Franklin Covey Company Stock Earnings Reports

Franklin Covey reported mixed GAAP revenue but continued operational momentum that investors should note. Reported Q2 revenue was $59.6M (flat YoY) while consolidated invoiced amounts grew 5% YoY, driven by Enterprise North America (+7%, or +10% excluding government) and Enterprise International (+7%). Deferred subscription revenue increased 16% YoY to $59M and the percentage of revenue under multiyear contracts rose to 62%, signaling a growing backlog that should convert to stronger reported revenue in fiscal 2027. Adjusted EBITDA for the quarter was $4.1M, up 99% YoY, and free cash flow was $13.2M (a sizable improvement driven mainly by AR collections). Education revenue grew 16% and is expected to be back-half weighted; International direct offices showed healthy growth (notably France and China). The company reaffirmed fiscal 2026 guidance: revenue $265–$275M and adjusted EBITDA $28–$33M, and expects the back half to be stronger (Q4 > Q3 for revenue and ~60–65% of FY adjusted EBITDA in Q4). Balance sheet and capital allocation highlights: cash on hand $13.7M, total liquidity >$76M (including a fully available $62.5M credit facility), and aggressive share repurchases (~1.6M shares for $28.1M YTD) with $20M remaining on a $50M authorization. Management frames Franklin Covey as well-positioned in an AI-driven environment because AI increases the premium on leadership, trust and disciplined execution — areas the company sells to and measures outcomes against. Continued risks include macro uncertainty, federal spending headwinds (government contracts), foreign exchange, and the timing gap between invoicing and revenue recognition.