Education Revenue Surges 16% as Franklin Covey Reports $2M Loss
Franklin Covey posted a $2.0 million Q2 fiscal 2026 net loss including $1.5 million in restructuring charges. Education division revenue rose 16% on Leader in Me demand while overall invoiced amounts grew 5%, including 7% in North America and 10% excluding government.
1. Quarterly Financial Overview
Franklin Covey posted a net loss of $2.0 million for Q2 fiscal 2026, or $0.17 per share, which includes $1.5 million of restructuring expenses. Total revenue reached $59.6 million for the quarter.
2. Education Division Performance
Education division revenue increased 16% year-over-year, driven by strong demand for Leader in Me subscriptions that position the segment for a robust second half. However, billed deferred revenue in this division declined 4% as delivery of existing subscriptions outpaced new bookings.
3. Enterprise and Invoiced Growth
Enterprise division revenue declined 4% despite solid demand, as mix shifts weighed on reported sales. Overall invoiced amounts grew 5%, bolstered by 7% growth in North America and 10% growth when excluding government business.
4. Margin and Cash Flow Outlook
Gross margin narrowed to 75.9% from 76.7%, reflecting higher amortization of capitalized curriculum expenses and a shift in service mix. Free cash flow benefited from positive swings in working capital, with management forecasting particularly strong cash generation in Q4 alongside EBITDA growth.