Alight, Inc.

Good morning and thank you for holding. My name is Ivo and I will be your conference operator today. Welcome to Allied First Quarter 2024 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. And now, I would like to turn it over to Jeremy Cohen, Head of Investor Relations at Allied, to introduce today's speakers.

Good morning, and thank you for joining us. Earlier today, the company issued a press release with first quarter 2024 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, and 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 for management today are Stefan Scholl, CEO, Jeremy Heaton, CFO, Greg Goff, President, and Katie Rooney, who as announced earlier today will be stepping down from her CFO position and focusing on the COO role supporting the payroll and professional services divestiture until closure. After the prepared remarks, we will open the call up for questions. I'll now hand the call over to Stephan.

Thanks, Jeremy, and good morning. It's an exciting time for Alight with our first quarter highlighted by the announced sale of our professional services segment and HCM payroll outsourcing businesses, which remains on track to close mid-year 2024. Executing this transaction is a key priority for the long-term trajectory of Alight, and we have seen tremendous collaboration across both organizations, as we prepare our clients and over 8,000 employees for this transformational deal. Based on the great progress we have made to date and looking ahead to the closing of the transaction, we are reaffirming our midterm outlook on the remaining business with revenue growth of 4% to 6%, BPAT's revenue growth of at least 15%, and adjusted EBITDA margin of 28%, which would mark a total of 600 basis points of margin improvement versus 2023. This will be complemented by a stronger balance sheet, including net leverage below three times, enhanced cash flow generation, and an investor-friendly capital allocation framework supported by $248 million of authorized funding for share buybacks. With this attractive financial profile, we will emerge as a more simplified, focused company, steadfast in its mission to keep people healthy and financially secure. Turning to the quarter and then our view of 2024, we started the year with total company revenues excluding hosted nearly flat, as lower non-recurring project revenue offset strong growth of 22% from our BPAS solutions. BPAS revenues represented more than a quarter of total company revenue. Profitability remained stable, a testament to our transformational efforts that have delivered productivity savings. And building off a strong 2023, our operating cash flow conversion was 67% in Q1, up a full 20 points from last year. Given our typical seasonality, we don't anticipate continuing at this rate all year. However, by completing the restructuring program and continued execution on working capital initiatives, we are well positioned to drive stronger cash flow generation. For the balance of the year, we expect 2024 to be a tale of two halves, with the first half adversely impacted by the timing of large deal goal lives, lower non-recurring project revenue across both segments, and the exit from the hosted business. The second half will benefit from an increase in new deal goal lives, for which we have high visibility today as we continue to build the book of revenue under contract, which at quarter end was up to $3.1 billion for 2024 for the total company. Coupled with sales momentum and operational execution, our growth will ramp this year and quickly return to our midterm revenue growth target before year-end. Our confidence to sustain that growth post-close is grounded in the recent history of the benefits business, which since 2020 includes a 10% total revenue CAGR with BPAS as a driver at over 50% growth and has resulted in a $700 million increase to revenue under contract. Profitability will also improve through multiple levers, including an immediate uplift to margins upon closing the transaction. At the same time, we are on track to complete the backend cloud migration in the second half, which should be a key inflection point for profitability. With the data center exit, we continue to expect 100 million of annual run rate savings for the total company, with a light retaining approximately 75 million of the annualized benefit. Commercially, we continue to close meaningful BPAS deals, and our results demonstrate that our strategy is working. This quarter included large expansions with existing clients, where Alight continues to bring a differentiated set of solutions integrated through the Alight Work-Life platform. With one of the world's leading diversified manufacturing companies, our team demonstrated the value and outcomes with a real-life story of healthcare navigation. During the sales process, an executive asked if we could help one of their employees and family who was facing a healthcare crisis. Our team quickly mobilized by leveraging both the technology and our medical experts to bring the right support and care to this family. And through this example, the company immediately saw the value and impact the solution delivers while our value engineering team quantified the definitive ROI for rolling out the solution across the company. In another example, our team closed a $50 million public sector contract where we will provide the technology, administration, and domain expertise across 60,000 active members. We won because our decades of experience in this space, working with the largest organizations, have solidified a light as a tested and trusted partner. These wins are a microcosm of what we're seeing broadly. Large enterprises are continuing to invest in their people and solutions that drive engagement, better outcomes, and cost savings for the employer. While competitive, we believe the market continues to validate that the winning formula is grounded in a platform-based approach that simplifies the end-user experience. And so, as we continue building and closing deals in our pipeline, we're also simultaneously advancing our technology roadmap and building upon our platform advantages. Ongoing product innovation is core to the platform strategy, and we recently announced the latest release of a light work life. This biannual release focused on three key areas, strengthening our AI-driven support, deepening the integration of leaves and health navigation, and delivering tools that empower greater financial well-being. Taken together, these updates will enhance the employee experience with greater self-service and personalization features and deliver improved employer ROI with greater functionality and improved cost savings. I'm also excited to discuss the leadership announcement this morning, which is the result of thoughtful, long-term planning publicly demonstrated by Katie's promotion into the COO seat last summer. By extension of her promotion, Jeremy partnered closely with Katie for natural succession into the CFO role, with the global finance team reporting into him for the past nine months. I am thrilled to have Jeremy officially in the CFO role as he leverages his in-depth knowledge of our business, finance function, and investor base to advance our strategic initiatives. And with this transaction as a turning point, after 15 years with Aon and Alight, Katie will now focus on the COO role, supporting the closure of payroll and professional services divestiture, after which she will step down. Katie, as many of you know, has been instrumental to the foundation of Alight and our public listing. Personally, she has been a tremendous partner to me and a visionary for what Alight has become. Though we will miss her, she has built an outstanding team that we are confident will continue to execute on our transformation moving forward. I'm also pleased to announce Greg Gough's promotion to president of Alight, which includes his continued oversight of product, technology, and delivery, Greg and his team have moved mountains with our infrastructure planning, and post-transaction, his voice and expertise with AI, analytics, and platform will be even more important. Overseeing product and delivery, Greg is the best positioned to lead our teams in integrating our platform technology with our world-class services on a day-to-day basis for clients, and we look forward to him taking on a more public-facing role, as you may have seen through recent investor meetings, including today's call. We're excited about what he'll accomplish in his new position as president. My congratulations to Katie, Jeremy, and Greg on their next chapters, and my heartfelt thanks to each of them. And as announced on Monday, we're also pleased to have reached a constructive settlement with Starboard, who sees the value in where we are headed, and we look forward to their continued engagement and support. We've added two new board members, Dave Gilmette and Karitha Rushing, and welcome their deep domain expertise and diverse perspectives as we collectively push a light forward. Over the past two years, we have now refreshed half of our board. Overall, we're moving fast, and as I stated, executing the transaction is a key priority to achieve our long-term goals. None of this is possible without the hard work of our colleagues who continue to serve our clients with excellence. Their dedication to our clients and to each other is how we will continue to succeed and is why we recently had the honor of being named a Top 100 Places to Work by Fortune magazine. With that, I'll turn it over to Jeremy to walk us through the financials.