8 million annual revenue rate with our SecNumCloud offering in France. Finally, in Web Cloud, we grew single-digit with a good enterprise channel. Overall, the legacy sub-segment telephony and connectivity are weighing on the segment growth, as we will be growing at +6% like-for-like without these sub-segments. The next slide is about the cloud business increasing contribution for fast-growing PaaS and sovereign products.
As you can see on this slide, the cloud business has been highly resilient, with a sustainable growth of 17.7% in Q4, and this high growth trend has been confirmed quarter after quarter since already 2 years. The cloud businesses has been fueled by 2 new offerings, the PaaS and the SecNumCloud. On PaaS revenues, on PaaS, sorry, revenues have doubled in 1 year, and we have reached 10,000 customers, and we continue to work on improving the cross-sell and the number of PaaS used by our customers. The other new offering is SecNumCloud, which is quite recent. It has been growing strongly, strongly, thanks to our partners and to our indirect and direct sales teams. It has been multiplied by 4 in 1 year and reached EUR 8 million of revenue in ARR in September 2023.
The next slide is about customer loyalty and ARPA growth. As I have been saying previously, as you can see on the left-hand side of the Slide 15, we have a continued high customer loyalty, with a net revenue retention rate at 110% in 2023, and an unchanged low churn compared to previous years. As we keep growing with our existing customers and with larger customers, as we add another year of double-digit ARPAC in full year, fiscal year 2023. Finally, the acquisition of customers has also had a good trend, especially in the cloud business, with 21,000 new customers in public and Private Cloud. On the next slide, we'll go through our recent acquisition, gridscale. So gridscale is a German company specialized in edge computing. The acquisition has been closed early fiscal 2024.
gridscale team will bring us a unique expertise for deploying Public Cloud regions with very limited upfront investment, as their Public Cloud environment runs on a very light infrastructure. We will be able to leverage very quickly our existing point of presence to create new areas of availability for all our product, public products. So thanks to gridscale, we will accelerate our time to market while reducing our infrastructure CapEx. But now let me now hand over to Stéphanie for the financial details.
Thanks, Michel, and hello, everyone. I'm Stéphanie Besnier, CFO of OVHcloud. Thanks for being with us. So let's have a look to our revenue by geographies first. We've been growing double digits in all geographies in 2023. In France, revenue growth in Q4 was close to 20% like-for-like in public and Private Cloud. In Europe, excluding France, we had another strong quarter, particularly in Central Europe. In the rest of the world, the Indian DC started to contribute, and we continued to have an optimization of workloads from customers in North America. On the next slide, as Michel said at the beginning, we registered in Q4 our strongest quarter of the year and reached on a full year basis, a like-for-like growth of 13.4%.
This growth was fueled by continued strong growth from the cloud businesses and by price increases implemented progressively throughout the year, which contributed 2.7% to the growth figure. Moving to the next slide, we have a detailed view on our EBITDA. As you can see, with a margin of 13.1% in H2, we had almost a 200 basis points improvement in our EBITDA margin between H1 and H2, thanks to our persistent cost discipline in H2. We will keep this discipline unchanged in full year 2024. All in all, we reached an EBITDA of EUR 325 million, a margin of 36.3%. Let's do a deep dive on two of our main costs on the next slide, personnel and electricity costs. As we said previously, we kept a strong cost discipline in H2 that bear fruits.
If we look at personnel costs, hiring were concentrated in H1, and we worked on improving productivity of our teams in H2. Our focus on product development remains unchanged by further strengthening our tech team. For 2024, we will maintain our selective approach in hiring. Keep in mind that the integration of gridscale will weigh on group's margin by a few basis points. On the right-hand side of the slide, we have a deep dive on electricity costs. We had a reinforced visibility with our active hedging strategy. In 2023, electricity costs have increased significantly compared to 2022, and reached 7% of our revenue, of which 2% came from price effects. For 2024, we are hedged at 94%, with the remaining 6% coming from Germany. The price at which we are hedged is comparable to 2023 average price.
