Q2 2026 Docebo Inc Earnings Call

August 7, 2026

Speaker #1: Good morning, everyone, and welcome to the Docebo's second quarter 2026 earnings call. All participants are currently in a listen-only mode. We will open the line for question and answer session momentarily.

Operator: Good morning, everyone, and welcome to Docebo's Q2 2026 Earnings Call. All participants are currently in a listen-only mode. We will open the line for a question and answer session momentarily. Analysts can ask questions by pressing star one on their telephone keypad. If you would like to withdraw your question, again, press star one. We ask that analysts please limit themselves to two questions and return to the queue for any follow-ups.

Speaker #1: Analysts can ask questions by pressing star 1 on their telephone keypad. And if you would like to withdraw your question, again, press star 1.

Speaker #1: 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's Vice President of Investor Relations, Mike McCarthy.

Operator: I'd now like to turn the call over to Docebo's Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.

Speaker #1: Please go ahead, Mike.

Speaker #2: Thank you, Krista. Earlier this morning, Docebo issued its Q2 2026 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, Krista. Earlier this morning, Docebo issued its Q2 2026 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 the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Docebo's public filings, which are available on SEDAR and EDGAR.

Speaker #2: 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.

Mike McCarthy: 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 the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Docebo's public filings, which are available on SEDAR and EDGAR.

Speaker #2: 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 #2: 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.

Speaker #2: 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.

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. Kristen, you can open up the line.

Speaker #2: 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.

Mike McCarthy: 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. Kristen, you can open up the line.

Speaker #2: Now, I'd like to turn the call over to Docebo's CEO, Alessio Artuffo, and our CFO, Brandon Farba. Kristin, you can open up the line.

Speaker #1: If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. Your first question comes from Robert Young with Canaccord Genuity.

Operator: If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. Your first question comes from Robert Young with Canaccord Genuity. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Thanks. Good morning. First place, I'm sure there's lots of questions on this forward-deployed engineer model, so please I'd like to start. How is it going to work alongside the existing professional services motion?

Robert Young: Thanks. Good morning. First place, I'm sure there's lots of questions on this core deployed engineer model, so place I'd like to start. How is it going to work alongside the existing professional services motion? What's the impact you anticipate on revenue and margins, both gross and EBITDA? I think you said that you're hiring FDs, and so where are you in the process of building out that FDE motion?

Speaker #3: What's the impact you anticipate on revenue and margins, both gross and EBITDA? And then I think you said that you're hiring FDEs, and so where are you in the process of building out that FDE motion?

Speaker #4: Good morning, Rob, and it's Alessio. So you are correct. We are starting with hiring a foundational FDE that is intended so that we can build that playbook before we scale that practice further.

Alessio Artuffo: Good morning, Rob. It's Alessio. You are correct. We are starting with hiring a foundational FDE. That is intended so that we can build the playbook before we scale that practice further. The way we think about it is fairly straightforward. We think that on top of our upcoming release, GA of AgentHub and Enterprise Knowledge, both planned in the early fall. We are going to build custom agents workflows that aim to solve for vertical use cases, very specific needs that our top customers to begin with have. Think about solving for specific operational challenges across QSR, healthcare, financial services. We know that these organizations have a data challenge. Everyone has an integration challenge. Everyone has a data discoverability and validity challenge. We are going to have these FDEs help with creating these custom workflows on top of our technology. Now, how does this compound?

Speaker #4: The way we think about it is fairly straightforward. We think that, on top of our upcoming release—GA of Agent Op and Enterprise Knowledge, both planned for early fall—we are going to build custom agent workflows that aim to solve for vertical use cases. Very specific needs that our top customers, to begin with, have.

Speaker #4: Think about solving for specific operational challenges across QSR, healthcare, and financial services. We know that these organizations have a data challenge, and everyone has an integration challenge.

Alessio Artuffo: Think about solving for specific operational challenges across QSR, healthcare, financial services. We know that these organizations have a data challenge. Everyone has an integration challenge. Everyone has a data discoverability and validity challenge. We are going to have these FDEs help with creating these custom workflows on top of our technology. Now, how does this compound?

Speaker #4: Everyone has a data discoverability and validity challenge. And we are going to have these FDEs help with creating these custom workflows on top of our technology.

Speaker #4: Now, how does this compound? How does this create greater value? Our plan is to abstract these agents at a greater product level. And make those agents available more broadly to a broader audience.

Alessio Artuffo: How does this create greater value? Our plan is to abstract these agents at a greater product level and make those agents available more broadly to a broader audience. In terms of monetization, look, we are going live with AgentHub and Enterprise Knowledge in the fall, and we'll update you after that time.

Speaker #4: In terms of monetization, look, we are going live with agent op and knowledge enterprise in the fall, and we'll update you after that time.

Speaker #3: Okay. That's all very helpful. I mean, where is this going to fall inside of the income statement on the cost side? Is it going to be something in bundled in?

Robert Young: Okay. That's all very helpful. Where is this going to fall inside of the income statement on the cost side? Is it going to be something bundled in? Is it going to impact your gross margins, or is it something that's going to be part of your sales motion? I'm trying to understand where it'll impact the margin structure.

Speaker #3: Is it going to impact your gross margins, or is it something that's going to be part of your sales motion? I'm trying to understand where it will impact the margin structure.

Speaker #2: Rob, when we start to

Brandon Farber: Rob, when we start to hire them, it's going to be before the product is released. At the start, it will be more of an R&D type cost. These are going to work with our top 10, top 20 customers. As we think about scaling, charging professional services, this adding usage to our AI, whether that's through credits or fixed price, that's where it flips to gross margin. It really depends on when does it get released, when do we start monetizing. It's either going to be an R&D or a COGS cost.

Speaker #4: to hire them, it's going to be before the product is released. At the start, it will be more of an R&D-type cost. These are going to work with our top 10, top 20 customers.

Speaker #4: As we think about scaling, charging professional services, this adding usage to our AI, whether that's through credits or fixed price, that's where it flips to gross margin.

Speaker #4: So it really depends on when it gets released—when do we start monetizing? So, it's either going to be an R&D or COGS cost.

Speaker #3: Okay. And then second question, just on the confidence in the second half acceleration of ARR, maybe we could talk about where that specifically coming from, what gets you the most excited, and then if you could touch on Q3 seasonality for the FedRAMP government opportunity alongside that, that'd be helpful.

Robert Young: Okay. Second question, just on the confidence in the H2 acceleration of ARR. Maybe you could talk about where that's specifically coming from, what gets you the most excited, and then if you could touch on Q3 seasonality for the FedRAMP government opportunity alongside that. That'd be helpful, and I'll pass the line. Thanks.

Speaker #3: And I'll pass the line. Thanks.

Speaker #4: Yeah, so let me talk a bit about the underlying ARR acceleration. This is the second quarter in a row where we have a re-acceleration, and for sure we're super pleased with that.

Alessio Artuffo: Yeah. Let me talk a bit about the underlying ARR acceleration. This is the Q2 in a row where we have an re-acceleration, and for sure, we're super pleased with that. Rob, if you recall, in November 2025, during a conference call, we referred to 2026 as the year of the enterprise. That's because we had a view into 2026, and had a point of view that the initiatives we were taking on the product and as well as broadly execution, were headed in the direction where we thought that 2026 we're going to show the results of the work we were doing. When I unpack that, I think it's a story of three vectors, right? There is overall execution, where we made investments across the board over the past several years.

Speaker #4: Rob, if you recall, in November of 2025, during a conference call, we referred to 2026 as the year of the enterprise. That’s because we had a view into 2026 and had a point of view that the initiatives we were taking on the product, as well as broadly on execution, were headed in the direction where we thought that 2026 was going to show the results of the work we were doing.

Alessio Artuffo: That's because we had a view into 2026, and had a point of view that the initiatives we were taking on the product and as well as broadly execution, were headed in the direction where we thought that 2026 we're going to show the results of the work we were doing. When I unpack that, I think it's a story of three vectors, right? There is overall execution, where we made investments across the board over the past several years.

Speaker #4: And when I impact that, I think it's a story of three vectors, right? There's overall execution. Where we made investments across the board over the past several years.

Speaker #4: There's a story of product with the acquisition of 365 and the acquisition of Zive, both. And, frankly, a re-acceleration of shipping features in our core product as well, right?

