Hello everyone, and thank you for joining the D2L Inc. Q4 2026 financial results call. My name is Lucy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. It is now my pleasure to hand over to your host, Craig Armitage, to begin. Please go ahead. 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. 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, factors, and assumptions, as well as further information concerning forward-looking statements, please refer to the company's annual Management's 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.sedarplus.ca. In addition, during the call, reference will be made to various non-IFRS financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted gross margin, and free cash flow. These non-IFRS financial measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other public companies. Please refer to the company's MD&A for the years ended January 31, 2026, and 2025 for more information about these and 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 financial statements. With that, I'll turn the call over to John Baker, Chief Executive Officer at D2L. Please go ahead, John. Thank you, Craig, and thank you everyone for joining us for our Q4 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. Please note that the results we're discussing today are in US dollars. I'm joined this morning by Josh Huff, our CFO, and we look forward to taking you through the results today and addressing any questions. Last year, fiscal 2024, was a strong year of execution and progress for D2L across our growth markets. We delivered 10% subscription and support revenue growth, ending the year at $198.4 million, increased ARR to roughly $220 million, generated $44.4 million of free cash flow, and we strengthened our balance sheet with $119 million in cash and no debt. Last year, our platform supported more than 21 million users globally across our customer base of more than 1,500 organizations in over 40 countries. At the same time, the year was not without challenges. Namely, we experienced higher churn in our U.S. K-12 customer base. While K-12 is the smallest of our three main markets, this dynamic is weighing on near-term revenue growth. For context, K-12 represents 10% of our ARR at year-end, and roughly half of that is in the U.S. To give investors a better view of the underlying performance in our core growth markets, higher education, corporate, and international, we've included KPIs that exclude K-12 for some of our data points this quarterly update. Demand across these markets remains strong. ARR grew by 14% and almost 11% in constant currency. Our sales and marketing teams demonstrated another strong quarter of execution in a year that's had lower than normal deal volumes in North American higher education. That said, we're seeing good demand signals across our core growth markets. Pipeline generation exceeded expectations last year and remains healthy entering this new fiscal year, reinforcing our confidence in our future growth. Turning to the Q4 operating highlights, it was a solid quarter for new bookings and customer additions. In North American higher education, we saw a gradual improvement in market conditions with a modest uptick in full campus RFPs and increased interest in continuing education and adult learning applications for upskilling. We believe our competitive position is stronger than ever, and that's reflected in win rates consistently above 50%. This past quarter, we won business from all three of our main competitors with new customers that included Henry Ford College, a large community college in Michigan with a strong focus on workforce development, the University of Colorado Colorado Springs, a public research university known for engineering, health sciences, and expanding digital programs, and Okanagan College, British Columbia's largest regional post-secondary institution, which serves over 20,000 learners. In K-12, we continue to provide great service to the largest school districts in North America. In Q4, we added Hudson Global Scholars, a K-12 organization delivering U.S. curriculum and diploma programs to K-12 students globally. Internationally, we entered the new year with good momentum. Year-over-year, international ARR growth exceeded 15% in fiscal 2026, and we're seeing strong pipeline as we look ahead. Recent new customer wins include the University of the Free State in South Africa, one of the largest public universities serving 37,000 students through a significant online learning presence. The University of Prince Muqrin in Saudi Arabia, a private institution focused on English language education. Whitecliffe College in New Zealand, a leading creative arts and design institution, and building on our market leadership in Singapore, we also added Singapore University of Social Sciences, which specializes in lifelong learning for working adults. After my recent trip to Singapore, it's clear our clients in that region are on the leading edge when it comes to adopting new AIs for this new era. In corporate learning, we're also expanding our customer portfolio to include a large statewide public health agency serving millions of residents. This win reflects the strength of our platform in supporting large, highly regulated organizations with complex needs. We added the American Society of Interior Designers, which represents more than 25,000 professionals and educators nationwide. In addition to these new customers, we continue to win third-party recognition for D2L's product leadership. During the quarter, D2L Brightspace was recognized as the top learning management system by Training Industry and one of the best enterprise learning management systems by Talented Learning. We also received multiple Brandon Hall Group awards through both D2L Brightspace and D2L