Welcome to the end-of-year report, January to December 2019. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question-and-answer session. Just to remind you, this conference call is being recorded. Today, I'm pleased to present Thomas Heath, Chief Strategy Officer. Please go ahead with your meeting.
Thank you, operator. Welcome everyone to this Full Year Results Presentation for the year 2019 and Q4 Results Presentation with Sinch AB. My name is Thomas Heath. I'm Chief Strategy Officer and Head of Investor Relations. With me in the room today is Oscar Werner, our CEO, and Roshan Saldanha, our CFO. With those introductory remarks, I'll hand the word over to Oscar.
Thank you, Thomas. I also want to welcome you all to this report. If we can start right away, we'll go on to slide number two, please. This is a slide many of you have seen before. Every quarter we are updating the numbers. As you can see, there are quite a few things that have changed in this quarter. We have the past revenue in the past 12 months, up to SEK 5 billion. Adjusted EBITDA in the past 12 months, up to SEK 574. The market cap has moved quite a bit lately, as many of you know, to around about SEK 20 billion. We're up to 722 people at the end of the quarter, both employees and contractors. This is up significantly. A lot of that is driven by acquisitions, as you know.
We are in 33 countries where we have local presence and local sales staff presence, which I think is just showing how truly global this market is. We increased number of engagements to 40 billion on a run rate basis, if you take the numbers that we have right now. The remainder are obviously very similar. We're doing customer engagement. We're scalable over cloud communications and then messaging, voice, and video in that order. We're serving a lot of large U.S. tech companies. Don't think I need to go through the rest of this slide, but as a principle, you can see the change in this type slide. Move on to slide number three, please. This is something that we thought was fun to show all of you. It's a little bit internal. It's called a Mentimeter.
I think we asked the staff in an all-hands meeting if you can all submit one word that sums up 2019 for you. This is around 230 or so people from Sinch sending in their suggestions. The more people that vote for a specific word, the bigger it becomes in this word graph. You see, this is what people internally believe sums up 2019. We have the words growth and success and exciting and team, and then combined with words such as baguette and other things. It's a little bit of what we feel internally, but also as you can see, a lot of hard work and very busy, et cetera. Next, if we then go to slide number four. This is a marketing campaign we did. We're gradually scaling up our marketing efforts.
The main reason and the main goal for marketing organization is to drive leads to sales. We think we can increase sales efficiency a lot when we drive more leads automatically from marketing. Automatically is the wrong word. Drive leads from marketing. One of the things we did here was we discussed once and we said, "Hey, there's so much negativity in the world.
A lot of the comments are so negative in so many different forums." We said, "Well, let's launch something where we fight world negativity or fight online negativity," where we did a campaign called Text Humanity, where we partnered up with some nonprofit organizations and said, "All right, let's do a positive message switchboard." The way it works is basically, if you send a message via WhatsApp or text message or other channels into this switchboard, you write something positive, you write your name, and you get a positive message back in order to counter all the negativity that is in the world. We think it's fascinating to see how much positivism you can get out of this. So far, we have seen 55,000 net positive messages exchanged between people in around, I think, 60 different countries.
A very large interaction of positivism, which we think is super positive. Going to the next results, slide number five. On the gross profit and EBITDA level. That's what we focus on, as you know, since the past year, our revenue is large and varies between geographies. We think that the correct measure is a gross profit and an EBITDA. This quarter, we had a 42% growth in gross profit and an 82% growth in EBITDA over Q4 in 2019. I will comment more on why we have those results a little bit later in the presentation. If we then go on to slide number six. The first thing that you need to know in any business that is growing well and consistently, it's about the market.
That's probably the single most important factor, and the next most important factor is the people in the business. We are in the growth market. I've said this several times before that the fascinating thing, I think, about with Sinch is it has the combination of being a profitable here and now business and an attractive business for the future, which can drive growth. I think this slide sums up the two major aspects to that. The messaging market as such, on A2P SMS messaging, it's a SEK 17 billion market size, and that's where we make the majority of our profits, and the majority of our revenue and gross profit. That is growing well, and it's our profit machine, so to speak.
