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Investing.com -- Franklin Covey Co . (NYSE:FC) reported a third-quarter loss that significantly missed analyst expectations, sending shares down as much as 6.5% as the organizational performance improvement company faced headwinds from macroeconomic uncertainties and canceled government contracts.
The company posted a net loss of $0.11 per share for the third quarter ended May 31, 2025, falling well short of the $0.32 per share profit analysts had expected. Revenue came in at $67.1 million, below the consensus estimate of $77.39 million and down 8.6% from $73.4 million in the same quarter last year. The quarter’s results included $4.7 million in restructuring charges related to the company’s go-to-market transformation.
Franklin Covey’s Enterprise Division revenue declined to $47.3 million from $51.9 million a year earlier, while Education Division revenue fell to $18.6 million from $20.2 million. The company cited ongoing macroeconomic uncertainties, geopolitical trade tensions, and canceled U.S. federal government contracts as factors impacting performance.
"We are pleased that our third quarter revenue was in line with our expectation and that Adjusted EBITDA exceeded the high end of our range," said Paul Walker, President and Chief Executive Officer. "Despite an environment where uncertainty is prompting organizations to scrutinize costs, we continue to be confident in the actions we are undertaking to accelerate future growth."
Deferred subscription revenue showed strength, increasing 7% YoY to $89.3 million. The company maintained a strong liquidity position with over $95 million available, including $33.7 million in cash and no drawdowns on its $62.5 million credit facility.
Franklin Covey updated its fiscal 2025 guidance, now expecting total revenue between $265 million and $275 million, with adjusted EBITDA between $28 million and $33 million. The company repurchased approximately 372,000 shares of its common stock for $8.3 million during the quarter.
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