What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-27 · 198 added, 253 removed, 992 unchanged (31% of the section changed)

37 unchanged sentences

Revenue is primarily recognized over time as control of the service is transferred to the customer.

We identified revenue as a critical audit matter because of the number of disparate services offered by the Company and the significant volume of revenue contracts and transactions.

We identified revenue as a critical audit matter because of the number of services offered by the Company and the significant volume of revenue contracts and transactions.

This requires extensive audit effort due to the volume of contracts and transactions and requires a high degree of auditor judgment when performing audit procedures.

6 unchanged sentences

◦ Tested the effectiveness of system interface controls and automated controls within the relevant revenue streams, as well as the controls designed to ensure the accuracy and completeness of revenue.

• We performed analytical procedures to test the reasonableness of recorded balances.

• We selected a sample of transactions within each significant revenue stream and performed the following:

• We performed analytical procedures to evaluate the reasonableness of recorded balances and evaluate trends in transactional revenue data.

• We performed substantive analytical procedures, which compared our independent expectation of revenue based on historical data and current year changes to the amount of revenue recorded by the Company.

• We selected a sample of transactions and performed the following:

◦ Evaluated whether the transaction was accounted for in accordance with the Company’s policies.

◦ Tested the amounts recognized to source documents and tested the mathematical accuracy of the recorded revenue.

◦ Compared the amounts recognized to source documents and tested the mathematical accuracy of the recorded revenue.

• We performed procedures to test that transactions were recorded in the appropriate accounting period.

21 unchanged sentences

Current portion of long-term debt $ — $ 28,500

Current portion of revolving credit facility 199,552 —

Accounts payable and accrued expenses 292,812 304,541

34 unchanged sentences

Income from operations 314,665 246,619 171,241

Loss on foreign currency forward contracts — — ( 5,917 )

Interest expense — net ( 44,758 ) ( 48,761 ) ( 51,609 )

17 unchanged sentences

Foreign currency translation adjustments 74,157 ( 42,543 ) 29,008

Unrealized gain (loss) on cash flow hedges and investments, net of tax ( 8,651 ) ( 17,480 ) 33,795

Unrealized loss on cash flow hedges and investments, net of tax ( 8,712 ) ( 8,651 ) ( 17,480 )

Total other comprehensive income (loss) 65,445 ( 51,194 ) 11,528

15 unchanged sentences

Shares received in net share settlement of stock option exercises and vesting of restricted stock ( 33,462 ) — ( 2,592 ) ( 2,592 )

Purchase of treasury stock ( 182,342 ) ( 182,342 )

Retirement of treasury stock ( 1,986,146 ) ( 2 ) ( 182,340 ) 182,342 —

Other comprehensive loss ( 33,270 ) ( 33,270 )

Other comprehensive income 11,528 11,528

Net income 74,223 74,223

3 unchanged sentences

Shares received in net share settlement of stock option exercises and vesting of restricted stock ( 43,831 ) — ( 5,350 ) ( 5,350 )

Other comprehensive income 11,528 11,528

Purchase of treasury stock ( 85,035 ) ( 85,035 )

Retirement of treasury stock ( 754,090 ) ( 1 ) ( 85,034 ) 85,035 —

Other comprehensive loss ( 51,194 ) ( 51,194 )

Net income 140,191 140,191

5 unchanged sentences

Retirement of treasury stock ( 2,103,656 ) ( 1 ) ( 227,263 ) 227,264 —

Other comprehensive loss ( 51,194 ) ( 51,194 )

Other comprehensive income 65,445 65,445

Net income 193,116 193,116

11 unchanged sentences

Impairment losses and other non-cash items 50,673 41,379 48,399

Loss on foreign currency forward contracts — — 5,917

Stock-based compensation expense 30,614 33,615 28,834

16 unchanged sentences

Payments and settlements for acquisitions — net of cash acquired ( 6,775 ) ( 8,267 ) ( 39,629 )

Settlement of foreign currency forward contracts — — ( 5,917 )

Net cash used in investing activities ( 103,794 ) ( 117,764 ) ( 126,936 )

3 unchanged sentences

Principal payments of long-term debt ( 501,000 ) ( 17,000 ) ( 16,000 )

Payments of debt issuance costs ( 3,046 ) — —

Purchases of treasury stock ( 225,411 ) ( 84,597 ) —

4 unchanged sentences

Effect of exchange rates on cash, cash equivalents and restricted cash 5,939 ( 1,620 ) ( 14 )

Net increase (decrease) in cash, cash equivalents and restricted cash 34,264 37,557 ( 213,387 )

Net increase in cash, cash equivalents and restricted cash 19,443 34,264 37,557

Cash, cash equivalents and restricted cash — beginning of year 123,715 89,451 51,894

14 unchanged sentences

Cash received from cash flow hedges of interest rate risk $ 13,761 $ 23,589 $ 31,826

Cash payments of income taxes $ 75,653 $ 58,736 $ 50,202

Cash payments of income taxes (net of refunds in 2025) $ 72,590 $ 75,653 $ 58,736

Cash paid for amounts included in the measurement of lease liabilities $ 160,308 $ 162,882 $ 156,324

1 unchanged sentence

Fixed asset purchases recorded in accounts payable and accrued expenses $ 1,690 $ 2,473 $ 2,127

Deferred or contingent consideration issued for acquisitions $ 696 $ — $ 97,653

Operating right-of-use assets obtained in exchange for operating lease liabilities — net $ 45,910 $ 69,066 $ 54,741

4 unchanged sentences

Bright Horizons Family Solutions Inc.

(“Bright Horizons” or the “Company”) provides center-based early education and child care, back-up child and senior care, tuition assistance and student loan repayment program management, and educational advisory services for employers and families in the United States, the United Kingdom, the Netherlands, Australia and India.

The Company provides services designed to help families, employers and their employees better integrate work and family life, primarily under multi-year contracts with employers who offer early education and child care, back-up and family care, and workforce education services, as part of their employee benefits packages in an effort to support employees across life and career stages and improve employee engagement.

(“Bright Horizons” or the “Company”) provides early education and child care, comprehensive back-up care solutions, and educational advisory services for employers and families in the United States, the United Kingdom, the Netherlands, Australia and India.

The Company provides services designed to 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.

The Company provides 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.

As of December 31, 2025, the Company operated 1,010 early education and child care centers.

2 unchanged sentences

The Company’s significant accounting policies are described below.

Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.

The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.

Segment information for 2023 and 2022 has been recast to conform to the current year presentation.

During the year ended December 31, 2023, the Company recorded expense of $ 5.5 million for an immaterial correction of an error related to value-added tax incurred in prior periods, of which $ 4.0 million is included in cost of services and $ 1.5 million is included in selling, general and administrative expenses.

Refer to Note 18, Segment and Geographic Information , for additional information.

Reclassification — Certain reclassifications have been made to prior year amounts within certain footnotes to conform to the current year presentation.

59 unchanged sentences

If the carrying amount of the Company’s reporting unit exceeds its fair value, the Company would recognize an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, up to the amount of goodwill allocated to that reporting unit.

The Company performed a quantitative assessment for one reporting unit and a qualitative assessment for the remaining reporting units in the 2024 annual impairment review as of October 1, 2024.

The Company performed a quantitative assessment for all reporting units in the 2023 annual impairment review as of October 1, 2023.

The Company performed a quantitative assessment for one reporting unit and a qualitative assessment for the remaining reporting units in the 2025 and 2024 annual impairment review as of October 1, 2025 and 2024, respectively.

The Company recorded impairment charges of $ 4.2 million in the year ended December 31, 2024, which was included in selling, general and administrative expenses.

40 unchanged sentences

The employer subsidy for cost-plus managed centers, which consists of variable consideration, is typically calculated as the difference between parent tuition revenue and the operating costs for the center for each respective month and is recognized as revenue in the month the services are provided.

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.

