Greetings. Welcome to the Bright Horizons Family Solutions Fourth Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I’ll now turn the conference over to your host, Michael Flanagan, Senior Director of Investor Relations. You may begin.

Thanks, Shamal, and hello to everyone on the call. With me here are Stephen Kramer, our Chief Executive Officer; and Elizabeth Boland, our Chief Financial Officer. I’ll turn the call over to Stephen after covering a few administrative matters. Today’s call is being webcast and a recording will be available under the Investor Relations section of our website, brighthorizons.com. As a reminder to participants, any forward-looking statements made on this call, including those regarding future business and financial performance, including the effect of COVID-19 on our operations, are subject to 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 are described in detail in our 2020 Form 10-K and other SEC filings. Any forward-looking statements speaks only as of the date on which is made, and we undertake no obligation to update any forward-looking statements. We also refer today non-GAAP financial measures, which are detailed and reconciled to the GAAP counterparts in our earnings release, which is available under the IR section of our website. Stephen will now take us through the review and update on the business.

Thanks, Mike, and welcome to everyone who has joined the call. To start this evening, I’ll recap our 2021 results and outline how the progress we made this past year positions us well for 2022 and beyond. Elizabeth will follow with a more detailed review of the numbers and outlook before we open it up for your questions. Overall, I’m really pleased with our performance in 2021 and all that the team has accomplished over the last two years. Prior to COVID-19, our business had been on a consistent revenue and earnings growth trajectory, which was upended with the onset of the pandemic and the temporary closure of nearly 80% of our centers. We responded swiftly with an immediate focus on health and safety, supporting clients and their essential frontline workers and pivoting to create new back-up care solutions for clients and employees to meet the incredible surge in need and demand. Throughout 2021, we gained traction in our recovery as we reopened hundreds of centers and welcomed back thousands of families. At the same time, we delivered hundreds of thousands of days of back-up care, launched services for more than 75 new clients, added 44 new centers and made important investments in technology and new service offerings that lay the foundation for growth and innovation over the next many years. As a result of all of this, we enter 2022 with good momentum. While the most recent COVID variant surge now appears to be waning, parent and client behavior has still been impacted and will take additional time to normalize. On the plus side, a long-term outlook I see for our business is incredibly positive. In fact, I believe the actions we have taken over the last two years will transform our opportunity for years ahead. Our longstanding value…

Thank you, Stephen, and hello to everybody who’s joined the call tonight. To recap the most recent quarter, overall revenue increased 23% to $463 million. Adjusted operating income was $46 million or 10% of revenue and adjusted EBITDA increased 49% to $79 million or 17% of revenue. In the fourth quarter, we added 14 new centers and reopened 17 centers that had been temporarily closed. We also permanently closed 11 centers. We completed 2021 with revenue of 16% to $1.76 billion, adjusted EBITDA of 21% to $272 million or 15.5% of revenue, and with 977 out of our 1,014 centers open. Full service revenue increased $75 million in Q4 or 29%, which is at the top-end of our expected increase of 25% to 30% year-on-year. Our occupancy levels averaged between 50% and 60% having kicked up marginally from Q3, despite the near-term impact of Omicron that Stephen discussed. Adjusted operating income for the full service segment improved $36 million over 2020 to a positive $7 million. This represents a 48% flow through on the revenue growth. The outperformance relative to our 40% flow through expectation relates to improving efficiency with enrollment and lower-than-expected labor costs due to staffing constraints, as well as continued support from government programs targeted for the childcare industry. As Stephen mentioned, back-up care revenue increased 10% to $94 million, with $31 million of operating income. We continued to expand our client roster with another solid quarter of new client launches, although revenue growth was short of our expectations. As Stephen mentioned, we had softer use levels associated with the spread of the Omicron variant late in the quarter, which affected both the caregiver availability and parent demand for in-home and in-center care. Our educational advising segment reported growth of 5% to $30 million, on contributions from…

Thank you. And at this time, we will be conducting a question-and-answer session. Our first question comes from the line of Hamzah Mazari with Jefferies.

