Q1 2026 D2L Inc Earnings Call

June 11, 2025

Peter and I will be your moderator for today.

Okay.

[music].

All lines will be muted during the presentation portion of the cool with an opportunity for questions and answers at the end.

Okay.

John Baker: Please refer to the company's MD&A for the three months ended April 30th, 2025 and 2024 for more information about these and certain other non-IFRS financial measures, including where applicable a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures from our And now I'd like to turn the call over to Mr. John Baker, Chief Executive Officer, D2L. Please go ahead. Thank you, Craig, and thank you, everyone, for joining us for our Q1 earnings call. We released financial results after the markets closed yesterday, which you can find on the investor relations section of our website at d2l.com.

If you would like to ask a question press star one on your telephone keypad.

Thank you.

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This mornings call is being recorded on June 11, 2025 at 830, a M eastern time.

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Craig Armitage: I would now like to pass the conference over to your host Craig Armitage. Thank you you May proceed.

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Craig Armitage: Thank you and good morning, everyone listeners are reminded that portions of today's discussion will include statements that contain forward looking information.

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Speaker Change: Such statements are subject to risks and uncertainties that could cause actual results to differ materially from a conclusion forecast or projection in the forward looking information.

Okay.

John Baker: Please note that the results we're discussing today are in U.S. dollars. I'm joined this morning by Josh Huff, our CFO, and I'm pleased to report it was a solid start to fiscal 26 with our team executing successfully in the current macro environment.

Okay.

Speaker Change: Further certain material factors or assumptions were applied in drawing a conclusion or making a forward forecast or projection as reflected in the forward looking information for identification and discussion of such risks uncertainties and factors and assumptions as well as further information concerning forward looking statements. Please refer to the company's annual and interim.

Okay.

John Baker: Delivering Efficient Growth and Strengthening Our Fundamentals. The Q1 highlights include total revenue growth of 9% to $52.8 million. Subscription and support revenue rose 11%. to 47.7 million. Adjusted gross margins are up 360 basis points to 71%. Annual recurring revenue was up 9% over last year's Q1 to $206.8 million on a constant currency basis. An adjusted EBITDA grew to $9.3 million with adjusted EBITDA margin at 17.6%, more than double the 8.3% we reported in last year's Q1.

Okay.

Speaker Change: Management's discussion and analysis and the most recently filed annual information form in each case as filed in the company's profile on SEDAR plus at Www, SEDAR plus dot com.

Okay.

Great.

Okay.

Yes.

Speaker Change: In addition, during this call references will be made to various non <unk> financial measures, including constant currency revenue adjusted EBITDA adjusted EBITDA margin adjusted gross margin and free cash flow.

Speaker Change: Good morning, and thank you all for attending today's D. Two hour, Inc, Q1 fiscal <unk>.

<unk> financial results conference call.

breaker: My name is breaker and I will be your moderator for today.

Speaker Change: These non <unk> measures do not have a standardized meaning prescribed by <unk> and.

breaker: All lines will be muted during the presentation portion of the cool with an opportunity for questions and answers at the end.

Speaker Change: May not be comparable to similar measures presented by other companies.

Speaker Change: Please refer to the company's MD&A for the three months ended April 32025, and 2024 for more information about these and certain other non <unk> financial measures, including where applicable a reconciliation of historical non <unk> financial measures to the most directly comparable <unk> financial measures from our financial statements.

John Baker: As we shared in April, with our year-end results, the macroeconomic environment continues to present short-term challenges. This is most apparent in U.S. higher education, where we've seen heightened levels of uncertainty, leading to delays in evaluations and decision-making. This remained consistent in Q1, with a slight increase in market activity in the last month or so. As you know, a learning platform is a mission-critical part of an institution's technology stack. And increasingly, leaders I speak with appreciate that a modern, AI-first learning platform can be an important solution to enhance learner engagement, drive student retention, and therefore revenue retention, and enabling new learning modalities with greater efficiency.

If you would like to ask a question press star one on your telephone keypad.

breaker: This mornings call is being recorded on June 11th 2025.

breaker: 830, a M eastern time.

Craig Armitage: I would now like to pass the conference over to your host Craig Armitage. Thank you you May proceed.

John Baker: I'd now like to turn the call over to Mr. John Baker, Chief Executive Officer, Don <unk>. Please go ahead.

Craig Armitage: Thank you and good morning, everyone listeners are reminded that portions of today's discussion will include statements that contain forward looking 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 forward looking information.

Speaker Change: Thank you Craig and thank you to everyone for joining us for our Q1 earnings call. We released financial results. After the market closed yesterday, which you can find on the Investor Relations section of our website at <unk> Dot com.

Speaker Change: Please note that the results. We're discussing today are in U S dollars I'm joined this morning by Joshua <unk> our CFO.

Craig Armitage: Further certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward looking information for identification and discussion of such risks uncertainties and factors and assumptions as well as further information concerning forward looking statements. Please refer to the companys.

John Baker: And despite the current market dynamics in U.S. higher education, our sales pipeline continues to build, our competitive position is getting stronger, and we're winning more than 50% of the available opportunities in North America at higher education. In Q1, these wins include LCI Education, a group of 12 institutions on five continents, educating over 20,000 learners. This innovative institution is widely known for its leadership in technology-based learning. and Nox College, a leader in theological education, is transitioning its students to Brightspace, shifting from a legacy venue. Internationally, we continue to grow our footprint, adding great new customers in Q1, these included the University of Otago, New Zealand's oldest university with more than 20,000 Universidad de la Sabana, a top private university in Colombia, where Brightspace now powers six of the top ten private universities by ranking.

Speaker Change: I'm pleased to report a solid start to fiscal 'twenty six but the team executing successfully.

Speaker Change: Pro environment.

Speaker Change: Delivering efficient growth and strengthening our fundamentals. The Q1 highlights include total revenue growth of 9% to $52 8 million subscription and support revenue rose 11%.

Craig Armitage: Daniel and then term managements discussion and analysis and the most recently filed annual information form in each case as filed under the company's profile on SEDAR at Www, SEDAR plus dot com.

Speaker Change: To $47 7 million adjusted.

Speaker Change: Adjusted gross margins were up 360 basis points to 71%.

Speaker Change: Annual recurring revenue was up 9% over last year's Q1 to $206 8 million on a constant currency basis.

Craig Armitage: In addition, during this call references will be made to various non <unk> financial measures, including constant currency revenue adjusted EBITDA adjusted EBITDA margin adjusted gross margin and free cash flow.

Speaker Change: And adjusted EBITDA grew to $9 3 million and adjusted EBITDA margin at 17, 6% more than doubled to eight 3% we reported in last year's Q1.

Craig Armitage: Non <unk> measures do not have a standardized meaning prescribed by EIOPA us.

Craig Armitage: May not be comparable to similar measures presented by other companies.

Speaker Change: As we shared in April with our year end results. The macroeconomic environment continues to present short term challenges. This is most apparent in U S higher education, where we've seen heightened levels of uncertainty leading to delays in evaluations and decision, making does remain consistent in Q1 with a slight increase in market activity in the last month or so.

Craig Armitage: Please refer to the company's MD&A for the three months ended April 32025, and 2020 for more information about these and certain other non <unk> financial measures, including where applicable a reconciliation of historical non REIT for us financial measures to the most directly comparable <unk> financial measures from our financial statements.

John Baker: And we also welcome Hogendt University, one of the largest applied sciences and arts universities in Belgium with more than 17,000 students. Our win rates are strong across our corporate markets as well. In Q1, we continue to expand the customer base, adding the Institute of Electrical and Electronics Engineers, often known as the IEEE Computer Society, and also Pantheon Academy, among others. In addition to new customer expansion, we're leaning into our existing relationships, providing additional value to customers and growing our net revenue retention. Our upsell and cross-sell motion is improving, and we're seeing healthy pipeline generation for new products led by our AI offering, D2L Lumine, and Creator Plus.

Speaker Change: As you know our learning platform as a mission critical part of institutions technology stack and increasingly leaders I speak with I appreciate that a modern AI first learning platform can be an important solution to enhance engagement drive student retention.

John Baker: I would now like to turn the call over to Mr. John Baker, Chief Executive Officer, Jim <unk>. Please go ahead.

John Baker: Thank you Craig and thank you to everyone for joining us for our Q1 earnings call. We released financial results. After the markets closed yesterday, which you can find on the Investor Relations section of our website at <unk> Dot com.

Speaker Change: Therefore, our revenue retention and enabling new learning modality with greater efficiency.

Speaker Change: Please note that the results. We're discussing today are in U S dollars I'm joined this morning by Joseph our CFO.

Speaker Change: And despite the current market dynamics in U S higher education, our sales pipeline continues to build.

John Baker: I'm pleased to report a solid start to fiscal 'twenty, six where the team executing successfully.

Speaker Change: Competitive positioning is getting stronger and we're winning more than 50% of available opportunities in North America higher education.

John Baker: CRO environment.

John Baker: As an example, towards the end of the quarter, we landed a system-wide looming expansion for a large U.S. higher education. In general, the future of AI continues to be top of mind in my conversations with customers and DTL recently partnered with the Online Learning Consortium to study how students in higher education perceive and use generative AI technology. The report shows that students are embracing and unlocking the power of AI, and they want their faculty and institutions to meet them where they are in the learning journey. This highlights the need for investments in AI tools that can boost engagement and facilitate important personal learning interactions.

John Baker: Delivering efficient growth and strengthening our fundamentals. The Q1 highlights include total revenue growth of 9% to $52 8 million subscription and support revenue rose 11%.

Speaker Change: In Q1. These wins include LTI education, a group of 12 institutions on five continents and hitting over 20000 learners. This innovative institution is widely known for its leadership and technology based learning.

John Baker: $247 7 million adjusted.

John Baker: Adjusted gross margins were up 360 basis points to 71%.

Speaker Change: And not college, a leader and theological education with transitioning its students to buy space shifting from a legacy vendor.

John Baker: Annual recurring revenue was up 9% over last year's Q1 to $206 8 million on a constant currency basis.

Speaker Change: Lastly, we continue to grow our footprint, adding great new customers. In Q1. These included the University of Otago, New Zealand's oldest university with more than 20000 students University bad debt Us Obama.

John Baker: And adjusted EBITDA grew to $9 3 million and adjusted EBITDA margin at 17, 6% more than double the eight 3% we reported in last year's Q1.

John Baker: Each of our Lumi is well positioned to improve the student's experience with AI, while at the same time increasing the efficiency for educators. Building on the strong foundation that we've built over the last 25 years, we are leaning into our AI first learning platform strategy. We believe that AI will act as a catalyst for new investments to improve the learning experience and outcomes. And this is a chapter that we believe will be more impactful for our clients than the move to the cloud. We have a robust innovation roadmap for D2L-Lumi across all of our products.

Speaker Change: Private University in Colombia, where price base now powers six of the top 10 private universities by ranking.

John Baker: As we shared in April with our year end results. The macroeconomic environment continues to present short term challenges. This is most apparent in U S. Higher education, where we are seeing heightened levels of uncertainty leading to delays in evaluations and decision, making just remained consistent in Q1 with a slight increase in market activity in the last month or so.

Speaker Change: And we also welcomed Hogan University, one of the largest applied sciences and arts universities in Belgium with more than 17000 students.

Speaker Change: Our win rates are strong across our core markets as well in Q1, we continued to expand the customer base, adding the institute of electrical and electronics engineers, often known as the <unk> Computer Society and also pantheon the academy among others.

John Baker: As you know our learning platform as a mission critical part of an institution's technology stack and increasingly leaders I speak with I appreciate that a modern AI first learning platform can be an important solution to enhance engagement drive student retention.

John Baker: And we continue to look forward to sharing more at our Fusion Users Conference next month. We're pleased that our commitment to innovation and product design continues to be recognized and awarded. In Q1, Brightspace was named one of the best education software products by G2, and G2L was named one of the best software companies in Canada, and one of the world's top edtech companies, 2025, by Time. Looking ahead, we remain focused on balancing near-term performance with strategic investments as we work to become the number one in targeted education markets globally.

Speaker Change: In addition to new customer expansion, we're leaning into our existing relationships, providing additional value to customers and growing our net revenue retention, our upsell and cross sell motion is improving and we're seeing healthy pipeline generation for new products led by our AI offerings, 12, looming and creator plus.

John Baker: And therefore, our revenue retention and enabling new learning modalities with greater efficiency.

John Baker: And despite the current market dynamics in U S higher education, our sales pipeline continues to build.

John Baker: Our competitive position is getting stronger and we're winning more than 50% of the available opportunities in North America higher education.

Speaker Change: As an example towards the end of the quarter, we landed the system wide looming expansion for a large U S higher education system.

John Baker: In Q1. These wins include LTI education groups 12 institutions on five continents educating over 20000 learners with innovative institution is widely known for its leadership and technology based learning.

In general the future of AI continues to be top of mind in my conversations with customers and prospects default recently partnered with the online learning consortium to study how students in higher education perceive and used generative AI technologies. The report shows that students are embracing and unlocking the power of AI and they want their faculty and institutions.

John Baker: and establish yourselves as the next generation learning platform for corporate upskilling.

