Bright Horizons Family Solutions Inc. (BFAM) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen, and welcome to the Bright Horizons Family Solutions First Quarter 2021 Earnings Release Conference Call. Please note today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Flanagan, Senior Director of Investor Relations. Please go ahead, sir. Michael Flanagan: Thanks, Holly, and hello to everyone on the call. With me here is our CEO, Stephen Kramer; and our CFO, Elizabeth Boland. I'll turn the call over to Stephen after covering a few administrative matters. Today's call is being webcast and a recording will be available under the Investor Relations section of our website, brighthorizons.com. Stephen Kramer: Thanks, Mike. Hello to everyone on the call, and thank you for joining us this evening. I hope that you and your families are healthy and keeping safe. I'll start tonight with a recap of our first quarter results and provide an update on our current operations. Elizabeth will follow with a more detailed review of the numbers before we open it up for your questions. I'm pleased with our solid start to the year and pace of the continuing recovery in our business. For the first quarter, we delivered revenue of $391 million and adjusted EPS of $0.23 per share. In our full-service segment, we added seven centers, including new client centers for Regeneron, Horizon Therapeutics, the University of Maryland and Memorial Sloan Kettering as well as an organic center in the Netherlands and two centers acquired on the West Coast. We also made good progress in re-ramping center enrollments with the positive enrollment trends we saw in Q4 continuing through the first quarter. Our backup and Ed Advisory segments expanded their client bases and breadth of services, delivering revenue growth in the quarter of 3% and 16%, respectively, with recent new client launches for General Motors, ConocoPhillips, Dollar Tree, Freddie Mac and Shopify. Overall, as we approach the midpoint of the year, I remain encouraged by the consistent pace and trajectory of our recovery in 2021. We ended the quarter with 1,015 centers, roughly 900 of which are open. In the U.S., we reopened six temporarily closed centers in addition to the new centers added in the quarter. Occupancy levels in the open centers continued to improve month-over-month in the first quarter, tracking nicely to our expectations as families return to our centers. Importantly, several of our more heavily concentrated markets, which were also later to reopen, made up solid ground this quarter. Reducing infection rates coupled with expanding vaccine coverage and a relaxation of COVID restrictions have contributed to the increasing occupancy and the pace of recovery in all regions. Elizabeth Boland: Thank you, Stephen. Appreciate that and hello to everybody on the call. Thanks for joining us today. Let me again recap the quarter results and provide some thoughts on the rest of 2021. For the first quarter, overall revenue contracted 23% to $391 million. Adjusted operating income totaled $14 million or 4% of revenue, and adjusted EBITDA was $46 million or 12% of revenue. We ended March with 902 out of 1,015 centers open with seven new centers added in the quarter and six centers permanently closed. We also have 113 centers that are temporarily closed, including the reclosures related to the short-term lockdowns in the U.K. Operator: Our first question today will come from Andrew Steinerman with JP Morgan. Andrew Steinerman: Stephen, I definitely heard your comments about the American Families Plan, which I really know is still just a proposal at this point. And I surely quote your point that the details really past the fact sheet that the White House put out really are not available. But my question to you is, from what we know now, is the industry's experience in Georgia with Universal Pre-K a fair analogy to the way that this might move forward? In other words, the industry adjusts and can serve in this type of role profitably? Stephen Kramer: Yes. A great question, Andrew. And again, I'll underscore the part that says that there is still very limited detail as it relates to this plan. On the other hand, obviously, we have and will continue to spend a lot of time making sure that we understand and prepare for any possible inclusion of Bright Horizons in the work of serving. What I would say first and foremost, though, is what is really great about the American Families Plan is it highlights what we have been certainly trying to highlight for employers for the last 35 years, which is the importance of families having access to high-quality affordable care. And the idea that in the absence of that, parents and working parents end up dropping out of the workforce, especially women. And certainly, as it relates to the long-term benefits of child care, I think the American Families Plan does a great job of outlining how it leads to increased wages, improved health, reduced crime, et cetera. I would say that when we look at the plan as described and again in limited detail, obviously, there is an allocation of funding for free universal preschool for three- and four-year-olds. I think that it is also fairly clear that there is going to be a prioritization of high-need areas. And so when you reference Georgia as an example as a state who has leaned into this, I would say that, that is a pretty good distinction between how Georgia has approached it and how, on the national stage, they may be contemplating it. And certainly, while $200 billion seems like a breathtaking amount, when you think about