Sinch (SINCH) Q1 2026 earnings summary

Executive summary

• CEO Laurinda Pang to step down by end of 2026 after stabilizing and returning the business to organic growth, with succession plan in place.

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

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

• Disciplined capital allocation, with 15% of shares repurchased since July 2025, and significant share buybacks and cancellation of 8.8% of issued shares.

• Major new contracts secured across tech, healthcare, financial services, and retail sectors.

Financial highlights

• Organic revenue grew 3% and organic gross profit grew 5% year-over-year in Q1 2026, despite an 11% FX headwind on net sales.

• Adjusted EBITDA grew 10% organically to SEK 822m, with margin stable at 12.7%; reported EBITDA up 18% organically.

• EBITDA per share increased 15% year-over-year, or 27% when normalized for FX.

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

• Net profit: SEK 104m, up from a loss of SEK -47m YoY.

Outlook and guidance

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

• Expect stronger growth in the second half of the year, driven by Americas momentum and new contract ramp-ups.

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

• R12 cash conversion guidance of 40-50%.

• Management remains positive for full-year development despite macroeconomic uncertainty.