AWS win September 9, 2020 Earnings Update
DOCEBO, INC.
Announces AWS Customer Win
Our Conclusion
Docebo announced that it had signed an agreement to provide Amazon Web
Services (AWS) access to its platform to scale global delivery of AWS
Training and Certification product offerings. The customer win is further proof
that Docebo’s learning management platform has the technical bona fides to
provide services to some of the largest global enterprise customers. AWS is
used by over one million organizations, illustrating the scalability that
Docebo’s solutions will be counted on to provide. We expect the agreement
to add ~$1 million in Annual Recurring Revenue, with revenue from the deal
expected to come online during Q3. We have updated our forecasts to reflect
the new business. We retain our Outperformer rating and increase our price
target to $60 (prior $54).
Key Points
Contract Details: Amazon will use Docebo to train partners and customers
looking to achieve AWS certifications. These certifications allow practitioners
to highlight and validate their individual level of expertise in the AWS cloud
environment. We believe that the multi-year contract is worth ~$1 million/year
in ARR and that Docebo will replace a mixture of home-grown and third-party
applications. Docebo’s social learning approach appears to be a good fit for
AWS given that it already has a large number of trained experts.
Provides Technical Stamp Of Approval: We believe that Docebo
underwent a rigorous technical evaluation to be awarded the AWS contract
and see the Amazon contract win as a validation of Docebo’s technology. We
believe the customer announcement will provide other large prospects a level
of comfort with the technological depth of Docebo’s solution.
Potential For Land And Expand: We expect the deal to provide a entry
point from which Docebo can execute its land and expand growth strategy.
The land and expand strategy has been successful with other large scale
enterprise customers, illustrated by Walmart signing a second contract for its
Walmart Media Group in Q2 after an initial deal to train suppliers on its ecommerce capabilities was announced in Q1.
Seeing Growth In The Current Environment: We view Docebo as well
positioned in the current environment, with the move to remote work leading
corporates to accelerate e-learning plans. During the pandemic Docebo has
announced a number corporate wins, including Walmart, Barilla Pasta, Lego
and now AWS. We have increased our F2020 revenue growth rate by 4% to
48% and our F2021 growth rate to 47% (prior 35%) as we incorporate the
AWS contract win and a continuation of the current environment.