Interlink Electronics, Inc. Stock Price: Quote, Forecast, Splits & News (LINK)

LINK

Interlink Electronics, Inc.

LINK

Overview

Financials

Historical Data

$4.49

-$1.06

19.1%

At close: Jun 20, 4:00:01 PM EDT

$4.77

+$0.28

6.24%

After hours: 7:00:00 PM EDT

Change

-$1.06

19.1%

Financial Profile

Prev Close

$5.55

Market Cap

$44.29M

Day Range

$4.49 - $6.61

Open

$5.57

P/E Ratio

-18.7

52W Range

$3.25 - $10.90

24H Volume

$594.58K

Dividend Yield

0.00%

EPS

-0.24

Key Issues

Latest Price Movement

Jun 22

Recent Transcripts

Strong gross profit and EBITDA growth driven by advanced products and UK acquisitions.

Linq delivered strong 2024 results with 10% gross profit growth and 13% adjusted EBITDA growth.

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $44M
IPO Date: 1/2/02
CEO: Mr. Steven Nathan Bronson
Fulltime Employees: 102
Sector: Technology
Industry: Hardware, Equipment & Parts
Country: US
Exchange: NASDAQ Capital Market

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Interlink Electronics, Inc. Stock Price: Quote, Forecast, Splits & News (LINK)

Perplexity Finance

LINK

Interlink Electronics, Inc.

LINK

Overview

Financials

Historical Data

$4.49

-$1.06

19.1%

At close: Jun 20, 4:00:01 PM EDT

$4.77

+$0.28

6.24%

After hours: 7:00:00 PM EDT

Change

-$1.06

19.1%

Financial Profile

Prev Close

$5.55

Market Cap

$44.29M

Day Range

$4.49 - $6.61

Open

$5.57

P/E Ratio

-18.7

52W Range

$3.25 - $10.90

24H Volume

$594.58K

Dividend Yield

0.00%

EPS

-0.24

Key Issues

Latest Price Movement

Jun 22

Earnings

Report Date

—

Rev Estimate

—

Avg 1d Change

—

Report Period

Q1 2025

EPS Estimate

—

Implied Move 1d

—

Transcript

8m 25s

Supporting existing clients in the local language and culture. This setup is creating a larger reach than many of our competitors who have a more or centralized approach to the market. Link's more than 50,000 clients service by our more than 30 offices in 18 countries are a result of the successful implementation of this strategy over many years. Gross profit, the last twelve months was recorded at almost 1,600,000,000.0. Link has grown significantly over the last year with a gross profit CAGR of 12%. Profitability has always been a key priority, Link is growing the business while generating additional profitability and cash. Over the last four years, adjusted EBITDA has a CAGR of 14% higher than gross profit growth due to Link's scalable business model. [indiscernible] For Q1 twenty twenty five, the last twelve months adjusted EBITDA is reported at SEK $757,000,000 or a growth of almost $40,000,000 in one quarter. Link as a central position in the industry value chain, supporting clients with connectivity and SaaS solutions to enable clients to communicate with their end users. Enterprises have a constant need to communicate and inform their end users. Enterprises are increasingly choosing the mobile phone as the communication channel towards the end users.

9m 51s

This megatrend is being driven by the end users themselves. We prefer that enterprises communicate with us. Over the mobile phone and then the prices adapt. Link has the connectivity to the mobile operators and relevant channels, which are combined with our software solutions to provide our enterprise clients with an end to end communication solution towards their end users. Those software solutions include chatbots combined with AI, marketing automation, CDP, payment solution, template builders, and template managers. Link software solutions combined with connectivity, enables the state of the art multichannel and conversational communication platform. Ensuring satisfied end users and high return on investments for our clients. We're happy to report an excellent first quarter. Both gross profit growth and adjusted EBITDA growth are strong and the continuation of the solid performance the company has reported over the last two years. Organic gross profit, growth, came in at 9%, versus same period last year. Adjusted EBITDA growth is supported organically at a very 18%. In the current quarter, profit growth is significantly higher than revenue growth the same trend as we have reported in the two previous quarters. Enterprise revenue growth is lower than gross profit growth due to more demand for advanced products with higher margins and more activity on higher value clients.

