Q3 2024 Docebo Inc Earnings Call
Speaker Change: Good morning, everyone, and welcome to the Docevo 3rd Quarter 2024 Earnings Call. All participants are currently in listen-only mode. We will open the line for a question-and-answer session momentarily.
Speaker Change: Analysts can ask questions by pressing star followed by the number one on your telephone keypad. We ask that analysts please limit themselves to two questions and return to the queue for any follow-ups. I'd now like to turn the call over to DOCEVO's Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.
Mike McCarthy: Thank you, Regina. Earlier this morning, Docebo issued its Q3 2024 results. The press release, which included a link to management's prepared remarks and our quarterly investor slide deck, were all posted to our investor relations website.
Mike McCarthy: This morning's call will allow participants to ask questions about our results and the written commentary that management provided this morning.
Speaker Change: Before we begin this morning's Q&A, the Chamber would like to remind listeners that certain information discussed may be forward-looking in nature.
Speaker Change: Such forward-looking information reflects the company's current views with respect to future events.
Speaker Change: Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements.
Speaker Change: For more information on the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to DOCEBO's public filings, which are available on CDAR and EDGAR.
During the call, we will reference certain non-IFRS financial measures.
Speaker Change: Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see our MD&A for additional information regarding our non-IFRS financial measures, including reconciliations to the nearest IFRS measures.
Speaker Change: Please note that unless otherwise stated, all references to any financial figures are in US dollars. Now I'd like to turn the call over to Docebo's CEO, Alessio Artuffo, and our CFO, Sukarn Mehta.
Regina, we're ready to take the first question.
Speaker Change: Our first question will come from the line of Ryan McDonald with Needham. Please go ahead.
The
Hey, good morning, everyone, and congrats on a great quarter.
Speaker Change: Alessio, maybe just to start with you, obviously the macro environment has been a tough one, but Docebo seems to continue to execute really well despite that. Can you just talk a little bit about what you're seeing sort of within the selling environment, what's enabled the company to continue to sort of really perform well, again, as things sort of continue to be elongated? And maybe talk about sort of the mix between sort of sales productivity from the direct team versus maybe support you continue to get as you expand those partner relationships. Thanks.
One hundred percent.
Speaker Change: Hello Ryan, so first let me say I am really really proud of the efforts of the Docevo team and how we've effectively been executing in what remains a stable yet somewhat challenging macro environment.
Speaker Change: Customers, for sure, continue to demonstrate appreciation for our services, for our products in particular. Our ability to serve multiple use cases remains our superpower. We are the sole company that can serve, at scale, a large enterprise's needs for both their employee experience, or EX, and the customer or partner experience, what we refer to as more CX.
Speaker Change: conclude positively a relationship with a leader in the insurance sector in Europe actually, which to me underscores the fact that our investments in partnerships and our investments in establishing our presence and our go-to-market, even outside of North America, in this particular case, it was in the dark region, are paying off and our strategy is coming together really nicely.
In terms of go-to-market more broadly,
Speaker Change: With the cutting of rates, we're seeing a resurgence of the sectors in which we have been historically you know, very very productive such as software, professional services, and other sectors where our products suit them really well. For example, associations and retail is is really performing really nicely in these industries.
Speaker Change: Look, in the enterprise space, no doubt, the deal cycle remains slightly elongated. So we are learning how to work within that environment. But again, overall, let me underscore, we have performed in alignment with our expectations and are very proud of our results.
and many more. Thank you. Thank you.
Speaker Change: Appreciate all the color there. Maybe as a follow-up, you know, in a week like this, it's probably impossible not to ask about anything government-related, but it seems like it was a good quarter in the sled and a bit in Fed. But can you just give us a little bit of an update on the progress with FedRAMP, and is there any risk here as a new administration comes in that there's, I guess, maybe a pausing in the process as you work towards that FedRAMP certification? Thanks.
Thank you.
Speaker Change: Love the question. So let me touch first on the topic of new administration and then give you an update on where we stand relative to FedRAMP.
Speaker Change: You know, what I've always loved about our technology is that, especially at times of, say, a research for efficiency and cost-cutting,
Speaker Change: You know, what better technology is available than that that allows the organizations to upskill their own workforce?
