DCBO — Q2 2026 Financial Report Analysis

Docebo, the Toronto-based corporate-training software company, grew Q2 2026 revenue 13% to $68.7 million and beat its own guidance on both revenue and adjusted EBITDA, then raised its full-year revenue outlook for the second quarter running. But reported (IFRS) profit went the other way: net income fell 27% to $2.3 million and diluted EPS slipped to $0.08 from $0.10, as amortization from two acquisitions, interest on new borrowings and a larger currency loss ate into the gain. The quarter is a story of a company deliberately trading a cash-rich, debt-free balance sheet for acquisitions and buybacks.

At a glance

• Revenue +13% to $68.7M (about 1 point from a weaker US dollar) — ahead of the $66.7–66.9M Docebo guided to in May, with the January purchase of 365Talents contributing to growth.
• ARR +9.5% to $255.1M — annual recurring revenue, the yearly value of all active subscriptions, is growing slower than revenue because the company's largest OEM (resale) customer keeps shrinking; excluding it, acquisitions and FX, Docebo puts ARR growth at about 13.9%.
• Net debt of about $42M — $88.0M borrowed against $45.7M cash at June 30, versus a net-cash position at the end of 2025, after spending on two acquisitions and a $60M share buyback.

Results

Figures in US dollars; Docebo reports under IFRS (international accounting standards) as a Canadian company filing with the SEC on Form 6-K.

What drove the quarter

Revenue. Subscription revenue — about 93% of the total — rose $6.8M, which management attributes to "new customers, existing customers and the acquisition of 365Talents," a French skills-intelligence software maker bought in January for $60.4M. Professional services (implementation work) jumped 31% to $4.8M, which the filing ties to "increased traction in the enterprise market, resulting in a greater number of implementations." Customer wins listed in the release are mostly large organizations: a security-services company with 130,000 staff, an automotive-safety supplier with 70,000 employees, a global consulting firm and several US state agencies.

Gross margin slipped. Cost of revenue rose 22%, faster than sales, "primarily driven by an increase in professional services revenues leading to higher third party service fees." Implementation work is lower-margin than software subscriptions, so the faster-growing services line pulls the blended margin down — gross margin fell from 80.9% to 79.4%.

Operating costs. Sales and marketing rose 11% ($2.2M), partly restructuring costs and 365Talents' expenses. General and administrative rose 13%, "a significant portion" from transaction and restructuring costs. Research and development was nearly flat (+2%). The bigger drags sat below the usual cost lines: depreciation and amortization went from $0.8M to $2.2M, mostly amortization of intangible assets from the 365Talents and Zive acquisitions (Zive is a German AI knowledge platform bought on April 2), and the foreign-exchange loss widened to $2.3M from $0.9M. Together those turned 13% revenue growth into a 38% drop in operating income.

Below the operating line. Net finance costs swung from $0.5M of income to $1.1M of expense — Docebo used to earn interest on its cash; it now pays interest on its revolving credit facility. Pre-tax income fell 68% to $1.5M. A $0.8M tax recovery (versus a $1.6M tax expense a year ago) is what kept net income at $2.3M.

What the headline numbers hide

• Adjusted EBITDA is up, IFRS profit is down — and the gap is wide. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization, also excluding stock compensation and one-offs) grew 22% to $11.2M; net income fell 27%. The $9.0M of difference in the quarter is made of interest ($1.1M), D&A ($2.2M), stock-based pay ($2.5M, up 42% as restricted share units vested), the FX loss ($2.3M), earn-out payments to sellers of acquired companies ($0.9M), deal fees ($0.5M) and restructuring ($0.3M), less the tax recovery. Restructuring is not a one-time item here: it was $6.5M in the first half and $4.5M in the first half of 2025.
• Adjusted EPS growth came mostly from buybacks. Adjusted net income rose only 5.4%, but adjusted diluted EPS rose 20.7% because the diluted share count fell 11% (26.8M vs 30.2M). Docebo repurchased $79.4M of shares in the first half, including a $60M tender offer at $20.40 a share completed in March. A second tender offer launched in July for up to $70M drew only about $2.5M of shares at $25.00 (announced September 11) — the controlling shareholder, Intercap, holds about 63.7% and tendered almost nothing.
• Cash conversion was weak this quarter but fine over six months. Operating cash flow was negative $3.1M in Q2 (versus +$6.2M a year ago), which the filing puts down to "the timing of payments to vendors." For the half year, operating cash flow was $21.7M against net income of $0.6M — normal for a subscription business that bills upfront. Note that the company's "free cash flow" of $3.1M in Q2 adds back $6.3M of restructuring, earn-out and deal-fee payments; operating cash flow minus equipment purchases, with no add-backs, was about -$3.2M.
• Fewer, bigger customers. Average contract value is defined as ARR divided by active customers, so the reported figures imply roughly 3,400 active customers versus roughly 4,000 a year ago — a drop of about 14% while ARR grew. Docebo is concentrating on large enterprise accounts; the filing's risk section flags the risk of turnover among smaller-business customers. Docebo does not disclose net revenue retention in this filing, so how much of the ARR gain came from expanding existing accounts can't be checked directly.
• The OEM headwind is nearly behind it. The largest OEM customer (a partner that embeds Docebo in its own product, which the MD&A says intends "to continue to reduce subscriptions") fell to 2.5% of ARR from 8.4% a year earlier — roughly $6M of ARR now versus roughly $20M. That runoff is why reported ARR growth (9.5%) lags the underlying 13.9%; with only ~$6M left to lose, the drag on reported growth should shrink.
• The balance sheet changed character. Cash fell to $45.7M from $74.0M at year-end while borrowings rose from zero to $88.0M; Docebo enlarged its revolving credit facility to $150M in June. Working capital is negative $30.2M. Neither is alarming for a business with prepaid subscriptions, but the interest bill is now a real line item.

Takeaway: The core business beat its own targets — revenue and adjusted EBITDA both came in above guidance and underlying ARR growth held near 14% — but shareholders are getting their per-share growth mainly from a debt-funded buyback, while IFRS earnings are being squeezed by acquisition amortization, interest and recurring "one-off" restructuring.

Outlook

Management raised full-year 2026 guidance for revenue but not for profit:

For Q3 it guided to total revenue of $69.5–69.7M, subscription revenue of $64.9–65.1M and adjusted EBITDA of $15.9–16.1M. The guidance assumes the largest OEM customer is 3–4% of 2026 revenue and 365Talents contributes about $9M.

Our read: the revenue outlook looks achievable — Q2 cleared its guide by roughly $2M, and the midpoints imply Q4 revenue of about $71.6M, a modest step up. The profit outlook is the harder part. First-half adjusted EBITDA was $22.2M (a 16.6% margin); hitting the full-year midpoint needs about $33M in the second half, i.e. Q3 at roughly 23% of revenue and Q4 near 24%. That depends on the restructuring savings actually showing up and on 365Talents (which lost about $3.9M in the first half) moving toward breakeven. Q3 results, likely in early November on the usual cadence (Q2 came out August 7), are the test: watch whether adjusted EBITDA reaches the $16M guide, whether ARR excluding the OEM customer keeps growing near 14%, and whether restructuring charges finally stop recurring.