that over 10 years and you think about the number of children who are low and middle-income families, you realize that the ability for this plan to truly provide for all children seems quite limited. So when you think about the Georgia plan or you think about the work that we do, for example, Andrew, in the U.K., where they have 30 hours of free child care subsidized by the government, where providers like Bright Horizons deliver on that care in a way that is profitable and does work economically and for families, certainly, that is a possibility. But again, I think as we look at the plan, we recognize that there is some pretty specific language around focusing on the most hard-pressed working families for those families that are earning 1.5x their state medium income or less. So I do think that at least some of the basic tenants do look to be different from what we experienced in the U.K. or even as you referenced in Georgia. Andrew Steinerman: I understand how you answered that. And that is helpful. Can I just try one more clarification, same point?. So the proposal really is only about three- and four-year-olds. And I know, obviously, that most typical entry point and the bigger population for full-service care Bright Horizons is infants and toddlers. Would you be willing to give us a sense of your mix of enrollments for three- and four-year-olds for full service? Elizabeth Boland: Yes. So Andrew, I think as you may know, the general mix in the center is 40% or so infant toddler and 60% and in the three- to five-year-olds, and it can vary if you're running a kindergarten classroom. Many employers have maybe closer to a 50-50 mix. But in general, it's about 40-60, and we tend to have demand in the infant and toddler ages because there is more limited supply in the market for those spaces. So that's the capacity, the enrollment may be skewed to more like 50-50 in general. Operator: Next, we'll hear from Manav Patnaik with Barclays. Manav Patnaik: Stephen, I know you've been doing all these parent surveys and employee surveys. And I guess I was just hoping you give us a little bit more of the latest thoughts in terms of the -- kind of -- what are you hearing in terms of the on-site care, if you feel like you need to pivot a little bit into more lease/consortium or retail centers. Just curious what the latest thoughts there are? Stephen Kramer: Yes. Thanks for the question, Manav. I think what we're hearing, and I'll start with the employer sentiment first. What we're hearing from employers is sort of a steady shift towards an expectation that employees will come back to the office. So I think you most recently heard this week from Goldman Sachs and JPMorgan Chase and others that their expectation is that their employees will be coming back to their office locations. And so I think that some of the earlier rhetoric that was out was sort of this idea that offices were dead, and people are not going to be returning to the offices. But I think that, that has shifted quite a bit. And I think we're starting to see our clients and the broader employer populations looking to get their employees back to the office in sort of the June through the end of the year time frame. So from an employer perspective, I think there is a growing desire and interest to get employees back to the work site. I think that from their perspective, they are, again, increasingly seeing their child care center as a real attraction tool to have working parents come back and that support be something that is important as a consideration to having them come back to the office. I would say from an employee's perspective, I think they are recognizing that while flexible work arrangements may be more available than they were pre-pandemic, that they are not going to be either as pervasive or as liberal as they may have once thought. And so the surveys that we continue to do, hear more and more about near office solutions being an important component of their care arrangements. It's not to say that we aren't thinking broadly about what footprint we need, both near the office and in communities. But suffice it to say, we feel really good about where the locations are of our centers, and we'll continue to build out in areas that we need additional capacity. But again, feel good about where our location is vis-à-vis where we think the demand is going to be. Manav Patnaik: Okay. Got it. That's super helpful. And then just these new services, virtual tutoring, camps, et cetera, I think that makes sense. Is this all because of the Sittercity acquisition? And I guess you just hired the care.com Co-founder to run that business. I'm just curious what kind of changes we should expect. Is there any kind of mass scaling plans going on here? Just curious. Stephen Kramer: Yes. I mean look, I think that, first and foremost, we're trying to be responsive to the needs that employees have and that their employers want to support. So through our client advisory board interaction as well as through the interactions we have with employees as well as just our knowledge of the environment for school and support, we are very quickly mobilizing additional care types. And so we recognize, for example, this summer that a lot of families' traditional camp arrangements have been disrupted. So the strategic acquisition of Steve & Kate's as well as additional partnerships with other camp providers, we think are going to position us well vis-à-vis the disruptions that families are going to face in that area. In addition, as I mentioned, on the virtual tutoring side, that was really a recognition