Livechat Software SA

WSE:LVC

Earnings Call Transcript 2022-Q4

[Marcin Droba, IR]

So hello, everyone. LiveChat IR team is here. And we will present just released preliminary data for quarter, which ends on March 31. And the whole team is here. My name is Marcin Droba, and with me is my colleague, Lucja Kaseja.

Lucja, do you want to start from here?

[Lucja Kaseja, IR]

Yes, sure. So I welcome you as well on webinar on preliminary estimated results for Q4, our Q4, that means the period of January to March 2023. We, as always, try to be brief. We'll give you about 15 minutes presentation, and then we are very much open to any questions that you have. So first of all, and especially because we see the new names, a very brief intro to LiveChat Software.

We are still LiveChat Software, not for very long though. We plan to change the name of the company to Text, both for the -- our U.S. company and the Polish one. When with that comes a new vision and mission for the company, but we still remain as text communication, this is our main focus of the entire company. The key facts about the company as it is now, we are a global Software-as-a-Service business. That means our main market is the United States with roughly 40% of the revenues being generated from there. Whereas Poland, where we are based, is now slightly more than 1% of the revenues. We operate in business-to-business subscription revenue model. We have a very unique customer acquisition model. That means a lot of different channels that generate the traffic and new customers.

And that actually allows us to generate high and sustainable margins. With these margins being high, we are also able to pay out dividends, and we have been paying the dividends for the entire period that we are on the stock exchange. And actually, this year, in 1 weeks' time, it's more of an interesting part, in 1 weeks' time, we will celebrate 9th anniversary of being on the Warsaw Stock Exchange. And when there was an IPO of the company, the price of the share was PLN 18.50. And now with the most recent interim dividend that we paid out, those dividends are more than PLN 19.

So actually, even with dividends, the investors should be happy. We still have the co-founders on -- within the company, both in the Management Board and on the Supervisory Board, and they with some other key managers are also the largest shareholder that we have. And of course, products. So we currently have 5 of them for being the paid products, LiveChat, ChatBot, HelpDesk and KnowledgeBase. And the most recent addition, so OpenWidget since November last year.

It's actually our first premium product. I'm probably not going to talk more about the products. There will be some other time for that. But I would like you to give some information about the most recent quarter. So we just 4 days ago, finished the fourth quarter in our case, the last quarter of the financial year with USD 20 million of revenues in the quarter.

What is important, we, first of all, received all the payments in U.S. dollars. And that's also the reason why we provide this information in U.S. dollars. So no matter the country where our customer comes from, it can be Germany, it can be Poland, U.S. or China, for example, all the customers will be paying in U.S. dollars. And as you can see, the last 2 quarters actually are very good ones. That is because of the price increases and also this quarter, we've seen another increase of the revenues. When we look at monthly recurring revenues, this change is slightly lower, and this is due to the fact of our booking of the revenues.

So in terms of the revenues that we received, the customers can choose between the monthly payments and annual payments. And in the revenues that we just showed you, all the payments, monthly and annual are booked in the month or in the quarter when they were received. However, this approach of showing monthly recurring revenues, so actually, the revenues are here distributed to particular months when -- for which they are paid. It shows you more -- well, it basically gets rid of the fact of those annual payments. And you can see that MRR in the last quarter increased by close to 1% to USD 6.4 million.

In terms of the number of customers and actually other key indicators, this is interesting and important, the number of LiveChat clients increased to -- once again, we crossed 37,000. It increased to 37,061 customers at the end of March. But what is interesting is actually what was happening in the particular months because in January, we've seen a decrease in the number of clients, February was more or less stable. And now March, we see an increase. Actually, it was an addition of 216 clients.

And it is also important to say that those clients are mostly smaller ones. We'll come back to this when we see the ARPU and initial ARPU graphs. So as you can see, the ARPU right now is on this new level of USD 160, just slightly below that. And again, this is important because we did the price increase in November last year. And we see small fluctuations of ARPU.

