Prepared remarks
Greetings. Welcome to the Bright Horizons Family Solutions second quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Michael Flanagan, Group Vice President, Strategic Finance at Bright Horizons Family Solutions. Thank you, Michael. You may begin.
Thanks, Liz. Welcome to Bright Horizons second quarter earnings call. Before we begin, please note that today's call is being webcast, and a recording will be available under the investor relations section of our website at investors.brighthorizons.com. As a reminder to participants, any forward-looking statements made on this call, including those regarding future business, financial performance, and outlook, are subject to the safe harbor statement included in our earnings release. Forward-looking statements inherently involve risks and uncertainties that may cause actual operating and financial results to differ materially and should be considered in conjunction with the cautionary statements that are described in detail in our earnings release, our 2025 Form 10-K and other SEC filings. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statements. Today, we also refer to non-GAAP financial measures, which are detailed and reconciled to their GAAP counterparts in our earnings release, which is available on the IR section of our website at investors.brighthorizons.com. Joining me on today's call is our Chief Executive Officer, Stephen Kramer, and our Chief Financial Officer, Elizabeth Boland. Stephen will start by reviewing our results and provide an update on the business, Elizabeth will follow with a more detailed review of the numbers before we open it up to your questions. With that, let me turn the call over to Stephen.
Thanks, Mike. Thank you to everyone joining us this afternoon. I am pleased with our performance in the second quarter and through the first half of 2026. Revenue expanded by 7% to $779 million, with growth across both Back-up Care and full service, adjusted EPS increased 20% to $1.28, both ahead of our expectations. Back-up Care again led our growth, while improving operating efficiency drove margin expansion in both segments. These results reinforce the strength and durability of our employer-sponsored model and the value of our differentiated portfolio of care and education solutions. On our first quarter call, we introduced a new investor presentation highlighting our client-centric business model, our competitive advantages, and the breadth of our long-term growth opportunities. Within Back-up Care, our largest segment by earnings contribution, we outlined three key growth drivers: deepening penetration within our existing clients, expanding our ecosystem of care and education solutions, and winning new logos. Let me update you on our progress on all three fronts. Starting with deeper penetration, Back-up Care revenue grew 19% to $194 million in the quarter, accelerating from 12% growth in the first quarter. Usage growth was strong across care types and was largely driven by more unique users, as well as an uptick in frequency of use. Key to driving deeper penetration within our clients is the breadth and quality of our care network and our technology platform. We have made significant investments over the past several years to both enhance the booking process and expand access to care solutions. Today, families can confirm care in real time through our instant book capability, and we now see the majority of our network care and Back-up secured this way. Combined with our broader service network, this creates a seamless on-demand experience that allows us to reliably connect families with trusted care across care types and geographies. Our ability to deliver quality care with this level of ease, reliability, and scale drives deeper engagement and is a true competitive advantage. Turning to the expansion of our ecosystem. Employer camps have become a natural extension of how we support clients to address their evolving workforce needs. This summer, we expanded our on-site Steve & Kate's camp for AT&T to its Atlanta campus, building on last year's successful pilot at its Dallas headquarters. We are also operating five camps for a leading multi-site hospital system, one camp serving an energy company in Texas, and a consortium camp serving two large banking employers in North Carolina. These camps demonstrate how we use our unique delivery capabilities and client relationships to develop additional ways to serve the increasing range of needs of employer clients and working parents. Turning to our third Back-up growth lever, new and ramping clients. Utilization continues to build among recently launched clients. Some additions include a Fortune 500 global consumer company and a Fortune 500 global industrial company. These relationships demonstrate the broad relevance of our care solutions and provide an additional source of growth as they launch and mature. Overall, Back-up Care continues to deliver solid double-digit revenue growth, extending an impressive 15-year track record. This is a high-margin, capital-light business serving a large and under-penetrated market. With meaningful runway across each of our three growth avenues, we believe Back-up Care is well-positioned to remain a durable driver of revenue and earnings growth. Turning to full service. Revenue grew 3% to $557 