D2L Inc. Announces Fourth Quarter and Fiscal 2025 Financial Results

• Total revenue in Q4 increased 12% year-over-year to US$53.3 million; full-year revenue grew 13% to US$205.3 million
• Q4 subscription and support revenue grew 11% year-over-year to US$46.8 million; full-year subscription and support revenue grew 11% to US$180.6 million
• Constant Currency Annual Recurring Revenue¹ reached US$205.3 million at year-end, up 9% over the prior year-end
• Cash flow from operating activities of US$27.9 million in Fiscal 2025, an increase of US$12.2 million from the prior year
• Q4 Adjusted EBITDA² of US$9.4 million (17.7% Adjusted EBITDA Margin), versus US$3.5 million (7.3% Adjusted EBITDA Margin) in the prior year

TORONTO, April 2, 2025 /CNW/ - D2L Inc. (TSX: DTOL) ("D2L" or the "Company"), a leading global learning technology company, today announced financial results for its Fiscal 2025 fourth quarter and full year ended January 31, 2025. All amounts are in U.S. dollars and all figures are prepared in accordance with International Financial Reporting Standards ("IFRS") unless otherwise indicated.

"We reported a strong fourth quarter that underscores our effective execution in Fiscal 2025, with revenue and Adjusted EBITDA exceeding guidance," said John Baker, CEO of D2L. "We have strengthened our core learning platform and meaningfully broadened our product portfolio. Our investments in AI capabilities with D2L Lumi and improving the learning experience with Creator+ are hitting the mark and helping customers improve learning outcomes. As organizations navigate the near-term macroeconomic conditions, we are competitively well positioned as a strategic partner to help them implement a modern learning platform that is increasingly mission-critical."

Fourth Quarter and Fiscal 2025 Financial Highlights 

• Total revenue of $53.3 million increased by 12% over the same period in the prior year and Constant Currency Revenue¹ increased by 14% to $54.3 million.  
• Subscription and support revenue was $46.8 million, an increase of 11% over the same period of the prior year, reflecting growth from new customers and strong revenue retention and expansion from existing customers.
• Annual Recurring Revenue¹ as at January 31, 2025 increased by 6% year-over-year to $200.2 million and Constant Currency Annual Recurring Revenue¹ grew by 9% over the prior year to $205.3 million, with approximately $4.0 million of this $4.9 million foreign exchange impact happening in Q4 2025.  
• Adjusted Gross Profit² increased by 15% to $37.1 million (69.6% Adjusted Gross Margin²) from $32.2 million (67.7% Adjusted Gross Margin) in the same period of the prior year.
• Adjusted EBITDA² of $9.4 million, up from Adjusted EBITDA of $3.5 million for the comparative period in the prior year.
• Income for the period was $19.9 million, compared with $0.6 million for the comparative period of the prior year.
• Cash flow used in operating activities improved to $0.1 million, versus cash flow used in operating activities of $5.5 million in the same period in the prior year.  
• Free Cash Flow² was negative $0.6 million, compared to Free Cash Flow of negative $6.1 million in the same period in the prior year. Full-year Free Cash Flow grew to $27.0 million, up from $9.9 million in Fiscal 2024.
• Constant Currency Net Revenue Retention Rate¹ was 102.7% for Fiscal 2025, up from 102.1% for Fiscal 2024.
• Strong balance sheet at quarter end, with cash and cash equivalents of $99.2 million and no debt. 
• During Fiscal 2025, the Company repurchased and canceled 401,480 Subordinate Voting Shares under its Normal Course Issuer Bid ("NCIB").

¹ Refer to "Key Performance Indicators" section of this press release.

² A non-IFRS financial measure or non-IFRS ratio.  Refer to "Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures" section of this press release.

