– Revenue of $548 million –
– 92% of projected 2025 revenue under
contract –
– Key wins with US Foods, Markel and Delek
–
– Full year 2025 financial outlook
reaffirmed –
Alight, Inc. (NYSE: ALIT), a leading cloud-based human capital
and technology-enabled services provider, today reported results
for the first quarter ended March 31, 2025.
“Our first quarter performance met expectations and we are off
to a strong start to the year,” said CEO Dave Guilmette. “We
continue to bolster our leading capabilities through a focus on
client-centricity and delivering with excellence, including
important advancements across our artificial intelligence and
delivery initiatives. As our talented team navigates the evolving
global environment, the mission-critical work of helping people
access and utilize their benefits to remain healthy and financially
secure is as important as ever.”
Presentation of Results
First Quarter 2025 Highlights (all comparisons are
relative to first quarter 2024)
- Revenue decreased 2.0% to $548 million
- Gross profit of $171 million and gross profit margin of 31.2%,
compared to $182 million and 32.6%, respectively, and adjusted
gross profit of $200 million and adjusted gross profit margin of
36.5%, compared to $208 million and 37.2%, respectively
- Net loss improved to $17 million compared to net loss of $121
million
- Adjusted EBITDA improved to $118 million compared to $116
million
- Diluted earnings (loss) per share of $(0.03) compared to
$(0.22), and adjusted diluted earnings per share of $0.10 compared
to $0.10 per share
- New wins or expanded relationships with companies including US
Foods, Markel and Delek
- Repurchased $20 million of common stock under existing share
repurchase program
- Declared and paid a $0.04 per share dividend
First Quarter 2025 Results
Revenue decreased 2.0% to $548 million, as compared to $559
million in the prior year period. The change was primarily due to
lower project revenue and net commercial activity. Recurring
revenues were 94.9% of total revenue.
Gross profit was $171 million, or 31.2% of revenue, compared to
$182 million, or 32.6% of revenue in the prior year period. The
change in gross profit was primarily due to lower revenue as noted
above, partially offset by productivity savings.
Selling, general and administrative expenses improved $42
million when compared to the prior year period. This was due to a
reduction in compensation expenses primarily related to non-cash
share-based awards, lower restructuring charges and lower
professional fees incurred related to the sale and separation of
the Payroll & Professional Services business.
Interest expense of $22 million improved $9 million from the
prior year period. Interest expense benefited from the repricing of
the 2028 term loan and the $740 million debt pay down in the third
quarter of 2024.
The Company’s loss from continuing operations before income tax
benefit improved to $20 million compared to a loss from continuing
operations before income tax benefit of $148 million in the prior
year period. The improvement was primarily attributable to the
non-operating fair value remeasurements of financial instruments
and the tax receivable agreement, lower selling, general and
administrative expenses, 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.
Balance Sheet Highlights
As of March 31, 2025, the Company’s cash and cash equivalents
balance was $223 million, total debt was $2,019 million and total
debt net of cash and cash equivalents was $1,796 million.
Business Outlook
“We continue to benefit from a long-cycle recurring business
model that has insulated us from short-term market swings as we
already have 92% of projected 2025 revenue under contract. While we
are not immune to the market impacts, we feel good about the
operational levers within our control and have reaffirmed our
outlook based on the resilience of our model and visibility today,”
said Guilmette.
The Company's reaffirmed 2025 outlook includes:
- Revenue of $2,318 million to $2,388 million.
- Adjusted EBITDA of $620 million to $645 million.
- Adjusted diluted EPS of $0.58 to $0.64.
- Free cash flow of $250 million to $285 million.
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 first quarter 2025
financial results is scheduled for today, May 8, 2025 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
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 strategy, and
statements related to the expectations regarding the performance
and outlook for Alight’s business, financial results, liquidity and
capital resources, including statements in the "Business Outlook"
section of this press release. In some cases, these forward-looking
statements can be identified by the use of words such as “outlook,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“would,” “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 our ability
to successfully execute the next phase of our strategic
transformation, including our ability to effectively and
appropriately separate the Payroll and Professional Services
business, risks related to declines in economic activity in the
industries, markets, and regions our clients serve, including as a
result of macroeconomic factors beyond our control, heightened
interest rates or changes in monetary, trade and fiscal policies,
competition in our industry, risks related to cyber-attacks and
security vulnerabilities and other significant disruptions in our
information technology systems and networks, risks related to our
ability to maintain the security and privacy of confidential,
personal or proprietary data, risks related to actions or proposals
from activist stockholders, and risks related to our compliance
with applicable laws and regulations, including changes thereto.
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 27, 2025, 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
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, Free Cash Flow,
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.
Free Cash Flow is defined as cash provided by operating
activities net of capital expenditures. Management believes that
free cash flow is an important liquidity metric because it
measures, during a given period, the amount of cash generated that
is available to repay debt obligations, make strategic acquisitions
and investments and for certain other activities such as dividends
and stock repurchases.
