ALIT Alight Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 08, 2024

 

 

Alight, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39299	86-1849232
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
4 Overlook Point
Lincolnshire, Illinois				60069
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (224) 737-7000

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share		ALIT		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On May 8, 2024, Alight, Inc. ("Alight" or the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2024. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”) and is incorporated herein by reference.

The information contained in Item 2.02 of this Report, including Exhibit 99.1 hereto, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section and will not be deemed incorporated by reference into any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Chief Financial Officer Transition

 

Katie J. Rooney, who has served as Global Chief Financial Officer and Chief Operating Officer since August 2023 and as Chief Financial Officer of Alight since May 2017, is stepping down from the role of Global Chief Financial Officer as of the end of the day on May 8, 2024 (the “Effective Date”). Ms. Rooney will remain as Chief Operating Officer with Alight and will focus on the Payroll & Professional Services divestiture until the closing of the sale, after which she will step down. Ms. Rooney’s transition from the Chief Financial Officer role does not reflect any disagreement with the Company on any matter relating to the Company’s operations, policies or practices or any issues regarding the Company’s accounting policies or practices.

 

Concurrently with Ms. Rooney’s transition, the Company announced that Jeremy J. Heaton has been appointed as its Chief Financial Officer. Mr. Heaton has served as the Company’s Operating Chief Financial Officer since August 2023, and served as Executive Vice President, Finance from May 2020 through August 2023. Prior to joining Alight, Mr. Heaton spent over 20 years at General Electric in global financial management with a focus in corporate finance, strategic planning, and mergers and acquisitions. From July 2018 to May 2020, Mr. Heaton served as the Transition Leader for GE Healthcare, where he led the sale of the biopharma business for $21 billion. From January 2003 to June 2018, Mr. Heaton served in a number of capacities for GE, including as Chief Financial Officer, Office of the Board from January 2018 to June 2018 and Chief Financial Officer, GE Industrial Finance from January 2016 to December 2017.

 

As of the Effective Date, Mr. Heaton will assume Ms. Rooney’s role as principal financial officer and principal accounting officer of the Company. Mr. Heaton's total target compensation for 2024 will be $2,625,000, consisting of (i) salary of $525,000 per year, (ii) target annual incentive compensation of $525,000, and (iii) target long-term incentive compensation of $1,575,000.

 

Gregory Goff named President

 

On May 8, 2024, the Company announced that Gregory R. Goff has been appointed to the role of President, with continued oversight of product, technology and delivery. Mr. Goff has served as an officer of Alight since May 2020, initially as Chief Product and Technology Officer and more recently as Chief Technology and Delivery Officer. In his role as Chief Technology and Delivery Officer, Mr. Goff has overseen key transformational initiatives including the development of Alight Worklife® and the Company’s ongoing cloud migration project. Mr. Goff has been at Alight since 2020 and has 23 years of experience in the technology industry. Prior to joining Alight, Mr. Goff served as Chief Product Officer of Uptake since 2015. Mr. Goff served as Chief Technology Officer of Morningstar from 2011 through 2015. Prior to that, Mr. Goff served in a number of technology roles at Nielsen and Accenture. Mr. Goff serves on the board of directors of InMoment, a consumer experience provider.

 

Mr. Goff’s total target compensation for 2024 will be $2,625,000, consisting of (i) salary of $525,000 per year, (ii) target annual incentive compensation of $525,000, and (iii) target long-term incentive compensation of $1,575,000.

There are no arrangements or understandings between either of Mr. Goff and Mr. Heaton and any other person pursuant to which either of them are being appointed to the aforementioned positions. There are no family relationships between either of Mr. Goff and Mr. Heaton and any other director or executive officer of the Company, and no transactions involving either of Mr. Goff or Mr. Heaton that would require disclosure under Item 404(a) of Regulation S-K.

A copy of the press release announcing the foregoing management changes is attached as Exhibit 99.2 to this Current Report on Form 8-K.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	First Quarter 2024 Earnings Release of the Company dated May 8, 2024
99.2	Press Release of the Company dated May 8, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			ALIGHT, INC.
Date:	May 8, 2024	By:	/s/ Martin Felli
			Martin Felli, Chief Legal Officer and Corporate Secretary

 

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Alight Reports First Quarter 2024 Results

– Continuing operations BPaaS revenue increased 21% –

– Cash from operations increased by 39% to $100 million –

– $3.1 billion of total company revenue under contract for 2024 –

–Announced agreement to sell Payroll and Professional Services business for up to $1.2 billion, on track for closing mid-year 2024 –

– Announced promotion of Greg Goff to President and Jeremy Heaton to Chief Financial Officer with Katie Rooney focusing on supporting the closure of the Payroll and Professional Services divestiture –

 

 

LINCOLNSHIRE, IL – May 8, 2024 – Alight, Inc. (NYSE: ALIT), a leading cloud-based provider of integrated digital human capital and business solutions, today reported results for the first quarter ended March 31, 2024.

