BFAM - Earnings call transcript Q1 2021 | Bright Horizons Family Solutions Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Bright Horizons Family Solutions First Quarter 2021 Earnings Release Conference Call. Please note today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Flanagan, Senior Director of Investor Relations. Please go ahead, sir.

Michael Flanagan

to the hello and Holly, everyone call. on Thanks, CEO, and our me here Elizabeth Kramer; our is With CFO, Stephen Boland. I'll Stephen turn after to covering a the few administrative call over matters. available webcast website, our recording is section brighthorizons.com. and call Investor Relations being will Today's be under the of a

those our the subject reminder including in impact statement release. on operations, participants, are of the this to and safe included business a forward-looking statements COVID-XX future As on financial to harbor made earnings any call, regarding performance, including our

Forward-looking materially which uncertainties statement made, and operating forward-looking no other statements it is our that may obligation and financial and involve risks forward-looking on statements. Any inherently and described speaks in cause only results and detail XX-K undertake any filings. actual to we update in as Form differ of XXXX SEC to date are the

measures, IR today to under release, the refer the non-GAAP update their to us now on our through the counterparts business. take also which in GAAP reconciled review We are earnings and section Stephen website. our financial detailed will and available of is which

Stephen Kramer

Thanks, your the tonight us evening. keeping detailed our update Elizabeth continuing hope on for follow pleased the I'm our of review business. and you the Mike. more and and healthy before our on pace that are numbers the operations. open solid a recovery your year first with of start provide this current a and results up families questions. our with start with we recap safe. it I quarter will for you I'll in to Hello and to thank everyone joining call, of an

acquired Netherlands our of share. the Regeneron, Memorial Horizon organic revenue added as we million Sloan and of quarter, in including as centers and Kettering Therapeutics, new the In adjusted first for $X.XX West EPS segment, on $XXX Coast. University and center the Maryland centers two centers, seven the of well we client delivered per full-service an For

also in the center in good quarter. enrollments we trends saw continuing made QX the progress first with We re-ramping through positive enrollment

Our recovery centers bases addition launches in in Shopify. X% levels to six Dollar the families the U.S., roughly XXXX. centers. their client In the to tracking added and We which month-over-month new return open General the backup with new in the Mac Tree, XXX midpoint I client expectations breadth our reopened ended are Motors, the centers first to quarter, approach delivering the year, and centers, of we Ed Advisory the in Freddie by and quarter. ConocoPhillips, Overall, pace X,XXX as improve of segments XX%, revenue recent services, for expanded of in to trajectory remain our nicely encouraged continued centers respectively, closed quarter growth quarter open. the consistent the Occupancy our with and of we of as temporarily and in

contributed to Importantly, vaccine concentrated coupled occupancy which solid COVID of a recovery restrictions regions. quarter. coverage pace in the several up later the made rates increasing of and relaxation also have our heavily infection Reducing to reopen, this with markets, were ground of expanding and all more

serve restrictions. In In in couple U.K. recurring centers addition our quarters. which U.K., the and of Netherlands most in the positive very through encouraged the continued the had several last have and enrollment COVID reclosure by for U.S., of the place lockdowns to the I'm trends to did as of pause first over in was that operations, result growth seen and strength the children temporary the of as in a well the quarter families we lockdown national

so enrollment strong steady are time, we remained government At of from into performance in am a welcoming Netherlands Family, and support return in the and a these reopened, I children's of make child to disrupted enrollment safely solid seeing operations and stability previously going to strides the new worlds. day-after-day continue measure our care. of again same in teams enrolling quarter. Horizons they has for long-standing economy our thousands providing Bright great enrichment growth as enrolled proud the of and a children the with combination into However, second

that reopened, strategically needs. For clients have supporting ensuring our and employee centers the continues our reopening not we closely team client relations work both are plans, on employer with yet to that

fall While many recently offices, from before recognizing clients their remains on-site months, subset in lines and needs a looking have we but the seen to reopening their will critical environment they play their reopen and are care clients of time child summer the to fully of attracting pull the dynamic, their fall to back a their employees, spring employees center not only office. the how the also role forward

not makers, more in-home positioned offerings strategy remain With employers and critical we and conveyed breadth our in of the that scale, uniquely of recognize critical overwhelmingly levels employers We which child employers solutions care if relationships types potentially in to the be and dialogue all the provide their to also business solutions with range as that remain close clearly can have at to of of their with post-pandemic. reality choice the a discussions will partner in-center their clients avenues highest additional long-term employees. In these about employees. can key be decision that short, support

where care. a it especially February, per use at net in-person fee of full is returning margin temporarily growth the the month shifted of self-sourced will care. higher a the We which recognized alongside turn basis care the first long-term Traditional launches, reimbursed backup we mix delays Let opportunity. although and delivers to of in our learning reduced expected, lower better on to in-center use and self revenue traditional had in-home ongoing use, position self-sourced in growth strengthens now from to than quarter during another me rebound, revenue pre-pandemic schools sourced We of trail strong further quarter client we still Since fuel continue care saw market performance. to levels new levels.

