Bright Horizons Family Solutions Inc.

Greetings and welcome to the Bright Horizons Family Solutions second quarter 2025 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, 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, Group Vice President of Finance. Please go ahead.

Thank you, Joe, and welcome to everyone to Bright Verizon's 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, investors.brightverizons.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 a 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, 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.brighthorizons.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 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. we delivered another quarter of strong execution and solid performance, with revenue increasing 9% to $732 million and adjusted EPS growing 22% to $1.07, both ahead of our expectations. These results reflect the depth of our client relationships, the essential nature of our services to the customers we serve, and our continued focus on service delivery across all of our lines of business. In our full-service segment, revenue of $540 million increased 7%, driven by a combination of continued enrollment growth, tuition increases, and new center openings. In particular, we added five new centers this quarter, including two additional centers for an existing multi-service client, the University of Virginia. Openings like this reinforce our leadership in the employer-sponsored care market and underscore the strategic role on-site child care continues to play in workforce strategies. Enrollment in centers open for more than one year increased again this quarter at a low single-digit rate, and average occupancy stepped up to the high 60% range. Across this group of centers, the fastest growth is in centers below 40% occupancy, driven by meaningful improvement in select underperforming centers. Among our top performing centers, where average occupancy remains impressively above 80%, we have seen some centers cycle through peak enrollment levels, which naturally tempers the contribution to enrollment growth from that group, even as the overall operating performance remains strong. In our centers operating between 40 and 70% occupancy, operating performance and enrollment both continue to progress as well. As we move through the second half of the year, when we absorb the enrollment transitions associated with age-outs tied to the school calendar, Our outlook on enrollment growth is relatively consistent with what we experienced in the second quarter. Enrollment is expected to continue to grow at a low single-digit rate, and we remain focused on streamlining the path from inquiry to enrollment, including enhanced technology and more personalized and proactive communication to help families make confident care decisions. In the UK, we saw continued operational and financial momentum in the second quarter. with solid growth in both enrollment and margins. We continue to see the benefits of our efforts over the past two years, investments in staffing, technology, and programming that have meaningfully improved the experience and efficiency across our center footprint. Of note, Bright Horizons in the UK was recently named one of Europe's best employers by Great Place to Work, reflecting our strong culture and overall teacher satisfaction. This recognition underscores the link between our investments in people and culture and the resulting improved performance through the first half of 2025. Turning to backup care, revenue grew 19% to $163 million, reflecting strong client and user engagement. Among other launches in the quarter, we welcomed McKesson, a Fortune 10 employer, to our client base, reinforcing the continued interest by large employers seeking high-quality care solutions to meet today's workforce needs. From a youth perspective, we experienced particularly strong demand for center, camp, and in-home care. We kicked off our seasonally high youth summer period with strong growth in June, which we have seen continue into July. Utilization over the early summer months has been particularly strong among families utilizing care in our owned and network school-age and camp-based programs. The strategic expansion of supply over the past few years, enhancing both geographic reach and programming, has enabled us to deliver high-quality care when and where families need it most. I remain confident in the strong momentum in our backup care business, which continues to be a critical support for working families, a strategic advantage for our employer clients, and a key growth driver for Bright Horizon. Moving to our education advisory segment, revenue grew 8% to $29 million this quarter. Participant and usage growth was solid, particularly in College Coach, where we saw increased demand for advising services. We continue to position Edisys for long-term growth through targeted investments in technology and product development, aligning our offerings with the evolving needs of working learners. We are adding new clients and expanding adoption within our existing base as we build momentum across the business. Before I close, I want to highlight the continued progress we are making on our One Bright Horizon strategy, our effort to expand the reach and value of our offerings by engaging more employees and employers across the full spectrum of Bright Horizon solutions. This quarter, we saw full-service client Centene add backup care to better support their national workforce facing everyday disruptions. At Northwell Health, a backup care client introduced CollegeCoach to extend their dependent care benefits to employees with teenage children navigating the college process. Client expansions like these, coupled with the growth of users across our lines of business, demonstrate the power of our employer-sponsored model and portfolio of services. As we continue to execute against this strategy, we remain confident in our ability to grow our impact and deepen our employee and employer penetration. Before I close, I want to highlight a few insights from our 2025 Modern Family Index, which again underscores the real and recurring stress that working parents face, particularly during the summer months. Nearly two-thirds of parents report that child care gaps during school break directly impact their productivity, well-being, and ability to stay focused at work. Summer remains a particularly difficult time as families navigate the challenge of finding dependable and affordable care. In addition to meeting that elevated summer need through our traditional backup care network of owned and partner suppliers, we also leaned into our unique on-site capabilities with AT&T to run a Stephen Cates Camp at their Dallas headquarters. The program has provided families with a convenient, trusted, and affordable childcare solution right at their workplace. This distinctive offering demonstrates our unique capability to collaborate with a client, leverage our well-developed capabilities for onsite employer-sponsored care, and operationalize an innovative care solution that responds to a client's particular needs. In summary, I am pleased with our solid first half of 2025. Given the year's positive performance and momentum, we have moved up our 2025 full-year guidance to a revenue growth range of 2.9 to 2.92 billion, or 8 to 9%, and adjusted EPS in the range of $4.15 to $4.25 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.