 

“It has been an exciting start to the year for Alight, with the announced agreement to sell our Payroll and Professional Services business and create a world-class partnership with H.I.G. to further accelerate our transformation,” said Chief Executive Officer Stephan Scholl. “As we eagerly await the close of the transaction, we kicked off 2024 with BPaaS revenue growth of 21% from continuing operations, and further expanded our total company revenue under contract to $3.1 billion for 2024. We are also nearing the on-time completion of our cloud migration project, which we expect will deliver improved profitability and cash generation. Taken together, we believe our strategies on both the top and bottom line are positioning Alight for delivering sustainable, profitable growth.”

 

Update on Planned Transaction and Presentation of Results

As announced on March 20, 2024, the Company entered into a definitive agreement to sell its Professional Services segment and its Payroll & HCM Outsourcing businesses (the “Payroll & Professional Services business”). Closing of the transaction is subject to various closing conditions, including regulatory approvals, and is expected by mid-year 2024.

Beginning with the quarter ended March 31, 2024, the Company began accounting for the assets and liabilities of the Payroll & Professional Services business as “held for sale” and its operating results as discontinued operations. As such, the financial information contained in this release is presented on a continuing operations basis, unless otherwise noted. Until closing, the Payroll & Professional Services business will continue to operate as a business of Alight; accordingly, this press release also presents total company results.

 

First Quarter 2024 Continuing Operations Highlights (all comparisons are relative to first quarter 2023)

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First Quarter 2024 Total Company Highlights (all comparisons are relative to first quarter 2023)

 

Continuing Operations First Quarter 2024 Results

Revenue decreased 4.6% to $559 million, as compared to $586 million in the prior year period. Excluding the exited Hosted business, revenue decreased 3.0%. The decrease was driven by lower volumes, net commercial activity and project revenue within our Employer Solutions segment and the wind-down of our Hosted business operations. Recurring revenues were 93.2% of total revenue, compared to 92.7% in the prior year.

Gross profit was $182 million, or 32.6% of revenue, compared to $187 million, or 31.9% of revenue in the prior year period. The decrease in gross profit was primarily driven by lower revenue as noted above partially offset by productivity savings.

Selling, general and administrative expenses were $146 million, compared to $151 million in the prior year period. The decrease was driven by lower compensation expenses primarily related to share-based awards and lower costs incurred from our previously announced restructuring program, partially offset by professional fees related to the planned sale of our Payroll & Professional Services business.

Interest expense was $31 million as compared to $33 million in the prior year period. The decrease was primarily due to increased hedging activity at favorable market rates, the opportunistic repricing of our 2028 term loan, and higher interest income.

The Company’s loss from continuing operations before income tax benefit was $148 million compared to loss from continuing operations before income tax benefit of $107 million in the prior year period. The change was primarily due to the non-operating fair value remeasurements of financial instruments and the tax receivable agreement.

 

Total Company First Quarter 2024 Results

Revenue decreased 1.8% to $816 million, as compared to $831 million in the prior year period. Excluding the exited Hosted business, revenue decreased 0.6%. The decrease was driven by lower volumes, net commercial activity and project revenue, and the wind-down of our Hosted business operations. Recurring revenues were 86.4% of total revenue, compared to 85.7% in the prior year.

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Gross profit was $249 million, or 30.5% of revenue, compared to $257 million, or 30.9% of revenue in the prior year period. The decrease in gross profit was primarily driven by lower revenue as noted above partially offset by productivity savings.

Selling, general and administrative expenses were $183 million, compared to $185 million in the prior year period. The decrease was driven by lower compensation expenses primarily related to share-based awards and lower costs incurred from our previously announced restructuring program, partially offset by professional fees related to the planned sale of our Payroll & Professional Services business.

 

Total Company Balance Sheet Highlights

 

As of March 31, 2024, the Company’s cash and cash equivalents balance was $286 million, total debt was $2,787 million and total debt net of cash and cash equivalents was $2,501 million. $30 million of the cash and cash equivalents are held in current assets held for sale.

 

Business Outlook

 

The Company is reaffirming its mid-term outlook. The Company expects to update its full-year 2024 financial guidance after closing the Payroll & Professional Services business transaction.

 

Management Update

 

In addition to highlighting its first quarter results, in a separate press release, the Company also announced that Jeremy Heaton, previously Operating Chief Financial Officer, will assume the role of Chief Financial Officer, effective as of May 8, 2024, from Katie Rooney, who has served in that capacity since May 2017. Ms. Rooney will continue to serve as Chief Operating Officer through the anticipated closing of the Payroll & Professional Services transaction. Additionally, Greg Goff, currently Chief Technology and Delivery Officer, will assume the role of President, effective as of May 8, 2024.

