Q3 2025 Docebo Inc Earnings Call

November 7, 2025

Mike McCarthy: Good morning, everyone, and welcome to the Docebo Q3 2025 Earnings Call. All participants are currently in a listen-only mode. We will open up the lines for a question-and-answer session momentarily. Analysts can ask questions by pressing star followed by 1 on their telephone keypads. We ask that analysts please limit themselves to 2 questions and return to the queue for any follow-ups. I'd now like to turn the call over to Docebo's Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.

Speaker #3: Good morning , everyone , and welcome to the Docebo Inc. Q3 2025 Earnings Call . All participants are currently in a listen only mode .

Speaker #3: We will open up the lines for a question and answer session momentarily . Analysts can ask questions by pressing star , followed by one on their telephone keypads .

Speaker #3: 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 Docebo Inc. vice president of Investor Relations Mike McCarthy .

Speaker #3: Please go ahead, Mike.

Speaker #4: Thank you . Earlier this morning , issued its Q3 2025 results . The press release , which included a link to management's prepared remarks in our quarterly investor slide deck , were all posted to our Investor Relations website .

Mike McCarthy: Thank you. Earlier this morning, Docebo issued its Q3 2025 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. This morning's call will allow participants to ask questions about our results and the written commentary that management provided this morning. Before we begin this morning's Q&A, Docebo would like to remind listeners that certain information discussed may be forward-looking in nature. Such forward-looking information reflects the company's current views with respect to future events. 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. For more information on risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Docebo's public filings, which are available on SEDAR and EDGAR.

Speaker #4: This morning's call will allow participants to ask questions about our results and the written commentary that management provided this morning. 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 #4: Such forward looking information reflects the company's current views with respect to future events . 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 #4: For more information on risks, uncertainties, and assumptions relating to forward-looking statements, please refer to the tables in public filings which are available on CD-ROM and EDGAR.

Speaker #4: During the call , we will reference certain non-GAAP financial measures , 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 .

Mike McCarthy: During the call, we will reference certain non-IFRS financial measures. 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. 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, Brandon Farber. Operator, we're now able to take questions.

Speaker #4: Please see our MDA for additional information regarding our non-IFRS financial measures , including reconciliations to the nearest IFRS measures . Please note that unless otherwise stated , all references to any financial figures are in US dollars .

Speaker #4: Now , I'd like to turn the call over to Docebo Inc. CEO Alessio Arturo and our CFO , Brandon Plummer . Operator . We're now able to take questions .

Speaker #3: Thank you . Just as a reminder to ask a question , please press star , followed by one on your telephone keypad . And we ask that you please limit yourself to two questions and return to the queue for any follow ups .

Mike McCarthy: Thank you. Just as a reminder, to ask a question, please press star followed by one on your telephone keypad. We ask that you please limit yourself to 2 questions and return to the queue for any follow-ups. Thank you. Our first question comes from George Sutton from Craig-Hallum. Please go ahead. Your line is open.

Operator: Thank you. Just as a reminder, to ask a question, please press star followed by one on your telephone keypad. We ask that you please limit yourself to 2 questions and return to the queue for any follow-ups. Thank you. Our first question comes from George Sutton from Craig-Hallum. Please go ahead. Your line is open.

Speaker #3: Thank you . Our first question comes from George Sutton from Craig-hallum . Please go ahead . Your line is open .

Speaker #5: Thank you . Nice results . So it all comes down to RR . So I wondered if we could start there . It was up two and a half .

George Sutton: Thank you. Nice results. It all comes down to ARR. I wondered if we could start there. It was up $two and a half million sequentially. Can you just unpack the components?

Speaker #5: Million sequentially . Can you just unpack the components ?

Alessio Artuffo: Morning, George. Alessio speaking.

Speaker #6: Maureen George , Alexa speaking . As you are suggesting , we are quite pleased with the results this quarter . The way we think about it is our business actually grew 14% year over year by excluding the business and I understand that we haven't disclosed this in the past , but I would add to that that this is the second sequential quarter in which we've seen this growth happening .

Alessio Artuffo: Morning, George. Alessio speaking.

George Sutton: Morning.

Alessio Artuffo: As you are suggesting, we are quite pleased with the results this quarter. The way we think about it is, our business actually grew 14% year-over-year by excluding the Dayforce business. I understand that we haven't disclosed this in the past, but I would add to that this is the second sequential quarter in which we've seen this growth happening, again, excluding Dayforce. In a minute, we'll tee up why this matters. What I'm really pleased by is the fundamentals and the execution that led to this result, a trend that I can continue that I continue to see in the future. First, we've seen our mid-market business exceeding performance and expectations.

Speaker #6: Again , excluding the fourth . And in a minute , we'll tee up . Why this matters . What I'm really pleased by is the fundamentals and the execution that led to this result .

Speaker #6: A trend that I can continue , that I continue to see in the future . First , we've seen our mid-market business exceeding performance and expectations .

Speaker #6: This has happened due to the changes and evolution brought in by our new leadership team . And changes that we had performed at leadership level in the quarters in the past .

Alessio Artuffo: This has happened due to the changes and evolution brought in by our new leadership team and changes that we had to perform at leadership level in the quarters in the past. We're starting to reap the benefits of those improvements, not only in terms of people, but also framework, processes, and improved pipeline practices. Secondly, we've seen, frankly, against the seasonality and EMEA performance also exceeding expectations. Something that has pleased us very much with the key logos, very material ones signed in EMEA during the quarter. Finally, not to be forgotten, our core business retention continues to improve. We also think this is a very important component and a part of the story tell.

Speaker #6: We're starting to reap the benefits of those improvements , not only in terms of people , but also framework processes and improved , improved pipeline practices .

Speaker #6: Secondly , we've seen , frankly , against the seasonality anemia performance also exceeding expectations , something that has pleased us very much with the key logos , very material ones signed in EMEA during the quarter .

Speaker #6: And finally, not to be forgotten, our core business retention continues to improve. We also think this is a very important component and a part of the storytelling.

Speaker #6: Notwithstanding all of the above , our . Turn with our with de force accelerated faster than expected and the results are just the reflection of that .

Alessio Artuffo: Notwithstanding all of the above, our turn with our with Dayforce accelerated faster than expected, and the results are just the reflection of that.

Speaker #5: Perfect . Just one other thing . On FedRAMP , obviously impressive to see the wins pretty early . I'm curious if that's earlier than you had expected .

George Sutton: Perfect. Just one other thing on FedRAMP. Obviously impressive to see the wins pretty early. I'm curious if that's earlier than you had expected or on track? Then, we are sitting here in the US with a government that's not effectively open. I'm just curious how that impacts the opportunity?

Speaker #5: Or on track . And then we are sitting here in the US with a government that's not effectively open . I'm just curious how that impacts the opportunity .

Speaker #6: Great . So . We were very pleased to be achieving already two new federal customers shortly after our May dated FedRAMP listing . We believe that's an impressive outcome , considering that originally our thesis was to start winning federal business in fiscal 2026 , a more backdated in the second half because that is more aligned with our federal purchases .

Alessio Artuffo: Great. We were very pleased to be achieving already 2 new federal customers shortly after our May-dated FedRAMP listing. We believe that's an impressive outcome considering that originally our thesis was to start winning federal business in fiscal 2026, and more backdated in the second half because that is more aligned with our federal purchases. Not only we have expanded an account with the Department of Energy, which we were very pleased with-about, but also we've been working closely with our partner, Deloitte, to secure the business of the Air Force Cyber Academy. In addition to that, outside of federal, which I understand is the headline, given the complexity of doing deals in federal in such a short timeframe, we have continued to execute well also on the state and local side, and that trend is expected to continue.

Speaker #6: Not only we have expanded in account with the Department of Energy , which we were very pleased about , but also we've been working closely with our partner Deloitte to secure the business of the Air Force Cyber Academy .

Speaker #6: In addition to that , outside of federal , which I understand is the headline , given the complexity of doing deals in federal in such a short time frame , we have continued to execute well .

