D2L Inc.

Good morning ladies and gentlemen and thank you for standing by. Welcome to the D2L Inc. fiscal 2024 third quarter results conference call. At this time all participants are in a listen only mode. Following the presentation we will conduct a question and answer session. Instructions will be provided to you at the time for questions. If anyone has any difficulty hearing the conference you may press star zero for operator assistance at any time. Listeners are reminded that portions of today's discussion will include statements that contain forward-looking information. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from a conclusion, forecast, or projection in the forward-looking information. Further, certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information. For identification and discussion of such risks, uncertainties and factors and assumptions, as well as further information concerning forward-looking statements, please refer to the section entitled Forward-looking information. And the risks identified in the company's annual interim MD&A, or most recently filed annual information form, in each case as filed under the company's profile on CEDAR Plus at www.cedarplus.com. In addition, during this call, reference will be made to various non-IFRS financial measures, including constant currency revenue, adjusted EBITDA, adjusted growth profit, adjusted growth margin, and free cash flow. These non-IFRS financial measures do not have any standardised meanings prescribed by IRS and may not be comparable to similar measures presented by other public companies. Please refer to the company's MD&A for the three and nine months ended October 31st, 2023 for more information about these and certain other non-IFRS IFRS financial measures including where applicable a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures from our financial statements. This morning's call is being recorded on December 6th 2023 at 8 30 a.m eastern time And I would now like to turn the call over to Mr. John Baker, Chief Executive Officer of D2L. Please go ahead, sir.

Thank you, operator. And thank you, everyone, for joining our Q3 fiscal 2024 earnings call. We released financial results after the markets closed yesterday, which you can find on the investor relations section of our website at d2l.com. Please note that the results we're discussing today are in U.S. dollars. I'm joined this morning by Stephen Laster, our president, and Josh Huff, our CFO. I'm pleased to report it was a solid third quarter for the company. We made continued progress in three important areas. First, we're executing well on our balanced growth and profitability model, highlighted by accelerating growth in our recurring subscription revenue and improved operating leverage. Second, we continue to win flagship customers in our core markets as leading educational institutions and companies choose D2L to achieve their strategic learning goals. And third, We're winning and building momentum because we continue to make the right investment in our people and our products. Our work is allowing us to solve important challenges for our customers and differentiate from our competitors. And that excitement is extending into the corporate market as we launch D12 for Business, which is our offering to tackle critical upskilling challenges for companies globally. Stephen and Josh will expand on these themes in their remarks this morning. Now, turning our attention to the financial highlights for the quarter. Total revenue was up 8% year over year to $46.1 million, and this was led by 13% growth in our subscription and support revenue. Annual recurring revenue is up year over year by roughly $20 million, or a 12% increase to $180.1 million. Our gross margins increased by 300 basis points for the year to date to 67%, driven by significantly higher subscription margins of 72%. And our adjusted EBITDA of $4.4 million is a meaningful improvement for the nine-month period, an increase of nearly $8 million compared to the same period last year. In short, we're delivering well on our adjusted EBITDA, and we're now increasing our software revenue growth guidance for the year, both of which position us well as we look ahead to next year. I want to thank our people for their effort and commitment to achieving this balance of growth and profitability while staying focused on our mission to truly transform learning globally. I continue to spend considerable time in front of customers and prospects around the globe, and it's clear the work that we're doing has never mattered more. I recently had the pleasure of co-hosting D2L Connection customer events in Colombia and in the United Kingdom. It was inspiring to hear the ideas and the work that's being done across so many great organizations globally. These interactions continue to strengthen my confidence in the overall demand environment and long-term growth outlook for D2L. I would highlight three main takeaways. One, The work that we're doing to support the learning moment and learner engagement with Creator Plus addresses a real critical need to build highly engaging course content and customers are highly supportive of our approach. Two, the work that we're doing on our product roadmap around learning outcomes and competency-based learning in particular is in tight alignment with the thought leaders around the world. And three, there is also great alignment between what we're doing in artificial intelligence and the customer need. We're excited to bring the technologies that we have in development and early access, such as our AI-powered question generation tool, to wide availability later this year. Our focus and strategy of winning key markets globally is starting to build momentum and a real sense of user community where collectively we're tackling some big challenges. As examples, in our largest market, higher education, we're now number one in market share in Singapore, and we're now used by more students and teachers in the Netherlands than any other LMS. And in the United States higher education market, we've grown to be now number two in market share by enrollment, and we're winning about 50% of the time. This success is also showing in our user growth. There are now more than 18 million users on our platform. That's a big jump from 16 million users at the start of this year, as many new customers have gone live in the last two quarters. With that, I'm going to turn the call over now to Steven to provide more color on our go-to-market and investments in innovation. Steven, over to you.

