ALIT - Earnings call transcript Q2 2024

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Operator

Good morning, and thank you for holding. My name is Ryan, and I will be your conference operator today. Welcome to Alight Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded, and a replay of the call will be available on the Investor Relations section of the company's website. And now I would like to turn it over to Jeremy Cohen, Head of Investor Relations at Alight to introduce today's speakers.

Please go ahead, sir.

Jeremy Cohen

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

factors. please Before include forward-looking expressed of or from will Such future note we Actual statements. variety due get that of to may discussions forward-looking not the are statements the those results implied statements some a forward-looking performance. in today company's guarantees of materially started, differ

update company are more press the filings most statements. Also, Form call, in factors GAAP directly to with financial the to periodic conference the financial may recent non-GAAP and time company's non-GAAP company's certain most These appear in forward-looking the time will company's factors filings. earnings presenting discussed detail Reconciliations XX-K measures updated such in SEC, this the company's release. of XX-Q measures. The the comparable from measures financial historical in during not be company undertake any their be to including obligation today's as Form does

as call, which today's long-term may and derived we based On key a with are pricing revenue vary ARR understanding ARR provide revenue top our metric headcount will contracts to includes on see retention. as is high We per from and transparency employee. revenue. ARR recurring ARR annual in refer speaking of growth overall bookings we our when revenue, to line client ARR

with are Guilmette, Vice CFO; Greg Dave and management, today. Alight's On Heaton, the also Goff, is call Stephan Scholl, today Jeremy CEO; from Chair, President. us

I open over the will to remarks, questions. Stephan. prepared the the hand call we call up now After will for

Stephan Scholl

where on had good a strategic Thanks, transformational Alight milestones. Jeremy, we morning. delivered quarter key and

capital now to accelerate greater chapter a with new balance begin a and cloud completed continue program higher simplified X-year and margins, sheet. our efficiency a company as We migration stronger our momentum, go-to-market

commercial new professional a financial services partner payroll model. superior a business, With we gain of and our and the sale retain

EBITDA gross increased higher XX.X% Our XX%. XXX adjusted to margins have basis XX% and adjusted points from are margins at over

Our services margins flow. and technology-rich benefit singular with recurring focus cash is on long-term our revenue, annual differentiated, higher improved business

We an and the employees platform, and Fortune valuable for a their the better creating of XX% Worklife X of we industry enterprise. decades are leader our XXX clients of half more have serving Alight XXX, Fortune with experience created with a and durable experience the and

million net were Proceeds on $XXX last in planned to our leverage we better than reducing XX X.Xx and retired EBITDA. adjusted debt, months

EBITDA over adjusted buybacks, of and is a of million of XX%. rate expansion removed million our also X% and will our migration key savings, margin cost our shares. run annual cloud retire additional tech will $XXX We decades gross announced $XX Completing which of generate to has share of debt component which program margin

in to with quarter continue in the Adecco American the of in and go-to-market market half growth this UPS, growth XXXX thereafter. half win wins double-digit demand We this our second We ARR bookings for our strong Company, and the high-value ARR including solutions growth the in great Honda transformed year, Motor of expect continued Group. and X% bookings strategy. We Wayfair, delivered from first see

of see the our than for our This that and the quarterly in largest long-term quarter. comes results revenue relationships over the of and have influences sequential client nonrecurring end about XXXX and work, our how ARR laid second we last lower from companies. think line XXXX decades through and XX% revenue. a ARR expect our which, demand is cost contracts sequential the of outlook less improvements as our through expectations expect some out with growth with business, of accordingly. Within increased most were revenue we updated Alight's for half ARR quarter second reminder, XX% we And business, we and We with consciousness Our world's is core core project-based complex to of revenue XXXX. span

will revenue contract beyond. and XXXX in of have under Jimmy detail, billions we through outline As more

We Transform go-to-market and our have accelerating our model experience. intensely extraordinary clients ARR on and focused with ensuring are service an employees by their

annually on revenue to revenue and Our of under growth focus growth contract, high-quality client ARR X% bookings retention will yield time. X% over

