Bright Horizons Family Solutions Inc.

10/30/2026 | Press release | Distributed by Public on 10/30/2026 14:22

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the "safe harbor" provisions of the Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms "believes," "expects," "may," "will," "should," "seeks," "projects," "approximately," "intends," "plans," "estimates" or "anticipates," or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report on Form 10-Q and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations; financial condition; liquidity; workplace and demographic trends; wage rate increases, personnel costs and other labor market impacts; future center closures and additional portfolio consolidation and impacts; our operations outside the United States; back-up care services, use types and utilization; enrollment trends and recovery and occupancy in both the United States and outside the United States, including the U.K.; our Australia business and operating conditions and operating performance; our center cohort occupancy levels; cost management and capital spending; investments in employees, wages, and expanded safeguarding expenditures; contributions and growth in our back-up care segment; the availability or lack of government support programs; tuition rate increases and pricing strategies; leases, terms and expirations; ability to respond to changing or volatile market conditions; our growth and strategic priorities; ability to grow and sustain our business; demand for services; our business model; our value proposition, client relations and partnerships; seasonality; macroeconomic trends and changing conditions, including uncertainty and inflationary or recessionary pressures; fluctuating interest rates; changes in laws and regulations; investments in segments and strategic opportunities; investments in technology, marketing, user experience and network supply; our opportunities for expansion; acquisitions, contributions and expected synergies; contingent consideration; amortization expense; our fair value estimates; goodwill from business combinations; future impairment losses; fixed assets; estimates and impact of employee equity transactions; unrecognized tax benefits and the impact of uncertain tax positions; our effective tax rate and estimates; the outcome of tax audits, settlements and tax liabilities; impact of tax benefits/expense; fluctuations, impact and estimates of foreign currency exchange rates and interest rates; our capital allocation; share repurchase program and future activity; the outcome of litigation, legal proceedings/claims, settlements and our insurance coverage, including the portion that is self-insured; our interest rates, weighted average interest rate, expense and impact of our interest rate cap agreements; credit risk; the use of derivatives or other market risk sensitive instruments; critical accounting policies and estimates; impact of new accounting pronouncements; our indebtedness; borrowings under our senior secured credit facilities; the need for additional debt or equity financing, including raising additional funds or refinancing our outstanding indebtedness, and our ability to obtain such financing; contractual and actual maturities; our sources, drivers and uses of cash flows and impacts of future cash flows in certain markets; our ability to fund operations and make capital expenditures and payments with cash and cash equivalents and borrowings; and our ability to meet financial obligations and comply with covenants of our senior secured credit facilities.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, changes in the demand for child care, dependent care and other workplace solutions, including variations in enrollment trends and lower than expected demand from employer sponsor clients as well as variations in workforce demographics and work environments; the constrained labor market for teachers and staff and ability to hire and retain talent, including the impact of increased compensation and labor costs; the availability or lack of government support programs, and the impact of available government child care benefit programs; our ability to respond to changing client and customer needs; competition in our industry; the possibility that acquisitions may disrupt our operations and expose us to additional risk; our ability to pass on our increased costs; our ability to maintain applicable licenses and registrations in the jurisdictions in which we operate; our indebtedness and the terms of such indebtedness; our ability to withstand seasonal fluctuations in the demand for our services; our ability to implement our growth strategies successfully; our ability to close underperforming centers or exit lease arrangements; changes in general economic, political, business and financial market conditions and other macroeconomic events and uncertainty, including the impact of inflation and interest rate fluctuations; fluctuations in currency exchange rates; the effects of a cyber-attack, data breach or other security incident on our information technology system or software or those of our third party vendors; changes in tax rates or policies; damage or harm to our brand or reputation or negative public perception, including as a result of incidents and media coverage; outcome of legal matters, claims, allegations, actual or threatened litigation and regulatory investigations and reviews; insurance risks including self-insured risks and excess coverage; changes in laws and regulations; and other risks and uncertainties more fully described in the "Risk Factors" section of our Annual Report on Form 10-K filed on February 26, 2026, and other factors disclosed from time to time in our other filings with the Securities and Exchange Commission.
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Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future information, events, developments or otherwise, except as required by law.
Overview
The following is a discussion of the significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of Bright Horizons Family Solutions Inc. ("we" or the "Company") for the three and nine months ended September 30, 2026, as compared to the three and nine months ended September 30, 2025. This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.
We are a leading provider of high-quality early education and child care, comprehensive back-up care solutions, and educational advisory services. Our offerings support both working families and employers' workforce strategies by supporting their employees across life and career stages, and improving employee recruitment, engagement, productivity, retention, and career advancement. We provide services primarily under multi-year contracts with employer-clients who offer early education and child care, back-up care, and educational advisory services as part of their employee benefits package.
As of September 30, 2026, we operated 979 early education and child care centers with the capacity to serve approximately 112,500 children in the United States, the United Kingdom, the Netherlands, Australia and India.
Our reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory services. Full service center-based child care includes traditional center-based early education and child care, preschool, and elementary education. Back-up care consists of center-based back-up child care, in-home care for children and seniors, school-age programs (including camps and tutoring), pet care, self-sourced reimbursed care, and Sittercity, an online marketplace for families and caregivers. Educational advisory services include tuition assistance and student loan repayment program management, workforce education, related educational advising, and college admissions counseling services.
During the three months ended September 30, 2026, we saw strong growth in back-up care with a 13% year-over-year increase in revenue as a result of increased utilization. We also saw year-over-year revenue growth of 1% in our full service center-based child care segment, reflecting annual tuition rate increases offset by the effects of center closures. To track our continued improvement in occupancy rates, we monitor occupancy for a cohort of centers that has been operating since the 2021 fall enrollment cycle, and as of September 30, 2026, this cohort of centers totaled 712 centers. Occupancy represents utilization for each respective center and is calculated as the average full-time enrollment divided by the total operating capacity during the period. For the quarter ended September 30, 2026, 42% of these centers were more than 70% enrolled, 49% were between 40-70% enrolled and 9% were less than 40% enrolled, which reflects improved occupancy for the less than 40% enrolled cohort, as well as the effect of closing underperforming centers when compared to the same period in the prior year.
