#Sweden #Stockholm #Financial Growth #Sinch AB #Interim Report

Sinch AB's Interim Report: January - June 2025

Sinch AB, a leader in customer communications, recently published its interim report for the first half of 2025. This period marked continued profitable growth despite facing challenges related to currency fluctuations.

Financial Overview

During the second quarter of 2025, Sinch's net sales reached SEK 6,616 million, down from SEK 7,041 million in the same period last year. Nonetheless, the company reported an organic growth of 2%. However, currency effects negatively influenced net sales by 8%. The gross profit for this quarter stood at SEK 2,322 million, a slight decrease compared to SEK 2,386 million last year but showing a 6% increase when adjusted for organic growth.

The EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for Q2 was SEK 760 million. This figure illustrated a 4% increase in organic growth, although facing an 8% decline due to currency fluctuations. When looking at adjusted EBITDA, the company saw stability at SEK 869 million, maintaining its level from the previous year while achieving an 8% organic growth. Unfortunately, profit after tax saw a significant drop, amounting to SEK 25 million versus 95 million in Q2 2024.

The basic and diluted earnings per share fell to SEK 0.03 from SEK 0.11 compared to the previous year. The free cash flow was reported at SEK 523 million, indicating a decrease in financial liquidity.

Year-to-Date Performance

In the first half of 2025, Sinch achieved net sales of SEK 13,665 million, reflecting a slight decline compared to SEK 13,833 million in the same period last year. The overall organic growth was 3%, but currency effects had an adverse impact of 4%. The gross profit improved to SEK 4,730 million, with a 4% organic growth, and despite currency effects dampening the results, it showed resilience.

EBITDA for the six-month period stood at SEK 1,500 million, showing a 1% organic decline, influenced again by adverse currency effects. Adjusted EBITDA rose to SEK 1,758 million from SEK 1,661 million, demonstrating an 8% organic increase. However, Sinch reported a net loss after tax of SEK -23 million compared to a profit of 5 million previously, with earnings per share also dipping to -0.03.

Free cash flow faced a notable decrease due to a temporary increase in working capital, resulting in SEK 419 million for the year-to-date.

Significant Events

Several noteworthy events occurred during this quarter:

• - Leadership Changes: Jonas Dahlberg joined Sinch as CFO on April 1.
• - Strategic Partnerships: An agreement was struck with Authvia, enhancing payment-enabled messaging capabilities.
• - Industry Recognition: The company was identified as a leader in RCS by ROCCO, solidifying its status within the communications sector.
• - Product Innovations: Launch of Mailgun Inspect, showcasing Sinch's commitment to enhancing customer communication technologies.
• - Market Insight: A market study titled 'The State of Customer Communications' was published by Sinch.

Earlier in the year, IDC acknowledged Sinch as a leader in CPaaS, and co-founder Robert Gerstmann took on the role of interim CPO, further exemplifying the company’s evolving leadership and expertise.

Looking Ahead

Significantly, the Board of Directors has decided to initiate share buybacks, reflecting confidence in the company's future. Additionally, Sinch is progressing towards AI-based communication solutions, implementing the Model Context Protocol (MCP).

Sinch plans to present its interim report in a comprehensive webcast on July 22, 2025, at 2:00 PM CEST, providing investors and stakeholders an opportunity to gain insights directly from the executive team.

With a history of profitability and rapid growth since its establishment in 2008, Sinch continues to pioneer ways for global communications. The firm remains dedicated to enhancing customer experiences, backed by strategic partnerships and continued innovation.