• Total Revenue (Q4 2024): $674 million, a 10% increase.
• Adjusted EBITDA (Q4 2024): $111 million, up 12%.
• Adjusted EPS (Q4 2024): $0.98 per share, a growth of 18%.
• Full-Service Childcare Revenue (Q4 2024): $485 million, an 8% increase.
• Backup Care Revenue (Q4 2024): $157 million, a 15% increase.
• Education Advisory Revenue (Q4 2024): $32 million with a 29% operating margin.
• Operating Income (Backup Care, 2024): $170 million.
• Centers Added (Q4 2024): 7 new centers.
• Centers Closed (Q4 2024): 16 locations.
• Cash from Operations (2024): $337 million.
• Stock Repurchase (Q4 2024): $85 million.
• 2025 Revenue Outlook: $2.85 billion to $2.9 billion.
• 2025 Adjusted EPS Outlook: $3.95 to $4.15 per share.

• Warning! GuruFocus has detected 6 Warning Signs with BFAM.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bright Horizons Family Solutions Inc (NYSE:BFAM) reported a strong performance in Q4 2024, with total revenue increasing by 10% to $674 million.
• The Backup Care segment delivered impressive results, with revenue growth of 15% to $157 million and operating income of $170 million for the year.
• The company achieved the highest operating income in its history, driven by the outstanding performance of the Backup Care segment.
• Enrollment in centers opened for more than one year increased at a low single-digit rate, with the top cohort of centers averaging more than 80% occupancy.
• The UK operations showed significant improvement, narrowing losses and demonstrating a clear path to earnings breakeven performance in 2025.

Negative Points

• The pace of growth in underperforming centers remains below expectations, particularly in urban business districts like D.C., New York City, and Seattle.
• Overall occupancy levels remain in the low 60s, consistent with previous quarters, indicating room for improvement.
• The UK segment, while improving, continues to be a headwind to overall full-service margins.
• The company closed 16 locations in Q4, indicating challenges in maintaining certain centers.
• Enrollment growth opportunity is concentrated in middle and bottom cohorts, which are still underperforming compared to top-performing centers.

Q & A Highlights

Q: Can you break down the 6% to 8% growth guidance for 2025 in terms of pricing, enrollment, and closures? A: Elizabeth Boland, CFO: We expect a price increase in the 4% to 5% range, enrollment growth in the 2.5% to 3.5% range, and a net closure effect of about 0.5%. Additionally, foreign exchange is expected to be a 1.5 percentage point headwind.

Q: How do you expect occupancy rates to trend over the course of 2025? A: Elizabeth Boland, CFO: We anticipate enrollment growth in the 2.5% to 3.5% range, with occupancy rates moving from the low 60s to the mid-60s. Growth is expected to be fairly consistent, with a slight weighting towards the back end of the year.

Q: What are the intensified efforts to improve underperforming centers? A: Stephen Kramer, CEO: We are focusing on refining the prospect family experience, improving the tour experience, and leveraging backup care users to convert them into full-time enrollments. This involves enhancing the personal touch and visibility of our centers' offerings.

Q: How significant is the return to office as a factor in improving occupancy rates? A: Stephen Kramer, CEO: While not the key driver, return to office policies could help improve enrollment in urban business districts like D.C., Manhattan, and Seattle, where we've seen increased inquiries. It's one of several factors contributing to enrollment growth.

Q: What are the expectations for the UK operations in 2025? A: Stephen Kramer, CEO: We aim to reach breakeven in the UK by 2025. Improvements in 2024 were driven by enrollment growth and better staffing efficiency. We expect further gains from increased government support for childcare hours, which should boost enrollment in the latter half of 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.