Alight, Inc.

Good morning and thank you for holding. My name is Daryl and I will be your conference operator today. Welcome to Alight's second quarter 2021 earnings conference call. At this time, all parties are in a listen-only mode. 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. Now, I would like to turn it over to Jeremy Heaton, Executive Vice President of FP&A at Alight, to introduce today's speakers.

Thank you, and we appreciate everyone dialing in this morning. Earlier today, the company issued a press release with second quarter 2021 results. A copy of that release can also be found on the investor relations section of the company's website at investor.alife.com. Before we get started, please note that some of the company's discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in the company's filings with the SEC, including the company's registration statement on Form S-1, filed on August 2, 2021, as such factors may be updated from time to time in the company's periodic filings with the SEC. The company does not undertake any obligation to update forward-looking statements. Also, throughout this conference call, the company will be presenting non-GAAP financial measures. Reconciliations of the company's historical non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, appear in today's earnings press release, which is available on the company's website at investor.alight.com. On the call for management today are Stefan Scholl, CEO, and Katie Rooney, CFO. After their prepared remarks, we will open the call up for questions. I will now hand the call over to Stephan.

Thank you and good morning everyone. We're really pleased with our performance over the first half of the year. We drove accelerated growth, beat our first half guidance, and the momentum we are seeing gives us confidence to raise our full year guidance. It's just been over one year into our transformation, and we couldn't be more energized about our unique opportunity to support the decade of the employee. Companies are waking up to the fact that their own employees sit at the heart of driving their transformation, and they need to accelerate their digital strategies to address the two most important aspects an employee cares about, improving their financial well-being and staying healthy. This is why we are so excited about the transformation underway at Alight. We are powering human capital by bringing to market the first integrated employee benefit engagement platform, Alight Work Life, which drives unprecedented levels of engagement and improved productivity through a personalized experience. And this is resonating with our clients. Back in January, our original forecast was for a moderate revenue decline in the first half of the year. But as we have shifted towards higher value cloud-based solutions on the Alight Work Life platform, we are happy to report we are ahead of that guidance, delivering positive growth and improved bookings. Given these results and the momentum we are seeing, we are raising our full-year guidance on revenue and adjusted EBITDA and have increased visibility to our out-year projections as well. Katie will review our financial performance in more detail in a moment, but let me give you a few highlights for the second quarter. On a year-over-year basis for the second quarter, total revenue increased 3.9%. More importantly, this was driven by a 5.4% increase in our employer solutions segment, where the majority of our tech-enabled business process as a service offerings, what we call BPAS, sit. Gross margin in our employer solutions segment improved 400 basis points to 33.6%, and adjusted EBITDA increased 6.6% to 145 million. Finally, a key indicator of our transformation progress is our BPAS bookings. I am happy to report that these were significantly ahead of our plan, up 268% to 280 million in the first half of this year. When I joined Alight in April of last year, it was for one reason, to change the relationship and experience that companies and their employees have around benefits. Today, companies are spending billions of dollars on benefits and often have hundreds of providers and applications, but none of these are stitched together to drive outcomes or insights into the health and financial security of their people. Businesses are thriving. but the challenges facing employers and employees today have never been greater. Increasing levels of stress, depression, and anxiety are leading to a surge in mental health issues. Healthcare costs are skyrocketing, and more of the burden is shifting to employees. The cost of living is going up, and many employees don't know if they'll be able to retire on time. And a rise in part-time workers, gig workers, regulation and global competition for talent is changing the relationship between employer and employee. Employees are facing a real crisis and so are employers, and the pandemic has only made things more difficult. As a result, companies everywhere are waking up to the realization that their employees need help, which is key to their success going forward. For the last 20 years, companies have been evaluated by the value they create for their shareholders, and customers. At Alight, we believe over the next decade, success will be measured by how companies treat their people. Our solutions are changing the way organizations think