– Announces CEO succession plan –
– Continuing operations BPaaS revenue
increased 13% –
– 97% of 2024 Revenue Under Contract
–
– Key wins with UPS, Wayfair, American Honda
Motor Company & The Adecco Group –
– Completed cloud migration program and
fully decommissioned data center –
– Repurchased $80 million of common stock
–
Alight, Inc. (NYSE: ALIT), a leading cloud-based provider of
integrated digital human capital and business solutions, today
reported results for the second quarter ended June 30, 2024.
“Alight is entering its next chapter following the
accomplishment of several key strategic milestones including its
recent divestiture,” said CEO Stephan Scholl. “As a simplified and
focused wellbeing & benefits company, we have accelerated our
financial profile, underscored by the immediate margin expansion
and future earnings power. As I look to what is next for Alight, we
are well-positioned to navigate a dynamic environment with
tremendous long-standing relationships, world class services &
technology, and highly impressive colleagues to serve our thousands
of clients.”
CEO Succession Plan
In line with the closing of the Payroll & Professional
Services sale, the Company announced that Stephan Scholl will step
down as CEO and member of the Board, effective after the Board
names a successor. Scholl will continue as CEO and Director during
the search process. In addition, the Board has appointed Dave
Guilmette, an independent Director, as Vice Chair of the Board. In
this role, he will work closely with Scholl to ensure a smooth
transition.
Chair of the Board William P. Foley, II, said, “On behalf of the
entire Board, I want to thank Stephan for his commitment and
vision. He has made a meaningful impact as our CEO, bringing the
company public amidst the challenging COVID environment, and
overseeing our path in developing the Alight Worklife® platform for
employee wellbeing and benefits. With the divestiture behind us we
are well positioned to deliver differentiated benefit services to
our clients and profitable growth with significant margin and cash
flow expansion for our shareholders. Stephan’s continued efforts
and support through this transitionary period will help our next
CEO hit the ground running with a substantially improved financial
and operating model.”
Foley continued, “The Board has for months been actively
planning for CEO succession and with the divestiture now closed, we
look forward to bringing in a new leader to guide Alight in its
exciting next chapter."
Presentation of Results
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. The Payroll
& Professional Services business transaction closed subsequent
to the end of the second quarter and accordingly, this press
release also presents total company results.
Second Quarter 2024 Continuing Operations Highlights (all
comparisons are relative to second quarter 2023)
- Revenue decreased 4.1% to $538 million
- Business Process as a Service (BPaaS) revenue grew 12.7% to
$115 million, representing 21.4% of total revenue
- Gross profit of $167 million and gross profit margin of 31.0%,
compared to $187 million and 33.3% in the prior year period,
respectively, and adjusted gross profit of $196 million and
adjusted gross profit margin of 36.4%, compared to $212 million and
37.8%, in the prior year period, respectively
- Net loss of $4 million compared to the prior year period net
loss of $72 million primarily driven by non-operating fair value
remeasurements of financial instruments and the tax receivable
agreement
- Adjusted EBITDA of $105 million compared to the prior year
period of $119 million
- Diluted earnings (loss) per share of $(0.01) compared to
$(0.14) in the prior year period, and adjusted diluted earnings per
share of $0.05 compared to $0.11 per share in the prior year
period
- New wins, including new logos or expanded relationships with
companies including UPS, Wayfair, American Honda Motor Company and
The Adecco Group
- Repurchased $80 million of common stock under existing share
repurchase program
Continuing Operations Second Quarter 2024 Results
Revenue decreased 4.1% to $538 million, as compared to $561
million in the prior year period. Excluding the exited Hosted
business, revenue decreased 2.5%. 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 91.6% of total revenue.
Gross profit was $167 million, or 31.0% of revenue, compared to
$187 million, or 33.3% of revenue in the prior year period. The
decrease in gross profit was primarily driven by lower revenue as
noted above, and partially offset by productivity savings.
Selling, general and administrative expenses decreased $3
million when compared to the prior year period. This 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
incurred related to the sale of our Payroll & Professional
Services business.
Interest expense of $33 million was flat from the prior year
period. Interest expense benefited from the opportunistic repricing
of our 2028 term loan and higher interest income and was offset by
lower swap payments.
