BFAM

Recent sector commentary from Zacks, highlighting Bright Horizons Family Solutions (BFAM) alongside UL Solutions, has refocused attention on BFAM’s earnings outlook and valuation. This has prompted investors to reassess the childcare provider’s stock. Bright Horizons Family Solutions’ share price has shown mixed momentum, with a 14.2% 90 day share price return contrasting with a year to date share price decline of 24.7%, while the 1 year total shareholder return is down 36.6%. This suggests investors are reassessing both growth potential and risk after the improved earnings outlook highlighted by Zacks. Compare Bright Horizons Family Solutions with a curated group of workplace and service-focused companies by scanning the 19 high quality undiscovered gems that analysts are watching for potential re-rating catalysts. After a sharp 90 day rebound yet a weak 1 year and year to date track record, investors are asking whether Bright Horizons Family Solutions still offers meaningful upside or if the bulk of the repricing is already in. At a last close of $74.81 versus a narrative fair value of $91.11, Bright Horizons Family Solutions is framed as undervalued, with that gap tied directly to its long term earnings and margin assumptions. Read the complete narrative. Want to see what sits behind that margin story? The fair value hinges on a specific path for revenue, profitability and the earnings multiple. Curious which assumptions carry the most weight in this narrative and how they connect to that $91.11 figure? The full breakdown joins those pieces together so you can evaluate the gap for yourself. Result: Fair Value of $91.11 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Bright Horizons Family Solutions still faces pressure from underperforming centers and wage inflation, which could limit occupancy recovery and squeeze margins if conditions worsen. Find out about the key risks to this Bright Horizons Family Solutions narrative. While the narrative fair value frames Bright Horizons Family Solutions as undervalued at $74.81 versus $91.11, the current 20.8x P/E looks demanding next to the US Consumer Services industry on 15.2x and peers on 13.5x. The fair ratio of 24.3x suggests the market could still move either way. Which reference point matters more for you? See what the numbers say about this price — find out in our valuation breakdown. With mixed signals around Bright Horizons Family Solutions so far, the key question is how you view the balance of risk and reward. Act while the data is fresh and review the 2 key rewards and 2 important warning signs If you stop with Bright Horizons Family Solutions, you could miss other compelling setups. Use the Simply Wall Street Screener to quickly spot fresh ideas that fit your style. Target potential mispricings by scanning the 45 high quality undervalued stocks that combine solid fundamentals with room for the market to reassess them. Strengthen the stability of your portfolio by checking the list of solid balance sheet and fundamentals (52 results) before the crowd focuses on balance sheet quality. Reduce portfolio stress by reviewing the 75 resilient stocks with low risk scores that aim to keep volatility in check while still offering meaningful exposure. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BFAM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Group Vice President, Strategic Finance - Michael Flanagan Chief Executive Officer - Stephen Kramer Chief Financial Officer - Elizabeth Boland Operator: 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 formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note 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. Michael Flanagan: Thanks, Liz. Welcome to 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 performance, and outlook, are subject to the safe harbor statement included in our earnings release. Forward-looking statements inherently involve risks and uncertainties that may cause actual operating and financial results to differ materially and should be considered in conjunction with the cautionary statements that are described in detail in our earnings release, our 2025 Form 10-K and other SEC filings. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statements. Today, we also refer to non-GAAP financial measures, which are detailed and reconciled to their GAAP counterparts in our earnings release, which is available on the IR section of our website at investors.brighthorizons.com. Joining me on today's call is our Chief Executive Officer, Stephen Kramer, and our Chief Financial Officer, Elizabeth Boland. Steven will start by reviewing our results and provide an update on the business, Elizabeth will follow with a more detailed review of the numbers before we open it up to your questions. With that, let me turn the call over to Steven. Stephen Kramer: Thanks, Mike. Thank you to everyone joining us this afternoon. I am pleased with our performance in the second quarter and through the first half of 2026. Revenue expanded by 7% to $779 million, with growth across both Back-up Care and full service, adjusted EPS increased 20% to $1.28, both ahead of our expectations. Back-up Care again led our growth, while improving operating efficiency drove margin expansion in both segments. These results reinforce the strength and durability of our employer-sponsored model and the value of our differentiated portfolio of care and education solutions. On our first quarter call, we introduced a new investor presentation highlighting our client-centric business model, our competitive advantages, and the breadth of our long-term growth opportunities. Within Back-up Care, our largest segment by earnings contribution, we outlined three key growth drivers: deepening penetration within our existing clients, expanding our ecosystem of care and education solutions, and winning new logos. Let me update you on our progress on all three fronts. Starting with deeper penetration, Back-up Care revenue grew 19% to $194 million in the quarter, accelerating from 12% growth in the first quarter. Usage growth was strong across care types and was largely driven by more unique users, as well as an uptick in frequency of use. Key to driving deeper penetration within our clients is the breadth and quality of our care network and our technology platform. We have made significant investments over the past several years to both enhance the booking process and expand access to care solutions. Today, families can confirm care in real time through our instant book capability, and we now see the majority of our network care and Back-up secured this way. Combined with our broader service network, this creates a seamless on-demand experience that allows us to reliably connect families with trusted care across care types and geographies. Our ability to deliver quality care with this level of ease, reliability, and scale drives deeper engagement and is a true competitive advantage. Turning to the expansion of our ecosystem. Employer camps have become a natural extension of how we support clients to address their evolving workforce needs. This summer, we expanded our on-site Steve & Kate's camp for AT&T to its Atlanta campus, building on last year's successful pilot at its Dallas headquarters. We are also operating five camps for a leading multi-site hospital system, one camp serving an energy company in Texas, and a consortium camp serving two large banking employers in North Carolina. These camps demonstrate how we use our unique delivery capabilities and client relationships to develop additional ways to serve the increasing range of needs of employer clients and working parents. Turning to our third Back-up growth lever, new and ramping clients. Utilization continues to build among recently launched clients. Some additions include a Fortune 500 global consumer company and a Fortune 500 global industrial company. These relationships demonstrate the broad relevance of our care solutions and provide an additional source of growth as they launch and mature. Overall, Back-up Care continues to deliver solid double-digit revenue growth, extending an impressive 15-year track record. This is a high-margin, capital-light business serving a large and under-penetrated market. With meaningful runway across each of our three growth avenues, we believe Back-up Care is well-positioned to remain a durable driver of revenue and earnings growth. Turning to full service. Revenue grew 3% to $557 million, in line with our expectations. Growth was driven by tuition increases and a favorable impact from foreign exchange, partially offset by continued enrollment headwinds in Australia and the impact of center closures as we continue to optimize the portfolio. We opened seven centers in the quarter, including five for employer clients here in the U.S. Three centers were for a leading academic medical center that had self-operated their centers for more than 20 years before making the decision to have Bright Horizons assume the management of these programs with their ongoing financial support. This illustrates the transition opportunity that continues to exist within employer-sponsored care, especially within healthcare and higher education institutions. A decision by an employer to self-operate is not necessarily permanent. When employers' needs and circumstances change, our market leadership expertise and operating scale make us the partner of choice for leading employers to transition the management of their centers. The other two employer-funded client centers opened in the quarter are new work site locations developed around these employers' specific needs, exclusive to their employees, and reflective of these clients' HR strategy and desire to meet employee needs. Together, these center openings illustrate the opportunity to grow our employer-sponsored center footprint through transitioning established programs to Bright Horizons management and partnering with employers on new centers for their employees. Occupancy averaged in the high 60% range in the quarter. In fact, 70%, excluding Australia, up sequentially and reflecting continued recovery across the broader portfolio. Enrollment in centers open for more than one year increased approximately 1%, excluding the impact of enrollment contraction in Australia, which was roughly 100 basis point headwind. The pressure in Australia remained broadly consistent with what we discussed in the first quarter, while the balance of the portfolio continued to progress. Looking ahead, our focus is on building on the enrollment progress we have made, converting more inquiries into enrollments, translating higher occupancy into continued operating leverage, and shaping the portfolio around centers and markets with the strongest long-term demand and strategic value to our clients. As we build on this progress, our commitment to delivering the highest quality care in a safe and nurturing environment remains foundational to everything we do. Over 40 years, we have built rigorous policies, training, and oversight across our centers. We continue to invest in the people, systems, and practices that support consistent quality service delivery. We also recognize that this work is never finished. We continually learn, evaluate, and strengthen our approach. That discipline and our commitment to transparency and improvement is fundamental to the trust families and employers place in Bright Horizons. In educational advisory, revenue of $28 million was consistent with the prior year, as continued growth in College Coach was offset by lower participant engagement in EdAssist. Demand for College Coach's advising services is underpinned by the quality and experience of our college admission and financial aid experts, who provide highly personalized guidance to navigate the complex and high-stakes college landscape. In EdAssist, our focus is on increasing engagement by strengthening the technology platform, expanding the relevance of our solutions, and making it easier for working learners to take advantage of the education benefits available to them. Tying all this together is One Bright Horizons, our growth strategy to extend the reach and value of our service portfolio by engaging more employees and employers across the full spectrum of our solutions. At the employer level, that means building on the trust we have established through one service to expand relationships across our broader portfolio. Just as importantly, it means helping more eligible employees discover and engage with the range of care and education benefits available to them. By creating a more connected experience across our services, we can support more of their needs while delivering greater value to our employer clients. We again saw the impact of this strategy during this past quarter. The academic medical center behind the 3 full-service centers we transitioned first started as an EdAssist and College Coach client. Separately, a leading financial services company that has long utilized Back-up Care added College Coach to support employees and their families through the college planning process. Examples like these, together with growing employee engagement across our services, demonstrate the power of our employer-sponsored model and our ability to deepen relationships and penetration at both the employer and employee level. In summary, we continue to demonstrate the strength and durability of our employer-sponsored model through the first half of 2026. As we look ahead to the remainder of the year, we are narrowing our full-year revenue outlook to a range of $3.085 billion-$3.115 billion and raising adjusted EPS outlook to $5.05-$5.15 per share. With that, I'll turn the call over to Elizabeth to walk through the quarter in more detail and share more on our outlook. Elizabeth Boland: Thank you, Stephen, and hello to everyone who's been able to join the call tonight. I'll begin with some overall financial highlights. Revenue for the second quarter grew 7% to $779 million, driven by continued top-line growth in both our full service and Back-up segments. Adjusted operating income increased 15% to $99 million, as adjusted operating margins expanded 95 basis points over the prior year quarter to 12.7%. Adjusted EBITDA increased 13% to $131 million, representing an adjusted EBITDA margin of 17%. On the bottom line, adjusted EPS of $1.28 increased 20%. Taking a closer look at each of our 3 business lines, Back-up revenue