BFAM - Earnings call transcript Q4 2019 | Bright Horizons Family Solutions Inc.

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Operator

Greetings, and welcome to the Bright Horizons Family Solutions Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I'd like to turn the conference over to your host, Mr. Investor Director, Senior Flanagan, Relations. Michael sir. Please go ahead,

Michael Flanagan

of call the Thanks available the today me Elizabeth administrative Chief turn matters. section on a is Investor after Executive a Hector hello to Boland, recording the at I'll brighthorizons.com. Officer. webcast, and Today's call. Financial to are few under website our and Stephen covering With Officer; everyone over being Stephen and call Chief Kramer, be will Relations

statements made are As this to Safe a any forward-looking business earnings performance, reminder those including financial Harbor our future subject on regarding in participants, call, the release. statement and included to

in Forward-looking that results our may XX-K. statements and uncertainties and financial and to operating involve inherently cause differ actual detail are XXXX risks Form and materially in described

statements as it to update date on speaks and undertake forward-looking statements. the only no which we of any obligation made, is Any forward-looking

reconciled counterparts is also today detailed non-GAAP financial measures, website. our the release, which are which earnings GAAP to and available section of our We their IR under refer in

now Stephen update the and on through review the us business. take will

Stephen Kramer

Thanks Mike.

you joined thrilled call at And have Bright to Welcome. in you creative role the that the of Investor Senior Horizons. are We thanks of all Relations us newly on Director who've of joined today.

financial for detailed a full open your we and our outlook with XXXX the operating year review for up you follow and past our of the this more plans growth questions. I'll will numbers XXXX results it update quarter and for on and then review Elizabeth before then

our segments well across and beyond. solid of to in it up XXXX performance us We're in business very and of the XXXX, our growth pleased drive all continued quarter to sets continue fourth

to $XXX to adjusted revenue quarter, increased million, XX% and the For grew $X.XX. EPS X%

Coast. for two on West Lehigh We past added lease including a and acquisition full this international the University, strategic models service programs quarter, centers seven

Systems, recent Health, launches We our advisory for client also with educational BAE back WBP Wayfair. expand and Group base client continued to and Atrium up

As the shared account capitalizing work broaden the and previously, to relationships. our recent synergy priority services management on We for between pleased company. as have with our our client strategic existing and collaboratively successes we remain sales teams remains a deepen cross-selling

remains more clients of We base services, of including hit past or than third us invest or Nielsen XXX a Volkswagen, this XX% as in quarter. our now who our second adjusted milestone new across continue Halliburton, in client strong company with With and growth, service more a than cross-selling operating significant. launched multiple as employer quarter. topline deliver X,XXX opportunity exists the also our business, to expanded income partners, results operating consistent we solid fourth the X% that Tracking and the

are include have marketing digital years, to have of and utilization. improved Over now, initiatives reserve use, also usage as we of all from the that together and higher known booking, satisfaction, been these discussed conversion illustrate mobile increased few and making instant overall examples the last making registration user back-up investments higher to app of translate as which the progress people. result we a we in few A the technology,

Teacher paid investment expense high-quality early especially out-of-pocket bachelor's and associates This the our Horizons certificate, by to ability people Horizons I'm in front, the Program. education, to a by no the the earn our On teachers pleased childhood degree to provides with Bright completely Degree response benefit for employee.

learner. than more an with enrolled of have three We our now centers quarters

rollout. phases scores rates. significantly along With employee and are in enhanced of These reporting various a engagement of host participants other increased initiatives, examples, with these retention

experience. in will of to and quality We continue enhanced drive leverage, to to continue these growth, efforts client kinds invest operating of

strategic services; one, on Horizons; focus care finally, geographies. workplace impact three, culture two, deliver education connect XXXX, and at our we service cross lines preserve through X strong priorities: highest-quality function, to Bright great and to and strategic a and growth; extend Turning to our continue a

efforts align us have across the momentum these accelerate business. to all we to aspects positive Our and continue allow pillars with team's of our

Let me few growth touch strategic areas. a on

about to expanding of and services cross-sells the growth with and XXXX new and cultivating our three solid beyond. First, optimistic and new focused growth with strategy partnerships be sales After our strong, remains The of in across through pipeline and year all these industries client interest clients categories, in continues existing existing on clients. additional services. current in and I'm our across momentum business lines both really sales each organic another use