Speaker #6: Also , on the state and local side . And that trend is expected to continue as as it pertains to government shutdown . Actually , we've been building pipeline at a very impressive pace , both in federal and fled .

Alessio Artuffo: As it pertains to government shutdown, actually we've been building pipeline at a very impressive pace, both in federal and SLED. Fortunately, if you will, the government shutdown did not affect the seasonal buying cycle that occurred with the deals that we disclosed. I would say Q4 historically for federal deals is a very slow quarter because budgets get spent in Q3, our Q3, in Q4, organizations and federal organizations take a pause typically from purchases reigniting in our fiscal year 2026, by which time we expect the shutdowns will have been addressed. I will also add and tee up by saying our progress in SLED is tied to our progress in federal. Why?

Speaker #6: Fortunately , if you will , the government shutdown did not affect the seasonal buying cycle that occurred with the deals that we disclosed .

Speaker #6: And I would say quarter for for federal deals is a very slow quarter because budget gets spent in quarter three . Our quarter three and in quarter four organizations and federal organizations take a pause , typically from purchases reigniting in our fiscal year 2026 , by which time we expect the shutdown to have been addressed .

Speaker #6: I would also add on top by saying our progress in Sled is tied to our progress in federal Y , because we're seeing organizations in the state and local demand .

Alessio Artuffo: We're seeing organizations in the state and local demand more and more frequently a barrier of entry of FedRAMP, which we do address via FedRAMP certification. To tee it up, our investment in FedRAMP is playing a dual role here. Not only it's allowing us to increase TAM, but it's allowing us to win more in the SLED market, creating a great competitive differentiator for us for the future.

Speaker #6: The more and more frequently a barrier of entry of state ramp , which we do address via our FedRAMP certification . So to teed up our investment in FedRAMP is playing a dual role here , not only it's allowing us to increase them , but it's allowing us to win more in the sled market , creating a great competitive differentiator for us for the future .

Speaker #5: Perfect . Thank you .

George Sutton: Perfect. Thank you.

Speaker #3: Our next question comes from Kenneth Wong from Oppenheimer . Please go ahead . Your line is open .

Operator: Our next question comes from Kenneth Wong from Oppenheimer. Please go ahead. Your line is open.

Speaker #7: Fantastic . Thanks for taking my question . Alessio , I wanted to maybe dive into that . The FedRAMP sled dynamic a little more .

Kenneth Wong: Fantastic. Thanks for taking my question. Alessio, I wanted to maybe dive into that, the FedRAMP SLED dynamic a little more. You know, as you think about the guidance that you guys put out there for Q4, I realize it's a kind of seasonally low quarter, but any heightened conservatism in terms of what's coming in from the pipeline on the public sector side, just given that there is that shutdown?

Speaker #7: As you think about the guidance that you guys put out there for . For Q , I realize it's a kind of seasonally low quarter , but any any heightened conservatism in terms of what's coming in from the pipeline on the public sector side .

Speaker #7: Just given that there is that shutdown .

Alessio Artuffo: Like I said, I wouldn't say that we have seen a direct correlation between pipeline outcomes and government shutdown. On our side, you know, we're very focused on diversifying where we execute across State, Local, and Education. It's a big market. We're seeing more response and more, if you will, you know, interest coming from civilian organizations. The other thing I can say is that our technology favoring the use of Docebo for both internal use cases but also external use cases opens us to a new opportunity that in the market of government has been hard in terms of offering. I believe that our continued pipeline execution is really the reflection of good timing, good execution, and great product market fit.

Speaker #6: Like I said , I wouldn't say that we have seen a direct correlation between the pipeline outcomes and government shutdown on our side .

Speaker #6: You know , we're we're very , very focused on diversifying where we execute across state , local education . It's a big market .

Speaker #6: We're seeing more response and more , if you will . You know , interest coming from civilian organizations . And the other thing I can say is that our technology favoring the use of the for both internal use cases , but also external use cases , opens up to a new opportunity that in the market of government has been caught in terms of offering .

Speaker #6: So I believe that our continued pipeline execution is really the the reflection of good timing , good execution and great product market fit .

Speaker #6: .

Speaker #8: And Brandon here , I just want to add and great to have you on the call . You know , if you think about it , we started down the government route of building the business from the ground zero roughly two years ago .

Brandon Farber: Brandon here, just want to add and great to have you on the call. You know, if you think about it, we started down the government route of building the business from the ground zero roughly two years ago. Part of that was building relationships with all various federal departments. While we were building and looking to achieve FedRAMP authorization, we were able to demo and show our platform and have interest from various different federal departments. While we see the shutdown temporarily, you know, impacting the ability to generate new pipeline, we are very confident in the relationships we've built over the past two years, and that will enable us to start winning material contracts in Q3 of 2026.

Speaker #8: And part of that was building relationships with all various federal departments . And while we were building and looking to achieve FedRAMP authorization , we're able to demo and shore platform and have interest from various different departments .

Speaker #8: So while we see the shutdown temporarily , you know , impacting the ability to generate new pipeline , we are very confident in the relationships we've built over the past few years .

Speaker #8: And that will enable us to start winning material contracts in Q3 of 2026 .

Speaker #7: Perfect . And then maybe we'd love to get an update on the enterprise side , looks like both customer accounts and kind of IRR coming from from from large 100,000 customers was pretty strong .

Kenneth Wong: Perfect. Maybe we'd love to get an update on the enterprise side. Looks like both customer counts and kind of ARR coming from large 100,000 K customers is pretty strong. Would just love to get a sense of kinda how the pipeline was shaping up today, this quarter. What did sales cycles look like? Any extensions there, as we head into Q4? Any thoughts on whether or not you might see some sort of a budget flush from customers going into Q4?

Speaker #7: We just love to get a sense of kind of how the pipeline was shaping up today . This quarter . What did sales cycles look like any extensions there as we head into the fourth quarter , and any thoughts on whether or not you might see some sort of a budget flush from from customers going into Q4 ?

Speaker #6: Yeah. So, a few things on enterprise. Enterprise is a very critical area for us, and we continue to increase the number of customers over $100,000 sequentially, which is a strong sign of execution in our enterprise segment.

Alessio Artuffo: Two things on enterprise. Enterprise is a very critical area for us, and we continue to increase customers over $100,000 sequentially, which is a strong sign of execution in our enterprise segment, but also in our mid-market segment that is able to sign customers with multiple use cases and multiple modules and very healthy ACV. Additionally, on enterprise, I would say the following: In general, we see, you know, we continue to see deal elongation in the market. This is continuing to happen. You're right. Historically, Q4 is the stronger quarter within the enterprise segment for us, and we continue to expect that going into this quarter. A couple of notes that I would make are on some enterprise wins notable in this quarter.

Speaker #6: But also in our mid-market segment . That is able to to sign customers with multiple use cases and multiple modules and very healthy ACV .

Speaker #6: Additionally , on enterprise , I would say the following . In general , we see , you know , we continue to see the elongation in the market .

Speaker #6: This is continuing to happen . But you're right . Historically , quarter four is the strongest quarter within the enterprise segment for us .

Speaker #6: And we continue to expect that going into this quarter. A couple of notes that I would make are on some enterprise wins.

Speaker #6: Notable in this quarter . I was very impressed with the ability to sign a multinational like Veolia . This kind of tees up not only the the EMEA business , but also the capability of multi use cases and you know , this is an organization with more than 200,000 employees at quarters in France .

Alessio Artuffo: I was very impressed with the ability to sign a multinational like Veolia. This kind of tees up not only the EMEA business, but also the capability of multi-use case. You know, this is an organization with more than 200,000 employees headquartered in France. Additionally, I would say our ability to expand upon Amazon, which is a customer of ours that we've had for a while. This is our third department that we're signing in the quarter. Is very significant. Both on the new logo side and expansion side, we're very, very happy about the results and expect a strong Q4. I would say, you know, important in the inter-enterprise story is the system integrator story.

Speaker #6: And additionally , I would say our ability to expand upon Amazon , which is a customer of ours that we've had for a while , this is our third department that we're signing in the quarter .

