Sinch (SINCH) Q3 2025 earnings summary

Executive summary

• Achieved 5% organic gross profit growth and record 14% adjusted EBITDA margin, despite significant FX headwinds and flat net sales.

• Initiated a share buyback program, acquiring 1.8% of shares in treasury for SEK 519 million.

• Recognized as a leader in Gartner's Magic Quadrant for CPaaS for the third consecutive year and expanded RCS coverage to all major U.S. operators.

• Strengthened AI capabilities, launched RCS for Business, and saw rapid adoption of conversational messaging.

• Strong cash generation and cost control supported profitability and long-term value creation.

Financial highlights

• Net sales were SEK 6,659 million for Q3, with a 7% negative currency impact year-over-year.

• Gross profit reached SEK 2,318 million, up 5% organically, with gross margin expanding to 35%.

• Adjusted EBITDA was SEK 915 million, up 8% organically, with a record 14% margin since 2019.

• Operating cash flow over the last 12 months was SEK 1,397 million, with a 38% cash conversion rate.

• Net debt to adjusted EBITDA increased to 1.4x, with SEK 4.2 billion in unused credit facilities.

Outlook and guidance

• Reaffirmed midterm financial targets: 7%-9% organic growth and 12%-14% adjusted EBITDA margin by end of 2027.

• Second half of the year expected to be in line with the first half in terms of organic growth.

• Cash conversion R12M at 38%, close to guidance of 40-50%.

• AI adoption and new enterprise wins expected to drive future growth, though AI contracts are not yet meaningful in current results.

• No direct impact from new tariffs in 2025; macroeconomic volatility expected to persist.