Good morning, everyone, and welcome to the IONOS analyst and investor call on the first quarter 2026. Thank you for taking the time to join us today.

My name is Stephan Gramkow, and I am responsible for investor relations at IONOS. Let me walk you through today's agenda.

Patrik Heider, CFO of IONOS, will provide an update on the overall business performance and guide you through the financial details of the first quarter. He will also share our outlook for 2026 as well as our mid-term targets.

Following the presentation, Patrik will be happy to take your questions. I would now like to hand it over to Patrik.

The floor is yours.

Thank you, Stephan. Good morning, ladies and gentlemen, and welcome to our Q1 2026 conference call.

I am Patrik Heider, CFO of IONOS. The momentum from 2025 continues into 2026.

In Q1 2026, we added 180,000 net new customers, lifting our total base to 6.81 million customers. This is a strong start to the year and consistent with our expectation of further accelerating customer growth.

The quality of new customer remains excellent. We continue to grow revenues across all relevant product lines from web hosting to communication, back office, and domains.

On the right-hand chart, you can see the rising share of AI in Web Presence & Productivity revenue. In 2025, AI accounted for approximately 20% of additional revenue.

We expect that to reach around 50% this year, further growing to 80% by 2028. The more AI we embed, the higher the revenue per customer, combining volume growth with product mix improvement.

AI is embedded across our entire product ecosystem. In Web Presence & Productivity, we are continuously enhancing our product offerings, whether as a feature in onboarding or as a standalone product, for example like the AI Phone Receptionist.

From domains and web hosting to mail solutions, all products already include smart AI features. In Cloud Solutions, we are delivering sovereign, trusted European infrastructure for both SMBs and enterprise clients.

Our portfolio extends from public and private cloud to specialized AI infrastructure, including the AI Model Hub, GPU servers, model fine-tuning, and app integration such as n8n on VPS. Let me give you an update on the AI Phone Receptionist, which we launched in Germany and the US in the beginning of this year.

As a reminder, the AI Phone Receptionist is essentially a virtual employee. It is able to answer and manage calls in natural language across more than 20 different languages, trained on the customer's own website and knowledge base.

It is able to handle requests to book meetings, it captures leads around the clock, and delivers structured call transcripts to the business owner. We have already generated more than 8,600 orders so far.

The highest share has been in Germany and the US since we launched in those countries first. The incoming ARPU is already around €30, underpinning the additional value contribution.

Please keep in mind that the AI Phone Receptionist is the first product within a broader platform. With more capabilities and agents being added, we expect the ARPU to grow further.

This is also the reason why marketing investments has been held back on purpose as we don't want to invest before more capabilities are available. Initial customer satisfaction is high, with an NPS above 50.

These are strong early results from a newly introduced product with very limited marketing. The adoption curve and feedback confirm that we are solving real problems for our customers.

What will the broader platform look like? IONOS Momentum is a fully integrated, modular ecosystem driven by a central intelligence layer, the AI Knowledge Hub.

As the foundation of the entire platform, the AI Knowledge Hub aggregates company data, documents, and interaction history in a shared brain. This ensures that every tool in the suite operates with deep contextual relevance.

The power of Momentum lies in this synergy. The more a customer engaged with the system, the smarter the hub becomes, leveraging the vast data we already securely host for our customers.

Building on this foundation, the ecosystem delivers seamless end-to-end automation. The AI Frontdesk, which includes the AI Phone Receptionist, acts as the first point of contact, managing inbound communication across all channels and feeding real-time data directly into the hub.

This data flows into Smart AI CRM, which classified leads and suggests next best actions based on the hub's insights. The AI Presence Suite then makes these insights actionable, automating marketing, reputation management, and legal compliance.

For businesses requiring maximum data sovereignty, the Sovereign AI Chatbot provides a GDPR-native European alternative to global models, fully integrated into the shared intelligence. By embedding the AI Knowledge Hub at the core of daily operations, IONOS Momentum doesn't just offer tools; it creates a self-learning platform that drives retention, expands revenues, and built unmatched long-term value.

Let's have a look on our roadmap. Following the successful launches in Germany and the US, we have rolled out the AI Phone Receptionist to the UK and France at the end of March.

We also launched the phone receptionist at our brand STRATO in Germany, and in April, we rolled out the phone receptionist in Canada and Spain. In parallel, we are working on the feature set.