Speaker #6: Is is very significant . So both on the new logo side and expansion side , we're very , very happy about the results .

Speaker #6: And expect a strong quarter for and I would say , you know , important enterprise story is the system integrator story . We have invested heavily in partnership programs and system integrator programs to support that enterprise motion and the large majority of the deals that we're doing in enterprise have a a system integrator attached to it .

Alessio Artuffo: We have invested heavily in partnership programs and system integrator programs to support that enterprise motion, and the large majority of the deals that we're doing in enterprise have a system integrator attached to it. That's the result of years of work.

Speaker #6: And so that's the result of years of work .

Speaker #7: Appreciate the color . Thanks a lot , guys .

Kenneth Wong: Appreciate the color. Thanks a lot, guys.

Speaker #3: Our next question comes from Ryan MacDonald from Needham & Company. Please go ahead. Your line is open.

Operator: Our next question comes from Ryan MacDonald from Needham & Company. Please go ahead. Your line is open.

Speaker #5: Hey good morning and .

Ryan MacDonald: Hey, good morning, and thanks for the questions. Congrats on a great quarter. Alessio, very much appreciate that obviously the enterprise is really the driving force around growth moving forward. Can we get a bit more color on sort of the OEM wind down, the Dayforce wind down? Obviously, you mentioned it sort of occurred a bit faster than you expected in the quarter. As we think about Q4 and into next year, can you just help us get a bit of a better understanding on the trajectory there and you know, what opportunities you might have to sort of compete more directly within that base of customers? Thanks.

Speaker #9: Thanks for the questions . Congrats on a great quarter . Alessio . Very much appreciate that . Obviously the enterprise is is really the driving force around growth moving forward .

Speaker #9: But can we get a bit more color on sort of the OEM wind down the de force , wind down obviously you mentioned it .

Speaker #9: It sort of occurred a bit faster than you expected in the quarter, but as we think about the fourth quarter and into next year, can you just help us get a bit of a better understanding on the trajectory there?

Speaker #9: And you know, what opportunities might you have to sort of compete more directly within that base of customers? Thanks.

Speaker #8: Hey , Ryan , it's Brandon . I'll take that question . So just taking a step back and just looking back as a reminder , day four started OEM and white labeling Docebo back in 2019 .

Brandon Farber: Hey, Ryan, it's Brandon. I'll take that question. Just taking a step back and just looking back, as a reminder, Dayforce started OEM-ing and white labeling Docebo back in 2019. They were very successful selling Docebo as an LMS and got as big as roughly 9% to 10% of our total ARR at a specific point in time. Back in early 2024, Docebo acquired eloomi, which we all know. At that specific point in time, they were an LMS provider in Europe, focused mainly on the SMB market. Subsequent to the acquisition, Docebo initiated legal action and was quickly resolved with Dayforce. Really, the goal of that lawsuit was 3 outcomes. Number 1, protecting our IP. Number 2, supporting the contributor of our revenue base. Number 3, preserving our day-to-day relationship with Dayforce.

Speaker #8: And there are very successful selling Docebo as an LMS and got as big as roughly 9 to 10% of our total IRR at a specific point in time .

Speaker #8: Back in early 2024 . Acquired Lumi , which we all know at that specific point in time . There were an LMS provider in Europe focused mainly on the SMB market .

Speaker #8: Subsequent to the acquisition . Docebo initiated legal action and was quickly resolved with Dayforce . Really the goal of that lawsuit was three outcomes .

Speaker #8: Number one , protecting our IP . Number two , supporting contributor of a revenue base . And number three , preserving our day to day relationship with Dave for how we're looking at it on a go forward basis .

Brandon Farber: How we're looking at it on a go-forward basis, we continue to expect economic benefits to flow to Docebo and the contract to wind down over extended period of time. Provide a little bit more color, we anticipate Dayforce to represent approximately 3.5% to 4.5% of our total revenues in 2026, 1% to 2% of our total revenues in 2027, and become immaterial thereafter. It's, you know, just to leave on a positive note, it is important to note in the current quarter and since 2024, we've continued to grow, we've continued to diversify our revenue base away from Dayforce, and we're pleased with the ARR growth we had this quarter, excluding Dayforce of 14%.

Speaker #8: We continue to expect economic benefits to flow to Docebo Inc. the contract to wind down over extended period of time , provide a little bit more color .

Speaker #8: We anticipate de to represent approximately three and a half to 4.5% of our total revenues in 2026 , 1 to 2% of our total revenues in 2027 .

Speaker #8: And become immaterial thereafter . It's , you . No , just to leave on a positive note . It is important to note in the current quarter and since 2024 , we've continued to grow .

Speaker #8: We've continued to diversify our revenue base away from day four , and we're pleased with the growth we had this quarter . Excluding Dayforce of 14% .

Ryan MacDonald: Appreciate all the color there, Brandon. That's very helpful. Maybe my second question, I wanted to talk on AI. As we've sort of spoken with companies and a number of companies rolling out AI strategies, it feels like there's sort of 3 buckets in which organizations are trying to sort of monetize AI efforts today. It's first seems to be in improved customer retention and sort of re-renewal rates. The second tends to be in sort of building in more higher annual price increases as you deliver more value with AI. The third tends to be sort of separate SKUs or modules that are AI-specific modules that you can start to charge for.

Speaker #9: Appreciate all the color there . Brendan . That's very helpful . Maybe my second question . I wanted to talk on AI as we've sort of spoken with companies and a number of companies rolling out AI strategies , it feels like there's sort of three buckets in which organizations are trying to sort of monetize AI efforts today .

Speaker #9: It's first seems to be in improved customer retention and sort of renewal rates . The second tends to be in sort of building in more higher annual price increases as you deliver more value with AI .

Speaker #9: And then the third tends to be sort of separate SKUs or modules that are AI specific modules that you can start to charge for .

Speaker #9: I'm just curious , as you think about the three buckets where you're seeing the benefits from AI , and at least in the shareholder letter , it seems like with these AI credits rolling out , it seems like you're getting a head start on that third bucket going into next year .

Ryan MacDonald: I'm just curious, as you think about the three buckets, where you're seeing the benefits from AI, and at least from the shareholder letter, it seems like with these AI credits rolling out, it seems like you're getting a head start on that third bucket going into next year. Would love a little bit more color on that as well. Thanks.

Speaker #9: So would love a little bit more color on that as well . Thanks .

Alessio Artuffo: Great, great three breakdown of the three, let's say, areas of return of AI. We very much agree with those three areas. I would say that having started with AI several years ago, our focus has certainly been more on the creating value and infusing AI in the product everywhere we can more lately. Originally, when we approached AI years ago, we were creating features that were supported by AI mostly to provide a better customer experience, i.e., getting to the outcome faster. At that time, monetization strategies were not a priority. We have matured and are maturing every day at a really rapid pace and our posture on AI. I can say that, your category number two and category number three are the ones that we think of very much.

Speaker #6: Great , great . Free breakdown of the three . Say areas of return of AI . We we very much agree with those three areas .

Speaker #6: I would say that having started with AI several years ago , our focus has certainly been more on the creating value and infusing AI in the product everywhere we can .

Speaker #6: More lately , originally , when we approached AI years ago , we were creating features that were supported by AI in to provide a better customer experience i.e. getting to the outcome faster , but at that time , monetization strategies were not a priority as we have matured , and our every day a really rapid pace , our posture on AI , I can say that your category number two and category number three are the ones that we think of very much .

Speaker #6: You are correct in saying that we've introduced recently an AI credit credit based system that aimed at managing through this credit based system , our AI pricing , the way it would work is for modules like AI , virtual Coach and AI video presenter , a consumption model whereby our customers using these modules consume credits that run against the packages that they would buy upfront .

Alessio Artuffo: You are correct in saying that we've introduced recently an AI credit, a credit-based system that's aimed at managing through this credit-based system, our AI pricing. The way it would work is for modules like AI Virtual Coach and AI Video Presenter, a consumption model whereby our customers, using these modules consume credits that run against the packages they would buy upfront. We don't have a long history of doing this. We've recently started this, but our thesis is to continue to roll in AI capabilities against this model to make it more meaningful from a monetization standpoint in the future.