We are currently hedging for 2025 and continue to work on long-term corporate PPA, as the one signed in France and Germany, to increase our long-term visibility on electricity costs and to secure low carbon power. If we now have a look at our operating income, which improved by EUR 8 million to reach -EUR 12 million on a full-year basis. It includes some non-recurring expenses related to Strasbourg and some fees related to acquisition. In our DNA, on top of activity growth, we have a ramp up in capitalized projects and right of use amortization that drove in total the increase for EUR 39 million. Below EBITDA, we have interests related to loans that reached EUR 17 million euros. We will have a more detailed look on that later, and some Forex impact of EUR 6 million. Let's move to the next slide on the cash flow statement now.
So as you can see, with the normalization of our growth CapEx, continued improvement and efficiency and stock consumption, we've generated EUR 25 million of unlevered free cash flow in H2. Let me give you on the next slide, a bigger picture on what we've been doing and what we mean by normalization of growth CapEx. In essence, we are now entering a phase of normalization of our growth CapEx, and we're paving the way to cash flow generation. Since 2021, we've consistently expanded our infrastructure, network, and server capabilities. As Michel previously mentioned, we're on track to reach 45 data centers by the end of 2024, positioning ourselves to capture a significant share of the cloud market growth.
However, it was nothing that we've also incurred in 2021 and 2022 exceptional CapEx related to Strasbourg incident, post-COVID supply chain management, and product development initiatives that have yet to yield revenue. Now that we have achieved substantial market coverage and have navigated past these one-off challenges, we're reaping the benefits of our investments and optimizing the data center occupancy. Consequently, our cash flow generation is improving without compromising the growth. On the next slide, we have a detailed view of our growth CapEx, and as I previously said, we're normalizing our growth CapEx. We had exceptional CapEx on servers in 2021 and 2022, but it's been normalizing in 2023, and it will continue in 2024. You can also see that in the last year, we've been investing around 10% of our revenue in both infrastructure and product development.
We will continue to invest, especially in product development, where we look at it as an investment stable in absolute terms, but with a weight in percentage of revenues decreasing going forward. Overall, our model is structurally efficient and flexible, and we keep working to improving and progress on our trajectory to generate sustainable free cash flow, as we did historically. Moving on to the next slide, I want to insist on the strength of the balance sheet with positive trend on cash generation and our investment plan being more than fully financed until end of 2026, when part of our debt will mature. At the end of the year, our net debt to EBITDA ratio is slightly below 2x, stable to our first half at this low level.
Our debt is hedged at 75%, and our current average interest rate is at a low 3.7% all-in. We have more than EUR 500 million of available liquidity, which gives us a strong visibility on our financing as our investment plan is more than fully financed. Ending on this good note, I would now like to hand over to Michel for the outlook and key takeaways.
Thank you very much, Stéphanie. What can we expect for next year? Our financial equation is converting toward generation on unlevered free cash flow, expected to be positive in H2. The projected trends for the upcoming year in terms of top-line growth, align closely with what we observed in fiscal year 2023 and confirm the unchanged long-term appetite for enterprise to move to cloud. This includes a sustained robust growth in ARPAC and a cautious outlook on customer acquisition, given the current market conditions. We anticipate a like-for-like revenue growth of 11-13 in fiscal year 2024, similar to fiscal year 2023. Pricing impact is expected to be slightly lower at 1%-2% in fiscal year 2024, compared to 2.5%-7% in fiscal year 2023. It's important to note that a significant portion of this pricing adjustments will affect the beginning of 2024.
