Alight, Inc.

Good morning, and thank you for holding. My name is Danae, and I will be your conference operator today. Welcome to a light third quarter 2025 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. And now, I would like to turn the call over to Jeremy Cohen. Head of Investor Relations at Alight to introduce today's speakers. Please go ahead.

Good morning, and thank you for joining us. Earlier today, the company issued a press release with its third quarter 2025 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 SEC, including the company's most recent Form 10-K and Form 10-Q, 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 except as required by law. 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. Financial comparisons related to prior year free cash flow made on today's call are on a pro forma basis giving effect to the payroll and professional services transaction completed in July of 2024 and are consistent with the presentation we have published on our investor relations website. On the call from management today are Dave Gilmette, CEO, and Jeremy Heaton, CFO. After the prepared remarks, we will open the call up for questions. I will now hand the call over to Dave.

Thank you, Jeremy, and good morning, everyone. We've made significant progress during the quarter to strengthen our position as a technology-enabled employee benefits services company. We've accelerated our technology roadmap and delivery capabilities while reimagining the client and participant experience with new solutions already in use by some of our largest clients. Through our AI and automation investments and rapidly expanding partner collaborations, we are bringing immediate benefit to clients and ensuring our competitive advantages for the long run. We feel good about the substantial improvements we have made in our product line with more to come. Likewise, our service delivery is unmatched. Clients are impressed with our new AI-centric services and delivery capabilities. The next step is improving our commercial effectiveness, starting with a new leader with deep industry expertise. Our emphasis includes the diversification of our revenue streams, including through our partner network, while continuing our operational progress. With the current macro environment, the continuing and unprecedented rise of healthcare costs for our clients, and the advancement of AI, I'm more confident than ever that our initiatives, coupled with our track record, position us best to tackle these dynamics. With that, let's review our quarter. For the third quarter, revenue was $533 million compared to $555 million a year earlier, and adjusted EBITDA was up 17% to $138 million. Free cash flow year to date remains strong and is up 45% from the prior year to 151 million. Jeremy will provide additional color on quarterly results in a few minutes. As I mentioned, one way to accelerate our financial performance is by expanding our comprehensive partner ecosystem. Our refresh strategy in this area is making fast progress to meet the changing needs of clients and participants while sharing in the value creation with our partners. Our relevance with 35 million participants is unmatched, and potential partners are looking for ways to work with us to unlock their own value. For example, recently we welcomed SORT Health to the Alight Partner Network, complementing our long-term partner, Hinge. Participants now have access to an additional leading clinical grade resource for managing pain and avoiding surgery as well as access to a behavioral health and mental wellbeing platform. Our Goldman Sachs asset management integration into a light work life, which we mentioned last quarter is well underway. We've already signed our first client with several more active client conversations taking place. And just last week, we introduced a new guaranteed income solution through MetLife. This arrangement allows participants to purchase solutions that convert a portion of their savings into predictable monthly income as they prepare for retirement. Over a dozen proposals are outstanding from additional top-tier partners, and you should expect a regular cadence of announcements on this front. At the same time, our investments in the most impactful technology and service capabilities are moving at an aggressive pace. Within the call center, we enhanced our automated voice response system. This technology drives a better user experience and has contributed to a 13% drop in call volumes year over year. Our new AI agent assist software is in pilot with nearly a dozen clients. This tool assesses calls in real time to provide customer care agents with next best actions to more effectively service participants. Finally, in September, we brought critical delivery and technology talent back in-house, which allows us to better manage service quality productivity these actions along with previous improvements are strengthening our service quality our participant satisfaction scores increased to 90% which is the highest level achieved since completing our technology transformation regarding product advancements in our AI roadmap continue to accelerate the embedded value in our petabytes of data is unmatched which means we can drive a far more accurate predictive and and differentiated user experience than anyone in our market. And our carefully curated mix of technology and services provides a trusted high-tech, human touch experience that is core to our success. I want to share a few highlights from the last three months. First, we piloted a conversational AI agent solution with two of our largest clients to assist with annual enrollment this season. Broadly available to all clients in 2026, This is a game changer to help participants feel more confident in their benefit selections while requiring less human intervention. Next, we've rolled out GenAI-enabled search summaries to more than 95% of our clients. AI-enabled searches are growing exponentially, and we delivered over 300,000 summaries in October alone. The breadth and depth of our platform will only get stronger as more users interface with this feature. And finally, we announced our expanded collaboration with IBM, a decades-long business partner, to deploy IBM's Watson X orchestrate agentic framework across the light. These advancements in our capabilities are critical to our Renew Every Day program agenda. We have been successful at retaining top clients with a large majority of our largest clients going through the renewal process in the past two years. Since our last earnings call, some of our noteworthy renewals include Campbell's, Essilor Luxottica, Ally Bank, Air Canada, and MetLife. Our client management team is focused on proactively renewing and expanding relationships with our tremendous client base. Our renewal rate in the large market was up significantly in 24, and we're pleased to maintain that same level in 2025. And we're working hard on expanding Renew every day to all of our clients. strengthening the approach to supporting smaller clients and point solutions. We are making great progress with the Renew Every Day program and expect continued improvement to our renewal levels over time. I'm very pleased to share that Steve Rush has joined as our new Chief Commercial Officer. Steve's long history with Alight, along with his deep understanding of our clients' needs, position him to make a meaningful and quick impact. Steve is a highly respected leader in the benefits industry, and he's excited to rejoin a team in business he already knows very well. As I step back on where we are today, our progress has been substantial in moving us forward to our future. I'm proud of how our team members have come together to advance our technology and operations, and I want to thank them for their hard work and dedication. We have more scale, scope and talent than any of our competitors today and the resulting opportunity in front of us is immense drive higher bookings retention and new streams of partnership revenue operational results of our initiatives will be evident before they play through the financials and we are confident in our ability to deliver an unmatched benefits experience for clients that are emboldened in new technology with that let me turn it over to jeremy thanks and good morning