What changed in this filing

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Item 1. Business

2023-02-28 compared with 2022-02-25 · 108 added, 121 removed, 321 unchanged (42% of the section changed)

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We are organized in three reportable segments, which are aligned with our service offerings as follows:

• full service center-based child care (approximately 74% and 68% of our revenue in 2021 and 2020, respectively);

• back-up care (approximately 20% and 26% of our revenue in 2021 and 2020, respectively);

• educational advisory and other services (approximately 6% of our revenue in 2021 and 2020).

As of December 31, 2021, we had more than 1,350 client relationships with employers across a diverse array of industries, including more than 200 Fortune 500 companies and more than 80 of Working Mother magazine’s 2021 “100 Best Companies.” As of December 31, 2021, we operated 1,014 early education and child care centers with the capacity to serve approximately 114,000 children and their families in the United States, the United Kingdom, the Netherlands, and India.

• full service center-based child care (approximately 74% of our revenue in 2022);

• back-up care (approximately 20% of our revenue in 2022);

• educational advisory and other services (approximately 6% of our revenue in 2022).

As of December 31, 2022, we had more than 1,400 client relationships with employers across a diverse array of industries, including more than 215 Fortune 500 companies.

As of December 31, 2022, we operated 1,078 early education and child care centers with the capacity to serve approximately 120,000 children and their families in the United States, the United Kingdom, the Netherlands, Australia, and India.

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.

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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 and India as a platform for further international expansion.

In the United States, we have grown our partnerships with employer clients by expanding and enhancing our back-up care family supports, including the addition of elder care, virtual tutoring and school-age camps;

Additionally, on July 1, 2022, we expanded our footprint into Australia with the acquisition of Only About Children (“OAC”), a high-quality operator of approximately 75 early education and child care centers.

by developing and growing our educational advisory services;

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We continue to invest in new technologies to better support our full suite of services as well as enhance our customers’ user experience, and we have increased our digital marketing efforts with additional focus on driving use of our services and maximizing enrollment in centers.

COVID-19 Pandemic

Since March 2020, our global operations have been significantly impacted by the ongoing COVID-19 pandemic and the measures undertaken to prevent its spread.

During the early stages of the pandemic, most of our child care centers were temporarily closed.

We responded by focusing on health and safety, supporting clients and their essential frontline workers and pivoting to expand back-up care solutions for clients and employees to meet the surge in need and demand.

While nearly all of our centers have subsequently re-opened, we continue to be impacted by the ongoing effects of COVID-19, including the resurgence of infections and variants of the virus, which impacted enrollment growth, as well as the challenges of managing precautionary and preventative measures such as vaccination and masks mandates, virus exposures affecting our staff and families who attend our centers, and disrupted staff availability.

We have and will continue to monitor and respond to the changing conditions, challenges and disruptions resulting from the COVID-19 pandemic, including labor constraints affecting the early education and child care industry, as well as the changing needs of clients, families and children.

We do this while remaining focused on our strategic priorities to deliver high quality education and care services, connect across our service lines, extend our impact on new customers and clients, and preserve our strong culture.

Delays in client and business return-to-office, changing workplace trends, and increased competition for labor, particularly for teaching staff, may temporarily slow our overall recovery and impact enrollment.

It remains difficult to predict the full impact of the pandemic, but we remain committed to families, clients and our employees.

In 2022, we continue to focus on growing enrollment in our centers and expanding the delivery of back-up use across our network of providers.

Industry Overview and Trends

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We believe we are one of the largest high quality providers of employer-sponsored child care.

Additionally, we operate in the growing market for back-up care, which primarily consists of center-based back-up care, in-home care, and self-sourced reimbursed care.

Additionally, we operate in the growing market for back-up care, which primarily consists of center-based back-up care, and in-home care.

We also operate in the expanding market of educational advisory services, which consists of workforce education, tuition assistance, student loan repayment and related educational advising, as well as college admissions and college financial advisory services.

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Recognized Return on Investment to Employers

We believe employers across industries are looking at child care solutions to enhance their employee value proposition, including on-site child care and other dependent care solutions.

We believe employers across industries are looking at child care solutions, including on-site and near-site child care and other dependent care solutions, to enhance their employee value proposition.

We believe employers are looking to deploy creative solutions to address labor challenges and as part of an overall recruitment and retention strategy to attract their workforce back to the office and keeping them engaged onsite.

Our broad suite of solutions position us well to assist employers with these strategies.

Our broad suite of solutions positions us well to assist employers with these strategies.

Studies conducted through our workforce consulting practice indicate that employer sponsors of center-based child care and back-up care services realize strong returns on their investments, particularly in terms of reduced turnover and increased productivity.

We estimate that users of our back-up care services have been able to work an average additional six days annually that they otherwise would have missed due to breakdowns in child care arrangements.

We estimate that users of our back-up care services have been able to work an average of six additional days annually that they otherwise would have missed due to breakdowns in child care arrangements.

Additionally, according to a 2022 survey of our families, 90% of parents reported enhanced productivity as a result of their employer offering back-up care, and 86% of employees reported their back-up care benefit makes them more committed to their employer.

