FC - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2024 Franklin Covey Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Derek Hatch, Corporate Controller.

Derek Hatch

Hello, everyone, and thanks so much for joining us. the talk have you to glad opportunity with to today. We're Colosimo, are our our our Jennifer Education Enterprise Division. call of on Covey, Paul and Chief of Sean Division; this Officer; Young, Participating our Steve afternoon Walker, President our Officer; Chief Financial President Executive

that of meaning Before Private of started, everybody Securities like XXXX. forward-looking contains Litigation to would get presentation statements Act the we remind Reform I this within the

risks the performance Paul revenue; influence, current client-facing management's new sales various be the of changes other or company's acceptance from the the filed company's uncertainties, Forward-looking update of rates share; the time market control and forward-looking current in of materially of general Commission. Many including most the like are based obligation marketing expectations. date to the are conditions Access and based law. With competition of and we assurance recent there products; spending over market strategies; future expectations, company offerings, except annual not one periodic revise and turn factors statements to: Officer. required including, Mr. of discussed beyond hire results and changes the subscription upon XX-K presentation, meet and company's in after the future events expectations conditions; Securities limited our by Pass ability to are identified and can of professionals; on the way, may to targeted market that Leader statements but current the management's and subject and cause training in company the our Chief in policies other the these renewal with in and Me the Exchange the These marketplace; ability in Walker, company's differ and for and report the reports actual on the the Executive Form productive economic size All or and offerings our of to as the of these or grow no acceptance company's the company's expectations, to services clients; overall or circumstances out of we'd changes to will are reflect other forward-looking today's statements company's management's no which undertake to to of any memberships;

Paul Walker

you all free the importantly where Thank results you, Welcome, growth stronger today. great strengthened. were our our Derek. quarter to with key cash expected, pleased third flow than and everyone. indicators and leading EBITDA, adjusted for It's with of where be We're revenue, several

the I'd versus shown $XX.X like million Education third the versus Slide cash and million $XX.X million, point in Enterprise the came million quarter at million. was and $XX.X X, in of both expected And This million $XX between flow broad-based $XX EBITDA at to quarter through free range was million of across strength divisions. through third year. last the the on as $XX.X $XX.X we'd out, versus Adjusted came expected. revenue Specifically,

of addressing business. of outlook Franklin key for quarter and X our future, quarter's and quarters. In for Covey's value the particularly rate to our as Additionally, continue will which coming accelerated million, like drivers I'd our the billed for in to recognized Each increase flow the our X% accelerate third booking performance growth the drivers our unbilled the be and is will by the revenue growth in were revenue which $XXX.X evident as these and increased in balance foundation coming future to to address the in that which services established performance. increased by quarters, being deferred through of well

and to retention of ever for XXth we opportunities reflected help off Education is value number environment, the challenging All see pacing quarter, Franklin which retained And for points the percentage reducing schools and Enterprise our resilient. In in as uncertain of costs." additional continued address ever ahead the detail the driver reflects capital division new well in and of holding first retention, "Businesses a of highest couple highest the Slide the them, the on on of business. recent addressing the of any a continues are of Pass can and highly revenue you last percentages June the in solutions Despite both of schools these. third broadly a growth organizations third quarter. third strength our first, This strength be year the an article recognized and are expenditures Access organizations and that, in addressing schools things: in our we're resiliency describe and one the strength we importance resiliency logo X of just efficacy our challenges highest in the through about North X, revenue Covey's of Bloomberg to and and say challenges reported like continued address; and business quarter. mission-critical more we'll opportunities and strong is retention and shown America, second, A and moment, absolute achieved our As nature our in division, of solutions them. I'd each helping and in

help as clients. mission-critical. nice we're truly doing importance just to have. types not we achieve our of organizations and to are to First, what They're of opportunities the help The challenges

who the and outcomes building their at nice most of people. collective the achieving outcomes large-scale For of the can almost throughout an building levels business execution, Achieving behaviors highest organization. just is mission-critical. power organizations, extraordinary such cultures, have, extraordinary and strategic people impactful winning customer scale need is each earning the collective achieving for actions always action not these or it's of unleash leaders requires of loyalty, Underpinning to

