Franklin Covey Co.: Q4 FY2026 earnings call

What management said about Q4 FY2026, from the documents filed with the SEC on 4 November 2026: press release. Guidance figures: 6 new. The quarter’s numbers.

Key takeaways

Q4 revenue within updated guidance range: Fourth-quarter revenue was $70.0 million against $71.2 million a year earlier, within the updated guidance range. Full-year revenue was $261.5 million against $267.1 million. Source
Q4 Adjusted EBITDA up 9%: Q4 Adjusted EBITDA was $12.8 million, up from $11.7 million, with margin of 18.3% against 16.4%. Full-year Adjusted EBITDA was $28.9 million against $28.8 million, within the guidance range. Source
North America invoicing up 4% for year: Enterprise North America invoiced amounts were $37.0 million in Q4, essentially flat. For the full year they rose 4% to $151.4 million, from $144.9 million. Source
Deferred revenue up 4%: Consolidated deferred revenue was $116.1 million at August 31, 2026, up 4% from $111.7 million. Enterprise Division deferred revenue rose 14% to $64.9 million. Source
FY2027 revenue and Adjusted EBITDA ranges: The company gave FY2027 guidance for revenue and Adjusted EBITDA, in constant currency, and stated that growth is expected in both. Source
China direct operations move to licensee: The company agreed to move its direct China operations to a locally owned licensee partner. Closing is expected by the end of the second quarter of fiscal 2027, and reported revenue will shift to royalties. Source

“Our go-to-market model is working, and we are seeing increasingly clear evidence of its potential.”
Paul Walker, President and Chief Executive Officer

Guidance

Area	Period	Figure	Against last quarter
Revenue Source	FY2027	$263 million to $273 million	New
Adjusted EBITDA Source	FY2027	$29 million to $34 million	New
Adjusted EBITDA margin Source	FY2027	11.0% to 12.5% (midpoint 11.8%)	New
Revenue growth Source	FY2027	0.6% to 4.4% (midpoint 2.5%)	New
Adjusted EBITDA growth Source	FY2027	0.4% to 17.7% (midpoint 9.1%)	New
China transition impact on reported revenue Source	FY2027, second half	approximately $2.0 million lower	New

What changed from last quarter

New guidance: The company issued FY2027 guidance for revenue and Adjusted EBITDA. The prior-quarter release gave FY2026 guidance only. Source
New: The company entered a definitive agreement to move its direct China operations to a locally owned licensee partner. The prior-quarter release does not mention it; this release calls it previously announced. Source

Fourth quarter and fiscal 2026 results

Q4 revenue within updated guidance range: Fourth-quarter revenue was $70.0 million against $71.2 million a year earlier, within the updated guidance range. Full-year revenue was $261.5 million against $267.1 million. Source
Q4 net income rose to $7.1 million: Q4 net income was $7.1 million, or $0.62 per diluted share, against $4.4 million, or $0.34, a year earlier. Full-year net income was $4.9 million, or $0.42 per diluted share, against $3.1 million, or $0.24. Source
Q4 Adjusted EBITDA up 9%: Q4 Adjusted EBITDA was $12.8 million, up from $11.7 million, with margin of 18.3% against 16.4%. Full-year Adjusted EBITDA was $28.9 million against $28.8 million, within the guidance range. Source

Enterprise Division and North America

Enterprise revenue slightly lower: Enterprise Division revenue was $45.5 million in Q4 against $45.7 million. For the year it was $182.7 million against $188.1 million, with North America segment revenue down $5.0 million. Source
North America invoicing up 4% for year: Enterprise North America invoiced amounts were $37.0 million in Q4, essentially flat. For the full year they rose 4% to $151.4 million, from $144.9 million. Source
International Adjusted EBITDA rose: International revenue was $9.7 million in Q4 against $9.8 million. International Adjusted EBITDA was $2.3 million against $1.5 million, and $7.9 million for the year against $5.1 million. Source

