On August 7, Docebo Inc. (NASDAQ:DCBO) reported financial results for the second quarter of fiscal 2026, the three months ended June 30, showing a company that is landing bigger deals even as some of its underlying profit metrics moved in the wrong direction. Docebo told investors that total revenue climbed 13% year over year to $68.7 million, with subscription revenue up 12% to $63.8 million. President and CEO Alessio Artuffo pointed to enterprises shifting from experimenting with AI to transforming their workforces at scale, and the company used that momentum to raise its full-year outlook for a second time this year. Behind the headline growth number, though, sits a messier picture of where the profits actually went.
Bigger Deals, Broader Reach
Average contract value jumped 27% to $74,800, a sign that Docebo is winning larger, more strategic enterprise contracts rather than just adding smaller accounts. The quarter’s customer list backs that up: a global telecommunications infrastructure leader, the world’s largest privately owned security services company with 130,000 employees, and a 70,000-employee automotive safety firm all signed on, alongside a major consulting firm and a first FedRAMP win with a private energy company.
Docebo also cleaned up a long-standing concentration risk, with its largest OEM customer falling to just 2.5% of annual recurring revenue as of June 30, down from 8.4% a year earlier. Strip out that OEM relationship, acquisitions, and currency effects, and core ARR actually grew 13.9%, faster than the reported 9.5% headline figure. Adjusted EBITDA rose 21.8% to $11.2 million, with margin expanding to 16.4% of revenue from 15.2% a year ago, and adjusted earnings per share climbed to $0.37 from $0.30.
The Squeeze Beneath The Surface
The GAAP numbers tell a less flattering story. Net income fell 26.6% to $2.3 million, and earnings per share slipped to $0.09 from $0.10. Gross margin contracted to 79.4% of revenue from 80.9%. Cash flow used in operating activities came in at $3.1 million for the quarter, a sharp reversal from the $6.2 million generated in the same period last year, and free cash flow dropped 73% to $3.1 million, or just 4.5% of revenue versus 18.7% a year earlier. Working capital swung to a deficit of $30.2 million as of June 30, 2026, compared with a $5.1 million deficit a year prior, a 491.8% change. For the first six months of 2026, net income fell 86% to $639,000. With $88.0 million in total borrowings against $45.7 million in cash and equivalents, the balance sheet has less cushion than it did a year ago.
What The Market Is Pricing In
Hedge fund ownership sits flat, with 10 funds holding positions in Docebo in the most recent quarter versus 10 in the prior quarter, showing no shift in institutional conviction either way. The stock trades at a forward price-to-earnings ratio of 11.79 as of September 8, a modest multiple that suggests the market is not pricing in aggressive growth expectations despite management’s raised guidance.
Two Stories, One Stock
Docebo’s second quarter reads as two separate narratives layered on top of each other. One shows a company landing larger enterprise and public sector contracts, shrinking a customer concentration risk, and growing its adjusted profitability. The other shows GAAP net income shrinking, operating cash flow turning negative, and a working capital position that deteriorated sharply from a year ago. For the growth story to keep winning out, the larger contracts and public sector wins need to convert into sustained cash generation rather than one-quarter dips.
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