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This year alone, LINK has spent over $160M in acquisitions, and it’s not done yet. So, yes, while we will unpack its Q2 earnings, we’ll also dive into its M&A strategy and see what we learn about private valuations.
But first, the BLUF.
LINK Mobility tightened margins, accelerated CPaaS contract wins, and pushed further into global markets with the SMSPortal acquisition. Organic revenue softened, but gross profit and EBITDA kept expanding. RCS and OTT channels are shifting the contract mix, though iOS timing remains the key unknown.
The Good
Financial strength shows in expanding margins. LINK showcased improved gross margins (24% from 20.9% a year ago); gross profit rose 11.4%, and organic growth came in at 5%.
The company’s real adjusted EBITDA this quarter was NOK 212M ($20M USD), giving it a 12.1% margin. That’s cash in the bank without accounting hits like depreciation.
Then there’s the pro forma figure—NOK 283M ($27M USD) with a 14% margin—which assumes the SMSPortal deal had been part of the family all along. It’s useful as a guide for future earnings.
Cash generation (NOK 757M/$70M USD) remained strong, converting 96% of EBITDA into net operating cash flow over the last twelve months.
Even at a $100M upfront cash outlay, the acquisition was struck at just 4.6x cash EBITDA, leaving leverage at 1.7x EBITDA, comfortably within policy.
The Interesting
If The Good was about stability, The Interesting is about momentum. That momentum showed up in contracts.
New contract wins reached a record NOK 50M ($5M USD) in gross profit value, with CPaaS now representing more than half of bookings. CPaaS gross profit grew 60% YoY to NOK 25M, while A2P declined as the mix shifted.
Within CPaaS, OTT solutions led the way, growing 70% YoY, and RCS volumes jumped 4x to NOK 12M on the back of wins in banking, insurance, supermarkets, and retail.
The company believes 75% of contract value typically hits the P&L within a year, with advanced solutions like RCS taking longer but ultimately carrying higher margins. At the same time, WhatsApp’s sub-operator pricing is improving LINK’s bargaining power, allowing it to shift traffic at lower cost.
The company continues to emphasize its local-touch sales model, with ground-level staff across eighteen countries. Sales has and will always be a full-contact sport.
The Unknown
While momentum is clear, the timing isn’t. The biggest strategic variable remains RCS on iOS. LINK expects Nordic adoption in early 2026, but the timing is entirely dependent on Apple.
Enterprise spending cycles also add volatility. A handful of large clients trimmed nonessential SMS updates this quarter, cutting growth momentum by two to three points. This underscores how much the business depends on big buyers adjusting their budgets.
Net retention slipped to 84% (from 114% a year ago) due to departure of low-value traffic. The company expects retention to normalize to the enterprise standard 105%. But in that gap lies the execution risk.
Regionally, performance is uneven. Central and Western Europe are delivering healthy gross profit growth and strong margins, Northern Europe is flat, and global messaging revenue fell 31% even as gross profit in that segment rose 27% from traffic mix improvements.
Capital allocation is another open question.
Accretive M&A remains the top priority, but with rising cash generation, dividends or a dual-track strategy are on the table.
What’s also unclear is whether LINK wants to be valued as a consolidator or as a product-led platform. If Twilio, Klaviyo, or Braze are any indication, investors love a product story. LINK is telling a different one.
LINK’s M&A Playbook
LINK doesn’t hide what it looks for in a deal. The ideal target is a local leader with a durable customer base, steady cash flow, and minimal tech debt. The price range is tight: 6–9x cash EBITDA before synergies.
This year’s purchases make the pattern clear. FireText and SMS Works gave LINK a dominant position in the UK, while SMSPortal opened a growth front in South Africa where SMS penetration is still 76% and competition remains fragmented. These are bolt-ons: Profitable businesses folded into the mix without straining the balance sheet.
That discipline signals to sellers what outcomes they can expect, but it also narrows LINK’s room to maneuver. It’s both the moat and the cage. Investors reward the discipline because it guarantees cash flow. But the same rules keep LINK out of the product-led tier where Twilio, Klaviyo, and Braze earn their multiples.
Finally
Early in Game of Thrones, Tyrion Lannister advises Jon Snow: “Never forget what you are. The rest of the world will not. Wear it like armor, and it can never be used to hurt you.” His advice is simple: Own your identity and it becomes your superpower.
LINK seems to have taken that lesson to heart. Its M&A playbook and margin focus have limits, but it wears them like armor—steady, disciplined, and unapologetic. That may keep it out of the product-led club, but it gives LINK the staying power investors value.