D2L (TSE:DTOL), a global learning technology company, announced its Q1-2024 results recently, beating expectations and showing revenue and profitability growth. The company also raised its guidance, sending DTOL stock nearly 15% higher for the day.
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DTOL’s revenue grew by 6% year-over-year to $44.23 million, beating the consensus estimate of $43.41 million, while its constant-currency revenue rose 9% to $45.5 million. Further, its earnings per share came in at $0.02, well ahead of the -$0.06 that analysts were expecting. Please note that all figures are in U.S. dollars unless otherwise stated.
Notably, the firm’s subscription and support revenue enjoyed a year-over-year surge of 10%, reflecting growth from new customers and solid revenue retention from existing ones. Also, annual recurring revenue for the quarter witnessed a 7% year-over-year jump to $170.9 million (10% in constant currency).
Further, D2L’s Gross profit climbed 13% to $29.9 million from $26.4 million in the same period of the prior year, with an improved gross profit margin of 67.6% compared to 62.9%. The company also flipped its adjusted EBITDA from a loss of $1.5 million in Q1 2023 to a positive figure of $2.8 million. What’s more, despite negative free cash flow of $18.7 million, D2L maintained a robust balance sheet with $92.1 million in cash and equivalents and no debt.
D2L Increases Its Fiscal 2024 Guidance
Looking forward, D2L has revised its Fiscal 2024 guidance with a projected adjusted EBITDA range of $6 million to $8 million, reflecting rising gross margins and “continued cost optimization.” The previous range was $4 million to $6 million.
Is DTOL Stock a Buy, According to Analysts?
DTOL stock earns a Strong Buy rating on TipRanks based on three Buys and one Hold assigned in the past three months. Moreover, DTOL stock’s average price target of C$10.25 implies upside potential of 22.3%.