Josh Huff: With that, I'll turn the call over to Josh, over to you. Thanks, John. And good morning. The Q1 results show a strong balance of top line growth combined with further improvements in gross margin and operating leverage. Total revenue for Q1 was $52.8 million, a 9% increase over the same period last year, and constant currency revenue increased 10.5% to $53.6 million. Subscription and support revenue increased 11% to $47.7 million. Constant currency annual recurring revenue grew by 9% from $190.3 million to $206.8 million. From a new bookings perspective, Q1 is typically our seasonally lowest quarter of the year.

John Baker: And not college, a leader and theological education is transitioning its students to buy space shifting from a legacy vendor.

Speaker Change: <unk> to meet them, where they are in the learning journey.

John Baker: Internationally, we continue to grow our footprint, adding great new customers. In Q1. These included the University of Otago, New Zealand's oldest university with more than 20000 students University bad debt loss Sabato.

Speaker Change: This highlights the need for investments in AI tools that can boost engagement and facilitate the important personal interactions.

Speaker Change: <unk> is well positioned to improve the students' experience with AI, while at the same time increasingly efficiency for educators.

John Baker: Top private University and Columbia.

John Baker: Space now powers six of the top 10 private universities by ranking.

Speaker Change: Building on the strong foundation that we built over the last 25 years, we are leaning into our AI first floating platform strategy. We believe that AI will act as a catalyst for new investments to improve the learning experience and outcomes.

John Baker: And we also welcomed Hogan University, one of the largest applied Sciences and arts.

John Baker: Of our cities in Belgium, with more than 17000 students.

John Baker: Our win rates are strong across our core markets as well in Q1, we continued to expand the customer base.

Speaker Change: And this is a chapter that we believe will be more impactful for our clients and the move to the cloud.

Josh Huff: Professional services and other revenue decreased 8% in Q1 to $5.1 million. In the current macroeconomic conditions, there has been a slight reduction in customer propensity to commit to and consume larger professional services engagements. The Q1 results showed material gross margin improvement. Adjusted gross margin came in at 71.3%, up from 67.7% last year. Description and support gross margin rose to 75.2% compared to 72.2% in Q1 of prior year, reflecting ongoing engineered optimizations in our cloud technology delivery and the positive flow through of increasing revenues from high margin software add-ons. And gross margin for professional services was 22.3% in Q1 versus 30.1% in the comparable period last year.

John Baker: The Institute of electrical.

Speaker Change: We have a robust innovation roadmap for detour, leaving.

Speaker Change: Across all of our products and we continue to look forward to sharing more at our fusion users conference next month.

Speaker Change: We're pleased that our commitment to innovation and product design continues to be recognized and awarded in Q1 bright space within one of the best educational software products by <unk> and <unk> as being one of the best software companies in Canada, and one of the worlds top Ed Tech companies 2025 by time.

Speaker Change: Looking ahead, we remain focused on balancing near term performance with strategic investments as we work to become the number one and targeted education markets globally.

Speaker Change: And establish ourselves as the next generation learning platform for corporate Upscaling.

Josh: With that I'll turn the call over to Josh over to you.

John Baker: Please proceed and used generative AI technologies.

Josh: Thanks, John and good morning, the Q1 results show a strong balance of top line growth combined with further improvements in gross margin and operating leverage.

Speaker Change: <unk> shows that students are embracing and unlocking the power of AI and they want their faculty and institutions to meet them, where they are in the learning journey.

Josh Huff: We delivered these results while continuing to manage operating expenses. Operating expenses for the first quarter were $33.5 million, up less than 1% year over year. As a percentage of revenue, total OPEX was 64% this quarter versus 69% of revenue in last year's Q1. a roughly 500 basis point improvement in operating scale. R&D was 22% of revenue compared to 25% of revenue in last year's Q1, in large part due to efficiency improvements and lower headcount post the skills wave spinout. Sales and marketing expenses were up 6% over the same period of the prior year in Q1.

Josh: Total revenue for Q1 was $52 8, million% to 9% increase over the same period last year and constant currency revenue increased 10, 5% to $53 6 million.

John Baker: This highlights the need for investments in AI tool that can boost engagement and facilitate important personal lending interactions.

John Baker: <unk> is well positioned to improve the students' experience with AI, while at the same time, increasing the efficiency for educators.

Josh: Subscription and support revenue increased 11% to $47 7 million.

Josh: Constant currency annual recurring revenue grew by 9% from $190 3 million to $206 8 million.

John Baker: Building on the strong foundation that we've built over the last 25 years, we are leaning into our AI first learning platform strategy. We believe that AI will act as a catalyst for new investments to improve the learning experience and outcomes and this is a chapter that we believe will be more impactful for our clients and the move to the cloud.

Speaker Change: From a new bookings perspective, Q1 is typically our seasonally lowest quarter of the year.

Speaker Change: Professional services and other revenue decreased 8% in Q1 to $5 1 million in the current macroeconomic conditions. There has been a slight reduction in customer propensity to commit to and consume larger professional services engagements.

John Baker: We have a robust innovation roadmap for <unk>.

Josh Huff: As a reminder, as we look ahead to Q2, results will include expenses for our annual user conference, Fusion. We're excited to welcome more than 1,000 of our customers, prospects, partners, and employees to this important annual event. And while DNA expense has increased, this was mainly due to non-recurring post-combination compensation from the acquisition of H5P last year. Excluding the impact of these costs, DNA increased by 300,000 year over year. As we shared in April, we will be investing prudently this year in product innovation and market expansion, and therefore expect operating expenses to increase modestly as reflected in our guidance.

John Baker: Across all of our products and we continue to look forward to sharing more at our fusion users conference next month.

John Baker: We're pleased that our commitment to innovation and product design continues to be recognized and awarded in Q1 Bright space was named one of the best education software products by due to <unk> being one of the best software companies in Canada, and one of the world's top Ed Tech companies of 2025 by time.

Speaker Change: The Q1 results showed material gross margin improvement adjusted gross margin came in at 71, 3% up from 67, 7% last year subscription.

Speaker Change: Subscription and support gross margin rose to 75, 2% compared to 72, 2% in Q1 of prior year, reflecting ongoing engineered optimizations, and our cloud technology delivery and the positive flow through of increasing revenues from high margin software add ons.

John Baker: Looking ahead, we remain focused on balancing near term performance with strategic investments as we work to become the number one in targeted education markets globally.

John Baker: And establish ourselves as the next generation learning platform, our corporate upscaling.

Speaker Change: And gross margin for professional services was 22, 3% in Q1 versus 31% in the comparable period last year.

Josh Huff: combination of revenue growth, improved gross margins, and operating leverage drove a substantial year over year improvement and profitability. We report a Q1 adjusted EBITDA of $9.3 million, or 17.6% margin, an increase from 8.3% margin in the same period of the prior year. And income for the period improved to $3.3 million compared with $0.6 million for the same period in the prior year. Three cash flow improved significantly to negative $1.8 million in Q1 compared to negative $15 million in the same period in the prior year, driven by our improved profitability and in part benefiting from timing of working capital.

Josh: With that I'll turn the call over to Josh over to you.

Josh: Thanks, John and good morning, the Q1 results show a strong balance of topline growth combined with further improvements in gross margin and operating leverage.

Speaker Change: We delivered these results while continuing to manage operating expenses.

Speaker Change: Operating expenses for the first quarter were $33 5 million up less than 1% year over year.

Josh: Total revenue for Q1 was $52 8, million% to 9% increase over the same period last year and constant currency revenue increased 10, 5% to $53 6 million.

Speaker Change: As a percentage of revenue total opex was 64% this quarter versus 69% of revenue in last year's Q1.

John Baker: Subscription and support revenue increased 11% to $47 7 million.

Speaker Change: A roughly 500 basis point improvement in operating scale.

Speaker Change: R&D was 22% of revenue compared to 25% of revenue in last year's Q1 in large part due to efficiency improvements and lower head count post the skills, we're a spin out.

John Baker: Constant currency annual recurring revenue grew by 9% from $190 3 million to $206 8 million.

Josh Huff: Cash flows typically have a seasonal low in the first quarter each year and a seasonal high in the second quarter of each year. At quarter end, we had no debt and $92.5 million in cash, providing us the financial flexibility to invest in growth opportunities as we move forward. In terms of capital allocation, we bought back over 168,000 shares under the NCIB program in the quarter. This largely offset any dilution from equity grants. As a result, the weighted average diluted shares outstanding increased less than 1% over the past 12 months. We will continue to make use of the NCIB within our capital allocation plan.

John Baker: From a new bookings perspective, Q1 is typically our seasonally lowest quarter of the year.

Speaker Change: Sales and marketing expenses were up 6% over the same period of the prior year in Q1.

John Baker: Professional services and other revenue decreased 8% in Q1 to $5 1 million in the current macroeconomic conditions. There has been a slight reduction in customer propensity to commit to and consume larger professional services engagements.

Speaker Change: As a reminder, as we look ahead to Q2 results will include expenses for our annual user conference fusion.

Speaker Change: Excited to welcome more than 1000 of our customers prospects partners and employees to this important annual events.

Speaker Change: And while G&A expenses increased this was mainly due to nonrecurring post combination compensation from the acquisition of <unk> last year <unk>.

John Baker: The Q1 results showed material gross margin improvement adjusted gross margin came in at 71, 3% up from 67, 7% last year.

Speaker Change: Excluding the impact of these costs G&A increased by 300000 year over year.

John Baker: Subscription and support gross margin rose to 75, 2% compared to 72, 2% in Q1 of prior year, reflecting ongoing engineered optimizations, and our cloud technology delivery and the positive flow through of increasing revenues from high margin software add ons.

Speaker Change: As we shared in April we will be investing prudently this year in product innovation and market expansion and therefore expect operating expenses to increase modestly as reflected in our guidance the.

Josh Huff: With our Q1 results, we reiterated our annual guidance. For fiscal 2026, we plan to continue making measured investments and growth while scaling the operations towards increasing levels of profitability.

Speaker Change: The combination of revenue growth improved gross margins and operating leverage drove a substantial year over year improvement in profitability.

John Baker: And gross margin for professional services was 22, 3% in Q1 versus 31% in the comparable period last year.

Unknown Executive: And while we are navigating tougher macro conditions currently, we continue to see strong growth drivers over the medium term, which we expect will lead to higher revenue growth, along with further adjusted EBITDA margin expansion, as reflected in our medium term outlook shared in And at this time, I will now pass it back to the operator for Q&A. Thank you.

Speaker Change: We reported Q1, adjusted EBITDA of $9 3 million or 17, 6% margin an increase from eight 3% margin in the same period of the prior year.

John Baker: We delivered these results while continuing to manage operating expenses.

John Baker: Operating expenses for the first quarter were $33 5 million up less than 1% year over year.

Speaker Change: And income for the period improved to $3 3 million compared with <unk> 6 million for the same period in the prior year.

John Baker: As a percentage of revenue total opex was 64% this quarter versus 69% of revenue in last year's Q1.

Speaker Change: Free cash flow improved significantly to negative one 8 million in Q1 compared to negative $15 million in the same period in the prior year driven by our improved profitability and in part benefiting from timing of working capital.

Unknown Executive: We will now begin the question and answer session. And if you would like to ask a question, please press star followed by one on your telephone keyboard. If you change your mind, you can press star two. and again to ask a question press star 1.

John Baker: A roughly 500 basis point improvement in operating scale.

John Baker: R&D was 22% of revenue compared to 25% of revenue in last year's Q1.

John Baker: In large part due to efficiency improvements and lower head count post the skills wave spin out.

Speaker Change: Cash flow is typically have a seasonal low in the first quarter each year and a seasonal high in the second quarter of each year.

Unknown Executive: As a reminder, if you are using a speakerphone, please remember to get your handset before asking a question.

John Baker: Sales and marketing expenses were up 6% over the same period of the prior year in Q1.

Speaker Change: At quarter end, we had no debt and $92 5 million in cash providing us the financial flexibility to invest in growth opportunities as we move forward.

Unknown Executive: Inaudible Fast questions We have come from Gavin Fairweather with Cormark. Oh, hey, good morning.

John Baker: As a reminder, as we look ahead to Q2 results will include expenses for our annual user conference fusion.

John Baker: Excited to welcome more than 1000 of our customers prospects partners and employees to this important annual events.

Speaker Change: In terms of capital allocation, we bought back over 168000 shares under the <unk> program in the quarter.

Gavin Fairweather: Maybe just to start on the Houston registration. Yeah, good morning, Gavin. Fusion is tracking fairly well. So if you look at comparing it to 2023, we're tracking above the attendance that we saw at that event. We saw certainly a lot of folks come to our Toronto event last year. Today, we're tracking close to about 1,000, just over 1,000 registrations. We're hoping to see at least 1,000 people in person, maybe as many as 1,200 in Georgia. That said, demand for attending the event for some of our clients is down in the market side of the U.S.

John Baker: And while G&A expenses increased this was mainly due to nonrecurring post combination compensation.

Speaker Change: This largely offset any dilution from equity grants as a result, the weighted average diluted shares outstanding increased less than 1% over the past 12 months.