challenges, tools, the coaching with right partners opportunities Covey's measurement, combine Second, available to across all with leverage power is these Covey's of any delivery earn our Covey Franklin which of best-in-class strength tremendous solutions to successfully solutions helps of and as be Franklin our the organizations and helping modality. The and content, clients. in life Franklin address for efficacy and solutions high

months; like second quarter. strength future key briefly amount the leading contracted our and of the booked revenue, amount be in will I'd was key strong beyond Each about third strong growth these quarter. recognized third future talk next in also in reflects of of over deferred quarter revenue which revenue, The directly for in our the is contracts, growth in of which the growth months; which represents of indicators growth invoiced dollar of growth, future in indicators that in growth driver strong deferred amount leading foundation and to a the the in XX indicators X of services future the unbilled include: growth even volume the the XX multiyear our establishes were of lead growth increases delivery. our of for which

see reflecting can to and in you in shown XX% the growth X, revenue $XX.X revenue in amounts quarter. As our Slide in contracted quarter, balance million deferred of increased invoiced the

of XX reflecting flows increase balance multiyear to dollar deferred an into $XX.X volume which to quarter, during the third the revenue million Our typically X% the ensuing of in over months. contracts, unbilled XX increased revenue

continued expected, pace third services Additionally, our through that month in we as quarter, I and June. booking meaningfully, would the also accelerated pace the the add of has accelerated

value business and driver the of our is third growth strength model. The of

of the collected is and invoiced increases flow. to revenue result gross is revenue working levels a in since SG&A EBITDA that recurring model margins, increases scale, factors required free with achieve in operating high business percent these of before little and designed revenue adjusted high is flowthrough with revenue with Our capital billed a both as of the and The with to combination revenue recognized. of strong cash declines very in

million, revenue of XX%. The XXXX, adjusted our to business and return, the we've X million, and able For million. compares to May rapid of during been like the grown pattern ended XXX%. repurchases. rates EBITDA quarter, be the on flowthrough the our I'd shareholders final XXXX, high the this time flow to excess to drivers and the the $XX.X grew investments at and assets EBITDA or latest net of form this where with revenue latest EBITDA continued revenue months X%, remarkably fiscal in or was in strong million. adjusted to of In through EBITDA talk $XXX EBITDA This returned for adjusted example, invest million is cash that grew and grew high. period, $X from million, significant an tangible free of growth revenue these $X.X XX-month fiscal third adjusted had XX revenue year's This third at through period adjusted that With being where was of today more quarter, even in business $XXX.X in period return cash year's with during stock $XX.X about to that continued XX% balance

As shown X purchases million on invested million third returning million $XX.X to we've shares, of $X.X in year-to-date, through XXX,XXX And shares years. returned including repurchase to the shareholders shares quarter. through X, we've purchasing Slide $XX.X the over last XXX,XXX

million authorization stock capital to through a approved opportunistically continue position to also Board Our return to shareholders put stock the repurchases. new continued repurchase $XX to in ourselves

to future in QX outlook to encouraged Steve pleased Additionally, we Speed look to now answering even And Steve we pleased and I'd growth. I'm accelerated Project specific to to and become Steve? like detail these we're to in X with terms projects progress to quarter, line Project projects more results share make and growth open in continue Ramp, forward turn Project we're discuss we're questions. the about significant the important doing each growth your making. driving what Penetrate, about of guidance. we'll described details of what our progress last to After our clients. I concludes, the see Impact. for I'm and time our with

