and welcome to the Decebo's second quarter, 2026 earnings call. All participants are currently in a listen-only mode. We will open the line for a question and answer session momentarily. Analysts can ask questions by pressing star one on their telephone keypad. And if you would like to withdraw your question, again, press star one. We ask that analysts please limit themselves to two questions and return to the queue for any follow-up. I'd now like to turn the call over to Docebo's Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.

Thank you, Krista. Earlier this morning, Docebo issued its Q2 2026 results. The press release, which included a link to management's prepared remarks in our quarterly investor slide deck, were all posted to our Investor Relations website. This morning's call will allow participants to ask questions about our results and the written commentary that management provided this morning. Before we begin this morning's Q&A, Docebo would like to remind listeners that certain information discussed may be forward-looking in nature. Such forward-looking information reflects the company's current views with respect to future events. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking standards. For more information on the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Dorcebo's public filings, which are available on CDAR and EDGAR. During the fall, we will reference certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized means under IFRS. Please see our MD&A for additional information regarding our non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Please note that unless otherwise stated, all references to any financial figures are in U.S. dollars. Now, I'd like to turn the call over to Dr. Chabo's CEO, Alessio Artufo, and our CFO, Brandon Farmer. Kristin, you can open up the line.

If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. Your first question comes from Robert Young with Canaccord Genuity. Please go ahead.

Thanks. Good morning. First place, I'm sure there's lots of questions on this forward deployed engineer model, so please, I'd like to start. How is it going to work alongside the existing professional services motion? What's the impact you anticipate on revenue and margins, both gross and EBITDA? And then I think you said that you're hiring FDs, And so where are you in the process of building out that FDE motion?

Good morning, Rob. It's Alessio. So you are correct. We are starting with hiring a foundational FDE that is intended so that we can build the playbook before we scale that practice further. The way we think about it is fairly straightforward. We think that on top of our upcoming release of GA of agent op and enterprise knowledge, both planned in the early fall, we are going to build custom agents workloads that aim to solve for vertical use cases, right? very specific needs that our top customers to begin with have. Think about solving for specific operational challenges across QSR, healthcare, financial services. We know that these organizations have a data challenge. Everyone has an integration challenge. Everyone has a data discoverability and validity challenge. And we are going to have these SEs help with creating these custom workflows on top of our technology. Now, how does this compound? How does this create greater value? Our plan is to abstract these agents at a greater product level and make those agents available more broadly to a broader audience. In terms of monetization, look, we are going live with Agent Hub and Knowledge Enterprise in the fall, and we'll update you after that time.

Okay, that's all very helpful. I mean, where is this going to fall inside of the income statement on the cost side? Is it going to be something bundled in? Is it going to impact your gross margins or is it something that's going to be part of your sales motion? I'm trying to understand where it will impact the margin structure.

Rob, when we start to hire them, it's going to be before the product is released. At the start, it will be more of an R&D type cost. These are going to work with our top 10, top 20 customers. you know as we think about scaling charging professional services this adding usage to our ai whether that's through credits or fixed price you know that's where it flips to gross margin so it really depends on you know when does it get released when do we start monetizing so it's either going to be a an r&d or cogs cost okay and then second question just on the confidence in the second half acceleration of ARR.

Maybe we could talk about where that's specifically coming from, what gets you the most excited, and then if you could touch on Q3 seasonality for the FedRAMP government opportunity alongside that. That would be helpful and I'll pass the line.

