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BRIGHT HORIZONS FAMILY SOLUTIONS INC.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.BFAMEarnings & Financial Report

NYSE · Consumer Discretionary · Services-Child Day Care Services

Bright Horizons Family Solutions Inc. is a United States–based child-care provider and is the largest provider of employer-sponsored child care. It also provides back-up child care and elder care, tuition program management, education advising, and student loan repayment programs. It is headquartered in Newton, Massachusetts.

What changed in BRIGHT HORIZONS FAMILY SOLUTIONS INC.'s 10-K — 2024 vs 2025

Top changes in BRIGHT HORIZONS FAMILY SOLUTIONS INC.'s 2025 10-K

431 paragraphs added · 416 removed · 317 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

86 edited+63 added−58 removed59 unchanged
Results of operations may also fluctuate from quarter to quarter as a result of, among other things, the performance of existing centers, including enrollment and staffing fluctuations, the number and timing of new center openings, additions from acquisitions and center management transitions, the timing of new client launches in our back-up and educational advisory services, the length of time required for new centers to achieve profitability, center closings, the contract model mix (P&L versus cost-plus) of new and existing centers, the level of sponsorship payments, and general economic conditions.
Results of operations may also fluctuate from quarter to quarter as a result of, among other things, the performance of existing centers, including enrollment and staffing fluctuations, the number and timing of new center openings, additions from acquisitions and center management transitions, the timing of new client launches in our back-up care and educational advisory services, the length of time required for new centers to achieve profitability, center closings, the contract model mix (P&L versus cost-plus) of new and existing centers, the level of sponsorship payments, and general economic conditions.
In addition, some of our competitors may benefit from strong local name recognition or comply, or are required to comply, with fewer or less costly health, safety, and operational regulations than those with which we comply (such as the more limited health, safety and operational regulatory requirements typically applicable to family day care operations in caregivers’ homes).
Some of our competitors may benefit from strong local name recognition or comply, or are required to comply, with fewer or less costly health, safety, and operational regulations than those with which we comply (such as the more limited health, safety and operational regulatory requirements typically applicable to family day care operations in caregivers’ homes).
SGA related to back-up care is similar to SGA for full service center-based child care, with additional expenses related to the technology necessary to operate this service, the ongoing development and maintenance of the provider network, and additional personnel needed as a result of more significant client management and reporting requirements.
The nature of SGA related to back-up care is similar to SGA for full service center-based child care, with additional expenses related to the technology necessary to operate this service, the ongoing development and maintenance of the provider network, and additional personnel needed as a result of more significant client management and reporting requirements.
Tuition paid by families generally represents approximately 90% of the revenue generated by this segment and is determined based on the age and developmental level of the child, the child’s attendance schedule (full-time or part-time), the geographic location, and the extent to which an employer sponsor subsidizes tuition.
Tuition paid by families represents approximately 90% of the revenue generated by this segment and is determined based on the age and developmental level of the child, the child’s attendance schedule (full-time or part-time), the geographic location, and the extent to which an employer sponsor subsidizes tuition.
While our child care tuition levels are generally higher than our competitors, we compete primarily based on the convenience of a location at or near a worksite and a higher level of program quality.
While our child care tuition levels are generally higher than many of our competitors, we compete primarily based on the convenience of a location at or near a worksite and a higher level of program quality.
Our History Guided by our HEART principles — Honesty, Excellence, Accountability, Respect, and Teamwork — we have operated early education and child care centers for employers and working parents since 1986. In 1998, we transformed our organization through the merger of Bright Horizons, Inc. and Corporate Family Solutions, Inc., both then Nasdaq-listed companies founded in 1986 and 1987, respectively.
Our History Guided by our HEART principles — Honesty, Excellence, Accountability, Respect, and Teamwork — we have operated early education and child care centers for employers and working families since 1986. In 1998, we transformed our organization through the merger of Bright Horizons, Inc. and Corporate Family Solutions, Inc., both then Nasdaq-listed companies founded in 1986 and 1987, respectively.
Program management services are provided through proprietary software for the processing of tuition reimbursement, loan repayment transactions, and analysis of data. We provide educational advising to our client’s employees on a one-on-one basis through our team of advisors who help users make informed decisions regarding their education and financial wellness.
Program management services are provided through proprietary software for the processing of tuition reimbursement, loan repayment transactions, and analysis of data. We provide educational advising to our clients’ employees on a one-on-one basis through our team of advisors who help users make informed decisions regarding their education and financial wellness.
Our total rewards package, which may vary by geography and employee, includes: • Competitive pay and healthcare benefits; • 401(k) retirement plans with matching contributions; • Paid time off; • Wellness initiatives with benefits relating to nutrition, stress management and financial well-being, mental health, work-life balance and an Employee Assistance Program; • Child care tuition subsidies for both Field and Home Team employees; • Tuition assistance programs, including the Horizons Teacher Degree Program which provides direct, no-cost access to an early childhood education degree; • Access to back-up care, EdAssist, College Coach and Sittercity; and, • Paid parental bonding leave.
Our total rewards package, which may vary by geography, employee, and eligibility requirements, includes: • Competitive pay and healthcare benefits; • 401(k) retirement plans with matching contributions; • Paid time off; • Wellness initiatives with benefits relating to nutrition, stress management and financial well-being, mental health, work-life balance and an Employee Assistance Program; • Child care tuition subsidies for both Field and Home Team employees; • Tuition assistance programs, including the Horizons CDA and Degree Program which provides direct, no-cost access to an early childhood education degree; • Access to back-up care, EdAssist, College Coach and Sittercity; and, • Paid parental bonding leave.
We provide back-up care services for children (primarily 0-12 years old) through our own full service child care centers, dedicated back-up child care centers, school-age programs (including camps), and in-home caregivers, as well as through our proprietary back-up care network of quality child care centers, camps and in-home care providers.
We provide back-up care services for children (primarily 0-12 years old) through our own full service child care centers, dedicated back-up child care centers, school-age programs (including camps), and in-home caregivers, as well as through our proprietary back-up care network of quality third party child care centers, camps and in-home care providers.
Career Development and our Horizons Teacher Degree Program We invest in our employees’ career growth. Employee training and development opportunities are critical to our success as they help develop leaders within our organization and support the delivery of quality services to our clients, and the families and learners we serve.
Career Development and our Horizons CDA and Degree Program We invest in our employees’ career growth. Employee training and development opportunities are critical to our success as they help develop leaders within our organization and support the delivery of quality services to our clients, and the families and learners we serve.
Cost of services consist of direct expenses associated with the operation of child care centers, fees paid to providers for care delivered as part of their contractual relationships with us, personnel and related direct service costs of the contact centers, and any other expenses related to the coordination or delivery of care and service.
Cost of services consists of direct expenses associated with the operation of child care centers, fees paid to providers for care delivered as part of their contractual relationships with us, personnel and related direct service costs of the contact centers, and any other expenses related to the coordination or delivery of care and service.
Tuition at most of our early education and child care centers is payable in advance and is typically due monthly. Annual revenue for mature centers typically averages between $1.5 million and $2.5 million at our centers, which is primarily driven by the size and capacity of centers.
Tuition at most of our early education and child care centers is payable in advance and is typically due monthly. Annual revenue for mature centers typically averages between $1.8 million and $2.8 million at our centers, which is primarily driven by the size and capacity of centers.
Commercial kitchens are typically present in those centers where regulations require that hot meals be prepared on-site. Available Information We file or furnish reports and other information with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).
Commercial kitchens are typically present in those centers where regulations require that hot meals be prepared on-site. 16 Table of Contents Available Information We file or furnish reports and other information with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).
EdAssist provides workforce education, tuition assistance and student loan repayment program management, as well as related educational advising to corporate clients who offer these services as a talent development and workplace benefit to their employees. Our services help employers better align their workplace education programs with their business goals while supporting employees to upskill, re-skill and improve their careers.
EdAssist provides workforce education, tuition assistance and student loan repayment program management, as well as related educational advising to corporate clients who offer these services as a talent development and workplace benefit to their employees. Our services help employers better align their workplace education programs with their business goals while supporting employees to upskill, reskill and improve their careers.
Geography We operate in two primary regions: (1) North America, which includes our operations in the United States (including Puerto Rico), and (2) International, which includes our operations in the United Kingdom, the Netherlands, Australia and India.
Geography We operate in two primary regions: (1) North America, which includes our operations in the United States (including Puerto Rico), and (2) Outside North America, which includes our operations in the United Kingdom, the Netherlands, Australia and India.
In addition, we provide back-up care services for seniors through our proprietary network of quality in-home care providers, tutoring for school-age children and adult learners through our network of tutoring service providers, pet care through third-party providers, and also help to facilitate back-up care services through our self-sourced reimbursed care program.
We provide back-up care services for seniors through our proprietary network of quality in-home care providers and adult center-based care, tutoring for school-age children and adult learners through our network of tutoring service providers, pet care through third-party providers, and also help to facilitate back-up care services through our self-sourced reimbursed care program.
Cost of services consist of personnel and direct operating costs of the contact centers and other expenses related to the coordination and delivery of tuition assistance, student loan repayment program management, and educational advisory services. SGA related to educational advisory services is similar to SGA for back-up care. EdAssist.
Cost of services consists of personnel and direct operating costs of the contact centers and other expenses related to the coordination and delivery of tuition assistance, student loan repayment program management, and educational advisory services. The nature of SGA related to educational advisory services is similar to SGA for back-up care. EdAssist.
In addition, enrollment at our child care centers declines as older children transition to elementary schools. Demand for our services generally increases with the beginning of the new school year and remains relatively stable throughout the rest of the school year.
In addition, enrollment at our child care centers declines as older children transition to elementary schools in the summer and fall months. Demand for our services generally increases with the beginning of the new school year and remains relatively stable throughout the rest of the school year.
We believe that our primary focus on serving employer clients, underscored by our track record for achieving and maintaining high-quality standards, also distinguishes us from our competitors. Human Capital Management Education and care can change lives, and for more than 35 years Bright Horizons has been changing the way families live and work.
We believe that our primary focus on serving employer clients, underscored by our track record for achieving and maintaining high-quality standards, distinguishes us from our competitors. Human Capital Management Education and care can change lives, and for 40 years Bright Horizons has been changing the way families live and work.
We have extended our international footprint to become a leading provider in the center-based child care market in the United Kingdom and have expanded into the Netherlands, Australia, and India.
We have extended our international footprint to become a leading provider in the center-based child care and back-up care market in the United Kingdom and have expanded child care operations into the Netherlands, Australia, and India.
College Coach provides college admissions and college financing advisory services through our team of experts, who have experience working in admissions or financial aid at colleges and universities. We also offer coaching and tools to assist families as they support their children with varying needs across life stages.
College Coach provides college admissions and college financing advisory services through our team of experts, who have experience working in admissions or financial aid at colleges and universities. We also offer coaching and tools to assist families as they support their children with varying needs across life stages, such as navigating middle school and saving for college.
In most jurisdictions where we operate, our child care centers are required by law to meet a variety of operational requirements, including minimum qualifications and background checks for our center personnel as well as teacher-to-child ratios and various labor, licensing, and health, fire and safety regulations. Regulations may also impact the design and furnishing of our centers.
In most jurisdictions where we operate, our child care centers are required by law to meet a variety of operational requirements, including minimum qualifications and background checks for our center personnel as well as teacher-to-child ratios and various labor, licensing, and health, fire and safety regulations.
As of December 31, 2024, our early education and child care centers had a total licensed capacity of approximately 115,000 children, with the smallest center having a capacity of 10 children and the largest having a capacity of approximately 500 children.
As of December 31, 2025, our early education and child care centers had a total licensed capacity of approximately 115,000 children, with the smallest center having a capacity of 20 children and the largest having a capacity of approximately 500 children.
We collaborate with our employees to advance the Foundation’s mission of creating Bright Spaces for at risk children and families in homeless shelters and other community organizations that serve families in need. We do this by supporting our employees’ service projects through Brightening Lives activity grants and Field and Home Team fundraising events.
We collaborate with our employees to advance the Foundation’s mission of creating Bright Spaces for at-risk children and families in homeless shelters, health care facilities, police stations and other community organizations that serve families in need or in crisis. We do this by supporting our employees’ service projects through Brightening Lives Activity grants and Field and Home Team fundraising events.
Based on a sample of approximately 350 of our early education and child care centers in the United States, the current average tuition at our centers is $2,675 per month for infants (typically ages 3 to 16 months), $2,475 per month for toddlers (typically ages 16 months to 3 years) and $2,100 per month for preschoolers (typically ages 3 to 5 years).
Based on a sample of approximately 350 of our early education and child care centers in the United States, the current average tuition at our centers is $2,765 per month for infants (typically ages 3 to 16 months), $2,565 per month for toddlers (typically ages 16 months to 3 years) and $2,175 per month for preschoolers (typically ages 3 to 5 years).
Our centers are designed to meet rigorous accreditation and rating standards established by leading organizations such as the National Academy of Early Childhood Programs, a division of the National Association for the Education of Young Children (NAEYC) in the United States, by the Office of Standards in Education, Children’s Services and Skills (OFSTED) in the United Kingdom, and by the Education Council and Australian Children’s Education and Care Quality Authority (ACECQA) in Australia.
Our centers are designed to meet rigorous accreditation and rating standards established by leading organizations such as the National Association for the Education of Young Children in the United States, by the Office of Standards in Education, Children’s Services and Skills (OFSTED) in the United Kingdom, and by the Education Council and Australian Children’s Education and Care Quality Authority (ACECQA) in Australia.
Furthermore, our innovative Horizons Teacher Degree Program fully funds U.S.-based educators in earning their child development associate certification, associate or bachelor’s degrees in early childhood education, reinforcing our standing as an employer of choice, while helping to retain and incentivize teachers to grow their careers at Bright Horizons.
In addition, our innovative Horizons CDA and Degree Program fully funds U.S.-based educators in earning their child development associate certification or post-secondary degrees in early childhood education, reinforcing our standing as an employer of choice, while helping to retain and incentivize teachers to grow their careers at Bright Horizons.
Industry Overview and Trends We compete in the global market for early education and child care services as well as the markets for dependent care solutions and workforce education services offered by clients as benefits to their employees. The child care industry generally can be divided into center-based and home-based child care.
Industry Overview and Trends We compete in the global market for early education and child care services as well as the growing markets for back-up care solutions and workforce education services offered by employers as benefits to their employees. The child care industry generally can be divided into center-based and home-based child care.
We champion a culture of belonging and appreciation through our engagement programs, including Better Together activities and through the Bright Horizons Foundation for Children®. 13 Table of Contents Better Together Culture and Inclusion Bright Horizons is an organization made up of employees, children and families from many cultures, backgrounds and experiences.
We champion a culture of belonging and appreciation through our engagement programs, including Better Together programming and activities that support the Bright Horizons Foundation for Children®. Better Together Culture and Inclusion Bright Horizons is an organization made up of employees, children and families from many cultures, backgrounds and experiences.
Our dedicated back-up centers are operated in a similar structure to full service centers and are either exclusive to a single employer or have multiple employer sponsors and are part of our back-up care program.
Our dedicated back-up centers are operated in a similar structure to full service centers and are either exclusive to a single employer or have multiple employer sponsors.
The program, which is a first-of-its-kind offering in the early education field, removes financial barriers for employees pursuing a degree, by allowing employees to earn a CDA (“child development associate”), associate or bachelor’s degree in early childhood education at no-cost and with no out-of-pocket expenses, including tuition, fees and books.
The program, which is a first-of-its-kind offering in the early education field, removes financial barriers for employees interested in furthering their education by allowing employees to earn a CDA (“child development associate”) certificate or an associate’s or bachelor’s degree in early childhood education at no-cost and with no out-of-pocket expenses, including tuition, fees and books.
We are organized in three reportable segments, which are aligned with our service offerings as follows: • Full service center-based child care (73% of our revenue in 2024); • Back-up care (23% of our revenue in 2024); and • Educational advisory services (4% of our revenue in 2024).
We are organized in three reportable segments, which are aligned with our service offerings as follows: • Full service center-based child care (71% of our revenue in 2025); • Back-up care (25% of our revenue in 2025); and • Educational advisory services (4% of our revenue in 2025).
On January 30, 2013, we completed our initial public offering and our common stock became listed on the New York Stock Exchange (“NYSE”) under the symbol “BFAM.” Throughout our history, we have continued to grow while investing in our future.
On January 30, 2013, we completed our initial public offering and our common stock became listed on the New York Stock Exchange (“NYSE”) under the symbol “BFAM.” Throughout our history, we have continued to grow while investing strategically in technology, quality and service expansion and innovation.
As of December 31, 2024, we had approximately 32,050 global employees (including part-time and substitute teachers), of whom approximately 3,250 were employed as corporate, divisional and regional employees, and approximately 28,800 were employed at our early education and child care centers and as in-home caregivers.
As of December 31, 2025, we had approximately 32,200 global employees (including part-time and substitute teachers), of whom approximately 3,300 were employed as corporate, divisional and regional employees, and approximately 28,900 were employed at our early education and child care centers and as in-home caregivers.
As of December 31, 2024, we had more than 1,450 employer client relationships across a diverse array of industries, including more than 220 Fortune 500 companies. As of December 31, 2024, we operated 1,019 early education and child care centers with the capacity to serve approximately 115,000 children in the United States, the United Kingdom, the Netherlands, Australia, and India.
