Alight, Inc. (NYSE: ALIT), a leading benefits administration provider of health, wealth and leave solutions, today reported results for the third quarter ended September 30, 2026.
Rohit Verma, Chief Executive Officer of Alight, commented, “We are pleased to have surpassed revenue and adjusted EBITDA expectations for the third consecutive quarter, reflecting our continued execution of our long-term strategy to bolster Alight’s leadership position in the market and return to positive commercial momentum. In the quarter, we significantly improved retention metrics, further strengthened our leadership team with the addition of Bruce Wolfe as our Wealth leader, delivered several features on our AI roadmap and added differentiating capabilities with the acquisition of Abett.
“Our demonstrated progress with our transformation initiatives has enabled us to win several new logos and expand our relationships with existing clients. We also expanded account coverage to relationships which represent over 95% of recurring revenue. We are confident that we have the team, tools and strategy in place to continue creating a clear pathway to delivering enhanced operational and service excellence.”
Summary of Third Quarter 2026 Results
Three Months Ended September 30, | |||||||||||
in millions | 2026 | 2025 | Change | ||||||||
Revenue | $ | 500 | $ | 533 | $ | (33 | ) | ||||
Gross Profit | 135 | 178 | (43 | ) | |||||||
Adjusted Gross Profit | 168 | 206 | (38 | ) | |||||||
Net Income (Loss) | (51 | ) | (1,068 | ) | 1,017 | ||||||
Adjusted EBITDA | 86 | 138 | (52 | ) | |||||||
NOTE: the information contained in this earnings release reflects the impact of the previously announced 1-for-20 reverse stock split of the Company's Class A common stock, Class B non-voting common stock (including the Class B-1 common stock and Class B-2 common stock) and Class V common stock (including treasury shares), effective on June 30, 2026. All share and per share amounts contained in this earnings release have been retroactively adjusted to reflect the reverse stock split for all periods presented. | |||||||||||
Revenue decreased 6.2% to $500 million, as compared to $533 million in the prior year. The change was primarily due to lower net commercial activity. Recurring revenues were 91.6% of total revenue.
Gross profit was $135 million, or 27.0% of revenue, compared to $178 million, or 33.4% of revenue, in the prior year. The decrease in gross profit was primarily attributable to lower revenues and an increase in compensation expense, partially offset by cost savings initiatives.
Selling, general and administrative expenses increased by $35 million compared to the prior year, primarily due to higher severance and other restructuring costs, compensation expense and professional fees.
Interest expense of $25 million increased $1 million from the prior year. The increase was due to higher interest expense net of swaps and lower interest income.
The Company’s loss from continuing operations before income tax was $70 million compared to a loss from continuing operations before income tax of $1,253 million in the prior year. The improvement was primarily attributable to the $1,338 million non-cash goodwill impairment in the prior year partially offset by the non-operating fair value remeasurements of the tax receivable agreement and financial instruments.
Balance Sheet Highlights
As of September 30, 2026, the Company’s cash and cash equivalents balance was $212 million, total debt was $1,991 million and total debt net of cash and cash equivalents was $1,779 million.
2026 Business Outlook
Full Year
- Revenues in the range of $2,115 million to $2,125 million
- Adjusted EBITDA in the range of $410 million to $420 million
Reconciliations of the historical financial measures used in this earnings 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 third quarter 2026 financial results is scheduled for today, November 3, 2026 at 3:30 p.m. Central Time (4:30 p.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 benefits administration provider of health, wealth, leave and point solutions for many of the world’s largest organizations and over 30 million people. 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 at alight.com.
Forward-Looking Statements
This earnings 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 leadership position, our commercial momentum, our ARR, our ability to deliver enhanced operational and service excellence, and outlook for Alight’s business, financial results, liquidity and capital resources, including statements in the "Business Outlook" section of this earnings 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 associated with competition, our ability to successfully execute the next phase of our strategic transformation, an inability to successfully execute on operational and technological enhancements designed to drive value for our clients or drive internal efficiencies, issues relating to the use of new and evolving technologies, such as Artificial Intelligence (“AI”) and Machine Learning (“ML”), we may not achieve our financial projections, which could have an adverse effect on our business, operating results, and financial condition, cyber-attacks and security vulnerabilities and other significant disruptions in our information technology systems and networks that could expose us to legal liability, impair its reputation or have a negative effect on our results of operations, our handling of confidential, personal or proprietary data, actions or proposals from activist stockholders, the precision of assumptions underlying certain reported measures, and compliance with applicable laws or 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 24, 2026, 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 earnings release 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 earnings 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.
