Earnings Call: Q2 2021

Jul 16, 2021

Welcome to the Cinch AV Interim Report, January to June 2021. Throughout the call, all participants will be in a listen only mode and afterwards there will be a question and answer session. Just to remind you, the conference call is being recorded. Today, I'm pleased to present Tom Latif, Chief Strategy Officer and Head of Investor Relations. Please begin your meeting. Thank you very much, operator, and warmly welcome, everyone, to this conference call with Cinch AB, where we will also Head of Investor Relations. With me on the call today are CEO, Oskar Werner and our CFO, Roshan Saldanha. Before I leave the word over to Oscar, can I remind everyone that when we get to questions, please limit yourselves to maximum 2 questions, And then you're welcome to join the queue again, and we'll ensure that everyone has a say and gets to ask their questions? So with those introductory remarks, The floor is yours, Oskar. Thank you, Thomas, and thank you, everybody, for your interest in listening to our presentation. So without further ado, we will jump into the slides and run through them. So operator, if you can move to Slide 2, please. So past revenue in past 12 months in Cinch is $11,800,000,000 Adjusted EBITDA is $1,200,000,000 and that is not including obviously the non closed transactions. So including in telecoant and message media, it would be a bit over 2,000,000,000 2,003 100 people and present in 47 countries. I think it's Talk a little bit at the adjusted EBITDA number. I think that's why we truly stick out. Being a cloud business, growing at the rates we're doing plan 25%, 30%, sometimes above 30% organically, plus adding a strong M and A growth at 25%, 30%, 40% On top of that organic growth and doing an adjusted EBITDA at these levels, that's I think that combination is where we truly stick out And that's something we're very proud of and that's something we're working very, very hard to maintain. So the profitability level, the cash flow levels Driving that is something we work very, very hard to maintain and obviously grow. We do customer engagement through mobile technology. What that means is basically, if you have a cloud communication, think about an enterprise and how do they want to communicate with their consumers. And if they want to communicate with the consumers via messaging, voice or video, we would be there having a platform for them to make the video call, To make a voice call from the app or to send a message, if that is an OTT WhatsApp message or a text message. We do 170,000,000,000 engagements per year. So that is on average above 15, closing up to 17 engagements per mobile phone on the planet. And so we are the largest, to our knowledge, provider of messaging services on the planet, and this is a very, very large market and very deeply penetrated in almost all geographical markets. In addition to that, we do something close to 100,000,000,000 voice minutes, Negra, with Intelliquent when that is closed. That is obviously not closed yet. So That's also a very, very large segment for us. One thing we stand out with is 8 out of 10 largest U. S. Tech companies. So if you take the largest companies on the West Coast, We are a house supplier to them at the largest volume at kind of very, very large volume in multiple countries. And I think that proves our quality and what we truly stand for, giving a high quality truly international service. This market has 100 percent consumer transition. I'm not yet to find 1 single person on the planet that is not a user. And it's a very large growing multibillion dollar market. And we have been profitable since our foundation, So focus on profits since day 1, founded on $10,000 in share capital and never needed any external capital since day 1. All right. Let's go on to the next slide, Slide 3, operator, please. So we have a very clear growth strategy, and we have a 2 pronged growth strategy. One of them is driving strong organic growth. Over the past 10 quarters, we have been averaging in between 25% to 35%, something in that region per quarter, quarter on quarter over the last 10 quarters. So driving organic growth, extremely important to us. That is what we think It shows we have a good systems, good processes and good business. In addition to that, we add a strong M and A driven growth agenda where we, On top of the 25% to 35 percent organic growth add M and A driven growth. And if you look back the past 5 years, we probably averaged around some 25% per quarter in M and A growth again. And in the last quarters, we have accelerated that agenda because we think we are in a consolidation game. So Then you can see the type of gross profits that we are today where organic growth being 32% and total growth being 89% on the gross profit level. So that's And we that's how we drive that growth. We believe we can continue to drive the strong organic growth in the market. The market is very strong. The underlying market is very good, and we believe we can, for some quarter for some times to come, for some quarters or years to come, Continue to drive the M and A room growth agenda. There's a lot of activity in market, but we see both of those activities being strong going forward. On this slide, you can see the impact of the organic growth and how that is driven, but also the impact of the latest acquisitions of ACL, SDI, WAVI, in TeleQuint and Message Media, and you can see the relative sizes to them on the gross profit and adjusted EBITDA. We focus on gross profit and not on revenue since the gross profit margin in different countries is so different. So if we focused on revenue, we would Prioritized wrongly because we would think that a high revenue, low gross margin countries is better than a high gross margin, low revenue country. The other thing is we focus on it because different products have different gross margin profiles. Our SaaS products are 90,000,000,000 gross Our messaging or voice products are maybe 30% or 25% gross margin. And if we focus on revenue, we will focus more on the messaging and voice products On the SaaS products, while the SaaS products driving high gross profit per revenue dollar. So therefore, The only way to look at a company in this business and run it correctly or evaluate that is in gross profit. All right, operator, Slide number 3 before, please. So we worked very, very hard. Our Strategy is simple. We want to become we think our reasoning is very, very straightforward. Now this market, the CPaaS market is very large. You can see the market as being 40, 50, 60 or 70 or even $80,000,000,000 depending on how you define it, but it's in that type of category. And we have set our goals to be 1 of the 2 top leader in that market. And you can see the move we have made from 2019 being In the middle of the pack, the blue blurb to 2021 being the clear number or maybe not clear, but the number 2 in the market, I would say clear number 2 in the market behind Twilio and a couple of metrics, but ahead of them on a couple of them like message volume or sort of profitability and things like that. So being positioned as the number 2 in the market, I mean, it's a very, very strong position in this market and that's what our strategy is about being positioned as 1 or 2 in this very attractive market. Thank you. And then let's go to the next slide, please. One of the things that One of the things that is super exciting about this market is the transformation and why this market can grow this fast. And that is The past 20 years of this market, enterprise has figured out that text messaging was a very strong way of Complimenting e mail, basically you have a higher open rate with text than you have with e mail and then you for certain use cases like And the notification on an airport you get via text because you would simply not read the e mail. And there's a lot of such use cases. Now the next Next wave coming out is conversational messaging where new channels coming out with richer formats, you can send videos and action buttons and then pictures and you can have conversations with the users, which drives a whole new set of use cases and in one more way Kind of compared with sending a 160 caratore text stream to send almost an app like experience to your phone. And obviously, with that type of app like experience, you will get a deeper experience as a user and you can drive more use cases and those things will drive the market for the for the years to come. All right. Operator, let's go to the next slide. In this conversation that's sitting out here, we're constantly adding channels. We added RCS. We added WhatsApp. We added Telegram. And We added a couple of these in the last quarter here. We just added Instagram. And so basically enabling businesses to have one to one conversations to merge with the customers of theirs who happen to be large on Instagrams. So that is over 1,000,000,000 monthly active users on Instagram And 60% of people say that it's got new brands on