- Total revenue in Q3 increased 8% year-over-year to US$46.1 million
- Subscription and support revenue grew 13% year-over-year to
US$41.5 million
- Annual Recurring Revenue1 reached US$180.1 million, up 12% over the prior year
- Adjusted EBITDA of $2.1 million
in Q3 and $4.4 million for the
year-to-date period, an increase of $7.7
million from the same period of the prior year
- Normal Course Issuer Bid initiated
TORONTO, Dec. 5, 2023
/CNW/ - D2L Inc. (TSX: DTOL) ("D2L" or the
"Company"), a leading global learning technology company, today
announced financial results for its Fiscal 2024 third quarter ended
October 31, 2023. All amounts are in
U.S. dollars and all figures are prepared in accordance with
International Financial Reporting Standards (IFRS) unless otherwise
indicated.
"It was a solid third quarter for the company as we demonstrated
continued progress toward our balanced growth model and
meaningfully improved operating leverage," said John Baker, CEO of D2L. "Subscription revenue
growth accelerated again this quarter to 13%, subscription gross
profit rose 18%, and cash flow from operations increased to more
than $20 million for the fiscal year
to date. We have placed a heightened focus on operating efficiency
and profitability over the past year, and at the same time we
continue to make the right investments in our products and teams to
win flagship customers in our core markets. Leading educational
institutions and companies are choosing D2L as their partner to
digitally transform and achieve their strategic learning goals –
helping them solve more challenges – and enabling us to build
toward becoming the category leader."
Third Quarter Fiscal 2024 Financial Highlights
- Total revenue of $46.1 million,
up 8% from the same period in the prior year. Constant Currency
Revenue2 grew 8% year-over-year to $46.1 million.
- Subscription and support revenue was $41.5 million, an increase of 13% over the same
period of the prior year, reflecting growth from new customers and
strong revenue retention and expansion from existing
customers.
- Annual Recurring Revenue1 ("ARR") as at October 31, 2023 increased by 12% year-over-year,
from $160.3 million to $180.1 million. The sequential change in ARR was
negatively impacted by the strengthening of the U.S. dollar
relative to the Company's non-U.S. dollar contracts, which reduced
reported ARR as at October 31, 2023
by approximately $3.1 million
relative to the ARR balance reported as at July 31, 2023.
- Gross profit increased 11% to $30.6
million (66.4% gross profit margin) from $27.5 million (64.5% gross profit margin) in the
same period of the prior year.
- Gross profit margin for subscription and support revenue
increased to 71.3%, from 68.3% in the same period of the prior
year, an improvement of 300 basis points.
- Positive Adjusted EBITDA1 of $2.1 million, compared with an Adjusted EBITDA
loss of $0.4 million for the
comparative period in the prior year.
- Loss for the period was $0.4
million, compared with a loss of $2.6
million for the comparative period of the prior year.
- Cash flow from operating activities was $15.3 million, versus $8.1
million in the same period in the prior year, and Free Cash
Flow2 was $14.2 million,
compared to Free Cash Flow of $7.3
million in the same period in the prior year.
- Strong balance sheet at quarter end, with cash and cash
equivalents of $123.1 million and no
debt.
1 Please refer to "Key
Performance Indicators" section of this press
release.
|
2 A non-IFRS financial
measure or non-IFRS ratio. Please refer to "Non-IFRS Financial
Measures and Reconciliation of Non-IFRS Financial Measures" section
of this press release.
