CIBC opinion November 12, 2020 Earnings Update
DOCEBO, INC.
Growing The Business
Our Conclusion
Docebo’s growth trajectory remains on track, with the company’s EBITDA
positive sooner than expected given COVID-related hiring delays. The
company has been benefiting from increased demand through COVID,
announcing several client wins with the quarter, including the expansion of a
quick-service restaurant operator from 3,000 locations to 24,000 locations.
We see Docebo as well positioned in the current environment and retain our
Outperformer rating and C$69 price target.
Key Points
Q3 Results: Docebo reported revenue of $16.1 million (consensus $16.1
million) and EBITDA of $0.6 million (consensus -$1.5 million). ARR increased
55% to $64.6 million and ACV increased 25% to $32K. Adjusted EBITDA
margins of 3.6% were 1,300 bps above consensus.
Building Out The Solution: With solid uptake of its LMS solution, Docebo is
now focused on extending its offering to encompass a full, end-to-end,
training offering. The company acquired French-based forMetris post quarter
end, which adds learning impact solutions. Docebo has already seen strong
initial demand from its installed base and will be using forMetris’ offices as a
springboard for expansion within France. Geographic expansion is another
layer of Docebo’s growth strategy, with the company focused on growing
either organically or through acquisition into geographies that require a local
presence given language and/or cultural constraints (such as France and
Germany).
OEMs A Significant Opportunity: OEM partner Ceridian remained
Docebo’s largest customer in the quarter. Docebo’s second OEM partner,
U.K. HCM provider MHR, was integrated significantly more quickly than
expected (one month versus an expected six) and is now live. We see OEMs
as a significant opportunity for Docebo and see opportunities with other HCM
providers, talent management providers and potentially system and
integration providers.
EBITDA Positive As COVID Slows Hiring: Docebo recorded $0.6 million in
EBITDA this quarter as COVID has slowed its hiring plans. The company is
in the process of hiring of 50 new employees, split evenly between sales and
marketing and development. Looking forward, we expect the company to
continue to focus on aggressively growing its revenue base while ensuring
that the cost of customer acquisition remains reasonable. We are forecasting
EBITDA remains positive through the remainder of 2020 and into 2021.
Changes To Our Model: We have updated our model to reflect improving
EBITDA and gross margins.