Franklin Covey (FC) Q1 2026 earnings summary

Executive summary

• Q1 FY2026 revenue was $64.0 million, down from $69.1 million in Q1 FY2025, reflecting macroeconomic headwinds, lower deferred revenue, and canceled U.S. government contracts.

• Net loss for Q1 FY2026 was $3.3 million, or $(0.27) per share, compared to net income of $1.2 million, or $0.09 per share, in the prior year.

• Adjusted EBITDA was $3.7 million, down from $7.7 million year-over-year, with margin dropping to 5.7% from 11.1%.

• Strong growth in North America invoiced amounts signals positive momentum from new go-to-market strategy.

• Deferred subscription revenue increased 5% year-over-year to $100.2 million.

Financial highlights

• Gross profit was $48.4 million (75.5% margin), down from $52.7 million (76.3% margin) in Q1 FY2025.

• Operating SG&A was $44.7 million, flat year-over-year, but as a percentage of revenue increased to 69.8% from 65.2%.

• Free cash flow for Q1 FY2026 was negative $3.7 million, compared to $11.4 million in Q1 FY2025.

• Cash provided by operating activities was $0.1 million, down from $14.1 million in the prior year.

• Subscription and subscription services revenue was $52.0 million, down from $55.8 million.

Outlook and guidance

• FY2026 revenue guidance reaffirmed at $265–$275 million; Adjusted EBITDA guidance at $28–$33 million.

• 45–50% of revenue and 25–30% of Adjusted EBITDA expected in the first half, with back-half weighting due to Education contract timing.

• Margin expansion anticipated in the second half as cost savings and operating leverage build.

• Expects strong invoiced growth in FY2026 to drive meaningful reported growth in FY2027.