|
Third Quarter Fiscal 2024 Financial Results – Selected
Financial Measures
(in thousands of U.S. dollars, except
for percentages)
|
Three months ended
October 31
|
Nine months ended
October 31
|
|
2023
|
2022
|
Change
|
Change
|
2023
|
2022
|
Change
|
Change
|
|
$
|
$
|
$
|
%
|
$
|
$
|
$
|
%
|
|
Subscription &
Support Revenue
|
41,450
|
36,565
|
4,885
|
13.4 %
|
120,045
|
108,149
|
11,896
|
11.0 %
|
|
Professional Services
& Other Revenue
|
4,663
|
6,103
|
(1,440)
|
-23.6 %
|
14,766
|
17,563
|
(2,797)
|
-15.9 %
|
|
Total
Revenue
|
46,113
|
42,668
|
3,445
|
8.1 %
|
134,811
|
125,712
|
9,099
|
7.2 %
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency
Revenue1
|
46,098
|
42,668
|
3,430
|
8.0 %
|
136,411
|
125,712
|
10,699
|
8.5 %
|
|
Gross Profit
|
30,600
|
27,505
|
3,095
|
11.3 %
|
90,161
|
80,444
|
9,717
|
12.1 %
|
|
Adjusted Gross Profit
1
|
30,747
|
27,609
|
3,138
|
11.4 %
|
90,591
|
80,705
|
9,886
|
12.2 %
|
|
Adjusted Gross
Margin1
|
66.7 %
|
64.7 %
|
|
2.0 %
|
67.2 %
|
64.2 %
|
|
3.0 %
|
|
Loss for the
period
|
(387)
|
(2,625)
|
2,238
|
85.3 %
|
(4,105)
|
(12,191)
|
8,086
|
66.3 %
|
|
Adjusted EBITDA
(Loss)1
|
2,122
|
(359)
|
2,481
|
691.1 %
|
4,399
|
(3,329)
|
7,728
|
232.1 %
|
|
Cash Flows from
Operating Activities
|
15,318
|
8,131
|
7,187
|
88.4 %
|
21,171
|
9,058
|
12,113
|
133.7 %
|
|
Free Cash
Flow1
|
14,244
|
7,339
|
6,905
|
94.1 %
|
16,009
|
7,153
|
8,856
|
123.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
1 A non-IFRS financial
measure or non-IFRS ratio. Please refer to the "Non-IFRS
Financial Measures and Reconciliation of Non-IFRS Financial
Measures" section of this press release for more
details.
|
Business & Operating Highlights
- D2L continued to grow its customer base in education in
North America, including Parker
University and the Royal Canadian Business College.
- Continued to expand international customer base, including
Galgotias University and Universidade Paranaense (UNIPAR).
- Signed new global corporate customers, including Walmart
Canada, the British Council and Kardia Group LLC.
- In Q3, launched D2L for Business – a corporate learning
solution designed to maximize return on investment in learning and
help empower employers to attract, retain, onboard, and upskill
their workforce.
- D2L attained new certifications for WCAG 2.2 accessibility and
ISO 27701:2019 Privacy Compliance, the first company in the leading
LMS providers category to achieve these important
certifications.
- Announced new and enhanced Brightspace product features,
including new Creator+ tools, an AI-driven, contextual help feature
(Brightspace Virtual Assistant), and early access both to
AI-powered question generation and to D2L Link (easier and faster
to integrate D2L Brightspace with other systems).
- Earned two Gold Brandon Hall Awards for Best Unique or
Innovative Leadership Program and Best Unique or Innovative
Learning and Development Program – and a Bronze award for Best
Advance in Competencies and Skill Development.
Financial Outlook
Financial Guidance Fiscal 2024
The Company is updating, in part, its previous guidance for the 12
months ended January 31, 2024
("Fiscal 2024") as follows:
- Subscription and support revenue in the range of $161 million to $162
million, reflecting growth of 10% to 11% over Fiscal 2023,
an increase from previously issued guidance of $159 million to $161
million;
- Total revenue unchanged in the range of $180 million to $182
million, reflecting growth of 7% to 8% over Fiscal 2023;
and
- Adjusted EBITDA in the top half of its current guidance range
of $6 million to $8 million.
These revisions reflect the Company's continued progress in
balancing top-line recurring revenue growth with increasing
profitability, in particular the subscription revenue growth, gross
margin expansion, and continued cost optimization for the fiscal
year to date period. For additional detail on the assumptions
underlying the Company's Fiscal 2024 Financial Outlook, please
refer to the "Financial Outlook" section of the Company's MD&A
for the year ended January 31,
2023.
Conference Call & Webcast
D2L management will host a conference call on Wednesday, December 6, 2023 at 8:30 am ET to discuss its third quarter Fiscal
2024 financial results.