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 March
31,
(in millions, except per share
amounts)
2025
2024
Revenue
$
548
$
559
Cost of services, exclusive of
depreciation and amortization
351
356
Depreciation and amortization
26
21
Gross Profit
171
182
Operating Expenses
Selling, general and administrative
104
146
Depreciation and intangible
amortization
75
76
Total Operating expenses
179
222
Operating Income (Loss) From Continuing
Operations
(8
)
(40
)
Other (Income) Expense
(Gain) Loss from change in fair value of
financial instruments
(8
)
21
(Gain) Loss from change in fair value of
tax receivable agreement
9
55
Interest expense
22
31
Other (income) expense, net
(11
)
1
Total Other (income) expense, net
12
108
Income (Loss) From Continuing
Operations Before Taxes
(20
)
(148
)
Income tax expense (benefit)
(3
)
(27
)
Net Income (Loss) From Continuing
Operations
(17
)
(121
)
Net Income (Loss) From Discontinued
Operations, Net of Tax
(8
)
5
Net Income (Loss)
(25
)
(116
)
Net income (loss) attributable to
noncontrolling interests
—
(2
)
Net Income (Loss) Attributable to
Alight, Inc.
$
(25
)
$
(114
)
Earnings (Loss) Per Share
Basic and Diluted
Continuing operations
$
(0.03
)
$
(0.22
)
Discontinued operations
$
(0.02
)
$
0.01
Net Income (Loss)
$
(0.05
)
$
(0.21
)
Condensed Consolidated Balance
Sheets
(Unaudited)
March 31, 2025
December 31,
2024
(in millions, except par values)
Assets
Current Assets
Cash and cash equivalents
$
223
$
343
Receivables, net
438
471
Other current assets
174
214
Fiduciary assets
227
239
Total Current Assets
1,062
1,267
Goodwill
3,212
3,212
Intangible assets, net
2,784
2,855
Fixed assets, net
397
396
Deferred tax assets, net
47
41
Other assets
411
422
Total Assets
$
7,913
$
8,193
Liabilities and Stockholders'
Equity
Liabilities
Current Liabilities
Accounts payable and accrued
liabilities
$
296
$
355
Current portion of long-term debt, net
20
25
Other current liabilities
358
273
Fiduciary liabilities
227
239
Total Current Liabilities
901
892
Deferred tax liabilities
22
22
Long-term debt, net
1,999
2,000
Long-term tax receivable agreement
578
757
Financial instruments
29
51
Other liabilities
151
158
Total Liabilities
$
3,680
$
3,880
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; 563.9 and 560.5 shares issued, and 531.9
and 531.7 shares outstanding as of March 31, 2025 and December 31,
2024, respectively
—
—
Class B Common Stock: $0.0001 par value,
20.0 shares authorized; 10.0 and 10.0 issued and outstanding as of
March 31, 2025 and December 31, 2024, respectively
—
—
Class V Common Stock: $0.0001 par value,
175.0 shares authorized; 0.5 and 0.5 issued and outstanding as of
March 31, 2025 and December 31, 2024, respectively
—
—
Class Z Common Stock: $0.0001 par value,
12.9 shares authorized; 0.0 and 0.0 issued and outstanding as of
March 31, 2025 and December 31, 2024, respectively
—
—
Treasury stock, at cost (32.0 and 28.8
shares at March 31, 2025 and December 31, 2024, respectively)
(239
)
(219
)
Additional paid-in-capital
5,114
5,141
Accumulated deficit
(685
)
(660
)
Accumulated other comprehensive income
39
47
Total Alight, Inc. Stockholders'
Equity
$
4,229
$
4,309
Noncontrolling interest
4
4
Total Stockholders' Equity
$
4,233
$
4,313
Total Liabilities and Stockholders'
Equity
$
7,913
$
8,193
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
(in millions)
2025
2024
Operating activities:
Net Income (Loss) From Continuing
Operations
$
(17)
$
(121)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation
30
26
Intangible asset amortization
71
71
Noncash lease expense
2
3
Financing fee and premium amortization
—
(1)
Share-based compensation expense
6
28
(Gain) loss from change in fair value of
financial instruments
(8)
21
(Gain) loss from change in fair value of
tax receivable agreement
9
55
Deferred tax expense (benefit)
(4)
(26)
Changes in operating assets and
liabilities:
Accounts receivable
33
42
Accounts payable and accrued
liabilities
(60)
(47)
Other assets and liabilities
11
41
Cash provided by operating activities -
continuing operations
73
92
Cash provided by operating activities -
discontinued operations
—
8
Net cash provided by operating
activities
$
73
$
100
Investing activities:
Capital expenditures
(29)
(31)
Cash provided by (used in) investing
activities - continuing operations
(29)
(31)
Cash used in investing activities -
discontinued operations
—
(5)
Net cash provided by (used in)
investing activities
$
(29)
$
(36)
Financing activities:
Dividend payments
(21)
—
Net increase (decrease) in fiduciary
liabilities
(12)
16
Repayments to banks
(5)
(6)
Principal payments on finance lease
obligations
(5)
(9)
Payments on tax receivable agreements
(100)
(62)
Tax payment for shares/units withheld in
lieu of taxes
(11)
