Franklin Covey Co. (FC) Earnings Call Transcript & Summary

I'll share a few thoughts this morning and -- about our strategy, things that make -- that we believe make us unique from others that are competing in our space, what's driven our growth to this point, what we think the future ahead looks like. And then various members of the executive team will go into a bit more depth, representing their respective areas. So when I'm done, we'll hear from Will Houghteling. Will, will talk about content and technology. We'll hear from Jen Colosimo after a break. Jen will talk quite extensively about the Enterprise Division, which has been so important to our growth. Following a break, Sean Covey will talk to us about our Education Division, our Leader in Me solution. Following Sean will hear from Steve Young, CFO, and he'll talk a little bit about it. So how do we think this is all translating into increased shareholder value? What are our thoughts there? Some ask us what do we intend to do with the cash that we're throwing off, and we'll throw off in the future. So Steve will be ready to talk about it. Then we'll have lunch. And following lunch, [ Andy Sindrich ], as we mentioned last night, will take us through an abbreviated experience of what our clients go through, and it will be around our new Change offering. And then we'll be privileged to hear from Bob, share a few comments towards the end of the day, and then we have some time for Q&A. We have attempted -- we are attempting to create some time also after each section for some Q&A. So if you have thoughts or questions, we'd love to take them throughout the day or you can save them until the end of the day. If that sounds okay -- if you join our quarterly calls, you get to always start by hearing the melodious voice of Derek Hatch, who reads us through the forward-looking statements. So we're not going to do that today. We'll just remind you that if we were, Derek would read through this and talk to you about that. So what I'd like to start by doing is just maybe a quick introduction about me as you're all looking at that slide there. I don't know how do I [ blank ] this slide out. I don't have a B.

Just on your keyboard.