As of December 31, 2025, we served more than 1,450 employers across a diverse array of industries, including more than 220 Fortune 500 companies. As of December 31, 2025, we operated 1,010 early education and child care centers with the capacity to serve approximately 115,000 children in the United States, the United Kingdom, the Netherlands, Australia, and India.
Our addressable market includes approximately 13,500 employers, each with at least 1,000 employees, within the industries that we currently serve in the United States and the United Kingdom.
Our addressable market includes approximately 13,500 employers, each with at least 1,000 employees, within the industries that we currently serve in the U.S. and U.K.
Regulatory Matters Our business operates in multiple jurisdictions, and we are subject to various national and regional laws and rules and regulations, including labor, licensing, health, fire and safety, and data privacy requirements and standards. The following discussion highlights our key areas of focus.
Regulatory Matters Our business operates in multiple jurisdictions, and we are subject to various national and regional laws, rules and regulations, including labor, licensing, health, fire and safety, and data privacy requirements and standards.
As of December 31, 2024, we had 599 centers in North America and 420 international centers. Additional geographical information is included in Note 18, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
As of December 31, 2025, we had 597 centers in North America and 413 centers outside North America. Additional geographical information is included in Note 17, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Marketing tools have expanded to include text message communication; targeted back-up journeys and campaigns; outreach for flexible care offerings including options such as tutoring and camps; and sharing our curriculum and extension activities with families at home through our online platforms.
Marketing tools have expanded to include personalized communications based on specific, known care needs and availability; targeted back-up journeys and campaigns; outreach for flexible care offerings including options such as tutoring and camps; and sharing our curriculum and extension activities with families at home through our online platforms.
We believe the education and experience of our child care center leaders and teachers exceed the industry average. Our employees benefit from comprehensive onboarding, ongoing in-center training, and access to an in-house online training university that offers nationally recognized child development credentials.
We believe the education and experience of our child care center leaders and teachers exceed the industry averages, supported by comprehensive onboarding, ongoing in-center training, and access to an in-house online training university, offering nationally recognized child development credentials.
Marketing Brand Awareness and Thought Leadership We market our services and build our brand through events, social media, earned and paid media placements, digital and print advertising, articles and blogs, direct mail, and a robust search engine optimization strategy.
Marketing Brand Awareness and Thought Leadership Our brand and reputation for quality strengthens our ability to attract and retain clients, families and employees. We market our services and build our brand through events, social media, earned and paid media placements, digital and print advertising, articles and blogs, direct mail, and a robust search engine optimization strategy.
Competition for back-up care comes from IAC/Interactivecorp (Care.com) in addition to employee assistance programs and smaller work/life companies. In the educational advisory segment competition comes from EdCor, Guild Education, InStride, and Tuition.io as well as other smaller providers entering the market. We believe the key factors in the competition for enrollment are quality, site convenience and cost.
Competition for back-up care comes from IAC/Interactivecorp (Care.com) in addition to employee assistance programs and smaller work/life companies in the market. In the educational advisory services segment competition comes from EdCor, Guild Education, InStride, and Tuition.io as well as other existing smaller providers in the market.
A central program offering is our Horizons Teacher Degree Program .
A central program offering is our Horizons CDA and Degree Program .
Outreach for these efforts includes campaigns for back-to-school and return-to-office support; initiatives aimed at supporting enrolled families including age-based developmental notifications through our parent mobile app; a monthly parenting newsletter; podcasts; and a parenting exchange workshop series. Lead Generation and Conversion; Customer Retention Lead generation and conversion, increased utilization, and customer retention remain at the heart of our marketing efforts.
Outreach for these efforts includes campaigns for back-to-school and return-to-office support, initiatives aimed at supporting enrolled families including age-based developmental notifications through our parent mobile app, a monthly parenting and client employee newsletter, podcasts and a parenting exchange workshop series.
As of December 31, 2024, our workforce composition was approximately as follows: Women (Global) (1) Non-White (North America Only) (2) Entire Workforce (3) 94% 55% Home Team Employees 77% 32% Field Employees 96% 58% Senior Leaders (4) 71% 20% (1) Represents percentage of women in the workforce.
As of December 31, 2025, our workforce composition was approximately as follows: Women (Global) (1) Non-White (North America Only) (2) Entire Workforce (3) 94% 56% Home Team Employees 76% 31% Field Employees 96% 59% Senior Leaders (4) 70% 23% (1) Represents percentage of women in the workforce.
The total number of employees includes approximately 18,250 in North America, 8,650 in the United Kingdom, 2,600 in the Netherlands, 2,500 in Australia, and 50 in India.
The total number of employees includes approximately 18,450 in North America, 9,250 in the United Kingdom, 2,400 in the Netherlands, 2,050 in Australia, and 50 in India.
These honors are awarded based largely on employee responses to surveys. • 2024 “Top Places to Work” by the Boston Globe — Awarded 15 times • “Top Workplaces 2024” by the Denver Post — Awarded 10 times • 2024 “Best Workplaces” in the United Kingdom by the Great Place to Work Institute — Awarded 19 times • 2024 “Best Workplaces for Women” by the Great Place to Work Institute in the United Kingdom • 2024 “Best Workplaces for Development” by the Great Place to Work Institute in the United Kingdom • 2024 “Best Workplaces for Wellbeing” by the Great Place to Work Institute in the United Kingdom • 2025 “Best Workplaces for Women” in the Netherlands by the Great Place to Work Institute 14 Table of Contents Intellectual Property We believe our name and logo have significant value to our operations.
These honors are awarded based largely on employee responses to surveys. • 2025 “Best Places to Work” by the Boston Business Journal • 2025 America’s Greatest Workplaces for Inclusion & Diversity by Newsweek • 2025 “Best Workplaces” in the United Kingdom by the Great Place to Work Institute • 2025 “Best Workplaces for Women” by the Great Place to Work Institute in the United Kingdom • 2025 “Best Workplaces for Development” by the Great Place to Work Institute in the United Kingdom • 2025 “Best Workplaces for Wellbeing” by the Great Place to Work Institute in the United Kingdom • 2025 “Best Workplaces in Education and Training” by the Great Place to Work Institute in the United Kingdom • 2025 “Best Workplaces for Women” in the Netherlands by the Great Place to Work Institute 14 Table of Contents Intellectual Property We believe our brand, name and logo have significant value to our operations.
In addition, our trained teachers and clear sightline center designs help ensure the health and safety of children. Our early education and child care centers are designed to minimize the risk of injury to children by incorporating features such as child-sized amenities, rounded corners on furniture and fixtures, age-appropriate toys and equipment and cushioned fall zones surrounding play structures.
Many of our centers are purpose built and designed with open concepts to help ensure the health and safety of children and to minimize the risk of injury to children by incorporating features such as child-sized amenities, rounded corners on furniture and fixtures, age-appropriate toys and equipment and cushioned fall zones surrounding play structures.
We provide services primarily under multi-year contracts with employers who offer early education and child care, back-up care, and educational advisory services as part of their employee benefits package. These benefits help employers support their employees across life and career stages and improve recruitment, employee engagement, productivity, retention, and career advancement.
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.
Our proprietary We Care system supports proper supervision of children and documents the transitions of children to and from the care of teachers and parents or from one classroom to another during the day.
In the U.S., our proprietary We Care system supports proper supervision of children and documents the transitions of children to and from the care of teachers and parents or to and from classrooms.
We believe that the modern worker values efforts by their employer to support employees across career stages to help them thrive in the workplace and seek career advancement by providing access to degree and non-degree education programs.
We believe that the modern worker values investments by their employer that help them thrive in the workplace across career stages, as well as advance their careers through access to degree and non-degree education programs.
We believe many center-based child care providers are able to offer care at lower prices than we do by utilizing less intensive teacher-to-child ratios and offering lower compensation and benefits to their employees.
We believe the key factors in the competition for full service center enrollment are quality of care, site convenience and cost. We believe many center-based child care providers are able to offer care at lower prices than we do by utilizing less intensive teacher-to-child ratios and offering lower compensation and benefits to their employees.
For a discussion of the risks associated with the laws and regulations that may materially impact us, please see the section entitled “ Risk Factors ” in Item 1A of this Annual Report on Form 10-K. Licensing and Child Care Centers The laws and regulations relating to the provision of child care are numerous and complex.
The following discussion highlights our key areas of focus. For a discussion of the risks associated with the laws and regulations that may materially impact us, please see the section entitled “ Risk Factors ” in Item 1A of this Annual Report on Form 10-K.
In the United States, we continue to grow our partnerships with employer clients by partnering to develop child care centers, expanding and enhancing our back-up care and family supports, and by developing and growing our educational advisory services.
In the United States, we continue to deepen our partnerships with employer clients by supporting their development of child care centers, expanding and enhancing our suite of back-up care offerings, and by growing our educational advisory services.
The following table sets forth our segment results for the year ended December 31, 2024: Full service center-based child care Back-up care Educational advisory services Total (In thousands, except percentages) Revenue $ 1,961,785 $ 610,112 $ 114,116 $ 2,686,013 As a percentage of total revenue 73 % 23 % 4 % 100 % Income from operations $ 53,699 $ 169,611 $ 23,309 $ 246,619 As a percentage of total income from operations 22 % 69 % 9 % 100 % Additional segment information is included in Note 18, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 8 Table of Contents Full Service Center-Based Child Care Services We provide full service center-based child care at centers located at or near an employer sponsor’s worksite, as well as convenient locations within the community.
The following table sets forth our segment results for the year ended December 31, 2025: Full service center-based child care Back-up care Educational advisory services Total (In thousands, except percentages) Revenue $ 2,081,119 $ 727,988 $ 124,500 $ 2,933,607 As a percentage of total revenue 71 % 25 % 4 % 100 % Income from operations $ 66,093 $ 221,610 $ 26,962 $ 314,665 As a percentage of total income from operations 21 % 70 % 9 % 100 % Additional segment information is included in Note 17, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 8 Table of Contents Full Service Center-Based Child Care Services We provide full service center-based child care at centers located at or near an employer sponsor’s worksite, as well as convenient locations within the community.
We continue to invest in new technologies and innovation to better support our full suite of services as well as enhance our customers’ user experience, with a focus on driving use of our services and maximizing enrollment in our centers.
We continue to innovate and invest in leading technology to support our full suite of services as well as enhance our customers’ user experience, with a focus on driving utilization of our services and maximizing enrollment and engagement across all offerings.
During our more than 35 year history, we have consistently been named as a top employer by third-party sources, including Fortune magazine, the Great Place to Work Institute, industry publications and the Boston Globe and the Denver Post recognizing the investment we make in our workforce.
Over our 40 year history, we have been consistently recognized as a top employer by third-party sources, including Fortune magazine, the Great Place to Work Institute, industry publications and the Boston Globe and the Denver Post, reflecting our investments in people, training, and workplace culture and practices.
Our health and safety team is dedicated to supporting our centers and other operations to ensure compliance with our policies and practices, and to ensure that we set the highest standards in all areas. We employ a variety of security measures at our early education and child care centers, including secure electronic access systems.
Our health and safety team is dedicated to supporting our operations to ensure compliance with our policies and practices, and to ensure that we set high standards for health and hygiene. We also employ a variety of security measures at our centers, including secure electronic access systems and teacher training on emergency response.
Our cost-plus contracts typically have initial terms ranging from three to five years with varying terms, renewal and termination options. Under all model types, we retain responsibility for all aspects of operating the child care center, including hiring and paying employees, ongoing training, curriculum, contracting with vendors, purchasing supplies, and collecting tuition.
Under all model types, we retain responsibility for all aspects of operating the child care center, including hiring and paying employees, ongoing training, curriculum, contracting with vendors, purchasing supplies, and collecting tuition.
Self-sourced reimbursed care is an alternative care program, available to employer sponsors typically when other network care solutions are not available, which provides payments to their employees to assist with the cost of self-sourced dependent care. Back-up care solutions includes broader school-age programs, such as camps and tutoring, with camps primarily operating during school vacations and the summer months.
Self-sourced reimbursed care is an alternative care program, available to employer sponsors typically when other network care solutions are not available, which provides payments to their employees to assist with the cost of self-sourced dependent care.
The delivery of our back-up care services is subject to ongoing oversight and monitoring to ensure the health and safety of the children and adults we care for. 15 Table of Contents Environmental Our operations, including the selection and development of the properties that we lease or own, and any construction or improvements that we make at those locations, are subject to a variety of national and local laws and regulations, including environmental, zoning and land use requirements.
Environmental Our operations, including the selection and development of the properties that we lease or own, and any construction or improvements that we make at those locations, are subject to a variety of national and local laws and regulations, including building and fire code, environmental, zoning and land use requirements.
We partner with employer sponsors to promote our early education and child care centers and other workplace solutions as important employee benefits within their organizations.
Lead Generation and Conversion; Customer Retention Lead generation and conversion, increased utilization of our service offerings, and customer retention remain at the heart of our marketing efforts. We partner with employer sponsors to promote our early education and child care centers and other workplace solutions as important employee benefits within their organizations.
In addition, we have a practice of conducting site evaluations on each freestanding or newly constructed or renovated property that we own or lease. We have no known material environmental liabilities at this time.
In addition, we have a practice of conducting site evaluations on constructed or renovated properties that we own or lease. We have no known material environmental liabilities at this time. In addition, we comply with new and changing environmental and climate legislation and regulations in the jurisdictions in which we operate.
Our protocols were developed in consideration of state and local public health guidelines and our partnership with medical professionals and experts that specialize in pediatric infectious diseases.
Classroom Health and Safety Practices We adhere to rigorous health and hygiene practices in our early education and child care centers. Our protocols were developed in consideration of state and local public health guidelines and, in the U.S., in partnership with medical professionals and experts that specialize in pediatric infectious diseases.
The following table sets forth information by geographic region for the year ended December 31, 2024: North America International Total (In thousands, except percentages) Revenue $ 1,936,924 $ 749,089 $ 2,686,013 As a percentage of total revenue 72 % 28 % 100 % Fixed assets, net $ 313,839 $ 259,100 $ 572,939 As a percentage of total fixed assets, net 55 % 45 % 100 % Our international business primarily consists of child care centers throughout the United Kingdom, the Netherlands, and Australia, with 92% of the revenue generated related to the full service center-based child care segment.
The following table sets forth information by geographic region for the year ended December 31, 2025: North America Outside North America Total (In thousands, except percentages) Revenue $ 2,090,922 $ 842,685 $ 2,933,607 As a percentage of total revenue 71 % 29 % 100 % Fixed assets, net $ 291,754 $ 282,446 $ 574,200 As a percentage of total fixed assets, net 51 % 49 % 100 % Our business outside North America primarily consists of child care centers throughout the United Kingdom, the Netherlands, and Australia, with 92% of the revenue generated related to the full service center-based child care segment, with the remaining 8% relating to back-up care in the U.K.
We believe that our centers and operations comply in all material respects with all applicable laws and regulations. Health and Safety The health, safety and well-being of children, families and staff is our top priority. We adhere to rigorous health and hygiene practices.
We believe that our centers and operations comply in all material respects with all applicable laws and regulations. Safeguarding Practices The safety and well-being of children and staff is our top priority and our most important responsibility. Safeguarding begins with hiring and screening practices, including background checks that meet or exceed regulatory requirements and reference checks.
Additionally, we operate in the growing market for back-up care, which consists of center-based back-up care and in-home care as well as school-age programs (including camps and tutoring), senior care and pet care.
We believe we are one of the largest high-quality providers of employer-sponsored child care. 4 Table of Contents We also operate in the growing market for back-up and dependent care, which includes center-based back-up care and in-home care, school-age programs (including camps and tutoring), senior care and pet care.
Facilities Our early education and child care centers vary in location as well as design and capacity in accordance with industry standards and local regulatory requirements. Our North American early education and child care centers typically have an average capacity of approximately 130 children, and our international locations have an average capacity of approximately 90 children.
Our North American early education and child care centers typically have an average capacity of approximately 130 children, and our locations outside North America have an average capacity of approximately 90 children.
Item 1. Business Our Company For more than 35 years, Bright Horizons has been a champion for working families — designing and delivering innovative education and care solutions.
Item 1. Business Our Company For 40 years, Bright Horizons has been a champion for working families — designing and delivering innovative education and care solutions. We are a leading provider of high-quality early education and child care, comprehensive back-up care solutions and educational advisory services.
We also believe that low teacher-to-child ratios and small group sizes are critical factors in delivering our curriculum effectively as well as helping to facilitate more personalized care. Our programs provide teacher-to-child ratios and group sizes that meet or exceed licensing standards.
We also believe that low teacher-to-child ratios and small group sizes, which meet or exceed licensing standards, are important to delivering consistent educational outcomes and enabling more personalized care to the families we serve.
Personnel costs in centers operating under P&L models will often represent a lower percentage of overall costs when compared to centers operating under cost-plus models as we are often responsible for additional other costs that are typically paid or provided directly by an employer sponsor in centers operating under the cost-plus model.
Personnel costs in centers operating under P&L models will often represent a lower percentage of overall costs when compared to centers operating under cost-plus models as we are often responsible for additional other costs that are typically paid or provided directly by an employer sponsor in centers operating under the cost-plus model. 9 Table of Contents Selling, general and administrative expenses (“SGA”) relating to full service center-based child care consist primarily of salaries and benefits (including stock-based compensation costs) for non-center personnel, which includes corporate, regional and business development personnel; accounting, legal and management/advisory fees; information technology; occupancy costs for corporate and regional personnel; and other general corporate expenses.