Annual Recurring Revenue bookings is an operational metric that represents management’s estimate of new long-term agreements closed in the period referenced. Our ARR bookings metric does not reflect potential future events such as unexpected client volume fluctuations, early contract terminations or early contract renewals. This 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) | 2026 | 2025 | 2026 | 2025 | |||||||||||
Revenue | $ | 500 | $ | 533 | $ | 1,545 | $ | 1,609 | |||||||
Cost of services, exclusive of depreciation and amortization | 334 | 327 | 1,018 | 1,003 | |||||||||||
Depreciation and amortization | 31 | 28 | 94 | 81 | |||||||||||
Gross Profit | 135 | 178 | 433 | 525 | |||||||||||
Operating Expenses | |||||||||||||||
Selling, general and administrative | 122 | 87 | 336 | 321 | |||||||||||
Depreciation and intangible amortization | 74 | 75 | 220 | 223 | |||||||||||
Goodwill impairment | — | 1,338 | — | 2,321 | |||||||||||
Total Operating expenses | 196 | 1,500 | 556 | 2,865 | |||||||||||
Operating Income (Loss) From Continuing Operations | (61 | ) | (1,322 | ) | (123 | ) | (2,340 | ) | |||||||
Other (Income) Expense | |||||||||||||||
(Gain) Loss from change in fair value of financial instruments | — | (19 | ) | — | 1 | ||||||||||
(Gain) Loss from change in fair value of tax receivable agreement | (15 | ) | (66 | ) | (80 | ) | (34 | ) | |||||||
Interest expense | 25 | 24 | 73 | 68 | |||||||||||
Other (income) expense, net | (1 | ) | (8 | ) | (1 | ) | (26 | ) | |||||||
Total Other (income) expense, net | 9 | (69 | ) | (8 | ) | 9 | |||||||||
Income (Loss) From Continuing Operations Before Taxes | (70 | ) | (1,253 | ) | (115 | ) | (2,349 | ) | |||||||
Income tax expense (benefit) | (19 | ) | (198 | ) | (35 | ) | (204 | ) | |||||||
Net Income (Loss) From Continuing Operations | (51 | ) | (1,055 | ) | (80 | ) | (2,145 | ) | |||||||
Net Income (Loss) From Discontinued Operations, Net of Tax | — | (13 | ) | — | (22 | ) | |||||||||
Net Income (Loss) | (51 | ) | (1,068 | ) | (80 | ) | (2,167 | ) | |||||||
Net income (loss) attributable to noncontrolling interests | — | (1 | ) | — | (2 | ) | |||||||||
Net Income (Loss) Attributable to Alight, Inc. | $ | (51 | ) | $ | (1,067 | ) | $ | (80 | ) | $ | (2,165 | ) | |||
Earnings (Loss) Per Share | |||||||||||||||
Basic and Diluted | |||||||||||||||
Continuing operations | $ | (1.93 | ) | $ | (40.03 | ) | $ | (3.04 | ) | $ | (80.99 | ) | |||
Discontinued operations | $ | — | $ | (0.49 | ) | $ | — | $ | (0.83 | ) | |||||
Net Income (Loss) | $ | (1.93 | ) | $ | (40.52 | ) | $ | (3.04 | ) | $ | (81.82 | ) | |||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited) | |||||||
September 30,
|
December 31,
| ||||||
(in millions, except par values) | |||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 212 | $ | 273 | |||
Receivables, net | 334 | 387 | |||||
Other current assets | 186 | 234 | |||||
Fiduciary assets | 236 | 248 | |||||
Total Current Assets | 968 | 1,142 | |||||
Goodwill | 83 | 83 | |||||
Intangible assets, net | 2,363 | 2,573 | |||||
Fixed assets, net | 330 | 378 | |||||
Deferred tax assets, net | 46 | 15 | |||||
Other assets | 404 | 377 | |||||
Total Assets | $ | 4,194 | $ | 4,568 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities | |||||||
Current Liabilities | |||||||
Accounts payable and accrued liabilities | $ | 232 | $ | 253 | |||
Current portion of long-term debt, net | 20 | 20 | |||||
Other current liabilities | 196 | 353 | |||||
Fiduciary liabilities | 236 | 248 | |||||
Total Current Liabilities | 684 | 874 | |||||
Deferred tax liabilities | 15 | 14 | |||||
Long-term debt, net | 1,971 | 1,985 | |||||
Long-term tax receivable agreement | 428 | 508 | |||||
Other liabilities | 115 | 141 | |||||
Total Liabilities | $ | 3,213 | $ | 3,522 | |||
