Annual Recurring Revenue1 reached US$225.2 million at quarter end, up 9% over the prior year
Total revenue increased 8% year-over-year to US$57.1 million
Adjusted EBITDA2 was US$8.3 million, versus US$9.3 million in the prior year
Announces Substantial Issuer Bid of up to CAD $20.0 million
TORONTO, June 9, 2026 /CNW/ - D2L Inc. (TSX:DTOL) ("D2L" or the "Company"), a leading global learning technology company, today announced financial results for its Fiscal 2027 first quarter ended April 30, 2026. All amounts are in U.S. dollars and all figures are prepared in accordance with International Financial Reporting Standards ("IFRS") unless otherwise indicated.
"We are off to a good start this year, with strong execution in new bookings across our core growth markets and a healthy pipeline to support the year ahead," said John Baker, Founder and CEO of D2L. "This outcome reflects the reflects the continued performance of our core business and stronger competitive positioning in the market. Further, we are building meaningful momentum in the deployment of responsible AI, as evidenced by accelerating growth in D2L Lumi ARR and increasing adoption as organizations embrace our AI-first approach to enhance learning outcomes and drive operational efficiency. Our continued investment in the platform is reinforcing D2L's leadership position and supports our ability to win more and expand customer relationships. As organizations invest in the next generation of learning technology, D2L is well positioned as a trusted, long-term partner."
First Quarter Fiscal 2027 Financial Highlights
Subscription and support revenue was $52.7 million, an increase of 10% over the same period of the prior year, reflecting growth from new customers, coupled with expansion from existing customers, and was partially moderated by previously disclosed churn from the U.S. K-12 market.
Total revenue of $57.1 million, up 8% from the same period in the prior year.
Annual Recurring Revenue1 ("ARR") as at April 30, 2026 increased by 9% year-over-year, from $206.2 million to $225.2 million, and Constant Currency Annual Recurring Revenue1 increased 8% to $221.9 million. Excluding the K-12 market, ARR increased by approximately 13.2% over the same period of the prior year and Constant Currency ARR grew by 11.4% over the same period of the prior year.
Adjusted Gross Profit2 increased by 7% to $40.4 million (70.7% Adjusted Gross Margin2) from $37.7 million (71.3% Adjusted Gross Margin) in the same period of the prior year. Adjusted Gross Margin was negatively impacted by the previously disclosed migration of a database technology, which did not affect the comparable period in Fiscal 2026.
Adjusted EBITDA2 of $8.3 million (14.5% Adjusted EBITDA Margin2), compared with $9.3 million (17.6% Adjusted EBITDA Margin) in the same period of the prior year and income for the period was $1.7 million, versus income of $3.3 million for the comparative period of the prior year. The period-over-period decreases are largely explained by the database technology migration.
Cash flows used in operating activities were $16.8 million, compared with $1.9 million for the same period in the prior year, and Free Cash Flow2 was negative $16.9 million, compared to Free Cash Flow of negative $1.8 million in the same period in the prior year. The year-over-year increase in cash used was primarily attributable to working capital movements, including higher payments to vendors and lower collections from customers in the current period following strong collections in the fourth quarter ended January 31, 2026. These impacts are timing-related in nature. Cash flow from operations typically have a seasonal low in the first quarter and are expected to improve meaningfully in the second and third quarters, consistent with historical patterns.
Strong balance sheet at quarter end, with cash and cash equivalents of $95.7 million and no debt.
During the three months ended April 30, 2026, the Company repurchased and cancelled 444,300 (2025, 168,800) Subordinate Voting Shares under its Normal Course Issuer Bid ("NCIB"). For the trailing 12-month period ended April 30, 2026, the Company has repurchased and cancelled 1,268,200 Subordinate Voting Shares (2025, 438,900), representing the cancellation of 4.2% (2025, 1.6%) of the opening Subordinate Voting shares outstanding over the past twelve months.
Subsequent to quarter end, the Company announced a substantial issuer bid ("SIB") pursuant to which the Company will offer to purchase for cancellation up to C$20.0 million of its Subordinate Voting Shares at a price of not less than C$10.50 and not more than C$11.50 per share. Additional information on the SIB is disclosed in a separate press release issued on June 9, 2026.