Thanks, John, and good morning. As John mentioned at the outset, we're adding great new customers across our core education and corporate markets. In higher education, our strong competitive win rate continues to support healthy new customer growth. In North America, recent wins included Parker University, a private university in Texas that is a leader in healthcare education, clinical practice, and research. The flexibility of our platform to support multiple modalities was an important consideration as this institution emphasizes multiple delivery formats and learning environments. We're also pleased to be selected by the Royal Canadian Business College, which offers flexible, self-paced learning, and is known for incorporating simulation experiential learning, and modern technology in its course delivery. Internationally, our teams continue to build D2L's presence in key markets. In Brazil, we were recently selected by Unipar, a 50-year-old private university that serves 20,000 students across seven campuses. We're benefiting from an extended presence in India, as evidenced by the recent addition of Golgotha University, This institution serves more than 30,000 students and is highly ranked academically across a range of subjects. We continue to see a great reception to our offering in the region. Turning to our corporate market, we had several significant developments in the quarter as we build the D2L brand and customer base. First, we continue to drive awareness for D2L for business. the all-in-one corporate learning solution we announced in September. We've had early validation through several noteworthy wins. As you may have seen, Walmart Canada became a D2O Wave customer. We're thrilled to support their Live Better You program, which they describe as a complete game changer for their company and their associates. For eligible employees, Walmart Canada will pay 100% of their tuition, books, and fees for programs at top tier schools across Canada, which is all powered by D2L Wave and our growing network of education providers. Walmart wants to ensure associates are trained and equipped with the skills of the future so they stay and grow with the company. This relationship is off to a great start with high employee engagement and participation. And our UK team was excited to welcome the British Council, a 90-year-old organization that plays a leading role in English teaching and assessment globally. Our platform will support them in achieving their strategic priorities, which include delivering a mix of physical and digital presence as they extend their reach globally. On the development side, we're delivering on a robust roadmap of enhancements to existing offerings and broadening our portfolio of products, partners, and services. We're grateful to our team for their focus on our customers and on transforming the learning moment, while at the same time enhancing our productivity and our velocity. I would call out two important areas of investment. We continue to harness the state of the art of artificial intelligence in service of the learning moment. We recently provided early access to D2L's latest generative AI power technology that assists educators with suggested practice questions. And we also introduced an AI driven first line of contextual help and support embedded within the Brightspace virtual assistant. AI technology is evolving rapidly and D2L is moving quickly and thoughtfully to incorporate AI to support students and help faculty build higher quality learning experiences in less time. D2L is pleased to be known for its industry leadership in accessible teaching and learning. D2L has invented ways to make it possible for learners that are blind, deaf, or with other disabilities to participate equally with everyone else in the class. And that same work is making the learning experience better for everyone. The day the W3C released their latest accessibility standard, D2L was released our report showing 100% conformance with the new success criteria, making us the first company in the leading LMS providers category to achieve this. We continue to reinforce our leadership in this area with new tools and solutions to support customers in providing inclusive education. In summary, I'm pleased with the progress and execution across the company. We're helping more and more organizations reshape the future of education and work. We're also building a stronger and more profitable business. I will now turn the call over to Josh for an expanded discussion on the financials. Josh?