Sinch AB (publ) (SINCH.ST) Q3 2026 Earnings Call Transcript

Mia Nordlander: Hi, everyone and very welcome to Sinch Q3 2026 Earnings Presentation. My name is Mia Nordlander, and I'm Senior Vice President, Investor Relations and Sustainability. With me here in Stockholm, in the studio today, I have our acting CEO and CFO, Jonas Dahlberg; and our Senior Vice President, Corporate Control, Sofia Ohlander. Today, you will hear Sofia and Jonas present the quarter and thereafter, we will have time questions. [Operator Instructions] Once again, very welcome. I hand over to you, Jonas.

Johnas Dahlberg: Thank you so much, Mia. So let's start to look at the highlights of the quarter. It's a quarter with continued profitable organic growth with the U.S. being the engine, Americas delivering 7% organic revenue growth. And at the same time, we have essentially stability in the combined EMEA and APAC in terms of revenue. In the quarter, we are advancing our offering in AI-driven customer communications. That's about expanding our messaging network. It's about enabling our voice network for voice AI agents and it's about enabling developers to use all sales channels in agentic development tools. And we do all this from a position of financial strength. We are at the upper end of our profitability target. We have super strong cash flow in the quarter, and we're continuing to deleverage our balance sheet accordingly. And with that, let's look at the regional performance. So Americas is 2/3 of our business, and it's really the engine of the group supported by our strong market position, blue chip clients, stronger market fundamentals and an emerging AI native customer base. Revenue growth in the quarter is driven by messaging and e-mail APIs as in the previous quarters. But what's also encouraging is that we actually start to see some shy growth also from the voice business. Americas gross profit expansion has largely the same drivers as revenue. But in addition, it continues to be driven by the strong modern expansion in network connectivity, driven by the upgrade of the network from TDM to IP. We're now about to complete that transition in the next couple of quarters. In EMEA, we're taking decisive steps to improve performance. The core business is solid with in particular, e-mail being the growth engine. And what's still burning us year-over-year are some legacy and niche products including fixed fee operator contracts impacting primarily the year-over-year comparisons, while they're more stable on a sequential basis. In APAC, we're combining sustainable revenue growth, predominantly in e-mail APIs, but it's also boosted by some temporary low-margin traffic. The gross profit in APAC is burdened by margin compression. Some of that is temporary, and some of that is more sustained. Let's look at the commercial momentum in the quarter. I'm very pleased with the strong commercial momentum we have. I won't go through all the deals in detail, but I want to emphasize a few points here. So as you can see, we have won several 6-digit USD deals. And what's encouraging to see is this is across customers and new customers as well as existing customers and through our partner motions. So it's truly a diversified commercial momentum, including every region and every product and what's also very encouraging is a common denominator is that we're winning because of our infrastructure advantage. Customers are choosing Sinch because of our superior infrastructure, providing enterprise-grade quality and reliability. And also, what's great to see here are several voice wins. So if you look at the top row here, you can see a global cybersecurity company who are choosing our voice API. We have a financial services company being an existing customer, which is adding voice as a product to the portfolio. And through our partner motion, we have an agentic AI provider who have chosen Sinch. And the common denominator across these 3 is we're displacing competitors and we're displacing them because we provide an enterprise-grade performance in terms of voice quality and reliability. And we're going to talk more about our voice offering in a bit. Now this was history, and now let's talk about the future, what will drive growth in the future. Well, short term, it's about continuing to double down on what's working, and that's truly the U.S. as well as our e-mail offering. Those are the growth engines from a regional and product perspective. Simultaneously, we're working to elevate the performance in EMEA and APAC, and we see very good progress there, although it will take maybe a quarter or two before it's shown in the numbers. Medium term, it's about driving net revenue retention. That's about winning fast-growing customers such as AI natives, but it's also about expanding existing