Franklin Covey's Q3 2025 Earnings Call: Navigating Contradictions in Subscription Revenue and Market Dynamics

Subscription revenue and client behavior, impact of tariffs and government actions, sales force transition and new logo acquisition, subscription revenue outlook, education revenue and materials sales are the key contradictions discussed in Franklin Covey Co.'s latest 2025Q3 earnings call.



Revenue and Profitability Impact:
- Franklin Covey reported revenue for Q3 2025 at $67.1 million, down 9% from the prior year, with adjusted EBITDA at $7.3 million.
- The decline was primarily due to government actions and macroeconomic uncertainty.

Sales Transformation and Client Expansion:
- The company achieved a significant increase in new logo wins and expansion within existing clients, with more new logos sold in Q3 2025 than in Q3 2024.
- This was driven by the implementation of a new go-to-market strategy that separated sales teams to focus on new client acquisition and existing client expansion.

Education Division Growth:
- In the Education division, subscription revenue increased by 13% in Q3, despite a 8% decline in overall revenue.
- Growth was supported by strong demand for Leader in Me, driving transitions from individual school to district and state-wide contracts.

Cost Reduction and Efficiency:
- Franklin Covey implemented cost reduction actions, resulting in $4 million savings in Q3 and $4 million expected in Q4.
- These actions were part of efforts to offset declines in revenue related to government actions and to maintain investment in growth initiatives.