Text (TXT) Q3 22/23 TU earnings summary

Executive summary

• Preliminary estimated Q3 FY2022/23 revenue was $18.91M, up 35.8% YoY and 22.2% QoQ; December MRR was $6.35M, up 43.0% YoY and 29.3% QoQ.

• Pricing changes lifted ARPU; LiveChat added 44 net customers in December after three months of declines, while churn remained elevated.

• Strategy focused on a multi-product suite under the text.com umbrella; OpenWidget launched as a free customer-acquisition tool.

Financial highlights

• Preliminary Q3 revenue was $18.91M, up 35.8% YoY; the preceding three-month period generated $15.47M.

• H1 net sales rose 35.1% YoY to PLN 141.3M; EBIT and net profit each increased 27.4% to PLN 81.3M and PLN 75.6M, respectively.

• Q2 net sales were PLN 74.5M, up 33.9% YoY; EBIT was PLN 42.6M, up 19.0%, and net profit was PLN 39.6M, up 21.0%.

• ChatBot passed $1M in quarterly revenue for the first time, with $300K MRR and 2,625 active paying customers at year-end.

Outlook and guidance

• No customer-growth guidance was offered; near-term visibility was unclear, with customer acquisition and churn expected to remain challenging.

• Pricing changes are expected to have an immediate positive impact on margins, alongside continued investment, including in AI research.

• Inflation is expected to pressure costs through 2023, particularly employee costs; hiring is expected to remain limited.

• Growth is expected to be better positioned when economic conditions improve; December’s customer rebound offered encouragement, though churn could remain high during annual renewals.