The Company’s loss from continuing operations before income tax
expense was $2 million compared to loss from continuing operations
before income tax benefit of $80 million in the prior year period.
The improvement was primarily due to the non-operating fair value
remeasurements of financial instruments and the tax receivable
agreement.
Balance Sheet Highlights
As of June 30, 2024, the Company’s cash and cash equivalents
balance was $183 million, total debt was $2,780 million and total
debt net of cash and cash equivalents was $2,597 million.
During the quarter, the Company completed a repricing of its
2028 term loan that decreased its interest rate by 50 basis points
for $10 million of anticipated annualized interest expense savings
following the Company's deleveraging in July 2024.
Subsequent Events
On July 12, 2024, the Company announced that it completed the
sale of its Payroll and Professional Services business.
On July 15, 2024, the Company commenced its $75 million
accelerated share repurchase agreement with final settlement
expected in the third quarter of 2024.
Following the repayment of $740 million of debt during July
2024, the interest rates on the Company’s debt are 100% fixed
through 2024 and 70% through 2025.
Second Half 2024 Business Outlook
For the second half of 2024, we expect:
- Revenue of $1.207 billion to $1.232 billion.
- BPaaS Revenue of $265 to $275 million.
- Adjusted EBITDA of $326 million to $351 million.
- Adjusted EBITDA margin range of 26.5% to 29.1%.
- Adjusted diluted EPS of $0.31 to $0.36.
- Operating Cash Flow Conversion rate of 55-65%.
Reconciliations of the historical financial measures used in
this press release that are not recognized under U.S. generally
accepted accounting principles ("GAAP") are included below. Because
GAAP financial measures on a forward-looking basis are not
accessible, and reconciling information is not available without
unreasonable effort, we have not provided reconciliations for
forward-looking non-GAAP measures. For the same reasons, we are
unable to address the probable significance of the unavailable
information, which could be material to future results.
Earnings Conference Call and Webcast Information
A conference call to discuss the Company’s second quarter 2024
financial results is scheduled for today, August 6, 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 for many of the world’s largest organizations.
Through the administration of employee benefits, Alight powers
confident health, wealth, leaves and wellbeing decisions for 35
million people and dependents. Our Alight Worklife® platform
empowers employers to gain a deeper understanding of their
workforce and engage them throughout life’s most important moments
with personalized benefits management and data-driven insights,
leading to increased employee wellbeing, engagement and
productivity. Learn how Alight unlocks growth for organizations of
all sizes at 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 our management and director succession plans,
statements regarding the anticipated benefits of the sale of our
Payroll & Professional Services business 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
successfully separate 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 and in the Quarterly Report on Form 10-Q filed
with the SEC on May 8, 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
continued 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 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.
Condensed Consolidated
Statements of Income (Loss)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions, except per share
amounts)
2024
2023
2024
2023
Revenue
$
538
$
561
$
1,097
$
1,147
Cost of services, exclusive of
depreciation and amortization
345
356
701
738
Depreciation and amortization
26
18
47
35
Gross Profit
167
187
349
374
Operating Expenses
Selling, general and administrative
146
149
292
300
Depreciation and intangible
amortization
73
74
149
150
Total Operating expenses
219
223
441
450
Operating Income (Loss) From Continuing
Operations
(52
)
(36
)
(92
)
(76
)
Other (Income) Expense
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Interest expense
33
33
64
66
Other (income) expense, net
—
—
1
1
Total Other (income) expense, net
(50
)
44
58
111
Income (Loss) From Continuing
Operations Before Taxes
(2
)
(80
)
(150
)
(187
)
Income tax expense (benefit)
2
(8
)
(25
)
(31
)
Net Income (Loss) From Continuing
Operations
(4
)
(72
)
(125
)
(156
)
Net Income (Loss) From Discontinued
Operations, Net of Tax
27
—
32
10
Net Income (Loss)
23
(72
)
(93
)
(146
)
Net income (loss) attributable to
noncontrolling interests
—
(5
)
(2
)
(11
)
Net Income (Loss) Attributable to
Alight, Inc.
