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It’s not just Amazon’s Ring that’s going into founder mode. Route Mobile announced the return of Founder Rajdip Gupta as CEO and managing director. More on the founder mode label later.
Rajdip’s return is a response to strong headwinds. Like its peer Tanla (reporting next week), Route Mobile faces flatlining A2P SMS volumes; rapid WhatsApp adoption in India but with significant pricing pressures; persistent ILD softness, and the ever-slow arrival of RCS.
The Good
Rajdip emphasized disciplined growth, cost optimization, and deeper integration with the Proximus Global companies (BICS, Telesign, and Route Mobile). This is critical, given the competitive and structural pressures across CPaaS.
Route Mobile deliberately stepped back from lower-margin A2P SMS deals this quarter, prioritizing margins over volume. The trade-off worked: Despite a 4.8% YoY revenue decline, gross margins improved sequentially from 19.3% to 21.4%. This disciplined approach positions them better for sustainable profitability rather than chasing short-term growth.
Interestingly, Route Mobile captured indirect upside even when a major client began sourcing SMS directly from operators. The same operator was already using its firewall product, which meant there was indirect revenue lift.
Operationally, higher employee churn (sixty-three exits, twenty-six hires) was explained as intentional centralization and post-acquisition restructuring, rather than integration difficulties.
Rajdip also highlighted promising strategic alliances underway with Salesforce, Infosys, and Tech Mahindra, and ongoing pilots of telecom APIs—including fraud prevention through Telesign—which hold meaningful long-term growth potential.
The Interesting
SMS messaging volumes remain flat YoY, echoing Tanla’s recent experience. In contrast, WhatsApp is surging in India, but aggressive pricing cuts (12–13% dilution this quarter) significantly dampened revenue growth from this channel. Monetizing rapid adoption without sacrificing pricing power is an ongoing challenge.
Meanwhile, Route Mobile continues investing in RCS, but meaningful monetization frustratingly lags.
The Unknown
Route declined to offer revenue or margin guidance for FY 2026. This silence raises questions about near-term visibility and confidence in forecasting.
The pressure from the network API from Aduna and others is causing margin pressure and accelerating the commoditization of basic CPaaS offerings. Route Mobile’s firewall solutions offer a clever indirect revenue stream, but it’s unclear how scalable or broadly applicable this strategy can be if more clients follow suit.
Finally
Remember when I mentioned how my analyst pass got me access to one on one executive conversations at Mobile World Congress Barcelona? One of those conversations was with Rajdip and most of the Proximus Global / Route Mobile leadership team.
A lot is said about founder mode, as if only founders can feel ownership of a company’s success. That’s not true, but founders, just by their tenure and being the “first parent” understand what ails the company faster than an executive might.
Rajdip, for example, showed a high signal-to-noise ratio. He listened to what I had to say, was genuinely curious, and asked insightful questions that cut to the chase. It was also clear that just because he may not know the answer doesn’t mean he won’t get it done. He displays humble ambition. It will be interesting to see where he takes Route next.
Disclaimer: This is not stock advice. Everything about the messaging business interests me, including asset pricing. Use your judgment to invest your money.