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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2024
Commission File Number 001-39750

DOCEBO INC.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name)

366 Adelaide St. West
Suite 701
Toronto, Ontario, Canada M5V 1R7
(800) 681-4601
(Address and telephone number of registrant’s principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F☐Form 40-F☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____




INCORPORATION BY REFERENCE

Exhibits 99.1, 99.2, 99.4 and 99.5 of this Form 6-K are incorporated by reference to the registrant's Registration Statement on Form F-10 (File No. 333-251046), the registrant’s Registration Statement on Form S-8 (File No. 333-251417) and the registrant’s Registration Statement on Form F-3 (File No. 333-262000).


DOCUMENTS INCLUDED AS PART OF THIS REPORT

Exhibit
99.1
99.2
99.3
99.4
99.5
101.INSInline XBRL Instance Document.
101.SCHInline XBRL Taxonomy Schema Linkbase Document.
101.CALInline XBRL Taxonomy Calculation Linkbase Document.
101.DEFInline XBRL Taxonomy Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Docebo Inc.
Date:November 8, 2024By:/s/ Sukaran Mehta
Name:Sukaran Mehta
Title:Chief Financial Officer

                                                                                                                                                                    
DOCEBO INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(expressed in thousands of United States dollars)


September 30,December 31,
2024
2023
$$
Assets
Current assets:
Cash and cash equivalents82,033 71,950 
Trade and other receivables (Note 4)
40,282 41,775 
Income taxes receivable207 964 
Prepaids and deposits10,512 5,987 
Net investment in finance lease 66 83 
Contract costs, net
7,715 6,394 
140,815 127,153 
Non-current assets:
Contract costs, net
12,092 10,750 
Net investment in finance lease— 45 
Deferred tax asset
1,328 325 
Right-of-use assets, net (Note 5)
1,538 1,342 
Property and equipment, net (Note 6)
2,161 2,108 
Intangible assets, net (Note 7)
1,882 2,401 
Goodwill (Note 8)
14,320 14,251 
174,136 158,375 
Liabilities
Current liabilities:
Trade and other payables30,946 31,663 
Automatic share repurchase plan liability (Note 10)
18,170 — 
Income taxes payable289 251 
Deferred revenue
72,912 67,268 
Lease obligations (Note 5)
1,703 1,470 
Acquisition holdback payables826 — 
124,846 100,652 
Non-current liabilities:
Acquisition holdback payables— 1,045 
Deferred revenue
154 617 
Lease obligations (Note 5)
325 639 
Employee benefit obligations
3,755 3,285 
Deferred tax liability
— 1,416 
129,080 107,654 
Shareholders’ equity
Share capital (Note 10)
250,108 247,496 
Contributed surplus18,517 13,960 
Accumulated other comprehensive loss
(6,529)(5,946)
Deficit
(217,040)(204,789)
Total equity45,056 50,721 
174,136 158,375 
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

1
DOCEBO INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME
(expressed in thousands of United States dollars, except per share amounts)
Three months ended
September 30,
Nine months ended
September 30,
202420232024
2023
$$$$
Revenue (Note 13)
55,433 46,506 159,890 131,559 
Cost of revenue (Note 14)
10,462 8,779 30,645 25,243 
Gross profit44,971 37,727 129,245 106,316 
Operating expenses
General and administrative 8,384 8,317 24,715 25,218 
Sales and marketing17,759 16,221 51,087 51,041 
Research and development11,153 10,271 32,331 26,456 
Share-based compensation (Note 11)
1,815 1,845 5,670 4,438 
Foreign exchange loss (gain)
266 (3,092)(544)1,365 
Depreciation and amortization (Note 5, 6 and 7)
877 1,056 2,519 2,587 
40,254 34,618 115,778 111,105 
Operating income (loss)
4,717 3,109 13,467 (4,789)
Finance income, net (Note 9)
(623)(1,933)(1,839)(6,506)
Other (income) expense, net
(1)(2)(16)181 
Income before income taxes
5,341 5,044 15,322 1,536 
Income tax expense
382 997 496 1,918 
Net income (loss)
4,959 4,047 14,826 (382)
Other comprehensive (income) loss
Item that may be reclassified subsequently to income:
Exchange (gain) loss on translation of foreign operations
(761)3,776 583 (592)
Comprehensive income
5,720 271 14,243 210 
Earnings per share - basic (Note 12)
0.16 0.12 0.49(0.01)
Earnings per share - diluted (Note 12)
0.16 0.12 0.48(0.01)
Weighted average number of common shares outstanding - basic (Note 12)
30,221,380 32,474,975 30,296,756 32,907,374 
Weighted average number of common shares outstanding - diluted (Note 12)
30,940,172 33,513,101 31,013,951 32,907,374 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

2
DOCEBO INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(expressed in thousands of United States dollars, except number of shares)

Share capitalContributed surplus
Accumulated other comprehensive loss
Deficit
Total
#$$$$$
Balance, December 31, 2022
32,913,955 268,194 8,458 (9,571)(74,870)192,211 
Exercise of stock options (Note 10 and 11)
194,188 1,018 (318)— — 700 
Share-based compensation (Note 11)
— — 4,438 — — 4,438 
Share issuance under employee share purchase plan (Note 10 and 11)
16,685 614 (90)— — 524 
Release of restricted share units (Note 10 and 11)
19,744 851 (851)— — — 
Issuance of common shares related to business combination50,550 1,625 — — — 1,625 
Shares repurchased for cancellation (Note 10)
(1,333,361)(10,659)— — (40,586)(51,245)
Share repurchase commitment under the automatic share purchase plan (Note 10)
— — — — (12,763)(12,763)
Comprehensive income (loss)— — — 592 (382)210 
Balance, September 30, 2023
31,861,761 261,643 11,637 (8,979)(128,601)135,700 
Balance, December 31, 2023
30,305,156 247,496 13,960 (5,946)(204,789)50,721 
Exercise of stock options (Note 10 and 11)
72,924 1,826 (571)— — 1,255 
Share-based compensation (Note 11)
— — 5,670 — — 5,670 
Share issuance under employee share purchase plan (Note 10 and 11)
14,426 613 (91)— — 522 
Release of restricted share units (Note 10 and 11)
54,776 2,054 (2,054)— — — 
Release of shares in escrow related to business combination (Note 10)
8,728 330 (330)— — — 
Shares repurchased for cancellation (Note 10)
(282,494)(2,211)— — (8,907)(11,118)
Share repurchase commitment under the automatic share purchase plan (Note 10)
— — — — (18,170)(18,170)
Excess tax benefit on stock compensation— — 1,933 — — 1,933 
Comprehensive (loss) income
— — — (583)14,826 14,243 
Balance, September 30, 2024
30,173,516 250,108 18,517 (6,529)(217,040)45,056 
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