11m 23s

The profitability contribution on the more advanced products has contracted the softer development on low margin traffic on gross profit [indiscernible] But not to the same extent on revenue. Thereby resulting in higher gross profit growth than revenue growth. For global messaging segment, the discrepancy between the revenue and gross profit development is clear. Revenue declined with a 118,000,000 while gross profit grew with 7,000,000. Revenue decline in global messaging is a result of Link terminating traffic to lower margin destinations, focusing on more profitable arrangements. The aggregator business in global messaging is more volatile and less sticky compared to the enterprise regions. Volumes fluctuate based on decisions on the Link side as well as clients' needs and adaptions. Link has terminated several low margin destination reduced revenue growth, but still increasing gross profit growth and gross margin in the segment. Profit is reported at $4.00 9,000,000 or an organic growth of 9% in fixed currency. Which is in line with expectations of high single digit growth. Adjusted EBITDA is reported at 198,000,000 or an organic growth of 18% in fixed currency. Linkara recognized an extraordinary bad debt provision in the Global Messaging segment same period last year. Underlying growth in adjusted EBITDA is 12% and higher than gross profit growth due to Link's scalable business model.

12m 57s

Reported EBITDA [indiscernible] NOK11 million in M and A cost. Link signed new contract in the quarter with an estimated gross profit of $42,000,000 above the quarterly target of 40,000,000 A higher share of the new agreements is for more advanced solutions with higher profitability. New contract utilizing advanced conversational products on RCS constitutes 17% of all new contracts closed in the quarter. Link also closed two new M and A transactions, both in The UK market. The U. K. Market is an attractive market and the two new acquisitions have solidified Link's presence and expanded the customer portfolio to new verticals like the public sector. The additional size in The UK elevates Link to a clear tier two player in a very large market which further fuels our growth opportunities in The UK. Have a strong M and A pipeline with five targets in due diligence, of which three have been added in the quarter. Gross profit is reported at NOK $4.00 9,000,000 or a growth of 9% in fixed currency. Solid contribution from the more advanced ePaaS solutions with high margins together with stronger growth momentum on high margin client traffic was the main driver of growth. Increased market demand for more advanced conversational products is clearly materializing in the in the P and L. With a solid gross profit growth.

14m 36s

This effect is also evident in the organic margins with a 3.3 percentage points increase in gross profit margins. The graph at the bottom of the slide displays the margin impact from the segments. Both the Enterprise segment and Global Messaging are reporting a positive contribution to group margin expansion. With one point six and one point eight percentage points, respectively. Link has significant improvement in new business wins over the last two years. Based on renewed focus and changes in commercial execution. The graph on the left shows the estimated annualized gross profit on new contracts. The numbers are extracted from our CRM systems and the estimation are based on contractual arrangements and specific dialogue with clients. Internally Link, we have a target of a achieving 40,000,000 plus in gross profit from new contracts per quarter. Except q three, which will be lower due to summer break. Current quarter resulted in $42,000,000 in expected gross profit from new contracts, isolating the new contracts for advanced conversational products named CPaaS in the graph, the current quarter is at $15,000,000 on estimated gross profit. We observed more traction in market demand on advanced mobile marketing solutions combined with bots and WhatsApp RCS.

16m

We also see more demand for marketing automation and CDP in The Nordics. The OTT channels are in high demand, RCS and WhatsApp combined with chatbots and other software solutions are growing rapidly. The main use cases are mobile marketing and customer support use cases. Link is further announcing its SaaS solutions with AI, content creation to help our clients to automate more of their campaign activity. Historically, about 75% of the gross profit is recorded in the P and L after twelve months. We expect the higher contract backlog to benefit gross profit growth gradually. The more advanced CPaaS contracts take longer time to scale, volumes versus legacy product, but of course, result in immediate and higher license revenue. Link has a healthy sales pipeline in addition to the new agreements won. Link is operating in a growing market with two growth engines. Continued growth on existing products and accelerated growth on the more advanced conversational solutions. For existing products utilizing SMS and email as a channel, most markets experience market growth as more and more businesses are using digital communication solutions to alert, notify, and promote their end users. On top, of businesses utilizing digital communications for the first time, there is also a growth momentum on businesses using digital communications on new use cases.

