Text S.A. Stock

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to the Discussion of Text Q4 2025-2026 KPI Conference Call. The call today will be hosted by Marcin Droba and Lucja Kaseja from the Investor Relations department. [Operator Instructions] So without further ado, I would now like to pass the line to Lucja. Please go ahead, ma'am.

Good afternoon, everyone. Thank you for joining our webinar. We will now present and discuss both our operational data for the past quarter and our outlook for the upcoming months, of course, this time in English. First of all, please take a moment to read the disclaimers, especially those regarding forward-looking statements. [Technical Difficulty]

I can go straight to the point, as you already know from the current report published last week on Thursday. The MRR at the end of March stood at USD 6.93 million. This means that during the quarter, the Text Group's MRR decreased by USD 50,000. This is a smaller decline than in the previous 2 quarters, but of course, it is not a reason to be satisfied. What matters, however, is what lies behind it.

First and foremost, January and February were quite stable as we reported in our February quarterly statement and the MRR drop occurred in March. That month, we introduced some changes to our customer acquisition process, specifically some experiments, including redirecting leads from the chatbot.com website to the Text App. This initiative provides us with a lot of necessary data, but we are still losing some of the leads along the way, although we see improvement almost every day.

In February and March, we also observed an increase in customer churn, primarily due to unpaid subscriptions. We believe that especially in March, this is an early reaction to the planned end of grandfathering for existing LiveChat customers, which we started communicating to them precisely since the beginning of March. This is a move that will significantly impact our KPIs, especially starting from April and into the following quarters. The picture of the past quarter looks much better when we look at our cash flow, which is reflected in the collective payments -- in the payments received data.

Here, we have a 0.4% year-over-year increase and 3.1 percentage increase compared to the previous 3 months. This is the highest quarterly value recorded in this financial year and the highest since Q2 of the 2024, '25 financial year. Differences in the dynamics between MRR and payments received usually stem mainly from the distribution of annual payments. However, we are also in a situation where more revenue kind of leaks from our reported MRR. We are, of course, referring to payments received under postpaid per usage model.

Here, we see a significant increase, especially in payments for API usage. We reached a quarterly value of over USD 0.25 million, up from the previous 3 months by over 160%. On Slide 6, we can see that the steady growth in the share of larger clients in our MRR. During this quarter, the share of customers with an ARPL over USD 500 increased by 1 percentage point. This is a favorable trend that should translate into better revenue retention over time as this customer group stays with us longer and is more open to upselling.

The next slide shows how the share of customers paying for more than one product from the tech portfolio is currently growing. In Q4, they already accounted for 38.8% of our MRR, 10 percentage points more than a year ago and 1.6 percentage points more than in the previous 3 months. We are always thrilled to share our customers' success stories. This time, it's a brand very well known in Poland, STS, which handles 0.5 million chats annually and does it phenomenally.

The video mentions a satisfaction score of 82%, but right up to the filming, the team impressed that they had reached 85%, an excellent result made possible only with the best tools. You will find a link to the video in the presentation. STS uses 4 of our products: LiveChat, ChatBot, HelpDesk and KnowledgeBase. It is worth noting that our AI agents are doing great and constantly improving, achieving a resolution rate of 74% compared to the industry average of around 59%.

For a human agent, this metric is usually between 70%, 75%, while other market players recently declared 60% as a success. Importantly, this average includes accounts that has not yet fully trained their AI agents on their own data. For customers who have completed the training phase, the results are even better, ranging between 80% and 90%. And for you to understand the metric, a chat is considered resolved if the user receives a complete answer to the reported issue, the user raises no further concerns and the interaction ends with no unresolved follow-up questions.

The most important product updates this quarter relate to the agent AI area, and we -- and were rolled out in March. We enabled our customers to create multiple AI agents within a single work space. And most importantly, we introduced custom skills feature. Thanks to this, a user can describe in natural language what a given agent is supposed to do, and the AI will autonomously prepare the appropriate workflow, enabling the agent to execute specific tasks. Our work in the last quarter also involves many initiatives, often smaller projects that fit into a bigger picture.

In our quarterly report, we mentioned, among other things, that our products are now available in the Microsoft marketplace, that we obtained Meta business partner status and that we entered the marketplace of Kandji a security app. In terms of security, we also partner with Hexnode, a device management and security company, and we are launched in their marketplace.

Infrastructure changes have translated into increased reliability and quality. We've returned to actively encouraging our customers to give us reviews and feedback, and the results are already visible in various rankings and listings. This is very important also because it directly translates into credibility and visibility in AI models, where we've seen clear improvement.

Of course, we still have a lot of work ahead of us in this area, and we will simply have to wait a bit to see the full effects of many of those actions. To sum up the quarterly picture, we recorded the best quarter in terms of payments received in this financial year. Unfortunately, we have an MRR decrease, though it's smaller than in the previous period, and it reflects the fact that a small but rapidly growing part of our business is not captured in MRR.