Fourth Quarter and Full Year Fiscal 2025 Financial Results – Selected Financial Measures
(in thousands of U.S. dollars, except for percentages)

	Three months ended January 31					Year ended January 31
	2025	2024	Change	Change	2025		2024	Change	Change
	$	$	$	%	$		$	$	%
Subscription & Support Revenue	46,846	42,187	4,659	11.0 %	180,569		162,232	18,337	11.3 %
Professional Services & Other Revenue	6,467	5,382	1,085	20.2 %	24,707		20,148	4,559	22.6 %
Total Revenue	53,313	47,569	5,744	12.1 %	205,276		182,380	22,896	12.6 %
Constant Currency Revenue^1	54,277	47,569	6,708	14.1 %	206,403		182,380	24,023	13.2 %
Gross Profit	36,523	32,035	4,488	14.0 %	139,964		122,196	17,768	14.5 %
Adjusted Gross Profit^1	37,121	32,185	4,936	15.3 %	141,560		122,807	18,753	15.3 %
Adjusted Gross Margin^1	69.6 %	67.7 %			69.0 %		67.3 %
Income (Loss) for the period	19,865	563	19,302	3,428.4 %	25,722		(3,542)	29,264	826.2 %
Adjusted EBITDA^1	9,428	3,463	5,965	172.2 %	28,080		7,862	20,218	257.2 %
Cash Flows from (used in) Operating Activities	(135)	(5,512)	5,377	97.6 %	27,902		15,659	12,243	78.2 %
Free Cash Flow^1	(588)	(6,077)	5,489	90.3 %	26,979		9,932	17,047	171.6 %

¹ A non-IFRS financial measure or non-IFRS ratio.  Refer to the "Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures" section of this press release for more details.

Fourth Quarter Business & Operating Highlights

• D2L's learning platform had more than 20 million users at year end, up from 18 million at the beginning of the year. D2L's customer list grew to more than 1,430 as at January 31, 2025 (up from over 1,310 as at January 31, 2024), representing a broad cross-section of colleges, universities, K-12 school districts and companies in more than 40 countries.
• D2L continued to grow its customer base in global education, adding Roger Williams University, Salta Group, and Desh Bhagat University.
• D2L expanded its corporate customer portfolio, adding Buesa Energy LLC, Alberta Law Enforcement Response Teams Ltd., and Sheppard & Company.
• In January, D2L appointed Andrew Datars as its Chief Technology Officer.
• D2L Brightspace received numerous accolades, including being named a top Learning Management System ("LMS") by both Training Industry and the Craig Weiss Group, and as a winner in the Best Enterprise LMS by Talented Learning. D2L Brightspace also won four Brandon Hall Awards, including gold for best advancement in content authoring technology for the All-New Creator+ tool.
• D2L was selected as one of the winners for its newest artificial intelligence (AI)-powered tool, D2L Lumi, in the Primary, Secondary and Higher Education categories in the Tech & Learning Awards of Excellence: Best of 2024.
• D2L was named on Forbes 2025 list of Canada's best employers.

In addition, the Company announced that Stephen Laster, President, is departing D2L on May 9^th, 2025.  Stephen is taking on a new opportunity as CEO of a private company that does not compete with D2L.

Financial Outlook
D2L is initiating financial guidance for the year ended January 31, 2026 ("Fiscal 2026"). D2L plans to continue making measured investments for growth in Fiscal 2026 while scaling its operations towards increasing levels of profitability. Specifically, for Fiscal 2026 the Company is issuing the following guidance:

• Subscription and support revenue in the range of $194 million to $196 million, implying growth of 7-9% over Fiscal 2025, and 9-10% growth on a constant currency basis;
• Total revenue in the range of $219 million to $221 million, implying growth of 7-8% over Fiscal 2025, and 8-9% growth on a constant currency basis; and
• Adjusted EBITDA in the range of $32 million to $34 million, implying an Adjusted EBITDA Margin of 15%.

"For this fiscal year, our expected growth rates reflect the impact of foreign exchange rates and the current macroeconomic environment, which we view as transitory in nature," said Josh Huff, Chief Financial Officer. "We continue to see robust growth drivers for the company over the medium term, which we expect will lead to higher revenue growth along with further Adjusted EBITDA Margin expansion as we increase NRR ¹, continue to grow our customer base and market share, and consider additional strategic acquisitions."

These targets demonstrate the Company's continued emphasis on balancing growth and profitability, including increased revenue and Adjusted EBITDA in Fiscal 2026 relative to Fiscal 2025. Further, these targets are based upon the current operations of the Company and do not include the impact of any future incremental acquisition transactions, 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. The anticipated revenue growth rates in Fiscal 2026 are informed in part by the levels of sales activity that occurred during Fiscal 2025, and the resulting impact of such activity on the corresponding revenue recognition in Fiscal 2026. The anticipated revenue growth rates in Fiscal 2026 are also informed by the current macroeconomic environment and its impact on foreign exchange rates and our selling activities. 

