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Good afternoon, everyone. It's past 3 P.M. in Wroclaw and today we will be having a call on the Annual Results for the 2022-'23 financial year and also we'll cover in that call the KPIs of the first quarter of the new financial year and that is the period of the April to June this year. And it will be the IR team presenting today. My name is Lucja Kaseja and Marcin Droba is with me on the call.
Hello, everyone. Hello. Good morning. So just for start, as some of you probably know, we plan to change company's name at the coming AGM. It's a change which supposed to stress the fact that we are no longer company of the one product. We now changing our strategy.
We speed up with AI and also at the end of the 2022 we bought a very strong domain text.com. So actually feel invited to visit text.com. Check our vision. We actually we try to present on this website how we look how we feel about our company, our place in the ecosystem and how we feel about industry, what is coming, what we are changing and we think that you can look at our industry and see some free I think errors of the -- of how our industry looks like what we are doing.
The first is the situation when we had a tool which enable agents to communicate online with visitors on the website and agent can be supported can have opportunity to check the wisdom gathered, the knowledge gathered in this company.
The second stage and that's what we are doing now with the AI tools is the situation where agent is actively supported by these tools, which suggesting answers, which brings this knowledge to him. And the third would be, of course, and we are coming, we welcome this stage three with ChatBot 2.0 is the situation when the whole communication is taken from agents and is handled by intelligence tools and human is still present in that process, but as a trainer or supervisor. So feel welcome to -- at text.com and check our actually our vision for the industry.
One thing that I have not said is that we are going to run a 15, 20 minute presentation when we will summarize the year and the first quarter and later on, of course, as usual, it will be, you will have the chance to ask questions Either you can write them already in the chat section or you can later on raise the hand.
And now into the presentation, as always, we are giving a very brief intro to our business that is to welcome the potential investors that might join the call for the first time. So we are a global software-as-a-service company.
We mainly focus on the US, where we generate 40% of our revenues and two-thirds of the revenues we get from the English speaking countries. And Poland, where we are headquartered, is now responsible for less than 2% of the revenues. We operate in B2B and subscription model.
So the companies that buy our software, they pay for a subscription. Important thing here is that they pay in US dollars. We have a very unique customer acquisition model that is mainly through inbound marketing and it actually allows us high and sustainable margins.
As an effect also is the fact that we are a dividend paying company. We pay, we have a very long track record of that and we pay as much as possible. And from the net profit in form of dividends, we still have the Co-Founders on the team, so we have them on the management board, but also in the supervisory board and more into our business.
We have now five products that is LiveChat, ChatBot, HelpDesk, KnowledgeBase and the last one OpenWidget which is actually our first free product that we have and what they all have in common is the fact that it is a premium service. We very much focus on customer experience. We give a lot of customer support. We have a very open ecosystem and we actually encourage others to join us.
And we have, for example, more than 200 integrations now of our product with other products. And that will be the very brief summary of the company. And now I will go into events. The first one that I want to describe is actually the number of interactions that our customers had within the products that we offer in the past financial year.
So what is we are very happy that this number increased by more than 70%. And together LiveChat and ChatBot, they had more than 1.7 billion interactions. That means chats. And this growth that we see in terms of the number of interactions is actually much higher than the increase of the customers that we have.
And this is exactly the result that we want to see, to see that the customers are very actively using and increasing the -- the software that we give increases the value and gives opportunities -- opportunities for the businesses to increase their sales or to help better their customers.
And also in case of HelpDesk, that meant that for 5.5 million tickets were sold during through our software. And commenting the past financial year, a couple of days ago, we published the Annual Results and those are the revenues that we managed to get were PLN315.7 million, and that is actually an increase of 41.9% over the year.
And similarly, net profit increased as well by 44.8% to almost 100 to over PLN172 million. And that is also due to the fact that Q4 for us in terms of the revenues in Polish zloty were very strong. It was an increase of 43% to almost PLN90 million. And the net profit hit was very close to hit, PLN50 million.
And that could not have happened without the customers. So we also give the numbers for the use of products and the number of customers that we have. And those actually include the numbers for the quarter, which has just ended.
So for April to June, the increase in the number of customers for LiveChat was 704 new customers in that particular quarter. And that means that we have over 37,765 customers of LiveChat and ChatBot has risen to 2804 customers. So that means an increase of almost 100 customers in the quarter.
Together with that with quite good numbers in terms of the acquisition of clients, we have LiveChat ARPU and ChatBot ARPU increase over the whole year, year-on-year by 30% and in case of LiveChat 19.5% in case of ChatBot that results through from the price increases that took place during this financial year.
And monthly recurring revenue, which for us is one of the key performance indicators. At the end of June, it was at the level of US$6.47 million and that is increase of 34% year-on-year. And last but not least in this section, the product. We have been very busy with the development of AI based features and the communication that we have of those features is mainly for the customers because we -- it's -- we want to build to create the value in the product for them.
