KinderCare Learning Companies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter ended October 3, 2026, was $665.3 million, a decrease of $11.5 million (1.7%) compared to $676.8 million in the third quarter of 2025.
• Revenue from early childhood education centers decreased $19.6 million (3.1%) year-over-year, driven by a 5.9% decline in enrollment partially offset by a 2.8% increase in tuition rates.
• Revenue from before- and after-school sites increased $8.2 million (16.4%) year-over-year, primarily due to increased enrollment and new site openings.
• Loss from operations was $75.5 million for the third quarter of 2026, a decline of $101.8 million compared to income of $26.3 million in the prior year period.
• Net loss was $85.0 million for the third quarter of 2026, compared to net income of $4.6 million in the third quarter of 2025; diluted net loss per share was $0.71 versus $0.04 in the prior year.
• Impairment losses totaled $86.755 million for the quarter, an increase of $83.4 million year-over-year, driven by goodwill impairment due to market capitalization decline and impairment of long-lived assets and indefinite-lived intangibles.
• Adjusted EBITDA was $42.5 million for the third quarter of 2026, a decrease of $23.9 million (35.9%) compared to $66.4 million in the third quarter of 2025.
• Adjusted net loss was $3.0 million for the third quarter of 2026, compared to adjusted net income of $15.3 million in the prior year; adjusted diluted net loss per share was $0.03 versus $0.13.
• Cost of services (excluding depreciation and impairment) increased $8.1 million year-over-year, primarily due to higher rent, insurance, janitorial, utilities, and food costs, partially offset by lower personnel costs.
• As of October 3, 2026, the company operated 1,556 early childhood education centers and 1,208 before- and after-school sites.
• Cash and cash equivalents were $143.4 million as of October 3, 2026, with $187.7 million available borrowing capacity under the revolving credit facility after $74.8 million in letters of credit.
• Cash provided by operating activities for the nine months ended October 3, 2026, was $109.8 million, down from $234.3 million in the prior year period.
• Net investments totaled $91.3 million for the nine months ended October 3, 2026, primarily from purchases of property and equipment.

Guidance and Future Outlook:

• The company updated its full-year 2026 revenue guidance to approximately $2.64 billion to $2.66 billion.
• Full-year 2026 adjusted EBITDA guidance is now expected to be approximately $190 million to $195 million.
• Full-year 2026 adjusted net income per common share, diluted, is expected to be approximately $0.02 to $0.04.

Business Segments and Product Lines:

• The company continues an ongoing center optimization initiative, closing 20 early childhood education centers during the third quarter of 2026.
• Enrollment at KinderCare Learning Centers fell short of expectations in the third quarter, though new enrollments have outpaced the same period last year since the end of back-to-school.
• The Champions before- and after-school program reported strong results.
• Progress was noted at the Crème brand, and opportunities were identified in KinderCare for Employers.
• The company operates in 42 states and the District of Columbia, offering early learning programs for children six weeks to 12 years old, premium early education experiences, and school-age programs.

Market and Competitive Landscape:

• Management noted that families face tough financial choices, prompting a focus on demonstrating the value of high-quality education and care across all brands.
• Impairment of long-lived assets was attributed to reduced operating performance at certain centers due to changing demographics and current macroeconomic conditions.
• The company faces risks related to shifts in workforce demographics, economic conditions, and unemployment rates.

Risks and Challenges:

• Significant impairment losses were recognized due to the deterioration of market capitalization from a decline in stock price and the closure of underperforming centers.
• The company faces challenges in hiring and retaining qualified teachers and management.
• Risks include potential adverse impacts from prolonged government shutdowns, changes in federal child care spending policies, and public health crises.
• The company relies on government support for childcare, including grants and reimbursements, which could change.
• Future results are subject to risks regarding the ability to address changes in demand for child care and workplace solutions.

Management Commentary and Tone:

• Tom Wyatt, Chairman and CEO, stated that while third-quarter enrollment fell short of expectations, recent improvements reinforce confidence in operational changes.
• Management highlighted strengthened field leadership and a focus on welcoming and supporting families.
• Wyatt emphasized an unwavering focus on reaching more children and families, investing in people and classrooms, and making a lasting difference in communities.
• The tone acknowledges current financial pressures but expresses confidence in the foundation built for 2027 through Champions, Crème, and employer solutions.

Other Key Points:

• The company closed 20 early childhood education centers during the third quarter as part of its center optimization initiative.
• Goodwill impairment of $71.4 million was recognized in the third quarter of 2026, driven by the decline in stock price.
• Indefinite-lived intangible asset impairment of $3.7 million was recognized due to the impairment of certain legacy trade names and trademarks.
• The company will host a conference call on November 12, 2026, at 5:00 pm ET to discuss results.
• Supplemental presentations and webcast replays are available on the company's investor relations website.