Sinch AB (publ) (SINCH) Earnings Call Transcript & Summary

Welcome to Sinch's very first Capital Markets Day ever. My name is Ola Elmeland. I do Investor Relations at Sinch, and I'm here to guide you through this day. And I'm, first of all, so glad that so many of you have chosen to join us here in Stockholm in spite of this gloomy November, actually, it's snowing. So we have some cancellation, unfortunately, but I'm really glad all of you are here. And that goes for you have joined us online as well, of course. Last time I checked, I expect you to be a couple of hundred at least. And of course, all of those of you who have found the way to the recordings, and are joining us after the event. You are most welcome. And remember, you can post questions if you're with us online, of course. Anyway, we have an agenda, of course, and the first speaker today is Laurinda Pang, our CEO. She will, of course, comment on today's press release and our financial targets. She will also talk about our position in the market, how we are transforming to reaccelerate growth. And also, she will talk about how we create value for shareholders and other stakeholders. We'll keep you now on the top and on the general level, and then we will hand over to Sean O'Neal, our Chief Product Officer, who will talk about the Customer Communications Cloud, what it means for our customers and also go through our product portfolio, where we're heading, and he will put the spotlight on a couple of hot topics today. We think RCS deserves a spot, we think AI is another example, and we think Sinch Engage is the third. And by pure coincidence, these are actually the headlines of the 3 demonstrations we have out here that you can visit during the breaks and after and before the event. After that, we think it's a good time to have a Q&A. Remember, you can post questions online, and there will be 2 microphones in here, and we will circulate the questions between you. After that, we will have a well-deserved break, enjoy the coffee and visit those demo stations. After the break, we will switch topic, and we will visit the regions. So we will take the customer perspective. And of course, who better to do that than our 3 Executive Vice President, Julia Fraser, Wendy Johnstone and Nicklas Molin. So they will give a perspective of their particular region from a structural, from a customer and from a growth opportunity perspective. Today's press release also contains some information about our targets going ahead when it comes to sustainability. And we have, of course, with us today, Karin Arrenfeldt, our new Head of Sustainability and she will talk on that subject, about those targets, about the framework and where we are heading, of course. So this is a lot of information and who better to wrap that up, then our CFO, Roshan Saldanha, who will try to stitch all these pieces together and talk about value creation, both from an organic growth perspective and also from an acquisition perspective. And that's not all. Because with us today, we have 2 people who will help us out, and it's Thomas Heath, who will talk specifically about the market in Laurinda's section and it's Robert Gerstmann, our Chief Evangelist who will talk about RCS in Sean's section. And then rumor says, we have some customers with us as well. We'll see if that is true. Okay. So that's what we have in front of us. And I think we will invite our first guest speaker, Laurinda Pang, to stage. But before that, watch this video. [Presentation]

All right. Good afternoon, everyone. Thank you so much for being here today here in Stockholm and again online with us. I joined the company 19 months ago, and I wanted to share with you a little bit about what I found when I joined the company because they still remain true today, and it is exactly why I'm excited about this company going forward. When I joined, I found a culture filled with people who were passionate about their customers who knew their business extremely well. I found a company who had acquired a number of assets that are well poised to fill the demand of a very depending marketplace. I found a business that was financially strong and very disciplined with regards to how it was managing its margins and managing its costs. I also found that our consumers are more and more demanding, right? And you've heard many of you who I've spoken with over the past 18 or 19 months have heard me talk a little bit about this over that time period. The exciting thing for me today is I also walked in and found that we have just a fantastic set of customers. And today, as Ola mentioned, you're going to hear why these customers are doing business with us. You are going to hear the voices of our customers and I think that's pretty exciting. I also walked into a business and to a market, quite frankly, that was a little bit depressed and was slowing. And we're going to talk a little bit about that as we move through the day. But when we were preparing for today, and I was thinking about what is the purpose of bringing you all together, I thought about all of you and wanted to try and put myself in your shoes, what your perspective was. Many of you have known us since we found it. Many of you have known us since we IPO-ed in 2015. Some of you became particularly interested as we had explosive growth during the COVID years. And some may not even know who Sinch is, is still trying to figure out who we are and what we do. So the reality is we are part of a very changing marketplace, right? As I mentioned, consumer demands have increased. They have not gone backwards. The speed of technological shifts is dramatic. I don't think it's anything that any of us might have comprehended just 5 years ago. Regulatory compliance requirements are continuing to add just taxing infrastructure to organizations. So it's becoming harder and harder to do what businesses do. And then, of course, again, the rising demand of customers. And we can't forget sustainability, right? Sustainability is top of mind for many organizations. So with that, with the changing marketplace, there's no reason to believe that Sinch didn't need to change as well. So as you leave today, I hope you leave understanding 3 key things, and these will be the common themes as you listen to the team today. First, I want you to understand what is the market that we play in and how we win and why we win? I hope you understand our transformation, why we're transforming, what it is that we're doing and how we're progressing? And finally, how we're creating value for all of our stakeholders? So first, the market. Sinch is a global leader in digital customer communications. That is not us saying that. That is the likes of IDC, of Gartner, of Omdia. These are some of the world's leading industry analyst houses. That's what they're saying about Sinch. The market that we play in is quite sizable. It's USD 85 billion. That's how we size the market that we play in. And we do expect that market to grow at an 8% to 9% CAGR over the next 5 years. Now given the fact that Sinch is a global leader, it is still a very fragmented environment. So there's plenty of opportunity for us to grow in this space. As we think about what are the drivers for market growth, we think about it in the context of 3 themes. The first is around digitalization or digital transformation. This is how companies or businesses become much more customer-centric. We also see the rise of advanced messaging. This allows companies to deliver better experiences to their customers. And then finally, AI. I probably don't need to tell you much about that, but AI is absolutely transforming the way that businesses communicate and interact with their customers every single day. Transformation, we are reshaping our business to reaccelerate organic growth. But in addition to that, we're reshaping the business to create the foundation and the framework for us to be able to do additional M&A. We've been quiet for a couple of years now, as you all know. But we think about our transformation in 3 pillars. The first is go-to-market transformation. This is really how do we deliver value to our customers. The second part of our transformation journey is around product integration. How do we create a unified and simple experience for our customers to be able to consume the entirety of the Sinch portfolio. And then finally, operational excellence. This is about our people, our process, our technology, how do we become more efficient and effective in the organization? And how do we drive to be more engaged employees that are high performing? The last point is around value creation across all stakeholders. So we are focused on profitable and sustainable growth organically as well as through M&A. And we talk about the M&A piece particularly now because with our strong cash position as well as a very strong balance sheet, we are now back in a position for us to even consider this as a topic for us. But the reality is, while we've had strong cash flow, we have gotten the balance sheet in great shape, the reality is that our growth rates have been a challenge for us. And so the biggest value driver, we believe, is growth reacceleration. You're going to hear from the regional leaders over the course of the next several hours and from product as well in terms of what are the drivers to reaccelerating organic growth. Now what I've got up here, these 4 themes are not new to Sinch. So when we talk about enterprise sales expansion or enterprise expansion, we're already doing it today. When you hear us talking about self-service capabilities, we're already doing it today, but there's massive growth opportunities there. Similarly for RCS and Email, we're already doing it today. And then finally, partnership and ecosystems, large, large growth opportunity. All of this is going to get wrapped up with Thomas Heath, our Chief Strategy Officer, who will come up and give us a bit more detail in a little while about the market demands and what is driving the market. Earlier today, you saw us issue a press release around our financial targets over the midterm. And I wanted to welcome, we have several board members in the room. So thank you very much for joining us. And I know we have several online as well joining us remotely. But the Board of Directors look at long-term value creation by evaluating our free cash flow per share, right, and the increase of free cash flow per share. And the way that management executes against that and where we're focused on reaching the ambitions that we have is around both profitable organic as well as inorganic growth. You also saw today and Ola mentioned it, we mentioned some -- or we released our targets to reach the SBTi targets of net zero by 2050. When you hear our colleague, Karin, get up here, she'll talk about even kind of the midterm targets to track us to 2050. The midterm financial targets that we released orient around 3 components: so by the end of 2027, we will have grown our gross profit, our revenue or net sales as well as gross profit by 8% to 9% year-over-year by the end of 2027. And we'll talk a little bit about what that means. We also talked about or released the fact and committed to the EBITDA margins will be in the range of 12% to 14% also by the end of 2027. Now you might be saying there's a bit of a disconnect. You just told me that the CAGR is 8% to 9%, and you're committing to a 7% to 9% growth rate by the end of 2027. That is absolutely true. But what we'll demonstrate to you today as a fact that based off of our product mix, we will actually be outpacing the market growth in our product mix to achieve that 7% to 9% by the end of 2027. Our financial leverage policy that we've already preannounced, but we reiterated in today's release was with regards to our leverage. Over the course of time, our net debt to adjusted EBITDA will be less than 2.5x. And then finally, our capital allocation priorities. First is to continue to pay down debt, next is to finance acquisitions, and then we will return cash to shareholders. So let's talk about the how, how do we think about our market, how are we addressing our market? So Sinch's ambition is to pioneer the way the world communicates. This is just like our founders did back in 2008 when you founded the company, and you were solving the complexities of sending messages around the world at scale. It's just as many of the acquired companies that we have had the great honor of acquiring how all of those founders founded their companies. They were pioneering in their particular space. We are enabling brands to connect and communicate with their end customers. We're enabling them to do that at scale. And we're also enabling them to have intimate conversations and experiences with our customers. And we're doing that in an easy way, as you saw in today's video. So businesses rely on digital communication to do a few things with their customers. Well, I always talk about the customer journey. And what you see up here are several examples of the customer journey. So businesses rely on communications to keep their customers engaged, informed, safe and happy. And what you see here are different channels of communications and you see different use cases. So the first one is engaged. This is when a business is issuing a marketing campaign, as an example, and they're looking for their customer to buy something. The second is utility business -- use case. This is when they're keeping their customers informed about the product that they've purchased. We have a verification and identity use case here is the third one to keep our customers safe, and finally, a customer care use case. The reality is, is that businesses who do this really well, who know how to get the right communication to the right customer via the right channel at the right time, those are the businesses that are going to win in their space. They are the ones that are going to be creating brand loyalty with their customers, which always translates into financial gains for their company. But it's hard. There are a lot of challenges that are facing these businesses every day. So in addition to consumer demands, we're also faced with fraud across the ecosystem. Unfortunately, that's the reality that businesses live in today. And then we can't forget the fact that there are a lot of internal challenges around technical debt, lack of governance around data to name a few. The good news is, is that new technologies are here to help. So we think about it, as I mentioned, as the 3 growth drivers for the market around 3 areas: digital transformation, advanced messaging and artificial intelligence. You can see the before and after here in terms of what this means for organizations. But ultimately, what this does is it allows companies to become much more aware of who their customers are because they can leverage their data in a way that can be useful for them to be able to communicate. So we enable our customers to deliver customer experience strategies through our Customer Communications Cloud. And you'll hear Sean talk a bit about this in a moment. Now before I move on to Thomas, I want to give you just a sense of the differentiators that we have here at Sinch and that we believe differentiates us in the marketplace. Now I would I would like, though, first to say that all of these differentiators that you hear are underpinned by the financial strength of this company. So the first one that we go to market with is just the enterprise-grade infrastructure. We are at scale. We are delivering over 800 billion transactions, customer interactions on a per annum basis. I could give you lots of scaled metrics. But the reality is, is that not only do we have scale, but we deliver reliably. One use case I would give you is email as an example. We deliver 98% of all emails as opposed to the industry average of 83%. That might not mean a lot to you right here in the audience, but the reality is if you're an enterprise who's trying to market to your customer during the Christmas holidays, as an example, and only 83% of those communications get through, you've lost, right? The difference between that 83% and 98%. I'm not going to do math in public, but that's the meaning there. But -- so we're in great shape in terms of scale and capabilities here. Our product depth and breadth is also very strong. We removed the complexity as I've already started to talk about and you'll hear as a common theme, but we support all emerging technologies and channels of communication as well as, of course, the established channels of communication. And our customers are able to consume those capabilities in a flexible way via APIs, via turnkey applications or via the 500 different ecosystem partners that we are integrated with already today. And then finally, global reach with local presence. We reach every single mobile device on the planet within seconds, let that sink in. That's the globality of this business today. But we manage our customers and we manage our carrier relationships locally. What does that mean? They understand the culture, they speak the language, they understand the regulatory environment, they understand the challenges that their business are dealing with every day. So I happen to think we have a very unique proposition there in terms of our local presence. So with that, I will ask Thomas to join us here, and talk a bit more about the market.

Thank you very much, Laurinda. It's a pleasure to see you all here today. Now we operate in a large and global growth market that we call the market for digital customer communications. We size that market to USD 85 billion. And by 2029, we expect that total to have risen to USD 130 billion. That means that over the next 5 years, we foresee a compounded annual growth rate of around 8% to 9% for the market as a whole. Now our products and services they enable businesses to reach, connect and engage with their consumers wherever they are in the world on whatever communication channels best meets the task at hand. As these interactions are typically charged on a per transaction basis, that means that in terms of market size, the largest contributors are SMS messaging, voice calling and email, simply because these are the most used forms of digital communications by businesses today. But businesses don't see any particular communication channel as an end in itself. They're looking to solve business challenges. That's why they come to us. And that's why we think about demand in terms of 4 broad use case categories. Laurinda introduced these categories to you already. We think about marketing campaigns, utility messaging, customer service, identity and verification as the 4 categories of use cases that we address with our product suite. In terms of growth, we expect the largest or the highest growth rate to be in marketing and customer service. We also expect growth in utility messaging and identity, but at a lower rate. Now one of the complexities that you face when grappling with our market is how the different ecosystem participants relate to each other. Businesses come to us to engage with their customer. And as a cloud communications provider, we help them overcome the challenges of operating at scale. We advise them on best practices, and we help them overcome the many regulatory hurdles that are particular to different geographies and different communications channels. Now we rely on suppliers to connect those voice calls, deliver those messages and terminate those emails or deliver those emails. These suppliers to us control the last mile to the consumers. The largest category here is telecom operators who charges fees to terminate messages and place voice calls. But this category also includes alternative ecosystems, messaging apps like WhatsApp, where we pay service fees to Meta to terminate traffic. Now in addition to servicing businesses directly, we also have a significant indirect go-to-market, where we help and serve businesses through resellers and intermediaries. These can be a large tech platforms like the world's leading CRM companies. After all, your CRM, that's where you have all your customer data. So it's a pretty natural starting point if you want to communicate with your customers. We're available within those platforms, built in or in a marketplace so that businesses can get going easily and scale their communications. We also have a broad set of other intermediaries. We have niche providers servicing a geography or a particular industry vertical. Think of the example when you book a restaurant table. You go to a restaurant online, you click to book a table, you choose a date, at some point in that customer journey, you get a confirmation by email and perhaps text, at a later point, perhaps a reminder. It doesn't really make sense for that individual restaurant to have a direct relationship with a cloud communications provider like Sinch. It's easier for them to leverage the built-in functionality within that restaurant technology platform. So we power other software vendors who serve businesses. These are all, from our point of view, resellers, a way to reach the market with our communications products. So let's now have a look at how this business spend is captured by these different participants in our ecosystem. Now cloud communications providers like Sinch, we, in aggregate, capture around 20% of the total spend of that $85 billion that businesses spend on digital customer communications. This is what you see marked in blue on the chart to the left. Our resellers capture an additional $12 billion and our suppliers a full $57 billion. This means that in terms of market share, you can really look at the industry from 2 different perspectives. You can compare our overall revenues to the $85 billion spend of businesses, and you will find that we have a 3% overall market share or you can look at a more narrow definition only at the blue bit, the $16 billion and conclude that we have a 6% market share when you set our gross profit in relation to that number. However you measure, you will conclude that Sinch is the world's second largest cloud communications provider. We are a global leader in a fragmented industry. Lastly, a few words about the varied growth rates with -- between our different products. Our API platforms and applications target businesses. Here, we see growth tailwinds from digital transformation, advanced messaging and artificial intelligence. These products contribute 80%, 4/5 of our gross profit, and we manage them for growth. We also have a product offering that we call our network connectivity products, very profitable, highly cash-generative products that target telecom operators and wholesale voice buyers. Since this market is flat or even declining, we manage it for cash. Over time, of course, this will have a reduced share of our overall earnings mix, but until then, it has a negative dilution on our overall growth rates. With those remarks about the market, Laurinda, back to you.

