XML 37 R24.htm IDEA: XBRL DOCUMENT v3.25.3
Segment Information
 12 Months Ended
Aug. 31, 2025
Segment Information [Abstract]  
Segment Information 17. SEGMENT INFORMATION

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