Lumi. We appreciate the efforts of the D2Lers who have partnered with our clients so closely to build amazing learning experiences that helped us win these awards. Now, before I talk about the latest AI milestones, I want to frame this through the lens of D2L's long-term vision. For more than 25 years, we've been unified in our mission to transform the way the world learns. We've done that through multiple technology shifts, the move to mobile, then to cloud, and we've learned to stay focused on what matters the most to educators and learners. Over this period, we've had the vision to deliver personalized learning at scale, and we see AI as a powerful enabler of the work that we're doing with our clients. We're implementing AI in the way that our customers have asked for within the core learning platform that always sits at the center of teaching and learning. D2L Brightspace is a system of record and a system of engagement for more than 21 million users. Many use it for hours each day. Because our customers operate in a regulated mission-critical environment, we've built a foundation of responsible AI, giving them a trusted platform that is built to operate safely and reliably at scale. We're in the center of a broader ecosystem that supports thousands of third-party products. In 2025, for example, there were 2.1 billion integration links from our platform into partner sites. With this as a foundation, our AI strategy is focused on embedding AI into the core workflows educators and learners use every day to improve outcomes while at the same time delivering better efficiency. This past year, we've had a 4x expansion of AI capabilities across more workflows for educators supporting new languages and into new experiences for learners, such as tutoring, feedback, and just-in-time interventions. We continue to see strong interest from customers for D2L Lumi. ARR was more than $3.5 million at the year-end, up from roughly $2 million at the end of Q3. The attach rate is accelerating, reaching over 40% now for new higher education customers. Importantly, our position as an AI-first next-generation platform is resonating in our markets. It's helping us win new customers and secure renewals, supporting both a high retention rate and increasing win rate. It's against this backdrop that we see an opportunity to accelerate our market share gains globally, and we're investing to capitalize on this momentum. In addition to customer-facing applications, we're increasingly developing AI through all aspects of the company on a foundation of responsible adoption. We have extended AI into internal workflows across engineering, go-to-market, customer support, and customer success. We're already seeing a positive impact among all of our teams. For example, our learning services group cut the cost of converting old Word documents into engaging, highly interactive learning by over 80%. What took days is now taking minutes, and it has a big impact on the quality of learning for students. These innovations are focused on supporting higher revenue per employee over time while improving customer outcomes. This operational leverage will become more visible as these improvements continue to scale, supporting margin expansion and increasing profitability in future years. With that, I'll turn the call over to Josh to walk through our financial results and our outlook in more detail. Over to you, Josh. Thanks, John, and good morning. As John noted, we had a solid fourth quarter highlighted by healthy bookings and continued strength in pipeline generation, which in part was offset by churn within our U.S. K-12 customer base. Total revenue increased 5% in Q4 to $55.8 million and 6% for the full year to $217.5 million. Subscription and support revenue increased 9% in Q4 to $51.1 million, driven by new customer growth and expansion from existing customers and was partially offset by U.S. K-12 churn. For the fiscal year, subscription and support revenue increased 10% to $198.4 million. Annual recurring revenue grew by 10% to $219.8 million and 7% on a constant currency basis. We saw continued strength in new ARR bookings from our global higher education and corporate markets. Q4 ARR growth was approximately 11% in these markets combined on a constant currency basis. Q4 professional services and other revenue decreased 27% to $4.7 million, in part due to a $0.9 million one-time revenue adjustment in the prior year and a generally cautious spending environment in the U.S. market. Turning to margins, this is an area where we've made significant progress over the past several years, and in fiscal 2026 we expanded margins while absorbing additional costs related to the database technology migration. In the second half of the year, this database technology migration had an approximately 200 basis point impact on adjusted gross margin. We expect the impact to scale down over the course of fiscal 2027 as the work is completed, putting us back on the path to gross margin expansion in fiscal 2028 and beyond. Adjusted gross margin for Q4 was 68.7% compared to 69.6% in the prior year period, and subscription and support gross margin was 71.9% versus 73.2% last year. For the full year, adjusted gross margin expanded 60 basis points to 69.6%, and subscription and support gross margin improved 50 basis points to 73.3%. In terms of earnings and cash flow in the quarter, adjusted EBITDA in Q4 was $8.1 million compared to $9.4 million in the prior year period, primarily reflecting the year-over-year comparison in professional services and the database migration costs. For the full year, adjusted EBITDA increased 17% to $32.9 million, with an adjusted EBITDA margin of 15.1% for the full year. Free cash flow was $12.2 million in the quarter, up from -$0.6 million in the same period last year, reflecting