“As a larger base of contracted commitments translates into reported revenue, we expect to benefit from operating leverage, with fiscal 2027 Adjusted EBITDA growing faster than revenue.”
Jessi Betjemann, Chief Financial Officer

Education and International segments

Education revenue up for year: Education Division revenue was $23.6 million in Q4 against $24.4 million. For the full year it rose to $76.2 million from $74.6 million. Source
Education Adjusted EBITDA slightly higher: Education Adjusted EBITDA was $6.9 million in Q4 against $6.2 million, and $8.0 million for the year against $8.2 million. Corporate and other costs were $3.0 million in Q4 against $3.6 million. Source
School retention at highest since 2022: Management said school retention is at its highest level since 2022, and that Leader in Me serves more than 8,000 schools worldwide. Source

Costs, restructuring and margins

Gross profit and SG&A declined: Full-year gross profit was $196.0 million against $203.6 million. Selling, general and administrative expense was $173.4 million against $180.6 million. Source
Restructuring and building exit costs: Restructuring costs were $1.1 million in Q4 and $6.7 million for the year. Building exit costs were $1.4 million for the year, and a $0.2 million loss on assets held for sale was recorded in Q4. Source
Stock-based compensation rose in Q4: Stock-based compensation was $1.0 million in Q4 against $0.1 million, and $6.6 million for the year against $5.8 million. The Q4 income tax provision was $1.5 million against $3.6 million. Source

“With larger client commitments and a more productive sales engine, we believe we are well positioned to deliver renewed revenue growth and improved profitability in fiscal 2027 and beyond.”
Paul Walker, President and Chief Executive Officer

Deferred revenue, demand and cash

Deferred revenue up 4%: Consolidated deferred revenue was $116.1 million at August 31, 2026, up 4% from $111.7 million. Enterprise Division deferred revenue rose 14% to $64.9 million. Source
Go-to-market model shows early results: Management said invoiced amounts per new-client sales professional have more than doubled since fiscal 2024, and existing clients are expanding their work with the company. Source
Client commitments give FY2027 visibility: Management said the rise in Enterprise North America invoiced amounts and deferred revenue gives greater visibility into revenue expected to be recognized in fiscal 2027. Source
Q4 operating cash flow lower: Q4 operating cash flow was $4.1 million against $9.9 million, and Q4 free cash flow was $0.7 million against $1.5 million. Full-year free cash flow was $9.2 million against $12.1 million. Source
Cash balance fell to $13.3 million: Cash and cash equivalents were $13.3 million at August 31, 2026, against $31.7 million a year earlier. The company reported liquidity above $75 million, including its $62.5 million credit facility, fully available. Source

Capital and shareholder returns

Share repurchases of $28.1 million: During FY2026 the company bought about 1,573,000 shares for $28.1 million. About 1,504,000 were bought in the open market under 10b5-1 plans, and about 69,000 were withheld for taxes on stock awards. Source
Capex and curriculum spending lower: Purchases of property and equipment were $5.4 million for the year against $8.3 million. Curriculum development costs were $7.0 million against $7.6 million. Source
Treasury stock up, equity down: Treasury stock at cost rose to $310.2 million. Total shareholders’ equity fell to $51.4 million from $66.9 million at August 31, 2025. Source

FY2027 guidance and China transition

FY2027 revenue and Adjusted EBITDA ranges: The company gave FY2027 guidance for revenue and Adjusted EBITDA, in constant currency, and stated that growth is expected in both. Source
China direct operations move to licensee: The company agreed to move its direct China operations to a locally owned licensee partner. Closing is expected by the end of the second quarter of fiscal 2027, and reported revenue will shift to royalties. Source
Adjusted EBITDA to grow faster than revenue: The CFO said that as contracted commitments convert to reported revenue, the company expects operating leverage, with FY2027 Adjusted EBITDA growing faster than revenue. Source
Growth from commitments and bookings: The company expects FY2027 growth supported by client commitments, higher Enterprise North America invoiced amounts and services bookings generated during FY2026. Source

