Franklin Covey Co. (FC) Q4 2025 Earnings Call Transcript

Total reported revenue for fiscal year 2025 $267.1 million, down 7% year-over-year. The decline was due to a 10% decrease in the Enterprise Division revenue, partially offset by a 1% increase in the Education Division revenue. The decrease in Enterprise revenue was attributed to canceled U.S. federal government contracts, geopolitical trade tensions, and macroeconomic uncertainty.

Enterprise Division revenue for fiscal year 2025 $188.1 million, down 10% year-over-year. The decline was driven by canceled U.S. federal government contracts, geopolitical trade tensions, and macroeconomic uncertainty.

Education Division revenue for fiscal year 2025 $74.6 million, up 1% year-over-year. The increase was due to higher coaching and consulting revenue, which offset lower material sales.

Consolidated subscription revenue for fiscal year 2025 $147.9 million, flat year-over-year. This reflects the macroeconomic factors and challenges faced during the year.

Deferred revenue balance for fiscal year 2025 $111.7 million, up 3% year-over-year. This increase indicates a solid foundation for future revenue growth.

Unbilled deferred revenue for fiscal year 2025 $48.4 million, up 7% year-over-year. This reflects contracted revenue that will be recognized in future periods.

Gross margin for fiscal year 2025 76.2%, down from 77% in fiscal year 2024. The decline was due to increased product amortization costs and lower sales in international direct offices.

Adjusted EBITDA for fiscal year 2025 $28.8 million, down from $46.6 million in the prior year. The decrease was due to lower revenue and increased SG&A expenses tied to the go-to-market transformation.

Free cash flow for fiscal year 2025 $12.1 million, down from $48.9 million in fiscal year 2024. The decline was driven by lower net income, increased restructuring costs, and higher capital expenditures.

Education subscription revenue for fiscal year 2025 $45.9 million, up 10% year-over-year. This growth was driven by increased demand for subscription services.

Enterprise North America revenue for fiscal year 2025 $147.6 million, down 10% year-over-year. The decline was attributed to macroeconomic factors and a $6.2 million IP contract that did not repeat.

International direct operations revenue for fiscal year 2025 $29.3 million, down from $33.3 million in the prior year. The decline was due to challenging business conditions in Asia and the U.K. caused by geopolitical and trade tensions.

International licensee revenue for fiscal year 2025 $11.1 million, down 3% year-over-year. The decline reflects lower contributions from international licensees.

Education Division deferred subscription revenue balance $54.6 million, up 13% year-over-year. This growth establishes a strong foundation for fiscal year 2026.