ALIT - Earnings call 4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and thank you for holding. My name is Ryan, and I will be your conference operator today. Welcome to Alight Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all parties are in listen-only mode.

As a reminder, today's call is being recorded, and a replay of the call will be available in the Investor Relations section of the company's website. like President the Alight. of would Jeremy over I Vice Cohen, Investor now to call turn to And Relations at go ahead. Please

Jeremy Cohen

the found year website XXXX Good us. A the copy release you company's thank release results. Investor fourth company can Relations the today, of be with full morning, press the issued at and for quarter investor.alight.com. of a in and Earlier joining section

statements. of from today updated The Such company company's please XX-K, started, the that the over the call up Rooney, Heaton, hand obligation of recent variety detail of appear will COO, Form the open presenting , note filings. release.On measures. GAAP most measures remarks, company factors comparable the from for guarantees more include Scholl, discussion future company's Operating the prepared financial this earnings now certain may such from periodic forward-looking today's company's in in non-GAAP non-GAAP and update will questions. or statements Reconciliations Before conference call, directly forward-looking Actual Stephan. we the will any call get company's filings to in CFO. CEO; today of measures call may Stephan to Global be factors historical financial time-to-time most a forward-looking management financial will their statements.Also, the press as the some in we Jeremy are I statements in be Katie are the SEC, CFO not those during and to After their factors.These to are results company's due implied does discussed with forward-looking including performance. differ expressed undertake not materially the

Stephan Scholl

plan. Thanks, Jeremy, marks initial and morning. end X-year the Today our of good

product capability financially HR is staying delivering Our secure. kind supports and aggressive that first and of platform its technology a employees transformation integrated healthy

the a center into common solutions experience months people cloud. enrollment. SaaS-based from tripling interactions through were of out did data this, XX exist over have XXX to able million usage the million XX over annual year platform a our a mobile better of and not all X,XXX taken by clients private ago. we upgraded and This Because to deliver capability custom We a of for

and million enhancements $X.X $X also over and being over enter better record up allowed ago. on is is us a BPaaS to XX% to platform, NielsenIQ, times and generated foundation average the by a and This $XXX to that by this billion delivered this, AI have for millions modules, XX% over X,XXX which of has still that built we have our per our the participant our of contract us, billion, satisfaction, high-growth customer have years employees and while of It backlog CAGR to product us all that driven with wins per Within XXXX revenue support engagement means bookings X-year future capabilities. as under has because And are over such Siemens This attributable reducing these of which year. of from year; is solutions have from BPaaS is average, driving participant. MasterBrand AI AI XX per cumulative our in our engaging calls is This revenue XX%. a XX% on plan. taken savings rates record the allowed few content included decision $XXX name to achieving add Healthineers investments X people with

record in digits, in outlook. and XXXX. in from of flow financial we've to track increasing Our grower us XXXX conversion millions midterm that a strategy the XX% has our single-digit from dollars hundreds of confidence cash this to our enabled reaffirm gives Alight low to while XX% mid-single profit move operating It added is to

we fact, platform strategy. and well-being our advance opportunities are there In to believe

financial becoming recurring this a business. conducting and value we margin and faster portfolio been for financial hired review, higher and who our of We doing have revenue a to advisers have we In move deliver our clients, strategic review more objectives accelerate believe shareholders. can strategic even to midterm colleagues

this client, you isolated also In in term. experienced which about deliver impact quarter activity and shortfall the growth a of the offset impact X% revenue Retiree see, efforts can for we did we from year, As nearly year. Medicare the for and annual Alight's to short of was renewal majority while a term, plans growth this we're Absent Mitigation an our the specific the This our December, event. Retiree short the nonrecurring long excited late business represented not of have revenue significant in business, in and Health the XX%. of for expectations. resulted is

with For and the growth. XXX double-digit points quarter, adjusted EBITDA adjusted both EBITDA gross over margins basis adjusted expanded margin

momentum the period win an nearly million XQ, Sales of with BPaaS continued GE. even finished grew the comparable without with half of also XX%. $XXX ahead XXXX, extraordinary second like bookings combined XXXX, We revenues new of in and the BPaaS of benefit

our to financial Turning XXXX outlook.

expect bookings, business We of growth hosted over of compared of to X% timing the year-over-year the the federal the to thrift. XX% XXXX and impact exit BPaaS our the adjusted growth between growth and and X% X% XX%. from of revenue EBITDA reflects Revenue

build have space, globally. in by collection to organizations us X platform the infrastructure the most transformation, the it As the most the X%. on few track guidance Katie a this years, record will years; midterm comprehensive to complex in proud to leader transform of support XX and backlog but growth has in building of our become function. pipeline, than extended our not the years took position revenue less Jeremy told, to leadership over the I'm to our we just past on X% achieve and And incredibly discuss way of All our executed XXXX, are strong our to with content cloud-based HR with we team

a shop bend output a productivity. helps employee one-stop curve that experience deliver the the enhanced better them with and is clients, For cost

