Financial Data and Key Metrics Changes - Total revenues grew 5% year-over-year to 298 million [21][34] - Adjusted EPS for the fourth quarter was 2.4 billion, with average weekly full-time enrollments slightly up to 145,000 [21][22] Business Line Data and Key Metrics Changes - Early education centers saw a 4% revenue growth year-over-year to 54 million, with 1,025 sites, an 8% increase from the previous year [36][20] Market Data and Key Metrics Changes - Demand for quality early childhood education in the US continues to exceed supply, presenting growth opportunities [9][10] - Occupancy rates improved by 90 basis points to 69.8%, with expectations for continued growth [22][40] Company Strategy and Development Direction - KinderCare aims to expand access to high-quality childcare through new centers and acquisitions, leveraging its scale and brand recognition [10][11] - The company is focused on enhancing its offerings to meet the needs of families and employers, including customized childcare benefits [14][29] 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 growth [16][62] - The outlook for 2025 includes revenue guidance of 2.85 billion, representing a 3% to 7% increase, with adjusted EBITDA expected to range from 325 million [45][46] Other Important Information - Approximately 35% of total revenue in 2024 came from subsidy funding, with 20% from employer partnerships [26][27] - The company opened 77 new Champion sites in 2024 and plans to continue this momentum in 2025 [28] 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 in Q4 [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 are the expectations for occupancy rates in lower quintiles? - Management noted that engagement with teachers and families is key to improving occupancy in lower-performing centers [68][69] Question: What factors could influence revenue and margin guidance? - Revenue growth will depend on occupancy rates and cost controls, with potential upside from acquisitions if market conditions remain favorable [70][74] Question: How is the B2B employer-sponsored business performing? - Occupancy rates in employer-sponsored centers are trending in the high 70s, with opportunities for further expansion [78][79] Question: What is the rationale for expecting flat occupancy in 2025? - Management emphasized the need for operational practices to gain traction before expecting significant occupancy increases [100][101] Question: Are acquisitions included in the revenue guidance? - The revenue guidance includes a 1% to 2% contribution from acquisitions, but specific volume guidance is not provided [102][103]
Kindercare Learning Companies, Inc.(KLC) - 2024 Q4 - Earnings Call Transcript