Good morning, everyone, and welcome to the Docebo's 2023 Third Quarter Earnings Call. All participants are currently in a listen-only mode. We will open the lines for a question-and-answer session for analysts following the presentation. Instructions will be provided at that time for research analysts to ask questions. We ask that analysts, please limit themselves to two questions and return to the queue for any follow-ups. I would now like to turn the call over to Docebo, Vice President of Investor Relations, Mike McCarthy. Please go ahead, Mike.

Thank you, operator. Before we begin, Docebo would like to remind listeners that certain information discussed today 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 SEDAR+ 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 US dollars. Now, I'd like to turn the call over to Docebo's CEO, Claudio Erba. Claudio?

Hi, everybody, and thank you for joining us for our third quarter earnings call. With me today, Alessio Artuffo, our President and COO; and Sukaran Mehta, our CFO. I will begin our call this morning with a short summary of our Q3 results and business update. We are pleased to report that subscription revenue increased by 27% and total revenues grew by 26% in September quarter with the total revenues exceeding the upper end of our guidance range. Net ARR added during the quarter was $10.1 million, after adjusting for the impact of foreign exchange. ARR growth was solid, reflecting our strength in horizontal go-to-market motion across the enterprise segment as well as the government vertical. The table continued to demonstrate a profitable, high-growth business with adjusted EBITDA exceeding our guidance. We delivered an adjusted EBITDA margin of 9.7% and as well as a solid free cash flow of 18% of revenue during the quarter. In general, global macroeconomic trends have remained consistent through the year with larger, more complex deals still taking time to finalize, but we did not see any notable deterioration in our pipeline in the enterprise segment remains strong. SMB customers continue to be cautious. Geographically, the US was a more active market compared to Europe, which was seasonably slower during Q3. After three-year [Indiscernible], we hosted a record number of participants at tower annual customer conference, Docebo Inspire in Nashville. It was exciting to see this community of current and potential new customers bring with them their interest for learning and their interest in the cable platform. During this event, we announced four new platform update that included the Docebo Microsoft Team, Docebo Community Hub, Docebo Learning Site, and the preview of the TableShape 2.0. The Docebo for Microsoft Team enable learning in the floor.…

Thank you, Claudio, and good morning, everyone. Let me first go over some of our key KPIs this quarter. Company-wide average contract value increased 11% to $49,400 from around $44,600 in quarter three of last year. ACV for new customers in the quarter was about $70,500 compared to $61,000 in the June period. Enterprise customers with deal values over $100,000 in ARR, accounting for approximately 55% of gross ARR generated in the third quarter. 41% of these new customers have chosen the Docebo for three or more use cases, again, highlighting the real impact of our platform, as well as our ability to meet the complex needs of our customers. External and hybrid use cases make up more than half of our pipeline. Expanding our reach into these enterprise customers is also enabled by our growing partnerships with large system integrators, who were a strategic part of both enterprise and government contract wins during quarter three. From a customer retention perspective, growth and net retention KPIs held relatively flat from quarter two. In terms of customer acquisition cost, CAC, and sales efficiency, we achieved significant improvements in our quarter three results. Sales and marketing accounted for 34.9% of total revenue, a decrease from 37.8% in the previous quarter. These improvements are a result of specific actions taken earlier this year, which focused on enhancing the effectiveness of our enterprise go-to-market strategy and optimizing the design of our global sales organization. These actions include; number one, significant improvements in our demand generation results in the Enterprise segment through business development and account-based management ABM. However, there is still plenty of room for further improvement in other areas. Secondly, we're benefiting from the successful implementation of our data and overall go-to-market systems, including but not limited to our updated CRM Salesforce. These…

