Earnings call transcript: DHH Q4 2025 shows strong AI growth but misses revenue forecast

Dominion Hosting Holding S.p.A. (DHH) reported its Q4 2025 earnings, revealing a mixed performance. The company achieved revenue of EUR 41.8 million, marking a 13% year-over-year growth. However, this figure fell short of the forecasted EUR 11.1 million, resulting in a revenue surprise of -5.93%. Despite the earnings miss, the company’s stock price saw a slight uptick of 0.48%, closing at EUR 21.1, as investors appeared to focus on the company’s strong growth in AI-related products and stable recurring revenue.

DHH’s overall performance in 2025 was marked by steady revenue growth of 13%, reaching EUR 41.8 million. The company’s business model, heavily reliant on recurring revenue, provided stability with 91% of revenue being subscription-based. The AI segment demonstrated robust growth, doubling its revenue year-over-year, indicating a promising future for this segment.

DHH’s actual revenue of EUR 41.8 million fell short of the forecasted EUR 11.1 million, resulting in a revenue surprise of -5.93%. This miss contrasts with the company’s historical trend of meeting or exceeding forecasts.

Despite the earnings miss, DHH’s stock price increased slightly by 0.48%, closing at EUR 21.1. This stability suggests that investors may be focusing on the company’s strong growth potential in AI and high recurring revenue, rather than the short-term earnings miss.

DHH projects continued growth in its AI and cloud computing segments, with AI-related products expected to remain a key driver. The company also aims to capitalize on its strong recurring revenue base and explore synergies from recent acquisitions.

DHH executives highlighted the company’s strategic focus on AI infrastructure, noting its competitive GPU offerings and aggressive pricing strategy. They also emphasized the importance of maintaining high recurring revenue to ensure business stability.

During the earnings call, analysts inquired about the company’s strategy to mitigate rising energy costs and its plans to expand AI infrastructure capabilities. Executives reiterated their focus on operational efficiency improvements and leveraging strategic partnerships to manage costs.

Nico Crippa, Executive President, DHH S.p.A.: Good afternoon, and again, welcome. Today, together with me there is Antonio Baldassarra. As always, Antonio is the CEO of DHH. I am the Executive President, and we are ready to start with our earnings call, introducing to you the results of 2025. I would ask you to, I mean, disable the mic and also the camera for the new ones who are entering in the call. Okay. Let’s start with the main KPIs of the last year. In terms of revenue, we grew 13%, achieving a result of EUR 41.8 million. 91% of this revenue is recurring, which means that it is automatically renewed year after year. In terms of EBITDA, we grew by 15% to EUR 13.8 million.

The EBITDA margin improved by 1 percentage point, so from 33% of the last year to 34% of this year. It is important to notice that if we consider the like-for-like, the growth was from 33% to 35%. Of course, we booked companies that had a different margin, and the result is the one that you can observe. In terms of net profit, we grew by 25%, achieving a result of EUR 4.6 million. The net financial position is a net cash position of EUR 1.3 million of net cash. In this net financial position, the cash availabilities are approximately EUR 22 million. Okay. Let’s have a look at our agenda.

First of all, we will see what are the corporate events of the last quarter of the year. Then, as always, revenue by region and revenue by segment. The EBITDA bridge, so to understand how we generate our margins. The capital allocation, a business outlook, to reason about what is happening in 2026. Let’s start with the corporate events. In the last quarter of the year, we had a ABB, which is an accelerated bookbuilding. We completed this accelerated bookbuilding on December. It was December 18 with the subscription of approximately 324,000 new shares at a price which was 23 EUR per share.

Basically, it was a premium of 11% with respect to the average of the period of the 30 days before the ABB. We got some interesting, I mean, institutional investors. We got Alchimia and NextStage, and we thank them for the trust. The idea behind this ABB was to, I mean, raise some more money in order to support a kind of acceleration on M&A or on organic, because we are in an interesting moment where we can have some good opportunity, and it’s important also to have the cash ready at hand to basically take the opportunity without losing momentum. This was the reason. Let’s have a look at the net sales by region.

