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Good afternoon, everyone. Thank you for joining us at the 29th Annual Oppenheimer Technology Conference. Happy to have with us the team from Docebo. We've got Brandon Farber, CFO, and Mike McCarthy, VP of IR. Welcome, guys. Thankyou for having us. Really appreciate it. And so for the audience, we're going to have a fireside chat here. We will take questions from the audience if you want to submit those into the conference portal. I will try to address those towards the end of the presentation. And with that, Brandon, why don't we start? Great to have you. Look, I think most people by now know Docebo, but if you could provide just some quick background on the company, I Think that'd be a great starter. Sure. So Docevo is an LMS that over time has focused on what we call hybrid use cases. So, you know, most people they interact with an LMs when they start their career, they think of an Lms as a simple onboarding compliance and talent development tool. Docebo from the ground up was always built for the purpose of not only training your internal organization, but also your external training. What I mean by that is, you know, customers use Docebo to train their partners, train their customers, train their memberships and associations. Large sports organizations use Dochebo to train their referees, their local coaches. So learning has turned into a bigger category than just internal training. And Dochevo was at the forefront because, you Know, we had the vision of building the platform to handle multiple different use cases. When you think about the LMS category, it is quite fragmented where there are a number of LMSs that were born that only do internal training. If you think of your HRSs, they're simple bolt-on for your internal training, and then over time, there's been LMSes that all they do is external training. But when you get into the upper end of the market where companies want one tool for multiple different use cases, Docebo is best in breed and one of the few solutions on the market that can handle that use cases and in 2026 we expanded into the skills category which we could talk about a little bit later and you know we're now on the journey of verticalizing so we've always been very horizontal in nature so someone in sales would wake up in the morning be a be on a call with a manufacturing company government org health care we focused on the government verticalization about three years ago that did require some certain product specific compliance requirements and security requirements. And that led to FedRAMP certification in 2025. And now we're on the journey of verticalizing healthcare, which is a very niche industry that we serve. And those continue to add on for new growth levers for Docebo. Got it. That was very comprehensive. Really appreciate it, Brandon. And maybe kind of taking a step back while also diving into some of those points you made, you know, lots of strategic initiatives over the past couple of years after new management came in on board and we've got this upmarket enterprise push you touched on public sector uh you getting into skills maybe just elaborate a little bit in terms of kind of where we are in terms of progressing through some of those strategic initiatives and and kind of what was the thinking behind that yeah i mean the exciting part if you're thinking about docebo for the first time is that a lot of these growth levers are new for us we're at like ground zero for almost everything we just discussed from a government perspective we really started uh we started this sled space last year this year is really our first opportunity in the fed space uh we're entering into q3 with the most pipe we've ever had. We continually exceed our pipe targets in government. So it's a growth lever. It's a small percentage of our error base. But, you know, we're thinking that the growth rates in this vertical, you Know, our aspirations are much higher than what we put at Inspire, which was 10 to 15% subscription CAGR. You know, for government, you could think of multiples of that number. From a skills perspective, this was an acquisition that was dictated by us being in the enterprise space in 2025 and noticing that a lot of prospects were coming to Docebo and wanting an LMS with skills integrated and having one solution to handle both those different use cases. Truthfully, we were actually losing deals to competitors in 2025 in enterprise space because we didn't have a compelling story to tell from the skills so we went on the market we got aggressive and said well first of all we said should we build this or should we buy this and you know we saw that it's probably going to take three years to build plus another year to go to market so when we think about a four-year run rate we just couldn't wait that long so we bought a solution in January and we're already seeing the fruits of the labor where in q2 we want to combine logos with learning and skills and frankly the really interesting part of that story is that both these deals we would have lost in 2025 because they had a heavy skills component and not only did we win those deals but we wanted double the acv than we used to because when you think about skills and learning you know let's let's use some clean round numbers if we used to sell lms