We have the CPaaS market, where it's the software value on top of that, which is the high growth market, which has had a growth of 60% CAGR roundabout, where we supply various forms of more advanced and more intelligent software modules on top of just delivering the message or just to deliver the phone call, if you will. That's the two aspects of the market. It's growing on both these accounts, and that's the two reasons why growth. Next slide, please. We play, as we have been talking about several times, in two different areas. First, the connectivity layer. This is completing a phone call, making sure that enterprise A can call customer B, or that enterprise A can send a message, WhatsApp, Facebook, text, what have you, to consumer B. That's the connectivity business. It's making sure you can connect with these messages.
Like we said, a Software-as-a-Service on top, where it's an additional software's value add, which is additional software modules, which may be you want a web-based graphical user interface to send that message. You don't have to program to an API, or you want to mask your numbers so that the receiver can't see who's calling, or you want an AI service in order to respond to the message you got as an enterprise. You don't want to have an operator phone. You want to have an automated response there. You buy an additional service. Of course, we would charge an additional fee for that, which becomes a more classic Software as a Service business with high margins. Go on to the next slide eight.
We have been doing several acquisitions over the past years, and in this quarter, you can see a significant effort or impact from both myElefant and TWW acquisitions. We do acquire companies both in the technology go to market, where we want to add a software module, add a functionality that we can upsell our existing base and new customers too. The other area is scale and profitability, where we acquire into the connectivity area, which is the scale and profitability, which is represented by TWW. These companies are typically larger, more profitable, and in the yellow part here, while they're smaller and more explorative in the purple part, in the technology part. Go to the next slide. Looking at October to December, like we said, we had gross profit rising to 42% to SEK 439.9 million.
We had adjusted EBITDA rising to 82% to SEK 199.5 million. We had adjusted EBIT excluding the acquisition-related amortization of SEK 185, you have a profit after tax of SEK 94. The big difference there between the SEK 185 and the SEK 94 is the acquisition-related amortization that we do, that are non-cash flow impacting. We think the EBITDA is the best, then the EBIT, you can see it's relatively close between EBITDA and EBIT. The reason is obviously that we don't capitalize a lot. We take them as straight over OpEx. Organic growth in gross profit is 23%, you can see the difference on the myElefant and the TWW acquisitions. It has a large impact on the growth levels in this quarter, which is why we made them, of course. You can also see that it's a very scalable business model.
We have high scalability, that means that EBITDA grows faster than gross profits despite increased OpEx. When traffic volumes increase, our big customers are starting to send a lot, a lot of that drops down to the EBITDA level, which is just a fact of a scalable business model. We should also say that in this quarter, seasonality plays a strong and noticeable effect. Q4 has been the strongest quarter traditionally for us. In this quarter, it's an even larger effect, both due to the TWW and myElefant acquisitions, who both are skewed to Q4. We're seeing an increased kind of effort on Q4 since we've been able to deliver well for the big senders there. They tend to give us a lot of traffic during Q4. That effect has been strengthened during this quarter, obviously resulting in the 82% growth on the EBITDA level.
Let's go to the next slide. The key growth drivers is, like we have said before, on the rising message volumes with large U.S. tech companies. They do see that we have high-quality delivery, and they do trust us with their messaging. Number two is the growth in voice and video. We see a good trajectory in the voice and video business, and we're continuing to invest in that. The third one, noticeable, significant in this quarter, is the acquisition of TWW and myElefant. That's the three main growth drivers, you should include them on the seasonality side. Of course, that's an effect on the quarter. We should say we're growing both with new and existing customers, both those factors are in play in this quarter. Next slide, please. We're investing in four areas.
As you can imagine, when you are in a business in a market which is developing well and the business that is doing well, you need to continue to invest in order to keep up this growth. It's both forward-looking investments and investment just to handle the actual growth and the number of customers and the traffic volumes that we have. There's relatively large areas where you need to focus on. There are four areas. It's to grow with existing customers, so it's both on the platform scalability side and on the key account management customer handling side, is investments we're doing. We have an operational efficiency. We want to keep and increase our scalability. We're looking both on the COGS efficiency, on the automation, on the client self-service tools.
It's a long-term investment theme that we think, and we think there are more to do there, even though we think we're scalable. We think there are significant improvements we can do. We are investing in sales and marketing, both on the lead generation side, on the marketing side, and on the new sales focus. We want to expand our client base and have a broader client base. On the international expansion of the personalized video products. Of course, we're investing organically in the new technology, so software for advanced interactive messaging, new channels like WhatsApp, RCS, and RCS as a service for the mobile operator. These are the four areas. If we go to the next slide. Looking at the messaging segment being the biggest, as you can see, we have rising volumes, and then rising revenue, gross profit and EBITDA.
