Sinch Q2 2025 presentation slides: Organic growth continues amid AI transformation

Introduction & Market Context

Sinch AB (STO:SINCH) presented its Q2 2025 financial results on July 22, 2025, highlighting continued organic growth momentum and strategic AI initiatives. The cloud communications platform provider reported its fourth consecutive quarter of organic growth despite significant foreign exchange headwinds that masked underlying performance improvements.

The company’s stock remained relatively stable following the earnings announcement, with a marginal increase of 0.06% to SEK 31.12. According to available market data, Sinch shares have gained approximately 54% over the past six months, suggesting strong investor confidence in the company’s strategic direction.

Quarterly Performance Highlights

Sinch reported net sales of SEK 6.62 billion in Q2 2025, representing 2% organic growth year-over-year, though reported growth was -6% due to significant foreign exchange translation effects. Gross profit reached SEK 2.32 billion, with 6% organic growth (-3% reported).

The company demonstrated improved profitability with gross margin expanding to 35.1% from 34% in the prior year period. Adjusted EBITDA grew 8% organically to SEK 869 million, resulting in an adjusted EBITDA margin of 13.1%, up from 12% a year earlier.

As shown in the following chart of organic net sales growth, Sinch has maintained positive momentum for four consecutive quarters:

This growth trajectory is further supported by accelerating gross profit performance, with all regions and product categories contributing to the 6% organic growth:

From a regional perspective, all three of Sinch’s operating segments delivered positive results:

• Americas: 2% organic net sales growth and 6% gross profit growth, with margin expansion of 2 percentage points to 35%
• EMEA: 3% organic net sales growth and 7% gross profit growth, with margin improvement of 2 percentage points to 33%
• APAC: 2% organic net sales growth and 3% gross profit growth, with a 1 percentage point margin increase to 41%

Strategic Initiatives

A central theme of Sinch’s Q2 presentation was the company’s focus on AI integration across its product portfolio. CEO Laurinda Pang emphasized that "AI is fundamentally transforming how businesses communicate," highlighting Sinch’s commitment to building "a comprehensive intelligent communications platform" rather than merely adding AI features.

The company detailed several key AI advancements, including the implementation of Model Context Protocol (MCP), which enables autonomous AI agent communication across Sinch’s global platform. The company is leveraging its experience from processing over 900 billion annual interactions to enhance its AI capabilities.

The following slide illustrates Sinch’s holistic approach to AI integration:

Sinch also highlighted strategic partnerships with major technology platforms, including Salesforce Agentforce and Microsoft Dynamics Customer Insights, which enable AI-orchestrated customer communications at scale. Additionally, the company secured exclusive direct two-way connectivity to all U.S. Tier-1 carriers for 10DLC messaging.

The company’s strategy for value creation focuses on three key areas:

Detailed Financial Analysis

Sinch’s margin improvement continued in Q2 2025, with gross margin reaching 35.1%, up from 33.1% in Q2 2023. This positive trend reflects favorable changes in product and customer mix.

The following chart illustrates the company’s margin development over time:

Cost control measures have supported adjusted EBITDA performance, with Q2 organic adjusted OPEX increasing by 5% year-over-year, while reported OPEX declined by 4%. The company reported continued integration synergies and cost efficiencies, though foreign exchange effects nullified reported growth in adjusted EBITDA.

Cash flow performance was strong in Q2, with free cash flow of SEK 523 million and cash conversion of 60%. Over the trailing twelve months, cash flow from operating activities after investments reached SEK 1,447 million.

Sinch continued to strengthen its balance sheet, with the net debt to adjusted EBITDA ratio improving to 1.3x from 1.7x in Q2 2024. This deleveraging was primarily driven by free cash flow generation and translation of debt in foreign currency.

Following this balance sheet improvement, Sinch’s Board of Directors resolved to activate a share repurchase program authorized by the Annual General Meeting, allowing for the repurchase of up to 10% of outstanding shares.

Forward-Looking Statements

Sinch maintained its mid-term financial targets, aiming to achieve 7-9% organic growth in both net sales and gross profit by the end of 2027. The company also targets an adjusted EBITDA margin of 12-14% and intends to maintain net debt below 2.5 times adjusted EBITDA.

While maintaining a cautious outlook due to macroeconomic uncertainties, management expressed confidence in the company’s strategic direction, particularly regarding AI integration and partnerships. The focus on profitable and sustainable growth, combined with disciplined cost control and operational efficiency, is expected to drive continued margin expansion.

The company’s financial leverage policy remains conservative, with a commitment to balance debt reduction, potential acquisitions, and shareholder returns. The activation of the share repurchase program signals management’s confidence in Sinch’s financial position and future prospects.

With its continued organic growth momentum, improving margins, and strategic focus on AI integration, Sinch appears well-positioned to capitalize on the evolving communications technology landscape while navigating ongoing macroeconomic challenges.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.