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KinderCare Reports First Quarter 2025 Financial Results

1. KLC reported Q1 2025 revenue of $668.2 million, a 2.1% increase. 2. Net income for Q1 2025 reached $21.2 million, compared to a loss last year. 3. Adjusted EBITDA increased by 12.2% to $83.6 million in Q1 2025. 4. KLC maintains 2025 guidance of $2.75-$2.85 billion in revenue. 5. Expansion into Idaho adds growth potential, increasing KLC's educational footprint.

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Why Bullish?

KLC's solid revenue growth and profitability metrics resemble strong company performance. Historical examples show similar quarterly growth often positively influences stock prices.

How important is it?

The article highlights KLC's financial health and growth trajectory, indicating its potential influence on stock pricing.

Why Long Term?

KLC's sustained growth outlook and expansion plans hint at ongoing benefits, which could stabilize stock price across quarters.

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EDUCHNGISRG
First Quarter Highlighted by Increased Revenue, Net Income Growth, Portfolio Expansion, and Continued Strong Adjusted EBITDA Generation. Reiterates 2025 Guidance. LAKE OSWEGO, Ore.--(BUSINESS WIRE)--KinderCare Learning Companies, Inc. (NYSE: KLC) (“KinderCare,” the “Company,” and “we”), a leading provider of high-quality early childhood education (“ECE”), today announced financial results for the first quarter ended March 29, 2025. First Quarter 2025 Highlights Revenue of $668.2 million Income from operations of $48.8 million Net income of $21.2 million and net income per common share, diluted of $0.18 Non-GAAP financial measures Adjusted EBITDA (1) of $83.6 million Adjusted net income (1) of $27.0 million and adjusted net income per common share, diluted (1) of $0.23 “Our first quarter’s results came in as anticipated, with moderate growth in revenue but our operating execution drove stronger net income and adjusted EBITDA growth year over year,” said Paul Thompson, KinderCare’s Chief Executive Officer. “In a quarter with delayed enrollment decisioning across the industry, KinderCare performed well. As we move forward in 2025, we will continue to drive operating leverage and advance our growth initiatives to drive performance in future quarters." Mr. Thompson continued, “We grew our footprint during the quarter by expanding into Idaho, our 41st state. We opened new centers for Crème School and expanded partnerships with employers within our existing markets. I’m proud of our team’s ability to execute against our promise of bringing high quality early childhood education and care to even more hardworking families across the country.” First Quarter 2025 Financial Results Total revenue increased $13.6 million, or 2.1%, to $668.2 million for the first quarter of 2025 as compared to $654.7 million for the first quarter of 2024. Revenue from early childhood education centers increased by $9.7 million, or 1.6%, for the first quarter of 2025 as compared to the first quarter of 2024, of which approximately 2% was from higher tuition rates, partially offset by slightly lower enrollment. Revenue from before- and after-school sites increased by $3.9 million, or 7.8%, for the first quarter of 2025 as compared to the first quarter of 2024 primarily due to opening new sites. Income from operations increased $15.2 million, or 45.3%, to $48.8 million for the first quarter of 2025 as compared to $33.6 million for the first quarter of 2024. The increase primarily relates to a decrease in stock-based compensation expense and bonus expense of $16.9 million driven by the first quarter of 2024 distribution to profit interest unit (“PIU”) holders and a related bonus to restricted stock unit (“RSU”) and stock option holders. The increase in income from operations was also due to the $13.6 million in revenue growth noted above, which was partially offset by $10.7 million lower cost reimbursements from government assistance recognized in the first quarter of 2025, primarily related to the conclusion of certain COVID-19 Related Stimulus funding. Net income was $21.2 million for the first quarter of 2025 compared to a net loss of $1.8 million for the first quarter of 2024. The $22.9 million change was driven by the impact to income from operations noted above and a $16.3 million decrease in interest expense primarily driven by 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 initial public offering (“IPO”). Net income per common share, diluted was $0.18 for the first quarter of 2025 compared to net loss per common share, diluted of $0.02 for the first quarter of 2024. For the first quarter of 2025, adjusted EBITDA (1) increased $9.1 million, or 12.2%, to $83.6 million, and adjusted net income (1) increased $16.7 million, to $27.0 million, from the first quarter of 2024. Adjusted net income per common share, diluted (1) was $0.23 for the first quarter of 2025. As of March 29, 2025, the Company operated 1,582 early childhood education centers and 1,038 before- and after-school sites. Balance Sheet and Liquidity As of March 29, 2025, the Company had $131.3 million of cash and cash equivalents and $207.4 million of available borrowing capacity under the revolving credit facility, after giving effect to the outstanding letters of credit of $55.1 million. During the fiscal year ended March 29, 2025, the Company generated $98.4 million in cash provided by operating activities and made net investments totaling $28.4 million, which include $23.4 million in property and equipment and $6.1 million in acquisitions. Additionally, during the fiscal year ended March 29, 2025, the Company utilized $1.1 million in cash for financing activities. 2025 Outlook The Company maintains its guidance for full year 2025 consisting of revenue to be approximately $2.75 billion to $2.85 billion, adjusted EBITDA to be approximately $310 million to $325 million (2), and adjusted net income per common share, diluted to be approximately $0.75 to $0.85 (2). Conference Call and Webcast Management will host a conference call today at 5:00 pm ET to discuss the financial results for the first quarter of 2025. The conference call will be webcast live via our investor relations website https://investors.kindercare.com. A replay of the webcast will be made available on our investor relations website shortly after the event concludes. Interested parties may also access the conference call live over the phone by dialing 1-646-564-2877 (Toll-free) or 1-289-819-1520 (Toll) and referencing conference ID 52459. Participants are asked to dial in a few minutes prior to the call to register. 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 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 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 its other filings with the SEC. KinderCare does not undertake 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 (loss) or net income (loss) 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: In neighborhoods, with KinderCare® Learning Centers that offer early learning programs for children six weeks to 12 years old; Crème School®, which offers a premium early education experience using a variety of enrichment classrooms; and In local schools, with Champions® before and after-school programs. 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 2,500 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 (loss), 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 (loss) and net income (loss) per common share, respectively, for the periods presented: Explanation of add backs:

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