Docebo Inc.

Good morning, everyone, and welcome to the Docebo third quarter 2024 earnings call. All participants are currently in listen-only mode. We will open the line for a question and answer session momentarily. Analysts can ask questions by pressing star followed by the number one on your telephone keypad. We ask that analysts please limit themselves to two questions and return to the queue for any follow-ups. I'd now like to turn the call over to Docebo's Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.

Thank you, Regina. Earlier this morning, Docebo issued its Q3 2024 results. The press release, which included a link to management's prepared remarks and our quarterly investor slide deck, were all posted to our investor relations website. This morning's call will allow participants to ask questions about our results and the written commentary that management provided this morning. Before we begin this morning's Q&A, Docebo would like to remind listeners that certain information discussed may be forward-looking in nature. Such forward-looking information reflects the company's current views with respect to future events. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected in the forward-looking statements. For more information on the risks, uncertainties, and assumptions relating to forward-looking statements, please refer to Docebo's public filings, which are available on CDAR and EDGAR. During the call, we will reference certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, they are not recognized measures and do not have standardized meanings under IFRS. Please see our MDMA for additional information regarding our non-IFRS financial measures, including reconciliations to the nearest IFRS measures. Please note that unless otherwise stated, all references to any financial figures are in U.S. dollars. Now I'd like to turn the call over to Docebo's CEO, Alessio Artufo, and our CFO, Sukarn Mehta. Regina, we're ready to take the first question.

Our first question will come from the line of Ryan McDonald with Needham. Please go ahead.

Hey, good morning, everyone, and congrats on a great quarter. Alessio, maybe just to start with you, obviously, the macro environment has been a tough one, but Docebo seems to continue to execute really well despite that. Can you just talk a little bit about what you're seeing sort of within the selling environment? What's enabled you know the the company to continue to sort of really perform well again as things sort of continue to be elongated and and maybe uh talk about sort of the mix between sort of sales productivity from the direct team versus maybe support you continue to get as you expand those partner relationships thanks 100 um hello ryan so um first let me say

I am really, really proud of the efforts of the Docevo team and how we've effectively been executing in what remains a stable yet somewhat challenging macro environment. Customers for sure continue to demonstrate appreciation for our services, for our products in particular. Our ability to serve multiple use cases remains our superpower. We are the sole company that can serve at scale a large enterprise's needs for both their employee experience or EX and the customer or partner experience, what we refer to as more CX. You are correct that our efforts are balanced and target both investing in our direct sales machine as well as our partner engine, which is an articulated engine where system integrators play a key role. This quarter alone, we have advanced our success with some of the system integrators. For example, in partnership with Accenture, we were able to conclude positively relationship with a leader in the insurance sector in Europe, actually, which to me underscores the fact that our investments in partnerships and our investments in establishing our presence, our go-to-market, even outside of North America, in this particular case it was in the dark region, are paying off and our strategy is coming together really nicely. In terms of go-to-market more broadly, with the cutting of rates, we're seeing a resurgence of the sectors in which we have been historically very, very productive, such as software, professional services, and other sectors where our product suits them really well. For example, associations and retail is really performing really nicely in these industries. Look, in the enterprise space, no doubt. The deal cycle remains slightly elongated, so we are learning how to work within that environment. But again, overall, let me underscore, we have performed in alignment with our expectations and are very proud of our results.

Appreciate all the color there. Maybe as a follow-up, you know, in a week like this, it's probably impossible not to ask about anything government-related, but It seems like it was a good quarter in the slide-in and a bit in Fed. But can you just give us a little bit of an update on the progress with FedRAMP? And is there any risk here as a new administration comes in that there's, I guess, maybe a pausing in the process as you work towards that FedRAMP certification? Thanks.

