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If execution excellence is about doing what you said you would do, then Twilio, Sinch, and LINK all passed the test with flying colors. Sinch hit its profit growth target and prepared the market well for its lackluster organic sales growth. LINK surpassed its profitability targets. Market leader Twilio not only posted its best quarter ever but also delivered its first GAAP quarterly profit.
All three companies are bullish on RCS—though to varying degrees—and confident in their strategic plans, without relying on economic tailwinds to get there.
The Good
Twilio did exactly what it needed to: $1.195 billion in revenue (+11% YoY), its first-ever GAAP operating profit ($14 million), and another quarter of double-digit growth. Messaging revenue accelerated, email held strong, and Cyber Week set records. Enterprise sales surged, with 78 large deals ($500K+) closed, up 47% YoY. AI is now fully embedded into Twilio’s engine—90% of the Forbes 50 AI startups build on Twilio, and AI-driven automation now handles 80% of inbound sales leads and 75% of customer support tickets. Twilio is proving that CPaaS at scale can be profitable, but this isn’t just about hitting financial targets. The company is moving upmarket, securing bigger deals, and turning AI-powered customer engagement into its next act.
Sinch and LINK stayed focused on profitability and cash flow. Sinch’s Americas segment drove 60% of gross profit, while APAC grew 12% YoY, helping offset weaker organic sales. LINK posted 10% organic EBITDA growth, kept costs tight, and continued its intentional retreat from low-margin global messaging deals. RCS and WhatsApp now account for 40% of LINK’s new contracts. Sinch’s cross-sell push is paying off, with email customers expanding into SMS and other channels. Both companies are running a disciplined game—growth isn’t fast, but the financials are solid.
RCS is moving, at least in Europe. LINK is betting on RCS as a revenue driver, particularly as Apple rolls out iOS 18.1 with RCS support. Sinch is taking a phased approach, starting with richer messaging before shifting to full conversational engagement. AI and RCS are part of the long-term vision—but the revenue impact is still TBD.
The Interesting
Sinch and LINK are back in the M&A game, but this isn’t 2021. LINK has 12 acquisition targets in play, with four already in due diligence. It closed three acquisitions in 2024—Easy4U in Portugal, NRS in Spain, and Reach Interactive in the UK—expanding its European footprint. M&A could add up to 10% revenue growth in 2025. Sinch is signaling it’s ready to buy again, now that its efficiency drive is largely behind it.
Twilio, meanwhile, isn’t shopping—it’s doubling down on AI partnerships. AWS, OpenAI, Databricks, and Snowflake are all in Twilio’s corner, making it clear that instead of expanding through acquisitions, Twilio is positioning itself as the backbone of AI-powered engagement.
Another major shift: Twilio is becoming an enterprise-first company. Its SMB-friendly, self-serve roots aren’t gone, but the company is moving upmarket fast. 78 large deals ($500K+) closed, up 47% YoY. Self-serve is still part of the mix, but cross-sell and multi-product deals are taking priority. The strategy is clear—land an account with one product, then expand—but the bigger question is: Who’s losing these deals to Twilio?
Sinch is also expanding its footprint, but instead of acquisitions, it’s pushing Sinch Engage, its SMB-focused platform, deeper into Europe. It launched Sinch Engage in France, Germany, and Spain, adding WhatsApp, RCS, and SMS support for businesses looking to scale messaging automation. Sinch Engage has already gained traction in existing markets, and its expansion signals that Sinch sees real opportunity in the European SMB sector.
And Finally, The Unknown
Can Twilio, Sinch, and LINK Escape the Messaging Commodity Trap?
Twilio posted its first-ever GAAP profit, but can it sustain the momentum? Messaging gross margins dropped 40bps YoY, driven by higher low-margin messaging volume. Twilio says it expects to remain GAAP profitable in 2025, but its communications expansion rate (108%) is built on volume, not margin expansion. The model works—but only if enterprise adoption keeps scaling.
Sinch and LINK are pulling away from the low-margin messaging game, but can they pivot fast enough? LINK saw an 8% increase in enterprise messaging revenue—a good start, but still small compared to the overall scale of global messaging. Sinch’s self-serve and cross-sell efforts are showing promise, but enterprise deals take time to close. Both companies are moving in the right direction, but the pace of transition is the big unknown.
Looking ahead, 2025 is filled with question marks. Twilio expects 7-8% revenue growth but is pushing internally for double digits. Sinch is preparing for a soft start, despite strong bookings. LINK is betting on RCS in Europe, but U.S. adoption remains slow. AI is the big wildcard—everyone is investing, but no one is monetizing it at scale yet.