- Total revenue in Q2 increased 8% year-over-year to US$44.5 million
- Subscription and support revenue in Q2 increased 10%
year-over-year to US$39.4
million
- Annual Recurring Revenue1 reached US$178.5 million, up 13% over the prior year
- Cash flow from operating activities increased to $5.9 million for the year-to-date period, up from
$0.9 million in the prior year
TORONTO, Sept. 6, 2023 /CNW/ - D2L Inc.
(TSX: DTOL) ("D2L" or the "Company"), a leading global
learning technology company, today announced financial results for
its Fiscal 2024 second quarter ended July
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.
"Our second-quarter results were highlighted by strong growth in
subscription revenue, annual recurring revenue, free cash flow and
gross profit margins, as our team continues to execute well on our
balanced growth plan," said John
Baker, CEO of D2L. "We are winning important new customers
in all our markets, most notably in higher education, where we are
helping more and more institutions digitally transform and build
better learning experiences. At the same time, our current
customers continue to grow with D2L as we enhance and expand our
learning platform to solve their key challenges, from engagement
with students for better progression, to getting students ready for
the future, and upskilling the workforce."
Second Quarter Fiscal 2024 Financial Highlights
- Total revenue of $44.5 million,
up 8% from the same period in the prior year. Constant Currency
Revenue2 grew 9% year-over-year to $44.8 million.
- Subscription and support revenue was $39.4 million, an increase of 10% over the prior
year, reflecting growth from new customers and strong revenue
retention and expansion from existing customers.
- Annual Recurring Revenue1 as at July 31, 2023 increased by 13% year-over-year,
from $158.5 million to $178.5 million, and Constant Currency Annual
Recurring Revenue1 reached $177.9
million, a 12% increase over the prior year.
- Gross profit increased 12% to $29.7
million (66.7% gross profit margin) from $26.6 million (64.6% gross profit margin) in the
same period of the prior year.
- Gross profit margin for subscription and support revenue
increased to 72.5%, from 68.2% in the same period of the prior
year, an improvement of 430 basis points.
- Adjusted EBITDA1 loss of $0.5
million, compared with an Adjusted EBITDA loss of
$1.5 million for the comparative
period in the prior year.
- Loss for the period was $4.8
million, the same as for the comparative period of the prior
year.
- Cash flow from operating activities was $22.9 million, versus $16.2 million in the same period in the prior
year, and Free Cash Flow2 was $20.5 million, compared to Free Cash Flow of
$16.0 million in the same period in
the prior year. Cash flows from operations generally have a
seasonal low in the first quarter each year and a seasonal high in
the second quarter each year.
- Strong balance sheet at quarter end, with cash and cash
equivalents of $110.3 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.
|
Second Quarter Fiscal 2024 Financial Results – Selected Financial
Measures
(in thousands of U.S. dollars, except for
percentages)
|
Three months ended
July 31
|
Six months ended
July 31
|
|
2023
|
2022
|
Change
|
Change
|
2023
|
2022
|
Change
|
Change
|
$
|
$
|
$
|
%
|
$
|
$
|
$
|
%
|
Subscription &
Support Revenue
|
39,405
|
35,817
|
3,588
|
10.0 %
|
78,595
|
71,584
|
7,011
|
9.8 %
|
Professional Services
& Other Revenue
|
5,065
|
5,356
|
(291)
|
-5.4 %
|
10,103
|
11,460
|
(1,357)
|
-11.8 %
|
Total
Revenue
|
44,470
|
41,173
|
3,297
|
8.0 %
|
88,698
|
83,044
|
5,654
|
6.8 %
|
|
|
|
|
|
|
|
|
|
Constant Currency
Revenue1
|
44,788
|
41,173
|
3,615
|
8.8 %
|
90,313
|
83,044
|
7,269
|
8.8 %
|
Gross Profit
|
29,681
|
26,585
|
3,096
|
11.6 %
|
59,561
|
52,939
|
6,622
|
12.5 %
|
Adjusted Gross Profit
1
|
29,853
|
26,671
|
3,182
|
11.9 %
|
59,844
|
53,095
|
6,749
|
12.7 %
|
Adjusted Gross
Margin1
|
67.1 %
|
64.8 %
|
|
2.3 %
|
67.5 %
|
63.9 %
|
|
3.6 %
|
Loss for the
period
|
(4,828)
|
(4,803)
|
(25)
|
-0.5 %
|
(3,718)
|
(9,566)
|
5,848
|
61.1 %
|
Adjusted EBITDA
(Loss)1
|
(534)
|
(1,465)
|
931
|
63.5 %
|
2,277
|
(2,969)
|
5,246
|
176.7 %
|
Cash Flows From
Operating Activities
|
22,888
|
16,225
|
6,663
|
41.1 %
|
5,853
|
927
|
4,926
|
531.4 %
|
Free Cash
Flow1
|
20,449
|
16,016
|
4,433
|
27.7 %
|
1,765
|
(186)
|
1,951
|
1,048.9 %
|
|
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 the
University of Southern California, the
City University of New York (CUNY),
Western University, the Northern
Alberta Institute of Technology, Hartford
Community College, and Niagara College.
