Franklin Covey Company · NYSE:FC
Franklin Covey — Q1 2025 Earnings Presentation
30 slides from Franklin Covey's earnings presentation, Jan 8, 2025
Slide 1: Greatness Starts Here
Greatness Starts Here We transform organizations by building exceptional leaders, teams, and cultures that get results. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL
Slide 2: Investor Update First Quarter Fiscal 2025
INVESTOR UPDATE First Quarter Fiscal 2025
Slide 3: Forward-Looking Statements/Non-GAAP
Forward-Looking Statements/Non-GAAP This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon management’s current expectations and are subject to various risks and uncertainties includi
Slide 4: FY25 Growth Investments
FY25 Growth Investments (in Millions, Unaudited) Client Expansion: New Logos: Sales and Scalability: Sales Impact: Content Sales and Marketing Roles & Leadership and Technology Support Roles Closing Resources and Operations © FranklinCovey Co. All rights reserved. 4
Slide 5: Enterprise North America Client Segmentation
Enterprise North America Client Segmentation Full-time Total Segment Employees (FTE) Prospects Criteria Key Accounts 25,000+ ~1,000 Enterprise 5,000 – 25,000 ~4,000 Mid-Market 500 – 5,000 ~44,000 SMB (Small and Medium < 500 16M+ Business) Source: ZoomInfo © FranklinCovey Co. All rights reserved. 5
Slide 6: FranklinCovey Q1FY25 and LTM results
FranklinCovey Q1FY25 and Q1FY25 LTM Unaudited $69.1M $287.9M $7.7M Q1FY25 Revenue Q1FY25 LTM Revenue Q1FY25 Adjusted EBITDA $68.4M Q1FY24 $279.6M Q1FY24 LTM $11.0M Q1FY24 $52.0M $14.1M $11.4M Q1FY25 LTM Adjusted EBITDA Q1FY25 Cash Flows from Q1FY25 Free Cash Flows Operating Activities $47.6M Q1FY24
Slide 7: Enterprise Division – North America
Enterprise Division – North America Q1FY25 Unaudited $40.1M Revenue $21.8M $34.3M Subscription Revenue Subscription & Subscription Services Revenue $40.3M Q1FY24 $22.5M Q1FY24 $34.9M Q1FY24 $41.8M $66.5M 60% Billed Deferred Revenue Unbilled Deferred Revenue AAP Multi-Year Contract Value $45.1M Q1FY2
Slide 8: Enterprise Division - International
Enterprise Division - International Q1FY25 Unaudited $8.2M $3.2M Revenue – International Direct Revenue - International Licensee Partners $8.7M Q1FY24 $3.4M Q1FY24 © FranklinCovey Co. All rights reserved. 8
Slide 9: Education Division
Education Division Q1FY25 Unaudited $16.5M $12.2M Revenue Invoiced Amounts $14.9M Q1FY24 $8.5M Q1FY24 $14.9M $44.2M Subscription & Subscription Deferred Revenue Service Revenue (Billed) $13.2M Q1FY24 $34.3M Q1FY24 © FranklinCovey Co. All rights reserved. 9
Slide 10: Free Cash Flow
Free Cash Flow In thousands Quarter Ended November 30, November 30, 2024 2023 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,181 $ 4,851 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,048 2,162 Amortization of capita
Slide 11: Appendix
Appendix
Slide 12: Other Information
APPENDIX Other Information OTHER INCOME STATEMENT INFORMATION: • Depreciation: $3.9M in FY2024, expected to total approximately $3.5M in FY2025. • Amortization: $4.2M in FY2024, expected to total approximately $4.4 in FY2025. • Net Interest Expense: $0.0M in FY2024 and Net Interest Income expected t
Slide 13: FranklinCovey Financial Headlines
APPENDIX FranklinCovey Financial Headlines (in Millions and Unaudited) Q1 FY 25 Q1 FY 24 C hg % LTM Q1 FY 25 LTM Q1 FY 24 C hg % Revenue $ 69.1 $ 68.4 $ 0.7 1 .0% $ 287.9 $ 279.6 $ 8.4 3.0% Cost of Sales 1 6.4 1 6.1 0.3 1 .6% 66.4 66.5 (0.1 ) -0.2% Gross Profit 52.7 52.3 0.4 0.8% 221 .5 21 3.0 8.5 4
Slide 14: FranklinCovey Highlights
APPENDIX FranklinCovey Highlights (in Millions and Unaudited) Note: Adjusted EBITDA and Operating SG&A are non-GAAP financial measures; please see Appendix for additional information. Amounts may not total due to rounding. © FranklinCovey Co. All rights reserved. 14
Slide 15: Trends in the Business
APPENDIX Trends in the Business (in Millions and Unaudited) © FranklinCovey Co. All rights reserved. 15
Slide 16: Revenue Information
APPENDIX Revenue Information (in Millions and Unaudited) Notes: • Invoiced Amounts represent the amount billed (invoiced) in the period. The Invoiced Amount is equal to Reported Net Revenue, plus the associated change in • Certain historical amounts have been adjusted to conform with the current pre
