BFAM - Earnings call transcript Q1 2022 | Bright Horizons Family Solutions Inc.

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Operator

Greetings, and welcome to Bright Horizons Family Solutions First Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Flanagan, Senior Director of Investor Relations. Thank you.

You may begin.

Michael Flanagan

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

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

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

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

Stephen Kramer

on and of the and recovery our business. to first start quarter delivered your again quarter, We before for environment evident us and hope navigating results midyear I'm particularly the and thank with Hello well broader your in XXX% open the growth million the $XXX as represents XX% a XX% an University for for point increase effects centers, the evening. our approach for quarter, our economic $X.XX. centers impacts, persistent of as Carolina business centers detailed year We well. for COVID-XX and the of of quarter. added for on with we review are staffing first segment, the for Center. it new revenue everyone Mike. questions. the including I'll executed a and of this more well on organic review of doing that in Olympus Elizabeth which joining driven of we us as nine in Thanks, with In of family the the the numbers with the you adjusted by more full-service XXXX. and generating front. and EPS $XXX client of than Bryan We call, I our an North you start a update revenue the will pace tonight follow earnings variants provide million are pleased revenue continued the Medical dynamic to up America two

the centers, seven into improved reopened centers and trends underlying QX lease/consortium. with levels and cost-plus that demand we opened. XX% line I April. In of centers enrollment and quarter X,XXX more quarter across our our center types, also model in bottom open all encouraged our the throughout remain We ended the see by

work and of as and their schedules. continue interest, life in registering We tours parents our have to centers numbers increasing families expressing solidify scheduling

We the positive front. making are also staffing strides on

quarter work, at address to been have taking unique actions creatively enrollment deploying levels and operations and increased to serve the talent Our teams growing conditions. staffing our and hard throughout solutions requests, the the

the and These Also, and to increasing a including positive locations, families last rate the retention fall care actions we sign earlier remain year, this early to choice impacted a the Horizons efforts. increased positively increasing, indicators in the is been challenging that wages of hires slowed new requesting making strong with interviews employer up. for in tick have we affirmation progress of are Although educators. and surge and QX, environment the took and the a as applications have in of we second our leading conversion continues from recruitment expanding benefits, prospective and some half Bright Omicron are all of employees enrolling constrained still of our our very

Let Sinai had turn million back-up the new over increased me X-Eleven, in or Revenue all Intel, additions quarter to $XX solid prior year. another care. X% with client to now quarter. launching of We Health Mount the

levels given rise some wave discussed the infections we half Omicron hesitation across in families intermittent showed the QX to February, of solutions QX latter As engage in as the use disrupted sharp in into and with country. the care

availability progressed care. providers which of limited constrained was the normalized similar centers, and March, we opportunity as and our childcare traditional care the improved, conditions look care both forward addition, of summer. and quarter, to in-home, to In more in-center we this under through Encouragingly, full-service placement through some the in deliver ways use to February

term, the of over and opportunities expands the term. Over the longer cases our further of list clients growing range use longer

earn are employers to U.S. focus upskill well how reskill and well and who demonstrates workforce several across the differentiate new Hasbro, exemplifies employee EdAssist. we clients by to with school to and McDonald's launches prospects Our are growth selected use employees and into quarter, we Launching Archways degrees. value million. the clients been McDonald's particular $XX proud in at EdAssist looking this the educational support delivered and to advisory as see Papa manage XXX,XXX hard-to-fill Coach note, program business and to in proposition high education added college employees College of with Opportunity revenue as Of than their Yahoo!, and XX,XXX continue yesterday, We to program. including to debt-free their restaurants This positioned and investment have program solid X% offers John's levels more opportunity roles. are to

we exciting announced this afternoon. on development Now just an to

the and priorities About of leading that one that the our be am education Only underpin thrilled that market extend to To One end, early do of we Children. the in X providers Australian will growth. education acquisition share our key to strategic through of is work the we early entering impact through of I childcare,

agreement close summer. to signed this plan later have a and We definitive

this is key providers. market really structured success and as among company's our that our transaction three align demonstrates Our with global Australian choice strategy. like-minded, acquirer well growth The around of an further reputation partner with high-quality elements

thereby First, robust we of financial in prioritize covering of have history markets are to has program. parents of third-party affordability families of through significant by or Australia support cost, CCS portion providing some form a selection government-operated of their families Care long for support that to quality CCS a improves the to attracted the Subsidy tuitions. childcare enabling for the Child childcare.

