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Small-Cap Confidential
Undiscovered stocks that can make you rich

May 10, 2024

Shares of Docebo (DCBO) opened lower this morning after the company delivered a Q1 beat after the close yesterday but lowered full-year guidance.

Docebo (DCBO) Reports

Shares of Docebo (DCBO) opened lower this morning after the company delivered a Q1 beat after the close yesterday but lowered full-year guidance. During this earnings season we’ve seen a pattern emerge where if a company doesn’t deliver a clean beat, shares get pounded. In a lot of cases those stocks have begun to come back (when the story isn’t totally wiped out) and I think this will be the case with DCBO, so keeping at buy.

The fly in the ointment impacting guidance is (1) a significant customer (nine-year relationship with +$1 million in annualized recurring revenue) loss due to M&A (acquirer has its own LMS system), (2) a little softness in the small- and mid-sized customer segment (enterprise and government space still strong) and (3) foreign exchange fluctuations.

Aside from these headwinds, things are still looking good with Docebo. One of the big attractions here is that Docebo is delivering profitable growth and significant FCF. Nothing on that front is changing.

We’ll adapt Morgan Stanley’s view that this is a “speed bump” and that the big-picture investment thesis holds.


Revenue grew 24% to $51.4 million ($300,000 beat) while EPS of $0.23 grew from $0.09 in the year-ago quarter and beat by $0.06. Free Cash Flow (FCF) of $9.2 million beat by about $2 million. Annualized Recurring Revenue (ARR) in Q1 was up 22% to $201 million but was about $3 million shy of expectations (partly from the lost customer).

Turning to guidance, revenue is now seen up 14.5% to 18.5% versus consensus of 22%. On this morning’s conference call (8:00 a.m.ET) management said the reduction is allocated roughly one-third each to the lost customer, macro/SMB and foreign exchange. Despite the revenue outlook, EBITDA margin guidance is steady at about 15%, implying a 6% improvement over last year. Buy the dip. 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.