about their relationship with their people and the way their people interact with their benefits. Unlike the technology world and the shift from perpetual to cloud-based systems, the human capital industry has remained highly fragmented. Companies are implementing more and more service providers and seeing diminishing return on their investments. We are disrupting this approach with a best in class enterprise solutions that brings together health, wealth, and global payroll into a single integrated platform that drives better outcomes and higher engagement for employers and their people. To achieve this, we have transformed our business and the way we bring new technology and solutions to the market. We are deploying our solutions on a common reference architecture with common data models and common integration points to implement new solutions across our client base in a fraction of the time it took before. The most visible example of how we're bringing our new strategy to life is the Alight Work Life platform, which is the foundation of our next generation product. Alight Work Life combines a beautiful consumer-grade experience with advanced data analytics and AI to deliver personalized recommendations in a user-friendly format. It has a built-in integration layer that allows for seamless integration with our health, wealth, and payroll clouds and other third-party applications. Historically, what would have taken us years to complete will be rolling out in a matter of months as our new Alight WorkLife mobile app goes live across 400 of our largest clients. The app will allow employees to use their mobile device during the upcoming annual benefit enrollment period this year. The speed of this deployment and putting real innovative technology in the hands of approximately half of our entire membership base would never have been possible without the investments we made in cloud-based technology. In conjunction with a light work life, we are rolling out our next generation health, wealth, and payroll clouds. All of these clouds are designed to integrate seamlessly into our Light Work Life platform, and as we sell and then implement new clients over the next few years, we will reduce implementation times. With the framework of the Light Work Life platform, mobile app, and new clouds in place, we can bring our value engineering teams into our client discussions and begin to show them how we can engage their people, drive better outcomes, and improve their ROI performance. This gives us the opportunity to meet the current needs of our clients while providing a clear path to migrate them up the value chain by providing additional solutions when they are ready. Starting with our core benefits administration solutions all the way up to our premier integrated platform with guaranteed outcomes and ROI, we offer clients a natural progression based on their strategic priorities and particular needs. Most of our clients today are at the foundation level, and moving them to Premier presents a 2x revenue uplift potential. Organizations around the world believe in a lights approach and the value we bring to them and their employees. In the second quarter, we added Navistar and Sartorius to our new client roster and expanded our solutions with ABN Amro, Ledesma, and GE Appliances. So let me walk you through a great example of how we are executing on our work-life BPAS transformation. Navistar is a one a light new partner with a total employee and retiree population of approximately 40,000 people. Navistar has a vision for an end-to-end partner that puts their employees at the center of their own transformation. Through our value engineering team, we quickly demonstrated how Alight is uniquely positioned to be Navistar's preeminent employee transformation partner from hire to retire. Our integrated solution will allow us to optimize Navistar's technology, positioning them to win in a competitive marketplace. Looking ahead, our progress on the product and technology front will allow us to continue expanding our breadth of solutions and core competencies. The fact that we serve over half of the Fortune 500 and have 30 million members today with that number going to an estimated 36 million members once the Federal Thrift Program goes live next year gives us a huge strategic advantage. That's the moat around our business. To drive outcomes, you must first drive engagement, but to drive engagement, You need data, you need content, analytics, and AI. We have completed seven acquisitions over the past four years and will continue to build, buy, and partner to expand on this significant competitive advantage. Before I wrap up and turn the call over to Katie, I would like to take a moment to thank our team of elite colleagues around the world who are working tirelessly to deliver for our clients and their people with excellence each and every day. This past year has been extraordinary in so many ways and our people have shown exceptional resilience, flexibility, commitment, and dedication. And I am so proud to be part of an organization with such an incredible group of talented people. I'm excited about what's ahead for Light as we enter our next chapter as a public company. Now, let me turn the call over to Katie to provide a deeper dive into our progress and our trajectory and review of our second quarter results.

