Docebo Inc. (DCBO) Earnings Call Transcript & Summary

And with that, we'll start our investor briefing this morning. Folks, thank you for coming to our annual customer conference and Docebo Inspire, which is quite an exciting event. I'm sure you've seen some of the fun stuff yesterday and more to come today. This morning, we'll give a good brief overview of our business but as we get through the agenda, one of the things I will start with is the safe harbor statement. I'm sure everyone is aware of it. Moving forward, just the agenda for the day, Alessio will speak to the CEO overview and corporate strategy. Next to him is Travis Burke, who is going to cover some of our corporate strategy and overall initiatives around the partnership area. And alongside Travis is Francesca, who's our CHRO. And then Fabio will then come in and participate and provide us an overview around the product capabilities that we built and the road map items that we showcased yesterday as well as some perspective that we'll get today as well in the event. Finally, Nitin will come in as our Chief Information Officer, to provide you an update on how we sell into the enterprise segment, how we win business from a security scalability perspective and give you an overview as well on the government side and what we're doing in regards to FedRAMP. And then I'll provide an overview on the financial business side and, of course, some numbers around how we think about the operating leverage and growth in the future. With that, I'm going to pass the stage on to Alessio to come in and give his overview.

Thank you so much, Sukaran. It is a real pleasure to see you all again in the room. It doesn't feel like it's been 1 year since the last time in Nashville, but it has been. Thank you for your time. Thank you for your continued work on our business. We really appreciate it. Inspire is very inspirational. For us, it is a great time to connect with every single audience that surrounds us, whether it's customers, partners, you all. Today, we're going to have a little bit of a more of a refined messaging of topics that you may have heard from various sessions across the team yesterday, all compacted. It is an absolute pleasure to be here in CEO ship with a good official 24 hours. All we had to do guys is to have this a few months before they would have named earlier. No I'm just I'm just kidding. It is an absolute pleasure. And why don't we get going? Before we start with the content, I wanted to acknowledge other team members of Docebo that are not sitting on this chair, and they are part of my leadership team and broadly about the leadership team of Docebo. They will be participating to the Q&A as well. So just briefly, in the interest of time, I'm going to name Analisa that is one of our leaders in our legal team. So, yes, we have the lawyer in the room. Sorry about that. Just it was a bad joke, a terrible joke. Giuseppe, who spearheads our AI strategy as a VP of AI; Mr. Greg Swift, our CRO; Harvey, that is our GM for Government; Andrea, fresh of Docebo, a few days in, SVP of Product. Noel Miller, Chief of Staff; Alex Asznovic, CMO, also, what about a month in, roughly. Jen represents our amazing events organization. Brandon Farber, Vice President of Finance; David, SVP of RV Operations and Operation and Data. All right. Sounds like I've completed the introductions. Have you all introduced yourselves here already? Some of you are familiar with some of the staffs. We spoke to some of them during keynote and other sessions. But here, I'd like to underscore certain elements that Docebo continues to be a global story of success. North America remains the dominant market, but we continue to operate the business to differentiate our go-to-market across the world and continue to see success in other regions like EMEA and APAC. The significance of the fact that about 0.5 million users have been seen logging in Docebo on a given day. It's very powerful. It underscores the reach of our platform and the reach around global customers. Speaking of reach, I love to see our partner network growing because I think an enterprise organization needs to continue to extend its reach past its own technology by integrating with third parties, and we're definitely focused on that. We'll speak about that. It's super significant to see the growth of revenue at a 42% CAGR that is a testament to the quality of the fundamentals of the business. And then the conversion of 125% FCF from adjusted EBITDA, it's also a significant metric that we'd like to underscore. Next slide, thank you. We simply continue to be working with the best in their own industry and category. From a go-to-market standpoint, what I really love about what we've been doing progressively, gradually, but steadily is continue to refine our GTM messaging and our efficiency in our GTM. We continue to think hard about win rates and product market fit against certain industries to maximize the value of our investments of our S&M spend and align our product organization to build products that win where we have a strategic goal. Here, you can see companies that have joined Docebo more recently and others that have been long-standing customers. And all of these are terrific logos. If I think back of Thompson, if I think back of Netflix, of Zoom, of AWS, not just great logos, but impactful projects that involve millions of users. One of the things that I say to the Docebo team all the time, what fires me up is knowing that every day we wake up and the things we do in our company improve people's lives, and we really contribute to people's evolution, whether they are the employees of a customer, whether they are in the realm of their customers' life cycle as customers of the customers or partners of the customers, we make an impact, and that's really meaningful. Next slide, thank you. So, a good Segway to the fundamental mission. On one hand, we are building a business that more and more focuses on the business of our customers intended as employee experience and customer experience, unlocking the value of employee growth and customers' growth. On the other hand, we have educated the market that the LMS is no longer an internal tool that delivers compliance training. We have demonstrated and we have almost industrialized the concept, the LMS can produce meaningful tangible returns in the form of revenue, in the form of increased win rates, in the form of customer retention. It is a productivity technology in an enterprise. We, over time, have always looked to mature messaging and make our positioning clearer to the markets. As a result of that, when we think about audiences and when we think about ideal customer profiles and when we think about who are we building Docebo for at a macro level, the way I think about it and the way we are going to continue to be talking about our story is the investments that we make in 2 big macro audiences, the audience of the employees and the audiences of the customers. Within each category, there are several use cases. And from the day 1 of the IPO, we've always spoken about Docebo being a success story because it's a departmental story, meaning we can go and sell Docebo to varying departments to address a specific use case. When we abstract this to the concept of CX and EX, it is a lot easier to understand how we think about our investments and how we think about growing the business in general. The market is massive. The opportunity across both the commercial markets and the government markets are just stunning. And that's really important to underscore in my opinion, that when you look at where we differentiate, where companies love working with Docebo is when we are capable of entering in an organization that has both internal and external needs. It is notable that on those external needs, meaning the CX pie, the one you see here, that's 62%. Our research shows that about 70% of that market is Greenfield, meaning these are organizations that either have built some form of solution internally that they're seeking to replace over time or don't have a solution yet. And we really like that because, of course, it makes our job easier in terms of competition. And we're uniquely positioned to win that business given our capabilities. I also want to underscore that this is more of the switcher market. The mid-enterprises and enterprises are the ones that historically have been adopting legacy or traditional technologies that we are replacing day in, day out. More than 50% of our customers in the mid and enterprise business actually come from legacy or traditional platforms or modules of HRIS systems that they have outgrown or have really never met their needs. On the government side, it will be, I suspect, a topic of interest for all of you. It's a massive market. When we combine SLED and Fed, you'll see it's close to $3 billion market. We're going to be very focused here. We've spoken about it profusely in the Q&As of the earnings calls. And we believe we have a significant right to win. And as we approach FedRAMP, that portion of the business that relates to federal is very big significance, very big significance. So, the fact that out of every 10 customers, 8 choose Docebo for varying use case across CX and EX, gives me a lot of perspective about the fact that we have a very strong audience where we can leverage the fact that they're using Docebo for multiple use cases and increasing stickiness. So, the elements of our business that I am particularly focused on and that I want to continue to underscore and invest in, for sure, what I spoke to this intersection of internal and external or employee experience and CX experience is unique. Yes, I had multiple meetings with customers. And I don't know if it was either coincidental or my sales team set me up with those customers that had all the good stories, but they all were saying that among the reasons why they selected us was that when they came to the table and they realized they had either immediate or near future needs to address both EX and CX use cases, Docebo was the no-brainer story. That's what I heard multiple times, one after the other across varying industries, health care, finserv and others. I asked them who are we competing with? And also, I had a very similar and the response was, well, we looked at this vendor and that vendor and that vendor. And they actually were good competitors up until the moment that we asked them for complexity across both use cases. And then when we went deep in the RFP and we asked them the hard questions to address both use cases, they couldn't do it. They could only do either one or the other or they were scrambling to get them both together and you guys were on a different level. So, I like to insist on that differentiation and elevate the bar so that we get even further and further in that differentiation capability. Skills is another big area of focus for us. Every enterprise we speak to is either undergoing or will undergo or is struggling to undergo a skills transformation process. And we have a tremendous opportunity to further Docebo in that area, and AI will be our friend for sure. We spoke about government already. I will say also that the concept that Docebo activates revenue and the ability to use our e-commerce engine as a meaningful feature that we've further expanded. I think in the product keynote for those who were there, you've seen that we're getting more sophisticated in that area, during keynote, I shared some staffs. I think we have transacted over time about $250 million in transactions in Docebo alone that may seem per se, not a huge massive number, but it has significance when you consider that in the context of the fact that a lot of the enterprises have their own payment gateways, their own cards, their own e-commerce infrastructure, they plug into Docebo. And so, I think Docebo and the concept of monetization of knowledge is becoming more and more and more a trend that we want to be a part of and invest in. Next? Some concepts I've already shared. So, I'm going to focus on a couple here that are a little bit more towards the future as well. In particular, I would like to begin sharing our vision for the future. Our vision for the future, what customers love about Docebo, we know. As a technically new CEO, but having been in Docebo for now close to 13 years, I'm equally very aware of the areas where we can improve, where we have opportunity. And these, I think, are very good to understand deeply so that we can further make sure that we maintain leadership on and we don't let them go. I spoke to the audiences and to the customers. I made a commitment that we're going to continue, we're going to continue to improve our core product. This is a theme our customers want to make sure we don't become one of those companies that go and develop flashy things and forget about what led us here. I want to make sure everybody understands that maintaining quality of the existing core product is vital for our company. So, all these are capabilities that we need to continue to insist on and better every day. If I pick one from this list that is a good bridge to the future is the world of integrations, extensions and automated workflows. And the reason for that is, we think of Docebo as a key element of the enterprise stack in the company. It's really the glue across varying processes, business process management. Today, Docebo effectively, we think of it as a very sophisticated LMS that addresses multiple audiences. The learning life cycle in companies, particularly in large enterprises, is actually way broader than learning dissemination alone. It touches varying points. If you go to a Google or an Amazon or a Zoom, there's hundreds of engineers that learn in a certain way and that way is not through an LMS. And why? Because they're simply doing tasks. They need to learn technologies in a manner that is not always conducive to taking a course in the format of a score course or a slide or a video. They have to do experiential hands-on learning. That's an example of a learning capability that if you go to an LMS, they would say it's not us. We don't do that. But I question that response, I question that a leader in the learning technology space should aim at either addressing these needs directly by having these capabilities, these modules embedded or having really strong integrations with select leaders that are deeply integrated so that the learning becomes bigger and bigger over time. And we've been starting that possibility. We have a pretty ambitious construct in mind, and that construct goes initially becoming very, very good at extending our product with certain product extensions. We've done diligent work at selecting leaders that have great teams in select technologies. And my friend, Travis here will walk you through that a little bit more in detail moving forward, but I was hoping to kind of warm you up on the topic. Next slide. Well, apparently, I'm done, but I'll be here, and thank you.

