Franklin Covey Co (NYSE:FC) Stock Plummets After Q1 FY2026 Earnings Miss

Franklin Covey Co (NYSE:FC) reported financial results for its first quarter of fiscal 2026, which ended on November 30, 2025. The organizational performance improvement company posted revenue and earnings that fell short of analyst expectations, leading to a sharp decline in its stock price in after-hours trading.

Earnings and Revenue Versus Estimates

The company's quarterly results missed Wall Street's consensus estimates on both the top and bottom lines.

• Revenue: Franklin Covey reported consolidated revenue of $64.0 million for the quarter. This represents a 7.3% decrease from the $69.1 million reported in the same period last year and fell short of the analyst estimate of approximately $66.7 million.
• Earnings Per Share (EPS): The company realized a net loss of $3.3 million, or $(0.27) per share. On an adjusted basis, which excludes certain one-time items, the company reported positive Adjusted EBITDA of $3.7 million. The reported non-GAAP EPS of $0.07 came in below the analyst estimate of $0.085.

Market Reaction

The market's immediate reaction to the earnings miss was decisively negative. Following the release, Franklin Covey's stock fell sharply in after-hours trading, declining over 10%. This price action suggests investors were disappointed by the weaker-than-expected quarterly performance and the company's swing to a net loss from a profit in the prior year.

First Quarter Fiscal 2026 Summary

The earnings release highlighted several key financial and operational details for the quarter:

• Division Performance: Revenue declined in both the Enterprise and Education divisions. Enterprise Division revenue totaled $47.5 million, down from $51.6 million a year ago, impacted by macroeconomic uncertainties and canceled U.S. federal government contracts. Education Division revenue was $16.1 million, compared with $16.5 million in Q1 FY2025.
• Profitability Metrics: Adjusted EBITDA was $3.7 million, a significant decrease from $7.7 million in the prior-year period. The Adjusted EBITDA margin contracted to 5.7% from 11.1%.
• Cash Flow and Balance Sheet: The company reported free cash flow of $(3.7) million, a notable reversal from the $11.4 million generated in Q1 FY2025. Cash and cash equivalents stood at $17.5 million, down from $53.3 million at the end of the previous fiscal year, partly due to share repurchases.
• Forward Guidance: Management affirmed its full-year fiscal 2026 guidance, expecting total revenue between $265 million and $275 million and Adjusted EBITDA in the range of $28 million to $33 million. This revenue outlook brackets the current analyst sales estimate of $274.6 million for the full year.

Outlook and Analyst Expectations

While the quarterly results were soft, the company maintained its full-year outlook, expressing confidence in a return to growth. Management stated that a completed sales transformation and cost reduction actions are expected to drive improved results in the back half of the fiscal year and into fiscal 2027.

Looking ahead, analysts currently estimate revenue of approximately $61.7 million for the upcoming second quarter (Q2 FY2026). The company's own full-year guidance midpoint of $270 million is closely aligned with the current analyst consensus, suggesting that management believes the first-quarter weakness is a temporary setback within the fiscal year's trajectory.

For a detailed look at Franklin Covey's historical earnings, future estimates, and analyst projections, you can review the data here.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. The analysis is based on publicly available data and earnings releases. Investors should conduct their own research and consider their individual financial circumstances before making any investment decisions.