John Baker: The acquisition of <unk> last year.

John Baker: <unk> the impact of these cost G&A increased by 300000 year over year.

Speaker Change: We will continue to make use of the NCI be within our capital allocation plans.

John Baker: As we shared in April we will be investing prudently this year in product innovation and market expansion and therefore expect operating expenses to increase modestly as reflected in our guidance.

Speaker Change: With our Q1 results, we reiterated our annual guidance for fiscal 2026, we plan to continue making measured investments in growth, while scaling the operations towards increasing levels of profitability.

John Baker: The combination of revenue growth improved gross margins and operating leverage drove a substantial year over year improvement in profitability.

Speaker Change: And while we are navigating tougher macro conditions. Currently we continue to see strong growth drivers over the medium term, which we expect will lead to higher revenue growth along with further adjusted EBITDA margin expansion as reflected in our medium term outlook shared in April.

John Baker: We reported Q1, adjusted EBITDA of $9 3 million or 17, 6% margin an increase from eight 3% margin in the same period of the prior year.

Speaker Change: And at this time I will now pass it back to the operator for Q&A.

John Baker: And income for the period improved to $3 3 million compared with <unk> 6 million for the same period in the prior year.

Gavin Fairweather: That said, our U.S. demand for the event is going very well.

Speaker Change: Thank you we will now begin the question and answer session and if you would like to ask a question. Please press star followed by one on your kind of thank you Pat.

John Baker: Free cash flow improved significantly to negative one 8 million in Q1 compared to negative $15 million in the same period in the prior year driven by our improved profitability and in part benefiting from timing of working capital.

Gavin Fairweather: We're working hard to make sure that we're incentivizing our clients from Canada or other markets globally to make the trip, and we're hopeful that we'll see many more of them in person. And if not, we'll catch some through virtual attendance.

Prescott: If you change your mind from Prescott.

Speaker Change: And again can I ask a question press star one.

Speaker Change: As a reminder, if you are using a speaker phone. Please remember to take up your handset before asking a question.

John Baker: Cash flow is typically have a seasonal low in the first quarter each year and a seasonal high in the second quarter of each year.

Gavin Fairweather: And then maybe just on an international note to see the strength. All of these are in order.

John Baker: So I'll maybe discuss kind of how the pipeline KPIs are shaping up, how to deal with... I'm curious if there is a Markets that you call. Yeah, no, we're seeing good wins internationally. So pipeline is strong. We're seeing each of the different regions, putting up great wins on the board. You know, I, I think, you know, last quarter was, was a good quarter for our international team. I think the pipeline for the rest of the year looks very strong, and continue to execute really well globally. Very impressed with what the team has accomplished.

Speaker Change: Last question.

John Baker: At quarter end, we had no debt and $92 5 million in cash providing us the financial flexibility to invest in growth opportunities as we move forward.

Speaker Change: We have comes from Kevin <unk> with that with <unk> you May proceed.

Kevin: Oh, Hey, good morning, Thanks for taking my question and congrats on the strong results maybe.

John Baker: In terms of capital allocation, we bought back over 168000 shares under the <unk> program in the quarter. This largely offset any dilution from equity grants as a result, the weighted average diluted shares outstanding increased less than 1% over the past 12 months.

Speaker Change: Maybe just to start off on the Houston registrations I think you talked about 1000 registration. So maybe you can discuss.

Speaker Change: Yes.

Speaker Change: How those are tracking versus previous year.

Speaker Change: Thats, an uptick in the number of prospects there as a leading indicator.

Kevin Fusions: Yes, good morning, Kevin Fusions.

John Baker: We'll continue to make use of the NCI be within our capital allocation plans.

Speaker Change: Fusion is tracking fairly well so if you look at.

Speaker Change: Comparing it to 2023 were tracking above.

John Baker: With our Q1 results, we reiterated our annual guidance for fiscal 2026th we plan to continue making measured investments in growth, while scaling the operations towards increasing levels of profitability.

Speaker Change: The tenants that we thought that event, we saw certainly a lot of folks come to our Toronto event.

Unknown Executive: and maybe for Josh and Laster. on that line this quarter. We'll discuss in a bit more detail the drivers behind that strike.

Speaker Change: Sure.

Speaker Change: Today, we are tracking close to about 1000, just over 1000 registrations.

John Baker: And while we are navigating tougher macro conditions currently we.

Speaker Change: We're hoping to see at least 1000 people in person maybe as many as 12 acres in Georgia.

John Baker: We continue to see strong growth drivers over the medium term, which we expect will lead to higher revenue growth along with further adjusted EBIT margin expansion as reflected in our medium term outlook shared in April.

Speaker Change: That said.

Speaker Change: <unk> for attending the events for some for some of our classes down.

Josh Huff: Sorry, Gavin, do you mind just repeating? It was a little muffled. Yeah, just on the SAS gross margins, you know, obviously, surprising strength this quarter. Can you discuss, you know, in a bit more detail, the drivers behind the lift in SAS gross margins and to what extent they're... Yeah, certainly. So we were pleased with with Q1's gross margin, significant increase year over year. It continues to be really a story of optimizing our delivery. So both from a cloud optimization perspective, again, sort of an engineered roadmap of improvements that the team has done a really good job executing against.

Speaker Change: In markets outside of the U S.

John Baker: And at this time I will now pass it back to the operator for Q&A.

Speaker Change: That said our U S demand for the event is going very well.

John Baker: Thank you we will now begin the question and answer session and if you would like to ask a question. Please press star followed by one on your kind of think keypad.

Speaker Change: We're working hard to make sure that we're incentivizing our clients from Canada or other markets globally to make the trip and we're hopeful that we will see many more of them in person and his staff will catch them through virtual attendance.

John Baker: If you change your mind you compress Scotty.

John Baker: And again to ask a question press star one.

Speaker Change: Great I appreciate that and then maybe just on international nice to see the strength this quarter and Tom maybe you can discuss kind of how that how the pipeline kpis are shaping up.

John Baker: As a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question.

Tom: Deal momentum is progressing in some of your core international markets.

Speaker Change: First question.

Speaker Change: We have comes from Kevin <unk> with <unk> you May proceed.

Speaker Change: So im curious if theres any kind of particular markets that you'd call out as being particularly exciting at the moment.

Josh Huff: We've also started to infuse AI into our support operations, which has been helping us well. And I will say like Q1 was sort of pleasantly above what maybe we would consider to be sort of the durable run rate where we are right now to the effect of about 100 basis points. So as you look forward to the rest of the year, I would just just keep that in mind. But, but certainly, as we look back, you know, 24 months ago, we had aspired to get to these levels over this period of time and, and certainly look forward to advancing even further over the medium term.

Kevin: Oh, Hey, good morning, Thanks for taking my questions and congrats on the strong results, maybe just to start off on the.

Speaker Change: Yes, we're seeing good wins internationally.

Speaker Change: Registration I think you talked about 1000 registrations from if you can discuss.

Speaker Change: The pipeline is strong.

Speaker Change: Each of the different regions.

Speaker Change: How those are tracking versus previous years have you noticed an uptick in the number of prospects there as a leading indicator.

Speaker Change: Putting up great wins on the board.

Speaker Change: I think last quarter was.

Speaker Change: It was a good quarter for our international team I think it's a pipeline for the rest of the year looks very strong.

Kevin: Yes, good morning, Kevin.

Speaker Change: Fusion is tracking fairly well so if you look at.

Speaker Change: You need to execute really well globally very impressed with what the team is accomplishing.

Speaker Change: Comparing it to 2023 were tracking above.

Chris Martin: And then maybe for Josh and then lastly for me just on myself, Chris Martin.

Speaker Change: The tenants that we thought that event, we saw certainly a lot of folks come to our Toronto event last year.

Chris Martin: Surprising strength that came through on that line this quarter.

Unknown Executive: Thanks so much for the pathway.

Speaker Change: Today, we are tracking close to about a thousand just over 1000 registrations.

Speaker Change: If you look at the SaaS cost of goods on a basically flat despite 9% revenue growth.

Speaker Change: We're hoping to see at least a thousand people in person maybe as many as 1200 in Georgia.

Doug Taylor: Your next question comes from Doug Taylor with Canaccord United. Thank you. Good morning.

Speaker Change: I'll discuss a bit more detail on the drivers behind that strength.

Speaker Change: You would view the existing casino.

Speaker Change: That said.

Speaker Change: Yes.

Doug Taylor: I'll follow along a similar line of questioning around the gross margin profile, which, you know, jumped off the page this quarter. Part of that being efficiencies on your, you know, your infrastructure, you also reference Some of the mix of higher margin products, and presumably these are some of the add-ons that you're selling through. So I guess my question here was just to take a step back and maybe refresh us on the penetration rates you've got of some of those add-ons, and just so we can imagine what the gross margin profile upside there is from these levels as you get those to the desired penetration rate.

Speaker Change: <unk> for attending the events for some for some of our classes down.

Speaker Change: Gavin do you mind, just repeating it was a little muffled.

Speaker Change: In markets outside of the U S.

Speaker Change: Yes, just on the SaaS gross margins.

Speaker Change: That said our U S demand for the events as is going very well.

Speaker Change: Obviously surprising strength this quarter can you just discuss.

Speaker Change: We're working hard to make sure that we're incentivizing our clients from Canada or other markets globally to make the trip and we're hopeful that we'll see many more of them in person and a thoughtful catch them through virtual attendance.

Speaker Change: And a bit more detail the drivers behind the lift in SaaS gross margins and to what extent they're sustainable.

Speaker Change: Yes, certainly so we were pleased with Q1's gross margin significant increase year over year.

Speaker Change: Continues to be really a story.

Speaker Change: Great I appreciate that and then maybe just on international nice to see the strength. This quarter, maybe you could discuss kind of how that how the pipeline kpis are shaping up.

Speaker Change: Optimizing our deliveries so both from a cloud optimization perspective, again sort of engineered roadmap of improvements that the team has done a really good job executing against.

Speaker Change: Deal momentum is progressing in some of your core international markets.

Speaker Change: Im curious if theres any kind of particular markets that you call out as being particularly exciting at the moment.

Speaker Change: We've also started to infuse AI into our support operations, which has been <unk>.

Josh Huff: Yeah, good morning, Doug. So in terms of the attach rates, we're seeing good attach rates for the additional products with new clients. So north of 50% of new clients are adopting at least one and many cases, all of the additional packages that we've got to offer. And then with existing clients, we're still seeing a nice ramp. So quarter over quarter, seeing good velocity in terms of growth, but nowhere near the full potential of adoption of these technologies into the base. So a long runway ahead of us in terms of driving that revenue expansion. And as new clients embrace these new technologies, it does improve our growth margin.

Speaker Change: Helping as well.

Speaker Change: Yes, we're seeing good wins internationally.

Speaker Change: I will say like Q1 was sort of pleasantly above what maybe we would consider to be sort of the durable run rate, where we are right now to the effect of about 100 basis points.

Speaker Change: <unk> pipeline is strong.

Speaker Change: Seeing each of the different regions.

Speaker Change: Putting up great wins on the board.

Speaker Change: Alright, thank last quarter was.

Speaker Change: So as you look forward to the rest of the year I would just keep that in mind, but but certainly as we look back 24 months ago, we had aspired to get to these levels over this period of time and certainly look forward to advancing even further over the medium term.

Speaker Change: It was a good quarter for our international team I think it's a pipeline for the rest of the year looks very strong.

Speaker Change: Turning to execute really well globally very impressed with what the team is accomplishing.

Speaker Change: Okay.

Speaker Change: And then maybe for Josh and then lastly for me just from SaaS gross margins, obviously, some surprising strength that came through on that line this quarter.

Speaker Change: Thanks, so much for our pipeline.

Josh Huff: So the growth margin on these additional products is nice. But the core improvements that we've been making have been largely engineering driven. So continuing to make, you know, multiple projects have an impact on optimizing our cloud environment. But I think, you know, probably what we're highlighting here is these are high gross margin software products. And so as the attach rate continues to climb, we will see kind of flow through from a gross margin perspective.

Speaker Change: If you look at the SaaS cost of goods.

Speaker Change: Thank you. Your next question comes from Doug Taylor with Canaccord Genuity.

Speaker Change: Flat, despite 9% revenue growth.

Speaker Change: Maybe you can discuss a bit more detail about the drivers behind that strength and to what extent you would view the existing channels.

Speaker Change: Okay. Thank you and good morning.

Speaker Change: Ill follow along a similar line of questioning around the gross margin profile, which jumped off the page this quarter part of that being efficiencies on your infrastructure. You also referenced some of the mix of higher margin products and I, presumably these are.

Gavin: Gavin do you mind, just repeating it was a little muffled.

Gavin: Yes, just on the SaaS gross margins.

Speaker Change: Obviously, it's surprising strength this quarter can you just discuss.

Speaker Change: And a bit more detail the drivers behind the lift in SaaS gross margins and to what extent they're sustainable.

Speaker Change: The add ons.

Speaker Change: That youre selling through so I guess my question here was just to take a step back and maybe refresh us.

Speaker Change: Yes, certainly so we were pleased with with Q1's gross margin significant increase year over year.

