OVHcloud earnings for the year ended August 31, 2026, showed accelerating revenue growth and a wider adjusted profit margin, while the cloud provider reported its first positive levered free cash flow since its IPO. Results announced on October 20 put annual revenue at €1.145 billion, up 7.2% like-for-like, above its 5%–7% target.
Key Takeaways
- Fourth-quarter like-for-like revenue growth accelerated to 10.5%, led by Public Cloud.
- Adjusted EBITDA rose 9.7% to €480.5 million, with its margin widening to 42%.
- Fiscal 2027 guidance calls for growth above 10%, but capital spending will depend on AI demand.
Table of Contents
- OVHcloud earnings reflect a stronger second half
- Higher margins strengthen profit and cash generation
- AI investment leaves capital spending flexible
- Pricing and corporate sales remain execution tests
- Conclusion
OVHcloud earnings reflect a stronger second half
OVHcloud’s fiscal 2026 results announcement showed reported revenue growth of 5.6%, below the 7.2% like-for-like increase. Growth on the latter basis accelerated from 5.1% in the second quarter to 6.9% in the third and 10.5% in the fourth. Quarterly revenue exceeded €300 million at year-end.
Public Cloud was the main growth contributor. Its annual revenue increased 18.9% like-for-like to €255.1 million, with fourth-quarter growth reaching 24.3%. The company cited customer acquisition, cross-selling and the expansion of its three-availability-zone offerings, particularly in Paris.
Private Cloud remained the largest business, generating €690.4 million, or 60.3% of group revenue. It grew 4.5% like-for-like over the year and 7.1% in the fourth quarter. Webcloud revenue increased 3.2% to €199.7 million, with growth accelerating to 6.0% in the final quarter.
| Item | Details |
|---|---|
| Operating profit | €77.8 million in fiscal 2026; operating margin of 6.8%. |
| Net debt excluding leases | €1.157 billion at August 31, 2026, versus €1.103 billion a year earlier. |
| Available liquidity | €255 million, including an undrawn €200 million credit line. |
| Return on capital employed | 7.7%, compared with 7.1% in fiscal 2025 and 3.3% in fiscal 2024. |
| Debt funding | Almost all debt hedged; average interest rate of 4.4%, with no significant repayment deadlines before fiscal 2030. |
Higher margins strengthen profit and cash generation
Adjusted EBITDA increased faster than revenue, with its margin rising 1.6 percentage points to 42%. OVHcloud attributed the improvement to productivity and operating-cost discipline. Net income rose to €9.4 million from €0.4 million in fiscal 2025.
The earnings-call summary put positive levered free cash flow at €24.7 million, compared with negative €27 million a year earlier. The cash-flow milestone is presented with a correction for €49.5 million of fiscal 2027 component purchases brought forward into fiscal 2026; it should not be read as an unadjusted cash-flow figure.
Reported capital expenditure was approximately €422 million, or 36.9% of revenue. Excluding those advance component purchases, spending was about €373 million, or 32.6% of revenue. The purchases secured memory and disk components as hardware costs rose.
AI investment leaves capital spending flexible
For fiscal 2027, management targets like-for-like revenue growth above 10%, an adjusted EBITDA margin of 42.5%, positive free cash flow and return on capital employed above 9%. Those are forward-looking targets, not completed results.
Chairman and CEO Octave Klaba declined to provide a capital-expenditure range, saying investment would rise or slow depending on AI demand and pricing pressure. Management instead emphasized positive free cash flow, the return-on-capital target and no increase in leverage by fiscal year-end.
OVHcloud plans to spread its AI investment across GPUs and higher-layer services rather than rely solely on renting computing hardware. Klaba said the company was still testing demand before committing heavily, leaving the pace of deployment dependent on customer uptake.
Pricing and corporate sales remain execution tests
Management has not quantified how much recent server-price increases will contribute to fiscal 2027 growth. Klaba said only a small contribution was included in guidance and that the customer response would become clearer with first-quarter results.
Corporate customer growth also remains an area to watch. Management attributed the weaker annual performance to earlier customer losses and sales-organization changes, while pointing to an improvement in the fourth quarter. The company expects its reorganized sales teams to have their full effect in fiscal 2027.
Conclusion
OVHcloud enters fiscal 2027 with faster revenue growth and stronger adjusted profitability, but the scale of AI spending remains flexible. The next scheduled milestones are its AI Summit on November 19, 2026, and first-quarter revenue on January 7, 2027.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