3
DOCEBO INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(expressed in thousands of United States dollars)

Nine months ended
September 30,
2024
2023
$$
Cash flows from operating activities
Net income (loss)
14,826 (382)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization2,519 2,587 
Share-based compensation5,670 4,438 
Loss (gain) on disposal of asset
(10)197 
Unrealized foreign exchange (gain) loss
(1,231)723 
Income tax expense
496 1,918 
Finance income, net
(1,839)(6,506)
Changes in non-cash working capital items:
Trade and other receivables1,993 (2,321)
Prepaids and deposits(4,496)(1,178)
Contract costs, net
(2,654)(4,188)
Trade and other payables(819)5,201 
Employee benefit obligations430 461 
Deferred revenue4,903 9,171 
Income taxes paid(266)(633)
Cash from operating activities
19,522 9,488 
Cash flows used in investing activities
Purchase of property and equipment(958)(386)
Payments related to acquisitions(250)(216)
Acquisition of business, net of cash acquired— (8,671)
Cash used in investing activities
(1,208)(9,273)
Cash flows used in financing activities
Payments received on net investment in finance lease62 84 
Repayment of lease obligations(1,460)(1,319)
Interest received1,795 5,636 
Proceeds from exercise of stock options1,255 700 
Proceeds from share issuance under employee share purchase plan522 524 
Shares repurchased for cancellation(11,023)(51,245)
Cash used in financing activities
(8,849)(45,620)
Net change in cash and cash equivalents during the period
9,465 (45,405)
Effect of foreign exchange on cash and cash equivalents618 (240)
Cash and cash equivalents, beginning of the period
71,950 216,293 
Cash and cash equivalents, end of the period
82,033 170,648 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

4
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
1Nature of business

Docebo Inc. (“Docebo” or the “Company”), a leading learning platform provider, was incorporated on April 21, 2016 under the Canada Business Corporations Act and is domiciled in Ontario, Canada. The Company’s head office is located at Suite 701, 366 Adelaide Street West, Toronto, Canada, M5V 1R9.

The Company’s shares are listed on both the Toronto Stock Exchange (“TSX”), as of October 8, 2019, and the Nasdaq Global Select Market (“Nasdaq”), as of December 3, 2020, under the stock symbol “DCBO”.

The Company has the following subsidiaries:

Entity nameCountry
Ownership percentage
September 30,
2024
Ownership percentage
December 31, 2023
%%
Docebo S.p.AItaly100100
Docebo NA, Inc.United States100100
Docebo EMEA FZ-LLCDubai100100
Docebo UK LimitedEngland100100
Docebo France Société par Actions Simplifiée (“Docebo France”)France100100
Docebo DACH GmbH (“Docebo Germany”)Germany100100
Docebo Australia Pty Ltd. ("Docebo Australia")Australia100100
Docebo Ireland LimitedIreland100100
Circles Collective Inc. ("PeerBoard")United States100100
Edugo AI HK Limited ("Edugo.AI")Hong Kong100100
Edugo AI Learning Software Limited ("Edugo.AI LS")1
Dubai6060

1Edugo AI Learning Software Limited was incorporated on October 3, 2023. As of September 30, 2024, the value of the identifiable net assets was nil. As such, no non-controlling interest was recognized.

2Basis of preparation

Statement of compliance

The unaudited condensed consolidated interim financial statements (“financial statements”) have been prepared by management using the same accounting policies and methods as those used in the Company’s consolidated financial statements for the year ended December 31, 2023. These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 – Interim Financial Reporting. Accordingly, certain disclosures normally included in annual financial statements prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) have been omitted or condensed. These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2023.

These financial statements were approved and authorized for issuance by the Board of Directors of the Company on November 7, 2024.

Use of estimates, assumptions and judgments

The preparation of these financial statements in conformity with IFRS requires management to make estimates, assumptions and judgments that affect the application of accounting policies and the reported amounts of assets and

5
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from those estimates.

Estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In preparing these financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of uncertainty are the same as those applied and described in the Company’s annual audited consolidated financial statements for the year ended December 31, 2023.

3Summary of material accounting policies

The material accounting policies applied in these financial statements are the same as those applied and described in the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2023.

4Trade and other receivables

The Company’s trade and other receivables as at September 30, 2024 and December 31, 2023 include the following:
2024
2023
$$
Trade receivables34,082 36,355 
Accrued revenues4,157 3,486 
Tax credits receivable1,625 1,890 
Interest receivable189 — 
Other receivables229 44 
40,282 41,775 

Included in trade receivables is a provision for expected credit losses of $1,408 as at September 30, 2024 and $1,053 as at December 31, 2023.

5Leases

The Company’s right-of-use assets by class of assets are as follows:
PremisesOthersTotal
$$$
Costs
Balance – December 31, 2023
5,1543325,486
Additions1,273—1,273
Modifications to and disposals of lease contracts(236)(154)(390)
Effects of foreign exchange(17)(3)(20)
Balance – September 30, 2024
6,1741756,349

6
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
PremisesOthersTotal
Accumulated amortization
Balance – December 31, 2023
3,8862584,144
Amortization1,055201,075
Modifications to and disposals of lease contracts(217)(154)(371)
Effects of foreign exchange(54)17(37)
Balance – September 30, 2024
4,6701414,811
Carrying value
Net balance – December 31, 2023
1,268741,342
Net balance – September 30, 2024
1,504341,538

The Company’s lease obligations are as follows:
2024
$
Balance – January 12,109 
Additions1,273 
Disposals(29)
Interest accretion114 
Lease repayments(1,460)
Effects of foreign exchange21 
Balance -September 30
2,028 
Current1,703 
Non-current325 
2,028 

Expenses incurred for the three and nine months ended September 30, 2024 relating to short-term leases and leases of low-value assets were $23 and $77, respectively (2023 - $22 and $90).


7
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
6Property and equipment
Furniture and office equipmentLeasehold improvementsLand and BuildingTotal
$$$$
Cost
Balance – December 31, 2023
3,598 1,973 348 5,919 
Additions769 189 — 958 
Effects of foreign exchange36 21 11 68 
Balance – September 30, 2024
4,403 2,183 359 6,945 
Accumulated depreciation
Balance – December 31, 2023
2,382 1,328 101 3,811 
Depreciation665 249 9 923 
Effects of foreign exchange28 18 4 50 
Balance – September 30, 2024
3,075 1,595 114 4,784 
Carrying value
Balance – December 31, 2023
1,216 645 247 2,108 
Balance – September 30, 2024
1,328 588 245 2,161 

7Intangible assets
Acquired
Customer relationshipsTechnologyTrademarksTotal
$$$$
Cost
Balance – December 31, 2023
1,382 2,349 44 3,775 
Effects of foreign exchange16 6 1 23 
Balance – September 30, 2024
1,398 2,355 45 3,798 
Accumulated amortization
Balance – December 31, 2023
729 601 44 1,374 
Amortization170 351 — 521 
Effects of foreign exchange14 6 1 21 
Balance – September 30, 2024
913 958 45 1,916 
Carrying value
Balance – December 31, 2023
653 1,748 — 2,401 
Balance – September 30, 2024
485 1,397 — 1,882 

