false0000886206--08-31Q233.3333.330000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:ContractedRevenueMember2025-09-012026-02-280000886206us-gaap:TreasuryStockCommonMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:RetainedEarningsMember2025-12-012026-02-280000886206us-gaap:PerformanceSharesMemberfc:ThreeYearMeasurementOfFinancialMetricsMembersrt:MaximumMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206srt:AsiaPacificMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:RoyaltiesMemberfc:InternationalMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-09-012026-02-2800008862062025-11-170000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:RoyaltiesMember2024-12-012025-02-280000886206fc:ServicesAndProductsMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-09-012025-11-3000008862062024-12-012025-02-280000886206fc:LeasesAndOtherMemberfc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206fc:LeasesAndOtherMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206fc:LeasesAndOtherMemberfc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206us-gaap:CommonStockMember2024-08-310000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-09-012025-02-280000886206us-gaap:CorporateNonSegmentMember2024-12-012025-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-09-012026-02-280000886206fc:LeasesAndOtherMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-12-012025-02-280000886206us-gaap:RestrictedStockMember2024-09-012025-02-280000886206fc:LeasesAndOtherMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:RoyaltiesMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:ContractedRevenueMember2024-12-012025-02-280000886206fc:RoyaltiesMember2024-12-012025-02-280000886206fc:TimeBasedAwardSharesMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:RoyaltiesMember2024-09-012025-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-11-300000886206us-gaap:TreasuryStockCommonMember2024-11-300000886206fc:RoyaltiesMember2025-12-012026-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:ContractedRevenueMemberfc:InternationalMember2025-09-012026-02-280000886206fc:LeasesAndOtherMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206fc:AnnualLongTermIncentivePerformanceAndRetentionPlanMemberfc:VestAugust31OfEachYearFollowingGrantMember2025-09-012026-02-2800008862062026-02-280000886206us-gaap:PerformanceSharesMemberfc:TargetMemberfc:ThreeYearMeasurementOfFinancialMetricsMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206us-gaap:CommonStockMember2025-11-300000886206us-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206us-gaap:TreasuryStockCommonMember2026-02-280000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:ContractedRevenueMemberfc:InternationalMember2025-12-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:InternationalMember2025-12-012026-02-2800008862062025-08-140000886206us-gaap:TreasuryStockCommonMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-12-012025-02-280000886206fc:LeasesAndOtherMember2024-09-012025-02-280000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-12-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-09-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-12-012026-02-280000886206fc:LeasesAndOtherMember2025-12-012026-02-280000886206fc:InternationalMember2025-09-012025-11-300000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-09-012026-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2024-12-012025-02-280000886206fc:LongTermIncentiveAwardsMember2024-12-012025-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-12-012025-02-280000886206fc:FiscalTwoThousandTwentyOneAcquisitionOfStriveTalentPlanMemberfc:FormerPrincipalOwnerMember2025-09-012026-02-280000886206us-gaap:CorporateNonSegmentMember2025-09-012026-02-2800008862062025-02-280000886206us-gaap:ReportableSegmentAggregationBeforeOtherOperatingSegmentMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMemberfc:RoyaltiesMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberfc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:AdditionalPaidInCapitalMember2024-11-300000886206us-gaap:RestrictedStockMember2025-12-012026-02-280000886206us-gaap:PerformanceSharesMember2025-09-012026-02-280000886206us-gaap:AdditionalPaidInCapitalMember2024-08-310000886206fc:RoyaltiesMember2024-09-012025-02-280000886206srt:AmericasMember2025-09-012026-02-280000886206fc:EmployeeStockPurchasePlanMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2025-12-012026-02-280000886206us-gaap:RetainedEarningsMember2024-09-012024-11-300000886206fc:StriveAcquisitionCompensationMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:ContractedRevenueMemberfc:InternationalMember2024-09-012025-02-280000886206us-gaap:AdditionalPaidInCapitalMember2025-08-310000886206us-gaap:PerformanceSharesMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2024-09-012025-02-280000886206us-gaap:RetainedEarningsMember2025-11-300000886206us-gaap:AdditionalPaidInCapitalMember2026-02-280000886206us-gaap:CommonStockMember2024-11-300000886206us-gaap:TreasuryStockCommonMember2025-11-300000886206us-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-012024-11-300000886206us-gaap:TreasuryStockCommonMember2024-09-012024-11-300000886206fc:ContractedRevenueMember2024-12-012025-02-280000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:RoyaltiesMemberfc:InternationalMember2024-12-012025-02-280000886206fc:EuropeMiddleEastAfricaMember2025-09-012026-02-280000886206us-gaap:TreasuryStockCommonMember2024-08-310000886206us-gaap:OperatingSegmentsMemberfc:InternationalMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2025-12-012026-02-280000886206fc:StriveAcquisitionCompensationMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-09-012025-02-280000886206us-gaap:TreasuryStockCommonMember2025-08-310000886206us-gaap:CorporateNonSegmentMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:RoyaltiesMemberfc:InternationalMember2025-12-012026-02-280000886206us-gaap:RetainedEarningsMember2026-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-09-012025-02-280000886206fc:LongTermIncentiveAwardsMember2025-09-012026-02-280000886206us-gaap:AdditionalPaidInCapitalMember2024-12-012025-02-280000886206fc:ServicesAndProductsMemberfc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206us-gaap:RestrictedStockMember2025-09-012026-02-280000886206fc:TimeBasedAwardSharesMemberfc:VestNovemberOfEachYearFollowingGrantMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206us-gaap:AdditionalPaidInCapitalMember2025-02-280000886206fc:ContractedRevenueMember2025-12-012026-02-2800008862062024-08-3100008862062025-09-012025-11-300000886206fc:EmployeeStockPurchasePlanMember2024-12-012025-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-12-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2026-02-280000886206fc:EmployeeStockPurchasePlanMember2025-12-012026-02-280000886206fc:LongTermIncentiveAwardsMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2025-12-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-12-012026-02-280000886206us-gaap:CorporateNonSegmentMember2024-09-012025-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-09-012025-02-280000886206srt:AmericasMember2025-12-