From a macro perspective, business is shifting from email to mobile messaging. That's the underlying trend, due to the fact that it's more efficient. The underlying logic here is you got, with mobile messaging via any of these channels, you got a 98% open rate, and you got a read rate of some 95% within two minutes. That is higher than email. It also has a more limited content. If you want to reach somebody, this is a very effective channel, and that's driving the underlying growth. myElefant and TWW are included since mid-October. We're doing investments in the next-generation messaging side here. As you can see, the spike in Q4, acquisition related and seasonality related, that is driving that growth. On the message volume side, you see it's a big jump this quarter, primarily acquisition related.
You see the big jump in the last quarter on the higher number of transactions per month. In 2016, you saw the acquisition of mBlox, how the jump played out there. There you see the two acquisition-related jumps. There's also growth from existing customer, like we said, and a positive seasonality in the fourth quarter, which we should not underestimate, where our large customers are sending more, and that gives us the big drive in Q4, and seasonality-wise, Q4 is much stronger than Q1. 41% growth in transactions and 49% growth in gross profit quarter over since a year ago on a Q4 basis. Gross profit per transaction, here you see some interesting trends. We've been gradually, over the last quarters and months, increasing the gross profit per transaction on a rolling three-month basis.
Here you see it going down a little bit, that is primarily due to the acquisition of TWW, that have a lot of messages at a lower price point, basically. That's what's driving that. Part it is because the market in Brazil is very large, and part it is because it's competitive, so depending on what you have. Part it is also since TWW does not have a lot of additional services on top or value-added services on top, so when you acquire large SMS companies, you will see that type of effect. On the other hand, you see a large effect, positive effect on the profit side. You can also see the OpEx per transaction going down. That is mainly actually driven by economies of scale and to some extent increase in volumes.
Partly TWW, but a large portion of this one is that the mobile is scalable, and when our large customers are increasing traffics, we don't have to add as much OpEx. You have a decrease in OpEx per transaction, which we obviously think is positive. You can see the scalability in the business and in the seasonality one, and we have a quarter where large sender is sending a lot. We don't need to add as much OpEx to support the traffic. Next slide, please. On the margin side, we've shown this graph a lot of times. We're very proud of it. The messaging EBITDA or profit over gross profit.
As you can see, traditionally 45% of every gross profit dollar that we generate has been dropped down to EBITDA, which I think is a great measure of the scalability and the efficiency in the organization. You see this quarter or the last month, it's growing about 50%. That is actually increasing. It again shows the scalability of the organization. You see that even though we're investing heavily in OpEx growth, the last quarter's solid gross profit growth has been more than compensating for the addition on OpEx. That's basically what this graph shows, and something that we keep a very close eye on. We know we're adding OpEx at a rapid rate. As long as we keep this graph in check, we're growing with the OpEx.
We actually are now growing faster than the OpEx, and we think that's where we want to be. It's obviously hard to time on an exact quarter-to-quarter basis. Over time, we think we have a lot of room to make sure this is in balance. If we get a couple of quarters, we can make sure this is in balance, but hard to manage on an exact quarter-to-quarter basis. Voice and video. If you go to the next slide 16. Maintain momentum and growth in voice and video. It's growing on nicely. Like we have said before, it's fueled both by new and existing customers. It's both number masking and verification. We are increasing OpEx here to ensure quality as volumes ramp.
As you can imagine, when we have this type of a ramp in a business that is hard, we're fighting hard there, but I think we're making good progress in increasing quality and increasing our service level to our big customers. We see a solid market for this area as well. To us, it's important to keep on growing, and we're investing heavily here or aggressively here in order to make this a long-term growth driver for the business. Next slide, please. On the operator side, and that's one of the negative sides for the quarters. In this business, you have fluctuations as in results as profits are realized. In this quarter, we had project delays and currency headwind in Q4. We're also investing in RCS as a service for mobile operators. As you can see, in Q4, the EBITDA on the operator side turned negative.