So in the -- in January, ARPU decreased by $2. Then again, it decreased $1 in February. But actually, in March, it increased by USD 2. An important thing here is the fact that I mentioned already that we have quite a lot of small customers coming and also going in March. But actually, the net MRR churn for that particular month was negative.

So that means actually the customers were adding more of a business than was taken away with the churn in customers. And here, I want also to make this point about small customers coming and going because you can actually see that when you look at initial ARPU, so the very first payments that our customers make, this remains and is at much lower levels than those of actual ARPU. We can now go to ChatBot. For ChatBot, we actually saw similarly to LiveChat an increase in the number of customers, so we now have 2,706 customers, active and paying. And with ARPU in that -- in case of ChatBot product, it's actually slightly different because we still see that initial ARPU for ChatBot is at quite high levels.

And actually, it adds up to the average level of ARPU. That is on the next slide if someone is following the slides. So as you can see here, the -- this is an important factor adding to ARPU value for ChatBot. One more thing, though, if you are following the reports that we published yesterday, you could see that actually, the revenues for ChatBot decreased quarter-on-quarter, but it's -- 2 factors are in here. So MRR itself increased by almost 9%, whereas what made the difference actually were these additional payments that the customers make if they exceed the number of interactions that they have in their pricing plan.

So this was actually the case of ChatBot. Last quarter, there's quite big payments for additional chats and hence, the difference that we see in the revenues now. In terms of the key events, because we are talking about the revenues and more financials. So actually, the revenues increased by 37%. So we -- for the first time, we crossed the level of USD 20 million as -- per quarter.

Also, MRR continuously grows. If you compare it to year-on-year figures, this is mainly due to the price increases that we made. But when you look at -- because we are already more than a quarter into the price increases, when you actually see how ARPU is, so to say, behaving, we see the stabilization of this parameter. And what is also quite optimistic, we are back to customer growth in case of LiveChat product. In this LiveChat product, we increased the number of customers by 211.

Also for ChatBot, it was an increase of over 80 customers for the whole quarter. And from other news, except for the KPIs and the revenues, we slowly transitioned to text.com. And after the acquisition of the domain, we paid out the dividend at the beginning of the year. And something that if we were not to say that would definitely come in form of the questions, our cooperation with OpenAI. Back in February, we signed DPA agreement with OpenAI.

And currently, if you look into our products, the first features using ChatGPT technology, OpenAI technology actually were added to all of the products. And for a summary, that's it. But we are very open to do questions that you might have.

[Marcin Droba, IR]

Yes. Thanks a lot, Lucja. So yes, presenting is good. Answering questions is better. So you can use ask question feature, or just raise a hand feature, and we let you in because at this moment, I don't see questions.

[Lucja Kaseja, IR]

Neither do I.

[Marcin Droba, IR]

Okay. Okay. William. Yes. I will just -- okay. I can see the people which are raising hands. So William, you are the first, and I'm just trying to -- yes. You should be able to speak.

[Unidentified Analyst]

So 2 questions from me. First, on customer additions. You added about 200 customers net to the LiveChat platform. Just wanted to know, could you give us the gross figure for this quarter? And maybe just comment if you see momentum continuing. That's my first question. And then second, just at the bottom of this slide here, you say first features have been added using OpenAI technology. If you could just describe these new features that you're adding and maybe also describe what you're seeing with your competitors? I've noticed that HubSpot have also released the demo for AI-integrated CRM. So it would be great if you could just describe that.

[Marcin Droba, IR]

Great. Thank you, of course. Of course, OpenAI is -- a lot to speak about in this area. So let me start with the first question. We don't -- actually, we never disclosed our growth figures. But it -- but I tried to put some light or put more light on that because that's an interesting thing. Maybe I will try to start with the churn because that will give you a lot of color. That will add a lot of color into that. Because what -- of course, what we saw in the previous quarter was in the effect of changing in prices was a higher churn, of course. And of course, we have now a lot of question about churn, how churn looks like.

And that will -- and that should answer your question really because the churn was very high in November. It was like in the area of the 4% versus usual 3%. And then till the February, every month was better. So actually the February was back -- almost back to this 3%. So that looks good.

