Financial Data and Key Metrics Changes - Total revenues grew by 5% year-over-year, reaching $2.7 billion, with adjusted EBITDA increasing by 12% to $298 million [21][34] - Adjusted EPS for the fourth quarter was reported at $0.09, with an adjusted EBITDA margin of 10%, remaining flat year-over-year [34][38] - Average weekly full-time enrollments increased slightly to 145,000, with occupancy growing by 90 basis points to 69.8% [22][24] Business Line Data and Key Metrics Changes - Early education centers saw a revenue increase of 4% year-over-year, totaling $593 million, with same center revenue up by 3% [35] - The Champions business experienced a 12% revenue growth, totaling $54 million, with the number of sites increasing by 8% to 1,025 [36] - The portfolio performed well overall, with a same center revenue increase of 5% to $2.4 billion [21][19] Market Data and Key Metrics Changes - Demand for quality early childhood education in the US continues to exceed supply, presenting growth opportunities for KinderCare [9][10] - The top five providers in the early childhood education market account for only 5% of the total market, indicating significant growth potential in a fragmented industry [11] Company Strategy and Development Direction - KinderCare aims to expand access to high-quality childcare through existing locations, new centers, and acquisitions, leveraging its scale and brand recognition [10][12] - The company is focused on enhancing its offerings to meet the needs of working families, including partnerships with over 900 employers for customized childcare benefits [14][29] - The strategic focus includes maintaining high teacher retention rates and fostering a supportive work culture to ensure continuity of care [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued bipartisan support for early childhood education funding, which is crucial for the company's growth [16][62] - The outlook for 2025 includes revenue guidance of $2.75 billion to $2.85 billion, representing a growth of 3% to 7% over the prior year [45] - Adjusted EBITDA is expected to range from $310 million to $325 million, driven by growth, cost controls, and expanding scale [45] Other Important Information - The company opened 77 new Champion sites in 2024 and plans to continue this momentum in 2025 [28] - KinderCare's revenue from subsidy funding represented about 35% of total revenue for 2024, with 20% coming from employer partnerships [26][27] - The company has a robust pipeline for growth, including new employer-sponsored centers and expansions into new geographies [31] Q&A Session Summary Question: How is the first quarter trending relative to guidance? - Management indicated that the first quarter is tracking in line with annual guidance, with $4.6 million of revenue from acquisitions not included in the same center number [56][57] Question: What percentage of revenue is tied to US federal government funding? - Approximately 35% of revenue comes from the Child Care and Development Block Grant, with bipartisan support expected to continue [61][62] Question: What is the playbook for lower-performing centers? - Different strategies are employed based on occupancy levels, focusing on engagement and retention to improve performance in lower quintile centers [67][68] Question: What factors could influence revenue and margin guidance? - Revenue growth will depend on occupancy rates and tuition adjustments, while cost controls will also play a significant role in EBITDA margins [70][74] Question: What are the expectations for B2B employer-sponsored business growth? - Similar growth rates are expected for new center openings tied to employers, with potential for increased tuition benefits [81][82] Question: Why is occupancy expected to remain flat? - Management is cautious about projecting occupancy growth despite positive trends, focusing on operational practices and tools that are still gaining traction [100][101] Question: Are acquisitions included in the revenue guidance? - The revenue guidance includes a 1% to 2% contribution from future tuck-in acquisitions, but specific volume guidance is not provided [102][103]