Good morning everyone, and welcome to the Docebo Inc first quarter 2022 earnings call. All participants are currently in a listen-only mode. Following the presentation, we will conduct a question-and-answer session for analysts. Instructions will be provided at that time for research analysts to ask questions. I'd now like to turn the conference call over to Docebo's Vice President of Investor Relations, Mr. Mike McCarthy. Please go ahead, Mike. Thank you, operator. Before we begin, Docebo would like to remind listeners that certain information discussed today 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 statements. For more information on the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Docebo's public filings, which are available on SEDAR and EDGAR. During the call, 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 meanings under IFRS. Please see our MD&A for additional financial 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 US dollars. Now, I'd like to turn the call over to Docebo's CEO, Claudio Erba. Ciao everybody, and thank you for joining us for our first quarter earnings call. With me today is Alessio Artuffo, our President and CRO, and Sukaran Mehta, our CFO. We are extremely pleased to report another strong quarter this morning, driven by continued strength in demand for our products and services across all market segments. We are particularly excited about the excellent momentum in the enterprise segment that is enabling Docebo to lead the charge in a fast-growing market characterized by secular and macro tailwind and excellent business fundamentals allowing for rapid growth scale. ARR growth continued to benefit from the availability of our full suite of products and momentum in the enterprise segment. We saw well-distributed representation across industry verticals and continue to see more than 60% of our customers using our platform to enable external training and hybrid training use cases. These use cases are strategically important to Docebo, and they reflect how our customers are using our solution to solve for mission-critical learning requirements. This adds to create a more intimate and stickier relationship that leads to increased ACV and drives a higher lifetime value to our customer relationship. Consistent with prior quarter, almost half of our net ARR addition came from customers with ACV over $100,000. It is also worth noting that we have seen an 83% year-over-year increase in the number of customers generating ARR of more than $100,000. Finally, profitability continued to improve as we scale. We remain on a trajectory to turn Adjusted EBITDA positive as we exit the year. As innovative as we are, maintaining capital efficiency and growth at the right cost remain in our DNA. Sukaran will discuss our financial performance in more detail momentarily. Let's take a moment to discuss why we are so excited about what the future holds for operating in a macro environment that is best characterized as one of sustained demand for the enterprise. Organizations are being challenged with inflation, talent competition, and skill gaps, all while operating in a changing environment where engaging with employees, customers, and partners in a hybrid work environment is the new normal. As a result, they are focused on investing in technologies like Docebo to drive critical business outcomes, whether it's improving the efficiency and execution of their workforce or strengthening the customer and partner relationship. We see this trend cutting across industry vertical and geography. It is becoming clear that learning and training are deflationary investments. The horizontal nature of Docebo platform supports the diverse needs of any learner. It eliminates the anarchy customers have been seeing when supporting multiple learning management systems across multiple departments and use cases. Partnering with Docebo, organizations are implementing a federated learning model where a single LMS serves as a multi-department system with multiple owners. The adoption of learning technology is accelerating. In this multi-year phase of expansion, we believe we can grow from the 100 million+ ARR company we are today to a $1 billion revenue company of the future. Now, speaking about few notable customer wins this quarter. We signed a new customer agreement with Bridgestone Americas, a leader in tires and sustainable mobility solution. Bridgestone selected Docebo as the learning management partner for employees and external channel partner training for its retail business to offer intuitive and personalized learning experiences to more than 20,000 retail employees. We continue to see retail business deploy external training as a key pillar of their customer growth and engagement strategy. Another new logo customer I would like to call out for you this morning is a global leader in workflow automation software, specializing among others in solutions across both customer and employee experience. They choose Docebo and the full Docebo Learning Suite due to their need for a superior end user experience and the integrated capability to connect to other business enterprise software deployed across their ecosystem. Customer expansions were also strong contributors to the quarter, and we are seeing continued traction in our land and expand strategy. We believe that our goal to transform customer into raving fans will become critical to our long-term growth strategy. A case in point, we brought our partnership with the leading North American-based luxury retailer just six months after the initial agreement. This customer expanded their use of our Learn LMS into their entire retail group for onboarding and upskilling of their store associates through a tailored mobile-first solution and grew the subscription value by 137%. Turning to contribution from product launched last year, we are happy to see continued progression