Oh my keyboard. Andy, thank you. I started with Franklin Covey -- I'm in my 23rd year at Franklin Covey and -- so not as long as Colleen, but 23rd year. A few of you remarked last night about the long tenure of this executive team. it is unique, and it's fantastic. We love it. We have worked together for a long time. We've done a lot of things together. We've taken on a lot of things together. This is a very talented and very high-trust, high-executing executive team. I've been here -- I'm in my 23rd year. And I started with the company in an inside sales role. So my job was to drive leads to our outside salesforce, our client partners. And I did that here from Salt Lake for about a year and then had the opportunity to move -- my wife and I moved to Chicago. And we lived in Chicago for about 14 years. And I went out there to be a client partner. That's what everybody that was in the position I was in here at Salt Lake wanted to go do. You wanted to become a client partner, you wanted to go out and sell to and work with and manage accounts. And so my accounts were McDonald's and Abbott Laboratories and [ Sears ], back when that was a thing, and lots of companies in the Chicago land area. And then did that for about 6 years and had the opportunity to lead a sales team in Chicago and then lead the kind of upper Midwest region and then the North America Central region. And then Bob asked if I would do that and also look after our business in the U.K. So I did that. I'd go back and forth every month, and that was a great assignment and then came back here to Salt Lake almost 8 years ago and had responsibility initially to lead all of our global sales and delivery. So the team that Andy's on and all of our sales folks did that for a while, and then became the President of the Enterprise Division and had responsibility for what I had, plus the licensees, marketing, everything in the Enterprise Division, and then became the President and Chief Operating Officer a couple of years ago. And then -- maybe 3 years ago, and then transitioned with Bob 1.5 years ago. So the reason I tell you that story -- by the way, Melissa and I live in now just south of here in a place called Draper, Utah. Melissa, my wife, we have 4 children, 21 down to 14. So we're right in the middle of it and loving it. The reason I tell you that story though is that for almost 23 years, I've had an upfront, very unique view into how our solutions show up to make a difference for our clients, right? Most of my career has been spent trying to help clients understand how to connect what they're trying to accomplish with what we can do to help them and then being able to see that unfold for them. It's not uncommon as you travel around. We're a company that's growing more rapidly. We're approaching $300 million in revenue, but we have a brand that's quite a bit larger than what the company's revenue would suggest. It's not uncommon [Technical Difficulty] around people say, "What do you do for a living?" When you are meeting new people, "Hey, what do you do for work?" And I was in Phoenix at the end of last week, and I met a person who was the CEO of fairly large financial services firm. And we got the talking and he said, "What do you do for work? I said I work for a company based in Salt Lake City called Franklin Covey. He says, "Oh, I know you guys. You're the 4 disciplines of execution people." And I said, we are. He said, "I'll never run another business in my life again with that -- where I don't use the 4 Disciplines of Execution. It is a fantastic methodology." A couple of months ago, I was on a flight sitting next to somebody, same thing, start making small talk before the noise-canceling headphones go in. You know there's that moment where you're talking there on the plane. And I was sitting next to an individual, and I said, "Hey, where do you already from? What do you do?" And he owns the -- all the -- he's the franchisee that owns all the Five Guys restaurants in Canada and about 1/3 of the United States. And then they own all of the Blaze Pizzas. I'm not sure if that's an East Coast thing, but it is out here in the West, the Blaze Pizzas. And he asked me what I did. I said I worked for this company called Franklin Covey, "Oh my gosh, I was at a conference years ago, [ Stephen M.Covey ] spoke about Trust. That resonated so much. We've taken Trust throughout our entire organization, and it's the basis for the relationships between all of our store managers and us as we work together and with the parent companies that I represent and work for." And he went on to talk about the impact Trust has had. So that's a common thing if you work at Franklin Covey, and I'll talk more about that a little bit later. It's because of this -- the way that our thought leadership has shaped the industry that we're in. And a lot of the things that we talk about and teach and consult around, they seek their way into language we all use now today, things that Steve M. Covey wrote about are now part of the common vernacular. Our clients that we work with, the thousands of clients we work with all over the world every day, they're entrusting us to help them achieve results, results which require the transformation of the way people lead, the way cultures get formed and the way people come together to execute. That's the work that we're involved in every day. So what I'd like to do is just spend a few minutes and talk about at least 5 ways in which I think Franklin Covey is unique. Now I'll put the slide back up. First, I'm going to talk just briefly about our mission. We have a unique mission, and it drives so much of what we do. Second, I want to talk about our unique goal. Our goal is impact at scale. And that's actually a differentiator. That's a unique thing. Not everybody that we -- are in the space with has that as a goal. The third, I want to talk about what is our strategy for achieving that goal. What are the elements that come together that allow us to deliver impact at scale for our clients. The fourth thing I want to talk about is our increasingly rapidly growing subscription business. And then finally, opportunities we have ahead for us that we're excited about and that we're focused on taking advantage of. So hopefully, that sounds okay for -- as a direction for where I want to go this morning. As we do this and as these pieces are all coming together, which they have been for the last number of years, we are increasingly becoming a faster revenue-growing company, more and more of that revenue flows through to -- because of our relatively fixed cost structure flows through to incremental adjusted EBITDA, cash. And as important as those are, equally important, I believe, is the increased predictability of our business and is driven by these durable problems that we focus on. Our clients are asking us to help them engage around our enduring topics. There are topics that organizations have struggled with as long as they've existed, and they'll continue to struggle with in the future. Developing world-class leadership, getting everybody in the organization on the same page, displaying the -- with the habits and the skills and capabilities they need, bringing them together in a way that creates high-trust cultures where people really do work well together, it's frictionless, they can move forward quickly. And then all of that brought together in a way organizations can execute and stay focused on their most important goals, the challenges that are associated with those 4 things are where we focus. So our mission. Our mission statement is this. We enable greatness in people and organizations everywhere. Bob had this great idea about 20 years ago-ish, where he thought we need to put a stake in the ground, what does this organization really stand for? What is it that we're about? And he brought together [ lead ] small corners of the company, and just about every associate was involved in this process to come up with and to gain buy-in to our mission. This mission of enabling greatness, there are two grand assertions that are embodied in this statement. The first assertion is that the potential for greatness resides inside every human being. Now I have teenagers, not every morning is that potential evidence, right? But the potential is there, right? And because it's their inside individuals, it's therefore inside the groups where individuals gather, it's resident inside teams. And that potential, therefore, because it's in teams, it's also in organization, it's in classrooms, it's in school districts, the potential greatness is resident inside us. That's the first grand assertion, we really do believe that. The second is that, that potential can be predictably unleashed, right? It may not be on display every day of the week, every minute of the day, but the potential is there. And through the adoption of correct mindset, supported by the right kinds of principles and frameworks and tools, people can actually change their behavior. And the potential that's there can be brought to the fore. We fundamentally believe that. And that belief then cascades into everything we do. Because we believe that, and that's our point of view, and we believe that individuals, teams and organizations can become far greater than they are today, they have the capacity to do that, that drives well, what kinds of topics would we want to focus on? What kind of challenges or the kinds of challenges where if you could tap into the potential of everyone, results would fundamentally transform? And then that translates into not only the topics we focus on, but the kind of solutions we build and how we take those solutions to market and the books we choose to write and the thought leadership we choose to put out there. And so I start with this just to spend a couple of minutes there because it is, I think, a unique point of view, but it's a powerful point of view, and it ends up driving so many things that are differentiators for us. I would also say, it's a massive talent attractor for us. The people who work at Franklin Covey are the kind of people that want to be associated with that. And they come. And as you can see in this room, we stay, right? We're really committed to this. We want to be a great organization. We want to produce all the results that matter to all of us in this room, financial and otherwise, but we also really want to make a difference. The second thing that is unique about us is where we've chosen to focus in the market, our goal. Our goal is to drive impact at scale. You'll often hear us talk about we're not involved in the thick of thin things. Where -- our goal is to help our clients address their mission-critical challenges. Sometimes we refer to those as must-win games. Let me give you just 3 examples of clients that we're working with right now that -- to illustrate this idea of these must-win games. The first, we're working with one of the largest global shipping and logistics companies in the world. It's a relatively new client. This client became a client this fall. And we all know this company, we all rely on this company. We rely on them when we want to get any kind of package or document somewhere, including next day, all around the world. And this company, they're engaged with us. They purchased an All Access Pass for an initial 5-year period. And they've asked us to be their partner to help transform the way more than 8,000 of their salespeople are going to market every day and working with their customers. This is an industry that -- we have high expectations as customers. We expect that when we drop that package off, it is going to be where we were trying to send it, when we were trying to send it. But it's also an industry where margins are tight, a lot of things that are out of their control, fuel costs, et cetera, et cetera. And so what those sales -- the way those sales people can engage customers, the way they can better negotiate on price makes a really, really big difference to them. And we supplanted their prior 20-year partner. They want to complete -- they're trying to transform not just what the salespeople do, but the culture of the organization. How those salespeople are led, right? And so we're -- that's a relatively new assignment. We're excited about that. It's in Jen's part of the business, in our Enterprise Division. And this will be a 5-year journey thereon. This is something that the leaders, the CEO of this organization knows that this is not something you just change overnight. And it's also not something that you change by just buying a library of content and say, "Hey, we bought you some stuff. Why doesn't everybody go home tonight, watch a few of these sales training videos and I'll bet by tomorrow, we'll be in good shape". No, this is something that takes some time to do differently, and we're engaged with them over a period of time. Second example, one of the largest airlines in the U.S., I guess, therefore, they make it one of the largest airlines in the world, has been a client of ours for many, many years. And they were an early All Access Pass client when we made the transition to All Access Pass. And they stayed with us through the early days of the pandemic when no airlines were flying. They actually renewed their All Access Pass during that time period and recently expanded their population and extended the contract for another 2 years. Here's what we're helping this organization with. Think airlines, think quite a bit of competition, not a lot of differentiation. Most of us would just shop around, look for the lowest price, unless you have a lot of status then you are really wed to your airline. But a lot of competition, not a tremendous amount of differentiation. This organization is making a bet that if they can create a culture where people at the frontline of the organization, the people we deal with when we're booking our tickets, when we're checking in for our flights, when we're getting our bags out of -- into and out of the overhead bin, when the flight is on time or late, how do they handle that, the people at the frontline, if they can create a culture where there's more engagements, more empowerment, higher trust that, that will translate into better outcomes for their customers and that, that will actually make a difference for them in a meaningful way on their top line and their bottom line. And so they've chosen us as their partner to help. And they said the place we need to focus is at that front-level leadership level, the leaders who are engaging those frontline employees, the way that they engage them, the way that they communicate strategy, the way they get buy into what we're doing, the way that they empower those folks, that is one of the key places they feel like that they can make a big difference. And then that will translate into better outcomes for them. So we're involved in training with them thousands of first-level leaders all over the world. The third example I would share, large technology company in San Francisco, we all know them. If you're leading a sales team, you use their product. And this organization, we've been engaged with for a number of years now, and we are their partner at the foundational level of building their culture and their organization. So every new employee, and now -- by now, virtually all the employees in the company, over time, have gone through the 7 Habits of [Audio Gap] effective people. Not just taking the course, but they've woven those principles and concepts into [Audio Gap] to about every aspect of their culture because they want a culture that's built on the framework and the principal of the 7 [Audio Gap] they want people to behave interpersonally. It's how they want them to communicate and collaborate. And we've been their partner for a long time. It's been an interesting ride in tech lately. This client actually expanded and extended their contract for 2 years this summer, right, kind of in the middle of the storm. And so the reason I begin with these 3 is when we talk about solving important issues and being the partner to clients on important issues, the topics we're on, they really do transcend the ups and downs of economies. They are as important in good times [Audio Gap] they are challenging. In fact, they might be even a little bit more, you could argue, more challenging in more difficult times. The question was asked a few minutes ago, Jonathan here said, "Hey, tech companies -- with tech companies that let go up 10% of the workforces, that have an impact on [ U.S. ]," not really. It's actually not at all, I don't think, because some of these companies that have let go 10% still have 80,000 or 90,000 or 100,000 employees. More important than ever is the culture and the way that they're going to take the 80,000 of the original 90,000 that are left need to be even more productive, need to be even more clear about what's done -- gets done -- is getting done and how to get that done. And so we're actually as excited now as we've ever been about the type of work we're able to do and the type of impact we're having. This is unique, this idea of being focused on mission-critical opportunities and challenges. I mentioned that this is unique in the industry. In our space, we tend to find a couple of types of organizations, organizations that are represented here across the bottom that are built for scale, not necessarily for impact. We've seen a lot of this as -- pre-pandemic and during the pandemic, the proliferation of large library clients. They amass thousands and thousands of courses on thousands of different topics and the value proposition for these organizations is, "Hey, we're going to democratize learning, you can buy access to our subscription, set the server up in the corner or access via the cloud and give access to all of your employees, and they can go in and pick what they want to focus on, what they want to learn." And the bet is, "Hey, they'll pick things that will be good for them. It will be good for their career mobility." And that's the value prop of a lot of these large library organizations, not poo-pooing it, it's actually there's a need there. That's a valuable thing, like we can dip in and get information when we need it. On the other axis is companies who -- traditional consulting firms that come in and do really good work, but it's hard to get that work to scale. It doesn't very often translate down below the boardroom or the executive team. What we've built is something different and unique. Our solutions have tremendous impact, but they're built to scale throughout the entire organization. What's different about our offering than the library provider is because we're [Audio Gap] on the outcomes the organization is trying to achieve, not just equipping -- not just having a resource for individuals to go dip into. We focus narrowly on a fewer set of topics, address those topics in much more depth. And we support all of the modalities and the tools necessary for organizations to be able to scale that throughout the company. The likelihood -- when I met with the President at the large global shipping and logistics company, and we were having this conversation about what he was trying to get done. We had this conversation, he asked what was going on in our industry and where we played, and I was talking to about this concept. And he said, "Oh my gosh, I could never get done what I'm trying to get done by just buying access to a big library of content, having people dip in there." Like we need people to uniformly adopt a common set of skills, a common way of thinking and to use a common set of tools, 8,000 people behaving the same way, not 8,000 people may be slightly improving their performance, but applying that in 8,000 different ways. And I think that when you think Franklin Covey, I think that's what you should think. When we say impact at scale, that's what we're talking about, moving large numbers of people from here to there in terms of their -- the way they think, the way they behave, the skills and capabilities that they possess. That is a unique thing in our industry. We believe it's the durable place to play, and it's frankly where we want to play. We want to be on the side of impact. The third thing, and I mentioned this earlier, the areas that we're deeply focused in are helping organizations develop effective leadership at every level. We know from our hundreds of thousands of engagements over the year, this is critical. So go the capability of the leaders, so goes the capability of the team and the organization, they're an incredible leverage point. Leadership is not getting easier. To be a leader today is perhaps maybe more difficult than it's ever been. It used to be if you got your promotion because you were the most effective individual contributor. You've got your promotion to the leader of the team and you were doing the job that you're leading people who are doing the job you've done yesterday and people who were employed above you had done the job that you'd had, that's not the case anymore. Organizations have delayered technologies allowed for the delayering of organizations, the remit of what a leader is responsible for is broader now than ever, not just responsible for getting the work done, but responsible for setting the right tone and the culture and connecting strategy with the frontline. And we're seeing today what used to be thought of as mid-level or senior-level leadership skills and capabilities need to exist at the frontline level -- leadership level inside organizations. And so that's a big job we're helping clients with every day, is equipping their leaders. The second, you can have great leaders, but if the individuals inside the organization don't come together, they can't work well together. They don't collaborate and communicate well together, it doesn't matter how great the leader is. Third, culture. Culture is a big, big topic. When I started in this industry 22 years ago, and I was selling, there were the few enlightened CEOs who would give a nod to culture, but they weren't really all that interested in talking about it at the time. You are not going to be the CEO for very long at all today, if you don't have a clear strategy and a great plan for how you're going to attract great talent, retain that talent, help get the most out of that talent. Culture is a big, big topic. And then, of course, what's always been a big topic is none of that matters if you can't bring it all together and deliver results, and that's the fourth big area that we focus. So what's our strategy for tying all together, what's been driving the growth we've seen in our subscription business? I'd like to highlight 5 things. We lovingly refer to these as the 5 puzzle pieces. And I want to just go around each of these because as Will and Sean and Jen talk later today, they'll go into more depth on some of these. But for us, our strategy begins with our ability to build best-in-class content. You'll hear a lot about this from Will. We have been known for doing this over time, and we're still known for it today. Our content is focused more narrowly goes into great depth. It's differentiated. It feels different to our clients. Years ago, we read the book. You may be familiar with Robert Iger wrote it, called The Ride of a Lifetime, it's about Disney. And when Bob became the CEO of Disney, he made a bet that there were going to be a couple of critical things that they would need to focus on that would be massive differentiators for them. One would be to capitalize on what they are, an asset they already had, they had really great premium content at Disney. And he said, if we can continue to be the leaders in content that will be [Audio Gap] to be a fundamentally different company. Now he was talking about this before streaming became a thing, but he could foresee that coming. The second thing he says is we have to figure out how to get that content out more broadly, can't just come to the parks, can't just buy the DVD. There's going to be a way in the future we've got to get this content out there. And so they made that bet. And we've seen what Disney has done over time. They bought Marvel, they bought Lucasfilm, Star Wars, they've expanded those franchises in a large way. And we sat back and say, that's a really good corollary for us. We [Audio Gap] the premium content company, focused on a narrow set of topics but doing them in a great level of depth and in a really high-quality way. We believe that, that is an important thing for us to continue to do, that we want to have content that feels different, looks different, is different. And Will, will share a bit more with you today about how we ensure that, that happens today and the investments that we're making in content. To put a fine point on that, where others that we compete with will spend tens of thousands developing new solutions, maybe a few hundred thousand, we'll spend millions developing those solutions, researching and developing them and refining them. Where a high-grossing solution from somebody else might generate tens of thousands, maybe a few hundred thousand dollars, our solutions are -- we have 2 solutions that have generated in excess of $1 billion over time, and many that are in the significant hundreds of millions of dollars, and we'll give some context for that as well. And so we talk about best-in-class enduring content franchises that are built to stand the test of time, content that's not just built around the fabs of today but will be as relevant now or it would be as relevant 20 years from now as they are today. That's the type of content and topics that we're focused on. The second, and this has become increasingly important to us, we didn't really focus on this pre-subscription, right, but it's to have powerful and scalable technology. Where others have focused and chosen a single modality and then said, "Okay, we'll do the best we can on impact", we've come at it the other way and said, "We are all about impact." And so therefore, we need technology that can support all the modalities necessary to get the water to the end of the road to help clients deploy at scale. And so whether it's micro learning, asynchronous on-demand, virtual instructor-led cohorts, have in-person cohort sessions, one-on-one or group coaching, we need a technology platform that will elegantly bring all of that together to support individuals and teams and organizations over a period of time on a journey that really will change behavior in a permanent way. That's the holy grail in our industry, is not just can you create access to content, that's easy, it's can you get people to engage in a way that will fundamentally change the way they perform, change the way they behave. And so again, you'll hear from Will, that's was a big part of why I acquired Strive. It was also a big part of why I acquired Jhana a few years ago to get that micro content capability. It was a big reason why we acquired Robert Gregory Partners a few years ago because we wanted to add that coaching capabilities to the organization. And there'll be more things like that, that we'll do as we look to support all of the key modalities and technologies that our clients will require to drive impact at scale. The third area that you'll hear about today is our industry-shaping thought leadership and brand. I mentioned a couple of stories earlier, where you travel around and people say, "Oh, you work for Franklin Covey. I know you because, right? Oh, my daughter goes to a Leader in Me school. I'm so glad we moved into our school district." And these are the kinds of things you hear. Our brand is quite a bit larger than the company itself, and that's an asset and an advantage for us. We're routinely asked to speak on some of the largest stages in the world. We're oftentimes coming in, and our people like Andy are standing next to the CEO of a company as that CEO is addressing their entire organization to launch their new strategy or some key strategic initiatives. And then we're there to help talk about how we'll help them do that. Our thought leaders, podcast, keynote, right? Our stuff shows up in Fortune and Forbes. We've sold over 50 million books over time. That's a big number. I don't know if anybody in our industry that has sold 50 million books, the vast majority of those have become best sellers. In fact, today, in the little slag bag we're going to give you, there's some goodies in there. But in addition to the goodies, there are 3. One is our original best-selling book, the 7 Habits of Highly Effective People. A second is our latest best-selling book, Trust & Inspire by Stephen M. R. Covey. And the third is what we hope, Andy, will be our next best-selling book, which is our book on Change, and it's not out yet, we've given you an advanced copy. But the point there is that we're -- because we're on the topics that are important and we're on the topics that people really care about, they want to get access to those, whether it's in the form of a book, whether they -- more than people a 40,000 people a week join our On Leadership podcast to hear experts, some of them ours and some of them other experts in the industry, hear us talk about and frame up the issues of the day around leadership. People look to us for that thought leadership. We recently launched, I mentioned last night, [ Adam's Role ], but -- the Franklin Covey Institute to help create more of this thought leadership and get it out even farther into the world. And so this is the important thing for us. Out of that thought leadership, it drives our marketing. It drives our product development. It's where we keep tabs on what's going on in the industry to know it -- to make sure that we're focused on both the topics that are important today, but the topics that will also be important in the future. And then the fourth would be our global reach and distribution. We have, if not the largest, among the largest global footprints in the world. Through our direct offices, roughly a dozen of them around the world and licensee partners that cover another 140 countries and through our approximately 300 salespeople, our consultants and implementation strategists and coaches and education that are all over the world. There's almost no place you can go that a local Franklin Covey person speaking the local language, with materials that have been localized in 22 languages that you can't find that. You can't have that delivery and that support. And that is tremendously important, not only for companies around the world but for our multinational organizations that are again trying to deliver impact at scale. We can show up with a large technology company in San Francisco, and we -- our consultants are deployed around the world every month, delivering content because they want the same culture in Singapore that they do in San Francisco and that they do in Dallas, Texas. And we can provide that uniform coverage and could be that thread that runs through their culture because of our large footprint here. Finally, as it relates to our strategy, our overarching, I mentioned this last night, value statement is that we want to be the workplace of choice for achievers with heart. That is the case. We cannot be the credible organization that we seek to be if we're not modeling everything that we're trying to do for our clients. And I think if you came and worked with us for a day, maybe a week, you would walk away and say, "Wow, that company is exactly what I would have hoped and thought". Now on every day is everything just perm, no. But the culture is what you would expect Franklin Covey's culture would be, and that is a tremendous asset for us. Who we are able to attract and how we're able to retain them, these are -- we are roughly 1,000 associates around the world. Our executive team here in this room, very talented, very committed, very effective people. And we see this as a huge strength. It's why it's the center puzzle piece in our strategic map. What's been happening over the last many years is think of this as a flywheel, each of these elements we're working on perfecting them and doing a little bit better and a little bit better and a little bit better. And that has been what's driving our increasingly rapid growth as an overall company, but it's what's been driving our high-growth subscription business. Today, roughly 70% of our revenues are now made up of our subscription and subscription services business as a company. So from not that much back in 2016, not bad, $40 million to approximately $202 million, I say approximately $202.1 million at the end of fiscal '22, that is all our All Access Pass and Leader in Me subscription business and the related subscription services that we sell to our clients. And that is being driven by those 5 strategic pillars I talked about a minute ago. Underlying that rapid subscription growth are two important things. One, our relatively low cost of customer acquisition, right? Where others have a cost to acquire a customer that far exceeds the first-year value -- approaches the lifetime value of the customer, in some cases, that far exceeds the first-year value of the customer, ours actually is a little bit less than the first-year value of a customer to us and far less than the lifetime value. The second is the high lifetime value of our customers. What's happening inside our subscription business right now, and this is an example of in our All Access Pass business and Enterprise, is that when we first land an initial client, that client, on average, spends about $27,000 with us on the subscription to our intellectual property, the All Access Pass subscription. To that, they add roughly $13,000 in services, okay? So it's around a 50% attach rate services to subscription for a first year total spend of around $40,000. Because of our post sale engagement process, which Jen is going to talk about, where we get our implementation strategy is in place, we help them be successful with the initial thing they wanted to do. We then expand to additional populations, new assignments. They start to use more of our content such that the average client today generates $77,000. And again, that's a mix of roughly $0.50 in services to every dollar of subscription. Tremendous growth embedded just in going from the 40 to the 77. But we're just getting started. The -- and I'll talk just in a minute here about 2 areas of growth. But this cycle is playing out over and over inside our clients every day. And so please key into what Jen says about what is it that's driving that. Why we landed a relatively large initial sale size, but then we expand to something much, much larger? When we made the transition to subscription, some of you have seen this slide before, but I think it's a really powerful example and a reminder of what's been happening now for a period of time. When we first decided to convert to subscription, Bob said, who has done this before? Who's taken a business that was not subscription, wasn't SaaS like and has converted and who did it successfully? And we found Adobe, and we said, "Oh, this is this -- let's look at what happened at Adobe perhaps as an indicator of what might happen for us." So the chart on the left was Adobe. Adobe at the presubscription back in 2010. The green line is over -- is overall revenue. The red line was their presubscription Box software product business. The blue line was their new SaaS subscription business. As you might imagine, they launched a subscription business and the traditional Box software business started to taper pretty quickly and eventually didn't all go away, but all but went away as the new subscription business really started to grow. The thing to pay attention to is what happened to overall revenue for the company as a subscription business really took off, it started to push higher and higher. We thought, I wonder -- not I wonder, we thought that probably would be the case for us. So let's just watch this, and that was the bet we're making is that would happen. On the right is what our trajectory and our history has been from the time that we launched All Access Pass and Leader in Me in our subscription business. So in 2016, you can see our green line was revenue. Our -- I guess that one is orange. Orange line was our legacy business. That was our equivalent of Box software. And the blue line is our subscription business. Very similar to what happened at Adobe. Now we'd love to be Adobe. We're not Adobe. There are some things that make them different to us. But I think the thing to pay attention to here is as our subscription business has continued to grow, it's pushed the overall growth rate of our company from what used to be high single digits, now into the low double digits, soon low teens, mid -- into the future, we see mid-teens and into the high teens as we go forward here. What's driving that is this high-recurring, highly durable lifetime customer value that continues to expand and the attractiveness of our solution that's allowing us to penetrate the market and sell to new clients. So let me talk about my final point here, the opportunities that we see ahead to continue to grow our business. We -- there are two significant sources of headroom for growth for us. The first is represented on the left, is the headroom that exists inside our current subscribing customers today. As great as we have been doing, we're still thinly penetrated inside the average existing customer. The purple and the blue are meant to represent we get in, there's that initial sale of around $27,000. That represents a certain population in the organization for [ N plus ] services for a total first year value of 40,000, but then it expands to the average today being roughly 77,000. But inside -- and this is meant to be illustrative, not every single client looks like this. But inside, the majority of our clients, we're only about 10% penetrated relative to the total addressable population inside that organization. If we didn't sell to a single new customer, we have tremendous headroom for growth as we stay in there with them, as our cohorts mature, as our implementation specialists help us expand to new populations. The second is a significant headroom for growth, are the large addressable markets in which we serve. The corporate learning and development market, there's about $99 billion spent globally with outsourced providers on the kinds of topics that we focus on. The enterprise market where people who are CXO level, general manager, heads of business unit, people who don't rely on L&D to help them get their initiatives executed, they have -- their budgets are nearly unlimited. They can spend significant amounts of money to -- if they think it will help them better execute a strategy, right? And so that's -- those are budgets that we tap into as well. And then, of course, Sean will talk in our education market. Approximately $59 billion is spent inside schools and districts, again, on the types of topics that we're focused on. So two tremendous legs of the stool from which we expect to continue to tap into to drive growth. There's 3 things that we are doing to prepare ourselves to capitalize on that growth. One is what Will and the team are focused on, which is making sure that our content is really relevant and that it's able to scale all across organizations, so that we can get to the 90% that we are in today. Some of that's a function of time. Some of that's been a function of -- it's one of the reasons we purchased Strive, was to make sure we had a platform that would be very easy for clients to deploy a behavior change solution at scale. The second thing -- the second and third thing we're focused on is one, continuing to grow the size of our distribution network. You can see here, we've -- for those who have been around for a while, we focused on client partner growth a lot, and our client partner growth has -- we have grown it. Last year, we added a net 30 new client partners. And this year, we expect to add net 40. We'll have 340 client partners here before long. That's a significant catalyst for us. The second thing that's related to this is the improving efficiency and effectiveness of these client partners as they mature and ramp. This is a slide representing just what that looks like. The dark blue at the bottom represents our mature client partner cohorts. Those who have been here, so if you'll recall, our client partners, we hire them. We expect that they'll do $200,000 in revenue in their first year, $500,000 their second, $800,000 in their third, $1.1 million their fourth and $1.3 million there fifth. That's the ramp expectation of a client partner. Represents those who are with us that are fully ramped. The turquoise are those client partners that we've hired the last couple of years that are still on the ramp cycle and the amount of revenue that's latent there that we anticipate will come as they just complete their ramp cycles, more revenue from those groups that we've hired than the revenue we have in place from those that have been here that are fully ramped. And then the purple is just to give an example of one cohort just extended out a couple of years. So the client partners that we hired in fiscal '22 the third net 30 and the amount of contribution they have just over the next few years coming from that group, and they're not even fully ramped yet. And we add more and more layers to this as we add client partners and more distribution capability. And what they're tapping into is both the addressable market that we're not yet selling to, selling new logos and further penetrating the existing clients that we have. And so everything we're doing as an organization right now is around these 5 puzzle pieces. And we expect that as we continue to do that, that's going to continue to throw off more and more growth, better and better customer outcomes, that our solutions will become even more sticky and more important to our clients. The rest of the morning this morning, we're going to go into a bit more depth here and give you an in-depth view into what -- so what does happen to drive these outcomes. And my closing comment here would be this. So this is now, as I started my 23rd year with the company. I've been here through a number of important transitions. I was here when the first transition was made from being a training company to being a real solutions provider, right? Bob came here and say, "You know what, our future is not that, our future is this." And we largely did that. It changed the nature of the products we developed and how we went and engaged our clients. Obviously, it was here the last 8 years as we made the next big transition to say, "Wait a minute, there's a different way to engage those clients and a much better model for them," and we bet, therefore, for us. As exciting as those transitions were, I stand here today more excited about what's coming ahead of us. It feels like we're just having -- made great progress still in the very early innings of this game, right? This is a 9-inning baseball game. We're still somewhere in the early innings. And by the way, we have the lead. We're doing well. But we're just getting started with what we're going to be able to do. And this is -- it's an exciting time to be at Franklin Covey. It's a wonderful time to see how all over the world, our impact is showing up every day. And so hopefully, that will come through today as you listen to us. We invite your questions. And with that, what I'd like to do is, well, let's turn the time over to Will Houghteling.

