Bright Horizons Family Solutions Inc.

and welcome to Bright Horizons Family Solutions second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Michael Flanagan, Vice President, Investor Relations. Thank you, Mr. Flanagan. You may begin.

Thank you, Ranju, and 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, 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 2023 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. We also refer today to non-GAAP financial measures, which are detailed and reconciled to their GAAP counterparts in our earnings release, which is available under 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. Stephen 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 Stephen.

Thanks, Mike, and welcome to everyone who has joined the call. I am really pleased with our performance in the second quarter and first half of 2024. Revenue growth remains strong in both full-service and backup care, and adjusted EPS growth of nearly 40% outpaced our expectations through better operational efficiency across all three of our segments. With the outperformance in the first half of the year and continued progress expected for the remainder of the year, we are raising our full year guidance on both the top and bottom line. So to get into some of the specifics on the second quarter, revenue increased 11% to 670 million with adjusted EBITDA up 25% to 103 million and adjusted EPS growing 38% to 88 cents per share. In our full service childcare segment, Revenue increased 11% in the second quarter to $507 million. We opened seven centers in the quarter, including new client centers for Walmart, Hormel Foods, United Health Services, and the University of Arkansas for Medical Sciences. Enrollment in centers opened for more than one year increased at a mid-single-digit rate in Q2. An average occupancy percentage stepped up to the mid-60s. The U.S. continues to see strong performance with mid-single-digit enrollment growth driven by high single-digit growth in our younger age groups and mid-single-digit growth in the preschool age group. Outside the U.S., enrollment increased at a low single-digit rate. The U.K. continues to lead growth internationally with mid-single-digit enrollment growth, while the Netherlands and Australia continue to have higher-than-average occupancy levels and, as a result, more limited expansion in enrollment. Specifically on our UK business, after a challenging couple of years, the first half of 2024 has been marked by steadier enrollment gains, increased permanent staff, and reduced reliance on third-party agencies, along with moderating inflation. The initiatives we've put in place over the last 18 months have significantly improved the efficiency of labor, delivering center operating improvements more quickly than we anticipated. Although the UK will continue to be a headwind to our overall full-service profitability in the coming quarters, the progress we have seen this year gives me confidence that our strategy is working and our UK team will continue to progress towards recovery to pre-pandemic performance levels. Let me now turn to Backup Care, which delivered another strong quarter, growing revenue 15% to $136 million. In addition to solid utilization Across our various use types, we also continue to expand our client base with Q2 launches, including Honeywell and the Georgia Institute of Technology. Use growth in our traditional care network remains solid, underpinned by continued expansion of the number of client employees utilizing their backup care benefits. Center-based care remains the predominant care type and continues to grow faster than in-home, even as center occupancy continues to grow. Encouragingly, we started off the seasonally high-use summer period on a good note, with solid use in June continuing into July. We remain very excited about the opportunity in the backup care segment as we work to leverage our technology and marketing investments and innovative care types to best serve our clients, and their employees. Our education advisory business grew to 26 million, increasing 2.5% over the prior year, in line with our expectations for the quarter, but well below the longer-term growth opportunity we see for this segment. We continue to add new clients to the portfolio, notably launching global foundries and international paper. While growth in participants remains challenging, the team is working diligently on product and packaging as well as marketing with the goal of driving greater client adoption and client employee participation in 2025 and beyond. Before I wrap up, I want to congratulate and celebrate the recent graduation of nearly 400 Bright Horizons employees in our Horizons teacher degree program. I had the honor of speaking at this year's commencement, and I want to applaud this tremendous accomplishment for our educators. It takes a significant amount of time, effort, and commitment to earn a CDA, AA, and BA while working as an early childhood educator in a Bright Horizon Center. With more than 80% of our centers having an enrolled learner, this program is truly a win, win, win. Our teachers advance their education and grow their careers with us. The families we serve benefit from the highest quality care and education. and Bright Horizons develops an even more qualified and engaged workforce. In closing, I'm pleased with our strong first half of 2024. We have executed well against the goals we set for the year and are set up well to increase our guidance. Specifically, we now expect revenue growth for the year of approximately 11%, a range of 2.65 to 2.7 billion, and adjusted EPS in the range of $3.30 to $3.40 per share. With that, I'll turn the call over to Elizabeth, who will dive into the quarterly numbers and share more details around our outlook.