D2L Inc.

Hello everyone. Thank you for joining us and welcome to D2L Inc. Second Quarter 2027 Financial Results Digital Conferencing Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Craig Armitage, Investor Relations. Craig, please go ahead.

Good morning. Thank you. Listeners are reminded that portions of today's discussion will include statements to contain forelooking 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 forelooking information. Further, certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forelooking information. For identification and discussion of such risks, uncertainties, factors, and assumptions, as well as further information concerning forward-looking statements, please refer to the company's annual and interim management discussion and analysis and the most recently filed annual information form, in each case is filed under the company's profile on CR+. In addition, during the call, reference will be made to various non-IFRS financial measures, Thank you for joining us. including where applicable, a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures from our financial statements. I'd now like to turn the call over to Mr. John Baker, Chief Executive Officer of D2L. Please go ahead, John.

Thank you, Craig, and good morning, everyone. Thank you for joining us for our second quarter fiscal 2027 earnings call. We released our financial results after market closed yesterday. and you can find those materials in the investor relations section of our website. Please note that all amounts discussed today are in US dollars unless otherwise stated. I'm pleased to be joined this morning by Josh Huff, our CFO. Our second quarter results reflect both strong bookings quarter and the anticipated impact of the previously disclosed US K-12 customer churn. While this affected our headline growth metrics for Q2, the underlying performance of our core business remains solid. and with this headwind now behind us, we expect improved revenue growth and profitability as we move through the second half of fiscal 2027. For the second quarter, subscription and support revenue increased 2% to $50.9 million. Annual recurring revenue, or ARR, increased 5% to $223.4 million. Adjusted EBITDA was $6.5 million. and we repurchased approximately 2 million subordinate voting shares during this quarter, all maintaining a strong balance sheet with $106.4 million of cash and no debt. As you will see in our Q2 disclosure, we've adjusted revenue guidance for the full year based upon softness in our advisory services and the delayed launch of a new customer. Josh will get into this in more detail shortly. Importantly, excluding the K-12 market, ARR grew more than 10% year over year, our fourth consecutive quarter of double-digit ARR growth across our core higher education and corporate markets, which account for more than 90% of our revenue. This performance reflects healthy bookings, strong competitive win rates, and our success in expanding customer relationships through the broader G12 platform. In our largest market, higher education, Our competitive position continues to strengthen. We continue to displace each of our major competitors as institutions globally look to modernize their learning environments and prepare for the future of learning. In North America higher education, our new customers in the quarter included the School of Professional Studies at Brown University, a member of the Ivy League, as well as Golden Gate University and Southwestern Michigan College. These wins reinforced the importance of our platform and product roadmap among institutions as they make big, long-term decisions about their learning technology. Internationally, our momentum continues to build in key markets. During the quarter, we added customers including the Continuing Professional Development Unit at the University of Leeds in the United Kingdom, Van Lang University in Vietnam, and the IESB in Brazil. And subsequent to quarter end, UNSW Sydney selected D2L Brightspace as its next generation learning platform. UNSW is one of the top 20 ranked universities globally. This is a flagship win for D2L as we start Q3. We see a significant long-term opportunity internationally as institutions around the world modernize their learning platforms. Before moving on, I'd like to briefly touch on the K-12 project. This has been a challenging last 12 months with the U.S. K-12 market where we've experienced significantly more churn than normal. We don't take that lightly, and we're committed to delivering better results moving forward. Beginning in Q3 of this fiscal year, we expect the retention and growth trends to continue to normalize in K-12, and we're pleased to report that our remaining K-12 customer portfolio is strong. Engagement remains healthy, and we're seeing encouraging new opportunities and new logos emerge. Beyond education, we further expanded our presence in the corporate market. New customers this quarter included the American Society of Safety Professionals, the Royal College of Anesthetists in the United Kingdom, and the Public Service Alliance of Canada, one of Canada's largest unions representing close to 250,000 workers. These wins highlight our ability to support workforce development, professional education, and member learning at scale. New customer acquisition remains an important growth driver and we're also creating value through the expansion of the D12 platform with our existing customer base. Creator Plus continues to gain traction as customers look to create more engaging, interactive and accessible learning experiences, highlighted by an adoption rate of more than 35% among existing customers. We're also seeing increasing momentum for our AI offering, D12 Looney. During the quarter, D12 Looney surpassed 5 million of ARR and is attached on greater than 40% of new customer deployments and we're working hard to broaden adoption with existing customers as well. This demonstrates that AI is contributing to both sides of our growth strategy. It's strengthening the value proposition for new customers while creating additional opportunity to expand relationships with existing customers. We also see evidence that educators are moving beyond the initial exploration and discussions about AI to now focusing on practical implementations. In research conducted by our team earlier this year, educators consistently emphasized the importance of AI tools that improve learning outcomes, enhance teaching effectiveness, and are deployed in a trusted and responsible manner. We believe this feedback validates our strategy of embedding AI in ways that help educators and learners achieve better outcomes while maintaining strong foundations of trust, privacy, and accessibility. These themes will reinforce at Fusion 2026, our annual customer conference, where we welcome more than 1,100 attendees from all around the world. One of the clearest messages from our customer conversations was that institutions are looking for a practical path forward as AI continues to reshape learning. Customers recognize the potential of AI, but they want to move forward thoughtfully to focus on responsible implementation, protecting institutional and learner data, and ensuring that technology contributes to meaningful learning outcome improvement. More broadly, institutions are looking for a trusted partner that can provide both stability and innovation as they navigate this evolving learning landscape. At Fusion, we introduced new AI-powered innovations and platform enhancements across C12 Brightspace, Lumi, Gator Plus and H5P. These included new capabilities designed to help customers transform existing learning content, to be more engaging and to improve outcomes, translate content into new languages, and provide learners with a looming learner mode for more personalized support and embedded knowledge checks. Overall, we're encouraged by the performance across our core markets, and while our current growth profile has been affected by the previously disclosed U.S. K-12 attrition, we continue to see strengths in bookings, customer expansion, and AI adoptions. We are well positioned to improve revenue growth and profitability through the balance of fiscal 2027 and into fiscal 2028. With that, I'll turn the call over to Josh to review the financial results and to talk about their look in more detail.