Good afternoon. Thank you. You mentioned in your prepared remarks a few times being better positioned competitively. I think you also mentioned being structurally more impactful coming out of the pandemic. Should investors expect that to show up in better organic revenue growth relative to kind of your framework that you had pre-COVID? And if so, do you see new center growth -- growing faster, because you have bigger clients, is back-up going to be a bigger contributor, or have you found kind of new adjacent services? Just maybe talk about, where people should begin to kind of see some of those milestones. I know, it’s early now, but maybe if you could flush it out a bit?

Sure. So, from a new center growth standpoint, I think the key thing is to consider how the arc of our business and a relatively long sales and then development cycle. So, we’re very encouraged by the amount of activity on the front end, have a number of centers that are in development. And so, this year, we’ll be expecting to open somewhere between 35 and 45 centers -- as I say, number that are already in development. So, we have visibility on a large number of those. We do have some plans for acquisitions as well that will feed into that. I think that the -- just as a reminder, as I say, the development cycle is a long one and client activity part of a value or I think of the conversations we’re having with clients now is the very nature of what they’re looking at. We have interest in dedicated centers, we have interest in sharing, participation in centers, near site versus on site support. And so, being able to respond to those different needs, including, there are opportunities for us to do consortium locations to put our capital to work and tap into many clients’ interests. So, that’s some of what we’re seeing on that practice. And I don’t know, Stephen, if there’s other color.

Yes. No, I think first, Hamzah, thank you for the question. I would say a couple of things. I’d say, first, I think we -- through this two-year period, as we remarked on, have done very well garnering new clients. And so, we see good outlook as it relates to both, continuing along that trajectory, but also, the cross selling efforts that we have been focused on will continue to allow us to see more clients adopting more of our services. I think, the second element that again really speaks to the strength of what growth into the future is going to look like is our innovation and our expansion of the kinds of use case opportunities that we now have with our clients and their end users. And then, the final piece, which we had started pre pandemic and continue to invest really in this pandemic period and beyond is around investments in technology. And we believe that we have become a much more tech-enabled set of services that will accrue really good dividends going forward. So, I think overall, reflecting on where we have been and where we are headed, we definitely feel like we are in a stronger position to deliver the kind of growth that we’re excited about.

And just my follow-up question is just on -- more near-term on 2022. I know you’ve given guidance. Maybe talk about -- I think this is the first time you gave annual guidance since the pandemic. I think, previous communication had been, we may reach pre-COVID -- and correct me if I’m wrong, we may reach pre-COVID revenue in full service on a quarterly run rate, sometime this year, but utilization will take longer. I think, it was maybe by the end of Q4. And so, maybe if you could sort of talk about why you’re comfortable establishing annual guidance right now. And then, just in terms of when you think you’ll hit pre-COVID revenue in the full service business?

Sure. So, I think that the operations of the business over the last two years, and I know we commented on it a few times. There’s a lot of variables. There’s been a lot of sort of twists and turns over the last couple of years. But there also is a true line of steady progress. It’s specifically to your question on the full service business, we’ve had centers reopen, we’ve had enrollment coming back. And although it has taken a little bit of a flatter ramp back in toward the pre-COVID levels than we would have anticipated a year and a half ago as we’re reopening. It has remained a steady improver, including modest uptick this quarter and our visibility to that continues into 2022. And the demand from parents is there. We are taking a number of steps to both, fulfill that demand to meet parents where they are to get staff in the locations where the demand is happening. And so, we have the tools to work on this, even as parents are making decisions over a longer period of time and clients are making decisions about their return to office decisions in the course of what’s going on in the general world at large here. So, our confidence comes from that steady progress. And as we look out to the rest of this year and see where we are in terms of the occupancy of the centers we have, which ones have interest and demand, that’s what puts us on a trajectory to be -- we’re not at the same level we were a quarter or two go, looking at mid-year for pre-COVID revenue. But by the second half, end of the year, we do think that we will be approximate in getting back to that pre-COVID time in terms of top-line. And from an overall occupancy level, at this point, the plan, the guidance that we laid here, doesn’t get us all the way there, back to the pre-COVID occupancy ranges. We had been in the 70% to 80% range. And what this plan contemplates is us getting close, but not all the way there by the end of the year. So, we think that it’ll take us -- we are going to continue to update you as the year goes along, but we think that we are on a pathway to get close. But, we will be more measured than what that would indicate.