17m 33s

The Nordics are the highest penetrated messaging market in the world. With 436 messages per citizens with the rest of Europe lagging behind with 186 messages per citizen. We expect the less penetrated markets to continue increasing the penetration rates as more use cases are introduced, gradually closing the gap, to The Nordics. The more advanced solution enabling two way dialogue on the new OTT channels like RCS and WhatsApp are creating new use cases for the industry. Suddenly, enterprises want to engage, with their end users. It's instead of just pushing out the message. This market is in the early stages of adoption, but growing aggressively from low volumes. This growth is expected in our industry to accelerate, partly taking over the growth momentum on existing products partly creating growth on top. Profitability is much higher for these more advanced solutions, both on a per message basis, but also higher license fees. The continued growth on the more advanced products is expected to raise margins levels going forward, but we expect an evolution over not a revolution. This slide, we provide a specific example of our use case growing rapidly. On one of the OTT channels, WhatsApp. The logistic industry is rapidly demanding conversational products, to engage end users in dialogue regarding tracking shipment delivery time, payment, and collecting NPS score, to both save money on no shows and to create a better end user experience.

19m 18s

Link is implementing a lot of new contracts on this use case. Increasing the volume to almost 50,000,000 messages this quarter, 2,500,000 same period last year. RCS, it's a feature channel that we significant growth from going forward. RCS can be viewed as SMS version two, as the channel is embedded in the SMS app. But with all the functionality and features that were used on, for example, WhatsApp or iMessage. RCS has been on the market for several years, until now, only been available on or or compatible on selected Android, handsets. Apple has not opened up for RCS until now. This has held back the adoption significantly. Apple launched RCS on iOS 18 dot one, and are gradually rolling out this feature through mobile operators in Europe. Spain, France, UK, Belgium, and Germany offer RCS, on both iOS and Android. The rest of the market are waiting for RCS to be rolled out. Customer demand is driven by the additional value this channel is creating through a better end user experience and interaction. We see a higher response rate, higher engagement rate, and a significantly better conversion on RCS than SMS. The RCS volumes, are increasing rapidly from 82,000,000 messages last year to a 19,000,000 year on an LTM basis.

20m 48s

Looking at the new contract, we expect NOK 17,000,000 on gross profit from new contracts, which is a growth of 49%. We expect material commercial traction on RCS when we can reach all end users with the increased security, features and ease of engaging into a conversational dialogue. RCS is rapidly growing as we speak, but we expect this growth to accelerate when the channel is available for most end users. Link has closed three acquisitions in The UK market in last seven months. The UK market is large, with good growth potential. Link has got the size after the three acquisitions become a relevant vendor in most verticals. Have 8% market share in The UK, become becoming one of the biggest tier two vendors and a much more relevant player towards the mobile operator benefiting from higher discounts due to the additional volumes. Link's customer stock in The UK also increased significantly with more than 3,600 clients representing all verticals and a great potential for upselling activities. The customers from the acquired entities will also benefit from Link's additional product portfolio, and we are upselling more advanced conversational products on RCS and WhatsApp as we speak. Link is interested in further acquisitions in The UK market.

22m 15s

In addition to organic growth of opportunities, the company is well positioned for inorganic growth through M and A. Link has the competence, the historical track record for value creation through M and A and a solid pipeline with M and A targets. Since 2015, Link has closed over 30 acquisitions, of which the majority have been a great success generating significant value. In 02/2024, Link closed three acquisitions ezfue in Portugal, NRS in Spain, and Reach Interactive in The UK. In 2025, Link has closed two more acquisitions so far, both in The UK. The acquisition had a multiple of between six to seven times cash EBITDA and was highly accretive to Link's own valuation. We have 10 prioritized targets, most of them located in Europe, These prioritized targets have an EBITDA potential of up to 30 to €40,000,000. Of these targets, Link has five companies under due diligence, and we have added in 2025 three more targets to the due diligence process. Bolt ons in Europe have priority, but we're also looking outside Europe. Private companies in our space have a target evaluation of between six to nine times cash EBITDA before synergies. The quality of the customer base, growth momentum of the target and synergy potential are the main criteria placing the valuation in the mentioned range of six to nine times cash EBITDA.

23m 47s

The company is pointing to Link's stable historical performance to provide further guidance on reasonable expectations going forward. We expect Link's European business to continue to display a high single digit gross profit growth rate. Additionally, we expect adjusted EBITDA growth rate to be higher than the gross profit due to our scalable business model. Inorganically, Link has a growth target of 10% on adjusted EBITDA through bolt on acquisitions. Link has $2,500,000,000 in cash The cash position will be further strengthened by time as the company historically generates approximately SEK 400,000,000 in free cash flow on a yearly basis. The high cash results will be used for acquisitions and significant repayment of the existing bond when the last tranche of the bond will be refinanced. Acquisitions will not increase net debt beyond a leverage ratio of between two point zero to 2.5. That was my part of the presentation. Morten, please take over and guide us through the financial section.