8Goodwill

$
Balance – December 31, 2023
14,251 
Effects of foreign exchange69 
Balance – September 30, 2024
14,320 

8
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)

9Finance income, net

Finance income for the three and nine months ended September 30, 2024 and 2023 is comprised of:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Interest on acquisition related consideration11 28 32 64 
Interest on lease obligations36 51 114 163 
Interest income(670)(2,012)(1,985)(6,733)
(623)(1,933)(1,839)(6,506)

10Share capital
Authorized:
Unlimited common shares with no par value
Issued and outstanding:
Number of shares
Amount
#$
Balance – December 31, 2023
30,305,156 247,496 
Exercise of stock options72,924 1,826 
Issuance of common shares under employee share purchase plan14,426 613 
Release of restricted share units54,776 2,054 
Release of shares in escrow related to business combination (i)
8,728 330 
Purchase of common shares held for cancellation (ii)
(282,494)(2,211)
Balance – September 30, 2024
30,173,516 250,108 

(i) Purchase consideration for the acquisition of Circles Collective Inc. (O/A PeerBoard) included the issuance of an additional 26,185 common shares, at a fair value of $40.74 (C$51.68) per share, payable through April 2026 to an employee of the acquiree contingent on continued employment and is accounted for as compensation for post-acquisition services. On April 3, 2024, 8,728 of the shares were released from escrow and recognized in share capital.

(ii) On May 6, 2024, the Company renewed its normal course issuer bid (“NCIB”) to repurchase and cancel up to 1,764,037 of its common shares, representing approximately 10% of the public float, over the 12-month period commencing May 20, 2024, and ending no later than May 19, 2025. All repurchases are made through the facilities of the Toronto Stock Exchange and are done at market prices. The amounts paid in excess of the average book value of the common shares are charged to deficit. During the nine months ended September 30, 2024, the Company repurchased a total of 282,494 common shares for cancellation at an average price of $39.01 (C$53.04) per common share for total cash consideration of $11,023 including transaction costs.

In connection with the NCIB, the Company entered into an automatic share purchase plan ("ASPP") with a designated broker for the purpose of allowing the Company to purchase its common shares under the NCIB during self-imposed trading blackout periods. Under the ASPP, the broker is authorized to repurchase common shares during blackout periods, without consultation with the Company, on predefined terms, including share price, time period and subject to other limitations imposed by the Company and subject to rules and policies of the TSX and applicable securities laws, such as a daily purchase restriction.

A liability, representing the maximum amount that the Company could be required to pay the designated broker

9
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
under the ASPP, was recorded for $18,170 as at September 30, 2024. The offsetting amount to the liability has been recorded within deficit.

11Share-based compensation

The Company has four components of its share-based compensation plan: stock options, deferred share units (“DSUs”), restricted share units (“RSUs”), and employee share purchase plan (“ESPP”). Share-based compensation expense for the three and nine months ended September 30, 2024 was $1,815 and $5,670, respectively (2023 - $1,845 and $4,438). The expense associated with each component is as follows:

Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Stock options713 743 2,290 1,769 
DSUs263 269 778 722 
RSUs811 806 2,526 1,862 
ESPP28 27 76 85 
1,815 1,845 5,670 4,438 

The following table presents share-based compensation expense by function for the three and nine months ended September 30:

Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Cost of revenue91 90 241 206 
General and administrative1,245 1,005 3,662 2,530 
Sales and marketing268 552 1,104 1,056 
Research and development211 198 663 646 
1,815 1,845 5,670 4,438 

The changes in the number of stock options during the nine months ended September 30, 2024 and 2023 were as follows:
2024
2023
Number of optionsWeighted average exercise priceNumber of optionsWeighted average exercise price
#C$#C$
Options outstanding – January 1825,091 28.37 1,349,001 13.60 
Options granted205,076 61.61 236,753 52.15 
Options forfeited(40,519)61.97 (98,570)42.67 
Options exercised(72,924)22.78 (194,188)4.88 
Options expired(1,037)49.84 — — 
Options outstanding – September 30
915,687 34.75 1,292,996 19.75 
Options exercisable – September 30
498,973 20.01 850,250 7.59 

The weighted average fair value of share options granted during the nine months ended September 30, 2024 and 2023 was estimated at the date of grant using the Black-Scholes option pricing model using the following inputs:


10
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
2024
2023
C$C$
Weighted average stock price valuation$61.61 $52.15 
Weighted average exercise price$61.61 $52.15 
Risk-free interest rate3.56 %3.11 %
Expected life in years4.54.5
Expected dividend yield— %— %
Volatility57 %64 %
Weighted average fair value of options issued$30.71 $28.15 

The following table is a summary of the Company’s stock options outstanding as at September 30, 2024:
Options outstandingOptions exercisable
Exercise price rangeNumber outstandingWeighted average remaining contractual life (years)Exercise price rangeNumber exercisable
C$##C$#
0.0001 - 1.09
235,320 1.98
0.0001 - 1.09
235,320 
8.86 - 11.06
23,985 6.24
8.86 - 11.06
21,242 
15.79 - 16.00
119,981 5.02
15.79 - 16.00
80,413 
26.43 - 60.00
436,293 5.05
26.43 - 60.00
149,790 
60.01 - 95.12
100,108 4.56
60.01 - 95.12
12,208 
915,687 4.24498,973 

The following table is a summary of the Company’s stock options outstanding as at September 30, 2023:
Options outstandingOptions exercisable
Exercise price rangeNumber outstandingWeighted average remaining contractual life (years)Exercise price rangeNumber exercisable
C$##C$#
0.0001 - 1.09
639,920 2.13
0.0001 - 1.09
639,920 
8.86 - 11.06
43,811 7.16
8.86 - 11.06
27,126 
15.79 - 16.00
196,930 5.82
15.79 - 16.00
107,481 
26.43 - 60.00
374,010 5.84
26.43 - 60.00
58,316 
60.01 - 95.12
38,325 5.40
60.01 -95.12
17,407 
1,292,996 4.03850,250 

DSUs

The following table presents information concerning the number of DSUs granted by the Company:
#
DSUs – December 31, 2023
115,576 
Granted (at C$51.95 - C$68.04 per unit)
26,257 
DSUs - September 30, 2024
141,833 


11
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
RSUs

The following table presents information concerning the number of RSUs granted by the Company:
#
RSUs – December 31, 2023
160,150 
Granted (at C$50.39 - C$73.54 per unit)
102,196 
Released (at C$40.30 - $86.38 per unit)
(54,776)
Forfeited (at C$52.15 - $86.38 per unit)
(17,958)
RSUs - September 30, 2024
189,612 

12Earnings per share

Basic and diluted net income per share for the three and nine months ended September 30 are calculated as follows:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
Net income attributable to common shareholders4,959 4,047 $14,826 $(382)
Basic weighted average number of common shares outstanding30,221,380 32,474,975 30,296,756 32,907,374 
Stock options365,478 730,652 390,798 — 
DSUs141,106 113,272 124,898 — 
RSUs212,208 194,202 201,499 — 
Diluted weighted average number of common shares outstanding30,940,172 33,513,101 31,013,951 32,907,374 
Basic earnings per common share$0.16 $0.12 $0.49 $(0.01)
Diluted earnings per common share$0.16 $0.12 $0.48 $(0.01)

For the three and nine months ended September 30, 2024, there were 46,831 and 33,744 stock options, respectively, (three and nine months ended September 30, 2023 - 87,867 and all stock options, respectively) that were not taken into account in the calculation of diluted earnings per share because their effect was anti-dilutive.

