Alight Reports Third Quarter 2024 Results

– Initiates quarterly dividend program –

– Revenue of $555 million –

– Key wins with Hewlett Packard Enterprise, Nokia and Siemens –

– Repurchased $75 million of common stock –

– Raises revenue guidance range –

Alight, Inc. (NYSE: ALIT), a leading cloud-based provider of integrated digital human capital and business solutions, today reported results for the third quarter ended September 30, 2024.

“Alight delivered third quarter results that exceeded our expectations on both revenue and profitability,” said CEO Dave Guilmette. “As the market-leading services provider for employee benefits and wellbeing, Alight is uniquely positioned to guide the world’s largest and most complex clients on their people strategy journey. The value we now bring as a simplified company is driving momentum in our go-to market strategy and delivering stronger profitability. Our confidence in continued execution, alongside strong cash flow, is enabling a meaningful commitment to capital return, demonstrated by today's initiation of a quarterly dividend program.”

Presentation of Results

Beginning with the quarter ended March 31, 2024, the Company began accounting for the assets, liabilities and operating results of the Payroll & Professional Services business 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 on July 12, 2024.

Third Quarter 2024 Highlights (all comparisons are relative to third quarter 2023)

• Revenue decreased 0.4% to $555 million
• Business Process as a Service (BPaaS) revenue grew 18.6% to $121 million, representing 21.8% of total revenue
• Gross profit of $174 million and gross profit margin of 31.4%, compared to $166 million and 29.8% in the prior year period, respectively, and adjusted gross profit of $200 million and adjusted gross profit margin of 36.0%, compared to $192 million and 34.5% in the prior year period, respectively
• Net loss of $44 million compared to the prior year period net loss of $40 million
• Adjusted EBITDA of $118 million compared to the prior year period of $100 million
• Diluted earnings (loss) per share of $(0.08) compared to $(0.09) in the prior year period, and adjusted diluted earnings per share of $0.09 compared to $0.09 per share in the prior year period
• New wins or expanded relationships with companies including Hewlett Packard Enterprise, Nokia and Siemens
• Repurchased $75 million of common stock under previously announced Accelerated Share Repurchase program

Third Quarter 2024 Results

Revenue decreased 0.4% to $555 million, as compared to $557 million in the prior year period. The decrease was driven by lower volumes, lower project revenue and the wind-down of the Hosted business operations, partially offset by higher net commercial activity. Excluding the exited Hosted business, revenue increased 0.9%. Recurring revenues were 90.8% of total revenue.

Gross profit was $174 million, or 31.4% of revenue, compared to $166 million, or 29.8% of revenue in the prior year period. The increase in gross profit was primarily driven by productivity savings.

Selling, general and administrative expenses increased $6 million when compared to the prior year period. This was driven by professional fees incurred related to the sale of the Payroll & Professional Services business, partially offset by lower compensation expenses primarily related to share-based awards and lower costs incurred from the previously announced restructuring program.

Interest expense of $19 million decreased $15 million from the prior year period. Interest expense benefited from the repricing of the 2028 term loan and the $740 million debt pay down.

The Company’s loss from continuing operations before income tax benefit was $53 million compared to loss from continuing operations before income tax benefit of $54 million in the prior year period. The improvement was primarily attributable to lower interest expense as a result of the debt pay down and other income recorded in conjunction with the transition services agreement entered into with the purchaser of the divested Payroll & Professional Services business, partially offset by the non-operating fair value remeasurements of financial instruments and the tax receivable agreement.

Balance Sheet Highlights

As of September 30, 2024, the Company’s cash and cash equivalents balance was $300 million, total debt was $2,031 million and total debt net of cash and cash equivalents was $1,731 million.

Initiates Quarterly Dividend Program

The Company announced today that its Board of Directors approved a new quarterly dividend program. The Board of Directors declared a quarterly cash dividend of $0.04 per share to be paid on December 16, 2024 to all stockholders of record as of December 2, 2024. The Company intends to continue paying regular cash dividends on a quarterly basis, subject to market conditions and approval by the Board of Directors.

Fourth Quarter 2024 Business Outlook

The Company's fourth quarter of 2024 outlook includes:

• Revenue of $665 million to $685 million ($10 million increase at midpoint versus previous 2nd half guidance).
• BPaaS Revenue of $144 to $154 million.
• Adjusted EBITDA of $208 million to $233 million.
• Adjusted EBITDA margin range of 30.4% to 35.0%.
• Adjusted diluted EPS of $0.22 to $0.27.
• Operating Cash Flow Conversion adjusted for separation costs of approximately 60%.

