KinderCare (NYSE: KLC) takes $291M charge but raises 2026 outlook

Rhea-AI Filing Summary

KinderCare Learning Companies reported first quarter 2026 revenue of $672.5 million, up slightly from $668.2 million a year earlier, with growth in its Champions before- and after-school programs offsetting softer early childhood center revenue. The company posted a loss from operations of $272.1 million versus prior-year operating income of $48.8 million, driven mainly by $291.5 million of impairment losses tied to lower market capitalization, underperforming centers, and centers slated for closure. Net loss was $289.8 million, or $2.45 per diluted share, compared with net income of $21.2 million, or $0.18 per share, in the first quarter of 2025. On a non-GAAP basis, adjusted EBITDA fell to $52.1 million and adjusted diluted EPS to $0.04, reflecting higher rent, personnel, and operating costs alongside increased marketing investment. As of April 4, 2026, KinderCare operated 1,606 early childhood education centers and 1,159 before- and after-school sites, held $132.9 million in cash and cash equivalents, and had $926.6 million of first-lien term loan debt outstanding. Management raised its full-year 2026 outlook, now expecting revenue of $2.7–$2.75 billion, adjusted EBITDA of $215–$235 million, and adjusted diluted EPS of $0.15–$0.25, citing early progress on marketing and execution initiatives despite enrollment remaining below prior-year levels.

Positive

• None.

Negative

• Significant Q1 2026 impairment losses of $291.5 million (including $273.5 million of goodwill impairment) turned KinderCare’s results from prior-year profitability to a GAAP net loss of $289.8 million and materially reduced reported equity.

Insights

Equity analyst

Large non-cash impairments drove a GAAP loss, while KinderCare still raised its 2026 adjusted outlook.

KinderCare generated Q1 2026 revenue of $672.5 million, up 0.6% year over year, as early childhood centers softened but before- and after-school revenue grew 17.1%. Core demand in its Champions and B2B businesses appears comparatively stronger than in traditional centers.

The company swung to a net loss of $289.8 million, largely due to $291.5 million of impairment losses, including $273.5 million of goodwill impairment triggered by a decline in market capitalization and weaker performance at certain centers. Adjusted EBITDA dropped 37.7% to $52.1 million, showing underlying margin pressure from higher rent, labor, and operating costs alongside elevated marketing spend.

Despite weaker adjusted results, management raised full-year 2026 guidance to revenue of $2.7–$2.75 billion, adjusted EBITDA of $215–$235 million, and adjusted diluted EPS of $0.15–$0.25. Actual performance versus this outlook will depend on improving enrollment, executing occupancy initiatives, and managing costs through the rest of 2026.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Revenue: $672.5 million Net (loss) income: -$289.8 million Impairment losses: $291.5 million +5 more

8 metrics

Revenue $672.5 million Three months ended April 4, 2026

Net (loss) income -$289.8 million Three months ended April 4, 2026

Impairment losses $291.5 million Three months ended April 4, 2026

Adjusted EBITDA $52.1 million Q1 2026 non-GAAP

Adjusted net income $4.2 million Q1 2026 non-GAAP

2026 revenue outlook $2.7–$2.75 billion Full-year 2026 guidance

Cash and cash equivalents $132.9 million As of April 4, 2026

First-lien term loan debt $926.6 million As of April 4, 2026, net of issuance costs

Key Terms

goodwill impairment, Adjusted EBITDA, non-GAAP financial measures, operating lease right-of-use assets, +1 more

5 terms

goodwill impairment financial

"Goodwill impairment recognized during the three months ended April 4, 2026 was $273.5 million and was driven by the further deterioration in our market capitalization"

Goodwill impairment occurs when a company’s valued reputation or brand strength, known as goodwill, is found to be worth less than previously recorded on its financial statements. This usually happens when the company's performance declines or market conditions change, signaling that the expected benefits from acquisitions or brand value are no longer as strong. It matters to investors because it can indicate that a company's assets are less valuable than initially thought, potentially affecting its overall financial health.

Adjusted EBITDA financial

"Adjusted EBITDA (1) of $52.1 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

non-GAAP financial measures financial

"Adjusted EBITDA, adjusted net income, and adjusted net income per common share are non-GAAP financial measures."