for a hundred thousand dollars we're also selling skills for a 100 000 so now that combined package is 200 grand very impressive uh and you know when we're talking about that skills piece the 365 talents business again you guys just recently acquired it where are we in terms of integrating the product where are are we in terms of getting that product across the sales teams for both organizations? And we'd just love an update on kind of, again, starting point seems like it's really strong, but obviously it could be much better once you get this thing fully baked into the core business. Yeah. From a product perspective, we have two phases of integration. Phase one is complete. Phase two will be done at the beginning of 2027. And phase two is when it's really a seamless experience, one login, two different modules. From a sales perspective, H1 was heavy on enablements, hiring some sales overlays, such as solutions consultants, generating pipe from our existing customer base. and you know we are expecting more in q4 of 2026 where we're going to see kind of all the levers come together and you Know what are those different levers number one we're gonna still sell skills on a standalone basis so if you have you have Oracle learn if you Have cornerstone you know name your LMS we're Gonna continue to sell skills number two which we've already done very well is when new prospects come in the door we're going to sell them dochabo plus skills and then number three is you know and that's that's the one that is going to get better and key four is going back to our customer base got it got it um and then maybe getting more more near-term focus when we look at dochabo through the first half of the year, you guys have significantly outperformed our expectations, I'd imagine investor expectations as well. Perhaps give us an update on what you're seeing in the demand environment. Where are you seeing pockets of strength? Where do you still see potential room to improve as we get to the back half entering into 27? Yeah, so we came into 2026 When we provided our annual guide, we went out with the following assumptions. We went out With the assumption that, you know, we've already saw a strong mid market in 2025. We extrapolated that into 2026 because we had good visibility in pipe gen and win rates. Government, we did assume solid performance in Q2, Q3 and sled and fed. the one assumption that we were concerned on is we assumed essentially flat bookings growth in enterprise because we were tweaking the motion a lot but we didn't have a lot of data points to say we've turned the corner come in q1 we had a really strong q1 in enterprise we had really strong q2 performance in enterprise and it's not only the performance it's also the pipe chain which is going to suggest that Q3 and Q4 is going to fall along the same trend lines. You know, what's left to outperform on the Fed side, while we did embed in our guide a good Fed quarter, there is potential for it to be a great quarter. But the problem with Fed is that it's lumpy, right? Like either win this million dollar plus ARR deal or it gets pushed to Q3 of 2027. So we're in a little bit of a scenario where we know what we know, but we also don't know what we don't now because it's our first Q3 with our FedRAMP certification in real pipe. And then on the enterprise space, while we did tweak up the assumptions, we do think there's still room for outperformance there. Got it. Understood. And one of the questions I've been getting after your recent earnings last week. The first half, obviously, very strong. You guys are embedding in an ARR acceleration in the back half. I imagine a lot of what you just discussed is what's underpinning the confidence, but what degree of confidence do you have in that? Do you feel that that's sufficiently de-risked, obviously from a macro perspective? You mentioned some maybe deal slippage given government is highly unpredictable it would just love your perspective on how to think about the that that that arr ramp yeah and there's two ways to think about this you know the first one i'm going to go into is it's it's just math where we're we're comping easier quarters so if you think about q3 of 2025 that quarter was the first quarter where we had real day forest wind down from our oem relationship which is going from 10 of our error to zero over a period of time so in q3 of 2025 they churned roughly five mil of error in that one quarter in q4 of 2025 we not only had day force again but we also had aws so when i combined when i combine those two churns i was close to eight million of error churn those things are while day force we're still going to experience day force turn we do not believe the magnitude is going to be at the same level as 2025 so we're we're going to be comping over easier quarters and then when we combine that with what i mentioned is that we assumed enterprise flat bookings and we're seeing bookings go up when we combined the easier comps plus performance going up it gives us the confidence that our top line error is going to start to show inflection and you know we we reported a new metric starting in q3 of 2025 where we report error excluding day force wind down fx and acquired error and the reason for that was not to say that, you know, this is going to be a metric we're reporting for five