Instagram and 80% of users follow a company. So this is a very strong additional channels to the RCFs or the WhatsApp or the MMS channels or the SMS channels that we have. So very happy to add that and driving a good interest in the market with that channel. This is launched via our conversation APIs with 1 API handling multiple channels. So therefore, it's no need for an enterprise to connect Multiple APIs, if they're connected to the Cinch Conversation API, they already have this out of the get go. Operator, if you move to Slide 7, please. We also launched a 0 click user authentication. This is to complement the 2 factor authentication with text messaging. And maybe, Thomas, you're a little bit closer to this than me, but maybe you can give the the nation of the user experience on this type of service. Absolutely, I will, Oscar. So what you probably recognize this Yourself from downloading an app or starting a new service, perhaps you're renting an e scooter to get to the beach on a hot summer day like this. And you're asked to input your phone number and then the DAP maker wants to verify That the phone number is actually yours. We do this at a lot of at a great scale today, often sending a text message with a PIN code And you enter that PIN code in. We also have an innovative method called flash call, which is another option. And what we're adding here, data verification is a really innovative way to solve the same problem but in a better way. So what you get It's a faster, easier and more secure way to verify that someone controls their phone number. So rather than you having to input a PIN code that you received by a message, you simply say verify And we will directly connect to mobile carriers in the background, and we will check that your phone number is actually yours by correlating the data stream That hits your handset with the number that you've submitted. So an innovative way to improve the user experience to power security solutions for enterprises who want to enable 2 factor authentications and a great fun announcement to make this quarter. What's fascinating to me about the market willingness, there So many of those type of use cases. It's like not hundreds, it's 1,000 of those type of use cases that you're actually launching. We're launching them on one platform and then as enterprises start to roll use them and roll them out through the world, I mean, this gets a better sticky service the more of this type of added functionality you have in your platform. And this is one of them, which we think is very exciting, but there are A lot, a lot of those type of use cases in this market, and I think that's one of the core reasons to why it's growing as fast. All right. Operator, Slide 8, please. So we have a very clear playbook for profitable growth. On the one hand, it's Organic and M and A and on the other hand, it's driving both the connectivity business, making a voice call, sending the OTT message, the Instagram message, the text message We're making the video call, that's the connectivity business. And then you have the SaaS business on top, which is the maybe a chat layer, AMLP interpreting the intent of the call, what is the user wanting to say to the brand or interpreting the intent in the message in order to automate that intent interpretation for the customer care agent. So That's a typical software as a service, but that can be a lot of other kind of components that enterprise are using. And we're playing in both of those, Obviously, connectivity being the largest, but then the fast services or applications growing very fast and being a very exciting future. Business model wise, connectivity is like a tick based model, either per minute on the voice side or video side or Per message on the messaging side, and you have a markup with the COGS. And the SaaS service is a classic SaaS model, which is A seatback model or a monthly subscription fee or something like that, but a typically a 90% margin classic SaaS service model. All right. Operator, Slide 9, please. So we have done a lot of acquisitions. We categorized them in Technolingo to market and scale and profitability. Typical Technolingo to go to market being chat player AI MLP type service where you Just to add a fast service to interpret the intent. A typical scale and profitability would be ACL entering to India getting 300 people on the ground in India selling to 50% of private banks in India, getting a solid base in India to expand to other services. Then what we do, we obviously take chat later and launch in India with their ACL and have them sell it. We take all our next generation channels launched in India and have ACL sell it. And there we have very good traction on the WhatsApp channels, for example. Latest acquisitions in Telequent being both, it's like a North America, very large, highly profitable business, but it also has a voice connectivity offerings to us. And Message Media being a highly profitable U. S, Australia company, but it also adds a SaaS service for SME or small and media businesses to us, which is a technology and go to market offering. So as long as we can hit both of them, Great. But either one or both of these two type of strategies, that's what we're looking for and complementing Our product functionality in the technology and go to market and then complementing our scale and profitability and financials on the scale and profitability area. All right. Operator, let's go to Slide 10, please. So think about the go to market models in this market, if you're selling to the businesses, if you will. Do you have like an enterprise go to market, which may be an online lead generation, but it's a salesperson calling up and making the sale to the enterprise? That's kind of the traditional Cinch where we have been very strong and where we are very good calling out and talking to big banks, etcetera. With Message Media, we add an SME or SMB go to market, which is an online self sign up €150 or dollars a month type of business. Think about it as a local dentist, local hairdresser who wants to add messaging to avoid no shows. And then they sign up online to something, enter a credit card and off they go and they send a couple of message. But what they're really buying is this online fast tool in order for them to handle their messaging needs. Truly online business model and signing up 1,000 of customers per month, so much more rapid pace, but then also smaller customers. So Adding message media and complementing the enterprise go to market with an SMB and online go to market, very, very happy that we're doing that. And then we have the developer go to market in Midler, where Twilio has typically been the strongest, and that is developer exists at both enterprises and at small businesses. They Exists with any business, but there's a different go to market. You have developer tools, you have SDKs, it's an online marketing thing. You have a Community of other developers creating code, etcetera. And that's something you need to build up, and that's where Twilio is the strongest in the market today. We have some initiatives, but so far, we haven't invested so much in that go to market model, but we're sticking to the core focus areas of winning where we're strong in enterprise and SMB I'm not neglecting to develop our offerings in developers. We're being stronger, but relative to Twilio, we're still weaker there, but we're on the other hand stronger on the really big enterprises. All right. Operator, next slide, please. So this is how Message Media looks, Like a web based SaaS application suite supporting outbound and inbound messaging and conversational use cases, It's truly optimized for the SMB needs for ease of use and quick time to value as opposed to the enterprise, which has Now good cost quality to quality ratio. It's a subscription based price model, and it's a single platform supporting various types of brands. And it's a lot of integrations with things like Shopify, HubSpot, NetSuite, CRM in order to have that kind of channel go to market and be present in all the various channels where SMBs are present. You have various types of apps From Message Media in there. Now the most well known is maybe the Shopify app, where you have a cart abandonment app with Shopify. So SMBs go in, They realized that, okay, if I have an abandonment rate in my shopping cart and my online sales, I can use this app from message media in order to reduce the abandonment rate in the shopping cart with, say, 25%, 30%. It's a very, very powerful tool to use text messaging or messaging to do that. And Message Media has a very good app in Shopify to do that, which generates a lot of leads into intermessagemia. So that's just one example, if you want to exemplify. All right, Slide 12. This is a true digital go to market. I'm talking a little about Mesopotamia since I'm not sure all of you heard it. So you can see 25,000 customers in the U. S. And growing 40% year on year, 28,000 customers in Australia