the contribution finally, broaden Children consistent Sydney, Bright relationships serving in financial across will focuses the to welcoming their And details We transparent we strong regulatory team, and entire physical and in their we service and to children's fragmented, Australia organic practice, Children, utilize areas, a on grow the Second, working be including more representing about context, with year, Within industry. of The is system. providers families About to business in national educational provides coming the health collaboration value and further utilizing roughly oversight smaller Greater premium this on intend in is impact center-based to and framework with positive expertise our families industry measures a with Melbourne areas. centers seven we look children. for Only quality and located we with family Brisbane highly focused It as capabilities provider parents potential markets later acquisitive environment growth Australia. as well team, high-quality particularly once the and Only look share with of to quality-focused together transaction Australia a this childcare children and About The care. and families the a regulatory In of XX we to with positive in safety, objective number and are excited completed. markets market XX% program children forward to Horizons characteristics. and for and supply/demand and our the growing

make me per our approximately driving to to differentiated growth business XX% to in or to are services optimistic extend partner our Based come. $X.XX XXXX. relationships the our approximately client share. XXXX we leverage outlook revising with to XX% of Let to operating operating our adjusted revenue we strong EPS as turn to XX% $X.XX for XX% be post-pandemic, growth years of our trends, continue very to model on and progress I about the to continue future leveraging rest

work. to want I the principles, a place close, recognize such our Horizons Family's that a special I moment Horizons Bright entire to to commitment take culture makes Bright Before to values upholding unwavering and

of again Campaign's once Forbes' Equality named Diversity, Bloomberg's been have Index. list Human Index, Rights and Employers Best the Gender-Equality to We Corporate for

talented the and help We in that, intensely retain are as our important and external I'll continue as common to and demonstrate Q&A. client dedicated recruit these in over Elizabeth, an our to back human are will business, partners turn call With they the be field review more we I numbers our who validate to organization, and during with recognitions will to us an you to detail, are commitment values. and professionals who

Elizabeth Boland

Stephen. Thanks, Great.

the thoughts said, for on then updated recap just 'XX. our will Stephen some As I and results quarter's outlook provide

million quarter, million. of been reopened of adjusted first first $XXX of centers, of have centers seven In or million nine revenue, was the new EBITDA that XX% the For and and quarter, closed. revenue overall Adjusted added increased XX% we X% $XX to operating revenue. to income temporarily increased $XX XX% we the

revenue center $XX million is We $XXX over also year. a centers. closed Full-service in to which increased increase QX, prior the permanently X million XX%

sequential continues a have occupancy now the of capacity continuation This portfolio. stages XX% mentioned, lingering COVID, that reopening and improvement, steady build, across of the progress since As reflects centers. our enrollment effects seen of the despite the Stephen XX% our and between to we earliest averages of

client the we a $XX receive. to subsidies supports that reduction revenue also million quarter first Our to relating ARPA government reflects

operating the would these by a covered our costs client client-sponsored reminder, the subsidy. otherwise centers, supports As reduce be in which

in full was has increase. positive cost income effect industry. for on cost million been market The and from and the a income, XX% even the service constraints have Adjusted operating well service income to growth operating revenue efficiency expected continue XX% flow-through to experience improved of government specifically to $XX in in enrollment this revenue the compares Excluding childcare would are as operating well quarter, support XX% driven roughly offset, segment our labor the XX%, by to our no which that as XXXX as which from full improving gains continued range programs $X first over the the targeted million. we net

generally Our the back-up which $XX million, consistent X% to expectations in is with our grew quarter. again revenue first

in back-up the XXXX. of QX dampened late full-service Omicron trends, rates childcare variant as QX availability our and and provider care staffing was impacted into cancellation growth in and demand business, XXXX As QX of

quarter. XX% income in broadly operating million of line of was $XX with again the Our which expectations our was revenue, for

on X% launches lower of $X although over and the college as overall million million XXXX we workforce rise. interest from of admissions growth reported back million borrowing of education, segment the was expense to the $X continue services. down quarter, the to contributions in new over $XX rest and advising current costs of educational in are our up Our advising, QX expanded Sittercity use client million on expecting in to $X.X to around tick year rates Interest environment

income increasing XX% XXXX-XX. on XX% of under taxable also Our net equity ASU compared on quarter income for XXXX activity to from XXXX, lower structural and the adjusted rate tax in benefits to tax first increased has

balance the flow. Turning cash to sheet and

the in revolver. we share investments ratio debt-to-EBITDA and with X.Xx million of million and million QX, cash in At repurchases on net operations, from no made capital our our outstanding in million approximately million executed generated $XX borrowings March $XXX early XX, $XXX cash of leverage was $XX $XX quarter. For

on So the now moving XXXX to outlook.

