Bright Horizons Family Solutions Inc.

Second-quarter revenue was $779 million, up 7% year over year. Adjusted EPS was $1.28, up 20%. Adjusted operating income increased 15% to $99 million, with adjusted operating margin expanding 95 basis points to 12.7%; adjusted EBITDA rose 13% to $131 million, with margin of 17%. Back-up Care revenue grew 19% to $194 million and adjusted operating income rose 23% to $50 million, with margin up to 26%. Full service revenue grew 3% to $557 million and adjusted operating income rose 10% to $44 million, with margin at 7.9%. Educational advisory revenue was $28 million, flat year over year. Cash from operations was $95 million, fixed asset investments were about $19 million, and share repurchases totaled approximately $250 million. Quarter-end cash was $164 million and gross debt was about $1.3 billion, with trailing net leverage at 2.2x. For the full year, management narrowed revenue to $3.085 billion-$3.115 billion and raised adjusted EPS to $5.05-$5.15. Segment outlook includes Back-up Care revenue growth of 13%-15%, full service reported revenue growth of 2.5%-3%, and ed advisory growth in the low single digits. Q3 guidance calls for revenue of $835 million-$845 million and adjusted EPS of $1.73-$1.78.

Stephen Kramer framed the quarter as evidence that Bright Horizons’ employer-sponsored model remains durable, with growth coming from both deeper penetration at existing Back-up Care clients and new relationships. He emphasized the company’s multi-pronged Back-up strategy: more unique users, slightly higher frequency, expanding care offerings like employer camps, and new logos. On full service, he highlighted center transitions and new employer-funded openings as proof that the company can keep expanding its footprint while optimizing the portfolio. His tone was confident but measured, with repeated focus on long-term runway rather than any single quarter’s seasonal boost.

Elizabeth Boland focused on the quarter’s margin expansion and capital deployment. She cited adjusted operating income of $99 million, adjusted EBITDA of $131 million, cash from operations of $95 million, and share repurchases of about $250 million, while noting quarter-end cash of $164 million and gross debt of about $1.3 billion. She said net interest expense was $14 million and the structural adjusted tax rate was 28.75% in the quarter, with a full-year tax rate now expected at 28.5%. She also reiterated segment margin targets, saying Back-up Care should remain in the 28%-30% operating margin range, while full service is expected to be roughly flat for the year with Australia still a meaningful headwind.

Analysts pressed on whether Back-up Care’s strong growth was being boosted disproportionately by summer camp and whether those growth rates are sustainable. Management said summer camp is only one component and that the quarter’s 19% growth came across all care types, driven mainly by more users and a slight increase in frequency. Questions also focused on full service occupancy, closure strategy, and Australia; management said occupancy should step down seasonally into the mid-60% range, that some 60%-70% occupied centers can be steady state while a smaller subset remains candidates for closure, and that Australia is being reviewed for staffing alignment and strategic options. On capital allocation, management said the business generates strong cash and that buybacks were opportunistic, but the guidance does not assume further repurchases from here.