We are committed to providing the highest quality education and care across all of our offerings.
We are committed to providing the highest quality education and care across all of our offerings, underpinned by rigorous quality standards, research-informed practices and a focus on measurable outcomes for families and employers.
Our full service segment operates in the center-based market, which is highly fragmented. The center-based child care market includes both retail and employer-sponsored centers.
Our full service segment operates in the center-based market, which is highly fragmented, and includes both retail and employer-sponsored centers. The employer-sponsored model, in which a single employer or consortium of employers enters into a long-term contract for the provision of care at or near the employer’s worksite, has long been central to our business.
These policies and procedures establish protocols in various areas, including the safe handling of food and medications, managing child illness or health emergencies, and a variety of other critical aspects of care to ensure that centers meet or exceed all mandated licensing standards.
Our early education and child care centers are guided by extensive safeguarding policies and procedures that establish protocols for the safe and appropriate care of children, including infant/child first aid and CPR, safe sleep practice and other critical aspects of care to ensure that centers meet or exceed all mandated licensing standards.
Our curriculum and teacher training programs are designed to support inclusive classrooms and create positive learning environments. Our proprietary curriculum and educational practices are informed by the science of early learning and research on childhood development. Our resources and training programs guide teachers as they transform this research into practice through high-quality learning experiences and evidence-based instructional practices.
Our commitment to quality is supported by a sustained focus on learning and development. Our curriculum and teacher training programs are designed to support inclusive classrooms, positive learning environments and are informed by research on early learning and childhood development.
We were listed on Nasdaq from 1998 to May 2008 when we were acquired by investment funds affiliated with Bain Capital Partners LLC (referred to as our “going private transaction”).
We were listed on Nasdaq from 1998 to May 2008 when we were acquired and went private.
Selling, general and administrative expenses (“SGA”) relating to full service center-based child care consist primarily of salaries and benefits (including stock-based compensation costs) for non-center personnel, which includes corporate, regional and business development personnel; accounting, legal and management/advisory fees; information technology; occupancy costs for corporate and regional personnel; and other general corporate expenses. 9 Table of Contents Back-up Care Services Back-up care offers family support services for dependents of all ages and provides coverage when regular care breaks down, as well as care coordination tools to assist families with their short and long-term care needs.
Back-up Care Services Back-up care offers family support services for dependents of all ages and provides coverage when regular or other previously planned care breaks down, as well as care coordination tools to assist families with their short and long-term care needs.
We believe we are one of the largest high-quality providers of back-up care and educational advisory services. 4 Table of Contents We believe that the following key factors contribute to growth in the markets for employer-sponsored child care, back-up care, and educational advisory services.
We believe that the following key factors contribute to growth in the markets for center-based and employer-sponsored child care, back-up care, and educational advisory services. Although healthcare and financial benefits are standard components of employee compensation, the inclusion of education and care benefits reflects a more comprehensive investment in human capital and elevates an employer’s credibility and differentiation.
Our Growth Strategy We believe there are significant opportunities to continue to grow our business globally by executing on the following strategies. Grow Our Client Relationships • Secure Relationships with New Employer Clients.
We believe our leadership team’s understanding of both the operational complexity and the strategic priorities of employers positions us to effectively address evolving needs and allocate capital and resources with discipline. Our Growth Strategy We believe there are significant opportunities to continue to grow our business globally by executing on the following strategies.
For parents and families, we offer a webinar series as well as monthly podcasts that reflect current issues facing families and provide practical parenting tips. Market Leading People Practices Our ability to deliver high-quality care, education and other services is enabled by our ability to attract, retain, motivate and develop skilled talent.
We believe our reputation as a trusted provider enables employers and families to rely on our services during critical moments, reinforcing long-term relationships and recurring utilization. 6 Table of Contents Market Leading People Practices Our ability to deliver high-quality care, education and other services is enabled by our ability to attract, retain, motivate and develop skilled talent.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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As a consequence of our insurance claims experience, changes in the insurance or reinsurance markets, or other conditions affecting the availability of traditional insurance products to us, our insurance premiums could materially increase, we may need to increase or expand the coverages or limits purchased by our wholly-owned captive insurance company, or we may need to obtain other risk management or insurance program alternatives, all of which could increase costs and materially and adversely affect our business and operating results.
As a consequence of our insurance claims experience, changes in the insurance or reinsurance markets, or other conditions affecting the availability of traditional insurance products to us, our insurance premiums could materially increase, we may increase or expand the coverages or limits purchased by our wholly-owned captive insurance company, or we may obtain other risk management or insurance program alternatives, all of which could increase costs and materially and adversely affect our business and operating results.
Because of the nature of our business, we are subject to claims and litigation from time to time and may be subject to future claims, including unasserted claims and matters, alleging negligence, inadequate supervision, illegal, inappropriate or abusive behavior, health and safety failures, or other grounds for liability arising from injuries or other harm to the people we serve, primarily children.
Because of the nature of our business, we are subject to claims and litigation and may be subject to future claims, including unasserted claims and matters, alleging negligence, inadequate supervision, illegal, inappropriate or abusive behavior, health and safety failures, or other grounds for liability arising from injuries or other harm to the people we serve, primarily children.
In addition, we may incur other substantial costs in connection with remediating and otherwise responding to any cybersecurity incident, including potential liability for stolen client, customer, or employee data, repairing system damage, or providing credit monitoring or other benefits to clients, customers, or employees affected by the incident.
In addition, we have and may incur other substantial costs in connection with remediating and otherwise responding to any cybersecurity incident, including potential liability for stolen client, customer, or employee data, repairing system damage, or providing credit monitoring or other benefits to clients, customers, or employees affected by the incident.
Failure of our systems to operate effectively or a compromise in the security of our systems, or the systems of our affiliates or other third-party that results in unauthorized persons or entities obtaining personal information or other sensitive information, could materially and adversely affect our reputation, operations, operating results, and financial condition.
Failure of our systems to operate effectively or a compromise in the security of our systems, or the systems of our affiliates or other third-party that results in unauthorized persons or entities obtaining personal data or other sensitive information, could materially and adversely affect our reputation, operations, operating results, and financial condition.
For example, we are subject to various privacy laws in the United States, United Kingdom, European Union, Australia and India, which give data privacy rights to their respective residents and/or impose significant obligations on controllers and processors of data.
For example, we are subject to various privacy laws in the United States, United Kingdom, European Union, Australia and India, which give data privacy rights to their respective residents and/or impose significant obligations on controllers and processors of personal data.
Actual or anticipated cybersecurity threats and attacks may cause us to incur costs, including costs to deploy additional personnel and protection technologies, train employees, pay higher insurance premiums, and engage third-party specialists for additional services.
Actual or anticipated cybersecurity threats and attacks have and may cause us to incur costs, including costs to deploy additional personnel and protection technologies, train employees, pay higher insurance premiums, and engage third-party specialists for additional services.
The existence of a stock repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
The existence of a share repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock.
We are, and in the future may be, subject to employee claims based on, among other things, discrimination, harassment or wrongful termination.
Additionally, we are, and in the future may be, subject to employee claims based on, among other things, discrimination, harassment or wrongful termination.
Breaches in our data security, those of our affiliates or other third-parties, could expose us to risks of data loss, inappropriate disclosure of confidential or proprietary information, potential claims, investigations, regulatory proceedings, litigation penalties and liability, could impede our processing of transactions and our financial reporting, and could result in a disruption of our operations.
Breaches in our data security, those of our affiliates or other third-parties, have and may expose us to risks of data loss, inappropriate disclosure of confidential or proprietary information, potential claims, investigations, regulatory proceedings, litigation penalties and liability, could impede our processing of transactions and our financial reporting, and could result in a disruption of our operations.
In addition, repurchases of our common stock pursuant to our stock repurchase program could affect the market price of our common stock or increase its volatility.
In addition, repurchases of our common stock pursuant to our share repurchase program could affect the market price of our common stock or increase its volatility.
As the regulatory environment related to privacy, data collection and protection, artificial intelligence, information security, marketing and advertising, selling and sharing, and consumer protection becomes increasingly rigorous, with new and changing requirements applicable to our business, compliance with such requirements could impose significant limitations, require changes to our business, or restrict our use or storage of personal information, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
As the regulatory environment related to privacy, data collection and protection, AI, information security, marketing and advertising, selling and sharing, and consumer protection becomes increasingly rigorous, with new and changing requirements applicable to our business, compliance with such requirements could impose significant limitations, require changes to our business, or restrict our use or storage of personal data, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
Information on our debt is included in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in Item 7 of this Annual Report on Form 10-K and Note 12, Credit Arrangements and Debt Obligations , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Information on our debt is included in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in Item 7 of this Annual Report on Form 10-K and Note 11, Credit Arrangements and Debt Obligations , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Our business is exposed to fluctuations in foreign currency exchange rates, which could adversely impact our results. As a multinational company, we conduct our business in a variety of markets and are therefore subject to market risk for changes in foreign currency exchange rates.
Our business is exposed to fluctuations in foreign currency exchange rates, which could adversely impact our results. As a global company, we conduct our business in a variety of markets and are therefore subject to market risk for changes in foreign currency exchange rates.
Work-from-home or hybrid work options may also shift demand away from locations where we currently offer services resulting in center closures or potential impairments. Such changes could materially and adversely affect our business and operating results. Even as employers recognize the value of our services, demand may be adversely affected by general economic conditions.
Work-from-home or hybrid work options may also shift demand away from locations where we currently offer services resulting in center closures or potential impairments. Such changes could materially and adversely affect our business and operating results. 17 Table of Contents Even as employers recognize the value of our services, demand may be adversely affected by general economic conditions.
Although our board of directors has authorized the stock repurchase program, the stock repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares and may be suspended or terminated at any time.
Although our board of directors has authorized the share repurchase program, the share repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares and may be suspended or terminated at any time.
Our ability to meet those financial ratios and tests can be affected by events beyond our control. A breach of the covenants under the credit agreement governing our senior secured credit facilities, or any replacement facility, could result in an event of default unless we obtain a waiver to avoid such default.
Our ability to meet those financial ratios and tests can be affected by events beyond our control. 22 Table of Contents A breach of the covenants under the credit agreement governing our senior secured credit facilities, or any replacement facility, could result in an event of default unless we obtain a waiver to avoid such default.
For information regarding our sensitivity to changes in interest rates, refer to “ Quantitative and Qualitative Disclosures About Market Risk ” in Item 7A of this Annual Report on Form 10-K. 21 Table of Contents The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
For information regarding our sensitivity to changes in interest rates, refer to “ Quantitative and Qualitative Disclosures About Market Risk ” in Item 7A of this Annual Report on Form 10-K. The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
Achieving and sustaining growth requires the successful execution of our growth strategies, which may require the implementation of enhancements to customer-facing, operational and financial systems, expanded sales and marketing capacity, continuous updates to technology, such as those related to artificial intelligence, improvements to processes and systems, and additional or new organizational resources.
Achieving and sustaining growth requires the successful execution of our growth strategies, which may require the implementation of enhancements to customer-facing, operational and financial systems, expanded sales and marketing capacity, continuous updates to technology, such as those related to AI, improvements to processes and systems, and additional or new organizational resources.
While we have entered into interest rate cap agreements to limit our exposure to higher interest rates on a portion of our debt, these agreements have expiration dates in 2025 and 2026.
While we have entered into interest rate cap agreements to limit our exposure to higher interest rates on a portion of our debt, these agreements have expiration dates in 2026 and 2027.
A shift in workplace demographics where employees work from home on a part- or full-time basis, has in the past and may in the future reduce demand for center-based child care or demand for specific center locations and impact enrollment as well as other service offerings.
A shift in workplace demographics where employees work from home on a part- or full-time basis, has and may in the future, reduce demand for center-based child care or demand for specific center locations and impact enrollment as well as other service offerings and result in center closures.
The number of employers that view such services as cost-effective or beneficial to their workforces may not continue to grow at the levels we anticipate or may diminish.
The number of employers that view such services as cost-effective or beneficial to their workforce may not continue to grow at the levels we anticipate or may diminish.
A variety of laws, regulations, industry self-regulatory principles, industry standards or codes of conduct and regulatory guidance relating to privacy, data protection, artificial intelligence, marketing and advertising, selling and sharing, and consumer protection apply to the collection, use, retention, protection, disclosure, transfer, and other processing of certain types of data.
A variety of laws, regulations, industry self-regulatory principles, industry standards or codes of conduct and regulatory guidance relating to privacy, data protection, AI, marketing and advertising, selling and sharing, and consumer protection apply to the collection, use, retention, protection, disclosure, transfer, and other processing of certain types of data.
For information on our acquisition growth strategy, see Item 1, “ Business — Our Growth Strategy .” Significant competition in our industry could adversely affect our results of operations. We compete for enrollment and sponsorship of our early education and child care centers in a highly-fragmented market.
For information on our acquisition growth strategy, see Item 1, “ Business — Our Growth Strategy .” 23 Table of Contents Significant competition in our industry could adversely affect our results of operations. We compete for enrollment and sponsorship of our early education and child care centers in a highly-fragmented market.
Additionally, our stock repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.
Additionally, our share repurchase program could diminish our cash reserves, which may impact our ability to finance future growth and to pursue possible future strategic opportunities and acquisitions.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere herein and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us, our competitors, or our industry; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • changes in management and key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, initial public offerings, spin-offs, joint ventures, strategic investments, share repurchases or changes in business strategy; • changing client and customer (parents or client employees) preferences; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • impairments; • impact from cyber events; • changes in business activity or the economy; • acts of violence, terrorist acts, acts of war, or periods of widespread civil unrest; • pandemics, natural disasters and other calamities; • changes in general market and economic conditions, changes in tax laws and regulations; and • the other risk factors listed in this “ Risk Factors ” section.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere herein and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us, our competitors, or our industry; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • changes in management and key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, initial public offerings, spin-offs, joint ventures, strategic investments, share repurchases or changes in business strategy; • changing client and customer (parents or client employees) preferences; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • impairments; • suspension or revocation of child care center licenses; • negative publicity resulting from allegations or claims; • impact from cyber events; • changes in business activity or the economy; • acts of violence, terrorist acts, acts of war, or periods of widespread civil unrest; • pandemics, natural disasters and other calamities; • changes in general market and economic conditions, changes in tax laws and regulations; and • the other risk factors listed in this “ Risk Factors ” section.
Pursuant to our certificate of incorporation, our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options, or shares of our authorized but unissued preferred stock.
Pursuant to our certificate of incorporation, our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares of common stock, including shares issuable upon the exercise of options or vesting of restricted stock units, or shares of our authorized but unissued preferred stock.
In addition to costs associated with compliance and changing laws and regulations in the United States and internationally, failure to comply with applicable regulations and requirements could subject us to governmental sanctions, which can include fines, corrective orders, probation or, in more serious cases, suspension or revocation of one or more of our child care centers’ licenses to operate, and require significant expenditures to bring those centers into compliance.
In addition to costs associated with compliance and changing laws and regulations in the jurisdictions in which we operate, failure to comply with applicable regulations and requirements could subject us to governmental sanctions, which can include fines, corrective orders, probation or, in more serious cases, suspension or revocation of one or more of our child care centers’ licenses to operate, and could require significant expenditures to bring those centers into compliance.
These incidents can arise from events that are beyond our ability to control, such as instances of abuse or actions taken (or not taken) by one or more center managers, teachers, or caregivers relating to the health, safety or welfare of children in our care.
These incidents can arise from events that are beyond our ability to control (notwithstanding the safeguarding practices in place), such as instances of abuse or actions taken (or not taken) by one or more center managers, teachers, or caregivers relating to the health, safety or welfare of children in our care.
Changes in the demand for dependent care services and workplace solutions, which may be negatively affected by demographic trends and economic conditions, may affect our operating results. Our business strategy largely depends on employers recognizing the value of providing employees with child care, dependent care, workforce education, and other workplace solutions as an employee benefit.
Changes in the demand for dependent care services and workplace solutions, which may be negatively affected by demographic trends and economic conditions, may affect our operating results. Our business strategy largely depends on employers recognizing the value of providing employees with child care, dependent back-up care, workforce education, and other workplace solutions as a fundamental employee benefit strategy.
We and our vendors may not anticipate, detect, or implement fully effective preventative measures against all cybersecurity threats particularly because the techniques used are increasingly sophisticated tools and constantly evolving. For example, as artificial intelligence continues to evolve, we expect cyber-attackers to also use artificial intelligence to develop malicious code and sophisticated phishing attempts.
We and our vendors may not anticipate, detect, or implement fully effective preventative measures against all cybersecurity threats particularly because the techniques used are increasingly sophisticated tools and constantly evolving. For example, as artificial intelligence (AI) continues to evolve, cyber-attackers are increasingly using AI to develop malicious code and sophisticated phishing attempts.
In recent years, a substantial portion of the workforce, including parents of children we serve at our centers, transitioned from working in traditional office environments to working in “virtual” or “home” offices, including in our primary markets of the United States, United Kingdom, Australia, and the Netherlands.
In recent years, a substantial portion of the workforce, including parents of children at our centers, transitioned from working in traditional office environments to working in “virtual” or “home” offices or in hybrid roles, including in our primary markets of the United States, United Kingdom, Australia, and the Netherlands.