million, in line with our expectations. Growth was driven by tuition increases and a favorable impact from foreign exchange, partially offset by continued enrollment headwinds in Australia and the impact of center closures as we continue to optimize the portfolio. We opened seven centers in the quarter, including five for employer clients here in the U.S. Three centers were for a leading academic medical center that had self-operated their centers for more than 20 years before making the decision to have Bright Horizons assume the management of these programs with their ongoing financial support. This illustrates the transition opportunity that continues to exist within employer-sponsored care, especially within healthcare and higher education institutions. A decision by an employer to self-operate is not necessarily permanent. When employers' needs and circumstances change, our market leadership expertise and operating scale make us the partner of choice for leading employers to transition the management of their centers. The other two employer-funded client centers opened in the quarter are new work site locations developed around these employers' specific needs, exclusive to their employees, and reflective of these clients' HR strategy and desire to meet employee needs. Together, these center openings illustrate the opportunity to grow our employer-sponsored center footprint through transitioning established programs to Bright Horizons management and partnering with employers on new centers for their employees. Occupancy averaged in the high 60% range in the quarter. In fact, 70%, excluding Australia, up sequentially and reflecting continued recovery across the broader portfolio. Enrollment in centers open for more than one year increased approximately 1%, excluding the impact of enrollment contraction in Australia, which was roughly 100 basis point headwind. The pressure in Australia remained broadly consistent with what we discussed in the first quarter, while the balance of the portfolio continued to progress. Looking ahead, our focus is on building on the enrollment progress we have made, converting more inquiries into enrollments, translating higher occupancy into continued operating leverage, and shaping the portfolio around centers and markets with the strongest long-term demand and strategic value to our clients. As we build on this progress, our commitment to delivering the highest quality care in a safe and nurturing environment remains foundational to everything we do. Over 40 years, we have built rigorous policies, training, and oversight across our centers. We continue to invest in the people, systems, and practices that support consistent quality service delivery. We also recognize that this work is never finished. We continually learn, evaluate, and strengthen our approach. That discipline and our commitment to transparency and improvement is fundamental to the trust families and employers place in Bright Horizons. In educational advisory, revenue of $28 million was consistent with the prior year, as continued growth in College Coach was offset by lower participant engagement in EdAssist. Demand for College Coach's advising services is underpinned by the quality and experience of our college admission and financial aid experts, who provide highly personalized guidance to navigate the complex and high-stakes college landscape. In EdAssist, our focus is on increasing engagement by strengthening the technology platform, expanding the relevance of our solutions, and making it easier for working learners to take advantage of the education benefits available to them. Tying all this together is One Bright Horizons, our growth strategy to extend the reach and value of our service portfolio by engaging more employees and employers across the full spectrum of our solutions. At the employer level, that means building on the trust we have established through one service to expand relationships across our broader portfolio. Just as importantly, it means helping more eligible employees discover and engage with the range of care and education benefits available to them. By creating a more connected experience across our services, we can support more of their needs while delivering greater value to our employer clients. We again saw the impact of this strategy during this past quarter. The academic medical center behind the 3 full-service centers we transitioned first started as an EdAssist and College Coach client. Separately, a leading financial services company that has long utilized Back-up Care added College Coach to support employees and their families through the college planning process. Examples like these, together with growing employee engagement across our services, demonstrate the power of our employer-sponsored model and our ability to deepen relationships and penetration at both the employer and employee level. In summary, we continue to demonstrate the strength and durability of our employer-sponsored model through the first half of 2026. As we look ahead to the remainder of the year, we are narrowing our full-year revenue outlook to a range of $3.085 billion to $3.115 billion and raising adjusted EPS outlook to $5.05 to $5.15 per share. With that, I'll turn the call over to Elizabeth to walk through the quarter in more detail and share more on our outlook.