And then, we saw an increase of the churn back in March. And then we have an interesting thing. When you look at the March, that was absolutely the best, a very good month in the terms of the net additions. So actually, the fact is that there was a [feature] rotation and the high churn above 3.5%. So it's very high historically, very high churn was more than offset by the inflow of the new customers.

So not giving exact figures, that the gross addition was lower in the -- at the beginning of the year, and it really was really high in the March. Geographically, if you look at geography, it was led by the U.S., by Asia markets, which is interesting. But even more interesting is that when you look at the initial churn, if you look at the initial churn -- if you check the initial churn, you will see that it was very low. The whole ARPU, that average ARPU was up. It was a very good month.

So actually, what has happened during March, a very interesting thing. A huge rotation among small customers and up-selling, a nice up-selling -- a nice revenue retention and up-selling in the area of big customers. So I hope I put some more light on that matter. And OpenAI, I mean a huge area. Lucja, do you want to start this difficult [deal]?

[Lucja Kaseja, IR]

Sure. So maybe I'll also combine it with a question that we have, a written question. So do we have any initial thoughts on how ChatGPT is improving our offerings and -- or is it too soon? So actually, what we have included into our offerings are rather small features, helping the customers to either automate the work that they do or as for a KnowledgeBase product, for example, to actually start using the product. So these are -- they are very cool features, and we are happy that we have them. But it has not changed yet the whole offering. So this is where we are now. We still have a lot of work to do into the future on our products. And how it compares with this -- of the competition? Some of them were already working for the last couple of months on ChatGPT [indiscernible], so you might have seen Intercom or LivePerson products that also incorporate AI and ChatGPT.

So this offering -- it is actually this -- well, not time of the year, but time in the history that all of the companies to, more or less extent, will be using AI. We see that on the Polish market with -- on the Polish market with the Polish companies that they start to implement AI into their business. And this will be exactly the same in our field, even more. Maybe I can say that our industry was the first one impacted because of the chat in the name.

[Marcin Droba, IR]

If you look at the LiveChat, I think the biggest, most important for now, [feature], it would be suggesting answers using AI tools. And an interesting thing because it was released to enterprise customers. So now it's available in the enterprise plan. Probably it will be deployed also for business plan. So for us, for now, having some AI features could be a tool which could help us to give some more value in that is bigger, more expensive plans and to try to migrate some, for example, team plan users to business plans.

In the very important -- actuality, the very important OpenAI [indiscernible] feature is -- was deployed to KnowledgeBase, because actually it solves the biggest problem we had with KnowledgeBase. So KnowledgeBase is all about creating some articles, some knowledge. And the problem was no one really had time or energy to do that, to write this knowledge. And actually now, you can jump in the KnowledgeBase and start to create articles using this technology, just add some key points and that the articles is actually created by AI, which is very nice. Of course, KnowledgeBase is more of a product for us. But I think that's the biggest change in that -- that huge change for that product because really that was the biggest problem. So for us, I think we try to look at the bigger picture. And definitely when we think about AI, not only about OpenAI, but AI, it's more about some vision. It's how it changed our view what we are thinking about future of online communication, what we're thinking about automation. So on the text.com, that is our vision and also very interesting having vision for ChatBot and -- and definitely -- if you're interested, definitely just feel invited to look at text.com vision part and then we can discuss some things, some details.

But -- but yes. So the great thing about how OpenAI is now constructed is the fact that, yes, we were able to add something very, very fast. We have a lot of products ongoing, a lot of ideas. Probably some of the big competitors can be ahead of us. But at the same time, I think about some philosophy. I mean you can just -- you can just be addition to OpenAI. We don't want to be just addition to OpenAI. We won't use that tool to create or alternative [tool] or our tools to create some features, to create some value for customers, and it's not just to be addition to that technology. And that's the harder way. That will be difficult.