In this quarter, the MRR decline is at least in part the result of our deliberate actions. And as we have -- as we mentioned you usually ask about new clients and the results of our sales department. This quarter, we signed several significant renewals, some of which included upgrades. The biggest ones concerned our key accounts were hundreds of agents work with our products. These are clients from industries such as Biotechnology, ForEx and iGaming. These renewals and upsells were made possible by our SOC-2 certification. If we look at the direct cost of obtaining the certificate, they have fully paid off. For now, it mostly helps us play defensive, but we expect...

Ladies and gentlemen, please standby.

[Technical Difficulty]

I lost my connection. I am back. Hopefully you hear me well now.

Yes, yes, we do.

Thank you. Sorry for those problems. Coming back to the topic I was just discussing, so the new clients. This quarter, we acquired new clients across multiple countries and industries and our strongest sector were education, including top universities in Singapore and New Zealand, finance and insurance with new clients from the U.S. and sports betting.

And the last slide on my side, in the next 3 quarters, the biggest direct impact on our operational metrics will come from ending price grandfathering for LiveChat customers as the new pricing for the existing customer base has been in effect since the beginning of the month. As you surely remember, at the end of September, we raised LiveChat prices for new customers. The price change varied across different plans, but on average, it was around 20%.

As we said 3 months ago, the new pricing was accepted by the market and after a short dip conversion rate returned to the previous levels. The end of grandfathering pricing for LiveChat will likely translate into some increase in churn in short term, but we estimate the net effect should be significantly positive for our recurring revenue. We assume the largest impact of MRR -- on MRR will be recorded in the current quarter.

The price changes will not affect customers using the Text product or those whose annual contracts expire after 2026. We assume 2027 will be the year of migration to Text. We are continuing our work on SOC-2 Type 2 certification, which will confirm that all implemented procedures are functioning as intended, and we are currently during the observation period.

Starting tomorrow, the product operating under the working name Text App will off to become the text solution. The communication campaign associated with this brand is scheduled to begin in May. Please don't expect fireworks, by the way. There won't be a big bang at launch. It will be a safe, scalable process where budget decisions will be made based on data and results in specific channels. And a major event related to this campaign will take place in the fall. We will certainly be much more active in PR. After a long break, we have someone on board responsible for this area.

And we also want to start collaborating with industry influencers, among other things. The goal is to gradually and consistently build the strength and visibility of the Text brand. Realistically, the effects of this campaign will be visible in our KPIs by the end of the calendar year. This aligns with what we have been saying at our previous meetings. This is not a sprint run. It's the start of marathon. Also in subsequent quarterly reports, we have emphasized that text.com will not be a significant acquisition channel in the coming months.

Looking ahead to the next 3 quarters, the biggest impact will come from ending the LiveChat price grandfathering. Currently, a slightly stronger dollar is also working in our favor. We have also stabilized our infrastructure costs, which should actually be slightly lower in Q4 of the past financial year, the one that has just ended. Of course, we have to keep in mind that this is a dollar-denominated cost for us. Marketing and customer acquisition costs will grow, but budgets for individual channels will be closely tied to observed results.

Thank you very much for your attention this time. And now we invite you to ask your questions.

[Operator Instructions] We have received a text question from [ Maximilian Rafaga from Family Office. ] Based on press coverage, it looks like competitors like Sierra and GenAI are growing substantially. Can you talk about their target customers and whether they are taking away potential customers of yours or if you're going after different customers?

Marcin Droba here. So thank you for your questions. Thank you for being with us. So of course, I don't want to really comment on Sierra or Intercom or any of our competitors. Definitely, we had a very good quarter in terms of as stated in the presentation in the term of defense. So actually, we prolonged our very important deals. We kept important customers who actually had deals close to an end. So looking at that, that was very good, very solid quarter.

Of course, we are not growing. We are not as successful at this moment at the acquisition that was not a great quarter in that term. But we will be -- I think looking at the future, looking at our plans when it comes to this PR to this communication offensive, which will start in the May. At some point, we will be more aggressive when it comes to addressing that customers, which are now using some competitors' solutions.

We have some arguments, which should help us like one of the arguments can be great results of our AI agents we just presented. So at some point, we'll be more aggressive when it comes to that kind of approach. But looking at the last quarter, we didn't really -- I'm very convinced that we didn't lost any notable customers to our peers.

Okay. Another text question from Maximilian. What are your main growth channels going to be for Text App given that your previous CEO strategy will likely not work anymore given the decline of search traffic overall?

[ And sorry Lucja, ] we usually switch when it comes to the answer, but I will try at least partially to answer that question, quoting our CEO, who actually stated on that answering very similar question that Internet hasn't really changed. in how growth works over the last 20 years. Only the platforms have shifted when the underlying mechanics stays the same. So we have to basically repeat all the work we did over the last 20 years. We know how to do that. Actually, that was also not a bad quarter when it comes to our visibility on AI models.

So we definitely work on that. We will be much more active when it comes to, for example, to peer also when it comes to cooperation with some influencers in the coming months. So but basically, it's very similar work. but just in different space. Also, I wouldn't agree with the statement that CEO is not working at all. It's still working. It still helps us, but not at the scale we used to see. That's obviously very important change. And we witness many changes in the coming years probably.

