KinderCare Learning Companies (KLC) investor relations material

Executive summary

• Q2 2026 revenue was $697.5 million, down 0.4% year-over-year, with a net loss of $8.8 million compared to net income of $38.6 million in Q2 2025, driven by lower enrollment, higher costs, and significant impairment charges.

• Adjusted EBITDA fell 23.6% to $63.0 million, and adjusted net income dropped to $9.9 million from $26.0 million year-over-year.

• The company closed 49 centers in Q2 as part of ongoing footprint optimization, with total closures expected to reach 80–85 for the year.

• Enrichment programs (Learning Adventures) grew 94% year-over-year, and the B2B Champions segment achieved 13% growth, marking four consecutive quarters of double-digit gains.

• Crème de la Crème summer camp enrollments increased 26% year-over-year, with continued expansion into new markets.

Financial highlights

• Q2 2026 revenue: $697.5 million (down 0.4% YoY); same-center revenue declined 2.2% due to 4.0% lower enrollment and $11 million impact from closures.

• Adjusted EBITDA for Q2 2026 was $63.0 million, down from $82 million a year ago; net loss was $8.8 million.

• Adjusted net income was $9.9 million and adjusted EPS was $0.08, compared to $26 million and $0.22 in the prior year.

• Gross margin for Q2 2026 was 18.7%, down from 25.8% in Q2 2025; operating margin was 0.3%.

• Free cash flow for the first six months of FY26 was $46.5 million, down from $75.8 million in the prior year period.

Outlook and guidance

• Full-year 2026 revenue expected between $2.66 billion and $2.7 billion; adjusted EBITDA between $200 million and $220 million; adjusted EPS between $0.05 and $0.15.

• Q3 revenue expected between $660 million and $680 million, adjusted EBITDA between $44 million and $48 million, and occupancy in the mid-60s.

• Tuition contribution to revenue growth revised down to 2.5% due to slower-than-expected state subsidy increases.

• Consolidations expected to represent a 1.5% headwind to revenue growth for the year.

• CapEx for the year projected at $120 million-$130 million; free cash flow expected to be less than $10 million due to elevated cash costs from optimization.