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. Additionally, some of the measures used in this press release include certain management adjustments in addition to those permitted under Article 11 of Regulation S-X, with respect to proforma financial information. 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 third quarter 2024 financial results is scheduled for today, November 12, 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 and over 35 million people and dependents. Through the administration of employee benefits, Alight helps clients gain a benefits advantage while building a healthy and financially secure workforce by unifying the benefits ecosystem across health, wealth, wellbeing, absence management and navigation. 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 more about the Alight Benefits Advantage™ 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 related to our expected revenue under contract, statements related to our ability to execute on our go-to-market strategy, statements regarding our ability to enhance shareholder value, statements regarding our expected quarterly dividend and stock repurchase programs, 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

The Company 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 September 30,

 

Nine Months Ended September 30,

(in millions, except per share amounts)

 

2024

 

 

2023

 

 

2024

 

 

2023

Revenue

$

555

 

$

557

 

$

1,652

 

$

1,704

Cost of services, exclusive of depreciation and amortization

 

358

 

 

372

 

 

1,059

 

 

1,110

Depreciation and amortization

 

23

 

 

19

 

 

70

 

 

54

Gross Profit

 

174

 

 

166

 

 

523

 

 

540

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Selling, general and administrative

 

142

 

 

136

 

 

434

 

 

436

Depreciation and intangible amortization

 

74

 

 

75

 

 

223

 

 

225

Total Operating expenses

 

216

 

 

211

 

 

657

 

 

661

Operating Income (Loss) From Continuing Operations

 

(42)

 

 

(45)

 

 

(134)

 

 

(121)

Other (Income) Expense

 

 

 

 

 

 

 

(Gain) Loss from change in fair value of financial instruments

 

(23)

 

 

(36)

 

 

(54)

 

 

(11)

(Gain) Loss from change in fair value of tax receivable agreement

 

27

 

 

11

 

 

51

 

 

30

Interest expense

 

19

 

 

34

 

 

83

 

 

100

Other (income) expense, net

 

(12)

 

 

—

 

 

(11)

 

 

1

Total Other (income) expense, net

 

11

 

 

9

 

 

69

 

 

120

Income (Loss) From Continuing Operations Before Taxes

 

(53)

 

 

(54)

 

 

(203)

 

 

(241)

Income tax expense (benefit)

 

(9)

 

 

(14)

 

 

(34)

 

 

(45)

Net Income (Loss) From Continuing Operations

 

(44)

 

 

(40)

 

 

(169)

 

 

(196)

Net Income (Loss) From Discontinued Operations (including gain on disposal of $4.0m), Net of Tax

 

(30)

 

 

(6)

 

 

2

 

 

4

Net Income (Loss)

 

(74)

 

 

(46)

 

 

(167)

 

 

(192)

Net income (loss) attributable to noncontrolling interests

 

—

 

 

2

 

 

(2)

 

 

(9)

Net Income (Loss) Attributable to Alight, Inc.

$

(74)

 

$

(48)

 

$

(165)

 

$

(183)

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

Continuing operations

$

(0.08)

 

$

(0.09)

 

$

(0.31)

 

$

(0.39)

Discontinued operations

$

(0.06)

 

$

(0.01)

 

$

—

 

$

0.01

Net Income (Loss)

$

(0.14)

 

$

(0.10)

 

$

(0.31)

 

$

(0.38)

Condensed Consolidated Balance Sheets

(Unaudited)

 

September 30, 2024

 

December 31, 2023

(in millions, except par values)

 

 

 

Assets

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

300

 

$

324

Receivables, net

 

453

 

 

435

Other current assets

 

186

 

 

260

Fiduciary assets

 

262

 

 

234

Current assets of discontinued operations

 

—

 

 

1,523

Total Current Assets

 

1,201

 

 

2,776

Goodwill

 

3,212

 

 

3,212

Intangible assets, net

 

2,925

 

 

3,136

Fixed assets, net

 

394

 

 

331

Deferred tax assets, net

 

96

 

 

38

Other assets

 

443

 

 

341

Long-term assets of discontinued operations

 

—

 

 

948

Total Assets

$

8,271

 

$

10,782

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Liabilities

 

 

 

Current Liabilities

 

 

 

Accounts payable and accrued liabilities

$

334

 

$

325

Current portion of long-term debt, net

 

25

 

 

25

Other current liabilities

 

305

 

 

233

Fiduciary liabilities

 

262

 

 

234

Current liabilities of discontinued operations

 

—

 

 

1,370

Total Current Liabilities

 

926

 

 

2,187

Deferred tax liabilities

 

31

 

 