$
23
$
(67
)
$
(91
)
$
(135
)
Earnings Per Share
Basic and Diluted
Continuing operations
$
(0.01
)
$
(0.14
)
$
(0.23
)
$
(0.30
)
Discontinued operations
$
0.05
$
0.00
$
0.06
$
0.02
Net Income (Loss)
$
0.04
$
(0.14
)
$
(0.17
)
$
(0.28
)
Condensed Consolidated Balance
Sheets
(Unaudited)
June 30, 2024
December 31,
2023
(in millions, except par values)
Assets
Current Assets
Cash and cash equivalents
$
183
$
324
Receivables, net
372
435
Other current assets
210
260
Fiduciary assets
217
234
Current assets held for sale
2,461
1,523
Total Current Assets
3,443
2,776
Goodwill
3,212
3,212
Intangible assets, net
2,995
3,136
Fixed assets, net
393
331
Deferred tax assets, net
86
38
Other assets
344
341
Long-term assets held for sale
—
948
Total Assets
$
10,473
$
10,782
Liabilities and Stockholders'
Equity
Liabilities
Current Liabilities
Accounts payable and accrued
liabilities
$
249
$
325
Current portion of long-term debt, net
329
25
Other current liabilities
261
233
Fiduciary liabilities
217
234
Current liabilities held for sale
1,461
1,370
Total Current Liabilities
2,517
2,187
Deferred tax liabilities
32
32
Long-term debt, net
2,451
2,769
Long-term tax receivable agreement
757
733
Financial instruments
80
109
Other liabilities
159
142
Long-term liabilities held for sale
—
68
Total Liabilities
$
5,996
$
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; 541.4 and 510.9 issued and outstanding
as of June 30, 2024 and December 31, 2023, respectively
—
—
Class B Common Stock: $0.0001 par value,
20.0 shares authorized; 9.8 and 9.9 issued and outstanding as of
June 30, 2024 and December 31, 2023, respectively
—
—
Class V Common Stock: $0.0001 par value,
175.0 shares authorized; 0.6 and 29.0 issued and outstanding as of
June 30, 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
June 30, 2024 and December 31, 2023, respectively
—
—
Treasury stock, at cost (16.6 and 6.4
shares at June 30, 2024 and December 31, 2023, respectively)
(132
)
(52
)
Additional paid-in-capital
5,134
4,946
Retained deficit
(594
)
(503
)
Accumulated other comprehensive income
65
71
Total Alight, Inc. Stockholders'
Equity
$
4,473
$
4,462
Noncontrolling interest
4
280
Total Stockholders' Equity
$
4,477
$
4,742
Total Liabilities and Stockholders'
Equity
$
10,473
$
10,782
Condensed Consolidated Statements of
Cash Flows
(Unaudited)
Six Months Ended June
30,
(in millions)
2024
2023
Operating activities:
Net Income (Loss) From Continuing
Operations
$
(125
)
$
(156
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation
56
44
Intangible asset amortization
140
141
Noncash lease expense
6
7
Financing fee and premium amortization
(1
)
(1
)
Share-based compensation expense
48
64
(Gain) loss from change in fair value of
financial instruments
(31
)
25
(Gain) loss from change in fair value of
tax receivable agreement
24
19
Release of unrecognized tax provision
(2
)
(1
)
Deferred tax expense (benefit)
(39
)
(3
)
Other
2
4
Changes in operating assets and
liabilities:
Accounts receivable
62
34
Accounts payable and accrued
liabilities
(75
)
(120
)
Other assets and liabilities
28
56
Cash provided by operating activities -
continuing operations
93
113
Cash provided by operating activities -
discontinued operations
65
49
Net cash provided by operating
activities
$
158
$
162
Investing activities:
Capital expenditures
(67
)
(78
)
Cash used for investing activities -
continuing operations
(67
)
(78
)
Cash used in investing activities -
discontinued operations
(11
)
(11
)
Net cash used in investing
activities
$
(78
)
$
(89
)
Financing activities:
Net increase (decrease) in fiduciary
liabilities
(17
)
(17
)
Repayments to banks
(13
)
(13
)
Principal payments on finance lease
obligations
(14
)
(13
)
Payments on tax receivable agreements
(62
)
(7
)
Tax payment for shares/units withheld in
lieu of taxes
(58
)
(6
)
Deferred and contingent consideration
payments
—
(4
)
Repurchase of shares
(80
)
(14
)
Cash used for financing activities -
continuing operations
(244
)
(74
)
Cash provided by (used in) financing
activities - discontinued operations
22
(201
)
Net Cash provided by (used for)
financing activities
$
(222
)
$
(275
)
Effect of exchange rate changes on
cash, cash equivalents and restricted cash - discontinued
operations
(3
)
5
Net increase (decrease) in cash, cash
equivalents and restricted cash
(145
)
(197
)
Cash, cash equivalents and restricted
cash balances from:
Continuing operations - beginning of
year
$
558
$
482
Discontinued operations - beginning of
year(a)
1,201
1,277
Less Discontinued operations - end of
period(a)
1,214
1,079
Continuing operations - end of
period
$
400
$
483
(a)Reported as assets held for sale on our
condensed consolidated balance sheets.
