Alight (ALIT) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $555 million, down 0.4% year-over-year, with BPaaS revenue up 18.6% to $121 million and notable new client wins including Hewlett Packard Enterprise, Nokia, and Siemens.

• Completed divestiture of Payroll & Professional Services for up to $1.2 billion, with $1.0 billion in cash, and finished cloud migration, setting up $75 million in expected annualized savings.

• Initiated a quarterly dividend of $0.04 per share and repurchased $75 million of shares in Q3, reflecting a commitment to capital return.

• Net loss from continuing operations was $44 million for Q3 2024; adjusted EBITDA rose 3.5% to $118 million, with margin up to 21.3%.

• Mobile enrollments on Alight Worklife increased 35% year-over-year, supporting operational efficiency.

Financial highlights

• Q3 2024 revenue: $555 million (down 0.4% year-over-year); recurring revenue was $504 million, comprising 90.8% of total revenue.

• Adjusted EBITDA for Q3 2024 was $118 million (21.3% margin), up from $100 million (18.0%) in Q3 2023.

• Adjusted gross profit was $200 million (36.0% margin); gross profit was $174 million (31.4% margin).

• Adjusted diluted EPS for Q3 2024 was $0.09, unchanged year-over-year.

• Net leverage ratio reduced to 2.9x after $740 million in debt repayment; cash and cash equivalents at $300 million.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $2,338–$2,358 million; Q4 revenue expected at $665–$685 million.

• Adjusted EBITDA guidance for FY24 is $585–$610 million; Q4 guidance is $208–$233 million.

• BPaaS revenue for FY24 expected at $497–$507 million; Q4 BPaaS revenue guidance is $144–$154 million.

• 99% of 2024 revenue is under contract; $1.8 billion for 2025 and $1.4 billion for 2026.

• Operating cash flow conversion expected at 55–65% for FY24, excluding separation costs.