Docebo, Inc. Q4 FY2024 earnings call

Product Strategy and Vision

• Docebo has new product modules like community and analytics, with early positive impact. The vision is to transform into an AI-first learning platform to address hyper-personalized, automated, experiential learning. Leveraging GenAI and Agentic AI for platform administration and business process management.

FedRAMP and DOGE

• Listed on FedRAMP Marketplace with a sponsoring agency, audit started in January, expecting ATO by end of Q3. DOGE's mandate on modernizing federal technology aligns with Docebo's offerings, as much HCM software in government is outdated.

Leadership Changes

• Brought on new leaders like Brandon Carson and Lauren Tropeano, while acknowledging departure of Sukaran Mehta. Emphasizes building leaders from within with Brandon Farber as interim CFO.

Partnerships and Go-to-Market

• Revamped strategic partnerships group, seeing increased deals with system integrators. SI-driven deals are meaningful and trending up, with co-selling strategies enhancing win rates.

GenAI and Agentic AI

• Agentic AI is a key strategy, with own proprietary AI platform as a service. Aims to create new UI for L&D execution and make agents the new integration framework and UX.

Capital Allocation

• Considering buybacks and strategic initiatives like M&A, monitoring opportunities as valuations have come down.

FedRAMP

• Expect to achieve ATO status by end of Q3 2025, enabling bidding on contracts.

Q1 2025

• Revenue baked from Q4 bookings, seasonality with bookings heavy in March. Adjusted EBITDA guidance 14.5%-15%, impacted by fewer days in Q1 and seasonal cost factors.

NDRR

• Expect NDRR to improve after Q1 2025 as customers right-size and can be grown from there, following significant contracts up for renewal in 2024.

• Potential impact of GenAI on headcount and top-line if not managed properly.
• Complex procurement processes affecting accurate deal forecasting.
• Competition in SMB space with pricing pressure and race to the bottom for logo acquisition with negative margins.

Q: Talk about adoption with existing customers and new wins of new products influencing that A: New product modules like community and analytics have been meaningful contributors, with greater expectations for future. Docebo serves over 40M users worldwide and expects 100M in next 5 years, leveraging GenAI to support upskilling/reskilling Q: Update on FedRAMP and DOGE impact A: Listed on FedRAMP Marketplace, audit started in Jan, expect ATO by end of Q3. DOGE's mandate on modernizing federal tech aligns with Docebo, as much HCM software in government is outdated Q: Update on Agentic AI offering and leadership changes impact A: Agentic AI is a new trend, Docebo has proprietary AI platform. Leadership changes involve bringing in new leaders and developing internal leaders like Brandon Farber Q: Update on larger ACV lands and expense categories A: Not focused on all-in wins from day one, using services and success org to gain trust. Sales and marketing have efficiencies with AI, headcount reduction is broad-based for more efficiency Q: Ramp-up with SI partners and pipeline breakdown A: Revamped strategic partnerships group, SI-related deals are meaningful and trending up. Percentage of SI-driven deals is meaningful but not disclosed directly Q: GenAI dynamics and risk of down-sells A: GenAI advance is accretive to revenue, not seen as a risk to top-line as it increases opportunities and stickiness Q: Attach rates of new products and pricing strategy A: New pricing model gaining traction, attachment rates broad-based across new products, all solving important use cases Q: FedRAMP timeline and contract impact A: Expect ATO by end of Q3, no material federal contracts in guide currently Q: Restructuring and AI replacement of functions A: Restructuring is proactive for future success, not cost-cutting, investing savings in new skills and initiatives Q: Capital allocation and buybacks A: Buybacks are a strategy, considering M&A and monitoring opportunities as valuations have come down Q: Q1 quarter-to-date and enterprise demand A: Revenue from Q1 bookings flows to Q2, enterprise demand healthy, demand for products has high quality with multiple use cases Q: Net retention ratio and competition A: Net retention down due to large customer downgrade and contracts up for renewal, competition in SMB space with pricing pressure, focus on mid-enterprise and strategic enterprise Q: ARR growth from current customers vs new logos in 2025 A: Don't disclose forward-looking NDRR, expect NDRR to improve after Q1 2025 as customers right-size Q: Agentic opportunities and staffing A: Agentic is nascent, continuing to invest in AI engineering and product leaders, part of five-year plan Q: Feedback on new products and potential upside A: New products like AI Authoring, Advanced Analytics, and Communities have positive traction, all have potential, focus on hyper-personalization at scale through AI