Franklin Covey Co (FC)

The AI Winners Won’t Just Be The Most Technological. They’ll Be The Most Human.July 1, 2026 8:44 PM
Business Wire FranklinCovey’s research reveals why early productivity gains don’t guarantee lasting competitive advantage in the AI era. Technology investments in AI tools are leading to greater organizational productivity and efficiency, but the time savings are not being applied to work that is essential to advancing the team’s overall performance, according to a new research report on AI adoption conducted by FranklinCovey (NYSE:FC). Only 35% of employees reinvest time saved through use of AI tools in innovation, strategic thinking, or deeper client engagement, FranklinCovey Institute researchers found. “Technology enables progress, but humans mobilize technology and people to drive breakthroughs,” said Paul Walker, Franklin Covey CEO. “AI frees up time for employees, but that doesn’t automatically result in higher-value work. That comes from human leadership with the mindsets and behaviors that drive performance. Organizations winning with AI won’t just be the most technological. They’ll be those that will value and develop leaders with capabilities that amplify human potential.” FranklinCovey’s research findings are published in a comprehensive Insight Report titled “AI Transformation & the Human Imperative: From Baseline to Breakthrough.” Despite massive investments in AI tools and automation, the report reveals a paradox at the heart of enterprise AI adoption: Just 9% of employees say their manager explains how AI will help the business grow 92% of workers spend hours each week waiting for clarity to resolve misalignment 36% of employees hesitate to make decisions without manager approval The report is based on extensive research including a global survey of more than 500 managers, individual contributors, director- to executive-level leaders, and in-depth consultant interviews across diverse industries. Mistaking Early Productivity for Lasting Advantage: AI Raises the Performance Baseline, Not the Ceiling AI delivers impressive short-term gains. In an interview, a global technology leader cited that his organization’s AI tools cut time by 75%, reduced costs by 30-40%, and improved productivity across the board, freeing up time for more strategic work. The survey data reinforces that optimism: 74% of employees agree that AI improves their work, and 80% can clearly articulate how it increases efficiency However, the report identifies “the baseline trap” of mistaking early productivity wins for lasting advantage. As AI becomes standard across industries, early wins become baseline, and competitive advantages equalize quickly. What differentiates organizations today becomes standard practice tomorrow. AI raises the performance baseline, but it doesn’t raise the ceiling. The question isn’t just how to adopt AI, but how to achieve performance above the new baseline once others catch up. “AI is a technology that can lift everyone, so if you don’t work to reimagine your own performance ceiling and that of your organization, the gap between ‘standard’ and ‘excellence’ eventually vanishes,” said Adam Merrill, EVP of Market & Customer Intelligence. “Achieving breakthroughs beyond the baseline requires effective human leadership. AI does not decide what matters most. It does not build trust across teams. It does not translate strategy into shared meaning. That’s why human capabilities that can’t be automated are more valuable now than ever before.” The Hidden Cost: Energy Drain and Adoption Gaps Despite AI’s efficiency gains, the research uncovered a troubling secondary effect. Nearly three in ten employees report feeling less motivated today than a year ago. Many are experiencing an “energy drain” despite increased productivity. Reliance on AI has reduced peer interaction, leaving people feeling more isolated despite being more “efficient.” This is an overlooked cost of many tech-first strategies, which optimize output while slowly sapping human energy. The result is a rise in burnout and a decline in employee engagement. Additional AI adoption barriers persist across organizations: 36% of employees disagree that their manager reinforces AI use in day-to-day work 25% say expectations for AI use are unclear 42% report that best practices are not consistently shared “Driving AI adoption is not primarily a technical challenge. It is a human one,” said Merrill. “Without clear, intentional leadership and communication, it’s common for employees to fill information voids with negative assumptions rather than embracing new tools.” Trust: The Infrastructure That Cannot Be Automated The research reveals a critical finding. Organizations intentionally investing in people-first leadership are nearly three times more likely to outperform their peers, in results, speed, adaptability, and engagement. High-trust environments deliver measurable performance improvements in higher employee motivation, lower absenteeism, lower turnover, more revenue per employee, and outperformance in market value. “In an AI-enabled world, distinctly human capabilities matter more, not less. Trust, judgment, character, discernment, creativity, collaboration, and execution cannot be automated or outsourced,” said Holly Procter, President, FranklinCovey Enterprise Division. “AI adoption doesn't move at the speed of technology. It moves at the speed of trust. And great leaders who intentionally build high-trust cultures are the accelerators of transformation.” The Perception Gap: A Blind Spot for Leaders The research conducted by FranklinCovey Institute uncovered a widening perception gap between how leaders believe they are showing up and how their teams experience them. Fewer than 7% of teams describe their trust level as world-class, and when employees graded executive leadership overall, the average score was a failing grade. Technology itself can unintentionally widen these gaps. AI systems obscure decision-making logic, automated workflows reduce human interaction, and messages pushed at scale are rarely translated with care. Leaders might believe clarity has been delivered because information has been distributed, while employees experience confusion, distance, or a sense of threat, the report found. The Path Forward: The “Breakthrough Zone” The report identifies a “Breakthrough Zone” where human capabilities like trust, judgment, and collaboration act as force multipliers, accelerating performance beyond what technology alone can deliver. In this zone, teams move faster because friction is reduced, and energy flows toward progress rather than protection. The research reveals that the most critical leadership activities remain profoundly human and cannot be outsourced to AI. Mobilizing people Holding others accountable Building shared momentum “The future doesn’t belong to organizations that simply adopt AI faster,” said Walker. “It belongs to those who integrate it wisely, using technology to amplify human capabilities rather than replace them. The work of leadership has never been more consequential. That’s the Human Imperative.” FranklinCovey’s AI Readiness Solution FranklinCovey is helping companies, including some of the world’s largest technology firms, get more from their AI investments. Its solution builds the behaviors that drive adoption across entire organizations: a mindset for experimentation, a framework for leading teams through disruption, and the path to move through resistance and uncertainty. To learn more, call 1-888-868-1776 or visit www.franklincovey.com. Download the full FranklinCovey Institute Impact Report, “AI Transformation & The Human Imperative,” here. About FranklinCovey FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube. View source version on businesswire.com: https://www.businesswire.com/news/home/20260630513189/en/ Media Contact
Debra Lund