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Evolving Workforce

We believe the labor challenges brought on by the pandemic have heightened employers’ sensitivity to their employee value proposition, and Bright Horizons' services can be a significant element of their strategy.

We also believe there is elevated focus and emphasis on recruitment and retention by employers, as well as on the continued education, training and up-skilling of the existing workforce.

We believe the labor challenges brought on by the pandemic have heightened employers’ sensitivity to their employee value proposition, and Bright Horizons’ services can be a significant element of their strategy to address this.

While the pandemic impacted the workforce by shifting from traditional office environments to remote work, we believe the need for center-based child care services remains robust and back-up care continues to be a critical support for both remote and office-based employees.

Additionally, we expect that employees will continue to return to traditional office environments in the future, and the demand for child care supports for working parents will likewise increase.

We also believe there is elevated focus and emphasis on recruitment and retention by employers, as well as on continuing education, training and up-skilling of the existing workforce.

Due to the evolution and introduction of new technologies, as well as increased competition for talent, employers are focused on the needs of their employees.

We believe that the modern worker values efforts by employers to support employees across life and career stages that help them thrive in the workplace.

As automation, digital transformation, and other advances change nearly every facet of the labor market, there is an increased need for continued education and up-skilling of the existing workforce.

We believe these growing needs and changing trends, coupled with increased competition for talent, will encourage employers to invest in solutions and supports that enable workers to realize their full professional potential, including investments in center-based early education and child care, back-up care and educational advisory services as a means to meet their strategic goals and bolster employee engagement, recruitment, and retention.

We believe our broad suite of solutions across early education and child care, back-up care and educational advisory services well position Bright Horizons to be a provider of choice for employers looking to deploy creative solutions to support their employees.

Increasing Participation of Working Parents in the Workforce

A significant percentage of parents currently participate in the workforce, making child care services and family supports critical to employers and the overall health of the economy.

While the COVID-19 pandemic impacted the workforce by temporarily reducing the number of working parents and shifting from traditional office environments to working remotely, we believe workforce participation levels will return to pre-COVID levels in the future, and the demand for child care supports for working parents will likewise increase.

We believe that the modern worker values efforts by employers to support employees across life and career stages that help them thrive in the workplace, by providing access to degree and non-degree programs.

As automation, digital transformation, and other advances change nearly every facet of the labor market, there is an increased need for the continuing education and up-skilling of the existing workforce.

Investments in center-based early education and child care, back-up care and educational advisory services will help employers meet their strategic goals, bolster employee engagement, recruitment, retention and address benefit equity amongst their workforce.

We believe our broad suite of solutions across early education and child care, back-up care and educational advisory services positions Bright Horizons well to be a provider of choice for employers looking to deploy creative and impactful solutions to support their employees and their benefits needs.

Participation of Working Parents in the Workforce

A significant percentage of parents currently participate in the workforce, making child care services and family supports critical to employees and employers and the overall health of the economy.

While the pandemic impacted the workforce by temporarily reducing the number of working parents and shifting from traditional office environments to remote or hybrid work, we believe workforce participation levels will return to pre-COVID levels in the future, and the demand for child care supports for working parents will likewise increase.

In 2022, women working full-time comprised approximately 50% of the workforce in the U.S., according to the Bureau of Labor Statistics.

Additionally, in 2020, 66% of mothers with children under the age of 6 participated in the workforce in the U.S., and more than 55% of two-parent households comprised dual career earners.

Despite workforce demographic shifts because of COVID-19, we believe that the number of working mothers, single and dual working parent families will return to pre-COVID-19 trends over time, resulting in an increasing need for child and dependent care, as well as other workplace solutions that support employees at each life and career stage.

Additionally, in 2021, 66% of mothers with children under the age of six participated in the workforce in the U.S., and more than 60% of two-parent households comprised dual career earners.

Despite workforce demographic shifts related to COVID-19, we believe that the number of working mothers, single and dual working parent families will return to pre-COVID-19 trends over time, resulting in an increasing need for child and dependent care, as well as other workplace solutions that support employees at each life and career stage.

Growing Demand for High-Quality Center-Based Early Education and Child Care Services

We believe that recognition of the importance of early education and consistent quality child care has led to increased interest in higher-quality center-based early education and child care.

We believe that recognition of the importance of early education and consistent quality child care has led to increased interest in high quality center-based early education and child care.

There is continued focus on the establishment of objective, standards-based methods of defining and measuring the quality of child care, such as accreditation.

We believe robust health and safety protocols and the social, educational and other developmental opportunities presented by center-based care are important factors for families when determining the preferred care options for their children.

In accordance with a 2019 study conducted by the National Center for Education Statistics, more than 60% of families sought center-based care.

According to a 2019 study conducted by the National Center for Education Statistics, more than 60% of families sought center-based care.

In a highly fragmented market comprised largely of center operators lacking scale, we believe clients and families will favor larger industry participants with greater resources to consistently achieve the high quality standards and needs of clients and families.

Additionally, child care center closures brought on by the pandemic have resulted in a decrease in overall available capacity, further contributing to supply/demand imbalance.

Additionally, child care center closures brought on by the pandemic have resulted in a decrease in overall available capacity.