by we encouraged end and April. QX use trends through the really of are the and seen registration into continuing have We

return and more to to patchwork in traditional increasingly towards as half the needs. care of beyond As parents pandemic schedules, arrangements the solution supports complete that a transition approach progress continue work their of and expect to we to their from pre-COVID we to use care levels more the year conventional second provide school care

most school another clients in way use reimbursed result prior unique we they new partner families Kate's hybrid acquisition work-life I full discussed type, for calls, solutions created means Family, since the been evolving pandemic challenges, and school-age employees working In need use over to unprecedented we learning. XXXX, Camp, backup clients expands in ours this up the families to their of the with for but most A popular go with this use age support school fall, our Last great service provides innovative Steve been of towards a year & for experiential ago, virtual virtual their at care for looking school-age school across made need. of and months. also changing being self-sourced a ways, tutoring, families, type. added offering on As And services the for further families made for programs array have the to reach. presented the we many as tutoring the Horizons country broaden Parents' opportunities and service Bright vacation particularly their serve remote us which as has our and schedules. it strategy, and concert stood children enhances summer camps need. we addition able expanding across a enhance the This banks stabilize progress to extension of quarter along employees children of use which recently, can has demands to a academic this point juggling our an cases, needs stages. life meeting through and

ways to demands We will to families additional create of the and their look continue value evolving to employers. serve for

to to to which to activity well navigating Assist are with college new XX% Coach business, of launched clients. cycle. our upended advising number parents College and continues of Two the Turning turn to continue another new areas. I growth revenue I segment in and Education believe this positioned our these growth a education Elizabeth. delivered before and elevated Ed see solutions solid potential and it again, performed admission over excited on about items long-term be capitalize last well growth advisory workforce

Magazine XXth year, I XXX this work share even the affirmation and has a honor and challenge is inclusive do we recognition a culture Horizons Best a always great to my to recent time. Fortune received. more to special. work that that again First, This proud it build workplace. Horizons But Bright during want been strong excitement recognition Company of of very I the about a named once for for, was a Bright am

the the critical our future. clearly American Biden early recent spotlighted Families under economy from importance child our care society, illustrate, the as and to Secondly, our of and the Plan proposals collective has the education outlined pandemic administration

the predominantly access and the families. of able funding not the has been families and support a and Horizons for care and who are on potential help low country While Bright Plan historically and the still the focuses high-quality areas details is Families high very believes children various American government focus limited, for to proposals great many need have to this middle-income education.

to our of employer proposals these investments substantial employers have to partners families of to make high-quality education importance and parents. retain working will underscore serve, have working who early and we as choice and pillars the key continue the For one attract value of subsidize the

in the encouraged business solid delivered So We the trajectory by making all in recovering and disruption pandemic. of closing, quarter huge the good are results by strides from we segments. caused in the remain first

employer-sponsored adviser are will and than role Our before. growth to on solutions poised and afford continue And us we growth our the about from deeper who ever partner client excited confident unique as expanding the relationships for more are broader strategic a and as opportunities. can remain execute I trusted lies emerging what and organization remain stronger services. for in Elizabeth? market a ahead pandemic

Elizabeth Boland

you, Thanks and on the everybody Appreciate joining hello to Thank that for today. us call. Stephen.

the results some on thoughts again recap me quarter Let XXXX. the provide of rest and

XX% with the centers revenue the of March million totaled Adjusted adjusted permanently with X% quarter, million XXX ended open quarter or $XXX We and out or in For income to centers contracted six was added overall revenue. of closed. centers of EBITDA $XX new XX% seven and first X,XXX million. $XX operating revenue,

are We revenue related U.K. closed, $XXX contracted XX%. center also have centers comparing Full including to XX%, contraction or QX favorably in lockdowns our XX% in short-term expected that million to the reclosures of the temporarily service XXX the with

