Revenue Recognition

9 Months Ended

Sep. 28, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

4.REVENUE RECOGNITION

Contract Balances

The Company records deferred revenue when payments are received in advance of the Company’s performance under the contract, which is recognized as revenue as the performance obligation is satisfied. Payment from parents for tuition is typically received in advance on a weekly or monthly basis, in which case the revenue is deferred and recognized as the performance obligation is satisfied. The Company has the unconditional right to consideration as it satisfies the performance obligations, therefore no contract assets are recognized. During the three and nine months ended September 28, 2024, $0.1 million and $25.4 million, respectively, was recognized as revenue related to the deferred revenue balance recorded as of December 30, 2023. During the three and nine months ended September 30, 2023, $0.1 million and $24.8 million, respectively, was recognized as revenue related to the deferred revenue balance recorded as of December 31, 2022.

The Company applied the practical expedient of expensing costs incurred to obtain a contract if the amortization period of the asset is one year or less. Sales commissions are expensed as incurred in selling, general, and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

Disaggregation of Revenue

The following table disaggregates total revenue between education centers and school sites (in thousands):

	Three Months Ended				Nine Months Ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Early childhood education centers	$	626,439	$	585,919	$	1,872,894	$	1,774,767
Before- and after-school sites		45,037		38,549		143,185		117,419
Total revenue	$	671,476	$	624,468	$	2,016,079	$	1,892,186

A portion of revenue is generated from families whose tuition is subsidized by amounts received from government agencies. Subsidy revenue was $242.6 million and $201.4 million during the three months ended September 28, 2024 and September 30, 2023, and $699.8 million and $596.0 million during the nine months ended September 28, 2024 and September 30, 2023, respectively, recognized within revenue in the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

Performance Obligations

The transaction price allocated to the remaining performance obligations relates to services that are paid or invoiced in advance. The Company does not disclose the transaction price allocated to unsatisfied performance obligations for contracts with an original contractual period of one year or less, or for variable consideration allocated entirely to wholly unsatisfied promises that form part of a series of services. The Company’s remaining performance obligations not subject to the practical expedients are not material.