operating support general our and timing as current the and market labor of other costs. as us inflation for rates government revised quantum Our non-U.S. of our operations, interest trends reflects and rates, including particularly on effects on business rising well exchange factors, guidance foreign the funding,

roughly grow XX% $X.X of terms At XX%, ed of back-up between we the to broadly billion. grow expect to In to XXXX in to range $X low top to to level, XX% and range expect a to grow now segment full-service a the care mid-teens. the XX% XX% we revenue line, advisory to XX%, billion or to increase of and

$X.XX earnings, frame, of to sequential In we and of ed be improvement of of advisory terms adjusted for we to XX% full QX to terms service $X.XX overall approximating growth are in $X.XX. range for year, $X.XX to XX%. the share. EPS the of year. be XX% XXXX to the to growth mid-teens, the will a range time growth the in EPS and XX%, to immediate growth outlook more of into XX%, In translate translates course This total expecting revenue to the full to revenue in the is our low of earnings, And an in over expect back-up this range similar roughly QX

with are provider acquisition in entry Lastly, entered acquire About as as leader announce and Stephen early education into an discussed, capabilities a definitive position today to excited agreement us Only market we leverage high-quality we that Children, Australia. provides to to an with This beachhead and to education. service global clients to families into a in opportunity attractive expand our early our a

In acquisition more under generated point AUD generally period. XXX financial with roughly comparing respective to in we to on which in fund global around acquisition revolving provide contribution. the Only the will the revenue high-level million. roughly meantime, to stated performance pre-COVID XXX About existing this release, million are Children and margins for As borrowings USD million, close which to similar the XXXX, the to provide USD our centers operations our XX rest translates and the at when operate the QX, facility context, press XXX at we some primarily our to full-service details credit of We acquiring in centers and hand in anticipate plan cash operating

However, costs, the from earnings Only limited Horizons, subsequent financing to with levels to environment, and such be continue to in the is bright of near-term we operating periods. our and financial performance. accretion our a utilization follow anticipate we pre-COVID and given model returning integration dynamic in with in effects in would Children with see contribution first About strength summary, operations and of In year with progress Bright of And the overall enrollment evident the business pleased fluid indeed. future the we

Doug, So go we will Q&A. to with that,

Operator

line Barclays. Instructions] comes the question. proceed of from with with Please Our [Operator Patnaik question Manav your first

Manav Patnaik

what if there. on And Relative could the there? to ramp-up the want maybe the just your just you've guidance exactly expectations, maybe in just you year touch just - initial revision. I built to Elizabeth, for assumption changed

Elizabeth Boland

Sure.

- exchange dollar of we for this foreign have of you at has there's rates couple the and on weeks The them that strengthened we briefly I external - revision couple last the rest solidified to expect of as rates have factors, interest So there, months, the level have in would have if touched the significantly a will. in categorize things, be as more sort of and the the that year into point. -

the So of had point - earlier our step-up tax those factors but first along with a we a from higher guidance. quarter in also rate one percentage so it's about where higher in it's expected

year. factors So the out take so for three approximately our $X.XX of alone those full or projection

- think As months into tracking, I the year some stubborn challenge it even it's good is with was the X There we've front, and how the to enrollment matter solid, there being us estimates it's gained relates where gained and efficiency on enrollment we a which of continued a seeing had coming there. just now. been supply. as performance, continued pressure rest into with plus our is are labor We labor some the but a bit of mid-February

employment gap, so we've it the contract temporary some needing to wage European helps rates. And in markets, be been staffing fill in operations than also have our staffing in move labor. or where expensive to some to markets to - labor continue more And labor particularly on tends

