And So it Begins: RouteMobile gets Acquired; Sinch Announces Q2 Results; And a Reminder about Process Reviews
It's Earnings Season Again
RouteMobile Gets Acquired
Belgian Telco giant Proximus acquired a 59% stake in RouteMobile for $721 million. This values RoutMobile at $1.2 Billion. RoutMobile had a 78% “revenue surge” of $434.5 Million and simultaneously doubled its profit. With those kind of numbers, it’s easy to see why RoutMobile commanded an almost 3.5x multiple on Revenue. Congratulations to CEO Rajdip Gupta for a great result in a tough market!
Additionally, when combined with its Telesign acquisition, this transaction propels Proximus a bona fide CPaaS powerhouse with a global footprint and on track to earn $1B per year in revenues.
Sinch Delivers a Strong Quarter
Speaking of CPaaS giants, Sinch delivered a strong Q2. Some key learnings:
Efficiency Focus Pays Off: They beat their cost control targets driven by improving their messaging margins and streamlining central functions.
Messaging is a tough business: Market conditions “remain adverse” and it expects it to stay this way through the rest of the year. There maybe no seasonal bump in Q3 and Q4 from its bread-and-butter enterprise clients. SMB is another topic we discuss below. Interestingly, India was a source of major growth.
SMB Continues to be a Growth Driver: SimpleTexting is driving “double digit” SMB growth and pulling along the lagging Australian business. Overall, the MessageMedia business improved GP thanks to improved COGS as well as platform consolidation (SimpleTexting migrated to the MessageMedia platform). SMB messaging, unlike enterprise, continues to flourish in this macro environment.
As an industry bellwether the lack of seasonal uplift should weigh on other CPaaS players as well. Twilio in their Q1 call for instance, refused to give any revenue guidance beyond Q2. It will be interesting to see how it and others see the rest of 2023.
And Finally
In the 5 or so weeks left in the Summer, if you are so inclined, take the time to review not only what you do with your personal time, but what your teams are doing with theirs. This review process will help protect your culture!
Unwatched processes, however, can take a life of their own. Peter Drucker calls this “organizational obesity.” He contends that in companies with such bloat, processes have to prove their ineffectiveness to be killed. Warren Buffet calls this the “institutional imperative”-the tendency of companies to engage in activities for their own sake.
Happy Monday!
TJ