We've Next, and settings, our strong of select years. both partners a over and we last the targeted centers opportunities high-quality lease/consortium of centers. our a care the solutions. seven now these of care see demographics, meet population client urban to our through limited of where needs on XXX child back-up service full focused supply opened We've concentrated

centers the to been in and positive the of the progress continue We encouraged the be by to that client into enrollment and levels mature reached by opportunities with from have partners. newer by operating group tap ramping and contribution we've able cohorts the nearby

metro located And density are continue to therefore, we, attractive these in partner an significant see across strategy. increasingly areas, in With value-creation multifaceted to markets. major growing centers our this long-term of we opportunity leading employers

cultivate plan acquisitions our to with a ahead. key expect growth years Finally, the M&A, and continue in to solid regard be prospects, to we pipeline a we acquisition to of element continue of

the know, timing of you acquisitions can be lumpy. As

And XX a XXXX, We on completed of of seven the in smaller year in center networks acquisitions acquisitions with more a to single process, anticipate XX typical activity mix in and approximately centers we based XXXX. centers.

enable opportunities capital time provides time, in the from Family My Strategic offerings. Care educational up our acquisitions, businesses one, advisory like to to allocate XXXX. first diversified highly expanding quarter of additions, us and our like to this addition while also In typical with attractive model continue to returns, back us non-center acquire to center with

comment wrap-up, I to values on our unique Before culture. like I'd strong and

It employees, and and and to in difference a our to lives starts make families retain of lasting many does. a all central mission lot of globe. Bright belonging. our As have spend resources to woven Bright and and the environment a clients, you grow the Horizons' that with history while the are we and of around time know, of inclusion to attract is people company into best, the central of where and equality have the been fabric the Horizons' and always culture fostering want sense an Diversity, learners

leader a and it's the where inclusive the few been and a honor by of the on all build not affirmation creating strong work is as Being recognized a workplace workplaces, way. lists dignity respect it Bloomberg, employees do culture run. in Fortune for to sense our can months, ultimately, Over we thrive meaningful a business Rights in these last to the be an Human a is a a and Campaign feel Forbes, of long great great motivation, and but great and

parents. sixth Another This priorities to illustrates annual that last Index working commitments. Modern released family working the harsh challenges element today's year's to to that burned and the our trying show feel data parents our is and career Family week, facing balance defines working both We commitment family. continued truth Bright Horizons which out, modern a increasingly

to their majority to work-life balance are that walk reveals their commitments manage out achieved, significant door burnout. their if professional data a isn't willing and willing employees to abandon the Our are

stresses by again at their that and family-friendly providing address providing survey the work The underscores home. services at value the import employers more of meaningful once and employees support to

are to partner so who introducing needs proud to choice and employers employers are of excited services new also for solve challenges. We the to the of by looking workforce very be the these address our looking leading of many modern the are prospect to

positive the So, we to we and believe agility in over summary, years. are that continue demonstrated momentum well-positioned have operating we

XXXX, adjusted XX% earnings range operating growth the range of per we to to drive strong with performance For in share continued in anticipate X% leverage $X.XX $X.XX. of to and revenue the

Q&A. be that, can you more With detail, with I'll and numbers the in Elizabeth back during review

Elizabeth Boland

us you, recapping increases, Stephen The Once for again, and center Overall $XX centers. quarter. Thanks up hello Thank driven the growth million revenue in gains joining X% enrollment for X.X% full contributions quarter. the in from headlines million new revenue rate service $XX everybody. was or and or by was from the today.

clients in increased existing XX% XX% revenue, utilization drive services or QX, increased Family in XX.X% helped Advising In Ed by launches operating and the from $XXX to just Strong of growth XX% or $XX and quarter. along of million gross profit million income new and contributions the Care, clients, back-up million in of revenue adjusted My $XX.X revenue. with over to

ramping were losses partially the and centers as model in and centers. offset our mentioned and and As as contributions growth preopening our of gains in our by full new from acquired from the well increases in headwind ramping lease tuition mature centers service new enrollment segment,

incurred respectively, and higher in brought of -- operating both period. losses generated and operations, segments margins XX%, utilization scale levels in total quarter service opening With on Ed XX% which compared XX solid in past to in quarter, back-up we over XXXX, their the in a strong XX XXXX, continued cohort than the delivery. the this prior The on efficiency in Advisory continued and strong larger total approximately

