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LINK Mobility is proving that M&A discipline scales. Margins are expanding, cash is compounding, and RCS volume is growing triple digits, yet organic growth fell 7% as the market ran out of easy volume.
Editor’s Note: On Monday, we covered Klaviyo’s Q3 results. Yesterday, Sinch. Today, LINK. Let me know what you think of splitting the newsletter into three installments. It makes each one easier to read, but I know it also adds to inbox load. The alternative—a single digest-style summary email—feels like a poor reader experience. I’d love to hear your thoughts.
The Good: Profitability, Cash, and Confidence
Pro-forma gross profit rose 12.4% YoY, with gross margin up 2.3 points to 23.7% as higher-value traffic and conversational channels offset flat SMS volumes. Adjusted EBITDA grew 9% YoY to NOK 268M (~$26.8M) for a 13.5% margin, underscoring scalability.
Management also introduced a shareholder return policy targeting ~NOK 300M (~1 NOK per share) in 2025 through buybacks and cancellations.
CEO Thomas Berge noted that cash generation is now so strong, “we realistically can’t deploy it all into M&A,” allowing LINK to both fund acquisitions and reward shareholders.
The Interesting: Conversational Growth, RCS Momentum, and M&A Scale
Berge called Q3 a milestone in balancing organic growth and integration. RCS traffic grew 134% and WhatsApp volumes surged 368%, positioning conversational and OTT solutions as LINK’s clear growth engines.
Examples stand out:
- Logistics: WhatsApp chatbots cut inbound calls by ~30%.
- Banking: RCS anti-fraud campaigns delivered 4–8× higher gross profit per event.
In Q&A, analysts asked whether conversational gains simply replace SMS or create net-new revenue. Berge’s answer: “both.” Some use cases cannibalize SMS, others expand conversations, but all increase gross profit because ROI and engagement are higher.
LINK signed €43M in new customer contracts, up 53% YoY, its best third quarter on record. Roughly 30% came from new customers, led by logistics, finance, insurance, and e-commerce verticals.
The M&A pipeline is the most active in company history: ten prioritized targets representing >€50M in cash EBITDA within a 6–9× multiple range, with six already in due diligence. Berge confirmed that the SMS Portal acquisition will close by late November and consolidate from December 1.
On Bird’s unsolicited bid for CM.com, Berge acknowledged that it underscores the return of CPaaS dealmaking across Europe.
The Unknown: Enterprise Headwinds, Pricing, and iOS
Organic revenue fell 7%, even as gross profit rose. The decline came primarily from a handful of large enterprise clients tightening budgets: a 2- to 3-point drag that management expects to fade by early 2026.
Analysts asked if more OTT traffic means lower margins. Berge said pricing is steady for now and might ease a bit at scale, but profits should keep rising because each deal now bundles in more software and support.
The RCS on iOS rollout remains the biggest operational wild card. LINK expects launch in Q1–Q2 2026. Sales teams are trained, templates are ready, and lessons from France and Italy suggest faster adoption, though meaningful financial impact likely won’t appear until late 2026.
Finally
LINK’s quarter shows expanding margins, disciplined cash management, and a strong acquisition pipeline. Yet organic growth remains elusive, and RCS talk is still about volume, not value.
And that’s worrisome.
Like Klaviyo and Sinch, LINK’s earnings flash yellow for 2026. Yes, you can sustainably scale revenue by buying it through disciplined M&A—but both the core business and each bolt-on still need to invest aggressively in R&D.
In an AI world where business models are being rewritten every six months, it’s hard to tell whether the problem is underinvestment or simply a time lag.
Either way, time is running short.