through solve we're costs, and chose health productivity. Alight Alight employees to its while its receive of focused Siemens well-being employees of and support helping review, employees, rollout, and navigate Let of confidence, with has medical the opportunity tech-enabled benefits client opinions, Upon top services employees. give or and is about choose the XXXX the navigation to high-touch, health eligible the and optimizing decision program.I've helping and and value a employees enterprise satisfaction. facilities may and medical length only health outcomes provide an bill companies to to to results for clients and employee ecosystem improve driving get people me all since spoken of Siemens for level. platform their expert on seek been an at surgery improve manage an client the is is believe an care that where experience dependents example way doctors to not at health only outcomes, but even engaging complexity that the Siemens

driving the financial health engaging across drives and tools an amazing ecosystem see existing to care savings directing their being our this lower on currently for new seeing clients excited employees' helping proof if As that's insights over ever why X.Xx and And they hub, including by developing product choices. outcomes these the Alight LumenAI in a innovation AI are benefits which to hire engage. realized X.X deliver guidance, today, overpayment we year believe year to in mobile realize recently the $XXX helping WorklifeÂ® over our give it automation by second monthly half. is solving Jeremy trust our represent employees are for value that we this interactions road than engines value a hires. decisions. and and platform. HR focused complement discuss through facilitate personalized financial you. across some million XX% all lastly, penetration. health experience also I'm executing is all document laid that, prior counselors platform digital average on LumenAI use of the intelligent our matters excited health Helping unified the outlook. care of turn by personalized guide will a that Examples security. means Katie, such more cloud better and This clients work interactions novel means clients a users, growing piloted processing. retailer impacting we've great XX% and experience and virtual another our $XX financially from map catalyst first, better the will new This to outcomes for these and out our an personalization their turnover migration, the start real million. great possible AI second, Alight. nearly payroll I a we've large central most And while spend as entire do to are the interconnected launched our on I'll points Overall, company, better and day merge to next-generation LumenAI. doubled Total the it because mobile-based end, client campaigns, like the drive the platform I'm track be reduce for our to engine, We'll to them, completion every capabilities product clients, engine million real seeing into been performance is continue for nearly million. $XX it the nearly by Alight had done assistant solutions. new the engagement health midyear. that mobile nearly the decisions their without only our technology our to verified financial leveraging of for be These To client to will With attributable their strategy. complex introduce value the organization and outcomes onboarding AI-based outcomes, not to Katie importance drive and We To large for quarter, measurable platform for through increase in a will just over creating and when in would program our foundation And users happen product perspective, sequentially. benefits That's and employees and support more

Katie Rooney

with of We robust Thank record and $X you, of plan bookings under a our year backlog the Stephan, revenue contract good billion. everyone. morning, of and third finished

as has positioned we strategic and our As there the us great expansion revenue outlook. our flexibility. a road and strengthened potential and potential midterm margin This objectives the we're achievement of to believe company. reaffirm a base, with balance accelerate the discussed, that has these flow And of cash foundation Stephan to starting improved great predictable is noted, with meaningful XXXX map high-quality sheet

Turning to results. our consolidated QX

XX%, and from our achieved almost advanced Our high-growth solutions we record category business. of BPaaS professional services revenue

As a Stephan growth Solutions impacted Employer revenue quarter was this recurring mentioned, by clients. health retiree

employers context, Retiree Medicare is securing in retirees the Health Alight For that exchange and solution supports coverage. the a

of this retirees we've a the plan, a revenue different revenue As occurs which from a and said, in defaulted majority into the profile. has exchange client this significant group December year,

can for expectations. This This nearly increase circumstance is Adjusted represents opt the total of the also While gross efforts prior perspective. coverage resulted to activity, we retirees $XXX EBITDA of nearly and productivity of the a significant mitigation basis from much This group Adjusted XXXX, fell number X%. to with offset renewal undertook roughly profit year. a a margin and significant higher unique million Medicare X% of parallel, a continued client. from of margin to expansion out to expansion of though points efforts XXX they remain with margin isolated growth we XXX of XX.X%. revenue increased a a revenue the point they company drive in plan, In XX.X%. to XX% our profitability up basis short drive was impact

profitability coupled on Spending in We stronger year. more million flow last improvements with as $XXX compared generated of generating million XX% we are year. of of capital conversion resumed XXXX, following XX% slowdown a This represents year. program restructuring even level our execute operating with simultaneously working annual of increasing prior the flow or our program. quarter $XXX XX% Our XXXX cash in restructuring than the first on during last the planned rate enrollment cash

BPaaS with Together included second were XXXX the to in results bookings with delivered quarter, X% We better XXXX $XXX outsized million, continue million. bookings rate our financial $XXX midyear of We seeing full target XXXX.Turning run $XXX bookings strong expect with an cloud savings completing half in than win. to to of nearly results of and third client million migration benefits the late annual our performance. the for start that

clients. We in our broad-based both turn as growth Solutions. large Retiree mid-market a up starting plan. a to nearly with confidence solutions drives in flat win our invest Health We're X%, With our roughly continuing that, Fourth let increased quarter which to Employer Projects X.X%. are with revenue team, secular segments, result and building a combined commercial impact. revenue for experiencing and ability me out world-class with were the to strengthened of have pipeline, demand also our and was proven now grew recurring

