Conference Transcript - DCBO 2026-05-12

Brandon Farber, Analyst — Other

Awesome. Thanks everyone for joining us. My name is Ryan McDonald and I lead Needham's

Ryan MacDonald, Analyst — Needham

education technology research efforts. Today I'm pleased to be joined by Brandon Farber from Docebo for this fireside chat session. So we've got about 40 minutes to go through some questions, but we'll leave the last 5 to 10 for audience Q&A if you have any. So with that, Brandon, thanks for joining me today.

Brandon Farber, Analyst — Other

No problem. Thanks for having us.

Ryan MacDonald, Analyst — Needham

Absolutely. So maybe just to start off, you know, for those who are new to the Docebo story. How about a brief overview of the business? Brief. Hard to keep that brief. I'll try to keep

Brandon Farber, Analyst — Other

it under 40 minutes. There you go. There you go. So Docebo is a learning management system LMS. So traditionally, when I first heard about Docebo and heard it was an LMS, I always go back to start my career at KPMG. In my first two to three weeks, I was just staring at an LMS, doing compliance training, onboarding, figuring out how to navigate this massive company. But over the past five years, LMS has really transformed into more of just an internal use case tool. And when I talk about internal use case, we're really talking about onboarding, compliance, talent development. That's your traditional storied LMS company. Docebo, when we were created, our founder, CEO, really thought about learning is more than just internal, but you want to train all aspects of your company. So you want to train your customers, your partners, if you're an association, sports organization, you want to train everyone involved in that company. So from the ground zero, Docebo was built on a platform that could solve multiple different use cases and multiple different platforms. so just to give you some more concrete examples from an external use case perspective we solve we serve membership associations so you know I hate to use this example for you but USA hockey is one of our largest customers and they only have a thousand employees but they train about 600,000 external audiences what are those external audiences it's referees it's volunteers it's youth hockey it's everyone involved in that association and we have we have multiple different sports associations we have world anti-doping so every Olympics they just train a massive audience of all the athletes we have special Olympics MLB a lot of niche sports organizations so that's that's one piece of the external Academy the other one is customer academies that that could be monetized or unmonetized so if you think about customer like Databricks yep they've been using docebo since probably 2020 started at 100k customer now over a million plus they have one of the most successful external academies with docebo it's monetized on monetized and you know why is databricks doing this they want as many people knowledgeable on how to use databricks so that when they go to company XYZ instead of using one of their competitors they can raise their hand and say hey I'm a certified databricks engineer and have this certification here it is and you know most recently you know very excited is that because we have this relationship with Databricks and we just acquired 365 which is on the skills intelligence 70 days after we acquired that tool they decided to purchase not only used Ochebo for external Academy but also for skills so that was an internal tool that funny enough they were trying to vibe code themselves and once they saw the feature-rich platform that we acquired they stopped what they were doing and they said all right I'm not gonna invest my time in building this because clearly Docebo has thought about all the rules engine all the history of skills I can invest and buy that tool and then there's partner training so we had a fortune 100 company purchase Docebo this quarter and all they're using us is for partner education so 50% of the revenues is served by partners. They have partners in 90 different countries. Now, if you think about a manufacturing company, you have, you know, one product that sometimes touches thousands of different people. How do you train them on best practices? You know, how do you tier and know which partner is better than the others? So they have gold, silver, bronze, for example, certifications. If you're a gold partner, you get better pricing. So it's actually a very key learning tool for this company. Yeah, good incentive for sure. And I like the Databricks

Ryan MacDonald, Analyst — Needham

example, because so often we get questions from investors these days about, well, when will these companies start trying to develop things internally using something like Claude Cowork? And so to have a company like Databricks that actually tried to do this internally, which is obviously a tech forward, software forward, AI forward company, and they said, you know, we can't do this as well as Docebo. I think that shows sort of the defensibility of the moat that you have against sort of the AI trend right now. Absolutely. Yeah. And speaking of niche sports organizations, is Team Canada a Docebo customer? Not yet. Not yet. Good opportunity, maybe. We could probably have Team USA call them up and be a good reference there. All right. Well, let's go into the recent results. You had a really strong start to 2026, you know, beating consensus across the board, top end, bottom line. And it seems like enterprise really is driving that strong performance. You had $2 million-plus expansions really early in the year, which was great. But can you just provide a bit more color on some of these customers and how representative they are of wins in terms of how you're viewing the pipeline and the demand trend right now?