Next question comes from the line of George Tong with Goldman Sachs. Please proceed with your question.

Hi. Thanks. Good afternoon. I wanted to dive into the impact that you’re seeing from labor shortages. Can you talk about whether or not your capacities and your occupancy rates are affected at all by the current labor shortage situation? And how your pipeline for recruiting looks like as you look out into the rest of 2022?

Yes. So I can -- I’ll take the first part and let Stephen color commentary on some of the efforts underway on the labor front. So, we are seeing some constraints on our ability to take enrollment. It’s spread out across centers. It’s not in only one pocket, but it’s also not in every center. So, some variability there. But in general, we would probably estimate that it’s affecting our occupancy by 3 to 4 percentage points that we have demand and we are not able to match that with the available staff supply. So, we are working hard to address that. And so, Stephen?

Yes. So, as we remarked, certainly, we have taken very strong stance as it relates to making sure that we continue our position as an employer of choice. And so, we have invested additionally in wages and benefits. As you will know, we have also been very focused over our history on making sure that we have the most well educated workforce. And so, obviously continuing to reinforce our efforts around eCDA and the Horizons Teacher Degree Program, where any teacher, in any one of our centers and schools can go back and get an associate or a bachelor’s degree completely free, with no out of pocket expense, and really helping to facilitate career mobility and upward trajectory for their careers. In terms of specific actions, you will see us really actively out there on the recruiting front. And so, you will know that referrals are still our number one source, referrals from existing employees are still our number one source of new employees. And in addition to that, we continue to be very active with National Hiring Day, social media, and other sort of technology enabled ways to make sure that the candidate experience is seamless. And so, overall, I think, we’ve come a long way as it relates to making sure that we are out there and really finding the best talent that is in the marketplace, and again, underscored by our employer of choice status, feel good about our ability to continue to make progress against the demand that we have, and the supply shortages that have been endemic in our industry, but certainly are particularly acute today.

Historically, tuition has increased 3% to 4% a year. Can you talk about what kinds of tuition increases you’re planning for over the next year in the current inflationary environment? And how tuition increases compare, or will align with wage inflation and other input cost inflation, like supplies and facility costs?

Yes. It’s an important question, George. Because it’s obviously been a hallmark of our business model that we are -- we’re in a arrangement here where we are sharing those incremental thoughts with parents, with clients. And so, that has been -- that discipline around pricing has been key to our sort of steady and predictable performance. In this environment, we are in a balanced -- as you’ve heard me talk about in the past. We’re in a balanced environment where we’re really working hard to regain and reenroll families -- attract new families and reenroll families who’ve expressed interest. And so, we are -- given that we’re in a 50% to 60% occupied level, we’re balancing out price increases with our cost inflation and believe that we can continue to make -- and right-size those economics over a cycle or two. So, this year, we’ve done increases that are averaging probably closer to 5% to 6%, some geographies higher than that, certainly some geographies a bit lower than that, but averaging on the higher end of what you’ve seen in the last few years, to reflect the inflationary environment on the wage front. And if we look ahead another year, I’d say we’re probably in a similar, higher than average environment. We have made wage adjustments, as Stephen mentioned, to be addressing not only the supply challenges, but also the environment in general. And so, we’re balancing out those costs. And most other inflationary costs for us are not that -- they’re not that substantial. Our occupancy costs are pretty well set. There’s some new releases that come in, but those are fairly well set. And our sort of operating, controllable costs tend to be between 5% and 10% of overall operating costs. So, we’re not -- even though there are some inflationary impacts, they’re probably the only one I’d call out that maybe more variable with these sort of energy costs, but that’s still manageable at this point. So, as we look ahead 12 months, I’d say that we’re looking, as I say, in that similar range of somewhere between 5% and 6% on average, perhaps next year. And in the meantime, if we see a general further pressure and change, we could look at something that’s a midyear adjustment in certain locations, if warranted. That’s not what we’re planning at the moment. But we certainly have the flexibility to do that.

