PART I. FINANCIAL INFORMATION This part details the company's unaudited financial statements, management's analysis, market risk, and internal controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Bright Horizons' unaudited condensed consolidated financial statements for Q1 2024, with detailed accounting notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents the company's condensed consolidated balance sheets as of March 31, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (In thousands) | Metric (In thousands) | March 31, 2024 | December 31, 2023 | | :-------------------- | :------------- | :---------------- | | Total Assets | $3,791,403 | $3,896,144 | | Total Liabilities | $2,562,134 | $2,683,468 | | Total Stockholders' Equity | $1,229,269 | $1,212,676 | - Total assets decreased by approximately **$104.7 million** from December 31, 2023, to March 31, 2024, primarily driven by decreases in accounts receivable, prepaid expenses, and goodwill[13](index=13&type=chunk) - Total liabilities decreased by approximately **$121.3 million**, mainly due to a reduction in other current liabilities and accounts payable, partially offset by an increase in deferred revenue[13](index=13&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) This section presents the company's condensed consolidated statements of income for Q1 2024 and 2023 Condensed Consolidated Statements of Income (In thousands) | Metric (In thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $622,709 | $553,606 | | Gross Profit | $135,128 | $121,614 | | Income from Operations| $39,937 | $30,645 | | Net Income | $16,989 | $8,126 | | Basic EPS | $0.29 | $0.14 | | Diluted EPS | $0.29 | $0.14 | - Revenue increased by **12.5%** year-over-year, from **$553.6 million** in Q1 2023 to **$622.7 million** in Q1 2024[15](index=15&type=chunk) - Net income more than doubled, increasing by **109.1%** from **$8.1 million** in Q1 2023 to **$17.0 million** in Q1 2024[15](index=15&type=chunk) - Diluted Earnings Per Share (EPS) increased from **$0.14** to **$0.29** year-over-year[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) This section details the company's condensed consolidated statements of comprehensive income (loss) for the first quarter Condensed Consolidated Statements of Comprehensive Income (Loss) (In thousands) | Metric (In thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net Income | $16,989 | $8,126 | | Foreign currency translation adjustments | $(20,319) | $6,880 | | Unrealized gain (loss) on cash flow hedges and investments, net of tax | $2,411 | $(8,899) | | Total other comprehensive loss | $(17,908) | $(2,019) | | Comprehensive income (loss) | $(919) | $6,107 | - The company reported a comprehensive loss of **$0.9 million** in Q1 2024, a significant decrease from a comprehensive income of **$6.1 million** in Q1 2023, primarily due to negative foreign currency translation adjustments[36](index=36&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) This section presents the company's condensed consolidated statements of changes in stockholders' equity for Q1 2024 Condensed Consolidated Statements of Changes in Stockholders' Equity (In thousands, except share data) | Metric (In thousands, except share data) | Balance at Jan 1, 2024 | Balance at Mar 31, 2024 | | :--------------------------------------- | :--------------------- | :---------------------- | | Common Stock Shares | 57,817,593 | 57,953,066 | | Common Stock Amount | $58 | $58 | | Additional Paid-in Capital | $645,894 | $663,406 | | Accumulated Other Comprehensive Loss | $(59,101) | $(77,009) | | Retained Earnings | $625,825 | $642,814 | | Total Stockholders' Equity | $1,212,676 | $1,229,269 | - Total stockholders' equity increased by **$16.6 million** from January 1, 2024, to March 31, 2024, driven by net income and stock-based compensation expense, partially offset by other comprehensive loss[19](index=19&type=chunk)[40](index=40&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section presents the company's condensed consolidated statements of cash flows for Q1 2024 and 2023 Condensed Consolidated Statements of Cash Flows (In thousands) | Cash Flow Activity (In thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $116,301 | $67,313 | | Net cash used in investing activities | $(38,050) | $(18,229) | | Net cash used in financing activities | $(97,632) | $(40,963) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(20,051) | $8,007 | | Cash, cash equivalents and restricted cash — end of period | $69,400 | $59,901 | - Operating cash flow significantly