Sinch (SINCH) Q1 2026 earnings summary

Executive summary

• CEO announced intention to step down by end of 2026, after leading successful stabilization, integration, and return to organic growth over the past three years.

• Achieved highest profitability in company history, with strong Q1 2026 growth driven by Americas and Voice products.

• Advanced AI-powered communication offerings, launching Agentic Conversations and Voice Relay to enhance customer relevance and open new revenue streams.

• Disciplined capital allocation, with significant share buybacks reducing outstanding shares by up to 16% in recent quarters.

• Major customer wins and strategic partnerships across tech, telecom, healthcare, retail, and AI-native applications.

Financial highlights

• Organic revenue grew 3% and organic gross profit grew 5% year-over-year, with adjusted EBITDA up 10% and unadjusted EBITDA up 18% organically.

• Net sales for Q1 2026: SEK 6,493m; gross profit: SEK 2,214m; adjusted EBITDA: SEK 822m; net profit: SEK 104m.

• Gross margin stable at 34.1% year-over-year, with a slight sequential drop due to FX headwinds.

• Free cash flow of SEK 375m in Q1, with cash conversion LTM at 54% and R12M FCF at SEK 1,927m.

• Share buyback program reduced outstanding shares by up to 16% since July, boosting EBITDA per share by 15% (27% FX-adjusted).

Outlook and guidance

• Expect stronger organic gross profit growth in H2, driven by new contracts and continued IP technology rollout.

• Mid-term targets by end of 2027: 7-9% organic growth in net sales and gross profit, 12-14% adjusted EBITDA margin.

• Net debt to adjusted EBITDA targeted below 2.5x; currently at 2.0x.

• R12 cash conversion guidance of 40-54% and positive full-year outlook despite macroeconomic uncertainty.

• EMEA expected to return to modest growth as fixed price contract headwinds subside and new leadership drives momentum.