D2L Inc Q4 2024 Earnings Call Transcript

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

Question: Doug Taylor - Canaccord Genuity - Analyst : Yes, thank you. Good morning, Jim, and congratulations on the progress on delivering operating leverage this year and the outlook for more on the first question, likely for Josh ARR growth at 12% as pretty steady. I mean, you're guiding to growth in subscription and support revenue a little shy of that at the midpoint. So perhaps I'll ask if you can maybe paint a picture of what other factors we should be taking into account here? Or is this just the D. two L. wave revenue dropping off point this year because there's a or is there a degree of conservatism built in there?

Question: Doug Taylor - Canaccord Genuity - Analyst : Jim, and while I got you there, Josh, I am not mistaken. The guidance speaks to another potentially slight contraction or at least flat year-over-year performance for the services side of the business. Any commentary you'd like to add on that dynamic?

Question: Doug Taylor - Canaccord Genuity - Analyst : Okay. Okay. And then maybe a question for John or Steven, if you're if your voice can handle it here, DTD. two L. wave spin out was, you know, it's a logical move. However, it was one point of differentiation that you highlighted in your efforts to date to penetrate the the enterprise market. So maybe it's a good time for you to maybe get you to speak to your investment in the enterprise segment. And what initiatives you are focused on to help capture share within that, that market share? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 04, 2024 / 12:30PM, DTOL.TO - Q4 2024 D2L Inc Earnings Call

Question: Doug Taylor - Canaccord Genuity - Analyst : Thank you. I'll pass all line.

Question: Daniel Chan - TD Cowen - Analyst : Hi, good morning. Another question on the market share you've been taking market share from legacy players like Blackboard. But when I look at one of your main competitors in the higher North American hired space, they're calling for 5% organic growth next year. So your 10% suggests you're going to be taking market share from them as well. Have you been seeing a lot more of that where you guys are winning it deals against them or maybe even displacing?

Question: Daniel Chan - TD Cowen - Analyst : That's helpful, thanks. And then just digging into this, the blackboard and Moodle displacement, Tom, Steve mentioned that they've got 70% to 80% presence in international markets. Do you think you can apply the same successful North American strategy to those international markets to win market share there? Or do you need to make product and sales strategy changes to address those? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 04, 2024 / 12:30PM, DTOL.TO - Q4 2024 D2L Inc Earnings Call

Question: Daniel Chan - TD Cowen - Analyst : That's helpful. And maybe a final question, just on the D2L always spin out, it sounds like EBITDA margin will expand post spin up, how should we think about the EBITDA margin pre and post the transaction in your full year targets?

Question: Daniel Chan - TD Cowen - Analyst : Thank you.

Question: Paul Travers - RBC Capital Markets - Analyst : Thanks very much and good morning. Just a question on the long-term structural growth for the market in just looking at your medium-term growth outlook calls for faster growth than your '25 guidance. It looks like '25 that seeing some headwinds maybe from elongated sales cycle. But the question is just around the longer term, what gives you confidence in the long-term growth rate fundamental opportunity?

Question: Paul Travers - RBC Capital Markets - Analyst : That was really helpful. Thank you. Deanne, you mentioned that digitization of education. Do you see or how impactful is generative AI as as as part of that trend. And you see general AI as a tool to further improve productivity for your users. And then to what degree have you shifted your product roadmap to address generative? A I've got a couple of a couple of new features, but you can you speak to what hasn't been announced to the jury that you're shifting towards generative AR?

Question: Paul Travers - RBC Capital Markets - Analyst : Good to hear. Thanks for taking the questions.