Hello and good morning, everyone. Welcome to the IONOS analyst and investor call for our Q3 2024 results. Thank you all for joining us today. Britta Schmidt, CFO of IONOS, will guide you through the operational developments of the business over the first nine months of 2024 and share the financial details for the third quarter. We will also look at our guidance and expectations for each business area going forward. Afterward, Britta will be available to answer any questions. Let's get started. Britta, over to you.
Thank you very much, Stephan. Good morning, ladies and gentlemen, and welcome to our Q3 2024 webcast. I'm Britta Schmidt, CFO of IONOS, and it's a pleasure to have you with us today as we dive into the performance of the first nine months and operational trends. As a reminder, IONOS stands as the leading digitalization partner for European SMBs and a trusted cloud enabler.
First, as you can see on the slide, at the foundation of our business is our web presence and productivity business, excluding aftermarket, which is our largest pillar, generating EUR 667 million, or about 69% of our total revenues, in the first nine months of 2024. This business continues to show remarkable resilience and steady growth, supported by strong underlying margins and outstanding cash conversion. Through a subscription-based revenue model, we meet the full range of digitalization needs for SMBs, including solopreneurs.
We lead the market in Europe and maintain a strong footprint in North America as well. Next, we have our cloud solutions business representing around 11% of total revenues for the first nine months. IONOS is gaining traction as a trusted cloud partner for small and medium-sized businesses. A milestone this year was winning the German federal government as a customer, underscoring our progress and reputation in this sector.
This business is actively managed on a self-sustaining basis, which means it operates sustainably, with profits being reinvested into growth and build-up. Finally, our aftermarket business, focused on buying, selling, and parking of domains, accounts for roughly 20% of revenues in the first nine months. This comparably lower-margin business rebounded from early-year softness, achieving significant year-over-year growth in the third quarter of 2024. We'll explore this in more detail shortly.
Let's now review our overall performance for the first nine months of 2024. We achieved a revenue increase of 7.8%, driven by effective cross-and-up selling, the ability to adjust prices, as well as winning new customers. The IONOS platform model, combined with substantial economies of scale and solid growth, has enabled us to maintain high profitability levels. As a result, our Adjusted EBITDA margin stands at a robust 29.3%.
Our customer base grew by 170,000 compared to the same period in 2023, bringing us to 6.3 million customers. Despite challenging economic conditions and general macroeconomic uncertainties, the IONOS business model has proven extremely resilient and predictable. Our mission-critical products, supported by the dedicated efforts of our personal consultants, have helped us to build and sustain a loyal, stable customer base. Additionally, we have been able to increase our RPU, the average revenue per customer, by approximately 8.5% year-over-year.
Look at our operational performance and key drivers, as shown on page six. Looking at our customer growth, we've consistently expanded our base over the recent years. In the third quarter, we added 20,000 customers, which is slightly lower than the previous year. This was largely influenced by several major events, including the European elections, U.S. elections, and the European Football Championships over the summer months.
In response, we adjusted our brand marketing campaign to emphasize the second and third quarters. However, it's important to note that brand marketing investments often take time to impact customer growth directly. Nevertheless, we saw an uptick in customer growth in September, with continued strong growth in October, positioning us for stronger customer acquisition in Q4 compared to prior quarters. Our pricing approach remains balanced and strategic, aiming to attract new customers, maintain competitive positioning, enhance customer satisfaction, and minimize churn.
The economic environment has given us some flexibility in our pricing strategy, enabling us to explore modest adjustments. Our strong brand presence and the critical role our products play in the customer's digital transformation journeys have cultivated high customer loyalty, which has in turn led to greater acceptance of price adjustments, strengthening our pricing power. In Q3 last year, we began a careful phased refinement of our pricing model.
This gradual process is guided by clear principles aimed at preserving customer satisfaction and keeping impact on churn low. While this adjustment temporarily increased churn slightly, we expect churn to normalize to previous levels as the new pricing structure stabilizes. Over the last 12 months, our annual churn rate was approximately 14%, which is in line with our expectations. Our new pricing structure, which applies to both new and existing web presence and productivity customers, is designed with a long-term perspective.
For existing customers, price adjustments have taken effect upon contract renewal, resulting in a phased revenue impact. With the start of price adjustments in the third quarter of 2023, all existing customers have now also received corresponding price increases over the 12 following months. Meanwhile, we've successfully increased the average monthly revenue per customer or RPU to EUR 15.80 in Q3, supported by our enhanced cross-and-up selling strategies.
