Docebo (DCBO) 11 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Mike McCarthy	Vice President of Investor Relations
Claudio Erba	Chief Executive Officer
Alessio Artuffo	President and Chief Operating Officer
Sukaran Mehta	Chief Financial Officer
Robert Young	Canaccord Genuity
Stephanie Price	CIBC
Richard Tse	National Bank Financial
Suthan Sukumar	Stifel
Josh Baer	Morgan Stanley
Daniel Chan	TD Securities
Christian Sgro	Eight Capital

Call transcript

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Operator

Good morning, everyone, and welcome to the Docebo Inc. Q3 2022 Earnings Call. All participants are currently in a listen-only mode.

We will open the line for a question-and-answer session for analysts following the presentation. Instructions will be provided at that time for research analysts to ask questions. please queue to for analysts return questions that the to any ask limit two themselves and We follow-ups. of I the would Relations President conference turn Mr. Investor call over now to Docebo's, like to Vice McCarthy. Mike Mike. ahead, go Please

Mike McCarthy

you, Thank operator.

could is we and respect information today actual forward-looking those to Any certain cause information future Before listeners the assumptions company's nature. information forward-looking discussed Docebo events. to may forward-looking would differ remind subject begin to current uncertainties that materially in in reflects projected be that statements. to Such risks, like views results such with from the

For to more the Docebo’s and on uncertainties refer which to filings EDGAR. assumptions available are related information on public SEDAR please forward-looking statements and risks,

financial measures. call the During non-IFRS we will certain reference

useful standardized to including meanings additional financial IFRS. MD&A note all that believe US about not information non-IFRS unless measures references information otherwise in regarding are stated dollars. they our measures, IFRS we our any under have measures reconciliations performance, these and not our figures the Please for recognized to nearest provide supplemental measures. Please are see do financial Although financial

Claudio Now, turn CEO Founder, over the Erba. to I'd and Docebo's call to like

Claudio Erba

macroeconomic for and in an flow. President is environment that our and Hello joining Even free continues revenue we growth increasingly me well the execute headwind. Sukaran by delivered Docebo in those to COO; challenges, cash quarter for thank Mehta, With everybody and Alessio earnings call. you and face third our us strong today Artuffo, our of impacted CFO. is

with in we a we consistent priority segments on of schedule for as The and macroeconomic in weighted decision growth EBITDA adjusted leverage operating a year by characterized to shareholders. elongated making. balance for of over especially mean global main Docebo term certain sheet, this total as strong saw large XX% us as efficiency class surpasses is foreign and also for the ahead pleased year long capital a only Adjusted is important complemented and addressable consistent are demonstrate We Docebo, balanced to report quarter, of cycle for what what top which unlocking is growth, our was positive drive to journey, is consensus issues our last continue underpenetrated of with delivered estimates. value market. profitability world one exchange, This ARR best that

a customers Docebo competitors a is advantage we follows. our push offer mode, mover as to solution modern businesses are of and first grow showcase we have strong use continue the achieve [indiscernible] that specific key driving to One, We outcome. While are that legacy now see time architecture. all implement And in address as choose a to in concentrating the redefining how this our competitive organic within lead and by consolidation on few to customer this fashion. solution case position business need innovation disciplined our areas the

greenfield large in doing We term our and see restaurant. are such external responsible R&A franchisee, where down in ahead. as on service hiring education, both growth case strategic marketing. effectively And and objectives and long quick use opportunities drive segment we and continue areas these Two, sales and necessary customer finally, enterprise doing to quite double to

closely Officer. brings as part to I our He role the strategy say where product. [indiscernible] to the of efficiency expanded Chief and design more of wealth President. of senior that seen Fabio Docebo last (ph) leader for He some Workday President, its [Spire] product on As core conference Vice drive to our was Alessio' necessary with team joining with growth us Chief a Docebo sales and and month, you as And ambitions. achieve am a for delighted Simosko he with flagship even Senior have leadership may and him the have Officer Nina me from HCM Ryan announce user Operating in marketing. Pirovano, taking during we will experience Product Brock revenue Workday, operational work roles product

extend to him Rudy his and emphasize our I Valdez closing, appreciation pursuit. wish also and for We contribution want thanks growth remain future in his to we that In well focus.

to growth improving deliver Our sustainable is steadily commitment to continue with profitability.

their achieve outlook be hand the job objectives. While more incrementally And be those Alessio. assured and now, in to can the necessary near employees become call shareholders may proactive that customer, to challenging, we'll our I'll term making

Alessio Artuffo

Thank you, Claudia, and good everyone. morning,

entrusting Officer. thank Sales for report me my board with place. will and colleagues Before in put President and and to and the I strong to role of through continue leaders marketing me I the members responsibilities we've begin, want Operating Chief to