We also believe that the increasing emphasis on the importance of early education and child care, and ongoing efforts to make child care affordable and available for working families, will contribute to further growth in the global early education and child care market as well as the developing markets for back-up care and educational advisory services.

Diversity, Equity and Inclusion

We are in the unique position of educating the next generation, and with that responsibility comes the opportunity to make a difference by modeling for children and families an environment that is open, curious, and genuinely interested in what is different.

Our curriculum and teacher training program are designed to support inclusive classrooms and create culturally authentic learning environments that celebrate and explore all cultures and experiences.

Our curriculum and teacher training programs are designed to support inclusive classrooms and create culturally authentic learning environments that celebrate and explore all backgrounds and experiences.

We are also exploring with clients how our services support their diversity, equity and inclusion objectives, particularly in workforce education.

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We estimate we have approximately six times more employer-sponsored centers in the United States than our closest competitor.

We believe the broad geographic reach of our early education and child care centers and workplace solutions, with targeted clusters of centers in areas where we believe demand is generally higher and where income demographics are attractive, provides us with a competitive platform to market our suite of services to new and existing clients.

We believe the broad geographic reach of our early education and child care centers and workplace solutions, with targeted clusters of centers in areas where we believe demand is generally higher and where demographics are attractive, provides us with a competitive platform to market our suite of services to new and existing clients.

Our business is anchored in our commitment to consistently provide high-quality service offerings to employers and families.

We have designed our child care centers to meet or exceed applicable accreditation and rating standards in all of our key markets, including standards set in the United States by the National Academy of Early Childhood Programs, a division of the National Association for the Education of Young Children (NAEYC), and in the United Kingdom by the Office of Standards in Education, Children’s Services and Skills (OFSTED).

We have designed our child care centers to meet or exceed applicable accreditation and rating standards in all of our key markets, including standards set in the United States by the National Academy of Early Childhood Programs, a division of the National Association for the Education of Young Children (NAEYC), in the United Kingdom by the Office of Standards in Education, Children’s Services and Skills (OFSTED), and in Australia by the Education Council and Australian Children’s Education and Care Quality Authority (ACECQA).

We believe our commitment to achieving accreditation standards offers a competitive advantage in attracting and retaining families and in securing employer sponsorship opportunities as an increasing number of potential and existing employer clients require or expect adherence to accreditation criteria.

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Dedicated to the highest quality services in every category in which we operate, our standards of quality also extend to our back-up care and educational advisory services, whether care is delivered in Bright Horizons child care centers, through the quality child care centers and in-home care providers participating in our proprietary back-up care network, or advising provided by our team of education experts.

In addition to our annual client retention rate of approximately 95%, we have consistently achieved satisfaction ratings of approximately 97% among respondents in our parent satisfaction surveys, which is a testament to our ability to deliver on our commitment to quality.

In addition to our annual client retention rate of approximately 95%, we have consistently achieved satisfaction ratings of over 90% among respondents in our parent satisfaction surveys, which is a testament to our ability to deliver on our commitment to quality.

Collaborative, Long-Term Relationships with Diverse Customer Base

We have more than 1,400 client relationships with employers across a diverse array of industries, including more than 215 of the Fortune 500 companies, with our largest client contributing 1% of our revenue in 2022 and our largest 10 clients representing approximately 8% of our revenue in the same year.

Our business model emphasizes multi-year employer sponsorship contracts where our clients typically fund the development of new child care centers (which is typically owned or leased by the sponsor) at or near their worksites and frequently support the ongoing operations of these centers through operating subsidies.

Our business model emphasizes multi-year employer sponsorship contracts where our clients typically fund the development of new child care centers (which are typically owned or leased by the sponsor) at or near their worksites and frequently support the ongoing operations of these centers through operating subsidies.

Our multiple service points with both employers and employees give us unique insight into the corporate culture of our clients and enables us to identify and provide innovative and tailored solutions to address our clients’ specific and evolving needs.

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We have consistently been named as a top employer by third-party sources in the United States, the United Kingdom and the Netherlands, including being named as one of the “100 Best Companies to Work For” by Fortune magazine 20 times, as well as a great place to work in the United Kingdom and in the Netherlands by the Great Place to Work Institute.

We have also been named one of the “Top Places to Work” by the Boston Globe 12 times and the Denver Post eight times.

We have also been named one of the “Top Places to Work” by the Boston Globe 13 times and the Denver Post nine times.

We believe the education and experience of our center leaders and teachers exceed the industry average.

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Additionally, our Horizons Teacher Degree Program provides our early educators the ability to earn an associate and bachelor’s degree in early childhood education completely paid for by Bright Horizons with no out-of-pocket expenses to the employee.

We believe this program is unique in our industry and will continue to distinguish us as an employer of choice while helping to retain and incent teachers to grow their careers at Bright Horizons.

We believe this program is unique in our industry and will continue to distinguish us as an employer of choice while helping to retain and incentivize teachers to grow their careers at Bright Horizons.

For more information about our market leading people practices, please see the subsection below entitled “ Human Capital Management.”

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We have a long history of proven financial results despite broader macro-economic fluctuations.

