Franklin Covey Q3 EPS USD 0.27

Franklin Covey Co. (NYSE: FC) reported earnings for the third quarter of fiscal 2024, ending May 31, 2024, with a net income of $5.7 million, or $0.43 per diluted share, representing a 25% increase compared to the same period in fiscal 2023. This marks a strong performance for the company, which reaffirmed its guidance for fiscal 2024.

The company’s consolidated revenue for the quarter rose to $73.4 million, up from $71.4 million in the prior year. This 3% increase was driven by growth in the Education Division, which saw a 18% rise in revenue to $20.1 million, primarily due to increased classroom materials and membership subscription revenues. Meanwhile, the Enterprise Division reported $52.0 million in revenue, below the $53.2 million recorded in the same period of fiscal 2023.

Subscription and subscription services revenue totaled $60.8 million for the quarter, a 6% increase compared to the third quarter of fiscal 2023. This growth reflects the continued strength of Franklin Covey’s subscription-based offerings, including the All Access Pass (AAP), which saw 4% growth in subscription revenue and strong retention rates in the United States and Canada.

Operating income for the quarter increased by 27% to $8.3 million, compared to $6.6 million in fiscal 2023. Adjusted EBITDA for the third quarter reached $13.9 million, a 17% increase from $11.9 million in the prior year. This performance was supported by strong cash flow generation, with operating cash flows reaching $38.4 million and free cash flow increasing to $30.6 million for the first three quarters of fiscal 2024.

Franklin Covey also continued its share repurchase program, buying back $25.8 million worth of its common stock through May 31, 2024. The company’s liquidity remains robust, with $36.6 million in cash and no drawdowns on its $62.5 million credit facility.

Looking ahead, Franklin Covey expects to achieve all-time highs in revenue, Adjusted EBITDA, and Free Cash Flow in fiscal 2024, despite ongoing economic uncertainties. The company remains confident in the long-term value of its subscription model and its ability to deliver consistent growth and returns to shareholders.