The variable consideration relates specifically to efforts to transfer each distinct daily service and the allocation of the consideration earned to that distinct day on which those activities are performed is consistent with the overall allocation objective.

Back-Up Care Services

9 unchanged sentences

Revenue for self-sourced reimbursed care and certain pet care is based on a fee earned for each transaction processed and is recorded on a net basis as the Company is acting as an agent, and is recognized in the month the transactions are processed.

In fiscal year 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.

As a result, effective January 1, 2024, the back-up care reportable segment includes the Sittercity operations.

Revenue is primarily generated from subscriptions, comprised of fixed fees for the subscription period and, to a lesser extent, variable transaction fees collected from users at the point of service.

21 unchanged sentences

Leases — The Company has operating leases for certain of its full service and back-up early education and child care centers, corporate offices, call centers, and to a lesser extent, various office equipment, in the United States, the United Kingdom, the Netherlands, and Australia.

Most of the leases expire within 10 to 15 years and many contain renewal options and/or termination provisions.

Most leases have an original term of 10 to 15 years and many contain renewal options and/or termination provisions.

As of December 31, 2025 and 2024, there were no material finance leases.

23 unchanged sentences

The Company reviews the equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company accounts for its interests in a provider of full service center-based child care and back-up care services in Germany and a provider of early education and tutoring in the Netherlands using the equity method.

The Company accounts for its interests in a provider of full service center-based child care and back-up care services in Germany and until April 2024, a provider of early education and tutoring in the Netherlands using the equity method.

In April 2024, the Company acquired the remaining shares outstanding of the provider of early education and tutoring in the Netherlands resulting in control and consolidation of the investment previously accounted for under the equity method.

30 unchanged sentences

The Company calculates the fair value of stock options using the Black-Scholes option-pricing model.

The fair value of restricted stock, restricted stock units and performance restricted stock units is based on their intrinsic value on the date of grant.

The fair value of restricted stock, restricted stock units and performance restricted stock units is valued at the stock price on the date of grant, less amounts paid by the employee, if any.

Excess (shortfall) tax benefits (expense) associated with stock-based compensation are recognized as a component of income tax expense.

2 unchanged sentences

Therefore, taxes are not provided for the related currency translation adjustments.

Earnings Per Share — Earnings per share is calculated using the treasury method for the year ended December 31, 2024 and the two-class method for the years ended December 31, 2023 and 2022.

Earnings Per Share — Earnings per share is calculated using the treasury method for the years ended December 31, 2025 and 2024, and the two-class method for the year ended December 31, 2023.

Basic earnings per share is calculated by dividing the net income available to stockholders by the weighted-average common shares outstanding.

7 unchanged sentences

Amounts received for tuition support are recognized as revenue if such payments are made on behalf of the customers.

During the years ended December 31, 2023 and 2022, funding received from pandemic-related government support programs reduced center cost of services by $ 49.4 million and $ 86.8 million, respectively, of which $ 17.5 million and $ 31.7 million, respectively, reduced the operating subsidies paid by employers for the related child care centers.

Additionally, during the years ended December 31, 2023 and 2022, amounts received for tuition support of $ 1.7 million and $ 5.5 million, respectively, were recorded to revenue.

During the year ended December 31, 2023, funding received from pandemic-related government support programs reduced center cost of services by $ 49.4 million, of which $ 17.5 million reduced the operating subsidies paid by employers for the related child care centers.

Additionally, during the year ended December 31, 2023, amounts received for tuition support of $ 1.7 million were recorded to revenue.

REVENUE RECOGNITION

7 unchanged sentences

North America $ 1,302,672 $ 663,750 $ 124,500 $ 2,090,922

International 692,869 56,220 — 749,089

Outside North America 778,447 64,238 — 842,685

$ 2,081,119 $ 727,988 $ 124,500 $ 2,933,607

1 unchanged sentence

North America $ 1,268,916 $ 553,892 $ 114,116 $ 1,936,924

International 615,061 42,659 — 657,720

Outside North America 692,869 56,220 — 749,089

$ 1,961,785 $ 610,112 $ 114,116 $ 2,686,013

1 unchanged sentence

North America $ 1,165,554 $ 483,251 $ 111,732 $ 1,760,537

International 491,352 27,705 — 519,057

Outside North America 615,061 42,659 — 657,720

$ 1,780,615 $ 525,910 $ 111,732 $ 2,418,257

The classification “North America” is comprised of the Company’s operations in the United States (including Puerto Rico) and the classification “International” includes the Company’s operations in the United Kingdom, the Netherlands, Australia and India.

The classification “North America” is comprised of the Company’s operations in the United States (including Puerto Rico) and the classification “Outside North America” includes the Company’s operations in the United Kingdom, the Netherlands, Australia and India.

Revenue in the United States was substantially all of the revenue in North America.

1 unchanged sentence

Revenue associated with each of the other countries in which the Company operates was less than 10% of total revenue.

On July 1, 2022, the Company acquired Only About Children, an operator of 75 child care centers in Australia.

Refer to Note 5, Acquisitions , for additional information.

Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.

The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.

Segment information for 2023 and 2022 has been recast to conform to the current year presentation.

Deferred Revenue

1 unchanged sentence

The Company recognized $ 303.8 million, $ 268.3 million, and $ 220.1 million as revenue in the years ended December 31, 2025, 2024, and 2023, respectively, which was included in the deferred revenue balance at the beginning of each respective year.

There were no significant changes in deferred revenue during the years ended December 31, 2024, 2023 and 2022 related to business combinations, impairments, cumulative catch-up or other adjustments other than related to the opening balance sheet for the Only About Children acquisition in 2022.

Refer to Note 5, Acquisitions , for additional information.

There were no significant changes in deferred revenue during the years ended December 31, 2025, 2024 and 2023 related to business combinations, impairments, cumulative catch-up or other adjustments.

Remaining Performance Obligations

30 unchanged sentences

Long-term operating lease liabilities $ 702,845

As of December 31, 2024, the Company did no t have any material operating leases that have not yet commenced.

As of December 31, 2025, the Company did not have any material operating leases that have not yet commenced.

The Company’s growth strategy includes expansion through strategic and synergistic acquisitions.

1 unchanged sentence

2025 Acquisitions

During the year ended December 31, 2025, the Company acquired three centers in the United Kingdom in two separate business acquisitions, which were each accounted for as a business combination.

The businesses were acquired for cash consideration of $ 6.8 million, net of $ 0.3 million cash acquired, and $ 0.1 million of deferred consideration, and are subject to adjustments from the settlement of the final working capital.

The Company recorded goodwill of $ 4.9 million related to the full service center-based child care segment for these acquisitions, which will not be deductible for tax purposes.

In addition, the Company recorded intangible assets of $ 0.5 million.

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value;

such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).

As of December 31, 2025, the purchase price allocations for these acquisitions remain open as the Company gathers additional information regarding the assets acquired and the liabilities assumed.

The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition and were not material to the Company’s financial results.

2024 Acquisitions

In April 2024, the Company acquired the remaining shares outstanding of a provider of early education and tutoring in the Netherlands for cash consideration of $ 1.3 million and contingent consideration of $ 0.7 million payable in 2026 and 2027, resulting in control and consolidation of an investment previously accounted for under the equity method.

6 unchanged sentences

In addition, the Company recorded intangible assets of $ 0.9 million that will be amortized over four years .

The determination and allocation of purchase price consideration is based on preliminary estimates of fair value;

such estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date).

As of December 31, 2024, the purchase price allocations for these acquisitions remain open as the Company gathers additional information regarding the assets acquired and the liabilities assumed.

The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition, and were not material to the Company’s financial results.

During the year ended December 31, 2024, the Company paid deferred consideration of $ 106.5 million related to the 2022 acquisition of Only About Children.