It's not something we're happy with. It's something we want to turn back. That's something we're working hard on. This is one of the negative messages for this quarter. You should obviously realize that, yes, this is a fluctuating business. By no means we're not happy with having a negative quarter in any of our business units. We're a company that takes a lot of pride in having our larger business units being profitable. That's something we have to work on. With that, I want to leave to Roshan Saldanha, our CFO. Roshan, welcome to the call.
Thank you, Oscar, and good morning to everyone on the call. Turning to page 19, consolidated net sales grew in the period by 34% to SEK 1.54 billion. Organic growth was at 17% in local currency and excluding acquisitions. The acquisitions of myElefant and TWW contributed 13 percentage points, and the positive currency effect on consolidated net sales was 4%. Consolidated gross profit grew during the quarter by 42%. Organic growth was 23%, and the acquisitions of TWW and myElefant contributed 14 percentage points, and currency tailwind was 4% growth. Non-recurring items in the quarter relate to the acquisitions and integration of myElefant and TWW, drawing about SEK 5.2 million in Q4 2019. Full year adjusted EBITDA rose by SEK 27.5 million due to IFRS 16, or the IFRS 16 accounting treatment of leases contributed SEK 27.5 million to full-year adjusted EBITDA.
This effect, of course, stops with 2019. There is no further contribution in 2020 due to the change in accounting treatment. Amortization of acquisition-related assets during the quarter was SEK 37 million. As Oscar pointed out during his comments, this has no cash flow impact but is related to previous acquisitions. Adjusted EBIT, excluding non-recurring items as well as amortization of acquisition-related items, ended up at SEK 185 million against an adjusted EBITDA of SEK 199 million, showing the strong cash flow generation in the business. Turning to page 20, we have an accelerating gross profit growth.
The messaging segment continues to grow strongly, with SEK 66 million in additional gross profit during the quarter. Voice and video with SEK 12 million additional gross profit during the quarter. Operator slightly negative at SEK 5 million. The acquisitions of TWW and myElefant contributing SEK 44 million additional gross profit during the quarter.
We have an FX tailwind of SEK 13 million. What is driving the messaging growth is definitely our largest customers in the U.S., besides, of course, the acquisitions, as commented earlier. We have a limited total ForEx effect on adjusted EBITDA during the quarter. The ForEx effect on adjusted EBITDA is a combination of increase in net sales leading to increase in gross profit, as well as, of course, increased OpEx due to negative headwind from ForEx effects. Turning to page 21, you see the headcount development in the business. We've grown the headcount year-on-year with 39%, both through recruitment and acquisitions. Headcount was at 722 at the end of Q4, the quarterly average for Q4 was at 654.
If we have excluded the acquisitions of TWW and myElefant, the headcount would have been at 614, implying organic addition of 41 employees, which is a slight increase compared to the trend in the previous quarter. This is a seasonal increase. Near-term negative impact on EBITDA is seen due to the increase in headcount before some of the new initiatives translate into higher revenues and higher gross profit. Turning to page 22, you see a reconciliation from EBITDA to tax flow before changes in working capital. During the quarter, we had paid interest of SEK 2.5 million and paid taxes of SEK 54 million. Our effective tax rate continues to be around 22% on a rolling 12-month basis. We have a strong underlying cash flow generation of 75%, especially considering that in 2019, the EBITDA is inflated by the change of accounting treatment due to IFRS 16.
We still continue to maintain a strong cash flow generation compared to the previous Q4 2018. Turning to page 23, where you see a summary of the cash flow statement. We have a net working capital, which is at SEK -13 million for the quarter. Working capital consumption during the year was at SEK 126 million. Net working capital fluctuates between quarters. Due to the strong growth that we have experienced during 2019, there has been a higher consumption of working capital compared to 2018. This continues to remain a focus for us within the company to work with and find solutions to manage our working capital. We have a very low bad debt at around 0.1%-0.2%, varying between quarters.
We had also a successful bond issue during the quarter and refinancing of our debt, which you can see on the financing activities through new borrowing and through amortization of bank loans. The net debt is increased by 84 million SEK since January 1, 2019 due to the implementation of IFRS 16 accounting for leases. Finally, turning to page 24, you see our key financial targets. The two financial targets that the company have declared before is to grow adjusted EBITDA with 20% per year and net debt to adjusted EBITDA to remain under 2.5 x over time. During the quarter, we're proud to say that we have delivered adjusted EBITDA per share growth of 54%, measured on a rolling 12-month basis. Net debt to EBITDA remains at 1.7x, measured on a rolling 12-month basis despite financing our acquisitions of TWW and myElefant.
