D2L (DTOL) Q2 2025 earnings summary

Executive summary

• Achieved 11% year-over-year revenue growth to $49.2 million in Q2, with SaaS/subscription revenue up 12% to $44 million.

• Annual recurring revenue (ARR) rose 11% to $198.3 million, with constant currency ARR up 12%.

• Adjusted EBITDA was $4.2 million (8.6% margin), a significant improvement from a $0.5 million loss last year.

• Surpassed 20 million users on the platform, reflecting strong adoption and scale.

• Strong cash position with $98.1 million and no debt at quarter end.

Financial highlights

• Q2 total revenue: $49.2 million, up 11% year-over-year.

• Subscription and support revenue: $44 million, up 12% year-over-year.

• Gross profit increased 12% to $33.4 million (67.9% margin); subscription gross margin rose to 72.9%.

• Adjusted EBITDA: $4.2 million (8.6% margin), up from -$0.5 million (-1.2%) last year.

• Free cash flow for Q2: $31.2 million, up nearly $11 million year-over-year.

Outlook and guidance

• Fiscal 2025 total revenue expected between $199 million and $202 million, up $1.5 million at midpoint.

• Subscription and support revenue guidance raised to $178–181 million, implying 11% growth at midpoint.

• Adjusted EBITDA guidance increased to $22–24 million, with an expected margin of 11% at midpoint.

• Targeting low- to mid-teens adjusted EBITDA margin by year-end.