Thanks Stefan and good morning everyone. The progress we're making against our transformation objectives is driving several positive trends across our business. First, we continue to see strong growth in bookings led by strength in our tech-enabled BPAS offerings. On a total contract basis, bookings increased 14% to $435 million and BPAS bookings increased 287% to $240 million in the second quarter. This represents the fourth consecutive quarter of double-digit bookings growth. Second, the strong bookings growth is leading to revenue growth and higher contracted revenue in the out years. Excluding our hosted business, which we are in the process of winding down, revenue increased 5.1% in the second quarter and BPAS revenue increased 19%. With our strong first half bookings, we now have over 90% of projected 21 revenue and over 60% of projected 2022 revenue under contract, up from approximately 75% and 55% at the start of the year. Third, faster growth in our BPAS offerings and our streamlined delivery model is supporting gross margin expansion in our largest segment, employer solutions. In the second quarter, employer solutions gross margins increased 400 basis points to 33.6%. And fourth, our value proposition and products are resonating, and we are winning new clients and want to light deals as a result. Turning now to our consolidated second quarter results. On a year-over-year basis, total revenue increased 3.9% to $672 million. Excluding the hosted business, total second quarter revenue increased 5.1% year-over-year to $661 million. Total DPAS revenue, which is a key indicator of our transformation, rose 19% to $94 million. Finally, our adjusted EBITDA increased 6.6% to $145 million. Looking at our two primary segments, employer solutions revenue increased 5.4% from a year ago to $569 million, driven by growth in recurring revenues and higher project revenue. Employer Solutions' gross margins improved 400 basis points, driven primarily by operating leverage and lower delivery expenses from our productivity initiatives. And Employer Solutions' adjusted EBITDA increased 8.7%, and adjusted EBITDA margins improved 80 basis points to 24.3%. Turning to our professional services segment, revenue increased 3.4% to $92 million, driven by recurring revenue as we continue to help clients realize the investment in their cloud technology. Growth profit was unchanged on an absolute basis, and adjusted EBITDA declined by 2 million to 7 million as we continue to invest in key talent to support growth in the back half of the year. Turning to our balance sheet and credit metrics, on June 30, our cash and cash equivalents were $460 million, and our total debt was $4.1 billion. In conjunction with the Foley-Trazimine merger on July 2nd, we repaid over 40% of our long-term debt of $1.8 billion, which consisted of $556 million of our term loan and $1.2 billion in unsecured notes. With the significant reduction in leverage, we have greater ability to invest both organically and inorganically into our business. Touching for a moment on M&A, we signed a definitive agreement to acquire Aon's retiree health exchange business and expect the transaction to close in the fourth quarter. The retiree health exchange is a Medicare brokerage business that gives us additional scale, expertise, and capabilities in Medicare enrollment to further expand our ability to serve employees from hire to retire. This deal supports what Stefan outlined on our work-life platform strategy and ability to continue to buy, build, and partner on additional content and technology to increase the value delivered to our clients. Buying and integrating assets is a core competency for this team and something we will continue to do in a structured and disciplined manner. Given our momentum coming out of the first half of the year, along with the Aon acquisition, we are raising our full year 2021 revenue growth outlook to three to 5% from 1%. We are also raising our full year 21 adjusted EBITDA outlook to $610 to $620 million, which now includes estimated public company costs that were not included in our previous full-year adjusted EBITDA outlook. In closing, we are confident that our transformation strategy will position us well for the long term. We're ahead of our plan and building momentum as we look to 2022 and beyond. This concludes our prepared remarks, and we will now move into the question and answer session. Operator, would you please instruct participants on how to ask questions?

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your questions. Our first questions come from the line of Peter Heckman with DA Davidson. Please proceed with your questions.