$XX of rates lower slightly revolver average borrowings modestly down QX in XXXX interest and of over expense million Interest was contributed. as average XXXX lower

due X.Xx $XXX in outstanding cost activity. lower our borrowing with level million net a higher to during equity on ended rate We've net XXXX, at than debt-to-EBITDA. all higher -- and benefit term of at swap. revolver an X% primarily came previous The XXXX structural quarter loans adjusted we interest current with tax our of estimate under rate on approximates Our our borrowings income fixed XX%, repaid the tax tax

continue operating generation. cash improved performance With pleased to with our positive very working strong also movements, capital be we and our flow

$XXX cash XXXX, million $XX For XXXX. over up operating million, was flow

after in cash acquisitions as illustrated million XXX,XXX total our first capital under support functions. new And This well acquired to centers our our priorities in Share In that the our new existing terms a XXXX, deploying $XXX reinvested the as XXXX by and the are million repurchases priority continue business. strategy, our share on growth in and net investment and plus is be operations in we that acquisitions. of allocation flow we investments third of and repurchase of shares spent the we business $XX program.

XX%, range Lastly, XX% full we on back-up projecting we're division our including Ed capacity our X% of to the growth in we in centers service to continue the to Advisory project guidance growth to growth to to in the range Stephen for the headlines touched in revenue of XX%. operated Adding and XX% X% earlier, of services XX% that XXX,XXX range topline the X,XXX gains our X%. in topline in with over In XX/XX/XX, the at segment, of range serve topline XXXX to children.

realize X% average side and network. approximately to from across X% operating for our to X% in the mature increases add XXXX, to center to ramping the price the centers the full service On P&L X% to topline we to continue in and expect of range enrollment

We're that the looking XX outlook to service Topline to of centers. add our improved for anticipates openings and delivery close XXXX. approximately in XXX organic and centers, in we performance XXXX will basis improvement approximately points new acquisitions, XX XX our operating to and including efficiency compared growth contribute increased to margin XX and also range to

On on million, some $XX to rates to project we the our full year, for approximate $XX estimates XXXX, the for $XX borrowings to million of amortization interest metrics year of million interest the million of that expense and million. $XX key estimate and $XX $XX to will Based stock million. we range depreciation $XX other compensation million, in outstanding million of $XX

expense projecting we're as XX% exercises option rate XX% higher the increase impact of front, stock increase approximately our XXXX. diminishing in this the rates from tax European primarily the structural XX% This On as year our the in on to to past reflects that tax well will reported effective tax operations.

$XXX average approximate we'll of for flow shares growth business. generate capital, approximately million ongoing cash of from and maintenance estimate flow the are to to $XXX million $XXX invest $XX million We weighted have to in projected overhead cash yielding $XX the year. operations million million of and approximately the of Lastly, that free

million for digits specifically We invest The million do capital, adjusted growth million projection a combination range $X.XX. low early opening XXXX. and new $XX these to to $XXX adjusted of $X.XX have EPS million to all that in our the $XXX in in we lead of centers to to and XXXX of factors expect $XX center net in double to of income

range translates of XXXX, of This to X% to a and X% QX projecting to to EPS of net range $X.XX specifically approximately share. growth $XX in Looking adjusted the $X.XX topline adjusted million to we're in $XX income the million.

Q&A. we go to And so are with ready that, to Hector,

Operator

Instructions] time, this At we'll conducting question-and-answer you. session. Thank [Operator a be

from comes question the Barclays. first proceed Please your with line of Your Manav with Patnaik question.

Ryan Leonard

Hey, on this Ryan is Manav. for

did talk could after commentary margins. the on little ask bit lower, little call. little especially did exactly the there? the timing, the end I year? bit centers I operating a you bit the Or of help just came about It did last more about you out just a guess, what maybe a more if in could -- moving open Just flush were pieces the towards you

Elizabeth Boland

opened the having how we some in business, back-up of just looking they timing-wise mentioned, primary year that's this that the that QX a That's of factor, primarily the the just it's primarily Ed utilization we at centers think variability Advising see losses last I that came a against and what driver. Yes, I higher the and weighting of and smaller centers but year. lease/consortium probably usual experienced in effect

little bit higher a in expense well. equity overhead as We have

can the margin. just a little a headwind overhead see rates centers. the of so ticked lease/consortium that's I it's I a think think on the bit that also and bit you primarily, up, But

Ryan Leonard

the Got then centers front, And even are it. like there's within though opportunities as there Do go maybe on back-up some outside forward, center themselves. side on much more build now, Thanks. years opportunities of core of of you offering? are there kind the M&A that kind five the base, Ed it of some sounds out think as still M&A we look and out Advisory you to more from the opportunity

Stephen Kramer

We do, Ryan.