This growth highlights our ability to deliver value and deepen customer engagement through innovative product offerings. The expansion of our cloud solution business has also contributed to RPU growth, given that average RPUs in cloud are generally higher. Looking ahead, we expect solid customer growth in Q4, as well as continued increase in RPU. Let's take a closer look at our various business areas.
Our high-margin core web presence and productivity business, excluding aftermarket, achieved impressive growth of 12.3% year-over-year in the third quarter and 11.7% year-over-year for the first nine months. This strong performance is driven by sustained customer growth, the successful increase in RPU through cross-and-up selling, and the gradual impact of our new pricing structures. This business area delivers exceptionally high margins in the high 30s, paired with substantial cash flow and steady growth rates in the high single to low double digits.
Our cloud solutions business, the smallest segment within our group, as said, operates on a self-sustaining EBITDA basis and experienced 7.6% revenue growth in Q3 2024. We remain confident in the continued expansion of this business and are optimistic about the future opportunities it offers. Looking forward, we are focused on enhancing our product portfolio and services to strengthen our position as a competitive player in the market.
For the first nine months of 2024, cloud solutions revenue reached EUR 122.2 million, marking an 11% year-over-year increase. Looking a bit deeper into cloud solutions and its composition, the business is made up of public cloud, private cloud, and managed services. Looking at the individual growth rates, the area of public cloud under the IONOS Cloud brand is growing the strongest, still slightly behind our expectations.
This was also partially influenced by price reductions for entry products to facilitate stronger product adoption and thus indirectly investing in growth in a rapidly expanding market. Digital sovereignty is getting more and more important, yet demand is somewhat lagging behind in our target customer audience. However, we expect revenue growth in public cloud to accelerate in Q4 with a first-time contribution from the ITZ Bund contract.
The managed services business, with lower market growth, is additionally seeing lower-than-expected growth rates, as we decided to adjust the product portfolio, certain products phasing out, with full focus now on helping our customers to adopt our cloud solutions. Our aftermarket business has experienced strong growth in recent years.
Through various initiatives, especially in domain parking, such as optimizing parking pages, improving traffic quality, and integrating of professional partners, we have elevated revenue to a new level. As discussed in our previous webcast, revenue growth in the first half of 2024 was below expectation in the aftermarket due to temporary effects in connection with the launch of the new RSOC product from Google. RSOC stands for Related Search on Content. As the market is currently in a transformative process.
We are pleased to report that the recovery trend we observed at the end of H1 continued into the third quarter. Revenue grew 11.5% year-over-year in Q3, narrowing our year-to-date revenue decline to -4.6%. Although this business will continue to be more volatile than the rest of the business, we expect this positive trend to continue and anticipate that full-year revenues will be in line with last year.
From a profitability perspective, the aftermarket business operates at lower margin than our other segments, with a trailing 12-month average EBITDA margin of around 14%. This margin was slightly lower at the end of Q3 compared to 15% in H1, mainly due to some increase in payouts to domain owners as part of the RSOC product transition.
As a result, the lower revenue levels in aftermarket have impacted our EBITDA by approximately EUR 10 million compared to the previous year, affecting our overall EBITDA performance. However, in line with our full-year 2024 guidance, we expect to offset this impact and uphold our profitability forecast, in fact, slightly increasing our margin compared to our initial guidance. Combined statement: We are on the right track, with aftermarket business showing significant recovery and the strong performance of our web presence and productivity and cloud solutions businesses in the third quarter.
Total revenues in Q3 2024 reached EUR 390 million, reflecting 11.4% year-on-year growth. Our core business, web presence and productivity, excluding aftermarket and cloud solutions, posted solid 11.6% compared to the previous year. Adjusted EBITDA for Q3 2024 came in at EUR 116.4 million, with an adjusted EBITDA margin of 29.9%, slightly down from Q3 2023.
This slight decrease was primarily due to different phasing of marketing expenses and a temporary higher cost in connection with the changing license model, which we are mitigating by product migration as far as sensible. As noted before, major events like the European Football Championship and the Olympics led to a different distribution of marketing spend this year, with more emphasis on the middle quarters.
This resulted in EUR 2.8 million higher marketing expenses in Q3 this year compared to Q3 last year, primarily dedicated to brand building. To reiterate, brand marketing investments do not have an immediate impact on customer growth, but are expected to yield results over the medium to long term. If we adjust for the additional EUR 2.8 million in marketing spend, our adjusted EBITDA margin would have been 13.6%. We see the combined results for the first nine months.