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

operating lease right-of-use assets financial

"Operating lease right-of-use assets | | | 1,501,223"

An operating lease right-of-use (ROU) asset is an accounting entry that shows the value of a leased item you have the legal right to use—like a building, vehicle, or equipment—recorded on a company’s balance sheet along with the corresponding lease obligation. Investors care because it adds to reported assets and liabilities, changing measures like leverage and return on assets much like bringing a long-term rental onto the company’s financial snapshot, which can affect credit terms and valuation.

material weakness in our internal control over financial reporting financial

"we have a material weakness in our internal control over financial reporting; the occurrence of natural disasters"

Earnings Snapshot

Revenue: $672.5 million · Guidance included

Q1 2026

Revenue $672.5 million +0.6% year over year

Net (loss) income -$289.8 million from $21.2 million net income in Q1 2025

Adjusted EBITDA $52.1 million -37.7% year over year

Adjusted diluted EPS $0.04 from $0.23 in Q1 2025

Guidance

For full-year 2026, KinderCare expects revenue of $2.7–$2.75 billion, adjusted EBITDA of $215–$235 million, and adjusted net income per diluted share of $0.15–$0.25.

Understanding 8-K Material Events →

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 14, 2026

KinderCare Learning Companies, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware			001-42367	87-1653366
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
5005 Meadows Road
Lake Oswego, Oregon				97035
(Address of Principal Executive Offices)				(Zip Code)

Registrant’s Telephone Number, Including Area Code: (503) 872-1300

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		KLC		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On May 14, 2026, KinderCare Learning Companies, Inc. (the “Company”) issued a press release announcing its results of operations for the first quarter ended April 4, 2026. A copy of the press release is furnished as Exhibit 99.1.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference into the Company's filings with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit		Description
99.1		Press Release dated May 14, 2026
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			KinderCare Learning Companies, Inc.
Date:	May 14, 2026	By:	/s/ Anthony Amandi
		Name: Title:	Anthony Amandi Chief Financial Officer

Exhibit 99.1

KinderCare Reports First Quarter 2026 Financial Results

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. (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™

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® Learning Centers that offer early learning programs for children six weeks to 12 years old;

•Crème School®, which offers a premium early education experience using a variety of enrichment classrooms; and

•In local schools, with Champions® 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.

Contacts:

Investors
Investor Relations
investors@kindercare.com

Media
Media Relations
media@kindercare.com

Source: KinderCare

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	)
Amortization of debt issuance costs			1,473				1,569
Stock-based compensation			2,508				3,848
Realized and unrealized losses from investments held in deferred    compensation asset trusts			1,292				671
Gain on disposal of property and equipment			—				(167	)
Changes in assets and liabilities, net of effects of acquisitions			(6,052	)			42,218
Cash provided by operating activities			31,058				98,444
Investing activities:
Purchases of property and equipment			(29,986	)			(23,360	)
Payments for acquisitions, net of cash acquired			(540	)			(6,071	)
Proceeds from the disposal of property and equipment			—				167
Investments in deferred compensation asset trusts			(1,977	)			(2,179	)
Proceeds from deferred compensation asset trust redemptions			3,852				3,055
Cash used in investing activities			(28,651	)			(28,388	)
Financing activities:
Payments of deferred offering costs			—				(275	)
Principal payments of long-term debt			(2,405	)			—
Payments of debt issuance costs			—				(181	)
Repayments of promissory notes			(78	)			(81	)
Payments of financing lease obligations			(252	)			(336	)
Tax payments related to net settlement of restricted stock units			(97	)			(224	)
Cash used in financing activities			(2,832	)			(1,097	)
Net change in cash, cash equivalents, and restricted cash			(425	)			68,959
Cash, cash equivalents, and restricted cash at beginning of period			133,299				62,430
Cash, cash equivalents, and restricted cash at end of period		$	132,874			$	131,389

KinderCare Learning Companies, Inc.

Consolidated Non-GAAP Measures (Unaudited)

(In thousands, except per share data)

The following table shows EBIT, EBITDA, and adjusted EBITDA for the periods presented, and the reconciliation to its most comparable GAAP measure, net (loss) income, for the periods presented:

		Three Months Ended
		April 4,				March 29,
		2026				2025
Net (loss) income		$	(289,832	)		$	21,157
Add back:
Interest expense			18,220				20,108
Interest income			(842	)			(659	)
Income tax (benefit) expense			(535	)			7,838
EBIT		$	(272,989	)		$	48,444
Add back:
Depreciation and amortization			31,077				29,977
EBITDA		$	(241,912	)		$	78,421
Add back:
Impairment losses (1)			291,475				1,510
Stock-based compensation (2)			2,508				4,073
COVID-19 Related Stimulus, net (3)			—				(663	)
Other costs (4)			—				210
Adjusted EBITDA		$	52,071			$	83,551

