Original-Research: NFON AG - from NuWays AG 19.08.2025 / 09:00 CET / CEST Dissemination of a Research, transmitted by EQS News - a service of EQS Group.

Original-Research: NFON AG - from NuWays AG

19.08.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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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:                        19.08.2025
     Target price:                EUR 12.10
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Philipp Sennewald

Q2 preview: Expect muted growth as case remains intact; Chg.

Topic: NFON will release its Q2/H1 report this Thursday, which we expect to
show a muted top-line growth but also further improved profitability driven
by botario's AI solutions. In detail:

We expect Q2 sales to grow 5.1% yoy to EUR 22.4m (eCons: EUR 22.3m), which
should be almost entirely driven by botario, as we expect the legacy
business to remain roughly flat yoy. The reason for this is seen in the weak
macro environment, cautious IT spending, delayed investment decisions as
well as prolonged sales cycles. Based on market observations, many clients,
especially SMEs and export-driven sectors, continue to prioritize cost
control over modernization, limiting upgrades and keeping demand for
traditional telephony broadly unchanged. As a result, we also expect a
slightly lower recurring revenue ratio of 92.9% (-2.0pp yoy). Blended
ARPAgainst this backdrop, Q2 adj. EBITDA is seen to come in at EUR 2.9m,
implying a 12.6% margin (+1.8pp yoy). The improved profitability should as
well be a result of botario (eNuW: 30% EBITDA margin). In this context it is
important to mention, that personnel-related investment as well as AI
initiatives are seen to have weighed on margins also in Q2.

Against this backdrop, we see the top-line guidance of 8-10% growth at risk,
given that macro-related headwinds are expected to persist in H2, which is
why we now expect sales to grow by only 5.1% to EUR 91.8m (eCons: EUR 93.4m). On
the other hand, we regard the adj. EBITDA guidance (EUR 13.5-15.5m) to remain
achievable given the continuously strong botario business (eNuW: EUR 13.6m;
eCons: EUR 14.1m). We thus think that a guidance cut on the top-line is in the
cards for H2 and might come earliest this Thursday.

Action. We slightly adjust our estimates in accordance with the ongoing
reservations on the buyer side in the ICT market as well as prolonged sales
cycles.

Nevertheless, the overall investment case remains fully intact as we see
growth to accelerate from FY26e onwards, driven by AI integration and
operational efficiency. In our view, the acquisition of botario (Q3'24) adds
advanced AI capabilities that not only diversify revenues but also expand
the company's up- and cross-selling opportunities. At the same time, new
features like voicemail transcription, call summarization, and the "Nia"
assistant enhance customer value and support higher ARPU, while NFON is
continuing to streamline operations in line with its "NFON NEXT 2027"
strategy.

We therefore maintain our conviction and keep the stock in our NuWays Alpha
List, which is also based on an attractive valuation of 8.3x EV/adj. EBITDA
FY25e (5.8x FY26e). Reiterate BUY with a new PT of EUR 12.10 (old: EUR 12.30)
based on DCF.



You can download the research here:
https://eqs-cockpit.com/c/fncls.ssp?u=0e0188355ef968c6698b77689ba38bc6
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 Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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2185532 19.08.2025 CET/CEST