24m 53s

Thank you, Thomas. In the first quarter, Link reports revenue of 1,700,000,000.0 Total revenue growth was as in the previous two quarters, impact by termination of low value traffic in the global messaging segment. And high comparables on high volume, low margin clients. These effects resulted in an organic revenue decline in stable currency, of 7%, taking into account positive currency effects of 31,000,000 in the quarter. Acquisitions closed in 2024 contributed with 6,000,000 and total reported revenue remained fairly stable year over year. Enterprise revenue remained stable year on year as we faced stronger comparables this quarter on high volume, low margin clients, including extraordinary high volumes on one single retail client in Q4 twenty twenty four. We continue to observe increased volume and revenue stemming from more advanced products reflecting implementation of sold contracts in the preceding quarters. Regionally, we observed low single digit growth in The Nordics in line with previous quarters. While Central Europe growth was reported at 7% in the quarter, somewhat down quarter on quarter impacted by the extraordinary high volumes, from the one large retail client. With an underlying momentum of double digit excluding this mentioned client. Western Europe revenue growth was as in the previous quarter impacted by strong comparables on selected high volume, low margin clients, this effect were stronger quarter on quarter as Q1 twenty four included even higher volumes from such clients.

26m 35s

The Global Messaging segment reported revenues of more than 300,000,000, or an organic decline of 28%, impacted by termination of low value traffic as in line with the previous quarters from refocus towards higher value traffic and reduced credit risk. Total volume reported for the quarter was 5,400,000,000 messages, representing a reported growth of 17%. And impacted by adding on significant volumes from the LATAM business as part of the acquisition of NetReal Solutions in Spain. Organic volume growth on SMS was as for revenue impacted by termination of traffic and high comparables. And declined year on year by 8%. OTT channels continue with solid organic growth momentum of 130% year on year, impacted by strong growth in WhatsApp messaging as Thomas touched upon previously, in addition to growth in RCS messaging. Moving over to the churn and net retention overview. Enterprise churn remained in the historical level of 1.5 percentage points, and includes a 0.3 percentage point impact from the large retail client that churned Q3 last year. The low churn reflects sticky integrations to clients' IT stack and high transition costs. Which are further supported by implementation of more advanced CPaaS contracts. As per revenue, net retention metric is by the terminated traffic and high comparable low value traffic same period last year.

28m 14s

The year on year effect related to selected high volume clients are stronger in Q1, as mentioned, versus last quarter. Hence a softer net retention is reported quarter over quarter. While the effect from terminated traffic in Global Messaging is at a similar level as we've seen in the last two quarters. We would emphasize that we expect net retention metric to normalize in the second half of this year once the high comparables last year are faded out. Moving over to the next slide on gross profit. Gross profit is reported at $4.00 9,000,000 or a reported growth of 15%, positive impact from currency of 8,000,000 and acquisitions adding 15,000,000 Organic growth in stable currency was 9% and outpacing revenue growth from shift towards higher value revenue compared to same quarter last year. The enterprise gross profit growth was 7%, outpacing stable revenue development. From improved revenue mix towards both higher value traffic products, driven by implementation of higher value CPaaS contracts. Regionally, Northern Europe gross profit was slightly down year on year, following softer volume development on selected clients. The underlying growth momentum on existing clients is influenced by price increases from operators, in the region while new contracts contribute on the back of consistent strong commercial results in the region.

29m 44s

Central Europe contributed positively to total growth, from both domestic and global clients, and an improved contribution from more advanced products on selected global clients. Leading to a reported organic growth of 22% year over year. Western Europe delivered organic growth of 3%, despite 6% lower revenue year on year linked to high comparables and high traffic, low margin clients, driving a positive margin mix. Growth is impacted by the isolated bankruptcy churn of a large retail client since the third quarter last year, impacting approximately 2% on year on year growth. In Western Europe, higher in interest in and increased use of richer OTT channels contributed positively was also somewhat offset by the isolated churn and retail churn, which include a high share of OTT mainly related to RCS messaging. The lower graph shows development in the gross margin level in the enterprise segment, which improved year over year and quarter over quarter to 28%.

