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- **Revenue Growth**: Q3 revenue up 12% to $803 million, with back-up care driving 26% segment growth.
- **Margin Expansion**: Adjusted EBITDA margin 19%, operating margin 15.5%, and 38% back-up care margin.
- **2025 Guidance**: Full year revenue $2.925 billion, adjusted EPS $4.48-$4.53, reflecting 9% growth.
- **Sustainability**: 2026 back-up care growth projected at 11-13%, with 10 million eligible employees and <10% penetration.
- **Strategic Focus**: Capacity expansion, personalized marketing, and client retention initiatives.
- **Risk Management**: 25-30 center closures in 2026, with 50-100 basis point margin expansion.


**【CEO Summary Section】**
- Q3 revenue increased 12% to $803 million, with back-up care revenue up 26% to $253 million.
- Full service centers saw 6% growth, with 3 new centers opened, including partnerships with MIT and Dartmouth Hitchcock Medical Center.
- 2025 full year guidance updated to $2.925 billion revenue and adjusted EPS of $4.48-$4.53, reflecting 9% revenue growth and 18% back-up care expansion.
- Emphasis on long-term growth through personalized marketing, capacity expansion, and strategic client relationships.

**【CFO Financial Commentary】**
- Q3 adjusted operating income rose 39% to $124 million, with a 15.5% operating margin and $156 million adjusted EBITDA (19% margin).
- Back-up care operating margin improved to 38%, driven by strong demand and cost efficiency.
- Full year 2025 outlook includes $203 million cash from operations, $105 million stock repurchases, and net leverage ratio of 1.7x.

**【Q&A Highlights】**
- **Sustainability of Back-up Care Growth**: CEO projects 11-13% 2026 growth, with 10 million eligible employees and <10% penetration.
- **Enrollment Trends**: Full service enrollment growth expected to moderate to 1% Q4, with focus on improving customer experience.
- **Pricing Strategy**: 4% average tuition increase, with localized adjustments for demand variability.
- **U.K. Market**: 2025 contribution to be modestly positive, with 2026 margin expansion of 50-100 basis points.
- **Capacity Management**: 25-30 centers expected to close in 2026, prioritizing high-demand locations.
- **Economic Impact**: Clients maintain back-up care investment despite workforce reductions, with 90%+ retention rates.


Bright Horizons Family Solutions Inc. (BFAM) Q3 2025 Earnings Call Transcript

- **Revenue Beats Expectations**: Q2 revenue $732 million (+9% YoY), EPS $1.07 (+22% YoY), driven by back-up care growth and margin expansion.
- **Segment Strength**: Back-up care up 19%, full-service +7%, ed advisory +8%. Full-service operating margin 7.5%, back-up care 25%.
- **Guidance Update**: Full-year revenue $2.9B-$2.92B (8-9% growth), EPS $4.15-$4.25. Q3 EPS $1.29-$1.34.
- **Strategic Momentum**: Cross-selling services to clients, 45F tax credit opportunities, and U.K. market recovery.
- **Operational Focus**: Streamlining enrollment process, rationalizing underperforming centers, and expanding back-up care network.

**【CEO Summary Section】**
- **Revenue Growth**: Q2 revenue of $732 million, up 9% YoY, driven by full-service (7%), back-up care (19%), and educational advisory (8%) segments. Adjusted EPS of $1.07 exceeded expectations, up 22% YoY.
- **Full Service Segment**: 5 new centers opened, including 2 for University of Virginia. Enrollment in centers >1 year grew low single digits, with occupancy at 67% (high 60s). Top-performing centers (>80% occupancy) remain stable, while middle cohort (40-70%) saw mid-single-digit growth.
- **Back-Up Care**: $163 million revenue, up 19% YoY, with strong summer demand. New client McKesson highlights employer demand for flexible care solutions.
- **Educational Advisory**: $29 million revenue, up 8% YoY, driven by College Coach demand.
- **One Bright Horizons Strategy**: Cross-selling services to clients, e.g., Centene adding back-up care and Northwell Health expanding to College Coach.
- **2025 Guidance Update**: Full-year revenue $2.9B-$2.92B (8-9% growth), adjusted EPS $4.15-$4.25.