increased by **$49.0 million (72.8%)** year-over-year, primarily due to higher net income and favorable changes in working capital[44](index=44&type=chunk)[125](index=125&type=chunk) - Cash used in investing activities increased by **$19.8 million**, mainly due to increased net purchases of debt securities and a 2024 acquisition in Australia[44](index=44&type=chunk)[144](index=144&type=chunk) - Cash used in financing activities increased by **$56.7 million**, primarily due to a **$97.7 million** payment of deferred consideration for the 2022 acquisition of Only About Children[44](index=44&type=chunk)[127](index=127&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed consolidated financial statements, covering accounting policies and key financial details [1. Organization and Basis of Presentation](index=10&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note details the company's organizational structure, business operations, and basis of financial statement presentation - Bright Horizons provides center-based early education, child and adult/elder care, tuition assistance, and educational advisory services across the US, UK, Netherlands, Australia, and India[48](index=48&type=chunk) - As of March 31, 2024, the Company operated **1,044** early education and child care centers[48](index=48&type=chunk) - Effective January 1, 2024, the company realigned its organizational structure, moving Sittercity operations from Educational Advisory and Other Services to the Back-up Care segment, with 2023 segment information recast for comparability[28](index=28&type=chunk)[48](index=48&type=chunk) - The company recorded a **$6.0 million** expense in Q1 2023 for a prior period value-added tax error, with **$4.3 million** in cost of services and **$1.7 million** in SG&A[48](index=48&type=chunk) - The company's share repurchase program, authorized for up to **$400 million**, had **$198.3 million** remaining as of March 31, 2024, with no repurchases made in Q1 2024 or Q1 2023[48](index=48&type=chunk) - Most pandemic-related government support programs, which reduced cost of services by **$21.6 million** and operating subsidies by **$7.4 million** in Q1 2023, expired by September 30, 2023[48](index=48&type=chunk) [2. Revenue Recognition](index=11&type=section&id=2.%20REVENUE%20RECOGNITION) This note explains the company's revenue recognition policies and provides a breakdown of revenue by segment and region Revenue by Segment/Region (In thousands) | Segment/Region (In thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Full service center-based child care | $483,640 | $430,191 | | Back-up care | $114,672 | $99,130 | | Educational advisory services | $24,397 | $24,285 | | Total Revenue | $622,709 | $553,606 | | North America | $448,011 | $400,489 | | International | $174,698 | $153,117 | - Total revenue increased by **12.5%** year-over-year, with significant growth in full service center-based child care (**12.4%** increase from enrollment and tuition hikes) and back-up care (**15.7%** increase from utilization)[49](index=49&type=chunk)[135](index=135&type=chunk) - The company recognized **$169.3 million** in revenue in Q1 2024 from deferred revenue balances at the beginning of the period, up from **$140.8 million** in Q1 2023[50](index=50&type=chunk) [3. Leases](index=11&type=section&id=3.%20LEASES) This note details the company's lease arrangements, including lease expenses, terms, and liabilities Lease Expense (In thousands) | Lease Expense (In thousands) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | Operating lease expense | $37,731 | $37,968 | | Variable lease expense | $10,771 | $11,175 | | Total lease expense | $48,502 | $49,143 | - Total lease expense slightly decreased to **$48.5 million** in Q1 2024 from **$49.1 million** in Q1 2023[66](index=66&type=chunk) - As of March 31, 2024, the weighted average remaining lease term was **10 years**, and the weighted average discount rate was **7.1%**[67](index=67&type=chunk) Maturity of Lease Liabilities (In thousands) | Maturity of Lease Liabilities (In thousands) | Operating Leases | | :------------------------------------------- | :--------------- | | Remainder of 2024 | $108,275 | | 2025 | $151,673 | | 2026 | $145,496 | | 2027 | $136,311 | | 2028 | $125,397 | | Thereafter | $588,310 | | Total lease payments | $1,255,462 | | Present value of lease liabilities | $888,663 | [4. Acquisitions](index=12&type=section&id=4.