Executive Summary / Key Takeaways

• Docebo Inc. (NASDAQ:DCBO) is rapidly transforming into an AI-first learning platform, moving beyond its traditional LMS roots to offer hyper-personalized, automated, and measurable learning experiences, positioning itself to capture a significant share of the evolving corporate learning market.
• The company's strategic focus on enterprise and mid-market segments, particularly external customer/partner experience (CX) use cases, is driving strong growth, with the enterprise segment growing 25% in Q3 2024 and new logo Average Contract Value (ACV) reaching $83,000 in Q4 2024.
• Docebo's early FedRAMP Moderate Authorization in May 2025 unlocks a substantial $2.7 billion U.S. government market, representing a significant long-term growth opportunity, with meaningful revenue contributions anticipated by H2 2026.
• Key technological differentiators like the Harmony Agentic platform and AI Authoring are designed to automate administrative tasks, streamline content creation, and deliver a learner-first experience, enhancing Docebo's competitive moat and driving customer stickiness.
• Despite macroeconomic uncertainties leading to elongated enterprise sales cycles and the planned loss of the AWS Skills Builder contract in late 2025, Docebo maintains a strong financial position with healthy cash flow, no debt, and a disciplined capital allocation strategy focused on internal investments and opportunistic share buybacks.

Docebo's AI-First Transformation: Reshaping Enterprise Learning

Docebo Inc. (NASDAQ:DCBO), founded in 2005, has evolved from a pioneering enterprise Learning Management System (LMS) provider into a formidable AI-first learning platform, strategically positioned to address the dynamic needs of modern workforces and external ecosystems. This transformation began around 2015 when Docebo astutely recognized the burgeoning demand for LMS solutions beyond internal employee training, leading to significant investments in Customer Experience (CX) capabilities. This foresight allowed the company to carve out a unique niche, capturing market share that many traditional LMS players initially overlooked. Today, Docebo's overarching strategy is to become an AI-first learning platform and ecosystem that delivers hyper-personalized, automated, highly-experiential, and measurable learning at scale. The company aims to expand its user base to 100 million over the next five years, driven by continuous innovation and strategic market penetration.

The industry landscape is undergoing a profound shift, with approximately 40% of the global workforce and their skills projected to change dramatically over the next five years. This "workforce transformation" creates an urgent need for organizations to upskill and reskill their talent effectively, often lacking the necessary tools to identify and close skill gaps. Docebo's AI-first approach directly addresses this imperative, positioning its platform as a critical enabler for corporate agility and sustained growth.

Technological Edge: The Harmony of AI-Driven Learning

Docebo's core technological differentiation lies in its aggressive integration of artificial intelligence, particularly through its Harmony Agentic platform and AI Authoring capabilities. Launched in July 2025, Harmony represents a significant leap forward, initially offering modern in-platform search capabilities that allow users to ask natural language questions and receive summarized answers, akin to interacting with advanced conversational AI. This feature alone enhances user engagement and accelerates knowledge retrieval.

The long-term vision for Harmony is far more ambitious: to become an "agent of agents" that automates administrative tasks, facilitates content creation, and performs actions at speeds 10, 20, or even 100 times faster than human capabilities. This translates into tangible benefits for customers by drastically reducing the time and effort spent on tedious, repetitive tasks, allowing learning administrators to focus on more strategic, qualitative aspects of their work. Docebo's CEO, Alessio Artuffo, envisions Harmony enabling a "learner-first model," shifting control of learning and upskilling directly into the hands of the learner, a fundamental change from traditional instructor-led models.

Another critical innovation is AI Authoring, set to launch in late October 2024. This capability, an evolution of Docebo Shape, had the most participated beta program in the company's history, underscoring its high demand. AI Authoring is designed to streamline and automate content production, enabling customers to create highly-personalized videos in multiple languages with a few clicks, potentially cutting content creation costs by "1000% in certain use cases" and demonstrating ROI in minutes. This capability is pivotal for Docebo's future vision, acting as the "glue" that connects corporate knowledge to structured learning and instruction.

Docebo's strategy for these AI innovations is to first deliver significant value to customers, with monetization to follow. The company has made the strategic choice to offer Creati and Harmony to as many customers as possible without immediate upsell, aiming to drive adoption and gather feedback. Initial monetization strategies, such as a credit-based system for the AI video presenter, are being introduced where logical. These technological advancements are not merely features; they are foundational to Docebo's competitive moat, driving higher customer stickiness, enabling new revenue streams, and solidifying its market positioning as an AI-first leader.