¹ Refer to "Key Performance Indicators" section of this press release.

Medium-Term Outlook and Target Operating Model

In September 2022, management presented an updated target operating model to evolve the business toward balanced growth and profitability, based upon the Company's outlook at that time and which reflected the operating levels that the Company expected to achieve by Fiscal 2025. Overall, our Fiscal 2025 performance was consistent with this previously presented target operating model. Since our original presentation of this model during Fiscal 2023, we have delivered meaningful top-line and bottom-line growth, with an Adjusted EBITDA improvement of approximately $31 million comparing Fiscal 2023 to Fiscal 2025 (using actual Fiscal 2025 Adjusted EBITDA of $28.1 million to actual Adjusted EBITDA of negative $2.9 million in Fiscal 2023). Our progress in Fiscal 2025 should position us well to continue to deliver top-line and bottom-line growth as we look out over the medium term.  

With the previously presented multi-year target operating model concluding with the Fiscal 2025 results, management is presenting an updated Medium Term Target Operating Model, which reflects the year-over-year revenue growth and Adjusted EBITDA Margin the Company expects to achieve by Fiscal 2028 (the year ending January 31, 2028). Over the medium term, the Company will continue to balance growth and profitability, including making measured investments in growth opportunities and optimizing the operations for increased profitability.

	Fiscal 2028
Revenue Growth	10% to 15%
Adjusted EBITDA Margin	18% to 20%

Our target operating model is based on assumptions and factors that we believe are reasonable in the circumstances, given the applicable time periods, our current and past growth rates, current and past foreign exchange rates and the impact on our results, our current customer contractual commitments and renewal experience and historic results, as well as our view of the drivers of our growth, estimated growth in our target addressable market, and our expectations for our growth strategies.

For additional details on the Company's outlook, refer to the "Financial Outlook" section of the Company's Management's Discussion and Analysis ("MD&A") for the years ended January 31, 2025 and 2024. The principal assumptions and factors underlying this are discussed below. See also the assumptions and factors noted at "Forward-Looking Information".

The foregoing information has been prepared by management of the Company and has been outlined assuming accounting policies that are generally consistent with our current accounting policies. This information is based on underlying assumptions and factors that management believes are reasonable in the circumstances, given the applicable time periods, as well as the Company's capabilities and business plans, current and past growth rates, current customer contractual commitments, customer purchasing history, renewal experience and historic results, management's assessment of market dynamics and views of the drivers of growth, estimated growth in the target addressable market, expectations concerning growth strategies and opportunities, and ability to scale operations and realize cost efficiencies as the Company grows revenues. The foregoing is also based on assumptions relating to external factors that may be beyond our control, including general economic conditions remaining stable, the industry trends described in the "Industry Overview and Trends" section of the Company's Annual Information Form ("AIF"), the outcome of our international expansion, offering expansion, and partner ecosystem expansion initiatives, and cost savings from efficiency improvements and operating leverage.  However, there can be no assurance that we will be successful in achieving the increases in performance set out above. Nor can any assurances be given regarding the realization of our expectations and drivers that anticipated growth and margin improvements are based on.

The purpose of disclosing our medium-term outlook is to provide investors with additional information concerning the Company's operating focus and expected performance over the medium term. However, there can be no assurance that we will be successful in achieving that which is set out above. For example, our strategy may evolve in response to changes in external factors outside our control such as changes in the markets that our customers operate in or general economic conditions, and these factors may affect our ability to achieve these increases in performance over the medium term.  Our views on the medium-term outlook is also forward-looking information for the purposes of applicable securities laws in Canada and readers are therefore cautioned that actual results may vary materially from that discussed above. See also "Summary of Factors Affecting our Performance" and "Forward-Looking Information" set out in the Company's MD&A and "Risk Factors" in the Company's AIF for a description of other assumptions underlying the forward-looking information and of the risks and uncertainties that generally impact our business and that could cause actual results to vary materially.

Conference Call & Webcast
D2L management will host a conference call on Thursday, April 3, 2025 at 8:30 am ET to discuss its fourth quarter and full-year Fiscal 2025 financial results.