in attach rate. In particular, Docebo Shape, Connect, and Content have exceeded our expectation out of the gate. For example, Docebo Connect is being deployed by one of the largest cryptocurrency exchange in the United States that we also signed this quarter. Our solution will enable automation of their learning processes that touch other application in their software stack while getting learning data where it needs to be all at scale. Another example is Smoothie King, who is using Docebo Shape to create content quickly, consistently, and achieve a faster time to value from their Docebo elements. They are achieving this by leveraging artificial intelligence to create interactive learning experiences that facilitate social learning without burdening your content creation team. Alongside our product investment is investment we are making in our people. This past quarter, we have made a significant progress in expanding our senior and mid-level leadership organizations. These recruits come to us from industry and customer alike and bring a diversity of thought leadership that is essential in executing our mission and strategy. This is also great testament to our rising profile and reputation as an innovator and disruptor. One of these new additions to the team is Nina Simosko, who has joined us as our Chief Sales Officer. Nina is a large-scale builder. She has an impressive track record with companies like SAP, Nike and Oracle, and will be responsible in scaling our direct and indirect sales organization to meet the growth objectives ahead of us. Also joining our team is Nicole Williams, SVP of Revenue Strategy and Operations. Nicole brings to Docebo many years of experience in our industry at Cornerstone OnDemand and will lead our revenue strategy, enablement and operations functions. We are happy to report that Docebo is finalizing our very first ESG report, which should be published before our shareholder meeting in June. I am proud to say that every Docebian takes our responsibility as corporate citizens to heart in everything we say and do. The impact that learning has on an organization is not purely economic. We are proud to have our platform utilized by many of our customers to advance learning objectives that achieve ESG-related goals. We look forward to sharing some more of these examples with you when we publish this report. I will now pass the call to Sukaran to speak to the financials. Thank you, Claudio, and good morning, everyone. For those interested, a detailed breakdown of our financial results for the three months ended March 31, 2022, can be found in our press release, MD&A and financial statements, which are now available on our website and are also filed on SEDAR and EDGAR. The slide deck accompanying this earnings call was made available on our investor relations website this morning. Q1 was a great demonstration of the continued momentum in our business after a record Q4. This is a great time to be an innovative and disruptive force in the learning industry. Enterprises are investing in learning technology to help them create favorable business outcomes across all their organizations. These customers are at the core of the long-term secular growth opportunity that we are well-positioned to capitalize on. Regardless of the economic environment, given the tremendous value we provide to our customers and our current market penetration, we continue to be excited about our future. Now to the results. Despite FX headwinds, total revenue for the first quarter grew to $32.1 million, an increase of 47% from the prior year. Subscription revenues were $29.1 million, representing 91% of total revenue for the quarter. Professional services in the first quarter were $2.9 million, an increase of 49% from the prior period. We added $11.6 million in net new ARR during the first quarter to bring our total ARR to $129.3 million, an increase of 55% year over year. We are especially pleased with this performance as Q1 is coming off our seasonally strongest quarter. New and cross-sell logos with ARR greater than $100,000 represented approximately 50% of the net new ARR, underscoring continued momentum with larger commercial and enterprise customers, and we take confidence in the fact that our pipeline continues to be strong. Total customers at the end of the first quarter of 2022 are 2,947. Our company-wide average contract value, or ACV, increased to approximately $44,000, up 23% from the $36,000 at the end of the first quarter of 2021. ACV for new customers in the quarter was approximately $60,000, driven by our continued shift in mix to enterprise-sized deals and adding incremental products. As we add more enterprise customers, the quality of our ARR base continues to strengthen. We believe the lifetime value of these customers reflects positively on the growth of our business, including expansion opportunities within our current customer base. Gross profit margin for the first quarter was 80% of revenue, which compares to 80% for the fourth quarter and 82% for the prior year period. We expect to maintain gross margins in the low 80% range over time as we continue to invest in best-in-class enterprise support, customer success, and implementation services. Total operating expenses for the first quarter increased to $32.4 million compared to $23.5 million for the prior year period. Included in the $32.4 million of operating expenses is a foreign exchange loss of $3.4 million that relates primarily to the cash on our balance sheet and is therefore, for the most part, unrealized. Operating costs, excluding this loss, were $29 million, slightly higher than the $26.6 million in operating costs reported on a comparable basis in the fourth quarter of 2021. A full summary of operating expense lines are presented in our investor deck. G&A has continued to decline as a percentage of revenue to 23% for the first quarter compared