Speaker #6: We don't have a long history of doing this . We've recently started this , but we are thesis is to continue to roll in AI capabilities against this model to make it more meaningful from a monetization standpoint in the future .

Alessio Artuffo: You know, we also believe that continuing to provide AI capabilities will give us an edge against the competition, which will allow us and help us defend a premium of our product against the competition as a result. Finally, I would say retention remains an evergreen goal that we have. We infuse AI features everywhere. Every single product manager in the company is required to think AI first as they build new products and revise existing features so that our customers have a better experience with the product.

Speaker #6: But then , you know , we also believe that continuing to provide AI capabilities will give us an edge against the competition , which will allow us and help us defend a premium of our product against the competition .

Speaker #6: As a result . And finally , I would say retention is remains an evergreen goal that we have . We infuse AI features everywhere .

Speaker #6: Every single product manager in the company is required to think AI first as they build the new products and revise existing features so that our customers have a better experience with the product .

Speaker #9: Excellent . I appreciate the color there . Alessio . Thanks .

David Brown: Excellent. Appreciate the color there, Alessio. Thanks.

Ryan MacDonald: Excellent. Appreciate the color there, Alessio. Thanks.

Speaker #3: Thank you . Our next question comes from Robert Young from Canaccord Genuity . Please go ahead . Your line is open .

Alessio Artuffo: Thank you.

Operator: Our next question comes from Robert Young from Canaccord Genuity. Please go ahead. Your line is open.

Speaker #10: Hi . Good morning . You said in the prepared remarks that you'd seen the second consecutive quarter of improved retention and that I assume that's with the OEM piece aside .

Robert Young: Hi. Good morning. You said in the prepared remarks that you've seen the second consecutive quarter of improved retention, and I assume that's with the OEM piece aside. I was wondering if you could, you know, dig deeper into that. If you could update us on, you know, where churn is, where the elements of churn are, if that's improving, and then, you know, where you think that's gonna go in 2026.

Speaker #10: So I was wondering if you could , you know , dig deeper into that , if you could update us on where churn is , where the elements of churn are , if that's improving and then you know where you think that's going to go , 26 .

Speaker #8: Okay , Rob , it's Brandon , you know , as you know , we only disclosed Gnrh-r on annual basis . So we we won't go into specific numbers .

Brandon Farber: Hey, Robert Young, it's Brandon Farber. You know, as you know, we only disclose NRR on annual basis, we won't go into specific numbers. You are right, we did see 2 consecutive quarters in a row of retention improvements, whether you look at it from a gross retention or net retention. This is actually very consistent with what we have been saying for the past 2 quarters. We knew in Q1 we had a, you know, a large renewal base that would bring it down, and we'd only go up from there. You know, one thing that is important to mention is that we did lap the large Thomson Reuters downgrade that happened in Q3 of last year of roughly $2 million. Obviously, laps in that did result in improvements.

Speaker #8: But you are right. We did see two consecutive quarters in a row of retention improvements. Whether you look at it from a growth retention or net retention, this is actually very consistent with what we have been saying for the past few quarters.

Speaker #8: We knew in Q1 we had a , you know , a large renewal base that would bring it down and we'd only go up from there , you know , one thing that is important to mention is that we did lapse the large Thompson routers downgrade that happened in Q3 of last year of roughly $2 million .

Speaker #8: So obviously lapsing that did result in improvement . And , you know , to be completely transparent , we do expect that metric to go down next quarter because of the AWS downgrade .

Brandon Farber: You know, to be completely transparent, we do expect that metric to go down next Q because of the AWS downgrade. You know, a couple of things that I'd say is we have a renewed focus on retention. We are putting together account mapping for every at-risk customer and making sure we're proactive and not reactive. We feel really good about the programs we have in place to continue strong retention metrics in the future.

Speaker #8: So you know , a couple of things that I would say is we have a renewed focus on retention . We are putting together a mapping for every at risk customer and making sure we're proactive and not reactive .

Speaker #8: And we feel really good about the programs we have in place to continue strong retention metrics in the future .

Speaker #10: Okay , thanks for that . And then you noted the AWS Skill Builder roll off . Is there . How is that hand over progressing ?

Robert Young: Okay. Thanks for that. You noted the AWS Skill Builder roll-off. How is that handover progressing? Is there a potential for a stub contract, a support contract in 2026, or is that gonna disengage completely, as you expect?

Speaker #10: Is there a potential for a subcontract to support contract in 2026 , or is that going to disengage completely as you expect ?

Speaker #8: Hey Rob , we expect that to completely disengage December 31st .

Brandon Farber: Hey, Rob. We expect that to completely disengage December 31st.

Speaker #10: Okay, thanks. I'll pass mine.

Robert Young: Okay. Thanks. I'll pass the line.

Speaker #3: Our next question comes from Josh Baer from Morgan Stanley . Please go ahead . Your line is open .

Operator: Our next question comes from Josh Baer from Morgan Stanley. Please go ahead. Your line is open.

Speaker #11: Thanks, and congratulations on reaching a 20% EBITDA margin early. That's something that you have been discussing for a long time.

Josh Baer: Thanks, and congrats on reaching 20% EBITDA margin early. That's something that you guys have been talking about for a long time. Wanna just follow up with a couple more on the OEM. Just curious what that percentage was last quarter. Do you have that?

Speaker #11: Want to just follow up with a couple more on the OEM ? Just curious what that percentage was last quarter . Do you have that ?

Speaker #8: Sorry , maybe if I could just rephrase . Are you asking for what AR growth was excluding day for ?

Brandon Farber: Sorry. Maybe if I could just rephrase. Are you asking for what ARR growth was excluding the?

Speaker #11: No . The the percentage of IRR . So 6.2 this quarter . Just wondering what it was last quarter .

Josh Baer: No. The percentage of ARR. 6.2% this quarter. Just wondering what it was last quarter.

Speaker #8: You know instead of giving you that exact metric , what I can give you is what are error . Are excluding day force was last quarter which was roughly 13.9% okay .

Brandon Farber: You know, Instead of giving you that exact metric, what I can give you is what our ARR excluding Dayforce was last quarter, which was roughly...

Josh Baer: Okay.

Brandon Farber: 13.9%.

Speaker #12: 13.9% .

Josh Baer: Okay.

Brandon Farber: 13.9%.

Josh Baer: for Q2 also.

Speaker #11: For Q2 . Also .

Josh Baer: for Q2 also.

Speaker #8: Correct ? Correct .

Brandon Farber: Correct.

Speaker #11: Okay . Cool . Yeah , I guess I'm just wondering like why it was like a greater wind down than expected . Is it was it , you know , day force led ?

Josh Baer: Okay, cool. Yeah, I guess I'm just wondering, like, why it was a greater wind down than expected. Was it, you know, Dayforce-led? Was it customer-led? Any context there. I did want to just follow up, like, is it a lot of smaller customers noticed like there was a big jump again in average contract value, so some really nice acceleration there. Wondering if it's related. I know you also had success more broadly in enterprise. In part, I want to get a better sense of, like, does this average contract value continue accelerating, or should we expect that to slow down? When we do get the total customer count at the end of the year, like, should we expect that to move lower due to this Dayforce? Thanks.

Speaker #11: Was it customer led any contacts there . And then I did want to just follow up . Like is is it a lot of smaller customers notice like there was a big jump again in average contract value .

Speaker #11: So some really nice acceleration there . Wondering if it's if it's related . I know you also had success more broadly in enterprise , but in part want to get a better sense of like , does this average contract value continue accelerating or should we expect that to slow down ?

Speaker #11: And then when we do get the total customer count at the end of the year , like , should we expect that to move lower due to this de force ?

Speaker #11: Thanks .