Date:		Thursday, April 3, 2025
Time:		8:30 am (ET)
Dial in number:		Canada/US: 1 [phone] International: 1 [phone] Access code: 088343
Webcast:		A live webcast will be available at ir.d2l.com/events-and-presentations/events/ The webcast will also be archived for replay.

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; 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; and 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.

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 above; 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 herein, including "Summary of Factors Affecting Our Performance" of the Company's MD&A for the years ended January 31, 2025 and 2024, or in the "Risk Factors" section of the Company's most recently filed AIF, 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, 2025 and January 31, 2024

		2025	2024
Assets
Current assets:
	Cash and cash equivalents	$    99,184,514	$    116,943,499
	Trade and other receivables	26,430,586	23,025,690
	Uninvoiced revenue	2,756,998	3,971,861
	Prepaid expenses	7,564,837	10,517,226
	Deferred commissions	5,106,976	5,334,864
		141,043,911	159,793,140
Non-current assets:
	Other receivables	422,589	537,056
	Prepaid expenses	308,235	119,872
	Deferred income taxes	18,115,730	529,674
	Right-of-use assets	7,450,545	8,774,960
	Property and equipment	7,125,272	8,427,734
	Deferred commissions	6,909,439	7,730,724
	Loan receivable from associate	9,123,399	—
	Intangible assets	17,135,529	770,707
	Goodwill	25,286,222	10,440,091
Total assets		$   232,920,871	$    197,123,958
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities	$   30,504,085	$    32,635,926
	Deferred revenue	97,454,306	93,727,368
	Lease liabilities	1,201,604	1,002,464
	Contingent consideration	4,927,193	271,479
		134,087,188	127,637,237
Non-current liabilities:
	Deferred income taxes	4,110,030	587,075
	Lease liabilities	9,977,941	11,707,534
	Contingent consideration	—	311,839
		14,087,971	12,606,448
		148,175,159	140,243,685
Shareholders' equity:
	Share capital:	367,487,956	364,830,884
	Additional paid-in capital	48,263,266	47,485,107
	Accumulated other comprehensive loss	(7,456,599)	(4,998,317)
	Deficit	(323,548,911)	(350,437,401)
		84,745,712	56,880,273
Commitments and contingencies
Related party transactions Investment in associate
Total liabilities and shareholders' equity		$   232,920,871	$    197,123,958

D2L INC.
Consolidated Statements of Comprehensive Income (Loss)
(In U.S. dollars)                                                                                                                             

Years ended January 31, 2025 and 2024

		2025			2024
Revenue:
	Subscription and support	$   180,568,575			$   162,231,829
	Professional services and other	24,707,667			20,148,646
		205,276,242			182,380,475
Cost of revenue:
	Subscription and support	49,185,184			45,351,420
	Professional services and other	16,126,816			14,832,600
		65,312,000			60,184,020
Gross profit		139,964,242			122,196,455
Expenses:
	Sales and marketing	53,943,306			52,914,495
	Research and development	46,647,575			48,320,129
	General and administrative	33,175,359			28,074,111
		133,766,240			129,308,735
Income (loss) from operations		6,198,002			(7,112,280)
Interest and other income (expenses):
	Interest expense	(823,099)			(619,860)
	Interest income	3,765,500			4,225,939
	Other (expense) income	(425,452)			230,947
	Gain on SkillsWave disposal transaction	917,395			—
	Foreign exchange (loss) gain	(145,798)			79,689
		3,288,546			3,916,715
Income (loss) before income taxes		9,486,548			(3,195,565)
Income taxes (recovery) expense:
	Current	1,219,741			636,726
	Deferred	(17,454,876)			(290,202)
		(16,235,135)			346,524
Income (loss) for the year		25,721,683			(3,542,089)
Other comprehensive (loss) gain:
	Foreign currency translation (loss) gain	(2,458,282)			3,488
Comprehensive income (loss)		$     23,263,401			$   (3,538,601)
Earnings (loss) per share – basic		$          0.47			$       (0.07)
Earnings (loss) per share – diluted		0.46			(0.07)
Weighted average number of common shares – basic			54,347,672		53,554,686
Weighted average number of common shares – diluted				55,814,610		53,554,686

D2L INC.
Consolidated Statements of Shareholders' Equity
(In U.S. dollars)