grew 19% in the quarter to $194 million, driven by the strong utilization Stephen talked about across care types. Adjusted operating income of $50 million grew 23% versus the prior year as the associated operating margin expanded 80 basis points to 26%. In full service, revenue of $557 million grew 3% over the prior year quarter, driven primarily by tuition increases, growth in occupancy, and a favorable impact from foreign exchange. These benefits were partially offset by an approximately 250 basis point headwind from center closures, and to a lesser extent, to enrollment declines in our Australia operations. We ended the quarter with 988 centers, opening 7, as Stephen mentioned, while also closing 7 lease model centers. Enrollment in centers that are open for the last year was approximately flat in the second quarter, after taking into account the roughly 100 basis points of headwind from the enrollment contraction in Australia. Occupancy increased sequentially from the first quarter and averaged in the high 60% range and was about 70% excluding Australia. With respect to the center cohorts we have discussed on prior calls, the overall mix continued to improve, driven by a significant reduction in our lowest occupied centers. Our top performing cohort centers above 70% occupancy represent 53% of these centers in the second quarter, roughly in line with what we reported in the second quarter of 2025. More notably, our bottom cohort, that is centers below 40% occupied, declined to 5% of these centers from 10% in the prior year, reflecting both the enrollment progress and the impact of closing underperforming centers. Total full service adjusted operating income increased 10% to $44 million and represented an adjusted operating margin of 7.9%, an expansion of 50 basis points over the prior year. Tuition increases ahead of average wage growth across the portfolio and continued improvement in our U.K. operations drove the net margin expansion. Excluding our challenged Australia operations, full service adjusted operating margin would have expanded by more than 75 basis points over the prior year. Educational advisory revenue of $28 million was consistent with the prior year quarter, and adjusted operating margin was 16%. Turning to a couple of other items on the P&L, our net interest expense of $14 million increased $3 million over the prior year and was up $2 million sequentially, due primarily to higher average borrowings as well as modestly higher average effective borrowing rates. The structural effective tax rate on adjusted net income was 28.75% in the second quarter, higher than in 2025, due primarily to losses in Australia that are not currently deductible. Turning to the balance sheet and cash flow, we generated $95 million in cash from operations in the second quarter and made fixed asset investments of about $19 million. We also made share repurchases totaling approximately $250 million during the quarter. At quarter end, we had $164 million of cash and approximately $1.3 billion of gross debt. Our trailing net leverage ratio was 2.2x net debt to adjusted EBITDA at the end of the quarter, reflecting that share repurchase activity over the last year. Moving on to our updated full year outlook. On the revenue side, as Stephen previewed, we are narrowing our reported revenue to a range of $3.085 billion-$3.115 billion and raising our adjusted EPS outlook to a range of $5.05 to $5.15. Looking now at each segment for the full year. In full service, we expect reported revenue to grow in the range of 2.5%-3% on enrollment gains and tuition increases, offset by approximately 200 basis points of headwind from net center closings and approximately 100 basis points of headwind from Australia. In Back-up Care, we have increased our expectations to 13%-15% revenue growth for the full year, driven by the continued expansion of use. In ed advisory, we expect to grow in the low single digits. We are now expecting $58 million-$60 million of interest expense for the year, an adjusted effective tax rate of 28.5%, and a diluted share count of 51.5 million shares for the year. Looking now to Q3, our outlook is for total revenue of $835 million-$845 million, or growth of approximately 4%-5%. We expect full service to grow reported revenue of 50-100 basis points, including an approximate 225 basis point headwind from net center closings over the last year and 100 basis points of headwind from Australia. In Back-up Care, we expect revenue growth in the quarter of 12%-14%, and again, EdAssist to grow in the low single digits. In terms of earnings, we expect Q3 adjusted EPS to be in the range of $1.73-$1.78 per share. With that, Felice, we are ready to go to Q&A. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Andrew Steinerman from JPMorgan. Please go ahead with your question. Andrew Steinerman: Hi, two quick questions. Some of this is seasonal. With the strong Back-up Care growth in the quarter and into next quarter, could you just give us a sense how much summer camp usage is driving those results? Surely it's broad usage, but I'm interested in summer camp because you've had a lot of success there. Also, I know it's early and we're still in July, but as you think about the guide that you gave for the year, what are you assuming in terms of back to school enrollment on the full service side? Stephen Kramer: Thank you for the question, Andrew. I'll start with the summer camp question. First of all, we're obviously very pleased with the 19% in growth in the quarter. That use was really across all care types. It really was reflective of strong growth in both users and a slight uptick in frequency. In terms of isolating summer camp in particular, obviously in the summer months, that is the highest. Again, for the overall year, we generally see summer camp use in sort of the 25%-30% of total use. It is still just one of the components of our network use care types. Elizabeth Boland: Yeah. On the enrollment front, Andrew, we had seen enrollment in the first half of the year relatively stable as we had previewed at the beginning of the year, with a little bit lighter growth in the second quarter than we would expect to see as we turn over in the fall here. We have a little bit of positive growth offset by the Australia headwind. We're looking at a slightly positive ex-Australia growth, sub 1%, but still positive with Australia putting us with another 100 basis points of headwind on top of that. It's been an important cycle, of course. We have had, as we've stabilized enrollment in some of our larger or higher enrolled centers, they see more turnover in the older age groups as we come into the fall. That backfill takes a bit of time, and we also just have the natural comparison against a very strong year-over-year in our U.K. operation. A couple of things that come into how we're growing Q2 versus Q3 and Q4, we're still looking at something that's pretty close to our original guide for the full year. Andrew Steinerman: Okay. Thank you. Operator: Our next question is from Manav Patnaik with Barclays. Please proceed with your question. Ronan Kennedy: Hi, this is Ronan Kennedy on for Manav. Thank you for taking our questions. If I may, I'll start with a follow-up on Back-up. You highlighted both new logos and increasing utilization amongst recently launched clients. Are newer clients ramping faster than what you've seen in the past? If so, what's driving that behavior? Then you also continue to discuss substantial penetration opportunities within existing. What gives you confidence that the employee participation rates can continue moving higher from here? Stephen Kramer: Yeah, thank you for the question. I'll start with the second question since, again, the vast majority of growth that we experience is within the existing client base. We are now into a multi-year demonstration of continuing to drive users and use. What I would say is that we continue to work with our client partners to provide increasing amounts of outreach so that we can ultimately continue to garner more unique users, because ultimately that is the key determinant of continuing to see the kind of growth that we have been able to achieve. Certainly in the near term, we can look at reservation volumes and gain confidence, which is what gave us the ability to increase our guide. Ultimately, it's really down to continuing to identify and secure new users, and then a small uptick on frequency. In terms of new and ramping clients, that is obviously a much smaller component of it, given the fact that we have more than 1,000 clients that take advantage of our Back-up service. That said, they are important to the long term in this business. I would say that the maturation process of these clients actually looks quite similar to what we've experienced. It is not outsized compared to what it has been in the past, but rather just an important element. Then the final component of your question was really around what the white space looks like. I think as we articulated in the investor presentation, we see a lot of white space as it relates to the possibility of garnering new logos, believe that will continue to be a component of our growth algorithm within Back-up Care. Ronan Kennedy: Thank you for that. With the strong margin expansion in Back-up to 26%, well, I guess versus 25% last year, how much of that margin expansion was utilization versus mix? How should we think about what are sustainable levels of margins for Back-up Care? Elizabeth Boland: We believe the Back-up margins are sustainable. We've been at 28%-30% as our outlook for operating margins for Back-up for a while. We would continue to expect to see that this year. With more volume even coming in the third quarter than the second quarter, the margin conversion does come down to utilization against the portion of the Back-up Care cost supports that are fixed. We would expect it to tick up in the third and fourth quarter from where we see the first half of the year and be able to sustain that 28%-30%, given the sentiment of both the mix of use and the volume conversion that we're able to have. Ronan Kennedy: Thank you. Appreciate it. Stephen Kramer: Thank you. Elizabeth Boland: Welcome. Operator: Our next question is from Jeff Meuler with Baird. Please proceed with your question. Jeff Meuler: Thank you. I know you've had the greater than 70, less than 40 to 70 buckets for a while. Just on full service, can you just help us think through what % you characterize as high margin, maybe near full occupancy, not really growing? What % are ramping well at this point? Just of the lower utilization or those that are maybe not ramping, are in the assessment for closures bucket. Elizabeth Boland: Appreciate the question because there is some nuance in there, Jeff. Broadly speaking, the group of centers that are operating above 70% are in that category of sustaining enrollment, not necessarily from quarter to quarter or at the time we're in right now. Those centers will be naturally cycling enrollment, particularly the older preschoolers who are graduating out to elementary school. That group is not necessarily growing much. It's sustaining enrollment, we've been really pleased to see how much sustainability they have had through the last couple of years because that group has been steady. Between the overall aggregate price increases and the conversion of that to earnings in those centers, we're earning more even as the margin is getting back to our target of 10% or so. Those centers are really very much there. The group in the middle, the 40% to 70% cohort, there certainly are some centers in that group that are running very well. They may be anywhere from 60%-70% occupied. They may be 55%-65% occupied. They do very well at that level, they are also in that maybe not going to improve meaningfully from that level. That group is, call it, 45% or so of our overall mix. There is still a good quarter of those centers to 25%-35% of the overall mix still have opportunity. Some are at steady state. The sub 40% occupied group, I would characterize, we're at 5% this quarter. That's an optimized time period because as we do cycle enrollment, that'll move around. Probably in that group where we have anywhere from 60-70 centers that might be candidates for deep consideration of whether they should close, we'd probably look at maybe 25-50 of those that we would have circled up as not likely to be viable over the long term and be candidates for closure beyond this year and maybe into 2028. That's how I'd characterize the overall mix. I think the one additional consideration that I'd put out there is, of course, Australia has been underperforming, the deep dive that we are looking to do on that portfolio- Jeff Meuler: Yeah Elizabeth Boland: might increase that a little bit, just trying to characterize the rest of the portfolio. Jeff Meuler: Help me with that deep dive, just how close are you, or what actions have you taken, or how close are you to taking more aggressive action in Australia? Stephen Kramer: Yeah. What I would say is, obviously, we shared in the last call the degradation that we saw in the enrollment. Our focus at this point really is on aligning the staffing with the enrollment levels that we have, obviously trying to improve enrollment from where we are. As Elizabeth just shared, the other action that we are looking at and circling up is around closures. To make sure that we're optimizing the portfolio for the future. Ultimately, as we think about Australia, we're trying to think broadly about how to make sure that we can get that back on track in the way that we were able to accomplish in the U.K. That's our sort of immediate action, over the intermediate term, we obviously are looking at strategic options as it relates to how we think about that particular geography broadly. Jeff Meuler: Thank you both. Elizabeth Boland: Thanks, Jeff. Stephen Kramer: Thank you. Operator: Our next question is from Jeff Silber with BMO Capital Markets. Please proceed with your question. Jeff Silber: Thank you so much. I believe on your prior call, you gave us operating or adjusted operating margin guidance by segment. Can we just revisit that again? Elizabeth Boland: Yeah. Operating margin, I think I just mentioned from a Back-up Care standpoint, we're looking at 28%-30% for the year. On full service, overall, we expect to be flat for the year, flat-ish, and the Australia headwind there is, as we