OVH Groupe Accelerates to 20% Public Cloud Growth as AI Ambitions Take Shape
Q3 FY2026 Trading Update, June 25, 2026
OVH Groupe delivered its strongest quarterly performance in over two years, with Public Cloud growth surging back above 20% for the first time since Q4 2023. The French cloud infrastructure provider reported Q3 revenue of EUR 290 million, up 6.9% like-for-like, as the company simultaneously laid out ambitious AI plans while navigating extraordinary memory cost inflation that has multiplied sixfold in the past year.
Public Cloud Momentum Returns with 20% Growth
The quarter's standout performance came from Public Cloud, which reached EUR 66 million in revenue, representing 22% of group sales and growing 20.2% like-for-like. This marked a clear inflection point after several quarters of decelerating growth, with CEO Octave Klaba pointing to strong customer acquisition on entry-level VPS offerings and robust upselling to existing customers driven by the company's 3-availability-zone regions in Paris and Milan.
Over the nine-month period, Public Cloud revenue hit EUR 184 million, up 16.9% like-for-like. The acceleration in Q3 suggests the company's repositioning of entry-level offerings and infrastructure investments are beginning to pay off in customer acquisition and retention, with net retention standing at 102% for the quarter.
AI Strategy Emerges with Gladia Acquisition and Workspace Launch
The company made its most definitive moves yet into AI during the quarter, acquiring speech-to-text specialist Gladia and launching a preview of OVHai Workspace during VivaTech, which Klaba described as "an open and collaborative agentic AI platform." When pressed on whether the company has the resources to compete in AI and whether it's too late to enter the market, Klaba was emphatic in his response.
"No, definitely not," he said. "We are in the game because you have the investment that is quite lower right now to invest in the AI. So it's 10x, 8x less expensive. You have more teams available on the market. You have a lot of papers with the researches on the market, and you can create data, scientific data. So it's easier to go in this market 4 years after."
Klaba outlined a pragmatic approach focused on leveraging the company's internal operational data rather than pursuing general-purpose models. "The vertical that is cloud, everything that we need, for example, code, we need securities, we need the defense. We need to manage the infrastructure at scale. All these things, our customers, they want that," he explained. The strategy centers on developing tools OVH needs internally for productivity, security and infrastructure management, then offering those same capabilities to customers as revenue-generating products rather than pure investment plays.
Memory Cost Inflation Forces September Price Increases
CFO Stephanie Besnier disclosed an extraordinary cost environment that will force additional pricing actions. "We live an exceptional situation. As of today, we estimate that the cost of the memories have been multiplied by 6 in the last 12 months. We consider that it would be multiplied by 9 in September," she said, adding that the company is also seeing massive disk price increases and potential CPU inflation.
OVH has already implemented price increases in April and May, which contributed less than 0.5% to nine-month growth. However, Besnier confirmed the company is preparing "additional price increase" for September 2026, though management declined to provide specifics, stating they want to communicate with customers first. The company has front-loaded capital expenditures for both 2026 and 2027 to secure supply and mitigate some cost pressures.
Klaba emphasized the significance of the upcoming moves: "The increases of the prices that we have in mind are very important. So we want to first communicate with our customers first and then with market." This suggests materially higher pricing is coming, which could pressure customer retention even as it protects margins.
Private Cloud Shows Mixed Results Amid VMware Disruption
Private Cloud, which represents 60% of group revenue at EUR 174 million, grew 4% like-for-like in Q3. The Bare Metal business benefited from repositioned entry-level offerings that accelerated customer acquisition, while corporate segments saw sustained upselling. However, Hosted Private Cloud faced headwinds as customers optimized infrastructure and some churned due to Broadcom's VMware price increases following its acquisition.
The company launched new high-end hardware for Managed VMware designed for critical workloads, positioning itself as a potentially attractive alternative for customers seeking to escape Broadcom's aggressive pricing. Over nine months, Private Cloud reached EUR 511 million, up 3.6% like-for-like.
Geographic Performance Improves Outside France
France, representing 48% of revenue, grew 5.8% like-for-like with Public Cloud accelerating above 20% on the strength of the Paris 3AZ region. Europe excluding France showed the strongest improvement, with growth rebounding to 7.4% like-for-like, more than double the first-half rate. Rest of World grew 8.6% like-for-like, driven by Public Cloud expansion and Private Cloud resilience.
Webcloud, the company's legacy hosting business at 17% of revenue, delivered EUR 50 million and 2% like-for-like growth, reaching 5% when excluding legacy telephony and connectivity. The company migrated its entire web hosting customer base to new plans and launched higher-value managed services including WordPress hosting and Video Center as it attempts to move the business model upmarket.
European Commission Win and Organizational Changes
OVH was selected as part of a consortium for an unspecified European Commission contract, adding to its sovereign cloud credentials. The company completed organizational restructuring for its corporate segment with new country teams in place, though work remains on the Webcloud and digital cloud divisions, expected to finish in coming weeks.
Klaba, who took the CEO role in October 2025, acknowledged communication around sovereignty needs upgrading and said the company is working on "step ahead products, step ahead services, step ahead features" that will be released in coming quarters. When asked what remains before hosting an Investor Day, he pointed to completing the organizational changes and improving market communication as prerequisites.
Guidance Confirmed with Leverage Discipline
Management confirmed all full-year guidance for FY2026, with like-for-like revenue growth of 5% to 7% expected to land "closer to 7% than to 5%." Adjusted EBITDA will exceed FY2025 levels, adjusted CapEx will run 33% to 35% of revenue, and levered free cash flow will be positive. The Q3 CapEx increase was fully anticipated and managed without surprises, according to Klaba.
On leverage, Klaba was unequivocal: "For me, 3, it's a red line. We don't want to go more than 3. Our goal is to keep that less than 3 because it's what I've done for 27 years." This commitment to maintaining net debt-to-EBITDA below 3x limits financial flexibility for AI investments but reflects management's conservative approach in a capital-intensive business facing unprecedented component cost inflation.