Nice to see a lot of familiar faces. My name is Travis, I joined the business in April, but I've been working with the business for about a year before that as an adviser. So, I spent a lot of time with the Docebo team and then became a full team member in April. So, great to see a bunch of folks again. My organization runs corporate strategy, corporate development as well as partnerships. So, just wanted to talk through some of the things that Alessio alluded to in a bit more detail, and then we can go into Q&A later on the topics as well. But as we think about where we are, what's interesting is we talk to our customers, look at the ecosystem, understand what's happening in the buyer experience, we realize that getting to a broader suite of products and a stickier solution within our customer base is very important for our customers. Every opportunity that we talk to within our customer base as well as new prospects, we hear about the variety of learning solutions they have today. All of them have 10s and 20s and 30s of different point solutions within their learning stack. And all of them come to us and ask, how can we do more with Docebo and how can we expand that relationship. And so, as we think about our product suite going forward, becoming this learning and knowledge platform for customers, every time a customer thinks about learning or developing their employees, we want them to think Docebo first. And so, that's very important to us as we grow and continue to evolve. Fabio and the team will talk about what we're doing on the product and innovation side around AI as well as expanding our road map but on top of that as well solution extension partners. So, these are basically solutions that we that as a team. We essentially certify for our customers that these are the right point solutions for them to have around their Docebo investment. And in many cases, we'll look at how do we commercialize that for our customers as well. So, starting with the partnerships and integrations we have today into a more commercial arrangement for our customers as well. And then on top of that, looking at strategic M&A as well. As we think about the free cash flow that we're generating as a business and thinking about how we utilize that, there are a lot of customers and look at the adjacent investments that they make today and think about how do we make a broader solution that helps both our team sell into new accounts, but also extend the relationship we have with our existing customers. So, we'll look at both partnerships as well as M&A as part of the organic support around what we're doing today. That's great. You guys see companies that do lots of M&A and have strategic partnerships. What's really important and differentiating, I think, about how we're thinking about it is this bottom layer around how do we build a better experience that's not just an integration that you could get off the shelf with any 2 solutions out there today, right? And so, we look at expanding that by adding more tooling around workflows, building better automation for customers. It's great to have 2 different solutions that are in your stack. But if it's just an API point-to-point integration, like anybody can do that, right? We just want to create better experiences. And particularly within the learning space, we don't feel that's addressed today by a lot of our competitors or the solutions that our customers use. So, I think you'll see us start to think about that both between our internal solutions, but then also the ecosystem around this as well. So, just to visualize this a little bit, just sort of tying back some of the things that Alessio talked about and sort of real-world examples. These are examples of solutions. So, not a road map. I'll let Fabio talk about road map. But, when we think about the different experiences that our customers have today, thinking about that employee experience, that customer experience and underpinning it with workflow and orchestration, you can see that there's a lot of number of tools that apply across different parts of the learning stack. So, whether it's content creation, AI knowledge engine, having all these tools that can overlay their investments and then looking at today, we have the LMS, but how do we extend that into the other solutions that a customer uses today. So, whether that's TRMS, which is their training resource management for ILT-based training, our new community's product, a lot of our customers use things like proctoring and knowledge bases that augment the experience they have today. So, solutions that are in the learning stack and build a better experience for our customers. And that's really how we think about it from a corporate strategy standpoint. It's not acquiring competitors and taking customer base or things like that. It's like, how do we just build a better product that our customers really think about Docebo as their single source for learning and knowledge management. At that we're really focused on today and where we're seeing a lot of value driven for our customers. If we think about it on the strategic standpoint, I think we talked about Deloitte on our last earnings call and the work that we're doing with them, both on the commercial segment as well as the government space, really seeing a great traction there and really adding a lot of expertise outside of our solution for our customers. On the far side, Accenture, we're seeing in very large strategic accounts, customers that really need to understand the change management of putting in a new solution in place. And beyond the services that we provide, as a software vendor, working really closely with trusted partners at Accenture has really helped us in some of these large opportunities globally, which is great. AWS is a new avenue for us, and I don't think we've talked about this before. But as a large customer of AWS ourselves and a good strategic partner for us for a long time, we're looking at how can our customers leverage their investments in AWS as well to help them transact and extend the relationship they have with us. AWS is a very robust marketplace program today. We're looking at it as a way to ease the buying cycles for our customers that already have AWS investments as well. So, more to come on that as the year goes on. I just wanted to highlight a few key logos. We talked about this in the keynote yesterday as well. But ELB, who's been a very long-time partner of Docebo, ELB is kind of known as a custom content creation for a lot of people in the learning space, but also offers a really nice robust suite of products. And today, we're extending and able to sell some of those products to our customers already. So, it's a really nice addition to what we're selling in the marketplace today. And that's really an example of how we think about our solution extension program. So, that is something that we've vetted. We work very closely with both the vendor and our customers to understand the needs, in this case, around AR and VR learning experiences, but also looking at how do we extend that program so that our customers can ease that buying cycle. And we're looking at other solutions in a similar vein. So, we announced yesterday a new integration with Honorlock, which is a really, if anyone was in the keynote yesterday, it's a very slick integration that we built, and you can actually see it out there as well. But to allow our customers who have proctoring needs, to have a really unified experience as they're using Docebo. And then secondly and then beyond that, looking at companies like Administrate, which is in the training resource management space to allow our customers to both handle their LMS needs, but also the in-person training and all the things that go into the logistics around that and administration of that, Administrate is a good name for that. And lastly, scalable, looking at virtual experiences, so hands-on learning. It's an interesting thing. A lot of people think about that space as sort of traditionally like it's an IT thing or cybersecurity, whatever, really seeing a lot of applications across all kinds of verticals from health care to retail, having a live experience so that somebody can go in and validate the skills that they've created is, I think, really differentiating. And so, our customers are asking us a lot about how do we augment what we're doing in the LMS with something like a virtual hands-on environment. And so, that's why we've partnered with scalable as well.