9 unchanged sentences

During the year ended December 31, 2023, the Company paid contingent consideration of $ 0.2 million related to an acquisition completed in 2021, which had been recorded as a liability at the date of acquisition and is presented as cash used in financing activities in the consolidated statement of cash flows.

2022 Acquisitions

Only About Children

On July 1, 2022, the Company, through wholly-owned subsidiaries, completed the acquisition of the outstanding shares of Only About Children, a child care operator in Australia with approximately 75 early education and child care centers, for aggregate consideration of AU$ 450 million (USD$ 310 million), which was accounted for as a business combination.

The Company paid approximately AU$ 300 million (USD$ 207 million), net of cash acquired and subject to customary purchase price adjustments, and paid an additional USD$ 106.5 million 18 months after closing, in January 2024, in accordance with the terms of the purchase agreement.

In the fourth quarter of 2022, the Company reached an agreement with the sellers on the final net working capital acquired, resulting in a refund of AU$ 2.6 million (USD$ 1.8 million).

During the year ended December 31, 2022, the Company incurred acquisition-related transaction costs of approximately $ 9.2 million, which were included in selling, general and administrative expenses.

In addition, the Company recognized realized losses of $ 5.9 million in relation to foreign currency forward contracts for the purchase of Australian dollars entered into in connection with the acquisition.

Refer to Note 12, Credit Arrangements and Debt Obligations, for additional information on the foreign currency forward contracts.

The purchase price for this acquisition has been allocated based on estimates of the fair values of the acquired assets and assumed liabilities at the date of acquisition as follows:

At acquisition date

September 30, 2022 Measurement period adjustments At acquisition date

September 30, 2023

(In thousands)

Cash $ 4,705 $ — $ 4,705

Accounts receivable and prepaid expenses 4,295 ( 54 ) 4,241

Fixed assets 21,702 ( 1,850 ) 19,852

Goodwill 283,466 4,398 287,864

Intangible assets 30,945 ( 3,377 ) 27,568

Operating lease right of use assets 156,678 ( 4,408 ) 152,270

Total assets acquired 501,791 ( 5,291 ) 496,500

Accounts payable and accrued expenses 17,991 772 18,763

Deferred revenue and parent deposits 6,809 62 6,871

Deferred tax liabilities 3,392 ( 3,392 ) —

Operating lease liabilities 161,405 ( 1,715 ) 159,690

Other long-term liabilities 5,458 ( 1,018 ) 4,440

Total liabilities assumed 195,055 ( 5,291 ) 189,764

Purchase price $ 306,736 $ — $ 306,736

The Company recorded goodwill of $ 287.9 million related to the full service center-based child care segment, which will not be deductible for tax purposes.

Intangible assets consist of customer relationships of $ 19.7 million with a 6 year life and trade names of $ 7.9 million with an 11 year life.

The operating results for Only About Children are included in the consolidated results of operations from the date of acquisition, and are reported with the full service center-based child care segment.

The following table presents consolidated pro forma revenue as if the acquisition of Only About Children had occurred on January 1, 2021:

Pro forma (Unaudited)

Year ended December 31, 2022

(In thousands)

Revenue 2,089,404

Other than the impact of shifting the transaction costs incurred in 2022 to 2021, consolidated pro forma net income would not materially change from the reported results.

In assessing the impact to the unaudited pro forma results we considered certain adjustments related to the acquisition, such as increased amortization expense related to the acquired intangible assets, adjusted depreciation associated with the fair value of the acquired fixed assets, and shifting of transaction costs.

Other 2022 Acquisitions

During the year ended December 31, 2022, the Company acquired one center in the United States, one center in the United Kingdom, and one center in the Netherlands, in three separate business acquisitions, which were each accounted for as a business combination.

These businesses were acquired for aggregate cash consideration of $ 6.0 million, net of cash acquired of $ 0.2 million, and consideration payable of $ 0.2 million.

The Company recorded goodwill of $ 5.6 million related to the full service center-based child care segment, of which $ 1.9 million will be deductible for tax purposes.

In addition, the Company recorded intangible assets of $ 1.0 million that will be amortized over four years in relation to these acquisitions.

The operating results for the acquired businesses are included in the consolidated results of operations from the date of acquisition, and were not material to the Company’s financial results.

During the year ended December 31, 2022, the Company paid contingent consideration of $ 19.1 million related to an acquisition completed in 2019 and contingent consideration of $ 0.2 million related to an acquisition completed in 2021.

Of the total amounts paid of $ 19.3 million, $ 13.9 million had been recorded as a liability at the date of acquisition and was presented as cash used in financing activities in the consolidated statement of cash flows with remaining amounts reflected as cash used in operating activities.

GOODWILL AND INTANGIBLE ASSETS

4 unchanged sentences

Balance at January 1, 2024 $ 1,539,264 $ 207,298 $ 39,843 $ 1,786,405

Change in reportable segments — 2,167 ( 2,167 ) —

Additions from acquisitions 16,983 — — 16,983

37,248 — — 37,248

Adjustments to prior year acquisitions 110 — — 110

1,202 — — 1,202

Impairments ( 4,179 ) — — ( 4,179 )

Effect of foreign currency translation ( 36,259 ) ( 377 ) — ( 36,636 )

18,878 1,225 — 20,103

Balance at December 31, 2024 1,515,919 209,088 37,676 1,762,683

Change in reportable segments — 2,167 ( 2,167 ) —

Additions from acquisitions 4,857 — — 4,857

Adjustments to prior year acquisitions 531 — — 531

Impairments ( 4,179 ) — — ( 4,179 )

Effect of foreign currency translation 54,324 1,780 — 56,104

Balance at December 31, 2025 $ 1,575,631 $ 210,868 $ 37,676 $ 1,824,175

Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.

Goodwill impairments in the year ended December 31, 2024 related to an immaterial foreign reporting unit specializing in tutoring services.

1 unchanged sentence

December 31, 2025:

Weighted average amortization period Cost Accumulated

Cost Accumulated

amortization Net carrying

1 unchanged sentence

Definite-lived intangible assets:

Customer relationships 8 years $ 394,098 $ ( 383,127 ) $ 10,971

Trade names 10 years 15,226 ( 9,111 ) 6,115

Customer relationships $ 386,482 $ ( 379,457 ) $ 7,025

Trade names 16,148 ( 10,693 ) 5,455

402,630 ( 390,150 ) 12,480

Indefinite-lived intangible assets:

Trade names N/A 180,489 — 180,489

Trade names 180,972 — 180,972

$ 583,602 $ ( 390,150 ) $ 193,452

December 31, 2024:

Weighted average amortization period Cost Accumulated

Cost Accumulated

amortization Net carrying

1 unchanged sentence

Definite-lived intangible assets:

Customer relationships 11 years $ 397,079 $ ( 368,963 ) $ 28,116

Trade names 10 years 19,664 ( 11,795 ) 7,869

Customer relationships $ 394,098 $ ( 383,127 ) $ 10,971

Trade names 15,226 ( 9,111 ) 6,115

409,324 ( 392,238 ) 17,086

Indefinite-lived intangible assets:

Trade names N/A 180,591 — 180,591

Trade names 180,489 — 180,489

$ 589,813 $ ( 392,238 ) $ 197,575

7 unchanged sentences

(In thousands)

Insurance related items $ 25,414 $ 7,649

Prepaid software and licenses $ 21,903 $ 19,285

Investments in available-for-sale debt securities 15,399 11,699

Restricted cash 11,244 15,756

Insurance related items 10,488 25,414

Prepaid rent and other occupancy costs 5,734 6,084

Prepaid income taxes 3,946 9,004

Interest rate cap derivatives 1,763 8,407

Prepaid rent and other occupancy costs 6,084 6,846

Restricted cash 493 11,244

Other prepaid expenses and current assets 10,173 11,231

$ 69,899 $ 102,368

Insurance related items include prepayments and recoveries from third party excess insurance policies.