So if you actually want to follow those changes closely, you can see, you can link to the website where we not only inform about the functions that are already in the product, but also the future. For example, just this week, we added for the business and enterprise plans feature of automatic chat summaries for agents, if those are, if chats are transferred between agents, it saves a lot of work for our agents.
In another product, so in ChatBot we are at the very beginning of beta test of new version of ChatBots, ChatBot 2.0, which will change the way that the ChatBot looks like. And also the last, maybe not the most important fact, but also it shows how we want to see the product and everything that is around the product, so that the whole ecosystem, we are -- we have started Text Accelerated where we chose six teams out of 600 that applied and they will be working very closely with our people on the team during eight weeks program to monetize their ideas or to work in the expertise of text intelligence and that we have in the company.
A small note here and more of a fun fact, one of the teams got involved in this Text Accelerated program because they have read in our Investor Relations reports on the company about the program. So we are having our fingers crossed for that person. We are quite happy that we could have added to that.
Also, we already have the decision of the management board on the dividend proposal of how to split the net revenue -- net profit. And out of 172 million of net profit, 153 million will be paid out in form of a dividend. Already the second advance was towards dividend was approved by the supervisory board and that means that PLN1.46 will be paid per share and that will be paid out on 4th of August.
The total dividend value is close to PLN6, so that's PLN5.95 per share. Last but not least, from my section. Transition into text. So we will be proposing at the upcoming Annual General Meeting to change the name of LiveChat Software [indiscernible] to Text [indiscernible].
We will not be changing the name, the names of the individual products and also the individual websites, domains will remain with the five products that we had, especially due to the fact that the domains that we already have are very strong domains. And we will be actually we are already displaying the whole product portfolio on the new website text.com, which we think that it is worth reading.
And now we can dive just a little into latest numbers. First, let's start with annual results. As you can see, the net sales grew by almost 42% and EBIT and net profit by almost 45% on annual basis.
Of course, these results are presented in zlotys and are also supported by strong US dollars. If you look at Q4 alone, the results are even better. Net sales grew by almost by more than 33% and EBIT and net profit grew by 65% and 64% respectively. And of course that was -- that quarter, which was fully based on new pricing of the LiveChat.
So that's the full effect of the change our price has seen here. And of course this result in our case translates into very, very healthy cash flow. And you can see that actually that most important negative position here is cash flow from financial activities, which means dividend in our case.
But the situation is very healthy and even in this tough and uncertain times we can uphold our dividend policy. And actually we are doing that. So, yes, that dividend policy is confirmed. And if you look at the revenue split, geographical split is not changing a lot. So of course the US is the most important, but what we were expecting actually is that, that new products, younger products will be catching up LiveChat that the last quarters was of course very strong for LiveChat because the change of the pricing had a strong, very strong impact here.
But nevertheless, you can see that especially HelpDesk is achieving very healthy, very healthy growth. We are very happy from this result and we expect, of course, that in the coming quarters that a new products will be catching up, definitely. And that's the split for the last quarter and HelpDesk still below 2%, hopefully not for very long.
ChatBot still above 5% and that's not going to change. Contrary that ChatBot will be growing faster than LiveChat that's what we expect and that were annual KPIs and KPIs for the fourth quarter and now we can jump into the first quarter April from April to June and the actual preliminary results.
And here are revenues which were will be no longer revenues because we're going to change our policy of the revenue recognition. That's going to change. So that's no longer is -- and that's no longer data about estimated revenues.
We will -- what was the difference actually we used to recognize revenue at the moment when we -- on the cash flow basis actually when we get this money and after the latest discussion with auditor we now think it's just a disposition is now big enough to justify to change that policy and we will be smash this revenue between the quarters in the terms of the annual payments between for quarters.
And I think that what is expected by investors that will be positive thing because that will give a much better overview on our business in the future. But we had really we had to take some data from the investors. We want to be very, very transparent. So actually for the Q1, this $20.16 million are actually operational cash flow, which we added the numbers which would be translated into revenues under old policy.
So that would be a small growth between quarters, which is the effect of the, I would say, modest number of the annual payments in the last quarter. And, yes, that's the number. We still think that the best KPIs for the investors to look, to think about our business is still MRR and you can see that you know two quarters before we jump on the higher level after changes in our pricing and we are not losing this business.
We are still growing and the MRR accounted to $6.47 million in the last quarters. And this MRR is, of course, a result of the two factors. One is the number of the customers and the second one is the ARPU. And it was very good quarter in the -- if you think about customer acquisition, that number of LiveChat customers grew by 700 net versus 1500 during the whole last year.
So actually it's pretty good number. But the new customers number, here you can look at our ARPU and at longer perspective, but let's jump to another slide, when you can look closer at the latest data and what we can see here is actually that especially in the April and May that new customer base was dominated by very small customers.
