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Sayonara to Another LMS Company Attempt at a Separate Platform
D2L announces it is spinning off Wave as part of its most recent earnings release
Phil Hill
April 11, 2024
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D2L had its Q4 earnings release last week. The financial results were quite solid, with annual recurring revenue increasing from $168.0 million to $188.1 million and adjusted EBITDA increasing from $0.4 million to $3.5 million (both measures in US dollars and in comparison with the same period last year).
Note: like Morgan’s post on Anthology news last week, I am going off of public information and have not requested company interviews. If we find out information in subsequent conversations that changes our perspectives, we’ll share it in future posts.
D2L also won Villanova University, Aurora University, and (not in the release but available online) the University of Hawai’i.
Spinning Out D2L Wave
But this is not a financial newsletter, and those results were not the most interesting news. Instead, the corporate learning side of D2L provided the surprise.
On April 3, 2024, the Company announced that it has entered into a binding letter agreement (the "Letter Agreement") to spin-out the D2L Wave offering into a new independent standalone company, SkillsWave Corporation ("SkillsWave"), and will sell majority ownership to John Baker, with an expected mid-year closing date. The D2L Wave offering is an early stage upskilling technology, representing a very small percentage of D2L's overall revenue in Fiscal 2024, and is separate from D2L's corporate learning core business. This transaction enables the Company to increase focus on the continued growth and profitability of the core SaaS business, led by its industry-leading learning platform Brightspace in the global education and corporate markets.