strong working capital management in the current period. For the fiscal year, we are pleased to report free cash flow grew 63% to $44.4 million as the company continues to scale its profitability and optimize working capital management. Below the line, our Q4 net loss was $1.4 million versus prior year net income of $19.9 million, with the change being explained primarily by a $15.8 million non-recurring income tax recovery in the prior year and a non-cash fair value adjustment of $4.3 million on the loan receivable from SkillsWave Corporation. For the full year, income was $9 million. Lastly, our financial position remained very strong at fiscal year-end, with no debt and $119.2 million in cash and cash equivalents on our balance sheet. In terms of uses of cash, in Q4, we repurchased and canceled approximately 350,000 subordinate voting shares under our NCIB program, bringing the total for the fiscal year to nearly 1 million shares as of January 31, 2026, for an aggregate price of $11 million, representing the cancellation of 3.6% of the opening subordinate voting shares outstanding and roughly doubling the utilization of the NCIB this year. We continue to put great focus and effort into growing our annual recurring revenue balances, both from new customer acquisitions, as evidenced by some of the examples John provided, as well as our ability to grow and retain our existing customers. Growth in ARR is a strong indicator of future growth in revenue and future margin expansion through operating scale. In the current year, our overall ARR growth and related metrics were impacted by our U.S. K-12 market. Excluding this market, our ARR grew 11% year-over-year on a constant currency basis or 14% on a reported basis, and our GRR was 94.4%, and net revenue retention was 103.7%. Metrics that collectively give us confidence in our ability to invest into our growth drivers and deliver corresponding strong returns and outcomes. Looking forward, for the current fiscal year, we are guiding to subscription and support revenue of $212 million-$214 million, or growth of 7%-8%. Total revenue of $231 million-$234 million, or growth of 6%-8%. Adjusted EBITDA of $33 million-$35 million, implying an adjusted EBITDA margin of 15% at the midpoint. We expect revenue growth and adjusted EBITDA margin to increase as fiscal 2027 progresses, enabling performance to improve in the second half of the year relative to the first half of the year. While we continue to make operating efficiency improvements, the overall operating margin guidance for fiscal 2027 is affected in part by the flow-through of the U.S. K-12 churn at a time when we are seeing strong investment returns in our core growth markets of global higher education and corporate. In fiscal 2027, we are carefully balancing near-term operating efficiency with appropriate investment levels to most effectively meet our medium-term objectives and position the company for our long-term goal of market leadership. Furthermore, in addition to the fiscal 2027 guidance, we reiterated our medium-term target operating model of 10%-15% revenue growth and 18%-20% adjusted EBITDA margin by fiscal 2028. We recognize that our fiscal 2027 outlook remains below these targets, reflecting the impact of near-term headwinds we discussed today. From a revenue perspective, our confidence in accelerating growth is rooted in several factors. One, our strong ARR growth and new customer acquisition in our core growth markets as evidenced by 11% year-over-year constant currency ARR growth in our global higher ed plus corporate markets. Two, a gradual improvement in overall global higher education activity levels where D2L operates with very high competitive win rates. Lastly, progress in customer expansion, including upsell of add-on solutions developed organically or added inorganically. From an adjusted EBITDA perspective, we have high visibility into margin expansion driven by increases in gross margin as technology migration costs moderate and operating leverage as revenue grows supported by scale and productivity gains across the organization. We are excited about the progress we are making as a business and confident in our path forward as we work towards our goal of becoming the market leader for learning globally. With that, we will open the call to questions. Operator. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two to withdraw yourself from the question queue. When preparing to ask a question, please ensure your device is unmuted locally. The first question today comes from Erin Kyle of CIBC. Your line is now open. Please go ahead. Hi. Good morning. Thanks for taking the questions. I just want to start with the ARR growth theme. You noted 14% ARR growth ex K-12 or almost 11% in constant currency. You called out healthier pipeline, slight uptick in RFP activity. Just want to know where you think how sustainable you think that growth rate is exiting Q4, and maybe what's embedded in the fiscal 2027 guidance, excluding K-12. Yeah. Thanks, Erin. Good question. We're pleased with the progress in Q4 as we highlighted, specifically within global higher ed and corporate. We continue to see strong bookings. As we look forward, we expect that to continue. If you look back over the past two to three years, we've sort of been operating within that range, and you know, we expect to continue to be in that kind of you know, low double-digit range as we look forward in FY 2027. We still have some of the offset coming from the U.S. K-12 market as we disclosed. As we look forward, that core growth rate that effectively is on 90% of our ARR, we're confident in continuing into the future. That's helpful. Maybe I'll switch gears just to the net cash balance. You ended the year with close to $120 million in cash, no debt. How should we think