Docebo Inc.

Good morning, everyone, and welcome to the Docebo Q1 2025 earnings call. All participants are currently in a listen-only mode. We will open the lines for a question and answer session momentarily. Analysts can ask questions by pressing star followed by 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, Julianne. Earlier this morning, Docebo issued its Q1 2025 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 both 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 MD&A 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 Dorchevo CEO Alessio Artufo and our CFO Brandon Farber. Gentlemen. Julianne, would you take the first call first question please?

Certainly as a reminder to ask a question, please press star one on your telephone keypad. We ask that analysts please limit themselves to two questions and return to the queue for any follow-ups. Our first question comes from Suthan Sukumar from Stifel. Please go ahead. Your line is open.

Good morning, gents. For my first question, I wanted to touch on the leadership transitions that were announced alongside the results with the departure of the CRO and CPO roles. And these are obviously key roles You know, are these related to execution or performance issues? And what stage are you at in replacing the CRO role? Would appreciate any color there.

Absolutely. Hi, it's Alessio speaking. Fair question and, you know, one that I'd like to address head on. So, first, you know, for perspective, when you take a step back, Docebo over the past five years has grown from roughly 74 million in ARR to currently 225, right? Now, when I stepped into the CEO role, one of the first things that I thought about was taking a close look at what kind of leadership we need for Docebo's next phase of growth. So a few thoughts. First, in general, we're not the same company that we were three or five years ago. The scale that we operate at today with more enterprise customers and more global footprint, it just requires a leadership team that is aligned with that future state. Second, some changes were just natural evolutions, you know, leaders moving on after building an incredible foundation. That's Fabio's example, our CPO. Others were intentional decisions. to bring in fresh expertise where I believe we needed it. And on all of those, we've been very thoughtful and proactive and not reactive in those changes. I'd like to also point to the strength of the talent that we've attracted recently. In the past 12 months, we've added very strong, proven leaders. We track records in scaling agro-sas businesses. And that kind of bench strength isn't a sign of instability. It's more like a focus on ambition and momentum. And finally, you know, what really matters the most to me is preserving what makes Docebo special, which is our culture, our agility, and a team that is customer obsessed while upgrading our ability to execute. As far as CRO search, I will say that we're well underway, and I'm very pleased with the process that we're running.

Thank you, Lucio. For my second question, I'd like to touch on AWS. I appreciate the color in the prepared remarks on the loss of the Skills Builder use case and continued work on internal use cases for AWS. Can you speak a little bit about how the relationship overall with AWS is now given this change and, and do you see increased risk here of potentially losing AWS altogether?

Yeah. So, um, um, couple, couple of thoughts on this one. The first one is, um, relative to the relationship, it is excellent. It is, it is collaborative and we're preserving a, a very, a very close relationship with the Amazon AWS team. Um, Amazon overall remains a very important customer for Docebo, and as such, we're very pleased with that. Relative to Amazon AWS and their journey with us, as a reminder, this is a customer that stayed with us for their entire contract term, and that means five years, roughly. During that time, I think it's important to underscore that we've helped to unlock a massive business. If you think about it, alone in 2025, they've activated close to 10 million users, 10 million learners in the platform and are well underway to train 29 million users, which was their goal. The decision that AWSP made, although certainly regrettable from our standpoint, no doubt about that, is that because the business has become so mission critical for them, and because they have such a fundamental belief in building internally, with the recent changes in leadership, they opted for a build versus use a commercial product. they didn't take the perspective of going for another commercial product. That would have been very concerning, but that was not the intent. The intent was to just have a freedom of executing anything they wanted all around the learner experience, and the way they wanted to achieve it was by building their own technologies. They certainly have the firepower. They're one of the biggest companies in the world, engineering-wise, to do so. I think, in a way, I'm proud of the fact that we've given them a lot of input on how to do it because for five years, they've consumed our product and they probably, you know, it was a catalyst for idea for them. But we maintain a fantastic relationship and we'll do our best to transition them in the best way. And again, Amazon remains a great customer, a partner of ours on a number of different fronts. and you know we continue executing and we believe you're super well suited to win large enterprises in the in the technology space thanks to this great experience great thank you alessio i'll pass the line yep our next question our next question comes from robert young from canaccord genuity please go ahead your line is open