Key additions include the AI Knowledge Hub, further integrations, dedicated workflows with multiple agents, and multichannel capabilities covering voice, email, and chat, planned for the second half of 2026. At this point, let me turn to the financial results of the first quarter 2026.

We generated 348 million in revenue for the first quarter. Web Presence & Productivity remains our cornerstone, accounting for 84% of revenue, while Cloud Solutions contributed 14%, reaching 48 million.

Adjusted EBITDA stood at 118 million, representing a 33.9% margin. This is a strong baseline we are building upon in 2026.

Let's look at Q1 2026. Revenue grew by 5.7% year over year, continuing the robust and highly visible growth path we have established.

On a constant currency basis, underlying growth was even stronger at 7.6%. Adjusted EBITDA increased by 4.8%, with the EBITDA margin reaching 33.9% versus 34.2% in Q1 2025.

The slight margin variance reflects a shift in marketing investments phasing across quarters. As a reminder, the majority of our marketing investments are typically the highest in Q1 and Q4, this year with a particular focus on the first quarter, aligning with peak customer acquisition periods.

Turning to the operational development of our two business segments. In Web Presence & Productivity, revenue increased by 6.4% year over year or 8.2% excluding FX.

Cloud Solutions increased by 6.8% year over year or 9.2% excluding FX. External revenue growth, excluding intercompany revenues from hosting services to United Internet Group companies, came in at 6.4% year over year.

This solid growth reflects continued customer additions and successful cross- and upselling across the product portfolio. Intercompany hosting services to United Internet Group companies decreased, as planned, from 10.7 million in Q1 2025 to 9 million in Q1 2026.

Regarding our performance, we have added 180,000 new customers in Q1 2026, beating our previous record of 100,000 from last quarter. Our total customer base now stands at 6.81 million.

Customer inventory is growing at a CAGR of approximately 4%. ARPU increased further to 16.80 in Q1 2026, up from 16.70 in the previous year and above 16.50 in the previous quarter.

This upward path reflects successful up- and cross-selling and the strong customer net additions from the last couple of quarters starting to contribute, with these customers coming to the end of their typical discount period, which is usually 6 to 12 months. Our monthly churn rate remains stable at around 1% per month.

Looking ahead, we see no signs of this momentum slowing down. The combination of strong customer acquisition and increasing ARPU dynamics provides a powerful engine as we progress through 2026.

Let me now move to Cloud Solutions. In Q1 2026, Cloud Solutions revenue grew by 6.8% year over year.

Public cloud remains our biggest growth driver, growing at 16% year over year, while private cloud grew at 5%. Our contract with ITZBund, which is part of the public cloud business, has completed its ramp-up phase and is now in continuous operations, confirming our capability to deliver sovereign cloud at the highest governmental levels, and we expect an increasing revenue accrual contributions throughout the year.

Public cloud business is expected to grow above 20% year over year in 2026. Turning to our capital expenditure.

Total capex for the first quarter came in at 17 million. This corresponds to a capex ratio of 4.9% of revenue compared to 4.5% in the previous year.

Maintenance capex accounted for 4.3 million or 1.2% of revenue. This level remains low and predictable, confirming that our core infrastructure is robust and does not require heavy sustaining investments.

Growth capex stood at around 12.7 million or 3.6% of revenue. As you would expect, the vast majority of these growth investments was directed towards our Cloud Solutions segment to support the public cloud expansion and our sovereign offerings.

We are investing exactly where the future value lies. Looking ahead to 2026, we expect total capex to be in the range of 75 to 85 million, which would bring us back to a ratio of approximately 6% of revenue.

This remains a very healthy level that supports innovation and growth without compromising our strong cash generation. Of course, we are monitoring the recent rise in hardware prices.

We can partially mitigate the resulting effects through various measures. Nevertheless, I would expect that we will end up toward the upper end of the range.

Let me walk through our cash flow performance. The chart shows the Q1 2026 adjusted EBITDA to free cash flow bridge.

Starting from adjusted EBITDA of 118 million, we apply adjustments for non-recurring items such as long-term incentive programs and the billing carve-out. After accounting for 17 million capex, taxes, working capital movements, and leasing payments, we arrive at our free cash flow after leases of 96 million.

For comparison, the free cash flow after leases in the same period last year was 59 million. Our EBITDA to cash conversion remains strong, underscoring the predictable cash generation of our business.