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, 50.0 shares authorized; 28.5 and 28.3 shares issued, and 26.4 and 26.2 shares outstanding as of September 30, 2026 and December 31, 2025, respectively | — | — | |||||
Class B Common Stock: $0.0001 par value, 1.0 shares authorized; 0.5 and 0.5 issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | — | — | |||||
Class V Common Stock: $0.0001 par value, 8.8 shares authorized; 0.02 and 0.02 issued and outstanding as of September 30, 2026 and December 31, 2025, respectively | — | — | |||||
Class Z Common Stock: $0.0001 par value, 0.6 shares authorized; none issued and outstanding | — | — | |||||
Treasury stock, at cost (2.1 and 2.1 shares at September 30, 2026 and December 31, 2025, respectively) | (284 | ) | (284 | ) | |||
Additional paid-in-capital | 5,084 | 5,065 | |||||
Accumulated deficit | (3,837 | ) | (3,757 | ) | |||
Accumulated other comprehensive income | 16 | 20 | |||||
Total Alight, Inc. Stockholders' Equity | $ | 979 | $ | 1,044 | |||
Noncontrolling interest | 2 | 2 | |||||
Total Stockholders' Equity | $ | 981 | $ | 1,046 | |||
Total Liabilities and Stockholders' Equity | $ | 4,194 | $ | 4,568 | |||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
(in millions) | 2026 | 2025 | |||||
Operating activities: | |||||||
Net Income (Loss) From Continuing Operations | $ | (80 | ) | $ | (2,145 | ) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation | 104 | 93 | |||||
Intangible asset amortization | 210 | 211 | |||||
Noncash lease expense | 6 | 5 | |||||
Financing fee and premium amortization | 1 | 1 | |||||
Share-based compensation expense | 19 | 14 | |||||
(Gain) loss from change in fair value of financial instruments | — | 1 | |||||
(Gain) loss from change in fair value of tax receivable agreement | (80 | ) | (34 | ) | |||
Deferred tax expense (benefit) | (30 | ) | (197 | ) | |||
Goodwill impairment | — | 2,321 | |||||
Other | 21 | 11 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 53 | 72 | |||||
Accounts payable and accrued liabilities | (21 | ) | (96 | ) | |||
Other assets and liabilities | (22 | ) | (21 | ) | |||
Cash provided by operating activities - continuing operations | 181 | 236 | |||||
Cash provided by operating activities - discontinued operations | — | — | |||||
Net cash provided by operating activities | $ | 181 | $ | 236 | |||
Investing activities: | |||||||
Net proceeds from sale of business | — | (13 | ) | ||||
Capital expenditures | (73 | ) | (85 | ) | |||
Cash provided by (used in) investing activities - continuing operations | (73 | ) | (98 | ) | |||
Cash used in investing activities - discontinued operations | — | — | |||||
Net cash provided by (used in) investing activities | $ | (73 | ) | $ | (98 | ) | |
Financing activities: | |||||||
Dividend payments | (1 | ) | (65 | ) | |||
Net increase (decrease) in fiduciary liabilities | (12 | ) | (12 | ) | |||
Repayments to banks | (15 | ) | (15 | ) | |||
Principal payments on finance lease obligations | (14 | ) | (17 | ) | |||
Payments on tax receivable agreements | (136 | ) | (100 | ) | |||
Tax payment for shares/units withheld in lieu of taxes | (1 | ) | (12 | ) | |||
Repurchase of shares | — | (65 | ) | ||||
Other financing activities | (1 | ) | (2 | ) | |||
Cash used in financing activities - continuing operations | (180 | ) | (288 | ) | |||
Cash provided by (used in) financing activities - discontinued operations | — | — | |||||
Net Cash provided by (used in) financing activities | $ | (180 | ) | $ | (288 | ) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash - continuing operations | (1 | ) | — | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | (73 | ) | (150 | ) | |||
Cash, cash equivalents and restricted cash balances from: | |||||||
Continuing operations - beginning of year | $ | 521 | $ | 582 | |||
Continuing operations - end of period | $ | 448 | $ | 432 | |||
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) | 2026 | 2025 | 2026 | 2025 | |||||||||||