That will be challenged. But that's the vision for ChatBot. And so yes, please look at that visit text.com. And of course, we'll be happy to continue. And of course, we can discuss about OpenAI and AI for hours because believe me that's what we are doing in the company. I think we're learning every day something about OpenAI, and there's a lot of new discussion about this technology. Probably all of you heard that the ban -- that ChatGPT was banned in Italy and Germany wants to do the same. And of course from our perspective, that's not important because that ChatGPT was banned, not the AI technology. But if you look at the -- but now you can see how safety of the data is important, how cautious you should be adopting this technology. So I would say a lot of things to discuss, to think about.

I mean we are learning every day. And I'm sure that our people, which are working with this technology are learning much more every day. And I think, Daniel. Daniel, great to have you here. The floor is yours.

[Unidentified Analyst]

I hope I'm not repeating. I think some of the -- this previous question touched a bit on my first question is regarding the price increases. There is a tougher environment, as we all know. And there has been -- have you noticed any different trends? You mentioned the big -- huge turnover in terms of smaller customers.

And then you said in the larger customers, you're seeing nice revenue retention, up-selling. Maybe some color there on the trends, what type of up-selling has been working well? And if there's any difference in trends basically after your first price increase, I think ever, or in 9 years or whatever it is, it would be interesting to hear, get some color on it.

[Lucja Kaseja, IR]

So it will be quite difficult to talk about the trends, especially due to the fact that January, February looked different than actually March in terms of new additions. The good thing is the churn. So the churn went down from this north of 4% in November to usual 3% back in February, now slightly up. But that is a very good -- we view that as a good indicator of how the clients reacted to the price increase. And now we already are post this price increase.

So the majority of the customers are on new pricing, and there are no longer discussions over the pricing, except maybe for the -- those on annual payments because if their subscription ends sometime now, they will be faced with new prices. But unless it is a deal negotiated with the salespeople, they either have to accept it or they churn.

[Marcin Droba, IR]

Yes. So March was really different. So we have to wait. Is March is beginning of the new trend? I hope so. I literally hope so. And I hope that the next quarter will be good, and I think that there's a chance for that. But of course, that was just March.

[Unidentified Analyst]

We'll see. But maybe just on the up-selling then on the large customers. What are you seeing there? Are they adding more seats? Are they adding ChatBot? Or what was the big trend there?

[Marcin Droba, IR]

Other agents start that new products, other agents, yes.

[Unidentified Analyst]

More like the agents basically are.

[Lucja Kaseja, IR]

This goes well with what we see with -- like how the customers behave in time. So if they adopt, they -- and especially the bigger ones, they increase the number of agents with increased business as they have.

[Unidentified Analyst]

Got it. Just -- Lucja, you mentioned that a majority of customers are already on new pricing. How is that possible? How many that were on annual -- I don't know if you -- can't remember if you disclosed this or not, but how big percentage are on annual versus monthly? But it would seem to me, I think you increased it in October? So...

[Lucja Kaseja, IR]

Yes. The price change was late October, and that applied instantly to all the monthly payments, well, not instantly within a month, it applied to all the customers that were on monthly subscriptions. And then it also applied to annual subscriptions. But that will be continued until the end of October because like with their subscription ending, they are faced with new pricing. So now we are 4 months into the year like with the new prices. And the annual subscription, they represent definitely less than half of the subscriptions. The majority were on monthly plans.

[Unidentified Analyst]

Okay. Got it. So would you even have a number, how big percentage are on the new pricing? Or -- yes, you just -- no, it's more than 50, basically. I mean, is it closer to 50 or closer to 100 or somewhere in between, I guess then?

[Marcin Droba, IR]

I would say 80 perhaps, something like that. Maybe it's definitely [indiscernible] numbers, but I would say 80, maybe even more than 80. But I think that's the idea.

[Unidentified Analyst]

Perfect. Okay.

[Lucja Kaseja, IR]

And that applies to LiveChat because with ChatBot, it's slightly different because only the new customers were faced with price increases. So there is no any -- like no transition into a new pricing model that has been completely done already.

[Unidentified Analyst]

Got it, perfect. And finally, on the cost side. I know we will get details on this a bit later when you release the report. But is there anything unusual on the cost side that you think is worth mentioning?

[Lucja Kaseja, IR]

Not that we know.

