First Quarter Highlighted by Early Progress on Marketing and Execution Initiatives, and Strength in Champions and B2B Management Raises Full-Year Outlook.
LAKE OSWEGO, Ore.--(BUSINESS WIRE)--May 14, 2026--
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 first quarter ended April 4, 2026.
First Quarter 2026 Highlights
-- Revenue of $672.5 million
-- Loss from operations of $272.1 million
-- Net loss of $289.8 million and net loss per common share, diluted of
$2.45
Non-GAAP financial measures
-- Adjusted EBITDA (1) of $52.1 million
-- Adjusted net income (1) of $4.2 million and adjusted net income per
common share, diluted (1) of $0.04
"We delivered a solid start to the year, driven by continued strength in our Champions and B2B businesses, the dedication of our teams, and early traction from the actions we've taken," said Tom Wyatt, KinderCare's Chief Executive Officer. "We're seeing increased family engagement and encouraging inquiry improvements as we refine our marketing approach and strengthen execution at the center level."
Mr. Wyatt added, "Based on our first quarter performance, we are raising our adjusted EBITDA and adjusted EPS outlook for the year. While enrollment remains below prior-year levels, we are focused on the actions needed to drive consistent improvement. We believe these efforts position us to deliver stronger performance in the second half and build momentum over the long term."
First Quarter 2026 Financial Results
Total revenue increased $4.3 million, or 0.6%, to $672.5 million for the first quarter of 2026 as compared to $668.2 million for the first quarter of 2025.
Revenue from early childhood education centers decreased by $4.8 million, or 0.8%, for the first quarter of 2026 as compared to the first quarter of 2025, of which 3.0% was from lower enrollment, partially offset by 2.2% from higher tuition rates.
Revenue from before- and after-school sites increased by $9.1 million, or 17.1%, for the first quarter of 2026 as compared to the first quarter of 2025 primarily due to opening new sites and higher tuition rates.
Loss from operations was $272.1 million for the first quarter of 2026 compared to income from operations of $48.8 million for the first quarter of 2025, a change of $320.9 million. The change was driven by a $290.0 million increase in impairment losses primarily due to the deterioration in our market capitalization from the decline in our stock price in the first quarter of 2026 triggering goodwill impairment, as well as more centers with lower operational performance and centers identified for closure resulting in higher impairment of long-lived assets. Additionally, the change was attributable to an increase in cost of services of $34.7 million, primarily as a result of higher rent and personnel costs, as well as increased food, supplies, utilities and janitorial costs, partially due to operating more centers and sites, combined with increased marketing spend. These increases were partially offset by the $4.3 million in revenue growth noted above.
Net loss was $289.8 million for the first quarter of 2026, compared to net income of $21.2 million in the first quarter of 2025, a change of $311.0 million. The change was primarily driven by the loss from operations noted above, partially offset by an $8.4 million decrease in income taxes, resulting in an income tax benefit in the first quarter of 2026 compared to income tax expense in the comparative period. Net loss per common share, diluted was $2.45 for the first quarter of 2026 compared to net income per common share, diluted of $0.18 for the first quarter of 2025.
For the first quarter of 2026, adjusted EBITDA (1) decreased $31.5 million, or 37.7%, to $52.1 million, and adjusted net income (1) decreased $22.8 million, to $4.2 million, from the first quarter of 2025. Adjusted net income per common share, diluted (1) was $0.04 for the first quarter of 2026 compared to $0.23 for the first quarter of 2025.
As of April 4, 2026, the Company operated 1,606 early childhood education centers and 1,159 before- and after-school sites.
Balance Sheet and Liquidity
As of April 4, 2026, the Company had $132.9 million of cash and cash equivalents and $189.7 million of available borrowing capacity under the revolving credit facility, after giving effect to the outstanding letters of credit of $72.8 million. Total debt under the first lien term loan facility, net of debt issuance costs, was $926.6 million, as of April 4, 2026.
During the three months ended April 4, 2026, the Company generated $31.1 million in cash provided by operating activities and made net investments totaling $28.7 million, which included $30.0 million in property and equipment. Additionally, during the three months ended April 4, 2026, the Company utilized $2.8 million in cash for financing activities.
2026 Outlook
The Company is updating its guidance ranges for the full year 2026. Revenue is expected to be approximately $2.7 billion to $2.75 billion and adjusted EBITDA is now expected to be approximately $215 million to $235 million (2) . Adjusted net income per common share, diluted is now expected to be approximately $0.15 to $0.25 (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 2026. 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 1-800-461-5787 (Toll-free) or 1-585-542-9983 (Toll) and referencing conference ID 920571642. Participants are asked to dial in a few minutes prior to the call to register.
A supplemental presentation of first quarter results will be available at https://investors.kindercare.com.
Footnote References
(1) Adjusted EBITDA, adjusted net income, and adjusted net income per
common share are non-GAAP financial measures. Reconciliations of
these non-GAAP financial measures to the comparable GAAP measures
are included in the tables at the end of this press release.