EBITDA business to XXXX adjusted XX% from to in will expansion XX% Transform XXXX. generate in XX.X% Our margin

XX%, maintaining of margin less and our also We Xx. reaffirming and our XX% improvement, of of are to than conversion guidance EBITDA mid-term of points midterm adjusted on also net reaffirm we over cash leverage basis flow XX% target XXX operating

ahead. And a forward is of today I in confident tremendous including will step growth. In with been I my team, has Alight right top-line We take with the we've a leader The simplified time, now the closing and transformation with transition. sale, of the our that the this almost we've the the of named. In company continue next are opportunity company work focused have new I months, an my in been exciting new time announced Directors, years and me and after leader the cloud of in and Board succession role, I'm who X new Chairman Alight's it's to taking a meantime, Board very to public, a organized platform. closely company planning chapter. this line for guidance Guilmette, with down will the Vice of for highly the management will support divestiture proud Alight Dave during alongside with accomplished what our Worklife lead to experienced company independent when

tireless all to every thank key and clients for and efforts around on the these milestones each their colleagues for delivering world our our of deliver day. to want I

over Jeremy, to you.

Jeremy Heaton

you, Good Thank morning. Stephan.

have get into Before a on few I the presentation. quarter, I notes

professional and the operations. services in business First, is included discontinued payroll

the also of discontinued of Alight. presentation continuing would power operations note review quarter, highlight earnings In operations you filed XX. We continuing view July I go-forward and will believe provided accounting of understates aligns business, that information and with between reflects benefits forma view normalized the the split we our financial today. discontinued supplemental continuing I and historic the view this As true information, the that to operations, we speak what statement certain income believe investors well-being and the is this include on pro which we and normalized better

our includes a bookings long-term we'll our client per Second, revenue as recurring is retention. are revenue vary growth to We provide metric from on annual may when with we see employee. transparency in overall based ARR, speaking to we derived high and revenue. and of refer revenue, pricing ARR which ARR ARR understanding as ARR top-line key headcount contracts

cover we sales to our demand commercial intensity year, Last our will go-to-market I progress. greater First, structure and realigned drive generation. more

long-term into flows now Our to sell teams we seeing are results. are revenue ARR, and contract, high-quality under incentivized the which our

ARR Our were prior bookings up year. in X% first half the versus

rates a pipeline XXXX half. Based we our increase second X% growth half in thereafter. the ARR win in stronger ARR our see an on and current continued pipeline, momentum of the in and also We first expect double-digit bookings

$XXX BPaaS gross basis of XX.X%, company. Now Total to turn of decline adjusted point total Adjusted basis was excluding a let pro business, quarter. of which represented a the margin revenue first XXX of basis. EBITDA revenue the XX.X%. second was represents impact hosted million, me our forma the with of profit points improvement increased EBITDA versus gross a exited million the revenue first with quarter and of $XXX $XXX margin when ahead on quarter was X% for performance XX.X% an XX% adjusted profitability. XX Adjusted million adjusted

which represents million, $XXX was flow cash XX%. a operating year-to-date Our rate of conversion

from XX%. of spend for benefit million separation as transformation. on flow a driven our lower expenditures $XX or Adjusted Excluding cloud the were by year-to-date down was begin to a operating cloud costs, million conversion million, cash from year Capital $X.XX to ago or $X.XX period year-to-date compared migration. XX% was from EPS the $XXX $XX we depreciation

repurchases from forward. benefit We will moving share the

to balance Turning the sheet.

end cash repay used was transaction quarter to cash quarter balance million billion. After of debt. end, $X.X total proceeds million Our equivalents $XXX we and debt was $XXX and

our to fixed As a our for remaining leverage for result, as fixed and XXX% we is XXXX debt XXXX. committed, net X.Xx XX% Xx and below reduced

since $XX priority. Today, $XXX capital a we share been buyback authorization, make and May perspective, announced have repurchases From have share to more million. repurchases a active remaining of continue with return million we will we share

