Key Highlights

  • BFAM stock slid 16.58% to $55.88 today, from a prior close near $67.
  • Back-up care drove a 5% increase in third quarter revenue, which reached $841.5 million.
  • A $290.0 million Goodwill impairment, largely linked to Australian operations, produced a GAAP loss of $4.76 per share.
  • On an adjusted basis, Earnings Per Share reached $1.80, up 15% from $1.57.
  • Full-year guidance now calls for adjusted EPS of $4.98 to $5.03 and roughly $3.07 billion in revenue.

Australian Goodwill Write-Down Pushes Third Quarter Into a Net Loss

Bright Horizons Family Solutions (NYSE:BFAM) stock fell 16.58% to $55.88 today, one day after third quarter figures were published on October 29. Working back from the decline, the prior close was about $67, leaving the shares beneath the $57.63 low listed for the 52-week range as of late July.

The quarter ended with a net loss of $230.7 million, compared with Net Income of $78.6 million in the prior-year period. Most of that swing came from a $290.0 million goodwill Impairment tied largely to operations in Australia, together with a steeper tax rate and heavier interest costs. On a GAAP basis, diluted loss per share stood at $4.76, versus earnings of $1.37 in the same quarter of 2025.

Bright Horizons delivers early education and child care, back-up care and educational advisory offerings to working families and employers. Around 1,000 centers operate across the U.S., U.K., Netherlands, Australia and India, and more than 1,450 employers are served.

Underlying Sales and Adjusted Profit Edge Higher Behind the Impairment

Revenue advanced 5%, or roughly $38.7 million, to $841.5 million. Back-up care was the main contributor, while closed full-service centers offset part of the lift. Adjusted EBITDA also grew 5%, landing at $163.3 million.

Adjusted Diluted Earnings per Share went up 15%, to $1.80 from $1.57. In the second quarter, the company had posted adjusted EPS of $1.28, a 20% gain, on Revenue of $779.18 million.

The distance between the GAAP loss and the stronger adjusted results is mainly the impairment, plus the higher tax rate and interest expense the release points to. Back-up care, the principal growth engine, rose 19% to $194 million in the second quarter.

Outlook Slips Below July Targets as Cash Holds at $119.2 Million

Management now projects 2026 revenue near $3.07 billion and adjusted diluted EPS between $4.98 and $5.03. The July guidance from the second quarter report had called for $3.085 billion to $3.115 billion in revenue and adjusted EPS of $5.05 to $5.15, meaning each measure has come down.

This is not the company's first guidance revision this year. The March outlook was revenue of $3.075 billion to $3.125 billion and adjusted EPS of $4.90 to $5.10, and at that time the company also planned to close 45 to 50 full-service centers.

Cash and equivalents totaled $119.2 million at September 30, and $436.0 million remained available under the revolving Credit facility. Through the year so far, roughly 7.7 million shares have been bought back for $557.7 million.

Pre-Decline Multiples and the Fourth Quarter Guidance Test

A market tracker's late-July reading put the Market Value at $4.10 billion and the price-to-earnings ratio at 23.45, when the shares were near $78. The same reading showed a consensus rating of Hold and an average price target of $96. Those numbers predate both today's slide and the impairment. Next, attention shifts to the pace of center closures, the growth in back-up care, and the fourth quarter report, which will test the new guidance range.