service as areas continuing as very and the we the center in good deepen the to certainly, as But side to core interest business. on the across as extensions the think back-up client have. open-minded to we landscape, and think of see I continue to continue grow I that of that Ed of Advisory, look base continue it be around well the that capabilities and opportunity we competencies our to as the relates clients we

build really optimistic continue acquisition you'll we're to I going see like. So, combination out, across that think be the about what it's looks us to that three the but landscape

Ryan Leonard

Thank you. it. Got

Elizabeth Boland

Ryan. Thanks

Operator

Andrew Please question next of line proceed Steinerman Your comes with question. your the from JPMorgan. with

Andrew Steinerman

I'd about where two a the That within Advisory. other down Hi little Elizabeth, the than quarter were to more talk was segments. margin margins Ed bit segment fourth more like the

like do more Ed the were a it in margins year? I could do think just were Advisory in moment you will a you Advisory quarter? how to why fourth ago. you the Ed just making But reference over down the current go in And margins feel

Elizabeth Boland

Yes.

So, of a couple factors in there.

that -- the and need think Strategies have GP contracts profile. margin some -- have we integrate are I up we our -- the from to that revenue to we additional from the ramp

just making timing I it mix of investments attributable is and of of sort the headwind in. some And business resources. there just the coming we're is marketing So, that rest there sales, think as really to grows the of and technology some

the changing to So, profile looks longer nothing be that term.

margins sustained good in and how being really XX% to long-term about operating full to about, for XX% feel we've growth As performed year. to range, able the talked in Advising's XX% We the range. Ed we topline the XX% be

so And how really just that noise as is we it. the look quarter-to-quarter at

Andrew Steinerman

bit of basis little A you to the to out? question Ed how in will XXX laid second XXXX? feel the to was Are margins XX -- do part helpful point like you they do overall that Advisory be goal going Right.

Elizabeth Boland

that it think to alluding thought that that was with Yes, continue can to I perform. I how we

expect those continue in do business. driving leverage XX% as -- the contracts range this the to integration XX% Strategies margins, XX% particularly, margin contribute just Group rate will growth as that's some to GP we scale a operating it complete at of the operating and with to year So, between the and somewhere and XX% we

we it do as contributor. a yes, see So,

Andrew Steinerman

Perfect. Thank you.

Elizabeth Boland

You're welcome.

Stephen Kramer

Andrew. Thanks

Operator

comes the question. question your next line with Mazari Your Please of from Hamzah Jefferies. proceed with

Mario Cortellacci

this for Cortellacci filling in Mario Hi, is Hamzah.

maybe time? on compare Just in it wondering And the U.S. also to you well? you over how your if is think trended comment then U.K. can for child what in employer-sponsored looks rate And can penetration that's as or it how care you that the

Stephen Kramer

Sure.

ones creating is really not first, base that market large installed child earliest would So, of over a So, care, what right? years around like we've centers been I standpoint that XX observe exist We there's estimate we care that we developed. employers, days, the ago, employers. it's that that a -- centers are between our somewhere from from child really, employer-sponsored missionary with aside have X,XXX associated X,XXX that from don't operate there's with associated and

employers We centers. in by the going site they growth an near-site But where could on-site driven X,XXX again, are has new about it, care that be and child one child is valuing near-site as one that being to a employer on-site the from really of invest most certainly greater is capable market ultimately incrementally call in think deciding that and of care. with employees or marketplace than, benefiting the

think those U.K., is about market U.K., a the have that we five-year-old driving as individuals In supports that especially the citizens, the we government When the it employer-sponsored subsidy. to are the to care. three relates U.S. with it versus U.S. children primarily

in so believe that. in is need the child supporting role and therefore, that employers they care, to that And some play a way, government don't

U.K., with employer. third-party in here is on we the well. that On But form contracts hand, where the again, case have large quite market. both can market we as as and it's some We employer since just the see U.S. the markets or in that the employer-driven of in be other that that direct potential the government long-term support in like in don't form, are do focused of

Mario Cortellacci

just it more I'll over. then turn And Great. and one

And the what competitive your what versus an the on us a just of backdrop sense your network? is you looks business. back-up given question centers, advantage Could size your give of us other there? like give of maybe a Just idea just

Stephen Kramer

to. Happy Sure.

are within the by back-up and over we care look, the market advantage in the both in we the a countries operate here United also provider. is States, far true significant So, back-up largest that leader U.K. next

here But north largest million The about significant market our the if U.S., in next one think million small we $XX over competitors. being the that business is have sort $XX there million, share and between our competitive advantage of are again, you landscape being of and next few a largest. as $XXX a

the a What of as Horizons behalf employer on to a we market look and with I continuing see care outpace of over out in our that lot would is into care. time, that that we the advantage clients we say significant ourselves place controlled owned fact Bright

that therefore partnership so And Bright care only with through a is available Horizons.

so the to through us of advantage. quality our pretty network, in centers given And continue the a it allows our care sustain to really own and significant

Mario Cortellacci

you. Thank Great.