Speaker Change: You know, there's nothing more important than having people on the job, or customers, by any means, that are more competent and more ready to do the work at a fraction of the time.
So.
Speaker Change: Our platform essentially does that. It supports upskilling and re-skilling processes.
Speaker Change: We understand government agencies may be asked to do more with less. And we believe that in this environment, our products provide a natural edge against a search for increased efficiency.
Speaker Change: So that is on the more new administration side, of course, it's early days, and we will see what happens next. On the FedRAMP side...
Speaker Change: Our work has continued. Just up front, kind of to remember where we stand in our journey of certification. The chebo, first of all, is audit-ready.
Speaker Change: and what that means is we have done all our work on the so-called FEDRAM controls to ensure that our technology processes and documentation are ready for a sponsor relationship.
Speaker Change: We have been working, are working very actively, and this remains a top priority to finalize a sponsor relationship. And, you know, we remain cautiously optimistic by that. However, putting a date to that is basically impossible as this is outside of our control. However, we are cautiously optimistic on the outcome.
Speaker Change: One more thing I would like to say about this. Let me remind that while FedRAMP is a priority and we have invested on it, we are seeing
Speaker Change: Beautiful outcomes, more broadly in the government space, where we are executing very nicely in the slat part of the business and are partnering with partners like Deloitte on advancing our positioning at the market and are selling actively to error with them.
and many more. Thank you. Thank you.
Speaker Change: Our next question will come from the line of Asuthan Sukumar with Steeple. Please go ahead.
Thank you.
Suthanya, your line might be on mute.
Good morning.
Pardon me.
Speaker Change: Good morning, congrats on a solid quarter here. I just wanted to...
Speaker Change: Checking on an update on your pricing strategy. Just curious what early progress you've been seeing to date and what is some initial feedback you can share on the success side of that strategy?
Speaker Change: Yeah, good morning, Susan. Sukaran here. I'll cover this one. First, yeah, just as a reminder, when we launched our pricing in April, this is historically the company priced its customers on an a la carte basis, and we moved to what we call the core bundle pricing with incremental capabilities that are part of our core and more package. So what that effectively has meant is that in terms of the trends we're seeing, we're certainly driving a much higher value conversation of the problem that we want to solve for our customer in terms of the outcomes that we help solve for them, whether it's the customer education, onboarding capabilities, so on and so forth. And what we also drive as a result of that is aligning value to where we can extract value.
Speaker Change: meaning that in the customer education news cases, we are able to have a conversation around E-commerce capabilities, which we can monetize separately, as part of our new packages. And so, the new pricing has allowed our sales engine to drive a conversation which is value-driven. We're certainly seeing that all our new deals effectively now are priced at the new price book.
Speaker Change: As we look to 2025, you'll expect us to start in utilizing that price book for our renewal cycle, you know, with the new products that we've started, the new modules that were launched.
Speaker Change: at Docebo Inspire. It also gives us an opportunity to utilize our new price book to streamline the renewal book over time. It will still take time because the renewal book depends on when the customer is renewing and you also have to be
sensitive to their initial contract SLAs.
Speaker Change: But in general, on the net new deals, we're pretty pleased with it. You should expect that. And you're seeing that in the ACV growth, even this quarter, that we showed ACV was quite strong at $71,000. I mean, we've talked about it in the past that you can expect as a, you know, reasonable.
Speaker Change: increase in ACV as a result of how we go to market.
Speaker Change: The other thing that we're seeing also is that it increases, it helps us from a deal velocity perspective because from an objection handling perspective, you're now driving the conversation of value versus a la carte menu of items.
Speaker Change: So, very pleased on that front, and then I think looking forward to 2025, you'll see us utilize that with our new modules and expansion strategy in trying to bring as many customers as possible to the new price book.
and many more. Thank you. Thank you.
Great, thank you.
Speaker Change: For my second question, I just want to follow up on the U.S. government opportunity. I noticed recently in the headlines that one of your partners, TeraSoft, is being investigated by the FBI. Have you noticed any impact to your relationship and any impact on execution via that channel?
Speaker Change: This is one of our several partners in the government sector. We don't expect any impact in our relationship and yeah, we'll continue to monitor developments but it's pretty neutral to us. Thank you.