%20ACQUISITIONS) This note provides information on the company's acquisition activities, including cash paid and goodwill recognized - In Q1 2024, the Company acquired one center in Australia for **$2.5 million** cash, recording **$2.3 million** in goodwill and **$0.4 million** in intangible assets[70](index=70&type=chunk) - In January 2024, the Company paid **$106.5 million** in deferred consideration for the 2022 acquisition of Only About Children[70](index=70&type=chunk) - In 2023, the Company acquired ten centers (four in the US, six in Australia) for **$39.5 million** cash, resulting in **$37.2 million** goodwill and **$4.0 million** intangible assets[71](index=71&type=chunk) [5. Goodwill and Intangible Assets](index=13&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) This note details the company's goodwill and intangible assets, including changes due to acquisitions and amortization Goodwill (In thousands) | Goodwill (In thousands) | Balance at Jan 1, 2024 | Balance at Mar 31, 2024 | | :---------------------- | :--------------------- | :---------------------- | | Full service center-based child care | $1,539,264 | $1,524,478 | | Back-up care | $209,465 | $209,258 | | Educational advisory services | $37,676 | $37,676 | | Total Goodwill | $1,786,405 | $1,771,412 | - Goodwill decreased by **$15.0 million** from January 1, 2024, to March 31, 2024, primarily due to foreign currency translation effects, partially offset by additions from acquisitions[56](index=56&type=chunk) Intangible Assets (In thousands) | Intangible Assets (In thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------- | :------------- | :---------------- | | Definite-lived intangible assets, net | $27,895 | $35,985 | | Indefinite-lived intangible assets, net | $180,535 | $180,591 | | Total Intangible Assets, net | $208,430 | $216,576 | - Net intangible assets decreased by **$8.1 million** from December 31, 2023, to March 31, 2024, mainly due to amortization of definite-lived assets[56](index=56&type=chunk)[58](index=58&type=chunk) [6. Credit Arrangements and Debt Obligations](index=14&type=section&id=6.%20CREDIT%20ARRANGEMENTS%20AND%20DEBT%20OBLIGATIONS) This note outlines the company's credit arrangements, debt obligations, and interest rate risk management strategies Long-term Debt (In thousands) | Long-term Debt (In thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Term loan B | $586,500 | $588,000 | | Term loan A | $377,500 | $380,000 | | Deferred financing costs and original issue discount | $(4,940) | $(5,236) | | Total debt | $959,060 | $962,764 | | Less current maturities | $(21,000) | $(18,500) | | Long-term debt | $938,060 | $944,264 | - Long-term debt decreased slightly from **$944.3 million** at December 31, 2023, to **$938.1 million** at March 31, 2024[73](index=73&type=chunk) - The effective interest rate for term loans was **7.50%** at March 31, 2024, and the weighted average interest rate for term loans and revolving credit facility was **7.51%** for Q1 2024 (prior to hedges)[84](index=84&type=chunk) - The company uses interest rate cap agreements as cash flow hedges to manage variable interest rate risk, with **$900 million** notional value expiring in October 2025 and October 2026[62](index=62&type=chunk) Derivative Financial Instruments (In thousands) | Derivative Financial Instruments (In thousands) | March 31, 2024 | December 31, 2023 | | :-------------------------------------------- | :------------- | :---------------- | | Interest rate caps - asset | $31,757 | $28,968 | [7. Earnings Per Share](index=17&type=section&id=7.%20EARNINGS%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share for the reporting periods EPS Metrics (In thousands, except share data) | EPS Metric (In thousands, except share data) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income | $16,989 | $8,126 | | Basic EPS | $0.29 | $0.14 | | Diluted EPS | $0.29 | $0.14 | | Weighted average common shares outstanding (basic) | 57,878,401 | 57,603,866 | | Weighted average common shares outstanding (diluted) | 58,310,405 | 57,709,909 | - Basic and diluted EPS both increased from **$0.14** in Q1 2023 to **$0.29** in Q1 2024[88](index=88&type=chunk) - Equity awards for **1.6 million** shares in Q1 2024 and **2.0 million** shares in Q1 2023 were excluded from diluted EPS calculations as their effect was anti-dilutive[88](index=88&type=chunk) [8. Income Taxes](index=17&type=section&id=8.