 

Earnings Conference Call and Webcast Information

 

A conference call to discuss the Company’s first quarter 2024 financial results is scheduled for today, May 8, 2024 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). Interested parties can access the live webcast and accompanying presentation materials by logging on to the Investor Relations section on the Company’s website at http://investor.alight.com. A replay of the conference call and the accompanying presentation materials will be available on the investor relations website for approximately 90 days.

About Alight Solutions

Alight is a leading cloud-based human capital technology and services provider that powers confident health, wealth and wellbeing decisions for 36 million people and dependents. Our Alight Worklife® platform combines data and analytics with a simple, seamless user experience. Supported by our global delivery capabilities, Alight Worklife is transforming the employee experience for people around the world. With personalized, data-driven health, wealth, pay and wellbeing insights, Alight brings people the security of better outcomes and peace of mind throughout life’s big moments and most important decisions. Learn how Alight unlocks growth for organizations of all sizes at alight.com.

For more information, please visit www.alight.com.

 

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Contacts

Investors:

Jeremy Cohen

investor.relations@alight.com

 

Media:

Mariana Fischbach

mariana.fischbach@alight.com

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements regarding the sale of our Payroll & Professional Services business, including the likelihood of the consummation of the transaction, the expected time period to consummate the transaction, and the anticipated benefits of the transaction (including the achievement of our financial objectives), statements related to our cloud migration project and its expected impact, statements related to our expected revenue under contract and statements related to the expectations regarding the performance and outlook for Alight’s business, financial results, liquidity and capital resources. In some cases, these forward-looking statements can be identified by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks related to declines in economic activity in the industries, markets, and regions our clients serve, including as a result of elevated interest rates or changes in monetary and fiscal policies, competition in our industry, risks related to our ability to consummate the agreement to sell our Payroll and Professional Services business, risks related to the performance of our information technology systems and networks, risks related to our ability to maintain the security and privacy of confidential and proprietary information, risks related to actions or proposals from activist stockholders, risks related to the ability to meet the contingent payment conditions of the seller note, and risks related to changes in regulation, including developments on the use of artificial intelligence and machine learning. Additional factors that could cause Alight’s results to differ materially from those described in the forward-looking statements can be found under the section entitled “Risk Factors” of Alight’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on February 29, 2024, as such factors may be updated from time to time in Alight's filings with the SEC, which are, or will be, accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be considered along with other factors noted in this presentation and in Alight’s filings with the SEC. Alight undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Non-GAAP Financial Measures and Other Information

 

This press release includes supplemental information presenting the results of our operations on a total company basis that includes the Payroll & Professional Services business. This presentation is not considered to be prepared in accordance with GAAP. However, as the Payroll & Professional Services business will continue to operate as a business of Alight until the closing of the transaction, we believe the total company results provide a meaningful basis of comparison and are useful in identifying current business trends for the periods presented.

 

The Company also refers to certain non-GAAP financial measures in this press release, including: Adjusted EBITDA From Continuing Operations, Adjusted EBITDA Margin From Continuing Operations, Adjusted Net

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Income From Continuing Operations, Adjusted Diluted Earnings Per Share From Continuing Operations, Operating Cash Flow Conversion, Adjusted Gross Profit and Adjusted Gross Profit Margin. Please see below for additional information and for reconciliations of such non-GAAP financial measures. The presentation of non-GAAP financial measures is used to enhance our investors’ and lenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

 

Adjusted EBITDA From Continuing Operations, which is defined as earnings from continuing operations before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance. Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations divided by revenue. Both Adjusted EBITDA From Continuing Operations and Adjusted EBITDA Margin From Continuing Operations are non-GAAP financial measures used by management and our stakeholders to provide useful supplemental information that enables a better comparison of our performance across periods as well as to evaluate our core operating performance.

 

Adjusted Net Income From Continuing Operations, which is defined as net income (loss) from continuing operations adjusted for intangible amortization and the impact of certain non-cash items that we do not consider in the evaluation of ongoing operational performance, is a non-GAAP financial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations.

 

Adjusted Diluted Earnings Per Share From Continuing Operations is defined as Adjusted Net Income From Continuing Operations divided by the adjusted weighted-average number of shares of Alight Inc. common stock, diluted. Adjusted Diluted Earnings Per Share From Continuing Operations is used by us and our investors to evaluate our core operating performance and to benchmark our operating performance against our competitors.

 

Operating Cash Flow Conversion is defined as cash provided by operating activities divided by Adjusted EBITDA. Operating Cash Flow Conversion is used by management and stakeholders to evaluate our core operating performance.

 

Adjusted Gross Profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation, and Adjusted Gross Profit Margin is defined as Adjusted Gross Profit divided by revenue. Management uses Adjusted Gross Profit and Adjusted Gross Profit Margin as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting Adjusted Gross Profit and Adjusted Gross Profit Margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.