Our next question comes from the line of Jeff Silber with BMO Capital Markets.

In your commentary about back-up, you talked about some weakness in in-home and in-center business. I’m sorry. Can I just get a little bit more color on that? I really hear the specifics around that.

Yes. I mean, I think that first, when we think about in-center and in-home care, we believe and certainly our research suggests that parents are thinking about the use of those opportunities, even more than they are thinking about it in terms of our full service centers. And so, when a variant, for example hit, we see an increase in cancellations, we see resistance to making new reservations. And that’s really reflective of the fact that when someone is thinking about how they’re going to deal with intermittent care, they are much more careful than what they might do for permanent care where they know there’s consistency in the children and teachers in the classroom versus being an intermittent trial for the day, either in-home or in-center. So, I think that certainly, as we saw through the fall with Delta, and then we saw again more recently with the new variants, people were more cautious and we saw that show up in the form of new reservations and cancellations. That said, I think we’re also really clear about the fact that we have additional use types beyond in-center and in-home to include things like virtual tutoring, things like camps, both virtually and in-person. And so, we have seen a nice uptick, as it relates to those use types, along with the fact that during those more difficult times, from a COVID perspective, we certainly have seen an uptick versus what we would have expected as it relates to reimburse care. So again, we tried to call out the fact that as the variant started to surge, we did see some hesitation among families, for in-center and in-home for a single day or intermittent care. But again, we have good use types to compensate for some of that, and also the longer term still feeling quite positive, about families continuing to use our back-up care services.

Getting back to near-term trends. We’ve seen in a number of locales, New York City, a lot of other northeast areas that the Omicron variant has really waned pretty dramatically. And I’m just curious, you saw some negative impact in the fourth quarter, are you starting to see that kind of shift away in certain geographic areas where we’re seeing declines in cases?

Yes. I think I would start, and Elizabeth feel free to play color. But I would start by saying, the phenomenon of the rapidly declining is really new, right? And so, I wouldn’t say that we have seen a real trend as of this point, only because this is a recent scenario where the cases are coming down dramatically. What we anticipate of course is that it will have an impact obviously, on our business and we’ll continue to further parent confidence in utilizing our services. But to answer your question directly, it is still a little soon to be declaring that that will be the cause and effect and what the direct impact will be. So, overall we’re cautiously optimistic. But, I would say in the spirit of full transparency, it is soon to be declaring that at this point.

Our next question comes from the line of Stephanie Yee with JP Morgan. Please proceed with your question.

Hi. Good afternoon. I just want to clarify on the utilization rate, not really reaching back to that high-70s level by the end of the year. It sounds like it’s really due to constraints on the labor front, as opposed to center reopening, parents wanting to put their kids back. Just if -- if it is a big change in the labor supply situation? And I guess, as you look into 2023, if that situation alleviates, do you expect it to be maybe a first half 2023 event, when we’ll see kind of that high-70s utilization rate again?