Alessio Artuffo: There is a story of product with the acquisition of 365Talents and the acquisition of Zive both. Frankly, a re-acceleration of shipping features in our core product as well, right? It's not only a story of buying technologies. Then, to characterize growth re-acceleration, I always like to kind of separate our partner motion because it is a subcategory of execution, but it truly has become important. The large majority of our enterprise pipeline, roughly 80%, has a partner involved in some fashion, whether it's a co-sell fashion, whether it's an implement fashion, and most times it's a hybrid of both. Shout out to partners like Deloitte and new partners like NIIT, that are really embedded with our org, and we work super well together. That story of acceleration is, I would say, it hinges on several factors. It's broad-based, right?

Speaker #4: It's not only a story of buying technologies. And then to characterize growth, a re-acceleration, I always like to kind of separate our partner motion because it is a subcategory of execution, but it truly has become important the large majority of our enterprise pipeline, roughly 80%, has a partner involved in some fashion, whether it's a cost sale faction, whether it's a implement faction in most times it's a hybrid of both.

Alessio Artuffo: The large majority of our enterprise pipeline, roughly 80%, has a partner involved in some fashion, whether it's a co-sell fashion, whether it's an implement fashion, and most times it's a hybrid of both. Shout out to partners like Deloitte and new partners like NIIT, that are really embedded with our org, and we work super well together. That story of acceleration is, I would say, it hinges on several factors. It's broad-based, right?

Speaker #4: And shout out to partners like Deloitte and new partners like an IIT that are really embedded with our org and we work super well together.

Speaker #4: So that story of re-acceleration is, I would say, it hinges on several factors. It's broad-based, right? It's showing in that new, it's showing in expansion, it's showing internationally.

Alessio Artuffo: It's showing in net new, it's showing in expansion, it's showing in international. I like that very much because these multiple growth factors don't rely on just one segment doing all the work. As far as the confidence for the future, it's very high. We're extremely pleased with the growth of our pipeline. We look at our pipeline in terms of deals that are significant and material in size, above $500,000, and we think it's a really great time at Docebo, and very excited about the coming quarters. As far as federal pipeline and Q3, look, we think about government more broadly than just federal. We think about government as a combination of our success in state local as well as federal. Q3 is a heavy federal quarter. We don't disclose what's going to happen in the next quarter.

Speaker #4: And I like that very much because these multiple growth factors don't rely on just one segment doing all the work. And as far as the confidence for the future, it's very high.

Speaker #4: We're extremely pleased with the growth of our pipeline. We look at our pipeline in terms of deals that are significant and material in size, about 500K, and we think it's a really great time at Docebo.

Speaker #4: And yeah, very, very excited about the coming quarters. Now, as far as the federal pipeline and Q3, look, we think about government more broadly than just federal.

Alessio Artuffo: As far as federal pipeline and Q3, look, we think about government more broadly than just federal. We think about government as a combination of our success in state local as well as federal. Q3 is a heavy federal quarter. We don't disclose what's going to happen in the next quarter.

Speaker #4: We think about government as a combination of our success in state, local, as well as federal. And quarter three is a heavy federal quarter.

Speaker #4: But we don't disclose what's going to happen in the next quarter. We're just extremely pleased with the pipeline build-up and the execution of our teams.

Alessio Artuffo: We are just extremely pleased with the pipeline build-up and execution of our teams.

Robert Young: Thanks for taking all the questions.

Speaker #3: Thanks for taking all the questions.

Speaker #4: Yeah. Thank you, Rob.

Alessio Artuffo: Yeah. Thank you, Rob.

Speaker #1: Your next question comes from the line of Ryan McDonald with Needham & Company. Please go ahead.

Operator: Your next question comes from the line of Ryan MacDonald with Needham & Company. Please go ahead.

Speaker #3: All right. Thanks for taking my questions. Congrats on a great quarter. Alessia, I wanted to ask about the investments in decision to move into healthcare here.

Ryan MacDonald: Hi. Thanks for taking my questions. Congrats on a great quarter. Alessio, wanted to ask about the investments and Docebo you're going to move into healthcare here. Obviously, interesting large opportunity, highly regulated industry, and I feel like there are some sort of correlations to federal government, and obviously we've had those investments over the last couple of years, and that's still sort of starting to generate a return or hit an inflection point. Can you just talk about sort of the decision to move into healthcare, how you think about the timeline for the return on the investments you're going to make there, and where you see a gap within healthcare organizations that you think Docebo can fill?

Speaker #3: Obviously, interesting large opportunity highly regulated industry. And I feel like there are some sort of correlations to federal government. And And obviously, we've had those investments over the last couple of years, and that's still sort of starting to generate a return or hit an inflection point.

Speaker #3: So, can you just talk about the decision to move into healthcare? How do you think about the timeline for the return on the investments you're going to make there?

Ryan MacDonald: Can you just talk about sort of the decision to move into healthcare, how you think about the timeline for the return on the investments you're going to make there, and where you see a gap within healthcare organizations that you think Docebo can fill?

Speaker #3: And where do you see a gap within healthcare organizations that you think Docebo can fill?

Speaker #4: Yes, awesome. Ryan, your premise in seeing some parallels with the investments that we made broadly into government—I think it's very astute. I agree with you.

Alessio Artuffo: Yes. Awesome. Ryan, your premise in seeing some parallels with the investments that we made broadly into government, I think it's very astute. I agree with you. There are several parallels. First, let me ground us in the context of the healthcare market as we have studied it. We value this, so we see this as a roughly a $3 billion TAM over a roughly a $30 billion corporate learning market that we already operate in. We already have an important base of healthcare customers, call it roughly $10 million of ARR. We've acquired the $10 million of ARR notwithstanding certain gaps of knowledge and product that we are now much more educated about.

Speaker #4: There are several parallels. First, let me ground us in the context of the healthcare market as we have studied it. We value this. We see this as roughly a $3 billion TAM over a roughly $30 billion corporate learning market that we already operate in.

Alessio Artuffo: We value this, so we see this as a roughly a $3 billion TAM over a roughly a $30 billion corporate learning market that we already operate in. We already have an important base of healthcare customers, call it roughly $10 million of ARR. We've acquired the $10 million of ARR notwithstanding certain gaps of knowledge and product that we are now much more educated about.

Speaker #4: We already have an important base of healthcare customers—call it roughly $10 million of ARR. And we've acquired the $10 million of ARR notwithstanding certain gaps in knowledge and product that we are now much more educated about.

Speaker #4: And so I would say that similarly to what happened in the past with the state and local education market, we have operated opportunistically but we have not been extremely focused and strategic in the way we've addressed this market.

Alessio Artuffo: I would say that similarly to what happened in the past with the state and local education market, we have operated opportunistically, but we have not been extremely focused and strategic in the way we've addressed this market. Now, as we are a much more mature company, as we have matured our GTM engine, we believe that as an horizontal player, every opportunity we have to become more efficient in our GTM engine and more efficient in the way we address customers' needs and build products for targeted audiences, the better off we're going to be. We're going to be better at in our success of adoption. We're going to be better in our win rates. It was a no-brainer to start with healthcare because we believe the distance between where we are today, capability wise, and the optimal scenario is very much in reach.

Speaker #4: Now, as we are a much more mature company, as we have matured our GTM engine, we believe that as an horizontal player, every opportunity we have to become more efficient in our GTM engine and more efficient in the way we address customers' needs and build products for targeted audiences, the better off we're going to be.

Alessio Artuffo: Now, as we are a much more mature company, as we have matured our GTM engine, we believe that as an horizontal player, every opportunity we have to become more efficient in our GTM engine and more efficient in the way we address customers' needs and build products for targeted audiences, the better off we're going to be. We're going to be better at in our success of adoption. We're going to be better in our win rates. It was a no-brainer to start with healthcare because we believe the distance between where we are today, capability wise, and the optimal scenario is very much in reach.

Speaker #4: We're going to be better in our success of adoption. We're going to be better in our win rates. And so it was a no-brainer.

Speaker #4: To start with healthcare because we believe the distance between where we are today capability-wise and the optimal scenario is very much in reach. And we don't have to do years of work to be in an optimal scenario to double our win rates.