With employer sponsors funding the majority of the capital required for new centers developed on their behalf, we have been able to grow our business with limited capital investment, which has contributed to strong cash flows from operations.

With employer sponsors funding the majority of the capital required for new centers developed on their behalf, and our back-up services provided through our own center portfolio and third party providers, we have been able to grow our business with limited capital investment, which has contributed to strong cash flows from operations.

Proven Acquisition Track Record

We have an established acquisition team that pursues targets using a proven framework to effectively evaluate potential transactions with the goal of maximizing our return on investment while minimizing risk.

Over the last ten years, we have completed the acquisition of approximately 400 child care centers in the United States, the United Kingdom and the Netherlands, as well as providers of back-up care services and educational advisory and other services in the United States and the United Kingdom, helping us expand our client base, enhance the scope and reach of our service offerings, broaden our technological capabilities, and offer new services.

In 2021, we acquired 18 child care centers as well as a school-age camp provider.

Over the last ten years, we have completed the acquisition of approximately 430 child care centers in the United States, the United Kingdom, Australia and the Netherlands, as well as providers of back-up care services and educational advisory and other services in the United States and the United Kingdom, helping us expand our client base, enhance the scope and reach of our service offerings, broaden our technological capabilities, and offer new services.

In 2022, we acquired 78 child care centers.

Our Growth Strategy

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Enable Continued Investments in Quality

We look for opportunities to invest in quality as a way to enhance our reputation and partnership with our clients, their employees, and the families we serve, such as enhanced curriculum and enrichment activities.

For parents and families, we offer timely webinar series and monthly podcasts that reflect current issues facing families, as well as share our curriculum with families at home through our online World at Home platform.

We look for opportunities to invest in quality to ensure we fulfill our commitment of research-based early education excellence as a way to enhance our reputation and partnership with our clients, their employees, and the families we serve through enhanced curriculum and enrichment activities, teacher education and development programs, and ongoing program evaluation.

For parents and families, we offer timely webinar series and monthly podcasts that reflect current issues facing families and provide parenting tips and insights, as well as share our curriculum with families at home through our online platforms.

By developing a strong reputation for high-quality services and facilities, we have been able to support price increases that have kept pace with our cost increases.

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We look for opportunities to increase the use of our back-up care and educational advisory services, not only by growing client relationships, but also by driving use with existing clients.

In 2021, we expanded our back-up care offerings to include virtual tutoring and broaden our school-age camp programs addressing education and care needs while extending the coverage of our services.

Over the last two years, we expanded our back-up care offerings to include virtual tutoring and pet care, and broadened our school-age camp programs addressing education and care needs while extending the coverage of our services.

We continue to invest in new technologies to better support our full suite of services and to enhance our customers’ user experience to help drive utilization.

We have expanded our marketing efforts with additional focus on driving awareness and use of our services, with a focus on maximizing occupancy levels in centers where we can improve our economics with increased enrollment.

Selectively Add New Lease/Consortium Centers and Expand Through Acquisitions

We have typically added between 10 and 15 new lease/consortium centers (as more fully described below) annually in the years prior to COVID-19, focusing on urban or surrounding markets where demand is generally higher and where income demographics are generally more supportive of our high-quality centers.

We have typically added between 10 and 15 new lease/consortium centers (as more fully described below) annually, focusing on urban or surrounding markets where demand is generally higher and where income demographics are generally more supportive of our high-quality centers.

In addition, we have a long track record of successfully completing and integrating selective acquisitions across all business lines.

The domestic and international markets for child care and other work and family support services remain highly fragmented, and we will continue to seek attractive opportunities both for center acquisitions and the acquisition of complementary service offerings.

The domestic and international markets for child care and other work and family support services remain highly fragmented and, as we look to fiscal 2023 and beyond, we will continue to seek attractive opportunities both for center acquisitions and the acquisition of complementary service offerings.

Our Operations

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Full service center-based child care includes traditional center-based early education and child care, preschool, and elementary education.

Back-up care includes center-based back-up child care, in-home care for children and adult/elder dependents, school-age camps, virtual tutoring and self-sourced reimbursed care.

Educational advisory and other services consist of tuition assistance and student loan repayment program administration, workforce education, related educational advising, college admissions advisory services, and Sittercity, an online marketplace for families and caregivers.

Back-up care includes center-based back-up child care, in-home care for children and adult/elder dependents, school-age camps, virtual tutoring, pet care and self-sourced reimbursed care.

Educational advisory and other services consist of tuition assistance and student loan repayment program management, workforce education, related educational advising, college advisory services, and Sittercity, an online marketplace for families and caregivers.

The following table sets forth our segment results for the year ended December 31, 2022:

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As a percentage of total revenue 74 % 20 % 6 % 100 %

Income (loss) from operations $ (8,431) $ 115,173 $ 22,276 $ 129,018

Income from operations $ 12,937 $ 118,788 $ 25,860 $ 157,585

As a percentage of total income from operations 9 % 75 % 16 % 100 %

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Approximately 75% of our centers operate under the P&L model.

Under this model, we retain the financial risk of operating the center and are therefore subject to variability in financial performance due to fluctuations in enrollment levels.

Under this model, we retain the financial outcomes of operating the center and are therefore subject to variability in financial performance due to fluctuations in enrollment levels.

