LINK Mobility - Q4 24 - Concluding a strong year with a solid quarter
LINK Mobility (LINK) reports a solid quarter with gross profit and adjusted EBITDA at NOK 436 million and NOK 213 million respectively, with organic growth in fixed currency at 8% and 12%. This concludes a strong year with organic growth above expectations with double digit gross profit growth and improved profitability demonstrated through adj.EBITDA margin expansion. LINK continues to execute on the strategy of local presence in our markets resulting in strong commercial results securing future growth momentum. Inorganic growth is a key part of the strategy reflected in the fourth quarter through the acquisition of Reach-Data in the UK, and we see further potential to consolidate the European messaging market at accretive multiples.
Organic gross profit growth for the quarter was 8% and outpaced revenue growth from replacing low-margin revenue with high margin traffic and advanced products. As in the previous quarter revenue growth was impacted by termination of low value traffic in the Global Messaging segment while Enterprise revenue growth was reported at low single digit and below gross profit growth of 8% for this segment. Profitability improved and was reflected through expansion in both gross margin and adjusted EBITDA margin to 23.6% and 11.5% respectively in the quarter.
The results conclude a strong year delivered above expectations with organic double-digit gross profit growth and higher adjusted EBITDA growth of 13% supported by the scalable business model.
LINK's recurring and growing business is driven by more than 50,000 loyal customers continuing to increase their usage. Growth momentum is supported by increased adoption rates for digital messaging and traction on higher margin CPaaS software solutions and OTT channels like RCS and What's App. Operator support for RCS Business Messaging continue to expand across LINKs footprint paving the way for future growth. LINK is well positioned to capture RCS growth with the RCS Business Messaging solution recently awarded Junipers Platinum Award as the best in Europe.
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. The acquisitions closed during 2024 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 consists of 11 targets, whereof 4 are in due diligence stage and total pipeline value of EUR 30-40 million cash EBITDA.
LINK reiterates medium term ambitions of continued high single digit gross profit growth and adjusted EBITDA growth at higher pace supported by the scalable business model. Inorganic growth will continue to be a key pillar for building further scale and ambition level is to add 10% of adjusted EBITDA through bolt-on acquisitions. A sound capital allocation policy is set that prioritizes accretive M&A but within net debt to adjusted EBITDA roof of 2.0 - 2.5x.
"We are pleased to report a strong quarter concluding a year above expectations with double digit gross profit growth and improved profitability. Our organic business growth has outgrown the market and LINK continue to be in the forefront of market consolidation in Europe. We target value creation from both profitable organic growth and further accretive inorganic growth into 2025 and beyond", 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/landingpage/hegnarmedia/20250213_12/
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 20 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.