Coming up, as management said on 4 November 2026

China licensee closing by end of Q2 FY2027: Closing of the China transition to a licensee partner is expected by the end of the second quarter of fiscal 2027. Source

Figures management reported

Figure	Reported
Schools served by Leader in Me Source	more than 8,000 schools worldwide
School retention Source	highest level since 2022
Enterprise North America invoiced amounts, FY2026 Source	$151.4 million, up 4%

Risks management discussed

Operational: China revenue moves from direct-office revenue to licensee royalties after closing, reducing reported FY2027 revenue by about $2.0 million. Source
Demand: Enterprise North America invoiced amounts were essentially flat in Q4 against the prior-year quarter. Source
Financial: Cash and cash equivalents declined to $13.3 million, and Q4 free cash flow was $0.7 million. Source

Earlier plans management reported on

Met: Full-year FY2026 revenue of $261.5 million was within the updated guidance range. Source
Met: The CFO said full-year Adjusted EBITDA was within both the original and narrowed guidance ranges. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

13907 S. Minuteman Drive, Suite 500Draper, UT 84020 www.franklincovey.com

FRANKLIN COVEY REPORTS FINANCIAL RESULTS FOR

FOURTH QUARTER AND FULL FISCAL 2026

Consolidated Fourth Quarter Revenue of $70.0 Million and Fiscal 2026 Revenue of

$261.5 Million within Updated Guidance Range

Net Income for the Fourth Quarter Increases to $7.1 Million

Fourth Quarter Adjusted EBITDA Increases 9% to $12.8 Million and Fiscal 2026

Adjusted EBITDA of $28.9 Million within Original Full-Year Guidance Range

Deferred Revenue Increases 4% Year-over-Year to $116.1 Million; Enterprise Division

Deferred Revenue Increases 14% to $64.9 Million

Liquidity Remains Strong at Over $75 Million, with $13.3 Million of Cash and

the Company’s $62.5 Million Credit Facility Fully Available

Company Provides Fiscal 2027 Guidance

Salt Lake City, Utah - Franklin Covey Co. (NYSE: FC), a global leadership and organizational performance partner that gives strategy the human edge, announced today its financial results for the fourth quarter and fiscal year ended August 31, 2026.

Fiscal 2026 results reflect growing traction from the Company’s investments in its Enterprise North America go-to-market model, where full-year invoiced amounts increased 4% and deferred revenue increased 17%, supporting the Company’s outlook for revenue and Adjusted EBITDA growth in fiscal 2027.

Fourth Quarter Fiscal 2026 Financial Overview

The Company’s consolidated revenue for Q4 FY2026 was within its updated guidance range at $70.0 million compared with $71.2 million in Q4 FY2025. The Company’s financial results for Q4 FY2026 include the following:

Enterprise Division revenue for Q4 FY2026 totaled $45.5 million compared with $45.7 million in the prior year.

Enterprise Division revenue reflected a $0.1 million decrease in North America segment revenue and a $0.1 million decrease in International segment revenue.

Enterprise North America invoiced amounts totaled $37.0 million, essentially flat compared with $37.2 million in Q4 FY2025.

Deferred revenue for the Enterprise Division increased 14% to $64.9 million compared with $57.1 million at August 31, 2025. Deferred revenue for Enterprise North America increased 17% to $59.2 million compared with $50.4 million at August 31, 2025.

Education Division revenue in Q4 FY2026 totaled $23.6 million compared with $24.4 million in the prior year.

Subscription and contractually committed services invoiced for Q4 FY2026 totaled $62.8 million compared with $61.4 million in Q4 FY2025.

The Company recognized net income for Q4 FY2026 of $7.1 million, or $0.62 per diluted share, compared with net income of $4.4 million, or $0.34 per diluted share, in Q4 FY2025.