Yes. I mean, I think that what you are pointing out, Stephanie, is the different inputs and impacts that can happen here and certainly across the portfolio, we will have some variability here. But we are looking at an environment that is constrained on the staffing side, and the actions we are taking, our policies, our procedures, all those are taking a hold. We are heartened by the early results, but they need time to act to bear all the fruit that we need in terms of the demands that we see out there. I think it’s also -- it’s the combination of that constraint along with what we’ve seen in parents, sort of gradually coming back. Stephen alluded to it here. But, the changes in sentiment, in the headlines translates to actual behavior in a non-linear way and over time. So, we will see how it unfolds. But what we are prognosticating now is a gradual return from parents, us being able to continue to gradually address the staffing constraints and knowing that there is demand there, there is need, there is demand and there is our ability to service the need when we can get all these things up. So, that’s what’s dragging our predictions. So, to the question of whether it will be the first half of 2023, we certainly see a path to get there, but we need to get through the next couple of quarters of all of this normalizing more to be more definitive about that.

Okay. That’s helpful color. And we’ve seen some news headlines of just some employers stopping -- they kind of given up on putting a date on when they want their employees back in the office. That’s certainly not the case for our firm. But we’ve seen headlines from other industries doing that. I guess, what conversations are you having with your clients on maybe the kind of services that they are looking for, kind of this year into next year maybe? Is it more geared towards expanding back-up care options or you are still having conversations about wanting onsite centers? Just if you can give some color on the conversations that you’ve been having and interest levels.

Sure, happy to, Stephanie. So first, what I would say is that in our conversations with our clients and prospective clients, there seems to be fairly pervasive ambition to get employees back to the office. And I think that likely we’re going to start seeing that. Obviously, it’s been led by financial services, especially in New York. But we are starting to see that more pervasively throughout the country. And so, first, I think there is real ambition for employers to get employees back to the office. Secondly, as it relates to the conversations we’re having, we’re really upbeat about the conversations we’re having about on site centers. We are certainly engaging, as I said, with CEOs and CHROs of a lot of organizations who are truly contemplating whether or not this is the time that they want to be stepping into that type of support for their employees. And there’s really two elements to the conversation. The first is, they really want to make their office, their worksite an attractive place for employees to come back to and ultimately want to be back at. And so, they are seeing worksite childcare as a great amenity, in addition to the attraction and retention tool it has always been, they’re really seeing it as an amenity. And then, I think, the second piece is that as they contemplate the full service centers, it is also under the guise that they recognize that there is a growing shortage coming in terms of their employees being able to get back to work, and back to the office. And so, they are trying to address it from the perspective that it is one of the top challenges that their employees are citing in terms of their ability to get back to work and ultimately get back to the office. That said, back-up care has through this pandemic really been seen as a business continuity tool. And so, we really continue to see really good interest from prospective clients about adding back-up care to their arsenal to keep employees productive, and ultimately being an employer of choice. And then, overriding all of this is the additional piece around upskilling and reskilling. And so, we’re hearing from a lot of our clients and prospective clients about their need to fill hard-to-fill jobs, and using education as a key tool to not only differentiate who they are as an employer, but also to be really prescriptive about educational opportunities that will enable their current employees to ultimately be ready to fill those kinds of roles. So, I think, we are incredibly well-positioned vis-à-vis the strategic challenges that employers are having today, across all of our service segments, and are having really robust conversations on that basis.

Our next question comes from the line of Toni Kaplan with Morgan Stanley.

I wanted to follow-up on that last question actually. Definitely appreciate your comments on employers wanting to provide more benefits. And so, I guess, how does -- and obviously universal pre-K is maybe sort of less in the news right now after, what’s been not passing, but like, basically how does universal pre-K fit into the employer thinking on whether it’s worth starting up a new center? Like does that come up at all or is that just something that maybe investors are thinking about and not employers?