In terms of EBITDA margin, we'll anticipate continued improvement, I mean, 37%+ EBITDA margin in fiscal year 2024. This improvement will be driven by both revenue growth and the disciplined control over operating expenses. Our CapEx should remain at a level consistent with fiscal year 2023, under control in terms of percentage of revenue, with 24% for gross CapEx and 6% for recurring CapEx, paving the way for positive unlevered free cash flow as early as fiscal year 2025, a subject we will discuss in more details on the next slide. So midterm, what we can expect. 2025 will fully reflect the quick adaptation of our model to generate free cash flow on a recurring basis. We expect unlevered free cash flow to be positive on a full year basis from 2025 onwards.
On the back of the tremendous shifts to the macroeconomic environment and increasing cost of capital, we are managing our operating model to be more efficient, more sustainable, and more cash-generating in the short term and in the longer term. We maintain a steadfast belief that the cloud transition is still in its early stages and will continue to unfold over the coming years. This trajectory will propel substantial growth within the overall market, and notably for OVHcloud. So key expectations for 2025 are as follow: Organic growth is expected to be improving compared to fiscal year 2024. EBITDA margin are projected to increase compared to fiscal year 2024.
CapEx are anticipated to be slightly lower than the level seen in 2024, and most undoubtedly, we expect to generate positive unlevered free cash flow on an annual basis for the first time since IPO, but as we used to do historically. We will be able to provide more color on the longer term during our Investor Day. So we are very happy to invite you all to our Investor Day in London. It will take place on January 17 in Canary Wharf, so that is convenient for most of you. Our executive team will be pleased to share more color on our differentiating strengths, strategy, and outlook, and it will be an opportunity to reconnect with you all in person. Now, we can now open the floor to your questions with Q&A.
Thank you very much, Mr. Paulin. Ladies and gentlemen, as a reminder, if you have any questions, please press star one on your telephone keypad. Our very first question is coming from Emmanuel Matot of Oddo. Please go ahead. Your line is open.
Good morning. Emmanuel Matot speaking from Oddo. Several questions from me, please. First, you made lots of progress in terms of CapEx. Do you think you can still do better in the future, moving significantly below 40% of revenue and still delivering, at the same time, double-digit sales growth? Second question, why do you have cautious forecast on customer acquisition for next year? Third question, you do not target any more 25% of organic sales growth in fiscal year 2025. Is that just due to the negative microenvironment, or are there any issues specific to OVH? And my last question, if I may: Do you consider that competition is becoming more fair from hyperscalers? Do you see improvement on that side, or you consider there is still abuse of dominant position from some of them? Thank you very much.
Okay. Thank you very much for your question. And maybe I will start with the last one, and I will go after to the other one because it's a general question. We really believe, and we are not the only one to believe, that today, the cloud market is under unfair practices. And this is not only us, we are telling that. As you know, we have made some complaints on the European Commission, but it's now well known, the Autorité de la Concurrence en France, Ofcom in U.K., but also New Zealand, Netherlands, has opened some investigations about wrong practices done by some players to lock the market and to create de facto monopoly to avoid a fair market. And also, it's at the expense of the customer and the market.
So today, we believe the situation is still in progress, and as we hope that, the regulators and the, I mean, the Autorité de la Concurrence will, really, make everything to adapt and to, also to fulfill with the, I mean, current regulations to have a fair market. So, I think the problem is now known but has to be addressed. About the 25% sales, clearly, we believe that, since the IPO, the world has changed, and, clearly, we believe that, we have to reassess our perspective. Clearly, the world has, I mean, changing considerably, inflation, interest rates, Ukraine, and also all the tension, geopolitical tension.
So we have been investing as part of our long-term plan and started to bear fruit, as you see in the presentation. We do believe that the most reason is a microenvironment, and we believe today that OVHcloud still has the strong pillars to continue to grow efficiently long-term with the profitable growth. To discuss the cautious forecast, we anticipate the like-for-like revenue growth of 11%-13% in fiscal year 2024.