Thank you, Stephen, and hello to everyone who was able to join the call this evening. I'll begin with some overall financial highlights. Revenue for the second quarter grew 7% to $779 million, driven by continued top-line growth in both our full service and Back-up segments. Adjusted operating income increased 15% to $99 million, as adjusted operating margins expanded 95 basis points over the prior year quarter to 12.7%. Adjusted EBITDA increased 13% to $131 million, representing an adjusted EBITDA margin of 17%. On the bottom line, adjusted EPS of $1.28 increased 20%. Taking a closer look at each of our three business lines, Back-up revenue grew 19% in the quarter to $194 million, driven by the strong utilization Stephen talked about across care types. Adjusted operating income of $50 million grew 23% versus the prior year as the associated operating margin expanded 80 basis points to 26%. In full service, revenue of $557 million grew 3% over the prior year quarter, driven primarily by tuition increases, growth in occupancy, and a favorable impact from foreign exchange. These benefits were partially offset by an approximately 250 basis point headwind from center closures, and to a lesser extent, enrollment declines in our Australia operations. We ended the quarter with 988 centers, opening 7, as Stephen mentioned, while also closing 7 lease model centers. Enrollment in centers that have been open for the last year was approximately flat in the second quarter, after taking into account the roughly 100 basis points of headwind from the enrollment contraction in Australia. Occupancy increased sequentially from the first quarter and averaged in the high 60% range and was about 70% excluding Australia. With respect to the center cohorts we have discussed on prior calls, the overall mix continued to improve, driven by a significant reduction in our lowest occupied centers. Our top performing cohort centers above 70% occupancy represent 53% of these centers in the second quarter, roughly in line with what we reported in the second quarter of 2025. More notably, our bottom cohort, that is centers below 40% occupied, declined to 5% of these centers from 10% in the prior year, reflecting both the enrollment progress and the impact of closing underperforming centers. Total full service adjusted operating income increased 10% to $44 million and represented an adjusted operating margin of 7.9%, an expansion of 50 basis points over the prior year. Tuition increases ahead of average wage growth across the portfolio and continued improvement in our U.K. operations drove the net margin expansion. Excluding our challenged Australia operations, full service adjusted operating margin would have expanded by more than 75 basis points over the prior year. Educational advisory revenue of $28 million was consistent with the prior year quarter, and adjusted operating margin was 16%. Turning to a couple of other items on the P&L, our net interest expense of $14 million increased $3 million over the prior year and was up $2 million sequentially, due primarily to higher average borrowings as well as modestly higher average effective borrowing rates. The structural effective tax rate on adjusted net income was 28.75% in the second quarter, higher than in 2025, due primarily to losses in Australia that are not currently deductible. Turning to the balance sheet and cash flow, we generated $95 million in cash from operations in the second quarter and made fixed asset investments of about $19 million. We also made share repurchases totaling approximately $250 million during the quarter. At quarter end, we had $164 million of cash and approximately $1.3 billion of gross debt. Our trailing net leverage ratio was 2.2x net debt to adjusted EBITDA at the end of the quarter, reflecting that share repurchase activity over the last year. Moving on to our updated full year outlook. On the revenue side, as Stephen previewed, we are narrowing our reported revenue to a range of $3.085 billion to $3.115 billion and raising our adjusted EPS outlook to a range of $5.05 to $5.15. Looking now at each segment for the full year. In full service, we expect reported revenue to grow in the range of 2.5% to 3% on enrollment gains and tuition increases, offset by approximately 200 basis points of headwind from net center closings and approximately 100 basis points of headwind from Australia. In Back-up Care, we have increased our expectations to 13% to 15% revenue growth for the full year, driven by the continued expansion of use. In educational advisory, we expect to grow in the low single digits. We are now expecting $58 million to $60 million of interest expense for the year, an adjusted effective tax rate of 28.5%, and a diluted share count of 51.5 million shares for the year. Looking now to Q3, our outlook is for total revenue of $835 million to $845 million, or growth of approximately 4% to 5%. We expect full service to grow reported revenue of 50 to 100 basis points, including an approximate 225 basis point headwind from net center closings over the last year and 100 basis points of headwind from Australia. In Back-up Care, we expect revenue growth in the quarter of 12% to 14%, and again, EdAssist to grow in the low single digits. In terms of earnings, we expect Q3 adjusted EPS to be in the range of $1.73 to $1.78 per share. With that, Felice, we are ready to go to Q&A.
Questions and answers
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Andrew Steinerman from JPMorgan. Please go ahead with your question.
Hi, two quick questions. Some of this is seasonal. With the strong Back-up Care growth in the quarter and into next quarter, could you just give us a sense how much summer camp usage is driving those results? Surely it's broad usage, but I'm interested in summer camp because you've had a lot of success there. Also, I know it's early and we're still in July, but as you think about the guide that you gave for the year, what are you assuming in terms of back to school enrollment on the full service side?
Thank you for the question, Andrew. I'll start with the summer camp question. First of all, we're obviously very pleased with the 19% growth in the quarter. That use was really across all care types. It was reflective of strong growth in both users and a slight uptick in frequency. In terms of isolating summer camp in particular, during the summer months, that is the highest. For the overall year, we generally see summer camp use in the 25% to 30% range of total use. It is still just one of the components of our network care types.
