The Money Arrives FirstNarrow moat

Text (TXT) — moat facet

Customers fund the company: they pay a year ahead, so there is no debt, no dilution and no need to retain a złoty.

Text is financed by the people it serves.

Cash against accounting profit, FY2026 (zl m)161,6m złOperating cash flow116,6m złNet profit109,7m złDividends paid out32,4m złCapital spendingCustomers prepay, so cash exceeded reported profit by nearly 40%
The company is financed by the people it serves - which is also why it has no debt.

A large share of customers buy annual licences and pay at the start of the period, so cash lands before the service is delivered. At 30 June 2026 that produced a record 77,2 million złoty of deferred revenue1, and across the year to March it produced operating cash flow of 161,6 million złoty against net profit of 116,6 million — cash exceeding accounting profit by nearly 40%2.

The balance sheet that results is unusual for a company of any size. Total assets are 195,9 million złoty against total liabilities of 86,0 million, of which 67,0 million is not money owed to anyone but revenue collected and not yet earned3. There are no credits or loans at all4. Text has never issued a share beyond the 25 750 000 it carries today, all with one vote and none privileged5.

Two consequences follow. The first is that conventional return-on-capital arithmetic breaks: with customers funding the working capital, invested capital is close to nothing and the ratio runs into the hundreds of percent, which measures the absence of a denominator rather than the quality of the business. The second is that Text has no need to retain earnings, and does not — 109,7 million złoty went out as dividends against 116,6 million of profit, a payout of 94%6.

The float is also a constraint disguised as an asset. Deferred revenue is service owed, not money earned, and the annual billing that creates it is what delayed the effect of the price increase Text pushed through in 2026: customers on annual plans migrate only when their subscriptions expire7.

Deferred revenue tests this facet on its own. It is the closest thing Text has to a forward order book, and it set a record in the same quarter recurring revenue recovered.

Moat trajectory: Holding steady

Deferred revenue set a record at 77,2 million złoty and operating cash flow rose 22,2% in the June quarter. The float works whether or not the business grows; it simply stops growing with it.

The number that tests this moat
Reported
Deferred revenue
77,2m zł at 30 June 2026, a record

Customers buy annual licences and pay up front, so cash arrives before the service is delivered - which is why operating cash flow of 161,6m zł exceeded net profit of 116,6m zł by nearly 40%, and why there is no debt. It is the closest thing Text publishes to a forward order book, and it set a record in the same quarter recurring revenue recovered. It is also service owed rather than money earned, and it delays every signal by up to a year.