Deirdre G Snyder- hi good morning just maybe a question on the full your guide reduction. Deirdre G Snyder- I think in the prepared comments highlighted that it's really due to macro expectations, as opposed to anything that's happening right now, maybe it gets revisit churn is there churn in the quarter is there an increase in churn. Deirdre G Snyder- And then, maybe if you could just broaden the explanation for the decision to reduce the full your guide at this point.

Hey Rob, it's Brandon speaking. So, you know, if we unpack the guide of just a little bit, so from a Q1 perspective on revenues, we slightly beat the upper end of our guide. From a Q2 perspective, our revenues are actually coming in right in line with where we modeled it at the beginning of the year. So when you really look at it, we're taking a more measured approach in H2 where we're reducing our new logo growth assumption while we're holding our expansion and retention impact the same. You know, from a PS perspective, when we look at the two different revenue streams, our professional services is mainly onboarding of new customers. So that will have a more meaningful impact in the given year. We previously guided that would be roughly flat year over year. We now expect professional services will be down year over year. And, you know, really the main message is we're reacting appropriately to the macro that we're seeing. We came into the year with roughly one-third of our pipeline that was more geared towards macro sensitive end markets that are particularly being impacted by tariffs, in particular retail, manufacturing and automotive. And we want to make sure that we're just taking a measured approach and we react accordingly.

Okay, that's good. Okay, so my second question would be around your large customer pipeline. And last quarter, I think you said that customer count over 100,000 through 18%. And then the numbers you provided this quarter, looks like that's up 15 to 16%. So that seems like it's slowing. Maybe if you could revisit the large customer pipeline. Is it overrepresented in those end markets that you just highlighted? Maybe just talk about the customer metrics you've shared this quarter and why the growth has decelerated, and then I'll pass the line.

From an enterprise perspective, our pipeline still remains healthy. I would say we did see a bit of deal elongation in the enterprise space. Previously, we've communicated for probably the past four to six quarters that deal scrutiny, deal elongation was roughly stable. We did see that change just a little bit this quarter, but nothing really significant to call out. Overall, if you think about the enterprise motion, even at Docebo, it's typically been more weighted towards the back half of the year, where we tend to see the enterprise buyer cycle buy more software near the end of the budget cycle. So we do expect a lot of that pipeline to converge in Q3 and Q4. And when you look at our new ACV growth, we still grew at a solid pace year-over-year, so the trends are consistent with prior years as well.

And the end market you highlighted, is the pipeline overrepresented there, or is it still broadly well-diversified?

It's broadly well-diversified. If you look at our error by industry, you know, we perform very well in these end markets, you know, historically manufacturing, retail and auto are, you know, well representative, high win rates, you know, great customer of ours. So, you know, while it is one third, I don't think that's over representative compared to historical.

Okay, thanks. I'll pass the line.

Our next question comes from George Sutton from Craig Hallam Capital Group. Please go ahead. Your line is open.

Thank you. Let's see how I have kind of a DNA question. So as we look at the expected growth for the full year, 9 to 10 percent, we start to bring in to bear a single digit growth company. And I don't feel like you're building a single digit growth company. Can you just talk about that relative to your expectations longer term?

Alessio, you're on mute.

Hey, George. Thank you for the question. And my background of a CRO and now CEO brings me to say that I agree with you. We are very focused. We remain extremely focused on growth. And while the guide may not reflect that statement, it takes into consideration the current market that has Brandon very well explained as dynamics that are very much outside of our control. And so we take a prudent approach in that regard. But let me touch some points that perhaps give some perspective as how I think about our growth levers. Number one, I believe the CEBO is going through a journey of improvement in the product at a pace that is very sustained. We've been adding capabilities, particularly focusing on AI enablement and really transforming the LMS in what today is a true AI enterprise learning platform. The goal is to offer an end-to-end solution that comprises not only of a place where people store content and deliver content, but where our customers are able to do end-to-end lifecycle of content creation through content delivery, as well as coaching on the platform. I believe that these added capabilities will bolster growth in the future, and I'm really excited about it. I think when I then think even further and think about our future on the agentic side. For example, there's even more room to be optimistic. At INSPIRE, Rob, we've announced our major initiative called Project Harmony. And I believe that agentification and agents will be a crucial component in our story in the future. and very much, very much excited about that. So in short answer to your question is yes, we are very focused on building and remaining a balanced growth story and very much executing towards that.