%20INCOME%20TAXES) This note details the company's income tax expense and effective tax rates, including factors influencing changes - The effective income tax rate decreased to **35.3%** in Q1 2024 from **54.2%** in Q1 2023[89](index=89&type=chunk) - The decrease in the effective tax rate was influenced by changes in income before income tax, jurisdictional mix, and the impact of unbenefited losses and stock-based compensation tax effects[89](index=89&type=chunk) - Unrecognized tax benefits were **$4.7 million** at March 31, 2024, with potential changes of up to **$4.3 million** over the next 12 months[81](index=81&type=chunk) [9. Fair Value Measurements](index=18&type=section&id=9.%20FAIR%20VALUE%20MEASUREMENTS) This note describes the company's fair value measurements for financial instruments, including interest rate caps and investments - The fair value of interest rate cap agreements, classified as Level 2, increased from **$29.0 million** at December 31, 2023, to **$31.8 million** at March 31, 2024[106](index=106&type=chunk) - Investments in debt securities (available-for-sale), classified as Level 1, had a fair value of **$34.9 million** at March 31, 2024, up from **$23.9 million** at December 31, 2023[107](index=107&type=chunk) - The contingent consideration liability, classified as Level 3, increased from **$11.5 million** at January 1, 2024, to **$14.3 million** at March 31, 2024, and was settled early in April 2024[83](index=83&type=chunk)[107](index=107&type=chunk) [10. Accumulated Other Comprehensive Loss](index=19&type=section&id=10.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This note details the components of accumulated other comprehensive loss and changes during the reporting period Accumulated Other Comprehensive Loss Components (In thousands) | Component (In thousands) | Balance at Jan 1, 2024 | Balance at Mar 31, 2024 | | :----------------------- | :--------------------- | :---------------------- | | Foreign currency translation adjustments | $(76,130) | $(96,449) | | Unrealized gain (loss) on cash flow hedges | $17,100 | $19,487 | | Unrealized gain (loss) on investments | $(71) | $(47) | | Total Accumulated Other Comprehensive Loss | $(59,101) | $(77,009) | - Accumulated other comprehensive loss increased from **$(59.1) million** at January 1, 2024, to **$(77.0) million** at March 31, 2024, primarily due to negative foreign currency translation adjustments[108](index=108&type=chunk) [11. Segment Information](index=20&type=section&id=11.%20SEGMENT%20INFORMATION) This note provides financial information by operating segment, including revenue and income from operations Segment Performance (In thousands) | Segment (In thousands) | Revenue (Q1 2024) | Revenue (Q1 2023) | Income from Operations (Q1 2024) | Income from Operations (Q1 2023) | | :--------------------- | :---------------- | :---------------- | :------------------------------- | :------------------------------- | | Full service center-based child care | $483,640 | $430,191 | $21,444 | $8,433 | | Back-up care | $114,672 | $99,130 | $15,983 | $17,773 | | Educational advisory services | $24,397 | $24,285 | $2,510 | $4,439 | | Total | $622,709 | $553,606 | $39,937 | $30,645 | - Full service center-based child care revenue grew by **12.4%**, and its income from operations surged by **154.3%** year-over-year, driven by enrollment growth and tuition increases[110](index=110&type=chunk)[138](index=138&type=chunk) - Back-up care revenue increased by **15.7%**, but its income from operations decreased by **10.1%** due to higher overhead costs, including a **$2.3 million** charge for early settlement of contingent consideration[110](index=110&type=chunk)[138](index=138&type=chunk) - Educational advisory services revenue remained flat, while income from operations decreased by **43.5%** due to investments in product design, technology, and marketing[110](index=110&type=chunk)[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, liquidity, and cash flows for the three months ended March 31, 2024, compared to the same period in 2023. It highlights strong revenue growth, particularly in full-service child care and back-up care, driven by enrollment increases and utilization, while also addressing challenges like labor market tightness and increased costs. The discussion includes a reconciliation of non-GAAP financial measures and an analysis of cash flow activities [Special Note Regarding Forward-Looking Statements](index=21&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights forward-looking statements and associated risks and uncertainties in the report - The report contains forward-looking statements regarding future events, financial condition, and operational results, which are subject to risks and uncertainties[98](index=98&type=chunk) - Key areas of