And then 5,000 customers roundabout very early stage in Europe, seeing the U. S. As a very large Growth ending adding over 1500 net new customers per month in an online model. So you can see the different model and the higher pace web based modeling acquiring a different type of customers here. I think it's also great diversification to add this Channel tells thousands of customers to Cinch, which is in a very sticky model, so it's a great diversification of gross profit and also another very strong Growth Engine. We truly believe that the SMB market will continue to grow for the years to come, and we believe the growth prospects for this type of business is large, And we want to have a leading play on a global level in this type of segment. All right. Next slide, please. I won't go through it. I'll just highlight one thing in the and this is more for your reference. I highlight one thing in the financials. Look at the 2nd row from the bottom. Message Media has a revenue of $151,000,000 gross profit of 94,000,000 and an EBITDA of $51,000,000 So this is how you can see how much higher gross margin you get when you sell Smaller businesses obviously have a higher cost to serve them as well, but it's a very high gross margin business. And the other thing, it's a very, very profitable business. This is probably the only business we have found in this industry who's more profitable compared to gross profit than we are or close to what we are. So very, very happy to pick up such a and we're very happy to pick up such a financial sound company. And this company has really Proven this model in an online go to market fast paced but also driving high growth and having very, very strong numbers. All right. Signing up the 14, please. If we go into our report here, so gross profit rising 8%, 9 sounds like $869,000,000 adjusted EBITDA rising 42% up to $284,000,000 Organic gross profit growth of 32% in local currency. We're very happy with that number and a strong growth and a 42% growth in adjusted EBITDA. So all in all, strong growth on all our key metrics. We're also very happy to see broad growth across customer segments and geographies, so really diversifying the growth From being a lot of the big tech companies to now being much more weighted to a broad based growth across many customers and many geographies, and that is something we have worked hard on to do and now seeing a good effect in the financial numbers of the couple of last quarters. We're continuing to do OpEx investments to handle this rapid growth and to prepare the business for the future growth that we see is possible. As you can imagine, if you're growing your gross profit at 8% to 9%, you need to make scale up investments To handle that, we also need to make the investments in order to set ourselves up for the possibilities and strong growth prospects in the future in this market. All right, operator, Slide 15, please. Like we said, we worked a lot on broad based organic growth. This, as you see, our organic growth over the past 10 quarters. So we've been averaging, as I said, between 25% 35 percentage points roughly. Doing that quarter on quarter, year after year for such a long period, I think is a very strong testament, first to the market, it's a very good market, and then also to the Hardworking team are really delivering those numbers. On the right, you can see that the growth comes both from net new businesses and wins from competition. So A lot of new use cases coming in and then displacement of competition due to typically it's quality or something like that, higher quality for delivery or high quality in one single market. It's a large thing that where we win a lot of businesses as well, and it's roughly neck and neck between new and displacement wins. But very happy with this type of growth model, very happy to see this organic growth and then happy to add the M and A driven growth on top of that. Slide 16, please, operator. Gross profit messaging being organic growth So 2, you see the messaging being the strongest one. You see voice and video in this quarter growing relatively well. Still pandemic The effect is going to hitting that business, but still growing. Operator having a really good quarter here. Acquisitions, obviously, adding a lot and some negative FX headwinds ending up at the 8% to 9%. All right. Operator, next slide, please. Key thing to us is always watch the adjusted EBITDA margin. That's It's very, very core to us. We're very profit focused. And so we truly, truly want to do that. On the other hand, we also obviously need to capture The growth in the market brought from an organic perspective and an M and A driven perspective, and we do think investments are needed and good for the shareholders in order To capture a little bit more or capture more of that growth right now, and that's what we have been doing for a while, this is a bridge describing where the growth impacts Come from and it's not all only the investments in scaling growth. So part of it comes from the dilution of profitability since ACL, SBI and WAVI had a lower relative profitability than Cinch. And we take that in and then we work obviously on increasing their growth levels and increasing their profitability levels, but it takes a little while. That's some temporary traffic invoice and video or RTC that actually drove down the adjusted EBITDA margin sum. Some currency effects, you had some lower gross margin in a couple of countries. You had some increases in prices in Brazil and some from operators and some operator changes in India and a couple of other markets where operators are changing prices. Typically, that's a one off and then It takes a couple of quarters and then you get back to the same profitability levels. Right now, we're seeing a little bit more of that on the market And therefore, seeing some lower gross margin here. Mind you, this is the game we play. Being the largest provider in market, we have a much It's easier to find handling those type of things than most other players in the market. So as you can see in the total gross profit Growth will more than make up for this loss in kind of total volume and therefore seeing good growth in the Messaging business. And then you see the investments in scaling growth, both handling the existing ones and setting ourselves up for the future, taking significant investments there in order to drive the growth. We think it's the right thing to do and good for shareholders. But yes, you see some impact on in the short term on the adjusted EBITDA for that. We're very confident we can get back to the run rate numbers we have had. And there's nothing that says that we wouldn't. But At this stage, we think it's right to be a little bit more growth focused while still maintaining it in our high profitability levels. And you should also see that we do still do 42% growth in adjusted EBITDA despite scale of investments. I think that's a strong number in any case on the total metrics. All right, operator, Slide 18. Headcount increase, so headcount is increasing. Obviously, the largest numbers here are growing with the acquisitions, but we're also adding Quite a lot of new people. Our general strategy is just to grow OpEx in line with adjusted EBITDA or sorry, grow OpEx in line with GP to keep adjusted EBITDA That's in line with GP to keep adjusted EBITDA level. In the past quarters, we have had a little bit higher On the adjusted OpEx, at some point, we will turn that back and have a little bit lower OpEx growth than GP in order to get back to the same profitability levels, and that's something we feel is confident about, and we feel it's good to have that to screw that timing a little bit in favor of growth at this point. But at some point, we will turn that tide back and long term growing OpEx In line with GPs is a clear target for us, which we communicated many times. Operator, Slide 19. So strong growth in messaging, total gross profit growth of 76% with organic growth of 31%. So here you can see, yes, We have some price impact of operator reaction prices, raising prices, but just seem to see very, very strong growth in the business. So on total levels, that is the volumes and the customer wins are more than making up for the impact on the margin levels. And you see SDI contributing from 1st November and wavered from 1st February 2021. This is including all the investments in product and Sales and marketing could deliver broad rate growth on the product side. So this is a very strong number, including all the big investments we do in the conversation messaging side, etcetera. So This is bearing that. If you would only look at SMS, the growth would be even stronger. All right, Slide 20, rising message volumes, number of transactions per month. You've seen we made a big tick up with ACL, SDI and WAVI, but then continuing the organic growth So that's so happy with the increase. And here you can see the I mean to the operational change, a 352% year on year growth in transactions