Brandon Farber, Analyst — Other

Yeah, for sure, for sure. Maybe I'll just take a step and go back to 2025. So 2025, we called out a couple of segments that was really driving our business. So three-quarters in a row, we saw a really strong strength in mid-market and EMEA. And we were always pretty transparent saying, hey, listen, Enterprise was struggling in 2025. We had Q1, you know, the tariff noise and, you know, pausing delays and, frankly, some execution on Decebo's end and product. You know, what was the product gap? It was skills. We filled that product gap. We have new leadership. And the Enterprise, it takes about 9 to 12 months to turn over that business and really improve. So Q1 was really just a combination of everything we worked in 2025 came to fruition. We had really strong pipeline. We had really strong win rates. We had really strong competitive displacements. And what drove the guidance increase, it was the strength in enterprise. What's going to drive the, you know, being raised in Q2 is going to be in our enterprise. So, you know, what we really like is we're not only seeing the execution, we're also seeing the demand. And then demand is telling us that for the next two to three quarters, enterprise is going to perform well. But, you know, as I always say, one quarter is it's a data point. It's not a trend. So once we see two to three quarters of strong enterprise, then we're going to embed that in our guidance going forward.

Ryan MacDonald, Analyst — Needham

And maybe just like coming off of your annual customer conference. That was a few weeks ago. Like how are you incrementally feeling about sort of that enterprise pipeline, you know, following the conference?

Brandon Farber, Analyst — Other

Yeah, it's always a great event for Pipeline because we don't only have customers, we have prospects. So roughly in a given year, 10 to 20% of our Inspire attendees are prospects, and they get sold at that event. You know, our win rates is close to 100% on the prospects that attend because if they're speaking to customers, they're seeing, they get access to Alessio, they get access to our CPO or CTO, and they hear about our vision and what we're doing, and they're always impressed, right? So we had a lot of strong enterprise customers and prospects at that event. We were building the pipeline, and now we're going to close the deals over the next two quarters. It was actually one of the prime reasons why we flipped Inspire from October to April because we'd have our Inspire in October win the deals, but it didn't contribute much to that fiscal year. So we want to close the deals and raise our guidance for the year.

Ryan MacDonald, Analyst — Needham

Always good to have conversations, too, when there's still money earlier in the year to be spent and available for budgets, right? So that's good. And the Docebo story is not just a growth story, right? It's also a really impressive margin story. So your updated guidance is for north of 20% EBITDA margins this fiscal year. You know, where are you seeing sort of the most leverage in the business model and how much of that incremental margin improvement that you're seeing in the business is driven by AI productivity, if at all yet?

Brandon Farber, Analyst — Other

Yeah, so one of the things that's really great about Docebo is that we've been doing a step-forward change over the past six years on EBITDA. This is not a business where we've gone from 5% EBITDA to 20% because we've had to, or changes in the market have forced us. We've been really methodically stepping EBITDA up for the past three years. It's about 2% per year from 16 to 20, and we think we could keep doing that. From a guidance perspective, so we've raised our total year revenues by 3.5 mil compared to our guide. About two mil of that was our beat in Q1, and the rest was flow through throughout the year. So if I think about EBITDA, well, our subscription revenue grew by two million, and we're essentially raising EBITDA by two million. So what we're trying to say is that our high margin revenues flow into the bottom line, and by servicing the higher revenue stream, we don't need to add incrementally. Like GNA, we're staffed up to the next level of error. I don't need to add anyone on my finance team from 250 to 300. I expect that out of all my G&A partners as well. From sales and marketing, we're certainly seeing efficiencies. And sometimes SaaS, we get very fancy with our metrics of LTV to CAC and CAC ratios, LTV. But sometimes you can really just simplify it on how is quota attainment. Higher the quota attainment, the better your sales efficiency. The lower your quota attainment, your sales team is inefficient. And what we're seeing is higher quota attainment because of the enterprise performance, mid-market strength, and you're going to see sales efficiencies in the back half of 2026.