talked about last quarter and this quarter, expected to be 50-75 basis points. We would be positive, certainly excluding that headwind. At this point, we're looking to be relatively flattish in full service, and then our ed advising would be in the call it 20% range. Jeff Silber: Okay, great. That's really helpful. Completely different question. A number of us cover some of the higher education companies, and I know it's a different business, but many of them have been talking about changes in the way that students are searching or finding schools that they want to attend, moving from traditional search engines, going to LLMs. I'm just wondering, are you seeing that at all? If so, are you changing your marketing strategy accordingly? Stephen Kramer: Sure. Happy to answer that. Clearly, your question is focused around the ed advisory aspect of what we do. When we think about the College Coach aspect, those are dependents of our clients' employees. They are traditional learners as opposed to adult learners. Those traditional learners really are seeking out both information through AI and that type of support. At the same time, these are very high-stakes decisions that they're making. Therefore, the expertise that our counselors provide is still an incredibly valuable aspect of their search process. When we think about our ed advisory business, you'll note that on the College Coach side of the business, we continue to see participant growth, and that is really reflective of the fact that those employees and their dependents are highly interested in seeking expert advice from former college admissions and financial aid professionals. Jeff Silber: Yeah, I'm sorry. I was actually thinking about your full service center business. I don't know if that's impacted at all. Elizabeth Boland: Yeah, I'm not sure that we've seen that kind of a shift, but happy to inquire more about that. Jeff Silber: Okay. Appreciate the color. Thanks so much. Elizabeth Boland: Sure. Operator: Our next question is from George Tong with Goldman Sachs. Please proceed with your question. George Tong: Hi. Thanks. Good afternoon. Elizabeth Boland: Hi. George Tong: Occupancy outside of Australia reached roughly 70% in the quarter. As occupancy rates continue to recover, where would you say you are in the margin expansion journey within full service, and how much operating leverage remains available before you reach a more normalized utilization level? Elizabeth Boland: If I'm understanding your question right, it's the sort of opportunity to get back to a 10% EBIT margin, which is where we have historically operated. We certainly see a pathway to that, both with sustaining the enrollment and the performance in our top cohort enrolled group. Just to maybe to walk through what we currently have in the headwind category of our business. Last year, we reported about 5.5% in full service. As I mentioned, we would expect it to be relatively stable with that in 2026. Looking at Australia in the round as a whole, that underperformance, the $20 million-$25 million we expect to be losing in that geography is roughly 150 basis points of headwind. We also have a group of centers as we have closed centers, and some of them we are working to completely exit the leases and the facility costs in them and that period of time to either run off the lease or to exit is another 50 basis points or so of headwind. Just coming in, we are at about 7.5% without those two component pieces. You take the centers that are sub 70% occupied, and we have a group of them that, on the earlier question, we expect will also be candidates for closure, that are affecting the overall performance. Just gaining the enrollment in the middle cohort and getting that operating leverage. We certainly see a path to getting back to 10% and honestly, beyond that. Step one is getting back to 10%, and then we'll be commenting later on that. It's been, I think, a process, but we are very heartened by how the top performers continue to deliver and how we've been able to move centers out of the bottom cohort into the middle cohort. George Tong: Got it. That's very helpful. Switching to Back-up Care, growth accelerated in the quarter even against tougher comps. Can you discuss whether there were unusual tailwinds that you saw this quarter, or is there reason to believe that these growth rates are in fact sustainable? Stephen Kramer: I think that there were no anomalies, if that's the question. I think that really the performance was down to continuing to increase the number of users and, as I said, a slight uptick in frequency. That said, Q3 is obviously the largest quarter, and so ultimately we start to moderate a little bit as compared to the Q2 in Q3 in terms of what we called for in terms of guidance. That really becomes just a very high peak, within the overall year. Overall, to answer your question very directly, we continue to see an opportunity for us to get to sort of a 13%-15% growth for the full year, and then continue to sustain double-digit growth for many years to come. George Tong: Got it. Very helpful. Thank you. Stephen Kramer: Thank you. Operator: Our next question is from Toni Kaplan with Morgan Stanley. Please proceed with your question. Toni Kaplan: Thanks so much. I wanted to go back to the center closures topic. Sort of been in a net closures mode for a couple of years. Is there anything that when you think about the go forward of your lease consortium strategy, are there any changes that you're planning to make, in terms of thinking about where to open new centers and things like that? I know it used to be more targeted towards urban areas because of the employer concentration. Is there anything sort of different that you're thinking about now? Stephen Kramer: Thank you for the question, Toni. What I would say is in the near term, we continue to be focused on opening new centers in collaboration and in partnership with clients. That is our first priority in the near term, is to continue to either transition the management of centers for self-operated centers and, in addition to that, open new greenfield opportunities with clients' financial support. I would say longer term, again, hearkening back to this client centricity, our lease consortium models will really be driven by where our clients and their employees live and work, and where we can garner support from our client partners in order to create additional sustainability for the model. Again, I would say overall, very client-centric. First and foremost in the near term with client centers. Beyond that, thinking about lease consortiums that again, garner support through our client partners and their employees. Toni Kaplan: Got it. Elizabeth, if you could help us for modeling purposes on what the FX was in the quarter for full service and if you have an updated expectation for FX for the full year, that'd be great as well. Elizabeth Boland: That is an important point, Toni, because it was a big guy, if you will, in the second quarter. The overall contribution in full service specifically, which is where FX most affects it, was about 100 basis points of tailwind. For the full year, it will also be relatively higher, around 125 basis points. In the second half, we would expect it to taper significantly. The swing between Q2 and Q3, part of the guide of 50 to 100 basis points in full service is reflective of a swing of 125 basis points from a +100 to -25, sort of as an effect on the overall growth rate. Toni Kaplan: Thank you. Elizabeth Boland: You're welcome. Operator: Once again, if you would like to ask a question, please press *1 on your telephone keypad. Our next question is from Josh Chan with UBS. Please proceed with your question. Josh Chan: Good afternoon. Thanks for taking my question. Maybe jumping off of the prior point about the moderation in full service from Q2 to Q3. Recognizing FX is a part of that, but there's also a further moderation. I'm wondering what of the main factors is causing that. Is it a greater impact on Australia? Any other dynamics affecting that? Elizabeth Boland: A little bit more of an effect from closures. FX is the largest sort of sequential effect. Closures in terms of gross or net closures, because the openings are about the same, but the impact of net closures is another 75 basis points or so. It was around 150 basis points in Q2. We'd expect it to be 225 net center closings in Q3. The other factor, there's a little bit of mix that goes on, but the other factor to call out is on the overall enrollment just a little bit. Australia at the margins is probably a little bit of a factor, but also we just tapered the enrollment growth a bit overall in the core enrollment, excluding Australia. Enrollment rather than being flat in the quarter, we'd expect it to be slightly down with including the effects of Australia of 100 basis points plus. Josh Chan: Okay. That makes a lot of sense. Thanks, Elizabeth. Elizabeth Boland: You're welcome. Josh Chan: Maybe on the repurchase, obviously, you took advantage of the opportunity in Q2 again. Could you talk to the willingness to buy back stock? I guess, how do you balance that between leverage and opportunistic buybacks? How do you think about that from here? Elizabeth Boland: The business generates a lot of cash, as you know. We have leaned in pretty strong on the repurchase the first half of the year. A total, $250 million this quarter on top of two and a quarter in the first quarter. We have been active and feel like that's been a good capital allocation against the modest additional revolver that we have used to effect that. At 2.2 times net leverage, we've been much more levered than that in the past. As I say, we're replenishing cash generation in the business. We feel comfortable, certainly at these ratios. We want to be opportunistic as needed. The guidance doesn't contemplate further repurchases from now. Our steer on the overall share count is just reflective, similar to other times as what we've done to date. Josh Chan: Great. Thank you so much for the color. Good luck in the second half. Elizabeth Boland: Thank you. Stephen Kramer: Thank you. Operator: Our next question is from Stephanie Moore with Jefferies. Please proceed with your question. Stephanie Moore: Yes, great. Good afternoon. Thank you. I wanted to touch a little bit about maybe price and volume contribution during the quarter, if you could break that out. Sorry if I missed that. Just a clarification there. If you could also talk through the expected occupancy improvement in full service in the back half of the year, I think there's a lot of moving pieces. I just wanted to make sure I was level setting the expectations there. Thank you. Elizabeth Boland: Sure. Overall price, our average price increase for the year has been about 4%. That's relatively consistent across all four quarters of the year and for the full year. Core enrollment, excluding Australia, our enrollment in the quarter was up roughly 100 basis points. Australia was a headwind of around 100 basis points. In terms of volume, that net volume would be relatively flat. I mentioned that the net closures was around 150 basis points. FX was an addition to the overall reported revenue of 100 basis points, a little bit of mix is the sort of overall difference to the full service growth rate. I think I might have missed one additional question that you had, Stephanie. Stephanie Moore: No, I think you got it. I was mostly just trying to get a sense of just the occupancy trends in the back half of the year and enrollment trends. Elizabeth Boland: Yeah. Stephanie Moore: Yeah. Elizabeth Boland: Yeah. The second quarter, of course, is the high water mark in terms of the seasonality, cyclicality of our full service enrollment business. We were high 60s in the quarter. We would expect that to be stepping down to mid 60s or so, and be reporting a little bit of occupancy gain compared to last year, but at the margin, still in the mid 60s plus. That's where we'd expect to end the year. It steps down as we're cycling the third quarter, just as a modest increase to the fourth quarter. Stephanie Moore: Okay. Thank you so much. Elizabeth Boland: You're welcome. Stephen Kramer: Thank you. Okay, well, thanks everyone for joining the call, wishing everyone a good night. Elizabeth Boland: Thanks, everyone. Before you buy stock in Bright Horizons Family Solutions, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bright Horizons Family Solutions wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $386,727!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,232,139!* Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 3, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Bright Horizons (BFAM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Bright Horizons Family Solutions Inc.? Here are five stocks we like better. Bright Horizons exceeded Q2 expectations, with revenue up 7% to $779 million and adjusted EPS up 20% to $1.28. Management raised its full-year adjusted EPS outlook to $5.05–$5.15 while narrowing its revenue forecast to $3.085–$3.115 billion. Back-up Care was the primary growth driver: revenue rose 19% and adjusted operating income increased 23%, prompting the company to raise its full-year segment growth forecast to 13%–15% and target margins of 28%–30%. Full Service revenue grew 3% and margins improved, but Australia and center closures remain headwinds. The company repurchased approximately $250 million of shares during the quarter and expects third-quarter revenue of $835–$845 million with adjusted EPS of $1.73–$1.78. Bright Horizons Family Solutions (NYSE:BFAM) reported second-quarter revenue growth of 7% to $779 million and a 20% increase in adjusted earnings per share to $1.28, with results exceeding the company’s expectations. Growth was led by its Back-up Care segment, while operating efficiency supported margin expansion across its major business lines. Chief Executive Officer Stephen Kramer said the results underscored the durability of the company’s employer-sponsored care and education model. Bright Horizons narrowed its full-year revenue outlook to between $3.085 billion and $3.115 billion and raised its adjusted EPS outlook to a range of $5.05 to $5.15. → Microsoft Just Flipped the AI Spending Narrative Overnight Back-up Care revenue rose 19% year over year to $194 million, accelerating from 12% growth in the first quarter. The segment’s adjusted operating income increased 23% to $50 million, while its operating margin expanded 80 basis points to 26%. Kramer attributed the growth to increased use across care types, driven primarily by a higher number of unique users and a modest increase in usage frequency. He said the company’s instant-book capabilities and broader care network have helped create a more seamless, on-demand experience for families. → 2 Unique Space ETFs That Could Upend the Industry Summer camps contributed to seasonal usage, although Kramer said camps generally account for about 25% to 30% of total network use for the full year and remain only one component of the company’s care offerings. During the summer, Bright Horizons expanded an on-site Steve & Kate’s camp for AT&T to its Atlanta campus after a pilot at the company’s Dallas headquarters last year. It also operated camps for a hospital system, an energy company in Texas and two banking employers in North Carolina. The company also cited recently launched relationships with a Fortune 500 global consumer company and a Fortune 500 global industrial company. Kramer said newer clients appear to be maturing at rates similar to prior cohorts, while the company continues to see opportunity to increase participation among employees at its more than 1,000 Back-up Care clients. → MarketBeat Week in Review – 07/27- 07/31 Chief Financial Officer Elizabeth Boland said Bright Horizons expects Back-up Care operating margins of 28% to 30% for the full year, supported by higher volumes and the fixed-cost component of the business. The company raised its full-year Back-up Care revenue-growth expectation to 13% to 15%. Full service revenue increased 3% to $557 million. Tuition increases, improved occupancy and favorable foreign exchange effects helped drive growth, though the gains were partly offset by center closures and enrollment pressure in Australia. Bright Horizons opened seven centers during the quarter, including five U.S. employer-client locations, while closing seven lease-model centers. Three of the newly opened centers were transitioned from self-operation by an academic medical center that had previously managed the programs for more than 20 years. Kramer said the transition illustrates an opportunity for Bright Horizons to take over management of established employer-sponsored programs, particularly in healthcare and higher education. Occupancy averaged in the high-60% range during the quarter, or about 70% excluding Australia. Enrollment at centers open for more than one year increased about 1% excluding Australia, while Australian enrollment contraction represented roughly a 100-basis-point headwind. Boland said the company’s portfolio mix improved as the proportion of its lowest-occupancy centers declined. Centers operating above 70% occupancy represented 53% of the relevant cohort, approximately unchanged from a year earlier. Meanwhile, centers below 40% occupancy fell to 5% from 10%, reflecting enrollment improvement and the closure of underperforming locations. Full service adjusted operating income rose 10% to $44 million, and adjusted operating margin expanded 50 basis points to 7.9%. Tuition increases ahead of average wage growth and improvement in the U.K. business supported margins. Excluding Australia, Boland said full service margin would have expanded by more than 75 basis points. The company expects full service revenue to grow 2.5% to 3% for the year. That outlook includes an estimated 200-basis-point headwind from net center closures and a roughly 100-basis-point headwind from Australia. Management said it is focusing in Australia on aligning staffing with enrollment levels, improving enrollment and evaluating center closures. Kramer added that the company is examining broader strategic options for the geography over the intermediate term. Educational advisory revenue was unchanged from the prior year at $28 million. Growth at College Coach was offset by lower participant engagement in EdAssist. Bright Horizons said it is working to improve EdAssist engagement by strengthening its technology platform and broadening the relevance of its education-benefit solutions. During the quarter, the company generated $95 million in operating cash flow and invested approximately $19 million in fixed assets. It repurchased about $250 million of shares, following $225 million of repurchases in the first quarter. At quarter-end, Bright Horizons held $164 million in cash and approximately $1.3 billion in gross debt, with trailing net leverage of 2.2 times net debt to adjusted EBITDA. For the third quarter, Bright Horizons expects revenue of $835 million to $845 million, representing growth of approximately 4% to 5%. The company forecast adjusted EPS of $1.73 to $1.78. Full service revenue is expected to grow 0.5% to 1%, including an estimated 225-basis-point headwind from net center closures and a 100-basis-point headwind from Australia. Back-up Care revenue is expected to increase 12% to 14%. Educational advisory is expected to post low-single-digit growth. Bright Horizons expects full-year interest expense of $58 million to $60 million, an adjusted effective tax rate of 28.5% and a diluted share count of 51.5 million shares. The company’s guidance does not assume additional share repurchases beyond those completed to date. Bright Horizons Family Solutions, Inc (NYSE: BFAM) is a leading provider of employer-sponsored child care and early education services, offering a range of solutions designed to support working families and organizations. Through a network of on-site, near-site and center-based programs, the company partners with corporate and nonprofit clients to deliver infant, toddler, preschool and school-age care. Services emphasize age-appropriate curriculum, developmental milestones and community engagement to ensure high-quality learning experiences. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Bright Horizons Family Solutions Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: $779 million, up 7% year-over-year. Adjusted Operating Income: $99 million, up 15%, with margins expanding 95 basis points to 12.7%. Adjusted EBITDA: $131 million, up 13%, representing a 17% margin. Adjusted EPS: $1.28, up 20% year-over-year. Backup Care Revenue: $194 million, up 19% year-over-year. Backup Care Adjusted Operating Income: $50 million, up 23%, with margins expanding 80 basis points to 26%. Full Service Revenue: $557 million, up 3% year-over-year. Full Service Adjusted Operating Income: $44 million, up 10%, with margins expanding 50 basis points to 7.9%. Educational Advisory Revenue: $28 million, consistent with the prior year. Center Count: Ended the quarter with 988 centers, opening seven and closing seven. Enrollment: Approximately flat in centers open for more than one year, excluding a roughly 100 basis point headwind from Australia. Occupancy: Averaged in the high 60% range, approximately 70% excluding Australia. Cash Flow from Operations: $95 million in the second quarter. Share Repurchases: Approximately $250 million during the quarter. Full-Year Revenue Outlook: Narrowed to $3.085 billion to $3.115 billion. Full-Year Adjusted EPS Outlook: Raised to $5.05 to $5.15 per share. Warning! GuruFocus has detected 4 Warning Sign with NMIH. Is BFAM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 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. Q: Backup Care growth accelerated to 19% in the second quarter. Were there any unusual tailwinds, or is this growth rate sustainable?A: Stephen Kramer (CEO): There were no anomalies in the quarter. The performance was driven by a continued increase in the number of unique users and a slight uptick in frequency of use. While Q3 is the largest seasonal quarter, we have raised our full-year guidance to 13% to 15% growth and believe we can sustain double-digit growth for many years to come. Q: Can you provide more detail on the full-service center portfolio mix and the potential for further closures?A: Elizabeth Boland (CFO): Centers above 70% occupancy represent 53% of the mix and are sustaining enrollment well. The middle cohort (40%-70% occupied) makes up roughly 45% of the mix, with 25%-35% still having opportunity for improvement. The sub-40% occupied group declined to 5% of centers. Of the 60-70 centers in that bottom cohort, we have identified 25-50 as candidates for closure beyond this year and into 2028, with Australia potentially adding to that number. Q: How much operating leverage remains in the Full Service segment before reaching normalized utilization levels?A: Elizabeth Boland (CFO): We see a clear pathway back to our historical 10% EBIT margin. Excluding the Australia headwind (roughly 150 basis points) and the costs of exiting closed center leases (another 50 basis points), we are currently operating at about 7.5% margin. Gaining enrollment in the middle cohort and continuing to optimize the portfolio provides the path to get back to 10% and beyond. Q: What is your strategy regarding new center openings and the lease consortium model going forward?A: Stephen Kramer (CEO): In the near term, our priority is opening new centers in collaboration with employer clients, either through transitioning self-operated centers to our management or through new greenfield opportunities with client financial support. Longer-term, our lease consortium model will be driven by where our clients and their employees live and work, and where we can garner client support to create sustainability. Q: Can you break down the price and volume contribution in Full Service, and what are the expected occupancy trends for the back half of the year?A: Elizabeth Boland (CFO): Average price increases for the year are about 4%. Core enrollment, excluding Australia, was up roughly 100 basis points in the quarter, offset by a 100 basis point headwind from Australia. Net center closures were a 150 basis point headwind, and FX added 100 basis points. Occupancy was in the high 60% range in Q2, and we expect it to step down to the mid-60s in Q3 before a modest increase in Q4. Q: What is the status of your strategic review of the Australia operations, and what actions are being taken?A: Stephen Kramer (CEO): Our immediate focus is on aligning staffing with current enrollment levels and improving enrollment. We are also evaluating potential center closures to optimize the portfolio. Over the intermediate term, we are looking at strategic options for the geography broadly, with the goal of getting it back on track similar to what we accomplished in the UK. Q: How much of the Backup Care margin expansion was driven by utilization versus mix, and what are sustainable margin levels?A: Elizabeth Boland (CFO): The margin expansion is driven by utilization against the fixed cost base of the backup care network. We believe the 28% to 30% operating margin range is sustainable. With higher volume expected in Q3, we would expect margins to tick up from the first half levels and sustain that 28% to 30% range. Q: Can you provide updated segment-level operating margin guidance for the full year?A: Elizabeth Boland (CFO): For Backup Care, we expect operating margins of 28% to 30% for the year. For Full Service, we expect margins to be relatively flat, with Australia representing a 50-75 basis point headwind. Excluding Australia, margins would be positive. Educational Advisory is expected to be in the 20% range. Q: What was the impact of foreign exchange in the quarter, and what is the expectation for the full year?A: Elizabeth Boland (CFO): FX was a tailwind of about 100 basis points in Full Service in Q2. For the full year, we expect it to be around 125 basis points of tailwind, but it will taper significantly in the second half. The swing from a plus 100 basis points in Q2 to negative 25 basis points in Q3 is a key factor in the sequential moderation of Full Service growth. Q: How are you balancing share repurchases with leverage, and what is the appetite for further buybacks?A: Elizabeth Boland (CFO): We have been active in repurchasing shares, totaling $250 million in Q2 on top of $225 million in Q1. At 2.2 times net leverage, we feel comfortable with these ratios and will continue to be opportunistic. The current guidance does not contemplate further repurchases from this point, and the share count guidance reflects only what we have done to date. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Group Vice President, Strategic Finance - Michael Flanagan Chief Executive Officer - Stephen Kramer Chief Financial Officer - Elizabeth Boland Operator: 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 formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note 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. Michael Flanagan: Thanks, Liz. Welcome to 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 performance, and outlook, are subject to the safe harbor statement included in our earnings release. Forward-looking statements inherently involve risks and uncertainties that may cause actual operating and financial results to differ materially and should be considered in conjunction with the cautionary statements that are described in detail in our earnings release, our 2025 Form 10-K and other SEC filings. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statements. Today, we also refer to non-GAAP financial measures, which are detailed and reconciled to their GAAP counterparts in our earnings release, which is available on the IR section of our website at investors.brighthorizons.com. Joining me on today's call is our Chief Executive Officer, Stephen Kramer, and our Chief Financial Officer, Elizabeth Boland. Steven will start by reviewing our results and provide an update on the business, Elizabeth will follow with a more detailed review of the numbers before we open it up to your questions. With that, let me turn the call over to Steven. Stephen Kramer: Thanks, Mike. Thank you to everyone joining us this afternoon. I am pleased with our performance in the second quarter and through the first half of 2026. Revenue expanded by 7% to $779 million, with growth across both Back-up Care and full service, adjusted EPS increased 20% to $1.28, both ahead of our expectations. Back-up Care again led our growth, while improving operating efficiency drove margin expansion in both segments. These results reinforce the strength and durability of our employer-sponsored model and the value of our differentiated portfolio of care and education solutions. On our first quarter call, we introduced a new investor presentation highlighting our client-centric business model, our competitive advantages, and the breadth of our long-term growth opportunities. Within Back-up Care, our largest segment by earnings contribution, we outlined three key growth drivers: deepening penetration within our existing clients, expanding our ecosystem of care and education solutions, and winning new logos. Let me update you on our progress on all three fronts. Starting with deeper penetration, Back-up Care revenue grew 19% to $194 million in the quarter, accelerating from 12% growth in the first quarter. Usage growth was strong across care types and was largely driven by more unique users, as well as an uptick in frequency of use. Key to driving deeper penetration within our clients is the breadth and quality of our care network and our technology platform. We have made significant investments over the past several years to both enhance the booking process and expand access to care solutions. Today, families can confirm care in real time through our instant book capability, and we now see the majority of our network care and Back-up secured this way. Combined with our broader service network, this creates a seamless on-demand experience that allows us to reliably connect families with trusted care across care types and geographies. Our ability to deliver quality care with this level of ease, reliability, and scale drives deeper engagement and is a true competitive advantage. Turning to the expansion of our ecosystem. Employer camps have become a natural extension of how we support clients to address their evolving workforce needs. This summer, we expanded our on-site Steve & Kate's camp for AT&T to its Atlanta campus, building on last year's successful pilot at its Dallas headquarters. We are also operating five camps for a leading multi-site hospital system, one camp serving an energy company in Texas, and a consortium camp serving two large banking employers in North Carolina. These camps demonstrate how we use our unique delivery capabilities and client relationships to develop additional ways to serve the increasing range of needs of employer clients and working parents. Turning to our third Back-up growth lever, new and ramping clients. Utilization continues to build among recently launched clients. Some additions include a Fortune 500 global consumer company and a Fortune 500 global industrial company. These relationships demonstrate the broad relevance of our care solutions and provide an additional source of growth as they launch and mature. Overall, Back-up Care continues to deliver solid double-digit revenue growth, extending an impressive 15-year track record. This is a high-margin, capital-light business serving a large and under-penetrated market. With meaningful runway across each of our three growth avenues, we believe Back-up Care is well-positioned to remain a durable driver of revenue and earnings growth. Turning to full service. Revenue grew 3% to $557 million, in line with our expectations. Growth was driven by tuition increases and a favorable impact from foreign exchange, partially offset by continued enrollment headwinds in Australia and the impact of center closures as we continue to optimize the portfolio. We opened seven centers in the quarter, including five for employer clients here in the U.S. Three centers were for a leading academic medical center that had self-operated their centers for more than 20 years before making the decision to have Bright Horizons assume the management of these programs with their ongoing financial support. This illustrates the transition opportunity that continues to exist within employer-sponsored care, especially within healthcare and higher education institutions. A decision by an employer to self-operate is not necessarily permanent. When employers' needs and circumstances change, our market leadership expertise and operating scale make us the partner of choice for leading employers to transition the management of their centers. The other two employer-funded client centers opened in the quarter are new work site locations developed around these employers' specific needs, exclusive to their employees, and reflective of these clients' HR strategy and desire to meet employee needs. Together, these center openings illustrate the opportunity to grow our employer-sponsored center footprint through transitioning established programs to Bright Horizons management and partnering with employers on new centers for their employees. Occupancy averaged in the high 60% range in the quarter. In fact, 70%, excluding Australia, up sequentially and reflecting continued recovery across the broader portfolio. Enrollment in centers open for more than one year increased approximately 1%, excluding the impact of enrollment contraction in Australia, which was roughly 100 basis point headwind. The pressure in Australia remained broadly consistent with what we discussed in the first quarter, while the balance of the portfolio continued to progress. Looking ahead, our focus is on building on the enrollment progress we have made, converting more inquiries into enrollments, translating higher occupancy into continued operating leverage, and shaping the portfolio around centers and markets with the strongest long-term demand and strategic value to our clients. As we build on this progress, our commitment to delivering the highest quality care in a safe and nurturing environment remains foundational to everything we do. Over 40 years, we have built rigorous policies, training, and oversight across our centers. We continue to invest in the people, systems, and practices that support consistent quality service delivery. We also recognize that this work is never finished. We continually learn, evaluate, and strengthen our approach. That discipline and our commitment to transparency and improvement is fundamental to the trust families and employers place in Bright Horizons. In educational advisory, revenue of $28 million was consistent with the prior year, as continued growth in College Coach was offset by lower participant engagement in EdAssist. Demand for College Coach's advising services is underpinned by the quality and experience of our college admission and financial aid experts, who provide highly personalized guidance to navigate the complex and high-stakes college landscape. In EdAssist, our focus is on increasing engagement by strengthening the technology platform, expanding the relevance of our solutions, and making it easier for working learners to take advantage of the education benefits available to them. Tying all this together is One Bright Horizons, our growth strategy to extend the reach and value of our service portfolio by engaging more employees and employers across the full spectrum of our solutions. At the employer level, that means building on the trust we have established through one service to expand relationships across our broader portfolio. Just as importantly, it means helping more eligible employees discover and engage with the range of care and education benefits available to them. By creating a more connected experience across our services, we can support more of their needs while delivering greater value to our employer clients. We again saw the impact of this strategy during this past quarter. The academic medical center behind the 3 full-service centers we transitioned first started as an EdAssist and College Coach client. Separately, a leading financial services company that has long utilized Back-up Care added College Coach to support employees and their families through the college planning process. Examples like these, together with growing employee engagement across our services, demonstrate the power of our employer-sponsored model and our ability to deepen relationships and penetration at both the employer and employee level. In summary, we continue to demonstrate the strength and durability of our employer-sponsored model through the first half of 2026. As we look ahead to the remainder of the year, we are narrowing our full-year revenue outlook to a range of $3.085 billion-$3.115 billion and raising adjusted EPS outlook to $5.05-$5.15 per share. With that, I'll turn the call over to Elizabeth to walk through the quarter in more detail and share more on our outlook. Elizabeth Boland: Thank you, Stephen, and hello to everyone who's been able to join the call tonight. I'll begin with some overall financial highlights. Revenue for the second quarter grew 7% to $779 million, driven by continued top-line growth in both our full service and Back-up segments. Adjusted operating income increased 15% to $99 million, as adjusted operating margins expanded 95 basis points over the prior year quarter to 12.7%. Adjusted EBITDA increased 13% to $131 million, representing an adjusted EBITDA margin of 17%. On the bottom line, adjusted EPS of $1.28 increased 20%. Taking a closer look at each of our 3 business lines, Back-up revenue grew 19% in the quarter to $194 million, driven by the strong utilization Stephen talked about across care types. Adjusted operating income of $50 million grew 23% versus the prior year as the associated operating margin expanded 80 basis points to 26%. In full service, revenue of $557 million grew 3% over the prior year quarter, driven primarily by tuition increases, growth in occupancy, and a favorable impact from foreign exchange. These benefits were partially offset by an approximately 250 basis point headwind from center closures, and to a lesser extent, to enrollment declines in our Australia operations. We ended the quarter with 988 centers, opening 7, as Stephen mentioned, while also closing 7 lease model centers. Enrollment in centers that are open for the last year was approximately flat in the second quarter, after taking into account the roughly 100 basis points of headwind from the enrollment contraction in Australia. Occupancy increased sequentially from the first quarter and averaged in the high 60% range and was about 70% excluding Australia. With respect to the center cohorts we have discussed on prior calls, the overall mix continued to improve, driven by a significant reduction in our lowest occupied centers. Our top performing cohort centers above 70% occupancy represent 53% of these centers in the second quarter, roughly in line with what we reported in the second quarter of 2025. More notably, our bottom cohort, that is centers below 40% occupied, declined to 5% of these centers from 10% in the prior year, reflecting both the enrollment progress and the impact of closing underperforming centers. Total full service adjusted operating income increased 10% to $44 million and represented an adjusted operating margin of 7.9%, an expansion of 50 basis points over the prior year. Tuition increases ahead of average wage growth across the portfolio and continued improvement in our U.K. operations drove the net margin expansion. Excluding our challenged Australia operations, full service adjusted operating margin would have expanded by more than 75 basis points over the prior year. Educational advisory revenue of $28 million was consistent with the prior year quarter, and adjusted operating margin was 16%. Turning to a couple of other items on the P&L, our net interest expense of $14 million increased $3 million over the prior year and was up $2 million sequentially, due primarily to higher average borrowings as well as modestly higher average effective borrowing rates. The structural effective tax rate on adjusted net income was 28.75% in the second quarter, higher than in 2025, due primarily to losses in Australia that are not currently deductible. Turning to the balance sheet and cash flow, we generated $95 million in cash from operations in the second quarter and made fixed asset investments of about $19 million. We also made share repurchases totaling approximately $250 million during the quarter. At quarter end, we had $164 million of cash and approximately $1.3 billion of gross debt. Our trailing net leverage ratio was 2.2x net debt to adjusted EBITDA at the end of the quarter, reflecting that share repurchase activity over the last year. Moving on to our updated full year outlook. On the revenue side, as Stephen previewed, we are narrowing our reported revenue to a range of $3.085 billion-$3.115 billion and raising our adjusted EPS outlook to a range of $5.05 to $5.15. Looking now at each segment for the full year. In full service, we expect reported revenue to grow in the range of 2.5%-3% on enrollment gains and tuition increases, offset by approximately 200 basis points of headwind from net center closings and approximately 100 basis points of headwind from Australia. In Back-up Care, we have increased our expectations to 13%-15% revenue growth for the full year, driven by the continued expansion of use. In ed advisory, we expect to grow in the low single digits. We are now expecting $58 million-$60 million of interest expense for the year, an adjusted effective tax rate of 28.5%, and a diluted share count of 51.5 million shares for the year. Looking now to Q3, our outlook is for total revenue of $835 million-$845 million, or growth of approximately 4%-5%. We expect full service to grow reported revenue of 50-100 basis points, including an approximate 225 basis point headwind from net center closings over the last year and 100 basis points of headwind from Australia. In Back-up Care, we expect revenue growth in the quarter of 12%-14%, and again, EdAssist to grow in the low single digits. In terms of earnings, we expect Q3 adjusted EPS to be in the range of $1.73-$1.78 per share. With that, Felice, we are ready to go to Q&A. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Andrew Steinerman from JPMorgan. Please go ahead with your question. Andrew Steinerman: Hi, two quick questions. Some of this is seasonal. With the strong Back-up Care growth in the quarter and into next quarter, could you just give us a sense how much summer camp usage is driving those results? Surely it's broad usage, but I'm interested in summer camp because you've had a lot of success there. Also, I know it's early and we're still in July, but as you think about the guide that you gave for the year, what are you assuming in terms of back to school enrollment on the full service side? Stephen Kramer: Thank you for the question, Andrew. I'll start with the summer camp question. First of all, we're obviously very pleased with the 19% in growth in the quarter. That use was really across all care types. It really was reflective of strong growth in both users and a slight uptick in frequency. In terms of isolating summer camp in particular, obviously in the summer months, that is the highest. Again, for the overall year, we generally see summer camp use in sort of the 25%-30% of total use. It is still just one of the components of our network use care types. Elizabeth Boland: Yeah. On the enrollment front, Andrew, we had seen enrollment in the first half of the year relatively stable as we had previewed at the beginning of the year, with a little bit lighter growth in the second quarter than we would expect to see as we turn over in the fall here. We have a little bit of positive growth offset by the Australia headwind. We're looking at a slightly positive ex-Australia growth, sub 1%, but still positive with Australia putting us with another 100 basis points of headwind on top of that. It's been an important cycle, of course. We have had, as we've stabilized enrollment in some of our larger or higher enrolled centers, they see more turnover in the older age groups as we come into the fall. That backfill takes a bit of time, and we also just have the natural comparison against a very strong year-over-year in our U.K. operation. A couple of things that come into how we're growing Q2 versus Q3 and Q4, we're still looking at something that's pretty close to our original guide for the full year. Andrew Steinerman: Okay. Thank you. Operator: Our next question is from Manav Patnaik with Barclays. Please proceed with your question. Ronan Kennedy: Hi, this is Ronan Kennedy on for Manav. Thank you for taking our questions. If I may, I'll start with a follow-up on Back-up. You highlighted both new logos and increasing utilization amongst recently launched clients. Are newer clients ramping faster than what you've seen in the past? If so, what's driving that behavior? Then you also continue to discuss substantial penetration opportunities within existing. What gives you confidence that the employee participation rates can continue moving higher from here? Stephen Kramer: Yeah, thank you for the question. I'll start with the second question since, again, the vast majority of growth that we experience is within the existing client base. We are now into a multi-year demonstration of continuing to drive users and use. What I would say is that we continue to work with our client partners to provide increasing amounts of outreach so that we can ultimately continue to garner more unique users, because ultimately that is the key determinant of continuing to see the kind of growth that we have been able to achieve. Certainly in the near term, we can look at reservation volumes and gain confidence, which is what gave us the ability to increase our guide. Ultimately, it's really down to continuing to identify and secure new users, and then a small uptick on frequency. In terms of new and ramping clients, that is obviously a much smaller component of it, given the fact that we have more than 1,000 clients that take advantage of our Back-up service. That said, they are important to the long term in this business. I would say that the maturation process of these clients actually looks quite similar to what we've experienced. It is not outsized compared to what it has been in the past, but rather just an important element. Then the final component of your question was really around what the white space looks like. I think as we articulated in the investor presentation, we see a lot of white space as it relates to the possibility of garnering new logos, believe that will continue to be a component of our growth algorithm within Back-up Care. Ronan Kennedy: Thank you for that. With the strong margin expansion in Back-up to 26%, well, I guess versus 25% last year, how much of that margin expansion was utilization versus mix? How should we think about what are sustainable levels of margins for Back-up Care? Elizabeth Boland: We believe the Back-up margins are sustainable. We've been at 28%-30% as our outlook for operating margins for Back-up for a while. We would continue to expect to see that this year. With more volume even coming in the third quarter than the second quarter, the margin conversion does come down to utilization against the portion of the Back-up Care cost supports that are fixed. We would expect it to tick up in the third and fourth quarter from where we see the first half of the year and be able to sustain that 28%-30%, given the sentiment of both the mix of use and the volume conversion that we're able to have. Ronan Kennedy: Thank you. Appreciate it. Stephen Kramer: Thank you. Elizabeth Boland: Welcome. Operator: Our next question is from Jeff Meuler with Baird. Please proceed with your question. Jeff Meuler: Thank you. I know you've had the greater than 70, less than 40 to 70 buckets for a while. Just on full service, can you just help us think through what % you characterize as high margin, maybe near full occupancy, not really growing? What % are ramping well at this point? Just of the lower utilization or those that are maybe not ramping, are in the assessment for closures bucket. Elizabeth Boland: Appreciate the question because there is some nuance in there, Jeff. Broadly speaking, the group of centers that are operating above 70% are in that category of sustaining enrollment, not necessarily from quarter to quarter or at the time we're in right now. Those centers will be naturally cycling enrollment, particularly the older preschoolers who are graduating out to elementary school. That group is not necessarily growing much. It's sustaining enrollment, we've been really pleased to see how much sustainability they have had through the last couple of years because that group has been steady. Between the overall aggregate price increases and the conversion of that to earnings in those centers, we're earning more even as the margin is getting back to our target of 10% or so. Those centers are really very much there. The group in the middle, the 40% to 70% cohort, there certainly are some centers in that group that are running very well. They may be anywhere from 60%-70% occupied. They may be 55%-65% occupied. They do very well at that level, they are also in that maybe not going to improve meaningfully from that level. That group is, call it, 45% or so of our overall mix. There is still a good quarter of those centers to 25%-35% of the overall mix still have opportunity. Some are at steady state. The sub 40% occupied group, I would characterize, we're at 5% this quarter. That's an optimized time period because as we do cycle enrollment, that'll move around. Probably in that group where we have anywhere from 60-70 centers that might be candidates for deep consideration of whether they should close, we'd probably look at maybe 25-50 of those that we would have circled up as not likely to be viable over the long term and be candidates for closure beyond this year and maybe into 2028. That's how I'd characterize the overall mix. I think the one additional consideration that I'd put out there is, of course, Australia has been underperforming, the deep dive that we are looking to do on that portfolio- Jeff Meuler: Yeah Elizabeth Boland: might increase that a little bit, just trying to characterize the rest of the portfolio. Jeff Meuler: Help me with that deep dive, just how close are you, or what actions have you taken, or how close are you to taking more aggressive action in Australia? Stephen Kramer: Yeah. What I would say is, obviously, we shared in the last call the degradation that we saw in the enrollment. Our focus at this point really is on aligning the staffing with the enrollment levels that we have, obviously trying to improve enrollment from where we are. As Elizabeth just shared, the other action that we are looking at and circling up is around closures. To make sure that we're optimizing the portfolio for the future. Ultimately, as we think about Australia, we're trying to think broadly about how to make sure that we can get that back on track in the way that we were able to accomplish in the U.K. That's our sort of immediate action, over the intermediate term, we obviously are looking at strategic options as it relates to how we think about that particular geography broadly. Jeff Meuler: Thank you both. Elizabeth Boland: Thanks, Jeff. Stephen Kramer: Thank you. Operator: Our next question is from Jeff Silber with BMO Capital Markets. Please proceed with your question. Jeff Silber: Thank you so much. I believe on your prior call, you gave us operating or adjusted operating margin guidance by segment. Can we just revisit that again? Elizabeth Boland: Yeah. Operating margin, I think I just mentioned from a Back-up Care standpoint, we're looking at 28%-30% for the year. On full service, overall, we expect to be flat for the year, flat-ish, and the Australia headwind there is, as we talked about last quarter and this quarter, expected to be 50-75 basis points. We would be positive, certainly excluding that headwind. At this point, we're looking to be relatively flattish in full service, and then our ed advising would be in the call it 20% range. Jeff Silber: Okay, great. That's really helpful. Completely different question. A number of us cover some of the higher education companies, and I know it's a different business, but many of them have been talking about changes in the way that students are searching or finding schools that they want to attend, moving from traditional search engines, going to LLMs. I'm just wondering, are you seeing that at all? If so, are you changing your marketing strategy accordingly? Stephen Kramer: Sure. Happy to answer that. Clearly, your question is focused around the ed advisory aspect of what we do. When we think about the College Coach aspect, those are dependents of our clients' employees. They are traditional learners as opposed to adult learners. Those traditional learners really are seeking out both information through AI and that type of support. At the same time, these are very high-stakes decisions that they're making. Therefore, the expertise that our counselors provide is still an incredibly valuable aspect of their search process. When we think about our ed advisory business, you'll note that on the College Coach side of the business, we continue to see participant growth, and that is really reflective of the fact that those employees and their dependents are highly interested in seeking expert advice from former college admissions and financial aid professionals. Jeff Silber: Yeah, I'm sorry. I was actually thinking about your full service center business. I don't know if that's impacted at all. Elizabeth Boland: Yeah, I'm not sure that we've seen that kind of a shift, but happy to inquire more about that. Jeff Silber: Okay. Appreciate the color. Thanks so much. Elizabeth Boland: Sure. Operator: Our next question is from George Tong with Goldman Sachs. Please proceed with your question. George Tong: Hi. Thanks. Good afternoon. Elizabeth Boland: Hi. George Tong: Occupancy outside of Australia reached roughly 70% in the quarter. As occupancy rates continue to recover, where would you say you are in the margin expansion journey within full service, and how much operating leverage remains available before you reach a more normalized utilization level? Elizabeth Boland: If I'm understanding your question right, it's the sort of opportunity to get back to a 10% EBIT margin, which is where we have historically operated. We certainly see a pathway to that, both with sustaining the enrollment and the performance in our top cohort enrolled group. Just to maybe to walk through what we currently have in the headwind category of our business. Last year, we reported about 5.5% in full service. As I mentioned, we would expect it to be relatively stable with that in 2026. Looking at Australia in the round as a whole, that underperformance, the $20 million-$25 million we expect to be losing in that geography is roughly 150 basis points of headwind. We also have a group of centers as we have closed centers, and some of them we are working to completely exit the leases and the facility costs in them and that period of time to either run off the lease or to exit is another 50 basis points or so of headwind. Just coming in, we are at about 7.5% without those two component pieces. You take the centers that are sub 70% occupied, and we have a group of them that, on the earlier question, we expect will also be candidates for closure, that are affecting the overall performance. Just gaining the enrollment in the middle cohort and getting that operating leverage. We certainly see a path to getting back to 10% and honestly, beyond that. Step one is getting back to 10%, and then we'll be commenting later on that. It's been, I think, a process, but we are very heartened by how the top performers continue to deliver and how we've been able to move centers out of the bottom cohort into the middle cohort. George Tong: Got it. That's very helpful. Switching to Back-up Care, growth accelerated in the quarter even against tougher comps. Can you discuss whether there were unusual tailwinds that you saw this quarter, or is there reason to believe that these growth rates are in fact sustainable? Stephen Kramer: I think that there were no anomalies, if that's the question. I think that really the performance was down to continuing to increase the number of users and, as I said, a slight uptick in frequency. That said, Q3 is obviously the largest quarter, and so ultimately we start to moderate a little bit as compared to the Q2 in Q3 in terms of what we called for in terms of guidance. That really becomes just a very high peak, within the overall year. Overall, to answer your question very directly, we continue to see an opportunity for us to get to sort of a 13%-15% growth for the full year, and then continue to sustain double-digit growth for many years to come. George Tong: Got it. Very helpful. Thank you. Stephen Kramer: Thank you. Operator: Our next question is from Toni Kaplan with Morgan Stanley. Please proceed with your question. Toni Kaplan: Thanks so much. I wanted to go back to the center closures topic. Sort of been in a net closures mode for a couple of years. Is there anything that when you think about the go forward of your lease