Yes. I don’t think that is a focus for employers. I think that what employers recognize is the largest shortage in care is very specific to the younger age groups. And so, typically in communities, the largest percentage of availability is at the preschool level. And so, where employers have historically and certainly as they look out into the future, wanted to place the most emphasis is in infant care where it’s in shortest supply, and then progressively from there. And so, I think there is very little intersection between sort of where the government is focused in terms of potentially moving downstream from elementary education into preschool, which as you rightly point out, Toni, seems to at this point be stalled. But rather thinking about the return to work, getting both mothers and fathers back to work after maternity or paternity leave, having a high quality, onsite childcare experience to return to, and then ultimately providing what is available, what is affordable, and what is most importantly high-quality care at the worksite. And so again, I think they’re sort of on two very different paths. The employer is really focused on getting employees back to work, and ensuring that there is a high quality space available for young children. And the government is thinking about whether or not they want to come down from public early childhood -- early education -- sorry, elementary education into early childhood education at the preschool level. So, again, two really different concepts.

Got it. And just for my follow-up, just want to ask about M&A, you mentioned a few times on the call that, maybe we should expect some of the increased number of centers this year to be driven by M&A. Should we expect that to be bigger this year, especially as you’re on this recovery path or -- when should we start to see that get bigger -- or should it not get bigger? You tell me.

Just to clarify, we did actually complete an acquisition in the fourth quarter of a 12-center group in the UK. So, with that, and a couple of other single site locations that we did earlier in the year, we actually did add a pretty typical average number of centers by acquisition in 2021, the sort of tuck-in side of around -- again, aiming for around 15 centers over so a year. So, I think our plan calls for a similar level of acquisitions. So nothing outside, but also certainly handful of either single sites or anywhere from two to four or five center routine that would comprise that kind of a cohort to add in ‘22. And I think more to the point of what you’re asking is, how is the market for M&A, and is it coming back? And I think our perception of that would be that in selected markets, it’s coming back more readily than others. Many sellers are still waiting for their performance to return to a pre-COVID level to be able to realize a value that they have their mind and heart set on. And so, there’s been more waiting on the sidelines, and certainly in the U.S., there’s been some more support for some of these facilities longer than we would have anticipated. So, owners are hanging on a bit longer, and we’re trying to be both, disciplined about the prices we pay, but also, it’s an opportunity to really be sort of laser focused on where it is that we want to be over the next many years. And so, we are being careful that way. Are there other thoughts on the markets, Stephen?

Yes. I would say, the only thing I would add, because I completely agree with all of those sentiments is that very specifically, as we are seeing markets progress towards pre-COVID levels, sellers are absolutely becoming more interested in the conversation. And the good news is, we have teams on the ground in the U.S., the UK and the Netherlands. We are seen as an acquirer of choice. And so, we have strong belief that as the recovery continues to take shape, we will be in the right place as it relates to being able to find some really high-quality acquisitions. And then, the other piece that is just worth observing is, we continue to look globally at markets that today we don’t operate in. And we believe that there may be opportunities over the coming years to continue to expand our footprint outside of the three main areas that we operate today. So, again, in the three geographies, we believe that there’ll be some good opportunities forthcoming. And then, likewise, we continue to be mindful of other places where there is some form of third-party support, either in the form of employers or in the form of government or both, for us to continue to track and build relationship.

Our next question comes from the line of Jeff Mueller with Baird. Please proceed with your question.

Yes. Thanks. Good afternoon. I wanted to ask about the implied step-up in the expense space into Q1. And then, I guess, subsequently, it actually looks like you have pretty good margins over the balance of the year following Q1. So, anything unusual in Q1? Just wondering if there is any sort of like temporary surged labor rates, given Omicron, anything in terms of the full year guidance around what’s assumed for the timing of government support benefits, or just anything else other than the enrollment ramp that follows Q1 that would help with the margin ramp from there, or just better understanding the expense base sequencing as the year goes?

