⚠ A Funnel Built for Small AccountsHigh threat

Text (TXT) — threat to the moat

A customer who bought without deliberating leaves without deliberating.

The acquisition machine that produced Text's margins also selected its churn.

What the funnel selects forDecision made byone person, in minutesEntry price$19 per seatMonthly customer churn4%MRR from accounts above $500/mojust over 50%A customer who bought without deliberating leaves without deliberating
Cheap to win is the advantage; cheap to lose is the bill.

Fourteen-day trials at 19 dollars a seat1 gather customers who make the decision alone, in minutes, without a budget holder. Those customers are cheap to win, which is the advantage, and they are cheap to lose, which is the bill: LiveChat's customer churn ran at 4% a month through the reported year2.

Reaching further up costs everything the model was designed to avoid. Enterprise buyers want security attestations, so Text obtained SOC 2 Type 1 in December 2025 and Type 2 in May 2026 through an independent audit firm3. They want procurement-friendly purchasing, so Text listed in the Microsoft, Google Cloud and ChatGPT marketplaces4. They want named contacts — and Text has just closed its traditional sales department5.

There is evidence the stretch is working. Accounts paying more than 500 dollars a month passed half of recurring revenue, accounts on more than one product reached 38,8% of it6, and the year's largest new contract was an increase to seven figures with an American online retailer7.

There is also evidence it is not yet working fast enough, which is that the total went down. Monthly recurring revenue closed the year at 6,93 million dollars, 2,7% lower8.

Grade this on the 500-dollar cohort's share. If it keeps climbing while the total keeps falling, Text is successfully becoming a smaller, better business — which is a defensible outcome, but not the one a 100 million dollar recurring revenue target implies9.