Next, outlook, our starting XXXX cover with I'll revenue.

total We stable expect base contract expect XX% will improve that XXXX. will of through our momentum a the revenue, perspective, sequentially long-term is over we This the bookings remainder of core business continue. ARR which business, that and resilient. From core represents the of is our

project work regulatory today Now turning related to X.X% XXXX, even nonrecurring less is total our to large-scale of which cost-conscious M&A. limiting business. the driven XX% plan half Revenue than increasingly of rollouts, represents first seeing and changes demand project this are down benefit for revenue by customers was we through and projects less and our

to project ARR, we approximately down For to the growth clients drive second XX%. and as will return half, in we the expect project project in revenues be an work future. more have This has larger so base with it before even will nonrecurring

under an impact X% context, our XXXX X%. project nonrecurring $X.X revenue XXXX or X%, contract revenue this of revenue expect expected half half second down on revenue. year Revenue down of total the is to Given we outlined to billion, total with we for second XX% X%

billion $X.X and For revenue is full now XXXX, is year $X.X under contract for billion. XXXX

start our net of revenue revenue XX%, the conversion the history the that cash of operating quarterly of versus fourth related under X% run-rate and given be an expect XX% prior revenue the year. flow cash stronger adjusted year EBITDA saw and supported last long-term of compared from XX% In model a adjusted contract, continued migration. On XX% progress from month. Also, XXXX, to to third finally, go-to-market growth operating the increase of ARR deck we're there. to believe the of total XX%. not stopping leverage quarter, seeing to lower which lower Xx; maintaining benefits below includes savings our historic profitability growth, we to and flow begin supplemental XX%, profitability margin cloud project flow and revenue. of will basis, We our investor we and XX% by midterm our range of XX% annual targets We expect will we to quarter is migration cloud of we our EBITDA perspective, you will X% the as likely margin cash to reaffirmed shared retention XX%, From the in expect a our

with front better opportunity the our of go-to-market program energized We drive and us company. momentum the have by a This a chapter [ to streamline value leverage the is our new technology to are and for AlixPartners building underway in we ARR continue to quality experience and and ] creation to for Alight, clients growth.

sharing to strategic We will Investor details the end objectives. an before on financial Day this forward our year, holding where look more of be we and

With that, Q&A. it open for up let's

Operator

[Operator Instructions]

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

Scott Schoenhaus

Team, it over years. first, several you was the really working Stephan, pleasure a last with

think growth. want I just said think ARR. should leaving really guidance, I down, that I noted CEO of revenue the really both I on you great if this asset. But improvement about down color you guess mean, I a next half the is you back kind the you sequential Jeremy. a gave of break in booking Jeremy, there And you and XX%. a noted to back you question half, could. Stephan lot see You're being for project double-digit

the X Can moving revenue those that's in third quarter? you the think provide Because quarter important understand I more versus dynamics fourth investors for dynamics quarters? between color to on

Jeremy Heaton

Sure. Thanks, Scott.

So on slight revenue volumes the still we year. COBRA the last from a headwind have recurring side,

comparable basis, of end the the quarter. a at on that subsides So third

growth so second accelerate will in through higher the growth with And quarter. the fourth half the

quarter growth be third the second on. the growth than the And so the for quarter the as we to quarter we fourth then highest expect year better be and would continue to

the fourth project inverse, project to quarter typically more even the the side, we'd carries On almost see revenue. is expect which

that And cost revenue so that impact will more. project the more see we and quarter impact of as the consciousness, fourth

the in that's the absolute so. I still quarter larger you ARR revenue quarter a more recurring say basis, you'll you'll have -- less So sizing. fourth and on still But fourth have in the on side from would improvement an

So in it's fourth quarter. decline helpful? a Is greater the that

Scott Schoenhaus

margin the expansion acceleration Yes, from in are And divestiture, you're in helpful. third nice then to the cadence longer for half a of opportunities next second question term quarter? the And my was what then think outlook given about the in are opportunities the that's -- on should the we how looking the margins. quarter fourth post half what and back the near there? Clearly,

