Sinch AB (publ)

Welcome to the Cinch Q1 report for 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Lorinda Pang and CFO Jonas Dahlberg. Please go ahead.

Thanks very much. Hello, everybody. Appreciate you joining us here today. Let's quickly jump into things and move to slide two to look at the highlights for the quarter. I'm pleased to share that our first quarter results for 2025 demonstrate momentum across our key financial metrics and transformation initiatives. In Q1, we continue to deliver on our growth agenda with net sales and gross profit both increasing by 4% year over year. On an organic basis, this translates to 3% growth in net sales and 2% growth in gross profit. This marks our third consecutive quarter of organic net sales growth. We delivered organic growth and gross profit across all regions and all product categories, reflecting the improving execution in our business. Our performance metrics remain solid with a gross margin of 34% and an adjusted EBITDA margin of 13% in line with our midterm guidance range. Adjusted EBITDA increased organically by 8% year over year, driven by gross profit growth combined with reduced operating expenses, demonstrating our commitment to balancing efficiency with strategic investments. It also reflects meaningful progress on our transformation agenda across go-to-market, product integration, and operational excellence pillars. The efficiency measures implemented last year have not only successfully mitigated inflationary pressures, but are now yielding tangible operational improvements. This disciplined approach has strengthened our financial resilience in an uncertain macroeconomic environment while creating headroom for strategic investments in growth areas. Moving on to cash and balance sheet. Cash conversion was 50% for the last 12 months, positioning us in the upper part of our 40% to 50% target range. Cash flow from operations after investments was a negative 104 million krona, which was affected by a temporary working capital increase of 370 million krona, driven by a cost optimization agreement with one of our larger suppliers. While this agreement positively affects our gross margin and provides stability going forward, it has a short-term negative cash flow impact, which is expected to gradually normalize in the coming quarters. Our balance sheet continues to strengthen with our net debt to adjusted EBITDA ratio improving to 1.4 times, down from two times in Q1 of 2024. This gives us greater financial flexibility to pursue our value creation agenda. We've talked a lot about our transformation and integration agenda over the past year, and I'd like to pivot to talk about examples of the innovations we are driving. Email and RCS represent two prioritized growth opportunities, and in this quarter, we have launched new AI-related functionality for both Mailgun and Mailjet. We made RCS generally available in our conversational API product, and I'll come back to all of these later. Beyond our core product innovations, we have developed practical AI solutions that deliver measurable business impact. Our internally developed support chatbot now resolves 65% of customer email and messaging inquiries without human intervention. Similarly, our AI-powered agent assistance technology has improved live chat resolution times by 20% while enabling multilingual support capabilities for our engaged customers in EMEA. These innovations demonstrate how AI remains an integral part of our strategy to deliver growth, efficiencies, and enhanced customer experiences. Moving to the next slide, we'll look at the region's performance. Let me start with the Americas, which delivered solid results with 4% year-on-year organic growth in net sales, though gross profit growth was more modest at 1%. The region maintained a stable gross margin at 34%, and I'm particularly pleased to see gross profit increased across all product categories compared to the same time last year. Our network connectivity business, which is dominated by network voice services, showed notable improvements driven by new commercial agreements with both customers and suppliers. We are seeing traction in multi-product usage. One example is LiveVox, a leading contact center platform who implemented Cinch's elastic SIP trunking to unify their voice and SMS operations. This integration enabled SMS numbers for voice callbacks, streamlined channel management through a single dashboard, and enhanced the customer journey through seamless cross-channel communication. Turning over to EMEA. We previously mentioned that we expected to begin seeing underlying growth in EMEA API platform outpacing the negative impact of some fixed price contracts we exited in 2024. The improvements commenced in the fourth quarter and continued also in Q1. Overall, the region delivered 7% organic growth in net sales and 3% organic growth in gross profit. Gross margin was 31%, down slightly from 33% in the comparable period. We experienced divergent performance across our product segments with API platform and applications showing strong growth, while network connectivity was impacted by the timing of some project-based contracts, which are expected to normalize throughout the year. There was significant momentum in RCS and email wins, as well as partner-led growth this quarter, which positions us well for future growth in the region. I will come back to both RCS