CM.com: Finally Profitable, but No Return on Capital Yet
CM.com is back in the black for the first time, but earns only 3.0% on its capital. Fair value ~€5.80, price €6.35. Rating Hold.
CM.com reported a net profit of €1.0m in the third quarter of 2026.[1] That sounds modest, but it is a turning point: from 2021 to 2025 the Breda-based company made losses five years in a row, €114.5m in total [own calculation].[1] Today the whole company is worth about €211m on the stock market [own calculation].[4] I wanted to know whether the turnaround already supports an investment. My answer: costs are under control, the return on capital is not yet.
CM.com earns most of its money with SMS and WhatsApp messages, which leave a gross margin of only about 21%. Hard cost cuts have lifted adjusted EBITDA strongly, but CM.com earns only 3.0% on its invested capital, far below my 11% cost of capital. Running the 2028 targets through with haircuts, I arrive at a fair value today of about €5.80 and an expected return of 6.4% p.a. Rating: Hold; an entry only becomes interesting below €5.34.
This article comes as a pair with the much larger Swedish competitor: Sinch: Smart Buybacks at SEK 24, Too Expensive at 46.
1. Lots of messaging revenue, little margin
CM.com offers four businesses from one source: messaging for businesses (CPaaS), software and AI for customer conversations (SaaS/AI), payment processing (Payments) and ticket sales for events (Ticketing). Messaging dominates revenue; the smaller businesses contribute a disproportionate share of gross profit.
| Segment Q3 2026 | Revenue | Gross profit | Gross margin | Gross profit Q3 2025 |
|---|---|---|---|---|
| CPaaS | €54.3m | €11.3m | 21% | €10.5m |
| SaaS/AI | €6.1m | €5.3m | 87% | €5.3m |
| Payments | €3.2m | €1.7m | 53% | €2.5m |
| Ticketing | €3.7m | €3.0m | 81% | €2.9m |
| Group | €67.3m | €21.4m | 31.8% | €21.2m |
Source: Q3 2026 presentation, segment margins own calculation; segment values rounded.[1]
CPaaS makes up 81% of revenue but only 53% of gross profit [own calculation]. In other words, the 9% revenue growth comes almost entirely from the low-margin part. Group gross profit therefore rose only 1%. Payments lost a third of its gross profit, SaaS/AI stood still.[1]
2. Unit economics: 0.4 cents per message
The unit CM.com depends on is the single message. In the third quarter the company sent 2.8bn messages, 17% more than a year earlier.[1]
- Gross profit per message: €11.3m ÷ 2.8bn ≈ 0.40 cents [own calculation]
- Rich messaging (WhatsApp, RCS and other channels) is growing 40%
- Gross profit per full-time employee: €142,000 after €133,000 a year earlier
- Of this, adjusted EBITDA retains 26.5 ÷ 81.8 = 32% of gross profit [own calculation, last twelve months]
Source: Q3 2026 presentation and IFRS quarterly data.[1][2]
The competitive advantage is narrow. In messaging, CM.com competes with larger providers such as Sinch, which have more volume and more direct network connections. CM.com is strong where it sells software around the message: Ticketing and SaaS/AI reach gross margins above 80%. Together, however, these businesses are only 15% of revenue [own calculation].[1] My early warning signal: recurring software revenue (ARR). It stood at €35.1m in the third quarter, after a peak of €36.2m in the first quarter.[1]
3. Return on capital: still far below the cost
CM.com is saving its way to health. Full-time staff fell from 628 to 574 within a year, and adjusted operating costs fell 12%.[1] Whether this creates value is shown by the return on invested capital.
| Step | Calculation | Result |
|---|---|---|
| EBIT, last twelve months | −0.579 + 0.653 + 0.662 + 2.637 | €3.37m |
| × (1 − tax rate 25.8%) | 3.37 × 0.742 | €2.50m |
| Invested capital 09/2026 | equity 26.9 + net debt 55.7 | €82.6m |
| Invested capital 09/2025 | equity 24.6 + net debt 59.8 | €84.4m |
| ROIC, last twelve months | 2.50 ÷ 83.5 | 3.0% |
| ROIC, Q3 2026 annualised | 2.637 × 4 × 0.742 ÷ 82.6 | 9.5% |
Formula: ROIC = EBIT × (1 − tax rate) ÷ average invested capital. Net debt as defined by CM.com: credit facility minus freely available cash, excluding leases. Values from the IFRS quarterly data.[2] The tax rate is the Dutch standard rate and my assumption.
I set my cost of capital at 11%: CM.com is small, indebted and was unprofitable for a long time. Even the best quarter, annualised, reaches only 9.5%.
“CM.com has proven that it can cut costs. It has yet to prove that it earns more on its capital than that capital costs.”
Growth quality: investment without growth
CM.com invested €16.3m over the last twelve months, mainly in self-developed software. That is 20% of gross profit [own calculation].[2] Yet gross profit, at €81.8m, was below the 2024 level of €83.1m.[2] In other words, the investment of recent years has not bought any growth so far. As long as that remains the case, growth must not add value in my valuation.
| My test | Result | Reason |
|---|---|---|
| Return on capital above cost of capital | ❌ failed | 3.0% against 11%, even annualised only 9.5% |
| Understandable competitive advantage | ⚠️ partly | Strong in ticketing and software, weak in messaging |
| 15% p.a. hurdle | ❌ failed | 6.4% p.a. to end-2028 (section 6) |
| Growth quality | ❌ failed | Investment of 20% of gross profit, gross profit stagnant |
4. The balance sheet: convertible gone, credit line remains
At the end of 2024 the balance sheet still carried €100m of convertible bonds. At the end of 2025 there was instead a credit facility of €75m; at the end of September 2026 it stood at €70m.[2] Net debt fell from €81.9m at the end of 2024 to €55.7m, and its ratio to adjusted EBITDA from 4.5x to 2.1x.[1] In other words, the balance sheet is no longer an acute risk. The presentation does not state when the credit facility matures.