Our profitability margin at benefited XX adjusted our quarterly and X% adjusted up productivity with XX.X%. profit from gross gross higher basis initiatives points nearly

profitability Turning XX% a increase up revenue gross XX.X% in the record year, prior was and a a deals project million. once a due basis, $XXX again percentage Quarterly to growth from revenue. recurring and growing XX% in Professional segment. up XX% points. the part to adjusted XX.X to large Services by sequentially new implementation with our revenue accelerated This was On nearly in driven profit of increase margins was

balance to our Turning sheet.

cash, Our million, end cash $X.X equivalents quarter was balance total and billion. debt was and $XXX

actively through XXXX. manage which debt, to and through fixed continue XXXX is our XX% XX% We

a near came loans the range income. the of hedging our our opportunistic activity, our expense in prior interest of repricing of term interest result Our XXXX bottom higher and as

leverage third from of quarter. end down net X.Xx the X.Xx, to Our at the improved ratio

strategic activity quarter, we We achieve Alight's of Jeremy no of it outlook. portfolio to of fourth than expect our target our provide earlier. $XX given the to in bought outlook. shares review ratio midterm We of back the turn I'll leverage Xx to ahead view now a discussed XXXX repurchase million with over net in less financial

Jeremy Heaton

our we After X a years Thank you, next X Katie. the our begin from years, Good morning. delivering of transformation strength. over position past

We is flow the strong have at revenue cash at under conversion. expanded our driven commercial momentum. This both with and $X And time, contract billion by we have highest backlog margins being our Stephan same reaffirming review. our technology-led across at And earlier. all through solutions and can are discussed portfolio even today, strategic we looking metrics accelerate outlook that midterm and infrastructure we upgrades of ways further our

share me outlook. driving factors key let Now XXXX the our

it expect will over of category we driver growth become overall be proportion XX% to off, continues high and to BPaaS continue at of the revenue our as First a Alight. our trajectory larger

that be midterm, XXXX the While total expect slightly driven to compared annual X% we with our bookings, expected be from through ramps is year, to XXXX business by at growth our timing the exit federal revenue lower the X% X% to to thrift. X% and of half throughout the hosted our first the

is time view plan We disclose. over as that midterm versus aspects the metric, X-year complete, successfully on reflect an forward. initial volatility at contract revenue providing Our all to captures longer believe model created the more our growth of a under revenue TCV the moving our relook now BPaaS complete stability a growth no business, to not did and opportune disclosures our we will of bookings overall which such,

XXXX a record a level under and our view greater book revenue. now updated provide X-year longer-term transparency quarterly our to of share revenue to will to addition In of contract, we

to We will revenue disclose on our to demonstrate also continue progress BPaaS transformation.

had XXXX, of begin business under revenue we billion contract. As the $X

XXXX, $X.X For $X.X XXXX, for we and we billion. billion, have have

savings. we Next, well a $XXX million more that annual program infrastructure our run year on drives rate successful first our and of executing a on had way efficient over restructuring to are

the later second We to expect with benefit some half. complete year margin this the program in

As our this is cash a program winds benefit down, there also operating flow conversion flow factored cash increased is guidance. that into

weighted to expect as we restructuring from efficiency be the benefits new and live, program. in second go the XXXX the We profile deals half see seasonality

mentioned, XX%, includes growth of or or prepared confident adjusted years, to $XXX X%, XX total X% with enable billion leverage are achieve growth and operating billion After EBITDA revenue has as to our Xx, an at we lower Adjusted X% to million revenue strong will foundation net for ratio flow deliver that outlook. outlook $X.XX $XXX to least session. million transformation to expect XXXX now you please target of will $X.XX, stakeholders. we us EBITDA $X.XX and of our move the of on of Our growth we to participants ask Katie Operator, than EPS over would to $XXX of our remarks, million of finally, sustainably or of BPaaS to X XXX of questions... points. of XX%; adjusted XX% value question-and-answer expansion into margin all This cash $X.XX conversion midterm basis that to how the our created ahead concludes instruct of a XX% well journey to

Operator

conducting gentlemen, be and now Ladies [Operator will you. Thank Instructions]. a session. question-and-answer we

Schoenhaus from with the of question Capital line is KeyBanc Scott Our first Markets.

Scott Schoenhaus

the thanks team, for Hi question.