and an outcry from employees who recognize that through both remote learning earlier in the year through to hybrid learning through the year that academic progress for many, many children has been stunted. And they want to make sure that their children are well prepared going into next fall and beyond. And so employers have been very cooperative and, in fact, leaning into the idea of supporting this area for their employees. Sittercity, obviously, again, a strategic acquisition that we made, was really timely, but really long-term in nature as well, which is to say, we believe that as we continue to address more and more of the care needs of families, we become that destination for all care needs. Likewise, as we think about our employer clients, they continue to be more and more interested in supporting their employees in a broader way. And yes, we're very excited about the hire that we made for the CEO of Sittercity. She was one of the cofounders of Care.com. She has a terrific background in this area. But again, that she represents one of many talented individuals that is attracted to Bright Horizons to lead our different areas of the business. Operator: And our next question will come from George Tong with Goldman Sachs. Keen Fai Tong: You mentioned that utilization rates for your full-service centers are now 45% to 55% and tracking towards pre-COVID levels. I was wondering if you could provide some additional context and perspectives around that. So how the utilization rates performed over the course of the quarter? And then how you expect them to evolve over the course of the year? And just confirm that by year-end, you would expect utilization rates to return to pre-COVID levels? Elizabeth Boland: Sure. So I think as we tried to infer in the comments, the performance has been really quite steady in terms of the recovery of the enrollment. Where you may look back in our history and see some more seasonality, we are expecting to continue to build on where we are growing enrollment now through the summer, where it would often be sort of a time of churn as older children go into elementary school and you're backfilling younger age groups. But because we are in more of a rebuild mode, we would expect to see that enrollment continue to progress as we're seeing both the penetration of all of the vaccine distribution continue to move along as people begin to reorient toward their -- as Stephen was just talking about sort of dynamic work arrangements, and their summer plans are a little bit different even this year than they have been in the past. So to say we are confirming -- our expectation is that we will be able to be back to near the pre-COVID levels by the end of the year to say we're confirming that. Obviously, it's part of our stance at the moment that it's too dynamic at the moment to be giving that detailed guidance. We have a belief based on the progression that we've had that, that is certainly the path that we're on, and that's what we're aiming for with all of our efforts toward not only welcoming back parents who have been in the center before, but welcoming new families and introducing them to the Bright Horizons curriculum and the terrific experience that their children can have. So it is something that we are not only focused on in the centers. One other thing, George, that not only centers that are open now, but we've learned a lot through that process. And as we do continue to reopen centers that have been temporarily closed, that we will be also working on getting those ramped up. And some of those, if they're opening in the last half of the year-end the fall and on, those obviously won't be back to pre-COVID levels by the end of the year. Keen Fai Tong: Got it. That's very helpful. And I know you mentioned that your surveys and conversations with employers suggest that the return to office movement is pacing favorably. In the scenario, I guess, that work-from-home does become more permanent or structural in nature, could you talk about maybe the strategies that you have to bolster or shore up utilization rates in case people return to the office fewer days of the week post-COVID than pre-COVID? In other words, how can you adapt if the reality ends up being different in terms of work-from-home than before? Stephen Kramer: Yes. It's a great question, thank you. So essentially, we have been preparing for that possibility. And my remarks was much more about what we're seeing and feeling. And in terms of preparation and sort of game playing for that, a few things. So the first is, it's important to remember that on our -- in our on-site centers, generally, we had waitlists because we typically do not build centers with our clients that can support the full workforce and demand that is expected within that location. And so our expectation is that even in a scenario where people come back less than full time to the office and therefore, want to use the center less than full time, we will have the ability simply to serve more families in those locations as opposed to running at occupancy rates that are lower than what we had seen previously. So that's sort of, first and foremost, something structural about the way we build our centers with our corporate partners. I'd say the second is, we've been working hard to think about ways that we can create a seamless experience across multiple centers for working families. So having the option of an on-site center and then utilizing one of our community-facing centers that is typically closer to home is something that we're working hard on. And that is a combination of