While we continue to see year-over-year growth in certain markets, our operating environment is impacted by increased operating costs, a tight labor market, shifting work demographics, challenging macroeconomic conditions, and varying enrollment demands, including in our U.K. and Australia full service business, where we have recently experienced more challenging operating conditions. We continue to assess trends and operating conditions in Australia and are focused on improving the overall operating performance, while exploring strategic alternatives, and where appropriate, closing centers that we do not believe have long-term potential. We continue to assess our global portfolio of centers through the evaluation of expected near-term and long-term performance, as well as our partnerships with clients. As a result, we routinely close underperforming centers and expect to continue to optimize our portfolio through the closure or other exit of centers identified in these evaluations over the next 12 months.
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We remain focused on the evolving needs of clients, families and children and on our strategic priorities of delivering high quality education and care services, connecting across our service lines, expanding our impact on new and existing customers and clients, and preserving our strong culture. We remain committed to serving the needs of families, clients and our employees and to continuing investments in our programs and service quality. To support our commitment to providing high quality services, we regularly review and refine our processes, policies, and training programs, including our safeguarding practices. In 2026, we continued to invest in safeguarding initiatives, including the implementation of cameras across our portfolio of centers, expanded training and oversight of our center based staff, and partnering with an independent, third-party safeguarding expert to augment our dedicated safeguarding team. We expect to continue making these investments, as appropriate, throughout the remainder of 2026 and beyond. We are confident in our value proposition, business model, the strength of our client partnerships, the strength of our balance sheet and liquidity position, and our ability to continue to respond to changing market conditions.
Results of Operations
The following table sets forth statement of income data as a percentage of revenue for the three months ended September 30, 2026 and 2025:
Three Months Ended September 30,
2026 % 2025 %
(In thousands, except percentages)
Revenue $ 841,471 100.0 % $ 802,812 100.0 %
Cost of services 636,645 75.7 % 585,763 73.0 %
Gross profit 204,826 24.3 % 217,049 27.0 %
Selling, general and administrative expenses 100,824 12.0 % 94,726 11.8 %
Goodwill impairment 290,000 34.4 % - - %
Amortization of intangible assets 1,135 0.1 % 1,477 0.1 %
Income (loss) from operations (187,133) (22.2) % 120,846 15.1 %
Interest expense - net (17,195) (2.1) % (12,212) (1.6) %
Income (loss) before income tax (204,328) (24.3) % 108,634 13.5 %
Income tax expense (26,362) (3.1) % (30,082) (3.7) %
Net income (loss) $ (230,690) (27.4) % $ 78,552 9.8 %
Adjusted EBITDA (1)
$ 163,268 19.4 % $ 156,068 19.4 %
Adjusted income from operations (1)
$ 130,226 15.5 % $ 124,496 15.5 %
Adjusted net income (1)
$ 87,523 10.4 % $ 90,135 11.2 %
(1)Adjusted EBITDA, adjusted income from operations and adjusted net income are financial measures that are not determined in accordance with generally accepted accounting principles in the United States ("GAAP"), which are commonly referred to as "non-GAAP financial measures." Refer to "Non-GAAP Financial Measures and Reconciliation" below for a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures determined under GAAP and for information regarding our use of non-GAAP financial measures.
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The following table sets forth statement of income data as a percentage of revenue for the nine months ended September 30, 2026 and 2025:
Nine Months Ended September 30,
2026 % 2025 %
(In thousands, except percentages)
Revenue $ 2,332,871 100.0 % $ 2,199,909 100.0 %
Cost of services 1,775,592 76.1 % 1,644,573 74.8 %
Gross profit 557,279 23.9 % 555,336 25.2 %
Selling, general and administrative expenses 299,904 12.9 % 281,421 12.8 %
Goodwill impairment 296,275 12.7 % - - %
Amortization of intangible assets 3,467 0.1 % 4,745 0.2 %
Income (loss) from operations (42,367) (1.8) % 269,170 12.2 %
Interest expense - net (43,240) (1.9) % (33,118) (1.5) %
Income (loss) before income tax (85,607) (3.7) % 236,052 10.7 %
Income tax expense (70,340) (3.0) % (64,676) (2.9) %
Net income (loss) $ (155,947) (6.7) % $ 171,376 7.8 %
Adjusted EBITDA (1)
$ 389,430 16.7 % $ 363,987 16.5 %
Adjusted income from operations (1)
$ 294,130 12.6 % $ 272,820 12.4 %
Adjusted net income (1)
$ 198,478 8.5 % $ 196,358 8.9 %
(1)Adjusted EBITDA, adjusted income from operations and adjusted net income are financial measures that are not calculated in accordance with GAAP, which are commonly referred to as "non-GAAP financial measures." Refer to "Non-GAAP Financial Measures and Reconciliation" below for a reconciliation of these non-GAAP financial measures to their respective measures determined under GAAP and for information regarding our use of non-GAAP financial measures.
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
Revenue. Revenue for the three months ended September 30, 2026, increased by $38.7 million, or 5%, to $841.5 million from $802.8 million for the same period in 2025. The following table summarizes the revenue and percentage of total revenue for each of our segments for the three months ended September 30, 2026 and 2025:
Three Months Ended September 30,
2026 2025 Change 2026 vs 2025
(In thousands, except percentages)
Full service center-based child care $ 521,973 62.0 % $ 515,507 64.2 % $ 6,466 1.3 %
Tuition 473,822 90.8 % 468,424 90.9 % 5,398 1.2 %
Management fees and operating subsidies 48,151 9.2 % 47,083 9.1 % 1,068 2.3 %
Back-up care 286,364 34.1 % 253,372 31.6 % 32,992 13.0 %
Educational advisory services 33,134 3.9 % 33,933 4.2 % (799) (2.4) %
Total revenue $ 841,471 100.0 % $ 802,812 100.0 % $ 38,659 4.8 %
Revenue generated by the full service center-based child care segment in the three months ended September 30, 2026 increased by $6.5 million, or 1%, when compared to the same period in 2025. Tuition revenue increased by $5.4 million, or 1%, when compared to the prior year, primarily due to average tuition rate increases of approximately 4%, offset by the impact of centers that have closed since the same period in the prior year, which reduced revenue by approximately 3%, and by lower enrollment in our Australia centers, which reduced revenue by approximately 1%. We expect our center closures to exceed new openings over the next 12 months, and that we will continue to have challenging enrollment trends, including lower than historical average enrollment in our Australia centers.
