NFON: Final Q2: More detail, same picture - NuWays AG Research
Following last week's guidance cut and preliminary H1 figures, NFON yesterday released its H1 report.
ANNONS
Top line came in as pre-released, with Q2 sales down 5.2% yoy to € 20.9m, taking H1 to € 42.5m (-3.8% yoy). Recurring revenue of € 19.8m in was down 3.6% while non-recurring fell 26.8% to € 1.2m on lower project volumes and hardware, lifting the recurring share to 94.4%. Underneath this, seats shrank 4.2% yoy to 630k, partly attributable to deliberate portfolio simplification, but predominantly driven by genuine churn based on continuous corporate spending cautiousness related to shifting IT budgets (eNuW). Blended ARPU though improved sligthly to € 9.95 (+ € 0.03 yoy), thanks to targeted price adjustments and a higher share of premium solutions. Notably, recurring sales from AI products like Intelligent Assistant (+39% yoy) and Customer Engagement (+12%) continued to show strong traction, yet still of small relative size (c. 10% of total) to make up for the weak momentum in the legacy business. However, this is clearly pointing in the right direction, in our view, with the mix getting closer to the turning point, and the top-line trough reached this year (eNuW). Hence, the current decline is rather a timing problem than structural, provided PBX attrition does not accelerate further from here.
Overall, H1 confirms a year of transition rather than a broken business model. ARPU is holding, and Intelligent Assistant and Customer Engagement are compounding at rates that will matter once the base is large enough. As outlined, eyes should be on seat count in H2, as the mix shift only pays off against a stabilised floor. Against this backdrop, we confirm BUY at a PT of € 5.00 based on DCF.