(2) Future period non-GAAP outlook, including adjusted EBITDA and
adjusted net income per common share, diluted, includes
adjustments for items not indicative of our core operations,
which may include, without limitation, items described in the
below section titled "Use of Non-GAAP Financial Measures" and in
the accompanying tables. Such adjustments may be affected by
changes in ongoing assumptions and judgments, as well as
nonrecurring, unusual, or unanticipated charges, expenses or
gains, or other items that may not directly correlate to the
underlying performance of our business operations. The exact
amounts of these adjustments are not currently determinable but
may be significant. It is therefore not practicable to provide
the comparable GAAP measures or reconcile this non-GAAP outlook
to the most comparable GAAP measures.
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 attract and retain families in our centers, schools and programs, and to attract and retain employers that contract with us for family care benefits for their workforce; 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 business may be affected by delays, disruptions or reductions in federally funded childcare subsidies or tuition reimbursements or from reductions in certain federal, state and local government programs; 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; the negative impact of impairment of goodwill, other intangible assets or long-lived assets on our current and potentially future results of operations; our ability to address
adverse publicity; our ability to acquire additional capital; risks associated with acquired centers; our substantial indebtedness could adversely affect 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 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; we have a material weakness in our internal control over financial reporting; the occurrence of natural disasters, environmental contamination or other highly disruptive events; the interests of Partners Group, a controlling stockholder, may conflict with the interests of our other stockholders; and other risks and uncertainties set forth under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended January 3, 2026 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 (loss) income or net (loss) 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$(TM)$
KinderCare Learning Companies, Inc. (NYSE: KLC) is 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$(R)$ Learning Centers that offer early learning programs for children six weeks to 12 years old; -- Crème School(R), which offers a premium early education experience using a variety of enrichment classrooms; and -- In local schools, with Champions(R) 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 2,700 early learning centers and sites.
KinderCare Learning Companies, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
April 4, 2026 January 3, 2026
--------------- -------------------
Assets
Current assets:
Cash and cash equivalents $ 132,874 $ 133,205
Accounts receivable, net 106,782 118,523
Prepaid expenses and other
current assets 104,336 106,291
----------- -------------
Total current assets 343,992 358,019
Property and equipment, net 403,871 417,789
Goodwill 691,900 964,829
Intangible assets, net 418,848 420,922
Operating lease right-of-use
assets 1,501,223 1,500,786
Other assets 81,809 85,545
----------- -------------
Total assets $ 3,441,643 $ 3,747,890
=========== =============
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 154,167 $ 163,312
Current portion of long-term
debt 9,620 9,620
Operating lease
liabilities--current 149,753 146,594
Deferred revenue 50,399 49,577
Other current liabilities 104,078 115,762
----------- -------------
Total current liabilities 468,017 484,865
Long-term debt, net 916,993 917,925
Operating lease
liabilities--long-term 1,451,863 1,447,524
Deferred income taxes, net 35,702 35,454
Other long-term liabilities 97,975 106,860
----------- -------------
Total liabilities 2,970,550 2,992,628
----------- -------------
Total shareholders' equity 471,093 755,262
----------- -------------
Total liabilities and
shareholders' equity $ 3,441,643 $ 3,747,890
=========== =============
KinderCare Learning Companies, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data and percentages)
Three Months Ended
--------------------------------------
April 4, 2026 March 29, 2025
------------------- -----------------
Revenue $ 672,522 $668,244
Costs and expenses:
Cost of services
(excluding depreciation
and impairment) 550,923 81.9% 516,188 77.2%
Depreciation and
amortization 31,077 4.6% 29,977 4.5%
Selling, general, and
administrative expenses 71,129 10.6% 71,727 10.7%
Impairment losses 291,475 43.3% 1,510 0.2%
-------- ------- ------- ------
Total costs and
expenses 944,604 140.5% 619,402 92.7%
-------- ------- ------- ------
(Loss) income from
operations (272,082) (40.5%) 48,842 7.3%
Interest expense 18,220 2.7% 20,108 3.0%
Interest income (842) (0.1%) (659) (0.1%)
Other expense, net 907 0.1% 398 0.1%
-------- ------- ------- ------
(Loss) income
before income
taxes (290,367) (43.2%) 28,995 4.3%
Income tax (benefit) expense (535) (0.1%) 7,838 1.2%
-------- ------- ------- ------
Net (loss) income $(289,832) (43.1%) $ 21,157 3.2%
======== ======= ======= ======
Net (loss) income per
common share:
Basic $ (2.45) $ 0.18
Diluted $ (2.45) $ 0.18
Weighted average number of
common shares outstanding:
Basic 118,498 118,239
Diluted 118,498 118,321
KinderCare Learning Companies, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Three Months Ended
-----------------------------------
April 4, 2026 March 29, 2025
--------------- ------------------
Operating activities:
Net (loss) income $ (289,832) $ 21,157
Adjustments to reconcile net
(loss) income to cash provided
by operating activities:
Depreciation and amortization 31,077 29,977
Impairment losses 291,475 1,510
Change in deferred taxes (883) (2,339)
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