Good morning, everyone. Thanks for taking the questions. In terms of your bookings in the first half of 2021, can you talk about, are there certain areas that seem to be higher priority, health administration, navigation, 401 record keeping, you know, there seem to be higher priorities for corporate customers? And then in a related question, In terms of some of the larger projects that are in the contracted backlog, like the federal thrift savings plan, can you talk about some of those larger projects and when you expect the timing of them to start to hit revenue and go live?

Sure, Peter. Thanks for the questions. In terms of bookings, what I'd say is we saw good momentum actually across all of the solutions in our book. We did see significant demand around global payroll, But I think importantly, you know, what we saw, and you heard it in Stefan's prepared remarks around Navistar, is we're seeing more one-of-light deals, which are larger and more comprehensive as we bring together kind of the total value to the employer. And so I think that's, you know, that's a key driver for us as we look at the pipeline going forward. And then on your second question, just on the larger deals, you're right, with our contract of service, the federal thrift, we are still on track to bring them live at the end of next year. And so that's obviously in our forecast for next year. And obviously we're building kind of the infrastructure around our wealth cloud to support the thrift this year. So key investment for us this year.

I think the only thing, Peter, I would add to the bookings question is, as you remember, we started aggressively in May, June of last year with our whole BPAS go-to-market approach. And so since that time, If you look at last six months, our average BPAS deals themselves have doubled in size. There's more product in them, bigger footprint. So that's, I think, a key measurement is that our average pipeline deal has doubled in the last year alone.

Okay, that's helpful. And then it sounds like it's probably a relatively smaller deal, but maybe not given the close. So just wondering if you could provide some sort of – brackets around the potential annualized revenue from the Aon Retiree Health Exchange business, and if possible, maybe some brackets around a purchase price?

Yeah, so if we think about the Aon deal, you're right. It's not material for us overall. I mean, I do think, though, as you think about the strategic fit and what it will help drive as we think about building up, you know, the overall strategy for our clients from hire to retire, it's, you know, it's a critical aspect of that. So it is factored into our guidance for the year with, you know, that business being more back-end loaded but won't be material overall.

Great. Okay, I'll get back in the queue.

Thanks, Peter. Thanks, Peter.

Thank you. Our next questions come from the line of Ramsey L. Assall with Barclays. Please proceed with your questions.

Good morning and thanks for taking my question. I wanted to ask also about bookings. Obviously, BPAS bookings growth accelerated super nicely in the quarter. I'm trying to better understand the conversion cycle between bookings and revenue. How should we think about kind of, well, when and how should we think about revenue kind of catching up with those accelerated booking numbers? Maybe specifically in BPAS, but more generally as well.

Yeah, Ramsey, great question. And I'd say a couple of things. I think first, you know, what you'll see is there could be volatility quarter to quarter in bookings as you think about, again, some of the larger deals we're seeing now in the pipeline. But if you think about the conversion rate, you know, today, We said on average it takes about a year, depending on the cycle a deal is in and the go-live time, to bring a client live. So what we've tried to do to kind of help you understand that is, I don't know if you heard in my prepared remarks, just giving you more color on kind of the revenue under contract. Because I think that piece translates for you a little bit more how those bookings fall into our guidance. So having over 60% now of our revenue in 21 under contract versus 55% at the start of the year, I mean, that's over 230 million of incremental revenue. And so we are seeing it start to play through the book. But again, that will be a multi-year process.

And maybe one more thing, Ramsey, to add to that would be there's a big focus for us to move from project to subscription and have the percentage of our recurring revenue increase year over year. And if you remember from our investment deck, we committed to a guidance of this year being around 81% coming from recurring revenue. So with the bookings that we've had, we're over 84% already towards recurring revenue from that booking. So that's another measurement. to really help you understand the waterfall from bookings to recurring revenue.

Got it. That's very helpful. Thanks. A follow-up from me is there was some recent media chatter about potential strategic alternatives for the company. Can you give us just your general view on your appetite for some transformational merger?