years. And that number is always going to Be above our top line, it was really to give visibility in the short term on what our underlying growth is excluding the wind down. And we do expect those numbers to converge sooner rather than later. So if we're growing that number at 13.9%, and top line is 9.5%, at some point, those numbers are going to have to converge, right? Got it. That's super helpful. And I deliberately kind of dragged it out before going into the topic du jour of the last few years, but AI, obviously, that's top of mind for everybody. uh kind of what are you seeing as far as customer interest in ai what is docebo doing as far as putting capabilities in front of customers yeah so let me start off by our buyer persona so you know we we serve an interest in buyer persona where our buyers are our hr you know We're not selling into developers or the IT. So I wouldn't say our buyer persona is at the forefront of AI, but they're very curious. So what we're seeing is that a lot of our prospects and a lotof our customers, when we demo our AI functionality, they love it. They're like, this is exactly the partner we want to work with. You're thinking of things we're not thinking of. but at the same time they're like i'm not 100 sure how to use this just yet and we could get to the fd topic a little bit later but um it's it's definitely it's it's we're seeing adoption increase uh but it's not you know we're not an industry where we're going to go from you know low adoption to very high adoption quickly some of the ai products that we already have is content creation, which has been in our product for close to a year now. We're seeing steady adoption where it's, you know, call your LLM-based content creation. Our virtual role play, which again, we disclosed some usage metrics, which are going up. That's your avatar-based role play scenario. So, you think about if you're a frontline worker at a QSR company, fresh out of university, and you want to get training on how to deal with angry customers. Well, sometimes instead of doing that in a real-life scenario, it's easier to do in a role-play scenario. So we're starting to see in frontline workers a lot of interesting use cases for role-playing. And then coming in Q4 of this year, we're coming up with Agent Hub and Knowledge Search. What does that mean? Knowledge Search is you're essentially going to be able to attach your LMS to multiple different sources, SharePoint, Jira, and Google Drive. Essentially, the logic is a lot of learning happens outside of the LMS right now. And if I think about Doceo, we're still a small company, but a lot my knowledge articles are on Google ShareDrive. So it's going to be really powerful for someone who's taking training in the LMs, but also needs to ask a question where the article may not live within inside the LMS so that's common energy four and then agent hub is the ability to create custom agents that will be specific to your workflows that will allow administrators to significantly cut down time on think of like enrolling 10 different countries into 10 different courses you know manually it takes a couple hours, and hopefully in the future, it will take a couple seconds. Got it. And since we are kind of investors in Wall Street, the natural follow-up question is always, well, you've got some of these capabilities that you're pushing out there. How should we think about the potential to monetize this? Are these just table stakes capabilities? Is it a new skew? And obviously, timeline-wise, super early, so I don't imagine a lot of revenue flow through, but how should we broadly think about the topic of monetization? Majority will be through AI credits, so usage-based pricing, usage- based revenues. What we are seeing today and what we learned from virtual role play is that customers want initial allocation of credits to test it out. They want credits to do 50 role plays. And from there, they're testing out the value because all of this is brand new. This is, you know, we're in unknown territories. When a customer buys an LMS, they know exactly what they're getting. They've used an LMs before. The categories existed forever. These are features and functionalities that are new. They're exciting. And we believe in the value, but the customers don't know the value yet. So we want to get this in the hands of the customers, give them free credits, and then start monetizing from there. So if you're asking me to start thinking on when do we see monetization pick up on price a little bit more, we're probably thinking in back half of 27. Understood. Makes a lot of sense. And another, we haven't touched on profitability yet, but Docebo has made significant progress in terms of driving margin expansion. Where are we on that journey? Has the low hanging fruit been plucked? Do you still see potential headroom there? And obviously, the natural follow on to the conversation we just had is AI could be amazing. I'm sure you guys are seeing some great advances, but there's also a cost to it, both from an external and an internal perspective. How do you balance that? Is there still room for margin improvement with that as a potential overhang? Yeah, so we got it to about 20% EBITDA margins for 26. Last year, we were at 18. We've gone sort of from zero to 20% over the past couple of years. Generally, if