Stephen D. Young

and on areas on I like Education overall a the and the our focusing North our Paul. underlying the Enterprise business you, America, in on provide briefly results internationally, business. more in company of key our factors our Enterprise X division result detail Thank would the then little specifically performance, company, to

the $XX.X As higher million prior XX the or year's higher latest quarter quarter. the $XXX.X year. in third in And Year-to-date than prior shown months, $XXX.X generated last million in to year. $XX.X revenue on $XXX.X revenue the third slightly compared $XXX.X Slide the million, was revenue for X% million, X, was million the was million, than

quarter EBITDA adjusted And million Third to year. million, months, $XX.X compared was adjusted Year-to-date for compared to last compared million, EBITDA $XX.X achieved $XX.X last XX the million, million million $XX.X was latest EBITDA year. $XX.X was adjusted last $XX.X year. to

in results in total year. Enterprise prior flat the which subscription of million our revenue latest third was Slide the million division services X%, America $XX.X and year, which quarter, America, is in third which the were is and the 'XX. Subscription recorded year-to-date, million to X%. up in Year-to-date subscription As which million FY This months, third North in flat $XXX.X million with combination in in after also million, in America revenue the XX Revenue was up growth. about X%, the $XX.X Enterprise is business revenue, months, representing quarter. million million which revenues versus on X%. XX% of in was revenue The same strong reflecting $XXX.X of year-to-date, North quarter, shown in continued was revenue was essentially be period over for X, latest months North also latest accounts with quarter, $XX.X and X% XX large growth is increases last 'XX the recorded XX the America FY $XX up in North which $XX.X up X% $XX is in the and

last a for North multiyear Our $XXX.X of the achieved in growth. unbilled million year's for North revenue XX% And third from the year's the by America's last to third Passes revenue, as percent and next year. the from All to continued X%, in contracted quarter, deferred of multiyear to America, be XX% balance increased foundation quarter, growing talked contracts on in XX% Paul represented quarter about, growth of invoiced quarter to top third Access percentage in which increased the establishing, strong, XX% is in the up in XX% year. periods billed And strong last

Year-to-date to geopolitical every offices operation revenues the prior other over revenue direct was down X%. months year. which for down to approximately international attributable As revenue accounts third million quarter, was in total million, was latest XXX% down X%, Slide than division as This issues China, is revenue, and XX is shown which related $XX.X decrease of international which on from more XX, grew our the these was the XX% Enterprise from million, the operations, revenue X%. $XX.X direct $X.X

As flat decrease also revenue shown $XX.X and X%, months X%, partner with million on down a of $X.X is latest which prior the Slide XX the in XX, third of to our was revenue million, year-to-date $X.X the of international licensee million, revenue year. quarter,

$XX.X on latest shown million, of in X%, of million period third last up business, X%, for XX%, for was revenue up $XX.X the of XX billed achieved achieved were third last growth year. Education last XX% XX% from up the was the in in in services months growth $XX.X million, XX $XX up total is of XX% XX% previous the Slide grew third the our $XX.X on top million. deferred subscription revenue revenue, latest same and grew XX% in quarter, million, grew year's and as to amounts top which achieved in to of unbilled, Year-to-date which third to up quarter quarter. Year-to-date quarter, growth on of months Education invoiced the million, ago. the year quarter. Finally, XX% increased achieved company up subscription quarter, $XX.X in top grew revenue, subscription growth latest a year-to-date to through XX%, top the Education accounts latest $XX.X X%, grew third amounts million, Year-to-date growth months grew or the balance in on to grew the for growth Education revenue of XX% XX $XX.X third quarter, on Education's and the million, million third of XX% for and approximately year. $XX.X last in the XX, year. X%, XX-month top revenue revenue to on $XX.X million year's to up and revenue XX%

and sheet. Now, cash a balance about little bit flows

$XX.X activities million for an May shown for of ended XX, the increase XX, our prior million, million, $XX.X year. compared X months from on was or flows XX%, operating $XX.X Slide As cash the XXXX, to

X free reflecting the prior capital changes the year, of payable, the for XX%, Our or cash were accounts this the through of very to compared accrued the to million, favorable flow first and prior compared increased reflecting million elements in deferred in $XX $XX.X million, quarters for receivable, year, changes QX accounts with $XX.X liabilities, working year, the particularly revenue.

in million in was prior also quarter, $X.X million, to compared For working quarter. free year, the flow third reflecting cash the $XX.X changes capital this

