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Why Franklin Covey Stock Was Climbing Today

By Jeremy Bowman – Jan 7, 2022 at 4:14PM

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Shares of the consulting firm jumped on a strong earnings report.

What happened

Shares of Franklin Covey (FC 6.15%) were climbing after the consulting firm posted better-than-expected results in its first-quarter earnings call.

The stock was up 10.85% at the closing bell.

A woman looking at a computer.

Image source: Getty Images.

So what

Sales jumped 27% in the first quarter to $61.3 million, which trounced expectations at $55.4 million. The company benefited from sales of its subscription service, All Access Pass, which were up 27%, with revenue from its education division up 56% thanks to strength in its Leader in Me coaching subscription.

Profitability also improved, with gross margin up 240 basis points to 77.7%, and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 167% to $9.9 million. On the bottom line, the company posted a per-share profit of $0.27, up from a per-share loss of $0.06 in the quarter a year ago. That also crushed the analyst consensus at $0.03.

CEO Paul Walker said, "We are very pleased with our very strong first-quarter results," adding, "The ongoing strength of our subscription business was reflected in every income category, including sales, deferred sales (billed and unbilled), gross profit, adjusted EBITDA , and net income."

Now what

Looking ahead, investors were also happy with the company's guidance, as it forecast full-year adjusted EBITDA of $34 million to $36 million, representing 25% growth from a year ago. Given the momentum coming out of the first quarter, that guidance could prove to be conservative.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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