Years ended January 31, 2025 and 2024

	Share Capital		Additional paid-in capital	Accumulated other comprehensive loss	Deficit	Total
	Shares	Amount
Balance, January 31, 2023	53,146,530	$  357,639,824	$  46,084,161	$  (5,001,805)	$  (344,630,902)	$  54,091,278
Issuance of Subordinate Voting Shares on exercise of options	497,386	4,581,368	(2,226,913)	—	—	2,354,455
Issuance of Subordinate Voting Shares on settlement of restricted share units	375,369	2,932,606	(5,659,029)	—	—	(2,726,423)
Stock-based compensation	—	—	9,286,888	—	—	9,286,888
Repurchase of share capital for cancellation under NCIB	(41,200)	(322,914)	—	—	—	(322,914)
Share repurchase commitment under the ASPP	—	—	—	—	(2,264,410)	(2,264,410)
Other comprehensive income	—	—	—	3,488	—	3,488
Loss for the year	—	—	—	—	(3,542,089)	(3,542,089)
Balance, January 31, 2024	53,978,085	364,830,884	47,485,107	(4,998,317)	(350,437,401)	56,880,273
Issuance of Subordinate Voting Shares on exercise of options	527,429	4,326,926	(2,151,550)	—	—	2,175,376
Issuance of Subordinate Voting Shares on settlement of restricted share units and deferred share units	549,140	1,894,582	(7,516,087)	—	—	(5,621,505)
Stock-based compensation	—	—	9,695,275	—	—	9,695,275
Excess tax benefit on stock-based compensation	—	—	750,521	—	—	750,521
Repurchase of share capital for cancellation under NCIB	(401,480)	(3,564,436)	—	—	—	(3,564,436)
Share repurchase commitment under the ASPP	—	—	—	—	1,166,807	1,166,807
Other comprehensive loss	—	—	—	(2,458,282)	—	(2,458,282)
Income for the year	—	—	—	—	25,721,683	25,721,683
Balance, January 31, 2025	54,653,174	$  367,487,956	$  48,263,266	$  (7,456,599)	$  (323,548,911)	$  84,745,712

D2L INC.
Consolidated Statements of Cash Flows
(In U.S. dollars)

Years ended January 31, 2025 and 2024

					2025		2024
Operating activities:
		Income (loss) for the year			$  25,721,683		$  (3,542,089)
		Items not involving cash:
		Depreciation of property and equipment			1,702,907		1,598,200
		Depreciation of right-of-use assets			1,273,607		1,184,848
		Amortization of intangible assets			1,285,534		88,097
		Stock-based compensation			9,695,275		9,286,888
		Net interest income			(2,942,401)		(3,606,079)
		Income tax expense			(16,235,135)		346,524
	Gain on SkillsWave disposal transaction			(917,395)			—
	Loss from equity accounted investee			438,098			—
	Fair value loss on loan receivable from associate			376,601			—
		Changes in operating assets and liabilities:
		Trade and other receivables			(2,333,645)		(1,064,604)
		Uninvoiced revenue			1,016,319		(1,841,656)
		Prepaid expenses			2,197,263		(2,293,679)
		Deferred commissions			507,805		(1,661,350)
		Accounts payable and accrued liabilities			(1,221,599)		5,499,539
		Deferred revenue			4,737,086		8,041,852
		Right-of-use assets and lease liabilities			(65,884)		—
		Interest received			3,738,473		4,223,677
		Interest paid			(72,207)		(28,577)
		Income taxes paid			(1,000,818)		(572,592)
		Cash flows from operating activities			27,901,567		15,658,999
Financing activities:
		Payment of lease liabilities			(1,657,536)		(1,015,760)
		Lease incentive received			99,080		961,920
		Proceeds from exercise of stock options			2,175,376		2,354,455
		Taxes paid on settlement of restricted share units			(5,621,505)		(2,726,423)
		Repurchase of share capital for cancellation under NCIB		(3,564,436)			(322,914)
		Cash flows used in financing activities			(8,569,021)		(748,722)
Investing activities:
		Purchase of property and equipment			(923,034)		(5,727,243)
		Acquisition of business, net of cash acquired			(22,982,226)		(2,793,180)
		Payment of contingent consideration			(249,436)		—
		Transfer of cash on disposal of SkillsWave			(1,483,357)		—
		Proceeds from sale of majority ownership stake in SkillsWave				809,038	—
		Issuance of loan to SkillsWave			(9,500,000)		—
		Cash flows used in investing activities			(34,329,015)		(8,520,423)
Effect of exchange rate changes on cash and cash equivalents					(2,762,516)		(178,591)
(Decrease) increase in cash and cash equivalents					(17,758,985)		6,211,263
Cash and cash equivalents, beginning of year					116,943,499		110,732,236
Cash and cash equivalents, end of year					$  99,184,514		$  116,943,499

