Classification of NuWays AG to NFON AG

Company Name:	NFON AG
ISIN:	DE000A0N4N52
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 5
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

Weak Q2p triggers PW; chg. est. & PT

Yesterday, right after the bell, NFON published weak preliminary Q2/H1 figures alongside a significant guidance cut, that implies no return to growth in FY26. The key takeaways:

Q2 sales fell 5.4% yoy to € 20.9m (eNuW: € 21.6m), against the 2.3% decline seen in Q1. We see the reason for this in a continued soft momentum in the legacy cloud PBX business, which still accounts for the vast majority of sales. Here, seat erosion should have continued (eNuW: -4% to 631k) on subdued order intake and churn. Prolonged decision cycles on larger customer projects and continued investment reluctance among enterprise customers are additionally weighing on the top-line.

By contrast, profitability moved the right way as Q2 adj. EBITDA of € 2.6m implies a margin of 12.5%, up 4.3pp sequentially from 8.2% in Q1, as the cost measures under NFON Next 2027 are seen to bite. For H1, this leaves sales down 3.8% yoy at € 42.5m and adj. EBITDA down 22.8% at € 4.4m (margin -2.6pp yoy at 10.3%).

The revised guidance sees sales at € 84.5-86.0m or -4.3% at mid-point (old: low-to-mid single-digit growth) and adj. EBITDA at € 9.5-10.5m (old: > € 12m). Backing out H1, this implies H2 sales of € 42.0-43.5m, i.e. a 3.0-6.4% yoy decline, and adj. EBITDA of € 5.1-6.1m (margin: 12.1-14.0%). The updated outlook hence pushes the return to growth that management had previously expected from Q3 onwards.

AI traction remains the decisive lever, albeit off a still small base. Recurring revenues in Intelligent Assistant and Customer Engagement developed 'clearly positively' according to management. Together, the two accounted for c. 10% of sales as of Q1 while growing at a low-double-digit rate (eNuW), which is encouraging in itself, but not enough to offset the decline in the core. As a result, we now expect the crossover, at which AI-driven growth outweighs the core decline, to arrive later than previously assumed.

Action: We cut our FY26e estimates to sales of € 85.4m and adj. EBITDA of € 9.5m and take FY27 down respectively. Reaccelerating sales growth, faster AI monetisation and a normalisation in enterprise capex would come as upside.

At 6.9x FY26e EV/adj. EBITDA the shares are not optically cheap, yet with a >90% recurring revenue base, rising ARPU, positive FCF and a near-unlevered balance sheet, we still regard the the risk/reward as attractive from here.

BUY with a reduced PT of € 5.00 (old: € 8.30), based on DCF.

You can download the research here: nfon-ag-2026-08-14-previewreview-en-dadf4
For additional information visit our website: https://www.nuways-ag.com/research

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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