KinderCare Learning Companies (KLC) Q1 2026 earnings summary

Executive summary

• Revenue grew 0.6% year-over-year to $672.5 million in Q1 2026, driven by strength in Champions and B2B segments, but offset by lower enrollment in early childhood education centers.

• Net loss was $289.8 million, compared to net income of $21.2 million in the prior year, primarily due to significant non-cash goodwill and asset impairment charges.

• Adjusted EBITDA was $52.1 million, down 37.7% year-over-year; adjusted net income was $4.2 million.

• Early progress on marketing and execution initiatives led to increased family engagement and improved inquiries.

• Expansion strategy continued, with total centers and sites increasing 5.5% year-over-year to 2,765.

Financial highlights

• Q1 revenue was $672.5 million, up from $668.2 million in the prior year.

• Same-center revenue decreased by $7 million due to lower enrollment, partially offset by new centers and higher tuition rates.

• Adjusted EBITDA margin was 7.7%, down from 12.5% year-over-year.

• Net loss per diluted share was $2.45, versus net income per share of $0.18 in Q1 2025.

• Free cash flow for the quarter was $1.1 million; cash provided by operating activities was $31.1 million.

Outlook and guidance

• Full-year 2026 revenue expected between $2.7 billion and $2.75 billion.

• Adjusted EBITDA guidance raised to $215–$235 million; adjusted EPS to $0.15–$0.25.

• Q2 revenue expected between $690–$700 million; adjusted EBITDA between $63–$67 million.

• CapEx to be about 5% of revenue; free cash flow projected at $35–$40 million for the year.

• Management anticipates stronger performance in the second half of the year as improvement initiatives gain traction.