Sinch AB (publ)

Hello everyone and very welcome to Sinch Q2 2026 earnings presentation. My name is Mia Nordander and I'm Senior Vice President Investor Relations and Sustainability and with me here in the studio today I have our Acting CEO and CFO Jonas Dahlberg and our Senior Vice President Corporate Control Sofia Olander. You will hear Jonas and Sofia present the quarter, and thereafter, we will have time for questions. If you have questions, you can either dial in, but if you have questions through telephone, remember to dial star 11. You can also send questions to me here in the chat. So once again, very welcome, and I hand over to you, Jonas.

Thank you, Mia. So let's look at the first quarter highlights. So, on the highest level, I would characterize the quarter as stable, largely in line with expectations we had when we exited the first quarter, and most importantly, with strengths where it matters the most. We accelerated organic revenue growth to 6%, driven by Americas and the API product category, and we experienced stable organic revenue development in APAC and EMEA. We delivered solid profitability and strong cash flow. Organic gross profit was a little bit on the soft side due to unexpected developments primarily in APAC. Nevertheless, adjusted EBITDA margin is within our target range and cash conversion is significantly ahead of guidance. We continue to experience strong commercial momentum led by Americas with an increased share of cross-sales proving the value of our joint go-to-market model. And our market leadership is reaffirmed by industry analysts and key customers such as Gartner, IDC and Adobe. And with those highlights, let us look at performance by Radeon. So, what developed as expected, and if anything, actually better than expected, is our largest region, the Americas, now represented two-thirds of group gross profit. The Americas grew 9% organically during the quarter, and this revenue predominantly comes from the API product category that delivered mid-teens organic revenue growth, driven by messaging and email. And this is a sign of strength in several ways. Americas is the largest region growing close to double digit. It's proving the strength of the market and it proves our position in this important market. And the growth comes exactly from the right product category. That is the API product category combined This bodes well for the future. Strength in the US and in APIs is key to win in the emerging API customer communications market. Now, in parallel, Americas grew gross profit by 10% thanks to a combination of the growth we just talked about in the API product category, but also reduced transmission cost for network voice. In all, Americas developed in alignment expectations or actually slightly better. EMEA also shows encouraging signs. After three consecutive quarters of revenue decline, revenue has stabilized in EMEA. Fixed price messaging supplier contracts are stable, both on sequential basis and compared to the same period last year. And we also expect these contracts to be stable going forward. However, while the stabilized revenue development is encouraging, we have a slight organic GP decline in EMEA, and this is driven by basically discontinuing a specific product and churn from that. And this is the same product that dropped out of Americas during the second quarter last year, which means this product now is essentially discontinued. In APAC, which is the smallest of our regions, we continue to face headwinds. Some of these headwinds are temporary, but some are also expected to persist going forward. India is solely responsible for the organic revenue decline in APAC and is impacted by challenges, including a 17 million additional revenue provision related to the same customer dispute as we disclosed in Q1. In Australia, we also had some margin compression in applications. But there are also signs of strength here. We saw strong growth in email and messaging APIs outside of India. While we can't be certain that we have completely bottomed out in APAC, we believe that the worst is behind us. India represent low single-digit percent of growth profit. So whatever happens can't have much of an impact going forward. And we should recognize that APAC in total is still our most profitable region. So that's a sign of strength. Moving over to commercial momentum. In the quarter, we continue to experience really strong commercial momentum. My intention is not to go through every individual deal. Rather, I'd like to relay a few overall highlights. First, we are closing deals across all motions, new customers, existing customers, and through partners. We have closed many sizable deals with six-figure euro or US dollar amounts and one seven-figure US dollar expansion. The deals are predominantly American, but it comes from all geographies, and the deals span industries including tech, retail, financial services, media, travel, and more. So this means we continue to develop a diversified customer base across geographies, sales motions and industries. And I think this provides a strong jump off point to the future. Now, I'm early in my CEO tenure, but I've witnessed a lot of strength across the business over the last year as a CFO. And I'd like to share some thoughts on the growth engines I see for the future. So broadly, I see three levers of growth going forward delivering on different time horizons. Firstly, it's about doubling down on our current success. And this is the US. It's the fastest growing market. It's also a market where we are growing the fastest. And as mentioned earlier, this is also where the world's AI companies are coming from. And this is the next wave of growth that we see happening. And our San Francisco office is just a couple of blocks away from all these giants. So we think that Americas is and will continue to be a key growth engine. Now, secondly, in the product dimension, here and now, it's about continuing to grow our email business. We have talked a lot about RCS in the past. RCS is growing very fast, but from a low base. But email is truly a meaningful part of our business, and we'll talk a little bit more about that. Next wave is about increasing our net revenue retention. And the way to do this is target fast-growing customers, increase up- and cross-sale, and strengthen loyalty to reduce churn. We'll talk more about that in a bit as well. And finally, it's obviously about developing our product portfolio of innovative products and solutions for the future. Now, I will talk more about all these levers as we continue this presentation, but I want to start with email. So most people know Singe as a messaging company, and that's great. But what most people don't realize is that we are actually quite diversified across email, messaging, applications and voice products. And email is very much a contributor to our success. Actually, from a bottom-line perspective, email is roughly the same size as messaging with the