how we structure the experience for the parents so that they really feel like it's a seamless experience between two centers as opposed to unique experiences in one center for part of the week and another different experience in a second part of the week. So we're working hard in both ways. One is to make sure that we're able to serve more families in the on-site locations. And the second is ultimately trying to create that seamless experience across multiple centers for the same family, utilizing both our on-site as well as our community-facing centers. Operator: Our next question will come from Hamzah Mazari with Jefferies. Hamzah Mazari: My first question is on the backup business. It's pretty clear margins will sort of ramp back down as your mix normalizes. But could you give maybe investors comfort that this backup business from a revenue perspective, not margins, has not peaked? And what we mean by that is just sort of walk us through the dynamics of new client wins, clients adding more days, maybe some of those days are sticky, maybe they're not, maybe they cut days post-COVID. Just help us understand from a revenue base perspective what gets you comfortable the business hasn't peaked and let's leave margins aside, obviously? Stephen Kramer: Yes. So I think from a revenue growth perspective, I'd say a few things. One is, as you'll know, we have added a number of new clients to the overall business. And so we think about the long-term opportunity first and foremost, based on the continuation of new clients being added into the client base and the strong retention that we have associated with our existing clients. So the client base itself continues to go from strength-to-strength. And I think that becomes a real confidence piece as it relates to what the future of the business is and how important employers see it as part of their overall proposition. The second is, as we continue to add different use cases to the total portfolio of how an employee can utilize the service, we believe that is going to both attract new users to the service as well as increase the average number of uses that a particular employee will use. And then finally, we're seeing good support for employers to keep the use banks at least at the level they have been historically. And in some cases, grow the use bank, recognizing that as more use cases are introduced that in certain circumstances, employees, especially in an environment like we're in, may need access to more days rather than the standard and/or fewer. So I think taken together, we feel really good about where the backup business is and where it's headed and need to, again, continue to see the environment stabilize from a health perspective, so that there is continued confidence in using our traditional care arrangements. And obviously, in this past quarter, we saw an increased or elevated use of REIT self-sourced reimbursed care, which again comes at a lower revenue value per use and therefore, is reflected in the revenue growth that we experienced. But again, I think it's not anything that we would expect would be something over the long term. Elizabeth Boland: If I can add one other thing to that, Hamzah, to the question of comfort on who's being served. I think the variety of services to and the -- is that we are able to serve children of different ages and being able to have not only different services that might touch different parents in an employer who may otherwise not have been a backup user candidate, offers us the opportunity to go deeper with the client on breadth of users, age of children, types of care, and that's another way that we can gain additional penetration if that wasn't already coming out in Stephen's remarks. Hamzah Mazari: That's great. The other question, we had was just -- again, just coming back to universal Pre-K -- and thanks for all the detail. But just to simplify and dumb it down is are you not impacted, even though you have a bunch of sort of three- and four-year-olds because there's going to be -- you expect there to be an income threshold in your customer base as high wage earners. And oh by the way, there's not enough capacity in the system to take on 5 million more kids. So you view this as a net neutral or maybe even a positive to you if you can get involved in creating capacity for the system. Is that fair just in simple terms? Stephen Kramer: Yes. I think in -- so first, again, limited detail. So we don't want to get over our skis in terms of opining on what might be. But I think what you've outlined is a fair characterization from what we know, which is if there are income limits, right, to lower and middle-income families, we know that those who we serve tend to be higher income and therefore, likely would be outside of the scope of the program. I would say in addition to that, in our experience, for working parents, dual-income working parents, who need full day, full year, Universal Pre-K generally does not fit as a service to the needs that they have. Elizabeth Boland: Incomplete solution. Stephen Kramer: It's incomplete, whereas what we provide to three- and four-year-olds is full day, full year, which really does map with their traditional care needs. And then the final piece is that in the event where income is not a factor and where the government provides rates that are sustainable, then we, of course, would be a participant in providing the preschool education and believe that we would be a provider of choice for families. Where some of the costs were offset by the government, they would have the ability to step into a high-quality