to 24.4% sequentially. This is an area where we continue to deliver operating leverage and, as previously noted, expect to see ongoing leverage as we scale. Sales and marketing expense increased slightly as a percentage of revenue to 42.9% from 42.4% for the fourth quarter. We expect our unit economics to remain efficient as we continue to invest in our sales engine. This includes hiring seniority, quota-carrying executives, as well as adding depth in our account management team to drive expansion and higher net dollar retention. We also added a number of sales and marketing personnel as part of our Skillslive acquisition that will drive future growth in the APAC region. R&D investments in the first quarter were $6.2 million or 19.3% of revenue compared to 18.5% in the fourth quarter. In the fourth quarter of 2021, we recognized a one-time year-end benefit from R&D tax credits of approximately $800K. Adjusted EBITDA came in at a loss of $1.3 million for the first quarter of 2021 compared to the loss of $2.5 million in the prior year period. We reported a net loss of $7 million for the first quarter of 2022 compared to $5.6 million net loss for the prior year period. Our strong capital structure is a function of our very healthy balance sheet, which shows net cash and cash equivalents of $212 million at the end of the quarter. Free cash flow was negative $2.3 million in the first quarter. In closing, I want to emphasize that we believe we are extremely well positioned to capitalize on what Claudio called a macro trend that is creating a prolonged demand environment for Docebo. We will continue to invest responsibly in a way that maximizes high quality growth while at the same time ensuring our ability to maintain our best-in-class unit economics and sales efficiency. This will be matched with continued operating leverage that will naturally lead us to turn EBITDA and free cash flow positive as we exit the year. That concludes my prepared remarks, and I'd like to turn it over to the operator now to take some questions from the analysts. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you do have a question, please press star followed by one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift your handset before pressing any keys. Also, please limit yourself to one question and one follow-up. One moment for your first question. Your first question comes from Josh Baer with Morgan Stanley. Please go ahead. Great. Thank you for the question and congrats on a nice quarter. Wanted to start high level. You mentioned the ability to reach $1 billion in ARR, you know, thinking bigger picture and longer term. Just wanted to get some context really for at a high level, what it would take to get there when thinking about product segments and geographies, customers, and, you know, just any more kind of color on what it would take to get to $1 billion obviously over time. Yeah. Josh, first of all, welcome to the Docebo world. I know this is your first earnings call. This is Claudio. You know, we continue to execute organically. I will focus my answer only from the organic perspective, not considering any transformative event. The industry is hyper-fragmented, and you know, the total addressable market has been reconsidered, not only for the internal training but also the external training is now part of our total addressable market. In terms of the size of the market, we are in a really unlimited big market. What are the actions we need to take, we are taking, and we can take to get to $1 billion? First of all is the product. Continue to innovate both the core products, which are the LMSs and all the new product that we have built, but also imagining that training is not only a delivery of multimedia content, but you know, coaching is still part of the informal training concept, like informal content sharing, like we have addressed with Docebo Coach and Share. So there are way more possibility, way more channel to train the people that can be transformed into product, into software. There are other verticals where we really are not there, and I'm thinking about government. I mean, government sector is usually a legacy industry that needs to be disrupted by innovation, and we think that we are innovative enough to give food for thought to bigger government entities, and provide them some fresh and new way to train their people. Geographic expansion, I mean, the more you go east, the more the world is getting ready to approach sophisticated and modern way to train their people. We are still focused to Europe, and, you know, we are as soul and origins European, but most of our revenues are coming from North America. If you put together all these elements, which are all organic, new products, new verticals, and new geographies, we do have a lot of buffer to, you know, increase the size and getting to the $1 billion, which, if you think the total addressable market, which is way bigger than the $1 billion, $1 billion is still a minor fraction of the total market size. Great. Thanks, Claudio. Really helpful. Follow-up, sort of unrelated but more near-term focused, wanted to just ask if we should expect changes to the go-to-market following some of the recent leadership additions on the sales side. Thank you. First of all, you know, me, Ale, and others. I met Ale only ten years ago, and I consider Ale founder of the company. We are learners, but I really need closer to me Ale for a broader scope because very often Ale is only recognized as a revenue leader. For me, he has capabilities like looking at part of the organization, having product ideas, and I want him oversee the revenue team because, you know, Nina will cover only sales, will not cover marketing, will not cover professional services, and all of them still report to Ale as a Chief Revenue Officer. I want to leverage my friend, colleague, and partner also on other duties which