Core Viewpoint - Bright Horizons Family Solutions (BFAM) is expected to report quarterly earnings of $0.91 per share, a 9.6% increase year-over-year, with revenues projected at $670.11 million, reflecting an 8.9% year-over-year growth [1]. Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating stability in analysts' projections [2]. - Revisions to earnings projections are crucial for predicting investor behavior and stock price performance [3]. Revenue Projections - Revenue from full-service center-based child care is estimated at $485.72 million, showing an 8.6% year-over-year increase [5]. - Revenue from educational advisory and other services is expected to be $31.98 million, indicating a decline of 5.8% from the previous year [5]. - Revenue from back-up care is projected at $152.22 million, reflecting a 13.1% year-over-year increase [6]. Adjusted Income Estimates - Adjusted income from operations for educational advisory and other services is forecasted to be $7.28 million, down from $9.91 million year-over-year [6]. - Adjusted income from operations for back-up care is expected to reach $34.93 million, compared to $37.43 million in the previous year [7]. Stock Performance - Over the past month, Bright Horizons shares have increased by 6.7%, outperforming the Zacks S&P 500 composite, which rose by 2.1% [8]. - Despite recent performance, BFAM holds a Zacks Rank 4 (Sell), suggesting potential underperformance in the near future [8].

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details Bright Horizons' unaudited financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summarizes the company's financial position, showing total assets, liabilities, and stockholders' equity at period-end Balance Sheet Summary | Metric | September 30, 2024 (In thousands) | December 31, 2023 (In thousands) | | :----- | :-------------------------------- | :------------------------------- | | Total Assets | $3,914,813 | $3,896,144 | | Total Liabilities | $2,515,622 | $2,683,468 | | Total Stockholders' Equity | $1,399,191 | $1,212,676 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenue, net income, and diluted EPS for the three and nine months ended September 30, 2024 and 2023 Income Statement Summary | Metric | Three months ended Sep 30, 2024 (In thousands) | Three months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Revenue | $719,099 | $645,787 | +11.4% | | Net income | $54,905 | $39,979 | +37.3% | | Common stock — diluted EPS | $0.94 | $0.69 | +36.2% | | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Revenue | $2,011,867 | $1,802,609 | +11.6% | | Net income | $111,068 | $68,699 | +61.7% | | Common stock — diluted EPS | $1.90 | $1.18 | +61.0% | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Presents net income and other comprehensive income components, including foreign currency adjustments, for the reporting periods Comprehensive Income Summary | Metric | Three months ended Sep 30, 2024 (In thousands) | Three months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Net income | $54,905 | $39,979 | +37.3% | | Foreign currency translation adjustments | $47,343 | $(31,179) | N/A | | Total other comprehensive income (loss) | $37,039 | $(32,783) | N/A | | Comprehensive income | $91,944 | $7,196 | +1177.7% | | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Net income | $111,068 | $68,699 | +61.7% | | Foreign currency translation adjustments | $33,949 | $(14,843) | N/A | | Total other comprehensive income (loss) | $24,302 | $(20,041) | N/A | | Comprehensive income | $135,370 | $48,658 | +178.2% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines changes in stockholders' equity, including net income, stock-based compensation, and common stock issuance Stockholders' Equity Changes | Metric | September 30, 2024 (In thousands) | September 30, 2023 (In thousands) | | :----- | :-------------------------------- | :-------------------------------- | | Total Stockholders' Equity | $1,399,191 | $1,165,420 | | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Net income | $111,068 | $68,699 | | Stock-based compensation expense | $24,607 | $21,154 | | Issuance of common stock under Equity Incentive Plan | $31,296 | $17,551 | | Other comprehensive income (loss) | $24,302 | $(20,041) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Reports cash flows from operating, investing, and financing activities, showing changes in cash and equivalents Cash Flow Summary | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Net cash provided by operating activities | $216,813 | $160,971 | +34.7% | | Net cash used in investing activities | $(92,662) | $(92,009) | -0.7% | | Net cash used in financing activities | $(95,822) | $(60,457) | +58.5% | | Net increase in cash, cash equivalents and restricted cash | $29,636 | $7,225 | +310.2% | | Cash, cash equivalents and restricted cash — end of period | $119,087 | $59,119 | +101.4% | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Organization and Basis of Presentation](index=11&type=section&id=Note%201.