My name is Josh Baer, Research Software Research Analyst here at Morgan Stanley, and we have the Docebo team here with us today. Before we get started and introductions, some disclosures. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures, and if you have questions, reach out to your sales representatives. Alessio Artuffo, President and CEO of Docebo, and Brandon Farber, Interim CFO, thank you so much for joining us today. No problem. Looking forward to the conversation. Investors like to pattern match, in my view. When thinking about Docebo, Corporate Learning Management System comes to mind, and probably with that, a lot of legacy vendors doing compliance. Where does that pattern match fit, Alessio, and where does it fall short? For sure. So thank you for having us. First of all, pattern matching and Learning Management System. Let me first define what we do primarily, and then let me perhaps describe how the category has evolved and will continue to evolve over time. Docebo, first of all, it's a Learning Management System designed specifically for enterprises. Roughly 40 million users gravitate around the Docebo platform, and millions of these users take active courses, classes, certifications every day, every week in Docebo. Historically, when folks thought about the Learning Management System category, as you rightly pointed out, there is a bias towards the concept of compliance use cases, i.e., a place where I would go online to take courses that are not as exciting and where I get certified against a certain compliance aspect. That has been the, I would say, historical average knowledge on a surface level of Learning Management System. We, for years now, have differentiated ourselves from this perspective. Docebo actually serves multiple use cases. We track about eight across our audiences, and the most interesting thing of our story that has, in fact, allowed us to succeed and grow at a really good rate against market CAGR is that more than 50% of our customers use Docebo for what we would say, or we would call, customer experience initiatives. Whether those are customer academies, training, enabling your customers in upskilling on your products and services, or they are enabling a large manufacturer or software provider to activate channel training and partners, there's a variety of use cases there, but what matters is we've initiated this journey of differentiation from internal training or employee experience into customer experience. It's just the beginning of a much larger differentiation that we plan for the years to come. OK, perfect overview of some multiple use cases. What are some products outside of just the core that's in your suite that helps to differentiate you? Yeah, so today, Docebo is a learning platform where the core component of the platform is called Docebo Learn. Learn is really the engine around which all other existing modules or add-ons really operate, and they fit within that product to extend the capabilities of the LMS core. The LMS core really is the center of everything today. It's our single- core product. Around it, we have the capability of serving users with content experiences. So organizations come to Docebo not just for the purpose of having a platform, but oftentimes they need to create or procure content that has already been created. In the former case, in the case that they want to create proprietary content, an example for that is branding-owned content, product content, things that don't exist out there in the market that are proprietary by definition. We make available a creation tool. This creation tool, which we presently call AI Authoring, is one of the axes of growth for our company for the next five years. We're going to expand the authoring concept to a creation concept. And really, the acceleration of that has been given to us as a result of the potential from AI. But there's more. We offer to our customers an in-depth view over the analytics of the learning behaviors. We've embedded really high-end enterprise technology from AWS QuickSight to allow our customers to dive deep with a proper AI and BI engine in every single learning data. Additionally, we have recently launched a product called Community. Community allows our customers that use Docebo both for employee training and customer training to implement collaborative communities among them. We know very well that business because we ourselves at Docebo have a community for our customers. That is the place where customers go and converse and say things like, oh, how do we accomplish this use case in Docebo? What best practices have you used? And it forms a real advocacy tool that not only helps with retention, but in general, reinforces the brand. And we have a very clear correlation with the unit economics of upsell and NDRR with customers that engage with our community. So the current Learn product has several modules around it. And the future is continuing to expand Docebo, but also adding additional products to, I would say, cover more opportunities in the learning space. Great. In your opening remarks, you mentioned that Docebo was specifically built for the enterprise. Just wanted to dig in on where your focus is. If we were learning about the Docebo story five years ago, it might have been phrased differently. You had more presence in the SMB and sort of pulled up market. So how do you target your target market, and how are you focusing on that? Sure. So you're right. We've seen our average contract value continue to increase over time, even in the latest disclosure of quarter four, and that is the result of a continued execution towards the mid-enterprise and enterprise space. We don't necessarily at Docebo think about the ideal customer profile exclusively in terms of employee size or company size. The reason