KLC · KinderCare Learning Companies, Inc.

KinderCare's first quarter 2026 results reflect a mixed performance. Revenue edged up 0.6% to $672.5 million, driven by strong growth in Champions before- and after-school programs (+17.1%) and B2B, which offset a 0.8% decline in early childhood education center revenue due to lower enrollment (-3.0%) partially offset by higher tuition (+2.2%). However, the bottom line was heavily impacted by a $290 million increase in impairment losses, primarily from goodwill impairment triggered by a decline in stock price, as well as higher impairment of long-lived assets from underperforming centers and closures. This led to a loss from operations of $272.1 million versus income of $48.8 million a year ago. Net loss was $289.8 million, or $2.45 per diluted share, compared to net income of $21.2 million, or $0.18 per share, in Q1 2025. On an adjusted basis, EBITDA fell 37.7% to $52.1 million, and adjusted EPS was $0.04, down from $0.23. Management highlighted early progress on marketing and execution initiatives, with increased family engagement and inquiry improvements. Despite enrollment still below prior-year levels, the company raised its full-year 2026 outlook: revenue expected between $2.7 billion and $2.75 billion, adjusted EBITDA between $215 million and $235 million, and adjusted EPS between $0.15 and $0.25. The balance sheet remains liquid with $132.9 million cash and $189.7 million available under the revolving credit facility. Operating cash flow was $31.1 million, with capital expenditures of $30.0 million. The guidance raise suggests management expects operational improvements to gain momentum in the second half of the year.