Please note this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Ms. Olivia Kirrer with Investor Relations. Please go ahead. Thank you, and good evening, everyone. Welcome to KinderCare's third quarter earnings call. After today's call, a replay will be available on our website. Joining me from the company are our Chief Executive Officer, Paul Thompson, and Chief Financial Officer, Tony Amandi. Following Paul and Tony's comments today, we will have a question-and-answer session. During this call, we will be discussing non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release. And finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon the management's current expectations and beliefs concerning future events impacting the company and involve a number of uncertainties and risks, including, but not limited to, those described in our earnings release and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. And with that, I'd like to turn the call over to our Chief Executive Officer, Paul Thompson. Paul? Thank you, Olivia, and thanks to everyone joining us for our first earnings call as a public company. I'm going to start today's call with an introduction to KinderCare for those we may not have met during the IPO process. Overall, we are the U.S. market leader in early childhood education. Our team of approximately 42,000 teachers and staff work together across our more than 2,500 centers and sites to fulfill our mission to provide America's families with high-quality early childhood education and reliable care. Together, we build confidence for kids and their families in the future we share. We have been inspired by this mission for over 50 years. We operate in 40 states, the District of Columbia, and in nearly every major market in the country, serving children from six weeks to 12 years old. We have a compelling business model and growth thesis driven by two major factors. First, early childhood industry dynamics are favorable because of a growing need from families for quality childcare centers and a persistent undersupply. This market is highly fragmented. We see tremendous growth potential as the top three providers of early childhood education make up less than 5% of what we believe is a $76 billion market. Our scale, resources, and operational excellence position us exceptionally well to increase our market share. We see growing challenges from many smaller providers that have received significant support from government stimulus following the pandemic. As most of you know, these stimulus dollars expire this year, and KinderCare is prepared to help support impacted communities. The second and more important factor is we have meaningful competitive advantages. Our scale and diverse high-quality offerings across our over 2,500 locations in nearly every major U.S. market allow us to meet the unique needs of working families and employers. We are the number one provider supporting families eligible for government subsidy. Unlike most childcare centers without the infrastructure to enable government-subsidized tuition, KinderCare has strategically prioritized it as a core competency. As a result, more than 30% of our revenue comes from supporting families who depend on childcare subsidies. We also benefit from bipartisan durability of the government programs that fund these grants. Over the past 18 years and across a mix of Democratic and Republican-controlled houses, the Child Care and Development Block Grant has grown annually by 4% on average. We also provide customized, flexible childcare benefits through partnerships with over 700 employers. Our employer-sponsored tuition plans have been a growing component of our revenue and now stand at 20% of our total. KinderCare operates over 70 on-site employer-sponsored centers and offers access to tuition benefits and a backup care at our 1,500 standalone centers. Lastly, we have unique and growing offerings beyond our core KinderCare brand. Our 2022 acquisition of Crème Schools increased our total addressable market to include the premium end of the spectrum, where we currently operate over 40 centers. We see the potential to grow this brand as there is a large opportunity for premium education experiences and specialized enrichment programs like language or STEM. And through our Champions brand, we have a network of over 1,000 sites providing before- and after-school and summer programs for school-aged children. With that backdrop, I'd like to outline our strategic priorities to create value for KinderCare shareholders in the quarters and years ahead. We have three primary avenues of growth across organic initiatives, expanding B2B relationships, and through portfolio expansion. Across each avenue, KinderCare has a long history of successful execution and sees a significant and diverse runway for growth in the future. We seek to drive consistent, robust organic growth, which includes both tuition increases and center occupancy optimization across our existing portfolio. Beginning with tuition growth, KinderCare and the industry have a strong history of measured and durable growth in tuition, where our strategic target is to maintain a 50-100 basis point positive spread ahead of our wage growth. Apart from our Crème locations, where we believe our pricing is below market, we expect consistent tuition growth to be in the low single-digit range. Turning to occupancy, with the exception of the pandemic recovery, we've remained committed to our strategy