The P&L model is further classified into two subcategories:

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Under the sponsor model, we provide early education and child care on an exclusive or priority enrollment basis for the employees of an employer sponsor, and the employer sponsor generally retains responsibility for the development of the child care center (which is owned or leased by the sponsor), as well as pre-opening capital equipment and ongoing maintenance and repair.

Arrangements with employer sponsors generally have initial terms ranging from three to ten years with varying terms, renewal and termination options.

Arrangements with employer sponsors generally have initial terms ranging from 3 to 10 years with varying terms, renewal and termination options.

• Lease model:

Under the lease model, the child care center is typically located in an office building or office park in a property that we lease, and we provide early education and child care services to the employees of multiple employers, as well as to families in the surrounding community.

Under the lease model, the child care center is typically located near where working parents live and/or work in a property that we lease, and we provide early education and child care services to the employees of multiple employers, as well as to families in the surrounding community.

We typically enter into leases with initial terms ranging from 10 to 15 years for these centers, often with renewal options.

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Tuition at most of our early education and child care centers is payable in advance and is typically due monthly.

Historically, annual revenue per center typically averages between $1.6 million and $2.1 million at our centers in North America and averages between $1.2 million and $1.3 million at our centers in Europe, which is primarily driven by the size and capacity of centers.

Our North American early education and child care centers have an average capacity of 128 children per location, while our centers in Europe have an average capacity of 84 children per location.

Gross margin at our centers typically averages between 20% and 25%, with our cost-plus model centers typically at the lower end of that range and our lease centers at the higher end.

In 2021, as our center operations continue to recover and manage the disruptions caused by COVID-19, annual revenue per center averaged approximately $1.3 million in both North America and Europe, which in turn contributed to a contraction in gross margins to approximately 14% for the year.

Historically, annual revenue per center typically averages between $1.6 million and $2.1 million at our centers in North America and averages between $1.2 million and $1.8 million at our international centers, which is primarily driven by the size and capacity of centers.

Our North American early education and child care centers have an average capacity of 129 children per location, while our international centers have an average capacity of 86 children per location.

Gross margin at our mature centers typically averages between 20% and 25%, with our cost-plus model centers typically at the lower end of that range and our lease centers at the higher end.

In 2022, as our center operations continue to recover from the pandemic, annual revenue per center averaged approximately $1.7 million in North America and $1.2 million internationally, which in turn contributed to a contraction in gross margins to approximately 15% for the year.

Cost of services consists of direct expenses associated with the operation of early education and child care centers and is primarily comprised of personnel salaries and benefits, food costs, program supplies and materials, parent marketing and facilities costs, which include occupancy costs and depreciation.

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We provide back-up care services for children (primarily 0-12 years old) through our own full service centers, dedicated back-up child care centers, school-age camps, and in-home caregivers, as well as through our proprietary back-up care network of quality child care centers and in-home care providers.

In addition, we provide back-up care services for adults/elders through our proprietary network of quality in-home care providers, and we offer virtual tutoring for school-age children through our network of tutoring service providers.

We also help to facilitate back-up care services through our self-sourced reimbursed care program.

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Cost of services consist of direct expenses associated with the operation of dedicated back-up 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.

SGA related to back-up care is similar to SGA for full service center-based child care, with additional expenses related to the information 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.

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.

Educational Advisory and Other Services

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Contracts are typically three years in length, with varying terms, renewal and termination options, and fees are generally determined based on the services being provided and the number of program participants.

Cost of services consist of personnel and direct service costs of the contact centers, and other expenses related to the coordination and delivery of tuition assistance and student loan repayment program administration, and educational advisory and counseling services.

Cost of services consist of personnel and direct service costs of the contact centers, and other expenses related to the coordination and delivery of tuition assistance and student loan repayment program management, and educational advisory and counseling services.

SGA related to educational advisory services is similar to SGA for back-up care.

Bright Horizons EdAssist Solutions.

EdAssist provides workforce education, tuition assistance and student loan repayment program administration, 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 maximizing their efficiency and effectiveness through our employee educational advisory services, our education network, and access to streamlined degree programs.

Administration services are provided through proprietary software for the processing of tuition reimbursement, loan repayment transactions, and analysis of data, as well as a team of compliance professionals who evaluate and process employee applications for tuition reimbursement or student loan repayment and enforce the employer client’s policies.

EdAssist by Bright Horizons.

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.

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 client employees on a one-on-one basis through our team of advisors who help employees make better decisions regarding their education and financial wellness.

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Customer service is also provided through our contact center in Broomfield, Colorado.

The EdAssist Solutions services derive revenue directly from fees paid by employers.

EdAssist services derive revenue directly from fees paid by employers.

Bright Horizons College Coach.

Bright Horizons College Coach provides college admissions and college financing advisory services through our team of experts, whom have experience working in admissions or financial aid at colleges and universities.

Bright Horizons 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.

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Other services consists of Sittercity, an online marketplace for families and caregivers.

Sittercity revenue is generated from subscriptions to a proprietary online search platform and marketplace that helps families find child care (babysitting/nannies), as well as senior and pet care.