about, you know, buyback pace in the fiscal 2027 versus pace of reinvestment and possibly potential M&A from here? Yeah, good question. Again, we were pleased with the free cash flow generation in the quarter as well as the year now exceeding $40 million on a full year basis. That's equating to a strong balance sheet as you mentioned, which is giving us flexibility from a capital allocation perspective. We continue as we look over the near and medium term and long term. We see a mix of growing the business through M&A as a way of complementing the organic growth. We also see you know, a very attractive price point from a buyback perspective. We've been using the NCIB more significantly. In the past year, we more than doubled the usage of the NCIB. We're increasing the level of usage and the capacity here in FY 2027. We also recognize that there are additional ways to buy back stock and we actively evaluate that as well. Maybe I'll just squeeze a quick follow-up in on that one. On M&A, if that is, you know, something you're considering, maybe you can just give us some color on maybe what type of targets you'd be looking at. Would it be more tuck-in acquisitions or something more substantial and, you know, kind of geared towards the corporate market, and growing that opportunity or more in the higher education space? That's a great question, Erin. You know, I think we continue to evaluate a number of different opportunities in that space. As you can imagine, for us, it's really important to bring in companies that can really help us solve really important problems for our clients. You know, a good example would be the H5P acquisition that we did. A couple of years ago now, that enabled us to really open up not only higher education as a market, but really plays well in our corporate marketplace as well. Things that have a natural halo effect across all of our key growth markets is ideal. Something that's driving an accelerated growth, helping us expand our gross margin, helping us contribute to EBITDA. These are ideal candidates for us to tuck into D2L. You know, we're looking at a broader M&A set, as you can imagine, in the year ahead. Thanks very much. I'll pass the line. Thank you. The next question comes from Gavin Fairweather of ATB Cormark. Your line is now open. Please go ahead. Oh, hey, good morning. Thanks for taking my questions. In your prepared remarks, you talked about displacing all of your, you know, major competitors this quarter. I'm curious what were the key deciding factor was on the Canvas takeaway? I think, when you look at the factors for, all three takeaways really from all of our three main competitors, it's fairly consistent. It's having a very clear roadmap, for the future in terms of where the technology is going. It's providing exceptional support, to the customer to help them through the transition, and having the capability that's going to be needed for the next generation of learning. Many of these clients are trying to also support at this stage many modalities of learning, on-campus, online, staff upskilling, supporting the workforce, market. You know, and in the core education market that we're serving today, being able to support all of those at once with one common platform is a compelling differentiator. There's a number of others too, Gavin. You know, we're still seeing pretty consistently our win rate tick up well above 50% in higher education. I think the thing that's really standing out for a lot of our clients is the innovation that we're putting into the platform. AI is also helping. It's not showing up in RFPs yet, but it's certainly contributing. As you know, the UX in our platform, leveraging AI is just so much easier to create quizzes, create content, create interactive learning experiences, take you know, old courses that might be using Word documents or PowerPoints or PDFs, and turn them into really engaging modern web experiences for students to really drive better outcomes that deliver better retention, better learning experiences. I feel like we're winning on all fronts, to be honest, Gavin. You know, I think the work that we have ahead of us is really trying to drive that replacement cycle for all three of these competitors, position all of them as legacy technology, and help our clients really recognize that we are the leader when it comes to AI and this next wave of learning. It's built on a strong foundation of responsible AI, leadership on learning science, and really delivering an amazing learning experience for students. Appreciate that. Very helpful. In your prepared remarks, you also talked about leaning in on sales. Maybe you can just talk about which regions or business lines are getting further investment and what you're seeing in kind of the demand and competitive environment that's telling you to lean in now? Well, the leading indicator for us is really pipeline. Over the course of the last year, we've seen pipeline continue to perform incredibly well, exceeding our expectations for the full year. Pipeline is also trending well, even into the new year here. We are definitely seeing good momentum on that front. Our win rate continues to tick up in our core markets, so we're excited about that, actually across all of our markets. We think there's a real opportunity to lean in now to both education and into corporate, and both key growth markets are actually getting investment at this stage. Just lastly for me, just on K-12, can you just touch on the renewal book for fiscal 2027 and kind of how much of that 10% of ARR is kind of up for renewal this year? Yeah. Well, maybe I'll split this with Josh. You know, what's interesting with K-12 is you've got a sort of story of two markets. You know, K-12 U.S. has seen some challenges with retention, and we'll get into that in a second. That's