D2L (DTOL) Q4 2025 earnings summary

Executive summary

• Q4 revenue grew 12% year-over-year to $53.3 million; full-year revenue up 13% to $205.3 million.

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

• Customer base expanded to over 1,430, with more than 20 million users globally.

• Achieved strong Q4 and fiscal 2025 results, exceeding full-year guidance and reflecting improved profitability.

• Launched an AI-first learning platform strategy, with new products and features driving growth.

Financial highlights

• Q4 subscription and support revenue rose 11% to $46.8 million; annual recurring revenue at year-end was $205.3 million (constant currency), up 9% year-over-year.

• Adjusted gross margin improved by 500 basis points 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 Fiscal 2024; ended year with $99.2 million in cash and no debt.

• Rule of 40 performance advanced to 26% in fiscal 2025 from 7% in 2023.

• Net income for the year was $25.7 million, compared to a loss of $3.5 million in the prior year.

Outlook and guidance

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

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

• Guidance reflects current macroeconomic and FX conditions; M&A not included in targets but expected to be additive.