 

Revenue Under Contract is an operational metric that represents management’s estimate of anticipated revenue expected to be recognized in the period referenced based on available information that includes historical client contracting practices. The metric does not reflect potential future events such as unexpected client volume fluctuations, early contract terminations or early contract renewals. Our metric may differ from similar terms used by other companies and therefore comparability may be limited.

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Condensed Consolidated Statements of Income (Loss)

(Unaudited)

		Three Months Ended March 31,
(in millions, except per share amounts)		2024						2023
Revenue		$		559			$		586
Cost of services, exclusive of depreciation and amortization				356					382
Depreciation and amortization				21					17
Gross Profit				182					187
Operating Expenses
Selling, general and administrative				146					151
Depreciation and intangible amortization				76					76
Total Operating expenses				222					227
Operating Income (Loss) From Continuing Operations				(40	)				(40	)
Other (Income) Expense
(Gain) Loss from change in fair value of financial instruments				21					25
(Gain) Loss from change in fair value of tax receivable agreement				55					8
Interest expense				31					33
Other (income) expense, net				1					1
Total other (income) expense, net				108					67
Income (Loss) From Continuing Operations Before Taxes				(148	)				(107	)
Income tax expense (benefit)				(27	)				(23	)
Net Income (Loss) From Continuing Operations				(121	)				(84	)
Net Income (Loss) From Discontinued Operations, Net of Tax				5					10
Net Income (Loss)				(116	)				(74	)
Net income (loss) attributable to noncontrolling interests				(2	)				(6	)
Net Income (Loss) Attributable to Alight, Inc.		$		(114	)		$		(68	)
Earnings Per Share
Basic and Diluted
Continuing operations		$		(0.22	)		$		(0.16	)
Discontinued operations		$		0.01			$		0.02
Net Income (Loss)		$		(0.21	)		$		(0.14	)

 

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Condensed Consolidated Balance Sheets

(Unaudited)

		March 31,				December 31,
		2024				2023
(in millions, except par values)
Assets
Current Assets
Cash and cash equivalents		$		256		$		324
Receivables, net				393				435
Other current assets				217				260
Fiduciary assets				250				234
Current assets held for sale				2,501				1,523
Total Current Assets				3,617				2,776
Goodwill				3,212				3,212
Intangible assets, net				3,066				3,136
Fixed assets, net				387				331
Deferred tax assets, net				86				38
Other assets				346				341
Long-term assets held for sale				—				948
Total Assets		$		10,714		$		10,782
Liabilities and Stockholders' Equity
Liabilities
Current Liabilities
Accounts payable and accrued liabilities		$		278		$		325
Current portion of long-term debt, net				25				25
Other current liabilities				282				233
Fiduciary liabilities				250				234
Current liabilities held for sale				1,475				1,370
Total Current Liabilities				2,310				2,187
Deferred tax liabilities				32				32
Long-term debt, net				2,762				2,769
Long-term tax receivable agreement				784				733
Financial instruments				132				109
Other liabilities				166				142
Long-term liabilities held for sale				—				68
Total Liabilities		$		6,186		$		6,040
Commitments and Contingencies
Stockholders' Equity
Preferred stock at $0.0001 par value: 1.0 shares authorized, none issued and outstanding		$		—		$		—
Class A Common Stock: $0.0001 par value, 1,000.0 shares authorized; 550.0 and 510.9 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively				—				—
Class B Common Stock: $0.0001 par value, 20.0 shares authorized; 9.9 and 9.9 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively				—				—
Class V Common Stock: $0.0001 par value, 175.0 shares authorized; 1.2 and 29.0 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively				—				—
Class Z Common Stock: $0.0001 par value, 12.9 shares authorized; 0.6 and 3.4 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively				—				—
Treasury stock, at cost (6.4 and 6.4 shares at March 31, 2024 and December 31, 2023, respectively)				(52	)			(52	)
Additional paid-in-capital				5,113				4,946
Retained deficit				(617	)			(503	)
Accumulated other comprehensive income				75				71
Total Alight, Inc. Stockholders' Equity		$		4,519		$		4,462
Noncontrolling interest				9				280
Total Stockholders' Equity		$		4,528		$		4,742
Total Liabilities and Stockholders' Equity		$		10,714		$		10,782

 

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Condensed Consolidated Statements of Cash Flows

(Unaudited)

