Bright Horizons Books $290 Million Goodwill Write-Down On Australia, Posts $231 Million Quarterly Loss
Back-up care revenue rose 13% to $286.4 million, but a non-cash goodwill charge pushed the child care operator to a third-quarter loss.
Bright Horizons Family Solutions, which runs child care centers and sells back-up care to employers, wrote down $290.0 million of goodwill in the third quarter, mainly on its Australian operations, and posted a net loss of $230.7 million, or $4.76 per share. The company reported the results Thursday and revised its 2026 guidance.
A non-cash charge drives the loss
The goodwill impairment is a non-cash write-down in the full service child care segment, tied to revised long-term cash flow projections primarily for Australia. Including it, the company had a loss from operations of $187.1 million, against income of $120.8 million a year earlier. Net income a year earlier was $78.6 million, or $1.37 per diluted share.
The company also cited a higher effective tax rate and higher interest expense. Separately, it booked $23.4 million of extra expense for general liability reserves on certain safeguarding matters, and $4.0 million of long-lived asset impairments.
Revenue rose 5% to $841.5 million, with back-up care at $286.4 million versus $253.4 million a year earlier. Reduced revenue from full service centers closed over the past 12 months offset part of the gain. CEO Stephen Kramer said results reflected "the strength of our diversified portfolio."
Adjusted earnings rise to $1.80
On the company's adjusted measure, which strips out impairments, the safeguarding reserve charge, stock-based pay, amortization and other items, earnings were $1.80 per share, up from $1.57. Adjusted net income fell to $87.5 million from $90.1 million, while adjusted EBITDA rose 5% to $163.3 million.
For 2026, the company now expects revenue of about $3.07 billion and adjusted earnings of $4.98 to $5.03 per share. It operated 979 centers at September 30, with capacity for about 112,500 children.
Buybacks lifted the debt load
In the first nine months, the company repurchased about 7.7 million shares for $557.7 million, versus about 0.9 million shares for $106.0 million a year earlier. Operating cash flow was $208.1 million, compared with $202.8 million.
Long-term debt reached $1.07 billion at September 30, from $747.6 million at year-end 2025, after $373.6 million of new long-term borrowings. Cash stood at $119.2 million, with $436.0 million available under its revolving credit facility.
In a separate disclosure, director Mary Ann Tocio will retire December 1. Seth Siegel, a former Grant Thornton CEO, takes her board and audit committee seat that day.
Management held an investor call at 5:00 p.m. ET Thursday to discuss the quarter and the updated outlook.
