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Dec 31, 2023
Alight Q4 2023 Earnings Report
Alight reported fourth quarter and full year 2023 results, demonstrating revenue growth and strategic advancements.
Key Takeaways
Alight, Inc. reported a 1.9% increase in revenue for Q4 2023, reaching $960 million. BPaaS revenue grew by 29.8% to $222 million. The company's gross profit was $369 million, and adjusted EBITDA grew by 11.6% to $270 million. A strategic portfolio review has been authorized to accelerate the platform and wellbeing strategy.
Revenue increased by 1.9% to $960 million compared to the prior year period.
Business Process as a Service (BPaaS) revenue grew 29.8% to $222 million, representing 23.1% of total revenue.
Gross profit reached $369 million, with a gross profit margin of 38.4%.
Adjusted EBITDA increased by 11.6% to $270 million over the prior year period.
Alight
Alight
Forward Guidance
Alight expects BPaaS to be the high-revenue growth category at over 15% and the driver of the overall trajectory. Total annual revenue growth is expected to be 6-8% through the mid-term, we expect 2024 to be slightly lower at 4-6% that ramps throughout the year driven by the timing of our 2023 bookings, our exit from the Hosted business, and our first half compare.
Positive Outlook
- BPaaS Revenue of over $870 million (growth of 15%+) expected.
- Adjusted EBITDA of $800 million to $815 million expected.
- Adjusted diluted EPS of $0.72 to $0.77 expected.
- Operating Cash Flow Conversion rate of 55-65% expected.
- The business has $3.0 billion revenue under contract for 2024
Challenges Ahead
- Total annual revenue growth is expected to be 6-8% through the mid-term, we expect 2024 to be slightly lower at 4-6%
- Slight decline in Employer Solutions recurring revenue as a result of the isolated impact related to a client in the Retiree Health business.
- Net loss of $86 million compared to net loss of $66 million in the prior year period driven by a $136 million increase in non-cash charges.
- Company’s loss before income tax benefit was $116 million compared to loss before income tax expense of $7 million in the prior year period.
- Strategic portfolio review to accelerate platform and wellbeing strategy.