Franklin Covey Posts Fourth-Quarter Profit Growth

The Tip Desk · November 4, 2026 · 3 min read

Fourth-quarter revenue of $70.0 million sat in updated guidance as net income rose to $7.1 million, or $0.62 a share.

Franklin Covey Co. (FC) reported fourth-quarter fiscal 2026 revenue of $70.0 million, down from $71.2 million a year earlier, after a 1% year-over-year increase in the third quarter. The global leadership and organizational performance partner said the result was within its updated guidance range.

Net income rose to $7.1 million, or $0.62 a share, from $4.4 million, or $0.34 a share, a year earlier. Adjusted EBITDA increased 9% to $12.8 million from $11.7 million, after a 14% year-over-year increase to $8.3 million in the third quarter. Chief Financial Officer Jessi Betjemann said the company grew fourth-quarter Adjusted EBITDA 9% despite lower revenue, reflecting operating discipline.

Enterprise Division revenue was $45.5 million, with North America down $0.1 million and International down $0.1 million. Enterprise North America invoiced amounts totaled $37.0 million, essentially flat versus $37.2 million a year earlier, after 4% year-over-year invoiced growth in the third quarter. Education Division revenue was $23.6 million. Subscription and contractually committed services invoiced were $62.8 million.

Deferred revenue at August 31, 2026 was $116.1 million, up 4% from $111.7 million a year earlier. Enterprise Division deferred revenue increased 14% to $64.9 million from $57.1 million. Enterprise North America deferred revenue increased 17% to $59.2 million from $50.4 million. The company said fiscal 2026 results reflected growing traction from investments in its Enterprise North America go-to-market model. President and Chief Executive Officer Paul Walker said invoiced amounts grew 4% to $151.4 million for the full year and deferred revenue grew 17% to $59.2 million, reflecting growing client commitments and greater visibility into revenue expected to be recognized in fiscal 2027.

For the full fiscal year ended August 31, 2026, consolidated revenue was $261.5 million, within updated guidance, compared with $267.1 million in fiscal 2025. Enterprise Division revenue was $182.7 million, including a $5.0 million decrease in North America segment revenue and a $0.4 million decrease in International segment revenue. Education Division revenue increased to $76.2 million from $74.6 million. Subscription and contractually committed services invoiced totaled $165.1 million. Full-year Adjusted EBITDA was $28.9 million, within original full-year guidance. Net income for the year was $4.9 million, or $0.42 a share.

Cash provided by operating activities was $4.1 million in the fourth quarter, down from $9.9 million a year earlier. Free cash flow was $0.7 million. Cash and cash equivalents were $13.3 million at August 31, 2026. Liquidity remained over $75 million, with the company’s $62.5 million credit facility fully available. For the full year, operating cash flow was $21.6 million and free cash flow was $9.2 million. The company purchased approximately 1,573,000 shares for $28.1 million during fiscal 2026.

The company expects revenue and Adjusted EBITDA to grow in fiscal 2027, supported by client commitments, increased invoiced amounts in Enterprise North America, and services bookings generated during fiscal 2026. In constant currency, it guides fiscal 2027 revenue to $263 million to $273 million and Adjusted EBITDA to $29 million to $34 million. Betjemann said that as a larger base of contracted commitments translates into reported revenue, the company expects to benefit from operating leverage, with fiscal 2027 Adjusted EBITDA growing faster than revenue.

As previously announced, Franklin Covey entered 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 fiscal 2027 reported revenue to be approximately $2.0 million lower than it otherwise would have been, an impact reflected in the guidance. The transaction is not expected to have a material impact on Adjusted EBITDA.