References
  1. ReportedFourteen-day trials at 19 dollars a seat gather customers who make the decision alone, in minutes, without a budget holder.
    Text Group Management Board report for 2025/26, margins, costs and cash (gross profit margin on sales of 67,6%, operating margin 38,6% and net margin 35,4%; cloud infrastructure costs rising, the migration completing in July 2025 after more than a year of duplicated cost, and completion not translating into cost reductions because of price increases regardless of provider and a deliberately expanded scope of purchased services; increased consulting, legal and public relations costs; fourth-quarter costs falling on cloud optimisation; a warning that more intensive use of artificial intelligence may cause further cost increases and that rising AI costs should press hardest on competitors offering free or freemium products; operating cash flow of PLN 161,6m and PLN 62,8m of cash; and a dividend policy of allocating the highest possible part of profit to shareholders) — FY2025/26 · publ. June 2026 · source ↗
  2. ReportedThose customers are cheap to win, which is the advantage, and they are cheap to lose, which is the bill: LiveChat's customer churn ran at 4% a month through the reported year.
    Text Group Management Board report for 2025/26, key performance indicators (monthly recurring revenue of USD 6,93m at 31 March 2026, down 2,7% year on year and 0,7% on December, giving annual recurring revenue of USD 83,12m; revenue in US dollars of 88,2m against 88,6m, down 0,5%; payments received of USD 87,9m, down 0,7%; Q4 dollar revenue of 22,56m, the highest since Q2 2024/25; a LiveChat customer churn rate of 4% on a monthly basis with net MRR churn described as significantly lower; LiveChat at 83,7% of group revenue with ChatBot 8,7% and HelpDesk with KnowledgeBase 7,5%; and an average USD/PLN translation rate 8,0% lower than the prior period) — FY2025/26 · publ. June 2026 · source ↗
  3. ReportedEnterprise buyers want security attestations, so Text obtained SOC 2 Type 1 in December 2025 and Type 2 in May 2026 through an independent audit firm.
    Text Group Management Board report for 2025/26, corporate events (the Text App suite reaching first existing customers in June 2025 and opening on text.com in August, with the first new customers acquired organically in the following quarter; full migration of infrastructure to Google cloud servers in July 2025; SOC 2 Type 1 attestation in December 2025 and Type 2 in May 2026 audited by Sensiba, described as significant support in acquiring enterprise-class customers especially in the United States; Meta Business Partner status in January 2026; products introduced to the Microsoft marketplace in February 2026; a partnership with Golden Whale for the iGaming industry in April 2026; the closure of the traditional sales department with responsibilities assumed by the customer support team; the new visual identity and Go-To-Market campaign in May 2026; and the end of price grandfathering, with LiveChat Team and Business prices raised in September 2025, customers on older price lists notified in March 2026, monthly payers transferred from April 2026 and annual payers transferring as their subscription periods expire) — FY2025/26 · publ. June 2026 · source ↗
  4. ReportedThey want procurement-friendly purchasing, so Text listed in the Microsoft, Google Cloud and ChatGPT marketplaces.
    Text Group results for the first quarter of the 2026/27 financial year, published 28 August 2026 (revenue of PLN 83,20m, down 1,9% year on year and up 4,1% on the previous quarter; net profit PLN 29,11m down 6,2%; operating profit PLN 31,36m down 11,0%; EBITDA PLN 38,56m down 7,4%; revenue in US dollars of 22,61m up 2,1%; MRR of USD 7,46m at 30 June 2026, up 4,0% year on year and 7,6% on the previous quarter, giving ARR of USD 89,52m against the USD 100m goal, with the chief executive attributing the growth largely to the completion of price grandfathering for LiveChat customers; a record PLN 77,2m of deferred revenue and net operating cash flow up 22,2% to PLN 41,5m on a high share of annual payments; margins of 69,6% gross, 37,7% operating, 46,4% EBITDA and 35,0% net; SOC 2 Type 2 attestation in May 2026; the new visual identity and Go-To-Market start in May 2026; purchase of the livechat.ai domain and a seventh US patent in June 2026; a Klaviyo integration and Google Cloud Marketplace listing in July; a MarTech Breakthrough award and an official ChatGPT marketplace listing in August; and the annual general meeting of 6 August 2026 allocating PLN 109,7m to dividends, PLN 4,26 per share) — Q1 2026/27 · publ. 28 August 2026 · source ↗
  5. ReportedThey want named contacts - and Text has just closed its traditional sales department.
    Text Group Management Board report for 2025/26, corporate events (the Text App suite reaching first existing customers in June 2025 and opening on text.com in August, with the first new customers acquired organically in the following quarter; full migration of infrastructure to Google cloud servers in July 2025; SOC 2 Type 1 attestation in December 2025 and Type 2 in May 2026 audited by Sensiba, described as significant support in acquiring enterprise-class customers especially in the United States; Meta Business Partner status in January 2026; products introduced to the Microsoft marketplace in February 2026; a partnership with Golden Whale for the iGaming industry in April 2026; the closure of the traditional sales department with responsibilities assumed by the customer support team; the new visual identity and Go-To-Market campaign in May 2026; and the end of price grandfathering, with LiveChat Team and Business prices raised in September 2025, customers on older price lists notified in March 2026, monthly payers transferred from April 2026 and annual payers transferring as their subscription periods expire) — FY2025/26 · publ. June 2026 · source ↗
  6. ReportedAccounts paying more than 500 dollars a month passed half of recurring revenue, accounts on more than one product reached 38,8% of it, and the year's largest new contract was an increase to seven figures with an American online retailer.
    Text Group Management Board report for 2025/26, clients and customer acquisition (customers in around 150 countries across effectively all sectors, with the USA, Great Britain, Australia, Canada and Indonesia the most important markets and Poland about 1,5% of revenue in twelfth place; customers using more than one product at 38,8% of MRR, up seven percentage points, and accounts above USD 500 a month passing 50% of MRR; and the year's largest new contracts including an increase to seven figures with an American online retail company, a postal service in the British Isles, an Asian industrial automation company, a Kyoto corporation, a Texas dental group, a Scandinavian food company and universities in the United States, New Zealand and Singapore) — FY2025/26 · publ. June 2026 · source ↗
  7. ReportedAccounts paying more than 500 dollars a month passed half of recurring revenue, accounts on more than one product reached 38,8% of it, and the year's largest new contract was an increase to seven figures with an American online retailer.
    Text Group Management Board report for 2025/26, clients and customer acquisition (customers in around 150 countries across effectively all sectors, with the USA, Great Britain, Australia, Canada and Indonesia the most important markets and Poland about 1,5% of revenue in twelfth place; customers using more than one product at 38,8% of MRR, up seven percentage points, and accounts above USD 500 a month passing 50% of MRR; and the year's largest new contracts including an increase to seven figures with an American online retail company, a postal service in the British Isles, an Asian industrial automation company, a Kyoto corporation, a Texas dental group, a Scandinavian food company and universities in the United States, New Zealand and Singapore) — FY2025/26 · publ. June 2026 · source ↗
  8. ReportedMonthly recurring revenue closed the year at 6,93 million dollars, 2,7% lower.
    Text Group Management Board report for 2025/26, key performance indicators (monthly recurring revenue of USD 6,93m at 31 March 2026, down 2,7% year on year and 0,7% on December, giving annual recurring revenue of USD 83,12m; revenue in US dollars of 88,2m against 88,6m, down 0,5%; payments received of USD 87,9m, down 0,7%; Q4 dollar revenue of 22,56m, the highest since Q2 2024/25; a LiveChat customer churn rate of 4% on a monthly basis with net MRR churn described as significantly lower; LiveChat at 83,7% of group revenue with ChatBot 8,7% and HelpDesk with KnowledgeBase 7,5%; and an average USD/PLN translation rate 8,0% lower than the prior period) — FY2025/26 · publ. June 2026 · source ↗
  9. ReportedIf it keeps climbing while the total keeps falling, Text is successfully becoming a smaller, better business - which is a defensible outcome, but not the one a 100 million dollar recurring revenue target implies.
    Text Group Management Board report for 2025/26, key performance indicators (monthly recurring revenue of USD 6,93m at 31 March 2026, down 2,7% year on year and 0,7% on December, giving annual recurring revenue of USD 83,12m; revenue in US dollars of 88,2m against 88,6m, down 0,5%; payments received of USD 87,9m, down 0,7%; Q4 dollar revenue of 22,56m, the highest since Q2 2024/25; a LiveChat customer churn rate of 4% on a monthly basis with net MRR churn described as significantly lower; LiveChat at 83,7% of group revenue with ChatBot 8,7% and HelpDesk with KnowledgeBase 7,5%; and an average USD/PLN translation rate 8,0% lower than the prior period) — FY2025/26 · publ. June 2026 · source ↗
Sources
Generated September 24, 2026