OVHcloud has confirmed its annual targets and medium-term outlook, reporting revenue of €251 million for Q3 FY2024, reflecting a 10.1% increase from the previous year, with a 9.0% rise on a like-for-like basis. This growth was primarily driven by the Public Cloud segment, which saw a like-for-like growth of 11.9%, and the Private Cloud segment, which grew by 10.7%.
In the first nine months of FY2024, OVHcloud achieved a total revenue of €737 million, up 10.5% from the same period last year, with a like-for-like increase of 10.1%. The company has maintained its momentum in the face of a challenging economic environment in Europe, supported by a robust performance in international markets, particularly in the United States.
OVHcloud’s international expansion continues with strong growth in the US, driven by a strategic focus on cloud migration for tech companies. This expansion is further bolstered by the opening of a new data center in Sydney, catering to the growing demand in the Asia Pacific region, and the deployment of eight new Local Zones in cities such as Brussels, Madrid, and Milan. These efforts aim to enhance OVHcloud‘s presence in new geographies with reduced capital intensity.
The company is also advancing its artificial intelligence (AI) offerings, now featuring a comprehensive range of NVIDIA GPUs. The integration of the latest open-source Large Language Models (LLMs), such as Mixtral 8x22B, is made accessible through the OVHcloud AI Endpoints serverless solution, reflecting the company’s commitment to staying at the forefront of AI technology.
Significant Growth in the US
Looking ahead, OVHcloud confirms its FY2024 targets, anticipating organic revenue growth of between 9% and 10%, an adjusted EBITDA margin of over 37%, and recurring capital expenditure (capex) representing between 12% and 14% of revenue. Growth capex is expected to account for 21% to 23% of revenue, and the company aims to generate unlevered free cash flow throughout the fiscal year.
Michel Paulin, CEO of OVHcloud, highlighted the resilience of the company’s business in Q3, noting significant growth in the US driven by “the demand for value-for-money solutions” among tech companies. He acknowledged the challenging macroeconomic conditions in Europe but emphasized the continued relevance and expansion of OVHcloud’s sovereign cloud offerings, particularly in the public sector.
For Q3 FY2024, OVHcloud reported consolidated revenue of €250.8 million, marking a 10.1% increase compared to the same period last year. The growth was fueled by improvements in ARPAC (Average Revenue Per Account) for the Private Cloud, driven by the adoption of high-performance servers, and a notable increase in new Public Cloud customers following a strategic customer acquisition initiative.
Private Cloud, Bare Metal Cloud, AMD
Michel Paulin, CEO of OVHcloud, highlighted the resilience of the company’s business in Q3, noting significant growth in the US driven by “the demand for value-for-money solutions” among tech companies.The Private Cloud segment, which includes Bare Metal Cloud and Hosted Private Cloud, generated €157.6 million in revenue, reflecting an 11.0% increase. This segment’s growth was supported by the introduction of new high-performance servers and a significant rise in demand from US tech companies. The Public Cloud segment posted a revenue of €46.0 million, up 16.6%, attributed to successful customer acquisition strategies and the expansion of Platform-as-a-Service (PaaS) offerings.
OVHcloud continues to enhance its AI capabilities with the availability of NVIDIA Tensor Core GPUs and the integration of cutting-edge AI models like Mistral 8x22B and Llama3. These models are readily available through the OVHcloud AI Endpoints serverless solution, offering advanced AI tools to its customers.
Regionally, France accounted for 49% of OVHcloud’s revenue, with strong growth in the Private and Public Cloud segments. In other European countries, Germany and Eastern Europe were key drivers of growth. The Rest of the World, representing 22% of the company’s revenue, saw solid growth, particularly in the US market.
OVHcloud’s outlook for FY2024 remains positive, with confirmed targets of 9% to 10% organic revenue growth, an adjusted EBITDA margin exceeding 37%, and specific capex goals. The company also reaffirms its medium-term outlook for FY2025 and FY2026, aiming for continued growth and positive free cash flow.
Recent highlights include the opening of a new data center in Sydney, which features proprietary water-cooling technology optimized for high-compute workloads. This expansion is part of OVHcloud’s broader strategy to meet the increasing demand for cloud solutions in the Asia Pacific region. Additionally, OVHcloud has deployed AMD-based solutions to offer balanced, cost-effective support for a wide range of cloud workloads, further solidifying its competitive position in the market.