30m 54s

Mix towards higher margin revenue, as in traffic and products, impacted enterprise margin positively, while the contribution from more advanced feature rich channels was 0.4 percentage point on the year on year margin expansion. Then to the next slide on adjusted EBITDA. Adjusted EBITDA is reported at NOK198 million, a reported growth of 25%, and 18% or 28,000,000 organic growth in stable currency. Growth is driven by $31,000,000 organic gross profit growth and partly offset by an organic OpEx growth of 1% or NOK3 million in the quarter. As Q1 twenty twenty four included a $9,000,000 bad debt recognition related to the 6% and mainly driven by salary inflation and other growth related items. Adjusted for extraordinary bad debt provision, the organic growth and adjusted EBITDA was 12%. The inorganic growth contribution from acquisitions closed in 2024 was $8,000,000 in the quarter. Adjusted EBITDA margin improved year on year by point five percentage points to 12%, driven by the 3.3 percentage points organic expansion in gross margin, partly offset by increased OpEx to sales ratio linked to revenue decline from low margin traffic. Moving on to an overview of the P and L. I will only focus on a select few items as we've been through the development in adjusted EBITDA in the earlier slides.

32m 33s

Non recurring costs in the quarter is reported at 11,000,000,000 and results are in a reported EBITDA of 187,000,000 for the quarter. M and A costs were NOK 11,000,000 in the whereas 6,000,000 was related to closed acquisitions, while the residual is related to ongoing processes, including the ongoing due diligence on five prioritized targets. Share option costs include a net reversal as the ordinary program cost of 3,000,000 were more than offset by 4,000,000 in reversal of Social Security tax accruals following share price development in the quarter. The net reversal of 1,000,000 in share option cost was fully offset by recognition of $1,000,000 in other restructuring costs. Also depreciation and amortization is reported in 2,000,000, a 9,000,000 increase versus 7,000,000 related to finalized projects end of twenty twenty four and the remaining increase related to acquired entities. Net financial items are reported at negative 35,000,000 include a net currency loss of NOK8 million. Which includes a $19,000,000 negative currency adjustment of the receivables related to broadcast reflecting a weakening of US dollar versus NOK partly offset by an 11,000,000 adjustment on liabilities denominated in euro. Net interest costs reported at 27,000,000 includes $39,000,000 in interest mainly related to bonds. 4,000,000 amortized transaction costs, which was partly offset by 16,000,000 interest on cash deposits.

34m 15s

Then to the balance sheet. Non current assets amount to $6,400,000,000 were of 4,600,000,000.0 in goodwill. With no indications of impairment. The year on year decrease in noncurrent assets of $7.00 8,000,000 dollars was primarily driven by reclassification of the receivables related to The US divestment, representing a decline of 400,000,000 cancellation of own own bonds represent a decline of 259,000,000. Trade and other receivables was reported at $1,600,000,000 and includes the seller's credit and earn out related to seller message broadcast, totaling $267,000,000 and due in the second quarter this year. Which is the main driver for the increase together with 30,000,000 related to acquisitions. Underlying development was positive following termination of low value traffic and improved collections. Cash reserves report that 2,400,000,000.0 and declining 900,000,000 year on year. Mainly from M and A of NOK $235,000,000 share buybacks of $3.00 $5,000,000 and investment in own bonds of close to NOK600 million, partly offset by cash generated from operations. Reported tables report is reported at $1,300,000,000 or a $220,000,000 decline year over year with contribution from acquisitions adding $32,000,000 The underlying decrease reflects the effects terminated traffic as well as normal fluctuation in timing of payables to mobile operators.

35m 50s

The net interest bearing debt is reported just above 1,000,000,000 calculated in accordance with our bond agreement. With gross debt related to the two outstanding bonds totaling €296,000,000 with €171,000,000 due in December. Leverage is reported at 1.4 times LTM pro form a adjusted EBITDA at the end of the quarter and in line with the previous quarter. The receivable seller's credit and earn out related to the sale of message broadcast due this quarter. Total two totaling 267,000,000. Not deductible in the net debt calculation according to bond terms. Including these receivables, leverage would be at one times adjusted EBITDA. Then to an overview of key operational cash flow items. In the quarter, we report cash flow from operation of SEK133 million. Somewhat impacted by net working capital build in the quarter from timing effects on tables. Working capital fluctuates from quarter to quarter, but we expect the impact to normalize on an LTM basis. CapEx was reported at 46,000,000 impacted year on year by salary inflation on development resources and a push on selected CPaaS solution to capture opportunities in term of terms of customer contracts. Interest payments representative of Link zero two quarterly interest payment and lease payments of 3,000,000 On an LTM basis, free cash flow after CapEx and interest paid was NOK350 million with NOK100 million negative impact of working capital build which is expected to normalize.