Total revenue for the first nine months reached EUR 1,141.6 million, reflecting a year-over-year growth of 7.8%. Excluding aftermarket, revenue growth was 11.3%. Adjusted EBITDA for the first nine months was EUR 334.5 million. When adjusting for the shift in marketing expenses compared to the first nine months of 2023, adjusted EBITDA increases to EUR 346.1 million. This gives us an adjusted EBITDA margin of 29.3%, or a like-for-like 33.3% when accounting for the different timing of the marketing spend.
As mentioned, we are still working on the mitigation of temporarily higher licensing costs, which is negatively impacting our cost of goods sold and therefore EBITDA. The like-for-like increase in margin, despite all offsetting effects of 1.4 percentage points, is largely due to higher gross margins driven by an improved product mix and the realization of economies of scale, showing the strong operational leverage in the business.
To page 13, let's focus on capital expenditure. Our maintenance CapEx requirements are highly predictable, thanks to favorable server economics, economies of scale, and our advanced technological platform. This stability allows us to efficiently manage and plan for ongoing maintenance and upgrades, ensuring reliable service for our customers. Growth CapEx is directly tied to our future revenue and customer growth potential, particularly in cloud solutions and AI, providing a clear path to return on investment.
In the first nine months of 2024, total CapEx represented 4.9% of total revenue, consistent with last year. Maintenance CapEx was 1.1% of revenue, while growth CapEx was EUR 43.4 million, or 3.8% of revenue. Although maintenance investment appears low, we are benefiting from efficiency gains, including a one-time effect from platform consolidation due to improved packing density of the servers utilized.
For the full year, we expect total CapEx between EUR 80 to EUR 90 million, or around 5% to 6% of revenue, slightly below the EUR 100 million previously anticipated. By maintaining a balanced CapEx strategy, we remain well-positioned to capitalize on growth opportunities, enhance our capabilities, and drive sustainable, profitable revenue growth. Our leverage and debt position is summarized on the next page.
At the end of September 2024, we successfully reduced our net debt to EUR 917 million. Our debt comprises an external bank loan and a shareholder loan from United Internet. As you might remember, in December last year, we partially refinanced the shareholder loan with an external bank loan. This strategic move allowed us to secure more favorable terms and reduce our overall interest expenses. Fixed annual interest rate is at 5.16%, and our leverage ratio improved to approximately 2.2x net debt to LTM-adjusted EBITDA.
By maintaining a disciplined approach to debt management and leveraging favorable refinancing opportunities, we are well-positioned to further reduce our leverage and strengthen our financial stability. This strategy supports our commitment to sustainable growth and delivering value to stakeholders and shareholders. By focusing on reducing net debt and managing leverage, we aim to enhance our financial flexibility and support our long-term growth objectives.
On page 15, you can see the reconciliation from adjusted EBITDA to free cash flow. For the first nine months of 2024, adjusted EBITDA stands at EUR 334 million. We subtract adjustment totaling EUR 14 million, primarily standalone costs and expenses related to the long-term incentive program, arriving at the reported EBITDA. Next, we deduct EUR 56 million in CapEx and EUR 31 million in tax payments. Tax payments were slightly lower due to phasing of payments, which we expect to balance out going forward.
We also add back EUR 5 million for the long-term incentive program, as this is a non-cash item. Working capital was slightly negative at EUR 7 million, which, again, we anticipate will level out by the year end. This results in a free cash flow before leasing of EUR 230 million. After accounting for EUR 11 million in leasing cost, free cash flow after leasing is EUR 219 million. It was worth noting that last year's figure included a nearly EUR 14 million payout for the long-term incentive program, which we have settled with Treasury Shares this year.
After considering EUR 38 million in interest payments, comparatively low due to the semi-annual schedule of our bank loan interest payments, with the first payment in Q3 and a EUR 22 million share buyback as of June, dedicated fully to serve the long-term incentive programs, our comparable free cash flow for the first nine months of 2024 stands at approximately EUR 158 million.
This compares to around EUR 104 million for the same period in last year. The business is performing as expected. We continue to drive effective up and cross-selling with existing customers. Brand perception is steadily rising, and we are enthusiastic about launching product enhancements and new AI offerings, such as the AI Model Hub introduced in recent periods. Additionally, the new pricing structures in Web Presence and Productivity introduced in Q3 last year have now fully rolled out across our customer base, reinforcing our confidence in our financial outlook.