So I'm with you on a gentle pay. I very excited about the opportunity. Here's the challenge that I wanted to understand. It's going to change workflows pretty meaningfully. That could clearly affect the chief learning officer and really strengthen their position within an organization. So I'm wondering, will agentic AI come through the chief learning officer or will it be someone else in the organization that gets tasked with that opportunity?

Well, the beauty of our business, George, is we are not only multi-industry, as you know, and very horizontal. but also multi-use case. When I think about the ARR of the company and I split it across multiple use cases, it's very well differentiated. Historically, the chief learning officer has taken a more internal role in companies. Lately, we're seeing a convergence where the CLO becomes more of a chief transformation officer and taps into external learning as well. Now, this doesn't happen everywhere. So I expect the agentification, the automation to come from different places and not just from one single unit. We will see it from the office of the chief marketing officer, from the office of the chief revenue officer, and of course, from the office of the CIO. These stakeholders are already involved with the CEBO. They're already talking to us. And in particular, phase two of our agentic solution, the one that will build the workflows and connectors between the CEBO and third-party platforms, the HCMs and others, you know, it's going to be very much a diverse audience that will be reaping the benefits of it. So we're not designing this just for one use case, but loyal to our current strategy for multiple use cases. Perfect. Thank you. Thank you. You're more than welcome.

Our next question comes from Ryan McDonald from Needham and Company. Please go ahead. Your line is open.

Yeah. Hey, good morning, guys. This is Matt Sheahan for Ryan. Thanks for taking the questions. Matt Pinyan, Considering the guidance update and looking at sales and marketing expenses, I guess, given the macro is creating a tighter budget environment with elongated sales cycles and fewer purchasing decisions. Matt Pinyan, Why not ramp EBITDA margins in the near term, how are you thinking about the right balance of having capacity to capture share when the market reopens first ramping margins when when market demand is weaker.

Matt Pinyan, hey matt. The way we're thinking about EBITDA is you'll notice based off of our guide is that there's going to be a fairly big step function change from Q2 to Q3 and even to Q4 where we're approaching, if not at 20% EBITDA margin. How we're thinking about investments in sales and marketing and more broadly is we have two big investment opportunities right now and we want to make sure that we're still investing in those. Number one is the government go-to-market motion. We just received ATO status and we're seeing strong demand, strong pipeline, and we want to make sure that we're investing and unlocking those investment dollars across the whole go-to-market motion from a government perspective in order to capture that market. Secondly, but probably more importantly, is on products. We just unveiled last month a roadmap that requires more headcount and also different skill sets than we used to hire from our product of yesterday. So from an investment perspective, we're really thinking about these two levers. And then across the remaining area of the business, we're pulling on efficiencies, not only from an AI perspective, but we're just also looking at the overall demand perspective and make sure we're hiring in the right places.

Okay, got it. That's helpful. Maybe sticking with the selling environment, 65% of new customers partnered with Ocebo had two or more use cases this quarter, down slightly from 70% last quarter. I guess anything to call out there, and I assume this is still up on a year-over-year basis, but maybe it'd be good to get your thinking around the metric and how you expect it to trend in 2025. Is 65% to 70% the right level, or could it maybe move lower given the macro and then maybe be good to just get a refresh on how you're incentivizing the Salesforce to drive more of those multi-use case deals given the environment?