solution offered through Bright Horizons. Operator: And our next question will come from Gary Bisbee with Bank of America Securities. Gary Bisbee: If I could start off with one on backup. Can you just tell us in the quarter, how much was the number of days of usage up year-over-year? I understand you have a mix issue, right, that makes the revenue growth look weak, but the margin's strong. But what's the underlying volume growth trending at? Elizabeth Boland: So we -- you're a little bit faint here, Gary, but I think your question was what is the underlying use metrics for the first quarter. So we haven't ever quantified exactly what our backup use is. It is, I think, the feature of the traditional use in-centers and in-home in our network partners has not yet recovered to last year's level. So the substitution for that has been more reimbursed care, but it comes at a fraction of the revenue. So from a -- the standpoint of overall use, we certainly are seeing a trend toward higher use levels based on the volume of clients, but we haven't quantified it. Gary Bisbee: I mean what I'm trying to get at is what's the business growing outside of this mix? Is there any way to frame that? I guess I asked it on the third quarter call if you thought there was a case that the addressable market for the business could grow on the other side of the pandemic because more parents potentially within an employer have used the service and had a good experience. And you've talked about having had strong client growth. Is -- if -- not understanding you won't give the volume number, is it safe to say the trajectory of over, like, let's say, now versus 2019, taken last year's bump in the fallout of it, is it faster than what the trajectory had been in a couple of years prior to the pandemic? Elizabeth Boland: Yes. So that is a way that we are thinking about it as well. So if we look back to that time frame and how is the growth against that, and we are -- I think that the noise that's in there is that many clients have a -- they have a basket of use in total in their arrangement. And then the individual employees have certain limits to what they can use. And so to the extent that they are utilizing reimbursed care, it can -- until you're at the limit of those baskets and buying up above that, it can be disordered to just look at that one figure. But I think from a velocity of where we see the numbers of clients, the numbers of eligible employees they have, and the opportunity for penetration at the levels that we are seeing -- employees who are using care at those levels applied to the number of clients that we have in getting the marketing effort out to that population and having them begin -- the newer clients begin to season into the mix. And existing clients expand and return to the level of traditional care. That's where we see the underlying growth opportunity. And that's why when we look to the back half of the year, we talk about the growth at the levels that we see. So we're coming off of obviously a noisy number of quarters. And so certainly take the point of if we look back a couple of years, is the growth coming off that? It is. But we're not quite there yet either because of the sort of maybe pause or reluctance of parents to fully reembrace the kinds of traditional center care, and that's where we feel confident that we can be a real solution for them over time. Gary Bisbee: Great. And then just one on the full service center business. When we talk to people who run more retail or community chains, our sense is utilization is 90%, in some cases, pre-pandemic levels. And I understand the center mix at the corporates leads years to be a lot lower. But how are you thinking about the risk that parents move their kids to a local center and might not bring them back to your center? I asked you this last quarter, but do you have any updated information, survey data, what you're seeing as you reopen, just to support the fact that you think you'll get a lot of them back? And maybe as part two of that, how many of the centers in the U. S. today are community, accept community enrollment versus -- or purely corporate? Stephen Kramer: So I'll take the first part of that question. So first of all, our data is not suggestive of what you just outlined. The market data that is available in the sort of checks that we've made in the market are suggestive that community welcoming centers across the country, especially in the markets in which we operate, which is where we tend to focus our research, are very much in line with where we are. And so that percentage is in line. What I would say is that it is possible that when others are suggesting something very different, they are talking about staffed rooms, for example, as opposed to available capacity within a center. And so again, I think some of those numbers can get very misleading, but I have a great degree of confidence that where we are running and where the market is running is quite commensurate. I'd say the second point that I would make is that we have done very well attracting our previously enrolled families back to the center, and that has tracked consistently over time as our centers have reopened. And so I think that we enjoy a market position where working parents truly appreciate the value of a Bright Horizons experience for their child, whether that be at the work site or whether that be in one of our lease/consortium models. And so we don't have concern that families are leaking to other providers. Instead, we believe that our families who are previously enrolled have stayed with