Jessica Betjemann
CFO at Franklin Covey
Adjusted EBITDA was $7,300,000 and $6,800,000 in constant currency, exceeding the top end of our quarterly guidance range of 4,000,000 to $6,500,000 in constant currency, as the lower revenue and gross margin for the quarter was more than offset by the cost reduction efforts I previously described. Adjusted EBITDA decreased compared to the prior year's quarter of $13,900,000 due to the planned increase in growth investments we are making this year and the lower revenue. Importantly, though, the foundation for increased future growth is evidenced by the 7% increase in our balance of deferred subscription revenue from $83,800,000 in Q3 last year to $89,300,000 this quarter. Year to date cash flows from operating activities remained stable at $19,000,000 but lower compared to $38,400,000 last year, primarily due to $12,800,000 lower net income driven by lower revenue, restructuring costs, and planned higher spending levels to fuel the Enterprise North America Transformation efforts, and also an $8,300,000 decrease in income tax payable as we no longer benefit from the utilization of our net operating loss position compared to last year. This resulted in year to date free cash flow through the third quarter of $10,600,000 compared to $30,600,000 generated through the first three quarters of fiscal year twenty twenty four.