13Revenue and related balances

Disaggregated revenue

The Company derives its revenues from two main sources, subscription to its SaaS application and associated premium support services, and professional services revenue, which includes services such as initial implementation, project management, training, and integration.

The following table presents a disaggregation of revenue for the three and nine months ended September 30:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Subscription revenue52,615 43,588 150,326 123,278 
Professional services2,818 2,918 9,564 8,281 
55,433 46,506 159,890 131,559 


12
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
14Cost of revenue

The following table represents cost of revenue for the three and nine months ended September 30:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Employee salaries and benefits4,786 4,576 14,646 13,875 
Web hosting fees1,629 1,299 4,701 3,701 
Third party service fees3,764 2,605 10,383 6,878 
Other283 299 915 789 
10,462 8,779 30,645 25,243 

15Employee compensation

The total employee compensation comprising salaries and benefits, and excluding share-based compensation, for the three and nine months ended September 30, 2024 was $29,172 and $85,731, respectively (2023 - $27,104 and $81,927).
Employee compensation costs were included in the following expenses for the three and nine months ended September 30, 2024 and 2023 is as follows:    
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Cost of revenue4,786 4,576 14,646 13,875 
General and administrative4,476 4,089 12,792 11,909 
Sales and marketing12,296 11,380 35,231 35,957 
Research and development7,614 7,059 23,062 20,186 
29,172 27,104 85,731 81,927 

16Related party transactions

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling activities of the Company, directly or indirectly. Key management personnel includes the Company’s Directors and Officers.

Compensation awarded to key management personnel for the three and nine months ended September 30, 2024 and 2023 is as follows:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Salaries and benefits688 1,308 2,166 3,589 
Share-based compensation845 1,108 2,554 3,245 
1,533 2,416 4,720 6,834 

17Financial instruments and risk management


13
DOCEBO INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
September 30, 2024
(expressed in thousands of US dollars, except share amounts)
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from deposits with banks and outstanding receivables. The Company trades only with recognized, creditworthy third parties. Due to the Company’s diversified customer base, there is no particular concentration of credit risk related to the Company’s trade and other receivables. Trade and other receivables are monitored on an ongoing basis to ensure timely collection of amounts.

The carrying values of cash and cash equivalents, trade and other receivables, and trade and other payables approximate fair values due to the short-term nature of these items or being carried at fair value. The risk of material change in fair value is not considered to be significant. The Company does not use derivative financial instruments to manage this risk.

During the three and nine months ended September 30, 2024, there were no transfers of amounts between levels in the fair value hierarchy.

18Segment information

The Company reports segment information based on internal reports used by the chief operating decision maker (“CODM”) to make operating and resource allocation decisions and to assess performance. The CODM is the Chief Executive Officer. The CODM makes decisions and assesses performance of the Company on a consolidated basis such that the Company is a single reportable operating segment.

The following tables present details on revenues derived in the following geographical locations for the three and nine months ended September 30, 2024 and 2023.

Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
North America41,674 35,462 120,954 99,834 
Rest of World
13,759 11,044 38,936 31,725 
55,433 46,506 159,890 131,559 


14

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

As used in this management’s discussion and analysis of financial condition and results of operations (“MD&A”), unless the context indicates or requires otherwise, all references to the “Company”, “Docebo”, “we”, “us” or “our” refer to Docebo Inc., together with our subsidiaries, on a consolidated basis as constituted on September 30, 2024.

This MD&A for the three and nine months ended September 30, 2024 and 2023 should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and accompanying notes thereto for the three and nine months ended September 30, 2024 and 2023, and the Company's audited annual consolidated financial statements and accompanying notes thereto for the year ended December 31, 2023. The financial information presented in this MD&A is derived from the Company’s unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2024 and 2023 which have been prepared in accordance with IFRS Accounting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are in thousands of United States dollars except where otherwise indicated.

This MD&A is dated as of November 7, 2024.

Forward-looking Information

This MD&A contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may relate to our future financial outlook and anticipated events or results and may include information regarding our financial position, business strategy, macroeconomic conditions and global economic uncertainty, war and inflation, including actions of Central banks to contain it, on our business, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information.

In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or, “will”, “occur” or “be achieved”, and similar words or the negative of these terms and similar terminology. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

This forward-looking information includes, but is not limited to, statements regarding the Company’s business; future financial position and business strategy; the learning management industry; our growth rates and growth strategies; addressable markets for our solutions; the achievement of advances in and expansion of our platform; expectations regarding our revenue and the revenue generation potential of our platform and other products; our business plans and strategies; use of artificial intelligence (“AI”) in our platform and its impact on the Company’s business; and our competitive position in our industry; and our expectations regarding a key OEM customer’s intentions to reduce subscriptions for our solution. This forward-looking information is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions include: our ability to build our market share and enter new markets and industry verticals; our ability to attract and retain key personnel; our ability to maintain and expand geographic scope; our ability to execute on our expansion plans, including the continued incorporation of AI into our platform; our ability to continue investing in infrastructure to support our growth; our ability to obtain and maintain existing financing on acceptable terms; our
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ability to execute on profitability initiatives; our ability to successfully integrate the companies we have acquired and to derive the benefits we expect from the acquisition thereof; currency exchange and interest rates; the impact of inflation and global macroeconomic conditions; the impact of competition; our ability to respond to the changes and trends in our industry or the global economy; and the changes in laws, rules, regulations, and global standards are material factors made in preparing forward-looking information and management’s expectations.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that, while considered by the Company to be appropriate and reasonable as of the date of this MD&A, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to:
•the Company’s ability to execute its growth strategies;
•the impact of changing conditions in the global corporate e-learning market;
•increasing competition in the global corporate e-learning market in which the Company operates;
•fluctuations in currency exchange rates and volatility in financial markets;
•the Company’s ability to operate its business and effectively manage its growth under evolving macroeconomic conditions, such as high inflation and recessionary environments;
•fluctuations in the length and complexity of the sales cycle for our platform, especially for sales to larger enterprises;
•issues in the use of AI in our platform and potential resulting reputational harm or liability;
•changes in the attitudes, financial condition and demand of our target market;
•developments and changes in applicable laws and regulations;
•such other factors discussed in greater detail under the “Risk Factors” section of our Annual Information Form dated February 22, 2024 (“AIF”), which is available under our profile on SEDAR+ at www.sedarplus.ca.

