Q2 2026 Bright Horizons Family Solutions Inc Earnings Call Transcript
Key Points
- Revenue expanded by 7% to $779 million, with adjusted EPS increasing 20% to $1.28, both ahead of expectations.
- Backup Care revenue grew 19% to $194 million, accelerating from 12% growth in the first quarter, driven by strong usage growth.
- Full Service occupancy improved sequentially to high 60% range (70% excluding Australia), with enrollment in centers open over a year up approximately 1% excluding Australia.
- Adjusted operating margins expanded 95 basis points to 12.7%, with Backup Care margins up 80 basis points to 26%.
- The company raised its full-year adjusted EPS outlook to $5.05-$5.15 and increased Backup Care revenue growth expectations to 13%-15%.
- New client wins and expansions, including transitioning three centers from a leading academic medical center and adding new Fortune 500 clients, demonstrate growth opportunities.
- Strong cash generation of $95 million from operations in Q2, supporting $250 million in share repurchases while maintaining net leverage at 2.2 times.
- Full Service revenue growth was modest at 3%, impacted by a 250 basis point headwind from center closures and enrollment declines in Australia.
- Australia operations continue to underperform, with enrollment contraction causing a 100 basis point headwind and expected to lose $20-$25 million in 2026.
- The company closed seven centers in Q2, and expects further closures, with 25-50 centers identified as candidates for closure beyond this year.
- Educational Advisory revenue was flat year-over-year, with lower participant engagement in Ed Assist offsetting growth in College Coach.
- Net interest expense increased $3 million year-over-year due to higher borrowings and rates, and the effective tax rate rose to 28.75% due to non-deductible losses in Australia.
- Full Service adjusted operating margin expansion was limited to 50 basis points, and the company expects margins to remain relatively flat for the year due to Australia headwinds.
- Q3 revenue growth is expected to moderate to 4%-5%, with Full Service growth slowing to 50-100 basis points due to FX and closure headwinds.
Greetings. Welcome to the Bright Horizons Family Solutions Second Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the form of presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Please note that this conference is being recorded.
I will now turn the conference over to Michael Flanagan, Group Vice President, Strategic Finance at Bright Horizons Family Solutions.
Thank you, Michael. You may begin.
Thanks, Liz, and welcome to the Bright Horizons second quarter earnings call. Before we begin, please note that today's call is being webcast and a recording will be available under the Investor Relations section of our website at investors.brighthorizons.com.
As a reminder to participants, any forward-looking statements made on this call, including those regarding future business, financial
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