Speaker Change: Our next question will come from the line of Robert Young with Canaccord Genuity. Please go ahead. Hi, good morning. First place I'd like to start is a couple of times you've given us some indication on growth by cohort. I think you said that the enterprise cohort is growing 30 percent or greater at the investor day. Can you update us on that and maybe just give us a sense of where the different cohorts are?
Yeah.
Speaker Change: Yeah, hey Rob. So Karan here. In terms of the course, I think you might, you will see that in my prepared remarks, I've mentioned it. So you'd see enterprise segment, which is our customers and the large in the market. We grew that segment at 25% this quarter. And then we saw some, you know, on the SMB side, I think it's pretty similar to what we've seen in the past.
Speaker Change: mostly in the single digits growth. But I think as we look forward, you can expect that even in Q4 and forward that.
Speaker Change: You'll see more strength in the higher end of the market. And as we will continue to monitoring how the rate environment impacts the lower end of the market. But there is an opportunity or potential that if there's.
Speaker Change: Some stabilization and confidence in the buyer, maybe the SMB market may perhaps start participating a bit more in 2025.
Speaker Change: Okay, so then I guess the obvious follow-on is, I mean, 25% is the downtick, so what would be the the driver there? Is that tempers or those long-term expectations? Just maybe give it a little more detail there.
Speaker Change: Yeah, it's just generally a seasonally, you know, we think about Q3 as a seasonally stock order. Last year, also just as a reminder, Rob, we had the large deal on Google that was part of our marquee deal so that there's a bit of a calm in the prior two.
Speaker Change: Our next question will come from the line of Josh Bayer with Morgan Stanley. Please go ahead.
Speaker Change: As we head into 25, are we going to start to see any headwinds show up from some of those prior changes around Ceridian Dayforce?
Morning, Josh.
Speaker Change: Our partner strategy continues to be very strong. As we mentioned in the past, we brought on board a new executive to lead our strategic partnership efforts. That includes our OEM channel.
Speaker Change: When we think about partnerships, we think about OEM, we think about system integrators and we think about partnerships that are creative from a go-to-market standpoint in terms of product capabilities, in terms of product extensions. We've been working on all these fronts and are quite pleased with our return on the business development side. I believe in the quarters to come, we will continue to expand our wallets of significant partners and we will update you as we go through it. But I would say, you know, from a results standpoint, our focus has been to support.
Speaker Change: These large enterprises that we're working with, and really the relationship with the SIs has been a tremendous area of focus for us, and the developments with the Accenture and the Deloitte have taken a lot of our time, but we believe this time is very well spent and with great ROI.
Speaker Change: And I think, Joshua, the second part of your question, my apologies, there was another around pricing.
Speaker Change: No, I think that's helpful. But Sukaran, I would ask you...
just to
Speaker Change: you know not to guide but maybe the opportunity to help shape analysts thoughts on growth trajectory ahead like the one hand you have 18% ARR growth this quarter on the other you guide it to 14% revenue growth in Q4
Speaker Change: Is there a reason to expect stabilization in 2025 from a growth perspective, more deceleration from that Q4 exit rate, like any thoughts on the trajectory there?
Speaker Change: No, yeah, Josh, I can give some color. I think, as you know, we'll provide our annual guidance for 2025 when we report in February, but I think, I think the way to shape it first is qualitatively is that, you know,
Speaker Change: The focus in 2025 will be coming from a perspective of enterprise segment being the most important, especially on the external use cases, customer experience use cases.
Speaker Change: You know, Alessio spoke about some investments that we're making around are not just FedRAMP but around a SLED market, and that's important as we look into 2025.
Speaker Change: with a bit of delay perhaps on the FedRAMP that we just spoke about.
Speaker Change: Our next question will come from the line of Richard C. with National Bank Financial. Please go ahead.
Speaker Change: Yes, thank you. It's sort of along the similar question. Can you maybe help us understand...
Speaker Change: How the sales and marketing organization is structured or organized into the different markets you're pursuing? So you've got large enterprise, you have sort of small slash mid. Are they kind of all under the same group? Do they have different groups? Like just trying to understand the mechanics of how that works.
Sure. So, you know, the setup is...
and many more. Thank you. Thank you.