That have high it's biggest Bright in costs. So I'd can those model other I well and are a terms Horizons, in not of news, quite the couple of factors, costs in think lease - but to as be it's some our factor centers. energy thing that in effect the for throw the continue certainly, energy the only that

Manav Patnaik

metrics then capital think could perhaps if be there with help of perspective, it. a U.S. in off. used just And acquisition Got now? just on the Australia, And touch be I would level, profitability a that the the on I would some just mean on in high timing better asset? us - you Australia from I could Why can the

Elizabeth Boland

Yes.

the of Let did Stephen on investment. some transaction. to their first aspect and deflect the guidelines the we part, And haven't give about We the me where much, let too talk was in performance completed strategic I'll take XXXX. not high-level

and full-service childcare million with a USD is revenue, global which So to business. similar of full-service this operates XXX our business, parameters

I So operation, But a was all where we're still enrollment contraction had speaking, a in quicker And bit them we But costs the Australia? as full-service in from Australia accretion Netherlands solid less early sort under bit recovery throughout, time. we get the we business over expect to would our COVID government has to little months some full-service XX why our that support pandemic. similar but bit as is have, our Stephen, recovery. like and performing broadly of so a business X, mentioned, integration there belt. which on look see similar once

Stephen Kramer

Sure.

a back, the we've been with into has just first, over That States. use United So impact and expansion we've a to of very and opportunity take I the capital really outside good for have to be into us pleased years U.K. the to the made a that very proven the Netherlands. think strong step

a support support and of market strong evaluating stand at been with that really now. a work number out have similar as we government Australia the in to Australia does years see and government the We for looking Netherlands.

new that for we the believe it, government opportunity into has working that of to support families. some And costs a strong going so defray

parents and the quality in to very regime in quality quite a see there terms U.K. that, into provision And being being of In around dialed is addition provision. actually it really similar transparent real the we focus is what to in regulatory Australia.

as in centers, a opportunity a of our saw begin to market makes a again, as expansion we an strong XX lot Australia, at And country us. for so for looked had which, we in beachhead is we that that opportunity believe, a a plans that tremendous sense overall,

available about certainly, and one, or the larger-scale United it are up XX in the we United most the shared part, one States, starting as States. will I years, in relates we the with to that last this over to As XX talk small the three groups, the like is to for so limited are continue U.S. Australia. really tuck-in we've - we say opportunities progress in here track acquisitions, several maybe what

continue to U.S. we'll again, the with so premier forward to a strong in And market. out is market great a a step for really company believe the this opportunities but seek that high-quality player enter within new

Operator

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

Andrew Steinerman

on sounds there's I It that ask in terms really positioning in opportunities and and if just childcare, another a about market believe it's government Can that Guardian just on more could in comment marketplace. corporate is really Children? the that's subsidy. focused focused of via corporate About called kind And childcare I the of market? good parents like Only that on the player you

Stephen Kramer

Thank Andrew. Absolutely. you,

About recognized that support from of that Only do across categorically players. of are well the Guardian both quite as provided government providers. strong Children benefit both is actually as market as The in employer amount very sort limited certainly, support quality really Both and working is So all families. to

like actually is centers. directly a back from there childcare, full-service support because you that tend focused on market supporting to childcare fact employers that the step see specifically strong Given in government

player market is you see the two as would probably highlighted I in premier the and the a half and and of have market. players then The largest also the dozen we scale identified nonprofit that And players nonprofit, within say terms market. that that size so there that players are two that high-quality largest very a between in you in

About to we those does Children. the point believe our again, has in continue are About which that of We something market position starting that like programming on well, and great that government them Children to in efforts. So Only support because defray for it's some quality, growth our will the we and that believe the compete of costs to is similar to Only childcare, with a we Netherlands, able

Andrew Steinerman

in would Okay. willing the in current out? be And the quarter laid that capacity talk to Elizabeth, you're that about quarter within you to utilization fall second the or you expecting the parameters we're that

Elizabeth Boland

looks what guidance seeing similar probably Yes. we've quarters. I the a to mean in few slope our last to been

quarter, points any up getting percentage in. is before cycle So a on a couple for summer of then solid know, April with enrollment seeing you happens of - elementary as you the will, sort based children how school. we're ticking that And turnover, this if ready older come

pleased with performance QX. So we're in the

As to - XX%. been up we range heard, now has averaging XX% moved to XX% around is what averaging the you XX% from average

uptick we're QX. expect of good, So would couple to in of we points there, seeing again continuing solid that a improvement see percentage