Yes. So, it’s certainly a fair point and question, and a number of things do happen in the first quarter that are a little bit different than the fourth quarter. We have -- obviously there are the resets of everything from payroll taxes -- payroll tax limits, which have an impact, there certainly are some plans that we are launching and have been in flight that have gotten launched in Q1. So, there is some cost step up there. But your point about the government funding is an important one. We had -- in 2021, we had a backend weighted result as more states opened up their grant, applications and they were deploying funds more in the third and fourth quarter. So, in Q3, we had about $11 million or so similar in Q4. And we are planning for some continued government funding in 2022, but it is very dependent on these states rolling out their funds and some of them have gotten further along in that process than others. So, there is a bit of a lower assumption going on both throughout the whole year and comparing Q4 to Q1. So, we are looking at more like, call it $25 million or so for the full year. And if you, it’s pretty straight-lined in that view. So, that’s one element. And then, I think the other is that we are -- from an overall back-up use standpoint, when we have more back-up use, and we’re looking at having that continue to progress, there’s more cost as we deliver the care than there would be in an environment where we’re paused and experiencing what Stephen talked about a few minutes ago. The last thing I’d point out is that we did mention last year, we acquired business in late 2020, called Sittercity. And it is a platform investment that’s part and parcel of our service delivery of enhanced family supports. And so, we have some investment going on there that’s more enhanced in Q1 than it was in Q4, the latter part of 2021. So, that’s step up of several million as well. So, there’s components like that.

And then, if and one back-up care usage normalizes or goes back to, like pre-COVID fulfillment percentages and mix. So more in-home and in-center and I don’t know to what extent you expect some of the new services to be additive on a lasting basis versus where there’s a cannibalistic effect, like what the self-sourced reimburse care. So, a long preamble. But, just if and when back-up care usage normalizes, what does that mean for your revenue relative to kind of a current trend line, or what’s assumed in that 10% to 20% growth in 2022?

So, I had you right up until the last part of the question where I think you were asking about what’s the revenue trend line, or is it what’s the use...

No. Yes. Like so if you would look at back-up care going back to like some more normalized mix in usage. Is that -- is there like a step function higher for you in terms of back-up care revenue, or are you assuming you largely normalize in the ‘22 guidance? Just not sure how mix is impacting you at this point relative to what you would expect to be more normal?

Yes. I mean for the overall year, we’re -- the comparative in Q1 is a bit lighter in that high single digits. And so, we do expect that use continues to pick up over the year, what we are looking to do in the different use cases, along with the natural high-use area in the -- over the summer. Then it would be progressing more towards that -- if it’s in the 10% to 20% range for the full year, it would be stepping up against Q1 accordingly. So pretty steady growth there. I think that the elements there are more around how we manage the cost against that and the different kinds of use.

Well, I guess, just the view is like your full service business is pretty clearly underearning in 2022 and your margin and utilization are not where they’re going. I’m wondering if there’s a similar dynamic in back-up care where because mix hasn’t yet normalized for you, if it too is under earning, considering how many new clients you’ve onboarded the last few years through the pandemic.

Well, I think if I can start, maybe I’m not sure what Stephen was going to add there. But, it’s true to say that we don’t have -- we have not been able to capture and deliver all the use that would be implied by having added all of those clients that we’ve added over the last couple of years. They are still underutilizing to a target that we would have to what we know their populations could consume. So, there is absolutely an opportunity there to have -- to drive even more use than we’re planning for this year as those clients season. And so, they’re under earning in absolute dollars. In terms of the performance of backup against the revenue we have in this 10% to 20% range that we’re expecting for this year, we do expect margins to be performing in the range of our long-term guide of 25% to 35% overall for the year. So, we do think that the performance for the revenue we have will be consistent. It’s not really under earning for that, but there is opportunity for more revenue and then for that to convert to more operating income.

Excellent. Well, we appreciate everyone joining the call this evening, and wishing you a great night.

Thanks, everyone. Take care.

And this concludes today’s conference. You may disconnect your line at this time. Thank you for your participation.