forward-looking statements include results of operations, financial condition, impacts of global health pandemics, labor costs, enrollment recovery, strategic priorities, acquisitions, and debt obligations[98](index=98&type=chunk) [Overview](index=21&type=section&id=Overview) This section provides an overview of Bright Horizons' business, operational highlights, and market challenges - Bright Horizons is a leading provider of education and care services, operating **1,044** early education and child care centers globally as of March 31, 2024[133](index=133&type=chunk) - The company reported strong year-over-year revenue growth, with a **12%** increase in full service center-based child care and **6%** net enrollment growth, alongside a **16%** increase in back-up care revenue due to increased utilization[133](index=133&type=chunk) - Occupancy rates for a cohort of **800** centers showed improvement, with **44%** over **70%** enrolled and **42%** between **40-70%** enrolled[133](index=133&type=chunk) - The company continues to face challenges from a tight labor market, varying enrollment demands, increased costs, and macroeconomic conditions, leading to ongoing center closures to optimize its portfolio[133](index=133&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, costs, and income from operations Consolidated Results of Operations (In thousands, except percentages) | Metric (In thousands, except percentages) | Q1 2024 Amount | Q1 2024 % of Revenue | Q1 2023 Amount | Q1 2023 % of Revenue | | :---------------------------------------- | :------------- | :------------------- | :------------- | :------------------- | | Revenue | $622,709 | 100.0% | $553,606 | 100.0% | | Cost of services | $487,581 | 78.3% | $431,992 | 78.0% | | Gross profit | $135,128 | 21.7% | $121,614 | 22.0% | | Selling, general and administrative expenses | $87,546 | 14.1% | $82,771 | 15.0% | | Amortization of intangible assets | $7,645 | 1.2% | $8,198 | 1.5% | | Income from operations | $39,937 | 6.4% | $30,645 | 5.5% | | Net income | $16,989 | 2.7% | $8,126 | 1.5% | - Revenue increased by **$69.1 million (12.5%)** year-over-year, driven by full service child care (**12.4%** increase from enrollment and tuition hikes) and back-up care (**15.7%** increase from utilization)[135](index=135&type=chunk)[136](index=136&type=chunk) - Cost of services increased by **$55.6 million (13%)**, primarily due to higher labor costs and reduced pandemic-related government support programs, which had provided **$21.6 million** in Q1 2023[136](index=136&type=chunk) - Gross profit increased by **$13.5 million (11%)**, but gross profit margin remained consistent at **22%** of revenue[136](index=136&type=chunk) - Selling, General and Administrative (SGA) expenses increased by **$4.8 million (6%)**, mainly due to post-pandemic business support, higher labor costs, and a **$2.3 million** charge for early settlement of contingent consideration[105](index=105&type=chunk) - Income from operations increased by **$9.3 million (30%)**, with full service child care segment income up **154%** due to revenue growth, while back-up care and educational advisory services saw declines in operating income[105](index=105&type=chunk)[138](index=138&type=chunk) - Net interest expense increased to **$13.7 million** from **$12.9 million**, driven by increased borrowings and higher interest rates, with a weighted average interest rate of **5.05%** (including hedges) for Q1 2024[138](index=138&type=chunk) - Income tax expense decreased slightly to **$9.3 million** from **$9.6 million**, with the effective tax rate dropping to **35%** from **54%** due to changes in income mix and lower impact from stock-based compensation tax effects[119](index=119&type=chunk) [Non-GAAP Financial Measures and Reconciliation](index=27&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation) This section presents and reconciles non-GAAP financial measures used to assess operating performance Non-GAAP Financial Measures (In thousands, except share data) | Non-GAAP Metric (In thousands, except share data) | Q1 2024 Amount | Q1 2023 Amount | | :------------------------------------------------ | :------------- | :------------- | | Adjusted EBITDA | $74,981 | $69,845 | | Adjusted income from operations | $39,937 | $36,685 | | Adjusted net income | $29,621 | $28,275 | | Diluted adjusted earnings per common share | $0.51 | $0.49 | - Adjusted EBITDA increased by **$5.1 million (7%)**, and adjusted income from operations increased by **$3.3 million (9%)**, primarily due to gross profit