Also with some of these, we have started the relationship with the customer in mind. So, we've built this on real use case, and we already have shared paying customers. So, I think that's really important to validate the actual experience in itself.

Exactly. And I believe that is my last slide, and I'll turn it to Fabio.

So, thank you, everyone, for being here. I'm Fabio Pirovano, the Chief Product Officer of Docebo. So, we want to start speaking about AI. Docebo is not new into the AI field. We are investing in the area since 2016. This allowed us to understand exactly what our customer wants and what works via AI and what doesn't. So, what are the refinement needed in order to make sure that we can create valuable solution for our customer. Being a long history of investment in this area, some of the things that you see in this slide are already live and benefiting the customer when it comes to making sure that their programs and their content is searchable and also, they can drive recommendation towards their customers so that they can improve the effectiveness of their learning programs as well. And last but not least, all of the areas of AI that [Technical Difficulty] to reduce the work platform itself. So, for example, things like skill tagging allow them to avoid doing this normally require a huge number of people in content management to do with AI. It's really able to reduce the workload to automate what they do today in order to make sure that they can optimize the investment into the learning program. And this is going to be even more true as we move on new releases that are on the other half of the pie chart, the AI autoring, virtual coaching and AI assistant that aims to even announce what we have done up to today using generative AI that enable us to have even greater results when it comes to those fields because generative AI is an enablement and an accelerator in our innovation throughout the AI field. What we have learned is, working on AI is that in order to make sure that it's valuable, you need to understand how it works, and you need to fine-tune it. That's why one of the key differentiators in our approach through AI and content generation is to make sure that they [indiscernible] informed model because otherwise, when you do alter, when you automatically create content through AI, it's very easy to create content that hallucinate or are not effective. Effectively, you produce them quickly, but you will not be able to deploy them as a solution to your learners. So, [Technical Difficulty] way in order to make sure that when a content is created through Docebo and the AI altering, it is patagologally sound. It practices that our in-house through people. This will really allow to make sure that we have innovation that is regulated by what and satisfy those things. It's not just innovation per se. We are focused to make sure that everything that we produce is based on customer feedback and is valuable for them. While we do that, we also want to make sure that the AI that we produce is configurable. There are different ways between the compliance type of use cases versus the one that are more to internal and external training. There are different requirements, different level of trust that throughout the AI. So, in order to make sure that they can really leverage those type of solutions, we need to fine-tune to make sure that they have and the level of access to the information and how the AI works that it's correct use cases in industry. And this is possible throughout different technologies that we built in-house and the ability to use even different LLMs. So, we are not using a specific one, we're using multiple because based on this type of differentiator, one model may be better than another. And we always have of [indiscernible] new opportunities, new models that incorporate over the quality of the model and the time so that we will always optimize those 3 variables in order to make sure that everything that we produce is optimized for our customers. Last but not least, the vertical knowledge engine. We have spoken about that in the keynote as well yesterday. The importance of building those knowledge engines is because they are the foundation to let the AI understand exactly the field of our customers. So, generic AI is not suitable for creating content. It's not suitable to let you search for learning platform. In order to make that a reality and to produce meaningful content or virtual role play, you need to know the customer field. You need to know their product. You need to know exactly their processes. That's what a knowledge engine is as the structure that allow the AI to make sure that they produce content for you and not for somebody else. So, this is very important and connects to the Docebo AI panel. As we move into this direction, the feedback that we receive from customers is that they really need to be sure that those solutions are secure, the privacy is taken into consideration and their data need to be managed with care. In order to do that, we have established practices that allow us to make sure that this happens, that we give them the [indiscernible] that are secure, that they are not shared with our customer and that they can adopt solution, shortening the approval cycle of the AI adoption within enterprise, which is under vetting all the time. So, we are really making sure that we have everything that they need to speed up the adoption of AI solution and get the benefit sooner rather than later. I'm going to conclude with new models that we announced yesterday in the keynote and that are now available like communities, which we launched in August. It's an extension of our offering that allow our customers to create community-based experiences. Community-based experiences are typical in core type of training or in even certain type of assistance of franchisee. It's very common to create communities that allow not just to train but let people interact with experts or between peers. These model is going to be the foundation also of what Travis was saying because allow for deeper integration between LMS' searches, knowledge bases, especially the customer experiences. It's extremely valuable. Moving forward, [indiscernible] is going to raise this month, it's advanced tech analytics. In general, to prove the value to really make sure that our customers are seeing the value of the solution as we were saying before, the ROI of the solution itself, they need to be able to match data to see them exactly in the way in which they work. So, the typical report of a QSR is very different from the typical report of a customer does compliance. They need to see that in different ways. In order to make sure that we accommodate all these different needs, we have created advanced analytics. It's powered by Snowflake and Amazon QuickSight. And it's a solution that will allow our customers to really control every aspect of their training to have a single place on which they can see all the metrics and make sure that everything that they do is effective or quickly spot anything that they may want to improve. AI authoring, we had seen a demo also yesterday of AI authoring, and you can also have one in the bit below. It's going to be launched later this year, before the end of the year and will allow really to speed up and reduce the time needed to create content. It's an authoring tool because that is a general request that we received from our customer, mid-market, but also enterprise to really have an environment that is connected between the creation of the content and the distribution of the content, the LMS that we already have. But it's also powered [indiscernible] AI in order to reduce the time needed to create content up to full content automation generation. So, it benefits even from the beginning as you adopt this new solution, you ease in the adoption of AI up to the full automation of the content creation. And early first half of next year, we are also going to launch Virtual Coaching that will allow for experiential learning. So, the ability to simulate different situation in sales enablement like cold call, like elevator pitches and similar and get feedback directly from AI. This will allow greater replay ability of the content. [indiscernible] So, the from the current methodology that is used in this field, which is either to use peer, which is long and actually extremely costly because you're asking other people, especially in sales to evaluate people in on boarding instead of selling as well as removing those type of sort of prescriptive serious games that are already on the market. This allows for really different scenario because it's dynamic. It's not prescriptive. This allows for replay ability of the simulation and greater immersion and as well as having specific feeders on what you say. So, it's not pre-tuned based on when you arrive. It's really based on each single experience. I think I can add a couple of considerations on top of this. I think I am super excited about everything that is on this slide. One thing that I'd like to share is on communities, for instance. For your knowledge, whilst we're launching our own communities now, it's already in market. Docebo as a company has actually experienced a technology of communities with our own customers. It has gotten so incredibly entrenched with our own business processes. It touches everything we do in the company from customer success, account management, go-to-market and the sales team uses that to capture interest, product management, feedback that's so integral to the company. We simply could not live without it. And what's interesting about that, when we made that investment, it was a couple of years ago, and we didn't have a community product at that time. So, we are in the midst of advancing our products so that we can take out and replace what effectively is a competitive product that we are using for not much longer. The reason why I bring it up is that the experience having drunk the champagne of communities in the use case of our company gave us a lot of perspective at what customers want. And as we were building the product, we already knew sort of what to look for in order to make the product successful and have an experience on ourselves of how integral it can become for a technology company and beyond. And also, it's been positioned a lot as an external kind of use case product, meaning a product that allows you to build external customer communities. That's kind of where our mind goes. But interestingly, during the beta process, a lot of our customers [indiscernible] listen, I can totally see the point about the customer training, but I have a primary internal use case. And this thing is going to be really helpful for me to do use cases or scenarios that are internal to the company, to create an internal community, whether it's [indiscernible] whether it's specific initiatives around the company. And so, I really love that it's a technology that's versatile across both [indiscernible] and CX. The second thing I want to say is on AI authoring. Look, you can look at that as an investment in a technology that's not new authoring tools, frankly, have been out there for a while. It's not revolutionary per se. Yes. However, the way we've approached it with this dual soul where content can be built to bottoms up from an instructional designer according to standard paradigms of instructional design, that's one. The other flow will be authored. And that is shifting completely the paradigm without, however, losing the pedagogy element that Fabio was so keen on describing. I would add one element that I think, Fabio, you touched on with the nuance, but I would like to make it even more clear because it's a big passion I have. I think Docebo is positioned with the intersection between AI agents, AI automation and knowledge, it's positioned uniquely to create experiences where the content creation capabilities like offering are going to be transparent to the end customer. If you had a chance during the keynote before you saw me speak in German, which I don't, by the way, there was an individual in a company asking the [indiscernible] to help with the creation of content on the fly. That's what was happening. And that platform heard that request accessed [Technical Difficulty] as we call it in and created a content that was significant to the question was an avatar or not [indiscernible] did it using an AI offering in the back end. See, the learner doesn't care that there's an offering tool in the back end. The end learner cares that the system is able to produce an educational material on the fly. And the way we do that is through AI offering, which is almost like a pass component that helps us create structured content without the need to have a bunch of instructional design production on it. So, [indiscernible] score that angle. Absolutely. And with that, I think I pass the call to it doesn't have any interest slide --