Yeah, listen, I mean, obviously, we don't comment on speculation. What I will say is the last, you know, year or so, there's a lot of excitement amongst our employee population, amongst our clients. You know, the transformation we started really does meet the needs of what our clients need, Ramsey. You know, there is a absolute pent-up demand from our clients in giving employees just a lot more help around financial wellness and staying healthy. And so that's creating a lot of excitement around the company. So that's where we're focused on is really supporting what our clients need today as a light.

Fair enough. I appreciate it. Thanks so much. Sure. Thank you, Ramsey.

Thank you. Our next questions come from the line of Tianxin Wang with J.P. Morgan. Please proceed with your questions.

Thank you. A good result here. Stefan, just to build on what you just mentioned here, like all earnings season, we've been hearing this war for talent and wage inflation and, you know, difficulty hiring and attrition and whatnot. Does this, is this, um, is this good for you guys from a demand perspective and building up the pipeline? Are you seeing that? Or could it actually be a distraction as folks are focusing in other areas and maybe deferring some decisions on the, on the platform side? Just love your take there.

Yeah, great question, Tenshin. And we talked about this last time as well, which is, you know, what I'm seeing is there's a lot on the docket for our clients. What's exciting is our investments in our commercial business. If you remember last year, we put a ton of money into our value engineering teams, the outcomes teams that are going in and doing process maps for our clients because they are waking up today and realizing that, that it isn't about foosball tables and free lunches anymore. They have to really provide a much better support system for helping employees be financially secure. This mental illness crisis that we always read about, you know, is it a health crisis? Of course it is, but it's also a crisis of people not having the savings they need. So it creates anxiety and depression. So the whole blending and that move to enterprise from best of breed is You as analysts have all written about it so many times. Look at the money that was spent by our corporate clients on driving client transformation. Not enough has been done around employee transformation. There still is a hodgepodge of some of my biggest clients have hundreds of systems that to stitch together for an employee to really help them understand how to drive, you know, health and wellness. And we're coming together with an enterprise platform. So it is top of mind. We are getting to the CFO, to the outcome discussion, there's savings to be had. So we're seeing a lot of excitement and it's manifesting in the pipeline. It's manifesting in like, look at the Navistar deal I just talked about. I mean, that deal in Navistar is a net new client. I wouldn't have thought a year ago we'd be able to get something that comprehensive done so quickly, which it would have taken five different vendors to stitch together what we just did for Navistar as a great example. So we're pretty excited.

No, it makes perfect sense. Two quick model questions for you, Katie. I'll ask them together if you don't mind. Just the gross profit dollar and margin expansion in employee services, that was obviously up quite a bit. Any unusual call-outs here, or is that – just the result of mix shifting to cloud. And then also just the, can you decompose the guidance rates for us? Just trying to put some attribution to the change in revenue guidance.

Yeah, sure, Tingen. So on the gross margin improvement, you know, what I'd say is there could be some volatility quarter to quarter, but overall in terms of the trajectory of improvement, I mean, that really is the flow through, as you said, from operating leverage from you know, the BPAS growth along with the productivity initiatives that, you know, are well underway. So, you know, I feel good about kind of the momentum there. And in terms of guidance, you know, I think what I'd say is obviously we're a half, first half of the year, we see that trend, you know, kind of continuing. So as we think about kind of the overall growth for the business, there's, you know, look at, you know, as Stefan said, look at where we landed on subscription revenue and on BPAS revenue, right, that momentum is continuing into the second half. So, you know, there absolutely would have been a raise either way. I think, you know, the challenge for us is obviously the timing of the Aon deal closing, you know, could have a number of impacts, you know, month over month. But if you think about the 3% to 5%, that obviously includes a benefit from the underlying business along with the acquisition.

Thank you.

You're welcome. Thank you. Our next questions come from the line of Kevin McPhee with Credit Suisse. Please proceed with your questions.

Great. Thanks so much. Hey, I guess based on the BPAS bookings, is there any way to think about what percentage of revenue BPAS should be as we think about exiting 21 and then 22 based on the bookings you have already?