On the enrollment front, Andrew, we saw enrollment in the first half of the year relatively stable as we had previewed at the beginning of the year, with a little bit lighter growth in the second quarter than we would expect to see as we turn into the fall. We have a little bit of positive growth offset by the Australia headwind. We're looking at a slightly positive ex-Australia growth, sub 1%, but still positive with Australia putting us another roughly 100 basis points of headwind on top of that. It's been an important cycle, of course. We have had, as we've stabilized enrollment in some of our larger or higher enrolled centers, more turnover in the older age groups as we come into the fall. That backfill takes a bit of time, and we also have the natural comparison against a very strong year-over-year in our U.K. operation. A couple of things that come into how we're growing Q2 versus Q3 and Q4: we're still looking at something that's pretty close to our original guide for the full year.
Okay. Thank you.
Our next question is from Manav Patnaik with Barclays. Please proceed with your question.
Hi, this is Ronan Kennedy on for Manav. Thank you for taking our questions. If I may, I'll start with a follow-up on Back-up. You highlighted both new logos and increasing utilization amongst recently launched clients. Are newer clients ramping faster than what you've seen in the past? If so, what's driving that behavior? Then you also continue to discuss substantial penetration opportunities within existing. What gives you confidence that the employee participation rates can continue moving higher from here?
Thank you for the question. I'll start with the second question since the vast majority of growth that we experience is within the existing client base. We are now into a multi-year demonstration of continuing to drive users and use. We continue to work with our client partners to provide increasing amounts of outreach so that we can ultimately continue to garner more unique users, because ultimately that is the key determinant of continuing to see the kind of growth that we have been able to achieve. Certainly in the near term, we can look at reservation volumes and gain confidence, which is what gave us the ability to increase our guide. Ultimately, it's really down to continuing to identify and secure new users, and then a small uptick on frequency. In terms of new and ramping clients, that is a much smaller component of it, given the fact that we have more than 1,000 clients that take advantage of our Back-up service. That said, they are important to the long term in this business. The maturation process of these clients looks quite similar to what we've experienced historically. It is not outsized compared to the past, but rather an important element. Then the final component is the white space: as we articulated in the investor presentation, we see a lot of white space as it relates to the possibility of garnering new logos, and we believe that will continue to be a component of our growth algorithm within Back-up Care.
Thank you for that. With the strong margin expansion in Back-up to 26% versus 25% last year, how much of that margin expansion was utilization versus mix? How should we think about what are sustainable levels of margins for Back-up Care?
We believe the Back-up margins are sustainable. We've been targeting 28% to 30% as our outlook for operating margins for Back-up for a while. We would continue to expect to see that this year. With more volume even coming in the third quarter than the second quarter, the margin conversion comes down to utilization against the portion of the Back-up Care cost supports that are fixed. We would expect it to tick up in the third and fourth quarters from where we see the first half of the year and be able to sustain that 28% to 30%, given the mix of use and the volume conversion that we're able to achieve.
Thank you. Appreciate it.
Thank you.
Our next question is from Jeff Meuler with Baird. Please proceed with your question.
Thank you. I know you've had the greater than 70, less than 40 to 70 buckets for a while. Just on full service, can you help us think through what percentage you characterize as high margin, maybe near full occupancy, not really growing? What percentage are ramping well at this point? Of the lower utilization or those that are maybe not ramping, how many are in the assessment for closures bucket?
Appreciate the question because there is some nuance in there, Jeff. Broadly speaking, the group of centers that are operating above 70% are in that category of sustaining enrollment, not necessarily growing quarter to quarter. Those centers will naturally cycle enrollment, particularly the older preschoolers who are graduating out to elementary school. That group is not necessarily growing much. It's sustaining enrollment, and we've been pleased to see how much sustainability they have had through the last couple of years because that group has been steady. Between the overall aggregate price increases and the conversion of that to earnings in those centers, we're earning more even as the margin is getting back toward our target of about 10% EBIT margin. Those centers are very much there. The group in the middle, the 40% to 70% cohort, contains some centers running very well; they may be anywhere from 60% to 70% occupied or 55% to 65% occupied. They do very well at that level and may not improve meaningfully from that level. That group is, call it, around 45% of our overall mix. There is still a part of that group, perhaps 25% to 35% of the overall mix, that still has opportunity. The sub-40% occupied group declined to 5% this quarter. That's an optimized time period because as we cycle enrollment, that'll move around. In that group we have anywhere from about 60 to 70 centers that might be candidates for deep consideration of closure; we'd probably look at maybe 25 to 50 of those that we would have circled as not likely to be viable over the long term and candidates for closure beyond this year and maybe into 2028. That's how I'd characterize the overall mix. One additional consideration is Australia has been underperforming; the deep dive that we are conducting on that portfolio might increase that a little bit, just trying to characterize the rest of the portfolio.