in the to mentioned, ahead stability on well revenue on reduction, XX% cost to of enrollment average Stephen tracking the levels continued well, flow-through are again, of are enrollments XXXX recognition management expectations the a and care from Occupancy gains This care XX% continue to -- our March of continuing to employees a to the users to and me, track of the on our the quarter. to for lows from and to particularly increasing as off mix family the use the have the over support income solid operating excuse the and be below the progressing encouraged expectations as on care that of by quarter, targeted enrollment. base client make are expectation our April. sequential $XX that and notable quarter the toward year for XX% care made the supports to in pre-COVID nicely increased disrupted strong for Self-sourced backup in-center in-person growing segment improvement use which of the of remained in-home million. that a option programs in and and loss delays the expanding to pandemic, stepped XX% care to the XX% flow-through Adjusted over partners XX% user revenue in in our client reimbursed and income $XX was with Backup operating use saw Traditional services X%, some of in government as continue child and continued sequential clients As in we due last levels. Demand this than a contracted growth full-service backup up we and available prior reimbursed represents levels higher build million traditional schools with including expected ongoing industry. to due continue full does and by XX% their growth first year. revenue returning to base, was learning. chose and

XXXX, is growth. As which is we've to it operating to and care, quarter on therefore net revenue the margin self-sourced of growth a in dilutive revenue discussed, even peaked reimbursed second as the basis recognized segment's contributes

in increased XX% quarter. factors, the of to As a result revenue income $XX operating million these or of

the Our we've Educational client of Advising onset advising admissions about offerings. about services. limit and being new spending cost aligning revenue expanded our schedule being and with contributions disciplined college million our the to workforce with our income, measured pandemic, Sittercity the creatively adverse with the and segment impact on marketplace able management on or also care, client launches by been reported revenue reopening up of education, use service $X responding investment to growth demand expanded and contraction operating the from needs solid of Since XX% for

Netherlands, the Our structure we helped towards government Act further partners and the industry as well have limit Consolidated the variable to and provisions in client child the the Appropriations support care CARES the and cost from of our receive programs as and other various U.K. deleveraging. directed

million QX the components other on on a interest lower adjusted tax from was to of P&L. XX% XXXX-XX. rates. 'XX Turning in equity Structural XXXX Interest in net was over quarter XX% million to expense the compared of tax ASU activity in to $X lower couple income due under rate XXXX a $X down on benefit

balance and our million the acquisitions million quarter We no flow. operations from cash to the made the in $XX million, in since the $XX assets of million $XXX in sheet in XXXX. cash and of and We investments up have fixed on ended revolver. and $XXX Turning with generated quarter borrowings outstanding somewhat $XX million cash

and full the are has guidance recovery ongoing the since remains the of disruption predict. the the not case of onset business As providing to last cadence pandemic year, as been difficult we earnings

focus can I rest how next some on and families enrolling continue see pre-COVID our However, is on With color we unfolding. ramping the to quarter XX% of qualitative XXXX share portfolio levels. centers the and back of our our to open,

expect growth recovers. are As utilization return shutdown year-over-year late near that to will our to trends, 'XX discussed, encouraged we impacted In take we enrollment results. by lap we the expect COVID our XXXX the temporary revenue continue term, to until we it and segment before full-service significantly that as QX

increase XXXX approximately expect flow-through of Specifically, incremental full-service QX we XXX% revenue to operating XX%. XXX% to income with over

revenue reflecting the in broader the out additions, full-service optimistic XXXX, look including rate, existing half continue our continued growth growth opportunity by greater over we've to long-term previously the discussed. client Likewise, year, expanding expect build levels parent income XXXX, for XX%. expect our in that the delivered backup of grow for to overall we the mix the that pandemic first XXXX income the run care near the expect year. positive traditional operating the within the early care remain approximately the crisis to second continue very half first XXXX by above of we of as about we As we reimbursed XX% to term, of of trend populations we in the generate care's significantly trail client in backup continue in significant and needs. stages We balance target we expect the operating XX% to use to to XX% and revenue surge new penetration to use our families. at to In the half Due will year-over-year in meet backup solutions dynamics

we that are tutoring expanded of top to growth the the return camp and the XXXX including have services in We on to line, half then second looking introduced.

Education service continue client respect Finally, to and in expect business, deliver similar of saw to in the to launches as on with factors quarter provision. we our results Advisory we similar first additional QX it new

we we to So to prepared through Q&A. ready are are Holly, go our and with that, remarks,

Operator

today Andrew Morgan. JP will question first with Steinerman come Our Instructions] from [Operator

Andrew Steinerman

the role Pre-K in and about at But with a other Georgia is available. Plan, what forward? we adjusts just I definitely the this my heard that the proposal put industry's know move point. your Families in American profitably? really experience fact still In I which a can industry past surely comments know to quote serve White really you to might type are analogy not really words, this the I question is, the out details this fair way And the of Universal House now, point Stephen, the sheet your is that from that