same EBITDA contribution. So an email is also truly a growth engine for Cinch. We have, over the last few years, grew at a double-digit clip consistently in email, and at high profitability, this has a meaningful contribution to value creation, both here and in the future. So what is Singed Email? What's special about email? So Singed Email is a developer-first platform that enables businesses to send, receive and optimize email customer communication at scale. Whether it's marketing campaign, transactional updates, identity verification or customer service, the platform helps businesses to communicate with their customers on a daily basis. Our customers ranges from startup to some of the world's largest and global brand, many who depend on Singe email for mission-critical communications. And what sets us apart is the strength of our platform behind it. We have 99.99% uptime, meaning just a few minutes of downtime every year. And we do this with 97% delivery rates in email. And I think as all of us can relate, our email inboxes is a very cluttered environment. We have spam filters to protect us from unwanted email. But sometimes these email spam filters, they are on the conservative side. And this is where our delivery rate comes in. 97% is very strong. And the platform is certified for industry standards for security and data privacy, making it a viable solution for mission-critical enterprise solutions, including healthcare. But maybe this becomes best understandable when we start to look at the numbers, putting delivery behind it. On average, we deliver 1.6 million emails per minute, and that sums up to 850 billion emails a year. And the volume is growing with 20% a year, so we're soon looking at passing 1 trillion emails per year. Takeaway is this, email is not just another product in Siemens portfolio and it's definitely not a commodity. It's one of our largest businesses. It's a rock solid platform delivering customer communications at massive scale and it's a key driver of value creation both today and tomorrow. Moving over to net revenue retention, and one theme there is to increase our cross-sales. As you know, Syng started to integrate our independent business units about three years back with a joint go-to-market model. We spent considerable efforts integrating, allowing for cross-sales across channels. This has not been easy, but we're now starting to see the benefits of our hard work. In fact, if you look at the second quarter, 50% of the top 10 new deals in the quarter were cross-sales of products to existing customers. This means an existing customer of one product line, same messaging that actually buys into a new product line such as email and voice. So cross-sales is getting traction and with the broadest and most global offering in our industry. This is not only a growth engine for new deals, but it's also galvanizing the relationship with existing customer, increasing loyalty, reducing churn, and together we think this is an important growth driver for Zinge going forward. Now, another part of increased net revenue retention is to target fast-growing customers. In our industry, 95% of the revenue typically comes from existing customers that we had one year back. So a safe bet to growth is making sure to go with the winners. And the winners right now are the AI natives. That is companies that didn't exist a few years back, who based their entire business model on AI and who grows extremely fast. Now, similar to existing customers of Cinch, they need customer communications. But they are growing at a much higher rate, meaning they need massive scale and reliability from day one. And this is exactly what Cinch provides. We're offering the same products as we do to our traditional tech customers, and we're winning with proven commercial models that we've successfully used in tech. Essentially, we're talking about three different motions. Firstly, the direct customer relationship where one of our customers are using our products for their own benefit. Secondly, reseller motions. This could be a native integration where customers effectively resell our products as an integrated part of their own offering. Or thirdly, a partner motion over a marketplace where partners and customers can sign up for our products. Across these motions, we have many years of experience from tech, and during the last six months, we've won several hyper-growing AI companies. And we will expand this relationship and also focus on winning new customers in this segment. Lastly, We're innovating our product offering to deliver new and exciting products for all customers, products that will deliver growth in the future. And as we did last quarter, I want to showcase our innovation. This time we'll look at the conversational commerce use case. And this solution uses several of our products to drive a better end customer experience, improved sales conversion and ultimately growth for retail. The innovation here comes from solving existing pain points in new ways. And what you'll see here is an e-commerce experience entirely over the messaging channel, highly personalized to the individual customer, with no handover between channels, with minimal friction to purchase, all working together to maximize sales conversion for the retailer. And the example you will see uses several of our API products. And the benefits here are clear. No passwords, no forms to fill in, no handovers between channels, jumping between messaging and the web, no hurdles. It's truly a frictionless experience. This is live with customers. It builds on products we already have today, but pulling them together provides a new type of experience, and we think this type of solution will provide very meaningful growth going forward. So we're going to take a look at it before handing over to Sofia, who will walk us through the financials. Please.

For years, enterprises built their customer communication stacks in silos. Messaging channels drove notifications and engagement, verification and identity tools handled authentication, trust and fraud prevention. But AI and conversational channels are flipping the script. Meet Julie. She gets a personalized WhatsApp message from her favorite brand, noise-canceling headphones, the ones she was browsing last week. She swipes the carousel, finds the model she wants, and taps Buy Now, all powered in the backend by Cinch Conversation API. She's redirected to the checkout page. Her details are already filled in. Behind the scenes, Cinch Number Verify runs silently. It already confirmed it was her. silently through her SIM before the page even loaded. No login screen, no OTP, no redirect. She reviews the order and taps pay now. No password, zero friction. In the same moment, Cinch has already checked the transaction for fraud signals. Risk score, low. Purchase approved. Seconds later, the order confirmation lands back in WhatsApp. That same conversation that started the purchase closes the loop.