Speaker Change: On the penetration rates, you've got some of those those add ons and just so we can.

Speaker Change: It continues to be really a story.

Speaker Change: I imagine what the gross margin profile upside there is from these levels as you get those.

Speaker Change: Of optimizing our delivery so both from a cloud optimization perspective, again sort of engineered roadmap of improvements that the team has done a really good job executing against.

Speaker Change: To the desired penetration rates.

Speaker Change: Yes, good morning, Doug So in terms of the attach rates, we're seeing good attach rates or the additional products with new clients. So north of 50% of new clients are adopting.

Speaker Change: We've also started to infuse AI into our support operations, which has been helping as well.

Unknown Executive: Okay, well, that's useful data on that subject.

Speaker Change: And I will say like Q1 with sort of <unk>.

Doug Taylor: The other question I wanted to ask here, when you initially set your annual guidance a couple months back, you know, the noise related to the Department of Education changes was pretty fresh. You've reiterated that guidance today, and it looks like you're tracking well to it. I guess what I'm, you know, I'll ask now is that with the benefit of a couple more months, you know, which is a lifetime in these markets, has that impact played out as you anticipated it? Is it, you know, better or worse? You know, any additional thoughts there?

Speaker Change: At least the one in many cases all of the additional packages that we got to offer.

Speaker Change: Pleasantly above what maybe we would consider to be sort of the durable run rate, where we are right now to the effect of about 100 basis points.

Speaker Change: And then with existing clients, we're still seeing a nice ramp so quarter over quarter seem good velocity in terms of growth, but nowhere near the full potential of adoption of these technologies into the base. So long runway ahead of us in terms of driving that revenue expansion.

Speaker Change: As you look forward to the rest of the year I would just keep that in mind, but but certainly as we look back 24 months ago, we had aspired to get to these levels over this period of time and certainly look forward to advancing even further over the medium term.

Speaker Change: As new clients embrace these new technologies it does improve our gross margin. So the gross margin on these additional products is nice.

Speaker Change: Thanks, So much I'll pass the line.

Speaker Change: But the core improvements that we've been making have been largely engineering, driven so continuing to make.

Speaker Change: Thank you. Your next question comes from Doug Taylor with Canaccord Genuity.

John Baker: Yeah, good question, Doug. So it's playing out as we anticipated so far. You know, it's certainly had an impact with a number of clients. That said, we have seen in the last month or so, a slight increase in the volume of activity that we're seeing in the market. So that's a good sign. But I would say it's too early to say we're out of the fog yet. You know, the team's executing really well. So our WAN rates continue to be north of 50%. We're doing well with pipeline generation, probably the best we've seen in a very long time.

Speaker Change: Multiple projects have an impact on optimizing a file.

Doug Taylor: Yes, Thank you and good morning al.

Doug Taylor: Following along a similar line of questioning around the gross margin profile, which jumped off the page this quarter part of that being efficiencies on your infrastructure. You also referenced some of the mix of higher margin products and I, presumably these are some of the.

Speaker Change: Impairment and as.

Speaker Change: Josh pointed out there's a long roadmap of additional improvements that we continue to make in.

Speaker Change: In the years ahead, so very excited about where we are.

Speaker Change: Today, but.

Speaker Change: Picks up more to be done, yes, maybe I'll just add to that as well I think when you look at the overall product portfolio expansion sort of approach we've taken recently I think.

Speaker Change: Add ons.

Speaker Change: That youre selling through so I guess my question here was just to take a step back and maybe refresh us on the penetration rates you've got of some of those those add ons and just so we can.

John Baker: And now it's about driving good execution through that pipeline as people work through these issues that they're grappling with in the broader macro. I have every confidence in our team's ability to execute, and it's really up to us to now drive that execution, you know, Q2, Q3, Q4, to get this growth engine fired up in a bigger way.

Speaker Change: One of the benefits is differentiated value to our customers on the overall solution set.

Speaker Change: We have been vocal on the net revenue retention expansion benefit, but I think.

Speaker Change: And what the gross margin profile upside there is from these levels as you get those.

Speaker Change: Probably what we're highlighting here is these are high gross margin software products and so as the attach rate continues to climb.

Speaker Change: The desired penetration rates.

Speaker Change: We will see kind of flow through from a gross margin perspective.

Speaker Change: Yes, good morning, Doug So in terms of the attach rates, we're seeing good attach rates or the additional products with new clients. So north of 50% of new clients are adopting.

Doug Taylor: All right. Thanks for that color.

John Baker: I'll pass the line. Yeah, Doug, maybe one other point just to add, you know, in the conversations with clients, it's not just modernizing the learning platform that's at the heart of the conversation, it's also leveraging some of the new technologies that we've built, whether it's Creator Plus with H5P or Lumi, to really provide a better educational experience for students as they're going through moments of austerity as well, too. So, how do we drive efficiency and productivity gains for our faculty while at the same time improving educational outcomes? That seems to be why our pipeline is building so quickly.

Speaker Change: Okay.

Speaker Change: It's useful data on that subject. The other question I wanted to ask here and when you initially said your annual guidance.

Speaker Change: At least the one in many cases all of the additional.

Speaker Change: A couple of months back the noise related to the department of education changes was pretty fresh you've reiterated that guidance today on what it looks like you're tracking well to it I guess what im.

Speaker Change: Packages of it got to offer.

Speaker Change: And then with existing clients, we're still seeing a nice ramp so quarter over quarter seeing good velocity in terms of growth, but nowhere near the full potential of adoption of these technologies into the base. So long runway ahead of us in terms of driving that revenue expansion.

Speaker Change: <unk> now has the benefit of a couple of more months, which is a lifetime in these markets has that impact.

Speaker Change: Played out as you anticipated as better worse.

Speaker Change: As new clients embrace these new technologies it does improve our gross margin. So the gross margin on these additional products is nice.

Speaker Change: Any additional thoughts there would be useful thank you.

Unknown Executive: We appreciate that.

Speaker Change: But the core improvements that we've been making have been largely engineering, driven so continuing to make.

Speaker Change: Yes. Good question, Doug So it's playing out as we anticipated so far.

Erin Kyle: We have Erin Kyle with CIBC, please go ahead. Hi, good morning. Thanks for taking my questions. Maybe just a question on AI mandates kind of in response to your last comment there. There was a headline last week, Ohio State University launched an AI fluency initiative to embed AI into its core undergrad requirements. So have you seen other AI mandates like this coming out across your customer base or new prospects? And do you see something like this has been driving demand for products like Lumi? Yeah, I think we have. I actually sat on an AI task force at the State University of New York around driving changes to the curriculum, workforce upskilling, and a number of other different initiatives, very similar to what you saw announced at the Ohio State.

Speaker Change: Certainly.

Speaker Change: Multiple projects have an impact on.

Speaker Change: It impacted the number of clients.

Speaker Change: Third we have seen in the last month or so a slight increase.

Speaker Change: Optimizing I file.

Speaker Change: Service and.

Speaker Change: Lease and the volume of activity that we're seeing in the market. So that's a good sign but I would say it's too early to say we're out of the fog yet.

Speaker Change: Yes.

Speaker Change: Josh pointed out there's a long roadmap of additional improvements that we continue to make.

Speaker Change: In the years ahead, so very excited about where we are today, but.

Speaker Change: The team is executing really well so our win rates continuing to be north of 50%.

Speaker Change: Yes, maybe I'll just add to that as well I think when you look at the overall product portfolio expansion sort of approach we've taken recently I think.

Speaker Change: We're doing well with pipeline generation, probably the best we've seen in a very long time.

Speaker Change: And now to those driving good execution through that pipeline as people work through these issues are they are grappling with in the broader macro.

Speaker Change: One of the benefits is differentiated value to our customers on the overall solution set and certainly we've been vocal on the net revenue retention expansion benefit, but I think.

Speaker Change: I have every confidence in our team's ability to execute and it's really up to us and that will drive that execution.

Speaker Change: Really what we're highlighting here is these are high gross margin software products and so as the attach rate continues to climb.

Speaker Change: Q2, Q3, Q4 to get this growth engine fired fired up and I think it away.

Speaker Change: Alright, thanks for that color I'll pass the line.

Speaker Change: We'll see kind of flow through from a gross margin perspective.

John Baker: I think you'll see, hopefully, all universities and colleges embrace the same type of thinking in terms of embedding AI skill sets into every discipline across all the programs that they're offering. And that will lead to AI being embraced as a core part of the workflow for building these learning experiences, assessing, tutoring, and you name it. So, we're very excited about this potential. Lumi is well positioned to support our clients in that endeavor. And the efficacy studies that we're seeing now come back from working with clients to test the technology and to see what the impact is has been nothing short of breathtaking.

Speaker Change: Yes, Doug maybe one other point just to add in the conversations with clients. It's not just modernizing their learning platform. That's at the heart of the conversation.

Speaker Change: Okay, well, let's see.

Speaker Change: Useful data on that subject. The other question I wanted to ask here and when you initially set your annual guidance a couple months back the noise related to the department of education changes was pretty fresh you've reiterated that guidance today on what it looks like you're tracking well to it I guess what im.

Speaker Change: Also leveraging.

Speaker Change: Some of the new technologies that we built whether it's cleaner plus with HIV or lumi to really provide a better educational experience for students as they're going through moments of austerity as well too. So how do we drive efficiency and productivity gains for our faculty while at the same time, improving educational outcomes that seems to be why our pipeline is building.

Speaker Change: I'll ask now is that with the benefit of a couple of more months, which is a lifetime in these markets has that impact.

Speaker Change: Played out as you anticipated is better or worse.

Speaker Change: So quickly.

Speaker Change: Okay.

Speaker Change: Any additional thoughts there would be useful thank you.

Speaker Change: I appreciate that.

Speaker Change: Thank you.

Speaker Change: Yes. Good question, Doug So it's playing out as we anticipated so far.

Erin Kyle: Dramatically reducing cost in the development of courses, while at the same time, lifting retention, lifting engagement, and lifting outcomes for students. It's a winning combination. Thank you. That's a helpful color there.

Speaker Change: We have Erin <unk> with CIBC. Please go ahead.

Speaker Change: It certainly had an impact with a number of clients.

Speaker Change: Okay.

Speaker Change: Hi, good morning, Thanks for taking my questions.

Speaker Change: That said, we have seen in the last month or so.

Speaker Change: Maybe just a question on AI and mandates kind of in response to your last comment there. There was a headline last week, Ohio State University launched an AI valency initiatives to embed AI.

Speaker Change: <unk> increase in the volume of activity that we're seeing in the market.

Erin Kyle: And then I just want to switch gears and go back to the profitability. So very strong in the quarter, 17.6 percent adjusted EBITDA margin. And other questions touched on that growth margin profile, which was great to see. You maintained your guidance for the year at 15 percent adjusted EBITDA.

Speaker Change: That's a good sign but I would say, it's too early to say we're out of the fog yet.

Speaker Change: The team is executing really well so our win rates continuing to be north of 50%.

Speaker Change: Underground requirements.

Speaker Change: So have you seen other AI and names like that coming out across your customer base or new prospects in DTC, something like that hasnt been driving demand for products like <unk>.

Speaker Change: We're doing well with pipeline generation, probably the best we've seen in a very long time.

Speaker Change: Announced today with driving good execution through that pipeline as people work through these issues that they are grappling with in the broader macro.

Josh Huff: So maybe if you could just dig into some of those investments that you're making throughout the year and maybe give us a little bit of additional color and the cadence of the margin profile for the rest of the year, that would be great. Yeah, certainly, Erin. Good question. We're pleased with Q1, specifically the gross margin highlight. And as mentioned, there's about 100 basis points there, sort of beyond what we would consider to be the run rate rest of year. Also, just a reminder, we have Fusion in Q2. It's a really strong event, a big event that requires investment for us typically about one and a half to $2 million.

Speaker Change: Yes, I think we have I actually said.

Speaker Change: I have every confidence in our team's ability to execute and it's really up to us and that will drive that execution in Q.

Speaker Change: Task Force.

Speaker Change: State University of New York.

Speaker Change: Around.

Speaker Change: Driving changes to the curriculum workforce escalating.

Speaker Change: Q2, Q3, Q4 to get this growth engine fired fired up in a bigger way.

Speaker Change: And a number of other different initiatives.

Speaker Change: Very similar to what you saw announced at Ohio State.

Speaker Change: Alright, thanks for that color I'll pass the line.

Speaker Change: Youll see hopefully all universities and colleges embrace the same type of thinking in terms of embedding AI skill sets into every discipline across all the programs that they are offering.

Speaker Change: Yes, Doug maybe one other point just to add in the conversations with clients. It's not just modernizing their learning platform. That's at the heart of the conversation.

Speaker Change: And that will lead to AI being embraced as a core part of the workflow for building. These learning experience is assessing tutoring and.

Speaker Change: Also leveraging.

Speaker Change: Some of the new technologies that we built whether it's cleaner bus with H E. R. Lumi to really provide a better educational experience for students as youre going through moments of austerity as well too. So how do we drive efficiency and productivity gains for faculty while at the same time, improving educational outcomes that seems to be why our pipeline is building.

