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Highlights

  • DTOL’s Q1FY26 total revenue rose 9% YoY to CAD 52.8 million.
  • The company’s adjusted EBITDA more than doubled to CAD 9.3 million from CAD 4.0 million in the prior year.
  • DTOL launched an expanded partner program to enhance integration with its Brightspace platform.

D2L Inc. (TSX:DTOL), a Canadian education technology company providing cloud-based learning solutions, reported its unaudited financial results for the first quarter of fiscal year 2026, ended April 30, 2025.

Total revenue for the quarter was CAD 52.8 million, reflecting a 9% YoY increase compared to the same period in the prior year. On a constant currency basis, revenue reached CAD 53.6 million, an 11% YoY increase. The growth was led by subscription and support revenue, which rose 11% YoY to CAD 47.7 million.

Annual Recurring Revenue (ARR) as of April 30, 2025, grew 8% YoY to CAD 206.2 million. On a constant currency basis, ARR increased 9% YoY to CAD 206.8 million. Gross profit rose 13% YoY to CAD 37.0 million, up from CAD 32.7 million in Q1FY25. Adjusted gross profit was CAD 37.7 million, representing a 15% YoY increase and yielding a 71.3% YoY adjusted gross margin, compared to 67.7% YoY in the prior year. Operating efficiency gains contributed to a rise in Adjusted EBITDA, which more than doubled year-over-year to CAD 9.3 million, compared to CAD 4.0 million in the same period last year. Income for the period came in at CAD 3.3 million, compared to CAD 0.6 million in Q1FY25.

Operating cash flow for the quarter was negative CAD 1.9 million, a marked improvement from the negative CAD 14.8 million reported in the same quarter last year. Free cash flow was negative CAD 1.8 million, compared to negative CAD 15.0 million a year ago. The company noted that Q1 typically experiences seasonal lows in operating cash flow, with Q2 showing seasonal highs. D2L ended the quarter with cash and cash equivalents of CAD 92.5 million and no outstanding debt. During the quarter, the company repurchased and cancelled 168,800 subordinate voting shares under its normal course issuer bid (NCIB) program.

D2L reported expansion of its customer base across both education and corporate sectors. In North America, it added clients such as Knox College, LCI Education, and Tradechology Academy. Internationally, new institutional clients included the University of Otago, Universidad de la Sabana, and HOGENT University of Applied Sciences and Arts. New corporate clients added during the quarter included the IEEE Computer Society and Pantheon Academy.

The company also launched an expanded partner program to enhance integration with its Brightspace platform. D2L’s leadership received industry recognition, with its Chief Learning Officer acknowledged at the 2025 ASU+GSV Summit.

Looking ahead, D2L reiterated its financial guidance for the fiscal year ending January 31, 2026. The company expects subscription and support revenue in the range of CAD 194 million to CAD 196 million, representing 7% to 9% YoY growth. Total revenue is projected to be between CAD 219 million and CAD 221 million, implying 7% to 8% YoY growth. Adjusted EBITDA is expected in the range of CAD 32 million to CAD 34 million, translating to a 15% YoY EBITDA margin.

The company also reaffirmed its medium-term target operating model through fiscal 2028, as previously outlined in its annual management discussion and analysis (MD&A). No changes to that framework were reported as of April 30, 2025.