Elizabeth Boland

Welcome.

Operator

Your next Bisbee question America. comes with your of from of Bank the question. with Gary line proceed Please

Gary Bisbee

hi Good Hey, afternoon. everyone.

Elizabeth Boland

Hello.

Gary Bisbee

question, some that? past given year-end? at us First you've the that the for revenue base in lease/consortium occasionally or or metric. rate of the big give guess, How us can you number a run revenue Is I schools the is

Elizabeth Boland

Let up, me pull just up. don't pull here, rate me just the but let Gary. that have it I

Gary Bisbee

And bigger picture in strategy, general. lease/consortium the just I guess, a on

several give that how strategy sort to are an doing that is of across that you've classes update in total? balanced in us Now just got think to developing and you mature mature Can more it on new. camp I the

your of to you. just And I'm deck. Any you that trying sometimes think economic of this that and that continuing is about sort thank mean, is what growth business? impact model? in it thinking gross your I better, will, of profit broadly about to growing sort segment revenue investor what's worse? What's notional lessons? the of model, if prioritize to have really, you around And playing long-term out

Elizabeth Boland

about maybe in years are I classes the to XX me let are as that can how think this in that those performance the hitting Stephen would we if and the number XX broader at financial we're how have they to strategy, that I XXXX, of will, and they're beyond in are show But we say, off just centric. and thinking curve it if maybe look Gary, strategy you've of earliest element. mature. the pleased Starting that investor that Yes. we performing, lead deck. speak urban the returns centers -- And now, a got bell of a and you we you

a gross revenue to million in But have in that not because take higher tuitions terms in as that a even classes longer average on up there. in range, located have are range where range is group are, them slower some fact, every center the earliest to $X.X to that XX% they profile that margin those of a get ramping will are much in slope of do command. in that of of of say they the can XX%, we and and Some view a because

and that focused dedicated the So, with round, we it's of continue well, feeling we're to both we're of geographies the the right and I like high-quality to working is strategy, the a establishing operations in kinds think to deploy in footprint are both team well-recognized, centers, this.

kind So, are we have opening. division centers on that's this different speed a each of a not It's up about the with focused new center. that operator dedicated what's to getting

some say And generate a we've a difference XX these remarked on of -- amount loss. prepared I'd do of but we we true we preopening got -- locations, we'll result of right these the that have the operational attention about it. -- they it's that it ways think the substantial in be the centers one like that that, comments, of in But of see. might side as

of the Some that they rents than centers and typical loss have a because a come prototype higher preopening in. ramp-in

this the quarter. So, of strategy? at effect than Stephen, bigger And fourth slightly hence, the today we stages the bigger there's a But of million would that that drag, envisioned early from that this a comment of may be a an in drag couple have strategy.

Stephen Kramer

Yes.

towards about more families in staying looking the live support was, original we work what which can individuals we shift locate it's in and the line to has strategy, very urban good and and there think areas. really where and I young in we're been of families they a is feel thesis much working the areas So, where as with

urban We United playing likewise, here in staying both migration into moving or as and the really urban employers strategy well well, of a The And as Netherlands. like back U.K. feel out States is either the areas. in the

I say an that as also, increasing a operational both is have there network and some alluded really I would effects, delivery density, What to the in But positive employees been our client from with our nearby remarks, additional finding workplaces positive. has that a nearby and real live, the that partners are idea prepared are the where they their centers standpoint. been their

I think is that have So, working families really the the the overall, unfolding the and the strategy And again, both way believe characteristics we financial to very and we value employers. would hoped us. we're have positive certainly, been for adding

Elizabeth Boland

Yes.

of so, centers. to range answer composition as in what's of the $XXX question total. cohort. and to closer overall sort of the if the XX% to they about positive XXX the full-service million these are we they're overall But in look of at in the centers, or revenue range range for XX%, XX% And Gary, It's so just these margins