**【CFO Financial Commentary】**
- **Q2 Financials**: Adjusted operating income $86 million (25% YoY growth), EBITDA $116 million (13% YoY). Full-service segment operating margin 7.5%, back-up care 25%, ed advisory 17%.
- **Segment Breakdown**: Full-service revenue $540 million (+7%), back-up care $163 million (+19%), ed advisory $29 million (+8%).
- **Cash Flow & Balance Sheet**: $134 million cash from ops, $41 million stock buybacks, $179 million cash on hand. Leverage ratio 1.7x.
- **2025 Outlook**: Full-service revenue +5.75-6.75%, back-up care +14-16%, ed advisory mid-single digits. Q3 EPS $1.29-$1.34.

**【Q&A Highlights】**
- **Margin Expectations**: Back-up care 25-30% operating margin, full-service +125bps YoY, ed advisory high teens.
- **Enrollment Trends**: Low single-digit growth expected, with focus on streamlining inquiry-to-enrollment process.
- **45F Tax Credit**: Potential to boost employer childcare spending, but early days to assess impact.
- **M&A Activity**: Disciplined approach, prioritizing high-quality, strategically located centers.
- **U.K. Recovery**: On track for breakeven in full-service segment, supported by expanded government funding.
- **Sales Cycle**: Longer macro-driven cycles, but improved lead gen and enrollment support tools mitigate impact.

Bright Horizons Family Solutions Inc. (BFAM) Q2 2025 Earnings Call Transcript

- **Revenue Growth**: Q1 2025 revenue up 7% to $666 million, driven by 6% full-service and 12% backup care growth. Raised 2025 guidance to 6.5%-8.5% growth.
- **Margin Expansion**: Full-service operating margin improved 210 bps to 6.5%, U.K. recovery on track for 2025 break-even. Backup care margin remains strong at 21%.
- **Enrollment Dynamics**: U.S. enrollment growth 2%-3% for 2025, slower than prior expectations due to macro uncertainty. U.K. recovery continues, but remains a margin headwind.
- **Strategic Initiatives**: Cross-selling services (e.g., full-service to backup care) and improving enrollment pipelines to drive margin expansion. Q2 adjusted EPS guidance: $0.99-$1.04.

**【CEO Summary Section】**
- Q1 2025 revenue grew 7% to $666 million, with adjusted EPS up 51% to $0.77. Full-service child care revenue rose 6% to $511 million, backup care revenue increased 12% to $129 million, and educational advisory revenue grew 8% to $26 million.
- Enrollment in centers open over one year expanded at a low single-digit rate, with mid-60s occupancy (sequential improvement from Q4). U.S. business districts show encouraging enrollment trends, while slower velocity in some markets reflects macroeconomic uncertainty.
- U.K. segment shows strong progress, with enrollment growth and margin recovery, targeting 2025 earnings break-even. Backup care reservations for summer programs are strong, with 95% client retention.
- Strategic focus on cross-selling services (e.g., full-service to backup care) and improving enrollment pipelines to drive margin expansion. Raised 2025 revenue guidance to 6.5%-8.5% growth, reaffirming adjusted EPS of $3.95-$4.15.

**【CFO Financial Commentary】**
- Q1 adjusted operating income was $62 million (9.4% of revenue), up 56% YoY. Adjusted EBITDA was $92 million (13.9% of revenue), up 23% YoY. Full-service segment operating margin expanded 210 bps to 6.5%, driven by U.S. and U.K. cost control.
- FX headwinds reduced full-service growth by ~100 bps, but backup care margin remained strong at 21%. Q2 revenue guidance: $720-730 million (7.5%-9% growth), with adjusted EPS $0.99-$1.04.
- Balance sheet: $112 million cash, 1.8x leverage ratio. Q1 free cash flow $86 million, with $20 million stock buybacks.