37m 36s

Lastly, an overview of bond with the two outstanding bonds totaling 290,000,000 divided into Link one with EUR170 €1,000,000 maturing December and Link two with €125,000,000 maturing October 2029. With a current blended interest rate of 3.8%. Our current solid cash position derisks a refinancing of Link zero one as full repayment leaves sufficient working capital to operate the group. The refinancing of Link zero one will be directly linked to expected development in the m and a pipeline, where our current targets are in due diligence stage. The refinancing will be managed in due time ahead of maturity end of this year. We reiterate that the financial policy remains of net debt not exceeding two point zero to 2.5 times LTM per form a adjusted EBITDA, which still gives ample room for executing on our inorganic growth strategy. That completes the financial section. Handling the word back to Christian.

38m 42s

Now we open up for Q and A. Please post questions online. We have received some questions already, and we'll start the session by some questions from Sigve Floor. From Nordea Markets. Reported 17% higher volume year on year in million transactions, increase in both SMS one way messaging and other messaging. But 7% declined year on year in reported revenue. Could you give some more flavor? Of the organic revenue decline?

39m 17s

Yes. I can take that one. Good morning. Is it good The reported number includes M and A. We have a significant contribution from the Latam business as part of the position within Spain through with the NRS. Acquisition. When we look at organic volume development on SMS, that is declining 8%. So that's fairly aligned with the with the top line development. As we've just went through in the numbers, we see still have termination of traffic in in global messaging. But we also have specifically for high volume, low margin client across Central Europe and and Western Europe, which drove high volumes in Q1 twenty twenty four. That was higher year quarter on quarter. So that is the main drivers for the for the organic one p cap. Great.

40m 17s

And we have another question from. Do you expect the product mix effect you saw in q one towards higher margin products to continue into 2025? A year on year basis.

40m 29s

I can take that one. Thank you, Sigurd. Yeah. I do expect based on the one contract and sales pipeline that would have a beneficial product mix effect, going forward. There are two main sort of drivers on gross margin it's the product mix effect and the customer mix effect. How this translates into the P and L going forward is difficult to say. It's based on sort of the customer mix effects too. But we are optimistic on product mix effects. That is improving our margin levels. But as I said, how this translates into the P and L going forward, that also depends on the customer mix effect. And it's difficult to give a detailed view on We have 50,000 customers.

41m 21s

Right. And then we have some question from [indiscernible] We'll start with the first one. Can you give some color on how q two has been going so far into the quarter?

41m 37s

I think I'm going to to point to, what I said on my last slide that, for the full year of 2025, we expect high digit gross profit growth and an EBITDA growth higher than that. Yeah. That's my comment.

41m 58s

Great. Next question. Also, do you have any indication RCS will be enabled for iOS in other markets?

42m 8s

We have gotten some indications that the next iOS update happening in June, July May opened up for for new countries. Apple is known for its secrecy. So let's wait and see. But it's our best estimate now is is July. [indiscernible] RCS, new contract wins up year on year, but looks to be down q on q. Should we read anything out of this or is it driven by some other effects such as seasonality?

42m 48s

No. You shouldn't really read anything out of it. It's quite normal that the end of the year is is very strong on the o channels and RCS specifically. Clients are planning their next year's campaign activity, and therefore, so sign contracts then. So there's nothing abnormal about that.

43m 12s

Moving on some to some questions from and from Handelsbanken. Net retention rate is still low despite adjusting for the 7% impact on terminated traffic in global messaging. How should we read into this in terms of Link's ability for upsell to existing and new customers? And could you give some color on mix between regions? Is there a certain loss in specific regions?

43m 37s

Yes. We spoke about on the on the webcast earlier. We we have, of course, the effect of permitted traffic being the missing. This is fairly the contribution that is fairly stable quarter on quarter. We have as I mentioned on the question to from the Sigu, is that we have specifically four clients, which are very high volume, very low margin.

44m 2s

So driving high volumes in comparable quarter last year, which are impacting the net retention rates, but not gross profit growth. To a material extent. So that is mainly in Western Europe, but also partly in Central Central Europe, we had one large 60 to 70% of the the the sort of close one contracts to be on on existing clients. And that's what we're seeing also in historical numbers. So the success rate on upselling is is high. That's what we also target going forward. Another question from. One smaller European CPaaS pair reported deteriorating ATP market in The Nordics. Given the somewhat slower development than The Nordics, do you see similar market dynamics or what's the main hurdle in The Nordic region?