contributions from full service child care[119](index=119&type=chunk) - Adjusted net income increased by **$1.3 million (5%)**, driven by higher adjusted income from operations, partially offset by increased interest expense[119](index=119&type=chunk) - Non-GAAP measures are used to assess operating performance, facilitate comparisons, and evaluate incentive compensation, but have limitations as analytical tools[140](index=140&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, capital resources, and cash flow activities - The company had a working capital deficit of **$338.2 million** at March 31, 2024, an improvement from **$352.5 million** at December 31, 2023[124](index=124&type=chunk) - Primary liquidity sources are existing cash (**$63.7 million** at March 31, 2024), cash flows from operations, and **$389.8 million** available under the revolving credit facility[141](index=141&type=chunk) - The company believes current funds and borrowing capacity are adequate for at least the next 12 months, but significant acquisitions or disruptions could necessitate additional financing[143](index=143&type=chunk) [Cash Provided by Operating Activities](index=29&type=section&id=Cash%20Provided%20by%20Operating%20Activities) This section details net cash provided by the company's operating activities and key drivers - Net cash provided by operating activities increased to **$116.3 million** in Q1 2024 from **$67.3 million** in Q1 2023, driven by higher net income and favorable working capital timing[125](index=125&type=chunk) [Cash Used in Investing Activities](index=29&type=section&id=Cash%20Used%20in%20Investing%20Activities) This section details net cash used in the company's investing activities, including acquisitions and debt securities - Net cash used in investing activities increased to **$38.1 million** in Q1 2024 from **$18.2 million** in Q1 2023, primarily due to increased net purchases of debt securities (**$16.2 million**) and a **$2.5 million** acquisition in Australia[144](index=144&type=chunk) [Cash Used in Financing Activities](index=30&type=section&id=Cash%20Used%20in%20Financing%20Activities) This section details net cash used in the company's financing activities, including debt payments and equity awards - Net cash used in financing activities increased to **$97.6 million** in Q1 2024 from **$41.0 million** in Q1 2023, mainly due to a **$97.7 million** payment of deferred consideration for the 2022 Only About Children acquisition[127](index=127&type=chunk) - Proceeds from employee equity awards increased by **$1.2 million** year-over-year, with **$5.5 million** from stock option exercises in Q1 2024[127](index=127&type=chunk) [Debt](index=30&type=section&id=Debt) This section provides details on the company's debt structure, credit facilities, and compliance with covenants Debt (In thousands) | Debt Type (In thousands) | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | Term loan B | $586,500 | $588,000 | | Term loan A | $377,500 | $380,000 | | Total Debt | $959,060 | $962,764 | - The company's senior secured credit facilities include a **$600 million** Term Loan B, a **$400 million** Term Loan A, and a **$400 million** multi-currency revolving credit facility[146](index=146&type=chunk) - As of March 31, 2024, **$389.8 million** was available for borrowing under the revolving credit facility, with no outstanding borrowings[165](index=165&type=chunk) - The blended weighted average interest rate for term loans and the revolving credit facility was **5.05%** in Q1 2024 (including hedges), up from **3.97%** in Q1 2023[165](index=165&type=chunk) - The company was in compliance with its financial covenants under the senior secured credit facilities at March 31, 2024[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the company's exposure to interest rate or foreign currency exchange rate fluctuations since December 31, 2023 - No material changes in exposure to interest rate or foreign currency exchange rate fluctuations since December 31, 2023[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of March 31, 2024, and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section covers the Evaluation of Disclosure Controls and Procedures - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2024[150](index=150&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section covers the Changes in Internal Control over Financial Reporting - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024[132](index=132&type=chunk) PART II. OTHER INFORMATION This part provides additional information