Non-IFRS Financial Measures and Reconciliation of Non-IFRS Financial Measures
The information presented within this press release refers to certain non-IFRS financial measures (including non-IFRS ratios) including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Margin, and Constant Currency Revenue. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. Non-IFRS financial measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS and are unlikely to be comparable to similar measures presented by other issuers. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations, financial performance and liquidity from management's perspective and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS measures. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of the Company. The Company's management also uses non-IFRS financial measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to assess our ability to meet our capital expenditures and working capital requirements.

Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is defined as net income (loss), excluding interest, taxes, depreciation and amortization (or EBITDA), adjusted for stock-based compensation, foreign exchange gains and losses, non-recurring expenses, transaction-related costs, fair value adjustment of acquired deferred revenue, income (loss) from equity accounted investee, change in fair value on the loan receivable from associate, impairment charges and other income and losses. Adjusted EBITDA Margin is calculated as Adjusted EBITDA expressed as a percentage of total revenue. For an explanation of recent changes to and management's use of Adjusted EBITDA and Adjusted EBITDA Margin see "Non-IFRS and Other Financial Measures – Non-IFRS Financial Measures and Non-IFRS Financial Ratios – Adjusted EBITDA and Adjusted EBITDA Margin" section in the Company's MD&A for the years ended January 31, 2025 and 2024, which section is incorporated by reference herein.

The following table reconciles Adjusted EBITDA to income (loss) for the period, and discloses Adjusted EBITDA Margin, for the periods indicated:

(in thousands of U.S. dollars, except for percentages)	Three months ended January 31		Fiscal year ended January 31
	2025	2024	2025	2024
Income (loss) for the period	19,865	563	25,722	(3,542)
Stock-based compensation	2,583	2,050	9,695	9,287
Foreign exchange loss (gain)	454	300	146	(80)
Non-recurring expenses^(1)	784	1,021	2,954	1,978
Transaction-related costs^(2)	614	88	2,686	809
Fair value adjustment of acquired deferred revenue^(3)	379	—	1,018	—
Change in fair value of loan receivable from associate^(4)	496	—	376	—
Loss from equity accounted investee	21	—	438	—
Net interest income	(594)	(1,124)	(2,942)	(3,606)
Income tax (recovery) expense	(16,442)	43	(16,235)	347
Other income^(5)	(40)	(202)	(40)	(202)
Depreciation and amortization	1,308	724	4,262	2,871
Adjusted EBITDA	9,428	3,463	28,080	7,862
Adjusted EBITDA Margin	17.7 %	7.3 %	13.7 %	4.3 %

Notes:
(1)	These expenses relate to non-recurring activities, such as certain legal fees incurred that are not indicative of continuing operations, and changes of workforce or technology whereby certain functions were realigned to optimize operations.
(2)	These expenses include certain legal and professional fees that were incurred in connection with acquisition and other strategic transactions, including the disposal of our majority ownership stake in SkillsWave Corporation ("SkillsWave") and our acquisition of H5P. These expenses also include post-combination compensation costs from the acquisition of H5P. These year-to-date expenses are net of a gain of $0.9 million recognized for the disposal of our majority ownership stake in SkillsWave. In the prior periods, these expenses included post-combination compensation, legal and other fees related to the acquisition activities of Connected Shopping Ltd. These expenses would not have been incurred if not for these transactions and are not considered to be indicative of expenses associated with the Company's continuing operations.
(3)	During Fiscal 2025, the Company recognized a fair value adjustment on the opening deferred revenue balance acquired as part of the H5P acquisition as required under IFRS 3, Business Combinations. This adjustment is not reflective of ordinary operations and is expected to be substantially completed by the end of Fiscal 2026.
(4)	On a quarterly basis, the Company determines the fair value of the loan advanced to SkillsWave. The adjustments to the fair value of the loan are not reflective of the Company's main business operations and will not impact the Company's future results beyond the maturity date of the loan on June 28, 2029.
(5)	Represents gains recognized from subleasing activities and are considered non-recurring and not reflective of continuing operations.