32

Long-term debt, net

 

2,006

 

 

2,769

Long-term tax receivable agreement

 

755

 

 

733

Financial instruments

 

67

 

 

109

Other liabilities

 

160

 

 

142

Long-term liabilities of discontinued operations

 

—

 

 

68

Total Liabilities

$

3,945

 

$

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; 559.5 and 517.3 shares issued, and 532.4 and 510.9 shares outstanding as of September 30, 2024 and December 31, 2023, respectively

 

—

 

 

—

Class B Common Stock: $0.0001 par value, 20.0 shares authorized; 10.0 and 9.9 issued and outstanding as of September 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 September 30, 2024 and December 31, 2023, respectively

 

—

 

 

—

Class Z Common Stock: $0.0001 par value, 12.9 shares authorized; 0.0 and 3.4 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

 

—

 

 

—

Treasury stock, at cost (27.1 and 6.4 shares at September 30, 2024 and December 31, 2023, respectively)

 

(207)

 

 

(52)

Additional paid-in-capital

 

5,149

 

 

4,946

Retained deficit

 

(668)

 

 

(503)

Accumulated other comprehensive income

 

48

 

 

71

Total Alight, Inc. Stockholders' Equity

$

4,322

 

$

4,462

Noncontrolling interest

 

4

 

 

280

Total Stockholders' Equity

$

4,326

 

$

4,742

Total Liabilities and Stockholders' Equity

$

8,271

 

$

10,782

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

Nine Months Ended September 30,

(in millions)

 

2024

 

 

2023

Operating activities:

 

 

 

Net Income (Loss) From Continuing Operations

$

(169)

 

$

(196)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation

 

83

 

 

69

Intangible asset amortization

 

210

 

 

210

Noncash lease expense

 

9

 

 

10

Financing fee and premium amortization

 

(1)

 

 

(2)

Share-based compensation expense

 

59

 

 

93

(Gain) loss from change in fair value of financial instruments

 

(54)

 

 

(11)

(Gain) loss from change in fair value of tax receivable agreement

 

51

 

 

30

Release of unrecognized tax provision

 

(1)

 

 

(1)

Deferred tax expense (benefit)

 

(75)

 

 

34

Other

 

(4)

 

 

7

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(19)

 

 

11

Accounts payable and accrued liabilities

 

11

 

 

(76)

Other assets and liabilities

 

(25)

 

 

48

Cash provided by operating activities - continuing operations

 

75

 

 

226

Cash provided by operating activities - discontinued operations

 

59

 

 

25

Net cash provided by operating activities

$

134

 

$

251

Investing activities:

 

 

 

Net proceeds from sale of business

 

972

 

 

—

Capital expenditures

 

(95)

 

 

(114)

Cash provided by (used in) investing activities - continuing operations

 

877

 

 

(114)

Cash used in investing activities - discontinued operations

 

(11)

 

 

(13)

Net cash provided by (used in) investing activities

$

866

 

$

(127)

Financing activities:

 

 

 

Net increase (decrease) in fiduciary liabilities

 

28

 

 

(36)

Repayments to banks

 

(759)

 

 

(19)

Principal payments on finance lease obligations

 

(22)

 

 

(17)

Payments on tax receivable agreements

 

(62)

 

 

(7)

Tax payment for shares/units withheld in lieu of taxes

 

(58)

 

 

(8)

Deferred and contingent consideration payments

 

—

 

 

(9)

Repurchase of shares

 

(155)

 

 

(40)

Other financing activities

 

—

 

 

1

Cash used for financing activities - continuing operations

 

(1,028)

 

 

(135)

Cash provided by (used in) financing activities - discontinued operations

 

22

 

 

(154)

Net Cash provided by (used in) financing activities

$

(1,006)

 

$

(289)

Effect of exchange rate changes on cash, cash equivalents and restricted cash - continuing operations

 

1

 

 

—

Effect of exchange rate changes on cash, cash equivalents and restricted cash - discontinued operations

 

(3)

 

 

1

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(8)

 

 

(164)

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)

 

—

 

 

1,126

Less fiduciary cash transferred with sale of business

 

1,189

 

 

—

Continuing operations - end of period

$

562

 

$

469

(a)Reported as discontinued operations on our condensed consolidated balance sheets.