So let me talk a bit about the underlying ARR acceleration. This is the second quarter in a row where we have re-acceleration and for sure, we're super pleased with that. Rob, if you recall, in November of 2025, during a conference call, we referred to 2026 as the year of the enterprise. And that became a view into 2026 and had a point of view that the initiatives we were taking on the product and as well as, you know, broadly execution were added in the direction where we thought that 2026 were going to show the results of the work we were doing. And when I impact that, I think it's a sort of three vectors, right? There's overall execution. where we made investments across the board over the past several years. There's a story of product with the acquisition of 365 and the acquisition of Zive, both. And frankly, a re-acceleration of shipping features in our core product as well. It's not only a story of buying technologies. And then I, you know, to characterize growth and re-exceleration, I always like to kind of separate our partner motion because it is, you know, a subcategory of execution, but it truly has become important. the large majority of our enterprise pipeline, roughly 80%, has a partner involved in some fashion, whether it's a co-sale fashion, whether it's a implement fashion, and most times it's a hybrid of both. And shout out to partners like Deloitte and new partners like IIT that are really embedded with our org, we work super well together so that sort of reconciliation is um i would say it hinges on several factors it's broad based right it's it's showing in that new it's showing an expansion it's showing international and and i like that very much because these multiple growth factors don't don't um you know rely on just one segment doing all the work um and as far as the confidence for the future you know it's very high we're extremely pleased with the growth of our pipeline we look at our pipeline in terms of you know deals that are uh uh significant in material in size about 500k and we think it's uh it's a really great time at the channel and um yeah very very excited about the coming quarters now as far as federal pipeline and quarter three Look, we think about government more broadly than just federal. We think about government as a combination of our success in state, local, as well as federal. And quarter three is a heavy federal quarter. But, you know, we don't disclose what's going to happen in the next quarter. We are just extremely pleased with the pipeline buildup and execution of our teams.

Thanks for taking all the questions.

Yeah, thank you, Rob.

Your next question comes from the line of Ryan McDonald with Needham and Company. Please go ahead.

Thanks for taking my questions. Congrats on a great quarter. Alessia, I wanted to ask about the investments and decided to move into health care here. Obviously, interesting, large opportunity, highly regulated industry. And I feel like there are some sort of correlations to federal government. And obviously, we've had those investments over the last couple of years, and that's still sort of starting to generate a return or hit an inflection point. So can you just talk about sort of, you know, the decision to move into health care, you know, how you think about the timeline for the return on the investments you're going to make there and where you see a gap, you know, within health care organizations that you think Docebo can fill?

Yes, awesome. Ryan, your premise in seeing some parallels with the investments that we made broadly into government i i think it's a bit astute i i agree with you there are several parallels first let me ground us in the context of the healthcare market as we have studied it we value this so we see this as a roughly a three billion dollar time um over a roughly 30 billion dollar corporate learning market that we already operate in um we we you know already have an important base of healthcare customers, call it roughly $10 million of ARR, and we've acquired the $10 million of ARR notwithstanding certain gaps of knowledge and product that we are now much more educated about. And so I would say that similarly to what happened in the past with the state and local education market, we have operated opportunistically, but we have not been extremely focused and strategic in the way we've addressed this market. Now, as we are a much more mature company, as we have matured our GTM engine, we believe that as an horizontal player, every opportunity we have to become more efficient in our GTM engine and more efficient in the way we address customers' needs and build products for targeted audiences, the better off we're going to be. We're going to be better in our success of adoption. We're going to be better in our win rates. And so it was a no-brainer to start with healthcare because we believe the distance between where we are today, capability-wise, and the optimal scenario is very much in reach. And we don't have to do years of work to be in an optimal scenario to double our win rates i think we have you know months of work as opposed to years of work now healthcare is a broad is a broad definition and you know depending on how you slice and dice the the verticals we already have a view that is a multi-year view after which we would tackle life sciences life sciences carries along a bit more complexity in terms of technical requirements which we are already partially addressing, but we're preparing ourselves over the next 12, 24 months to go even deeper. What else can I tell you? I think this is a great market. We're already winning in it. I mentioned it. It's a motion where we're gonna invest in products. We're gonna invest in the partner ecosystem. We have partners that are really great in the healthcare industry and we work closely with them. And also, you know, when I mentioned the content network, healthcare is also a story of content, our technology being such that you can now aggregate multiple content partners and we can augment that part is going to be important for our healthcare customers. And listen, one further validation point. We know that in healthcare alone, there are organizations that are, you know, very sizable. Frankly, in ARR, they are comparable to the shareholder in that range. All they do is healthcare, healthcare learning. And, you know, just that validates that if we approach this deeply and become more specialized, which I think is very much in reach, we have an additional growth factor.