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The opinions, estimates or assumptions referred to above and described in greater detail in “Summary of Factors Affecting our Performance” and in the “Risk Factors” section of our AIF, should be considered carefully by prospective investors.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this MD&A represents our expectations as of the date specified herein, and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

All of the forward-looking information contained in this MD&A is expressly qualified by the foregoing cautionary statements.

Additional information relating to Docebo, including our AIF, can be found on SEDAR+ at www.sedarplus.ca.

Overview

At Docebo, our mission is to redefine the way enterprises, including their internal and external workforces, partners and customers, learn by applying new technologies to the traditional corporate Learning Management System (“LMS”) market. Founded in 2005, Docebo is a powerful learning platform, built for the business of learning. Docebo helps organizations around the world deliver scalable, personalized learning to customers, partners, and
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employees, driving productivity, engagement, revenue, and growth. The Docebo Platform is stable and intuitive, with innovative technology for content generation, automation, and analytics, along with the industry’s most advanced AI capabilities. This enables businesses to create and manage content, effectively train diverse audiences, and measure the impact of their learning programs, all from a single platform.

Our platform is now used by more than 3,900 companies of all sizes, providing access to learners situated around the world in a variety of languages. Our customers range from Small and Medium Sized Businesses (SMBs) to large globally distributed enterprises in a wide variety of industries. We have registered offices in Toronto, Canada, Athens, Georgia (USA), Wilmington, Delaware (USA), Biassono, Italy, Dubai, United Arab Emirates, London, England, Paris, France, Frankfurt, Germany, Melbourne, Australia, and Dublin, Ireland. Our platform is sold primarily through a direct sales force located in several of these offices. We also have relationships with channel, service, technology and systems integrator partners around the world.

The Docebo Learning Platform currently includes the following capabilities: (i) “Learning Management and Delivery”, (ii) “Content Marketplace”, (iii) “Insights”, (iv) “Learning Evaluation”, (v) “Advanced Analytics”, (vi) “Communities”, (vii) “eCommerce”, (viii) “Integrations” and (ix) “Docebo Flow”.

The Docebo Learning Platform is a cloud-based solution that allows learning administrators to deliver scalable and flexible personalized learning experiences, from formal training to social learning, to multiple internal, external and blended audiences.

Docebo’s Content Marketplace allows learning administrators to access the industry’s best off-the-shelf learning content and provide their learners with high-quality, predeveloped learning content. Learning administrators can partner with a Docebo Content specialist to help curate the right resources from our library of 40,000+ courses.

The Insights module allows organizations to understand the results of their learning programs with data visualizations that are straightforward and actionable. With features like modern interactive dashboards for Super Admins and Power User, it offers a centralized source for all learning analytics needs. Customers can swiftly build, discover, and share meaningful insights, enabling quick and impactful decision-making on learning performance based on a single, reliable source of truth.

The Learning Evaluation module empowers learning administrators to incorporate the learner’s perspective into their analyses by facilitating the collection of feedback. This feedback enables organizations to demonstrate and enhance the effectiveness of their training programs while validating their investment in learning. Gain insights into how learning influences employee experience and performance through a combination of pre-built and custom questionnaires, tailored evaluation processes, and relevant learning benchmarks and metrics.

The Advanced Analytics Pack combines two essential tools for organizations ready to elevate their learning data and analytics. It offers seamless integration of learning data into any data ecosystem and Business Intelligence (BI) tool, allowing organizations to incorporate their learning and development data into a central repository. This integration helps them understand how learning impacts their business and contributes to their goals. Additionally, it unlocks a powerful BI tool within the Docebo platform, equipping Learning and Development teams with the resources they need to create customized metrics tailored to their specific needs. With advanced features at their fingertips, teams can confidently make data-driven decisions whenever necessary.

The Communities module seamlessly integrates a dynamic hub into the learning environment, enabling interactive learner communities to become a central part of the learning experience. With features like Q&A functionality, forums, spaces, personalized member profiles, rich moderation tools, and 1:1 messaging, the Communities module fosters a collaborative and engaging learning atmosphere. Designed to enhance both knowledge sharing and community interaction, it enriches the overall learning journey by driving collaboration and creating a strong sense of belonging among users.

The eCommerce module allows administrators to monetize from digital training contents, seamlessly managing and selling training offerings—whether it is courses, subscriptions, or content licensing—all from a single platform. With centralized control over pricing, catalog management, and discounts, admins can create public landing pages to
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boost content visibility and customize learning by branch or group. Learners benefit from flexible purchasing options, including Training Credits, coupons, and discounts, ensuring a smooth, personalized buying experience through secure transactions across multiple payment gateways.

Docebo Integrations allow organizations to integrate Docebo with other business systems across their tech stack to improve the learner experience, drive efficiencies and scale learning programs. Connect with SSO, webinar tools, HR systems and more with off-the-shelf options or build and customize your own integrations and workflows for more unique requirements.

Docebo Flow allows businesses to build learning experiences outside of the Docebo learning environment in their own products or web environments so people can access learning where and when they need it, without having to switch between tools.

Additional modules can also be purchased for specific use cases and needs, including: “Docebo for Salesforce”, “Docebo Embed (OEM)”, “Docebo Mobile App Publisher”, and “Docebo for Microsoft Teams”. Docebo for Salesforce is a native integration that leverages Salesforce’s API and technology architecture to produce a learning experience that remains uniform no matter the use-case. Docebo Embed (OEM) eliminates disjointed learner experiences, long development cycles and ineffective partner models by allowing original equipment manufacturers (“OEMs”) to embed and re-sell the Docebo learning platform as a part of their software, including human capital management (“HCM”), risk management and retail/hospitality SaaS products. Docebo’s Mobile App Publisher product allows companies to create their own branded version of the award-winning “Docebo Go.Learn” mobile learning application and publish it as their own in Apple’s App Store, the Google Play Store or in their own Apple Store for Enterprise. Docebo Extended Enterprise breeds customer education, partner enablement, and retention by allowing customers to train multiple external audiences with a single LMS solution. Lastly, Docebo for Microsoft Teams is designed to remove barriers to learning, drive adoption and increase productivity by bringing learning directly into Microsoft Teams, where people at organizations who use this as their collaboration tool, already spend a large part of their time.

We generate revenue primarily from the provision of access to our platform, which is typically provided on the basis of an annual subscription fee and prepaid on a quarterly, semi-annual, or annual basis. We offer our customers the flexibility to choose annual or multi-year contract terms, with the majority of our enterprise customers choosing multi-year terms. This results in a relatively smooth revenue curve with good visibility into near-term revenue growth. We typically enter into subscription agreements with our customers, with pricing based on the number of active or registered users, with minimum user commitment levels, in a measured time period, and the number of modules requested by the customer. Our goal is to continue to grow revenues arising from our existing customer base as well as adding new subscription customers to our platform. Our business does not have significant seasonal attributes, although historically sales in the fourth quarter have tended to be slightly stronger than the first three. The Company operates on a global basis and for this reason has decided to report its consolidated financial results in U.S. dollars notwithstanding that the Company’s functional currency is the Canadian dollar. The Company does not currently hedge its exposure to currencies different than its functional currency.