 

 

 

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

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Net Income (Loss) From Continuing Operations (1)

$

(44)

 

$

(40)

 

$

(169)

 

$

(196)

Interest expense

 

19

 

 

34

 

 

83

 

 

100

Income tax expense (benefit)

 

(9)

 

 

(14)

 

 

(34)

 

 

(45)

Depreciation

 

27

 

 

25

 

 

83

 

 

69

Intangible amortization

 

70

 

 

69

 

 

210

 

 

210

EBITDA From Continuing Operations

 

63

 

 

74

 

 

173

 

 

138

Share-based compensation

 

11

 

 

29

 

 

59

 

 

93

Transaction and integration expenses (2)

 

21

 

 

6

 

 

57

 

 

16

Restructuring

 

12

 

 

15

 

 

45

 

 

63

(Gain) Loss from change in fair value of financial instruments

 

(23)

 

 

(36)

 

 

(54)

 

 

(11)

(Gain) Loss from change in fair value of tax receivable agreement

 

27

 

 

11

 

 

51

 

 

30

Other

 

7

 

 

1

 

 

8

 

 

2

Adjusted EBITDA From Continuing Operations

$

118

 

$

100

 

$

339

 

$

331

Revenue

$

555

 

$

557

 

$

1,652

 

$

1,704

Adjusted EBITDA Margin From Continuing Operations (3)

 

21.3%

 

 

18.0%

 

 

20.5%

 

 

19.4%

(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 September 30,

 

Nine Months Ended September 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)

$

(44)

 

$

(42)

 

$

(167)

 

$

(187)

Conversion of noncontrolling interest

 

—

 

 

2

 

 

(2)

 

 

(9)

Intangible amortization

 

70

 

 

69

 

 

210

 

 

210

Share-based compensation

 

11

 

 

29

 

 

59

 

 

93

Transaction and integration expenses (2)

 

21

 

 

6

 

 

57

 

 

16

Restructuring

 

12

 

 

15

 

 

45

 

 

63

(Gain) Loss from change in fair value of financial instruments

 

(23)

 

 

(36)

 

 

(54)

 

 

(11)

(Gain) Loss from change in fair value of tax receivable agreement

 

27

 

 

11

 

 

51

 

 

30

Other

 

6

 

 

1

 

 

8

 

 

2

Tax effect of adjustments (3)

 

(32)

 

 

(5)

 

 

(73)

 

 

(46)

Adjusted Net Income From Continuing Operations

$

48

 

$

50

 

$

134

 

$

161

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

535,828,896

 

 

493,226,324

 

 

545,659,335

 

 

486,683,943

Dilutive effect of the exchange of noncontrolling interest units

 

—

 

 

—

 

 

560,433

 

 

—

Dilutive effect of RSUs

 

—

 

 

—

 

 

—

 

 

—

Weighted average shares outstanding - diluted

 

535,828,896

 

 

493,226,324

 

 

546,219,768

 

 

486,683,943

Exchange of noncontrolling interest units(4)

 

663,057

 

 

40,858,016

 

 

2,189,169

 

 

47,618,819

Impact of unvested RSUs(5)

 

7,358,510

 

 

9,161,197

 

 

7,358,510

 

 

9,161,197

Adjusted shares of Class A Common Stock outstanding - diluted(6)(7)

 

543,850,463

 

 

543,245,537

 

 

555,767,447

 

 

543,463,959

 

 

 

 

 

 

 

 

Basic (Net Loss) Earnings Per Share From Continuing Operations

$

(0.08)

 

$

(0.09)

 

$

(0.31)

 

$

(0.39)

Diluted (Net Loss) Earnings Per Share From Continuing Operations

$

(0.08)

 

$

(0.09)

 

$

(0.31)

 

$

(0.39)

Adjusted Diluted Earnings Per Share From Continuing Operations

$

0.09

 

$

0.09

 

$

0.24

 

$

0.30

(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 10.2 million and 28.5 million performance-based units, which represents the gross number of shares expected to vest based on achievement of performance conditions as of September 30, 2024 and 2023, respectively.

Gross Profit to Adjusted Gross Profit Reconciliation by Segment

(Unaudited)

 

Three Months Ended September 30, 2024

($ in millions)

Employer Solutions

 

Other

 

Total

Gross Profit

$

174

 

$

—

 

$

174

Add: stock-based compensation

 

3

 

 

—

 

 

3

Add: depreciation and amortization

 

23

 

 

—

 

 

23

Adjusted Gross Profit

$

200

 

$

—

 

$

200

Gross Profit Margin

 

31.4 %

 

 

0.0 %

 

 

31.4 %

Adjusted Gross Profit Margin

 

36.0 %

 

 

0.0 %

 

 

36.0 %

 

 

 

 

 

 

 

Three Months Ended September 30, 2023

($ in millions)

Employer Solutions

 

Other

 

Total

Gross Profit

$

166

 

$

—

 

