Original-Research: NFON AG (von NuWays AG): Buy

Classification of NuWays AG to NFON AG

Company Name:	NFON AG
ISIN:	DE000A0N4N52
Reason for the research:	Update
Recommendation:	Buy
from:	21.11.2025
Target price:	EUR 11.10
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

Yesterday, NFON released its Q3 report, which clearly reflects the increasingly challenging environment in the European ICT market, visible in soft top-line momentum and margin pressure. In detail:

Q3 sales were held broadly stable year-on-year at € 21.8m (+0.3% yoy; eNuW: € 22.9m), demonstrating resilience despite a softer demand environment and extended sales cycles.

Importantly, churn remained low and steady at 0.5% p.m., underscoring the strength of the customer base. While the seat count decreased by 2.6% yoy to 648k, this was largely shaped by the challenging macro backdrop rather than underlying customer dynamics. ARPU edged up to € 9.92, supported in part by the Q2 price adjustments. Recurring revenues reached € 20.5m, representing a robust 94.1% share and providing continued solid revenue visibility as the company advances its AI-driven strategic transition.

As a result of the muted sales development and increased AI investments, bottom-line margins came in slightly weaker yoy. Although we saw a further improvement in gross margin thanks to the price increases (+0.9pp yoy to 86.5%), adj. EBITDA came in weaker at € 3.0m (-16% yoy; eNuW: € 3.5m) and a 12.7% margin (-1.7pp yoy) as the increased cost base outweighed efficiency gains (i.e. DTS harmonization). On a positive note, FCF improved to € 1.3m compared to the first half of the year (H1: € 0.7m) thanks to WC normalization.

Against this backdrop, management decided to revise the FY25 guidance downwards and is now targeting sales to grow by 1.0-2.5% yoy (eNuW new: +1%) and an adj. EBITDA in the range of € 11.5-12.5m (eNuW new: € 11.6m), which is conservatively implying a similar soft development in Q4. Importantly, mid-term targets were confirmed with double-digit growth and >15% adj. EBITDA margins by FY27.

In our view, the new leadership team has set the right strategic priorities - including a clear AI road map (e.g., Nia FrontDesk), but tightened pricing measures and stronger partner enablement - the translation into operational momentum remains limited for now. While botario adds meaningful AI capabilities and supports NFON’s positioning in more complex use cases, its contribution remains too small at this stage to offset the broader weakness in the core PBX base.

Yet, we still regard the strategic direction as sound, even as the operational turnaround is progressing slower than anticipated. With execution now becoming more consistent, we see potential for gradual improvement once market conditions stabilise and AI monetisation gains traction.

Given the continued attractive valuation (6.7x EV/Adj. EBITDA FY25e), we confirm our BUY rating with a new PT of € 11.10 (old: € 12.10) based on DCF.
 

You can download the research here: nfonag20251121previewreviewen3b9a5
For additional information visit our website: https://www.nuways-ag.com/research-feed

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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