Andrew Steinerman

Okay. Last question, if I could.

new mentioned Just using I've camp, the and around of those tutoring, any you heard summertime. initiatives things. type strategy summer the Surely,

that this And do of, we fall? even in might like let's there all so you before summer kind drivers feel with say, the mind, be newer about think

Stephen Kramer

Yes.

last we a look, constraints So say And in-home ability and the summer us. saw that be more the before care deliver to given form even to dampened in-centers care summer in strong saw. summer it the of traditional back-up tends relates is obviously what season and and would I to us the camps for capacity as very a summer for

are Kate's & camps than sort the last that and process planning we around more than over summer you in going camp higher Camp, at And to to there I last where to year. two acquired demand level Steve think broader had the market, we we emblematic of are seen of be certainly going we many As is more we And opened know, the opening be meet supply. is years. therefore, able absolutely a have

that believe at be to from families going ultimately, us. really is important season be to and to where support able children looking school need summer off during this to their working forward and are for again, they So we're work. important We're it

Operator

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

Hans Hoffman

availability on about on Mazari. like time, guys labor last Hamzah question how I this. you for could you you're My in filling touched easing? just Hoffman Hans comment is first know This thinking is,

You labor. meet due demand couldn't really to

now? of portfolio? now at how look stand guess, you I easing where So do you geographically is it in labor when And terms the overall

Elizabeth Boland

Yes.

of So identifying onboarding that talent field many and as I as it's effort sort the our all-hands-on-deck an acquisition team and others to possible. us people for be been with in think

particularly that taking of say, country, of except our some more addressing approach little those think - is been those with one different that different and key progress, are more I'd locations. taking locations, But no that all at, we clients, that so some cities notable markets environments, an the bit for I there's are than that think, are are urban is we geographic I a of needs challenged area have in different not suburban. a the different unitary more across appropriate approach in that so the are different making

we in - in number all need, progress, with be the supply as we continue remarks, we more but terms that enrollment that. our back, say I'd an in acute our continues prepared families said that a getting it the of as remains as accessing of the hold quite to of we and of enrollment So problem pleased to rises, are it because centers

Hans Hoffman

And Great. Yes. my follow-up. That's helpful. just definitely then

focused for of know outside role more any gets there just helpful. be big advisory play thoughts ed sort over I you a could just So us how of M&A but how of and full-service could time back-up daycare, sense you give can be a there? would

Stephen Kramer

Sure.

with specific, employees upskilling is think Coach. school. greatest small is of workforce a We to where of focused employee opportunity vast in be the their segment. particular making proposition to add. workforce them support a EdAssist to segment, working skilled reskilling so of related which finally, to opportunity line upside through really of about able them their a have that then Sittercity. And So employee work as That's employees and back think portion going that education. which more our work is see supporting increasingly, and also themselves roles convince education, Where this that majority we with advisory is the are employers the in do on segment, we to to see It in internally. stronger us and ed includes we employers just today, hard-to-fill we value it service, College first become in base they is really strategically And value and the part their more this

so time very we over particular in advisory. of that see again, And a ed aspect opportunity large

Operator

the line Please of from W. comes question Jeff with Robert with Meuler proceed Baird. question. your next Our

JeffMeuler

the you just assuming a a revenue like but are I in that first, assuming 'XX On contribution? Australia are you financial the EPS know acquisition, calendar it's guidance? breakeven, in contribution

Elizabeth Boland

Not guidance. billion of in not out. clarifying asking is No, question. that it Thanks $X.X the guidance in for $X the that to billion we laid

it be and completed will we they folded how are commentary fulsome additive that when So on to contribute. more in,

JeffMeuler

just markets I'd - take the integration the a acquire the employer you me you doesn't like there understand understand best could to process? company it, Okay. approach just that through different overlap it's attractiveness And market I the to for know with like given Australian then are. market. would this? But Maybe a has And help synergies be do margins you another can sharing at practices imagine like synergies sound pitch that. the level. the what some Just government-sponsored to like when well. and a models that high what if it you are you increase of help market and It in some parallels a me

Stephen Kramer

Yes.

