OVHcloud hits all FY2026 targets, turns free cash flow positive
OVHcloud has reported full-year results for the fiscal year ended 31 August 2026, meeting every financial target it set twelve months earlier. Group revenue reached €1,145.1 million, up 7.2% on a like-for-like basis and 5.6% on a reported basis, coming in ahead of the company's guided range of 5 to 7%. Levered free cash flow turned positive for the first time since the company's IPO, reaching €24.7 million against a loss of €27.0 million in FY2025.
Chairman and chief executive Octave Klaba said the year was defined by operational discipline. "FY2026 was a year of discipline. We managed our inventory and capex very closely while keeping operating costs under control," he said in a statement accompanying the results. Klaba, who returned to the top role twelve months prior, pointed to Q4 as the clearest signal of momentum, with like-for-like growth of 10.5% in the final quarter and monthly revenue exceeding the €100 million mark by the fiscal year-end.
Financial performance
Adjusted EBITDA grew 9.7% to €480.5 million, expanding the margin by 1.6 percentage points to 42.0%. The company says roughly 70% of incremental revenue converted into EBITDA, a conversion rate it describes as exceptional. Net income rose to €9.4 million from a near-breakeven €0.4 million the prior year.
Public Cloud was the standout performer by product line, growing 18.9% like-for-like to €255.1 million, with Q4 accelerating to 24.3%. The ramp-up of OVHcloud's three-availability-zone region in Paris was a primary driver, supported by cross-selling across the product portfolio. Private Cloud, still the largest segment at 60% of revenue, grew 4.5% for the year and returned to 7.1% growth in Q4. Domain name sales within Web Cloud reached record daily volumes, which the company attributed in part to demand from developers working in AI-assisted and vibe-coding environments.
Capital expenditure totalled €422.4 million on a reported basis, though OVHcloud notes that €49.5 million relates to memory and disk components pre-purchased for FY2027. Stripping that out, adjusted capex represented 32.6% of revenue, below the 33–35% target range. Net debt stood at €1,157 million at 31 August 2026, with leverage at 2.7x, down 0.2x year-on-year. No significant debt repayments fall due before FY2030. The group holds €255 million in available liquidity, including a fully undrawn €200 million credit facility.
Market context and strategic outlook
OVHcloud sits in a distinctly different competitive position from the three US hyperscalers. With 250 MW of connected power capacity and 140 MW currently operational, the company argues it has headroom for near-term growth without committing to new site construction, a meaningful advantage in a market where power procurement and data centre build timescales are stretching significantly. European sovereign-cloud demand, reinforced by the EU AI Act's data-residency provisions and national requirements such as France's SecNumCloud framework, continues to favour providers with fully EU-controlled infrastructure. OVHcloud obtained a third SecNumCloud qualification in September 2026, extending coverage to SNC Cloud Platform across Europe.
On the AI front, OVHcloud made three bolt-on acquisitions during the year: Seald, specialising in end-to-end encryption; Dragon LLM, which builds AI models for regulated industries; and Gladia, a voice-AI specialist. The combined output, OVHai Workspace, was unveiled at VivaTech in June 2026. Klaba signalled that 2027 will be the deployment year for this AI strategy, with further detail expected at an AI Summit on 19 November 2026.
For FY2027, the group is targeting like-for-like revenue growth above 10%, adjusted EBITDA margin above 42.5%, positive levered free cash flow, return on capital employed above 9%, and leverage below 2.7x. A new chief financial officer joins on 1 December 2026; OVHcloud has not yet disclosed the appointee's name. Q1 FY2027 revenue is scheduled for release on 7 January 2027.