Adjusted EBITDA for Q4 FY2026 was within Company guidance and increased 9% to $12.8 million compared with $11.7 million in the prior year.

Consolidated deferred revenue at August 31, 2026 increased 4% to $116.1 million compared with $111.7 million at August 31, 2025.

Cash provided by operating activities for Q4 FY2026 was $4.1 million compared with $9.9 million in the prior year.

Free cash flow for Q4 FY2026 was $0.7 million compared with $1.5 million in Q4 FY2025.

Cash and cash equivalents totaled $13.3 million compared with $31.7 million as of August 31, 2025.

Fiscal 2026 Financial Overview

The Company’s consolidated revenue for FY2026 was within updated guidance at $261.5 million compared with $267.1 million in FY2025. The Company’s financial results for FY2026 include the following:

Enterprise Division revenue for FY2026 totaled $182.7 million compared with $188.1 million in the prior year.

Enterprise Division revenue performance was impacted by a $5.0 million decrease in North America segment revenue and a $0.4 million decrease in International segment revenue.

Enterprise North America invoiced amounts for FY2026 increased 4% to $151.4 million compared with $144.9 million in FY2025.

Education Division revenue in FY2026 increased to $76.2 million compared with $74.6 million in the prior year.

Subscription and contractually committed services invoiced for FY2026 totaled $165.1 million compared with $151.7 million in FY2025.

The Company recognized net income for FY2026 of $4.9 million, or $0.42 per diluted share, compared with net income of $3.1 million, or $0.24 per diluted share, in FY2025.

Adjusted EBITDA for FY2026 was within Company guidance and totaled $28.9 million compared with $28.8 million in the prior year.

Cash provided by operating activities for FY2026 was $21.6 million compared with $29.0 million in the prior year.

Free cash flow for FY2026 was $9.2 million compared with $12.1 million in the prior year.

The Company purchased approximately 1,573,000 shares of its common stock for a total of $28.1 million during FY2026, including approximately 1,504,000 shares purchased in the open market under 10b5-1 trading plans and approximately 69,000 shares withheld to cover statutory income taxes on stock-based compensation awards that vested during the year.

Paul Walker, President and Chief Executive Officer, commented, “In fiscal 2026, the investments we made to build a stronger, faster-growing company gained traction and delivered measurable results. In Enterprise North America, our largest business and the primary focus of these investments, invoiced amounts grew 4% to $151.4 million, and deferred revenue grew 17% to $59.2 million. These increases reflect growing client commitments and give us greater visibility into revenue we expect to recognize in fiscal 2027.

“Our go-to-market model is working, and we are seeing increasingly clear evidence of its potential. Compared with fiscal 2024, the year before we launched the new model, invoiced amounts per new-client sales professional have more than doubled, and existing clients are expanding their work with us. Our Education business remains strong, with school retention at its highest level since 2022 and Leader in Me now serving more than 8,000 schools worldwide. With larger client commitments and a more productive sales engine, we believe we are well positioned to deliver renewed revenue growth and improved profitability in fiscal 2027 and beyond.”

Jessi Betjemann, Chief Financial Officer, said, “We delivered fourth-quarter and fiscal 2026 revenue within our updated guidance range and full-year Adjusted EBITDA within both our original and narrowed guidance ranges, while strengthening our cost structure and continuing to invest in growth. We grew fourth-quarter Adjusted EBITDA 9% despite lower revenue, reflecting the operating discipline we have built into our business. As a larger base of contracted commitments translates into reported revenue, we expect to benefit from operating leverage, with fiscal 2027 Adjusted EBITDA growing faster than revenue.”

Fiscal 2027 Guidance

The Company expects revenue and Adjusted EBITDA to grow in FY2027, supported by the growing volume of client commitments, increased invoiced amounts in Enterprise North America, and services bookings generated during FY2026. As this activity converts into reported revenue over time, the Company expects improved profitability.