Date:
|
|
Wednesday, December 6,
2023
|
Time:
|
|
8:30 am (ET)
|
Dial in
number:
|
|
Canada/US: 1 (833)
470-1428
International: 1 (404)
975-4839
Access code:
902889
|
|
|
|
Webcast:
|
|
A live webcast will be
available
at ir.d2l.com/events-and-presentations/events/
|
|
|
|
Replay:
|
|
Canada/US: 1 (866)
813-9403 or International: (929) 458-6194
(replay code:
150560)
Available until
December 13, 2023
|
Forward-Looking Information
This press release
includes statements containing "forward-looking information" within
the meaning of applicable securities laws. In some cases,
forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", "budget",
"scheduled", "estimates", "outlook", "target", "forecasts",
"projection", "potential", "prospects", "strategy", "intends",
"anticipates", "seek", "believes", "opportunity", "guidance",
"aim", "goal" or variations of such words and phrases or statements
that certain future conditions, actions, events or results "may",
"could", "would", "should", "might", "will", "can", or negative
versions thereof, "be taken", "occur", "continue" or "be achieved",
and other similar expressions. Statements containing
forward-looking information are not historical facts, but instead
represent management's expectations, estimates and projections
regarding future events or circumstances.
This forward-looking information relates to the Company's future
financial outlook and anticipated events or results and includes,
but is not limited to, statements under the heading "Financial
Outlook" and information regarding: the Company's financial
position, financial results, business strategy, performance,
achievements, prospects, objectives, opportunities, business plans
and growth strategies; the Company's budgets, operations and taxes;
judgments and estimates impacting on financial statements;
the Company's intention to repurchase Subordinate Voting
Shares under its NCIB; industry trends and the Company's
competitive position; expansion of the Company's product offerings;
the timing and pace for achieving gross profitability; and
expectations regarding the growth of the Company's customer base,
revenue and revenue generation potential.
Forward-looking information is based on certain assumptions,
expectations and projections, and analyses made by the Company in
light of management's experience and perception of historical
trends, current conditions and expected future developments and
other factors it believes are appropriate, including the following:
the Company's ability to win business from new customers and expand
business from existing customers; the timing of new customer wins
and expansion decisions by existing customers; the Company's
ability to generate revenue and expand its business while
controlling costs and expenses; the Company's ability to manage
growth effectively; the Company's ability to hire and retain
personnel effectively; the effects of foreign currency exchange
rate fluctuations on our operations; the ability to seek out, enter
into and successfully integrate acquisitions; business and industry
trends, including the success of current and future product
development initiatives; positive social development and attitudes
toward the pursuit of higher education; the Company's ability to
maintain positive relationships with its customer base and
strategic partners; the Company's ability to adapt and develop
solutions that keep pace with continuing changes in technology,
education and customer needs; the ability to patent new
technologies and protect intellectual property rights; the
Company's ability to comply with security, cybersecurity and
accessibility laws, regulations and standards; the assumptions
underlying the judgments and estimates impacting on financial
statements; the availability of capital resources for, and the
permissibility under the Company's credit facility of, repurchases
of outstanding Subordinate Voting Shares under its NCIB; and
the Company's ability to retain key personnel; and that the list of
factors referenced in the following paragraph, collectively, do not
have a material impact on the Company.
Although the Company believes that the assumptions underlying
such forward-looking information were reasonable when made, they
are inherently uncertain and are subject to significant risks and
uncertainties and may prove to be incorrect. The Company cautions
investors that forward-looking information is not a guarantee of
the future and that actual results may differ materially from those
made in or suggested by the forward-looking information contained
in this press release. Whether actual results, performance or
achievements will conform to the Company's expectations and
predictions is subject to a number of known and unknown risks,
uncertainties and other factors, including but not limited to the
risks identified herein, or at "Summary of Factors Affecting Our
Performance" of the Company's Management's Discussion and
Analysis ("MD&A") for the three and nine months ended
October 31, 2023, or in the "Risk
Factors" section of the Company's most recently filed Annual
Information Form, as well as risks associated with using capital
resources to repurchase Subordinate Voting Shares under the
Company's NCIB. If any of these risks or uncertainties materialize,
or if assumptions underlying the forward-looking information prove
incorrect, actual results might vary materially from those
anticipated in the forward-looking information.
