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1. Company Snapshot

1.a. Company Description

Sinch AB (publ) provides cloud communications services and solutions for enterprises and mobile operators in Sweden, France, the United Kingdom, Germany, Brazil, India, Singapore, other European countries, the United States, and internationally.It operates through four segments: Messaging, Voice and Video, Email, and Operators.The company offers conversation, messaging, verification, and calling APIs, channels, numbers, and inteliquent and solutions, which include marketing team, operations, customer service, conversational marketing, commerce, and care, as well as mobile identity and security.


It serves to financial services, healthcare, media and entertainment, retail, telecommunication, and travel and transport industries.The company was formerly known as CLX Communications AB (publ) and changed its name to Sinch AB (publ) in July 2019.Sinch AB (publ) was founded in 2008 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on SINCH

Recent drivers behind Sinch AB's performance include: * Modest growth and competitive pressures, as highlighted in the Q3 2024 earnings call, which may have impacted the company's revenue and profitability. * Strategic initiatives and regional performance improvements, which the company is focused on to drive growth. * New financial targets announced on November 20, 2024, which may indicate a shift in the company's strategy to drive growth and profitability. * The launch of Elastic SIP Trunking on October 29, 2024, which provides businesses with scalable, reliable, and cost-efficient communication services. * Recognition as an RCS Business Messaging Leader by Juniper Research on November 7, 2024, which may indicate the company's leadership in the industry. * Unveiling of 2025 predictions on December 17, 2024, which highlights the company's focus on digital customer communications and its vision for the future.

1.c. Company Highlights

2. Sinch's Q3 2025 Earnings: A Mixed Bag

Sinch reported a flat revenue performance year-over-year at SEK 6.7 billion, missing estimates, while gross profit grew 5% organically, and gross margin expanded to 35%. The company's adjusted EBITDA margin came in at 14%, a record high, driven by a combination of increased profitability at the product level and a positive product mix shift. However, EPS came out at '-0.01', significantly below estimates of '0.59'. The company's operating expenses were down 5% compared to the same quarter last year, representing a marginal 3% organic OpEx increase. The operating cash flow amounted to SEK 1.4 billion over the last 12 months, corresponding to a 30% cash conversion rate.

Publication Date: Nov -16

📋 Highlights
  • Organic Gross Profit Growth: 5% YoY with 35% margin expansion, driven by Americas' 8% growth.
  • EBITDA Margin Progress: Achieved 14% adjusted EBITDA margin, near upper 2027 target range (12-14%).
  • Share Buybacks Initiated: Repurchased 1.8% of shares (SEK 519M), signaling disciplined capital allocation.
  • Regional Performance: Americas grew 7% organically (net sales), Asia-Pacific 7%, while EMEA declined 2%.
  • Midterm Targets Reaffirmed: 7-9% organic growth and 12-14% EBITDA margin by 2027, on track despite headwinds.

Regional Performance

The company's regional performance was mixed, with strong organic gross profit growth of 8% in the Americas, driven by a strong turnaround in the U.S. network voice business. In EMEA, organic net sales and gross profit declined by 2% and 3%, respectively, primarily due to the company's strategic decision to steer away from fixed-price contracts. In Asia Pac, organic net sales grew by 7%, driven by new large messaging wins. As Johnas Dahlberg noted, "We're executing with discipline and have made significant progress across each pillar."

Valuation and Outlook

With a P/E Ratio of -3.79 and an EV/EBITDA of -36.07, the market is pricing in significant growth expectations. The company's guidance suggests an organic growth rate of around 5% in the next 1-3 quarters, which may not be enough to justify current valuations. Analysts estimate next year's revenue growth at 1.8%. Sinch's healthy net adds trend in customer accounts, with 5% year-to-date growth, and its focus on conversational messaging and AI capabilities are positive signs.

Strategic Initiatives

Sinch is focusing on reaccelerating growth, expanding EBITDA margins, and disciplined capital allocation. The company has made significant progress in customer diversification and has secured several new enterprise clients. The company's API platform experienced solid development, but slowed in Q3 due to fixed-price contracts cycling out and price compression. However, new customer wins and conversational messaging are expected to positively impact the API platform.