		Three Months Ended March 31,
(in millions)		2024					2023
Operating activities:
Net income (loss)		$		(116	)		$		(74	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation				29					24
Intangible asset amortization				80					80
Noncash lease expense				5					6
Financing fee and premium amortization				(1	)				(1	)
Share-based compensation expense				28					37
(Gain) loss from change in fair value of financial instruments				21					25
(Gain) loss from change in fair value of tax receivable agreement				55					8
Release of unrecognized tax provision				—					(1	)
Deferred tax expense (benefit)				(30	)				(7	)
Other				—					1
Changes in operating assets and liabilities:
Accounts receivable				48					40
Accounts payable and accrued liabilities				(63	)				(117	)
Other assets and liabilities				44					51
Cash provided by operating activities		$		100			$		72
Investing activities:
Capital expenditures				(36	)				(45	)
Cash used in investing activities		$		(36	)		$		(45	)
Financing activities:
Net increase (decrease) in fiduciary liabilities				60					(121	)
Repayments to banks				(6	)				(6	)
Principal payments on finance lease obligations				(9	)				(7	)
Payments on tax receivable agreements				(62	)				(7	)
Tax payment for shares/units withheld in lieu of taxes				(57	)				(6	)
Deferred and contingent consideration payments				—					(3	)
Repurchase of shares				—					(10	)
Cash used in financing activities		$		(74	)		$		(160	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash				(2	)				—
Net increase (decrease) in cash, cash equivalents and restricted cash				(12	)				(133	)
Cash, cash equivalents and restricted cash at beginning of period(a)				1,759					1,759
Cash, cash equivalents and restricted cash at end of period(a)		$		1,747			$		1,626

 

(a) The cash flows related to discontinued operations have not been separated, and are included in the Consolidated Statements of Cash Flows. The Cash and cash equivalents and Restricted cash included in fiduciary assets amounts presented above differ from the Consolidated Balance Sheets due to cash and fiduciary assets included in Current assets held for sale.

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Reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA from Continuing Operations

(Unaudited)

 

			Three Months Ended March 31,
(in millions)			2024					2023
Net Income (Loss) From Continuing Operations (1)		$		(121	)		$		(84	)
Interest expense				31					33
Income tax expense (benefit)				(27	)				(23	)
Depreciation				26					22
Intangible amortization				71					71
EBITDA From Continuing Operations				(20	)				19
Share-based compensation				28					34
Transaction and integration expenses(2)				17					2
Restructuring				15					23
(Gain) Loss from change in fair value of financial instruments				21					25
(Gain) Loss from change in fair value of tax receivable agreement				55					8
Other				—					1
Adjusted EBITDA From Continuing Operations		$		116			$		112
Revenue		$		559			$		586
Adjusted EBITDA Margin From Continuing Operations (3)				20.8	%				19.1	%
(1) Adjusted EBITDA excludes the impact of discontinued operations. Comparable periods have been recast to exclude these impacts.
(2) Transaction and integration expenses primarily relate to acquisition and divestiture activities.
(3) Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA from Continuing Operations as a percentage of revenue.

 

Reconciliation of Net Income (Loss) From Continuing Operations to Adjusted Net Income and Adjusted Diluted Earnings per Share From Continuing Operations

(Unaudited)

 

		Three Months Ended March 31,
			2024				2023
(in millions, except share and per share amounts)
Numerator:
Net Income (Loss) From Continuing Operations Attributable to Alight, Inc. (1)		$		(119	)	$		(78	)
Conversion of noncontrolling interest				(2	)			(6	)
Intangible amortization				71				71
Share-based compensation				28				34
Transaction and integration expenses (2)				17				2
Restructuring				15				23
(Gain) Loss from change in fair value of financial instruments				21				25
(Gain) Loss from change in fair value of tax receivable agreement				55				8
Other				—				1
Tax effect of adjustments (3)				(29	)			(29	)
Adjusted Net Income From Continuing Operations		$		57		$		51
Denominator:
Weighted average shares outstanding - basic				540,780,315				476,145,761
Dilutive effect of the exchange of noncontrolling interest units				1,189,156				—
Weighted average shares outstanding - diluted				541,969,471				476,145,761
Exchange of noncontrolling interest units(4)				4,471,277				57,966,505
Impact of unvested RSUs(5)				10,158,541				10,412,840
Adjusted shares of Class A Common Stock outstanding - diluted(6)(7)				556,599,289				544,525,106
Basic (Net Loss) Earnings Per Share From Continuing Operations		$		(0.22	)	$		(0.16	)
Diluted (Net Loss) Earnings Per Share From Continuing Operations		$		(0.22	)	$		(0.16	)
Adjusted Diluted Earnings Per Share From Continuing Operations		$		0.10		$		0.09

 

(1) Adjusted EBITDA excludes the impact of discontinued operations. Comparable periods have been recast to exclude these impacts.

(2) Transaction and integration expenses primarily relate to acquisition and divestiture activities.

(3) Income tax effects have been calculated based on the statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix of income and adjusted for significant changes in fair value measurement.

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(4) Assumes the full exchange of the units held by noncontrolling interests for shares of Class A Common Stock of Alight, Inc. pursuant to the exchange agreement.

(5) Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes.