Given these risks and uncertainties, investors are cautioned not
to place undue reliance on forward-looking information, including
any financial outlook. Any forward-looking information that is
contained in this press release speaks only as of the date of such
statement, and the Company undertakes no obligation to update any
forward-looking information or to publicly announce the results of
any revisions to any of those statements to reflect future events
or developments, except as required by applicable securities laws.
Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future
performance, unless specifically expressed as such, and should only
be viewed as historical data.
About D2L Inc. (TSX: DTOL)
D2L is transforming the way the world learns—helping learners of
all ages achieve more than they dreamed possible. Working closely
with customers all over the world, D2L is supporting millions of
people learning online and in person. Our global workforce is
dedicated to making the best learning products to leave the world
better than they found it. Learn more at www.D2L.com.
D2L INC.
Condensed Consolidated Interim Statements of
Financial Position
(In U.S. dollars)
As at October 31, 2023 and
January 31, 2023
(Unaudited)
|
October 31,
2023
|
January 31,
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
123,090,698
|
$
110,732,236
|
|
Trade and other
receivables
|
20,777,114
|
20,894,794
|
|
Uninvoiced
revenue
|
2,511,362
|
2,107,015
|
|
Prepaid
expenses
|
6,859,336
|
8,183,390
|
|
Deferred
commissions
|
4,842,499
|
4,487,043
|
|
|
158,081,009
|
146,404,478
|
|
|
|
|
Non-current
assets:
|
|
|
|
Other
receivables
|
—
|
193,036
|
|
Prepaid
expenses
|
190,421
|
122,469
|
|
Deferred income
taxes
|
310,670
|
189,178
|
|
Right-of-use
assets
|
9,172,978
|
11,205,371
|
|
Property and
equipment
|
8,246,634
|
4,287,095
|
|
Deferred
commissions
|
7,392,214
|
6,849,779
|
|
Intangible
assets
|
771,301
|
288,099
|
|
Goodwill
|
10,115,029
|
7,070,432
|
|
|
|
Total
assets
|
$
194,280,256
|
$
176,609,937
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$ 26,043,043
|
$
23,450,767
|
|
Deferred
revenue
|
97,819,329
|
85,662,830
|
|
Lease
liabilities
|
945,686
|
1,127,600
|
|
Contingent
consideration
|
303,202
|
—
|
|
|
125,111,260
|
110,241,197
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
Deferred income
taxes
|
541,061
|
398,906
|
|
Contingent
consideration
|
304,191
|
—
|
|
Lease
liabilities
|
11,637,031
|
11,878,556
|
|
|
12,482,283
|
12,277,462
|
|
|
137,593,543
|
122,518,659
|
Shareholders'
equity:
|
|
|
|
Share
capital
|
362,042,253
|
357,639,824
|
|
Additional paid-in
capital
|
49,403,139
|
46,084,161
|
|
Accumulated other
comprehensive loss
|
(6,022,677)
|
(5,001,805)
|
|
Deficit
|
(348,736,002)
|
(344,630,902)
|
|
56,686,713
|
54,091,278
|
|
Related party
transactions
Subsequent
event
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$ 194,280,256
|
$
176,609,937
|
D2L INC.
Condensed Consolidated Interim Statements of
Comprehensive Income (Loss)
(In U.S.
