Franklin Covey Reports Slight Revenue Increase but Continued Net Loss in Q2 of Fiscal 2026

Franklin Covey Co. reported its financial results for the second quarter and first half of fiscal 2026, revealing a slight increase in revenue but a continued net loss. For the quarter ended February 28, 2026, the company generated revenue of $59.6 million, a marginal increase from $59.6 million in the same quarter of the previous year. However, the company recorded a net loss of $2.0 million, or $(0.17) per share, compared to a net loss of $1.1 million, or $(0.08) per share, in the prior year. For the first two quarters of fiscal 2026, total revenue was $123.7 million, down from $128.7 million in the same period last year, with a net loss of $5.3 million compared to a net income of $0.1 million in the previous year.

The company's financial performance reflects several challenges, including macroeconomic factors that have impacted invoiced amounts and subscription revenue growth. The North America segment, which is crucial for Franklin Covey, saw a revenue decline of $5.9 million to $68.7 million for the first half of fiscal 2026, attributed to reduced federal government spending and geopolitical tensions. In contrast, the Education Division experienced a 7% revenue increase to $33.6 million, driven by higher subscription-related revenue and an increase in training and coaching days delivered.

Operationally, Franklin Covey has initiated a long-term restructuring plan aimed at streamlining operations and focusing on growth areas. The company incurred $1.5 million in restructuring costs during the second quarter, primarily related to severance for seven employees. Additionally, the company reported a 7% increase in deferred revenue, totaling $101.5 million as of February 28, 2026, indicating a solid pipeline of future revenue. The company also noted that 59% of its North America All Access Pass contracts are for at least two years, up from 55% a year earlier.

In terms of liquidity, Franklin Covey maintained a strong position with over $76 million available, including $13.7 million in cash and a fully available $62.5 million line of credit. The company utilized $28.1 million for stock repurchases during the first half of fiscal 2026, reflecting its commitment to returning value to shareholders. Looking ahead, Franklin Covey anticipates that its investments in a new go-to-market strategy and content development will yield growth in the latter half of fiscal 2026 and beyond, despite ongoing macroeconomic uncertainties.