The strong free cash flow generation translated directly into rapidly deleveraging. As of March 31st, 2026, net debt stood at 645 million, comprising external bank debt less cash and receivables from United Internet.

The fixed annual interest rate stands at 4.7% with maturity at the end of the year. The leverage ratio stands at approximately 1.3 times net debt to adjusted EBITDA.

This improved debt profile, combined with the elimination of refinancing risks through the fixed-interest debt, continues to support our financial stability and provides us with flexibility for the future. Let me now turn to our outlook.

We are reaffirming our full-year 2026 guidance. At the top line, we are guiding for revenue growth of approximately 7% on a constant currency basis, an acceleration from the 6.1% we delivered in 2025.

Within that, Web Presence & Productivity is expected to grow 7 to 8%, building on 6.5% in 2025. Cloud Solution is expected to accelerate to approximately 10%, up from 6.6% in 2025, primarily driven by our public cloud business.

We expect intercompany revenues to come in at approximately 30 to 40 million in 2026. Regarding profitability, we expect an adjusted EBITDA of approximately 530 million, representing a 37 to 38% margin.

This marks a steady increase from 36.8% in 2025. Looking at the performance in the first quarter, we are more than well on track for the full year.

A thriving domain business combined with IFRS 15 accounting ensures that we capture a substantial portion of our revenue right at the start of the year. More importantly, we are now starting to see full impact of our record-breaking 2025 customer growth.

As initial discount period ends, these new cohorts are contributing more significantly every month. The result: Q1 2026 delivered a robust 8.4% external growth at constant currency, a powerful acceleration compared to the full year 2025.

Adjusted EBITDA reached 118 million with a margin of 33.9%, which is also well on track. As already mentioned before, the majority of our marketing investments are typically the highest in Q1 and Q4, this year with a particular focus on the first quarter.

Important to keep in mind, the initial contribution from Momentum is not part of our guidance and is therefore on top. Lastly, we are reaffirming our mid-term targets.

We are targeting double-digit revenue growth above 10% on a group level, with Web Presence & Productivity growing high single digit and Cloud Solutions delivering 20% revenue growth. On profitability, we are targeting an adjusted EBITDA margin of 40% at the mid-term, a further step up from the 37 to 38% we are guiding in 2026.

This is the natural outcome of a platform business where revenue scales faster than the cost base, and where AI is increasingly contributing, doing work that previously required human effort or manual processes. That concludes our presentation for today, and I'm now happy to take your questions.

Hi. Thank you very much, and hi, Patrik.

You've been at IONOS for almost half a year now, just curious to see what you would say are the key strategic changes you're looking to make going forward. You also touched upon the rapid rate at which IONOS is deleveraging, outside of any strategic changes with the underlying business, is there also any change to the capital allocation priorities that you're looking to make?

Second question really was just on WP&P. Historically you've talked about the WP&P growth driven by 3% customer growth, 3% upselling, and then 3% price rises.

It seems that there's been a slight shift now to 4% customer growth and then 5% growth on ARPUs. Customer growth clearly going very, very well, but then if I look at the ARPUs, year-on-year growth is flat.

How do you get from the year-on-year flat profile for ARPUs through to the 5% growth? Can you maybe walk us through what the underlying impacts are of cross-selling and upselling, but how that maybe offset by this dilution from new customers coming in at lower rates?

The final question I really had is obviously there's a lot of debate and questions in terms of what AI could potentially do to the top line for the business, both on the positive and negative side, but curious to also get your take on how AI may be impacting your own business, and especially the cost side of things and any opportunities there as well. Thank you very much.

Thank you very much for your questions. I'm going to start with the first one, the key strategic changes also in the direction of capital allocation.

I would say with me, there's no key strategic change. I'm just contributing to a great strategy we have already, and we need to focus just more on top line.

That's what we do already executing this year. Definitely how I see the world is that you need to deliver in an easy capital equity story, you need to deliver top-line, EBITDA growth needs to be bigger than top-line growth, and own top-line growth needs to be bigger than market growth, and that's what we're driving.

This is what I'm going to support also from a CFO perspective. I call it the reallocation of budgets towards the top-line oriented cost parts.

That's definitely my part. Capital allocation is a very important one, and we will definitely have a different messages in the second half year of this year, and we see a mixture of different things.