Franklin Covey Reports Third Quarter Fiscal 2026 Financial ResultsJuly 1, 2026 4:15 PM
Business Wire Consolidated Third Quarter Revenue Increases 1% to $67.8 Million Invoiced Amounts in Enterprise North America Increase 4% to $36.7 Million Deferred Revenue Increases 7% to $96.0 Million Net Income for the Third Quarter Increases to $3.1 Million Adjusted EBITDA Increases 14% to $8.3 Million Liquidity Remains Strong at Over $74 Million, with $12.0 Million of Cash and the Company’s $62.5 Million Credit Facility Fully Available Company Updates Guidance for Fiscal 2026 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 third quarter of fiscal 2026, which ended on May 31, 2026. Third Quarter Fiscal 2026 Financial Overview The Company’s consolidated revenue for Q3 FY2026 increased to $67.8 million compared with $67.1 million in Q3 FY2025. The Company’s financial results for Q3 FY2026 include the following: Enterprise Division revenue for Q3 FY2026 increased to $48.1 million compared with $47.3 million in the prior year. Enterprise Division revenue reflected a $1.0 million increase in North America segment revenue partially offset by a $0.2 million decrease in International segment revenue. The North America segment was favorably affected by higher service revenue, partially offset by lower recognized subscription revenue. Enterprise North America invoiced amounts grew 4% year-over-year. Deferred revenue for the Enterprise Division increased 15% year-over-year. Education Division revenue in Q3 FY2026 increased to $19.0 million compared with $18.6 million in the prior year. The increase was driven by higher subscription revenue, primarily due to the delivery of more training and coaching days, partially offset by decreased materials revenue during the quarter. Consolidated subscription and subscription services revenue for Q3 FY2026 was $57.5 million compared with $57.7 million in Q3 FY2025. Subscription and contractually committed services invoiced for Q3 FY2026 totaled $37.0 million, growth of 17%, compared with $31.7 million in Q3 FY2025. The Company recognized net income for Q3 FY2026 of $3.1 million, or $0.27 per diluted share, compared with a net loss of $(1.4) million, or $(0.11) per share, in Q3 FY2025. Adjusted EBITDA for Q3 FY2026 increased 14% to $8.3 million compared with $7.3 million in the prior year. Consolidated deferred revenue at May 31, 2026 increased 7% to $96.0 million compared with $89.3 million at May 31, 2025. At May 31, 2026, 59% of the Company’s AAP contracts in North America were for at least two years, compared with 58% at May 31, 2025, and the percentage of contracted amounts represented by multi-year contracts was 60% compared with 62% on May 31, 2025. Unbilled deferred revenue totaled $61.1 million at May 31, 2026, compared with $62.0 million at May 31, 2025. Cash provided by operating activities for Q3 FY2026 was $1.1 million compared with $6.3 million in the prior year. Free cash flow for Q3 FY2026 was $(1.0) million compared with $2.8 million in Q3 FY2025. Cash and cash equivalents totaled $12.0 million compared with $33.7 million as of May 31, 2025. Paul Walker, President and Chief Executive Officer commented, “We are pleased with the continued strong momentum particularly in Enterprise North America, which achieved 4% growth in invoiced amounts in the third quarter, or 6% year-to-date, and where we achieved 18% growth in our deferred revenue balance year-over-year, and over 25% growth in our year-to-date services booking pace – all of which position us well for meaningful growth in fiscal 2027. This marks our third consecutive quarter of invoiced growth in Enterprise North America, reflecting both the increasing strategic importance of what we do for our clients and the traction from the go-to-market transformation we implemented last year. While we experienced an unexpected headwind in our Education business due to a last-minute state budget reduction that removed funding for a large state contract, the underlying strength of our business across both Enterprise North America and Education remains solid and we remain confident in our trajectory for meaningful growth in fiscal 2027 and beyond.” Jessi Betjemann, Chief Financial Officer said, “In the third quarter, we demonstrated strong operational discipline, with Adjusted EBITDA growing 14% to $8.3 million. We are pleased that our consolidated deferred revenue balance increased 7% year-over-year to $96.0 million and that our balance sheet remains strong with over $74 million in total liquidity. We are revising our fiscal 2026 revenue guidance to a range of $260 million to $267 million while maintaining our expectation to achieve Adjusted EBITDA guidance within a narrower range through continued cost discipline.” Fiscal 2026 Guidance The Company has revised its revenue guidance to allow for a timing shift in previously invoiced services delivery from this year to next for a large contract in Enterprise North America, a large new school contract with an existing state-wide Education client that experienced gubernatorial budget reductions which we expect to return next year, and the impact of the challenging international environment due to ongoing geo-political tensions. These factors, combined with a disciplined view of the variability risk that could occur as we close the year, have led the Company to revise its revenue guidance. The Company updates its fiscal 2026 guidance to the following, in constant currency: Total revenue in the range of $260 million to $267 million, versus prior guidance of $265 million to $275 million. Adjusted EBITDA in the range of $28 million to $31 million, within prior guidance of $28 million to $33 million. Despite the revision of the revenue guidance range, the Company has maintained its prior Adjusted EBITDA guidance within a narrower range, reflecting the effectiveness of cost reduction measures implemented throughout the year. The Company believes it is well-positioned to deliver net revenue, Adjusted EBITDA, and Free Cash Flow growth in fiscal 2027 and beyond. Earnings Conference Call On Wednesday, July 1, 2026, at 5:00 p.m. Eastern (3:00 p.m. Mountain Time) Franklin Covey will host a conference call to review its third quarter fiscal 2026 financial results. Interested persons may access a live audio webcast at https://edge.media-server.com/mmc/p/8yjq5b3i or may participate via telephone by registering at https://register-conf.media-server.com/register/BI57ddeb8339fa49c0a62b3ff26faa5415. 