KinderCare Reports $668.2 Million Revenue and $21.2 Million Net Income for Q1 2025

KinderCare Learning Companies, Inc. reported a revenue of $668.2 million for the three months ended March 29, 2025, marking a 2.1% increase from $654.7 million in the same period last year. The company achieved a net income of $21.2 million, a significant turnaround from a net loss of $1.8 million in the prior year. This improvement in profitability was attributed to a combination of higher revenues from early childhood education centers and reduced interest expenses, which fell by 44.8% to $20.1 million due to lower outstanding principal and interest rates following the company's initial public offering (IPO) in October 2024.

In terms of operational metrics, KinderCare expanded its footprint, operating 1,582 early childhood education centers and 1,038 before- and after-school sites as of March 29, 2025. This represents an increase of 19 sites compared to the previous year, driven by the opening of new centers and acquisitions. The average weekly full-time enrollment (FTEs) in early childhood education decreased slightly by 0.8% to 144,076, reflecting lower enrollment at same-centers and closed centers. However, same-center revenue increased by 1.4%, indicating stable performance in established locations.

The company made strategic moves during the quarter, acquiring five early childhood education centers for a total cash consideration of $6.1 million, which contributed to its growth strategy of expanding service offerings. Additionally, KinderCare's operational efficiency was enhanced by a decrease in selling, general, and administrative expenses, which fell by 20.7% to $71.7 million, primarily due to lower stock-based compensation expenses compared to the previous year.

Looking ahead, KinderCare aims to continue its growth trajectory by improving occupancy rates and implementing regular tuition increases to support reinvestment in its centers. The company is also focused on expanding its service offerings and geographic footprint through both greenfield developments and strategic acquisitions. Despite the positive outlook, management acknowledged potential challenges, including fluctuations in demand for childcare services and the impact of government funding on operations. The company remains committed to addressing these challenges while leveraging its market position to advocate for continued support for the early childhood education sector.