KinderCare Reports Third Quarter 2025 Financial Results

About this update from Kindercare Learning Companies, Inc.

Third Quarter Highlighted by Continued Revenue Growth, Performance in Champions, and Operational Discipline. Management Updates Full-Year Outlook. LAKE OSWEGO, Ore., November 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 third quarter ended September 27, 2025. Third Quarter 2025 Highlights Non-GAAP financial measures "Our third quarter results reflect disciplined execution and continued operational progress through the back-to-school season," said Paul Thompson, KinderCare's Chief Executive Officer. "We delivered revenue growth led by strong performance in Champions and sustained engagement from employers who value the breadth and flexibility of our childcare solutions. Our team remained focused on strengthening management and center-level execution to enhance the family experience as parents make their childcare decisions." Mr. Thompson continued, "While we are operating in a more complex economic environment, we believe the influence these factors have on our results are near-term in nature. The operational initiatives we completed this quarter are enhancing accountability and building consistent, value-driven experiences for families. We remain confident in our fundamentals, our team’s commitment, and the significant long-term opportunities ahead for KinderCare." Third Quarter 2025 Financial Results Total revenue increased $5.4 million, or 0.8%, to $676.8 million for the third quarter of 2025 as compared to $671.5 million for the third quarter of 2024. Revenue from early childhood education centers increased by $0.5 million, or 0.1%, for the third quarter of 2025 as compared to the third quarter of 2024, of which approximately 2% was from higher tuition rates, offset by approximately 2% from lower enrollment. Revenue from before- and after-school sites increased by $4.8 million, or 10.7%, for the third quarter of 2025 as compared to the third quarter of 2024 primarily due to opening new sites. Income from operations decreased $28.1 million, or 51.6%, to $26.3 million for the third quarter of 2025 as compared to $54.4 million for the third quarter of 2024. The decrease was driven by an increase in cost of services of $22.0 million, primarily as a result of lower government assistance due to a decrease in cost reimbursements from the conclusion of COVID-19 Stimulus funding, as well as higher personnel costs due to increased wage rates offset by lower labor hours. Additionally, the decrease was attributable to an increase in selling, general, and administrative expenses of $7.9 million, driven by higher professional fees, personnel costs, and computer costs primarily related to investments in new technology and digital solutions. These increases were partially offset by the $5.4 million in revenue growth noted above. Net income decreased $9.4 million, or 67.4%, to $4.6 million for the third quarter of 2025 as compared to $14.0 million for the third quarter of 2024. The decrease was driven by the impact to income from operations noted above, partially offset by a $15.4 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 subsequent repricing amendments in October 2024 and July 2025. Net income per common share, diluted was $0.04 for the third quarter of 2025 compared to $0.15 for the third quarter of 2024. For the third quarter of 2025, adjusted EBITDA (1) decreased $5.0 million, or 7.0%, to $66.4 million, and adjusted net income (1) increased $11.0 million, to $15.3 million, from the third quarter of 2024. Adjusted net income per common share, diluted (1) was $0.13 for the third quarter of 2025 compared to $0.05 for the third quarter of 2024. As of September 27, 2025, the Company operated 1,595 early childhood education centers and 1,138 before- and after-school sites. Balance Sheet and Liquidity As of September 27, 2025, the Company had $174.7 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 nine months ended September 27, 2025, the Company generated $234.3 million in cash provided by operating activities and made net investments totaling $114.4 million, which include $95.9 million in property and equipment and $17.5 million in acquisitions. Additionally, during the nine months ended September 27, 2025, the Company utilized $7.5 million in cash for financing activities. 2025 Outlook The Company is updating its guidance ranges for the full year 2025. Revenue is now expected to be approximately $2.72 billion to $2.74 billion and adjusted EBITDA is expected to be approximately $290 million to $295 million (2) . Adjusted net income per common share, diluted is expected to be approximately $0.64 to $0.67 (2) . Conference Call and Webcast Management will host a conference call today at 5:00 pm ET to discuss the financial results for the third 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 61209. Participants are asked to dial in a few minutes prior to the call to register. A supplemental presentation of third quarter results will be available at https://investors.kindercare.com . 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, future enrollment trends, the impact of occupancy initiatives on future performance, future government support for childcare (including the timing or amount of future grants, reimbursement or other forms of government assistance); future business plans, objectives or initiatives; the Company’s future financial position; future financial outlook and performance; general economic and industry trends; future operating results; and working capital and liquidity and other statements that are not statements of 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, and our ability to manage any adverse impact of a prolonged shutdown of the United States government on these factors; our ability to hire and retain qualified teachers, management, employees, and maintain strong employee engagement; the impact of public health crises 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. Management also uses these non-GAAP financial measures for budgeting and compensation purposes. 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 2,700 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:   View source version on businesswire.com: https://www.businesswire.com/news/home/20251112661473/en/ Contacts Investors Investor Relations [email protected] Media Media Relations [email protected]

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