Jeremy Heaton

Sure.

decline, driven had third be So project that's profitability quarter drops of year, just revenue and that lower than through. will by slightly we some last

So from the a margin of kick migration full rate year. to really cloud last when from for savings in a the In run -- we lower than perspective, the slightly that's worth quarter, fourth benefit. quarter's start

would last margins. higher have over in would we I fourth the slightly we're on So business, were typically, year expecting be margin had think the -- XX% you -- quarter year We year, XX% quarter. a expect had last we EBITDA fourth we than this in to

ramp cloud coming benefits the through. just migration and get that we accelerated given typical do slightly have the you So that gets

And so and will $XX cost million -- the is the rate cloud starts that will annual run get that that the now completed. be again, we migration savings of that of

to Alixpartners dissynergies the us has as us the through migration couple any as step driving benefits rest streamlining the the us company. So that's as support cloud as years. ] mentioned, as, [ the the big we transaction the think of from well off removing next kicked We've for as across with next got in of I well

Operator

is the with Our line Kevin of next UBS. question McVeigh from

Kevin McVeigh

dollar maybe best $XX there in underperforming that thinking of right? the just of to cloud a guess, the then half relative but much want the the there. Stephan, the always kind a -- else working bit And the professional guidance with looks you. just the typically and about in revenue, it I of because but I'm the it second migration little It's how that's quarter at comes you the Great. like that driving what's lower is to wrong, wanted of the EBITDA million, services fourth pacing the half. this amount there quarter? like anything is seems -- luck. was that? look in if revenue talk thought in Or fourth second EBITDA start to is the pleasure I I margin, of the to I

Jeremy Heaton

Sure. Thanks, Kevin.

million So for it's year. $XX this about, I would say,

it, of to run fourth migration. And start then the rate that. at You call get the in cloud the the third in I'd on benefits some quarter on were we quarter

to benefit migration. that think as $XX million million in about just run So as, the on a rate $XX we're cloud quarter it, call the fourth of

On I it question, differently. project about to part the relates as your revenue, it think first of

services the higher a So the can business the the a service professional of professional benefits But we're margin business now in revenue second the can project half about carry revenue. that divested that with go-forward on lower carry talking margin.

client upwards of, percent working So revenue. margin because teams and that it, clients delivery with can our that already are be XX-ish project it's our call on-site driving that

we you So as quarter. that's see third think from the Again, in quarter. what more the there, benefits gets cloud fourth migration about the that's that the offset and impact than

Kevin McVeigh

That's helpful.

like, on some sounds of given is the pressure maybe the that business it the outperforming just So margin, core professional... Jeremy, from the

Jeremy Heaton

That's right. right. That's

Kevin McVeigh

I'll of the then that? And buyback, timing great. any is there. on and sense just Which And maybe incremental pacing it end

Jeremy Heaton

Kevin. Sure,

August, the executed million, end on through of frame. So of run beginning accelerated program will $XX the share That likely on time XX. July we the repurchase September

And the authorization. as So $XX we've will I of remaining million $XX and million executed back. bought got said, fully then that that's become when

opportunistic So the as of that we will year. in look to terms through remainder we the be move of forward

Operator

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

Joseph Vafi

bookings of And second in also we -- kind is follow-up. Stephan on at half. your you acceleration the you're remind basis ARR there? some just to know I'll compare? kind start in good ago compare volume bookings Are to chapter second looking ARR looking tougher a here. in Could my in quick easier versus the half wishes some of next like what it as the then I best second on a you up look a half a commentary. it we dollar was half get is on first on there ARR of commentary then And And have of a -- for Maybe the well is the second kind just year half, if or basis? feel dollar a us