Help me with that deep dive, just how close are you, or what actions have you taken, or how close are you to taking more aggressive action in Australia?
What I would say is, as we shared on the last call, we saw degradation in enrollment. Our focus at this point is on aligning staffing with enrollment levels, while trying to improve enrollment from where we are. As Elizabeth shared, another action we are looking at and circling up is closures to make sure that we're optimizing the portfolio for the future. Ultimately, as we think about Australia, we're trying to think broadly about how to get that back on track in the way we were able to accomplish in the U.K. That's our immediate action. Over the intermediate term, we are looking at strategic options as it relates to how we think about that geography broadly.
Thank you both.
Our next question is from Jeff Silber with BMO Capital Markets. Please proceed with your question.
Thank you so much. I believe on your prior call, you gave us operating or adjusted operating margin guidance by segment. Can we just revisit that again?
Operating margin: from a Back-up Care standpoint, we're looking at 28% to 30% for the year. On full service, overall, we expect to be relatively flat for the year; the Australia headwind there is expected to be 50 to 75 basis points. We would be positive excluding that headwind. At this point, we're looking to be relatively flat in full service, and then our educational advising would be in the roughly 20% range.
Okay, great. That's really helpful. Completely different question. A number of us cover some of the higher education companies, and I know it's a different business, but many of them have been talking about changes in the way that students are searching or finding schools that they want to attend, moving from traditional search engines to using large language models. I'm wondering, are you seeing that at all? If so, are you changing your marketing strategy accordingly?
Sure. Happy to answer that. Your question is focused around the ed advisory aspect of what we do. When we think about the College Coach aspect, those are dependents of our clients' employees—traditional learners rather than adult learners. They do seek information through AI and related tools. At the same time, these are very high-stakes decisions that they're making, so the expertise our counselors provide remains an incredibly valuable aspect of their search process. On the College Coach side of the business, we continue to see participant growth, and that reflects the fact that employees and their dependents are highly interested in seeking expert advice from former college admissions and financial aid professionals.
Yeah, I'm sorry. I was actually thinking about your full service center business. I don't know if that's impacted at all.
I'm not sure that we've seen that kind of a shift for the full service center business, but happy to inquire more about that.
Okay. Appreciate the color. Thanks so much.
Our next question is from George Tong with Goldman Sachs. Please proceed with your question.
Hi. Thanks. Good afternoon.
Hi.
Occupancy outside of Australia reached roughly 70% in the quarter. As occupancy rates continue to recover, where would you say you are in the margin expansion journey within full service, and how much operating leverage remains available before you reach a more normalized utilization level?
If I'm understanding your question correctly, you're asking about the opportunity to get back to a 10% EBIT margin, which is where we have historically operated. We certainly see a pathway to that, both by sustaining enrollment and performance in our top cohort enrolled group. To walk through current headwinds: last year we reported about 5.5% in full service. We expect it to be relatively stable this year. Looking at Australia as a whole, that underperformance—about $20 million to $25 million of losses—we expect to be losing in that geography and that equates to roughly 150 basis points of headwind. We also have a group of centers we've closed where we're working to completely exit leases and facility costs; the run-off and exit is another roughly 50 basis points of headwind. Excluding those two components, we are at about 7.5%. The centers that are sub-70% occupied include a group that may be candidates for closure and are affecting overall performance. Gaining enrollment in the middle cohort and getting that operating leverage, we certainly see a path to getting back to 10% and beyond. Step one is getting back to 10%, and we'll comment later on further progress. It's been a process, but we're heartened by how the top performers continue to deliver and how we've been able to move centers out of the bottom cohort into the middle cohort.
Got it. That's very helpful. Switching to Back-up Care, growth accelerated in the quarter even against tougher comps. Can you discuss whether there were unusual tailwinds that you saw this quarter, or is there reason to believe that these growth rates are in fact sustainable?