So hello, everybody. My name is Will Houghteling. And what I wanted to do today to start is to give a little bit of my background, what brought me here, what motivates me and the work that I do. And in doing so, I think it's actually a good foundation to explain the product that we're building at Franklin Covey. I think my experience over the course of the last decade working in education, education technology, I think, really guides the experience that we built here. I'm going to start Wikipedia early-life entry. So this is a photo of me. This is -- I grew up in Oakland, California. This is a photo me on a fourth grade school trip. I'm the one at the top. The most important part of this photo though is the person right here. That's my dad. My dad is actually my own fourth-grade teacher 25 years ago. So a very young age. [indiscernible] here a 10-year-old, so just briefly imagine what it would be like if you are your kid's teacher. So he's a very patient, patient man, but he instilled to me from a very early age a passion in education that has kind of carried through my entire life. When I went to college -- when I graduated college, I debated between whether I should work in education, do teach for America, whether work in technology. And I got a job in a rotational program at Google. So I was at Google, I was there for a year or so. I was working on YouTube. And it was the end of the year, and I was working with the CEO of YouTube, a guy Salar Kamangar. And he asked me to put together a list of the top 10 most popular YouTube channels in every category. Top 10 most popular comedy, gaming, action and education. So I put you together this list and the top 10 most popular education channels. You would assume at the top of the list would be Harvard, Stanford, Yale, Ted, PBS, et cetera. But instead, the single most popular channel is something I at the time in 2010 had never heard of Khan Academy. How many people here know what Khan Academy is? Great. Okay. So I go into YouTube's back end, and I pulled the e-mail address for [ Khan Academy ]. At the time they were doing 25 million views a year. I pulled the e-mail address and it's like [email protected] or something generic like that. I e-mailed and I say, "Hey, I'm so impressed with what you guys are doing. I would love to learn more." And they say, "Oh, wow, somebody works on YouTube reaching out. So cool. Why don't you come to our office. We're down on Castro Street in Mountain View." So I drive down 45 minutes south of San Bruno and go to their office. And I'm expecting 25 million views that they're going to have like a big room of 20 people recording videos. And I arrive at this location. It's now an acupuncture clinic, but this was their office on Castro Street. And I go inside and I'm like, I must be the wrong location, I'm double checking my address, et cetera. And I walk inside and their is Sal Khan, and he has his headset on, he's sitting and he's recording, then he looks and waves at me with one hand. I walk past him. The company had 3 employees at the time, doing 25 million views a year. It was him and a guy named Shantanu and a guy named Ben Kamens. And I sit down with Shantanu and Ben, and I'm just floored by what's happening here. And that was a lightful moment for me where I realized that technology has the power to provide access to education, the world around in a way that had never been possible before. And in that moment, I decided I want to spend the rest of my career working on this, how do you use technology to provide a world-class education to people globally. So I go back to YouTube. YouTube is the largest learning company in the world, but nobody thinks of it that way, right? Everybody thinks of YouTube as dogs on skateboards and beaver videos. We were doing hundreds of millions of views of educational content every single day. And so myself and one other person started the first ever YouTube [ BDU ] team in 2010. So we build out amazing scale. The dashboards only go one direction kind of thing. A year later, Google launches Hangouts. How many have used Google Hangouts? Right. Video calling? So I go to work on the Hangouts team. This is 2011, 2012. And I'm focused on how do you use Hangouts for live education. We were using Khan Academy, people watching videos. But real education, there's all this research shows that learning is a fundamentally human endeavor. We learn best with and from our peers. So I was working on Google Hangouts for education. And my second kind of breakthrough moment in my career trajectory happened here. Not of the toe goes, but at the building right above. And the building above is where Coursera was founded. Does anyone hear know -- people here know Coursera? Okay, Great. So Daphne Koller and Andrew Ng, two Stanford professors, they taught introduction to computer science class. They've taught AI class. They put their introductory computer science course online, made it available to anybody. They had 100,000 people around the world sign up. Of their top 300 highest performers, not a single one of them went to Stanford, they all were people who took the class online. So for them, lightful moment for Andrew and Daphne, they started this company Coursera, started in this building. And I go to them eager, I'm like 25 probably at this point, and I go and I meet with them, and I try to convince them to use Google Hangouts for their experience. And I say you have 100,000 people studying computer science, why don't you break them down into small cohorts of 10, 15 at a time, and they're not interested in it. They just wanted to focus on scale, scale, scale. So that was my kind of second lightful moment, which was we want technology to have impact. We don't want technologists to check a box to say we're learning and we're kind of going through videos and taking quizzes. So at that time, I started researching the science of learning. And I said, who in the world knows the most about the science of learning? And I found this Harvard Dean named Stephen Kosslyn, Dean of Social Sciences at Harvard, spent his career studying the science of learning, went to Stanford, ran an advanced behavioral sciences lab there and that he had just recently left Stanford to start a new university called Minerva. And Minerva at the time had just raised the largest seed around in Silicon Valley history, $25 million to basically two guys to the Power Point deck. And so I quit Google, and I went to work at Minerva, and we built the university. So here I am. This is -- it's a global university. And we had students living all over the world taking classes on kind of like a Zoom competitor. So this is our Berlin branch, and here I am with the 6 of our students in front of the Berlin Wall. And we built this amazing university. Last year, U.S. News & World Report ranked the Most Selective School in the World, 3% acceptance rate. The problem with Minerva, we've -- Minerva's raised $175 million now. The problem with Minerva is it never scaled. It's 150 kids per grade. So we had all this research about how people learn from Stephen Kosslyn, but it never was able to scale beyond the kind of cohorts of 150. And so I quit Minerva in the beginning of 2017, and I started my own company Strive. And the goal on Strive was to take what I had learned working at Google on YouTube and on Google Hangouts, combine that -- so how do you build educational products at scale? Combine that with what I learned at Minerva, incorporating the science of learning and to build that into a platform to transform managers into leaders. We were a small start-up. We kind of outpunched our weight class. We had great clients, Slack, Pinterest, Airbnb, Instagram, but we were definitely subscale. So about 2 years ago, basically, exactly this week, 2 years ago, we started to raise our Series A, and I got introduced through an [ annual ] investor to a guy named Rob Cahill. Some of you have met Rob before. Rob was the founder of Jhana that Franklin Covey acquired 5, 6 years ago. I got introduced to Rob. Rob and I met. He said, "Oh, I think what you guys are doing is fascinating. It's really aligned with our strategy." We had no interest in selling. He was like "You got to meet Paul." I meet Paul. And then a week later, he sets up a meeting with a lot of the people, a lot of the bigwigs in this room. So I meet with Bob and Boyd and Paul and Steve, and it's basically 2 years ago exactly today. And at the time, we were raising our Series A, in raising talking with Franklin Covey. We had another large learning library that I'm sure everybody here has heard of that also are interested in acquiring. And Bob explained the strategy of the company, said we think differently about education and about impact here. We don't want to just create an online learning platform, where people watch videos and take quizzes. We want to create impacted scale by combining content people and technology. And it felt like the kind of vision that Bob had for the company, was so clearly aligned with everything I had spent my career trying to do, this is the kind of natural place. So we were less than 2 years ago the acquisition went during. I think it took 2 months from that meeting to the acquisition officially going through, and then I joined up with Franklin Covey. So that's kind of what brought me here, my experience, and I think it really is informative of the kind of strategy and approach that we take. So what I want to talk through today is, first, I want to start with example clients, and Paul spoke about some earlier, I want to talk and really anchor our conversation today and the needs and challenges that our clients face, so that the kind of philosophical becomes practical. From there, I want to talk through an overview of Franklin Covey, what is the solution that we provide? And then I'm going to do a deeper dive into each of the 3 kind of key pillars of our product strategy, our content, our people and our technology, including a demo, and then at the end, kind of bring it back together how this combined experience helps solve the needs of our clients. So I'm going to go through two example clients. So the first example client is a Fortune 500 company. And our buyer is Jim, the CHRO. And they recently got a new CEO. They have a big strategy that they want to implement. And the CEO has tasked the CHRO with effectively implementing that strategy. And when Paul spoke earlier about these example clients, he really spoke to one specific hero need that, that company has. And that is definitely true. Often, our clients will have [Audio Gap] but often, they'll have multiple audiences they want to serve simultaneously as well. So with Jim, he has 300 VPs. Those VPs need support developing and sharing the vision and strategy. And for that audience, he wants to provide executive coaching. Go down one level to the manager of 1,700 managers, for that group, they need support creating a system of execution and ensuring accountability. And so with that audience, the CHRO will create a custom in-house management training. For the third group, the 13,000 [ annual ] contributors, they need support improving their effectiveness in developing collaboration skills. And without Franklin Covey, they'll use a learning library. So right now, this example customer would have to use 3 totally separate solutions. The solutions have inconsistent content. They don't speak to each other. It's operationally intensive and annoying. It's expensive to try to achieve their goals. Second example, customer would be Nancy, VP of LND at a growth-stage company. So 1,000 person kind of scaling company. They've just acquired a smaller start-up, a successful integration is [ MakerBreak ]. For them, they also have a need with VPs to go through kind of a leadership development coaching experience. They don't have the budget to hire an executive coaching platform. And they want the whole company to do some type of change management course. And so what Nancy would do is for the senior audience, she might find a local boutique, strategic leadership development company put together a kind of cohort-based experience. And then for the whole company, she'll find a learning library that has a change management course, right? The problem with these approaches right now is that, one, I kind of spoke to this earlier, there's no comprehensive solution. Our buyers are forced to combine multiple different solutions from multiple different vendors to solve all of the needs they have with the different audiences inside of their organization. It's operationally intensive, it's expensive. You have the systems that don't talk to each other. Second big problem our buyers face, inconsistent content quality and experience. So if you're using multiple vendors, some of them are going to be really focused on one area, but some of them might have 1,000 or 10,000 or 100,000 courses, and there's not going to be a ton of quality control that you can trust. And then finally, across the industry, we have a lack of impact and generally, it's also unmeasurable. So you have people go through experiences. And maybe at the end, you do smile sheets, you give somebody a feed, circle how happy you are with it, and that's the extent of the tracking and measurement. In this -- for folks that aren't in our industry, this may not seem like a huge problem. But as an HR leader, if you can't get your [ training ] to work, if you can get this learning development experience to work, your people aren't going to work and your company won't work either, right? So I often use the analogy of sports. I'm sure everybody is watching football right now. NFL players are only on the field for 16 hours the entire year. I was reading article the other day. So the average NFL player spends 1,400 hours a year preparing. So less than 1% of time is spent competing. Over 99% of time is spent comparing. In the working world, we don't have that. We're constantly on the playing field. We're constantly competing in. So our goal is through what we do to really prepare people to perform at their best. And when companies don't prepare effectively, they don't get great performance. So our approach at Franklin Covey is to be the one comprehensive solution for our clients. And the analogy that I often give is that we're building a gym for learning. And so it starts with the diagnostic, where we will partner with our clients, we'll identify the key problems, challenges that they face. From there, we'll develop a plan. By audience, what is the different capability or series of skills that will achieve the intended business outcomes you have. And then we'll put them into different behavior change experiences. So like a gym, have an on-demand experience. So going to gym, jumping on a treadmill, lifting weights by yourself. So we offer on-demand as the first modality. Facilitated courses, that's like a group fitness class, where you go in and some people really like that experience of working out with peers through the facilitated course experience. And then like a gym, we have a personal trainer experience, one-on-one coaching. So depending on the audience, your budget, the importance of the problem ahead, the must-win game, you can kind of choose that different behavior change modality, we power all of it. And then we do the updated diagnostic so we can actually measure and show impact to our clients. So from a client's perspective, going back to Jim and Nancy, they'll come in and they'll say, "Great, we have these different audiences. These are the challenges we face. These are the capabilities or skills that we believe will allow them to overcome this challenge and succeed our company. And this is the modality that's going to work best for that audience." And they're doing this multiple audiences at their company. So this approach that we offer is comprehensive, and it's easy for our clients because all levels are provided by the same provider, it's a consistent content and experience for the learners. And then, and I'll talk about this in a bit, everything we do is really built to generate impact for our clients. So there's notable and measurable impact. And the way that we generate that impact is by -- this goes back to the work that I talked about earlier, incorporating the science and learning, is incorporating the science of learning to drive intentional application instead of absorption. So people don't learn just by listening and by watching a video, people learn by taking lessons and applying them in the real world. And so this on the right-hand side, it's called the cold [ adult ] development cycle. It's the kind of holy grail of adult learning, where the goal is you want to get somebody to start by reflecting on how they perform today. Then, you want them to absorb content, practice in the low-stakes environment and then apply in the real world. So regardless of what modality, whether it's on-demand, whether it's the facilitated course, a group fitness class experience, whether it's working on a coach, everything we do is intended to drive potential application, and that's a big role of the technology platform. And it's for that reason, kind of building on what Paul was sharing earlier, that we're able to have impacted scale when our competitors don't. So the learning libraries, I often joke about the kind of charade of learning that you say, "Hey, everybody, you get access these on my courses," kind of everybody winks at each other. "Yes, yes, we're learning, we're learning." Like nobody completes it. And so the learning library is tougher from tons of scale and all of them have impact. And then you have the training and consulting companies that suffer what I call the 3-ring binder problem, where you'll bring together a bunch of people, they'll come to a room. They'll do a great facilitated experience and a nice room like this for a half day. And at the end, the instructor says, "Here's a 3-ring binder of everything I taught you. When you go back to your desk tomorrow, don't behave the same way you did yesterday, right?" And that's also not how behavior change happens. I'm going to dive deep on content now. So I'm going to start talking about content strategy, and then I'll discuss content coverage in the courses that we do offer. So there's kind of 4 characteristics to consider when evaluating content that a company provides. The first is, what is the coverage? What have they decided to cover? Second is research approach. So how extensively do they research the topics? Third is, what type of insights are they creating? And then fourth is what is the quality of production of the courses they create? So our competitors -- and this is as Paul was speaking to earlier, our competitors generally go a mile wide and an 8 feet. And so they say, we're going to offer thousands, tens of thousands of courses, and we're going to cover every topic from how to present effectively to how to create a pivot table to how to have a one-on-one. We focus instead on doing fewer things better. So we focused on, and I'll talk about coverage more extensively, what are the must-win games, what are the most important challenges, enduring problems the company's face and how can we build the best possible solutions for those challenges. So to build on Paul's analogy earlier. This is Disney. We are creating Star Wars. We are creating Marvel. We are creating the Toy Story franchise. This is not Netflix, where every single time you load your TV, there's 20 new options and you are overwhelmed. You don't totally trust the quality of any of them. The next differentiator in our content strategy is how extensively we research the solutions that we build. So a lot of people in the industry will be opportunistically leveraging trends. They'll hear about a topic of quiet quitting. We need a quiet quitting solution. I'm going to build a quiet quitting solution in 3 months. I do want to bring it out to market. That solution doesn't have a very long shelf life. Instead, because we're focused on the enduring must-win games, we spend -- that we know companies are going to be working with for a decade plus, we research extensively before we go out to build a solution. So this is the work that Adam is doing at the institute, team of research -- team of researchers internally, making sure that everything we do is grounded in really clear and persuasive and powerful thought leadership. The next principle for -- the next kind of characteristic of our content that differentiates us is the type of insights that we're generating. A lot of courses you'll see are really focused on tactics tips and tricks. Remember these 3 things when you're in your next one-on-one. You can memorize something and apply it for a short period of time. But if it actually doesn't connect at your core who you are as a person, you won't sustainably change behavior. And so we take a whole personal approach. And Franklin Covey has been doing a whole personal approach for 30 years before it became a popular term. The Franklin Covey whole personal approach starts with who are you as an individual, right? So self-awareness is at the core of leadership. Leadership is an inside-out experience. Who are you as a person? Second, how do you think? So what are the mindsets that you bring to your work? And then third, what are the behaviors that you do? And the combination of those 3 generates results. And so everything we do is an insight, a principle that really is paradigm shifting foundational, who you are, how you think and what you do. And then the final kind of characteristic of our content that's different from a lot of the content that exists in the market today is the quality of our production. So a lot of our competitors might spend $5,000, $10,000 developing quickly, of course. It's a lot of like direct-to-camera videos that you can just crank out with the green screen behind you. We spend millions really making sure that they are compelling experiences that are videos and there's interactive learning components to them, and there's automated reinforcement over time, and all the materials feel kind of premium and prestige that way. So to bring that to life into one of our example, of course, 7 Habits of Highly Effective People, one of our examples -- I mean one of our most popular courses obviously been around for a long time. Coverage, it's 7 Habits, it's not 7,000. We don't try to focus on how to write formulas in excel or how to add at PowerPoint. It's really the core content you need to be an effective individual. Research. Steve and Covey spent a decade working on 7 Habits, researching, teaching iterations of it before actually ever putting pen to paper and writing the book and then developing the official course. Approach to insights, 7 Habits has -- is built on these real paradigm shifting principles rather than quick tactics tips for tricks. And this chart, I think, is really interesting. Has anyone here ever played with Google's Ngram tool. So when you search a term, you can see how much it's come up in media over time, the frequency of that term. So the terms 'proactive' and 'win-win' are things that people feel -- now those are terms that are just part of the modern discourse. Those are really actually -- basically invented in 7 Habits. Those were foundational principles that were not used in modern discourse before. And 7 Habits come out, and those are 2 of the 7 Habits, and are really kind of skyrocketed. And that's the type of insight that we're looking for, every solution that we create. Is this a term that 20 years from now, people will still be using and will be using regularly? And the final thing is the production quality. So we've spent over $10 million building out 7 Habits over the course of last year. We've done -- we're now starting revision number 5. As a result, 7 Habits is a $2 billion-plus revenue-generating franchise. And the goal is -- the 7 Habits, I am talking more about the rest of the content coverage, that every solution we create has this potential. So what are the topics that we cover? Paul spoke to this earlier. We cover the most enduring challenges, so developing exceptional leaders at every level, instilling habits of effectiveness in every individual, building a winning culture, using common execution frameworks. Those 4 categories are then broken down into what we call capabilities and skills. So we have 13 capabilities. We believe these are the capabilities that every organization needs to get right to be high-performing. And every capability is then broken down into skills. So we have about 40 skills. Each capability, we focus on building a hero-branded solution for. So for example, within the first category of leadership, one of the capabilities is team management. How do you manage a team. We often talk about people going from the buddy-to-boss transition/you're promoted from your team, you're now managing the 5 people that you used to sit next to. Now you're their manager. So we wrote a great book. Everyone Deserves a Great Manager, Todd was one of the authors of. That's, of course, 6 Critical Practices for Leading a Team, and it's a $200 million revenue-generating solution. Within individual effectiveness, we talked about 7 Habits already. Within winning culture, one of the capabilities that individuals, companies need to develop is trust. We're [ leading in a feed ] of trust. And then within execution, one of the capabilities is team execution, we have 4 disciplines of execution, right? So all these capabilities have hero-branded solutions, companies and buying the All Access Pass get access to all of our hero solutions. And that also can be broken down at the scale level as well. Great. So that's the kind of content deep dive. People, it's a kind of second pillar of our product strategy. As I said earlier, I think a lot of learning is a human endeavor. There's a ton of research showing people learn best with and from their peers. Peers are really important for discussion, debate, for depth of processing. When you're discussing, debate something with somebody, you're thinking much more thoroughly about it. Peers are also helpful to create the social accountability and social pressure that leads to intentional application. So we offer facilitated courses. Those can be facilitated by Franklin Covey's delivery consultants. So Andy is one of them. We have hundreds of them all over the world. Our delivery consultants can reach and teach in all languages, all content areas. We also, and this is really pioneering for Franklin Covey, we have client facilitators. So we have a train-the-trainer model. We certify our clients in our courses, so they can train inside of their companies. And that train-the-trainer is included in the All Access Pass as well. So we have thousands of client facilitators at our companies all over the world that are expert in our content that can go out and train it. Great. So the final pillar is the technology. And so this is -- as Rodney, right? Yes. So as Rodney was asking about earlier. The technology is really building on the technology that we had built in my company, previously Strive, now called the impact platform at Franklin Covey. There's kind 4 major benefits of this platform. And I'm going to talk to them and do a demo. The first benefit is that all of the content, the powerful content, that I discussed can be accessed on the Impact platform in all modalities. So a client HR administrator, can launch all of the content modalities and a learner can follow their entire journey in one place. And so let me now switch over to demo that. Okay. Great. All right, cool. So here's the Impact platform. So this is me logged in. Just to orient you, at the top here, you have your tasks. So anything that you need to complete as part of any course on-demand, facilitated any micro learning will show up here, If I'm enrolled in any facilitated sessions, they would show up here. We have automatic integrations with outlook and google calendar. So anything that shows up here, you're automatically getting calendar invite for it as well. It seems like a small obvious thing. It's amazing how much our clients appreciate, automating the experience for them. On the left-hand side, if it's enrolled in a facilitated course, you would see all that content here. So you could click in, you can access the material, you need for a session. You can see additional resources. So like if you miss a session for example, we automatically will send you the material that you just missed, so you don't fall behind. In addition to the facilitated experience, we also have the on-demand experience. So here, you can -- every learner will access to the Explore tab. We have a different view from managers and individual contributors. So we know what your role is in your organization. We show you a different content type accordingly. And so within, you can see our featured courses. So the inclusive leadership. This is a new one that we recently launched, so you can see here. So there's an interactive syllabus, so I can see, okay, if I want to study inclusive leadership. This is all the information that I study over time. You can subscribe to it, as a learner subscribing means that you automatically get pushed the information to you, space out over time. Learners can subscribe and clients can also assign. Generally, we see probably 5x more, one of my courses, assignment top down, the learner subscription bottom up. So you can subscribe to it. It will then show up for you on the left-hand side. And as you go through it, you can track your progress. So let's say I click in, I'm reading an article and then sorry, so you click in, you're reading an article, and then it's tracked that I've read that article here, and tracked up here. And we use certificates to motivate people to complete these actual courses. If they complete, they'll get a certificate that they can add the LinkedIn on profile to the resume. In addition to the on-demand courses, so those are our hero solutions. We also have what we call micro courses. So those are skill-specific experiences. So this is a micro course around managing up. Paul will have to tell you how I do on that. But let's say, I need to work on it. I can subscribe to it, similar experience or I can see all of the content below. So we have all this micro learning content, 6-minute read, 5-minute read, et cetera, or we have these videos. So I can go in and I can play a given video. Great. Everything I showed you here -- sorry -- everything I showed you here automatically works on mobile. So if I change my screen size, it will automatically adjust the experience. Great. So that is the -- so the kind of the platform will power all these different modalities, on-demand facilitated. So the second benefit of the platform is that the platform is intended, as I said earlier, to change the behavior, not just to check a box. So we really focus on using technology to drive intentional application of our content over time. And I'll show 2 features that help achieve this. The first is the 360 assessment. So this is something that we offer. It's optional for people to complete. This is my actual 360, so I don't look too close to my team says about me. But -- so when people start their experience, they can go through a 360. They do a self evaluation and then get feedback from managers, peers, reports and cross-functional partners. And we show them kind of what are your ratings by scale sorry. Could I?