So, very excited about it. Yeah, super helpful context and color there. And then, you know, maybe as a follow-up. So as we think about your sort of, let's call it the increasing sort of verticalization of the platform, you know, with specific verticals where you've seen some big opportunities, can you just talk about how you're seeing or viewing the balance of sort of the pipeline of opportunities for growth sort of within some of your, let's call it your core markets or sort of more to more horizontal applications versus moving more into vertically specific applications? applications, is the healthcare expansion being done with sort of a view of more of a, let's call it a shorter runway or limited opportunity within sort of broader enterprise? Or is this just based off of seeing some really nice early success, see a product market fit for the solution, and so naturally going after a new opportunity? Thanks.

Yeah, you know, I think a bit the opposite of that like i i as a again we we've built the treble up to where it is today as a horizontal player and with the exception of government which we started specializing in a while we've we've always recognized that there is a greater benefit in the earlier stages of company as being a generalist as you grow up as a business you realize that the generalist categorization starts to become an impediment to healthy growth and it shows in every function of the company it shows also in the way we support the the customers that this is i'm a big i'm a big believer that in order to do a great job with customers you need to understand their business deeply and you need to address their needs deeply and when you know you have just for a sheer example somebody in a uh sales executive capacity, that at 9 a.m. in the morning has a conversation with a manufacturer, you know, and at 11 a.m. with a security company, and at 2 p.m. with a healthcare organization, having that depth of knowledge of the business problems that each of these carry is incredibly hard to scale. And so I believe that it's incumbent upon us as we continue to mature to taking the most valuable verticals and creating emotion around it. And the caveat there is, is there an opportunity to also verticalize the product and create capabilities that go beyond the lingo and the jargon? And if there is, the combination of that product build alongside the knowledge creates an unstoppable force and an absolute differentiation in the market. So we don't see it as a need to find a new pocket, rather as a desire to win at a higher rate and be seen more as a leader in those verticals. Thanks, Alessio.

Your next question comes from the line of Aaron Kyle with CIBC. Please go ahead.

Hi, good morning, and thanks for taking the questions. Alessio, maybe a question for you on the skills side. You know, you've described it as a bit of a second door into new logos and a retention lever. So maybe in Q2, can you speak to how many enterprise deals were influenced by having that skills capability, and do you see it lifting your win rates versus a year ago?

Sure. Thank you for the question. First, let me tell you, we are beyond pleased with the progress that we've made so far in the integration process of 365 Talents. It's like all integrations and acquisitions, there are always challenges, and we don't shy away from those, but the results speak for themselves. We are six months in, frankly, and our pipe targets, we've blown that up. We are very pleased with seeing the pipeline growth, including 365 and enterprise combined off-site. While I can't tell you exactly the percentage of deals in the tax rates, I don't know that that's something that we are necessarily disclosing. You know, we've mentioned a couple of wins that are very significant in the score, you know, one being the world's largest telecom and networking, one of the world's largest telecom and networking companies, and one being the world's largest supplier of automotive safety systems. And, you know, both of them, we would not have been at the table with them had we not offered the capabilities of 365. And to me, that is, you know, more than an initial validation. I think it really validates what we originally thought. And when I look at our pipeline, there are many more of these coming up. the next step here is the job isn't done to be clear the job is far from being done what we need to do and what we're doing is progressing at fast speed our product integration so that the story of one plus one equal three becomes even more tangible even in the product and not just in theory and we are you know ahead of schedule in that regard i'm very pleased with integration here and um and additionally you know i think the story uh wraps and it comes with all together as we launch agent hub and we develop further our agentic efforts agents that reason around data and take into consideration skills in order to uh train people on what they want and need is is the ultimate connection of all the of all the the And, you know, again, I can't tell you how excited I am about 365 moving forward. More work to do. And on the standalone side, we haven't even scratched the surface of the potential of this as a secondary product.