Sittercity revenue is generated from subscriptions to a proprietary online search platform and marketplace that helps families find child care (babysitting/nannies), as well as senior care and pet care.

We operate in two primary regions:

(1) North America, which includes the United States and Puerto Rico, and (2) Europe, which includes the United Kingdom, the Netherlands, and India.

(1) North America, which includes the United States and Puerto Rico, and (2) International, which includes the United Kingdom, the Netherlands, Australia and India.

The following table sets forth information by geographic region for the year ended December 31, 2022:

North America Europe Total

North America International Total

(In thousands, except percentages)

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As a percentage of total fixed assets, net 57 % 43 % 100 %

Our international business primarily consists of child care centers throughout the United Kingdom and the Netherlands, with approximately 95% of the revenue generated in Europe related to the full service center-based child care segment.

As of December 31, 2021, we had 650 centers in North America and 364 centers in Europe.

Our international business primarily consists of child care centers throughout the United Kingdom, Australia and the Netherlands, with approximately 95% of the revenue generated related to the full service center-based child care segment.

As of December 31, 2022, we had 643 centers in North America and 435 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.

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Brand Awareness and Thought Leadership

We market our services and build our brand through virtual events, social media earned and paid media placements, digital and print advertising, e-books, direct mail, and a robust search engine optimization strategy.

We market our services and build our brand through virtual events, social media, earned and paid media placements, digital and print advertising, articles and blogs, direct mail, and a robust search engine optimization strategy.

Our senior leaders are involved at the national level with education, work/life and early child care advocacy, and we believe that their visibility and involvement helps attract new business.

We believe that o ur proprietary research, events, and the availability of uniquely knowledgeable industry leaders help sustain our brand awareness and position Bright Horizons as a thought leader in the markets where we operate.

For employer sponsors and their employees , we conduct our annual Modern Family Index and the Working Learner Index, capturing snapshots of critical market sectors at a particular moment in time.

For employer sponsors and their employees , we conduct our annual Modern Family Index and The Education Index, capturing snapshots of critical market sectors at a particular moment in time.

For parents and families, we offer timely webinar series as well as monthly podcasts that reflect current issues facing families.

Timely Approaches that Evolve With the Workplace

We strive to meet clients’ real-time needs as demonstrated by our capacity to pivot as the marketplace shifts, rolling out and marketing new services to meet evolving work environments and to support more people who are working and learning from home.

Marketing tools have expanded to include text messages;

We strive to meet clients’ needs as demonstrated by our capacity to pivot as the marketplace shifts, rolling out and marketing new services to meet evolving work environments.

Marketing tools have expanded to include text message communication;

targeted back-up journeys and campaigns;

virtual center tours to allow parents to visit centers safely;

outreach for flexible care offerings emphasizing virtual options including tutoring and camps;

and sharing our curriculum with families at home through our online World at Home platform.

outreach for flexible care offerings including virtual options such as tutoring and camps;

and sharing our curriculum and extension activities with families at home through our online platforms.

Outreach for these efforts includes persona-based campaigns for back-to-school and return-to-office support;

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Our My Bright Horizons is a portal for client employees to instantly access all their Bright Horizons benefits and BH Central , a self-service portal for client liaisons to track real-time benefit use and access materials to support internal marketing efforts, including a newsletter with tailored resource content.

Other efforts include local digital advertising, partnerships with parent groups, Instagram page takeovers, ramped social efforts, direct mail, and webinars.

Other efforts include local digital advertising, partnerships with parent groups, ramped social efforts, direct mail, and webinars.

We believe we are a leading provider of employer-sponsored center-based child care, back-up care, and workforce education services.

We estimate that we have approximately six times more market share in the employer-sponsored center-based child care market in the United States than our closest competitors.

We estimate that we have approximately six times more market share in the employer-sponsored center-based child care market in the United States than our closest competitor.

The market for early education and child care services is highly fragmented, and we compete for enrollment and sponsorship of early education and child care centers with a variety of other organizations, including large community-based child care companies, regional child care providers, family day care, nannies, for-profit and not-for-profit full- and part-time nursery schools, public and private elementary schools, and not-for-profit and government-funded providers of center-based child care.

Our principal competitors for employer-sponsored centers include KinderCare Education in the United States and Busy Bees in the United Kingdom.

We also compete for enrollment on a center-by-center basis with these providers, along with many local and national providers, such as Learning Care Group, Goddard Schools, Primrose Schools, Childbase, KidsFoundation, Kids Planet, and CompaNanny.

We also compete for enrollment on a center-by-center basis with these providers, along with many local and national providers, such as Affinity Education Group, Childbase, CompaNanny, G8 Education, Goddard Schools, Goodstart Early Learning, Guardian Childcare & Education, Learning Care Group, Primrose Schools, and KidsFoundation.

Competition for back-up care comes from IAC/Interactivecorp (Care.com) in addition to employee assistance programs and smaller work/life companies.

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We believe the key factors in the competition for enrollment are quality, 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.

While our child care tuition levels are generally higher than our competitors, we compete primarily based on the convenience of a worksite location and a higher level of program quality.

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.

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.

In addition, some of our competitors may benefit from strong local name recognition (such as established regional providers) 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).