to drive portfolio-wide occupancy by approximately one percentage point per year. To frame the impact on our financials, each 2% occupancy gain is worth approximately 1% in annual EBITDA margin. We are actively working to directly address opportunities with the benefit of our scale and resources. With digital tools that help elevate the operational consistency across our portfolio, incremental occupancy growth to KinderCare's economics is not linear but exponential, as better-performing centers scale fixed costs and gain additional pricing power. We also plan to expand our network of B2B relationships with broader partnerships for both on-site and near-home childcare. The same growth paradigm holds true for our Champions programs, where we continue to broaden our footprint for before- and after-school care at local school sites. Our third avenue of growth is through new centers, both new center openings and tuck-in acquisitions. As I noted, there is significant white space in our industry, and KinderCare's backlog of new builds and tuck-in targets is large and highly visible, as it typically takes several months to vet, approve, and launch a new center. Additionally, we have historically demonstrated that KinderCare has a strong playbook to add value through M&A, and we believe there may be an increasingly viable opportunity as pandemic stimulus capital expires. Best of all, when taking each of these growth options in totality, KinderCare can fund the majority of these initiatives with our stable and growing cash flow. So to close my remarks, I'll reiterate how excited we are about our future growth, and I am extremely proud to lead such a strong team to achieve what we know is possible for our shareholders. With that, I will turn the call over to Tony. Thanks, Paul, and I want to echo how excited we are to be telling this story. Let me begin with our third quarter consolidated financial highlights, which I will note exclude the impact of pandemic stimulus funds in all periods for a clean comparison. KinderCare grew year-over-year revenue by 7.5% to $671 million, driven by a mix of tuition rate and some fee billing that moved from Q2 to Q3 compared to last year. The portfolio also exhibited stable same-center occupancy, inclusive of the integration of Crème and new center additions. Portfolio-wide same-center occupancy ended the quarter near 70%. In our Champions programs, we grew in revenue nearly 17% compared to a year ago, driven by new site openings, additional summer camp offerings, and increased tuition rates. Cost of services was up 6%, driven by a mix of personnel, marketing, and insurance costs, all of which were in line with expectations. Turning to our profitability, we realized a positive spread between our tuition growth and wages, excluding the impact of stimulus. The spread was in line with our long-term target to drive operating leverage. Adjusted EBITDA totaled $71.4 million for the third quarter, which is an increase of 25% compared to a year ago. For a cleaner compare, if we exclude the timing of registration fee income that aided Q3, our year-over-year adjusted EBITDA growth would have been approximately 7%, which is in line with our expectations. For context, registration fee income hit in Q2 of 2023, but we expect those fees to occur in the third quarter and future years. Our adjusted EBITDA margin for the quarter was 10.6%. Excluding the impact of the registration fee income I just referenced, adjusted EBITDA margin was 9.2%, up approximately 10 basis points year-over-year. During the current year, KinderCare has opened 10 new centers, including five in the third quarter. Additionally, we have added 16 centers through tuck-in acquisition year to date. As a reminder, our new centers typically scale in the second year of operation and achieve occupancy above the portfolio average upon stabilization. Overall, our new centers are performing in line or better than our expectations, and we have a strong pipeline of additional centers set to open over the next 12 to 18 months. Before I turn to our balance sheet, I'd like to quickly point out that approximately $4 million of EBITDA occurred ahead of plan in Q3, tied to reserve adjustments, some of which were anticipated in Q4. Lastly, for our capitalization, pro forma for our IPO, including the exercise of green shoe, KinderCare had balance sheet cash and available liquidity of approximately $330 million and total debt principal balance of approximately $967 million. Our effective interest rate, subsequent to the repayment of principal and repricing amendment, entered into the quarter with 7.8%. I will end my remarks by noting that we plan to introduce our 2025 financial outlook with our fourth quarter report early next year. With that, let me turn the call back over to the operator to take your questions. Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two. We ask that you please limit your questions to one initial with one follow-up so we can take as many questions as possible. Once again, that is star one to ask a question. We'll go first to Andrew Steinerman with JPMorgan. Hi, Tony, and thanks for the call. I wanted to ask you specifically if you were willing to disclose how much did M&A revenue add to the third quarter for the acquisitions that were made over the last 12 months. And then I also wanted to know when it says 1% was attributed to increased enrollments in ECE, is that same-center enrollments, or does that also include new centers? Yep. Hey, Andrew. So we disclosed there $9.1 million of the revenue in the third quarter was from centers that aren't included in same-center. And so that includes both the 16 from acquisitions as well as the 10 new centers that we added as well. And for the 1% you're speaking to, that would be for all of our centers included. Okay. Could you break that down for me? The 1%, how much is from new centers? How much is same-center enrollment growth? So, year to date, it's relatively flat on same, and so the increase is coming primarily from the new centers. Thank you very much. Thanks, Andrew. We'll go next to Toni Kaplan with Morgan Stanley. Thanks so much. Since the election, there's been a strong focus on government expenditures just given the efficiency programs we've heard about. What are you hearing from your people in Washington on what this could mean for the industry or your business or just any impact from that? Thanks. Sure. Thanks, Toni. Right now, a lot of that is still being decided as President Trump sets his agenda. But what we can point to is over the last decades, and specifically what we called out in other communications the last 18 years, it's increased 4% annually. And we've seen strong support, whether it's Democratic or Republican, control in the decision-making. So for that, we know that there's continued support for a strong childcare industry, and we know that that helps a strong economy for parents being able to go back to work. And so why we feel confident for us being the largest in the industry and continuing to have such scale and resources to take on subsidy children in a meaningful way will continue to be a part of our future growth. That makes sense. And then as my follow-up, during the last number of months, you've talked about the quintiles utilization of centers by quintile, and you referenced it again in terms of improvement there could lead to significant EBITDA growth. I was hoping you might be able to share any initiatives that you've been working on to try to get those underperforming centers back to pre-COVID levels. And if you've seen any progress, any data points that we could show to hear the progress on those. Thank you. Overall, Toni, what we would continue to reinforce regardless, all of our centers, call it the 1,500 network of community centers, we see growth opportunities for each one of those, wherever they might be in the segmentation. The differences of the playbook will continue to evolve. Some will be more pricing-focused, and others will be everything that we know we can continue to do to elevate the operational excellence. What you're specifically referring to, we rolled out certain digital tools over, call it the second and third quarter of this year. We're really excited about what that brings to our center directors on up-leveling their operational approach to what they're doing, the consistency that we see across centers, and that therein allows them to have more time and resources to actually build stronger relationships with the families and with the teachers. So definitely encouraged with what we're seeing here in 2024. But candidly, a lot of that is just beginning and will be definitely a strength for us as we go into 2025. Thank you so much. We'll move next to Manav Patnaik with Barclays. Yeah, thank you. Tony, I know you're holding off on 2025 guidance, but maybe you could just help us with maybe the fourth quarter in terms of some of the trends on, I think you said, flat same-center pricing, those kinds of things, just to set some expectations for next quarter? Yeah, Manav, I think what I'd tell you for now is that everything that we saw through the third quarter and in our early back-to-school results suggests that everything's in line with our expectations that we've set out for this year, and everything operationally is going to where we'd expect it to be. Okay, and then just to follow up on the pricing strategy overall, can you just remind us when you set the pricing, when it goes into effect, and I know, I guess you're generally trying to keep it 50-100 basis points above your wage inflation, so just some color there. Yep, so you have that right, so we're right now working through finalizing that over the next month or so, and then our new prices go into effect on January 1st for new students and age-ups, and so those students will see those prices as early as January 1st, depending on when that happens, and then all remaining students get new prices at back-to-school in September, but that's a small fraction of families at that point that see those at that point. Okay. Thank you. Thanks, Manav. We'll go next to George Tong with Goldman Sachs. Hi, thanks. Good afternoon. You've previously mentioned for your bottom quintile occupancy centers that improving the retention rates of center directors and teachers will be a key enabling factor to improving those bottom quintile occupancies. Can you elaborate on some initiatives you have to drive improved retention of staff internally? What programs you have in place or development initiatives to help them stay longer? Yeah, George, there's a number of things that we have found to be quite effective for our center directors and for our teachers. And at the core of it is everything we've talked about in the past, the work we do with Gallup and measuring engagement. We actually just had our engagement survey here close a few weeks ago where we survey our own team, our families, and our