Bright Horizons Family Solutions Reports Financial Results for the Third Quarter of 2025

NEWTON, Mass.--( BUSINESS WIRE)--Bright Horizons Family Solutions ® Inc. (NYSE: BFAM) today announced financial results for the third quarter of 2025 and provided updated financial guidance for 2025. Bright Horizons is a leading provider of high-quality early education and child care, family care solutions, and workforce education services designed to support working families and client employees across life and career stages.

Third Quarter 2025 Highlights (compared to Third Quarter 2024):

Non-GAAP financial measures

“We posted a strong third quarter that again highlights the value of our unique employer sponsored model,” said Stephen Kramer, Chief Executive Officer. “Back-Up Care outperformance was driven by higher utilization among client employees supported by increased supply of owned and third-party care providers. Full-Service also progressed with improvements in enrollment and margins. As we close out the year, our scale of client partners, growing diversity of offerings and broad supply network provide us with a strong foundation to reach more employees and deepen relationships with employers heading into 2026.”

Third Quarter 2025 Results

Revenue increased by $83.7 million, or 12%, to $802.8 million in the third quarter of 2025 from the third quarter of 2024, primarily due to increased utilization of back-up care, as well as enrollment gains and tuition price increases at our centers.

Income from operations was $120.8 million for the third quarter of 2025 compared to $89.4 million for the third quarter of 2024, an increase of 35%. The increase in income from operations is primarily related to incremental gross profit contributions resulting from higher utilization of services in our back-up care segment, as well as enrollment growth and margin improvement in our full service center-based child care segment. Net income was $78.6 million for the third quarter of 2025 compared to $54.9 million for the third quarter of 2024, an increase of 43%, due to the increase in income from operations noted above and a lower effective tax rate. Diluted earnings per common share was $1.37 for the third quarter of 2025 compared to $0.94 for the third quarter of 2024.

In the third quarter of 2025, adjusted EBITDA* increased by $35.1 million, or 29%, to $156.1 million, and adjusted income from operations* increased by $35.1 million, or 39%, to $124.5 million from the third quarter of 2024, due to increased contributions from both the back-up care segment and full service center-based child care segment. Adjusted net income* increased by $25.2 million, or 39%, to $90.1 million, as a result of the increase in adjusted income from operations and lower debt interest expense. Diluted adjusted earnings per common share* was $1.57 for the third quarter of 2025 compared to $1.11 for the third quarter of 2024.

As of September 30, 2025, the Company operated 1,013 early education and child care centers with the capacity to serve approximately 115,000 children.

*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 and non-recurring costs, such as debt refinancing costs, and lease termination costs, and, at times, other non-recurring costs such as transaction costs and impairment costs. Adjusted income from operations represents income from operations, as determined in accordance with GAAP, adjusted to exclude non-recurring costs, such as debt refinancing costs, and lease termination costs and, at times, other non-recurring costs such as transaction costs and impairment costs. Adjusted net income represents net income, as determined in accordance with GAAP, adjusted to exclude amortization, stock-based compensation expense, and non-recurring costs, such as debt refinancing costs, lease termination costs, interest related to pre-acquisition obligations, and the income tax provision (benefit) thereon, and, at times, other non-recurring costs such as transaction costs and impairment costs. 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 September 30, 2025, the Company had $116.6 million of cash and cash equivalents and $411.8 million available for borrowing under our revolving credit facility. In the nine months ended September 30, 2025, we generated $202.8 million of cash from operations, compared to $216.8 million for the same period in 2024, and made net investments totaling $63.5 million, compared to $92.7 million for the same period in the prior year.

2025 Outlook

Based on current trends and expectations, we currently expect fiscal year 2025 revenue to be approximately $2.925 billion and diluted adjusted earnings per common share to be in the range of $4.48 to $4.53. 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 third quarter of 2025, 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 November 13, 2025 at 1-844-512-2921, or for international callers, at 1-412-317-6671, conference ID #13752642. 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, business trends, value of our model, our offerings, our future growth opportunities, enrollment levels and full-service margins, back-up care use, our provider network, long-term growth strategy, estimated effective tax rate, tax expense, our future business and financial performance, client partners and relationships, use and impact of our services, and our 2025 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; 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; impacts to our brand or reputation; litigation-related and 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 27, 2025, 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 global provider of high-quality early education and child care, back-up care, and workforce education services. For more than 35 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 more than 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 senior care, and workforce education programs help employees succeed at each life and career stage. For more information, go to www.brighthorizons.com.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)

