KinderCare Reports Second Quarter 2025 Financial Results

About this update from Kindercare Learning Companies, Inc.

Second Quarter Highlighted by Continued Revenue Growth, Strategic Enrollment Initiatives, and Improved Federal Policy Clarity. Management Refines Guidance for Full Year 2025. LAKE OSWEGO, Ore., August 12, 2025 --( BUSINESS WIRE )--KinderCare Learning Companies, Inc. (NYSE: KLC) ("KinderCare," the "Company," and "we"), a leading provider of high-quality early childhood education, today announced financial results for the second quarter ended June 28, 2025. Second Quarter 2025 Highlights Non-GAAP financial measures "Our second quarter financial results reflect continued revenue growth and the resilience of our business, even as enrollment trends turned softer than anticipated late in the quarter," said Paul Thompson, KinderCare’s Chief Executive Officer. "Despite our second quarter occupancy being similar to pre-pandemic levels at 71%, we are intently focused on initiatives to improve occupancy. Our investments into digital tools and focused engagement are addressing market specific needs within our footprint while building value for our brands within communities." Mr. Thompson continued, "With the recent passage of the new federal budget, we are energized by the continued strong bi-partisan support to increase access to affordable childcare for American families, including the enhanced Employer-Provided Child Care Credit. We believe KinderCare has the unique scale and flexibility to bring high quality early childhood education to families across the U.S. by meeting families, and employers, where they need us the most." Second Quarter 2025 Financial Results Total revenue increased $10.2 million, or 1.5%, to $700.1 million for the second quarter of 2025 as compared to $689.9 million for the second quarter of 2024. Revenue from early childhood education centers increased by $6.5 million, or 1.0%, for the second quarter of 2025 as compared to the second quarter of 2024, of which approximately 2% was from higher tuition rates, partially offset by approximately 1% from lower enrollment. Revenue from before- and after-school sites increased by $3.7 million, or 7.5%, for the second quarter of 2025 as compared to the second quarter of 2024 primarily due to opening new sites. Income from operations decreased $11.9 million, or 14.8%, to $68.7 million for the second quarter of 2025 as compared to $80.6 million for the second quarter of 2024. The decrease was driven by an increase in cost of services of $19.4 million, primarily as a result of higher personnel costs due to increased wage rates, as well as increases in other center operating expenses driven by operating more centers and sites. The increase in cost of services was partially offset by the $10.2 million in revenue growth noted above. Net income increased $10.1 million, or 35.2%, to $38.6 million for the second quarter of 2025 as compared to $28.5 million for the second quarter of 2024. The $10.1 million increase was driven by a $23.9 million decrease in interest expense, primarily due to lower outstanding principal and interest rates on the First Lien Term Loan Facility as a result of the October 2024 repayment and repricing amendment executed in conjunction with the Company's IPO, partially offset by the impact to income from operations noted above. Net income per common share, diluted was $0.33 for the second quarter of 2025 compared to $0.32 for the second quarter of 2024. For the second quarter of 2025, adjusted EBITDA (1) decreased $3.9 million, or 4.5%, to $82.4 million, and adjusted net income (1) increased $12.5 million, to $26.0 million, from the second quarter of 2024. Adjusted net income per common share, diluted (1) was $0.22 for the second quarter of 2025. As of June 28, 2025, the Company operated 1,589 early childhood education centers and 1,043 before- and after-school sites. Balance Sheet and Liquidity As of June 28, 2025, the Company had $119.0 million of cash and cash equivalents and $194.4 million of available borrowing capacity under the revolving credit facility, after giving effect to the outstanding letters of credit of $68.1 million. During the fiscal year ended June 28, 2025, the Company generated $133.5 million in cash provided by operating activities and made net investments totaling $72.2 million, which include $57.7 million in property and equipment and $14.6 million in acquisitions. Additionally, during the fiscal year ended June 28, 2025, the Company utilized $4.6 million in cash for financing activities. 2025 Outlook The Company is refining its guidance ranges for the full year 2025. Based on lowered occupancy expectations, revenue is now expected to be approximately $2.75 billion to $2.80 billion and adjusted EBITDA to be approximately $310 million to $320 million (2). Adjusted net income per common share, diluted is expected to be approximately $0.77 to $0.82 (2) . Conference Call and Webcast Management will host a conference call today at 5:00 pm ET to discuss the financial results for the second quarter of 2025. The conference call will be webcast live via the Company's investor relations website at https://investors.kindercare.com . A replay of the webcast will be made available on the same investor relations website shortly after the event concludes. Interested parties may also access the conference call live over the phone by dialing 1-800-549-8228 (Toll-free) or 1-646-564-2877 (Toll) and referencing conference ID 80406. Participants are asked to dial in a few minutes prior to the call to