Alight, Inc. (NYSE:ALIT) Q4 2022 Earnings Conference Call February 21, 2023 5:00 PM ET Company Participants Jeremy Heaton - Executive Vice President, Finance Stephan Scholl - Chief Executive Officer Katie Rooney - Chief Financial Officer Conference Call Participants Kyle Peterson - Needham & Company Kevin McVeigh - Credit Suisse Scott Schoenhaus - KeyBanc Tien-Tsin Huang - JPMorgan Emily Marzo - Bank of America Operator Good morning and thank you for holding. My name is Paul, and I will be your conference o ...

Alight, Inc. (NYSE:ALIT) Q3 2022 Results Conference Call November 3, 2022 8:30 AM ET Company Participants Greg Faje - Head, IR Stephan Scholl - CEO Katie Rooney - CFO Conference Call Participants Peter Heckmann - D.A. Davidson Scott Schoenhaus - KeyBanc Operator Good morning, and thank you for holding. My name is Kate and I will be your conference operator today. Welcome to Alight's Third Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded, and a repl ...

Financial Data and Key Metrics Changes - The company reported a total revenue increase of 6.4% year-over-year to $715 million for Q2 2022, with revenue excluding the legacy Hosted business increasing by 6.7% to $705 million [17] - Recurring revenue, which constitutes 84% of total revenue, grew by 7.7% [17] - Adjusted EBITDA for the quarter was $142 million, maintaining strategic investments [17] Business Line Data and Key Metrics Changes - Employer Solutions segment revenue grew by 7.9%, driven by net commercial activity, increased volumes, acquisitions, and project revenue [18] - Professional Services segment revenue slightly decreased by $1 million to $91 million, attributed to a 3.3% decline in project revenue due to timing delays [19] - BPaaS revenue increased by 36% year-over-year, now accounting for 17.9% of total revenue, up from 14% a year earlier [15][17] Market Data and Key Metrics Changes - The company has over $2.4 billion of revenue under contract for 2023, tracking well towards a goal of double-digit revenue growth [7][26] - The total addressable market has expanded from $33 billion to $73 billion over the past five years [8] Company Strategy and Development Direction - The company is transitioning from a custom services-led model to a technology-led organization, focusing on the Alight Worklife platform to enhance client engagement and outcomes [6][8] - A stock repurchase program of up to $100 million has been announced, reflecting confidence in the business [7][22] - The strategy includes maintaining a strong balance sheet, optimizing capital structure, and returning capital to shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's ability to withstand macroeconomic challenges, citing a revenue mix that is 84% recurring and a 97% average revenue retention rate [15] - The company anticipates a sequential revenue improvement of 24% in Q4 due to the Thrift program going live and additional client wins [26] - Management highlighted the importance of cost savings for employers, which enhances the value of their services during potential downturns [16] Other Important Information - The successful go-live of the Federal Thrift Savings Plan was noted as a significant achievement, adding over 6 million participants to their service [13] - The company has made substantial investments in technology and platform enhancements, including the introduction of the Alight Digital Wallet [10][12] Q&A Session Summary Question: Guidance on EBITDA headwind - Management confirmed that the $15 million headwind was related to timing of costs versus revenue recognition, impacting EBITDA [28][29] Question: Momentum on bookings - Management noted that the focus on employee engagement and cost rationalization is driving strong bookings despite macroeconomic concerns [30][32] Question: Professional Services project delays - Management indicated that some delayed projects are expected to go live in Q4, leading to improved performance [34][35] Question: Wage inflation impact - Management explained that wage inflation is contractually addressed, with the ability to pass on costs above a certain threshold to employers [40] Question: Visibility into fourth quarter projects - Management provided insights on visibility from new deals and the Thrift program, indicating strong demand for support during enrollment periods [42][44] Question: Pipeline and client conversions - Management reported the largest pipeline ever, with significant wins from major clients indicating strong growth potential [48][50]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39299 