So the way we look at it is, you know, we certainly see higher retention metrics with the more use cases customers have. At the same time, when we look at, you know, certain enterprise customers, You know, it's not uncommon for them to come to Docebo with one use case. And then we expand those use cases over time. So when we land a new customer, we're not necessarily trying to land or, you know, we're not 100% focused on landing eight different use cases. We want to land a customer. We want to onboard them correctly. We want to support them correctly. And we want to expand across the org, multiple different departments, multiple different use cases, and over time, make sure they become a stickier customer.

Our next question comes from Josh Bear from Morgan Stanley. Please go ahead, your line is open.

Thanks for the question. I was just hoping you could come back to some of the assumptions embedded in guidance and really wanted to focus on the retention piece, which sounds like the prudence is more on the new logo side. Just wondering if you could expand on what those retention assumptions are. No, that's not an area where you're putting in, assuming that they decline. Um, just thinking through past times of budget scrutiny, think that we have seen retention decline. And so what are the assumptions and why, uh, you know, maintain that.

So from a Q1 perspective on retention, we perform, we performed exactly as we expected. So last quarter, we mentioned that Q1 would be the highest quarter of renewables that Docebo has ever had. And just to put that in perspective. it was a 75% increase in contracts up for renewal in Q1 of 2025 compared to 2024. When we look out to the next two quarters, we're actually seeing a fairly clear path to growth retention improvements quarter for quarter. So from a growth retention perspective, when we look at the overall macro environment, we're not seeing a big impact.

Okay, thank you. And then on the AWS news, so saying that that's not going to really impact 2025, does that come into play in 2026 or what's the timing of that? Thanks.

So as of now, they've provided their intention to not renew as of December 31st, 2025. you know, just to give you guys a little bit more color, AWS was roughly 1.8% of our total ARR, which, you know, when you think about a top 10 customer concentration perspective, we don't really have any big concentration from top 10 customers. So there will be no impact on 2025. And of course, we're going to support them through this migration. And, you know, there's a chance that this takes longer than expected and into 2026. But as of now, we're guiding and we're taking a look at this business as if it's going to go away on December 31st.

Thank you. Thank you.

Our next question comes from Stephanie Price from CIBC. Please go ahead. Your line is open.

Hi, good morning. I just wanted to follow up on AWS as well. So Amazon uses DeChambeau for three other use cases. Just curious if you could give us how much of the ARR Amazon is in total, and wondering when these three other Amazon contracts expire and if they could move to an internally built AWS solution.

Hey, Stephanie. So the other use cases is, so we're in three different departments within Amazon, and there's three separate contracts that were new over the next three years. They are smaller use cases that, you know, let's call them roughly six figures each, low six figures each. And given the size of the departments, we do not believe that they'll move to internally develop solutions just because they're smaller in scope. And if they were, they're, you know, overall immaterial to our revenue growth.

Okay. Okay. That's good, Kala. And Brandon, maybe you could provide an update on capital allocation priorities as well. You were active on the NCIB in the quarter and announced the renewal and also a new credit facility. How are you thinking about balancing shareholder returns and potential M&A here?

Yeah, and just, you know, overall in the credit facility, you know, we're entering into this credit facility from a position of strength. We have $90 million of cash on the balance sheet. We just generated $9 million of free cash flow during the quarter. We repurchased $9 million of shares in the open market during the quarter. So we're always going to look at our three prongs of cash deployment, which is investing back in the business, buying back shares, and buying companies from an M&A perspective. And this credit facility allows us to operate in those three levers at the same time if the opportunity exists.

Thank you. Our next question comes from Richard Say from National Bank. Please go ahead. Your line is open.

Yes, thank you. So beyond the management changes you were talking about earlier, are there any things you need to do from an operating perspective to kind of get your execution with large enterprise to a level it's been in the past for, you know, sort of prior smaller cohort? So as an example, do you need to lean in more heavily on SI partnerships or anything like that?

