Revenue has remained essentially flat between $654.7M and $700.1M over ten quarters (2026Q2 at $697.5M, -0.4% growth), while gross margin compressed from 27.5% in 2024Q2 to 13.5% in 2026Q1 before recovering to 18.6% and operating margin slid from 11.7% to 0.3%, indicating structural cost pressure rather than demand-driven weakness.
KinderCare Learning Companies, Inc. (KLC) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Jan'26 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Sales/Revenue | 2.74B | 2.73B | 2.66B | 2.51B | 2.17B | 1.81B | 1.37B | 1.88B |
| Revenue Growth % | 1.8% | 2.64% | 6.09% | 15.9% | 19.8% | 32.29% | -27.14% | - |
| Cost of Goods Sold | 2.3B | 2.25B | 2.03B | 1.82B | 1.72B | 1.44B | 1.2B | 1.47B |
| COGS % of Revenue | - | 82.39% | 76.32% | 72.68% | 79.49% | 79.63% | 87.89% | 78.4% |
| Gross Profit | 430.2M | 481.23M | 630.52M | 685.86M | 444.2M | 368.3M | 165.49M | 405.23M |
| Gross Margin % | 15.73% | 17.61% | 23.68% | 27.32% | 20.51% | 20.37% | 12.11% | 21.6% |
| Gross Profit Growth % | - | -23.68% | -8.07% | 54.4% | 20.61% | 122.55% | -59.16% | - |
| Operating Expenses | 345.68M | 297.23M | 551.2M | 410.57M | 54.73M | 155.9M | 235.97M | 340.86M |
| OpEx % of Revenue | - | 10.87% | 20.7% | 16.36% | 2.53% | 8.62% | 17.27% | 18.17% |
| Selling, General & Admin | 291.05M | 297.23M | 423.06M | 287.97M | 267.29M | 227.08M | 170.31M | 218.7M |
| SG&A % of Revenue | - | 10.87% | 15.89% | 11.47% | 12.34% | 12.56% | 12.46% | 11.66% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 128.14M | 122.61M | -212.56M | -71.19M | 65.66M | 122.16M |
| Operating Income | 84.52M | 183.99M | 79.32M | 275.29M | 389.47M | 212.4M | -70.48M | 64.37M |
| Operating Margin % | 3.09% | 6.73% | 2.98% | 10.97% | 17.98% | 11.75% | -5.16% | 3.43% |
| Operating Income Growth % | - | 131.97% | -71.19% | -29.32% | 83.37% | 401.36% | -209.49% | - |
| EBITDA | 210.21M | 307.96M | 196.92M | 384.33M | 477.98M | 294.71M | 17.44M | 163.63M |
| EBITDA Margin % | 7.69% | 11.27% | 7.39% | 15.31% | 22.07% | 16.3% | 1.28% | 8.72% |
| EBITDA Growth % | 1.42% | 56.39% | -48.76% | -19.59% | 62.18% | 1589.96% | -89.34% | - |
| D&A (Non-Cash Add-back) | 125.69M | 123.97M | 117.61M | 109.05M | 88.51M | 82.31M | 87.92M | 99.25M |
| EBIT | -395.66M | -9.37M | 92.31M | 282.82M | 88.41M | 58.9M | -92.73M | 87.28M |
| Net Interest Income | -78.05M | -79.15M | -163.17M | -146.75M | -98.5M | -96.56M | -99.35M | -102.63M |
| Interest Income | 2.62M | 4.83M | 7.37M | 6.14M | 2.97M | 14K | 0 | 0 |
| Interest Expense | 80.67M | 83.97M | 170.54M | 152.89M | 101.47M | 96.58M | 99.35M | 102.63M |
| Other Income/Expense | -560.85M | -277.34M | -157.55M | -145.36M | -101.72M | -95.93M | -98.31M | -85.42M |
| Pretax Income | -476.32M | -93.34M | -78.23M | 129.93M | 287.75M | 116.47M | -168.79M | -21.05M |
| Pretax Margin % | -17.42% | -3.42% | -2.94% | 5.18% | 13.29% | 6.44% | -12.35% | -1.12% |
| Income Tax | -5.1M | 19.54M | 14.61M | 27.37M | 68.58M | 28.06M | -39.3M | 8.09M |
| Effective Tax Rate % | 1.07% | -20.93% | -18.67% | 21.06% | 23.83% | 24.09% | 23.28% | -38.42% |
| Net Income | -471.23M | -112.88M | -92.84M | 102.56M | 219.17M | 88.41M | -129.5M | -29.14M |
| Net Margin % | -17.23% | -4.13% | -3.49% | 4.09% | 10.12% | 4.89% | -9.48% | -1.55% |
| Net Income Growth % | -686.97% | -21.59% | -190.52% | -53.21% | 147.9% | 168.27% | -344.38% | - |
| Net Income (Continuing) | -471.23M | -112.88M | -92.84M | 102.56M | 219.17M | 88.41M | -129.5M | -29.14M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -3.97 | -0.95 | -0.96 | 0.90 | 1.92 | 0.77 | -1.13 | -0.25 |
| EPS Growth % | -636.79% | 1.45% | -207.11% | -53.13% | 149.35% | 168.14% | -343.49% | - |
| EPS (Basic) | - | -0.95 | -0.96 | 0.90 | 1.92 | 0.77 | -1.13 | -0.25 |
| Diluted Shares Outstanding | 118.8M | 118.33M | 96.31M | 114.37M | 114.37M | 114.37M | 114.37M | 114.37M |
| Basic Shares Outstanding | 118.8M | 118.33M | 96.31M | 114.37M | 114.37M | 114.37M | 114.37M | 114.37M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying KLC stock.