Yeah, Kevin, so if you recall in kind of our original outlooks back in January, we had said that BPAS as a percentage of revenue would be around 12% exiting this year. You know, that number is already at 14% from where we sit today. So, again, seeing good momentum there. Our guidance for next year was, I believe, slightly higher than that. around 17%. So as we think about the momentum this year, right, already being ahead by a couple percentage points, I think we'll see that continue into next year.

That's super. And then I guess when you think, pardon me, excuse me, excuse me, sorry about that. Estefan, what was it, obviously Navistar is a huge win for you folks. What was it, do you think, overall that kind of drove them to you? And, you know, would you think about kind of any type of seasonality in the business from a bookings perspective? Is there anything you'd call out quarter to quarter, just given the size of the clients, whether there's, you know, a certain time of the year we should look at in terms of bookings, anything like that? And again, what drove the Navistar win overall?

Yeah, I think it was the investments in not only in product, but in our commercial teams when Navistar raised their head and said, how do we completely transform our human capital management tower? They went to the market and realized that they would need, as I said earlier, almost five different vendors to stitch it all together. And then we came in and said, well, we can do all of it at a better cost rate. And they also realized at the end of the day that they have to engage their employees better, Kevin. If you look at all these great companies that are out there in our space, they're all low single-digit engagement rate percentages. I mean, that is not a success metric in the long term. And so we're very focused on using our work-life platform. We showed them through this much better consumer-grade experience. With the analytics dashboard, they're going to get much more information. It's going to be super personalized for the employees. So when they log in, it's going to be based on their history, their age, income level. There's a lot of information that you can really garner when you have an integrated approach to our whole benefits platform. You can give them much better insight and much better support in making trade-off decisions across 401ks or HSAs or which benefits platform to use. I saw a startling stat the other day, 70,000 employees. Google searches a minute done in the United States for people looking for doctors and looking for health and looking for support. I mean, Google is not the standard of record or system of record I would want to go to to find out who's a good doctor and who's not. That's where we come in, and I think Navistar really sees that and is looking to us to drive that as an integrated enterprise approach.

And then on bookings, what I'd say is You're right, and kind of a normalized basis. We would see bookings grow over the course of a year. Our original guidance for BPATS bookings for the year was $395 million, and we're already at $280 halfway through the year. So we did see some larger deals in the second quarter. So I think there's good momentum there, and I think we're well on track for the year, but I think overall that's how to think about it.

That's helpful. Can I just squeeze in one more? Sure, go ahead. On the Work Life app, as that goes live, would you expect that to kind of shift the acceleration of BPAS bookings based on employee activities as that app goes live? Because it sounds like it's going to be across half your client base and obviously really, really nice momentum there. But how should we think about that in relation to BPAS bookings?

Oh, listen, I mean, at the end of the day, Being able to meet the employees where they want to be met, which is on their mobile phone, that's what we're going to do for 15 million of our participants by the next few months, which even a year ago I would not have thought possible. And so here we sit with that right in front of us. So that does create new momentum and excitement on use cases. And it drives engagement. You know, at the end of the day, when you think about all these great solutions that are in this space that we're in, it always comes back to engagement. And that's where I think we have such a strong advantage over everybody else in the market that 30 million people have to come to us, 16 million are not going to have, or 15 million are going to have a much, much better experience this coming annual enrollment in front of us. So that's going to drive a lot more use cases and support for One Alight for sure.

Thank you.

Yeah, thank you, Kevin. Thank you. Our next questions come from the line of Scott Schoenhaus with Stevens. Please proceed with your questions.

