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D2L, Inc. (TSE:DTOL)
:DTOL
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D2L, Inc.
(TSX:DTOL)
73Outperform
Positive Factors
Financial Guidance
D2L modestly raised FY2025 guidance, reflecting the recent H5P acquisition, for which it's already starting to capture some revenue synergies.
Profitability
The adj. gross margin was 68.2% (+100bps y/y, +50bps q/q), while the adj. EBITDA margin was 9.6% (+1,090bps y/y, +20bps q/q), helped by continued cost discipline.
Negative Factors
Organic Growth
D2L is seeing a consistent subdued organic ARR growth of roughly +9% y/y, despite a tough y/y comp.
D2L, Inc. (DTOL) vs. S&P 500 (SPY)
Market Cap
C$829.68M
Dividend YieldN/A
Average Volume (3M)46.01K
Price to Earnings (P/E)94.3
Beta (1Y)0.20
Revenue Growth13.45%
EPS GrowthN/A
CountryCA
Employees1,000
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)0.16
Shares Outstanding27,229,637
10 Day Avg. Volume27,247
30 Day Avg. Volume46,007
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.05
Price to Cash Flow (P/CF)13.30
P/FCF Ratio13.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$23.00Price Target Upside42.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
D2L, Inc. Business Overview & Revenue Model
Company DescriptionD2L Inc is a learning innovation company. The company serves K-12, higher education, associations, and the corporate sector. Its product includes D2L Brightspace and D2L Wave.
How the Company Makes MoneyD2L, Inc. generates revenue through a subscription-based model, wherein educational institutions, corporate clients, and government organizations pay to access its Brightspace platform. Key revenue streams include licensing fees for the platform, professional services such as implementation and training, and ongoing support and maintenance services. The company also benefits from strategic partnerships with educational content providers and technology companies, which enhance the capabilities of its platform and expand its market reach. Additionally, D2L offers custom solutions tailored to the specific needs of its clients, further contributing to its revenue.
D2L, Inc. Financial Statement Overview
Summary
D2L, Inc. demonstrates solid financial performance with strong revenue growth and profitability improvements. The company has a robust cash flow position and maintains low leverage, contributing to financial stability. However, there is potential for further enhancing shareholder returns.Income Statement
D2L, Inc. shows strong revenue growth with a TTM increase of 9.41% from the previous annual report. The gross profit margin is robust at 67.94% for TTM, indicating effective cost management. The net profit margin stands at 3.22% for TTM, a considerable improvement from prior losses, showcasing enhanced profitability. Both EBIT and EBITDA margins have turned positive in TTM, reflecting operational improvements.84
Very Positive
Balance Sheet
The company maintains a healthy equity position with an equity ratio of 28.73% in TTM, indicating a stable financial base. The debt-to-equity ratio is low at 0.19, suggesting minimal leverage risk. ROE is 10.24% for TTM, highlighting a positive return on equity, though there is room for improvement to optimize shareholder returns.78
Positive
Cash Flow
D2L, Inc. exhibits a strong cash flow position with a significant free cash flow growth of 115.95% in TTM. The operating cash flow to net income ratio is 3.51, demonstrating efficient cash generation relative to profits. Free cash flow to net income ratio of 3.34 further underscores strong cash conversion efficiency.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 199.53M | 182.38M | 168.40M | 151.88M | 126.37M | 109.49M | Gross Profit |
| 135.48M | 122.20M | 107.77M | 87.95M | 77.08M | 69.32M | EBIT |
| 2.17M | -7.11M | -20.40M | -74.71M | 1.78M | -5.56M | EBITDA |
| 11.06M | 295.44K | -12.98M | -94.02M | -37.94M | -1.88M | Net Income Common Stockholders |
| 6.42M | -3.54M | -18.38M | -97.65M | -41.50M | -5.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 108.25M | 116.94M | 110.73M | 114.68M | 45.22M | 31.39M | Total Assets |
| 218.23M | 197.12M | 176.61M | 179.21M | 85.70M | 64.32M | Total Debt |
| 12.06M | 12.71M | 13.01M | 1.89M | 4.11M | 5.03M | Net Debt |
| -96.20M | -104.23M | -97.73M | -112.78M | -41.11M | -26.36M | Total Liabilities |
| 155.53M | 140.24M | 122.52M | 112.83M | 272.99M | 210.67M | Stockholders Equity |
| 62.70M | 56.88M | 54.09M | 66.38M | -187.29M | -146.34M |
| Cash Flow | Free Cash Flow | ||||
| 21.45M | 9.93M | 107.00K | -683.71K | 14.91M | 4.07M | Operating Cash Flow |
| 22.52M | 15.66M | 3.78M | 112.25K | 16.58M | 5.27M | Investing Cash Flow |
| -29.27M | -8.52M | -3.67M | -10.22M | -1.68M | -1.16M | Financing Cash Flow |
| -6.78M | -748.72K | -1.63M | 79.08M | -2.14M | -2.24M |
D2L, Inc. Technical Analysis
Negative
16.14
Price Trends
18.66
Negative
17.48
Negative
14.81
Positive
Market Momentum
-0.86
Positive
24.23
Positive
10.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DTOL, the sentiment is Negative. The current price of 16.14 is below the 20-day moving average (MA) of 18.52, below the 50-day MA of 18.66, and above the 200-day MA of 14.81, indicating a neutral trend. The MACD of -0.86 indicates Positive momentum. The RSI at 24.23 is Positive, neither overbought nor oversold. The STOCH value of 10.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DTOL.