Alessio Artuffo: We don't have to do years of work to be in an optimal scenario to double our win rates. I think we have months of work as opposed to years of work. Now, healthcare is a broad definition and depending on how you slice and dice the verticals, we already have a view that is a multi-year view, after which we would tackle life sciences. Life sciences carries along a bit more complexity in terms of technical requirements, which we are already partially addressing, but we're preparing ourselves over the next 12, 24 months to go even deeper. What else can I tell you? I think this is a great market. We're already winning in it. I mentioned it. It's a motion where we're going to invest in product, we're going to invest in the partner ecosystem.

Speaker #4: I think we have months of work, as opposed to years of work. Now, healthcare is a broad definition, and depending on how you slice and dice the verticals, we already have a view that is a multi-year view, after which we would tackle life sciences.

Speaker #4: Life sciences carries along a bit more complexity in terms of technical requirements, which we are already partially addressing, but we're preparing ourselves over the next 12 to 24 months to go even deeper.

Alessio Artuffo: Life sciences carries along a bit more complexity in terms of technical requirements, which we are already partially addressing, but we're preparing ourselves over the next 12, 24 months to go even deeper. What else can I tell you? I think this is a great market. We're already winning in it. I mentioned it. It's a motion where we're going to invest in product, we're going to invest in the partner ecosystem.

Speaker #4: What else can I tell you? I think this is a great market. We're already winning in it—I mentioned it. It's a motion where we're going to invest in products.

Speaker #4: We're going to invest in the partner ecosystem. We have partners that are really great in the healthcare industry, and we work closely with them.

Alessio Artuffo: We have partners that are really great in the healthcare industry, and we work closely with them. Also, when I mentioned the content network, healthcare is also a story of content, our technology being such that you can now aggregate multiple content partners, and we can augment that part is going to be important for our healthcare customers. Listen, one further validation point, we know that in healthcare alone, there are organizations that are very sizable. Frankly, in ARR, they are comparable to Docebo or in that range. All they do is healthcare learning. Just that validates that if we approach this deeply and become more specialized, which I think is very much in reach, we have an additional growth vector. Very excited about it.

Speaker #4: And also, when I mentioned the content network, healthcare is also a story of content. Our technology being such that you can now aggregate multiple content partners and we can augment that part is going to be important for our healthcare customers.

Speaker #4: And listen, one further validation point, we know that in healthcare alone, there are organizations that are very sizable. Frankly, in ARR, they are comparable to Docebo in that range.

Alessio Artuffo: Listen, one further validation point, we know that in healthcare alone, there are organizations that are very sizable. Frankly, in ARR, they are comparable to Docebo or in that range. All they do is healthcare learning. Just that validates that if we approach this deeply and become more specialized, which I think is very much in reach, we have an additional growth vector. Very excited about it.

Speaker #4: All they do is healthcare—healthcare learning. And just that validates that if we approach this deeply and become more specialized, which I think is very much in reach, we have an additional growth vector.

Speaker #4: So very excited about it.

Speaker #3: Yeah. Super helpful context and color there. And then maybe as a follow-up, so as we think about sort of let's call it the increasing sort of verticalization of the platform with specific verticals where you've seen some big opportunities, can you just talk about how you're seeing or viewing the balance of sort of the pipeline of opportunities for growth sort of within some of your, let's call it your core markets or sort of more horizontal applications versus moving more into vertically specific applications?

Ryan MacDonald: Yeah. Super helpful context and color there. Then maybe as a follow-up. As we think about your sort of, let's call it the increasing sort of verticalization of the platform with specific verticals where you've seen some big opportunities, can you just talk about how you're seeing or viewing the balance of sort of the pipeline of opportunities for growth sort of within some of your, let's call it your core markets or sort of more horizontal applications versus moving more into vertically specific applications? Is the healthcare expansion being done with sort of a view of more of a, let's call it a shorter runway or a limited opportunity within sort of broader enterprise? Or is this just based off of seeing some really nice early success, see a product market fit for the solution, naturally going after a new opportunity? Thanks.

Speaker #3: Is the healthcare expansion being done with a view toward more of a, let's call it, a shorter runway or limited opportunity within the broader enterprise?

Ryan MacDonald: Is the healthcare expansion being done with sort of a view of more of a, let's call it a shorter runway or a limited opportunity within sort of broader enterprise? Or is this just based off of seeing some really nice early success, see a product market fit for the solution, naturally going after a new opportunity? Thanks.

Speaker #3: Or is this just based off seeing some really nice early success, seeing a product-market fit for the solution, and so naturally going after a new opportunity?

Speaker #3: Thanks.

Speaker #4: Yeah, I think a bit the opposite of that. Again, we've built Docebo up to where it is today as a horizontal player, with the exception of government, which we started specializing in a while ago.

Alessio Artuffo: Yeah. I think a bit the opposite of that. Again, we've built Docebo up to where it is today as a horizontal player, with the exception of government, which we started specializing in a while, we've always recognized that there is greater benefit in the earlier stages of company as being a generalist. As you grow up as a business, you realize that the generalist categorization starts to become an impediment to healthy growth. It shows in every function of the company. It shows also in the way we support the customers. I'm a big believer that in order to doing a great job with customers, you need to understand their business deeply, and you need to address their needs deeply. When you have, just for a sheer example, somebody in a sales executive capacity that at 9:00 a.m.

Speaker #4: We've always recognized that there is greater benefit in the earlier stages of company being a generalist. As you grow up as a business, you realize that the generalist categorization starts to become an impediment to healthy growth.

Speaker #4: And it shows in every function of the company. It shows also in the way we support the customers. This is a big believer that in order to doing a great job with customers, you need to understand their business deeply and you need to address their needs deeply.

Alessio Artuffo: It shows also in the way we support the customers. I'm a big believer that in order to doing a great job with customers, you need to understand their business deeply, and you need to address their needs deeply. When you have, just for a sheer example, somebody in a sales executive capacity that at 9:00 a.m.

Speaker #4: And when you have just for a sheer example, somebody in a sales executive capacity that at 9:00 AM in the morning has a conversation with a manufacturer and at 11:00 AM with a security company and at 2:00 PM with a healthcare organization having that depth of knowledge of the business problems that each of these carry, it's incredibly hard to scale.

Alessio Artuffo: in the morning has a conversation with a manufacturer, at 11:00 a.m. with a security company, at 2:00 p.m. with a healthcare organization, having that depth of knowledge of the business problems that each of these carry is incredibly hard to scale. I believe that it's incumbent upon us, as we continue to mature, to taking the most valuable verticals and creating a motion around it. The caveat there is there an opportunity to also verticalize the product and create capabilities that go beyond the lingo and the jargon? If there is, the combination of that product build alongside a knowledge creates an unstoppable force and an absolute differentiation in the market.

Speaker #4: And so, I believe that it's incumbent upon us, as we continue to mature, to take the most valuable verticals and create emotion around them.

Speaker #4: And the caveat there is, is there an opportunity to also verticalize the product and create capabilities that go beyond the lingo and the jargon?

Alessio Artuffo: The caveat there is there an opportunity to also verticalize the product and create capabilities that go beyond the lingo and the jargon? If there is, the combination of that product build alongside a knowledge creates an unstoppable force and an absolute differentiation in the market.

Speaker #4: And if there is, the combination of that product build alongside knowledge creates an unstoppable force and an absolutely differentiation in the market. So we don't see it as a need to find a new pocket, rather as a desire to win a higher rate and be seen more as a leader in those verticals.

Alessio Artuffo: We don't see it as a need to find a new pocket, rather as a desire to win at a higher rate and be seen more as a leader in those verticals.

Speaker #3: Thanks a lot.

Brandon Farber: Thanks a lot.

Ryan MacDonald: Thanks a lot.

Speaker #1: Your next question comes from the line of Aaron Kyle with CIBC. Please go ahead.

Operator: Your next question comes from the line of Erin Kyle with CIBC. Please go ahead.

Speaker #5: Hi, good morning, and thanks for taking the questions. Alessio, maybe a question for you on the Skills side. You've described it as a bit of a second door into new logos and a retention lever.

Erin Kyle: Hi, good morning, and thanks for taking the questions. Alessio, maybe a question for you on the skills side. You've described it as a bit of a second door into new logos and a retention lever. Maybe in Q2, can you speak to how many enterprise deals were influenced by having that skills capability, and do you see it lifting your win rates versus a year ago?