Management fees and operating subsidies from employer sponsors remained relatively consistent with the prior year.
Revenue generated by back-up care services in the three months ended September 30, 2026 increased by $33.0 million, or 13%, when compared to the same period in 2025. Revenue growth in the back-up care segment was primarily attributable to increased utilization of center-based care, in-home care, and school-age programs by employees of new and existing clients.
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Revenue generated by educational advisory services of $33.1 million in the three months ended September 30, 2026 remained relatively consistent with the same period in 2025.
Cost of Services. Cost of services increased by $50.8 million, or 9%, to $636.6 million for the three months ended September 30, 2026 from $585.8 million for the same period in 2025.
Cost of services in the full service center-based child care segment increased by $30.9 million, or 7%, to $477.2 million in the three months ended September 30, 2026 when compared to the same period in 2025. Personnel costs, which represent approximately 70% of the costs for this segment, increased 1% during the quarter compared to the same period in the prior year, related to average hourly wage rate increases of approximately 3%, and higher benefits costs, including medical care expenses, partially offset by reductions in labor from net center closures since the prior year. In addition, cost of services increased due to incremental expense of $23.4 million related to general liability reserves for certain safeguarding matters. Cost of services for the three months ended September 30, 2025, included $2.4 million of net lease termination costs.
Cost of services in the back-up care segment increased by $20.6 million, or 17%, to $144.4 million in the three months ended September 30, 2026, when compared to the prior year. The increase in cost of services correlates to the increase in revenue and is primarily associated with care provider fees to serve the increase in utilization levels over the prior year, and the continued investment in technology to support our customer user experience, service offerings, and marketing outreach. We expect to continue investing in increasing our network provider supply and in technology to support the growth of this segment.
Cost of services in the educational advisory services segment decreased by $0.6 million, or 4%, to $15.1 million in the three months ended September 30, 2026 when compared to the prior year in line with the trend in revenue.
Gross Profit. Gross profit decreased by $12.2 million, or 6%, to $204.8 million for the three months ended September 30, 2026 from $217.0 million for the same period in 2025 primarily due to contributions from the back-up care segment, resulting from higher utilization of back-up services which were offset by incremental general liability expense for certain safeguarding matters in the full service center-based child care segment. Gross profit margin was 24% of revenue for the three months ended September 30, 2026, a decrease of approximately 3% from the same period in 2025.
Selling, General and Administrative Expenses ("SGA"). SGA increased by $6.1 million, or 6%, to $100.8 million for the three months ended September 30, 2026 from $94.7 million for the same period in 2025, primarily due to impairment losses of $4.0 million related to long-lived assets in the full service center-based child care segment, and higher personnel costs. SGA for the three months ended September 30, 2025 included $1.3 million in expenses within the full service segment related to the August 2025 debt refinancing. SGA was 12% of revenue for the three months ended September 30, 2026, which is consistent with the same period in 2025. Refer to Note 6, Credit Arrangements and Debt Obligations, for additional information on the August 2025 debt refinancing.
Goodwill Impairment Losses. During the three months ended September 30, 2026, we completed our annual goodwill impairment assessment as of October 1, 2026, which resulted in impairment losses of $290.0 million due to revised long-term cash flow projections for our operations in Australia, which was not offset by the expected cash flows of the remaining full service operations outside North America. We continue to monitor developments in certain markets as further decreases in cash flows could lead to additional future impairments.
Amortization of Intangible Assets. Amortization expense on intangible assets was $1.1 million for the three months ended September 30, 2026, a decrease from $1.5 million for the three months ended September 30, 2025, primarily due to decreases from intangible assets becoming fully amortized since the prior year.
Income (Loss) from Operations. Income from operations decreased by $308.0 million, to a loss from operations of $187.1 million for the three months ended September 30, 2026 when compared to the prior year. The following table summarizes income (loss) from operations and percentage of revenue for each of our segments for the three months ended September 30, 2026 and 2025:
Three Months Ended September 30,
2026
2025
Change 2026 vs 2025
(In thousands, except percentages)
Full service center-based child care $ (298,128) (57.1) % $ 16,750 3.2 % $ (314,878) (1,879.9) %
Back-up care 101,234 35.4 % 95,332 37.6 % 5,902 6.2 %
Educational advisory services 9,761 29.5 % 8,764 25.8 % 997 11.4 %
Income (loss) from operations $ (187,133) (22.2) % $ 120,846 15.1 % $ (307,979) (254.9) %
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The change in income from operations was primarily due to the following:
•Income from operations for the full service center-based child care segment decreased $314.9 million in the three months ended September 30, 2026 when compared to the same period in 2025, primarily due to impairment losses of $294.0 million related to goodwill and long-lived assets, arising from revised cash flow projections, and $23.4 million of incremental general liability expense.
•Income from operations for the back-up care segment increased $5.9 million, or 6%, in the three months ended September 30, 2026 when compared to the same period in 2025, primarily due to incremental gross profit contributions from expanded utilization of back-up care services, partially offset by higher investments in technology and marketing to enhance the customer experience.
•Income from operations for the educational advisory services segment increased $1.0 million, or 11%, in the three months ended September 30, 2026 when compared to the same period in 2025.