I'm working directly Docebo’s forward, day strategic with to more operations day to vision. Claudio Going align

true Now, into elongate. drive QX with tapping stacks solutions. are on for quarter our quarter a and investments our This we reflecting their hybrid that on quarter and slower experienced strong seasonally better is complexity to to customers as reduce third generally results. internal capabilities leveraging three UK the quarter two, during period we enables this especially much is on and Docebo, returns larger innovation our discussion deal in and This in continued them saw tech about of cycles Quarter uncertainty. another was and execution. our then external our focus

look very, the to we of which And remain very as execution ever pipeline confidence quality win rates our growing our evolving calibrating and macro we take forward, the environment. our are strong. We in

areas. correlation or revenue us base that structured the vast certain we excess is expand sell have What new strengthen customers One, how highlight in organization our points growth concentrating that, position are for Many XX% creating retention opportunity key between tight have enablement, Docebo customers is after is use As Docebo we're now drive longer a class we approximately sales go platform. use three This and approach to strategically existing case, to as the areas delivers succeed and and we see that, to outcomes we while market to go these education, a in package enhance to these focusing these From stream, cases opening that cases. of needs that What also of retention Docebo XXX%. learning such a we solution best up suite in to also business partner a investment ones. customers cross methodically. net our the in data we solution land on and case franchisee term. critical as in training, use Today, continue are view grow, based using more on of perspective, customer want. our use customer

a to necessary. collaboratively planned to tied sales we're engine and sophisticated resources demonstrate teams a the engineering And ROI leadership investment with comprehensive more processes our place, digital document working new brands. and system With value integrating are combined we we're in enhancing Second, [indiscernible]. finally, in generation marketing out to now demand with building

new the enterprise XXX net customers, three signed we including deals. During quarter, notable

Sonos, multiple experience home that and First compliance, and world's wireless Docebo internal company training. external audio. partner multi shows use customer sound is the of cases for leading It and inventor room include self-enablement,

is healthy learning for Docebo a Docebo unified additional using delivery Deliveroo, selected cases our are home European product for already food be platform Advanced gained demand external innovative Docebo are including offering. too Auto Upsells current onboarding across includes parts by compliance. use as internal training, implement based their Not digital single expand to supplier. globally. developed They enablement, and countries benefits sports XX both who has This use Docebo and authority. legacy an to us finding solution customer sales is stakeholders. multiple the multiple be stakeholders. long continue implementing and internal This the automotive in for and for selected a with operating needs multiple customers very a leading internally leadership to and company place. third aftermarket And cases, Parts, ago, in LMS Today, internal Deliveroo external Next telematics leading a

one OEM strategy. with UK, excellent We than seeing LMS. also providing the a modules region products increased largest partners expansion with pleased conclusion, steadily headwinds. of in fundamental in the MHR, with we measured strategic balanced the where fashion a in growth TikTok. expanding partners saw case economic region such our I'm North see have presence a demand particular, market consistent beyond opportunities. we additional in greenfield them our Geographically, our remains our and core strong been America we're very EMEA profits In and and stronger as we're the In our providing our Nordics are the term external environment drivers near into long as growth multi-use we In with term opportunities with across APAC, where significant

and is our focus execution. the on improving thereby things we can, Our position controlling

prepared we're our desire journey. financial like of we to Our for the will of balanced the continue to leg evolving strategy just next for hand that long Sukaran to term I beginning call Docebo review ensure a show growth and we over the would to performance. our is results

Sukaran Mehta

and Alessio, morning, you, Thank good everyone.

For interested, was accompanying XX, slide are detailed financial earnings and and call our website a Relations and morning. which for website found now ended financial also can breakdown of filed on available on results September the release The XXXX MD&A Investor available our months a three made our in statements, this nine press EDGAR. deck those be SEDAR are and on this

revenues XX% the representing of about million, revenue revenue for of XX% of total which the the was adjusting impact Annual increase adjusting $XX.X an total were XX% after recurring US reported, exchange of the Total Subscription million, XX% foreign year. the $XX impact revenue from was foreign quarter. to grew quarter an As million, revenue strengthening prior for third by of increase exchange. for the dollar, increased X%. $XXX.X after from

XX% average the ACV, foreign increased exchange. for from wide value, contract company adjusting or Our impact after

at to the As of from of approximately XXXX. up the $XX,XXX was company-wide ACV $XX,XXX reported, end third quarter XX%