Additionally, a portion of the Company’s interest rate cap derivatives matures in 2025 and matured in 2023.

Insurance related items includes prepayments and recoveries from third party excess insurance policies.

Additionally, a portion of the Company’s interest rate cap derivatives matures in 2026 and a portion matured in 2025.

Refer to Note 11, Credit Arrangements and Debt Obligations , for additional information on derivatives.

17 unchanged sentences

(In thousands)

Deferred compensation $ 23,541 $ 18,477

Investments in available-for-sale debt securities 22,022 1,859

Deferred compensation plan assets $ 30,201 $ 23,541

Prepaid workers compensation 25,472 21,396

Interest rate cap derivatives 6,311 28,968

Investments in available-for-sale debt securities 24,145 22,022

Capitalized software costs 8,842 2,662

Investments in equity securities

Equity-method investments 6,046 5,469

Interest rate cap derivatives 423 6,311

Other assets 9,706 7,706

9 unchanged sentences

Accrued provider fees 19,659 17,725

Accrued professional fees 17,157 13,981

Other accrued expenses 46,996 51,846

1 unchanged sentence

Accrued insurance primarily consisted of reserves for claims associated with workers’ compensation and general liability.

OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:

(In thousands)

Customer amounts on deposit $ 23,734 $ 29,025

Facility exit costs 4,650 —

Income taxes payable 3,120 1,039

Liability for unvested restricted stock 2,838 6,488

Deferred consideration payable for acquisitions — 106,500

Other current liabilities 4,828 5,526

$ 39,170 $ 148,578

At December 31, 2023, the Company had deferred consideration payable related to the 2022 acquisition of Only About Children.

These amounts were paid in 2024 in accordance with the terms of the purchase agreement.

Refer to Note 5, Acquisitions , for additional information.

CREDIT ARRANGEMENTS AND DEBT OBLIGATIONS

Senior Secured Credit Facilities

The Company’s senior secured credit facilities consist of a $ 600 million term loan B facility (“term loan B”) and a $ 400 million term loan A facility (“term loan A” and, together with term loan B, the “term loan facilities” or “term loans”), as well as a $ 400 million multi-currency revolving credit facility (“revolving credit facility”).

The Company’s senior secured credit facilities consist of a term loan B facility (“term loan B”) and a $ 900 million multi-currency revolving credit facility (“revolving credit facility”).

Prior to April 17, 2025, the Company’s senior secured credit facilities included a term loan A facility (“term loan A”).

Long-term debt obligations were as follows:

2 unchanged sentences

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 maturities ( 28,500 ) ( 18,500 )

Less current portion of term loans — ( 28,500 )

Less current portion of revolving credit facility ( 199,552 ) —

Long-term debt $ 747,614 $ 918,449

On December 21, 2022, the Company amended its existing senior secured credit facilities to replace the LIBOR-based benchmark rate with a term SOFR benchmark rate, which did not alter the applicable interest rates held in effect prior to the change.

The amendment was treated as a modification and the related transaction costs were expensed as incurred.

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.

On the closing date, the Company used its revolving credit facility to prepay $ 50 million of the outstanding principal amount of the existing term loan B.

In conjunction with the amendment, the Company recorded expense of $ 1.9 million and capitalized $ 0.2 million in fees to new lenders that have been recorded as deferred financing costs in long-term debt and will be amortized over the term of the credit facility.

On April 17, 2025, the Company amended its existing senior secured credit facilities to, among other changes, increase the borrowing capacity of its revolving credit facility from $ 400 million to $ 900 million and extend the maturity date.

On the closing date, the Company used $ 362.5 million from its revolving credit facility to repay the outstanding balances under the term loan A.

In conjunction with the amendment, the Company recorded expense of $ 0.6 million and capitalized $ 2.9 million in fees that have been recorded in other assets and will be amortized over the term of the revolving credit facility.

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 by 25 basis points.

In connection with the terms of this amendment, the applicable interest rate spread for the term loan B was further reduced by 25 basis points in January 2025, when the Company received a credit rating upgrade.

All borrowings under the credit facilities are subject to variable interest.

The effective interest rate for the term loans was 5.47 % and 6.21 % at December 31, 2025 and 2024, respectively, and the weighted average interest rate was 5.99 %, 7.25 %, and 7.19 % for the years ended December 31, 2025, 2024, and 2023, respectively, prior to the effects of any interest rate hedge arrangements.

There were no borrowings outstanding under the revolving credit facility at December 31, 2024 and December 31, 2023.

The weighted average interest rate for the revolving credit facility was 7.81 %, 7.73 %, and 4.86 % for the years ended December 31, 2024, 2023, and 2022, respectively.

The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected borrowing cycle as rates can vary between under-30 day and over-30 day borrowings.

Term Loan B Facility

The seven-year term loan B matures on November 23, 2028 and requires quarterly principal payments equal to 1 % per annum of the aggregate principal amount of the term loan B outstanding as of December 11, 2024, the date the Company amended its senior secured credit facility, with the remaining principal balance due at maturity.

On February 24, 2025, the Company notified its lenders of its intent to voluntarily prepay approximately $ 45 million of the outstanding principal balance on its Term Loan B at the end of the month.

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 by 25 basis points.

In connection with the terms of this amendment, the applicable interest rate spread for the term loan B facility was further reduced by 25 basis points in January 2025, when the Company received a credit rating upgrade.

The Company incurred $ 0.8 million in fees associated with this amendment in the year ended December 31, 2024 which were included in selling, general and administrative expenses.

Effective as of December 11, 2024, borrowings under the amended term loan B facility bear interest at a rate per annum of 1.00 % over the base rate, or 2.00 % over the selected term SOFR rate.

The base rate is subject to an interest rate floor of 1.50 % and the selected term SOFR rate is subject to an interest rate floor of 0.50 %.

Prior to the 2024 amendment, borrowings under the term loan B facility bore interest at a rate per annum of 1.25 % over the base rate, or 2.25 % over the adjusted term SOFR rate.

Term Loan A Facility

The five-year term loan A matures on November 23, 2026 and requires quarterly principal payments equal to 2.5 % per annum of the original aggregate principal amount of the term loan A in each of the first three years, 5 % in the fourth year, and 7.5 % in the fifth year.

The remaining principal balance is due at maturity.

Borrowings under the term loan A facility bear interest at a rate per annum ranging from 0.50 % to 0.75 % over the base rate, or 1.50 % to 1.75 % over the adjusted term SOFR rate.

The base rate is subject to an interest rate floor of 1.00 % and the adjusted term SOFR rate is subject to an interest rate floor of 0.00 %.

The effective interest rate for the revolving credit facility was 4.96 % as of December 31, 2025 and the weighted average interest rate for the revolving credit facility was 5.70 %, 7.81 %, and 7.73 % for the years ended December 31, 2025, 2024, and 2023, respectively, prior to the effects of any interest rate hedge arrangements.

The effective interest rate on the revolving credit facility may fluctuate from borrowing to borrowing for various reasons, including changes in the term benchmark or base interest rate, and the selected interest period as terms may vary between under-30 day and over-30 day borrowings.

As noted above, the terms of the term loan B were amended on August 21, 2025.

The term loan B matures on August 21, 2032.

Borrowings under the amended term loan B bear interest at a rate per annum equal to the base rate plus a margin of 0.75 % or the Secured Overnight Financing Rate ("SOFR") plus a margin of 1.75 %.

The term SOFR option is one, three or six month SOFR, as selected by the Company, or, with the approval of the applicable lenders, twelve months or less than one month term SOFR, subject to an interest rate floor of 0.50 %.

The base rate is the highest of (x) the prime rate quoted by The Wall Street Journal, (y) the greater of the federal funds rate and the overnight bank funding rate, in either case, plus 0.50 %, and (z) one-month term SOFR plus 1.00 %, subject to an interest rate floor of 1.50 %.