%20Organization%20and%20Basis%20of%20Presentation) Describes Bright Horizons' business, segment realignment, and share repurchase program status - As of **September 30, 2024**, the company operated **1,028 centers** early education and child care centers[26](index=26&type=chunk) - Effective **January 1, 2024**, the company realigned its organizational structure, moving Sittercity operations from the Educational Advisory and Other Services segment to the Back-up Care segment[26](index=26&type=chunk) - Most pandemic-related government support programs, including child care stabilization grants, ended on **September 30, 2023**[26](index=26&type=chunk) - No share repurchases were made under the **$400 million** repurchase program during the nine months ended September 30, 2024 and 2023. **$198.3 million** remained available under the program as of September 30, 2024[26](index=26&type=chunk) [Note 2. Revenue Recognition](index=12&type=section&id=Note%202.%20Revenue%20Recognition) Disaggregates revenue by segment and geography, detailing recognized deferred revenue Revenue by Segment and Region | Segment/Region | Three months ended Sep 30, 2024 (In thousands) | Three months ended Sep 30, 2023 (In thousands) | | :--------------- | :--------------------------------------------- | :--------------------------------------------- | | North America | $521,576 | $473,490 | | International | $197,523 | $172,297 | | Total Revenue | $719,099 | $645,787 | | Segment/Region | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | | :--------------- | :-------------------------------------------- | :-------------------------------------------- | | North America | $1,450,271 | $1,309,396 | | International | $561,596 | $493,213 | | Total Revenue | $2,011,867 | $1,802,609 | - The company recognized **$243.6 million** and **$200.7 million** as revenue during the nine months ended September 30, 2024 and 2023, respectively, from deferred revenue balances at the beginning of each period[29](index=29&type=chunk) [Note 3. Leases](index=13&type=section&id=Note%203.%20Leases) Explains the company's operating lease arrangements, lease expenses, and future payment obligations Lease Expense Summary | Metric | Three months ended Sep 30, 2024 (In thousands) | Three months ended Sep 30, 2023 (In thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | | Total lease expense | $51,536 | $49,033 | | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Total lease expense | $149,847 | $148,200 | Lease Term and Discount Rate | Metric | September 30, 2024 | December 31, 2023 | | :----- | :----------------- | :---------------- | | Weighted average remaining lease term (in years) | 10 | 10 | | Weighted average discount rate | 7.1% | 7.1% | Operating Lease Maturity Schedule | Maturity Period | Operating Leases (In thousands) | | :---------------- | :------------------------------ | | Remainder of 2024 | $30,283 | | 2025 | $160,590 | | 2026 | $154,663 | | 2027 | $144,969 | | 2028 | $134,039 | | Thereafter | $627,922 | | Total lease payments | $1,252,466 | | Present value of lease liabilities | $891,759 | [Note 4. Acquisitions](index=14&type=section&id=Note%204.%20Acquisitions) Details recent acquisitions in the Netherlands and Australia, including goodwill recorded and deferred consideration payments - In April **2024**, the company acquired the remaining shares of a Netherlands provider for **$1.3 million** cash and **$0.7 million** contingent consideration, recording **$9.8 million** in goodwill[37](index=37&type=chunk) - During the nine months ended **September 30, 2024**, the company acquired two centers in Australia for **$7.2 million** cash, recording **$6.8 million** in goodwill[37](index=37&type=chunk) - In January **2024**, the company paid **$106.5 million** in deferred consideration for the **2022** acquisition of Only About Children[37](index=37&type=chunk) - In April **2024**, the company paid **$14.3 million** in contingent consideration related to a **2021** acquisition[37](index=37&type=chunk) - During **2023**, the company acquired four centers in the US and six in Australia for **$39.5 million** cash, recording **$37.2 million** in goodwill[38](index=38&type=chunk) [Note 5. Goodwill and Intangible Assets](index=15&type=section&id=Note%205.