Net Income (Loss) From Continuing Operations | $ | (51 | ) | $ | (1,055 | ) | $ | (80 | ) | $ | (2,145 | ) | |||
Interest expense | 25 | 24 | 73 | 68 | |||||||||||
Income tax expense (benefit) | (19 | ) | (198 | ) | (35 | ) | (204 | ) | |||||||
Depreciation | 35 | 33 | 104 | 93 | |||||||||||
Intangible amortization | 70 | 70 | 210 | 211 | |||||||||||
EBITDA From Continuing Operations | 60 | (1,126 | ) | 272 | (1,977 | ) | |||||||||
Share-based compensation | 8 | 3 | 19 | 14 | |||||||||||
Transaction and integration expenses (1) | 2 | 4 | 9 | 12 | |||||||||||
Restructuring | 25 | 4 | 53 | 44 | |||||||||||
(Gain) Loss from change in fair value of financial instruments | — | (19 | ) | — | 1 | ||||||||||
(Gain) Loss from change in fair value of tax receivable agreement | (15 | ) | (66 | ) | (80 | ) | (34 | ) | |||||||
Goodwill impairment and other (2) | 6 | 1,338 | 9 | 2,323 | |||||||||||
Adjusted EBITDA From Continuing Operations (3) | $ | 86 | $ | 138 | $ | 282 | $ | 383 | |||||||
Revenue | $ | 500 | $ | 533 | $ | 1,545 | $ | 1,609 | |||||||
Adjusted EBITDA Margin From Continuing Operations (4) | 17.2 | % | 25.9 | % | 18.3 | % | 23.8 | % | |||||||
(1) Transaction and integration expenses primarily relate to acquisition and divestiture activities. | |||||||||||||||
(2) Goodwill impairment and other primarily includes $6 million of certain professional fees incurred in connection with our debt refinancing activities for the three and nine months ended September 30, 2026 and $1,338 million and $2,321 million non-cash goodwill impairment charges for the three and nine months ended September 30, 2025, respectively. | |||||||||||||||
(3) Adjusted EBITDA From Continuing Operations excludes the impact of discontinued operations. | |||||||||||||||
(4) 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, | ||||||||||||||
2026 | 2025 | 2026 | 2025 | ||||||||||||
(in millions, except share and per share amounts) | |||||||||||||||
Numerator: | |||||||||||||||
Net Income (Loss) From Continuing Operations Attributable to Alight, Inc. (1) | $ | (51 | ) | $ | (1,054 | ) | $ | (80 | ) | $ | (2,143 | ) | |||
Conversion of noncontrolling interest | — | (1 | ) | — | (2 | ) | |||||||||
Intangible amortization | 70 | 70 | 210 | 211 | |||||||||||
Share-based compensation | 8 | 3 | 19 | 14 | |||||||||||
Transaction and integration expenses (2) | 2 | 4 | 9 | 12 | |||||||||||
Restructuring | 25 | 4 | 53 | 44 | |||||||||||
(Gain) Loss from change in fair value of financial instruments | — | (19 | ) | — | 1 | ||||||||||
(Gain) Loss from change in fair value of tax receivable agreement | (15 | ) | (66 | ) | (80 | ) | (34 | ) | |||||||
Goodwill impairment and other (3) | 6 | 1,338 | 9 | 2,323 | |||||||||||
Tax effect of adjustments (4) | (26 | ) | (217 | ) | (60 | ) | (256 | ) | |||||||
Adjusted Net Income From Continuing Operations | $ | 19 | $ | 62 | $ | 80 | $ | 170 | |||||||
Denominator: | |||||||||||||||
Weighted average shares outstanding - basic | 26,421,717 | 26,328,838 | 26,337,271 | 26,460,333 | |||||||||||
Dilutive effect of the exchange of noncontrolling interest units | — | — | — | — | |||||||||||
Dilutive effect of RSUs | — | — | — | — | |||||||||||
Weighted average shares outstanding - diluted | 26,421,717 | 26,328,838 | 26,337,271 | 26,460,333 | |||||||||||
Exchange of noncontrolling interest units(5) | 23,457 | 25,505 | 23,961 | 25,505 | |||||||||||
Impact of unvested RSUs(6) | 2,232,131 | 414,480 | 2,232,131 | 414,480 | |||||||||||
Adjusted shares of Class A Common Stock outstanding - diluted(7)(8) | 28,677,305 | 26,768,823 | 28,593,363 | 26,900,318 | |||||||||||
Basic (Net Loss) Earnings Per Share From Continuing Operations | $ | (1.93 | ) | $ | (40.03 | ) | $ | (3.04 | ) | $ | (80.99 | ) | |||
Diluted (Net Loss) Earnings Per Share From Continuing Operations | $ | (1.93 | ) | $ | (40.03 | ) | $ | (3.04 | ) | $ | (80.99 | ) | |||