Speaker Change: The international market is primarily driven by the countries. So, relative to international markets, we have the concept of regional allocations, whether it's UK and Nordics, France and Benelux, South India.
Speaker Change: and our APOC or Asia-Pacific region, sorry I forgot our TAP region where we're seeing by the way great great results to date.
Speaker Change: And with regard to our biggest market opportunity in North America, where of course we don't have the complexity of dealing with multiple languages and multiple cultures, our design is pretty straightforward and typical, where we have our business development organization that works to expand and grow our funnel in alignment with our revenue marketing function. These are the organizations that are really filling in our funnel with combined GTM activities.
Speaker Change: And then, on the sales execution side, those that are in charge of actually winning the deals are account executives, account managers, and global account directors that specialize in working through the pipeline. And they are set up by segments, where our primary segments are the mid-market segments and the enterprise segments, the ones that we are the most focused on.
Speaker Change: In, as a supportive unit, we have an organization of partnerships.
Speaker Change: And then we have vertical initiatives. The one vertical initiative that we began more than a year ago has been our government effort, which runs
Speaker Change: at each unit, given the very specific GTM of government and the skills that are required, both in flat and fed. And as we continue to grow, our organization will continue to evolve. There are different moments in the life of a company with different strategies, and those strategies typically reflect on how you go about designing the sales org, seeking more efficiency, that's always our prerogative and our priority, and focusing our spend and efforts where we believe there is a higher chance of winning, where we have higher win rates and higher commission.
Okay, thanks. And my second question.
Speaker Change: When you look at the sort of feature set you have, it seems to me that one of the most prominent is around AI authoring and helping create content.
Speaker Change: Is that what you feel from your customers you speak to and is that the biggest pain point? And from a cost perspective, how much does that actually help them save?
Speaker Change: in terms of using something like AI authoring and what is the margin profile and something like that look to the table.
Speaker Change: and Leslie audience mentions, are looking for the authors of Elleninson Artoff's most recently edited films. The conservation staff have also collected parts of amazing history, of voices, of documentaries and history that come out of their very own ared up spare insertion and visual adaptations of what they saw in the fields past, present and future. Two thanks to Elleninson Artoffo, Michael McCarthy and Claudio Erba and Please, also a special shout out
Speaker Change: AI authoring is the evolution of the shape of shape, a module that we've launched years ago and that we have reshaped to meet better the needs of customers.
Speaker Change: Quite simple, frankly, to quantify once we are paying customers on it because it's quite simple to demonstrate our
Speaker Change: Content production cycles that tend to be very heavy on the cost side can be streamlined and automated thanks to AI.
Speaker Change: We're equally excited about products, frankly, that we have launched and what we are seeing return in the market. In the past few months, we've launched, respectively, Insight.
Speaker Change: which is our advanced analytics technology that helps enterprises really power a BI technology within the LMS and run very complex, yet streamlined reporting needs.
Speaker Change: and Communities, which plays into our CX, Customer Experience, posture and allows companies to run a community-high interactive within the LMS. We have deep conviction in these two and we have sold units and dollars.
in accordance with our ambitious plans and expectations in Lofa.
Speaker Change: I would say that one of the reasons why I'm super excited about it is not just the capability to create content, but I view it as an integral part of our future vision of a company that focuses on learning and knowledge transformation,
Speaker Change: is going to be the number one asset that every company has available, and transforming knowledge
Speaker Change: into instruction and into learning is going to be the big opportunity.
Speaker Change: Offering is the glue that allows us to connect the knowledge to transforming it in instructional learning. And that is just a component of what will be the achievable powerhouse of the future.
Speaker Change: Our next question will come from the line of Aaron Kyle with CIBC. Please go ahead.
Speaker Change: Hi, good morning. It's Erin Kylon for Stephanie Price. In your prepared remarks, you call out partnerships with those offering services complementary to LMS. Could you just dig into that strategy a bit more? And you talk about buy, build, and partner. Is that also the way you would order those in terms of priority?
[inaudible]
Hello Stephanie.
for sure.
We.
