• Revenue: NOK7 billion for the last 12 months.
• Revenue Growth: 19% CAGR over the last years.
• Adjusted EBITDA: NOK718 million for 2024, a growth of NOK105 million or 17%.
• Gross Profit: NOK436 million in Q4, organic growth of 8% in fixed currency.
• Adjusted EBITDA (Q4): NOK213 million, organic growth of 12% in fixed currency.
• Net Operating Cash Flow: NOK166 million in Q4.
• Enterprise Revenue Growth: NOK50 million increase.
• Global Messaging Revenue Decline: NOK78 million decrease due to termination of low-margin traffic.
• Cash Reserves: NOK2.5 billion.
• Net Interest-Bearing Debt: NOK994 million.
• Leverage: 1.3 times LTM performer adjusted EBITDA at the end of 2024.
• Free Cash Flow: Approximately NOK400 million on a yearly basis.

• Warning! GuruFocus has detected 4 Warning Signs with FRA:L1N.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LINK Mobility Group Holding ASA (FRA:L1N) reported a 10% gross profit growth and 13% adjusted EBITDA growth for the fourth quarter of 2024.
• The company has a strong market position as the leading CPaaS player in Europe, with over 50,000 clients serviced by 30 offices in 18 countries.
• LINK's strategy of local touchpoints with clients has resulted in a larger reach compared to competitors with a more centralized approach.
• The company has a scalable business model, which has contributed to higher adjusted EBITDA growth compared to gross profit growth.
• LINK has significant cash reserves of NOK 2.5 billion, providing flexibility for acquisitions and bond repayments.

Negative Points

• Revenue growth was impacted by the termination of low-value traffic in the global messaging segment, leading to a slight organic revenue decline.
• The company experienced a phishing incident resulting in a loss of NOK 18 million, with an insurance claim still pending.
• There is a risk of slower growth materialization from CPaaS contracts due to partial support for RCS across Europe.
• LINK's revenue churn was impacted by the termination of low-margin destinations and a bankrupt retail client, affecting the enterprise segment.
• The company is prohibited from paying dividends due to bond agreements, with potential changes expected after refinancing in 2025.

Q & A Highlights

Q: Was there a specific reason for the lower gross profit from new contract wins year on year, or was it just normal fluctuations in contract sizes? A: There were no specific reasons for the slight decrease. It was more about normal fluctuations in contract sizes. - Thomas Berge, CEO

Q: Do you see potential for larger acquisitions in Europe, or would you need to go outside Europe for larger M&A? A: We see opportunities for larger acquisitions in Europe, but they could also involve companies outside Europe with a significant footprint in Europe. - Thomas Berge, CEO

Q: Regarding the phishing incident in Q4, is NOK180 million the maximum loss, or could there be more? A: NOK180 million is the maximum exposure recognized, and there is no further exposure from that incident. - Morten Edvardsen, CFO

Q: Given the higher share of CPaaS in new contracts, does this imply a higher risk of growth materializing, given that RCS only has partial support across Europe? A: We have been cautious in estimating gross profit from CPaaS contracts, often only including license fees unless we have specific guidance from customers. The risk profile isn't necessarily higher, but it may take longer to scale these contracts. - Thomas Berge, CEO

Q: Have you seen any changes in the competition for M&A targets? A: No, we haven't observed any changes in the competition for M&A targets. It remains consistent with our industry interests. - Thomas Berge, CEO

Q: How will AI influence your business? A: We have already integrated AI into our products, such as chatbots, and are working on AI for content generation in complex campaigns. AI is an area we are actively developing. - Thomas Berge, CEO

Q: When will you be able to pay dividends? A: The bond agreement from 2020 prohibits dividend payments. Once refinanced, expected later in 2025, we will provide more clarity on our dividend intentions. - Thomas Berge, CEO

Q: Could you comment on the operating momentum so far in the first quarter? A: We expect to maintain high single-digit gross profit growth and higher EBITDA growth than gross profit growth, in line with our 2025 guidance. - Thomas Berge, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.