OVHcloud eyes faster 2027 growth as it posts first positive cash flow since IPO

Oct 20 : French cloud operator OVHcloud reported its first positive levered free cash flow since its 2021 listing on Tuesday, as its revenue grew 7.2 per cent to €1.15 billion ($1.29 billion) in the financial year through August.

The milestone means OVHcloud now covers its heavy capital spending from its own operations, after five years of losses on cash generation. It forecast revenue growth exceeding 10 per cent and continued positive cash flow for fiscal 2027.

Acceleration in fourth-quarter growth was led by the Digital Scalers segment, CEO Octave Klaba told Reuters, following the reorganisation of the company's offering since his return a year ago.

Digital Scalers — OVHcloud's fastest growing business that serves clients spending more than €2,000 a month — posted comparable revenue growth of 12.4 per cent to €359.1 million and made up 31 per cent of the company's sales. Public cloud revenue rose 18.9 per cent to €255.1 million.

Klaba said the year had been one of discipline and OVHcloud had "returned to its fundamentals".

Levered free cash flow reached €24.7 million, against an outflow of €27.0 million a year ago. Adjusted earnings before interest, taxes, depreciation and amortisation rose 9.7 per cent to €480.5 million, resulting in a margin of 42.0 per cent. For fiscal 2027, it aims to raise the margin to above 42.5 per cent.

Net debt stood at €1.16 billion, or 2.7 times its adjusted EBITDA, compared with 2.9x at the end of the previous fiscal year. It has €255 million in available liquidity and no significant debt repayment due before fiscal 2030, it said.