(6) Excludes two tranches of contingently issuable seller earnout shares: (i) 7.5 million shares will be issued if the Company's Class A Common Stock's volume-weighted average price ("VWAP") is >$12.50 for any 20 trading days within a consecutive period of 30 trading days; (ii) 7.5 million shares will be issued if the Company's Class A Common Stock VWAP is >$15.00 for any 20 trading days within a consecutive period of 30 trading days. Both tranches have a seven-year duration.

(7) Excludes approximately 14.4 million and 31.0 million performance-based units, which represents the gross number of shares expected to vest based on achievement of performance conditions as of March 31, 2024 and 2023, respectively.

 

 

 

Reconciliation of Segment Profit to Income (Loss) From Continuing Operations Before Taxes

(Unaudited)

		Segment Profit
			Three Months Ended March 31,
(in millions)			2024					2023
Employer Solutions		$		182			$		187
Other				-					-
Total Gross Profit				182					187
Selling, general and administrative				146					151
Depreciation and intangible amortization				76					76
Operating Income (Loss) From Continuing Operations				(40	)				(40	)
(Gain) Loss from change in fair value of financial instruments				21					25
(Gain) Loss from change in fair value of tax receivable agreement				55					8
Interest expense				31					33
Other (income) expense, net				1					1
Income (Loss) From Continuing Operations Before Taxes		$		(148	)		$		(107	)

 

 

Gross Profit to Adjusted Gross Profit Reconciliation by Segment

(Unaudited)

		Three Months Ended March 31, 2024
($ in millions)		Employer Solutions			Other			Total
Gross Profit		$	182		$	-		$	182
Add: stock-based compensation			5			-			5
Add: depreciation and amortization			21			-			21
Adjusted Gross Profit		$	208		$	-		$	208
Gross Profit Margin			32.6	%		0.0	%		32.6	%
Adjusted Gross Profit Margin			37.2	%		0.0	%		37.2	%
		Three Months Ended March 31, 2023
($ in millions)		Employer Solutions			Other			Total
Gross Profit		$	187		$	-		$	187
Add: stock-based compensation			7			-			7
Add: depreciation and amortization			16			1			17
Adjusted Gross Profit		$	210		$	1		$	211
Gross Profit Margin			32.5	%		0.0	%		31.9	%
Adjusted Gross Profit Margin			36.5	%		10.0	%		36.0	%

 

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Other Select Financial Data

(Unaudited)

($ in millions)			Three Months Ended March 31,
Segment Revenues			2024				2023
Employer Solutions:
Recurring			$	521			$	533
Project				38				43
Total Employer Solutions				559				576
Other (1)				-				10
Total revenue			$	559			$	586
Segment Gross Profit
Employer Solutions			$	182			$	187
Other (1)				-				-
Total gross profit			$	182			$	187
Segment Gross Margin
Employer Solutions				32.6	%			32.5	%
Other (1)				0.0	%			0.0	%
Total gross margin				32.6	%			31.9	%
Segment Adjusted Gross Profit
Employer Solutions			$	208			$	210
Other (1)				-				1
Total adjusted gross profit			$	208			$	211
Segment Adjusted Gross Margin Percent
Employer Solutions				37.2	%			36.5	%
Other (1)				0.0	%			10.0	%
Total adjusted gross margin percent				37.2	%			36.0	%
Adjusted EBITDA From Continuing Operations			$	116			$	112
Cash provided by operating activities			$	100			$	72
Other Key Statistics
Recurring revenue, Ex. Other			$	521			$	533
BPaaS revenue			$	117			$	97
BPaaS revenue as % of total revenue				20.9	%			16.6	%

 

(1) Other primarily attributable to the former Hosted Segment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Supplemental Financial Information

(Continuing Operations and Discontinued Operations)

 

Alight, Inc. Condensed Consolidated Statements of Income (Loss)

(Unaudited)

	Three Months Ended March 31
(in millions, except per share amounts)	2024						2023
Revenue	$		816			$		831
Cost of services, exclusive of depreciation and amortization			543					555
Depreciation and amortization			24					19
Gross Profit			249					257
Operating Expenses
Selling, general and administrative			183					185
Depreciation and intangible amortization			85					85
Total operating expenses			268					270
Operating Income (Loss)			(19	)				(13	)
Other (Income) Expense
(Gain) Loss from change in fair value of financial instruments			21					25
(Gain) Loss from change in fair value of tax receivable agreement			55					8
Interest expense			31					33
Other (income) expense, net			2					3
Total other (income) expense, net			109					69
Income (Loss) Before Income Tax			(128	)				(82	)
Income tax expense (benefit)			(12	)				(8	)
Net Income (Loss)			(116	)				(74	)
Net loss attributable to noncontrolling interests			(2	)				(6	)
Net (Loss) Income Attributable to Alight, Inc.	$		(114	)		$		(68	)
Earnings Per Share
Basic (net loss) earnings per share	$		(0.21	)		$		(0.14	)
Diluted (net loss) earnings per share	$		(0.21	)		$		(0.14	)