Just -- enterprise frame we of a are to longer? are a with BPaaS clients? one curious, still from expecting it I Is your seeing enterprise follow-up. sort longs a revenue know What XX-month seeing converts behavior we on deals? you for customer it now large is that's quarter, process. are taking sales we it closing time booked What last mentioned

Jeremy Heaton

I'll and will take take the portion. the Scott. first maybe one Thanks, Stephane then second

So the I is think right months timing. XX

depending size to complexity solution can As and the X the and client, XX the you be the on anywhere from know, months. of it

in live talked of until You deals that year about go fully quarter XXXX. think larger last that the we don't fourth the

part and about model of, X-year right second momentum that's good had the impacts and is the through timing year it. bookings around coming half And timing and business. how the way past the you for us a we forward this as about of the the there that So to revenue in that think is guide

Stephan Scholl

us engagement couple talked we've Yes, take hear around front the this consolidation charge. year, one bookings last was a just last Scott, again. drive a helping is drive door you big is saw better platform the take trying to for in broad-based to them all drive last when clients the from helped business us. months, book take momentum last they're discussion. This again. same I experience last half out. clear out see in year, And quarters, which spectrum The theme. about platform is across And marketplace good for clients really whole as that along one employee in you what you of X help really are of year cost And out to really costs. asking leading a the we're it ways but deal also approach GE, and really all employee of you broad very the to this around And the find

Katie Rooney

Yes. And I'd add mean, only -- variability of giving given point revenue thing that's you Scott, contract it's Jeremy's Katie. I The we're question really to on why into the bookings. greater insight your the under conversion.

think able give being So we're making also we'll that market. traction confidence I you quarter-over-quarter, the the in in to see

Scott Schoenhaus

Yes, exactly. in back I'll queue. hop the

Operator

Davidson. next line Peter Our the is Heckmann from question D.A. with of

Peter Heckmann

morning. Busy

just there to back missed so And I circle of the Health. of your issue wanted a I costs. fourth that and with Retiree offset some revenue to how to then lower you're able portion shortfall with quarter explanation

Katie Rooney

Yes. Thanks, Katie. it's Pete,

think would continue of to I opt in the fourth we to retires articulated their client -- terms plan, with on was in then business what defaulted need where coverage. the to back those that Medicare a out So single group quarter, was a retiree the there retirees

So results revenue a in for different it model us.

December that is know really business you loaded. As

fell on, we're offsetting our potential in of impacted kind expectations. client, that obviously, us then short that What around so working the of which we And December. was risk

ensuring So conscious of from were stay on plan on profitability revenue track. perspective, to a continue that to also as we had part a we very

the efficiencies sure all out think, driving I accountability making we've restructuring coming for been about. And program, the talked across our of business, we've as some we the retain So the plays one, it component, you onetime think for role leadership variability important when in here. piece that is in That miss. compensation nature. about think a I the But obviously teams revenue is two,

don't recurring Does a it forward. that to provides event.. baseline So as a see now about going growth for help? it how think We kind of

Peter Heckmann

like, review. it's is It sure does. the then to some sale kind focused potential potential on you it's we is to difficult pretty on and trying But just infer out, figure of strategic any maybe it profitable And including potential divestitures, I'm -- this Is pruning an It in the does. acquisitions, that real comment just open-ended very detail potential businesses? financing, of Or review more divestitures, of company? broad? should for

Stephan Scholl

the It's growth And look the doubling approach. And that. on strategy. for for to the with seen, recurring last of guidance, know this if thanks XX% is X midterm billion want down next out platform And really we our a down that's on you margin about working. platform business it's get employee the higher -- towards engagement and for $X book experience. to at our us double on as been contribution if think I revenue to And we've us, business what's years, working So we we last going of door that base in midterm move be you capability. want you've front a of gotten

in we're it we all those where don't look We're when piece. not our sit you down different do if the take is to getting secret. market So it's can And have record think to continue transformation value? with unlock systems on how the platform work around before. it's content. on you that context, for really credit doing the I've a we're that no people us can agenda, where areas the we the own really at doubling We we in battleground right? So partner for listen, ingredients, said But that potentially. taking about today, review of we

Katie Rooney

Pete, add right, of the only thing And to is too, opportunity that an there's enhance for value the our I'd in clients. Yes. context

down in areas continuing double certain investment do areas, play you our position support drive how as a do it's about certain again, review, to in ensure to, that will maintain that we we right, clients. how this we're all leadership So additional think how we in into

Peter Heckmann

think that is That about? helpful. there should Any frame we time

Katie Rooney

with outcome the as back results. with we'll point, come have at the that, we're Not this soon we the of But market it. to as of underway obviously, kind well

Operator

next Kevin with McVeigh is question Our UBS. from

Kevin McVeigh

back to X% relative wanted X% to just XX the guidance the I X% to and Great... circle X%. on to frame try to

-- impact With not XX, revenue getting a so points. wondering does -- $XX basis that feel -- QX, the have then you have that. you really seems in was and of you that And $XX that how better in it that the in feels it like just like go-lives, in number, did XXX million December? that that impact business, know don't don't just if it expected sense I of but that and big like if million how a why QX back I'm didn't half in like been could have hosting loaded