Net Interest Expense. Net interest expense was $17.2 million for the three months ended September 30, 2026, an increase from $12.2 million for the three months ended September 30, 2025, primarily due to higher average borrowings as well as higher interest rates applicable to our debt. The weighted average interest rate for the term loans and revolving credit facility was 4.99% for the three months ended September 30, 2026 compared to 4.25% for the three months ended September 30, 2025, inclusive of the effects of the cash flow hedges. Based on the current interest rate projections, we estimate that our overall weighted average interest rate will be in the range of 5.5% to 5.75% for the remainder of 2026, inclusive of the effects of the cash flow hedges.
Income Tax Expense. We recorded income tax expense of $26.4 million during the three months ended September 30, 2026, compared to an income tax expense of $30.1 million during the three months ended September 30, 2025, at an effective income tax rate of 28%. The effective tax rate for the three months ended September 30, 2026 was not meaningful due to the impact of the non-deductible goodwill impairment and resulting pretax loss. The difference between the effective income tax rates as compared to the statutory income tax rates was primarily due to the non-deductible goodwill impairment, the impact of unbenefited losses in certain foreign subsidiaries and the effects of net excess tax benefit (shortfall tax expense) associated with the exercise or expiration of stock options and vesting of restricted stock. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including changes to income (loss) before income tax, jurisdictional mix of income (loss) before income tax, unbenefited losses, valuation allowances, jurisdictional income tax rate changes, as well as discrete items such as non-deductible costs, the settlement of foreign, federal and state tax matters and the effects of excess tax benefit (shortfall tax expense) associated with the exercise or expiration of stock options and vesting of restricted stock.
During each of the three months ended September 30, 2026 and 2025, the net shortfall tax expense from stock-based compensation increased tax expense by $0.1 million. For the three months ended September 30, 2026 and 2025, prior to the inclusion of the excess tax benefit (shortfall tax expense), other discrete items and unbenefited losses in certain foreign jurisdictions, the effective tax rate approximated 28% and 27%, respectively.
Adjusted EBITDA and Adjusted Income from Operations. Adjusted EBITDA increased $7.2 million, or 5%, and adjusted income from operations increased $5.7 million, or 5%, for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to increased service levels and contributions from the back-up care segment.
Adjusted Net Income. Adjusted net income decreased $2.6 million, or 2.9%, for the three months ended September 30, 2026 when compared to the same period in 2025, as a result of higher interest expense and an increase to the adjusted effective tax rate, partially offset by the increase in adjusted income from operations noted above.
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Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
Revenue. Revenue increased by $133.0 million, or 6%, to $2.3 billion for the nine months ended September 30, 2026 from $2.2 billion for the same period in 2025. The following table summarizes the revenue and percentage of total revenue for each of our segments for the nine months ended September 30, 2026 and 2025:
Nine Months Ended September 30,
2026 2025 Change 2026 vs 2025
(In thousands, except percentages)
Full service center-based child care $ 1,619,904 69.4 % $ 1,566,321 71.2 % $ 53,583 3.4 %
Tuition 1,481,573 91.5 % 1,428,751 91.2 % 52,822 3.7 %
Management fees and operating subsidies 138,331 8.5 % 137,570 8.8 % 761 0.6 %
Back-up care 624,619 26.8 % 544,654 24.8 % 79,965 14.7 %
Educational advisory services 88,348 3.8 % 88,934 4.0 % (586) (0.7) %
Total revenue $ 2,332,871 100.0 % $ 2,199,909 100.0 % $ 132,962 6.0 %
Revenue generated by the full service center-based child care segment in the nine months ended September 30, 2026 increased by $53.6 million, or 3.4%, when compared to the same period in 2025. Tuition revenue increased by $52.8 million, or 3.7%, when compared to the prior year, primarily due to average tuition rate increases of approximately 4%, partially offset by the impact of centers that have closed since the same period in the prior year, which reduced revenue by 2.5%, and by lower enrollment in our Australia centers, which reduced revenue by approximately 1%. Fluctuations in foreign currency exchange rates for our United Kingdom, Netherlands and Australia operations increased 2026 tuition revenue by approximately 2%, or $22.9 million in nine months ended September 30, 2026.
Management fees and operating subsidies from employer sponsors remained relatively consistent with the prior year.
Revenue generated by back-up care services in the nine months ended September 30, 2026 increased by $80.0 million, or 15%, when compared to the same period in 2025. Revenue growth in the back-up care segment was primarily attributable to increased utilization of center-based care, in-home care, and school-age programs by new and existing clients.
Revenue generated by educational advisory services in the nine months ended September 30, 2026 remained consistent with the same period in the prior year.
Cost of Services. Cost of services increased $131.0 million, or 8%, to $1.8 billion for the nine months ended September 30, 2026 when compared to the same period in 2025.
Cost of services in the full service center-based child care segment increased by $81.7 million, or 6%, to $1.4 billion in the nine months ended September 30, 2026 when compared to the same period in 2025. The increase in cost of services was primarily associated with increased personnel costs, an increase of 4% during the nine months ended September 30, 2026 compared to the same period in the prior year, related to average hourly wage rate increases of approximately 3%, higher benefits costs, including medical care expenses, and the impact of foreign currency exchange rates, offset by reductions in labor from net center closures since the prior year. Impairment losses of $12.8 million, related to long-lived assets, arising from center closures, changes in market assumptions and reduced operating performance at certain centers, and incremental expense of $23.4 million related to general liability reserves for certain safeguarding matters, also contributed to the increase in cost of services. Cost of services for the nine months ended September 30, 2025, included $2.4 million of net lease termination costs.
Cost of services in the back-up care segment increased $49.0 million, or 17%, to $334.3 million in the nine months ended September 30, 2026 when compared to the prior year. The increase in cost of services correlates to the increase in revenue and is primarily associated with provider fees to serve the increase in utilization levels over the prior year, and the continued investment in technology to support our customer user experience, service offerings, and marketing outreach.