On the midterm help me on.

Cool. So 360. So you see your ratings by scale. You see your high score, low scoring prompts. You see your blind spots. So where did I give myself a high score, other people gave me a low score vice versa, where am I under confident? Where did I give myself a low score where did other people give me a high score. I get some professional personality feedback. We have a reflection exercise people do, and then we have kind of detailed sales source. So for every single skill that we teach, we show people what their scores are and what -- how other people graded them and how they graded themselves. And then they can use that to decide what they want to learn in their experience. The second feature is the application challenges. So every single scale has an application challenge, whether you're a study it in a course, facilitated, whether on demand, you'll be able to do application challenges. The goal of the application challenge is to take what you learned in the session, and then or in that on-demand piece and then commit to apply it in the real world. So you'll choose a challenge, you'll create a plan. You'll choose an application time. So when do I want to commit to actually, doing this thing, and then I'll choose accountability buddies. So I'll choose people, who I want to hold me accountable. And when I do so, then I get private calendar invites, they get calendar invites, I get e-mail reminders, et cetera. So it's another way, that we kind of guide people to commit to actually applying these lessons over time. So the third benefit of the platform is that we really focus on trying to make it as easy as possible, for learners and for clients. So I've shown so far the learner experience. Now I want to show the admin experience. Great. So administrators are incredibly busy, so they have a lot of work they need to do. And historically, it took about 300 clicks, no joke, to assign a course to a group of people. So we had a lot of -- our clients would to go off of the platform, and they would instead send out word documents or e-mails at all material to access. What we've instead focused on is -- making it as easy as possible to assign a course to a group of people. So as an administrator, I would go in here and say, okay, I want to assign a conscious bias, I could see all the material for it. You can assign that course. I'd already gone through and done this one. So I could go in, I get say, what's the team of people who I want to assign it to, what's the start date? When do I want this course to begin? And when I do that, then all of the due dates on the right-hand side are automatically generated. I can then, choose it on e-mail reminders or not, and then I can assign the learners. So we've made it, a process that literally used to take 300 clicks. We've been able to simplify that down into about 10 clicks to assign these courses to groups of people. They can do the same thing with micro courses, so skill specific, and they also do filtering and searching, all the things that you would expect them to be able to do. The final benefit of the platform is the data that we generate. So all of our clients can download data and they also have access to this dashboard. And so the dashboard will show them in 1 place, an executive summary, so I'll show them their kind of high-level data. It will show engagement. It will show enjoyment and then it will show opportunities for them that will show learning opportunities for their audience. In addition to being able to see it all on this dashboard. We also will show them information in kind of quarterly business reviews and the annual business reviews. So we'll show them executive summaries. We'll show them how their people have performed over time. So how did their employees perform on these various skills before working with Franklin Covey and then after their impact journey, and then we'll show them their company's performance against benchmarks. So how do they compare to industry averages, on all these different skills and then what courses would we recommend next? So this is the way, if you think about our business moving from 5, 10 years ago, event-based buying where you're buying an individual course for your employees to instead now you're buying a subscription pass, where you access to all this material. This data is really powerful in driving that transition. Because you could say, great. And year 1, the managers go through 6 critical practices. I now know as a company, we are underperforming on strategic thinking and prioritization. And so we should have signed 4 essential roles, which is more focused on strategic leadership. So it's using data, to really help our sales people and implementation strategists, drive future adoption and usage of our platform.

From a platform perspective.