Jeremy Heaton

Kevin, start question. with it's part of Jeremy. your I'll first

is of Just business guide year the of and about to point hosted yes, X%. impact the in on for X% in the -- included X revenue is terms the

that of so a is And it. big piece

revenue is really for in year. piece contribution last those the the to and the go-lives big then the year timing second just of timing The bookings of the half and second

growth X just are begin also terms We thrift last biggest the in obviously where bigger coming was to what were size So over the out of the kind of a those year. in year grow to drivers. we the rates have versus comparison of

X%. out in contract revenue around a our mentioned, midterm through in of X a the us us the terms giving in the the Katie So of guide -- what that's X% to which years under guide, terms revenue The... components why we're, again, for view of level is gives into more comfort that's larger the as because of really the

Katie Rooney

Business. Yes. think, business happened And industry. this all We've good the December. is in in driven I is Kevin, on the said with really what Retiree client And that question unique

predict, out it's December, to right, so will not. opt or many how hard in very And

majority were drove quarter we risk doing of fourth through right, renewals that think around But kind that. the So areas, I of contingency people to minimize that was it of the ensuring plan that in chose planning to number of in other potential the of of when December group came into accelerating working the default the terms we miss. the in were

Stephan Scholl

of of bookings it's delivery during of interactions anything Kevin. lot And of revenue those in different or that December, one-off. And like of really that a visibility not some terms into it it's month book don't thousands like was have that how dynamics. it's and a that, of happened to a really It's issue it gets executed, business

baseline haven't before business. seen We Katie set. as new earlier, And book is of that the said in our

we see happening So it again. don't

Kevin McVeigh

I for just Katie. have it in, And so

I of in my think that $XX you fourth revenue, was X% quarter. right, million in so that the said it annual math impact a

Katie Rooney

I want just -- The clear. to be

Our -- in business, client majority XX% the revenue down total was guide. the was miss in the drove point of the tied that that versus of which our to $XX retiree miss the million, X% in

Kevin McVeigh

year, For full right, the so Katie X%

Katie Rooney

Correct.

Kevin McVeigh

to the that and got XX...

Katie Rooney

Exactly right.

Kevin McVeigh

not it X%, as And would X% been have X%, to for if opposed again, X% right? to to if not the business, hosted

Katie Rooney

that of XX X Xx runoff hosted business to at growth, the on we'd right. Yes, be Exactly

Operator

with question Peterson Needham from Company. Kyle is next & Our

Kyle Peterson

to the weeks we're year. of on start clients Realizing Great. wanted going, your kind X both client into the only some of -- those conversations and kind are as kind are of I going, into progressing 'XX. But wanted existing get some to how and of looks a with prospective how conversations what of as are deals touch how pipeline head we X, of to kind just sense like

Katie Rooney

Yes. start. Maybe Thanks, I'll Kyle.

in see good I you velocity think is we're in under pipeline year. to think, of translating kind we contract, generated as back how last the saw, the about right, of the continuing strong, half half into this that's from you very bookings right? momentum of how perspective, first one, revenue year, the a When

right, in others. partnerships I services segment, bigger our tied think a to couple the saw -- and right, tied Workday there's been deals, some with You learnings too, along professional the right? some of to growth the way,

to solve of today our honestly that of one, build facing our clients, helping think while and we've also use commercial teams today. them the to I asset business for in see right, that those we is really clients, that's think with market. also cost, I we've us productivity can cases continuing challenges and the partnerships our investments in book bringing we the bringing of -- resonating And So total an the is experience learned, think to all drive kind made I pipeline that those are

Stephan Scholl

ago, continued, And by said X It the better Employees secret. changed I more centered other to simplification, a need rate of better we're push industry, all every lot consolidation, as terms no There's for doing continued around Kyle, it hasn't I've engagement. terms best-of-breed the minutes around said employee help. what last around in a in a they driving the of we've help enterprise need few seeing employee staying seen to more anything, in now CEO years. over the seen shift around spend economics, under healthy spend. easy executives employee pressure lot have and on money drink CEOs dramatic financially around not X, has tremendous of was able Every employees. I've what on HR to with being secure. everything a spend ago, and of engagement. a X to years amount pressure changed. a spend to approved they That said it If want

of to is what's have to usage you these are to you terms powerful the And complicated. is, do, so very, things, value very look of get multiple a of and rates to current of that access lot spend to have spend. they're still places have And because the in you the reason at go where what to systems. Engagement these low

experience providing happening us kind the interactions amazing consumer-grade the life, the other phone, consolidation supporter by there for as to consolidation So approach. be to providing you've we experienced a everything how like that And to all the large, many we've some ServiceNow, kind good all our look of companies lot on see been drive data seen or It's right? towards of driving the a clients think year at data. looking of of journey of are an of easier way, else to I are news, our in trying platform here's integration X these name and it's our better, ecosystem simplification. on mobile of in great in the transformation mobile out at Microsoft a this now And into whether a platform experience sources

around category charge ride the the actually And in so HR. specific right we're along leading the for

for I exciting think an it's So us. time

Katie Rooney

Stephan the We those landscape, well, of named together the bringing so us -- ecosystem one Opel, One for payroll, clients global and saw in across points that is right, helping proof what win... integrated said. are benefits you Siemens, just experience of all

