KAREN JOY BACUDO
Finance Editor
NFON reported first-quarter revenue of EUR 21.6 million and confirmed its full-year guidance. Recurring revenue accounted for about 94% of the total.
The Munich-based business communications provider posted recurring revenue of EUR 20.2 million for the quarter, down from EUR 20.7 million a year earlier, while total revenue fell from EUR 22.1 million. Adjusted EBITDA declined to EUR 1.8 million from EUR 2.6 million as the group continued to invest in artificial intelligence and product development.
The figures point to a subdued market for new spending, even as NFON argues that demand is shifting toward AI-led communications tools and services hosted in Europe. Delays in converting growth opportunities and weaker investment appetite in parts of the market weighed on performance during the period, management said.
The installed seat base stood at 641,119 at the end of the quarter, compared with 661,349 a year earlier. NFON attributed the decline mainly to weak new order intake and customer losses.
Average revenue per user edged up to EUR 10.04 from EUR 10.02, supported by earlier pricing changes and a higher share of premium products and AI-based applications in the sales mix.
AI focus
Business Telephony remained the core of NFON’s business in the quarter, but its Intelligent Assistant and Customer Engagement segments are becoming more important. The company highlighted stronger demand for AI-based products as a sign that customers are paying closer attention to automation and intelligent communications tools.
The shift comes as NFON continues a broader restructuring and investment plan under its NFON Next 2027 programme. The initiative is designed to reshape the business around AI-based communications while improving efficiency and supporting growth in newer product areas.
Consolidated profit rose to EUR 0.5 million from EUR 0.3 million a year earlier. Operating cash flow remained positive at EUR 1.6 million, and cash and cash equivalents stood at EUR 12.9 million at the end of the quarter.
Those cash reserves give NFON room to keep funding changes to its operations and product portfolio. It plans to continue investing in scaling AI-based products while pursuing efficiency measures tied to its transformation plan.
NFON maintained its full-year outlook, forecasting revenue growth in the low- to mid-single-digit percentage range. It also reiterated its expectation for adjusted EBITDA to come in slightly above EUR 12 million, compared with EUR 12.6 million in the previous financial year.
The guidance suggests management expects stronger momentum later in the year, driven in particular by Intelligent Assistant and Customer Engagement. That outlook remains in place despite the soft start to the year and pressure on customer acquisition reflected in the declining seat count.
Chief Executive Officer Andreas Wesselmann said the market backdrop was shaped by both cyclical weakness and longer-term structural change.
“The business communications market is currently not only experiencing a cyclical downturn, but is also undergoing structural change, increasingly shaped by artificial intelligence and digital sovereignty. NFON is positioning itself specifically as a European provider of AI-based business communications. By investing in AI-based solutions, product development and partner enablement, we are laying the groundwork to tap further growth potentials over the coming quarters,” Wesselmann said.