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 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 (loss), 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 LinkedIn, Facebook, X, Instagram, and YouTube. FRANKLIN COVEY CO. Condensed Consolidated Statements of Operations (in thousands, except per-share amounts, and unaudited)     Quarter Ended Three Quarters Ended May 31, May 31, May 31, May 31,   2026       2025     2026       2025     Revenue $ 67,807   $ 67,121   $ 191,499   $ 195,819   Cost of revenue   17,710     15,799     47,755     46,040   Gross profit   50,097     51,322     143,744     149,779     Selling, general, and administrative   43,263     46,232     132,882     138,468   Restructuring costs   696     4,739     5,650     6,723   Building exit costs   143     444     1,272     498   Depreciation   1,185     1,012     3,424     2,979   Amortization   614     1,098     1,971     3,294   Income (loss) from operations   4,196     (2,203 )   (1,455 )   (2,183 ) Interest income (expense), net   (30 )   76     (72 )   295   Income (loss) before income taxes   4,166     (2,127 )   (1,527 )   (1,888 ) Income tax benefit (provision)   (1,081 )   718     (659 )   584   Net income (loss) $ 3,085   $ (1,409 ) $ (2,186 ) $ (1,304 )   Net income (loss) per common share: Basic and diluted $ 0.27   $ (0.11 ) $ (0.19 ) $ (0.10 )   Weighted average common shares: Basic   11,260     12,891     11,630     13,028   Diluted   11,451     12,891     11,630     13,028     Other data: Adjusted EBITDA(1) $ 8,331   $ 7,307   $ 16,115   $ 17,041   (1) Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stockbased 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 (Loss) to Adjusted EBITDA as shown below. FRANKLIN COVEY CO. Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands and unaudited)   Quarter Ended Three Quarters Ended May 31, May 31, May 31, May 31,   2026       2025       2026       2025   Reconciliation of net income (loss) to Adjusted EBITDA: Net income (loss) $ 3,085   $ (1,409 ) $ (2,186 ) $ (1,304 ) Adjustments: Interest expense (income), net   30     (76 )   72     (295 ) Income tax provision (benefit)   1,081     (718 )   659     (584 ) Amortization   614     1,098     1,971     3,294   Depreciation   1,185     1,012     3,424     2,979   Stock-based compensation   1,497     2,217     5,591     5,730   Restructuring costs   696     4,739     5,650     6,723   Building exit costs   143     444     1,272     498   Gain on license liability restructuring   -     -     (338 )   -   Adjusted EBITDA $ 8,331   $ 7,307   $ 16,115   $ 17,041     Adjusted EBITDA margin   12.3 %   10.9 %   8.4 %   8.7 % FRANKLIN COVEY CO. Additional Financial Information (in thousands and unaudited)   Quarter Ended Three Quarters Ended May 31, May 31, May 31, May 31,   2026       2025       2026       2025   Revenue by Division/Segment: Enterprise Division: North America $ 38,024   $ 37,054   $ 106,763   $ 111,711   International   10,052     10,212     30,410     30,685     48,076     47,266     137,173     142,396   Education Division   18,998     18,640     52,590     50,169   Corporate and other   733     1,215     1,736     3,254   Consolidated $ 67,807   $ 67,121   $ 191,499   $ 195,819     Gross Profit by Division/Segment: Enterprise Division: North America $ 30,213   $ 30,708   $ 86,923   $ 92,503   International   7,616     7,869     23,362     23,905     37,829     38,577     110,285     116,408   Education Division   11,936     12,227     32,620     31,968   Corporate and other   332     518     839     1,403   Consolidated $ 50,097   $ 51,322   $ 143,744   $ 149,779     Adjusted EBITDA by Division/Segment: Enterprise Division: North America $ 7,748   $ 6,201   $ 18,938   $ 19,788   International   2,073     1,662     5,533     3,565     9,821     7,863     24,471     23,353   Education Division   1,685     2,053     1,166     2,006   Corporate and other   (3,175 )   (2,609 )   (9,522 )   (8,318 ) Consolidated $ 8,331   $ 7,307   $ 16,115   $ 17,041   FRANKLIN COVEY CO. Condensed Consolidated Balance Sheets (in thousands and unaudited)   May 31, August 31,   2026     2025   Assets Current assets: Cash and cash equivalents $ 11,972   $ 31,698   Accounts receivable, less allowance for credit losses of $2,091 and $2,929   50,285     68,415   Inventories   5,804     5,165   Prepaid expenses and other current assets   23,745     24,199   Total current assets   91,806     129,477     Property and equipment, net   12,557     14,324   Intangible assets, net   31,843     34,551   Goodwill   31,220     31,220   Deferred income tax assets   242     231   Other long-term assets   30,342     33,109   $ 198,010   $ 242,912     Liabilities and Shareholders' Equity Current liabilities: Current portion of notes payable $ -   $ 823   Accounts payable   6,424     8,780   Deferred revenue   92,950     106,534   Customer deposits   20,027     16,327   Accrued liabilities   20,728     24,828   Total current liabilities   140,129     157,292     Other liabilities   10,921     14,718   Deferred income tax liabilities   4,024     3,991   Total liabilities   155,074     176,001     Shareholders' equity: Common stock   1,353     1,353   Additional paid-in capital   229,260     230,251   Retained earnings   124,086     126,272   Accumulated other comprehensive loss   (1,170 )   (1,032 ) Treasury stock at cost, 15,756 and 14,565 shares   (310,593 )   (289,933 ) Total shareholders' equity   42,936     66,911   $ 198,010   $ 242,912   FRANKLIN COVEY CO. Condensed Consolidated Free Cash Flow (in thousands and unaudited)   Three Quarters Ended May 31, May 31, 2026   2025     CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (2,186 ) $ (1,304 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,395   6,273   Amortization of capitalized curriculum costs 4,078   3,269   Stock-based compensation 5,591   5,730   Deferred income taxes 33   12   Amortization of right-of-use operating lease assets 640   392   Gain on license obligation restructuring (338 ) -   Changes in working capital 4,263   4,667   Net cash provided by operating activities 17,476   19,039     CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (3,920 ) (4,050 ) Curriculum development costs (5,079 ) (4,095 ) Reacquisition of license rights -   (324 ) Net cash used for investing activities (8,999 ) (8,469 )   Free Cash Flow $ 8,477   $ 10,570     View source version on businesswire.com: https://www.businesswire.com/news/home/20260701754650/en/ Investor Contact:
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Debra.Lund@franklincovey.com Original: Franklin Covey Reports Third Quarter Fiscal 2026 Financial Results