Alight, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 86-1849232 ( State or other jurisdiction of inc ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 increased by 5.2% to $725 million, while total revenue excluding the legacy Hosted Business increased by 5% to $713 million [19] - Recurring revenue grew by 7%, and adjusted EBITDA increased by 6.8% to $142 million, driven primarily by revenue growth [19] - BPaaS bookings reached $122 million, a 205% increase from $40 million in the previous year, and BPaaS revenue grew by 23% to $114 million, now accounting for 15.7% of total revenue, up from 13.5% a year earlier [9][18] Business Line Data and Key Metrics Changes - Employer Solutions segment revenue grew by 6.1%, with recurring revenue increasing by 6.9%, although project revenue declined by 1.9% [20] - Professional Services segment revenue slightly decreased to $90 million due to a 4.8% decline in project revenue, partially offset by a 3.4% growth in recurring revenue [20] - Gross profit margin for Employer Solutions declined to 32.7%, reflecting investments made in the business [10] Market Data and Key Metrics Changes - The company signed significant contracts with major global brands, including Navistar, Shell, and Sartorius, expanding its client roster [7] - The addition of a federal contract is expected to bring in 6 million participants and a significant recurring revenue stream, marking a key milestone for the company [22] Company Strategy and Development Direction - The company is focused on transforming human capital management through its Alight Worklife platform, which integrates physical, mental, and financial wellbeing [5][6] - The BPaaS model is central to the company's strategy, combining technology, content, and global delivery capabilities to enhance employee engagement and decision-making [11][12] - Investments are being made in technology development, go-to-market strategies, and enhancing the Alight Worklife platform [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% revenue growth in 2023, supported by strong bookings and a solid pipeline of contracts [10][24] - The company is managing inflationary pressures effectively through contractual provisions that allow for price adjustments [29] - There is optimism regarding a rebound in project revenue in the Professional Services segment, driven by a strong pipeline and recent contract wins [42] Other Important Information - The company has a cash balance of $326 million and total debt of $2.9 billion, with over 70% of its debt portfolio fixed, positioning it well for a rising rate environment [22] - The Hosted segment is in a runoff phase, with one remaining client expected to transition to a cloud-based solution, retaining approximately half of the annual revenue stream [21] Q&A Session Summary Question: Clarification on EBITDA guidance despite additional investments - Management confirmed that the investments were anticipated and will provide tailwinds for achieving guidance as the year progresses [27] Question: Insights on managing internal cost pressures - Management acknowledged inflationary pressures but highlighted effective management strategies and contractual structures that help offset these costs [29] Question: Update on the Thrift Savings contract and its contribution - Management indicated that the contract is on track for a go-live in the second half of the year, contributing to the overall guidance [33][34] Question: Impact of currency fluctuations on costs - Management noted that existing contracts provide a natural hedge against currency fluctuations, limiting their impact on costs [36] Question: Visibility on project revenue rebound - Management expressed confidence in a rebound in project revenue, supported by a strong pipeline and recent contract wins [42] Question: Changes in urgency for enterprise projects amid market uncertainty - Management observed an increased urgency among enterprises to consolidate fragmented systems and improve employee engagement, driving demand for their services [46]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial information for Alight, Inc., including financial statements, management's discussion and analysis, and market risk disclosures [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Alight, Inc.'s unaudited condensed consolidated financial statements for Q1 2022, distinguishing between Successor and Predecessor periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$11.22 billion** as of March 31, 2022, driven by fiduciary assets, with total liabilities rising