Franklin Covey Co (NYSE:FC) stock plunges 10.30% (As on July 3, 11:21:40 AM UTC-4, Source: Google Finance) after the company reported a third-quarter loss that significantly missed analyst expectations, as the organizational performance improvement company faced headwinds from macroeconomic uncertainties and canceled government contracts. Franklin Covey’s Enterprise Division revenue declined to $47.3 million from $51.9 million a year earlier, while Education Division revenue fell to $18.6 million from $20.2 million. Enterprise Division revenue performance was impacted by a $3.5 million decrease in North America segment revenue and a $1.0 million decrease in International Direct Office revenue. These segments were affected by ongoing macroeconomic uncertainties, geopolitical trade tensions, and canceled U.S. federal government contracts. The company cited ongoing macroeconomic uncertainties, geopolitical trade tensions, and canceled U.S. federal government contracts as factors impacting performance. Deferred subscription revenue showed strength, increasing 7% YoY to $89.3 million. The company maintained a strong liquidity position with over $95 million available, including $33.7 million in cash and no drawdowns on its $62.5 million credit facility. Consolidated subscription and subscription services revenue for Q3 FY2025 was $57.7 million compared with $60.8 million in Q3 FY2024. Subscription revenue invoiced for Q3 FY2025 totaled $31.7 million compared with $34.5 million in Q3 FY2024. The Company realized a net loss for Q3 FY2025 of $(1.4) million compared with net income of $5.7 million, in Q3 FY2024.

FC in the third quarter of FY25 has reported the adjusted loss per share of 11 cents, missing the analysts’ estimates for the adjusted earnings per share of 32 cents. The company had reported the adjusted revenue decline of 8.6 percent to $67.1 million in the third quarter of FY25, missing the analysts’ estimates for revenue of $77.39 million. The quarter’s results included $4.7 million in restructuring charges related to the company’s go-to-market transformation. Adjusted EBITDA for Q3 FY2025 exceeded Company guidance and was $7.3 million compared with $13.9 million in the prior year.

Additionally, the company repurchased approximately 372,000 shares of its common stock for $8.3 million during the quarter. Cash provided by operating activities for the three quarters ended May 31, 2025 was $19.0 million compared with $38.4 million in the prior year. Free cash flow for the first three quarters of fiscal 2025 was $10.6 million compared with $30.6 million in the prior year.

Franklin Covey updated its fiscal 2025 guidance, now expecting total revenue between $265 million and $275 million, with adjusted EBITDA expected to be between $28 million and $33 million.