**【Q&A Key Highlights】**
- **Enrollment Trends**: CEO notes U.S. enrollment growth is 2%-3% for 2025, slower than prior expectations due to macro uncertainty. U.K. recovery continues, but remains a margin headwind (~100 bps). Backup care summer reservations strong, with 13%-15% Q2 growth.
- **Margin Sustainability**: Full-service margin expansion expected to slow to ~125 bps YoY (vs. 210 bps in Q1), as U.K. lapping effects and enrollment conservatism weigh. Backup care margin stability reflects disciplined cost management.
- **FX Impact**: 2025 guidance includes $30 million FX tailwind, partially offset by enrollment conservatism. Q2 FX tailwind ~100 bps YoY.
- **Capital Allocation**: CFO emphasizes share buybacks (Q1: $20 million) and disciplined M&A, with priority on organic growth and margin expansion.

Bright Horizons Family Solutions (BFAM)-5 May 25-2025 Q1 Earnings call transcript

- **Revenue and EPS Surpass Expectations**: Q4 revenue up 10% to $674M, adjusted EPS of $0.98 (+18%). Full-year revenue +11%, EPS +22%.
- **Backup Care Growth Engine**: $610M annual revenue, $170M EBIT. Q4 Backup Care up 15% to $157M, driving 33% segment margin.
- **2025 Outlook**: $2.85-$2.9B revenue (6%-8% growth), $3.95-$4.15 EPS (+15%-20%). Full-service margin expansion 150 bps.
- **U.K. Turnaround**: Narrowing losses, targeting 2025 breakeven with enrollment growth and operational efficiency.
- **Share Repurchases**: $85M in Q4, first since 2022, signaling confidence in cash generation and valuation.


**【CEO Summary Section】**
- **Revenue and EPS Beat Expectations**: Q4 revenue grew 10% to $674 million, with adjusted EPS of $0.98, up 18%. Full-year revenue increased 11% to $2.6 billion, and adjusted EPS rose 22%.
- **Backup Care Dominance**: Backup Care revenue reached $610 million annually, with $170 million in EBIT, surpassing the full-service segment's pre-pandemic contribution. Q4 Backup Care revenue grew 15% to $157 million.
- **Center Expansion**: Opened 26 centers in 2024, including 17 for new clients. Enrollment in centers over 1 year old grew low-single-digit, with top 40% centers averaging 80%+ occupancy.
- **U.K. Progress**: Narrowed losses in the U.K., with plans for breakeven in 2025 through enrollment growth and operational efficiency.
- **2025 Outlook**: Guided for $2.85-$2.9 billion revenue (6%-8% growth) and $3.95-$4.15 EPS (15%-20% growth), driven by Backup Care and full-service expansion.

**【CFO Financial Commentary】**
- **Q4 Financials**: Adjusted operating income of $79 million (11.8% of revenue), up 25% YoY. Adjusted EBITDA of $111 million (16.4% of revenue), up 12%.
- **Segment Performance**: Full-service revenue grew 8% to $485 million, Backup Care up 15% to $157 million. Ed Advisory revenue was $32.5 million with 29% margin.
- **Cash Flow and Repurchases**: Generated $337 million in cash from operations, repurchased $85 million in stock in Q4. Ended with $110 million cash and 2x net debt/EBITDA.
- **2025 Guidance**: Full-service revenue growth 4.5%-6.5% (6%-8% constant currency), Backup Care up 11%-13%. Margins expected to expand 150 bps in full-service, stable in Backup Care.

**【Q&A Highlights】**
- **Enrollment Trends**: Q4 occupancy 60%+ (consistent with Q3). 2025 enrollment growth 2.5%-3.5%, targeting mid-60s occupancy by year-end.
- **Center Closures**: 0.5% drag from net closures, 26 centers opened in 2024. U.K. centers improving with 30-hour free entitlement policy.
- **Labor Costs**: Wage investments stable; no immediate plans to raise prices for inflation.
- **Share Repurchases**: $85 million in Q4, first since 2022, driven by cash generation and opportunistic capital deployment.
- **Backup Care Growth**: 16% annual growth in 2024, guided for 11%-13% in 2025. Expansion of use cases and employer adoption key drivers.
- **U.K. Breakeven**: 2025 target through enrollment growth, staff retention, and reduced agency spend.


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