clients. So that is a great foundation for the conversation we have at every one of our centers. And then for our center directors and teachers, part of it comes with having the right benefits and career education reimbursement that we do for them. And then there's also professional development days where we take the time to reinforce health and safety, educational excellence within our centers, the assessments we're doing with our children. And so we feel really good about how we're continuing to enhance the onboarding for center directors and teachers in their first 90 days, then the relationship building and career development that we do for them until they hit their year. And then as you've heard from us in the past, once they're at a year anniversary with us, they definitely are staying with us longer in a great way for us to continue to build that out. The other piece that I think is really important because of our scale, for teachers, they can come in and be the best infant teacher for 40 years in their classroom. But if they want and are important to their own development to move up into an assistant director, a center director, and perhaps even to a district leader or a region leader or move throughout the U.S. because that's what's helpful for their own family dynamics, we can provide that career growth for them individually. So we've seen and continue to see improvements in our retention and definitely a big part of why we've been able to attract the talent that we have across our centers. Got it. Very helpful. And you mentioned earlier that new center openings is a contributing factor to your growth. Can you talk about what your expectations are in general for new center openings going forward, if the pace of new center openings should accelerate or stay similar to where it is now? And if the growth should accelerate, what are the key drivers of new center opening growth acceleration? Yeah, we'll get a little more specific, George, with our fourth quarter on specific expectations there, but in general, we expect them to accelerate. The primary reason about that is that we're still feeling some of the impacts of our pandemic-related decisions now on our new center openings as far as what we are willing to commit to capital back during those days, and so that's still contributing to some of our openings now, and so with what we have in our pipeline that we've already approved and that are under construction, we know that we will be accelerating from where we are now, and we'll share a little bit more details with that here with our fourth quarter results. And then just to build on that, you know that we have a separate team that does all of our new center openings and our acquisition transitions. So if we do see an increase in the number of centers we're doing, to scale up that team with one or two or three additional headcount is easy for us to do and meet the opportunity in the best way. Got it. Very helpful. Thank you. We'll go next to Jeff Meuler with Baird. Yeah, thank you. Just on Champions, it's still growing really well, but it did decelerate a bit. Can you just address that? And were there any unusual factors impacting it, like any sort of hurricane impact or anything that we should know about? There wasn't anything specific to Champions. We continue to see that as a strong double-digit growth business. As you know, with 1,000 sites today, the opportunity across the U.S., there's 90,000 schools for us to expand into, and albeit that obviously is a high watermark. But we definitely see Champions with its higher quality and the way it fits the needs for principals and superintendents and resonates so well with parents as a strong solution to extending the learning day. The double-digit growth of Champions will continue to occur over many, many years to come. Got it. And then, Tony, you mentioned something about some reserve adjustments. Can you help us size that up, and what exactly was that? Yeah. So it was about $4 million, just kind of out of what we were kind of expecting in the quarter. A little bit of that came in from the fourth quarter. Nothing really specific to call out, Jeff, just normal course reserves, nothing operationally related at all. I just wanted to make sure we were giving color for the impact to Q3 and what might happen in Q4. Okay. Thank you. Of course. We'll go next to Jeff Silber with BMO Capital Markets. Thank you so much. Wanted to get back to the pricing question that was asked about earlier. In your press release, I think you talk about average tuition going up about 6%. I know some of that might be because of mix. But then I think you talked about over the longer-term pricing being low single-digit increases. Is that going to be a general ramp down, or is it something that might be a little bit steeper over the next few quarters or so? Yeah, Jeff, one of the things that's happening in that 6% is the impact of the registration fees in the Q3 this year versus Q3 last year, so that is, as we classified the kind of tuition versus volume, that's involved in that, and so that, obviously, over time is going to bring that down because that's kind of a one-quarter blip that won't happen in the future with us having those registration fees in Q3 in the future as well. Okay. That's helpful. If I could go back to an earlier question about the potential impact of the Trump administration, we've been getting some questions in terms of if there is some potential immigration