about 5% of our ARR. That said, we still have some great U.S. clients. We're actually growing it. Hudson Global Scholars is a great example of a real thought leader in the space adopting us as a platform. And what's also interesting is the pipeline continues to build. Feel confident on the rest of K-12 outside of the U.S. Those clients are engaging really well, adopting more, leveraging the platform in bigger ways. You know, while it represents, you know, now 10% of our business, it's not the fastest growing part of our business. It still feels very solid as a book of business. I think long term will be a market that we wanna see bounce back from where it is today. Josh, I don't know if you wanna get into the specifics. Yeah, no, that was a good answer. Good color. As John mentioned, from a renewal perspective, like, given it is now roughly 10% of ARR, you know, we typically see about a third of the base be up for renewal in a year, and we see similar dynamic this year. As we progress through FY 2027, we'll start to see the impact of the pressure we've articulated start to moderate. That's part of what gives us confidence effectively in FY 2028 is as we get into FY 2028, the core growth. Rate from our markets starts to effectively represent itself in our consolidated results, in a more pronounced way. Thanks so much, and congrats on the strong bookings. Thank you. It's been a lot of hard work by the team, so I appreciate it. The next question comes from John Shao of TD Cowen. Your line is now open. Please go ahead. Hey, good morning, guys. Thanks for taking my question. Some of the customers talked to last year were actually a bit cautious towards AI. Right now, do you think you're spending that time educating the market so they're getting incrementally more comfortable with AI? Yeah. I think, our client base certainly is getting more comfortable with AI. Well, you know, the leading indicator for us is gonna be the change in RFP activity that, specifically calls out AI functionality, which we've not yet seen tick up. Just wanna be clear on that. We're seeing the occasional mention, but it's not consistent. That said, as we pointed out in the call, 40% attach rate for new clients adopting our AI capability out of the gate, Lumi, which is impressive. You know, typically when people are doing an RFP, they're just looking for the base product. Now seeing attach of Lumi, Creator+, all these other different add-ons continue to grow speaks to, how important this technology is to transforming experience for our clients. You know, I also pointed out on an earlier call that we saw about an 80x increase in the adoption. Those clients that adopted, we saw about an 80x increase year-over-year with the utilization of our AI in the platform. We haven't seen 80x this year, but it's, you know, up closer to 8x increase in adoption for those that have adopted the platform again this year. You know, we're seeing some really good momentum within the adoption for clients. I think as we continue to roll out more and more capability, I think you'll see that confidence continue to grow. I think it's all rooted in the impact that we're having. If through these technologies it makes it, you know, tenfold easier or even twice as easy to build really high quality courses and great assessments that really lead to better outcomes for students, I think you'll see more clients needing this technology, not just desiring it. Thanks for the color. I think that 40% attach rate is quite impressive. How should we think about Lumi versus external AI model like ChatGPT? Do you think they're gonna coexist together or they're kinda mutually exclusive for users? I think you're gonna see them coexist. I think, you know, OpenAI is really a great consumer app, and I think many users will use that. I think you'll see. Well, in our case, we use over 12 different models inside our platform to support all the different AI applications within Brightspace. You're gonna see us harnessing these technologies. Then you'll see us fine-tune models to support personalizing the learning and taking all of the data and the insight that we have around learning science and improving these AI models to provide a better experience on the learning side for our clients. I hope that you'll see us lean into this even more in the year ahead as we try to embrace new ways of thinking about AI. If you think of it, at the heart of AI is learning. You know, I hope that we become a very significant player in the AI world as we go forward, not just in terms of the technology, but in terms of the human impact, in terms of upskilling with our clients to support the transformations in the workplaces, to support preparing students for the next generation of jobs, the changing entry-level roles that people are gonna have to, you know, find as they look for jobs. We're at the heart of solving many of these critical problems, and I'm quite excited with the team's motivation, excitement about digging in and getting this all done. Thank you. I'll pass along. Thank you. The next question comes from Stephen MacPherson of BMO Capital Markets. Your line is now open. Please go ahead. Hi. Thanks for taking my question. I just wanna dig in a bit on the growth algorithm, specifically the new logo adds versus expansions. Do you see that mix changing in your fiscal 2027 assumptions? Does that mix need to change going to, you know, going into 2028 and getting back to that 10%-15% growth? Well, I think we might actually see a bit more action with our clients this year ahead because I actually do think the adoption of like products like Lumi, Creator+ and others will accelerate quite quickly. Maybe it's slightly more clients than new logos, but I expect the number of new logos to continue to accelerate in the year ahead just given the pipeline