Alight, Inc. · NYSE:ALIT
Alight — FY2022 Earnings Presentation
24 slides from Alight's earnings presentation, Feb 21, 2023
Slide 1: 4th Quarter and Full Year 2022 Earnings Presentation
4 th Quarter and Full Year 2022 Earnings Presentation Alight, Inc. February 21, 2023 © 2023 Alight. All rights reserved.
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation includes certain historical consolidated financial and other data for Alight Holding This presentation contains forward-looking statements within the meaning of Section 27A of the Company, LLC (formerly known as Tempo Holding Company, LLC) (“Al
Slide 3: Growth strategy & results
Growth strategy & results © 2023 Alight. All rights reserved.
Slide 4: 2022 Key metrics
2022 Key metrics Transformation metrics Foundational metrics $871M TCV of BPaaS bookings (vs. $680-700M guidance) +36M ~70% 98% Participants1 of the Fortune 100 avg. revenue are Alight clients2 retention3 $564M BPaaS revenue (↑45%) $3.1B $659M 84% 2022 revenue 2022 adjusted annual recurring revenue4
Slide 5: Delivering results through second year of transformation
Delivering results through second year of transformation 1 2022 results ahead of expectations as momentum continues • Total revenue growth, excluding Hosted, of +7.5% with BPaaS revenue +44.6% and Adjusted EBITDA1 +6.1% to $659M for the full year due to $38M of investment • Operating cash flow conve
Slide 6: 2022 Review: Alight Worklife driving key OneAlight client wins
2022 Review: Alight Worklife driving key OneAlight client wins with strong bookings and revenue growth % of Revenue BPaaS Bookings ($M TCV) Under Contract on 1/1 83% +45% • New Logo win for Health benefits & Global Payroll HR Services built on Alight Worklife as $871 ~ 75% the engagement platform •
Slide 7: In Q422, launched expanded solutions for wellbeing outcomes
In Q422, launched expanded solutions for wellbeing outcomes Building on our foundation to drive holistic wellbeing and measurable outcomes PROGRAM SMART SAVINGS ALIGHT WELL & INTEGRATED VALUE-BASED INSIGHTS OPTIMIZATION PLANNER MARKETPLACE NAVIGATION AND ANALYTICS 7 © 2023 Alight. All rights reserve
Slide 8: Starting a Family – Alight Worklife Drives Better End-to-end Experience
Starting a Family – Alight Worklife Drives Better End-to-end Experience Take local Access pregnancy pregnancy classes resources Find parent HR Colleague recommendations support groups Retirement accounts Daycare Leave administrator View personalized programs Parental leave management Benefits inform
Slide 9: New solutions & expanding use cases drive digital engagement
New solutions & expanding use cases drive digital engagement ~2x 1.25m mobile App downloads enrollments in 2022 ‘21 to ‘22 89% >170% Record digital CSAT1 monthly mobile active (up from 79%) users in ‘22 TOP 26% INTERACTIONS Reduction in channel jumpers Recommended carousel 4.8 To Do Items Quick Link
Slide 10: Increased engagement provides more data to power our Alight Worklife AI engine
Increased engagement provides more data to power our Alight Worklife AI engine Robust 30% ~2M users across data sets conversion 96 clients AI rate 5 Analytics and new engagement insights channels Mobile Push Text Card Insights Alight Worklife IVA Journeys 80% AI engine reduction in client configurat
Slide 11: Alight Worklife platform
Alight Worklife® In 2023, we will Alight Worklife essentials Engagement & Insights Platform Mobile App | Web | Engagement Content | Employer Tooling AI Virtual Assistant | Analytics | Integrations | Security Core Platform help clients + Alight Worklife engagement PLATFORM understand the Wellbeing &
Slide 12: Financial results & outlook
Financial results & outlook 12 © 2023 Alight. All rights reserved.