Ryan MacDonald, Analyst — Needham

Yeah, excellent. That's great to hear. Let's take a step back and talk about the L&D market and how it's evolving a bit. It seems like the theme this year that we keep hearing is sort of this learning in the flow of work. And it seems like there's really three components to sort of execute on this learning in the flow of work vision. You need to be able to access core systems like the AHRS, the LMS, and others. And you need to do that to sort of understand where the skills gaps are within your organization. Then you need to create and embed content directly into some of these systems so that if I'm an employee, I need to be able to go through and, you know, have bite-sized sort of content so I can just learn quickly and not have to take time and go into a separate system. And then, you know, your platform, it's not really easily built, but can you talk about what you're doing and how you're kind of building the pieces together to be able to execute on the vision of learning in the flow of work?

Brandon Farber, Analyst — Other

Yeah. And this is actually a good example of, you know, Docebo being innovative and at the forefront because we came out with a product called Docebo Flow in 2021. At that time it just it was too early. It didn't have product market fit. People didn't really understand and frankly it was heavy on tech because someone on their organization in IT had to help us build in through APIs to embed Docebo into their workflow work. Today so much more simpler because through docebo companion you could add a docebo through your browser extension and then docebo is literally in your flow of work if you're in salesforce and you don't know how to create an opportunity well docebo through your flow could create a video that says here's how you create an opportunity do xyz we'll show you a video and then you can repeat it in the flow of work yeah so you know we've been building off something we've built in 2021 and we've learned from our mistakes and now we've created like a seamless tool that anyone could really work with. But also your question is, it's touching on a little bit of the closed loop that we're trying to accomplish. So from a skills perspective, you know, you, it's funny because people always say this, wow, I didn't know this didn't live inside of an LMS. But traditionally, LMS and skills has always been separate. So you'd have an LMS plus globe to plus fuel 50. These niche point solutions that focus on skills intelligence you know docebo is the first platform where we're really combining skills plus learning yep and the great thing about that is you know let's say you're an engineer and there's a new skill that's popping up so I'm just gonna use a real example that's really hot yeah docebo is token optimization so if I'm the if I'm the CTO actually if I'm the CFO I'm gonna go to my CTO and say you need to trade every single one of your engineers on how to become an expert on token optimization. So they create that skill, and then through Docebo, we can create the content through our agents, and they're going to close that gap. And I'm going to come to them and say, if you haven't taken that train and optimized tokens, you're in big trouble. That's right, that's right. So there's never been a real tool that closes the loop from skills to actually filling that skill gap. And that's what Docebo is trying to create.

Ryan MacDonald, Analyst — Needham

And it's a big challenge that we're seeing from enterprise organizations today is just simply even on the first part of that is identifying where their skills gaps are in their organization because they're having to shift from sort of job-based sort of roles to skills-based roles and how they think about the employees in their organization. So can you talk about the 365 talents acquisition you made earlier this year and how it helps to identify those skills gaps and sort of help to start to fill those gaps?

Brandon Farber, Analyst — Other

Yeah, so 365 is a completely AI-powered skills intelligence tool that really focuses on three use cases, skills intelligence, internal mobility, and talent marketplace. It's a true enterprise-grade tool so that target audiences 1,000 employees are above. And right now, the current customer base's majority is French enterprise because it's a company based out of France. So if you think about a complex, you know let's just go through an example like a bank so a bank has 100,000 employees maybe they have an attrition rate of 15% so they need to fill 15,000 roles a year well if you're a junior analyst how do you know what skills you need to get to the next level if you want to be a manager how do you know what skills you need so there's there's a skills graph with all the skills you currently have and all the skills that you need to get in order to get to that next role and then the future is all those skills gap where we're going to create content for you to actually watch the content and then prove that you filled that and you know we have proof points from customers that through this talent marketplace internal mobility they've saved a material amount of money on external recruiting because their stats on internal mobility has significantly increased so that junior analyst is now becoming an analyst because they know how to get there and they know

Ryan MacDonald, Analyst — Needham

the role actually exists and we know and we and that's that's a huge roi that i think often gets overlooked because we know that you know it typically can take and cost about up to 50 to 60 percent of what a person's salary is and filling the role in terms of getting that person hired and the lost productivity that you have so anything you can do to sort of limit you know turnover in your workforce is is a real value proposition for these organizations so as we think about like We've heard a number of L&D vendors across the market talk about learning in the flow of work and sort of this need for this closed-loop ecosystem, and it's across various points. Some are LMS vendors, some are HRS vendors, some are content vendors. Can you talk about what gives Docebo the right to win in this space, and where do you think the natural point of consolidation needs to be to create that closed loop? Why is it Docebo?