$

166

Add: stock-based compensation

 

7

 

 

—

 

 

7

Add: depreciation and amortization

 

19

 

 

—

 

 

19

Adjusted Gross Profit

$

192

 

$

—

 

$

192

Gross Profit Margin

 

30.2 %

 

 

0.0 %

 

 

29.8 %

Adjusted Gross Profit Margin

 

34.9 %

 

 

0.0 %

 

 

34.5 %

 

 

 

 

 

 

 

Nine Months Ended September 30, 2024

($ in millions)

Employer Solutions

 

Other

 

Total

Gross Profit

$

523

 

$

—

 

$

523

Add: stock-based compensation

 

11

 

 

—

 

 

11

Add: depreciation and amortization

 

70

 

 

—

 

 

70

Adjusted Gross Profit

$

604

 

$

—

 

$

604

Gross Profit Margin

 

31.7 %

 

 

0.0 %

 

 

31.7 %

Adjusted Gross Profit Margin

 

36.6 %

 

 

0.0 %

 

 

36.6 %

 

 

 

 

 

 

 

Nine Months Ended September 30, 2023

 

Employer Solutions

 

Other

 

Total

Gross Profit

$

542

 

$

(2)

 

$

540

Add: stock-based compensation

 

21

 

 

—

 

 

21

Add: depreciation and amortization

 

52

 

 

2

 

 

54

Adjusted Gross Profit

$

615

 

$

—

 

$

615

Gross Profit Margin

 

32.3 %

 

 

(7.7) %

 

 

31.7 %

Adjusted Gross Profit Margin

 

36.7 %

 

 

0.0 %

 

 

36.1 %

Other Select Financial Data

(Unaudited)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in millions)

 

2024

 

 

2023

 

 

2024

 

 

2023

Segment Revenues

 

 

 

 

 

 

 

Employer Solutions:

 

 

 

 

 

 

 

Recurring

$

504

 

$

497

 

$

1,518

 

$

1,535

Project

 

51

 

 

53

 

 

134

 

 

143

Total Employer Solutions

 

555

 

 

550

 

 

1,652

 

 

1,678

Other (1)

 

—

 

 

7

 

 

—

 

 

26

Total revenue

$

555

 

$

557

 

$

1,652

 

$

1,704

 

 

 

 

 

 

 

 

Segment Gross Profit

 

 

 

 

 

 

 

Employer Solutions

$

174

 

$

166

 

$

523

 

$

542

Other

 

—

 

 

—

 

 

—

 

 

(2)

Total gross profit

$

174

 

$

166

 

$

523

 

$

540

 

 

 

 

 

 

 

 

Segment Gross Margin

 

 

 

 

 

 

 

Employer Solutions

 

31.4 %

 

 

30.2 %

 

 

31.7 %

 

 

32.3 %

Other

 

0.0 %

 

 

0.0 %

 

 

0.0 %

 

 

(7.7) %

Total gross margin

 

31.4 %

 

 

29.8 %

 

 

31.7 %

 

 

31.7 %

 

 

 

 

 

 

 

 

Segment Adjusted Gross Profit

 

 

 

 

 

 

 

Employer Solutions

$

200

 

$

192

 

$

604

 

$

615

Other

 

—

 

 

—

 

 

—

 

 

—

Total adjusted gross profit

$

200

 

$

192

 

$

604

 

$

615

 

 

 

 

 

 

 

 

Segment Adjusted Gross Margin Percent

 

 

 

 

 

 

 

Employer Solutions

 

36.0 %

 

 

34.9 %

 

 

36.6 %

 

 

36.7 %

Other

 

0.0 %

 

 

0.0 %

 

 

0.0 %

 

 

0.0 %

Total adjusted gross margin percent

 

36.0 %

 

 

34.5 %

 

 

36.6 %

 

 

36.1 %

 

 

 

 

 

 

 

 

Adjusted EBITDA From Continuing Operations

$

118

 

$

100

 

$

339

 

$

331

 

 

 

 

 

 

 

 

Cash provided by continuing operating activities

 

 

 

 

$

75

 

$

226

 

 

 

 

 

 

 

 

Other Key Statistics

 

 

 

 

 

 

 

Recurring revenue, Ex. Other

$

504

 

$

497

 

$

1,518

 

$

1,535

BPaaS revenue

$

121

 

$

102

 

$

353

 

$

301

BPaaS revenue as % of total revenue

 

21.8 %

 

 

18.3 %

 

 

21.4 %

 

 

17.7 %

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112906370/en/

Investors: Jeremy Cohen [e-mail]

Media: Mariana Fischbach [e-mail]