Sinch (SINCH) Q2 2025 earnings summary

Executive summary

• Achieved fourth consecutive quarter of organic net sales growth, with 2% organic increase in Q2 2025, despite significant FX headwinds impacting reported results.

• Organic gross profit grew 6% in Q2, with all regions and product categories contributing; gross margin improved to 35%.

• Adjusted EBITDA increased 8% organically to SEK 869 million, with margin reaching 13% in Q2; free cash flow was SEK 523 million, with cash conversion at 60% for the quarter.

• Net debt/Adjusted EBITDA improved to 1.3x, supported by debt repayment and FX translation.

• Share buyback program activated post-quarter, with up to 10% of outstanding shares authorized, reflecting strong financial position.

Financial highlights

• Q2 2025 net sales: SEK 6,616m, with 2% organic growth; nominal net sales declined due to currency translation.

• Q2 gross profit: SEK 2,322m, with 6% organic growth; gross margin expanded to 35%.

• Adjusted EBITDA in Q2: SEK 869m, up 8% organically; margin 13%.

• Free cash flow Q2: SEK 523m; cash conversion at 60% for the quarter and 39% on a rolling 12-month basis.

• Net debt reduced to SEK 5,238m; net debt/Adjusted EBITDA at 1.3x.

Outlook and guidance

• Targeting 7%-9% organic growth in net sales and gross profit, and adjusted EBITDA margins of 12%-14% by end of 2027.

• Prudent outlook maintained for the remainder of 2025 due to volatile macroeconomic conditions; H2 expected to be similar to H1 in aggregate.

• Cash conversion guidance remains at 40%-50% over time, with some variability expected due to working capital and tax provisions.

• Net debt to remain below 2.5x Adjusted EBITDA over time.

• No formal forecasts published; expects persistent geopolitical and macro volatility in 2025.