in Q2 with 59% growth in comparable units, and you can see the pressure we put on our operation On our collaboration teams, but also the amount of scalability that we can get out of this if we do the platforms in the In the right way, which we're very, very much intend to do. This is growth from existing customers, new customers and new use cases, all of the above. All right, Slide 21, gross profit per transaction. This is something that we look at very closely. You see a big shift In ACL, there's a very high message volumes and much lower OpEx per transaction. But looking at this OpEx Per transaction and gross profit per transaction and keeping those aligned, and that's something we're very focused on and we Keep in a very close look at and then driving this to be at the right level. And I think, yes, we take a little bit of investment. On the other hand, we feel comfortable about getting back. So This is a key metric to us that we look closely at. Slide 22, messaging margin affected by M and A. Here you see the messaging EBITDA over gross profit. So you see Despite the large investments here, you can see the in conversation messaging, you see the messaging EBITDA over gross profit being very stable in between to 50% like we had it. So then we have some ups and downs, a little bit depending on timing of gross profit growth and timing of OpEx growth, of course. But in general, we keep it very stable at this level and at this stage. And you see the scale up investments being primarily on the G and A functions because it's coming in other companies that they need to handle as well. And therefore, we need to take that now and we take the OpEx obviously before we get the EBITDA, which looks a little bit funny in our books, but obviously, we need to make sure we can handle the financials and the HR and operations, etcetera, of these companies as they come in. But this metric is being very stable and very solid, I think. On Slide 23, continued COVID impact on voice to video. We see some growth. We have a large customer with Temporary traffic and low gross margin, so that will not continue after Q2. So you'll see a little bit of a rundown or The slump in revenue, but gross profit levels, it's not the big impact since that's a high margin, very low gross The customer, so you're going to see revenue go down, the gross profit being relatively similar. But then obviously, we're working hard. Here, you see gross profits continue to rise now, and you see the COVID effects still being there but still easening. And then we need to get the profitability level is back and it's something we work very hard on. Obviously, here we start to take how do we combine this business with Intelliquant. So There's also a need to kind of see that business is in a combined way as it comes in a little bit in a different light than what we have done before. Operator side, we're broadening the product offering with the SDI, same selling Software, software services and SDI cell link messaging P2P services. So there's a broadened product offering, and you see a Strong solid quarter here, both organic and by SDI. You see the high margins in the operator Businesses and though it's volatile between the quarters. And just the SDI person to person business operating at the lower gross margin has always been like But the mix effect obviously becomes the gross margin here becomes a little bit lower. But we're happy that the operator business is kind of doing well and at the Stable margin, it's good, but it's a little bit bigger because then it becomes easier to run it as a P and L and then handle various one offs in various quarters. All right. Integration side, I think we are we won't spend much time on this, but we're working Part of integration, we have a full team working on integration with now a leader in the management team reporting to me who are now having a full team both directly to her, but also in the various functions. And we're going through integration planning with Intelliquent, integration planning with Message Media And then in full integration swing with TWW, Wavy and SAP, where we're moving customers over from their platforms to our platforms in order to be able to shut their platforms down and then reap ecommerce on scale and synergies. In ACL, we are have put a little bit behind The way we see WW and SAP, just because of priority, we need to prioritize something, but we're getting the teams in place there and doing but in a little bit on a slower pace. Overall, I'm happy with the progress. I think there's a lot of work, but I think we're building a true, true muscle here in order to be a true integration machine, and we're confident on the commitments we made to the financial markets on all the financials in those integration areas. Also very happy on the people front, the people are coming in and really contributing to the business and adding a lot of confidence to the business, things we didn't know. So it's a real boost for the business to get these high performing teams in that knows a lot of things that we don't know. And we obviously teach them quite a bit as well. All right. Roshan, why don't you go into the financials? So I'll leave it over to Roshan. Thank you, Oscar. Just a quick walk through for the financials today. First of all, super happy with Another strong quarter for the business with strong organic growth as Oscar just explained. Please turn to Page 27 for the income Statement, I think consolidated net sales here growing by 127% in the quarter to 3,600,000,000 The growth rate in the quarter was affected by the acquisitions of SCI, ACL and Wavy, and organic growth of net sales in local currency was 48%. Adjusted EBITDA grew by 42 percent to SEK284 1,000,000. Adjusted EBITDA per share On a diluted basis was at DKK0.41 for the quarter compared to DKK0.33 for the same period last year. On a rolling 12 months basis, adjusted EBITDA per share as diluted increased to DKK 1.79. For the messaging segment, we have a strong adjusted EBITDA development at SEK 301,000,000 versus SEK 217,000,000 last year, a growth of 39%. Adjusted EBIT amounted to SEK215,000,000 versus SEK169,000,000 last year. Adjusted EBIT excludes Items affecting comparability and amortization of acquisition related assets, which we don't consider to affect cash flow. EBIT came in at $254,000,000 versus $185,000,000 last year. So overall, a strong P and L. As you can see also, the investments into integration of the acquired businesses continue as well as integration Planning for Intelligent and Message Media, and we have costs of SEK 75,000,000 this quarter related to those integration activities. Please turn to Page 28, where you will find a bridge from adjusted EBITDA to cash flow before changes in working capital. In the quarter, we have a strong continued cash conversion. We see a cash flow generation from operations of SEK 400,000,000, primarily due to non recurring items and evaluation of balance sheet. On average over the last 12 months, we have a cash flow generation Cash flow conversion of 81%. Please turn to Page 29, where you see the cash flow statement. Again, cash flow from operating activities was negative $43,000,000 as we had A significant swing in working capital. The change in working capital is both related to continued investment in growth As we are investing in the business and also seasonal swings in working capital. We're overall very happy with the ability for long term cash flow generation Consider this to be more seasonal in nature. Please turn to Page 30, where you'll find our financial targets, our 2 financial targets. Adjusted EBITDA per share grew 38% in the quarter measured on a rolling 12 month basis. And we had a cash position at the end of the quarter of SEK 11,000,000,000 Take leverage as net debt to EBITDA or net debt to adjusted EBITDA was at negative 9.6x because we had a Cash position. Again, we'd like to thank our shareholders for their continued trust in our strategy and its execution And their support for the directed share issue of SEK 9,400,000,000 in May. And the financial targets of the company Our growth adjusted EBITDA per share by 20% per year as well as maintain net debt below 3.5 times adjusted EBITDA over time. The latter target was changed in May 2021, before which it was at 2.5 times adjusted EBITDA over time. Please turn to Page 31, which is summarizing our financial leverage situation. On a pro form a basis, that is comparing the Q2 2021, adjusted EBITDA to net debt as it would be After we closed the acquisitions of Intelliquent and Message Media. And here you can see that post the closing of those transactions, we would have A pro form a leverage of 2.8x, which is well below our updated financial target of 3.5x. In addition to this, of course, during the second half of the year, we expect continued cash flow generation to further improve this ratio. Please turn to Page 32, where you see a summary of our of the margins From the businesses that we have