Thank you, Alessio, and good morning, everyone. For those interested, a detailed breakdown of our financial results for the three and nine months ended September 30th, 2023, can be found in our press release, MD&A, and financial statements, which are now available on our website and are also filed on SEDAR and EDGAR. Total revenue for the third quarter grew to $46.5 million, an increase of 26% from the prior year and exceeded our guided range. Subscription revenues were $43.6 million, representing 94% of total revenue for the quarter and an increase of 27% from the prior year. Annual recurring revenue added during the quarter was $10.1 million after adjusting for the negative impact of $1.2 million, given the strengthening of the US dollar relative to foreign currency. ARR at the close of Q3 was $181.8 million, an increase of 26%. We added 88 net new customers in Q3 and ended the quarter with a total of 3,679 customers, an increase of 13% year-over-year. Average contract value was approximately $49,000 for the third quarter, an increase from $48,000 in the second quarter of 2023 and an increase of 11% year-over-year. The growth in average contract value is being driven by our continued expansion into the enterprise customer segment with ACV of $100,000 and above. Gross profit margin for the third quarter improved by 40 basis points year-over-year to 81.1% of revenue and was relatively consistent with the prior quarter. Total operating expenses for the third quarter increased to $34.6 million from $20.8 million in the prior year period. During the third quarter, we recorded $1.6 million in one-time costs, mainly related to the acquisition-related earn-outs that are excluded from our adjusted EBITDA calculation. Our restructuring activities were completed during the quarter. G&A as a percentage of revenue decreased to 17.9%…

Thank you, ladies and gentlemen. [Operator Instructions] Your first question comes from Suthan Sukumar from Stifel. Please go ahead.

Good morning guys, and congrats on the very strong results this morning. Pretty impressive to see the net new ARR adds coming quite strong along with a nice uptick in your ACV. I had a question that brought our overall go-to market. It's good to hear that your direct sales motion is having more impact. But it also sounds like you're -- there's a growing role that your SI partners are playing here. How are they sort of helping you evolve your overall go-to-market strategy in the enterprise? And as you work with these partners, are they helping you provide you guys with more visibility into next year just given where enterprise spending trends are going? Just thoughts there?

Hello, Suthan, thank you for the question, and I appreciate the nice words. Partnering with a size has always been a goal of ours. This required some overarching maturity, product and services-wise because in order to be a compelling partner for SI, you have to have a certain size of the company, certain target customers and the product that suits itself to delivering high value for these companies that are looking to maximize on their services revenue and consulting capabilities. With that said, there is no doubt that working with these companies gives us a longer term view on our enterprise opportunities when we work with them on deals. I believe we're quite early in our journey and working with Sis, there's a lot more work that needs and will be done. That needs to be done and will be done. I would say, in the area of size, one of the latest evidences of early success is what we are also accomplishing not only in the commercial segment, but also in the government segment, where we have got an extremely close with the top four SI consulting firm that is giving us the ability to really accelerate our entry in both the sled and fed market. So, overall, I would say our view of the SI market is an area of investment that is already returning results, but we believe has great, great, great return for the future.

Great. Thank you for that color. I -- my next question is really on the opportunity that you guys have ahead of you in the public sector. You guys announced the US Department of Energy in this quarter. And you guys are still sort of in that -- it sounds like you're still on track from a FedRAMP certification process. Can you provide an update here in terms of what you're able to do today from a market from a go-to-market motion perspective in the US government? It sounds like you are able to win deals today, both on the federal and state side, without FedRAMP in hand, can you talk a little bit about some of that progress there and really what changes once you do have FedRAMP?

Well, as we stated in the past, for us, winning in the sled [ph] portion of the government market, is not completely new. We already had a relatively healthy portion of our customer base in that segment. What's exciting to us is that we accomplished that percentage with minimum to no deep focus in that. And so like whenever you focus, you usually improve an operating machine. And that's what we did by standing out to government capability. On the sled side, specifically, the opportunities is enormous. It's time accelerated because not all sled organizations require a FedRAMP like or a StateRAMP like certification. Some do, and we will reap the benefits of FedRAMP in the case also on the state side. We are not only deep in deals in sled, thanks to the partner that I mentioned before. But in general, we brought onboard individuals like our VP in government that have a deep knowledge of the space and know how to execute on teaming agreements that are essential for the execution in more complex even state deals. And so what we've been at work on deeply is really developing. On one hand, our overall marketing capabilities, messaging, we've learned a lot about what state-like organizations need, and we have further conversations with many partners and distributors like Kerasoft that are making -- this is preparedness for large scale, I would say. And I believe we're on the right track. And when FedRAMP completes, we will be even more in a better position.

Okay. Great. Thank you for the color, gents and congrats again on the quarter. I'll pass the line. Thank you.

Thank you, Suthan.

Your next question comes from Josh Baer from Morgan Stanley. Please go ahead.

Great. Thank you for the question. I wanted to ask about the expansion that you talked about in your prepared remarks with Amazon. Just wondering if that was new in the quarter, if you could talk a little bit more about the use case and the timing and the impact of that expansion?