including legal proceedings, risk factors, equity sales, debt, and other disclosures [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and suits in the ordinary course of business, generally covered by insurance - The company is subject to ordinary course legal claims, generally covered by insurance[152](index=152&type=chunk) - Management believes legal matters will not materially adversely affect financial position, results of operations, or cash flows[152](index=152&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to risk factors previously disclosed in the company's Annual Report - No material changes to risk factors since the Annual Report on Form 10-K for December 31, 2023[153](index=153&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details equity security purchases for tax withholdings and confirms no share repurchases under the program Equity Securities Purchases | Period | Total Shares Purchased (1) | Average Price Paid per Share (b) | | :-------------------------- | :------------------------- | :------------------------------- | | January 1, 2024 to January 31, 2024 | — | — | | February 1, 2024 to February 29, 2024 | 6,203 | $106.85 | | March 1, 2024 to March 31, 2024 | 753 | $113.51 | | Total | 6,956 | | - The company purchased **6,956** shares during Q1 2024, which were withheld for tax payments upon vesting of employee restricted stock awards[155](index=155&type=chunk)[169](index=169&type=chunk) - No shares were repurchased under the **$400 million** board-authorized share repurchase program during Q1 2024, with **$198.3 million** remaining available[155](index=155&type=chunk)[169](index=169&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred[170](index=170&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[171](index=171&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section discloses a COO's Rule 10b5-1 trading plan and confirms no other officer/director trading arrangements - Mary Lou Burke Afonso, COO, adopted a Rule 10b5-1 trading plan to sell up to **22,300** shares by December 2, 2024[158](index=158&type=chunk) - No other directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024[158](index=158&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents - Exhibits include certifications (**31.1**, **31.2**, **32.1**, **32.2**) and Inline XBRL documents (**101.INS**, **101.SCH**, **101.CAL**, **101.DEF**, **101.LAB**, **101.PRE**, **104**)[157](index=157&type=chunk) [Signatures](index=34&type=section&id=Signatures) This section contains the signature of the duly authorized officer, Elizabeth Boland, Chief Financial Officer, certifying the filing of the report on behalf of Bright Horizons Family Solutions Inc. on May 6, 2024 - The report was signed by Elizabeth Boland, Chief Financial Officer, on May 6, 2024[161](index=161&type=chunk)

Bright Horizons Family Solutions Inc. (NYSE:BFAM) Q1 2024 Earnings Conference Call May 2, 2024 5:00 PM ET Company Participants Michael Flanagan – Vice President, Investor Relations Stephen Kramer – Chief Executive Officer Elizabeth Boland – Chief Financial Officer Conference Call Participants Andrew Steinerman – JPMorgan George Tong – Goldman Sachs Josh Chan – UBS Manav Patnaik – Barclays Jeff Meuler – Baird Toni Kaplan – Morgan Stanley Jeff Silber – BMO Capital Markets Operator Greetings, and welcome to th ...

® NEWTON, MA - (BUSINESS WIRE) - May 2, 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 first quarter of 2024 and reaffirmed financial guidance for 2024 initially provided on February 13, 2024. Income from operations was $39.9 million for the firs ...

Investors interested in stocks from the Schools sector have probably already heard of Universal Technical Institute (UTI) and Bright Horizons Family Solutions (BFAM) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets compan ...

NEWTON, Mass.--(BUSINESS WIRE)--Bright Horizons (NYSE: BFAM), a leading education and care company, announces the anticipated next season of The Work-Life Equation Podcast. This season, Bright Horizons Chief Digital and Transformation Officer Priya Krishnan welcomes Paul Sullivan, founder of The Company of Dads, as the new co-host. Upcoming episodes promise engaging dialogues, compelling stories, and valuable insights from corporate leaders, public figures, and individuals navigating the delicate balance of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission File Number 001-35780 BRIGHT HORIZONS FAMILY SOLUTIONS INC. (Exact name of registrant as specified in its charter) Delaware 80-0188269 (State or other jurisdi ...