Prior to the August 2025 amendment, the term loan B required quarterly principal payments equal to 1 % per annum of the aggregate principal amount of the term loan B outstanding as of December 11, 2024, the date the Company amended its senior secured credit facility, with the remaining principal balance due at maturity.

Effective as of December 11, 2024, borrowings under the term loan B bore interest at a rate per annum of 1.00 % over the base rate, or 2.00 % over the selected term SOFR rate.

Effective as of January 2025, borrowings under the term loan B bore interest at a rate per annum of 0.75 % over the base rate, or 1.75 % over the selected term SOFR rate.

The base rate was subject to an interest rate floor of 1.50 % and the selected term SOFR rate was subject to an interest rate floor of 0.50 %.

Prior to the December 2024 amendment, borrowings under the term loan B bore interest at a rate per annum of 1.25 % over the base rate, or 2.25 % over the adjusted term SOFR rate.

In February 2025, the Company voluntarily prepaid $ 44.5 million of the outstanding principal balance on its term loan B, which satisfied the remaining annual principal payments due until maturity.

In May 2025 and August 2025, the Company utilized its revolving credit facility to prepay $ 39.0 million and $ 50.0 million, respectively, of the outstanding principal balance on its term loan B to lower borrowing costs.

As noted above, balances outstanding under the term loan A were repaid on April 17, 2025 using availability under the revolving credit facility.

Prior to the April 2025 debt amendment, the term loan A was scheduled to mature on November 23, 2026 and required quarterly principal payments equal to 2.5 % per annum of the original aggregate principal amount of the term loan A in each of the first three years, 5.0 % in the fourth year, and 7.5 % in the fifth year.

The remaining principal balance was due at maturity.

Borrowings under the term loan A bore interest at a rate per annum ranging from 0.50 % to 0.75 % over the base rate, or 1.50 % to 1.75 % over the adjusted term SOFR rate.

The base rate was subject to an interest rate floor of 1.00 % and the adjusted term SOFR rate was subject to an interest rate floor of 0.00 %.

Revolving Credit Facility

The $ 400 million multi-currency 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.

At December 31, 2024 and December 31, 2023, letters of credit outstanding were $ 15.2 million and $ 19.3 million, respectively, with $ 384.8 million and $ 380.7 million available for borrowing, respectively.

In January 2024, the Company utilized the revolving credit facility, combined with available cash on hand, to pay deferred consideration of $ 106.5 million related to the 2022 acquisition of Only About Children.

Refer to Note 5, Acquisitions, for additional information.

Borrowings under the revolving credit facility bear interest at a rate per annum ranging from 0.50 % to 0.75 % over the base rate, or 1.50 % to 1.75 % over the adjusted term SOFR rate.

The base rate is subject to an interest rate floor of 1.00 % and the adjusted term SOFR rate is subject to an interest rate floor of 0.00 %.

During the year ended December 31, 2024, the Company entered into a AU$ 5 million uncommitted working capital credit facility in Australia for short term borrowing purposes.

As noted above, the terms of the revolving credit facility were amended on April 17, 2025.

The $ 900 million revolving credit facility matures on April 17, 2030.

However, if there is any additional material indebtedness maturing on or before April 17, 2030, the maturity date will be 91 days prior to the maturity of that material indebtedness, unless the Company satisfies a minimum liquidity threshold test as of that date.

As of December 31, 2025, the Company does not hold any material indebtedness maturing on or before April 17, 2030.

As of December 31, 2025, borrowings outstanding on the revolving credit facility were $ 496.5 million (composed of $ 370.0 million, € 71.8 million and £ 31.4 million) and letters of credit outstanding were $ 20.2 million, with $ 383.7 million available for borrowing.

Since the revolving credit facility has a contractual maturity in excess of 12 months from the balance sheet date and the Company has the ability and intends to renew borrowings of at least $ 300 million through December 31, 2026, such balance has been presented as long-term on the condensed consolidated balance sheet at December 31, 2025.

As of 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.

Borrowings held in USD under the revolving credit facility bear interest at a rate per annum ranging from 0.25 % to 0.75 % over the base rate (as defined in the credit agreement), or 1.25 % to 1.75 % over the term SOFR rate.

The base rate is subject to an interest rate floor of 1.00 % and the term SOFR rate is subject to an interest rate floor of 0.00 %.

Prior to the April 17, 2025 amendment, borrowings under the revolving credit facility bore interest at a rate per annum ranging from 0.50 % to 0.75 % over the base rate, or 1.50 % to 1.75 % over the adjusted term SOFR rate.

Borrowings held in Euros under the revolving credit facility bear interest at a rate per annum equal to the Euro Interbank Offered Rate “Euribor” subject to an interest rate floor of 0.00 % plus applicable margin between 1.25 % and 1.75 %.

Borrowings held in British pounds under the revolving credit facility bear daily interest at a rate per annum equal to the Sterling Overnight Index Average rate “SONIA” subject to an interest rate floor of 0.00 % plus a 0.0326 % spread adjustment in addition to an applicable margin between 1.25 % and 1.75 %.

In 2024, the Company entered into a AU$ 5 million (US$ 3.3 million) uncommitted working capital credit facility in Australia for short-term borrowing purposes.

As of December 31, 2025 and December 31, 2024, there were AU$ 4.5 million (US$ 3.0 million) and no borrowings outstanding under this facility, respectively.

The effective interest rate as of December 31, 2025 was 5.59 % and the weighted average interest rate for the year ended December 31, 2025 was 5.55 % for this working capital credit facility.

Debt Covenants

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The Company is the ultimate parent of the Guarantor and the Borrower and the Company’s material assets are held, and operations are conducted, by the Borrower and its subsidiaries.

The term loan A facility and the revolving credit facility require Bright Horizons Family Solutions LLC as the Borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00.

The revolving credit facility requires Bright Horizons Family Solutions LLC as the Borrower, and its restricted subsidiaries, to comply with a maximum first lien net leverage ratio not to exceed 4.25 to 1.00.

A breach of the applicable covenant is subject to certain equity cure rights.

Future principal payments of long-term debt are as follows for the years ending December 31:

Long-term debt

(In thousands)

2025 $ 28,500

Total future principal payments $ 951,000

Derivative Financial Instruments

The Company is subject to interest rate risk as all borrowings under the senior secured credit facilities are subject to variable interest rates.

The Company's risk management policy permits using derivative instruments to manage interest rate and other risks.

The Company's risk management policy permits using derivative instruments to manage interest rates and other risks.

The Company uses interest rate cap agreements to manage a portion of the risk related to changes in cash flows from interest rate movements.

On December 21, 2022, the Company amended its existing interest rate cap agreements in conjunction with the amendment to its senior secured credit facilities, and replaced the one-month LIBOR rate with the one-month term SOFR rate.

In conjunction with this amendment, and in accordance with the expedients in ASU 2020-04 and 2021-01, Reference Rate Reform (Topic 848) , the Company elected to apply the relief offered related to the change in reference rates, thereby not requiring dedesignation of the related cash flow hedging relationships.

In June 2020, the Company 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 the Company 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 %).

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 an effective date of October 29, 2021 and expired on October 31, 2023.

In December 2021, the Company 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.

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 LIBOR rate increases above 2.5 % (effective December 30, 2022, one-month term SOFR rate increases above 2.4 %).

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 the Company 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 $ 600 million, which had a forward starting effective date of October 31, 2023 and expired on October 31, 2025, provide the Company with interest rate protection in the event the one-month LIBOR rate increases above 2.4 %.

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.

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.

The interest rate caps are recorded on the Company’s consolidated balance sheet at fair value and are classified based on the instruments’ maturity dates.

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The change in each respective allocated fair value amount will be reclassified out of accumulated other comprehensive income when each of the hedged forecasted transactions impacts earnings and recognized to interest expense in the Company’s consolidated statement of income.