[Marcin Droba, IR]

Sometimes, we have. Sometimes our -- so no, I don't think so, really. But sometimes, of course, what is affecting the bottom line results is some FX effects. And -- but really, we -- that's not something we are aware of at this moment, if something happened really on that level. We don't have any hedging and -- so I'm not sure. But apart from that, really, I don't think so. No, no.

[Lucja Kaseja, IR]

Also on the cost side, the team size is roughly the same as it was a quarter ago. So there is no increase here in terms of the size of the team.

[Unidentified Analyst]

Perfect. That's helpful. Maybe just last thing then Lucja, you said on ChatBot that it's slightly different because only new customers get the new pricing. What about if I was a ChatBot customer, I started my subscription 1 year or 2 years ago. How long will I be on that pricing? And what's the plan there? Will you -- to ever transition them? Or do they get to ride for free, so to speak, because they have been long-term customers?

[Lucja Kaseja, IR]

So for now, they have this advantage of being long-term customers with ours. The same applies to LiveChat customers before. Because when we switched actually back -- really back in the history -- 3 years ago, when we switched for -- from pay per seat model to pay per agent, only that was applied to new customers. And only now in the previous quarter, they were switched to the new pricing. So they got almost 3 years -- 2 years of, so to say, favorable conditions.

[Marcin Droba, IR]

And we have some more questions, so let's look at that.

[Lucja Kaseja, IR]

So we had 2 questions regarding the pricing. I think they were both -- yes, they were both completely answered. So sorry, there's -- we're not going to read them out, but this was about the effect of the price adjustments on the customers.

[Marcin Droba, IR]

Of course, if you don't feel that your question was really answered, so let us know. So let us know, definitely. We had one about number of the customers about transition to new prices, and -- yes. So that was -- so if you don't feel that we answered, let us know.

[Lucja Kaseja, IR]

So the next question is hi guys, have you seen any weaknesses in the current market where existing customers are deciding to reduce their investment in products such as LiveChat because their demand is reducing? And they need to reduce their costs in anticipation of a future economic downturn? We've seen that effect already since mid of the last year. So some of the customers were saying that -- especially those that were churning because of closures of their businesses that we've seen. This particular reason was up as compared to the past. But most recently, it's -- I don't think we've seen that as the changing factor already. So...

[Marcin Droba, IR]

I think the March was something quite opposite, the March itself. I mean, March was really different. When you look at the new business, new customers, it looks like, yes, that the smaller organization are now in play and maybe bigger guys are waiting or they just want to see what will happen, what about new possibilities, new features. We've definitely -- we have some. We always had some customers, which I would say, were very active when it comes to managing their licenses. So they saw some of them and to change the number of the agents daily, for example, to manage [indiscernible] cost. I don't think it's now at this moment, as for today, tell us more of organization who thinks like that, who works like that. So the answer is where March really was different, it was really something opposite. But looking at the new business, we still, I would say, January was -- January was better when it comes to bigger organization. And January usually is because some of the companies check, look, tried some solution at the end of the year, [as they waited] with the decision, with agreements to the beginning of the new year.

So January was better. March was -- honestly March, a very good month for us. But if you think about initial ARPU, about new customers, not so great. Of course, that is one thing we are always repeating. I mean some even huge organizations are starting with very low initial ARPU. What is happening, they're just testing this feature with [indiscernible] more teams and they're upgrading and they're adding a lot of agents. So we will see. Is that happening? We will see. I mean, very interesting quarter is -- this quarter will be very interesting for us.

[Lucja Kaseja, IR]

So the next question comes from [indiscernible]. Does the end customers see any results of the integration of OpenAI technology in your products yet? Could you give us an example of one of your customers where one can see this? Actually, you won't see it as the end customer because the solutions that we -- these features that we implemented using AI is actually to automate the work of agents. So for example, in LiveChat, you can -- once you write an answer to a question from the customer, you can use AI to make this answer sound more friendly, more formal, shorter or longer.

These are types of things that an agent can do. And from the side of the end customer, this -- he just -- he or she just gets the answer. So it is about how quickly and how well the agent answers to end user. But it is not seen by the end user.