as two is as U.K. both well that time we use competency we benchmark, those have been of over those demonstrate acquisition. what in So bring markets to the through Netherlands supporting think both the if as organizations in able particular I the we a organically the and/or growth of

actually the create leadership quality is of the so able the global appreciation second to playbook pretty there again, say And that would we is we great with. are the think team. how impact I I of growth and support, local for with generally team have well-established to a the support and standards the local

fact. And it and additional so I say that to I'd on helpful processes. from therefore really are quality is we are educational systems that is to think add that perspective value as we find able enrollment reputation and our we support relates third given that an the and scale, what based

And in so that and our to think about local systems deploy able market scale things we that are support like enrollment environment. things recruiting ultimate systems, success at within the the

expand of what both systems so financial have expertise if support it that to Children it's be processes Only like will, would organization about and and I as grow a what as less is to have About the you much know-how that is and to is also sort growth. and able allows synergies, deploying that And the scale successful we say and

JeffMeuler

helpful then last just perspective. And me. Really from

the You gave us ARPA figure.

sense other programs, childcare you it The to sense what support year-over-year, release us year, of give up full from give what what a it it relative the And says press XXXX. you quarter? expecting a that you're could was financial XXXX was in if think. of I government can us in The was

Elizabeth Boland

Sure.

Act as very remaining ARPA, branded the Act. CARES there's support come that's incidental CARES through and/or So consolidated from

came So really, P&L that X-X, center. now the that was $XX is had In our funding million, funding that - quarter, we're into around the getting we ARPA. of all

the centers So excluding $XX had estimated about total in I our in for the cost-plus we that the mentioned year. effect full of prepared million remarks,

on probably million little than came we the a - would a full So that in sooner we little look year than center expect now million, those some at And also it's for a - had so be P&L we from supports. $XX or now higher of bit that to bit the benefit $XX we expected. bit what

of receive we're we it's maybe of one of the and/or view of other I'll would to many employers deployed for the that's thing, more complete Jeff, it partners apply benefits, that say parents, we the just because laid to that cost-plus cost of re-ramping even being some centers the reenrolling as them. need avail a where these give that mention contribute. - And the those do the themselves to for the in inefficiencies being they effect, happen we client towards quantum but we them, to they're purpose those of why is reduce of outlook are course, our rest costs, them operational want did have the what in labor out, the year. supports whether and as Of

be about in rest or year as QX. could hear that states we million the left estimate on million million $XX receive funding was to mentioned, the have So $XX from the over that We perhaps from. based another of to that $XX

reasons for we of come That effect a that's we see another in is for than revenue rest where would where of one the has of were lighter bit so before. revenue guidance the the cost-plus cost. the And year little the element

Operator

Jeff from question next Silber your BMO Markets. the Please Our proceed of with with Capital comes line question.

Jeff Silber

just was price the I'm about in. pushback back to remind is that curious to put wanted usually beginning or the typical and you increases how pushback relative the us full-service you took I year? of price to you centers. Can got just at you that go your if any increases

Elizabeth Boland

you decision. know, - we did a this But Jeff, to We January. as Yes. location-by-location X% on average it's put through X% broadly speaking, increases

with situation many it there was it has the price accepting. as may challenges parts their and quite in much have as the receive higher, response now bit we seeing I'd lives, locations along, our labor, think inflation I cost understand persisted but increase. parents to And characterize that they're been pushback from a Some was average. that of did of that then the both but on the staffing not

Jeff Silber

to know that was levels? compare quoted That's government I I'm did you us could terms that to impacted. when about Okay. OAC to know XXX if back curious, And I'm of just the the in curious give how going the revenues just you're great USD but acquisition, business more close some of it I over million you I XXXX, switch the how you color support, guidance. hear. But pre-pandemic to in talked

Elizabeth Boland

headline has into without I in that we've enrollment of detail, think the much seen. impacted too is getting series terms the - degree was variants business their than much a been but disruption mean to I by lesser of

a enrollment For of similar example, there well. kind relatively shutdown, wholesale persisted so wasn't has

XXXX quote has look there contraction it why of but really wasn't So pretty was where would significant. as representative been - some be. we annual there an That's

Operator

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

George Tong

Only it COVID? About can to it expect you longer grow and exiting you about prior grew your pandemic acquisition, With talk term to Children how the how