During the year ended December 31, 2022, the Company entered into foreign currency forward contracts in connection with an acquisition in Australia completed on July 1, 2022.

The Company entered into the foreign currency forwards to lock the purchase price in US dollars at closing and mitigate the impact of foreign currency fluctuations between signing of the definitive purchase agreement on May 3, 2022 and closing.

The forward contracts had a total notional value of approximately AUD$ 320 million, which included the expected payments for the purchase price and for letters of credit used to guarantee certain lease arrangements.

The cash flows associated with the business combination do not meet the criteria to be designated and accounted for as a cash flow hedge and, as such, foreign currency gains and losses on these forwards are recorded on the consolidated statement of income.

During the year ended December 31, 2022, the Company recognized realized losses of $ 5.9 million in relation to these forwards due to fluctuations in the Australian dollar.

The fair value of the derivative financial instruments was as follows:

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Net of income taxes $ 4,633 $ 22,271 $ ( 17,638 )

During the next 12 months, the Company estimates that a net gain of $ 9.3 million, pre-tax, will be reclassified from accumulated other comprehensive income and recorded to interest expense related to these derivative financial instruments.

During the next 12 months, the Company estimates that a net loss of $ 0.5 million, pre-tax, will be reclassified from accumulated other comprehensive income and recorded to interest expense related to these derivative financial instruments.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-09 (“ASU 2023-09”), Improvements to Income Tax Disclosures (Topic 740).

ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

We adopted ASU 2023-09 on a prospective basis effective January 1, 2025.

Income (loss) before income taxes consisted of the following:

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Income tax expense $ 76,791 $ 57,667 $ 45,409

Income taxes paid, net of refunds, pursuant to the disclosure requirements of ASU 2023-09, consisted of the following:

Year ended December 31, 2025

(In thousands)

Federal $ 42,900

Foreign 12,239

Income taxes paid, net of refunds $ 72,590

Income taxes paid, net of refunds, pursuant to the disclosure requirements of ASU 2023-09, exceeded 5% of total income taxes paid in the following jurisdictions:

Year ended December 31, 2025

(In thousands)

United Kingdom $ 6,488

Netherlands $ 5,466

The following is a reconciliation of the U.S.

federal statutory rate to the effective rate on pretax income:

Years ended December 31,

federal statutory rate to the effective rate on pretax income, pursuant to the disclosure requirements of ASU 2023-09:

Year ended December 31, 2025

(In thousands) %

Federal income tax expense computed at statutory rate $ 56,681 21.00 %

State income tax expense, net of federal income tax effect (1)

13,248 4.91 %

Tax credits ( 625 ) ( 0.23 ) %

Non taxable or nondeductible items 2,248 0.83 %

Change in unrecognized tax benefits 903 0.33 %

Effect of changes in income tax laws or rates enacted in the current period 173 0.06 %

Other ( 912 ) ( 0.34 ) %

Foreign tax effects

Other foreign jurisdictions $ 5,075 1.89 %

Income tax expense $ 76,791 28.45 %

(1) State taxes in California, Massachusetts, New York and New Jersey made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the U.S.

federal statutory income tax rates to our effective tax rate for the years ended December 31, 2024 and 2023 pursuant to the disclosure requirements prior to the adoption of ASU 2023-09 is as follows:

Years ended December 31,

(In thousands)

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The effective income tax rate for 2025 was 28.5 %.

In 2024, income tax expense was increased by a total of $ 1.0 million, with $ 0.2 million in state income tax, for the net shortfall tax expense associated with the exercise or expiration of stock options and vesting of each type of restricted stock.

In 2025, income tax expense was decreased by a total of $ 1.2 million, with $ 0.3 million in state income tax, for the net excess tax benefit associated with the exercise or expiration of stock options and vesting of each type of restricted stock.

The effective income tax rate for 2024 was 29.1 %.

In 2023, income tax expense was increased by $ 2.9 million, with $ 0.6 million in state income tax, for the net shortfall tax expense associated with the exercise or expiration of stock options and vesting of each type of restricted stock.

The effective income tax rate for 2023 was 38.0 %.

In 2022, income tax expense was reduced by $ 2.0 million, net with a $ 0.5 million tax benefit in state income tax, for the net excess tax benefit associated with the exercise of stock options and vesting of each type of restricted stock.

In 2023, income tax expense was increased by $ 2.9 million, net with $ 0.6 million in state income tax, for the net shortfall tax expense associated with the exercise of stock options and vesting of each type of restricted stock.

The Organization for Economic Cooperation and Development introduced a framework to implement a global 15% minimum corporate tax (“Pillar Two”).

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A number of other countries have implemented similar legislation with effective dates in the year ended 2024.

The Company has evaluated the impact of Pillar Two in the jurisdictions in which the Company operates and has determined no additional top-up tax is required.

The Company has evaluated the impact of Pillar Two in the jurisdictions in which the Company operates and has determined no additional top-up tax is required in the years 2024 and 2025.

Significant components of the Company’s net deferred tax liability were as follows:

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Reserve on assets $ 687 $ 746

Net operating/capital loss carryforwards 16,178 10,239

Net operating loss and other carryforwards 11,601 16,178

Liabilities not yet deductible 16,517 12,630

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Net deferred tax liability $ ( 14,873 ) $ ( 20,299 )

At December 31, 2024 and 2023, the Company had foreign net operating loss carryforwards of $ 57.0 million and $ 35.6 million, respectively, all of which had a valuation allowance offsetting the related deferred tax asset.

At December 31, 2025 and 2024, the Company had foreign net operating loss carryforwards of $ 35.3 million and $ 57.0 million, respectively, most of which had a valuation allowance offsetting the related deferred tax asset.

These net operating losses can be carried forward indefinitely.

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Based on the weight of evidence, the Company determined that it was more likely than not that a portion of the deferred tax assets would not be realized.

During the years ended December 31, 2024 and 2023, the Company recorded a net additional valuation allowance of $ 5.5 million and $ 8.2 million, respectively, on foreign deferred tax assets, resulting in total valuation allowances of $ 23.7 million and $ 18.2 million, respectively.

During the year ended December 31, 2023 the Company released a valuation allowance of $ 0.2 million on a U.S.

deferred tax asset.

During the year ended December 31, 2025, the Company had a net reduction of valuation allowance of $ 0.5 million resulting in total valuation allowances of $ 23.2 million.

During the year ended December 31, 2024 the Company recorded a net additional valuation allowance of $ 5.5 million on foreign deferred tax assets, resulting in total valuation allowances of $ 23.7 million.

The Company considers the earnings of certain non-U.S.

subsidiaries to be indefinitely invested outside the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company’s specific plans for reinvestment of those subsidiary earnings.

The Company does not assert permanent reinvestment of earnings through the current year with respect to its Indian subsidiary.

Where necessary, taxes resulting from foreign distributions of current and accumulated earnings, related to the state taxes and foreign withholding taxes, have been considered in the Company’s provision for income taxes.

Where necessary, taxes resulting from foreign distributions of current and accumulated earnings, in the form of dividends, related to the state taxes and foreign withholding taxes, have been considered in the Company’s provision for income taxes and are not material.

Uncertain Tax Positions

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Additions for tax positions of prior years — — 196

Settlements — — ( 344 )

Additions for tax positions of current year 983 — —

Lapses of statutes of limitations ( 69 ) ( 2,150 ) —

2 unchanged sentences

Total interest and penalties accrued as of December 31, 2025 was less than $ 0.1 million.

In 2025, the Company increased unrecognized tax benefits by $ 1.0 million for domestic tax positions.

In 2024, the Company reduced unrecognized tax benefits by $ 2.2 million for lapse of statute of limitations.

In 2023, the Company increased unrecognized tax benefits by $ 0.2 million for a prior year domestic tax position.

In 2022, the Company reduced unrecognized tax benefits by $ 0.2 million for lapse of statute of limitations, and $ 0.3 million for settlements with certain states.