Stephan Scholl

And about dollars ones I clients that impacts sensitive world. lot around big a I data, talk the call. that having big are the there's but but Those we're could more there's in of some big, talked wish about, big other for I it's very unfortunately,

Kyle Peterson

helpful. really That's

wanted capital Just allocation. of as to priorities for on a touch I your kind follow-up,

ongoing. While review the portfolio is

while with any stock you kind that initiatives organic in we the do you're guys you of If outside But how the of fourth repurchase guess, priorities is guys process of cash with to -- in effectively should what for didn't review some about quarter this this. conjunction. I generate mentioned going your think ongoing. you

Jeremy Heaton

Sure.

take is me that Let Kyle. It one, Jeremy.

but it's But organic and to tied some our for as those mentioned, we I of always So will and benefit be to share allocation with in about lot Katie looking we're we'd review. and yes, mean terms the both us. I balance talked that it's sheet I to look levels, A capital priorities. think not in have is, tied at balance quarter, inorganic the looking accelerate strengthening the And unchanged doing in into certainly, strategic portfolio be leverage of sheet a the about that of did as and do repurchase us the will activities. buyback. And as at talked then to strategic as the finally, then certainly opportunities and review, return what fourth where shareholders us -- well for Katie proceeds give going the capital

Operator

with line is Huang question Tsin Tien the from JPMorgan. next of Our

Tien-Tsin Huang

offsetting clarify strong, to on the the on especially there impact health. Was gross profit. any retiree on that want professional slate in services was quite revenue side because that Just came on the

unusual So just there wanted make to sure I anything there. wasn't

Katie Rooney

again, of still I see continuing our like and has hit I has in market the the also softness continued helped just to benefit they terms particularly tied two But think in GE, three, in some the Europe. stride Workday, kudos mean, saw year. the with co-sell bigger of half, some the on think, kind in momentum to of professional team, I one, up business No. I -- North a them has business. We first with did partnership build services wins the obviously the think, second that its really, America. through to in that

Tien-Tsin Huang

-- it. talk cost sure for right. to Got know growth just year maybe of follow-up OpEx you more versus revenue. and in midpoint you X% And fiscal want to against the the that's in all midpoint on the bridging the piece conversion the 'XX. just at the just I the get my profit that in we EBITDA Can 'XX? the growth X% gross savings that I got for make at cadence outlook

Jeremy Heaton

Jeremy. take I'll Tien, that It's on Sure.

greater it points around of really that in of fourth then underway. the our that year, points for XX and yes, saw, and see we're initiatives So again, than the kind the the gross the XXX laid basis so strong on quarter, XXX line. path. the acceleration to on We second be at benefits line, helps -- third in productivity basis the the margin of that the of that performance we continuing terms as on are of And EBITDA And you continuation will kind us, last Day many half start completion restructuring in in Investor into of program. out what late to

Katie Rooney

made year. OpEx of next year only an thing we've you And the right, right, OpEx key saw, from is commercial investments I'd this some wraparound standpoint, product, Tien-Tsin, on as and the add, in into right,

of you kind have rate that So first. run

I think hitting at some of the were risk efficiencies driving first.

Tien-Tsin Huang

view. is from to quickly clarify a just And helpful

to there... versus first Anything second in half. OpEx So the underline the half

Katie Rooney

going both the I the in QX margin to terms you're coming EBITDA year of Jeremy think of mean and we it gross in margin, of through of ramp I see benefit and QX. more the savings kind you is course a what how the see phrased in in will -- because

Tien-Tsin Huang

is assume there the preliminary a just view So ramp

Katie Rooney

That's right

Operator

is with Christiansen question Citi. from Pete next Our

Peter Christiansen

just change. follow-up, on we the quarter Is any point. in Katie, just now I'm realized point? there for question And to got understand profile of ask any last last that is that rotation Is of on different? upbeat a miss outlook considering timing here the reiterating opportunity at timing Thanks some the number revenue this this to of the seemed trying curious it client mean, to of revenues, Or there's I'm your aspects. just weeks. just how more the then the a recent contract? the top holder to questions. you're Granted, for the the bulk really aspect been hopefully, medium-term I just is strategic deferred? of as just on retiree Is it review.

