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Franklin Covey (FC) Stock Falls After Company Cuts Full-Year Revenue Outlook Despite Strong Q3 Results

Franklin Covey (NYSE: FC) shares moved lower in after-hours trading after the leadership and organizational performance company reported solid fiscal third-quarter 2026 results but lowered its full-year revenue guidance due to contract timing shifts and education funding challenges.

While profitability improved and deferred revenue continued to grow, investors focused on the revised outlook for the remainder of fiscal 2026.

# Revenue and Profit Improve

Franklin Covey reported third-quarter revenue of $67.8 million, up 1% year over year, driven by continued strength in its Enterprise business.

Net income improved to $3.1 million, or $0.27 per diluted share, compared with a net loss of $1.4 million a year earlier. Adjusted EBITDA increased 14% to $8.3 million, reflecting continued cost discipline.

The company also reported 4% growth in Enterprise North America invoiced amounts, while consolidated deferred revenue increased 7% to $96.0 million, highlighting healthy demand for its subscription-based services.

# Enterprise Business Remains Strong

Management highlighted continued momentum in Enterprise North America, where deferred revenue increased 18% year over year and year-to-date services bookings grew more than 25%.

The company said these trends position the business for meaningful growth in fiscal 2027 despite short-term revenue headwinds.

# Revenue Guidance Lowered

Franklin Covey reduced its fiscal 2026 revenue guidance to $260 million-$267 million from the previous range of $265 million-$275 million.

Management attributed the revision to the timing of service delivery for a large enterprise contract, a state budget reduction that delayed a major education contract, and continued geopolitical challenges affecting international operations.

However, the company maintained its adjusted EBITDA guidance within a narrower range of $28 million-$31 million, citing ongoing cost discipline.

# Why FC Stock Is Lower Today

Investors appeared to focus on several factors:

* Full-year revenue guidance was lowered.
* Education revenue faced pressure from state budget reductions.
* Some large enterprise revenue shifted into fiscal 2027.
* International operations continue to face geopolitical headwinds.

Despite stronger earnings, improving deferred revenue, and healthy enterprise demand, the reduction in full-year revenue guidance overshadowed the otherwise solid quarterly results, pressuring Franklin Covey shares in after-hours trading.
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Author
WS Investor 07-02-26