Yes. We will definitely be more active with our brand. And as I mentioned, we have a new PR person on board. So more of such activity will be visible. Also, we will be -- similarly as in this presentation, we will be more sharing the examples of brands and how they work with our products because this is something excellent that is being done and some of the customers have excellent stories. It's just our role to pick them up and showcase. So this type of activity will be definitely something that will be seen in the next couple of months.

So some things changing. For example, the PR, public relation wasn't so important for us, historically speaking. But media coverage media publication are probably now more important as they are source of the knowledge, a source of reputation for the AI models. Some things changes, but basically, the work is very similar.

Okay. Another question from Maximilian. Can you share traction of Text App in terms of retention, usage, et cetera? Is it performing better than your legacy solutions? This seems the most crucial point, but you share very little information in your communications.

We have not given, as you correctly spotted, detailed information about Text App, especially like the -- what you have mentioned, retention or usage. This is because we have not run a large-scale conversion from the legacy products. We are getting customers each month in the Text App. However, these are not very large numbers. So we still do not have such history of data for those users.

So yes, of course, as Lucja said, it's still -- we are aware that what we are seeing now, what is now happening in the Text is 1:1 translatable, I don't know if that's a correct wording to that same solution to the Text in the future because there will be also some changes in the Text. We just added like crucial things in the area of AI agents. And we migrate to Text very specific group of the customers of legacy products. So this is -- all these KPIs are very important for us. But I think in the IR communication, it wouldn't be so valuable to honest to really share too much information because all these KPIs will be subject to the huge changes in the coming quarters.

[Operator Instructions]

As you may know, we had a Polish webinar before that webinar. We obviously had some more questions. But if I look at the whole picture. Really, we -- I don't think we share really important substantial information, which I think all the important things we declare, we said, we shared today are already told. We were asked about dividend policy is confirmed. We were asked about margins of the paper usage payment.

And I think it's important to stress that if you look at the API revenues that revenues actually -- we had cost related to that revenues before. We just started to monetize that subject. In the future, it will be very important that the most important part of paper usage, paper results model will be AI agents. That's the huge area definitely. We definitely assume a very solid margins in that area, but we will learn in the future what market will accept, what competition landscape look like. So we will observe how it work. But when we think about how current pricing is working, we definitely assume that margins on that part of our business will be at least solid.

At this point in time, I'm seeing no further questions from the audience. So I'm just going to pass the line to the Investor Relations team of Text the line back to say their concluding remarks.

Well, we basically want to thank you for listening to our presentation. As you have seen, there is a lot of things that are happening. As we mentioned, small things are changing, but are part of a much bigger picture. There are some exciting things that will be in the future. But also we constantly do like day-to-day work to -- for the numbers to be as they are. Thank you very much for your attention.

Thank you very much.

Thank you. We are now closing all the lines. Goodbye.

Ladies and gentlemen, thank you for standing by, and I'd like to welcome you to the discussion of Text Q3 2025 and 2026 KPI conference call. The call today will be hosted by Marcin Droba and Lucja Kaseja from the Investor Relations department. [Operator Instructions]

So without further ado, I'd now like to pass the line to Lucja. Please go ahead, ma'am.

Good afternoon, everyone. Today is January 5, a day when most people are still enjoying their holiday break. Nevertheless, we are already in the second trading session on the Warsaw Stock Exchange this year. And on Saturday, we published data that we wanted to comment on promptly.

We also wanted to get into interactions simultaneously with all interested investor groups. On that note, we kindly ask especially individual investors to review the disclaimers, particularly those concerning forward-looking statements. Our environment is challenging and highly volatile. We are adapting to it, and we ask you to keep this in mind.

Dialogue with investors is very important to us. As a side note, last year, our IR team spent 6 full days and 7 hours, that is 151 hours in total, talking to you via LiveChat alone. Interestingly, the year before that, it was just 84 hours. It is also worth highlighting that our CSAT score of 93.7% is an excellent result that we wish every customer support team could achieve.

Let me move on to the data on Q3 of our financial year. MRR as of December 31 last year amounted to USD 6.98 million. This represents a 1.7% decline year-over-year and 1.1% decline quarter-over-quarter. The result is in line with and even slightly better than we expected in November when we indicated that -- in the half year report that such a decline was possible.

MRR is a point-in-time metric, not a peer group metric. In our business, the end of the year is a period when fewer new customers join and many existing ones make cutbacks. We defended the USD 7 million level until the end of the year. We fell below it on December 31, the last day of the year. But data for January 1 already showed upgrades that brought us back about USD 7 million in MRR.

Payment data showing exactly how much customers paid us look slightly better for the Q3 financial year quarter. We recorded USD 21.89 million payments in the period October, December. This is 1.6% less than in the previous 3 months, but a 2.1% increase compared to corresponding period a year ago.

In the third quarter of the financial year, another important trend for us continued, the growing share of larger customers with MRR of at least USD 500 in our overall business. Such customers now account for 51% of total MRR, an increase of 1 percentage point from the previous quarter and as much as 8 percentage points year-over-year. This is a positive trend that will benefit our business going forward.

This slide will not stay with us much longer. But for now, we continue to show the share of customers paying for more than one of our products in total MRR. The share increased by 10 percentage points over the year to 37.2% at the end of December.