Katie Rooney

moved group It's Yes. ended start how with you as Thanks, those Pete. a in revenue is reduction I'll it, a your question, have onetime kind exactly right? of which to last plan. participants

right, So see decline. be baseline, do shareholders, next strategy, but the other for seeing for I think look as our And and I I the year, terms colleagues, of what that That's it our the ways I in as said. the is I in in portfolio, progress we the earlier, accelerate market, strategic won't our necessarily an should to return aren't our years. new we kind X won't said our we also revenue I next always evaluating but From clients, we additional at see have strategy. think for which said, of made return review believe think we

and like So to it's take accelerate continue now, all options on and time a sure we've in to way executed what strategy make look possible. the we're our best evaluating we for to past X said

Stephan Scholl

one at the that of opportunity the And financially the the TAM When our we been impact segments, most never clients. this first better see the is CAGR large XX% business I in looking marketplace, front us being business. just and where with to to over going have long healthy times, to I recurring of now if to what we That period. into by all is of a of them the this itself people few X day, and door, that we for book And you impact across the $X now an different million midterm, years at scale. to one. this between book puts billion seen of ago, I've book north at opportunities about opportunity that's CAGR, a star enough secure, Alight XX% Yes. we've business, this we're keeping journey going pretty midterm important this that of last million as of -- started have Alight profitable $XXX look midterm we the of think it's mean and the exciting. this XX doing be of end in And the said

-- the it's this growth different larger of in growth and but always low it's for years. few the I've business last up wrapped So that talked in high all company with segments about

no And on as the to And driving that's a you just the the investments double getting we're continued us. whether So in nobody. other to capital right? to said is, that, figure or good the this how effectively because I become in in think we're of for see, arrives world as will can this most tech trying recast the of Alight we're towards sheer crowds within so station like important to news because one platform of structure as that, a opportunity I our the company companies front the And company entity out that just what down support of how doing, industry at scale, value we're unlock as is better that's size today doing be And there's how and the how at -- opportunity. and we size recipe. and rest it to do get Katie the said -- not earlier, as an total a

in advantage category. quickly other piece how of move So and of we've accelerate do and the this, is success that's take pace we had to that, that we have the which to actually

Peter Christiansen

both. you Thank

fair some there's think I that. comments on

Operator

Balsky from America. of Thank Heather with you question next Bank is -- our

Heather Balsky

and legacy a On sort or your the business I broader recurring the talked recurring know business. of of book of growth. its book a the about BPaaS platform But about talking time understanding of think strategic the -- more our you the business And we review, I portfolio. think and focus lot a on I to spend moving of

looks walk more there of through a of or investors your portfolio us what a else is analysts at revenues? we business? level? is can recurring, portfolio are in I like today. How appreciate. help high much kind maybe what And lot just revenues think fully your you of there's of of high don't kind of transactional kind that's the a outside like level project What Just the

Katie Rooney

it, And in -- our obviously, you I Thanks, a of bit financials. little mean, Yes. I Heather. think see

So we're XX% XX%. today, recurring XX% XX%. to

is about But there's which how Sorry to enhance -- recurring Jeremy the today, still think when under to continue in right, an I revenue we of year enter that. contract, correct terms think me, opportunity still great. XX% you as there's

accelerate all I mean, assets. there's It's an so -- our utilizing We're different again, clients. our those that where And assets can are do continue optimize, sense. doesn't of how to there the love additional in the that we do within into serve business parts trajectory. right, we to best ways within to to portfolio, that saying partnerships, other the how And not form investment there necessarily make asset we're be of

talked perspective, from length. again, a at So about we've portfolio

there's obviously XX%, comprise both. number a assets revenue that nature today if about Solutions, Employer that Services. But Professional have got helps. is of you You've recurring the that, Within

Stephan Scholl

within the one every even recurring equally, And... of That's dollar only Heather, right? piece perspectives, landscape. The set created other is not is

value Some as higher Those you around the AI profits and of higher contribution. driving them gross on margin food are chain platform. up move have

equation, So the capability to what just in of capital-light focused investments. the the and not terms giving drives go equation on recurring we're of also just that but us margin other after contribution value

also it's it. profile So the it's recurring, just contribution margin not of

Katie Rooney

help? that Does

Heather Balsky

of to year about us do there. you coming you at How like I picture of visibility help low date, the later Yes, realize in a when with to you to especially the Just year. big what bookings way do guess, through. as look it other range, have But high think I to XXXX, contracts you the and from accomplish as that especially are X% your And as guidance think need the year? kind to range have you be and this long back much a follow-up, sounds we X% you exit But acceleration, it think you as end? GE in, to does. the question. that

Jeremy Heaton

it's I'll one. that Heather, Jeremy. take

that's already see think don't get XXXX. billion like. That X-year view, contract does And shorter-term and the under exactly visibility deals, you I $X.X talk can mean in look we're larger right? some you period, those this quite showing looks include right? why if now I what you a of in into that

for So starting point today. us it's a

had look what the pieces in the that bigger are those you we of second If -- teams continued we at on, deliver for commercial momentum half to need our to that deliver on.

had way of on that and overall with in momentum execution today last building the revenue to we that we're just quarters build we in at plan. the So look already pieces the that the biggest contract. and X terms are continuing under Those the

Stephan Scholl

of years X That's big swing think have revenue mean 'XX, consider collection That's for in $X billion a delta our Heather, under looks from into in book of Jeremy what to in billion X.X as in have $X.X of $X.X much a quality X the And then a sales out. said, And already is the had terms the years pretty that contract. million powerful that's baseline $XXX in have giving million architecture powerful to of already to contract like. million that in X. we of visibility future and as years, midterm, revenue we place we the XXXX, us out under X momentum, just pretty the I I $XX business.