Competitive Landscape and Strategic Positioning

Docebo operates in a dynamic LMS market, competing with both specialized cloud-based providers and larger human capital management (HCM) suites. Key direct competitors include Cornerstone OnDemand , Adobe (via Adobe Learning Manager), and SAP (via SAP SuccessFactors). Docebo's competitive standing is characterized by its agility and AI innovation, which often provide an edge over rivals.

Compared to Cornerstone OnDemand (CSOD), Docebo's AI-driven features, such as Harmony and AI Authoring, offer a more specialized focus on modern, adaptive learning experiences. Docebo's platform is often perceived as more intuitive and faster to deploy, particularly in content personalization. While CSOD benefits from a broader talent ecosystem and comprehensive HR integrations, Docebo's rapid innovation speed and user engagement in learning-specific customization give it a qualitative advantage.

Against Adobe (ADBE) and its Adobe Learning Manager, Docebo's specialized LMS tools, like Docebo Content, offer greater ease of use for non-technical users, contrasting with Adobe's feature-rich but potentially complex platform. Docebo's strategy prioritizes affordability and rapid deployment, while Adobe leverages its extensive creative ecosystem. Docebo's AI-focused tools deliver notably faster content creation and analytics, differentiating it from Adobe's broader digital tools.

In comparison to SAP (SAP) and its SAP SuccessFactors, Docebo's offerings are more agile and user-centric, providing greater flexibility in learning delivery. While SAP excels in enterprise-scale solutions and deep ERP integrations, Docebo's focus on AI-driven personalization and external workforce training exploits SAP's relative rigidity. Docebo leads in innovation speed and ease of implementation, though it may lag in scalability for the largest enterprises where SAP has a strong foothold.

Docebo also faces indirect competition from open-source platforms like Moodle and in-house developed solutions. However, the company's ability to displace existing in-house systems, as demonstrated by a "Big 5" tech customer moving to Docebo for a customer experience use case, underscores its superior capabilities for large-scale operations and high integrability.

A significant competitive advantage for Docebo is its unique position in the U.S. government market. The company achieved FedRAMP Moderate Authorization in May 2025, ahead of schedule, unlocking a $2.7 billion Total Addressable Market (TAM) across federal, state, and local agencies. Management notes that existing players in this market often "lag behind on capabilities, features and innovation," creating a "scarce" solution environment that Docebo is uniquely positioned to fill. A White House executive order in April 2025 favoring off-the-shelf SaaS solutions over on-premise systems further plays into Docebo's hands, given that an estimated 60% of government HCM software remains on-premise and outdated.

Financial Performance and Operational Momentum

Docebo has demonstrated consistent execution, delivering strong financial performance despite a dynamic macroeconomic environment. In Q2 2025, the company outperformed its guidance on both revenue and profitability. This was partly driven by a "very strong outcome" in its mid-market segment, a result of more efficient outbound and digital marketing, and a focused approach on high-potential verticals like technology, healthcare, and financial services.

The company's strategic move upmarket is reflected in its Average Contract Value (ACV) for new logos, which grew significantly from $70,000 in Q4 2024 to $83,000. The enterprise segment itself grew at 25% in Q3 2024, highlighting the success of its targeted efforts. Docebo's ability to secure long-term commitments is also notable, with a 200% increase in contracts of five years or greater in 2024, indicating strong customer stickiness.

Docebo's focus on multi-use case adoption remains a priority, with 65% of new customers in Q1 and Q2 2025 adopting two or more use cases. While this is a slight decrease from prior years, it reflects a refined strategy to optimize both ACV and sales velocity by sometimes entering with fewer use cases and expanding over time. The customer count above $100,000 in Annual Recurring Revenue (ARR) accelerated to 23% in Q2 2025, up from 16% previously, driven by new customer acquisition, expansions, and favorable foreign exchange impacts.

From a profitability standpoint, Docebo's Gross Profit Margin (TTM) stands at 80.87%, with an Operating Profit Margin (TTM) of 7.98% and a Net Profit Margin (TTM) of 9.29%. The company generated $29.25 million in annual operating cash flow and $28.00 million in annual free cash flow (TTM), demonstrating robust cash generation capabilities.