Absolutely, yes. So I'll talk to 3 big things that we're working on. The first is moving from mobile friendly to a native mobile app. So what I showed you was you can change your screen size and you're still on your phone. We don't have an app in the Android or iOS. So we're working on building out a native mobile app. As Paul was saying earlier, right now, we roughly hit about 10% of employees within a given company. Our bread and butter is middle management, right, kind of the 6 practices, for central roles, et cetera. For expansion, we want to go up to be able to do executive coaching for senior leaders, but also go down to individual contributors. Those individual contributors much more likely to be deskless workers, so they're not going to be in front of a laptop all days. So a mobile phone app with micro learning is a huge business opportunity. And then are also much more likely to want to use the on-demand experiences versus sitting in a facilitated experience. So mobile is one big one. The second big thing we're focused on is platform integrations. So right now, we drive a lot of learners to app.franklincovey.com. Our learners, our users every single day are in teams, they're in Slack. They are things like Spotify, et cetera. How can we take all the learning experience to be built, and bring it into the tools that they're using multiple times a day. So what would accept about look like think about a chatbot powered by a ChatGPT, that's trained on all of our content and corpus where you can ask questions in the flow of your work in Teams or in Slack. Think about getting our content as a personalized podcast on Spotify. So as you're commuting to work every day, we could use there's all these amazing new audio transcription services, where you can put in audio, and it sounds like a human reading it, like could we build out personalized podcasts. So I think, platform integrations is the second big bucket. And then the third big bucket is kind of better powering that client facilitation experience. So as I said, we have thousands of client facilitators that are certified, how can we improve the certification for them. So that we really are confident they're delivering amazing experience and then how can we give them the tools to launch and track data within their company. We think that's a real differentiator that client facilitation. So we want to kind of double down on the technology to power that. Great. Awesome. So to wrap up, thinking about how does this solution impact the clients? So somebody like Jim earlier I mentioned, previously was stitching together 3 different vendors, with the new Impact platform, they'll be able to do everything with us. So we have an executive coaching. We have a facilitated impact journey for managers. We have the on-demand experience. So I guess, speaking to Paul's comment about our opportunity to expand the size of prize within the company. Nancy, same experience. She could offer executive coaching and facilitated courses and then also the on-demand, we could offer client facilitated change management to our whole organization. And then with Nancy, this is we'll get to agency start later. We see a huge opportunity for clients like Nancy where they come in with 1 need. We want to change management support, to then use the data we get from the 360 to prescribe expansion in year 2. So here are other capabilities that you could expand into. So we think kind of the technology, the content the people together provides a really differentiated solution, that now has an opportunity to really expand our business with our clients. So kind of final thing, kind of briefly to close. I want to end with one story. So a year ago, I was at a friend's 30th birthday in San Francisco. It is a very kind of typical woo in San Francisco birthday party. It was like a burning man group and no joke in the middle of the birthday, we stopped at [indiscernible] circle. I mean it was not -- is not who you would think of as the kind of Franklin Covey core constituency there and I was speaking to a friend of mine, who's a little bit older, and he's a very successful investor and runs a fund. And he said, "Oh, I was strobe going." And I said, "Oh, actually, we were acquired 6 months ago. He said, "Oh by who. I said by Franklin Covey and he was like, I was like [indiscernible] and he said he said, listen, when I was 29 years old, I started a company, and it failed, and I was really despondent. I was like, what am I going to do with my life. I'm not going to move up to my potential and I was talking to mentor of mine and the mentor gave me the 7 Habits of highly effective people. And he's read this and he read it from front to back and he got to the final page and he started over again at the beginning. And he said the principle in that book have totally transformed the way that I operate, where to this day, every single morning, his executive assistant texts him 2 pages from 7 Habits. These are the 2 pages. And you can see they're all -- both of them, like I asked them to send me a screenshot. So these are 2 pages that -- and he reads these every single morning and it has fully transformed who he is as a human. And the reason I end with this, and kind of my conversation with him was the amazing potential that we have to transform and the realization that we are still kind of scratching the surface of the audience that we could reach. We had a dinner 3 years ago. This is my team at Strive. We had a dinner 3 years ago for Christmas. And we went around the table and we all shared what our big hairy audacious goal for the year ahead was. And at that time we had 5 customers, we had 150 users. And I said, "My big hairy audacious goal for the 3 year is I want to grow 10x. By the end of the year, we will be bigger than the best business school in the world, Harbor Business schools, 15 -- 1,200 people a class, so my big hairy audacious goal. Now we are 3 years later, we reach more students that are enrolled in all business schools enrolled combined with Franklin Covey, right? Amazing scale, amazing impact. And I think as the example of my friend shared, we're just -- I really believe we're just getting started. And there's so many more companies that can benefit from what we do. There are so more people who can have the experience that my friend did, where he found something that really connected and totally transformed his life. So I'm incredibly excited about the path ahead. So thank you all very much.

As Paul said last night, and as we introduced me, I have been with Franklin Covey a total of 22 years. And that's in 2 phases. The first phase I joined after being with a big 4 consulting company. And my first job was project-related tasks with a merger between Franklin Quest and the Covey Leadership Center. So I did merger integration for a couple of years, then I was a client partner. So that's what we call our salespeople. I'll be talking more about them. I was a client partner. I sold to our clients. I was a delivery consultant. So Andy and I were peers for -- a while for about 6 years. I delivered our content with clients, working on behavior change within that client, met multiple industries, multiple clients. And went on to lead -- what was then called sales effectiveness, in your organizations now would be sales enablement. So globally, how do our client partners and our direct offices and our licensed partners sell, work with clients was the Chief Operations Officer for a short while, let our leadership practice. It sounds like a lot, but it was 15 years, right? During that time, I also had the opportunity to co-author a book with Stephen R. Covey on building a great career, using concepts from the 7 Habits primarily, on how to make your greatest unique contribution in an organization. And most recently, last year, was a coauthor on a book called strikingly different selling, how to sell in a way that is differentiated messaging from your competitors. And it's actually part of what we sell to clients and use internally. So there's the first 15. I went on what is jokingly called here a sabbatical, which is when I work somewhere else. I'm like that, it was not sabbatical at all. I worked for a Fortune 200 health care company called DaVita. They had -- they have headquartered in California and moved their headquarters to Colorado where I live. And we're looking for someone to lead basically how to scale their culture across 60,000 people. They had great experts thought leadership. In fact, the group that I worked with had been there, since that company had been through a turnaround, but they were looking at scalability. So effectively, I was like one of our buyers for 5 years. I led all learning and development, including -- and of course, there were clinicians that led this, but clinical education. Their large meetings, that's an organization with a physical space, a lot of physical space. It was even how do you display culture in your physical space, ran what was then called their CSR Group, now ESG as the terms change. So was one of our buyers for 5 years. And then I decided I've been with large public companies, well, small-cap and large-cap public companies, and I was now going to go work with private equity, preparing for equity events. As they merger -- as they did mergers and acquisitions, how we would bring them on, how we would make this an ability to either sell our IPO, and did that for about close to a year and then talk to Paul about coming back. And people say, why did you come back? And I think that's important as we dive into what's important for the enterprise. I truly believe in achievers with heart, and I love the people. Let's just be fair. I was also at the stage in my career, and I say this internally, I came back because of the very exciting business model change that had just started under Bob and Paul. And having been here for 15 years, I could -- it took some work on a napkin for me to see it, but I could see it. And so I said, "I want to be part of that. And the third reason is very early in my career, I was exposed. You hear us talk a lot about principles. And based on my career so far, I get asked a lot, career advice. What's your career advice? How did you -- and one of the things, I always say is my career advice is simple. It's -- do you have the ability to say, this is where I am, and so this is what I'm going to do. Now you can apply that to this is what happened. So this is what I'm going to do. But we talk about principles, and that is the fundamental first principle of the 7 Habits of highly effective people, which is choice. That no matter what happens, no matter what you can always choose what to do. And I would say from a very -- when I was first exposed professionally in my 20s, it changed the entire trajectory. Now I'll use just very quickly. I know Andy is doing a teach but the 7 Habits. Not only can I choose, but I know who I am and what I value and what I'm trying to do, I choose what to do with my time in alignment with that personally and professionally. And because of that, I'm not -- it's easier to collaborate and think about how different viewpoints that if all of us think the same, we're not going to get the growth mindset, we're not going to get agility, that you really need to be able to listen and empathize with people to get to a better solution than you had thought of. Okay? There's my 2-minute 7 Habits, right? 2 minutes, but it's an amazing thing for a career to be able to say, I'm not threatened by winning every conversation. I don't need to win. I just need to find that solution. I don't care who -- and all of that comes from the 7 Habits, which is why I think those principles have stuck so long. Now we also have principles around trust and principles around productivity and how to execute effectively. But I really, in addition to being very attractive to the business model to feeling part of achievers with heart, I really do know the impact this can have in organizations and then on the individuals to our mission of greatness in people and organizations everywhere. So we want to impact both. We go in via the organization. So how do we do that in the division, in the Enterprise division, which basically means everything but education, right? Everything but education. It means every industry, every governmental, federal and local agency, it means organizations, right? It typically doesn't mean 1 or 2 or 3 people because we're going for collective behavior change, so people that are really trying to drive in their organization. You've seen both from Paul and from Will these puzzle pieces. And where Will really focused is on the top 2. He focused on our best-in-class content what's differential there as well as our powerful and scalable technology, both the Impact platform, which is what Strive now is, right? The Impact platform and the modalities through which we deploy. So he gave you a broad view there, of how that works in enterprise. I'm going to talk about industry's shaping thought leadership and brand and global reach and distribution and kind of give you a behind the scenes of an actual client and how you land, retain and expand and more importantly, how you actually get that impact to clients. So as a group that looks at is this a viable business model? Of course, the incredible opportunity we have for expansion is what you're interested in. That expansion comes from actually driving the impact however that client defined their own great purpose and are we able to drive that through the behaviors that we've outlined. So both are equally important, if you're me, recognizing that the great opportunity that we have for growth is the most interesting, possibly if we're you. So our go-to-market motion, industry shaping thought leadership and brand. And you got some preview of this from Paul. I'm going to provide an actual client example where, of course, we have written permissions to share the client example and the case study of what happened here. Advent Health. Advent Health is a health care system that's headquartered in Florida. Operates in 9 states, 80,000 employees, $14.9 billion in revenue. So from an industry standpoint, you don't need to understand all the industry challenges in health care, but you're aware of some of them, right? Reimbursement, more transparency into patient satisfaction. Those are things they care about. At a particular health care system and this one operates hospitals independent physician practices, hospice care, they have a wide breadth of what's included here. Obviously, they would have within that their own organizational challenge. And then they have talent and workforce challenges that relate to those business, their individual business and their industry challenges. And there -- the durable challenges that we address. We've talked about them. And also if you look at a break, we've put them in each corner, right, of what of our durable challenges that we address. Then let's get down to the people. So people -- does anybody have health care providers in their family? Right? A health care provider goes in because they are motivated to provide compassionate care. Advent Health, actually cares about the whole person. They mention if you look at their website, body, mind, spirit. They care about the whole person. They've got these compassionate care providers that actually want to make a difference and have had a rough few years, in the last couple of years. So when you think about all of that, here's the first engagement we had with Franklin Covey and Advent Health. And we're going back a little bit, just a couple of years. This will be the only probably audience participation part, other than your questions, unless Andy does it? Or do you have audience participation? Okay. This might -- so before him, I'm actually going to ask you the question after this video. From the client's perspective, what was their challenge that they initially brought us in for. And this is in one of their regional locations. And then what was the impact from the buyer? And then you actually hear, as you could heard about Will's passion for learners, you hear about the learners. So at both levels, what was the impact? What was their challenge and what was the impact? It's just a 4-minute video with the actual buyer and some of the learners in the video. [Presentation]