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-08-310000886206fc:Long-TermRestructuringPlanMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2025-09-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206fc:NorthAmericaSegmentMemberfc:Long-TermRestructuringPlanMember2025-12-012026-02-280000886206fc:EuropeMiddleEastAfricaMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:ReportableSegmentAggregationBeforeOtherOperatingSegmentMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:InternationalMember2024-12-012025-02-280000886206us-gaap:ReportableSegmentAggregationBeforeOtherOperatingSegmentMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMemberfc:RoyaltiesMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2024-09-012025-02-280000886206us-gaap:CommonStockMember2025-02-280000886206srt:AsiaPacificMember2024-09-012025-02-280000886206us-gaap:PerformanceSharesMembersrt:MaximumMember2025-09-012026-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2024-09-012025-02-280000886206fc:ServicesAndProductsMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:StriveAcquisitionCompensationMember2025-12-012026-02-280000886206fc:LeasesAndOtherMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206fc:EmployeeStockPurchasePlanMember2025-09-012026-02-280000886206us-gaap:RetainedEarningsMember2025-02-280000886206fc:ServicesAndProductsMember2024-12-012025-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-12-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-11-300000886206fc:NorthAmericaSegmentMember2025-09-012025-11-300000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:RoyaltiesMember2025-09-012026-02-280000886206us-gaap:CommonStockMember2026-02-2800008862062025-08-310000886206us-gaap:RestrictedStockMember2025-08-310000886206us-gaap:OperatingSegmentsMemberfc:ContractedRevenueMemberfc:InternationalMember2024-12-012025-02-280000886206srt:AsiaPacificMember2024-12-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-09-012025-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2025-12-012026-02-280000886206fc:ServicesAndProductsMember2025-09-012026-02-280000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206fc:AnnualLongTermIncentivePerformanceAndRetentionPlanMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2025-09-012026-02-280000886206srt:AsiaPacificMember2025-12-012026-02-280000886206us-gaap:RestrictedStockMember2026-02-280000886206fc:RoyaltiesMember2025-09-012026-02-280000886206us-gaap:AdditionalPaidInCapitalMember2024-09-012024-11-300000886206fc:LeasesAndOtherMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2024-09-012025-02-280000886206us-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2024-09-012025-02-280000886206fc:ServicesAndProductsMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:Long-TermRestructuringPlanMember2026-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2025-12-012026-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2024-12-012025-02-280000886206us-gaap:TreasuryStockCommonMember2025-09-012025-11-300000886206us-gaap:PerformanceSharesMemberfc:TargetMemberfc:RevenueAndAdjustedEBITDAMember2025-09-012026-02-280000886206us-gaap:RetainedEarningsMember2025-09-012025-11-300000886206us-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMemberfc:RoyaltiesMember2025-09-012026-02-280000886206us-gaap:RetainedEarningsMember2025-08-310000886206us-gaap:CommonStockMember2025-08-310000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-12-012025-02-280000886206srt:AmericasMember2024-12-012025-02-280000886206us-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206us-gaap:TreasuryStockCommonMember2025-02-280000886206us-gaap:RetainedEarningsMember2024-08-310000886206fc:Long-TermRestructuringPlanMemberfc:InternationalMember2025-12-012026-02-2800008862062025-09-012026-02-2800008862062024-09-012025-02-280000886206fc:EuropeMiddleEastAfricaMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:RoyaltiesMemberfc:InternationalMember2025-09-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:ContractedRevenueMember2025-12-012026-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2025-12-012026-02-280000886206fc:LeasesAndOtherMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-08-310000886206us-gaap:RestrictedStockMember2024-12-012025-02-280000886206us-gaap:AdditionalPaidInCapitalMember2025-09-012025-11-300000886206us-gaap:RetainedEarningsMember2024-12-012025-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:EnterpriseDivisionMember2024-09-012025-02-2800008862062026-03-310000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2024-12-012025-02-280000886206fc:LongTermIncentiveAwardsMember2024-09-012025-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberfc:InternationalMember2024-09-012025-02-280000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMember2024-12-012025-02-280000886206fc:StriveAcquisitionCompensationMember2025-09-012026-02-280000886206us-gaap:RetainedEarningsMember2024-11-300000886206fc:EnterpriseDivisionMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206fc:ServicesAndProductsMember2025-12-012026-02-280000886206fc:ExpectedPaymentDuringFirstAndSecondQuartersFiscal2026Member2026-02-280000886206fc:LeasesAndOtherMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-12-012025-02-280000886206fc:ServicesAndProductsMemberfc:EducationPracticeMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206us-gaap:PerformanceSharesMembersrt:MinimumMemberfc:ThreeYearMeasurementOfFinancialMetricsMemberfc:LongTermIncentivePlanTwoThousandTwentySixMember2025-09-012026-02-280000886206srt:AmericasMember2024-09-012025-02-280000886206fc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMemberfc:RoyaltiesMember2025-09-012026-02-280000886206us-gaap:AdditionalPaidInCapitalMember2025-12-012026-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2024-12-012025-02-280000886206fc:LeasesAndOtherMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2025-09-012026-02-280000886206us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-012025-02-280000886206fc:LeasesAndOtherMember2025-09-012026-02-280000886206fc:LeasesAndOtherMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2024-12-012025-02-280000886206us-gaap:ReportableSegmentAggregationBeforeOtherOperatingSegmentMemberus-gaap:OperatingSegmentsMember2025-12-012026-02-2800008862062025-12-012026-02-280000886206us-gaap:OperatingSegmentsMemberus-gaap:CorporateAndOtherMemberfc:ContractedRevenueMember2024-09-012025-02-280000886206fc:ServicesAndProductsMemberfc:NorthAmericaSegmentMemberus-gaap:OperatingSegmentsMember2024-09-012025-02-280000886206fc:ContractedRevenueMember2024-09-012025-02-280000886206fc:EducationPracticeMemberus-gaap:OperatingSegmentsMemberfc:ContractedRevenueMember2025-12-012026-02-280000886206fc:ServicesAndProductsMember2024-09-012025-02-280000886206fc:EuropeMiddleEastAfricaMember2024-12-012025-02-280000886206fc:EducationPracticeMember2025-09-012025-11-300000886206fc:ServicesAndProductsMemberus-gaap:OperatingSegmentsMemberfc:InternationalMember2024-12-012025-02-280000886206us-gaap:AdditionalPaidInCapitalMember2025-11-300000886206fc:ContractedRevenueMember2025-09-012026-02-28fc:Itemfc:Segmentxbrli:purexbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-11107