Included third than third quarter higher and sell to improved focus of the for customers optimizing This revenue. second the slightly cash million of revenue. operating to decreased higher the increased expense and is best of operating of is for quarter. expense of percentage in by external slightly G&A, prior we of new discussed as $X.X for going profit gross the XX% and part scale. represented drive lines hybrid deck. area increased the QX operating of previously to rates. quarter an we $XX.X the flat from to logos quarter. as expenses efficiency greater marketing Operating to multi-use gain training our revenue XX.X% a the is extended sheet our quarter $XX.X absolute part this third these for on leverage are continued gain, manage quarter that R&D XX.X% continue scale. XX% operating the on important the were $XX.X unrealized. were or relates ARR forward. area for And million, total is incremental sales and through in in to elongation we what architecture an the driven the This basis approximately drive for percentage primarily using cross case note naturally Docebo million to from second XX.X% of in presented and with period. our million ARR comparable here the on were of most hosting XX% as R&D than the retention to that was $XX.X drive margin for the subscription Gross quarter summary of excluding sequentially $XX.X of cycle the as expenses Total or revenue. revenue Customers quarter investments investments XX.X% $XXX,XXX class that, will quarter, for declined exchange a million in to drive compared XX% is third Sales in second a on therefore in to expect and full we as from net foreign enterprise compared A this to in balance to New ARR. million basis the a net reported the million costs, second benefits in $XX costs to XXXX. continue investor

of percentage dollar As Europe. percentage strengthened, a based the in benefit X the to experienced a revenue being point core due our operations R&D US we as

consecutive quarter income quarter quarter. generated cash for million. and of extremely million loss for positive third the a the net We QX quarter pleased At income of are we for positive in adjusted $X.X for million million. We $X.X XXXX flow We EBITDA to adjusted million EBITDA a the the net of cash report $XX.X XXXX second held to second of $X.X cash compared compared for third of equivalents of end free million of second the an reported quarter. $XXX $X.X of the to

structure based strong of Our modest very as gives a through strategically a Share QX revenue X.X%. capital this the macroeconomic compensation invest and us was percentage navigate challenging flexibility to environment.

opening thoughts. I these questions, Before close with the want to line to

leverage an excellence quarter We execution enabled our performance. are positive adjusted operating to our improving EBITDA XX achieve committed of of as full profitability delivering Rule and have steadily essential and healthy us Consistent part operational target early. a to

We we the exchange for are to are EBITDA income our pleased share return, the intense period impact of but be shareholder not that net positive, the compensation, even and on positive focus only excluding adjusted includes also GAAP based foreign after gain. with

XX. XX. these uncertain a and discipline if Docebo growth I'd of That marked turn over drive operational to growth, said, it take the times, Finally, contributor long-term Rule towards the lean to to to see as as the analysts. we we efficiency Rule to the like That slowdown look some from my have to a we story being forward in remains and operator remarks. now questions remain concludes profitability of in we growth the prepared primary will

Operator

Thank Instructions] first you. Young question [Operator Canaccord. Please ahead. comes go with from Your Rob

Robert Young

good morning. Hi,

enablement You pipeline. you seeing talk pipeline? use deals you sales bit thought the close same emphasis on the larger is higher little opportunities I Are And see about already elongation you still impact. to What the external cycles cases? [indiscernible] noted sales do in a unless to

Mike McCarthy

please? question Hey, Rob, Mike, This you is for repeat can that us,

Claudio Erba

Louder?

Robert Young

Sure. Sure.

Okay.

So the customer slower deal behavior change signings. and closing you already in noted around times

that same just of you in deals pipeline. are on ROI to you higher still? pipeline? external it LMS means I'm strength the Are the Is what for And use seeing emphasis so still use cases opportunity still cases curious about and relative seeing the those pipeline

Alessio Artuffo

for you resolved of we the ahead explained the healthy. And consistent across We very with next issue to Thank past, here. very pipeline seeing is we us. is as pipeline Rob, a It the our good pipeline along. that two repeating. use one on we've audio the grasp Alessio The have all mix Rob. quarters good. had in Hey, combination a over remains that segments of across remains we're what cases since.

think it's of win quarter I In Quarter is and and opportunity there deals? historically, continue this an There say less large an fair trend. than enterprise terms to three to a of four is is is to quarter, delivering about we in our both great to future. incredible with truly looking be. quantity and But We're and near tend forward quarter one to the optimistic quality satisfied said, very pipeline. outcomes the news remain the that of

Claudio Erba

department that, Alessio, deals. I multi of is mean, fair on top we we that on to seeing are are is on top it that they of of say that blend the especially -- when external. they dynamic also deals, very and big top internal a love big, pyramid, the But

about not inflow other and of creating that happening of that vendors We are to those shift are now from are an that seeing to is are a of consolidation shifting, and happy migration. customers seeing kinds entity. that are we due there records are And legacy a us the players single between they

Alessio Artuffo

XXX%.