customers and increase the loyalty in the customer base. And longer term, it's about providing innovative products for our customers. So let's talk more about that. And I want to talk first about the expansion of our RCS network. As you know, we are very bullish about RCS and WhatsApp as they provide the foundation for a conversational AI future. Both RCS and WhatsApp are promising a better customer experience and more customer value down the traditional SMS messaging. And in the quarter, we achieved full Tier 1 RCS coverage across North America with direct connect to all Tier 1 carriers in Canada. So we're now complete in North America. And on a global basis, we now have 84 direct connects on RCS, which is up 24% from a year ago, and we see continued strong growth in traffic. And in North America, in particular, we see traffic going up 5x from last year, although from a low basis. APAC still remains the majority, actually 3/4 of the RCS traffic and volumes have doubled to 1.4 billion messages in the quarter. That is on a global basis. Now I want to move on from messaging because many people still think we are a messaging company. In fact, voice and e-mail are equally important. And on top of that, we have an application business. Last quarter, we talked about e-mail. So this quarter, I want to share some exciting developments we have in voice and our voice advantage is based on truly an infrastructure advance we have the -- and we own the largest independent carrier-grade voice network in the U.S. Our network carries more than 250 billion voice minutes a year. It's directly connected to all relevant carriers in the U.S., and we own a pool of 160 million phone numbers. Our network provides best-in-class performance in terms of voice quality and reliability. It's an enterprise and carrier-grade network. A few years back, many people thought that the voice channel would perish on behalf of text. And what we now see is renaissance truly of voice AI. So voice is back as a channel. And that's what I want to talk a little bit more about. So voice agents are now truly coming to market, but they need a good infrastructure to provide a good customer experience. So this is where our voice network comes into play. But they also need an easy-to-use interface to the carrier-grade networks. And this is where our voice API comes into play. And we have provided a programmable voice offering for years, but we're now launching our voice API version 2, providing more functionality, and it's really geared towards enabling agentic AI on our network. So if you combine our voice API with our voice network infrastructure, we have what I would be confident to say the best home for agentic voice in the market, and that's why we're also winning voice agents. More AI. I want to talk about how we enable not only voice, but all our products to the new market of agentic development tools. Software, as you know, is today not just written by humans, but by humans operating agentic AI tools, and we are positioning Sinch to win in this new developer market. We're now available in all leading agentic development tools, including well-known brands as Anthropic's Claude, Codex from OpenAI and Google Agentspace. And the latest addition to this is SpaceX Super Intelligence Grok Build. And as you know, we are also available through Lovable and maybe what's not as well known is that we're also available through a voice AI specialist called Eleven Labs. Now the way we work with these agentic development tools is we make ourselves available through our MCP servers through our skills that describe how AI can use our products. We have functions which are really prepackaged operations, and we have developer tools such as our command line interface and our SDK framework. And with this combination, what we do is we enable these agents to, in a very simple way, develop applications on top of our channels, which are provided through our APIs. And the result is a faster path from idea to customer -- to live customer communications. And for Sinch this is a new distribution channel of our products and we think this is very exciting. And SpaceX super intelligence Grok bot is the latest addition to this. So we're now a SpaceX SI marketplace partner. And as you know or may know, SpaceX recently acquired Cursor and it's one of the fastest-growing agentic AI coding environment. More than 50,000 enterprises use this tool to develop software. And with Sinch plug-ins, developers now can easily build applications based on messaging, voice and e-mail into their apps, basically without leaving that environment. So Grok builds the code and Sinch provides the enterprise-grade communications infrastructure. And let's look at what that could look like before handing over to Sofia. [Presentation]