Gary Bisbee

deliver Is from the a like business? this more design by that capacity you faster? Or the to of the non-lease/consortium majority you to it that. is Great. units like helpful you and of service that That's And years back-up one last need this been would acquisitions. Is and the couple there as center sizable -- sort a guess, I growth just are the I ago, couple appreciate has full a of the in outside business. of of update. on grow on model

to last lot years, what's the that's just what's the few latter, the grown priority in Thank a the at high gating better -- growth hasn't moment. delivering that in a the if fact, you. like outside of If, factor lease/consortium? And

Stephen Kramer

had centers. creating I each we And year. of on-site good on invest to to child centers still near-site really ability very focused actually in our mean, we've I employers Yes, consistency are employer-sponsored think care convince and some

I add think really positive leg the bit important the value. they our strategic in both see the for lease/consortium really fact as terms that the outlook, positive that we of growth. believe stool of the of additional an care, We capacity in continue on as alongside are economics enrollment a really to that on driver really their do view in based the back-up and a So, a centers, they element quite

And is as has alluded, the side. consistent acquisition you the that then, been less piece

very always we're clear are out we so there. that And headed

are We an of acquirer choice.

And the directly the to that given history, of lot I year. of With acquisition past would number the sites typical than say look at a centers so we terms a if is have the we number is year. tied year of fewer in in this of what lumpiness being a

align for we and care in hand, of GP we to see deals tuition form other good look back-up targets in acquisition the in really out, strategic care us. some continue non-center the that On deal the U.S. as business then U.K. the had Strategies, But high-quality opportunities in we with management child to here centers are good

Elizabeth Boland

of And are in year. new XX center maybe at little non-lease/consortium lease/consortium bit -- given if factors any look other lease/consortium, year-to-year, one we and just comment adding around follow-on client of year acquisitions, in client sort noise we adds we've the centers. the and on And three centers of there's a Yes. centers but

is a of think it sources quantitative two half So, on coming from point put more and -- the half to and so I that. those about just

Gary Bisbee

tuition historically the of that's And past? seen obviously Okay. including is program Thanks labor to excess done All reimbursement in update I'll last right. Yes, I commented good. inflation, you if one, any that is one the on, cost then which can, sneak on broader you've with as that still in a on up you as comfortably able economy pass price overall? picked lot. are that And and we've

Elizabeth Boland

Yes.

Stephen Kramer

Yes.

a that relative increases. I are term, I right? comfortable would is of appreciative say tuition families So, So is that think what never

is, able those that a have we are sure understanding our hand, elements seen what say and moving our wage other tuition years, the is like much greater On benefits, teachers there than staff, it of provide current increases between are has to that What other at a history to rate which climate, make that that and the and wage the and long a I historically et margin for that there find is over educators top we've it's to is being pass in expense programs. of like retain challenging along we been inflation. even cetera, would that many increases

the On of being other choice. an energy a and on of hand, we our lot focus time employer

individuals. we And the of to see our share do so ROI investment. get related we that really your offering about Directly program that positive a Again, those tuition disproportionate on question feel we that employees. we're really

yes, expense. an So, incremental that's

other create like that retention is On overall it positive. that the believe And that other that net-net, friction certainly think to things adding allow is in investment we our reduce expenses therefore, hand, to some model. we us

Gary Bisbee

the all Appreciate Thanks. color.

Stephen Kramer

thank Yes, you.

Operator

comes from with Please question. the Sachs. George of proceed Your question Tong your line with next Goldman

Blake Johnson

This good afternoon. is Hi, George. for Blake on

that mentioned multiple driving use pace base an uptick Can services. cross-selling? the be anything of changed sales You XX% side the you what's productivity? Have driving you in your that of client structurally discuss on sales currently might approximately

Stephen Kramer

Yes.

So, we have thank you, -- Blake.

really a are have that that certainly, to say few focus cross-selling things been optimize. So, real last efforts our And we over I have there the few started what is a would years.

we management relationships clients. bringing family. new on client a few team had first on account the our is and years that sales on we the to individuals team really And The then logos is upselling managing focused historically, ago, that, were who had before an focused cross-selling who and were

extending Today, base. the client we but is team sales also after both new logos, in our such opportunities have going restructured through existing that that

partnership real incentive the I have we're our management positive the say exists with changed looking I'd that is drive shared. piece systems team. a as sales align absolutely second between team And that just that so of of our the structure our account to to we now there's behavior and

I that third to understand the piece clients. what most sure our sophisticated much that base additional we to the think figure within investment present to likely our buy And about account stratifying we're then more is opportunities account make is to getting those base and then for and out prospects trying beginning likely services who our

and our we're seeing success overall, good to positive really place. think cross-selling I again, a So, front that on bringing efforts

