NFON AG Reaches 500,000 Seats in Q3 2020

NFON reaches 500,000 cloud PBX seats as COVID-19 boosts work from home demand, with recurring revenue up 25%. Published on UC Today.

Gabriel Avner

Munich-based cloud PBX provider NFON AG have announced that they have successfully doubled the number of extensions installed at customer sites since the start of 2018, reaching well over half a million seats.

The news comes on top of a strong earnings report for Q3 at the company. According to NFON AG’s preliminary figures, they succeeded in growing their recurring revenues by nearly 25% year-on-year to earn €43.7 million in the first nine months of 2020.

“We have massively expanded our business activities since the IPO and are very proud to have reached an impressive milestone of more than 500,000 seats,” said Hans Szymanski, CEO and CFO of NFON AG.

“Our dynamic growth both this year and in recent years shows that we are hitting the nerve of the times with our business model. These half a million seats also form a very solid basis for further growth in the future. After all, each seat represents an extension for which monthly charges and call minutes are incurred and thus generates recurring revenue"

The Right Solution for the Work from Home Moment

[caption id="attachment_21981" align="alignright" width="200"] Hans Szymanski[/caption]

Unsurprisingly, NFON AG’s leadership points to the strong demand for solutions that enable companies to work from home during COVID-19 as a driving force behind their considerable growth throughout the year.

“We enable business communication on the road, at home or from the office,” says Szymanski in his statement, adding that, “With NFON, our customers can be completely flexible.”

While the Work from Home reality was a boon for the company as a provider of cloud-based solutions, the company noted that the closure of offices likely served to interrupt their momentum in growing the number of seats with customers.

In their statement to the press, they note that “in the Italian, French, Spanish and UK markets, the company expects a slightly lower growth rate of 17% to 19% for the seat base for 2020 as a whole compared to the 20% to 24% originally projected.”

My Thoughts

This has been a tough year for many businesses as they sought out solutions that would allow them to continue to work remotely during the pandemic. Recognising that their on-prem arrangements lacked the necessary flexibility to accommodate Work from Home, companies quickly pivoted and have begun working with cloud providers like NFON AG to provide their telephony services.

The result has been a massive uptick in business opportunities for providers like NFON AG, as the market continues on the trend of adopting cloud-based solutions for routing calls. At the same time, we should recognise that organisations are under budgetary pressure that may impact overall sales in the telephony sector.

Companies are likely to be thinking about what are their most essential needs for keeping operations running sustainably. Growth may be a secondary concern when survival is in question. It is worth wondering where NFON AG’s sales may have expanded to in a less constrained environment.

Thankfully for NFON AG, they have been well placed as a leading player in the European telephony market with their cloud-based solution, making them both a go-to for maintaining continuity of business and as a part of a company’s digital transformation for increased agility.

Predictions for the Coming Year

[caption id="attachment_33833" align="alignright" width="200"] Dr. Klaus von Rottkay[/caption]

With these latest earnings reports and the growth to over 500,000 seats in under two years, NFON AG has shown that it has a solid strategy to help lead the European market. In the coming year, we expect to see the company push harder for more expansive growth.

NFON AG has undergone recent changes in their leadership, with Dr. Klaus von Rottkay set to replace current CEO Hans Szymanski on December 1st. Under Szymansk’s leadership, the company has built a solid base of technology to meet the market needs and invested further in R&D to help give them an edge in the years to come. Now they have brought on Dr. von Rottkay who has a strong background in marketing cloud solutions in Europe, which could signify that they are preparing to capitalise on their lead and capture more of the market share.