As previously announced, the Company entered into a definitive agreement to transition its direct operations in China to a locally owned licensee partner, with closing expected by the end of the second quarter of fiscal 2027. Because China revenue will shift from direct-office revenue to licensee royalties after closing, the Company expects FY2027 reported revenue to be approximately $2.0 million lower than it otherwise would have been, and this impact is reflected in the Company’s FY2027 guidance, as shown in the table below. The transaction is not expected to have a material impact on the Company’s Adjusted EBITDA.

Based on current expectations, the Company provides the following guidance, in constant currency:

Total revenue in the range of $263 million to $273 million.

Adjusted EBITDA in the range of $29 million to $34 million.

	FY2026	FY2027 Guidance
$ in M	Actual	Low	Midpoint	High
Revenue	261.5	263.0	268.0	273.0
YoY Growth	-2.1%	0.6%	2.5%	4.4%
Less: China revenue impact, second half⁽¹⁾	(2.0)	-	-	-
Revenue, comparable basis	259.5	263.0	268.0	273.0
YoY Growth, comparable basis	n/a	1.4%	3.3%	5.2%
Adjusted EBITDA⁽²⁾	28.9	29.0	31.5	34.0
YoY Growth	0.4%	0.4%	9.1%	17.7%
Adjusted EBITDA margin %	11.0%	11.0%	11.8%	12.5%
⁽¹⁾ China is expected to move from a direct office to a licensee by the end of Q2 FY2027. FY2026 excludes approximately $2.0M for the second-half revenue impact of the China transition. The transition is not expected to have a material effect on Adjusted EBITDA.
⁽²⁾ Non-GAAP; see definitions.

Earnings Conference Call

On Wednesday, November 4, 2026, at 5:00 p.m. Eastern (3:00 p.m. Mountain Time) Franklin Covey will host a conference call to review its fourth quarter and full fiscal 2026 financial results. Interested persons may access a live audio webcast at https://edge.media-server.com/mmc/p/nb23ri7m or may participate via telephone by registering at https://register-conf.media-server.com/register/BI4b4514ba38524aec81bdca060efe03ee. Once registered, participants will have the option of 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the “Call Me” option to receive an automated call directly to their phone. For either option, registration will be required to access the call. A replay of the conference call webcast will be archived on the Company’s website for at least 30 days.

Forward-Looking Statements

Forward-looking statements notice

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including those statements related to the Company’s future results and profitability and other goals relating to the growth and operations of the Company. Forward-looking statements are based upon management’s current expectations and are subject to various risks and uncertainties including, but not limited to: general macroeconomic conditions; renewals of subscription contracts; the impact of strategic projects and initiatives on future financial results; growth in and client demand for add-on services; market acceptance of new products or services, including new AAP portal upgrades and content launches; impacts from geopolitical trade tensions and the general business environment; and other factors identified and discussed in the Company’s most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Many of these conditions are beyond the Company’s control or influence, any one of which may cause future results to differ materially from the Company’s current expectations, and there can be no assurance that the Company’s actual future performance will meet management’s expectations. These forward-looking statements are based on management’s current expectations, and the Company undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances subsequent to this press release.

Non-GAAP Financial Information

This earnings release includes the concepts of Adjusted EBITDA and Free Cash Flow which are non-GAAP measures. The Company defines Adjusted EBITDA as net income or loss excluding the impact of interest, income taxes, intangible asset amortization, depreciation, stock-based compensation expense, and certain other infrequently occurring items such as restructuring and building exit costs. Free Cash Flow is defined as GAAP calculated cash flows from operating activities less capitalized expenditures for purchases of property and equipment, curriculum development, and content or license rights. The Company references these non-GAAP financial measures in its decision-making because they provide supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods, and the Company believes they provide investors with greater transparency to evaluate operational activities and financial results. Refer to the attached tables for the reconciliation of the non-GAAP financial measure, Adjusted EBITDA, to consolidated net income, a related GAAP financial measure, and for the calculation of Free Cash Flow.

