Oct 29, 2026 earnings call — Updated full-year outlook and Australia impairment
Company revised full-year revenue to approximately $3.07 billion and adjusted EPS to $4.98 to $5.03 per share.
Revenue $0.8B (est $0.8B) · EPS $1.80 (est $1.76) · Next-quarter revenue outlook $0.7B–$0.7B
Key quotes
"In Back-Up Care, revenue grew 13% to $286 million, in line with our expectations and on top of strong growth in the third quarter of each of the last four years."
"In late June, the U.K. childcare regulator published a group-wide notice requiring us to strengthen safeguarding governance and oversight across our U.K. nurseries."
"Following an updated assessment of the market's prospects, we recorded a non-cash impairment this quarter, which Elizabeth will cover."
Analyst Q&A 8
U.S. fall enrollment trend
Q (Ronan Kennedy · Barclays): They asked how U.S. enrollment trended in Q3 and what drove the change. They also asked how Back-Up Care use bank limits will affect Q4 growth and whether that is timing or demand.
A: Management said third-quarter enrollment, excluding Australia, was down about 50 basis points, with most of that coming from the U.S. They said the drop was mainly from fewer new starters while family retention remained good. On Back-Up Care, they said the Q4 effect is primarily timing as repeat users have been using their annual banks ahead of year-end.
"Overall, as mentioned on the call, the enrollment in the third quarter, excluding Australia, was down about 50 basis points." — Elizabeth Boland (CFO)
U.K. enrollment recovery and Back-Up Care use
Q (Alex Lakritz · Goldman Sachs): They asked how quickly U.K. enrollment should recover after the regulator's notice and whether inquiries will lag actual starts. They also asked how Back-Up Care utilization develops at long-tenured clients and trends among mature clients.
A: Management said the U.K. regulator's action is without precedent and it is hard to know exact timing. They said they are working to regain regulator confidence and expect enrollment to recover after the notice is lifted. On Back-Up Care they said penetration remains low and they have seen strong growth even among mature clients, helped by better tools and more awareness over time.
"This is an action that the U.K. regulator took that is without precedent." — Stephen Kramer (CEO)
U.S. center closings next year
Q (Andrew Steinerman · JPMorgan): He asked whether U.S. center closings could return to a typical, lower level in 2027 after a bigger year of closures in the current year.
A: Management said closures are elevated this year and noted about 9% of centers are under 40% occupied, leaving some runway for exits. They expect to be in a net center closing position in the U.S. in 2027 given the centers they have identified.
"We do have an elevated level of closures this year, Andrew." — Elizabeth Boland (CFO)
Back-Up Care surprise and Full Service actions
Q (Jeffrey Meuler · Baird): He asked why the Back-Up Care use-bank effect on Q4 was more pronounced than expected and what specific actions are being taken to rebuild Full Service enrollment.
A: Management said the Q4 impact came from a heavier-than-expected mix of repeat users who exhausted their banks, rather than a large surprise. For Full Service, they described actions to improve the funnel: faster, better tour and follow-up experiences, competitive pricing, getting prospects into centers, and leveraging employer relationships to win and retain families.
"The reality is that as we went through the first nine months of the year, we saw a heavier emphasis on repeat users that ultimately were using and coming up against their full bank." — Stephen Kramer (CEO)
U.S. softness vs U.K. headlines; new users
Q (Joshua Chan · UBS): He asked whether U.S. softness is mainly market-driven and if U.K. safeguarding headlines matter less in the U.S. He also asked whether fewer new Back-Up Care users is a concern for future growth.
A: Management said it is fair that the U.K. situation is more acute and the U.S. is more affected by the broader market, while their client partnerships remain an advantage. They clarified they still see solid new user growth in Back-Up Care and the issue was a change in the mix between new and returning users, not fewer new users overall.
"I think it is fair to say that the circumstances in the U.K. as it relates to the regulator and the challenge that we have with the notice and safeguarding, is certainly more acute." — Stephen Kramer (CEO)
Safeguarding changes and AI in marketing
Q (Toni Kaplan · Morgan Stanley): She asked if Bright Horizons is changing policies to strengthen oversight across centers and whether AI/LLM search is changing how parents find centers and marketing strategy.
A: Management said they are learning from incidents and adding safeguards, including rolling out cameras in U.S. and U.K. centers, partnering with a safeguarding expert, and improving classroom technology controls. They also said they are making centers more discoverable to LLMs with more video content and are focusing on tour availability since agents may book tours.
"We have already started to roll out, the implementation of cameras in Bright Horizons centers here in the U.S. and in the U.K." — Stephen Kramer (CEO)
Tuition pricing and margin guide for 2026
Q (Ryan Griffin · BMO): He asked about tuition price plans for Full Service next year and requested Full Service and ed advisory margin guidance for 2026 and how margins might ramp.
A: Management said pricing decisions are made locally and they expect to be at the lower end of their historical 3% to 4% range on average for tuition. For 2026 they expect Full Service margins to be broadly flat with 2025, up roughly 70 basis points or so ex Australia; Q4 shows a down 75 bps with flat ex Australia, and ed advising Q4 should be similar to last year.
"For 2026, in Full Service, we would be expecting for the full year to be broadly flat with 2025, up roughly 70 basis points or so ex Australia." — Elizabeth Boland (CFO)
Impact of negative headlines and portfolio rationalization
Q (Stephanie Benjamin Moore · Jefferies): She asked whether negative publicity is hurting enrollment or retention and what marketing steps are being taken. She also asked about potential further center rationalization across the portfolio.
A: Management said centers run with employer partners continue to see good enrollment and they are seeing strong family retention; they emphasize continuing high quality and added safeguarding to maintain confidence. On portfolio moves, they said they are right-sizing the footprint, have closed 42 centers through September and expect about 20 more closures this year, and will continue to exit underperformers.
"Have closed 42 through September and still have another, call it somewhere around 20 probably to close through the rest of this year." — Elizabeth Boland (CFO)