D2L Inc. Announces Fourth Quarter and Fiscal 2026 Financial Results

• Q4 subscription and support revenue grew 9% year-over-year to US$51.1 million; full-year subscription and support revenue grew 10% to US$198.4 million
• Annual Recurring Revenue¹ (“ARR”) reached US$219.8 million at year-end, up 10% over the prior year
• Total revenue in Q4 increased 5% year-over-year to US$55.8 million
• Cash flow from operating activities of US$43.0 million in Fiscal 2026, an increase of US$15.1 million from the prior year
• Q4 Adjusted EBITDA² of US$8.1 million (14.5% Adjusted EBITDA Margin), versus US$9.4 million (17.7% Adjusted EBITDA Margin) in the prior year; full-year Adjusted EBITDA increased 17% to $32.9 million
• Strong balance sheet at year end, with cash and cash equivalents of US$119.2 million and no debt 

TORONTO, April 1, 2026 /CNW/ – D2L Inc. (TSX:DTOL) (“D2L” or the “Company”), a leading global learning technology company, today announced financial results for its Fiscal 2026 fourth quarter and full year ended January 31, 2026. All amounts are in U.S. dollars and all figures are prepared in accordance with International Financial Reporting Standards (“IFRS”) unless otherwise indicated.

“The D2L team delivered strong execution in product innovation and new bookings in Fiscal 2026. We reported 10% subscription growth, increased ARR by 10% to nearly $220 million, increased free cash flow by 63%, and further strengthened our balance sheet,” said John Baker, Founder and CEO of D2L. “Our results reflect the competitive strength of D2L as we remain the fastest-growing learning platform in our main markets. While near-term reported revenue is impacted by the previously disclosed churn from U.S. K-12 clients, demand across our core growth markets – higher education, corporate and international – remains robust, and our pipeline entering the new fiscal year is healthy.”

Mr. Baker added: “Over the past year, we meaningfully expanded AI capabilities across the D2L platform. Our AI‑first approach is resonating with customers, driving revenue momentum for D2L Lumi and more broadly underpinning our continued success in winning and retaining customers across our core platform as we invest for long‑term global growth.”

Fourth Quarter and Fiscal 2026 Financial Highlights

• Subscription and support revenue was $51.1 million in Q4, an increase of 9% over the same period of the prior year, reflecting growth from new customers, coupled with expansion from existing customers, and was partially moderated by results from the U.S. K-12 market.
• Professional services and other revenue decreased by 27% to $4.7 million in Q4, mainly driven by a $0.9 million one-time revenue adjustment in the prior year and a generally cautious spending environment in the U.S. market due to current macroeconomic conditions.
• Total revenue in Q4 was $55.8 million, an increase of 5% over the same period in the prior year. 
• ARR¹ as at January 31, 2026 increased by 10% year-over-year to $219.8 million and Constant Currency ARR¹ increased by 7% year-over-year to $214.1 million. Excluding the K-12 market, ARR increased by approximately 14% over the prior year and Constant Currency ARR increased by 10.5% over the prior year.
• Cash flow from operating activities improved to $12.5 million in Q4, versus cash flow used in operating activities of $0.1 million in the same period in the prior year. 
• Full-year Free Cash Flow² grew to $44.4 million (20.4% Free Cash Flow Margin²), up from $27.3 million (13.3% Free Cash Flow Margin) in Fiscal 2025, and Free Cash Flow for Q4 was $12.2 million (21.9% Free Cash Flow Margin), compared to negative Free Cash Flow of $0.6 million (negative 1.1% Free Cash Flow Margin) in the same period in the prior year.
• Q4 Adjusted Gross Profit² increased by 3% to $38.3 million (68.7% Adjusted Gross Margin²) from $37.1 million (69.6% Adjusted Gross Margin) in the same period of the prior year.
• Adjusted EBITDA² of $8.1 million in Q4 versus Adjusted EBITDA of $9.4 million for the comparative period in the prior year.
• Income in Fiscal 2026 was $9.0 million, compared to $25.7 million for the comparative period of the prior year, largely due to a non-recurring income tax recovery in the prior year of $15.8 million and a non-cash fair value adjustment of $4.3 million on the loan receivable from SkillsWave Corporation. 
• Constant Currency Net Revenue Retention Rate¹ (“NRR”) for Fiscal 2026 was 100.9% (102.7% for the fiscal year ended January 31, 2025). Excluding the K-12 market, Constant Currency NRR would have been 103.7% in Fiscal 2026.
• Strong balance sheet at year end, with cash and cash equivalents of $119.2 million and no debt. 
• During Fiscal 2026, the Company repurchased and canceled 992,700 Subordinate Voting Shares under its Normal Course Issuer Bid, representing the cancellation of 3.6% of the opening Subordinate Voting Shares outstanding.