3. NewsRoom

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AI-powered conversational messaging drives global Black Friday momentum, Sinch data shows

Dec -04

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Sharply Narrowed Net Loss and Share Buyback Could Be a Game Changer for Sinch (OM:SINCH)

Nov -16

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Vida Raises $4M Series A to Accelerate AI Voice Innovation and Expand Leadership Team

Nov -13

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Sinch Releases 2026 Predictions: AI to Redefine How Brands Connect

Nov -11

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Sinch AB (CLCMF) Q3 2025 Earnings Call Highlights: Resilience Amidst Challenges and Strategic ...

Nov -05

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Sinch reports third quarter 2025 results - Improved profitability and positioned for long-term growth

Nov -05

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Is Sinch Poised for Growth After 50% Surge and Cloud Messaging Momentum in 2025?

Sep -24

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Twilio Stock Got Hit After Earnings. It’s Still a Software Winner.

Sep -10

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.67%)

6. Segments

Messaging

Expected Growth: 25.9%

Growing demand for omnichannel customer engagement, increasing adoption of cloud-based communication platforms, and rising need for personalized customer interactions drive the growth of Sinch's messaging platform.

Voice

Expected Growth: 25.9%

Growing demand for omnichannel customer engagement, increasing adoption of cloud-based communication platforms, and rising need for personalized customer interactions drive Sinch AB's growth.

Small and Medium-sized Businesses

Expected Growth: 25.9%

Growing demand for omnichannel customer engagement, increasing adoption of cloud-based services, and rising need for effective customer communication are driving the growth of Sinch AB's Small and Medium-sized Businesses segment.

Email

Expected Growth: 25.4%

Growing demand for cloud-based communication platforms, increasing adoption of omnichannel engagement, and rising need for customer experience enhancement drive the growth of the market, presenting opportunities for Sinch's potential acquisition or investment.

Other and Eliminations

Expected Growth: 10.5%

The Other and Eliminations segment of Sinch AB (publ) is expected to grow at a CAGR of 10.5% driven by increasing consolidation of non-operating income and expenses, as well as intercompany transactions, providing a comprehensive view of the company's financial performance.

7. Detailed Products

Sinch Messaging

A cloud-based messaging platform that enables businesses to send and receive messages, including SMS, MMS, RCS, and WhatsApp Business API.

Sinch Voice

A cloud-based voice platform that enables businesses to make and receive voice calls, including PSTN, SIP, and WebRTC.

Sinch Verification

A verification platform that enables businesses to verify user identities and prevent fraud, including SMS and voice-based verification.

Sinch Authentication

An authentication platform that enables businesses to authenticate users and prevent unauthorized access, including two-factor authentication.

Sinch Insights

A data analytics platform that enables businesses to gain insights into their customer interactions and optimize their communication strategies.

8. Sinch AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sinch AB (publ) operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.

Bargaining Power Of Customers

Sinch AB (publ) has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are highly customized, making it difficult for customers to switch to alternative providers.

Bargaining Power Of Suppliers

Sinch AB (publ) relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate favorable terms mitigate this risk.

Threat Of New Entrants

The cloud communication platform market is highly competitive, and new entrants can easily disrupt the market with innovative products and services. Sinch AB (publ) must continue to innovate and invest in research and development to stay ahead of new entrants.

Intensity Of Rivalry

The cloud communication platform market is highly competitive, with many established players and new entrants vying for market share. Sinch AB (publ) must focus on differentiating its products and services and investing in marketing and sales to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.62%
Debt Cost 3.95%
Equity Weight 80.38%
Equity Cost 15.28%
WACC 13.05%
Leverage 24.40%

11. Quality Control: Sinch AB (publ) passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Orange Belgium

A-Score: 5.3/10

Value: 5.8

Growth: 4.3

Quality: 2.7

Yield: 0.6

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Helios Towers

A-Score: 5.2/10

Value: 3.0

Growth: 8.4

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
RADCOM

A-Score: 4.7/10

Value: 4.0

Growth: 6.9

Quality: 7.5

Yield: 0.0

Momentum: 8.5

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
LINK Mobility

A-Score: 4.6/10

Value: 5.8

Growth: 8.7

Quality: 3.1

Yield: 0.0

Momentum: 7.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
VEON

A-Score: 4.3/10

Value: 7.8

Growth: 2.0

Quality: 5.6

Yield: 0.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Sinch

A-Score: 3.9/10

Value: 7.5

Growth: 6.3

Quality: 3.6

Yield: 0.0

Momentum: 5.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.84$

Current Price

28.84$

Potential

-0.00%

Expected Cash-Flows