$XX.X quarter invested mentioned, X Paul for XX% increased quarters $XX.X revenue to of revenue QX stock first We total billed deferred visibility us including $XXX.X revolving and of $XX.X the the FY FY XX% As X of XXX,XXX to unbilled shares. nearly X% the of over increased deferred ended cash increased million revenue $XXX deferred investing even to shares, the with into we 'XX, to year-to-date. to the million million growth the unbilled facility, as purchase subscription credit repurchases after we representing $XX.X liquidity, in in revenue over million million XXX,XXX Compared past the increased quarters, giving available we invested purchase The prior $XX.X the in $XX.X million, $XX.X million. under said, quarter, million results. was 'XX, sum subscription year. and while future million, to million, third $XX.X the Adjusted EBITDA and

we we approximately be approximately In currency, revenue also Now quarter call, our at expected the to communicated to with expected be expected million a for we expected of QX constant year, at in between absorbing of quarter the we $XX.X little large and FX launch the about earnings after our currency, time $XXX we to low that division to communicated range that earnings full constant in approximately adjusted QX be still second to within of revenue related revenue our revenue the earlier-than-anticipated original call, to EBITDA guidance. quarter million $XXX,XXX $XX year in be to of Education full year million, and contract. In excluding second good a be unfavorable of the bit expect to year-over-year are and $XX.X the year forward million We to represent and make full $XX.X that million, approximately would reflecting third be today quarter primarily currency trends approximately of of result and reaffirming approximately modest expect lead in revenue QX With for $XX growth, guidance. million end range, a $XXX We about quarter year. indicators building fourth the we constant FY we negative impact. million revenue and these be would XX% feel momentum into a revenue $XX approximately fourth beyond. from FX This that $XXX,XXX million. and statewide see 'XX shift continuation what

you. to back Paul, So,

Paul Walker

to incredibly for strategic just growth express important the we're world operational also Steve, work your great momentum that, they're to feel to making taking of us of now gratitude progress here line my open for the our and and of renewing each Thanks, the in number the the questions. ask I fronts, doing. And the operator you we'd the business each a to to about associates like through with and around want that. good on and for

Operator

first Paris Our with comes from Instructions] Research. Alex Barrington question [Operator

Alexander Paris

on results. Congratulations better-than-expected the third quarter

So, I of got a couple questions.

first I up and a couple Education Division, to one then to of on. cats and relates follow The dogs the have

So, time of Education, season, I year for feel the your good comment. this about the is Education this division, the and big is prepared

pacing schools got but pretty tough comp. well, New and retained you a

year, or for you I How hurdle year, the full about new was year record think a that retention. also strong last schools, do last XXXX? XXX fiscal the fourth quarter on feel

Paul Walker

just hear who say, in to say, the Sean fourth going here Bowl I'll Yes. has from Super start the the in man to Alex, I let's Covey. was quarter,

Michael Covey

Yes.

year, so had always good we going substantially. retention. to it's again and record ahead We're of had far feel that a Last XXX. year, we've at And point. last and new beat We like good we we're year had retention, this about this we feel and on ahead solid it. So, we believe good schools

We since I've I've best been here. also have ever seen pipeline probably the

got decisions of looking are renew in K-XX made we've coming the talking all So, big the a for lot in opportunities of year. Schools us August budgets districts with in. Most July. lot are and July a of decisions the are of made. and because Most

of lot it. So, a made, but are good feel we about the really decisions

been on than They're Our ever. stickier. going better to focus districts. has That's They're bigger. selling

XXX about year. year last coming over had You we'll get this once. of district to top more our at all And so schools XXX XXX of coming are add we or new partnerships think We new half on the schools from on districts.

all are signs really So, good. the

don't date, You to new but right now grants community happens, it to in that's know until the pipeline, for also environment of of is winning, schools terms leading foundation support, the funding all really because that we're been so positive retention really support, date, us indicators, good.

fourth is leaning solid a have everything quarter. favor So, growth and to our into positive really

