This article first appeared on GuruFocus .
Release Date: May 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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LINK Mobility Group Holding ASA ( FRA:L1N ) reported a 21% year-over-year increase in revenue, driven by recent acquisitions.
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The company saw strong growth within higher-margin CPaaS solutions, with RCS and WhatsApp volumes increasing by over 100% year-over-year.
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Net retention rate improved from 92% in Q4 to 96% in Q1, indicating better customer retention.
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LINK Mobility Group Holding ASA ( FRA:L1N ) completed a bolt-on acquisition of WebSMS in Romania, enhancing its market presence.
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The company maintains a strong financial position with an equity ratio of 53% and significant cash reserves.
Negative Points
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Organic gross profit growth was negative at -1% in Q1, impacted by isolated customer declines.
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Global Messaging segment saw a 19% decline in gross profit year-over-year due to reduced wallet share from larger customers.
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Organic adjusted EBITDA declined by 6% year-over-year, reflecting weaker gross profit development.
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The company faces challenges with isolated customer declines negatively impacting net retention rate by approximately 7 percentage points.
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There is volatility in the Global Messaging segment, which could impact future profitability.
Q & A Highlights
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Q: Isolated decliners will have easier year-on-year comps going forward. Any signs of improvements from these customers into next quarter or that volumes for these customers will eventually return in 2026? A: These customers have stabilized the gross profit contribution in Q4 and also in Q1. Expectations going forward are that these customers are more volatile. The base case with management is that we don't expect or foresee any increase nor a decrease. A stable level is what we view as most likely, but changes can happen quickly.
Q: Can you comment on gross profit margin expectations, particularly for global messaging going forward? A: The level we're seeing now is most likely the level going forward. There's more volatility in terms of the drive mix and destination mix, which impacts the margins.
Q: Are you seeing any change in pricing from operators or competitors? A: No significant changes. There have been small price increases in Norway from mobile operators and very small increases in the UK. Price competition is stable and has been for years in the enterprise market.
Q: On CPaaS, is Apple's opening up RCS in the Nordics now expected in H2? A: The last signal from mobile operators in the Nordics is that they're opening up RCS either in Q3 or Q4. They previously communicated Q2, but there is a delay.
Q: How confident are you in a return to organic gross profit growth given the nine isolated decliners? A: Based on the information we have, the increased backlog of new contracts, movement on RCS and WhatsApp, and easier comparables, we view it as more likely that we'll see mid to high single-digit gross profit growth in H2.
Q: Have you seen any structural shifts in the European CPaaS market, such as reduced volumes from substitutes like in-app notifications or increased competition from other global players? A: No, we don't see substitutes from in-app notifications in general. We are seeing a transition from SMS to RCS and WhatsApp, which is a growing trend. The competition picture is stable.
Q: Aside from less negative impact from the nine isolated decliners, what gives you confidence to guide for a return to growth in H2? A: We see an increase in new contract wins, a 17% increase on an LTM basis. This will generate increased growth momentum as it is implemented and scaled. We also see increased demand for WhatsApp and RCS, and easier comparables, especially in Q3 and Q4.
Q: Are RCS and WhatsApp primarily replacing SMS use cases or opening new use cases? A: Conversational use cases are mostly new. There's a little bit of replacement, but new use cases are significantly higher than replacements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