45m 10s

I can take that. Well, it's for Link. Specifically, it's difficult for me to comment on on what the competitors are experiences. But for for for Link, as specifically, we see Norway is a challenging market. The three other Nordic markets are okay, but Norway is a little bit softer. And this is, due to the fact that Norway is the highest penetrated messaging market in the world, and it's been growing quite high. In number of messages, especially during the pandemic. And we have seen that, so [indiscernible] have implemented measures to to keep volumes stable after the pandemic, in order to to have a more [indiscernible] towards messaging and products. So that combined with smaller yearly COGS increases in Norway have made the market a little bit soft. [indiscernible] we have seen that this can happen from time to time, and then some, some time will pass, and then clients will be more ready to increase their spend So we think this is going to to blow over by time.

46m 39s

Right.

46m 40s

And last question from Espel. What's an what's a feasible enterprise gross margin in your view for the coming twelve to twenty four months given terminated low margin traffic increased usage of advanced messaging, and possible possible gradual improving markets.

46m 59s

I can refer to them and answer Thomas gave previously. We see a positive impact from the more advanced solution on our own margins right now, and that's a trend we expect also to see going forward. But like Thomas mentioned, we have more than 50,000 clients, and then the the mix of these vary from quarter to quarter. So it is hard to sort of give a our outlook. I Give an outlook on it, how it gonna sort of materialize in the p and l going forward.

47m 34s

Moving on to some questions from in, from Daskevan. Could you help us think about what is driving the port basis points uplift on gross profit margin from last year. Is it upselling of value add, or is it two way price uplift, etcetera? Yes. I guess, Brian is referring to the positive impact from the the sort of Richard channels or all the details. That is mainly driven by by the the the increased volumes and the higher share of revenue coming from those services [indiscernible] WhatsApp contributing to that. So that is basically based on the the signed contracts we are implementing on the back of strong commercial results within CPaaS over the last few quarters. So that is the sort of entering the p and l and impacting the margin in the quarter.

48m 35s

And another question from my end. Could you could you also help us think about amortization going forward? It's a meaningful line item in your, EBIT bridge, and with new acquisitions closed in The UK, how should we model G and A, especially the split between tangible versus intangibles, and whether you expect it to grow materially through 2025? Yeah.

48m 59s

I think that's, of course, depends on m and a activity. We will have we've consolidated The UK targets, the recent two from the So that will drive some impact. It's that's natural. The split between and intangible is mainly we're we're talking basically mainly about tangible assets that we are, amortizing. So I expect some some growth, but that's usually we write off this over approximately seven to ten years. Based on whether it's technology or client relations.

49m 43s

And we move on to a question from Denay. [indiscernible] From Kanto. You revealed that your market share in The UK is 8%. Can you share what percent of your gross profit comes from UK given that your activity there has picked up pace over the last few quarters. Who are some of your competitors in the country? How do margins in The UK compare with other European countries?

50m 10s

Yeah. I can start with the competitor landscape. The U UK is one of the dense populated countries in Europe with a fairly high penetration rate. So The U. K. Market is quite big. And there are a few local competitors. Comify is one of them. Mainly catering to small and medium sized businesses more. And then you also have the bigger global players who are in The UK markets. I would imagine our guests that is also due to the fewer language barriers. English is being smoked spoken in UK, and it's easier to sort of attack that market with with resources outside The UK. So we see Cinch. We see Belarsh, Nexmo, Infobip being active in the market.

51m 10s

The margins, they are they deviate that much from what we see in other, European countries. The COGS level is fairly similar to to what we've seen, for example, France. A little bit lower, but not materially. Martin, you might want to comment some on the gross profit.

51m 32s

Yeah. Yeah. And, of course, the quarter reflecting the fairly low position we have had before we did the recent M and A. So it's slightly below 3% of the total gross profit that we report.

51m 51s

Good. Moving on to a question on m and a. Are all 10 current prospects inside Europe? Are there any plans to expand M and A further outside of Europe?

52m 2s

Yes. We have plans to expand our footprint. Outside Europe. As I said, priority number one is to bolt ons in Europe, but we are looking at targets Europe as well. We have identified a few markets that is low risk, and we see a lot of value creation opportunities there. So we have specific plans to to expand with m and a outside Europe. In the pipeline of 10 prioritized targets. Most of those targets are inside Europe. We have two targets, outside Europe.

52m 36s

I don't want to comment on their location.

