Alight(US:ALIT)2023-02-28 16:00PART I Business Alight, Inc. provides cloud-based digital human capital and business solutions, focusing on employee wellbeing via its Alight Worklife® platform, with revenue primarily recurring from three segments - Alight provides integrated health, wealth, wellbeing, and payroll solutions via its Alight Worklife® platform, leveraging AI and data analytics for better outcomes15219221 2022 Revenue Contribution by Segment | Segment | 2022 Revenue Contribution | | :------------------ | :------------------------ | | Employer Solutions | 87% | | Professional Services | 12% | | Hosted Business | 1% | - The company's revenue is highly recurring, generated from contracted fees per participant per period, with typical contract terms of three to five years15130 - Alight's technology strategy encompasses an omnichannel customer experience, AI and analytics, core transaction, and infrastructure layers, all secured by a robust framework19 Principal Services and Segments Technology Seasonality Licensing and Regulation Clients Competition Human Capital Management Inclusion and Diversity Total Rewards Growth and Development Intellectual Property Information about our Executive Officers Risk Factors The company faces risks from economic downturns, intense competition, IT system vulnerabilities, regulatory changes, and TRA obligations - Economic downturns, increased inflation, and rising interest rates could adversely affect client business activity and demand for Alight's services1036 - Significant competition from global and national companies, coupled with rapid technological changes, poses a risk to market share and profitability102338 - Reliance on complex IT systems and third-party providers makes the company vulnerable to cyber-attacks, data breaches, and system disruptions, potentially leading to legal liability, reputational harm, and financial loss103942 - Changes in regulations related to health and welfare plans, fiduciary rules, payroll, and data privacy (e.g., HIPAA, GDPR, CCPA) could increase compliance costs and limit business growth104446 - The company's obligations under the Tax Receivable Agreement (TRA) are substantial, and payments could be accelerated or exceed actual tax benefits, potentially impacting liquidity and the value of Class A Common Stock11103105 Risks Related to Our Business and Industry Risks Related to Ownership of our Securities Risks Related to Our Indebtedness Unresolved Staff Comments This section indicates that there are no unresolved staff comments from the SEC - The company has no unresolved staff comments110 Properties Alight's corporate headquarters is in leased office space in Lincolnshire, Illinois, with global leased offices considered adequate - Alight's corporate headquarters is in leased office space in Lincolnshire, Illinois, with the lease expiring on December 31, 2024110 - The company operates globally with leased offices in various locations, including the Americas, Europe, and Asia, and considers its facilities adequate110 Legal Proceedings The company is involved in various legal proceedings, but management believes the outcome will not materially affect its financial condition - Alight is a party to various legal proceedings in the normal course of business111 - Management believes the final outcome of these proceedings will not materially adversely affect the company's results of operations or financial condition111 Mine Safety Disclosures This item is not applicable to Alight, Inc - Mine Safety Disclosures are not applicable to the company111 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Alight's Class A Common Stock trades on NYSE (ALIT); no dividends planned, with an authorized $100 million share repurchase program - Alight's Class A Common Stock trades on the NYSE under the symbol ALIT since July 2, 2021114 - The company does not plan to pay cash dividends in the foreseeable future, intending to retain earnings for business investment98116 - A share repurchase program of up to $100 million was authorized in August 2022; as of December 31, 2022, $88 million remained available116176 Holders of Record as of February 24, 2023 | Class | Number of Holders of Record | | :------------------- | :-------------------------- | | Class A common stock | 76 | | Class B-1 common stock | 98 | | Class B-2 common stock | 98 | | Class V common stock | 5 | | Class Z-A common stock | 58 | | Class Z-B-1 common stock | 58 | | Class Z-B-2 common stock | 58 | Market Information Holders of Record Dividends Sales of Unregistered Securities Issuer Purchases of Equity Securities Performance Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Alight's 2022 revenue grew, but a net loss occurred due to expenses; a 2023 restructuring aims for savings, with strong liquidity despite debt and TRA obligations - Alight's financial results for 2022 are presented as a Successor period, following the Business Combination on July 2, 2021, which impacts comparability with prior periods121125 - A two-year strategic transformation restructuring program was approved in February 2023, expected to incur $140 million in pre-tax charges but yield over $100 million in annual savings post-completion126393 Key Financial Highlights (Successor Year Ended December 31, 2022) | Metric | 2022 (in millions) | | :------------------------------------------------------------------ | :----------------- | | Revenue | $3,132 | | Gross Profit | $996 | | Operating Loss | $(14) | | Net Loss | $(72) | | Adjusted Net Income | $306 | | Adjusted Diluted Earnings Per Share | $0.57 |