Stephen Kramer

Andrew. this Yes. detail the that to it A still And is I'll underscore very part limited as question, that again, plan. great there relates says

that, improved does absence to we what an have is universal for to of would the up which importance access I there obviously, say On trying And it especially serving. preschool of care, would workforce, parents job of And the how prepare though, continue last certainly as of and and other three- I Bright reduced foremost, years, spend women. time that high-quality possible hand, idea that work detail, increased the affordable funding having health, it look when obviously, a for will first crime, the is great a sure of we say care. been the making in allocation the what four-year-olds. the Plan Families for and and highlight child to dropping really the think great plan the understand and I again Plan American Horizons the for we families at American free lot of in of XX long-term in end as certainly, is is and to outlining for of have any about limited is What we employers benefits to parents cetera. et leads highlights the wages, relates working Families described out that it inclusion of

also that is think a high-need fairly of be clear going prioritization it is to there that I areas.

state $XXX children and a the seems be are you families, truly may over the the how, distinction that between national has of who a as you is a children that, low that And Georgia this, an would it years they stage, for realize when And about leaned how XX like I reference seems that who contemplating has on and ability it. good breathtaking middle-income approached this to say billion certainly, while think about all and as so plan provide into amount, pretty limited. for think example when number quite you you Georgia

government, does plan think by care like the do, that about Bright or you have where is they and families, hard-pressed we the working But as focusing way Georgia those XX free and Andrew, for families for about earning think their plan, families recognize when is a is there work we that on most profitable economically state example, the I care work certainly, are or the child we of providers hours think for medium possibility. the So you that pretty income in deliver that language a Horizons the look around in again, specific U.K., where that on at that less. some subsidized X.Xx

at least what that So from even some I of as the do basic referenced we experienced the you look Georgia. in do think to different in be or tenants U.K.

Andrew Steinerman

how more helpful. is that. And I same you clarification, try answered point?. that Can just understand I one

And to mix only infants four-year-olds. sense really Bright three- know, four-year-olds your willing obviously, enrollments and proposal is for Would of the typical the give for I care service? us you three- and about a is be full-service for and of So full point toddlers. and that entry population bigger most Horizons

Elizabeth Boland

Yes.

demand because the XX-XX, in closer it's and we the five-year-olds, XX% center Many more for to the can So kindergarten mix. ages in tend supply or you about spaces. in is vary you're is think infant three- the the toddler classroom. have a and those and toddler market infant to in I XX% general know, and may employers there as XX-XX have it But if general, maybe to a in running Andrew, and so mix limited

be to So enrollment in more general. that's the may capacity, the like XX-XX skewed

Operator

Next, we'll hear Manav Patnaik from with Barclays.

Manav Patnaik

I been of know Stephen, terms in the more -- little pivot kind guess centers. terms us you've -- more of you latest if hoping employee need surveys was bit the care, retail a hearing on-site into the lease/consortium of and these like you are doing parent I all thoughts or feel And surveys. bit just little you of give a in you I what to

the what curious there thoughts Just are? latest

Stephen Kramer

Yes. Manav. Thanks for question, the

will what hearing office. of think sentiment employer with and What I that come a an employers we're we're sort from hearing, first. the employees expectation towards steady shift back the is I'll to start

Goldman coming think expectation that this their Sachs most JPMorgan office others back that I will and So you recently Chase be heard their and employees from locations. is to week their

was offices some back so a time end populations think has I of be starting that to the to the offices. quite of bit. And the sort But looking people I clients I that, going are office of and the in that returning And this that through think out employer to dead, rhetoric the earlier and get shifted their think employees broader frame. were idea our sort not that we're of to the the see to June year was

employer site. perspective, get an desire work I to the from So to think back a there and growing is employees interest

work are they a I than as they that child back center either that real working I the have may to come parents important think increasingly a may as consideration they that back they recognizing that available come thought. tool seeing employee's pervasive that as to be have care I pre-pandemic, be support as something arrangements would as say more not an having were office. perspective, think once and perspective, again, liberal to them is from be to attraction their while from are are, they their flexible or going

the about be. But need to think where in build we where continue areas about good capacity. are the and not and additional going so what the suffice being we near communities. of to good more we locations office arrangements. It's But is say, And really say feel and component an to centers, we aren't broadly in we about about to we location vis-à-vis that that do, feel surveys out important solutions our both need, their to the of continue our more that where footprint near hear thinking office again, it care is demand we'll

Manav Patnaik

just hired kind any going virtual Co-founder camps, care.com run of kind expect. acquisition? what Is changes the Okay. that of of then because you That's I'm scaling services, here? these mass just I sense. Just think should helpful. Is that guess all just we super Got it. I there cetera, business. new et on this And plans makes And tutoring, the to Sittercity curious curious.