The Company’s shares are listed under the symbol “DCBO” on both the Toronto Stock Exchange, as of October 8, 2019, following the completion of its initial public offering in Canada (the “TSX IPO”) and the Nasdaq Global Select Market (the “Nasdaq”), as of December 3, 2020, following the completion of its initial public offering in the United States (the “Nasdaq IPO” and together with the TSX IPO, the “IPOs”).

Non-IFRS Measures and Reconciliation of Non-IFRS Measures

This MD&A makes reference to certain non-IFRS measures including key performance indicators used by management and typically used by our competitors in the software-as-a-service (“SaaS”) industry. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore not necessarily comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. These non-IFRS measures
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are used to provide investors with alternative measures of our operating performance and liquidity and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including SaaS industry metrics, in the evaluation of companies in the SaaS industry. Management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation. The non-IFRS measures referred to in this MD&A include “Annual Recurring Revenue”, “Average Contract Value”, “Adjusted EBITDA”, “Adjusted Net Income”, “Adjusted Earnings per Share - Basic and Diluted”, “Working Capital” and “Free Cash Flow”.

Key Performance Indicators

We recognize subscription revenues ratably over the term of the subscription period under the provisions of our agreements with customers. The terms of our agreements, combined with high customer retention rates, provides us with a significant degree of visibility into our near-term revenues. Management uses a number of metrics, including the ones identified below, to measure the Company’s performance and customer trends, which are used to prepare financial plans and shape future strategy. Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.

Annual Recurring Revenue. We define Annual Recurring Revenue as the annualized equivalent value of the subscription revenue of all existing contracts (including OEM contracts) as at the date being measured, excluding non-recurring revenues from implementation, support and maintenance fees. Our customers generally enter into annual or multi-year contracts which are non-cancellable or cancellable with penalty. Accordingly, our calculation of Annual Recurring Revenue assumes that customers will renew the contractual commitments on a periodic basis as those commitments come up for renewal. Subscription agreements may be subject to price increases upon renewal reflecting both inflationary increases and the additional value provided by our solutions. In addition to the expected increase in subscription revenue from price increases over time, existing customers may subscribe for additional features, learners or services during the term. We believe that this measure provides a fair real-time measure of performance in a subscription-based environment. Annual Recurring Revenue provides us with visibility for consistent and predictable growth to our cash flows. Our strong total revenue growth coupled with increasing Annual Recurring Revenue indicates the continued strength in the expansion of our business and will continue to be our focus on a go-forward basis.

Average Contract Value. Average Contract Value is calculated as total Annual Recurring Revenue divided by the number of active customers.

Annual Recurring Revenue and Average Contract Value as at September 30 were as follows:
2024
2023
Change Change %
Annual Recurring Revenue (in millions of US dollars)214.1181.832.317.8%
Average Contract Value (in thousands of US dollars)
54.3
49.4
4.99.9%

Adjusted EBITDA

Adjusted EBITDA is defined as net income excluding net finance income, depreciation and amortization, income taxes, share-based compensation and related payroll taxes, other income, foreign exchange gains and losses, acquisition related compensation, transaction related expenses and restructuring costs, if any.

The IFRS measure most directly comparable to Adjusted EBITDA presented in our financial statements is net income.

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The following table reconciles Adjusted EBITDA to net income (loss) for the periods indicated:
Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Net income (loss)
4,959 4,047 14,826 (382)
Finance income, net(1)
(623)(1,933)(1,839)(6,506)
Depreciation and amortization(2)
877 1,056 2,519 2,587 
Income tax expense
382 997 496 1,918 
Share-based compensation(3)
1,815 1,845 5,670 4,438 
Other (income) expense, net(4)
(1)(2)(16)181 
Foreign exchange loss (gain)(5)
266 (3,092)(544)1,365 
Acquisition related payments(6)
1,005 1,258 2,989 2,246 
Transaction related expenses(7)
— 271 — 1,081 
Restructuring(8)
— 65 — 2,849 
Adjusted EBITDA8,680 4,512 24,101 9,777 
Adjusted EBITDA as a percentage of total revenue15.7 %9.7 %15.1 %7.4 %

(1)Finance income, net, is primarily related to interest income earned on cash and cash equivalents as the funds are invested in highly liquid short-term interest-bearing marketable securities which is offset by interest expenses incurred on lease obligations, and contingent consideration as well as bank fees and other expenses.

(2)Depreciation and amortization expense is primarily related to depreciation expense on right-of-use assets (“ROU assets”), property and equipment and acquired intangible assets.

(3)These expenses represent non-cash expenditures recognized in connection with the issuance of share-based compensation to our employees and directors and cash payroll taxes paid on gains earned by option holders when stock options are exercised.

(4)Other (income) expense, net is primarily comprised of rental income from subleasing office space.

(5)These non-cash gains and losses relate to foreign exchange translation.

(6)These costs represent the earn-out portion of the consideration paid to the vendors of previously acquired businesses that is associated with the achievement of certain acquisition related performance and other obligations.

(7)These expenses relate to professional, legal, consulting, accounting and other fees related to acquisition activities that would otherwise have not been incurred and are not considered an expense indicative of continuing operations.

(8)    There was a reduction in workforce during the second quarter of 2023 that resulted in severance payments to employees. Certain functions and the associated management structure were reorganized to realize synergies and ensure organizational agility.


Adjusted Net Income and Adjusted Earnings per Share - Basic and Diluted

Adjusted Net Income is defined as net income excluding amortization of intangible assets, share-based compensation and related payroll taxes, acquisition related compensation, transaction related expenses, restructuring costs, foreign exchange gains and losses, and income taxes.

Adjusted Earnings per share - basic and diluted is defined as Adjusted Net Income divided by the weighted average number of common shares (basic and diluted).

The IFRS measure most directly comparable to Adjusted Net Income presented in our financial statements is net income.

The following table reconciles net income (loss) to Adjusted Net Income for the periods indicated:

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Three months ended September 30,
Nine months ended September 30,
2024
2023
2024
2023
$$$$
Net income (loss)
4,959 4,047 14,826 (382)
Amortization of intangible assets176 381 521 692 
Share-based compensation1,815 1,845 5,670 4,438 
Acquisition related compensation1,005 1,258 2,989 2,246 
Transaction related expenses— 271 — 1,081 
Restructuring— 65 — 2,849 
Foreign exchange loss (gain)
266 (3,092)(544)1,365 
Income tax expense (recovery) related to adjustments(1)
34 177 (4)567 
Adjusted net income8,255 4,952 23,458 12,856 
Weighted average number of common shares - basic30,221,38032,474,97530,296,75632,907,374
Weighted average number of common shares - diluted30,940,17233,513,10131,013,95132,907,374
Adjusted earnings per share - basic0.270.15 0.77 0.39 
Adjusted earnings per share - diluted0.270.15 0.76 0.39 
(1) This line item reflects income tax expense on taxable adjustments using the tax rate of the applicable jurisdiction.