and given the work that our teams are doing. Beyond North America in international markets, the teams are working really well to drive deeper penetration into existing markets and also start to open up new markets, which should see accelerating logo growth as well too. I'm not saying one or the other is gonna be my favorite child, but I really do think both should be firing at a good level this year, which will set up, you know, next year in terms of revenue rec really well. Yeah, we've been. Okay. Stephen, just to add a bit of color. Sorry, there's a lag. We've been operating at a roughly 50/50 mix in FY 2026. We'd expect that to continue over the medium term. If you look back in the history of D2L 2, 3, 4 years ago, it was more of a two-thirds, one-third new logo orientation. The existing customer upsell motion, as we've talked about for many quarters, is a strategic priority of the business. Adding things like H5P, Creator+, Lumi to our portfolio that add incremental value to customers but also help that upsell commercial motion has been a priority and is showing really good progress. To answer your question, it's a 50/50 mix is sort of the way to think about it. Okay. That's very helpful. Now looking into the fiscal 2027 EBITDA guidance, it implies that. Well, it doesn't really imply much in the way of operating leverage. Now, I know there's additional expenses related to the database migration, but I'm guessing there's some investment in there as well. I wondered if you could give us a bit more color on where you expect that spend to going and, you know, how much of that additional spend could fall off going into fiscal 2028. Yeah. Thanks, Stephen. A couple things. As we mentioned, the second half profile does accelerate, so we'll exit the year with a margin profile that's higher than sort of the average full year guide of 15%. Mechanically, there's kinda two near-term headwinds. One is the database migration costs which moderate as we exit the year, and that's about 100 basis points. The second is just foreign exchange rates, specifically the strengthening of the Canadian currency, given a majority of our expenses are Canadian, and that has a roughly 100 basis points impact on our margin profile. If I just sort of pan out, as we've been working through strategic planning, going into fiscal 2027, you know, we did carefully consider the right balance of investment and operating leverage in the near term. You know, seeing the progress in our core growth markets, as we mentioned, growing 11%, an NRR rate of 104%. Also seeing good progress with Lumi, you know, we made the decision to, in FY 2027, make what we feel is appropriate investment into those growth drivers where we're seeing strong return, while also balancing operational improvements that are in some respect being offset by those near-term headwinds I mentioned before. That's sort of the mechanics of the FY 2027 margin profile. All right. That's very helpful. I'll pass the line. Thank you. Oh, sorry. Go ahead, John. No, I just thought maybe just to add, Josh did a good answer there. But I just maybe just add a bit more color. You know, the work that we're doing on the gross margin improvement is progressing really well. I've been quite impressed with the team's work there. That's tracking well, as we articulated before, trying to wrap that work up as quickly as we can in the first half of this year, and feel like the team's doing a good job on that front. Then, you know, there is a lot of AI investment, as you can imagine, that's going into both the product, but also in terms of internal adoption. That should have a pretty big impact on our ability to constantly hit our numbers for next year for EBITDA. All right. Very good to hear. All right. Thank you. Thank you. The next question is from Paul Treibel of RBC Capital Markets. Your line is now open. Please go ahead. Thanks very much and good morning. Just, you mentioned that the database migration has been going well. Just, you know, can you just dig a little bit deeper in it? The point of my question is really around like the magnitude of the change that's involved. You know, particularly, you know, have you been able to utilize AI to help smooth that transition, you know, 'cause we've heard lots of stories of, you know, apps being live coded on the weekend and things like that. Like, you know, the migration's been going for a couple quarters now. Just can you give us an extent, explain the degree of complexity that's been involved in that migration? I think we're actually through the bulk of it, Paul. You know, this has been many years of us actually working on this transition. You know, it's not been recoded, just for clarity. Like, we did try to use a whole bunch of different technologies to help make the transitions from one version to another much easier, much faster. This has been some of our best engineers working for many years to support this transition. That work is largely done. It's now a bit more of a paved path for the next quarter or two. There is more work that we could do in the future, and there are additional gross margin improvements that we could make over the following years. What I like is, many of our best engineers are gonna wrap this work up and get back to some of the other things that are gonna really add a lot of value to us as a company. You know, no live coding at this stage. You know, hopefully we'll see more leveraging of AI in other ways. Thank you. That is helpful. Thanks. The second question is like, you know, big picture around, you know, R&D and, you know, with the use of AI internally, can you give us a sense or what's your sense in terms of like the productivity gains that you've seen with it? How do you look at the balance between taking those productivity gains and using it to drive more, you