Our expectation for fiscal year 2024 points to a level of growth almost similar to fiscal year 2023, characterized by the sustained robust growth in APAC, and clearly more cautious about acquisition and customer acquisition, given the fact that the current market condition, and you certainly have seen the results of some of our peers, today, is clearly uncertain, as we see customers optimizing their cloud consumption and still delaying some move to the cloud projects. But we are convinced that this move to the cloud, to cloud project will happen at some point. The main contract slide in pricing also with a reduced impact of expected of full fiscal year 2024, projected at 1.2%, as I mentioned already, compared to a 2.7% price contribution last year.
So it will have certainly also an impact on the, I mean, the forecast of next year. On the CapEx, we are absolutely, and Stéphanie will elaborate a little bit on that, convinced that today we are much better on CapEx because of the tight control of our model, and the fact also that we have some inventory effects. You remember that we said that during 2021 and 2022, we decided not to stop the growth, to make some inventories, to be able to continue to fulfill the customer demand. So our ambition is to maintain the right level of CapEx, to continue to have the long-term capacity of double-digit growth.
This is really today what we do, which is the right balance between the right level of investment, CapEx, R&D, product development, ex- international expansion, but we're now jeopardizing the long-term growth. Moreover, we want to have the discipline to have unlevered free cash flow for the full year, beginning of 2025.
To add to Michel's point on the CapEx, so you saw it first, we are starting to enter into the normalization phase of our CapEx in 2023. We had exceptional CapEx in 2021 and 2022, and that is over. Second, we still have some hyper-resilient CapEx, and that will be the case again in 2024, and we expect this program to end early 2025. So this will decrease in the midterm. And last, we've made investment to build our future growth in the development team and the R&D on the infrastructure. And whereas, for example, on the product development and R&D, we expect the amount to remain stable because we keep investing in the growth. In percentage of revenue, it will decrease.
So all in, in the midterm, yes, we're still working on the CapEx and to contain the percentage of revenue that we are spending.
Thank you. That's very useful. Thank you.
Thank you very much, sir. We'll now move to Mr. George Webb of Morgan Stanley. Please go ahead.
Morning, Michel and Stephanie. I have two questions, please. First, Michel, I'd like your latest kind of take on data sovereignty. I know this is a recurring topic, but I guess we've also seen that the U.S. and E.U. have come to some agreement, at least for now. So there's that angle, but also just today, AWS have put out a press release talking about how they're launching their own European Sovereign Cloud offering. So your latest thoughts around this topic would be helpful. And then secondly, on the topic of AI, how should we be squaring your intention to invest in the AI opportunity against cutting that growth CapEx? Many of the other players in this space have been ramping CapEx to target this space, given that the need to go and buy, you know, NVIDIA GPUs or the like.
So anything around that would be helpful. Thank you.
Thank you for your question. About data sovereignty, first one, the announcement I did with less proofs that data sovereignty is a real concern. So, for me, it's a proof. I remember a few years ago when we discussing about this point, it was a little bit of laughs, but the fact it was not a point. Now, all the hyperscalers have announced that they were pseudo sovereign, and I, I will not disclose what I think about the sovereignty, but if it's only the nationality of the employees, which is a sovereign cloud, I think they're missing the target. So we are absolutely convinced today that data sovereignty is still a very hot topic in Europe, but also everywhere in the world.
Clearly, in France, we see that some and the last law, for example, that we have trend law, has demonstrated that this is a rising concern with the fact that now seeking cloud certification include immunity to extract request for immunity from extraterritorial laws. Therefore, we believe that OVHcloud, and we demonstrate in the results that we have in Q4, is today the champion of data sovereignty in France. It's clear that today in Europe, it's not completely developed yet as soon. It's definitely something which is moving in the right direction. The regulations and the certifications are moving with the new EUCS, and we believe that it will also confirm the fact that Europe will create the de facto, I would say certifications, which will guarantee the specific needs of data sovereignty.
