I was looking at the stock "Sinch". It recently released a bad report according to media. I did not really understand why. I looked up the report and it looked good to me which made me more intrigued since there is something here that I do not comprehend and is mysterious to me.
The following shows a picture from the 2022 Q1 report which is referred to by the media.
I will also add a picture below showing the trend for the revenue, profit and some more financial data for the previous years.
From the above it to me seems really good. For example the gross profit increase by 156% and net sales increase by 96%. With this being stated. It seems very strange how this is considered a "very bad report", it was so bad that the stock dropped 20% in a single day. When reading more about this I notice that the key information was "organic growth". It has decreased over time and was now currently at "2%". I wanted to look more into this and apparently there are two types of "organic growth" one in the section of net sales and one in the gross profit section. The gross profit section is the one that the media mentions. Here is what I found in some of the previous reports regarding the organic growth related to gross profit.
2022 Q1: 2%
2021 Q4: 5%
2021 Q3: 18%
2021 Q2: 32%
It surely has decrease and I can understand that this is probably not good. But their growth (gross profit) via organic, acquisitions and FX has grown by 156%. Which should be more important than that the organic growth has decreased? If the overall growth (gross profit) decreased then I believe that would be much worse. My question is, how can the organic growth be so important that all other data seems to be totally neglected?