During the three months ended January 31, 2025, the Company recognized professional services revenue of $0.9 million from re-evaluating the completion progress of certain professional services engagements. Excluding this increase, the Company's Adjusted EBITDA and Adjusted EBITDA Margin would have been $8.5 million and 16.2%, respectively, for the three months ended January 31, 2025.

During Fiscal 2025, the Company recognized professional services revenue of $0.8 million from re-evaluating the completion progress of certain professional services engagements performed in Fiscal 2024. Excluding this increase, the Company's Adjusted EBITDA and Adjusted EBITDA Margin would have been $27.3 million and 13.3%, respectively, for Fiscal 2025.

Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit is defined as gross profit excluding related stock-based compensation expenses and amortization from acquired intangible assets, specifically acquired technology. Adjusted Gross Margin is calculated as Adjusted Gross Profit expressed as a percentage of total revenue. For an explanation of management's use of Adjusted Gross Profit and Adjusted Gross Margin see "Non-IFRS and Other Financial Measures – Non-IFRS Financial Measures and Non-IFRS Financial Ratios – Adjusted Gross Profit and Adjusted Gross Margin" section in the Company's MD&A for the years ended January 31, 2025 and 2024, which section is incorporated by reference herein.

The following table reconciles Adjusted Gross Margin to gross profit expressed as a percentage of revenue, for the periods indicated:

(in thousands of U.S. dollars, except for percentages)	Three months ended January 31			Fiscal year ended January 31
	2025	2024		2025	2024
Gross profit for the period	36,523	32,035		139,964	122,196
Stock based compensation	154	134		596	564
Amortization from acquired intangible assets	444	16		1,000	47
Adjusted Gross Profit	37,121	32,185		141,560	122,807
Adjusted Gross Margin	69.6 %	67.7 %		69.0 %	67.3 %

Free Cash Flow and Free Cash Flow Margin
Free Cash Flow is defined as cash flows from (used in) operating activities less net additions to property and equipment. Free Cash Flow Margin is calculated as Free Cash Flow expressed as a percentage of total revenue. For an explanation of management's use of Free Cash Flow and Free Cash Flow Margin see "Non-IFRS and Other Financial Measures – Non-IFRS Financial Measures and Non-IFRS Financial Ratios – Free Cash Flow and Free Cash Flow Margin" section in the Company's MD&A for the years ended January 31, 2025 and 2024, which section is incorporated by reference herein.

The following table reconciles Free Cash Flow to cash flow (used in) from operating activities, and discloses Free Cash Flow Margin, for the periods indicated:

(in thousands of U.S. dollars, except for percentages)	Three months ended January 31				Fiscal year ended January 31
	2025	2024			2025		2024
Cash flows (used in) from operating activities	(135)	(5,512)				27,902	15,659
Net additions to property and equipment	(453)	(565)				(923)	(5,727)
Free Cash Flow	(588)	(6,077)				26,979	9,932
Free Cash Flow Margin	-1.1 %	-12.8 %				13.1 %	5.4 %

Constant Currency Revenue

Constant Currency Revenue is defined as foreign-currency-denominated revenues translated at the historical exchange rates from the comparable prior period into our U.S. dollar functional currency. For an explanation of management's use of Constant Currency Revenue see "Non-IFRS and Other Financial Measures – Non-IFRS Financial Measures and Non-IFRS Financial Ratios – Constant Currency Revenue" section in the Company's MD&A for the years ended January 31, 2025 and 2024, which section is incorporated by reference herein.

The following table reconciles our Constant Currency Revenue to revenue, for the periods indicated:

	Three months ended January 31		Fiscal year ended January 31
(in thousands of U.S. dollars)	2025	2024	2025	2024
Total revenue for the period	53,313	47,569	205,276	182,380
Negative impact of foreign exchange rate changes over the prior period	964	—	1,127	—
Constant Currency Revenue	54,277	47,569	206,403	182,380

Key Performance Indicators
Management uses a number of metrics, including the key performance indicators identified below, to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other issuers. These metrics are estimated operating metrics and not projections, nor actual financial results, and are not indicative of current or future performance.