Jeremy Heaton

Sure. Joe. Sure. Yes. Thanks,

in as start bookings. an did We half. mean, around second our we had the you have in slow XXXX, saw -- acceleration in bookings. acceleration I from XXXX We in So a remember

in look double from we compare the that amount a we So XXXX us, as the digits and continue. of it, year. to half how at and second pipeline view rates harder gets expect dollar but see we have, we win XX% still second of XX% bookings today, Typically, where for happen call the field momentum of in the would of the to would half

But a in of of And deals. and we've it's so compare it's dollars. also buying tougher the terms got pipeline always season a right nice continuing again, now,

You that announced. saw the wins key we've

in momentum the in administration. ben-admin really world, the nice navigation space, So some leaves

really the So that's us. for driver

So this strategic coverage year. We've got we're compare from and last go-to-market tougher a think accounts, we going enterprise about in better structure now after terms reorganized it's of we how bit year, logos. a how but of last new

a pipeline, just of that's our to overall terms in lot so and and then able execute. And higher rates win pipeline being around of the ARR quality building driver an larger

Stephan Scholl

Joe, definitely -- look that ARR lots it's approach, seeing of moving this benefit you we're from to UPS our side, cost-conscious more like we're at seeing in away best-of-breed pipeline. to the Yes, more that with are environment deals on our enterprise

what see larger is the a in tougher, than the about we've So And is but seen we're ahead. while. pipeline compare yes, excited we

Joseph Vafi

obviously not the big projects Great. us just macro looking of Is be to would of different our in seat. kind kind of factors for should macro the for you could that where business. backdrop That's color. kind what for looking help not but there from the just providing given be what of and real or of the some get great And business, is, 'XX out, historical kind ebb we a see normalization flow you're I what some in then but looking feel growth, know on project-based when a that are guidance, of normalization for, given

Jeremy Heaton

Thanks, Joe. Sure.

you months on on just macro, again, as do work, time of we our talking once project-based to say about. sensitive And the around of So XX% I business. we're which ARR what more talked it's, is yes, X to revenues as the on the than think next again but as have I -- consciousness this well cost wouldn't execution less a we see business, bookings project

expect XXXX and the periods seen coming have We wouldn't peaks us on time. this it I think announced as a be give that But early the year, for the an think execution Investor over this into of where for of well parts I better flow what We will see through of like, and will important as next few and era months continues this we see side we time. looks pipeline, extended Day go it saw, you the as period watch later as XXXX. view we into the head environment can us, we valleys booking what on

I period project-dependent. a us regulatory But this of But in terms extended driver is the of these again, as environment. very wouldn't M&A large for for as well expect time. is activity projects it a

election an year. it's So

an year, work. pickup you coming can typically out election you would So of changes, project in public some see and see some policy

Stephan Scholl

our Joe, a years. the and mean into less year other I going is lot next go get,

metric backlog of As be, going a room used a lot to So book we're in continue will be a revenue, for contract were growth next the orientation to helping XXs, point, months ARR bookings key you know, now but to to of quality business and you'll the company. lot that is that going support our see terms the your to help that better of X set in [indiscernible] that, the of in over drive sustain and give XXs, today, a profitable us revenue doesn't right? to we gave to going and just what with under data good the be look drive to at,

Operator

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

Tien-Tsin Huang

of you tech to for you here successor do Alight. the All Board software best Alight? I'm and can on What of curious, brought next step us share a a you and what experience the just in or Stephan. to is think looking you the what -- with lot

Stephan Scholl

Well, Yes. and the of better know, I we've the XX into modernize my And to listen, we and talking platform, at Tien-Tsin. at announced, a more them Wayfair, think of that it look undo UPS, comment, you I to labor-intensive. the last brought if needs engagement need if which now for, environment, look X,XXX to coming the at with about lot -- of appreciate as I our you of years we meet fifth at that business, year, to business, look supportive talked all need their to at it's And done new it's consolidate, Tien-Tsin, a driving you divestiture about are out, proserve, looking This you Adecco, into of take us for Honda, to look solutions what, employees. better best-of-breed do And you years. simplify, cost-conscious is got to has need the not the is what of we cost of people customers company environment rid with I've to capital-intensive, this point again, we technology payroll this even deals and forefront. and all a out are