%20Goodwill%20and%20Intangible%20Assets) Reports changes in goodwill and the net carrying amount of definite and indefinite-lived intangible assets Goodwill Movement | Metric | January 1, 2024 (In thousands) | September 30, 2024 (In thousands) | | :----- | :----------------------------- | :-------------------------------- | | Balance of Goodwill | $1,786,405 | $1,827,935 | | Additions from acquisitions | — | $16,586 | | Effect of foreign currency translation | — | $24,837 | Intangible Assets Net Carrying Amount | Intangible Asset Type | September 30, 2024 Net Carrying Amount (In thousands) | December 31, 2023 Net Carrying Amount (In thousands) | | :-------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Definite-lived intangible assets | $22,109 | $35,985 | | Indefinite-lived intangible assets | $180,937 | $180,591 | | Total other intangible assets — net | $203,046 | $216,576 | Estimated Amortization Expense | Period | Estimated Amortization Expense (In thousands) | | :----- | :-------------------------------------------- | | Remainder of 2024 | $2,387 | | 2025 | $6,568 | | 2026 | $4,532 | | 2027 | $3,396 | | 2028 | $1,955 | | Thereafter | $3,271 | | Total | $22,109 | [Note 6. Credit Arrangements and Debt Obligations](index=16&type=section&id=Note%206.%20Credit%20Arrangements%20and%20Debt%20Obligations) Outlines the company's senior secured credit facilities, total debt, and interest rate hedging strategies Debt Obligations Summary | Debt Type | September 30, 2024 (In thousands) | December 31, 2023 (In thousands) | | :-------- | :-------------------------------- | :------------------------------- | | Term loan B | $583,500 | $588,000 | | Term loan A | $372,500 | $380,000 | | Total debt | $951,653 | $962,764 | | Long-term debt | $925,653 | $944,264 | - The effective interest rate for term loans was **6.92%** at September 30, 2024, compared to **7.52%** at December 31, 2023[44](index=44&type=chunk) - The weighted average interest rate for term loans and revolving credit facility (prior to hedges) was **7.44%** for the nine months ended September 30, 2024, compared to **7.08%** for the same period in 2023[44](index=44&type=chunk) - At September 30, 2024, **$389.8 million** was available for borrowing under its **$400 million** revolving credit facility[48](index=48&type=chunk) - The company entered into **$900 million** notional value interest rate cap agreements, effective **October 31, 2023**, to provide interest rate protection against SOFR increases above **2.4%** (**$600M**) and **2.9%** (**$300M**)[51](index=51&type=chunk) - The company estimates a net gain of **$7.7 million** (pre-tax) will be reclassified from accumulated other comprehensive loss and recorded as a reduction to interest expense related to derivative financial instruments over the next **12 months**[52](index=52&type=chunk) [Note 7. Earnings Per Share](index=19&type=section&id=Note%207.%20Earnings%20Per%20Share) Presents basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2023 Earnings Per Share Performance | Metric | Three months ended Sep 30, 2024 | Three months ended Sep 30, 2023 | | :----- | :------------------------------ | :------------------------------ | | Basic EPS | $0.95 | $0.69 | | Diluted EPS | $0.94 | $0.69 | | Metric | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :----- | :----------------------------- | :----------------------------- | | Basic EPS | $1.92 | $1.19 | | Diluted EPS | $1.90 | $1.18 | - Weighted average common shares outstanding (diluted) for the three months ended September 30, 2024, were **58,701,618**, up from **58,045,137** in the prior year[55](index=55&type=chunk) [Note 8. Income Taxes](index=20&type=section&id=Note%208.