you look at consensus, it's about 22% for next year. And that's roughly aligned with what we're thinking of, you know, 2% EBIDA leverage per year until we get to our midterm EBITDA guidance that we put in our investor deck of closer to 27. Where we see that leverage coming from is number one, G&A. So we're still at about, let's call it 13% of revenues when we adjust out all the transaction costs. And our guidance is closer to 9% to 11%. So let's use the midpoint of 10% and we got 3% leverage from there. And we're really focused on G&A perspective, keeping that flat from a dollar perspective. Of course, we have inflationary increases here and there, but really focused on getting leverage in G&E. R&D, you touched on it. It's probably an area where we're not going to get significant leverage. While we're seeing better productivity, coding faster, better than ever before tokens are expensive and the amount of stuff that we want to do continues to grow you know if you think about it uh this kind of goes against the argument of being able to vibe code things is that you know the constraint for software companies has always been that we've never been able to hire as many developers as we want and we've always had a three-year roadmap you know we're still struggling to hire As many developers As we want there's a lot to do. There's a lot of stuff we want to build. There is a lot of stuff our customer needs. We're going to continue to invest in R&D. Sales and marketing perspective, we're about, let's call it 33% today. That's another area where we think we get leverage out of. Our average sale price is going up year and year, which means quotas go up and our sales force becomes more productive uh there's an embedded more fixed structure within sales and marketing you have your sales ops you have sales enablement event event spend is a little bit more fixed year over year so we do expect you know as revenues increase we could gain leverage in sales and marketing and certainly you know ai you know it does help in marketing and rev ops in certain of those areas. So that's really where we see the leverage coming from. Understood. Now, I wanted to circle back to another new initiative that you touched on earlier. So you guys are verticalizing the business a little more, which is natural as you start to scale. You called out healthcare as your next vertical. I guess, how should we think about the investments needed to kind of break into healthcare more meaningfully? Do you have some anchor points that could potentially bring you into those accounts to serve as references that hopefully kind of speeds up the rollout versus maybe the cold start that you guys saw in public sector? Yeah, it's going to be a much faster return on investment in healthcare. So we actually already have five percent of our error in healthcare so we've really we've gained these customers not by doing anything special it's more of inbound falling in our laps but what's also interesting is that you know we have a number of our top 20 customers that are healthcare customers so you know that that kind of just started our thinking of you know the opportunity is big and then when we look at, you know, we have the benefit of looking at all our data points by industry. You know, when we're looking at our data, we're going to be able to look at we look up wind rates, we look out demands. And we've known for years that our wind rates are lower in healthcare, because our product is not perfect for the healthcare segment. There are niche requirements from a compliance perspective. There's niche requirements for workflow perspective that are only applicable to healthcare. And it only makes sense to build those if you're going to verticalize healthcare. And, you know, for example, in pharma, if your platform is not GXP compliant, which means essentially every update you do could be verifiable in the future, you essentially can't sell it to pharma. So because healthcare is so niche, there's not a lot of players, the competition is lower and it's a big space there are a couple of learning companies that exist in the market all they do is health care and they're about the same size as docebo so the opportunity is big from an investment perspective you know we've never been a company where we go crazy on investing before we really have proof points so we're making an investment of let's call it 10 to 12 people throughout product, marketing, and GTM. And we're going to go through that investment for the next 6 to 12 months and see how it goes. And we'll increase and decrease investments as we get success or future data points. Got it. And then when I look at some of your KPIs, as you guys have made a lot of progress on ARR per customer, how much of that is, like you guys Have gravitated towards larger customers. How much of That is more of a, you know, I think an ARPU dynamic where maybe you're attaching more to customers. You're obviously cross-selling better. You're upselling better, and we'd love to understand some of the motions that are driving that and whether or not, you Know, there's further improvement there. it's a little bit of everything so just to put some numbers into what you said in 2020 28 of our error are represented customers who pay us 100k or more today that 28 is 56 so we've clearly moved up markets uh