Robert Young

Okay, great.

just the cost incremental of question marketing relative me and would quarter, ARR. very incremental in each brought in dollar level the that for the acquisition spend you be in quarter. The Next the ARR around it's sales high of of for to

do we that into QX, think How seasonality intact. cost going is of I'm So look this you I noted mean, forward? the as acquisition you curious about

Sukaran Mehta

start come here. Sukaran I'll morning. will Rob, let I this in. Alessio and

Firstly, of CAC quarters. in than it I you would focus have an want you relative, you on rather because to say, annual probably quarterly CAC when at between more seasonality is think basis I look

we into as part of sales about comment of latter discipline the this see of made of seen marketing. some kind come fruits will we as areas. gone if you you've investments we've to -- We've we of we've the we through continue in year, But to in through the results, should discipline. anything year across those move you As shown at investments Alessio you the else. some want this kind the year. that show next start moving forward think And of and other

Alessio Artuffo

term extremely of CMO, of add, personally we've sales to setting spending the to investments engine areas And made. already and focus lot new tuning other than reap lot our long marketing we and up machine. machine our on I in for our matter. with that Ryan truly investments a we to and And spending am comment, a on both with believe time pipeline benefits of this time a again, Not we're focused optimization are lot the of the consistent the Brock growth. calibration a the

Robert Young

Okay. Thanks the questions. for

Claudio Erba

Rob. Thanks,

Operator

Please from comes with question next CIBC. Stephanie ahead. Price go Your

Stephanie Price

Hi, good morning.

MHR Your solutions. could prepared some a Hope expand on that they've relationship here. about the little bit mentioned that talk Docebo and that maybe and added relationship remarks you that

Claudio Erba

Stephanie. Sure. Hi,

and color very nurture team. we we leadership something that to partnership about their We MHR. maintain relationship about is the is complement and native type With a we are will was MHR in with buyer share channel that that their region. strategic the we said do I their with Yeah, in strategic conflict. continue a the partners can much offering called MHR raise an a And what with thankful any great of MHR as in that the past absolutely the in with And and like like market, customer. that a not environment for we per they to operate the naturally partner that's connection technology. like leader we you persona, is space if every every so as does MHR se that said with in like additional their with

Alessio Artuffo

for segment are they we MHR, -- that lot interesting a sending which MHR sell with is is is a signal They as government Greenfield spending is top at it’s the but in and these are these Yeah, On segment, nothing relationship operating which studying familiar, government. to Alessio. not in in the us an of learning industry. government are as which very future to looking segments almost And areas, invest a

Claudio Erba

Quite untouched.

Alessio Artuffo

managed legacy legacy or by very by player, player, untouched or unexpected Yeah, way. the served

Stephanie Price

use bit then you're Thank touch there you And clients use they internal cases? you. what's you this and for good sell opportunity. mentioned vendor That's wins, internal cases. color. it on external both customer consolidation several a from Docebo Hope can and seeing opportunity where using Is are cross for the more

Claudio Erba

it that problems that again, and solves are to recessive is or challenges can to that quality use sorry economies combined, the of for. only learning solve extract than around The -- Stephanie, to one more solve best an other environment which various cases We delivery of can scale. stack, from when context more external are the a entire internal, of remove our is that the have and Sure. flex vendor in because can for business. ability consolidation What an to is that looking but CIOs, built tech nine once be embedded only that not in particularly extract for single solve we solving doing environment, strength may its they key of at expenditures in its they our more strategies learning where trend we winning And of our understand is one lifecycle, they across the is that becomes and the element trend and they they try duplicates. or cases CFOs, a problem continues in have not our look hedging DNA looking means becomes whether eight, manageable are rationalize. then that more best but also that multi-use value companies, vendor and problems enterprises, problem, It value problem, in solve

Sukaran Mehta

to one XX%. we think to the just add already was numbers spoke XX% about that Stephanie, And is from went of I Alessio that why that, to

retention. you that What our multi and that it's to the of were class case, total best also as net more case. trying terms is external is that which use of in do business, In external drives book what internal gross retention departments make understood hybrid and use sure is we

Stephanie Price

for color. Thanks the Great.

Mike McCarthy

Thank you, Stephanie.

Operator

Financial. next question Richard Tse comes ahead. Bank Please from go with Your National

Richard Tse

to but and had your model? kind Thank quite of maybe to little that a were enterprises, more it bit strategy With to How that, ago. I Yes, market bit of a if move market on does the like up it's you. helpful. sort like, that'd you spending there. elaborate recognize progress respect you've change obviously of you from that are a be bit you years doing tactically, larger But a of bit seems sort go little different what

Claudio Erba

Richard, I'm execution some I Tactically, mentioned to we a and the -- than conform related approach implementing environment that I would of our are past. our script, the thank current from And to calibrating market we're the changes list changes that also ever-evolving to characterize the in the shift the in in recently. strategy you. more to about