dollars)
For the three and nine months ended October 31, 2023 and 2022
(Unaudited)
|
Three months ended
October 31
|
Nine months ended
October 31
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Subscription and
support
|
$
41,449,926
|
$
36,565,449
|
$
120,045,266
|
$
108,149,237
|
|
Professional services
and other
|
4,662,769
|
6,102,894
|
14,765,509
|
17,562,617
|
|
|
46,112,695
|
42,668,343
|
134,810,775
|
125,711,854
|
Cost of
revenue:
|
|
|
|
|
|
Subscription and
support
|
11,884,640
|
11,582,242
|
33,977,839
|
34,424,394
|
|
Professional services
and other
|
3,627,638
|
3,581,305
|
10,671,456
|
10,844,154
|
|
|
15,512,278
|
15,163,547
|
44,649,295
|
45,268,548
|
|
|
|
|
|
|
Gross profit
|
30,600,417
|
27,504,796
|
90,161,480
|
80,443,306
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Sales and
marketing
|
12,807,855
|
13,801,928
|
40,209,601
|
40,880,791
|
|
Research and
development
|
12,351,201
|
10,770,445
|
36,015,722
|
32,506,410
|
|
General and
administrative
|
7,102,165
|
6,523,976
|
20,603,875
|
19,509,478
|
|
|
32,261,221
|
31,096,349
|
96,829,198
|
92,896,679
|
|
|
|
|
|
|
Loss from
operations
|
(1,660,804)
|
(3,591,553)
|
(6,667,718)
|
(12,453,373)
|
|
|
|
|
|
|
Interest and other
income (expenses):
|
|
|
|
|
|
Interest
expense
|
(157,582)
|
(152,617)
|
(456,456)
|
(556,474)
|
|
Interest
income
|
1,221,704
|
272,586
|
2,938,216
|
447,667
|
|
Other income
(expense)
|
(10,355)
|
(1,280)
|
4,897
|
(1,280)
|
|
Foreign exchange
gain
|
314,938
|
976,109
|
380,417
|
797,751
|
|
|
1,368,705
|
1,094,798
|
2,867,074
|
687,664
|
|
|
|
|
|
|
Loss before income
taxes
|
(292,099)
|
(2,496,755)
|
(3,800,644)
|
(11,765,709)
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
Current
|
43,883
|
73,266
|
435,294
|
428,362
|
|
Deferred
|
51,613
|
55,275
|
(130,838)
|
(2,740)
|
|
|
95,496
|
128,541
|
304,456
|
425,622
|
|
|
|
|
|
|
Loss for the
period
|
(387,595)
|
(2,625,296)
|
(4,105,100)
|
(12,191,331)
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
Foreign currency
translation loss
|
(1,556,171)
|
(1,455,134)
|
(1,020,872)
|
(1,655,389)
|
Comprehensive
loss
|
$
(1,943,766)
|
$
(4,080,430)
|
$
(5,125,972)
|
$
(13,846,720)
|
|
|
|
|
|
|
Loss per share –
basic
|
$
(0.01)
|
$
(0.05)
|
$
(0.08)
|
$
(0.23)
|
Loss per share –
diluted
|
(0.01)
|
(0.05)
|
(0.08)
|
(0.23)
|
|
|
|
|
|
Weighted average number
of common shares – basic
|
53,703,768
|
53,032,726
|
53,454,498
|
53,008,544
|
Weighted average number
of common shares – diluted
|
53,703,768
|
53,032,726
|
53,454,498
|
53,008,544
|
D2L INC.