Thank you. Okay. Thanks so much, Thomas. All right. So our second theme here is around transformation, and I wanted to share with you the why first. We started our journey in 2008 and since then have done a tremendous amount of acquisitions. Again, we started off solving the global needs from a messaging standpoint at scale. And as the customer demand has changed dramatically, the need for multichannel communications and acquiring those assets became very evident. And so the business has done an amazing job at pulling together these capabilities so that we can offer a Sinch portfolio to customers as they are trying to provide these engagement models and these experiences to their customers. There's strength in these acquisitions, say that 3x. There's strength in these acquisitions. And what I mean by that is that they have contributed to this company, both strategically as well as financially, and they've given us a tremendous capability, like I said, to offer up to our customers. But I started off today by saying that the market has changed, and I've given you a little bit of insight into why that is true and the fact that Sinch must change. These acquisitions have created a little bit of complexity for us, shall I say. So we evaluated what we needed to do inside of the organization. We started by an evaluation of 3 areas. The first is the customer. Who are our customers? What was the experience we were delivering both to customers as well as to developers? Are they buying locally? Are they buying globally? Are they buying direct versus indirect? Really, what are the preferences of the customers? What are they saying to us? We pivoted to a go-to-market transformation. I said this is how we deliver value to our customers at the end of the day. And it also allowed us to focus in on customer segments because different customer segments buy in different ways. And so we didn't have that structure prior. Ultimately, and you will, by the way, hear from the markets in terms of what this means to them in each of their different regions. But ultimately, the North Star for our go-to-market transformation is to unlock the power of the acquisitions that we've done over the last several years, in particular, and to create a unified go-to-market strategy that is much more customer segment specific. The next evaluation that we did was around the market. Who is the competition? What is happening with regards to technology, right, to name a few. And we started with our product integration work. I won't spend a lot of time here because Sean and Robert will do a great job doing that for us. But the idea here is to be able to be able to create a Sinch experience, a unified experience for our customers to consume all of the capabilities that they need to service their business. And finally, the organization. We evaluated how we restructured, how we were leveraging our talent, what was our technology stack like, what was the landscape as it relates to both technology and process? And we came up with our operational excellence pillar within our transformation journey here. This is about leveraging talent across the entire company to leverage talent from each of the acquisitions and to create a platform so that we can get efficient, more efficient, more effective in what we do, and to be in -- or create an environment that enables our employees rather to do their work well, right? So in order to deliver on this transformation, we changed the operating model effective January 1. We moved from a business unit structure to a global functional structure that has 3 specific regions that are much more local to their customers. There are 4 design principles as we put this together. The first was to be customer-centric or customer first. The second was to have distributed decision-making. The third was around leveraging the global scale and efficiency of a global function. And finally, to have distributed P&L organizations and ownerships. So the 3 regions, think of them in terms of our commercial-facing teams, right? These are the people that are dealing day in and day out with our customers and meeting those needs across sales and marketing and engineering. The next layers around marketing, product and technology, think about them in terms of the design, build and enablement of the regions, right? They live to service our customers ultimately. And then below, you see our global functions that are more domain experts that support the entirety of the company. When we moved into this structure, we had initially -- well, we intended to and executed against an initial set of cost savings because there was a lot of duplication that existed within the organization. And when we brought them together, we were able to eliminate some of that duplication. So our transformation journey is multiyear. And I've shown versions of this slide over the past year. There were 3 factors from a financial standpoint. The first was to invest over the next several years around our IT infrastructure to modernize our environment. And we said we would invest SEK 350 million in terms of the next 3 years to do that. We also said that in 2024 alone, we would incur about SEK 300 million in restructuring and integration costs. We're on pace for that. And finally, we said and committed to gross savings of SEK 300 million in 2024. We said we would deliver that by the end of 2024. We already delivered that by the end of third quarter. And we also said that we would reinvest those savings into the business to focus in on growth. Now the returns do follow the investment. And the good news is with the go-to-market transformation, we can already see the leading indicators that will point to positive growth. We see it in terms of pipeline, in terms of won orders, in terms of average deal size. Again, the regions will go through lots of stats in their space. So let me move on and conclude my message here, at least this part of my message, which is around value creation. This is the agenda, right? It's about growth reacceleration across the 4 themes that I talked about, enterprise expansion, self-serve, partnerships and ecosystems, email and RCS. These are all areas that we're already strong in, and we see large growth opportunities there. EBITDA margin expansion is enabled effectively by our operational excellence. When we do operational excellence when we are able to take those costs out of the business, of course, margins will expand. And finally, you'll continue to see us generate high cash and cash conversion. Roshan will go much deeper in all of these areas in his section later this afternoon. I'll leave you with reiterating our financial commitments and our financial targets. Today is not just about the headline of giving you these targets, today is about making sure that you understand what the journey is to get from where we are today to this ambition of these financial targets. And I'm very excited, and thank you again for joining us for such a long period of time. I know 4 or 5 hours is a big commitment for all of you. So thank you very much. And I'd like to hand it back over to, Ola.

Thanks. So I assume by now you as an investor, as an analyst and as a representative of the media, we start wondering, when do I get my hands on these slides. They will be posted on our website after this event, and the recordings from this event will be made available tomorrow, just so you know. And remember, those of you who are with us online, please post questions, so we can take them later for Laurinda and for Sean. Sean is our next speaker, but first, watch this video. [Presentation]

Okay. What you just saw was a brief video highlighting how Sinch's Customer Communications Cloud helps manage the complexities of modern digital communications. I'm Sean O'Neal, I'm the Chief Product Officer here at Sinch. And I'm going to spend the next 45 minutes explaining how we've simplified this incredibly complex process for our customers. First, we're going to discuss the Sinch product stack, what we call the Customer Communications Cloud. And then we'll highlight 2 key investment areas, namely RCS and our advancements in AI. But before we do that, it is important for me to mention our network connectivity offering, which is geared towards telecom operators. I'm going to spend a few minutes on this topic before I talk about our core offerings in our API and applications categories. So within the Connect product category, we offer services that help communication service providers, or CSPs, along with carriers to connect into our global communications network directly. Our key offerings include our Voice Interconnect offering, which is sold to mobile operators in North America. We also power 911 calling in the U.S., which you'll hear more about later. And while the majority of our business relates to A2P messaging, which stands for application to person, we do also offer a global person-to-person or P2P messaging interconnect service for SMS and MMS reach into more than 1,000 operators stemming actually from our SDI and Inteliquent acquisitions. And lastly, we also offer a global operator value-added service through our operator software offering, covering SMS and MMS, policy and charging and security and solutions. Next, I'd like to talk about our cloud communications offering. So as you heard from Laurinda, Sinch helps businesses with 4 main use cases today. First, we empower marketing teams to create engaging marketing campaigns. We also support IT and operations teams to send vital account service or event alerts and notifications. We help IT and security teams secure customer identities and verify their credentials. We enable customer support teams to provide personalized pre- and post-sales customer service. Now we do a lot here in solving these unique challenges for businesses across the globe and across all of these use cases is not easy. And that's where Sinch comes in. We make managing the complexities of the modern digital communications process, easy. We're enabling businesses to reach and engage with their customers on their own terms. Our robust and scalable Customer Communications Cloud offers a wide range of messaging, email and voice solutions. We offer 2 main direct pathways to help businesses reach their customers, both of which are built upon our enterprise-grade infrastructure that Laurinda talked about earlier. Since we have end-to-end control across all of these pathways with direct carrier connections, inbox provider relationships as well as direct relationships with the mobile messaging applications, we can deliver unprecedented quality and scalability at lower price than any other digital communications provider in the market. Now for customers who value and need flexibility and customization, we offer a robust suite of email, voice and verification APIs. And these offerings are designed for scale, and they cater to teams and businesses looking to build great communications products of their own. For customers looking for a turnkey out-of-the-box solution, we offer a Software-as-a-Service application, which is purpose-built for businesses such as marketing or customer care teams, and delivering digital communications very, very quickly. These focus on ease of use, enabling nontechnical users to deliver seamless customer experiences through our messaging and Email marketing applications, contact center solutions and our chatbot builder. From an indirect purchase pathway, customers can access our APIs and applications through our integrations across a robust ecosystem of over 500 partners, which include native integrations, marketplaces such as HubSpot and Salesforce as well as strategic partnerships with implementation partners, affiliates and resellers who expand our go-to-market motions. All of these drive real customer outcomes for businesses. So marketing campaigns help businesses capture attention, spark interest and drive engagement. Utility messages such as alerts or notifications, ensure that customers receive important, timely information that helps them stay up to date and make quick informed decisions. And identity and verification management, such as sending onetime pins or multifactor authentication, is protecting customer's sensitive information and secures their accounts. And lastly, personalized pre- and post-sales customer communications foster positive experience and improve customer loyalty. So how do we continue to deliver on this promise? Well, as we create our 2- to 5-year product road maps, we look at what customers want and what they need and where we expect to see the digital communications industry to be headed. We continuously deepen our value to both customers and partners, and we drive focus within our product organization through our 4 core strategic themes -- excuse me, 5 core strategic themes. All of these themes are underpinned by a deep focus on AI. So first and foremost, in line with our product unification goal, we're working towards a unified platform experience that makes it even easier for customers to purchase multiple products from us without a lot of overhead and complexity. This means customers can seamlessly traverse between our products and offerings to create the solution for their unique needs. And while we strive to bring together these products in a seamless experience, not all of the products connect by design and based on customer need. Second, we're investing deeply in creating rich conversational experiences across more established channels like WhatsApp, as well as newer offerings like RCS, which create conversational experiences for marketing and customer care use cases. Third, our investments in a frictionless product, which includes both our self-serve and product-led growth investments as well as a deep focus on user experience overall to drive product usage and retention. Fourth, we're delivering actionable intelligence to our customers by uncovering new ways to harness our data and leverage the trillions of communications interactions that we've generated over the years. And lastly, maintaining industry leadership and doubling down on innovation, including increased investments in automation and generative AI. Now throughout the rest of this presentation, I will go deeper into our product suite and these strategic areas of focus. Moving on to our next product category, our API platform. So developers and technical teams leverage Sinch's API platform to build their own communication solutions, applications and experiences. However, before we get into the specifics, I want to make sure that everyone understands what an API is. Now some of you are very familiar, so please bear with me. But for those of you who are not maybe as familiar with what an API is, API stands for application programming interface. And it's like a bridge or a translator that allows different software applications to communicate with each other. So when one software application calls another using an API, the other responds based on what's requested. So APIs act as kind of a translator, allowing for real-time communications between these applications, so sort of a messenger that helps these different apps and websites talk to each other. For instance, when you use your weather app, the app calls a weather service through an API. The weather app then sends a request for today's weather forecast. The weather service responds by sending back the weather forecast through the API and then the app displays it on your screen. Now the actual weather app on your phone doesn't hold all of the weather information. Instead, it fetches it from the weather service using an API. And this is how APIs save money and make it more efficient for different software applications to communicate reliably and smoothly. So APIs have many, many uses. They're crucial to our digital world, and they are the backbone of how so many digital software applications run today and how they interact so seamlessly. Now millions of developers and enterprises leverage Sinch's API platform in this way to build their own communications applications. They're leveraging nearly 2 dozen channels that we offer, including core messaging, advanced messaging, numbers and connectivity, programmatic voice and video, verification and email. Our APIs are backed by a number of software developer kits, supporting multiple languages as well as a robust developer community that allows customers to self-serve our thousands of knowledge articles and FAQs. Sinch makes it very easy to get started with our communications APIs. We're offering free trials and services, upfront pricing, a powerful chatbot AI, which is an assistant basically to help you get up and running and also offers access to forums to engage with other developers. And thanks to our global coverage, scalable platform and back-end infrastructure, we offer millions of developers across the globe, at organizations of all sizes, the ability to build their own communication services. Now with that, let me walk you through one of our main API offerings, starting with our messaging APIs. So this is deeply rooted in the history of Sinch. We are a global leader in messaging solutions. In fact, we deliver over 250 billion messages per year. The foundation of our messaging offering is the Sinch SMS super network, through which we maintain over 600 direct carrier connections globally, and this enables us to remove middlemen, drive higher and faster SMS delivery rates at a lower cost and with higher security and compliance. These direct connections ensure that we're not offering just the best solutions to our customers, but also that we stay ahead of the curve as it relates to new telco-based innovations such as RCS. We've built and refined the super network over the last 15 years, and we're trusted by many of the world's largest telcos, big data, big tech and cloud service providers. Our comprehensive offering includes and numbering -- analyzing and monitoring numbering, detecting latency, validating numbers and numerous routing backup options. And underpinning all of this is our deep focus on anti-fraud and security. As a matter of fact, we lead the industry in anti-fraud, smishing detection and prevention technologies. Beyond our core SMS offering, Sinch also enables businesses to connect to 13 different mobile messaging channels through 1 single API, supporting both one-way and 2-way messaging. Now why is this important? Well, while SMS has the global reach, and it is the most reliable messaging channel, customer channel preferences actually depend on many factors, and the fragmented messaging world is just too complex for businesses to manage alone. So the map you see here showcases the most popular mobile messaging apps or over-the-top messaging channels by country. This diversity means that businesses need to tailor their messaging approach based on their preferred platforms in each market. And often, one messaging channel is not enough to cover all use cases, verticals and customer segments. And all of those preferences can actually be different even in the same country. For example, consumers in Germany may prefer WhatsApp for customer support. And then Instagram message is to learn more about new products, while timely onetime pass codes may be sent via SMS. A bank in Germany may prefer to use SMS for all of its use cases, whereas a retailer may prefer WhatsApp for everything. So managing all of these integrations and this complexity takes a lot of time. Sinch helps businesses tackle these challenges with our conversation API, which allows businesses to leverage 3 different messaging channels at scale through 1 API. And as a trusted partner to the major chat application providers themselves, including Meta, Apple and Tencent, Sinch also brings expertise to guide our customers in choosing the right channels to meet their goals. All of these benefits combined allow us to serve our global customers in a fragmented messaging market. Email, on the other hand, has a very different set of complexities that businesses need to manage to make sure that their content gets averted. It involves addressing multiple technical and logistical challenges to ensure that emails are sent efficiently, securely and reach the inbox. For example, authentication protocols, this is where Internet service providers or ISPs have stringent filters and rely on various authentication standards to verify that emails are actually being sent from legitimate sources. And failure to meet these protocols can result in emails being flagged as suspicious or being blocked altogether. Sender reputation, which is where ISPs are monitoring things like bounce rates, spams and complaints, recipient engagement or poor reputation, right? These are the things that can actually result in emails being diverted into spam folders. And so maintaining a good reputation is an ongoing effort, requires constant monitoring, high engagement and you've got to be managing your bounce rates. Mailbox providers, right, each of these ISPs, whether it be Gmail, Yahoo! or Outlook. They actually all have their own unique filtering criteria. So what performs well in 1 provider may be flagged by another. The variability here demands continuous testing and adjustment creating even more complexity for large senders. And lastly, businesses need to understand that delivery best practices include customer list management. Without regular list cleaning, large senders risk emails ending in spam traps, if you're hitting in active addresses, things like this can harm reputation and even lead to black listing. So keeping a clean engaged list is an important element to maintaining strong deliverability. And navigating these challenges requires not just technical expertise, but a comprehensive platform that manages deliverability from end to end. So Sinch's email API platform is engineered for high-performance, high-volume enterprise-grade email delivery, leveraging robust infrastructure, strong relationships with the email providers and a purpose-built in-house delivery suite. The core strengths enable us to optimize email delivery routing so customers can consistently reach the inbox rather than the spam folder. With advanced features like inbox placement testing, email health score, spam trap and block list monitoring, we provide these tools to customers so they can maximize deliverability. And as a cloud-based solution, our platform ensures rapid high-volume throughput handling up to 1.2 million requests per minute. We offer 99% attempted uptime and delivery of 15 million messages within the first 5 minutes of sending, meeting the highest demands of large-scale mission-critical communications. Our industry-leading reporting tracks 40 essential email signals offering insights across 10 different dimensions, providing the visibility, the speed and the intelligence necessary to optimal inbox placement. Now with the global reach supported by our robust compliance and security, we're proactively addressing deliverability issues. We're giving customers a competitive edge in reaching their audiences. Supported by best-in-class delivery rates of 98% compared to the industry average of 83% and dedicated expert support, our platform delivers unparalleled reliability, flexibility and supports diverse use cases to drive meaningful outcomes for our customers. Moving on to our voice platform. So we acquired Inteliquent 3 years ago, which actually made Sinch the largest independent voice network in the United States. Inteliquent is one of the major backbones of any voice calling provider in the U.S. and is also trusted by the major U.S. mobile operators to power their peer-to-peer calling. As you may have seen last month, we recently completed and launched an enterprise-focused voice product called Elastic SIP. Which includes number porting capabilities and helps customers start utilizing Sinch for their voice communications. So now Sinch customers can take advantage of the full benefit of an integrated number and voice product offering within the full suite of APIs and SDKs, directly integrated side-by-side with our messaging offering and also connected directly through the voice network that we own and operate. So customers can move their existing traffic to us or they can quickly find and select any one of our 160 million numbers and take advantage of our full voice portfolio including programmable voice Elastic SIP trunk in-app voice and video calling and more. Finally, Sinch's verification API is helping businesses around the world verify their users' phone numbers for multifactor authentication. Sinch is the only cloud communications provider who can do all 4 major forms of phone number verification, including messaging verification over SMS or WhatsApp, through phone call verification, where we read a pin code to a user who can then enter that code into their app, through data verification, where we automatically and instantaneously verify a user without their data needing to be input, and finally, through flash calling where we automatically verify a number without any action on the users' part. So to wrap up the APIs section, we prepared a short demo video. We've been working towards seamlessly integrating our SMS and our email API platforms together. This is an example of how we're doing so. So let's take a look. [Presentation]

