Slide 1: 3rd Quarter 2023 Earnings Presentation
3 rd Quarter 2023 Earnings Presentation Alight, Inc. November 1, 2023 © 2023 Alight. All rights reserved.
Slide 2: Disclaimer
Disclaimer Forward-looking statements as pro forma results under applicable regulations. This presentation 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. Non-GAAP fin
Slide 3: Strong 3Q performance with revenue growth of 8.4% versus prior year
Strong 3Q performance with revenue growth of 8.4% versus prior year 3Q revenue ($ in millions) $813 KEY HIGHLIGHTS $750 $105 $95 Recurring Revenue ↑8.3% 83.3% of total revenue $701 BPaaS Revenue ↑21.9% $645 Professional services 22.6% of total revenue Employer solutions Other Employer Solutions Adju
Slide 4: Powerful results grounded in success of transformation
Powerful results grounded in success of transformation 1 Broad-based demand for solutions reflected in strong quarterly bookings • Delivered $262 million in BPaaS bookings, representing growth of 26% from prior year • Cumulative bookings at 9/30/23 of nearly $2 billion, approximately $500 million ah
Slide 5: Strong 3Q revenue growth and margin expansion driving profitability
Strong 3Q revenue growth and margin expansion driving profitability ($ in millions) 3Q23 3Q22 Change 3Q Highlights • Top-line growth of 8.4% driven Revenue by strong growth in both segments and substantial BPaaS Total Revenue $813 $750 +8.4% revenue growth • Continued strong expansion in Revenue ex-
Slide 6: Employer Solutions delivering strong profitability & margin expansion
Employer Solutions delivering strong profitability & margin expansion Revenue ($M) Adjusted Gross Profit ($M)1 3Q Highlights • 8.7% growth in recurring revenue +8.7% +21.5% • Project revenue growth of 8.1% $701 $260 $645 • Adjusted gross profit $214 margin1 increased 390 basis points Recurring • Con
Slide 7: Professional Services accelerating revenue growth driven by high-profile projects
Professional Services accelerating revenue growth driven by high-profile projects Revenue ($M) Adjusted Gross Profit ($M)1 3Q Highlights • Strong bookings over +10.5% last year drove $105 double-digit revenue $95 growth +8.0% $27 • Recurring revenue $25 increased 12.5% Project • Project revenue driv
Slide 8: Strong cash flow generation and capital structure focus enhances flexibility
Strong cash flow generation and capital structure focus enhances flexibility YTD Operating Cash Flow ($M) ($ millions) 9/30/2023 12/31/2022 $251 Total Debt $2,801 $2,823 Less Cash $276 $250 $201 Net Debt $2,525 $2,573 • Completed opportunistic repricing of 2028 term loan o Improved interest rate by
Slide 9: 2023 guidance (Over 95% of revenue under contract)
2023 guidance (Over 95% of revenue under contract)1 Raised 2023 adjusted EPS guidance range $2.7 billion of 2024 revenue under contract1 FY 2023 Guidance Key Factors • Accelerating growth driven by BPaaS bookings & full-year impact of Federal Thrift $3.47 – $3.51B • Professional Services project rev
Slide 10: Appendix – Non-GAAP Reconciliations
Appendix – Non-GAAP Reconciliations © 2023 Alight. All rights reserved.
Slide 11: Adjusted diluted EPS and modeling notes
Adjusted diluted EPS and modeling notes Adjusted diluted EPS bridge 2023 Notes Additional Modeling Notes Adjusted EBITDA $735-750M See page 12 • CapEx usage of ~5% revenue and W/C Depreciation $105-110M ~3% of revenue usage of ~4% revenue Interest Expense $130-135M Based on current forward curve • 2
Slide 12: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Reconciliation of Net Loss to Adjusted EBITDA (Unaudited) Three Months Ended September 30 Nine Months Ended September 30 (in millions) 2023 2022 2023 2022 Net Income (Loss) $ (46) $ (45) $ (192) $ (6) Interest expense 34 31 100 89 Income tax exp
Slide 13: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliation of Gross Profit to Adjusted Gross Profit Three Months Ended September 30, 2023 ($ in millions) Employer Solutions Professional Services Other Total Gross Profit $ 231 $ 26 $ - $ 257 Add: stock-based compensation 9 - - 9 Add: depreciation and amortization 20 1 - 21 Adjusted Gross Profi
Slide 14: Reconciliation of Net (Loss) Income Attributable to Alight, Inc. to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net (Loss) Income Attributable to Alight, Inc. to Adjusted Net Income & Adjusted Diluted Earnings per Share Reconciliation of Net Income (Loss) Attributable to Alight, Inc. to Adjusted Net Income and Adjusted Diluted Earnings per Share (Unaudited) (1) Income tax effects have been c