FRANKLIN COVEY CO.

(Exact name of registrant as specified in its charter)


Utah		87-0401551
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13907 South Minuteman Dr., Suite 500 Draper, Utah		84020
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (801) 817-1776

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.05 Par Value	FC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

11,272,444 shares of common stock, $0.05 par value per share, as of March 31, 2026

Table of Contents


		Page

Part I.	Financial Information	3

Item 1	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Changes In Shareholders’ Equity	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

Part Ii.	Other Information	30

Item 1.	Legal Proceedings	30
Item 1.A	Risk Factors	30
Item 2.	Unregistered Sales Of Equity Securities And Use Of Proceeds	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
Signatures		32

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FRANKLIN COVEY CO.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per-share amounts)


		February 28,				August 31,
		2026				2025
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$		13,717		$		31,698
Accounts receivable, less allowance for credit losses of $2,721 and $2,929			50,191				68,415
Inventories			5,336				5,165
Prepaid expenses and other current assets			26,188				24,199
Total current assets			95,432				129,477

Property and equipment, net			13,177				14,324
Intangible assets, net			32,449				34,551
Goodwill			31,220				31,220
Deferred income tax assets			239				231
Other long-term assets			33,972				33,109
	$		206,489		$		242,912

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of notes payable	$		835		$		823
Accounts payable			6,611				8,780
Deferred revenue			97,936				106,534
Customer deposits			25,021				16,327
Accrued liabilities			21,840				24,828
Total current liabilities			152,243				157,292

Other liabilities			11,695				14,718
Deferred income tax liabilities			4,501				3,991
Total liabilities			168,439				176,001

Shareholders’ equity:
Common stock, $0.05 par value; 40,000 shares authorized, 27,056 shares issued			1,353				1,353
Additional paid-in capital			229,610				230,251
Retained earnings			121,001				126,272
Accumulated other comprehensive loss			(1,162	)			(1,032	)
Treasury stock at cost, 15,866 shares and 14,565 shares			(312,752	)			(289,933	)
Total shareholders’ equity			38,050				66,911
	$		206,489		$		242,912