Love the question. So let me touch first on the topic of new administration and then give you an update on where we stand relative to federal um you know what i've always loved about our technology is that um especially at times of say a research for efficiency and cost cutting um you know what better technology is available than that that allows organizations to upskill their own workforce um you know it there's nothing there's nothing more important than having people on the job or customers that um by a means that are more competent and more ready to do the work at a fraction of the time um so our platform essentially does that it supports upskilling and re-skilling processes and so we understand government agencies may be asked to do more with less and we believe that in this environment our products provide a natural edge in in against a search for increased efficiency so that is on the more uh new administration side of course it's early days and we will see what happens next um on the federal side Our work has continued, just upfront kind of to remember where we stand in our journey of certification. The table, first of all, is audit ready. And what that means is we have done all our work on the so-called federal controls to ensure that our technology processes and documentation are ready for a sponsored relationship. We have been working, are working very actively, and this remains a top priority to finalize a sponsor relationship. And, you know, we remain cautiously optimistic by that. However, putting a date to that is basically impossible as this is outside of our control. However, we are cautiously optimistic on the outcome. One more thing I would like to say about this. Let me remind that while FedRAMP is a priority and we have invested on it, we are seeing beautiful outcomes more broadly in the government space, where we are executing very nicely in the flat part of the business and are partnering with partners like Deloitte on advancing our positioning at the market and are selling actively together with them.

Our next question will come from the line of Asuthan Sukumar with Staple. Please go ahead. Asuthan, your line might be on mute.

Good morning. We'll take our... Apologies, gents. Good morning. Congrats on a solid quarter here. I just wanted to... Checking on an update on your pricing strategy. Just curious how, you know, what early progress you've been seeing to date and, you know, what is some initial feedback you can share on sort of the success side of that strategy?

Yeah, good morning, Susan. So, Karan here. I'll cover this one. First, yeah, just as a reminder, when we launched our pricing in April, this is, you know, historically the company priced its customers on a la carte basis, and we moved to what we call the core bundle pricing with incremental capabilities that are part of our core and more package. So, what that effectively has meant is that In terms of the trends we're seeing, we're certainly driving a much higher value conversation of the problem that we want to solve for our customer in terms of the outcomes that we help solve for them, whether it's the customer education, onboarding capabilities, so on and so forth. And what we also drive as a result of that is aligning Value to where we can extract value effectively, meaning that in the customer education use cases, we are able to have a conversation around ecommerce capabilities, which we can monetize separately as part of our new packages. And so the new pricing has allowed our sales engine to drive. A conversation, which is value driven, we're certainly seeing that all all our new deals effectively. Now our price at the new price book as we look through 2025, you'll expect us to start utilizing that price book for our renewal cycle with the new products and the new modules that were launched. At Docebo Inspire, it also gives us an opportunity to utilize our new price book to streamline the renewal book over time. It will still take time because the renewal book depends on when the customer is renewing and you also have to be sensitive to their initial contract SLAs. But in general, on the net new deals, we're pretty pleased with it. You should expect that. And you're seeing that in the ACV growth, even this quarter, that we showed ACV was quite strong at $71,000. I mean, we've talked about it in the past that you can expect a reasonable increase in ACV as a result of how we go to market. The other thing that we're seeing also is that it increases, it helps us from a deal velocity perspective because from an objection handling perspective, you're now driving the conversation of value versus a la carte menu items. So very pleased on that front. And then I think looking forward to 2025, you'll see us utilize that with our new modules and expansion strategy in trying to bring as many customers as possible to the new price book.

Great, thank you. For my second question, I just want to follow up on the U.S. government opportunity. You know, notice recently in the headlines that one of your partners, Keresoft, has, you know, is being investigated by the FBI. Just wondering, has there been any, have you noticed any impact to your relationship or any impact on execution via that channel?

No, this is one of our several partners in the government sector. We don't expect any impact in our relationship, and yeah, we'll continue to monitor developments, but it's very neutral to us. Thank you.

Our next question will come from the line of Robert Young with Canaccord Genuity. Please go ahead.

Hi, good morning. First place I'd like to start is a couple of times you've given us some indication on growth by cohort. I think you said that the enterprise cohort is growing 30% or greater at the investor day. Can you update us on that and maybe just give us a sense of where the different cohorts are?