And that's what we ought to do in 2027 and beyond. thanks that's helpful color and then maybe just on the sales cycle side we've seen some industry headlines recently that software sales cycles have begun to compress across most acb buckets just wondering if the table is seeing this at all across your enterprise customers there and then we have not seen that as of today uh if anything in h1 we've seen sales cycles decreased in a number of segments now a lot of that is related to execution you know if you recall our mark our new center of zero came in roughly july of last year came in and dismissed tweaks and changed some processes that were seen for that labor and in h1 uh but the commentary that you're referring to of other software companies seeing elongated sales cycles is not something we're seeing today sorry randon just just to clarify we were actually seeing headlines that sales cycles were decreasing, not elongating.

So good to see that. The shape of seeing the same.

Yes, correct.

Your next question comes from the line of George Sutton with Craig Howland. Please go ahead.

Thank you, Alessio. You called out NIT. I'm curious if you could just give us a sense of the go-to-market with them.

And is that one of the reasons why you're seeing the enterprise strength that you're seeing? uh george for sure uh you know niat is a relatively new partner i call them out in the context of our partner motion being a significant contributor to our arre acceleration kudos to the partners and to our partnership teams and broadly our gtm teams for for you know the way we're leveraging this partner motion it's um um it's a lot of work and it's not just over the past few months and i wouldn't you know i wouldn't regard a single partner as part of this and i it's a relatively new partner we're doing great work with them they have a great penetration um and you know i would i would equally regard the partner that we worked with longer like deloitte as as a firm that is very aligned with the way we operate and we're very close with. So yeah, that's all I have to say about that.

So the topic of the week in AI, or certainly one of them has been around rogue agents.

And I'm curious with your agent hub, how can you give confidence to customers that you've built proper guardrails in to protect them? yeah yeah um look um we we first of all our agents technology is something that we've been working on for a while we have a very sophisticated team in our ai team that has been doing this for a long time i i trust uh you know their knowledge and expertise and that's in this area our CTO and I have, you know, a very strong point of view on the value of the Chebo operating in enterprise space is, you know, very much also needs reliability and safety and security. So everything we're going to be building is going to have a strong point of view on safeguards and guardrail standards. And frankly, George, you know, I think it's a new territory. And we're going to be working closely with our customers and their security officers to progress, you know, how we document this and how we give confidence to everyone that what we're building is, you know, as bulletproof as it can be. Perfect. Thank you.

Your next question comes from the line of Matthew Van Ville with Cantor Fitzgerald. Please go ahead.

Yeah, good morning. Thanks for taking the question.

I guess as you look at expanding the product platform into healthcare and a couple other areas you talked about today and then integrating 365, what is the view from here on future M&A in a broader capital allocation strategy um i'll i'll start and i know brandon wants to then follow on on the specifics for capital allocation but i would say uh in in pure business terms um we we have a executed two webinars with 365 and enzymes different profile in terms of you know costs um and and frankly, different profile in terms of product category and capabilities and whatnot. But that has given us the point of view that we have a lot of work to do to truly benefit from what we have acquired. We're well ahead of integration schedule, but the integration and the work that now we can do on top of these technologies and alongside these teams, it's very significant. As a result, we are just incredibly focused on integrating and extracting value and building for future capabilities. And we remain opportunistic. We always look at the market. We don't disregard any opportunity. But M&A presently, in terms of net new deals, is not our primary focus. Brandon?

On capital allocation, you know, it's something we think about daily. And as different variables change, our priorities change. You know, right now, you know, we look at stock price and, you know, we believe it is undervalued. And, you know, based on the stock price today, we believe that that capital allocation is buying back shares. You know, that could change in a couple of weeks, could change in months, depending on how the share price does. You know, we think about interest rates, we think about opportunistic M&A, you know, so it's a daily equation. And right now, as Alessio mentioned, M&A is not top priority. And, you know, when we look at the stock price, buy and back shares is.