Brandon Farber, Analyst — Other

Yeah, I mean, I think we're in a unique position where Docebo is right now a system of record for all learning. So we have the modern database that shows employee XYZ took training on XYZ, and, you know, we have all that history of data. So, you know, when you compare it to, like, a content company, they don't have the they're not a central repository for that data right so you know I think when you talk about the closed loop it's very hard for a content company to actually close the loop like an LMS so you know we think Docebo being the only LMS plus skills you know our right

Ryan MacDonald, Analyst — Needham

to win is very large in that space absolutely and then as you as you evolve the platform beyond LMS into including knowledge and skills, and as you start to monetize this, how much incrementally larger does this make the total addressable market for Docebo?

Brandon Farber, Analyst — Other

So, you know, funny enough, what we've seen, we had a couple of shared customers between 365 and Docebo, and, you know, I'm just going to make up an example, but if they paid 100K for Docebo, they're also paying 100K for skills. So it's actually about doubling our ACV if we're acquiring a company that's using both solutions. And then just one point to your last data point as well is that we've actually seen demand from our customers to use skills for external use cases. So when you're talking about, you know, your content players who are only focused on the internal use case, if we could turn 365 to actually map skills for partners. You know, Docevo, we have about 100 partners. How do I know who's my best healthcare implementer? yeah I don't know yeah yeah it would be great to have a tool that actually tells me that right

Ryan MacDonald, Analyst — Needham

and in order and then basically you could also look at okay once you identify what your best is then you can understand better well what are the skills associated with that makes that partner the best and then train the rest of it that obviously ends up generating more revenue for your business over time so interesting as we migrate the discussion of the from the vision of the platform and we're trying to go to sort of the current state of the industry and the market itself. What are you seeing right now in terms of enterprise L&D budget trends and are you seeing any budget increases to go and tackle things like skills mapping and AI content? Yeah, so I always

Brandon Farber, Analyst — Other

like on this question, I always like to remind people probably about 50% of our revenues come from L&D. The other 50% is actually in the CRO budget because of sales enablement. It's in the CIOs because they're in charge of consolidating 10 different LMSs. It's in the CEO of a sports organization sometimes because they're in charge of, you know, training their whole organization. So it's an interesting question, but we've certainly seen budgets exist when you're providing value. So if you could go into an organization and say, here's the ROI, here's the value you get from skills, companies are willing to spend that money. but if you go into a sales cycle and the companies don't understand you know what is the value of the solution how am I getting more efficient how do I save money it's hard to get that incremental

Ryan MacDonald, Analyst — Needham

wallet share yeah yeah I mean and totally take your point but like a lot of the times we see discussions or when it comes to budgets of of there needs to be an awareness or a catalyst to go and start searching for those platforms like Docebo out there and so I'm kind of curious like What do you think needs to be the catalyst to unlock incremental budgets beyond sort of what we're already seeing? And is it the sort of forced platform refresh cycle we're seeing, like what Cornerstone is kind of creating for their customer base? Do you think that helps to unlock some of the opportunity and budget in the near term?