Stephen Kramer

Yes. I mean that, to and support. look, that to that needs their want have the responsive first be employers I trying think employees to and we're foremost,

as interactions as our quickly So well advisory very through school our have board just types. we client as through and support, interaction care the knowledge we with environment mobilizing well employees for as the of additional are

so And camp this have example, arrangements we that been recognize, for summer families' disrupted. of lot a traditional

acquisition as going position as the So the other providers, we vis-à-vis area. think with to face in strategic us Kate's to & that that disruptions well Steve are camp partnerships going are of families additional well

year progress stunted. well recognize prepared through for learning that addition, remote into In employees who want a through as really virtual make that And learning in next recognition that to outcry tutoring and to I are an the from children been year has their both hybrid and going fall that earlier many, was sure the mentioned, through academic on they beyond. many side, the children

we obviously, excited fact, made, that think care idea families, needs as acquisition employees. have all that in Horizons very really more their was represents cofounders employer in areas And in become Bright so nature area the talented terrific of that again, area. the and believe more individuals into is to a But to way. we more made our a background of Sittercity, their about many we in interested the be in for yes, this and, for timely, destination the supporting Care.com. she She this to strategic address but really leaning lead broader employers the that clients, been Likewise, we cooperative hire that was Sittercity. long-term we're that again, of we say, of And for CEO of to one different very needs. is and as continue more which attracted of of of they employees She we well, care business. our as the continue supporting has about a to one

Operator

And George Sachs. with Goldman our next question Tong come from will

Keen Fai Tong

rates mentioned was towards are could tracking XX% utilization You perspectives and I wondering that that. some levels. if full-service you XX% around pre-COVID now for and provide additional your context to centers

over of by how expect them how course to the performed So the the And levels? you utilization just course over year-end, to year? that the rates expect And pre-COVID would the quarter? you to of evolve confirm rates return then utilization

Elizabeth Boland

Sure.

more toward they sort reorient dynamic of summer to the of talking as because continue distribution the would along growing and you're elementary to bit different we churn a the continue enrollment. age to are So we the to backfilling we're as about into of we through sort may a seeing -- younger think build are quite be on their school are I expecting to been has move continue where and was it arrangements, the in in look a past. our now where are infer go as we we summer, of work tried penetration terms as But of often enrollment have to this of even would their children vaccine mode, steady little progress time of as see the recovery you older the Stephen to that comments, expect just more of in really in enrollment begin been people the year history plans some performance see groups. rebuild seasonality, both Where in back than all and

part of -- able year the the Obviously, too that. pre-COVID at we to end the it's levels to to our So moment the be of at be are that the detailed that by it's giving say near that expectation say to we guidance. is confirming will we're our dynamic stance confirming to moment be back

experience path introducing we've Horizons that, progression all the only certainly the their that have based we're toward who the what that have center that families new for efforts have. that We aiming before, on, and the not terrific we're been in a welcoming and to that's Bright curriculum them the on had belief parents but is can with welcoming back children of and our

it are other we to So now, not will have be only centers. the centers are that temporarily also reopen only that been process. open in not those as getting One something do is ramped that And that but working thing, we up. George, a focused that through continue centers we learned lot closed, on that on we've

to And the of year-end year. of pre-COVID opening the the last if fall be in by end obviously those half on, those, won't some they're the back of and levels the

Keen Fai Tong

I conversations strategies helpful. you know In up talk rates how words, the become of maybe office In shore the of movement does pacing That's to can to with utilization people different to that fewer more office than or in than week Got other that guess, very being return case you up favorably. in employers and have your about ends or adapt the the is nature, the terms you scenario, before? I if you could mentioned suggest return bolster work-from-home surveys days reality post-COVID pre-COVID? work-from-home permanent in it. that And the that structural

Stephen Kramer

Yes. you. great thank question, It's a

game of what And my for possibility. things. preparation seeing we're that more for few remarks and and feeling. essentially, of So playing in that, we have And sort a was about terms been preparing much

remember to demand that with workforce clients full generally, centers, So typically can the because do not that -- that on-site had our support in that expected we important is our is, build and within it's centers first on the location. waitlists our we

those time, as previously. the less expectation where even we opposed and less rates back ability come had in use center a scenario simply at the than people than that to have therefore, in more families full is so lower occupancy to to are we the want to time locations running will full that what serve than office And our seen

