Alight, Inc.

Good morning, and thank you for holding. My name is Ryan, and I will be your conference operator today. Welcome to Alight's fourth quarter and full year 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 in the investor relations section of the company's website. And now, I would like to turn the call over to Jeremy Cohen, Vice President of Investor Relations at Alight. Please go ahead.

Good morning, and thank you for joining us. Earlier today, the company issued a press release with fourth quarter and full year 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 Schull, CEO, Katie Rooney, Global CFO and COO, and Jeremy Heaton, Operating CFO. After their prepared remarks, we will open the call up for questions. I will now hand the call over to Stefan.

Thanks Jeremy and good morning. Today marks the end of our initial three year plan. Our aggressive technology and product transformation is delivering a first of its kind integrated HR platform capability that supports employees staying healthy and financially secure. We have upgraded all of our clients from over 6,000 custom solutions to a common SaaS-based platform and taken over 200 million interactions a year out of a private data center and into the cloud. Because of this, we were able to deliver a better experience for 10 million people by tripling the mobile usage through annual enrollment. This capability did not exist 18 months ago. Within the platform, we have built over 1,000 AI content modules, which have taken our engagement rates from 10% to over 50%. This means employees are engaging with us on average 22 times per year. And because of this, our AI decision support is driving $500 in savings on average per participant. This is the foundation for the future that has allowed us to add millions of people while reducing calls per participant by 20% and still achieving record customer satisfaction, all attributable to our product enhancements and better AI capabilities. It is these investments that have allowed us to enter 2024 with a record backlog of revenue under contract of $3 billion, which is up $900 million from three years ago. This is being driven by our high-growth BPAS solutions that have delivered over $2.2 billion of cumulative bookings and included wins such as Nielsen IQ, MasterBrand, and Siemens Healthineers, to name a few this year, and has also generated a 30% BPAS revenue CAGR over our three-year plan. Our strategy has enabled a light to move from a low single digit grower to mid single digits and we've added hundreds of millions of dollars in profit while increasing our operating cash flow conversion from 19% in 2021 to 52% in 2023. It is this track record that gives us the confidence to reaffirm our midterm financial outlook. In fact, we believe there are opportunities to advance our platform and well-being strategy. We have hired financial advisors who have been conducting a strategic portfolio review to accelerate our midterm financial and strategic objectives of becoming a higher margin and more recurring revenue business. In doing this review, we believe we can move even faster to deliver value for our clients, colleagues, and shareholders. As you can see, while we're excited about the long term, we also have to deliver in the short term. In late December, we experienced an isolated impact from a significant retiree health client, which resulted in revenue growth of 9% for the year, short of our expectations. Mitigation efforts in this business and renewal activity of Medicare plans did not offset this impact and represented the majority of our revenue shortfall for the quarter and for the year. This is a specific non-recurring event. Absent the retiree business, Alight's annual growth was nearly 11%. For the quarter, Both adjusted gross margin and adjusted EBITDA margins expanded over 200 basis points with double digit adjusted EBITDA growth. We also grew BPAS revenues nearly 30%. Sales momentum continued with BPAS bookings of $261 million and combined with 3Q, the second half of 2023 finished ahead of the comparable period in 2022, even without the benefit of an extraordinary new win like GE. Turning to our 2024 financial outlook, we expect BPAS revenue growth of over 15% and adjusted EBITDA growth between 8% and 10%. Revenue growth of 4% to 6% reflects the impact from the timing of our 2023 bookings, the exit of the hosted business, and the year-over-year compared to federal thrift. As Katie and Jeremy will discuss, with our record backlog and strong pipeline, we are on track to achieve our midterm revenue growth guidance of 6% to 8%. All told, I'm incredibly proud of the way our team has executed on our transformation, not just in 2023, but over the past few years. To become the leader in this space, it took us 40 years to build the infrastructure to support the most complex organizations globally. And in less than four years, we have extended our leadership position by building a cloud-based platform with the most comprehensive collection of content to transform the HR function. For clients, the output is a one-stop shop that helps them bend the cost curve and deliver a better employee experience with enhanced productivity. Let me give an example of a client where we're helping solve for costs, experience, and productivity. Siemens has been a light client since 1996 and is focused on the health and well-being of its employees. Siemens chose a light to provide high-touch, tech-enabled health navigation services to its employees. Helping employees manage and navigate the complexity of the healthcare ecosystem is an opportunity to not only improve health outcomes, but to improve employee satisfaction. Upon rollout, employees and eligible dependents may choose with confidence to talk to doctors and facilities, or to receive expert medical opinions, surgery decision support, and even medical bill review, all while optimizing the value of Siemens' benefits program. I've spoken at length about driving outcomes for companies and their people and believe that the only way to get the results that clients seek is through engaging employees at an enterprise platform level. As the central hub, the Alight Work Life platform is leveraging AI-based technology to drive better engagement and decisions. To that end, I'm excited to introduce our recently launched next-generation AI engine, Alight Lumen AI. Lumen AI will merge novel and existing AI capabilities into a new, unified ecosystem to deliver product innovation and facilitate an interconnected experience for clients across all our solutions. We believe the tools currently being piloted will be a catalyst that drives value for clients by better engaging their employees across their benefits, such as personalized HR campaigns, health guidance, virtual assistant interactions, and intelligent document processing. This will complement the amazing proof points we see today, including helping a large client realize nearly 50 million in verified healthcare savings through our insights and automation engines by directing better healthcare choices. Helping another organization realize 5.4 times lower new hire turnover through our personalization engine and use of financial counselors by creating a personalized digital onboarding experience for all their new hires. And lastly, helping a large retailer reduce overpayment spend and payroll by nearly 200 million dollars. Examples like these are growing every day and represent real measurable outcomes attributable to our platform strategy. And while great for clients, the outcomes are also great for Alight. These outcomes only happen if employees trust our platform to guide them, and that's why we've been focused on the importance of a mobile-based platform. To give some perspective, this quarter we had nearly half a million monthly average mobile users, an 80% increase from the prior year, and 32% sequentially. Total mobile interactions for the entire year nearly doubled to over 19 million. This matters because first, it means more product penetration, and second, it means users are seeing real value when they do engage. That's the foundation to drive these client outcomes I just laid out and is driving value for our company. Developing Lumen AI and executing on our product roadmap would not be possible without our cloud migration, which is on track for completion mid-year. We'll start seeing the benefits of this program financially in the second half. Overall, I'm more excited than ever that the work we've done will continue to support our clients in solving the most complex decisions impacting their employees' health and financial security. With that, I'll turn it over to Katie and Jeremy to discuss the financial performance and our outlook. Katie, over to you.