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Original-Research: NFON AG - from NuWays AG

21.11.2025 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQ

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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 month

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 EUR 21.8m (+0.3% yoy; eNuW:

EUR 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 EUR 9.92, supported in part by

the Q2 price adjustments. Recurring revenues reached EUR 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 EUR 3.0m (-16% yoy; eNuW: EUR 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 EUR 1.3m

compared to the first half of the year (H1: EUR 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 EUR 11.5-12.5m (eNuW new: EUR 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 prioritie

- 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, it

contribution remains too small at this stage to offset the broader weakne

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 gain

traction.

Given the continued attractive valuation (6.7x EV/Adj. EBITDA FY25e), we

confirm our BUY rating with a new PT of EUR 11.10 (old: EUR 12.10) based on DCF.

You can download the research here:

https://eqs-cockpit.com/c/fncls.ssp?u=fd2c52b9b7775e9be4cc2a9574793360

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 Abschlu

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2233890 21.11.2025 CET/CEST

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