Slide 1: 1st Quarter 2023 Earnings Presentation
1 st Quarter 2023 Earnings Presentation Alight, Inc. May 9, 2023 © 2023 Alight. All rights reserved.
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation is not considered to be prepared in accordance with GAAP and has not been prepared This presentation contains forward-looking statements within the meaning of Section 27A of the as pro forma results under applicable regulations. Securities Act
Slide 3: Growth strategy & results
Growth strategy & results © 2023 Alight. All rights reserved.
Slide 4: Strong start to 2023 with 14.6% revenue growth
Strong start to 2023 with 14.6% revenue growth versus prior year 1Q revenue ($ in millions) $831 KEY HIGHLIGHTS $725 $98 $90 Recurring revenue ↑16.3% 85.7% of total revenue $623 $723 BPaaS Revenue ↑50.0% Professional services 20.6% of total revenue Employer solutions Other Employer Solutions Adjuste
Slide 5: Transformation continues to strengthen our trajectory
Transformation continues to strengthen our trajectory 1 Executing our growth strategy improves our quality of revenue • Ongoing product innovation including latest Alight Worklife ® release, which expands access to employee spouses and families and more fully integrates wellbeing • Surpassed cumulat
Slide 6: Financial results & outlook
Financial results & outlook 6 © 2023 Alight. All rights reserved.
Slide 7: 1Q summary of consolidated results
1Q summary of consolidated results ($ in millions) 1Q23 1Q22 Change 1Q Highlights Revenue • Revenue growth of nearly 15% driven by substantial BPaaS revenue growth Total Revenue $831M $725M +14.6% • Continued to grow higher quality Revenue ex-Other $821M $713M +15.1% revenue with recurring revenue u
Slide 8: Employer Solutions robust growth leads to margin expansion
Employer Solutions robust growth leads to margin expansion Employer Solutions Employer Solutions Adjusted Revenue ($M) Gross Profit ($M)1 1Q Highlights • 17.4% growth in recurring revenue +16.1% +19.5% • Benefitting from Federal Thrift $723 $264 $623 • Adjusted gross $221 margin increased 100 basis
Slide 9: Professional Services positioned to accelerate growth
Professional Services positioned to accelerate growth Professional Services Professional Services Adjusted 1Q Highlights Revenue ($M) Gross Profit ($M) 1 • Strong bookings in 2022 led to nearly +8.9% 9% revenue growth $98 $90 +5.3% • Recurring revenue increased 10% Project $20 $19 • Continued streng
Slide 10: Capital structure supported by resilient business model
Capital structure supported by resilient business model Operating Cash Flow ($M) ($ millions) 3/31/2023 12/31/2022 Total Debt $2,816 $2,823 $72 Less Cash $239 $250 Net Debt $2,577 $2,573 • Well protected in a volatile interest rate environment • 84% fixed through 2024 and 60% through 2025 • Estimate
Slide 11: Reaffirming 2023 guidance
Reaffirming 2023 guidance (87% of revenue under contract)1 Key Factors ($ millions) FY 2023 Guidance • Accelerating growth driven by BPaaS bookings & full year impact of Federal Thrift • Professional Services project revenue expected to $3.47 – $3.51B rebound with higher backlog entering the year Re
Slide 12: Appendix – Non-GAAP Reconciliations
Appendix – Non-GAAP Reconciliations © 2023 Alight. All rights reserved.
Slide 13: Adjusted diluted EPS and modeling notes
Adjusted diluted EPS and modeling notes Adjusted diluted EPS bridge ($ millions) 2023 Notes Additional Modeling Notes Adjusted EBITDA $735-750M See page 14 • CapEx usage of ~5% revenue and W/C Depreciation $105-110M ~3% of revenue usage of ~4% revenue Interest Expense $140-150M Based on current forw
Slide 14: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (Loss) to Adjusted EBITDA Three Months Ended Three Months Ended March 31, March 31, (in millions) 2023 2022 Net Income (Loss) $ (74) $ (13) Interest expense 33 29 Income tax expense (benefit) (8) 1 Depreciation 24 17 Intangible amortization 80 79 EBITDA 55 113 Share-base
Slide 15: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliation of Gross Profit to Adjusted Gross Profit Three Months Ended March 31, 2023 ($ in millions) Employer Solutions Professional Services Other Total Gross Profit 238 19 - 257 Add: stock-based compensation 8 1 - 9 Add: depreciation and amortization 18 - 1 19 Adjusted Gross Profit 264 20 1 2
Slide 16: Reconciliation of Net Loss to Adjusted Net Income
Reconciliation of Net (Loss) Income Attributable to Alight, Inc. to Adjusted Net Income & Adjusted Diluted Earnings per Share (1) Income tax effects have been calculated based on statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix of income and adjusted for signifi