Blake Johnson

the seeing pace like any of growth was that healthy headwinds It new But That's helpful. this in slow enrollments more. looks XXXX? are One Great. potential enrollment could pretty quarter. you

Elizabeth Boland

with It is In think a of are four I occurs they and are centers. our trends out cycle that age children through newer progress as enrollment able the mature our stability being of general, bit to that base we've pleased years in eke then the heartening. the every a ramping three, enrollment in both little system. been --

And up parents and a at spaces many we our really center being us children of we're very having so as as that it's as making client and are backfilling matter can. of possible through age partners reaching quickly as mindful the sure

and successful some strong nuts the questions fundamental been we economy just look quite of enrollment we We've even But ability times really manage that. some in it's because if got past our contraction when have clouds to with about severe recession. we've horizon. what on some operations, of -- obviously the economically and are certainly, bolts in affecting a had that through a very cost more we're that we that's in nothing challenged in times, see -- in So, time back

really backfilling the through. on top funnel, to front top we And potential you centers -- they when of the of are prospects children on situations feel the the will, can visibility general, to it's getting We've pretty forward children visibility graduating when and good in adapt in -- if parents et out, of as the are well. a of in matter got staying like So, cetera. on we age most for

Blake Johnson

Great. That's you. helpful. Thank

Operator

Instructions] [Operator

Toni with question Morgan next Kaplan from Stanley. Please your line Your comes the of proceed with question.

Toni Kaplan

Thank you.

But on you're investments focused aspect? at call excited really the Or labor on well. that you're technology year? the looking you making. still are as Are that the other maybe touched this there are especially you're ones on areas You like that specific about earlier there

on specific color investments some any would helpful. be the of Just

Stephen Kramer

Happy Sure. to.

mentioned had the and certainly, So, reverse the look, I say is investments, marketing digital X people. in earlier are would in order. technology, in what the call that I And of areas

really certainly important On side, a in I would benefit and continue Program. see investment what Degree good really the around consider Teacher be uptick a people results from we our to to ultimately

continue ensuring the importance continue there from is retention that, an to to highest-quality that think workforce. trying but highest-qualified as to through of what deliver engagement to well we're accomplish I see out as and both we So, that play perspective, continues we services ultimately, a the employee the and

on. continue and we've we to been journey, side, marketing really the digital and with be technology journey a the pleased that On on been I've

our On the the we a to harness doing market-leading power and our to proud the make user We're we of together to to continue other technology bring all of invest so lot apps and and the of seamless. more end continue front, technology be mobile services. experience for our also for clients

liaisons allowing of and how services to they all example, bring trying make for services even sticky place our single example together of reports all can across umbrella. our the more an single is under a we're where see So, client our of

I again, with side, positive we example, side back-up attention, to our the associated really And we the point growth that. for personalized outcomes the see on rate began On that your to marketing business. I'll XXXX, of some think, enjoyed

and learn to more about more background and We are continue their to end continue about more ensure to doing to outreach and we that personalized we them users, our use we to stimulate learn what use. behaviors

And so both registration as we've well a and really outreach digital pay a perspective personalized from starting from fruit. are reuse we're efforts reservation finding those as -- ultimately, perspective, to that

Toni Kaplan

conducive us feel on great. an just model? the the can And That's you side, you geographies in? there that you most geographies international really would on in, other give you're which are like that And to the any opportunity update be have that

Stephen Kramer

Absolutely.

a case, the there's or The party as in in example, is look we back, the is step form form some or Netherlands employers, that the thereof. U.K. where really in U.S. support, a take where to for of third markets of here just like in combination a like So, government whether place for there the be

there which opportunity we U.S., are is to U.K. so And the in most and continue Netherlands, the believe, places The here the footprint. significant have we tremendous three the

to a look we make In broadly, did more an Germany. investment company we that, as in in addition

days. as interest is -- employer There so is there at about clearly amount early as that we support support. that market. in, learning and we're But market organization that that are it's tremendous believe same a we in And involved is well. the still time, is And government exhibited there the through

continuing as third-party we're for would markets, other in potential always opportunities further support. to that we that look market-entry into acquisition opportunities look out I say, have and and markets

think you are support or about both. about So, or markets these you Australia, like where places there like or Singapore, think places France is government employer either

so the And have continue ear to ground. we to our

looking We local can continue know that within globally, we are for believe acquirer and that partner providers like-minded, then and grow those the an market with are choice to of that high-quality always we markets.