Brandon Farber: A lot of what you just said is bang on. Our ACV this quarter did grow as a result of the Dayforce wind down. If you think about the customers that typically get attracted to an HRIS system plus an LMS, they tend to be a customer who use it for 1 to 2 use cases, which is onboarding and compliance. Those average tickets tend to be materially lower than a customer that would sign directly with Docebo for multiple different use cases. You should expect, and you should model that our ACV with Dayforce is materially lower than a customer that signs directly with Docebo. Regarding customer counts, you should expect that our customer count overall will be down, and that is a result of the wind down of Dayforce.

Speaker #8: Yeah , a lot of what you just said is , is bang on . So our HCV this quarter did grow as a result of the de force wind down .

Speaker #8: If you think about the customers that typically get attracted to an RF system , plus an LMS , they tend to be a customer who use it for 1 to 2 use cases , which is onboarded compliance .

Speaker #8: And those average tickets tend to be materially lower than a customer . That would sign directly with Delchevo for multiple different use cases .

Speaker #8: So you should expect and you should model that or ACV with a force is materially lower than a customer that signs directly with Docebo Inc. regarding customer accounts , you should expect that our customer count overall will be down , and that is a result of the wind down of de force .

Speaker #11: Okay , that's all really clear and helpful . Thanks , Brandon .

Josh Baer: Okay. That's all really clear and helpful. Thanks, Brandon.

Speaker #3: Our next question comes from Yefu Li from Cantor Fitzgerald. Please go ahead. Your line is open.

Operator: Our next question comes from Yi Fu Lee from Cantor Fitzgerald. Please go ahead. Your line is open.

Speaker #13: Good morning, Alexia and Brandon. Congrats on the strong print in a busy week of earnings. So, to start with you.

Yi Fu Lee: Good morning, Alessio and Brandon. Congrats on the strong Q3 print and a busy week of earnings. To start with you, Alessio, I wanna go over the AI product vision. We understand from the Inspire Alessio, your model is to build a product that delivers value to customers first, and they will eventually pay Docebo, and you monetize it, right? Looking at the new product lineup, whether it be Harmony Search, Support, AI Authoring, Virtual Coaching, Copilot, et cetera. Which of these products, Alessio, would you say is closer to monetization potential? Also on the second part of this question, Alessio, in the end of your prepared remarks, you talked about redefining the future of learning. I understand you like to solicit continuous feedback from your customers.

Speaker #13: Alexia I want to go over the AI product vision . We understand from inspire . Your model is to build a product that delivers value to customers .

Speaker #13: First . And they will eventually pay Docebo Inc. . And you commoditize it right . So looking at the new product lineup , whether it be Harmony , search , support , AI authoring , virtual coaching , Copilot , etc.

Speaker #13: , so which of these products Alexia , would you say is closer to monetization potential ? And also on the second part of this question , Alexia , in the end of your prepared remarks , you talked about redefining the future of learning , and I understand you like to solicit continuous feedback from your customers .

Speaker #13: What are the key things you've you know , you've learned from your customer and stakeholders that you want to apply to your product roadmap for the end of this year , in 2026 .

Yi Fu Lee: What are the key things you've, you know, you've learned from your customer and stakeholders that you wanna apply to your product roadmap, for the end of this year and 2026? I also have a follow-up with Brandon after this.

Speaker #13: And I also have a follow-up with Brandon after this.

Speaker #6: Lovely questions . Let's get started . The fun starts on the AI and product . First , let me share that you are correct .

Alessio Artuffo: Lovely question. Let's get started. The fun starts on the AI and product. First, let me share that you are correct. Our vision around our Harmony ecosystem is very ambitious, and we have executed. So far, Harmony Search from its recent launch has already powered about a half a million searches, half a million queries, which is a very positive result against our expectations. This is not only stopping with Search. Search was just the beginning of a journey where we want to get Harmony to become the assistant of our customers. Harmony, in fact, was now evolved into a copilot logic. The goal is to improve the productivity and the self-servicing of capabilities in the platform.

Speaker #6: Our vision around our harmony ecosystem is very ambitious and we have executed them so far . Harmony search from its recent launch has already powered the about a half a million searches of a million queries , which is a very a very positive result against our expectations .

Speaker #6: This is not only stopping with search; it was just the beginning of a journey where we want to get harmony and become the assistant of our customers.

Speaker #6: Harmony , in fact , was now evolved into a copilot . Logic . The goal is to improve the productivity and the self-servicing capabilities in the platform so you can go into chatbot and ask Harmony to perform tasks for you and help you identify how to get things done in the product and harmony will either point you to it or do it for you .

Alessio Artuffo: You can go in Docebo and ask Harmony to perform tasks for you and help you identify how to get things done in the product. Harmony will either point you to it or do it for you. This is just the beginning of a journey towards full platform automation, which is a longer term vision that we have, that we're going to pursue. In terms of, you know, Creator, which you mentioned, I think your question was around which capability do I think will contribute the most to monetization.

Speaker #6: This is just a the beginning of a journey towards full platform automation , which is a longer term vision that we have that we are , that we're going to procure in terms of .

Speaker #6: You know , creator , which you mentioned , I think your question was around which capability do I think will contribute the most to monetization and .

Yi Fu Lee: Yes. The earlier. Yes.

Speaker #13: The earlier yes .

Speaker #6: Yeah , creator is the engine behind the experience creation in the table , which includes , as part of it , our AI virtual coach .

Alessio Artuffo: Yeah. Creator is the engine behind the e-experience creations in Docebo, which includes, as part of it, our AI Virtual Coach. The ability to create simulations and to simulate any scenario from, you know, customer service, leadership, and sales enablement. Something that we have evolved this past month by releasing a new version of Creator, which initially was addressing only the sales enablement use case. Now, that module is well rounded up and allows an organization to map simulation scenarios against any custom role play scenario they want to implement. We do expect Creator and Virtual Coach to be great contributors to our monetization strategy in the future.

Speaker #6: The ability to create simulations and to simulate any scenario from , you know , customer service , leadership and sales enablement , something that we have evolved this past month by releasing a new version of creator , which in story of Coach that initially was addressing only the sales enablement , enablement use case .

Speaker #6: Now that module is , well rounded up and allows an organization to map simulation scenarios against any custom role play scenario . They want to implement .

Speaker #6: So we do expect creator and virtual coach to be great contributor to our monetization strategy in the future .

Speaker #13: Got it , got it . Thanks for that , Alexa . Yeah , sorry about that . Yeah .

Yi Fu Lee: Got it. Thanks for that, Alessio.

Alessio Artuffo: Yes.

Yi Fu Lee: Yeah, sorry about that. Yeah.

Speaker #6: No , I was just going to wrap up by saying our roadmap reflects our belief that a platform from a differentiation standpoint to ask about the customers and what we're hearing , we are hearing customers saying they want more ability to create personalized experiences .

Alessio Artuffo: No, I was just gonna wrap up by saying our roadmap reflects our belief that a platform from a differentiation standpoint, you asked about the customers and what we're hearing. We're hearing customers saying they want more ability to create personalized experiences. They want to do less leaking and to be able to create content at a more rapid pace in automated ways. That's what we're executing with Harmony and with Creator.

Speaker #6: They want to do less clicking and to be able to create content at a more rapid pace in automated way . That's what we're executing with our harmony with creator .

Speaker #13: Got it . Thanks for the comprehensive response , Alexa , I want to follow up on the obviously , you guys made the customer wins , especially I want to focus on the industrial one , the 200,000 seat .

Yi Fu Lee: Got it. Thanks for the comprehensive response. Alessio, I wanna follow up, obviously, on the customer wins especially. I wanna focus on the industrial one, the 200,000 seat, right? Obviously, you're leaning more towards the system integrator channels similar to other tier one SaaS software companies. I just wanted to get your sense on, like, what types of partnerships are you engaging. I know Deloitte is a big one, right? What's working and what needs work on? I'll just ask a financial question as well, Brandon. On the financial side, I'm just looking at the KPIs for like new logo ACV. $71K is SLED year-over-year, but up 8% quarter-over-quarter. You know, in terms of the story, it seems like you guys are going upper enterprise, right?

