Docebo(US:DCBO)2022-08-11 15:37Financial Data and Key Metrics Changes - Total revenue increased by 47% after adjusting for foreign exchange impacts, with reported revenue for the quarter growing to $34.9 million, a 36% increase from the prior year [27] - Subscription revenues were $31.9 million, representing 91% of total revenue for the quarter [27] - Annual recurring revenue (ARR) for the quarter was $138.2 million, an increase of 51% after adjusting for foreign exchange [27] - Company-wide average contract value (ACV) increased by 21% after adjusting for foreign exchange, reaching approximately $45,000 [28] - Gross profit margin improved to 80% of revenue, consistent with the prior year period [30] - Net income for the second quarter was $2.1 million, compared to a net loss of $7 million in the first quarter [33] - Positive free cash flow of $0.9 million was reported for the second quarter, ahead of plan [34] Business Line Data and Key Metrics Changes - The company added 159 net new customers during the quarter, with over 60% of deals coming from mid-market and enterprise segments [16] - Cross-sells and upsells performed well, indicating improved sales effectiveness [16] - New and cross-sell logos with ARR greater than $100,000 represented approximately 30% of net new ARR [28] Market Data and Key Metrics Changes - North America remains the strongest market with the largest greenfield opportunity, while traction in European markets, particularly the UK and Nordics, has been excellent [21] - The total addressable market (TAM) for external training in North America is estimated at $8 billion, with two-thirds being external and 70% of that being greenfield [49] Company Strategy and Development Direction - The company is focused on customer education and revenue enablement as priority investments for enterprise customers [14] - The strategy includes consolidating technology stacks and providing flexible learning solutions that integrate internal and external needs [15] - The company aims to expand use cases across customer organizations while continuing to grow in the enterprise market [62] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macroeconomic environment is causing elongated sales cycles, the demand for their solutions remains strong [7][15] - The company is optimistic about long-term growth prospects, driven by technology investments that enhance productivity and revenue generation [26] - Management expects modest improvements in EBITDA and free cash flow as they continue to optimize unit economics [36][82] Other Important Information - The company reported a foreign exchange gain of $4.9 million included in operating expenses, which is primarily unrealized [30] - Share-based compensation as a percentage of revenue was approximately 4%, considered modest compared to peers [35] Q&A Session Summary Question: Impact of macro uncertainty on sales cycle and pipeline composition - Management confirmed that the pipeline is growing despite elongated sales cycles, particularly for larger enterprise deals [38][40] Question: Update on OEM channel performance, specifically Ceridian - Ceridian continues to perform well and remains a significant contributor to the ARR story [44] Question: Details on the total addressable market (TAM) - The external use case market in North America is estimated at $8 billion, with two-thirds being external and 70% of that being greenfield [49][50] Question: Competitive landscape and win rates - Management noted increased competition but maintained that win rates remain well above industry standards [77] Question: Expectations for EBITDA and cash flow improvements - Management indicated that improvements in EBITDA and free cash flow are expected due to operating leverage and optimized unit economics [82]