we today if a prospect comes in and they let they have less and 300 customers or 300 employees, we essentially don't serve them. We essentially say, Docebo is not the platform for you. We're not an SMB platform. Pass them on to a partner or let them find another LMS. We've really moved up to the enterprise market. And when you move up in the enterprise marketplace, your platform becomes more complex. It's just natural. The bigger the company, the bigger the workflows, the more the customization. and when your product gets more complex it's harder for a company with 300 employees to use that lms they need a simple tool where they can onboard in a week and has two buttons to press um so we moved on market and another thing is that you're right we've we've attached more products you know we've we've innovated but we've also acquired i do think you should continue to see our acv go up you know when i talk about acquiring skills and doubling the acv on the onset of a new customer that alone is going to drive incremental error and then another thing is that you know frankly our error with day force on our shared customers was lower so as that customer base turns out, we're seeing ACB naturally come up as well. Understood. And on that customer tiering dynamic, we've gotten all the positive feedback on the enterprise market. I guess, how is the down market piece of your business performing? I guess it'd be more mid-market at this stage rather than the small and mid. Yeah, we still have about probably 20% of our area below 50K, which we call more SMB. That's probably more of a, let's call it flat growth type of cohort for us. Lower gross retention, lower net retention. And why we've always emphasized enterprise and why we're always emphasizing as we move up market you know our our metrics will naturally improve is because we've always seen the net retention and gross retention significantly improves in that market so we posted in our investor day a metric that when we look at those two different cohorts there was about a nine percentage points in our difference on average over the past three years so it's clearly you know when we think about customer lifetime value in the enterprise we're seeing that being significantly more. Got it, got it. And at the start of the year, Docebo announced a 10% restructuring. I mean, it seems like it's a little different of a restructure than maybe like what we're used to typically. Maybe just kind of update the room in terms of what you guys are trying to achieve there. Where is some of that reallocation going? What are the potential benefits that you see once you guys complete that process yeah so we announced that at the beginning of q1 and it was completed within the quarter so we're fully through that so the history of docebo is that the company was born out of milan and all our r d was done at a milan so we had 100 of our developers but we also had a large portion of our customer base in europe So that formula made sense. Over a period of time, Docebo really started to become successful in North America. And that revenue is now about 75% of our error. So we had a formula where 75% of our customers were in North Africa, some on the West Coast, 100% of her developers in Europe. And that formula, it just no longer works, right? You know, when you're serving a company, the West coast, Silicon Valley, and, you know, something happens and they need access to a developer, well, in Italy, they're going to sleep at that time. So we really needed to change up the mixture and have a healthy portion of developers in Milan and Toronto. Now, Milan will always be our center of excellence from an R&D perspective, but having a mixture of developers in Toronto and Milan for where we are today makes a lot of sense. And that was really the main purpose of the restructuring. Got it, got it. Another initiative that you guys touched on, which I guess initially doesn't feel like it would be, I guess it'd be more dilutive to margins than additive to revenue, at least in your term, is the idea of the forward deployed engineer. Would just love some thoughts on where you're putting those resources. How do you think that Docebo will benefit on the other side of it once you really get that program up and running? Yeah. And as I mentioned, this is an area where we're putting investments in, but this is not an area where we are hiring like 10 FDEs. It's more of closer in the lower single digits. And the thesis is, I talked about it before, where our buyer persona is not as tech savvy as some other buyer personas. So, we truly believe building agents within an LMS significantly improves your experience if you're administrator or power user but if we if we unleash agent hub without powering our users to create custom agents i think we'd be a little bit foolish to really expect them to be able to code and build their own agents now some of our customers yes they have access to maybe you know tens hundreds thousands of developers but you know if you think about healthcare who's strapped for budgets, I don't think they're going to have access to an internal IT developer. So the purpose of an FDE is to go in, talk to our top 20 customers, which a lot of are already shown interest, and be on site with them for two to four weeks, understand their pain points, understand where