Toni Kaplan

you. Thank

Elizabeth Boland

Toni. Thanks

Operator

comes Your Jeff next Please proceed line question Meuler with question. of from the your with Baird.

Jeff Meuler

thank Yes, you and good afternoon.

on center -- figure of looks the if opening investment Just are open? how you many of the year to total XXXX on year? planning typical First, that in lease/consortium trying more you're planning lease/consortium in XXXX, or the count roughly a to centers regard more terms like out in centers

think And the employer pitching you're up then sponsor lease/consortium, contributing when signing are capital. exactly they're talking they related density, not or since the importance you're Because what to signing I that, an up about of for?

signing they what for? So, are up just

Elizabeth Boland

Yes.

on first, So, and of it. can I'll side the give the Stephen the numbers Jeff, comment client you on then

of in same we've XX in similar maybe. to year, the is development So, got range XX, what to this

XX So, year. this we opened

investment. see So, roughly, of the expect same kind would to

Stephen Kramer

in terms the involvement of employee these Yes. And centers. within

three multiple in X ways by odd actually they our are large, So the or case there employer partners of ways. of is capital. and investing where the But X are investing

their are as area, know, therefore, First, employees they're in for they waitlists. what access. priority the are many centers, providing priority in you investing employee running to to especially urban because, their is provide of looking greater And through access our populations access for

of that ability They these their a centers strategy. employee. for then, the tuition course, important element are And also care our they to lowering an of behind invest of cost that the space have so essentially subsidy, back-up provide of can access and

And centers. so of support those into we form in back-up employer the care being also placed that's see

Jeff Meuler

Okay. something XXXX, the to mid-teens, has If I care you But really growth XX% XX% in And back-up period, XX% think been context just you're in like in business. and organic for then more I or that. just multiyear a the like look XXXX. more XX% the generally of good, growth to -- on guiding had over

outsized I guess season this So, it the doesn't Just is strong the just compare growth trying as in to is some a in was related just to end selling there And/or XXXX couple of good, What Or XXXX? drove multiyear for of and question. really why But driven a on questions get it that. therefore, XXXX? basis, to pushback partners? bigger to up outsized, at repeat in are like Thanks. you employer recognized XXXX. expense you've starting utilization, really your the this

Stephen Kramer

Yes.

that back-up through use that So, in of of efforts we very will many and say, see and driving about that a expect lot say a to year productive is positive combination the strategies. personalized of we've through to in outreach continue also very XXXX, care And been you momentum. I was, employer digital new talking would we our what had ways, we as a clients sales

against, comping that Of comps more had course, have right, the past. in now we're the are what significant than we

that care, either Jeff, But day, relates support And as of encouraging to the a do some employers effect of describing. the the dampening as new see back-up you're taking benefit. of the it becomes so really into really at to we new investments making employees think their that really I form of the on end benefit it utilize in continued and/or

Jeff Meuler

Got you it. everyone. Thank

Stephen Kramer

Thank you.

Elizabeth Boland

Thank you.

Operator

your Manav question is proceed Please next follow-up Patnaik Your a Barclays. from with with question.

Ryan Leonard

for This Ryan Yes. on is Manav.

about the curious, you more procedures curious to that have deal I not how like with but parents Europe, to of you just think guess, around the operating much Just I'm in but something coronavirus, the have when broadly? you sure if flu centers, season, than way react? particularly impacts hear the maybe different it's kind

Stephen Kramer

Yes.

policies health again, the procedures overall I and we our they underpins and because select that think what from us. So, experience they have Bright delivery Horizons standards choice of reasons is and of in of quality sort think the one it expect the ultimate place. the why of that And part make. of families and I that And safety

that center. the and a out of in say to that flu potential coronavirus and So, I other would come similar illnesses

season. each it of ahead well get we think I

we that everyone have keep keep procedures policies, centers. making within so and tremendous our around we well safe everyone sure And

much front Again, particular, our families coronavirus, in of as in as well with very the communication were with teachers. we

very an in staff of felt to within centers, keep was and as both example that. so -- our well I families the just And this our confident as think well ability our people our

Stephen Kramer

Excellent. you care. Take evening. All to look for you this us and We the it, very road. joining all seeing much thank forward on we right. Well, all out appreciate

Elizabeth Boland

care Take you. Thank everyone.

Operator

This concludes conference. today's

may at for this your time. you participation. Thank disconnect You your lines

Bright Horizons Family Solutions (BFAM) 14 Feb 202019 Q4 Earnings call transcript