to **$6.24 billion** Condensed Consolidated Balance Sheet Data (in millions) | Account | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $326 | $372 | | Goodwill | $3,627 | $3,638 | | Intangible assets, net | $4,090 | $4,170 | | Total Current Assets | $2,733 | $2,469 | | **Total Assets** | **$11,221** | **$10,988** | | **Liabilities & Equity** | | | | Long-term debt | $2,818 | $2,830 | | Total Current Liabilities | $2,360 | $2,125 | | **Total Liabilities** | **$6,237** | **$6,060** | | **Total Stockholders' Equity** | **$4,984** | **$4,928** | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Q1 2022 revenue increased to **$725 million**, with net loss improving to **$13 million** from **$21 million** in the prior year Q1 2022 Statement of Comprehensive Income (Loss) (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2022 (Successor) | Three Months Ended March 31, 2021 (Predecessor) | | :--- | :--- | :--- | | Revenue | $725 | $689 | | Gross Profit | $223 | $218 | | Operating (Loss) Income | $(2) | $46 | | Net Loss | $(13) | $(21) | | Net Loss Attributable to Alight, Inc. | $(11) | $(21) | | Basic & Diluted Net Loss Per Share | $(0.02) | N/A | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$19 million** in Q1 2022, while financing activities provided **$305 million** Cash Flow Summary (in millions) | Cash Flow Category | Three Months Ended March 31, 2022 (Successor) | Three Months Ended March 31, 2021 (Predecessor) | | :--- | :--- | :--- | | Cash provided by operating activities | $19 | $39 | | Cash used for investing activities | $(41) | $(27) | | Cash provided by financing activities | $305 | $155 | | **Net increase in cash, cash equivalents and restricted cash** | **$281** | **$168** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain the Business Combination, segment reporting, revenue recognition, debt structure, and share-based compensation - The company operates in an "Up-C" structure following the Business Combination on July 2, 2021. As of March 31, 2022, Alight, Inc. holds an **86% economic interest** and **100% voting power** in Alight Holdings[20](index=20&type=chunk) - The company's primary segments are Employer Solutions (digital/AI-led benefits, payroll, etc.) and Professional Services (project-based cloud deployment and consulting)[22](index=22&type=chunk)[23](index=23&type=chunk) - In connection with the Business Combination, the company entered into a Tax Receivable Agreement (TRA), paying **85% of realized tax benefits** to pre-business combination owners. The TRA liability is remeasured to fair value each period[26](index=26&type=chunk)[108](index=108&type=chunk) - As of March 31, 2022, total debt outstanding was approximately **$2.86 billion**, primarily consisting of a **$2.47 billion B-1 Term Loan** maturing in 2028 and **$313 million in Secured Senior Notes** due 2025[63](index=63&type=chunk)[64](index=64&type=chunk) - Share-based compensation expense was **$33 million** for Q1 2022, a significant increase from **$2 million** in Q1 2021, driven by new awards under the 2021 Omnibus Incentive Plan[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial results, highlighting **5.2% revenue growth**, improved net loss, and strong liquidity, alongside segment performance and non-GAAP measures [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2022 revenue grew **5.2%** to **$725 million**, driven by Employer Solutions, with net loss improving due to a **53% decrease** in interest expense Consolidated Results of Operations (in millions) | Metric | Q1 2022 (Successor) | Q1 2021 (Predecessor) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $725 | $689 | +5.2% | | Gross Profit | $223 | $218 | +2.3% | | Operating (Loss) Income | $(2) | $46 | N/A | | Net Loss | $(13) | $(21) | +38.1% | | Interest Expense | $29 | $62 | -53.2% | - BPaaS (Business Process as a Service) revenue, a key growth indicator, reached **$114 million** in Q1 2022, a **23% increase** from the prior year period. BPaaS bookings grew **205%** to **$122 million**[159](index=159&type=chunk) - The increase in Depreciation and Intangible Amortization expense (+$30 million) was primarily driven by amortization of identifiable intangible assets acquired in the Business Combination[162](index=162&type=chunk) [Segment Results](index=36&type=section&id=Segment%20Results) Employer Solutions revenue grew **6.1%** to **$623 million**, while Professional Services declined slightly and Hosted Business improved to breakeven Employer Solutions Segment Results (in millions) | Metric | Q1 2022 (Successor) | Q1 2021 (Predecessor) | | :--- | :--- | :--- | | Total Revenue | $623 | $587 | | Adjusted EBITDA | $142 | $136 | Professional Services Segment Results (in millions) | Metric | Q1 2022 (Successor) | Q1 2021 (Predecessor) | | :--- | :--- | :--- | | Total Revenue | $90 | $92 | | Adjusted EBITDA | $0 | $0 | Hosted Business Segment Results (in millions) | Metric | Q1 2022 (Successor) | Q1 2021 (Predecessor) | | :--- | :--- | :--- | | Total Revenue | $12 | $10 | | Adjusted EBITDA | $0 | $(3) | [Non-GAAP Financial Measures](index=34&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA increased to **$142 million** in Q1 2022, with Adjusted Net Income at **$67 million** and Adjusted Diluted EPS of **$0.12** Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Line Item | Q1 2022 (Successor) | Q1 2021 (Predecessor) | | :--- | :--- | :--- | | Net Loss | $(13) | $(21) | | Interest, Taxes, D&A | $126 | $133 | | EBITDA | $113 | $112 | | Adjustments (Share-based comp, restructuring, etc.) | $29 | $21 | | **Adjusted EBITDA** | **$142** | **$133** | | Capital expenditures | $(41) | $(27) | | **Adjusted EBITDA less Capital Expenditures** | **$101** | **$106** | Adjusted Diluted Earnings Per Share (EPS) | Metric | Q1 2022 | | :--- | :--- | | Adjusted Net Income | $67 million | | Adjusted diluted shares outstanding | 544,196,041 | | **Adjusted Diluted EPS** | **$0.12** | [Liquidity and Financial Condition](index=38&type=section&id=Liquidity%20and%20Financial%20Condition) Liquidity is supported by **$326 million** cash on hand, with net cash from operations decreasing due to working capital needs - As of March 31, 2022, cash and cash equivalents were **$326 million**, a decrease of **$46 million** from December 31, 2021[192](index=192&type=chunk) - Net cash provided by operating activities decreased by **$20 million** year-over-year, primarily due to higher working capital requirements[192](index=192&type=chunk) - The company does not expect to make material payments under the Tax Receivable Agreement (TRA) within the next two years, with more material payments anticipated to begin in 2024[196](index=196&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposures have not materially changed since the last Annual Report on Form 10-K - There have been no material changes in the company's market risk exposures since the last Annual Report[200](index=200&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures are effective[201](index=201&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[203](index=203&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers other information including legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company's financial condition or operations - The company does not expect ongoing legal proceedings to have a material adverse effect on its business[205](index=205&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the risk factors previously disclosed in the Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the company's Annual Report[206](index=206&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered equity sales, no defaults on senior securities, and no applicable mine safety disclosures - Item 2: No unregistered sales of equity securities[206](index=206&type=chunk) - Item 3: No defaults upon senior securities[206](index=206&type=chunk) - Item 4: Mine Safety Disclosures are not applicable[206](index=206&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and SOX certifications - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Sections 302 and 906[208](index=208&type=chunk)

Alight, Inc. (NYSE:ALIT) Q4 2021 Earnings Conference Call February 23, 2022 8:00 AM ET Company Participants Greg Faje - Head, IR Stephan Scholl - CEO Katie Rooney - CFO Conference Call Participants Kevin McVeigh - Credit Suisse Peter Heckmann - D.A. Davidson Scott Schoenhaus - Stephens Operator Good morning and thank you for holding. My name is Daryl and I will be your conference operator today. Welcome to Alight's Fourth Quarter and Full-Year 2021 Earnings Conference Call. At this time, all parties are in ...

Alight, Inc. (NYSE:ALIT) Q3 2021 Earnings Conference Call November 9, 2021 10:30 AM ET Company Participants Greg Faje - Head of IR Stephan Scholl - CEO Katie Rooney - CFO Conference Call Participants Kevin McVeigh - Credit Suisse Peter Heckmann - D.A. Davidson Ramsey El Assal - Barclays Scott Schoenhaus - Stephens Inc. Operator Good morning and thank you for holding. My name is Doug, and I will be your conference operator today. Welcome to Alight’s Third Quarter 2021 Earnings Conference Call. At this time, ...