To summarize the October-December quarter, we recorded a small MRR decline, which, of course, is not pleasing, but it is consistent with our expectations. It is the result of continuing long-standing trends, a decline in number of small customers, largely offset by solid revenue retention and the acquisition of larger customers.

At the same time, we achieved a solid level of payments received with 2.1 percentage year-on-year increase. Worth noting here are payments for the use of our API. We improved the accessibility of the solution in our product, resulting in a nearly 60% quarter-over-quarter increase for the first time.

ARPL revenue exceeded USD 100,000 in this area. This is the effect of better visibility of the functionality in our product. Moreover, January, which already includes booked API usage fees for December shows continuation of this excellent trend. Please note that the customers pay for API usage on a paper usage postpaid model. So these amounts are not included in monthly recurring revenues.

Last month, we obtained SOC 2 Type 1 certification, which confirms the highest level of security and quality we offer our customers. This is also something our sales team has been eagerly awaiting, and we are convinced it will help secure larger contracts in the future.

This was also a quarter of significant testing for Text App, which met our internal goals. We confirm that the solution not only works, but also we are ready to convert leads potential customers who start testing it. Of course, this was not yet the scaling stage, but that stage is getting closer. We can say we have internally confirmed readiness for it.

Q3 financial year quarter was also a quarter in which we improved our liquidity position. We received a total of nearly PLN 30 million in tax refunds and fully repaid the short-term bank loan.

Of course, our financial year is not yet finished, and we will summarize it comprehensively in June. But looking very quickly at the 2025 calendar year, it was obviously not satisfactory in terms of achieved KPIs. MRR declined 1.7% over the period, while payments received, the actual money we received from customers amounted to USD 88.42 million, essentially flat year-over-year. We are talking in dollars here because the decline in the value of U.S. currency significantly worsens the results reported in Polish zloty.

However, looking at what happened inside the company, there are achievements we can and should be proud of. During the year, we built from scratch a world-class new product that already supports our customers and attracts new ones. A very difficult and lengthy cloud infrastructure overhaul project is already improving the quality of our services and delivering uptime of practically 100%, visibly better than many top competitors.

Our quality and highest security standards have been confirmed by SOC2 Type 1 certification. And during the ongoing year, we expect Type 2 certification, which confirms that all our procedures are effectively implemented.

We view our business safe and stable as confirmed by the Management Board's decisions regarding dividend policy. In February, we will pay the first advance towards the expected dividend for the current financial year in the amount of PLN 1.15. This amount reflects the net profit level in the first half of the year and expenditure on projects that are not yet completed, and it was the highest possible level under the Polish Commercial Companies code.

To summarize, 2025 was a year of investment and product development for us. In 2026, we will continue to broaden our product offering, yet we will focus on more on reaching customers, acquisition, distribution and visibility of products. You will see, among other things, the results of the work we have done with our -- with a renowned PR agency on communication, conveying our mission and product value and branding. I think we will surprise you.

I want to emphasize that we look into the future with optimism, but we do not underestimate the challenges and do not want to encourage anyone else to do so. The most important challenges still include companies' concerns about implementing AI solutions and difficulties with their monetization, changes in content positioning and search on the Internet and the continuing difficult situation of smaller companies, especially in our key markets, the United States.

For us, the most important thing is that we know we create value for our customers. Above all, we genuinely help them earn more online, and we will communicate this very strongly in the coming period.

Thank you once again for your attention, and we invite you to questions.

[Operator Instructions] Okay. So we have a few questions from [ Francesco Bracchi ], a private investor.

First of all, I'd like to thank you for your transparent communications. I have 3 questions. In the 2025 and 2026 first half results, you reported at Page 8, the team increased by 24 people year-on-year. Can you please disclose which areas were affected? How many programmers versus sales?

You also reported new infrastructure improved the quality of your services and gaining new capabilities and offering development, particularly for enterprise class customers. But it did not translate into cost reductions. Do you have any cost reduction initiative? There are a few more questions, but perhaps we can -- if you like, Lucja or Marcin to take those or if you like, I can read the rest.

I think it will be better off reading one by one. So I'll take the first one. This ones regarding the team. So the team increased year-on-year indeed by 24 people and the majority was developers. There was maybe 1 or 2 people that were added to sales team, but also we added people to some other positions like designers. So that was roughly the composition of those people added to the team within the past year as of the end of September because you -- the question was referring to semiannual report.

Yes. So maybe I will take the second one about infrastructure costs. So there is some potential. There is definitely some potential for some optimizations, especially in the -- if you look at the infrastructure, we -- at this moment, we store more data that we have to. But also we will monetize some of this data of our customers we stored. So that's not the priority for us. So optimization probably will be delivered later this year.

As I said, it's definitely -- our priority is a return to growth in terms of the top line, the top line and MRR. MRR is a North Star for us definitely. So yes, some possible optimizations, not like game changer for us, definitely not a priority at this moment.

Going a little bit further when we think about margins, we'd like to see higher margins definitely. But that should be effect of the return to growth of the top line of the MRR, and we would love to see a scale economy again in our business. So that's the plan, that's the priority here.