Yeah, very well. So, Karen here. In terms of the course, I think you might, you will see that in my prepared remarks. I've mentioned it. So, you'd see enterprise segment, which is our customers in the large in the market. We grew that segment at 25% this quarter. And then we saw some, you know, on the SMB side, I think it's pretty similar to what we've seen in the past. But mostly in the single digits growth. But I think as we look forward, you can expect that, you know, even in Q4 and forward that you'll see more strength in the higher end of the market. And as we will continue to monitoring how the rate environment impacts the lower end of the market, but there is an opportunity or potential that if there's some stabilization and confidence in the buyer, maybe the SMB market may perhaps start participating a bit more in 2025.

Okay, so then I guess the obvious follow-on is, I mean, 25% is the downtick. So what would be the driver there? Is that tempers or those long-term expectations? Just maybe give a little more detail there.

Yeah, it's just generally a seasonally, you know, we think about Q3 as a seasonally store quarter. Last year, also just as a reminder, Rob, we had a large deal on Google that was part of our marquee deal. So there's a bit of a comp in the prior two.

Our next question will come from the line of Josh Baer with Morgan Stanley. Please go ahead.

Thanks for the question and congrats on a strong quarter. So we need to get an update on just the OEM strategy broadly and also wondering, as we head into 25, are we going to start to see any headwinds show up from some of those prior changes around Ceridian Dayforce?

Morning, Josh. Our partner strategy continues to be very strong. As we mentioned in the past, we brought on board a new executive to lead our strategic partnership efforts that includes our OEM channel. When we think about partnerships, we think about OEM, we think about system integrators, and we think about partnerships that are creative from a go-to-market standpoint in terms of product capabilities and in terms of product extensions. We've been working on all these fronts and are quite pleased with our return on the business development side. I believe in the quarters to come, We will continue to expand our wallet of significant partners, and we will update you as we go through it. But I would say, you know, from a results standpoint, Our focus has been to support these large enterprises that we're working with, and really the relationship with the SIs has been a tremendous area of focus for us, and the developments with the Accenture and the Deloitte have taken a lot of our time, but we believe this time is very well spent, and we're great ROI.

And I think, Joshua, you have the second part of your question. My apologies. There was another around pricing.

No, I think that's helpful. But Sukran, I would ask you just to, you know, not to guide, but maybe the opportunity to help shape analysts' thoughts on growth trajectory ahead. Like the one hand, you have 18% ARR growth this quarter. On the other, you guide it to 14% revenue growth in Q4. Is there a reason to expect stabilization in 25 from a growth perspective, more deceleration from that Q4 exit rate? Any thoughts on the trajectory there?

No, yeah, Josh, I can give some color. I think, as you know, we'll provide our annual guidance for 2025 when we report in February. I think the way to shape it versus qualitatively is that, you know, the focus in 2025 will be coming from a perspective of enterprise segment being the most important, especially on the external use cases, customer experience use cases. You know, unless you spoke about some investments that we're meeting or making around are not just FedRAMP around a sled market. And that's important as we look into 2025 with a bit of delay, perhaps on the FedRAMP that we just spoke about. But the pipeline, the way it's shaping right now is that more than 50% of our pipeline is CX learning driven. Almost 30% of our pipeline going into 2025 is also participating from an SI perspective, which speaks to the larger end of the market. So we certainly are increasing our pipeline in the larger end of the market, and that will certainly increase some deal cycles, but also give us an opportunity to show some strength into 2025. You know, at a high level, I think that as we exit this year, we'll provide more guidance, but, you know, there's an opportunity to us to continue to maintain some growth as we look into 2025.

Our next question will come from the line of Richard C. with National Bank Financial. Please go ahead.

Yes, thank you. Sort of along this similar question, can you maybe help us understand how the sales and marketing organization is structured or organized in sort of the different markets you're pursuing. So you've got large enterprise, you have sort of small slash mid. Are they kind of all under the same group? Do they have different groups? Like, just trying to understand the mechanics of how that works.