Cost of services in the educational advisory services segment increased by $0.3 million, or 1%, to $45.4 million in the nine months ended September 30, 2026 when compared to the prior year, in line with the trend in revenue.
Gross Profit. Gross profit increased $2.0 million to $557.3 million for the nine months ended September 30, 2026 from $555.3 million for the same period in 2025 primarily due to incremental gross profit contributions from the back-up care segment, resulting from higher utilization of back-up care services, partially offset by impairment losses and incremental general liability expense in the full service center-based child care segment. Gross profit margin was 24% of revenue for the nine months ended September 30, 2026, a decrease of approximately 1% from the nine months ended September 30, 2025.
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Selling, General and Administrative Expenses. SGA increased $18.5 million, or 7%, to $299.9 million for the nine months ended September 30, 2026 from $281.4 million for the same period in 2025, due to higher personnel and technology costs, and impairment losses of $4.0 million related to long-lived assets in the full service center-based child care segment. SGA for the nine months ended September 30, 2025 included $1.3 million within the full service segment in expenses related to the August 2025 debt refinancing. SGA was 13% of revenue for the nine months ended September 30, 2026, which is consistent with the same period in 2025. Refer to Note 6, Credit Arrangements and Debt Obligations, for additional information on the August 2025 debt refinancing.
Goodwill Impairment Losses. During the nine months ended September 30, 2026, we recorded goodwill impairment of $296.3 million, primarily related to the completion of our annual goodwill impairment assessment as of October 1, 2026, which resulted in impairment losses of $290.0 million. We also recorded goodwill impairment of $6.3 million related to an immaterial foreign reporting unit specializing in tutoring services.
Amortization of Intangible Assets. Amortization expense on intangible assets of $3.5 million for the nine months ended September 30, 2026, decreased from $4.7 million for the nine months ended September 30, 2025 primarily due to certain intangible assets becoming fully amortized since the prior year, partially offset by increases from intangible assets acquired in relation to the acquisitions completed in 2025.
Income (Loss) from Operations. Income from operations decreased by $311.5 million, or 116%, to a loss from operations of $42.4 million for the nine months ended September 30, 2026 when compared to the same period in 2025. The following table summarizes income from operations and percentage of revenue for each of our segments for the nine months ended September 30, 2026 and 2025:
Nine Months Ended September 30,
2026 2025 Change 2026 vs 2025
(In thousands, except percentages)
Full service center-based child care $ (236,163) (14.6) % $ 90,284 5.8 % $ (326,447) (361.6) %
Back-up care 177,084 28.4 % 162,639 29.9 % 14,445 8.9 %
Educational advisory services 16,712 18.9 % 16,247 18.3 % 465 2.9 %
Income (loss) from operations $ (42,367) (1.8) % $ 269,170 12.2 % $ (311,537) (115.7) %
The change in income from operations was due to the following:
•Income from operations for the full service center-based child care segment decreased $326.4 million in the nine months ended September 30, 2026 when compared to the same period in 2025, primarily due to impairment losses of $313.1 million related to goodwill and long-lived assets, and $23.4 million of incremental general liability expense, partially offset by the net contribution of increased tuition revenue from annual tuition rate increases and increased personnel costs for the service delivery. In addition, income from operations for the nine months ended September 30, 2025 included $3.7 million of expenses related to net lease termination costs and the August 2025 debt refinancing.
•Income from operations for the back-up care segment increased $14.4 million, or 9%, in the nine months ended September 30, 2026 when compared to the same period in 2025, primarily due to incremental gross profit contributions from expanded utilization of back-up care services, partially offset by increases in technology and marketing investments to enhance the customer experience.
•Income from operations for the educational advisory services segment increased $0.5 million, or 3%, in the nine months ended September 30, 2026 when compared to the same period in 2025.
Net Interest Expense. Net interest expense was $43.2 million for the nine months ended September 30, 2026, an increase from net interest expense of $33.1 million for the same period in 2025, primarily due to higher average borrowings as well as higher interest rates applicable to our debt. The weighted average interest rate for the term loans and revolving credit facility was 4.91% for the nine months ended September 30, 2026 compared to 4.30% for the same period in 2025, inclusive of the effects of the cash flow hedges.
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Income Tax Expense. We recorded income tax expense of $70.3 million for the nine months ended September 30, 2026, compared to an income tax expense of $64.7 million during the nine months ended September 30, 2025, at an effective income tax rate of 27%. The effective tax rate for the nine months ended September 30, 2026 was not meaningful due to the impact of the non-deductible goodwill impairment and resulting pretax loss. The difference between the effective income tax rates as compared to the statutory income tax rates was primarily due to the non-deductible goodwill impairment, the impact of unbenefited losses and the effects of net excess tax benefit (shortfall tax expense) associated with the exercise or expiration of stock options and vesting of restricted stock. The effective income tax rate may fluctuate from quarter to quarter for various reasons, including changes to income (loss) before income tax, jurisdictional mix of income (loss) before income tax, unbenefited losses, valuation allowances, jurisdictional income tax rate changes, as well as discrete items such as non-deductible costs, the settlement of foreign, federal and state tax matters and the effects of excess tax benefit (shortfall tax expense) associated with the exercise or expiration of stock options and vesting of restricted stock.
During the nine months ended September 30, 2026, the net shortfall tax expense from stock-based compensation increased tax expense by $3.3 million. During the nine months ended September 30, 2025, the net excess tax benefit from stock-based compensation decreased tax expense by $1.2 million. For the nine months ended September 30, 2026 and 2025, prior to the inclusion of the excess tax benefit (shortfall tax expense), other discrete items and unbenefited losses in certain foreign jurisdictions, the effective tax rate approximated 28% and 27%, respectively.
Adjusted EBITDA and Adjusted Income from Operations. Adjusted EBITDA and adjusted income from operations increased $25.4 million, or 7%, and $21.3 million, or 8%, respectively, for the nine months ended September 30, 2026 over the comparable period in 2025, primarily due to the incremental contributions from the back-up care segment resulting from increased utilization and from the full service child-care segment resulting from improved operating leverage.