I need help. I want to leverage him not only as a revenue leader but also as a president. Now, in the organization, he's considered revenue and president, but for me is more president than the revenue. Ale, do you wanna add something on that? Hey, Josh. Thank you for asking that. Look, as we continue to grow and continue to prepare ourselves for the next journey of the next, you know, call it three-five years, the road to $1 billion ARR, you know, of all the things that Claudio spoke to before, which, you know, it's execution, right? Getting better products, better attach rates, better geo expansion, you know, all of that is execution. But then you gotta layer on top of that organizational innovation and organizational scale. When we think about the next five years, what we really believe is that human capital is critical. People like Nina, people like Nicole that have, you know, led a large-scale organization, that know what it takes to go from $100 million - $500 million, $500 million -$1 billion, will be invaluable assets to get there. Look, of all the, you know, I would say areas of improvement that we may have as management, we remain humble. We got to $100 million in revenue, not having done it before. We're very clear on what it takes to get to $1 billion, and we know that the sum of all parts is stronger than each and every one of us. If we surround ourselves with really great people, we're gonna get there better and faster. Great. Thank you. Your next question comes from Suthan Sukumar with Stifel. Please go ahead. Good morning, gents, and congrats on another strong print this quarter. I wanna touch on the stronger level of net new ARR you guys had this quarter. It looked to be quite stronger than what you posted last year and, you know, in what looks to be a seasonally slower period. I'm curious what you guys are seeing in the demand environment that keeps you know, really excited on the outlook, you know, with respect to kind of buyer profile behavior and spending trends. Should we be expecting seasonal strength to kind of pick up over the year, similar to prior years? Suthan, I will take the outlook part in terms of spending and macroeconomic environment, and then Alessio will jump on detailing the revenue and the ARR. In terms of outlook, we think that companies are now worried about a couple of points. One is spending, recession, downturn and others. Probably there is another factor that is more worrisome for them, which is talent and people. The need to adopt and to increase the adoption of an online learning system like Docebo is a defensive strategy to mitigate the talent Great Resignation, remote work trend, which is continuing to happen despite the macroeconomic downturn. Don't forget that Docebo is also an external training tool, which historically has been used to establish deeper relationship with their customer and partner base. Then you have to look this tool also as a defensive strategy to reduce, you know, to stay closer to the customer, to better work with the partner and stuff like that. That said, we see Docebo well-positioned. You know, I have been in the company in 2008, in 2012, in many economic downturn, and I have always seen people companies investing in people during these periods. Ale, do you wanna add something about the revenue? Look, Suthan, you said it right. Just as a recap, we printed $11.6 million. Last year, unless I'm mistaken, we printed same time period $9.4 million. For that same time period, we recorded and shared that $9.4 million included a seven-figure contract with a large chain food restaurant chain provider. We are beyond pleased with the result. We're thrilled about it. We think it's an exceptional outcome. When I think about why it happened and why we expect for it to continue and to actually get better, you know, I'll just refer to what we shared on customer use cases like Bridgestone but also Smoothie King. Those same customers, had we signed those even a year ago, we wouldn't have been able to satisfy their needs for a broader scope solution. These are organizations that are gonna be leveraging Connect, they're gonna be leveraging Flow, they're gonna be leveraging capabilities that extend well beyond the learning LMS as you guys used to know us of. Now, our tickets are going up. Quarter-over-quarter, we see that those charts and the composition of our net new deals going up and our expansion capabilities going up. All in all, we're not only pleased, we're ecstatic about the growth rate. We believe it's gonna continue, and the way it's happening, it's according to plan. Our hypothesis is validated by the results. Thank you for the color. As a follow-up, could you provide an update on sort of the demand side in terms of what you're seeing in the indirect channel, especially with the OEM partners. You know, I'm curious to see if there's been any changes in the trends that you've been seeing in prior quarters. We first of all have continued to grow year-over-year. Our OEM book of business in a percentage makes us extremely happy. It means that our partners not only continue to be satisfied with our existing services, but you know, they're adding on capabilities. In fact, it was a 70% growth year-over-year for that book of business. Now, on the demand side, we're extremely focused on partnering with the right organization that will yield the material results in the future. These relationships are very deep in the organization, and we're very confident and excited in our pipeline and are executing around that. Now, just as a reminder, when we think about adding people like Nina Simosko and beyond, we're thinking about that also in the context of their expertise, their background, their capabilities, their network in bringing, you know, to the table not only names, but the capability of executing and designing the organization properly. We're staffing ourselves to