So, yes, we can see a lot of activity on the market, but especially when we think about very small customers and bigger customers looks reluctant and they are planning more. They probably maybe touch about economics. They are rather changing with the waiting, with some decision about investment and when they are doing that, they really want to be flexible when it comes to payments.
So they really don't want to pay annually, not at this moment. They rather prefer they want to be charged month by month, even if that's more money actually, but they really want to be flexible at this moment.
And the ChatBot, the same KPIs and ChatBot is -- the story of the ChatBot is, as you can see when you think about number of the customers, not very fast growth at the moment, but nevertheless very constant growth. ChatBot is adding customers each month and definitely the most important thing now is a new version of this product, as we speak, the new version of the ChatBot is being released and will be available for the first customers which will join our beta testing program probably next week.
So that's the most important. I mean we are, well, there is definitely a more room for the growth when we think about ChatBot. ChatBot is growing. ChatBot is adding customers each month. The ARPU is growing. So it's, you know, quite good picture. But definitely there is a huge change for this product which is coming.
So we are very, very excited about this possibility and what is coming. And saying that we -- and that's all what we had in store for you and we'll be happy to answer questions. And we have some of them.
We have several questions in the chat section. I answered some of the technical ones. So if please have a look at the answered ones as well. We can start with the first one from an anonymous attendee, that relates to the revenue recognition. And we may just want more probably describe what has happened.
So there was a comment in the press release that you are not getting revenue estimates because you are reassessing revenue recognition following comments from your auditor. Could you please elaborate on this? And in fact, when we published the KPIs, we do not want longer to provide an estimated revenues for the period. However, this quarter in order to provide a comparison, we also have given these numbers. Actually these are more of an operating cash flow because that was the basis for our estimated revenues and it has been given in the report.
However, in the future, what we will change is the fact that so far we were recognizing all the revenues and we were booking them in the period when we received them. So no matter whether it was a monthly or annual payment, we were recognizing the whole amount in the period when we received it.
Now we want to distribute these revenues over the periods when we serve the service actually. So if a payment is done this quarter for annual contract for annual subscription, we will be booking one-fourth of it this quarter, one-fourth of it next quarter and in the fourth quarters, the revenues from this particular subscription will be seen.
And this is what will change in the future. We are now revising the methods of calculating it for the current period and once we will be publishing it, we will of course publish the numbers for the past financial year for the comparison.
Okay. So that's one. I think we have Daniel here. So maybe we can let Daniel ask these questions. Hello, Daniel.
Hi, Marcin. Hi, Marcin. Hi, Lucja. Good to see you. I actually posted one question, I think, in the chat here. But I have another one. The ChatBot ARPU was increasing pretty strong, I can say, is it still price increases that are flowing through there or are customers adding seats and features there due to the changes?
Yes. So, yes, I would say the most important thing when you is that we, yes, we change prices of ChatBot. Yes, we have now new prices. But in the case of LiveChat actually we change pricing for existing customer base after some two months. And in the case of ChatBot we didn't do that.
So, yes, the new customers which are buying ChatBot are paying new that they have new pricing. The existing customer base is allowed to keep the old pricing. So, yes, that is making difference. So that's why ChatBot actually is still growing and there is potential to grow.
Also, very interesting thing we have in the when you look at the pricing of ChatBot, there is some number of interaction which is included in each pricing plan. And if you if customers have more conversation, he is charged additionally, 1 cent per in the interaction. And so actually we have each month we have some additional revenues, but we are not thinking about them as recurring revenues.
So actually it's not included here in ARPU because ARPU is based on revenue. So actually we had a real ARPU, the real ARPU of ChatBot is higher, it's depends from the month how much higher, but it can be 20 or more dollars per month. So, yes, so the real ARPU of the ChatBot is even higher.
Understand. And just to be clear there. So some of the ARPU increase is driven by new customers being applied on the new pricing tires. But what are you seeing in terms of added or reduced number of seats there? Are you seeing the same as you're seeing with LiveChat with some removal of the number of seats?
I think that that was the case in the April. Actually, April wasn't great because we saw that some of the customers were reducing number of the agents and that's why actually why is that absolutely main reason because of the -- we saw a full contraction in the LiveChat ARPU in the April, in May it was stable and June we returned to growth. But, yes, that was what really happened in the April.
Right. So in May, June you saw a change to add in seats rather than reduced seats in both LiveChat and ChatBot, okay.
Well in ChatBot actually is, well, it's not about seats really, because no you don't, you can't have seats in the ChatBot. It's just ChatBot. But what is important in ChatBot the new customers are paying more than old customers. That's the important fact and actually more customers are choosing higher plans usually.
Got it. Okay. Just a final one on I wrote it in the chat, but I guess I can take it here right away. So it was a bit surprising to see a fast return to strong customer net adds again considering the current environment and just curious what was driving that if there's anything in particular that you would highlight that's driving that change? Because, yes, that's not what you're seeing from many other similar companies I guess.