Sure. So, you know, the set-up is – in international markets is primarily driven by the countries. So, relative to international markets, we have the concept of regional allocations, whether it's UK and Nordics, France and Benelux, South India, and our APAC, or Asia-Pacific region. Sorry, I forgot, our DAC region, where we're seeing, by the way, great results today. And with regard to our biggest market opportunity in North America, where of course we don't have the complexity of dealing with multiple languages and multiple cultures. Our design is pretty straightforward and typical, where we have our business development organization that works to expand and grow our funnel in alignment with our marketing and revenue marketing function. These are the organizations that are really filling in our funnel with the combined GTM activities. And then on the sales execution side, those that are in charge of actually winning the deals are account executives, account managers, and global account directors that specialize in working through the pipeline. And they are set up by segments, where our primary segments are the mid-market segment and the enterprise segment, the ones that we are the most focused on. As a support unit, we have an organization of partnerships that works around the sales organization to support our sales efforts by bringing in new partners, educating partners, and supporting the sales team on partner executions. And then we have vertical initiatives. The one vertical initiative that we began more than a year ago has been our government effort, which runs as a unit given the specific GTM of government and the skills that require the voting And as we continue to grow, our organization will continue to evolve. There are different moments in the life of a company with different strategies, and those strategies typically reflect on how you go about designing the sales order, seeking more efficiency, that's always our prerogative and our priority, and focusing our spend and efforts where we believe there is a higher chance of winning, where we have higher win rates and higher commissions.

Okay, thanks. And my second question, when you look at the sort of features that you have, it seems to me that one of the most prominent is around kind of AI authoring and helping create content. Is that what you feel from your customers you speak to? And is that the biggest pain point? And from a cost perspective, how much does that actually help them save in terms of using something like AI authoring and Um, what is the margin profile on something like that look to the table?

Yeah, brilliant question. So let me preface by saying AI offering is set to launch later this month, actually in about 11 days. And so at this point, we don't have, let's say, an already live use case with AI offering with customer proof point of results that we can report. However, let me share a few thoughts. Number one, AI offering was the most participated beta program in the history of the company. There has been a tremendous amount of interest, which confirms your input that it is a highly sought after technology. um ai offering is the evolution of the chamber shape a module that we've launched years ago that we have reshaped to meet better the needs of customers um ai offering is going to be an important part of our users not just per se for the return of investment which is going to be Quite simple, frankly, to quantify once we are paying customers on it because it's quite simple to demonstrate how a constant production cycle that tends to be very heavy on the cost side can be streamlined and automated thanks to AI. We're really excited about products, frankly, that we have launched and what we are seeing return in the market. In the past few months, we've launched respectively Insight, which is our advanced analytics technology. that helps enterprises really power a BI technology within DLMS and run very complex yet streamlined reporting needs and communities, which plays into our CX customer experience posture. It allows companies to run a community-wide interactive within the elements. We have deep conviction in these two, and we have sold units and dollars in accordance with our ambitious plans and expectations in both. I will say that one of the reasons why I'm super excited about it is not just the capability to create content, but I view it as an integral part of our future vision of the company that focuses on learning and knowledge transformation. Because knowledge is going to be the number one asset that every company has available. And transforming knowledge into instruction and into learning is going to be the big opportunity. Offering is the glue that allows us to connect the knowledge to transform it into instruction and learning. And that is just a component of what will be the powerhouse of the future.