Josh Huff: And then I think the last point, probably stating the obvious a bit here, but it's a dynamic macro. Specifically, foreign exchange rates have been moving around quite a bit. If we look at Q1, bottom to top, there was a 500 basis point swing within the 90 days. And for us, we know foreign exchange can have an impact on our reported performance. And so for us, evaluating those various factors, we decided to maintain our guidance for the rest of the year and certainly pleased with our progress so far against that plan. Thank you. That's helpful cover.

Speaker Change: And you name it.

Speaker Change: So very excited about this potential lumi is well positioned to support our clients in that endeavor.

Speaker Change: And the efficacy studies that were seeing now come back from working with clients to test this technology and to see what the impact is has been nothing short of breathtaking.

Speaker Change: So quickly.

Speaker Change: Yeah.

Speaker Change: I appreciate that.

Speaker Change: Dramatically, reducing cost and the development of courses while at the same time lifting retention lifting engagement and.

Speaker Change: Thank you.

Speaker Change: We have Erin <unk> with CIBC. Please go ahead.

Speaker Change: And lifting outcomes for students the winning combination.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Hi, good morning, Thanks for taking my question.

Speaker Change: Thank you that's helpful color there and then I just want to switch gears and go back to the profitability. So very strong in the quarter was 17, 6% adjusted EBITDA margin in every other question touched on that gross margin profile, it's great to see.

Speaker Change: Maybe just a question on AI and mandates kind of in response to your last comment there. There was a headline last week with Ohio State University launched in AI <unk> initiative to embed AI into its core undergrad requirements.

Paul Treiber: Your next question comes from Paul Treiber with RBC Capital Mines. Oh, thanks so much and good morning.

Paul Treiber: Just a question on the pipeline, your comment about the pipeline build, is a mix skewed to either the US or international? And then just given, you know, the lower conversion rates in the in the US over the last quarter or so, are you getting feedback from from clients, you know, when they do come in the pipeline, if they do anticipate going ahead with deployments, even in this environment? Great, great questions, Paul. So first of all, I would say we're not seeing less conversion rate, we're just seeing elongated process. So, you know, I have every expectation that the folks that are coming into the pipeline will convert.

Speaker Change: So have you seen other AI mandate quite the.

Speaker Change: And you maintained your guidance correct.

Speaker Change: Cut it out across your customer base or new prospects.

Speaker Change: Year at 15% adjusted EBITDA, but maybe if you could just dig into some of those investments that you're making throughout the year and maybe give us a little bit additional color on the cadence.

Speaker Change: Do you see something like that Hasnt been driving demand for products like <unk>.

Speaker Change: Yes, I think we have I actually sat on NII task for us get at the State University of New York.

Speaker Change: The margin profile for the rest of the year that would be great.

Speaker Change: Yes, certainly erinn. Good question, we're pleased with Q1, specifically the gross margin highlight and as mentioned there is about 100 basis points, there sort of beyond what we would consider to be the run rate rest of the year.

Speaker Change: Around.

Speaker Change: Driving changes to the curriculum workforce escalating.

Speaker Change: And a number of other different initiatives.

Speaker Change: Very similar to what you saw announced at Ohio State.

Speaker Change: You will see hopefully all universities and colleges embraced the same type of thinking in terms of embedding AI skill sets into every discipline across all the programs that they are offering.

Speaker Change: Also just a reminder, we have fusion in Q2, it's a really strong events.

Speaker Change: <unk> event that requires investment for us typically about one $5 million to $2 million.

Speaker Change: And that will lead to AI being embraced us.

John Baker: You know, I don't see that going away. I think it's just, they've got to grapple with how to tackle all these other changes that are happening on the campuses before they put in place the system. But the desire to put in place a modern learning platform as AI-first is very strong. And so when you look at the details underneath our pipeline, we're seeing almost every region slash market that we're competing in outperforming right now. There's a, you know, I've not seen this in a long time in terms of the pipe generation overperforming for this number of quarters.

Speaker Change: And then I think the last point, probably stating the obvious a bit here, but it's a dynamic macro specifically foreign exchange rates have.

Speaker Change: A core part of the workflow for building these learning experiences assessing tutoring immune.

Speaker Change: And you name it.

Speaker Change: <unk> been moving around quite a bit if we look at Q1 bottom to top there was a 500 basis points swing within the 90 days.

Speaker Change: So very excited about this potential lumi is well positioned to support our clients in that endeavor.

Speaker Change: And for US we know foreign exchange can have an impact on our reported performance and so for us evaluating those those various factors.

Speaker Change: The efficacy studies that were seeing now come back from working with clients to test this technology and to see what the impact is has been nothing short of breathtaking.

Speaker Change: We decided to maintain our guidance for the rest of the year and certainly pleased with with our progress so far against that plan.

Speaker Change: Dramatically, reducing cost and the development of courses while at the same time lifting retention lifting engagement and lifting outcomes for students the winning combination.

John Baker: We now need to start to translate that, to your point, into on deals. And it's just going to take some time to actually go through that execution, given the current macro. You know, we're still seeing our key volume still muted. But if you look at the last month or so, we've seen a slight uptick year over year. And we're tracking relatively well to plan. So I don't anticipate, you know, much of a challenge as we work at, you know, converting these folks that are in the pipeline to becoming very successful clients over the course of the next few quarters.

Speaker Change: Thank you that's helpful color offline.

Speaker Change: Thank you that's helpful color there and then I just want to switch gears and go back to the profitability. So.

Speaker Change: Your next question comes from Paul <unk> with RBC capital markets.

Speaker Change: Very strong in the quarter of 17, 6% adjusted EBITDA margin in every other question touched on that gross margin profile.

Paul: Hello, Thanks, very much and good morning.

Speaker Change: A question on the pipeline and your comment about the pipeline build is the mix skewed to either the U S or international.

Speaker Change: See you.

Speaker Change: You maintained your guidance.

Speaker Change: The year of 15% adjusted EBITDA, but maybe if you could just dig into some of those investments that you're making throughout the year and maybe give us a little bit additional color on the key indicator.

Speaker Change: And then just given the lower conversion rates in the U S over the last quarter or so are you getting feedback from from clients when they do come in the pipeline.

Speaker Change: <unk> profile for the rest of the year that would be great.

Speaker Change: Yeah, certainly Eric Good question, Ed We're pleased with Q1, specifically the gross margin highlight and as mentioned, there's about 100 basis points.

Speaker Change: Do you anticipate going ahead with deployments even in this environment.

John Baker: Thanks, that's helpful. And then in terms of the deals in the pipeline, that the rationale that you're getting from customers, is it primarily on upgrading legacy systems to the cloud? Is it about, you know, the AI opportunity to improve learning? Or is it also related to like AI Productivity that's driving some of the interest in the pipeline. Right now, it's just traditional upgrading of legacy vendors to a more modern learning platform. We're only really now leaning into our AI narrative. And I think, you know, clearly we're having some of those conversations with folks, but the broad pipeline has been generated based on traditional messages that have gone out.

Speaker Change: Great Great questions. Paul So first of all I would say we're not seeing.

Speaker Change: There sort of beyond what we would consider to be the run rate rest of year.

Speaker Change: Less conversion rate, we're just seeing elongated process. So.

Speaker Change: Also just a reminder, we have fusion in Q2.

Speaker Change: I have every expectation that the folks that are coming into the pipeline will convert.

Speaker Change: Really strong events.

Speaker Change: A big event that requires investment for us typically about one $5 million to $2 million.

Speaker Change: I don't see that going away I think it's just they've got to grapple with how to tackle all the other changes that are happening on the campuses.

Speaker Change: And then I think the last point, probably stating the obvious a bit here, but it's a dynamic macro specifically foreign exchange rates.

Speaker Change: Before they put in place the system, but the desire to put in place a modern learning platform is AI first is very strong.

Speaker Change: <unk> been moving around quite a bit if we look at Q1 bottom to top there was a 500 basis points swing within the 90 days.

Speaker Change: And so when you look at.

Speaker Change: The details underneath our pipeline we are seeing in almost every region slash market that we're competing in <unk>.

Speaker Change: For Us we know foreign exchange can have an impact on our reported performance and so for us evaluating those those various factors.

Speaker Change: Outperforming right now there is a.

Speaker Change: I've not seen this in a long time in terms of the pipe generation over performing.

John Baker: I do think AI first, that leads to better educational outcomes and a better experience for faculty, will continue to accelerate pipeline generation, which will continue to help us accelerate growth. I personally think it isn't showing up yet in RFPs, but I personally think it'll have a huge impact, bigger than cloud in terms of a disruptive force in our space to drive change. I can't imagine you're going to want to be at a university that's not using an AI first experience to help you generate questions automatically, to help you build content, help you translate that content, help you close capture the content.

Speaker Change: We decided to maintain our guidance for the rest of the year and certainly pleased with with our progress so far against that plan.

Speaker Change: For this number of quarters, we now need to start to translate that to your point into deals and it's just going to take some time to actually go through that execution given the current macro.

Speaker Change: Thank you that's helpful color.

Speaker Change: We're still seeing RFP volume.

Speaker Change: Your next question comes from Paul <unk> with RBC capital markets.

Speaker Change: Muted, but if you look at the last month or so we've seen a slight uptick.

Paul: Hello, Thanks, very much and good morning, just a question.

Paul: On the pipeline and your comment about the pipeline build is the mix skewed to either the U S or international.

Speaker Change: Year over year.

Speaker Change: And we're tracking relatively well to plan so I don't anticipate.

Speaker Change: So much of a challenge as we as we as we work at converting these folks that are in the pipeline to becoming very successful clients over the course of the next few quarters.

Paul: And then just given the.

Paul: The lower conversion rates in the U S over the last quarter or so are you getting feedback from from clients when they do come in the pipeline. If they do anticipate going ahead with deployments even in this environment.

John Baker: It's just such a big productivity lift for anyone that's creating learning experiences. And then if you look at the student experiences that are coming next, it's going to be a very compelling offering to our clients to make that student experience as good as it possibly can be. So I do think this is going to be a big replacement wave for legacy vendors that have not embraced AI.

Speaker Change: Thanks, that's helpful and then in terms of the debt.

Speaker Change: The deals in the pipeline that the rationale that you're getting from customers.

Speaker Change: Great Great questions. Paul So first of all I would say we're not seeing.

Speaker Change: It primarily on upgrading legacy systems to the cloud is it is it about the AI opportunity to improve learning or is it also related to like AI improving.

Speaker Change: Less conversion rate, we're just seeing the elongated process. So.

John Baker: And just lastly, in light of the current environment, have you seen M&A valuations decline and would you consider taking advantage and making acquisitions at this time? We're certainly seeing a mix. Some companies' valuations have not seen any declines. If anything, we've seen them push up. In other cases, we've seen companies facing bankruptcy because no one's really looking to take on the risk of taking them on as an acquisition. So, it seems to be a bit more binary. Either folks are doing very well and they're commanding a bigger premium, and folks that are not doing well are hitting a wall.

Speaker Change: I have every expectation that the folks that are coming into the pipeline will convert.

Speaker Change: Productivity, that's driving some of that the interest in the pipeline.

Speaker Change:

Speaker Change: I don't see that going away I think it's just they've got a grapple with how to tackle all these other changes that are happening on the campuses.

Speaker Change: Right now it's just traditional.

Speaker Change: Grading of legacy vendors to a more modern learning platform, we're only really now leaning into our AI narrative.

Speaker Change: Before they put in place the system, but the desire to put in place a modern warning platform. Its AI first is very strong.

Speaker Change: And I think clearly we are having some of those conversations with folks, but the broad pipeline has been generated based upon traditional messages that have gone out.

Speaker Change: And so when you look at.

Speaker Change: The details underneath our pipeline were seeing almost every region slash market that we're competing in.

Speaker Change: I do think AI is one that leads to better educational outcomes.

Speaker Change: Outperforming right now there is.

Speaker Change: I've not seen this in a long time in terms of the pipe generation over performing.

Speaker Change: Better experience for faculty.

Speaker Change: We will continue to accelerate pipeline generation, which will continue to help us accelerate growth.

Speaker Change: For this number of quarters, we now need to start to translate that to your point into one deals and it's just going to take some time to actually go through that execution given the current macro.

John Baker: That said, we're sticking to our plans in terms of trying to find the ones that have great value, high impact in terms of our ability to grow faster, solve really important problems for our clients, contribute to our gross margin, profitability profile, things that fit our strategy, if you will. And we're seeing a good, healthy pipeline for companies that look like that as well, too, at this stage.

Speaker Change: Personally I think.

Speaker Change: It isn't showing up yet in rfps, but I personally think it will it will have a huge impact bigger than cloud in terms of a disruptive force in our space to drive change I can't imagine you don't want to be at a university that is not using an AI first experience to help you generate questions automatically to help you build content help you translate that Colin.

Speaker Change: We're still seeing RFP volume.

Speaker Change: Muted, but if you look at the last month or so we've seen a slight uptick.

Speaker Change: Year over year.

Speaker Change: And we're tracking relatively well to plan so I don't.

Speaker Change: <unk> for Q close capture the content.

Speaker Change: Don't anticipate.

Unknown Executive: Thanks for taking the question. Thank you.