1 Refer to "Key Performance Indicators" section of this press release.
2 A non-IFRS financial measure or non-IFRS ratio. Refer to "Non IFRS Financial Measures" section of this press release.
First Quarter Fiscal 2027 Financial Results, Selected Financial Measures(in thousands of U.S. dollars, except for percentages)
Q1 2027
Q1 2026
Change
Change
$
$
$
%
Subscription & Support Revenue
52,723
47,735
4,988
10.4 %
Professional Services & Other Revenue
4,407
5,100
(693)
(13.6 %)
Total Revenue
57,130
52,835
4,295
8.1 %
Constant Currency Revenue1
55,682
52,835
2,847
5.4 %
Gross Profit
39,654
37,030
2,624
7.1 %
Adjusted Gross Profit1
40,366
37,667
2,699
7.2 %
Adjusted Gross Margin1
70.7 %
71.3 %
Income for the period
1,670
3,268
(1,598)
(48.9 %)
Adjusted EBITDA1
8,261
9,305
(1,044)
(11.2 %)
Cash Flows used in Operating Activities
(16,829)
(1,856)
(14,973)
(806.7 %)
Free Cash Flow1
(16,873)
(1,841)
(15,032)
(816.5 %)
1 A non-IFRS financial measure or non-IFRS ratio. Refer to the "Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures" section of this press release for more details.
First Quarter Business & Operating Highlights
D2L continued to grow its customer base in North American education, including the additions of Humber Polytechnic, Loyola University Chicago, Midwestern University, Wiley University, StraighterLine, and École Louis Legrand.
D2L expanded its corporate customer base in North America by adding several new customers, including Royal Conservatory of Music, American Traffic Safety Services Association, and a leading professional body for plastic surgeons.
D2L continued to grow its global customer base, adding GME Education in the Middle East, a major education provider in Mexico, and a leading trade and investment agency in APAC.
D2L Brightspace was recognized by G2 as one of the Best Education Software Products and D2L was named among the Best Canadian Software Companies for 2026.
D2L Lumi was recognized as an Award-Winning Education Product in the 2026 Artificial Intelligence Excellence Awards presented by Business Intelligence Group.
D2L was named one of Canada's Best Diversity Employers for 2026 by Mediacorp Canada.
Together with WCET and Opened Culture, D2L released AI Literacies in Practice: A Comprehensive Playbook for Higher Education to help institutions develop AI literacies.
Financial Outlook
The Company is maintaining its previous financial guidance for the year ended January 31, 2027 as follows:
Subscription and support revenue in the range of $212 million to $214 million, implying growth of 7-8% over Fiscal 2026;
Total revenue in the range of $231 million to $234 million, implying growth of 6-8% over Fiscal 2026; and
Adjusted EBITDA in the range of $33 million to $35 million, implying an Adjusted EBITDA margin of 15%.
For additional details on the Company's outlook, including the principal underlying assumptions and risk factors regarding achievement, refer to the "Financial Outlook" section of the Company's MD&A for the year ended January 31, 2026 (the "Annual MD&A"), as well as the "Forward-Looking Information" section therein and in the Company's MD&A for the three months ended April 30, 2026 (the "Interim MD&A").
Q1 Conference Call & Webcast
D2L management will host a conference call on Wednesday, June 10, 2026 at 8:30 am ET to discuss its first quarter Fiscal 2027 financial results.
Date:
Wednesday, June 10, 2026
Time:
8:30 am (ET)
Dial in number:
Canada: 1 (365) 657-4084
United States: 1 (833) 461-5787
Access code: 628059232
Webcast:
A live webcast will be available at ir.d2l.com/events-and-presentations/events/
The webcast will also be archived for replay.
Forward-Looking Information
This press release includes statements containing "forward-looking information" within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "budget", "scheduled", "estimates", "outlook", "target", "forecasts", "projection", "potential", "prospects", "strategy", "intends", "anticipates", "seek", "believes", "opportunity", "guidance", "aim", "goal" or variations of such words and phrases or statements that certain future conditions, actions, events or results "may", "could", "would", "should", "might", "will", "can", or negative versions thereof, "be taken", "occur", "continue" or "be achieved", and other similar expressions. Statements containing forward-looking information are not historical facts, but instead represent management's expectations, estimates and projections regarding future events or circumstances.
