D2L, Inc. (TSE:DTOL)
TSX:DTOL
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D2L
(TSX:DTOL)
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Rating:68Neutral
Price Target:
C$10.50
▲(15.64% Upside)
Action:Reiterated
Date:04/08/26
The score is driven primarily by improved fundamentals—strong and improving free cash flow, healthier leverage, and a shift to positive earnings—plus a constructive but not fully on-model FY27 outlook from the earnings call. These positives are tempered by weak technical trend signals and a high P/E valuation that increases execution risk if growth and margin recovery do not materialize.
Positive Factors
Free cash flow & liquidity
Sustained free cash flow (~$44M) and ~ $119M cash provide durable financial flexibility. Strong FCF that tracks earnings supports reinvestment in product, funds migration costs, share buybacks, and cushions execution risk, enabling multi‑year strategy without reliance on external funding.
Negative Factors
U.S. K-12 churn & renewal risk
Elevated churn in U.S. K‑12 creates concentrated renewal risk and reduces revenue visibility. With roughly one‑third of the base up for renewal each year, persistent K‑12 weakness can materially depress consolidated ARR growth and force increased sales/marketing spend to stabilize retention.
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Positive Factors
Negative Factors
Free cash flow & liquidity
Sustained free cash flow (~$44M) and ~ $119M cash provide durable financial flexibility. Strong FCF that tracks earnings supports reinvestment in product, funds migration costs, share buybacks, and cushions execution risk, enabling multi‑year strategy without reliance on external funding.
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D2L (DTOL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$512.88M
Dividend YieldN/A
Average Volume (3M)50.01K
Price to Earnings (P/E)―
Beta (1Y)1.10
Revenue Growth7.00%
EPS Growth-65.59%
CountryCA
Employees1,000
SectorTechnology
Sector Strength88
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.16
Shares Outstanding27,113,089
10 Day Avg. Volume35,715
30 Day Avg. Volume50,006
Financial Highlights & Ratios
PEG Ratio-0.75
Price to Book (P/B)5.18
Price to Sales (P/S)1.97
P/FCF Ratio10.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$12.58Price Target Upside38.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.34
Revenue Forecast (FY)C$232.86M
D2L Business Overview & Revenue Model
Company Description
D2L Corporation provides an online integrated learning platform for learners in higher education, K12, healthcare, government, and enterprise sectors. It offers Brightspace, a learning platform that combines usability, integrated analytics, and a...
How the Company Makes Money
D2L primarily makes money by selling access to its cloud software (Brightspace) under recurring subscription/SaaS arrangements. Revenue is generally generated from (1) subscription fees for the Brightspace platform, typically priced based on usage...
D2L Earnings Call Summary
Earnings Call Date:Apr 01, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jun 09, 2026
Earnings Call Sentiment Positive
The call presented a largely constructive performance: recurring revenue and ARR expanded, free cash flow and full-year adjusted EBITDA improved, margins expanded year-over-year, and strong AI product momentum (notably Lumi) and customer wins support the growth story. Near-term headwinds include elevated U.S. K-12 churn (impacting consolidated growth), margin pressure from a database migration and FX, a Q4 net loss driven by prior-year one-offs, and a decline in professional services revenue. Management provided FY2027 guidance that shows continued growth but below the company’s medium-term targets while signaling confidence in margin recovery as migration costs abate and AI-driven efficiencies scale. Overall, highlights (recurring revenue growth, cash generation, ARR expansion, AI traction and customer wins) outweigh the disclosed lowlights.Positive Updates
Revenue and Subscription Growth
Total revenue grew 6% for the full year to $217.5M and 5% in Q4 to $55.8M. Subscription and support revenue increased 10% for the full year to $198.4M and 9% in Q4 to $51.1M.
Negative Updates
U.S. K-12 Churn Weighing on Near-Term Growth
Higher churn in the U.S. K-12 customer base was called out as a material near-term headwind. K-12 represents ~10% of ARR at year-end and roughly half (~5% of ARR) is in the U.S. The company indicated this market is reducing consolidated growth in the near term.
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Q4-2026 Updates
Positive
Negative
Revenue and Subscription Growth
Total revenue grew 6% for the full year to $217.5M and 5% in Q4 to $55.8M. Subscription and support revenue increased 10% for the full year to $198.4M and 9% in Q4 to $51.1M.