%20Income%20Taxes) Discusses the effective income tax rate, influencing factors, and unrecognized tax benefits Effective Income Tax Rates | Metric | Three months ended Sep 30, 2024 | Three months ended Sep 30, 2023 | | :----- | :------------------------------ | :------------------------------ | | Effective income tax rate | 29.4% | 26.8% | | Metric | Nine months ended Sep 30, 2024 | Nine months ended Sep 30, 2023 | | :----- | :----------------------------- | :----------------------------- | | Effective income tax rate | 31.0% | 35.0% | - Unrecognized tax benefits were **$5.0 million** at September 30, 2024, and **$4.6 million** at December 31, 2023[57](index=57&type=chunk) - Net shortfall tax expense from stock-based compensation increased tax expense by **$0.2 million** and **$0.9 million** for the three and nine months ended September 30, 2024, respectively[57](index=57&type=chunk) [Note 9. Fair Value Measurements](index=20&type=section&id=Note%209.%20Fair%20Value%20Measurements) Classifies fair value measurements for financial instruments, including debt securities and contingent consideration - Fair value of interest rate cap agreements was **$13.5 million** at September 30, 2024, and **$29.0 million** at December 31, 2023, classified as Level 2[59](index=59&type=chunk) - Fair value of available-for-sale debt securities was **$38.9 million** at September 30, 2024, with **$23.1 million** classified as Level 1 and **$15.8 million** as Level 2[59](index=59&type=chunk) Contingent Consideration Liabilities | Metric | September 30, 2024 (In thousands) | | :----- | :-------------------------------- | | Balance of contingent consideration liabilities | $752 | | Issuance of contingent consideration | $696 | | Settlement of contingent consideration liabilities | $(14,300) | | Changes in fair value | $2,819 | - Contingent consideration liabilities are classified as Level 3 fair value measurements[59](index=59&type=chunk) [Note 10. Accumulated Other Comprehensive Loss](index=22&type=section&id=Note%2010.%20Accumulated%20Other%20Comprehensive%20Loss) Details the components and changes in accumulated other comprehensive loss, primarily foreign currency adjustments Accumulated Other Comprehensive Loss Balance | Metric | January 1, 2024 (In thousands) | September 30, 2024 (In thousands) | | :----- | :----------------------------- | :-------------------------------- | | Balance of AOCL | $(59,101) | $(34,799) | Components of Other Comprehensive Income (Loss) | Component | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | | :-------- | :-------------------------------------------- | :-------------------------------------------- | | Foreign currency translation adjustments | $33,949 | $(14,843) | | Unrealized gain (loss) on cash flow hedges | $(10,115) | $(5,278) | | Unrealized gain (loss) on investments | $468 | $80 | | Net other comprehensive income (loss) | $24,302 | $(20,041) | [Note 11. Segment Information](index=22&type=section&id=Note%2011.%20Segment%20Information) Provides disaggregated financial data for the company's full service, back-up care, and educational advisory segments - Effective **January 1, 2024**, Sittercity operations were moved from the educational advisory and other services segment to the back-up care segment[65](index=65&type=chunk) Segment Revenue Performance (Three Months) | Segment | Three months ended Sep 30, 2024 Revenue (In thousands) | Three months ended Sep 30, 2023 Revenue (In thousands) | YoY Change (Revenue) | | :------ | :--------------------------------------------- | :--------------------------------------------- | :------------------- | | Full service center-based child care | $486,567 | $444,747 | +9.4% | | Back-up care | $201,783 | $171,423 | +17.7% | | Educational advisory services | $30,749 | $29,617 | +3.8% | Segment Income from Operations (Three Months) | Segment | Three months ended Sep 30, 2024 Income from Operations (In thousands) | Three months ended Sep 30, 2023 Income from Operations (In thousands) | YoY Change (Income from Operations) | | :------ | :---------------------------------------------------- | :---------------------------------------------------- | :---------------------------------- | | Full service center-based child care | $12,465 | $6,990 | +78.3% | | Back-up care | $70,487 | $52,257 | +34.9% | | Educational advisory services | $6,444 | $7,577 | -15.0% | Segment Revenue Performance (Nine Months) | Segment | Nine months ended Sep 30, 2024 Revenue (In thousands) | Nine months ended Sep 30, 2023 Revenue (In thousands) | YoY Change (Revenue) | | :------ | :-------------------------------------------- | :-------------------------------------------- | :------------------- | | Full service center-based child care | $1,477,284 | $1,333,469 | +10.8% | | Back-up care | $452,945 | $389,391 | +16.3% | | Educational advisory services | $81,638 | $79,749 | +2.4% | Segment Income from Operations (Nine Months) | Segment | Nine months ended Sep 30, 2024 Income from Operations (In thousands) | Nine months ended Sep 30, 2023 Income from Operations (In thousands) | YoY Change (Income from Operations) | | :------ | :--------------------------------------------------- | :--------------------------------------------------- | :---------------------------------- | | Full service center-based child care | $66,553 | $28,493 | +133.6% | | Back-up care | $118,063 | $97,500 | +21.1% | | Educational advisory services | $13,776 | $17,008 | -19.0% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and cash flows, highlighting revenue and net income growth [Special Note Regarding Forward-Looking Statements](index=24&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Cautions readers about forward-looking statements, inherent risks, and the company's non-obligation to update - The report contains **forward-looking statements**, identifiable by terms such as 'believes,' 'expects,' 'may,' 'will,' 'should,' 'seeks,' 'projects,' 'intends,' 'plans,' 'estimates,' or 'anticipates'[69](index=69&type=chunk) - **Forward-looking statements** involve inherent risks and uncertainties, and actual results may differ materially from those projected[69](index=69&type=chunk) - The company undertakes no obligation to update any **forward-looking statements** to reflect future events or developments, except as required by law[69](index=69&type=chunk) [Overview](index=24&type=section&id=Overview) Provides an overview of Bright Horizons' business, strategic priorities, and operating environment challenges - Bright Horizons is a leading provider of early education and child care, back-up and family care solutions, and workforce education services, operating **1,028 centers** as of **September 30, 2024**[71](index=71&type=chunk) - For the three months ended **September 30, 2024**, the full service center-based child care segment saw a **9%** revenue increase and **3%** net enrollment growth, while back-up care revenue increased by **18%** year-over-year due to increased utilization[71](index=71&type=chunk) - The company continues to navigate a **dynamic operating environment** characterized by increased costs, a tight labor market, varying enrollment demands, and shifting work demographics, leading to **portfolio optimization efforts** including center closures[71](index=71&type=chunk) - **Strategic priorities** include delivering high-quality services, connecting service lines, extending impact to new customers, and preserving a strong culture[71](index=71&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including revenue, gross profit, and net income, for the reporting periods [Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023](index=27&type=section&id=Three%20Months%20Ended%20September%2030,%202024%20Compared%20to%20the%20Three%20Months%20Ended%20September%2030,%202023) Compares Q3 2024 and Q3 2023 financial results, highlighting revenue and net income growth drivers Financial Performance (Three Months) | Metric | 2024 (In thousands) | 2023 (In thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | Revenue | $719,099 | $645,787 | +11.4% | | Cost of services | $537,564 | $488,142 | +10.1% | | Gross profit | $181,535 | $157,645 | +15.1% | | Income from operations | $89,396 | $66,824 | +33.8% | | Net income | $54,905 | $39,979 | +37.3% | - Full service center-based child care revenue increased by **9.4%** due to a **3%** net increase in enrollment and approximately **5%** average tuition rate increases[75](index=75&type=chunk) - Back-up care services revenue increased by **17.7%** primarily due to increased utilization of center-based, in-home, and school-age camp back-up care[75](index=75&type=chunk) - Personnel costs in the full service center-based child care segment increased by **6%**, including a **4%** increase in average hourly wages, and were impacted by reduced pandemic-related government support programs (which reduced operating expenses by **$13.2 million** in Q3 2023)[75](index=75&type=chunk) - Income from operations for the full service center-based child care segment increased by **78%** (**$5.5 million**), while back-up care segment income from operations increased by **35%** (**$18.2 million**). Educational advisory services income from operations decreased by **15%** (**$1.1 million**) due to