Our quarterly results of operations may also fluctuate based on the number and timing of child care center openings and/or closings, the timing of new client service launches, acquisitions, the performance of new and existing early education and child care centers, the contractual arrangements under which child care centers are operated, the change in the mix of such contractual arrangements, competitive factors and general economic conditions.
Our quarterly results of operations may also fluctuate based on the number and timing of child care center openings and/or closings, the timing of new client service launches, increases and decreases in back-up care use, acquisitions, the performance of new and existing early education and child care centers, the contractual arrangements under which child care centers are operated and back-up care delivered, the change in the mix of such contractual arrangements, competitive factors and general economic conditions.
We are also subject to inherent risks attributed to operating in a global economy. As of December 31, 2024, we had 420 centers located in four foreign countries - the United Kingdom, the Netherlands, Australia and India.
We are also subject to inherent risks attributed to operating in a global economy. As of December 31, 2025, we had 413 centers located in four foreign countries - the United Kingdom, the Netherlands, Australia and India.
Failure to secure adequate new locations or successfully modify existing leases, or failure to effectively manage rent cost, could have a material adverse effect on our business, financial condition and results of operations. 19 Table of Contents Changes in our relationships with employer sponsors or failure to anticipate and respond to changing client and customer (parents or client employees) preferences and expectations or develop new customer-oriented services may affect our operating results.
Failure to secure adequate new locations or successfully terminate or modify existing leases, or failure to effectively manage rent cost, could have a material adverse effect on our business, financial condition and results of operations. 18 Table of Contents Changes in our relationships with employer sponsors or failure to anticipate and respond to changing client and customer (families, adult learners or client employees) preferences and expectations or develop new customer-oriented services may affect our operating results.
Our business relies on information technology networks and systems to store this data, process financial and personal information, manage a variety of business processes, and comply with regulatory, legal and tax requirements. We are also highly dependent on information technology for the coordination and delivery of our back-up care and educational advisory services.
Our business relies on information technology networks and systems to store this data, process financial and personal information, manage a variety of business processes, and comply with regulatory, legal and tax requirements. We are also highly dependent on information technology for the coordination and delivery of our services.
Such changes in foreign currency exchange rates could materially and adversely affect our business and operating results. 25 Table of Contents Market Related Risks We cannot guarantee that we will repurchase our common stock pursuant to our stock repurchase program or that our stock repurchase program will enhance long-term stockholder value.
Such changes in foreign currency exchange rates could materially and adversely affect our business and operating results. Market Related Risks We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term stockholder value.
Any of these incidents could lead to interruptions or shutdowns of our platforms, disruptions in our ability to process service requests, limit our ability to access data, result in the loss or corruption of data, or unauthorized access to, or acquisition of, personal information or other sensitive information, such as our intellectual property.
As we have seen with such incidents in the past, any of these incidents could lead to interruptions or shutdowns of our platforms, disruptions in our ability to process service requests, limit our ability to access data, result in the loss or corruption of data, or unauthorized access to, or acquisition of, personal information or other sensitive information, such as our intellectual property.
The inability of existing child care centers to maintain their current enrollment levels and profitability, the failure of newly opened child care centers to contribute to profitability, and the failure to maintain and grow our other services could result in additional fluctuations in our future operating results on a quarterly or annual basis.
The inability of existing child care centers to maintain their current enrollment levels and profitability, the failure of newly opened child care centers to contribute to profitability, the failure of clients’ employees to adopt or utilize back-up care, and the failure to maintain and grow our other services could result in additional fluctuations in our future operating results on a quarterly or annual basis.
We are also subject to evolving privacy laws on the use of artificial intelligence, certain categories of personal information (such as but not limited to child, medical, financial, and biometric), “cookies” and other similar tracking technologies.
We are also subject to evolving privacy laws on the use of AI, certain categories of personal data (such as but not limited to child, medical, financial, and biometric), “cookies” and other similar tracking technologies.
Given these challenges, we may be unable to manage our expanding operations effectively, or to maintain our growth, which could have a material adverse effect on our business or results of operations. 22 Table of Contents Acquisitions present many risks and may disrupt our operations.
Given these challenges, we may be unable to manage our expanding operations, and the associated costs, effectively, or to maintain our growth, which could have a material adverse effect on our business or results of operations. Acquisitions present many risks and may disrupt our operations.
The exclusive forum provision in our certificate of incorporation will not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.
The exclusive forum provision in our certificate of incorporation will not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. Item 1B. Unresolved Staff Comments None.
The factors impacting the international markets in which we operate may include changes in laws and regulations affecting the operation of child care centers, parent or tuition subsidies or other government financial support, the imposition of restrictions on currency conversion or the transfer of funds, or increases in the taxes paid and other changes in applicable tax laws.
The factors impacting the international markets in which we operate may include changes in laws and regulations affecting the operation of child care centers, increased regulatory oversight of the child care and early education industry, reduced, decreased or capped parent or tuition subsidies or other government financial support, the imposition of restrictions on currency conversion or the transfer of funds, or increases in the taxes paid and other changes in applicable tax laws.
Instability in European and other financial markets, or other geopolitical events, such as adverse global economic conditions, could cause fluctuations in exchange rates that may adversely affect our revenues and net earnings. Approximately 28% of our revenue was generated outside the United States in 2024.
Instability in European and other financial markets, or other geopolitical events, such as adverse global economic conditions, could cause fluctuations in exchange rates that may adversely affect our revenues and net earnings. Approximately 29% of our revenue was generated outside North America in 2025.
These claims and lawsuits could result in damages and other costs that our insurance may be inadequate to cover, may inhibit our ability to purchase adequate insurance coverages, may increase future insurance premium costs, or may result in licensing suspensions or revocation.
Any of the foregoing could result in damages and other costs that our insurance may be inadequate to cover, may inhibit our ability to purchase adequate insurance coverages, may increase future insurance premium costs, or may result in licensing suspensions or revocation.
The regulation of the use of cookies and other current online tracking and advertising practices or a loss in our ability to make effective use of services that employ such technologies could increase our costs of operations and limit our ability to acquire new customers on cost-effective terms and consequently, materially adversely affect our business, financial condition and operating results.
The regulation of the use of cookies and other online tracking and advertising practices or a loss in our ability to make effective use of services that employ such technologies could increase our costs of operations and limit our ability to acquire new customers on cost-effective terms and consequently, materially adversely affect our business, financial condition and operating results. 20 Table of Contents We depend on key management and key employees to manage our business and timing considerations.
In our international locations, we are highly dependent on our local management and operating staff to operate our centers in these markets in accordance with local law and best practices.
The success of our business depends on the actions of our employees. In our international locations, we are highly dependent on our local management and operating staff to operate our centers in these markets in accordance with local law and best practices.
Obsolete processes and/or skill gaps, a failure to innovate through technology or a failure to scale innovation could impede our ability to meet new or changing customer demands. Additionally, client unwillingness to adopt new technology enhancements, including artificial intelligence technology, could impact our return on investment.
Obsolete processes and/or skill gaps, a failure to innovate through technology or a failure to scale innovation could impede our ability to meet new or changing customer demands. Additionally, client unwillingness to adopt new technology enhancements that we develop and adopt to support our service delivery, including AI-driven technology, could impact our return on investment.
National, state or local child care benefit programs comprised primarily of subsidies in the form of tax credits or other direct government financial aid to parents may provide us opportunities for expansion in additional markets.
Governmental child care benefit programs could reduce the demand for our services or impact our revenue and profitability. National, state or local child care benefit programs comprised primarily of subsidies in the form of tax credits or other direct government financial aid to parents may provide us opportunities for expansion in additional markets.
In addition to diverting our management resources, such allegations may result in publicity that may materially and adversely affect us, our brands and our reputation, regardless of the validity of any such allegations.
In addition to diverting our management resources, such allegations have resulted and, in the future may result in publicity that may materially and adversely affect us, our brands, our reputation and client and family demand for our services, regardless of the validity of any such allegations.
Stock repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves. On December 16, 2021, our board of directors authorized a share repurchase program under which up to $400 million of our outstanding common stock may be repurchased, of which $113.7 million remained available as of December 31, 2024.
Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves. On June 3, 2025, our board of directors authorized a share repurchase program under which up to $500 million of our outstanding common stock may be repurchased, of which $329.4 million remained available as of December 31, 2025.
Our certificate of incorporation generally provides that the Court of Chancery of the State of Delaware or, solely if such court does not have subject matter jurisdiction thereof, the United States District Court for the District of Delaware, will be the exclusive forum for certain types of legal actions and proceedings that may be initiated by our stockholders, and the United States federal district courts will be the exclusive forum for legal actions arising under the Securities Act of 1933, as amended (the “Securities Act”), which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
As a result, you may lose your ability to sell your stock for a price in excess of the prevailing market price due to these protective measures, and efforts by stockholders to change our direction or management may be unsuccessful. 27 Table of Contents Our certificate of incorporation generally provides that the Court of Chancery of the State of Delaware or, solely if such court does not have subject matter jurisdiction thereof, the United States District Court for the District of Delaware, will be the exclusive forum for certain types of legal actions and proceedings that may be initiated by our stockholders, and the United States federal district courts will be the exclusive forum for legal actions arising under the Securities Act of 1933, as amended (the “Securities Act”), which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
If we are unable to hire and retain qualified teachers at a center, we have been, and may in the future be, required to constrain or reduce enrollment, close classrooms or centers, be prevented from accepting additional enrollment or hire temporary or agency staff, which can increase costs, in order to comply with such mandated ratios and requirements. 16 Table of Contents We have been and may continue to experience difficulty in attracting, hiring and retaining qualified teachers due to tight labor pools and general labor shortages.
If we are unable to hire and retain qualified teachers at a center, we have been, and may in the future be, required to constrain or reduce enrollment, close classrooms or centers, be prevented from accepting additional enrollment or hire temporary or agency staff, which can increase costs, in order to comply with such mandated ratios and requirements.
This may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms or at all. Insurers may also deny us coverage as to any future claim.
This may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms or at all. Insurers may also deny us coverage as to any future claim. Any of these results could harm our growth prospects, financial condition, business, and reputation.
Uncertainty or a deterioration in economic conditions, including global inflationary pressures impacting our clients and customers, or increased business expenses arising from potential expansion of tariff regulation, could lead to reduced demand for our services as employer clients may reduce or eliminate their sponsorship of work and family services, and prospective clients may not commit resources to such services or families may decrease or discontinue the use of our child care services.
Uncertainty or a deterioration in economic conditions, including global inflationary pressures impacting our clients and customers, or increased business expenses, such as those relating to changes to trade policy, including tariff regulation, could lead to reduced demand for our services as employer clients may reduce or eliminate their sponsorship of work and family services due to budget priorities, and prospective clients may not commit resources to such services.
Any reputational damage could have a material adverse effect on our brand value and our business, which, in turn, could have a material adverse effect on our financial condition and results of operations. 17 Table of Contents If we or our third-party vendors are subject to cyber-attacks, data breaches or other security incidents, or if there is a disruption or failure of our information technology systems or software, such events could expose us to liability and could adversely affect our financial condition and operating results.
If we or our third-party vendors are subject to cyber-attacks, data breaches or other security incidents, or if there is a disruption or failure of our information technology systems or software, such events could expose us to liability and could adversely affect our financial condition and operating results.
Changes in laws and regulations could impact the way we conduct business. Our early education and child care centers, back-up care, and educational advisory services are subject to numerous national, state and local regulations and licensing requirements.
Our early education and child care centers, back-up care, and educational advisory services are subject to numerous national, state and local regulations and licensing requirements.
Additionally, competition for teachers and staff, and costs associated with hiring, compensating, retaining, and training employees could result in significant cost increases, including costs to enhance employee compensation and benefit programs as an incentive and retentive tool. Our success depends on our ability to continue to pass along these costs and to control costs while meeting our changing labor needs.
Additionally, competition for teachers and staff, and costs associated with hiring, compensating, retaining, and training employees could result in significant cost increases, including medical benefit costs and costs to enhance employee compensation and benefit programs as an incentive and retentive tool.
There can be no assurance that any stock repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we determine to repurchase our stock and short-term stock price fluctuations could reduce the program’s effectiveness.
There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we determine to repurchase our stock and short-term stock price fluctuations could reduce the program’s effectiveness. 26 Table of Contents The price of our common stock could be volatile, and, as a result, you may not be able to resell your shares at or above the price you paid for them.
Such market pressures have required us to offer increased salaries, enhanced benefits and institute additional initiatives to maintain strong employee relations, which increase costs, and may further increase costs in the future.
We have been and may continue to experience difficulty in attracting, hiring and retaining qualified teachers due to tight labor pools and general labor shortages. Such market pressures have required us to offer increased salaries, enhanced benefits and institute additional initiatives to maintain strong employee relations, which increase costs, and may further increase costs in the future.
Any of these results could harm our growth prospects, financial condition, business, and reputation. 18 Table of Contents For additional information on our cybersecurity risk management, strategy and governance, see Item 1C, “ Cybersecurity,” of this Annual Report on Form 10-K.
For additional information on our cybersecurity risk management, strategy and governance, see Item 1C, “ Cybersecurity,” of this Annual Report on Form 10-K.
Additionally, changes in federal, state and local legislation or regulations regarding human capital management could increase compliance costs and obligations, impede our ability to recruit and retain talent, or our brand or reputation may be harmed. 24 Table of Contents Our tax rate is dependent on a number of factors, a change in any of which could impact our future tax rates and net income.
Additionally, changes in federal, state and local legislation or regulations regarding human capital management could increase compliance costs and obligations, impede our ability to recruit and retain talent, or our brand or reputation may be harmed.
Additionally, a health crisis could also impair our ability to hire and maintain an adequate level of staff and may have a disproportionate impact on our business compared to other companies that depend less on the provision of in-person services. 20 Table of Contents Other events beyond our control, including acts of violence (including violent acts in the workplace and school settings), war, terrorism and other international, regional, or local instability or conflicts, labor issues, embargoes, natural disasters such as earthquakes, tsunamis, hurricanes, typhoons or other adverse weather and climate conditions, whether occurring in the United States or abroad, could restrict or disrupt our operations.
Other events beyond our control, including acts of violence (including violent acts in the workplace and school settings), war, terrorism and other international, regional, or local instability or conflicts, labor issues, embargoes, natural disasters such as earthquakes, tsunamis, hurricanes, typhoons or other adverse weather and climate conditions, whether occurring in the United States or abroad, could restrict or disrupt our operations.
As a result, there can be no assurance that we or our vendors will not suffer a cybersecurity incident, that hackers or other unauthorized parties will not gain access to or exfiltrate personal information or other sensitive data, or that any such data compromise or unauthorized access will be discovered in a timely fashion.
As a result, there can be no assurance that we or our vendors will not suffer a cybersecurity incident, that hackers or other unauthorized parties will not gain access to or exfiltrate personal information or other sensitive data, or that any such data compromise or unauthorized access will be discovered in a timely fashion. 19 Table of Contents Like many businesses, we, and our third-party vendors, have in the past and will in the future continue to be subject to cybersecurity threats, cybersecurity incidents, and attempts to compromise and penetrate our data security and systems and disrupt our services.
If those systems are damaged, interrupted or cease to function properly or if our disaster recovery and business continuity plans fail, it may have a material adverse effect on our business or results of operations.
If those systems are damaged, interrupted or cease to function properly or if our disaster recovery and business continuity plans fail, it may have a material adverse effect on our business or results of operations. 21 Table of Contents We may not successfully incorporate AI into our business or adapt to a rapidly changing marketplace to meet client needs and expectations and compete in our business sector.
Stock may be purchased from time to time, in the open market at prevailing market prices, in private transactions, under Rule 10b5-1 plans, or by other means, subject to market conditions, in compliance with applicable state and federal securities laws.
Stock may be purchased from time to time, in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities law, including under Rule 10b5-1 plans or accelerated share repurchase programs.
Additionally, changes in government support programs in our international jurisdictions, such as the reduction of government-funded tuition subsidies, or legislation aimed at the cost of child care, such as tuition caps, could reduce the demand for our services in these markets or reduce revenue, adversely impacting our results of operations. 23 Table of Contents Litigation, Insurance, Tax and Regulatory Risks Our business activities subject us to litigation risks that may lead to significant reputational damage, monetary damages and other remedies and increase our litigation expense.
Additionally, changes in government support programs in our international jurisdictions, such as the reduction of government-funded tuition subsidies, or legislation aimed at the cost of child care, such as tuition caps, could reduce the demand for our services in these markets or reduce revenue, adversely impacting our results of operations.
Our international operations may be subject to additional risks related to litigation, including difficulties enforcing contractual obligations governed by foreign law due to differing interpretations of rights and obligations, limitations on the availability of insurance coverage and limits, compliance with multiple and potentially conflicting laws, new and potentially untested laws and judicial systems, and reduced or diminished protection of intellectual property.
Any such claims, allegations, lawsuits, regulatory action or the publicity resulting from these claims may have a material adverse effect on our business, reputation, results of operations and financial condition including, without limitation, adverse effects caused by increased cost or decreased availability of insurance and decreased demand for our services from employer sponsors and families. 24 Table of Contents Our international operations may be subject to additional risks related to litigation, including difficulties enforcing contractual obligations governed by foreign law due to differing interpretations of rights and obligations, limitations on the availability of insurance coverage and limits, compliance with multiple and potentially conflicting laws, new and potentially untested laws and judicial systems, and reduced or diminished protection of intellectual property.