The third question from Francesco. In the investor presentation regarding the WOOD's Winter Conference in Prague, you reported in the challenges very strong competition, but this is something we have become accustomed to over the 20 years in the market. Do you think you have a competitive advantage? Which one? What are you doing to manage the competition?

So I think that's a very interesting question because it's actually touch what will be our most important challenge and task and focus for the current year. So we are very focused on building new product, on testing, on -- deliver value for these customers. And we definitely can see fields where we are very, very strong and we have competitive advantage. But I think at this moment, we're really not doing the best possible work to show this advantage.

So what we're going to do is will be show how which effects how -- which can be achieved by our customers using our products. And definitely that field we are -- we can -- we are thinking that it is the biggest strength of ours is actually monetization. We have very strong tools which can boost monetization for our customers. And we definitely try to communicate to show better that value and that effect we can deliver for our customers.

There is a lot of work to do in terms of our visibility, but we have also some -- as was mentioned by Lucja, we have also scheduled plan of some PR work, some building our brand, communications, our our product and new brands. So there's a lot of things will happen on that field of communications in the 2026.

Our next question is from Pawel from Pole Position Investing.

Thank you for organizing this webinar. Could you please share your perspective on how Text App customers perceive the solution? Additionally, are there any planned time lines for customer migration to Text App in 2026?

I think we can also combine this with the next question, which is also about Text App. We have -- as we have already mentioned, we have initially migrated the first batch of the customers and more than 700 to Text App. It was a testing group for the product. Meanwhile, we have received the feedback. We looked on what things are missing, what are the customers saying and we have applied changes. We were waiting until -- for the last ones -- for the last updates that we need to implement in Text App so that the biggest customers of ours would be satisfied with using Text App.

As also mentioned, we started selling the Text App online on text.com. So we also have first customers which have found us and started the trials and also converted into paid accounts. And the customer migration currently is not forced. So the customers are -- can do that voluntarily. We have not planned any mandatory migration as of now, but that will be the plan also for the future.

But we have to see -- we will observe what reactions are coming. And the most important part for us is to do it smoothly. So we will work on the communication. The customers will be the first ones to know. And it is also about making the process smooth for our customers. That's the ultimate goal.

[Operator Instructions]

So during previous presentation, we -- there was some questions about pricing and about churn. So maybe that would be good to give you that picture also here. So at the beginning of October, we actually increased prices for the LiveChat product for new customers only for now, but we actually -- the results was very positive from our view. We observed conversion rates. And after initial negative reactions, conversion rates return to the normal. So that's for us something very positive that confirmations that we still have some pricing power to use later this year. So that's important.

Looking at the churn, it was slightly higher during that period, but that was something which wasn't expected because that's the end of the year and actually during end of the year we will losing slightly more customers as usual. So that was something which was rather expected.

We have a follow-up from Roman [ Bulaninko ], private investor. How heavily do you use LLMs for productivity? For example, Claude Code, codex, GitHub Copilot, LLMs for UX and content creation. What impact do you see from it?

I don't think we can give you exact data, but maybe that could be of help. I quite recently talked with one of the heads of the developer team, and he said that in last few months, he has not written the code himself, but he does it through the services that you have mentioned and only reviews and updates. So he doesn't have to write from scratch.

But interestingly, he is encouraging his junior teams, junior team members to write the code themselves to learn things and actually to be able to see the results that LLMs, for example, are giving to be sure that this is exactly what they want to have in the product.

What is also, I think, no matter really the team in our company, everyone is using AI for various purposes. So both it applies to developers, to content creators, to designers. So that's how the productivity looks right now.

Yes. Actually, I don't know if we should share this data because -- actually I didn't check, but we had some internal study on how much actually developers are saving time using AI. It looked like a few hours weekly, definitely, like small 2 hours. So yes, so time is saved. Actually that practice Lucja mentioned, I think it's on personal -- that my personal opinion is absolutely great. So let's use AI, let's save time, but let's understand what AI really doing and what -- how it should be done.

So it's about learning curve. We are not -- we actually try to convince people to use AI, how -- as much as it's possible, but at the same time, let's be cautious, let's understand what AI is really doing.

We have a follow-up from Pawel from Pole Position Investing. Was the higher churn predominantly driven by smaller customers as observed in the previous quarters in 2024 and 2025? Or was there no clear pattern in the customer segments leaving Text?

I think that also was something discussed during previous call. So let's repeat that because that is important. If you look -- especially if you look at the LiveChat, the pattern is the very same. So churn is needed by very small customers or small customers. And the main reason of the churning is still in the category is I'm closing my business, I'm changing my business profile, I have financial problems and so on and so on.

It's not only about -- it's -- what is very important, very important is to understand that it's data which is basing on what our customers are saying. So it's not like 100% accurate pictures, but it definitely gives you some insight. And definitely, some of our customers have -- smaller customers have some problems because of the weak economies, but some online business also have some problems because AI search change a lot in the terms of the CEO of the problems we're still struggling with. So yes, that's how it looks.