investments[77](index=77&type=chunk) [Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023](index=29&type=section&id=Nine%20Months%20Ended%20September%2030,%202024%20Compared%20to%20the%20Nine%20Months%20Ended%20September%2030,%202023) Compares YTD 2024 and YTD 2023 financial results, showing significant revenue and net income increases Financial Performance (Nine Months) | Metric | 2024 (In thousands) | 2023 (In thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | Revenue | $2,011,867 | $1,802,609 | +11.6% | | Cost of services | $1,532,792 | $1,386,787 | +10.5% | | Gross profit | $479,075 | $415,822 | +15.2% | | Income from operations | $198,392 | $143,001 | +38.7% | | Net income | $111,068 | $68,699 | +61.7% | - Full service center-based child care revenue increased by **10.8%** due to a **5%** net increase in enrollment and approximately **5%** average tuition rate increases[80](index=80&type=chunk) - Back-up care services revenue increased by **16.3%** primarily due to increased utilization[81](index=81&type=chunk) - Personnel costs in the full service center-based child care segment increased by **7%**, including a **4%** increase in average hourly wages, and were impacted by reduced pandemic-related government support programs (which reduced operating expenses by **$48.3 million** in 2023)[81](index=81&type=chunk) - Income from operations for the full service center-based child care segment increased by **134%** (**$38.1 million**), while back-up care segment income from operations increased by **21%** (**$20.6 million**). Educational advisory services income from operations decreased by **19%** (**$3.2 million**) due to investments[82](index=82&type=chunk) [Non-GAAP Financial Measures and Reconciliation](index=32&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation) Reconciles non-GAAP financial measures to GAAP, explaining their use and showing year-over-year growth Non-GAAP Financial Measures Reconciliation (Three Months) | Metric | Three months ended Sep 30, 2024 (In thousands) | Three months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Adjusted EBITDA | $120,989 | $101,168 | +19.6% | | Adjusted income from operations | $89,396 | $66,824 | +33.8% | | Adjusted net income | $64,901 | $51,121 | +27.0% | | Diluted adjusted earnings per common share | $1.11 | $0.88 | +26.1% | Non-GAAP Financial Measures Reconciliation (Nine Months) | Metric | Nine months ended Sep 30, 2024 (In thousands) | Nine months ended Sep 30, 2023 (In thousands) | Change (YoY) | | :----- | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Adjusted EBITDA | $298,600 | $252,927 | +18.1% | | Adjusted income from operations | $198,392 | $149,041 | +33.1% | | Adjusted net income | $145,823 | $116,235 | +25.4% | | Diluted adjusted earnings per common share | $2.49 | $2.01 | +23.9% | - Non-GAAP financial measures exclude items such as **amortization of intangible assets**, **stock-based compensation expense**, and other costs (e.g., value-added tax expense related to prior periods, interest on deferred consideration)[84](index=84&type=chunk)[85](index=85&type=chunk) - These non-GAAP measures are used to facilitate **comparative assessment of operating performance**, **evaluate internal performance**, and **determine incentive compensation**[86](index=86&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's cash position, operating cash flows, debt, and ability to meet future obligations - Cash and cash equivalents were **$109.9 million** (**$119.1 million** including restricted cash) at September 30, 2024, up from **$71.6 million** (**$89.5 million** including restricted cash) at December 31, 2023[88](index=88&type=chunk) - The company had **$389.8 million** available for borrowing under its **$400 million** revolving credit facility at September 30, 2024[88](index=88&type=chunk) - Net cash provided by operating activities increased to **$216.8 million** for the nine months ended **September 30, 2024**, from **$161.0 million** in the prior year, primarily due to increased net income and favorable working capital timing[91](index=91&type=chunk)[92](index=92&type=chunk) - Net cash used in financing activities increased to **$95.8 million** for the nine months ended **September 30, 2024**, from **$60.5 million** in the prior year, mainly due to **$103.9 million** in payments for deferred and contingent consideration related to acquisitions[91](index=91&type=chunk)[94](index=94&type=chunk) - The company believes its current liquidity sources are **adequate** to fund obligations and