In our back-up care and educational advisory services segments, we face competition from existing providers and new entrants into the market. We believe our ability to compete in these markets is dependent on prices for services, quality and timeliness of service delivery, and our digital platforms and offerings.
We believe our ability to compete in these markets is dependent on prices for services, quality and timeliness of service delivery, service offerings, our ability to fill back-up care requests and meet use demands, our digital platforms and overall user experience.
Some states and local jurisdictions currently offer universal pre-K or preschool programs in which we may or may not participate as a service provider. If these programs were to significantly expand, or our participation were constrained by program limitations or insufficient funding, it could have an adverse effect on our business, financial condition or results of operations.
If these programs were to significantly expand in new or current markets, or our participation were constrained by access, program limitations or insufficient funding, it could have an adverse effect on our business, financial condition or results of operations.
However, competitors may seek to provide alternative offerings or undercut pricing in these markets. If we are unable to maintain our competitive advantage, our growth could be adversely impacted and our future operating results negatively impacted. Governmental child care benefit programs could reduce the demand for our services or impact our revenue and profitability.
However, competitors are seeking to provide alternative offerings and pricing strategies in these markets that may be more attractive to current and potential clients. If we are unable to maintain our competitive advantage, our growth could be adversely impacted and our future operating results negatively impacted.
Under certain conditions, we may also seek to downsize, consolidate, reconfigure or close some of our locations, which in some cases requires a modification to an existing center lease.
As a result of ongoing portfolio reviews to align our operations with evolving customer needs and demand, we may seek to further downsize, consolidate, reconfigure or close some of our locations, which in some cases requires the termination of or a modification to an existing center lease.
Failure to meet these needs may result in client loss and reduced demand and could have a material impact on our financial results. We depend on key management and key employees to manage our business and timing considerations. Our success depends on the efforts, abilities and continued service of our senior leaders and other key employees.
Failure to meet these needs may result in client loss and reduced demand and could have a material impact on our financial results.
Any significant change in our jurisdictional earnings mix or in the tax laws in those jurisdictions could impact our future tax rates and net income in those periods and any increases in income tax rates or changes in income tax laws could have a material adverse impact on our financial results.
Any significant change in our jurisdictional earnings mix or in the tax laws in those jurisdictions could impact our future tax rates and net income in those periods and any increases in income tax rates or changes in income tax laws could have a material adverse impact on our financial results. 25 Table of Contents International Risks The success of our operations in international markets is highly dependent on the expertise of local management and operating staff, as well as the political, social, legal and economic operating conditions of each country in which we operate.
Brand value and our reputation can be severely damaged even by isolated incidents, particularly if the incidents receive considerable negative publicity or result in substantial litigation.
Brand value and our reputation can be severely damaged even by isolated incidents, particularly if they receive considerable negative publicity, such as recent incidents in both the U.S. and U.K. involving allegations of mistreatment and abuse of children by former employees.
In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price.
In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
Financing Related Risks Our substantial indebtedness could adversely affect our financial condition, and our variable interest rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly. We have a significant amount of indebtedness from borrowings outstanding under our senior secured credit facilities.
Further, certain clients may choose to restrict the use of AI in our services, which would limit our ability to employ AI capabilities as intended. Financing Related Risks Our substantial indebtedness could adversely affect our financial condition, and our variable interest rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly.
This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation. 26 Table of Contents Your percentage ownership may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
Your percentage ownership may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
Removed
Like many businesses, we, and our third-party vendors, have in the past and will in the future continue to be subject to cybersecurity threats, cybersecurity incidents, and attempts to compromise and penetrate our data security and systems and disrupt our services.
Added
Families may also decrease or discontinue the use of our child care services due to cost, convenience, reputation or other external factors.
Removed
Any such claim or the publicity resulting from claims may have a material adverse effect on our business, reputation, results of operations and financial condition including, without limitation, adverse effects caused by increased cost or decreased availability of insurance and decreased demand for our services from employer sponsors and families.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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These policies go through an internal review process and are approved by our internal Policy Board or Privacy and Security Steering Committee. We currently maintain a System and Organization Controls (“SOC”) Type 2 report for material applications and ISO 27001 and ISO 27701 certifications for the United States and United Kingdom.
These policies go through an internal review process and are approved by our internal Policy Board or Privacy and Security Steering Committee. We currently maintain a System and Organization Controls (“SOC”) Type 2 report for material applications and ISO 27001, ISO 27701 and ISO 22301 certifications for the United States and United Kingdom.
Our IT department and Information Security Office, supported by our Global Privacy Office, regularly evaluate cybersecurity risks. Cybersecurity risks are considered within our ERM framework, which are assigned risk owners to develop and manage mitigation programs. Our annual ERM program is reviewed and overseen by the Audit Committee and is presented to the Board annually.
Our IT department and Information Security Office, supported by our Global Privacy Officer, regularly evaluate cybersecurity risks. Cybersecurity risks are considered within our ERM framework, which are assigned risk owners to develop and manage mitigation programs. Our annual ERM program is reviewed and overseen by the Audit Committee and is presented to the Board annually.
Depending on location and level of access to data, vendors complete an information security questionnaire and/or provide an independent information security audit report and, for vendors unable to provide such audit reports, we take additional steps to assess their cybersecurity preparedness. We also include security and privacy addenda in our supplier contracts where applicable.
Depending on location and level of access to data, vendors complete an information security questionnaire and/or provide an independent information security audit report and, for vendors unable to provide such audit reports, we take additional steps to assess their cybersecurity preparedness. We also include security and privacy addenda in our supplier contracts when applicable.
Our Information Security Office regularly monitors alerts and threat levels, trends, and remediation efforts, conducts post-incident reviews, conducts maturity testing to assess our processes and procedures and the threat landscape, reviews our operational policies and procedures, and conducts an annual risk assessment as described above.
Our Information Security Office regularly monitors alerts and threat levels, trends, industry best practices, and remediation efforts, conducts post-incident reviews, conducts maturity testing to assess our processes and procedures and the threat landscape, reviews our operational policies and procedures, and conducts an annual risk assessment as described above.
Annually, our Internal Audit function conducts a security audit in accordance with the ISO 27001 standard. Third parties also play a role in our cybersecurity risk management and strategy. We contract with a third-party cybersecurity incident response team to assist in the management of cybersecurity threats.
Annually, our Internal Audit function conducts a security audit in accordance with the ISO 27001 standard. Third parties also play a role in our cybersecurity risk management and strategy. We maintain relationships with third-party cybersecurity incident response teams to assist in the management of cybersecurity threats.
We continue to invest in the security and strength of our networks and to enhance our internal controls and processes, which are designed to help protect our systems, infrastructure, and data.
Impact of Cyber Risk on our Business We face a number of cybersecurity risks in connection with our business. We continue to invest in the security and strength of our networks and to enhance our internal controls and processes, which are designed to help protect our systems, infrastructure, and data.
To date, risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, such as the December 2022 cybersecurity incident, have not materially affected our business strategy, results of operations or financial condition. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.
To date, risks from cybersecurity threats, including previous cybersecurity incidents, have not materially affected our business strategy, results of operations or financial condition. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. For more information regarding the risks we face from cybersecurity threats, please see Item 1A, “ Risk Factors .”
Our Audit Committee regularly discusses and, at least annually, reviews with management, including our CIO, CISO, and Global Privacy Officer, our cyber, information security, and data privacy risks and programs.
While our Board has ultimate responsibility for overseeing our cyber risk, our Audit Committee oversees risks related to cybersecurity threats, data protection, data privacy and business continuity. Our Audit Committee regularly discusses and, at least annually, reviews with management, including our CIO, CISO, and Global Privacy Officer, our cyber, information security, and data privacy risks and programs.
Depending on the nature and severity of an incident, this process includes review by an incident response team, made up of members of the Information Security Office, with escalating notifications up to our CIO, Legal Department, CFO, and CEO followed by our Audit Committee and the full Board.
Depending on the nature and severity of an incident, this process includes review by an incident response team, made up of members of the Information Security Office, with escalating notifications up to our CIO, Legal Department, CFO, and CEO followed by our Audit Committee and the full Board. 29 Table of Contents Oversight of Third-Party Providers When engaging with third-party providers or suppliers with access to our network, systems or data or a third party providing cybersecurity support or infrastructure, we assess and evaluate their cybersecurity and disaster recovery preparedness.
We believe that these steps are useful tools in identifying and assessing risks, giving our team key information and insights used to manage those risks to help protect our clients, families, employees, vendors, investors, and our data and intellectual property. 28 Table of Contents Employees are required to complete a cybersecurity training annually specific to their role and we also require employees in certain other roles to complete additional role-based, specialized cybersecurity trainings.
We believe that these steps are useful tools in identifying and assessing risks, giving our team key information and insights used to manage those risks to help protect our clients, families, employees, vendors, stockholders, and our data and intellectual property.
Our CISO, under the supervision and direction of the CIO, is responsible for developing and implementing our information security program. Our Executive Committee, made up of senior leaders across the organization, including our CIO, receives periodic reports from our CIO on both the state of our IT department and Information Security Office and on our cybersecurity programs.
Our Executive Committee, made up of senior leaders across the organization, including our CIO, receives periodic reports from our CIO on both the state of our IT department and Information Security Office and on our cybersecurity programs. 28 Table of Contents Our Board administers its risk oversight role directly and through its committee structure.
Our assessment of cybersecurity threats associated with our third-party providers is part of our overall cybersecurity risk management framework. Impact of Cyber Risk on our Business We face a number of cybersecurity risks in connection with our business.
Our assessment of cybersecurity threats associated with our third-party providers is part of our overall cybersecurity risk management framework, and certain vendors are assessed for security, privacy and AI (if applicable) risks, and are assigned an assessment cadence based on their access and risk profile. Certain critical vendors are continuously monitored using a third-party monitoring software.
Removed
Our Board administers its risk oversight role directly and through its committee structure. While our Board has ultimate responsibility for overseeing our cyber risk, our Audit Committee oversees risks related to cybersecurity threats, data protection, data privacy and business continuity.
Added
Our CISO, under the supervision and direction of the CIO, is responsible for developing and implementing our information security program.
Removed
Oversight of Third-Party Providers When engaging with third-party providers or suppliers with access to our network, systems or data or a third party providing cybersecurity support or infrastructure, we assess and evaluate their cybersecurity and disaster recovery preparedness.
Added
Depending on their role, employees are required to complete a cybersecurity training annually and we also require employees in certain other roles to complete additional role-based, specialized cybersecurity trainings.
Removed
For more information regarding the risks we face from cybersecurity threats, please see Item 1A, “ Risk Factors .”

Item 2. Properties

Properties — owned and leased real estate

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Leases typically have initial terms ranging from 10 to 15 years, generally with renewal options. 29 Table of Contents The following table summarizes the locations of our early education and child care centers as of December 31, 2024: Location Number of Centers United States 599 United Kingdom 268 Australia 80 Netherlands 70 India 2 1,019 We believe that our properties are generally in good condition, are adequate for our operations, and meet or exceed the regulatory requirements for health, safety and child care licensing established by the governments where they are located.
The following table summarizes the locations of our early education and child care centers as of December 31, 2025: Location Number of Centers United States 597 United Kingdom 263 Australia 78 Netherlands 70 India 2 1,010 We believe that our properties are generally in good condition, are adequate for our operations, and meet or exceed the regulatory requirements for health, safety and child care licensing established by the governments where they are located.
As of December 31, 2024, we operated 1,019 early education and child care centers across the United States, and in the United Kingdom, the Netherlands, Australia and India, of which 118 were owned, with the remaining centers being operated under operating leases or service agreements.
As of December 31, 2025, we operated 1,010 early education and child care centers across the United States, and in the United Kingdom, the Netherlands, Australia and India, of which 119 were owned, with the remaining centers being operated under operating leases or service agreements. Leases typically have initial terms ranging from 10 to 15 years, generally with renewal options.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Refer to Note 20, Commitments and Contingencies, to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information.
Refer to Note 19, Commitments and Contingencies, to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information.
Such claims have in the past generally been covered by insurance, but there can be no assurance that our insurance will be adequate to cover all liabilities that may arise out of claims or matters brought against us.
There can be no assurance that our insurance coverage will be adequate to cover all liabilities that may arise out of claims or matters brought against us.
Item 3. Legal Proceedings We are, from time to time, subject to claims, suits, and matters arising in the ordinary course of business.
Item 3. Legal Proceedings We are, from time to time, subject to claims, suits, and matters arising in the ordinary course of business. Such claims have in the past generally been covered by insurance. A portion of our general liability coverage is provided by our wholly-owned captive insurance company.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Prior to joining Bright Horizons in 1995, Ms. Burke Afonso served as the controller for BOSE Corporation in France and worked on the audit staff at Price Waterhouse, LLP in Boston. John G. Casagrande, age 66, has served as General Counsel of the Company since January 2010 and as Secretary since December 2019. Mr.
Prior to joining Bright Horizons in 1995, Ms. Burke Afonso served as the controller for BOSE Corporation in France and worked on the audit staff at Price Waterhouse, LLP in Boston. John G. Casagrande, age 67, has served as General Counsel of the Company since January 2010 and as Secretary since December 2019. Mr.
Kramer , age 54, has served as Chief Executive Officer and a director of the Company since January 2018 and as President of the Company since January 2016. Mr. Kramer served as the Chief Development Officer from January 2014 until January 2016 and as Senior Vice President, Strategic Growth & Global Operations from January 2010 until December 2013.
Kramer , age 55, has served as Chief Executive Officer and a director of the Company since January 2018 and as President of the Company since January 2016. Mr. Kramer served as the Chief Development Officer from January 2014 until January 2016 and as Senior Vice President, Strategic Growth & Global Operations from January 2010 until December 2013.
Item 4. Mine Safety Disclosures Not applicable. 30 Table of Contents Information about our Executive Officers Set forth below is certain information about our executive officers. Ages are as of December 31, 2024. Stephen H.
Item 4. Mine Safety Disclosures Not applicable. 30 Table of Contents Information about our Executive Officers Set forth below is certain information about our executive officers. Ages are as of December 31, 2025. Stephen H.
Marshall was the Chief Executive Officer of Taaleem from 2013 to 2019, the second largest international school group in the United Arab Emirates. From 2010 to 2013, Ms. Marshall served as Chief Executive Officer of Kidsunlimited Group Limited, which was acquired by Bright Horizons in 2013. Ms.
Prior to joining the Company, Ms. Marshall was the Chief Executive Officer of Taaleem from 2013 to 2019, the second largest international school group in the United Arab Emirates. From 2010 to 2013, Ms. Marshall served as Chief Executive Officer of Kidsunlimited Group Limited, which was acquired by Bright Horizons in 2013. Ms.
Mary Lou Burke Afonso, age 60, has served as Chief Operating Officer, North America Center Operations of the Company since January 2016 and is a 29-year veteran of the Company. Ms.
Mary Lou Burke Afonso, age 61, has served as Chief Operating Officer, North America Center Operations of the Company since January 2016 and is a 30-year veteran of the Company. Ms.
Mandy Berman , age 54, has served as Chief Operating Officer, Back-up Care and Emerging Care Services since February 2023. Prior to re-joining the Company, Ms.
Mandy Berman , age 55, has served as Chief Operating Officer, Back-up Care and Educational Advisory Services since January 2026 and as Chief Operating Officer, Back-up Care and Emerging Care Services from February 2023 to December 2025. Prior to re-joining the Company, Ms.
Berman has served as a member of the Board of HarborOne Bank (NASDAQ: HONE) since 2019. Ros Marshall , age 65, has served as Managing Director, International since July 2022. Ms. Marshall joined the Company as Managing Director, United Kingdom in January 2020. Prior to joining the Company, Ms.
Berman first joined the Company through the acquisition of ChildrenFirst, Inc. in 2005. Ms. Berman served as a member of the Board of HarborOne Bank (NASDAQ: HONE) from January 2019 until October 2025. Ros Marshall , age 66, has served as Managing Director, International since July 2022. Ms. Marshall joined the Company as Managing Director, United Kingdom in January 2020.
Berman served as Executive Vice President and Chief Administrative Officer of the Company from January 2016 to February 2019 when she was responsible for Back-up Care, IT, and client reporting. From January 2014 until December 2015, Ms.
Berman served as Executive Vice President and Chief Administrative Officer of the Company from January 2016 to February 2019. From January 2014 until December 2015, Ms. Berman served as Executive Vice President, Back-up and Global Operations and, from September 2005 to December 2013, she served as Vice President, Back-up Care Operations and then Senior Vice President, Back-up Care Operations. Ms.
He served as Managing Director, United Kingdom from January 2008 until December 2009. He joined Bright Horizons in September 2006 through the acquisition of College Coach, which he co-founded and led for eight years. Elizabeth J. Boland, age 65, has served as Chief Financial Officer of the Company since June 1999. Ms.
He served as Managing Director, United Kingdom from January 2008 until December 2009. He joined Bright Horizons in September 2006 through the acquisition of College Coach, which he co-founded and led for eight years. Mr. Kramer currently serves on the board of directors of Domino's Pizza, Inc.
Removed
Berman served as Executive Vice President, Back-up and Global Operations and, from September 2005 to December 2013, she served as Vice President, Back-up Care Operations and then Senior Vice President, Back-up Care Operations. Ms. Berman first joined the Company through the acquisition of ChildrenFirst, Inc. in 2005. Ms.