Okay, moving on to our applications. So as I mentioned earlier, we offer a suite of software-as-a-service products, which are purpose built for business users, such as marketing and customer support teams to help to get up and running within minutes to deliver their digital communications. Over 175,000 small, medium and large businesses are already relying on Sinch's applications to execute their multichannel communications and get access to rich analytics. The focus of our applications is on ease of use, enabling nontechnical users to deliver seamless customer experiences. Our email and messaging platforms allow marketing and customer care teams to easily create engaging experiences for any use case, whether it be promotional campaigns or customer feedback engagements. Our contact center solution brings calls, email, webchat, video and messaging all into one interface. And our chatbot builder helps customer support teams build personalized support experiences. Now as part of our strategic initiative to deliver a unified platform experience and provide a frictionless product, we are currently in the process of combining various messaging and email platforms into one software application called Sinch Engage. And as a first step, we're creating a combined messaging platform, leveraging the strengths of previous acquisitions of MessageMedia and MessengerPeople, with email and other channels on the road map. Additionally, we're building AI-powered features such as content suggestions as well as advanced chatbot that drives conversations within the platform across messaging, programmable voice and more. And again, the new Sinch Engage is purpose-built for marketing teams at medium to large businesses who are looking for an easy-to-use, out-of-the-box solution where they can be self-sufficient while taking advantage of the latest technologies such as RCS, WhatsApp and others. So let's take a look at what Sinch Engage looks like today for our customers in Europe. [Presentation]

Okay. The third and final pathway that customers can use to leverage our product suite is our partner ecosystem, which consists of over 500 partners that we've cultivated very, very carefully. Our ecosystem growth strategy involves creating a collaborative network of partners, developers and customers as well as third-party service providers to enhance and extend our core products capabilities. By fostering integrations and partnerships such as with app developers, integration partners and solutions consultants, we expand our value proposition, reaching new markets and new customer segments. The strategy accelerates growth by leveraging the collaborative innovation of the ecosystem itself, offering customers a more comprehensive and customizable solution that meets the diverse needs while driving mutual success for all participants. Our partnerships fall into 2 general categories: technology partners and value-added partners. The Sinch portfolio includes technology partnerships such as Salesforce, Adobe, HubSpot, Zoho, Emarsys and SAP that allow us to codesign innovative solutions that deliver great value to our mutual customers. We focus on these strategic relationships where feature depth and seamless user experience across the platform is paramount. But we're not just partnering in these ecosystems. We're actively developing joint solutions together with our ecosystem partners for a mutually beneficial outcome. And our value-add partners include resellers, affiliates, implementation partners who all provide Sinch with access to new markets and customers. They expand our go-to-market motion and they help us fuel our growth ambitions. These are also mutually beneficial, select partnerships where the partners gain value by offering our world-class solutions to their customer base. So now let's take a look at some of the marketplace integrations that we've built for our new product, Sinch Engage. [Presentation]

Okay. With that, I would like to invite up to the stage Robert Gerstmann, who is Sinch's Co-Founder and Chief Evangelist, who is going to talk to us a little bit more about the RCS opportunity.

All right. Thank you, Sean. As said, my name is Robert Gerstmann. I'm one of 6 co-founders of Sinch. Super happy to be presenting for you here today. As our Chief Evangelist, I spend a lot of time with Apple, Google, Meta, the mobile operators trying to figure out where the market is going and how Sinch, we should position ourselves to be successful in the years to come. I've also been in the business SMS space for 22 years. So I have to say I'm quite happy to be able to speak about something new. And that new thing is RCS. I also have to say, as a founder, I'm quite proud to be here at our first Capital Markets Day to speak to you all. So again, thanks for coming. We're going to kick things off with a little video. So without further ado, here we go. [Presentation]

All right. There we go. RCS messaging. So the business messaging landscape is rapidly evolving. I would say, having been here for a long time, this is probably the biggest step change since became mainstream, I think, maybe 15 years ago. So what does RCS offer? I think 3 things. First of all, you have trust, probably the single most important thing when it comes to customer communications. So RCS offers branded messaging. So every message will have the company logo, colors, and there's a company information page as opposed to the plain text you get today on SMS. Also on the trust item, we have a verified sender. So every company that wants to leverage RCS as a channel need to be verified by your mobile operator. So this means that the risk of phishing or impersonation is much, much lower when brands use RCS versus SMS. The second factor would be consumer -- customer experience. So with RCS, you can send videos and you have interactivity out of the box, so basically turning what's today a notification into a conversation between the brand and the consumer, which enables brands to create a totally different customer experience than they can on SMS today. Last but not least, efficiency. So RCS introduces read receipts. So a marketeer will know not just that the message got delivered to your handset, but that you actually read the message and then they can act accordingly to maximize ROI. Also, the interactive nature of RCS, combined with AI-powered chatbots, means that you open up customer care use cases for messaging, and you can offload your contact centers and hence, save a lot of OpEx. Moving on, let's have a look at the RCS ecosystem, starting with Google. So what's Google's role here? So Google provides the tech stack as a service to mobile operators. So quite a new role. We're not familiar to see Google there. This is what Ericsson usually does, right? What Google also does is they provide the Android handset client to allow consumers to send and receive RCS messages in the same native inbox as they do SMS today. Second, we have Apple. Apple provides the handset client on iPhones. And that's, in all honesty, as far as Apple's engagement with RCS goes. They enable it on their phones, but it's not an Apple service. Mobile operators, well, they own the commercial, legal and operational aspects of RCS. And most of them, pretty much everyone outside China, rely on Google as their back-end provider, and they pay a revenue share of the RCS revenues to Google for the benefit here. And this also means that Sinch, we require a separate relationship with each mobile operator just like we do on SMS despite Google providing the technical infrastructure, but the commercial infrastructure is the same as in the SMS world. What do we do? We do what we always do. We provide access to RCS for our enterprise customers through our APIs and turnkey software applications. And we then charge essentially a markup on top of whatever the mobile operators charge us. So it's a very similar business model that we have had in messaging for the past 20 years. Now -- so it's a fundamental shift of the messaging industry. SMS has remained supreme for the past 20 years or so, and this doesn't go overnight, right? It's quite involved. So for RCS to live up to its promise, every mobile operator needs to be RCS enabled. And to be that they need to sign a contract with Google to essentially get hold of that RCS tech stack. And then on top of that, to activate iPhone, they need to integrate with Apple or do integration testing, and that then lives up their iPhone constituents. Once the mobile operators have done what they need to do, we need the enterprises to adopt the service. Looking out through the world, over the last couple of years, we've had OTT services, such as WhatsApp and various East Asian channels become quite strong in business messaging. So I would say in markets like Mexico, Brazil, India and East Asia, I think the jury is out. What will the market shares be between the mobile operators and the OTTs. Whereas in the West, North America, Western Europe, Australia, we believe RCS will come out on top in this kind of battle between the mobile operators and the OTTs. So we remain bullish on the RCS opportunity but also realistic in kind of navigating the complexities here of this multiyear rollout, which we're kind of looking at. All right. Business models. Price levels, as I said, are owned by the mobile operator. Google recommends both the structure, basic single conversational here, and level because they want to create a cohesive kind of environment across the globe for RCS. It's a very messy for brands if it's super different in different markets. We then, as I said, charge a margin on top here for each of the 3 categories here. Basic RCS is 160 characters text. It's essentially an SMS, but with a company logo, colors and the company information page. Price is same as SMS to avoid creating a barrier of transition. Singular RCS then adds rich media and long messages and conversational provides unlimited messaging within a 24-hour window. The recommended price here is 2x that of SMS. And this really unlocks new use cases, kind of conversational e-commerce, conversational care and also drives the need for other Sinch products like our Sinch Engage, which Sean was showing us AI, Contact Pro, professional services, et cetera. We believe that we have the right to win here, one, because our huge installed base of SMS customers where all those SMS acquisitions that we did over the years are really paying off here; two, our long experience. We launched our first RCS API back in 2017 already, and our strong relationships with mobile operators and Google. Last but not least, how are we providing RCS to our customers. First of all, RCS upscale. You heard it in the video. Customer sends us a text message. We convert it on the back end to RCS without the brand having to do anything. Secondly, conversation API. This is where we offer all the various messaging channels in one API and the customer can take advantage of the full feature set of RCS. And last, but not least, we've embedded RCS into our campaign tools and chatbot solutions for the customers who don't really have an RCS stack ready to go. We mentioned it before. There's a demo station out there for anyone wanting to chat more about RCS. I will be there. And with that, I'd like to thank you all for listening and hand it back to Sean.

Thank you, Robert. You can really feel the passion. We all have it for RCS. If you haven't heard it all day long, we believe RCS means the renaissance of the messaging industry. So it's a big deal, and we're -- we've got a nice first-mover advantage. So I'm told we're a couple of minutes behind, so I'm going to speed up through this last section. I do want to spend at least just a moment on AI because, as I already mentioned several times, this is a big area of focus for us. So we believe AI will unlock productivity gains. It's already doing that for us and is transforming digital communications based on 3 key advancements. First, we've actually seen a step change in the speed that AI can help us work. Many customers are seeing AI accelerate tasks for them and our teams are seeing tasks being accelerated exponentially rather than just incrementally to all types of AI today that are being used are improving quality standards, whether it be things like finding patterns in traffic or data or generating new campaigns on our applications. And lastly, modern AI is built to scale, and many of the systems are very good at scaling high-quality experiences. So AI is not new to Sinch. We've been on this journey for a very long time. As a matter of fact, for as long as we've been an organization, we've been building what we call our intelligence layer. Over the years, we've developed deep expertise in predictive AI, which is now a pretty mature category of AI driven by machine learning that detects patterns and anomalies and is constantly evolving as new data is added. And we've also pioneered natural language processing in this space, which enables us to analyze and interpret much deeper nuances around text messages and even images. So today, we're actually diving pretty deep into the emergent field of generative AI, which is, of course, powered by large language models or LLMs to accelerate and improve the quality of digital content creation. So whether it be writing, creating new campaigns or creating interactive customer experiences. So this combination of AI capabilities powers today and is commercialized through our applications and our APIs. So we are investing heavily in AI, but we're also investing responsibly because we do believe that AI is fundamentally transforming how businesses and customers interact. So let's have a quick look at a few novel ways in which we are already transforming in the space. So many of our customers who are using services like SMS for things like verification use cases, unfortunately, there has been the rise of a very sophisticated attack called artificially inflated traffic, which basically inflates traffic for the purposes of fraudulent billing. Has serious effects on the cost of our customers and, of course, delivers a pretty poor experience. And so we are now pointing machine learning at this and helping to solve this problem at a very, very large scale. Across our apps and APIs, we're accelerating agents, meaning customer service agents, and we're basically protecting them with AI against things like offensive content. So we actually have the ability through our smart conversations AI to automatically mask offensive and sensitive message content and even transform text and voice into more acceptable content. So within our customer support application, which is our contact center, we also now have an agent-based copilot that will suggest answers from a knowledge base that can be easily grabbed and used. Within our email and our messaging applications, we've been leveraging AI-based copy generation to help marketers and customer support teams create campaigns faster while improving their accuracy and their consistency. And lastly, interactive voice response or IVR trees. These can be very, very difficult to establish if you've ever seen an IVR tree or any form of chatbot sort of logic gets set up can be very difficult to do, requires a lot of technical expertise, and you need a know-how of how to create these flows. So now with a simple IVR diagram, you can drop it right into our flow builder, and within seconds, a first version of the scaffolding is ready for them, literally taking what would take hours months ago, not years ago, but months ago and compressing that into a process that takes seconds. So when we talk about step changes in the speed at which AI is helping our customers transform their businesses, this is a great example and truly exponential improvements. This actual example, by the way, the flow builder is something that you can see live and in the flesh at the demo stations. So please make sure you stop by and see how you can actually set these things up so quickly. So as I close out today, I just want to leave you with 4 key takeaways. First, simplifying the complexities of modern digital communications through our comprehensive product offering and our enterprise-grade infrastructure. Second, long-standing history in messaging and deep relationships with the likes of Google and carriers across the globe have put Sinch in the best position to come out on top of this new market shift. We're leading the way when it comes to integrating AI at Sinch from both an internal standpoint and within our product road map, helping companies navigate how to integrate AI into their own communication strategies. And lastly, our strategic partnerships and ecosystems ensure that we're deeply embedded into the platforms and systems that our customers are already using, making us sticky and hard to replace. So thank you all for joining us today. I trust you were able to get a glimpse into how Sinch is pioneering the way the world communicates.

