D2L Inc Q3 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Doug Taylor - Canaccord Genuity Corp - Analyst : Yeah, thank you. Good morning. I just want to dig into the churn you're seeing in the K to 12 market. Some rough math here, if it's 11% of your ARR suggests, the churn's pretty substantial, and so I just want to, I want to understand, a little bit what's happening there with respect to, those organizations. Is it. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 11, 2025 / 2:00PM, DTOL.TO - Q3 2026 D2L Inc Earnings Call Them reducing the number of of students covered where I don't think there's some competitive displacement, but maybe you could just flush that out for us a little bit in terms of of what's happening in the remaining exposure.

Question: Doug Taylor - Canaccord Genuity Corp - Analyst : So I just maybe to put that another way given the budgetary environment they're moving to a less feature rich LMS platform if they have one or and then maybe in the competitive situations that you described where they're moving to another platform is that based purely on on pricing?

Question: Doug Taylor - Canaccord Genuity Corp - Analyst : It's an interesting new leadership approach. We've gotten now your updated guidance for this year reflecting some of the puts and the takes that you've mentioned and you know we've still got this medium term guidance that's I guess about two years out now and I know we'll get guidance for next year in a couple months but I just you know maybe I could get you to qualitatively at least talk about how we should map the impacts we're seeing here as it relates to the top-line, puts and takes and also professional services to the extent you can. Onto next year's model, I think that would be very helpful.

Question: Doug Taylor - Canaccord Genuity Corp - Analyst : Okay, thank you, I'll pass on.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : Oh hey, good morning. Appreciate the comments on the pipeline and I was hoping to dig a little bit deeper. Curious if you have any stats you can share on the pipeline growth or the build versus budget, which sounds like it's been strong or kind of how the shape of the pipeline is looking in terms of top versus bottom of funnel.

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : Appreciate that. And then just maybe on the employee training market, I did see the addition of a new leader there and you continue to advance your product for those employee training use cases but how should we be thinking about the buildout of the go to market team and fiscal '27 and kind of the timelines to increase deal flow and air our building that segment?

Question: Gavin Fairweather - Cormark Securities Inc - Analyst : It's great to hear faster than I would have thought. And then just quickly on K-12, when you look at the shape of the renewal book kind of coming up, are you thinking that maybe this might be the peak headwind to sequential ARR and we can expect a bit more of a moderated pace of headwinds going forward? How would you characterize that?

Question: Erin Kyle - CIBC World Markets Corp - Analyst : Hi, thanks. Good morning and thanks for taking the questions. I wanted to follow-up with a question on the K12, churn as well. You mentioned competition in the space. And I think we know there's some other large players, that have been in the space for a while, but, some of the larger AI players like Google and OpenAI have been rolling out AI offerings for education in the last couple of weeks and months here. So I'm wondering if you've been seeing any increased competition or any churn tied to customers looking at those options as well.

Question: Erin Kyle - CIBC World Markets Corp - Analyst : Okay, that's helpful context there. And maybe I'll just switch gears to the higher education space. And maybe if you could just give us an update on the competitive landscape in that space, and whether you've noticed any shift in the last several months, following anthologies, chapter 11 filing, any changes to your win rate there, anything you can share on that space in particular?

Question: Erin Kyle - CIBC World Markets Corp - Analyst : Okay, that is helpful. I will pass the line. Thank you.

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Hi, good morning. John, now that you've been selling Lumi for a few quarters, any themes you're seeing with respect to the kinds of clients, institutions that are adopting it, versus the ones where the sales process has been more challenging, and then, any burnings in terms of how to, Maybe, best manage that process and drug and adoption.

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Great. And then on the corporate market, just to clarify, would you characterize the growth in corporate as being similar to higher ed or is it any better, and then just, how have you seen the environment, evolved in recent months and you talked about a healthy pipeline there, but any specific themes or dynamic you're seeing in corporate?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Great to help us along.

Question: Paul Treiber - Rbc Capital Markets - Analyst : Thanks so much. Good morning. Just a question on ARR growth. You gave the comment that ARR growth excluding K-12 was 10% this quarter. How does that compare to the last several quarters and yeah if you can just put some context around that 10%.

Question: Paul Treiber - Rbc Capital Markets - Analyst : Okay, that's helpful. And then just on the pipeline, you sound quite bullish on the pipeline. Can you speak to one, what's driving the momentum that you're seeing in the pipeline and then secondly, how conversion rates have been tracking, and it sounds like, they've they've increased and what's been driving the increase in conversion rates.

Question: Paul Treiber - Rbc Capital Markets - Analyst : Thanks for taking the questions.

Question: Suthan Sukumar - Stifel Canada - Analyst : Good morning guys. For my first question, I wanted to touch on the pipeline color that you provided, and it's good to hear that you're seeing this consistent expansion in the overall pipeline. Can you speak a little bit about what might be different quarter to quarter and maybe year over year with respect to the current sales cycle slash sales process, as you look at converting that pipeline?

Question: Suthan Sukumar - Stifel Canada - Analyst : Okay, great. No, that's helpful. For my second question, I wanted to touch on the corporate learning opportunity. Yeah, I think earlier in the call you touched upon, adding more resources to focus on the employee training, use case specifically. Can you talk a little bit about what's left to do from a product perspective and given the new leadership hire here, when do you expect to be able to go to market with that refined go to market strategy and product offering to, truly capture that opportunity.

Question: Suthan Sukumar - Stifel Canada - Analyst : Okay, great. Appreciate the the color, guys. I'll pass the line. Thank you.

Question: Brian Peterson - Raymond James Ltd - Analyst : Hey guys, thanks for taking the question. Just one for me. So John, I just want to make sure we understood on the K through 12 side for the customers, are some of those leaving D2L altogether and maybe there isn't that opportunity to re-engage because I think you used the word pullback or maybe is this is something where they're spending a little bit less and then you have the opportunity. Is there any way to kind of segment? Of the customers that are transitioning, how many are still remaining customers or how much they are still remaining versus some that you could win back? Thanks guys.

Question: Brian Peterson - Raymond James Ltd - Analyst : Appreciate the color. Thanks, John.