and partners in a moment. But one compelling example of the value we are adding to the customers is the European Commission. They partnered with us to implement a chatbot solution for their Discover EU program, which provides 24 by 7 automated support to young travelers across Europe. The AI-powered solution we developed together with implementation partner Campfire is built on Chat Layer by Cinch and resolves more than 80% of requests without human intervention. This successfully addresses the challenge of supporting inexperienced young travelers who need immediate assistance during their train journeys throughout the EU. Turning to APAC, we saw mixed results. Overall, we had 4% year-on-year organic decline in net sales driven by a reduction of low-margin SMS revenue in India. This was partially offset by strong growth in the rest of Asia-Pac as our investments in enterprise sales in the region are beginning to bear fruit. The region delivered a solid 5% organic growth in gross profit. The gross profit growth was primarily driven by an improved product mix and higher gross margins, demonstrating our ability to adapt to market conditions and focus on higher value offerings. One demonstration of the success we are enabling in the region is Ozmobiles, a leading Australian mobile phone retailer who implemented Cinch Engage to optimize their SMS marketing strategy. They selected Cinch for our seamless platform integration with their existing tech stack, including Shopify and Klaviyo CRM. This implementation delivered exceptional results, including a 3,000% ROI on targeted campaigns like their Valentine's Day promotion and meaningful annual marketing cost savings. Overall, I'm encouraged by the performance in each of the regions this quarter. The product mix improvements and commercial initiatives are starting to yield results, creating momentum as we move further into 2025. Next slide, please. Cinch is profitable and cash generative. We are focused on profitable and sustainable growth organically and through M&A. As such, our value creation agenda is underpinned by three essential components, growth reacceleration, EBITDA margin expansion, and active capital allocation resulting from continued strong cash generation. We'll cover aspects of each of these throughout the call. As a reminder, we are targeting 7% to 9% organic growth in both net sales and gross profit with adjusted EBITDA margins of 12% to 14% by the end of 2027. These growth rates reflect an ambition to grow faster than the market in each product category. Additionally, our financial leverage policy states net debt over time shall be below two and a half times adjusted EBITDA measured on an LTM basis. Now I want to take a moment to reiterate the inputs to unlocking our growth reacceleration. Enterprise expansion, self-serve capabilities, RCS and email, as well as partners and ecosystems. I'd like to share some of the strong activity and tangible results in each of these areas. So let's move to the next slide as we talk about enterprise expansion. The number of large enterprise customers increased by 5% year over year. Our definition of large enterprise consists of customers representing more than 2 million krona in gross profit annually. The growth in large enterprise customers is important for several reasons. First, enterprise customers typically provide superior customer lifetime value than smaller customers. They provide stability and predictability to our revenue streams with a longer contract terms and higher retention rates than smaller accounts. Second, these relationships typically expand over time as enterprises deploy our solutions across additional use cases, geographies, and business units. This land and expand approach drives organic growth with lower customer acquisition costs when compared to complete greenfield customers. Third, enterprise customers help validate our market position and technology leadership, making us more attractive to other potential large customers and strengthening our competitive mode. Moving to the next slide, where we'll discuss self-serve. When it comes to self-serve, it has emerged as a powerful growth driver, evidenced by the 13% year-over-year gross profit growth in Q1. There are tens of thousands of customers in this category, generating high gross margins and representing more than 15% of GP. It is easy to think of self-serve as primarily an SMB motion, but self-serve capabilities has become a key purchasing criteria for enterprise customers as well. Technical as well as business decision makers do a lot of self-discovery and testing before engaging with potential suppliers. Further, increasing self-usage rates demonstrate strong product market fit and indicate lower friction in customer onboarding and expansion. This translates to improved unit economics as customers can discover, implement, and scale our solutions with reduced dependency on our customer success or sales resources. Let's now look at RCS on slide seven. I'm excited to share the momentum we're seeing with RCS, which represents a transformative opportunity for both Cinch and our customers, with the potential to turn every message into an experience. I mentioned in the intro that in Q1, RCS was made generally available in Conversation API, and we also launched our RCS business enablement service. This new offering helps carriers seamlessly launch, operate, and monetize