Added
(NASDAQ: DPZ) and as a member of their Audit Committee and Compensation and Human Capital Committee. Elizabeth J. Boland, age 66, has served as Chief Financial Officer of the Company since June 1999. Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The following graph compares the total return to stockholders of our common stock for the past five years through December 31, 2024, relative to the total return of the following: • the New York Stock Exchange Composite Index; and • the Russell Midcap Growth Index.
The following graph compares the total return to stockholders of our common stock for the past five years through December 31, 2025, relative to the total return of the following: • the New York Stock Exchange Composite Index; and • the Russell Midcap Growth Index.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market Our common stock is listed on the NYSE under the ticker symbol “BFAM.” As of February 14, 2025, there were 12 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Principal Market Our common stock is listed on the NYSE under the ticker symbol “BFAM.” As of February 13, 2026, there were four holders of record of our common stock.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (a) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1) (b) Number of Securities Remaining Available For Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,261,696 $ 82.78 1,231,562 Equity compensation plans not approved by security holders — — — Total 2,261,696 $ 82.78 1,231,562 (1) The number of securities includes 848,868 shares that may be issued upon the settlement of restricted stock units and performance restricted stock units.
Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) (a) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1) (b) Number of Securities Remaining Available For Future Issuance under Equity Compensation Plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 2,010,276 $ 136.88 1,037,611 Equity compensation plans not approved by security holders — — — Total 2,010,276 $ 136.88 1,037,611 (1) The number of securities includes 773,717 shares that may be issued upon the settlement of restricted stock units and performance restricted stock units.
Performance Graph The following performance graph and related information shall not be deemed to be “ soliciting material ” or to be “ filed ” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
The restricted stock units and performance restricted stock units are excluded from the weighted average exercise price calculation. 32 Table of Contents Performance Graph The following performance graph and related information shall not be deemed to be “ soliciting material ” or to be “ filed ” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference into such filing.
(3) The number shown represents, as of the end of each period, the approximate dollar value of the Company's outstanding common stock that may yet be purchased under the Company’s publicly announced share repurchase program as described in footnote (2) above.
(2) The number shown represents, as of the end of each period, the approximate dollar value of the Company's outstanding common stock that may yet be purchased under the Company’s publicly announced share repurchase program as described in footnote (1) above. Such shares may be purchased, from time to time, depending on business and market conditions.
Such shares may be purchased, from time to time, depending on business and market conditions. 32 Table of Contents Equity Compensation Plans The following table provides information as of December 31, 2024 with respect to shares of our common stock that may be issued under existing equity compensation plans.
Equity Compensation Plans The following table provides information as of December 31, 2025 with respect to shares of our common stock that may be issued under existing equity compensation plans.
No dividends have been declared or paid on our common stock. The stock price performance shown in the graph is not necessarily indicative of future performance.
The graph assumes that $100 was invested in our common stock, and in the indices noted above, and that all dividends, if any, were reinvested. No dividends have been declared or paid on our common stock. The stock price performance shown in the graph is not necessarily indicative of future performance.
The Russell Midcap Growth Index is a subset of the Russell 1000 Index and is composed of select companies from the 800 smallest companies of the Russell 1000 Index (Russell Midcap Index) that display higher price-to-book ratios and higher forecasted growth values. 33 Table of Contents The graph assumes that $100 was invested in our common stock, and in the indices noted above, and that all dividends, if any, were reinvested.
The Russell Midcap Growth Index is a subset of the Russell 1000 Index and is composed of select companies from approximately 800 of the smallest companies of the Russell 1000 Index (Russell Midcap Index) that display higher price-to-book ratios and higher forecasted growth values.
(2) The board of directors of the Company authorized a share repurchase program of up to $400 million of the Company’s outstanding common stock effective December 16, 2021. The Company purchased 754,090 shares under the board-authorized program during the three months ended December 31, 2024. The share repurchase program has no expiration date. All repurchased shares have been retired.
The Company purchased 1,187,068 shares under the board-authorized program during the three months ended December 31, 2025. The share repurchase program has no expiration date. All repurchased shares have been retired.
Issuer Purchases of Equity Securities The table below sets forth information regarding purchases of our common stock during the three months ended December 31, 2024: Period Total Number of Shares (or Units) Purchased (1) (a) Average Price Paid per Share (or Unit) (b) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) (c) Approximate Dollar Value of Shares/Units that May Yet Be Purchased Under the Plans or Programs (In thousands) (3) (d) October 1, 2024 - October 31, 2024 — $ — — $ 198,290 November 1, 2024 - November 30, 2024 582,069 $ 112.42 580,000 $ 133,095 December 1, 2024 - December 31, 2024 175,150 $ 111.39 174,090 $ 113,708 757,219 754,090 (1) The Company purchased an aggregate of 3,129 shares during the three months ended December 31, 2024, which shares were withheld for tax payments due upon the vesting of employee restricted stock and restricted stock unit awards.
Issuer Purchases of Equity Securities The table below sets forth information regarding purchases of our common stock during the three months ended December 31, 2025: Period Total Number of Shares (or Units) Purchased (a) Average Price Paid per Share (or Unit) (b) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) (c) Approximate Dollar Value of Shares/Units that May Yet Be Purchased Under the Plans or Programs (In thousands) (2) (d) October 1, 2025 - October 31, 2025 247,639 $ 100.93 247,639 $ 423,799 November 1, 2025 - November 30, 2025 519,216 $ 98.95 519,216 $ 372,421 December 1, 2025 - December 31, 2025 420,213 $ 102.31 420,213 $ 329,429 1,187,068 1,187,068 (1) The board of directors of the Company authorized a share repurchase program of up to $500 million of the Company’s outstanding common stock effective June 3, 2025.
Years ended December 31, 2019 2020 2021 2022 2023 2024 Bright Horizons Family Solutions Inc. $ 100.00 $ 115.09 $ 83.74 $ 41.97 $ 62.67 $ 73.71 NYSE Composite Index $ 100.00 $ 106.99 $ 129.11 $ 117.04 $ 133.16 $ 154.19 Russell Midcap Growth Index $ 100.00 $ 135.59 $ 152.84 $ 112.00 $ 140.97 $ 172.13 Note: Underlying data provided by Zacks Investment Research, Inc.
Years ended December 31, 2020 2021 2022 2023 2024 2025 Bright Horizons Family Solutions Inc. $ 100.00 $ 72.76 $ 36.47 $ 54.46 $ 64.05 $ 58.58 NYSE Composite Index $ 100.00 $ 120.68 $ 109.39 $ 124.46 $ 144.12 $ 169.62 Russell Midcap Growth Index $ 100.00 $ 112.73 $ 82.61 $ 103.97 $ 126.96 $ 137.95 Note: Underlying data provided by Zacks Investment Research, Inc.
Removed
The shares were valued using the transaction date and closing stock price for purposes of such tax withholdings. Shares retired in connection with the payment of tax withholding obligations are not included in, and are not counted against, our share repurchase authorization.
Removed
The restricted stock units and performance restricted stock units are excluded from the weighted average exercise price calculation.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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. 41 Table of Contents 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.
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. 40 Table of Contents 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.
Refer to Note 12, Credit Arrangements and Debt Obligations , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information on our debt and credit arrangements, future principal payments of long-term debt, and covenant requirements. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.
Refer to Note 11, Credit Arrangements and Debt Obligations , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information on our debt and credit arrangements, future principal payments of long-term debt, and covenant requirements. Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. GAAP.
If the transaction price may be subject to adjustment, significant judgment may be required to ensure that it is probable that significant reversal in the amount of cumulative revenue recognized will not occur. As of December 31, 2024 and 2023, there were no material estimates related to the constraint of cumulative revenue recognized.
If the transaction price may be subject to adjustment, significant judgment may be required to ensure that it is probable that significant reversal in the amount of cumulative revenue recognized will not occur. As of December 31, 2025 and 2024, there were no material estimates related to the constraint of cumulative revenue recognized.
For discussion and comparison for the fiscal years ended December 31, 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024.
For discussion and comparison for the fiscal years ended December 31, 2024 and 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025.
The application of these policies to the services provided by each of our segments is discussed below. 44 Table of Contents Our revenue recognition policy generally does not have significant judgments or estimates that significantly affect the determination of the amount, the allocation of the transaction price to performance obligations, or timing of revenue from contracts with customers.
The application of these policies to the services provided by each of our segments is discussed below. Our revenue recognition policy generally does not have significant judgments or estimates that significantly affect the determination of the amount, the allocation of the transaction price to performance obligations, or timing of revenue from contracts with customers.
If the projected revenues and profitability used in the valuation calculations are not met, then the intangible assets could be impaired. Our multi-year contracts with client customers typically result in low annual turnover, and our long-term relationships with clients make it difficult for competitors to displace us.
If the projected revenues and profitability used in the valuation calculations are not met, then the intangible assets could be impaired. Our multi-year contracts with employer-clients typically result in low annual turnover, and our long-term relationships with clients make it difficult for competitors to displace us.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our results of operations for the fiscal years ended December 31, 2024 and 2023 and provides comparisons between such fiscal years.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations generally discusses our results of operations for the fiscal years ended December 31, 2025 and 2024 and provides comparisons between such fiscal years.
Refer to Note 15, Stockholders’ Equity and Stock-based Compensation , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional details.
Refer to Note 14, Stockholders’ Equity and Stock-based Compensation , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional details.
Based on our current interest rate projections, we estimate that our overall weighted average interest rate will approximate 5.00% for 2025, inclusive of the effects of cash flow hedges.
Based on our current interest rate projections, we estimate that our overall weighted average interest rate will approximate 5.00% for 2026, inclusive of the effects of cash flow hedges.
Operations outside of North America accounted for 28% and 27% of our consolidated revenue for the years ended December 31, 2024 and 2023, respectively. The net impact on our liquidity from changes in foreign currency exchange rates was not material for the years ended December 31, 2024 and 2023.
Operations outside of North America accounted for 29% and 28% of our consolidated revenue for the years ended December 31, 2025 and 2024, respectively. The net impact on our liquidity from changes in foreign currency exchange rates was not material for the years ended December 31, 2025 and 2024.
The difference between the effective income tax rates as compared to the statutory income tax rates was primarily due to the impact of unbenefited losses in certain foreign jurisdictions and the effects of excess (shortfall) tax benefit (expense) associated with the exercise or expiration of stock options and vesting of restricted stock.
The difference between the effective income tax rates as compared to the statutory income tax rates was primarily due to the impact of unbenefited losses and net operating loss carryforwards used in certain foreign jurisdictions and the effects of excess tax benefit (shortfall tax expense) associated with the exercise or expiration of stock options and vesting of restricted stock.
At December 31, 2024, we managed child care centers on behalf of single employers in the following industries and also managed lease/consortium locations in approximately the following proportions: Percentage of Centers Classification North America International Employer locations: Healthcare and Pharmaceuticals 20.0 % 2.0 % Government and Higher Education 12.5 2.0 Financial Services 7.5 2.0 Consumer 7.5 — Technology 5.0 — Professional Services and Other 5.0 — Industrial/Manufacturing 2.5 1.0 60.0 7.0 Lease/consortium locations 40.0 93.0 100.0 % 100.0 % Our reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory services.
At December 31, 2025, we managed child care centers on behalf of single employers in the following industries and also managed lease/consortium locations in approximately the following proportions: Percentage of Centers Classification North America Outside North America Employer locations: Healthcare and Pharmaceuticals 22.5 % 2.0 % Government and Higher Education 12.5 2.0 Financial Services 7.5 2.0 Consumer 7.5 — Professional Services and Other 5.0 — Industrial/Manufacturing 2.5 1.0 Technology 2.5 — 60.0 7.0 Lease/consortium locations 40.0 93.0 100.0 % 100.0 % 34 Table of Contents Our reportable segments are comprised of (1) full service center-based child care, (2) back-up care, and (3) educational advisory services.
However, if we were to experience disruption from events not in our control, such as a global health crisis, 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.
However, 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.
The blended weighted average interest rates for the term loans and revolving credit facility were 4.88% and 4.11% for the years ended December 31, 2024 and 2023, respectively, inclusive of the effects of cash flow hedges.
The blended weighted average interest rates for the term loans and revolving credit facility were 4.42% and 4.88% for the years ended December 31, 2025 and 2024, respectively, inclusive of the effects of cash flow hedges.
Gross profit margin was 23% of revenue for the year ended December 31, 2024, a 1% increase compared to 22% for the year ended December 31, 2023. Selling, General and Administrative Expenses (“SGA”).
Gross profit margin was 24% of revenue for the year ended December 31, 2025, a 1% increase compared to 23% for the year ended December 31, 2024. Selling, General and Administrative Expenses (“SGA”).
In performing the goodwill impairment test, we may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying value.
Goodwill impairment assessments are performed at the reporting unit level. In performing the goodwill impairment test, we may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying value.
Adjusted net income increased $38.9 million, or 24%, for the year ended December 31, 2024 when compared to the same period in 2023, primarily due to the increase in adjusted income from operations and lower interest expense. 39 Table of Contents 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.
Adjusted net income increased $58.3 million, or 29%, for the year ended December 31, 2025 when compared to the same period in 2024, primarily due to the increase in adjusted income from operations and lower interest expense and effective tax rate. 38 Table of Contents 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.
Based on our current interest rate projections, we estimate that our overall weighted average interest rate will approximate 5.00% for 2025 inclusive of the effects of cash flow hedges. 38 Table of Contents Income Tax Expense.
Based on our current interest rate projections, we estimate that our overall weighted average interest rate will approximate 5.00% for 2026 inclusive of the effects of cash flow hedges. Income Tax Expense.
Based on the interest rates in effect as of December 31, 2024, interest payments on the outstanding principal balance of the term loans, including commitment fees on the revolving credit facility, are expected to range between $30 million and $60 million annually over the remaining term, prior to the inclusion of the effects of cash flow hedges.
Based on the interest rates in effect as of December 31, 2025, interest payments on the outstanding principal balance of the term loan B, including commitment fees on the revolving credit facility, are expected to range between $20 million and $30 million annually over the remaining term, prior to the inclusion of the effects of cash flow hedges.
During the year ended December 31, 2024, we made payments for deferred and contingent consideration of $103.9 million, of which $97.7 million related to the deferred consideration for the 2022 acquisition of Only About Children and $6.2 million related to the contingent consideration for a 2021 acquisition, compared to $0.2 million for payments of contingent consideration during the same period in 2023.
During the year ended December 31, 2024, we made payments for deferred and contingent consideration of $103.9 million, of which $97.7 million related to the deferred consideration for the 2022 acquisition of Only About Children and $6.2 million related to the contingent consideration for a 2021 acquisition.
Adjusted EBITDA and adjusted income from operations increased $57.2 million, or 16%, and $65.2 million, or 31%, respectively, for the year ended December 31, 2024 over the comparable period in 2023 primarily due to the incremental gross profit contributions from the full service center-based child care segment resulting from enrollment growth and tuition price increases and from the back-up care segment resulting from increased utilization.
Adjusted EBITDA and adjusted income from operations increased $78.2 million, or 19%, and $85.7 million, or 31%, respectively, for the year ended December 31, 2025 over the comparable period in 2024 primarily due to the incremental gross profit contributions from the back-up care segment resulting from increased utilization and from the full service center-based child care segment resulting from tuition price increases and enrollment growth.
(f) Adjusted income tax expense represents income tax expense calculated on adjusted income before income tax at an effective tax rate of approximately 28% for each of the years ended December 31, 2024 and 2023.
(f) Adjusted income tax expense represents income tax expense calculated on adjusted income before income tax at an effective tax rate of approximately 27% and 28% for the years ended December 31, 2025 and 2024, respectively.
As we continue to navigate this dynamic operating environment, we remain committed to serving the needs of families, clients and our employees. 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.
We are committed to serving the needs of families, clients and our employees. 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.
Our primary sources of liquidity are our existing cash, cash flows from operations, and borrowings available under our revolving credit facility.
Our primary sources of liquidity are our existing cash, cash flows from operations, and borrowings available under our $900 million multi-currency revolving credit facility.
Tuition revenue increased by $166.3 million, or 10%, when compared to the prior year, due to a 4% net increase in enrollment and average tuition rate increases at our child care centers of approximately 5%.
Tuition revenue increased by $114.8 million, or 6%, when compared to the prior year, due to average tuition rate increases at our child care centers of approximately 4-5% and a 1% net increase in enrollment.
We have other significant accounting policies that are more fully described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. Both our critical and significant accounting policies are important to an understanding of the consolidated financial statements.
We have other significant accounting policies that are more fully described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Educational Advisory Services Our educational advisory services consist of tuition assistance and student loan repayment program management, workforce education, and related educational consulting services (“EdAssist”), and college admissions and college financing advisory services (“College Coach”).
Educational Advisory Services Our educational advisory services consist of tuition assistance and student loan repayment program management, workforce education, and related educational consulting services (EdAssist), and college admissions and college financing advisory services (College Coach).
The effective income tax rate would have approximated 27% and 28% for the years ended December 31, 2024 and 2023, respectively, prior to the inclusion of the excess (shortfall) tax benefit (expense), other discrete items, and unbenefited losses in certain foreign jurisdictions. Adjusted EBITDA and Adjusted Income from Operations.