consortium strategy, are there any changes that you're planning to make, in terms of thinking about where to open new centers and things like that? I know it used to be more targeted towards urban areas because of the employer concentration. Is there anything sort of different that you're thinking about now? Stephen Kramer: Thank you for the question, Toni. What I would say is in the near term, we continue to be focused on opening new centers in collaboration and in partnership with clients. That is our first priority in the near term, is to continue to either transition the management of centers for self-operated centers and, in addition to that, open new greenfield opportunities with clients' financial support. I would say longer term, again, hearkening back to this client centricity, our lease consortium models will really be driven by where our clients and their employees live and work, and where we can garner support from our client partners in order to create additional sustainability for the model. Again, I would say overall, very client-centric. First and foremost in the near term with client centers. Beyond that, thinking about lease consortiums that again, garner support through our client partners and their employees. Toni Kaplan: Got it. Elizabeth, if you could help us for modeling purposes on what the FX was in the quarter for full service and if you have an updated expectation for FX for the full year, that'd be great as well. Elizabeth Boland: That is an important point, Toni, because it was a big guy, if you will, in the second quarter. The overall contribution in full service specifically, which is where FX most affects it, was about 100 basis points of tailwind. For the full year, it will also be relatively higher, around 125 basis points. In the second half, we would expect it to taper significantly. The swing between Q2 and Q3, part of the guide of 50 to 100 basis points in full service is reflective of a swing of 125 basis points from a +100 to -25, sort of as an effect on the overall growth rate. Toni Kaplan: Thank you. Elizabeth Boland: You're welcome. Operator: Once again, if you would like to ask a question, please press *1 on your telephone keypad. Our next question is from Josh Chan with UBS. Please proceed with your question. Josh Chan: Good afternoon. Thanks for taking my question. Maybe jumping off of the prior point about the moderation in full service from Q2 to Q3. Recognizing FX is a part of that, but there's also a further moderation. I'm wondering what of the main factors is causing that. Is it a greater impact on Australia? Any other dynamics affecting that? Elizabeth Boland: A little bit more of an effect from closures. FX is the largest sort of sequential effect. Closures in terms of gross or net closures, because the openings are about the same, but the impact of net closures is another 75 basis points or so. It was around 150 basis points in Q2. We'd expect it to be 225 net center closings in Q3. The other factor, there's a little bit of mix that goes on, but the other factor to call out is on the overall enrollment just a little bit. Australia at the margins is probably a little bit of a factor, but also we just tapered the enrollment growth a bit overall in the core enrollment, excluding Australia. Enrollment rather than being flat in the quarter, we'd expect it to be slightly down with including the effects of Australia of 100 basis points plus. Josh Chan: Okay. That makes a lot of sense. Thanks, Elizabeth. Elizabeth Boland: You're welcome. Josh Chan: Maybe on the repurchase, obviously, you took advantage of the opportunity in Q2 again. Could you talk to the willingness to buy back stock? I guess, how do you balance that between leverage and opportunistic buybacks? How do you think about that from here? Elizabeth Boland: The business generates a lot of cash, as you know. We have leaned in pretty strong on the repurchase the first half of the year. A total, $250 million this quarter on top of two and a quarter in the first quarter. We have been active and feel like that's been a good capital allocation against the modest additional revolver that we have used to effect that. At 2.2 times net leverage, we've been much more levered than that in the past. As I say, we're replenishing cash generation in the business. We feel comfortable, certainly at these ratios. We want to be opportunistic as needed. The guidance doesn't contemplate further repurchases from now. Our steer on the overall share count is just reflective, similar to other times as what we've done to date. Josh Chan: Great. Thank you so much for the color. Good luck in the second half. Elizabeth Boland: Thank you. Stephen Kramer: Thank you. Operator: Our next question is from Stephanie Moore with Jefferies. Please proceed with your question. Stephanie Moore: Yes, great. Good afternoon. Thank you. I wanted to touch a little bit about maybe price and volume contribution during the quarter, if you could break that out. Sorry if I missed that. Just a clarification there. If you could also talk through the expected occupancy improvement in full service in the back half of the year, I think there's a lot of moving pieces. I just wanted to make sure I was level setting the expectations there. Thank you. Elizabeth Boland: Sure. Overall price, our average price increase for the year has been about 4%. That's relatively consistent across all four quarters of the year and for the full year. Core enrollment, excluding Australia, our enrollment in the quarter was up roughly 100 basis points. Australia was a headwind of around 100 basis points. In terms of volume, that net volume would be relatively flat. I mentioned that the net closures was around 150 basis points. FX was an addition to the overall reported revenue of 100 basis points, a little bit of mix is the sort of overall difference to the full service growth rate. I think I might have missed one additional question that you had, Stephanie. Stephanie Moore: No, I think you got it. I was mostly just trying to get a sense of just the occupancy trends in the back half of the year and enrollment trends. Elizabeth Boland: Yeah. Stephanie Moore: Yeah. Elizabeth Boland: Yeah. The second quarter, of course, is the high water mark in terms of the seasonality, cyclicality of our full service enrollment business. We were high 60s in the quarter. We would expect that to be stepping down to mid 60s or so, and be reporting a little bit of occupancy gain compared to last year, but at the margin, still in the mid 60s plus. That's where we'd expect to end the year. It steps down as we're cycling the third quarter, just as a modest increase to the fourth quarter. Stephanie Moore: Okay. Thank you so much. Elizabeth Boland: You're welcome. Stephen Kramer: Thank you. Okay, well, thanks everyone for joining the call, wishing everyone a good night. Elizabeth Boland: Thanks, everyone. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Bright Horizons (BFAM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Bright Horizons Family Solutions (BFAM) reported $779.18 million in revenue for the quarter ended June 2026, representing a year-over-year increase of 6.5%. EPS of $1.28 for the same period compares to $1.07 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $773.51 million, representing a surprise of +0.73%. The company delivered an EPS surprise of +5.79%, with the consensus EPS estimate being $1.21. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Bright Horizons performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Number of Centers EOP (education and child care): 988 million compared to the 985 million average estimate based on two analysts. Revenue- Full service center-based child care: $557.3 million versus $554.45 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +3.2% change. Revenue- Educational advisory and other services: $28.3 million versus the two-analyst average estimate of $29.35 million. The reported number represents a year-over-year change of -1.2%. Revenue- Back-up care: $193.59 million versus the two-analyst average estimate of $188.7 million. The reported number represents a year-over-year change of +19%. Adjusted income from operations- Full service center-based child care: $44.2 million versus $41.74 million estimated by two analysts on average. Adjusted income from operations- Educational advisory and other services: $4.48 million versus the two-analyst average estimate of $5.23 million. Adjusted income from operations- Back-up care: $50.28 million versus the two-analyst average estimate of $47.47 million. View all Key Company Metrics for Bright Horizons here>>> Shares of Bright Horizons have returned +13.2% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Bright Horizons Family Solutions (BFAM) came out with quarterly earnings of $1.28 per share, beating the Zacks Consensus Estimate of $1.21 per share. This compares to earnings of $1.07 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.79%. A quarter ago, it was expected that this child care and early education services provider would post earnings of $0.79 per share when it actually produced earnings of $0.82, delivering a surprise of +3.8%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Bright Horizons, which belongs to the Zacks Business - Services industry, posted revenues of $779.18 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.73%. This compares to year-ago revenues of $731.57 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Bright Horizons shares have lost about 18.5% since the beginning of the year versus the S&P 500's gain of 6.9%. While Bright Horizons has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Bright Horizons was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.72 on $845.99 million in revenues for the coming quarter and $5.04 on $3.1 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Business - Services is currently in the bottom 24% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, ZipRecruiter, Inc. (ZIP), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly loss of $0.06 per share in its upcoming report, which represents a year-over-year change of +40%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. ZipRecruiter, Inc.'s revenues are expected to be $112 million, down 0.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report ZipRecruiter, Inc. (ZIP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

NEWTON, Mass., July 30, 2026--(BUSINESS WIRE)--Bright Horizons Family Solutions® Inc. (NYSE: BFAM) today announced financial results for the second quarter of 2026 and provided updated financial guidance for 2026. Bright Horizons is a leading provider of high-quality early education and child care, comprehensive back-up care solutions, and educational advisory services. Our offerings support both working families and employers’ workforce strategies by supporting their employees across life and career stages, and improving employee recruitment, engagement, productivity, retention, and career advancement. Second Quarter 2026 Highlights (compared to Second Quarter 2025): Revenue of $779 million (increase of 7%) Income from operations of $80 million (decrease of 7%) Net income of $41 million and diluted earnings per common share of $0.79 (decreases of 26% and 17%, respectively) Non-GAAP financial measures Adjusted EBITDA* of $131 million (increase of 13%) Adjusted income from operations* of $99 million (increase of 15%) Adjusted net income* of $66 million and diluted adjusted earnings per common share* of $1.28 (increases of 8% and 20%, respectively) "Our second quarter performance was solid, with 7% revenue growth and 20% adjusted EPS growth," said Stephen Kramer, Chief Executive Officer. "Back-up care revenue grew 19% as we entered the summer with strong utilization, while full service delivered another quarter of solid operating margin expansion. Our differentiated employer-centric model and singular focus on quality continue to drive strong financial results and position us to deepen our impact for the families and employers we serve." Second Quarter 2026 Results Revenue increased by $47.6 million, or 7%, to $779.2 million in the second quarter of 2026 from the second quarter of 2025, primarily due to growth in back-up care and full service center-based child care, partially offset by the reductions in revenue from centers that have closed over the last 12 months. Income from operations was $79.8 million for the second quarter of 2026 compared to $86.1 million for the second quarter of 2025, a decrease of 7%. The decrease in income from operations is primarily related to impairment losses of $19.1 million related to centers in certain markets, partially offset by increased service levels and contributions from our back-up care segment. Net income was $40.6 million for the second quarter of 2026 compared to $54.8 million for the second quarter of 2025, a decrease of 26%, due to the decrease in income from operations noted above, a higher effective tax rate and higher interest expense. Diluted earnings per common share was $0.79 for the second quarter of 2026 compared to $0.95 for the second quarter of 2025. In the second quarter of 2026, adjusted EBITDA* increased by $14.9 million, or 13%, to $130.6 million, and adjusted income from operations* increased by $12.9 million, or 15%, to $99.0 million from the second quarter of 2025, primarily due to increased service levels and contributions from the back-up care segment. Adjusted net income* was $66.3 million, an increase from adjusted net income of $61.5 million in the same period in the prior year, as a result of the increase in adjusted income from operations noted above partially offset by higher interest expense and an increase to the adjusted effective tax rate. Diluted adjusted earnings per common share* was $1.28 for the second quarter of 2026 compared to $1.07 for the second quarter of 2025. As of June 30, 2026, the Company operated 988 early education and child care centers with the capacity to serve approximately 112,500 children and their families. *Adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are financial measures that are not calculated in accordance with generally accepted accounting principles in the United States ("GAAP"), which are commonly referred to as "non-GAAP financial measures." Adjusted EBITDA represents EBITDA (which is net income, as determined in accordance with GAAP, before interest expense, income tax expense, depreciation, and amortization) adjusted to exclude stock-based compensation expense, impairment losses, and, at times, non-recurring costs, such as debt refinancing costs, lease termination costs, and transaction costs. Adjusted income from operations represents income from operations, as determined in accordance with GAAP, adjusted to exclude impairment losses, and, at times, non-recurring costs, such as debt refinancing costs, lease termination costs, and transaction costs. Adjusted net income represents net income, as determined in accordance with GAAP, adjusted to exclude amortization, stock-based compensation expense, impairment losses, debt refinancing costs and, at times, non-recurring costs, such as lease termination costs and transaction costs, and the income tax provision (benefit) thereon. Diluted adjusted earnings per common share is calculated using adjusted net income. These non-GAAP financial measures are more fully described and are reconciled from the respective measures determined under GAAP in "Presentation of Non-GAAP Financial Measures" and the attached table "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations," respectively. Balance Sheet and Liquidity At June 30, 2026, the Company had $163.7 million of cash and cash equivalents and $520.1 million available for borrowing under our revolving credit facility. In the six months ended June 30, 2026, we generated $202.8 million of cash from operations, compared to $220.4 million for the same period in 2025, repurchased approximately 6.6 million shares totaling $473.2 million compared to approximately 0.5 million shares totaling $60.7 million for the same period in the prior year, and made net investments totaling $39.4 million, compared to $38.0 million for the same period in the prior year. On June 1, 2026, the Company amended its existing senior secured credit facilities to, among other changes, issue $375 million of a term loan A facility as well as increase the borrowing capacity of its revolving credit facility from $900 million to $1.0 billion. 