RCS for Business, addressing previous barriers to adoption. Our enhanced CinchBuild dashboard now allows businesses to create, test, and deploy RCS agents in just a few clicks using our upgraded provisioning wizard. This democratizes access to rich messaging capabilities that were previously complex to implement, opening the technology to a much broader market. Our strategic presence across key industry events, including Mobile World Congress in Barcelona, Enterprise Connect in Orlando, Adobe Summit and Shop Talk in Las Vegas, and our Google partner, New York Showcase, has amplified our RCS market positioning. We showed carriers how to monetize, enterprises how to enhance customer engagement, and technology partners how RCS integrates seamlessly into existing marketing stacks. These events further established cinch as the connective tissue in the RCS landscape, driving both awareness and pipeline growth. In Q1, the number of RCS messages exceeded 600 million, which meant an approximate 50% increase versus the last quarter of 2024, and activity continues to accelerate. Let's turn to the next slide, please. Our email business continues to demonstrate exceptional strength and innovation, validating our multichannel strategy. We've delivered 165 billion emails in Q1 alone, corresponding to double-digit volume, revenue, and gross profit growth. This continued growth reflects both market confidence in our email solutions and our success in expanding customer relationships. This is particularly noteworthy in a mature market segment. Please note that our self-serve email business is captured in our self-serve category in our financial reporting, which has been a key driver of predictable revenue growth. But email is more than self-serve. As an example, in Q1, we successfully completed onboarding of two major enterprise customers in the retail and transportation sectors. These implementations alone represent more than 100 billion annual email messages, demonstrating our ability to win and implement large-scale enterprise deployments. They also demonstrate cross-selling success as both clients were originally large SMS-only customers. From a partnership perspective, Mailgun has teamed up with Redshift to expand the email security offering to include free domain-based message authentication reporting. This enhancement addresses growing concerns around email security and deliverability, providing our customers with enterprise-grade protection without additional cost, which is a compelling differentiator in the market. Our product teams have delivered significant innovations this quarter, which I mentioned earlier. First, Mailgun's Open Source Model Context Protocol, or MCP, transforms how businesses access email analytics. instead of leveraging complex dashboards or technical queries users simply ask questions in everyday language to get the insights they need this means anyone from marketing teams analyzing campaign performance to developers troubleshooting delivery issues to customer support teams investigating message status can immediately access powerful email insights without technical expertise Second, Mailjet has introduced AI-powered content tools that make email creation dramatically faster and easier. Users can automatically generate professional templates, create compelling content in nine different languages, and track performance with enhanced analytics, all without specialized design or marketing expertise. For businesses, this means faster campaign deployment, consistent brand presentation, and more effective email programs, ultimately strengthening customer relationships, all contributing to higher customer satisfaction and stickiness. Moving on to slide nine, where we'll talk about partners and ecosystems. We are experiencing strong momentum across partners and ecosystems. We've seen solid growth in partner driven new local acquisition, demonstrating the effectiveness of our collaborative approach. Our partner driven business meaningfully outperformed overall GP growth in the first quarter, highlighting the leverage and scale our partnerships provide. Our ecosystem strategy continues gaining industry validation through prestigious recognitions, including Adobe's Technology Partner of the Year Award for the third consecutive year, HubSpot's Essential App designation, and expanded SAP collaborations. These partnerships position Cinch as the embedded communications layer within enterprise technology stacks, delivering measurable value through seamless integrations and enhanced customer experiences. We are actively pursuing a further expansion of our partner network. Our approach is targeted, focused on expanding partnerships in prioritized markets and verticals to maximize impact. Our partnership with OneReach.ai exemplifies our strategy to simplify access to and benefit from AI in customer communications, opening up new avenues for innovation and value delivery. This strategic collaboration enables businesses to rapidly build AI agents that handle complex interactions using real-time data across systems, dramatically accelerating time to value. It is an example of a leadership position we are moving towards empowering the next generation of agentic AI with enterprise-grade architecture, scale, and global presence. Now, with those remarks, I'd like to hand the word over to Jonas to take us through more details on the financials.

