Franklin Covey(FC) - 2025 Q2 - Quarterly Results

Revenue Performance - Consolidated revenue for Q2 fiscal 2025 totaled $59.6 million, a decrease of 2.8% from $61.3 million in Q2 fiscal 2024[1][3] - Education Division revenue increased by 3% to $15.1 million compared to $14.7 million in the prior year[1][3] - Enterprise Division revenues decreased to $43.6 million, down from $45.6 million in the prior year, primarily due to a $1.1 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 $61,336,000 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 $45,598,000 in the prior year[29] - The Education Division reported revenue of $15,065,000, an increase of 2.6% compared to $14,689,000 in the same quarter last year[29] Financial Metrics - Adjusted EBITDA for Q2 fiscal 2025 was $2.1 million, down from $7.4 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, with an adjusted EBITDA margin of 3.5%[27] - Gross profit for the quarter was $45,746,000, down from $46,851,000, reflecting a gross margin of 76.7%[25] - The company reported a net loss of $(1.1) million, or $(0.08) per share, compared to net income of $0.9 million, or $0.06 per diluted share, in the prior year[7][10] - Net loss for the quarter was $(1,076,000), compared to net income of $874,000 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 $275 million and $285 million, reflecting a decrease of $7 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, down from $24,726,000 for the same period in 2024[33] - Total current assets decreased to $121,044,000 from $160,253,000 as of August 31, 2024[31] - Total liabilities decreased to $148,814,000 from $178,404,000 as of August 31, 2024[31] Stock and Restructuring - The company purchased 250,772 shares of common stock for $8.7 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 $1,984,000 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]