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Unaudited)

		Consolidated				Discontinued				Continuing					Consolidated				Discontinued				Continuing
		Alight				Operations				Operations					Alight				Operations				Operations
		Q1				Q1				Q1					Q1				Q1				Q1
(in millions)		2024				2024				2024					2023				2023				2023
Net Income (Loss)	$		(116	)	$		5		$		(121	)		$		(74	)	$		10		$		(84	)
Interest expense			31				-				31					33				-				33
Income tax expense (benefit)			(12	)			15				(27	)				(8	)			15				(23	)
Depreciation			29				3				26					24				2				22
Intangible amortization			80				9				71					80				9				71
EBITDA	$		12		$		32		$		(20	)		$		55		$		36		$		19
Share-based compensation			28				-				28					37				3				34
Transaction and integration expenses(1)			17				-				17					2				-				2
Restructuring			17				2				15					26				3				23
(Gain) Loss from change in fair value of financial instruments			21				-				21					25				-				25
(Gain) Loss from change in fair value of tax receivable agreement			55				-				55					8				-				8
Other			-				-				-					1				-				1
Adjusted EBITDA	$		150		$		34		$		116			$		154		$		42		$		112
Revenue	$		816		$		257		$		559			$		831		$		245		$		586
Adjusted EBITDA Margin (2)			18.4	%			13.2	%			20.8	%				18.5	%			17.1	%			19.1	%

(1) Transaction and integration expenses primarily relate to acquisition and divestiture activities.

(2) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of revenue.

 

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Reconciliation of Net Income (Loss) to Adjusted Net Income and Adjusted Diluted Earnings per Share (Unaudited)

	Consolidated			Discontinued			Continuing				Consolidated			Discontinued			Continuing
	Alight			Operations			Operations				Alight			Operations			Operations
	Q1			Q1			Q1				Q1			Q1			Q1
	2024			2024			2024				2023			2023			2023
(in millions, except share and per share amounts)
Numerator:
Net (Loss) Income Attributable to Alight, Inc.	$	(114	)	$	5		$	(119	)		$	(68	)	$	10		$	(78	)
Conversion of noncontrolling interest		(2	)		-			(2	)			(6	)		-			(6	)
Intangible amortization		80			9			71				80			9			71
Share-based compensation		28			-			28				37			3			34
Transaction and integration expenses (1)		17			-			17				2			-			2
Restructuring		17			2			15				26			3			23
(Gain) Loss from change in fair value of financial instruments		21			-			21				25			-			25
(Gain) Loss from change in fair value of tax receivable agreement		55			-			55				8			-			8
Other		-			-			-				1			-			1
Tax effect of adjustments(2)		(32	)		(3	)		(29	)			(33	)		(4	)		(29	)
Adjusted Net Income	$	70		$	13		$	57			$	72		$	21		$	51
Denominator:
Weighted average shares outstanding - basic		540,780,315										476,145,761
Dilutive effect of the exchange of noncontrolling interest units		1,189,156										—
Weighted average shares outstanding - diluted		541,969,471										476,145,761
Exchange of noncontrolling interest units(3)		4,471,277										57,966,505
Impact of unvested RSUs(4)		10,158,541										10,412,840
Adjusted shares of Class A Common Stock outstanding - diluted(5)(6)		556,599,289										544,525,106
Basic (Net Loss) Earnings Per Share	$	(0.21	)	$	0.01		$	(0.22	)		$	(0.14	)	$	0.02		$	(0.16	)
Diluted (Net Loss) Earnings Per Share	$	(0.21	)	$	0.01		$	(0.22	)		$	(0.14	)	$	0.02		$	(0.16	)
Adjusted Diluted Earnings Per Share	$	0.13		$	0.03		$	0.10			$	0.13		$	0.04		$	0.09

 

(1) Transaction and integration expenses primarily relate to acquisition and divestiture activities.

(2) Income tax effects have been calculated based on the statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix of income and adjusted for significant changes in fair value measurement.

(3) Assumes the full exchange of the units held by noncontrolling interests for shares of Class A Common Stock of Alight, Inc. pursuant to the exchange agreement.

(4) Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes.

(5) Excludes two tranches of contingently issuable seller earnout shares: (i) 7.5 million shares will be issued if the Company's Class A Common Stock's volume-weighted average price ("VWAP") is >$12.50 for any 20 trading days within a consecutive period of 30 trading days; (ii) 7.5 million shares will be issued if the Company's Class A Common Stock VWAP is >$15.00 for any 20 trading days within a consecutive period of 30 trading days. Both tranches have a seven-year duration.

(6) Excludes approximately 14.4 million and 31.0 million performance-based units, which represents the gross number of shares expected to vest based on achievement of performance conditions as of March 31, 2024 and 2023, respectively.