Thanks a lot, Lorenda. And although I joined Cinch just the first day of the second quarter, it's really my pleasure to present the team's results of the first quarter. So let's jump straight into it. Starting with the top line, revenue growing 4% year over year. And this three percentage point was organic. Good news here is the third consecutive quarter of organic growth. And as you also can see, we've now passed the previous all time high on revenue on an LTM basis. Moving over to gross profit, next slide that is. We had a similar 4% growth in the quarter, of which 2% was organic. What you can see here also is a longer trajectory of positive development on an LTM basis. And this is driven by a gross profit margin expansion, which I will come back to in a bit. Positive here in the quarter, if you move over to the next page, is that the gross profit growth is driven by basically all regions and all product categories. The biggest gainers in the quarter was APAC with a 5% organic growth year over year, as well as applications in the product categories. Now, what's also good to see here is that network connectivity is back with a 2% organic GP growth. And I actually want to double click a little bit on the network connectivity business. So in particular network connectivity Americas, which is predominantly network voice in the US. So what you can see here is a development where we had a few tough quarters, but now we're getting back to growth. And I'd like to explain a little bit more what's going on here. So we had a decline for a few quarters due to two reasons. The first one was a reform of toll-free interconnect. by the FCC and this had an impact on pricing. This is washed through the numbers now, so it's done and over with. And the second thing is a phase out of legacy TDM, that's time division multiplex technology in the infrastructure, which has impacted our cost as suppliers increased cost quite a bit. Now what's going on here is we've renegotiated with suppliers, we've renegotiated also with customers and we're shifting out this technology for IP. And what you can see here is the positive developments of basically those two trends reversing. So very good news regarding network connectivity. Leaving gross profit and move over to EBITDA. So we have first looking at OPEX, adjusted OPEX. You can see that adjusted OPEX is essentially flat in the quarter in fact if you look at a currency adjusted basis adjusted opex is down one percentage point year over year and this is a result of the cost savings program we had last year as well as integration efforts paying off with higher scalability in the business as we take out synergies from our integrations And what I'd like to say is we don't see any visible market weakness following the macro uncertainty from the tariff discussion in the US. But we stay very vigilant when it comes to cost and we will manage this very carefully as we continue to monitor the development in the marketplace. But important to say we don't see any weakness. And now The positive effect here is the GP improvement we had in the quarter essentially fully drops down to adjusted EBITDA. So 4% GP growth translates into 12% adjusted EBITDA growth and 8% of that is organic. Again, I'd like to double click a little bit if we move over to the next page so you can see the bridge between adjusted EBITDA and EBITDA. and as said we had a strong improvement of adjusted ebitda 95 million compared to the same quarter last year the important point here is that integration and restructuring cost essentially is unchanged if you look at that in combination it's just one million increase compared to last year And really the swing factor here is FX effects. It's revaluation of balance sheet items that impacts nominal EBITDA. And last year we had 43 million positive on EBITDA and this year a negative 67 million. So the swing is 110 million. Important, I think, just to get clarity where the difference is coming from. Leaving EBITDA, moving over to the margins. As you can see here, the positive trend in gross margin. And this is to a large extent due to positive mix effects. So our applications have higher margins and they're growing faster than the rest of the mix. as an example and also APAC stronger margins and this has a positive impact on gross margin and this also translates to improvements of adjusted EBITDA margins as you can see from this chart moving to the next page now going into more of balance sheet items we continue to strengthen the balance sheet net debt to ebda 1.4 in the quarter that's down from 1.5 end of the year and in line with our capital allocation strategy uh the board has uh asked agm for a mandate for share buybacks and i think this is a testimony of the strength of the balance sheet really uh Next page looking at the cash conversion. It's at the upper end of our cash conversion target. 50% cash conversion over last 12 months. So that's very positive. But we have a bit of a working capital swing which impacts cash flow in the quarter. And I'd like to go a little bit more into detail into that as well. So you get comfort that this will normalize. So next page, what you see here are both the current asset and current liabilities items of working capital. and the first thing i'd like you to pay attention to is the solid line in the middle which shows that you know our working capital over time is essentially nil but there are some swings and the swing we have now seen over the last quarter is within normal variations in fact if you look at the counter receivables it's actually a positive development So the swings really come from two factors in the quarter. The first one is we had a very high level of payables in December and that now swung back. And the other thing is a temporary increase of other receivables. This is a prepayment to a supplier of 370 million which is related to this improvement that we saw in the network boys business we expect this to normalize over the year and we don't see any structural shift in working capital and hence we are confident about work cash flow also going forward And with that, I'm handing back to Lorinda for some final remarks and then Q&A.