Okay. I said, it was the audience participation part, right? What were they trying to do. Please, yes. Wow, that was right on. I'm loving it. Reduced turnover of emerging managers. And again, as he stated, if you're going to reduce turnover of emerging managers, there's a systemic talent approach, that you've got to take, right? It's not a silver bullet, but we attribute a significant amount to being able to work with our people, our content and our technology. Anything strike you about the actual learners themselves, the manager of radiology, the nursing leader. They were eager to be managers, who didn't know quite what to do with the next step. I think that's important because when Will talks about learner engagement and enjoyment and application, you're not going to get the collective behavior change and therefore, the business result that we're looking for. If you aren't tapping into the learner feeling like I am, not just feeling, having the skill set and the tool set to be a better leader, that they're supported and that the company has invested in that. One of the things Paul said this morning is you don't have the ability anymore as a leader to say, what I'm going to do is put out a task list and tell everybody to do it. There's a much more focus on employee experience, a focus on, do we have a culture of trust? Is it a culture of belonging? And there's an entire set of social media that they're going to go say what it's like to work there. And other people are going to look it up. So it's all interrelated that you've got the learner, the behavior. It's that collective behavior to drive big results. So how do -- by the way, the bow tie on that story, and I will be talking through our entire go-to-market motion, but for this one in particular, as an example, they started with an emerging leaders program. During our quarterly business reviews when our implementation strategist and our client partner meet with the initial new heard him speaking client, they're always looking for, are we getting the impact we set out to give. Is this being implemented? Is there anything to be more effective on Franklin Covey side, in fact, moving towards the detractors. What could we do better? What could be more effective in driving this? And is there anything that needs to be done more on your side? At the same time, saying, looks like we're really moving forward in the results. In this next meeting, would it make sense to bring in your peers in some of our other regional locations. Does it make sense to bring in your Vice President of Diversity and Inclusion or your CHRO, to talk about these results, always thinking about other decision-makers, by the way, with really great intent. We've gotten great results here. Could we get great results for them. And do they want to care about it, as well as looking for other opportunities. One of the things Will showed you is where can we find other opportunities that they can expand. So later, after this video, there was another decision-maker at their headquarters, very focused on being -- building an inclusive environment of care. That then took what work was being done with those leaders, looked at some of our other solutions and did quite a much bigger expansion and working with a whole another group on building an inclusive culture. We are currently in conversation about a much larger as clients become more familiar with different decision-making groups with what we can bring to bear, they see results and there is so much value to unlock within our current clients. Again, while enabling their great purposes. So how does that happen? We've talked about this a lot, and this is what I tried to show in the Advent Health example. It doesn't matter. We talked about health care. If this were manufacturing, typical challenges, productivity, safety, supply chain. If this were finance and banking, typical challenges. If this were high tech, if this was professional services, local federal government, there's challenges they're facing and when you get to the problems that we solve, the behavior of the individuals in their organization has a huge impact on that. On unleashing the potential of their leaders, having their great individuals, a culture where great ideas thrive and sporadic performance into system of predictable results. And sometimes in the industry, our principles and what we do get a different term, and we need to show how what we do have that term. So now everybody wants to talk about growth mindset. Well, you can see how this drives growth mindset. Everybody wants to talk about agility. There was a moment when it was quiet quitting, how to work in a hybrid environment. As Will mentioned, we don't then go put out a $10,000 course. We look at our timeless principles and how they drive the root cause of what that is, most effectively. So clients come to us and Will showed you this, and I'm breaking it down here with the kinds of things they say. He showed capabilities. But they say things like, we need to lead a new work model. We're in a hybrid environment, or we need to -- they need to be better at one-on-one. And you can't just give them a checklist of one-on-ones. They have to have that mindset of what it really means to have an effective one-on-one, and then the skill set and then the tool set. I talked to a client yesterday. The main thing they talked about is they had grown during via mergers and acquisitions, and they were worried about keeping their culture and also being able to maximize the growth and see the return of those mergers and acquisitions. All of these capabilities, ownership, how to drive it, is how we bring our solutions to match what they need. Clayton Christensen was on our Board of Directors for years, you may be familiar with him since past. But one of the things -- one of his great quotes that we've put out in front of us, as we look at how to go to market is the most important attribute of the customer value proposition is the precision, how perfectly it nails the customer job to be done. Oftentimes, it's not the individual resources and processes that make the difference, but their relationship to each other. Companies will almost always need to integrate their key resources and processes in a unique way to get a job done perfectly, for a set of customers. And that's what we've tried to do, are doing well by getting in the thick of thick things and integrating our approach to content, people technology as well as our go-to-market motion. So with the example that I just showed you of a health care organization, in general, a very simplified view of how we go to market. This is the marketing funnel and then I'll turn it on its side and show the sales and expansion and retention funnel. First, and Paul previewed some of this. For those that aren't aware of us or they are aware of us, but not the depth of our capability and what we can bring to bear. We have massive approach to being known globally. The books are highlighted here. In fact, I think one, the one in the middle is the one you have in goody bags. Is that true? Is that the one we gave? Thank you. Over 50 million sold. We're not a B2C organization, but that is amazing for awareness of what we have in the marketplace. Those authors are on the stage, quite a bit at the World Business Forum, at industry conferences like ATD, which is the Association for Talent Development and others. So the authors are out, their key noting, their speaking, they are driving that live interaction. You see up here all the social media channels. Of course, we're on Instagram, very active on LinkedIn. We have over -- we had over 2 million web hits where we have SEO and SEM, that people are searching, as we know, buyers often search online before they buy things at this point. So we're out articles, speaking, social media to create deeper awareness of who we are, even if people have a remote idea. When you move down the funnel, we do what you would consider direct marketing. We have over 200 events a year. Those range from top of the funnel, a live online event, you've undoubtedly been invited to them. Please come to this webcast and learn about X. We have live events. We have pass holder roundtables. And this is just a representative of the kinds of titles we do if it's a live online event. So that people can see how we're applying our principles, our content, our people, our technology to current problems. Lead your workforce through economic uncertainty. Accelerate your organization's behavior change. And in the first 5 months of our fiscal year, so September through December, we had a 30% increase in registrations. So we have a lot of people come to events to see us. Of course, we have e-mail marketing grips. We have lead magnets, they can download these same titles and they decide, okay, I want to download that and see what this is about. So we have a marketing engine and then once you get into an actual its time to engage, we have a direct sales process. And this team is actually the real team for 1 arm of what we're doing with Advent Health. So the salespeople are also e-mailing. They're going to events, they're working on social media, they're networking, they're asking for referrals when you think of new. And then they're asking for referrals within our existing clients. Getting the result, asking who else might need to know, who might need to know in their peer group. So this is the direct sales team for a part of Advent Health. You see a client partner, and I'll talk a little bit more about what they do? Our implementation strategist, the Managing Director leads a set of client partners and overseas a geography or a particular approach to the market. A senior consultant, like Andy, who's worked quite a bit with that Advent Health and then client engagement coordinator, that does the invoicing and the logistics and the back and forth. So we have an integrated account team that works with the client through the sales growth. Now that's a very simplified marketing model. If you turn it on its side, this is what we do. So I put awareness and engagement, the marketing piece over to the side. Once you get into direct sales, Paul mentioned that we are working with a big logistics organization, that is working with us to increase sales capability and sales leadership. It might make sense to you. We use our own methodology to teach our client partners how to particular advocate for who Franklin Covey is, and what we do in our entire value proposition. And then to switch when it gets to discovery and listen to the client. What is this health care or high-tech or professional services or finance banking or federal government agency, what are they trying to accomplish and how does that link to what we're trying to do to present solutions and then to get a contract. I'll tell you a little bit more, about where we hire and find that role, but there is a direct selling process. Now our client partners do stay involved through the retention and expansion. Through the customer success motion because our implementation strategist comes in here and says, okay, we need to very quickly get this client moving because this is an important business imperative for them. So whether that's scheduling live or live online courses, whether that's getting the cohorts loaded into the Impact platform, the way Will showed you. What -- however it is getting them started we need to have a really successful onboarding experience with a new client and start to see impact both at the business and the lower level. We then have quarterly business reviews, and it sounds like, okay, so do you only talk to the client quarterly. No. There's ongoing conversation, particularly with large rollouts. This is a very formal process where we say, this is what you wanted to do. This is how we started, how are we doing on the measurements, where else can we help? What other gaps do we see? So it's taking it a part of the day-to-day logistics and having this quarterly business review. Very effective in terms of finding additional jobs to be done, additional populations and additional ways we can have impact driving growth. You've heard it a couple of times. I think Paul had a little piece. Will had a piece. We have tremendous opportunity within our existing clients. We have tremendous opportunity to continue to expand in addition to those that were not yet in. So this is a really important model and it can go back and forth. Might be to use the Advent Health example, you might be doing really well in this regional location. They introduce you to headquarters. You've got to go through some of this process. You've just got some latent credibility because of the previous. And it goes there, you look at how large you can go within the rest of the population. And all frankly, to drive impact in there, and to help them achieve their own great purpose. So this is how we go through the process. And when you think about, well, what do you advocate for, you've heard a lot of it. We talk about our incredible content. They have with our content, not just the tactics, but we build in the checklist, the skill sets, the emotion, if you've ever changed your behavior, there was probably some emotion behind it. There's the emotional motivation, the tactical motivation, the skill set, the tool sets, the ability to access, and I'm going to talk about our global footprint. The implementation strategist is a huge thing for our clients. Huge, as I talk a little bit about their role and you heard our clients say the pricing. Shown by Paul, this is our current model, in terms of first year spend in All Access Pass and All Access Pass services. What happens over time to an average year spend and the gross margins. So industry-shaping thought leadership and brand, our last strategic puzzle piece, global reach and distribution. So Will and I will have covered all of those, and I'll end a little bit with our culture of achievers with heart. Again, I saw this map from Paul. A couple of things to point out for me in the Enterprise division. So the direct is the Royal Blue. I'm kind of color blind. Is that Royal Blue? Yes. Royal Blue, we are in the top 5 major economies in the world, direct. So we're in the U.S., we're in Japan, we're in China, we're in the U.K., we're in Germany, direct. We're also in Switzerland, Austria, Australia, New Zealand and Ireland, direct. Top 5 is a great place. We've been able to -- I really am happy with our direct leadership in each of those locations. And then we have our 140 countries we cover via partners with 21 languages. So a couple of things that's really great about that. Brand, brand awareness globally, everyone in all of our licensed partners in our direct offices would give you this exact message. The same selling process, the implementation strategist, the approach to people, technology and content. And if you sell a giant global deal, from any one of these countries, as Paul said, they expect you to deliver in local language with some level of adaptation to local culture, if applicable. So we have an unmatched ability to serve global clients. A couple of few things as I get to the end here, our client partners. You saw a picture of one. You could actually go on LinkedIn and just say, client partner, Franklin Covey, you'll see a whole bunch of them. We typically don't hire straight from university. Have a few years of experience in selling too many years of experience of selling depending on where they're coming in. They are focused on building mutually beneficial relationships, becoming a trusted adviser that actually knows this client, knows their business, can talk about how our behavior change drives their business results and generates, of course, sales and expansion. Paul showed you some of the opportunity we have for growth even within the client partners that are already here, one of his first charts and talked about our typical ramp model. How the standard or the average works, of course, we have some that go well above that. But what we're doing to drive growth through our direct sales process. The implementation strategist, I've been asked a lot of questions about in the last couple of days. These folks -- and by the way, this is one, our branding pictures are all of our own people. This is Dr. AJ Lee, over here on the big banner. Dr. Lee, they come from actual often clients. They've been clients. They understand learning science in the way that Will outlined. They typically are very good at the entire talent management life cycle and how we fit in. So our clients are talking to experts that have either done exactly, what they want to do or have led these kinds of implementations across the board. They are a thought partner. They develop how this client will measure success? What's the success plan? They Look for opportunities where there are other gaps or other populations, but they're really a partner to implementation and impact with the client. And the client partner is overseeing the entire account and looking for expansion, retention, ongoing opportunities. So they are part of this integrated account team. It's been very differential in our growth of the subscription, and they plan for future years of partnership. So last, strength of our culture. You've heard it from a few, Paul and Will this morning, but I believe fully that one of the unique value propositions that Franklin Covey brings is, we are focused at achievers with heart, and that experiential part of being someone who works here linked with customer experience and customer growth and impact is what's one of the main things that's driving our success. So these are all people. Some of these are shown, were education. Some of these were education. These are all people that I can name their names that work here. And we have incredibly talented implementation strategist here, people who are consultants like Andy's folks who support customer care with All Access care, marketing leaders. And really excited about what we've been able to build. I know we're very excited about our long-term tenure. I'm also thrilled about what we've been able to bring in new. And what we've been able to increase our strength through new talent, new thoughts, new ideas and how that will take us to even a greater place.

All right. Hi, everybody. How are you? Good. Good hanging in there. It's only an hour before lunch. So good to be with and as you can see, I work with some amazing people here. I'm here at this company, and there's always options for all of us, right? But I'm here because I think this company is really something special. And the work we do, the way we impact lives is really remarkable. I'm one of Stephen Covey's kids, I'm #4 of 9. So we had to fight for food and attention. And there's 2 brothers myself, that are still involved in the company. I've as Paul shared. I've done many different things. I know this company really well. I ran a retail chain. I ran the international operation for a while. I ran innovations for 15 years. And as of late, I've been running education. So I've seen everything. And I really is quite an extraordinary company we've got going here. I also have authored a few books. I wrote, right when I came here just a few years after joining Franklin Covey, wrote the book the 7 Habits of highly effective teams. Does anybody here have teenagers? Okay. I take back everything I said. When I wrote that book, I didn't have teams luckily, right? Now that I have them, I take back everything I said, there's no such thing as an effective team. It's an oxymoron -- and I am -- I used to be known as Stephen Covey son. Now I'm known as Britain Covey's uncle. And Britain Covey is the pump returner for the Philadelphia Eagles. He'll be starting in 2 weeks on Sunday, for the Philadelphia Eagles. He's a undrafted free agent, played here at the University of Utah. He's really small and really fast. And he won a starting job as an undrafted free agent with the Eagles. He picked a good team, you think, so who's chairing for the Eagles, Okay? Anybody for the cheers -- sorry about that. Okay. So I'm going tell you a little bit about the education group. I think this is probably a group you don't know as much about, as the Enterprise because we're the smaller unit. But we have some really good things to share with you. And I hope I can share information, is very useful to you. And of course, we'll have time for questions at the end. And afterwards, and any time you'd like to talk more. To start with, I'd like to just tell you 3 stories. I'm going to go through these 3 things today. What's that apply to the customer? In education, what are people struggling with? How -- what is a Leader in Me? I want to give you a little demo on what Leader in Me is and how it's working? And then finally, talk about the market and growth opportunity? That sounds good. Okay. So 3 quick stories. The first one is about a student, that I want to tell you about a school and then about a district, okay? So this is a story about Riley. Riley from Alberta, Canada, when he was 4, he was diagnosed with autism. His parents, Roseline and Rick, were concerned about him, they turnout a fan and he would cry, a flush of a toilet would scare him and make him cried. And so they were thrilled to find out he was going to go to a Leader in Me school, the school that really embraces children and tries to help everyone develop the talents and gifts that they have. So they went to Joseph Welsh Elementary in Alberta, Canada. And he was warmly received and did really well for the first couple of years and then he started to realize he didn't read very well. He was different than the other kids. And he kind of developed a negative view of himself, and he said basically, I'm horrible person. Those were the words he used. And then the breakthrough came in third grade when their school Joseph Welsh was invited to go to the district office and to present about their school, and they do this on a regular basis. And they usually have adults do it, and they thought we're a Leader in Me school, where students have the opportunity to lead. So we're going to have the students to do the entire presentation, to the district board. We ask for volunteers, Riley raises his hand and they're thinking, okay, well, I hope you can do it. So Riley prepared really well. And this is a poster that he showed talking about autism and he said, try to explain all the different colors, the different emotions, the blue black and the red and how -- this is how my mind works. And there's a lot of kids like me in your district and they struggle too with learning. So it gives us presentation, with a bunch of people in the room with suits and ties on. He gets a rousing ovation at the end, and he's thrilled. He comes to school the next day, and he's wearing a tie. Next day, wearing a tie and 2 weeks latter, wearing a tie. And finally, the principal calls him into the office, Mike Fritz, and he says, Riley, what's up with tie and he said, "Well, I have to get in that presentation. Everybody in the room had ties and important people wear ties. So he continued to wear a tie, all through grade school literally. And this was kind of an inflection point for him, and he just started to store. He's learning the 7 Habits. He took on leadership roles and responsibilities. He took on speaking opportunities because he saw himself as a really good public speaker, and he continued to wear his tie. I saw him when he had graduated from the school. In front of 400 people, give his story. And the standing ovation lasted for 2 minutes. Nobody would sit down. But just a good example of how a Leader in Me school can -- it takes the best of what every child has and help unleash the gifts and talents of students through opportunities, through affirmation, through teaching -- giving them leadership roles and responsibilities, and through -- like one of the things we teach kids to do is how to speak in public. So that's Riley. Let me tell you about a high school. It's called Battery Creek High School. This is a high school in South Carolina and a high poverty region. They had tons of disciplined problems, low staff morale, really struggling. This is a classic case of a bad high school, low academic performance and graduation rates. They had an image problem. They were nicknamed a salt and Battery Creek, if you can believe it. Brand-new principal comes on board, okay? And this is the way we go to market or how we create leads. We have about 25,000 leads coming into education a year. And we do it in lots of different ways. Social media, sponsorships and conferences, thought leadership we've talked about best-selling books, our website, and a lot of events and this lead came from one of our regional symposia events where we get 400 or 500 teachers and principals to come. And somebody was talking to our client partner and said, "Hey, Battery Creek just got a new principal. I think he'd be gung ho about Leader in Me because they need to turn around. So Battery Creek adopted Leader in Me. This is one of the things we do in a Leader in Me school, is we have a student Champion team. We have an adult champion team and a student 1. And the students help lead the implementation of Leader in Me. So all these students came together and became the Champion team to get this going into Battery Creek. I'm going to show you a short video. It's about 2.5 minutes long and it captures the essence of what happens here. Okay. Here you go. [Presentation]