• Annual Recurring Revenue and Constant Currency Annual Recurring Revenue: We define Annual Recurring Revenue ("ARR") as the annualized equivalent value of subscription revenue from all existing customer contracts as at the date being measured, exclusive of the implementation period. Our calculation of ARR assumes that customers will renew their contractual commitments as those commitments come up for renewal. We believe ARR provides a reasonable, real-time measure of performance in a subscription-based environment and provides us with visibility for potential growth in our cash flows. We believe that increasing ARR indicates the continued strength in the expansion of our business, and will continue to be our focus on a go-forward basis. We define Constant Currency Annual Recurring Revenue as foreign-currency-denominated ARR translated at the historical exchange rates from the comparable prior period into our U.S. dollar functional currency.

	As at January 31
(in millions of U.S. dollars, except percentages)	2025	2024	Change
	$	$	%
ARR	200.2	188.1	6.4 %
Constant Currency Annual Recurring Revenue	205.3	188.1	9.1 %

• Net Revenue Retention Rate and Constant Currency Net Revenue Retention Rate: We calculate Net Revenue Retention Rate ("NRR") for a fiscal year by considering all customers at the beginning of a fiscal year, and dividing our annual subscription revenue attributable to this group of customers at the end of the fiscal year, by the annual subscription revenue attributable to this group of customers in the prior fiscal year. By implication, this ratio, expressed as a percentage, excludes any sales from new customers acquired during the fiscal year, but does include incremental sales from the existing base of customers during the fiscal year being measured. This calculation contemplates all changes to ARR for the designated group of customers, which includes customer terminations and non-renewals, customer consolidations, changes in quantities of users, changes in pricing, additional applications purchased or applications no longer used. We believe that measuring the ability to retain and expand revenue generated from the existing customer base is a key indicator of the long-term value we provide to customers. NRR for the fiscal year ended January 31, 2025 was 100.0% (102.2% for the fiscal year ended January 31, 2024), representing a year-over-year decrease of 220 basis points, primarily due to the impact of period-over-period changes in foreign currency exchange rate fluctuations. The impact of foreign exchange rates is further addressed in the next key performance indicator, Constant Currency NRR.

We have also introduced Constant Currency NRR which is defined as foreign-currency-denominated NRR translated at the historical exchange rates from the comparable prior period into our U.S. dollar functional currency. Management believes that Constant Currency NRR is a useful measure of operating performance to review and assess the Company's ability to retain and expand revenue generated from the existing customer base by removing the impact of period-over-period changes in foreign currency exchange rate fluctuations. The exclusion of this impact allows for greater comparability between reporting periods. Constant Currency NRR for the fiscal year ended January 31, 2025 was 102.7% (102.1% for the fiscal year ended January 31, 2024), representing a year-over-year increase of 60 basis points. During Fiscal 2025, the Company retired a services subscription offering relating to curriculum design and now provides this type of service through one-time professional services engagements to customers. Excluding the $2.6 million impact of this subscription retirement, Constant Currency NRR would have been 104.1% in Fiscal 2025, which would represent a year-over-year increase of 200 basis points.

• Gross Revenue Retention Rate: We calculate Gross Revenue Retention Rate for a fiscal year by subtracting downgrades, cancellations and terminations over the fiscal year from ARR at the beginning of the year, and dividing the result by the ARR from the beginning of the year.  For clarity, the Gross Revenue Retention Rate calculation does not include incremental sales from the existing base of customers during the fiscal year being measured.  As we continue to increase our product and service offerings, we are providing more visibility into underlying customer and revenue retention rates, in addition to our ability to grow revenue from our existing customers. As a result, Gross Revenue Retention Rate is a key measure to provide insight into the Company's success retaining existing customers and a key indicator of the long-term value we provide to customers. Gross Revenue Retention Rate for the fiscal year ended January 31, 2025 was 93.5% (93.7% for the fiscal year ended January 31, 2024), down by 20 basis points year-over-year. During Fiscal 2025, the Company retired a services subscription offering relating to curriculum design and now provides this type of service through one-time professional services engagements to customers. Excluding the $2.6 million impact of this subscription retirement, Gross Revenue Retention Rate would have been 94.9% in Fiscal 2025, which would represent a year-over-year increase of 120 basis points.  

SOURCE D2L Inc.

For further information, please contact: Craig Armitage, Investor Relations, [email protected], [phone]