execute in that world better and better. We like the demand, and our existing partners are performing great. Great. Thank you for taking my question, gentlemen. I'll pass the line. Thank you, Suthan. Your next question comes from Robert Young with Canaccord Genuity. Please go ahead. Hi, good morning, everyone. Maybe first question for me, just a mechanical one. I was hoping you could give some insight into the divergence in the growth rate of ARR and revenue. It's a little different than I've seen in the past quarters. Is that just the timing of enterprise skewing towards the end of the quarter? Is there a Q1 dynamic there? You could explain maybe that and, you know, how you expect things to develop over, you know, the near-term plan. Yeah. Morning, Rob. Sukaran here. I'll take that one on. I'll kind of give you simplified into kind of two or three things that will have some of this divergence. Firstly, as we move up the chain into the enterprise segment of the market, you're gonna see customers that will negotiate the contracts that are becoming. Sorry. I would say the customer is becoming smarter, and enterprise customers, procurement teams tend to more negotiate the contracts towards the end of the quarter. Some of that benefit that you would see historically would have been more, you know, that mix would have been coming in at the start of the quarter. That some of that revenue doesn't come through until the following quarter, per se. The other thing I would say is, as we've matured into selling at the enterprise segment of the market, and this is a bit of a rev rec thing, so I'll, for your benefit, spend two minutes on it. Not two minutes, 20 seconds on it, is that when you do enterprise segment deals, you also have the concept of ramp deals. An example here would be a QSR chain that signs up for a three-year deal. They're locked in for the three-year, but it's a ramp deal in terms of monthly active users, so they have to build it in year one, and then they scale up to year two, and they scale up beyond that in year three. They're locked in for each of those tiers for three years. The ARR in that concept, we take it as a straight average, whereas the revenue recognition is on if it's first year is $10,000, second year is $20,000, third year is $30,000, it's $10,000 in year one revenue and $20,000 year two and $30,000 year three. That's where you see a bit of a differentiation on the ARR versus rev rec. But I think if you think about it, you know, in the next few quarters, we will pretty much get to a closer, slightly closer to ARR versus rev rec conversion ratio. Okay. That's very helpful. I've got two more, if you'll allow it, but I was hoping that you could give us some insight into your thoughts on the EdCast acquisition by Cornerstone. I know you had a relationship that was relatively new, but in the press release, you highlighted that, you know, you had one customer that chose Docebo for LMS, LXP, LRS functions. I'm just curious, you know, how that EdCast acquisition changes your relationship there, or maybe if there's any change in the market that would be helpful. Yeah, sure. Rob, thank you. First off, we congratulate our friends at EdCast for their new journey with Cornerstone OnDemand. You know, with regards to us, I would say one word, immaterial. Why? For one, you know, the nature of our relationship was such that, again, it doesn't make a difference to our business. For two, the capabilities that we have in our platform, we believe are second to no one in the space. Second to no one, I repeat. You know, when it comes to what others do, we're very focused on our roadmap. We're very focused on our plans. We're very focused on our win rates. When we look at our win rates and our plans for the future, we're excited for what's ahead. You know, again, very happy for our EdCast friends, but it's not something that makes any change for us. Yeah. Ale, I will add from a product standpoint, one consideration. I mean, usually, LMS vendors are not looking for LXP vendors because usually the new next generation frontend of the LMS is already fresh and provides most of the LXP capabilities. Reverse, LXPs don't have a strong backend to manage the complexity of the admin of their customer. They are looking to partner with the solid LMS because they need a backend that allows to organize group of users, power users, skill mapping or artificial intelligence that creates skill mapping inside the learning object. You have to imagine that Docebo is so powerful in the backend, which cover probably 80% of our development effort, that the LXP are looking for these kind of capabilities because basic LMS cannot satisfy their ideal customer, which is a Fortune 2000 company. Okay. Thank you very much for that. Just last quick one for Sukaran. You'd noted that you expect EBITDA to go positive as you exit the year consistent with last quarter. You know, given, you know, wage inflation and some of the cost inflation, are you building in some consideration for that? When you say exit the year, do you mean Q4 will be EBITDA positive or is it, you know, something we should be thinking about, you know, in Q1? I'll pass the line. Yeah, Rob, I can, we have considered wage inflation, et cetera, as we thought about the structure this year. Maybe I will simplify the answer. Yeah, we are indicating Q4 will be the, you know, Q4, we will exit as EBITDA positive. Yes. It will happen naturally, as I said. That's the point I wanna reiterate here is that the business was always, you know, we operate in a very efficient manner. You know that. We've always managed our growth, in maintaining those unit economics. This is a natural transition that's happening. I'm sure if you do some of your math, in your modeling, you'll get there yourself, too. Okay. Thank you very much. Thank you. Your next question comes from Stephanie Price with CIBC. Please go ahead. Hi. Good