is there are organizations that have a more modest size in headcount that, however, have very significant large-scale learning initiatives projects. So it's more the impact that the learning project generates rather than the size, so it's more the impact that the learning project generates rather than the size. Now, to be on a statistical basis, there is a correlation between the company size and the learning project complexity size, but in certain industries and verticals, for example, in the association space, we work oftentimes with organizations that are smaller in nature but have millions and millions of users in target. That's a good example of where those two numbers don't quite match. But in terms of strategy, both from a go-to-market standpoint and product strategy standpoint, and overall our roadmap for the next five years, it is very geared towards mid and large enterprises. And the reason is quite simple. Our product covers a set of needs and a set of problems that are more adapted to organizations that do have wider problems. The SMB space we've found tends to be a lot transactional, tends to be very price sensitive, and tends to be very jumpy. And you're right. We've lived within it for a while. We've used it as a jump start to graduate to the mid-market and enterprise space. We love that positioning. And we're just going to add capabilities that reinforce our differentiation there. Perfect. Maybe just to dig in a little bit on some of the go-to-market focus on the enterprise, I wanted to ask about the evolution of your partnership channel, partner channel. Where have you made investments, and how important is that? Sure. So today, partnerships at Docebo are a very strategic asset of the company. When I think about partners historically at Docebo, from the day really that I joined in good old 2012, we were already thinking about partnerships at that time, but in a different way. At that time, the goal and the need of a back then very small company was to penetrate as many markets as we could and bring our brand in front of buyers in the fastest way we could, and we used channel at that time to actually support that effort. Today, our efforts have changed. They are incredibly surgical. They are more geared towards those companies that complement our capabilities, and they are, as you said correctly, very geared towards those system integrators that we use, and we partner with them both on the capability side. So they help our customers implement Docebo and add their services on top of the practice. But at the same time, I should say, these SIs oftentimes use Docebo themselves as an academy technology, as a learning technology to empower their customers. And so there's a bidirectional relationship that we've been creating and forging over time. I would say when we say system integrators, folks tend to think about the mega companies, the Deloitte's, the Accenture's of the world, which we partner with closely. There is another additional layer of highly specialized in learning, in practice SIs that are very specialized either in a practice, in a vertical, in a segment. Government is a good example, or in a specific discipline. And so over time, our goal has been to assemble an umbrella of these partners. So when we go to the biggest companies in the world and they have a request, we can not only serve them with our technology, but we can look around and see who we can bring on the journey to support them. And customers love that. Great. Two questions on sort of contribution and disclosures. One around partners and if you're able to provide any context. Just wondering how important partnerships are today, maybe as far as contribution to new bookings. Where do you see that going? And then also more broadly, as you're focused more upmarket, how do you define how much of your ARR is coming from enterprise today, and where does that go? I'll give Brandon a second to think about the disclosures aspect. But I will say directionally, the things that I know for sure that are qualitatively important, a very significant portion of our enterprise pipeline has a system integrator attached in one way or another. They're either already in the organization and help us and facilitate our entry in the company, or they are partnering with us in order to craft a solution for the organization that we're trying to target. That's one. Number two, we have started programs with the likes of Amazon AWS that have very strong distribution channels. We have certified in their programs. And this is really great for us because it helps us with an additional way of marketing our products because customers that can buy Docebo through, say, Amazon AWS can consume Amazon AWS credits in order to procure the solution. That's just another way that we've been exploring recently. It's already been very successful, even though it's relatively new for us as a channel. Brandon, I don't know if there's any numbers that we can share. Yeah, Josh, I think you asked two kind of questions. One is new bookings. What does it look like contribution-wise from strategic SIs? While we don't disclose that number, if you actually look at our prepared remarks, you're going to see that a number of our large strategic wins have Accenture in there. And one thing that I'd say is that these are deals that we're winning that we might not even have been invited to the RFP 12 months ago when we didn't have these partnerships. And one real example is YMCA, where they had kind of an in-house Learning Management System. They went to Accenture and asked them to go to RFP to get to go-to-market for best-in-breed Learning Management System. Through that partnership that we've cultivated with Accenture over the past 18 months, obviously, Docebo was one of the top three invited to that RFP. If we didn't