Q3/24: IN LINE QUARTER, SOLID GROWTH & MARGIN IMPROVEMENT
THE TD COWEN INSIGHT
Our initial view of the results supports our thesis of Docebo having consistent, solid execution despite cautious customer sentiment, with signs of stabilization emerging. KPIs support continued momentum with solid ARR growth and ACV expansion demonstrating enterprise traction.
Event
Docebo reported Q3/24 results. Conference Call: 8:00 a.m. ET; 1-646-960-0169 or 1-888-440-6849. Conference ID: 8722408
Impact: SLIGHTLY POSITIVE
See Exhibit 1 for a review of the results and guidance.
KPIs continue to trend positively. Docebo added $8.2mm of ARR in the quarter to end it with $214.1mm, ~$1.4mm above our estimates. ACV grew 9.8% y/y to $54,271, with 47 new customers added in the quarter.
Enterprise momentum continues to build. Docebo added several notable enterprise logos this quarter including a leading global cybersecurity company, Tumi Holdings, a leading European insurance company, and Epicor. Enterprise customers grew 25% y/y while new logo ACV was flat y/y at $71,000.
Raised F2024 guidance. Docebo now expects F2024 total revenue growth of 19.5%, up from 18.0% to 19.0%, and EBITDA margin of 15.5%, up from 15.0% to 15.5%. Guidance is largely in line with consensus estimates.
Management noted that customer sentiment remained cautious but stable, in line with prior quarters, although signs of market stabilization are beginning to emerge. Large, complex enterprise deals have brought on increased scrutiny and longer deal cycles, which is largely consistent with commentary from various other enterprise software vendors.
Looking for additional FedRAMP colour. While the company remains audit-ready, completing all requirements under its control, Docebo has yet to secure a federal sponsor. We will look for additional colour on the call, including the progress of a large VA bid whose RFP went live in September.