Hi, Richard. Your reference to partners is a very good one. We are, in fact, leaning heavily in leveraging the relationships with SI partners. Namely, we're working very closely with Accenture and Deloitte and many others to strengthen our position in the enterprise space. And these efforts are paying off. Additionally, I mentioned that Amazon AWS is a partner we've recently become a part of their certified program and are seeing a great success in leveraging AWS as a partner with enterprises buying Docebo through Amazon AWS as a channel. In general, I would say Our goal in the coming months is to strengthen overall principles such as discipline in forecasting, in the overall execution, and I believe we're doing a great job in that regard. As I spend more time with the revenue organization these days, and I become very, very involved in it, I'm really focused on, again, strengthening our capabilities so that we set up our incoming CRO for success.

Okay, great. Thanks. And my second question is, you know, with respect to the departure of your CPO, Should we read anything into it and that your product portfolio is sort of still in need of some changes, you know, sort of the timing given that, you know, you're making this hard pivot to enterprise, you've released a bunch of products and then, you know, this is a departure, like, you know, how should we sort of read that?

Well, yes, I can give some color. So, first, this is not a reaction or a sudden departure. of a well-thought-out succession planning. About 10 months ago, we brought on board a very capable leader in Mr. Sivieri as our FCPO product. And Andrea, since, has taken over our product management organization and been doing a great job at that. him and our Vice President of Artificial Intelligence have been really, really instrumental at accelerating our product, especially on the AI front. Relative to Fabio's departure, it was again part of a succession planning and Riccardo La Rosa joining us as chief technology officer brings the characteristics of the leader we were looking for in terms of engineering that. And our goal really is to strengthen our overall organization and make it an AI-first organization, not just on on the product offering side, but in the backbone and in the core of the product. And so this is all a cohesive plan towards that.

Our next question will come from Kevin Krishna Ratney from Deutsche Bank. Please go ahead. Your line is open.

Hey there. Good morning. Just first a question maybe for Brandon on the SMB base. Can you remind us how big that business is. I think it's historically been around 25% of your ARR. What are you seeing there? What gives you the confidence in the coming quarters that you won't be impacted by macro uncertainty? SMBs are quite sensitive. Is that mainly because the majority of those renewals happen in Q1? Or just give us your view on the confidence of that SMB business not falling off at a faster pace.

Yeah, guys, I think Brandon and Mike got kicked out of the call and are currently in the process of dialing in. So no problem at all. I will answer the question. So relative to SMB, the figures you've shared are accurate. And in terms of the retention trend, we don't see any reason why we believe this is going to accelerate in any way. With regards to our strategy, we've been very clear. We're building on a position of strength with our mid-market business and enterprise. And the reason is very simple. The capabilities that we're building suit a complexity that is more appropriate of companies that have in more complex use cases, more use cases. And as a result, over time, we will see SMBs probably dilute. But we have many SMBs that are very happy customers, and we maintain them as such. And I don't have any information that makes me believe that, let's say, loss of SMB customers should accelerate at this point.

Got it. OK, thanks, Alessio. Just a small question here. In the script, you talked about instances where procurement teams are tapping the brakes and bringing deals to sign off. And a majority of that is from macro use or majority. So I'm wondering, what else are you seeing outside of macro? Is there anything on competition? Is it decisions on products with an AI flavor taking a bit longer just Anything else that that you're that you're seeing there that might be impacting sort of the topping of the breaks, thanks.

Yeah, for sure. So macro plays a a very significant role in in all of this decision. Scrutiny is is not a new factor in this environment, but certainly some industries as described before have taken a prudent position again in light of the. frankly daily uncertainty that many have been subject to. I think another element that plays into this, and I believe it's a very temporary element that will resolve itself from a maturity curve standpoint, is the one of AI readiness. Not so much of us on the selling part, but of the buyers themselves. What we see is that while the businesses, meaning the people that want the products, are very AI-first. The procurement officers, the GRC teams, the risk teams are not always aligned already, if you will, with this posture. And so there is sometimes a disconnect in the buying journey between what the customers are looking for and what the, let's say, legal ramifications of the house are. are ready to embrace and so it's a lot of education it's a lot of you know working through steps with legal teams with the it teams with risk teams and frankly as we continue to do this we become better and better and better and frankly we see this also on the on the flip side as we buy ourselves uh ai technologies at the table we experienced this with our legal team really looking into how to best ask the right questions to these providers i believe it's a part of a natural cycle that will resolve itself and does remind me a little bit of the era of on-prem to cloud when procurement teams We're very, let's say, not ready at first to embrace SaaS providers, and then it became the de facto standard. Roger.