[Marcin Droba, IR]

So yes, for example, we -- when we are, we are involved, we are using LiveChat, we can now see some suggestion -- suggestions how to start conversation. For us -- actually for us, it's not very useful because probably our chat looks a little bit different. The topics are different than the usual ones. But yes, now, especially agents in the enterprise, customers can see some tools like suggestions and like this help with style and tone of the answers. So I would say a nice feature, really nice features. Is that breakthrough? Probably that depends on the customers, on the agents. But yes -- but I think it's something useful. I'm not saying that we are overly excited because we have more excited idea and stake our vision. But that's something which was really adopted very, very fast. And saying that a lot of our competitors are also very fast when it comes to adding some solution.

[Lucja Kaseja, IR]

The next question from an anonymous attendee, for ChatGPT [indiscernible] offerings, do you see -- do you also get an ARPU uplift for offering this? Is higher ARPU more than enough to offset any cost paid to ChatGPT? So actually, we do not charge more for these AI features. Currently, they are -- depending on the plan, as Marcin mentioned, for example, enterprise clients in LiveChat are faced with AI features, and that may be also introduced for the business plan. But it is not paid additionally. And indeed, the cost that we have to pay to OpenAI, it is an additional cost that we will have to bear as of now. The thinking that we have is using AI and using ChatGPT in the future will actually make the work of agents even more automated than it is now. And even if it offers more automation and actually reduces the time or the number of agents that our customers would have to have, that could be the reason for price increases for offerings with AI in the future.

[Marcin Droba, IR]

So the bottom line is, today, we are still not talking about huge money, big money, and [indiscernible] very recently, the cost of experiments and -- in some cases, we are ready to take this cost on us. It can be reasonable because we have to use that technology to create additional value for the customers. And saying that, I think the reaction of the customers to recent cost price increase means that most of them are willing to pay for the value. If the value will be there, I think there will be no problem with the price. And strategically speaking, percentage point of the margin, more or less, is not so important.

The important is at this moment to create that value for the customers. And I -- maybe it sounds like a marketing, but it's not. I mean that's very important, that's the most important thing.

[Lucja Kaseja, IR]

We still have 2 more questions and one person with raised hand. Maybe we can let him in, Marcin?

[Marcin Droba, IR]

Yes, of course. Hello, [Radim].

[Unidentified Analyst]

Just for me to better understand, when you're trying to attract new customers, are you like -- what percentage are like direct sales that your salespersons are trying to reach out to some companies? Will there like, let's say, [passive] coming from the Internet? And how much for you is the acquisition cost of the customers? If you can bring more color.

[Marcin Droba, IR]

Yes, absolutely. Lucja, do you want to take it?

[Lucja Kaseja, IR]

Yes, sure. So in terms of our customer acquisition, it is completely inbound acquisition. So we have the customers coming to us. We are not outreaching to customers, although we have the sales team on board. But the majority of the work for the sales team is actually to help the bigger clients who come either through partner channel or through directly. But they help them to get through the legal compliance questions and the sales team is more of assistance to the bigger clients. So it's not that we have a traditional outbound reach sales team.

[Unidentified Analyst]

So let's say you're spending certain percentage of sales on marketing to be visible when somebody is looking for chat providers?

[Lucja Kaseja, IR]

We actually had -- well, the whole thinking behind our go-to-market process is to have the customer come to us. And it can -- it is done by many actually channels of acquisition, and it really depends on the particular channel. Because many years ago already, we decided to have the website in English and all the content in English that generates a lot of traffic from the customers that are already interested in such solutions. Also, we have a very high position on Google Search. So that gives us another 20% of the customers. We pay just a little bit for the ads, the Google ads. And actually, if you think about the paid marketing, it is not something that we do. We actually have other channels that we invest into, for example, partner channel that is responsible for 25% of the new customers and not directly into paid marketing.

[Marcin Droba, IR]

Yes. So we spend very small money on paid marketing. We are now actually paying for some Google ads. We are doing some retargeting marketing mostly in the -- for the ChatBot. We are -- we have some paid campaigns targeting potential partners -- not customers, because that's more effective, which is interesting. Some of our affiliates, some of our affiliate partners, we are splitting revenue with them if they bring us customers, are using paid campaigns. But that's not our spending. That's not our -- not really [indiscernible] money.