Brandon Farber, Analyst — Other

I mean, we're certainly, based off what you just discussed, we're seeing higher RFP volume this year in the enterprise space. I mean, the LMS internal, it's a switcher's market, right? So every three to five years, you have the same companies. And now that we've been in the enterprise space, you know, it's funny. We're seeing some prospects come back to the market that we lost three years ago. And, you know, we're so much more of a mature company. We know exactly what they want. And I think our chance to win that logo is incrementally higher than it used to be. But the internal, it's a switcher's market, right? And an internal use case, you're sometimes limited to how many employees does that customer have? and then you know internal customer academies we really do see companies are willing to spend more if they're getting higher demand from their customers to look at their content yeah so if they're monetizing their content more why would you not be willing to spend more on the lms yeah

Ryan MacDonald, Analyst — Needham

absolutely absolutely you know i spoke with one large customer at inspire at the conference a few weeks ago and they said i bought docebo because i wanted to have a reliable lms but i wanted to know that they have a plan for AI as well. How representative do you think that comment is in terms of the current discussions you're having within the pipeline? And is AI really a current driver of adoption, or is that more of a future expansion opportunity within that existing base

Brandon Farber, Analyst — Other

of customers? Yeah, so the L&D buyer persona is always slower to adopt technology curves, right? We're not selling to the CIOs, CTOs who are in-clawed every day and just being force-fed to use it. The L&D buyer persona, they're behind. And they want a tool that's thinking about change. They want a tool that is actually innovative and has real proof points, but it's not their main buying decision today. And I'll give you a real example. a prospect in Europe, a large consulting company, they took a demo of Docebo, and before we announced at Inspire that we had MCP functionality, they asked us hey, can we use Docebo through MCP? Before we even answered the question, we said, how do you want to use Docebo through MCP? And they said, I have no idea. But I want to know that you're thinking about it, so that when I do know, I can use it. So I think our buyer persona is slightly they're slightly behind so we really have two streams in our R&D department right now we have the innovative forefront we have to be doing this so that's the agent hub that's enterprise knowledge that's MCP it may get it may get low usage when it first comes out you know that's the reality and then we have the core platform Inspire you may have seen you know people cheering that you could export PDFs now in some of our functionalities like just the bare bones, you know, meat of the platform. But at some point, they're going to move to the innovative stuff, and we want to make sure we have it. And with that, we just, you know, when people think about Docebo, they think about the most innovative tools that L&D can use.

Ryan MacDonald, Analyst — Needham

Yeah, it's definitely one of those underappreciated aspects of when you're at customer conferences, like, you know, you get a lot of the users of the software at the conference, obviously, and so there's a lot more excitement for like, you know, updates to the core functionality of the business. And I think some of the legacy competitors in the space thought too much about the future and forgot to actually maintain the core system. And it's like, if you can't, if you don't have a working piece of software at the core, you're never going to be able to actually take advantage of any innovation over time. So yeah, interesting. As AI gets weaved more into the platform and customer or the usage of Docebo's AI tools grows. Does this drive a shift away from traditional SaaS pricing models to more of a consumption-based pricing model over time? And if so, what do you think the main opportunities and risks are to that transition?

Brandon Farber, Analyst — Other

So maybe we'll take a step back and actually think how Docebo prices today. So we price per seat, but we also price per monthly active user. So we technically already have a usage-based pricing. Now, it's not a true usage base because a company, they buy a bundle of 5,000 monthly active users. If you go below that, you're still paying for the 5,000. But if you have an organization of 10,000 and you only need 1,000 and only 1,000 users go in per month, you can only pay for 1,000 monthly active users. So we've actually always had a hybrid usage-based pricing from agent hub, enterprise knowledge, where we haven't released how we're going to monetize it. But, you know, if you think about it, and not saying this is how we're going to monetize, but, you know, some companies are monetizing per agent. And, you know, while a company, you're limited to 1,000 employees, you're not limited to five agents. You could have 10,000 agents, you could have 100,000 agents, as long as you're providing value. So, you know, there are some arguments for SaaS companies is that, you know, agentic agent pricing actually could be a tailwind because the usage could be much higher.

Ryan MacDonald, Analyst — Needham

Yeah, absolutely. I mean, and when you mentioned that you're not just selling to the head of L&D, you're selling to the CIO and sometimes the CFO, you know, how do they feel about such pricing models on an agent basis or on a token basis? I mean, I imagine as a CFO, it probably makes you break into a cold sweat a little bit, you know, when you think about the budget. I hate it.

Brandon Farber, Analyst — Other

We hate to go back to Inspire, but at Inspire, we have our top customers and top prospects, and they have access to our whole management team. And, you know, Alessio strategically asked, like, raise your hands if you want Docebo to switch to a completely usage-based price. And guess how many hands were raised? There you go. So, you know, it's people like predictability, especially in G&A software. You know, the last thing a CHRO wants to do is go to their CFO and say, I blew through my budget in two months. Can I get more? Because the CFO is going to say no. Yeah, exactly.