us. And likewise, we are garnering more than our fair share as it relates to new families, new infants, for example, but new families in general that are coming and joining child care arrangements. Elizabeth Boland: Yes. In the U.S., Gary, about 2/3 of our centers are community facing. So they can welcome enrollment from the community in one form or another. In our European operations, basically, all of the centers do. There are some employer sponsor, but even they are welcoming to community members. Operator: Our next question will come from Jeff Silber with BMO Capital Markets. Jeffrey Silber: Sorry to go back to government funding. But we did have, I guess, a plan that has passed. That was the American Rescue Plan where the child care tax credit was expanded. I'm just curious, did you see any benefit from that? And historically, when tax credits like this are expanded or contracted, how does that impact your business? Elizabeth Boland: Well, I think that you're referring to the tax credit to families where they will be getting a funding monthly toward their child care that they can use toward child care costs. So I would say that it -- I think it's difficult to know that we -- to see yet a material bump in that. I don't know that the funding has had enough of a trickle-down effect. The families are juggling a variety of supports, even some of the stimulus payments certainly have come in too. But we have -- I think our view on it is that a parent who may be getting $300 a month in a child care credit that they previously had not would be able to buy more time in a center and/or buy up in quality of a center type of care that they would seek and so that over time, we would see a benefit -- could see a benefit from that, certainly. And it's a little too soon to attribute it to that versus all the other sort of varieties in the variables in the enrollment. Jeffrey Silber: Okay. Fair enough. And then going back to the American Families Plan. And again, I know it's still a proposal, but there was a provision about establishing, I think, a $15 minimum wage for childhood staff. I know you've historically said that you pay typically above market rates. Can you give us an indication roughly what the average wages are? I know they're going to differ by geographic segment. And if we do see this enforced, how would that impact your business? Elizabeth Boland: Yes. So we -- as you say, the salary is one of the challenges, of course, with any kind of a national minimum wage or mandated wage like that is that the economy in this country is not unitary, and there are many different cost structures. So we experience that too with our wage rates. In general, we -- nationally, we would be above that, but it does depend on the local areas. There are some areas where we're a couple dollars below that in average because that's what the market is and other areas, we're well above it. I think the challenge with any kind of a minimum wage like that is it causes wage compression at all levels. And so it can become quite a different cascade in effect than just bringing people to a minimum wage. But I think that our hallmark over time has been to be an employer of choice. Stephen cited this in the prepared remarks about being on Fortune's 100 Best List. I think we've always prided ourselves on being not only a great place to work, but paying a professional wage and having professional benefits for our teachers who are critical educators in children's lives. And so we will continue to do that and work to partner. Frankly, that's what the partnership with employers has been about over the years, making child care accessible. And so we will continue to do that and to be a leader here and think that we can adapt as we have in places like Seattle or New York to these kinds of regulatory. And frankly, the U.K. and the Netherlands also have living wage and minimum wage kinds of thresholds like this that we've been able to adapt to over time. Operator: Our next question will come from Toni Kaplan with Morgan Stanley. Toni Kaplan: Wanted to ask about the roughly little over 100 centers that are closed. Are those employer-based centers where their offices haven't reopened? Or are those centers where you're evaluating whether you should open them generally because of some other issue? Elizabeth Boland: Yes. Toni, it's generally the former. These are primarily client centers. There's a handful that are our decision community-facing where we either have consolidated the enrollment just to be efficient and are looking for continued momentum to reopen those locations. But the vast majority are our client locations where the employers looking at their worksite reopening and/or at what time they want to begin to bring people back on to the campus for more than sort of a skeleton-type crew. Stephen Kramer: Yes. Yes. I mean I think the only thing I would add is that a lot of them are tied in to locations where physically the location is closed. And so therefore, the opportunity to reopen the child care center uniquely from the building or the campus is not possible. Because, obviously, the majority of our centers at this point are open, and that is not to say that all of those work sites are reopened. But it is to say that they were able to open because they had a different entrance and therefore, could open separately and uniquely from the actual office. But totally agree with Elizabeth. The majority of them are employer-sponsored centers. And for the most part, we have good site line through the remainder of the year to get those reopened. Toni Kaplan: That's great. And