Our next question will come from the line of Erin Kyle with CIBC. Please go ahead.

hi good morning it's aaron kyle on for stephanie price um in your prepared remarks you call out partnerships with those offering services complementary to lms i could you just dig into that strategy a bit more and you talk about buy build and partner is that also the way you would order those in terms of priority hello stephanie um for sure we

We see a tremendous opportunity in the market. Part of our vision is to become a more holistic partner to our customers. And it's not just our vision. That's what our customers are asking us to be better at. In 2015, when we listened carefully to the market as a much smaller company, we listened to customers that said to us, we'd like to do more with LMS than just delivering the training for our employees. We listened to that feedback back then. We made a conscious bet on our product, and we developed the CX capabilities, and that remains to date our best investment because it has allowed us to gain market share that most LMS players did not see for many years to come. Similarly, our idea of listening to customers and listening to their needs of doing more is a good partner today. We wanted to solve more problems for our customers because the learning tech stack is very fragmented. Enterprises are known to have contracts in place with thousands of providers to solve what fundamentally is the comprehensive learning needed for various types of audiences in the organization. So of course, in an ideal world, If all things were possible, then we would step our fingers and have all these capabilities at hand from day one tomorrow. But that's not the way it works. And the way it works is we will, very likely, building what we have deep conviction and high synergies with our products. We will continue to partner what we think there are assets that are synergistic and that we can establish product integrations with commercial alliances attached. And why not? We will capture opportunities inorganically in the market for technologies we believe have merit and we focus on very healthy quality assets that we can leverage our cash to buy and improve our market position with that.

Okay, thank you. That's helpful color there. And then maybe I just have a modeling question.

I meant to stay here and I apologize.

That's okay. That's okay. Thanks, Alessio. My other question is just on the modeling front. The free cash flow, it was a bit lower than we had expected in the quarter. And I see that's working capital driven and impacted by the timing of some payments and some bonuses. My question is, is that a seasonality thing? Like, should we be modeling Q3 as a negative change in working capital going forward, or how should I think about that?

Yeah, good question, Erin. So, current here, morning. Yeah, this is just on a first performance, like I've said before, when you look at our free cash flow on a trailing 12-month basis or an annualized basis. You'll always find our free cash flow will be give or take plus or minus 1% to adjusted EBITDA. What you're pointing out is, yeah, it's just basically our annual bonuses are now paid semi-annually, so that's just something you should just factor in as you look forward or going forward from a free cash flow perspective. But on a trailing 12-month basis, there's no difference.

Our next question comes from the line of Daniel Chan with TD Cowan. Please go ahead.

Hi, good morning. As you wait for FedRAMP certification, what's your confidence that you're going to be able to participate in some of the large RFPs that are coming to market? You mentioned that the Veteran Affairs RFP came out around your Inspire conference. So what's your level of confidence you're going to be able to participate in these large opportunities?

We, you know, look, this is a great question. I would say the reason why we are so focused on our federal certification is that the term for the federal market is so impressive. Participation opportunities will be tied to achieving our federal status, and that's why that's our priority. The TAM for the federal market, we researched it, is in excess of a billion-dollar opportunity in our market alone. And so it goes without saying that the sooner we accomplish our certification, the better we will be positioned to respond to these bids and when they come out.

Yeah, I think, Dan, the only thing I'd like to speak earlier, there was a similar question that I've had, is... I think if you look at the infrastructure within the government organizations, we spoke about it, I think it inspired a bit, but you would find that these are organizations that are sitting on very legacy old solutions that have to be modernized just because they can't even sustain their current operational practices. Forget about the advancements in technology that have happened over the last 20 years. So a lot of the solutions that some of these agencies are utilizing today have been built on Moodle and legacy platforms that are just not sustainable to even operate. And as you look at Alexis just spoke about the potential and looking for efficiencies in government. Technology is going to be an important factor in terms of solving that productivity efficiency that might be a focus as we look forward to the new administration.

Thanks for that. Switching gears, new logo ACV came in flat at about $71,000. Just wondering whether this is a level we should expect the ACV to stabilize that or whether there are levers to take that higher. Thank you.