The AI Winners Won’t Just Be The Most Technological. They’ll Be The Most Human.July 1, 2026 9:08 AM
Business Wire FranklinCovey’s research reveals why early productivity gains don’t guarantee lasting competitive advantage in the AI era. Technology investments in AI tools are leading to greater organizational productivity and efficiency, but the time savings are not being applied to work that is essential to advancing the team’s overall performance, according to a new research report on AI adoption conducted by FranklinCovey (NYSE:FC). Only 35% of employees reinvest time saved through use of AI tools in innovation, strategic thinking, or deeper client engagement, FranklinCovey Institute researchers found. “Technology enables progress, but humans mobilize technology and people to drive breakthroughs,” said Paul Walker, Franklin Covey CEO. “AI frees up time for employees, but that doesn’t automatically result in higher-value work. That comes from human leadership with the mindsets and behaviors that drive performance. Organizations winning with AI won’t just be the most technological. They’ll be the those that will value and develop leaders with capabilities that amplify human potential.” FranklinCovey’s research findings are published in a comprehensive Insight Report titled “AI Transformation & the Human Imperative: From Baseline to Breakthrough.” Despite massive investments in AI tools and automation, the report reveals a paradox at the heart of enterprise AI adoption: Just 9% of employees say their manager explains how AI will help the business grow 92% of workers spend hours each week waiting for clarity to resolve misalignment 36% of employees hesitate to make decisions without manager approval The report is based on extensive research including a global survey of more than 500 managers, individual contributors, director- to executive-level leaders, and in-depth consultant interviews across diverse industries. Mistaking Early Productivity for Lasting Advantage: AI Raises the Performance Baseline, Not the Ceiling AI delivers impressive short-term gains. In an interview, a global technology leader cited that his organization’s AI tools cut time by 75%, reduced costs by 30-40%, and improved productivity across the board, freeing up time for more strategic work. The survey data reinforces that optimism: 74% of employees agree that AI improves their work, and 80% can clearly articulate how it increases efficiency However, the report identifies “the baseline trap” of mistaking early productivity wins for lasting advantage. As AI becomes standard across industries, early wins become baseline, and competitive advantages equalize quickly. What differentiates organizations today becomes standard practice tomorrow. AI raises the performance baseline, but it doesn’t raise the ceiling. The question isn’t just how to adopt AI, but how to achieve performance above the new baseline once others catch up. “AI is a technology that can lift everyone, so if you don’t work to reimagine your own performance ceiling and that of your organization, the gap between ‘standard’ and ‘excellence’ eventually vanishes,” said Adam Merrill, EVP of Market & Customer Intelligence. “Achieving breakthroughs beyond the baseline requires effective human leadership. AI does not decide what matters most. It does not build trust across teams. It does not translate strategy into shared meaning. That’s why human capabilities that can’t be automated are more valuable now than ever before.” The Hidden Cost: Energy Drain and Adoption Gaps Despite AI’s efficiency gains, the research uncovered a troubling secondary effect. Nearly three in ten employees report feeling less motivated today than a year ago. Many are experiencing an “energy drain” despite increased productivity. Reliance on AI has reduced peer interaction, leaving people feeling more isolated despite being more “efficient.” This is an overlooked cost of many tech-first strategies, which optimize output while slowly sapping human energy. The result is a rise in burnout and a decline in employee engagement. Additional AI adoption barriers persist across organizations: 36% of employees disagree that their manager reinforces AI use in day-to-day work 25% say expectations for AI use are unclear 42% report that best practices are not consistently shared “Driving AI adoption is not primarily a technical challenge. It is a human one,” said Merrill. “Without clear, intentional leadership and communication, it’s common for employees to fill information voids with negative assumptions rather than embracing new tools.” Trust: The Infrastructure That Cannot Be Automated The research reveals a critical finding. Organizations intentionally investing in people-first leadership are nearly three times more likely to outperform their peers, in results, speed, adaptability, and engagement. High-trust environments deliver measurable performance improvements in higher employee motivation, lower absenteeism, lower turnover, more revenue per employee, and outperformance in market value. “In an AI-enabled world, distinctly human capabilities matter more, not less. Trust, judgment, character, discernment, creativity, collaboration, and execution cannot be automated or outsourced,” said Holly Procter, President, FranklinCovey Enterprise Division. “AI adoption doesn't move at the speed of technology. It moves at the speed of trust. And great leaders who intentionally build high-trust cultures are the accelerators of transformation.” The Perception Gap: A Blind Spot for Leaders The research conducted by FranklinCovey Institute uncovered a widening perception gap between how leaders believe they are showing up and how their teams experience them. Fewer than 7% of teams describe their trust level as world-class, and when employees graded executive leadership overall, the average score was a failing grade. Technology itself can unintentionally widen these gaps. AI systems obscure decision-making logic, automated workflows reduce human interaction, and messages pushed at scale are rarely translated with care. Leaders might believe clarity has been delivered because information has been distributed, while employees experience confusion, distance, or a sense of threat, the report found. The Path Forward: The “Breakthrough Zone” The report identifies a “Breakthrough Zone” where human capabilities like trust, judgment, and collaboration act as force multipliers, accelerating performance beyond what technology alone can deliver. In this zone, teams move faster because friction is reduced, and energy flows toward progress rather than protection. The research reveals that the most critical leadership activities remain profoundly human and cannot be outsourced to AI. Mobilizing people Holding others accountable Building shared momentum “The future doesn’t belong to organizations that simply adopt AI faster,” said Walker. “It belongs to those who integrate it wisely, using technology to amplify human capabilities rather than replace them. The work of leadership has never been more consequential. That’s the Human Imperative.” FranklinCovey’s AI Readiness Solution FranklinCovey is helping companies, including some of the world’s largest technology firms, get more from their AI investments. Its solution builds the behaviors that drive adoption across entire organizations: a mindset for experimentation, a framework for leading teams through disruption, and the path to move through resistance and uncertainty. To learn more, call 1-888-868-1776 or visit www.franklincovey.com. Download the full FranklinCovey Institute Impact Report, “AI Transformation & The Human Imperative,” here. About FranklinCovey FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube. View source version on businesswire.com: https://www.businesswire.com/news/home/20260630513189/en/ Media Contact
Debra Lund