Okay, Sean. Thank you very much. And now if I could have the -- all the speakers from the first section on stage, Robert, Thomas, Laurinda, you will see me.

I see you.

You see me good stuff. Do we have the microphones? Microphone 1, Microphone 2, there will be questions in here. And please, when you ask a question, your name company work for. And please, there will be lots of questions, so just 1 question at a time, and we'll see how many we manage. And please continue to post questions online. So should we start with [Ramil ].

[ Ramil Koria ], Danske Bank. I'll start off by thanking you for the presentations. And then secondly, apologizing because I didn't really understand why you're going to grow below the market. I was hoping -- perhaps I'm a bit greedy, but I was hoping that you dissect your own revenues a little bit more across the use cases and maybe across the channels to provide us a very glimpse of why you're supposed to grow below the market.

Sure. I'll start with that, Ramil. Thank you for the question. And then Thomas, you can help. And we do have more in the agenda today to help break that down for you for sure. First of all, as you know, the product mix itself, right? So particularly as you look at the network connectivity aspect of our product mix, that's 20% of the gross profit today. that's flat to negative, right? It certainly has been negative for us over the past 3 quarters, as you know. So that in of itself will grow above market. That product line is not growing that 8% to 9% CAGR that we talked about earlier. The API and the application components of our business is 80% of today's gross profit. In order for us to grow with the 7% to 9% in aggregate, those 2 aspects or those 2 categories are going to grow well beyond that. Thomas, anything?

No, I think that's correct, it's primarily related to the current product mix, which will change over time.

Okay. We have questions in the back. Mo, you can start.

It's Mohammed Moawalla from Goldman Sachs. Laurinda, you talked a lot about execution is one of the big levers around the kind of the improvement in the organic gross profit growth. The market growth numbers are what they are. Having now been there 19 months, where are the biggest kind of levers in your view that you can kind of drive and what are the risks around that to deliver that sort of progressive acceleration to the growth you expect?

Yes. I think to your point, Mo, thanks for the question. The value creation lever for us is certainly to return to growth. And we do see it across those 4 themes that I talked about. These are aspects, and again, you'll hear a bit more about that from Roshan later. These are areas that we actually are already having success. And what we've been doing over the past year is to sort out the areas that have that growth potential and reallocating and shifting resources and focus more towards those higher growth areas. So you'll see some of that success in Roshan's area later today. In terms of execution, quite frankly, it's about continuing to drive sales in the regions and to build on the customer relationships that we already have and acquiring new. Again, you'll hear a lot of those proof points as well as the traction that we're seeing there. As far as risks are concerned, we're going through a lot of change right now. And we know that, that is hard for any organization. And so we have seen a bit of slowness in the middle of the year. And as I say to the organization, change is hard in a couple of different vectors, right? When you start it, it's an actual -- you're fearful of it. It creates a lot of concern and consternation within the organization. Then it gets messy in the middle because people are still trying to sort things out, they're confused. But then when it's done, it's beautiful, right? There's absolutely a reason for doing it. And then the execution is what we're looking for.

Okay. I have a question from the online community. It's from Joseph. Will any acquired growth come on top of these new communicated financial goals?

Yes. So Joseph, the financial goals themselves are organic. And so anything inorganic will come on top of that.

Okay. I think Erik was next.

Yes. Erik Lindholm-Rojestal -- for Sean, a very impressive presentation. It's -- my challenge is to really understand what good looks like. If you put through 470 billion emails through the API and close to 10 billion of those are not delivered. I know -- I can't really understand if that's better than anybody else or to put these -- all these things into perspective. And is this the 9 out of 10 experience for your customers? Is it 7 out of 10? I mean, it's really hard for us with all the -- even with all this information to really know what good looks like.

You want me to take it?

Yes, go ahead.

It's a great question. And there's a lot of stats and each channel has a different set of, let's call it, delivery or deliverability rates and standards. I've spent a long time actually in email and 2 things. One is we report a 98% delivery rate on average, which, by itself, right, have a context, if that's good or bad. The industry average is closer to 83%, 85%. So we actually do have that as a benchmark. We're very proud of that. And just when you think about the volume of emails coming into everyone's inbox on a daily basis from every possible sender, not just your friends and families, but everything you've ever subscribed to, every company you're a customer of, all the marketers that want you to become a customer? And have you've ever gone into that sort of spam folder right, seeing what's actually being filtered just on the front end by those ISPs, there's many, many more that never even make it that far. So 98% is about the highest that the industry has seen.

Okay. I have another question from the online. Hello. Do network APIs play a role in the company's product road map? What are the company's plans in the near term. This is from [ Raul ].

You should take that?

Happy to.

You want to go?

I'll have a first go. So network APIs is set of capabilities that mobile operators are working to make available to us as cloud communication providers and to our customers the ultimately. There are parts of this, which are very interesting to us and which we're already leveraging today. You heard references to data verification, which is a new and very secure, seamless way to verify customer identity and customer credential that's just vastly superior to what otherwise exists. Of course, we jump at that opportunity. And we're engaging also with the various industry bodies for those areas which we think are relevant. Then there are -- there's a road map of other parts of network APIs, which are probably more interesting to others. That's when it's only about technology and not so much about customer communications. You've heard us say customer commutations a lot today. So if it's in that fold, and we think this is something that can help our customers, our business customers make life better for their consumers, then of course, we'll embrace it. the more technical aspect of things are probably more relevant to others.

Okay. Thank you, Thomas. Who else? Yes. Daniel.

You have educated us for many years to look at only gross profit 7% to 9% organically ahead. Is it really reasonable to see them hand by hand over 3, 4 years ahead? And with more OTT channel communication in the future, shouldn't gross profit grow faster than net sales then?

Again, I think it's a mix. It's a mix challenge, right? So we have some of the SMS business itself. As you know, it's probably our lowest margin product out there. So we do expect to see gross profit expansion or gross margin expansion over time. But we're in the middle of shifting the organization and the mix that we sell. Any other comment, Thomas?

You also have network connectivity, which you talked about, which is also at a different margins. So there are lots of different piece parts in the mix there. But happy to follow up on this question. Roshan will cover some of this as well later today.

Okay. So should we have 1 last question for now. Remember, you can continue asking questions in the break, and we will have another Q&A session, Daniel.

Daniel Djurberg from Handelsbanken. And I also got carried away by the RCS, obviously, and with Robert talking about this. And -- but my question is, is it a risk that the model -- current model that works a little bit like the SMS model where you have the need for the CSP interaction that changes, i.e., that Google becomes sole integrator or the sole player in this field together with the CSPs.

So we don't believe that. First of all, with Apple joining RCS, they've been very clear that they need in order to support RCS, they want RCS to be done according to the GSMA standard. The GSMA standard stipulates that the mobile operator needs to be kind of the owner of the service. So Google technically could go over the top and communicate straight to your mobile inbox. This basically checks Google. The second is, obviously, Google could try to disintermediate the entire kind of CPaaS provider layer, if you so will. They have over -- since they acquired Jive in 2015, not shown an interest to do so. I mean we have quarterly steer co meetings with Google. They really have a channel go-to-market strategy. So of course, they could. But nothing in their way of behaving the last 10 years indicate that they will do. If they do, my expectation would be, and I will speculate, that they would acquire someone in our space if they really want to disintermediate the CPaaS providers.

Interesting. So that concludes the Q&A session this time, but continue the questions in the break and we'll have a Q&A session in the end. Enjoy your coffee, continue the learning experience, visit the demo stations. And see you in 25 minutes. Thank you. [Break]

Welcome back after a well-deserved break. You can tell perhaps it is our first Capital Markets Day. We have a lot we want to tell you. Now we're switching topic. We will go to our operating segments, that is the regions, and we have the regional heads here. It's Julia Fraser, Nicklas Molin and Wendy Johnstone. And first out is Julia, welcome.

Thank you, Ola. Good afternoon, everyone. My name is Julia Fraser. I'm responsible for the Americas market at Sinch. I joined the business about a year ago. And when I was thinking about joining Sinch, it was all about the exciting growth opportunity that I could see from the outside of the company looking in. Now on the inside, I'm even more excited about that growth opportunity. Pleased to be able to talk to you about some insights on our growth ambitions in this region today, our opportunities and the factors that set us apart from our competitors. Also, I'm excited to be able to showcase a few of our customers who are going to talk to us about their experience with Sinch and the problems that we solve for them. So giving you an overview of the Americas market, it's a dynamic market, and it's a significantly large market. The GDP of the countries you see shown on the map here is over $25 trillion. That's a huge number. So you can imagine all the business activity ongoing every day in every country in that market. We are very pleased and proud to support over 5,000 customers in the Americas region, and we drive over 60% of the GP today. We're around 1,600 employees in the region, not all in the go-to-market functions, some of those in the global functions that we were talking about earlier, engineering, product, et cetera. And one stat that we're incredibly proud of in this region is that, today, we serve 31 of the Fortune 50 enterprise clients. And that's the stat we are pushing hard to grow on with opportunities in our pipeline today. So going a bit deeper into this business and this region. You can see from the charts here, we have a significant dominance in our API business. Over 50% of our -- 56% of our business today is in the API category. That really shows up in our heritage with enterprise customers. I'll talk a bit more about our enterprise ambitions through the conversation this afternoon. Just under 1/3 of our business is in -- 28% actually is in network connectivity. We talked about that being a managed for cash business for us. And then we have a smaller segment of our business today in applications of 14%, that's an area of opportunity for us to expand into in the region. When we think about motion and how we capture customers, whether that's capturing incremental wallet share or capturing new customers, around 3/4 of our business today is via a direct motion, us directly talking to organizations and brands about the challenges we can solve for them, and around 1/4 of our business is through the indirect motion. We see a significant opportunity to grow our business via an indirect ecosystem and partner go-to-market opportunity. I'm going to talk a bit more about some of the stats we're seeing about our early focus over the last 12 months in that go-to-market motion. And then finally, we're sharing with you information around what verticals make up the Americas market? What kind of customers do we support? And what kinds of use cases do we support for them? So you'll see a large amount of customers sitting in the tech space, not surprising. Technology customers are often first to innovate and move fast to solve challenges. And then a large amount of our customer base is in the telco or network operator carrier space. And then we have significant position with financial services, retail and other verticals. We know we have space to expand there, driving the use cases of marketing and customer care, as Sean referenced earlier. So double-clicking a bit on to the region. It's a really -- it's a region that differs between North America and Latin America, not only in scale and size in relation to each other in our business, but also actually in how brands communicate with customers and organizations communicate between themselves and with each other. The North American market is a mature market for Sinch. 95% of the Americas region is derived -- in terms of GP is derived from the North America market. We have customers in enterprise, mid-market and SMB across those product layers that we were talking about earlier across the verticals that I mentioned. And we also have multiple ways of going to market, right, direct, indirect, self-serve. Within the North America market, there are around 1,200 employees today across all those teams I mentioned earlier. And in contrast, the Latin American market is smaller for us today and it's different. And the North America market is still dominated by SMS. The Latin American market has adopted WhatsApp significantly and has maturity around conversational messaging and advanced messaging. There's a lot for us in the North America team to learn from the Latin American team and their experiences with enterprise brands. You can see from this the data there, we have that 5% share that I talked about. There's no self-serve in this market. That's something for us to think about for the future. And there are 400 team members based in the Latin American market across those multiple teams, group functions and go-to-market teams in Latin America. So every single day, we are powering communications for the world's biggest brands. The brands that you can see on the slide here are significant. They're large enterprise organizations, solving problems for their customers. What unites them is the challenges they face every day. They have a complex digital environment, and we are helping them in creating solutions with them to fix those challenges. Where I mentioned that 31 out of Fortune 50 customers, we're growing that actively. When you look at the logos here, some of that shows up in your everyday life. So for instance, I got an Uber here earlier today. I had an email direct to mysinch.com inbox with the receipt from my Uber ride that I took. That's very likely to have been from Sinch. So for us as consumers, you'll see and feel some of those experiences with these brands, my team in the region and the Americas see that showing up every day in their consumer experience. So moving on to talk about growth drivers, what are the 3 areas that are going to give us the most growth? It's these. Partnering to accelerate. So I'll remind you of that round chart we showed earlier. 3/4 of the business today is via direct motion, 1/4 via indirect. We believe there's a significant opportunity to accelerate our growth through partner and ecosystem. Our second larger lever for growth is around advanced messaging. Robert talked about RCS. We're super excited about that opportunity. I'm going to give you some real-world examples of how we're doing that every day in this region. And then finally, expansion via enterprise. That's growing wallet share, selling more products to existing customers, expanding on that huge asset we have in our installed and live customers today and then acquiring new enterprise logos. So doubling down on partnering to accelerate growth. Our own primary research tells us that 45% of the share of digital communications will come via an indirect channel. That might be an integration, that might be a channel partner, that might be a reseller. We know it's a significant opportunity for growth. We have 500 partners today within the global business that we can leverage. One of the stats I think is the most compelling is looking at the year-on-year growth in the Americas region on the prioritized partners. We've taken a handful of partners and really prioritize some efforts around that motion, making sure that we have people focused there, having the right conversations and driving outcomes. And we've seen a 68% year-on-year growth on our gross profits with those prioritized customers. So it's a huge opportunity for the region, one that I'm very excited to continue to focus on. But instead of me talking about it more, we're going to hear from 1 of our really significant partners, Adobe, and the work that they do with Sinch. [Presentation]