Condensed Consolidated Interim Statements of
Shareholders' Equity
(In U.S. dollars)
For the nine months ended October 31,
2023 and 2022
(Unaudited)
|
Share
Capital
|
Additional
paid-in
|
Accumulated
other
|
Deficit
|
Total
|
|
Shares
|
Amount
|
capital
|
comprehensive
loss
|
|
|
|
|
|
|
|
|
|
Balance, January 31,
2023
|
53,146,530
|
$
357,639,824
|
$
46,084,161
|
$
(5,001,805)
|
$
(344,630,902)
|
$
54,091,278
|
Issuance of Subordinate
Voting
Shares on exercise of options
|
381,794
|
3,414,019
|
(1,443,627)
|
—
|
—
|
1,970,392
|
Issuance of Subordinate
Voting
Shares on settlement of
restricted share units
|
218,010
|
988,410
|
(2,474,669)
|
—
|
—
|
(1,486,259)
|
Stock-based
compensation
|
—
|
—
|
7,237,274
|
—
|
—
|
7,237,274
|
Other comprehensive
loss
|
—
|
—
|
—
|
(1,020,872)
|
—
|
(1,020,872)
|
Loss for the
period
|
—
|
—
|
—
|
—
|
(4,105,100)
|
(4,105,100)
|
Balance, October 31,
2023
|
53,746,334
|
$
362,042,253
|
$
49,403,139
|
$
(6,022,677)
|
$
(348,736,002)
|
$
56,686,713
|
|
|
|
|
|
|
|
Balance, January 31,
2022
|
52,912,502
|
$
354,277,986
|
$
41,686,794
|
$
(3,330,708)
|
$
(326,254,177)
|
$
66,379,895
|
Issuance of Subordinate
Voting
Shares on exercise of options
|
120,224
|
994,958
|
(368,690)
|
—
|
—
|
626,268
|
Stock-based
compensation
|
—
|
—
|
5,796,417
|
—
|
—
|
5,796,417
|
Other comprehensive
loss
|
—
|
—
|
—
|
(1,655,389)
|
—
|
(1,655,389)
|
Loss for the
period
|
—
|
—
|
—
|
—
|
(12,191,331)
|
(12,191,331)
|
Balance, October 31,
2022
|
53,032,726
|
$
355,272,944
|
$
47,114,521
|
$
(4,986,097)
|
$
(338,445,508)
|
$
58,955,860
|
D2L INC.
Condensed Consolidated Interim Statements of
Cash Flows
(In U.S. dollars)
For the nine months ended October 31,
2023 and 2022
(Unaudited)
|
|
|
2023
|
2022
|
Operating
activities:
|
|
|
|
Loss for the
period
|
$ (4,105,100)
|
$
(12,191,331)
|
|
Items not involving
cash:
|
|
|
|
|
Depreciation of
property and equipment
|
1,158,782
|
1,238,064
|
|
|
Depreciation of
right-of-use assets
|
927,605
|
1,670,289
|
|
|
Amortization of
intangible assets
|
60,159
|
356,344
|
|
|
(Gain) loss on disposal
of property and equipment
|
(16,194)
|
1,280
|
|
|
Stock-based
compensation
|
7,237,274
|
5,796,417
|
|
|
Net interest expense
(income)
|
(2,481,760)
|
108,807
|
|
|
Income tax
expense
|
304,456
|
425,622
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade and other
receivables
|
1,041,252
|
5,002,660
|
|
|
Uninvoiced
revenue
|
(440,936)
|
(151,920)
|
|
|
Prepaid
expenses
|
1,073,501
|
2,199,560
|
|
|
Deferred
commissions
|
(1,105,606)
|
(365,514)
|
|
|
Accounts payable and
accrued liabilities
|
1,952,832
|
(2,150,085)
|
|
|
Provisions
|
—
|
(3,265,449)
|
|
|
Deferred
revenue
|
13,243,128
|
10,050,634
|
|
|
Right-of-use assets and
lease liabilities
|
(57,530)
|
134,720
|
|
Interest
received
|
2,938,216
|
447,667
|
|
Interest
paid
|
(9,815)
|
(77,461)
|
|
Income taxes
paid
|
(549,475)
|
(171,960)
|
|
Cash flows from
operating activities
|
21,170,789
|
9,058,344
|
Financing
activities:
|
|
|
|
Payment of lease
liabilities
|
(575,023)
|
(1,520,145)
|
|
Lease incentive
received
|
935,025
|
—
|
|
Proceeds from exercise
of stock options
|
1,970,392
|
626,268
|
|
Taxes paid on
settlement of restricted share units
|
(1,486,259)
|
—
|
|
Cash flows from (used)
in financing activities
|
844,135
|
(893,877)
|
Investing
activities:
|
|
|
|
Purchase of property
and equipment
|
(5,178,461)
|
(1,905,312)
|
|
Proceeds from disposal
of property and equipment
|
16,537
|
—
|
|
Acquisition of
business, net of cash acquired
|
(2,793,180)
|
—
|
|
Cash flows used in
investing activities
|
(7,955,104)
|
(1,905,312)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(1,701,358)
|
(2,955,119)
|
Increase in cash and
cash equivalents
|
12,358,462
|
3,304,036
|
Cash and cash
equivalents, beginning of period
|
110,732,236
|
114,675,495
|
Cash and cash
equivalents, end of period
|
123,090,698
|
117,979,531
|
Non-IFRS Financial Measures and Reconciliation of Non-IFRS
Financial Measures
The information presented within this
press release refers to certain non-IFRS financial measures
(including non-IFRS ratios) including Adjusted EBITDA, Adjusted
EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Free
Cash Flow, Free Cash Flow Margin, and Constant Currency Revenue.