liquidity requirements for at least the **next 12 months**[89](index=89&type=chunk) [Critical Accounting Policies](index=36&type=section&id=Critical%20Accounting%20Policies) States that no material changes have occurred to critical accounting policies since the prior annual report - There have been no **material changes** to the company's critical accounting policies since **December 31, 2023**, as discussed in its Annual Report on Form 10-K[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Addresses the company's exposure to interest rate and foreign currency exchange rate risks - The company is exposed to **market risk** from changes in interest rates and foreign currency exchange rates[100](index=100&type=chunk) - No **material changes** in market risk exposure have occurred since **December 31, 2023**[100](index=100&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures, with no material changes in internal control - The Chief Executive Officer and Chief Financial Officer concluded that **disclosure controls and procedures were effective** as of **September 30, 2024**[102](index=102&type=chunk) - No **material changes** in internal control over financial reporting occurred during the quarter ended **September 30, 2024**[102](index=102&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Discusses ongoing legal claims and management's assessment of their potential financial impact - The company is subject to claims, suits, and matters arising in the **ordinary course of business**[104](index=104&type=chunk) - Management believes the resolution of such legal matters will not have a **material adverse effect** on the company's financial position, results of operations, or cash flows[104](index=104&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Refers to the annual report for risk factors, noting no material changes since the last filing - No **material changes** to the company's risk factors have occurred since the prior annual report[105](index=105&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details common stock purchases for tax payments and the status of the share repurchase program - The company purchased **225 shares** of common stock during the three months ended **September 30, 2024**, which were withheld for tax payments due upon the vesting of employee restricted stock unit awards[106](index=106&type=chunk) - No shares were repurchased under the **board-authorized share repurchase program** during the three months ended **September 30, 2024**[106](index=106&type=chunk) - **$198.3 million** remained available under the share repurchase program as of September 30, 2024[106](index=106&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults on senior securities [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that this item is not applicable to the company [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) Confirms no Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the three months ended **September 30, 2024**[108](index=108&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including certifications and XBRL documents - Exhibits include **Principal Executive Officer Certification (31.1, 32.1)** and **Principal Financial Officer Certification (31.2, 32.2)**[109](index=109&type=chunk) - **Inline XBRL documents** (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are filed as exhibits[109](index=109&type=chunk) [Signatures](index=40&type=section&id=Signatures) Confirms the official signing of the Form 10-Q report by the Chief Financial Officer - The report was signed by **Elizabeth Boland, Chief Financial Officer**[113](index=113&type=chunk) - The signing date was **November 7, 2024**[113](index=113&type=chunk)

I gave a buy rating to Bright Horizons Family (NYSE: BFAM ) in June, with my key thesis being that the business will continue to grow for a long period of time given the secularI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value ...

Bright Horizons Family Solutions Inc. (NYSE:BFAM) Q3 2024 Earnings Conference Call November 4, 2024 5:00 PM ET Company Participants Michael Flanagan - VP, IR Stephen Kramer - CEO Elizabeth Boland - CFO Conference Call Participants Andrew Steinerman - J.P. Morgan Manav Patnaik - Barclays George Tong - Goldman Sachs Jeff Meuler - Baird Toni Kaplan - Morgan Stanley Jeff Silber - BMO Capital Markets Josh Chan - UBS Faiza Alwy - Deutsche Bank Harold Antor - Jefferies Operator Greetings, and welcome to the Bright ...