acquired but not yet closed. And Intelliquent then on the last 12 month basis Would have a gross margin of 47% and an adjusted EBITDA margin of 22%. Message Media Would have a gross margin of 63% and an adjusted EBITDA margin of 34%. Together, they will add 8% to Cinch's Gross margin and 4% to adjusted EBITDA margin. And as at the end of the Q2 2021, we would have had last 12 month revenues Of over SEK 19,000,000,000 and gross profit of over SEK 6,000,000,000 and adjusted EBITDA at SEK 2,600,000,000 if we included these two Acquisitions as well as the full year impact of ACL, STI and WayView. Thank you for that. Oscar, handing back over to you for the last slide. Oscar, I think you're on mute. Here I am. So sorry for the little bit long presentation. We'd rather keep it a little bit shorter, but yes, sometimes we have a lot to say, I guess, but we'll try to keep it a little bit shorter. Key priorities ahead, I mean, continued high growth, both on the broad based organic, Super, super key and through M and A. These two growth engines in the market we have, we think are very strong and we We'll continue to do them in the coming quarters to have or in the coming years. We're super happy to be in a market where we can execute both of those strategies. So that's a very strong outstanding we have. That's a big, big focus. Then we have now a big focus, which is improving growth in acquired businesses Like SDI and Intelliquin grow slower than we do. And we have initiatives to turn I mean take the same models as We have proven in Cinch and apply them on the acquired businesses, hiring more salespeople, doing better marketing, doing better targeting, etcetera. We have good belief that we will do that and increase growth. In them, we see very good growth prospects with both of those companies, But it will take some time and there will be some dilutionary effect once they come in and then our kind of nominal growth will go down even if our Cinch Classic growth is still high, but focusing on driving that growth up, creating other growth engines within them is a very high big focus area. Then again, we focused a lot on cost control this quarter. We had a big cost control effort. We think our costs have We think it's merited to go like we do, but we also want to make sure we can be very confident on the cost we take are the right ones. So we had a big cost control effort this quarter in order to tune out things and take away things and take away some things and allocate them and Allocate the other things in better buckets. So that's a focus for the last quarter, but also the coming quarters to have. Synergis being an odd focus And also operational efficiency with all the M and A we've done, how do we get this together, getting them onto one platform, being efficient, automation, etcetera. Then on the product side, continue to strengthen our connectivity offering, that's our bread and butter and then high investment pace in the SaaS product for advanced conversational messaging and conversational voice and those type of products in order to have the applications or the SaaS revenue growing being a large growth engine for the future. That said, I want to thank you for your interest and thank you Thank you, Oscar. And Operator, may we have the first questions, please? And a reminder to limit yourself to 2 questions initially. Thank you. And our first question comes from Romeo Curia from SCB, please go ahead. Your line is now open. Thank you, operator. Thank you, guys, for the presentation. Starting off on the OpEx side, perhaps if you could touch upon a bit about sort of previous commentary in Q1. You said that You took some investments which didn't fully materialize, expectedly going to materialize in Q2, which I guess they did, But you're continuously taking these investments. Could you talk a bit about the cadence of the current sort of investment run rate? Has it decelerated? Or have investments accelerated? And then how these Operational efficiency programs are expected to offset that. So basically, if you could touch upon a bit about the development So the operating margin here in the coming few quarters. Thanks. Go ahead. Sure, Saurav, and that was good. I think on the investment side, what I could say is on the scale up investments, As we said in the Q1, you correctly summarized, Ramiel. I mean, we have started to take those investments during last year, And they have scaled up gradually over the quarters. There will still be some scale up, of course, investments, but we don't expect those To increase significantly over the coming quarters. I think they are more likely to stabilize. And I think, of course, our Long term goals when it comes to increasing adjusted EBITDA to gross profit stand constant and that is where we're driving our operational Efficiency, but also our integration efforts, but they will take they are related 2 technical migrations and they're related to process improvements, so they take a bit more time to realize and see in the P and Yes. Another comment to it. Please realize that the investments we took Q1 here was It's actually for taking in the big companies like Intelliquent and Message Media and a couple of days. It's like we're taking them pre we have the EBITDA. So it's a little bit It looks a little bit more than it is when you compare it to current gross profit because it's actually done to drive the very rapid M and A growth. So that's another perspective that you should have when looking at the graphs. Right. That's clear. And then secondly, this pie chart, which You showed on new client wins versus or new use cases versus displacement use cases, you mentioned that clients choose you because of your quality and reach. But could you touch a bit upon who sort of the average competitor that you're winning business from is? So in broader terms, the competitive landscape? I mean, it's all of the usual suspects, I would say, I mean, you know the big players in the market. And I think, in general, big players are winning against smaller players. That's one trend. So Winning against a lot of local competitors, local smaller players in every market is one big trend because it's hard To compete when companies get the type of quality we do and breadth in service offering. But then it's also, I mean, winning against big competitors, and we have A very, very high service quality in the market, and customers know that. And then we also win against all the big brands in the industry. So that's another route, basically. So a trend versus smaller, but also we're relatively stronger on the hike Service side, so we typically gradually win those type of businesses from the big competitors as well. Then I mean half of it was the use cases. Don't forget that. So we have a lot of interest in the new use cases as well. That was just as big as the displacement just we're positioning it correctly. That's very clear. I think just one nuance there, right? I mean, of course, what we're trying to say with this graph We have a lot of new use cases. I mean, this market is still growing and we're winning business on those new use cases. But there is still also a strong underlying growth from our existing customer base, which is helping this growth overall growth momentum that we are seeing. So that's Just in addition on that. Right. But no change in sort of The competitive dynamics here. So the displacement rate is intact versus, let's say, the last few quarters. So Q1 wasn't as Or Q sorry, Q2 wasn't a big step up here. We haven't measured this Specifically over so many quarters, so I can't give the exact details, but no, if I give more a how it Fields in the market, no big change apart from the fact that the bigger players win more and more against the smaller, I would say. We have always been Strong on service quality versus competition, and that has always been the case. And so but what is changing is that we're gradually winning more and more broad based wins. That has been changing over the last quarter. So we're kind of winning more and more and then being less and less dependent on the big tech, if you will. So that has happened. So we've kind of increased our competitors in the market in that sense, if you will. Super. Thank you both. Thank you. Our next question comes from Pedera Salvinovich from Carnegie. Please go ahead. Your line is now open. Thank you very much for taking my questions. My first question is tied to Something not in the report, but it's to the 10 DLC regulation in the U. S. That is effective as of June this year. How do you think this will impact Cinch in the U. S. Market, if any? Could this lead to gaining more business? We think it's very positive for us. We think we are one of the 2 providers with the most advanced 10D and C offerings in the market. We think the acquisition of Intelliquence Significantly strengthened that. And for those of you who don't know, 10 D and C is 10 digit long code. That is basically a phone number to speak, normal speak. And