Sinch AB (publ)

Hello everyone and very welcome to CINCH Q1 2026 earnings presentation. My name is Simeon Nordlander and I am Cinevice President Investor Relations and Sustainability. With me here in the studio today I have our CEO Dorinda Pang and our CFO Jonas Dahlberg. And today you will hear them present the quarter. Thereafter, we will have time for questions. And if you have a question, you can dial into us here. And if you use the telephone, please remember to press star 11. Would you like to withdraw the question? Do the same. Press star 11. You can also send your questions directly here into the chat. So once again, very welcome to this presentation. I hand over to you, Lorinda.

Thank you, Mia. Good morning, good afternoon, good evening, wherever you are in the world. We very much appreciate you joining us here today. I think before we start going into Q1, which I'm very excited about, and I can't wait to talk to you about that today, I thought we'd start by just talking about the leadership transition that we announced here this morning. And that is that I have shared with the board my intention to step down as CEO of Cinch by the end of this year, by the end of 2026. This is very much a looking forward decision, and it's with great pride that I reflect, actually, on the past three years. When I joined the business three years ago, Cinch had grown substantially through several acquisitions that had quadrupled the size of the organization. And with that comes a lot of complexity, but tons of opportunity. So when I started as CEO originally, I was asked or I was given a mandate to do a couple of things. First was to stabilize the business. I was also asked to integrate the business and also to make sure that we were protecting profitability and improving profitability and ultimately to return the business back to organic growth. And I'm really pleased to say that this team, this Cinch team around the world, has delivered on a lot of that. We're in a very strong position today. We moved from acquisition silos to where we are now when we show up as one Cinch to our customers. We have delivered the highest profitability of the company's history, and we have reignited organic growth. So all of those are extremely strong signals of what the future has to come. And again, I'm both proud and grateful to the organization. So we have momentum in the business, and I'll talk to you a little bit about that here this morning with regards to our Q1 results, but also what we're seeing in terms of leading indicators. We are operating from a position of strength. Today's world of agentic, the agentic economy and the AI economy, Cinch is extremely well positioned to be a winner in that world. And again, we'll talk a little bit more about that here today. And also, we have structural tailwinds. So, again, with regards to the AI economy, we think that communication volumes are going to explode. And we're extremely well positioned to take advantage of that and to deliver results. So, this is the right moment with the momentum that we have in the business. Leadership transitions can often be hard. And, however, I think they can actually be very healthy and helpful. And it only happens if it's in a planful way, right? We want to make sure that there's continuity in this business, and I will work very closely with the board to make sure that that happens. Until I leave, though, I want to be very clear that I am in position. I will continue to run this organization with the same level of focus and intensity that that I've brought to the table every day for the last three years. So I look forward to doing that. There's a strong leadership team in place. As I mentioned, we have clear momentum. We have a strategy that will win for the future. And we have been delivering better and better every quarter. And so I think that's a great segue for me to talk about what the results were for Q1. So as I think about the highlights from the quarter, you know, it's really oriented around three areas. One is certainly the financial performance of the business. And Jonas will, of course, go through the vast majority of those details. I want to talk a little bit about the value creation and the return to shareholders and also about innovation, which is where I'll spend the majority of my time here with you this morning. We had strong growth and, again, strong momentum coming into this year. So America has delivered very nicely, and they have clear opportunities ahead to continue with the momentum that they've delivered in Q1. At a total company level, we delivered 3% organic revenue growth. And as you know, we do have FX headwinds, so I will always speak in organic terms because that is really the proof point of the underlying health of the business. So revenue growth organically was 3% year over year. Gross profit growth organically was 5% in the first quarter. Adjusted EBITDA growth was 10% in the quarter. And EBITDA growth was 18% year over year in the corner on an organic basis. Now, that EBITDA growth is impressive, and it certainly came through with regards to the actual performance of the business, but also we had less restructuring and integration costs given where we are in our transformation. So all very positive signs from a financial metric standpoint. The second piece is, and I'll touch on shareholders first, which is we've continued the buyback program through the first quarter. And you can read all of the details. But I would highlight the fact that since July, since we launched this program initially, we have repurchased 15% of the outstanding shares for Cinch. And what that means is that our EBITDA per share metric has increased by 15% year over year. But when you normalize for FX, because again, reminder, we have lots of headwinds given the fact that the majority of our business is denominated in U.S. dollar. With those FX headwinds, when you normalize for those, that EBITDA per share metric actually is 27%. So it is incredibly powerful and meaningful and something that we're very proud of. The last piece I want to highlight from the quarter is around innovation. And I'll talk more about this as we move through my material here this morning. But we released two specific innovations and product capabilities to the market. One was around agentic conversations, which allows... organizations, companies, enterprises to bring their own AI agents to Cinch across all of our channels of communications, voice, messaging, email. So we brought that to market earlier this year in the first quarter. And then secondly, we announced voice relay. I'm going to talk a lot more about voice relay in a moment, so I'll leave it at that for now. This is just a reminder of