Bright Horizons Family Solutions (BFAM) investor relations material

Executive summary

• Q3 revenue grew 5% to $841.5M and adjusted EBITDA rose 5% to $163.3M; a $290.0M goodwill impairment and $23.4M safeguarding-related liability expense contributed to a $230.7M GAAP net loss.

• Back-Up Care growth was offset by Full Service enrollment softness and Australia’s challenges; the FY 2026 outlook was revised.

Financial highlights

• Q3 gross profit declined 6% to $204.8M, with gross margin of 24.3% versus 27.0%.

• Q3 operating loss was $187.1M versus income of $120.8M; net loss per diluted share was $4.76 versus diluted EPS of $1.37.

• Adjusted operating income rose 5% to $130.2M, adjusted net income was $87.5M versus $90.1M, and adjusted diluted EPS increased 15% to $1.80.

• 9M revenue rose 6% to $2.333B; GAAP net loss was $155.9M versus net income of $171.4M, while adjusted EBITDA increased 7% to $389.4M.

• 9M adjusted net income was $198.5M versus $196.4M; adjusted diluted EPS was $3.84 versus $3.40.

Outlook and guidance

• FY 2026 revenue guidance is ~ $3.07B and adjusted EPS guidance is $4.98–$5.03; forward adjusted EPS has no GAAP reconciliation because certain costs and outcomes cannot be predicted with reasonable certainty.

• Q4 revenue is expected at $730–$740M and adjusted EPS at $1.14–$1.19.

• FY segment outlook: Back-Up Care revenue growth of ~13%; Full Service reported revenue growth of ~2%; Educational Advisory revenue approximately flat with 2025.

• Back-Up Care operating margin outlook remains 28%–30%; Full Service margin is expected broadly flat with 2025, or up ~70 bps excluding Australia.

• Challenging enrollment trends, including below-historical-average Australia enrollment, and center closures exceeding openings are expected to persist.