Speaker Change: We see a tremendous opportunity in the market. Part of our vision is to become a more holistic partner to our customers. And it's not just our vision. That's what our customers are asking us to be better at. In 2015, when we listened carefully to the market as a much smaller company, we listened to customers who said to us, we'd like to do more within LMS than just delivering the training for our employees.
Speaker Change: We listened to that feedback back then. We made a conscious bet on our product and we developed CX capabilities, and that remains to date our best investment, because it has allowed us to gain market share that most LMS players did not see for many years to come. Similarly, our idea of listening to customers and listening to their needs of doing more,
He is a good parlor today.
Speaker Change: We wanted to solve more problems for our customers because the learning tech stack is very fragmented. Enterprises are known to have contracts in place with thousands of providers to solve what fundamentally is a comprehensive learning need for various types of audiences in the organization.
So, of course, the...
Speaker Change: In an ideal world, if all things were possible, we would snap our fingers and have all these capabilities at hand from day one tomorrow, but that's not the way it works. And the way it works is, we will...
Speaker Change: prioritize building what we have deep conviction and high synergies with our products.
Speaker Change: We will continue to partner where we think there are options that
Speaker Change: are synergistic and that we can establish product innovations with commercial alliances attached and why not? We will capture opportunities inorganically in the market for technology we believe are merit and we focus on very healthy quality assets that we can leverage our cash to buy and improve our market position with that.
Speaker Change: okay thank you that's helpful color there and then maybe I just have a modeling question
I meant to say Aaron, I apologize.
Speaker Change: That's okay. That's okay. Thanks, Alessio. My other question is just on the modeling front. The free cash flow, it was a bit lower than we had expected in the quarter, and I see that's working capital driven and impacted by the timing of some payments and some bonuses. My question is, is that a seasonality thing? Like, should we be modeling Q3 as a negative change in working capital going forward, or how should I think about that?
Speaker Change: You'll always find our free cash flow will be give or take plus or minus 1% to adjusted EBITDA. What you're pointing out is, yeah, it's just basically our annual bonuses are now paid semi-annually. So that's just something you should just factor in as you look forward or going forward from a free cash flow perspective.
But on a trailing 12-month basis, there's no difference.
Speaker Change: Our next question comes from the line of Daniel Chan with TD Cowan. Please go ahead.
Speaker Change: Hi, good morning. As you wait for FedRAMP certification, what's your confidence that you're going to be able to participate in some of the large RFPs that are coming to market? You mentioned that the Veteran Affairs RFP came out around your Inspire conference, so what's your level of confidence you're going to be able to participate in these large opportunities?
and many more. Thank you. Thank you.
and when they come out.
Speaker Change: Yeah, I think Dan, the only thing, Alessio spoke earlier, there was a similar question that I'll add is, I think if you look at the infrastructure within the government, government organizations,
Speaker Change: We spoke about it, I think, at Inspire a bit, but...
Speaker Change: You will find that these are organizations that are sitting on very legacy old solutions that have to be modernized just because they can't even sustain their current
Speaker Change: Operational Practices. Forget about the advancements in technology that have happened over the last 20 years. So a lot of the solutions that
Speaker Change: Some of these agencies are utilizing today have been built on Moodle and legacy platforms that are just not sustainable to even to, you know, operate in the, and as you look at what Alessio just spoke about the, you know, the potential and looking for efficiencies in government, technology is going to be an important factor in terms of solving that productivity efficiency that.
Speaker Change: Thanks for that. Switching gears, new logo ACV came in flat at about $71,000. Just wondering whether this is a level we should expect the ACV to stabilize at or whether there are levers to take that higher.
Thank you.
Thank you.
Speaker Change: Now, excuse me, it's over a quarter, but what you're seeing is...
Speaker Change: that as we move up market, the pipeline is also increasing up market, but that's also showing in terms of the ACB strength, even in Q3. I think, yeah, look, going forward, you know, it is, it's the way the pipeline also is shaping and generally how we go to market from a mid-market and large enterprise perspective.
Speaker Change: And with the changes we've made in the pricing, you can expect that we should...
Speaker Change: shows some consistent strength in terms of the size of the DLC. We are landing, but as we said, you know, it's a story of segments too. And so, you know, if you think about the segments that we had historically, the more and more you move away from SMB into the mid-market and enterprise, you should see, you know, us continue to show strength and hopefully increase this steadily in the next few quarters.
