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May 31, 2022
FranklinCovey Q3 2022 Earnings Report
Franklin Covey reported strong financial results, marked by a 13% increase in third-quarter sales, driven by growth in subscription services and the Education Division.
Key Takeaways
Franklin Covey reported a strong third quarter with a 13% increase in sales to $66.2 million. The growth was fueled by a 32% increase in All Access Pass subscription and subscription services sales, and a 21% increase in Education Division revenues. Operating income increased by 91% to $5.9 million, and adjusted EBITDA increased by 27% to $10.9 million. The company's liquidity remained strong with $52.1 million in cash and $15 million available on its revolving line of credit.
Consolidated sales increased 13% to $66.2 million compared to fiscal year 2021.
All Access Pass subscription and subscription services sales grew 32% to $39.1 million.
Education Division revenues grew 21% due to increased consulting, coaching, and training days.
Operating income increased 91% to $5.9 million and Adjusted EBITDA increased 27% to $10.9 million.
FranklinCovey
FranklinCovey
FranklinCovey Revenue by Segment
Revenue by Segment
Enterprise Division Revenue
CapyFin.comEducation Division Revenue
CapyFin.com Forward Guidance
Franklin Covey increased its guidance for fiscal year 2022 and now expects Adjusted EBITDA to total between $40 million and $41.5 million.
Positive Outlook
- Strength of the All Access Pass subscription.
- Strength of the Leader in Me membership subscriptions.
- The subscriptions have driven Franklin Covey’s growth trajectory across recent years.
- Subscriptions have remained strong during the pandemic and ongoing recovery.
- The subscriptions will drive continued growth in the fourth quarter of fiscal 2022 and subsequent years.
Challenges Ahead
- Ongoing business disruptions in China and Japan resulting from the COVID-19 pandemic and economic conditions in those countries.
- The timing of Education coaching days, which were concentrated in the fourth quarter of fiscal 2021 as pandemic restrictions loosened, but were recognized more evenly during fiscal 2022.
- Investments in new personnel.
- Investments in sales positions.
- Investments in sales support positions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income