So indeed this is something that is more for the small customers. So we are actually seeing a lot of small companies, and hence, that is not really separate for ARPU, but it looks like they are the ones that have to do the business, no matter what, no matter the conditions. And they are part of the market is still active, so small and medium size, whereas within the bigger customers, more enterprise customers, we definitely see what the others are seeing.
So, first of all, less or more reluctant approach to adopting new software, and also, for example, we see that the bigger companies, they are reluctant also to pay upfront, for example, for annual payments, and they require more as like more elastic approach to be able to start the deals.
Okay. Perfect. I understand.
Which can be some additional color can be geographic. And it looks like US and Asia, leads the way. So Europe is weak, for us Poland is very weak but US, of course, we are trying to be focused on the US market, US and Asia leads the way I would say.
Okay. Perfect. I understand. Maybe just to follow on, which I always tend to ask you. The number of employees at the half year-end. I don't know if you disclosed that in the release, but you usually don't mind telling it. But was it a bit less than in March or if you can comment on it perhaps yet.
We ended the financial year with 182 people on board. And now it is slightly less.
Okay. Got it. Okay. Perfect. Thanks, guys. Always good to see you. Take care.
Thank you very much. It's great to have you here. Thank you. And we have William Sewell here also. Hello? Okay. Hello?
Hi. Can you hear me?
Yes, great. Thank you.
Hi, Lucja. I've got two questions on headcount. So the first one. So I understand that the last financial year was a year where you added headcount, you grew the company. But Q4, the headcount reduced. So I just wanted some detail on why when you were hiring in previous quarters, you decided to shrink headcount in Q4 and maybe which teams were affected?
Yes. So indeed, we, for the majority of the year, we are hiring. However, it was -- we had in mind that around the team of a size of around 300 people will be the complete team in terms of the size of the teams and the particular positions that we had to fill.
And since then, first of all, we started to be very much concentrated on AI and automation and that, as you could have read in the letter of the CEO, this is in first firstly, applies to ourselves, and we want to automate the work that we do on a daily basis. And it's not the reduction of the team is not actually through layoffs, but it is more of when people are leaving. We do not feel the positions. That's one thing. We try to cover for those people in some other ways.
Also an important thing is the fact that we are pretty concentrated on optimizing and automating the task that we do. And for example, we no longer have Chief Operating Officer and Piotr Bednarek who was the COO, now has the position of Chief Automation Officer. And this -- although it looks like just a name change like the change of the name of the position, it really is what we do within the company. We want to operate smoothly and to have a lighter version of ourselves.
In terms of the particular teams, since in the last two quarters, indeed, some changes were made. For example, we no longer have the social media team. We had this approach of working on social media. However, it did not bring the results that we wanted in terms of -- like we really want to -- for all of what we do to have either to be work more in terms of the product for our customers or to have the client acquisition. And it was not working well.
So that's why we asked those people to either join some other teams like in the content team are to fulfill their carriers in social media, but at some other place. Some other teams that were affected, we no longer have manual testing, QA. So we went for automatic one. So that also meant some changes and on team level like on the team's level that I think it's what mostly happened.
Also in terms of the -- to give you more context in terms of how we are organized within the company, we are now -- we have now a much smaller teams in like five, seven people in terms of the size of the team to have the job done faster and more smoothly. So this really like this automation thing really is down in the company, not only to make the automation for the customers, but also to have it within our own team.
Yes. So actually AI automation, it's affect us as organization. It's change things actually that's the change, which affects us as an organization. HR is the team, which is affected, that also will be smaller.
And what is important to say, of course, we are still hiring. We have some open position. And you can check out text.com that is linked that is, of course, the section called job. And, yes, we are looking for some people for mostly technical like data engineer, data scientists, we have this team, we have know-how, but we really want to strengthen the team.
So, yes, in some areas, we are hiring, but it's definitely all about automation. Yes, you should be able to have even smaller team.
Thanks. That's really helpful. I think the follow-up question was you mentioned that you thought 300 people was a complete team in the past. Now considering these automation targets. Do you have a new number in mind? Or and as well maybe could you add some detail on with ChatBot 2.0 like how many new staff would you need to hire in the next few quarters say to fully develop that product?
Well, not a lot, actually. I think especially when you think about ChatBot 2.0, we have team, we have that team. I don't think we need to hire more people. I think it's great to think about AI. There is also a lot of tools, a lot of technologies different, not only in OpenAI, a lot of other we can use, which can be used, which can be somehow used during our work. We -- but it's not only ChatBot, of course. We have this data team. We have different ideas. We are working on some features for other products.
So, yes, we need some more people. I think we have like seven, maybe eight open position as we speak. So something like that I would say seven, eight so not a lot of people. And we don't have a very strong target for the whole team, but I think that, yes, we definitely we have smaller team next year when we will meet maybe by 20, 30 people something like that. Not a very specific number. Don't think about that as a number written in the stone. But it's, yes, it's how it looks now.