With a strong recovery in the aftermarket business, we are reaffirming our 2024 outlook for currency-adjusted revenue growth of 9%. For the web presence and productivity business, excluding aftermarket, we are targeting a growth rate of around 11%-12%, reflecting the robust performance of this core area. As earlier noted, we expect aftermarket revenue to recover further and to reach last year's level. For our cloud solutions business, revenue growth is projected at 13% for this year, slightly below the previously anticipated 15%-17%.
However, we remain confident in growth opportunities in all sectors. Furthermore, we also reaffirm our outlook for the full-year 2024 adjusted EBITDA margin at approximately 29%, up from 27.4% in 2023, leading to an adjusted EBITDA of around EUR 450 million in this year. Looking forward, we anticipate the adjusted EBITDA margin to improve further, reaching around 30% by 2025.
As you may already know, on September 16, our second-largest shareholder, Warburg Pincus, sold approximately 7 million IONOS shares through an accelerated book-building process. This sale represents around 5% of IONOS Group's share capital. As a result, according to our latest information, Warburg Pincus now holds roughly 16.2% of IONOS Group SE.
The free float has increased by 5 percentage points to approximately 20%, while United Internet continues to hold around 64%. To summarize the key highlights from today's presentation on page 18, first, our business is built on a robust foundation of sustainability and resilience, with the majority of revenues generating from recurring sources. This ensures a stable base for ongoing growth. Looking forward, we have a clear understanding of our CapEx requirements, supported by our well-capitalized asset base, particularly in our expanding core business.
The expected slowdown in Aftermarket growth, something we have anticipated despite the temporary lower revenue growth in the first half of this year, will ultimately lead to reduced dilution of the Adjusted EBITDA margin going forward. Brand investment, which peaked last year, will remain at this absolute level going forward. These investments are essential to support our revenue and margin expansion as we move forward.
Many of the investments in the Cloud Solutions business, such as those for developing infrastructure as a service features, have already been made, creating a significant opportunity for future growth. Our product portfolio has been successfully redesigned to facilitate cross-selling and upselling opportunities and seamless expansion. Regarding AI integration, we are leveraging significant opportunities both in our product suites and internal operations, promising a more efficient and enhanced customer experience.
With our growing market presence and strong reputation, we are capturing an increased share of the market. Overall, we are well-positioned for future growth. With this, let me hand over back to the operator to open the webcast for any questions you might have.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may click the Q&A button on the left side of the Zoom meeting screen and then raise your hand. If you are connected via phone, please press star followed by one on your telephone keypad. If you wish to remove your question from the question queue, you may press star followed by two or please press the lower your hand button. Anyone with a question may click the Q&A button and raise your hand or press star followed by one.
Comes from George Webb from Morgan Stanley. Please go ahead.
Hi, morning, Britta. A couple of questions, please, away from the core business, but good to see the core performing well. Just on cloud solutions, so the around 13% guide for you does suggest kind of high teens growth in Q4. Can you talk through some of the assumptions you're making there? How much is a bounce back of the normal run rate of business in cloud versus how much is the ramp-up of ITZ Bund?
And actually, just an operational progress update you can give around ITZ Bund would be helpful. And then just secondly, on the domain parking business, good to see the overall performance there is back to growth again in Q3. Kind of noted your prepared remarks, but can you talk to your confidence now that aftermarket could sustainably be on the right track as you look into Q4 and FY25? Thank you.
Okay, let me start with the aftermarket business. So yes, good to see it being back on track, which we anticipated. Yet it's still good to see it's coming out like expected. Looking forward, as we said, there's still the product transformation going on in the market. We are confident we can keep aftermarket growing as well going forward. I think time will tell at which growth rate. Nevertheless, it should be growing going forward. We will give more insights into 2025 with our guidance for 2025, but we are confident overall on the business.
In terms of cloud solutions and an operational update around ITZ Bund, we are building up the first blocks in close connection with our customer. Obviously, we expect to build them within the fourth quarter, as I said, which will be a driver of the fourth quarter results, basically. And maybe back to aftermarket as well. In October, we already see good trajectory, which gives us confidence that we will be actually flat year- over- year.
Just one or two more cloud solutions, but why not? I mean, when you think about the Q3 performance objectives of deceleration, is there anything on cloud space or is that a weakening of the market? Is there anything that's in particular driven that deceleration?