Good morning, everyone. My name is Nitin. I'm Chief Information Officer at Docebo. I'm going to talk a little bit today about winning the enterprise from a CIO's mindset. What does that look like when we interact with enterprises, when we interact with government and vertical sectors or areas that have high complexity on information security. And what does our play look like? So, when you look at today when Burke talked about it, Fabio did and everyone else, we have a great product. Then you go up in enterprise, we look at integration. We integrate across everything. Then you go scalability. We have a platform that can host thousands to millions of learners. But then there's an area of security and compliance that's usually nonnegotiable for certain companies. You go in there, and it really becomes a differentiating factor to say, how do we win market when we go to large enterprises that demand, the security and compliance to be robust and one of the top things for them. And we'll talk about it a little bit more in the next slide. But today, we've taken a 2-pronged approach at that. Number one is compliance and audits. We're talking to ISO 27000 GDPR, and we continue to invest on it. Two new areas that we have heavily invested on. One is FedRAMP moderate. It's a favorite topic for the group up here. We'll spend some more time talking about it. But I'll take a minute to explain where we are in our FedRAMP journey today and what does that look like today? So, we consider ourselves to be audit-ready. And what audit-ready means is our users are trained, our applications online at a government place, and we're interacting actively and working through agencies to make sure we meet all their needs. What I can say, everything is up and running at this point. We're audit-ready phase. The moment we sign some paperwork, we begin the work towards it and move towards audit and interacting with agencies from there. So, we're waiting on that stage right now. We'll spend more time. I'm sure there'll be Q&A questions so we can spend more time there. But the big thing to note up here is there is a journey from here to where we get authorized state. But there is a point in the middle of it where we call authority to operate. When we go in ATO mode, that means at that point, we can commercially then sign on and bring on other customers as well in the FedRAMP journey from us. And that's from the time we sign the time we got authorized from there. And the second part I'll talk about is HIPAA. HIPAA is something new for us. And really for HIPAA, our focus is removing any friction that exists for us when we go to market. We want to be able to interact with different verticals. We want to be able to interact with any customers that are highly regulated. That's the goal of it. And again, having this badge allows us to get through it much easier and friction. And when we look at [indiscernible] one is for us to always look at it and be what do we need to be in a secure manner, of course, meet the compliance needs. But the second one is how high should a bar be? What are we trying to really achieve? So, when you go and interact with large enterprises, so financial services, health sector, government, it's not about just the SOC 2. It's not about just FedRAMP. It actually is the bar is higher than that, which is like, can you meet requirements and set yourself to be different than everybody else, and that's how we think about it. SOC 2 and everything else is just a bare minimum. It allows you to get through the door and have a conversation. But the goal is really to be able to say, "Hey, what do you need from us to be at? Can we meet those requirements? And it's always about, yes. Yes, we can, and we set the bar to be really high, so we can interact with the largest enterprises out there. Gartner study up there, which I thought was fascinating. They put this [indiscernible] when enterprises look at software decisions, what do they look at? They look at it and say, some of the top 3 things are security, and I think it goes features and functionality. Interesting thing is this has been trending higher. And I actually expect it to be in the next couple of years, be the #1 thing. The changes that are happening with AI and other areas around the world, this is quickly going to be #1. Now, that number probably looks completely different than government. You go in a government space in a federal, that's probably like 98% or something like that because you're not able to talk to them unless you meet certain requirements. And with that is our approach to security. Our end of the day is for it to be a competitive advantage for us. It's a differentiator for us because when we talk to our customers and enterprises, it's not about the minimum. It's about we can set the bar to be dramatically higher on any of the requirements they may be. And those could be extremely something a smaller player can come in and suddenly meet those requirements. We have created the advantage where we stand out to be the differentiator in the market, and we are continuously investing towards it. I'll just leave it at that but the takeaway for me here would be, one, look at it as a competitive advantage when we go to the market because smaller players can't touch that. They can't come around that and meet those requirements from the market. Second thing is for our go-to-market teams, remove all the friction we can as much as possible when a customer is interacting with us, we can move through it super fast because we have done that. We've built the relationships and our bar is much higher. That's all. Thank you, everyone.