Speaker Change: Much of a challenge as we as we as we work at converting these folks that are in the pipeline to becoming very successful clients over the course of the next few quarters.

Speaker Change: Just such a big productivity lift for anyone that's creating learning experiences.

Thanos Moschopoulos: We now have a question from Thanos Moschopoulos with BMO Capital Markets on the line. Hi, good morning. Um, just the comment on FX, obviously, that's a big swing. Just to clarify, does FX influence the software growth margin line or not materially? It has a bit of an impact, but no, not materially, not a driver as much as the other themes I mentioned.

Speaker Change: And then if you look at the student experiences that are coming next.

Speaker Change: Is going to be a very compelling offering to our clients to make that student experience as good as it possibly can be so.

Speaker Change: Thanks, that's helpful and then in terms of the debt.

Speaker Change: The deals in the pipeline that the rationale.

Speaker Change: I do think this is going to be a big replacement wave four legacy vendors that have not embraced AI.

Speaker Change: Youre getting from from customers.

Speaker Change: Primarily on upgrading legacy systems to the cloud is it is it about the AI opportunity to improve learning more as it also related to like AI improving.

Speaker Change: And then just lastly, just in light of the current environment have you seen M&A valuations decline and would you consider taking advantage and making acquisitions at this time.

John Baker: Okay, John, on corporate specifically. your commentary regarding the pipeline. Does that apply for corporate as well? How has that market sort of evolved in recent weeks with all the macro uncertainties? Yeah, no, I think corporates followed a similar macro trend. You know, we're still seeing great pipeline generation, especially in our core market around training organizations. We're pushing harder into employee learning throughout the course of this year. We expect that to continue to build in terms of pipeline, but many companies went through a similar quick reset heading into this new macro environment. But as they've gone through that, you know, they're now looking for a better learning platform to deliver improved experiences and results for their company or for their membership, if you will.

Speaker Change: Productivity, that's driving some of the interest in the pipeline.

Speaker Change: We're certainly seeing a mix.

Speaker Change: Right now it's just traditional.

Speaker Change: Southern company is.

Speaker Change: Valuations are have not seen any couple of Haynes.

Speaker Change: Upgrading of legacy vendors to a more modern learning platform for only really now leaning into our AI narrative.

Speaker Change: If anything we've seen a little pushup in other cases, we've seen companies facing bankruptcy because no one's really looking to take all the risk of taking them on as an acquisition.

Speaker Change: And I think clearly we are having in some of those conversations with folks, but the broad pipeline has been generated based upon traditional messages that have gone out.

Speaker Change: So that seems to be a bit more binary.

Speaker Change: I do think AI first that leads to better educational outcomes.

Speaker Change: Either folks who are doing very well and they are commanding a bigger premium.

Speaker Change: And the folks that are not doing well hitting a wall.

Speaker Change: Better experience for faculty will.

Speaker Change: We will continue to accelerate pipeline generation, which will continue to help us accelerate growth.

Speaker Change: That said, we are sticking to our plans in terms of trying to find the ones that have great value high impacts in terms of our ability to grow faster solve really important problems for our clients.

Speaker Change: Personally I think.

Speaker Change: It isn't showing up yet in rfps, but I personally think it'll it'll have a huge impact bigger than cloud in terms of a disruptive force in our space.

John Baker: And we're definitely well positioned to help them save money as they're building these high quality learning experiences, provide a better learning experience at the core that delivers, you know, better retention, better completion rates, better outcomes. And that's compelling for most companies today.

Speaker Change: Contribute to your gross margin profitability profile things that fit our strategy. If you will and we're seeing a good healthy pipeline for companies that look like that as well too at this stage.

Speaker Change: To drive change I can't imagine you're going to want to be at a university. That's not using an AI first experience to help you generate questions automatically to help you build content help you translate that content to help you close capture the content.

Speaker Change: Thanks for taking the questions.

Speaker Change: Thank you.

Speaker Change: Just such a big productivity lift for anyone that's creating learning experiences.

Unknown Executive: Great.

Unknown Executive: And H5P, you're approaching the one year anniversary. So maybe just an update in terms of how that integration has progressed. And you've also acquired some new customer relationships as part of that. Any comments on whether that's contributed to some of the pipeline as well for Crossout? Yeah, it's helpful.

Speaker Change: Now have a question from centers most of the pointless.

Speaker Change: BMO capital markets from the line.

Speaker Change: And then if you look at the student experiences that are coming next it's going to be a very compelling offering to our clients to make that student experience as good as it possibly can be so.

Speaker Change: Hi, good morning.

Speaker Change: The comment on FX, obviously, you've got some big swings to clarify does FX influence the software gross margin line or not materially.

Speaker Change: I do think this is going to be a big replacement wave four legacy vendors that have not embraced AI.

John Baker: You know, we're working hard to actually put together an H5P mini event at our Fusion conference. You know, we've seen now where we've done calls with H5Ps clients, them expressing interest post call in looking at Brightspace and vice versa. And I do think that cross-sell motion is something that's relatively new for us. But we'll continue to lean into it to drive faster growth for both H5P and for D2L. And we're certainly selling more H5P. You know, I think one of the nice things that we saw as H5P came on is a continued acceleration of growth for H5P.

Speaker Change: It has a bit of an impact.

Speaker Change: And then just lastly, just in light of the current environment have you seen M&A valuations decline and would you consider taking advantage and making acquisitions at this time.

Speaker Change: But no not not materially not not a driver as much as the other things I mentioned.

Speaker Change: Okay.

John Baker: John on corporate specifically.

Speaker Change: Your commentary regarding the pipeline does that imply for corporate as well how does that market sort of evolved in recent weeks with all the macro uncertainty.

Speaker Change: We're certainly seeing a mix.

Speaker Change: Southern company is.

Speaker Change: Valuations are I have not seen any declines.

John Baker: Yes, I think corporates, followed a similar macro trend.

Speaker Change: If anything we've seen in the local shop in other cases, we've seen companies facing bankruptcy because no one's really looking to take on the risk of taking them on an acquisition.

John Baker: We're still seeing great pipeline generation, especially in our core market around training organizations.

John Baker: We're pushing harder into employee learning throughout the course of this year.

Speaker Change: That seems to be a bit more binary.

John Baker: We expect that to continue to build in terms of the pipeline.

Speaker Change: Either folks are doing very well and they are commanding a bigger premium.

John Baker: It also became part of our Creator Plus package, which has allowed us to drive better adoption of Creator Plus. And that cross-sell of being able to drag along the learning platform, if you will, with the H5P users is starting to show early promise in building pipeline for us. You have to remember, when you have a learning platform that builds more engaging learning experiences, it really helps students learn in a more efficient way, so they spend less time having to learn. They're able to retain that knowledge for longer, they're able to score higher on exams, get better grades, and that persistence, them completing those courses, enables the universities and colleges or schools or even companies to retain that revenue that they would normally otherwise see vaporize as they drop out.

John Baker: But many companies went through a similar quick reset heading into this new macro environment, but as they've gone through that.

Speaker Change: And the folks that are not thinking about all hitting a wall.

John Baker: They are now looking for a better learning platforms deliver improved experiences and results for their company or for their membership if you will.

Speaker Change: That said, we're sticking to our plans in terms of trying to find the ones that have great value high impact in terms of our ability to grow faster solve really important problems for our clients.

John Baker: And we are definitely well positioned to help them save money as they're building. These high quality learning experiences provided a better learning experience at the core.

Speaker Change: Contributed to our gross margin profitability profile things that fit our strategy. If you will and we're seeing a good healthy pipeline for the company as it looked like that as well too at this stage.

John Baker: <unk> delivers better retention better completion rates better outcomes.

John Baker: And that's compelling for most companies today.

Speaker Change: Okay. Thanks for taking the questions.

John Baker: Great.

John Baker: And <unk>, you're approaching when you anniversary, maybe just an update in terms of.

Speaker Change: Thank you.

Speaker Change: Now have a question from centers most of Lewis with <unk>.

John Baker: How that integration has progressed and.

Speaker Change: Capital markets from the lines.

John Baker: <unk> also hired some new customer relationships as part of that.

Speaker Change: Hi, good morning.

Speaker Change: Just.

John Baker: Any comments on whether that contributed to some of the pipeline as well for cross sell.

Speaker Change: The comment on FX, obviously, you've got some big swings to clarify does FX influence the software gross margin line or not materially.

John Baker: And so, it's very important for us to make sure that we continue to lean in on Caterpots and HIP to continue to build a world-class interactive learning experience.

John Baker: Yes, it's helpful.

John Baker: We're working hard to actually put together an H E mini event at our fusion conference.

Speaker Change: It has a bit of an impact, but no not not materially not not a driver as much as the other themes I mentioned.

Unknown Executive: Great. Thanks, everyone.

John Baker: No we've seen now where we've done calls with Hcp's clients that mean expressing interest post call looking at bright space and vice versa.

John Shao: Thank you. We have John Shao with National Bank. Please go ahead when you're ready.

Speaker Change: Okay.

John Baker: John on corporate specifically.

Speaker Change: Your commentary regarding the pipeline does that imply for corporate as well how does that market sort of evolved in recent weeks with other macro uncertainty.

John Baker: Good morning. Thanks for taking my question. Maybe start with your notable IEEE win.

John Baker: And I do think that cross sell motion is something that's relatively new for us.

John Baker: Given this is a global organization, could you maybe talk about your client scale, the deployment, maybe their selection process and criteria? Yeah, no, I will. Yeah, we're hoping that that one grows significantly over time. But like many other training organizations that support a membership, the key is building a great learning experience for their members. Because in many cases, they're paying for these courses, a significant membership fee, and you want to create as much value as you possibly can. And so there are going to be some that start off small and grow over time and others that might start off with a few hundred thousand members and continue to expand with a good learning experience.

John Baker: But we will continue to lean into it too to drive faster growth for both <unk> for <unk>.

Speaker Change: Yes.

Speaker Change: Corporates, followed a similar macro trend.

John Baker: And we're certainly selling more <unk> I think one of the nice things that we saw as HIV came on as a continued acceleration of growth for HIV. It also became part of our creator plus package, which has allowed us to to drive better adoption of <unk> plus anti.

Speaker Change: Still seeing great pipeline generation, especially in our core market around training organizations.

Speaker Change: We're pushing harder into employee learning through the course of this year.

Speaker Change: We expect that to continue to build in terms of the pipeline.

Speaker Change: But many companies went through a similar quick reset heading into this new macro environment, but as they've gone through that.

John Baker: And that cross sell motion of being able to drag along the learning platform. If you will stage by the users is starting to show early progress in building pipeline for us.

Speaker Change: They are now looking for a better learning platform to deliver improved experiences and results for their company or for their membership if you will.

John Baker: You have to remember when you have a learning platform that builds more engaging learning experiences.

Speaker Change: And we are definitely well positioned to help them save money as they're building. These high quality learning experiences provided a better learning experience at the core of that.

John Baker: It really helps students learn in a more efficient way so they spend less time having to learn.

John Baker: You also see things like course merchants playing a role here where, you know, having a catalog to make it easier for them to sell these courses to their members is also important. You're seeing competency-based education, which was very popular with a lot of professional schools also playing very well into corporate, where they define here are the CIPD, or basically you're tracking professional credits or professional memberships like engineering in particular, or maybe accountants in another case. And so these types of learning experiences are made very easy in our platform. And Lumi is making it easier to create those experiences.

John Baker: They are able to retain that knowledge for longer payable score higher on exams get better grades.

Speaker Change: Delivers better retention better completion rates better outcomes.

Speaker Change: And that's compelling for for most companies today.

John Baker: And that persistence.

Speaker Change: Alright.

John Baker: Completing those courses enables the universities and colleges are schools or even companies.

Speaker Change: And <unk> your question about when you anniversary. So maybe just an update in terms of.

John Baker: To retain that revenue that they would normally otherwise he vaporize as they drop out.

Speaker Change: How that integration has progressed and.

Speaker Change: <unk> also fired some new customer relationships as part of that.

John Baker: And so it's very important for us to make sure that we continue to lean in on greater Boston HIV to to continue to build a world class interactive learning experience.

Speaker Change: Any comments on whether that contributed to some of the pipeline as well for cross sell.

Speaker Change: Yes, it's helpful.

John Baker: Great. Thanks, I'll pass along.

Speaker Change: We're working hard to actually put together an H E mini event at our fusion conference.

Speaker Change: Thanks Dennis.

Speaker Change: No we've seen now where we've done calls with Hcp's clients that makes pressing interests both call looking at bright space and vice versa.

Speaker Change: Okay.

Speaker Change: We have John <unk> with National Bank. Please go ahead, when you're ready.

John Baker: So instead of having to tag all of these competencies or expectations or skills, you know, yourself, we now have AI recommending how to link these things together, such that you can automatically create that knowledge map very quickly and very easily. Those are some of the many things that these organizations are looking at.

Speaker Change: Good morning, Thanks for taking my question, maybe start with your notable <unk> Triple E. When given this is a global organizations could you maybe talk about your clients scale that appointment maybe their selection process and criteria.

Speaker Change: And I do think that cross sell motion is something that's relatively new for us.