- Signed new education customers across multiple international
regions, including Faith Lutheran College Plainland, Mangalayatan
University, and Hogeschool van Arnhem en Nijmegen (HAN University of Applied Sciences).
- Signed new corporate customers in multiple sectors, including
Plante & Moran LLC and iPEC Coaching.
- In Q2, D2L launched a redesign of its Brightspace Community
platform, announced a new partnership with Copyleaks to help better
detect plagiarism, and unveiled its Integration Hub, D2L LINK, a
one-stop shop for access to hundreds of D2L Brightspace-integrated
technologies and resources.
- In June, D2L announced a deepening of its focus on India with additional investments in
development, support operations, hiring talent, and expanded
in-country cloud solutions.
- In July, D2L hosted nearly 2,000 global registrants at its
annual customer conference (Fusion) where it showcased key tools
for the future of learning in areas like artificial intelligence,
accessibility, ease of use, and skills development.
Financial Outlook
Financial Guidance Fiscal 2024
The Company is maintaining its previous financial guidance for
the fiscal year ended January 31,
2024 as follows:
- Subscription and support revenue in the range of $159 million to $161
million, implying growth of 9% to 10% over Fiscal 2023;
- Total revenue in the range of $180
million to $182 million,
implying growth of 7% to 8% over Fiscal 2023; and
- Adjusted EBITDA in the range of $6
million to $8 million.
Conference Call & Webcast
D2L management will host a conference call on Thursday, September 7, 2023 at 8:30 am ET to discuss its second quarter Fiscal
2024 financial results.
Date:
|
|
Thursday, September 7,
2023
|
Time:
|
|
8:30 am (ET)
|
Dial in
number:
|
|
Canada/US: 1 (833)
470-1428
International: 1 (404)
975-4839
Access code:
816124
|
|
|
|
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:
240783)
Available until
September 14, 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
markets in which the Company operates and investment in
India; 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; and the Company's ability to retain key personnel,
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, including at "Summary of Factors
Affecting Our Performance" of the Company's Management's
Discussion and Analysis ("MD&A") for the three and six
months ended July 31, 2023, or in the
"Risk Factors" section of the Company's most recently filed
Annual Information Form. 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 July 31, 2023 and
January 31, 2023
(Unaudited)
|
July 31,
2023
|
January 31,
2023
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
110,271,362
|
$
110,732,236
|
|
Trade and other
receivables
|
29,358,472
|
20,894,794
|
|
Uninvoiced
revenue
|
2,789,904
|
2,107,015
|
|
Prepaid
expenses
|
6,655,026
|
8,183,390
|
|
Deferred
commissions
|
5,097,379
|
4,487,043
|
|
|
154,172,143
|
146,404,478
|
|
|
|
|
Non-current
assets:
|
|
|
|
Other
receivables
|
—
|
193,036
|
|
Prepaid
expenses
|
210,675
|
122,469
|
|
Deferred income
taxes
|
306,079
|
189,178
|
|
Right-of-use
assets
|
10,847,680
|
11,205,371
|
|
Property and
equipment
|
7,764,280
|
4,287,095
|
|
Deferred
commissions
|
7,781,294
|
6,849,779
|
|
Intangible
assets
|
839,331
|
288,099
|
|
Goodwill
|
10,451,860
|
7,070,432
|
|
|
|
Total assets
|
$
192,373,342
|
$
176,609,937
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