Adjusted Diluted Earnings Per Share From Continuing Operations | $ | 0.66 | $ | 2.32 | $ | 2.80 | $ | 6.32 | |||||||
(1) Excludes the impact of discontinued operations. | |||||||||||||||
(2) Transaction and integration expenses primarily relate to acquisition and divestiture activities. | |||||||||||||||
(3) Goodwill impairment and other primarily includes $6 million of certain professional fees incurred in connection with our debt refinancing activities for the three and nine months ended September 30, 2026 and $1,338 million and $2,321 million non-cash goodwill impairment charges for the three and nine months ended September 30, 2025, respectively. | |||||||||||||||
(4) 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. | |||||||||||||||
(5) 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. | |||||||||||||||
(6) Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes. | |||||||||||||||
(7) Excludes two tranches of contingently issuable seller earnout shares: (i) 0.4 million shares will be issued if the Company's Class A Common Stock's volume-weighted average price ("VWAP") is >$250.00 for any 20 trading days within a consecutive period of 30 trading days; and (ii) 0.4 million shares will be issued if the Company's Class A Common Stock VWAP is >$300.00 for any 20 trading days within a consecutive period of 30 trading days. Both tranches have a seven-year duration. | |||||||||||||||
(8) Excludes approximately 2.1 million and 0.1 million performance-based units, which represents the gross number of shares expected to vest based on achievement of performance and market conditions as of September 30, 2026 and 2025, respectively. | |||||||||||||||
Gross Profit to Adjusted Gross Profit Reconciliation | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
($ in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||
Gross Profit | $ | 135 | $ | 178 | $ | 433 | $ | 525 | |||||||
Add: stock-based compensation | 2 | — | 6 | 5 | |||||||||||
Add: depreciation and amortization | 31 | 28 | 94 | 81 | |||||||||||
Adjusted Gross Profit | $ | 168 | $ | 206 | $ | 533 | $ | 611 | |||||||
Gross Profit Margin | 27.0 | % | 33.4 | % | 28.0 | % | 32.6 | % | |||||||
Adjusted Gross Profit Margin | 33.6 | % | 38.6 | % | 34.5 | % | 38.0 | % | |||||||
Free Cash Flow Reconciliation | |||||||
(Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
($ in millions) | 2026 | 2025 | |||||
Non-GAAP free cash flow reconciliation: | |||||||
Cash provided by operating activities - continuing operations | $ | 181 | $ | 236 | |||
Capital expenditures | (73 | ) | (85 | ) | |||
Non-GAAP free cash flow | $ | 108 | $ | 151 | |||
Other Select Financial Data | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
($ in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||
Revenue Disaggregation | |||||||||||||||
Recurring | $ | 458 | $ | 489 | $ | 1,427 | $ | 1,501 | |||||||
Project | 42 | 44 | 118 | 108 | |||||||||||
Total revenue | $ | 500 | $ | 533 | $ | 1,545 | $ | 1,609 | |||||||
Gross Profit | |||||||||||||||
Total gross profit | $ | 135 | $ | 178 | $ | 433 | $ | 525 | |||||||
Total gross margin | 27.0 | % | 33.4 | % | 28.0 | % | 32.6 | % | |||||||
Adjusted Gross Profit | |||||||||||||||
Total adjusted gross profit | $ | 168 | $ | 206 | $ | 533 | $ | 611 | |||||||
Total adjusted gross margin percent | 33.6 | % | 38.6 | % | 34.5 | % | 38.0 | % | |||||||
Adjusted EBITDA From Continuing Operations | |||||||||||||||
Adjusted EBITDA From Continuing Operations | $ | 86 | $ | 138 | $ | 282 | $ | 383 | |||||||
Adjusted EBITDA Margin From Continuing Operations | 17.2 | % | 25.9 | % | 18.3 | % | 23.8 | % | |||||||
Free Cash Flow | |||||||||||||||
Free Cash Flow From Continuing Operations | $ | 108 | $ | 151 | |||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20261103656676/en/