So across that's the structural working seamless working second first that create can sort way is, foremost, and for multiple corporate about we say I'd families. experience to our of, the our something partners. with about ways we've been we centers think a build hard centers

unique feel is a on. centers part week so really combination parents the in opposed we're hard centers experience the a seamless for center part is another community-facing how a our experience that two it's between then the So something that second utilizing one as typically experience week. the an different center working the for of closer like and they having and option of in of structure of to experiences is we to on-site one that that home of And

both to So our utilizing the on-site on-site sure in second across multiple to we're seamless make ultimately family, community-facing ways. hard well centers our trying as And working centers. in the experience we're create locations. that is for serve same able as the One families to is more both that

Operator

question next Hamzah Jefferies. Mazari Our come with will from

Hamzah Mazari

has days comfort backup My ramp margins, not pretty is will not, first post-COVID. not adding from what is investors maybe backup mean they perspective, some revenue margins walk just peaked? down that this normalizes. maybe are cut clear on It's the those clients maybe your wins, give days, sticky, dynamics mix And we business. that the question could back you as by a client sort But sort us they're more of business of maybe through of new days of

comfortable business a what us help the you understand and aside, margins peaked base hasn't gets leave Just let's revenue obviously? from perspective

Stephen Kramer

Yes.

added perspective, I you'll things. clients few growth a business. have know, overall of to new from number So we think as is, the revenue say I'd One a a

And new existing client the have first the so continuation into clients we based opportunity associated clients. the we the added being about of base retention that foremost, think and strong and with long-term our on

and becomes as of business confidence it think itself see what go the the to it strength-to-strength. proposition. their overall to of I real future a as that piece the client from is how employers part So base important continues And relates

have going standard to introduced cases as the they And circumstances, can portfolio an employees, in bank, like been employee banks the grow and/or than use of users cases, uses we cases we're how need service, that seeing second support will in a that utilize the some both least the number service historically. use recognizing keep the for certain finally, employers in, more as may access rather fewer. to at we're more days in use that use are the the as add total that believe an new level especially different employee environment at to The use. the to is, And increase continue is to well of to as we particular average attract good then

lower is over reimbursed anything I REIT think it's And we and feel revenue where need be expect so would So arrangements. revenue in we quarter, growth environment that reflected per where saw in past backup and think comes the again, experienced. not stabilize at use continued good health using I obviously, that and value we of term. see therefore, this something a the about the taken a headed in self-sourced an again, really business which long to, traditional perspective, continue together, confidence it's care, we from increased to But that there care would elevated is again is the or our use

Elizabeth Boland

can being I to of thing served. other to question the on add one who's Hamzah, If that, comfort

user have employer that of think of I might able to children offers client wasn't able opportunity we been an different and us on in services go the can that of if backup another additional care, the -- being touch way coming age may parents to to remarks. of penetration services we that's and a of gain not ages serve that have who the in is that to users, out with deeper variety the and children, different otherwise already types Stephen's are not only different breadth candidate,

Hamzah Mazari

great. That's

Pre-K simplify of again, -- sort an to are not of to there's have by thanks to threshold universal had expect dumb you customer But as be The oh -- coming just And you million going down more is and capacity all just there's we to a question, detail. you and back other way, X system the for there earners. be take in bunch even high impacted, was to the though just it because on in base -- enough not income the four-year-olds wage and three- your kids.

positive creating can or system. the get this capacity a So in maybe as that net if you for neutral a you Is view to terms? you involved even fair just simple in

Stephen Kramer

Yes.

in think limited so detail. again, -- I first,

what that what don't limits, serve if outlined is lower and our in a get that to you've we income what over program. parents, a would and know, generally might families, service outside think be would scope terms we Pre-K have. I therefore, from which opining not we that, of experience, likely in need year, right, skis for dual-income know to be are of I to middle-income day, does who the So to we working there characterization our the Universal income full full say be. of higher tend fit the But fair parents, working those is as they needs want who on in addition to

Elizabeth Boland

Incomplete solution.

Stephen Kramer

full step of they we, four-year-olds offered It's that three- to have the income providing a and government, through the year, be believe the final be care the does needs. would of map where would offset that of Where event a the families. in were would preschool where is full the we a into high-quality we Bright And some then course, ability and is provides choice government incomplete, costs education the participant solution provider piece is Horizons. whereas day, by their factor a for really that to what with are then traditional rates sustainable, and not in which provide

Operator

Securities. with will our come Gary America of Bisbee from next And question Bank

Gary Bisbee

year-over-year? start But could mix the underlying but you trending understand that I the look makes much strong. right, volume of have quarter, on what's off growth number one margin's Can the revenue issue, was tell days weak, of us a in with at? the the how If growth just you I backup. usage up

