Alight, Inc. · NYSE:ALIT
Alight — Q2 2024 Earnings Presentation
29 slides from Alight's earnings presentation, Aug 6, 2024
Slide 1: 2nd Quarter 2024 Earnings Presentation
2 nd Quarter 2024 Earnings Presentation Alight, Inc. August 6, 2024 © 2024 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 as pro forma This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as results under applicable r
Slide 3: New chapter for Alight focused on sustainable & profitable growth
New chapter for Alight focused on sustainable & profitable growth 1 Divestiture of Payroll & Professional Services business complete • Completed sale on July 12th, 2024 for $1.0 billion in upfront gross proceeds, with up to $200 million in seller notes • Proceeds used for repaying debt; remaining pr
Slide 4: Latest Alight Worklife release builds on strong AI foundation
Latest Alight Worklife® release builds on strong AI foundation to advance efficiency & enhance employee experience and guidance Increasing efficiency and automation AI-based automatic claims processing and expanded app self- service features improve quality and efficiency Engaging user experience Ad
Slide 5: Financial results
Financial results 5 © 2024 Alight. All rights reserved.
Slide 6: Background regarding proforma adjusted supplemental financial results
Background regarding proforma adjusted supplemental financial results Proforma adjusted supplemental financial results are designed to show the impact of the sale of the Payroll and Professional Services business as if it had happened at the beginning of 2023 with the objective of providing better c
Slide 7: Continuing Operations results - As reported
Continuing Operations results - As reported ($ in millions) 2Q24 2Q23 Change Revenue Total Revenue $538 $561 -4.1% Revenue ex-Other (Hosted) $538 $552 -2.5% BPaaS Revenue $115 $102 +12.7% Adjusted Gross Profit1 $196 $212 -7.5% % margin 36.4% 37.8% -140 bps Adjusted EBITDA2 $105 $119 -11.8% % margin
Slide 8: Continuing Operations results - Proforma adjusted financials
Continuing Operations results - Proforma adjusted financials (Supplemental financials exclude Hosted, Payroll & Professional Services) ($ in millions) 2Q24 2Q23 Change Revenue Total Revenue $550 $561 -2.0% BPaaS Revenue $115 $102 +12.7% Adjusted Gross Profit1 $219 $228 -3.9% % margin 39.8% 40.6% -80
Slide 9: Key Drivers of Revenue Growth
Key Drivers of Revenue Growth Growth Model 2024 Expectations 1 Revenue from New Wins: Bookings with new logos & existing client +6 - 8% 4 - 5% expansions that go-live and add revenue to the existing base of recurring revenue including project revenue sold during current year 2 Volumes: Our revenue b
Slide 10: Path to Growth Model
Path to Growth Model +1 – 3% 4 - 6% +2 – 3% +2% (3) – (2)% 2024 Revenue Volume New Logos & Products, Pricing Target Annual Growth normalization Client Model & Revenue Growth Expansion Retention Near-term Mid-term COBRA volume Go-to-market momentum: Focus on services, partner headwind subsides in Exp
Slide 11: 2nd Half 2024 guidance
2nd Half 2024 guidance (97% of 2024 revenue under contract) 2H 2024 Guidance Modeling Considerations Revenue $1,207 – $1,232 (3) – (1)%1 • Recurring revenue growth expected to ramp through year with second half weight due to timing of 2023 bookings & COBRA volume BPaaS Revenue $265 - 275M 15%1 • Non
Slide 12: 2nd Half 2024 adjusted diluted EPS and modeling notes
2nd Half 2024 adjusted diluted EPS and modeling notes Adjusted diluted EPS bridge 2H 2024 Notes Annual Modeling Notes Adjusted EBITDA $326-351M See slide 11 • Capital Expenditures4 mid-term target Depreciation $60-65M 5-6% of revenue ~4-5% of revenue, above 5% in 2024 Interest Expense $40-50M Based
Slide 13: Capital structure strengthened by numerous completed initiatives
Capital structure strengthened by numerous completed initiatives Continuing Operations Operating Cash Flow ($M) ($ millions) 6/30/2024 12/31/2023 $113 Total Debt $2,780 $2,794 $93 Less Cash1 $183 $324 0.6x Net Debt2 $2,597 $2,470 • Repaid $740 million of debt from transaction proceeds in July 2024 -
Slide 14: Appendix – Proforma Adjusted Financials
Appendix – Proforma Adjusted Financials © 2024 Alight. All rights reserved.