Reconciliation of Net Income (Loss)
From Continuing Operations to Adjusted EBITDA from Continuing
Operations (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions)
2024
2023
2024
2023
Net Income (Loss) From Continuing
Operations (1)
$
(4
)
$
(72
)
$
(125
)
$
(156
)
Interest expense
33
33
64
66
Income tax expense (benefit)
2
(8
)
(25
)
(31
)
Depreciation
30
22
56
44
Intangible amortization
69
70
140
141
EBITDA From Continuing
Operations
130
45
110
64
Share-based compensation
20
30
48
64
Transaction and integration expenses
(2)
19
8
36
10
Restructuring
18
25
33
48
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Other
1
—
1
1
Adjusted EBITDA From Continuing
Operations
$
105
$
119
$
221
$
231
Revenue
$
538
$
561
$
1,097
$
1,147
Adjusted EBITDA Margin From Continuing
Operations (3)
19.5
%
21.2
%
20.1
%
20.1
%
(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 June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(in millions, except share and per share
amounts)
Numerator:
Net Income (Loss) From Continuing
Operations Attributable to Alight, Inc. (1)
$
(4
)
$
(67
)
$
(123
)
$
(145
)
Conversion of noncontrolling interest
—
(5
)
(2
)
(11
)
Intangible amortization
69
70
140
141
Share-based compensation
20
30
48
64
Transaction and integration expenses
(2)
19
8
36
10
Restructuring
18
25
33
48
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Other
2
—
2
1
Tax effect of adjustments (3)
(12
)
(12
)
(41
)
(41
)
Adjusted Net Income From Continuing
Operations
$
29
$
60
$
86
$
111
Denominator:
Weighted average shares outstanding -
basic
546,174,400
490,306,205
543,376,024
483,358,533
Dilutive effect of the exchange of
noncontrolling interest units
554,568
—
554,568
—
Dilutive effect of RSUs
374,688
—
—
—
Weighted average shares outstanding -
diluted
547,103,656
490,306,205
543,930,592
483,358,533
Exchange of noncontrolling interest
units(4)
107,673
44,103,939
2,714,155
51,055,250
Impact of unvested RSUs(5)
9,222,832
10,109,595
9,597,520
10,109,595
Adjusted shares of Class A Common Stock
outstanding - diluted(6)(7)
556,434,161
544,519,739
556,242,267
544,523,378
Basic (Net Loss) Earnings Per Share
From Continuing Operations
$
(0.01
)
$
(0.14
)
$
(0.23
)
$
(0.30
)
Diluted (Net Loss) Earnings Per Share
From Continuing Operations
$
(0.01
)
$
(0.14
)
$
(0.23
)
$
(0.30
)
Adjusted Diluted Earnings Per Share
From Continuing Operations
$
0.05
$
0.11
$
0.15
$
0.20
(1)
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.
(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
>$15.00 for any 20 trading days within a consecutive period of
30 trading days. Both tranches have a seven-year duration.
(7)
Excludes approximately 14.1 million and
30.2 million performance-based units, which represents the gross
number of shares expected to vest based on achievement of
performance conditions as of June 30, 2024 and 2023,
respectively.