5. What CM.com is worth: about €5.80
A classic cash flow model does not yet work for CM.com, because hardly any free cash flow is left for shareholders. In the first nine months of 2026 it was about €2.5m by my rough calculation: free cash flow as defined by CM.com of €9.4m minus €6.9m of other financing outflows excluding loan repayment.[2] I therefore value CM.com on the adjusted EBITDA achievable in 2028 and a multiple on it.
| Scenario end-2028 | Gross profit growth p.a. | EBITDA as % of gross profit | EV/EBITDA | Net debt | Value per share |
|---|---|---|---|---|---|
| Bear (30%) | 2% | 33% | 7x | €50m | €4.44 |
| Base (50%) | 7% | 38% | 8x | €40m | €7.51 |
| Bull (20%) | 12% | 42% | 9x | €30m | €11.10 |
| Weighted value end-2028 | 0.3 × 4.44 + 0.5 × 7.51 + 0.2 × 11.10 | €7.31 | |||
| Fair value today | 7.31 ÷ 1.11^2.25 | €5.78 | |||
Formula: gross profit over the last twelve months of €81.8m × (1 + growth)^2.25 × EBITDA share × multiple − net debt, divided by 33.22m shares. Base example: 81.8 × 1.07^2.25 = €95.2m gross profit, 38% of which = €36.2m EBITDA, × 8 = €289.4m, minus 40 = €249.4m, ÷ 33.22 = €7.51 [own calculation].[1][2] The bull case takes the company's target of at least 15% gross profit growth with my usual 20% haircut.[1] The multiples are below Sinch's current level of about 11x, because CM.com is smaller and earns less.
Bear case (30%)
€4.44
- Gross profit barely grows
- Cost cuts exhausted
Base case (50%)
€7.51
- Rich messaging and HALO carry
- EBITDA €36m in 2028
Bull case (20%)
€11.10
- 2028 targets largely met
- EBITDA €44m in 2028
6. Return: 6.4% p.a. is not enough
| Step | Calculation | Result |
|---|---|---|
| Weighted value end-2028 | from section 5 | €7.31 |
| Return p.a. | (7.31 ÷ 6.35)^(1/2.25) − 1 | 6.4% |
| Entry for 15% p.a. | 7.31 ÷ 1.15^2.25 | €5.34 |
Formula: (value at end-2028 ÷ purchase price)^(1/2.25) − 1. The period of 2.25 years runs from the third quarter of 2026 to the end of 2028 [own back-of-the-envelope calculation].
6.4% p.a. is below my cost of capital and far below my 15% hurdle. With the failed return-on-capital test, CM.com is not a buy under my rules.
7. Upside and risks: cost discipline versus weak growth
- Adjusted EBITDA 2026: guidance €27.6–28.6m, +39 to +44%
- HALO ARR more than doubled to €4.0m
- Rich messaging +40%, Meta Premier Partner
- Leverage cut from 4.5x to 2.1x
- Gross profit grows only 1%, margin falls to 31.8%
- Payments loses a third of its gross profit
- Total ARR declining since Q1 2026
- Credit facility maturity unknown
Evidence: all values from the Q3 2026 presentation.[1]
Briefly noted
- CM.com has restated revenue from certain messaging traffic net instead of gross, retrospectively from 2022; over four years this reduced revenue by about €34m, while gross profit and EBITDA were unaffected.[3]
- The 2028 targets: gross profit growth of at least 15% p.a., gross margin around 35%, EBITDA margin of 12–15%.[1]
- On the stock market CM.com costs 9.5x its 2026 EBITDA guidance [own calculation].[1][4]
- The 11% cost of capital and the 25.8% tax rate are my assumptions.
- Invested capital excludes lease liabilities, because CM.com does not show them separately in the presentation.
- The other financing outflows of €6.9m probably include leases and interest; the split is not published.
- Multiples of 7–9x and net debt in 2028 are my assumptions.
- Segment values are rounded to €0.1m; the totals differ slightly from the group figures.
- Maturity and terms of the credit facility: ‹TODO: check annual report 2025›.
Conclusion
CM.com has cut costs, repaired its balance sheet and reached operating profitability. But growth comes from the low-margin messaging business, and the investment so far has not delivered higher gross profit. CM.com earns 3.0% on its invested capital; my fair value is about €5.80.
At a price of €6.35 I expect 6.4% p.a. Rating: Hold. CM.com becomes interesting if gross profit grows at double digits for two quarters in a row or the price falls below €5.34.
Update log
- 25 Oct 2026 — First publication.
Sources
- CM.com 2026 third-quarter results (presentation and press release), CM.com N.V., 16 Oct 2026. Revenue, gross profit, segments, EBITDA, net result, net debt, leverage, employees, messaging volume, ARR, HALO, 2026 guidance, 2028 targets, five-year overview. → https://www.cm.com/cdn/web/en/file/investor-relations/cmcom-q3-2026-presentation-press-release.pdf
- CM.com Financial Statements IFRS Q3 2026 (Excel), CM.com N.V., 16 Oct 2026. Quarterly income statement, cash flow and balance sheet, five-year overview. → ‹TODO: Link›
- CM.com Prepared Remarks Investor Call Q2 2026, CM.com N.V., 21 Jul 2026. Net presentation of messaging traffic under IFRS 15, about €34m over four years. → https://www.cm.com/cdn/web/en/file/investor-relations/cmcom-q2-2026-prepared-remarks-investor-call.pdf
- MarketScreener, market data CMCOM (price €6.35, 33.22m shares), as at 23 Oct 2026.