Of course, looking at the Text App is still very -- to really have a good picture. But what is very interesting when we are looking now at the Text App is that it's getting customers from around the world. So every geography is there. United States is leading once again. But also the pattern of how Text App is used is very different. So some of the customers are using AI agents that really jump in and using them extensively. Still a lot of them are not using AI agents. Again, they're keeping AI agents switched off. And we have a lot of use cases. So that's something very interesting to learn, to see, to witness.

And looking at these customers, we have some -- these new customers, we have some like very legit, very interesting companies from U.S. and looking on how they're using Text App. I'm very convinced that they will be with us like in 2 years and 3 years 5 years and maybe later. And also, I can see some businesses.

I know that they will -- the one example may be a company actually a landing page, a beautiful landing page where Text App was used, but this landing page was about selling tickets to Christmas show. So definitely, if we're thinking about churn, churn is very natural part of SaaS business. We have also companies who are selling tickets for Christmas show.

We'll give it a few more moments for any further questions. Okay. It looks like we have no further questions. Marcin, Lucja, would you like to have any closing remarks?

Lucja, do you want to add something?

No. Do you have any concluding remarks?

So as of concluding remarks, I think it is valid what is still displayed here on the slide of the presentation. 2025 was a year of building for us. We changed the infrastructure. We built entirely new product from scratch, which is already providing value to customers, not only the ones that we've migrated, but also the ones that have chosen the solution themselves.

And for us, 2026 will be a year of putting the product to find well-working distribution process for the product. So it will be unlocking our go-to-market potential definitely. There's a lot of work that needs to be done, but we are ready for it. And we will be hearing you in 3 months' time. Thank you for listening. Thank you for your questions, and goodbye.

Yes. Thank you. Have a great year. Thank you very much.

Thank you very much. We'll now be closing all the lines. Have a good day.

Thank you.

Have a great day. Thank you.

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to the discussion on Text's Q2 2025-2026 KPI Conference Call. The call today will be hosted by Marcin Droba and Lucja Kaseja from the Investor Relations department. [Operator Instructions]

So without further ado, I would now like to pass the line to Lucja. Please go ahead, ma'am.

Good afternoon. Thank you for participating and for your interest in our company. Today, we will mainly focus on discussing the operational data presented in our current report, but we will also say a few words about our new product, Text App, which had its official premiere on September 30 and at the context event dedicated to our clients. We warmly invite you to watch the recording available on YouTube.

Until recently, we did not actively promote Text App on text.com, yet we already secured our first paying customer, a key internal milestone to validate the process. We know the product works. We use it ourselves, and it is -- and it already supports more than 700 organizations in their daily operations. The past quarter was challenging as summer is seasonally weaker for acquisition. In addition, we concentrated our efforts on Text App amid persistently difficult market conditions. Beyond macroeconomic headwinds, changes in content search and the way Google presents search results, they have impacted not only our acquisition channels, but also our customers.

We are adapting to these changes, acquiring, for example, clients coming from LLMs, but we are still in a period of continuous transitions in this area. At the same time, we note improvement in payment volumes and increasing the share of larger customers with MRR above USD 500 in our business. The group already accounts for more than half of our business, a trend that should have a positive impact on our future metrics.

As you can see on Slide 6, for the past 1.5 years, our key metric, MRR, has remained relatively stable. The trends we observed in this regard also remain unchanged. Significant declines in the number of smaller customers are being offset by increases in ARPL, average revenue per license, while declines in LiveChat MRR are offset by growth in newer products. The past quarter, July to September -- yes, to September was relatively weaker compared to several previous ones, although it was expected that the summer quarter would be more difficult.

During this period, we recorded a decline in MRR compared to previous quarter. This result should not come as a surprise since in the quarterly report, we stated that MRR was decreasing after the first 2 months of the quarter, although it still remains higher than a year ago. All products recorded an increase in ARPL, which did not fully compensate for the decline in the number of LiveChat customers. For this product, however, September was positive with customer churn falling below 4% for the first time since November 2024. At the same time, acquisition of smaller clients still has not improved.

A small technical note here. We have not changed the definition of MRR compared to previous quarters. However, we want to emphasize that MRR does not include per usage payments whose role in our business will grow. We will include them only if they are prepaid. Currently, such payments do not exist, but customers will gain this option in the future. In terms of payments received, we see improvement compared to the previous quarter, which raised concerns among some of you. We achieved USD 22.24 million in payments. Quarterly fluctuations continue to reflect varying levels of annual payments within the mix.

Once again, Slide 8 shows you the growing share of larger customers in our business. We reached an important milestone here. Customers with MRR of USD 500 or more already account for more than half of our MRR. Another positive trend is the growing share of customers paying for more than 1 Text product in total MRR. For many months, we have been seeing strong and steady growth in organizations using 2 or 3 or 4 of our products. Year-over-year, this increase is as much as 11 percentage points. This demonstrates our transition from a single product company to a multiproduct suite provider. Looking ahead, many of these organizations will migrate to Text App, which integrates LiveChat, ChatBot, HelpDesk with additional AI-driven automation. That is all we have to show today in terms of KPIs, but we would also like to briefly discuss Text App.