I guess now to the fun part. I'll spend some time on what the business has evolved. And I think this slide speaks -- it's a good segue in terms of what we've done since 2020. And I think it's a reflection point of who we were and where we've come over the years. So, it's pretty obvious. You can see what we've done on the free cash flow side on the top end. But I think what's more important to say is that as we moved upmarket, our ACV, this number that's on the screen is on a total basis. But as you folks know, last quarter, we reported $71,000 in gross ACV on a net new customer basis, which effectively is much higher than that number, too. But that speaks to the quality of the business that has moved upmarket over the past 3 years. There's another slide, next slide we'll kind of speak to some of those segments in that regard. But I think that move to upmarket is also important to recognize that we are in the early innings of this large opportunity, especially on the ACX side, which is largely greenfield as well as the large enterprises that are going through systemic shifts and the teams we talked about. But this slide, in a way, is more of a context of where we were and how far we've come. This, I think we wanted to show how the business has evolved since 2020 until the end of last year in terms of the mix of the business and where we actually are driving growth from. And I think it's pretty obvious on the slide. As you look at the enterprise segment, the large end of the market has moved significantly higher and it's almost 50% of the business we do on a total base of our ARR today. And what's also interesting, I would call out in terms of some themes we said that in our Q2 earnings call, our enterprise business is growing at a plus 30% rate this year. Our mid-market is close to 20% and our SMB business is growing roughly in line with CPI. And I think why that's important to call out is that we are seeing secular demand across various verticals and use cases that are driving this. The one number that's important to highlight is 70% of what we do in a given quarter for the last 7 quarters has been through net new customers coming through the door, which speaks to this fact that there is secular demand across various verticals and use cases that we serve and that opportunity is what also is driving even in this market, a continuous buying pattern across net new customers. Of course, there's other areas I'll speak to in terms of expansion of the motion, but I wanted to highlight that there is an underlying theme of secular demand that's coming through the net new customers where 70% of a number in a given quarter comes from net new buyers. In terms of the evolution of our customer base, this also speaks to the multiple buyer personas, the multiple departments and all the use cases that we serve in the organization. And I think it highlights that 57% of our customer base today is using us for 3 or more departments. And that also is an opportunity, if you ask me, which is the remaining 21 and 2 use case customers are also an opportunity for us to expand into their organizations, whether it's external learning, customer, partner, members, whether it's sales enablement, customer enablement, onboarding compliance. There's close to 6 or so buyer personas in an organization or even slightly higher sometimes in certain organizations that we can penetrate. The more we do that, it's very straightforward. We have an ability to expand into our base. We have an ability to retain that customer because we are more critical from an external use case audience that generates revenue or customer experience learning, I should say, going forward. But from a net retention and gross retention perspective, we've spoken about before, it is the best-in-class unit economics. And that effectively speaks to why the use cases are important to us and how much we penetrate into our customer base is an important stat here. There's work to do here from our perspective, but I think with the 4,000 or so customers we have today, there's an incredible opportunity for us to actually do an incrementally better job in serving much more departments than we do today. I'd like to summarize, of course, the last slide has some long-term guidance. But before we get to that, I think it would be helpful to summarize what is going to drive the growth of this business over the next few years. We spoke about the opportunity in the large enterprise. Large enterprises are focused on driving customer experience and removing the legacy platforms that are antiquated and moving to the modern infrastructure, which is Docebo. Our move into the large enterprise is combined with our ability to capture that 70% greenfield market in the customer experience space. That is, we spoke about a number of marquee customers, the cybersecurity company last quarter, a bunch of other customers that we spoke about, they are driving customer academies to drive either revenue generation, customer platform adoption or customer experience engines. And I think that market will continue to drive that secular demand across various verticals. I think the other theme on the CX side that's been playing out pretty interesting, as Alessio spoke about earlier in his slide was, the move to nearshoring, onshoring supply chain is creating a meaningful pipeline for us. I mean, we spoke about the one large homebuilder we won in the last quarter, a large public company in the U.S. and it also speaks about large enterprise. Their initial use case when we spoke to them was about all supply chain logistics management of a homebuilder, which has tremendously been challenged in the last 2 to 3 years. It is the same thing that's happening with some of our customers who are the chip manufacturing facilities and so on and so forth. So, nearshoring and onshoring is going to create an opportunity not only for customer experience platforms, but also supply chain enablement. The third column, I'm sure I want to spend some time on expansion in the government, and I'll give a brief update on it. This is an important and you're seeing this is the most important one pillar, which is calling out a vertical. We are fully focused on executing. The announcement we made a couple of weeks ago when we printed our Q2 results with Deloitte is a reflection of the partnerships and the deep bench that we have created here to support that large market. Working with our friends at Carahsoft, we will continue to have multiple partners in that regard to serve large RFPs that will be in the market. I think it is also important to note there's large buyers that are coming out of the market, including this morning, the VA, the RFP is out, and we'll give an update to that. VA is one of the biggest buyers of software in the world, and we certainly will participate and try and be part of that story, if we can. And I think Nitin spoke about the fact that what we've done in the process, but what's important to understand is that we are in active discussions with agencies. And I think it is worthwhile to know that we are in advanced discussions, and it's not in our control. Ultimately, it is between the federal PMO office and the agencies that we work with. And some of that work is dependent on their time lines versus us, but we are in multiple discussions where there are advanced discussions being had, and we'll give an update to the folks as we get through it. But these are very, I would say these are penultimate discussions that we're having with some of our agencies, and we'll see how that plays out. But we also want to be cautious to make sure that some of these things are not in our control. And as they plan out, we will certainly provide that update to the audience here. Land and expand is important. We serve over 3,900 customers today. We've launched new modules, we've got a new pricing, which allows us to actually also expand our customer base as well as serving multiple use cases. This is one area. I'm sure Alessio will speak more about it. We have recalibrated our organization to drive better expansion into the base of our customers. This, from a CFO's perspective, is the cheapest CAC expanding into our base will be an important focus as we move forward. And finally, I won't spend too much time on strategic partnerships, but I think what's important because Travis covered it earlier, what's important to call out here is that whether we resell, whether we work with system integrators, whether we embed in a platform. What's interesting from a sales and marketing perspective is that I've spoken this before, but it's worth highlighting is that as we move upmarket, our ability to work with system integrators means that we are efficient on a sales and marketing basis to drive a higher quality pipeline at an advanced stage where I'm sacrificing my professional services revenue, not paying upfront in terms of inbound or outbound investments. And I think that is driving one comment I'll make on the pipeline, which is consistent with what we said on the Q2 earnings call, we are seeing our mid- to large enterprise customers as well as government customers pipeline improve in a reasonably good way in the last quarter or so. And we're seeing some -- those are specific investments, whether it's system integrators and the partnerships we talked about, whether the big investments we made in outbound in 2022, and we doubled the size of that team to be very targeted to the verticals and the type of buyers we want to actually bring through that will buy Docebo and we typically make decisions. Combined with our inbound investments is what's driving some of the secular demand even in this quarter, we've seen some good pipeline buildup from where we were at the start of Q2. Which should also mean that as we come through the rest of the year, we should show some strength as we close 2024. Last slide and is an update similar to what we did last year, slightly revised numbers. But the way to think about this business is we are going to drive growth first, which is reflected in the sales and marketing and research and development numbers. We are holding those numbers relatively flat. There is some efficiency over the long term that you will see come through sales and marketing, but we are going to continue to invest from an R&D perspective to drive innovation, platform stability, platform security and win the market share of our large enterprise, mid- to large enterprise customers as well as government. I think it is an important time in the company's where we are at this stage of the company that as we look at the investments we're making from an AI perspective, platform security stability, all the modules, we are going to double down on taking market share, not only in the greenfield opportunities but go after the legacy players that are now certainly creating an opportunity for us. But we can do all of that because of the discipline we've shown in the past few years and in the last few quarters to drive free cash flow and have a healthy business where we can now reinvest that in platforms capabilities as well as partnerships. And as we move forward, R&D will continue to be one of those. The gift that's going to keep giving is straightforward. It's G&A. I always say this, it's a simple exercise in life. 81% gross margin business. If we're not going to compromise any investments in R&D or sales and marketing, we are going to drive that to drive growth. But if you look at our business today at close to 17% free cash flow and if you look at our G&A, the math is simple. For this business to deliver another 5-or-so percent in G&A operating leverage, the math gets you to a plus 20% free cash flow business. And that is a natural operating leverage that is coming without sacrificing growth investments. I don't think people appreciate the fact that we are not trying to -- and I get this question a lot, we are not going to ever distract our investments that will drive growth, and that is the primary focus for us. But what you're getting through this ecosystem is a beautiful 81% gross margin business that delivers free cash flow because we've shown investments in technology and productivity through our G&A, HR, finance functions requires -- for the last 7 quarters, my G&A has been held relatively flat. So, the math does the work itself. Long-term goal is to remain a Rule of 40 company with growth first mindset and balancing that with scaling free cash flow contribution. I'm a bit cheeky here using free cash flow. Our Board and the leadership team looks at free cash flow and the free cash flow conversion to EBITDA as a better measure. Our free cash flow conversion is 125% from EBITDA, which is important to note as well as one of the fact that we are also mindful on a share-based comp basis. I don't have that on the slide, but you can expect that our share-based comp as a percentage of revenue will remain relatively consistent in the past, which is around 3%. True dilution of that share-based comp is under 1%. And we will continue to the extent that there is any dilution from a share-based comp perspective, we will buy back, back stock to neutralize any impact to shareholders. And that wraps up our presentation, and we'll be having Giuseppe, our Head of AI; Harvey, VP of Gov as well as Greg Swift, Chief Sales Officer. They're going to be on stage for Q&A just momentarily, and we'll start Q&A in 10 seconds or 20 seconds.

Richard Tse from National Bank Financial. I just wondered if you could maybe elaborate on sort of the 3 pricing packages. You didn't touch on that today and how that sort of impacts ACV and how these sort of new products are going to roll into that in terms of like the step function of growth here?