The effective income tax rate would have approximated 27% for each of the years ended December 31, 2025 and 2024, prior to the inclusion of the excess tax benefit (shortfall tax expense), other discrete items and unbenefited losses/net operating loss utilization in certain foreign jurisdictions. Adjusted EBITDA and Adjusted Income from Operations.
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, such as impairment losses, debt refinance costs, value-added tax expense related to prior periods and at times, other non-recurring costs, such as transaction costs.
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, such as impairment and net lease termination costs, debt refinance costs and at times, other non-recurring costs, such as transaction costs.
Customer relationships are considered to be finite-lived assets, with estimated lives typically ranging from 2 to 17 years. Certain trade names acquired as part of our strategy to expand by completing strategic acquisitions are considered to be finite-lived assets, with estimated lives typically ranging from 2 to 10 years. Goodwill and certain trade names are considered to be indefinite-lived assets.
Certain trade names acquired as part of our strategy to expand by completing strategic acquisitions are considered to be finite-lived assets, with estimated lives typically ranging from 4 to 10 years. 45 Table of Contents Goodwill and certain trade names are considered to be indefinite-lived assets.
The transaction price of a contract is allocated to each distinct performance obligation using the relative stand-alone selling price and recognized as revenue when, or as, control of the service is passed to the customer.
At contract inception, we assess the services promised in the contract and identify each distinct performance obligation. The transaction price of a contract is allocated to each distinct performance obligation using the relative stand-alone selling price and recognized as revenue when, or as, control of the service is passed to the customer.
During the year ended December 31, 2024, we recorded impairment charges for long-lived assets of $30.9 million related to fixed assets, operating lease right-of-use assets and intangibles.
During the year ended December 31, 2025, we recorded impairment charges for long-lived assets of $47.5 million related to fixed assets and operating lease right-of-use assets.
For the year ended December 31, 2024, impairment losses recognized in the fourth quarter totaled $30.3 million, of which $29.2 million related to the full service center-based child care segment and $1.1 million related to the back-up care segment.
For the year ended December 31, 2024, impairment and net lease termination costs totaled $30.3 million, of which $29.2 million related to the full service center-based child care segment and $1.1 million related to the back-up care segment.
The increase in cost of services correlates to the increase in revenue and is primarily associated with higher care provider fees generated by the increase in utilization levels of center-based and in-home back-up care over the prior year, and continued investment in personnel, marketing and technology to support our customer user experience and service offerings.
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 of center-based care, in-home care, and school-age programs over the prior year, and continued investment in technology to support our customer user experience and service offerings.
However, actual interest paid may be different from these estimates based on changes in interest rates and borrowings outstanding. 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.
However, actual interest paid may be different from these estimates based on changes in interest rates and borrowings outstanding. The revolving credit facility requires 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.
We recorded an income tax expense of $57.7 million during the year ended December 31, 2024, at an effective income tax rate of 29%, compared to income tax expense of $45.4 million, at an effective income tax rate of 38%, during the prior year.
We recorded an income tax expense of $76.8 million during the year ended December 31, 2025, at an effective income tax rate of 28%, compared to income tax expense of $57.7 million, at an effective income tax rate of 29%, during the prior year.
(b) Impairment losses represent impairment costs, primarily for long-lived assets, associated with our annual impairment assessment arising from center closures, changes in market assumptions and reduced operating performance at certain centers.
(b) Impairment and net lease termination costs represent impairment costs, primarily for long-lived assets, arising from center closures, changes in market assumptions and reduced operating performance at certain centers.
In addition, during the year ended December 31, 2024, we had net investments of $95.3 million in fixed asset purchases for maintenance and refurbishments in our existing centers, technology across all segments, and new child care centers, compared to net investments of $90.8 million during the prior year, a net increase of $4.5 million.
In addition, for the year ended December 31, 2025, we had net investments of $91.3 million in fixed asset purchases for maintenance and refurbishments in our existing centers, technology, and new child care centers, compared to net investments of $95.3 million in the prior year, a net decrease of $4.0 million.
We had $110.3 million in cash ($123.7 million including restricted cash) at December 31, 2024, of which $45.5 million was held in foreign jurisdictions, compared to $71.6 million in cash ($89.5 million including restricted cash) at December 31, 2023, of which $32.1 million was held in foreign jurisdictions.
We had $140.1 million in cash ($143.2 million including restricted cash) at December 31, 2025, of which $66.3 million was held in foreign jurisdictions, compared to $110.3 million in cash ($123.7 million including restricted cash) at December 31, 2024, of which $45.5 million was held in foreign jurisdictions.
As we continue growing enrollment, we expect to allocate capital to investments that support current operations and strategic opportunities, as well as the principal and interest payments on our debt, including voluntary prepayments, and revolver, and share repurchases from time to time.
As we continue growing enrollment, expanding sales and increasing utilization of back-up services, we expect to allocate capital to investments that support current operations and strategic opportunities, as well as make interest payments on our debt, voluntary prepayments of principal on our debt and revolver balances and share repurchases from time to time.
The blended weighted average interest rate for the term loans and revolving credit facility was 4.88%, and 4.11% for the years ended December 31, 2024 and 2023, respectively, including the impact of the cash flow hedges.
The blended weighted average interest rate for the term loans and revolving credit facility was 4.42%, and 4.88% for the years ended December 31, 2025 and 2024, respectively, including the impact of the cash flow hedges. The weighted average interest rate of the Australian uncommitted working capital credit facility was 5.55% for the year ended December 31, 2025.
This cohort of centers totaled 768 centers as of December 31, 2024. For the quarter ended December 31, 2024, 39% of these centers were more than 70% enrolled, 45% were between 40-70% enrolled and 16% were less than 40% enrolled, which reflects improved occupancy when compared to the same period in the prior year.
For the quarter ended December 31, 2025, 40% of these centers were more than 70% enrolled, 48% were between 40-70% enrolled and 12% were less than 40% enrolled, which reflects improved occupancy when compared to the same period in the prior year.
Cost of services increased $179.9 million, or 10%, to $2.1 billion for the year ended December 31, 2024 from $1.9 billion for the prior year. Cost of services in the full service center-based child care segment increased by $143.2 million, or 9%, to $1.7 billion in the year ended December 31, 2024, when compared to the prior year.
Cost of services in the full service center-based child care segment increased by $116.8 million, or 7%, to $1.8 billion in the year ended December 31, 2025, when compared to the prior year.
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 December 31, 2024.
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 December 31, 2025.
Additional information about our operations, structure and services is included in “ Business — Our Operations ” in Item 1 of this Annual Report on Form 10-K. Additional segment information is included in Note 18, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Additional segment information is included in Note 17, Segment and Geographic Information , to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Net purchases of debt securities by our captive insurance entity, using restricted cash, and other investments were $14.2 million in the year ended December 31, 2024, compared to net proceeds of $3.5 million during the prior year, a net increase in cash used of $17.7 million.
Net purchases of debt securities held by our captive insurance entity and other investments were $5.7 million for the year ended December 31, 2025, compared to net purchases of $14.2 million for the prior year, a net decrease in cash used of $8.5 million.
The impairment is allocated to the long-lived assets on a pro rata basis using the relative carrying amounts, but only to the extent the carrying amount of an asset is above its fair value.
The estimated fair value is determined based on discounting estimated cash flows, including consideration of market rates for leased assets. The impairment is allocated to the long-lived assets on a pro rata basis using the relative carrying amounts, but only to the extent the carrying amount of an asset is above its fair value.
Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2025, provide the Company with interest rate protection in the event the one-month term SOFR rate increases above 2.4%.
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 the Company with interest rate protection in the event the one-month term SOFR rate increased above 2.4%.
Revenue generated by back-up care services in the year ended December 31, 2024 increased by $84.2 million, or 16%, when compared to the prior year. Revenue growth in the back-up care segment was primarily attributable to increased utilization of center-based, in-home and school-age camp back-up care from new and existing clients.
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. 36 Table of Contents Revenue generated by educational advisory services in the year ended December 31, 2025 increased by $10.4 million, or 9%, when compared to the prior year.
(c) Stock-based compensation expense represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation. 40 Table of Contents (d) Other costs in the year ended December 31, 2024 consist of costs incurred in connection with the December 2024 debt refinancing of $0.8 million allocated to the full service center-based child care segment.
(c) Stock-based compensation expense represents non-cash stock-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation. 39 Table of Contents (d) Other costs in the year ended December 31, 2025 consist of $1.3 million related to the August 2025 debt refinancing recorded to selling, general and administrative expenses and allocated to the full service center-based child care segment.
The increase in cash provided by operations primarily relates to the increase in net income of $66.0 million, as well as higher cash provided by working capital arising from the timing of billings and payments when compared to the prior year.
The increase in cash provided by operations primarily related to the increase in net income of $52.9 million, partially offset by changes in working capital arising from the timing of billings and payments when compared to the prior year.
Revenue increased by $267.8 million, or 11%, to $2.7 billion for the year ended December 31, 2024 from $2.4 billion for the prior year.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue. Revenue increased by $247.6 million, or 9%, to $2.9 billion for the year ended December 31, 2025 from $2.7 billion for the prior year.
Cash Flows Years Ended December 31, 2024 2023 (In thousands) Net cash provided by operating activities $ 337,462 $ 256,140 Net cash used in investing activities $ (117,764) $ (126,936) Net cash used in financing activities $ (183,814) $ (91,633) Cash, cash equivalents and restricted cash — beginning of year $ 89,451 $ 51,894 Cash, cash equivalents and restricted cash — end of year $ 123,715 $ 89,451 42 Table of Contents Cash Provided by Operating Activities Cash provided by operating activities was $337.5 million for the year ended December 31, 2024, compared to $256.1 million for 2023.
Cash Flows Years Ended December 31, 2025 2024 (In thousands) Net cash provided by operating activities $ 350,726 $ 337,462 Net cash used in investing activities $ (103,794) $ (117,764) Net cash used in financing activities $ (233,428) $ (183,814) Cash, cash equivalents and restricted cash — beginning of year $ 123,715 $ 89,451 Cash, cash equivalents and restricted cash — end of year $ 143,158 $ 123,715 41 Table of Contents Cash Provided by Operating Activities Cash provided by operating activities was $350.7 million for the year ended December 31, 2025, compared to $337.5 million for 2024.
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.
All repurchased shares have been retired, and at December 31, 2025, $329.4 million remains available for future repurchases under the Board-approved repurchase program. 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.
Goodwill and intangible assets with indefinite lives are not subject to amortization, but are tested annually for impairment or more frequently if there are indicators of impairment.
Goodwill and intangible assets with indefinite lives are not subject to amortization, but are tested annually for impairment or more frequently if there are indicators of impairment. Indefinite lived intangible assets are also subject to an annual evaluation to determine whether events and circumstances continue to support an indefinite useful life.
Our $400 million revolving credit facility is part of our senior secured credit facilities. At December 31, 2024 and 2023, $384.8 million and $380.7 million of the revolving credit facility was available for borrowing, respectively. We had a working capital deficit of $283.4 million and $352.5 million at December 31, 2024 and December 31, 2023, respectively.
At December 31, 2025 and 2024, $383.7 million and $384.8 million of the revolving credit facility was available for borrowing, respectively. We had a working capital deficit of $462.2 million and $283.4 million at December 31, 2025 and December 31, 2024, respectively.
Cost of services in the back-up care segment increased by $34.9 million, or 12%, to $322.2 million in the year ended December 31, 2024, when compared to the prior year.
Cost of services in the back-up care segment increased by $51.6 million, or 16%, to $373.7 million in the year ended December 31, 2025, when compared to the prior year.
The increase in cost of services was primarily associated with increased personnel costs related to expanded enrollment and wage rate increases. Personnel costs increased 7% during the year ended December 31, 2024 compared to the same period in the prior year.
The increase in cost of services was primarily associated with increased personnel costs, an increase of 8% during the year ended December 31, 2025 compared to the prior year, related to average hourly wage rate increases in the range of 3-4%, higher benefits costs, including medical care expenses, and expanded enrollment.
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: Years Ended December 31, 2024 2023 (In thousands, except share data) Net income $ 140,191 $ 74,223 Interest expense — net 48,761 51,609 Income tax expense 57,667 45,409 Depreciation 79,576 77,266 Amortization of intangible assets (a) 18,342 33,415 EBITDA 344,537 281,922 Additional adjustments: Impairment losses (b) 30,299 35,903 Stock-based compensation expense (c) 33,615 28,834 Other costs (d) 835 5,458 Total adjustments 64,749 70,195 Adjusted EBITDA $ 409,286 $ 352,117 Income from operations $ 246,619 $ 171,241 Impairment losses (b) 30,299 35,903 Other costs (d) 835 5,458 Adjusted income from operations $ 277,753 $ 212,602 Net income $ 140,191 $ 74,223 Income tax expense 57,667 45,409 Income before income tax 197,858 119,632 Amortization of intangible assets (a) 18,342 33,415 Impairment losses (b) 30,299 35,903 Stock-based compensation expense (c) 33,615 28,834 Other costs (d) 835 5,458 Interest on deferred consideration (e) — 5,890 Adjusted income before income tax 280,949 229,132 Adjusted income tax expense (f) (77,765) (64,869) Adjusted net income $ 203,184 $ 164,263 Weighted average common shares outstanding — diluted 58,471,566 57,932,574 Diluted adjusted earnings per common share $ 3.47 $ 2.84 (a) Amortization of intangible assets represents amortization expense, including amortization expense of approximately $8.5 million and $20.0 million for the years ended December 31, 2024 and 2023, respectively, associated with intangible assets recorded in connection with our going private transaction in May 2008.
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: Years Ended December 31, 2025 2024 (In thousands, except share data) Net income $ 193,116 $ 140,191 Interest expense — net 44,758 48,761 Income tax expense 76,791 57,667 Depreciation 87,263 79,576 Amortization of intangible assets (a) 6,139 18,342 EBITDA 408,067 344,537 Additional adjustments: Impairment and net lease termination costs (b) 47,467 30,299 Stock-based compensation expense (c) 30,614 33,615 Other costs (d) 1,294 835 Total adjustments 79,375 64,749 Adjusted EBITDA $ 487,442 $ 409,286 Income from operations $ 314,665 $ 246,619 Impairment and net lease termination costs (b) 47,467 30,299 Other costs (d) 1,294 835 Adjusted income from operations $ 363,426 $ 277,753 Net income $ 193,116 $ 140,191 Income tax expense 76,791 57,667 Income before income tax 269,907 197,858 Amortization of intangible assets (a) 6,139 18,342 Impairment and net lease termination costs (b) 47,467 30,299 Stock-based compensation expense (c) 30,614 33,615 Other costs (d) 1,294 835 Other interest costs (e) 2,737 — Adjusted income before income tax 358,158 280,949 Adjusted income tax expense (f) (96,692) (77,765) Adjusted net income $ 261,466 $ 203,184 Weighted average common shares outstanding — diluted 57,422,501 58,471,566 Diluted adjusted earnings per common share $ 4.55 $ 3.47 (a) Amortization of intangible assets represents amortization expense, including amortization expense of approximately $8.5 million for the year ended December 31, 2024, associated with intangible assets recorded in connection with our going private transaction in May 2008.
SGA increased $27.5 million, or 8%, to $354.6 million for the year ended December 31, 2024 from $327.1 million for the year ended December 31, 2023, due to higher personnel costs, impairment costs of $3.0 million related to the full service center-based child care segment and a $2.3 million charge within the back-up care segment resulting from the early settlement of contingent consideration for a 2021 acquisition.
In addition, SGA for the year ended December 31, 2024 includes net impairment losses of $3.0 million related to the full service center-based child care segment and a $2.3 million charge within the back-up care segment resulting from the early settlement of contingent consideration for a 2021 acquisition, which did not occur in 2025.
The following table summarizes the revenue and percentage of total revenue for each of our segments for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Change 2024 vs 2023 (in thousands, except percentages) Full service center-based child care $ 1,961,785 73.1 % $ 1,780,615 73.6 % $ 181,170 10.2 % Tuition 1,780,961 90.8 % 1,614,685 90.7 % 166,276 10.3 % Management fees and operating subsidies 180,824 9.2 % 165,930 9.3 % 14,894 9.0 % Back-up care 610,112 22.7 % 525,910 21.7 % 84,202 16.0 % Educational advisory services 114,116 4.2 % 111,732 4.7 % 2,384 2.1 % Total revenue $ 2,686,013 100.0 % $ 2,418,257 100.0 % $ 267,756 11.1 % Revenue generated by the full service center-based child care segment in the year ended December 31, 2024 increased by $181.2 million, or 10%, when compared to the prior year.
The following table summarizes the revenue and percentage of total revenue for each of our segments for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 Change 2025 vs 2024 (in thousands, except percentages) Full service center-based child care $ 2,081,119 71.0 % $ 1,961,785 73.1 % $ 119,334 6.1 % Tuition 1,895,740 91.1 % 1,780,961 90.8 % 114,779 6.4 % Management fees and operating subsidies 185,379 8.9 % 180,824 9.2 % 4,555 2.5 % Back-up care 727,988 24.8 % 610,112 22.7 % 117,876 19.3 % Educational advisory services 124,500 4.2 % 114,116 4.2 % 10,384 9.1 % Total revenue $ 2,933,607 100.0 % $ 2,686,013 100.0 % $ 247,594 9.2 % Revenue generated by the full service center-based child care segment in the year ended December 31, 2025 increased by $119.3 million, or 6%, when compared to the prior year.