52m 41s

Moving on to a question on message broad transaction. When in May will you receive the remaining amount from the message broad broadcast and what you plan to use it for? Yeah. So there's two items there. There's the seller's credit that is due June. The the earn out, we agreed in the with the the seller to to do a review of the process of of the revenue, in for 2024. So that is in progress. Once that is finalized, we expect to receive the money a few days later according to the to the SBA.

53m 22s

So it's just it's just the process that we need to to run through.

53m 29s

Right. There are currently no questions. You will have one minute to ask questions, and we'll hold the line. There are no further questions. That completes the q and a. Thank you for participating everyone, and see you next quarter.

Key Insights

LINK reported strong financial performance with gross profit for the last twelve months at nearly NOK 1.6 billion, a 9% organic growth year-over-year, and adjusted EBITDA for Q1 2025 at NOK 198 million, reflecting 18% organic growth and a margin improvement to 12%.
The company’s strategy of focusing on higher-margin, advanced products (CPaaS, RCS, WhatsApp, chatbots, AI-driven SaaS) and terminating low-margin traffic has resulted in gross profit growth outpacing revenue growth, with a 3.3 percentage point increase in gross profit margin.
LINK continues to expand through M&A, closing three acquisitions in the UK in the last seven months and maintaining a strong pipeline with five targets in due diligence; the UK now represents 8% market share and a significant upsell opportunity.
The company expects high single-digit gross profit growth and even higher adjusted EBITDA growth for full-year 2025, driven by both organic expansion and a 10% inorganic EBITDA growth target via bolt-on acquisitions; leverage remains conservative at 1.4x LTM adjusted EBITDA.
Market trends show rapid adoption of advanced messaging channels (RCS, WhatsApp), especially in logistics and customer support use cases, with RCS volumes up significantly; LINK anticipates further margin expansion as these solutions scale and as Apple rolls out RCS support to more markets.

Recent Transcripts

Strong gross profit and EBITDA growth driven by advanced products and UK acquisitions.

Linq delivered strong 2024 results with 10% gross profit growth and 13% adjusted EBITDA growth.

Market Cap: $44M
IPO Date: 1/2/02
CEO: Mr. Steven Nathan Bronson
Fulltime Employees: 102
Sector: Technology
Industry: Hardware, Equipment & Parts
Country: US
Exchange: NASDAQ Capital Market

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And we have another question from. Do you expect the product mix effect you saw in q one towards higher margin products to continue into 2025? A year on year basis.

40m 29s

41m 21s

Right. And then we have some question from [indiscernible] We'll start with the first one. Can you give some color on how q two has been going so far into the quarter?

41m 37s

41m 58s

Great. Next question. Also, do you have any indication RCS will be enabled for iOS in other markets?

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46m 39s

Right.

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51m 10s

51m 32s

Yeah. Yeah. And, of course, the quarter reflecting the fairly low position we have had before we did the recent M and A. So it's slightly below 3% of the total gross profit that we report.

51m 51s

Good. Moving on to a question on m and a. Are all 10 current prospects inside Europe? Are there any plans to expand M and A further outside of Europe?

52m 2s

52m 36s

I don't want to comment on their location.

52m 41s

53m 22s

So it's just it's just the process that we need to to run through.

53m 29s

Key Insights

LINK reported strong financial performance with gross profit for the last twelve months at nearly NOK 1.6 billion, a 9% organic growth year-over-year, and adjusted EBITDA for Q1 2025 at NOK 198 million, reflecting 18% organic growth and a margin improvement to 12%.
The company’s strategy of focusing on higher-margin, advanced products (CPaaS, RCS, WhatsApp, chatbots, AI-driven SaaS) and terminating low-margin traffic has resulted in gross profit growth outpacing revenue growth, with a 3.3 percentage point increase in gross profit margin.
LINK continues to expand through M&A, closing three acquisitions in the UK in the last seven months and maintaining a strong pipeline with five targets in due diligence; the UK now represents 8% market share and a significant upsell opportunity.
The company expects high single-digit gross profit growth and even higher adjusted EBITDA growth for full-year 2025, driven by both organic expansion and a 10% inorganic EBITDA growth target via bolt-on acquisitions; leverage remains conservative at 1.4x LTM adjusted EBITDA.
Market trends show rapid adoption of advanced messaging channels (RCS, WhatsApp), especially in logistics and customer support use cases, with RCS volumes up significantly; LINK anticipates further margin expansion as these solutions scale and as Apple rolls out RCS support to more markets.