As always, Italy is the primary contributor, accounting approximately 70% of the total turnover, 69%. We have the Balkans. We have Croatia and Bulgaria with 9% each, and Slovenia with 8%. Switzerland, which is the Italian part of Switzerland, accounts for 3%, while Serbia accounts for roughly 2% of the turnover. Let’s have a look at the net sales by region so that we can observe the growth. First of all, we can see that the primary contributor, Italy, grew by 15%, thanks to the organic growth, but also thanks to the acquisition of Teknonet, which produced some positive result in terms of growth. We have Slovenia with 7% and Bulgaria with 7.4%.

An interesting data is the one of Croatia. In Croatia, we can observe a growth of 1.3%, but in reality, this growth is a mix between the growth of our main subsidiary, Plus Hosting, which was 9%, and then a repositioning of another company that we have in Croatia, which is a very small company called CISB, that we are merging inside Plus. In this merging process, we are basically spinning out some kind of revenue, mostly related to resales that is not of interest for us in the middle long term. But all in all, this is to say that also Croatia in the core business was growing pretty nicely. Serbia grew by 5.5%, and Switzerland grew organically very strongly by 14.7%.

Let’s now have a look at the net sales by segment and then the performance by segment. The main segment in the group is cloud computing, which accounts 36% of the revenue of the group with EUR 14.5 million. We have business connectivity with EUR 9.5 million, which represents 24% of the total turnover, and cloud hosting with 22% of the turnover, EUR 8.9 million. We have a data center and networking, which is an ancillary for us as you know, but represents 9% of the total turnover, EUR 3.6 million. We have managed IT services with EUR 1.5 million, which represents 4% of the total revenue.

In terms of growth, we can observe that we have a recovery in the cloud computing segment, which was flat in the previous period. This recovery is also thanks to the fact that we are having a very good performance in all those products which are related to AI. As we shared in our press release, we are not yet disclosing the total amount of the revenue that we have on AI; we are still observing. In terms of trend, we disclosed the fact that it’s a kind of business that doubled basically year-over-year. Also month by month, we are observing a growth that is often double-digit month-over-month.

It’s pretty interesting and contributed to this result. We have cloud hosting, which grew by 6.5%, and the business connectivity, which recorded a very strong growth by 19.3%. We also have a good growth in data center and networking, which grew by 11.6%. In the end, also a very strong performance of the managed IT services, +94%, but thanks also to the acquisition that we made in Italy with Teknonet. Now speaking about the EBITDA, how our margin evolved in the last year. In 2024, our EBITDA was EUR 12 million. On top of this, we can, as we can see, add EUR 4.41 million of net sales.

We also have a small chunk of other revenue, and we have the negative voice that impacted the margins that are the increase very small in material costs. We have the service costs that increased by EUR 1.6 million approximately, including also the wholesale services and licenses. We had an increase in the personnel cost by 16% to EUR 8.1 million, which was basically an increase of approximately EUR 1.1 million with respect to the previous period. All in all, our EBITDA was EUR 13.78 million in 2025 marked this growth performance. In terms of capital allocation, we generated EUR 11.15 million of operating cash flow, so after the net working capital.

In terms of investment, we can observe the tangible and intangible investment. Tangible was EUR 1.18, which basically is as always, fiber and hardware. Intangible is 0.68, very small, is a part of software, which reflect also our practice of not capitalizing all the R&D activity that we do, which are mostly done by our employees, and we tend not to capitalize the work of the internal employees. We had the EUR 3 million of investment in right-of-use. Right-of-use is mostly related to the renewals of the data center facility. All the rest, as you can see, is the free cash that we use in our capital allocation strategy, mostly for financial investments.

In 2025, we invested EUR 7.72 million in terms of financial investments, mostly for the acquisition of Teknonet, but also for the acquisition of the minority of Evolink. This is the capital allocation activity of the last year. Last slide about the business outlook. Now it’s March 23. What we are observing in terms of performance is basically a continuation in the positive momentum that we had in the last part of 2025 with an increase of revenue. A good trend which is going on also in the cloud infrastructure for artificial intelligence. Speaking about the business outlook, of course, we work very hard, I would say, on M&A.

We have several dialogues in place, and we also expect in this year to continue to execute our M&A strategy by achieving some good new project on that. This is a sort of recap of our journey, which is a reminder of what we did in this 11 year. Not to celebrate th