Yeah, good question, Don. We were pleased with actually the strength we showed in Q3, which is That's easily a slower quarter, but what you're seeing is that as we move up market, the pipeline is also increasing up market, but that's also showing in terms of the ACV strength, even in Q3. I think, yeah, going forward, you know, it is um it's the way the pipeline also shaping and generally how we go to market from a mid-market and large enterprise perspective and with the changes we've made in the pricing you can expect that we should show some consistent strength uh in terms of the size of the dlc uh we are landing uh but as we said you know it's a story of segments too And so, you know, if you think about segments that we've had historically, the more and more you move away from SMB into the mid-market and enterprise, you should see, you know, us continue to show strength and hopefully increase this steadily in the next few quarters.

Our next question comes from the line at the Kevin Christian Rodney with Scotiabank. Please go ahead.

Hey there. Good morning. I joined a bit late, so apologies. This is what I asked, but for Sakaran, Can you comment on your ARR book trend so far through Q4, you know, relative maybe to last year? And can we expect, you know, typically you see a pretty good bump in Q4, sort of like $12 million, I think, the last couple of quarters. Do we expect something, that trend to continue? Or is there something else going on? Because in your script, you talk about, you know, elevated levels of scrutiny and for the foreseeable future. Just any color you can give us on what you're seeing. Thanks.

Yeah, Kevin, morning. The way to think about, you know, firstly, I'd say that our pipeline, as you understand, is mostly heavily in these quarters and future quarters in the mid-market and large enterprises, you know, are driving a pretty high pipeline in those segments. And the commentary that we provided just to kind of highlight that some of these deals, they are taking longer, but we're seeing, you know, our execution consistently improve. As we guided for Q4, we will provide the next year's guidance when we kind of report February, but as we, you know, uplifted our guidance for revenue, you should, you'll see that we are pretty comfortable in terms of our 2024 targets. And as we look into 2025, and what that bookings will come as a result of our Q4 quarter, we'll provide that highlight in early 2025. But generally, the way to think about it is going forward is that the mix of the business is meaningfully in the large enterprise cycle, and that certainly is a factor in terms of how we, when and how we close some amount of those deals. And that should also be hopefully an opportunity to maintain our growth as we look forward and potentially show some improvements in our ACV.

Got it. No, I appreciate that and good quarter. Thanks. I'll pass the line.

Thank you. Thank you.

As a reminder, to ask a question, press star one. And our next question comes from the line of Martin Toner with ATD Capital Markets. Please go ahead.

Hi, thanks for taking the call. Just wondering, in the prepared remarks, you used the term improving pipeline. You've talked a little bit about it over the course of the call, but just wondered if you could just revisit it and give us a little more depth into why you put that into the prepared remarks.

Yeah. It's a story of course, Martin. focus of our engine that I have described before when there was a question prior about organizational setup. And we have, over time, continued to learn operationally how to allocate our resources and efforts in a more narrow way where we are focused. This is no easy task when for many, many years we were operating across the SMB, mid-market and enterprise space. We have continued to adjust our business development motion, marketing motion, both in the form of paid and non-paid marketing and branded campaigns. towards a more focused mid-market and enterprise outcome, which in return will have resulted in marginal improvements in the pipeline. Because our units are bigger and because the customer profile is more in line with what we're looking for, I would add to that that One of the tactics that we are implementing more and more is the so-called ABM approach, where we are putting quite a bit of effort in strategic revenue analysis of our top. performing industries and verticals and carving our territories accordingly across the board from demand to execution. Again, that is with the objective of creating better unit economics in terms of cost for sure, but also in terms of improved pipeline. So we're pleased with those efforts. I believe that we have a long way to go more. I believe that we have an even greater opportunity. And as we continue to launch new products and establish new partnerships and increase our addressable market as a result, you know, the opportunity ahead of us is really exciting.

That's great. Thank you very much, Alessio. I'm going to be in Atlanta soon, so I'm going to hit you up for some restaurant recos. Let's do it. All right. Thank you.

Our next question will come from the line of Akiran Swithren with Eight Capital. Please go ahead.

Hey, good morning, guys. Congratulations on the quarter. With yourself as CEO, Alessio, and a recently promoted CRO, there's obviously been some shuffling in senior leadership this year. I wanted to ask you broadly on any structural tweaks you've made that's seeing results. And also, can we have an update on what your hiring priorities are across different teams into next year?

