KinderCare reported third‑quarter 2025 results with total revenue of $676.8 million, a 0.8% year‑over‑year increase, but the figure fell short of the consensus estimate of $682.6 million. Adjusted earnings per share came in at $0.13, beating the $0.12 estimate by $0.01, while operating income dropped 51.6% to $26.3 million and net income fell 67.4% to $4.6 million. Adjusted EBITDA declined 7.0% to $66.4 million, reflecting the impact of higher personnel costs and the end of pandemic‑era government assistance.
Segment performance showed that early‑childhood education centers generated $615.0 million, up 0.1% YoY, driven by modest tuition rate increases that were largely offset by a decline in enrollment. Champions before‑ and after‑school sites posted $61.8 million in revenue, up 10.7% YoY, largely due to the opening of new sites and stronger enrollment in that segment.
The sharp decline in operating income is largely attributable to higher personnel expenses and reduced government subsidies, as the company’s subsidy business faced headwinds in several states, including a 13,000‑child decline in Indiana. Management noted that the end of COVID‑19 stimulus funding and tighter subsidy reimbursement rates have tightened margins.
In light of these headwinds, KinderCare lowered its full‑year 2025 guidance. Revenue is now expected to be between $2.72 billion and $2.74 billion, down from the prior $2.756 billion outlook. Adjusted EBITDA guidance was trimmed to $290 million–$295 million, and adjusted EPS is projected at $0.64–$0.67, signaling caution about near‑term enrollment softness and subsidy uncertainty.
Investors reacted negatively to the results, citing the revenue miss, the guidance cut, and the continued softness in same‑center occupancy. The company’s CEO, Paul Thompson, emphasized that the company remains focused on operational improvements and that the current challenges are short‑term. CFO Anthony Amandi highlighted that cost discipline and the Champions program continue to support cash generation, even as the company navigates a more complex economic environment.
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