Docebo (TSX:DCBO) has had quite a year to remember. The company’s Initial Public Offering (IPO) in October 2019 was welcomed with little fanfare. However, with society trending in such a way that makes its business stand out, it was only a matter of time before the company exploded. The COVID-19 pandemic may have done much in accelerating its adoption as well. Now, with its Q3 earnings call scheduled for Thursday morning, what can we expect?
What happened during its latest earnings call?
Docebo’s Q2 earnings call was largely successful. The company opened by highlighting some of its most impressive points regarding organic growth. In Q2, Docebo saw a 54.5% year over year increase in its annual recurring revenue. This is in addition to a 55.1% year-over-year increase in the company’s subscription revenue. Both of these are very promising, as recurring and subscription revenue are seen as the gold standard among high-growth tech companies.
It is also important to note that Docebo’s revenue is becoming increasingly diversified. The company is working on increasing its reach outside of North America, as the next stage of its growth strategy. According to its Q2 earnings report, 29% of Docebo’s revenue came from Europe, the Middle East, and Africa.
What has happened since then?
The company had a fairly eventful Q3. The company already claims more than 2,000 customers currently using its best-in-class platform. Among these include Hubspot, Uber, and Walmart. However, this list became a lot more impressive this quarter.
In early September, Docebo announced that Amazon had chosen the company to power its AWS Training and Certification product offerings. This is a very impressive feat for Docebo given that the industry it operates in is very competitive and features several larger companies. The agreement with Amazon is a multi-year contract, which will provide Docebo with predictable revenue for the next few years.
Docebo was also recently chosen by Economical Insurance to help revamp and personalize the learning experience for its employees. Economical is a Canadian insurer that was founded nearly 150 years ago. The company is rapidly-growing and looks to IPO in the near future.
Finally, Docebo has committed to enhancing customer success by launching its Global Customer Experience (CX) team. With this addition, the company announced the addition of Jared Cook to its executive team, as the VP of Customer Experience. This announcement also came with news of Docebo University, allowing L&D professionals with a suite of 40 self-paced courses to help customers build world-class educational experiences.
What can we expect this week?
Docebo is firmly committed to growth and has done an excellent job in acquiring big customers this past quarter. The company has also shown an initiative in retaining its current customers, through its CX team and Docebo University. The LMS market is growing at a 21% compound annual growth rate, and Docebo stands atop its peers as one of the best choices in the industry. With Docebo’s Net Dollar Retention Rate well above 100%, I expect a strong earnings call.
Foolish takeaway
Although I never advise plays around earnings calls, I remain very bullish on Docebo. I believe the company is one of the top growth stocks in Canada at the moment. Docebo has been updating investors on a very impressive quarter as we head into its earnings call. Regardless of the outcome, this company remains a top pick for growth portfolios.