Financial Data and Key Metrics Changes - Total revenue increased by 11% to $719 million, adjusted EBITDA rose by 20% to $121 million, and adjusted EPS grew by 26% to $1.11 per share [9][18] - Adjusted operating income of $89 million represented 12.4% of revenue, a 34% increase year-over-year [18] - The company generated $217 million in cash from operations, compared to $161 million last year, and ended the quarter with $110 million in cash [24] Business Line Data and Key Metrics Changes - Full service child care revenue increased by 9% to $487 million, with occupancy levels averaging in the low 60s [9][19] - Back-up care revenue grew by 18% to $202 million, with adjusted operating income of $70 million, representing 35% of revenue [11][22] - Educational Advisory revenue increased by 4% to $31 million, with an operating margin of 21% [14][22] Market Data and Key Metrics Changes - Enrollment in centers opened for more than one year increased at a low single-digit rate across U.S. and international operations [10] - The U.K. operations showed progress, narrowing losses compared to last year, but still require work to return to pre-pandemic performance levels [10][80] Company Strategy and Development Direction - The company is refining its full-year revenue guidance to approximately $2.675 billion, representing 11% growth, and adjusted EPS range of $3.37 to $3.42 [17][25] - Continued investments in building supply, new care types, and personalized market initiatives are expected to drive growth [13][59] - The company is focused on improving its EdAssist business through team investments, product enhancements, and marketing efforts [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and outlook for Q4, with expectations of continued growth in back-up care and stabilization in full service [8][17] - The company anticipates low single-digit enrollment growth for the remainder of the year and into 2025 [32][69] - Management noted challenges in the bottom cohort of centers, particularly related to occupancy recovery and geographic factors [38][41] Other Important Information - The company held its first in-person client event since the pandemic, reinforcing its commitment to innovation and client engagement [15][16] - The company is maintaining a disciplined approach to M&A, focusing on long-term strategy rather than short-term acquisitions [54] Q&A Session Summary Question: What was the organic constant currency revenue growth in Q3? - Full service revenue growth was 9.4%, with organic constant currency at 8% [26][27] Question: Can you provide a breakdown of enrollment growth? - Enrollment growth was consistent in low single digits, with stronger infant and toddler enrollment aligning with preschool growth [29][30] Question: What are the expectations for occupancy rates? - Occupancy rates are expected to remain in the low 60s for the rest of the year, with gradual recovery anticipated in 2025 [36][37] Question: What are the key challenges in the bottom cohort of centers? - Challenges include geographic imbalances and client center utilization, with specific actions being taken for improvement [41][42] Question: What are the drivers of back-up care growth? - Growth is primarily driven by increased utilization by existing clients rather than new clients [51][52] Question: What is the outlook for EdAssist participation growth? - Participation growth has been muted, influenced by market conditions, but the company is focused on transformation and investment in this area [56][58] Question: How is the company addressing pricing strategies? - The company is considering price increases while balancing service delivery and cost structures, with a cautious approach to future pricing [74][75]

For the quarter ended September 2024, Bright Horizons Family Solutions (BFAM) reported revenue of $719.1 million, up 11.4% over the same period last year. EPS came in at $1.11, compared to $0.88 in the year-ago quarter.The reported revenue represents a surprise of +1.18% over the Zacks Consensus Estimate of $710.72 million. With the consensus EPS estimate being $1.06, the EPS surprise was +4.72%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expe ...

Bright Horizons Family Solutions (BFAM) came out with quarterly earnings of $1.11 per share, beating the Zacks Consensus Estimate of $1.06 per share. This compares to earnings of $0.88 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.72%. A quarter ago, it was expected that this child care and early education services provider would post earnings of $0.72 per share when it actually produced earnings of $0.88, delivering a sur ...

Exhibit 99.1 Bright Horizons Family Solutions Reports Financial Results for Third Quarter of 2024 ® NEWTON, MA - (BUSINESS WIRE) - November 4, 2024 - Bright Horizons Family Solutions Inc. (NYSE: BFAM), a leading provider of high-quality early education and child care, family care solutions, and workforce education services designed to support working families and client employees across life and career stages, today announced financial results for the third quarter of 2024 and updated financial guidance for ...

Wall Street analysts expect Bright Horizons Family Solutions (BFAM) to post quarterly earnings of $1.06 per share in its upcoming report, which indicates a year-over-year increase of 20.5%. Revenues are expected to be $710.72 million, up 10.1% from the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.Before a company reveals it ...

Core Viewpoint - Bright Horizons Family Solutions (BFAM) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][4]. - For the fiscal year ending December 2024, Bright Horizons is projected to earn $3.37 per share, reflecting an 18.7% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Bright Horizons has risen by 7.9%, indicating a positive trend in earnings expectations [8]. Institutional Investor Influence - Institutional investors often base their valuation models on earnings estimates, leading to significant stock transactions that can drive price movements [4][5]. - The upgrade in earnings estimates for Bright Horizons suggests an improvement in the company's underlying business, likely resulting in increased stock prices due to investor confidence [5]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior potential for market-beating returns [9][10]. - The Zacks Rank 2 for Bright Horizons places it among the top 20% of Zacks-covered stocks, suggesting a favorable outlook for near-term price appreciation [10].