Gross Profit to Adjusted Gross Profit
Reconciliation by Segment
(Unaudited)
Three Months Ended June 30,
2024
($ in millions)
Employer Solutions
Other
Total
Gross Profit
$
167
$
—
$
167
Add: stock-based compensation
3
—
3
Add: depreciation and amortization
26
—
26
Adjusted Gross Profit
$
196
$
—
$
196
Gross Profit Margin
31.0
%
0.0
%
31.0
%
Adjusted Gross Profit Margin
36.4
%
0.0
%
36.4
%
Three Months Ended June 30,
2023
($ in millions)
Employer Solutions
Other
Total
Gross Profit
$
189
$
(2
)
$
187
Add: stock-based compensation
7
—
7
Add: depreciation and amortization
17
1
18
Adjusted Gross Profit
$
213
$
(1
)
$
212
Gross Profit Margin
34.2
%
(22.2
)%
33.3
%
Adjusted Gross Profit Margin
38.6
%
(11.1
)%
37.8
%
Other Select Financial Data
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions)
2024
2023
2024
2023
Segment
Revenues
Employer Solutions:
Recurring
$
493
$
505
$
1,014
$
1,038
Project
45
47
83
90
Total Employer Solutions
538
552
1,097
1,128
Other (1)
—
9
—
19
Total revenue
$
538
$
561
$
1,097
$
1,147
Segment Gross
Profit
Employer Solutions
$
167
$
189
$
349
$
376
Other
—
(2
)
—
(2
)
Total gross profit
$
167
$
187
$
349
$
374
Segment Gross
Margin
Employer Solutions
31.0
%
34.2
%
31.8
%
33.3
%
Other
0.0
%
(22.2
)%
0.0
%
(10.5
)%
Total gross margin
31.0
%
33.3
%
31.8
%
32.6
%
Segment Adjusted
Gross Profit
Employer Solutions
$
196
$
213
$
404
$
423
Other
—
(1
)
—
—
Total adjusted gross profit
$
196
$
212
$
404
$
423
Segment Adjusted
Gross Margin Percent
Employer Solutions
36.4
%
38.6
%
36.8
%
37.5
%
Other
0.0
%
(11.1
)%
0.0
%
0.0
%
Total adjusted gross margin percent
36.4
%
37.8
%
36.8
%
36.9
%
Adjusted EBITDA From Continuing
Operations
$
105
$
119
$
221
$
231
Cash provided by continuing operating
activities
$
93
$
113
Other Key
Statistics
Recurring revenue, Ex. Other
$
493
$
505
$
1,014
$
1,038
BPaaS revenue
$
115
$
102
$
232
$
199
BPaaS revenue as % of total revenue
21.4
%
18.2
%
21.1
%
17.3
%
(1)
Other primarily attributable to the former Hosted Segment.
Supplemental Financial
Information
(Continuing Operations and
Discontinued Operations)
Alight, Inc. Condensed Consolidated
Statements of Income (Loss)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in millions, except per share
amounts)
2024
2023
2024
2023
Revenue
$
787
$
806
$
1,603
$
1,637
Cost of services, exclusive of
depreciation and amortization
512
528
1,055
1,083
Depreciation and amortization
26
21
50
40
Gross Profit
249
257
498
514
Operating Expenses
Selling, general and administrative
197
193
380
378
Depreciation and intangible
amortization
72
85
157
170
Total operating expenses
269
278
537
548
Operating Income (Loss)
(20
)
(21
)
(39
)
(34
)
Other (Income) Expense
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Interest expense
33
33
64
66
Other (income) expense, net
2
4
4
7
Total other (income) expense, net
(48
)
48
61
117
Income (Loss) Before Income Tax
28
(69
)
(100
)
(151
)
Income tax expense (benefit)
5
3
(7
)
(5
)
Net Income (Loss)
23
(72
)
(93
)
(146
)
Net loss attributable to noncontrolling
interests
—
(5
)
(2
)
(11
)
Net (Loss) Income Attributable to
Alight, Inc.
$
23
$
(67
)
$
(91
)
$
(135
)
Earnings Per Share
Basic (net loss) earnings per share
$
0.04
$
(0.14
)
$
(0.17
)
$
(0.28
)
Diluted (net loss) earnings per share
$
0.04
$
(0.14
)
$
(0.17
)
$
(0.28
)
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
(Unaudited)
Three Months Ended June
30,
Three Months Ended June
30,
Six Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net Income (Loss)
$
23
$
(72
)
$
(93
)
$
(146
)
Interest expense
33
33
64
66
Income tax expense (benefit)
5
3
(7
)
(5
)
Depreciation
29
26
58
50
Intangible amortization
69
80
149
160
EBITDA
159
70
171
125
Share-based compensation
18
38
46
75
Transaction and integration expenses
(1)
29
8
46
10
Restructuring
20
30
37
56
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Other
2
—
2
1
Adjusted EBITDA
$
145
$
157
$
295
$
311
Revenue
$
787
$
806
$
1,603
$
1,637
Adjusted EBITDA Margin (2)
18.4
%
19.5
%
18.4
%
19.0
%
(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.
