Have a US$58.00 target. GLTA
DOCEBO INC. Q1/24 First Look: Q1 In Line But Revenue Guide Weak
Our Conclusion
Docebo posted solid Q1 results, with revenue in line and adjusted EBITDA
11% above consensus as the company continues to focus on profitability.
However, Q1 subscription growth of 23% came in below Street expectations
of 25% and CIBCe (24%), and the company’s guide implies further
deceleration. Docebo provided a full-year outlook with Q1 results, with the
midpoint of full-year revenue growth (18%) well below Street (23%). The
primary factors driving the weaker-than-expected guide are seat reductions
as customers focus on cost control and the loss of revenue from a divested
business at an enterprise customer (expected to have a seven-figure impact
on ARR). In light of the above, we will be looking for an update on the
demand environment on the call at 8:00 a.m. ET (dial-in: 416-764-8624).
Key Highlights
Demand Environment: Docebo reported revenue of $51.4MM, ~0.5%
above the Street and our estimate ($51.1MM) and up 24% Y/Y. Annual
recurring revenues of $201.2MM was up 22% Y/Y and slightly below
consensus ($203.2MM), but more in line with our $202MM estimate. Total
customer count increased by 74, from 3,759 in Q4 to 3,833 in the quarter,
and was up 9% Y/Y. ACV of $52,492 was up 12% Y/Y as the company
continues to upsell within its existing customer base. Subscription revenue
growth of 23% was below consensus (25% Y/Y) and our estimate of 24%
Y/Y.
Profitability: Gross margin in the quarter was 80.7%, above consensus
(76.7%) but in line with our estimate (81.0%) and up 10 bps Y/Y. Adjusted
EBITDA was $7.5MM in the quarter, ahead of both consensus of $6.7MM
and our estimate of $6.9MM, and adjusted EBITDA margin of 14.5% was 140
bps ahead of consensus and 100 bps ahead of CIBCe.
Q2/24 Guidance: Docebo is guiding to total revenue of $52.2MM-$52.4MM
(consensus $53.8MM) and an adjusted EBITDA margin of 14.0%-15.0%, ~50
bps ahead of consensus at the midpoint (consensus 14.1%). Subscription
growth is expected to be +1% higher than total revenue.
Full-year Guidance: Docebo provided full-year guidance for the first time,
guiding to total revenue growth of 17.0%-18-5% and adjusted EBITDA
margin of 14.5%-15.5%. While the adjusted EBITDA margin guide is in line
with consensus (15.0%) at the midpoint, the revenue guide was below. The
Street is currently modelling 23% revenue growth for F2024 (CIBCe 21%).
Free Cash Flow: Docebo generated positive cash flow from operations in
the first quarter, resulting in free cash flow of $9.2MM, above consensus of
$6.0MM