Financial Data and Key Metrics Changes - In Q4 2025, revenue increased by 9% to $734 million, and Adjusted EPS rose by 17% to $1.15, both exceeding expectations [5][16] - For the full year, revenue reached $2.93 billion, up 9% year-over-year, and Adjusted EPS was $4.55, representing a 31% growth [5][14] Business Line Data and Key Metrics Changes - Back-Up Care revenue grew by 17% in Q4 to $183 million, with full-year revenue increasing by 19% to $728 million [6][7] - Full Service revenue increased by 6% in Q4 to $515 million, driven by tuition increases and enrollment growth [9][18] - Ed Advisory revenue rose by 10% in Q4 to $36 million, with full-year revenue growing by 9% to $125 million [11][19] Market Data and Key Metrics Changes - Back-Up Care's utilization was driven by both unplanned care disruptions and predictable needs, indicating strong demand [6][17] - Enrollment in centers open for more than one year increased by approximately 1% in Q4, with occupancy averaging in the mid-60% range [10][18] Company Strategy and Development Direction - The company aims to scale the Back-Up Care business by expanding unique users and increasing frequency of use among existing clients [8] - The focus remains on serving families where they work and live, while continuing to rationalize locations that do not meet strategic criteria [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the business model and long-term growth opportunities, highlighting a strong finish to 2025 [5][15] - For 2026, the company expects revenue in the range of $3.075 billion to $3.125 billion, with Adjusted EPS projected between $4.90 and $5.10 [15][21] Other Important Information - The company repurchased $225 million of shares in 2025, strengthening its balance sheet [14][20] - The 2026 outlook includes expected revenue growth of 5%-6.5% and continued focus on improving operating margins [21][22] Q&A Session Summary Question: Full Service margin outlook and center closures - Management indicated an expected margin improvement of 25-50 basis points in Full Service for 2026, with most closed centers being loss-making [25][26] Question: Health and safety protocols and local market risks - Management emphasized a commitment to high-quality care and strong communication with families, noting stability in client relationships despite recent incidents [28][29] Question: Pricing and enrollment growth assumptions - Pricing increases for 2026 are expected to average around 4%, with enrollment growth projected at approximately 100 basis points [36] Question: New York City exposure and UPK opportunities - Management highlighted a strong relationship with the city regarding UPK and expressed confidence in future opportunities for younger age groups [39][40] Question: Drivers of growth in Back-Up Care - The majority of growth is expected to come from existing clients, with a focus on increasing unique users and frequency of use [61] Question: Enrollment season and center count - Management noted a stable fall enrollment season and plans to open around 20 centers in 2026 while closing 45-50 underperforming centers [70][71]

Financial Data and Key Metrics Changes - The company reported Q2 revenue of $700 million, a 1.5% increase year-over-year, driven by overall tuition growth and contributions from newer sites [24] - Same center revenue increased to $638 million from $632 million a year ago, indicating operational maturity of recently opened or acquired centers [24] - Net income rose by over $10 million, a 35% increase from last year, benefiting from lower interest expenses due to deleveraging actions [30] - Adjusted EBITDA for Q2 was $82 million, down 5% year-over-year, with an adjusted EBITDA margin of 12% [31] - Adjusted net income for Q2 was $26 million, doubling from $13 million last year, with adjusted EPS increasing to $0.22 from $0.15 [32] Business Line Data and Key Metrics Changes - The Champions business, which focuses on before and after school programs, saw revenue grow by 8% year-over-year to $52 million, with 99 net new sites added [28] - The company opened three new centers in Q2 and completed nine acquisitions, bringing the total to 14 tuck-in acquisitions for the first half of the year [29] Market Data and Key Metrics Changes - Average weekly full-time enrollments declined by 1.4% year-over-year, leading to a 130 basis point decrease in same center occupancy [11] - Same center occupancy ended Q2 at 71%, down from the previous year [24] Company Strategy and Development Direction - The company is focused on enhancing operational performance in underperforming centers through a structured initiative called the opportunity region, which provides tailored support [12] - There is a strong emphasis on digital tools to improve operational efficiency and family engagement at the center level [14] - The company aims to accelerate the adoption of employer-sponsored tuition benefit programs, leveraging new federal tax credits to enhance partnerships with employers [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for child care services, stating that demand from parents exceeds supply across the U.S. [58] - The company anticipates challenges in enrollment and occupancy in the near term but remains optimistic about long-term growth potential [38] - The outlook for 2025 has been refined, with expected revenue between $2.75 billion and $2.8 billion, and adjusted EBITDA between $310 million and $320 million [34] Other Important Information - The company has seen a significant reduction in interest expenses due to debt repayment, which is expected to further strengthen net income and cash flow [32] - The company is modeling an effective tax rate of about 27% for 2025 [36] Q&A Session Summary Question: Enrollment trends and local market issues - Management noted that enrollment challenges are more localized rather than industry-wide, with specific centers experiencing declines [40][42] Question: Strategy around center closures - The company continues to evaluate centers on an individual basis, with a willingness to close underperforming centers as needed [45][46] Question: Drivers of gross margin compression - Management indicated that occupancy decline is impacting margins, making it harder to leverage labor and other costs [50][52] Question: Confidence in enrollment being a local issue - Management reiterated that while there are local dynamics affecting enrollment, overall demand remains strong [58][60] Question: Changes in visibility dynamics for occupancy - Management acknowledged that occupancy is not where they wanted it to be but expressed confidence in other growth drivers [62][64] Question: Labor costs and stability - Labor costs have remained stable, with high retention rates among teachers [99][100]