With more that to this if benefits any environment, into provide are the them value sooner smarter We from, more three, some the cycle, current mid-market to something a differentiation to the us and Number not senior sooner, of pack we have spending up and methodical maybe we separating with intentional very we one, legacy the we will, C people meaning code in speak we in said, how doing as in things past used only in affirmation years. get And leadership or several and are productive. on to we are and is the sooner able to in because the past, later and our more basis. execute time we lenders. mentioned more suite, get push why it's This that engineering. we're get direction. the two, the brand the into very move SMB than were to that do a continued and you enterprise be different Number strengthening is to better. being Number our market. training and efficient, are what for there reflection It market forceful not our of is our natural and

better And that there easier be few we first hard -- environment and XXXX. CFO and will very finally, with strategic are inside with to the I'm outlining with. of the do CIO and the incredible return integrators the continue sure that answer, I'm for as why optimization is point, be the value time live at hard a a is industry at that the next opportunities numbers very that go seeing and doing asks get quantifiable already we months execute. working strategically, that system huge qualitative the a to are OEMs strategic we're which making in the business more talking field and we're probably friendly loving last business that's very, leading And do And strategic that working can finally, of complexity, we in in learning this for point. is general, only us. on this we're motion. way a are ourselves And our surrounding sellers sales talking believe do we operating with and and we Fortune to want sellers empower with but not to area. so an And example, better numbers We to simplifying partners savings what effort clear the driven a with. very, we pipeline. But could now very about Strategically, and answer. lot on in give table just we over a opposed that are We are story and an pricing simpler,

I more, we changes improve Docebo Nina a we things a that market knowledge. are learning will think lot of strategy. implement helps. are There all brings light are hope up mean, on a I some execute of I is but every lot the she we the from lot of trying at in and her And that day. So that this these is journey. the to speed

Sukaran Mehta

Nina expertise That's SATs likes the expertise of to our we're other said, yes. great is from what bringing really said. She Claudio, operated of well Simosko company and CSO. on relying a the our at just lot I she's execute and that

Richard Tse

color. are bit I'm of one. of most. who be comes a give difficult new of great, helpful. little sort for it -- displacements. question competitive that of most My that's guessing the answer, sort tied questions us all a displacing kind to second might that Thanks wins, of to sense super I'm to Okay, them may When just you but be wondering the That

Claudio Erba

No, are in Non environment. we which environment be and there difficult And in because which and again I not a three non-decision a new say beat it's the that this for a question, entropy. complacency this sure factor there We are decision very can smile. good CFOs things the in two once -- CLOs. need are with

We talk I vendors legacy run look, focused that financially everybody about that, appropriate. deem We're financially opposed company. on to incredibly customers building likes overlap. beat and we well in You And finally, And appears really And sell are it. very very hear value hard do concept in our legacy clearly management showing that focus benefits that. technology. that? of may the we defeated terms not do we business their of And one they single as the in I beat do that the very in good great are of on market the a company that. And so the the focused on may fall focused one a on you solving about point previously. how at that looking in four-year strategy personally well very that it feel that's to products love solution of integrated, product way on flow We don't because basis good showing that with specific that a the short and problem. and on not as optimization horizon, building mentioned their two, who debts vendors solutions, efforts engineered. fact have three, We're when But we're

Richard Tse

much. That's very you helpful. great. Super Thank

Operator

go Your ahead. Suthan next Sukumar Please Stifel. question comes with from

Suthan Sukumar

growth touch in basis. evolving? on broader is the cases fairly was traction the opening described customer now how product And currency activity ACV to Can remarks. suite? net what more Wanted strong the gents. you guys touch new I you new constant on morning, Good on a behavior with expansion mean, healthy use are seeing

Just of initial there these of some the more right in cases, use out an wondering gate additional interest with is sale.

Claudio Erba

environment. And market they or close customer, your I that And So know and because external and a moment, is areas director future be there, mean, reiterate top that great, excited other way thing your that call which Suthan, market, is your I the external that's is Greenfield use the to is want return every in and in departments business, On will they giving -- solution. the love, already external logos keep we real the about of from highlighted customer training And total the direct of market, addressable Training because a customer more opportunity. training building people strategically the in more technologies, training what your expansion There the is, in your partner cover training ROI important. the have earning training where we to are very or basic house or is to future. bigger. we than department the total addressable of get a part not mean, only downtown value but others. are providing And past they organization from from training a partner what multi your is the the it's as the sales on measurable. it's important total

internal training KPI the the final more other love departments, train inside speaking, but external more department we is area So the of training external of measure organization, other external goes is with the interest goal. an up. blended strategically the business Because we our real

Alessio Artuffo

for monetization, do or how with monetization strengthen solutions. monetize question that Claudio, one our may more use we're are pattern. a roadmaps monetization without our e-commerce They in has from learning more in solution And and learning element that continuing trend addition Suthan is seeing with real, also capability. the seeing that learning position within you in a a continue. to learning. looking from of external cases, response external of alone plans becomes that trend Docebo that and to integrate that We're the specific were Companies that

Claudio Erba

is monetization monetization. not Yeah, someone I start And externally. optically the first and speaking job customer that When your they say step. then it's you training has the a was does that with

and for And you an You -- get it's you interesting start them customer from an segment. you can interesting have partners. free, or that value understand experience your training it's