know, product innovation versus, you know, letting some of that fall to the bottom line? Yeah, I think we're still early stages in terms of our own internal adoption of AI. The teams that have embraced it, you know, I'll give you a couple of examples. Our learning services group have cut the cost, internal cost, of developing courses by over 50%. We're even now offering services to our clients to help them understand how they can do similar work using our tool and using our team to help drive the cost of developing new programs and new courses by upwards of 50%, which is not small. We know these clients will spend tens of millions on new program design in a year, and so they can do twice as much for the same spend, or they could cut and drive efficiency dramatically for their university or college or for their training organization. Very compelling. You know, I think that's an opportunity, not just a cost saver. Internally, like we did have one of our teams leverage a lot of agentic AI and automation with AI, and it managed to take the team, as they saw natural attrition, we didn't let people go for clarity. The team is now less than half the size it used to be, but it's three times more productive. There are key workflows, there are key applications of AI within D2L that we wanna see like that, apply to many, many other parts of the organization to really improve the efficiency and automation. Maybe one last example. I can give you 100 examples, but one last example is our big effort right now has been trying to take implementation for new clients. We're removing all these folks from all of our main competitors. You know, in the past, it used to take many, many months to convert a client over to us as a platform. You know, recently we've been saying three months, not three years. It takes some of our competitors three years to move from one system to theirs. In our case, it's now three months is our promise. We're trying to get it down to, you know, three weeks. Like now, that's an ambitious goal, because as you can imagine, changing a big enterprise system like this is not easy. The combination of people plus agentic plus AI is really gonna help us solve a critical bottleneck, which, as you can imagine, if there's a replacement cycle to move to more of a modern AI-first learning platform, which we expect to create a momentum around, we wanna be able to capture that momentum as fast as possible. You know, we're definitely leaning into this year. This is part of the investment that we talked about with Josh and myself earlier, is investing to see the deployment of more of these technologies across the broader organization. I don't think. I can't think of a team that wouldn't benefit from leveraging these technologies in the future. Thanks for taking the questions. Thank you. The next question comes from Suthan Sukumar from Stifel. Your line is now open. Please go ahead. Good morning, gents. For my first question, I wanted to touch on corporate learning. It's good to see consistent traction here. Can you speak a little bit to some of the progress you've made on revamping your go-to-market process given the recent hires and where you stand on your product investment focus for employee learning use case and how that's tracking? You know, when do you expect that to start? When do you expect to make a more meaningful push on that front? Sorry, I didn't quite catch that last part of the question there, the second part of the question. I'm happy to speak to the first part first. You know, if you can sort of repeat the second part, that'd be great. Sure. Yeah. The second part was more around, you know, where you stand on from an R&D product perspective for the employee learning use case, and you know how that's tracking and- Okay. When do you expect to see more impact on that front? Yeah. No, that's. Those are all great questions. You know, we as we mentioned in the previous call, we're really, you know, if you look at our growth markets, education, higher education specifically, and corporate, in the past, we were very much focused on training organizations. Think like professional accountants or nurses or others, interior designers was one, another one that we announced this week. That's all going well, and we continue to make investments, both on the go-to-market, and also in terms of R&D to support that push. Those are growing very well, as Josh pointed out. Employee training is relatively new. We have, you know, a lot of clients in that space already that adopted us, but we still think we need to put a little bit more investment from an R&D perspective into that market. The investment that we're making on the sales team underneath Kevin Capitani and his leadership has been going well. The team's building out. I think I just approved another hire this week. Now it's about driving execution. We're even chatting with some clients later today. I think that's gonna go well this year. The key now is making sure that the go-to-market motion really fires up and that we support it quickly on the R&D front. Now, keep in mind, all of the R&D that we do for employee training is gonna play incredibly well with our other markets because the functionality that we're building to close gaps there in that space are gonna be features that are gonna be loved by pretty much every other client that we've got. I feel like it's a very worthwhile investment. Okay, thanks for that color. For a second question, I wanna touch on M&A. In this backdrop, do you see increased opportunity for acquisitions? In general, how have your priorities changed? I'm kinda curious as to what might be becoming incrementally more exciting for you guys more recently. Yeah. No, it's definitely changed what we're looking at in terms of M&A. I do think M&A is still an important driver for us to