Source: Text Group results for Q1 of the 2026/27 financial year ↗
Aspects of the moat
DIG DEEPER 01
Seventy-Seven Million Złoty of Other People's Money
The closest thing Text publishes to a forward order book, and it set a record in the quarter recurring revenue recovered.
DIG DEEPER 02
No Debt, and No New Shares Since the Listing
25 750 000 shares, unchanged for the company's whole listed life, with nothing borrowed against them.
DIG DEEPER 03
Cash That Exceeds Profit
161,6 million złoty collected against 116,6 million earned - the accounting understates the collection.
DIG DEEPER 04
An Effective Tax Rate of Eight Percent
Poland taxes qualifying software income at 5%, and it is worth more to Text than most of its cost savings.
⚠ Threats to the moat
⚠ THREAT 01
Deferred Revenue Is Work Owed
A record deferred balance sounds like a record order book; it is closer to a record obligation.
⚠ THREAT 02
Ninety-Four Percent of the Profit Goes Out the Door
A 10,4% yield on a dividend that just fell 30%, paid while the company rebuilds itself.
References
  1. Moat Explorer calcAt 30 June 2026 that produced a record 77,2 million złoty of deferred revenue, and across the year to March it produced operating cash flow of 161,6 million złoty against net profit of 116,6 million - cash exceeding accounting profit by nearly 40%.
    Moat Explorer calculation - arithmetic on figures Text reports: monthly churn of 4% compounded over twelve months (1 - 0,96^12 = 38,7% of logos a year); revenue per team member (329 073 thousand złoty over 271 people = 1,21m); third-party services as a share of operating costs (159 821 of 201 291 = 79%) and employee benefits as a share (6 458 of 201 291 = 3,2%); operating cash flow against net profit (161 552 over 116 608 = 1,39); the dividend payout ratio (109,7m over 116,6m = 94%); the gap to the ARR target (100,0 less 89,52 = USD 10,5m); the fall in operating margin (50,1% less 38,6% = 11,5 points); the tax saved under the IP Box (126 680 at 19% less the 10 072 charged = about 14m złoty); the market value in dollars (1,08bn złoty at 0,2688 = USD 0,29bn); Text's share of the live-chat market (89,52 over about 1 100 = a twelfth); the largest new contract against revenue (seven figures over USD 88,2m = about 1%); and 500 dollars a month expressed annually (6 000 dollars); the price-to-earnings multiple at each financial year end (market value over net profit: 3 687 over 155,261 = 23,8 times, and 967 over 116,608 = 8,3); cost of goods sold as a share of revenue (85 588 over 354 178 = 24,2%, and 106 753 over 329 073 = 32,4%); and the effective tax rate (12 323 over 178 876 = 6,89%, and 10 072 over 126 680 = 7,95%) — FY2025/26 · publ. September 2026 · source ↗
  2. Moat Explorer calcAt 30 June 2026 that produced a record 77,2 million złoty of deferred revenue, and across the year to March it produced operating cash flow of 161,6 million złoty against net profit of 116,6 million - cash exceeding accounting profit by nearly 40%.
    Moat Explorer calculation - arithmetic on figures Text reports: monthly churn of 4% compounded over twelve months (1 - 0,96^12 = 38,7% of logos a year); revenue per team member (329 073 thousand złoty over 271 people = 1,21m); third-party services as a share of operating costs (159 821 of 201 291 = 79%) and employee benefits as a share (6 458 of 201 291 = 3,2%); operating cash flow against net profit (161 552 over 116 608 = 1,39); the dividend payout ratio (109,7m over 116,6m = 94%); the gap to the ARR target (100,0 less 89,52 = USD 10,5m); the fall in operating margin (50,1% less 38,6% = 11,5 points); the tax saved under the IP Box (126 680 at 19% less the 10 072 charged = about 14m złoty); the market value in dollars (1,08bn złoty at 0,2688 = USD 0,29bn); Text's share of the live-chat market (89,52 over about 1 100 = a twelfth); the largest new contract against revenue (seven figures over USD 88,2m = about 1%); and 500 dollars a month expressed annually (6 000 dollars); the price-to-earnings multiple at each financial year end (market value over net profit: 3 687 over 155,261 = 23,8 times, and 967 over 116,608 = 8,3); cost of goods sold as a share of revenue (85 588 over 354 178 = 24,2%, and 106 753 over 329 073 = 32,4%); and the effective tax rate (12 323 over 178 876 = 6,89%, and 10 072 over 126 680 = 7,95%) — FY2025/26 · publ. September 2026 · source ↗
  3. ReportedTotal assets are 195,9 million złoty against total liabilities of 86,0 million, of which 67,0 million is not money owed to anyone but revenue collected and not yet earned.
    Text Group consolidated financial statements for the year ended 31 March 2026 (revenue of PLN 329 073 thousand against 354 178; operating profit 126 931 against 177 367; profit before tax 126 680; net profit 116 608 against 164 418; earnings per share 4,53; 25 750 thousand shares; operating cash flow 161 552 against 179 489; revenue by product line of LiveChat 275,495, ChatBot 28,694, HelpDesk 23 466 and KnowledgeBase 1 418; revenue in US dollars of 88 162 thousand against 88 595; approximately 95% of consolidated revenue generated through the group's subsidiary in the United States and Polish sales of 4 837; costs by type including depreciation 26,396, third-party services 159 821 against 140,300, employee benefits 6 458 and total operating costs 201 291 against 176,876, split as cost of goods sold 106 753 against 85,588, selling expenses 68 457 and administrative expenses 26 081; total assets 195 923 against 226 705; equity 109 965 against 136 418; cash 62 780 against 77 704; current contract liabilities 65 502 and non-current 1 539; trade payables 10 284; no credits or loans; and income tax at 19% on other income and 5% on qualifying intellectual property rights under the IP Box regime, with the deferred portion computed at 6,87% against 7,43%) — FY2025/26 · publ. June 2026 · source ↗
  4. ReportedThere are no credits or loans at all.
    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. ReportedText has never issued a share beyond the 25 750 000 it carries today, all with one vote and none privileged.
    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 ↗
  6. ReportedThe second is that Text has no need to retain earnings, and does not - 109,7 million złoty went out as dividends against 116,6 million of profit, a payout of 94%.
    Text Group annual results press release of 26 June 2026 (consolidated revenue of PLN 329,1m and net profit of PLN 116,6m, down 7,1% and 29,1% respectively; revenue in US dollars of 88,2m, down 0,5%; MRR of USD 6,93m at 31 March 2026, down 2,7%, and ARR of USD 83,12m against a strategic goal of USD 100m; operating profit PLN 126,7m down 28,7% and EBITDA PLN 153,3m down 23,9%; margins of 67,6% gross, 38,6% operating, 46,4% EBITDA and 35,4% net; and a recommended dividend of PLN 4,26 per share including two interim payments, the first of PLN 1,15 paid in February 2026) — FY2025/26 · publ. 26 June 2026 · source ↗
  7. ReportedDeferred revenue is service owed, not money earned, and the annual billing that creates it is what delayed the effect of the price increase Text pushed through in 2026: customers on annual plans migrate only when their subscriptions expire.
    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 ↗
Sources
Generated September 24, 2026