Docebo (TSX:DCBO)(NASDAQ:DCBO) stock soared by more than 6% on Thursday morning after the company reported fourth-quarter and fiscal year 2020 results. The tech company saw a strong increase in annual recurring revenue and positive free cash flow, driven by record new logo, upsell, and OEM sales. Docebo stock is a strong tech play.
What Docebo is doing
Docebo is a cloud-based SaaS platform for a learning management system. The company provides services to business customers looking for enterprise e-learning solutions. Using Docebo, clients can load courses, create usernames and passwords, and track employee progress throughout the course. Docebo is available in over 40 languages and is aimed at mid-sized businesses, although its service has been used by both larger and smaller businesses.
Docebo is a global company which started out in Italy. From an investor perspective, the company first appeared in 2019, when it went public on the TSX. In December 2020, DCBO began trading on the NASDAQ. At the New York IPO, the shares were priced at US$48. The 3.9 million shares put on the market brought in US$165.6 million for Docebo.
A good Q4 and fiscal year 2020
As you can imagine, Docebo had a good year in 2020. The company’s revenue increased each quarter, with the most recent, the fourth quarter, at US$18.8 million. This is an increase of 53% from the comparative period of the previous year. Subscription revenue was US$16.7 million, representing 89% of total revenue and an increase of 49% over the comparative period of the previous year.
Gross profit amounted to US$15.8 million, or 84% of revenue, which represents an improvement of 300 basis points from the same period a year ago.
Docebo reported a net loss of US$3.7 million, or $ 0.12 per share, compared to a net loss of US$3.3 million, or US$0.12 per share, for the same period last year.
The company reported positive adjusted EBITDA of US$0.5 million, or 3% of revenues, compared to US$(1) million, or (8%) of revenues, for the comparative period of the previous year.
Positive cash flow from operating activities was US$7 million compared to US$(3.5) million for the same period last year.
Positive free cash flow was US$6.6 million compared to US$(3.6) million for the corresponding period of the previous fiscal year.
For fiscal 2020, revenue was US$62.9 million, an increase of 52% over the prior year’s comparative period. Subscription revenue was US$57.4 million, representing 91% of total revenue, and an increase of 54% over the comparative period of the previous year.
Recurring annual revenue as of December 31, 2020, was US$74 million, an increase of 57% from US$47.2 million at the end of the fourth quarter of 2019. You can find Docebo’s complete fiscal results here.
Docebo is now used by 2,179 customers compared to 1,725 customers on December 31, 2019.
Claudio Erba CEO and Founder of Docebo said in a statement: “The challenges of the pandemic have accelerated a long-term trend towards the adoption of digital learning tools in the enterprise. Companies around the world, and individual departments within, are increasingly turning to Docebo to train their internal employees, partners, and customers.”
Docebo stock is a strong buy
For fiscal 2021, analysts on average expected revenue growth of 46.5% to $91.6 million and profit growth of 72.7% to a loss of $0.06 per share.
For its strong growth prospects, Docebo stock is a strong buy. It is one of my three top tech stocks to buy in 2021.
Before you consider Lightspeed POS, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now… and Lightspeed POS wasn’t one of them.
The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.