Franklin Covey Co. provides specialized training and advisory services across the globe, assisting both businesses and individuals. The company's expertise lies in ...
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Operator: Thank you for standing by. Welcome to the Franklin Covey Third Quarter 26 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you will need to press star-11 on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press star-11 again. As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program, Boyd Roberts, head of investor relations. Please go ahead, sir. Boyd Roberts: Thank you, and good afternoon, everyone. Thank you for joining us today on Franklin Covey's Third Quarter 2026 Earnings Call. I'd like to turn it over to Mr. Paul Walker, our Chief Executive Officer. Paul Walker: Thank you, Boyd. Good afternoon, everyone, and thank you for joining us today. There are 2 themes I'd like to address today. The first is that the company's strategic strength and resiliency continues to be reflected in the company's performance, including in this year's third quarter results and in our expected results for the year. The second theme is that the strategic importance of the opportunities and challenges we help our clients address, coupled with our focused investments in high-impact solutions and go-to-market activities, are further strengthening our strategic positioning and establishing the foundation for accelerated growth. Before I do, I want to address our full year guidance. Q3 was our third consecutive quarter finishing in line with our expectations, and the underlying business is performing as we expected. We are revising our revenue guidance to allow for: a timing shift in $2 million of previously invoiced services for which the delivery shifted from this year to next year for a contract in Enterprise North America; a $2 million new school contract with an existing statewide education client that received gubernatorial budget reductions that we expect to return next year; and the approximately $2 million impact of the challenging international environment due to ongoing geopolitical tensions. Our new expectation is that revenue will be between $260 million and $267 million. We are maintaining our prior adjusted EBITDA guidance within a narrower range of $28 million to $31 million. I wanted to acknowledge this upfront so it's not a distraction as I walk you through what's actually happening in the business. So to our themes. The first theme — the company's strength and resiliency continue to be reflected in our performance, including Q3 being our third consecutive quarter in line with expectations. The importance of the challenges and opportunities we help organizations address is reflected by both the high levels of retention, expansion and purchases of services we're achieving with existing clients, and by our increasing revenue from winning new clients across both our …
Est. EPS $0.15 · Revenue $67.52M · 2 analysts
Est. EPS $0.01 · Revenue $62.31M · 1 analysts
| Metric | Latest | YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength. | QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes. |
|---|---|---|---|
| The total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three). |
| Name | Title | Compensation | Gender | Year Born | Status |
|---|---|---|---|---|---|
Holly Procter | President of Enterprise Division | USD 720,985 | Female | 1986 | Active |
Paul S. Walker | President, Chief Executive Officer & Director | USD 683,195 |
| Male |
| 1976 |
| Active |
Jessica G. Betjemann | Executive Vice President & Chief Financial Officer | USD 515,422 | Female | 1972 | Active |
Michael Sean Merrill Covey | President of Education Division | USD 505,674 | Male | 1964 | Active |
Colleen Dom | Executive Vice President of Operations | USD 361,678 | Female | 1962 | Active |
A. Derek Hatch | Chief Accounting Officer, Controller & Treasurer | — | Male | 1966 | Active |
Boyd Roberts | Head of Investor Relations | — | Male | — | Active |
Josh Farrell | Managing Director of Australia & New Zealand | — | Male | — | Active |
Debra S. Lund | Global Director of Corporate Public Relations | — | Female | — | Active |
Adam Merrill | Executive Vice President of Market & Customer Intelligence | — | Male | — | Active |
Est. EPS $0.32 · Revenue $69.22M · 1 analysts
Est. EPS $0.98 · Revenue $274.79M · 3 analysts
| $267.1M |
| -7.0% |
| +13.7% |
| Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day. | $3.1M | -86.9% | +255.7% |
| Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials. | +76.2% | -1.0% | -2.2% |
| Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on). | +2.1% | -81.4% | +980.0% |
| Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales. | +1.1% | -85.9% | +236.9% |
| Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock. | $12.1M | -78.6% | -100.2% |
| FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine. | +4.5% | -77.0% | -100.2% |
| Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe. | 11.7% | +61.0% | -100.0% |
| Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking. | 0.82x | -16.6% | +4.5% |
| Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground. | $242.9M | -7.1% | -4.1% |
| Metric | Annual (A vs E) | Annual Surprise | Quarter (A vs E) | Quarter Surprise |
|---|---|---|---|---|
| EPS Surprise | 0.24 vs 0.34 | -29.4% | 0.27 vs 0.28 | -2.7% |
| Revenue Surprise | $267.1M vs $266.9M | +0.1% | $67.8M vs $68.3M | -0.8% |
| Date | Executive | Title | Security | Side | Shares | Price |
|---|---|---|---|---|---|---|
| Jul 13, 2026 | Dom Colleen D | officer: COO | Common Shares | D | 1,999 | — |
| Jun 3, 2026 | Procter Holly | officer: President, Enterprise Division | Common shares | A | 3,385 | — |
| Jun 3, 2026 | Procter Holly | officer: President, Enterprise Division | Common shares | D | 989 | $23.30 |
| Apr 7, 2026 | WHITMAN ROBERT A | director | Common shares | D | 26,258 | — |
| Jan 29, 2026 | WHITMAN ROBERT A | director | Common shares | D | 4,834 | — |