Thank you. Yes. Thank you. That's very helpful. Have a good day.
Thank you. Have a great day. Thank you.
So we're now coming back to the questions from the chat, and there is one from Jose Ignacio Caro. Is there any plan to list the company in the US Stock Exchange in the future?
And I would say just as we have recurring revenues. This is also a recurring question. This is we are, first of all, in our business very much looking at the US. This is our target market. This is the, actually, the US customers are the customers that we think of when we do changes in the products. And US has been always the market that we were looking at.
Also in terms of the stock exchange, at the time, when we were deciding whether to list in Warsaw or somewhere else, US was considered as well. However, this should be treated as a long-term plan for the company. A vision of the CEO or the company should be at some point. However in the next few quarters, nothing will change.
Yes. So that was always ambition. So I mean, 10 years ago, that was an ambition for us, and it still is. So as you can see, it can take a time. It still can take a time. So, of course, that would be great. Even if you think about the currencies and how we are affected by that. That's not something we like. It would be great to report in dollars to pay dividends in dollars.
Our business is in the US. We are very focus on the US market. So, yes, so definitely that one something we'd like to do and like a lot of things like that. There is always something which is going to quite a whole attention from our team, from our management, CEO and now in start obviously this AI and this opportunity and huge challenge, of course, and risk related to that.
So don't expect anything averse, but it's always was ambition. Even, I would say, personal ambition of the LiveChat founders. Okay. Next question.
Again from anonymous attendee. Actually sort of three questions. If you had a silver bullet and could take one competitor out of business, which one would it be?
I will take this. I will start with that. So no, no, we have nothing but respect and really love for our competitors. They actually you know that's the great companies and they motivate us and a lot of them actually coming to that market with their own customers. I think that's the great situation. We had this story in Poland that when Facebook actually knows that it will publish how it's called Messenger actually made possible to use messenger on your website.
Yes, messenger plug-in, which actually was perceived as a direct threat to LiveChat. And actually and I can understand that. I fully understand that Polish investor -- the Polish shareholders actually frightened and our shares lost 20% of the value in the last -- in the one day, and it was just beginning. And actually, we're happy about that because we didn't think about Facebook as a competitor, but we were convinced that they come into the market with their own customers.
They will bring a lot of new customers into our market and maybe some of them later will look for more advanced tools. So we were very happy about that shareholders not but actually, we were right, then. I remember one story actually that is a very long story.
That company is not exist. Actually, it was bought, it was company called Zopim. As I said, they don't exist as a company [indiscernible]. So maybe I can tell that story because say, what they were doing, it was like 12 or more years ago, they were doing [indiscernible] marketing until we have targeting us and our customers. So that was unfair and we really weren't happy about that.
And but we never responded in the public. So that was the one maybe with the one only case when we really had some negative feelings towards some of competitor. That was just a part of the question. And the next one, what is the key competitive advantage for LiveChat and the third one in the 10 years from now, where should LiveChat be under ideal circumstances, where we had this -- we had this traffic in our office.
We have -- it would be great to show that, but I'm not the office, that virtual background. We have the time line of the LiveChat, our history on the world, printed on the world. And we have this story and some people actually marked when they come to our company and tell us a line into the future. And I believe is like 2060, it's the point at the end of this line and that is a -- that is HQ on Marsk.
Yes. So fingers crossed for Mr. Marsk and that's the official plan, you can come to our HQ and check. It's -- I would say it's almost official, but seriously, of course, that's the serious discussion about competitive advantage. And – and, of course, that's a huge discussion about it. That's a huge team because we compete with very different companies.
We compete with providers of the free resolutions. So, yes, we have to compete with the companies. We are actually giving some tools for free. At the same time, we are compete somehow, maybe not so directly with companies like LivePerson providers of the great tools which are designed for the enterprises.
And our niche, our sweet point, I would say, is somewhat in between and long story short, we are I think we are very good in giving a lot of value to the small or medium companies, which are able to pay for premium solution, but are not big enough to use and pay and be charged for some enterprise level solution and maybe to take solution and just not good for them because they have our own limitation.
So we have this sweet point. We have this niche. We are really very good at understanding this niche these companies. We are very close to them. We are very flexible. We are the first user of our tool each of them. We are really very good at understanding, where is the really value for the customers.
We are also I think we are very flexible when it comes to change some things in our tools. What I mean is from the opinion about one of our competitors. They have a very good tool, which really outdated look at UI and feel and we are really changing things very often, as I said, we are using them.
So, yes, I think that's some of our advantages. We are very I think we are very efficient when it comes to customer acquisition. I think that's not something I have to prove. You can look at the numbers. But at the end of the day it's about value for the customers. Lucja, do you want to add something?