Sofia Ohlander: Hello, everybody. My name is Sofia Ohlander, and I am Senior Vice President at Corporate Control at Sinch, and I'm very happy to be here with you today to present yet another solid quarter at Sinch. Starting with the headline numbers. As a reminder, we report in SEK, but USD is our dominating trading currency and we always look to organic growth to measure the underlying performance of our business. And organic revenue growth came in at 5% in this quarter. This is driven by our largest region Americas coming in at 7% and is driven by our largest product category, API platform, where we have our messaging and e-mail business. Also in this quarter, we saw cost increases from certain U.S. suppliers that were passed on to customers at cost, supporting group organic revenue growth by approximately 2 percentage points. As I said in Q2, while this has an effect on our gross margin, it's a natural part of our industry, and we don't see this as a sign of shift in underlying profitability. If we normalize for this effect, we actually see strong underlying profitability in Americas, and we see that new business is coming in at stable, healthy margins. In EMEA, we had a revenue decline in this quarter at negative 3%. And while we see some stabilization in the core and high double-digit growth in e-mail, year-over-year was impacted by the reduction of fixed fee operator contracts. And in Q3 last year, these contracts were declining, but sequentially had a peak, which impacts this quarter's year-over-year. Importantly, these contracts now represent a low single-digit share of Sinch revenue and gross profit. In APAC, revenue came in at 5%, and this is driven by high double-digit growth in e-mail but we also had some temporary low-margin messaging traffic, which impacted revenues. And moving on to gross profit. GP came in at 4% and this is fully driven by Americas at 10% organic GP growth. And this comes from API, where we have both existing and new customers driving GP growth as well as both messaging and e-mail. In network connectivity, continuous work of shift of TDM to IP technology reduces our cost and drives up organic GP growth as well as margins. In EMEA, we had a decline in GP growth in this quarter of 2% and is driven from a few different factors. Again, we had strong double-digit growth in e-mail but this was offset by churn in legacy technology products and the before mentioned reduction of fixed fee contracts. Important to mention also here on gross profit is that on a sequential basis, EMEA gross profit is gradually stabilizing. And in APAC, GP declined in this quarter, and this is driven by the margin compression in our applications business in Australia from high levels and a year-over-year decline in India. Our business in India experienced a decline against high prior year comparisons. And also here on a sequential basis, we see signs of stabilization. And a reminder again, that India is now a low single-digit share of Sinch Group gross profit. So any further downside should have a limited effect on a sequential basis. So all in all, a solid organic revenue growth and a stable gross profit growth driven from our largest region and our largest product category and signs of stabilization in EMEA and India, but declined on a year-over-year basis from EMEA and APAC. So moving on to look at the nature of the top line development and profitability. Let's start with gross margin. In Q3, we see an uptick in the margin versus Q2 and stability on a year-over-year basis. And before we go into the details, the core message I want to convey is that even though the reported numbers look flat on a year-over-year basis, our underlying profitability remains strong. And on a year-over-year basis, we have a shift of TDM to IP technology, and that has a positive effect on group gross margin. And this is countered by 2 distinct factors in this quarter. In APAC, the gross margin is declining and that weighs on the total gross margin. And the effect that I mentioned from increased costs passed on to customers at cost they have a dilutive effect on the gross margin. Combined, these effects led to a flat gross margin on a year-over-year basis. But importantly, if we adjust for the 0 margin traffic, we actually see a strengthened margin year-over-year, which is a sign of maintained profitability. And on a sequential basis, the margin is up about 1.1 percentage points. And this is driven by the uptick in network connectivity in this quarter and also some FX movements on a Q-on-Q basis. And if we move on to adjusted EBITDA and profitability, the adjusted EBITDA margin is flat on a year-over-year basis and up with about 1.2 percentage points sequentially. And this is really driven by the stronger gross margin. And let's stop for a moment to look at our profitability. Adjusted EBITDA margin is at historically high levels and further adjusted EBITDA and EBITDA are moving closer and closer together. And this means that our adjustments to EBITDA have been decreasing over time, reflecting consistent healthy profitability. And actually in Q3, we have an all-time high EBITDA margin since we were listed at 12.9%. And let's look a bit more at our cost development on the next slide. We continue to be in control of our costs. Adjusted OpEx is at 4% organic growth, and this supports our adjusted EBITDA growth of 5%. It's important to note here that while we see a step-up in adjusted OpEx growth on a year-over-year basis, on an FX-neutral sequential basis, adjusted OpEx is flat in Q3 versus Q2. It's also relevant to mention the distribution of our costs, where we have decreases in G&A expenses which free up funding toward growth areas such as sales, marketing, product and technology. And we will continue to make targeted investments in these functions while driving productivity improvements across the board. And let's see what this trickles down to in cash flow. And in Q3, our free cash flow was SEK 787 million, with a cash conversion on a rolling 12 basis of 75%. This is well above our guidance over time and the positive development is really a result of our solid underlying profitability and disciplined capital expenditure. I want to emphasize a point we usually make that working capital may have swings between quarters driven by timing. I also want to remind you that our guidance over time is at 40% to 50% cash conversion on a rolling 12 basis. But all in all, very pleased to see a solid cash flow in this quarter and a stable working capital. And let's finish off with a look at our balance sheet. Our leverage continue to improve in the quarter with a net debt to adjusted EBITDA reduced to 1.7x. Between Q2 last year and Q2 in this year, we repurchased 15% of our outstanding shares, which have been canceled, and we made no share repurchases during this period. But during the quarter, leverage decreased rapidly, and this is driven by the strong cash flow and a strong balance sheet, which gives us good financial flexibility and makes us be able to maintain a strong position to return shareholder value. And with that, I'll hand over to Jonas for some concluding remarks.