Terrific. Thank you so much. So before we go there, let me summarize the quarter. Cinch delivered improved growth and stable margins in the first quarter. This is the third consecutive quarter of year-over-year organic net sales growth, and we delivered organic gross profit growth in all regions and product categories. We improved gross margins and adjusted EBITDA margins, with adjusted EBITDA increasing 8% organically year-over-year. Our financial position continues to strengthen and we delivered rolling 12-month free cash flow at the top of our guidance range. We are making meaningful progress on our transformation agenda. Our leadership position was reconfirmed this quarter by IDC and Omdia, with specific emphasis on our RCS and AI-enabled customer communications offerings and strategy. We are focused on executing our plans and winning in the areas we have the right to win. enterprise expansion, self-serve, RCS and email, and partners and ecosystems. And as you've heard throughout today's presentation, we are making meaningful progress across each of these strategic priorities, translating our transformation efforts into tangible market advantages and customer successes. Our execution in Q1 was an important building block towards our midterm guidance of 7% to 9% organic growth by the end of 2027. So with that, I want to thank you to everybody for listening, and let's open up the call for questions, please.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Eric Lindholm Rogesel from SEB. Please go ahead.

Yes, good afternoon. Welcome, Jonas. Thank you for taking my questions. I wanted to start on the optimization agreement that you did with one of your largest suppliers here, which I guess was in America. How much did this contribute to your gross profit growth this quarter? And did we see the full impact here in Q1, or should we see a more significant impact in the coming quarters? And then a follow-up as well. So organic gross profit growth continues to improve, and it looks like some of your peers are also seeing accelerating growth but do you think the improved trends that you're seeing here are sort of mainly a result of a better market or is this more so a result of internal initiatives thank you

Hi Eric, thanks for the question. I'm going to start with your second question and then I'll ask Jonas to talk about the optimization agreement. So to your point, I think the market is certainly seeing signs of strength, which is very positive, but I think that our execution has improved. And it needs to continue to improve for us to take full advantage of the opportunity out there. And as I said in my closing remarks here, I do think that Q1 was a good step in the right direction. But as you know, our midterm ranges are 7% to 9%. So we have a little ways to go to get there.

to your second question so um what was the impact of this uh supplier agreement in network voice in the us so um what i'd like to say is in you know in combination of uh renegotiated terms with both customers and suppliers and we've started to shift technology from tdm to ip That was really what elevated our gross profit with 6% in network Americas. So we're not singling out that specific supplier, but it has a very meaningful contribution to the gross profit development.

All right. Just one more follow-up, if I may. You mentioned during that you're sort of creating momentum as you move further throughout 2025. Should that be interpreted as you seeing sort of accelerating organic cost profit growth throughout the year or how should we interpret that?

Thanks. Yeah, sure. Thanks, Eric. I would just reiterate our midterm range is seven to 9%. And, you know, I think you should think about it as this was the first step in that direction. There's, there's a bit of time between now and the end of 2027. And we will move there gradually.

Okay. Thank you. Thank you.

The next question comes from Daniel Thorson from ABG Sundahl Collier. Please go ahead.

Yes, hi. Thank you very much. First one on RCS messages. You mentioned 600 million here in Q1, up 50% versus Q4. Is it possible to quantify this in either sales or gross profit million sec or as a share of the business today, but also adding on where could that share be two, three years out?

Hi, Daniel. As you know, we're very bullish on RCS overall over the long term. We think it is really the next generation of SMS. The 600 million volume really compares to the SMS business itself. it's very small right it's only one percent in comparison to the overall sms volume that we send so it has very little impact on the financials at this moment in time what it does do is it secures customers and it enables customers to advance or to get to the next generation, right, and to continue to upgrade how they're engaging with their customers. So we continue to be bullish on it and, you know, we have expectations for this to continue to accelerate.

Okay, that's clear. Another one on email here. You mentioned the two new clients you signed or onboarded this quarter covering 100 billion annual emails together. It seems to add some 15% to the current run rate of email sent in Q1 alone, meaning that without any meaningful churn, obviously, near term. But it means that you could continue to grow double digit for quite some time here in email with quite good visibility, right?