So great to hear those words from Adobe. It shows the power of that integration relationship. If we can show up in the environment where customers are present, then they can consume our services. And it's been great to partner with Adobe on many go-to-market activities, and we expect more to come. So moving on to talk about that second area of growth, our experience in advanced messaging. Robert talked a lot about RCS. You can tell we're excited about it. We think it's an opportunity for us. I wanted to talk about what we're doing today already in advanced messaging within the Americas region and give you some examples of some customer cases that we're working on right now. So the first one is a global consumer patch delivery company in Mexico, who we've been working on -- we've been delivering RCS for in their environment in Mexico. We've increased delivery rates of the messages they've sent from the low 80s to high 98%, and we've also got a 70% confirmed open rate. When a customer receives a message with the brand, Robert talked about it earlier, that you deliver that trust and the verification tick and an RCS experience, it's a really incredible change that this particular customer have seen. And the thing that's really important about this case study is there was 0 integration needed by the customer. We upscaled them from their existing SMS environment. And so we're very proud of that work. We're doing with that global company in Mexico. And of course, the conversation with them is far broader across the globe than just Mexico. So my second example is a large global bank, who we're working with in Brazil to deliver RCS. Again, that trust use case, delivering a message with a logo and a verification has enabled them to have a 3x higher engagement in the conversion of the messages that they're sending to their customers, largely around security and fraud use cases, which are really compelling for our financial services customers. And then finally, in North America, we are delivering RCS today in North America for a fairly large mobile operator on the -- delivering the messages during their onboarding journey, right, really an important time for them with their customer base. is the onboarding of that experience. And so they've seen a 10% engagement increase as they work through that program with us and lower opt-out rates, which is a significant stat for them in their business. So 3 examples of us delivering advanced messaging in the market today. Why am I telling you about that? Well, the U.S. is still a very SMS dominated market. Over 2 trillion SMS messages are sent every year in the U.S., and it's still an Apple dominant market as well. And when you dig into those statistics, actually, in demographics that marketeers want to reach, there's a very high dominance of Apple handsets. So Apple now supporting RCS with the recent launch of iOS 18 means that we think we can have this incredible unlock in the market. We are strategically aligned to win this space. We do it today. We do it today for many customers in the region and outside of the region. You'll hear about more of that across this afternoon. But we think we are absolutely ready to do this because we know how to do it, and we're going to capture share as a result. So the third area of growth I wanted to talk to you all about today was expanding our share with enterprise customers and very meaningfully, that's expanding existing customers, selling them incremental products. If you were at any of the demo stages in the coffee break, you'll have seen how easy it is to now put multiple products together. So really compelling for us to be able to do that in a go-to-market motion. The stat there on 4x conversion rate is from a real-life customer example when we brought email and SMS together in a solution for them. So they saw a 4x improvement on conversion rates. So we're doing this work right now. 20 of our top 100 customers buy meaningful multiple products from us today. We have plenty of opportunity to expand just in that top 100 base. And the stat that I think is really important for you all to understand is that we've seen a 35% year-over-year increase in our pipeline for combined sales. So our sales teams are out there talking about the full suite of Sinch portfolio, which is going to be really meaningful for our growth. But I'm not going to talk about that, I'm going to allow one of our customers to talk more about that. So let's hear from OneMain Financial, who is a really important financial services customer for the Americas region. [Presentation]

So great to hear so many of our products name checked in a customer video. There's at least half a dozen products that, that customer is using today, and thereby no means unique. There are many customers that we're talking to about expanding their share with us. So that enterprise expansion is about expanding wallet share with existing customers and then acquiring new customers. So I'm going to take a few moments to talk about our global transformation program in the go-to-market space. Laurinda referenced it earlier at the beginning of the conversation today. In January, we launched our new regional structure. So we have 3 regions: the Americas, EMEA and Asia Pac. And creating that unified go-to-market approach, putting our teams in close proximity to their customers, orienting around the customer is an incredibly important part of that transformation. I'm the global sponsor on the go-to-market program. And our North Star for this program is to unlock the potential of the power of the acquisitions and create this ability to orient around our customers, focusing on segmentation. So what have we done in that program? We've stood up these teams, and you'll hear more from my colleagues, Nicklas and Wendy after this. So we set up the teams, but we really focused on data-driven segmentation, looking at the customers today and the customers we want to acquire, so the customers that we've already been selling service to and our future growth. And we've segmented those customers, and we looked at different motions in direct motions and then we looked at customer segmentation. And so we formed these new teams and new units. Digital transformation and automation is an incredibly important part of the program that we're driving. So bringing together next best-in-class tech stack for our selling teams, our go-to-market teams and uniting the sales team, the marketing organization, the customer success teams and the solution engineering teams into these customer-oriented organizations with local presence, local understanding and local know-how. We want them to be solution and customer value oriented, and that's how we focus on managing the business. And we've wrapped all of that in sales enablement and training. And I think, as Laurinda said earlier, we're in this transformation program. It's definitely a multiyear journey. So we're coming to the end of year 1. And we're inspecting some of those KPIs, you can see across the bottom of the slide there, and we're starting to see some really great green shoots across the regions. We look at those statistics on a regular basis, and we course correct to manage our program appropriately. But the cross-sell pipeline is growing, booking conversions are growing, we're seeing some green shoots there. And then we're really focusing on making sure that our selling teams spend their time selling and focusing on customers and having customer conversations. So the program, as I said, is a multiyear program, and we're in year 1 of that program, and we expect to see continued velocity and improvement through the change that we're driving. So in conclusion, why do we win in the Americas market? We have an unmatched local expertise and scale. That's not only with customer relationships that we have, that's with carriers, regulators and then with key partners. So Google, for instance, I've been proud to take the stage, I think, with them 3 times in the last quarter to talk to enterprise clients. We have a very joined up go-to-market approach with them on RCS, which is clearly a big driver for us. Our second area of focus is that deep and proven experience in advanced messaging. I could have picked many examples to talk to you about in terms of case studies. We deliver advanced messaging services daily for our customers across the globe, but specifically in the market that I represent, we deliver daily, hourly for them as well. So we think we've got that deep and proven experience and the heritage. There are lots of brands that we've delivered RCS for outside of North America, who we're now having conversations with about their messaging programs in North America. And then lastly, that strategic focus on enterprise expansion and driving our partner and ecosystem community to support us in driving growth for the region. So 3 very significant focus areas. I absolutely believe that's why we'll win. I'm excited about the opportunity in the Americas having been here a year. I've definitely spent a lot of time with customers. When I'm with customers, I hear really strong messages about the experience they have with Sinch. And so it's great to be able to have those conversations because it helps us grow the business that we have today. So thank you very much for your time. I'm now going to hand to Nicklas who's going to talk about the EMEA region.

Thank you, Julia. Here comes a little brother. The smaller region. Great to see you all here. My name is Nicklas, and I have the honor to lead the EMEA region for Sinch. I'm based here in Stockholm, where it all started. I've been with Sinch for almost 8 years in various commercial roles covering different regions, but with EMEA as a constant component. I'm very much excited about the phase we went into in January. We had started it a bit before Laurinda joined. And when she came, I begged her to continue with it, unifying our previous BUs from a go-to-market standpoint made so much sense to me. It not only creates a better customer experience, but it also unlocks growth. And that's what we're starting to see now across all 3 regions. I'm optimistic about the future of Sinch for a couple of reasons. First of all, our capabilities throughout the value chain. Secondly, you heard Laurinda refer to it, our global scale but local knowledge and presence, which is unique. And thirdly, which is a red thread in this state, the next generation of messaging or the renaissance of messaging, as Sean called it. Looking at the EMEA region, we're not that far behind Julia in terms of number of customers, 72,000 customers. This comes from a broad base of customers throughout the EMEA region, but with the biggest concentration in Europe. 22% of Sinch's total gross profit, I hope to increase that number. We're 1,300 employees across the region in different functions, with 8 sales offices or sales countries where we have feet on the ground, mainly working with our enterprise customers. So looking at the demographics of our customer base, starting with the product categories. The API category stands out as the biggest one, 57%. And this is where you have seen declining numbers, declining, but improving numbers the last 3 quarters. And as we've previously communicated, this is due to the fact that we've exited a set of fixed cost or fixed price contracts. So you can expect to see that improve going forward. I will not tell you how fast, but it is in the right direction for sure. Second largest is the applications category. This is very much where we have the Engage and the Mailjet offering, more turnkey solutions. There's a faster growth here, 5% currently. It's gone down a bit, but we have clear signals on that going up going forward. I will not tell you how fast, but it is in the right direction for sure. Second largest is the applications category. This is very much where we have the Engage and the Mailjet offering, more turnkey solutions. There's a faster growth here, 5% currently. It's gone down a bit, but we have clear signals on that going up going forward, and it is a key priority for us going forward. Last, the network layer or network connectivity category. As you've heard before, this is a category where we expect modest growth or maybe decline, but we manage it for profitability. I was a bit too fast there. So similar to North America, our mix of indirect and direct is more or less identical. In the direct motion, where we serve the enterprises consuming our products directly represents 75%. Indirect, 25% so through the platforms and ecosystems. We'll come back to that in a second or a couple of minutes. By industry vertical, quite similar to the Americas. Technology stands out next to telecom, finance and retail, also professional services. We see big potential in not at least technology, but retail stands out as a clear opportunity, both in the marketing use cases, but also customer care. We're very proud and humble about being trusted by so many and so great customers. Our success with these stems from our robustness, our quality of service, our great understanding of business communication needs, but also our commitment to deliver excellent service. I think one of the examples that many in this room can relate to is or customer is EasyPark. Easy Park was a customer that we -- or they were out for a tender back in 2018, we lost. We're pretty beaten up by it simply due to price. A couple of years later, we reengaged, as they had discovered and explored the communications landscape and seek better service delivery, better conversion. Conversion is critical. So back to the delivery rates, that's absolutely paramount, but also better ability to scale as they were also growing in every part of the world. There's -- in one of the demo stations, you can find more information about EasyPark and what we're doing with them also on our website. EMEA as a region is characterized by plurality, many countries, many languages, cultures, regulations. For our business, digital customer communications, the trend is very much going towards multiple channels, combining both text-based and voice-based channels, all supported by AI. There's a growing shift and requirements from customers to more advanced messaging channels. And despite the diversity we have in our market, we capitalize on commonalities, which has then informed our go-to-market strategy. And you heard Julia speak about it. We have organized ourselves in the EMEA region based on our segments. The largest segment being the enterprise segment with more than 1,200 customer accounts throughout the region. This is where our powerful API offering serves the both indirect and the direct motion. This is about scale, about quite complex needs. It's a sales-led high-touch motion, where we have people in region, in countries working with these customers. The mid-market segment with more than 4,000 customers. This is 32% of our gross profit currently. It's a high velocity motion. We can have a more centralized approach to it. Application offering is more relevant here, offering turnkey solutions. This is the area where we've seen the fastest results from our go-to-market transformation, especially in the new sales area, but also good green shoots on cross-selling. The largest segment by number of customers is the small business segment. This is a marketing and product-led motion, self-serve, so simple APIs and applications to offer services for more condensed use cases, simpler use cases. This is a good performing motion for us, and I strongly believe that we will see this continue to grow and increasing growth pace. Looking at our most important levers for growth in the coming years. You will see some commonalities. First of all, our customer-centric go-to-market model adapted to customer needs, taking the lead in the advanced messaging shift and finally, partnering to accelerate growth. We have a golden asset, 72,000 customers. This is the most important part or base for our future growth. The enterprise segment is quite well penetrated. There's a large degree of enterprises using our type of services. Making this grow is crucial, and we believe that there will be quite an increase of spend in our types of services over the coming 5 years. RCS or advanced messaging is a key driver of this, but there are also many other products playing into this. This doesn't mean that we don't focus on net new customer acquisition. We do, but more selectively. Moving to the mid-market and small business space or segments. This will also increase in consumption. But here, gaining market share and increasing market penetration is much of a bigger driver for us. Messaging and email will remain our key offerings with the application layers as a key enabler. We see a good opportunity for increased market penetration and expansion throughout the region in the mid-market and small business segment, while enterprise will remain in short term, mainly focused on Northern Europe or Western Europe. Continuing with advanced messaging. There's a broad awareness now in our space, in our little space about what advanced messaging can do for enterprises. We're seeing more need for a more powerful tool to both enhance customer engagement, but also to increase commercial and business results. In parallel, regulations are mandating more secure channels for messaging communications, and you've heard it several times before today. This is where RCS is not the only channel, but for sure, the channel that will unlock this and make it grow. Here, we leverage our partnerships with Google and the operators. We offer this through our powerful APIs for the enterprises and the indirect motion, and for the longer tail, the applications offering. But instead of me talking about this, it's better to hear from one of our customers, Courir in France, that has taken RCS to its full capability and not just only replace the normal SMS with RCS. [Presentation]

So this is why we're excited about the advanced messaging revolution and why we jump out of bed in the morning. I think one key stat here of result, the 3x higher campaign revenue. I mean that's what it's all about in the end. Finishing off with our third focus area, the partnering acceleration motion. So similar to Julia, we have done the exact same thing in the EMEA region. The opportunity for us is 45% of the addressable market through the indirect motion. Our starting point is 25%. We have -- as in Americas, we have shared programs on this on a global level. We also do it on a regional level. Our motion this year is growing 30% compared to last year on this selected set of strategic partners. So we've already started to increase the number of both global and regional strategic partnerships, which we expect will accelerate this even further. Then last, the ecosystem opportunity. For historical reasons, this has been a prime focus in the ANZ region and in North America. EMEA has been the next sort of market to move into. So there's big untapped potential for us in EMEA. Finishing off then. So why do I believe that we can succeed with all of this? First of all, yes, we have deep customer knowledge and vertical capability throughout the value chain, from the network layer up to the applications layer. We attract and serve a broad market, meeting both local and global requirements. Lastly, the renaissance of messaging. We have a pole position. We've been working with this since 2017 to capture this opportunity, which we believe will be significant. With that, I would like to introduce my friend, Wendy here, coming all the way from Singapore to talk to you about the APAC region.

