Docebo Inc

Docebo Inc (TSX: DCBO) is a software & computer services company based out of Canada. It offers E-learning platform powered by AI (artificial intelligence). The learning platform provided by the Company is easy-to-use and customizable for training customers, partners and external workforces.

Financial Highlights – First Quarter of the Financial Year 2020 (31^st March 2020, USD, thousand)

(Source: Quarterly Report, Company Website)

In the first quarter of the financial year 2020, driven by an increase in the revenue from professional services and subscription businesses for the period, the revenue surged by 57 per cent to USD 13,530 thousand as against USD 8,636 thousand in Q1 FY2019. The gross profit surged from USD 6,785 thousand in Q1 of the financial year 2019 to USD 10,697 thousand in Q1 FY2020. The Group reported an operating income of USD 717 thousand in Q1 FY2020 versus an operating loss of USD 1,859 thousand in Q1 FY2019, reflecting a strong increase in revenue for the period. The PBT (profit before tax) stood at USD 819 thousand in Q1 FY2020 versus an LBT (loss before tax) of USD 2,538 thousand in Q1 FY2019. The net income stood at USD 743 thousand in Q1 FY2020 versus a net loss of USD 2,538 thousand in Q1 FY2019. The Group’s cash balance as on 31^st March 2020 stood at USD 43,171 thousand versus USD 46,278 thousand as on 31^st December 2019.

Share Price Performance

Daily Chart as of 16^th June 2020, after the market closed (Source: Refinitiv, Thomson Reuters)

Docebo Inc shares were trading at CAD 29.21 at the time of writing before the market close on 17^th June 2020. Stock's 52 weeks High is CAD 29.49 and Low is CAD 10.30.

Conclusion

The Company continues to implement the strategy and business model to deliver returns. The Group, through its wide-ranging scope, had accelerated growth organically and through acquisitions and strategic partnerships. It has shown an increase in the financial performance for the first quarter of the financial year 2020. Both the top-line and the bottom-line performance have improved, with an increase in the profitability for the period. The revenue from core operations has increased for the period, while the cash balance has declined. The Annual Recurring Revenue increased by 56 per cent in the Q1 FY2020. The Group secured a credit facility of USD 15 million from Toronto-Dominion Bank, which will provide additional liquidity to meet working capital requirements. The Group operations are impacted by the outbreak of covid-19 pandemic and have been focusing on strengthening its balance sheet and return with capital discipline and reducing its costs.

Based on the above rationale, we have given a “Hold” recommendation at the closing price of CAD 29.21 (as on 17^th June 2020).

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