Definitely one part will be M&A as well. As you already know, we were very strong in M&A just before the IPO, around the IPO.

We are ready to go further from a financial perspective, but also I'm a strong believer that M&A is also increasingly, substantially for the future and sustainably the organic growth. There are different opportunities we are discussing at the moment, M&A will be also a strong part of capital allocation.

To the WP&P business, we still see the trajectory we are always guiding with one-third, one-third, one-third coming from price increases, also from cross-selling and upselling, and new customer is still valid for us. It changes maybe in the future with AI, but we will guide that as AI is going stronger, also the agentic AI part into our business.

Also this year for the start of the year, we see a contribution of price increases approximately 1% of the revenue growth we are having, so that means also it's intact, and you need to see also the strong customer growth we generated in 2025 Q4, leading to the ARPU as well. The ARPU is definitely influenced by the strong customer growth.

Also seeing the churn, you are adding so many new customers when you deduct the churn as well to the cohort, which definitely has an huge input on the ARPU. You also have an impact from FX, which is quite significantly this year a negative impact on the ARPU.

Of course you have different other directions going, for example, the price increasing into the right direction. The ARPU is influenced also the IFRS part with the strong domain business in the first quarter, which was definitely above the expectations, which is a good news.

Also with the IFRS 15, we need to recognize the whole revenue in Q1, which is also an influencer. All in all, we believe that the ARPU is going along over the years with the right trajectory, and we do see a mixture of ARPU growth and also customer net growth being in that one-third, one-third, one-third.

AI on top, for me it's very easy. It will contribute to our revenue growth going above the double-digit growth in the WP&P segment.

This is why we also had this chart added to the presentation, which shows the impact of net new revenues contributed via AI, which goes over the years already in 2028 to 80% in the WP&P segment. That means the stronger the AI is coming with agentic AI, but also adding features to our existing products, like for example the website builder, the more we can win by AI, definitely we are an AI winner contributing and benefiting from the AI movement.

I hope that answers your questions, and if not, please let me know.

That's super helpful. Thank you very much.

Maybe just a couple follow-ups. Just first on, you gave us a kind of a hook in terms of expect something in terms of capital allocation in terms of H2.

Is there any more colour you can give there? I know you mentioned M&A will be a big part, but is the other big part shareholder returns, and is that likely to be buybacks?

That's kind of the first follow-up. Then the second really is that chart is very helpful in terms of the top-line benefits for AI, but I was also curious in terms of the potential cost-saving benefits for IONOS from AI as well.

You are absolutely right. I missed that one, the cost benefit.

We are definitely working already internally, and that's the huge potential I added in the mid-term guidance in this segment in the presentation. We definitely have huge potential also on the margin upside.

There's no surprise, and we are already working to embed AI also into internal procedures to get just faster with a higher quality. There is huge potential also on the margin side to go above the 40% level.

Also on capital allocation, I can't give you already details, but obviously we would focus on M&A parts as well, as M&A is highly opportunity-driven. There are definitely a couple of ideas.

We would like to have rather a bigger acquisition than a plenty of smaller ones because that definitely gives you much more room in the integration part and you can take synergies immediately. There might be ideas of adding bigger hosting companies to the business, which would be extremely interesting also from an international growth dimension perspective, just adding and then taking leverage and synergies out of the cost base.

There might be plenty of ideas in the agentic AI part, with smaller technology. All in all, we're looking for either moving and adding hosting companies or going for technology acquisitions.

As you can understand, this is highly opportunity-driven. We are already being active in discussions.

We don't have something in final stage, of course not, otherwise we would report it, but this is what we want to embed also in the H2 message, how we see the rest of capital allocation opportunities.

Very clear. Thank you.

Thank you very much for your question.

Hi, thank you for taking my questions. I have two, please.

Firstly, I'd like to dig a little bit into capex. Would you be able to give us a little bit of colour about what you're seeing in terms of equipment acquisition costs, what you've done to protect yourself longer-term on that front, and how we should be thinking about that developing into the mid-term?

Then secondly, just a bit of colour on the competitive trends that you're seeing, and how you're thinking about pricing specifically in Germany and the UK. Thank you.

For the capex, we definitely don't see any changes in our mid-term guidance. We go along with the 6% of revenue because we're also growing with a co-location concept in the cloud business.

Obviously we see a strong pressure at the moment of price increases. We try to mitigate them all into keeping the guidance what we already communicated, but we don't know how the markets and the price increases are going forward.