Three Months Ended September 30,

2025

2024

Revenue

802,812

100.0

719,099

100.0

Cost of services

585,763

73.0

537,564

74.8

Gross profit

217,049

27.0

181,535

25.2

Selling, general and administrative expenses

94,726

11.8

89,499

12.4

Amortization of intangible assets

1,477

0.1

2,640

0.4

Income from operations

120,846

15.1

89,396

12.4

Interest expense — net

(12,212

)

(1.6

(11,613

)

(1.6

Income before income tax

108,634

13.5

77,783

10.8

Income tax expense

(30,082

)

(3.7

(22,878

)

(3.2

Net income

78,552

9.8

54,905

7.6

Earnings per common share:

Common stock — basic

1.38

0.95

Common stock — diluted

1.37

0.94

Weighted average common shares outstanding:

Common stock — basic

56,927,187

58,062,009

Common stock — diluted

57,377,773

58,701,618

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except share data)

(Unaudited)

Nine Months Ended September 30,

2025

2024

Revenue

2,199,909

100.0

2,011,867

100.0

Cost of services

1,644,573

74.8

1,532,792

76.2

Gross profit

555,336

25.2

479,075

23.8

Selling, general and administrative expenses

281,421

12.8

264,544

13.1

Amortization of intangible assets

4,745

0.2

16,139

0.8

Income from operations

269,170

12.2

198,392

9.9

Interest expense — net

(33,118

)

(1.5

(37,307

)

(1.9

Income before income tax

236,052

10.7

161,085

8.0

Income tax expense

(64,676

)

(2.9

(50,017

)

(2.5

Net income

171,376

7.8

111,068

5.5

Earnings per common share:

Common stock — basic

3.00

1.92

Common stock — diluted

2.97

1.90

Weighted average common shares outstanding:

Common stock — basic

57,188,938

57,970,587

Common stock — diluted

57,680,543

58,483,404

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

September 30, 2025

December 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

116,604

110,327

Accounts receivable — net

246,653

283,336

Prepaid expenses and other current assets

91,441

102,368

Total current assets

454,698

496,031

Fixed assets — net

585,534

572,939

Goodwill

1,819,238

1,762,683

Other intangible assets — net

194,727

197,575

Operating lease right-of-use assets

721,201

725,897

Other assets

108,749

95,194

Total assets

3,884,147

3,850,319

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt

—

28,500

Current portion of revolving credit facility

169,321

—

Accounts payable and accrued expenses

280,913

304,541

Current portion of operating lease liabilities

107,328

102,090

Deferred revenue

243,404

305,098

Other current liabilities

40,171

39,170

Total current liabilities

841,137

779,399

Long-term debt — net

747,525

918,449

Operating lease liabilities

724,327

743,562

Other long-term liabilities

117,681

110,214

Deferred income taxes

26,024

20,299

Total liabilities

2,456,694

2,571,923

Total stockholders’ equity

1,427,453

1,278,396

Total liabilities and stockholders’ equity

3,884,147

3,850,319

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended September 30,

2025

2024

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

171,376

111,068

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

68,655

75,601

Stock-based compensation expense

22,512

24,607

Deferred income taxes

8,491

(6,844

)

Non-cash interest and other — net

5,190

10,464

Changes in assets and liabilities

(73,432

)

1,917

Net cash provided by operating activities

202,792

216,813

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of fixed assets — net

(58,907

)

(65,254

)

Proceeds from debt securities and other investments

10,287

23,908

Purchases of debt securities and other investments

(9,760

)

(43,049

)

Payments and settlements for acquisitions — net of cash acquired

(5,106

)

(8,267

)

Net cash used in investing activities

(63,486

)

(92,662

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Revolving credit facility — net

469,282

—

Principal payments of long-term debt

(501,000

)

(12,000

)

Payments of debt issuance costs

(3,046

)

—

Purchase of treasury stock

(104,671

)

—

Proceeds from issuance of common stock upon exercise of options

11,826

24,808

Taxes paid related to the net share settlement of stock options and restricted stock

(15,229

)

(4,758

)

Payments of deferred and contingent consideration for acquisitions

—

(103,872

)

Net cash used in financing activities

(142,838

)

(95,822

)

Effect of exchange rates on cash, cash equivalents and restricted cash

5,786

1,307

Net increase in cash, cash equivalents and restricted cash

2,254

29,636

Cash, cash equivalents and restricted cash — beginning of period

123,715

89,451

Cash, cash equivalents and restricted cash — end of period

125,969

119,087

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

Full service

center-based

child care

Back-up care

Educational

advisory services

Total

Three Months Ended September 30, 2025

Revenue

515,507

253,372

33,933

802,812

Income from operations

16,750

95,332

8,764

120,846

Adjusted income from operations (1)

20,400

95,332

8,764

124,496

As a percentage of revenue

Three Months Ended September 30, 2024

Revenue

486,567

201,783

30,749

719,099

Income from operations

12,465

70,487

6,444

89,396

Adjusted income from operations

12,465

70,487

6,444

89,396

As a percentage of revenue

(1)

For the three months ended September 30, 2025, adjusted income from operations represents income from operations excluding $1.3 million of costs incurred in connection with August 2025 debt refinancing and $2.4 million of net lease termination costs allocated to the full service center-based child care segment.