Speaker Change: We will continue to lean into it to drive faster growth for both <unk> and for <unk>.

Speaker Change: And we're certainly selling more <unk> I think one of the nice things that we saw as <unk> came on as a continued acceleration of growth for HIV. It also became part of our cleaner plus package, which has allowed us to to drive better adoption of Peter plus anti.

Speaker Change: Yes no.

Unknown Executive: Thanks, I appreciate the colors.

Speaker Change: Yes, we're hoping that that will grow significantly over time.

John Baker: John, could you also talk about your client's exposure to the international student going to the U.S. given their visa situation? I assume this is still part of your commentary on the market volatility, right? Yeah, very much so. Not just in the U.S., but we've seen international student impacts in Canada, Australia, and other markets globally. And so we're mindful of that.

Speaker Change: Like many other training organizations that support a membership.

Speaker Change: The key is building a great learning experience for their members because in many cases they are paying for these courses are significant membership fee.

Speaker Change: And that cross sell motion of being able to drag along the learning platform. If you will with HIV users is starting to show early promise in building pipeline for us.

Speaker Change: And you want to create as much value as it possibly can.

Speaker Change: And so there are going to be some that start off small and grow over time and others that might start off with a few hundred thousand members and.

Speaker Change: You have to remember when you have a learning platform that builds more engaging learning experiences.

Josh Huff: Now, you know, typically we're pricing these things as an FTE model or full-time equivalency. So the percentage basis for the individual clients is not usually that big of an impact. And on the whole, we're seeing usage going up for clients year over year. And so, you know, while it is having an impact for clients, it's not having as big of an impact as probably folks would imagine. That makes sense.

Speaker Change: And continue to expand with <unk> with a good learning experience.

Speaker Change: It really helps students learn and a more efficient way so they spend less time having to learn.

Speaker Change: You also see things like course merchant playing a role here, we're having a catalog to make it easy for them to sell these courses to their members is also important.

Speaker Change: They are able to retain that knowledge for longer payables score higher on exams and better grades.

Speaker Change: And that persistence.

Speaker Change: Youre seeing competency based.

Speaker Change: Them completing those courses enables the universities and colleges are schools or even companies.

Speaker Change: Education, which was very popular with a lot of professional schools also playing very well into corporate or they define here as a learning outcomes. They demonstrate mastery of those outcomes that really covers awful lot of CIP or basically you're tracking it professional credits.

Speaker Change: To retain that revenue that they would normally otherwise he vaporize as they drop out.

Josh Huff: And maybe one last question to Josh. Could you help us quantify your user conference costs this year on your OPACs? Is this a bit higher this year given that last year was in Toronto? Yeah, I wouldn't suggest it's sort of a year over year drastic change, I'd say it's more in line with what we've communicated in the past, which I think was something in the range of 1.5 to 2 million.

Speaker Change: And so it's very important for us to make sure that we continue to lean in on greater Boston HIV to to continue to build a world class interactive learning experience.

Speaker Change: For professional memberships like engineering in particular or where maybe the accountants in another case.

Speaker Change: Great. Thanks, I'll pass the line.

Speaker Change: And so these types of learning experiences are made very easy in our platform.

Speaker Change: Thanks very much.

Speaker Change: And lumi, making it easier to create those experiences so instead of having to tag all of these competencies are expectations our skills.

Speaker Change: Okay.

John Baker: We have John <unk> with National Bank. Please go ahead, when you're ready.

Speaker Change: Good morning, Thanks for taking my question, maybe just start with Gordon notable I Triple win given this is a global organizations could you maybe talk about your clients scale of deployment, maybe their selection process and criteria.

Unknown Executive: Okay, thanks. I'll pop the line.

Speaker Change: Yourself, we now have AI recommending how to link these things together such that you can automatically create that knowledge back very quickly and very easily but those are some of the many things that these organizations are looking at.

Brian Peterson: Thank you. We have Brian Peterson with Raymond James. Hey guys, thanks for taking the questions.

Brian Peterson: Just one for me. John, I know you mentioned that there's some elongated sales cycles in North America. You've mentioned that for a few quarters now. I'm curious, have customers indicated that they're looking to make decisions in that typical decision period over the summer? Or is it possible that these decisions could get pushed into 2026? Any color there? Thanks, guys.

Speaker Change: Okay. Thanks I appreciate the colors John could you also talk about your client exposure to the international students going to the U S. Given their visa situations I assume is still part of your commentary on the market volatility right.

Speaker Change: Yes.

Speaker Change: Yes, we're hoping that one grow significantly over time.

Speaker Change: Unlike many other training organizations that support a membership.

Speaker Change: The key is building a great learning experience for their members because in many cases they are paying for these courses.

Speaker Change: Yes very.

Speaker Change: Very much so not just in the U S book, we've seen international student impacts in Canada, Australia, and other markets global globally, and so we're mindful of that.

Speaker Change: <unk> membership fee.

John Baker: That's a good question. I'm sure some of the decisions will get pushed into next year. But the folks that I'm engaging with, which may be a little bit further down the pipeline, are looking to make decisions this summer, some in the fall, some shortly. So I don't... you know, what would have been like a decision that would have been made in Q1 is maybe being made in Q2 or Q3. I don't see a lot of them slipping from the Q1 period into Q4, at least not at this stage. And I think folks just really needed to get through that budget cycle with what, you know, July 1st is a typical start to budget year for many of our clients.

Speaker Change: And you want to create as much value as we possibly can.

Speaker Change: And so they're going to be some that start off small and grow over time and others that might start off with a few hundred thousand members.

Speaker Change: Typically we're pricing these things as an FTE model or full time equivalency, so that on a.

Speaker Change: To expand with FICO with a good learning experience.

Speaker Change: A percentage basis for the individual clients is not usually that big of an impact and on the whole, we're seeing usage going up for clients year over year.

Speaker Change: You also see things like of course merchant playing a role here, we're having a catalog to make it easier for them to sell these courses to their members is also important.

Speaker Change: And so while it is having an impact for clients is not having as big of an impact it.

Speaker Change: Youre seeing competency based.

Speaker Change: Probably folks would imagine.

Speaker Change: Education, which was very popular with a lot of professional schools also playing very well into corporate or they define here the learning outcomes. They demonstrate mastery of those outcomes that really covers awful lot of CIP or basically you're tracking of a professional credits.

Speaker Change: Okay.

Speaker Change: So maybe one last question too Josh could you help us quantify of your user conference costs. This year on your Opex.

Speaker Change: Is this a bit higher this year given that they were last year was in trauma.

Speaker Change: For professional memberships like engineering in particular or where maybe the accountants in another case.

John Baker: And so I hope, but we've not proven this yet, that post-July 1st, things start to return a little bit more towards normal. But we'll see as we get to our Fusion Conference this year.

Speaker Change: Yes, I wouldn't suggest it's sort of a year over year, a drastic change I would say it's more in line with what we've communicated in the past, which I think was something in the range of one $5 million to $2 million.

Speaker Change: And so these types of learning experiences are made very easy in our platform.

Speaker Change: And lemme, making it easier to create those experiences so instead of having to tag all of these competencies are expectations are skills.

Unknown Executive: Great.

Unknown Executive: Thanks, John. Thank you, Brian.

Speaker Change: Okay. Thanks, a copper mine.

Speaker Change: Okay.

Speaker Change: You yourself, we now all have AI recommending how to link these things together such that you cannot amass they create that knowledge that very quickly and very easily but those are some of the many things that these organizations are looking at.

Speaker Change: Thank you.

Unknown Executive: Just a quick reminder that I stop once you ask any questions.

Speaker Change: Half, Brian Peterson with Raymond James.

Suthan Sukumar: And we have Suthan Sukumar with Steve Faulkner. Please go ahead. Hey guys, good morning.

Speaker Change: Hey, guys. Thanks for taking the question just one from me John I know you mentioned that Theres. Some elongated sales cycles in North America, you mentioned that for many quarters now.

Speaker Change: Okay. Thanks I appreciate the colors John could you also talk about your client exposure to the international students going to the U S. Given their visa situation I assume is still part of your commentary on the market volatility.

Half: Curious have customers indicated that they were looking to make decisions in that typical decision period over this summer or is it possible that these decisions could get pushed into 2026 any color. There. Thanks guys.

John Baker: I want to touch on the US higher ed market with respect to the new business versus expansion notion is curious is the slowdown impacting both or might might expansions be progressing better than than expected? I think the macro is impacting both the new logos as well as expansion because I can imagine if you're a university or a school or a company having to deal with a change, you first of all deal with the change and then you can progress the projects you need as a priority. I'll underscore that our learning platform has never mattered more to these clients because as they go through a challenge, they need to continue to invest in things that are going to improve the student's outcomes while at the same time they may be making other cuts elsewhere.

Speaker Change: Yeah.

Speaker Change: Yes very much.

Speaker Change: So not just in the U S, but we've seen international student impacts in Canada, Australia, and other markets global globally and so.

Speaker Change: Oh, that's a good question I am sure some of the decisions will get pushed into next year.

Speaker Change: But.

Speaker Change: So that engaging with which may be a little bit further down the pipeline.

Speaker Change: Mindful of that.

Speaker Change: Typically we're pricing these things as an FTE model or full time equivalency. So the number.

Speaker Change: Are looking to make decisions this summer.

Speaker Change: Some in the fall.

Speaker Change: Percentage basis for the individual clients its not usually that big of an impact and on the whole, we're seeing usage going up for clients year over year.

Speaker Change: Some shortly so.

Speaker Change: I don't want.

Speaker Change: What would have been like a decision that would have been made in Q1 as maybe being made in Q2 or Q3.

Speaker Change: And so while it is having an impact for clients, it's not having as big of an impact.

Speaker Change: Don't see a lot of them slipping from Q1 period into Q4 at least on at this stage.

Speaker Change: Probably folks would imagine.

Speaker Change: And I think folks just really needed to get through that budget cycle.

Speaker Change: Okay that makes sense and maybe one last question too Josh could you help us quantify of your user conference costs. This year on your Opex.

Speaker Change: What what July versus a typical start to budget year for many of our clients.

John Baker: And so we're kind of in that nice zone where we can help them find new growth vectors with upskilling or workforce development at the same time as helping them drive efficiency with things like artificial intelligence to improve, you know, just take the number of hours it takes to build a course and cut it by half in some cases. And so if we can drive efficiency and improve outcomes, it's a good solution for a better ROI for our clients. You know, I just think there's a little bit more scrutiny going into reviewing these systems, just making sure that they're going to, you know, they're going to be well, well done over the course of the next few months.

Speaker Change: And so I hope.

Speaker Change: Is it a bit higher this year given that they were last year within trauma.

Speaker Change: We've proven this yet that post July one things start to return a little bit more towards normal.

Speaker Change: Yes, I wouldn't suggest that sort of a year over year, a drastic change I would say it's more in line with what we've communicated in the past, which I think was something in the range of one $5 million to $2 million.

Speaker Change: We will see as we get to a fusion conference this year.

Speaker Change: Great. Thanks, John.

Speaker Change: Yes, Thank you Brian.

Speaker Change: Okay. Thanks, a copper line.

Speaker Change: Just a quick reminder, that star one to ask any questions.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: And we have the Seaton.

Speaker Change: Brian Peterson with Raymond James.

Speaker Change: Stifel.

Speaker Change: Please go ahead.

Speaker Change: Oh, Hey, guys. Thanks for taking the question just one from me John I know you mentioned that Theres. Some elongated sales cycles in North America, you mentioned that one of the quarters now I'm curious have customers indicated that they were looking to make decisions in that typical decision period over this summer or is it possible that these decisions could get push.

Speaker Change: Okay.

Speaker Change: Hey, guys good morning.

Speaker Change: I wanted to touch on the.

Unknown Executive: Got it. That's helpful.

Speaker Change: U S higher Ed market down with respect to the new business versus expansion motion is curious does the slowdown impacting both are Mike Mike expansions be progressing better than expected here.

Suthan Sukumar: And on the competitive landscape, how are you seeing peers respond to the slowdown, especially the big ones under private equity ownership? Anything notable there to call out? I think there's a number of public statements on one of our private equity-backed education competitors that's been struggling with the transition largely due to the increased interest rates attached to debt. But I'd say we're still learning how all of our private equity competitors are going to react to this new market. This is the one challenge with them private is that they don't report publicly every quarter. makes sense.

Speaker Change: Into 2026 any color there thanks guys.

Speaker Change: Okay.

Speaker Change: I think I think the macros I think both.

Speaker Change: Oh, that's a good question I am sure some of the decisions will get pushed into next year.

Speaker Change: The new logos as well as expansion.

Speaker Change: As you can imagine if you are.

Speaker Change: But the folks that are engaging with which may be a little bit further down the pipeline.

Speaker Change: A university or a school or a company having to deal with a change you first of all deal with the change and then you progress the projects that you need as a priority.

Speaker Change: Are looking to make decisions this summer some.

Speaker Change: Some in the fall.

Speaker Change: Some shortly so.

Speaker Change: Ill underscore that our learning platform has never mattered more to these clients because as they go through a challenge they need to continue to invest in things that are going to improve the students' outcomes.