Johnas Dahlberg: Thank you, Sofia. So just to conclude before Q&A. We're on a trajectory of profitable organic growth, and we continue that. We advanced our efforts in AI-driven customer communications, and we do this from a very strong financial position. And with that, Mia, let's take Q&A.

Mia Nordlander: [Operator Instructions] We have [indiscernible].

Unknown Analyst: Thank you, and good morning to you all as well. So just a couple of questions from me. I'm looking at the gross margin here in network connectivity, Americas at 42% now on a rolling 12-month basis. How much more potential do you see there? How much more is there to capture from the TDM to IP transition?

Johnas Dahlberg: So we're about to complete the transition now in the next 2 to 3 quarters. So you should look at the margins on -- in the quarter. And then you can expect maybe some percentage point uptick in addition from this transition for -- in the next couple of quarters. But look at the quarterly performance and then take it from there.

Unknown Analyst: Okay. That's helpful. And I mean relating to that, if we look into next year and you don't have this tailwind from gross margins in the Network Connectivity Americas, which is the current largest driver to gross profit growth? What makes you confident that you can continue to accelerate the organic GP growth and reach the targets you have?

Johnas Dahlberg: So I mean that's going to come from the revenue growth. And we see an acceleration in revenue growth. We have solid growth in the U.S. and also our highest margin product being e-mail, it's growing stronger than the average mix, actually very much stronger than the average mix. So that makes us comfortable or confident, I would say, that we can maintain current gross margin.

Unknown Analyst: Okay. Just a final question on the buybacks. Why haven't you restarted the buybacks?

Johnas Dahlberg: So I think you need to look at the buybacks in the perspective of last year's very ambitious buybacks. We repurchased 15% of total outstanding stock last year. And at every point in time, the Board optimized the capital allocations across buybacks, delevering the balance sheet or looking at M&A opportunities. So we are ready to do buybacks, but we could also use the capital for M&A or to further deleverage the balance sheet.

Unknown Analyst: Okay. And just a final question. In terms of M&A, is it primarily bolt-ons that you're looking for? Or could it be a larger, more transformational one?

Johnas Dahlberg: So repeating what we've said previously is we're continuously looking at bolt-ons, if we think they add value. But this is also an industry where we think consolidation will happen. So we're also looking at transformation opportunities. But that's not really new. It's in line with what we've said earlier.

Mia Nordlander: Thank you. Next one is Daniel Thorsson from ABG.

Daniel Thorsson: Yes. First one, a little bit differently framed here on the Americas, but the organic gross profit growth for API platform in the quarter continues to be around 5% and actually slightly decelerating a bit to 4% in Q3. Do you expect this growth rate to accelerate in the quarters to come when growth from network connectivity may fade to keep the region at 10%?

Johnas Dahlberg: Yes. We have higher ambitions in API Americas, absolutely.

Daniel Thorsson: And the main driver for that -- is it e-mail or voice or any specific...

Johnas Dahlberg: It's going to be a voice, email and messaging. I think most of the volume growth will come from messaging, but it's all 3.

Sofia Ohlander: And in API platform, you will definitely see from e-mail and messaging then.

Daniel Thorsson: Yes. Clear. And then secondly, on group level, you have said that -- the second half of this year, organic GP growth should be better than the first half. If all right there, it was 4% in the first half, 4% in Q3, meaning that you need an accelerated growth in Q4 to be above 4%. What is the main driver of that?

Johnas Dahlberg: Well, it's Americas and the continued development of Americas and also meeting better comps or easier comps in APAC and EMEA.

Daniel Thorsson: Okay. And then finally, you are mentioning in your report that you're open for potential divestments, which I think is a new communication. Are these primarily related to underperforming units like the SMS business in India or certain parts of EMEA? Or is this basically opening up discussions with external partners across the entire product portfolio?

Johnas Dahlberg: It's not the entire product portfolio. What this is about is -- you know that Sinch made several major acquisitions a couple of years back. With those acquisitions also came let's say, adjacent businesses, which when we combine this into one Sinch and would position ourselves for an AI future, may not -- it's good businesses, but they may not really fit the portfolio. So they could find a better home maybe somewhere else and develop more favorably with someone else. That's how we should think about it. And in that way, we are also focusing our efforts where we think Sinch has the brightest future.

