Franklin Covey Posts Q3 Loss on Restructuring Costs, Beats EBITDA Forecasts

Franklin Covey Co. delivered mixed fiscal third-quarter results as restructuring charges drove a net loss despite better-than-expected adjusted EBITDA performance. The corporate training provider reported $67.1 million in revenue, down 8.6% year-over-year but within guidance, as macroeconomic headwinds and canceled government contracts weighed on performance.

The company absorbed $4.7 million in restructuring costs during the quarter, resulting in a $1.4 million net loss. Enterprise division revenue fell 8.9% to $47.3 million while education sales declined 7.9% to $18.6 million. Deferred subscription revenue grew 7% to $89.3 million, signaling potential future strength in recurring revenue streams.

Management maintained full-year revenue guidance of $265-$275 million but tightened the EBITDA outlook to $28-$33 million. The stock dropped 7.5% in after-hours trading following the report, reflecting investor concerns about the restructuring charges and top-line contraction.