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Franklin Covey(FC) - 2025 Q2 - Quarterly Results
FCFranklin Covey(FC)2025-04-02 20:25

Revenue Performance - Consolidated revenue for Q2 fiscal 2025 totaled 59.6million,adecreaseof2.859.6 million, a decrease of 2.8% from 61.3 million in Q2 fiscal 2024[1][3] - Education Division revenue increased by 3% to 15.1millioncomparedto15.1 million compared to 14.7 million in the prior year[1][3] - Enterprise Division revenues decreased to 43.6million,downfrom43.6 million, down from 45.6 million in the prior year, primarily due to a 1.1milliondropinInternationalDirectOfficerevenues[3][6]−RevenueforthequarterendedFebruary28,2025,was1.1 million drop in International Direct Office revenues[3][6] - Revenue for the quarter ended February 28, 2025, was 59,612,000, a decrease of 2.8% compared to 61,336,000forthesamequarterin2024[25]−TheEnterpriseDivisiongenerated61,336,000 for the same quarter in 2024[25] - The Enterprise Division generated 43,551,000 in revenue for the quarter, a decrease of 4.5% from 45,598,000intheprioryear[29]−TheEducationDivisionreportedrevenueof45,598,000 in the prior year[29] - The Education Division reported revenue of 15,065,000, an increase of 2.6% compared to 14,689,000inthesamequarterlastyear[29]FinancialMetrics−AdjustedEBITDAforQ2fiscal2025was14,689,000 in the same quarter last year[29] Financial Metrics - Adjusted EBITDA for Q2 fiscal 2025 was 2.1 million, down from 7.4millionintheprioryear,withconstantcurrencyAdjustedEBITDAat7.4 million in the prior year, with constant currency Adjusted EBITDA at 2.6 million[7][10] - Adjusted EBITDA for the quarter was 2,060,000,withanadjustedEBITDAmarginof3.52,060,000, with an adjusted EBITDA margin of 3.5%[27] - Gross profit for the quarter was 45,746,000, down from 46,851,000,reflectingagrossmarginof76.746,851,000, reflecting a gross margin of 76.7%[25] - The company reported a net loss of (1.1) million, or (0.08)pershare,comparedtonetincomeof(0.08) per share, compared to net income of 0.9 million, or 0.06perdilutedshare,intheprioryear[7][10]−Netlossforthequarterwas0.06 per diluted share, in the prior year[7][10] - Net loss for the quarter was (1,076,000), compared to net income of 874,000inthesamequarterlastyear,resultinginadilutedlosspershareof874,000 in the same quarter last year, resulting in a diluted loss per share of (0.08)[25] Guidance and Expectations - The company expects fiscal 2025 revenue to be between 275millionand275 million and 285 million, reflecting a decrease of 7millionor2.57 million or 2.5% from the prior year[11][14] - The midpoint of the revised revenue guidance is 15 million or 5% lower than the low end of the original guidance[14] - The company anticipates a one-year setback due to government actions and expects Adjusted EBITDA to approach fiscal 2025 expectations in fiscal 2026[16] Cash Flow and Assets - Free cash flow for the two quarters ended February 28, 2025, was 7,801,000,downfrom7,801,000, down from 24,726,000 for the same period in 2024[33] - Total current assets decreased to 121,044,000from121,044,000 from 160,253,000 as of August 31, 2024[31] - Total liabilities decreased to 148,814,000from148,814,000 from 178,404,000 as of August 31, 2024[31] Stock and Restructuring - The company purchased 250,772 shares of common stock for 8.7millionduringQ2fiscal2025,totaling396,540sharesfor8.7 million during Q2 fiscal 2025, totaling 396,540 shares for 14.7 million in fiscal 2025[7][10] - The company reported a restructuring cost of 1,984,000forthetwoquartersendedFebruary28,2025[25]DeferredRevenue−Deferredsubscriptionrevenueroseby101,984,000 for the two quarters ended February 28, 2025[25] Deferred Revenue - Deferred subscription revenue rose by 10% to 94.4 million as of February 28, 2025, up from $86.1 million a year earlier[1][6]