that's we're an the getting excited really platform delivery enterprise together getting on benefits the core that core combination advantage So about service to us the business service is, delivery and back what how great gives with elements of to a side. the administration back that strong of

paper that's say why second So on the booking that half we the see And committing it into second in where to drive we're pipeline why to we're publicly the is that's and going beyond. half. double-digit

about excited today. really where company is the So

Tien-Tsin Huang

Got been side. on lot know questions it. of just -- a asked My the I on have follow-up, and answered nonrecurring the

some better. tools trying some playing out? structural of these benefit or role as things just a AI automation curious that of Is as little are there think this I'm understand cyclical Or Just in I'm big issues that changes, coming change? bit to picture. like Is we issue? a about just a well the are of some effort

Stephan Scholl

in? Yes. Do want Go ahead. jump you to

for you... goes it how see Let's

Unknown Executive

much Greg. structural is more that. This as see it view with anything cyclical. I don't I

plan changes Those other If still driven the for it, macro environment, long about the said, that factors quite by a time. are drive large certainly macro higher than that in of have certain what regulatory some you technology think factors really trend, in that's enterprise Jeremy same a sometimes years, are years the been not design M&A they the market, environment.

see don't structural anything I there. So

Stephan Scholl

I'll mean, you I probably this Yes. changes election give in example. great a much an year. as aren't benefits We're year,

is So part deals annual our when bookings And your this is we're and business, point new super enrollment, wins lot the business the clients on to X% as core of of upcoming of things is around you be to are do are are book about? enrollment amazing the employees communications their on want which of know, What to the getting the changes? you stuff, benefits enrollment, But the strong. to some should what's get annual project what that you that during excited different annual a we've small had.

category what is. in dollars comms of that exactly that's millions communications the make in We

or changes business. comes going communications and with the year, new year. be that there's with year, peaks is the regulations, new business. M&A that back year rules plan comes comms requirements. the government if a that and of whether there pre-election increased will into new drives So of to beginning next This book That in goes, potentially dynamics valleys lighter

business versus our project that's when about structure talk what's part different. of you So that

ARR more ebbs these why that's So And short-term flows. the you're focus, us really transcends and which on aggressive be trends. it seeing so

Unknown Executive

is what project ARR drives business... that right. That's growth

Operator

Pete from Christiansen with Citi. of Our the is line question next

Peter Christiansen

in of Stephan. renewal about Best [indiscernible] upon luck just are us, this how to fees terms of the and thinking I'm versus you the curious, year...

Stephan Scholl

hear We really well. very You're can't Peter. breaking you up,

Sorry.

Peter Christiansen

that we is There go. Sorry, better?

Stephan Scholl

better. Much

Peter Christiansen

are to degree this And shaping a I in amount on up follow-up. for or is relates any sense you curious upcoming half guess, contracts last renewal how as I'm And or just the early the season, back have year? how up the there? sense the it of year, renewal I are versus -- seeing that renewal the season of

Jeremy Heaton

Pete. Thanks,

year of up standard in terms pretty renewal. it's We how every a is have -- much set for

think just you contracts. X- our If about of long-term to kind X-year

our -- are here in ourselves, right, some with the and we from a I is space. differentiate I tenure we're with this very got on to us, to again ourselves can spending Goff service, that the clients the think teams leader relationships, average once perspective, retention, our on long-term time years. reorienting an focused ability over extent delivery We've drive, XX Greg value mean,

I every in different year and wouldn't differentiate the with close that retention XX% between we dynamics very the go you And got midterm, through think see, very can going our as we've day the so say 'XX and about expect on long-term are And with here any XX% We're them. clients. this levels how and and for focused we ourselves maintain we the to as into 'XX how we company.

Stephan Scholl

to consolidate on more approach. enterprise Yes. and business, right? of ARR the an And them help as and Companies drive that us I looking to helps are said us on macro environment side this high-value earlier, simplify

navigation plays leaves can only true that benefits us ones that integration if the to really and provide So a and because we're capability.

