Three Key Learnings from Twilio, Sinch, and LinkMobility Earnings

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Twilio, Sinch, and LinkMobility together brought in a total $7.6 billion in revenue for 2023, and there are three learnings from their earnings reports. 

Efficiency Remains a Priority 

Be it the -$4M to $533M YoY swing in non-GAAP operating income by Twilio, expanded margins by LinkMobility, or stable margins by Sinch, everyone made significant progress in efficiency. 

Sinch, for example, paid $3.5 billion for acquisitions, most of them executed in 2021. While it helped top-line growth, by its own admission it didn’t add anything to the bottom line. Fast-forward to 2023, revenue has jumped to $2.8 billion (from $0.5B in 2019), but so has gross margin (27% to 33%) and opex margins. 

No 2024 Growth Predictions

Everyone is expecting growth, but no one will publicly commit to a number. While Twilio gave a projection of ~$1B in revenue and 5–6% organic growth, none of the players gave any full-year guidance. The focus continues to be cross-sell and up-sell (Twilio and Sinch) and in investment in local markets (LinkMobility). 

RCS Is Coming

Twilio acknowledges that RCS will be big but won’t affect its near-term outlook. Sinch is betting big on RCS, and LinkMobility is already seeing margin expansion in key markets thanks to growth in RCS and WhatsApp. 

This is a reflection on market maturity and the challenges of scale. RCS is a mature messaging medium in most of the EU, and LinkMobility is capitalizing on its hyper-local focus within its various European markets. However, if Link’s success is any indication, Sinch and Twilio will see a surge from RCS revenue, just not in 2024.

Finally

There’s a lot to learn about each of the companies and the broader industry from their earnings calls. We’ll reserve those discussions for when Bandwidth, Klaviyo, and Upland announce their results, at which point we’ll also introduce Tata Communications into the conversation. 


Disclaimer: This is not stock advice. Everything about the messaging business interests me, including asset pricing. Use your judgment to invest your money.