Okay, very helpful. And then you mentioned the success of the partner community helping you grow here. How should we think about sort of the size and scale of that partner community? Are you trying to just maybe focus on going broader and deeper with the partners you have and developing those relationships? Or is there still build-out new partners into the ecosystem that you see on the roadmap?

There's a great deal of opportunity because, you know, the word partner has in our mind different connotations. You have different categories of partners, different specialties, different verticalizations, different market positions. Think about, you know, company partners are a very important part of our business. We partner with several great companies in that area, and it's plausible that we will increase the portfolio even more in the future. System integrators are the ones that we tend to think more of in enterprise context, but there are different degrees of system integrators. Some are regional, some are more global, some are very much specialized around certain verticals and sectors. You know, for example, we work closely with a partner called Tier 1, a great firm that has a great deal of expertise in the healthcare sector. And it's important to have a broad-based, varied strategy around partners. So our job, frankly, is to become crisper and crisper and more clear as to how to couple partners in the areas where we want to win and continue to execute our GPM together. There's also, you know, partnerships that are more product-attached partnerships. I can think of marketplaces, initiatives like AWS, where it's less of a commercial first motion, but it's the ability to attach on to big, you know, commercial engines like the Amazon AWS one to enable customers to buy using credits. We've had a lot of deals and customers that have preferred that buying modality as opposed to, you know, a direct buying modality. And all these avenues of buying, the way we think about it is how can we reduce the risk and friction of purchasing for the customer? Great.

Thank you. your next question comes from the line of john xiao with td cowen please go ahead thanks for taking my question uh maybe one more question on the healthcare vertical so could you compare the healthcare opportunity today to where you know government was when you first began investing fat rent and what kind of milestone should investors expect to over the next 12 to 18 months to gauge the success?

Great question. So the first milestones are going to be setting up the team for success. We are going to be staffing an organization across product and GDM to really conquer this this new vertical while we continue by the way in parallel to winning vertical it's a bit like feeding a more sophisticated plane while we fly a radio plane um so once we have the teaming seat which is we're working on actively um then comes the development of you know it's org radios it's the development of rom books it's the development of specific vertical program roadmap that allows us to have the confidence that we're executing towards something tangible that then leads to improved doing rates that it leads to customer satisfaction in general and and that you know will occur over the next few quarters um i guess differently from federal okay in this category i want to emphasize is that you know we're already winning significant customers in healthcare right now. And some of these requirements at times become more stringent and at times are a little looser. And it's not that, you know, federal, it's either you have FedRAMP or you don't have FedRAMP. With healthcare, it's our ability to increase our right to win is going to be dependent upon how fast we execute on the people and product vectors. That's as simple as that. And so the faster we do all of the above, the faster we're going to increase our, you know, share a wallet in that industry. Got it.

And on FTE, I know it's still relatively early, but could you maybe talk about the revenue opportunity?

Is it recurring or one time and maybe the margin profile? um you know i'm hesitant to to share details that have not been fully armed up yet i i described the fd opportunity in in on a principle basis because we believe in this ai era uh customers are more and more in need uh of working with true builders and and that's what we're prepared to do We want to really enter in organizations and not just onboard them and let them do the work. We want to do the work with them and for them towards their own personalized outcomes. How does this translate in a recurring model and the marginalization of it? It's something that, of course, we're thinking about deeply, and we believe we have good constructs, but it's perhaps premature to sharing this call, and I feel more comfortable. that we're going to have a more polished point of view as we as we talk in november post our agent double release which is going to be the fall that's great thank you thank you as a reminder if you would like to ask a question please press star one on your telephone keypad to raise your hand and join the queue your next question comes from the line of ken wong with oppenheimer please go ahead fantastic thanks for taking my question uh brandon i wanted to