We also saw strong growth in back-up care with a 16% year-over-year increase in revenue as a result of increased utilization. 35 Table of Contents While we continue to see year-over-year growth and progress, we are navigating a dynamic operating environment that is impacted by increased operating costs, a tight labor market, varying enrollment demands, shifting work demographics, and challenging macroeconomic conditions.
While we continue to see year-over-year growth and progress in the overall performance of our full service center-based child care business, we are navigating a dynamic operating environment that is impacted by increased operating costs, a tight labor market, varying enrollment demands, shifting work demographics, and challenging macroeconomic conditions.
Long term debt obligations were as follows: December 31, 2024 2023 (In thousands) Term loan B $ 583,500 $ 588,000 Term loan A 367,500 380,000 Deferred financing costs and original issue discount (4,051) (5,236) Total debt 946,949 962,764 Less current maturities (28,500) (18,500) Long-term debt $ 918,449 $ 944,264 43 Table of Contents On December 11, 2024, the Company amended its existing senior secured credit facilities to, among other changes, reduce the applicable interest rates of the term loan B facility.
Long term debt obligations were as follows: December 31, 2025 2024 (In thousands) Term loan B $ 450,000 $ 583,500 Term loan A — 367,500 Revolving credit facility 499,552 — Deferred financing costs and original issue discount (2,386) (4,051) Total debt 947,166 946,949 Less current portion of term loans — (28,500) Less current portion of revolving credit facility (199,552) — Long-term debt $ 747,614 $ 918,449 42 Table of Contents On August 21, 2025, the Company amended its existing senior secured credit facilities to, among other changes, refinance the existing term loan B and to extend the maturity date.
We seek to cluster centers in geographic areas to enhance operating efficiencies and to create a leading market presence. At December 31, 2024, we had more than 1,450 client relationships with employers across a diverse array of industries, including more than 220 Fortune 500 companies.
At December 31, 2025, we had more than 1,450 client relationships with employers across a diverse array of industries, including more than 220 Fortune 500 companies.
For the year ended December 31, 2023, impairment losses recognized in the fourth quarter totaled $35.9 million, of which $32.0 million related to the full service center-based child care segment and $3.9 million related to the back-up care segment.
For the year ended December 31, 2025, impairment and net lease termination costs totaled $47.5 million, of which $47.0 million related to the full service center-based child care segment and $0.5 million related to the back-up care segment.
Cash Used in Investing Activities Cash used in investing activities was $117.8 million for the year ended December 31, 2024, compared to $126.9 million for the prior year, a decrease of $9.1 million. The decrease in cash used in investing activities was primarily related to a decrease in payments for acquisitions.
Cash Used in Investing Activities Cash used in investing activities was $103.8 million for the year ended December 31, 2025, compared to $117.8 million for the prior year, a decrease of $14.0 million. The decrease in cash used in investing activities was primarily related to a decrease in net purchases of debt securities and other investments.
The following table summarizes income from operations and percentage of revenue for each of our segments for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Change 2024 vs 2023 (In thousands, except percentages) Full service center-based child care $ 53,699 2.7 % $ 9,396 0.5 % $ 44,303 471.5 % Back-up care 169,611 27.8 % 135,704 25.8 % 33,907 25.0 % Educational advisory services 23,309 20.4 % 26,141 23.4 % (2,832) (10.8) % Income from operations $ 246,619 9.2 % $ 171,241 7.1 % $ 75,378 44.0 % The change in income from operations was due to the following: • Income from operations for the full service center-based child care segment increased $44.3 million, or 472%, for the year ended December 31, 2024, when compared to the same period in 2023, primarily due to increases in tuition revenue from enrollment growth and tuition rate increases, partially offset by increased personnel costs, and a decrease of approximately $34 million in net contributions from pandemic-related government support as most of the programs for which we were eligible ended by September 30, 2023. • Income from operations for the back-up care segment increased $33.9 million, or 25%, in the year ended December 31, 2024 when compared to the same period in 2023.
The following table summarizes income from operations and percentage of revenue for each of our segments for the years ended December 31, 2025 and 2024: Years Ended December 31, 2025 2024 Change 2025 vs 2024 (In thousands, except percentages) Full service center-based child care $ 66,093 3.2 % $ 53,699 2.7 % $ 12,394 23.1 % Back-up care 221,610 30.4 % 169,611 27.8 % 51,999 30.7 % Educational advisory services 26,962 21.7 % 23,309 20.4 % 3,653 15.7 % Income from operations $ 314,665 10.7 % $ 246,619 9.2 % $ 68,046 27.6 % 37 Table of Contents The change in income from operations was due to the following: • Income from operations for the full service center-based child care segment increased $12.4 million, or 23%, for the year ended December 31, 2025, when compared to the same period in 2024, primarily due to increases in tuition revenue from tuition rate increases and enrollment growth, as well as decreases in amortization expense, partially offset by increased personnel costs and increased impairment and net lease termination costs. • Income from operations for the back-up care segment increased $52.0 million, or 31%, in the year ended December 31, 2025 when compared to the same period in 2024.
To track our continued progress, we monitor same-center occupancy for a cohort of centers that has been operating since the 2021 fall enrollment cycle. Same-center 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.
Same-center 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. This cohort of centers totaled 746 centers as of December 31, 2025.
Amortization expense on intangible assets was $18.3 million for the year ended December 31, 2024, a decrease from $33.4 million in the prior year, primarily due to certain intangible assets becoming fully amortized during the period, partially offset by increases from intangible assets acquired in relation to the acquisitions completed in 2023 and 2024.
SGA was approximately 13% of revenue for the year ended December 31, 2025, consistent with 2024. Amortization of Intangible Assets. Amortization expense on intangible assets was $6.1 million for the year ended December 31, 2025, a decrease from $18.3 million in the prior year, primarily due to certain intangible assets becoming fully amortized during the period. Income from Operations.
We expect that in 2025 we will continue to spend on fixed asset additions related to new child care centers, maintenance and refurbishments in our existing centers, and continued investments in technology and equipment. As part of our growth strategy, we also expect to continue to make selective acquisitions.
Lastly, during the year ended December 31, 2025, we invested $6.8 million in acquisitions, compared to an investment of $8.3 million in the prior year. We expect that in 2026 we will continue to spend on fixed asset additions related to new child care centers, maintenance and refurbishments in our existing centers, and continued investments in technology and equipment.
Self-sourced reimbursed care is a reimbursement program available to employer sponsors when other care solutions are not available, to provide payments to their employees to assist with the cost of self-sourced dependent care. 45 Table of Contents Back-up care revenue is primarily comprised of fixed and variable consideration paid by employer sponsors, and, to a lesser extent, co-payments collected from users at the point of service.
Self-sourced reimbursed care is a reimbursement program available to employer sponsors when other care solutions are not available, to provide payments to their employees to assist with the cost of self-sourced dependent care.
If the estimated cash flows are less than the carrying amounts of the assets, an impairment loss is recognized to reduce the carrying amounts of the assets to its estimated fair value. The estimated fair value is determined based on discounting estimated cash flows, including consideration of market rates for leased assets.
Impairment is assessed by comparing the carrying amounts of the assets to the estimated undiscounted future cash flows over the assets’ remaining lives. If the estimated cash flows are less than the carrying amounts of the assets, an impairment loss is recognized to reduce the carrying amounts of the assets to its estimated fair value.
Revenue generated by educational advisory services in the year ended December 31, 2024 increased by $2.4 million, or 2%, when compared to the prior year. Revenue growth in this segment was primarily attributable to increased utilization. Cost of Services.
Revenue growth in this segment was primarily attributable to increased utilization from new and existing clients. Cost of Services. Cost of services increased $170.0 million, or 8%, to $2.2 billion for the year ended December 31, 2025 from $2.1 billion for the prior year.
Debt Our senior secured credit facilities consist of a $600 million term loan B facility (“term loan B”), a $400 million term loan A facility (“term loan A”), and a $400 million multi-currency revolving credit facility (“revolving credit facility”).
There were no payments for deferred consideration during the year ended December 31, 2025. Debt Our senior secured credit facilities consist of our term loan B facility (the “term loan B”) and our $900 million multi-currency revolving credit facility (the “revolving credit facility”).
Cost of services also includes impairment costs of $29.8 million in 2024 and $32.0 million in 2023, primarily related to fixed assets and operating lease right of use assets. Additionally, most of the pandemic-related government support programs for which we were eligible ended September 2023.
Cost of services also includes impairment and net lease termination costs of $47.0 million and $29.8 million in 2025 and 2024, respectively, primarily related to fixed assets and operating lease right of use assets.
The revolving credit facility matures on May 26, 2026. At December 31, 2024 and December 31, 2023, there were no borrowings outstanding under the revolving credit facility and letters of credit outstanding under the revolver were $15.2 million and $19.3 million, respectively, with $384.8 million and $380.7 million available for borrowing, respectively.
At December 31, 2024, there were no borrowings outstanding on the revolving credit facility, and letters of credit outstanding were $15.2 million, with $384.8 million available for borrowing. Additionally, a AU$5 million (US$3.3 million) uncommitted working capital credit facility is available in Australia for short-term borrowing purposes.
As a result of changing conditions, there has been an elevated number of center closures in recent years, totaling 56 in 2024 and 49 in 2023, in addition to the impairment of certain assets.
As a result, there has been an elevated number of center closures in recent years, totaling 29 in 2025 and 56 in 2024, in addition to the impairment of certain assets. We continue to review the portfolio of centers and expect to close additional centers in 2026. Where possible, we shift enrollment and teachers to other centers at nearby locations.
Back-Up Care Services Back-up care services consist of center-based back-up child care, in-home child and senior care, school-age programs (including camps and tutoring), pet care, self-sourced reimbursed care and Sittercity, an online marketplace for families and caregivers.
The variable consideration relates specifically to efforts to transfer each distinct daily service and the allocation of the consideration earned to that distinct day in which those activities are performed is consistent with the overall allocation objective. 44 Table of Contents Back-Up Care Services Back-up care services consist of center-based back-up child care, in-home child and senior care, school-age programs (including camps and tutoring), pet care, self-sourced reimbursed care and Sittercity, an online marketplace for families and caregivers.
Fair value is determined by estimating the total revenue attributable to each trademark, multiplied by a market-derived royalty rate, and then discounted using the applicable discount rate. The forecasts of revenue and profitability growth for use in our long-range plan and the discount rate are the key assumptions in our fair value analysis.
We test certain trademarks that are determined to be indefinite-lived intangible assets by comparing the fair value of the trademarks with their carrying value. Fair value is determined by estimating the total revenue attributable to each trademark, multiplied by a market-derived royalty rate, and then discounted using the applicable discount rate.
Incremental contributions from the expanded utilization of back-up care services were partially offset by the related higher personnel and service provider costs.
Incremental gross profit contributions from the expanded utilization of back-up care services were partially offset by increases in technology and marketing expense to improve customer experience.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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As of December 31, 2024, a hypothetical increase in interest rates of 100 basis points would not have a material adverse impact on the fair value of our investment portfolio. Any unrealized gains or losses are recorded in accumulated other comprehensive loss and are realized if the debt securities are sold prior to maturity.
As of December 31, 2025, a hypothetical increase in interest rates of 100 basis points would not have a material adverse impact on the fair value of our investment portfolio. Any unrealized gains or losses are recorded in accumulated other comprehensive loss and are realized if the debt securities are sold prior to maturity.
Based on the borrowings outstanding under the senior secured credit facilities during 2024, a hypothetical increase in interest rates of 100 basis points in 2024, would have had an immaterial impact to our interest expense for the year, inclusive of the impact of the interest rate hedge agreements.
Based on the borrowings outstanding under the senior secured credit facilities during 2025, a hypothetical increase in interest rates of 100 basis points in 2025, would have had an immaterial impact to our interest expense for the year, inclusive of the impact of the interest rate hedge agreements.
During the year ended December 31, 2024, our wholly-owned captive insurance entity purchased and sold marketable debt securities, which were classified as available-for-sale.
During the year ended December 31, 2025, our wholly-owned captive insurance entity purchased and sold marketable debt securities, which were classified as available-for-sale.
We may enter into additional derivatives or other market risk sensitive instruments in the future for the purpose of hedging or for other purposes. Refer to Note 12, Credit Arrangements and Debt Obligations, to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information on derivative financial instruments. 48 Table of Contents
We may enter into additional derivatives or other market risk sensitive instruments in the future for the purpose of hedging or for other purposes. Refer to Note 11, Credit Arrangements and Debt Obligations, to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for additional information on derivative financial instruments. 47 Table of Contents
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 LIBOR rate increases above 3.0% (effective December 30, 2022, one-month term SOFR rate increases above 2.9%).
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 June 2020, we entered into interest rate cap agreements with a total notional value of $800 million, designated and accounted for as cash flow hedges from inception, to provide us with interest rate protection in the event the one-month LIBOR rate increases above 1% (effective December 30, 2022, one-month term SOFR rate increases above 0.9%).
We mitigate our interest rate exposure with interest rate cap agreements. In June 2020, we entered into interest rate cap agreements with a total notional value of $800 million, designated and accounted for as cash flow hedges from inception, to provide us with interest rate protection in the event the one-month term SOFR rate increases above 0.9%.
As of December 31, 2024, the fair value of our interest rate cap agreements was an asset of $14.7 million, of which $8.4 million was recorded in prepaid expenses and other current assets and $6.3 million was recorded in other assets on the consolidated balance sheet.
As of December 31, 2025, the fair value of our interest rate cap agreements was an asset of $2.2 million, of which $1.8 million was recorded in prepaid expenses and other current assets and $0.4 million was recorded in other assets on the consolidated balance sheet.
Interest rate cap agreements for $600 million, which had a forward starting effective date of October 31, 2023 and expire on October 31, 2025, provide us with interest rate protection in the event the one-month LIBOR rate increases above 2.5% (effective December 30, 2022, one-month term SOFR rate increases above 2.4%).
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%.
As of December 31, 2024, the fair value of the available-for-sale debt securities was $33.7 million, with $11.7 million included in prepaid expenses and other current assets and $22.0 million in other assets on the consolidated balance sheet. Our investments primarily consist of U.S. Treasury and U.S. government agency securities, corporate bonds and certificate of deposits.
As of December 31, 2025, the fair value of the available-for-sale debt securities was $39.5 million, with $15.4 million included in prepaid expenses and other current assets and $24.1 million in other assets on the consolidated balance sheet. Our investments primarily consist of U.S. Treasury and U.S. government agency securities, corporate bonds and certificate of deposits.
We have not used financial derivative instruments to hedge foreign currency exchange rate risks associated with operations at our foreign subsidiaries.
We have not used financial derivative instruments to hedge foreign currency exchange rate risks associated with operations at our foreign subsidiaries, however, we do use our multi-currency revolver borrowings to offset foreign currency volatility on certain intercompany balances.
Interest rate cap agreements for $300 million notional value had an effective date of June 30, 2020 and expired on October 31, 2023, while interest rate cap agreements for another $500 million notional amount had a forward starting effective date of October 29, 2021 and expired on October 31, 2023. 47 Table of Contents In December 2021, we entered into additional interest rate cap agreements with a total notional value of $900 million, which are designated and accounted for as cash flow hedges from inception.
Interest rate cap agreements for $300 million notional value had an effective date of June 30, 2020 and expired on October 31, 2023, while interest rate cap agreements for another $500 million notional amount had a forward starting effective date of October 29, 2021 and expired on October 31, 2023.
At December 31, 2024, we had borrowings outstanding of $951.0 million under our term loan facilities and no borrowings outstanding under our revolving credit facility, which were subject to a weighted average interest rate of 4.88% during the year ended December 31, 2024, including the impact of the interest rate cap agreements.
At December 31, 2025, we had borrowings outstanding of $450 million under our term loan B and borrowings of $496.5 million outstanding under our revolving credit facility. The blended weighted average interest rate for the term loans and revolving credit facility was 4.42% during the year ended December 31, 2025, including the impact of the cash flow hedges.
Interest Rate Risk Interest rate exposure relates primarily to the effect of interest rate changes on borrowings outstanding under our revolving credit facility and term loan facilities that are subject to variable interest rates, and income earned on our investments. We mitigate our interest rate exposure with interest rate cap agreements.
We estimate that had the exchange rate in each country unfavorably changed by 10% relative to the U.S. dollar, our consolidated income before income tax would have decreased by approximately $5.3 million for 2025. 46 Table of Contents Interest Rate Risk Interest rate exposure relates primarily to the effect of interest rate changes on borrowings outstanding under our revolving credit facility and term loan facilities that are subject to variable interest rates, and income earned on our investments.
Removed
We estimate that had the exchange rate in each country unfavorably changed by 10% relative to the U.S. dollar, our consolidated income before income tax would have decreased by approximately $3.2 million for 2024.
Added
In December 2021, we entered into additional interest rate cap agreements with a total notional value of $900 million, designated and accounted for as cash flow hedges from inception.
Added
In March and July 2025, 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 cash flow hedges from inception.
Added
The March and July 2025 interest rate cap agreements, both of which had forward starting effective dates of October 31, 2025, provide the Company 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.
Added
Additionally, as of December 31, 2025, there were borrowings outstanding of AU$4.5 million (USD$3.0 million) under our Australian uncommitted working capital credit facility, which had a weighted average interest rate of 5.55% for the year ended December 31, 2025.

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