Elizabeth Boland

their comment approached I'll how they've generally business. about

growth that center has like acquisitions. - an through and both through are they new greenfield, So Bright Horizons has some operator grown

will has certainly growth multi-type end where level been charges a been been of have have is they general cost support been that a they're So acquisitions, do correlate they They that that had tuitions a looking provides in at sort of through. they and sites, increases provider, that provider mentioned, Stephen - as And they've price can their strategy. but at And that locations. and have single they've sets be, been a also their there the - Australia some tuck-in premium high-quality parent as business. come where - subsidy a to program to guideline of

couple a So both driven overall are and It's growth things and that course. growth the years. of over unit have their of enrollment, those price

Stephen Kramer

the future, done I the think of second into of sort Yes. out to have look And a and of add growth lot the build on looks that the would opportunities. part of there good Children. as to around question really About fragmentation again, continue what that room in Only I just extensive sort there from given only your like of of we to the some market, thing at the good touch opportunity a is looking fairly we see starting to believe, the relates it market level out of point And rest

George Tong

helpful. Very it. Got

range. to provide Could return improved on Your you levels? occupancy occupancy when the will to views rate to XX% pre-COVID quarter in latest XX% your the

Elizabeth Boland

Sure.

similar way certainly on end the to will there we are last we - our pre-pandemic be back think back of So don't year. be we all year, the things what quarter the be we we but that end centers may getting close had trending. said can quarter, by the view of our to the by certainly utilization on how last levels are to not said Similar in although to we give to track you had what pre-COVID levels occupancy

XXXX, then fully at that's view would that but be in our back So this point.

George Tong

Got impact rates? the labor tight an it. terms And having on in then lastly, could of occupancy is you what market estimate

Elizabeth Boland

holding again, it's similar probably quarter, occupancy able to are Yes. I what three centers on to this estimate based had percentage are point. we we we enrollment our points at last not that of four in, to take that said the mean in that that we

enrollment, our we similar last say made made to we headway a what still to demand ahead said quarter, we've it. ability of have with let's take headway So we've that's profile with staffing, but

Operator

of Morgan [Operator with with your Kaplan proceed Instructions] the question question. line comes Stanley. Our from next Please Toni

Toni Kaplan

I year the should for focus that advisory this in the tend but do sort thinking quarter a I of we level was in of about margins? drove around, lower When - margins ed full on wanted segment? at how jump look there to second. the there And that margins that and be to particular margins anything

Elizabeth Boland

for and capture that is, businesses, particular residual mentioned in There Yes. Coach, in segment before segment that. - Stephen asking third and segment Toni, any of that College EdAssist, information. our does smallest as our it thanks the our nonspecific other Sittercity

in our is is that what affecting margin of in that platform. the investment business now So most Sittercity right our significantly segment

utilizing that the extended utilize number platform support marketplace parents the and clients We who to significant BXC Sittercity to employees are who our the be out the were serve the environment to building - of but their capabilities family back-up able also able are both program. in through in

an that. in than EdAssist mix and the and it for XX% So full be being year, College think better Sittercity that's that And with investment mode Sittercity, range having the probably a overall. being are we in We Coach to a so that on headwind. XX% of an effect is will

Toni Kaplan

still should about of that good impact the range? Great. lower for XX% the as care, towards if the to year, end of quarter number? But quarter I would first more And inflation of a there's being towards sort that that. talked thinking end lower or back-up from - impact last we then XX% about of think wage wondering like sort on be margins you it any anything or just obviously the that Like Because expectation. is

Elizabeth Boland

Yes.

range, full So the still our we're the for year, to - XX% XX%. is Toni, expecting it that

volume across for season. in care have First third that quarter and the all not quarter in back-up of the with does we the have kind same summer opportunities use of the second

the So it does first quarter. in the tend be half and to lower first particularly

XX% range So XX% the be that to looking we would at be there. would

service the utilize that back-up part when it's in capability. maybe the slightly - is think - that providers I our question to use different one way inflation, there third-party - impacts do - that in a about to as we of

business, because range, much are effects a that a element we extent that is still inflation, continue that they think lower is But we are experiencing inflation there in than full-service to cost within can there. what the caregiver our it that factor. to So it's cost manage

Operator

Our Alwy Deutsche the from next with your Please line proceed comes of question with Faiza Bank. question.

