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Ionos Q3 2024 $IOS (-2,68 %)

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Financial performance:

  • Total revenue: In the first nine months of 2024, total sales increased by 7.8% to EUR 1,141.6 million compared to the same period of the previous year.
  • Adjusted EBITDA: Adjusted EBITDA grew by 9.2% to 334.5 million euros.
  • EBITDA margin: The adjusted EBITDA margin improved to 29.3% compared to 28.9% in the previous year.


Balance sheet overview:

  • Total assets: As at September 30, 2024, total assets amounted to EUR 1,656.6 million, a slight increase on the previous year.
  • Net debt: Net debt fell to EUR 917 million, which corresponds to a gearing ratio of around 2.2x net debt to adjusted EBITDA for the last twelve months.


Details of the income statement:

  • EBIT: EBIT for the first nine months of 2024 amounted to EUR 238.3 million, which corresponds to an increase of 6.0% compared to the previous year.
  • Adjusted EBT: Adjusted EBT increased by 20.2% to 192.5 million euros.


Cash flow overview:

  • Free cash flow: Free cash flow increased by 25.8% to EUR 219.1 million in the first nine months of 2024.
  • Operating cash flow: Cash flow from operating activities increased by 21.3% to 285.7 million euros.


Key figures and profitability metrics:

  • Adjusted earnings per share (EPS): Adjusted EPS increased by 11.6% to 0.96 euros.
  • Gross margin: The gross margin improved from 47.8% in the previous year to 49.2%.


Segment information:

  • Cloud solutions: Revenue in the Cloud Solutions segment rose by 7.6% in the third quarter of 2024 and recorded an increase of 11% since the beginning of the year.
  • Web Presence & Productivity: Sales in this segment, excluding the aftermarket, grew by 12.3% year-on-year in the third quarter.


Competitive position: IONOS is well positioned as a digitalization partner for European SMEs and has established itself as a trusted cloud provider. The company uses the integration of AI to improve its product offering and customer experience.


Outlook and management commentary:

  • Forecast for 2024: The company confirms its outlook for 2024 with constant currency revenue growth of 9% and an adjusted EBITDA margin of around 29%.
  • Cloud solutions: Revenue growth in the cloud solutions segment is estimated at 13% for the year, slightly below the previously forecast 15-17%.


Risks and opportunities:

  • Risks: A slowdown in the aftermarket business is expected in the medium term, which should have less of an impact on the EBITDA margin in the future.
  • Political uncertainties: Political uncertainties in Germany could have an impact on government investments. Nevertheless, the company remains confident about its growth strategy.


Positive aspects:

  • Strong sales growth of 7.8% year-on-year.
  • Improved adjusted EBITDA margin to 29.3 %.
  • Significant increase in free cash flow of 25.8 %.
  • Successful integration of AI to improve the product range.
  • Strong growth in customer base with 170,000 new customers.


Negative aspects:

  • Cloud solutions fall slightly short of growth expectations at 13%.
  • Volatility in the aftermarket business with lower margins.
  • Higher marketing expenses impacting the EBITDA margin.
  • Political uncertainties in Germany could impact federal contracts.
  • Slight increase in churn rate to 14% due to price changes.
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