Operator

from Canaccord the with Genuity. is Joseph question line next Vafi of Our

Joseph Vafi

the for that on maybe new share some in momentum the gains, Just wins. go-to-market logo and of potential

a best-of-breed the in but bit lot large with all think of siloed a you little I capability different all today have services enterprises more they're vendors. provide, clearly

in even of a holistic enterprises almost kind on a overall quick approach I'm a I'm the to versus one deliver for from kind those cost get personal just for understanding employees for more versus others? experience. to And And just little for The cost you so of siloed trying then to provide bit of thinking single about large my own you best-of-breed approach. follow-up.

Stephan Scholl

couple PPO times, right? technology When well, right, move and right, supply best-of-breed lucky that for We've the financials, GLA, that from have years owning this in been last part -- on chains. HCM, -- enterprise. largely happened we're XX the I'm It's the and and as space it, a ERP that of of over was about and where SAP and call a That were probably lived just around wave I of and in. of Yes. biggest there in best-of-breed not Oracle in across handful world across transformation hundreds never hundreds that I the to few vendors enterprise with and all vendors collapsed with thought

there's I years are saw between I employees staggering. today different between X% be you way. came the that X going said, ago, is So the got a company systems, here, which with and for XX Employees when to mean, engage that with better point their is exactly XX to X%, engagement is wait rates the and just fact I the

systems. have kind of in or statistics You ERP world the those revenue-type would never of chain supply or

never would You that. survive

it's has who So why the focus, built out of of there today? there I this ask somebody just that survive lack And end-to-end always that have companies platform. do is lack myself, fact to

the flipped you And in time. and over and their don't to revenue mess you work. and They've trying in cases. the and opportunity consolidation focused last an the the as given CIO been systems, to saying, couple they've XX% world what one around ERP HR Siemens fill talk So we've how about that's ago -- same XXX were now use client what example. ROI, Fortune why they the the to some that's X wow, at great talked world what years, takeout, we started an Katie, years the all side because changed a void cost we've driving a of all the

Katie Rooney

can as discussed own improved only client, the of you their you increase the because today, not but call outcome people. I for -- even Joe, right? we some mean, engagement, the said, the add Stephan guarantee I underlying part Yes, can of Siemens you mean reason then an guidance administration, you on we the those capabilities of right,

powerful. think I And that's really so

right, do. question improve your reduce we the underlying bit. costs, when So power almost experience. what on I'd that outcomes around turn it a cost, the That's almost like It's underlying little of and more

Stephan Scholl

just talked about wrong calling frustrated knee Half in most decisions. surgery, why ERP employee clinical they make of opportunity There's I it staggering enough how around people blunt on for so to How I'm want across because about mean, systems. the it, decisions. are world. I I've And because retirement super it's reason companies the back the consolidation X drive here make is benefits. me make be higher that see to And can't that surgery, years. makes many wrong the population. mistakes just decisions revenue to not many wrong employees our a important and people the happen decisions save these biggest, for the the on

by clients our we here their we do better say, better. sit do and help I employees. how So do can And

to of data use systems like powerful got sets, we have You've billions. record trillions of data access not sets to,

shown way important it, trillions we we to life, there's people's more then can nothing if make healthy than retire and through decisions want. most money health right enough I in better decisions. important having area a have of work big sets first the experience a consolidated being when in life, have of make impact mobile the and We have that employees we you I how money mean, across and And people's to data use that we access know and

Joseph Vafi

was That's if points of for of pieces apologize a be different on think this busy would Sure. out we data review? be It's commentary. different all-at-once of do That's the you should strategic review, the there? But an or great. it Or great morning, news kind of kind looking so coming asked. I outcome strategic

Katie Rooney

review. Joe, the I underway, Yes, with is we're I've as I'd what say, think well said,

is, So to kind to of bring will the share, obviously we market. our we intent outcomes it as have

to and we are process. idea strategy the where in have So update in with as think tough steps. we accelerate I next we But where is we'll are on key back to soon that be an piece from the say our the as today, is given

Stephan Scholl

Thanks, Joe. Appreciate it.

Operator

you. Thank

I comments. now the to closing are Stephan no further over questions, would As hand there Scholl conference for

Stephan Scholl

in you, the weeks Thank the you few forward today. us. the and took with of conferences for appreciate time I upcoming joining many look We to for time. months. next us Thanks everyone, you seeing the really with

Operator

your has Thank you now you. The Alight conference concluded. of Thank for participation.

You may now disconnect your lines.

Alight (ALIT) 21 Feb 242023 Q4 Earnings call transcript