so it's basically it's a phone number to which you can both call and text. So imagine you order via DoorDash And you want to speak to the driver, then you can either text and it gets to the driver or you can call and it gets to the driver. So And you can alternate in between them. So that's a very strong service. Adding Intelligent to the mix obviously adds to our voice offering there, and therefore, We've become relatively stronger. But we believe we're strong standing, one of the strongest players in the market. We also believe that this market has been a gray unregulated market where Cinch has not played until it became regulated. So we, if you will, have nothing to lose to all upside, whereas to other players Who have a big market here, they have more to lose, if you will, because they're already big very large exposure to this market. So To us, it's mainly growth opportunity. Okay. Interesting. And then a follow-up question to what Ramil asked On the displacement charts, and I guess this market, it is I mean, it's generally quite sticky, isn't it? And the Slide, it's quite intriguing on the topic. Just looking at Synch from the outside, you are very strong in terms of coverage and capabilities. And I guess with Growth in multiple channels, the use cases like 0 click user authentication that you post today, Could this imply that displacement increases favoring Cinch because there are few that offer what you can offer and demand increases for Newer, more advanced products? I mean, like we said many times, we may have low single digit churn. So churn is not a big problem to us. Typically, we keep the customers that we have and then we have a good service quality. So yes, churn is low for us. But you can see from that chart, of course, yes, there is We've weaned quite a lot from displacements. And that is for the reasons you say, I mean, if you're a small player now with 50 developers And us and Twilio come in with kind of 600, 700, 800. It's hard to compete on the breadth and it's of offering and it's hard to compete On the service quality as well with somebody who processes $170,000,000,000 transactions, right? So yes, you do see displacements. And then our focus It's high service quality. And we typically if you compare us to a Twilio, they are better than us in winning the developer market. The early use case is volume low. And we are typically better than them when the volumes become very high and the cost quality ratio become more important. So obviously, we win against such players as well because that's our really strong side, while they win more on the new entrants in the market. So yes, that is something that area is something where Cinch is probably relatively stronger than the average on the market. Okay, clear. Thank you very much. Thank you. Our next question comes from Daniel Jubai from Handelsbanken. Please go ahead. Your line is now open. Thank you very much. And thank you for letting me on the call. And Congratulations on the solid report with stellar growth, I would say. First, a question on the we heard that you talked about some operating pricing changes That might hit the gross margin if you can't move these prices forward. So this is your risk that this continues in more markets and that if It starts to move to the prices to your customers that it could hit volumes as well or is that After the question. No, I mean, first, I should say, this is normal business in this market. I think we have some 200 price changes in a month or something. I mean, it's that's one of the core things you needed to handle in this market in order Keep margins. And that's this is what we're good at. Just so we put it down. And we have always had operator price That is nothing new. So that's kind of what we're good at handling. Now I think I do agree with the price that the rate has increased Somewhat in this regard. And that obviously puts pressure on margin in a quarter like this, yes. On the other hand, I think we have an easier time with the volumes and with the systems we have to manage the others. So it may Increased the displacement win rate as well. So all in all, as you see, very, very strong growth in messages Despite that, and I think that gives our position. But of course, yes, I mean, do we get concerned in a certain region or certain market where there's a lot of operating prices? Yes. And that's happening in Brazil right now. And therefore, we have lower growth in Brazil, but other markets are weighing out for that. Now interesting thing also that operators are starting to get competition from WhatsApp, Instagram, etcetera, because there are other channels to market. So operators will Relatively soon, notice that they're not alone anymore. So that will also relatively soon put the price pressure down in the market because They will need to compete for keeping their gross margin that they had safe for the last 20, 25 years. Perfect. Thank you. And my second question would be on the data verification authentication. You go now with your own Offering there and obviously positive for your CPaaS Services and offering. But my question is more if you see any impact on the SMS authentication volumes from the Volumes from the market we see Microsoft, Google, Twilio, Austrian, Google Mobile and all the others Also having similar offerings. So has this segment started to Take share from the SMS authentication or is that still growing? Perhaps I can jump in there with a little bit On this particular market segment, so this is using our different products, whether it's messaging, voice or in this case, data verification to authenticate users. I think you have a few different moving parts here. There are multiple tech options And they vary by geography. I know, Daniel, you're based in Sweden. You will know Bankerdel, which is a strong and secure authentication For Swedes, only issue. Sweden is a 10,000,000 population country in a very large world, right? And you have other options in a lot of different countries. So what you see here is that these carrier based Technologies have a special standing in their ubiquitous reach. You can authenticate any user on the planet, right? And what we see in practice happening is that the focus on security and digitization Yes, it's pretty massive overall. And this is a proven and well working and secure option. And then there are some nuances between the different methods, right? And that's why we continue to see growth in this area. Perfect. Did I answer your question, Daniel? Yes. Yes, I shouldn't be too worried, I guess, at least short term. Thanks and have a great summer. Thank you. Thank you. Our next question comes from Daniel Tushon from ABG. Please go ahead. Your line is now open. Yes. Thank you very much. So first question for Oskar, I guess. As SDI will soon start to contribute to the organic gross profit Growth for the group, can you say something on where you are in the process of that integration and the current run rate you see in growth? And also what you expect going forward given the investments You're doing growth. So account run rate is lower. I think We gave the numbers as they were at acquisition. I think they are lower in that type of range. The long term, we see no reason that this wouldn't grow as much as Cinch Classic, if you will. It's in the same industry, same business. What we're doing is very concrete. It's like, okay, SBI, you have no people New sales. Well, if you have no people talking about new sales, you won't grow. Let's add that. Or, hey, your targets are a little bit too easy Per rep, let's increase the targets per rep or your lead generation per the number of leads coming in per rep is too low and while But we have this kind of process over here, which is working better. Let's add that to your and give more leads to your reps and things like that. And you're also working on the COGS side, etcetera. So there's no reason it wouldn't over time Turning to Cinch, that is our goal. But as you know, with any type of operational change, it takes some time because It's a tanker that you're turning and it takes some time to do it. So that's kind of the growth area and what we're targeting and a Couple of the things. It's very, very concrete, as you can see. On the other side, on the integration forum, it's moving platforms over. There, we have divided all the Customers into cohorts, we have said what we need to develop in order to port them over and our development teams are developing them and we have moved the first customers and then as the features come online Then when we move cohort after cohort, and we typically say it takes like 12 to 18 months to move, and I think we're Still targeting that type of time range in order to move the traffic over to our platforms and eventually And at some 2 years after shutting down the platforms and reaping large amount of synergies. Beautiful. Can you say if you see like no growth current run rate or if you actually see a small negative current run rate in the