See “Liquidity, Capital Resources and Financing - Working Capital” and “Liquidity, Capital Resources and Financing - Free Cash Flow” in this MD&A for an explanation of Working Capital and Free Cash Flow (and, in the case of Free Cash Flow, a reconciliation of such measure to the most directly comparable IFRS measure presented in our financial statements).

Summary of Factors Affecting Our Performance

We believe that the growth and future success of our business depends on many factors, including those described below. While each of these factors presents significant opportunities for our business, they also pose important challenges, some of which are discussed below and in the “Risk Factors” section of the AIF.

Market adoption of cloud-based learning solutions may not grow as we expect, which may harm our business and results of operations and even if market demand for such solutions increases, the demand for our platform may not increase.

We believe our future success will depend in part on the growth, if any, in the demand for cloud-based learning management solutions, particularly enterprise-grade solutions. The widespread adoption of our platform depends not only on strong demand for new forms of learning management, but also for solutions delivered via a SaaS business model in particular. The market for cloud-based learning solutions is less mature than the market for in-person learning solutions, which many businesses currently use, and these businesses may be slow or unwilling to migrate from these legacy approaches. As such, it is difficult to predict customer demand for our platform, customer adoption and renewal, the rate at which existing customers expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive products into the market, or the success of existing competitive products. We offer our customers the flexibility to choose annual or multi-year contract terms. Although our contracts generally contain cancellation penalties, the difficulty and costs associated with switching to a competitor may not be significant for certain customers. New customers joining our platform may also decide not to continue or renew their subscription for reasons outside of our control. Furthermore, even if businesses want to adopt a cloud-based technology learning solution, it may take them a long time to fully transition to this type of learning solution or they could be delayed due to budget constraints, weakening economic conditions, or other factors. A portion of our customer basis is comprised of SMBs. We may experience customer turnover in respect of such SMBs, which are more susceptible than larger businesses to changes in general economic conditions and other risks affecting their businesses. Many of these SMBs may be in the entrepreneurial stage of their development and there is no guarantee that their businesses will succeed. Such customers may be particularly susceptible to uncertainty in the macroeconomic environment, including with respect to inflationary pressures, changes in consumer spending, exchange rate fluctuations, and increases of interest rates. Some businesses may also have long-
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term contracts with existing vendors and cannot switch in the short term. Even if market demand for cloud-based technology learning solutions generally increases, we can make no assurance that adoption of our platform will also increase. If the market for cloud-based technology learning solutions does not grow as we expect or our platform does not achieve widespread adoption it could result in reduced customer spending, customer attrition, and decreased revenue, any of which would adversely affect our business and results of operations. We further believe that a significant portion of our market capitalization is based on our revenue growth rate. If we are unable to continue growing our revenues, or if new revenues are offset by the rate at which existing customers cancel, do not renew or downgrade their recurring subscriptions (known in the industry as “churn”), our market capitalization may be negatively impacted.

Natural disasters, public health crises, political crises, or other catastrophic or adverse events, including adverse and uncertain macroeconomic conditions may adversely affect our business, operating results or financial position.

Natural disasters, such as earthquakes, hurricanes, tornadoes, floods, and other adverse weather and climate conditions; unforeseen public health crises, and other pandemics and epidemics; political crises, such as terrorist attacks, war, and other political instability; or other catastrophic events, have and could in the future disrupt our operations or the operations of one or more of our third-party providers and vendors.

Additionally, our business and results of operations have been, and may continue to be, impacted by recent adverse and uncertain macroeconomic conditions, including higher inflation, higher interest rates, and fluctuations or volatility in capital markets or foreign currency exchange rates, the collapse of financial institutions and related uncertainty regarding geopolitical events such as the ongoing conflict between Russia and Ukraine as well as Israel and the surrounding area. In particular, we have experienced in certain instances, and may continue to experience, longer sales cycles or generally increased scrutiny on spending from existing and potential customers due to macroeconomic uncertainty. We cannot be certain how long these uncertain macroeconomic conditions and the resulting effects on our industry, our business strategy, and customers will persist.

If we fail to retain key employees or to recruit qualified technical and sales personnel, our business could be harmed.

We believe that our success depends on the continued employment of our senior management and other key employees. In addition, because our future success is dependent on our ability to continue to enhance and introduce new platform features, we are heavily dependent on our ability to attract and retain qualified personnel with the requisite education, background, and industry experience. As we expand our business, our continued success will also depend, in part, on our ability to attract and retain qualified sales, marketing, and operational personnel capable of supporting a larger and more diverse customer base. We and our competitors continue to face significant turnover in our employee base. Qualified individuals are in high demand in our industry, and we may incur significant costs to attract and retain them. The loss of the services of a significant number of our technology or sales personnel could be disruptive to our business development efforts or customer relationships. In addition, if any of our key employees join a competitor or decides to otherwise compete with us, we may experience a material disruption of our operations and business strategy, which may cause us to lose customers or increase operating expenses and may divert our attention as we seek to recruit replacements for the departed employees. Further, changes we make to our current and future work environments may not meet the needs or expectations of our employees or may be perceived as less favourable compared to other companies’ policies, which could negatively impact our ability to hire and retain qualified personnel. Our future work strategy and continued efforts related to employee onboarding, training and development and retention may not be successful. Further, our future work strategy is continuing to evolve and may not meet the needs of our existing and potential future employees and they may prefer work models offered by other companies.

If our customers do not expand their use of our platform beyond their current organizational engagements or renew their existing contracts with us, our ability to grow our business and improve our results of operations may be adversely affected.

Our future success depends, in part, on our ability to increase the adoption of our platform by our existing customers and future customers. Many of our customers initially use our platform in specific groups or departments within
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their organization. In addition, our customers may initially use our platform for a specific use case. Our ability to grow our business depends in part on our ability to persuade customers to expand their use of our platform to address additional use cases. Further, to continue to grow our business, it is important that our customers renew their subscriptions when existing contracts expire and that we expand our relationships with our existing customers. Our customers have no obligation to renew their subscriptions, and our customers may decide not to renew their subscriptions with a similar contract period, at the same prices and terms, with the same or a greater number of learners, or at all. In the past, some of our customers have elected not to renew their agreements with us, and it is difficult to accurately predict whether we will have future success in retaining customers or expanding our relationships with them. We have experienced significant growth in the number of learners of our platform, but we do not know whether we will continue to achieve similar learner growth in the future, or whether learner growth could be offset by increased churn. Our ability to retain our customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our platform, our customer support, our prices, the prices and features of competing solutions, reductions in our customers’ spending levels, insufficient learner adoption of our platform, and new feature releases. If our customers do not purchase additional subscriptions or renew their existing subscriptions, renew on less favorable terms, or fail to continue to expand their engagement with our platform, our revenue may decline or grow less quickly than anticipated, which would harm our results of operations.

