Financial Data and Key Metrics Changes - FranklinCovey reported total revenue of $267.1 million for fiscal 2025, reflecting a 7% decline from the prior year due to a 10% decrease in the enterprise division, partially offset by a 1% increase in the education division [25][30] - Adjusted EBITDA for fiscal 2025 was $28.8 million, in line with guidance, and down from $46.6 million in the previous year [28][32] - Free cash flow decreased to $12.1 million from $48.9 million in fiscal 2024, driven by lower revenues and increased spending [30] Business Line Data and Key Metrics Changes - The enterprise division generated 70% of total revenue, with revenue of $188.1 million, down from $208.1 million in the prior year [30][31] - The education division's revenue was $74.6 million, a 1% increase year-over-year, with education subscription revenue growing 10% to $45.9 million [35][36] - Subscription services attachment in enterprise was strong at 53% for fiscal 2025, with North America at 56% [18][19] Market Data and Key Metrics Changes - North America segment revenue was $147.6 million, a 10% decrease from the prior year, with fourth-quarter revenue down 22% [31][32] - International direct operations revenue decreased to $29.3 million from $33.3 million, impacted by geopolitical and trade tensions [33] - Education subscription revenue growth was supported by the addition of 624 new schools, maintaining a high retention rate of 84% [20][36] Company Strategy and Development Direction - The company aims to be the partner of choice for leaders pursuing breakthrough results, focusing on combining content, technology, and services [8][10] - Strategic priorities include enhancing solutions for clients and transforming the go-to-market approach to win larger, more strategic clients [10][16] - The company is embedding AI across offerings to provide real-time coaching and feedback, enhancing client outcomes [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in fiscal 2026, with expectations for strong invoiced amounts and revenue growth in fiscal 2027 [6][42] - The operating environment remains uncertain, but there are signs of improved client decision-making and budget availability [46][47] - The company anticipates fiscal 2026 revenue in the range of $265-$275 million, with adjusted EBITDA expected between $28-$33 million [40][41] Other Important Information - The company maintained strong liquidity with over $94 million at the end of the fourth quarter, and no drawdowns on its credit facility [38] - The board approved a replenishment of the stock buyback plan, with approximately 791,000 shares purchased in the fiscal year [39] Q&A Session Summary Question: How has the decision-making environment evolved recently? - Management noted that while uncertainty remains, clients are beginning to free up budgets and move forward with business [46][47] Question: What is the status of the sales transformation? - Evidence of traction in the sales transformation includes strong invoiced growth and an increase in new logos and service bookings [48] Question: How are client renewals performing? - Client retention rates have remained consistent, with some clients expanding their contracts while others have downsized due to uncertainty [49][50] Question: What are the expectations for Q1 revenue and EBITDA? - Specific guidance for Q1 was not provided, but management indicated a typical seasonal pattern with revenue and EBITDA expected to be weighted towards the second half of the year [53][64] Question: Can you provide insights on the sales force structure? - The sales force remains stable, with no turnover reported, and future growth is expected in the hunting side of the sales force [65]

Financial Performance - Revenue for the quarter was $22.7 billion, up 35% primarily driven by higher commercial delivery volume [24] - Core loss per share improved to $1.24 compared to the previous year, reflecting higher commercial deliveries and improved operational performance [24] - Free cash flow usage was $200 million in the quarter, better than expectations, driven by higher commercial delivery volume and improved working capital [24][25] Business Segment Performance Boeing Commercial Airplanes (BCA) - BCA delivered 150 airplanes in the quarter, with revenue of $10.9 billion and an operating margin of -5.1% [25] - BCA booked 455 net orders in the quarter, with a backlog of $522 billion, up more than $60 billion sequentially [26] - The 737 program delivered 104 airplanes in Q2, with production steadily increasing to 38 per month [27] Boeing Defense, Space & Security (BDS) - BDS booked $19 billion in orders during the quarter, with revenue of $6.6 billion, up 10% [31] - Operating margin improved to 1.7%, reflecting better operational performance [31] - BDS delivered 34 aircraft and two satellites in the quarter, with a focus on stabilizing production and improving margins [31][32] Boeing Global Services (BGS) - BGS revenue was $5.3 billion, up 8% year-over-year, with an operating margin of 19.9% [33] - BGS received $5 billion in orders, ending the quarter with a backlog of $22 billion [33] Market and Strategic Insights - The company is seeing strong market demand and is focused on stabilizing production and executing planned increases [5][6] - Recent trade agreements are expected to positively impact Boeing's order momentum and pricing strategies [50][54] - The company is committed to a culture change aimed at improving accountability and performance [20][21] Management Commentary - Management expressed optimism about the recovery plan's progress and the stability of operations, while acknowledging the work still ahead [5][6] - The company is focused on maintaining a strong supply chain and managing input costs amid a dynamic trade environment [17][18] - Future cash flow expectations are positive, with a target of achieving positive free cash flow in Q4 [38][46] Q&A Session Summary Question: Free cash flow performance and guidance - Management indicated that a free cash flow target of around $3 billion for the year is reasonable, with Q3 expected to resemble Q2 usage [42][46] Question: Impact of tariffs and trade agreements - Management discussed the positive effects of recent trade agreements on input tariffs and order momentum, emphasizing the importance of maintaining favorable trade conditions [49][54] Question: Long-term delivery guidance and inventory management - Management confirmed that they are tracking ahead of delivery targets for the MAX program and are managing inventory levels effectively [70][71] Question: Engine anti-icing issue with 737 models - Management explained that delays in the engine anti-icing design are due to ongoing testing and design adjustments [74][75] Question: Future rate increases and production capacity - Management expressed confidence in achieving planned rate increases, supported by inventory levels and production stability [80][81] Question: BDS margin improvement and strike risks - Management reassured that the potential impact of strikes on BDS operations is manageable and that they are focused on returning to high single-digit margins [94][95]