Franklin Covey to Report Third Quarter Fiscal 2026 ResultsJune 17, 2026 4:30 PM
Business Wire Conference Call to be held on Wednesday, July 1, 2026 Franklin Covey Co. (NYSE: FC), a global leadership and organizational performance partner that gives strategy the human edge, announced today that the conference call to review the Company’s third quarter 2026 financial results will take place on Wednesday, July 1, 2026, at 5:00 p.m. ET (3:00 p.m. MT). The Company’s financial results are expected to be released after the close of the market on Wednesday, July 1, 2026. Interested persons may access a live webcast https://edge.media-server.com/mmc/p/8yjq5b3i or may participate via telephone by registering at https://register-conf.media-server.com/register/BI57ddeb8339fa49c0a62b3ff26faa5415. 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. About Franklin Covey Co. FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube. View source version on businesswire.com: https://www.businesswire.com/news/home/20260617112070/en/ For Further Information:
Boyd Roberts
Investor Relations
801-817-5127 Original: Franklin Covey to Report Third Quarter Fiscal 2026 Results

FranklinCovey Will Host James Patterson, Liz Wiseman, Patrick Leddin and Jennifer Colosimo to Help HR and L&D Leaders Close Critical Leadership Gaps and Lead Through DisruptionJune 15, 2026 9:12 AM
Business WireThe leadership experts and bestselling authors will be featured on two complimentary, live webinars on June 26th and June 30th.FranklinCovey (NYSE: FC), a global leader in organizational performance improvement, today announced it will host James Patterson, Liz Wiseman, Patrick Leddin, and Jennifer Colosimo to help HR and L&D leaders close critical leadership gaps and lead through disruption. The leadership experts and bestselling authors will be featured on two complimentary, live webinars on June 26th and June 30th.Holly Procter, FranklinCovey President, Enterprise Division, said, “The defining leadership characteristics of our time will be modeled after those who can successfully navigate disruption and rapid change."Friday, June 26, 12:00 – 1:00 PM ETPresenters: Liz Wiseman and Jennifer Colosimo
Topic: Close the Leadership Capability Gap. Drive Better Performance.
Register HERE.When leaders can’t keep pace with ongoing change, conflicts erupt, employees burn out, productivity stalls, and growth fades. HR and L&D leaders see the impact immediately: missed commitments, rework, disengagement, and attrition. To close the leadership capability gap and create a clear path forward, leaders don’t need more on their plate. They need to change how they lead with what’s already there. That means creating clarity, building alignment, and practicing simple daily and weekly habits that balance high expectations with genuine care.Liz Wiseman, New York Times bestselling author of Multipliers: How the Best Leaders Make Everyone Smarter, and Jennifer Colosimo, former FranklinCovey President, Enterprise Division, and co-author of the forthcoming book, Expect a Lot, Care a Lot: How 6 Critical Practices Create High-Performing Teams, will share proven frameworks that equip leaders to drive engagement, unlock high performance, and sustain results by tapping into the intelligence already within their teams.Attendees will learn how to:Create clarity and alignment that reduces rework and missed commitments.Build daily and weekly leadership habits that strengthen trust, engagement, and performance.Lead as a “Multiplier” to unlock capability, energy, and innovation across teams.Tuesday, June 30, 11:00 AM – 12:00 PM ET:Presenters: James Patterson and Patrick Leddin, Ph.D.
Topic: From Disruption to Direction: Leading Teams Through Constant Change. Register HERE.HR or L&D leaders know disruption is no longer occasional; it’s the status quo. Strategies shift overnight; AI evolves faster than decisions can be made, and transformation is constant. The real risk isn’t disruption itself, but leaders who aren’t equipped to lead through it. Leadership that lags behind the pace of change leads to conflict, burnout, slower productivity, and stalled growth. Disruption is inevitable, but leadership gaps don’t have to be.The world’s bestselling author James Patterson and New York Times bestselling author Patrick Leddin, Ph.D., coauthors of the bestseller, Disrupt Everything and Win: Take Control of Your Future, will explore what it takes to lead through disruption, not just survive it.Attendees will learn how to:Make smarter, faster decisions by leveraging the core dynamics behind constant change.Identify disruptive strengths across the team and combine complementary talents to improve collaboration and creativity.Anticipate challenges, test ideas fast, and use the Disruption Loop to turn disruption into momentum.About FranklinCovey:FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube.View source version on businesswire.com: https://www.businesswire.com/news/home/20260612115335/en/Press contact:
FranklinCovey
Debra Lund
Email: Debra.Lund @anajatwo-4474 Original: FranklinCovey Will Host James Patterson, Liz Wiseman, Patrick Leddin and Jennifer Colosimo to Help HR and L&D Leaders Close Critical Leadership Gaps and Lead Through Disruption

80% of Individual Contributors Say Their Manager’s Approach to AI is Hands-Off, FranklinCovey Research FindsMay 21, 2026 5:09 PM
Business Wire New data show that the real barrier to AI adoption isn’t technology. It’s human. FranklinCovey launches two solutions to help leaders and teams close the AI adoption gap. As organizations race to capture the benefits of artificial intelligence, research from FranklinCovey Institute reveals a critical obstacle: most employees feel they are navigating AI alone, without meaningful support or guidance. Eighty percent of individual contributors describe their manager’s approach to AI as “hands-off,” which underscores a widening gap between AI’s potential and how it’s actually used at work. FranklinCovey’s 2025 AI General Attitudes Survey and 2025 Global Leadership Survey found additional warning signs: 14% of workers report having received any AI training. 40% say their manager doesn’t know how or whether they are using AI in their work at all. 70% of workers say AI and technology are advancing faster than their culture can adapt. These statistics highlight a human adoption curve that’s keeping most organizations from achieving expected gains in productivity and business performance. Many organizations have not begun to deploy or integrate AI enterprise-wide, and among those that have, usage is inconsistent and scattered. “AI adoption isn’t just an IT problem. It’s a human problem,” said Paul Walker, FranklinCovey CEO. “The organizations winning with AI are pairing human judgment, creativity, and accountability with AI’s speed and scale, and they’re investing in the leaders and teams who make that pairing work. When you close the human readiness gap, adoption follows.” FranklinCovey is partnering with clients, including some of the world’s largest technology firms, to improve AI results through two targeted, customizable solutions. Leaders and teams develop specific behaviors that drive AI adoption: effective mindsets for experimentation, clear organizational AI expectations, high-value AI use cases, and coaching team members through resistance and uncertainty. Leading AI Adoption: Accelerate AI Impact Through Empathy and Action equips leaders with the skills to build AI momentum on their teams, rooted in empathy and action. Leaders clarify the game plan, spot high-value AI opportunities, and celebrate wins with their teams in everyday work. The result is a team that partners with AI and each other to think, decide, create, and communicate more effectively, delivering the outcomes that matter. Working with AI: Essentials for Working Smarter Together equips leaders and teams to confidently integrate AI into daily work by recognizing that AI is amplified when paired with human capabilities. Using a practical hybrid intelligence framework, learners discover how to combine AI with their own judgment, creativity, and experience to multiply performance and results. Early adopters of these solutions report greater confidence in leading their teams in AI adoption, measurable capability gains in how leaders and teams use AI, and increased daily use of AI in meaningful, business-critical work. FranklinCovey’s research also identified three common leadership patterns that undermine AI adoption: Encouraging AI use without guidance or guardrails, leaving teams to improvise in ways that breed inconsistency. Framing AI primarily as a cost-reduction lever, which creates anxiety rather than engagement. Moving so cautiously that informal, unguided experimentation fills the vacuum. Each pattern leads to versions of the same outcome. AI projects that stall and create costs in under-utilized tools, slowed innovation, and eroded trust between employees and leaders. Effective adoption requires movement on two fronts: equipping individual contributors to innovate with AI and helping leaders establish the clarity that makes AI adoption productive, not chaotic. Leaders must model confident AI use, establish boundaries, and coach their teams through the discomfort of change. “There’s no viable ‘AI czar’ model,” said Walker. “Centralizing AI ownership creates bottlenecks, stalls innovation, and alienates the very people who need to adopt it. Ownership is distributed, which means every leader owns it. And FranklinCovey aims to help our clients translate that ownership into sustained performance gains.” About FranklinCovey FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube. View source version on businesswire.com: https://www.businesswire.com/news/home/20260521485285/en/ Media Contact:
Franklin Covey
Debra Lund
801-817-6440
Debra.Lund@franklincovey.com Original: 80% of Individual Contributors Say Their Manager’s Approach to AI is Hands-Off, FranklinCovey Research Finds