So from an email standpoint, we communicated it's a big growth driver for us, right? We said that during CMD, we continue to believe that. So the 100 billion in email from the two customers that we provisioned in first quarter is a meaningful contribution to the business. But for these larger customers, I would say that the margin, you do take a little bit hit on the margin. So as you know, email, generally speaking, is a relatively high margin business. But to win a customer of that volume, you do sacrifice a little bit of margin. So those are the points of reference I would give you.

Okay, that's very clear. And then just a final one here on financials. What level of total non-recurring costs is your best guess for the full year? I know FX movements are impossible to call, of course, but a ballpark figure on the rest of the items for full year. Thanks.

I think you should expect the combination of integration and restructuring costs about the same level as it is currently.

Okay, on a quarterly basis here, for the rest of the year?

Yes, correct.

Excellent. Thank you very much and welcome, Jonas.

Thank you so much. It's a pleasure.

The next question comes from Ramil Koria from Dansky. Please go ahead.

Hey, guys. Afternoon. Thank you for taking my questions. Maybe almost philosophically, you know, 2% organic GP growth in the quarter. And, Lorinda, to your sort of outline of all the moving parts in the presentation here, it sounds like the second derivative is positive all throughout. And Q1 was also the most difficult comp for the year. You know, clearly prospects for accelerated organic growth starting as a sort of Q1 base level should be good. But what kind of visibility do you have? What kind of feeling do you have for the remainder of the year beyond April, of course?

So of course, as you know, we don't guide in the year, but some of the aspects of what we look at to understand what the future is going to look like is certainly volumes. We look at pipeline, closed one opportunities, and leading indicators around churn or potential churn. And so at this point in time, Ramil, we feel good about pipeline. The sales activities, as you can tell by net sales growth being the third consecutive quarter, it has been picking up. So that's positive. And again, nothing has changed in terms of that trend. But again, I just want to caution that we're targeting 7% to 9% at the end of 2027. So it'll be a slow, gradual climb towards that.

Yeah, fully understood. Thank you, Lorinda. And then maybe on the topic of sort of OPEX investments, because the way I read your CMD message was that 2025 would be somewhat front-end loaded in terms of OPEX investments and then You've been mindful of the sluggish macro environment, which is fully understandable. But what has to change for said OPEX investments to actually materialize? Or is it rather that you've reallocated on the back of macro and we shouldn't expect the investments to materialize ahead?

Yeah, so we have invested even in 2024 in some of the growth areas. As you can see with OPEX being relatively flat year over year on the back of 352 million in gross savings, it did mean that we reinvested that back into the business and it also covered inflationary increases. in the base. But we are being prudent here in terms of the macro. And so we're being very careful in terms of our investments. And so we will continue to allocate towards more of our growth areas. which means we have to manage the base in a more prudent way. So it is more of a reallocation at this point. But again, we just want to make sure that we're being vigilant here.

Makes sense. And then finally, for me, on network connectivity, Americas, I mean, in 2023, this was a 40% cross-margin business prior to the operator price hikes. And throughout 2024, you managed to recover some of that element But gross margins remain in the mid 30s. And I can see sort of the reasoning about mitigating it by raising prices to offset the impact on gross profit and then maybe taking us somewhat of a hit on gross margins. But given the move to new technology as well, should we expect the margin trajectory in that business to deviate from current levels or is this a sort of a new base level?

Well, overall, I would say we manage this business for cash, ultimately. And we've said that we should expect gross margin to be roughly flat. We saw a 2% increase. And the statement, of course, is for overall network connectivity. But the margins, I would say, is relatively smooth. We're smoothing it out. And it's at an acceptable rate for us.

Okay. Thank you very much, Lorinda. And I'll echo my colleagues here saying welcome to Jonas as well. Thank you so much.

Thanks, Ramil.

The next question comes from Deepshika Agarwal from Goldman Sachs. Please go ahead.

Hi. Thanks for taking my question. So one was basically like the restructuring that has been put. So what are the – can you just like elaborate on what are the – initiatives that this basically is going to put into and how do you expect it to reflect in your like if there is any target in terms of any savings that you see from it that basically or if you try you trying to do like you know with this restructuring and then I think you mentioned share buyback so any any any further color on that in terms of any progress or in terms of discussion or any kind of indication how you're thinking about it. And third one is more on the macro. I think overall there is a positive sense of improvement. And I think you alluded to it being more execution, but clearly you called out a robust demand environment as well. So anything that you would have seen over the past one month in the quarter in terms of macro that would be worth highlighting would be very helpful, especially in terms of the volumes, both in terms of the messaging, emails, et cetera.