Yeah, it's a combination. So we have seen demand being slightly slower, I think, which is something we have seen the peers experiencing as well, especially the German peers.
And then if you look, then as I mentioned during the call, we decided to streamline the product portfolio and managed services, which kicked in during Q3. So we decided to no longer pursue one specific product area, which has a low single-digit million impact on the full-year basis. But it makes a lot in a relatively small business area a nd then additionally, as I said, we adjusted our prices in cloud solutions in order to drive adoption into entry products, as we believe we need to invest in a growing market as well, given the political landscape we are seeing and digital sovereignty becoming more and more important a nd yet we see that demand in our target or adoption rates in our target customer base still remain partially reluctant.
So actually, we want to drive this and help our customers to get into cloud in order to drive their digital sovereignty going forward a nd meaning cloud, I mean a German European cloud.
The next question comes from Inês Gusmão from BNP Paribas. Please go ahead.
Thank you. I just have two questions. One is a follow-up to the previous one. So I see that you're taking your full-year CapEx guidance slightly lower on a full-year basis. Has your growth targets on the cloud business changed? In other words, are you actually resizing investments to meet potentially slower demand? And my second question is on the German political environment. Are you expecting any impact on your likelihood to win any further federal contracts in the cloud business? Thank you.
So in terms of CapEx, I think the majority is basically driven through efficiencies, which we've been able to leverage throughout the whole business, be it in maintenance CapEx, but as well growth CapEx. So we remain a very strong approach to using our CapEx, and primarily this is maintenance and the core business. So it's not that we are taking down CapEx in cloud solutions. We still want to grow there, and we are able and we will continue to fund this with CapEx if needed. Looking into the German political environment, that's a hard question, actually. So let me comment a little bit on the ITZBund contract, where we remain confident as well in 2024 that we will be able to continue to build up our services, and we will continue to be able to build those services.
Still, there's a slight uncertainty, and it's really a slight one in terms of the federal budget, which we yet don't know at which point in time it will be signed and done. So we are confident about the ITZBund, but nevertheless, I think it will slightly slow down any other federal investments just because the federal budget yet is not sure at which point in time it will be signed and officially confirmed.
The next question comes from Stephane Beyazian from ODDO BHF. Please go ahead.
I'd like just to follow up on the cloud solutions with two questions. The first one is, do you see any risk that sort of macro weakness we are seeing could have some impact perhaps or continue in 2025 and potentially offset the benefit of the ITZBund contract so that cloud solution could possibly continue to further slow down into 2025?
And my second question, do you have any plan of pursuing the business with the startups, with the AI startups that are looking for NVIDIA GPUs? Is that a market that you're looking after at all? Thank you.
Yeah. So for cloud solutions, so we remain confident on our product portfolio and our product offerings. So I wouldn't expect any significant impact or a significant slowdown in cloud solutions as compared to this year. Actually, our aim and target is to grow cloud solutions, especially in the small-medium business area a nd we are confident that we started the right measures now to be well prepared for 2025. In terms of offering AI for startups, so we do offer NVIDIA chips in our cloud solutions. Obviously, and this was stated by Achim before, our business is not around training of AIs or anything like that.
We are offering the right products to use this kind of stuff, like with our AI Model Hub, which I was mentioning before. And as I said, yes, you are able to buy chips like that. And startups are part of the small-medium business environment. So they are on our map as well. And maybe let me comment again on the confidence which we have on the general SMBs in the cloud solutions business. So we have seen with the price adjustment we've done into our entry products, aiming for getting more of those small-medium businesses into our ecosystem, we have seen that new customers are joining us, and we are really confident to see them growing with us throughout the next year. Thank you, Stephan.
The next question comes from Usman Ghazi from Berenberg. Please go ahead.
Hi. Thank you for the opportunity. I've got two questions, please. Going back to cloud again, sorry about that. Just the managed services that you are deprioritizing, does that generate any margin? And I'm asking because obviously the growth rate in the cloud segment might be a little bit weaker than what you had anticipated at the beginning of the year a nd you have this ambition to be break-even in the cloud business around the second half of next year a nd I just wanted to understand if that timeline has moved at all or whether it stays in place because this step down in cloud is driven by managed services, and that's a low-margin business.
