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Highlights
D2L posted Q2 Fiscal 2026 revenue of USD 54.8 million, up 11% from the prior year period.
Adjusted EBITDA rose to USD 7.5 million, compared to USD 4.2 million in the same period last year.
The Company reported net income of USD 2.7 million, versus a net loss of USD 0.3 million in Q2 Fiscal 2025.
D2L Inc. (TSX:DTOL), a global learning technology company, announced its financial results for the second quarter of Fiscal 2026, ended July 31, 2025. The Company reported total revenue of USD 54.8 million, an increase of 11% compared with the same quarter in Fiscal 2025.
Subscription and support revenue rose 14% year-over-year to USD 50.1 million, underscoring growth in its recurring business. Meanwhile, professional services and other revenue decreased 10% to USD 4.6 million, influenced by cautious U.S. market spending.
Annual Recurring Revenue (ARR) reached USD 212.6 million, up 7% from USD 198.3 million in the prior year.
Profitability and Margins
D2L achieved Adjusted Gross Profit of USD 38.7 million, representing a 70.6% Adjusted Gross Margin, compared with USD 33.6 million (68.4%) in the prior year. Reported Gross Profit rose 14% to USD 38.1 million.
The Gross Profit Margin for subscription and support revenue improved to 75.1%, up from 72.9% last year. Adjusted EBITDA increased to USD 7.5 million, versus USD 4.2 million in Q2 Fiscal 2025.
The Company reported net income of USD 2.7 million, compared with a net loss of USD 0.3 million a year ago.
Cash Flow and Balance Sheet
Cash flows from operating activities totaled USD 15.0 million, down from USD 31.4 million in the prior year, while Free Cash Flow was USD 14.9 million, compared with USD 31.2 million previously. The decline primarily reflected changes in the timing of incentive compensation payments and customer collections, which are expected to benefit Q3 results.
At the quarter’s end, D2L held cash and cash equivalents of USD 102.5 million and carried no debt. During the period, the Company repurchased and canceled 244,600 Subordinate Voting Shares under its normal course issuer bid for USD 2.5 million.
Business and Operational Updates
In Q2, D2L expanded its North American education client base, adding University of the People and Red Deer Polytechnic. Internationally, it added JIS Group and SASTRA University in India and North-West University in South Africa.
The corporate portfolio grew with the addition of the Project Management Institute and CPA Australia. The Company also launched AI enhancements to D2L Lumi and Brightspace, alongside D2L Accessibility+ and Createspace.
Recognition during the quarter included being named among Canada’s Best Managed Companies for the 13th year, inclusion in TIME and Statista’s Canada’s Best Companies 2025, and winning the EdTech Breakthrough Award for Overall LMS Solution Provider of the Year.
Outlook
For Fiscal 2026 ending January 31, 2026, D2L projects:
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Subscription and support revenue of USD 198–200 million, implying 10–11% growth, raised from earlier guidance of USD 194–196 million.
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Total revenue of USD 219–221 million, unchanged from prior guidance, reflecting 7–8% growth year-over-year.
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Adjusted EBITDA of USD 32–34 million, consistent with previous guidance, representing a 15% margin.