Speaker Change: Our next question comes from the line of Kevin Krishnarathne with Scotia Bank. Please go ahead.
Kevin Krishnarathne: Hey there, good morning. I joined a bit late, so apologies if this has been asked, but for Sakaran...
Kevin Krishnarathne: Can you comment on your ARR booked trend so far through Q4, you know, relative maybe to last year, and can we expect, you know, typically you see a pretty good bump in Q4, sort of like 12 million bucks, I think, the last couple of quarters. Do we expect something?
Kevin Krishnarathne: that trend to continue? Or is there something else going on? Because in your script, you talk about, you know, elevated levels of scrutiny for the foreseeable future, just any color you can give us on what you're seeing. Thanks.
and many more. Thank you. Thank you.
Yeah, Kevin, morning.
Speaker Change: The way to think about, you know, firstly, I'll say that our pipeline, as you understand, is mostly heavily in these quarters and future quarters in the mid-market and large enterprise as we, you know, are driving a pretty high pipeline in those segments. And the commentary that we provided is to kind of highlight that some of these deals, they are taking longer, but we're seeing, you know, our execution consistently improve. As we guided for Q4, we will provide the next year's guidance when we kind of report February, but as we, you know, uplifted our guidance for revenue.
Speaker Change: You'll see that we are pretty comfortable in terms of our 2024 targets.
Speaker Change: And as we look into 2025 and what that bookings will come as a result of our Q4 quarter, we'll provide that highlight in early 2025. But generally, the way to think about it going forward is that, you know, the mix of the business is meaningfully in the
Speaker Change: a large enterprise cycle and and that certainly is a factor in terms of how we when and how we close some amount of those deals and and that that should also be hopefully an opportunity to maintain our growth as we look forward and and potentially show some improvements in our ACV.
Speaker Change: I appreciate that and good quarter. Thanks. I'll pass the line.
Thank you. Thank you.
Speaker Change: As a reminder to ask a question press star 1 and our next question comes from the line of Martin Toner with ATD Capital Markets. Please go ahead.
Thank you.
Hi, thanks for taking the call.
Speaker Change: Just wondering, in the prepared remarks, you used the term improving pipeline.
Speaker Change: You've talked a little bit about it over the course of the call, but just wondered if you could just revisit it and give us a little more depth into why you put that into the prepared remarks.
Yeah, um...
Speaker Change: It's a story of focus, Martin, a focus of our engine that I have described before when there was a question prior about organizational set-up, and we have over time
Speaker Change: continued to learn operationally how to allocate our resources and efforts in a more narrow way where we are focused. This is no easy task when, you know, for many many years we were operating across the SMB, mid-market and enterprise space.
Speaker Change: towards a more focused mid-market and enterprise outcome, which in return will, you know, have resulted in marginal improvements in the pipeline. Because our units are bigger.
Speaker Change: and because the customer profile is more in line with what we're looking for. I would add to that that...
Speaker Change: One of the tactics that we are implementing more and more is the so-called ABM approach where we are putting quite a bit of effort in strategic revenue analysis of our top
Speaker Change: performing industries and verticals, and carving up territories accordingly, across the border, from demand to execution. Again, that is with the objective of creating better unit economics.
Speaker Change: in terms of cost for sure, but also in terms of improved pipeline. So we're pleased with those efforts. I believe that we have a long way to go more. I believe that we have an even greater opportunity. And as we continue to launch new products and establish new partnerships and increase our addressable market as a result, you know, the opportunity ahead of us is really exciting.
[inaudible]
Speaker Change: That's great. Thank you very much, Alessio. I'm going to be in Atlanta soon, so I'm going to hit you up for some restaurant records.
Let's do it! All right, thank you.
Speaker Change: Our next question will come from the line of Akira and Switheren, with eight capital. Please go ahead.
Speaker Change: Hey, good morning guys. Congratulations on the quarter. With yourself as CEO, Alessio, and a recently promoted CRO, there's obviously been some shuffling in senior leadership this year. I wanted to ask you broadly on any structural tweaks you've made that's seen results, and also can we have an update on what your hiring priorities are across different teams into next year?
