BRIGHT HORIZONS FAMILY SOLUTIONS INC. Q1 FY2025 earnings call

• Strong start to 2025 with revenue up 7% to $666 million and adjusted EPS up 51% to $0.77 per share.
• Full-service child care grew 6% to $511 million, added 6 centers in Q1, tuition increases averaged 4%-5%, enrollment in centers open over one year up low single-digit, occupancy mid-60s.
• Backup care revenue up 12%, strong traditional use and early reservations for summer programs, 95% client retention in 2025.
• Education advisory up 8%, growth in participant engagement, new clients added like Tower Health and Tiffany's.
• Focus on One Bright Horizon strategy, cross-selling services among clients (e.g., Philips 66 expanded to EdAssist, Vertex and Aflac added backup care).

Full-service child care: Revenue grew 6% to $511 million, operating margins expanded 210 basis points to 6.5%. Backup care: Revenue increased 12% to $129 million. Education advisory: Revenue grew 8% to $26 million. Full-service child care contributed 76.7% of total revenue ($511M/$666M), backup care 19.4% ($129M/$666M), education advisory 3.9% ($26M/$666M).

• Raised revenue growth guidance to 6.5%-8.5% due to FX changes, reaffirmed adjusted EPS range $3.95-$4.15.
• Full-service expected reported and constant currency revenue growth 5%-7% in 2025.
• Backup care expected reported revenue increase 12%-14%.
• Education advisory expected low to mid single-digit growth.
• Q2 revenue outlook 720 million to 730 million, growth 7.5%-9% on reported basis, adjusted EPS $0.99-$1.04.

• Macro uncertainty causing slower enrollment commitments in some U.S. markets.
• U.K. business still a headwind to overall margins despite progress on enrollment and margin recovery.
• Seasonality and cyclical nature of backup care business, with Q1 being a lower point for margins.

Q: Focusing on the mid-60s utilization for full service in the first quarter, could you just give us a sense of how you think that will go through the year?

A: Elizabeth Boland said Q2 will step up a bit, then taper in the second half, averaging roughly mid-60s for the full year.

Q: You talked about seeing a little bit of a slower velocity in the pace of commitments in some of your markets given macro uncertainty. Can you talk a little bit more about that and whether some of those changes could be structural in nature or if purely cyclical?

A: Stephen Kramer said it's more cyclical, new families in some U.S. markets are pushing out start dates but existing families have good retention.

Q: Saw that the full center margins were roughly 7% in 1Q. Wanted to just ask you what the sustainability around that looks like and what are your segment margin expectations for 2Q?

A: Elizabeth Boland said 6.5% in Q1, expected overall margin improvement of 125 basis points for 2025, Q2 margins expected to be affected by lap of prior year effects.

Q: On backup care. You gave a very strong guidance for the second quarter for backup care. Just wondering, what you saw in terms of Q1 usage that kind of gives you that conviction of that strong growth in the second quarter?

A: Elizabeth Boland said insight into repeat and unique users, summer camp early bookings are solid contributing to conviction.