These measures are not recognized measures under IFRS and do not
have a standardized meaning prescribed by IFRS. Non-IFRS financial
measures should not be considered in isolation nor as a substitute
for analysis of the Company's financial information reported under
IFRS and are unlikely to be comparable to similar measures
presented by other issuers. Rather, these measures are provided as
additional information to complement those IFRS measures by
providing further understanding of the Company's results of
operations, financial performance and liquidity from management's
perspective and thus highlight trends in its core business that may
not otherwise be apparent when relying solely on IFRS measures. The
Company believes that securities analysts, investors and other
interested parties frequently use non-IFRS financial measures in
the evaluation of the Company. The Company's management also uses
non-IFRS financial measures to facilitate operating performance
comparisons from period to period, to prepare annual operating
budgets and forecasts, and to assess our ability to meet our
capital expenditures and working capital requirements.
Adjusted EBITDA and Adjusted EBITDA
Margin
Adjusted EBITDA is defined as net income (loss),
excluding interest, taxes, depreciation and amortization (or
EBITDA), adjusted for stock-based compensation, foreign exchange
gains and losses, non-recurring expenses, acquisition-related
costs, impairment charges and other income and losses. Adjusted
EBITDA Margin is calculated as Adjusted EBITDA expressed as a
percentage of total revenue. For an explanation of management's use
of Adjusted EBITDA and Adjusted EBITDA Margin see "Non-IFRS and
Other Financial Measures" section in the Company's MD&A for
the three and nine months ended October 31,
2023.
The following table reconciles Adjusted EBITDA to income (loss)
for the period, and discloses Adjusted EBITDA Margin, for the
periods indicated:
(in thousands of
U.S. dollars, except for percentages)
|
Three months ended
October 31
|
Nine months ended
October 31
|
2023
|
2022
|
2023
|
2022
|
Loss for the
period
|
(387)
|
(2,625)
|
(4,105)
|
(12,191)
|
Stock-based
compensation
|
2,068
|
2,153
|
7,237
|
5,796
|
Foreign exchange loss
(gain)
|
(315)
|
(976)
|
(380)
|
(798)
|
Non-recurring
expenses
|
807
|
64
|
957
|
64
|
Acquisition-related
costs
|
169
|
—
|
721
|
—
|
Net interest expense
(income)
|
(1,064)
|
(120)
|
(2,482)
|
109
|
Income tax
expense
|
95
|
128
|
304
|
425
|
Depreciation and
amortization
|
749
|
1,017
|
2,147
|
3,266
|
Adjusted
EBITDA
|
2,122
|
(359)
|
4,399
|
(3,329)
|
Adjusted EBITDA
Margin
|
4.6 %
|
-0.8 %
|
3.3 %
|
-2.6 %
|
Adjusted Gross Profit and Adjusted Gross
Margin
Adjusted Gross Profit is defined as gross profit
excluding related stock-based compensation expenses. Adjusted Gross
Margin is calculated as Adjusted Gross Profit expressed as a
percentage of total revenue. For an explanation of management's use
of Adjusted Gross Profit and Adjusted Gross Margin see "Non-IFRS
and Other Financial Measures" section in the Company's MD&A
for the three and nine months ended October
31, 2023.