80% of Individual Contributors Say Their Manager’s Approach to AI is Hands-Off, FranklinCovey Research FindsMay 21, 2026 12:38 PM
Business Wire New data show that the real barrier to AI adoption isn’t technology. It’s human. FranklinCovey launches two solutions to help leaders and teams close the AI adoption gap. As organizations race to capture the benefits of artificial intelligence, research from FranklinCovey Institute reveals a critical obstacle: most employees feel they are navigating AI alone, without meaningful support or guidance. Eighty percent of individual contributors describe their manager’s approach to AI as “hands-off,” which underscores a widening gap between AI’s potential and how it’s actually used at work. FranklinCovey’s 2025 AI General Attitudes Survey and 2025 Global Leadership Survey found additional warning signs: 14% of workers report having received any AI training. 40% say their manager doesn’t know how or whether they are using AI in their work at all. 70% of workers say AI and technology are advancing faster than their culture can adapt. These statistics highlight a human adoption curve that’s keeping most organizations from achieving expected gains in productivity and business performance. Many organizations have not begun to deploy or integrate AI enterprise-wide, and among those that have, usage is inconsistent and scattered. “AI adoption isn’t just an IT problem. It’s a human problem,” said Paul Walker, FranklinCovey CEO. “The organizations winning with AI are pairing human judgment, creativity, and accountability with AI’s speed and scale, and they’re investing in the leaders and teams who make that pairing work. When you close the human readiness gap, adoption follows.” FranklinCovey is partnering with clients, including some of the world’s largest technology firms, to improve AI results through two targeted, customizable solutions. Leaders and teams develop specific behaviors that drive AI adoption: effective mindsets for experimentation, clear organizational AI expectations, high-value AI use cases, and coaching team members through resistance and uncertainty. Leading AI Adoption: Accelerate AI Impact Through Empathy and Action equips leaders with the skills to build AI momentum on their teams, rooted in empathy and action. Leaders clarify the game plan, spot high-value AI opportunities, and celebrate wins with their teams in everyday work. The result is a team that partners with AI and each other to think, decide, create, and communicate more effectively, delivering the outcomes that matter. Working with AI: Essentials for Working Smarter Together equips leaders and teams to confidently integrate AI into daily work by recognizing that AI is amplified when paired with human capabilities. Using a practical hybrid intelligence framework, learners discover how to combine AI with their own judgment, creativity, and experience to multiply performance and results. Early adopters of these solutions report greater confidence in leading their teams in AI adoption, measurable capability gains in how leaders and teams use AI, and Increased daily use of AI in meaningful, business-critical work. FranklinCovey’s research also identified three common leadership patterns that undermine AI adoption: Encouraging AI use without guidance or guardrails, leaving teams to improvise in ways that breed inconsistency. Framing AI primarily as a cost-reduction lever, which creates anxiety rather than engagement. Moving so cautiously that informal, unguided experimentation fills the vacuum. Each pattern leads to versions of the same outcome. AI projects that stall and create costs in under-utilized tools, slowed innovation, and eroded trust between employees and leaders. Effective adoption requires movement on two fronts: equipping individual contributors to innovate with AI and helping leaders establish the clarity that makes AI adoption productive, not chaotic. Leaders must model confident AI use, establish boundaries, and coach their teams through the discomfort of change. “There’s no viable ‘AI czar’ model,” said Walker. “Centralizing AI ownership creates bottlenecks, stalls innovation, and alienates the very people who need to adopt it. Ownership is distributed, which means every leader owns it. And FranklinCovey aims to help our clients translate that ownership into sustained performance gains.” About FranklinCovey FranklinCovey (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 FranklinCovey.com and explore leadership insights on LinkedIn, Facebook, X, Instagram, and YouTube. View source version on businesswire.com: https://www.businesswire.com/news/home/20260521485285/en/ Media Contact:
Franklin Covey
Debra Lund
801-817-6440
Debra.Lund@franklincovey.com Original: 80% of Individual Contributors Say Their Manager’s Approach to AI is Hands-Off, FranklinCovey Research Finds

Franklin Covey Reports Second Quarter Fiscal 2026 Financial ResultsApril 1, 2026 4:12 PM
Business Wire
Consolidated Second Quarter Revenue of $59.6 Million


Invoiced Amounts in Enterprise North America Increases 7%


Deferred Revenue Increases 7% to $101.5 Million


Net Loss for the Second Quarter of $2.0 Million


Adjusted EBITDA Increases 99% to $4.1 Million


Liquidity Remains Strong at Over $76 Million, with $13.7 Million of Cash and the Company’s $62.5 Million Credit Facility Fully Available


Purchased $17.0 million of Common Stock During the Second Quarter Fiscal 2026


Company Affirms Annual Guidance for Fiscal 2026


Franklin Covey Co. (NYSE: FC), a global leadership and organizational performance partner, gives strategy the human edge. We help clients achieve breakthrough results and transform how they execute strategy at scale. Today, the Company announced its financial results for the second quarter of fiscal 2026, which ended on February 28, 2026.


Second Quarter Fiscal 2026 Financial Overview


The Company’s consolidated revenue for Q2 FY2026 was $59.6 million, which was flat to Q2 FY2025. Consolidated invoiced amounts for Q2 FY2026 grew 5% over the prior year. The Company’s financial results for Q2 FY2026 include the following:



Enterprise Division revenue for Q2 FY2026 totaled $41.6 million compared with $43.6 million in the prior year.


Enterprise Division revenue reflected a $2.0 million decline in North America segment revenue partially offset by a $0.1 million increase in International segment revenue. The North America segment was adversely affected by lower subscription revenue recognized as a result of lower invoiced amounts and deferred revenue last fiscal year.



Enterprise North America invoiced amounts grew 7% for the second quarter in a row.



Deferred revenue for the Enterprise Division increased 15% year-over-year.






Education Division revenue in Q2 FY2026 increased $2.4 million, or 16%, to $17.5 million compared with $15.1 million in the prior year.


The increase was driven by higher training, coaching, materials, and membership subscription revenue during the quarter.






Consolidated subscription and subscription services revenue for Q2 FY2026 was $50.9 million compared with $49.5 million in Q2 FY2025. Subscription and contractually committed services invoiced for Q2 FY2026 totaled $39.3 million, growth of 16%, compared with $33.9 million in Q2 FY2025.



The Company realized a net loss for Q2 FY2026 of $(2.0) million, or $(0.17) per share, compared with a net loss of $(1.1) million, or $(0.08) per share, in Q2 FY2025.



Adjusted EBITDA for Q2 FY2026 increased 99% to $4.1 million compared with $2.1 million in the prior year.



Consolidated deferred revenue at February 28, 2026 increased 7% to $101.5 million compared with $94.4 million at February 28, 2025.


At February 28, 2026, 59% of the Company’s AAP contracts in North America were for at least two years, compared with 55% at February 28, 2025, and the percentage of contracted amounts represented by multi-year contracts was 62% compared with 61% on February 28, 2025.



Unbilled deferred revenue totaled $64.9 million at February 28, 2026, compared with $64.5 million at February 28, 2025.






Cash provided by operating activities for the first two quarters of FY2026 was $16.4 million reflecting the strength of Q2 FY2026 operating cash flows of $16.3 million compared with $(1.4) million of cash used in the prior year.