So that was the first question. The second question was just going back to your comments on churn. You mentioned it was around 14%, whereas in the past, I think you mentioned a number of around 13%. So I just wanted to confirm if there has been a slight step up, is that driven by macro or kind of a late reaction from customers on the price increases? And if it is the latter, if it is a result of the price increases, then how are you thinking about price increases going forward given you will be lapping these price increases starting in Q4? Thank you.
Yeah. So let me start with the managed services part. So this was a business or a business area which we historically served. It is a very personnel-intensive business with a relatively or more or less non-existing margin. So it's not harming our cloud solutions margin target that we decided not to pursue that. In terms of churn, 14%, correct? And we mentioned 13% before. And the majority is actually driven by price increases.
Keep in mind, 14% is still a good churn number, to be honest. We do not see anything from macro. We see, as I said, churn through our price adjustments. Keep in mind that if you're getting a lot of inflow, which we had during the last couple of quarters, you might see slightly higher churn as customers tend to churn in the early years or in so there's a slight mixed effect, but we are confident to get back on track, especially as the price increase adjustments are actually going out of the range and the equation. Churn impacts from price increases are trailing off now. Going forward, we are confident with our existing retention measures and sales desks, etc., anything which we have in place to keep churn at the low levels we had in the past.
Got it a nd just to follow up, please, on that. So has this influenced your thinking on price increases going forward, especially given the German kind of political/macro backdrop? I mean, are you thinking differently about price increases? And how much are those needed to get to this target of 10% revenue growth in 2025?
Yeah. So we mentioned before that in an ideal world, price increases will be a part of the game. And in an ideal world, it should be a third coming from price increases, a third coming from cross and upsell, and a third coming from new customers, new customers which you want six to 12 months before, obviously. So that's how we steer the business or we want our business to be steered. And we believe that price adjustments in the range of inflation are fair. And we are offering more products.
So it's not just a flat price increase, but we intend to offer more features and products so that our customers understand the value we deliver. So it will be part of the game going forward. And our confidence in price increases didn't decrease based on the numbers which we have seen here. As I said, a slightly higher churn was definitely anticipated, and it's in line with the expectations.
Thank you very much.
You're welcome.
Anyone with a question may click the Q&A and raise your hand button or press star followed by one. The next question comes from Nizla Naizer from Deutsche Bank. Please go ahead.
Thanks. I hope you could hear me. My question goes back to the cloud solution segment. Just trying to understand with the revised guidance that you've given for 13% for the full year and what you've done in nine months so far, is my math correct when I think Q4 should then be sort of a 19% type of growth quarter for cloud solutions? And linked to that, could you then maybe tell us how much of an incremental impact the ITZ contract would be in that growth number?
That's question one, Britta. And question two is on the political uncertainty in Germany. I think the previous question asked about the impact maybe that'll have on cloud, but could you also maybe give us some color on how these political events have affected your customer additions on the WP&P business, be it in Germany and also in the U.S.? Has that had any bearing at all, or are you still confident that you could do more than the 20,000 net adds you've already done in Q3, again in Q4? Thank you.
You're welcome. So as I said, the ITZ Bund will drive the fourth quarter results towards, and I think your math is correct, Nizla. So we should see a strong acceleration. And the majority is definitely driven by ITZ Bund. The remainder of the business remains growing steadily but not accelerating. On the political landscape, so obviously, we haven't seen any first signs of our customers. We are in a recurring business model, so this would take time. But nevertheless, I wouldn't expect anything in the small-medium solopreneur operator in the solopreneur landscape.
As we've seen in the past, if you look into the different macroeconomic uncertainties, our customer base has been extremely resilient, and they do their business whatever political regime is there. Obviously, I think the European political landscape, understanding more and more the importance of digitalization, this is something which we think will help our customer base to digitize their businesses, and we do see some first signs with, for example, Spain pursuing a digital strategy, etc., so I think this will drive more than the overall impact, and same applies basically to the U.S., so if first signs are correct, the U.S. economy should behave all right, which obviously will have a slight impact, but nevertheless, as I said, small-medium businesses are super resilient.
They do their business. They offer services to their customers which are needed in the daily lives. We help them to help their customers and to be more efficient in serving the customer base. So I actually think we do not expect any huge impact from the changing political landscape on the web presence and productivity, except for, as I said, digital sovereignty might get more and more important, especially in Europe.
Very helpful. Thank you.
Thank you.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Stephan Gramkow for any closing remarks.
Thank you, Operator. And thank you all for joining today's call. Please feel free to reach out with any follow-up questions. Have a great day. Stay safe, and goodbye.
Goodbye, and thank you.