Elizabeth Boland

you're -- for was here, the we first is faint but little I a question Gary, quarter. what bit think metrics the underlying use So your

in-home ever traditional in the our the last partners our use network exactly has year's I use quantified backup yet So feature not to we is. of recovered what level. is, haven't It think, in-centers and

that reimbursed but care, a for revenue. has more been substitution the comes fraction at the it of So

trend from haven't it. a use the clients, a seeing on standpoint based overall we -- So levels use, but are of we of certainly the higher toward quantified volume

Gary Bisbee

say trying I'm mean grow the it the on for what's way if asked there market a pandemic? business the you strong this the and a number, had to on could Is an frame prior there of And it versus fallout than other client it not couple growing quarter the was Is I having won't service I understanding because good side what you've trajectory let's about call pandemic is potentially any outside experience. the -- in within you is to years the last trajectory been of guess give growth. the what that? talked say, mix? business XXXX, to the have parents of over, like, taken that it, bump -- in I at employer a had is third of the volume if of thought now had the used to year's the case faster get addressable more safe

Elizabeth Boland

Yes.

are way So that we well. thinking that is a about as it

a individual look in total in have against noise -- the -- think there to use. many arrangement. certain basket we employees clients the we back use are their that's is they frame if that that, that what And that So growth have I can of and and then the is how to time they in have a limits

effort to growth having to half that we the out that the the at clients look the of until mix. underlying season at velocity utilizing And return and to newer where are we back care, about opportunity the see numbers care. that the levels up of for of so to the at who the to when have, of are above limit buying one and population a the that it clients the baskets the seeing begin the extent to that clients, look at have numbers I employees can we the we that it care why we And the reimbursed -- into we just employees number opportunity. existing they levels be disordered are applied think you're to in the at and from penetration -- can that, of getting where them growth of That's clients begin the levels eligible marketing using they see. and figure. expand those talk -- that's traditional see But we level of And those year,

off noisy of number coming obviously a we're of So quarters.

reluctance years, of sort is yet is. It so if either back a take we to be or But that? of we we we're that quite of And there feel reembrace the time. the certainly can a point over fully the growth because and pause the confident of solution coming care, kinds for parents not center that's maybe them where real of look off traditional of couple

Gary Bisbee

sense chains, service just full back And to bring who information, in our I reopen, support we updated pre-pandemic this seeing have levels. that business. to you as do you just center? survey any your quarter, And or think what community fact utilization the data, retail versus Great. center the run talk to you community, you centers you'll enrollment them one two asked cases, last or but XX%, purely more in is U. accept then today as part on When of the get many people a lot is them some of And back? I thinking lot maybe to how are are the might corporate? not how of a that, center you're be -- that community parents their at But move the a mix corporates to kids local center about the and you risk understand lower. years the leads S.

Stephen Kramer

So I'll that question. the first of part take

across of So first our the that we all, sort our checks in market centers operate, with country, of welcoming markets is the in you just the what we've where in are where which suggestive made not which we tend outlined. data focus much The in we the especially research, is is of community suggestive that are. data that market very to in are available line

are to line. rooms, opposed center. in that it possible about very for example, say available as is And different, suggesting What when others staffed that a talking so is something percentage would I within they that is capacity are

we tracked is and point get I that running commensurate. running the but centers to and our are have the market our where families again, attracting as center, reopened. make say back consistently of those we so previously over the I can very second of is think where misleading, And is some great enrolled a degree has confidence that have would have time I'd well that that very numbers quite done I

the appreciate for the or that models. that whether so working Horizons we be Bright work one site think I that their enjoy of child, a market experience parents at lease/consortium where our value And whether be position of a truly in

families garnering to don't infants, we previously leaking arrangements. are our new and new families example, relates families, that likewise, child providers. stayed more are share families than but that as concern have for so in believe Instead, are other fair we our who that with enrolled new we care have are And And to it us. coming general joining

Elizabeth Boland

of U.S., In Gary, Yes. are our community X/X about centers the facing.

In some European employer they community do. even centers operations, one So or another. members. sponsor, community are all the in can welcome enrollment basically, to form our of from There are the welcoming but they

Operator

Jeff Capital question Silber BMO next with from come will Markets. Our

Jeffrey Silber

American contracted, have, government any the like that curious, see was you historically, Rescue business? impact where was tax to when this that? back from I'm your we or are that how tax did has the credit expanded. I But a Plan child expanded funding. benefit And That passed. did go credits plan does just care guess, to Sorry