Thanks, Alessio.

Our next question comes from Gavin Fairweather from Cormark. Please go ahead. Your line is open.

Oh, hey. Thanks for taking my questions. Maybe just on the Gov side with ATO completed and DOGE seeming to calm down a little bit. Curious if you're seeing any change in the pace of sales processes, and maybe you can just discuss your expectations for the flow of RFPs over the next year.

Hey, Gavin. Hi, Gavin. So just as a reminder, if we zoom out on the FedRAMP opportunity just for a second. So a couple of weeks ago, we announced we received authority to operate, which is ATO status. And what that means for us is that essentially it unlocks the opportunity to bid and win contracts as if we're fully authorized. You know, since the introduction of DOGE, we've actually seen a step function change where the FedRAMP PMO office is moving faster. So if you look at our previously communicated timeline, we expected to receive ATO status at the end of Q3, and we received it well in advance of where we expected. Full authorization usually takes or previously took six to 12 months after ATO, and now we expect to get that closer to the six-month mark, if not sooner. There's also some positive news where the White House last week, or roughly last month in April, put out an executive order where they're essentially telling the federal departments to favor off-the-shelf SaaS solutions over on-prem. That's definitely all playing in our favor. The pipeline growth since we received ATO, we've been surprised by. We're building the pipe. We even have an expansion opportunity with our sponsoring agency. So we continue to be very excited about this opportunity.

Very helpful. And then just my second question, just on CAAC paybacks, they've been impacted by the renewal cycle that you're moving through. But I'm curious how those are trending on a gross bookings basis, if you could discuss that. And then, secondly, how do you think about a target CAC payback for this business in more of a kind of normal environment, given your shift up market and the building partner network?

From a CAC perspective, on a new logo perspective, it's certainly not where we want it to be. We realize we're never going to get back to the CAC levels we were during the COVID era, where there were some natural efficiencies in our operating model. At the same time, we think where we are now versus where we used to be, somewhere in the middle of that is the right target operating model. Now we're doing a lot of things to become more efficient. We are now fully staffed from an enterprise perspective. We're investing in Gov and expect that to pay off in 2026. And, you know, we're really focused on pipeline conversion, improvement in win rates. And as we take a deeper look into our go-to-market, we see a lot of opportunities for continued efficiency and continued improvement from a CAC perspective.

Thanks so much.

Our next question comes from Yi-Fu Lee from Cantor Fitzgerald. Please go ahead. Your line is open.

Thank you for taking my question, and good morning, Alexio and Brandon. So a couple of questions for Alexio first. Like kicking off from the Inspire event, obviously well attended. Attendance on the prospect is 3x higher. Was wondering if you could give us some of the feedback you received from the event and how is the pipeline building process on that, Alexio? You know, in terms of, you know, having the pipeline built and converting throughout the year. And then the second piece, of my question is on the product side, Alex. I mean, you spoke pretty bullish on the Atlantic Automation Harmony Co-Pilot. I was wondering, obviously, it's in the early phase. When will this opportunity be more monetizable, be more material? And then I have a follow up with Brenda on the financial side.