Speaker #5: So maybe in Q2, can you speak to how many enterprise deals were influenced by having that skills capability? And do you see it lifting your win rates versus a year ago?

Speaker #4: Sure. Thank you for the question. First, let me tell you, we are beyond pleased with the progress we've made so far. In the integration process of 365 Talents, it's like all integrations and acquisitions, there are always challenges.

Alessio Artuffo: Sure. Thank you for the question. First let me tell you, we are beyond pleased with the progress we've made so far in the integration process of 365Talents. It's like all integrations and acquisitions, there are always challenges, and we don't shy away from those, but the results speak for themselves. We are six months in, frankly, our pipe targets, we've blown that up. We are very pleased with seeing the pipeline growth, including 365Talents in enterprise combined offering. While I can't tell exactly the percentage of deals and attach rates, I don't know that that's something that we are necessarily disclosing. We've mentioned a couple of wins that are very significant in this quarter. One being one of the world's largest telecom and networking companies, and one being the world's largest supplier of automotive safety systems.

Speaker #4: And we don't shy away from those. But the results speak for themselves. We are six months in, frankly, and our pipe targets, we've blown that up.

Alessio Artuffo: We are very pleased with seeing the pipeline growth, including 365Talents in enterprise combined offering. While I can't tell exactly the percentage of deals and attach rates, I don't know that that's something that we are necessarily disclosing. We've mentioned a couple of wins that are very significant in this quarter. One being one of the world's largest telecom and networking companies, and one being the world's largest supplier of automotive safety systems.

Speaker #4: We are very pleased with seeing the pipeline growth, including 365 in enterprise combined offering. While I can tell you exactly the percentage of deals in the attached rates, I don't know that that's something that we are necessarily disclosing.

Speaker #4: We've mentioned a couple of wins that are very significant. In this quarter, one being the world's largest telecom and network, one of the world's largest telecom and networking companies and one being the world's largest supplier of automotive safety systems.

Speaker #4: And both of them would have we would not have been at the table with them had we not offered the capabilities of 365. And to me, that is more than an initial validation.

Alessio Artuffo: We would not have been at the table with them had we not offered the capabilities of 365Talents. To me, that is more than an initial validation. I think it really validates what we originally thought. When I look at our pipeline, there are many more of these coming up. The next step here is the job isn't done, to be clear. The job is far from being done. What we need to do and what we're doing is progressing at fast speed our product integration, so that the story of one plus one equals three becomes even more tangible, even in the product and not just in theory. We are ahead of schedule in that regard. Very pleased with our integration team. Additionally, I think the story wraps and comes all together as we launch AgentHub and we develop further our agentic efforts.

Speaker #4: I think it really validates what we originally thought. And when I look at our pipeline, there are many more of these. Coming up. The next step here is the job isn't done, to be clear.

Speaker #4: The job is far from being done. What we need to do and what we're doing is progressing at fast speed our product integration so that the story of one plus one equals three becomes even more tangible even in the product and not just in theory.

Alessio Artuffo: What we need to do and what we're doing is progressing at fast speed our product integration, so that the story of one plus one equals three becomes even more tangible, even in the product and not just in theory. We are ahead of schedule in that regard. Very pleased with our integration team. Additionally, I think the story wraps and comes all together as we launch AgentHub and we develop further our agentic efforts.

Speaker #4: And we are ahead of schedule in that regard. Very pleased with our integration team. And in addition, I think the story wraps and comes it all together as we launch Agent Hub and we develop further our agentic efforts.

Speaker #4: Agents that reason around data and take into consideration skills in order to train people on what they want and need is the ultimate connection of all the points here.

Alessio Artuffo: Agents that reason around data and take into consideration skills in order to train people on what they want and need is the ultimate connection of all the points here. Again, I can't tell you how excited I am about 365Talents moving forward. More work to do. On the standalone side, we haven't even scratched the surface of the potential of this as a secondary product, and that's what we ought to do in 2027 and beyond.

Speaker #4: And again, I can tell you how excited I am about 365 moving forward. More work to do and understand alongside we haven't even scratched the surface.

Speaker #4: ...of the potential of this as a secondary product, and that's what we ought to do in 2027 and beyond.

Speaker #5: Thanks, that's helpful color. And then, maybe just on the sales cycle side—we've seen some industry headlines recently that software sales cycles have begun to compress across most ACB buckets.

Erin Kyle: Thanks. That's helpful color. Then maybe just on the sales cycle side, we've seen some industry headlines recently that software sales cycles have begun to compress across most ACV buckets. Just wondering if Docebo's seeing this at all across your enterprise customers.

Speaker #5: Just wondering if Docebo is seeing this at all across your enterprise customers?

Speaker #4: Hey, Aaron. We have not seen that as of today. If anything, in H1, we've seen sales cycles decrease in a number of segments. Now, a lot of that is related to execution.

Brandon Farber: Hey, Erin. We have not seen that as of today. If anything, in H1, we've seen sales cycles decrease in a number of segments. Now, a lot of that is related to execution. If you recall, Mark, our new CRO came in roughly July of last year, came in, did some tweaks and changed some processes that we're seeing fruits of that labor in H1. The commentary that you're referring to of other software companies seeing elongated sales cycles is not something we're seeing today.

Speaker #4: If you recall, our new CRO came in around July of last year, came in, did some nips, tweaks, and changed some processes that were seen for that labor.

Speaker #4: And in H1, but the commentary that you're referring to of other software companies seeing elongated sales cycles is not something we're seeing today.

Speaker #5: Sorry, Brandon, just to clarify, we were actually seeing headlines that sales cycles were decreasing, not elongating. So, good to see that Docebo is seeing the same.

Erin Kyle: Sorry, Brandon, just to clarify, we were actually seeing headlines that sales cycles were decreasing, not elongating. Good to see that Docebo's seeing the same.

Speaker #4: Yes, correct. Yeah.

Brandon Farber: Yes, correct. Yep.

Speaker #1: Your next question comes from the line of George Sutton with Craig-Hallum. Please go ahead.

Operator: Your next question comes from the line of George Sutton with Craig-Hallum. Please go ahead.

Speaker #3: Thank you. Alessio, you called out NIT, I'm curious if you could just give us a sense of the go-to-market with them. And is that one of the reasons why you're seeing the enterprise strength that you're seeing?

George Sutton: Thank you. Alessio, you called out NIIT. I'm curious if you could just give us a sense of the go-to-market with them. Is that one of the reasons why you're seeing the enterprise strength that you're seeing?

Speaker #4: George, for sure. NIIT is a relatively new partner. I called them out in the context of our partner motion being a significant contributor to our ARR re-acceleration.

Alessio Artuffo: George, for sure. NIIT is a relatively new partner. I called them out in the context of our partner motion being a significant contributor to our ARR re-acceleration. Kudos to the partners and to our partnership teams and broadly our GTM teams for the way we're leveraging this partner motion. It's a lot of work, and it's not just over the past few months. I wouldn't regard a single partner as part of this. NIIT is a relatively new partner. We're doing great work with them. They have a great penetration. I would equally regard the partners that we worked with longer, like Deloitte, as a firm that is very aligned with the way we operate and we're very close with. Yeah, that's all I have to say about that.

Speaker #4: Kudos to the partners and to our partnership teams, and broadly, our GTM teams for the way we're leveraging this partner motion. It's a lot of work, and it's not just over the past few months.

Speaker #4: And I wouldn't regard a single partner as part of this. NIIT is a relatively new partner. We're doing great work with them. They have a great penetration and I would equally regard partners that we worked with longer, like Deloitte, as a firm that is very aligned with the way we operate and we're very close with.

Alessio Artuffo: NIIT is a relatively new partner. We're doing great work with them. They have a great penetration. I would equally regard the partners that we worked with longer, like Deloitte, as a firm that is very aligned with the way we operate and we're very close with. Yeah, that's all I have to say about that.

Speaker #4: So yeah, that's all I have to say about that.

Speaker #3: So, the topic of the week in AI—or certainly one of them—has been around rogue agents. And I'm curious, with your Agent Hub, how can you give confidence to customers that you've built proper guardrails in to protect them?

George Sutton: The topic of the week in AI, or certainly one of them, has been around rogue agents. I'm curious with your AgentHub, how can you give confidence to customers that you've built proper guardrails in to protect them?