Free cash flow for Q2 FY2026 was $13.2 million compared with $(3.6) million in Q2 FY2025.



Cash and cash equivalents totaled $13.7 million compared with $40.4 million as of February 28, 2025.






During Q2 FY2026, the Company purchased approximately 947,000 shares of its common stock for $17.0 million. Approximately 922,000 shares were purchased in the open market under 10b5-1 trading plans and approximately 25,000 shares were withheld to cover statutory income taxes on stock-based compensation awards that vested and were issued during the second quarter.



Paul Walker, President and Chief Executive Officer, commented, “Our second quarter results reflect the importance of what we do and the traction of our go-to-market transformation. We delivered our second consecutive quarter of 7% invoiced growth in Enterprise North America as strong execution on our go-to-market strategy continues to gain traction. We believe we are at an inflection point where the return on investment from our transformation is becoming evident.


"This momentum comes as AI is reshaping how work gets done, and we are seeing increased demand for FranklinCovey's expertise in helping organizations strengthen the human side of execution—leadership, trust, change management, sales performance, collaboration, and disciplined execution. FranklinCovey is uniquely positioned as a long-term performance partner, helping organizations navigate AI-driven opportunities and complexities to deliver sustained performance.”


Jessi Betjemann, Chief Financial Officer, said, “In the second quarter, we translated operational momentum into improved profitability and strong cash generation. Adjusted EBITDA increased to $4.1 million, operating cash flow was $16.3 million, and free cash flow improved to $13.2 million. We also returned $17.0 million to shareholders through the repurchase of approximately 947,000 shares, while maintaining $76 million of liquidity. We are reaffirming our FY2026 guidance of total revenue of $265 to $275 million and Adjusted EBITDA of $28 to $33 million, in constant currency.”


Fiscal 2026 Guidance


The Company expects to return to growth in both revenue and Adjusted EBITDA in FY2026 as the benefits of its go-to-market transformation and cost reduction actions begin to increase revenue, lower costs, and flow through improved results.


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



Total revenue in the range of $265 million to $275 million.



Adjusted EBITDA in the range of $28 million to $33 million.



This guidance reflects the positive momentum the Company is seeing and expecting in both the Enterprise and Education divisions, balanced with a disciplined view of the risks and opportunities ahead as it continues to execute in an uncertain macro environment. The Company anticipates strong invoiced growth in FY2026 which the Company believes will translate into meaningful reported growth in revenue and Adjusted EBITDA in FY2027.


Earnings Conference Call


On Wednesday, April 1, 2026, at 5:00 p.m. Eastern (3:00 p.m. Mountain Time) Franklin Covey will host a conference call to review its second quarter fiscal 2026 financial results. Interested persons may access a live audio webcast at https://edge.media-server.com/mmc/p/qux2545x or may participate via telephone by registering at https://register-conf.media-server.com/register/BI2c1e170bc74e4643ad0d7d53976bef49. 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


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 (loss), 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), a global leadership and organizational performance partner, gives strategy the human edge. We help clients achieve breakthrough results and transform how they execute strategy at scale.


Our Enterprise and Education Divisions develop high-performing leaders at all levels of the organization and align people around purpose and priorities. Through proven, principle-centered frameworks and practices, we build high-trust leaders, teams, and cultures and help organizations translate strategy into consistent execution.


Our approach enables lasting, repeatable results by helping clients identify, align, and execute their most important priorities. This approach has been tested and refined through more than 40 years of work with tens of thousands of leaders and organizations – from Fortune 100 and 500 companies to small and mid-sized businesses, as well as educational institutions and government entities.


We provide professional services in over 160 countries and territories through directly owned operations and licensee partners, serving both enterprise and education clients. Our solutions are delivered through the FranklinCovey All Access Pass® and Leader in Me® subscriptions which combine world-class content and tools with the trusted expertise of consultants, coaches, and facilitators and are available in multiple modalities and in more than 20 languages.


Learn more at www.franklincovey.com and explore exclusive content across our social media channels: LinkedIn, Facebook, X, Instagram, and YouTube.




FRANKLIN COVEY CO.








Condensed Consolidated Statements of Operations








(in thousands, except per-share amounts, and unaudited)








 







 






 






 






 






 






 






 








 







 






 






 






 






 






 






 








 







Quarter Ended






 






Two Quarters Ended








 







February 28,






 






February 28,






 






February 28,






 






February 28,








 







2026






 






2025






 






2026






 






2025















 


Revenue


$






59,647






 







$






59,612






 







$






123,692






 







$






128,698






 







Cost of revenue


 






14,374






 







 






13,866






 







 






30,045






 







 






30,241






 







Gross profit


 






45,273






 







 






45,746






 







 






93,647






 







 






98,457






 















 


Selling, general, and administrative


 






43,497






 







 






45,087






 







 






89,618






 







 






92,291






 







Restructuring costs


 






1,510






 







 






-






 







 






4,954






 







 






1,984






 







Building exit costs


 






455






 







 






-






 







 






1,129






 







 






-






 







Depreciation


 






1,140






 







 






1,016






 







 






2,239






 







 






1,967






 







Amortization


 






670






 







 






1,098






 







 






1,357






 







 






2,196






 







Income (loss) from operations


 






(1,999






)







 






(1,455






)







 






(5,650






)







 






19






 







Interest income (expense), net


 






(63






)







 






107






 







 






(43






)







 






220






 







Income (loss) before income taxes


 






(2,062






)







 






(1,348






)







 






(5,693






)







 






239






 







Income tax benefit (provision)


 






80






 







 






272






 







 






422






 







 






(134






)







Net income (loss)


$






(1,982






)







$






(1,076






)







$






(5,271






)







$






105






 















 


Net income (loss) per common share:










Basic and diluted


$






(0.17






)







$






(0.08






)







$






(0.45






)







$






0.01






 















 


Weighted average common shares:










Basic


 






11,422






 







 






13,102






 







 






11,816






 







 






13,097






 







Diluted


 






11,422






 







 






13,102






 







 






11,816






 







 






13,236






 















 


Other data:










Adjusted EBITDA(1)


$






4,102






 







$






2,060






 







$






7,784






 







$






9,734






 









(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 (Loss) to Adjusted EBITDA as shown below.








FRANKLIN COVEY CO.