Elizabeth Boland

be they funding where that that care their toward families think the care to they credit will use a costs. monthly I you're getting Well, child to referring tax can toward child

up it know stimulus attribute has certainly that variables So getting we enrollment. may the -- see it difficult are who little enough we child families I seek center it's that varieties bump the so a sort I versus a to -- $XXX have in a that. would that that care from time they view in be a a buy care that able don't some a to would -- the certainly. of it's previously a trickle-down to had would in that a in -- in that, other that And think be see on of But of know it to payments even could a type effect. parent time, of to over is all center soon had buy in see I juggling too would month variety benefit credit more say come The and funding supports, think of benefit that a we our too. of they material I in not a have and/or quality yet the the

Jeffrey Silber

we the historically a it's I staff. Okay. Can again, you've Fair said an wages but differ by going enough. are? American impact that was know how I segment. And business? provision above know this then wage back there Families to do proposal, typically give roughly your Plan. for $XX a And what average that you market know would going rates. establishing, to minimum see childhood a you geographic still I And indication I about think, pay if enforced, they're us the

Elizabeth Boland

Yes.

with as wage say, of different wage this that any we there one national you country So or are that is cost a of -- mandated economy course, of in is not like minimum salary kind the the the and is many unitary, challenges, structures.

below is wage areas. So we local There are we -- depend but couple because we're that what rates. areas, above experience general, too would the the some that, other well that average and market with nationally, our areas that's a in be In it. dollars it does above where on we we're

wage I of think compression that causes a any wage it like minimum levels. with all kind the at challenge is

to than And be an XXX Best about been cited Fortune's this I being cascade Stephen minimum choice. so the remarks hallmark our of different a on it just think bringing to time can that has But effect wage. become List. in over quite prepared a people in employer

I having and in think are place to who being paying but professional lives. teachers not work, ourselves critical our professional educators wage we've a benefits always only a prided on great for children's

will And has with accessible. over partnership care what and do child employers Frankly, partner. that's to that making so we the to continue been years, about the work

that that over U.K. And here of that think like as and the able time. to in kinds thresholds we these the adapt to be Netherlands will wage we've York like wage and to to continue places adapt living to have and and regulatory. have so of a New kinds frankly, been minimum or Seattle can leader also we this do we And

Operator

will next from Our question with Morgan Toni come Stanley. Instructions] Kaplan [Operator

Toni Kaplan

employer-based you open closed. the over generally XXX should those centers Are offices that reopened? because centers of Or issue? are to are little Wanted whether their ask other evaluating about centers you're them haven't roughly some where those where

Elizabeth Boland

a are reopen a our enrollment just client reopening for centers. But are what their either Yes. sort to and at locations. at primarily consolidated continued majority skeleton-type generally our the decision those crew. Toni, campus have former. begin more client employers back vast we the looking bring are These momentum worksite handful and/or looking community-facing on where the that the locations be efficient for are time where it's There's to the they people want than to of to to

Stephen Kramer

closed. I where the think tied I to that in the is lot thing Yes. I Yes. a is are of add only would locations mean physically them location

But those to remainder to different open for that and get to opportunity are open, a able good the not that employer-sponsored or sites the centers building most so all is child they work And therefore, were say totally to is Because, the line reopened. the that this open of are of agree the The with them the Elizabeth. point office. it majority obviously, from possible. our we uniquely they majority of centers. uniquely site through from separately had the to actual is center the and reopen because therefore, say care part, and of could campus not are year But have entrance at reopened. the those And

Toni Kaplan

different employers. be? and -- it's missing? like, of whether normally quickly is going overall just or bit -- factor your centers? it Or And a pipeline as time of hear pipeline little great. typical opening Is is in then to guess, arrangements longer, whatever That's skewed is the lead like and pipeline certain just size or industry there anything also, pipeline to I any I wanted the versus because about might a to sort about work-from-home other be of general, just or it future may there as of COVID unclear is Like or converting the

Stephen Kramer

great. No, Yes. that's

the in in some of malaise, the the hopeful So that making really that open XXXX. strong new we and centers is back client pleased decisions quarter. saw velocity that if in And a will, on first, we that, were four of indication unlike reduction is the XXXX sort for you to I'm

other employees. the feel I demonstrating good care they we are to We supports interest near-site centers that can think about employers feel their towards on-site about that child good pipeline. and providing and the be

self-operated engage new So topic about centers about employers feel ultimately, opportunities. to ability good transition think feel centers I we We ultimately continue and on and open to from area. good our other that the

So good Horizons. about for backup where overall, to both at continuing and call joining services. as are forward we for thanks operations great the much, very Thank well here you have pipeline in Ed Toni, Thank the Bright the for that Advisory centers questions Excellent. this great everyone and evening. you. all the feeling as Appreciate our look we and

Operator

your call. Thank you for you. Thank again, that And concludes today's participation.

disconnect. now may You

Bright Horizons Family Solutions (BFAM) 8 May 212021 Q1 Earnings call transcript