Yes. Consistent with what we said in Q2, so, we rolled out our pricing historically, just some context for folks that are listening, historically, the company was priced on an a la carte basis. We did a lot of work in the past 18 months. We looked at our competitive landscape. We looked at how we sold historically. We looked at how our customers want to look at the products and capabilities. Ultimately, what we've done is move forward with pricing that is more a core bundle and key capabilities that are beyond the bundle. And what that enables is for us to actually provide the customer a bundle that solves the problem that they're trying to solve from a use case or an overall enterprise perspective. And so, what we are seeing certainly, one is, you should expect that ACV as we track it in the next 12, 18 months, should move up. Of course, this has gone live on April 1. So, from a net new customer basis, you're not going to -- those quotes will start realizing towards Q4 of this year, early next year because it's a 6- to 9-month deal cycle. But we expect that you should at least see a reasonable 5% to 10% ACV growth depending on the use cases. But we'll track that. That is our expectation. It's certainly important for us to continue to track that. What is interesting that I certainly saw as a great indicator off the gate on between April 1 and as we close Q2 was that all of our customers that were already in the pipeline who had the legacy pricing quotes in play, our sales team had over 25% of those quotes were converted to the new pricing because what that really tells you is that the sellers are now used to driving value in the conversation. And because of the new pricing, you're talking the value of the platform that we bring to the customer, which enables them to accelerate the deal cycle and also from an objection handling perspective, it makes the discussion much more value-driven. And I certainly thought that was an important number to think about as a lot of the legacy quotes that were out there were converted to the new pricing. So, we'll give more updates as we get into early next year, but certainly positive signs out of the gate.

Rob Young, Canaccord Genuity. I wanted to dig into the TAM number you provided for the U.S. Fed $2.7 billion, I think flashed up there, Fed and SLED. And then I think you broke the percentage, $1.2 billion. Last year, you gave some annual figures. Maybe you could just bridge those. Is that effectively the same that you gave last year or this year?

No. So, this number is total spend, and Harvey, feel free to come in. This number is total spend in the U.S. federal and SLED market in learning management solutions that are driven for employee experience only. That's an important call out. This does not include customer experience because it's hard to track in the database of the government. So, it's a smaller subset to start, so we think the market is larger than what we presented. And last year, we spoke about -- that's the number, but the net new budget that was allocated. So, the government has a budget and then they get the net new allocation was $300 million in the last 3 years, net new on top of that TAM number.

And then maybe just a second part to that would be that, maybe you can add some color around the presence of on-prem, maybe the older legacy systems that are sitting out there. Is there a burning platform to get off of those and move into the cloud? Just trying to think of how the pipe might develop. Is there a front-end surge? Or is it something that develops slowly over 5 years? Is there some burning platform to get off of these old systems because of end-of-life or end-of-support? Or any color around how that might progress?

Yes. So, can you hear me okay? The federal government has, if you look, a cloud-first policy. So, there are a lot of on-prem solutions that the government is trying to get off of and go to the cloud. What's drugged that out or made that elongated process are things like the FedRAMP certification process that you'll see, right? So, Google, AWS, Microsoft, all had to go through the FedRAMP certification processes to get themselves prepared to be able to host these solutions in the cloud. And then the second thing comes is the budgetary cycles, right? So, when government comes up with an idea, especially the federal government says, "Hey, we're going to make this a priority or an initiative like post-quantum encryption or Zero Trust architecture." It generally takes 2 budget cycles in order for agencies to start to see, hey, we've funded for it and now here comes the budget from Congress for us to be able to enact these things. So, I don't know if that answers your question, but there's generally a lag there. And so, we are starting to see, your Oracle is a great example. They have an on-premise version. There are some RFPs that we're starting to see pop up out there that they're wanting to go away from Oracle. The other interesting one that we're seeing is open source. So, the government early on jumped on open source and what they realized was is, hey, yes, the open source piece is cheap from a software perspective or inexpensive from a software perspective, but to deploy it and to manage it requires a lot of services and it ends up being some sort of one-off solution that ends up costing us more over the life of the solution than it does to buy it. And so, now we're starting to see RFPs coming out because the infrastructure is there that says we want product. So, I don't know if that gives you some more color.

Harvey, you may want to comment on the VA as well if you want this morning.

I'll pass the microphone back in a second. I was going to add, and you can add more color on top of this as well that to the point of legacy players in government, one of our strategies is also to continue to develop partnerships with companies that have already been operating in that environment that have actually portfolios of accounts and not just think about the opportunity in terms of net new, but also think about the opportunity in terms of organizations that are already actively working with our partners that have an interest in switching at the right time, the business of those agencies or onto us. That's true for the recent signing of Deloitte that has a significant penetration in the government space, both SLED and Fed. And it's true for some other partners that used to or are currently supporting other LMSs, but recognize that our technology is superior. And so, at the right time of the renewal cycles, we already will have an operational foot in the door in some of these organizations that we may not know yet, but they know of us because of our partnership work.

And I think one point, Harvey, before we speak on Harvey, is that to the extent that we get to FedRAMP certification, we will be 1 of 2 companies in this market that are serving the space. Of course, Cornerstone is the other provider there. So, I think it is important to call out that it is a hard market to get in. In the software world, I think there's only 200 or so companies or above that are in total FedRAMP certified. So, that is also going to be important that the market is very limited in terms of the players that are playing there.

Yes. Nitin made an earlier comment, I'll kind of piggyback off of that we talked about when you look at sort of the hierarchy of needs, it was going to be price and then security. And then -- so, I would argue in government, it's security above price, right? So, if you go to market and there's only one vendor that's FedRAMP certified or has the certifications that you need, as a taxpayer, I hate that, but if somebody sells to the government, I kind of enjoy that. So, this is going to be a true differentiator for us as an organization.

Ryan MacDonald with Needham. I wanted to start on the TAM slide around the commercial opportunity. You had sort of employee replacement opportunity, customer experience more greenfield. As you think about the SI channel partners you have with Deloitte and Accenture on the commercial side, within the pipeline that are helping you build, where are they bringing you more opportunities? And then how are you sort of expanding that conversation into the multiproduct employee experience and customer experience use case?

Yes. I'll start that, and I think Travis and Alessio you can jump in. I think from an SI perspective is fascinating from my point of view. So, you certainly have the traditional large Fortune 500 companies that will have gone through systemic shifts in their organization are going to work with large SIs because they're going to do the change management, the managed services. It's not just the software that's a big part of it. It's very similar on the government side, which we talked about Deloitte as an example. Deloitte has a capability. I mean, software is a subcomponent of a big set multiyear change management investments in technology, the work that Deloitte has 15,000 GPS employees, government practice employees that work specifically in their GPS practice. What they can do is they can do all the managed services. They can do all the implementation, they can continue to support the customer. And what you can imagine there is, of course, that's a much material part of how they make their revenue. So, that's like your typical employee experience market where either it's the large organizations, mid- to large organizations as well as government that you see. What I think is very interesting, at least from a number of customers that are also here, I'm sure prospects too, that you may have made, the example I'll use is Hockey USA. We work with our partners at Deloitte around that. What's interesting there also is, we are not just an LMS or a learning management platform and knowledge engine platform for their organizations. We are the core ERP for a Hockey USA. And I would encourage you to look at the article from the CFO. We spoke about it why? Because effectively, Hockey USA is 1 million members across the U.S., and they have 17 different jurisdictions with multiple use cases and how they charge their customers to our platform. End-to-end, they're going to use us as the biggest investment in software they've ever made. What I'm trying to say is there's a lot of member network platforms from an SI perspective, where this is also a big change that's happening where we continuously add all these member network platforms that are driving us as the ERP, which is an LMS effectively in their middle. And that's where the system integrators are doing an incredible amount of work to actually shift that organization. So, I will say that the opportunities we see are reasonably balanced between the external audiences and CX learning and EX Learning. I'll let Alessio and Travis comment.