Peter Christiansen

impacted going as about about as I'm potential forward, notwithstanding thinking as bulk just what's by on model environment. for the you how But the pricing then changes likely looking this of I employment But COBRA, going year's obviously think helpful. just X growth guess 'XX? in think the about a you That's in are comparison here the volume attribution at uplift performance. in and generally, you the And Slide

Jeremy Heaton

Sure.

in it, have contracts and -- annual as increases, offset that work ago, terms inflationary in new ECI SKUs year particular extent to model of which which the protection. know, some about a our we rolled So has an pricing you typical is out to how

the with of roll service customers. about as additional for and opportunity an and And cycle and renewal price products solutions so through we the the out I we go SKUs our and think some think as and new technology

or last headwind to about -- don't volumes, through right, the to in up -- but say driver, I you're it's going Sure, was price fixed perspective and think side comparable a on large I we cycle, down, as We you're frankly, either here COBRA from a a year it do So on away a goes just the right. as go September. that's the that -- that's just just renewal

Peter Christiansen

That's from me. one good to Last hear.

Just sense delay if of creeping on and maybe know of terms in just previous you issue if here curious but the delay there, I chatter the that? in of in bookings, delays environment an any decision days, any given the decision sense in. these any been have there's quarters curious or it's been or any volatility go-live

Stephan Scholl

part point, were answer your your that Alight Greg in which with Workday since longer runs Yes. implementation the I'll today. our let previous second business, of he sits the But delivery delivery. business to no delays

those the previous So delays. were

Unknown Executive

that's way it right. perspective, is specific on exactly benefit to contract hit of and hit in ins. course. It's that's the need annual there. think to to from delivery has enrollment see implementation changing that timing driven And very we partially implementations an much Yes, That's anything by don't the in happen order ongoing cycles the very side to order about business

much be Stephan side on business payroll Workday subject much more that the to to delays. You saw Services dynamic Professional the said, that and more as tended implementation

Operator

of line question America. with is next BalskyHeather the Bank of from Balsky Heather Our

Unknown Analyst

Balsky. Emily is Marzo This for on Heather

differently. other bit little one going think question further I I'm ask to a

this color Is are that can customers, new especially us could give double-digit today. the improvement expected second new target with you slower of you If are that growth upsell in some seeing an there. half, With we from year? you mid-market? it the where target, from with the that the products, ARR What achieve

Jeremy Heaton

team to also we it so can think and wins, right? that add. mean how get with we I but rates new you start to I'll win takes coverage some take to expand relationships go-to-market realigning time of the mean to pipeline, I logo build our it. with pipeline better year, have build Just have, I I both maybe I that market, it's think Sure. driving current higher , Stephan go and last ARR mature it and and higher-quality pipeline, does on execute time back and our pipeline, a as

that pipeline looking forecasting, today, of really execution forward. build we So do of the that and got driver and stages the terms win teams within terms big our we've in of now rates pipeline was in working a of the a deals in with as the terms the it's bottoms-up at moving

starts bottoms-up funnel the and forward. pipeline in what basis really the it of the is So going

you have relationships, So as of Navigation about benefits, and I've current administration years. clients, -- couple administration, expansions if leaves of again, long-tenured we products, products now absolutely, the over last new retiree. the got solutions and newer think the

renewal cycle products think years just So as pipeline. cycle a of newer couple either build the going outside we've renewal of you number a to got through even or last the through over of