In the wake of COVID-19, we believe our enhanced health and safety protocols are market leading and are an important consideration for families and clients.

In the wake of COVID-19, we believe our health and safety protocols are market leading and are an important consideration for families and clients.

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.

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As of December 31, 2022, we had approximately 29,100 global employees (including part-time and substitute teachers), of whom approximately 3,100 were employed as corporate, divisional and regional employees, and approximately 26,100 were employed at our early education and child care centers and as in-home caregivers.

The total number of employees includes approximately 16,300 in North America, 7,400 in the United Kingdom, 2,050 in the Netherlands and 35 in India.

The total number of employees includes approximately 17,350 in North America, 7,300 in the United Kingdom, 2,050 in the Netherlands, 2,350 in Australia, and 50 in India.

Corporate, divisional and regional staff members make up our “Home Team” employees, and staff members working at our early education and child care centers, including teachers and support personnel, and in-home caregivers make up our “Field” employees.

The employees at one child care center, which has been closed due to the COVID-19 pandemic since early 2020, are represented by a labor union, and we are currently negotiating a collective bargaining agreement with this union in good faith.

Employees that work at one child care center, which has been closed since the COVID-19 pandemic, remain represented by a labor union.

We have continued to negotiate a collective bargaining agreement with this union in good faith.

We believe employers across industries are looking to deploy creative solutions to address labor challenges, enhance their employee value proposition and provide benefits for their workforce to enable their employees to excel both personally and professionally.

While our broad suite of solutions position us well to assist employers with these strategies, our own services and solutions serve as a significant element of our own talent management strategy.

While our broad suite of solutions positions us well to assist employers with these strategies, our own services and solutions serve as a significant element of our own talent management strategy.

Talent Acquisition

Our business is about serving people and our success depends on attracting, developing and retaining talented and highly qualified employees.

Our business is about people serving people, and our success depends on attracting, developing and retaining talented and highly qualified employees.

We are continually investing in resources and creating programs to drive diversity, equity and inclusion, to provide fair and competitive pay and benefits to support our employees’ well-being, and to foster personal growth and career development opportunities.

We endeavor to create an environment that rewards performance, enhances our culture and employee experience, and retains and engages our talent.

In 2021, we launched an extensive talent acquisition campaign to recruit teachers and staff.

We promoted a National Hiring Day and a new careers website to help our existing team, as well as new and prospective employees, understand the value proposition of a career at Bright Horizons.

As part of our continued commitment to support the well-being of our Bright Horizons team, and to help address the challenges in recruiting and retaining top talent, the following are a few examples of the investments we have made, with respect to eligible employees in certain markets, to further strengthen our position as an employer of choice:

In 2022, we continued our extensive talent acquisition campaign to recruit teachers and staff and have enhanced the candidate and new hire experience through initiatives such as the 100 Days of Heart onboarding program, an alumni recruitment initiative program and an enhanced employee referral program.

As part of our continued commitment to support the well-being of our Bright Horizons team, and to help address the challenges in recruiting and retaining top talent, we continue to make investments with respect to eligible employees in certain markets, to further strengthen our position as an employer of choice:

• Increased pay through off-cycle market adjustments for teachers and staff in a number of key markets.

• Expanded our back-up care benefit for full and part-time employees;

• Increased our child care tuition subsidy for teachers and center directors;

• Expanded benefits and access to our Tuition Assistance program for Home Team employees.

• Enhanced our mental health and wellness resources through a new and expanded well-being offering.

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• 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 education degree;

• 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.

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• “Best Workplaces” in the United Kingdom by the Great Place to Work Institute Awarded 17 times — most recently in 2022

• “Best Workplaces” in the Netherlands by the Great Place to Work Institute Awarded seven times — most recently in 2020

• “Best Workplaces” in the Netherlands by the Great Place to Work Institute Awarded eight times — most recently in 2022

• “Top Places to Work” by the Boston Globe Awarded 13 times — most recently in 2022

• Forbes 2022 Best Employers for Diversity

• Forbes 2022 Best Employers for Women

• Bloomberg 2022 Gender Equality Index

• Human Rights Campaign Foundation’s Corporate Equality Index 2022

• 2021 “Best Workplaces for Women” by the Great Place to Work Institute in the United Kingdom

• PEOPLE Magazine 2021 Companies that Care

• 2022 “Best Workplaces for Wellbeing” by the Great Place to Work Institute in the United Kingdom

• PEOPLE magazine 100 Companies that Care for 2022

Our Diversity, Equity and Inclusion Focus

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• Employee Advisory Groups — voluntary, company-sponsored, internal associations dedicated to fostering a diverse and inclusive work environment within the context of Bright Horizons’ mission, values, goals, business practices, and objectives.

We aim to hire a diverse workforce.

We aim to hire a diverse workforce and we are focused on taking action to make real change, not for a moment in time, but for the long-term.

As of December 31, 2022, workforce diversity representation was approximately as follows:

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(4) Senior leader is defined as Vice President and equivalent, and above, and includes executive officers.

