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May 31
FranklinCovey Q3 2025 Earnings Report
FranklinCovey reported a net loss and decreased revenue in Q3 2025, while exceeding guidance on Adjusted EBITDA.
Key Takeaways
FranklinCovey faced year-over-year revenue and profit declines in Q3 2025 but exceeded expectations on Adjusted EBITDA and maintained strong liquidity and client retention.
Revenue declined to $67.1M from $73.4M a year ago due to macroeconomic headwinds and contract cancellations.
Net loss was $1.4M, impacted by $4.7M in restructuring costs.
Adjusted EBITDA reached $7.3M, exceeding company guidance.
Deferred subscription revenue increased to $89.3M, up 7% YoY.
FranklinCovey
FranklinCovey
FranklinCovey Revenue by Segment
FranklinCovey Revenue by Geographic Location
Revenue by Segment
Enterprise Division Revenue
CapyFin.comEducation Division Revenue
CapyFin.comRevenue by Geographic Location
International Direct Offices Revenue
CapyFin.comInternational Licensees Revenue
CapyFin.comNorth America Revenue
CapyFin.com Forward Guidance
Guidance was revised downward due to delivery timing risks, though long-term EBITDA and cash flow growth is expected.
Positive Outlook
- Expected meaningful increase in Adjusted EBITDA in FY2026.
- Free cash flow projected to rise due to cost reductions.
- Continued growth anticipated in Enterprise and Education deals.
- Multi-year subscription contracts increased to 62%.
- High client retention and expanding client base.
Challenges Ahead
- Uncertainty in client decision-making delays service delivery.
- Geopolitical trade tensions continue to affect operations.
- U.S. government contract cancellations impacted revenue.
- International direct office revenue declined YoY.
- Selling, general, and administrative expenses increased YoY.
Revenue & Expenses
Visualization of income flow from segment revenue to net income