LINK Mobility (LINK) reported gross profit and adjusted EBITDA at NOK 357 million and NOK 166 million respectively, with organic growth in fixed currency at 9% and 10%. LINK continues to execute on the inorganic growth strategy by closing the acquisition of Net Real Solutions in Spain and Reach Interactive in the UK. Commercially third quarter was strong with a 16% growth in total closed contract gross profit value and 51% for advanced CPaaS solutions contracts. LINK delivered strong cash flow from operations of more than NOK 200 million in the quarter and the solid financial position underlines the foundation for further organic and inorganic growth.
Revenue growth in the quarter was impacted by LINK terminating low margin traffic in the Global Messaging segment. Enterprise revenue growth was 8% in stable currency. The termination of low margin traffic and refocus to improved profitability resulted in a 34% gross profit growth in Global Messaging and contributed also to the total gross profit growth of 9%.
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Gross profit growth for the first nine months of the year was 11% while the scalable business model have resulted in adjusted EBITDA growth of 15% in the same period and in the high end of expectations.
LINK’s recurring and growing business is driven by more than 50,000 loyal customers continuing to increase their usage. The industry continues to observe increased adoption rates for digital messaging and traction on higher margin CPaaS software solutions and OTT channels like RCS and What’s App. The recent support confirmed in selected markets for RCS Business Messaging on Apple handsets is expected to drive further demand for advanced messaging solutions across the LINK footprint.
The strong financial position enables LINK to continue its proven track record of inorganic growth with more than 35 acquisitions completed in Europe during the last decade. In the third quarter, LINK acquired the company Net Real Solutions (NRS) in Spain, strengthening the market position in Spain as well as gaining access to the Latam markets through its presence in Colombia and Mexico. Late October, LINK closed the acquisition of Reach Data in the UK, further scaling the UK business. The acquisitions are in line with LINKs disciplined M&A strategy and was closed at EV/Cash EBITDA multiples in the historical range of between 6-7x. The prioritized pipeline has been replenished with additional targets and consists of 12 targets, whereof 4 are in due diligence stage and total pipeline value of approx. EUR 40 million cash EBITDA.
“We are pleased to report another strong quarter with organic growth in line with expectations with gross profit growth outpacing revenue growth. The market continues to adopt and request new and innovative solutions for customer engagement which will support future growth for LINK. Our M&A pipeline is maturing, demonstrated by the three announced acquisitions so far in 2024. With the solid financial position, LINK is well positioned for future growth”, says Thomas Berge, CEO of LINK.
The quarterly results will be presented in an audio webcast at 10:00 CET today by Thomas Berge, CEO and Morten Edvardsen, CFO & VP Investor Relations.
The audio webcast targets investors, analysts and media. Attendees will be able to post questions in a Q&A session following the webcast.
To join the audio webcast and post questions, please go to: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20241105_4
The webcast is also available from LINK’s investor relations pages
https://linkmobility.com/investor-relations/
For further information, please contact
Morten Løken Edvardsen, CFO & VP Investor Relations
+47 90 56 15 89
ir@linkmobility.com
About LINK Mobility
LINK is an award-winning, leading global provider of mobile messaging and communications platform as a service (CPaaS) solutions for increased engagement. The company serves enterprise, SME and government customers. LINK offers a wide range of innovative and scalable mobile solutions, creating valuable digital convergence between businesses and customers, governments and citizens, platforms and users. LINK has more than 50,000 active customer accounts globally and exchanges more than 19 billion messages a year. LINK is listed on the Oslo Stock Exchange under the ticker LINK. For more information about LINK, please see www.linkmobility.com and follow LINK Mobility on LinkedIn.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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