Daniel Thorsson: Okay. Would you say that those are concentrating to declining units at the moment? Or could this affect the growth rate of the entire group?

Johnas Dahlberg: I don't want to get into exactly what the financial profile we're looking at here. What I want to say is this is more focusing the business on the core going forward to make sure we're just focused on the growth opportunities. Exactly what the financial profile is, if and when something would happen, we have to come back to.

Mia Nordlander: Next one, we have Victor Hogberg from Danske Bank.

Viktor Högberg: Just want to confirm on the Americas. Network Connectivity gross margin was 47% now in Q3. Did you say you expect that to improve by 1 percentage point in the next coming quarters and then stay at that level, just confirming that? That is the first question.

Johnas Dahlberg: Yes. If you look in isolation and everything else being equal and then you add further rollout of the IP technology. There is room for a couple of percentage points additional gross margin expansion from network connectivity over the next, say, 2 to 3 quarters.

Viktor Högberg: Okay. Maybe coming back to AI just a bit, you're more concrete on it. Your peers have been as well. Early days, of course. When do you see this adding materially or meaningfully to gross profit growth? When can you separate it out and be a part of driving growth on the group level or East in Americas to begin with?

Johnas Dahlberg: We expect it to meaningfully contribute to growth next year. So maybe low single-digit contributions to growth next year.

Viktor Högberg: Okay. And is that driven by just thinking about if you could elaborate on the confidence in that and the background for it, is it volumes that you've not been promised maybe, but what you seeing in discussions with your customers? Or what is the basis for that? Because that's part material from an expectations point of view, maybe would deliver growth already next year.

Johnas Dahlberg: Yes. And I mean the reason why we believe in that, firstly, these companies, they need customer communications and they're growing fast, real fast. And we have discussions ongoing with several of these companies. They are in our pipeline. Initially, the volumes may be limited, but it's just fundamental need and demand that's coming in the market. So yes, I think it's going to be visible in -- as a contributor next year.

Mia Nordlander: Next one, we have Daniel Djurberg from Handelsbanken.

Daniel Djurberg: Most questions asked that I had, but I can try on -- if you look at -- you mentioned, for example, WhatsApp being a strong contributor to growth and Meta has also only kill its own channel. But over time, they have at least, to my knowledge, a more comprehensive enterprise communication platform offering. And do you see a risk that the value add from the CPaaS layer will be less pronounced given what they are doing internally?

Johnas Dahlberg: We don't and there is -- there are 2 main reasons for this. The first one is the more channels, the better for us because our job then becomes to orchestrate the customer communication across all those communication channels. So complexity is good. Then -- so that's the first reason. The second reason is Meta have, they've realized that they can't do this themselves. They are a consumer-facing company predominantly. And dealing with enterprises is a different business, and we provide clear value add. So no, I think we can have a great partnership with Meta and all the operators on RCS and also other channels as well.

Daniel Djurberg: Yes. That sounds good. And also turning to EMEA, you write in your CEO letter that it would take a few quarters to make the turnaround, but we see some solid progress. Can you give us some more insight in this progress and also what you're aiming to do more in hands-on in EMEA?

Johnas Dahlberg: So as you know, we have a new leader for EMEA, Jonathan Ben, and he's taken quite some action in the EMEA organization to elevate the performance and what we can see now is in the core EMEA business, if you look at the API business, the e-mail business, that's stable. And actually, the e-mail business is growing quite nicely. And where we have weakness is really on the fringes in EMEA. It's about the fixed fee operator contract. It's about some niche software business we have for telcos. But underlying solid business in EMEA, and we see pipeline growing in EMEA. So I think this will translate into growth numbers within the next few quarters.

Sofia Ohlander: Also strong in conversational in RCS in EMEA. So that's something that we're driving, pushing hard on.

Daniel Djurberg: Can you also just give some more color on the RCS? You have more and more coverage with, I think, 21 countries and more or less all Tier 1s. But obviously, this will kick over some of the SMS revenues. But do you have any percentage-wise on growth or part of the total messaging being RCS today or something?

Johnas Dahlberg: Yes. So year-over-year volumes is doubled. And if we look at North America, it's 5x last year. It's still low single-digit percentage of the total messaging mix. And we have to be honest, this moves slower than we expected. And a lot of this is onboarding friction with operators. And at the same time, the SMS business is there, it's growing in terms of volume. So -- and WhatsApp is also an alternative. So we still believe that the conversation future is looking good. And I think for us -- and as you know, we've always said, you shouldn't expect a massive margin increase from these channels. It's more about a richer customer experience, which will, longer term drive volume. So we're not really -- I wouldn't be worried about somewhat slower uptake in RCS. But obviously, if we can accelerate that together with operators, that would be great.