Read all positive updates
Company Guidance
Management guided fiscal 2027 subscription and support revenue of $212–214M (growth 7–8%), total revenue of $231–234M (growth 6–8%) and adjusted EBITDA of $33–35M (≈15% margin at the midpoint), with revenue and adjusted EBITDA margin expected to improve through the year (stronger H2); they reiterated medium‑term targets of 10–15% revenue growth and 18–20% adjusted EBITDA margin by FY28. Key KPIs cited: FY26 subscription & support revenue $198.4M, ARR $219.8M (10% y/y, 7% cc), ARR ex K‑12 up 14% reported / ~11% cc and Q4 ARR growth ~11% in higher‑ed + corporate (cc), GRR 94.4% and NRR 103.7% (ex K‑12), Q4 adjusted gross margin 68.7% (FY26 adj. gross margin 69.6%; subscription & support gross margin 71.9% Q4, 73.3% FY), free cash flow $44.4M for FY26, cash $119.2M with no debt, Lumi ARR >$3.5M (up from ~$2M at Q3) and >40% attach rate for new higher‑ed customers, database migration reduced H2 gross margin by ~200 bps (expected to moderate in FY27), FX and other near‑term headwinds account for additional margin pressure, and the company repurchased ~1.0M shares in FY26 (~350k in Q4) for ~$11M (cancelling ~3.6% of opening SVS).D2L Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
79
Positive
Cash Flow
86
Very Positive
| Breakdown | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 221.76M | 205.28M | 182.38M | 168.40M | 151.88M |
| Gross Profit | 151.87M | 139.96M | 122.20M | 107.77M | 87.95M |
| EBITDA | 19.04M | 14.57M | 295.44K | -12.98M | -94.02M |
| Net Income | 9.14M | 25.72M | -3.54M | -18.38M | -97.65M |
Balance Sheet | |||||
| Total Assets | 249.82M | 232.92M | 197.12M | 176.61M | 179.21M |
| Cash, Cash Equivalents and Short-Term Investments | 118.21M | 99.18M | 116.94M | 110.73M | 114.68M |
| Total Debt | 11.66M | 11.18M | 12.71M | 13.01M | 1.89M |
| Total Liabilities | 165.55M | 148.18M | 140.24M | 122.52M | 112.83M |
| Stockholders Equity | 84.27M | 84.75M | 56.88M | 54.09M | 66.38M |
Cash Flow | |||||
| Free Cash Flow | 43.01M | 26.98M | 9.93M | 107.00K | -683.71K |
| Operating Cash Flow | 43.80M | 27.90M | 15.66M | 3.78M | 112.25K |
| Investing Cash Flow | -6.19M | -34.33M | -8.52M | -3.67M | -10.22M |
| Financing Cash Flow | -19.46M | -8.57M | -748.72K | -1.63M | 79.08M |
D2L Technical Analysis
Negative
9.08
Price Trends
8.89
Positive
10.07
Negative
13.45
Negative
Market Momentum
-0.03
Positive
46.31
Neutral
22.23
Neutral
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 9.08 is below the 20-day moving average (MA) of 9.36, above the 50-day MA of 8.89, and below the 200-day MA of 13.45, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 46.31 is Neutral, neither overbought nor oversold. The STOCH value of 22.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DTOL.
D2L Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$719.40M | ― | 89.83% | ― | 11.83% | 57.19% | |
68 Neutral | C$512.88M | -78.00 | 10.53% | ― | 7.00% | -65.59% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | C$86.70M | -15.82 | -0.47% | ― | 6.79% | -119.91% | |
41 Neutral | C$19.92M | 4.18 | ― | ― | -13.50% | -261.42% |
* Technology Sector Average
TSE:DTOL
D2L
9.28
-5.18
-35.82%
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D2L Corporate Events
Business Operations and StrategyFinancial Disclosures
D2L Lifts Recurring Revenue and Cash Flow as AI Strategy Offsets U.S. K-12 Weakness
Positive
Apr 1, 2026
D2L Inc. reported Fiscal 2026 fourth-quarter subscription and support revenue of US$51.1 million, up 9% year over year, and full-year subscription revenue of US$198.4 million, up 10%, while annual recurring revenue reached US$219.8 million. Total ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.