Q1 2026 D2L Inc Earnings Call Transcript
Key Points
- D2L Inc (DTLIF) reported a 9% increase in total revenue to $52.8 million for Q1.
- Subscription and support revenue rose by 11% to $47.7 million.
- Adjusted gross margins improved by 360 basis points to 71%.
- Annual recurring revenue increased by 9% to $206.8 million on a constant currency basis.
- Adjusted EBITDA grew to $9.3 million with a margin of 17.6%, more than double the previous year's Q1 margin.
- The macroeconomic environment continues to present short-term challenges, particularly in US higher education.
- Professional services and other revenue decreased by 8% in Q1 to $5.1 million.
- There is a slight reduction in customer propensity to commit to larger professional services engagements.
- Operating expenses for the first quarter were $33.5 million, up less than 1% year over year.
- Free cash flow was negative $1.8 million in Q1, although improved from the previous year's negative $15 million.
Good morning, and thank you all for attending today's D2L Inc., Q1 fiscal financial results conference call. My name is Brika, and I will be your moderator for today. (Operator Instructions) This morning's call is being recorded on June 11, 2025, at 8:30 AM Eastern Time.
I would now like to pass the conference over to your host, Craig Armitage. Thank you. You may proceed.
Thank you, and good morning, everyone. Listeners are reminded that portions of today's discussion will include statements that contain forward-looking information. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from a conclusion, forecast, or projection in the forward-looking information.
Further, certain material factors or assumptions were applied in drawing a conclusion or making a forward forecast or projection as reflected in the forward-looking information. For identification and discussion of such risks, uncertainties, factors, and assumptions as well as
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