Thanks for the question. Amazon is a flagship customer for us. We started with Amazon AWS, and we've added on several areas of the business within Amazon. And the latest Amazon SMB is another example of that. Overall, I would say, the biggest project in terms of size and scope remains our Amazon AWS initiative. But this is the latest Amazon SMB project, which is relatively smaller in size. It's just one of a few that we have targeted within the Amazon Corporation. So, our job is to continue penetrating this account. And in order to do that, our focus is on making AWS very happy, and we were strategically focused on it.

And just to add, good morning, sorry, I just wanted to add quickly on that, just from an AWS perspective, it was, we of course have the major installation, which is AWS Skills Builder, where we could, this is not a win on the engineering side, which is the department that we won within AWS, but we also expanded within the current contract that we have on the AWS Skills Builder, which is a customer academy. So, we continue to build and expand within the current contract and other departments. So there's several ways to explain.

Excellent. I wanted to ask one more on competition and thinking about it from the lens that, Gen AI continues to evolve and impact the world. The need for skilling and reskilling is increasing. And so I'm wondering if you're seeing any changes from the broader HCM suite players, if they're more focused on their learning modules and generally if those larger HCM suites are putting more attention to the learning segment of the market? Thank you.

Yeah, Claudio speaking. So first of all, we are capitalizing on mistakes that some competitor is doing. Mainly, learning LMS players, not HCM. The dynamic we see in the HCM space is they give year one, their LMS component, that focus on legacy training topics like soft skills compliance and language training. But, customers start having sophisticated needs. In terms of scalability, multi-user provisioning, multi-audience, and you name it, all the really sophisticated needs that only a vertical LMS player playing horizontally in the market can provide, the HCM small LMS models are not satisfying these needs, which are enterprise needs. Sometimes we will see that customer adopt these small components, let's say a year, then they realize that, okay, it's free or almost free, but it does satisfy complex training needs.

And Josh, just to also add to that, just some reference ability is that if you look at a couple of wins specifically that, whether it's Milwaukee Tool, and secondly, I would say Enterprise, these are folks exactly doing what Claudio spoke about. They hit a moment at which they need to move to a platform that can serve their needs from a learning perspective from legacy HCM platforms.

Great, thank you.

Your next question comes from Kevin Kumar from Goldman Sachs. Please go ahead.

All right, thanks for taking the question. I wanted to ask about the enterprise, how are sales cycles kind of trending and shape of the pipeline, any color there would be helpful. And as it pertains to that, if you can talk a little bit about the recent big five US based technology company that you won, I guess kind of the main use cases there and the process of winning that deal and anything on the relative size of the deal would be helpful. Thanks.

Hello. It's Alessio, thank you for the question. So look, Kevin, I'll start from the latter part of the question on the strategic deal that you referenced. Whilst we are unable to share the exact logo name, we are extremely proud of serving one of the worldwide leaders in their respective tech space in which they play into. I will say a few things, with this prospect in particular that key highlights would be we've been navigating a deep degree of complexity that is an organizational complexity of the customer, a deep degree of complexity due to the various needs that were being addressed in terms of use case. You were asking which ones and the primary targets were sales mastery, sales enablement and customer training, so the perfect equation of hybrid positioning that we have in the market. And I would say the third degree of complexity, but also leverage was a while we were working with this organization also developing the relative relationship with the system integrator that had a strong in the company in order to. To win fundamentally their selection because was also utilized for a selection opinion during the RFP RFI phase. All that to say, we were proud to be the best in class, the largest companies in the LMS space, and to substitute and displace technologies in learning that had been serving this company for many years. That's I think as much as I can say without, entering into specifics that would however, that would otherwise the kind of the beyond our NDA. With the more general enterprise posture, we're so excited. We believe that we are positioned in a really ideal way to continue to win the best companies in the world because of this ability to adapt to multiple use cases see reference ability is a really huge sink and advocacy in enterprise and so being able to demonstrate and speak to deployments like the ones we just discussed it goes well beyond any demos or any product conversation. Our product, notwithstanding that, has matured, as our operation globally has matured. So overall, the company posture is just in an ideal space to continue to win, share a wallet in the enterprise space. And our demand is reflecting that because our business development team is crushing results on our enterprise segment, so you find me extremely excited and that and we continue we will continue to deliver results.