morning. I had a few questions on the sales side. The first is, as you move to the enterprise, just curious if you're seeing a difference in how customers are coming onto the platform. I think at IPO, most were coming in through the website. Just wondering if that's still the case or if the sales process is changing as you add these larger clients. Stephanie, just to make sure that I fully captured your question. It's about the makeup of our customers as we move more and more in the enterprise space. Inbound or something. Uh, oh- Yeah. Did you? It's the- Lead generation. Okay. Sorry. The line cut through the question. Okay. From a lead gen standpoint, our strategy continues to be an execution that is multi-play across our inbound marketing and our outbound marketing. Now, for sure, generating demand on the upper end of the market, the Fortune 1000, requires a certain level of tactics that are, you know, a little bit more sophisticated as opposed to the more natural inbound marketing flow. The majority with inbound marketing flow, this is not a surprise in any software industry, belongs more to the sub-1000 employees company. However, some of the biggest brands that over the past three quarters we have mentioned, at times have actually originated through inbound. That equation where large enterprise equals outbound outreach, costly long funnel is a false myth. Having said that, two areas we're investing on, and getting better and better, and I think we'll execute even more in the future. One is, like we said many times, specializing with enterprise sellers and enterprise SDRs. No doubt about it. You know, those deals are different. There's different buyer personas. The buying committee is larger. It requires a different skill set, for sure. The second thing is we spend our most ad hoc account-based marketing resources on those accounts. What that means is we implement strategies to look and feel and show up and have landing pages that speak very. They're very tailored to the story of that customer. We do that in a rather sophisticated way without sharing too much of the magic sauce, 'cause I can expect some competitors wanting to steal the art of the possible here. I would say without going too deep, that intent data leverage used in the right time, in the right way, of the customer journey is very powerful. When you combine ABM with a strong branding messaging, with good product marketing collateral, with good alignment between field and BDR, that's kind of the magic sauce. By the way, we're not perfect, but we believe we're very happy with what we're seeing and just doubling on enterprise because it's giving us a lot of confidence for the future. Great results, right? Like, the Bridgestone of the world that buy the entire suite of our products for us is, it's just. We're very proud of it. Very proud. Your next question comes from Martin Toner with ATB Capital Markets. Please go ahead. Good morning, folks, and congrats on another strong quarter. Gross margin declined a little bit year-over-year. Can you guys talk to the driver there? Yeah, Martin, I think the way I would think about gross margin is just sequentially as we talked about it. Last year was, I believe that was 82% or so last year. We've continued to talk about the fact that, you know, I think we were pretty much flat sequentially to the quarter. I think we'll see some operating leverage in the gross margin. Sorry, some leverage in the gross margin side, as we move up a bit, but I'm pretty happy with how I guide it. As we think about going forward, we are happy with our gross margins being in the low 80%, and they're getting there, and they'll get there in the next few quarters. It's investments we're making deliberately as we move up the chain in the enterprise segment to make sure that we implement our customers right. We are supporting them through their journey because a happy customer is all around happy expansion and benefits us from a product suite perspective. Fantastic. Thanks. You referred to winning sort of whales versus mini whales, with the mini ones being in the you know greater than 100,000 level. Can you talk to how those types of customers contributed to AR in the quarter? I can speak to some numbers and, if you want any more flavor, Ale can jump in. Pretty similar story, actually slightly better. In the quarter, new logo ACV and cross-sell logo ACV was slightly higher at $60,000. If you think about the composition of that, half of that net ARR add in the quarter was from logos above $100,000 but under $1 million. No seven-figure deals again. Consistency is the theme that we've spoken about in the past quarters. There are no big home runs here. I do wanna highlight one thing that people should understand is the story of that customer doesn't stop at the outset. While you guys will, you know, factor that in or will look at the fact that we've landed a customer in that $100 million - $1 million sweet spot, that story is just the start of the journey, and we continue to see. If you look at one of the luxury retail chains that we would have named in the six months or so ago, they came back to us within six months, and they wanted our platform to be implemented to their sister chain. That's the kind of sweet spot we sit in, and that's where ACV doesn't stop at the outset. Great. Thank you very much. Finally, anything you can share on the progress that you are making with some of your new products and selling as a product suite? Yeah. Product, I mean, we are learning how to sell multiple products across our customer base and with new logos. There are some products we are extremely excited and are already proving progression in the attachment rate, and I can name Shape, Connect, and Content. Other are probably beyond this stage of maturity and adoption, but we are continuously investing and learning on how to leverage also learning analytics and