In 2023, the Company increased unrecognized tax benefits by $ 0.2 million for a domestic tax position.

The total amount of unrecognized tax benefits that if recognized would affect the Company’s effective tax rate is $ 1.0 million, inclusive of interest.

The unrecognized tax benefits may change over the next 12 months by $ 0.1 million.

The Company and its domestic subsidiaries are subject to U.S.

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The tax returns for the Company’s subsidiaries located in foreign jurisdictions are subject to examination for periods ranging from one to six years.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the U.S.

In accordance with ASC 740, the Company has recognized the effects of the new tax law in the period of enactment ended September 30, 2025.

The OBBBA includes tax reform provisions, such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business expenses.

The legislation has various effective dates, ranging from early 2025 through 2026.

These changes do not have a material impact on the Company’s consolidated financial statements.

FAIR VALUE MEASUREMENTS

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The carrying value of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximates their fair value because of their short-term nature.

Long-term Debt — The Company’s long-term debt is recorded at adjusted cost, net of original issue discounts and deferred financing costs.

The fair value of the Company’s long-term debt is based on current bid prices or prices for similar instruments from active markets.

As such, the Company’s long-term debt was classified as Level 2.

Long-term Debt — The Company’s term loan B is recorded at adjusted cost, net of original issue discounts and deferred financing costs.

The fair value of the Company’s term loan B is based on current bid prices or prices for similar instruments from active markets and is classified as Level 2.

The Company's revolving credit facility is recorded at cost and its fair value is classified as Level 2.

As of December 31, 2025 and 2024, the estimated fair value approximated the carrying value of long-term debt.

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As of December 31, 2025, the fair value of the interest rate cap agreements was $ 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.

As of December 31, 2023, the fair value of the interest rate cap agreements was $ 29.0 million which was recorded in other assets on the consolidated balance sheet.

In 2022, the Company entered into foreign currency forward contracts in connection with an acquisition in Australia completed on July 1, 2022.

During the year ended December 31, 2023, the Company recognized realized losses of $ 5.9 million in relation to these forwards due to fluctuations in the Australian dollar.

Refer to Note 12, Credit Arrangements and Debt Obligations , for additional information on the foreign currency forward contracts.

As of December 31, 2024, the fair value of the interest rate cap agreements was $ 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.

Debt Securities — The Company’s investments in debt securities, which are classified as available-for-sale, primarily consist of U.S.

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As such, these securities are not available to fund the Company’s operations.

These securities are recorded at fair value using quoted prices available in active markets and are classified as Level 1.

Debt securities are recorded at fair value.

As of December 31, 2025, the fair value of the available-for-sale debt securities was $ 39.5 million and was classified based on the instruments’ maturity dates, with $ 15.4 million included in prepaid expenses and other current assets and $ 24.1 million in other assets on the consolidated balance sheet.

As of December 31, 2023, the fair value of the available-for-sale debt securities was $ 23.9 million, with $ 22.0 million included in prepaid expenses and other current assets and $ 1.9 million in other assets on the consolidated balance sheet.

As of December 31, 2024, the fair value of the available-for-sale debt securities was $ 33.7 million and was classified based on the instruments’ maturity dates, with $ 11.7 million included in prepaid expenses and other current assets and $ 22.0 million in other assets on the consolidated balance sheet.

As of December 31, 2025, debt securities classified as Level 1 and Level 2 had a fair value of $ 30.9 million and $ 8.6 million, respectively.

At December 31, 2025 and 2024, the amortized cost was $ 39.3 million and $ 33.7 million, respectively.

The debt securities held at December 31, 2024 had remaining maturities ranging approximately from less than one year to six years .

The debt securities held at December 31, 2025 had remaining contractual maturities ranging from less than one year to approximately six years .

Unrealized gains and losses, net of tax, and realized gains and losses, on available-for-sale debt securities were immaterial for the years ended December 31, 2025, 2024 and 2023.

Liabilities for Contingent Consideration — The Company is subject to contingent consideration arrangements in connection with certain business combinations.

Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration payable for the related business combination and subsequent changes in fair value recorded to selling, general and administrative expenses on the Company’s consolidated statement of income.

The fair value of contingent consideration was generally calculated using customary valuation models based on probability-weighted outcomes of meeting certain future performance targets and forecasted results.

The key inputs to the valuations are the projections of future financial results in relation to the business and the company-specific discount rates.

The Company classified the contingent consideration liabilities as a Level 3 fair value measurement due to the lack of observable inputs used in the model.

The following table provides a roll forward of the recurring Level 3 fair value measurements:

Years ended December 31,

(In thousands)

Beginning balance $ 11,516 $ 8,997

Contingent consideration issued for acquisitions 696 —

Settlements of contingent consideration liabilities ( 14,300 ) ( 225 )

Changes in fair value 2,182 2,744

Foreign currency translation ( 26 ) —

Ending balance $ 68 $ 11,516

During the year ended December 31, 2024, contingent consideration liabilities of $ 14.3 million were paid related to an acquisition completed in 2021, which were originally due in 2026, but settled early and were paid in April 2024.

During the year ended December 31, 2023, contingent consideration liabilities of $ 0.2 million were paid related to an acquisition completed in 2021.

The contingent consideration liabilities outstanding as of December 31, 2024 relate to an acquisition completed in 2024.

Refer to Note 5, Acquisitions , for additional information.

Nonrecurring Fair Value Estimates — During the years ended December 31, 2025, 2024, and 2023, the Company recognized impairment losses of $ 47.5 million, $ 33.9 million, and $ 35.9 million, respectively, primarily related to fixed assets and operating lease right-of-use assets.

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Treasury Stock

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 board of directors of the Company authorized a share repurchase program of up to $ 500 million (exclusive of fees, commissions or other expenses) of the Company’s outstanding common stock effective June 3, 2025.

The share repurchase program has no expiration date.

The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, under Rule 10b5-1 plans, or by other means in accordance with federal securities laws.

During the years ended December 31, 2024 and 2022, the Company repurchased 0.8 million shares for $ 84.6 million (resulting in a $ 0.4 million excise tax liability), and 2.0 million shares for $ 182.3 million, respectively.

The June 2025 share repurchase program replaced and canceled the prior share repurchase program of up to $ 400 million announced December 2021, of which approximately $ 58.9 million remained available thereunder.

The shares may be repurchased 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.

During the year ended December 31, 2025 and 2024, the Company repurchased 2.1 million shares for $ 225.4 million (resulting in a $ 1.9 million excise tax liability), and 0.8 million shares for $ 84.6 million (resulting in a $ 0.4 million excise tax liability), respectively.

The Company did not repurchase shares during the year ended December 31, 2023.

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Restricted stock is considered legally issued at the date of grant, but is not considered common stock issued and outstanding in accordance with accounting guidance until the requisite service period is fulfilled.

All outstanding shares of restricted stock are expected to vest.

There are no outstanding shares of restricted stock at December 31, 2025.

During the years ended December 31, 2025, 2024 and 2023, there were no cash proceeds from the issuance of restricted stock.

Cash proceeds from the issuance of restricted stock for the year ended December 31, 2022 was $ 3.1 million.

Stock-based compensation expense for restricted stock awards is based on the intrinsic value of the award on the date of grant.

7 unchanged sentences

There were no restricted stock awards granted during the years ended December 31, 2025, 2024 or 2023.

The weighted average grant date fair value of restricted shares granted during the year ended December 31, 2022 was $ 64.41 .

Restricted stock units are awarded to certain employees as allowed under the Plan and vest within three years after the date of the award.

Restricted stock units are awarded to certain employees as allowed under the Plan and generally vest within three years after the date of the award.

The awards allow for the issuance of a share of the Company’s common stock for each unit upon vesting.