So, great question, and let me start with the experience of the Cebu Inspire, which you attended and were able to witness the infectious energy around the conference. First, you know, let me say one thing about this conference. It started historically as a Docebo customer conference, and it's becoming an industry conference, de facto standard. I myself have met customers, but as you pointed correctly, prospects, which have increased very materially year over year, and certainly serving as a lead generation and sales acceleration platform for us, but also industry experts and analysts. We had in the room some of the most recognized industry experts in the field. So we take a lot of pride in building not just a conference, but an incredible experience. During INSPIRE, as you said well, we've announced and committed beyond announced because if one can announce things, and not put a date to it. For each and every single thing that we spoke about, we were bullish in saying whether it's live already or very shortly live, meaning a week or a month, or for the medium term. So customers have really appreciated that. Some of the feedback that has been the most enthusiastic, frankly, has varied across a few categories. The one that continues to be an area of real interest from customers is relative to the Cebo Creator. Creator, I think, is a very symbolic example of our renewed AI first vision because it's not just simply about creating the content which one could superficially attribute to it. It goes well beyond it. Creator is a real creator of learning experiences. You can go in Creator now and create videos from simple text. You can convert text into fully narrated podcasts. You can do things that were unimaginable just a year ago. And customers are really... you know, pleased not only with all those capabilities, but also with the fact that we've made a strategic and frankly bold decision to include creators for every customer. And we've done it on the basis of a belief that if we have customers happy and creating content within our platform and not having to leave the platform to create content, we have not only happier customers, but also stickier customers. The second wow at the conference was relative to our UX plan. Let's face it, the Chabos UX, because we have such an enterprise depth, has become complex on the administrative side. And we ourselves know that when that happens, administrators get overwhelmed. So we've announced a deeper work of our administrative features, and the customers are really, really happy about that. It shows in our MPS scores, and it shows in all the feedback we've been given. And finally, just because otherwise they take a lot of time, this is a question that I'm very passionate about, agent and agentic and monetization. So in the summer, we are launching our first agency in platform to improve platform operation. They will take care of automating and enabling the capabilities as our administrators sleep. My goal over time, this is a journey, it's not a sprint, is that the Cebo becomes a manageable platform that allows agents to do the work and creative people to be creative and not waste their time spending endless amount of hours enrolling users into courses. We will enable automation in all of this. From a monetization standpoint, my focus is building the best learning platform out there. Monetization is absolutely important. um and it's not a second thought however our priority is shipping a product that makes people happy monetization will come we're introducing a credits-based system already for the first time in our history on the ai video presenter capability so we're starting to introduce we're logical and we're aligned with the way buyers buy uh some consumption form But, you know, again, agents are something that first we need to ship. We need to prove that they solve customer problems and they really have ROI for our customers. At that point, when value meets business processes and it's in the hands of customers, monetization will be very simple.

Got it. Got it. Thanks for that, Alex. I extremely appreciate that really comprehensive answer. And then on the financial side, I understood you de-risked some of the guidance for, you know, 2025. I was wondering how much conservatism have you placed on, you know, this revision? You know, considering, you know, we had the headwinds, the renewal headwinds, 1Q, has that been ended? We have the AWS headwind. And then on the flip side, the upside, you have the Fed Rep. It sounds like It takes six to nine months, but you envision on the low end side, six months, right? So we presume by September, maybe, you get FedRAMP certified. And I assume that you're building a pipeline. When will that show the upside from the FedRAMP as well to offset that? So basically, your conservatism on the guidance. Thomas, on that.

Yeah, I would certainly say we took a more measured approach. Some of the items you just mentioned are not factored into our guide. We certainly do not have a material amount of FedRAMP revenues expected for 2025. So if that does materialize, that will be upside. And we continue to guide in a way where we do not include whale deals in our forecast. So if we see certain large deals, which I'm talking about deals over a million error closed in the given year, that will be upside to the guide as well. But, you know, as I mentioned, we're reacting to what we're seeing in the macro, and we feel this is a measured approach and, you know, with upside potential with the items I discussed.

Got it. Thanks for that, Brendan, and thanks for that, Alexio.

Thank you.

Thank you. Thank you.

We have no further questions. I would like to turn the call back over to Alessio Artufo for closing remarks.

The excitement at Cebo is at the peak. We're not just improving the LMS, we're reimagining the future of learning with an AI-first learning platform that aims at solving real, life business problems and again giving back the time and the power to learning professionals the team at the cheb is super excited our customers are thrilled about the innovation we're rapidly bringing to the market we appreciate your time and we look forward to the next call and thank you very much this concludes today's conference call thanks for your participation you may now disconnect