Franklin Covey (NYSE:FC) Posts Quarterly Earnings Results, Misses Expectations By $0.20 EPS

Franklin Covey (NYSE:FC) issued its quarterly earnings data on Wednesday. The business services provider reported ($0.17) earnings per share for the quarter, missing the consensus estimate of $0.03 by ($0.20), FiscalAI reports. The business had revenue of $59.65 million during the quarter, compared to the consensus estimate of $58.71 million. Franklin Covey had a positive return on equity of 9.98% and a negative net margin of 0.54%.

Here are the key takeaways from Franklin Covey’s conference call:

• Invoiced growth accelerated: Consolidated invoiced amounts rose 5% year‑over‑year (Enterprise North America +7%, or +10% excluding government), and billed deferred subscription revenue increased 16% to $59M, supporting higher reported revenue in future periods.
• Profitability and cash flow improved materially: Q2 Adjusted EBITDA nearly doubled to $4.1M and free cash flow was $13.2M (vs. a -$3.6M loss a year ago), while liquidity remains strong (~$76M) and management has repurchased ~$28M of shares year‑to‑date.
• Guidance affirmed with a path to FY27 upside: Management reaffirmed FY26 revenue ($265M–$275M) and Adjusted EBITDA ($28M–$33M) targets and expects invoice-led acceleration of reported revenue, EBITDA, and cash flow in fiscal 2027 as deferred revenue converts.
• Strategic positioning around AI and expansion opportunity: Management argues AI is increasing demand for leadership/change‑management services, the company is embedding AI into offerings, and current client penetration is only ~5–10%, implying substantial expansion runway.
• Near‑term headwinds and costs remain: Reported revenue was flat in Q2, gross margin dipped to 75.9% (amortization and mix), the company incurred $1.5M of restructuring costs and other one‑time expenses, and federal spending reductions have weighed on government business.

Franklin Covey Trading Up 2.1%

Franklin Covey stock opened at $16.13 on Thursday. Franklin Covey has a 12-month low of $11.16 and a 12-month high of $28.13. The firm has a market capitalization of $186.34 million, a price-to-earnings ratio of -134.40, a P/E/G ratio of 0.96 and a beta of 0.74. The firm has a 50 day moving average of $15.82 and a 200 day moving average of $16.90.

Key Stories Impacting Franklin Covey

Here are the key news stories impacting Franklin Covey this week:

• Positive Sentiment: Revenue roughly met or slightly beat expectations and management highlighted strong growth in the Education division, supporting near-term demand and recurring revenue potential. Read More.
• Positive Sentiment: Company reaffirmed its fiscal 2026 outlook and emphasized ongoing strategy execution, which investors often view as a vote of confidence from management. Read More.
• Positive Sentiment: Some headlines and market reactions framed the print as a revenue beat / strong cash‑flow story, helping push the stock higher in aftermarket trading. Read More.
• Neutral Sentiment: Full earnings release and company materials are available (detailed slides and call) for investors wanting to dig into segment metrics, guidance commentary and backlog. Read More.
• Neutral Sentiment: Complete earnings call transcript and management Q&A are published (useful for assessing cadence on bookings, pricing and expense timing). Read More.
• Negative Sentiment: Reported EPS missed consensus (company reported a loss per share) and delivered a small net loss for the quarter — a clear near-term earnings headwind and the main reason some investors are cautious. Read More.
• Negative Sentiment: Cash and operating cash flow trends raised flags: reported cash balances were lower year‑over‑year and operating cash was weak, which could pressure liquidity or make investors wary of capital allocation. Read More.
• Negative Sentiment: Recent insider selling and notable institutional reductions in recent quarters are potential negatives for sentiment and may increase near-term supply pressure on the shares. Read More.

Analyst Ratings Changes

Separately, Barrington Research reiterated an “outperform” rating and set a $25.00 price target on shares of Franklin Covey in a research note on Wednesday, March 25th. Two equities research analysts have rated the stock with a Buy rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus price target of $26.00.

Institutional Trading of Franklin Covey

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Alliancebernstein L.P. raised its position in shares of Franklin Covey by 70.4% during the 3rd quarter. Alliancebernstein L.P. now owns 1,052,680 shares of the business services provider’s stock valued at $20,433,000 after purchasing an additional 434,965 shares during the period. Punch & Associates Investment Management Inc. raised its holdings in Franklin Covey by 0.3% during the third quarter. Punch & Associates Investment Management Inc. now owns 591,318 shares of the business services provider’s stock valued at $11,477,000 after acquiring an additional 1,811 shares during the period. Federated Hermes Inc. lifted its position in shares of Franklin Covey by 83.9% in the fourth quarter. Federated Hermes Inc. now owns 376,393 shares of the business services provider’s stock valued at $6,316,000 after acquiring an additional 171,744 shares in the last quarter. Geode Capital Management LLC lifted its position in shares of Franklin Covey by 0.5% in the fourth quarter. Geode Capital Management LLC now owns 301,459 shares of the business services provider’s stock valued at $5,060,000 after acquiring an additional 1,626 shares in the last quarter. Finally, Millennium Management LLC boosted its stake in shares of Franklin Covey by 886.1% in the third quarter. Millennium Management LLC now owns 259,618 shares of the business services provider’s stock worth $5,039,000 after acquiring an additional 233,291 shares during the period. 69.88% of the stock is owned by hedge funds and other institutional investors.

About Franklin Covey

Franklin Covey Co (NYSE:FC) is a global consulting and training firm specializing in performance improvement solutions for individuals and organizations. The company offers a range of services, including leadership development, productivity tools, execution frameworks and assessments designed to foster personal effectiveness and drive business results. Its flagship offerings integrate training workshops, digital resources and coaching to support clients in areas such as strategic planning, team productivity and change management.

The origins of Franklin Covey trace back to the merger in 1997 of Franklin Quest Co, founded in 1983 by Hyrum W.