Speaker Change: and many more. Thank you. Thank you. Thank you. Thank you.
for sure
Well, look, first of all, I am...
Speaker Change: I'm super excited to be in the permanent CEO position and I am so grateful to the team that I work with closely every day, whoever the champion and for players who are bored and investors from the trust they put in me.
Speaker Change: In terms of decisions and people, you're right to think that one of my top priorities is the focus on people.
Speaker Change: People, more broadly, as are the champions, every employee of the company, but for sure assembling the eight-layers team that I work with every day. In the first few months from my appointment,
Speaker Change: I was very happy to welcome to the business a few new executives, a new chief of staff, Noel Miller, a new EVP of corporate development and partnerships, Travis Burke. More recently, a new MVP in product management, Andrea Sibieri.
Speaker Change: And very critical to our post-market execution, the new Chief Marketing Officer, Alex Talabovitch.
and Shabnam Mohamed.
Speaker Change: Is there more to come? Look, we're always looking to improve our organization, we're always looking for areas where we can do things better, and so I'm really proud of the team that we've assembled, but we're never happy, never good enough, and we look for opportunities to strengthen ourselves, both in people, products, and services.
Speaker Change: Appreciate the color there. And that's my second. Can you discuss the new communities product and how adoption and feedback has been since that launch and more broadly how your appetite or pace for M&A has changed up given that growing meaningful free cash flow you mentioned?
Speaker Change: Absolutely, great questions. Communities. Communities have me really excited. As you may have learned over time in the earnings call, you know, we've always been very enthusiastic, so to speak, of our CS posture, meaning our ability to serve our customers, to enable their own customers, partners and external audiences.
Speaker Change: and the talent that was also of high quality and brought it in the fold in the Cervo and continue to develop and we've recently released the community's product.
Speaker Change: The beta involved dozens of customers at the table, all showing great signs of engagement during the beta program.
Speaker Change: One of the things that communities excites me tremendously is that whilst its main focus
is one
of Addressing the Needs of External Audiences.
Speaker Change: We found in the market that there are many organizations that actually want to implement communities for their own internal use cases as well.
Capabilities.
And now, further, I will tell you one thing that...
Speaker Change: It's very factual. We have several thousand customers, Autocevo, interacting every day with our own community technology. Our desire is to continue to drink our own champagne, to show to our customers, our prospects, how Autocevo leverages and makes a company better using a community technology. We have years now of history.
Speaker Change: of doing that. We have developed best practices. So not only we've developed the product communities that is strong, but we also have the expertise to go out there in the market and showcase how you actually implement it and that you have a really good return on it by having done it.
On the enemy front, on the enemy front...
Speaker Change: We are, you know, first of all, I would say job number one is a very clear excuse.
Speaker Change: a very clear thesis of where we want to go, what we want to do, when and under what circumstances. That to me is the job number one, it's part of the
Speaker Change: Drawing is a clear vision for our company, which we believe that we have the very crystal clear.
Speaker Change: M&A are a tool at our disposal. Our financial profile is elite. We are positioned really well with no debt and very healthy cash on the balance sheet, and more importantly, a free cash flow profile that supports M&A efforts now and in the future.
Speaker Change: We are active in the market. We look for opportunities, but we're very selective. The opportunities we're looking for are a creative story, they are value creation for our customers, and the companies we are...
Speaker Change: interested in as a, you know, positive to neutral profile to our existing balance sheet, but again, more importantly, they have to be good technologies and healthy businesses.
Speaker Change: We will see. We will keep you updated as things evolve, but we're very excited.
Speaker Change: That will conclude our question and answer session and I'll now turn the call over to Alessio for closing remarks.
Alessio Artuffo: Thank you very much. We are really pleased to report another successful quarter, marked by consistent execution and profitability.
Alessio Artuffo: We are on a trajectory to become the complete AI-driven learning and knowledge platform used by enterprises for their end-to-end learning needs. The world will learn with the channel.
Alessio Artuffo: This position will increase our term and strengthen our position of innovative and differentiated companies. Thank you for your time. We look forward to updating you when we report Q4 results in February. Thank you.
Speaker Change: Ladies and gentlemen, that will conclude today's meeting. Thank you all for joining, and you may now disconnect.
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