D2L (DTOL) Q4 2025 earnings summary

Executive summary

• Achieved strong Q4 and fiscal 2025 results, with revenue and adjusted EBITDA exceeding full-year guidance; Q4 revenue rose 12% year-over-year to $53.3M and full-year revenue up 13% to $205.3M.

• Added 4 million users, reaching over 20 million on the Brightspace platform, and expanded customer base to over 1,430 globally.

• Successfully executed a medium-term model, transitioning to improved profitability and growth, with net income for the year at $25.7M compared to a loss of $3.5M in the prior year.

• Navigated macroeconomic challenges, especially in U.S. higher education, while maintaining resilience and focusing on an AI-first platform strategy and international expansion.

• Adjusted EBITDA for Q4 was $9.4M (17.7% margin), up from $3.5M (7.3%) last year; full-year Adjusted EBITDA reached $28.1M.

Financial highlights

• Q4 total revenue grew 12% year-over-year to $53.3 million; constant currency revenue up 14%.

• Subscription and support revenue rose 11% in Q4 to $46.8 million; full-year up 11% to $180.6 million.

• Annual recurring revenue at year-end was $205.3 million (constant currency), up 9% year-over-year; reported ARR was $200.2 million, up 6%.

• Adjusted gross margin improved to 69% for the year; Q4 adjusted gross margin at 69.6%.

• Free cash flow for the year was $27 million, up from $9.9 million in the prior year.

• Ended year with no debt and $99.2 million in cash.

Outlook and guidance

• Fiscal 2026 guidance: subscription and support revenue of $194M–$196M (7%–9% growth), total revenue of $219M–$221M (7%–8% growth), adjusted EBITDA of $32M–$34M (15% margin).

• Medium-term (to fiscal 2028): annual revenue growth of 10%–15%, adjusted EBITDA margin of 18%–20%.

• Guidance reflects current macroeconomic and FX conditions; M&A not included in targets.

• Guidance and outlook are subject to risks including macroeconomic conditions, foreign exchange fluctuations, and evolving market dynamics.