Yeah, Alessio and I, from another angle, from the product angle, our roadmap is also focused on supporting very sophisticated enterprise needs from several points of view. Features, security, and scalability. And I've seen a customer, a very large enterprise customer, a couple of weeks ago, late on migrating to the new database architecture that Fabio and the team have built. They were late for their own reason. And when we deployed the new solution, we have seen the scalability going skyrocketing. I mean, the technology we have is super scalable and ready for a very large amount of users, million and million and millions.

That's great, appreciate the color there. And then I wanted to ask about, I think last quarter there was a comment on SMB churn kind of impacting kind of the new customer ads. And so curious if that's persisting and if it's impacting any of the other metrics like ARR growth or retention? Thank you.

Yeah, Kevin, I'll take that one. So I think just to kind of remind so when you think about SMB in our world you know just from a perspective overall almost 50% of what we do in the quarter is from the large enterprise segment that's contracts of 100,000 and above and SMB will be sub 20% of what we've done in the past the way we've spoken about in the past as well as consistent is that SMB is a customer that's primarily driven through inbound. It is a first-time adopter, requires a lot of touch from a unit economics perspective. There are certainly, I would say, it is not as optimal as the mid-market or high enterprise customers are. And what you will see from us is that we will continue to play in that space to the extent that the unit economics makes sense, as well as we watch for innovation in that space, because that's really where the next two tables come from. And we really want to understand if there's certain areas where we can, we are, we watch for from a competitive landscape, but otherwise the first time customer, we will continue to focus from an inbound point of view, but -- primarily the higher investments that are paying off, as you can see in this cycle of earnings and past quarter, is focusing on mid-market, on enterprise, moving up market, because that's where the gross retention, net retention, the ability for us to be in multiple use cases. If you look at the statistics that I spoke to, 80% of our customers are in three or more departments, two or more departments and 50% in three or more departments. And that really gives you the stickiness. Growth retention is held relatively flat to the prior quarter as I spoke. And that's a reflection of us moving up market.

Great. Thanks for taking the questions and congrats on the quarter.

Thank you.

Your next question comes from Martin Toner from ATB Capital Markets. Please go ahead.

Thanks so much for taking my question. You have typically given NRR with Q4 print and can you give us a bit of a sneak preview there?

Martin, I love the question but as you know, we provide that at the end of the year annually, so we will provide that number when we report Q4. But like I said, from a perspective of gross retention holding flat, the only thing I can add that may help you is that we had a very strong, one of the best quarters we had in upsell-cross-sell motion during the year.

Great. Thank you very much. When I look at your guidance going into the big Q4, it looks kind of conservative at first glance. Just wondering if you can just give us some color on how Q4 is shaping up, how incremental ARR might look relative to some of the previous year's Q4s.

Yeah, no, listen, Martin, from our point of view, listen, when you think about ARR and subscription revenue, it's relatively straightforward. You take the ARR at the start of the quarter and it gives you a sense of what the subscription revenue at a minimum would be. And really, to the extent that we close a number of the deals that will be in Q4 that come in earlier in the quarter, that can have some impact into adding some subscription revenue during the quarter. But, we, of course, always try to make sure that when we guide from a revenue perspective, it gives, we feel confident about it and have the ability to do as best as we can to exceed it. From a profitability point of view, I will say that I think we demonstrated, I think if you've seen the numbers relative to consent, we were 170 basis points ahead. I had spoken to the street that I would be at 10% equity in Q4, but you know we are pretty much at 10% at this point. We will probably make some investments as we think about some FedRAMP investments that we talked about in Q4 that -- that will be more Q4 specific um items and some things in R&D but you know we feel pretty confident about the number I put out there in the consensus for EBITDA. We'll see if we can do better than that, but we feel very comfortable where we are in terms of the number we provided both for revenue, gross margin and EBITDA.

That's great. Thank you very much. Last one from me. Has there been any change to the timing for FedRAMP approval that you communicated at the customer conference?

Alessio, you want to take that? All right. I can kind of give an insight.

I'm sorry. Could you repeat that real quick? Sorry.

Questions around timing has it changed?

Yeah, just wondering, has there been any change compared to what you communicated at the customer conference?

No changes.

Perfect. Thank you.

Martin in terms of that, just to just to make sure we understand that on the FedRAMP side, we are, we've spoken about 2024, but there's obviously factors that can either accelerate or not or, be on the in 2024. Because one of the important aspects to remember, just want to call it out for the street not to get too ahead is that we, there is a program where you. To the extent you get a sponsor, there's a possibility that can accelerate, but if there's no sponsor, then it takes a quarter or two longer. But generally, 2024 is the year where we've indicated we will get there. And to the extent we get any news on sponsors, we will share that with the investor base.

