Sample report 05: Subscription AI tool that makes phonics materials for teachers
Public-data due diligence on a public Flippa listing, reviewed Oct 31, 2026. Sources: the public listing page, the Internet Archive availability API, and the business’s public review profile. No seller data, no NDA material. The seller and the business are not named. Not advice to buy or not to buy.
Verdict in one line
Flippa has verified revenue through Stripe, but the page gives three different MRR figures ($1,200, $6,673 and $7,858) while its profit and multiples imply about $4,400 a month, and at the stated churn the current subscribers alone do not repay the asking price. A buyer should get the Stripe MRR history and the cost of replacing churned subscribers before bidding.
What the seller claims (public page, Oct 31 2026)
- Title: “AI EdTech SaaS for Teachers | $6,673 MRR | $80K ARR | 428 Subscribers | Growing Recurring Revenue”
- Asking price: USD $100,000. Flippa marks it “Editor’s Choice”
- Monthly profit: USD $3,436. Profit margin: 77%
- MRR: USD $7,858. Total active subscribers: 428. Overall churn: 9.1%
- Page views: 7,462 a month
- Profit multiple 2.4x, revenue multiple 1.9x
- Business location: WY, United States. Site age: 1 year
- Reason for sale: “due to complex business partnerships”
- Acquisition: “advertisements costing approximately $3 per educational lead and $20 for a 7-day free trial”; “one-third of those trial users convert to paying subscribers, generating $20 monthly”; “subscription signup costs via advertising platforms like Facebook amount to $60”
- “The app currently boasts a Monthly Recurring Revenue (MRR) of $1,200”
- Built with “an exceptional and cost-effective technical team from Sri Lanka”; “numerous teachers contributing to its development”
- Vetted + Data Verified Listing: “Our vetting team has reviewed this listing and verified:” followed by Revenue, Primary Expenses and Traffic. Google Analytics and Stripe are connected
- Flippa’s own buyer note on the same page: “Financials are seller-provided inputs. Always ask for verified financials.”
Risk 1: three stated MRR figures, and the profit implies a fourth (highest)
| Source on the page | Monthly figure | Per subscriber (428) |
|---|---|---|
| Description: “MRR of $1,200” | $1,200 | $2.80 |
| Profit $3,436 at 77% margin | $4,462 | $10.43 |
| Revenue multiple 1.9x on $100,000 (12-month revenue $52,632) | $4,386 | $10.25 |
| Title: “$6,673 MRR” ($80,076 a year, matches “$80K ARR”) | $6,673 | $15.59 |
| Metric: “MRR USD $7,858” | $7,858 | $18.36 |
| Ceiling: 428 subscribers at the stated $20 a month | $8,560 | $20.00 |
The metric MRR is $3,396 (76%) above the monthly revenue implied by profit and margin. There are fair explanations. The $1,200 line may date from when the listing was first written. MRR is a forward run rate, while profit and the multiples use past months, so a fast-growing product would show this gap. Annual plans or discounts would also lower revenue per subscriber.
Why it matters: the price is 2.4x profit on the $3,436 figure. On the $7,858 MRR at 77% margin, monthly profit would be about $6,051 and the multiple about 1.38x. So the profit multiple runs from 1.38x to 2.43x depending on which figure is current.
Ask the seller:
- Stripe’s MRR and revenue reports by month since launch, with plan mix (monthly, annual, discounted).
- Which figure the title, the metric and the description each describe, and on what date.
Risk 2: churn against price
Assumption: the listing’s “Overall churn 9.1%” is a monthly rate. The page does not say.
At 9.1% a month, 31.8% of subscribers still pay after 12 months and the average paid life is about 11 months. If new sign-ups stopped today, current subscribers would earn (77% margin, all revenue churns at the subscriber rate, no discounting; “whole remaining life” is monthly profit divided by churn):
| Churn a month | Starting MRR | Next 24 months | Whole remaining life |
|---|---|---|---|
| 9.1% | $7,858 (metric) | $59,756 | $66,491 |
| 9.1% | $6,673 (title) | $50,745 | $56,464 |
| 9.1% | $4,462 (implied) | $33,934 | $37,758 |
| 5.0% | $7,858 (metric) | $85,679 | $121,013 |
| 5.0% | $6,673 (title) | $72,758 | $102,764 |
| 5.0% | $4,462 (implied) | $48,655 | $68,720 |
Seller-favorable cases: with no ad spend during run-off, margin could be higher. At 95% margin, 9.1% churn and $7,858 MRR, the whole remaining life earns $82,034, still below $100,000. At 5% churn the base repays the price on the title or metric MRR. Lifetime profit equals the price when monthly churn is 6.05% or lower on $7,858 MRR, or 3.44% or lower on $4,462 (77% margin).