 

 

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Gross Profit to Adjusted Gross Profit Reconciliation

(Unaudited)

 

($ in millions)		Three Months Ended March 31, 2024
Gross Profit		$	249
Add: stock-based compensation			5
Add: depreciation and amortization			24
Adjusted Gross Profit		$	278
Gross Profit Margin			30.5	%
Adjusted Gross Profit Margin			34.1	%
($ in millions)		Three Months Ended March 31, 2023
Gross Profit		$	257
Add: stock-based compensation			9
Add: depreciation and amortization			19
Adjusted Gross Profit		$	285
Gross Profit Margin			30.9	%
Adjusted Gross Profit Margin			34.3	%

 

 

Total Company Revenue Disaggregation

(Unaudited)

 

			Three Months Ended March 31,
($ in millions)			2024				2023
Employer Solutions:
Recurring			$	521			$	533
Project				38				43
Total Employer Solutions				559				576
Revenue from Discontinued Operations				257				245
Total Revenue, excluding Hosted				816				821
Other (1)				-				10
Total Alight Revenue			$	816			$	831

 

(1) Other primarily attributable to the formed Hosted segment.

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Alight Announces Executive Leadership Changes

— Jeremy Heaton promoted to Chief Financial Officer while Katie Rooney focuses on supporting the closure of the Payroll and Professional Services divestiture —

— Greg Goff promoted to President —

Lincolnshire, Ill., May 8, 2024—Alight (NYSE: ALIT or the “Company”) today announced two leadership promotions as part of the Company’s ongoing transformation. Jeremy Heaton, who has been with the Company for four years most recently serving as Operating Chief Financial Officer, will assume the role of Chief Financial Officer, effective today. Mr. Heaton brings more than two decades of financial experience, including more than 20 years at GE in global financial management. Katie Rooney will step down from her position as Global Chief Financial Officer after over 15 years of distinguished service with the Company, and will continue in her role as Chief Operating Officer supporting the Payroll & Professional Services divestiture until close of the transaction anticipated to be mid-year 2024, after which she will step down.

Also today, Greg Goff, most recently serving as Alight’s Chief Technology and Delivery Officer, will assume the role of President, with continued oversight of product, technology and delivery. In his role as Chief Technology and Delivery Officer, Goff has overseen key transformational initiatives including the development of Alight Worklife® and the Company’s ongoing cloud migration project. Mr. Goff has been with Alight since 2020 and has 23 years of experience in the technology industry.

“Today’s announcement is a celebration of three pillars of the Alight leadership team, and is the result of thoughtful, long-term planning that coincides with the Company’s transformation toward a more simplified and focused platform company,” said Stephan Scholl, CEO of Alight. “We are pleased to promote Jeremy, who has been partnering closely with Katie for natural succession into the role after Katie was promoted into the COO role nine months ago. His track record of excellence and deep understanding of Alight’s business, financial function, and investor community uniquely position him to guide our financial team as he has already been doing in his previous capacity for the past nine months.

Jeremy and team are well-positioned as a result of Katie’s vision and leadership. She has been instrumental in steering our finance team and overall firm direction both before and after our public listing. On behalf of our 18,000 employees, our entire executive leadership team thanks Katie for her steadfast dedication to the Company, its people and its clients and we look forward to her ongoing contributions in support of the closure of the Payroll & Professional Services divestiture.

We are also pleased to announce Greg’s promotion to President, reflecting his remarkable contributions to our technology transformation and the valued perspective he will bring to his new role. Overseeing product and delivery, Greg has been at the forefront of articulating our outcomes-based approach to clients and in his new role, he will have an even greater opportunity to engage with a broader set of key stakeholders. His passion and expertise with artificial intelligence, analytics, platform innovation and client centricity will benefit us greatly in our journey forward.”

About Alight Solutions

Alight is a leading cloud-based human capital technology and services provider that powers confident health, wealth, and wellbeing decisions for 36 million people and dependents. Our Alight Worklife® platform combines data and analytics with a simple, seamless user experience. Supported by our global delivery capabilities, Alight Worklife is transforming the employee experience for people around the world. With personalized, data-driven health, wealth, pay and wellbeing insights, Alight brings people the security of better outcomes and peace of mind throughout life’s big moments and most important decisions. Learn how Alight unlocks growth for organizations of all sizes at alight.com.

Investor Contact:

Jeremy Cohen

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Investor.Relations@alight.com

Media Contacts:

Mariana Fischbach

mariana.fischbach@alight.com

 

 

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v3.24.1.u1

Document And Entity Information	May 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 08, 2024
Entity Registrant Name	Alight, Inc. / Delaware
Entity Central Index Key	0001809104
Entity Emerging Growth Company	false
Entity File Number	001-39299
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1849232
Entity Address, Address Line One	4 Overlook Point
Entity Address, City or Town	Lincolnshire
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60069
City Area Code	(224)
Local Phone Number	737-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	ALIT
Security Exchange Name	NYSE

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