Full service

center-based

child care

Back-up care

Educational

advisory services

Total

Nine Months Ended September 30, 2025

Revenue

1,566,321

544,654

88,934

2,199,909

Income from operations

90,284

162,639

16,247

269,170

Adjusted income from operations (1)

93,934

162,639

16,247

272,820

As a percentage of revenue

Nine Months Ended September 30, 2024

Revenue

1,477,284

452,945

81,638

2,011,867

Income from operations

66,553

118,063

13,776

198,392

Adjusted income from operations

66,553

118,063

13,776

198,392

As a percentage of revenue

(1)

For the nine months ended September 30, 2025, adjusted income from operations represents income from operations excluding $1.3 million of costs incurred in connection with August 2025 debt refinancing and $2.4 million of net lease termination costs allocated to the full service center-based child care segment.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

NON-GAAP RECONCILIATIONS

(In thousands, except share data)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net income

78,552

54,905

171,376

111,068

Interest expense — net

12,212

11,613

33,118

37,307

Income tax expense

30,082

22,878

64,676

50,017

Depreciation

22,569

19,862

63,910

59,462

Amortization of intangible assets (a)

1,477

2,640

4,745

16,139

EBITDA

144,892

111,898

337,825

273,993

As a percentage of revenue

Additional adjustments:

Stock-based compensation expense (b)

7,526

9,091

22,512

24,607

Other costs (c)

3,650

—

3,650

—

Total adjustments

11,176

9,091

26,162

24,607

Adjusted EBITDA

156,068

120,989

363,987

298,600

As a percentage of revenue

Income from operations

120,846

89,396

269,170

198,392

Other costs (c)

3,650

—

3,650

—

Adjusted income from operations

124,496

89,396

272,820

198,392

As a percentage of revenue

Net income

78,552

54,905

171,376

111,068

Income tax expense

30,082

22,878

64,676

50,017

Income before income tax

108,634

77,783

236,052

161,085

Amortization of intangible assets (a)

1,477

2,640

4,745

16,139

Stock-based compensation expense (b)

7,526

9,091

22,512

24,607

Other costs (c)

3,650

—

3,650

—

Other interest costs (d)

2,186

—

2,737

—

Adjusted income before income tax

123,473

89,514

269,696

201,831

Adjusted income tax expense (e)

(33,338

)

(24,613

)

(73,338

)

(56,008

)

Adjusted net income

90,135

64,901

196,358

145,823

As a percentage of revenue

Weighted average common shares outstanding — diluted

57,377,773

58,701,618

57,680,543

58,483,404

Diluted adjusted earnings per common share

1.57

1.11

3.40

2.49

(a)

Amortization of intangible assets represents total amortization expense, including $0.1 million and $8.4 million for the three and nine months ended September 30, 2024, respectively, associated with intangible assets recorded in connection with our going private transaction in May 2008.

(b)

Stock-based compensation expense represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation.

(c)

Other costs in the three and nine months ended September 30, 2025 consist of $1.3 million related to the August 2025 debt refinancing recorded to selling, general and administrative expenses and net lease termination costs of $2.4 million recorded to cost of services.

(d)

Other interest costs in the three months ended September 30, 2025 consist of $1.6 million in interest incurred related to a pre-acquisition obligation, as well as $0.6 million related to the August 2025 debt refinancing, which were recorded to interest expense. Other interest costs in the nine months ended September 30, 2025 consist of $1.6 million in interest incurred related to a pre-acquisition obligation, as well as $1.1 million of debt refinancing costs related to the April 2025 and August 2025 debt refinancings, which were recorded to interest expense.

(e)

Adjusted income tax expense represents income tax expense calculated on adjusted income before income tax at an effective tax rate of approximately 27% for the three and nine months ended September 30, 2025 and approximately 28% for the three and nine months ended September 30, 2024. The jurisdictional mix of the expected adjusted income before income tax for the full year will affect the estimated effective tax rate for the year.