Speaker #13: Right . Obviously you're leaning more towards the system integrator channels , similar to other Tier1 SaaS software companies . I just wanted to get your sense on , like what types of partnerships are you engaging ?

Speaker #13: I know Deloitte is a big one , right ? What's working and what needs work on . And then I'll just ask the financial question as well .

Speaker #13: Brandon , on the financial side , I'm just looking at the KPIs for like new logo HD one K is flat year over year , but up 8% quarter over quarter .

Speaker #13: But you know , in terms of the story , it seems like you guys are going up or enterprise , right ? So why why is that metric ?

Yi Fu Lee: Why is that metric, you know, SLED year-over-year? That's it from me. Thank you, Alessio and Brandon.

Speaker #13: You know , flat year over year . And that's it for me . Thank you . Alexia and Brandon .

Brandon Farber: I'll kick it off on the last part of that question. How we look at ACV is, you know, given the fact that we're seeing extremely strong success in mid-market, and this is 2 quarters in a row where we've seen that strength, and we're seeing leading indicators that that strength will continue into Q4. That is impacting obviously the ACV as we have larger, you know, larger concentration of customer accounts coming in at the mid-market. When you think about the enterprise space, you tend to have a lower number of customer wins, but at a larger ACV. During the quarter, we actually did have really strong performance of units that had very healthy ACVs, you know, upwards of, you know, let's call it $500,000 ACV.

Speaker #8: I'll kick it off on the last part of that question . So how we look at it is , you know , given the fact that we're seeing extremely strong success in mid-market and this is two quarters in a row where we've seen that strength and we've we're seeing leading indicators that that strength will continue into Q4 .

Speaker #8: That is impacting , obviously , the ACV , as we have larger , you know , larger concentration of customer accounts coming in at mid-market .

Speaker #8: When you think about the enterprise space , you tend to have lower number of customer wins , but at a larger ACV . So during the quarter , we actually did have really strong performance of units that had very healthy acvs .

Speaker #8: You know , upwards of , you know , let's call it 500 K , ACV and seasonally we do expect Q4 to be strong enterprise quarter .

Brandon Farber: Seasonally, we do expect Q4 to be strong enterprise quarter, and we do expect that ACV to go up in Q4 as well.

Speaker #8: And we do expect that ATV to go up in Q4 as well .

Speaker #6: On the first part of the question you asked about how you how we view the market of system integrators , and you mentioned the big logo that we we mentioned earlier .

Alessio Artuffo: On the first part of the question, you asked about how we view the market of system integrators, and you mentioned the big logo that we mentioned earlier. I would say a few things. In the past calls, we've outlined how we've made such great strides in partnering with the Accenture and Deloitte caliber type of system integrators. That work is continues, and we continue to advance our relationships with them and really formally progress our status as partner types within those organizations, which in turn will only give us more penetration in their go-to-market efforts. Also remember, it's not only a matter of pipeline creation, it's also the ability for them to support us in complex implementations, which adds an incredible amount of value with large enterprises.

Speaker #6: I would say a few things in the past calls . We've outlined how we've made are such great . Strides in partnering with the Accenture and Deloitte caliber type of system integrators that work is continuous , and we continue to advance our relationship with them and really formally progress our status as partner type within those organizations , which in turn will only give us more penetration in the go to market efforts , but also remember , it's not only a matter of .

Speaker #6: Pipeline creation , it's also the ability for them to support us in complex implementations , which has an incredible amount of value with the large enterprises .

Speaker #6: I would add a different type of color in the call by saying that not only have we been working with these very large system integrators, but also regionally and internationally, we have identified a number of system integrators that are leaders in their respective markets.

Alessio Artuffo: I would add a different type of color in this call by saying that not only we've been working with these very large system integrators, but also regionally, internationally, we've identified a number of system integrators that are leaders in their respective markets. When you think about wins like that, the State Administration School of Latvia, we would have not been able to do that with a critical regional partner that helped us become the de facto platform for the entire public sector of the country of Latvia. As we continue to expand with these regional and more focused system integrators, we expect deals like these to become more and more frequent.

Speaker #6: And so when you think about wins like bath , the the state Administration School of Latvia , we would have not been able to do that with a critical regional partner .

Speaker #6: That helped us become the de facto platform for the entire public sector of the of of the country , of Latvia . And so as we continue to expand with these regional and more focused system integrators , we expect deals like these to become to become a more and more frequent .

Speaker #6: .

Speaker #13: Okay . Thanks again . Alexio and Brandon . And congrats .

Yi Fu Lee: Okay. Thanks again, Alessio and Brandon. Thanks. Congrats.

Speaker #3: Our next question from Aaron . Kyle from CIBC . Please go ahead . Your line is open .

Operator: Our next question from Erin Kyle from CIBC. Please go ahead. Your line is open.

Speaker #14: Hi . Good morning , Alicia and Brandon . Thanks for taking the questions . I just had a question on how we should be thinking about the margin profile here into 2026 .

Erin Kyle: Hi. Good morning, Alessio and Brandon. Thanks for taking the questions. I just had a question on how we should be thinking about the margin profile here into 2026, you know, as you continue to expand the federal pipeline and opportunity here. Do you expect to see an increased spend in sales and marketing or the 20% margin in Q4? I guess my question is how sustainable is that, you think, going forward?

Speaker #14: As you continue to expand the federal pipeline and opportunity here , do you expect to see an increased spend in in sales and marketing or the 20% margin in Q4 ?

Speaker #14: I guess my question is how sustainable is that ? You think going forward ?

Speaker #8: The way we're thinking about EBITDA margin , and it is important to note , we do have a bit of seasonality in EBITDA where we do expect Q3 and Q4 to always be stronger than Q1 and Q2 , given Q2 , we have our big inspire event in Q1 .

Brandon Farber: The way we're thinking about EBITDA margin, it is important to note we do have a bit of seasonality in EBITDA, where we do expect Q3 and Q4 to always be stronger than Q1 and Q2, given Q2, we have our, you know, big Inspire event, Q1, we tend to have seasonally higher payroll costs. How we're thinking about EBITDA going forward, you know, we do think we're fairly staffed in from sales and marketing perspective. We've invested and spent money in government over the past two years, we've staffed that team up for success. We do have pipeline targets, coverage ratios that once it exceeds those ratios, we'll certainly accelerate hiring. For now, the government team is fully staffed.

Speaker #8: We tend to have seasonally higher payroll costs . How we're thinking about EBITDA going forward . We do think we're fairly staffed from sales and marketing perspective .

Speaker #8: We've invested and spent money in government over the past two years, and we've staffed that team up for success. We do have pipeline targets and coverage ratios that, once they exceed those ratios, we'll certainly accelerate hiring.

Speaker #8: But for now , the government team is fully staffed . How are you thinking about EBITDA margins going forward ? We do post in our investor deck every quarter .

Brandon Farber: How we're thinking about EBITDA margins going forward, you know, we do post in our investor deck every quarter, goals from a, from a spend level. You know, one number to call out is we're at 20% EBITDA today. Our G&A as a percentage of revenue is roughly 15%, and our long-term or midterm goal is 9% to 11%. If you think about, you know, incremental 5% leverage in G&A alone, that gets you to 25% margin over, you know, a mid to long-term basis. That's without sacrificing any investments we have to make in R&D and sales and marketing.

Speaker #8: Goals from from a spend levels . And you know , one number to call out is we're at 20% EBITDA today . Our DNA as a percentage of revenue is roughly 15% .

Speaker #8: And our long term or mid term goal is 9 to 11% . So if you think about incremental 5% leverage in DNA alone , that gets you to 25% margin over a mid to long term basis .

Speaker #8: And that's without sacrificing any investments. We have to make in R&D and sales and marketing.

Erin Kyle: Thanks, Brandon. That's helpful color there. Maybe can I just ask one more just on the professional services revenue. In the quarter was a bit higher than we had expected. Is that related to the strength in the mid-market? If that's the case, should we expect that to trend higher in Q4 and going forward as well as you see that mid-market strength continue?