D2L, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$829.68M | 94.35 | 10.54% | ― | 13.45% | ― | |
70 Outperform | $174.00B | 62.26 | 19.58% | ― | 27.85% | 1400.97% | |
69 Neutral | $9.85B | 11.00 | 16.00% | 3.93% | -3.59% | 432.46% | |
68 Neutral | C$4.41B | 157.81 | -0.10% | ― | 14.85% | -105.25% | |
63 Neutral | C$99.57B | 99.43 | 30.90% | 0.12% | 21.56% | 31.90% | |
60 Neutral | C$2.29B | ― | -5.18% | ― | 23.95% | 39.68% | |
58 Neutral | $21.66B | 10.30 | -18.41% | 2.35% | 4.82% | -24.91% |
* Technology Sector Average
Performance Comparison
TSE:DTOL
D2L, Inc.
15.19
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35.02%
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134.38
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TSE:OTEX
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TSE:KXS
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156.78
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TSE:LSPD
Lightspeed POS Inc
14.98
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TSE:CSU
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4,600.00
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22.21%
D2L, Inc. Earnings Call Summary
Earnings Call Date: Dec 4, 2024 | % Change Since: -3.00% | Next Earnings Date: Apr 2, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, with significant growth in subscription revenue and ARR milestones. Product innovations were well-received, and international expansion continues to show promise. However, macroeconomic headwinds and competitive challenges remain concerns.Highlights
Strong Subscription Revenue Growth
Subscription and support revenue grew 13% year-over-year to $46.8 million in the quarter.
Annual Recurring Revenue Milestone
ARR surpassed $200 million for the first time, ending the quarter at $201.7 million, up 12% year-over-year.
Adjusted EBITDA and Margin Improvement
Adjusted EBITDA for the quarter was $10.4 million with a margin of 19.2%, indicating improved profitability.
International Expansion
Continued international growth with new markets like Brazil and India showing promising developments.
Product Innovation and Customer Impact
Introduction of D2L Lumi and Creator+ with positive customer feedback; American College of Financial Services saw an 18% increase in certifications.
Strong Professional Services Revenue
Professional services revenue increased to $7.5 million, driven by demand for online learning strategies.
Lowlights
Macroeconomic Headwinds
General macroeconomic conditions and lower RFP activity affected the overall market environment.
Currency Exchange Impact
Strengthening of the U.S. dollar relative to non-USD revenue posed a challenge for international revenue.
Competitive Market Challenges
Potential disruptions from competitor acquisitions and market changes may impact future growth.
Company Guidance
During the D2L Inc. Q3 Fiscal 2025 earnings call, the company reported strong financial performance with several key metrics highlighted. Subscription and support revenue grew 13% year-over-year to $46.8 million, while services revenue increased to $7.5 million. The company's annual recurring revenue (ARR) surpassed $200 million for the first time, reaching $201.7 million, marking a 12% year-over-year increase. Adjusted EBITDA for the quarter was $10.4 million, with an adjusted EBITDA margin of 19.2%. The company also improved its Rule of 40 performance to 25% for the fiscal year-to-date. These results reflect D2L's strategic focus on balancing growth with profitability, supported by disciplined expense management and strategic investments in innovation, particularly in AI-driven products like D2L Lumi and Creator+.D2L, Inc. Corporate Events
D2L Inc. Reports Strong Q3 2025 Growth
Dec 4, 2024
D2L Inc. reported a strong third quarter for 2025, with total revenue increasing by 18% and subscription revenue growing by 13%, driven by their expanding product portfolio including AI innovations. The company’s strategic focus on balancing growth and profitability has resulted in a significant improvement in their financial metrics, demonstrating their robust market position and potential for long-term leadership in the learning technology sector.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.