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Small-Cap Confidential
Undiscovered stocks that can make you rich

February 27, 2024

EverQuote (EVER) and TransMedics (TMDX) Deliver

Docebo (DCBO) Delivers In Q4

At 6:30 AM ET this morning Docebo (DCBO) dropped its Q4 earnings press release. The company operates a learning platform for both internal and external learners and, yes, AI is mentioned in the first sentence of the press release!

The company’s results beat expectations.

Revenue was up 27% to $49.3 million (beating by almost $1 million) while EPS was $0.26, up from $0.10 in the year-ago quarter and versus expectations of just $0.13. The quarter wraps up a year of 27% revenue growth and EPS of $0.65, a huge jump from $0.07 in 2022.

Management guided for Q1 2024 revenue of $51 - $51.3 million (roughly in line with expectations and implying growth of about 23.3%) and gross profit margins consistent with Q4 (around 81% to 85%).

Other nuggets from the press release:

  • Free Cash Flow of $7.0 million (14.2% of total revenue compared to 5.1% of total revenue in the same quarter last year). This is good.
  • Net Dollar Retention Rate (NRR) at end of year of 104% compared to 109% at end of 2022. Down slightly, but not a big concern.
  • Ended the year with 3,759 customers, up 365 (10.8%) from end of 2022.
  • Average Contract Value (ACV) up 11.7% to $51,689. This is encouraging.
  • New deals in Q4 include a Big 4 U.S.-based bank, Special Olympics, Major League Baseball (MLB) and MLB Players Association (to help players lead healthy and productive lives off the field), Pirelli (tire manufacturer), Maison Valentino (Italian fashion brand), Texas County District and Retirement System, Bojangles (restaurant chain) and Stanley Black & Decker.

As of 7:00 AM ET shares of DCBO are indicated to open higher but take that with a grain of salt. We’ll need the stock to actually begin trading before we really know where it’ll go. I think this result, and guidance, are very good and confirm that Docebo is what we thought, a specialty software company accelerating revenue growth from mid-teens to 20% plus with a big jump in profitability to boot. It’s also a stock that nobody knows about! That should be good, but also means shares will swing around a bit.

Keeping at buy and looking forward to the conference call at 8:00 AM ET for more details. BUY

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Tyler Laundon is chief analyst of the limited-subscription advisory, Cabot Small-Cap Confidential and grand slam advisory Cabot Early Opportunities. He has spent his entire career managing, consulting and analyzing start-up and small-cap companies. His hands-on experience has taught Tyler that the development of a superior business model is the biggest factor in determining a company’s long-term success. Accordingly, his research focuses on assessing the viability of management’s growth strategies, trends in addressable markets and achievement of major developmental milestones.