Alexander Paris

I follow on was the going Great. to too ESSER up funds.

contracted the and about through got understand have that some funds. foundation do on 'XX, I funds does on think big it. as What that, September that will fiscal ESSER your in you've what's What I that's January, perspective think 'XX, ESSER are business? you your just can to all know forward? thoughts September, fiscal the I but be have know we going on some impact that maybe going ending to offset of impact prior spent although business

Michael Covey

Yes.

funds feel not we we're that us. going anymore most districts and funds impact. for use have How is coming right a it. don't and all, been with they've these is year some lot considered, things already they're ESSER them going the but good facing and they general, thing all used because because think on, up sure, much, to we've schools early renewal, in encouraging about through they're ESSER we renewing staying all Maybe ESSER their of quite So, ESSER have

the like our growing halfway you it so, year. through though through And of we're up now. officially It's and calendar and right we're right it, through it's fiscal like halfway already, ends it like we're even said, the at through, year it through end

much through we funded right not other expecting schools multimillions we have and big hundreds I'm won't and use the the to Title them got through is grow we've but it this time, grants, all impact, primarily of we're it, foundation. I that be dollars ignoring because will So, foundation, of funding. and have some which so

of lot a other initiatives, have helpful. We that's really community and

Alexander Paris

foundation, XXX schools in fund That XXX multimillion time in big they're total or said to you Obviously, this over year? dollars. schools going

Michael Covey

they said give I much And schools. hundreds per so of student.

district, partner have we So, an they've if come in come accelerates. funding accelerator, got on they it's on too. game People we you got faster, It get and they knowing say, a which good hey, skin we've bigger, can is the because to like help that go some a going. support, but have to

doesn't hey, foundation tremendously. So, them about out It get the that covers usually the makes here their cover helps everything. off started, me, is of me this ground. there's in It going but X/X feel believes somebody help to costs, it and support like, get

some So, really the about by business, KIND been had beginning, we've chamber schools since community XX% positive foundation that's of commerce, supported our been OF XX% probably initiative. of a to have thing. And

So, is development solution of kids. it that likeminded support powerful, in character and attracts are really our entities that, to wanting because

thing, Does bump that from a us the that's impact. COVID ESSER help? through So, get a steady we COVID or think it'll the tremendously and help been

Alexander Paris

costs. one restructuring Yes, on quick absolutely. A

talked it on You about the quarter. third

you done CPs forecast. million said, It there than like Actually, or fourth $X at had forecast. be looks a less in You think, restructuring, a quarter? came Are year-to-date. with will down we're further charge as number little the I we of you the

XX You came said come like right. XX would have out, looked that I It if more maybe out.

Stephen D. Young

in charges QX impact and the reported any QX additional and the in So, same don't that we were from QX. we anticipate initiative, restructuring Alex,

Alexander Paris

this revenue down up point should or then deferred for I'm investors to subscription total, whole I $XX deferred the has was services when include understand the from that's me Obviously, it, In X% Deferred X.X% $XX to that's is Unbilled This scroll Help and days, it not I this. why you, down applies your me. also how been nagging for up last understand doesn't revenue balance number, and explain million, Steve. to so asking. but so. do Okay, up perhaps was you to million is training question, million. is just probably that? a and XX%. $XXX.X XX% subscription, sheet, but or

Stephen D. Young

Does versus The year-end sense, Alex? prior about... So, make year. we're the balance sheet talking is that QX versus

Alexander Paris

Yes, it's not year-over-year, just it's yes. year-to-date,

Stephen D. Young

we're Yes, different versus calculation. periods comparing in the X other calculation

Alexander Paris

So, at if 'XX QX looked versus 'XX... I QX

Stephen D. Young

the Then number make sense. should

Alexander Paris

helpful. Okay. a much, thank any sure look a if Good, and I'll again, have questions, and But and further take I I congrats understand, it make the very at on quarter. I'll do follow-up. on it you

Stephen D. Young

asking that, Thanks those because so the in minds. they're those clarify it's that good things for are Alex, people's are confusing, when to

Operator

Northland Our with next Capital from Chokshi comes question Markets. Nehal

Nehal Chokshi

list correct? multiyear you that Is presume revenue growth of of the better more indicator flattening adoption of year-to-year I growth deferred than that's of deferred the revenue that a X%, is representative your deferred agreements. a of So short-term growth billings revenue and unbilled because XX%. much unbilled, probably

Stephen D. Young

its a it X multiyear Yes. more The very a billing annual exactly the and billed comes agreements, so and deferred normally you from right. is deferred, the nature of of deferred lumpy unbilled are time, the X-year contracts, than or by contract, the many think is is yes, year at the described those I multiyear and period-to-period way and quarter-to-quarter

Nehal Chokshi

the about that an represents undoubtedly metric is signal on you revenue. primary of that And X Is from the accelerating prior correct? growth guys the very quarters, subscription acceleration good that reason and Okay. feel why

Stephen D. Young

Yes.

billed, we that you the that portion when revenue. recorded invoice, deferred, of going to the unbilled the to come going as as soon know and to just that's in said, that's pattern as we know be we So

Nehal Chokshi

what fiscal solid pretty are free XQ? think, flow on fiscal And cash great. a for flow what was, free Okay, for cash number quarter, I especially fourth given thoughts your

Stephen D. Young

that number, don't end for adjusted expect flow actually cash with we to do the Well, free what We we fourth very have have the cash but the up to but a a good exactly on a we a given EBITDA. expect year. of good haven't guidance year in percentage just quarter, guidance good is, flow flow cash

Nehal Chokshi

conversion flow. So, That not XQ, year-to-date, cash above to EBITDA you're at fiscal trending into XXX% continue should basically? free

Stephen D. Young

is notice, But up XXX% so would from well, Yes, sometimes down as and normal looking been looking around normally over that EBITDA, like very what just a time Nehal, than expect I think -- at XXX% in it's quarter-to-quarter, percentage XX% stretch of we that circumstances. you'll higher percentage sometimes like fairly adjusted volatile is also XX% We've had a gone we for overall we've abnormally X several an of for so for quarters, and this XX%, it prepayments capital's year to comparison like adjusted favor EBITDA, Working to as in look far EBITDA. adjusted high being on our be good reasons. the with year some contracts.

probably flow. yes, like all real. a number more XXX% will It's free looking XX% So, the to be year just is XX% of cash that, as to year, again, overall, adjusted EBITDA of a balance

Operator

Storms from next Dave with Stonegate. Our question comes

David Joseph Storms

maybe are hoping of and how lot and us and could also you sense Just any a what the sense of talk that and want of new like. trending Maybe logos, there's lead-in trending. I'm in closing looks how a times a then cycle we if indicators, on focus about renewals start, sales times between could give to are closing

Paul Walker

question. Sure. Yes, great

would closing right? I What motions, cadence get X takes that, it speaking, a generally there's cycle funnel And prospecting say our very and progression are different So, new go That that fast us. that. first-time of to to somebody sometimes interest usually first and contract number can sometimes, a months, takes as deal month, take to a there from, into anywhere the with for for opportunity closed. a on get to through that average, that from it's as

using sign contract. That expecting in pipeline X the later renewal the the who clients side, can successfully these they On we're We pipeline. that our contract, have fortunately, and that's that the going that in renewal to convert been solutions. see the are from renewal's year moment

the would speaking, those the answer seeing right be most think quarters. now in than seen question that is helpful we've last we're elongation think, to either I that, I generally few that of real so, And in your not any more

bit little probably better better say, In us I if bit here. to year getting there, think a materially any environment. as more we fact, not worse I out Certainly of the of come for anything, maybe at. way, little the getting just end would you're that's maybe question a in the And it's the

David Joseph Storms

to Nice the pent-up leading then you've that for year-over-year. charge? value? the that American sense growth of, may some the what's and North be fruition the Enterprise drivers demand looking of driving the And that's stuff that any of of laid at feeling coming division. out else of Is if Any at just there growth or outside top, market anything

Paul Walker

Yes. a Again, to comments And and good strong talked retention. had point the the this quite third things, to reference well. X last these we my in we've One, as in few calls question. made I earlier. quarter, about I'd

of was number actual quite the business, going business, of indicators the subscription of of quarter is subscription years. third our quarter one the logos strong. durability revenue. And among retention of quarters the both of the back the but clients the the so, And a It a of third over was very themselves, also highwater for

strong in in QX, by encouraged pattern were a That's was was strengthening. that. we've in QX. strong It seen we so, And It QX. strong also

accustomed strong where to quite time been QX strongest strengthening it been So, some up quite weren't quarter the quarter recent time. coming been year, quarter as those a where out to, historically QX, most had as it's retention last percentages by period was of in third this it we'd

indicator So, leading we that that's saw. one

our be would services. other The

and quarter. quite both services. the that the We meaningfully new that those both services, June. in rate the bit quarter month mentioned are about services future, did a delivered and booking of they to in the we strengthen of talked services the the of and we strengthen to expected booking in third last will So, fact, attach through continuing delivered services be And, the they

contributed things X third in improving those the accelerating quarter. and to combined So, results growth

David Joseph Storms

And going over you should to given then more, I about weakness if has just maybe any one finger international fits outlook what I Thinking Any Chinese a the I Steve, market. expect last the entirely on that was you there there wind quarters. starts markets, we the mentioned the in the market know Chinese know, could. forward? several due and

Paul Walker

better growth bit work. little doing face think And China. there's a there for hoping we're China. we And in forward, going some I what's as great in headwinds our far team's As

of want you know spent on on. China? something that's a do comment just give Jenn, fact, lot quick In you to a time I

Jennifer Colosimo

course. of Yes,

well. But us that own they So, company, place. then, training teams. has for And even just hard there course, working challenges and frankly, seeing, we an are space, citizens. They're education hoping, are organization Chinese in taking all who being are China frankly, geopolitical is currently their economic Chinese citizen and a challenge. of our They as American particular space, challenges our in a doing really or are

that So, wouldn't Dave, whether improves. guess, a as to not I venture or

Operator

Our ROTH next from comes question Jeff Martin Partners. Capital with

Jeff Martin

seeing I was on. had this content we're And going an and give associated I curious you activity if year. refresh lot know content that. us update some uplift you new revenue on could a of with

Paul Walker

Yes, great.

capability We're Speed in from a with fulsome for years us. This first Speed that's if getting of but traction. and updated Habits refreshed since our journey journeys things to offerings. what of time, we the the the post-Impact a So, and communication will. seeing working around Difficult us. just that about to there's a away and we to contributor the and strengthen for and what cycle AI adoption companion this ready IMPACT sounds been the big next capability well support more also category of this AI ago, extending is just a we this X.X help technology module support big well. earlier associates with infused is learners always been, the the there, drives that that, Habits. The Working now us, broader more trust performance-enhancing round to platform Conversations. gosh, X-ish that, coming leaders, we're step you at edition the more of have quite trust a down content offerings out We're into Habits. of to companion as which this Trust in and for category new pleased as and Trust that excited or will coach, offering continues year That's and year. launch We difficult of also our coaching Speed that very how now of It's be that's X in That's conversations. to built It's of substantial on top would of a clients seeing we're valuable a X months fall. launched, and at a That's the us. that going on powerful Navigating what addition Then, right Trust, fall get refresh, for into middle That's the have companies. list Impact particularly so more with they're this also X our at to platform clients, individual last launched gaining the intend to X a first like to the lot things navigate of we're offering. We in We're to like, side. The including see Then, it right pleased from do of few as few the a addressing participating course, now now.