Suthan Sukumar

Thank just the the an the in is channel next. you new Great. pipeline been contribution the ecosystem, potential that color, evolving update of of how progressing terms for partner been what channel guys. the to on partners Want impact particularly how channel quarter is partner time? over and past and Could OEM on provide this the you touch was

Alessio Artuffo

partner an another. also partnership, to are more Suthan, I in CSO, and one important which different myself, all, and as well first look is really area leadership the than is this of a not that in Yeah. the very, on. our Nina, in We world, take as at Karen focused buckets our opportunity say very Aaron few

in world and is strategy In fact, cost and strategy companies one holistically. now the owned top a the of that our we leader Pratt. questions interest pipeline with to taps and are into minimum call, other metrics that line and entirely edging execution across seeing in add sectors ways and focus HCM rewards of What with see for the strengthening OEM in Docebo. like we a is and one see earnings others the CAC more very the our need renewed that in finding Aaron and That another, I'm it on business. more by and the Historically,

but So working I we're of material, say very pipeline opportunities that that I regard want are word really and I what use proud to loving the very actively don't that. in think, will on the about we

Claudio Erba

It's not TikTok's the are because it's funny building are. where Alessio in offices TikTok. TicTac, we

So think I missed I that.

dear friends at TikTok. partners TicTac, and Our not

Suthan Sukumar

guys. for Appreciate I'll taking line. A my the pass clarification. Thanks you questions. great

Operator

comes question Morgan Stanley. Josh from with go ahead. Please next Baer Your

Josh Baer

I Thanks to perspective? seeing Any you was Great. of a be see would you the just adds? number context appreciated. little I that quarter. these as hoping add question. from versus for color a far customers gross customers over quarter as Thanks. where use new case churn there. are What are could you're continuing provide geographical coming you impressive an And or from

Sukaran Mehta

use net on multiple fact company will and here. take -- We can colors talked you cases. and productivity customer the critical as Josh. multiple their and on is the for in you ecosystems are about a we terms departments revenue, then it morning, I organization that that of of part Good for mean solve about Sukaran the various give their I'll about new in perspective mission are you customer solving think the from operations, more drives plugged Alessio an adds. retaining retention you into increasing customers, retaining etc.

driving retention, what driving best that is an as would that see we're seeing. direct is can consistent correlation a class retention, that And has in is which which we You year on what example. gross net last imagine with

it impact you logo. that you think those base retention in environment. has that, a that if on to a hopefully touch about customer new growth direct on Alessio, numbers. this want we And our maintaining sure and So retention you gives are integral that I'm to sense

Alessio Artuffo

names a retention sense with. NDRR an Josh We're and know, as most logos. amount ability we strategic believe We we happy standpoint, of should very do and of some always are grow strong. and clear, that our that the We continue cannot to base so of And share remain impressive a always with acknowledge you to very, you're ourselves partnering right, we concept the way, very our metrics in to well we're of more very that healthy From and that in times dollar getting to in critical even very that want retention net Josh, the better. the the it. of believe our are we we be

share grow even companies And a of we in these can that companies, that very to into. are position names large not some we're

to our teams success. farming the in of to energies side them we're So we of bit to We're just really then methodically are focusing the and becomes, element the going question that. account be differently behind going to on plan with do growth an going terms address future in little supporting a a their What evolution. is how customer spend these and expand more companies

companies account past focused relationship, undertook they develop for a by success have, in efforts. quarters, mark best, We focusing where the managers believe more customer what also on lot which deep is management that that do the will really view a XXX account and accelerate various departments, quarters is an account outcome. to as we're And the and the we very across and NDRR and that and parent subsidiaries, come. blended on focused of We objective, management in get approach, years

Josh Baer

for the Great, Thanks color. great. Thanks.

Alessio Artuffo

Josh. Thanks,

Sukaran Mehta

Thanks, Josh.

Operator

question with next Daniel Your TD Chan from Securities. Please go comes ahead.

Daniel Chan

nicely, Related sequential of but steady morning. was quarter-over-quarter Good to to many grow quarters expansion. ACV Hi. continue after NDRR, the year-over-year

the quarter-over-quarter as how comments long coming flat So in well, with upsell doing NDRR? on we against reconcile ACV do your focus as

Alessio Artuffo

So was work what ACV Dan, quarter-over-quarter I understand guess question, that -- does is to does the retention. saying you're question, and that have into how flat the net add just the that on

Daniel Chan

upsell ACV No, talking how in get back, public, in we And work quarter. that about represented does much if look Usually, we see since pretty sequentially you've that well? growing value. been the the doing every has been ACV

So just into wanted [indiscernible] that. read through

Claudio Erba

contributes that a drive I about you was that the that weaker enterprise quarter And and Yeah. slower. look there the you I'd one if segment think, slightly was was also QX, ACV want way Dan the to that more In will at higher. say to is, that the think segment,

what into a the from ACV, so have certain you And can cycle, segment. it fluctuate the of move because you contribution as

includes In it. terms you'll retention see of the see what ACV is the part. of what in upsell number, net And in you downturn don't course that

see printed a may currency number can not an impact QX. which number headwind you the in And well. as be you'll that -- be of there's that in factoring also So perspective, from kind ACV has been has --