And OVHcloud, as we are developing the product globally, will have the same standard of sovereignty everywhere in each region, which will allow us to address Indian market, Singapore market, European market, and also even North American market. So really, for us, it's really a very important, and we believe this is definitely, even so sometimes the regulations are slow. And to be honest, it's we believe it's too slow, but still, we believe it's a long run, I mean, advantage that OVHcloud is offering to the market. On AI, as you said, access to compute. As I said, you need four things to deploy AI in any type of companies. Access to compute today is a challenge, in the sense that it's very CapEx intensive, and moreover, there is a supply constraint.
That's why we believe OVHcloud is offering all the attributes to offer to any type of tech companies or end user, the capacity to have affordable with a capacity of GPU instances that you can rent per hour and to allow the access. The chance we have is that today we have a long-term partnership with NVIDIA, and you've certainly seen the press release we've made a few weeks ago. And we are going to continue to announce that we have already invested in the A100 GPU, and it's available today. And we will announce in the next few days, the availability of the H100, which will allow these customers to use very powerful GPU.
But on top of it, we have developed, and it will be announced during on summit, the 28th of November, a full set of new tools, which allow the customers to manage their data, to clean the data, to be able also to have the data analytics, which allow them to train the model and allow them also to use the tech, the benefit of all the new type of model, including generative LLM, which is the last version of the AI solutions. We have strong partnership with hardware vendors such as NVIDIA. We have strong partnership with software vendors, which are a master like LightOn, Gladia, Diplomatic, and companies which are using the last generation of LLMs, generative solutions. And we believe that we will be able to provide affordable AI solutions.
We guarantee the data privacy and the data, I mean, the private data set for all customers.
That's helpful. Can I just ask one more? Do you have any early view on if server economics change when you're trying to help with some of these AI workloads? I guess if I think back to cryptocurrency mining, as much as it was a growth area for some companies in this space, many weren't happy to do it because it would rapidly depreciate the server life. Have you got any early thoughts on what AI looks like in terms of those factors?
I don't think we have really today the details, the time to give all the details on that. Clearly, for us, it's an opportunity, and we are really sure. What I propose is that during our Investor Day, we'll give you all the KPIs, all the elements to demonstrate that today this is an opportunity of OVHcloud, and we are today really key distinctive element, which provide already good momentum already in our AI perspective and, I mean, growth perspective.
Answered. Thank you.
Thank you much, sir. We'll move now to Daria Ioana Sipos of JP Morgan. Please go ahead.
Hi, thank you for taking my question. Just around the FY 2024 guidance, can you give us a little bit more color on how we should think about the phasing of the growth through the year? I know you mentioned something on pricing being stronger in Q1, but anything else to consider on there? And then similar question on the adjusted EBITDA margin and phasing to the year that we should bear in mind. Thank you.
As we said, I mean, the perspective is to be above the fiscal year 2024 for 2025, and it will be a cautious vision of customer acquisition, plus the capacity today to, as we have demonstrated, to have a high level of loyalty for our customers. Plus, the fact that we are, thanks to the fact that we are investing in new products, we are able to increase the ARPAC of the revenue of the customer. Why? Because as we are providing more and more PaaS solutions to each customer, the revenue per customer is increasing month after month. Moreover, we are convinced that the R&D effort and the takeup, take-off of the PaaS will help us to continue to have high level of growth.
This is why we believe that the cloud activity will generate the major part of the growth, and especially the Public Cloud. The Public Cloud today, as you see, is a very strong market, is very important for OVHcloud. We are growing at more than 20%, this year. We will continue to invest, and PaaS will contribute to accelerate this growth in, the Public Cloud. So this is really, how we believe, we are continuing for the long term to acquire new customers, even so, the economic environment, we are cautious. But to be able to have more and more, especially in the cloud and the Public Cloud, thanks to the R&D we've done, the evolution of, growing double digits.