I think there were no anomalies. The performance was due to continuing to increase the number of users and a slight uptick in frequency. Q3 is the largest quarter seasonally, so we expect some moderation relative to Q2 as we noted in our guidance. Overall, we continue to see an opportunity to get to 13% to 15% growth for the full year, and then continue to sustain double-digit growth for many years to come.
Got it. Very helpful. Thank you.
Thank you.
Our next question is from Toni Kaplan with Morgan Stanley. Please proceed with your question.
Thanks so much. I wanted to go back to the center closures topic. You've been in net closures mode for a couple of years. Is there anything that, when you think about the go-forward lease consortium strategy, you plan to change in terms of where to open new centers? I know it used to be more targeted toward urban areas because of employer concentration. Is there anything different that you're thinking about now?
In the near term, we continue to focus on opening new centers in collaboration and partnership with clients. Our first priority is to continue to transition the management of self-operated centers and to open new greenfield opportunities with clients' financial support. Longer term, our lease consortium models will be driven by where our clients and their employees live and work, and where we can secure support from client partners to create sustainability for the model. Overall, our approach remains client-centric: near-term focus on client centers, and beyond that, thinking about lease consortiums that garner support through client partners and their employees.
Got it. Elizabeth, if you could help us for modeling purposes on what the FX was in the quarter for full service and if you have an updated expectation for FX for the full year, that'd be great as well.
That's an important point, Toni, because FX was a significant contributor in the second quarter. In full service specifically, FX contributed about 100 basis points of tailwind in the quarter. For the full year, we expect FX to be relatively higher, around 125 basis points. In the second half, we would expect it to taper significantly. The swing between Q2 and Q3 is part of our guidance: the swing is about 125 basis points from a +100 basis points effect in Q2 to approximately -25 basis points in Q3, which affects the overall growth rate.
Thank you.
Our next question is from Josh Chan with UBS. Please proceed with your question.
Good afternoon. Thanks for taking my question. Maybe jumping off of the prior point about the moderation in full service from Q2 to Q3: recognizing FX is a part of that, but there's also further moderation. What are the main factors causing that? Is it a greater impact from Australia? Any other dynamics affecting that?
There's a bit more effect from net closures sequentially in Q3. FX is the largest sequential effect. Net closures are another roughly 75 basis points; in Q2 the net closure impact was around 150 basis points, and in Q3 we expect about 225 basis points impact from net center closings. Australia contributes at the margins, and we also expect a slight taper in core enrollment excluding Australia. So together: FX, net closures, and a modest change in enrollment explain the moderation from Q2 to Q3.
Okay. That makes a lot of sense. Thanks, Elizabeth. Maybe on the repurchase: you took advantage of the opportunity in Q2 again. Could you talk to the willingness to buy back stock? How do you balance that between leverage and opportunistic buybacks? How do you think about that from here?
The business generates a lot of cash. We leaned in on repurchases in the first half of the year: $250 million in the second quarter on top of about $225 million in the first quarter. We've been active and feel like that's been a good capital allocation, funded in part by modest revolver use. At 2.2x net leverage, we've been much more levered than that in the past. We feel comfortable at these ratios and want to remain opportunistic as needed. Our guidance does not contemplate further repurchases from here; the diluted share count guidance reflects what we've done to date.
Great. Thank you so much for the color. Good luck in the second half.
Thank you.
Our next question is from Stephanie Moore with Jefferies. Please proceed with your question.
Yes, great. Good afternoon. Thank you. I wanted to touch a little bit about price and volume contribution during the quarter, if you could break that out. Also a clarification: could you talk through the expected occupancy improvement in full service in the back half of the year? There are a lot of moving pieces and I just wanted to level set expectations there. Thank you.
Sure. Our average price increase for the year has been about 4%, which is relatively consistent across quarters and the full year. Core enrollment, excluding Australia, was up roughly 100 basis points in the quarter; Australia was a headwind of around 100 basis points. Net volume was relatively flat. Net closures were around 150 basis points in Q2. FX added about 100 basis points to reported revenue. Regarding occupancy trends in the back half of the year: the second quarter is the seasonal high water mark for full service enrollment. We were in the high 60s in the quarter and would expect occupancy to step down toward the mid-60s, reporting a modest occupancy gain compared to last year but at the margin still in the mid-60s plus by year end. It steps down as we cycle through the third quarter, with a modest increase into the fourth quarter.
Okay. Thank you so much.
You're welcome.
Thank you. Okay, well, thanks everyone for joining the call. Wishing everyone a good night.
Thanks, everyone.