With those words, I would like to leave back to Oscar to conclude the presentation.
Thank you, Alfred. If I move to slide 25, key to growth. In general, we see a strong pipeline with several U.S.-based global tech companies, and we see we have a good solid delivery to those. We see that's a potential for future growth. We see generally the market trend, enterprises shifting to mail to messaging. We do not see that that trend will slow down. We think it's going to continue for the coming years. It's good in general market. We see further growth opportunities in voice and video. Many companies want to include voice and video in their customer journeys in many different ways, and we see that's a growth market for the coming years as well. We are building a larger Sinch field sales organization and strengthening our marketing in order to address more enterprises on a global basis.
We think that we have a focus to broaden growth in this area, and we think that we see positive signs from those activities. As you know, we also have an active M&A agenda, and as opportunities come up, we have a strategy of strengthening the organic growth with acquisitions. In general, these two areas, the two major areas for growth, we're continued to strengthen our connectivity offering. We're one of the absolute best players in the world of offering mobile connectivity, and we intend to stay in that position. So we continue to invest in our connectivity offering. We're also investing into the SaaS value add through investment in software, RCS, OTT, chat apps, and a lot of different areas.
With that said, we think we are well-positioned for the future in the general markets, and we hope to continue a good growth story going forward. We think the market is there to do so. It's obviously hard to tell exactly what quarter and how and where to go, and we do not give any forward-looking projection for that. With that said, I want to conclude the presentation of this quarter, and I want to thank the entire team of Sinch for a lot of hard work and a very well-performed quarter and year. I want to open the presentation for questions. Thank you.
Thank you, sir. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, simply key zero two on your telephone keypad. The first question we have is from the line of Predrag Savinovic from Carnegie. Please go ahead, sir.
Good morning. Thank you for taking my questions. Starting with a bit on messaging. You mentioned time and time again that the big U.S. tech companies are one of your growth drivers. It's hard for us to size the market here and see what kind of true growth potential there is for you guys. If you could let us know, for example, of the biggest accounts here, how much traffic do they currently allocate you in percentage points, and what is the upside here, to get any type of feeling on the potential here continued. You also say the pipeline is very strong still.
Thank you for the question. We have not given information about the customer consultation, and we cannot give the names of those companies. We are legally obliged not to do so in the names. They're very protective of their brand names. I would love to, but I cannot. We can say it's eight out of 10 of the largest U.S. tech companies, and I think you can all understand roughly who they are without naming the names. We have continued growth both from existing accounts and the potential for new accounts in that area. I want to also stress that this is a messaging business. It's a global business. It is pretty much any enterprise in any country would have messaging and do have messaging needs.
The other big segment in our business is the banking and finance segments, where we have a large portion of big retail banks as our customers to fraud alerts and two, three notifications, et cetera. There are also a very large number of banks that we do not have. Other big segments are travel and transport, for example, the internet sector in general, and the large number of subscription-based services. It is a very, very broad market that we're talking about, that exists in any country. There's also a large potential and large amount of revenue from non-big tech companies, of course.
All right. Super. Another question. Looking back at, say, the beginning of 2018 or even end of 2017, it seems that the gross profit per transaction had quite a positive trend, slightly less so in Q4. Can you give us some flavor on the drivers behind this? Is it FX tailwind mix effect or more higher charging from value-add services in the longer time perspective?
Hi, Predrag. Good morning. This is Roshan. Yeah, I think it's a combination of those factors. I think one of the things that we see is definitely if you go back a few years ago, this business is coming from selling wholesale. As we have increased the enterprise share of our business, and we continue to focus on growing that, we can see that that's a higher value add and therefore a higher gross profit result for us. Especially when we talk about the scale and size of the large tech companies in the U.S. as a part of the total business that has grown over time and definitely lead to a higher gross profit, even on the messaging side.
I think, also, definitely that the value-added services that we are continuing to build, have built over the years, continue to build and acquire, and deliver to our customers means that we can increase margins over time. At the same time, I must say, this is a competitive market, and we are in a competitive market. We definitely see also increased price pressure, and we work continuously on our cost base to be able to retain and grow margins over time.