Reconciliation of Net Income (Loss) to Adjusted EBITDA








(in thousands and unaudited)








 






 






 






 






 






 






 






 






 








 






 






Quarter Ended






 






Two Quarters Ended








 






 






February 28,






 






February 28,






 






February 28,






 






February 28,








 






 






2026






 






2025






 






2026






 






2025







Reconciliation of net income (loss) to Adjusted EBITDA:








Net income (loss)


$






(1,982






)







$






(1,076






)







$






(5,271






)







$






105






 







Adjustments:










Interest expense (income), net


 






63






 







 






(107






)







 






43






 







 






(220






)







Income tax provision (benefit)


 






(80






)







 






(272






)







 






(422






)







 






134






 







Amortization


 






670






 







 






1,098






 







 






1,357






 







 






2,196






 







Depreciation


 






1,140






 







 






1,016






 







 






2,239






 







 






1,967






 







Stock-based compensation


 






2,664






 







 






1,346






 







 






4,093






 







 






3,513






 







Restructuring costs


 






1,510






 







 






-






 







 






4,954






 







 






1,984






 







Building exit costs


 






455






 







 






55






 







 






1,129






 







 






55






 







Gain on license liability restructuring


 






(338






)







 






-






 







 






(338






)







 






-






 







Adjusted EBITDA


$






4,102






 







$






2,060






 







$






7,784






 







$






9,734






 















 


Adjusted EBITDA margin


 






6.9






%







 






3.5






%







 






6.3






%







 






7.6






%















 




FRANKLIN COVEY CO.








Additional Financial Information








(in thousands and unaudited)








 






 






 






 






 






 






 






 






 








 






 






Quarter Ended






 






Two Quarters Ended








 






 






February 28,






 






February 28,






 






February 28,






 






February 28,








 






 






2026






 






2025






 






2026






 






2025







Revenue by Division/Segment:










Enterprise Division:










North America


$






32,484






 







$






34,520






 







$






68,739






 







$






74,657






 







International


 






9,154






 







 






9,031






 







 






20,359






 







 






20,473






 










 






41,638






 







 






43,551






 







 






89,098






 







 






95,130






 







Education Division


 






17,500






 







 






15,065






 







 






33,593






 







 






31,529






 







Corporate and other


 






509






 







 






996






 







 






1,001






 







 






2,039






 







Consolidated


$






59,647






 







$






59,612






 







$






123,692






 







$






128,698






 















 


Gross Profit by Division/Segment:










Enterprise Division:










North America


$






27,155






 







$






28,974






 







$






56,710






 







$






61,795






 







International


 






7,073






 







 






7,059






 







 






15,746






 







 






16,036






 










 






34,228






 







 






36,033






 







 






72,456






 







 






77,831






 







Education Division


 






10,777






 







 






9,331






 







 






20,683






 







 






19,741






 







Corporate and other


 






268






 







 






382






 







 






508






 







 






885






 







Consolidated


$






45,273






 







$






45,746






 







$






93,647






 







$






98,457






 















 


Adjusted EBITDA by Division/Segment:










Enterprise Division:










North America


$






5,921






 







$






4,843






 







$






11,190






 







$






13,587






 







International


 






1,025






 







 






483






 







 






3,460






 







 






1,903






 










 






6,946






 







 






5,326






 







 






14,650






 







 






15,490






 







Education Division


 






416






 







 






(313






)







 






(519






)







 






(47






)







Corporate and other


 






(3,260






)







 






(2,953






)







 






(6,347






)







 






(5,709






)







Consolidated


$






4,102






 







$






2,060






 







$






7,784






 







$






9,734






 















 




FRANKLIN COVEY CO.








Condensed Consolidated Balance Sheets








(in thousands and unaudited)








 






 






 






 






 








 






 






February 28,






 






August 31,








 






 






2026






 






2025







Assets




Current assets:






Cash and cash equivalents


$






13,717






 







$






31,698






 







Accounts receivable, less allowance for credit losses of $2,721 and $2,929


 






50,191






 







 






68,415






 







Inventories


 






5,336






 







 






5,165






 







Prepaid expenses and other current assets


 






26,188






 







 






24,199






 







Total current assets


 






95,432






 







 






129,477






 











 


Property and equipment, net


 






13,177






 







 






14,324






 







Intangible assets, net


 






32,449






 







 






34,551






 







Goodwill


 






31,220






 







 






31,220






 







Deferred income tax assets


 






239






 







 






231






 







Other long-term assets


 






33,972






 







 






33,109






 










$






206,489






 







$






242,912






 











 


Liabilities and Shareholders' Equity






Current liabilities:






Current portion of notes payable


$






835






 







$






823






 







Accounts payable


 






6,611






 







 






8,780






 







Deferred revenue


 






97,936






 







 






106,534






 







Customer deposits


 






25,021






 







 






16,327






 







Accrued liabilities


 






21,840






 







 






24,828






 







Total current liabilities


 






152,243






 







 






157,292






 











 


Other liabilities


 






11,695






 







 






14,718






 







Deferred income tax liabilities


 






4,501






 







 






3,991






 







Total liabilities


 






168,439






 







 






176,001






 











 


Shareholders' equity:






Common stock


 






1,353






 







 






1,353






 







Additional paid-in capital


 






229,610






 







 






230,251






 







Retained earnings


 






121,001






 







 






126,272






 







Accumulated other comprehensive loss


 






(1,162






)







 






(1,032






)







Treasury stock at cost, 15,866 and 14,565 shares


 






(312,752






)







 






(289,933






)







Total shareholders' equity


 






38,050






 







 






66,911






 










$






206,489






 







$






242,912






 











 




FRANKLIN COVEY CO.








Condensed Consolidated Free Cash Flow








(in thousands and unaudited)








 






 






 






 






 






 






 








 






 






Two Quarters Ended








 






 






February 28,






 






February 28,








 






 






2026






 






2025








 






 






(unaudited)







CASH FLOWS FROM OPERATING ACTIVITIES








Net income (loss)

$

(5,271






)






$

105






 







Adjustments to reconcile net income (loss) to net cash provided by operating activities:








Depreciation and amortization



3,596






 








4,163






 







Amortization of capitalized curriculum costs



2,515






 








2,171






 







Stock-based compensation



4,093






 








3,513






 







Deferred income taxes



510






 








(145






)







Amortization of right-of-use operating lease assets



450






 








287






 







Gain on license obligation restructuring



(338






)








-






 







Changes in working capital



10,796






 








2,682






 







Net cash provided by operating activities



16,351






 








12,776






 













 


CASH FLOWS FROM INVESTING ACTIVITIES








Purchases of property and equipment



(2,763






)








(2,271






)







Curriculum development costs



(4,085






)








(2,380






)







Reacquisition of license rights



-






 








(324






)







Net cash used for investing activities



(6,848






)








(4,975






)













 


Free Cash Flow

$

9,503






 






$

7,801






 







 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260401266586/en/
Investor Contact:

Franklin Covey

Boyd Roberts

801-817-5127

investor.relations@franklincovey.com
Media Contact:

Franklin Covey

Debra Lund

801-817-6440

Debra.Lund@franklincovey.com


Original: Franklin Covey Reports Second Quarter Fiscal 2026 Financial Results