growth in FDI? I will defer that question to Rafa. That's not the number we're disclosing. I think it's fair to say that Its growth is in line on a broad broad terms growth is in line and growth expectations short term are in line with where we were when we announced the transaction. I mean, sales transformation do take time. I think Oscar outlined very much the things that we're doing. Obviously, the broader Cinch product portfolio helps a lot in that sense. We will be obviously at that point in time when we integrate it into the rest of the Cinch business, we will be able to call out Just as we do on gross on adjusted EBITDA now, we will be able to call out sort of the SPI impact, so to say, on gross profit, Right. So I think we will help with that information when we get there. I see. Okay. That's fine. That's a good answer. Okay. So the second one is for Russia. And the large negative working capital in Q2, is that purely timing related? Or does it also include effects from acquired companies maybe having different payment terms with suppliers and customers that you could change over time? Or how should we see about the more long term working capital tie up here? Yes. No, no, I think it's not Only purely seasonal. There is definitely a large seasonal impact. I think as we are doing business around the world, we find that there's a lot of levers that we can pull to get Great deals both with customers as well as with operators often. I think There are ways in which we can use our strong cash position to leverage growth going forward. And of course, we're trying to do that. And therefore, working capital becomes a good tool for us to fuel future growth. And part of that impact, it's a bit lumpy. It comes in sometimes, but part of that impact is also affecting working capital this quarter. Okay. Thank you very much. Thank you. The next question comes from Stefan Goufan from DNB. Please go ahead. Your line is now open. Yes, hello. First, I would like to ask a little bit about the investments in scale. You talked about that you have done large investments also in the conversational platform. So if can you elaborate a little bit on how much is building the organization in order To handle the acquired companies and how much is sort of investments in your capabilities of organic growth? I give a first comment, then Roger, I'll leave over to you. So first, all the In the conversation and messaging area, which is more product, we don't call that scale up. That's kind of that's you can see those within The messaging performance and EBITDA. So within that was a 31% growth this quarter. You had all of that. So basically, you could say that SMS is even stronger if you wouldn't do it. So that's not what we call scale up because that's kind of what we Yes, organic core business development. What we see as scale up is more of those things where we clearly can say, and we're pretty Strict on this, clearly say, okay, if we're going to add Intelequent here, Russian, how are you going to account for it? Or if we're going to Intel add all the going to 600 people from Intelliquent into our HR systems, How are we going to handle them? So that's more the type of investments we do on the scale up side. So just to divide them. Roshan, don't know if And Greg can add some color to that. Yes. I think it's I don't know if we want to give you just the breakdown that you But those are the 2 large buckets. I think, obviously, we are investing I mean, we have to realize On a pro form a basis, this company is now at roughly $19,000,000,000 in revenue and $2,600,000,000 in adjusted EBITDA. We're spread over 50 countries. I think there's a lot of functions that weren't Mature enough for this kind of business over the last couple of years that we were rapidly having to build up. And that's It's quite a challenging journey from a financial perspective, but also from a human perspective for many of our colleagues as they stretch to manage This powerful growth engine, and that's one bucket of investments, so to say. It's in systems and it's in people and processes. And then the third one is definitely investments in new products. I mean, I think we've shown you Just to lay a couple of the different ones. I mean, it's the verification product that we launched. It's the conversational messaging where we're adding more and more channels. We recently added Yes, the Instagram. So we are rolling out new products, which make us more attractive to existing and to new customers And for the future growth. So those are broadly the 2 buckets, yes. And the last ones, the product ones are not scale up investments, just to be clear. That's Yes, that's fine. Then I believe the integration cost was Exceptionally high this quarter. And given that you had quantified integration costs for STI to EUR 6 To €8,000,000 Have you increased sort of the restructuring Charges that you're taking from the recent acquisitions? Or how should we look upon that going forward? I can start there, Oscar. Yes. I think looking at individual transactions, of course, there are Definitely, STI, I think we said that last year. The carve out costs that we had to incur to sort of be able to close the STI transaction So looking at individual transactions, it's difficult, for example, if we are implementing an ERP And how do I look at it across all of the different acquisitions that we're doing? But when we look at The sum total of the restructuring charges that we have across the acquisitions that we have done and the acquisitions that we have announced, We are still forecasting our restructuring charges to be well within those limits. So We're not right now foreseeing that we will exceed that total spend budget. The restructuring charges can be a bit lumpy from quarter to quarter. So we shouldn't expect The high level in Q2 to be a recurring feature, I think. No, I agree. Totally in line individual cases, yes, higher or lower, but totally in line. And then we're obviously we're doing this to reap the synergies, and we see Huge economies of scale. So remember that we believe comparing us to a player that operates in one country, we believe they have 5 to 10x higher OpEx per message than we do. So It's a huge scalability in this business, but that's why we pushed this because we see the scalability effect. Yes, great. Thank you. Thank you. The next question comes from Frederic Lieuther from Danske Bank. Please go ahead. Your line is now open. Thank you, and thank you for taking my question late into the call. Could you just please, Oskar, maybe update a little bit on your thoughts regarding the U. S. Market? We've seen Twilio acquired a minority stake in Zooniverse and then they bought Zipwhip and you have Infobip acquiring OpenMarket. How is this sort of changing the dynamics in the U. S. Market maybe specifically? Or if you feel it changes the dynamics in the International, Mark. I'm happy to listen to your thoughts around that. And secondly, Could you just update a little bit on the preparation work sort of to get all the necessary regulatory approvals for the Intelligrant acquisition in place Where you are and how you feel about it? Thank you. Yes. No, on the first one, We expected competitors to follow suit when we did the acquisition spree. I think we set the market. We proved the market this was possible, and I think we've seen quite a lot of competitors follow, Infowhip and Twilio being 2 of them. But we expected that, We focused on acquiring the companies we wanted most first, and we're very happy we did that. And so we think we sit within a very good space. Does it affect us in a major way? No. I mean these are competitors we meet every day anyway. So I think it's like It takes away a couple of competitors but makes a couple of the big ones bigger, but that was expected. So no, not in In a major way impacting us there. But obviously, we in more markets will compete against Twilio and then in more markets We'll compete against Infobip, but we know how to do that, and they know how to compete against us. So I think it's a pure consolidation effect, but nothing more than that. And I do think you will see now a couple of winners here being Standing out against the Genoe versus the crew, and we're very focused on being one of them. And I think we're very well positioned to be one of them. So I think that's what you'll see is happening and the bigger players winning us the smaller. On the second question, Intelliquent, We feel comfortable about that. The regulatory approval on anti competition, we supplied. We got no comments. So we see that as 2. And then you have the regulatory for Operator licenses in many of the states. And I think that's proceeding. And last time I heard, we were still targeting the dates We have communicated to close the transaction, and our lawyers are still saying it's mainly administrative And very low risks on that side, but it takes some processing time. Okay. Perfect. Thank you. Very clear. Thank you. Our next question comes from Mike Blanemar from Northland Capital Markets. Please go ahead. Your line is now open. All right. Thank you. Yes, congratulations on the quarter there. I guess, Oscar, can you just talk a little bit about the trends you saw in major geographies, Europe, India and Brazil in particular, I guess. And then how do you think about the influence of Just kind of reopening, going back to school and work versus periods of travel restrictions on the industry. So trends has been I mean U. S. Has been growing very good it's very good solid growth markets with very large customers. Also the American cloud ecosystem, it's like U. S.