Alight (ALIT) Q4 2025 earnings summary

Executive summary

• FY25 revenue declined 3.9% year-over-year to $2.26 billion, with recurring revenue down 2.2% and project revenue down 21.8%.

• Adjusted EBITDA for FY25 was $561 million (24.8% margin), down 5.6% year-over-year.

• Adjusted net income fell 15% to $266 million, and adjusted EPS was $0.50, down 12.3% from FY24.

• Free cash flow for FY25 was $250 million, supporting strong liquidity entering 2026.

• New CEO is focused on operational excellence, client relationships, and product innovation after missing 2025 financial targets and guidance.

Financial highlights

• Q4 FY25 revenue was $653 million, down 4% year-over-year; recurring revenue down 1.6%, project revenue down 27%.

• Q4 adjusted EBITDA was $178 million (27.3% margin), down from $217 million (31.9%) in prior year.

• Full-year adjusted net income was $266 million, adjusted EPS $0.50, both down from 2024.

• Non-cash goodwill impairment charge of $803 million in Q4, with $83 million goodwill remaining.

• Free cash flow for the year was $250 million, with $273 million in cash and equivalents at year-end.

Outlook and guidance

• 2026 expected to be a transition year, with Q1 revenue projected to decline by high single digits and adjusted EBITDA margin down 500-750 basis points year-over-year.

• No full-year guidance provided due to leadership transition and ongoing analysis.

• Over $100 million in capital to be deployed for foundational investments in 2026.

• No significant TRA payments expected in 2027 and 2028, allowing reallocation of free cash flow to growth, deleveraging, and share repurchases.

• Entering 2026 with $603 million in liquidity, including $273 million in cash and $330 million available on revolver.