Docebo maintains a strong liquidity position, with $90 million in cash on its balance sheet and no debt, supported by a new credit facility.

Capital allocation priorities include investing in headcount for the government vertical and R&D for the AI roadmap, alongside opportunistic share buybacks when valuations are attractive.

Outlook and Forward-Looking Strategy

Docebo's outlook is characterized by a "measured approach" in its guidance, reflecting ongoing macroeconomic uncertainties while emphasizing significant growth opportunities. The company updated its Q2 2025 revenue guidance to reflect strong mid-market performance, elongated enterprise sales cycles, and a positive foreign exchange tailwind, expecting to trend towards the higher end of its range. Foreign exchange provided a 1% tailwind to total revenues and 2% to subscription revenues in Q2 2025.

Meaningful contributions from the federal and broader government vertical are anticipated by H2 2026, with potential for some federal business wins in 2025. These large enterprise and FedRAMP deals are currently considered upside and are not materially factored into the 2025 guidance. The company expects improvements in gross retention after Q1 2025, with another improvement in Q3 before a dip in Q4 due to the AWS contract loss, all within current guidance. However, Q3 2025 ARR is projected to step down from Q2 due to seasonal weakness, particularly in EMEA.

Operationally, Docebo is making strategic leadership changes, including the appointment of Mark as the new Chief Revenue Officer (CRO), tasked with sharpening execution, increasing efficiency, and improving sales velocity. A key long-term goal for the CRO is to integrate post-sales and sales functions to positively impact Gross Retention Rate (GRR) and Net Dollar Retention Rate (NDRR). The company is also leveraging its Chief Learning Officer, Brandon Carson, in pre-sales to support enterprises in their early strategy definition, a unique approach showing early positive results.

Docebo's commitment to efficiency is evident in its broad-based headcount reduction, driven by increased automation and internal AI utilization. This is not a cost-cutting measure but a proactive step to prepare the company for the next five years, with savings reinvested into specialized AI talent and internal upskilling initiatives, including an "AI academy." Professional services revenue is expected to be relatively flat or even down year-over-year in 2025, as strategic system integrators increasingly handle implementation work, allowing Docebo to focus on high-margin subscription revenues.

Key Risks and Challenges

Despite its strong position, Docebo faces several risks. The macroeconomic environment continues to present uncertainty, leading to elongated sales cycles and increased deal scrutiny in the enterprise sector. The company will also experience the loss of the AWS Skills Builder use case as of December 31, 2025, due to AWS's decision to build an internal solution. This contract represented approximately 1.8% of Docebo's total ARR. While other Amazon (AMZN) use cases are smaller and not expected to transition internally, this highlights the risk of large customers insourcing critical functions.

A nascent understanding of AI readiness among buyers also poses a challenge. While business units are often eager for AI-first solutions, procurement, governance, risk, and compliance (GRC) teams may not be fully aligned, creating disconnects in the buying process and requiring extensive education and collaboration. Docebo acknowledges the presence of new entrants in the AI space and the debate around individuals learning in isolation via Large Language Models (LLMs). However, the company believes its platform mitigates this risk by providing a deterministic system that transforms corporate knowledge into structured learning with pedagogical models and a skills backbone, capabilities that generic LLMs lack.

Conclusion

Docebo Inc. is at an inflection point, rapidly transforming into an AI-first learning platform that promises to redefine corporate education. Its strategic pivot, underpinned by innovative technologies like the Harmony Agentic platform and AI Authoring, positions the company to capitalize on the massive workforce transformation underway. With a strong focus on enterprise and mid-market segments, particularly the high-growth CX use cases and the newly unlocked government market, Docebo is building a robust foundation for sustained growth.

While macroeconomic headwinds and competitive pressures persist, Docebo's disciplined execution, strong financial health, and continuous technological leadership provide a compelling investment thesis. The company's ability to deliver hyper-personalized, automated, and measurable learning, coupled with its strategic partnerships and efficient operational model, suggests a future where Docebo plays a central role in how the world learns. Investors looking for exposure to the evolving landscape of AI-driven enterprise software should closely monitor Docebo's continued execution on its ambitious AI roadmap and its expansion into the federal sector.