circle up on the guidance a little bit you guys have a second straight quarter of accelerating underlying arr just want to get a sense for what level of prudence is baked into the guidance have you guys changed your philosophy in terms of handicapping you know some of the the big deal pipeline and any color there would be would be helpful yeah maybe let's just take a step back and you know look at the actual revenue increase so we raised our guidance by three and a half million dollars relative to last quarter you know transparently 1.6 of that was from our q2 needs at 2.1 of that is the flow through gage two and then even within that 2.1 you have 1.2 of that being professional services and closer to 900k subs so you know what's really driving that increase what assumptions are we changing uh you know when we go through our different segments mid market our assumptions are pretty much flat you know we've seen consistent performance the team is still performing great there's there's no changes governments we already had strong expectations built into our guidance so you know we we knew we were going to execute in q2 we had a record flight quarter q2 q3 we do expect a solid fed ramp quarter and that was always baked into argument so what changed it's really enterprise you know we came into 2026 i talked about it in

february where we assumed roughly you know flat enterprise growth which was conservative you know we saw two quarters of big performance strong wind rates good pipeline and that's given us the confidence to increase our enterprise assumptions in each two and that's really with driving the incremental revenue guide that's fantastic and then the other half of the guidance you guys kept evita and change i think you called out healthcare as an investment that you guys are making in the back half how should we think about the the run rate of that investment uh is is this just a small start that ramps up is this something that we should expect to carry into 27. it's going

to be a relatively small pod for H2. The expenses will certainly continue to grow into 2027. But how we're thinking about it is that H2 is more heavy on R&D investments. So when I think about our spend patterns, like sell to marketing, we know it's going to be down sequentially in Q3. A lot of that is event-related spend that happens in Q2 and Q1. R&D will scale up throughout the year. So from Q2, Q3 to Q4, we're going to see R&D scale up and G&A is going to remain relatively flat. The constitution team is going to be its own pod of engineering team with a specific product manager that's specialized in healthcare. And then we're going to scale up a sales team with a leader that's specific to healthcare and their own sellers of, you You know, we're going to start off small with a team of three, which is exactly what we did in government. So we're really following the exact playbook of spending that we did in government.

All right. Fantastic. Thank you for the color.

Your next question comes from the line of Gavin Fairweather with ATB Cormark. Please go ahead.

Oh, hey, good morning, and thanks for taking my questions. Maybe just on internal use cases, I'm curious to what extent 365 Talents near AI releases are helping carve out a bit more differentiation in a competitive space. you've seen any movement in your win rates as a result.

You are correct, Gavin. 365 talents is giving us a stronger posture in internal use cases where the topic of SBO or skills-based organization upskilling and reskilling are critical topics. Frankly, we had a light response prior to 365 talents in that context. And that becomes particularly true in the enterprise and strategic enterprise segments. Your observation, therefore, that 365 impacts our ability to win at larger scale internal use cases where our capabilities were lighter in the past is correct and you know when i think about our agentic capabilities i believe this becomes even even more true in the upcoming months and and so we're we're seeing a very positive return uh from the 365 side um relative to this it's great very helpful and then just secondly on the enterprise motion it's been about a year maybe a little bit more than uh from the leadership changes you know you've now had two very good quarters in a row when you look at the sales team productivity would you say that you've you know now kind of hit your stride or are you seeing you know still potential improvement in that motion given sales cycles no um you know our first of all it's a good opportunity to to give kudos to our great management team you know led by our CRO and our CMO and our ADPO partnerships so these guys have been working super hard and and their teams on the enterprise side and but even our mid-market function international because it's not only a story what's happened as I said earlier it's a broad day success uh they've been doing they've been doing really good as far as whether you know have we reached the max of what we can do? I believe there's a lot of runway ahead of us. That's both in terms of the single unit productivity per seller. So, you know, the ability to increase quotas, given the amount of products that we are, you know, delivering to sales by customers and upcoming products. is that that's just something that we will likely do um but also you know there's the adding access to capabilities like enterprise knowledge and 365 opens up a new uh um you know in new territories in terms of not only companies buyers but also buyer personas that we're going to be able to sell it to. We're going to get closer, much closer to the CIO office. We're going to get much closer to the chief people office as a result of these products and capabilities. And so I think we're starting to scratch the surface of how this can look like over the next three years. And for that, I'm really excited.

