Bright Horizons Family Solutions Inc.

Greetings. Welcome to Bright Horizons Family Solutions first quarter 2025 earnings release conference 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Michael Flanagan, Vice President, Investor Relations for the Bright Horizons Family Solutions. Thank you. You may begin.

Thank you, Cherry, and welcome to Bright Horizons' first 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, 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 2024 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 under the IR section of our website at investors.brightverizons.com. Joining me on today's call is our Chief Executive Officer, Stephen Kramer, and our Chief Financial Officer, Elizabeth Bolin. Stephen will start by reviewing our results and provide an update on the business. Elizabeth will then follow with a more detailed review of the numbers before we open it up to your questions. So with that, let me turn the call over to Stephen.

Thanks, Mike, and good evening to everyone on the call. We are pleased to report a strong start to 2025. with revenue growth in line and earnings growth well ahead of our expectations. These results reflect the successful execution of our strategy across all segments. From growing enrollment and expanding our backup business to efficient service delivery, I am encouraged by our continued progress and remain confident in our ability to effectively serve the working families and employer clients that count on us each and every day. So to get into some of the specifics. Revenue in the quarter increased 7% to $666 million, and adjusted EPS grew 51% to $0.77 per share. At a segment level, our full-service child care business grew 6% to $511 million, and operating margins expanded 210 basis points to 6.5%. We added six centers in the first quarter, four of which were client-sponsored, including centers for Royal Caribbean and Arthrex. Overall tuition increases averaged four to 5% and enrollment in centers open more than one year increased at a low single digit rate with average occupancy percentage in the mid 60s, a sequential step up from the fourth quarter. In terms of enrollment trends in the US, we've continued to see encouraging enrollment dynamics in certain underperforming centers located in business districts where return to office policies have been gaining traction. At the same time, We've also seen a somewhat slower velocity in the pace of commitments across some other U.S. markets, as families consider longer-term spending decisions, including for childcare, in the context of ongoing macroeconomic uncertainty. In response, we are sharpening our focus, working to create urgency, improve follow-up, and streamlining the path from inquiry to enrollment, all while reinforcing the value and quality of our services. Even considering this current dynamic, we remain confident in the opportunity to drive continued margin improvement through enrollment growth and maintaining price-to-cost differential and operating discipline. Outside the U.S., the UK continues to demonstrate strong progress on enrollment and margin recovery. In addition to steady enrollment growth, we have made meaningful improvements in recruiting and staff retention. As a result, we continue to see a clear path to earnings break even in the UK in 2025. Let me now turn to backup care. Revenue increased 12% to 129 million, which was in line with our expectations. Traditional use remains strong across all network types in the first quarter. In addition, early reservations for school age programs during the peak summer months are quite encouraging. Likewise, employers continue to prioritize family support benefits. We started the year strong with 95% client retention and many new client launches, including the University of Michigan, Sherwin-Williams, and LabCorp, among others. With our growing client base and increasing engagement among eligible employees, we remain on track to achieve our 2025 objectives. Our education advisory business grew 8% this past quarter, to 26 million, ahead of our expectations. We saw encouraging growth in participant engagement within our EdAssist service, and CollegeCoge continued to deliver solid operating performance. We also added new clients to the portfolio, including Tower Health and Tiffany's. As we have shared over the last several quarters, this is a segment where we are investing with a long-term view, and we remain confident that these investments will drive meaningful value over time. Before I wrap up, I want to share some highlights from our recent annual Senior Leadership Forum, an event that brings together our top 100 leaders from across the globe to collaborate on longer-term growth strategies. A key area of focus at this year's forum continued to be our One Bright Verizon strategy, focused on extending the value and impact of our offerings at the client and user levels. For our existing clients, we continue to develop initiatives to gain expanded adoption of our broad suite of services. In the first quarter, we drove several examples. Current backup client Phillips 66 expanded their services to include EdSys. Similarly, current college coach client Vertex and current full-service client Aflac both added backup care to their portfolio. These results underscore the value of our increasingly integrated offering, and the strength of our strategy to drive deeper, more enduring partnerships with the employers, families, and learners we serve. So to close, I am proud of the team's execution in Q1 and their continued dedication to delivering outstanding education and care. We remain confident in our long-term strategy and are encouraged by the results we are delivering. We are raising our revenue growth guidance a range of 6.5 to 8.5%, largely reflecting the recent changes in foreign exchange rates, while reaffirming our adjusted EPS in the range of $3.95 to $4.15. With that, I'll turn the call over to Elizabeth, who will dive into the quarterly numbers and share more details around our outlook.