20,846,926
|
$
23,450,767
|
|
Deferred
revenue
|
101,207,945
|
85,662,830
|
|
Lease
liabilities
|
1,513,461
|
1,127,600
|
|
|
123,568,332
|
110,241,197
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
Deferred income
taxes
|
446,876
|
398,906
|
|
Accounts payable and
accrued liabilities
|
302,333
|
-
|
|
Lease
liabilities
|
11,865,574
|
11,878,556
|
|
|
12,614,783
|
12,277,462
|
|
|
136,183,115
|
122,518,659
|
Shareholders'
equity:
|
|
|
|
Share
capital
|
361,304,174
|
357,639,824
|
|
Additional paid-in
capital
|
47,700,966
|
46,084,161
|
|
Accumulated other
comprehensive loss
|
(4,466,506)
|
(5,001,805)
|
|
Deficit
|
(348,348,407)
|
(344,630,902)
|
|
56,190,227
|
54,091,278
|
|
Related party
transactions
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
192,373,342
|
$
176,609,937
|
D2L Inc.
Condensed Consolidated Interim Statements of
Comprehensive Income (Loss)
(In U.S.
dollars)
For the three and six months ended July
31, 2023 and 2022
(Unaudited)
|
Three months ended July
31
|
Six months ended July
31
|
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Subscription and
support
|
$ 39,405,679
|
$
35,817,285
|
$ 78,595,340
|
$
71,583,788
|
|
Professional services
and other
|
5,064,462
|
5,356,142
|
10,102,740
|
11,459,723
|
|
|
44,470,141
|
41,173,427
|
88,698,080
|
83,043,511
|
Cost of
revenue:
|
|
|
|
|
|
Subscription and
support
|
10,852,459
|
11,403,524
|
22,093,199
|
22,842,152
|
|
Professional services
and other
|
3,936,514
|
3,184,484
|
7,043,818
|
7,262,849
|
|
|
14,788,973
|
14,588,008
|
29,137,017
|
30,105,001
|
|
|
|
|
|
|
Gross profit
|
29,681,168
|
26,585,419
|
59,561,063
|
52,938,510
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Sales and
marketing
|
14,961,079
|
14,021,773
|
27,401,746
|
27,078,863
|
|
Research and
development
|
12,519,168
|
10,450,798
|
23,664,521
|
21,735,965
|
|
General and
administrative
|
7,312,207
|
6,578,462
|
13,501,710
|
12,985,502
|
|
|
34,792,454
|
31,051,033
|
64,567,977
|
61,800,330
|
|
|
|
|
|
|
Loss from
operations
|
(5,111,286)
|
(4,465,614)
|
(5,006,914)
|
(8,861,820)
|
|
|
|
|
|
|
Interest and other
income (expenses):
|
|
|
|
|
|
Interest
expense
|
(142,866)
|
(166,257)
|
(298,874)
|
(403,857)
|
|
Interest
income
|
840,405
|
156,835
|
1,716,512
|
175,081
|
|
Other income
(expense)
|
(211)
|
-
|
15,252
|
-
|
|
Foreign exchange gain
(loss)
|
(364,693)
|
(150,140)
|
65,479
|
(178,358)
|
|
|
332,635
|
(159,562)
|
1,498,369
|
(407,134)
|
|
|
|
|
|
|
Loss before income
taxes
|
(4,778,651)
|
(4,625,176)
|
(3,508,545)
|
(9,268,954)
|
|
|
|
|
|
|
Income taxes
(recovery):
|
|
|
|
|
|
Current
|
316,769
|
165,580
|
391,411
|
355,096
|
|
Deferred
|
(267,464)
|
12,616
|
(182,451)
|
(58,015)
|
|
|
49,305
|
178,196
|
208,960
|
297,081
|
|
|
|
|
|
|
Loss for the
period
|
(4,827,956)
|
(4,803,372)
|
(3,717,505)
|
(9,566,035)
|
|
|
|
|
|
|
Other comprehensive
gain (loss):
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
746,510
|
(146,590)
|
535,299
|
(200,255)
|
Comprehensive
loss
|
$
(4,081,446)
|
$
(4,949,962)
|
$
(3,182,206)
|
$
(9,766,290)
|
|
|
|
|
|
|
Loss per share –
basic
|
$
(0.09)
|
$
(0.09)
|
$
(0.07)
|
$
(0.18)
|
Loss per share –
diluted
|
(0.09)
|
(0.09)
|
(0.07)
|
(0.18)
|
|
|
|
|
|
Weighted average number
of common shares – basic
|
53,430,984
|
53,004,320
|
53,328,052
|
52,996,253
|
Weighted average number
of common shares – diluted
|
53,430,984
|
53,004,320
|
53,328,052
|
52,996,253
|
D2L Inc.