Speaker #4: Yeah, yeah. Look, first of all, our agents' technology is something that we've been working on for a while. We have a very sophisticated team in our AI division that has been doing this for a long time.

Alessio Artuffo: Yeah. Look, first of all, our agents technology is something that we've been working on for a while. We have a very sophisticated team in our AI team that has been doing this for a long time. I trust their knowledge and expertise and depth in this area. Our CTO and I have a very strong point of view on the value of Docebo operating in the enterprise space sits very much also needs reliability, safety, and security. Everything we're going to be building is going to have a strong point of view on safeguards and guardrail standards. Frankly, George, I think it's a new territory, and we're going to be working closely with our customers and their security officers to progress how we document this and how we give confidence to everyone that what we're building is as bulletproof as it can be.

Speaker #4: I trust their knowledge, expertise, and depth in this area. Our CTO and I have a very strong point of view on the value of Docebo operating in the enterprise space. It sits very much also in its reliability.

Speaker #4: And safety and security. So everything we're going to be building is going to have a strong point of view on safeguards and guardrail standards. And frankly, George, I think it's new territory.

Alessio Artuffo: Everything we're going to be building is going to have a strong point of view on safeguards and guardrail standards. Frankly, George, I think it's a new territory, and we're going to be working closely with our customers and their security officers to progress how we document this and how we give confidence to everyone that what we're building is as bulletproof as it can be.

Speaker #4: And we're going to be working closely with our customers and their security officers to progress how we document this and how we give confidence to everyone that we're building is as bulletproof as it can be.

Speaker #3: Perfect. Thank you.

George Sutton: Perfect. Thank you.

Speaker #1: Your next question comes from the line of Matthew Vanvellet with Cantor Fitzgerald. Please go ahead.

Operator: Your next question comes from the line of Matthew VanVliet with Cantor Fitzgerald. Please go ahead.

Speaker #2: Yeah, good morning. Thanks for taking the question. I guess as you look at expanding the product platform into healthcare and a couple other areas, you talked about today, and then integrating 365, what is the view from here on future M&A in a broader capital allocation strategy?

Matthew VanVliet: Yeah, good morning. Thanks for taking the question. I guess as you look at expanding the product platform into healthcare and a couple other areas you talked about today, and then integrating 365Talents, what is the view from here on future M&A in a broader capital allocation strategy?

Alessio Artuffo: I'll start, and I don't know if Brandon wants to then follow on the specifics for capital allocation. I would say, in pure business terms, we have executed two M&As with 365Talents and Zive. Different profile in terms of cost, and frankly, different profile in terms of product category and capabilities and whatnot. That has given us the point of view that we have a lot of work to do to truly benefit from what we have acquired. We're well ahead of integration schedule, but the integration and the work that now we can do on top of these technologies and alongside these teams, it's very significant. As a result, we are just incredibly focused on integrating and extracting value and building for future capabilities. We remain opportunistic. We always look at the market.

Speaker #4: I'll start and I know Brandon was in full on the specifics for capital allocation, but I would say in pure business terms, we have executed two M&As with 365 and Zive.

Speaker #4: Different profile in terms of cost, and frankly, different profile in terms of product category, capabilities, and whatnot. But that has given us the point of view that we have a lot of work to do to truly benefit from what we have acquired.

Speaker #4: We're well ahead of integration schedule, but the integration and the work that now we can do on top of these technologies and alongside these teams it's very significant.

Alessio Artuffo: We're well ahead of integration schedule, but the integration and the work that now we can do on top of these technologies and alongside these teams, it's very significant. As a result, we are just incredibly focused on integrating and extracting value and building for future capabilities. We remain opportunistic. We always look at the market.

Speaker #4: As a result, we are just incredibly focused on integrating and extracting value, and building for future capabilities. We remain opportunistic; we always look at the market.

Alessio Artuffo: We don't disregard any opportunity, but M&A presently, in terms of net new deals, is not our primary focus. Brandon?

Speaker #4: We don't disregard any opportunity. But M&A, presently, in terms of net new deals, is not our primary focus, Brandon. On capital allocation, it's something we think about daily.

Brandon Farber: Yeah. On capital allocation, it's something we think about daily. As different variables change, our priorities change. Right now, we look at stock price, and we believe it is undervalued. Based on the stock price today, we believe the best capital allocation is buying back shares. That could change in a couple weeks, could change in months, depending on how the share price does. We think about interest rates. We think about opportunistic M&A. It's a daily equation, and right now, as Alessio mentioned, M&A is not top priority. When we look at the stock price, buying back shares is.

Speaker #4: As different variables change, our priorities change. Right now, we look at the stock price and believe it is undervalued. Based on the stock price today, we believe the best capital allocation is buying back shares.

Speaker #4: That could change in a couple of weeks, could change in months depending on how the share price does. We think about interest rates. We think about opportunistic M&A.

Speaker #4: So it's a daily equation. And right now, as Alessio mentioned, M&A is not a top priority. And when we look at the stock price, buying back shares is.

Speaker #2: Okay, very helpful. And then you mentioned the success of the partner community helping grow here. How should we think about sort of the size and scale of that partner community?

Matthew VanVliet: Very helpful. You mentioned the success of the partner community helping you grow here. How much can you think about sort of the size and scale of that partner community? Are you trying to just maybe focus on going broader and deeper with the partners you have, and developing those relationships? Is there still build-out of new partners into the ecosystem that you see on the roadmap?

Speaker #2: Are you trying to just maybe focus on going broader and deeper with the partners you have and developing those relationships? Or is there still build-out of new partners to enter the ecosystem that you see on the roadmap?

Speaker #4: There's a great deal of opportunity because the world of partner has in our mind different connotations. You have different categories of partners. Different specialties, different verticalizations, different market positions.

Alessio Artuffo: There's a great deal of opportunity because the word partner has in our mind, different connotations. You have different categories of partners, different specialties, different verticalizations, different market positions. Think about content partners are a very important part of our business. We partner with several great companies in that area, and it's plausible that we will increase the portfolio even more in the future. System integrators are the ones that we tend to think immediately more of in enterprise context. There is different degrees of system integrators. Some are regional, some are more global, some are very much specialized around certain verticals and sectors. For example, we work closely with a partner called Tier 1, a great firm that has a great deal of expertise in the healthcare sector. It's important to have a broad-based, varied strategy around partners.

Speaker #4: Think about content partners are a very important part of our business. We partner with several great companies in the area and it will be it's plausible that we will increase the portfolio even more in the that we tend to think immediately more of in enterprise context.

Alessio Artuffo: System integrators are the ones that we tend to think immediately more of in enterprise context. There is different degrees of system integrators. Some are regional, some are more global, some are very much specialized around certain verticals and sectors. For example, we work closely with a partner called Tier 1, a great firm that has a great deal of expertise in the healthcare sector. It's important to have a broad-based, varied strategy around partners.

Speaker #4: But there are different degrees of system integrators. Some are regional, some are more global. Some are very much specialized around certain verticals and sectors. For example, we work closely with a partner called Tier One, a great firm that has a great deal of expertise in the healthcare sector.

Speaker #4: And it's important to have a broad base of varied strategy around partners. So our job, frankly, is to become in CRISPR and CRISPR and more clear as to how to couple partners in the areas where we want to win and continue to execute our GTM together.

Alessio Artuffo: Our job, frankly, is to becoming crisper and crisper and more clear as to how to couple partners in the areas where we want to win and continue to execute our GTM together. There's also partnerships that are more product-attached partnerships. I can think of marketplaces initiatives like AWS, where it's less of a commercial-first motion, but it's the ability to attach onto big commercial engines like the Amazon AWS one to enable customers to buy using credits. We've had a lot of deals and customers that have preferred that buying modality as opposed to a direct buying modality. All these avenues of buying, the way we think about it is how can we reduce the risk and friction of purchasing for the customer.

Speaker #4: There are also partnerships that are more product-attached partnerships. I can think of marketplace initiatives like AWS, where it's less of a commercial-first motion, but it's the ability to attach onto big commercial engines like the Amazon AWS one to enable customers to buy using credits.

Speaker #4: We've had a lot of deals and customers that have preferred that buying modality as opposed to a direct buy modality. And all these avenues of buying—the way we think about it is: how can we reduce the risk and friction of purchasing for the customer?