Fourth Quarter and Full Year Fiscal 2026 Financial Results – Selected Financial Measures
(in thousands of U.S. dollars, except for percentages)

Fourth Quarter Business & Operating Highlights

• D2L’s learning platform had more than 21 million users across more than 1,500 customers in over 40 countries at year end.
• D2L continued to grow its customer base in North American education, including the additions of Henry Ford College, University of Colorado: Colorado Springs, Okanagan College, Contact North | Contact Nord eChannel, and Hudson Global Scholars.
• D2L continued to grow its customer base in global education, adding University of the Free State (South Africa), University of Prince Mugrin (Saudi Arabia), Whitecliffe College (New Zealand), Singapore University of Social Sciences (Singapore), and Universidad Americana de Comercio e Informatica (Mexico).
• D2L expanded its corporate customer portfolio, adding California Academy of Sciences, American Society of Interior Designers, and Wise Charitable Trust.
• D2L Brightspace was recognized as a 2025 Top Learning Management System (LMS) Company by Training Industry.
• D2L Brightspace was named one of the Best Enterprise Learning Management Systems (LMS) by Talented Learning in the 2025 LMS Awards.
• D2L received five Gold and one Bronze Brandon Hall Group Human Capital Management (HCM) Excellence Awards for D2L Brightspace and D2L Lumi.

Financial Outlook

D2L is initiating financial guidance for the year ended January 31, 2027 (“Fiscal 2027“). D2L plans to continue making measured investments for growth in Fiscal 2027 while scaling its operations for increasing levels of profitability. Specifically, for Fiscal 2027, the Company is issuing the following guidance:

• 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% at the midpoint.

The Company expects revenue growth and Adjusted EBITDA Margin to increase as Fiscal 2027 progresses, enabling the Company’s performance in the second half of the year to improve relative to performance in the first half of the year.

These targets demonstrate the Company’s continued emphasis on balancing growth and profitability, including increased revenue and Adjusted EBITDA in Fiscal 2027 relative to Fiscal 2026. Further, these targets are based upon the current operations of the Company and do not include the impact of any future incremental acquisition transaction(s), which, if any occur, would be expected to be additive to the revenue and profits earned by D2L in the period. The achievement of the Adjusted EBITDA guidance is based upon continued efficiencies and scale in our operations as we grow our revenue. Given the momentum in our core markets, we are carefully balancing near-term improvements in operating efficiency with appropriate investment capacity to most effectively meet our medium-term objectives and advance our long-term goal of market leadership. The anticipated revenue growth rates in Fiscal 2027 are impacted, in part, by the level of ARR churn experienced in Fiscal 2026 within the US K-12 market, and the resulting impact of such activity on the corresponding revenue recognition in Fiscal 2027.

Medium-Term Outlook and Target Operating Model

In April 2025, management presented a medium-term target operating model outlining the levels of growth and profitability the Company expects to achieve by Fiscal 2028 (the year ending January 31, 2028) as outlined below.

As we operate the business over the remainder of this period, we will continue to balance growth and profitability, including making measured investments in future growth and optimizing our operations for increased profitability.

We continue to expect to achieve 10-15% growth in annual revenue by Fiscal 2028 based upon existing customer retention and expansion, continued acquisition of new customers, ongoing product development, and strategic acquisitions as further described in the “Financial Outlook – Medium Term Outlook and Target Operating Model” section of the Fiscal 2025 Management’s Discussion and Analysis (“MD&A”).

Our current revenue growth rates, both the rate achieved in Fiscal 2026 and our guidance in Fiscal 2027, are lower than the target operating model based upon higher-than-normal levels of customer churn in our U.S. K-12 market, and lower activity levels within the North America Higher Education market. We expect both of these factors to moderate in impact by Fiscal 2028, supporting higher revenue growth relative to current levels.

We continue to expect to achieve 18-20% Adjusted EBITDA Margin by Fiscal 2028 based upon increases to Adjusted Gross Margin and operating leverage in our business model as further described in the Fiscal 2025 MD&A.

Our current Adjusted EBITDA Margin levels, both the margin reported in Fiscal 2026 and our guidance for Fiscal 2027, are lower than the target operating model based upon short-term pressure to our subscription gross margin levels resulting from the migration of a database technology, which moderates in Fiscal 2028, and continued investment in go-to-market and product development to scale our revenues and profits towards our Fiscal 2028 targets. As the impact of these factors moderates in Fiscal 2028, the Company expects to achieve an improvement in Adjusted EBITDA Margin relative to current levels.

Q4 Conference Call & Webcast

D2L management will host a conference call on Thursday, April 2, 2026 at 9:00 am ET to discuss its fourth quarter and full-year Fiscal 2026 financial results.

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, including the acquisition of H5P Group AS (“H5P”); 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; 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 K-12, higher education and business at www.D2L.com.

D2L INC.
Consolidated Statements of Financial Position
(In U.S. dollars)

As at January 31, 2026 and January 31, 2025

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