Condensed Consolidated Interim Statements of
Shareholders' Equity
(In U.S. dollars)
For the six months ended July 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
|
301,494
|
2,702,550
|
(1,146,774)
|
—
|
—
|
1,555,776
|
Issuance of Subordinate
Voting
Shares on settlement of
restricted share units
|
209,695
|
961,800
|
(2,405,427)
|
—
|
—
|
(1,443,627)
|
Stock-based
compensation
|
—
|
—
|
5,169,006
|
—
|
—
|
5,169,006
|
Other comprehensive
gain (loss)
|
—
|
—
|
—
|
535,299
|
—
|
535,299
|
Loss for the
period
|
—
|
—
|
—
|
—
|
(3,717,505)
|
(3,717,505)
|
Balance, July 31,
2023
|
53,657,719
|
$
361,304,174
|
$
47,700,966
|
$
(4,466,506)
|
$
(348,348,407)
|
$
56,190,227
|
|
|
|
|
|
|
|
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
|
—
|
—
|
3,643,871
|
—
|
—
|
3,643,871
|
Other comprehensive
loss
|
—
|
—
|
—
|
(200,255)
|
—
|
(200,255)
|
Loss for the
period
|
—
|
—
|
—
|
—
|
(9,566,035)
|
(9,566,035)
|
Balance, July 31,
2022
|
53,032,726
|
$
355,272,944
|
$
44,961,975
|
$
(3,530,963)
|
$
(335,820,212)
|
$
60,883,744
|
D2L Inc.
Condensed Consolidated Interim Statements of
Cash Flows
(In U.S. dollars)
For the six months ended July 31,
2023 and 2022
(Unaudited)
|
|
|
2023
|
2022
|
Operating
activities:
|
|
|
|
Loss for the
period
|
$
(3,717,505)
|
$
(9,566,035)
|
|
Items not involving
cash:
|
|
|
|
|
Depreciation of
property and equipment
|
721,635
|
938,887
|
|
|
Depreciation of
right-of-use assets
|
643,910
|
1,101,355
|
|
|
Amortization of
intangible assets
|
32,572
|
208,472
|
|
|
Gain on disposal of
property and equipment
|
(15,670)
|
—
|
|
|
Stock-based
compensation
|
5,169,006
|
3,643,871
|
|
|
Net interest expense
(income)
|
(1,417,638)
|
228,776
|
|
|
Income tax
expense
|
208,960
|
297,081
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Trade and other
receivables
|
(7,434,422)
|
(6,472,931)
|
|
|
Uninvoiced
revenue
|
(615,095)
|
(115,215)
|
|
|
Prepaid
expenses
|
1,573,388
|
505,606
|
|
|
Deferred
commissions
|
(1,331,109)
|
(266,499)
|
|
|
Accounts payable and
accrued liabilities
|
(4,182,827)
|
(4,129,872)
|
|
|
Deferred
revenue
|
14,936,043
|
14,467,740
|
|
|
Right-of-use assets and
lease liabilities
|
-
|
133,336
|
|
Interest
received
|
1,717,429
|
175,081
|
|
Interest
paid
|
-
|
(75,052)
|
|
Income taxes
paid
|
(435,663)
|
(147,493)
|
|
Cash flows from
operating activities
|
5,853,014
|
927,108
|
Financing
activities:
|
|
|
|
Payment of lease
liabilities
|
(262,024)
|
(1,113,960)
|
|
Proceeds from exercise
of stock options
|
1,555,776
|
626,268
|
|
Taxes paid on
settlement of restricted share units
|
(1,443,627)
|
—
|
|
Cash flows used in
financing activities
|
(149,875)
|
(487,692)
|
Investing
activities:
|
|
|
|
Purchase of property
and equipment
|
(4,103,826)
|
(1,113,301)
|
|
Proceeds from disposal
of property and equipment
|
15,670
|
—
|
|
Acquisition of
business, net of cash acquired
|
(2,766,284)
|
—
|
|
Cash flows used in
investing activities
|
(6,854,440)
|
(1,113,301)
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
690,427
|
(516,540)
|
Decrease in cash and
cash equivalents
|
(460,874)
|
(1,190,425)
|
Cash and cash
equivalents, beginning of period
|
110,732,236
|
114,675,495
|
Cash and cash
equivalents, end of period
|
110,271,362
|
113,485,070
|
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.
