Q1 2027 D2L Inc Earnings Call Transcript
Key Points
- Subscription and support revenue grew 10% to $52.7 million, indicating strong customer demand.
- Annual Recurring Revenue (ARR) increased 9% to $225.2 million, showcasing consistent growth.
- D2L Inc (DTLIF) has a healthy financial position with close to $100 million in cash and no debt.
- The company is experiencing strong international growth, with international ARR growing at 15%+ annually.
- D2L Lumi, the company's AI capability, is attached to over 40% of new customer agreements in higher education, reflecting strong adoption.
- Adjusted EBITDA margin decreased to 14.5% from 17.6% in the prior year period.
- Net income for the quarter was $1.7 million, down from $3.3 million in the same period last year.
- Free cash flow was negative $16.9 million compared with negative $1.8 million in the prior year period, indicating increased cash usage.
- The U.S. K-12 market experienced previously disclosed churn, impacting overall ARR growth.
- The database technology migration impacted margins, though this is expected to conclude by the end of the second quarter.
Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the D2L Inc., fiscal 2027 first-quarter results conference call. (Operator Instructions) This morning's call is being recorded on June 10, 2026 at 8:30 AM Eastern Time.
I would now like to turn the call over to Craig Armitage, Investor Relations. Please go ahead.
Thank you, and good morning. 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 forecast or projection as reflected in the forward-looking information.
For identification and discussion of such risks, uncertainties, factors, and assumptions, as well as further information concerning forward-looking statements,
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