OVH Earnings: Boosted by Public Cloud, but Under Pressure in Other Areas

Organic growth on target, but varied across segments

In the first quarter of fiscal year 2026, which ended on November 30, 2025, OVHcloud reported revenues of 275.3 million euros, representing a 6.0% increase in comparable data. This performance falls within the company's full-year growth target range of 5 to 7% organic growth. Overall, the group serves 1.6 million clients. However, the dynamics across segments reveal significant disparities. Public cloud, now accounting for 58.2 million euros and 21.2% of the total, shows a 15.8% increase at constant exchange rates and scope. This is clearly the engine driving overall growth. On the opposite end, the private cloud activity—making up 60.7% of revenues at 167.2 million euros—only grows by 4.0%. This slowdown is mainly due to the departure of two large clients in the Corporate division and an optimization phase of infrastructure among Scaler-type clients, both of which impacted the Hosted Private Cloud segment. The Webcloud activity, which includes shared hosting, modestly grows by 2.3% to reach 49.8 million euros, or 18.1% of the total.

Une geography with uneven dynamics, strong growth in the rest of the world

From a geographical standpoint, France remains the primary market, generating 133.9 million euros in revenue, which accounts for 48% of the total, with a growth of 5.1%. Europe, excluding France, contributes 79.3 million euros (29% of the total), showing a growth of 4.1%, slightly below the group's average. In contrast, the Rest of the World region, which accounts for 62.1 million euros (23%), records a significantly higher growth of 10.5%. The group highlights an « encouraging deployment of Public Cloud in the United States, » suggesting a positive business trend in this market, although no consolidated financial data is provided for this specific area. The geographic expansion of the 3AZ public cloud (three availability zones) is one of the strategic priorities: an opening is announced in Berlin at the beginning of 2027, complementing developments in Milan and Paris. These expansions aim to meet the growing demand for data resilience and sovereignty.

Strategic Initiatives Supporting Cloud and AI Offerings

OVHcloud has announced several initiatives aimed at strengthening its position. The acquisition of Seald, a specialist in encryption and sovereign data management, is part of a strategy to differentiate itself in the European trusted cloud market. The group also signed a contract with LCH SA, a subsidiary of the London Stock Exchange Group, for the provision of secure cloud capacities and partial migration to the SecNumCloud label, a French benchmark for security. Additionally, a partnership with SambaNova aims to enhance inference performance for artificial intelligence workloads. These announcements reflect a desire to target premium and regulated segments, though they do not provide any short-term financial impact forecast. The group highlights its carbon footprint and integrated model aimed at a resource-efficient approach, arguments frequently emphasized in its institutional communications.

Annual Targets Confirmed, Focused on Cash Generation

OVHcloud reaffirms its full set of objectives for fiscal year 2026: organic revenue growth between 5% and 7%, an adjusted EBITDA margin greater than that of fiscal year 2025, investments ranging between 30% and 32% of revenue, and most importantly, positive Levered Free Cash Flow. This last point serves as a strong strategic signal at a time when the cloud sector is facing market expectations increasingly focused on profitability rather than sheer growth. No information is provided regarding net debt levels, balance sheet structure, or repayment schedules, which limits the ability to assess the group's financial strength beyond operational cash flow. The decision to allocate up to 32% of revenue to capital expenditures reflects a high investment policy, consistent with the development of 3AZ cloud infrastructure, but it continues to weigh on the ability to quickly generate available cash.

Stock Performance and Market Monitoring

OVHcloud's stock closed at 7.51 euros, up 3.09% for the week. Over the quarter, however, the stock has dropped 38.49%, and it's down 15.14% over the past year. The 50-day moving average is at 7.61 euros, slightly above the current price, while the 200-day moving average stands at 10.59 euros, indicating a significant gap. The technical support level is identified at 6.73 euros, with resistance at 8.49 euros. The RSI is 69, close to the overbought zone, while the MACD histogram shows a positive value of 0.07, suggesting a slight improvement in short-term momentum. The Stochastic signal remains neutral. The Bollinger Bands range from 6.62 to 7.64 euros. In terms of recommendations, JP Morgan lowered its price target from 10.50 to 10.00 euros on December 3, while maintaining an « overweight » rating. Morgan Stanley revised its advice on November 28 from « underweight » to « equal weight, » with a price target of 9.05 euros.

Outlook and Key Considerations for the Coming Quarters

OVHcloud's trajectory now depends on its ability to maintain momentum in the public cloud sector while stabilizing its private cloud operations, which have been weakened by the departure of corporate clients and rationalizations among large-scale providers. Achieving a positive free cash flow is a credibility test for management, as investors closely examine the sustainability of the business model. Geographic expansions, targeted acquisitions, and technological partnerships are signals of structuring the offering, but their contributions to profitability remain to be proven. The reliance on the public cloud to drive growth presents both an opportunity and a risk of concentration. The level of capital expenditures, although in line with ambitions, continues to limit financial flexibility. Finally, the stock's performance over the past year reflects a cautious market that is waiting for tangible proof of the group's ability to combine growth with sustained cash generation.