See notes to condensed consolidated financial statements

Table of Contents

FRANKLIN COVEY CO.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND STATEMENTS

OF COMPREHENSIVE LOSS

(in thousands, except per-share amounts)


		Quarter Ended							Two Quarters Ended
		February 28,				February 28,				February 28,				February 28,
		2026				2025				2026				2025
		(unaudited)								(unaudited)
Revenue	$		59,647		$		59,612		$		123,692		$		128,698
Cost of revenue			14,374				13,866				30,045				30,241
Gross profit			45,273				45,746				93,647				98,457

Selling, general, and administrative			43,497				45,087				89,618				92,291
Restructuring costs			1,510				-				4,954				1,984
Building exit costs			455				-				1,129				-
Depreciation			1,140				1,016				2,239				1,967
Amortization			670				1,098				1,357				2,196
Income (loss) from operations			(1,999	)			(1,455	)			(5,650	)			19

Interest income			29				263				144				553
Interest expense			(92	)			(156	)			(187	)			(333	)
Income (loss) before income taxes			(2,062	)			(1,348	)			(5,693	)			239
Income tax benefit (provision)			80				272				422				(134	)
Net income (loss)	$		(1,982	)	$		(1,076	)	$		(5,271	)	$		105

Net income (loss) per share:
Basic and diluted	$		(0.17	)	$		(0.08	)	$		(0.45	)	$		0.01

Weighted average number of common shares:
Basic			11,422				13,102				11,816				13,097
Diluted			11,422				13,102				11,816				13,236

COMPREHENSIVE LOSS
Net income (loss)	$		(1,982	)	$		(1,076	)	$		(5,271	)	$		105
Foreign currency translation adjustments, net of income taxes of $0, $0, $0, and $0			76				(42	)			(130	)			(244	)
Comprehensive loss	$		(1,906	)	$		(1,118	)	$		(5,401	)	$		(139	)

See notes to condensed consolidated financial statements

Table of Contents

FRANKLIN COVEY CO.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Two Quarters Ended
		February 28,				February 28,
		2026				2025
		(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$		(5,271	)	$		105
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			3,596				4,163
Amortization of capitalized curriculum costs			2,515				2,171
Stock-based compensation			4,093				3,513
Deferred income taxes			510				(145	)
Amortization of right-of-use operating lease assets			450				287
Gain on license obligation restructuring			(338	)			-
Changes in assets and liabilities:
Decrease in accounts receivable, net			18,322				32,451
Increase in inventories			(161	)			(97	)
Decrease in prepaid expenses and other assets			668				1,192
Decrease in accounts payable and accrued liabilities			(3,973	)			(14,307	)
Decrease in deferred revenue and customer deposits			(1,788	)			(10,359	)
Decrease in income taxes payable/receivable			(1,631	)			(5,791	)
Decrease in other long-term liabilities			(641	)			(407	)
Net cash provided by operating activities			16,351				12,776

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment			(2,763	)			(2,271	)
Curriculum development costs			(4,085	)			(2,380	)
Reacquisition of license rights			-				(324	)
Net cash used for investing activities			(6,848	)			(4,975	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit borrowings			11,677				-
Payments on line of credit borrowings			(11,677	)			-
Principal payments on financing obligation			-				(1,908	)
Purchases of common stock for treasury			(28,111	)			(14,658	)
Proceeds from sales of common stock held in treasury			558				675
Net cash used for financing activities			(27,553	)			(15,891	)
Effect of foreign currency exchange rates on cash and cash equivalents			69				(180	)
Net decrease in cash and cash equivalents			(17,981	)			(8,270	)
Cash and cash equivalents at the beginning of the period			31,698				48,663
Cash and cash equivalents at the end of the period	$		13,717		$		40,393

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$		279		$		6,029
Cash paid for interest			146				266

Non-cash investing and financing activities:
Acquisition of property and equipment and capitalized curriculum financed by accounts payable	$		1,172		$		913
Consideration for reacquired license rights from liabilities of seller			-				168
Acquisition of right-of-use operating lease assets for operating lease liabilities			310				-

See notes to condensed consolidated financial statements

Table of Contents

FRANKLIN COVEY CO.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands and unaudited)