With regard to margin, keep in mind that we have some seasonality because we have some specific investments in marketing, for example, and we have a higher cost base in terms of personnel in H1. So H1 will be lower than H2, but that is the current seasonality of our margin.
Thank you.
Thank you, Daria. Ladies and gentlemen, once again, if you have any questions, please press star one at this time. We'll now go to Valentin Poulgain of Stifel. Please go ahead.
Good morning, all. My question has been answered in previous discussions, but maybe a quick one. For H2 2023, compared with H1 2023, I understand that gross margin improved rapidly on the web cloud side, but deteriorated sharply in the Public Cloud side. Same applies to EBITDA, if my understanding is correct. So could you please comment on this and give more color maybe on the usual seasonality of Public Cloud earnings between H1 and H2? Thanks.
The margin of H1 EBITDA was improving in H2 compared to H1. We have improved by 1.7% in H2. So, today, as Stéphanie mentioned, we have a slight seasonality effect between H1 and H2, mainly driven by cost, not only by revenue, in the sense that the Public Cloud revenue trends is increased month after month. So, today we are very confident to maintain in all the customers, I mean, the product segments, the capability to increase profitable growth with a high level of growth. And this is what we see, and we have seen in H2 unlevered free cash flow, thanks to the fact that we have be above 37% of EBITDA in the second half.
Okay.
Does that answer your question, sir?
No, sir. Thanks, Matt. Thanks.
Thank you much, sir. We'll now move to Yann de Derlong of Gilbert Dupont. Please go ahead, sir.
Hi. My question is on your full year 2025 targets. So you stopped your IPO guidance, and you said you improved versus full year 2024, your adjusted EBITDA margin. What does it mean for us? Does it mean that we should not target the 42% you targeted before 2026, maybe or after? I'd like to know more about it.
No, I will reiterate what I said. I mean, today we have a guideline for 2025, which is, improved, I mean, of the, adjusted EBITDA, improve also the like for like revenue growth, and we will maintain this, this, I mean, analysis. And we are working, I mean, and we are, having plans to have a positive, on full year basis, unlevered free cash flow.
And we will announce a new medium-term guidance at our investor day in January. But you can already see the teams this next phase of growth from our presentation. We talked about the continued substantial market opportunity, and OVHcloud is now focused on this profitable and sustainable growth. We've emphasized that our period of heavy investment in the last three years is now starting to bear fruit, and we are normalizing the CapEx. We said and stressed that we are and we will remain diligent on costs while continuing to pursue the cost, the, the growth, sorry. And lastly, we said that our business is returning in the next phase to generate cash, just as it was before the most recent phase of investment for the long term.
So you might expect to see the medium-term plan anticipate first growth in this long-term growth market, good margin, controlled CapEx, and an ability for the business to fund itself, but we'll provide more detail on January.
Okay. Thank you.
Thank you much, sir. Ladies and gentlemen, as a final reminder, please press star one for questions. We do not appear to have any further questions at this time. I'm going to turn the call back over to your organizers for any additional closing remarks. Thank you.
So thank you very much for your questions. As a takeaway, we had a sustainable growth in fiscal year 2023, with EUR 897 million of revenues, which is 13.2 or 4% like for like growth. We reached EUR 325 million of adjusted EBITDA and generated 25 million of unlevered free cash flow in H2. We have a plan, and we will continue to address the larger market. We have strengthened our customer mix with larger customers. We have enhanced our product portfolio, and we have expanded our geographic footprint. And for fiscal year 2024, as we target a balanced growth with between 11% and 13% like for like revenue growth and adjusted EBITDA margin above 37, a growth and recurring CapEx around 40...
Sorry, 24 and 16% of our revenue, and we will generate Unlevered Free Cash Flow in H2 fiscal year 2024, and on a full year basis in fiscal year 2025. Thank you very much for your attendance, and have a very nice day.
Thank you very much. Ladies and gentlemen, that will conclude today's presentation. We thank you for your attention. You may disconnect.