Brief Overview
Docebo (DCBO) is a SaaS information technology company focused on Learning Management Systems (LMS). The Docebo Learning Suite is a learning management platform capable of highly configurable, personalized learning at scale for both enterprise employees and customers. It uses AI to understand the impact of learning experiences and improve the effectiveness enterprise performance. Docebo is a Canadian based company that went public in December of 2020 and currently has a market cap of approximately 3 Billion U.S. Docebo is Italian for “I will teach.”
(Note: Most of the information below is summarized from the Docebo Q2 2021 Earnings Results Slide Presentation and Earnings Conference Call. There are a few gaps in information that were not provided on the slides. A link to the slide presentation is provided below.)
Revenue Growth
Docebo has maintained revenue growth in excess of 50% for the last 4 fiscal years. Annual revenue growth rates have been declining from 73% in 2017 to 52% in the 2020 fiscal year. However, company growth has reaccelerated the past two quarters. Q1 2021 revenue grew 60% YoY, and Q2 revenue reported in August grew 76% YoY.
2016 9,860 G-Profit
2017 17,126 73.7% 75%
2018 27,075 58.1% 79%
2019 41,443 53.1% 80%
2020 62,917 51.8% 82%
Q1 Q2 Q3 Q4
2020 13,530 14,535 16,096 18,756
2021 21,742 25,600
YoY 60.7% 76.1%
Sequential revenue growth has accelerated over the last five quarters from 7% to 17%.
Q1 Q2 Q3 Q4
2020 7.4% 10.7% 16.5%
2021 15.9% 17.7%
Revenue Growth Levers
Since 2016 Docebo’s active customers have grown from 900 to 2435 at the end of Q2 2021. Average Contract Value (ACV) has grown each year from $11,500 in 2016 to $35,700 for the quarter ended Q1 2021. Net Dollar Retention Rate ended 2020 at 108%. Employee head count grew more than 50% in last 12 months to 635. Subscription revenues grew 76% from the Q2 2020 representing 92% of the revenue for the most recent quarter.
Customers Ave Contract Value ARR
(AVC) (millions)
2016 900 $11,500 $11
2017 1200 $15,500 $18
2018 1400 $21,000 $30
2019 1700 $27,400 $47
Q1 2021 $35,700 $74
Q2 2021 2435 $93.4
Docebo appeals to a wide variety of industry verticals. There is no customer concentration risk. 72% of customers are from North America and 28% from abroad – primarily Europe.
Leading Companies that Chose Docebo demonstrate the wide variety of vertical applications:
•Amazon Web Services
•Thomson Reuters
•L’Oreal
•HP
•Pearson
•Heinenken
•BMW
•Lastminute.com
•Denny’s
•Experian
•Newcross Health Care
•Randstad
•BRF
•Lululemon
•ReMax
•Red Roof Inn
•Jeld-Wen, Inc.
•Total Energies
•And more…
Capital Efficient Growth
Since 2016, Docebo has burned only $9 million in cash as of the end of 2020 while growing revenue at over 50% annually, and growing ARR to $76 million. Docebo was FCF positive for the first time in 2020 at $4m. Docebo’s balance sheet currently has $216m in cash and cash equivalents, and $3m in long term debt.
Management
Claudio Erba is Co-Founder and CEO since 2005. Erba owns 4% of Docebo. He built Docebo from scratch and was the first user of his own software that has become Docebo.
In early August, Docebo announced the appointment of Rudy Valdez as the new COO. Rudy spent the past 16 years at Amazon Web Services where he helped to establish and build their phase and business development function, working closely with their largest cloud customer through the transformational growth years. More recently, he led the development of the AWS training and certification programs helping to educate millions of customers in parallel in the AWS ecosystem on cloud technologies and approaches.
CFO Ian Kidson announced his retirement effective October 11th. He will serve as consultant for transition to a new CFO through the end of the year.
Accolades
2019-2021 Fosway Group Core Leader
Core Leader for Learning Systems in the Fosway 9-Grid System
(A review of this grid on the slideshow p 13 illustrates Docebo’s competitive
position)
2018-2019 Brandon Hall Group Excellence in Technology Awards
Best Advance in Learning Management Technology
2018 PC Magazine
Best Online Learning Platforms for Business
Comments from the August 12th 2021 Earnings Conference call:
•The strong momentum that we demonstrated in the first quarter continued through the second quarter, and in fact, began to accelerate…
•The acceleration in our business becomes apparent when you consider the net growth of our ARR at the end of the second quarter, an increase of 64% over the second quarter 2020…
•We’re also seeing business pick up in industry verticals that are recovering from the pandemic…
•I remain comfortable with our longer-term gross margin targets being within the 80-85% range, and we expect to get back to those levels over the next two to three quarters…
•We have multiple growth levers that are all tracking well…
•Going forward, our primary focus will be to continue to drive our growth, but we’re finally getting to the point where we expect to begin to realize greater benefits from our scale…
Link to Q2 2021 Investor Presentation
https://s24.q4cdn.com/246292444/files/doc_presentation/2021/…
As I mentioned earlier in this report, Docebo means “I will teach” in Italian. I think that is an excellent metaphor for this board. Saul’s Investing Discussions is the ultimate “Learning System” for high growth focused investors in my opinion! I am very grateful to Saul for creating this board and sharing his knowledge… and to all who participate, educate, manage the focus of the board, and share their results, knowledge and wisdom. I’ve only been frequenting this board for about 3 months, but I’ve already learned so much. Thank you!
Dave M