															Accumulated
	Common			Common			Additional								Other			Treasury				Treasury
	Stock			Stock			Paid-In				Retained				Comprehensive			Stock				Stock
	Shares			Amount			Capital				Earnings				Loss			Shares				Amount
Balance at August 31, 2025		27,056	$		1,353	$		230,251		$		126,272		$		(1,032	)		(14,565	)	$		(289,933	)
Issuance of common stock from treasury								(2,353	)										136				2,643
Purchases of common shares for treasury																			(624	)			(11,123	)
Stock-based compensation								1,429
Cumulative translation adjustments																(206	)
Net loss												(3,289	)
Balance at November 30, 2025		27,056			1,353			229,327				122,983				(1,238	)		(15,053	)			(298,413	)
Issuance of common stock from treasury								(1,579	)										93				1,847
Purchases of common shares for treasury																			(946	)			(16,988	)
Stock-based compensation								2,664
Unvested stock award								(802	)										40				802
Cumulative translation adjustments																76
Net loss												(1,982	)
Balance at February 28, 2026		27,056	$		1,353	$		229,610		$		121,001		$		(1,162	)		(15,866	)	$		(312,752	)

See notes to condensed consolidated financial statements

Table of Contents

FRANKLIN COVEY CO.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY –

PRIOR YEAR

(in thousands and unaudited)


															Accumulated
	Common			Common			Additional								Other			Treasury				Treasury
	Stock			Stock			Paid-In				Retained				Comprehensive			Stock				Stock
	Shares			Amount			Capital				Earnings				Loss			Shares				Amount
Balance at August 31, 2024		27,056	$		1,353	$		231,813		$		123,204		$		(768	)		(14,084	)	$		(272,467	)
Issuance of common stock from treasury								(6,707	)										363				7,027
Purchases of common shares for treasury																			(146	)			(5,954	)
Stock-based compensation								2,167
Cumulative translation adjustments																(202	)
Net income												1,181
Balance at November 30, 2024		27,056			1,353			227,273				124,385				(970	)		(13,867	)			(271,394	)
Issuance of common stock from treasury								60											16				295
Purchases of common shares for treasury																			(251	)			(8,704	)
Stock-based compensation								1,346
Unvested stock award								(536	)										27				536
Cumulative translation adjustments																(42	)
Net loss												(1,076	)
Balance at February 28, 2025		27,056	$		1,353	$		228,143		$		123,309		$		(1,012	)		(14,075	)	$		(279,267	)

See notes to condensed consolidated financial statements

Table of Contents

FRANKLIN COVEY CO.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1 – BASIS OF PRESENTATION

Franklin Covey Co. (hereafter referred to as we, us, our, or the Company) is a global company that gives strategy the human edge. We help clients achieve breakthrough results and transform how they execute strategy at scale. Our Enterprise and Education Divisions develop high-performing leaders at all levels of the organization and align people around purpose and priorities. Through proven, principle-centered frameworks and practices, we build high-trust leaders, teams, and cultures and help organizations translate strategy into consistent execution. Our approach enables lasting, repeatable results by helping clients identify, align, and execute their most important priorities. This approach has been tested and refined through more than 40 years of work with tens of thousands of leaders and organizations. We have some of the best-known solutions in the industry, including a suite of individual-effectiveness and leadership-development training and products based on the best-selling books, The 7 Habits of Highly Effective People, The Speed of Trust, The Leader In Me, and The Four Disciplines of Execution, and proprietary content in the areas of Leadership, Execution, Productivity, Sales Performance, and Educational improvement. Our solutions and offerings are described in further detail at www.franklincovey.com and elsewhere in this report.

The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and results of operations of the Company as of the dates and for the periods indicated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2025, as filed with the SEC on November 12, 2025 (the Annual Report).

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

The results of operations for the quarter and two quarters ended February 28, 2026, are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2026, or for any future periods.

Inventories

Our inventories are stated at the lower of cost or net realizable value, cost being determined using the first-in, first-out method, and were comprised of finished goods at each of the balance sheet dates presented in this report.

Accounting Pronouncement Issued Not Yet Adopted

On December 14, 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 provides guidance to enhance transparency about income tax information through improvements to income tax disclosures primarily related to the effective income tax rate reconciliation and income taxes paid. This new guidance also includes certain other amendments to improve the effectiveness of income tax disclosures. We are currently assessing the anticipated impact of this standard on our consolidated financial statements. The amendments are effective for our annual periods beginning September 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on our disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires a public entity to disclose certain operating expenses disaggregated into categories, such as purchases of inventory,

Table of Contents

employee compensation, depreciation, and intangible asset amortization on an annual and interim basis. The guidance in ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The provisions within the update may be applied retrospectively for all periods presented in the financial statements. While we are still evaluating the specific impacts and adoption method, we anticipate this guidance will have a significant impact on our consolidated financial statement disclosures.

On September 18, 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. This ASU makes targeted improvements to the accounting for software costs. ASU 2025-06 also supersedes the guidance for website development costs along with the recognition requirements for development costs specific to websites. This guidance is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the ASU to determine its impact on our financial statements.