have that relationship, we probably wouldn't have been invited. On contribution of enterprise, it's about 50% of our book of business is what we call contracts above $100,000 today from an ARR dollars perspective. OK. Very helpful. Thank you. I'm sure you, Alessio, you want to talk more about AI. But a couple more questions before we get there. One is on pricing and packaging. There have been some changes over the last year. Just was wondering if you could highlight the key takeaways and essentially the impact. Yeah. I'll just take a step back. So April 1st of this year, 2024, we introduced a new pricing package, which was really geared towards the different markets we serve today. So we have one for the SMB, one for mid-market, and one for large enterprise. Historically, Docebo, we sold à la carte. So that means if a large enterprise came to Docebo, they could have 10 different items on a SKU. And what we're really seeing is, first of all, it simplifies the sales process. What was happening once we get the procurement, procurement would scrutinize every single item on the SKU. They'd ask us to re-demo. So having bundles is essentially speeding up sales cycles. It's increasing ACV on new logos. And it's increasing adoption on where we feel like customers could have value, such as Discover, Coach & Share and Connectors. And lastly, this is going to play out over time. But we have a thesis that this should improve our retention, not only growth, but net retention, because on renewal, they won't have these 10 SKUs to really scrutinize. They're just going to have this one bundle to renew and go up from there. Perfect. We've been hearing over, I don't know how long, but your progress in addressing the federal market updates around FedRAMP and partnerships there. Just wanted to touch base, given the current environment. What is your current federal exposure, and how are you thinking about that opportunity? So from a U.S. federal, it's essentially 0%, right? Because we have to get that FedRAMP compliance. Government as a vertical is 5% of our ARR. But that includes a number of different state legislation contracts. But also, we have other government contracts around the world, in Canada and the U.K. and some other regions. So it's a pretty small percentage of our overall book of business. From a FedRAMP perspective, we did disclose that with a sponsoring agency, we got listed on the marketplace, and we started the audit subsequent to year-end. So we're now two months into it. It's going very well. To date, we expect to receive ATO status by the end of Q3 of 2025. And we're really excited about the opportunity. We think we could save the government money. The DOGE mandate is to modernize the tech stack of the U.S. government. And with roughly 60% of that on-prem, there's a significant opportunity to save the government, given the fact that they're spending millions of dollars on consultants to maintain these clunky old systems, or they just have bloated IT departments trying to maintain these systems. And also, one thing I want to mention is that our competitive landscape in the government is probably the weakest out of any end markets we serve today. From the government, there's really Cornerstone, there's Skillsoft, there's SAP, and then there's open source software called Moodle. But they call themselves PowerTrain in the government space. So we really think from a competitive landscape, Docebo is going to do really well. And we just have to continue the motions and get that ATO status and start winning some contracts. Excellent. I wanted to ask more broadly about macro and the environment around Learning and Development budgets, just broadly over the last couple of years. I'd characterize it as a challenging environment. So I wanted to touch base on what you're seeing now as far as the latest trends. And how does that compare in some of the different segments of your customer base? Yeah, so in the past couple of years, there have been a couple of trends that were more significant than others. One is, for sure, companies have become more prudent in the way they approach buying software. There's no doubt about it, and everybody is aware of that, but prudent is too generic. I'd say what we've seen is two things. Number one, we've seen a desire to consolidate investments around software categories. That is actually a good thing in the grand scheme of things. We ourselves market very much to the consolidation problem, and we are aware that especially in the Fortune 1000 space, there is a great deal of overlap of systems and capabilities that have accumulated in every company over time. It's very, very, very common for us to go in a large company and discover that they have four, five, six LMSs. We have an experience of a given customer that we've acquired years ago where we entered with 24 in play, and we have over time consolidated to one. And again, this happens for a variety of reasons. Over the past two years, CIOs and CFOs have targeted this as a problem to solve. Frankly, unsurprisingly, we at Docebo at a 1,000 people or so company scale have done the same exact thing, led by our CIO and CFO offices. The other trend is companies want to do more with less. Now, that is something that is appropriate of good management practices. But I would say AI has accelerated this to be not just a general desire, but as an opportunity to execute workflows and business processes with less seats and less products. Once again, it plays pretty nicely into our strategy, which is to evolve, transform, and really continue to execute that Docebo is an AI-first company. AI and AI-first are going to be probably the words that we repeat more and more and more. They are very central to our strategy over the next five years. Yeah, I'm looking forward to sharing more on