Our sales cycles can be unpredictable, and our sales efforts require considerable time and expense. As a result, the timing of our billings and revenue are difficult to predict and may vary substantially from period to period, which may cause our results of operations to fluctuate significantly.

Our results of operations may fluctuate, in part, because of the resource intensive nature of our sales efforts, the length and variability of our sales cycle, and difficulty in adjusting our operating expenses in the short term. The length of our sales cycle, from identification of the opportunity to delivery of access to our platform, can vary from customer to customer, with sales to larger businesses typically taking longer to complete. In addition, as we increase our sales to larger businesses, we face longer more complex customer requirements, and substantial upfront sales costs. With larger businesses, the decision to subscribe to our platform frequently requires the approvals of multiple management personnel and more technical personnel than would be typical of a smaller organization and, accordingly, sales to larger businesses may require us to invest more time educating these potential customers. Purchases by larger businesses are also frequently subject to budget constraints and unplanned administrative, processing, and other delays, which means we may not be able to come to agreement on the terms of the sale to larger businesses. If there is a reduction in information technology spending, due to weak economic conditions or otherwise, it may take several months, or even several quarters, for marketing opportunities to materialize.

To the extent our competitors develop products that our prospective customers view as equivalent or superior to our platform, our average sales cycle may increase. Additionally, if a key sales member leaves our employment or if our primary point of contact at a customer or potential customers leaves his or her employment, our sales cycle may be further extended or customer opportunities may be lost. As a result of the buying behavior of enterprises and the efforts of our sales force and partners to meet or exceed their sales objectives by the end of each fiscal quarter, we may generate a substantial portion of billings towards the end of each fiscal quarter. If a customer’s decision to purchase our platform is delayed or if the implementation of our platform takes longer than originally anticipated, the date on which we may recognize revenues from these transactions may be delayed. The unpredictability of the timing of customer purchases, particularly large purchases, could cause our billings and revenue to vary from period to period or to fall below expected levels for a given period, which will adversely affect our business, results of operations, and financial condition.

We may not receive significant revenue as a result of our current research and development efforts.

We reinvest a large percentage of our revenue in research and development, including AI. Our investment in our current research and development efforts may not provide a sufficient, timely return. We make and will continue to make significant investments in software research and development and related product opportunities. Investments in new technology and processes are inherently speculative. Commercial success depends on many factors including the degree of innovation of the products developed through our research and development efforts, sufficient support from our strategic partners, and effective distribution and marketing. Accelerated product introductions and short
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product life cycles require high levels of expenditures for research and development. These expenditures may materially adversely affect our operating results if they are not offset by revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts in order to maintain our competitive position. However, significant revenue from new product and service investments may not be achieved for a number of years, if at all. Moreover, new products and services may not be profitable.

We believe our long-term success depends in part on continuing to expand our international sales and operations and we are therefore subject to a number of risks associated with international sales and operations.

We intend to continue expanding our international operations. In order to maintain and expand our sales internationally, we need to hire and train experienced personnel to staff and manage our foreign operations. To the extent that we experience difficulties in recruiting, training, managing, and retaining international staff, and specifically sales and marketing personnel, we may experience difficulties in growing our international sales.

Additionally, our international sales are subject to a number of risks, including, but not limited to, the following:

•unexpected costs and errors in tailoring our products for individual markets, including translation into foreign languages and adaptation for local practices;

•difficulties in adapting to customer desires due to language and cultural differences;

•new and different sources of competition;

•increased financial accounting and reporting burdens and complexities;

•increased expenses associated with international sales and operations, including establishing and maintaining office space and equipment for our international operations;

•lack of familiarity and burdens of complying with foreign laws, legal standards, privacy standards, regulatory requirements, tariffs, and other barriers;

•greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;

•practical difficulties of enforcing intellectual property rights in countries with fluctuating laws and standards and reduced or varied protection for intellectual property rights in some countries;

•unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties, or other trade restrictions;

•limitations on technology infrastructure, which could limit our ability to migrate international operations to our existing systems, which could result in increased costs;

•difficulties in managing and staffing international operations and differing employer/employee relationships and local employment laws;

•fluctuations in exchange rates that may increase the volatility of our foreign-based revenue; and

•potentially adverse tax consequences, including the complexities of foreign value added tax (or other tax) systems and restrictions on the repatriation of earnings.

Additionally, operating in international markets also requires significant management attention and financial resources. We plan to continue investing substantial time and resources to expand our international operations, but we cannot be certain that these investments will produce desired levels of revenue or profitability. These factors and other factors could harm our ability to gain future international revenue and, consequently, materially affect our business, results of operations, and financial condition.
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We may face exposure to foreign currency exchange rate fluctuations which may affect certain of our key performance indicators and our results of operations.

Revenues and operating expenses outside of Canada are often denominated in local functional currencies. Additionally, as we expand our international operations, we report our financial results in US dollars. Therefore, fluctuations in the value of the foreign currencies, including but not limited to the Canadian dollar, when translated into US dollars may have a significant impact on certain of our key performance indicators, including but not limited to our Annual Recurring Revenue, or otherwise affect our results of operations. We do not currently engage in currency hedging activities to limit the risk of unfavourable exchange rate fluctuations. In the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates. The use of such hedging activities may not offset any or more than a portion of the adverse financial effects of unfavourable movements in foreign exchange rates over the limited time the hedges are in place. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments.

Our growth depends in part on the success of our strategic relationships with strategic partners as well as our ability to successfully integrate our platform with third party applications.

In addition to growing our direct sales channels, we intend to pursue additional relationships with strategic partners, which includes OEMs, Value Added Resellers, system integrators and service partners. Identifying the proper strategic partners will be essential to this growth strategy. Negotiating and documenting relationships with appropriate strategic partners will require significant time and resources, as will integrating third-party content and technology. Our agreements with strategic partners may not prohibit them from working with our competitors or from offering competing services. Our competitors may be effective in providing incentives to strategic partners to favour their products or services or to prevent or reduce subscriptions to our solution, including through a simple integration. In addition, these distributors and providers may not perform as expected under our agreements, and we have had, and may in the future have, disagreements or disputes with such distributors and providers, which could negatively affect our brand and reputation. In addition, acquisitions of our strategic partners by our competitors or acquisitions by our strategic partners of our competitors could end our strategic relationship with the acquired or strategic partner and result in a decrease in the number of our current and potential customers. For example, in January 2024, an OEM partner that contributed approximately 9% of our 2023 revenue announced that it had acquired a competitive learning experience platform software provider. We took legal measures to enforce the terms of the agreement, and the parties amicably resolved the dispute on a confidential basis and agreed to dismiss the litigation. However, we expect the OEM customer to favor its acquired product for its end customers over time, which we expect will result in reduced