The following table reconciles Adjusted Gross Margin to gross
profit expressed as a percentage of revenue, for the periods
indicated:
(in thousands of
U.S. dollars, except for percentages)
|
Three months ended
October 31
|
Nine months ended
October 31
|
2023
|
2022
|
2023
|
2022
|
Gross profit for the
period
|
30,600
|
27,505
|
90,161
|
80,444
|
Stock based
compensation
|
147
|
104
|
430
|
261
|
Adjusted Gross
Profit
|
30,747
|
27,609
|
90,591
|
80,705
|
Adjusted Gross
Margin
|
66.7 %
|
64.7 %
|
67.2 %
|
64.2 %
|
Free Cash Flow and Free Cash Flow Margin
Free
Cash Flow is defined as cash provided by (used in) operating
activities less net additions to property and equipment. Free Cash
Flow Margin is calculated as Free Cash Flow expressed as a
percentage of total revenue. For an explanation of management's use
of Free Cash Flow and Free Cash Flow Margin see "Non-IFRS
and Other Financial Measures" section in the Company's
MD&A for the three and nine months ended October 31, 2023.
The following table reconciles our cash flow from (used in)
operating activities to Free Cash Flow, and discloses Free Cash
Flow Margin, for the periods indicated:
(in thousands of
U.S. dollars, except for percentages)
|
Three months ended
October 31
|
Nine months ended
October 31
|
2023
|
2022
|
2023
|
2022
|
Cash flow from
operating activities
|
15,318
|
8,131
|
21,171
|
9,058
|
Net addition to
property and equipment
|
(1,074)
|
(792)
|
(5,162)
|
(1,905)
|
Free Cash
Flow
|
14,244
|
7,339
|
16,009
|
7,153
|
Free Cash Flow
Margin
|
30.9 %
|
17.2 %
|
11.9 %
|
5.7 %
|
Constant Currency Revenue
Constant Currency
Revenue is defined as foreign-currency-denominated revenues
translated at the historical exchange rates from the comparable
prior period into our U.S. dollar functional currency. For an
explanation of management's use of Constant Currency Revenue see
"Non-IFRS and Other Financial Measures" section in the
Company's MD&A for the three and nine months ended October 31, 2023.
The following table reconciles our Constant Currency Revenue to
revenue, for the periods indicated:
|
Three months ended
October 31
|
Nine months ended
October 31
|
(in thousands of
U.S. dollars)
|
2023
|
2022
|
2023
|
2022
|
$
|
$
|
$
|
$
|
Total revenue for the
period
|
46,113
|
42,668
|
134,811
|
125,712
|
Impact of foreign
exchange rate changes over the prior period
|
(15)
|
—
|
1,600
|
—
|
Constant Currency
Revenue
|
46,098
|
42,668
|
136,411
|
125,712
|
Key Performance Indicators
Management uses a number of metrics, including the key
performance indicators identified below, to help us evaluate our
business, measure our performance, identify trends affecting our
business, formulate business plans and make strategic decisions.
Our key performance indicators may be calculated in a manner
different than similar key performance indicators used by other
issuers. These metrics are estimated operating metrics and not
projections, nor actual financial results, and are not indicative
of current or future performance.
- Annual Recurring Revenue and Constant Currency Annual
Recurring Revenue: We define Annual Recurring Revenue as
the annualized equivalent value of subscription revenue from all
existing customer contracts as at the date being measured,
exclusive of the implementation period. Our calculation of Annual
Recurring Revenue assumes that customers will renew their
contractual commitments as those commitments come up for renewal.
We believe Annual Recurring Revenue provides a reasonable,
real-time measure of performance in a subscription-based
environment and provides us with visibility for potential growth to
our cash flows. We believe that increasing Annual Recurring Revenue
indicates the continued strength in the expansion of our business,
and will continue to be our focus on a go-forward basis. We define
Constant Currency Annual Recurring Revenue as
foreign-currency-denominated Annual Recurring Revenue translated at
the historical exchange rates from the comparable prior period into
our U.S. dollar functional currency.
|
As at October
31
|
(in millions
of U.S. dollars, except percentages)
|
2023
|
2022
|
Change
|
$
|
$
|
%
|
Annual Recurring
Revenue
|
180.1
|
160.3
|
12.4 %
|
Constant Currency
Annual Recurring Revenue
|
179.3
|
160.3
|
11.9 %
|
SOURCE D2L Inc.