-based, but actually driving global growth in terms of message delivery. And that trend, I think, is continuing. So strong growth in the U. S, but also consider U. S. As driving the cloud ecosystems globally with a lot of international message delivery. Europe, I think, was a little bit slower, but now we are seeing solid growth there. So we're very happy with the turnaround in Europe from our perspective, so solid growth Europe. Brazil and India has been very high rapid growth markets For the last quarters and last years, up to the 25% level. Brazil now, you see a little bit slowdown due to some operating changes. Typically, that takes a couple of quarters and then it comes back. I see no difference in the overall market perspective. India, you also see that right now Some operating price changes and then you see the growth slowing in these quarters. But speaking to the leaders, they see the growth coming back as we have gone through this in But right now, now you have some hit in those markets, but we don't see that as long term. On the 2nd question, remind me now, please. Yes. Last year, as people sort of had travel restrictions, worked from home, did more online shopping, you saw an uptick I guess as people go back to work, school, stores, how do you think about that influencing volume? Well, we saw a downtick in retail and ride hailing, Taking e commerce and other segments, we think we were pretty all balanced 0 negative 0 impact. So therefore, we that's how we see it going forward as well. If anything, a bit positive, but when the pandemic ends. But I think in general, we don't we didn't get and we don't think we'll get a big COVID impact one way or the other. The exception is maybe Intelliquent, who saw a big COVID drive as more and more Zoom calls, etcetera, where they supply the phone numbers. So there, there may be a bit of COVID impact, and I think we have reported that in various communications. So that's the area, which Not closed yet, but where you may have a little bit of a larger impact. Got it. And what percent of your customers By your SaaS offering as opposed to connectivity only? Yes. That's not something we have disclosed, But it's an increasing rate. And obviously, the big thing being SMS and voice, if including telecom, but then an Increasing rate or buying various types of other services and SaaS services and other channels and what have you. So It's an increasing rate, but we haven't given the figures externally, so we shouldn't do that now either. Okay. Thank you. Thank you. We have a follow-up question from Ramiel Curia from SEB. Please go ahead. Your line is now open. Yes. Thank you. A follow-up on the gross margin side. Perhaps everything you know today, of course, assuming no price changes From here on 4th from operators, would you say that Q2 sort of consumed the entire Price hike impact from Brazilian and Indian operators? Or is there still some short term downside here on the gross margin? So first, we do assume operated price changes every quarter. Remember, we have 200 of them every quarter. So we That has been every quarter we have price changes, just so we're clear, and it will happen in some market next quarter as well. So that's part of the business model and has In part of the numbers every single quarter you've looked at us. Now in Brazil and India, Hard to tell. I'll let Roshan comment on this, but typically have a larger impact in the beginning and then tailing off. But exactly how, it's always very hard to say in those type of markets. But that's the typical type of impact. Roshan, don't know if you have another comment there. Sorry, I missed that big part of the question, Oscar. Can you just ask me what you want me to comment on? Yes. It was if the price impacts, operating price hikes in India Brazil, if the largest impact has been taken or if we're going to see Gradually larger impacts going forward. Yes. I think The impacts have come in during the quarter. Of course, there will be a full quarter impact probably Slightly going forward, but we don't expect that to be material on an aggregated basis for the company. And remember, this happens every quarter. Yes. It's normal. These 2 were a little bit bigger than normal, but we had that last year as well. Yes. Yes. That's Fully understood. But the way you're basically saying right now is that you'll see a gradual work back, if you will, as you push out the price hikes Gradually towards customers, right? Or Yes. Typically what happens exactly. Typically what happens if we take operators Raise prices on a day, boom, prices go up 20%. Okay. Then some customers you do straight away. Some Customers need to work a little bit with some customers you cannot increase, you do it after 3 months or 6 months, and then you gradually kind of find your way back and The market becomes a little bit more competitive and you win some traffic and you lose some traffic and then after a while it's settled down again. So it's kind of big impact and then it kind of you get it back to the normal levels. That's typically what happens. So gradually tailing off over 2 to 3 quarters. Okay. That's very clear. Thank you, guys. Thank you. The final question comes from Mike Blairmore from Northland Capital Markets. Please go ahead. Your line is now open. Great, thanks. On your messaging business, can you track or do you have a percent of volume that is two way messaging? I think a lot of messaging outbound, but there's also inbound. So do you have a kind of breakdown of what's kind of inbound versus outbound from your customers? We do. I don't know if we give it, but I don't know if I actually know that specific metric, Thomas. No. It's a good question. No, we do not disclose it. It varies quite a lot by geography. So some of the markets are in the lead here, the U. S. In particular, where two way messaging is more commonplace. In Europe, it's relatively more one way often because you send from an alphanumeric sender, right? So say Walmart rather than a number as the sender ID, which is not possible in the U. S. So it looks nice. On the other hand, you can't reply. So there are these regional variations. U. S. Is relatively in the lead. But of course, 2 ways is a growth area for us, and it's a growth area also for Message Media, which are building a lot of their growth around conversational use cases on SMS. As we then look into new channels like WhatsApp and Instagram, they are almost by definition two way, right? But there was a lot of two way happening on SMS, even if the vast majority is one way, both for us and all competitors. Okay. Thank you. Right. Operator, if that was the last question, I think we have A question from the web. I'll ask that one, and then I'll hand back to see if there's anyone in the phone queue. We have Michael Konstantinos asking On the web, can you please explain your brand strategy? Do the acquired companies continue operating under their own brand Once they are integrated or are they rebranded under Cinch? Oscar? General strategy, all one brand, Like Cinch or ACI, STI, Intelliquent, all of those, all one brand. No questions. We can only have one brand in the market. The only exception would be a couple of Brands under Message Media, partly because it's a little bit online. It's you need more shelf space, if you will. So more brands are maybe better. You need Target the brands to different personas, and you need to have very rapid iterations on the website. So there, it's better to give more Freedom to the local teams. So that is the only exception to that rule. Apart from that, it's all in one run. Very clear. Thank you. Operator, any final questions? There are no audio questions. Thank you very much. In that case, thanks for taking the time with us today and for all the good questions. Wishing you all a very good and warm summer. And with that, a little bit of thanks. Oskar, if you have any closing remarks, I'll ask you for them to finish the call. I mean, thanks a lot for your interest. Thanks a lot for your continued interest in Cinch. And we are happy To deliver this quarter, we think it's very good, and we are very focused on continuing to deliver good financial numbers To you, and we also thank you for the support and all the M and A we've done. So thanks a lot for that. Without that, it would not have been possible. So thank you for that. That said, have a