Franklin Covey Co (NYSE:FC) stock fell 23.03% (As on April 3, 12:21:38 AM UTC-4, Source: Google Finance) after the company reported second-quarter revenue that fell short of analyst expectations and provided disappointing full-year guidance. Enterprise Division revenues for the second quarter of fiscal 2025 totaled $43.6 million compared with $45.6 million in the prior year. Enterprise Division revenues decreased primarily due to a $1.1 million decrease in International Direct Office revenues and a $1.0 million decrease in North America segment revenues, which were impacted by canceled government contracts and macroeconomic and business environment uncertainties. Education Division revenues in the second quarter of fiscal 2025 increased 3% to $15.1 million compared with $14.7 million in the prior year. Second quarter growth was primarily due to increased training and coaching revenue, membership subscription revenues, and classroom materials sales. Consolidated subscription and subscription services revenues for the second quarter were $49.5 million compared with $50.3 million in the second quarter of fiscal 2024.

Moreover, Adjusted EBITDA for the second quarter of fiscal 2025 was in-line with Company expectations at $2.1 million compared with $7.4 million in the prior year. In constant currency, Adjusted EBITDA was $2.6 million in the second quarter of fiscal 2025. Consolidated deferred subscription revenue at February 28, 2025, increased 10% to $94.4 million compared with $86.1 million at February 29, 2024. At February 28, 2025, 55% of the Company’s AAP contracts in North America are for at least two years, compared with 56% at February 29, 2024, and the percentage of contracted amounts represented by multi-year contracts was 61% compared with 62% at February 29, 2024. Unbilled deferred revenue totaled $64.5 million at February 28, 2025, compared with $72.7 million at February 29, 2024.

FC in the second quarter of FY25 has reported the adjusted loss per share of 8 cents, beating the analysts’ estimates for the adjusted loss per share of 10 cents. The company had reported the adjusted revenue of $59.6 million in the second quarter of FY25, missing the analysts’ estimates for revenue of $62.24 million. The revenue decline was primarily due to decreased Enterprise Division sales, which fell to $43.6 million from $45.6 million in the prior year. This drop was attributed to lower International Direct Office revenues and North America segment revenues, impacted by canceled government contracts and macroeconomic uncertainties.

Looking ahead, the company revised its fiscal 2025 guidance, now expecting revenue between $275 million and $285 million, significantly below the analyst consensus of $297.4 million. This guidance reflects ongoing challenges related to government actions and the current business environment.