Bright Horizons Delivers Strong Q4 Earnings, Exceeds Projections for Revenue and Adjusted EPS
Bright Horizons Family Solutions has reported a strong fourth quarter (Q4) earnings performance, exceeding its expectations for revenue and adjusted earnings per share (EPS). The company's backup care segment was the main driver of this growth, with total revenue increasing 10% to $674 million in Q4, while adjusted EBITDA grew 12% to $111 million.
In a call with investors on February 13, Chief Executive Officer Stephen Kramer highlighted the impressive growth of Bright Horizons' backup care segment, which generated $170 million in earnings before interest, taxes, depreciation, and amortization (EBIT). This represents earnings performance in excess of the contribution of the company's entire full-service segment prior to the COVID pandemic.
The company also reported strong enrollment growth in its underperforming centers, with a mid-single-digit increase in the fourth quarter. Kramer expressed optimism about the shift in trends driven by employers' return-to-office policy changes, which has led to an uptick in enrollment inquiries at certain locations.
Full-service child care revenue increased 8% to $485 million in Q4, with the addition of seven new centers during the quarter, including client centers for Ragon Institute and St. Jude's Hospital. For the full year, Bright Horizons opened 26 new centers, with 17 being client-employer operated centers, most of which were new to the company.
The company's international operations also reported strong enrollment growth in Q4, with average occupancy percentage remaining consistent with the prior quarter. Kramer noted that the pace of growth in underperforming centers remains below expectations and that efforts are underway to drive improved results.
In the U.K., Bright Horizons made operational and financial progress in Q4, narrowing losses compared to last year. The company reported strong enrollment growth, improved center staff retention, and lower agency spend across its U.K. portfolio for the full year.
Chief Financial Officer Elizabeth Boland will provide a detailed review of the numbers before opening up the call to investor questions.