Thank you. Thank you, Nicklas. Good afternoon, everyone. My name is Wendy Johnstone. I head up the APAC region. I joined Sinch in March of this year, and I joined really for the opportunity to lead the organization through transformation. It's great to be with you today all the way from Singapore. I actually got to see a little bit of snow today. It doesn't snow very often in Singapore. So that was great. And it's great to have the opportunity really to take you through our growth strategies for the APAC region. I've been living and working in the APAC region for 25 years, and Sinch has been successful in a region that is incredibly complex and diverse. It's a region that's made up of many countries with different languages, cultures, localization requirements and with very different business customs. It's also a highly competitive landscape. And in APAC, we see some of the most stringent regulations globally in countries like Australia and Singapore. These are obviously all important considerations for Sinch as they do business in the region. But having said that, there is significant opportunity for growth for Sinch in the APAC region. 60% of the world's population live in APAC, and the region has the biggest mobile user base. And so therefore, brands are looking for ways to communicate digitally across multiple channels with their customers is in a very secure and safe way, and that's exactly what Sinch can help them with. To date, we've seen success in the financial services sector with our API platform in India and Asia. And we are the market leaders for SMS in Australia through the acquisition of our Sinch application platform. We have more than 35,000 customers in the region, supported by a team of 1,200 across 15 offices in 10 countries. Now that not only represents our go-to-market teams, but we also have several global functions represented in the region. And APAC today is 16% of Sinch's global GP. Our APAC business is split pretty evenly between selling our API and our applications products. 89% of our business today comes from direct selling motions. We only have an indirect selling motion in the ANZ market, and that represents 11% of our business. We've seen most success in acquiring customers in the financial services, the technology, the retail and the health care sectors, with about 2/3 of our GP coming from those sectors. Our go-to-market model for the region is strategically divided into 3 subregions. Our businesses are very different in each of these subregions. So that's Australia and New Zealand, India and Asia. And we also see different market opportunities and different growth drivers in each of these subregions. So it's very, very important that we localize not only our go-to-market model, but our strategic plan for each of these subregions. Starting with ANZ, which contributes 55% of our APAC business today. The majority of our business is coming from delivering SMS services to customers. We've got good cross vertical penetration in the mid-market and SMB segments. And we've also been successful in winning larger customers via our ecosystem integrations and our partner-led motions, which Sean spoke to earlier. Moving on to India, which represents 25% of our APAC business, but is our fastest-growing subregion today. Despite it being a highly competitive market, India has built unique SMS capabilities for the financial services sector. Our India API platform was developed to meet the local India regulations and securely supports multi-vendor SMS routing, sending and reporting. With Google naming RCS -- with Google naming India as a priority market for RCS, we're already seeing strong take-up of RCS in the market. WhatsApp is also fast becoming a preferred channel of communications for brands. And so it's important for us to support both of those channels along with email as we move beyond just being an SMS provider in India and offering brands multichannel communication support. And finally, Asia, which represents 20% of our APAC business today, but offers significant opportunity for growth. The business today is a blend of SMS and email coming from a number of long-term partnerships in the financial services, the e-commerce and the technology sectors. Asia has been a direct sales focus motion today, and we're really only actively doing business in a handful of markets in Southeast Asia and North Asia. So we're really only scratching the surface of what's possible in this subregion. So now let's take a look at some of the brands that we're working with across the region. At Sinch, our commitment to customer centricity has enabled us to work with some of APAC's most innovative brands. On this slide, you'll see some of the customers that we're working with, and I wanted to highlight a few today and talk about the different use cases that we support. Open Gov is the Singapore government's digital technology agency. We started working with them in June of this year, and we're helping them to facilitate communications between multiple government departments and the citizens of Singapore and to do that in a very secure way. Grab, which is the Uber of Southeast Asia, has been a customer for us since 2019. They're using our voice products to support in-app calling between drivers and passengers and to create a very rich and safe customer experience. And finally, we're working with one of Australia's leading telcos, TPG, where we've created a white label SMS offering that they can sell to their downstream customers. We're really, really proud of the customized solutions that we've helped these brands and others with in the APAC region so that they can deliver best-in-class customer experiences. Now let's talk about why we're excited about the future for Sinch in the APAC region. Our market study and our own local knowledge of the market have identified 4 growth drivers in the region. Asia is 75% of the total growth opportunity in Asia -- in the APAC region. And so we have the opportunity for that subregion to grow as fast as our thriving business in India. We see an opportunity to increase the share of wallet with our customers in the enterprise segment. Many of these organizations are consolidating their spend across SMS, email and RCS. And Sinch can help them with that in all of our subregions. We also see the opportunity to acquire new customers in the mid-market and SMB segments in India and Asia. These organizations are purchasing their communication services through cloud-based systems, which Sinch can offer through our ecosystem integrations. And finally, in India, RCS and WhatsApp will be priority channels for brands. And so our strategy will be to support those channels. Given those growth opportunities, let's now take a look at the growth strategies for each of the subregions. Starting with India. We will continue to build on the great success that we've had in India to date by executing on 3 key priorities. The shift from SMS to RCS is already happening in India, and we're expecting to see RCS volumes continue to soar in the coming years. And my conversations with customers when I visited India have really reinforced that. There are also 14 million micro, small and medium businesses in India today who need to be able to support multichannel communications with their customers. So we're building a self-service indirect sales model, and we'll be announcing new partnerships in the market to support the growth in this business. And finally, we'll continue to develop our current India SMS platform, announcing new capabilities to help our existing financial services customers with multichannel capabilities so that they can deliver even better customer experiences. I now wanted to play a short video from one of our customers in India, HDB Bank. It really demonstrates how we are supporting them with multichannel communications. Let's play the video, please. [Presentation]

Video really demonstrates the strength of the relationships that we have with our customers in India and how we are helping them with their communication strategies and why we win. So let's move to our ANZ growth strategy. We believe the market and the customers in ANZ will adopt RCS slightly later, so towards the end of 2025, early 2026. However, given our market leadership position for SMS in ANZ, we're really seen as a thought leader. And so we're already educating customers and preparing them for the shift so that they will be the early adopters of RCS when it becomes available in the market. We will continue with our telco white label model in Australia with TPG. This sales motion and selling through our partner network will be our strategy for customer acquisition. Cross-selling is a significant opportunity for Sinch, and that is very true in ANZ. The biggest GP opportunity will be to combine our SMS and email offerings for our large installed base of customers. And that will really help us to drive increased spend on Sinch. And then finally, we'll be focused on enabling our sales teams to transition from selling a single product to selling the full Sinch suite of products, and this will enable us to acquire new customers in the enterprise segment. And finally, our growth strategy for the Asia subregion. We believe RCS will emerge as the fastest-growing channel over the next 5 years. We've already announced the availability of RCS in Singapore, and we did that in partnership with Singtel, who is Singapore's largest telco. And so we're already onboarding brands, and we are looking forward to seeing our first senders very soon. To go after the market opportunity in Asia, we will need to offer new products in new markets and really continue to diversify our business. We're looking forward to bringing the Sinch Engage platform to Asia and to scaling through our ecosystem partners to accelerate growth. Unlike in the ANZ region, we will need to enable our go-to-market teams to position the full Sinch suite of products. And finally, we will be open to entering new markets in Asia where we are not selling today through strategic acquisitions. In conclusion, by positioning ourselves as a leader in advanced messaging, expanding our partnerships and driving new business through our ecosystems, enhancing our solution selling capabilities and doubling down in India, I believe we're very well positioned to deliver exceptional value to our customers and drive significant growth in the APAC region. We have a very bright future in the region, and I'm looking forward to providing you all with updates on our progress. Thank you for your time today, and I'll now hand back to Ola.

Thank you, Wendy. Before we move on, remember to post questions, especially on topics relating to the regions, of course, because they will be here in the next Q&A. So now for the final session, we have 2 topics left. It's sustainability, where we will hear from our Head of Sustainability, Karin Arrenfeldt, and then Roshan Saldanha will, of course, talk more financials. But Karin, the stage is yours.

Yes. Thank you, Ola, and hello, everyone. My name is Karin Arrenfeldt, and I'm Head of Sustainability at Sinch. And I've actually only been here for 3 months, but I already inspired our CEO to become green. Yes. Yes, that was actually a coincidence, but yes. Okay. So I am going to talk about our sustainability journey that we are doing at Sinch. At Sinch, we are pioneering the way the world communicates for a better connected and more sustainable world. And we are doing this by enabling empowering meaningful interactions between people, businesses and society. And our 4 core values guide us on our mission and to act as a responsible and sustainable company. And we dream big and we aim high at everything that we do. We win together. We embrace diversity as one global single team, and we truly care about each other. And we make it happen, and we apply the highest standards to everything that we do, and we keep it simple. And as you can see, we also have a lot of fun together. And as we all know, having fun at work also means that you perform well at work. So Sinch's sustainability journey started a couple of years ago as we started to analyze our sustainability impacts, risk and opportunities, and we started to report on this to meet the transparency, expectations and needs of customers, partners and industry analysts. And we strengthened our sustainability processes and management systems. And today and for the last year, the focus has been on defining our ambitions and targets. And we have made -- or we have defined 2 very important milestones this year by making our diversity targets and our emission targets, part of our long-term incentive program. And we have also set a science-based net zero target for 2050. And looking back, I feel very proud of what we have achieved so far and that we have built and we'll continue to build this firm and solid base that we can now embark from as we take the next steps on our sustainability journey to turn those ambitions and targets into actions, drive progress and become net zero. And our sustainability framework at Sinch includes 7 different focus areas. And those have been defined in our materiality assessment and together with key stakeholders. And our sustainability framework supports our business strategy, and it creates value for our stakeholders by building stronger connections between people, businesses and society. And we have divided our sustainability framework into 3 different categories. And the first one is our planet. Second one is people. And the third one is our business. And in terms of our planet, our most significant impact come from our energy consumption related to data centers. And we recognize our responsibility as a significant actor in the fast-moving influencer tech market to do what we can to decrease our emissions and to decrease our emissions in our value chain. In terms of our people, we embrace diversity as one of our core corporate assets. And with well-being and the development of our employees as one central because, of course, our employees is also one of our important -- most important assets. And in terms of our business, being a trusted and responsible partner is essential for us to get the trust that we need from the market and our customers to excel. And in terms of our product impact, we see as our responsibility to protect our services from misuse, fraud, Sean was talking a lot about this, for example. That's really important for us. And of course, privacy information-related risks, sustainable AI and also to support our customers on their sustainability journeys by offering smart technological solutions and to decrease the environmental footprints of our products. And we are now -- this year, we are conducting a double materiality assessment in line with the corporate sustainability reporting directive. And I will now dig into 3 of those topics. And we will start with climate impact. So I'm proud to say that we'll have this year, defined a very important milestone for our company that we are going to reach net zero for 2050, and we have set milestones and a pathway to reach there. And in terms of the 2050 target, that means that we will reduce our -- all of our emissions, Scope 1 and 2 and 3 by 97% and compared to base year 2023, and it's an intensity target. And in terms of targets for 2030, we have set 2 different targets. So we have set one target for Scope 1 and 2 and Scope 1, it's our direct emissions. Scope 2, it's our indirect emissions in terms of energy usage. And we have set an absolute target to decrease our emissions with 42%. And for our Scope 3, meaning our suppliers, we have set an intensity target to decrease emissions with 52%. Yes. And being a cloud communication company, most of our emissions derives from energy usage related to our data centers. So our focus now ahead will be to be efficiency in our operations and to purchase renewable energy, but also to engage our suppliers to set their own emission decreasing targets. And we will also increase efficiency related to -- and have more sustainable practices related to IT equipment, IT infrastructure and sustainable traveling. Yes. So let's move on to our next topic, which is product impact and innovation. And at Sinch, we are in a mission to pioneer the way the world communicates. And we help our customers to engage with their customers to create better connected communities. And we have -- today, we have heard a lot of examples, really good examples of how our services help companies to meet the needs of consumers. But the fact is that Sinch communication platform is also part of several societal services all around the world. And I'm going to mention one example here, which is the 911 service in the U.S. And I think you -- most of you are familiar with the 911. It's the emergency services system in the U.S. And Sinch communication platform is an important part of that infrastructure. And it's actually leading the way in transforming the communication system of 911 in the U.S. And we are doing that by providing emergency responders with critical data that they need to respond quickly and efficiently. And our next-generation 911 service improve public safety and create better connected and safer communities. And we also do this by integrating a variety of different functions into the service. So both video, voice and real-time text, which makes the 911 communication more available and reliable for people with, for example, hearing or speaking impairments. And we also -- we have also integrated real-time and precise location data into the service, which makes it easier for emergency responders to find where the person in help is located. So today, more than 50 million calls to 911 are processed annually on Sinch network. More than 6,000 primary and secondary public safety answering points are reached, which means where the calls are processed. And Sinch deliver over 40% of the 911 traffic -- NG 911 traffic in available markets. So that's quite impressive figures. And we are now looking to expand this service across the U.S., and we are also exploring international markets and how we can integrate more advanced technological features in the service. So last but not least, a very important topic for us at Sinch. Diversity, equity and inclusion. And of course, this is also closely related to our corporate culture and our work with our corporate culture. And at Sinch, we are dedicated to create a workplace where everyone can thrive in being just who they are. And at our offices all around the world, we have more than 70 different nationalities working together. And we truly see diversity as one of our core corporate assets. And therefore, diversity, equity and inclusion is very much for us about embracing identities, our unique identities, differences and to create the corporate culture of innovation. And it also includes the stand up our values, treat everyone fairly and support our employees in maintaining work-life balance. And we strive for gender balance at all levels of our company and we'll be leading by example. And therefore, we are very proud that this year, we have increased the percentage of women in both the Board and the management with -- yes, as you can see, in terms of the management team, we went from 23% -- sorry, 25% of women in 2023 to 40% -- 42% in 2024. And in regards to the Board, we went from 33% women in 2023 to 40% in 2024. And for this, we had actually been acknowledged by the Swedish foundation AllBright for being a forerunner in our industry. So that, we're also proud of. But then if we look at gender diversity at all management levels, we still have a way to go. So we have set a target for 2027 to increase the percentage from 30% to 32%, which means in percentage, it's a 7% increase. And this won't mean that we have reached a gender balance in leadership positions. We will still have work to do with this, and we will continue to reach better figures, of course. And to create traction within this area, we'll have -- we have included this in our long-term incentive program. Okay. So now my time is obviously out. But 4 key messages. We have built and we continue to build a solid base that we can rely on when we move on to the future, where we now will focus on setting -- defining long-term targets, strengthening those global sustainability governance processes further and drive action and reach net zero. Thank you. And then I'm leaving -- handing over to Roshan, Chief Financial Officer at Sinch.