Adjusted Net Income. Adjusted net income increased $2.1 million, or 1%, for the nine months ended September 30, 2026 when compared to the same period in 2025, primarily due to the increase in adjusted income from operations noted above, partially offset by higher interest expense and an increase to the adjusted effective tax rate.
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Non-GAAP Financial Measures and Reconciliation
In our quarterly and annual reports, earnings press releases and conference calls, we discuss key financial measures that are not calculated in accordance with GAAP to supplement our consolidated financial statements presented on a GAAP basis. These non-GAAP financial measures of adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are reconciled from their most directly comparable financial measures determined in accordance with GAAP as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
(In thousands, except share data)
Net income (loss) $ (230,690) $ 78,552 $ (155,947) $ 171,376
Interest expense - net 17,195 12,212 43,240 33,118
Income tax expense 26,362 30,082 70,340 64,676
Depreciation 24,090 22,569 69,560 63,910
Amortization of intangible assets 1,135 1,477 3,467 4,745
EBITDA (161,908) 144,892 30,660 337,825
Additional adjustments:
Goodwill impairment (a)
290,000 - 296,275 -
Other costs (b)
27,359 3,650 40,222 3,650
Stock-based compensation expense (c)
7,817 7,526 22,273 22,512
Total adjustments 325,176 11,176 358,770 26,162
Adjusted EBITDA $ 163,268 $ 156,068 $ 389,430 $ 363,987
Income (loss) from operations $ (187,133) $ 120,846 $ (42,367) $ 269,170
Goodwill impairment (a)
290,000 - 296,275 -
Other costs (b)
27,359 3,650 40,222 3,650
Adjusted income from operations $ 130,226 $ 124,496 $ 294,130 $ 272,820
Net income (loss) $ (230,690) $ 78,552 $ (155,947) $ 171,376
Income tax expense 26,362 30,082 70,340 64,676
Income (loss) before income tax (204,328) 108,634 (85,607) 236,052
Amortization of intangible assets 1,135 1,477 3,467 4,745
Goodwill impairment (a)
290,000 - 296,275 -
Other costs (b)
27,359 3,650 40,222 3,650
Stock-based compensation expense (c)
7,817 7,526 22,273 22,512
Other interest costs (d)
- 2,186 - 2,737
Adjusted income before income tax 121,983 123,473 276,630 269,696
Adjusted income tax expense (e)
(34,460) (33,338) (78,152) (73,338)
Adjusted net income $ 87,523 $ 90,135 $ 198,478 $ 196,358
Weighted average common shares outstanding - diluted (f)
48,709,897 57,377,773 51,723,713 57,680,543
Diluted adjusted earnings per common share (g)
$ 1.80 $ 1.57 $ 3.84 $ 3.40
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(a)Goodwill impairment consists of non-cash write-downs of goodwill within the full service center-based child care segment resulting from revised long-term cash flow projections primarily related to our operations in Australia. For the three and nine months ended September 30, 2026, goodwill impairment totaled $290.0 million and $296.3 million, respectively.
(b)Other costs consist of long-lived asset impairment charges related to operating lease right-of-use assets, fixed assets, and intangible assets arising from center closures, changes in market assumptions and reduced operating performance at certain centers, and incremental expense related to general liability reserves for certain safeguarding matters. For the three months ended September 30, 2026, a long-lived asset impairment charge of $4.0 million was recorded to selling, general and administrative expenses. For the nine months ended September 30, 2026, long-lived asset impairment charges totaled $16.8 million, of which $12.8 million was recorded to cost of services and $4.0 million was recorded to selling, general and administrative expenses. For the three and nine months ended September 30, 2026, incremental expense of $23.4 million related to general liability reserves for certain safeguarding matters was recorded to cost of services. Other costs in the three and nine months ended September 30, 2025 consist of $1.3 million related to the August 2025 debt refinancing recorded to selling, general and administrative expenses and net lease termination costs of $2.4 million recorded to cost of services.
(c)Stock-based compensation expense represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation.
(d)Other interest costs in the three months ended September 30, 2025 consist of $1.6 million in interest incurred related to a pre-acquisition obligation, as well as $0.6 million related to the August 2025 debt refinancing, which were recorded to interest expense. Other interest costs in the nine months ended September 30, 2025 consist of $1.6 million in interest incurred related to a pre-acquisition obligation, as well as $1.1 million of debt refinancing costs related to the April 2025 and August 2025 debt refinancings, which were recorded to interest expense. Refer to Note 6, Credit Arrangements and Debt Obligations, for additional information on the April 2025 and August 2025 debt refinancings.
(e)Adjusted income tax expense represents income tax expense calculated on adjusted income before income tax at an effective tax rate of approximately 28% for both the three and nine months ended September 30, 2026, and of approximately 27% for both the three and nine months ended September 30, 2025. The jurisdictional mix of the expected adjusted income before income tax for the full year will affect the estimated effective tax rate for the year.
(f)For the three and nine months ended September 30, 2026, the diluted weighted average common shares outstanding included the effect of stock-based awards and other potentially dilutive securities, as adjusted net income was positive and the inclusion of such securities was dilutive.
(g)The sum of the quarterly earnings per share amounts does not equal the year-to-date earnings per share amounts due to the independent calculation of the weighted-average number of common shares outstanding for each discrete period, as well as rounding. This variance is primarily due to the seasonal fluctuations in our earnings and changes in the weighted-average shares outstanding, including the cumulating effect of treasury repurchases during individual quarters.
Adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are financial measures that are not calculated in accordance with GAAP (collectively referred to as "non-GAAP financial measures"), and the use of the terms adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. We believe the non-GAAP financial measures provide investors with useful information with respect to our historical operations. We present the non-GAAP financial measures as supplemental performance measures because we believe they facilitate a comparative assessment of our operating performance relative to our performance based on our results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted EBITDA allows for an assessment of our operating performance and of our ability to service or incur indebtedness without the effect of non-cash charges, such as depreciation, amortization, and stock-based compensation expense, and non-recurring costs, as applicable, such as debt refinancing costs, impairments, lease termination costs and transaction costs. In addition, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share allow us to assess our performance without the impact of the specifically identified items that we believe do not directly reflect our core operations. These non-GAAP financial measures also function as key performance indicators used to evaluate our operating performance internally, and they are used in connection with the determination of incentive compensation for management, including executive officers. Adjusted EBITDA is also used in connection with the determination of certain ratio requirements under our credit agreement.
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Adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are not measurements of our financial performance under GAAP and should not be considered in isolation or as an alternative to income before taxes, net income, diluted earnings per common share, net cash provided by (used in) operating, investing or financing activities or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, our non-GAAP financial measures should be considered together with our consolidated financial statements, which are prepared in accordance with GAAP and included in Part I, Item 1 of this Quarterly Report on Form 10-Q. We understand that although adjusted EBITDA, adjusted income from operations, adjusted net income and diluted adjusted earnings per common share are frequently used by securities analysts, lenders and others in their evaluation of companies, they have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
•adjusted EBITDA, adjusted income from operations and adjusted net income do not fully reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
•adjusted EBITDA, adjusted income from operations and adjusted net income do not reflect changes in, or cash requirements for, our working capital needs;
•adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA, adjusted income from operations and adjusted net income do not reflect any cash requirements for such replacements.
Because of these limitations, adjusted EBITDA, adjusted income from operations and adjusted net income should not be considered as discretionary cash available to us to reinvest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
Liquidity and Capital Resources
Our primary cash requirements are for the ongoing operations of our existing early education and child care centers, back-up care, educational advisory services, the addition of new centers through development or acquisitions, and debt financing obligations. Our primary sources of liquidity are our existing cash, cash flows from operations, and borrowings available under our $1.0 billion multi-currency revolving credit facility ("revolving credit facility"). We had $119.2 million in cash ($127.0 million including restricted cash) as of September 30, 2026, of which $44.2 million was held in foreign jurisdictions, compared to $140.1 million in cash ($143.2 million including restricted cash) as of December 31, 2025, of which $66.3 million was held in foreign jurisdictions. Operations outside of North America accounted for 30% and 29% of our consolidated revenue in the nine months ended September 30, 2026 and 2025, respectively. The net impact on our liquidity from changes in foreign currency exchange rates was not material for the nine months ended September 30, 2026 and 2025. While we expect to be impacted by fluctuations in the foreign currency exchange rates throughout the remainder of the year, we do not currently expect that the effects of changes in foreign currency exchange rates will have a material net impact on our liquidity and capital resources for the remainder of 2026.
Our revolving credit facility is part of our senior secured credit facilities. On June 1, 2026, we amended our existing senior secured credit facilities to, among other changes, issue a $375 million new term loan A facility as well as increase the borrowing capacity of our revolving credit facility from $900 million to $1.0 billion. On the closing date, we used the proceeds of the term loan A, together with cash on hand, to repay outstanding borrowings under the revolving credit facility, including all outstanding interest and related fees and expenses. As of September 30, 2026 and December 31, 2025, $436.0 million and $383.7 million, respectively, of the revolving credit facility was available for borrowing.
We had a working capital deficit of $547.5 million and $462.2 million as of September 30, 2026 and December 31, 2025, respectively. Our working capital deficit has primarily arisen from using cash to make long-term investments in fixed assets and acquisitions, from share repurchases, and short-term borrowings on our long-term debt.
As of September 30, 2026, we had $747.0 million in lease liabilities, $111.3 million of which is short-term in nature. Refer to Note 3, Leases, to our condensed consolidated financial statements for additional information on leases, including the maturity of the contractual obligations related to our lease liabilities.
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Effective March 9, 2026, the board of directors authorized a new share repurchase program under which up to an aggregate of $600 million of our outstanding common stock may be repurchased. The share repurchase program has no expiration date and canceled and replaced the prior $500 million share repurchase authorization announced in June 2025, of which $127.6 million remained available thereunder. During the nine months ended September 30, 2026, we repurchased approximately 7.7 million shares for $557.7 million under the repurchase program (resulting in a $5.4 million excise tax liability). During the nine months ended September 30, 2025, we repurchased approximately 0.9 million shares for $106.0 million under the repurchase program (resulting in a $0.7 million excise tax liability). All repurchased shares have been retired and, as of September 30, 2026, $244.3 million remained available for future repurchases.
We believe that funds provided by operations, our existing cash balances and borrowings available under our revolving credit facility will be adequate to fund all obligations and liquidity requirements for at least the next 12 months. Subject to market conditions, we regularly evaluate opportunities with respect to our capital structure and may choose to raise additional funds at any time through debt financing arrangements or potential refinancing of our outstanding indebtedness, which may or may not be needed for additional working capital, capital expenditures, share repurchases, or other strategic investments. Additionally, if we were to experience disruption from events not in our control or if we were to undertake any significant acquisitions or make investments in the purchase of facilities for new or existing centers, we could require financing beyond our existing cash and borrowing capacity, and it could be necessary for us to obtain additional debt or equity financing. We may not be able to obtain such financing or refinancing on reasonable terms, or at all.
Cash Flows Nine Months Ended September 30,
2026 2025
(In thousands)
Net cash provided by operating activities $ 208,075 $ 202,792
Net cash used in investing activities $ (71,800) $ (63,486)
Net cash used in financing activities $ (150,891) $ (142,838)
Cash, cash equivalents and restricted cash - beginning of period $ 143,158 $ 123,715
Cash, cash equivalents and restricted cash - end of period $ 127,005 $ 125,969
Cash Provided by Operating Activities
Cash provided by operating activities was $208.1 million for the nine months ended September 30, 2026, compared to $202.8 million for the same period in 2025. The increase in cash provided by operations primarily relates to changes in working capital.