Yes, I would just add that I think the beauty of working with the Deloitte or Accenture is that they are very industry-focused. And so, our teams and our internal champions, we're working a lot with them right now on enabling. So, if they're going to their retail business, it's not just about, hey, this is a learning for your employees. It's like, no, there's like these sort of multitude of use cases. So, I think from that standpoint, there is definitely education within the businesses that a lot of times people hear all messages think about internal employees, compliance training, but it's really expanding that conversation. So, I think because they are industry aligned, it actually allows us to make very like specific messaging for each industry team, both across all the globe.

And I think the platform side, just quickly, just before Alessio comes in, is that federated concept is important because if you have a problem statement, so let's just take -- I know there's an example that there's opportunities where school safety and because some of the stuff around security of schools is important. If you do it for one state, Deloitte can actually do that at a federate level for other states. So, it's a pretty easy spin-off for them to do multiple, and that's an efficiency for them, too.

I don't have a ton to add. I think the most important concept have been shared. I would perhaps underscore the fact that SIs themselves because the CX posture of learning platforms is a relatively new space. SIs themselves tend to have developed practices that over time have focused more on the internal side. What we've witnessed, for example, with the, what do we say publicly, Tech 5 company that starts with the G and ends with E, the SI has been able to support them on both the internal and external use case. But historically, we have seen them more involved on complex internal use cases. So, as the CX posture of companies continues to evolve, we expect the practices of these consulting companies to focus more and more. We're in a very, very interesting time right now with AI blending into this opportunity of customer experience and knowledge, I feel like we're uniquely positioned to capture secular trends, and we are at the very top of choice of these companies. So, it's extremely exciting.

Maybe just one on the product side since you mentioned AI. As we [indiscernible] it seemed like there's a lot of enthusiasm for the AI authoring tool and that impending launch here. But as we -- it seems like excitements around the full automation content generation side, and it seems like that to maybe replace some of the incumbent vendors. Sort of where are we at in -- when we can get to that sort of ideal state of what you showed in the demo in sort of a general availability sort of full launch game?

We spoke about the 5 degrees of autonomous learning earlier yesterday. And I would say that AI offering, we prioritized that development, and we really concentrated our resources on it because as stated before, it's such a prerequisite towards many other derivative such as the learning automation concept. I don't know that I would characterize learning automation as a needed requirement to displace the antiquated and/or traditional platforms because they're so antiquated that, that is really a very forward concept. But for sure, in order to stay relevant in the minds, we want our brand to be seen as the absolute intersection between reliability, security and innovation. We want organizations in the world to think of Docebo is safe, stable and ahead of others. And frankly, it's not easy to do because you're usually either on the left side or on the right side, it's difficult to meet all those requirements. Automation is definitely tilting towards the highly innovative concept in a solid way. What I don't want to do is to rush, rush, rush, change priorities, make it happen in 1 quarter and leave behind all the things that our customers are asking now that are more centered in their immediate requirements. Is it something that belongs to our vision? Absolutely. Do I think that, that is going to make people go crazy and the industry is going to really think of us in a further more excited way? Absolutely. But what we're not going to do is to drop everything and go after the next shiny thing. And by the way, I don't think automation is shiny. I think it's going to be saving thousands of hours of work to people. But I think you know what I mean. It's important to stay grounded in the reality and work towards the future in a responsible way.

You made some good progress moving to the enterprise. Obviously, from a technology perspective, the integrations are there. You've got some big channel partners. What's left to do on the enterprise side? Do you think there are some factors that still need to be done or built out in order to help accelerate that? And what are they?

There's a tremendous amount of opportunity. Greg, would you want to take a stab at it?

Yes. I mean, I think as has been covered earlier, I mean, we've made a lot of changes in the organization to truly become an enterprise-focused company. So, key is product, and we're at commercial scale. We've got large organizations with 10 million-plus users loaded in the system, a multitude CX, EX use cases. So, from a product standpoint, there's always gaps, areas of improvement that we've identified specifically around verticals that we're prioritizing. But I would suggest we're there, especially as Nitin had covered earlier, security, privacy, compliance, which are key to those types of organizations. I think some of the changes that we've made organizationally are now allowing us to truly drive the significant enterprise growth. Unfortunately, we can only put a limited number of the logos up, but we have had a solid year so far. I have to be careful in what I say. We've got a fantastic pipeline with Fortune 500 organizations. I think from a marketing perspective, we're truly aligned now to market ourselves based on all these wonderful examples and qualifications and skills that we have. We've got a robust business development organization that directly and strategically targets that market segment. And then the sales organization, we've changed the pedigree. It is a different sale. We grew up in the mid-market. We've brought, basically rebuilt the enterprise segment sales organization this year to focus on individuals that have sold enterprise as it is a different set of unique challenges, shall we say. So, I'm very confident that we're in a great place. That's bolstered by the numbers and logos we're driving, and we'll continue to make some tweaks and improvements. But will be a solid balance of the year.

No, no, I already have a microphone. I forgot. I would add 2 things. Look, the statement, it takes a village to build a great company is true. And it takes 3/4 of the village to improve in any specific initiative that is significant like enterprise refinement, improvement maturity model. It touches many components of the company. If you zoom out and look at the company from outside, it touches the way we brand and position ourselves and message. It touches the way we talk about our pricing and structure pricing. It touches the way we implement customers and manage the overall post-sale experience of our customers, interfacing with and facilitating with partners. It touches so many things. One area that I'm extremely passionate about that I talk to our team a lot. And these conversations have, for sure, become more and more and more deep as I took a new role already in the interim phase, but they will become more pervasive in the coming months is our attitude as a company towards the concept of the customer. I'm a firm believer that especially at the size in which we are, having a posture where the company thinks of our customers as our biggest investment that we deeply care about them, that we make them feel loved, that we make them feel unique, that we surprise them and that we have sometimes a reasonable hospitality logic towards them where we shock them about things that we can do for them when they don't expect it. I want the customers to think of Docebo as this progressive company on the product side, no doubt. But when they talk about us to others, I want them to express a brand that takes care of them and make sure they are successful. I think this is a little bit of a perhaps a maturity model, a focus away from just the technology on to the customer where we have more opportunity. And I think in the enterprise space, it matters a lot because the longevity and depth of investments relates a lot to how deep you are in those organizations. I sat with Google yesterday, at a 30 minutes delightful conversation, and I learned what an incredible job the team has done in the months past to develop those relationships. I mean, it was just really delightful to hear them say the things that I heard. And it's not because only we did a great implementation, but it's because we cultivated the account in a manner that [indiscernible] years ago, we wouldn't have done because we were so the next new feature and losing a little bit sometimes sight of the importance of those relationships.

That definitely makes sense and it's consistent with the feedback I'm hearing from your customers. So it seems like it's paying off. But you also made some pretty big changes like you're alluding to with the sales or for enterprise. Can you dig into what some of that is? You talked about the pedigree, also customer success was built out. Can you give us some more details on exactly what you've done there? And then maybe some of the lead time because we know enterprise sales does take a little bit longer, but you're hiring experienced people, so, how long to ramp those guys up and then the sales cycle on top of that?

And then just for time check, we're going to wrap in 8 minutes. There's some meetings customers. I'll stick around, but I think if we can do Josh and just that table afterwards, and we'll stick around.

I'll just say one thing only and then pass the baton to Greg. Yesterday, again, referring to a key customer meeting, they made a comment about that actually. They said, "Hey, I just wanted to give you feedback and let you know that the fact that now you are one of the few vendors that we work with in the past few years where you've given us continuity after the sales process that the person we work with presales and post sales for a certain amount of time has been the same individual. That for us is critical because we didn't have to reexplain the whole thing. We didn't have to rebuild the relationship. We had already our advocate in the company. And that is one of the most significant changes we've made. But Greg leading a lot of this and can speak to that.