Hello, everybody. Thank you very much, Karin. Hello, everyone, in the room and all of you listening online as well. I'm Roshan Saldanha, and I'm Chief Financial Officer at Sinch. I've been a Sincher since 2019, and it's been a fantastic journey through organic growth and acquired growth to become the global digital customer communications. It's a long phrase leader that we are today. So pleasure to be here. Let's see if I can get this working. So to begin with, I would just want to reflect on a few key messages that I want you to take away from my session. I think, one, Sinch is a profitable cash-generative digital communications leader with a long track record of organic and acquired growth. Number two, I think how will we create value? And hopefully, I will get a little bit more into details in this, but we will create value through growth reacceleration through EBITDA margin expansion and through continued high cash generation that we've had over the last few years. The growth reacceleration specifically, as Laurinda mentioned at the start of the session, will come through enterprise expansion. That's the core of Sinch. That's where we started. We're great with the large enterprise customers, expanding on our self-serve capabilities, which have become a part of Sinch over the last few years. Advanced Messaging in RCS, you heard that pervasively through the session today, I hope how excited we are about RCS and email. And then, of course, partners and ecosystems. And let's not forget, I mean, the core economics in messaging are still strong and they will expand with RCS. And then, of course, I mean, if we continue with this high cash flow generation, we need to think how we actively allocate this capital. And what we outlined today in the press release that went out this morning is that our priorities are going to be: a, reduce debt; b, use remaining to fund acquisitions and then return cash to shareholders in that order of priority. So let's walk through each of them, starting with the first key message then. And I want to take you back a few years. I mean Sinch is definitely had a very strong historical financial and operational performance. In the end of 2021, we closed 3 large acquisitions, which essentially tripled our net sales, gross profit, and adjusted EBITDA. So quite a large change in the size and scale of this business. During the last 12 months, we have generated about SEK 29 billion in net sales with a adjusted EBITDA margin of 12.6%. So still a strong performance. The changes in the market environment that took place in 2022 necessitated that we shift our focus from that growth phase to more cost control and cash flow. And I think we've executed well against those priorities. We've continued to maintain commercial momentum. And we've also expanded and implemented 2 cost savings programs with SEK 300 million of gross cost savings, which has expanded our cash flow during this period. We are convinced, however, that if we look forward, investments in growth is the best route to continued profit growth. And that is why Laurinda, and the management team implemented a new operating model starting in January 2024. This includes reorienting our sales organization to put the full power of Sinch behind our broad product portfolio, which the regional leaders have spoken about earlier today. We are seeing early signs of this growth trajectory. Julia mentioned the pipeline, I can also say that won deals are up 15% on a year-on-year basis in 2024. But we also understand that our excitement in the traction that we are seeing is not seen by you in the financial figures that we are reporting, and that's because of the time lag that it takes to convert these initial green shoots into actual financial reporting. We believe that we're on the right track. We believe that the combination of the go-to-market capabilities and the product offerings that we have will eventually be visible in the financial figures as well. The second proof point when it comes to our historical performance, I believe, is free cash flow. And on this growth -- on this graph, you see the long-term growth in free cash flow per share. The way we measure free cash flow is cash flow after operations after working capital, paying interest and taxes and after also capital investments. So it's really what's available to pay down debt or to return to shareholders. And that then is divided by the diluted outstanding average shares, right, for each period. And you can see the long-term growth in free cash flow per share on this page. Shareholder dilution levels, if I start with that have been historically very low, and that's primarily because of share-based compensation being low, especially when compared to our -- to our peers in the tech space. For Sinch, it's at about 0.5% of revenues. Some of our tech peers will have double-digit share-based compensation as a percentage of revenues. We expect going forward, of course, to continue with subdued levels of share-based compensation. If you turn then to free cash flow, this has expanded over the last period. When we look at drivers for free cash flow going forward, obviously, the growth trajectory that we've pointed to in the financial targets as well as the margin expansion will help free cash flow growth. On top of that, we believe that interest levels have peaked for Sinch in the beginning of 2024. Already this year, we are seeing a decline. That's driven by the deleveraging that we've done, but also our expectation of reducing interest rates compared to the levels that we've seen earlier. And we're putting in measures in place to consolidate our tax structure, which is likely to give impact post 2027 just because of the longer time periods to implement such changes. On the other hand, we've had some working capital unlocking. I think many of you that look at our balance sheet, which is very strong, might recognize that we operate at a very asset-light model with negative net working capital. We do believe that some of the unlocking that we've seen will stabilize until we find new levers and implement those new levers. So we're still guiding towards a 40% to 50% cash conversion from adjusted EBITDA. So now let's talk about our value creation through growth reacceleration, EBITDA margin expansion, and cash flow generation, continued cash flow generation. And there's a few key proof points that I want to leave you with. I think you've heard several leaders today speak about our enterprise selling capabilities. And one such KPI that's very interesting to look at, I think, is large customers at Sinch. And large customers for this purpose is defined as customers that we generate more than SEK 2 million per year in gross profit. The numbers that you see on this page are adjusted pro forma for the acquisitions. So you can see a healthy growth in large customers over the last 4 years. New customers come in, they adopt a product, then they will expand their usage of that product. They will add new use cases on that product. And eventually, if we become successful, they will also buy new products from us. This is how we want to grow this cohort of large customers over the coming years. When looking at the concentration in our base, our top 10 customers have consistently accounted for less than 20% over this entire period over the last -- over since 2022, at least since after we closed the large acquisitions. And we are seeing great relationships with these top 10 customers with the last of these top 10 customers having been acquired by Sinch business in 2017. We continue to explore new opportunities with these top 10 customers. Our gross margins also over this period have remained stable and slightly expanded. The second proof point that I want to give you when it comes to our growth reacceleration is self-serve offerings. To give you some context, product-led growth, and self-serve capabilities the gross profit that we generate from those capabilities is just under 20% of our total group gross profit. So this is a meaningful piece of the business. Today, Sinch's Customer Communication Cloud offer self-serve capabilities across both the API platform product categories and the applications, product categories, enabling both technical users and business users, to easily integrate and deploy communication solutions for their organizations. In addition, when we look at large enterprises, often self-serve is also a way to enable them to use the support facilities at Sinch in an effective -- in a cost-effective way for us and in a easy way for them. On the side of course -- on the slide, of course, you see how gross profit has developed. And I think additionally, we are also launching new products in this area. So very recently, we enabled on the Sinch dashboard elastic SIP trunking, which allows enterprises to create voice-trunk routes automatically on the dashboard. This is integration features that came from our voice acquisition. So we're bringing more of our products also to our self-serve capabilities. When we talk about advanced messaging, and we've referred a lot to RCS and email, I think I want to start firstly by giving you a view of our -- of how our 3 product categories map to each other in terms of growth and size. So on this graph, the size of the bubble indicates the absolute gross profit that has contributed, the relative absolute gross profit that has contributed on a year-on-year basis by each -- or over the last 12 months by each product category. On the x-axis, you see the organic year-on-year growth in gross profit for the period ended Q3 '24. And then on the y-axis, you see the absolute change in gross profit during the same period. And what you can see variously from this graph is the network connectivity product category is meaningful for us. It's sizable, but it's declining 10% over this period. And if you look at the 2 on the right API platform and applications, we are seeing a good growth. So this is how we think when we have modeled the targets, the financial targets, and we modeled kind of coming to the growth rates that we've talked about in comparison to the market growth rates. And what these results then in is that over time, we will see the network connectivity product category declining. Over the 7-quarter period from Q1 '23 to Q3 '24, where we've been disclosing figures for these 3 product categories, you can see that the network connectivity product category is gone down from 24% to 20%, and we expect this, of course, to continue which means that the faster-growing product categories today have gone from roughly 75% to close to 80% of our gross profit share. And again, we expect that trajectory to continue as well. So let's talk a little bit about margins then moving away from growth to margins. And I think as you all know, we said that we would expand margins and lift them to the 12% to 14% range. As you can see in the chart, as you can see in the chart here, there's a number of drivers that we see will drive that shift in margins. We created headroom already through this year and through last year by running the cost savings programs, which has resulted in the 12.6% adjusted EBITDA margin that you have seen this year. This equates also to a 36% adjusted EBITDA over GP margin. So it's a very healthy margin position for the company right now. We expect, however, and this goes back a little bit to what we will believe will drive long-term profit growth. And we expect, however, to put some of this headroom back into spend for sales and marketing and product engineering resources. Now again, we will do this, and we've always been very disciplined about this. We will do this in a very disciplined way so that we're making sure that we are seeing the returns from those investments and we're seeing the growth trajectory before we put those -- more of those investments in. During the period until 2027, our expansion -- our margin expansion will come from a, of course, growing at a higher rate. It will come from a commercial mix of -- mix and commercial discipline. When we are growing. And then finally, of course, operational efficiency, and I will go a little bit more into operational efficiency very shortly. So talking about operational efficiency then. If you look at our P&L, we have basically 4 large categories of cost items. The largest one is cost of services sold. This is what we pay to mobile operators primarily and in hosting fees for our various products. There are a number of opportunities in this area. We are investing in automation and AI, which helps us to run a very complex business with a number of connection points with complex local requirements and find the most efficient way to route traffic. In addition, we will also invest in improving our support systems to manage this cost. On the sales and marketing side, a lot of the spend, of course, is going to go both into enterprise sales. It's going to go into making sure that we have the right self-serve capabilities and that we are using digital marketing efficiently to drive thousands of customers each month to our self-serve funnels. When we look at research and development, the new operating model that Laurinda showed at the beginning of this afternoon, has actually meant that we can align our engineering, our product, our onboarding teams very efficiently and look for silos, break down silos and remove inefficiencies. So that's a journey that has started. And of course, that's a longer-term journey. When it comes to G&A costs, I think we've already this year, seen the possibility to reduce our real estate footprint, which has driven multimillion kroner savings, and we believe that's something that we can continue to work with. In addition, we look at levers like the transformation programs that we are doing, which will provide more savings in the midterm, but also using lower cost locations for administrative and repetitive tasks. So let's transition then to the capital allocation piece, right? Firstly, if we look back here again, and this is our leverage story. We peaked at 3.4 turns. I think that was in -- on a pro forma basis at the end of '21 when we've done all of these acquisitions -- or sorry, in the beginning of '22. And we're now at 1.6 turns. During this journey, we have paid back SEK 4 billion in debt. We've paid back SEK 2.5 billion just during the last 12 months. So it's a pretty impressive journey when you look at this. We are now at a comfortable level, we believe. Our deleveraging has been, of course, retaining revenue, retaining gross profit, keeping our commercial momentum and in being very careful with cost, right, and also unlocking working capital, which has helped us through this journey. So given the strong position that we're in, with a strong balance sheet and continued cash flow generation, we do believe that we -- besides reducing debt can also, in the future, look at accretive acquisitions where it makes sense. The thesis underpinning this, which we continue to believe is true is that it's a fragmented landscape with a lot of different players within the cloud communications space. As we evaluate acquisition targets, we will be looking for a strong market position. We will be looking for a proven product, and these will be evidenced through sticky customer relationships. We want to buy something that is financially accretive to Sinch that adds to our key KPIs of profitability, growth, and cash flow. When it comes to synergy opportunities and timeline for integration, I think the important thing to Sinch is to be flexible. We want to retain flexibility. And then, of course, very important that we as in the past buy companies that have a strong cultural fit to the rest of Sinch. And then I want to very quickly go into through 2 case studies of previous acquisitions and how they've turned out because I think this is always an important proof point as well. Firstly, just looking at Pathwire. Parthwire was a cloud-based email delivery platform that underpins our main email products today, Mailgun and Mailjet, which we acquired in 2021. Besides the email product, it also strengthened our self-serve offering and our developer go-to-market capabilities. What we've done, of course, is we've tried to make sure that we retain the commercial momentum in these assets and also then transfer knowledge to the other parts of Sinch about self-serve capabilities and very importantly, also use our enterprise selling capabilities to sell email products, and you've heard some stories about email cross-sells, and we reported even a couple of examples in the latest quarterly report. So the result of that is that we've had a 12% growth CAGR over the last 3 years in the email brands that were part of this acquisition. And due to cost savings and efficiencies, gross profit has grown even faster at 16%. The second example that I'd like to highlight is our expansion to India. We -- or Sinch, and Robert probably as a founder can attest to this from even before the acquisition had used ACL Mobile to terminate SMS messages into India for international customers. So there was an existing relationship. It's -- Sinch India serves many of the largest Indian enterprises and global businesses across India. We have a market-leading position in both SMS, but also advanced messaging such as RCS and WhatsApp and Sinch India has contributed to the press release that we had today about us reaching 1 billion RCS messages in volume this year. So very happy with these 2 acquisitions as well. So just to reiterate our financial targets. And I think just a couple of points there on the midterm financial targets. It's important to highlight that these are what we expect to reach by the end of 2027. Of course, there will be a trajectory going into this because we need to build momentum along the way. We're not being very specific about what that trajectory looks like, but that's an important underlying assumption. And I would like to close by reminding you of the 4 key messages that I hope I was able to give you a little bit more clarity into why we believe that we will be able to deliver on these value creation levers. So with that, I'd like to thank you for listening to me, and taking the time to listen to me, and I'd like to welcome Ola, Laurinda, Julia, Nicklas, Wendy and Karin back on stage to join me as we field any questions that you might have.

Okay. So it's time for more questions and answers. Hands are raising up yes, okay. So one, state your name, where do you come from, and one question per person, and you think about more questions on there. I think, Erik, your hand was up in the end last time. So Erik, and then [ Fredrik ]. Erik. Erik is behind you. You next. Yes, yes.

So Erik Lindholm-Rojestal, SEB. Roshan, you mentioned some green shoots and there being some lag to seeing that in the financial reporting. I mean, can you go into some more detail perhaps on what these green shoots are and sort of when we should expect to start seeing those green shoots.

Yes. I can go for it. Thank you, Laurinda. Yes. So I think the 2 green shoots that we've talked about today, right, the 2 early signs. I think very importantly, first of all, all of the strong customer relationships that we are displaying the product integration story that Sean talked about. But if we look at starts, I mean, pipeline in our regions is growing significantly. I think some of the region leaders mentioned in their respective regional presentations, how that is developing. I said that when we look at won deals -- and again, remember that for us, won deal is not necessarily the same thing as GP in the next quarter because there's a ramp period, there's an implementation period. So there can be a delay, right? I think we've talked about this previously. But we're seeing won deals increase year-on-year by more than 15% so far in the year. So I think all of these are pointing to a strong trajectory. I think we have to -- when we look at the -- when will this be reflected in the financials, I think I just have to refer you back to what we said at the third quarter, which is to say we are expecting a slower start to 2025. But again, like I said during my presentation, I mean, we will not reach the 7% to 9% growth at the end of 2027 quite as a sudden happening, but rather, we have to see a momentum and trajectory getting us to that point in time. I don't know, would you like to add something?

Just concur. I think the other part of your question points to kind of a bit of product mix, quite frankly, right? And again, I think everybody fully understands and appreciates the decline on the network connectivity piece. But as self-serve in particular, as that continues to expand, and you see these outpaced growth rates here, those do realize faster than some of the larger deals that we're winning right now, right? So -- and we've talked historically about ramp could be anywhere for some of these larger deals in the 6- to 18-month time period. again, those are for the large ones, but then you have the -- what I call the flywheel of self-serve business. And Nicklas talked a lot about mid-markets, particularly in EMEA. Those will be faster ramps. So we've got a good mix to be able to start to see this trajectory that Roshan's talking about. So we're roughly flattish right now. We're talking about 7% to 9% at the end of 2027 on a year-over-year basis, you should expect us to start to see a ramp towards that.

Okay. Before Fredrik starts, could I have a question from the online community. What kind of new partnerships are we looking for going into 2027?

Julia, do you want to...

Yes, I can take that?