Alessio Artuffo

we of when -- deals And for that lack where sorry, better the in of of we from we're into companies an field, Dan, think we Again, execution standpoint to selling deals, doesn't upsell business. think we transaction word, The go mean add and we're are or in already we're that a deal. capabilities. massive necessarily growing continuing and that we modules, ACV that expanding

And of increase wouldn't contribute the of improvement ACV. high in upsell correlate NDRR necessarily metrics. so to that sales our would an in impact a Whereas motion to it

Daniel Chan

team wondering get related macro budgets as into that's over Okay, or just was anything if is down. some there are line, customers that? the and them it's sales descoping coming it to to whether relates deals your helpful. your Anything to like that whether I was read

Claudio Erba

kind else. think segment moving No, that simple think move as contribute Dan -- of QX you see of into this about that the about That's will no, as enterprise QX, way should that, should you is to into you nothing none long about as as pickup. we think it, see forward, the

Daniel Chan

you. Great. Thank

Operator

Sgro go from Capital. question comes Eight Christian Next with Please ahead.

Christian Sgro

the I'll question. a of Hi, my two-parter. good Maybe seasonality for topic on continue morning. first

QX, or earlier, if in First, slipped, those the quarter And call start. that And QX I'm deals I'm late wondering QX you it's if on QX to can the strong think the the on can mentioned was be and enterprise wondering case way. be QX I anything only summer. both either thought side. to the as for that two there's I when any it questions well,

Claudio Erba

attention that jokes you prior responses? everything To just in aside, yes. have said. the is you Christian, answer appreciate And to listening I the

that onto deal leaped some deals say we other elongate. When sure. For cycles quarters. implying in instances, We're also that

And we good to in those. to know your wants in and add they more disclose in experience than work four slips. the quarter reference hard in to deals a any have Sukaran the off say, people gotten prior holidays, certainly we not we color regards three our quarter one, the uncommon quarter would the in years the to bit of with type seem and house. seasonality tracking, little some had time And there. is because yeah, era, of post-COVID this like data don't we numbers, for out Now, got don't that while I very of pipeline the numbers. I we deliver our finally to have have

Sukaran Mehta

said, Yeah, quarter. pipe couple the where is. -- Chris, on think in quarter of the strong said view a generally, I seasonally is we we've we as past, QX have

we as couple next it's slower. But win the of a our rates, from and see Alessio is still in a yes, what perspective, our pipe is comments ahead said, as strengthen rate far of two we and quarters quarters. I still QX pipe can in the And light think point, we is the next just of quick win of making Some as for us. you see strong

Christian Sgro

I you And evolving. made Alessio there's But it early one Docebo part and it's positioning about to investment and know That's like share the of Company's part thoughts wondering awesome. that earlier on to is on. brand will share follow Any strategy. think the might that focus. rebranding in of you call how maybe focus be can Great. could reference sounds any you more marketing on if enterprise.

Alessio Artuffo

technical a enterprises. its you science. the if going do has believe And sure we we to is in lead there. transition Fortune in showing a them that the We lot one. now to of believe a towards to the that we're and products, will Sure been say that a branding real and evolve, work the and should phases. thing. we two where show we show between with how and the things we're and a we capabilities. not overhaul is And on solve there's a is eloquent problems publicly, focus comes colors. the is much in features, ways, way it on up places are project strike be to thoughts meet We about is speak way very it's A good Number move posture and evident you of more debate. also the a months. on balance what very black customers, branding And DNA, But white more. execute way and but how. buyers the capabilities. very And do at varying of we're our a I we have for the look up CIOs we that, and our on natural is know, Today, XXX our This already bit to for generally that company the we are primarily way maintaining in There more would proceed innovation solving this, little as two, business And that in from messaging couple to two even focus website. problems thanks to evolution for in standpoint, want the

matter the us were only a a link have we and of are the world our They we tables just brand effectively executed. the do lot decision-making up missing look at We category, and are we showing It's execution in. the of according in of to because in a with strengthen of to having business them. companies opportunity already best

Christian Sgro

Perfect. morning. my you color, for Thank the Thanks question this taking for Alessio.

Alessio Artuffo

you. Thank

Operator

next ahead. Your [Krishna] comes go with question Kevin from (ph) Scotiabank. Please

Unidentified Participant

if sure quarter? But us morning. Hey, in you customers remind there. ACV I'm this was the could Good the disclosed. not was from new what

Alessio Artuffo

going Kevin. I'm double to check that,

top on not on I of think mind.

Let me come on back to you that.

