Text (TXT) Q2 24/25 TU earnings summary

Financial performance highlights

• Payments received reached a record $22.84 million, up nearly 15% year over year and 1% quarter over quarter.

• Monthly recurring revenue (MRR) grew 8.8% year over year to $7.04 million, but declined 0.4% quarter over quarter due to customer losses.

• Average revenue per license (ARPL) increased 1.9% quarter over quarter and 11% year over year, now nearly $170.

• Enterprise client MRR doubled, and HelpDesk ARPL rose 11% during the quarter.

• API after-service revenue grew 16%, though it remains a small part of the business.

Customer and product trends

• Over 1,000 customers churned, mainly small and non-core market clients, due to onboarding changes and anti-abuse measures.

• Churn was highest in July, especially in Asia, but US churn fell below 3% in August and September.

• Product changes and pricing adjustments led to lower conversion rates, but reverting these changes is improving trial and lead numbers.

• ChatBot saw a boost in new customers after a new language model launch, and a promotional offer impacted initial ARPU.

• HelpDesk added 29 net clients, with slower growth attributed to holiday months.

Strategic initiatives and outlook

• Focus remains on building a product suite, with new features and infrastructure upgrades underway.

• SOC 2 certification process started to support enterprise customer acquisition.

• New products are in development, but expected to have a gradual impact.

• Global Billing to be released to facilitate cross-product sales.

• Dividend policy remains unchanged despite investments in infrastructure.