Franklin Covey Co. has reported its first quarter fiscal 2025 financial results, with consolidated revenue increasing to $69.1 million compared with $68.4 million in the first quarter of fiscal 2024. The company's rolling four-quarter revenue for the period ended November 30, 2024, also saw an increase of 3% to $287.9 million compared with $279.6 million for the comparable period ended November 30, 2023.
The Enterprise division revenues for the first quarter of fiscal 2025 were $51.6 million compared with $52.4 million in fiscal 2024. The decrease was primarily due to decreased revenue through the company’s offices in China and Japan and by decreased international licensee revenues as North America segment sales were essentially flat for the quarter. The All Access Pass (AAP) subscription plus subscription services revenue was $41.0 million in the first quarter of fiscal 2025 compared with $41.6 million in the prior year.
The Education division revenues in the first quarter increased 11% to $16.5 million compared with $14.9 million in the first quarter of the prior year. First quarter revenue growth was primarily due to increased sales of classroom and training materials, increased coaching and consulting revenue, and increased membership subscription revenues resulting from new schools which started the Leader in Me during fiscal 2024.
Total company subscription and subscription services revenues reached $55.8 million, a 2% increase over $54.8 million in the first quarter of fiscal 2024. For the first quarter of fiscal 2025, subscriptions invoiced equaled the first quarter of the prior year at $24.7 million.
The company’s operating expenses for the quarter ended November 30, 2024, increased $4.3 million compared with the prior year, primarily due to a $3.0 million increase in selling, general, and administrative (SG&A) expenses and a $1.4 million increase in restructuring expenses. Operating income for the quarter ended November 30, 2024, was $1.5 million compared with $5.3 million in fiscal 2024, and reflected the factors noted above. Net income for the first quarter of fiscal 2025 was $1.2 million, or $0.09 per diluted share, compared with $4.9 million, or $0.36 per diluted share, in the first quarter of the prior year.
Adjusted EBITDA for the first quarter of fiscal 2025 was in-line with expectations at $7.7 million compared with $11.0 million in the prior year. In constant currency, adjusted EBITDA was $8.1 million in the first quarter of fiscal 2025. Adjusted EBITDA for the rolling four quarters ended November 30, 2024, increased to $52.0 million compared with $47.6 million for the comparable period ended November 30, 2023.
Deferred subscription revenue at November 30, 2024, increased 10% to $95.7 million compared with $87.2 million at November 30, 2023. Unbilled deferred subscription revenue at November 30, 2024, was $73.0 million compared with $82.5 million at November 30, 2023.
Cash flows from operating activities for the first quarter of fiscal 2025 remained strong and totaled $14.1 million compared with $17.4 million in fiscal 2024. Free cash flow for the first quarter totaled $11.4 million compared with $13.7 million in the prior year.
The company purchased 145,768 shares of its common stock for $6.0 million during the first quarter of fiscal 2025.
Paul Walker, President, and Chief Executive Officer, stated that the first quarter revenue grew 1% to $69.1 million compared with $68.4 million in last year’s first quarter. This result reflects strong growth in the Education division where revenue grew 11% while sales were flat in the Enterprise division, which was in-line with expectations when the company began the transition of its sales force to a more focused and powerful go-to-market model in North America.
Based on fiscal 2025 financial results and the expected success of investments in its sales and marketing efforts, the company affirms its expected fiscal 2025 revenue to be in the range of $295 million to $305 million in constant currency.
Walker concluded by stating that the company is now positioned to leverage its strategic achievements by accelerating its go-to-market efforts to capture an even greater share of its total addressable market. The company expects the impact of these go-to-market initiatives to result in a significant increase in its sustainable revenue growth rate to consistently achieve double-digit growth and to also generate accelerated levels of adjusted EBITDA and cash flows in the future. Following these announcements, the company's shares moved 0.2%, and are now trading at a price of $35.3. For more information, read the company's full 8-K submission here.