The Company is unable to provide a reconciliation of the above forward-looking estimate of non-GAAP Adjusted EBITDA to GAAP measures because certain information needed to make a reasonable forward-looking estimate is difficult to obtain and dependent on future events which may be uncertain, or out of the Company’s control, including the amount of AAP contracts invoiced, the number of AAP contracts that are renewed, necessary costs to deliver the Company’s offerings, such as unanticipated curriculum development costs, and other potential variables. Accordingly, a reconciliation is not available without unreasonable effort.

About Franklin Covey Co.

Franklin Covey Co. (NYSE: FC) is a global leadership and organizational performance partner that gives strategy the human edge. It helps organizations achieve the breakthrough results that matter most. Using proven, principle-centered frameworks and practices, it builds high-trust leaders, teams and cultures and helps clients translate strategy into consistent execution. For more than 40 years, it has tested this approach with thousands of clients from Fortune 100 companies to educational and government institutions, providing professional services across 160 countries. Visit www.franklincovey.com and explore insights on LinkedIn, Facebook, X, Instagram, and YouTube.

	Quarter Ended		Fiscal Year Ended
	August 31,	August 31,	August 31,	August 31,
	2026	2025	2026	2025
FRANKLIN COVEY CO.
Condensed Consolidated Income Statements
(in thousands, except per-share amounts, and unaudited)
Revenue	$69,957	$71,248	$261,455	$267,067
Cost of revenue	17,667	17,458	65,421	63,498
Gross profit	52,290	53,790	196,034	203,569
Selling, general, and administrative	40,492	42,148	173,374	180,617
Restructuring costs	1,085	-	6,735	6,723
Building exit costs	88	1,569	1,359	2,067
Loss on assets held for sale	218	-	218	-
Depreciation	1,218	1,088	4,642	4,066
Amortization	571	1,098	2,542	4,392
Income from operations	8,618	7,887	7,164	5,704
Interest income (expense), net	(25)	68	(98)	363
Income before income taxes	8,593	7,955	7,066	6,067
Income tax provision	(1,484)	(3,583)	(2,143)	(2,999)
Net income	$7,109	$4,372	$4,923	$3,068
Net income per common share:
Basic	$0.63	$0.35	$0.43	$0.24
Diluted	0.62	0.34	0.42	0.24
Weighted average common shares:
Basic	11,293	12,623	11,546	12,927
Diluted	11,553	12,778	11,726	13,053
Other data:
Adjusted EBITDA	$12,770	$11,717	$28,884	$28,757

(1) Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock-based compensation, and certain other items) is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results. For a reconciliation of this non-GAAP measure to a comparable GAAP measure, refer to the Reconciliation of Net Income to Adjusted EBITDA as shown below.

	Quarter Ended		Fiscal Year Ended
	August 31,	August 31,	August 31,	August 31,
	2026	2025	2026	2025
FRANKLIN COVEY CO.
Reconciliation of Net Income to Adjusted EBITDA
(in thousands and unaudited)
Reconciliation of net income to Adjusted EBITDA:
Net income	$7,109	$4,372	$4,923	$3,068
Adjustments:
Interest expense (income), net	25	(68)	98	(363)
Income tax provision	1,484	3,583	2,143	2,999
Amortization	571	1,098	2,542	4,392
Depreciation	1,218	1,088	4,642	4,066
Stock-based compensation	972	75	6,562	5,805
Restructuring costs	1,085	-	6,735	6,723
Building exit costs	88	1,569	1,359	2,067
Loss on assets held for sale	218	-	218	-
Gain on license liability restructuring	-	-	(338)	-
Adjusted EBITDA	$12,770	$11,717	$28,884	$28,757
Adjusted EBITDA margin	18.3%	16.4%	11.0%	10.8%