reform, how that might impact finding staff for the overall industry, and I'm just wondering your thoughts on that. Yes. For us, Jeff, with the scale that we have and with our recruiting team and the success that we've seen about everything that we offer in wage and benefits and career development, we feel very confident about our ability to have the right teachers and staff throughout our centers and sites and across our many brands. So not seeing or expecting an impact that that would have to us uniquely. Okay. Thanks so much for the help. We'll go next to Faiza Alwy with Deutsche Bank. Yes, hi. Thank you. I wanted to ask about M&A a bit more again. I think you mentioned that there's an increasingly viable opportunity as pandemic stimulus capital expires. So maybe provide an update on what you're seeing in terms of valuation and how you're thinking about M&A versus new store build? Yeah, that's perfect. Yeah, so valuations continue. We continue to see the tuck-in acquisitions in the low to mid single-digit EBITDA multiples, which is a nice point for us. Like you've seen, we've had 16 year-to-date so far this year. Q3 only had the single one in there, so it was a little lighter and mostly just timing there. We continue to see a really nice flow of opportunities coming in, both the ones that we're out hunting, but also the ones that are coming in directly to us and are really excited about where we'll see them continue to go going forward. Okay. Got it. And then, Tony, I know you're not giving us any guidance for 2025, but I'm curious if you're going to help us with just some housekeeping things to make sure we have them right. I know you did the refinancing post-IPO. Can you just confirm for us how we should think about interest expense and the diluted share count now that the IPO is all done? Just those things if you could share some color there. Yes, of course, so we're down to 7.8% effective interest rate now on the current debt levels with that paydown, and the debt level is at it was at just under $970 million after the paydown as well, and as far as share count, if you take what's in the Q3 balance sheet, which is just a little over 90 million, and you can get the exact number there, and then add on the IPO of 24 million shares plus the $3.6 million green shoe, that would put us just under 118 million shares, Faiza. We do have a few RSUs that will vest in the fourth quarter, but they're very immaterial to the total, and so I think if you just use what's on the balance sheet plus the IPO plus the green shoe, that should get you to a really good spot. All right. Great. Thank you. Of course. We'll go next to Josh Chan with UBS. Hi. Good Good afternoon, Paul, Tony. Thanks for taking my questions. You mentioned that your same-center occupancy is relatively flat. I think your goal is to grow that by a point every year, recognizing those fluctuations, and maybe it's a very small difference. But what would you say is kind of constraining the near-term enrollment growth, and how do you see those constraints kind of maybe unwinding as we go into the future years? Thanks, Josh. The headline is, we still feel very confident over each year achieving a 1% enrollment growth. What you're seeing still in the third quarter is a continuation of the 2023 back-to-school that we spoke to you about in the first half, had us flat. And so you're still seeing the impact of that in July and August of our third quarter. What we would tell you is we feel good about our back-to-school here as we come out of the third quarter and go into the fourth quarter. And it's in line with everything that we talked to you about, the long-term opportunity for us to continue to grow our enrollment in a healthy way. So that's the confidence that we have. Thanks for the detail there. That's great to hear. And then on the margin front, I think, Tony, you mentioned that excluding the registration fee, margins were up like 10 basis points or something. Did I hear that correctly? And how would that kind of line up versus your expectations for margin improvement? Thank you. Yep. Yep. You heard that right. And so the third quarter was just up slightly. I think the guide I give you all there is that we really look at it, obviously, over a longer period. And the quarters ebb and flow a little bit with the various things happening in enrollment levels as there is a little bit of seasonality to the business, as you all are aware of. So we still see it very in line with margin improvement. In the margin improvement, we have opportunity from our enrollment, from our tuition outpacing costs, and then also as we continue to leverage our G&A levels as well. So still feel really good about our ability to increase margin on the go forward and don't want to take that one single quarter as a guide of where we're going as a group. That makes a lot of sense. And thanks for the time and thanks for the color. All right. Thanks, Josh. That will conclude the Q&A session. I'd like to turn the conference back to Mr. Paul Thompson, CEO, for any additional or closing comments. All right. Thank you, everyone, for joining us this afternoon. We appreciate your support and interest, and we remain very excited and committed to the opportunities we have to grow this business, both in organic growth, B2B, and for our total portfolio, so thanks to you all, and have a wonderful afternoon. This does conclude today's program. Thank you for your participation. You may disconnect at this time.