Speaker #14: Thanks , Brendan . That's helpful . Color . There . Maybe I can just ask one more just on the professional services revenue in the quarter was a bit higher than we had expected .

Speaker #14: Is that related to the strength in the mid-market ? And if that's the case , should we expect that to trend higher in Q4 and going forward , as well as you see , that mid-market strength continue ?

Speaker #8: Yeah , it's a great question . So what we're seeing is that the type of customers in mid-market that tend to be attracted to our customers , that have complex onboarding needs and complex use cases , and with complex use cases , tend to lead to more of hands on onboarding experience .

Brandon Farber: Yeah, it's a great question. What we're seeing is that the type of customers in mid-market that tend to be attracted to Docebo are customers that have complex onboarding needs and complex use cases. With complex use cases tend to lead to more a hands-on onboarding experience. What I would say is that while we're pleased with the professional revenue growth, it's not a line item we're focused on. We're really focused on growing high-margin accretive subscription revenue, and we're very comfortable with handing off professional services revenues to our partners such as Deloitte and Accenture.

Speaker #8: What I would say is that while we're pleased with the professional revenue growth , it's not a line item . We're focused on .

Speaker #8: We're really focused on growing high margin accretive subscription revenue , and we're very comfortable with handing off professional services revenues to our partners such as Deloitte and Accenture .

Speaker #14: Thanks , Brendan . I will pass the line .

Erin Kyle: Thanks, Brandon. I will pass the line.

Speaker #3: Our next question comes from Suthan Sukumar from Stifel . Please go ahead . Your line is open .

Operator: Our next question comes from Suthan Sukumar from Stifel. Please go ahead. Your line is open.

Speaker #15: Good morning guys . I my first question I wanted to touch on the Amazon expansion . You know , I thought that was a positive read on sort of the state of the that relationship .

Suthan Sukumar: Good morning, guys. I, for our first question, I wanted to touch on the Amazon expansion. You know, I thought that was a positive read on sort of the state of that relationship. Can you speak a little bit about, you know, aside from the AWS contract, you know, what use cases you are involved with at Amazon, and how you expect that relationship to evolve going forward?

Speaker #15: Can you can you speak a little bit about , you know , aside from the AWS contract , you know , what what use cases you are involved with at Amazon and how you expect that relationship to to evolve , going forward .

Speaker #6: Sure . So first , let me underscore the fact I'm very pleased with the fact that , notwithstanding Amazon divesting from us on the skills Builders initiative , we continue to attract the business of other Amazon companies who continue to entrust us with our products and services .

Alessio Artuffo: Sure. First, let me underscore the fact. I'm very pleased with the fact that, notwithstanding Amazon divesting from us on the Skills Builders initiative, we continue to attract the business of other Amazon companies who continue to entrust us with our products and services. I think that's a testament, also to the great work that we've done over the years with Amazon Skills Builder, because if we had done so, you would presume that the reference calls that would happen in order to sign with Docebo would bring these Amazon companies to make different decisions. I think that's a little bit of also in retrospective to clear up any doubts remaining. I would say on the current win, we did sign Amazon Health, which is the healthcare division of Amazon.

Speaker #6: I think that's a testament also to the great work that we've done over the years with Amazon Skill Builder , because if we had done so , you would presume that the reference calls that would happen in order to sign with the table would would bring these Amazon companies to make different decisions .

Speaker #6: So I think that's that's a little bit of perspective to to clear up any doubt remaining . I would say on the on the current win , we did sign Amazon Health , which is the healthcare division of Amazon .

Alessio Artuffo: It's a very important win for us because not only it adds another Amazon logo to our customer base, but also it's a perfect fit for our products and services. They are going to be using Docebo for both customer experience, doing customer and partner education, effectively supporting healthcare professionals, the technology partners and service teams. Then on the employee side, they're going to be using Docebo for sales enablement, onboarding, leadership development, professional development, and compliance. What we know is that organizations that use Docebo for more than four or five use cases have the best metrics in terms of unit economics and retention. So we love when we can bring in companies that effectively become so sticky.

Speaker #6: It's a it's a very important win for us because not only it adds another Amazon logo to our customer base , but also it's a perfect fit for our products and services .

Speaker #6: They are going to be using the chatbot for both customer experience and for effectively educating customers and partners, thus supporting our care professionals, technology partners, and service teams.

Speaker #6: And then on the employee side , they're going to be using the table for self enablement , onboarding , leadership development and professional development .

Speaker #6: And compliance . What we know is that organizations that use the table for more than 4 or 5 use cases have the best metrics in terms of unit economics and retention .

Speaker #6: And so we love when we can bring in companies that effectively become sticky . And , you know , on the competition side , you guys usually ask that and want to know .

Alessio Artuffo: You know, on the competition side, and you guys usually ask that and want to know, unsurprisingly, we did overcome the other competitors, both on the mid-market and I would say legacy enterprise side.

Speaker #6: Unsurprisingly , we did overcome the other competitors , both on the mid-market and would say legacy enterprise side .

Brandon Farber: Just one thing I'd add is that this new use case with Amazon, they were not interested in a short-term relationship with us. They did sign for a five-year contract, which just shows the strength of Docebo's relationship with Amazon.

Speaker #8: One thing I'd add is that this new use case with Amazon, they were not interested in a short-term relationship with us.

Speaker #8: They did sign for a five year contract , which just shows the strength of relationship with Amazon .

Speaker #15: Okay , great . Thank you . That's that's great color . My second question , I just wanted to kind of touch on the grilled profile .

Suthan Sukumar: Okay, great. Thank you. That's great color. For my second question, I just wanted kind of to touch on the growth profile. You know, you guys are ARR is now down to 10% year-over-year, but when you exclude Dayforce, it's 14%. I think that does speak to the stronger underlying growth momentum in the business. Can you remind us the impact with the AWS contract roll-off would be to ARR and more broadly, you know, what would need to happen for growth to continue reaccelerating from here? You know, I'm just gonna keep in mind that you guys have a new CRO in the seat. You know, just curious what sort of changes and priorities are playing out here to support that growth reacceleration.

Speaker #15: You know , you guys are AR is now down to 10% year over year . But when you exclude day 14% , I think that does speak to the strong underlying growth momentum in the business .

Speaker #15: Can you remind us the impact with the AWS contract roll off would be to IRR and and more broadly , you know , what , what would need to happen for growth to continue accelerating from here .

Speaker #15: You know , I'm just going to keep it in mind that you guys have a new CRO in the seat . You know , just curious what sort of changes and and priorities and priorities are , are playing out here to to support that growth rate acceleration .

Speaker #8: I'll start off and pass it off to you . The AWS impact with last quarter's is approximately $4 million hit to ERA , which will come out December 31st .

Brandon Farber: I'll start off and pass it off to Alessio. The AWS impact consistent with last quarter is approximately $4 million hit to ARR, which will come out 31 December.

Speaker #6: So on the on the question of exploration , look , I think you were banging on in your observation and I would underscore that our CRO and CMO have been in seat for a relatively towards the time frame in the past 90 days alone , though , I have seen , you know , them making a significant impact .

Alessio Artuffo: On the, on the question of reacceleration, look, I think you were bang on in your observation, and I would underscore that our CRO and CMO have been in seat for a relatively short timeframe. In the past 90 days alone, though, I have seen, you know, them making a significant impact. Kyle and Mark, who hopefully are listening to us today, I'm gonna say good things about their work. I've been very impressed with the level of sophistication that we've been able to already inject in our revenue architecture. There are a lot of practical details that are being improved, from forecasting methodology to customer success methodology.

Speaker #6: And Mark , hopefully you're listening to us today . I'm going to say good things about their work . I've been very impressed with the level of sophistication that we've been able to already inject in our revenue architecture .

Speaker #6: There are a lot of practical details that are being improved from forecasting methodology to customer success methodology . We are investing significantly in optimizing our spend on the marketing side , becoming leaders in this AI referral traffic generation , which is , you know , a big , a big aspect and a marketing digital marketing is changing a lot in the from the post .

