D2L Inc.

Good morning and thank you all for attending the D2L Inc Q3 2026 financial results. My name is Rika and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star and the number one on your telephone keypad. This morning's call is being recorded on December 11, 2025, at 9 a.m. Eastern Time. I would now like to pass the conference over to your host, Craig Armitage. Investor Relations, thank you. You may proceed, Craig.

Good morning. 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, factors and assumptions, as well as further information concerning forward-looking information, please refer to the company's annual and interim management discussion and analysis and the most recently filed annual information form, in each case as filed under the company's profile on CEDARplus at www.cedarplus.com. In addition, during this call, reference will be made to various non-IFRS financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted gross margin, and agreed cash flow. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other public companies. Please refer to the company's MD&A for three and nine months ended October 31st, 2025 and 2024 for more information about these and certain other non-IFRS financial measures, including where applicable, reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures from our financial statements. With that, I'd now like to turn the call over to John Baker, Chief Executive Officer of D2L. Please go ahead, John.

Thank you, Craig, and thank you, everyone, for joining us for our Q3 earnings call. We released the financial results after 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. We're joined this morning by Josh Huff, our CFO, and we look forward to taking you through the results today and addressing any questions. Q3 was more challenging than anticipated with growth rates reflecting both lower services revenue and higher churn in our U.S. K-12 market. That said, we're making good progress across our key growth pillars, including higher education, corporate, and international, and seeing strong indicators that reinforce our confidence heading into Q4 and for the year ahead. Quickly, looking at a few key financial highlights for Q3, subscription and support revenue rose 6% to $49.4 million. Annual recurring revenue grew 6% over last year's Q3 to $213.4 million. And adjusted EBITDA was $7.9 million, with adjusted EBITDA margin at approximately 15%. For the year to date, SAS revenue was up 10%, and adjusted EBITDA increased 33%, with a margin of 15%. And we're on track to land within our guidance for the full year on these two measures. It was also another solid quarter for ARR bookings from our two growth markets, higher education and corporate. We generated ARR of 10% year over year in these two markets in an environment where U.S. higher education activities remain subdued for the last year. Looking forward, pipeline generation has been better than forecast for multiple consecutive quarters and remains healthy. In North America higher education, we're seeing a gradual improvement in market conditions with early signs of increased activity as institutions redirect attention to investments that improve outcomes. find new pathways for growth, and strengthen student retention and experiences. Our competitive position has never been stronger, and we continue to win more than 50% of the time. In Q3, these new customers included the University of Central Arkansas, which selected Brightspace to replace its legacy system and transform the learning experience for more than 10,000 learners, St. Ambrose University, a leading private institution in Iowa with a strong focus on personalized learning, and Oregon Health and Science University, a premier academic health center, chose Brightspace to power the learning for the next generation of health professionals. In the K-12 market, we've experienced higher churn from U.S. customers this year, largely from their internal leadership changes and a reversion to more traditional models of education in that region. Globally, we're seeing healthy K-12 client adoption metrics as many countries, states, provinces and districts look to improve the quality of their educational experience with our learning platform. And for context, K-12 represents roughly 12% of our ARR at the quarter end. And we're intensely focused on continuing to provide great service to some of the largest K-12 school districts in North America and globally. Internationally, our teams continue to perform well and expand D12's footprint across targeted countries. Our year-over-year international ARR growth exceeded 15% in Q3. And we're seeing similarly strong pipeline trends. Among the new customers this past quarter, we welcomed the University of West Scotland, one of Scotland's largest modern universities, serving approximately 20,000 students. And also in Europe, we added a leading global banking institute, which is advancing skills and standards for thousands of banking professionals. We continue to expand our reach in corporate learning globally. In Q3, new customers included the Florida Center for Nursing, a large statewide center dedicated to strengthening the nursing workforce and supporting health care education initiatives, the Professional Association for Dentists in New Zealand, and one of the largest nursing unions and professional bodies, were converting to Brightspace to power the professional development for its extensive membership. We're also expanding employee training underneath our SVP, Kevin Capitani, who joined D2L this fall, and has quickly made a positive impact both within our go-to-market and product roadmap. Kevin brings 30 years of leadership in technology and learning, including 20 years at SAP, and most recently as president of Pearson North America. I've recently been on a number of global trade missions, and it's clear that employee training and upskilling are big areas of focus for leaders in business and governments. I see this as a significant growth pillar for D2L in the future. Platform expansion and upsell is another growth pillar for the company, and I'm pleased to report that we're seeing a healthy pipeline generation for new products, including our AI offering, Lumi. Now, five quarters into our launch, we have more than 2 million in ARR from Lumi, and our pipeline for the product is growing significantly. AI remains front and center for our engagements both with existing customers and prospects, confirming our view that AI will act as a significant catalyst for a new investment cycle. Our investments into our product are growing, customer adoption and expanding use cases that demonstrate improved learning experiences and outcomes. D2L is well positioned to help our clients lead the transformation of learning. And with that, I'll turn the call over to Josh.