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May 31, 2025
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.
Revenue by Segment
Revenue by Geographic Location
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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