Text S.A. (TXT.WA) | Investment Case

1. Company Snapshot

1.a. Company Description

Text S.A. develops and distributes communication software for businesses worldwide.It offers LiveChat, a tool that allows to communicate between Website visitor and its owner; ChatBot, which allows the creation of conversational chatbots for customer service teams that automates corporate communications; KnowledgeBase, a platform that lets companies to create knowledge bases for employees and clients; and HelpDesk, an application that enables companies to simplify team efforts for customer service via email.The company was formerly known as LiveChat Software S.A. and changed its name to Text S.A. in September 2023.

The company was founded in 2002 and is based in Wroclaw, Poland.

Show Full description

1.b. Last Insights on TXT

Text S.A.'s recent performance was impacted by uncertain market conditions, with the pan-European STOXX Europe 600 Index experiencing stability amid interest rate policy assessments and trade uncertainties. The company's ability to generate consistent earnings and robust cash flow may be challenged in this environment. Although no recent earnings release data is available, the company's dividend stock status may be evaluated by investors seeking reliable income sources. Any potential rating downgrade could affect investor sentiment. There is no information on share buybacks.

1.c. Company Highlights

Last Price	42
Change Percentage	-0.19%
Open	42.08
Previous Close	42.08
Market Cap ( Millions)	1082
Volume	56340
Year High	62.25
Year Low	36.8
M A 50	41.43
M A 200	50.92

FCF Yield	10.27%
Dividend Yield	10.48%
ROE	104.22%
Debt / Equity	17.65%
Net Debt / EBIDTA	-1.23%
Price To Book	13.1
Price Earnings Ratio	7.85
Price To FCF	9.73
Price To sales	3.13
EV / EBITDA	6.13

2. Text's Q3 2025 Results: A Year of Rebuilding and Growth

Text's financial performance in 2025 was marked by a 1.7% decline in Monthly Recurring Revenue (MRR) to $6.98 million as of December 31, in line with expectations. Payments received in Q3 2025 were $21.89 million, 1.6% less than the previous quarter but 2.1% more than the same period last year. For the 2025 calendar year, MRR declined 1.7%, while payments received were $88.42 million, essentially flat year-over-year. The company's liquidity position improved, with nearly PLN 30 million in tax refunds and full repayment of a short-term bank loan.

Publication Date: Jan -07

                                    📋 Highlights
                                    MRR Decline::
                                                Year-over-year and quarter-over-quarter MRR dropped 1.7% and 1.1%, respectively, to $6.98 million by December 31, 2025.
Q3 Payments::
                                                Payments received in Q3 totaled $21.89 million (1.6% lower than previous quarter, 2.1% higher YoY).
Large Customer Growth::
                                                51% of total MRR now comes from customers with MRR ≥ $500, up 8 percentage points YoY.
Liquidity Boost::
                                                PLN 30 million in tax refunds and full repayment of a short-term loan improved financial flexibility in 2025.
Team Expansion::
                                                Workforce grew by 24 employees YoY, primarily developers, with minimal sales team additions (1–2 people).

                                

Business Highlights and Growth

The company saw a growing share of larger customers with MRR of at least $500, now accounting for 51% of total MRR, an 8 percentage point increase year-over-year. Text built a new product from scratch, overhauled its cloud infrastructure, and obtained SOC 2 Type 1 certification. The management team highlighted that "2025 was a year of building for Text App; they changed infrastructure and built a new product from scratch, providing value to customers." The Text App has been tested with over 700 customers, with feedback applied to improve the product.

Outlook and Valuation

For 2026, Text will focus on broadening its product offering, customer acquisition, distribution, and visibility. Analysts estimate next year's revenue growth at 2.4%. With a P/S Ratio of 3.0 and an EV/EBITDA of 5.84, the company's valuation appears reasonable. The Dividend Yield of 10.95% is also attractive, with a planned dividend advance of PLN 1.15 in February. The company's ROE of 104.22% and ROIC of 140.04% indicate strong profitability.

Operational Efficiency and Churn

The company has been optimizing its operations, with the team increasing by 24 people year-over-year, mostly developers. The higher churn rate was predominantly driven by smaller customers, with the main reason being business closure or financial problems. As the management noted, "Churn is natural in the SaaS business." The Text App is gaining customers globally, with diverse use cases and a loyal customer base.

3. NewsRoom

European Dividend Stocks To Consider In October 2025

Oct -01

Source:

Top Dividend Stocks To Consider In January 2025

Jan -02

Source:

Top Dividend Stocks To Consider For Your Portfolio

Nov -28

Source:

Positivo Tecnologia And Two Other Top Dividend Stocks

Jul -05

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.00%)

6. Segments

Software Solutions

Expected Growth: 7%

Text S.A.'s Software Solutions segment growth is driven by increasing demand for digital transformation, adoption of cloud-based services, and rising need for data analytics. Additionally, the company's strategic partnerships, innovative product offerings, and expanding presence in emerging markets contribute to its 7% growth rate.

7. Detailed Products

Text Analytics

A natural language processing (NLP) solution that enables businesses to extract insights and meaning from unstructured text data.

Language Translation

A machine translation solution that enables businesses to translate content in multiple languages and reach a global audience.

Content Generation

An AI-powered content generation solution that enables businesses to automate the creation of high-quality content.

Chatbots and Conversational AI

A conversational AI solution that enables businesses to build custom chatbots and virtual assistants.

Sentiment Analysis

A sentiment analysis solution that enables businesses to analyze customer opinions and sentiment from text data.

Entity Extraction

An entity extraction solution that enables businesses to extract specific information from unstructured text data.

8. Text S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is moderate due to the presence of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of multiple options and the ability to switch to competitors.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the company's strong relationships with suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple competitors and the need to differentiate products and services.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.52%
Debt Cost	7.32%
Equity Weight	99.48%
Equity Cost	7.32%
WACC	7.32%
Leverage	0.52%

11. Quality Control: Text S.A. passed 9 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Sword

A-Score: 6.0/10

Value: 4.2

Growth: 5.6

Quality: 5.5

Yield: 9.4

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

Text

A-Score: 5.9/10

Value: 5.7

Growth: 8.4

Quality: 9.0

Yield: 8.1

Momentum: 0.5

Volatility: 3.3

1-Year Total Return ->

Sapiens

A-Score: 5.0/10

Value: 1.3

Growth: 6.2

Quality: 7.6

Yield: 3.8

Momentum: 9.5

Volatility: 1.3

1-Year Total Return ->

Quadient

A-Score: 4.8/10

Value: 7.8

Growth: 3.3

Quality: 4.5

Yield: 5.6

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

Admicom

A-Score: 4.1/10

Value: 0.6

Growth: 5.6

Quality: 8.0

Yield: 3.8

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

Media and Games Invest

A-Score: 3.6/10

Value: 3.6

Growth: 8.2

Quality: 3.2

Yield: 0.0

Momentum: 5.5

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-6.28%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.32%

Text S.A. - PLLVTSF00010

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TXT

1.c. Company Highlights

Higher Yield

Better Quality

Higher Growth

Revenues Miss

Weak Momentum

Revenues Beats

Lower Growth

2. Text's Q3 2025 Results: A Year of Rebuilding and Growth

Business Highlights and Growth

Outlook and Valuation

Operational Efficiency and Churn

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.00%)

6. Segments

Software Solutions

Expected Growth: 7%

7. Detailed Products

Text Analytics

Language Translation

Content Generation

Chatbots and Conversational AI

Sentiment Analysis

Entity Extraction

8. Text S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Text S.A. passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

42.0$

Current Price

42$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA