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Segment Information | 12 Months Ended
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Aug. 31, 2025
Segment Information [Abstract] |
Segment Information | 17. SEGMENT INF ORMATION Reportable Segments Our sales 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, International Direct Office, and International Licensee 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 2025, our CODM began to manage our business, allocate resources, and evaluate performance based on changes that were made in the Company’s management and reporting structure in connection with the restructuring activities discussed in Note 14, Restructuring. After these changes, the Company has identified four 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 Direct Offices – 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. International Licensees – Our 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. This segment’s revenue is primarily comprised of royalty revenues received from the licensees. Education Division – Centered around the principles found in The Leader in Me, the Education Division 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 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 divisions 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. 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. ‎
|  |  |  |  |  | International |  |  |  |  |  |  |  |  |
Fiscal Year Ended |  |  | North |  |  | Direct |  |  | International |  |  | Education |  |  | Segment
August 31, 2025 |  |  | America |  |  | Offices |  |  | Licensees |  |  | Division |  |  | Total
Net revenue |  | $ | 147,609 |  | $ | 29,344 |  | $ | 11,111 |  | $ | 74,618 |  | $ | 262,682
Cost of revenue |  |  | 25,008 |  |  | 7,738 |  |  | 1,422 |  |  | 26,883 |  |  | 61,051
Associate costs |  |  | 81,591 |  |  | 16,551 |  |  | 3,360 |  |  | 32,400 |  |  | 133,902
Other segment items |  |  | 13,612 |  |  | 5,457 |  |  | 870 |  |  | 7,151 |  |  | 27,090
Segment Adjusted EBITDA |  | $ | 27,398 |  | $ | (402) |  | $ | 5,459 |  | $ | 8,184 |  | $ | 40,639
Other revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,385
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unallocated corporate expenses(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16,267
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,805
Restructuring costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,723
Building exit costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,067
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,066
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,392
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,704
Interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 928
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (565)
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 6,067
Reconciliation of revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 262,682 |  |  |  |  |  |  |  |  |  |  |  |
Other revenues(2) |  |  | 4,385 |  |  |  |  |  |  |  |  |  |  |  |
Consolidated revenue |  | $ | 267,067 |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | International |  |  |  |  |  |  |  |  |
Fiscal Year Ended |  |  | North |  |  | Direct |  |  | International |  |  | Education |  |  | Segment
August 31, 2024 |  |  | America |  |  | Offices |  |  | Licensees |  |  | Division |  |  | Total
Net revenue |  | $ | 163,384 |  | $ | 33,327 |  | $ | 11,436 |  | $ | 74,210 |  | $ | 282,357
Cost of revenue |  |  | 26,964 |  |  | 7,812 |  |  | 1,350 |  |  | 26,681 |  |  | 62,807
Associate costs |  |  | 77,451 |  |  | 17,489 |  |  | 3,414 |  |  | 31,214 |  |  | 129,568
Other segment items |  |  | 12,328 |  |  | 4,668 |  |  | 938 |  |  | 6,504 |  |  | 24,438
Segment Adjusted EBITDA |  | $ | 46,641 |  | $ | 3,358 |  | $ | 5,734 |  | $ | 9,811 |  | $ | 65,544
Other revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,876
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unallocated corporate expenses(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15,147
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,142
Restructuring costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,008
Impaired asset |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 928
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,905
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,248
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 33,042
Interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,123
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,119)
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 33,046
Reconciliation of revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 282,357 |  |  |  |  |  |  |  |  |  |  |  |
Other revenues(2) |  |  | 4,876 |  |  |  |  |  |  |  |  |  |  |  |
Consolidated revenue |  | $ | 287,233 |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | International |  |  |  |  |  |  |  |  |
Fiscal Year Ended |  |  | North |  |  | Direct |  |  | International |  |  | Education |  |  | Segment
August 31, 2023 |  |  | America |  |  | Offices |  |  | Licensees |  |  | Division |  |  | Total
Net revenue |  | $ | 157,906 |  | $ | 35,359 |  | $ | 11,819 |  | $ | 70,318 |  | $ | 275,402
Cost of revenue |  |  | 28,302 |  |  | 8,472 |  |  | 1,214 |  |  | 25,574 |  |  | 63,562
Associate costs |  |  | 79,266 |  |  | 17,732 |  |  | 4,048 |  |  | 30,135 |  |  | 131,181
Other segment items |  |  | 10,886 |  |  | 4,697 |  |  | 616 |  |  | 6,962 |  |  | 23,161
Segment Adjusted EBITDA |  | $ | 39,452 |  | $ | 4,458 |  | $ | 5,941 |  | $ | 7,647 |  | $ | 57,498
Other revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,119
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unallocated corporate expenses(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 14,558
Stock-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 12,520
Restructuring costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 565
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,271
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,342
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 26,361
Interest income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,091
Interest expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,583)
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 25,869
Reconciliation of revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Segment revenues |  | $ | 275,402 |  |  |  |  |  |  |  |  |  |  |  |
Other revenues(2) |  |  | 5,119 |  |  |  |  |  |  |  |  |  |  |  |
Consolidated revenue |  | $ | 280,521 |  |  |  |  |  |  |  |  |  |  |  |
(1)Unallocated corporate expenses primarily consist of administrative overhead expenses. (2)Other revenues consist of shipping and handling revenue, leasing revenue, and royalty revenue from Franklin Planner Corp. Disaggregated Revenue Our revenues are derived primarily from the United States. However, we also operate directly-owned offices or contract with licensees to provide our services in various countries throughout the world. Our consolidated revenues were derived from the following countries/regions (in thousands):
YEAR ENDED |  |  |  |  |  |  |  |
AUGUST 31, |  | 2025 |  |  | 2024 |  |  | 2023
Americas | $ | 226,757 |  | $ | 242,494 |  | $ | 233,479
Asia Pacific |  | 23,074 |  |  | 26,845 |  |  | 28,640
Europe/Middle East/Africa |  | 17,236 |  |  | 17,894 |  |  | 18,402
| $ | 267,067 |  | $ | 287,233 |  | $ | 280,521
The following table presents our revenue disaggregated by our significant revenue generating activities. Sales of services and products include training and consulting services and related products such as training manuals. Subscription sales include revenues from our subscription services such as the All Access Pass and Leader in Me membership. Our Leader in Me membership offering is bifurcated into a portal membership obligation and a coaching delivery obligation. As these obligations are satisfied, the revenue is classified as subscriptions revenue in the following table. We receive royalty revenue from our international licensees and from other sources such as book publishing arrangements. Corporate royalties are amounts received from Franklin Planner Co. pursuant to a licensing arrangement. Leases and Other revenue is primarily comprised of lease revenues from sub-leases for space at our previous corporate headquarters campus and from shipping and handling revenues (in thousands).
Fiscal Year Ended |  | Services and |  |  |  |  |  |  |  |  | Leases and |  |  |
August 31, 2025 |  | Products |  |  | Subscriptions |  |  | Royalties |  |  | Other |  |  | Total
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 54,872 |  | $ | 91,173 |  | $ | 1,564 |  | $ | - |  | $ | 147,609
International direct offices |  | 19,476 |  |  | 9,672 |  |  | 196 |  |  | - |  |  | 29,344
International licensees |  | 302 |  |  | 1,205 |  |  | 9,604 |  |  | - |  |  | 11,111
|  | 74,650 |  |  | 102,050 |  |  | 11,364 |  |  | - |  |  | 188,064
Education Division |  | 24,697 |  |  | 45,854 |  |  | 4,067 |  |  | - |  |  | 74,618
Other revenues |  | - |  |  | - |  |  | 1,156 |  |  | 3,229 |  |  | 4,385
Consolidated | $ | 99,347 |  | $ | 147,904 |  | $ | 16,587 |  | $ | 3,229 |  | $ | 267,067
Fiscal Year Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
August 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 66,484 |  | $ | 95,240 |  | $ | 1,660 |  | $ | - |  | $ | 163,384
International direct offices |  | 23,289 |  |  | 9,830 |  |  | 208 |  |  | - |  |  | 33,327
International licensees |  | 411 |  |  | 1,245 |  |  | 9,780 |  |  | - |  |  | 11,436
|  | 90,184 |  |  | 106,315 |  |  | 11,648 |  |  | - |  |  | 208,147
Education Division |  | 28,349 |  |  | 41,605 |  |  | 4,256 |  |  | - |  |  | 74,210
Other revenues |  | - |  |  | - |  |  | 1,253 |  |  | 3,623 |  |  | 4,876
Consolidated | $ | 118,533 |  | $ | 147,920 |  | $ | 17,157 |  | $ | 3,623 |  | $ | 287,233
Fiscal Year Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
August 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 67,643 |  | $ | 88,864 |  | $ | 1,399 |  | $ | - |  | $ | 157,906
International direct offices |  | 26,058 |  |  | 9,128 |  |  | 173 |  |  | - |  |  | 35,359
International licensees |  | 426 |  |  | 1,327 |  |  | 10,066 |  |  | - |  |  | 11,819
|  | 94,127 |  |  | 99,319 |  |  | 11,638 |  |  | - |  |  | 205,084
Education Division |  | 26,804 |  |  | 39,662 |  |  | 3,852 |  |  | - |  |  | 70,318
Other revenues |  | - |  |  | - |  |  | 1,250 |  |  | 3,869 |  |  | 5,119
Consolidated | $ | 120,931 |  | $ | 138,981 |  | $ | 16,740 |  | $ | 3,869 |  | $ | 280,521
Inter-segment sales were immaterial for the periods presented and were eliminated in consolidation. Other Geographic Information At August 31, 2025, we had wholly-owned direct offices that serve clients in Australia, New Zealand, China, Japan, the United Kingdom, Ireland, France, Germany, Switzerland, and Austria. Our long-lived assets, excluding intangible assets and goodwill, were held in the following locations for the periods indicated (in thousands):
AUGUST 31, |  | 2025 |  |  | 2024
United States/Canada | $ | 45,682 |  | $ | 28,552
China |  | 1,064 |  |  | 1,860
Japan |  | 390 |  |  | 831
United Kingdom |  | 496 |  |  | 712
Australia |  | 30 |  |  | 230
Germany, Switzerland, and Austria |  | 2 |  |  | 115
| $ | 47,664 |  | $ | 32,300

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- Definition The entire disclosure for reporting segments including data and tables. 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