Reconciliation of Net Income (Loss) to
Adjusted Net Income and Adjusted Diluted Earnings per Share
(Unaudited)
Three Months Ended June
30,
Three Months Ended June
30,
Six Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Numerator:
Net (Loss) Income Attributable to Alight,
Inc.
$
23
$
(67
)
$
(91
)
$
(135
)
Conversion of noncontrolling interest
—
(5
)
(2
)
(11
)
Intangible amortization
69
80
149
160
Share-based compensation
18
38
46
75
Transaction and integration expenses
(1)
29
8
46
10
Restructuring
20
30
37
56
(Gain) Loss from change in fair value of
financial instruments
(52
)
—
(31
)
25
(Gain) Loss from change in fair value of
tax receivable agreement
(31
)
11
24
19
Other
2
—
2
1
Tax effect of adjustments (2)
(15
)
(18
)
(47
)
(51
)
Adjusted Net Income
$
63
$
77
$
133
$
149
Denominator:
Weighted average shares outstanding -
basic
546,174,400
490,306,205
543,376,024
483,358,533
Dilutive effect of the exchange of
noncontrolling interest units
554,568
—
554,568
—
Dilutive effect of RSUs
374,688
—
—
—
Weighted average shares outstanding -
diluted
547,103,656
490,306,205
543,930,592
483,358,533
Exchange of noncontrolling interest units
(3)
107,673
44,103,939
2,714,155
51,055,250
Impact of unvested RSUs(4)
9,222,832
10,109,595
9,597,520
10,109,595
Adjusted shares of Class A Common Stock
outstanding - diluted (5)(6)
556,434,161
544,519,739
556,242,267
544,523,378
Basic (Net Loss) Earnings Per
Share
$
0.04
$
(0.14
)
$
(0.17
)
$
(0.28
)
Diluted (Net Loss) Earnings Per
Share
$
0.04
$
(0.14
)
$
(0.17
)
$
(0.28
)
Adjusted Diluted Earnings Per
Share
$
0.11
$
0.14
$
0.24
$
0.27
(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
>$15.00 for any 20 trading days within a consecutive period of
30 trading days. Both tranches have a seven-year duration.
(6)
Excludes approximately 14.1 million and
30.2 million performance-based units, which represents the gross
number of shares expected to vest based on achievement of
performance conditions as of June 30, 2024 and 2023,
respectively.
Gross Profit to Adjusted Gross Profit
Reconciliation
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions)
2024
2023
2024
2023
Gross Profit
$
249
$
257
$
498
$
514
Add: stock-based compensation
3
9
8
18
Add: depreciation and amortization
26
21
50
40
Adjusted Gross Profit
$
278
$
287
$
556
$
572
Gross Profit Margin
31.6
%
31.9
%
31.1
%
31.4
%
Adjusted Gross Profit Margin
35.3
%
35.6
%
34.7
%
34.9
%
Total Company Revenue
Disaggregation
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
($ in millions)
2024
2023
2024
2023
Employer Solutions:
Recurring
$
493
$
505
$
1,014
$
1,038
Project
45
47
83
90
Total Employer Solutions
538
552
1,097
1,128
Revenue from Discontinued Operations
249
245
506
490
Total Revenue, excluding Hosted
787
797
1,603
1,618
Other (1)
—
9
—
19
Total Alight Revenue
$
787
$
806
$
1,603
$
1,637
(1)
Other primarily attributable to the formed Hosted segment.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806309263/en/
Investors: Jeremy Cohen investor.relations@alight.com
Media: Mariana Fischbach mariana.fischbach@alight.com
Grafico Azioni Alight (NYSE:ALIT)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni Alight (NYSE:ALIT)
Storico
Da Dic 2023 a Dic 2024