Ryan MacDonald, Analyst — Needham

Maybe shifting to the go-to-market, I think what's been really impressive, and we kind of talked about sort of like the enterprise motion and how you've really bolstered your chops there as an organization. Can you just talk about over the last couple of years of what investments you've made and then how you've adjusted, say, the structure and the type of talent you've brought in to really become more of an enterprise business versus one that really focuses on SMB mid-market?

Brandon Farber, Analyst — Other

Yeah, I think this is a little bit of time in market and learning from your mistakes. So we started to create this enterprise team in 2021. And, you know, looking back, you know, we always call it they weren't actually an enterprise team. So we had a team of eight sellers, a combination of quota carriers, account managers, and a manager. And the majority of that head counter sellers were Docebo reps that previously sold in the S&B and mid-market space. So they were treating the enterprise sales cycle exactly the way they were treating mid-market. And we learned quickly over time that that's not how you sell. The enterprise motion is completely different. You have to multi-thread it. You have to work it over three years, sometimes over five. You need to know who the vendor is, when the end date is. You have to do a true solution-based selling. And I think just over time, we've upskilled our team. We've upskilled the talent. Our product has matured. So when you talk about skills, in 2025, we noticed in enterprise RFPs, the number one feature that was coming up was skills. and that was a feature we didn't really have. So we closed the product gap, we closed the talent gap, and now we're seeing the fruits of that in 2026. That's great.

Ryan MacDonald, Analyst — Needham

And as you think about, let's call it capacity and sort of market coverage, let's call it that, what percent RFPs do you think you see within the market today and how does that compare to 12 or 24 months ago?

Brandon Farber, Analyst — Other

That's a really interesting question. I think from an enterprise perspective, we're probably seeing close to 50% more than we used to. Wow. And we still don't see the whole RFP market. And the reason why I say that is because there's a couple of sectors that Docebo needs to get better at. So if I think about healthcare, healthcare has very niche requirements, you have to have a validated environment, you have to have CFR 11, sometimes you need to have HIPAA. you need, you know, niche content management that they need in the healthcare space. So we're actually potentially interested in, you know, should we verticalize that and have that as another avenue of growth in 27 and 28? Yeah. But, you know, those type of RFPs we don't see today. Two years ago, we didn't see pretty much any government RFPs, right? And now we're seeing significantly more government RFPs as it comes out. So I think as we mature, as we get more of these logos and different verticals, our product is getting better for those verticals, and we're seeing more RFP falling as well.

Ryan MacDonald, Analyst — Needham

Well, as the resident health tech analyst at Needham as well, you will be horrified by how antiquated some of those technology infrastructure

Brandon Farber, Analyst — Other

and healthcare companies are.

Ryan MacDonald, Analyst — Needham

So good luck with that. Before I finish up with a few more questions, I wanted to just check with the audience to see if there was any audience questions for Brennan. All right, so let's shift over to the U.S. government segment. Can you give us a sense of what the current pipeline looks here across both Fed and SLED? I know the federal government opportunity in particular has been a long-time sort of slow burn as you've built into it, but you've crushed it in SLED over the last couple of years. So maybe just talk about the state of those two businesses.

Brandon Farber, Analyst — Other

Yeah, so SLED, we've been probably selling in the SLED for close to two years. Fed, less than 12 months. We just became FedRAMP compliant at the end of May, and over that period of time we've been building the hype and building the relationships because frankly the government business is a very relationship business. So what I would say is that over the last three quarters our pipeline has exceeded targets and we're seeing a mix of demand pretty much 50-50 between SLED and Fed and then within Fed it's about 50-50 between on-prem to cloud versus some legacy competitor replacements. So we're seeing a very healthy mix of pipeline, and we're seeing pipeline demand that gave us confidence to say SLED and Q2 is going to have a good quarter. If you think about budget timelines, June 30th tends to be when a lot of the SLED contracts get signed, and Fed is September 30th. So we're seeing strong demand to say Q2 is going to be a good SLED quarter. Q3 will be our first real learning proof points from a Fed perspective. And, you know, the reality is Fed teams tends to be lower amount of units, higher ARR. So, you know, Lesio, he used to be a seller and he always has this quote that sometimes you need to learn through losing before you can win. We're hoping that doesn't happen this Q3, but in our guidance, We're trying to be cautious because this is our real first hit at a true Q3 fed quarter. We're actually seeing a lot of mature pipe that is signaling we're going to win some units, but it's early and we don't know what we don't know.