wanted to hear about just the pipeline of future employers. Is -- I guess, is converting the pipeline going as quickly as it normally is or just because of COVID and unclear work-from-home arrangements or whatever it may be? Like is there a little bit of a longer, like, lead time to opening centers? Or -- and then also, is there anything different about the sort of pipeline overall versus just your typical pipeline in general, like whether it's skewed to certain size or industry or any other factor I might be missing? Stephen Kramer: Yes. No, that's great. So first, we were really pleased to open the four new client centers in the quarter. And I'm hopeful that, that is sort of a strong indication that unlike some of the malaise, if you will, and the reduction in velocity on making decisions that we saw in 2020 is back for 2021. I think we feel good about the pipeline. We feel good about the interest that employers are demonstrating towards on-site and near-site child care centers and other supports that they can be providing to their employees. So ultimately, I think we feel good about that area. We feel good about our ability to continue to engage employers on the topic and ultimately open new centers and transition other centers from self-operated opportunities. So overall, Toni, feeling good about where we are in the pipeline for both centers as well as backup and our Ed Advisory services. Excellent. Thank you very much, and thanks for everyone for joining the call this evening. Appreciate all the great questions and look forward to continuing the great operations that we have here at Bright Horizons. Thank you. Operator: Thank you. And again, that concludes today's call. Thank you for your participation. You may now disconnect.BFAM Ratings Summary
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Bright Horizons Upgraded to Outperform, Shares Gain 3%
Bright Horizons (NYSE:BFAM) shares rose more than 3% intra-day today after BMO Capital analysts upgraded the stock from Market Perform to Outperform, setting a revised price target of $125, down from $137. The move came as the stock showed weakness following its third-quarter earnings report, presenting what the analysts saw as an attractive entry point.
While Bright Horizons exceeded earnings expectations in the third quarter, management pointed to a slight slowdown in revenue growth, raising concerns about its ability to sustain margin expansion. Additionally, some investors expressed apprehension over potential impacts from Trump-era policies, including limited immigration potentially affecting hiring trends. However, the analysts noted that the benefits, such as increased tax credits, were likely to outweigh any potential negatives.
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Bright Horizons Family Solutions Inc. (BFAM) Q1 2024 Earnings Call Insights
Bright Horizons Family Solutions Inc. (NYSE:BFAM) Earnings Call Highlights
Bright Horizons Family Solutions Inc. (NYSE:BFAM) recently held its first quarter 2024 earnings conference call, an event that was keenly anticipated by investors and analysts alike. The call, detailed by Seeking Alpha, was an opportunity for the company's top executives, including CEO Stephen Kramer and CFO Elizabeth Boland, to present BFAM's financial performance for the early part of the year. The presence of analysts from prestigious financial institutions such as JPMorgan, Goldman Sachs, and Morgan Stanley underscored the significance of the event. This gathering was not just a routine check-in but a pivotal moment for Bright Horizons to outline its achievements and future prospects.
The financial performance of BFAM, as discussed during the earnings call, can be contextualized by looking at its recent stock performance. The company's stock price saw a notable increase to $111.23, which represents a significant jump of $6.96 or approximately 6.675%. This movement in stock price is a testament to the company's robust performance and the positive reception of its financial results by the market. The trading session during which this increase was observed also saw the stock price moving between a low of $108.75 and a high of $112.7024, indicating a healthy volatility that is often a sign of active investor interest.
Over the past year, BFAM's stock has experienced a wide range of prices, from a low of $71.65 to a high of $119.21. This fluctuation reflects the dynamic nature of the market and the various factors that have influenced investor sentiment towards the company. Despite these ups and downs, the company's current market capitalization stands at approximately $6.45 billion, a figure that speaks volumes about its size, stability, and the confidence investors place in its future growth potential. The trading volume of 609,560 shares further highlights the active interest in BFAM's stock, suggesting that the company remains a focal point for investors looking for solid returns.
The earnings call and the subsequent stock performance provide a clear picture of Bright Horizons Family Solutions' current financial health and its trajectory. The company's ability to navigate the complexities of the market, as evidenced by its stock price movements and overall market capitalization, is a strong indicator of its operational success and strategic direction. As BFAM continues to build on its achievements, the insights shared during the earnings call by its leadership team, coupled with the active engagement of analysts and investors, will be crucial in shaping the company's future in the competitive landscape of family solutions services.