We are focused on taking action to make real change, not for a moment in time, but for the long-term and, in 2021, launched a number of initiatives, including:

Bright Horizons joined the OneTen initiative, a coalition of leading employers committed to upskilling, hiring, and promoting one million Black individuals in America over the next 10 years in family-sustaining jobs with opportunities for advancement.

Bright Horizons has the unique position of joining as both a participating employer and as a solution provider/talent developer.

• Tent Partnership for Refugees:

Bright Horizons joined the Tent Partnership for Refugees, a global network of companies committed to supporting refugees around the world, and we support this initiative by inviting refugees to join our welcoming culture and the rewarding field of early education.

Our Investment in Career Growth and Professional Development and our Horizons Teacher Degree Program

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Participants do not have to pay for any expenses out-of-pocket, including tuition, fees and books.

Since its inception in 2018, more than 2,000 teachers have enrolled and over 400 have already graduated.

Since its inception in 2018, more than 2,000 teachers have enrolled and more than 600 have graduated.

Our Employee Engagement

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During 2022, we surveyed employees to ensure that we continued to support their needs and focus on their priorities.

This approach enabled us to act on real-time information to expand our benefits and compensation opportunities and to develop enhanced benefits offerings, including the mental health and wellness supports delivered by our expanded Employee Assistance Program offering.

Additionally, we periodically deploy shorter pulse surveys to ensure our action planning is realizing the desired impact.

This approach enables us to act on real-time information and to take targeted action in response to feedback, such as expanding our benefits and compensation opportunities and to develop enhanced benefits offerings, including new mental health and wellness supports and fostering culture and community through our Better Together teams and The Bright Horizons Foundation for Children.

Our Citizenship

We support the communities in which we work and live, and we encourage our employees to do the same.

We proudly stand behind our many employees who give their time to non-profit organizations, awarding grants to their chosen charities in recognition of their volunteer work in their communities.

We proudly stand with our many employees who give their time to non-profit organizations, awarding grants to their chosen charities in recognition of their volunteer work in their communities.

We also work alongside our employees to support the Bright Horizons Foundation for Children ® and its important mission to bring Bright Spaces ® to children and families in homeless shelters and similar agencies helping at risk children and families, supporting our employees with Brightening Lives activities, and Field and Home Team fundraising events.

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These registrations are subject to varying terms and renewal options.

However, not all of the trademarks or service marks have been registered in all of the countries in which we do business, and we are aware of persons using similar marks in certain countries in which we currently do not do business.

Meanwhile, we monitor our trademarks and vigorously oppose the infringement of any of our registered marks as appropriate.

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The health, safety and well-being of children, families and staff is our top priority.

We have always adhered to rigorous health, hygiene, and disinfecting practices, and now follow enhanced safety protocols, which continue to evolve at both local and national levels.

Our enhanced protocols were developed based on guidance from the Centers for Disease Control, state and local public authorities, and our partnership with medical professionals and experts that specialize in pediatric infectious diseases.

We monitor governmental rules and regulations relating to COVID-19 health guidance and vaccinations as they develop.

We have dedicated health and safety personnel and a Vice President of Global Safety, as well as centralized COVID-19 response teams that support our centers and other operations to ensure compliance with our policy requirements and practices.

In partnership with our experts, we have supported the access to, and communication of the importance of, vaccinations.

We have launched a series of webinars for staff to help them understand the vaccine, its development, and its efficacy, and we regularly provide staff with the latest information and resources about the vaccine, as well as testimonials and interviews with leading experts to help encourage our employees to get vaccinated.

We also provided incentives to further encourage staff to receive their vaccinations.

We adhere to rigorous health, hygiene, and disinfecting practices.

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.

We have health and safety personnel and a Vice President of Global Safety 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, which typically include secure electronic access systems, as well as sign-in and sign-out procedures for children, among other site-specific security measures.

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 such features as child-sized amenities, rounded corners on furniture and fixtures, age-appropriate toys and equipment and cushioned fall zones surrounding play structures.

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.

Each center is further guided by policies and procedures that address protocols for safe and appropriate care of children and center administration.

These policies and procedures establish protocols in various areas, including the safe handling of 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.

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.

These policies and procedures are reviewed and updated continuously by a team of internal experts, and center personnel are trained on center practices using these policies and procedures.

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Our early education and child care centers are primarily operated at or near work-site locations and vary in design and capacity in accordance with employer sponsor needs and regulatory requirements.

Our North American early education and child care centers typically have an average capacity of 128 children, and our locations in Europe have an average capacity of 84 children.

Our North American early education and child care centers typically have an average capacity of 129 children, and our international locations have an average capacity of 86 children.

As of December 31, 2022, our early education and child care centers had a total licensed capacity of approximately 120,000 children, with the smallest center having a capacity of 15 children and the largest having a capacity of approximately 500 children.

We believe that attractive, spacious and child-friendly facilities with warm, nurturing and welcoming atmospheres are an important element in fostering a high-quality learning environment for children.

Our centers are designed to be open and bright and to maximize supervision visibility.

Our centers are designed to be open and bright and to maximize visibility for supervision.

We devote considerable resources to equipping our centers with child-sized amenities, indoor and outdoor play areas comprised of age-appropriate materials and design, family hospitality areas and computer centers.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business