Slide 13: 4Q summary of consolidated results
4Q summary of consolidated results ($ in millions) 4Q22 4Q21 Change 4Q Highlights Revenue • Revenue growth of 9% driven by substantial BPaaS revenue growth Total Revenue $942M $864M +9.0% • Strong margin expansion Revenue ex-Hosted $931M $853M +9.1% across both gross margin and EBITDA margin BPaaS R
Slide 14: FY 2022 summary of consolidated results
FY 2022 summary of consolidated results ($ in millions) 2022 2021 Change FY 2022 Highlights Revenue • Revenue growth above guidance range at +7.4% Total Revenue $3.132B $2.915B +7.4% • Employer solutions recurring Revenue ex-Hosted $3.089B $2.873B +7.5% revenue growth of 9.1% • Gross margin impacted
Slide 15: Employer Solutions strength across revenue streams with margin expansion
Employer Solutions strength across revenue streams with margin expansion Employer Solutions Employer Solutions Employer Solutions Revenue ($M) Gross Margin Adjusted EBITDA1 ($M) 4Q Highlights • 9.3% growth in +190 bps recurring revenue +10.0% +24.4% 38.0% $240 • Strong annual $836 enrollment season
Slide 16: Professional Services positioned to accelerate growth
Professional Services positioned to accelerate growth Professional Services Professional Services Professional Services 4Q Highlights Revenue ($M) Gross Profit ($M) Adjusted EBITDA1 ($M) • Revenue growth expected to accelerate in 2023 $93 $95 with very strong bookings year in 2022 $24 Project $20 •
Slide 17: Capital structure supported by resilient business model
Capital structure supported by resilient business model Debt Maturity Schedule as of 12/31/22 ($M)1 ($ millions) 12/31/2022 12/31/2021 $2,500 2,455 Total Debt $2,823 $2,868 $2,000 Less Cash $250 $372 Net Debt $2,573 $2,496 $1,500 $1,000 • Well protected in a rising rate environment with hedging stra
Slide 18: Delivering on our transformation through Year 2
Delivering on our transformation through Year 2 Phase 3: Phase 2: Operational Excellence Alight Worklife Selling & delivering Alight Worklife with Phase 1: Front-end cloud platform back office cloud migration Commercial Go To Market launch & integration 2023 + BPaaS: Driving engagement & outcomes th
Slide 19: Expanding margins & cash flow through transformation
Expanding margins & cash flow through transformation Alight Worklife transformation simplifies how we deliver for clients with better outcomes, while driving significant opportunities to streamline our Back Office infrastructure Employer Solutions Segment GM% +100–150 bps. +50-100 bps. Alight Workli
Slide 20: 2023 guidance (83% of revenue under contract)
2023 guidance (83% of revenue under contract)1 Key Factors FY 2023 Guidance • Accelerating growth driven by BPaaS bookings & full year ($ millions) impact of Federal Thrift • Professional Services project revenue expected to $3.475 – $3.510B rebound with higher starting backlog Revenue +11 - 12% • C
Slide 21: Appendix – Non-GAAP Reconciliations
Appendix – Non-GAAP Reconciliations © 2023 Alight. All rights reserved.
Slide 22: Adjusted EBITDA
Adjusted EBITDA Successor Predecessor Three Months Ended Three Months Ended Year Ended Six Months Ended Six Months Ended December 31, December 31, December 31, December 31, June 30, (in millions) 2022 2021 2022 2021 2021 Net Income (Loss) $ (66) $ 72 $ (72) $ (48) $ (25) Interest expense 33 29 122 5
Slide 23: Segment Adjusted EBITDA
Segment Adjusted EBITDA (4) Segment Profit Successor Predecessor Three Months Ended Three Months Ended Year Ended Six Months Ended Six Months Ended December 31, December 31, December 31, December 31, June 30, (in millions) 2022 2021 2022 2021 2021 Employer Solutions $ 240 $ 193 $ 659 $ 344 $ 274 Pro
Slide 24: Adjusted Net Income & Adjusted Diluted Earnings per Share
Adjusted Net Income & Adjusted Diluted Earnings per Share (1) 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. (2) Assumes the full exc