NOTE 2 – PURCHASES OF COMMON STOCK

Our purchases of common stock during the first two quarters of fiscal 2026 consisted of shares purchased on the open market and shares withheld for income taxes on stock-based compensation awards. Our stock-based compensation plans allow shares to be withheld to cover statutory income taxes if elected by the award recipient. These shares are valued at the market price on the date the shares are withheld. Our fiscal 2026 purchases of common stock through February 28, 2026, were comprised of the following (in thousands):


	Shares		Cost
Shares withheld for taxes on stock-
based compensation awards		67	$	1,172
Open market purchases		1,503		26,939
		1,570	$	28,111

On August 14, 2025 we initiated a 10b5-1 plan to purchase up to $10.0 million of our common stock through daily transactions. This 10b5-1 plan was completed in October 2025. On November 17, 2025, we initiated a new 10b5-1 plan to purchase up to $20.0 million of our common stock through daily transactions. This 10b5-1 plan was completed in January 2026.

NOTE 3 – REVENUE

Contract Balances

Our deferred revenue totaled $101.5 million at February 28, 2026, and $111.7 million at August 31, 2025, of which $3.5 million and $5.1 million were classified as components of other long-term liabilities at February 28, 2026 and August 31, 2025, respectively. During the quarter and two quarters ended February 28, 2026, we recognized $38.0 million and $75.5 million of previously deferred revenue.

Table of Contents

Deferred revenue primarily consists of billings or payments received in advance of revenue being recognized from subscription services and related professional and other services. Deferred revenue is recognized in revenue as the applicable revenue recognition criteria are met. We generally invoice customers in annual installments upon execution of a contract or as contractually committed services are delivered. The Leader in Me membership offering is bifurcated into a portal membership obligation and coaching and materials delivery obligations. We have determined that it is appropriate to recognize revenue related to the portal membership over the term of the underlying contract and to recognize revenue from coaching as those services are performed or as materials are shipped. The combined contract amount is recorded in deferred revenue until the performance obligations are satisfied. Any additional coaching or training days which are contracted independent of a Leader in Me membership are recorded as revenue in accordance with our general policy for services and products as described in our Annual Report. During the first two quarters of fiscal 2026, we entered into non-cancelable contracts for the delivery of the All Access Pass (AAP) and related services and materials in the Enterprise Division. These contract amounts are recorded in deferred revenue until the performance obligations are satisfied or until the end of the contract term.

Remaining Performance Obligations

Whenever possible, we enter into multi-year non-cancellable contracts which are invoiced either upon execution of the contract or at the beginning of each annual contract period. Remaining transaction price represents contracted revenue that has not yet been recognized, including unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price is influenced by factors such as inflation, the average length of the contract term, and the ability of the Company to continue to enter into multi-year non-cancellable contracts. At February 28, 2026, we had $166.4 million of remaining performance obligations, including our deferred revenue. The remaining performance obligation does not include customer deposits, as these amounts are generally refundable at the client’s request prior to the satisfaction of the obligation.

Disaggregated Revenue Information

Refer to Note 7, Segment Information, to these unaudited condensed consolidated financial statements for our disaggregated revenue disclosure.

NOTE 4 – STOCK-BASED COMPENSATION

Our stock-based compensation expense was comprised of the following for the periods presented (in thousands):


		Quarter Ended					Two Quarters Ended
		February 28,			February 28,			February 28,			February 28,
		2026			2025			2026			2025
Long-term incentive awards	$		1,099	$		850	$		2,061	$		2,529
Strive acquisition compensation			1,289			180			1,469			365
Unvested stock awards			220			240			460			480
Employee stock purchase plan			56			76			103			139
	$		2,664	$		1,346	$		4,093	$		3,513

During the quarter and two quarters ended February 28, 2026, we issued 133,571 shares and 269,714 shares, respectively, of our common stock under various stock-based compensation arrangements, including shares sold through our employee stock purchase plan (ESPP).

Fiscal 2026 Long-Term Incentive Plan Award

On November 13, 2025, the Organization and Compensation Committee granted a new long-term incentive plan (LTIP) award to our executive officers and other members of management. The fiscal 2026 LTIP award consists of three tranches, one with a time-based vesting condition and two with performance-based vesting conditions as described below:

Table of Contents

•

Time-Based Award Shares – 25% of a participant’s fiscal 2026 LTIP award shares vest over a three-year service period. The 2026 LTIP time-based awards step-vest with one-third vesting in each of November 2026, 2027, and 2028. The total number of time-based shares that may be earned by participants in the 2026 LTIP award is 77,642 shares (adjusted for forfeitures). The number of shares awarded in this tranche is not variable and will not fluctuate based on financial or performance measures.

•

Performance-Based Award Shares – The remaining 75% of a participant’s fiscal 2026 LTIP award is based on cumulative net revenue and cumulative Adjusted EBITDA achieved over a three-year measurement period consisting of fiscal 2026, fiscal 2027, and fiscal 2028. 70% of the performance-based shares will be earned on cumulative net revenue and 30% of the performance-based shares will be earned on cumulative Adjusted EBITDA. The number of shares that eventually vest to participants in this tranche is variable and may be 50% of the award (minimum award threshold) or up to 175% of the participant’s award (maximum threshold). The number of shares that may be earned for achieving 100% of the performance-based objectives totals 232,970 shares (adjusted for forfeitures). The maximum number of shares that may be awarded in connection with the performance-based tranches of the 2026 LTIP totals 407,639 shares.

