Shares of Docebo Inc. (NASDAQ: DCBO) plunged 5.03% in Friday's trading session, despite the company reporting better-than-expected third-quarter results. The sharp decline came as Needham analysts cut their price target on the stock, overshadowing the positive earnings report.
Before the market opened, Docebo announced its Q3 2025 financial results, which surpassed analyst expectations. The learning management software provider reported adjusted earnings per share of $0.34, beating the consensus estimate of $0.33. Revenue for the quarter came in at $61.622 million, also exceeding the projected $60.939 million.
Key highlights from the report included:
- Subscription revenue grew 10% year-over-year to $58.0 million
- Adjusted EBITDA reached $12.4 million, representing 20.1% of total revenue
- Annual Recurring Revenue (ARR) increased by 10.1% to $235.6 million
Despite these positive results, investors seemed to focus on Needham's decision to lower its price target on Docebo stock from $42 to $38. This adjustment, coupled with broader market concerns about growth in the tech sector, likely contributed to the significant sell-off.
Docebo also revised its full-year 2025 guidance, now expecting subscription revenue growth of 11.75% and total revenue growth of 11.40%. While these projections still indicate growth, they may have fallen short of some investors' more optimistic expectations.
The stock's sharp decline highlights the current market sensitivity to growth forecasts and analyst opinions, even when companies report strong quarterly results. Investors will be closely watching Docebo's performance in the coming quarters to see if the company can maintain its growth trajectory and potentially regain market confidence.
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