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
July 31
|
Six months ended
July 31
|
2023
|
2022
|
2023
|
2022
|
Loss for the
period
|
(4,828)
|
(4,803)
|
(3,718)
|
(9,566)
|
Stock-based
compensation
|
3,095
|
1,994
|
5,169
|
3,644
|
Foreign exchange loss
(gain)
|
365
|
150
|
(65)
|
178
|
Non-recurring
expenses
|
150
|
—
|
150
|
—
|
Acquisition-related
costs
|
552
|
—
|
552
|
—
|
Interest expense net of
interest income
|
(698)
|
9
|
(1,418)
|
229
|
Income tax
expense
|
49
|
178
|
209
|
297
|
Depreciation and
amortization
|
781
|
1,007
|
1,398
|
2,249
|
Adjusted
EBITDA
|
(534)
|
(1,465)
|
2,277
|
(2,969)
|
Adjusted EBITDA
Margin
|
-1.2 %
|
-3.6 %
|
2.6 %
|
-3.6 %
|
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.
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
July 31
|
Six months ended
July 31
|
2023
|
2022
|
2023
|
2022
|
Gross profit for the
period
|
29,681
|
26,585
|
59,561
|
52,939
|
Stock based
compensation
|
172
|
86
|
283
|
156
|
Adjusted Gross
Profit
|
29,853
|
26,671
|
59,844
|
53,095
|
Adjusted Gross
Margin
|
67.1 %
|
64.8 %
|
67.5 %
|
63.9 %
|
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.
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
July 31
|
Six months ended
July 31
|
2023
|
2022
|
2023
|
2022
|
Cash flow from
operating activities
|
22,888
|
16,225
|
5,853
|
927
|
Net purchase of
property and equipment
|
(2,439)
|
(209)
|
(4,088)
|
(1,113)
|
Free Cash
Flow
|
20,449
|
16,016
|
1,765
|
(186)
|
Free Cash Flow
Margin
|
46.0 %
|
38.9 %
|
2.0 %
|
-0.2 %
|
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.
The following table reconciles our Constant Currency Revenue to
revenue, for the periods indicated:
|
Three months ended
July 31
|
Six months ended
July 31
|
(in thousands of
U.S. dollars, except for percentages)
|
2023
|
2022
|
2023
|
2022
|
$
|
$
|
$
|
$
|
Total revenue for the
period
|
44,470
|
41,173
|
88,698
|
83,044
|
Impact of foreign
exchange rate changes over the prior period
|
318
|
—
|
1,615
|
—
|
Constant Currency
Revenue
|
44,788
|
41,173
|
90,313
|
83,044
|
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 July
31
|
(in millions
of U.S. dollars, except percentages)
|
2023
|
2022
|
Change
|
$
|
$
|
%
|
Annual Recurring
Revenue
|
178.5
|
158.5
|
12.6 %
|
Constant Currency
Annual Recurring Revenue
|
177.9
|
158.5
|
12.2 %
|
SOURCE D2L Inc.