Alessio Artuffo: We are investing significantly in optimizing our spend on the marketing side, becoming leaders in this AI referral traffic generation, which is, you know, a big aspect in digital marketing changing a lot in the kind of post everything on SEO era. The execution has been start, and I'm seeing already the beginning of a trajectory that will continue in the years to come. In terms of, you know, reacceleration is achieved through a few things that we're pursuing. I would highlight four areas that we are particularly focused on. The first one is evergreen, as I say, always improving our retention metrics. That is not just improving our retention, but also improving our net dollar retention by strengthening our expansion engine.

Speaker #6: Everything on SEO era . So there execution has been sharp and I'm seeing already the beginning of a trajectory that will will continue in the year to come .

Speaker #6: In terms of , you know , acceleration is achieved through a few things that were pursuing . I would highlight the four areas that we are particularly focused on .

Speaker #6: The first one is an evergreen , as I say , always improving our retention metrics . And that is not just improving our retention , but also improving our net dollar retention by strengthening our expansion engine .

Speaker #6: We're very focused on this , and we're seeing positive momentum in the pipeline in this business . The second one that I would mention is performance in the mid-market .

Alessio Artuffo: We're very focused on this, we're seeing positive momentum in the pipeline in the system. The second one that I would mention is performance in the mid-market. As we mentioned, we are executing really well as a result of a mix of things, people and processes. We expect this performance to continue in the quarters to come. The third one that I would mention is, again, government. We've only seen the beginning of a journey that started in May with federal and will continue strong into 2026 alongside our continued execution in SLED. Finally, we have been working on strengthening our enterprise momentum and pipeline. We're starting to see the results of that. We expect good signals in Q4, but we believe 2026 will be the year of enterprise at Docebo.

Speaker #6: As we mentioned , we are executing really well as a result of a mix of things people and processes , and we expect this performance to continue in the quarters to come .

Speaker #6: The third one that I would mention is , again , government . We've only seen the beginning of a journey that started in May with federal , and we'll continue strong into 2026 alongside our continued execution in Sled .

Speaker #6: And finally , we have been working on strengthening our enterprise momentum and pipeline . We're starting to see the results of that . We expect good signals in quarter four , but we believe 2026 will be the year of enterprise at the chatbot .

Speaker #15: Okay , great . Thank you for taking my questions , guys . I'll pass the line .

David Brown: Okay, great. Thank you for taking my questions, guys. I'll pass the line.

Suthan Sukumar: Okay, great. Thank you for taking my questions, guys. I'll pass the line.

Speaker #3: Our next question comes from Richard . Say from National Bank Capital Markets . Please go ahead . Your line is open .

Operator: Our next question comes from Richard Tse from National Bank Capital Markets. Please go ahead. Your line is open.

Speaker #16: Yes . Thank you . I just want to go back to this AI sort of product portfolio . Can you help us understand your assumptions around how your attach rates are going to scale with those products and with that , how the revenue profile will lift alongside that ?

Richard Tse: Yes, thank you. I just want to go back to this AI sort of part product portfolio. Can you help us understand your assumptions around how your attach rates are gonna scale with those products, and, you know, with that, how the revenue profile will lift alongside that?

Speaker #8: Hey, Richard. I'm going to wait to answer that question for Inspire, where we'll have the investor update and talk a little bit more about how we're envisioning AI credits' impact on the overall business.

Alessio Artuffo: Hey, Richard. I'm gonna wait to answer that question for Inspire, where we'll have an investor update and talk a little bit more about how we're envisioning AI credits impact our overall business. The one thing that I would say is that, you know, we will have ARR that will lag a little bit in linearity with our typical, you know, nice ratable revenue as we'll recognize ARR credits as it's consumed. You know, the biggest impact is, you know, if we sign a new customer that has an AI credit bundle, they won't start consuming it till after onboarding. We definitely see AI credits as a very strong way to lift our NRR and have expansion within our existing customer base.

Brandon Farber: Hey, Richard. I'm gonna wait to answer that question for Inspire, where we'll have an investor update and talk a little bit more about how we're envisioning AI credits impact our overall business. The one thing that I would say is that, you know, we will have ARR that will lag a little bit in linearity with our typical, you know, nice ratable revenue as we'll recognize ARR credits as it's consumed. You know, the biggest impact is, you know, if we sign a new customer that has an AI credit bundle, they won't start consuming it till after onboarding. We definitely see AI credits as a very strong way to lift our NRR and have expansion within our existing customer base.

Speaker #8: The one thing that I would say is that , you know , we will have IRR that will lag a little bit in linearity with our typical , you know , nice routable revenue as we'll recognize AR credits as it's consumed .

Speaker #8: So , you know , the the biggest impact is if we sign a new customer with that has AI credit bundle , they won't start consuming it until after onboarding .

Speaker #8: But we definitely see AI credits as a very strong way to lift our Nr and have expansion within our existing customer base .

Speaker #16: Okay , that's fair . And then I guess the other question is around partnerships . You've been spending a lot of time talking today about see , partnerships .

Richard Tse: Okay, that's fair. Then I guess the other question is around partnerships. You've been spending a lot of time talking today about SI partnerships. I think a few years ago at your conference, you showcased Microsoft from a technology partnership standpoint. When you sort of look at those two types of partnerships, what's your sort of perspective on each in terms of driving lifetime value? I was under the impression that sort of the integration with Microsoft tends to make it stickier and potential to expand those offerings. If that's the case, are you pursuing those type of partnerships as well in addition to these SIs?

Speaker #16: I think a few years ago at your conference , you showcased a Microsoft from a technology standpoint . So when you sort of look at those two types of partnerships , what's your sort of perspective on each in terms of driving lifetime value ?

Speaker #16: I was under the impression that sort of the integration with Microsoft tends to make it stickier and potential to expand those offerings , and if that's the case , are you pursuing those type of partnerships as well ?

Speaker #16: In addition to these Rs .

Alessio Artuffo: Our technology partnerships are an important part of our partnership thesis. On the Microsoft side, I believe you may be referring to our module called Microsoft Teams, which is a module that allows the customers that use Teams to connect to Docebo Suite. It's a module that we're seeing having success in organizations that are Microsoft heavy. In terms of, you know, our overall technology partnerships, what we're savoring and what we're leading with are capabilities that our customers can use to extend the value of the Docebo platform. To give you an example, we have integrated with Docebo tightly, technologies like Skillable for virtual labs or Honorlock for proctoring. I would say, you know, our partnership focus remains more on the go-to-market side.

Speaker #6: Our technology partnerships are an important part of our partnership pieces . We on the on the Microsoft side , I believe you may be referring to our module called Microsoft Teams , which is a module that allows customers to use teams to connect the chatbot to it .

Speaker #6: It's a module that we're seeing having success in organizations that are Microsoft heavy in terms of , you know , our overall technology partnerships , what we're favoring and what we're leading with are capabilities that are customers can use to extend the value of of the platform to give you an example , we have integrated with the chatbot tightly technologies like syllable for virtual or honor lock for proctoring .

Speaker #6: I would say , you know , our partnership focus remains more on the go to market side . And as far as the technology side , we will continue to invest an extent with the integrations with the core platforms like teams , slack and others .

Alessio Artuffo: As far as the technology side, we will continue to invest to some extent, with the integrations with the core platforms like Teams, Slack, and others.

Speaker #16: Got it . Thank you .

Richard Tse: Got it. Thank you.

Speaker #3: We have no further questions . I would like to turn the call back over to Alessio or Tufo for closing remarks .

Operator: We have no further questions. I would like to turn the call back over to Alessio Artuffo for closing remarks.

Speaker #6: Thank you very much for attending and for helping us tell the story of another exciting quarter . As we look forward to seeing you at the end of February for our Q4 results .

Alessio Artuffo: Thank you very much for attending, and for helping us tell a story of another exciting quarter at Docebo. We look forward to seeing you at the end of February for our Q4 results. Thank you.

Speaker #6: Thank you .

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

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