accelerate growth and also to support our ambition from a profitability perspective. I think our team is hungry for additional products, even though we've got a number of them already, to be able to take it to our base because our clients have no shortage of challenges they want us, like a company like ours, to help them solve. I do think there's capacity for us to continue to push on that lever. You know, in terms of what's different, I think we're thinking about the market differently in this new age of AI. We wanna really look at things that are gonna really help us strengthen the platform, and that are very defensible in this new market. You know, in our case, we're also seeing 1,000 applicants for a job, and so it's not about so much the talent, it's really about the combination of a great team solving really important problems that really strengthen our platform story. Okay, great. Thanks. Take one of the questions, guys. I'll pass the line. Thank you. The next question comes from Brian Peterson of Raymond James. Your line is now open. Please go ahead. Hi, good morning. This is Jessica Autor, Brian. Really good to hear about a positive commentary and pipeline generation coming out of last year. I'm just thinking in light of that, how should we be considering the current pipeline mix, like a rough high level view of it between what would be considered more like your early stage interest or opportunities that are further along in the current procurement evaluation process? Oh, by the way, I think it's Jessica, right? Is that right? Yep. Yeah. Oh, thanks, Jessica. Sorry, you got introduced as Brian. I wasn't quite sure. I think- Not a problem. Yeah, no, appreciate it. When you look at our pipeline, we have. It's basically across the board, you know. We certainly have a lot more early stage pipeline, but that pipeline's, you know, as you can imagine, the team works through pretty aggressively to move it through the conversion stages. Conversions at each of the stages has continued to tick up, like we mentioned with the win rate at the final stage. It's still taking longer to take people through that journey, if you will. Maybe slightly less than it was this time last year. It's still a journey. There's no question. It's still a full court press. The team is working very hard to sort of convert everything. What I do like is the pipeline's growing, conversion's growing. The team's really dialed in in terms of really looking at the data in new ways and better ways. I feel very good about our ability to go off and win that business that we're generating in terms of interest. I'd say a gradual improvement, and we will hopefully pick up speed as we get through the year. Brittany here. Thank you. Also sort of a follow-up. In the past, international markets have been slower to adopt cloud LMS compared to the North American market. As we're having these developments- Yeah ... in AI, have you been seeing the new technologies helping with, just expanding the market there internationally in winning deals? Yeah. That's a great question, because it's a very much a challenge in international, right? Because you're right, they've been a lot slower to adopt cloud. But I think they've come around. You know, we've announced a bunch of wins there internationally, and that historically we wouldn't have seen because they were not ready for cloud in the past, but they are today. Then AI is, I think, a compelling driver internationally, you know. But more importantly, responsible AI. They wanna, like, they wanna make sure that the partner they're working with are really thinking carefully about how to implement these technologies in ways that are gonna improve the educational outcomes for students and make the jobs of the faculty and the administration that much easier. It's not just AI, it's making sure that we implement it in ways that are really gonna have a really positive impact. Which is why we're putting so much work into developing efficacy studies and partnering closely. You know, we just announced, for example, five different grants with the SUNY system to really look at different nuanced uses of this technology to support the classroom experience. It's that combination of these things that are really driving international adoption. I think internationally, many of these schools wanna leapfrog. They, you know, they've been using old legacy platforms for a very long time, and they're ready for a change. When they want the change, these clients tend to want to embrace a lot of different technologies, not just the core learning platform. I'm actually quite excited about the international market. In some regions, not all, just for clarity, some regions have an abundance of capacity, but other regions where there's not a lot of capacity as in they have not learned how to build a lot of online courses, is they're relatively new in. A good example would be India, who's just opened up the market for online. You know, our ability to go in and not only help them with a great platform, but also help them through the how do you actually build a great online program is highly impactful. You know, there's a good case study that we just put out where we took a university from zero online students to 50,000, just over a handful of years. that kinda growth doesn't happen without a great partner. I think our team is well-positioned to support these clients globally. That's really great to hear. Thank you. Thank you. We have no further questions at this time, so I'd like to hand back to John for closing remarks. Well, thank you everyone for joining us for the call today. We're really looking forward to updating you following our Q1 results. Have a great day, everyone, and happy Easter. This concludes today's call. Thank you all for joining. You may now disconnect your lines.