Jeff Martin

[Technical Difficulty]. Difficulty] this year [Technical all

Paul Walker

think lost that for you question minute. start I a Jeff, you Will there over? I

Jeff Martin

Yes, expect It's of as prominent seeing windy uplift of year. a if backup fiscal if to or relaunches, just the launches any result more I curious a am. you're and impact little I 'XX that was have you in those next sorry. where

Paul Walker

to answer short The yes. Yes. part the is, first

the product, next powerful are in growth into happen new these expanding product an middle Pass happen offering. of either with can that's helping journey participants an us. are imagine, the and question, yes, it net real, are that and I drive part journey way Impact it's the solutions. And part way as drive that clients increase overall this helping of to clients even is more needs increase another their then, of Impact All think you usually its next When revenue services fiscal product in Many into an what take your to the retention will on year. its certainly I or inside Access of subscription work will to works new think already Impact we the in what's journey going launch to go a what's advantage the second

a bit typically up new the really And to can to to months a so, of take see XX there's start of X lag. It full product launch. before a we impact

around new what up solution, of to in our client our like a then things and strategists start partners As and and go usage for then plot aware implementation clients the look really the lagging out in become that to retention, like will have chance to that. the and plan show revenue results have a chance

So, real early we've of couple in indicator 'XX. is for the will positive, and solutions a I launched felt think fiscal year action this these be

Jeff Martin

the referred you've then throughout the consistently And okay. challenging economic year pretty Yes, environment. about

new conversations shift Just terms these spend a of curious on sentiment in or your programs renewal to on their still clients any more they're either you're basis basis among mode. if noticing cautious in either or logo in whether propensity

Paul Walker

say is So, bit that. the neutral little a would how I I positive. maybe that sentiment, if would It's characterize sentiment worse anything, to is more not

bit maybe out to a understand working the a are, if more, and even say hopeful understand I are knows. doing they even neutral with think our right bit I'd but partners continues. people have increases and maybe salespeople sentiment and what are, great anything, little clients they it's now, where they job there what we budgets a now better. But who And that their little that client

Jeff Martin

but is investment -- and in beyond. fiscal you new growth apologize sales question, this And for if a since Okay. in client 'XX client I from partners, may then partners redundant

Paul Walker

Yes, great question.

and bit we on little quarter. actually this Alex in new net added up partners the back So, too, client a X picked

the So, it we've quarter, then went up last gone end back by by of at down XX and X.

projects a X around of very of not accelerating addressable, the I addressed solutions Ramp out to we're drive Project laid growth of getting best then and Penetrate, our but Impact, by detail quarter, Project there. QX. Last product continue sure So, this projects. is to set the at making quite important content fully and road I at think and vision, about map that's XXX which XX-year and market end which to we us, at Speed bit large yet out field in are

now right sales we And our do enhance so, in a of done org how being go-to-market lot on our work's accelerate, motion.

in out people had. between here to 'XX, partners, the love look course, the the fiscal new and we there, Gartner. at similar exactly year be opportunity than more we'll ever we sizes. ways, Gartner out, implementation that but And good our our companies what certainly, We, so, of all look able wait coaches. and a like we that say, we're off in say, of to to look with 'XX. And largest strategists, field-facing of our XXX and at would we've client just kick we client inside a senior addressable in fiscal at of are looks we like update and a lot right Gartner force as It's companies leaders very companies audiences, selling minute, the today give like. And we're backward modeling I around be a middle now partner in hiring going of

a are their people and organizations selling have these organization. our solutions. Gartner's to we're the access offering, got really in We need powerful and subscription to sales important, we add X,XXX client solutions services that,

that's done to And headroom more fiscal this quite map to look we so, kick I'm right aggressive that now to forward really talking in and have and in excited than the about And get in about off grow way even more being to we an that out the 'XX. the get work ready past. as

Operator

would call to Walker remarks. I Paul to now the for back any turn closing like over

Paul Walker

for follow great company and a company, thanks, joining of Well, you hope all rest Wonderful. for wonderful you. have It your questions. rest was great and We thanks, And your that to do you Josh. And the week. the today. appreciate your day and with of understand everybody, be to

Operator

Thank you. This your you the for concludes participation. conference. Thank

may now disconnect. You

Franklin Covey (FC) 26 Jun 242024 Q3 Earnings call transcript