Strive Acquisition Amendment

In connection with the fiscal 2021 acquisition of Strive Talent, Inc. (Strive), the former principal owner of Strive was entitled to earn up to approximately $4.2 million of additional consideration based on All Access Pass subscription and subscription services revenue over a five-year measurement period ending on May 31, 2026. These contingent payments were only earned if the former principal owner remained employed through the first four years of the measurement period. In an effort to retain the former principal owner of Strive, the Company and the former principal owner agreed to a modification of the acquisition agreement. In exchange for continued employment through February 27, 2026, the Company agreed to pay the former principal owner of Strive the remaining $1.4 million of unearned contingent consideration immediately following the end our second quarter. The Company subsequently issued 80,434 shares of its common stock under the terms of this modification agreement.

Annual Long-Term Incentive Performance and Retention Plan

We have a long-term equity incentive plan for client partners, managing directors, and certain other associates that we believe are critical to our long-term success. The number of shares granted to sales-related roles is generally based on the achievement of specified annual revenue goals while other awards are for an amount determined by the Organization and Compensation Committee of the Board of Directors. These time-based awards are granted after the completion of each fiscal year and vest over a three-year service period, with one-third of the shares vesting on the anniversary of the grant date of each subsequent year. We granted a total of 148,708 unvested share units (adjusted for forfeitures) in fiscal 2026 to participants under the terms of this long-term incentive plan. The compensation cost of these awards is included in the long-term incentive awards category in the preceding table.

Fiscal 2026 Board of Director Unvested Stock Award

Our annual unvested stock award granted to non-employee members of the Board of Directors is administered under the terms of our omnibus incentive plan, and is designed to provide our non-employee directors, who are not eligible to participate in our employee stock purchase plan, an opportunity to obtain an interest in the Company through the acquisition of shares of our common stock as part of their compensation. The annual award is normally granted in January of each year on the same day as our annual shareholders’ meeting. For the fiscal 2026 award, each eligible director received a whole share grant equal to $120,000 with a one-year vesting period. Our Board of Directors unvested stock award activity during the two quarters ended February 28, 2026 consisted of the following:

Table of Contents


	Number of Shares				Weighted-Average Grant Date Fair Value Per Share
Unvested stock awards at August 31, 2025		27,336		$		35.12
Granted		40,446				20.77
Forfeited		-				-
Vested		(27,336	)			35.12
Unvested stock awards at February 28, 2026		40,446		$		20.77

Employee Stock Purchase Plan

We have an ESPP that offers qualified employees the opportunity to purchase shares of our common stock at a price equal to 85% of the average fair market value of our common stock on the last trading day of each fiscal quarter. During the quarter and two quarters ended February 28, 2026, we sold 20,096 shares and 37,537 shares of our common stock to participants in the ESPP.

Table of Contents

NOTE 5 – RESTRUCTURING COSTS

Long-Term Restructuring Plan

During the quarter ended February 28, 2026, we initiated a long-term restructuring plan that is designed to streamline and simplify our operating model, focus investment in growth areas, improve processes, consolidate and centralize certain functions, and provide organizational focus to realign talent with current and expected business needs. This restructuring plan is expected to span four or five quarters and may incur various costs to implement the organizational and process changes. In the second quarter of fiscal 2026, we expensed $1.5 million of restructuring costs related to this new longer-term restructuring plan. These costs were comprised primarily of severance and related expenses for 7 employees and are expected to be paid out over the next three quarters. Approximately $1.5 million was attributable to our North America segment and approximately $30,000 was attributable to our International segment. At February 28, 2026, we had $0.7 million included in accrued liabilities on our condensed consolidated balance sheet for these restructuring activities.

First Quarter Restructuring Costs

During the first quarter of fiscal 2026, we expensed $3.4 million for restructuring costs to streamline our organizational structure and reduce ongoing operating costs. The restructuring charge was comprised of severance costs to approximately 45 associates who were impacted by the event. Approximately $2.3 million of the restructuring charge was attributable to the North America segment, $0.4 million was for the International segment, and $0.7 million was for the Education Division. We paid the majority of these severance benefits during the first two quarters of fiscal 2026 and at February 28, 2026, we had $0.2 million of these costs remaining in accrued liabilities on our condensed consolidated balance sheet for this restructuring event.

NOTE 6 – EARNINGS (LOSS) PER SHARE

The following schedule shows the calculation of net income (loss) per common share for the periods presented (in thousands, except per-share amounts).