20 unchanged sentences

Granted 24,739 128.34

Forfeited ( 2,449 ) 122.50

Performance restricted stock units at December 31, 2025 79,765 $ 104.37 $ 8.1

The weighted average grant date fair value of performance restricted stock units granted during the years ended December 31, 2025, 2024, and 2023 was $ 128.34 , $ 115.65 , and $ 79.07 , respectively.

There were no performance restricted stock units granted during the year ended December 31, 2022.

EARNINGS PER SHARE

28 unchanged sentences

Common stock $ 3.36 $ 2.40 $ 1.28

For the year ended December 31, 2024, basic and diluted earnings per share were calculated using the treasury method and for the years ended December 31, 2023 and 2022, basic and diluted earnings per share were calculated using the two-class method.

For the years ended December 31, 2025 and 2024, basic and diluted earnings per share were calculated using the treasury method and for the year ended December 31, 2023, basic and diluted earnings per share were calculated using the two-class method.

Equity awards outstanding to purchase or receive 1.1 million, 1.3 million, and 1.8 million shares of common stock were excluded from diluted earnings per share for the years ended December 31, 2025, 2024, and 2023, respectively, since their effect was anti-dilutive.

6 unchanged sentences

Balance at January 1, 2024 $ ( 76,130 ) $ 17,100 $ ( 71 ) $ ( 59,101 )

Other comprehensive income before reclassifications — net of tax 29,008 4,633 9 33,650

Other comprehensive income (loss) before reclassifications — net of tax ( 42,543 ) 6,726 66 ( 35,751 )

amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 15,481 ( 38 ) 15,443

2 unchanged sentences

Other comprehensive income (loss) before reclassifications — net of tax 74,157 ( 889 ) 187 73,455

amounts reclassified from accumulated other comprehensive income (loss) — net of tax — 15,481 ( 38 ) 15,443

amounts reclassified from accumulated other comprehensive income — net of tax — 8,008 2 8,010

Net other comprehensive income (loss) 74,157 ( 8,897 ) 185 65,445

7 unchanged sentences

The Company’s educational advisory services segment consists of tuition assistance and student loan repayment program management, workforce education, related educational advising, and college admissions counseling services.

Effective January 1, 2024, the Company realigned its organizational structure to better reflect synergies across certain business lines resulting in a change in reportable segments.

The Company’s Back-up Care segment now includes the Sittercity operations, which were previously reported in the Educational Advisory and Other Services segment.

Segment information for 2023 and 2022 has been recast to conform to the current year presentation.

Our CEO, who serves as the Chief Operating Decision Maker (“CODM”), is responsible for allocating resources and evaluating performance.

Our Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), is responsible for allocating resources and evaluating performance.

The CODM assesses segment performance and allocates resources based on factors such as revenue, cost of services, gross profit, and income from operations.

4 unchanged sentences

therefore, no segment asset information is produced or included herein.

Revenue, cost of services, other expenses and income from operations by reportable segment were as follows:

Revenue, cost of services, other segment items and income from operations by reportable segment were as follows:

child care Back-up care Educational

4 unchanged sentences

Cost of services 1,802,508 373,744 60,168 2,236,420

Other expenses (1)

Other segment items (1)

212,518 132,634 37,370 382,522

6 unchanged sentences

Cost of services 1,685,730 322,151 58,526 2,066,407

Other expenses (1)

Other segment items (1)

222,356 118,350 32,281 372,987

6 unchanged sentences

Cost of services 1,542,484 287,294 56,755 1,886,533

Other expenses (1)

Other segment items (1)

228,735 102,912 28,836 360,483

1 unchanged sentence

$ 9,396 $ 135,704 $ 26,141 $ 171,241

Loss on foreign currency forward contracts ( 5,917 )

Interest expense — net ( 51,609 )

Income before income tax $ 119,632

(1) Other expenses for each reportable segment includes selling, general and administrative expenses and amortization expense.

(1) Other segment items for each reportable segment includes selling, general and administrative expenses and amortization expense.

(2) For the year ended December 31, 2025, income from operations for the full service center-based child care segment includes $ 47.0 million of impairment and net lease termination costs and $ 1.3 million of costs incurred in connection with the August 2025 debt refinancing.

Income from operations for the back-up care segment included $ 0.5 million of impairment and net lease termination costs.

Refer to Note 13, Fair Value Measurements , for additional information on impairment losses and Note 11, Credit Arrangements and Debt Obligations , for additional information on the debt refinancing.

(3) For the year ended December 31, 2024, income from operations for the full service center-based child care segment included $ 32.8 million of impairment losses and $ 0.8 million of other costs incurred in connection with the December 2024 debt refinancing.

2 unchanged sentences

(4) For the year ended December 31, 2023, income from operations for the full service center-based child care segment included $ 32.0 million of impairment losses and $ 1.5 million of value-added tax expense related to prior periods, and income from operations for the back-up care segment included $ 3.9 million of impairment losses and $ 4.0 million of value-added tax expense related to prior periods.

Refer to Note 14, Fair Value Measurements , for additional information on impairment losses and Note 2, Summary of Significant Accounting Policies , for additional information on the value-added tax expense related to prior periods.

(4) For the year ended December 31, 2022, income from operations for the full service center-based child care segment included $ 14.1 million of impairment losses, $ 9.2 million of transaction costs related to acquisitions, and $ 1.9 million of costs incurred in relation to a cybersecurity incident.

Refer to Note 13, Fair Value Measurements , for additional information on impairment losses.

2 unchanged sentences

Fixed assets by geographic region were as follows:

2024 2023 2022

(In thousands)

North America $ 291,754 $ 313,839

International 259,100 259,564 244,760

Outside North America 282,446 259,100

Total fixed assets $ 574,200 $ 572,939

All of the fixed assets in North America were located in the United States, and fixed assets located in the United Kingdom were $ 205.9 million, $ 201.9 million, and $ 186.5 million at December 31, 2024, 2023, and 2022, respectively.

All of the fixed assets in North America were located in the United States, and fixed assets located in the United Kingdom were $ 222.2 million and $ 205.9 million at December 31, 2025 and 2024, respectively.

Fixed assets associated with each of the other countries in which the Company operates were less than 10% of total fixed assets.

3 unchanged sentences

The 401(k) Plan is funded by elective employee contributions of up to 75 % of their compensation, subject to certain limitations.

Under the 401(k) Plan, the Company matches 25 % of employee contributions for each participant on employee contributions of up to 8 % of the employee’s compensation after one year of service.

Under the 401(k) Plan, the Company matches 25 % of employee contributions for each participant on employee contributions of up to 8 % of the employee’s compensation after 60 days of service.

Expense under the 401(k) Plan, consisting of Company contributions and plan administrative expenses paid by the Company, totaled approximately $ 5.8 million, $ 6.1 million, and $ 5.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.

6 unchanged sentences

Under the NQDC Plan, the Company matches 25 % of employee contributions for each participant up to $ 2,500 .

The Company holds investments in company-owned life insurance policies to offset the Company’s liabilities under the NQDC Plan.

Total investments included in other assets in the consolidated balance sheet were $ 23.5 million at December 31, 2024.

The Company holds investments in company-owned life insurance policies which are recorded at cash surrender value and offset the Company’s liabilities under the NQDC Plan.

Total cash surrender value of insurance policies included in other assets in the consolidated balance sheet were $ 30.2 million and $ 23.5 million at December 31, 2025 and December 31, 2024, respectively.

NQDC Plan liabilities, included in other current and long-term liabilities in the consolidated balance sheet, were $ 1.5 million and $ 28.8 million at December 31, 2025, respectively.

At December 31, 2023, total investments included in prepaid expenses and other current assets and in other assets in the consolidated balance sheet were $ 1.6 million and $ 18.5 million, respectively.

NQDC Plan liabilities, included in other current and long-term liabilities in the consolidated balance sheet, were $ 1.9 million and $ 21.7 million at December 31, 2024, respectively.

19 unchanged sentences

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 8. Financial Statements and Supplementary Data