The vision for [ field class ] solution has been years in the making. After purchasing text.com in late 2022 and rebranding the company in 2023, since September this year, text.com has finally become a new customer acquisition channel for us, and we have a [ field class ] solution. To make this happen, however, we had to do enormous work, both in terms of development and in implementing very difficult structural changes. The migration process to a new cloud infrastructure took a year and preparations lasted even longer. In our reports, you now see higher costs related to this area. But for us, it is a key investment, ensuring stability, reliability, allowing us to offer better products while removing the technical limits that previously restricted us. Naturally, we are -- we ourselves became the first user of Text App. Since June, we also started inviting selected customers to use this solution. It is worth mentioning that Text App is evolving and will continue to develop.

At the end of August, we conducted a soft launch without marketing spending or communication campaigns, we simply placed our solution online for trials. The first organically acquired trials were meant to confirm whether the onboarding system works, whether we are communicating its value well and whether the first user understand it. And although we achieved our internal goal by acquiring our first organic paying customer by the end of September, we see a lot of room for improvement. The sales funnel requires optimization, conversion improvement and nurturing. This is not a negative thing. It is a normal part of the business, and we launched Text App softly precisely to gather such insights. We are already introducing changes based on the experience, and we'll start promoting Text App. Initially, very carefully and with controlled spending. Already, however, we see the number of trials growing.

On one hand, we are satisfied and optimistic. On the other hand, we want to state clearly, we need time before text.com becomes a major customer acquisition channel. This is not a task for 1 or 2 quarters. The most important thing for us is that we know Text App works and works well. Although, as I said, we will keep developing and refining it. We know this because we use it ourselves. And currently, over 700 of our customers also use it. The feedback is very positive.

We do not want to take up too much of your time. You will surely have questions. If someone has not watched context yet, we warmly invite you to spent 12 minutes watching the keynote. Here is an approximate preview of the new app, as you can see, very modern and importantly, for our clients, a neat one.

Let's recap. Text App brings together in one place and one experience, the functionalities of LiveChat, HelpDesk and ChatBot. But it is also a solution built with native AI in mind, the text intelligence and a major role of AI agents who can handle customer interactions, but also effectively act as members of our clients' teams. They help find information, can chat, assist in using our product features. Also, workflows are now part of the experience.

Another very important part of our offering is the MCP Server, which allows Text App to be connected with an external AI assistant. We also offer outbound campaigns, enabling clients to take initiatives and actively communicate with their customers. One of the clients testing Text App from the very beginning has actually multiplied their chat volume and chats from many of our clients directly translate into revenue. The whole idea behind Text App is to be a tool that drives business growth for our customers.

Another key area is quality, which is ensured, thanks to the new infrastructure. The new solution also comes with new pricing, important in light of changes in our philosophy. Our market is evolving quickly, including in pricing standards. LiveChat has a rather simple pricing model, pay per agent or, so to say, pay per user, its advantage is simplicity. In Text App, we are introducing elements of pay-per-value or pay per usage models. This approach is actually becoming increasingly common.

On one hand, the client pays for actual use and results. On the other, the provider earns more, but only if they deliver real value. The system also protects against situations where significant costs generated by a client are not covered by the price of the product. The price is available on text.com, but please remember, it will evolve and change.

On Slide 15, we show some fundamental differences between LiveChat pricing and Text App pricing. In LiveChat, the use of AI features is included in the per agent price, and there are no payments directly tied to such elements as usage or data storage, which actually generate costs on our side. These elements, of course, appear in Text App pricing. In the near future, customers will receive communication from us regarding migration to text app. This will be done in groups. Plans and prices clients currently pay will remain the same as before.

However, in the future, this will change. And of course, clients will be informed well in advance. We will, however, remain flexible in this regard. This may also be a good moment to mention that at the beginning of the week, we changed LiveChat prices. In starter plan, the per agent price increased from USD 24 to USD 25 and the annual payment dropped from USD 20 to USD 19. In the team plan, the increase was $10 from $49 to $59. And in the case of annual payment, it meant an increase from $41 to $49 per agent. And in the business plan, it was an increase from $69 to $89. And in case of annual payment, $59 to $79. These changes actually apply to new and returning customers.

And that's all from us. Thank you for listening, and let's move on to Q&A session.

[Operator Instructions] Okay. We have our first text question from [ Futipor ]. Based on the company's prediction for 2026, 2027, what is the expected approximate number of active paying users of the Text App?

Thank you for the question. So unfortunately, we are not sharing any forecast at this moment, any financial guidance. So we are also not sharing our forecast of -- in that area also. So sorry, very good questions, of course, but it will depend not only on how we will be able to build channels of acquisition for text.com, but also on how fast we decide to move our current customers to the new application, which is definitely something we start to do already. So sorry, unfortunately, we are unable to share such expectations in that area.

We have another text question from [ Francesco Bracchi ]. Is the cloud migration completed when the former architecture will be dismissed? At that point, the infrastructure cost will be reduced?