that. Excellent. In the session before this, Sam Altman was talking about all the changes in the labor force coming and mentioned the need for the next generation or two to reskill in order to adapt to that change. I'm just wondering if you're seeing that as a pull, as what customers or potential customers are trying to bring you in. Is that need for reskilling and your positioning to address that already occurring? It's not just a feature perspective. It is really at the core of our renewed vision. Docebo exists in order to really extract and help people accelerate their talent beyond their known limits. That's what we want to do. And while it's a little bit of a vision statement, the way it translates is by giving a platform that allows people to understand where they are in their journey, professionally speaking, and how they can accelerate the growth towards their own future. And this is valid for both the companies and the individuals. Skills and reskilling is probably one of the top three drivers that we track. And we're at work to really make sure that we have the capabilities to support our customers in that area. Great. Let's talk a little bit about AI. You mentioned AI authoring to start the conversation. What is your AI strategy? What other products do you have? What is directly monetized versus part of the platform? Josh, look, I'd say things are changing really rapidly. That's under everybody's eyes in our world. The expectations that customers have of AI capabilities also is rapidly changing. Monetization is a top concern. Alongside monetization, the issue that I think about is value, because I think value and monetization go hand in hand. If you can create value, monetization comes. If you don't create value and you want to try to squeeze in monetization at all costs, that usually ends up being a failing strategy. I think about what do our customers want, and where is the value in it for them? What problems can AI really help resolve as opposed to just be lipstick on the issue? I spoke about creation before. I speak about creation a lot because learning in an LMS, another general concept, is, it tends to be seen as passive. Passive learning means you're on that laptop, or you're on your phone, you're taking a course or a class, and you're interacting passively with the content. That's one way of doing things. It has its merits, and sometimes it works. Learning goes beyond that. Learning should be, can be also extremely hands-on and practical and experiential. Our view on AI and creation is really to enable both passive learning experiences, which is your typical creation of digital learning content, as well as more experiential experiences. We are working actively to release, over the next few months, our beta version of our virtual role play. It is intended to allow a professional to interact with a facilitator online that understands a subject matter, whether it's the knowledge of a given company or a some of products, and train at speed on that knowledge, essentially having a tremendous ROI in anything enablement, whether it's customer support, sales enablement. That's one core technology we're working on. Additionally, I would say an AI-first company mindset means also injecting and infusing a lot of capabilities inside our core product. I think over the next five years, SaaS software is going to be disrupted. I was actually yesterday at a CEO conference where the former CTO product at Salesforce and now Oracle delivered a presentation that addressed how companies over the next few years are going to be completely disrupted by the injection of conversational UIs versus the current concept of UIs that we are all used to. And that paradigm shifts so many things, shifts the way we think software, shifts the way we interact with software. And so we're going to go very much towards a conversational model. And finally, but I can't give too many details of this, we are at work on our agentic strategy. We're going to be talking about that at our Inspire conference, which happens in April. I believe that talking about value, our customers tell us that learning tends to be very manual. There's a lot of manual processes, whether in administering the platform or creating courses or doing correlations between learner experience and performance. And we believe there's a better way and are going to be creating an agentic-based logic that addresses some of these issues. Excellent. I wanted to come back to competition. You mentioned a few vendors in the conversation around government. But I wanted to ask more broadly, who do you view as really your core competitors? And And ultimately, why does Docebo win? So we haven't seen, first of all, any significant changes in the competitive landscape over the most recent times. There are up-and-coming AI-first players that we watch carefully because they're very smart young companies that bring innovation in the market that historically has been slow to react to technological advance. And I wouldn't put Docebo in that bucket. But in general, the legacy players in the learning enterprise space are fairly conservative against technology advance. With regards to the key players, it's the usual players that play in the enterprise space. And yeah, we view competition in two buckets: mid-market and SMB space and enterprise space. On the mid-market and SMB space, it's a very, very price-focused competition rather than value-based competition. On the enterprise space, it's more about serving the needs of a customer not only from a product standpoint, but also from a service standpoint, which is why back to the system integrators logic and being able to serve customers more broadly. Maybe, Brandon, you have additional points. I don't know if I know. Just wondering where you would put Workday in those