Alessio Artuffo: We've had a lot of deals and customers that have preferred that buying modality as opposed to a direct buying modality. All these avenues of buying, the way we think about it is how can we reduce the risk and friction of purchasing for the customer.

Speaker #2: Great. Thank you.

Matthew VanVliet: Great. Thank you.

Speaker #1: Your next question comes from the line of John Chow with TD Cowan. Please go ahead.

Operator: Your next question comes from the line of John Shao with TD Cowen. Please go ahead.

Speaker #3: Good morning, guys. Thanks for taking my question. Maybe one more question on the healthcare vertical. So could you compare the healthcare opportunity today to where government was when you first began investing fat ramp?

John Shao: Morning, guys. Thanks for taking my question. Could you compare the healthcare opportunity today to where government was when you first began investing in FedRAMP? What kind of milestones should investors expect over the next 12 to 18 months to gauge the success?

Speaker #3: And what kind of milestone should investors expect to over the next 12 to 18 months to gauge the success?

Speaker #4: Great question. So the first milestones are going to be setting up the team for success. We are going to be staffing an organization across product and GTM to really conquer this new vertical while we continue by the way in parallel to win in the vertical.

Alessio Artuffo: Great question. The first milestones are going to be setting up the team for success. We are going to be staffing an organization across product and GPM to really conquer this new vertical while we continue, by the way, in parallel to winning the vertical. It's a bit like creating a more sophisticated plane while we fly already a plane. Once we have the team in seat, which is we're working on actively, then comes it's org readiness, it's the development of runbooks, it's the development of specific vertical product roadmap that allows us to have the confidence that we're executing towards something tangible that leads to improved win rates, that it leads to customer satisfaction in general. That will occur over the next few quarters.

Speaker #4: It's a bit like creating a more sophisticated plane while we fly already a plane. So once we have the team in seat, which is we're working on actively, then comes the development of it's org readiness.

Alessio Artuffo: Once we have the team in seat, which is we're working on actively, then comes it's org readiness, it's the development of runbooks, it's the development of specific vertical product roadmap that allows us to have the confidence that we're executing towards something tangible that leads to improved win rates, that it leads to customer satisfaction in general. That will occur over the next few quarters.

Speaker #4: It's the development of runbooks. It's the development of a specific vertical product roadmap that allows us to have the confidence that we're executing towards something tangible, which then leads to improved win rates and to customer satisfaction in general.

Speaker #4: And that will occur over the next few quarters. I guess differently from federal, okay, in this category, I want to emphasize, is that we're already winning significant customers in healthcare right now.

Alessio Artuffo: I guess differently from federal, okay, in this category, I want to emphasize, is that we're already winning significant customers in healthcare right now. Some of these requirements at times become more stringent and at times are a little looser. It's not that federal is either you have FedRAMP or you don't have FedRAMP. With healthcare, it's our ability to increase our right to win is going to be dependent upon how fast we execute on the people and product vectors. That's as simple as that. The faster we do all of the above, the faster we're going to increase our share of wallet in that industry.

Speaker #4: And some of these requirements at times become more stringent and at times are a little looser. And it's not that federal is either you have FedRAMP or you don't have FedRAMP.

Speaker #4: With healthcare, it's our ability to increase our right to win is going to be dependent upon how fast we execute on the people and product vectors.

Speaker #4: That's as simple as that. And so the faster we do, all of the above, the faster we're going to increase our share of wallet in that industry.

Speaker #3: Got it. And on FDE, I know it's still relatively early, but could you maybe talk about the revenue opportunity? Is it recurring or one-time?

John Shao: Got it. On FDE, I know it's still relatively early, but could you maybe talk about the revenue opportunity? Is it recurring or one-time? Maybe the margin profile.

Speaker #3: And maybe the margin profile?

Speaker #4: No, I'm hesitant to share details that have not been fully ironed out yet. I described the FD opportunity on a principle basis because we believe that in this AI era, customers are more and more in need of working with true builders.

Alessio Artuffo: I'm hesitant to share details that have not been fully ironed out yet. I describe the FDE opportunity on a principle basis because we believe in this AI era, customers are more and more in need of working with true builders, and that's what we're prepared to do. We want to really enter in organizations and not just onboard them and let them do the work. We want to do the work with them and for them towards their own personalized outcomes. How does this translate in a recurring model and the marginality of it? It's something that, of course, we're thinking about deeply, and we believe we have good constructs, but it's perhaps a bit premature to share in this call.

Speaker #4: And that's what we're prepared to do. We want to really enter in organizations and not just onboard them and let them do the work.

Speaker #4: We want to do the work with them and for them to work their own personalized outcomes. How does this translate in a recurring model?

Alessio Artuffo: We want to do the work with them and for them towards their own personalized outcomes. How does this translate in a recurring model and the marginality of it? It's something that, of course, we're thinking about deeply, and we believe we have good constructs, but it's perhaps a bit premature to share in this call.

Speaker #4: And the marginality of it. It's something that, of course, worth thinking about deeply. And we believe we have good constructs, but it's perhaps a premature to share in this call.

Speaker #4: And I feel more comfortable that we're going to have a more polished point of view as we talk in November, post our AJW release, which is going to be in the fall.

Alessio Artuffo: I feel more comfortable that we're going to have a more polished point of view as we talk in November post our agent release, which is going to be in the fall.

Speaker #3: That's great. Thank you.

John Shao: That's great. Thank you.

Speaker #4: Thank you.

Alessio Artuffo: Thank you.

Speaker #1: As a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue.

Operator: As a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead.

Speaker #1: Your next question comes from the line of Ken Wong with Oppenheimer. Please go ahead.

Speaker #2: Fantastic. Thanks for taking my question. Brandon, I wanted to circle up on the guidance a little bit. You guys have a second straight quarter of accelerating underlying ARR.

Ken Wong: Fantastic. Thanks for taking my question. Brandon, I wanted to circle up on the guidance a little bit. You guys have a second straight quarter of accelerating underlying ARR. Just want to get a sense for what level of prudence is baked into the guidance. Have you guys changed your philosophy in terms of handicapping some of the big deal pipeline? Any color there would be helpful.

Speaker #2: Just want to get a sense for what level of prudence is baked into the guidance. Have you guys changed your philosophy in terms of handicapping some of the big deal pipeline?

Speaker #2: Any color there would be helpful.

Speaker #5: Yeah, maybe let's just take a step back and look at the actual revenue increase. So we raised our guidance by three and a half million dollars relative to last quarter.

Brandon Farber: Yeah. Maybe let's just take a step back and look at the actual revenue increase. We raised our guidance by $3.5 million relative to last quarter. Transparently, $1.6 million of that was from our Q2 beat, and $2.1 million of that is the flow through to H2. Even within that $2.1 million, you have $1.2 million of that being professional services and closer to $900,000 of subs. What's really driving that increase? What assumptions are we changing? When we go through our different segments, mid-market, our assumptions are pretty much flat. We've seen consistent performance. The team is still performing great. There's no changes. governments, we already had strong expectations built into our guidance. We knew we were going to execute in Q2. We had a record flat quarter in Q2. Q3, we do expect a solid FedRAMP quarter, and that was always baked into our guide.

Speaker #5: Transparently, $1.6 million of that was from our Q2, with $2.1 million of that as the flow through to H2. And then, even within that $2.1 million, you have $1.2 million of that being professional services and closer to $900K of subs.

Speaker #5: So what's really driving that increase? What assumptions are we changing? When we go through our different segments, mid-market, our assumptions are pretty much flat.

Brandon Farber: What's really driving that increase? What assumptions are we changing? When we go through our different segments, mid-market, our assumptions are pretty much flat. We've seen consistent performance. The team is still performing great. There's no changes. governments, we already had strong expectations built into our guidance. We knew we were going to execute in Q2. We had a record flat quarter in Q2. Q3, we do expect a solid FedRAMP quarter, and that was always baked into our guide.

Speaker #5: We've seen consistent performance. The team is still performing great. There's no changes. Government, we already had strong expectations built into our guidance. So we knew we were going to execute in Q2.

Speaker #5: We had a record slight quarter in Q2. Q3, we do expect a solid FedRAMP quarter. And that was always baked into our guide. So what changed?

