Bright Horizons posts $230.7 million third-quarter loss after $294 million impairment
Key Facts
Bright Horizons reported a net loss of $230.7 million in the third quarter of 2026, compared with net income of $78.6 million in the same period a year earlier. The company said the swing to a loss was linked to lower operating income, a higher effective tax rate and interest expense. Operating income fell from $120.8 million in the third quarter of 2025 to an operating loss of $187.1 million in the third quarter of 2026. The company attributed the decline mainly to impairment losses of $294.0 million in its international full-service operations. Diluted loss per share was $4.76, compared with diluted earnings of $1.37 a year earlier.
Chief Executive Stephen Kramer said third-quarter revenue rose 5% year over year and back-up care grew 13%. He described the quarter’s results as reflecting the strength of the company’s portfolio diversification, saying: "Revenue increased 5%, including 13% growth in back-up care." Revenue growth came as back-up care partially offset the effect of lower revenue at centers closed during the previous twelve months. The activity also partially cushioned the impact of the impairment on operating income. Adjusted diluted earnings per share were $1.80, up from $1.57 in the third quarter of 2025.
Goodwill impairment alone totaled $290.0 million in the third quarter, within total impairment losses of $294.0 million in international full-service operations. The company said the impairment was non-cash and resulted from a review of long-term cash-flow projections tied primarily to its operations in Australia. Total goodwill impairment for the three months ended September 30, 2026, was $290.0 million, and for the nine months ended on the same date was $296.3 million. This means the goodwill review was a major part of the quarterly accounting loss, while operating activity also recorded a loss. As of September 30, the company operated 979 early education and child care centers with capacity for approximately 112,500 children and families.
In share trading, EL7 data showed a close at $66.98 on October 29, followed by a close at $54.98 on October 30. The stock had fallen 3.33% during the October 29 session to $66.98, then dropped 5.94% after the close to $63, according to an Investing.com report. The report cited weaker outlook expectations, a U.K. regulatory development and the Australia-related impairment loss among factors surrounding the stock’s movement. Subsequent closing data place the price move between the daily closes on October 29 and 30, without attributing it to an external source. The moves followed the results announcement, which was issued after the market closed on October 29.
On liquidity, Bright Horizons had $119.2 million in cash and cash equivalents on September 30, 2026, along with $436.0 million available to draw under its revolving credit facility. The company generated $208.1 million in cash from operations during the nine months ended on that date, compared with $202.8 million in the same period of 2025. During the same nine months, it repurchased about 7.7 million shares for a total of $557.7 million. These figures provide a picture of liquidity and cash flows during the period, alongside the quarterly loss affected by the goodwill impairment. The company forecast fiscal 2026 revenue of approximately $3.07 billion and adjusted diluted earnings per share of between $4.98 and $5.03.
The company had set October 29, 2026, as the date to announce results for the quarter ended September 30, after the stock market closed. It said it would hold a conference call with investors and analysts after the announcement at 5:00 p.m. Eastern time to discuss results, outlook and strategy. The timing places discussion of the impairment’s impact and the annual outlook in the context of the results announcement itself. The company’s fiscal-year forecast combines revenue of approximately $3.07 billion with an adjusted earnings-per-share range of $4.98 to $5.03. The company had said total goodwill impairment for the nine months ended September 30 was $296.3 million, with the review tied primarily to cash-flow projections in Australia.