Shares of Bright Horizons Family Solutions (BFAM 10.37%) jumped 10.3% on Wednesday after the child care and workforce education services provider delivered stronger-than-expected quarterly results.Bright Horizons nurtures a solid quarterBright Horizons' fourth-quarter 2023 revenue grew 16% year over year to $616 million, while its adjusted (non-generally accepted accounting principles, or non-GAAP) net income rose 9% to $48 million, or $0.83 per share. Wall Street analysts, on average, were only modeling ea ...

Financial Data and Key Metrics Changes - For the full year 2023, the company reported revenue of $2.4 billion, representing a growth of 20% compared to 2022, with adjusted earnings per share (EPS) of $2.84, an increase of 9% [6][21] - In Q4, total revenue increased 16% to $616 million, yielding adjusted EBITDA of $99 million and adjusted EPS of $0.83, an increase of 8% from the prior year [21][48] - Interest expense increased by $2 million to $13 million in Q4, and the structural tax rate on adjusted net income rose to 28.3%, an increase of 200 basis points over Q4 of 2022 [13] Business Line Data and Key Metrics Changes - Full Service revenue for Q4 was $447 million, up 15%, driven by increased enrollment and pricing, with occupancy levels averaging 58% to 60% [6][26] - Back-Up Care revenue grew 24% in Q4 to $135 million, with adjusted operating income at 30% of revenue, or $41 million, growing 25% over the prior year [28][45] - The education advisory segment reported revenue of $34 million in Q4, with notable new client launches [46][51] Market Data and Key Metrics Changes - U.S. enrollment increased by 10% in Q4, while international enrollment grew in the mid-single digits [44] - In the U.K., the Full Service business has been unprofitable, losing approximately $30 million in adjusted operating income in 2023, but improvements are expected in 2024 [12][44] Company Strategy and Development Direction - The company is rationalizing its U.K. footprint, having closed 12 centers in 2023 and identifying an additional 20 to 30 centers for closure over the next 12 to 18 months [27][60] - The focus is on expanding Back-Up Care as a structurally larger contributor to future earnings, with significant growth opportunities anticipated [8][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the effects of the end of ARPA funding would unfold over 2024 and into 2025, with competitors adjusting pricing and staffing in response [34][58] - For 2024, the company expects revenue to be between $2.6 billion and $2.7 billion, translating to growth of 8% to 12% [30][47] Other Important Information - The company generated $256 million in cash from operations in 2023, compared to $188 million in 2022, and ended the year with $72 million in cash [29] - A minor change in segment reporting will impact growth comparisons in the education advisory and Back-Up Care segments starting Q1 2024 [52] Q&A Session Summary Question: What are the effects of the end of ARPA funding on the industry? - Management indicated that the effects would transpire over 2024 and into 2025, with competitors adjusting pricing and staffing [34][58] Question: What is the expected center count by year-end 2024? - The company expects to close a similar number of centers as in 2023, resulting in a net reduction of approximately 25 centers [35][60] Question: What occupancy rates are assumed in the guidance for 2024? - The company anticipates occupancy rates to average between 60% to 65% for the year, with a seasonal cadence [83] Question: How sustainable is the double-digit growth rate for Back-Up Care? - Management sees the opportunity to continue driving 10% to 12% growth over many years, primarily through expanding user penetration and usage [92] Question: Can you elaborate on the $36 million impairment? - The impairment relates to centers and includes right-of-use assets and leasehold improvements for underperforming centers [72][73]

For the quarter ended December 2023, Bright Horizons Family Solutions (BFAM) reported revenue of $615.65 million, up 16.3% over the same period last year. EPS came in at $0.83, compared to $0.77 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $588.63 million, representing a surprise of +4.59%. The company delivered an EPS surprise of +13.70%, with the consensus EPS estimate being $0.73.While investors closely watch year-over-year changes in headline numbers -- revenu ...

Bright Horizons Family Solutions (BFAM) came out with quarterly earnings of $0.83 per share, beating the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.77 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 13.70%. A quarter ago, it was expected that this child care and early education services provider would post earnings of $0.80 per share when it actually produced earnings of $0.88, delivering a su ...