D2L (DTOL) AI Stock Analysis

D2L

(TSX:DTOL)

Select Model

Rating:65Neutral

Price Target:CAD 12.00▲(11.52% Upside)

Action:reiterated

Date:09/15/26

The score is driven primarily by improved financial stability and strong cash generation, supported by a generally constructive earnings-call outlook for better second-half margins. These positives are tempered by slowing/recently negative revenue momentum and compressed profitability, plus a demanding valuation (very high P/E). Technical indicators are neutral-to-mildly positive and do not materially change the view.

Positive Factors

Core-market ARR growthDouble-digit ARR growth across higher education and corporate customers indicates durable demand in D2L’s largest markets. Because these segments represent more than 90% of revenue, continued expansion there can offset isolated weakness and support recurring revenue growth over coming quarters.

Negative Factors

Slowing revenue growthLowered guidance signals that near-term growth is progressing more slowly than management previously expected. A 5%-6% outlook leaves less operating leverage and makes the company more dependent on successful conversions, deployment timing, and renewed demand to reach its longer-term growth targets.

D2L (DTOL) vs. iShares MSCI Canada ETF (EWC)

Market Cap: CAD 565.00M
Dividend Yield: ―
Average Volume (3M): 32.52K
Price to Earnings (P/E): 266.5
Beta (1Y): 1.43
Revenue Growth: 2.69%
EPS Growth: -95.11%
Country: Canada
Employees: 1,000
Sector: Technology
Sector Strength: 61
Industry: Software - Application

D2L Business Overview & Revenue Model

Company Description

D2L Inc. provides cloud-based learning software for higher education institutions, kindergarten to grade 12 schools and districts, and private sector enterprises in Canada, the United States, and internationally. The company provides personalized, fl...

How the Company Makes Money

D2L primarily makes money by selling access to its Brightspace learning platform on a subscription (software-as-a-service) basis. Customers (school districts, colleges/universities, and enterprises) pay recurring fees—typically tied to contract terms...

D2L Earnings Call Summary

Earnings Call Date:Sep 08, 2026(Q2-2027)|% Change Since:2.67%|Next Earnings Date:Dec 08, 2026

Earnings Call SentimentPositive

The call was predominantly positive: core higher education and corporate markets delivered more than 10% ARR growth, bookings and win rates were healthy, international expansion and AI adoption were progressing, cash generation was strong, and the company maintained EBITDA guidance. These positives were partly offset by U.S. K-12 churn, a delayed large deployment, softer advisory services demand, foreign exchange pressure, lower revenue guidance, and a quarterly net loss. Management expressed confidence that the principal K-12 headwind is behind the company and that growth and profitability will improve in the second half of fiscal 2027.

Positive Updates

Core Revenue and ARR Growth

Second-quarter subscription and support revenue increased 2% to $50.9 million, while annual recurring revenue increased 5% to $223.4 million, or 6% in constant currency.

Negative Updates

U.S. K-12 Customer Churn

Higher-than-normal U.S. K-12 customer churn affected Q2 headline growth metrics and represented the final major tranche of churn over the past 12 months. Management said Q2 contained the largest batch and that the churn began affecting revenue recognition over the past three quarters.

Company Guidance

For fiscal 2027, D2L now expects subscription and support revenue of $211 million-$213 million, representing growth of 6%-7% over fiscal 2026, and total revenue of $228 million-$231 million, representing total growth of 5%-6% over fiscal 2026; adjusted EBITDA guidance remains $33 million-$35 million, representing an adjusted EBITDA margin of approximately 15% at the midpoint. The midpoint of updated guidance implies approximately 7% subscription and support revenue growth and a 16% adjusted EBITDA margin in the second half of the year, with higher revenue growth, expanding gross margins, and meaningful adjusted EBITDA margin expansion. Beginning in Q3, D2L expects K-12 retention and growth trends to continue to normalize, while international remains a 15% growth business. For fiscal 2028, the target operating model remains revenue growth of 10%-15% and an adjusted EBITDA margin of 18%-20%.

D2L Financial Statement Overview

Summary

Financials show a solid turnaround with strong, improving operating and free cash flow and consistently high gross margins. Offsetting factors are a recent TTM revenue decline and notable compression in net margin and ROE versus prior fiscal years, which raises questions about earnings durability.

Income Statement

63Positive

Balance Sheet

74Positive

Cash Flow

82Very Positive

Financial statement breakdown
Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2022
Income Statement
Total Revenue	222.59M	221.76M	205.28M	182.38M	151.88M	168.40M
Gross Profit	151.67M	151.87M	139.96M	122.20M	87.95M	107.77M
EBITDA	19.76M	19.04M	14.57M	295.44K	-94.02M	-12.98M
Net Income	1.65M	9.14M	25.72M	-3.54M	-97.65M	-18.38M
Balance Sheet
Total Assets	227.21M	249.82M	232.92M	197.12M	179.21M	176.61M
Cash, Cash Equivalents and Short-Term Investments	106.40M	118.21M	99.18M	116.94M	114.68M	110.73M
Total Debt	10.75M	11.66M	11.18M	12.71M	1.89M	13.01M
Total Liabilities	157.78M	165.55M	148.18M	140.24M	112.83M	122.52M
Stockholders Equity	69.44M	84.27M	84.75M	56.88M	66.38M	54.09M
Cash Flow
Free Cash Flow	46.77M	43.01M	26.98M	9.93M	-683.71K	107.00K
Operating Cash Flow	47.83M	43.80M	27.90M	15.66M	112.25K	3.78M
Investing Cash Flow	-7.89M	-6.19M	-34.33M	-8.52M	-10.22M	-3.67M
Financing Cash Flow	-32.83M	-19.46M	-8.57M	-748.72K	79.08M	-1.63M

D2L Technical Analysis

Technical Analysis SentimentNeutral

Last Price10.76

Price Trends

50DMA10.38Positive

100DMA10.13Positive

200DMA9.88Positive

Market Momentum

MACD0.22Positive

RSI50.31Neutral

STOCH45.17Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DTOL, the sentiment is Neutral. The current price of 10.76 is below the 20-day moving average (MA) of 10.87, above the 50-day MA of 10.38, and above the 200-day MA of 9.88, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 50.31 is Neutral, neither overbought nor oversold. The STOCH value of 45.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:DTOL.

D2L Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

TSE:DTOL against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSE:DCBO	69Neutral	CAD 1.04B	24.87	113.64%	―	11.23%	65.79%
TSE:DTOL	65Neutral	CAD 565.34M	266.46	2.01%	―	2.69%	-95.11%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TSE:THNC	58Neutral	CAD 142.23M	-113.54	-2.12%	―	4.37%	-237.23%
TSE:GEC	41Neutral	CAD 19.24M	0.76	50.83%	―	―	―

* Technology Sector Average

Performance Comparison

TSE:DTOL and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TSE:DTOL	D2L, Inc.	10.76	-6.16	-36.41%
TSE:GEC	Global Education Communities Corp	0.28	-0.10	-27.27%
TSE:DCBO	Docebo, Inc.	41.56	5.64	15.70%
TSE:THNC	Thinkific Labs, Inc.	2.11	-0.25	-10.59%
TSE:WPR	General Assembly Holdings Ltd Class A	0.04	-0.20	-83.33%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Sep 15, 2026

D2L AI Stock Analysis