Docebo Inc. Q3 FY2025 earnings call

• Mid-market business exceeding performance due to new leadership team, framework, processes, and improved pipeline. • EMEA performance exceeding expectations with key logos signed. • Core business retention continuing to improve. • Dayforce wind-down accelerated faster than expected. • AI initiatives with focus on monetization through categories like higher annual price increases and separate AI-specific modules. • Enterprise wins including Veolia and Amazon expansion, with focus on system integrator partnerships. • FedRAMP progress leading to wins in federal and SLED markets.

The business grew 14% year-over-year excluding the Dayforce business. Mid-market business exceeded performance and expectations, EMEA performance also exceeded expectations with key logos signed, and core business retention continued to improve. Dayforce's turn accelerated faster than expected, with Dayforce expected to represent approximately 3.5% to 4.5% of total revenues in 2026, 1% to 2% in 2027, and become immaterial thereafter. Revenue contribution from mid-market, EMEA, core business, and Dayforce are relevant components.

• Dayforce expected to be approximately 3.5% to 4.5% of total revenues in 2026, 1% to 2% in 2027, and immaterial thereafter. • Expect strong quarter 4 in enterprise segment. • AI credit-based system to be rolled out with AI capabilities for monetization. • Continued growth expected in government pipeline with wins in federal and SLED markets.

• Government shutdown could impact pipeline creation temporarily. • Deal elongation in the market could affect enterprise deals. • Dayforce wind-down could impact customer count and revenue composition.

Q: Could you unpack the components of ARR growth excluding Dayforce?

A: The business grew 14% year-over-year excluding Dayforce, with mid-market, EMEA performance, and core business retention contributing.

Q: How does FedRAMP impact the opportunity, especially with government shutdown?

A: FedRAMP allows winning federal and SLED business, pipeline built despite shutdown, and expected to continue growth.

Q: Update on enterprise side, pipeline, sales cycles, and budget flush?

A: Enterprise segment has strong customer counts and ARR from large customers, quarter 4 is strong, and system integrator partnerships support deals.

Q: OEM wind down trajectory and AI benefits?

A: Dayforce wind-down to be immaterial, AI benefits in retention, price increases, and separate AI modules.

Q: Churn, retention, and AWS Skill Builder roll-off?

A: Retention improved, lapped Thomson Reuters downgrade, AWS Skill Builder to disengage by December 31.

Q: EBITDA margin, OEM ARR growth, ACV, and customer count?

A: EBITDA margin at 20%, ARR growth excluding Dayforce, ACV growth due to Dayforce wind-down, customer count down due to Dayforce.

Q: AI product vision, monetization potential, and customer feedback?

A: Harmony and Creator have monetization potential, customer feedback on personalized experiences drives road map.

Q: Margin profile, federal pipeline, and mid-market professional services?

A: EBITDA margin sustainable, federal pipeline growing, mid-market professional services tied to complex onboarding.

Q: Amazon expansion and growth profile?

A: Amazon expansion in health care use cases, growth reacceleration with new CRO and CMO efforts.

Q: AI product portfolio attach rates and partnerships?

A: AI attach rates to be discussed at Inspire, technology partnerships focus on extending Docebo platform value.