Yes. I mean I should clarify because a lot of the pieces were in place. I mean, I was referring to the sales organization itself. But as we know, it starts well upstream or upmarket from that as we noted with marketing was aligned, business development. So, the engine was built. So, it's just making sure -- I'm a Canadian, so, the ice is set. Now it's putting the right team on the ice. So, pipeline is robust. I can't get into too much detail, but we're in a good position. So, it's certainly not a rebuild. We've just upskilled, up-leveled the enterprise sales organization in North America specifically. And, yes, I assumed the revenue organization, I guess, 4 months ago, and I've got a background of both software and services. And to me, I think as Alessio noted, it's just a point of maturity for us to make sure that we look at the customer journey and we look at the significant phases of the life cycle and make sure that we've got people process technologies aligned. So, we've made some, again, people process technology changes and customer support. And now, it's my responsibility to own not only bringing customers into the organization, making sure they're enabled effectively that we help sustain and most importantly, grow and innovate. And I think now across the organization, we've got those changes in place we're in a good position.

Josh Baer with Morgan Stanley. Question is on consolidation of learning spend, potential to win some of that just given the number of learning solutions out there. I think you're in a really good place and also that relates to replacing legacy vendors. So, I was hoping you could touch on that. But then sticking to that theme of consolidation, moving upmarket to the enterprise, I was also hoping that you could touch on how you think about Workday as a competitor just around their efforts that they're making around learning and skills, the potential for them to be a consolidator, just given their place in enterprises across HCM.

I'll take a stab. So, in terms of consolidation, consolidation is mentioned in our surveys as a top 5 appreciation areas of our customers, meaning when we ask customers what they like the most about Docebo is the ability to manage and aggregate multiple assets into one platform. So, we know that we have done something right in that area, but we agree with you that the opportunity is significant. Then we've asked ourselves, how can we be better at that? How can we encourage organizations to actually insist on the process of consolidation, the ones that haven't done it yet. We're taking and we will be taking even more initiatives to facilitate that. One of the things that comes of immediate attention is removing friction. The friction points that lead an organization to being skeptical about that. So, if you go into a company that has more than one LMS, what are those elements of skepticism? Usually, they are 2. They are in the area of governance, meaning [indiscernible] and the second one is in the area of data and migration. Governance requires the relationship work that we do by entering in the company through a department and working at the account to understand who are the different players and understanding if there is a centralized governance or if it's really hub and spoke, where there are multiple owners that need to be taken at the table. This process can take from months to more time, depending on the complexity and size of the organization. On the data migration side, that is something that we can control and do. We can target certain technologies that are more pervasive as far as incumbents and make that process less painful. It is a very typical play in fragmented markets where you have a dominant player that knows how to migrate customers from one platform to another. That's what we will be focusing to ease that transition, ease that friction point and be able to say, do you have technology, A, we understand you don't like it. And we understand you're a little bit scared because you have 10 years of history on it of transcripts, 20,000 learning objects, 150,000 enrollments, all this audit material. We've done it for 10 other customers. Let us and let us tell you how these 3 references can speak to that exactly. That helps a lot. That eases that level of concern that many organizations have. I think there was a second part of your question.

I want to just add something before you come to Workday. A couple of points just quickly, sorry, on that point is one of the ways to also think about and my friend here, Nitin will speak to it is when you sell into these organizations, typically, what will happen also if you think about the large homebuilder, it was both an HR use case as well as supply chain. So, our ability to use the -- if I go to the CIO, our ability to say, well, we're also going to solve your supply chain, well, why can't displace you on the legacy platform at the same time is an opportunity for us to utilize that. And the other thing I will say that on the product side, it is important to call out, there are certain verticals we clearly have identified in the past year or so where we are targeting. If you think about the large FIs that we signed, we are going to target certain capabilities that will also unlock our ability to penetrate further into those verticals from a product perspective. So, as you think about the buyer as well and put my friend, the CIO hat on, the consolidation of the tech stack is real, especially when I'm leading from a more integral CX experience platform, and I'm asking the question, why you actually need and why do you need a legacy HCM, HRS platform? And I'll set up Workday for you, but the challenge is, the moment you grow out of the EX needs on onboarding, you're going to be disqualified from a bit and so, that's where we have the advantage from a CX, EX combination. Sorry, Alessio?

No, it's great. It's great. I think on the Workday topic, look, I can only speak by the data and the experience that we've had and Greg and others can chime in. But when we look at specifically the cohort of customers that we've either lost that net new and/or leverage an existing Workday module, what we've seen is that over a period of time, they have manifested their desire to adopt a different strategy. I'd say the point of growing our story towards more than just an LMS point solution is also to differentiate ourselves further from the modular story of Workday, which will do the bare minimum a customer may have. But when the complexity is on the table, learning complexity, educational complexity, our customers tell us that they want a different experience. So, we don't necessarily view that as one of our top threats.

Yes. I'm just being mindful of time, we're certainly going to take one more question and some of the management team will stay behind for questions. We'll just have to stop recording after the last question, please.

James Rush from Craig-Hallum. You mentioned making some changes to improve net expansion. Could you provide some detail on what those changes are, kind of maybe when those could show up in improving NRR? And then if you could maybe put some numbers around sort of what the overall opportunity could be within the existing base today, that would be helpful.

Yes, I think it's a good question. I think the way I think about the expansion side, and Greg can speak to some of the motion changes, but there're 3 or 4 ways to think about expansion. One is your typical -- a customer comes from an external CX audience, large enterprise starts small and has seat expansion. The second way to think about it is that we work our way through the logos that we have and win sister companies and others. And the third element that's important from an expansion point of view is our ability to expand the products and capabilities which we have within the base. I think with the new pricing changes as well as the new modules that we've launched this week and in the coming months, there is certainly, as I say, enough meat on the table for us to ensure that we can enhance and add those incremental capabilities to our current customer base. And so, between those 3 areas and how we positioned, I'm sure Greg will speak to how we position our account executives and account managers to actually stay with the customer for a long term, we are going to focus on this as the 3,900 customers that we have today, if we just simply execute on those verticals and the capabilities we can provide them, this is an important pillar of growth for us and an area of improvement.

Yes. I think I know we're short on time. But I think as Alessio noted, it's truly becoming a customer-first organization. And as I said to my team, the renewal starts the day the contract is signed and aligning an organization behind that. So, as Sukaran noted, some of the changes we've made, we have, especially in the enterprise and strategic level, where global account directors stay with an account. I mean those sales cycles are typically a year, 1.5 years. You build a lot of relationships. You understand an organization, their needs, requirements. So, making sure we've got that continuity of coverage from an account executive perspective. We've also streamlined the process and worked very closely with customer support, I should say, and product to make sure between customer success, customer support and product that the customer is the center of that triangle. So, streamlining ticketing, responsiveness. And other key programs like executive sponsorship. So, again, certainly in the major and enterprise realm, making sure our executives are interfacing with their executives. The other piece that we've aligned along is becoming a value-based sales organization with value engineering. We've done a lot of work there. I could speak for hours on that. But how do we create value for our customers and measure? How do we ensure that they have reached those goals, that they have recognized that value? And then most importantly, how do we continue through the customer journey to ensure that they optimize the value? So, hopefully, very high level at this juncture, but --

think that's important to call out. I think value engineering, just from my perspective as CFO is that the more and more, we talk to customers, if you think about the learning practice, historically, the practitioners have needed help to articulate the story, especially on the employee experience side of what value you drive. And our value engineering team, both on the CX learning and the EX-learning is enabling those customers to have those conversations themselves at the leadership level. And I think that's an important part of how we support them through our value engineering team. And most of that is KPI-driven outcomes subsequent to going live with the customer. And I think that's where we're focusing on as we think about the expansion side of the story is to drive that value conversation within those organizations around ROI-specific KPIs.

And we have a beautiful free cash flow, and we have a continuously more clear corporate strategy. You've seen some of it this morning. We believe that by adding the right assets at the right time, at the right value, the right assets with the right profile, we can use those assets, those technologies as very good Trojan horses inside organizations, eventually having a multiproduct capability is going to be critical to continue to grow the company, and that will lead itself to improved cross-selling across capabilities and result in better NRR.

We're going to stop the recording at this stage, folks, but some of the management team will stay behind for questions still. So, a few of us have to go for customer, but I'm around for a while. Thank you.