Brandon Farber: What changed? It's really enterprise. We came into 2026, I talked about it in February, where we assumed roughly flat enterprise growth, which was conservative. We saw two quarters of great performance, strong win rates, good pipeline, that's given us the confidence to increase our enterprise assumptions in H2. That's really what's driving the incremental revenue guide.

Speaker #5: It's really enterprise. We came into 2026. I talked about it in February, where we assumed roughly flat enterprise growth, which was conservative. We saw two quarters of good performance, strong win rates, good pipeline.

Speaker #5: And that's given us the confidence to increase our enterprise assumptions in H2. And that's really what's driving the incremental revenue guide.

Speaker #2: Fantastic. And then on the other half of the guidance—you guys kept EBITDA unchanged. I think you called out healthcare as an investment that you’re making in the back half.

Ken Wong: Fantastic. The other half of the guidance, you guys kept EBITDA unchanged. I think you called out healthcare as an investment that you guys are making in the back half. How should we think about the run rate of that investment? Is this just a small start that ramps up? Is this something that we should expect to carry into 2027?

Speaker #2: How should we think about the run rate of that investment? Is this just a small start that ramps up? Is this something that we should expect to carry into 2027?

Speaker #5: It's going to be a relatively small pod for H2. The expenses will certainly continue to grow into 2027, but how we're thinking about it is that H2 is more heavy on R&D investments.

Brandon Farber: It's going to be a relatively small pod for H2. The expenses will certainly continue to grow into 2027. How we're thinking about it is that H2 is more heavy on R&D investments. When I think about our spend patterns, like sales and marketing, we know it's going to be down sequentially in Q3. A lot of that is event-related spend that happens in Q2 and Q1. R&D will scale up throughout the year. From Q2, Q3 to Q4, we're going to see R&D scale up and G&A is going to remain relatively flat. The Constitution team, it's going to be its own pod of engineering team with a specific product manager that's specialized in healthcare.

Speaker #5: So when I think about our spend patterns, like sales and marketing, we know it's going to be a down sequentially in Q3. A lot of that is event-related spend that happens in Q2 and Q1.

Speaker #5: R&D will scale up throughout the year. So from Q2, Q3 to Q4, we're going to see R&D scale up and G&A is going to remain relatively flat.

Speaker #4: The constitution of the team is going to be its own pod of engineering team, with a specific product manager that's specialized in healthcare. And then we're going to scale up a sales team with a leader that's specific to healthcare and their own sellers of we're going to start off small with a team of three, which is exactly what we did in government.

Brandon Farber: We're going to scale up a sales team with a leader that's specific to healthcare and their own sellers of, we're going to start off small with a team of three, which is exactly what we did in government. We're really following the exact playbook of spend that we did in government.

Speaker #4: So we're really following the exact playbook of spend that we did in government.

Speaker #2: All right. Fantastic. Thank you for the caller.

Ken Wong: All right. Fantastic. Thank you for the color.

Speaker #1: Your next question comes from the line of Gavin Fairweather with ATB Cormac. Please go ahead.

Operator: Your next question comes from the line of Gavin Fairweather with ATB Cormark. Please go ahead.

Speaker #2: Oh, hey, good morning, and thanks for taking my questions. Maybe just on internal use cases, I'm curious to what extent 365 talents in your AI releases are helping carve out a bit more differentiation in a competitive space.

Gavin Fairweather: Oh, hey, good morning, and thanks for taking my questions. Maybe just on internal use cases, I'm curious to what extent 365Talents in your AI releases are helping carve out a bit more differentiation in a competitive space, and if you've seen any movement in your win rates as a result.

Speaker #2: And if you've seen any movement in your win rates as a result.

Speaker #4: You are correct, Gavin. 365 talents is giving us a stronger posture in internal use cases where the topic of SBO or skills-based organization upskilling and reskilling are critical topics.

Alessio Artuffo: You're correct, Gavin. 365Talents is giving us a stronger posture in internal use cases where the topic of SBO or skills-based organization, upskilling, and reskilling are critical topics. Frankly, we had a light response prior to 365Talents in that context. That becomes particularly true in the enterprise and strategic enterprise segments. Your observation, therefore, that 365Talents impacts our ability to win at larger scale internal use cases where our capabilities were lighter in the past is correct. When I think about our agentic capabilities, I believe this becomes even more true in the upcoming months. We're seeing a very positive return from the 365Talents side relative to this.

Speaker #4: Frankly, we had a light response prior to 365 talents in that context. And that becomes particularly true in the enterprise and strategic enterprise segments.

Speaker #4: Your observation, therefore, that 365 impacts our ability to win at larger-scale internal use cases where our capabilities were lighter in the past is correct.

Alessio Artuffo: Your observation, therefore, that 365Talents impacts our ability to win at larger scale internal use cases where our capabilities were lighter in the past is correct. When I think about our agentic capabilities, I believe this becomes even more true in the upcoming months. We're seeing a very positive return from the 365Talents side relative to this.

Speaker #4: And when I think about our agentic capabilities I believe this becomes even more true in the upcoming months. And so we're seeing a very positive return.

Speaker #4: From the 365 side, relative to this.

Gavin Fairweather: That's great, very helpful. Secondly, on the enterprise motion, it's been about a year, maybe a little bit more than that from the leadership changes. You've now had two very good quarters in a row. When you look at the sales team productivity, would you say that you've now kind of hit your stride, or are you seeing still potential improvement in that motion given sales cycles?

Speaker #2: Great. Very helpful. And then just secondly, on the enterprise motion, it's been about a year, maybe a little bit more than from the leadership changes.

Speaker #2: You've now had two very good quarters in a row. When you look at the sales team productivity, would you say that you've now kind of hit your stride or are you seeing still potential improvement in that motion given sales cycles?

Speaker #4: No. First of all, it's a good opportunity to give kudos to our great management team, led by our CRO and our CMO, and our EDTO partnerships.

Alessio Artuffo: No. First of all, it's a good opportunity to give kudos to our great management team, led by our CRO, our CMO, and our EVP of partnerships. These guys have been working super hard, and their teams on the enterprise side and even our mid-market function international, because it's not only a story of one segment, as I said earlier, it's a broad-based success. They've been doing really good. As far as whether, have we reached the max of what we can do? I believe there's a lot of runway ahead of us. That's both in terms of a single unit productivity per seller, so the ability to increase quotas given the amount of products that we are delivering to sales validated by customers and upcoming products, that's just something that we will likely do.

Speaker #4: These guys have been working super hard, and their teams on the enterprise side—and even our mid-market function internationally—because it's not only a story of one segment, as I said earlier. It's a broad-based success.

Speaker #4: They've been doing really good. As far as whether we reached the max of what we can do, I believe there's a lot of runway ahead of us.

Alessio Artuffo: They've been doing really good. As far as whether, have we reached the max of what we can do? I believe there's a lot of runway ahead of us. That's both in terms of a single unit productivity per seller, so the ability to increase quotas given the amount of products that we are delivering to sales validated by customers and upcoming products, that's just something that we will likely do.

Speaker #4: That's both in terms of a single-unit productivity per seller, so the ability to increase quotas given the amount of products that we are delivering to sales validated by customers and upcoming products.

Speaker #4: That's just something that we will likely do. But also, having access to capabilities like enterprise knowledge and 365 opens up a new territories in terms of not only companies' buyers, but also buyer personas.

Alessio Artuffo: Also, there's the adding access to capabilities like Enterprise Knowledge and 365Talents opens up new territories in terms of not only companies, buyers, but also buyer personas that we're going to be able to sell into. We're going to get much closer to the CIO office. We're going to get much closer to the Chief People Office as a result of these products and capabilities. I think we're starting to scratch the surface of how this can look like over the next three years, and for that, I'm really excited.

Speaker #4: We're going to be able to sell into. We're going to get closer much closer to the CIO office. We're going to get much closer to the chief people office as a result of these products and capabilities.

Speaker #4: And so I think we're starting to scratch the surface of how this can look like over the next three years. And for that, I'm really excited.

Speaker #2: Thanks so much for passing the the line.

Gavin Fairweather: Thanks so much. I'll pass the line.

Speaker #1: Your next question comes from the line of Suhan Sukumar with Stiefel. Please go ahead.

Operator: Your next question comes from the line of Suthan Sukumar with Stifel. Please go ahead.