learning impact. Connect, if I have to name probably the one that is exciting me the most, is providing, you know, a gateway to integrate all the enterprise software stack, Docebo inside the enterprise software stack, providing two things, stickiness, because the more you are integrated in the enterprise software stack, the more it's difficult to remove so deeply nested and integrated software from a company. And second, feeding the company with additional data. I think single sign-on skills and many other data that support the platform to perform better. Because, I mean, the more we give data to our AI, the more our AI can automate more processes inside the LMS itself. Great. Thank you very much, and congrats on the results, and congrats on adding new team members. I'll pass the line. Thank you. Thank you, Martin. Your next question comes from Richard Tse with National Bank Financial. Please go ahead. Hey, good morning. This is Mahir calling in for Richard. I guess first off, I just kind of wanted to ask you, moving through the pandemic, we're kind of like getting towards the tail end. Are you seeing more of your wins coming from displacements versus white space? If you guys could just talk about any trends that you're seeing there. Sure. It's a fairly simple distribution. We see more than 80% displacement in the mid-market and enterprise. We see 50/50 displacement in net new field in the small business segment. Enterprise space we track, you know, it's kind of a little bit easier to execute because the amount of players in that space is smaller. We get a lot more laser-focused in our competitive strategies and our competitive capabilities and differentiation elements. No doubt that our commercial space or so-called SMB space, you know, it's more crowded. It is. There are more players. I would say we approach that market with the intent of always landing the type of organizations as customers that are the right fit for us. You know, look, there are organizations, for example, that have a small employee base. Think about associations. Their business model yields really large amounts of end users and, you know, we certainly do really well there. Whereas, you know, as opposed to an organization of about 100 employees that is looking for the first time LMS, and they're very cost conscious. You know, at that stage, we may not be the number one choice, and we don't actually aim to be. We're positioned to satisfy better high growth companies, and again, more focused on the mid-market and enterprise and large enterprise space. That's at a high level. Okay, thanks. For my follow-up, I just wanted to ask, and it kind of touches on the goal you guys have for reaching $1 billion ARR. With valuations coming down across the tech space, like, how are you guys thinking about your build versus buy strategy? Like, do you see more opportunity to just acquire some smaller companies and kind of kickstart some of your newer product modules that way? First of all, the more the multiples drop, the more you find me interested in going outside and hunting. That said, as of today, the multiples are dropped in the public market. This is not yet happened in the private market where the smaller targets are. That said, I mean, we are looking carefully both public and private market because now probably we can find great deals. There is a caveat here. I mean, a great deal does not only have great low multiples, but need also to have great product, great team, and great economics. I mean, Docebo always had the culture of capital efficiency, and so you will probably not find Docebo buying a company which is not capital efficient. We need to find the perfect match between product fit, team fit, and consciousness on economics and economic fundamentals. That said, I mean, this situation are incredibly exciting because, I mean, when the world is falling apart, only the braves will win. Yeah. Got it. Thanks so much for answering my questions. I'll pass the line. Ladies and gentlemen, as a reminder, if you do have any questions, please press star one. Your next question comes from Daniel Chan with TD. Please go ahead. Hi. Good morning. Sukaran, I just wanted a clarification on the response you gave to Rob's question earlier. Is all the ARR from some of these enterprise deals in the current metric? You're saying that the enterprise deals could take three years before you get to full recognition as you ramp up over that time. Is the final ARR in the current metric? Yeah. Yeah. Just let me just give you example to make sure everyone understands it. Let's say a deal, a ramp-up deal is what I was talking about, is where a customer would sign for, an example would be 10,000 monthly active users in year one, 20,000 monthly active users in year two, and 30,000 monthly active users in year three. From an ARR reporting perspective, that is the minimum floor for each of the years the customer has been locked in for. They cannot downgrade below that, and that's their minimum floor. When we calculate the ARR, it's a straight average of that, of the subscription TCV of that contract divided by three. when you'd recognize revenue on it under IFRS 15, you take the revenue for the first 10,000 monthly active users in year one and subsequently year two for the 20,000 and subsequently year three, 30,000. You'll see a differentiation in terms of ARR versus revenue recognition, if that makes sense, Dan. Yeah. That, that's very helpful. Thank you for that. Okay, switching gears a bit, there are reports that SAP may be selling Litmos. Just wondering whether you have a view on whether that changes the competitive dynamics if it's sold to, say, a private equity firm. On my side, from the market standpoint, I'll leave Claudio any consideration from an M&A standpoint. First of all, we want to say that we remember when Litmos was a New Zealand company well before being sold to CallidusCloud, and