The following table shows adjusted net income and adjusted net income per common share for the periods presented and the reconciliation to the most comparable GAAP measure, net (loss) income and net (loss) income per common share, respectively, for the periods presented:

		Three Months Ended
		April 4,				March 29,
		2026				2025
Net (loss) income		$	(289,832	)		$	21,157
Income tax (benefit) expense			(535	)			7,838
Net (loss) income before income tax		$	(290,367	)		$	28,995
Add back:
Amortization of intangible assets			2,074				2,309
Impairment losses (1)			291,475				1,510
Stock-based compensation (2)			2,508				4,073
COVID-19 Related Stimulus, net (3)			—				(663	)
Other costs (4)			—				210
Adjusted income before income tax			5,690				36,434
Adjusted income tax expense (5)			1,469				9,404
Adjusted net income		$	4,221			$	27,030
Net (loss) income per common share:
Basic		$	(2.45	)		$	0.18
Diluted		$	(2.45	)		$	0.18
Adjusted net income per common share:
Basic		$	0.04			$	0.23
Diluted		$	0.04			$	0.23
Weighted average number of common shares outstanding:
Basic			118,498				118,239
Diluted			118,498				118,321

Explanation of add backs:

(1)Represents impairment charges for goodwill and long-lived assets. Goodwill impairment recognized during the three months ended April 4, 2026 was $273.5 million and was driven by the further deterioration in our market capitalization from a continued decline in our stock price. Impairments of long-lived assets for the periods presented was a result of reduced operating performance at certain centers due to the impact of changing demographics in certain locations in which we operate and current macroeconomic conditions on our overall operations, as well as centers closed or identified for closure.

(2)Represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification ("ASC") 718, Compensation: Stock Compensation.

(3)Includes expense reimbursements and revenue arising from the COVID-19 pandemic, net of pass-through expenses incurred as a result of certain grant requirements. We recognized $0.7 million during the three months ended March 29, 2025, in funding for reimbursement of center operating expenses in cost of services (excluding depreciation and impairment).

(4)Includes certain professional fees incurred for both contemplated and completed debt and equity transactions. For the three months ended March 29, 2025, other costs include $0.2 million in costs related to our IPO. These costs represent items management believes are not indicative of core operating performance.

(5)Includes the tax effect of the non-GAAP adjustments, calculated using the appropriate federal and state statutory tax rate and the applicable tax treatment for each adjustment. The non-GAAP tax rate was 25.8% for the three months ended April 4, 2026 and March 29, 2025. Our statutory rate is re-evaluated at least annually.

FAQ

How did KinderCare (KLC) perform financially in Q1 2026?

KinderCare reported Q1 2026 revenue of $672.5 million, up 0.6% year over year. However, a large impairment charge led to a net loss of $289.8 million, compared with net income of $21.2 million in the first quarter of 2025.

What caused KinderCare’s large Q1 2026 net loss?

The Q1 2026 net loss of $289.8 million was mainly driven by $291.5 million of impairment losses. These included $273.5 million of goodwill impairment tied to a decline in market capitalization and weaker performance or closures at certain education centers.

How did KinderCare’s adjusted EBITDA and EPS change in Q1 2026?

Adjusted EBITDA fell to $52.1 million in Q1 2026, down 37.7% from $83.6 million a year earlier. Adjusted diluted EPS declined to $0.04 from $0.23, reflecting higher operating costs and impairment-related impacts excluded from GAAP earnings.

What is KinderCare’s 2026 financial outlook after Q1 results?

KinderCare now expects full-year 2026 revenue of $2.7–$2.75 billion, adjusted EBITDA of $215–$235 million, and adjusted diluted EPS of $0.15–$0.25, reflecting raised guidance based on early progress in marketing and operational initiatives.

How strong is KinderCare’s balance sheet and liquidity as of April 4, 2026?

As of April 4, 2026, KinderCare held $132.9 million in cash and cash equivalents and had $189.7 million of available borrowing capacity. Total first-lien term loan debt was $926.6 million, and the company generated $31.1 million in operating cash flow during the quarter.

How many centers and sites does KinderCare operate after Q1 2026?

As of April 4, 2026, KinderCare operated 1,606 early childhood education centers and 1,159 before- and after-school sites. These facilities support the company’s early childhood education and Champions programs across multiple states and customer segments.

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