buckets, obviously more geared toward the enterprise. Yeah. So Workday, but also others more broadly defined as HCM suites that may have a learning module. So our point of view on that and what we hear from customers, it's actually pretty straightforward. If the customer has learning initiatives that are very transactional and learning doesn't play a key role in the minds of the HR or leader or, in general, the leadership team of a company, it is not uncommon for companies to say, you know what, it's already in our product. We can add it to the cents on the dollar. And there's nothing wrong with that. What we found is that every single time that has occurred, we literally track it in our CRM. And we follow up because we know that in a year from now, that group that has the need to deliver something more complex, sophisticated, especially if they want to go towards customer experience, they're just not going to be able to do it. Secondly, what we hear a lot is that when a customer goes through a Workday implementation (I haven't been through one, so I cannot speak from experience) those processes can be significant in terms of time. And so what is the time to market needed to spin up a learning management platform as opposed to Docebo where we can get you up to speed and live in six to eight weeks? That's another big consideration that we talk to customers about. And frankly, all we do is learning. So it's just a different proposition. The one thing I'd add is going back to what Alessio said earlier is that when companies select Workday, it's very much a CFO-driven decision because it costs, and it's not the HR buyer persona that we're in contact with that is making that decision. Excellent. I wanted to ask one more just on the positioning of the LMS or a modern LMS versus LXP, and what's the current state of the dynamics there, and is that an opportunity for Docebo? I have a lot to say. We have three minutes and 30 seconds to go. I'm going to try and zip it up. First, the LXP category. Let's talk about it. I've been in this business for 20 years, and there have been several attempts in my past 20 years at creating what we call temporary categories. Temporary categories are oftentimes marketing exercises that insist on one business problem, and the duration of that business problem impacts the livelihood of that category. At the time of crafting the LXP category, the problem that was very common was one and only one. These old-school legacy Learning Management Systems are difficult to use. Learners don't want to engage with them, and they get lost. So smartly so, some people crafted and coined a learning experience platform category. What they were trying to do is to emphasize on, if we take this technology and apply it on top of these layers because they're very difficult to dismantle, we can simplify. So let's just apply sort of a front end to these back-end systems that are systems of record. Then over time, because that value proposition was a little shaky and it needed to be juiced up, it was also attached or blended with the concept of upskilling and reskilling, causing in companies a little bit of confusion because now what is the master data for skilling? Is it in the HRIS? Is it in the LMS? Is it in the LXP? A lot of confusion, notwithstanding the Talent Mobility platforms and so on and so forth. The problem, though, had a lifetime because companies like Docebo completely disrupted the underlying logic that you need in LXP because our platform is just as beautiful and as nice and simple to use as an LXP, so some people have asked me in our marketing team many times, well, should we brand ourselves an LXP, and I'm like, guys, this is just a pure marketing branding exercise. We need to emphasize the benefits, and we need to talk about our capabilities and stop trying to create categories that are time-bound. Now, in terms of the LMS as a category for the next 10 years, it has to evolve. It can't keep on being the place where you go, click on compliance, and take the course. Our journey of that evolution and differentiation started five, seven years ago with an EX and CX play. But in the next five years, we're going to make the LMS more of a learning platform experience where you can go in and take classes, where you can go in and manage at scale scheduling of classrooms, where you can do role playing, where you can support virtual hands-on labs, where essentially any enterprise in the world can come to Docebo and say, I have a learning problem, and we have a solution to that that is multi-productized. That's the vision for the future of the LMS. Very clear. Did want to ask one on last quarter's results. And there was a restructuring. I was hoping you could talk a little bit about the catalyst for that headcount reduction and how should we interpret that as far as the impact to margins and the path ahead. For sure. So according to sources like World Forum and McKinsey, 40% of the skills of the workforce are going to be changing in the next two to five years. And AI is just a catalyst to that change. We're seeing the same thing in our company. Everybody's seeing the same thing. As we approach a new frontier of Docebo, the one within which in the next three to five years, we're going to transform the company in a real AI-first company. It means every single piece of software and line of code we create has an AI-first implication. We have to rethink about the skills we need today, tomorrow, in order to support this initiative. So we executed this restructuring really, truly from a position of strength. It was not as a reaction to financial constraints. It was merely a strategic move to prepare the company for the years to come. Great. We are all out of time. Alessio, Brandon, thank you so much for your insights. Thank you so much for having us.