Daniel Djurberg: Perfect. And if I may, the very last question from my side would be on OpEx. I think it was up 4% year-over-year in Q3, a little bit on how to think on this when we do our estimate and also if you can give us where do you say where do you invest in terms of segments, geographies and so on?

Sofia Ohlander: Yes, I can take that one. And you're absolutely correct that OpEx is up at 4% on a year-over-year basis versus 1% on a year-over-year basis last quarter. But just as a reminder, what I said is that on a sequential basis, we're actually flat if we neutralize for FX. And in terms of estimates, I would guide you to what we've said at our Capital Markets Day in 2024, which is that we will look at adjusted EBITDA margin, and we should be around 12% to 14%, and we're well within that range in this quarter at this south of 14%. And we will prioritize investments, further investments in growth as opposed to further elevating the adjusted EBITDA margin. Where we invest is really in areas that we see that we can get healthy growth from. So a lot of that is Americas. Obviously, API, we talk about messaging, e-mail. We also have a great voice opportunity in that area. And then we're also working then to stabilize EMEA and APAC, obviously.

Johnas Dahlberg: Just piling on what's not visible in the total OpEx number is quite a significant shift within OpEx from reducing G&A, reinvesting in sales and marketing and product development.

Mia Nordlander: Next one is Thomas Nilsson from Nordea.

Thomas Nilsson: We've seen throughout the year, organic gross profit growth increasing and EBITDA growing faster. I would like to think -- how you think about operating leverage as growth accelerates? How much operating leverage should we expect? Would it be reasonable over time to see the margin rising over the coming 3 to 5 years?

Johnas Dahlberg: So what we've said is now when we're -- we have -- the leverage target is ticked off. The profitability target is ticked off. Now the priority is accelerating growth. So we do -- we work with efficiencies continuously shifting from G&A into growth. We're also deploying AI on our internal processes. And that efficiency rather than driving further margin uplift we prioritize to elevate growth. So to answer your question, we could drive margins even more, but we're prioritizing to reinvest the efficiencies into growth.

Mia Nordlander: Then we have Deepshikha from Goldman Sachs.

Deepshikha Agarwal: I have 2 actually. One is, I think at the beginning of the year, it was highlighted that there were a lot of contracts, especially in America that were expected to ramp and help driving the growth in this region. So can you just talk about that dynamic in terms of how those contract ramps had? Like how is that 10% growth in Americas being like driven by like these contract ramps and especially when you once this upside that you're seeing from network connectivity on the GP, that starts sort of normalizing. How should we think about the growth in the region? The second one is basically just a quick update on the impact on the cash flow related to that there were some provisions made on taxes. So is that like -- is it fair to assume that it's largely behind and most likely that would not like happen? Or is it like -- how should we think about those payouts going forward?

Johnas Dahlberg: So starting with the contracts. So we won some very nice contracts in the beginning of the year, in particular, one on voice that is ramping. It's ramping a little bit slower than expected, but it's ramping towards our expectation in terms of GP. The second question was on sorry?

Sofia Ohlander: It's on the provision that we made, Deepshikha. We made a provision in Q4 and 2024. And we have utilized about SEK 35 million of that provision during the first half of this year. And in Q3, we have not utilized anything, and we have further reclassified from short term to long term. So in terms of cash flow, I think that you should assume that we will have a long-term outflow. But longer term, as you know, means more than 1 year out. And that's our best estimate at this point in time. And when we have a new estimate, we will come back with that.

Mia Nordlander: Next one is Bharath from Cantor Fitzgerald.

Bharath Nagaraj: I have a few questions, please. Given the few issues at the fringes in Europe, EMEA that you mentioned, how do you reckon your market shares in the region have trended in the past year? That's the first question. The second one on EMEA AI API gross profit growth. Am I right in saying that the legacy messaging churn is largely offsetting the entire e-mail ramp. And lastly, voice seems to be largely an Americas story, AI voice streams, voice API version 2, et cetera. There's no mention of Europe at all. Is the European voice opportunity structurally different? Any color there.