Thank you very much, and congrats on a good quarter.

Your next question comes from Robert Young from Canaccord Genuity. Please go ahead.

Hi, good morning. You've already talked a lot about your success with large enterprise across multiple use case. I wanted to dig into a flavor of that. It appears, with enterprise in Milwaukee here in the quarter that the entry point here is changing a bit. I think you said 50% of the pipe is external, but in the past, the external has always been your entry point in enterprises, I understand it. It now looks as though you're very much broadening that out. And I was curious, what's driving that? Is that just the outbound effort? Or is it the way that the market's looking at you? Or is it partners that are pulling you into these sort of internal, non-external, large enterprise opportunities?

Claudio speaking. So what's happening is that, there is a shift in the industry on who is the recognized leader and the best of breed. So now if you want to have the best LMS in the market in the world, by the way, and you want, you have to choose the cheapest. That's it. For sure, the partnership with SIs helped us to be endorsed like this. But usually when a customer writes an RFP, and you are right, not for a single department where we start and then we upsell and cross-sell, we cross sell through other departments. It's common now that checkbook is also the choice for the global projects. Global projects can be approached in a couple of ways. Or when there is a single decision maker that wants to deploy a global LMS or and as it happened a few weeks ago with the big technological stuff, a federated group of people that goes together, put their budget together to have a single MS with the different experiences, learning experiences based on the department that logs in inside the digital voice. I don't know if, so Claudio or Alessio want to provide more flavor on that.

Yes, I would just add one thing. In the macro environment, the other shift in addition to what the one that Claudio was mentioning is the role of CFOs and CIOs has increased in these strategic decisions. And the impact of that trend is that we're sitting more often with individuals that come from a perspective that is not necessarily the internal perspective or the external perspective, but it's making the best decision for the corporation in order to get the best technology that has the best path forward towards being really a shared technology among the group. So we're sitting often with CAOs that say, hey, I have a point solution on the internal side, and there's a vision of doing customer academy in two years. I need a product that does both really well. And oftentimes that is even CFO push. So from a business development standpoint, the impact of that is we are testing personas, so to speak, or buyer personas that in the past were less perhaps relevant for us, but we're working those a lot and we're seeing great results.

Okay. Thank you for that. And maybe just a colliery to that would be around if the entry point is the CFO or the C-suite. I mean, obviously that's success on the retooling of your sales go-to-market. But I'm also curious of where the opportunity is an HRIS system or a broader HR tool and learning is one element of it, how does Docebo deal with that? Or is that something that you would walk away and focus on best of breed application of, training and learning?

I was going to say, Paul, I think we presented that really well before, but I'll let you go ahead and cover kind of the topic.

No, actually, the way we deal with H-Span systems is in two ways. For OEM, where most players and usually are also local players cannot build their own LMS in different areas of the world, are integrating the table. The other part is the ChaiBot Connect. I mean, we have these big marketplace of integrations that connect with all of the HCM out there or with the HR ecosystem, because HR ecosystem is not only HCM. There is talent, there are many other angles that you need to integrate, organically inside the organization. What is powerful about connected, the air is that we do not provide static integration. Statistic integration is -- this is the integration, go and use it. But this is the standard integration, we can change it for you based on your needs. So different workflows, different rules, based on the customer needs. So we approach the HCM software ecosystem from two angles or VM or integrate.

Okay. Thanks a lot for taking the questions.

Your next question comes from Richard Tse from National Bank Financial. Please go ahead.

Yes, thank you. So it was pretty clear from your conference that you've got an incredible amount of momentum and still very early days. But what I'm trying to understand is that if you can give us a sense of your market share today, really trying to assess the runway here in front of you. And as you add sort of more markets, I'm trying to get a grasp on what that share would be.

