Sinch publishes its 2025 Annual Report

The market should read this as a margin-quality inflection, not a growth story. For a communications platform, the biggest second-order effect is that operational leverage from AI and product mix can expand earnings faster than revenue, which matters more in a de-rated software tape than headline top-line prints. If management is proving it can defend profitability while still funding RCS, email, and enterprise expansion, the equity can rerate as a higher-quality cash conversion story rather than a low-multiple cyclical IT services proxy.

The competitive nuance is that the real battleground is not just share, but customer retention economics across channels. Enterprise messaging and CPaaS-like businesses get punished when pricing compresses, yet they can quietly widen moat if AI reduces support costs and improves delivery reliability; that lowers churn and raises switching costs before it shows up in revenue growth. Smaller point-solution vendors are most exposed here because they lack the scale to absorb AI capex while also matching product breadth across SMS, RCS, email, and self-serve.

The contrarian risk is that investors may over-index on the word "AI" and underweight execution drag: if monetization lags, AI spend can simply mask sluggish organic growth. The next 1-2 quarters matter most for evidence that profitability gains are durable rather than one-time cost actions; if gross margin or net retention softens, the story reverts quickly to a mature platform with limited multiple support. Conversely, if management keeps delivering incremental margin expansion while enterprise and partner channels stabilize, the stock can work on multiple expansion even without a dramatic revenue inflection.