Link Mobility Group (LINK) Q1 2025 earnings summary

Executive summary

• Achieved strong organic gross profit growth of 9% year-over-year, with gross profit reaching NOK 409 million and adjusted EBITDA up 18% to NOK 198 million, driven by a favorable shift to higher-margin products and advanced CPaaS solutions.

• Revenue declined 1% year-over-year to NOK 1,651 million, mainly due to the termination of low-value, low-margin traffic, but gross profit growth outpaced revenue, reflecting improved profitability.

• Closed two UK acquisitions, expanding market share to 8% and adding significant upsell opportunities; M&A pipeline remains robust with over 10 actionable targets and five in due diligence.

• Over 50,000 customers and 872 new agreements signed in the quarter, with RCS contract wins up 51% year-over-year.

• Won contracts expected to contribute NOK 42 million in gross profit, with high demand for OTT channels and RCS, which made up 17% of new wins.

Financial highlights

• Gross profit for Q1 2025 reached NOK 409 million, up 15% year-over-year and 9% organically, with margin expanding to 24.8% from 21.3%.

• Adjusted EBITDA for Q1 was NOK 198 million, up 25% reported and 18% organically, with margin improving to 12%.

• Revenue for Q1 was NOK 1.7 billion; organic revenue declined 7% due to termination of low-margin traffic.

• Net income from continuing operations was NOK 39 million, with EPS of NOK 0.13.

• Cash and cash equivalents at quarter-end were NOK 2,446 million; free cash flow after CapEx and interest paid was NOK 350 million LTM.

Outlook and guidance

• Expects high single-digit gross profit growth and double-digit adjusted EBITDA growth for full year 2025, supported by advanced messaging and CPaaS adoption.

• Inorganic growth target of 10% on adjusted EBITDA through bolt-on acquisitions, with leverage policy at 2.0–2.5x net debt/adjusted EBITDA.

• Net retention rate expected to normalize in the second half as impact from terminated low-margin traffic subsides.

• Market trends favor advanced multichannel and conversational solutions, with RCS and OTT channels expected to drive future growth.