Yes, Richard, I'll speak to some numbers. We, I think we printed and we'll be happy to kind of re-circulate a few quarters ago, just to give you some perspective in the, and we did some work in the U.S. market and then just globally, but I'll even just speak to the U.S. market, which is in the top of my head. And the numbers are. If you think about the external versus internal use case, we've always spoken about that. 50% of my pipe will lead from an external use case where the win rates are the highest. And as Claudia spoke about, and I'll ask you in terms of the internal use case, we're seeing a lot of opportunities come to our desk because CIOs are thinking about, long-term multiple problems, not just one problem. And so, some numbers, if you think about the U.S. market next five years, $8.5 billion of program, almost 70% of that is green field in the external use case. And then one third of that number is what we call the switcher market, where it's primarily the internal use case, employee onboarding and so on and so forth. And so the way I just simplify the math in that aspect is that, if you continue to be the leaders on both external and internal use case, but multiple use cases, we do not need the whole market, but if we continue to maintain the leadership and our 5%, 10% of that market leadership, that is a significant number still ahead of us that will be close to a half a billion dollars or more in ARR if we just continue to do that and execute. So, I'm just giving you high level numbers, but I think what is also important to note is that the breadth of our horizontal nature, if you look at this quarter, what I generally look at more closely also, I'm pleased is that if you look at 2021 to 2023 and now, We continue to be in multiple horizontal departments. This quarter, yes, we call out the big five tech customer win, but we had major wins with enterprise car rental, Milwaukee tool. We also had some wins that we didn't call out, like the World Anti-Doping Agency. So, we have a multiple horizontal framework. And then government is coming into that foray, which again, as we highlighted during Inspire, is a large market. The U.S. federal government last year spent $230 million -- in the last three years, spent $230 million in LMS spend. So it gives you a perspective of that market once we get into FedRAMP certification and that will open up multiple pipeline opportunities, which we can't participate in today, but it's a matter of few quarters when we will.

Okay, super, super helpful. Thank you. And thanks for those comments today with respect to EBITDA and sort of giving a perspective, even with the investments. But as you look ahead, even beyond next quarter, as an organization, how are you thinking about sort of capital allocation and the run rate of EBITDA? Like, is that kind of, you're at the point now that you've sort of proven that you can service that operating leverage and now you're going to serve continues or maybe pick up your investment growth or how should we think about that over the next 12 plus months here?

I'll start that and feel free, Claude, unless you want to come in. I will say first and foremost, before we speak to EBITDA, growth is the number one and primary objective, which we start with, and our investments in R&D and in sales and marketing, specifically, as we called out, enterprise segment, government, FedRAMP, we are making those investments and still delivering this EBITDA. So it gives you a sense that I kind of gave some numbers to folks that are probably give up 2% of my EBITDA this year in FedRAMP certification, which tells you I could have been higher than that if I didn't make those investments, but those investments are necessary to drive the long-term revenue CAGR. Now, I don't provide long, we provided some guidance in terms of, in terms of what we've said at Inspire that you can expect this company, it's more closer to, if you are an 81% margin business and we're exiting, in north of 10%, 10.5% that I called out in Q4 in next quarter, then you should expect that this business can continue to demonstrate leverage. And the easiest part here to kind of simplify the math is that you are seeing G&A drop a percent a quarter. There's probably another, I know you should expect us at a 250 million plus ARR to be a business that's generating, has a G&A of close to, let's say 10% or so. So what I'm really saying is that 7% to 8% coming from G&N operating leverage without even touching sales and marketing R&D. But as we've spoken about in the past, I think we're probably going to see a lot of we feel pretty confident about maintaining a healthy revenue CAGR where growth is the higher component of the Rule of 40 and adjusted EBITDA and free cash flow should be as we called out in our investor presentation at Inspire, 18% to 20% is not unreasonable in the next few years. And just one follow-up, Richard. Also, I also look at free cash flow. And my apologies, just a quick point. Free cash flow is also important to me. Free cash flow per share is equally important to me. And as you can look at it, that's an important discipline that we've shown that free cash flow was 18% this quarter and 16% last quarter.

Yeah, and about capital allocation from the M&A angle, we have been, we became very, very good on M&A. I mean, after the acquisition of PeerBoard and Edugo we have been capable to integrate the team and to release the first alpha version of the product in less than four months and a half after the acquisition. We have executed these at the speed of light. So for us, the clean M&A is something we are becoming extremely good. So probably, we are also open to explore other opportunities without, after we have well digested the acquisition that we have made in 2023.

Okay.. Thank you very much. Appreciate it.

Thank you. I will now turn the call back over to Claudio Erba, CEO for closing remarks.

Yes, thanks everyone and let's speak again next quarter.

Ladies and gentlemen, this concludes your conference call for today. We thank you for joining and you may now disconnect your lines. Thank you.