Franklin Covey Company Stock Earnings Reports

Franklin Covey reported Q1 FY2026 revenue of $64.0M (down 7% YoY) but highlighted strong operational momentum driven by Enterprise North America. Invoiced amounts in North America rose 7% in Q1 (13% excluding certain government/DOGE comps), new-logo subscription invoiced amounts jumped 25%, deferred subscription balance increased 8% YoY to $49.1M, and services bookings were up 29% — indicators of future recognized revenue. Education remains seasonal (back-loaded into Q3/Q4) and was impacted by timing differences vs. a large state contract last year; the company expects Education to grow later in the fiscal year. International was modestly down, with China the primary drag. Gross margin was 75.5%; adjusted EBITDA was $3.7M (versus $7.7M prior year) and free cash flow was negative $3.7M due to timing in working capital and other one-time items. The company reaffirmed FY2026 guidance: revenue $265M–$275M and adjusted EBITDA $28M–$33M, while noting a shift in EBITDA mix toward the back half of the year (now ~25–30% of FY EBITDA in H1). Liquidity is strong ($80M total, $17.5M cash, $62.5M undrawn credit facility); management continues opportunistic share repurchases (recent and planned 10b5-1 activity). Strategic priorities include execution on the go-to-market transformation for Enterprise North America, expanding subscription + services mix, embedding AI into products and offerings, and maintaining disciplined capital allocation. Management expects fiscal 2026 to be a year of execution and a return to growth, setting up stronger revenue, adjusted EBITDA and free cash flow acceleration in fiscal 2027.