Thank you for the question. Let me answer it. Yes, the cloud migration has been completed during the quarter. We're still -- this quarter, we still see some -- we will still see some of the costs from the previous cloud provider. However, what is important, the new infrastructure that we have now, it also has an addition of some of the features, functionalities that we haven't had in place previously. So actually, although the cost of the previous provider will drop, the infrastructure costs will be at the similar level to the ones as in the past quarter.

[Operator Instructions] Okay. We are seeing no further questions at this point. Apologies. We have one another question from [ Dennis Berger ]. What's the feedback from customers on the new Text App?

Dennis, thank you for the question. Yes, of course, the gathering feedback was the most important part of the last month and last few months. And generally, as a role, the feedback is very, very positive. Definitely, when we're showing the vision of what we want to achieve, what we'll be able to do to offer, the answer is very, very positive. And I'm happy to say that in 100%.

And of course, the trick is in the details. Obviously, we migrated to a part of our customers also in trying to make some tests. And of course, there were some hiccups, there were some mistakes. There were some things we had to improve. So obviously, that a lot of work.

But if we think about vision, how this new application actually is sorting things, organize things, how it feels, is like, is great. Some of the customers were from this initial testers of the tech had some problems with migrating all the custom things that they did some additional works that actually make in order to organize the work, to make the work more smooth. So that definitely was some challenge.

One of the most important feedback from our point of view was the fact that some of other testing customers were able to successfully improve chatting experience and raise number of the chat, which is particularly important because the number of the chat is that very important KPIs, obviously, for us. And for some of the customers, these chats translate directly to money. So that was, I would say, very important positive feedback from these tests.

Okay. We have another question from Dennis. How is the sales pipeline for larger customers looking like with the U.S. sales team in particular? Any new large customer in the U.S.?

We have the team in the States, but actually also the team from Poland, they travel quite a lot to different conferences. And they are quite satisfied with the outcome. So they are getting the leads, but also that translates into new clients. Of course, the definition of large customers depends on what you exactly mean, but we have been able to convert this quarter, one of the leaders in one of the industry. Though as we have discussed in the -- actually the Polish part of the presentation, we were not prepared to share the names of those customers.

What is important, we have this very -- we are looking at the effectiveness of the team and of the cost of having such team on the -- and the deals that they are bringing. So this is something that is important to us that they are effective. And what we've seen is that it is actually in the U.S., quite important to be able to have this face-to-face contact with the customers and having the person in the U.S. actually makes it much easier to meet such clients. So we are basically quite happy with what the U.S. sales team is doing.

Maybe one -- just one small note from me in that area. We are finalizing works on SOC2 certification, which is extremely important in that area. When we look at what was important from our point of view, what we had to improve, what we had to prepare from our side. We are finishing the work on our side, which means we on the final part of that process.

We are now looking for the final auditor for these certifications. Exact timing will depend on from this auditor, from also even from the tools this auditor will going to use. But that is very important. And although this implementation of SOC2 is also related to some costs, we actually we had in pipeline deals, we're actually waiting for this certification and actually the value of these deals already is -- will cover that related costs.

Okay. We have another text question from [ Philippe Wayland ]. The payments for HelpDesk seems to decrease in second quarter. What is the reason?

They are slightly lower in Q2, but more or less on a similar level to the one from the previous quarter. Actually, it is -- for our case, it's the usual thing that the summer months are slightly worse in terms of the new client acquisition. So there is nothing in particular changing here.

So MRR of HelpDesk is definitely growing on the rise. And if you're seeing that MRR is growing and the payments are decreasing, that means that always the [ fault ] that reason is actually in the annual payments. It means that probably previous quarter was very strong that the share of the annual payments was higher than average. That's all actually. And that's happening if you look at the whole group level, not only at the HelpDesk.

Okay. We have one another text question from [ Vodimir Galavich ]. What is forecasted impact of new prices on 2026 MRR?

I can't see -- actually, I don't see that question. So it's about new LiveChat prices, yes? Or the Text App pricing?

It's just what is forecasted impact of new prices on 2026 MRR...

So I will assume that the question about -- on LiveChat prices and feel free to correct me and ask additional questions. It will be definitely positive. That's what we're doing. That's the plan. But it also -- it will be somehow limited. Why? Because it's -- this change will actually affect only new and returning customers. So this change is not addressed to the whole customer base, to the whole LiveChat customer base. Probably it won't be wise to now change prices for that group as we plan to migrate them to Text App and change the pricing once again, we don't want to really bother the customers more than we have to.

So it's not -- there will be no jump as you saw in our history when we were changing prices for the whole customer group, it will be limited. It will be so month by month in our results, in our KPIs. But at the same time, please remember that turnout when you look at our customer base is high. So actually, that part of our business, we always was actually even at the best times when we actually were acquiring a lot of new customers on net level every month. So actually, we always work on high numbers. We are losing a lot of customers each month, and we are getting still, we're getting still a lot of customers each month. So from that point of view, it's something positive now.

[Operator Instructions] Okay. Looks that we have no further questions. So I will pass the line back to the Text team for their concluding remarks.

Thank you very much for the participation in today's presentation and for the questions. If you did not have the chance to look into context keynote speech, we will play it right now at the end of the conference call. So once again, thank you for your time and enjoy. Thank you.

Thank you. Thank you very much. Bye.