[Unidentified Analyst]

Understood. And so for you, for example, you're basically globally exposed to -- you're not like saying now we want to expand more in Asia or Latin America because you're basically available global-wise, if I understood it...?

[Marcin Droba, IR]

Yes, yes. Actually, if you look at our strategy, we are very focused on the U.S. So when we think about our model, let's say, model customers, we think about U.S. company. And I think that's the most competitive market. So actually, if we can win there, we can win anywhere. But in the result, and also the great thing is about English. I mean everyone looking for the English knowledge. Actually English is the common -- new common language. So it's good because we can concentrate really on English.

[Unidentified Analyst]

Understood. I know there were a lot of questions about price increases. But just to better understand, you have been like increasing the whole, let's say, the price list, like the base offer. What was it that you were like adding extra products which you are charging more to the customers?

[Lucja Kaseja, IR]

No. In our case, it was a 25% increase for LiveChat product across the plans, with some additional increase that resulted from changing the pricing model. And that is -- we had some legacy plans on pay-per-seat model that was allowing to have a high number of agents, but just a small number of seats. So a small number of agents were able to be online at the same time. That was our legacy plan from 2020. And in the past quarter, actually, so in November -- late October, actually, 2022, we switched everyone except for just a very small number of customers to the new pricing model. So now everyone pays per agent. That's the history.

[Unidentified Analyst]

And going forward, you still like -- want to be more like trying to gain higher ARPU? Or is it now you are like [indiscernible] pricing level and you want to again concentrate on growing the client base more?

[Lucja Kaseja, IR]

We're definitely -- in a year's time, we are not planning another increases. That's because this increase was the first one in a couple of years. So we wanted to really to see how the clients were behaving. We wanted to check it internally, how that process goes. But what we've learned from that is definitely that we will be making those price updates more regularly than in the past. And having said that, indeed, now the growth -- we were always concentrated on the growth of the customers. And this will be important for the next periods.

[Unidentified Analyst]

Just the last question. What is the expected organic growth of this market? Do you have any estimates for that?

[Lucja Kaseja, IR]

That is a very hard question because everyone -- everything has changed with ChatGPT, so it's cool thought. For now, I do not really have the forecast for LiveChat market specifically.

[Marcin Droba, IR]

If I can see and now any such forecast, I wouldn't believe that honestly. Because why these figures are not different really, I wouldn't be convinced at this moment. [Indiscernible] people which are making that forecast, I wouldn't be convinced by any numbers now. I mean, that's what we can see, it's a huge change coming. So really -- we are assuming that the growth is here, that will be here. And the huge change, then definitely see a huge change in the market. And maybe one more thing about product because that we didn't say a lot about text.com. As you know, we bought this domain. And recently, we just learned that the co-founder of HubSpot just bought a domain called chat.com for the 8-digit -- value of the transaction was 8-digit number, so were much higher than we spent for text.com, and actually that was a very interesting transaction. Because that was his private transaction and an actually, he thinks that it's just investment.

And -- but why text.com is so important? Also, one of the main reasons for that actually was the fact that if you think about today about our products, these stand-alones. Of course, if you buy LiveChat, we will try to in product to show you our other product. But definitely LiveChat is a stand-alone sort on livechat.com. ChatBot is -- well, it's very often used [indiscernible]. But a part of that is stand-alone sort on chatbot.com dot domain. HelpDesk is completely stand-alone, It can be integrated, but we don't have a lot of cross-selling and in sort on helpdesk.com. The same with other 2 products, and that will stay. I mean livechat.com, chatbot.com, the very strong domains, which helped us will stay. But text.com, it will be -- it will be [indiscernible], which will help us to bring is to show the strength of this product, joined together.

And also be [a start] because we never did that to offer some bundles, some crossovers. So that should be definitely -- that should be an opportunity for us.

