Franklin Covey Co. has reported strong financial results for the third quarter of fiscal 2024, with consolidated revenue increasing to $73.4 million compared to $71.4 million in the prior year. Net income for the quarter saw a significant 25% increase to $5.7 million, or $0.43 per diluted share, compared to $4.6 million, or $0.32 per diluted share in the prior year. Additionally, adjusted EBITDA increased 17% to $13.9 million for the third quarter compared to $11.9 million in fiscal 2023.
The company's cash flows from operating activities also showcased substantial growth, increasing to $38.4 million compared with $25.9 million in the first three quarters of fiscal 2023. Free cash flow saw a significant surge, reaching $30.6 million from $15.6 million in the same period of fiscal 2023. Liquidity remained robust at nearly $100 million, with $36.6 million of cash and no drawdowns on the company’s $62.5 million credit facility, even after purchasing $25.8 million of its common stock through May 31, 2024.
In terms of revenue breakdown, the Enterprise Division revenues for the third quarter of fiscal 2024 totaled $52.0 million compared to $53.2 million in fiscal 2023. However, the Education Division revenues grew impressively by 18% to $20.1 million in the third quarter of fiscal 2024. Total company subscription and subscription services revenues reached $60.8 million, reflecting a 6% increase over the third quarter of fiscal 2023. Moreover, operating income for the quarter ended May 31, 2024, increased by 27% to $8.3 million compared to $6.6 million in fiscal 2023.
The company also reported positive trends in its deferred subscription revenue, with consolidated deferred subscription revenue at May 31, 2024, increasing by 15% to $83.8 million compared to $72.7 million at May 31, 2023. Unbilled deferred subscription revenue at May 31, 2024, grew to $69.4 million compared to $68.2 million at May 31, 2023.
Looking ahead, based on the company’s third quarter results and improved leading indicators, Franklin Covey Co. has reaffirmed its guidance for fiscal 2024. The company expects a strong finish to the fiscal year, despite the challenges faced in the first half of fiscal 2024, and anticipates achieving the highest levels of revenue, adjusted EBITDA, and free cash flow since the sale of the company’s consumer products division.
In line with its positive financial performance, the company's board of directors approved a new plan to purchase up to $50.0 million of its outstanding common stock, signaling confidence in its future prospects.
As a result of these announcements, the company's shares have moved 1.2% on the market, and are now trading at a price of $34.93. Check out the company's full 8-K submission here.