This forward-looking information relates to the Company's future financial outlook and anticipated events or results and includes, but is not limited to, statements under the heading "Financial Outlook" and information regarding: the Company's financial position, financial results, business strategy, performance, achievements, prospects, objectives, opportunities, business plans and growth strategies; expected improvements in gross margin; the Company's budgets, operations and taxes; judgments and estimates impacting the financial statements; the markets in which the Company operates; industry trends and the Company's competitive position; expansion of the Company's product offerings; the anticipated impacts of future acquisitions; trends in research and development expenses, sales and marketing expenses, and general and administrative expenses, each as a percentage of revenue; planned expenditures in sales and marketing and research and development activities; the timing and pace for achieving scalability; expectations regarding the growth of the Company's customer base, revenue, and revenue generation potential and expectations regarding costs, including as a percentage of revenue; and the Company's equity investment in, and loan to, SkillsWave Corporation ("SkillsWave").
Forward-looking information is based on certain assumptions, expectations and projections, and analyses made by the Company in light of management's experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, including the following: the Company's ability to win business from new customers and expand business from existing customers; the timing of new customer wins and expansion decisions by existing customers; the Company's ability to generate revenue and expand its business while controlling costs and expenses; the Company's ability to manage growth effectively; the Company's assumptions regarding the principal competitive factors in our markets; the Company's ability to hire and retain personnel effectively; the effects of foreign currency exchange rate fluctuations on our operations; the ability to seek out, enter into and successfully integrate acquisitions, ; business and industry trends, including the success of current and future product development initiatives; positive social development and attitudes toward the pursuit of higher education; the Company's ability to maintain positive relationships with its customer base and strategic partners; the Company's ability to adapt and develop solutions that keep pace with continuing changes in technology, education and customer needs, including demand for AI; the Company's ability to predict future learning trends and technology; the ability to patent new technologies and protect intellectual property rights; the Company's ability to comply with security, cybersecurity and accessibility laws, regulations and standards; the assumptions underlying the judgments and estimates impacting on financial statements; certain accounting matters, including the impact of changes in or the adoption of new accounting standards; the Company's ability to retain key personnel; the factors and assumptions discussed under the "Financial Outlook" section of the Annual MD&A; and that the list of factors referenced in the following paragraph, collectively, do not have a material impact on the Company.
Although the Company believes that the assumptions underlying such forward-looking information were reasonable when made, they are inherently uncertain and are subject to significant risks and uncertainties and may prove to be incorrect. The Company cautions investors that forward-looking information is not a guarantee of the future and that actual results may differ materially from those made in or suggested by the forward-looking information contained in this press release. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties and other factors, including but not limited to the risks identified in our Annual MD&A, including "Summary of Factors Affecting Our Performance" or in the "Risk Factors" section of the Company's most recently filed annual information form, in each case filed under the Company's profile on SEDAR+ at www.sedarplus.com. If any of these risks or uncertainties materialize, or if assumptions underlying the forward-looking information prove incorrect, actual results might vary materially from those anticipated in the forward-looking information.
Given these risks and uncertainties, investors are cautioned not to place undue reliance on forward-looking information, including any financial outlook. Any forward-looking information that is contained in this press release speaks only as of the date of such statement, and the Company undertakes no obligation to update any forward-looking information or to publicly announce the results of any revisions to any of those statements to reflect future events or developments, except as required by applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
About D2L Inc. (TSX:DTOL)
D2L is transforming the way the world learns, helping learners achieve more than they dreamed possible. Working closely with customers all over the world, D2L is on a mission to make learning more inspiring, engaging and human. Find out how D2L helps transform lives and delivers outstanding learning outcomes in higher education, corporate and K-12 at www.D2L.com.
D2L INC.Condensed Consolidated Interim Statements of Financial Position(In U.S. dollars)
As at April 30, 2026 and January 31, 2026(Unaudited)
April 30, 2026
January 31, 2026
Assets
Current assets:
Cash and cash equivalents
$ 95,699,241
$ 119,210,190
Trade and other receivables
29,461,310
26,446,779
Uninvoiced revenue
3,153,391
3,365,404
Prepaid expenses
9,463,596
8,929,070
Deferred commissions
5,959,787
6,046,380
143,737,325
163,997,823
Non-current assets:
Other receivables