Johnas Dahlberg: So let me start with the market churns. It's very difficult to measure market churns in this industry. So I don't want to really talk about the market churns in Europe because we don't know, to be honest. What -- so moving on to the next question in terms of -- what's the strength and what's burdening us in EMEA? So the strength is in e-mail. But traditional SMS is also strong in EMEA. It's not the SMS business that's burdening us in EMEA. It's niche products we have with this fixed fee operator contract and also our niche telco software business, that's really what's burdening us in EMEA. And when it comes to the voice AI opportunity. So 2 drivers here. The first one is the structural advantage we have in Americas is our voice network, our carrier-grade voice network, which provides a competitive advantage for anyone who wants to run voice AI agents. This is very difficult to replicate. We don't have the same asset in Europe. So that is a structural difference. The second thing is most of these companies are coming from the U.S. So what we expect is to gain a foothold in this market and grow in this market in Americas. Then we will expand from that also into Europe, although not on the same infrastructure advantage.

Bharath Nagaraj: Okay. Understood. But do you see that Europe, the demand for such a product is there? Or is it a bit lagging in U.S.? Or how does it...

Johnas Dahlberg: I would say it's lagging a bit. In general, we see the AI demand lagging behind the U.S. But it's difficult to assess how long it will take. But I think since we have 2/3 of our business in the U.S., that's important for us and very meaningful, of course. So we will be ahead of the curve in a way in that way. And once we have that business, we have a competitive advantage also in Europe and APAC since we bring basically the U.S. experience into those markets.

Bharath Nagaraj: Understood. Yes. So can I ask just 1 more question on Australia. I know there's been some pressure there. Is that mainly from high competition? Or is there any further color you can provide, please?

Johnas Dahlberg: Sorry, can you say again? You were breaking up a little bit.

Bharath Nagaraj: Sorry, I was asking about Australia. Is the main reason for the business being under pressure there. Is that from -- for competitive reasons? Or is there anything else that's going on?

Johnas Dahlberg: So the situation in Australia is we have a very solid business. We are a market leader in Australia, but we're coming from very high margins in Australia. And this has attracted some competition from the outside. And to defend the market share and the position in Australia, we need to work with price and normalize basically the price level in Australia. So Australia has been an outlier with very high pricing and profitability. And so it's not really -- I wouldn't call it a weakness in the business. It's rather that we're coming from a super strong position and now the market is somewhat normalizing, but we're defending the share in the market.

Mia Nordlander: Next one, we have Victor Cheng from Bank of America.

Hin Fung Cheng: A lot of them has been asked. But maybe one from my side. I think earlier you mentioned about across different scenarios, displacing competitors. Can you talk a bit about maybe who you're displacing? Is it the larger peers that you're displacing? And where do you see strength and maybe some directional comments about win rates where you are feeling a bit stronger versus areas that still need some more work?

Johnas Dahlberg: So I don't want to single out any particular competitors or name them. But what I can say is -- in voice, it looks like us and maybe some others who actually have their own network, and we have the best network in the market. We are winning because of that in voice AI. So CPaaS providers without that infrastructure advantage are maybe more vulnerable than we are. That's what I would like to say. And in terms of win rates, it's -- we don't really have enough statistics to make that into a reliable number, but it's a good win, right? I would say that.

Sofia Ohlander: Yes. And just to also emphasize that there are very few players in the market that can do this at this scale. I would say it's us, probably 1 or 2 more. So that's also important when we win customers.

Mia Nordlander: Okay. Next one, we have Daniel Thorsson from ABG.

Daniel Thorsson: Yes. I just have a final one, which we haven't touched upon today. I'm fully aware that this probably where this is not the question for you to respond. But are there any news to share on the recruitment of a permanent CEO? And why has it taken such a long time? Anything you can share?

Johnas Dahlberg: I can give you the phone number to my Chairman and the two of you can discuss it. So that's, I guess, what I can say.

Mia Nordlander: I think that was it from the telephone conference. Looking at the chat, we have actually answered most of them. It's one here. What is your current mandate to buy back shares?

Sofia Ohlander: We have a mandate to buy back up to 10% of outstanding shares currently.

Mia Nordlander: Good. That was it for today. Thank you, Jonas. Thank you, Sofia. Thank you to everyone that is listening to us today. We will be back here in the studio for the Q4 and year-end results on the 11th of February. If you have any questions, feel free to reach out to the IR department. Thank you very much, and goodbye.