Stephan Scholl

new we really give great off last Greg and brought a to business, up brought has new he commercial heads I to want team. in our Goff, in who leader hats year, our

has him in who capability Sarah, amount net new new expansion with of works the great Our is really year wins. in just for installed us also an base. helped and has our new some last incredible driven

our last clients of of us. X to into service functionality we that to is where functionality which experience allow the to is drive personalized environment deliver seeing products better work hard. think approach a we a individual, approach, more what, make each us we're to allows of As And across engagement. We that new are capability a I helping Greg, of and It life lot build because new that sixth map that decisions. higher a to on really bunch the I up delivery engineering consolidate continue our outcomes-based really capability The and enterprise looking of release understand earlier, a point unique a solutions said in put customers how us integrations this cost. to the environments whole to lot capabilities built to road allows us to value macro cut help people we're into takes years, now,

the of code that, As to clients to do with do, momentum some on serve employees you benefits. with to helping individualized largest and in to cracked we of and of drive and hard build think so continue us really I millions an millions help experience really category less. trying we've that's the know, going clients and better the It's

Unknown Analyst

And to is canceled? going back? the what revenue. that you any that being gives Have turning the to I seen delays business come you confidence project are guess, project

Jeremy Heaton

if ARR every and build rebounds, your as is it base, work changes is as acquisitions you almost large enterprise around earlier, we regulatory through, project again lower, lot do This work this it team the as M&A Emily, of pipeline-driven, impact drives said a our goes work that divestiture, of one clients.

So that project work comes back.

changes around drives that benefit partners So how and as there's history space. exist in business sit and this what large for communications this terms plan of lot of we in a

work really we this that term just term through. So long as away not over at but business, go in what's a perspective the from it's project the as gone at we of look has the pipeline near we look

Day think forward the look we more go of year and as we'll think Investor this to I outlook the towards is So through what for of updating 'XX. end through

Stephan Scholl

project business. the is business of And a the ARR derivative

our continued this not net higher products downstream the our let's to forget to further for focus to quality project expanding So clients, wins us that. new footprint into The get business. of all lead

clear want a to point we to sure make So want make. that's I

Operator

Our next Wahrhaftig Steven Wedbush line question comes of Securities. from with the

Steven Wahrhaftig

a I Wahrhaftig are are the straight Or next be is annual driving hear to with of from more a basis a guys. factors realized working the Stephan, is guys $XX on to years. cost of clarify is margin Ives. of migration. over are this lined? from to past EBITDA fluctuations... cloud run on the and little over Dan saving Steven the couple Great And months? a pleasure bit gross sequential you talk it wanted rate this on going and what XX you savings just you luck, This you little this you was the cadence about seeing for bit best more to of that million expecting both cost Can XX

Jeremy Heaton

Thanks, Steven.

So think $XX this annual the run-rate year. $XX about million million of starts

get rate fourth annual of and will come back rate of So And million the run full end into that drive the at third then $XX that some the into quarter. savings run quarter effectively we'll savings next year.

million So that the midterm is it laid how operating importantly that as the ability look But call a how deliver the incremental the margin, EBITDA as you customized, benefit. now our -- clients, drive allows the service and really quality the history cloud our you as -- leverage standardized and right, an side in we think $XX the now teams clients. The model is migration can in a to specific we XX% does business. out of for it of is you clients for bit standardize better for build clients. about more what back-end completed XXXX drivers technology for to and the of around our infrastructure, process Greg deliver technology, COEs but streamline Because you of the is costs the to the standard his also delivery

customer leverage And we'll the technology within to also our continue centers. care

talked about to to through enrollment, of AI with annual and last XX%, there. we continue once that levels the down volumes going expect we better we quality brought year drive again As XX% call to service right technology

for really so about drivers pivot point And want the make those I XX%. But the out as big sure is are that. the we to to migration cloud think

forward. all of huge the cloud work applications of to a lot that to for And was into our a element successfully so this all that us now allows move our clients, of migrate

Operator

over question-and-answer Thank you. concludes gentlemen, conference this hand to Ladies now session. Stephan would Scholl the I closing and comments. our for

Stephan Scholl

appreciate joining there. this Great. of Great and and seeing out all everybody and good look and discussion, forward Jeremy have Thanks to team great a me the here I much dialogue day. morning. very questions, Thanks. good you

Operator

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

may disconnect lines. now You your

Alight (ALIT) 6 Aug 242024 Q2 Earnings call transcript