OVHcloud Sees High Profitability and Growth in First Half of FY2024

DateApr 29, 2024

For the first half of FY2024, OVHcloud has recorded high profitability and cash generation, demonstrating remarkable resilience in a difficult economic environment, especially in Europe. The European cloud services company reported strong organic sales of €486 million, up 10.8% over the first half of FY2023.

The enhanced financial performance is the result of a strategic improvement in every area, with its public and private Cloud divisions exhibiting very impressive results, according to OVHcloud. A 19.5% revenue increase was reported in the public cloud sector, mostly due to the demand for AI solutions that make use of NVIDIA’s GPUs. A 12% like-for-like increase in the private cloud sector was also rather positive, even though it had slowed down due to a decrease in customer acquisition via digital means.

OVHcloud CEO Michel PaulinAlongside this growth, organic adjusted EBITDA increased significantly by 19.6% to reach €184 million, indicating a 2.5-point increase in margin to 37.9%.

Amidst these operational advancements, OVHcloud has successfully generated €14 million in unlevered free cash flow, achieving this milestone six months ahead of projections. This financial health is pivotal as the company revises its full-year targets for 2024, now anticipating organic revenue growth between 9% and 10%, with a sustained EBITDA margin above 37%.

OVHcloud CEO Michel Paulin highlighted the strategic executions that have led to these positive outcomes. “In line with our strategic plan, we are publishing a sharp increase in profitability and the generation of positive unlevered free cash-flow for the second consecutive half-year, six months ahead of schedule,” said Mr. Paulin. Despite the reduced economic visibility for 2024, particularly in Europe, Paulin remains optimistic about the company’s direction and its long-term growth trajectory.

Indirect Sales Channel, US Sales

OVHcloud’s response to the dynamic market conditions would include adjusting its product offerings and marketing strategies to boost customer engagement and retention. Notably, the company has introduced new incentive plans aimed at enhancing the indirect sales channel and has adapted its offerings to counteract rising licensing costs following Broadcom’s acquisition of VMware.

Geographically, OVHcloud’s performance was strong in the U.S., showing a notable recovery towards the end of the second quarter, while maintaining solid growth in France and making strategic acquisitions in Germany and Italy to bolster its European presence.

Looking forward, OVHcloud has confirmed its medium-term financial targets for 2026, alongside plans to continue its expansion with the inauguration of new Local Zones in Spain and Belgium. These cloud zones, enabled by technology from the recently acquired gridscale, would allow the company to deploy cloud capacity swiftly to new international locations, enhancing local data residency and reducing latency.

In addition to geographical expansion, OVHcloud is also making significant strides in technology with the inauguration of the first Quantum computer from a European Cloud service provider. This move not only underscores OVHcloud’s commitment to maintaining technological leadership but also aligns with broader European ambitions for strategic autonomy and innovation leadership.

As the company moves into the second half of FY2024, it aims to maintain its focus on cost management and investment in high-potential cloud offerings. The financial agility demonstrated by OVHcloud, coupled with its strategic investments in technology and infrastructure, positions it well to navigate the complexities of the global cloud market while supporting Europe’s digital sovereignty ambitions.

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