Speaker Change: I don't want.

Speaker Change: What would have been like a decision that would have been made in Q1 as maybe being made in Q2 or Q3.

Speaker Change: Don't see a lot of them slipping from Q1 period into Q4 at least on at this stage.

Speaker Change: While at the same time, they may be making other cuts elsewhere.

Speaker Change: And I think folks just really needed to get through that budget cycle.

Speaker Change: And so we're kind of in that zone, where we could help them find new growth vectors with upscaling or workforce development at the same time is helping them drive efficiency with things like artificial intelligence to improve.

John Baker: Um, I also want to touch on corporate learning, you guys are still making continued progress on this front. Could you remind us on what some of your priorities are on the product innovation front and given that it sounds like your ideal customer profile is evolving to that more of a corporate learning customer, how is your go-to-market evolving here on the back of that, does that mean a bigger push on direct sales or might partners play a more important role? So, you're seeing us push on a number of different key growth levers. So, you know, the first one being, you know, continuing to double down on differentiation in our core markets with AI and Creator Plus and other things that are going to really drive improved educational experience, improves that ROI, makes adopting our learning platform a very clear strategy for a lot of universities, colleges, companies around the world that see an AI-first learning platform as the next evolution of the learning experience, very similar to how cloud was a replacement wave in the past.

Speaker Change: What what.

Speaker Change: July versus a typical start to budget year for many of our clients.

Speaker Change: And so I hope.

Speaker Change: Please that proven as yet that post July one things start to return a little bit more towards normal.

Speaker Change: Just take the number of hours it takes to build a course and cut by half in some cases and so if we can drive efficiency and improve outcomes. It's a good solution for a better ROI for our clients.

Speaker Change: But we'll see as we get to a fusion conference this year.

Speaker Change: Great. Thanks, Sean.

Speaker Change: Yes, Thank you Brian.

Speaker Change: I, just think there's a little bit more scrutiny going into reviews systems, just making sure.

Speaker Change: Just a quick reminder, that is star one to ask any questions.

Speaker Change: And we have the Seaton.

Speaker Change: That's the kind of they're going to be well focused on over the course of the next few months.

Speaker Change: With Stifel.

Speaker Change: Please go ahead.

Speaker Change: Okay.

Speaker Change: Hey, guys good morning.

Speaker Change: Got it Thats helpful.

Speaker Change: I wanted to touch on the.

Speaker Change: And on the competitive landscape.

Speaker Change: U S higher Ed market down with respect to the new business versus expansion motion is curious is the slowdown impacting both or might might.

Speaker Change: How are you how would you seeing peers.

Speaker Change: Fund to the slowdown.

Speaker Change: Especially the big ones under under private equity ownership anything notable there to call out.

Speaker Change: <unk> be progressing.

Speaker Change: Other than expected here.

Speaker Change: I think there's a number of public statements on one of our private equity backed corporate.

Speaker Change: I think I think the macros impacting both.

Speaker Change: The new logos as well as expansion.

Speaker Change: Education.

Speaker Change: Competitors.

Speaker Change: As you can imagine if you're I don't know.

Speaker Change: Been struggling with.

John Baker: So, that's a primary focus for us, and you'll see us continue to double down on that strategy in the months and year ahead. And then beyond that, we're also, you know, as you allude to, very focused on international growth as another key lever for us. There's no reason why, in many markets around the world, we can't become the number one player like we've become in the Netherlands or Singapore or Canada or other markets, Colombia now, where we have six of the top ten private universities now running on our platform. So, we want to continue to drive that both with a direct motion, where we've got sales reps themselves building these relationships, but also continuing to add the right channel partners where we work together to go after the opportunities in markets like South Africa or India or other markets globally.

Speaker Change: A university or a school or a company having to deal with a change due first of all deal with the change and then need to progress the projects that you need as a priority.

Speaker Change: In addition, largely due to the increased interest rates attached to that.

Speaker Change: But.

Speaker Change: I'd say.

Speaker Change: We're still learning how all of our private equity competitors are going to react to this new market, where this is the one challenge without being private.

Speaker Change: Ill underscore that our learning platform has never mattered more to these clients.

Speaker Change: Because as they go through a challenge they need to continue to invest in things that are going to improve as to the telecoms.

Speaker Change: They don't Ah report publicly every quarter.

Speaker Change: Yes.

Speaker Change: All at the same time, they may be making other cuts elsewhere.

Speaker Change: Sen.

Speaker Change: I also wanted to touch on corporate learning you guys, Rob you're still making.

Speaker Change: So we're kind of in that zone, where we can help them find new growth vectors with upscaling or or workforce development.

Speaker Change: Continued progress on this front could you remind us on what some of your priorities are on the product innovation front end given that your sons your ideal customer profile is evolving to that.

Speaker Change: At the same time is helping them drive efficiency with things like artificial intelligence to improve.

Speaker Change: More of a corporate learning customer how is your go to market evolving here is on the back of that is there going to be.

John Baker: And then the third is really around that corporate use case. So, you know, we've, I think, done a very good job in making sure that we meet the needs of training organizations. We'll continue to add new features to support them. But opening up that employee learning experience has been a little longer journey for us, but I'm actually quite excited about the roadmap that we have in the year ahead in terms of both integrating our learning platform into, you know, hundreds of other different HR and other systems that companies are using today, making that very easy and almost out of the box, as well as tackling a few other use cases that we needed to just make it easier for us to support these companies embracing the best possible learning experience.

Speaker Change: Does that mean, a bigger push on direct sales or might partners play a more important role here.

Speaker Change: I, just think there's a little bit more scrutiny going into review systems, just making sure.

Speaker Change: So youre seeing us push on a number of different key growth lever. So the first one being.

Speaker Change: That they kind of they are going to be well well have done over the course of the next few months.

Speaker Change: Continuing to double down on differentiation in our core markets.

Speaker Change: With AI and <unk>, plus and other things that are going to really drive improved educational experience improves.

Speaker Change: Got it Thats helpful.

Speaker Change: And on the competitive landscape.

Speaker Change: How are you how would you seeing peers.

Speaker Change: It improves at RLI adopt.

Speaker Change: Bond didn't slow down.

Speaker Change: Adopting our learning platform.

Speaker Change: Especially the big ones under under private equity ownership anything notable there to call out.

Speaker Change: A clear strategy for a lot of universities colleges companies around the world that see an AI first learning platform is the next evolution of our learning experience very similar to how cloud was replacing.

Speaker Change: I think there's a number of public statements on one of our private equity backed corporate.

John Baker: I think given the strength that we have in terms of content creation, the learning experience itself, better skills tracking with our outcomes module, all of these things create a really amazing learning experience. Once you're onboarded, we now need to just get rid of all the hurdles in terms of getting people through that initial integration and onboarding. And that's where the focus is right now in terms of driving that corporate lever for our growth engines for the future.

Speaker Change: A replacement wave in the past.

Speaker Change: Education.

Speaker Change: That's our primary focus for us and you'll see us continue to double down on our strategy and.

Speaker Change: Competitors, that's been struggling with the transition largely due to the increased interest rates attached to that.

Speaker Change: In the months of the year ahead.

Speaker Change: Then beyond that we're also.

Speaker Change: But.

Speaker Change: As you alluded to very focus on international growth is another key lever for us.

Speaker Change: I'd say.

Speaker Change: We're still learning how all of our private equity competitors are going to react to this new market, where the one challenge without being private.

Speaker Change: There is no reason why in many markets around the world. We can become the number one player like we've become in the Netherlands, or Singapore, or Canada, or other markets, Colombia, now where we are.

Speaker Change: Ah report publicly every quarter.

Speaker Change: Six of the top 10 private universities now running on our platform. So we want to continue to drive that both have the direct motion, where we've got sales reps themselves building. These relationships, but also continuing to add the right channel partners, where we worked together to go after the opportunities in markets like South Africa or India.

Unknown Executive: Thank you for taking my questions guys, I'll pass the line. Thank you, Suthan. Thank you.

Speaker Change: Yes that makes sense.

Speaker Change:

Speaker Change: I also wanted to touch on corporate learning you guys, Rob you're still making.

John Baker: I can confirm that does conclude the Q&A session and I would like to hand it back to John for some final closing comments. Thank you for joining us on our call today. We're looking forward to updating you following our Fusion Users Conference with our Q2 results. I hope to see some of you at the conference in Georgia this year. Thank you again for the support and have a great day, everyone.

Speaker Change: Continued progress on this front could you remind us on what some of your priorities are on the product innovation front end given that your it sounds like you cut your ideal customer profile is evolving to that.

Speaker Change: Our other markets globally.

Speaker Change: And then the third is really relevant corporate use case so I.

Speaker Change: More of a corporate learning customer how is your go to market evolving here is on the back of that as you know as theyre going to be.

Speaker Change: I think we've done a very good job in making sure that we meet the needs of training organizations will continue to add new features to support them.

Speaker Change: Does that mean, a bigger push on direct sales or my partners play a more important role here.

Unknown Executive: Thank you all for joining. I can confirm that does conclude today's call. Thank you all for your participation. You may now disconnect your lines.

Speaker Change: Opening up that employee learning experiences has been a little longer journey for us, but I would like to see quite excited about the roadmap that we have in the year ahead in terms of both integrating.

Speaker Change: So youre seeing us push on a number of different key growth lever. So the first one being.

Speaker Change: Continuing to double down on differentiation in our core markets.

Speaker Change: Learning platform into <unk>.

Speaker Change: Dozens if not hundreds of other different HR and other systems that companies are using today, making a very easy and almost out of the box.

Speaker Change: With.

Speaker Change: And creator plus and other things that are going to really drive improved educational experience improves at RLI.

Speaker Change: As well as tackling a few other use cases that we needed to just make it easier for us to support these companies embracing the best possible learning experience.

Speaker Change: Adopting our learning platform.

Speaker Change: Very clear strategy for a lot of universities colleges companies around the world that see an AI first learning platform is the next evolution of our learning experience very similar to how cloud was a.

Speaker Change: I think given the strength that we have in terms of content creation. The learning experience itself better skills tracking with our outcomes module all of these things create a really amazing learning experience. Once you are on boarded we now need to just get rid of all the hurdles in terms of getting people to that initial integration and onboarding and Thats where the.

Speaker Change: Replacement wave in the past so that's a primary focus for us and you'll see us continue to double down on that strategy.

Speaker Change: In the months of the year ahead.

Speaker Change: Then beyond that we're also.

Speaker Change: As you alluded to very focus on international growth is another key lever for us.

Speaker Change: Focus is right now in terms of driving that corporate lever for our growth engine for the future.

Speaker Change: There's no reason why in many markets around the world, we can't become the number one player like we've become in the Netherlands, Singapore, or Canada or other markets, Colombia, now, where we have six of the top 10 private universities now running on our platform. So we want to continue to drive that both have the direct motion, where we've got sales reps themselves.

Speaker Change: Okay great.

Speaker Change: Thank you for taking my questions guys best of luck.

Speaker Change: Thank you Susan.

Speaker Change: Thank you I can confirm that does conclude the Q&A session and I would like to hand, it back to John listen final closing comments.

Speaker Change: Building these relationships, but also continuing to add the right channel partners, where we worked together to go after the opportunities in markets like South Africa, or India or other markets globally.

Speaker Change: Thank you for joining us on our call today, we're looking forward to updating you following our fusion users conference with our Q2 results I hope to see so many of you at the conference in Georgia. This year. Thank you again for the support and have a great day everyone.

Speaker Change: And then the third is really rather that corporate use case so.

Speaker Change: I think done a very good job in making sure that we meet the needs of training organizations will continue to add new features to support them.

Speaker Change: Thank you for joining our conference and that does conclude today's call. Thank you for your participation you may now disconnect your line.

Speaker Change: But opening up an employee learning experiences has been a little longer journey for us, but I'd like to <unk> quite excited about the roadmap that we have in the year ahead in terms of both integrating our learning platform into dozens if not hundreds of other different HR and other systems that companies are using today, making that very easy.

Speaker Change: Almost out of the box.

Speaker Change: As well as tackling a few other use cases that are needed to just make it easier for us to support. These companies are embracing the best possible learning experience.

Speaker Change: I think given the strength that we have in terms of content creation. The learning experience itself better skills tracking with our outcomes module all of these things create a really amazing learning experience. Once you are on boarded we now need to just get rid of all the hurdles in terms of getting people through that initial integration and onboarding and thats where it.

Speaker Change: The focus is right now on in terms of driving that corporate lever for our growth engine for the future.

Speaker Change: Okay great.

Speaker Change: Thank you for taking my questions guys. The best of luck.

Speaker Change: Yeah.

Speaker Change: Thank you Susan.

John Baker: Thank you I can confirm that does conclude the Q&A session and I would like to hand, it back to John for some final closing comments.

Speaker Change: Thank you for joining us on our call today, we're looking forward to updating you following our fusion users conference with our Q2 results I hope to see something to you at the conference in Georgia. This year. Thank you again for the support and have a great day everyone.

Speaker Change: Thank you all for joining our Congress and that does conclude today's call. Thank you for your participation you may now disconnect your line.

Speaker Change: [music].

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