Bright Horizons Family Solutions (BFAM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 7% year-over-year to $712.2 million, driven by strong back-up care and tuition rate increases in full service center-based child care.

• Adjusted EBITDA rose 4% to $96 million, with adjusted net income essentially flat at $44.6 million.

• Net income declined 10% to $34.1 million, reflecting higher operating, tax, and interest expenses.

• The business model emphasizes employer partnerships, a unified go-to-market strategy, and integrated service offerings for long-term growth.

• Operating environment remains challenged by increased costs, tight labor markets, and enrollment declines in Australia.

Financial highlights

• Revenue: $712.2 million, up 7% year-over-year; gross profit: $163.5 million (23% margin).

• Adjusted Operating Income rose 4% to $65 million (9.1% of revenue); Adjusted EBITDA margin was 13.4%.

• Adjusted EPS increased 6% to $0.82, slightly above guidance; diluted EPS was $0.62, down from $0.66.

• Free cash flow was $88 million in Q1 and $276 million over the last 12 months, with a 106% conversion rate to Adjusted Net Income.

• Net cash from operations was $107.7 million, up from $86.2 million year-over-year.

Outlook and guidance

• 2026 full-year revenue guidance reaffirmed at $3.075–$3.125 billion; Adjusted EPS guidance at $4.90–$5.10.

• Q2 2026 outlook: total revenue growth of 5.25%–6.5%, Adjusted EPS of $1.17–$1.22.

• Back-Up Care revenue growth guidance raised to 12%–14% for the year, reflecting strong user momentum.

• Management expects continued revenue growth, with ongoing investments in technology and network supply for back-up care.

• Additional underperforming center closures anticipated over the next 12 months.