Of course, if you want to ask to be more specific, we can continue this discussion maybe we can contact and have one-to-one meeting and discussing. Thank you for this question. I mean, it's great. Yes, we don't want to kill our competitors really. There is space for more than one company here.
Should we go to the next one?
Yes, definitely.
So any idea when ChatBot 2.0 will be released? And do you expect this to cannibalize your LiveChat product? So ChatBot 2.0 will be released to the customers should be released within a week.
From the technical standpoint, it was released today. Yes and we will invite customers to try it next week. Sorry about that.
So it will be running and in terms of the cannibalization with the product with LiveChat, it has worked along LiveChat. So we see a lot of examples where both of the products are used. So ChatBot for filtering out spam or entering the most common questions. And then with more specific ones, people are transferred to a human agent and that is through a LiveChat product.
So it's one cannibalize although what we are already hoping to ChatBot 2.0 were like what should work well is the fact that it will be much easier to build to run those ChatBots than in the past. And this was one of the obstacles or challenges for us for ChatBot product that you had to spend more time on setting all the things.
And now it will be done automatically. And you could -- you will be able to adjust or to tune then you bought more towards your needs, but the majority of the work that has to be done initially will be done already in the product.
Yes. And, of course, a very important thing. We are working on our automation in LiveChat. We are creating a lot of features, which are supporting automation within LiveChat. So in the future LiveChat will be on the market and will be much more automation we've been in LiveChat.
That's what is happening, that's what is happening. So, yes, we are creating a lot of tools, a lot of features. Some of them are released. Most of them are released as beta for willing customers using enterprise or business plans and these features together are creating AiAssist, I would say, the system of AiAssist, which are helping agent. In that case, yes, we still have agents, but he can be much more effective.
There is another question connected to that, just two questions below, and I already answer the one are all ChatBot customers already LiveChat customers or we are -- or are they mostly new to the company? And then actually two-thirds of ChatBot customers are also users of LiveChat whereas the product is also sold standalone. So this one-third of the customers are using ChatBot only.
Yes. Actually, a lot of ChatBot users are using ChatBot integrated with Facebook Messenger. So you can see this Facebook, which was seen as a huge trend to us at some point actually created a new market for ChatBot solution. So, yes, that is interesting thing, of course.
The next question if AI presents a significant opportunity for the business, why does it still make sense to distribute most of the earnings and dividends instead of reinvesting AI-related opportunities?
We are doing that. If you think about our business, we actual have, we are investing I mean, we don't really, we discussed this team for employment that we will be able to reduce team, to reduce team because of automation, thanks to automation. But, no, we are hiring. We are hiring a lot of people, we are hiring some expensive people, and we are doing that. And that's the expense for us, we are not hesitating spending money for some AI solution we can use.
Actually, as we speak, we spent -- we don't spend a lot, for example, in the OpenAI, we are spending -- we will be -- we would be happy spending more because that would mean that the usage of this new AI solution is better. Actually, we were expecting that some customers, the customers would be much more eager to try some of the solutions, some of the features.
But we can see that for example some of them are very careful, which is a great thing. Some of them worry about team data, for example, which is absolutely great thing. We are very happy about that because that what, of course, is that the next competitive advantage for us, we are -- that's something we really care for.
I'm not sure if your data is really safe if you're using free solution and definitely not if you're using free AI solution because probably, you are paying for that free solution, giving your data out. We are using OpenAI, but we -- it's more expensive for us because actually, we opt out from the option we use opt out when it comes to using data for training of OpenAI solutions.
So, yes, we don't we are not really -- that's not the point. We will spend as many as we need, definitely, you can be sure if that would be necessary to spend like $2 million tomorrow for the access for OpenAI and the tool, we are doing that. That's not the plan of course not today, but definitely the growth is very important. And actually, what you can see as a net profit at end of the day is what's left after this investment. For us the investment is the work of the people.
The next question is on the cost side. What was from Max Steinberg, what was the reason for the lower operational cost in Q4 compared to Q3? And as I understand that it relates to the lower cost of sales from the disposition.
And actually what is mainly in disposition are the cost of support and marketing, but also the cost of providers and commissions to the partner program. And those vary depending on the deals, for example, signed by the partners. So it's more of a fluctuation, not a change that gives an answer for the future.
And the next question, can we please talk about any planned product pricing changes in fiscal year 2004. So we have nothing planned for this particular year. However, as we said, when we were increasing the prices at the end of the last calendar year, those, first of all, to increase the prices, we have to give more of the value of a product to customers.
And this is something that is the most important thing. And obviously we want to make those price changes more often. So it won't be that you would have to wait, yes, for further price changes, but nothing is on the plate currently.
It can sounds like marketing, but it's true. I mean I think that's our competitive advent actually.