	Quarter Ended		Fiscal Year Ended
	August 31,	August 31,	August 31,	August 31,
	2026	2025	2026	2025
FRANKLIN COVEY CO.
Additional Financial Information
(in thousands and unaudited)
Revenue by Division/Segment:
Enterprise Division:
North America	$35,828	$35,898	$142,590	$147,609
International	9,668	9,770	40,078	40,455
	45,496	45,668	182,668	188,064
Education Division	23,589	24,450	76,179	74,618
Corporate and other	872	1,130	2,608	4,385
Consolidated	$69,957	$71,248	$261,455	$267,067
Gross Profit by Division/Segment:
Enterprise Division:
North America	$28,661	$30,099	$115,584	$122,601
International	7,452	7,389	30,814	31,295
	36,113	37,488	146,398	153,896
Education Division	15,707	15,767	48,327	47,735
Corporate and other	470	535	1,309	1,938
Consolidated	$52,290	$53,790	$196,034	$203,569
Adjusted EBITDA by Division/Segment:
Enterprise Division:
North America	$6,586	$7,610	$25,523	$27,398
International	2,320	1,493	7,853	5,057
	8,906	9,103	33,376	32,455
Education Division	6,856	6,179	8,022	8,184
Corporate and other	(2,992)	(3,565)	(12,514)	(11,882)
Consolidated	$12,770	$11,717	$28,884	$28,757

	August 31,	August 31,
	2026	2025
FRANKLIN COVEY CO.
Condensed Consolidated Balance Sheets
(in thousands and unaudited)
Assets
Current assets:
Cash and cash equivalents	$13,287	$31,698
Accounts receivable, less allowance for
credit losses of $2,151 and $2,929	67,771	68,415
Inventories	5,794	5,165
Prepaid expenses and other current assets	24,059	24,199
Assets held for sale	1,404	-
Total current assets	112,315	129,477
Property and equipment, net	12,460	14,324
Intangible assets, net	31,272	34,551
Goodwill	30,965	31,220
Deferred income tax assets	1,144	231
Other long-term assets	30,098	33,109
	$218,254	$242,912
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of notes payable	$-	$823
Accounts payable	6,051	8,780
Deferred revenue	112,625	106,534
Customer deposits	8,946	16,327
Accrued liabilities	22,550	24,828
Liabilities held for sale	1,004	-
Total current liabilities	151,176	157,292
Other liabilities	11,008	14,718
Deferred income tax liabilities	4,706	3,991
Total liabilities	166,890	176,001
Shareholders' equity:
Common stock	1,353	1,353
Additional paid-in capital	230,146	230,251
Retained earnings	131,195	126,272
Accumulated other comprehensive loss	(1,176)	(1,032)
Treasury stock at cost, 15,735 and 14,565 shares	(310,154)	(289,933)
Total shareholders' equity	51,364	66,911
	$218,254	$242,912

	Fiscal Year Ended
	August 31,	August 31,
	2026	2025
FRANKLIN COVEY CO.
Condensed Consolidated Free Cash Flow
(in thousands and unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$4,923	$3,068
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization	7,184	8,458
Amortization of capitalized curriculum costs	5,687	4,440
Stock-based compensation	6,562	5,805
Loss on assets held for sale	218	-
Deferred income taxes	(423)	1,468
Amortization of right-of-use operating lease assets	831	610
Gain on license obligation restructuring	(338)	-
Changes in working capital	(3,057)	5,128
Net cash provided by operating activities	21,587	28,977
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(5,375)	(8,253)
Curriculum development costs	(7,008)	(7,561)
Reacquisition of license rights	-	(1,074)
Net cash used for investing activities	(12,383)	(16,888)
Free Cash Flow	$9,204	$12,089

Contacts
Franklin Covey · Boyd Roberts · 801-817-5127 · investor.relations@franklincovey.com
Franklin Covey · Debra Lund · 801-817-6440 · Debra.Lund@franklincovey.com