For fiscal year 2025, KinderCare Learning Companies, Inc. (KLC) reported total revenue of $2.73B. This represents a 45.7% increase compared to $1.88B in 2019.
KinderCare Learning Companies, Inc. (KLC) reported a net loss of $112.9M for the fiscal year ending 2025.
KinderCare Learning Companies, Inc. (KLC) reported an operating income of $184.0M, resulting in an operating profit margin of 6.7%. This margin reflects the operational efficiency of the business before interest and taxes.
KinderCare Learning Companies, Inc. (KLC) generated $481.2M in gross profit for the year, representing a gross profit margin of 17.6%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Gross margin erosion
Metrics are mathematically derived from official filings.
Revenue Flatlining Under Demand Pressure
Revenue has been essentially flat over the past ten quarters, ranging from $654.7M to $700.1M with the latest quarter at $697.5M and -0.4% growth, per KinderCare's reported income statements, suggesting demand growth is not offsetting any pricing or footprint changes.
Growth has oscillated between roughly -0.4% and 6.4% year over year without a discernible upward trend, which implies the top line is being sustained by pricing rather than enrollment or center expansion. The 6.4% print in 2025Q4 looks more like a seasonal or one-quarter effect, given the subsequent 0.6% and -0.4% readings; investors should monitor whether the flat trajectory persists through the seasonal peak quarters.
Structural Gross Margin Compression Evident
Gross margin compressed from 27.5% in 2024Q2 to 13.5% in 2026Q1 before recovering to 18.6% in 2026Q2, as COGS rose to $582.0M against roughly flat revenue, according to KLC's quarterly filings — a structural cost pressure rather than a demand problem.
Because COGS grew from $500.0M to a $567-582M run-rate while revenue stayed near $700M, the deterioration appears driven by direct delivery costs — likely wages and occupancy — outpacing tuition realization, rather than volume loss. The partial rebound to 18.6% in 2026Q2 suggests some pricing or utilization actions may be taking hold, but the level remains well below the 24-27% band of early 2024 and below peer Bright Horizons' 23.6%, warranting investigation into whether the reset is permanent.
Operating Leverage Working in Reverse
Operating income fell from $80.6M in 2024Q2 to $2.4M in 2026Q2 even as revenue held near $700M, implying operating margin slid from 11.7% to 0.3%, based on KLC's reported results — overhead is not scaling down with profitability.
SG&A has remained in a narrow $71-79M band (excluding the anomalous $188.9M in 2024Q4), meaning the fixed cost base is absorbing nearly all of the gross profit decline rather than being adjusted downward. This asymmetric response implies limited management discretion over overhead in the near term, so any sustained margin recovery appears contingent on restoring gross margin rather than cutting SG&A.
Net Losses Decoupled from Operating Results
KLC posted a $289.8M net loss in 2026Q1 on $19.4M of operating income, indicating substantial below-the-line charges; per its income statement disclosure, stock compensation also spiked to $121.8M in 2024Q4 versus a $2-4M baseline elsewhere.
The widening gap between operating income ($19.4M) and net loss (-$289.8M) in 2026Q1, and between $33.1M and -$177.2M in 2025Q4, suggests heavy non-operating items — plausibly interest expense or impairments — that materially depress reported EPS without touching core operations. Combined with the episodic SBC spikes, headline earnings quality appears weak: the 2024Q2-2025Q3 profitability streak delivered EPS of only $0.04-$0.33, so investors should treat adjusted earnings as the more decision-useful reference.
Margin Story Is the Short-Seller Target
A short-seller would focus on gross margin erosion of roughly 890 basis points between 2024Q2 and 2026Q1, driven by COGS climbing from $500.0M to $582.0M, per KLC's filings, suggesting labor and occupancy costs may outrun pricing power in a subscription-like model.
The strongest bearish case is that flat revenue plus structurally higher COGS creates a binary setup: if tuition cannot be raised enough to restore the 24%+ gross margin era, operating income of $2.4M leaves almost no cushion before the bottom line turns decisively negative again. The counterpoint investors must weigh is whether the 2026Q2 improvement to 18.6% gross margin and $130.1M gross profit represents a genuine inflection or merely quarter-to-quarter volatility in enrollment mix.