⚠ The Search Results Are Being ReplacedHigh threat

Text (TXT) — threat to the moat

The channel that fed a 38,6% operating margin for twenty years is being rebuilt by companies that never asked Text's permission.

The cheapest customer-acquisition machine in this collection depends on a distribution system that is currently being replaced, and Text says so itself.

The acquisition channel, before and afterSearch resultFree trialSelf-serve signup38,6% marginText discloses that search engines are being replaced by LLMs and AI assistants
The channel that fed the machine for twenty years is being rebuilt by other people.

Its risk factors state that the development of artificial intelligence and its use in searching for content on the internet may affect the company's ability to attract customers, that traditional search engines are being replaced by language models and assistants, that leading players are changing their algorithms, and that these changes may negatively affect the search-optimisation activities of Text and its affiliate partners1.

Read that against the economics. Text runs a 38,6% operating margin2 on 271 contractors3 with almost no sales organisation, because prospects arrive already looking for it. If a buyer's question about live-chat software is answered inside an assistant rather than by a list of links, the page that Text spent two decades ranking never gets opened, and the affiliates who send it traffic have nothing to send.

The company's mitigations are real but partial. It has spread into marketplaces — Microsoft in February 2026, Google Cloud in July, ChatGPT in August4 — which is the sensible response: if buyers ask assistants, be inside the assistant. And it is spending on brand, launching a new visual identity and a Go-To-Market campaign in May 20265.

Both mitigations cost money that the old channel did not. That is the margin.

Customer acquisition cost would reveal which way this is going, and Text does not report it. The observable proxy is selling expense against new recurring revenue: selling costs were 68,5 million złoty last year6 while recurring revenue fell.

References
  1. ReportedIts risk factors state that the development of artificial intelligence and its use in searching for content on the internet may affect the company's ability to attract customers, that traditional search engines are being replaced by language models and assistants, that leading players are changing their algorithms, and that these changes may negatively affect the search-optimisation activities of Text and its affiliate partners.
    Text Group Management Board report for 2025/26, risks and key factors (currency risk arising because revenue is generated in US dollars while a significant portion of costs is incurred in Polish złoty, affecting reported results and the dividend, with the company not hedging its open foreign exchange positions; competition risk from more innovative or cost-effective solutions and from rivals allocating far greater funds to development and promotion, and from AI changing how software is developed and marketed in a way that could erode the advantage derived from the company's technology and experience; distribution risk from the loss or reduced effectiveness of channels such as Google, Shopify or BigCommerce, and from traditional search engines being replaced by LLM models or AI assistants in a way that may harm the SEO activities of the company and its affiliate partners; product concentration risk, since Text generates almost all revenue from LiveChat products; and risk from entities using patents to enforce compensation) — FY2025/26 · publ. June 2026 · source ↗
  2. ReportedText runs a 38,6% operating margin on 271 contractors with almost no sales organisation, because prospects arrive already looking for it.
    Text Group Management Board report for 2025/26, team, intellectual property and shareholders (a team of 271 people at 31 March 2026, up 6,7%, consisting of independent persons and sole proprietors called Partners on civil-law contracts, with the company having no employees under employment contracts, a rotation rate of 22% and turnover of 15%, mostly working from Wroclaw on a hybrid basis with 95% Polish citizens; the disclosed risk that because no team member works under an employment contract copyright does not vest automatically, transfers require individual agreements, Polish law forbids contracting for all future works of a given type, and an absent contract leaves the company dependent on the creator's will and open to dispute; a seventh United States patent granted in June 2026 for configuring a communication widget directly on a website; and 25 750 000 shares of 0,02 złoty each, one vote per share and none privileged, with a shareholders' consortium holding 10 625 752 shares or 41,27% of votes and two Polish pension funds above 5%) — FY2025/26 · publ. June 2026 · source ↗
  3. ReportedText runs a 38,6% operating margin on 271 contractors with almost no sales organisation, because prospects arrive already looking for it.
    Text Group Management Board report for 2025/26, team, intellectual property and shareholders (a team of 271 people at 31 March 2026, up 6,7%, consisting of independent persons and sole proprietors called Partners on civil-law contracts, with the company having no employees under employment contracts, a rotation rate of 22% and turnover of 15%, mostly working from Wroclaw on a hybrid basis with 95% Polish citizens; the disclosed risk that because no team member works under an employment contract copyright does not vest automatically, transfers require individual agreements, Polish law forbids contracting for all future works of a given type, and an absent contract leaves the company dependent on the creator's will and open to dispute; a seventh United States patent granted in June 2026 for configuring a communication widget directly on a website; and 25 750 000 shares of 0,02 złoty each, one vote per share and none privileged, with a shareholders' consortium holding 10 625 752 shares or 41,27% of votes and two Polish pension funds above 5%) — FY2025/26 · publ. June 2026 · source ↗
  4. ReportedIt has spread into marketplaces - Microsoft in February 2026, Google Cloud in July, ChatGPT in August - which is the sensible response: if buyers ask assistants, be inside the assistant.
    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 ↗
  5. ReportedAnd it is spending on brand, launching a new visual identity and a Go-To-Market campaign in May 2026.
    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. ReportedThe observable proxy is selling expense against new recurring revenue: selling costs were 68,5 million złoty last year while recurring revenue fell.
    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