Yeah, it's important to understand that this is a market where with large scale U.S. competitors, competing with companies like Twilio. They have a lot of cash, a lot of developers, a very successful and good company in so many different ways. We like competition because it makes us more on our toes, and it drives the market, so that's good. You also need to understand, this is a big global market with strong competitors, and that's something that is important to understand.
Okay, super. Looking a little bit in new verticals, and I know it's still early days, but can we get an update of the progression on myElefant since you acquired the company in terms of revenue progression? It seems that there is some quite meaningful upside and potential here from adding these services to the mix. You already mentioned that you have started the cross-selling. What are your expectations here, and some kind of revenue update?
Yeah, we don't give the broken-out financial figures, so I cannot and will not give that, but I can give the commentary around it. We're very, very happy with both of those acquisitions. On the myElefant side, you will see very strong synergies across our base. We have a large number of Sinch salespeople that are super excited to sell it, and we have a large number of salespeople that are already selling these services. We see that in all our geographies. The theory we had, this is a great service with a great go-to-market, and we want to add in on and sell to our existing customers. To me, that turns out 100% true, and then we're very confident that will be a growth driver going forward for many years to come. Obviously, we're gradually now integrating myElefant into our own offering.
Gradually over the quarter here, you will see no difference between the Sinch offering and the myElefant offerings, and we're giving them a global responsibility to drive this. The thing that they have started is very good, and we see growth from that. You should also see the seasonality in myElefant. It has a strong impact, and it has a very strong Q4, given that it's relatively marketing-oriented. Therefore, we see an extra strong impact in Q4 from the myElefant acquisition that will pay off a little bit in Q1.
Okay, super. Finally, maybe an update on the acquisition pipeline, as this is becoming an integral part of your story.
Yeah. Needless to say, we cannot talk about any specifics on this one. We have an active M&A agenda in the connectivity area and in the technology and go-to-market area, and in both of those, and we have an active agenda. We are continuously working to find good partners to work with, and hopefully we're successful, but it's not something we can give any projections on. This is a big market and it's a good market, and we see a lot of opportunities in many different areas. If that leads to transaction, it obviously depends on so many factors, so it's very hard to tell.
Okay, super. Thank you very much.
Thank you.
Thank you. The next question we have is from the line of Ramil Koria from Protean. Please go ahead.
Thank you, operator. Morning, everyone. I have a bunch of questions. I'll try to limit myself. Starting off really on the former question, a follow-up on the M&A pipe. Just sort of given the balance sheet situation and you obviously executing on two acquisitions quite recently, how do you reason around timing, et cetera? You have a pipe, would you shy away from execute on that due to integration et cetera of current or recently made acquisitions?
Yeah. Roshan again. I can take that question, Ramil. I think the first thing is, as Oscar said, there is a very strong pipe out there, has been, and we see definitely increased interest. There's a couple of drivers to that. I think one key driver is definitely the underlying tech shift in the market, which means that the larger players have a better possibility to invest. What we can say is we are keeping to our financial targets, and one of our financial targets is to keep net debt to EBITDA at 2.5x over time. We can definitely see that adjusted EBITDA grows on a rolling 12-month basis as the business grows, and that increases definitely our possibility to leverage and make acquisitions.
In addition to that, this is more of a shareholder decision in the end, and a board decision, which is that we have the possibility to fund acquisitions through equity as well. That is nothing that the management will comment on, and that is nothing that we can say anything about. From an organizational perspective, yes, acquisitions takes a toll on the organization, and it has an opportunity cost, and we need to be careful about that. We're gradually setting our organization up to handle both the ability to execute the transaction and to integrate them. To us, that's a work like anything else. We have organic sales work and organic R&D work, and we have an acquisition-related work, and we're building the organization to handle that on a day-to-day basis.
Of course, there are limits, and it's hard to talk exactly about what these limits are, and we have to evaluate each case when we see them.
Thank you. A high-level question, perhaps, but looking at some of your peers, they're expanding their product portfolio quite aggressively. Put it this way, you're growing quite nicely with the U.S. big tech. Anecdotally, what are you hearing with other customers when you're competing against the likes of, you mentioned Twilio earlier, which sort of has expanded quite aggressively and added new products into their portfolio. What are you hearing from customers when you're out on the market?
