Bright Horizons Posts $294 Million Impairment and a Net Loss

The Tip Desk · November 1, 2026 · 3 min read

The child-care operator reported a $230.7 million net loss, or $4.76 a share, after $294.0 million of impairment losses in international full service operations, while revenue rose 5% to $841.5 million.

Bright Horizons Family Solutions (BFAM), a provider of early education, child care and back-up care, reported a third-quarter net loss of $230.7 million, or $4.76 a share, after recording $294.0 million of impairment losses in its international full service operations. A year earlier the company had posted income from operations of $120.8 million and net income of $78.6 million, or $1.37 a share.

Revenue rose 5% to $841.5 million from $802.8 million in the third quarter of 2025, a slower year-over-year pace than the 7% increase to $779.2 million in the second quarter. The company said the increase was primarily due to growth in back-up care, partially offset by reductions in revenue from full service centers that have closed over the last 12 months.

GAAP loss from operations was $187.1 million. The company attributed the swing primarily to the impairment losses, partially offset by increased service levels and contributions from the back-up care segment. Goodwill impairment of $290.0 million was recorded in the full service center-based child care segment, which the company said resulted from revised long-term cash flow projections primarily related to operations in Australia. Other costs included $4.0 million of long-lived asset impairment and $23.4 million of incremental expense related to general liability reserves for certain safeguarding matters.

Adjusted EBITDA increased 5% to $163.3 million and adjusted income from operations increased 5% to $130.2 million, slower than 13% and 15% year-over-year growth in the second quarter. The company said the adjusted increase was primarily due to increased service levels and contributions from the back-up care segment. Adjusted net income fell to $87.5 million from $90.1 million a year earlier on higher interest expense and a higher adjusted effective tax rate. Diluted adjusted earnings per common share rose 15% to $1.80 from $1.57.

Back-up care revenue grew 13% to $286.4 million, slower than 19% growth in the second quarter. Full service center-based child care revenue was $522.0 million and educational advisory services $33.1 million. Full service posted a GAAP operating loss of $298.1 million after the goodwill, long-lived asset and general-liability charges; adjusted income from operations in the segment was $19.2 million, or 4% of revenue. Back-up care adjusted income from operations was $101.2 million, or 35% of revenue, and educational advisory $9.8 million, or 29%.

Gross profit declined to $204.8 million, or 24.3% of revenue, from $217.0 million, or 27.0%, a year earlier. Cost of services rose to 75.7% of revenue from 73.0%. Interest expense was $17.2 million.

As of September 30, 2026, the company operated 979 early education and child care centers with capacity for approximately 112,500 children, down from 988 centers at June 30. Cash and cash equivalents were $119.2 million, with $436.0 million available under its revolving credit facility.

In the nine months ended September 30, 2026, Bright Horizons generated $208.1 million of cash from operations, compared with $202.8 million a year earlier, and repurchased approximately 7.7 million shares totaling $557.7 million, versus about 0.9 million shares totaling $106.0 million in the same period last year. Net investments were $71.8 million.

Based on current trends and expectations, the company said it currently expects fiscal year 2026 revenue of approximately $3.07 billion and diluted adjusted earnings per common share in the range of $4.98 to $5.03. Chief Executive Officer Stephen Kramer said third-quarter results reflected the strength of the diversified portfolio, with revenue up 5%, including 13% growth in back-up care.