Replacing churn: 9.1% of 428 is about 38.9 subscribers a month. At the stated $60 per paid sign-up, that costs about $2,337 a month just to stay flat. The listing implies total monthly expenses of about $1,026 ($4,462 revenue less $3,436 profit). So either ad spend sits outside the stated expenses, churn is lower than 9.1% a month, or many sign-ups arrive without paid ads.
Unit economics at the stated figures: $20 a month for 11 months is $220 of revenue, $169 at 77% margin, against a $60 acquisition cost. That is an LTV to CAC ratio of 2.82 (2.59 at $18.36 per subscriber), before model and hosting costs beyond the 77% margin.
Ask the seller:
- Monthly new paid sign-ups, cancellations and refunds for every month since launch, and by source (paid ads, organic, referral).
- Monthly ad spend by platform, and whether it is in the stated expenses.
- Whether 9.1% is monthly churn, and how it is measured (subscribers or revenue).
Risk 3: who owns the code and the content
The seller cites “complex business partnerships” as the reason for sale, a technical team in Sri Lanka, and “numerous teachers contributing to its development”.
Why it matters: a buyer needs clean title to the code, the prompts and any teacher-made content. Partners, contractors or contributors without signed assignments could claim rights, and a partner who does not agree to the sale could block it.
Ask the seller:
- The legal owner of the business and the domain, every partner’s consent to the sale, and who signs.
- Signed IP assignment or work-for-hire terms from every developer and teacher contributor.
- Whether the development team will support the buyer after the sale, on what terms and at what cost.
Risk 4: model costs, school-year demand and thin public proof
The product uses AI to generate materials, so gross margin depends on model usage costs and on the model provider’s terms. Teachers buy around the school calendar, so sign-ups and churn may move with it. The listing gives no monthly data to show either effect.
The listing implies total monthly expenses of about $1,026, or $2.40 per subscriber (428). That has to cover model usage, hosting, the development team and any ad spend. If model usage alone runs above that, the stated margin does not hold.
Public proof is thin. The business’s public review profile shows 1 review (5 stars, Apr 28, 2025) and says the profile was claimed in April 2025, which fits “Site age 1 year”. The Internet Archive availability API returned captures of the home page from Feb 13, 2026 and of the pricing page from Dec 9, 2025; it did not confirm an earlier date. The live pricing page was not publicly readable on the review date, so the $20 price could not be checked against it.
Ask the seller:
- Which model provider and model the product uses, monthly model cost, and cost per active subscriber, with the split of the roughly $1,026 monthly expenses.
- Sign-ups and cancellations by month across the summer of 2025 and 2026.
- Current pricing and trial terms, with a screenshot of the checkout.
Questions on the numbers
- $20 a month, 428 subscribers and $7,858 MRR imply $18.36 each. Ask for the price list and discounts.
- The description’s trial math: $20 per trial and one in three converts gives $60 per paid sign-up, which matches the “$60” signup cost the same paragraph states. At $3 per lead, that is about 6.67 leads per trial.
- Page views of 7,462 a month against 428 subscribers. Ask how many page views come from logged-in users and how many from new visitors.
Assumptions in this report: 77% margin applies to all revenue; churn is monthly and constant; all figures are in USD as shown on the page.
What checks out
- Flippa or the broker verified revenue, primary expenses and traffic, with Stripe and Google Analytics connected.
- The multiples match each other: $100,000 / ($3,436 x 12) is 2.43x (listed 2.4x), and 12-month revenue implied by 1.9x ($52,632, or $4,386 a month) is close to revenue implied by profit and margin ($4,462).
- The title’s “$80K ARR” equals its “$6,673 MRR” times 12.
- The review profile’s April 2025 claim date fits the stated age, and the description’s acquisition-cost figures are consistent with each other.
What read-only access would add
With the access the seller grants: Stripe MRR, churn and cohort reports by month, ad account spend and sign-ups by source, model provider invoices, the code repository and contributor agreements, and the partnership documents behind the sale.
Sources (retrieved Oct 31, 2026)
- Internet Archive availability API (captures of the site’s home and pricing pages): https://archive.org/wayback/available
- The business’s public Trustpilot profile (not linked here, as it names the business)