Q1 2025 Ovh Groupe SA Corporate Sales Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Toby Ogg - JPMorgan - Analyst : Yeah, hi, morning, and Happy New Year. And thanks for the questions. Just on the Public Cloud growth performance, you cited a few different drivers there, including the momentum of your AI offering and the potential to meet customer needs. For inference, could you give us a sense to how much of the Public Cloud growth is now being driven by AI and how quickly that specific piece is growing? And then just on the inferencing element of the demand, could you give us some more detail on what the biggest potential inferencing use cases are that you're seeing? And how much of a driver do you expect that to be going forward? Thank you.

Question: Toby Ogg - JPMorgan - Analyst : Brilliant. Thank you.

Question: Daniel Sky - Citi - Analyst : Hi, good morning. Thank you for taking my question. Just quickly, on the regional demand, again, so I understand that US now sees kind of better demand, and Europe is remaining constrained. Just going forward now for the year, are you still kind of expecting that Europe will kind of be rather weakish in the first half but then accelerating? Or do you have now better visibility of how it will shape up throughout the year? And my second question was just on -- given that now in this quarter, you mentioned that the savings plan and Black Friday campaigns enabled you to amass more customers, do you see some impact on margins regarding those campaigns?

Question: Daniel Sky - Citi - Analyst : Okay, great. Thank you very much.

Question: Derric Marcon - Bernstein - Analyst : Good morning, Benjamin and Stephanie. Happy New Year to you. Four questions on my side. The first one, can you give us more color about your performance, business performance in December, especially in France, given all the turbulence we are seeing from a political aspect or other economic aspect? That's my first question. Second question, I'm trying to understand the impact -- or to size the impact of long-term engagement that you mentioned in your press release. Does it mean that you recognize part of the contract upfront in terms of revenues? That's my second question. My third question, can you share with us any KPIs or metrics that will help us to understand the success of your local zone offerings? Because today, we see the ramp-up in terms of new data center, but we don't have any revenue figure or number of customers or workload or things like that. Anything here that you can share with us would be helpful. And the last one, on AI, when do you believe that the full product portfolio of your AI offerings will be in general availability? Because when I look to the current offering around data platform or even [IEM] point, it's not yet in general availability, beta or alpha phases. So I was wondering if this 1.5-percentage-point incremental growth could become much more when all these new products will be in general availability. And when will they be in general availability? Thank you.

Question: Derric Marcon - Bernstein - Analyst : Thank you.

Question: Hugo Paternoster - Kepler Cheuvreux - Analyst : Hello, everybody. Good morning. Thank you for the presentation, and also wishing you a Happy New Year. My first question will be a follow-up on the European visibility that you may have. I understood that so far, it has been delivering in line with your estimate. And just wonder when you build your guidance for the current financial year, what were your hypothesis on the demand in Europe? And yes, I believe, what are your expectations for the next quarter? The second question is on the Public Cloud, namely, could you break down the driver for the ARPAC increase? I believe that you have product enhancements, customer offer. And you already mentioned AI product, delivering 1.5 percentage points. What are the other drivers? And as a follow-up on that is, how we should view the Q2 performance compared to the Q1, given that the comparative basis will get easier and easier along the year? So how should we view this?

Question: Hugo Paternoster - Kepler Cheuvreux - Analyst : Okay. Got it. And if I may, just a follow-up. It's regarding the guidance that has been maintained. And I would say it's broader question now. In the last publication, the previous one, you mentioned you introduced new initiatives to pursue the journey beyond 2025. And I'd just like to have an update on it, whether it should be new guidance, new figure fine-tuning the guidance, or more -- something more precise? Or whether it refers more to product offer and the global footprint expansion you already commented. Whether it's on the guidance, do you prefer to wait to have better visibility on the European momentum? Any color on that might be useful.

Question: Hugo Paternoster - Kepler Cheuvreux - Analyst : Okay, guys, thank you very much.

Question: George Webb - Morgan Stanley & Co. International Plc - Analyst : Hi, guys, and Happy New Year from my side as well. Just a question on capital structure and those aspects post the buyback to remind ourselves. Can you just remind me how you're thinking about kind of leverage reduction through maybe the next one, two, three years, and what your kind of leverage range targets would be? And actually, when we think about 2025, with all of the debt facilities maybe a bit closer lined up, what sort of debt interest costs should we be thinking about for a year on a kind of percentage basis? Thank you.

Question: George Webb - Morgan Stanley & Co. International Plc - Analyst : Okay, thank you.

Question: Yann De Peyrelongue - Gilbert Dupont - Analyst : Yes, hi, good morning, and wish you a Happy New Year, too. Two questions, please. The first one is on the VMware price impact. Is it around 3% this quarter on Private Cloud? And the second one around PaaS, could you give us the current [IRR]? Thank you.

Question: Yann De Peyrelongue - Gilbert Dupont - Analyst : Thank you very much.