Okay. There you go. The Battery Creek. And to increase your high school graduation rate, just a couple of percentage points is a big deal. So to do it 10% is extraordinary. So school really using these tools, transform themselves. Let me give you another example. This is San Diego Unified School District. They've had a lot of challenges. They approached us a couple of year ago, administration and staff are filling overwhelmed, but these are very common in education, mental wellness challenges after COVID, lack of connection among students and staff and self regulation, a lack of it, among students and emotional maturity. So they had these challenges struggling classic struggling district. And then one of the -- and again, this is an example of how we get in touch with people, but one of their district people, district leader wrote our client partner, Lori and said I just read the Fortis for execution. It wasn't just amazing. It has changed how I plan to approach coaching principles and district leaders, pleasing the authors for such a great support. So this came out, that was the touch point, right, calls up the district, "Hey, we can help you. So they said, "Well, let's start with some we're learning because we've got all these students and they're coming back from COVID, there's a lot of learning loss, and let's train them. So we trained a lot of teachers and a lot of students. They liked it so much, they said, "Well, can we bring this to the day school program. We said absolutely. We've got a program called Leader in Me. And so they brought on 50 school and now they're up to 70. They're going to bring on 19 more this year. And we're just a couple of years into those, so we haven't seen the results yet. But so far, it's looking really, really good. That's how it expands, right? It's 1 book led to a phone call that led to a summer learning program, that led to this big implementation. It's a 5-year contract now. So -- and there's lots of these. There's lots of San Diegos out there. So the way we work with districts and schools is has been explained already is we have a client partner, that sells and then we have a lot of coaches that help with implementation. They get involved after we make the sale. Our coaches are extraordinary. They're former students they are former principals, the best of the best. We have hundreds of applicants for 1 spot. And we get the best people here. And then we have a group of, we call them ESPs that focus on retention and expansion. And then we have a client engagement coordinator focused on customer service. So it's the same thing that Jen has the same setup. It works really well. And it's all around serving the needs of the client. So in summary, just looking at these 3 stories, this is the play to the customer. These are the challenges, that schools and districts are facing, not just here in the United States, but around the world, it's pretty consistent in our travels, we learned this. But mental wellness is a big issue, high teacher turnover, learning loss from COVID, low graduation rates, low trust cultures and equity. So minority group scoring lower than other groups skills gap. And #8, insufficient social and motion development, this idea that the workforce does not believe that our education system is developing the kind of skills that they need to succeed. These students need to succeed in today's economy. So that's a big thing. We call that the skills gap, and this is one of the things that we address directly. So just a couple of headlines here to show this, the ACT test scores are up to their lowest in 30 years. Depression and anxiety, doubling youth compared to prepandemic. Alarming number of educators may soon leave the profession. So that's the situation with education. So a lot of need -- some of these are classic and some of these are new. Mental wellness has always been an issue. But in the last 5 years or so and with the rise of social media, it's become a huge issue for young people and for the adults in the school. All right. Let me tell you a little bit about Leader in Me, and I hope this will give you kind of a good feel for how it works. But -- so if a school or a district says, we want to do Leader in Me, we say, "Okay, great. It's a multiyear process. We hope you're going to be here with us for 20 years if you're going to start." And so we take them. annual membership includes some coaching, it includes the platform, our All Access Pass equivalent, the platform. And we have 3 core trainings. There's about 8 days of training to the adults in the school over the first 3 years, and then they can take it where they want with these core impact journeys after that. And then the adults in the school train the kids. Here is another view of the Leader in Me process. This is how it's built. So we teach, we start at the bottom with what we call these paradigms, that we think are very important to instill in the minds of the educators that the idea that everyone can be a leader, everyone has genius. The change starts with me. My job is to empower the students to own their own learning and to educate the whole person, not just the academic child. So these are kind of foundational to everything we do in Leader in Me. And up 1 level are -- is all the content. As Paul shared, we share the same intellectual property as the Enterprise Division. And we've got this rich content that's really remarkable. So we use all the content and Leader in Me of FranklinCovey, all the content. The primary pieces, the foundation stones are the 7 habits for behavior and the 4 disciplines for achievement. And they work together like the yin and yang of success. They worked together extraordinarily well. So all those principles are instilled inside of the staff. The students get it from the staff, and that's how it works. And then we have other -- there are other key things going on inside the school. We teach the students how to lead. We teach them how to set and achieve goals. We share the leadership. So that's why every Leader in Me school has hundreds of leadership roles, and every student has a leadership role and responsibility. They run for these. They make them up. They're assigned sometimes. But the idea is leverage the gift and talent of the individual student. And it's all towards trying to build college career and life-ready students. So that's how it works. Okay. So I'm going to give you a little online demo. I just -- I just want to give you a little feel for what the platform looks like, okay? So you saw the All Access Pass platform that Will has put together and which quite extraordinary. And let me show you what we're doing. And we talk with Will all the time. And every good thing that they're developing over there, we want to pull over here and we've got plans to do that over time. So a quick little demo here. Okay. All right. So here is the Leader in Me online is what we call it. So every school that joins Leader in Me gets access to this, and we have just thousands of resources available to the school here. You can pick your language over here. This is called Leader in Me Weekly. It is a weekly drip feed micro learning piece that comes out every week. It's sent out to everybody. We have new videos, new articles every week. It's like [indiscernible] on the enterprise side. And I'll just show you 1 little one here, and you can -- I'm going to show just a few seconds of these, so you can get kind of a flavor for how it work... [Presentation]

Okay. So we've got -- this is just 1 piece we have. These have been coming out for a week, so we've got hundreds and hundreds of these. But we have stuff to adults and also stuff that can be used in the classroom for the students, okay? So for example, we have a resource called Leader in Me studios, and we have literally hundreds and hundreds of videos and video series here, could be used with kids, with elementary kids, preschool kids, high school kids. Let me just give you a little snippet here. So this is the Jenni and Chris show it's really popular among middle school students. [Presentation]

Okay. So you got a feel for that. Okay. Going down, we've got all these -- we got a big cartoon series. Actually, these cartoons are the most popular thing on the website by far, I'll show you 1 in just a second here. Science & the 7 Habits. We've got these other shows. We've got Erica Tyson on Reflections. That's what we just saw a second ago. But this list goes on and on. And maybe I'll just show you 1 more, get a sense for this. This is a really popular one with high school students. Manny and Clark. [Presentation]

All right. So we've got all those resources. We also have incredible resources for the school for managing your account. You can see all your upcoming presentations, all your upcoming coaching events. We have a section called the MRA. This is measurable results. We have incredible assessment tool built into this, okay? So school can go in and do student surveys, staff surveys and family surveys. So everyone is trying to figure out how to measure culture and emotional health inside of schools. We've got an incredible tool to do this. And almost every school does this every year to form a baseline to see how they're improving. So you can go in and take those and they're giving a score in the leadership category in culture and academics. That's what Leader in Me is all about is those 3 areas. We're going to teach your kids how to be leaders. We can create an incredible winning culture, and we're going to improve your academic scores. And so you can see all the results that come from this. This has been a really powerful tool. And then also, we've got a newest thing that we've developed the last couple of years is that a curriculum, okay? So every teacher in every grade level has dozens and dozens of 15-minute bite-size lessons that they can utilize in their classroom. A lot of them have embedded videos. They have practices, they have questions and everything is contained there. So let's just take a look at Level 2. We call it levels because this is used internationally and they don't always use the term grade. So here's the entire lesson. So if you want to -- if you're a teacher and you're preparing, it takes you like 2 minutes to look at what's happening. I can start the lesson. This will come up on my whiteboard in my classroom. And if I want notes, I can just bring this up quick. But these are questions I'd ask for second grade students, what's appropriate for them. A little video. [Presentation]

Okay. This one is on bullying. And so these are, again, really powerful and watched a lot. So yes, -- so every week, there are different lessons or 15 minutes are quick and bite size. This gives everyone all the resources they need to really implement Leader in Me well in the classroom, okay? I could go on and on. There's on-demand workshops. This is on-demand. It's kind of everything that we're doing in All Access Pass is right here, and we're going to build this out over time, it's family certification. So we teach -- everything we're teaching to the kids, we can teach the families as well so they can reinforce it at home. That's how it works. So family engagement and education is very important. All right. So that's -- that's a little a little show there. And let me just get back into this. Hope that gives you a little flavor for how that whole thing works. Okay. So that's Leader in Me, a little bit about how it's done so far. Our retention rate historically has been about 90%. The last couple of years, it was 92%, 89% last year. This is retention of the school itself, right? And so we're really pleased with that. We also want to get it higher. And we believe we can get a 95%. Probably hard to get beyond that, but we think 95% is achievable. We've been researched and validated by top universities across the country. This is really important, and this has allowed us to get into districts because we have great research to say, Leader in Me actually helps improve attendance. It reduces disciplined problems. It increases test scores, increases graduation rates. This took years to develop. And we really put a team behind this and has paid dividends. And as you know, you've heard this story before. We -- Leader in Me was not something we planned. We didn't get it on a whiteboard and said, how can we penetrate the education business with FranklinCovey content. Instead, we found a school that was failing, public school, high-poverty, and they had taken our content and reinvented themselves to become the #1 magnet school in the country. And we saw what they did, basically, it took our serum, invented a syringe. And we saw what they had done, we thought this can be codified and productized. And that's how it began. And it's -- so it's got all of our content in it. It's just we figured out how to inject it inside of a school. So it's really grown well here in the United States. We have about 6,500 schools now across the world, about half in the United States, about half outside. And the prospects internationally are really strong as well. Okay. So it's really grown fast. We've got a lot of -- there's a lot of competitors, and we're outpacing all of them. But this is the -- this is last year's numbers, okay? But this is the average -- this is -- trying to show lifetime customer value here. But average school last year spent $16,000. Our retention last year was 89%, as I showed before, our gross margin of 66%, okay? And it's a pretty nice model. And if you look at districts, it gets even better. So last year, the average district spent $185,000 with us. The retention rate is higher for districts than it has been historically, 94%, and it's the same blended gross margin. But these are really good solid business model metrics, and we're really excited about it by this one because this -- once you get into a district, you have the expansion opportunity like you do with All Access Pass, right? Because they're unending, the opportunities are. So moving on, what is the market and growth opportunity? As Paul shared, it's a large addressable market, $59 billion in the United States alone. And internationally, it's really strong [ it's just ] U.S., right? It's too hard to gather data internationally. So big market. The funding for Leader in Me is diversified and steady. So we have not -- this has been -- we have not had a problem if schools want to do Leader in Me, it can always find ways of doing it. They can go to traditional budgets. This is from state and local tax dollars. A lot of times, they can draw from these budgets. If they can't, they can go to federal government grants or some of these legislations. Title I, we use like crazy. This is huge, and there's a lot of money behind it. Title II, we get in there too, professional development. We've talked about this some on our calls. This is the COVID funds, the ESSER funds, emergency education relief funds. These are big. There's $190 billion set out and $140 million has not been spent yet, okay? So these are good. And there's other federal programs. But when runs out, there'll be other big government grants. They're always there. Before ESSER it was raised to the top, billions of dollars poured out to help districts across the country. So this is kind of an unending -- if you're watching -- if you're a taxpayer, you're amazed how much they can spend here, but it seems to be never ending. And then another area that's helped us a lot is the community, okay? So chambers of commerce love Leader in Me. And we have workforce initiatives all over the country, about 20 of them where a chamber comes together and says, we want to develop the workforce of the future and be an attractive area. We're adopting Leader in Me system-wide in these 5 districts, and they raise money for that. And typically, the schools are paying as well. But they're fire starters. It helps the schools get started. It pays half or more of their initial fees for the first 3 years. But United waives has been a big funder of a lot of Leader in Me schools, district foundations, national foundations. We had a foundation called leader.org that funded over 750 schools, gave them half the money they needed for the first 5 years. We have another foundation that just came to us. They have $1 billion of spend in the next 12 years, and they say, we have search far and wide for character development programs, we like you, and we're going to partner with you. And they want to fund and sponsor hundreds and hundreds of schools as well and have committed to it. And last year, they sponsored over 100. So we've got a big bucket of funding opportunities here. So it's been good and steady. We can do from all 3 of these buckets, and we've learned how to train our districts and schools how to go after this money. All right. So using the puzzle pieces, just wanted to highlight a couple of things here. First of all, on the content side, Leader in Me is a best-in-class comprehensive solution. So when I went through that little demo here, you'll notice that we do a lot of different things, okay? This is what makes us really powerful is, first of all, it's got the best content; second, it's broad and comprehensive. So most of our competitors will do 1 thing. They'll do coaching or they'll do measurement or a student curriculum. We do it all. It's integrated. And if you add it all up, we're relatively inexpensive in comparison. So this is a key competitive advantage for us. This holistic comprehensive nature. Second, on the kind of the digital front, these are -- these dots here are all of our key competitors right now. Some classic ones have been around a long time and some new ones. And there are 50 others. Our access here on the Y is schools onboarded annually. This is how fast we're growing, where people are growing and down here is impact, the outcomes we're getting. We have a unique position where we're scaling really fast, and we're pretty big and the outcomes we're getting are extraordinary, okay? Some of these competitors here are -- they're getting great outcomes, too and they'll never get above 300 or 400 or 500 schools because of the intensity of implementing these solutions. So we've got a unique position here that we've staked out, where we believe we can continue to increase our impact and our scale over time. All right. So Leader in Me is now in over 71 countries around the world. We're excited about this. Our biggest operation, of course, is in the U.S. and Canada. In Brazil, we have close to 1,000 schools. We have schools all throughout Europe. Asia. Asia is going to explode at some point. China has kind of shut down for now but just wait. And then just a couple of charts here on the advantage of selling to districts. Here's the average revenue for a single school. $15,000 right now. This is what all of our districts last year spent on average. New school acquisition, you do 1 versus a whole bunch. Retention rates tend to be a little higher with districts and the expansion is virtually unlimited. Because if you start with a district think about it, to say they have 20 schools, you start with 2. We can keep expanding to the 20. And if you get there, guess what, they have similar learning tools. Almost all the [indiscernible] have it. And when you get there, they have secondary, you might start with the primary and elementary grades. And if you get there, you have pre-K. And pre-K is massive. The money spent there is massive. And if you get there, you have professional development at the district level, developing the district administrators. And we can just keep going. It's just an unending expansion opportunity. So the district penetration upside opportunity is also very big. So to give you a sense for the size, there are 13,000 districts in the United States. We're in 157. Now remember, we only started doing this a couple of years ago. There's always school-based selling and we had to start there because we did not have the credibility to go to districts but we've gained the credibility. We've got the research now. And so this is a new frontier going after district now. We will continue to sell the single schools, of course, because that's oftentimes how we get the districts. So we do really well to single school. They see it, they want to bring us on. But the bigger opportunity is to go right after districts. And so we think there's a lot of upside. We're only 1.2% penetrated. Some of our competitors with Walmart-like product offerings are getting into the 5% to 10% to 15% range. So there's a lot of upside opportunity here as we go after districts. This is the future of our growth. All right. How are we doing on time, Boyd? Okay. So I'm going to show you 1 last video, and then we'll have 5 minutes for your questions. Okay. One last video. This is Collier County and this is in Florida. This is a situation there. It got 48,000 students, 51 schools, 56% economically disadvantaged, high minority population, 68%, lots of languages in countries of origin. So a real diverse spread out district. So they came to us, this was many years ago, it needed help, and we said, great, we'd love to partner with you. The biggest thing was increased graduation rates. So every student has a chance. And so they have an incredible superintendent, and we've just been chipping away with them for years. They started with 7 Habits to create culture and then they went into 4 Disciplines. They just had -- they went to town of 4 disciplines. When we do 4 disciplines at the district level, what happens is they'll set a goal at the district level, it's cascaded down to the school. The school cascade it down to the classroom. Classroom cascades down to a student. The students have individual one-on-one meetings with each other once a week. How are you doing on your goal? Here's my goal, how are you doing on your goal. We call them kind of build-up buddies. And this is how it works. And so it gets results because it's a cascaded approach up and down the organization. So we get districts and schools to get better outcomes academically, not because we teach reading and math, but because we teach goal setting and the kids set goals around reading a math. And the classroom sets goals and school sets goals and district set goals, and it works like that, okay? So watch this a little video, and we'll wrap up. [Presentation]

Okay. Here you go. So big opportunity. The great thing is the synergies between the 2 divisions is incredible because we've got the same intellectual property. It's the same sales framework and how we go to market. We're using the same books to help market We've got international partners and licensees, global. We've got multiple languages, and it really is a nice. It's a nice one-two punch. The idea of we build leaders at all levels from the classroom to the boardroom. That's what we do. We are known for leadership, and we can do it with Board members and senior executives and frontline managers, and we can do it with a high school student, and we can do it with a kindergartner leadership at all levels.