Unidentified Participant

going late you skew where better -- know, assume the going we trying there think that ads of should know, up? for number given we up Okay. over reasonable you that I we number to to, guess we as just I'm expect about QX that think we of get two, quarter, as purposes, know, quarter in should you added forward, mix this and QX? the go about you double to quarter I'm with see will goes know, understand enterprise positive kind QX. likely the one X.XX seasonally that that You modeling in the

Alessio Artuffo

Yep.

this The number and quarter it's it. right. me a you're to Kevin, second it So just sorry, -- double check [indiscernible] took

So mix you the there, shift. can generally, when about think

see segment, If down. larger you coming you about into subset enterprise move think that if up you move you large move number a deals or as QX, can and you And enterprise as up. that you from see will

the And go moving as to up. you should about into expect that or we next so quarter two, think

Unidentified Participant

You right. are

-- net new is ACV one Numbers. the the Just XX of weaker

the down you And mid-market due in quarter. range to XX I and there, skewing mainly the last that were was right. be ARPU and test related disclosures to range XX in think prayer the

Alessio Artuffo

and mid-market ADRR. move number is a you as will you're strength QX. your so the enterprise But what proportion more in that that number, commercial product driving up. pick on in Yeah, the QX, as That segment basically seeing into of chips

Unidentified Participant

perhaps elongated. even how getting out expansion think being of both the Is the Got starting ACV new here net going a see bit Did to a to being just it pushed down the commentary, up it. to and opportunities very on it that relative And that point about popping end you be or do -- and/or slower, in QX? clear you into on I'm QX being cycle QX. And is road? sales wondering just little longer? the And with ads the at come

Alessio Artuffo

Kevin. in compete. made, time many a And new even times seeing. to more primarily the place. they Hi, and down don't than processes. companies. spend more processes in the company new what at processes have slippage within a resulting is are go companies most their speaking, themselves And flux we buyer chase it's our material down with is what there Alessio various approver in where we're themselves difficult for pinning the Buyers is be organization individuals scrutiny That can the effect because when because know

Unidentified Participant

understood. the you. Appreciate Okay, color. Thank

Claudio Erba

Thanks, Kevin.

Operator

Your next Agostino Nick go with Bank. question Laurentian Please comes ahead. from

Nick Agostino

Yes, sir. Good morning, everybody.

and And to you side that the calls about the do in side Can talk outbound the to outbound team, where to maybe business from you activity? So of just you on need want you size improve the on your you and And talked to outbound spend maybe emphasis you quarter be? contributions the as greater on today side earlier just what saw further about the where put of it the on that are earlier sales marketing sales. think increasing this as year. prior you a I far

Claudio Erba

focus. We sales it XX% you marketing on of the strengthening future. benefits can We tell. we by on believe Thank our and the is segments for are my about going the story contribution. Nick. brand math depending pipeline continues question. stronger the sales Sure. to more the by expenditures have segments part perform even that Hi, Outbound becomes closer XX% to outbound to anywhere average in based and in to to an machine so regard With we of believe water getting outbound reap in commentary on position our between our even that

piece remains that of demand focus an before like because outbound around it the frankly a And puzzle, much of of I've it so made in yield allows our efforts all area area comments which we us an and gen remains to demand our deals. hard, the investment generation picture bigger positioning, larger around are is one Sukaran? size holistic

Sukaran Mehta

Nick think about on of and also general you context our inbound outbound have outbound force how you also when partners to you contribution and a just you about think to a layer you got lot work give bring and self-sourcing his great enterprise our similar will some well great as partners, is segment. Alessio the deals to that mentioned with also us working on companies in as that earlier deals remarks enterprise other sales

Nick Agostino

is can Okay, one great. us the that time? regards the other in And OEM along are just with at with you In MHR OEMs point expansion for remind that par follow-up you quickly like more-and-more where these words are you when at growth. OEMs against Ceridian with -- compare time you. how same you're that how MHR context you understand Thank where Ceridian been with far on a future to getting to just guys point just same same would in partnership, up other you the the of relative traction with Just in bringing all have point?

Alessio Artuffo

we've them think smaller, go more. Yeah, we are with a is to relative penetrate faster -- look, way learned an they to and first Nick long grown through MHR this at still journey as has our terms rate. was size are obviously I still and [indiscernible] think that opportunity in the about to of it way They

into us that enabling on The more is MHR the integrations in future. move the we also we have as to with we Ceridian products forward other interesting that our thing with layer ecosystem that is built build and

customer that MHR. helps within to base also so new not MHR And base expand within only of customer that the current but

serves almost also share is market certainly as is As the public you lot there perspective. UK It sector. MHR in know from demand some alluded earlier, well XX% certainly -- sector is as Claudio and a public seeing there the to a has increased of

Nick Agostino

Okay. Great you. thank

Claudio Erba

Yeah. Thanks attending this for call. earning

meet Let's thanks Thanks one quarter. and team. everyone in

Operator

lines. for call Ladies and Have day. a you great that disconnect conference gentlemen, you today. your this participating thank please ask your and We for concludes

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