If you compare us to Twilio, we always get the question on, so we're happy to comment on that. Twilio has a very strong position. They have invested a lot in a very broad product portfolio, and they invested a lot in the online go-to-market, and they're very strong in these two areas. They have a wider product portfolio than we do, and they have a stronger online-based go-to-market than we do. We have invested more in a high-quality global delivery network, in our perspective, than Twilio has. We think we're stronger than Twilio in that area. That's our own perspective on these two, and then we meet somewhere in the middle. We are obviously working then on broadening our product portfolio, and I think you see the signs of that in the types of offering we're doing.
You see the voice and video growing, you see personalized video, you see the myElefant acquisition, and you see other self-serve activities coming out. That's a big area of growth or investment for us. Generally, anecdotally in the market, that's also what we see. I mean, to serving large customers, which is not only big tech, but also big banks or big enterprises. We have a very strong position, and when we give the entire Qualifire offering, we have a good standing and are very competitive in that market. We also see strengthened demand from the new tech areas and all these new software offerings that we have. We see we're able to take business in there, and that's a growing area. Obviously also an area where Twilio is still stronger than we are.
Thank you, Oscar. Just going back to the four investment areas. Perhaps It's a very difficult question, I get that, but could you elaborate a bit on the split between the four buckets in terms of investments, where are you focusing the coming investments, et cetera?
Yeah. Hi, Ramil. That's not information that we disclose, of course, about how we split our OpEx between these different areas. For us, of course, what is important is to continue to support our gross profit growth and make sure that we are delivering to our customers a scalable and high-quality service, because that will make sure that we continue to grow and retain these customers. That is the priority. At the same time, over time, of course, we need to be investing in the other area to continue to remain a relevant and reliable partner to our customers in these segments. I think that's what drives our prioritization of investment, if that helps.
Thank you. Just a final one, to some extent a follow-up to the former one, but looking at the EBITDA to gross profit came in at 45%. Given that you're investing quite heavily in future growth initiatives, how should we view call it operational leverage the coming year or two?
I can begin, and maybe Oscar wants to complement. Just very shortly, Q4, if you look also on previous Q4s, tends to be a slightly stronger quarter. This is due to, among other things, the seasonality of our business and the volume increase seasonally during Q4. I think the acquisitions, of course, of myElefant and TWW being a little bit more seasonally strong in Q4 has maybe accentuated that a little bit during 2019. That drives the adjusted EBITDA over gross profit measure. I think it's a very strong proof point for us on the scalability of our business, and that we will continue to invest to drive further.
Yeah, this is obviously a question long-term, short-term strategically. We believe that there's a strong need to continue to invest in our business because there's strong growth opportunities, and we're going to continue to do so. We think that's good for our shareholders because it's driving growth over multiple years, and we think that's what our shareholders want. We obviously need to balance that long-term view with the short-term view of continuing to deliver profits and growth in profits. That's the balance we so far have been able to strike. We obviously hope to be able to continue to strike that balance. There may be quarters where we're not able to. We will report that, and we'll take action accordingly when we see those results.
We have a very well-ingrained culture in our business to make money. We stand out in that area. We want to continue to make money and continue to make money on good levels. We'll continue to have a high focus on that despite the big investments we're doing.
Thank you very much for taking my questions.
Thank you. The next question we have is from the line of Daniel Djurberg from Handelsbanken. Please go ahead.
Thank you, good morning, and congratulations to a really strong year-end of 2019. First question would be on TWW. If I calculate correctly, they grew some 17% with some 12.4% profit after tax last year. Also myElefant grew some 20% and increased the margin 2019 versus 2018. My question is really, should we expect similar solid performance for these in 2020 or even better given the cross-selling opportunities that should arise?
As you know, we cannot give forward-looking statements. We can't comment on the future performance of our main business or any part of the business. We can comment on the rationale to making these acquisitions, that is, Brazil is the fifth largest country by GDP in the world. We think it's important to be in big markets. It's also a market with high growth in terms of mobile penetration and use of mobile services, that's why we thought that market specifically was interesting to enter. We believe there's good growth in Brazil going forward. Obviously, there's also risks with some markets, and Brazil has its specific set of risks and that we need to weigh in.
