KinderCare Learning Companies (KLC) investor relations material

Business performance and market environment

• Early childhood education remains the core focus, with 1,600 centers and multiple brands serving diverse needs.

• Macroeconomic headwinds and consumer sentiment have pressured enrollment, but retention among existing families has improved.

• New student enrollment is the primary challenge, with efforts focused on improving the inquiry-to-enrollment process.

• Localized strategies and diagnostic tools are being deployed, especially in underperforming centers, to drive occupancy.

• The lowest-performing centers (Quintile 5) have shown year-over-year occupancy improvement, while higher-performing cohorts have surpassed pre-pandemic levels.

Operational initiatives and technology

• Digital tools like the Occupancy Whiteboard and Family Builder (Salesforce-based) have been rolled out to enhance center management and enrollment conversion.

• Online scheduling for tours and improved adoption of digital processes are being emphasized to meet modern family expectations.

• A new labor management tool, developed with Legion, will be implemented by late 2026 to optimize staffing and improve teacher engagement.

• Investments in digital and sales infrastructure have peaked, with expectations for future G&A leverage.

Subsidy and regulatory environment

• Subsidy revenue comprises about a third of total revenue, with funding primarily from federal block grants distributed by states.

• Indiana's unprecedented subsidy rate and spot cuts impacted enrollment, but most other states have stabilized funding.

• New Mexico is launching universal childcare, with the company participating in the program starting January 1st.

• States like Arizona and Texas temporarily froze voucher programs but have since resumed and plan to increase funding.