All in all, with the 6%, we are feeling in the mid-term guidance very well out of the concept we are having: own data centers with own equipment and also the co-location part. No big changes here.

The competitive environment, especially in Germany and the UK, you asked for the Germany and UK, I think, obviously is not changing. We see all the same competitors and competitive environment.

Obviously, agentic AI is extremely interesting from different parts. You see agentic AI coming from different industries, but we obviously have two main USPs here.

We have a huge customer base with 6.8 million existing customers. For all of them, agentic AI is very interesting.

The second USP I mentioned in my presentation is the concept of the AI Knowledge Hub. We know everything about our customers already: domain, e-shop system, CRM systems, website builder.

All the knowledge will be embedded into this layer of the AI Knowledge Hub, and nobody can't deliver this USP as strong as we can deliver. This is why we have a huge USP also in a competitive environment when it comes to agentic AI, but for the normal hosting business and cloud business, we don't see any dramatic changes.

Thank you very much. Maybe just a follow-up quickly.

Has there been any update on the Gigafactory proposal?

No, except almost normal one that they're going to extend again the parameters for the European Union. We're just waiting for the detailed parameters when it comes to this deal, and we would be ready to move.

If the business case is an interesting one, we would move into this one. If not, we are going to continue and focus on our core business.

We keep you updated as long as there is no clear signals from the European Union. We don't know yet, but again, we would be ready to move on.

Thank you very much.

Thank you.

Good morning, everyone. Thank you for taking my questions also.

I have a couple. First on marketing investments, you mentioned that you've held back on pushing with marketing investments for your AI solutions, and I was just wondering, once you do decide to kick this into gear, what type of magnitude are you thinking about and how do you anticipate that the marketing investments and spending on AI distribution, if you like, will look like?

Then secondly, a question on the step-up that you expect in cloud growth for the year. How much of this step-up in growth do you expect will come from the ITZBund contract, and how much should come from other customers?

Then last one is a technical question, just on IFRS 15. How much of the contribution to growth would you say that this revenue quirk made up in the first quarter?

Thank you.

Yes, thank you, Gustav, for your questions. For the marketing investments, we hold it back out of two main reasons.

We were the first three months in beta testing about the AI Phone Receptionist, and it's always good to keep on going with the beta testing as well because you want to have happy customer before you do the marketing investment. Second is, as I already indicated, we want to embed and build up the ecosystem first before we push hard in marketing because this is what we see as a strong USP with the AI Knowledge Hub.

That said, we want to move faster into the AI marketing spend in the second half year. For the moment, we keep the guidance with the 10% of marketing costs overall, as we already had the last couple of years.

By the way, I also mentioned that we had stronger marketing investments in Q1 2026 compared to Q1 2025, but all the efficiency ratios like the customer acquisition costs are going to the right directions. It's highly quantity-driven as long as we feel that we continue to push hard in marketing because I think it completely makes sense to go to customer net growth and see the efficiency ratios going to the right directions.

We always take the balance how much net new customers will win and then also obviously going to the marketing costs. Obviously, marketing spend for the AI part is completely different because we also go for existing customers here with the 6.8 million.

Cloud, ITZ will be obviously a big driver as well in the cloud business. Overall, we see a guidance of the public cloud segment.

Our Cloud Solutions is having three different part. It's the private cloud, it's the public cloud, which is the strongest growing one, 16% year on year in Q1, then we see the private cloud, and we see the MSP business, which is more or less a cancom [unclear] comparable part which is not growing.

The stronger we grow in public market in total, the Cloud Solutions will grow as well. The public cloud segment will grow above the 20% this year, and obviously this is not only containing the ITZBund.

This will be a part. It will be always becoming a smaller part of this cloud segment because we have a nice pipeline.

We do see nice traction now with all different kinds of customers in the enterprise and in the SMB business. It will be a part, but it will be more and more unimportant part from a financial perspective.

The customer is very happy with our solution, but for financial perspective, the dependence on the ITZBund will become much weaker.

Great. Thank you.

Then a quick one on IFRS 15? Oh,

sorry, the IFRS 15. It was around in the Q1 €6 million, which was then underlying the IFRS 15.

Great. Thank you.

Thank you very much for participating today. If there are any follow-up questions, feel free to reach out.

Thank you very much and have a great day. Bye-bye.