Generally, we believe that Brazil, as a market in mobile messaging, both from messaging and voice and video, will continue to be a growth market with probably a little bit higher growth in Brazil than you have in the European markets, and given the size of the population and the market stage that market is in.
On the myElefant side, like I said before, we see very strong synergies between the businesses. We think both we can help myElefant directly with relations, and we think our salespeople will have another tool in the toolbox which they can sell. We think the development of that entire thing would be good and gradually will be much harder to just dissect what is myElefant and Sinch. We have a philosophy from the day of an acquisition, any acquired companies, any person in an acquired company is just as much a Sincher as anybody who's been working here 10 years. Gradually, it's impossible or very hard to differentiate between these entities.
Yeah. Good. Another question from me would be on the number of transactions in Q4. It was up some 41%, and you highlight that most of it comes from acquisitions, of course. In Q3, you gave us an organic number of 14%. Can you strip out the organic number also in the Q4 would be great.
Yeah. Again, just the short answer on that one, Dan. If we had included TWW and myElefant in the base for Q4 2018, the pro forma growth would have been 25% in transaction volumes.
Perfect. I missed that earlier. Okay, then just perhaps a question on RCS. We see now some, I guess, uptake in the U.S. with both Google and Cross Carrier Messaging Initiative happening in Q4, and this has taken a lot of time. Can you say something if you see this as mainly a potential trigger for you, or is it more of a threat? Also do you see any possible impact on pricing dynamics for traditional applications of your SMS messaging from this?
Yeah. I'm happy to answer that question. It is obviously one of the most strategic questions we have in the business. We have a very simple view on that. We take a customer view, both end customer and enterprise customer. We think what is happening in the market right now is the first wave of this market, which would have been growing the first 20, 30 years of this market, where the SMS market was growing up to 30%. There is a couple of very simple reasons for that. It is 98% open rate, 90% read rate within two minutes. That beats email if you want to reach somebody fast. That is why it is a $20 billion or $17 billion market right now on text messaging. Simple as that, right? Businesses want to reach their consumers, and then they use text messaging for part of it.
The main limitation of that is that it's got 160-character limitation, right? Great immediacy and reach, but only 160 characters. What is happening is that 160-character limitation is taken away, and that's taken away whether you use WhatsApp, RCS, Apple Business Chat, WeChat, KakaoTalk, Line, Viber, Telegram, and Facebook. There's a lot of different channels, right? RCS. There's a lot of different channels, but the main thing is that limitation of 160-character text is taken away, and instead, you can deliver almost an app-like experience to a consumer. Basically, you can have voice, you can have video, you can have pictures, you can have action buttons, you can have a conversation which you can track in the messages, et cetera. Much richer experience.
We believe that richer experience will drive a 10x improvement in service quality to consumers and to enterprises, just because it's a better experience, and we believe that's going to drive the market for many years to come. We also believe that the transition over to these services is complex to enterprises because that means they suddenly need to implement mobile messaging, which can perform as an app into their business processes, and that will take time. We believe in the coming years and many years, that will drive a lot of growth in the market. Now, come back to your specific questions. Yes, sometimes there are delays in various markets and various technologies, and et cetera. Like in the U.S., there are delays in this operator consortium on RCS, and like in France, they just launched it, and then there are problems with the handset reach.
To us, all right, RCS is one channel. This market is one channel, we have all the other channels like WhatsApp, Facebook, KakaoTalk, Line, Viber, which are proving the use case, and we're seeing increased net mix on the key business objectives of our customers. To us, RCS is one channel. There are many channels. We believe in the concept of this happening on a broad scale in the market, we believe that's going to be good for consumers. As a consequence, we believe the market is going to grow on the back of it.
Perfect. Thank you so much. I think I'll stop there to see. I might have some more questions.
Thank you, Zach.
Thank you, sir.
Operator, any more questions on the line? Any final question?
There's no further questions in the queue at this time.
With that, I want to thank everyone for dialing in and following our webcast. It's been a pleasure to speak to you. I'm looking forward to keep the dialogue also in the future. Any follow-up questions, don't hesitate to get in touch. Thank you very much.
Thank you.
Thank you. Ladies and gentlemen, that concludes your call for today. We thank you very much for joining and ask that you disconnect your lines. Have a great morning or afternoon ahead.