Speaker #3: Good morning, guys. My first question I wanted to touch on the ARR re-acceleration over H2. Obviously, there are some benefits there with the day force.

Suthan Sukumar: Good morning, guys. For my first question, I wanted to touch on the ARR re-acceleration over H2. Obviously there's some benefits there with the Workday and AWS headwinds tapering off this year, allowing the strong underlying growth to show. What is giving you guys that visibility from a net new ARR a perspective? How much of that growth is coming from expansion versus net new?

Speaker #3: AWS headwinds tapering off this year, allowing the strong underlying growth to show. What is giving you guys that visibility from a net new AR as perspective?

Speaker #3: And how much is that growth is coming from expansion versus net new?

Speaker #4: Thanks, Evan. It's a good question. So as we know, we are starting to lapse some of the quarters that make it easier for us to re-accelerate on the top line.

Brandon Farber: Thanks, Suthan. It's a good question. As we know, we are starting to lap some of the quarters that make it easier for us to re-accelerate on the top line. Just as a reminder, AWS churn in Q4 of last year was about $4 million, and we have Workday, which we've disclosed, has essentially gone from $19.5 million to $6.5 million in the current quarter. We're lapsing, let's call it, $19 million of headwinds over the next four quarters. What's giving us that confidence? It's really what I talked about before, where we're seeing strengths across our end markets, whether we're talking about mid-markets, gov, if you think about last Q3, we essentially won FedRAMP, I think it was three to four months prior to this 30 September close. We didn't have much of an opportunity to play in the FedRAMP space.

Speaker #4: So just as a reminder, AWS turned in Q4 of last year that was about $4 million. And we have day force, which we've disclosed as essentially gone from 19.5 to 6.5 mil in the current quarter.

Speaker #4: So we're lapsing let's call it 19 million dollars of headwinds over the next four quarters. What's given that us that confidence? It's really what I talked about before, where we're seeing strengths across our end markets, whether we're talking about mid-market, Gov, if you think about last Q3, we essentially won bed ramp, I think it was three to four months prior to this September 30th close.

Brandon Farber: What's giving us that confidence? It's really what I talked about before, where we're seeing strengths across our end markets, whether we're talking about mid-markets, gov, if you think about last Q3, we essentially won FedRAMP, I think it was three to four months prior to this 30 September close. We didn't have much of an opportunity to play in the FedRAMP space.

Speaker #4: So we didn't have much of an opportunity to play in the FedRAMP space. This is really what we consider our first Q3 with significant pipe and the ability to win in FedRAMP.

Brandon Farber: This is really what we consider our first Q3 with significant pipe and the ability to win in FedRAMP. We have the FedRAMP opportunity. Enterprise, there's no doubt about it, the year-over-year growth is significant. We're seeing strong performance, good pipeline, when you just add everything together, it's pretty easy to see how we can re-accelerate on the top line.

Speaker #4: So we have the FedRAMP opportunity. Enterprise there's no doubt about it. The year-over-year growth is significant. We're seeing strong performance, good pipeline, and when you just add everything together, it's pretty easy to see how we can re-accelerate on the top line.

Speaker #3: Okay, good. Thank you for that color. For my second question, I want to touch more on a balance sheet capital allocation perspective.

Suthan Sukumar: Okay. Good. Thank you for that color. For my second question, I want to touch on more from a balance sheet capital allocation perspective. You guys appear to be in investment mode, given the new FE model, the healthcare vertical ramp. I have to think strategic acquisitions may still be part of the overall strategy. What is the deleveraging path here to get you to a more flexible balance sheet? Can you remind us on what your capital allocation priorities are?

Speaker #3: You guys appear to be in an investment mode. Given the new FDE model, the healthcare vertical ramp, and I think and I have to think strategic acquisitions may still be part of the overall strategy.

Speaker #3: What is the leveraging path here to get you to a more flexible balance sheet than and can you remind us on what your capital allocation priorities are?

Brandon Farber: Yeah.

Speaker #3: Thank you.

Suthan Sukumar: Thank you.

Speaker #4: So if you look at the numbers today, and I'm just going to use some clean round numbers to make it a little bit easier.

Brandon Farber: If you look at the numbers today, I'm just going to use some clean round numbers to make it a little bit easier. We have $45 million in cash. We have about $90 million of debt, so let's call it $45 net debt on our annual EBITDA guide of $55. As we know, we've announced an SIB for spring, that $70 million funded by $16 million in debt and $10 in cash. That would take us from about $90 in debt to $150. At the same time, it's a bit of a nuanced question because we don't know how many shares will get tendered in the SIB. If we look at today and you think about a rational investor, our current stock price is relatively close or slightly above our SIB price.

Speaker #4: So we have 45 million dollars in cash. We have about 90 million dollars 45 net debt on our annual EBITDA guide of 85. As we know, we've announced an SIE for our end that 70 million dollars funded by 60 million in debt and 10 in cash.

Speaker #4: That would take us from about $90 million in debt to $150 million. Now, at the same time, it's a bit of a nuanced question because we don't know how many shares will get tendered in the SIV.

Brandon Farber: That would take us from about $90 in debt to $150. At the same time, it's a bit of a nuanced question because we don't know how many shares will get tendered in the SIB. If we look at today and you think about a rational investor, our current stock price is relatively close or slightly above our SIB price.

Speaker #4: If we look at today and you think about a rational investor, our current stock price is relatively close or slightly above our SIV price.

Speaker #4: That would suggest we're going to have fairly frankly, no shares tendered in our SIV. That's just kind of the rational assumption to make as of today.

Brandon Farber: That would suggest we're going to have fairly to frankly no shares tendered in our SIB. That's just the rational assumption to make as of today. Always never say never, we need to think about the maximum potential. We do think at the moment, as Alessio mentioned, we are looking at opportu active in looking. While Docebo made two acquisitions in H1, we don't believe that's the norm. We are very much an organic growth shop. That's in our DNA, that will always be part of our DNA. Will we continue to look at other opportunities such as 365Talents that are easier bolt-ons that improve our sales and marketing efficiency because it's an easy add-on? We will look at that, we just don't see any within the next 12 months.

Speaker #4: But we need to always never say never, so we need to think about the maximum potential. We do think at the moment, as Alessio mentioned, we are looking at—.

Speaker #4: Back and looking. While Docebo made two acquisitions in H1, we don't believe that's the norm. We are very much an organic growth shop that's in our DNA, and that will always be part of our DNA.

Brandon Farber: We are very much an organic growth shop. That's in our DNA, that will always be part of our DNA. Will we continue to look at other opportunities such as 365Talents that are easier bolt-ons that improve our sales and marketing efficiency because it's an easy add-on? We will look at that, we just don't see any within the next 12 months.

Speaker #4: Will we continue to look at other opportunities such as 365 that are easier bolt-ons that improve our sales and marketing efficiency because it's an easy add-on?

Speaker #4: We will look at that, but we just don't see anything in the next 12 months. So if you think about 12 months of runway or a strong free cash flow generation, we do think we have the capacity to look at maybe increasing debt capacity, paying down debt, or building up cash through free cash flow generation.

Brandon Farber: If you think about 12 months of runway or strong free cash flow generation, we do think we have the capacity to look at maybe increasing debt capacity, paying down debt, or building up cash through free cash flow generation. On your second question, new logo versus expansion. We are typically 65 new logo, 35 expansion, and we've seen that formula relatively similar in Q2. In Q1, it was a little more heavily shifted towards expansion because we had a couple of large expansions. We're generally in that 65-35 range.

Speaker #4: On your second question, new logo versus expansion, we are typically 65 new logo, 35 expansion, and we've seen that formula relatively similar in Q2.

Speaker #4: In Q1, it was a little more heavily shifted towards expansion because we had a couple of large expansions, but we're generally in that 65, 35 range.

Speaker #3: Okay. Okay, great. Thanks for taking my questions, guys. I'll pass the line.

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

Speaker #1: And that concludes the question and answer session. I would now like to turn the conference back over to Alessio for closing comments.

Operator: That concludes the question and answer session. I would now like to turn the conference back over to Alessio for closing comments.

Speaker #4: Thank you all. From in the call today and we look forward to our next earnings call in November. Have a good day.

Alessio Artuffo: Thank you all for being on the call today, and we look forward to our next earnings call in November. Have a good day.

Operator: Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.

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