So some are competitors probably seeing how much were base prices. And we have this freedom to think about how to create value for the customers and then we can think how to monetize that value and it can be done because what actually our -- we can see what we can learn from the last quarter. Yes, customers are willing pay more if there is value for them and they can understand that we are changing prices.
But, yes, we have this freedom with comfortable situation. Yes, we can think about how to create value for the customers. If the value will be here, customers will pay for that.
Then we have a question about the headcount. We already discussed that. But just very briefly, the headcount increased from 268 last year to 282. However, it was higher at the end of Q3 and went down in the last quarter of the financial year.
Then the question what I said about the recognition of the revenues is no IFRS compliant. That's the statement. That's cash accounting, that's not allowed. Are you 100% sure that was the accounting or this is just sales bookings?
So due to the fact that we did not have that many annual payments, annual subscriptions that were into the future. The auditor was allowing us to make those bookings in the way we did. However, due to the fact that the values have changed, they suggested that we should change the revenue recognition policy. And that is what should be taking place since this financial year.
Actually, it was even discussed in the auditor's opinion. So you can check that. It's online on our website, it's translated. So, yes, that was a lot of discussion through the year. So, yes, we don't have doubt that we had right to do that on our own. And we had no doubt starts. Yes, we should change that now and we had discussion we have discussion with auditors about that. And so that's how it is and how it will be.
This question -- the next question relates to the previous one, and it's actually, I'm happy that Ruben Charter has asked about it. Is there any cost recognition policy change coming along with the revenue recognition policy change? Indeed, we were making provisions for servers for the whole period when the -- for example, for annual subscriptions, and it was booked in the same period when we received the revenues.
So indeed, what we will change is that some of the revenues will be put into accurate quarters of the future. And also the associated cost of servers will be booked in the future in particular quarters. And for us, what it will also mean is that some of the provisions will be released for the servers. But I think we will be ready to talk about exact numbers once we publish the results of Q1 and also we will be giving the numbers from the past to show how it has changed.
The next question LiveChat new customers growth trends have improved in the past six months. Yes, that's right. Can you make some comments to what factors has resulted in this? I hope the one thing is probably market condition.
And not so bad as it looks for the special small companies which are doing business every day, they have this business. They look for the tools, which can help them and which are very active and I don't think what will happen in two months' time because they have the business here and now and our tools are very friendly for them. So that's the one thing.
And apart from that, of course, we are still working on customer acquisition channels. That's what we are doing on a daily basis. And so, yes, all the time, we are improving something, we are adding some integration.
At the end of the last year, we added three important marketplaces actually we entered WordPress VIP, Squarespace and Square Online in each of them, we are the first LiveChat on these marketplaces. So they started that. So it helps. That's not the secret of course. It's not like the growth coming from this place, but we are working on that. We are adding new things all the time and some of them are working. No, I think it is two things.
What is coming, of course, the summer vacation is, of course, not the best time for the new business, but we will see how it will look like.
Again a question from Max Steinberg. You have been talking about new products for a while. It's OpenWidget and ChatBot 2.0 have been talking about. OpenWidget actually, yes. We were not thinking about ChatBot 2.0 at the time when we were talking about the new products, also some of other products or developments are in the way, but we rather not talk about the details now.
We have something in store, but also saying that LiveChat is always about revolution. If you -- if I look at the OpenWidget we are not harping. We are working on that. We released that because we won't really want to have the first users we -- it's growing peacefully.
We are not spending a lot of money at the end of the day. I think we really don't spend money for that. We are using, for example, we are losing product to market that solution. We just released some new integration for OpenWidget integration with Instagram and actually it looks great to have this widget in start on some Instagram accounts. It's fantastic.
So, yes, it's about evolution always. So it's not like no video guys when you have huge premier at a very important day. No, for us, it's about process, it's about trying -- it's about the first batch of the customers, which are having fun with this product, about learning what is, what we did good, what we did wrong, improving that -- it's low business model.
The next question is about accelerator program. Are we investing equity in these six companies? Could they become acquisition opportunities in the future? Actually, we are working with them for them to earn money with us actually. So the thinking here is that they will be part of the ecosystem. And if they will bring clients, we will be earning together. So actually, it is the benefit of both parties. We do not view them as acquisition opportunities at the moment.
Also we are not really acquiring companies. So this is not the way we are thinking. We rather want to thinking about the ecosystem. So we will be happy to have third parties or those people in the accelerator program developing the products that will be used integrated with the tools that we have already.
Next question from Ronak Yadav. Hi. How strong do you see competition from AI plug-ins. I don't think that our competitors. I really don't think that. I mean what we are competing with some of our competitors are very advanced on NNI, some of them less, but yes I think we are still competing with for now with the same companies Intercom, Zendesk, TDO maybe at some point Hubspot, Freshworks, but and of course, a lot of happening on the scene. But no I think that's our competitors still. Maybe that will change, maybe that will change.