then CallidusCloud wrapped it in a deal with SAP. We remember the entire journey, and we remember that up until, say, year 2017, 2018, they were a serious competitor, particularly in the SMB and mid-market space. Or, you know, I don't think it's a secret for any of us that, for the past years, we have not had a chance to really compete much, according to our data. Therefore, we don't have a strong opinion about that. With that said, we understand the process undergoing, and I'll leave Claudio to make further comments. Well, no, I second Ale. I mean, we think that Litmos is mostly focused on the small business. Sometimes they do have enterprise customers. Let's say that, you know, I'm always happy when a competitor is taken over by a private equity firm because usually they are very defocused for one or two years on reorganizing themselves. From the competitive standpoint, I'm very happy that a great competitor like a great company like them, very efficient, will be the focus for a couple of years doing the private equity game. Or the private equity, assuming that they are being acquired by a private equity, we will know. Regardless of where they go, right? Like, it's immaterial for us. Yeah. Thank you. Your next question comes from Christian Sgro with Eight Capital. Please go ahead. Hi. Good morning. You had mentioned previously that many geographies are behind North America in terms of their maturity with corporate LMS. My question is, which geographies do you call out as being most behind, and maybe how the company's positioned to attack those regions in the next, say, three to five years? Well, actually, the philosophy is the more you go east, the more first you find first-time adopters. Let's say, Australia is another world because in Perth, Australia, probably in 1999, Moodle was created. So Australia is very friendly to e-learning as New Zealand as well. That said, my focus now is on creating solid foundation in Germany, in France, because this is where we have offices. If I have just to make a theoretical speculation, you know, during this geopolitical shift, I think that Middle East will become the new frontier, the new bridge between East and West. I do think that sooner or later we have to take a look there. As of today, guys, we do have a lot on our plate in Germany, U.K., Middle East is including Israel as well. Sorry, in U.K. And that, you know, as company, we usually don't want to be distracted on many activities in parallel, because I mean, the less you will perform. As one step at time. Yeah. Christian, I mean, like, just as a good segue to Claudio's concept of focus and prioritization, no doubt that North America kinda lead the chart, but, you know, I would say that there's tremendous power in branding recognition as well, right? Entering in a territory, what we've learned over time is it's not only about hiring field force and hiring folks, it's also about the breaking through the geographical brand perception. That all in all, you know, regardless of how you go about it, agency, not agency direct, takes time. I'd say even with our latest move in APAC, with our office in Melbourne, following the Skillslive acquisition, we understand and model out that growth needs to go through a market recognition and branding affirmation that is hard work. You can't do that. I guess my point is you can't do that at the same time many places. You gotta kinda build a franchise model where you go and execute according to a formula, and the formula has to be repeatable, and that formula has a timeline, and then we check against that timeline and that formula and, you know, and we'll lock investments progressively. That's the way we look at it. Christian, I'll just end it to say that, always never forget that North America grew at 70% last year. There's a lot of momentum there still. Oh, yeah. Right. Good traction all over. Alessio, you're getting that, my follow-on here. Just curious on Skillslive, it sounds like that acquisition made a lot of sense, a couple months now, and sort of stood up a team in Australia overnight. Just wondering, I guess one, if you know, how that's all coming along, how the integration's coming along, and then maybe as a follow-on, if that's the type of acquisition you might be looking out for in the future. Yes, for the future to enter new territories, it is a vehicle to enter territories that accelerate execution, no doubt. There needs to be, again, a fit, right? Of people, of timing, of geography, of market analysis for that territory and all of that, no doubt. With regards to Skillslive in itself, not only we stood up a group of capable folks that have a deep expertise in the industry that understand Docebo really well, that were already actively selling Docebo, that knew how to implement and support Docebo. Those things that can take anywhere between 12-18 months to master, and we were able to accomplish that pretty quickly. With that said, we are already actively creating pipeline. We're live as we speak, or it maybe it was yesterday, I can't remember, in HR Tech Asia, and we're collecting a good amount of leads and our team is just really excited about it. We added also an industry leader that comes from competition to lead our field sales team in addition to the management that existed at Skillslive. We really wanted to build a stellar team. You know, Mr. Warren joined us recently, and I mean, he is a master in the APAC region, has scaled teams there significantly. Look, we love it. We think it's gonna be a great success, and we're gonna go head down and execute. Go Australia, go. That's all perfect. Thanks for taking my questions. Yeah, thank you. Mr. Erba, there are no further questions at this time. Please proceed. Thank you everyone to listen to us also today. Have a nice day, stay safe, and speak in August probably. Bye-bye. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.