Hi, Tim. Congrats on the quarter. I just wanted to follow up on your employer solutions growth, the ongoing opportunities in upselling your BPAS to existing clients. Obviously, BPAS now represents 55% of your total bookings. I know you previously mentioned that you plan to add 120 new sales and support team members in the first half of the year. Just wanted to see if you're on track there. And is your focus here with these new sales members mostly focused on upselling the BPAS solution, or is it focused on new client wins internationally or in the mid-market in the U.S., or is it really a combination of all three? Thank you. That's a lot there, Scott.

Listen, on the commercial side, we were super aggressive. And listen, you've seen the press releases. Look at some of the names of the people we've hired. I love sitting here on a call with all of you and talking about how clients have voted with their wallets, but it's equally important, if not more in some cases, on employees voting with their careers. And we have hired... the best people from some of our major competitors. And you don't have to look very far to see the talent pool that we've hired. So on your commercial investment and talent, I mean, we are right on the mark, if not ahead, of where I thought we would be at this point in time. that has manifested itself into our BPAS pipeline being significantly higher than it was a year ago. I already mentioned the statistic that our average BPAS deal itself has already doubled, which is pretty significant. And then I will say I have been super impressed with the net new sales team, how fast the pipeline and the demand in net new for this one-to-light approach is manifesting. And so that's an exciting area for us. Probably, well, probably it is significantly ahead of where I thought we would be in net new. And then I think the other question you had was in our install base. You know, we've been very intentional, and I said it on the call earlier, most of our clients, if not, you know, 80 plus percent of them are on that foundation level And when you map them to the products that we have today, there is a at least 2x uplift in every one of our install base accounts. Hence why we've put so much money into product and technology so that we can go in and do the value engineering work to monetize our install base. So we're coming at it from all angles, but definitely work life is at the core of that transformation. Hopefully I answered all of them, Scott. You got them. Thanks so much. Okay, thank you.

Thank you. Our next questions come from the line of Ryan Krueger with KBW. Please proceed with your questions.

Hi. Thanks for taking my question. There's been a recent pickup in 401K consolidation as scale has become increasingly important in that business. So my question is, do you view your wealth businesses as a critical part of the ongoing strategy, or would you consider a divestiture to focus on some of the higher growth areas you've talked about?

Yeah, Ryan, thanks. I mean, you know, absolutely this on one of light, it is that comprehensive approach that is crucial to our clients. And not to get to, I'm trying to keep this a really short answer because I get pretty excited about what needs to be done for our clients. To help serve employees well, you need access to the 401k data. You need access to their savings. How much our employee savings fits so much into the that discussion around mental illness and anxiety and depression. Most CEOs that I've talked to don't know how many of their employees are in a financial crisis. I would tell you with everything going on in this world, every CEO needs to know that. And so that's what we're front and center on. And having these wellness applications and technology and platform as part of work life connected then to making the right health care decisions or benefits decisions is absolutely tantamount to our one-on-one approach. So absolutely the one integrated light dynamic. And it's resonating, as you've seen in some of our results in our pipelines.

Yeah, that's helpful. And then just a follow-up, can you just provide an update on your efforts to – I know you're largely very large plan focused, but on your efforts to penetrate the more mid-market?

Yeah, Ryan, I think – so overall, are you asking specifically in kind of the wealth side or overall?

More on the wealth side.

Yeah, what I'd say is if you think about kind of our platform strategy, you're right, it has been focused on more of the larger enterprise. We continue to evaluate the middle enterprise space, and I think there's an opportunity to, again, build buy-in partner across that to continue to go after that. So we think about it along all three of those to make sure we're going to land in the right spot there. But you're right, historically we've been more focused on the larger enterprise.

Great, thanks a lot.

Thank you, Ryan. Thanks. Thank you. There are no further questions at this time. I'd like to hand the call back over to management for any closing comments.

Great, thanks very much, and thank you, everybody, and thanks for the questions today, and we appreciate all of you joining us. We look forward to continuing to update on our progress as we move through the rest of the year, and have a great day. Thanks, everyone. Thanks, everyone.

Thank you. That does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a great day.