Franklin Covey Co reported a solid QQ3 2024, with revenue of $73.4 million, up about 2.7% year-over-year, and adjusted EBITDA of $13.9 million, up roughly 17% year-over-year. The quarter benefited from broad-based strength in both the Enterprise and Education divisions, supported by robust leading indicators, including a 15% rise in billed and unbilled deferred revenue to $83.8 million and a 2% rise in unbilled deferred revenue to $69.4 million. Net income reached $5.72 million, with EPS of $0.43, and free cash flow year-to-date rose to $30.6 million, up 96% versus the prior year. Management reaffirmed full-year guidance, signaling continued revenue momentum into fiscal 2025, and highlighted disciplined capital allocation through ongoing stock repurchases (YTD purchases of 649k shares for $25.8 million) and a new $50 million buyback authorization.
Key drivers cited by management include the mission-critical nature of the client problems Franklin Covey solves, a durable and scalable subscription-based model with strong gross margins, and growing services bookings that are funneling into revenues over the next 12–18 months. The company expects continued strength in education (new and retained schools pipeline) and improved retention in NA enterprise. However, execution remains exposed to macro headwinds (notably ESSER funding dynamics in education and geopolitical/china-related risks in international markets). Overall, FC presents a constructive risk-reward profile: solid profitability, strong liquidity (net cash position), visible revenue growth through deferred/unbilled revenue, and substantial optionality from new content and technology enhancements.