register. A supplemental presentation of second quarter results will be available at https://investors.kindercare.com. Footnote References Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this press release and on the related teleconference that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements. These statements include, but are not limited to, statements about the Company’s expectations or guidance regarding, among other things, financial position; future financial outlook and performance; business plans and objectives; general economic and industry trends; operating results; and working capital and liquidity and other statements contained in this presentation that are not historical facts. When used in this press release and on the related teleconference, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," "vision," or "should," or the negative thereof or other variations thereon or comparable terminology. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: our ability to address changes in the demand for child care and workplace solutions; our ability to adjust to shifts in workforce demographics, economic conditions, office environments and unemployment rates; our ability to hire and retain qualified teachers, management, employees, and maintain strong employee engagement; the impact of public health crises, such as the COVID-19 pandemic, on our business, financial condition and results of operations; our ability to address adverse publicity; changes in federal child care and education spending policies, tax incentives and budget priorities; our ability to acquire additional capital; our ability to successfully identify acquisition targets, acquire businesses and integrate acquired operations into our business; our reliance on our subsidiaries; our ability to protect our intellectual property rights; our ability to protect our information technology and that of our third-party service providers; our ability to manage the costs and liabilities of collecting, using, storing, disclosing, transferring and processing personal information; our ability to manage payment-related risks; our expectations regarding the effects of existing and developing laws and regulations, litigation and regulatory proceedings; our ability to maintain adequate insurance coverage; the fluctuation in our stock price; the occurrence of natural disasters, environmental contamination or other highly disruptive events; expenses associated with being a public company and other risks and uncertainties set forth under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 28, 2024 and in our other filings with the SEC. The Company does not undertake any obligation to update any forward-looking statements made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based, except as otherwise required by law. Use of Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures, including EBIT, EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per common share. Tables showing the reconciliation of these non-GAAP financial measures to the comparable GAAP measures are included at the end of this release. Management believes these non-GAAP financial measures are useful in evaluating the Company’s operating performance, and may be helpful to securities analysts, institutional investors and other interested parties in understanding the Company’s operating performance and prospects. Investors are cautioned against placing undue reliance on non-GAAP financial measures and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures, such as net income or net income per common share. Non-GAAP financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing business performance. Further, non-GAAP financial measures may have limited value for purposes of drawing comparisons between companies because different companies may calculate similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles. About KinderCare Learning Companies™ A leading private provider of early childhood and school-age education and care, KinderCare builds confidence for life in children and families from all backgrounds. KinderCare supports hardworking families in 41 states and the District of Columbia with differentiated flexible child care solutions: KinderCare partners with employers nationwide to address the child care needs of today’s dynamic workforce. We provide customized family care benefits for organizations, including care for young children on or near the site where their parents work, tuition benefits, and backup care where KinderCare programs are located. Headquartered in Lake Oswego, Oregon, KinderCare operates more than 2,600 early learning centers and sites. KinderCare Learning Companies, Inc. Consolidated Non-GAAP Measures (Unaudited) (In thousands, except per share data) The following table shows EBIT, EBITDA, and adjusted EBITDA for the periods presented, and the reconciliation to its most comparable GAAP measure, net income, for the periods presented: The following table shows adjusted net income and adjusted net income per common share for the periods presented and the reconciliation to the most comparable GAAP measure, net income and net income per common share, respectively, for the periods presented: Explanation of add backs:   View source version on businesswire.com: https://www.businesswire.com/news/home/20250812540813/en/ Contacts Investors Sloan Bohlen, Solebury Strategic Communications [email protected] Media Stephanie Knight, Solebury Strategic Communications [email protected]

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