Alight, Inc.

Good morning and thank you for holding. My name is Judith and I'll be your conference operator today. Welcome to A-Lite third quarter of 2023 earnings conference call. At this time, all parties are in 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. I would now like to turn it over to Jeremy Coburn Head of Investor Relations at Alight to introduce today's speakers.

Good morning and thank you for joining us. Earlier today, the company issued a press release with third quarter 2023 results. A copy of the release can be found in the investor relations section of the company's website at investor.alight.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 most recent Form 10-K, as such factors may be updated from time to time in the company's periodic filings. The company does not undertake any obligation to update forward-looking statements. Also, during this conference call, the company will be presenting certain non-GAAP financial measures. Reconciliations of the company's historical non-GAAP financial measures to their most directly comparable GAAP financial measures appear in today's earnings press release. On the call from management today are Stefan Scholl, CEO, who will provide a business and strategy update, Katie Rooney, Global CFO and COO, who will discuss our financial performance and guidance, and Jeremy Heaton, Operating CFO, who will participate in our question and answer session. After their prepared remarks, we will open the call up for questions. I will now hand the call over to Stephen.

Thanks, Jeremy. Good morning, everyone, and thank you for joining us. Nearly three years into our transformation journey, we're delivering consistent and durable financial results, reflecting the mission-critical nature of our products, the resilience of our end markets, and more importantly, the success of our transformation into a platform company. This quarter, we drove high single-digit revenue growth, double-digit adjusted EBITDA growth, operating cash flow expansion, and achieved our second largest quarter ever of BPAS bookings. At the same time, we are investing in our platform strategy, delivering on our restructuring program, and executed our largest quarterly stock buyback to date. According to the results, our third quarter included revenue growth of 8.4% and another outstanding quarter from the high growth category of our business, led by BPAS Solutions, which had revenues increase by 22%. Over the past three years, we have prioritized our long-term strategy, shifting the focus from one-time projects into higher quality recurring revenue on our light work-life platform. This is reflected in our 262 million of Q3 BPAS bookings, representing an increase of 26% year over year. In aggregate, we have now booked nearly 2 billion of BPAS total contract value since 2021, half a billion dollars or over 30% ahead of plan. Standardization through our platform strategy also enabled us to drive down our cost of service. For the quarter, adjusted EBITDA was up nearly 19% to $158 million, and year-to-date, operating cash flow increased 25% from the prior year to a record level for a light since going public. While we delivered great results for the quarter, timing related to project-based revenue as well as the in-year impact from new wins closing later than expected impacted the quarter. However, we have over 95% of revenue under contract for 2023, $2.7 billion of revenue under contract for 2024, and are $500 million ahead on our three-year BPAS bookings target, which enables us to reaffirm our 2023 and midterm guidance. In addition, we are raising our 2023 adjusted EPS guidance range. Turning to product and technology, our investments are driving a simpler and more effective way to navigate the annual enrollment experience. As of October 25th, we are nearly 50% of the way through the process and have seen a tripling in mobile enrollments year over year. This is translating into reduced call volumes, which are down 11% over the same period last year. The reduction in call volume is a key element driving long-term profitability as digital care will continue to drive more efficiency and a better experience for our clients. Additionally, we've made great strides integrating leaves management more deeply within the Alight Work Life platform and have added new features to drive better content and decision support. Our research and client conversations continue to validate that there are gaps in the market around a consumer-grade experience integrated into HR platforms. We have several active client engagements where we're showcasing the powerful combination of leaves with our other administration and engagement offerings and how that can drive significant savings for an employer. We're also excited for how AI is advancing our business, including a number of generative AI use cases underway this year alone. As an example, Alight's AI features are actively driving better outcomes for clients and their employees, with personalization emerging as a pivotal tool for enhancing engagement and cost optimization. One Fortune 50 client seeking to boost HSA participation leveraged a highly efficient AI driven campaign, which resulted in 95% engagement of the eligible population and close to a million dollars in employer tax savings. Our product enhancements are differentiating a light and translating into new wins and expanded relationships that support our future growth. These wins represent a healthy mix of new logo and client expansions across many industries, and our pipeline remains robust. Significant wins this quarter include FedEx, NielsenIQ, BMW, and several Fortune 100 clients. Clients want a digital platform that can be the connective tissue between benefits, payroll, and engagement offerings, and we accomplish that by leveraging AI and data analytics to help employees make better decisions. At its core, that is what our platform strategy is producing, a simplified yet comprehensive enterprise offering that can demonstrably improve employee engagement and generate cost savings. During the quarter, we also made progress simplifying our backend infrastructure and are on track to deliver on our restructuring program as planned. This includes migrating high priority applications, including our data lake, which should better enable us to leverage analytics and the latest developments in AI and deliver $100 million of annual run rate savings when the program is complete in 2024. Finally, let me put into context what our transformational initiatives and investments have meant for the long-term trajectory of Alight. In just a few months, we will have successfully concluded our original three-year plan. The success of BPaaS and our many operational initiatives have laid the groundwork for delivering even more value in the midterm, including higher growth through a compelling client value proposition as a result of building our LightWork Light platform. Next, margin expansion. We moved from customization to standardization and simplified decades of tech stack while still offering the all-important personal touch when needed. And finally, enhanced free cash flow generation to reinvest in the business, strengthen our balance sheet, and return capital to shareholders. We see the market undergoing a paradigm shift where corporations are looking for a partner to be on the front lines with them to help take costs out while simultaneously providing a better employee experience. As a result of our transformation, we are well positioned to be that partner of choice. With that, Katie, over to you.