Bright Horizons Family Solutions Inc.

Greetings. Welcome to the Bright Horizons Family Solutions Second Quarter 2026 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the form of presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Michael Flanagan, Group Vice President, Strategic Finance at Bright Horizons Thank you, Michael. You may begin.

Thanks, Liz, 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 at 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 2025 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 on the IR section of our website at investors.brightrisons.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. And Elizabeth will 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 thank you to everyone joining us this afternoon. I am pleased with our performance in the second quarter and through the first half of 2026. Revenue expanded by 7% to $779 million, with growth across both backup care and full service, and adjusted EPS increased 20% to $1.28, both ahead of our expectations. Backup care again led our growth, while improving operating efficiency drove margin expansion in both segments. These results reinforce the strength and durability of our employer-sponsored model and the value of our differentiated portfolio of care and education solutions. On our first quarter call, we introduced a new investor presentation, highlighting our client-centric business model, our competitive advantages, and the breadth of our long-term growth opportunities. Within backup care, our largest segment by earnings contribution, we outlined three key growth drivers. Deepening penetration within our existing clients, expanding our ecosystem of care and education solutions, and winning new logos. Let me update you on our progress on all three fronts. Starting with deeper penetration, backup care revenue grew 19% to $194 million in the quarter, accelerating from 12% growth in the first quarter. Usage growth was strong across care types and was largely driven by more unique users, as well as an uptick in frequency of use. Key to driving deeper penetration within our clients is the breadth and quality of our care network and our technology platform. We have made significant investments over the past several years to both enhance the booking process and expand access to care solutions. Today, families can confirm care in real time through our instant book capability, and we now see the majority of our network care in backup secured this way. Combined with our broader service network, this creates a seamless on-demand experience that allows us to reliably connect families with trusted care across care types and geographies. Our ability to deliver quality care with this level of ease, reliability, and scale drives deeper engagement and is a true competitive advantage. Turning to the expansion of our ecosystem, employer camps have become a natural extension of how we support clients to address their evolving workforce needs. This summer, we expanded our onsite Stephen Cates Camp for AT&T to its Atlanta campus, building on last year's successful pilot at its Dallas headquarters. We are also operating five camps for a leading multi-site hospital system, one camp serving an energy company in Texas, and a consortium camp serving two large banking employers in North Carolina. These camps demonstrate how we use our unique delivery capabilities and client relationships to develop additional ways to serve the increasing range of needs of employer clients and working parents. Turning to our third backup growth lever, new and ramping clients. Utilization continues to build among recently launched clients. Some additions include a Fortune 500 global consumer company and a Fortune 500 global industrial company. These relationships demonstrate the broad relevance of our care solutions and provide an additional source of growth as they launch and mature. Overall, backup care continues to deliver solid double-digit revenue growth extending an impressive 15 year track record. This is a high margin, capital life business serving a large and under penetrated market. With meaningful runway across each of our three growth avenues, we believe Backup Care is well positioned to remain a durable driver of revenue and earnings growth. Turning to full service, revenue grew 3% to 557 million in line with our expectations. Growth was driven by tuition increases and a favorable impact from foreign exchange, partially offset by continued enrollment headwinds in Australia, and the impact of center closures as we continue to optimize the portfolio. We opened seven centers in the quarter, including five for employer clients here in the US. Three centers were for a leading academic medical center that had self-operated their centers for more than 20 years before making the decision to have bright horizons assume the management of these programs with their ongoing financial support. This illustrates the transition opportunity that continues to exist within employer-sponsored care, especially within healthcare and higher education institutions. A decision by an employer to self-operate is not necessarily permanent. When employers' needs and circumstances change, our market leadership expertise and operating scale make us the partner of choice for leading employers to transition The other two employer-funded client centers opened in the quarter are new worksite locations developed around these employers' specific needs exclusive to their employees and reflective of these clients' HR strategy and desire to meet employee needs. Together, these center openings illustrate the opportunity to grow our employer-sponsored center footprint through transitioning established programs to Bright Horizons Management, and partnering with employers on new centers for their employees. Occupancy averaged in the high 60% range in the quarter, in fact, 70% excluding Australia, up sequentially and reflecting continued recovery across the broader portfolio. Enrollment in centers open for more than one year increased approximately 1%, excluding the impact of enrollment contraction in Australia, which was roughly 100 basis point headwind. The pressure in Australia remained broadly consistent with what we discussed in the first quarter, while the balance of the portfolio continued to progress. Looking ahead, our focus is on building on the enrollment progress we have made, converting more inquiries into enrollments, translating higher occupancy into continued operating leverage, and shaping the portfolio around centers and markets with the strongest long-term demand and strategic value to our clients. As we build on this progress, our commitment to delivering the highest quality care in a safe and nurturing environment remains foundational to everything we do. Over 40 years, we have built rigorous policies, training, and oversight across our centers, and we continue to invest in the people, systems, and practices that support consistent quality service delivery. We also recognize that this work is never finished. and we continually learn, evaluate and strengthen our approach. That discipline and our commitment to transparency and improvement is fundamental to the trust families and employers place in Bright Horizons. In educational advisory, revenue of $28 million was consistent with the prior year as continued growth in College Coach was offset by lower participant engagement in Ed Assist. Demand for College Coaches' advisory services is underpinned by the quality and experience of our college admission and financial aid experts, who provide highly personalized guidance to navigate the complex and high-stakes college landscape. In EdAssist, our focus is on increasing engagement by strengthening the technology platform, expanding the relevance of our solutions, and making it easier for working learners to take advantage of the education benefits available to them. Tying all this together is One Bright Horizons, our growth strategy to extend the reach and value of our service portfolio by engaging more employees and employers across the full spectrum of our solutions. At the employer level, that means building on the trust we have established through one service to expand relationships across our broader portfolio. Just as importantly, it means helping more eligible employees Discover and engage with the range of care and education benefits available to them. By creating a more connected experience across our services, we can support more of their needs while delivering greater value to our employer clients. We again saw the impact of this strategy during this past quarter. The academic medical center behind the three full-service centers we transitioned first started as an Ed Assistant college coach client. Separately, A leading financial services company that has long utilized backup care added college coach to support employees and their families through the college planning process. Examples like these, together with growing employee engagement across our services, demonstrate the power of our employer-sponsored model and our ability to deepen relationships and penetration at both the employer and employee level. In summary, We continue to demonstrate the strength and durability of our employer-sponsored model through the first half of 2026. As we look ahead to the remainder of the year, we are narrowing our full year revenue outlook to a range of $3.085 billion to $3.115 billion and raising adjusted EPS outlook to $5.05 to $5.15 per share. With that, I'll turn the call over to Elizabeth to walk through the quarter in more detail and show more on our outlook.