Yes.

So a mix of integrated ecosystem partners where we can embed our solution in that partner environment. So we actually turn off and show up where customers are consuming, right? So new CRM instances and other areas. And then strategic partners, here we can do joint go-to-market and selling with in the enterprise space. So a mix of that. It's probably different across the regions.

Okay. Fredrik Lithell from Handelsbanken. Two questions, if I may. You -- on the regional side, on your presentations, you show that you have direct and indirect sales. You want to boost sort of the reseller or the partner part of that. Is that a different sort of profitability level when -- if that would grow faster than the other ones would be interesting to hear the mechanism in that. And then Wendy, if you could talk about Asia a little bit, what would you need in order to boost and grow and turn bigger in the other parts of Asia than the Australia and India would be very interesting to hear that.

Yes, happy to.

Roshan, do you want to try on the margin side, please -- partners. Yes.

Yes, I could take the margin side. I think, firstly, just to clarify, Fredrik, right, the indirect part of our businesses, we are saying it, we are approaching it both through our own sales force to a certain extent and then through partners and ecosystem. So it's a mix, right? Now when we look at the margin levels, I mean, it's difficult to make the kind of conclusions that you're saying on a gross margin level because there can be differences in terms of the product mix there's differences in terms of where traffic is terminated, et cetera, and we tend to be heavier in some markets and partners and ecosystems than others. So I think it's difficult to make those conclusions. What we can say is that these are very efficient ways of selling because they don't drive a lot -- as much OpEx as having a lot of direct customers. So the net contribution of the bottom line can be over the longer term, more positive, so to say, from that customer base. But I think on a gross margin level, it's more difficult to make any conclusions.

And then on Asia, I mean, Asia, we classify as everything except India and Australia and New Zealand. So that's a very big landscape. And as you see, we're only really selling in a very small number of markets in Asia currently. So our business is quite concentrated. If you think about some of the markets particularly in Southeast Asia, like Indonesia, massive populations, massive base of mobile users. So we need to look at some of these markets and how we would enter them. Markets like Japan, like Korea, again, where we don't really have a presence today. My feeling is some of those markets that would be an acquisition that we would want to make to go into those markets. That's exactly what we did within our India business. And one of the reasons I think the business in India is so successful, given some of the organizations that I've worked for, is that we are not trying to take a global product and stuff it into a market like India. It was a product that was developed initially for the domestic market. Obviously, there's international sending, but it was developed for the international market. And I believe that's why we're being so successful there. So we need to think about that in the context of some of the other markets across Asia and how we enter those markets.

Okay.

And some of the investments for 2025 include some go-to-market capabilities within your region as well?

Yes. Absolutely.

Yes, some more salespeople.

Stefan?

Yes. Stefan Gauffin at DNB. First, I'm not sure if it's actually a question, but you have provided us with some KPIs today. And I think that's missing when we try to model the company. So we have the sales and gross profit per division, et cetera. But we missed some KPIs to be able to track your performance. So if possible, it would be helpful if you could provide us with -- I mean, won deals, net expansion rate, volumes, et cetera, just to see your progress towards your ambitions. The second one is more of a question. So if I understand correctly, the market is coming from 45% indirect sales, but you have only around 25% indirect sales. So why are you underperforming in that sense? And why should you be able to improve on that respect?

So I'll take a stab and then maybe, Thomas, you can jump up here as well if you have a microphone. And what we're seeing, Stefan, is that the growth going forward is expected to be 45% indirect. I wouldn't say we're necessarily underperforming at this point. It just has not been a focus for this company. You've seen a much more intense focus over the past year with regards to our partner program. We've shown some success rates there. already. Part of our investments for 2025, we'll continue to be investing in the partnership strategy. The other piece I would call out is the ecosystem partners. And I apologize, I actually don't know if that's coming through in the indirect charts that we showed or -- it is, okay. 500 integrations is quite substantial. And I'll ask Sean maybe to explain how we differentiate as far as that's concerned. But do you have something more on the market? Thomas, do you want to come up here since we've got audience members remote. Come on, come on up here.

I'll try my best. I'll squeeze...

Keep it short. We want some more questions.

No, I think it's a good question. I mean, we see a lot of opportunity for sure. We've targeted this selectively. And with the research we've done over the market, we think there is a much larger field we can address.

There you go.

There you go.

Okay. I'll take one question here and I think then it was Predrag. So I'll take one question from the online and that's about growth rates. He says here that we have seen higher growth rates from several competitors. Why is Sinch growing less than them?

I feel like I've answered this, but I'll continue to answer it, right? First of all, first of all, it's great that the market is starting to come back, right? We're excited by that, and that's very positive news. When you look at the product mix within Sinch, it's quite different than what we see in our competitors' product mix. When you look at it one for one, we're actually not too far off. In fact, prior to Q3, I would say that we were growing ahead of them in the apples-to-apples product categories. That being said, we did talk about in Q3, the fact that we did see a little bit of a slowdown here in the Americas, specifically from some pricing pressure. But listen, we're roughly flat at this point. We've demonstrated to you today that we're excited about the growth opportunities across a number of different vectors. We know exactly where we're putting our resources and where we're focused. And we've given you the midrange targets. Those midrange targets are going to require us to outpace the market in the product categories that we have today. So we will be executing well above what some of our peers are doing.

Okay. Predrag, did you get the mic? Yes.

Yes. This is Predrag Savinovic from Carnegie. I also have a follow-up question on the strategic partnerships because you have discussed them at length partnering to accelerate growth. To what extent are your partnerships unique because we can find within Salesforce, they have Twilio, et cetera, as well. How can you make sure you get prioritized? To what extent are you unique. What extra capabilities could bring to them within this ecosystem as a CRM vendor, for example. And I would also like to ask a question to Robert on RCS. At what speed are you currently seeing operators adopt this? Because on the presentation, it sounds like you're very enthusiastic about this as a growth driver. But when can we realistically see the effect in growth basically?

Okay. Thanks, Predrag. And we're going to pull a couple of people up here to help answer these questions. First of all, in terms of the partnerships. As you know, we have strategic partnerships and then we have the ecosystem partnership. So I'll ask Sean to talk about the ecosystems very specifically. You heard from one of our partners, and that's Adobe. We are their #1 partner for a number of reasons. And when we think about strategic partnerships, we're thinking about it in terms of the sell to sell with and sell-through motions, all of those combined and creating a strong relationship and a strong commercial model that's advantageous to both us and them. And we don't spread too thin on the strategic partnership side, right? We talked about a very small handful of those relationships. We will expand slightly in 2025, but we don't want to spread ourselves too thin so that these relationships, they take a lot of work, right? And it takes a lot of work from both sides. So for that partner to be able to spend enough time with us to make it meaningful is, I think, a unique position that Sinch finds itself. Answer quickly on ecosystems.

So in many cases, the indirect sales motion for us, those partners -- technology partnerships are actually exclusive because they are building their applications on our infrastructure using our APIs. So they actually go through a very careful evaluation of the market, right, us and our peers. And through their due diligence, they actually select us and they build their application on us. It's extremely sticky. So in many cases, that is just through their own evaluation. Laurinda touched on some of the other strategic partnerships. It's quite similar, while it may not be technically exclusive. We have a strong preference for Sinch with many of those ecosystem partnerships. So a Salesforce, a HubSpot, et cetera. When they prefer us, they promote us, right? We rank higher in their marketplaces. Their sales teams talk about us more frequently. Now that takes both a great product and a lot of work in terms of developing the relationship. So it doesn't come for free, but we do earn that most of the time.

Okay. I think the last question we'll go to... Yeah, sorry Robert.

Sorry, Robert [indiscernible] your RCS question.

Yes, it's another 15 minutes now. Okay. So RCS, we believe this is the beginning of an S-curve. So we're still early stage. '25, we believe we'll see the unlock of a couple of the largest markets. So America, the big markets in Western Europe is going to start to ramp. That's where both Google are focusing and Apple is providing iPhone support. There's a lot of moving targets, which is why this is tricky. I just came from Asia. I met with 3 out of the 4 Hong Kong operators. They are asking us to push Google to allow them to launch. So the sentiment in the market has gone from lukewarm to scorching with the Apple announcement. So Google now has a, I would say, capacity constraints in how fast they can roll out new markets. And Apple, as we've seen, they launched 8 markets now for P2P RCS, of which 3 have been enabled for RCS business messaging. They will launch several tens of markets during '25. So I think '25 will see us grow and '26 is really when we hit kind of global mass market. extremely hard to quantify what that kind of means. We've just announced today that we did our billions RCS message. We will do multiple billions next year, for sure. But it's that 5 or 10 or 15, we will see.

Viktor. Last question we'll go to Viktor.

Viktor Högberg from Danske Bank. So Roshan, just thinking about the 12% to 14% margin target, the low end. Could you expand a bit on that because you're already there? Are you implying that you won't reach it that you're seeing a margin decline in the near term before it turns up again? Or just some explanation on the margin targets and the range of it.

Yes. I think -- I mean, obviously, what we said is we've created headroom this year, right? We've executed on our cost savings programs. We've seen margin expansion going into 2024 and which is how we've ended up at 12.6%. Now to be able to exploit all of the opportunities that we're seeing and accelerate growth, which was not a key focus for us during a period of time, as I referred to earlier, we will need to invest a little bit in sales and marketing and product engineering resources. Now I think it's difficult to say, standing and say that, that necessarily deprecates margin in the short term because a lot will depend on the gross profit trajectory, right? So I don't want to kind of step ahead of myself a little bit when I say that. But those investments will need to be made to drive -- to drive growth acceleration. Again, we'll be cautious. We'll make sure that we see the growth and then invest more, right? So our -- I guess our commitment by saying 12% to 14% is saying, we're going to be disciplined. We're going to make sure we manage this tightly. And overall adjusted EBITDA will grow handsomely if we reach our top line growth ambitions.

Okay. Thank you. We will end this Q&A session now. And we will move on to the next -- to next item, you can sit down. Thank you.

Okay.

So now for the closing remarks from the Chairman of the Board, Erik Froberg, please.

Thank you very much. My name is Erik Froberg. I have been an investor since 2011. I've been at the Chairman since 2015. I represent Neqst, and we're the largest investor in Sinch since 2011. We're also a very active investor. I was very involved in the IPO process. I'm involved in strategy development. I've also been very involved in all of the acquisitions and in financing of the acquisitions. One thing that I spend a lot of time on every year is structuring the management incentive programs. for Swedish listed companies. These are quite complex to structure. When we invested, we originally set out to build the leading company in the CPaaS space. And starting in 2016, we had a string of acquisitions, which led to that we in 2021, had positioned ourselves to be able to do 3 very large and transformational acquisitions. I say large, because we spent on these acquisitions, $1 billion, $1 billion and $2 billion, respectively. They also increased the size of the company by Factor 3x in [indiscernible]. Transformational because this meant that we positioned Sinch as a global leader in the CPaaS space, the natural #2 right behind Twilio. Transformational also because it meant that we added capacity and confidence that we've not had before. This was email, voice services. It was product-led go-to-market for small and medium businesses. However, these large acquisitions also led to turbulence in the company. We stretched ourselves both financially and from an operational perspective. This led to that we in the summer of 2022, decided to change CEO. Johan Hedberg come in as interim for 9 months, starting summer of 2022. In April 2023, Laurinda joined us, and Laurinda has been here for 19 months now. What has then happened since 2022 when we started this change? Well, when Johan became CEO after the summer of 2022, directives from the Board of Directors was the following: number one, stabilize the group and preserve value of the recent acquisitions; number 2, generate profits and significant free cash flow; and number 3, focus on organic growth. And this was also the order of priority that we set from the Board of perspective. We think today to conclude that we had delivered on the first 2 targets. But we have not delivered on the last one, organic growth. We have reduced our net debt from when it peaked at around 3.5x adjusted EBITDA to 1.6x in the last quarterly report. We've been more profitable, and I say this, we've been more profitable and we've generated more cash than all our overseas competitors. However, our organic growth has remained low in low single digits. When Laurinda joined Sinch, she analyzed the situation. She started to make changes, and she started to change the management team, and we've added a number of new management through the group leadership team. She led a reorganization in the beginning of this year, which was a very significant reorganization. And the aim was to make the organization more efficient to realize synergies and to ignite organic growth. I also want to point out that we are today in a very different situation from a balance sheet perspective. You've heard our capital allocation strategy being presented here. We want to reduce debt. That's priority one. Secondly, we want to use the funds to do M&A, strategic M&A; and thirdly, to distribute funds to shareholders. We've now reduced debt so much. So we've started to look at strategic M&A opportunities again. Alternatively, given the improved availability of cash in the company, if the Board and I say if the Board considers that the share price is low, we will consider share buybacks. Finally, I want to thank the management team and all others who have presented today here and just give a short perspective that I have as a long-term investor. If I go back and look at the company's performance, in 2015, the year of our IPO, revenue was SEK 800 million and profits were SEK 80 million. In the last 12 months, we've generated SEK 29 billion of revenues and about SEK 3.5 billion of profits. If you look at that, that's an increase in profits of about 40x. Now for me, as an investor, it's important that we don't dilute ourselves and dilution during this time has been about 2.5x. So 40x increased in profits and 2.5x increased in number of shares. As a long-term investor, I'm very satisfied. And I'm looking forward to long-term value creation going forward from here as well. Thank you.

Okay. Thank you, Erik. Very much appreciate that, and your support. We're good? All right. We changed -- that's me. We're into peg. All right. Well, again, thank you so much for spending the time with us today. I really hope that we left you with the key messages. As I started out the day, I wanted you to walk away with a better understanding of 3 things: the market in which we play and how we win. The transformation we're undergoing, the why. Hopefully, we've shown that to you and how we're progressing. And then finally, the value creation agenda for this business. I continue to be extremely excited. I'm so pleased that you have the opportunity to meet many of the management team who you don't traditionally have the opportunity to meet and hear from the voice of our customers, why we're winning, how we're winning. That is what generates growth for this business, right? It's not me sitting in Stockholm or New York, where I currently -- well, soon to be living. It's not me sitting in the office, hanging out with Roshan and Thomas all day. It is the people in the market, the people that are developing the products. It's the people who are marketing the products. We have, by the way, many of our other management leaders here as well. I want to thank them for all of their hard work. This takes more than a village, I would say. We're 4,000 people strong across Sinch. It is a culture of people who are passionate about winning. We are passionate about our customers, and we will continue to drive value creation with growth by continuing to be focused on our customers. So thank you again for attending here. I'm going to just ask Ola. Thank you, Ola, for guiding us through the day so nicely and for all of your terrific work here to get us ready for Sinch's first CMD. So let's give a hand to Ola.

Okay. Thank you, Laurinda. And so that was our first Capital Markets Day. Feels, yes -- precisely, a bit of offload. So but there is no need to stop the learning experience here. We will hang out. Join us for a while and come and have a chat. And you remember that last demonstration, it's still there. It's still open. And maybe now you can have a glass in your hand at the same time. Thanks for coming.