	Quarter Ended								Two Quarters Ended
		February 28,				February 28,				February 28,				February 28,
		2026				2025				2026				2025
Numerator for basic and diluted income per share:
Net income (loss)	$		(1,982	)	$		(1,076	)	$		(5,271	)	$		105

Denominator for basic and diluted income per share:
Basic weighted average shares outstanding			11,422				13,102				11,816				13,097
Effect of dilutive securities:
Stock-based compensation awards			-				-				-				139
Diluted weighted average shares outstanding			11,422				13,102				11,816				13,236

EPS Calculations:
Net income (loss) per share:
Basic	$		(0.17	)	$		(0.08	)	$		(0.45	)	$		0.01
Diluted			(0.17	)			(0.08	)			(0.45	)			0.01

Since we incurred a net loss for the quarter and two quarters ended February 28, 2026, no potentially dilutive securities are included in the calculation of net loss per share because their inclusion would be anti-dilutive. The number of dilutive stock-based compensation awards as of February 28, 2026 would have been approximately 135,000 shares.

Table of Contents

NOTE 7 – SEGMENT INFORMATION

Segments

Our revenues are primarily comprised of training and consulting services and our internal reporting and operating structure is currently organized around two divisions: the Enterprise Division, which consists of our North America and International segments, and the Education Division, which is comprised of our Education practice. We have determined that our chief operating decision maker (CODM) continues to be the CEO. Beginning with the first quarter of fiscal 2026, our CODM began to manage our business, allocate resources, and evaluate performance based on changes that were made in the Company’s reporting and management structure. Accordingly, we realigned our reportable segments to those shown below.

Our operations consist of three operating and reportable segments as described below:

•

North America – Our North America segment has a depth of expertise in helping organizations solve problems that require changes in human behavior, including leadership, productivity, execution, trust, and sales performance. We have a variety of principle-based offerings that help build winning and profitable cultures. This segment includes our sales personnel and operations that serve the United States and Canada.

•

International – Our International segment includes the operations of our international direct offices and international licensees. Our international direct offices provide the same offerings and content in countries outside of North America, which includes Australia, Austria, China, France, Germany, Ireland, Japan, New Zealand, Switzerland, and the United Kingdom. The independently owned international licensees provide our offerings and services in countries where we do not have a directly-owned office. These licensee partners allow us to expand the reach of our services to large multinational organizations as well as smaller organizations in their countries.

•

Education Practice – Centered around the principles found in the Leader in Me, the Education practice is dedicated to helping educational institutions build a culture that will produce great results. We believe these results are manifested by increases in student performance, improved school culture, decreased disciplinary issues, and increased teacher engagement and parental involvement. This segment includes our domestic and international Education practice operations, which are focused on sales to educational institutions such as elementary schools, middle schools, high schools, and colleges and universities.

Our reportable segments reflect the structure of the Company’s internal organization and the financial information the CODM regularly reviews to assess Company performance and allocate resources. The CODM reviews the performance of each segment using internal reports which provide variance analysis of actual results by segment compared to budget, forecast, and the prior year. The primary measurement tool used in segment performance analysis is Adjusted EBITDA, which may not be calculated as similarly titled amounts disclosed by other companies. The prior period segment information has been recast to conform with the new reporting segment presentation described above.

Our operations are not capital intensive and we do not own any manufacturing facilities or equipment. Accordingly, we do not allocate assets to the reportable segments for analysis purposes. Interest expense and interest income are primarily generated at the corporate level and are not allocated. Income taxes are likewise calculated and paid on a corporate level (except for entities that operate in foreign jurisdictions) and are not allocated for analysis purposes.

Table of Contents

Other segment items in the following tables consist primarily of other normal operating expenses such as computer software subscription expense, advertising and promotion costs, travel and entertainment expenses, and necessary overhead costs such as legal and rent and utilities expense (in thousands).


Quarter Ended		North						Education			Segment
February 28, 2026		America			International			Division			Total
Net revenue	$		32,484	$		9,154	$		17,500	$		59,138
Cost of revenue			5,329			2,081			6,723			14,133
Associate costs			18,314			4,904			8,612			31,830
Other segment items			2,920			1,144			1,749			5,813
Segment Adjusted EBITDA	$		5,921	$		1,025	$		416			7,362

Other revenues												509
Less:
Unallocated corporate expenses(1)												3,769
Stock-based compensation												2,664
Restructuring costs												1,510
Building exit costs												455
Gain on license obligation restructure												(338	)
Depreciation												1,140
Amortization												670
Loss from operations												(1,999	)
Interest income												29
Interest expense												(92	)
Loss before income taxes										$		(2,062	)

Reconciliation of revenue:
Segment revenues	$		59,138
Other revenues(2)			509
Consolidated revenue	$		59,647


Quarter Ended		North						Education			Segment
February 28, 2025		America			International			Division			Total
Net revenue	$		34,520	$		9,031	$		15,065	$		58,616
Cost of revenue			5,546			1,972			5,734			13,252
Associate costs			20,499			4,896			8,092

FRANKLIN COVEY CO 10-Q