Ryan MacDonald, Analyst — Needham

Yeah, for sure. Maybe one of the last things that I want to touch on is talk about some of the metrics and the dynamics of the strength you're seeing at enterprise and then what you're seeing within the OEM channel and the wind down there. Because I think what really hit me from our conversation after Q1 earnings was, you know, how fast your enterprise customer count is, how fast ACV is growing, AR is growing. And yet it's a lot faster than the overall top line number because of the OEM dynamic. So maybe just walk, you know, people in the room through that.

Brandon Farber, Analyst — Other

Yeah, so we had an OEM relationship with Dayforce where essentially Dayforce white label Docebo as their own product. So they sold Docebo as a product called Dayforce Learning Module. And when it came to Dayforce for payroll, it was a very easy add-on for them to sell learning as well. Their population is a heavy onboarding compliance use case. A use case where, frankly, it's not Docebo's ideal customer profile, which is why it's a great idea for us to OEM Docebo for payroll providers. in, I think it was Q1 of 2024, they acquired a small LMS called Illumi. They took about 12 months to re-platform it, embed it within their platform. So when I think about Q1 2025, Dayforce ARR with Docebo is roughly 20 mil, and that's wind down to 8 mil in Q1 of 2026. So we have this headwind embedded within our top line, ARR, reported ARR, but then within that we've actually accelerated core Dochebo growth so you know excluding all that wind down and acquired ARR we grew 13.6 versus 12.5 last quarter and our ARR above 100k is growing 31% and that's our stickier customer, higher expansion opportunity, longer contracts, we've been talking about some three five-year contracts in the enterprise space so So over time, you know, once we get over those headwinds, you know, it's very easy to model how on a top line AR perspective, it's going to be pretty easy to start reaccelerating growth in Q3, Q4, and into 2027 for us.

Ryan MacDonald, Analyst — Needham

And how's that factoring into your sort of updated target model that you provided at Inspire?

Brandon Farber, Analyst — Other

Yeah, so from a revenue perspective, we put 10% to 15% compounded growth over the next three years. And when we talk about all these levers, we talked about enterprise, we talked about skills, we talked about government, we talked about external use case, we're going to use all those levers we have to continue to compound at a healthy rate. And then if you look at the EBITDA guidance, I believe it's roughly 27% is the midpoint on our EBITDA guide. So if you take the midpoint of revenues, 12 and a half, and the midpoint of EBITDA, that gets you to a roll of 40. Yeah, absolutely.

Ryan MacDonald, Analyst — Needham

Awesome. Last one, capital allocation. You have a strong balance sheet. You've made a couple acquisitions with 365, more recently Zyve. How are you thinking about uses of cash?

Brandon Farber, Analyst — Other

Yeah, so we had a busy quarter in capital allocation. Yeah, you might not want to do it for a little bit. Busy quarter. So reminder, we bought 365, which was roughly 55 plus five earnouts. We did a $6 million SIB plus another $3 to $4 on our NCIB. Right now, how we think about capital allocation, I think from an M&A perspective, we're more in execution mode. On Docebo, we don't have a strong history in M&A, and we're not moving towards a company that's buying revenues. That's just not in our DNA. We want to be an organic growth story. So we're going to really put our heads down, focus on execution. At the same time, we look at our stock. We're trading today, I think, down to close to 8x EBITDA. It's pretty tempting to continue to buy back shares. So we're likely going to continue to be active in our buy back.

Ryan MacDonald, Analyst — Needham

Well, Brandon, that's all I've got for you. Thanks so much for taking the time today. Thanks, everyone, for joining us. There we go.

Brandon Farber, Analyst — Other

Appreciate it. Yeah, that was good.