they spend the most time in the platform, and create custom ages that will allow them to significantly improve their experience now unless you're talking about the conference calls that we will likely have ages that are applicable for a specific vertical so if you're a qsr company versus health care those ages that you need are likely going to be significantly different so the reason why we want to have an fd is yes they're to go to our top 20 customers but they're likely going to create agents that are very unique and something that we can apply to the remaining of our qsr customer base and really you know we're still thinking about how to properly monetize this but if you if you think back to what i said on credits and usage based you know the thing that's guaranteed to get monetized is that once the agent is built every time it's used that will consume credits got it got it so it it's it's one of those situations where you know down the line this this sort of the sort of a kind of a circular benefit here you're kind of helping to grow your customer and then those customers are somehow facilitating the innovation of your future product lines. Is this an area where you guys have permission from the customers to do this? Is there a possibility that they would frown upon you using some of these learnings to obviously facilitate success of some of their competition? Yeah, it's an interesting question, and we'll probably have to learn. But if you think about SaaS, like today, there are customers who pay us for custom development or custom workflows. But because we are a SaaS platform, that feature is available to all 3,500 customers, even though that customer paid for it. That's kind of just the concept of SaaS is that once it's in your code base, it's available to Allier customers. So what will be unique about an agent being built with a customer is that every agent will be connected to data sources that are unique to their customer. So, for example, QSR number one, they'll have Salesforce, ServiceNow, let's think about another one, Zendesk. And, you know, the agent may be doing something specific that requires to tap into those different data workflows. But we're not interested in what it's connected to. We're interested in like the backbone of what the actions it's taking. uh so what what we're thinking of really the custom build that we're interested in is not necessarily the connectors which is important for the customers but really like what is that agent doing is it is it automating you know looking through everyone's content to say you know you haven't updated your insider trading policy in the past five years you know there's there's very different things and you know that's what we'RE interested in like what does the what does the agent actually taking? And that will be proprietary to our customers. Got it. Got it. And then one thing that we're commonly asked is, OK, what is the capital allocation strategy going forward? You guys made a big acquisition with 365 Talents. You guys have done a couple of SIBs. As we move forward, where is management's priorities in terms of use of cash? So if you take a step back, we have about 45 mil of cash on the balance sheet. We have 90 mil of debt. So we're running about 45 ml of net debt with EBITDA projected to be 55 mil this year. We announced 70 mil SIV, which expires near the end of August, and 60 mil of will be funded through debt and 10 through cash. Now, at the time when we announced our SID, our stock was lower, and we priced it at about 10% premium, but all the premium is gone. So a rational investor would probably think that SID is not going to get filled, which leaves our current balance sheet as is. Where are our priorities right now? Now, a lot of it depends on the variables. You know, we're not a company that is very static in thinking, you know, where capital allocation changes on a daily basis. But, you Know, the number one thing is like, where's our stock price? You know when we look at our stock Price when we announce the SIB relative to the EBITDA we're generating, you Know, it's closer less than you know 10x EBITTA. So, you Know, we are a believer in the company. we're seeing accelerating top line revenue growth we're seeing EBITDA margin expand and we just believe that the valuation in at the current market is undervaluing the story and you know if the stock price continues to be at those levels we will have capital allocation dedicated towards buying back shares from an M&A perspective while we've done two M&As this year Docebo is never going to be a company that is aggressive in m&a it's just not in our dna we're gonna take the next couple quarters really focus on integration focus on execution of course opportunistic m&а you can never predict but if you were asking me are we going to buy a company in the next four quarters probability is low so that tilts capital allocation towards investing back in the business which we're doing in buying back shares. Got it. That is super helpful. And with that, we are up on time. I'm fortunately at the end of my questions as well. Brandon, thank you so much for all your insights today. Mike, always good to see your friendly face on the other side as well, and to the audience, thank you for joining. Thank you for participating, and with that have a good day. Thank You.