Cash Used in Investing Activities
Cash used in investing activities was $71.8 million for the nine months ended September 30, 2026 compared to $63.5 million for the same period in 2025. The increase in cash used in investing activities primarily relates to an increase in net purchases of fixed assets for maintenance and refurbishments in our existing centers, technology, safeguarding investments and new child care centers, from $58.9 million in the nine months ended September 30, 2025 to $69.4 million in the nine months ended September 30, 2026.
Additionally, we did not invest in any acquisitions during the nine months ended September 30, 2026, compared to investing $5.1 million in acquisitions during the same period in 2025.
Cash Used in Financing Activities
Cash used in financing activities was $150.9 million for the nine months ended September 30, 2026 compared to $142.8 million for the same period in 2025. Significant financing activities in the nine months ended September 30, 2026 included an increase of $454.9 million in share repurchases, or $559.6 million, compared to repurchases of $104.7 million during the same period in 2025. Offsetting this increase were net borrowings under the revolving credit facility as well as the issuance of the term loan A facility, together providing $417.3 million of additional borrowings during the nine months ended September 30, 2026, compared to net debt payments of $31.7 million during the same period in 2025, a net change of $449.0 million.
Additionally, proceeds received from the exercise of stock options were $11.8 million in the nine months ended September 30, 2025, compared to no proceeds in the nine months ended September 30, 2026. Taxes paid related to the net share settlement of stock options and restricted stock decreased to $8.2 million in the nine months ended September 30, 2026, compared to $15.2 million in the same period in 2025.
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Debt
Our senior secured credit facilities consist of a term loan B facility ("term loan B") and a term loan A facility ("term loan A" and, together with the term loan B, the "term loans"), as well as a $1.0 billion multi-currency revolving credit facility ("revolving credit facility").
Long-term debt obligations were as follows:
September 30, 2026 December 31, 2025
(In thousands)
Term loan B $ 450,000 $ 450,000
Term loan A 372,656 -
Revolving credit facility 543,087 499,552
Deferred financing costs and original issue discount (3,389) (2,386)
Total debt 1,362,354 947,166
Less current portion of term loans (9,375) -
Less current portion of revolving credit facility (283,087) (199,552)
Long-term debt $ 1,069,892 $ 747,614
The term loan B matures on August 21, 2032 and as a result of voluntary prepayments totaling $133.5 million in 2025, the remaining principal balance of $450 million is due at maturity.
On June 1, 2026, the Company amended its existing senior secured credit facilities to, among other changes, issue a $375 million new term loan A facility. The term loan A matures on April 17, 2030 and requires scheduled quarterly amortization payments equal to 2.5% per annum of the original aggregate principal amount of the term loan A for the period commencing September 30, 2026 through and including June 30, 2028, increasing to 5.0% per annum thereafter through March 30, 2030. The remaining principal balance is due at maturity.
In conjunction with the June 1, 2026 amendment, the Company increased the borrowing capacity of its revolving credit commitments under the revolving credit facility from $900 million to $1.0 billion, which matures on April 17, 2030. As of September 30, 2026, borrowings outstanding on the revolving credit facility were $543.1 million and letters of credit outstanding were $20.2 million, with $436.0 million available for borrowing. As of December 31, 2025, borrowings outstanding on the revolving credit facility were $496.5 million and letters of credit outstanding were $20.2 million, with $383.7 million available for borrowing. Additionally, a AU$9.4 million (USD$6.5 million) uncommitted working capital credit facility is available in Australia for short-term borrowing purposes. As of September 30, 2026, there were no borrowings outstanding under this facility, and as of December 31, 2025, there was AU$4.5 million (USD$3.0 million) of borrowings outstanding.
Borrowings under the senior secured credit facilities are subject to variable interest. We mitigate our interest rate exposure with interest rate cap agreements. In December 2021, we entered into interest rate cap agreements with a total notional value of $900 million. Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expired on October 31, 2025, provided us with interest rate protection in the event the one-month term SOFR rate increased above 2.4%. Interest rate cap agreements for $300 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2026, provide us with interest rate protection in the event the one-month term SOFR rate increases above 2.9%.
In March and July 2025, we entered into additional interest rate cap agreements with a total notional value of $150 million and $100 million, respectively, designated and accounted for as cash flow hedges from inception. The March and July 2025 interest rate cap agreements, both of which had forward starting effective dates of October 31, 2025, provide us with interest rate protection in the event the one-month term SOFR rate increases above 3.5% and 3.0%, respectively, and expire on October 31, 2027 and October 31, 2026, respectively.
In February and October 2026, the Company entered into additional interest rate cap agreements with a total notional value of $150 million and $100 million, respectively, designated and accounted for as a cash flow hedge from inception. The February and October 2026 interest rate cap agreements, both of which have a forward starting effective date of October 30, 2026, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.75% and 3.5%, respectively, and expire on October 31, 2027 and October 31, 2028, respectively.
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The blended weighted average interest rate for the term loans and revolving credit facility was 4.91% and 4.30% for the nine months ended September 30, 2026 and 2025, respectively, including the impact of the cash flow hedges. Based on the current interest rate projections, we estimate that our overall weighted average interest rate will be in the range of 5.5% to 5.75% for the remainder of 2026, inclusive of the effects of the cash flow hedges.
The term loan A and the revolving credit facility require Bright Horizons Family Solutions LLC, the borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio. A breach of this covenant is subject to certain equity cure rights. The credit agreement governing the senior secured credit facilities contains certain customary affirmative covenants and events of default. We were in compliance with our financial covenant at September 30, 2026. Refer to Note 6, Credit Arrangements and Debt Obligations, to our condensed consolidated financial statements for additional information on our debt and credit arrangements, future principal payments of long-term debt, and covenant requirements.
Critical Accounting Policies
For a discussion of our "Critical Accounting Policies," refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies since December 31, 2025.
Bright Horizons Family Solutions Inc. published this content on October 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 30, 2026 at 20:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]