Thanks for the past one.

Your next question comes from the line of Suhan Sukumar with Sifal. Please go ahead.

Good morning, guys. My first question, I wanted to touch on the AR reacceleration over H2. And obviously, there's some benefits there with the day force, and AWS headwinds tapering off this year, allowing the strong underlying growth to show. What is giving you guys that visibility from a net new ARS perspective? And how much is that growth that's coming from expansion versus net new?

It's a good question. So, you know, as we know, we are starting to lapse some of the quarters that make it easier for us to re-accelerate on the top line. So, you know, just as a reminder, AWS, Charington, Chief Forum last year, that was about $4 million. And we have BayForce, which we've disclosed, has essentially gone from 19.5 to 6.5 mil in the current quarter. So we're lapsing in, let's call it $19 million of solids over the next four quarters. What's given us that confidence is really what I talked about before, where, you know, we're seeing strength across our end markets, whether we're talking about mid markets, you know, Gov, if you think about last Q3, we essentially won FedRAMP, I think it was three to four months prior to this September 30th close. So we didn't have much of an opportunity to play in the FedRAMP space. This is really what we consider our first Q3 with significant pipe and the ability to win in FedRAMP. So we have the FedRAMP opportunity. Enterprise, you know, there's no doubt about it. The year of year growth is significant. We're seeing strong performance, good pipeline. And when you just add everything together, there is pretty easy to see how we can re-accelerate.

Okay. Good. Thank you for that color. My second question, I want to touch on more from a balance sheet, capital allocation perspective. You guys appear to be in investment mode, given the new FDE model, the healthcare vertical ramp. And I think, and I have to think strategic acquisitions may still be part of the overall strategy. What is the leveraging path here to get you to a more flexible balance sheet? And can you remind us on what your capital allocation priorities are? Thank you.

So if you look at the numbers today, you know, and I'm just going to use some clean round numbers to make it a little bit easier. So we have $45 million in cash. We have about $90 million of debt. So let's call it $45 net debt on our annual EBITDA guide. You know, as we know, we've announced an SIV for Red that's $70 million funded by 60. Now, you know, at the same time, it's a bit of a nuanced question because we don't know how many shares will get tendered in the SIV. You know, if we look at today and you think about a rational investor, you know, our current stock price is relatively close. We're slightly above our SID price, but that would suggest we're going to have fairly, frankly, no shares tender to, you know, the rational assumption to make as of today. But, you know, we need to, you know, always never say never, so we need to think about the maximum potential. So, you know, we do think at the moment, as Alessio mentioned, we are looking at opportunities. You know, while Docebo made two acquisitions in H1, we don't believe that's the norm. You know, we are very much an organic growth shop that's in our DNA and that will always be part of our DNA. you know will we continue to look at other opportunities such as 365 that are easier bolt-on that improve our sales and marketing deficiency because it's an easy add-on you know we will look at that but we just don't see anything in the next 12 months so if you think about you know 12 months of runway or strong free cash flow generation you know we do think we have capacity to you know look at maybe increasing that capacity paid down debt or building up cash on your second question new logo versus expansion you know we are typically 65 new logo 35 expansion and we've seen that formula relatively similar in q2 in q1 it was a little more heavily shifted towards expansion because we had a couple couple of large expansions but you know we're generally Okay, okay, great.

Thanks for taking my questions, guys. I'll pass the line.

And that concludes the question and answer session. I would now like to turn the conference back over to Alessio for closing comments.

Thank you all for being on the call today, and we look forward to our next earnings call in November. Have a good day.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.