2026 Outlook Based on current trends and expectations, we currently expect fiscal year 2026 revenue to be in the range of $3.085 billion to $3.115 billion and diluted adjusted earnings per common share to be in the range of $5.05 to $5.15. The Company will provide additional information on its outlook during its earnings conference call. Conference Call Bright Horizons Family Solutions will host an investor conference call today at 5:00 pm ET to discuss the results for the second quarter of 2026, as well as the Company’s updated business outlook and strategy. Interested parties are invited to listen to the conference call by dialing 1-844-539-3703, or for international callers, 1-412-652-1273, and asking for the Bright Horizons Family Solutions conference call moderated by Chief Executive Officer Stephen Kramer. Replays of the entire call will be available through August 13, 2026 at 1-844-512-2921, or for international callers, at 1-412-317-6671, conference ID #13758193. A link to the audio webcast of the conference call and a copy of this press release are also available through the Investor Relations section of the Company’s web site, investors.brighthorizons.com. Forward-Looking Statements This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms "believes," "expects," "may," "will," "should," "seeks," "projects," "approximately," "intends," "plans," "estimates" or "anticipates," or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, including statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, operating expectations, execution and delivery of our services and solutions, our model, business trends, value and quality of our service offerings, market penetration, our future growth opportunities, enrollment levels and trends in jurisdictions, utilization of services, margins, back-up care contributions, our investments, long-term growth strategy, cash flows, estimated effective tax rate, tax expense, our future business and financial performance, client partners and relationships, use and impact of our services, share repurchase activity and our 2026 financial guidance. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company believes that these risks and uncertainties include, but are not limited to, changes in the demand for child care, dependent care and other workplace solutions, including variations in enrollment trends and lower than expected demand from employer sponsor clients as well as variations in workforce demographics and work environments; the constrained labor market for teachers and staff and ability to hire and retain talent, including the impact of increased compensation and labor costs; the availability or lack of government support programs, and the impact of available government child care benefit programs; our ability to respond to changing client and customer needs; competition in our industry; the possibility that acquisitions may disrupt our operations and expose us to additional risk; our ability to pass on our increased costs; our indebtedness and the terms of such indebtedness; our ability to withstand seasonal fluctuations in the demand for our services; our ability to implement our growth strategies successfully; our ability to close underperforming centers; changes in general economic, political, business and financial market conditions and other macroeconomic events and uncertainty, including the impact of inflation and interest rate fluctuations; fluctuations in currency exchange rates; the effects of a cyber-attack, data breach or other security incident on our information technology system or software or those of our third party vendors; changes in tax rates or policies; damage or harm to our brand or reputation, including as a result of recent incidents and media coverage; outcome of litigation, legal matters and regulatory investigations; insurance risks; changes in laws and regulations; and other risks and uncertainties more fully described in the "Risk Factors" section of our Annual Report on Form 10-K filed on February 26, 2026, and other factors disclosed from time to time in our other filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law. Presentation of Non-GAAP Financial Measures In addition to the results provided in accordance with GAAP throughout this press release, the Company has provided certain non-GAAP financial measures that present operating results on a basis adjusted for certain items. The Company uses these non-GAAP financial measures as key performance indicators for the purpose of evaluating performance internally, and in connection with determining incentive compensation for Company management, including executive officers. Adjusted EBITDA is also used in connection with the determination of certain ratio requirements under our credit agreement. We believe that these non-GAAP financial measures provide investors with useful information with respect to our historical operations. These non-GAAP financial measures are not intended to replace, and should not be considered superior to, the presentation of our financial results in accordance with GAAP. The use of the terms adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. With respect to our outlook for diluted adjusted earnings per common share, we do not provide the most directly comparable GAAP financial measure or corresponding reconciliation to such GAAP financial measure on a forward-looking basis. We are unable to predict with reasonable certainty and without unreasonable effort certain items such as the timing and amount of net excess income tax benefits or shortfalls, future impairments, lease termination costs, transaction costs, and other non-recurring costs, as well as gains or losses from the early retirement of debt and the outcome from legal proceedings. These items are uncertain, depend on various factors outside our management’s control, and could significantly impact, either individually or in the aggregate, our future period earnings per common share as calculated and presented in accordance with GAAP. For more information regarding adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share, refer to the reconciliation of GAAP financial measures to the non-GAAP financial measures in the attached table "Bright Horizons Family Solutions Inc. Non-GAAP Reconciliations." About Bright Horizons Family Solutions Inc. Bright Horizons® is a leading provider of high-quality early education and child care, back-up care, and workforce education services. For 40 years, we have partnered with employers to support workforces by providing services that help working families and employees thrive personally and professionally. Bright Horizons operates approximately 1,000 early education and child care centers in the United States, the United Kingdom, the Netherlands, Australia and India, and serves more than 1,450 of the world’s leading employers. Bright Horizons’ early education and child care centers, back-up child and elder care, and workforce education programs help employees succeed at each life and career stage. For more information, go to www.brighthorizons.com. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730643821/en/ Contacts Investors:Elizabeth BolandChief Financial Officer - Bright [email protected] 617-673-8125 Michael FlanaganGroup Vice President - Strategic Finance - Bright [email protected] 617-673-8720 Jordan BertierDirector - Investor Relations - Bright [email protected] 617-673-8192 Media:Ilene SerpaVice President - Communications - Bright [email protected] 617-673-8044

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Bright Horizons Family Solutions stock has staged a short term rebound, yet over five years the share price is still down about 50%, while a Discounted Cash Flow (DCF) intrinsic value estimate currently suggests the shares may trade at a sizeable discount to that estimate and market based multiples look closer to fair. The share price has declined about 50% over the past 5 years, which raises the question of whether the current valuation reflects a reset in expectations or an opportunity if the business can sustain its cash flows. For a childcare and early education provider like Bright Horizons Family Solutions, expectations around stable occupancy and pricing can support the intrinsic value case, while any pressure on costs or utilization may weigh on margins and justify a more cautious market price. The stock scores 3 out of 6 on the valuation checks, which points to a mixed picture rather than a clear bargain or clear overvaluation. The issue now is whether the gap between the current share price and the intrinsic value estimate for Bright Horizons Family Solutions is wide enough, and well supported enough, to compensate investors for the risks the market is still pricing in. Find out why Bright Horizons Family Solutions' -33.3% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model here uses projected cash flows to estimate what Bright Horizons Family Solutions could be worth today. Based on the latest twelve month free cash flow of about $270 million and a set of growing, but relatively modest, future cash flow assumptions, the model indicates an intrinsic value of roughly $136 per share. That compares with a current share price that, under these assumptions, implies an intrinsic discount of about 43.9%. In this framework, the DCF suggests the stock is undervalued relative to its cash generation profile. The projections assume Bright Horizons Family Solutions continues to produce positive free cash flow and that this gradually increases, without relying on aggressive expansion or sharp swings in profitability. Within the limits of these cash flow assumptions, Bright Horizons Family Solutions stock appears undervalued relative to the DCF-based estimate of intrinsic value. Our Discounted Cash Flow (DCF) analysis suggests Bright Horizons Family Solutions is undervalued by 43.9%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bright Horizons Family Solutions. P/E is a useful cross check for Bright Horizons Family Solutions because earnings are positive and the stock is covered by peers in the same consumer services industry. The stock trades on a P/E of about 21.3x, compared with an industry average of roughly 16.1x and a peer average near 15.5x, so the market is putting a higher price on each dollar of earnings than many comparable childcare and consumer services companies. A more tailored fair P/E ratio for Bright Horizons Family Solutions, which takes into account its size, sector, margins and risk profile, is estimated at about 23.5x. That is modestly above the current 21.3x level, indicating that the market multiple sits a little below this modelled fair range rather than at an extreme premium or discount to peers. Overall, Bright Horizons Family Solutions stock appears roughly fairly valued on the P/E multiple, sitting slightly under the modelled fair ratio while still trading above broad industry benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the Bright Horizons Family Solutions valuation puzzle leaves off. They spell out which future paths for growth, margins and earnings would need to hold for the stock to be worth materially more or less than today's price, and each scenario links its number to a specific view on how Bright Horizons Family Solutions' growth, profitability and risks might evolve, giving you something concrete to return to as new information comes through on the Community page. One of the top community narratives on Bright Horizons Family Solutions: 27% undervalued Read one of the top narratives on Bright Horizons Family Solutions Do you think there's more to the story for Bright Horizons Family Solutions? Head over to our Community to see what others are saying! For Bright Horizons Family Solutions, the Discounted Cash Flow (DCF) work points to a sizeable intrinsic value gap, while the P/E comparison suggests the stock is priced roughly in line with what similar companies trade on. That mix, along with the broader checks, indicates neither a clear bargain nor a clear stretch valuation. The key issue from here is whether Bright Horizons Family Solutions can support its cash flow and margins strongly enough for the current discount to look like mispricing rather than a market judgment on ongoing cost and utilization risks. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BFAM. 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