Slide 15: Total Revenue Disaggregation with Proforma Adjustments
Total Revenue Disaggregation with Proforma Adjustments (unaudited) Three Months Ended Three Months Ended June 30, June 30, ($ in millions) 2024 2023 Revenue: Recurring $ 493 $ 505 Proforma Adjustments 12 9 Recurring - adjusted 505 514 Project 45 47 Total Revenue, excluding Hosted 550 561 Hosted Reve
Slide 16: Reconciliation of Gross Profit to Adjusted Gross Profit with Proforma Adjustments
Reconciliation of Gross Profit to Adjusted Gross Profit with Proforma Adjustments (unaudited) Three Months Ended Three Months Ended June 30, 2024 June 30, 2023 ($ in millions) Gross Profit $ 167 $ 189 Add: stock-based compensation 3 7 Add: depreciation and amortization 26 17 Add: Proforma Adjustment
Slide 17: Reconciliation of Net Income (Loss) to Adjusted EBITDA with Proforma Adjustments
Reconciliation of Net Income (Loss) to Adjusted EBITDA with Proforma Adjustments (unaudited) Three Months Three Months Ended Ended June 30, June 30, (in millions) 2024 2023 Net Income (Loss) From Continuing Operations $ (4) $ (72) Interest expense 33 33 Income tax expense (benefit) 2 (8) Depreciatio
Slide 18: Reconciliation of Net Income (Loss) Attributable to Alight, Inc. to Adjusted Net Income
Reconciliation of Net Income(Loss) Attributable to Alight, Inc. to Adjusted Net Income and Adjusted Diluted EPS with Proforma Adjustments (unaudited) Three Months Ended Three Months Ended June 30, June 30, 2024 2023 (in millions, except share and per share amounts) Numerator: Net Income (Loss) Attri
Slide 19: Reconciliation of Operating Cash Flow with Proforma Adjustments
Reconciliation of Operating Cash Flow with Proforma Adjustments (unaudited) (in millions) Six Months Ended June 30, 2024 2023 Net cash provided by operating activities $ 93 $ 113 Proforma Adjustments 52 42 Net cash provided by operating activities w/ proforma adjs 145 155 19 Note: Proforma adjustmen
Slide 20: Appendix – Non-GAAP Reconciliations for Continuing Operations
Appendix – Non-GAAP Reconciliations for Continuing Operations 20 © 2024 Alight. All rights reserved.
Slide 21: Reconciliation of Continuing Operations Net Income (Loss) to Adjusted EBITDA
Reconciliation of Continuing Operations Net Income (Loss) to Adjusted EBITDA (unaudited) 21 © 2024 Alight. All rights reserved.
Slide 22: Reconciliation of Continuing Operations Gross Profit to Adjusted Gross Profit
Reconciliation of Continuing Operations Gross Profit to Adjusted Gross Profit (unaudited) 22 © 2024 Alight. All rights reserved.
Slide 23: Reconciliation of Continuing Operations Net Income to Adjusted Net Income and EPS
Reconciliation of Continuing Operations Net (Loss) Income From Continuing Operations to Adjusted Net Income & Adjusted Diluted Earnings per Share From Continuing Operations (unaudited) (1) Excludes the impact of discontinued operations. Comparable periods have been recast to exclude these impacts. (
Slide 24: Appendix – Non-GAAP Reconciliations for Total Company
Appendix – Non-GAAP Reconciliations for Total Company (Discontinued & Continuing Operations) © 2024 Alight. All rights reserved.
Slide 25: Total Company second quarter summary results
Total Company second quarter summary results 2Q Revenue 2Q Adj. EBITDA1 ($ in millions) ($ in millions) $157 $806 $787 $145 $245 $249 EBITDA Margin % 19.5% 18.4% $552 $538 $9 2Q23 2Q24 2Q23 2Q24 Discontinued Ops Continuing Ops Other Adj. EBITDA 1Adjusted EBITDA is defined as earnings before interest
Slide 26: Reconciliation of Total Company Net Income (Loss) to Adjusted EBITDA
Reconciliation of Total Company Net Income (Loss) to Adjusted EBITDA (unaudited) 26 © 2024 Alight. All rights reserved.
Slide 27: Reconciliation of Total Company Net Income to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Total Company Net (Loss) Income Attributable to Alight, Inc. to Adjusted Net Income & Adjusted Diluted Earnings per Share (unaudited) (1) Transaction and integration expenses primarily relate to acquisition and divestiture activities. (2) Income tax effects have been calculated bas
Slide 28: Reconciliation of Total Company Gross Profit to Adjusted Gross Profit
Reconciliation of Total Company Gross Profit to Adjusted Gross Profit (unaudited) 28 © 2024 Alight. All rights reserved.
Slide 29: Total Company Revenue Disaggregation
Total Company Revenue Disaggregation (unaudited) 29 © 2024 Alight. All rights reserved.