the value creation agenda that we put in place roughly about two years ago. And it's oriented in three different pillars. One is growth reacceleration, right? We wanted to make sure that we have profitable and sustainable growth. The second pillar is around margin expansion. What we said we would do is we would reshape the business and reshape the product mix so that we can continue to expand margins. And then finally, we always talked about capital allocation. We're in a position of strength given the cash generation has been very strong for Cinch and will continue to be strong. We are developing very well against our midterm financial targets that we communicated two years ago. But the strategy that we've put in place, and it's oriented and grounded in our winning strategies, how do we go to the market and win and compete, actually has to translate into something. And so I want to talk to you a little bit about the commercial momentum that we're seeing. This is where strategy is actually coming to fruition. What you can see across this chart is several multimillion dollar deals and wins that we had in the first quarter. This chart demonstrates a mix of new logo wins, existing customers where we have expanded with them, and then also some partnership capabilities where, you know, we think that partnerships are incredibly important in this entire ecosystem. The other thing I would point out on this slide is that these winds demonstrate momentum across the regions and, importantly, across all of our products. But there are several in here that I want to call out. I told you that I'll talk a little bit about voice relay and the strength of our voice capabilities. But I want to call out the fact that you have one of the largest hyperscalers in the world. You have one of the largest carriers, U.S. telecom carriers in the world, and one of the world's largest hospital groups who have done deals with us in the first quarter to take advantage of our voice infrastructure, because quality matters when you're communicating via voice. These large organizations recognize that, and I'm going to talk about that in a minute in terms of why Cinch is extremely well positioned to be able to take advantage of this moment in time that we find ourselves in. Just a quick example is a customer called IHG. IHG is a hotel. It's the International Hotels Group. They represent and own brands like the Intercontinental Hotel, Kimpton Hotel, Holiday Inn. They have 6,800 hotels across 100 countries. So a large organization that's very global. Their membership, their loyalty membership is over 130 million members. So quite a large group of people that they need to communicate with. This is obviously a highly competitive industry, and loyalty in the hotel industry is won or lost in the customer experience. You know this when you go to a hotel. You want that experience to be very powerful, and you want to be able to communicate with whoever your hotel is in a clear and consistent way in the way that you want to communicate with. So IHG is a huge brand. Like I said, it's global. But the reality is they were dealing with a strategic risk, which is that their communications platform was built on a legacy environment, infrastructure that was built for, quite frankly, an era gone by. And so they needed to modernize to be able to deliver the customer engagement and the customer experience that they wanted to help deliver to their customers ultimately. So in walks Cinch and in walks Genesis. You have these three brands, IHG, Cinch, and Genesis, coming together to create a new experience for these loyalty members. So you know who IHG is. I just introduced them. Who is Genesis? Genesis is one of the world's largest contact center solutions that's cloud-based and cloud-native in the world. It's one of the highest ranked contact center solutions also in the world. So they're the third leg of this stool. Genesys comes to this and brings the platform itself. This is a powerful platform. It scales. It's secure. It's agile. It helps IHG start to innovate in terms of how they communicate with their customers. But Genesis admits that their powerful platform is only as good as it is the connections where they can connect to the outside world. And if you give me a moment here, I want to read a quote from a Genesis executive, which said... or who said, Cinch acted as the central nervous system or critical link with robust voice services and all communications channels to bring the solution to life where others had failed in the past. And the reason why I read that quote to you is because this is exactly who Cinch is. We are the trusted infrastructure for communications channels, whether it be voice, messaging, or email. So voice relay, how do we make voice AI actionable? And if you think about where we stand in this transformation, this technology transformation that we're experiencing currently, you know that most AI work is text-based today. You've probably seen some of the reports and lots of the articles that come out to say that, is AI really real? Is it really going to deliver for enterprises? There's a lot of pilots that never make it into production, and they call it AI purgatory. We actually don't see it as that. We actually see quite a lot of pilots moving into production. But what we do see, and we've done this research, is we see three quarters of those production deployments having to be rolled back because they're not effective. And the reason half of those are being rolled back is because the communications infrastructure that they've deployed this AI on is not purpose fit for the real world. Why is that? The world is complicated as it relates to communications. They, you know, no matter where you are in the world, you have regulatory requirements, you have compliance requirements, you have lots of carriers to negotiate and deal with, and all of their technology is complicated. So Cinch has built an infrastructure that is well poised to be able to support any enterprise who wants to deploy AI in their ecosystem. So today, AI is mostly text-based. However, voice continues to be an extremely critical, vital channel for enterprises to be able to communicate to their customers. But voice is complex, and quality matters, latency matters. Now, I want to explain to you exactly what voice relay is, but rather, I think we should just show you a demo so that you can see it in action.

Sophia has a problem with her Fresh Dash account. When Sophia calls customer support, she's not thinking about AI. She just wants help, quickly, without repeating herself. Behind the scenes, Alex is responsible for making sure customer issues are resolved quickly. Bad support experiences are memorable.