[Lucja Kaseja, IR]

So we have another question from Jose [indiscernible]. Would LiveChat's capital allocation to the economy goes into an economic downturn, would you accumulate more cash flow? Would you do anything different than you are doing now?

[Marcin Droba, IR]

Well, I don't think so. Honestly, I don't think so. I mean our current policy on that matter is giving us a lot of safety. So even looking at the problems some companies had with the banks, we are safe. Hopefully, that's nothing. That's not something we expect. But even if with some problems in the environment, we are really safe, we can actually finance ourselves even in the situation of some troubles. We don't plan to M&As. So I don't think so. That's definitely, that situation is something we monitor.

That's something we will observe. But honestly, it looks that our strategy, our very, I would say, conservative approach to the business, I mean, we don't have any debt, is -- should be enough for now, hopefully.

[Lucja Kaseja, IR]

Now we take another question from [indiscernible]. Can you comment on wage inflation situation generally for technology sector in Poland and hiring intentions for future year? Actually in Poland, the highest wage inflation for the IT sector, I think it's over. Though what we are faced with is a high inflation in general in Poland, which is close to 20%. And so that still puts a little bit pressure for the salaries. However, what has changed to -- in the most recent time, we've seen the layoffs in IT companies abroad. And also, we started to see the first layoffs in Poland. So that, I guess, changes the IT sector in Poland. But in terms of how it affects our company, not that much because we already couple quarters ago, we decided to have this kind of a [soft] limit on the size of the team of 300, 310 people. And what has been happening in the most recent months is the fact that although some of the people, there is a rotation in the company.

But we now hire more of people with machine learning knowledge and specialists in data, in AI, rather than other positions. So in terms of the impact on our company, it won't be definitely -- this impact won't be because of the size of the team. But -- because of inflation in general in Poland but also the composition of the team will slightly differ. And definitely, those people with machine learning skills will be much better priced than some other people.

[Marcin Droba, IR]

And the next question, at least for now is, do you think OpenAI is a competitor or a partner for LiveChat? Could OpenAI use some technology like external plug-ins in GPT-4 and connect them to customer data to provide a better ChatBot. Is this a potential risk for LiveChat? I think that no, this guy are now working are concentrated even after looking at some latest interview if we [indiscernible], I think that they are rather concentrated on things like future of the mankind, that on small current business. And I think it's also from a business point of view, for them, it would be more [indiscernible] to be partner of almost all majority of the providers than -- and we're just one of them, even the best one, that's what I think. But also -- I think, of course, it's obvious. When we can think about ChatGPT, we think about communication online and then we kind of think about LiveChat and other companies in that area, Intercom, Zendesk and et cetera. But it's definitely -- I think that mistake. You should think about all the companies, all companies around the world. I mean, in Poland, here we had in the morning that the call of a company called [GrupaPracuj].

It's an I would say -- yes, work agency and they're preparing solution based on OpenAI. And I think everyone can look at that and think what -- how -- everyone now can think how to use this technology. So -- of course, having in mind all the challenges and threats which are coming with that. So no, honestly, I don't think so. But the whole situation, the whole change, we will witness on our market is obviously a huge threat.

I mean that's a huge change that -- yes, that's the big change for the whole industry, definitely. And -- but the change is coming with the threats. I mean a whole -- a lot of other companies are doing the same thing what we are doing. The good thing, we -- I think we can keep our advantages because our biggest advantage is not the LiveChat itself. It's not the basic functionality.

It's something which is added on top of that, the whole service, the quality, reliability, additional feature, UI, safety of the data, customer experience, integration with different channels of communication, possibility to gather information in that one place. So I would say that the answer is no. But I'm so sorry for that, saying...

[Lucja Kaseja, IR]

As of now, we have answered all the typed-in questions. But if you have more, please do ask them, either in a written form or by raising hand.

[Marcin Droba, IR]

I don't see anything. In that case, thank you very much. Thank you for your time. Thanks for being here. It was a pleasure. And of course, let's stay connected. Please contact us if you have any questions, and we'll be happy to discuss the next results in the future. Thank you.

[Lucja Kaseja, IR]

Thank you very much. Have a good day.