Slide 17: FranklinCovey Contracts Signed
APPENDIX FranklinCovey Contracts Signed (in Millions and Unaudited) Notes: • Please compare this information to the Segment Information footnote in Form 10-K. • Please refer to Definitions in the Appendix for the definition of Deferred Revenue and Unbilled Deferred Revenue. • May not total due to ro
Slide 18: Reconciliation of Net Income to Adjusted EBITDA
APPENDIX Reconciliation of Net Income to Adjusted EBITDA (in Thousands and Unaudited) Quarter Ended November 30, November 30, 2024 2023 Reconciliation of net income to Adjusted EBITDA: Net income $ 1,181 $ 4,851 Adjustments: Interest (income) expense, net (112) 53 Income tax provision 406 425 Amorti
Slide 19: Additional Financial Information
APPENDIX Additional Financial Information Quarter Ended (in Thousands and Unaudited) November 30, November 30, 2024 2023 Sales by Division/Segment: Enterprise Division: North America $ 40,137 $ 40,293 International direct offices 8,239 8,730 International licensees 3,203 3,423 51,579 52,446 Educatio
Slide 20: Condensed Consolidated Balance Sheets
APPENDIX Condensed Consolidated Balance Sheets (in Thousands and Unaudited) November 30, August 31, 2024 2024 Assets Liabilities and Shareholders' Equity Current assets: Current liabilities: Cash and cash equivalents $ 53,294 $ 48,663 Current portion of notes payable $ 835 $ 835 Accounts receivable,
Slide 21: Condensed Consolidated Income Statements
APPENDIX Condensed Consolidated Income Statements Quarter Ended (in Thousands, Except Per-Share Amounts, and Unaudited) November 30, November 30, 2024 2023 Net revenue $ 69,086 $ 68,399 Cost of revenue 16,375 16,122 Gross profit 52,711 52,277 Selling, general, and administrative 47,204 44,205 Restru
Slide 22: Free Cash Flow
APPENDIX Free Cash Flow (in Thousands) Quarter Ended November 30, November 30, 2024 2023 (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,181 $ 4,851 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,048 2,162 Amortizatio
Slide 23: Enterprise Division Financial Summary
APPENDIX Enterprise Division Financial Summary (in Millions and Unaudited) Q1 FY 25 Q1 FY 24 C hg % LTM Q1 FY 25 LTM Q1 FY 24 C hg % Revenue $ 51 .6 $ 52.4 ($0.9) -1 .7% $ 207.3 $ 204.2 $ 3.1 1 .5% Cost of Sales 9.8 1 0.0 (0.2) -2.1 % 35.9 37.5 (1 .5) -4.1 % Gross Profit 41 .8 42.5 (0.7) -1 .6% 1 71
Slide 24: Enterprise Division Financial Summary
APPENDIX Enterprise Division Financial Summary (in Millions and Unaudited) © FranklinCovey Co. All rights reserved. 24
Slide 25: Enterprise Division AAP & Related Revenue
APPENDIX Enterprise Division AAP & Related Revenue (in Millions and Unaudited) LTM Q1FY25 LTM Q1FY24 LTM Q1FY23 Q1FY25 Q4FY24 Q3FY24 Q2FY24 Q1FY24 AAP Sales $105.9 $102.3 $92.4 $26.4 $26.9 $26.3 $26.3 $26.8 AAP Add on Sales* 58.3 57.7 58.6 14.6 16.3 16.2 11.2 14.8 Total AAP and Related 164.2 160.0 1
Slide 26: Education Division Financial Summary
APPENDIX Education Division Financial Summary (in Millions and Unaudited) Q1 FY 25 Q1 FY 24 C hg % LTM Q1 FY 25 LTM Q1 FY 24 C hg % Revenue $ 1 6.5 $ 1 4.9 $ 1 .6 1 0.6% $ 75.8 $ 70.7 $ 5.0 7.1 % Cost of Sales 6.1 5.4 0.6 1 1 .7% 27.3 25.8 1 .5 6.0% Gross Profit 1 0.4 9.5 0.9 9.9% 48.5 45.0 3.5 7.8%
Slide 27: Education Division Financial Summary
APPENDIX Education Division Financial Summary (in Millions and Unaudited) * © FranklinCovey Co. All rights reserved. 27
Slide 28: Definitions
APPENDIX Definitions • “Deferred Subscription Revenue” primarily consists of billings or payments received in advance of revenue being recognized from subscription services. Deferred revenue is recognized as Revenue as the revenue recognition criteria are met. The Company generally invoices customer
Slide 29: Definitions continued
APPENDIX Definitions continued • “Adjusted EBITDA” (earnings before interest, income taxes, depreciation, intangible asset 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. A re
Slide 30: franklincovey.com
g~ VA FranklinCovey ranklincovey.co
Franklin Covey Company — Q1 2025 Earnings Presentation on 6ix