Faiza Alwy

and wanted think about just if center XQ for the was about on near if how think I that that still should I we we about think up how know of at you level. but should and year XX% to about segment actually follow margins that around the full-service curious particular. sort or stands talked - I exiting in I those that, I talk missed don't margins. previously

Elizabeth Boland

Yes.

we've exiting talked full-service. I margins think don't about So in

on track. are We

year, has the close be. will pre-COVID to framing levels, of back think not been the occupancy revenue whereas the by levels think pre-COVID we to performance on where I can be end getting margin

to before certainly in high margins, the - operating pre-COVID, digits, X% So were to XX%. getting single X%,

be that the We we was those recovering all the at year this will about. at mentioned, levels flow-through, end both enrollment of have and been we the factors we from are not quarter XX%. The cost of talking this standpoint around because as

against will year goes quarters of as prior expect keep be - on diminishing the that ramp. we to that would be so and comping we And

provided details. the those the gradually contracting. as while that indication income But as range much flow-through be I that's guidance will an improving, of we've that's marginal on is operating of think So a

Faiza Alwy

you what is inflation? Can what enrollment curious maybe what Just inflation like Do year? to you this to helpful. to level need? single-digit more X% you offset pricing you or year do about like more gets so next back that. need with talk That's get you okay. would I'm I need level, high Okay, - even - this back I Like like X%. guess to maybe that

Elizabeth Boland

also, have in reopen a and that also in are with that, increases cycle. But cycle mean comes their year only to is of course, been I way, broad a we growing in, of always more against seen increase positive a of throw gets structure, course, of average look increases - to price wildcard, we and the or back persist, getting X% acquisition. on But two allows increase. what we more newer know one do other as labor business to it contribute aggressive be may inflation cycles losses us rightsize we - increase with to some regular have that to our If continues to those of be do having contraction the a inflation differentiated so need announced and a another is we ramp-up families higher, back groups, will the here. we economics. factor. - that where staff cadence new pre-COVID but I have consider is for cost been Having business. to that we Getting price pricing that enrollment price the a a labor need would during newer levels us age at regulated it. in I think It as - us a mode. how did in we've or most centers, - is that's We've But centers this spread have are capability, some price in been think to can least pricing here there's cover way And - geographic operating efficient the increases. said the of opening, that. to to cost have I'll market whether likely general, there open back then new pricing get that Yes. we again, that will the pricing, more had in about that has one labor factors different more midyear regular that this the dynamic cycle just at a a the would beginning visible we we other X% either We we enrollment it's

see is come. in business range can reason to be quarters And that over time, to be sometimes, the no XX% a to really the X% in those get high single underlying that that digits that back it there's but we to able factor won't fundamental

Faiza Alwy

how centers Okay. if are end to like just Understood. talked your have around across know enrollment willing enrollment. don't trends last Maybe cetera. you sort And then care, pharmaceuticals centers employer-based of as if relates education, and about before, across or end et any enrollment. of talked whether versus health you've share your like one question like consumer about difference trends are leased this tech, it sort there's but different I are to So of you markets? markets sort discernible customer seeing

Elizabeth Boland

pharmaceuticals current markets is say the seeing where have client-specific. as and Yes. that client it attendance quite I the we're where talked and well health care highest mean I But end-user it really - think about demand enrollment. general, hospitals is quite in often to to demand in specific be except universities tends in we haven't they environment industry high that as having high

points a Our overall on few It's centers lease/consortium enrollment but our slightly centers scale. client enrollment not higher have dramatically different. the than

geographic haven't than So it's variety having think industry can standpoint, really matter seen it a more I parents turn that we been it's - our from a more that serve of be portfolio verticals. of a working to differentiated been out it's

Stephen Kramer

Well, call. for on Great. very you the thank joining us all much

and Q&A, are Thank and you appreciate night. you the excited your a you. prepared all well support that as we great as As wish the from about our remarks we're of progress detect making

Elizabeth Boland

everyone. Thanks,

Operator

this you your gentlemen, conclude participation. today's and Thank teleconference. does for Ladies

your have You and at may this a time, day. lines disconnect wonderful

Bright Horizons Family Solutions (BFAM) 4 May 222022 Q1 Earnings call transcript