(57)
Repurchase of shares
(20)
—
Other financing activities
(2)
—
Cash used for financing activities -
continuing operations
(176)
(118)
Cash provided by (used in) financing
activities - discontinued operations
—
44
Net Cash provided by (used in)
financing activities
$
(176)
$
(74)
Effect of exchange rate changes on
cash, cash equivalents and restricted cash - discontinued
operations
—
(2)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(132)
(12)
Cash, cash equivalents and restricted
cash balances from:
Continuing operations - beginning of
year
$
582
$
558
Discontinued operations - beginning of
year
—
1,201
Less discontinued operations - end of
period
—
1,241
Continuing operations - end of
period
$
450
$
506
Reconciliation of Net Income (Loss)
From Continuing Operations to Adjusted EBITDA from Continuing
Operations (Unaudited)
Three Months Ended March
31,
(in millions)
2025
2024
Net Income (Loss) From Continuing
Operations (1)
$
(17
)
$
(121
)
Interest expense
22
31
Income tax expense (benefit)
(3
)
(27
)
Depreciation
30
26
Intangible amortization
71
71
EBITDA From Continuing
Operations
103
(20
)
Share-based compensation
6
28
Transaction and integration expenses
(2)
3
17
Restructuring
4
15
(Gain) Loss from change in fair value of
financial instruments
(8
)
21
(Gain) Loss from change in fair value of
tax receivable agreement
9
55
Other
1
—
Adjusted EBITDA From Continuing
Operations
$
118
$
116
Revenue
$
548
$
559
Adjusted EBITDA Margin From Continuing
Operations (3)
21.5
%
20.8
%
(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,
2025
2024
(in millions, except share and per share
amounts)
Numerator:
Net Income (Loss) From Continuing
Operations Attributable to Alight, Inc. (1)
$
(17
)
$
(119
)
Conversion of noncontrolling interest
—
(2
)
Intangible amortization
71
71
Share-based compensation
6
28
Transaction and integration expenses
(2)
3
17
Restructuring
4
15
(Gain) Loss from change in fair value of
financial instruments
(8
)
21
(Gain) Loss from change in fair value of
tax receivable agreement
9
55
Other
1
—
Tax effect of adjustments (3)
(17
)
(29
)
Adjusted Net Income From Continuing
Operations
$
52
$
57
Denominator:
Weighted average shares outstanding -
basic
532,297,681
540,780,315
Dilutive effect of the exchange of
noncontrolling interest units
—
1,189,156
Dilutive effect of RSUs
—
—
Weighted average shares outstanding -
diluted
532,297,681
541,969,471
Exchange of noncontrolling interest
units(4)
510,115
4,471,277
Impact of unvested RSUs(5)
8,464,404
10,158,541
Adjusted shares of Class A Common Stock
outstanding - diluted(6)(7)
541,272,200
556,599,289
Basic (Net Loss) Earnings Per Share
From Continuing Operations
$
(0.03
)
$
(0.22
)
Diluted (Net Loss) Earnings Per Share
From Continuing Operations
$
(0.03
)
$
(0.22
)
Adjusted Diluted Earnings Per Share
From Continuing Operations
$
0.10
$
0.10
(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
>$15.00 for any 20 trading days within a consecutive period of
30 trading days. Both tranches have a seven-year duration.
(7) Excludes approximately 10.0 million
and 14.4 million performance-based units, which represents the
gross number of shares expected to vest based on achievement of
performance conditions as of March 31, 2025 and 2024,
respectively.
Gross Profit to Adjusted Gross Profit
Reconciliation
(Unaudited)
Three Months Ended
($ in millions)
March 31, 2025
March 31, 2024
Gross Profit
$
171
$
182
Add: stock-based compensation
3
5
Add: depreciation and amortization
26
21
Adjusted Gross Profit
$
200
$
208
Gross Profit Margin
31.2
%
32.6
%
Adjusted Gross Profit Margin
36.5
%
37.2
%
Free Cash Flow
Reconciliation
(Unaudited)
Three Months Ended
($ in millions)
March 31, 2025
March 31, 2024
Non-GAAP free cash flow
reconciliation:
Cash provided by operating activities -
continuing operations
$
73
$
92
Capital expenditures
(29
)
(31
)
Non-GAAP free cash flow
$
44
$
61
Other Select Financial
Data
(Unaudited)
Three Months Ended March
31,
($ in millions)
2025
2024
Revenue
Disaggregation
Recurring
$
520
$
521
Project
28
38
Total revenue
$
548
$
559
BPaaS revenue
$
126
$
117
Gross
Profit
Total gross profit
$
171
$
182
Total gross margin
31.2
%
32.6
%
Adjusted Gross
Profit
Total adjusted gross profit
$
200
$
208
Total adjusted gross margin percent
36.5
%
37.2
%
Adjusted EBITDA
From Continuing Operations
Adjusted EBITDA From Continuing
Operations
$
118
$
116
Adjusted EBITDA Margin From Continuing
Operations
21.5
%
20.8
%
Free Cash
Flow
Free Cash Flow From Continuing
Operations
$
44
$
61
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250508327251/en/
Investors: Jeremy Cohen investor.relations@alight.com
Media: Mariana Fischbach mariana.fischbach@alight.com
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