And it's will definitely well a company with some businesses thinking about using KI. It should be a very, I would say, extremely careful about security of the data about being compliance also a lot of regulation are coming. So yes and we can see that especially when we discuss these new things with bigger customers. Yes, Carrefour, and definitely how we're supposed to look like.
And the next question is about text, is the move towards text coming from position of defense. I mean why change something that is working? Go on. Sorry.
No. I just wanted to say thank you.
Okay. So we are not changing things that are working rates in a way that we are not changing the main domains. So the main LiveChat.com, ChatBot.com and others remain as the places where the customers seek for those software. Text will be the place where we will be displaying the whole product portfolio.
We have now five products, and we want to have more in the future. And it will as of now, it is more of a corporate website. But we want it to be the place where we all the products will be visible. So it will serve its purpose.
Yes. So definitely don't make mistake. I mean, we are very excited about, I mean, we are proud what we achieve. That's the one thing. At the same time, we think that we are still a very small company.
That's the one thing. The second thing, yes, we are very excited about what is coming. I mean, the companies run by tech people. Tech savvy people and very excited. But at the same time, it's a huge challenge. I mean that the market is changing. And with these challenges and chances, huge risk is coming.
So you can be happy with this what you have today. I mean you have to think about tomorrow. We are not -- what is in Polish, we have this saying about fat cat, yes, is fat cat, which is happy about what is happening now and don't think about the future and the challenges. Yes, we have to move forward.
And then we have the last question. I think they might be combined. Could you please?
I think no.
Maybe, but maybe not, it can maybe the author can confirm. Could you please expand a bit more on the auditor warning on revenue recognition and as we have expanded, that's why I think that the next one, what generally happens to the customers who turn away might be connected, but I'm not sure.
Okay. Let's try.
If we could specify those questions. If not then after the call we can.
No, we don't have any, how I would say.
One last is in. One last one is in.
No. So auditor's opinion is public, is on the website, and there is no reservation in that. So actually all we did or the reports are accepted and approved by auditor, it just claimed that it's something we should do and we are doing that, but the order reports, annual report is accepted. There is no further discussion about that and we are really comfortable with that.
So the question, what generally happens to the customers who churn away? First of all, they churn for different reasons. Some of them, actually, the majority of them lack the chat or the traffic at the website is not enough for them to pay for the service. So they are either just stop using and turn to some free solutions. They may be also customers who return on a recurring basis.
So, for example, they have events or they use LiveChat on conferences. And so they become once in a while, they become a customer. Also, some of them, they go to our competitors. And we basically try to track the reasons of churn. But also, for example, the churn customers were approached by us with our OpenWidget solution for them to try a free version of the product. So sometimes we get back to them as well.
Yes, generally. Yes, thank you.
Still there is last one question. Where do we hope to see LiveChat in five years as a vision, not a fixed goal and best wishes for your success.
Thank you. Yes, it's definitely automation is the key. So, yes, so we like LiveChat shoud I say text, it will be text. A company which is able to achieve this goal we have, I mean, fully automate communication of our customers. And I meet the automation is not the target itself.
It can be a way to differentiate ourselves from other competitors. And we have this story. We saw some of the investors we've met for the first time wanted to check our solution and ask us to show some companies which are using LiveChat on the communication and we chose some of them.
And actually he came back to us and he had a really awful experience because his experience was very bad. He didn't get a right answer to this question. And what we know, that's not a problem with our tools.
Actually, he just have bad luck and actually agent maybe he wasn't trained. Maybe he didn't understand our tools. Maybe he didn't understood the questions. So your experience and his experience depends not only from us, that would be great to change that.
I mean that the ultimate goal would be to see [indiscernible]. Happy to see that some companies, they provide us on day services using LiveChat ex solution because that would be a guarantee of the really good experience for them.
That would be I think that would be some one of the ultimate goals. Lucja, do you want to add something. Okay, we have some.
I think this text intelligence is something that is very important to us and this is where we want to be in the future. Also, we always had this approach of having open environment of building the whole ecosystem and that is something that will be trained to do in the future as well. So we will find a way to do that in the future as well.
Yes. So that would be something we aim for. And finish text.com I think when I look at our vision there, I think that's the best way to really understand what we are doing. What we are aspiring to. So feel invited to text.com. Feel invited to contact us, of course, we'll be happy to continue our conversations from today. We'll be happy to meet you again.
And, of course, we are available. Of course, we have LiveChat on our website. Of course, at this moment, we are with you. We have text communication. Don't hesitate to text us any time. We have some exciting things coming to us. We are very excited to -- we are waiting for new brands. We are waiting for AGM to approve new company's name and it was a pleasure to meet you all even is that form.
I repeat that. I think like sixth or seventh time, don't hesitate to contact us, mail us or jump into LiveChat on our website. Thank you all for being here today with us.
Thank you for the call.
Thank you. Have a great day. Goodbye.
Bye.