For sure. Well, look, first of all, I am super excited to be in the permanent CEO position. And I am so grateful to the team that I work with closely every day. whoever the champion and for players who are bored and investors from the trust they put in me. In terms of decisions and people, you're right to think that one of my top priorities is the focus on people. People more broadly as the champions, every employee of the company, but for sure assembling the eight players team that I work with every day. In the first few months from my appointment, I was very happy to welcome to the business a few new executives, a new chief of staff, Lord Miller, a new EVP of corporate development and partnership, Travis Burke. More recently, a new EVP in product management, and very critical to our Go-To-Market Execution and Chief Marketing Officer, Alex Adelovich. Is there more to come? Look, we are always looking to improve our organization. We're always looking for areas where we can do things better. And so I'm really proud of the team that we've assembled, but we're never happy, never good enough, and we look for opportunities to strengthen ourselves both in people, products, and services.

Appreciate the color there. And that's my second. Can you discuss the new communities product and how adoption and feedback has been since that launch? And more broadly, how your appetite of case for M&A has changed up given that growing meaningful free cash flow you mentioned?

Absolutely. Great questions. Communities. Communities have me really excited. As you may have learned over time in the earnings call, we've always been very enthusiastic, so to speak, about our CS posture, meaning our ability to serve our customers, to enable their own customers and partners and external audiences. Communities is the result of a small acquisition that we did of a company called Peerboard that had a, you know, I would say startup product focused on the community business. We took that technology and the talent that was also of high quality and brought it in the fold in the schedule and continued to develop and we've recently released the communities product. The beta involved dozens of customers at the show, all showing great signs of engagement during the beta program. One of the things that communities excites me tremendously is that whilst its main focus is one of addressing the needs of external audiences, we found in the market that there are many organizations that actually wants to implement communities for their own internal use case as well. So not only is it going to be accretive for us as intended for the comfortable experience use case, it will also give us an opportunity to further strengthen and differentiate our EX or employee experience capabilities. Now further, I will tell you one thing that It's very factual. We have several thousand customers of Docevo interacting every day with our own community technology. Our desire is to continue to drink our own champagne, to show to our customers, our prospects, how Docevo leverages and makes a company better using a community technology. We have years now of history. of doing that that we have developed as practices so not only we've developed the product communities that is strong but we also have the expertise to go out there in the market and showcase how we've actually implemented and now you have a really good return on it by having that um on the mma front uh we are um you know first of all i would say Job number one is a very clear thesis. A very clear thesis of where we want to go, what we want to do, when, and under what circumstances. That to me is job number one. It's part of drawing a very clear vision for our company, which we believe that we have very crystal clear. M&A are a tool at our disposal. Our financial profile is elite. We are positioned really well, we know that, and very healthy cash on the balance sheet, and more importantly, an EBITDA profile, a free cash flow profile that supports M&A efforts now in the future. are active in the market. We look for opportunities, but we're very selective. The opportunities we're looking for are creative or story. They are value creation for our customers and the companies we are interested in as a positive to neutral profile to our existing balance sheet. But again, more importantly, they have to be good technologies and healthy businesses. So we are at work. Tavis Burke is a professional that has done this for many years. He supports us in this effort, and we will see. We will keep you updated as things evolve, but we're very excited.

That will conclude our question and answer session, and I'll now turn the call over to Alessio for closing remarks.

Thank you very much. We are really pleased with both our successful work, marked by consistent execution and profitability. We are in a trajectory to become the complete AI-driven learning and knowledge platform used by enterprises for their end-to-end learning needs. The world will learn with the channel. This position will increase our time and strengthen our position of innovative and differentiated companies. Thank you for your time. We look forward to updating you when we report the Q4 results in February. Thank you.

Ladies and gentlemen, that will conclude today's meeting. Thank you all for joining, and you may now disconnect.