Docebo(DCBO)2024-08-08 19:50Financial Data and Key Metrics - The company has seen a significant increase in new logo ACV, growing about 70% over the past 24 months to 200 million spent on new LMS initiatives in the past three years [22] - The company is on track with FedRAMP certification, which will open up opportunities in the federal market and accelerate partnerships like Deloitte [21][23] - The cybersecurity vertical has shown strong performance, with two worldwide leaders signed recently [61] Company Strategy and Industry Competition - The company is strategically moving upmarket, focusing on mid-market, large enterprise, and government customers, while maintaining a cautious approach to the SMB segment [8][34] - Docebo is positioning itself as a platform that addresses both employee experience (EX) and customer experience (CX) needs, with 65% of ARR tied to CX/hybrid use cases [50] - The company is investing in AI capabilities to strengthen its core platform, including semantic search, content recommendation, and skills ontology management [14] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the potential of AI solutions, with customers increasingly looking for business benefits rather than flashy features [15] - The company expects to see strength in the enterprise segment and government customers in the latter part of the year, reflecting in the updated guidance [7] - The company is focused on creating value through quality investments, avoiding overlaps in capabilities, and growing market share [44] Other Important Information - The company has simplified its pricing methodology, moving from an à la carte model to a core bundle approach, which has been successful in accelerating deal cycles [16][17] - G&A expenses have been held flat or reduced over the past 6-7 quarters, contributing to operating leverage [45][47] - The company is actively working on FedRAMP certification, which is expected to open significant opportunities in the government sector [21][23] Q&A Session Summary Question: Deloitte Partnership - The Deloitte partnership is strategic, covering both government and commercial opportunities, with significant potential to impact the pipeline [3][4][6] Question: Guidance and Customer Win Activity - The updated guidance reflects strength in the enterprise segment and government customers, with cautious assumptions for the SMB side [7][8] Question: Dayforce Relationship - The legal dispute with Dayforce has been resolved, with the focus now on protecting IP, supporting revenue continuity, and preserving a good working relationship [9][10] Question: AI Monetization - Customers are increasingly willing to pay for generative AI solutions, with new offerings like AI authoring and virtual roleplay/coaching expected to drive monetization [12][13][14] Question: Pricing Methodology - The new pricing strategy has been successful in simplifying the buying process and shortening sales cycles, particularly for net new business [16][17] Question: FedRAMP Timing - FedRAMP certification is on track, with the company ready for a sponsor to take them through the process, opening up significant government opportunities [21][22] Question: Communities Module - The communities module is expected to enhance customer experience capabilities and increase average ACV, with beta programs showing encouraging results [24][26] Question: Wall-to-Wall LMS Deployments - The company is focused on addressing multiple use cases for large organizations, with 8 out of 10 new customers choosing Docebo for two or more use cases [28][29] Question: SMB Market - The SMB market remains cautious, with the company focusing more on mid-market, large enterprise, and government customers [32][34] Question: Customer Adds and ACV - The decline in customer adds is offset by the growth in ACV, with the company focusing on larger enterprise customers that drive higher revenue [36][38] Question: Capital Allocation and M&A - The company is focused on quality investments that align with its long-term vision, avoiding overlaps in capabilities and focusing on creating value [43][44] Question: G&A Optimization - G&A expenses have been held flat or reduced, contributing to operating leverage, with further updates expected at the upcoming Inspire event [45][47] Question: HCM Peers and Unemployment - The company's focus on both EX and CX use cases gives it an advantage over HCM peers, with no anticipated impact from potential higher unemployment [49][50] Question: Government Timing and Elections - The company does not expect the upcoming U.S. elections to impact the timing of government opportunities or FedRAMP certification [51] Question: SMB Customer Base - The company will continue to serve the SMB market but is focusing incremental growth on mid-market, large enterprise, and government customers [53][54] Question: Net New Wins and Channels - The majority of net new wins come from direct sales, with system integrators playing a critical role in enterprise deals [55][56] Question: Dayforce Impact - The settlement with Dayforce is expected to support revenue continuity and diversify the revenue stream through additional channel partners [58][59] Question: Pipeline and ARR - The pipeline continues to grow positively, with strong performance in the cybersecurity vertical and government sector, contributing to incremental ARR [61][64] Closing Remarks - The company looks forward to sharing more updates at its upcoming customer conference in September, where new initiatives will be unveiled [66]