[Audio Gap] So my first introduction to Dr. Covey was about is in high school, we were introduced to his content. That was a little while ago now, Bob. Then in my college days I had an opportunity to attend a conference, if you will, with a couple of hundred other people about my age. And Dr. Covey was the one who came and spoke to us. So I was pretty excited because it had some interface in high school, happy that Dr. Covey was coming. And when he stood up to talk, the first thing he said is what we have here is a unique combination of positive variables. I told my wife I was going to use that today. She was like, how do you remember that? I said, well, I'm from Hebron, people don't talk like that in Hebron. [indiscernible] What we have here in the company is a unique combination of positive variables. As you heard about, one of the things we wanted to do is help everybody understand what we do to maybe give some more credibility as to why we think we can grow. I never break up when I'm talking in the mirror [indiscernible]. Finance people are always the most emotional so sorry about that. My wife and I have 15 grandkids. And I don't know what kind of -- excuse me. what kind of a world they're going to grow up in. So Sean we appreciate people like you and your division that can prepare our young people for maybe what's coming. So thank you. Jen we also have 4 kids. They're working now. They're poor and trying to get by. And this is very helpful for them, they all use our content. Our [indiscernible] time management content to try to progress their own careers and what they're doing in their lives. So thank you. Thank you to Bob and Paul for -- Bob for helping the company, survive from his unique abilities when handheld devices kind of interrupted the paper planner; and Paul for direction now of leading us in expanding growth, probably in an odd way, that was my way of saying, why should we be positive about the value of the company at the basic foundation of everything else. In order to believe that we're going to have increased value of the company and, therefore, increase shareholder value is the belief that the content actually works that changes individuals and organizations and students. And I believe that from having been exposed to the content from high school days, college days and then actually went through a couple of the training courses before the Covey Company or the Franklin Covey existed. So they were teaching content, trying to figure out if they wanted to start a company and I was fortunate enough to learn some of the content before the companies even existed. So using -- used the content in my personal life for many, many, many years. And that's why I believe that we're going to have increased value because of what we do and the impact that it has. So we're in a position of -- these aren't [indiscernible] quality numbers so don't write this down but let's say we have $250 million to spend. My way of looking at how we're going to spend that money is spend in a way that we can delight our customers, be a workplace of choice for achievers with heart and provide a reasonable return to our shareholders. Now someone might say rather than a reasonable return, extraordinary return to shareholders, but to provide a return to our shareholders. So customers, employees, shareholders and allocate our resources in such a way that it will do that. So as we've talked about many, many times, we're spending more money than we've ever spent before in client-facing activities, content development salespeople, implementation people, the client-facing costs. And then we're working as hard as we can to keep all the cost down. So as we grow our revenue at an increasing rate, our profitability will grow at an even faster increasing rate as well our cash flow. And so we kind of chuckle about the fact that some people say we're unique because we want to grow revenue, be profitable and generate cash. I mean okay, let's say, that's unique. We definitely don't get the valuation if we didn't make any money, but still, that's what -- that's what we -- that's what we're about. Grow revenue, increased profitability, increase cash and then use that cash first to grow the business. So we'll -- I don't -- I can't envision we'll ever be in a position where we want to hire this many salespeople and we got something for them to do, et cetera, what we think is going to work and say, well, we don't have cash. First thing we'll do is run the company, and we're going to have enough cash to run the company. However, we think is best. Then after that, if we can do acquisitions that are more like the fit-in type of acquisitions, we're going to do that. And we think that we can run the company, do a reasonable amount of acquisitions and still be generating more cash than that requires. And so far, we have participated in opportunistic buyback of shares. We've said that, you've also said many, many times, opportunistic buyback of shares doesn't exactly mean that if I wake up in the morning and decide if it's a good day to buy shares. But it is more like that than it is setting all the legalities in place. So you all know exactly how many shares we're going to buy each month. We just have chosen not to go that direction. So in summary, the value of the company is going to increase because the content works, changes lives, individuals, organizations, schools. We're going to grow revenue. We're going to be profitable. We're going to generate cash, and we hope that we're good stewards of that cash to increase the value of the company. So I went over, but thank you.

Well, I'm delighted just to get to say thanks. And I would like to start out there and saying thanks to each of you for making a huge effort to come out and be with us. And for your efforts over the years. We're much better because we have you all as partners. We express gratitude to the analysts who invest all this time. Alex was the very first analyst who decided to cover the company right after we had sold all the consumer business off. And Alex Paris invited us, we met and then Alex invited us to his spring investor event, which was an important point for us. And each of the analysts who have come on since -- I mean, it's a tough decision to come on, right? I mean is this something that is an industry that's worth -- this got a runway? Is this a company that can execute on it? And so we know it's a leap of faith and trust. And so we really do thank you. We thank our investors who -- many of whom we've known for years and who have made these investments have stayed with us have work through the change in many cases that we went through and still stayed in and believe that we'd get across those who see the vision and are nice enough to call and give us thoughts about. If you think about this or think about that. The questions really are taken seriously. I can tell you before analyst calls, we spend hours trying to think of what are the questions and we spend hours after saying, what were the questions, those are great. We should get better at that. And so I think we all get better. So thank you and thanks for making the huge investment of time in preparation for this and being here. Second thought, I've reflected it off in -- about 100 years, a little over 100 years ago, George Merck, who grandson and the founder of Merck, as you know, Merck was split Europe and U.S. Merck. We got the team together and said, "Look, what are we really going to be about it? we're just a [indiscernible] of other people's chemicals and so forth, what are we going to really do." And they identified 10 of the biggest health challenges on the planet that were kind of intractable health challenges, smallpox, mumps, tuberculosis, blindness, some of these things. And they said, we are going to dedicate our -- they determined together, they were going to dedicate the entire company to solving these big problems. And with the belief that they should be solving the problems for the patients. That if they did that and did it well, they still had to run a business to do that. But if they did it and did it well, the profits would come -- and the better job they did at it, the more the profit would be. And so they get -- they create a Medicaid medicine or -- a virus -- or I mean vaccine, there was efficacious, but had side effects. So they stay on that for a while until it had fewer side effects. They find there were problems administering the vaccine, and they try to deal with that. They deal with the distribution problems with it. The knowledge of the doctor is about it. And so they get the thought leadership pieces and effectively, and they build a culture around this. But with that kind of commitment, and again, every company has challenges, but they had this tremendous breakthrough that lasted for 5 or 6 decades by taking these big hard challenges on and solving them. And what you've heard today is that they kind of had their own puzzle pieces, but they were kind of the same ones, which as you've heard today from Paul and from each of the team members is that there really is that kind of a commitment here is decision was made 2 decades ago, not to do the easy stuff because that's easy to just create content. It's not that's that easy, but it's easier. Think how -- I mean, Richard Feynman, the physicist, Nobel laureate once made the observation, he said, physics would be a lot harder if electrons had feelings. And that's the business we're in. It's one thing to solve things formulaically, but you have to -- getting large numbers of people to do something new or better on a consistent basis is one of the hardest challenges people have. And we -- so similarly, the company is committed to having the best-in-class content to do that. But that isn't a onetime thing. That investment just like Merck is getting it better and better and better, and getting the latest science and just research and the latest test of what really changes behavior. Even if you can get behavior change, if it's hard to distribute or hard to consume, you saw the new impact platform. There's a huge investment there. That's not going to be the end of it. Every year, there'll be investments to refine that. Thought leadership, people even know there was a solution. Some people don't even know they have the problem. In fact, interesting for us. I mean, you know what it looks like when a disease is cured. For us, we dropped this curve that -- a different curve, not the change curve, but we kind of say, look, every organization has pockets of great performance, every organization also has variability. And so you know how to do it. You don't know how to institutionalize what you're doing. So people over time because they don't know how to move it, they just accept the shape of the variability of curve as it given. And once you do that, then basically your performance is stuck. How -- what really the metric that we look at is this curve. Can you move that curve right or entire there will still be variability. But if you can dramatically -- think of your sales force, you've got 10% of your sales force that's really, really good. You've got this variability. If by applying Franklin Covey's sales solution at Dell, at Hewlett Packard Enterprise, at Accenture, EY, the whole idea is to move that curve righter and tighter, whether it's customer loyalty at Marriott, 8 million team commitments kept to move their curve by 600 basis points up from Hyatt and Hilton. So that's really what it's about. And so every day [indiscernible] how do we get the solution better? How do we get the delivery better? How do we get the thought leadership better? How do we do a better job of communicating to the world that -- there are the nature of the problem and the nature of the solution, and how do you build your distribution and your client-facing distribution. So we've got those same challenges, the center of which is a great culture and not a perfect culture for sure, but a great culture that comes that's mission-oriented and dedicated to it. And so I think, hopefully, you've gotten a feel for that commitment today. This for us is a flywheel, where Paul and the team every day are thinking, which portion of the flywheel is the stickiest. Where is the biggest opportunity for moving forward? I'd just add 1 other piece to our puzzle, which is our Board, which is an interesting word. We recognize that a lot of what an organization does. It can comes from institutionalizing processes and ways of thinking about things. And we thought, gosh, we're in a very interesting industry. In 2005, I started to recruit Clayton Christensen, he is kind of the father of disruption, this whole idea of being [indiscernible]. Listen, we have to assume we're being disrupted all the time. We just don't know it. And so we hired -- we got Clayton to join the Board, and we formed an innovation and growth committee saying less institutionalized process, we're researching our customers. We're looking at our own data about where we're winning and losing and having a Board level oversight of that. Clayton lead that for a number of years. Today, Derek van Bever leads this. But before Clayton's health problems eventually, he died 2 years ago. But before that, we had hired Derek van Bever to come on. Derek had the Harvard Business School, he's the one who teaches and carries Clayton's work on. But that's not really why we did it because we had Clay then. But Derek was the co-founder of the Corporate Executive Board. He was also the Head of innovation there. So all the product development and research and so forth, it was done at Corporate Executive Board, is a subscription model. We said, we're going to need that. Sorry, today, he heads that committee. Well, gosh, in the sales side, we have a big enterprise sales response, is also an education. But we have a big enterprise sales opportunity. What can we do? And eventually, we recruited Anne Chow who is the CEO of AT&T Enterprise. So the $35 billion portion of AT&T that sells through enterprises around the world, all sorts. She has done an amazing job. AT&T has had its challenges over the years. But she was recognized as somebody who figured how to segment market, deploy salespeople. And so we brought her on. She's on the growth committee, too. Nancy Phillips, the Chief People Officer, Chief Human Resources Officer at ViacomCBS, now Paramount. She's been in that role at Hewlett Packard at -- what? Yes. GE, 3 different divisions of GE. She is, of course, an expert for all the board level things, but she's also one of our biggest customers, not really. But we use her as that's exactly the person we want and what does it take? She's on that growth committee and challenging. As a consequence of that committee, Adam you know he's is focusing his full effort on this market and customer intelligence. We're challenging things all the time. Craig Cuffie, the Chief Purchasing Officer of the sales force, knowledge of the subscription business, but knowledge -- he buys all the technology there. Now he's the Chief Purchasing Officer at HSBC. So -- but his job is buying technologies. He -- so if we think the technology is going to be important to our delivery in the future. He's in negotiating things with everybody on the planet, and so we have this tremendous Board in transactions. Don McNamara, is a very experienced private equity investor. Joel Peterson, same, the Stanford Business School he has won the teaching several times. And so I'd just say that there's another player on the field, which is this great Board, and the great thing is they really -- I mean, while we are punching above our weight a bit in terms of the Board members we have, we're not punching above out weight to have those people to help us take advantage of the opportunity. The opportunity is that big, they see it. They're inspired by it. And so I'd just say that, that -- there's one more puzzle piece that it's an important one, both for governance, but I think more for driving the business forward and challenging setting at processes. And so one of my roles now is trying to make sure that we're getting the best out of the Board, and they spend that weight disproportionate amount of time for the pay they get versus a normal Board member, which I've been for other companies. Finally, I just expressed -- that you've seen the leadership. I think whatever you heard, what you saw, I think, was these leaders who care, who know what's going on have been through change have led our leading big teams and accelerating that. Above all, I mean I love my family more than anybody. But the next group of people I love and admire more than maybe in the world is the executive team here at FranklinCovey. You can trust them, their intent and their integrity. But every day, they're waking up and thinking, how do we improve on this, any critique or whether you provide is not -- no one comes in and says, Can you believe -- I mean, it's exactly the opposite, wow, you really want us to be our best, and therefore we ought to be better. And Paul is the leader, overall, there's just no finer person or partner that you could have. Steve, for 22 years, we set together every decision. Jen and Sean, Will, Adam, Todd, all these years in our people is just remarkable. And so I would just say a huge thanks again to everyone, but also the Board's confidence is such that I mean, the board is fully behind this team, fully behind the strategy, is allocating the resources. There's plenty of challenging -- the how's and where, but no challenge as to the support. And so thanks again for being with us today, and we're thrilled to have you as partners on this great climb. Thanks.