Sure. Thanks, Deepshika. I'll take a few and then hand over to Jonas for the share buyback. As far as restructuring is concerned, we did the restructuring last year and we did communicate what the savings would be and we overachieved those savings. So there'll be, you know, we'll always see some restructuring costs, but not to the magnitude of what we did last year, which I believe was roughly about 100 million sec in 2024. But Jonas's point about integration and restructuring costs, just look at them together, I think was maybe what you heard. So when you look at those two line items together, it will be roughly at the same pace that we saw in Q1. but no new restructuring programs that we're announcing here today. As far as the macro is concerned, I would say a couple of things. First of all, we are not directly impacted by the tariffs themselves because those of course are related to goods and parts and we're services. So we don't have a direct impact. The second piece is that even if there were tariffs on services, we have very little of our volumes that are actually imported into the US. Most of our business is highly localized. So there's very small impact if that were to happen. The second or the third thing I guess I would say, I'm trying to keep count of myself, The third thing I would say is that we're not seeing customer behavior change yet. And I would say that's not just through March 31st, but even through to today, we haven't seen anything material change. That being said, I think it remains prudent for us to do a couple of things. Number one, manage our costs and make sure we're not leaning aggressively into costs, but rather being prudent and vigilant about costs. The second is with regards to our customers in any sort of, whether it's macro uncertainty or geopolitical climates, we've been through this before over the past several years with lots of events around the world. And the great thing about what Cinch does is we support brands and enterprises across their entire customer journey. And what I know to be true during times of uncertainty is these brands need to hold on to their customers. They need to build loyalty with their customers. And the way that they can do that is through improving the engagement and communication channels with these customers. And again, that's what Cinch does. So we will be there to support them in this time of uncertainty. And again, up until this point, we haven't seen a change of behavior. But Jonas, do you want to talk about the share buyback?

Sure. So the board has asked AJM for a mandate for share buyback up to 10%, which is the statutory limit before you need to issue a prospectus. And it is really on the back of the solid balance sheet and the strong cash conversion. And exactly how much will be repurchased is at the discretion of the board. Obviously, what they will be looking at is the strength of the balance sheet, the cash flows, and quite frankly, if they consider it to be in the best interest of the shareholders. So that's really what I can say about the share buybacks at this moment.

Thanks, and then welcome, Jonas, from my RCA.

Thank you.

The next question comes from Thomas from Nielsen. Please go ahead.

Thank you for taking my question. The 5% year-over-year increase in large enterprise customers is a key growth driver. Could you perhaps share more details on the specific industries or verticals driving this growth, and how do you plan to deepen penetration within these enterprise accounts?

Sure. Thanks for the question, Thomas. So first of all, just to hone in on the definition, these are customers that are spending at least 2 million sec or 2 million krona annually with Cinch. And so the larger customers are in tech. They're also carriers. financial services are probably the three areas that I would call out as being the highest penetration in those top enterprise customers today. The way that we continue to unlock that for them to continue to grow as well as to add more customers into that category is really cross-sell. We have relationships with a lot of customers around the globe, and there's an opportunity to grow within that base, which is a big focus within the sales organization. Our ability to cross sell And I mentioned the two customers that we just provisioned large scale email volumes with. Those customers were actually large SMS customers with us originally. So our ability to cross sell that will be meaningful for those relationships. And so that's the expectation with the go to market transformation that we've been doing over the last year. It was to cross train and to enable the sales organization to be able to sell the full cinch portfolio to both existing customers as well as to new logos.

Okay, thank you very much. Very encouraging to see such a tangible result from your efforts there. Thanks so much.

Thank you, Thomas.

There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Thanks very much, everyone. I already gave you my summary of the quarter. I appreciate the support and the interest. I welcome Jonas as well to the team. We're very pleased to have him on board. And I would just say that this was an important step for us in our progress to re-accelerating growth and committing to the broader value creation agenda for Cinch. So thank you again.